EMPLOYMENT AGREEMENT
AGREEMENT made as of January 1, 1996 by and between THE
INTERPUBLIC GROUP OF COMPANIES, INC., a corporation of the State
of Delaware (hereinafter referred to as "Interpublic"), and
XXXXX X. XXXX (hereinafter referred to as "Executive").
In consideration of the mutual promises set forth
herein the parties hereto agree as follows:
ARTICLE I
Term of Employment
1.01 Upon the terms and subject to the conditions set
forth herein, Interpublic or one of its subsidiaries will employ
Executive for the period beginning January 1, 1996 and ending on
December 31, 2000, or on such earlier date as the employment of
Executive shall terminate pursuant to Article V or Article VI.
(The period during which Executive is employed hereunder is
referred to herein as the "term of employment" and Interpublic or
whichever of its subsidiaries shall from time to time employ
Executive pursuant to this Agreement is referred to herein as the
"Corporation"). Executive will serve the Corporation during the
term of employment.
ARTICLE II
Duties
2.01 During the term of employment Executive will:
(i) use his best efforts to promote the
interests of the Corporation and devote his full time and efforts
to its business and affairs;
(ii) perform such duties as the Corporation
may from time to time assign to him;
PAGE
(iii) serve as Chairman and Chief Executive
Officer at the Xxxx Group plc and have responsibility for the
management of the Xxxx Group Worldwide and in addition accept
appointments to such other positions in Interpublic as are
commensurate with his role and status. In these capacities
Executive shall report directly to the Chief Executive Officer
of Interpublic. No significant change in Executive's status in
Interpublic or the nature or scope of his duties shall be
effected without his consent.
(iv) be proposed as a member of the Corporation's
Board of Directors.
ARTICLE III
Compensation
3.01 The Corporation will compensate Executive for the
duties performed by him hereunder, including all services
rendered as an officer or director of the Corporation, by payment
of a salary at the rate of $750,000 per annum, payable in equal
installments, which the Corporation may pay at either monthly or
semi-monthly intervals.
3.02 The Corporation may at any time increase the
compensation paid to Executive hereunder if the Corporation in
its discretion shall deem it advisable so to do in order to
compensate him fairly for services rendered to the Corporation.
ARTICLE IV
BONUSES
4.01 Executive will be eligible during the term of
employment to participate in the Management Incentive
Compensation Plan ("MICP" or the "Plan") in accordance with the
terms and conditions of the Plan established from time to time,
and appropriate for an executive holding such a position.
PAGE
ARTICLE V
Termination
5.01 Interpublic may terminate the employment of
Executive hereunder:
(i) by giving Executive notice in writing at
any time specifying a termination date not less than the greater
of (a) twelve months or (b) the number of whole calendar months
remaining until February 28, 1997, after the date on which such
notice is given, in which event his employment hereunder shall
terminate on the date specified in such notice, or
(ii) Notwithstanding clause (i) above,
Interpublic may terminate the employment of Executive hereunder
by giving him notice in writing specifying any termination date
after February 28, 1997. In this event his employment hereunder
shall terminate on the date specified in such notice and the
Corporation shall thereafter pay him a sum equal to the amount by
which twelve months' salary, at his then current rate exceeds the
salary paid to him for the period from the date on which such
notice is given to the termination date specified in such notice.
Such payment shall be made during the period immediately
following the termination date specified in such notice, in
successive equal monthly installments each of which shall be
equal to one month's salary at the rate in effect at the time of
such termination, with any residue in respect of a period less
than one month to be paid together with the last installment.
(iii) However, with respect to any payments of
salary due to Executive after notice of termination shall have
been given pursuant to Sub-section 5.01 (i), should Executive
commence other employment during the period when payments
thereunder are being made, said payments shall cease forthwith.
Moreover, with respect to any payments of salary or salary
equivalents to Executive after notice of termination shall have
been given pursuant to Sub-section 5.01 (ii), should Executive
commence other employment prior to the last payment due under
that Sub-section, no further payments shall be made to Executive.
5.02 Executive may at any time give notice in writing
to the Corporation specifying a termination date not less than
twelve months after the date on which such notice is given, in
PAGE
which event his employment hereunder shall terminate on the date
specified in such notice.
5.03 If the employment of Executive hereunder is
terminated pursuant to this Article V by either the Corporation
or Executive, Executive shall continue to perform his duties
hereunder until the termination date at his salary in effect on
the date that notice of such termination is given.
5.04 If Executive dies before December 31, 2000, his
employment hereunder shall terminate on the date of his death.
