Exhibit 10.15
EMPLOYMENT AGREEMENT
AGREEMENT dated as of the 25th day of August, 2004 by and
between MDC PARTNERS INC., a corporation existing under the laws of Canada
(the "Company"), and XXXXXX XXXXX (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company wishes to employ the Executive and the
Executive wishes to accept such employment, upon the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, receipt of which is hereby acknowledged, the
parties hereto agree as follows:
1. Employment
The Company agrees to employ the Executive during the Term
specified in paragraph 2, and the Executive agrees to accept such employment,
upon the terms and conditions hereinafter set forth.
2. Term
Subject to the provisions contained in paragraphs 6 and 7,
the Executive's employment by the Company shall be for a term commencing on
September 8, 2004 and expiring on the close of business on September 7, 2007
(the "Initial Term"); provided, however, the term of the Executive's
employment by the Company shall continue for an indefinite period thereafter
unless and until either party shall give to the other 30 days advance written
notice of expiration of the term (a "Notice of Termination") (the Initial Term
and the period, if any, thereafter, during which the Executive's employment
shall continue are collectively referred to as the "Term"). A termination of
employment by the giving of a Notice of Termination by the Company under this
paragraph 2 shall not be deemed to be a termination without Cause under
paragraph 6(c) hereof. Any Notice of Termination given under this paragraph 2
shall specify the date of termination (which may not be earlier than the close
of business on September 7, 2007) and may be given any time after August 7,
2007. The Company shall have the right at any time during such 30 day notice
period, to relieve the Executive of his offices, duties and responsibilities
and to place him on a paid leave-of-absence status, provided that during such
notice period the Executive shall remain a full-time employee of the Company
and shall continue to receive his then current salary compensation, bonus and
other benefits as provided in this Agreement. The date on which the Executive
ceases to be employed by the Company, regardless of the reason therefore, is
referred to in this Agreement as the "Date of Termination".
3. Duties and Responsibilities
(a) Title. During the Term, the Executive shall have the
position of Vice Chairman and Executive Vice President of the Company.
(b) Duties. The Executive shall report directly to the Board
of Directors of the Company (the "Board") and the Chief Executive Officer of
the Company (the "MDC CEO"), currently Xxxxx Xxxxx, at such times and in such
detail as it or he shall reasonably require. The Executive shall be entitled
to attend and participate at all Board meetings (as an ex-officio member) at
which the full Board and/or Xxxxx Xxxxx is invited to attend, or to which he
is otherwise invited. The Executive shall perform such executive and
managerial duties consistent with his position as designated in paragraph 3(a)
and as may be assigned to him from time to time by or under authority of the
Board and/or the MDC CEO.
(c) Scope of Employment. The Executive's employment by the
Company as described herein shall be full-time and exclusive, and during the
Term, the Executive agrees that he will (i) devote all of his business time
and attention, his reasonable best efforts, and all his skill and ability to
promote the interests of the Company; and (ii) carry out his duties in a
competent manner and serve the Company faithfully and diligently under the
direction of the Board and the MDC CEO. Notwithstanding the foregoing, the
Executive shall be permitted to (i) serve on the board of directors of two
unaffiliated companies (including Live Person, Inc.); provided that such
companies are not engaged in any activity which is competitive with the
Company or its subsidiaries and affiliates (the "MDC Group"), and (ii) engage
in charitable and civic activities and manage his personal passive
investments, provided that such passive investments are not in a company which
transacts business with the Company or its affiliates or engages in business
competitive with that conducted by the Company (or, if such company does
transact business with the Company, or does engage in a competitive business,
it is a publicly held corporation and the Executive's participation is limited
to owning less than 1% of its outstanding shares), and further provided that
such activities (individually or collectively) do not materially interfere
with the performance of his duties or responsibilities under this Agreement.
(d) Office Location. During the Term, the Executive's
services hereunder shall be performed at the offices of the Company, which
shall be within a twenty five (25) mile radius of New York City, subject to
necessary travel requirements to Toronto, Canada and other MDC Group company
locations in order to carry out his duties in connection with his position
hereunder.
4. Compensation
(a) Base Salary. As compensation for his services hereunder,
during the Term the Company shall pay the Executive in accordance with its
normal payroll practices, an annualized base salary of $475,000 ("Base
Salary").
(b) Sign-on Bonus. Simultaneously with the execution and
delivery of this Agreement, the Company shall pay the Executive a sign-on
bonus in an amount equal to $100,000 (the "Sign-on Bonus").
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(c) Calendar Year 2004 Cash Bonus. In respect of calendar
year 2004 only, the Executive shall receive a cash bonus in the amount of
$200,000, to be paid on or prior to April 30, 2005 (the "2004 Cash Bonus").
(d) Annual Discretionary Cash Bonus. During the Term, in
respect of all calendar years following calendar year 2004, the Executive
shall be eligible to receive an annual discretionary cash bonus in an amount
up to 100% of his Base Salary, as determined by the MDC CEO and the
Compensation Committee of the Board, based upon the Executive's performance,
the overall financial performance of the Company and such other factors as the
MDC CEO and the Board shall deem reasonable and appropriate (the "Annual
Discretionary Cash Bonus"), to be paid in accordance with the Company's normal
bonus payment procedures.
(e) Restricted Stock. The Executive shall receive an award
of 50,000 restricted subordinate voting shares of the Company's Class A Shares
("MDC Restricted Stock"), in accordance with and subject to the terms and
conditions of a separate restricted stock agreement (the "MDC Restricted Stock
Agreement") to be executed and delivered by the Executive and the Company.
(f) Stock Options. The Executive shall be granted stock
options to acquire up to 100,000 shares in the capital of the Company ("MDC
Stock Options"), in accordance with and subject to the terms and conditions of
the MDC stock option incentive plan (the "MDC Stock Option Plan"), and a
separate stock option agreement (the "MDC Stock Option Agreement") to be
executed and delivered by the Executive and the Company.
(g) Stock Appreciation Rights. The Executive shall receive
an award of 150,000 stock appreciation rights ("MDC SARs"), in accordance with
and subject to the terms and conditions of a separate stock appreciation
rights agreement (the "MDC Stock Appreciation Rights Agreement") to be
executed and delivered by the Executive and the Company.
5. Expenses; Fringe Benefits
(a) Expenses. The Company agrees to pay or to reimburse the
Executive for all reasonable, ordinary, necessary and documented business or
entertainment expenses incurred during the Term in the performance of his
services hereunder in accordance with the policy of the Company as from time
to time in effect. The Executive, as a condition precedent to obtaining such
payment or reimbursement, shall provide to the Company any and all statements,
bills or receipts evidencing the travel or out-of-pocket expenses for which
the Executive seeks payment or reimbursement, and any other information or
materials, as the Company may from time to time reasonably require.
(b) Benefit Plans.
(i) The parties agree that upon the execution of
this Agreement, the Executive and his dependents shall elect
to continue to participate under the terms of the group
health plans of his Prior Employer (as defined in paragraph
24 below) (the "Prior Employer Plans"), in accordance with
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and subject to the requirements of the Consolidated Omnibus
Budget Reconciliation Act of 1985 ("COBRA"). The Company
agrees that during the Term, and until the earlier of (i)
such time as the Executive is eligible to participate in a
United States group health plan established by the Company
(the "Company US Health Plans"), or (ii) the expiration of
the maximum period under which the Executive could be
covered under COBRA (the "Prior Coverage Expiration Date"),
it shall reimburse the Executive for the amount of any COBRA
premiums paid by the Executive to his Prior Employer, plus
an amount equal to the tax, if any, payable on such
reimbursement (the "COBRA Premium Payments"). From and after
the Prior Coverage Expiration Date, the Company's obligation
to make COBRA Premium Payments shall terminate, and the
Company shall pay the costs of all premiums, deductibles and
co-payments payable by the Executive and his dependents in
connection with his and his dependents' participation in
such Company US Health Plans, such that the cost to the
Executive shall be no greater than that incurred by the
Executive and his dependents under the Prior Employer Plans.
