EXHIBIT 10.3
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
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AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement") dated as
of July 17, 1996 between True North Communications Inc., a Delaware corporation
(the "Company"), and Xxxxx Xxxxx (the "Executive").
WHEREAS, the Company is a global communications holding company which
owns companies engaged in the advertising agency business, the multimedia
production business, the business of planning and buying of media time and space
and related businesses.
WHEREAS, the Executive currently serves as Chairman and Chief
Executive Officer of the Company pursuant to an Employment Agreement dated as of
the date hereof (the "Existing Employment Agreement").
WHEREAS, the Company desires to extend the Full-Time Employment Period
(as defined in the Existing Employment Agreement) as of June 30, 1997 for one
additional year, and the Executive does not wish to reject such extension.
WHEREAS, the Company and the Executive desire to amend and restate the
Existing Employment Agreement to reflect such extension and certain other
modifications.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein, the parties hereby agree as follows:
1. Employment. The Company hereby employs the Executive and the
Executive hereby agrees to be employed by the Company upon the terms and subject
to the conditions contained in this Agreement. The term of full-time employment
of the Executive by the Company pursuant to this Agreement (the "Full-Time
Employment Period") shall commence on the date hereof and, unless earlier
terminated pursuant to Section 4, shall end on June 30, 1998; provided that the
Full-Time Employment Period may be extended by the Company as of June 30, 1998
for one additional year and, if so extended, may be further extended by the
Company as of June 30, 1999 for the six month period ending on December 31,
1999, in each case upon written notice given to the Executive not less than 60
nor more than 90 days prior to such June 30; provided further that the Full-Time
Employment Period shall not be so extended if the Executive rejects such
extension by giving written notice to the Company within 15 days after the
Company shall have given such notice of extension.
Company within 15 days after the Company shall have given such notice of
extension.
2. Position and Duties; Responsibilities.
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(a) Position and Duties. The Company shall employ the Executive
during the Full-Time Employment Period as its principal executive officer, with
the title of Chairman and Chief Executive Officer. During the Full-Time
Employment Period, the Executive shall perform faithfully and loyally and to the
best of his abilities the duties assigned to him hereunder, shall devote his
full business time, attention and effort to the affairs of the Company and shall
use his reasonable best efforts to promote the interests of the Company.
Notwithstanding the foregoing, the Executive may engage in charitable, civic or
community activities and, with the prior approval of the Board of Directors of
the Company (the "Board"), may serve as a director of any business corporation,
provided that such activities or service do not violate the terms of any of the
covenants contained in Section 10 or Section 11.
(b) Responsibilities. Subject to the powers, authority and
responsibilities vested in the Board and in duly constituted committees of the
Board, the Executive shall have the authority and responsibility for the
formulation and execution of the corporate policy of the Company. The Executive
shall also perform such other duties (not inconsistent with the position of
principal executive officer) on behalf of the Company and its subsidiaries as
may from time to time be authorized or directed by the Board and as are
customarily exercisable by a chief executive officer. The Special Committee
designated by the Board, consisting solely of outside directors, has full
responsibility for the Company's relationship with Publicis S.A., Publicis
Communication and Publicis FCB B.V. and all subsidiaries, whether or not wholly-
owned, and all operating units, of Publicis Communication and Publicis FCB B.V.
(other than the Company and any of its subsidiaries or affiliates in which
Publicis S.A., Publicis Communication and Publicis FCB B.V. have no direct
ownership interest) (collectively, "Publicis") and for strategic acquisitions by
the Company. Notwithstanding the foregoing, the Executive, in his capacity as a
director of the Company, shall be advised of the status of any matter presented
to the full Board or to be voted on by the full Board, including any matter
relating to or affecting Publicis or any strategic acquisitions, in a manner
sufficient to enable him to cast his vote on such matter in an informed manner
as a director. For purposes of the preceding sentence, "full Board" means all
members of the Board acting in their capacities as such, except directors, if
any, who are absent from Board deliberations due to recusal or for any other
reason. Notwithstanding any other provision of this Agreement, the Executive
shall be permitted to express to the Board
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and to the stockholders of the Company his views on any matter presented to,
considered by or raised by the Board or such stockholders.
3. Compensation.
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(a) Salary, VIC and DVIC. With respect to the Full-Time Employment
Period, the Company shall pay to the Executive an annual salary at the rate of
$600,000 and variable incentive compensation ("VIC") and deferred variable
incentive compensation ("DVIC") in accordance with the Company's Performance
Program, provided that the aggregate amount of such salary, VIC and DVIC for
each calendar year during the Full-Time Employment Period shall be paid at an
annual rate of not less than $1,000,000 (the "Calendar Year Minimum
Compensation") and that any payment required to be made by this proviso shall be
deemed to be VIC.
