Exhibit 10.7
Management Transition Agreement
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Background
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Bcom3 Group, Inc. (the "Company"), desires to enter into a Management Transition
Agreement with a uniquely situated senior executive (the "Executive"). The
background to such agreement is as follows:
. The Executive is currently the Vice-Chairman of the Board of the Company
and the former Chairman and CEO of one of the Company's two main
constituent companies. He is a member of the Company's Board of Directors
and a Voting Trustee. He also is one of the largest individual
employee-stockholders of the Company.
. The Executive has reduced his involvement in the day-to-day operational
management of the Company and is prepared to step down as Vice-Chairman of
the Board while continuing to serve as a Board member.
. It is in the best interests of the Company and its stockholders to provide
for a smooth and seamless transition of management authority to the new CEO
and other senior managers of the Company, and to promote an alignment of
interests among the Company's Board of Directors.
. It is particularly important to implement this transition as soon as
possible in order for the new management team to lead the Company and its
subsidiaries through the changes that must be put in place prior to an IPO,
in such manner and within such timeframe as determined in the best judgment
of such new management team.
. It is the desire of the Company to provide for an appropriate transition
package for the Executive in recognition of his 30-plus years of dedicated
service to one of the Company's constituent companies, the substantial
growth in shareholder value which occurred during the period that he served
as CEO of such company, as well as the anticipated IPO for the Company.
THEREFORE, the Company and the Executive agree to the following Management
Transition terms:
Retirement
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. The Executive will continue in his current employment position with
the Company through the end of 2000, receiving his current salary and
employee benefits through such date. - -
. On or before December 31, 2000, at a time and in a manner that is
mutually acceptable to the Executive and the CEO of the Company, the
Executive will formally announce his retirement from full-time
employment as of December 31, 2001.
. At the first meeting of the Board of Directors of the Company after
March 31, 2001, the Executive will resign as Vice-Chairman of the
Board, while continuing to serve as a Board member.
. The Company will treat the Executive's retirement as of December 31,
2000, as an "Agreed Separation" pursuant to the Bcom3 Group, Inc.
Stock Purchase Agreement, unless there has been a material breach of
this Agreement prior to December 31, 2000.
. Under the fully-vested "Executive Employment Consultancy Arrangement"
("EECA") between the Executive and Xxx Xxxxxxx Company, Inc. (now Xxx
Xxxxxxx Worldwide, Inc. -- "Xxx Xxxxxxx")), entered into when the
Executive first became a director of Xxx Xxxxxxx, the Executive will
cease to be a member of the Board of Directors of Xxx Xxxxxxx on
December 31, 2000, but will continue to be an "executive consultant"
to Xxx Xxxxxxx for a period of five years. Subject to the terms of the
EECA, as an executive consultant the Executive will receive regular
compensation from Xxx Xxxxxxx at a reduced level (an annual amount
equal to 30% of the Executive's 2000 compensation), will in general be
entitled to participate in such employee benefit plans as Xxx Xxxxxxx
may offer to other executives, and will continue to be subject to
limitations on competitive activities that apply generally to Xxx
Xxxxxxx employees.
. Upon termination of employment and the five years of consultancy under
the EECA, the Executive will be entitled to full retiree health and
insurance benefits, subject to the terms of the plans at that time.
Special Bonus
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. In recognition of his long service as CEO and Chairman of one of the
Company's constituent entities, his service as Chairman of the Board of the
Company since its inception, and his past performance in connection with
the combination and integration of the Company's constituent entities, the
Company will provide the Executive a special bonus equal to $68,500 per
month beginning with January 2001 and ending after: (a) the
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first month in which the Executive has in fact realized S12 million or more
in cash or immediately marketable securities on the transfer or sale of
some or all of his stock in the Company, or (b) the second month after the
Executive has an ability to sell Company stock in a market transaction
unimpeded by the Bcom3 Stock Purchase Agreement or an underwriter's
"lock-up" provision (whether or not the Executive takes advantage of such
opportunity, or receives or entertains a formal offer to purchase such
stock).
Confidentiality, Non-Compete and Non-Solicitation. Release, and other Formal
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Provisions
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. Confidentiality: The terms, conditions and existence of this Management
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Transition Agreement are strictly confidential. The Executive agrees not to
share this Agreement and the terms of this Agreement with anybody other
than his immediate family and his professional advisers, the Board of
Directors of the Company, and the Company's Chief Executive Officer, the
Chief Operating Officer, and the Chief Legal Officer.
. Non-Compete and Non-Solicitation: Consistent with the terms of the EECA
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that has effect with respect to Xxx Xxxxxxx, the Executive agrees that for
a period of five years the Executive will not do any of the following,
unless the Chief Executive Officer of the Company gives prior written
consent upon such terms as the CEO shall deem appropriate:
. Directly or indirectly own, manage, operate, control, be employed by
or be connected with the ownership, management, operation or control
of:
. Any advertising agency or other marketing communications company
(or holding company or subsidiary thereof) that is competitive
with any part of the Company, including the Company and its
operating units (excluding ownership of less than 1% of a
company's publicly traded securities);
. Any client of the Company; or
. Any company or other entity selling products that compete with
products of clients of the Company.
. Directly or indirectly, for the Executive's own benefit or for the
benefit of any other person, firm or corporation:
. Solicit, for purposes of employment, either any employee of the
Company or any employee of any client of the Company;
. Induce either any employee of the Company or any employee of any
client of the Company to terminate such employment for purposes
of becoming employed elsewhere;
. Interfere with the relationship either between the Company and
its employees or between any client of the Company and its
employees; or
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. Otherwise hire or induce others to hire either any employee of
the Company or of any client of the Company.