The Company agrees that as soon as practicable following the
date of this Agreement, it shall use its reasonable best
efforts to establish the Company US Health Plans.
(ii) Except as otherwise provided in paragraph
5(b)(i) above, during the Term, the Executive and, to the
extent eligible, his dependents, shall be eligible to
participate in and receive all benefits under any welfare
benefit plans and programs (including without limitation,
disability, group life (including accidental death and
dismemberment) and business travel insurance plans and
programs) provided by the Company to its senior executives
and, without duplication, its employees generally, subject,
however, to the generally applicable eligibility and other
provisions of the various plans and programs in effect from
time to time.
(c) Retirement Plans. During the Term, the Executive shall
be entitled to participate in all retirement plans and programs (including
without limitation any profit sharing/401(k) plan) provided by the Company to
its senior executives generally and, without duplication, its employees
generally, subject, however, to the generally applicable eligibility and other
provisions of the various plans and programs in effect from time to time. In
addition, during the Term, the Executive shall be entitled to receive fringe
benefits and perquisites in accordance with the plans, practices, programs and
policies of the Company from time to time in effect which are made available
to the senior executives of the Company generally and, without duplication, to
its employees generally.
(d) Vacation. The Executive shall be entitled to four weeks
vacation in accordance with the Company's policy, with no right of carry over,
to be taken at such times as shall not, materially interfere with the
Executive's fulfillment of his duties hereunder, and shall be entitled to as
many holidays, sick days and personal days as are in accordance with the
Company's policy then in effect generally for its employees.
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(e) Car Allowance and other Perquisites. During the Term,
the Company will provide the Executive with an annual allowance of $25,000 to
cover the costs of leasing, insuring, garaging and maintaining an automobile
for use in the business of the Company, as well as other perquisites, to be
paid in accordance with the Company's normal payroll practices (the
"Perquisite Allowance").
(f) Legal Expenses. The Company shall pay or reimburse the
Executive for the reasonable legal fees and expenses incurred by the Executive
in connection with the negotiation of this Agreement, against submission of
invoices for such legal fees, not to exceed $20,000.
6. Termination
(a) Termination for Cause. The Company, by direction of the
Board or the MDC CEO, shall be entitled to terminate the Term and to discharge
the Executive for "Cause" effective upon the giving of written notice. The
term "Cause" shall be limited to the following grounds:
(i) the Executive's failure or refusal to
materially perform his duties and responsibilities as set
forth in paragraph 3 hereof or abide by the reasonable
directives of the Board or the MDC CEO, or the failure of
the Executive to devote all of his business time and
attention exclusively to the business and affairs of the
Company in accordance with the terms hereof, in each case if
such failure or refusal is not cured (if curable) within 20
days after written notice thereof to the Executive by the
Company;
(ii) the willful and unauthorized misappropriation
of the funds or property of the Company;
(iii) the use of alcohol or illegal drugs,
interfering with the performance of the Executive's
obligations under this Agreement, continuing after written
warning;
(iv) the conviction in a court of law of, or
entering a plea of guilty or no contest to, any felony or
any crime involving moral turpitude, dishonesty or theft;
(v) the material nonconformance with the Company's
policies against racial or sexual discrimination or
harassment, which nonconformance is not cured (if curable)
within 10 days after written notice to the Executive by the
Company;
(vi) the commission in bad faith by the Executive
of any act which materially injures or could reasonably be
expected to materially injure the reputation, business or
business relationships of the Company;
(vii) the resignation by the Executive on his own
initiative (other than pursuant to a termination by the
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Executive for "Good Reason" (as defined in paragraph 6(b)
hereof), or upon a Change of Control (as defined below));
(viii) any breach (not covered by any of the
clauses (i) through (vii) above) of paragraphs 8, 9, 11, 19
and 24, if such breach is not cured (if curable) within 20
days after written notice thereof to the Executive by the
Company.
Any notice required to be given by the Company pursuant to clause (i), (v) or
(viii) above shall specify the nature of the claimed breach and the manner in
which the Company requires such breach to be cured (if curable). In the event
that the Executive is purportedly terminated for Cause and the arbitrator
appointed pursuant to paragraph 19 determines that Cause as defined herein was
not present, then such purported termination for Cause shall be deemed a
termination without Cause pursuant to paragraph 6(c) and the Executive's
rights and remedies will be governed by paragraph 7(b), in full satisfaction
and in lieu of any and all other or further remedies the Executive may have.
(b) Termination for Good Reason. Provided that a Cause event
has not occurred and has not been cured, (if curable), the Executive shall be
entitled to terminate this Agreement and the Term hereunder for Good Reason
(as defined below) at any time during the Term by written notice to the
Company not more than 20 days after the occurrence of the event constituting
such Good Reason. "Good Reason" shall be limited to (i) a breach by the
Company of a material provision of this Agreement, which breach remains
uncured (if curable) for a period of 20 days after written notice of such
breach from the Executive to the Company (such notice to specify the nature of
the claimed breach and the manner in which the Executive requires such breach
to be cured), (ii) the Company's failure to pay any compensation or benefits,
as set forth in paragraphs 4 or 5, which action is not reversed within 10 days
after written notice of the breach from the Executive to the Company, (iii) a
material diminution of the Executive's title, duties and responsibilities as
set forth in paragraph 3, without his prior written consent, which breach
remains uncured (if curable) for a period of 20 days after written notice of
such breach from the Executive to the Company (such notice to specify the
nature of the claimed breach and the manner in which the Executive requires
such breach to be cured. In the event that the Executive purportedly
terminates his employment for Good Reason and the arbitrator appointed
pursuant to paragraph 19 determines that Good Reason as defined herein was not
present, then such purported termination for Good Reason shall be deemed a
termination for Cause pursuant to paragraph 6(a)(vii) and the Executive's
rights and remedies will be governed by paragraph 7(a), in full satisfaction
and in lieu of any and all other or further remedies the Executive may have.
(c) Termination without Cause. The Company, by direction of
the Board or the MDC CEO, shall have the right at any time during the Term to
terminate the employment of the Executive without Cause by giving written
notice to the Executive setting forth a Date of Termination.
(d) Termination for Death or Disability. In the event of the
Executive's death, the Date of Termination shall be the date of the
Executive's death. In the event the Executive shall be unable to perform his
duties hereunder by virtue of illness or physical or mental incapacity or
disability (from any cause or causes whatsoever) in substantially the manner
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and to the extent required hereunder prior to the commencement of such
disability (all such causes being herein referred to as "Disability") and the
Executive shall fail to perform such duties for periods aggregating 120 days,
whether or not continuous, in any continuous period of 360 days, the Company
shall have the right to terminate the Executive's employment hereunder as at
the end of any calendar month during the continuance of such Disability upon
at least 30 days' prior written notice to him.
(e) Termination by the Executive upon a Change of Control.