(b) Stock Options. During the Full-Time Employment Period, the
Executive shall be entitled to receive variable incentive stock options in
accordance with the Company's variable incentive stock option program. In
addition, the Company covenants that the Compensation Committee and the Special
Committee of the Board shall take such actions as may be necessary, including
(i) where required, to cause the amendment of the Company's Stock Option Plan,
(ii) amendment of the Executive's currently outstanding stock option agreements
and (iii) approval of stock option agreements with respect to the future grant
of stock options to the Executive, so that upon the termination of the Full-Time
Employment Period all of the stock options theretofore granted to the Executive
by the Company then held by the Executive shall be fully exercisable until the
end of the term thereof. The Company assumes no responsibility for any
liability of the Executive under Section 16 of the Securities Exchange Act of
1934 relating in any manner, directly or indirectly, to the amendment of such
stock options.
(c) Other Benefits. During the Full-Time Employment Period, the
Executive shall be entitled to participate in the Company's employee benefit
plans generally available to senior executives of the Company, including group
health, life, short-term disability, long-term disability, pension, profit
sharing, stock purchase and nonqualified deferred compensation and retirement
plans and the plans or programs for the allowance for or the reimbursement of
automobile expenses, financial planning expenses and club dues and any other
plans of general application to employees on the date hereof and such plans and
programs adopted hereafter for the benefit of senior executives of the Company
(all such benefits being hereinafter referred to as the "Employee Benefits"), in
the case of plans or programs in effect on the date
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hereof on terms no less favorable than their terms on the date hereof; provided
that all retirement benefits shall be based upon plans in effect on the date
hereof, subject to modifications of general application to all employees. The
Executive shall be entitled to take time off for vacation or illness in
accordance with the Company's policy for senior executives and to receive all
other fringe benefits as are from time to time made generally available to
senior executives of the Company.
(d) Expense Reimbursement. During the Full-Time Employment Period,
the Company shall reimburse the Executive for all proper expenses incurred by
him in the performance of his duties hereunder in accordance with the Company's
policies and procedures.
4. Termination of Full-Time Employment Period; Suspension.
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(a) Termination. The Full-Time Employment Period shall be terminated
upon the first to occur of (i) the expiration thereof pursuant to Section 1,
(ii) the expiration thereof on account of rejection by the Executive pursuant to
Section 1 of an extension notice given by the Company pursuant to Section
1,(iii) termination by the Company at any time without Cause (as such term is
defined in Section 4(b)) upon written notice given to the Executive at least 30
days prior to such termination, (iv) termination by the Company at any time for
Cause upon written notice given to the Executive at least 10 days prior to such
termination, (v) termination by the Company on account of the Executive's having
become unable (as determined by the Board in good faith) to regularly perform
his duties hereunder by reason of illness or incapacity for a period of more
than six consecutive months ("Termination for Disability"), (vi) the Executive's
death, (vii) termination by the Executive at any time on or before June 30, 1998
for an Acquisition-Related Reason (as such term is defined in Section 4(d)) upon
written notice given to the Company at least 10 days prior to such termination
or (viii) termination by the Executive at any time after June 30, 1997 but on or
before June 30, 1998 other than for an Acquisition-Related Reason upon written
notice given to the Company at least 30 days prior to such termination ("Other
Voluntary Termination"). Upon termination of the Full-Time Employment Period,
the Executive shall automatically and without further action on his part be
deemed to have resigned from all offices and directorships with the Company and
its subsidiaries and affiliates.
(b) Definition of Cause. For purposes of this Agreement, "Cause"
shall mean (i) the commission of a felony, (ii) the commission of any act which
involves both dishonesty with respect to the Company or any of its subsidiaries
and moral turpitude and
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causes the Company to be viewed in a materially unfavorable light by its
customers, employees or investors, (iii) material willful misconduct with
respect to the Company or any of its subsidiaries, provided that if it
reasonably could be concluded that such alleged material willful misconduct did
not occur or was not material or willful or misconduct and if such alleged
material willful misconduct is curable, the Executive shall have 30 days
following written notice thereof to the Executive to cure such alleged material
willful misconduct unless the Company, in its good faith judgment, determines
that such cure period must be shorter to avoid harm to the Company, in which
case such cure period shall be such lesser number of days as shall be determined
in good faith by the Company and set forth in such written notice to the
Executive, commencing upon such written notice to the Executive, or (iv) breach
of any provision of Section 10, 11 or 12.