. Release: The Executive shall release and forever discharge the Company and
its subsidiaries and affiliates, and their predecessors, successors,
assignees, shareholders, officers, directors, employees, agents and
attorneys, past and present (collectively, the "Released Entities"), from
any and all claims, obligations, or causes of action (excepting a breach of
this Agreement and failure to provide any vested benefit to which The
Executive is legally entitled), of whatever kind, arising out any federal,
state, or local statute, law, constitution, ordinance, regulation, or
order, or in any way connected with any acts, omissions, practices, or
policies which were or could have been asserted in connection with the
Executive's employment with or termination of employment from the Company
or its subsidiaries or affiliates, including, without limitation, any
action under Title VII of the Civil Rights Act of 1964, as amended
(including as amended by the Civil Rights Act of 1991), 42 U.S.C. (S)
2000e et seq., the Age Discrimination in Employment Act, as amended
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(including as amended by the Older Workers Benefit Protection Act), 29
U.S.C. (S) 621 et seq., the Vocational Rehabilitation Act of 1973, 29
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U.S.C. (S) 793 et seq., the Americans With Disabilities Act, 42 U.S.C. (S)
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12101 et seq., the Family and Medical Leave Act of 1993, 29 U.S.C. 2601
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et seq.
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THE EXECUTIVE AGREES THAT THIS RELEASE IS GIVEN KNOWINGLY AND
VOLUNTARILY AND ACKNOWLEDGES THAT:
(a) THIS AGREEMENT IS WRITTEN IN A MANNER THAT HE UNDERSTANDS;
(b) THIS RELEASE REFERS TO RIGHTS UNDER THE AGE DISCRIMINATION IN
EMPLOYMENT ACT, AS AMENDED;
(c) THE EXECUTIVE HAS NOT WAIVED ANY RIGHTS ARISING AFTER THE DATE OF
THIS AGREEMENT;
(d) THE EXECUTIVE HAS RECEIVED VALUABLE CONSIDERATION IN EXCHANGE FOR
THE RELEASE OTHER THAN AMOUNTS EMPLOYEE IS ALREADY ENTITLED TO
RECEIVE; AND
(e) EMPLOYEE HAS BEEN ADVISED TO CONSULT WITH AN ATTORNEY PRIOR TO
EXECUTING THIS AGREEMENT.
. Covenant Not To Xxx: The Executive shall not file any suit, claim or
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complaint in a court of law against the Company or any of its subsidiaries
or affiliates arising out of, or related to, Employee's employment with the
Company or any of its subsidiaries or affiliates, excepting (1) an action
for breach of this Agreement; and (2) an action for failure to provide
vested benefits to which Employee is legally entitled, if any. The
Executive and the Company expressly consent that this Agreement shall be
given full force and effect
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according to each and all of its terms and provisions. The Executive and
the Company acknowledge and agree that this covenant not to file any suit,
claim or complaint is an essential and material part of this Agreement and
that without its inclusion, this Agreement would not have been reached by
the parties. Should a court of competent jurisdiction find that the
Executive or the Company has breached any of their respective covenants or
agreements, then the Executive or the Company agree that the successful
party shall be entitled to recover its reasonable attorneys' fees and costs
relating to any suit, claim or charge brought by either party for breach of
the covenants or agreements set forth in this Agreement.
. Nondisparagement: The Executive shall not engage in conduct or disclose any
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information to the public or any third party which (i) directly or
indirectly discredits or disparages the Company or any of its operating
businesses and/or their respective officers, directors, shareholders or
clients; or (ii) is detrimental to the reputation, character, or standing
of the Company and/or any of their respective officers, directors,
shareholders or clients. The officers of the Company shall not engage in
any conduct or disclose any information to any third party which (i)
directly or indirectly discredits or disparages the Executive or (ii) is
detrimental to the reputation, character or standing of the Executive.
. Taxes: The Executive will be responsible for all taxes imposed on the
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payments contemplated by this Agreement, and all payments will be paid to
the Executive net of applicable withholdings that are required by law.
. Entire Agreement: Except as provided in this Management Transition
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Agreement, and such vested benefits as have previously accrued to the
Executive, no other compensation will be payable to the Executive in
respect of his relationship with the Company, unless otherwise agreed by
the Company in writing.
. Governing Law: This Agreement shall be construed in accordance with the
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laws of the State of Illinois.
. Headings: The headings used for the paragraphs of this Agreement are solely
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for the convenience of the parties and shall not have any other independent
meaning or significance.
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. Notices: Notices shall be in writing and shall be addressed in the
following manner:
If to Executive, to the address shown here:
Xxxx Xxxxxxx
000 Xxxx Xxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000
And if to Bcom3, to the address shown here:
Bcom3 Group, Inc.
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Chief Legal Officer
. Enforceability: The invalidity in whole or in part of any provision of this
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Agreement shall not affect the validity of any other provision.
IN WITNESS WHEREOF, the parties hereto confirm agreement by the signatures shown
below.
EXECUTIVE:
/s/ Xxxxxxx X. Xxxxxxx Xxxxx X. Xxxxxxxx
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WITNESS
Xxxxxxx X. Xxxxxxx
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Print Name
Date 12/22/00 Date: 12/22/00
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Bcom3 Group, Inc.:
By: /s/ Xxxxxxxxx X. Xxxxxxx /s/ Xxxxx X. Xxxx
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WITNESS
Xxxxxxxxx X. Xxxxxxx
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Print Name
Its: Secretary and Chief Legal Officer
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Date 21 Dec 2000 Date: 12/21/00
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