Provided that a Cause event has not occurred and has not been curable (if
curable), the Executive shall be entitled to terminate this Agreement and the
Term hereunder upon a Change of Control (as defined below) by written notice
to the Company not more than 20 days after the occurrence of the event
constituting such Change of Control. A "Change of Control" shall be limited to
(i) the closing of a transaction which results in a shareholder of the Company
(other than Xxxxx Xxxxx, directly or indirectly) owning, directly or
indirectly, equity of the Company representing greater than 50% of the voting
power of the Company's outstanding securities, or (ii) Xxxxx Xxxxx no longer
possessing the title of Chief Executive Officer of the Company or no longer
having such executive and managerial duties and responsibilities customary to
his office, (iii) the closing of a transaction which results in the Company
selling all or substantially all of its assets (in each instance other than
any transfer by the Company or any of its affiliates of their respective
interest in the Company to another wholly-owned subsidiary of another MDC
Group company (an "MDC Internal Transfer").
7. Effect of Termination of Employment.
(a) Termination by the Company for Cause; by the Executive
without Good Reason; by Death or Disability; or pursuant to a Notice of
Termination delivered by the Executive pursuant to paragraph 2 above. In the
event of the termination of the employment of the Executive (1) by the Company
for Cause, (2) by the Executive without Good Reason, (3) by reason of death or
Disability, or (4) pursuant to a Notice of Termination delivered by the
Executive pursuant to paragraph 2 above, the Executive shall be entitled to
the following payments and benefits, subject to any appropriate offsets, as
permitted by applicable law, for debts or money due to the Company or an
affiliate thereof (collectively, "Offsets"):
(i) unpaid Base Salary and Perquisite Allowance
through, and any unpaid reimbursable expenses outstanding as
of, the Date of Termination; and
(ii) all benefits, if any, that had accrued to the
Executive through the Date of Termination under the plans
and programs described in paragraphs 5(b) and (c) above, or
any other applicable plans and programs in which he
participated as an employee of the Company, in the manner
and in accordance with the terms of such plans and programs;
it being understood that any and all rights that the
Executive may have to severance payments by the Company
shall be determined and solely based on the terms and
conditions of this Agreement and not based on the Company's
severance policy then in effect, if any.
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In the event of the termination of the employment of the Executive (1) by the
Company for Cause, (2) by the Executive without Good Reason, (3) by reason of
death or Disability, or (4) pursuant to a Notice of Termination delivered by
the Executive pursuant to paragraph 2 above, except as provided in this
paragraph 7(a), the Company shall have no further liability to the Executive
or the Executive's heirs, beneficiaries or estate for damages, compensation,
benefits, severance, indemnities or other amounts of whatever nature, directly
or indirectly, arising out of or otherwise related to this Agreement and the
Executive's employment or cessation of employment with the Company (it being
agreed by the Company that upon the death of the Executive, the Company's
obligations under paragraph 24(b) below shall inure to the benefit of the
Executive's estate and heirs).
(b) Termination by the Company without Cause, by the Company
pursuant to a Notice of Termination, or by the Executive for Good Reason. In
the event of (1) a termination by the Company without Cause, (2) a termination
by the Executive for Good Reason, or (iii) by the Company pursuant to a Notice
of Termination, the Executive shall be entitled to the following payments and
benefits, subject to any Offsets:
(i) his Base Salary and Perquisite Allowance, when
otherwise payable, through the following period: (x)
September 7, 2007, if the Date of Termination is on or prior
to September 7, 2005; or (y) twenty four (24) months from
the Date of Termination, if the Date of Termination occurs
after September 7, 2005 (the "24 Month Severance Period");
(ii) his 2004 Cash Bonus when otherwise payable;
(iii) his Annual Discretionary Cash Bonus with
respect to the calendar year prior to the Date of
Termination, when otherwise payable, but only to the extent
not already paid;
(iv) a pro-rata portion of his Annual Discretionary
Cash Bonus with respect to the calendar year in which the
Date of Termination occurred, when otherwise payable, (such
pro-rata amount to be equal to the product of (A) the amount
of the Annual Discretionary Cash Bonus for such calendar
year, times (B) a fraction, (x) the numerator of which shall
be the number of calendar days commencing January 1 of such
year and ending on the Date of Termination, and (y) the
denominator of which shall equal 365;
(v) any unpaid reimbursable expenses outstanding as
of the Date of Termination;
(vi) all benefits, if any, that had accrued to the
Executive through the Date of Termination under the plans
and programs described in paragraphs 5(b) and (c) above, or
any other applicable benefit plans and programs in which he
participated as an employee of the Company, in the manner
and in accordance with the terms of such plans and programs;
it being understood that any and all rights that the
Executive may have to severance payments by the Company
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shall be determined and solely based on the terms and
conditions of this Agreement and not based on the Company's
severance policy then in effect, if any;
(vii) continued participation on the same basis in
the plans and programs set forth in paragraph 5(b) and to
the extent permitted under applicable law, paragraph 5(c)
(such benefits collectively called the "Continued Plans") in
which he was participating on the Date of Termination (as
such Continued Plans are from time to time in effect at the
Company) until the earlier of (x) the end of the period that
he receives payments under clause (i) of this paragraph 7(b)
or (y) the date, or dates, he is eligible to receive
coverage and benefits under the same type of plan of a
subsequent employer; provided, however, if the Executive is
precluded from continuing his participation in any Continued
Plan, then the Company will be obligated to pay him the
economic equivalent of the benefits provided under the
Continued Plan in which he is unable to participate, for the
period specified above, plus an amount equal to the tax, if
any, payable by him thereon, it being understood that the
economic equivalent of a benefit foregone shall be deemed
the lowest cost in the State of New York that would be
incurred by the Executive in obtaining such benefit himself
on an individual basis; and
(viii) such vesting and acceleration of shares of
MDC Restricted Stock, MDC Stock Options and MDC SAR's, all
in accordance with the terms and conditions of each
respective MDC Restricted Stock Agreement, MDC Stock Option
Agreement, and MDC Stock Appreciation Rights Agreement.
In connection with a termination by the Company without Cause, by the
Executive for Good Reason, or by the Company pursuant to a Notice of
Termination, except as provided in this paragraph 7(b), the Company shall have
no further liability to the Executive or the Executive's heirs, beneficiaries
or estate for damages, compensation, benefits, severance, indemnities or other
amounts of whatever nature, directly or indirectly, arising out of or
otherwise related to this Agreement and the Executive's employment or
cessation of employment with the Company (it being agreed that the Company's
obligations under paragraph 24(b) shall survive in accordance with its terms).
The Executive shall be under no duty to mitigate damages hereunder; provided,
however, in the event that the Executive obtains any other reasonably
comparable employment or consulting arrangement, he shall immediately notify
the Company, and any compensation and benefits earned by the Executive
therefrom shall reduce the Company's severance obligations under this
paragraph 7(b). From time to time during the 24 Month Severance Period, upon
the Company's reasonable written request, the Executive shall provide the
Company with written verification (such as wage stubs and new employer
verifications) of amounts earned from such other employment or consulting
arrangements, as well as when and if he is entitled to receive coverage under
the benefit plans of any new employer in which he participates. In the event
the Executive fails to supply such information within twenty (20) days after
requested by the Company, the obligations of the Company under this paragraph
7(b) shall terminate. The making of any severance payments and providing the
other benefits as provided in this paragraph 7(b) is conditioned upon the
Executive signing and not revoking a separation agreement, a copy of which is
attached hereto as Exhibit A (the "Separation Agreement"). In the event the
Executive breaches any provisions of the Separation Agreement or the
provisions of paragraph 8 of this Agreement, in addition to any other remedies
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at law or in equity available to it, the Company may cease making any further
payments and providing the other benefits provided for in this paragraph 7(b),
without affecting its rights under this Agreement or the Separation Agreement.