(c) Suspension. If the Company shall determine that the Executive has
committed any act or acts which constitute Cause and shall notify the Executive
thereof in writing and if the Executive shall deny that he committed such act or
acts or that such act or acts constitute Cause and shall notify the Company of
such denial in writing within seven days following the Company's written notice
to the Executive, the Board may, in its sole and absolute discretion, suspend
the Executive with full compensation and benefits during the pendency of any
investigation or arbitration with respect thereto.
(d) Definition of an Acquisition-Related Reason. For purposes of this
Agreement, an "Acquisition-Related Reason" shall mean that (i) the Company or
all or substantially all of its assets shall have been acquired by a third
party, or the Company shall have acquired a third party or all or substantially
all of a third party's assets, in each case either directly or indirectly by
merger or otherwise, and (ii) subsequent thereto, the Executive shall have
relinquished his position as the Company's principal executive officer.
5. Consequences of Termination of Full-Time Employment Period.
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(a) Expiration, Termination Without Cause, Termination for an
Acquisition-Related Reason or Other Voluntary Termination. If the Full-Time
Employment Period terminates for a reason set forth in clause (i), (iii), (vii)
or (viii) of Section 4(a), in lieu of the commencement of the Company's
Directors Part-Time Employment Agreement upon such termination and any severance
amounts which otherwise would be payable to the Executive:
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(i) the Executive shall be entitled to receive (A) subject to
Section 5(e), all salary payable with respect to the period through
the date of such termination, (B) unpaid VIC and DVIC for the prior
calendar year, (C) VIC and DVIC for the then current calendar year,
prorated, subject to Section 5(e), through the date of such
termination based on actual results of operations for such full
calendar year and (D) reimbursement of expenses incurred through the
date of such termination; provided, that in determining the aggregate
amount of the salary payable pursuant to clause (A) of this Section
5(a)(i) and the VIC and DVIC payable pursuant to clause (C) of this
Section 5(a)(i), the Calendar Year Minimum Compensation shall, subject
to Section 5(e), be prorated through the date of such termination;
(ii) each stock option theretofore granted to the Executive by
the Company then held by the Executive shall, on the date of such
termination, be exercisable for the full term of such option in
accordance with the applicable stock option agreement in effect at the
time of such termination (giving effect to this provision); and
(iii) the Executive shall become a part-time employee of the
Company entitled to the compensation and benefits payable during the
Initial Part-Time Employment Period (as such term is defined in
Section 6(a)) in accordance with Section 6(c).
(b) Rejection of Extension by Executive. If the Full-Time Employment
Period terminates for a reason set forth in clause (ii) of Section 4(a), in lieu
of commencement of the Company's Directors Part-Time Employment Agreement upon
such termination and any severance amounts which otherwise would be payable to
the Executive, the Executive shall be entitled to the compensation and benefits
set forth in Sections 5(a)(i) and 5(a)(ii) and the Executive shall become a
part-time employee of the Company during the Initial Part-Time Employment Period
and he shall be entitled to the compensation and benefits set forth in the
Company's Directors Part-Time Employment Agreement upon the terms set forth
therein on the date hereof, but with all age and service requirements deemed to
have been satisfied and with the benefit calculated at 45% of final average
annual compensation (as defined in such Agreement) regardless of actual service,
and payments thereunder shall be made for the period commencing upon termination
of the Initial Part-Time Employment Period.
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(c) Termination for Cause. If the Full-Time Employment Period
terminates for any reason set forth in clause (iv) of Section 4(a), the
Executive shall be entitled to receive (i) all salary payable with respect to
the period through the date of such termination, (ii) unpaid VIC and DVIC for
the prior calendar year, (iii) VIC and DVIC for the then current calendar year,
prorated through the date of such termination based on actual results of
operations for such full calendar year, (iv) reimbursement of expenses incurred
through the date of such termination and (v) any other benefits accrued through
the date of such termination; provided that in determining the aggregate amount
of the salary payable pursuant to clause (i) of this Section 5(c) and the VIC
and DVIC payable pursuant to clause (iii) of this Section 5(c), the Calendar
Year Minimum Compensation shall be prorated through the date of such
termination. The Executive shall not be entitled to any compensation or benefits
under the Company's Directors Part-Time Employment Agreement or any other
severance payments.
