Exhibit 99.42
CHANGE IN CONTROL SEVERANCE AGREEMENT
THIS AGREEMENT is entered into as of the 8th day of December,
1999 by and between Infratest Xxxxx Aktiengesellschaft Holding ("Infratest
Xxxxx"), a wholly-owned subsidiary of the NFO Worldwide, Inc., a Delaware
corporation (the "Company") and Dr. Hartmut Kiock ("Executive").
W I T N E S S E T H
WHEREAS, the Company considers the establishment and
maintenance of a sound and vital management to be essential to protecting and
enhancing the best interests of the Company, and its stockholders;
WHEREAS, the Company recognizes that, as is the case with many
publicly held corporations, the possibility of a change in control may arise and
that such possibility may result in the departure or distraction of management
personnel to the detriment of the Company and its stockholders;
WHEREAS, Infratest Xxxxx and Executive are party to a Contract
of Employment effective November 20, 1998 (the "Employment Agreement");
WHEREAS, the Board (as defined in Section 1) has determined
that it is in the best interests of the Company and its stockholders to provide
incentives to the Executive in addition to those in the Employment Agreement in
order to ensure Executive's continued and undivided dedication to his duties in
the event of any threat or occurrence of a Change in Control (as defined in
Section 1) of the Company; and
WHEREAS, the Board has authorized the Company to enter into
this Agreement.
NOW, THEREFORE, for and in consideration of the premises and
the mutual covenants and agreements herein contained, Infratest Xxxxx and the
Executive hereby agree as follows:
1. DEFINITIONS. As used in this Agreement, the
following terms shall have the respective meanings set forth below:
(a) "Annual Bonus" shall mean the Executive's annual
bonus as provided for in Section 5 of the Employment Agreement.
(b) "Board" means the Board of Directors of the
Company.
(c) "Bonus Amount" means the highest Annual Bonus
earned by Executive from the Company (or its affiliates) and Infratest Xxxxx
during the last five (5) completed fiscal years of the Company immediately
preceding Executive's Date of Termination (annualized in the event Executive was
not employed by the Company (or its affiliates) or Infratest Xxxxx for the whole
of any such fiscal year). If the occasion arises, the determination of the
highest Bonus Amount of the last five fiscal years includes the bonus payments
of Infratest Xxxxx or its legal predecessors.
(d) "Cause" shall mean (i) the commission of a felony
or a crime involving moral turpitude or the commission of any other act
involving dishonesty, disloyalty or fraud with respect to the Company or any of
its subsidiaries, (ii) conduct tending to bring the Company or any of its
subsidiaries, including, but not limited to, Infratest Xxxxx, into substantial
public disgrace or disrepute, (iii) substantial and repeated failure to perform
duties as reasonably and lawfully directed by the Board or the Supervisory
Board of Infratest Xxxxx, (iv) xxxxx negligence or willful misconduct with
respect to the Company or any of its subsidiaries, including, but not limited
to, Infratest Xxxxx, or (v) any other material breach of this Agreement which is
not cured within 15 days after written notice thereof to the Executive.
(e) "Change in Control" shall mean the following and
shall be deemed to have occurred if any of the following events shall have
occurred: (i) any "person" or "group" (as such terms are used in Section 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended, (the "Exchange
Act")) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act as in effect on the date hereof, except that a person shall be
deemed to be the "beneficial owner" of all shares that any such person has the
right to acquire pursuant to any agreement or arrangement or upon exercise of
conversion rights, warrants, options or otherwise, without regard to the
sixty-day period referred to in such Rule), directly or indirectly, of
securities representing 30% or more of the combined voting power of the
Company's then outstanding voting securities; or (ii) at any time during any
period of two consecutive years (not including any period prior to the execution
of this Agreement), individuals who at the beginning of such period constituted
the Board and any new directors, whose election by the Board or nomination for
election by the Company's stockholders was approved by a vote of at least
two-thirds (2/3) of the Company directors then still in office who either were
the Company directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority thereof. Notwithstanding the foregoing, a Change in
Control shall not be deemed to occur merely by reason of an acquisition of
Company securities by, or any consolidation, merger or exchange of securities
with, any entity that, immediately prior to such acquisition, consolidation,
merger or exchange of securities, was a "subsidiary", as such term is defined
below. For these purposes, the term "subsidiary" means (i) any corporation of
which 95% of the capital stock of such corporation is owned, directly or
indirectly, by the Company and (ii) any unincorporated entity in respect of
which the Company has, directly or indirectly, an equivalent degree of
ownership.