(c) Termination by the Executive upon a Change of Control.
In the event of a termination by the Executive upon a Change of Control, the
Executive shall be entitled to the following payments and benefits, subject to
any Offsets:
(i) his Base Salary and Perquisite Allowance,
through the following period: (x) September 7, 2007, if the
Date of Termination is on or prior to March 7, 2006; or (y)
eighteen (18) months from the Date of Termination, if the
Date of Termination occurs after March 7, 2006 (the "18
Month Severance Period"); provided that the payments under
this clause (i) shall be paid in accordance with the
Company's normal payroll practices over a twelve (12) month
period;
(ii) his 2004 Cash Bonus when otherwise payable;
(iii) his Annual Discretionary Cash Bonus with
respect to the calendar year prior to the Date of
Termination, when otherwise payable, but only to the extent
not already paid;
(iv) a pro-rata portion of his Annual Discretionary
Cash Bonus with respect to the calendar year in which the
Date of Termination occurred, when otherwise payable, (such
pro-rata amount to be equal to the product of (A) the amount
of the Annual Discretionary Cash Bonus for such calendar
year, times (B) a fraction, (x) the numerator of which shall
be the number of calendar days commencing January 1 of such
year and ending on the Date of Termination, and (y) the
denominator of which shall equal 365;
(v) any unpaid reimbursable expenses outstanding as
of the Date of Termination;
(vi) all benefits, if any, that had accrued to the
Executive through the Date of Termination under the plans
and programs described in paragraphs 5(b) and (c) above, or
any other applicable benefit plans and programs in which he
participated as an employee of the Company, in the manner
and in accordance with the terms of such plans and programs;
it being understood that any and all rights that the
Executive may have to severance payments by the Company
shall be determined and solely based on the terms and
conditions of this Agreement and not based on the Company's
severance policy then in effect, if any; and
(vii) continued participation on the same basis in
all Continued Plans in which he was participating on the
Date of Termination (as such Continued Plans are from time
to time in effect at the Company) until the earlier of (x)
the 18 Month Severance Period or (y) the date, or dates, he
is eligible to receive coverage and benefits under the same
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type of plan of a subsequent employer; provided, however, if
the Executive is precluded from continuing his participation
in any Continued Plan, then the Company will be obligated to
pay him the economic equivalent of the benefits provided
under the Continued Plan in which he is unable to
participate, for the period specified above, plus an amount
equal to the tax, if any, payable by him thereon, it being
understood that the economic equivalent of a benefit
foregone shall be deemed the lowest cost in the State of New
York that would be incurred by the Executive in obtaining
such benefit himself on an individual basis; and
(viii) such vesting and acceleration of shares of
MDC Restricted Stock, MDC Stock Options and MDC SAR's, all
in accordance with the terms and conditions of each
respective MDC Restricted Stock Agreement, MDC Stock Option
Agreement, and MDC Stock Appreciation Rights Agreement.
In connection with a termination by the Executive upon a Change of Control,
except as provided in this paragraph 7(c), the Company shall have no further
liability to the Executive or the Executive's heirs, beneficiaries or estate
for damages, compensation, benefits, severance, indemnities or other amounts
of whatever nature, directly or indirectly, arising out of or otherwise
related to this Agreement and the Executive's employment or cessation of
employment with the Company (it being agreed that the Company's obligations
under paragraph 24(b) shall survive in accordance with its terms). The
Executive shall be under no duty to mitigate damages hereunder. The making of
any severance payments and providing the other benefits as provided in this
paragraph 7(c) is conditioned upon the Executive signing and not revoking a
Separation Agreement. In the event the Executive breaches any provisions of
the Separation Agreement or the provisions of paragraph 8 of this Agreement,
in addition to any other remedies at law or in equity available to it, the
Company may cease making any further payments and providing the other benefits
provided for in this paragraph 7(c), without affecting its rights under this
Agreement or the Separation Agreement.
8. Non-Solicitation/Non-Servicing Agreement and Protection of
Confidential Information
(a) Non-Solicitation/Non-Servicing. The parties hereto agree
that the covenants given in this paragraph 8 are being given incident to the
agreements and transactions described herein, and that such covenants are
being given for the benefit of the Company. Accordingly, the Executive
acknowledges (i) that the business and the industry in which the Company
competes is highly competitive; (ii) that as a key executive of the Company he
has participated in and will continue to participate in the servicing of
current clients and/or the solicitation of prospective clients, through which,
among other things, the Executive has obtained and will continue to obtain
knowledge of the "know-how" and business practices of the Company, in which
matters the Company has a substantial proprietary interest; (iii) that his
employment hereunder requires the performance of services which are special,
unique, extraordinary and intellectual in character, and his position with the
Company places and placed him in a position of confidence and trust with the
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clients and employees of the Company; and (iv) that his rendering of services
to the clients of the Company necessarily required and will continue to
require the disclosure to the Executive of confidential information (as
defined in paragraph 8(b) hereof) of the Company. In the course of the
Executive's employment with the Company, the Executive has and will continue
to develop a personal relationship with the clients of the Company and a
knowledge of those clients' affairs and requirements, and the relationship of
the Company with its established clientele will therefore be placed in the
Executive's hands in confidence and trust. The Executive consequently agrees
that it is a legitimate interest of the Company, and reasonable and necessary
for the protection of the confidential information, goodwill and business of
the Company, which is valuable to the Company, that the Executive make the
covenants contained herein and that the Company would not have entered into
this Agreement unless the covenants set forth in this paragraph 8 were
contained in this Agreement. Accordingly, the Executive agrees that during the
period that he is employed by the Company and for a period of eighteen (18)
months thereafter (such period being referred to as the "Restricted Period"),
he shall not, as an individual, employee, consultant, independent contractor,
partner, shareholder, or in association with any other person, business or
enterprise, except on behalf of the Company, directly or indirectly, and
regardless of the reason for his ceasing to be employed by the Company:
(i) attempt in any manner to solicit or accept from
any client business of the type performed by the Company or
to persuade any client to cease to do business or to reduce
the amount of business which any such client has customarily
done or is reasonably expected to do with the Company,
whether or not the relationship between the Company and such
client was originally established in whole or in part
through the Executive's efforts; or
(ii) employ as an employee or retain as a
consultant any person, firm or entity who is then or at any
time during the preceding twelve months was an employee of
or exclusive consultant to the Company, or persuade or
attempt to persuade any employee of or exclusive consultant
to the Company to leave the employ of the Company or to
become employed as an employee or retained as a consultant
by any person, firm or entity other than the Company; or
(iii) render to or for any client any services of
the type which are rendered by the Company.