(d) Disability or Death. If the Full-Time Employment Period
terminates for a reason set forth in clause (v) or (vi) of Section 4(a), in lieu
of commencement of the Company's Directors Part-Time Employment Agreement upon
such termination or any severance amounts which otherwise would be payable to
the Executive, the Executive or his executor, administrator or other legal
representative, as the case may be, shall be entitled to the payments and
benefits set forth in Section 5(a)(i) (subject to Section 5(e)) and Section
5(a)(ii) and for the period commencing on the date of such termination and
ending on December 31, 1999, the Executive or his executor, administrator or
other legal representative, as the case may be, shall be entitled to the
compensation set forth in Section 6(c)(i), and (A) in the case of Termination
for Disability, the Executive shall be entitled to the benefits set forth in
Section 6(c)(iii) (and in the event the Executive dies prior to December 31,
1999, the Executive's spouse shall be entitled to the continuation of medical
insurance coverage on the same basis as theretofore provided to the Executive
until December 31, 1999) or (B) in the case of termination on account of the
Executive's death, the Executive's spouse shall be entitled to the continuation
of medical insurance coverage on the same basis as theretofore provided to the
Executive until December 31, 1999 and, in either case, the compensation and
benefits set forth in the Company's Directors Part-Time Employment Agreement
shall become payable upon the terms set forth therein on the date hereof, but
with all age and service requirements deemed to have been satisfied and with the
benefit calculated at 45% of final average annual compensation (as defined in
such Agreement) regardless of actual service, for the period commencing on
January 1, 2000.
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(e) Termination Without Cause. or for Disability or Death, on or
Prior to June 30, 1997. If the Full-Time Employment Period terminates on or
prior to June 30, 1997 for a reason set forth in clause (iii), (v) or (vi) of
Section 4(a), the salary specified by clause (A) of Section 5(a)(i) shall be
payable with respect to the period through June 30, 1997, the VIC and DVIC
specified by clause (C) of Section 5(a)(i) shall be prorated through June 30,
1997 and, in determining the aggregate amount of such salary, VIC and DVIC, the
Calendar Year Minimum Compensation shall be prorated through June 30, 1997. In
addition, any unpaid VIC and DVIC for calendar year 1996 shall be paid at the
time such compensation is normally paid to senior executives of the Company and,
if variable incentive stock options for calendar year 1997 are not awarded to
the Executive by the Company prior to the termination of the Full-Time
Employment Period pursuant to clause (i), (iii) or (v) of Section 4(a), the
Company shall grant to the Executive the stock options which the Executive would
have been granted for calendar year 1997 but for such termination, which stock
options shall be fully exercisable upon the date of grant for the full term of
such options.
6. Initial Part-Time Employment Period.
(a) Commencement. If the Full-Time Employment Period terminates for
a reason set forth in clause (i), clause (ii), clause (iii), clause (vii) or
clause (viii) of Section 4(a), the Executive shall become a part-time employee
of the Company for the period commencing upon termination of the Full-Time
Employment Period and ending on December 31, 1999 (the "Initial Part-Time
Employment Period").
(b) Position and Duties. During the Initial Part-Time Employment
Period the Executive shall be a part-time employee of the Company and shall make
himself available, upon reasonable notice (reasonableness to include, but not be
limited to, a good faith effort to accommodate the schedules and time needs of
the parties), to perform services for the Company which (i) shall be related to
such projects and matters as the Board or the Chief Executive Officer of the
Company may designate from time to time, (ii) are commensurate with the
Executive's years of experience and level of skill and (iii) are similar to the
services rendered by the Executive prior to the termination of the Full-Time
Employment Period, including, but not limited to, the duties set forth in
Section 12. The Executive shall not be required to devote more than 10 days
during any calendar quarter to the performance of such services.
(c) Compensation. As compensation for the services to be performed
by the Executive during the Initial Part-Time Employ-
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ment Period, the Executive shall receive the following compensation and benefits
in accordance with the Company's normal payroll policies:
(i) cash compensation shall be paid to the Executive during the
Initial Part-Time Employment Period at the rate of $1,350,000 per
year, except as provided in Section 6(c)(ii);
(ii) if the Initial Part-Time Employment Period shall have
commenced as a result of an Other Voluntary Termination (as defined in
Section 4(a)(viii)), cash compensation shall be paid to the Executive
at the rate of $1,000,000 per year during the Initial Part-Time
Employment Period;
(iii) the Employee Benefits shall continue to be paid to the
Executive during the Initial Part-Time Employment Period, in the case
of Employee Benefits in effect on the date hereof on terms no less
favorable than their terms on the date hereof; provided that coverage
for the Executive under the Company's long-term disability insurance
plan shall cease upon termination of the Full-Time Employment Period;
provided further that all retirement benefits shall be based upon
plans in effect on the date hereof, subject to modifications of
general application to all employees; and provided further that for
the year ending on December 31, 1997 (and, in the event the Full-Time
Employment Period terminates during 1998, for the year ending on
December 31, 1998), contributions shall be made to a supplemental
retirement plan for the benefit of the Executive in an amount which,
together with any contributions made for such year for the benefit of
the Executive under the Company's Profit Sharing Retirement Plan,
Profit Sharing Integration Plan, Stock Purchase Plan and Stock
Purchase Integration Plan, is equal to the contributions which would
have been made for such year for the benefit of the Executive under
such plans based upon compensation received by the Executive during
such year notwithstanding the hours of service conditions of such
plans; and
(iv) the Company shall reimburse the Executive in accordance
with the Company's policies and procedures for all proper expenses
incurred by him in the performance of his duties during the Initial
Part-Time Employment Period.