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(f) "Date of Termination" means (1) the effective
date on which Executive's employment by the Company and/or Infratest Xxxxx
terminates as specified in a prior written notice by the Company or Executive,
as the case may be, to the other, delivered pursuant to Section 9 or (2) if
Executive's employment by the Company and Infratest Xxxxx terminates by reason
of death, the date of death of Executive.
(g) "Disability" shall mean the Executive's inability
to work as determined pursuant to Section 2 of the Employment Agreement.
(h) "Fringe Benefits" shall mean the fringe benefits
provided to the Executive pursuant to Section 7 of the Employment Agreement.
(i) "Good Reason" shall mean the following and shall
be deemed to have occurred if any of the following events shall have occurred:
(i) the Executive is removed from any of the positions he holds as of the date
hereof, or is assigned duties and responsibilities that are inconsistent with
the scope of duties and responsibilities associated with such positions; (ii)
Infratest Xxxxx fails to pay the Executive any amounts otherwise due hereunder;
(iii) the Executive's Base Salary is reduced or his Fringe Benefits are reduced;
(iv) the Executive's principal office is relocated outside of Munich, Germany
without his consent; or (v) the failure of the Company to obtain the assumption
(and, if applicable, guarantee) agreement from any successor (and Parent, if
applicable) as contemplated in Section 8(b).
(j) "Qualifying Termination" means a termination of
Executive's employment (i) by the Company or Infratest Xxxxx other than for
Cause, (ii) by Executive for Good Reason, or (iii) on account of death or
Disability.
(k) "Subsidiary" means any corporation or other
entity in which the Company has a direct or indirect ownership interest of 50%
or more of the total combined voting power of the then outstanding securities or
interests of such corporation or other entity entitled to vote generally in the
election of directors or in which the Company has the right to receive 50% or
more of the distribution of profits or 50% of the assets upon liquidation or
dissolution.
(l) "Termination Period" means the period of time
beginning with a Change in Control and ending 30 months following such Change in
Control. Notwithstanding anything in this Agreement to the contrary, if (i)
Executive's employment is terminated prior to a Change in Control for reasons
that would have constituted a Qualifying Termination if they had occurred
following a Change in Control; (ii) Executive reasonably demonstrates that such
termination (or Good Reason event) was at the request of a third party who had
indicated an intention or taken steps reasonably calculated to effect a Change
in Control; and (iii) a Change in Control involving such third party (or a party
competing with such third party to effectuate a Change in Control) does occur,
then for purposes of this Agreement, the date immediately prior to the date of
such termination of employment or event constituting Good
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Reason shall be treated as a Change in Control. For purposes of determining the
timing of payments and benefits to Executive under Section 4, the date of the
actual Change in Control shall of treated as Executive's Date of Termination
under Section l(f).
2. OBLIGATION OF EXECUTIVE. In the event of a tender or
exchange offer, proxy contest, or the execution of any agreement which, if
consummated, would constitute a Change in Control, Executive agrees not to
voluntarily leave the employ of the Company or Infratest Xxxxx, other than as a
result of Disability, or an event which would constitute Good Reason if a Change
in Control had occurred, until the Change in Control occurs or, if earlier, such
tender or exchange offer, proxy contest, or agreement is terminated or
abandoned.
3. TERM OF AGREEMENT. This Agreement shall be effective on the
date hereof and shall continue in effect until Infratest Xxxxx shall have given
three (3) years' written notice of cancellation; PROVIDED, THAT, notwithstanding
the delivery of any such notice, this Agreement shall continue in effect for a
period of 30 months after a Change in Control, if such Change in Control shall
have occurred during the term of this Agreement. Notwithstanding anything in
this Section to the contrary, this Agreement shall terminate if Executive or
Infratest Xxxxx terminates Executive's employment prior to a Change in Control
except as provided in Section l(l).