As used in this paragraph 8, the term "Company" shall include any subsidiaries
of the Company and the term "client" shall mean (1) anyone who is a client of
the Company on the Date of Termination, or if the Executive's employment shall
not have terminated, at the time of the alleged prohibited conduct (any such
applicable date being called the "Determination Date"); (2) anyone who was a
client of the Company at any time during the one year period immediately
preceding the Determination Date; (3) any prospective client to whom the
Company had made a new business presentation (or similar offering of services)
at any time during the one year period immediately preceding the Date of
Termination; and (4) any prospective client to whom the Company made a new
business presentation (or similar offering of services) at any time within six
months after the Date of Termination (but only if initial discussions between
the Company and such prospective client relating to the rendering of services
occurred prior to the Date of Termination, and only if the Executive
12
participated in or supervised such discussions). For purposes of this clause,
it is agreed that a general mailing or an incidental contact shall not be
deemed a "new business presentation or similar offering of services" or a
"discussion". In addition, "client" shall also include any clients of other
companies operating within the MDC group of companies to whom the Executive
rendered services (including supervisory services) at any time during the
six-month period prior to the Determination Date. In addition, if the client
is part of a group of companies which conducts business through more than one
entity, division or operating unit, whether or not separately incorporated (a
"Client Group"), the term "client" as used herein shall also include each
entity, division and operating unit of the Client Group where the same
management group of the Client Group has the decision making authority or
significant influence with respect to contracting for services of the type
rendered by the Company.
(b) Confidential Information. In the course of the
Executive's employment with the Company (and its predecessor), he has acquired
and will continue to acquire and have access to confidential or proprietary
information about the Company and/or its clients, including but not limited
to, trade secrets, methods, models, passwords, access to computer files,
financial information and records, computer software programs, agreements
and/or contracts between the Company and its clients, client contacts, client
preferences, creative policies and ideas, advertising campaigns, creative and
media materials, graphic design materials, sales promotions and campaigns,
sales presentation materials, budgets, practices, concepts, strategies,
methods of operation, financial or business projections of the Company and
information about or received from clients and other companies with which the
Company does business. The foregoing shall be collectively referred to as
"confidential information". The Executive is aware that the confidential
information is not readily available to the public and accordingly, the
Executive also agrees that he will not at any time (whether during the Term or
after termination of this Agreement), disclose to anyone (other than his
counsel in the course of a dispute arising from the alleged disclosure of
confidential information or as required by law) any confidential information,
or utilize such confidential information for his own benefit, or for the
benefit of third parties. The Executive agrees that the foregoing restrictions
shall apply whether or not any such information is marked "confidential" and
regardless of the form of the information. The term "confidential information"
does not include information which (i) is or becomes generally available to
the public other than by breach of this provision or (ii) the Executive learns
from a third party who is not under an obligation of confidence to the Company
or a client of the Company. In the event that the Executive becomes legally
required to disclose any confidential information, he will provide the Company
with prompt notice thereof so that the Company may seek a protective order or
other appropriate remedy and/or waive compliance with the provisions of this
paragraph 8(b) to permit a particular disclosure. In the event that such
protective order or other remedy is not obtained, or that the Company waives
compliance with the provisions of this paragraph 8(b) to permit a particular
disclosure, the Executive will furnish only that portion of the confidential
information which he is legally required to disclose and, at the Company's
expense, will cooperate with the efforts of the Company to obtain a protective
order or other reliable assurance that confidential treatment will be accorded
the confidential information. The Executive further agrees that all memoranda,
disks, files, notes, records or other documents, whether in electronic form or
hard copy (collectively, the "material") compiled by him or made available to
him during his employment with the Company (whether or not the material
constitutes or contains confidential information), and in connection with the
performance of his duties hereunder, shall be the property of the Company and
13
shall be delivered to the Company on the termination of the Executive's
employment with the Company or at any other time upon request. Except in
connection with the Executive's employment with the Company, the Executive
agrees that he will not make or retain copies or excerpts of the material;
provided that the Executive shall be entitled to retain his personal files.
(c) Remedies. If the Executive commits a breach or is about
to commit a breach, of any of the provisions of paragraphs 8(a) or (b), the
Company shall have the right to have the provisions of this Agreement
specifically enforced by the arbitrator appointed under paragraph 19 or by any
court having equity jurisdiction without being required to post bond or other
security and without having to prove the inadequacy of the available remedies
at law, it being acknowledged and agreed that any such breach or threatened
breach will cause irreparable injury to the Company and that money damages
will not provide an adequate remedy to the Company. In addition, the Company
may take all such other actions and remedies available to it under law or in
equity and shall be entitled to such damages as it can show it has sustained
by reason of such breach.
(d) Acknowledgements. The parties acknowledge that (i) the
type and periods of restriction imposed in the provisions of paragraphs 8(a)
and (b) are fair and reasonable and are reasonably required in order to
protect and maintain the proprietary interests of the Company described above,
other legitimate business interests and the goodwill associated with the
business of the Company; (ii) the time, scope, geographic area and other
provisions of this paragraph 8 have been specifically negotiated by
sophisticated commercial parties, represented by legal counsel, and are given
as an integral part of the transactions contemplated by the is Agreement; and
(iii) because of the nature of the business engaged in by the Company and the
fact that clients can be and are serviced by the Company wherever they are
located, it is impractical and unreasonable to place a geographic limitation
on the agreements made by the Executive herein. The Executive specifically
acknowledges that his being restricted from soliciting and servicing clients
and prospective clients as contemplated by this Agreement will not prevent him
from being employed or earning a livelihood in the type of business conducted
by the Company. If any of the covenants contained in paragraphs 8(a) or (b),
or any part thereof, is held to be unenforceable by reason of it extending for
too great a period of time or over too great a geographic area or by reason of
it being too extensive in any other respect, the parties agree (x) such
covenant shall be interpreted to extend only over the maximum period of time
for which it may be enforceable and/or over the maximum geographic areas as to
which it may be enforceable and/or over the maximum extent in all other
respects as to which it may be enforceable, all as determined by the court or
arbitration panel making such determination and (y) in its reduced form, such
covenant shall then be enforceable, but such reduced form of covenant shall
only apply with respect to the operation of such covenant in the particular
jurisdiction in or for which such adjudication is made. Each of the covenants
and agreements contained in this paragraph 8 (collectively, the "Protective
Covenants") is separate, distinct and severable. All rights, remedies and
benefits expressly provided for in this Agreement are cumulative and are not
exclusive of any rights, remedies or benefits provided for by law or in this
Agreement, and the exercise of any remedy by a party hereto shall not be
deemed an election to the exclusion of any other remedy (any such claim by the
other party being hereby waived). The existence of any claim, demand, action
14
or cause of action of the Executive against the Company, whether predicated on
this Agreement or otherwise, shall not constitute a defense to the enforcement
by the Company of each Protective Covenant. The unenforceability of any
Protective Covenant shall not affect the validity or enforceability of any
other Protective Covenant or any other provision or provisions of this
Agreement.
(e) Notification of Restrictive Covenants. Prior to
accepting employment with any person, firm or entity during the Restricted
Period, the Executive shall notify the prospective employer in writing of his
obligations pursuant to this paragraph 8 and shall simultaneously provide a
copy to the Company (it being agreed by the Company that such notification
required under this paragraph 8(e) shall not be deemed a breach of the
confidentiality provisions of this Agreement).
(f) Tolling. The temporal duration of the
non-solicitation/non-servicing covenants set forth in this Agreement shall not
expire, and shall be tolled, during any period in which the Executive is in
violation of any of the non-solicitation/non-servicing covenants set forth
herein, and all restrictions shall automatically be extended by the period of
the Executive's violation of any such restrictions.