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7. Termination of Initial Part-Time Employment Period; Suspension.
(a) Termination. The Initial Part-Time Employment Period shall be
terminated on the first to occur, after the termination of the Full-Time
Employment Period, of (i) December 31, 1999, (ii) termination thereof by the
Company at any time for Cause upon written notice given to the Executive at
least 10 days prior to such termination, (iii) Termination for Disability or
(iv) the Executive's death.
(b) Suspension. If the Company shall determine that the Executive
has committed any act or acts which constitute Cause and shall notify the
Executive thereof in writing and if the Executive shall deny that he committed
such act or acts or that such act or acts constitute Cause and shall notify the
Company of such denial in writing within seven days following the Company's
written notice to the Executive, the Board may, in its sole and absolute
discretion, suspend the Executive with full compensation and benefits during the
pendency of any investigation or arbitration with respect thereto.
8. Consequences of Termination of Initial Part-Time Employment
Period.
(a) Expiration. If the Initial Part-Time Employment Period
terminates on December 31, 1999, in lieu of any severance amounts which
otherwise would be payable to the Executive, the Executive shall thereafter be
entitled to the compensation and benefits set forth in the Company's Directors
Part-Time Employment Agreement upon the terms set forth therein on the date
hereof, but with all age and service requirements deemed to have been satisfied
and with the benefit calculated at 45% of final average annual compensation (as
defined in such Agreement) regardless of actual service, and payments thereunder
shall be made for the period commencing on January 1, 2000.
(b) Termination for Cause. If the Initial Part-Time Employment
Period is terminated by the Company for Cause, the Executive shall be entitled
to receive (i) all cash compensation payable with respect to the period through
the date of such termination, (ii) reimbursement of expenses, if any, incurred
through the date of such termination and (iii) other benefits, if any, accrued
through the date of such termination. The Executive shall not be entitled to any
compensation or benefits under the Company's Directors Part-Time Employment
Agreement or any other severance payments.
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(c) Disability or Death. If the Initial Part-Time Employment Period
terminates as a result of a Termination for Disability or the Executive's death,
in lieu of any severance amounts which otherwise would be payable to the
Executive, the Executive or his executor, administrator or other legal
representative, as the case may be, shall be entitled to the compensation set
forth in Section 6(c)(i) until December 31, 1999 and (i) in the case of
Termination for Disability, the Executive shall be entitled to the benefits set
forth in Section 6(c)(iii) until December 31, 1999 (and, in the event the
Executive dies prior to December 31, 1999, the Executive's spouse shall be
entitled to the continuation of medical insurance coverage on the same basis as
theretofore provided to the Executive until December 31, 1999) or (ii) in the
case of termination on account of the Executive's death, the Executive's spouse
shall be entitled to the continuation of medical insurance coverage on the same
basis as theretofore provided to the Executive until December 31, 1999 and, in
either case, the compensation and benefits set forth in the Company's Directors
Part-Time Employment Agreement shall become payable upon the terms set forth
therein on the date hereof, but with all age and service requirements deemed to
have been satisfied and with the benefit calculated at 45% of final average
annual compensation (as defined in such Agreement) regardless of actual service,
for the period commencing on January 1, 2000.
9. Federal and State Withholding. The Company shall deduct from the
amounts payable to the Executive pursuant to this Agreement the amount of all
required federal and state withholding taxes in accordance with the Executive's
Form W-4 on file with the Company and all applicable social security taxes.
10. Noncompetition; Nonsolicitation. (a) The Executive acknowledges
that in the course of his employment with the Company pursuant to this Agreement
he will become familiar, and during the course of his employment with the
Company or any of its subsidiaries prior to the date of this Agreement he has
become familiar, with trade secrets and customer lists of, and other
confidential information concerning, the Company and its subsidiaries,
affiliates and clients and that his services have been and will be of special,
unique and extraordinary value to the Company.