4. PAYMENTS UPON QUALIFYING TERMINATION. If during the
Termination Period the employment of Executive shall terminate pursuant to a
Qualifying Termination, Infratest Xxxxx shall, subject to the last paragraph of
this Section:
(a) within ten (10) days following the Date of
Termination provide to Executive a lump-sum cash amount equal to the sum of (A)
Executive's Base Salary through the Date of Termination and any bonus amounts
which have become payable, to the extent not theretofore paid or deferred, (B) a
pro rata portion of Executive's Annual Bonus for the fiscal year in which
Executive's Date of Termination occurs in an amount at least equal to (1)
Executive's Bonus Amount, multiplied by (2) a fraction, the numerator of which
is the number of days in the fiscal year in which the Date of Termination occurs
through the Date of Termination and the denominator of which is three hundred
sixty-five (365), and (C) any compensation previously deferred by Executive
other than pursuant to a tax-qualified plan (together with any interest and
earnings thereon) which shall be fully vested as of the date of the Change of
Control and any accrued vacation pay, in each case to the extent not theretofore
paid;
(b) within ten (10) days following the Date of
Termination provide to Executive a lump-sum cash amount equal to (i) 2.25 times
Executive's highest annual rate of base salary during the 12-month period
immediately prior to Executive's Date of Termination, plus (ii) 2.25 times
Executive's Bonus Amount;
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(c) continue to provide, for a period of two (2)
years following Executive's Date of Termination, Executive (and Executive's
dependents, if applicable) with the same level of Fringe Benefits upon
substantially the same terms and conditions (including contributions required by
Executive for such benefits) as existed immediately prior to Executive's Date of
Termination (or, if more favorable to Executive, as such benefits and terms and
conditions existed immediately prior to the Change in Control); PROVIDED, THAT,
if Executive cannot continue to participate in the plans providing such
benefits, Infratest Xxxxx shall otherwise provide such benefits on the same
after-tax basis as if continued participation had been permitted.
Notwithstanding the foregoing, in the event Executive becomes reemployed with
another employer and becomes eligible to receive welfare benefits from such
employer, the welfare benefits described herein shall be secondary to such
benefits during the period of Executive's eligibility, but only to the extent
that Infratest Xxxxx reimburses Executive for any increased cost and provides
any additional benefits necessary to give Executive the benefits provided
hereunder; and
(d) cause the Company to accelerate the vesting and
exercisability of all options held by Executive and granted under the NFO
Research, Inc. Stock Option Plan (the "Option Plan") or any other stock option
plan or agreement of the Company or its affiliates. In addition, all options
shall remain exercisable for two years following such termination, except to the
extent the Committee (as defined in the Option Plan) permits exercise after such
date.
Notwithstanding anything to the contrary set forth herein,
this agreement shall in no way affect Executive's right to receive certain
benefits after giving three months notice following a Change in Control pursuant
to Section 2.2(b) of the Employment Agreement. To the extent the Executive is
entitled to, or has received benefits under, Section 2 of the Employment
Agreement from Infratest Xxxxx following a Change in Control, the amounts
provided for hereunder shall be offset by any such amounts received under the
Employment Agreement as a result of the Executive's termination of employment in
order to prevent any duplication of benefits.
5. WITHHOLDING TAXES. Infratest Xxxxx may withhold from all
payments due to Executive (or his beneficiary or estate) hereunder all taxes
which, by applicable federal, state, local or other law, Infratest Xxxxx is
required to withhold therefrom.