9. Intellectual Property
During the Term, the Executive will disclose to the Company
all ideas, inventions and business plans developed by him during such period
which relate directly or indirectly to the business of the Company, including
without limitation, any design, logo, slogan, advertising campaign or any
process, operation, product or improvement which may be patentable or
copyrightable. The Executive agrees that all patents, licenses, copyrights,
tradenames, trademarks, service marks, planning, marketing and/or creative
policies and ideas, advertising campaigns, promotional campaigns, media
campaigns, budgets, practices, concepts, strategies, methods of operation,
financial or business projections, designs, logos, slogans and business plans
developed or created by the Executive in the course of his employment
hereunder, either individually or in collaboration with others, will be deemed
works for hire and the sole and absolute property of the Company. The
Executive agrees, that at the Company's request and expense, he will take all
steps necessary to secure the rights thereto to the Company by patent,
copyright or otherwise.
10. Enforceability
The failure of any party at any time to require performance
by another party of any provision hereunder shall in no way affect the right
of that party thereafter to enforce the same, nor shall it affect any other
party's right to enforce the same, or to enforce any of the other provisions
in this Agreement; nor shall the waiver by any party of the breach of any
provision hereof be taken or held to be a waiver of any subsequent breach of
such provision or as a waiver of the provision itself.
11. Assignment
The Company and the Executive agree that, subject to
paragraph 7(b), the Company shall have the right to assign this Agreement,
15
and, accordingly, this Agreement shall inure to the benefit of, be binding
upon and may be enforced by, any and all successors and assigns of the
Company, including, without limitation, by asset assignment, stock sale,
merger, consolidation or other corporate reorganization. The Company and
Executive agree that Executive's rights and obligations under this Agreement
are personal to the Executive, and the Executive shall not have the right to
assign or otherwise transfer his rights or obligations under this Agreement,
and any purported assignment or transfer shall be void and ineffective,
provided that the rights of the Executive to receive certain benefits upon
death as expressly set forth under paragraph 7(a) of this Agreement shall
inure to the Executive's estate and heirs. The rights and obligations of the
Company hereunder shall be binding upon and run in favor of the successors and
assigns of the Company.
12. Modification
This Agreement may not be orally canceled, changed, modified
or amended, and no cancellation, change, modification or amendment shall be
effective or binding, unless in writing and signed by the parties to this
Agreement, and approved in writing by the MDC CEO.
13. Severability; Survival
In the event any provision or portion of this Agreement is
determined to be invalid or unenforceable for any reason, in whole or in part,
the remaining provisions of this Agreement shall nevertheless be binding upon
the parties with the same effect as though the invalid or unenforceable part
had been severed and deleted or reformed to be enforceable. The respective
rights and obligations of the parties hereunder shall survive the termination
of the Executive's employment to the extent necessary to the intended
preservation of such rights and obligations, specifically paragraphs 7, 8, 9,
10, 11, 12, 13, 15, 16, 19, 24, 25 and 26.
14. Life Insurance
The Executive agrees that the Company (or an affiliate of
the Company) shall have the right to obtain life insurance on the Executive's
life, at the sole expense of the Company and with the Company as the sole
beneficiary thereof. The Executive shall (a) cooperate fully in obtaining such
life insurance, (b) sign any necessary consents, applications and other
related forms or documents and (c) at the expense of the party obtaining the
insurance policy, take any reasonably required medical examinations.
15. Notice
Any notice, request, instruction or other document to be
given hereunder by any party hereto to another party shall be in writing and
shall be deemed effective (a) upon personal delivery, if delivered by hand, or
(b) three days after the date of deposit in the mails, postage prepaid if
mailed by certified or registered mail, or (c) on the next business day, if
sent by prepaid overnight courier service or facsimile transmission (if
electronically confirmed), and in each case, addressed as follows:
16
If to the Executive:
Xx. Xxxxxx Xxxxx
c/o St. Xxxx & Xxxxx, L.L. C.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
If to the Company:
c/o MDC Partners Inc.
00 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attention: Xxxxx Xxxxx
Fax: (000) 000-0000
and to:
Xxxxx & Xxxxxxx LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
Any party may change the address to which notices are to be sent by giving
notice of such change of address to the other party in the manner herein
provided for giving notice.
16. Applicable Law
This Agreement shall be governed by, enforced under, and
construed in accordance with the laws of the State of New York without regard
to any conflicts or conflict of laws principles in the State of New York that
would result in the application of the law of any other jurisdiction.
17. No Conflict
The Executive represents and warrants that he is not subject
to any agreement, instrument, order, judgment or decree of any kind, or any
other restrictive agreement of any character, which would prevent him from
entering into this Agreement or which would be breached by the Executive upon
his performance of his duties pursuant to this Agreement.
18. Entire Agreement
This Agreement and the documents referenced herein represent
17
the entire agreement between the Company and the Executive with respect to the
employment of the Executive by the Company, and all prior agreements, plans
and arrangements relating to the employment of the Executive by the Company
are nullified and superseded hereby.
19. Arbitration
(a) The parties hereto agree that any dispute, controversy
or claim arising out of, relating to, or in connection with this Agreement
(including, without limitation, any claim regarding or related to the
interpretation, scope, effect, enforcement, termination, extension, breach,
legality, remedies and other aspects of this Agreement or the conduct and
communications of the parties regarding this Agreement and the subject matter
of this Agreement) shall be settled by arbitration at the offices of Judicial
Arbitration and Mediation Services, Inc. or successor organization for binding
arbitration in New York, New York by a single arbitrator selected by the
parties. The arbitrator may grant injunctions or other relief in such dispute
or controversy. All awards of the arbitrator shall be binding and
non-appealable. Judgment upon the award of the arbitrator may be entered in
any court having jurisdiction. The arbitrator shall apply New York law to the
merits of any dispute or claims, without reference to the rules of conflicts
of law applicable therein. Suits to compel or enjoin arbitration or to
determine the applicability or legality of arbitration shall be brought in the
United States District Court for the Southern District of New York or if that
court lacks jurisdiction, in a state court located within the geographic
boundaries thereof. Notwithstanding the foregoing, no party to this Agreement
shall be precluded from applying to a proper court for injunctive relief by
reason of the prior or subsequent commencement of an arbitration proceeding as
herein provided. No party or arbitrator shall disclose in whole or in part to
any other person, firm or entity any confidential information submitted in
connection with the arbitration proceedings, except to the extent reasonably
necessary to assist counsel in the arbitration or preparation for arbitration
of the dispute. Confidential Information may be disclosed to (i) attorneys,
(ii) parties, and (iii) outside experts requested by either party's counsel to
furnish technical or expert services or to give testimony at the arbitration
proceedings, subject, in the case of such experts, to execution of a legally
binding written statement that such expert is fully familiar with the terms of
this provision, agree to comply with the confidentiality terms of this
provision, and will not use any confidential information disclosed to such
expert for personal or business advantage.
(b) The Executive has read and understands this paragraph
19. The Executive understands that by signing this Agreement, the Executive
agrees to submit any claims arising out of, relating to, or in connection with
this Agreement, or the interpretation, validity, construction, performance,
breach or termination thereof, or his employment or the termination thereof,
to binding arbitration, and that this arbitration provision constitutes a
waiver of the Executive's right to a jury trial and relates to the resolution
of all disputes relating to all aspects of the employer/employee relationship,
including but not limited to the following:
(i) Any and all claims for wrongful discharge of
employment, breach of contract, both express and implied;
breach of the covenant of good faith and fair dealing, both
express and implied; negligent or intentional infliction of
emotional distress; negligent or intentional
18
misrepresentation; negligent or intentional interference
with contract or prospective economic advantage; and
defamation;
(ii) Any and all claims for violation of any
federal, state or municipal statute, including, without
limitation, Title VII of the Civil Rights Act of 1964, as
amended, the Civil Rights Act of 1991, the Equal Pay Act,
the Employee Retirement Income Security Act, as amended, the
Age Discrimination in Employment Act of 1967, the Americans
with Disabilities Act of 1990, the Family and Medical Leave
Act of 1993, the Fair Labor Standards Act, the New York
Human Rights Law; and
(iii) Any and all claims arising out of any other
federal, state or local laws or regulations relating to
employment or employment discrimination.