(b) The Executive agrees that during the Full-Time Employment Period
and for a period of five years thereafter (the "Noncompetition Period") he shall
not in any manner, directly or indirectly, through any person, firm or
corporation, alone or as a member of a partnership or as an officer, director,
stockholder, investor or employee of or consultant to any other corporation or
enterprise or otherwise, engage or be engaged, or assist any other
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person, firm, corporation or enterprise in engaging or being engaged, in any
business being conducted by the Company or any of its subsidiaries as of the
termination of the Full-Time Employment Period in any geographic area in which
the Company or any of its subsidiaries is then conducting such business. Within
seven days following the termination of the Full-Time Employment Period, the
Company shall deliver to the Executive a written description of the businesses
being conducted by the Company and its subsidiaries as of the date of such
termination and the respective geographic areas in which such businesses are
then being conducted; provided, however, that if the Company shall fail to
deliver such written description within such seven-day period, the Executive may
deliver to the Company a written demand therefor and the Company shall have
seven days following the delivery of such written demand to deliver such written
description to the Executive. The Executive shall have no liability for any
breach of the covenant contained in this Section 10(b) which may occur during
the period commencing on the termination of the Full-Time Employment Period and
ending on the date of the delivery of such written description to the Executive,
provided that the Executive shall have attempted in good faith to comply with
such covenant during such period. Notwithstanding the foregoing, subsequent to
the termination of the Full-Time Employment Period the Executive may engage or
be engaged, or assist any other person, firm, corporation or enterprise in
engaging or being engaged, in any business activity which is competitive with a
business activity being conducted by the Company or any of its subsidiaries at
the time of termination of the Full-Time Employment Period only if, at least 60
days prior to the commencement of such competitive activity, the Executive
delivers to the Company a written release, in form and substance satisfactory to
the Company, releasing the Company from all further obligations to the Executive
pursuant to this Agreement, pursuant to the Company's Directors Part-Time
Employment Agreement, pursuant to any other agreement or arrangement with the
Company or any subsidiary of the Company or otherwise, other than the right of
the Executive to receive benefits under any retirement plan of the Company; and
provided further, that nothing contained in this Section 10(b) shall release or
otherwise affect the obligations of the Executive contained in Section 11 of
this Agreement.
(c) The Executive further agrees that during the Non competition
Period he shall not (i) in any manner, directly or indirectly, induce or attempt
to induce any employee of the Company or any of its subsidiaries or affiliates
to terminate or abandon his or her employment for any purpose whatsoever, or
(ii) in connection with any business to which Section 10(b) applies, call on,
service, solicit or otherwise do business with any client of the Company or any
of its subsidiaries; provided, however, that the restriction contained in clause
(i) of this Section 10(c) shall not
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apply to, or interfere with, the proper performance by the Executive of his
duties pursuant to Section 2 of this Agreement.
(d) Nothing in this Section 10 shall prohibit the Executive from
being (i) a stockholder in a mutual fund or a diversified investment company or
(ii) a passive owner of not more than two percent of the outstanding stock of
any class of a corporation so long as the Executive has no active participation
in the business of such corporation.
(e) If, at any time of enforcement of this Section 10, a court or an
arbitrator holds that the restrictions stated herein are unreasonable under
circumstances then existing, the parties hereto agree that the maximum period,
scope or geographical area reasonable under such circumstances shall be
substituted for the stated period, scope or area and that the court shall be
allowed to revise the restrictions contained herein to cover the maximum period,
scope and area permitted by law.
11. Confidentiality. The Executive shall not, at any time during the
Full-Time Employment Period, the Initial Part-Time Employment Period, the
duration of the Company's Directors Part-Time Employment Agreement or
thereafter, make use of or disclose, directly or indirectly, any (i) trade
secret or other confidential or secret information of the Company or of any of
its subsidiaries, affiliates or clients or (ii) other technical, business,
proprietary or financial information of the Company or of any of its
subsidiaries, affiliates or clients not available to the public generally or to
the competitors of the Company or to the competitors of any of its subsidiaries
or affiliates, in each case that the Executive obtained as a result of his
employment by the Company or any of its subsidiaries ("Confidential
Information"), except to the extent that such Confidential Information (a) is
used by the Executive during the Full-Time Employment Period in the proper
performance of his duties pursuant to this Agreement, (b) is disclosed by the
Executive to his legal counsel in connection with legal services performed by
such counsel for the Executive, provided that such disclosure is made on a
confidential basis, (c) becomes a matter of public record or is published in a
newspaper, magazine or other periodical available to the general public, other
than as a result of any act or omission of the Executive outside the proper
performance of his duties pursuant to this Agreement, or (d) is required to be
disclosed by any law, regulation or order of any court or regulatory commission,
department or agency. Promptly following the termination of the Full-Time
Employment Period, the Executive shall surrender to the Company all records,
memoranda, notes, plans, reports, computer tapes and software and other
documents and data which constitute Confidential Information which he may then
possess or have under
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his control (together with all copies thereof); provided, however, that the
Executive may retain copies of such documents as are necessary for the
preparation of his federal or state income tax returns; and provided further
that if the Company believes that not all Confidential Information which the
Executive may then possess or have under his control has been surrendered to the
Company, the Company shall request with specificity the Confidential Information
to be surrendered by the Executive. The Executive shall have a reasonable
period of time following such request to surrender such Confidential Information
which in no event shall be less than 15 or more than 30 days following such
request and, if the Executive makes a good faith effort to comply with such
request, his failure to surrender any Confidential Information shall not
constitute Cause for purposes of Section 4(b)(iv) hereof.