6. REIMBURSEMENT OF EXPENSES. If any contest or dispute shall
arise under this Agreement involving termination of Executive's employment with
Infratest Xxxxx or involving the failure or refusal of Infratest Xxxxx to
perform fully in accordance with the terms hereof, Infratest Xxxxx shall
reimburse Executive, on a current basis, for all reasonable legal fees and
expenses, if any, incurred by Executive in connection with such contest or
dispute (regardless of the result thereof), together with interest in an amount
equal to the prime rate from time to time in effect, but in no event higher than
the maximum legal rate permissible under applicable law, such interest to accrue
from the date Infratest Xxxxx receives Executive's statement for such fees and
expenses through the date of payment thereof,
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regardless of whether or not Executive's claim is upheld by an arbitration
panel; PROVIDED, HOWEVER, Executive shall be required to repay any such amounts
to Infratest Xxxxx to the extent that an arbitration panel issues a final and
non-appealable order setting forth the determination that the position taken by
Executive was frivolous or advanced by Executive in bad faith.
7. SCOPE OF AGREEMENT. Nothing in this Agreement shall be
deemed to entitle Executive to continued employment with the Company or its
Subsidiaries, and if Executive's employment with the Company or its Subsidiaries
shall terminate prior to a Change in Control, Executive shall have no further
rights under this Agreement (except as otherwise provided hereunder); PROVIDED,
HOWEVER, that any termination of Executive's employment during the Termination
Period shall be subject to all of the provisions of this Agreement.
8. SUCCESSORS; BINDING AGREEMENT.
(a) This Agreement shall not be terminated by any
business combination. In the event of any business combination, the provisions
of this Agreement shall be binding upon the surviving corporation thereof, and
such surviving corporation shall be treated as Infratest Xxxxx hereunder.
(b) Infratest Xxxxx agrees that in connection with
any business combination, it will cause any successor entity to Infratest Xxxxx
unconditionally to assume (and for any parent corporation in such business
combination to guarantee), by written instrument delivered to Executive (or his
beneficiary or estate), all of the obligations of Infratest Xxxxx hereunder.
Failure of Infratest Xxxxx to obtain such assumption and guarantee prior to the
effectiveness of any such business combination that constitutes a Change in
Control, shall be a breach of this Agreement and shall constitute Good Reason
hereunder and shall entitle Executive to compensation and other benefits from
Infratest Xxxxx in the same amount and on the same terms as Executive would be
entitled hereunder if Executive's employment were terminated following a Change
in Control other than by reason of a Qualifying Termination. For purposes of
implementing the foregoing, the date on which any such business combination
becomes effective shall be deemed the date Good Reason occurs, and shall be the
Date of Termination if requested by Executive.
(c) This Agreement shall inure to the benefit of and
be enforceable by Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
Executive shall die while any amounts would be payable to Executive hereunder
had Executive continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to such
person or persons appointed in writing by Executive to receive such amounts or,
if no person is so appointed, to Executive's estate.
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9. NOTICE. (a) For purposes of this Agreement, all notices and
other communications required or permitted hereunder shall be in writing and
shall be deemed to have been duly given when delivered or five (5) days after
deposit in the United States mail, certified and return receipt requested,
postage prepaid, addressed as follows:
If to the Executive:
Xxxxxxx Xxxxx
Xxxxxxxxxxxx 0X
X-00000 Xxxxxx
Germany
If to Infratest Xxxxx:
Xxxxxxxxxxx Xxxxxxx 000
X-00000 Xxxxxx
Xxxxxxx
with a copy to:
NFO Worldwide, Inc.
0 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
(b) A written notice of Executive's Date of
Termination by Infratest Xxxxx or Executive, as the case may be, to the other,
shall (i) indicate the specific termination provision in this Agreement relied
upon, (ii) to the extent applicable, set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of Executive's
employment under the provision so indicated and (iii) specify the termination
date (which date shall be not less than fifteen (15) (thirty (30), if
termination is by Infratest Xxxxx for Disability) nor more than sixty (60) days
after the giving of such notice). The failure by Executive or Infratest Xxxxx to
set forth in such notice any fact or circumstance which contributes to a showing
of Good Reason or Cause shall not waive any right of Executive or Infratest
Xxxxx hereunder or preclude Executive or Infratest Xxxxx from asserting such
fact or circumstance in enforcing Executive's or Infratest Xxxxx'x rights
hereunder.