(c) To the extent that any part of this paragraph 19 is
found to be legally unenforceable for any reason, that part shall be modified
or deleted in such a manner as to render this paragraph 19 (or the remainder
of this paragraph 19) legally enforceable and as to ensure that except as
otherwise provided in clause (a) of this paragraph 19, all conflicts between
the Company and the Executive shall be resolved by neutral, binding
arbitration. The remainder of this paragraph 19 shall not be affected by any
such modification or deletion but shall be construed as severable and
independent. If a court finds that the arbitration procedures of this
paragraph 19 are not absolutely binding, then the parties hereto intend any
arbitration decision to be fully admissible in evidence, given great weight by
any finder of fact, and treated as determinative to the maximum extent
permitted by law.
20. Headings
The headings contained in this Agreement are for reference
purposes only, and shall not affect the meaning or interpretation of this
Agreement.
21. Withholdings
The Company may withhold from any amounts payable under this
Agreement such federal, state or local taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
22. Counterparts
This Agreement may be executed in two counterparts or by
facsimile transmission, both of which taken together shall constitute one
instrument.
23. No Strict Construction
The language used in this Agreement will be deemed to be the
language chosen by the Company and the Executive to express their mutual
intent, and no rule of law or contract interpretation that provides that in
19
the case of ambiguity or uncertainty a provision should be construed against
the draftsman will be applied against any party hereto.
24. Executive Representations; Company Indemnification
(a) Representations. Except for the agreement made as of
August 3, 1999 by and between The Interpublic Group of Companies, Inc. ("IPG")
and the Executive (the "Former Employment Agreement"), the Executive
represents and warrants that he has not executed any agreement, arrangement,
covenant or other understanding that may affect the performance by him under
this Agreement. The Executive further represents and warrants to the Company
that he has returned (or will return) to his previous employers, respectively,
all documents, records, books, papers, forms, agreements and information, and
any and all property of any nature whatsoever, belonging to such previous
employers or containing any information deemed confidential or proprietary by
such previous employers. In addition, the Executive represents and warrants to
the Company that prior to the date hereof he has not taken any actions or
performed any act that is in violation of the Former Employment Agreement. The
Executive agrees that during his employment with the Company, he will not
improperly use or disclose any confidential information, proprietary
information or trade secrets of any former employer or any other person to
whom the Executive has an obligation of confidentiality.
(b) Indemnification. As a result of the vexatious,
frivolous, and time consuming nature that an actual or threatened litigation
could have upon the Executive, the Company agrees to indemnify, defend and
hold harmless the Executive, from and against any damages, judgments, losses
and reasonable expenses (including reasonable legal fees) (collectively,
"Losses") suffered by the Executive as a result of any litigation commenced by
IPG against the Executive and/or the Company alleging that the Executive
violated the terms and conditions of the Former Employment Agreement by virtue
of his entering into this Agreement and performing the transactions
contemplated hereby (the "Potential Claim"); provided, however, that the
Company shall not indemnify the Executive for any Losses suffered as a result
of actions taken by the Executive (i) before he was employed by Company, (ii)
breaches of his Former Employment Agreement unrelated to his entering into
this Agreement or (iii) resulting from actions taken on his own behalf or
without any authorization from the Company. The Company may elect to
compromise, settle or defend, at its own expense and by its own counsel, the
Potential Claim. The Executive shall cooperate, at the request and expense of
the Company, in the settlement or compromise of, or defense against, the
Potential Claim. The Executive shall make available to the Company any records
or other documents within his control that are necessary or appropriate for
such defense. The Company's agreement to indemnify the Executive pursuant to
this paragraph 24 is for the benefit of the Executive in his individual
capacity, and shall not benefit or create any right, interest or cause of
action in or on behalf of any person other than the Executive (other than in
the event of the Executive's death, such right shall inure to the Executive's
estate and heirs). The Company's obligation to indemnify under this paragraph
24(b) shall terminate three (3) years from the date hereof.
(c) Cooperation. The Executive agrees, both during and after
the Term, at the request of the Company, to cooperate with the Company in
connection with any investigation of or legal action against the Company or
20
any of its affiliates involving misconduct or noncompliance by the Company,
its affiliates or any of its present or former employees; provided, that the
Company shall (i) promptly reimburse the Executive for any reasonable out of
pocket expenses that the Executive shall incur in the course of such
cooperation and, (ii) if reasonably requested by the Executive to avoid a
conflict of interest, promptly reimburse the Executive for any reasonable
attorney's fees for independent legal counsel selected by the Executive to
represent the Executive in connection with any such investigation or action
(except in instances where such investigation or legal action is the result of
the Executive's gross negligence or willful misconduct).
25. Publicity
Subject to the provisions of the next sentence, no party to this
Agreement shall issue any press release or other public document or make any
public statement relating to this Agreement or the matters contained herein
without obtaining the prior approval of the Company and the Executive.
Notwithstanding the foregoing, the foregoing provision shall not apply to the
extent that the Company is required to make any announcement relating to or
arising out of this Agreement by virtue of applicable securities laws or other
stock exchange rules, or any announcement by any party pursuant to applicable
law or regulations.
26. Non-Disparagement
Following the date hereof, the Executive and the Company
shall each use their reasonable best efforts not to disparage, criticize or
make statements to the detriment of the other.
21
IN WITNESS WHEREOF, the parties have executed this Employment
Agreement as of the day and year first above written.
MDC PARTNERS INC.
By:
------------------------------
Xxxxx Xxxxx
Chief Executive Officer
------------------------------
Xxxxxx Xxxxx
22
Exhibit A to Employment Agreement
__________ [Insert Date]
[Insert name and address of
Terminated Principal]
Re: Separation Agreement, General Release and Age
Discrimination and Employment Act Release
Dear __________:
1. Your employment with MDC Partners Inc. (the "Company")
pursuant to the Employment Agreement between the Company and you dated ______
, 2004 (the "Employment Agreement"), or otherwise, shall terminate effective
on the close of business on (the "Termination Date"). You hereby confirm your
removal as of the Termination Date from any position you held as an employee,
officer, Director or Manager of the Company or any Company operating within
the MDC Group of companies (the "Group"). This Agreement will become effective
on the Effective Date (as defined in paragraph 14 hereof) only if not revoked
by you as permitted under paragraph 14 hereof.
2. The Company agrees to pay you severance compensation and
benefits in accordance with the applicable clause of paragraph 7 of the
Employment Agreement.
3. On or before the Effective Date you shall submit to the
Company your reimbursement request in accordance with Company policy for any
unpaid business or entertainment expenses incurred by you through the
Termination Date in respect of which you are entitled to be reimbursed under
Company policy.
4. From and after the Termination Date, except for such
rights under this Agreement, you shall no longer be entitled to receive any
further payments, compensation or other monies (including severance
compensation) from the Company or any of its affiliates or to receive any of
the benefits or participate in any benefit plan or program of the Company or
any of its affiliates, including without limitation, any salary payment, bonus
payment, severance payment, salary continuation payment, accrued vacation or
unused personal days and expense reimbursements or other benefits referred to
in the Employment Agreement.