12. Nondisparagement; Cooperation. (a) The Executive shall not, at
any time during the Full-Time Employment Period, the Initial Part-Time
Employment Period or the duration of the Company's Directors Part-Time
Employment Agreement or thereafter, make any statement, publicly or privately,
which would disparage the Company, its business or any director or officer of
the Company or would have a deleterious effect upon the interests of the
Company's business or its stockholders; provided, however, that the Executive
shall not be in breach of this restriction if such statements consist solely of
(i) private statements made to any officers, directors or employees of the
Company by the Executive in the course of carrying out his duties pursuant to
this Agreement or (ii) private statements made to persons other than clients or
competitors of the Company or any of its subsidiaries or its affiliates (or
their representatives) or members of the press or the financial community that
do not have a material adverse effect upon the Company; and provided further
that nothing contained in this Section 12(a) or in any other provision of this
Agreement shall preclude the Executive from making any statement in good faith
which is required by law, regulation or order of any court or regulatory
commission, department or agency. During the Full-Time Employment Period, the
Initial Part-Time Employment Period and the duration of the Company's Directors
Part-Time Employment Agreement and upon reasonable notice and at the expense of
the Company, the Executive shall take such actions as the Company shall
reasonably request (reasonableness to include, but not be limited to, a good
faith effort to accommodate the schedules and time needs of the parties) in
furtherance of the client relationships of the Company and its subsidiaries.
Upon the termination of the Full-Time Employment Period, the Executive shall
urge the clients of the Company and its subsidiaries to maintain their
relationships with the Company and its subsidiaries, which action, together with
any other actions required under this Agreement, shall not require the Executive
to perform services (i) during the Initial Part-Time
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Employment Period in excess of the limit of 10 days of service during any
calendar quarter set forth in Section 6(b) or (ii) during the duration of the
Company's Directors Part-Time Employment Agreement in excess of 10 days during
any calendar quarter.
(b) The Company shall not, at any time during the Full-Time
Employment Period, the Initial Part-Time Employment Period or the duration of
the Company's Directors Part-Time Employment Agreement or thereafter, authorize
any person to make or allow, nor shall the Company condone the making of, any
statement, publicly or privately, which would disparage the Executive; provided,
however, that the Company shall not be in breach of this restriction if such
statements consist solely of (i) private statements made to any officers,
directors or employees of the Company or (ii) private statements made to persons
other than clients or competitors of the Company or any of its subsidiaries or
affiliates (or their representatives) or members of the press or the financial
community that do not have a materially adverse effect upon the Executive; and
provided further that nothing contained in this Section 12(b) shall preclude any
officer, director, employee, agent or other representative of the Company from
making any statement in good faith which is required by any law, regulation or
order of any court or regulatory commission, department or agency.
13. Enforcement. The parties hereto agree that the Company would be
damaged irreparably in the event that any pro vision of section 10, 11, or 12 of
this Agreement were not per formed in accordance with its terms or were
otherwise breached and that money damages would be an inadequate remedy for any
such nonperformance or breach. Accordingly, the Company and its suc cessors or
permitted assigns shall be entitled, in addition to other rights and remedies
existing in their favor, to an injunction or injunctions to prevent any breach
or threatened breach of any of such provisions and to enforce such provisions
specifically (without posting a bond or other security). Each of the parties
agrees that he or it will submit himself or itself to the personal jurisdiction
of the courts of the State of Illinois in any action by the other party to
enforce an arbitration award against him or it or to obtain interim injunctive
or other relief pending an arbitration decision.
14. Survival. Sections 10, 11, 12 and 13 of this Agreement shall
survive and continue in full force and effect in accordance with their
respective terms, notwithstanding any termi nation of the Full-Time Employment
Period, the Initial Part-Time Employment Period or the duration of the Company's
Directors Part-Time Employment Agreement.