10. FULL SETTLEMENT; RESOLUTION OF DISPUTES. Other than as
described in the last subparagraph of Section 4, Infratest Xxxxx'x obligation to
make any payments provided for in this Agreement and otherwise to perform its
obligations hereunder in the event of a Qualifying Termination during the
Termination Period shall be in lieu and in full settlement of all other
severance payments to Executive under any other severance or employment
agreement between Executive and Infratest Xxxxx, and any severance plan of
Infratest Xxxxx, including, but not limited to, the Employment Agreement;
PROVIDED, HOWEVER,
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that the provisions of the Employment Agreement shall remain in effect to the
extent otherwise applicable pursuant to its terms for all other purposes,
including with respect to any termination that is not a Qualifying Termination
and any termination that would have constituted a Qualifying Termination but is
not covered by this Agreement because it does not occur during the Termination
Period. Infratest Xxxxx'x obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action which
Infratest Xxxxx may have against Executive or others. In no event shall
Executive be obligated to seek other employment or take other action by way of
mitigation of the amounts payable to Executive under any of the provisions of
this Agreement and, except as provided in Section 4(c), such amounts shall not
be reduced whether or not Executive obtains other employment. Any dispute or
controversy arising under or in connection with this Agreement shall be settled
exclusively by arbitration in Germany by three arbitrators. Judgment may be
entered on the arbitrators' award in any court having jurisdiction. Infratest
Xxxxx shall bear all costs and expenses arising in connection with any
arbitration proceeding pursuant to this Section.
11. EMPLOYMENT WITH SUBSIDIARIES. Employment with Infratest
Xxxxx for purposes of this Agreement shall include employment with any
Subsidiary or parent.
12. SURVIVAL. The respective obligations and benefits afforded
to Infratest Xxxxx and the Executive as provided in Sections 4 (to the extent
that payments or benefits are owed as a result of a termination of employment
that occurs during the term of this Agreement), 5 (to the extent that Payments
are made to Executive as a result of a Change in Control that occurs during the
term of this Agreement), 6, 7, 9(c) and 11 shall survive the termination of this
Agreement.
13. GOVERNING LAW; VALIDITY. THE INTERPRETATION, CONSTRUCTION
AND PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF GERMANY WITHOUT REGARD TO THE
PRINCIPLE OF CONFLICTS OF LAWS. THE INVALIDITY OR UNENFORCEABILITY OF ANY
PROVISION OF THIS AGREEMENT SHALL NOT AFFECT THE VALIDITY OR ENFORCEABILITY OF
ANY OTHER PROVISION OF THIS AGREEMENT, WHICH OTHER PROVISIONS SHALL REMAIN IN
FULL FORCE AND EFFECT.
14. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same instrument.
15. MISCELLANEOUS. No provision of this Agreement may be
modified or waived unless such modification or waiver is agreed to in writing
and signed by Executive and by a duly authorized officer of Infratest Xxxxx. No
waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
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dissimilar provisions or conditions at the same or at any prior or subsequent
time. Failure by Executive or Infratest Xxxxx to insist upon strict compliance
with any provision of this Agreement or to assert any right Executive or
Infratest Xxxxx may have hereunder, including, without limitation, the right of
Executive to terminate employment for Good Reason, shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement. Except as otherwise specifically provided herein, the rights of, and
benefits payable to, Executive, his estate or his beneficiaries pursuant to this
Agreement are in addition to any rights of, or benefits payable to, Executive,
his estate or his beneficiaries under any other employee benefit plan or
compensation program of Infratest Xxxxx.
IN WITNESS WHEREOF, Infratest Xxxxx has caused this Agreement to be
executed by a duly authorized officer of Infratest Xxxxx and Executive has
executed this Agreement as of the day and year first above written.
INFRATEST XXXXX
AKTIENGESELLSCHAFT HOLDING
By: _________________________________
Title: _________________________________
/s/ HARMUT KIOCK
_________________________________
Hartmut Kiock
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