5. You hereby acknowledge and affirm your obligations under
the provisions of paragraph 8 of the Employment Agreement.
6. Notwithstanding your termination of employment as
provided in this Agreement, the parties hereto agree that the provisions of
23
paragraphs 8 through 26 of the Employment Agreement shall survive such
termination to the extent necessary to the intended preservation of the rights
and obligations set forth in such paragraphs.
7. (a) You, for yourself, your heirs, executors,
administrators, agents, representatives, successors and assigns, hereby
irrevocably and unconditionally release the Company and its affiliates, and
each of their respective employees, shareholders, agents, officers, directors,
attorneys, representatives, successors and assigns of the Company and its
affiliates (collectively, the "Releasees"), from any and all charges,
complaints, claims, liabilities, obligations, promises, agreements, causes of
action, rights, costs, losses, debts and expenses of any nature whatsoever,
known or unknown, (collectively, "Claims"), which you, your heirs, executors,
administrators, representatives, successors and assigns ever had, now have or
hereafter may have (either directly or indirectly, derivatively or in any
other representative capacity) by reason of any matter, fact or cause
whatsoever from the beginning of time to the date of this Agreement, including
without limitation, any and all claims based upon or arising out of your
Employment Agreement, your employment with the Company or your termination of
employment with the Company. This release of claims includes all claims
arising under Title VII of the Civil Rights Act of 1964, the Civil Rights Act
of 1991, the Age Discrimination in Employment Act ("ADEA"), the Americans with
Disabilities Act, the Family and Medical Leave Act, the New York Executive
Law, the New York City Human Rights Law, and all other labor and
anti-discrimination laws and any other purported restriction on an employer's
right to terminate the employment of an employee. This release also covers any
claims alleging personal damages, wrongful discharge, or any other claim,
including those based on contract or tort, whether founded in common law or
otherwise. This release shall not apply or release any claims with respect to
any of your rights arising or preserved under the terms of this Agreement.
(b) You represent that you have not filed or
permitted to be filed against the Company (or the other Releasees),
individually or collectively, any lawsuits and you covenant and agree that you
will not do so at any time hereafter with respect to the subject matter of
this Agreement and claims released pursuant to this Agreement (including,
without limitation, any claims relating to the termination of your
employment), except as may be necessary to enforce this Agreement, to obtain
benefits described in or granted under this Agreement, or to seek a
determination of the validity of the waiver of your rights under the ADEA.
(c) You agree to cooperate with the Company and its
counsel in connection with any investigations, administrative proceedings or
litigation relating to any matter in which you were involved or of which you
had knowledge as a result of your employment with the Company in accordance
with paragraph 24(c) of the Employment Agreement.
(d) You agree that you will not encourage or
voluntarily cooperate with any other current or former employee of the Company
(or their affiliates) or any other potential plaintiff, to commence any legal
action or make any claim against the Company (or any affiliate) in respect of
such person's employment or termination of employment with or by the Company
(or any affiliate thereof) or otherwise.
24
(e) You agree that on and after the Termination
Date you will not apply or seek employment with the Company or any of its
affiliates at any location or facility, and you hereby waive and release any
right to be considered for such employment.
(f) This Agreement does not constitute an admission
by the Company of any violation of any federal, state, or local law or any
contractual or other obligations, or of any wrongdoing whatsoever.
8. For good and valuable consideration, the Company, on its
behalf and on behalf of each of its affiliates and their respective successors
and assigns, hereby irrevocably and unconditionally release you from any and
all Claims which any of them ever had, now have or hereafter may have (either
directly or indirectly, derivatively or in any other representative capacity)
by reason of any matter, fact or cause from the beginning of time to the date
of this Agreement arising out of your performance of duties as an employee or
officer of the Company or another member of the Group or your termination of
employment with the Company, except if a Claim arises out of your fraudulent
conduct, your misappropriation or embezzlement of funds, or any other unlawful
conduct; provided, however, the foregoing release shall not apply to or
release any rights of the Company under the terms of this Agreement.
9. You agree to keep secret and strictly confidential the
existence of this Agreement and further agree not to disclose, make known,
discuss or relay any information concerning this Agreement, or any of the
discussions regarding the terms of this Agreement, leading up to the execution
of it, to anyone other than your tax advisor, accountant, attorney, spouse or
members of your immediate family, provided that any such party to whom you
make such disclosure agrees to keep such information confidential and not
disclose it to others. The foregoing shall also not prohibit disclosure (i) as
may be ordered by any regulatory agency or court or as required by other
lawful process, or (ii) as may be necessary for the prosecution of claims
relating to the performance or enforcement of this Agreement or (iii) as may
become generally available to the public other than by breach of this
provision or (iv) you learn from a third party who is not under an obligation
of confidence to the Company.
10. In the event of a breach of the terms of this Agreement
by any party, the non-breaching party shall be entitled to all damages allowed
under applicable law.
11. (a) As used in this Agreement (i) "affiliate" of any
Person (as defined below) shall mean any Person that directly, or indirectly,
through one or more intermediaries, controls, or is controlled by, or is under
common control with such Person, and (ii) a "Person" shall mean or include an
individual, a company, a limited liability company, a corporation or any other
form of business entity.
(b) All prior negotiations and discussions between the
parties with respect to the subject matter hereof are merged into this
Agreement. No representations by or on behalf of any party were made or relied
upon except as set forth herein. This Agreement may not be changed, amended or
modified, except by a writing signed by the party affected by such change,
amendment or modification.
(c) In the event any provision of this Agreement is found
to be void and unenforceable by a court or other tribunal of competent
jurisdiction, the remaining provisions of this Agreement shall nevertheless be
25
binding upon the parties hereto with the same effect as though the void or
unenforceable part had been severed and deleted or reformed to be enforceable.
(d) This Agreement will be governed by and
construed in accordance with the laws of the State of New York without
application of conflict of law provisions.
(e) The failure of any party at any time to require
performance by another party of any provision hereunder shall in no way affect
the right of that party thereafter to enforce the same, nor shall it affect
any other party's right to enforce the same, or to enforce any of the other
provisions in this Agreement; nor shall the waiver by any party of the breach
of any provision hereof be taken or held to be a waiver of any subsequent
breach of such provision or as a waiver of the provision itself. This
Agreement shall be binding upon, and inure to the benefit of, you and your
heirs, executors, administrators, successors and assignors, and MDC Partners,
the Company and their respective successors and assignors.
12. You acknowledge that you have read this Agreement in its
entirety, fully understand its meaning and are executing this Agreement
voluntarily and of your own free will with full knowledge of its significance.
You acknowledge and warrant that you have had the opportunity to consider for
21 days the terms and provisions of this Agreement and that you have been
advised by the Company to consult with an attorney prior to executing this
Agreement. You shall have the right to revoke this Agreement for a period of
seven (7) days following your execution of this Agreement by giving written
notice of such revocation to the Company in accordance with the notice
provision set forth in the Employment Agreement. This Agreement shall not
become effective until the eighth day following your execution of it (the
"Effective Date"). Accordingly, if you revoke this Agreement as permitted
herein, this Agreement shall become null and void ab initio.
IN WITNESS WHEREOF, the parties hereto have set their hands
as of the date first above set forth.
MDC Partners Inc.
By:
------------------------------
Name:
Title:
------------------------------
Xxxxxx Xxxxx
Dated: _________________________
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