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15. Arbitration; Certain Costs. Any dispute or controversy between
the Company and the Executive, whether arising out of or relating to this
Agreement, the breach of this Agreement, or otherwise, shall be settled by
arbitration administered by the American Arbitration Association in accordance
with its Commercial Rules then in effect and judgment on the award rendered by
the arbitrator may be entered in any court having jurisdiction thereof. The
arbitrator shall have the authority to award any remedy or relief that a court
of competent jurisdiction could order or grant, including, without limitation,
the issuance of an injunction. However, either party may, without inconsistency
with this arbitration provision, apply to any court having jurisdiction over
such dispute or controversy and seek interim provisional, injunctive or other
equitable relief until the arbitration award is rendered or the controversy is
otherwise resolved. The Company shall reimburse the Executive, upon demand, for
all costs and expenses (including without limitation attorneys' fees) reasonably
incurred by the Executive in good faith in connection with this arbitration
provision, including without limitation in connection with any such application
undertaken by the Executive in good faith, as well as for all such costs and
expenses reasonably incurred by the Executive in connection with entering and/or
enforcing the award rendered by the arbitrator. Except as necessary in court
proceedings to enforce this arbitration provision or an award rendered
hereunder, or to obtain interim relief, neither a party nor an arbitrator may
disclose the existence, content or results of any arbitration hereunder without
the prior written consent of the Company and the Executive. The Company and the
Executive acknowledge that this Agreement evidences a transaction involving
interstate commerce. Notwithstanding any choice of law provision included in
this Agreement, the United States Federal Arbitration Act shall govern the
interpretation and enforcement of this arbitration provision.
16. Expenses of this Agreement. The Company shall pay the Executive's
legal fees and expenses incurred in connection with this Agreement, in an amount
not to exceed $30,000, promptly upon submission to the Company of a detailed
statement therefor, subject to approval of the Company's General Counsel.
17. Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed given when (a)
delivered personally or by overnight courier to the following addresses of the
other party hereto and his or its counsel (or such other address for such party
or his or its counsel as shall be specified by notice given pursuant to this
Section 17) or (b) sent by facsimile to the following facsimile numbers of the
other party hereto and his or its counsel (or such other facsimile number for
such party or his or its counsel as shall be specified
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by notice given pursuant to this Section 17), with the confirmatory copy
delivered by overnight courier to the addresses of such party and his or its
counsel pursuant to this Section 17:
(a) if to the Company, to:
Chief Human Resources Officer
True North Communications Inc.
000 Xxxx Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Facsimile No.: 000-000-0000
with a copy to:
Xxxxxx X. Xxxx
Sidley & Austin
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile No.: 312-853-7036
(b) if to the Executive, to:
Xxxxx Xxxxx
000 Xxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile No.: 000-000-0000
with a copy to:
Xxxxxx X. Xxxxx
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile No.: 000-000-0000
18. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
the validity, legality or enforceability of any other provision of this
Agreement or the validity, legality or enforceability of such provision in any
other jurisdiction, but this Agreement shall be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
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19. Entire Agreement. This Agreement constitutes the entire agreement
and understanding between the parties with respect to the subject matter hereof
and supersedes and preempts any prior understanding, agreements or
representations by or between the parties, written or oral, which may have
related in any manner to the subject matter hereof, including without limitation
the Existing Employment Agreement.
20. Successors and Assigns. This Agreement shall be enforceable by
the Executive and his heirs, executors, administra tors and legal
representatives, and by the Company and its successors and permitted assigns.
Any successor of the Company shall assume the liabilities of the Company
hereunder. This Agreement shall not be assigned by the Company other than to a
successor pursuant to a merger, consolidation or transfer of all or
substantially all of the capital stock or assets of the Company. The Executive's
rights pursuant to this Agreement shall continue notwithstanding any change in
control (as defined in the Directors Part-Time Employment Agreement).
21. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of Illinois
without regard to principles of conflict of laws.
22. Amendment and Waiver. The provisions of this Agreement may be
amended or waived only by the written agreement of the Company and the
Executive, and no course of conduct or failure or delay in enforcing the
provisions of this Agreement shall affect the validity, binding effect or
enforceability of this Agreement.
23. Counterparts. This Agreement may be executed in two counterparts,
each of which shall be deemed to be an original and both of which together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
TRUE COMMUNICATIONS INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------------
Xxxxxxx X. Xxxxxxxx,
Chairman of the Special Committee, and
member of the Compensation Committee, of the
Board of Directors
/s/ Xxxxx Xxxxx
--------------------------------------------
Xxxxx Xxxxx
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