ARTICLE VI
Covenants
6.01 While Executive is employed hereunder by the
Corporation he shall not without the prior written consent of the
Corporation engage, directly or indirectly, in any other trade,
business or employment, or have any interest, direct or indirect,
in any other business, firm or corporation; provided, however,
that he may continue to own or may hereafter acquire any
securities of any class of any publicly-owned company as well as
investments in other entities that are held for investment
purposes only provided that such entities are not in competition
with the Corporation and that investment in such entities does
not create a conflict of interest on the part of Executive.
6.02 Executive shall treat as confidential and keep
secret the affairs of the Corporation and shall not at any time
during the term of employment or thereafter, without the prior
written consent of the Corporation, divulge, furnish or make
known or accessible to, or use for the benefit of, anyone other
than the Corporation and its subsidiaries and affiliates any
information of a confidential nature relating in any way to the
business of the Corporation or its subsidiaries or affiliates or
their clients and obtained by him in the course of his employment
hereunder.
6.03 If Executive deliberately and seriously violates
any provision of Section 6.01 or Section 6.02, the Corporation
may, notwithstanding the provisions of Section 5.01, terminate
PAGE
the employment of Executive at any time by giving him notice in
writing specifying a termination date. In such event, his
employment hereunder shall terminate on the date specified in
such notice.
6.04 All records, papers and documents kept or made by
Executive relating to the business of the Corporation or its
subsidiaries or affiliates or their clients shall be and remain
the property of the Corporation.
6.05 All articles invented by Executive, processes
discovered by him, trademarks, designs, advertising copy and art
work, display and promotion materials and, in general, everything
of value conceived or created by him pertaining to the business
of the Corporation or any of its subsidiaries or affiliates
during the term of employment, and any and all rights of every
nature whatever thereto, shall immediately become the property of
the Corporation, and Executive will assign, transfer and deliver
all patents, copyrights, royalties, designs and copy, and any and
all interests and rights whatever thereto and thereunder to the
Corporation, provided that the Corporation shall bear any legal
or other costs reasonably incurred by Executive in connection
therewith.
6.06 Following the termination of Executive's employment
hereunder or otherwise for any reason, Executive shall not for a
period of twenty-four months from such termination either (a)
solicit any employee of the Corporation to leave such employ to
enter the employ of Executive or of any corporation or enterprise
with which Executive is then associated or (b) solicit or handle
on Executive's own behalf or on behalf of any other person, firm
or corporation, the advertising, public relations, sales
promotion or market research business of any advertiser which is
a client of the Corporation at the time of such termination.
ARTICLE VII
LONG TERM PERFORMANCE INCENTIVE PLAN; OTHER BENEFITS
7.01 As soon as practicable following execution of
this Agreement by both parties hereto, Interpublic will cause its
Compensation Committee to grant Executive an award of 8,885
performance units for the 1995-1998 performance period under
Interpublic's Long-Term Performance Incentive Plan tied to the
PAGE
cumulative compound profit growth of The Xxxx Group plc and
options under Interpublic's 1986 Stock Incentive Plan to purchase
30,000 shares of Interpublic common stock, which options shall
not be exercisable until January 1, 1998, at which time they
shall become exercisable in full.
7.02 During the term of this Agreement, Executive
shall be entitled to a housing allowance of up to $200,000 per
year.
7.03 During the term of this Agreement, Executive
shall be entitled to an automobile allowance of up to $10,000 per
year.
7.04 Interpublic agrees to have its Management Human
Resources Committee elect Executive to membership in the
Development Council, and Executive shall be entitled to receive
all fringe benefits, vacation and perquisites given to
Interpublic executives of similar title and position.
7.05 During the term of this Agreement, Executive
shall be entitled to receive reimbursement for travel of his
spouse related to Xxxx or Interpublic business of up to $30,000
per year.
ARTICLE VIII
Assignment
8.01 This Agreement shall be binding upon and enure to
the benefit of the successors and assigns of the Corporation.
Neither this Agreement nor any rights hereunder shall be
assignable by Executive and any such purported assignment by him
shall be void.
ARTICLE IX
Arbitration
9.01 Any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, including
claims involving alleged legally protected rights, such as claims
for age discrimination in violation of the Age Discrimination in
Employment Act of 1967, as amended, Title VII of the Civil Rights
Act, as amended, and all other federal and state law claims for
PAGE
defamation, breach of contract, wrongful termination and any
other claim arising because of Executive's employment,
termination of employment or otherwise, shall be settled by
arbitration in accordance with the Commercial Arbitration Rules
of the American Arbitration Association and Section 11.01 hereof,
and judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof. The
arbitration shall take place in the city where Executive
customarily renders services to the Corporation. The prevailing
party in any such arbitration shall be entitled to receive
attorney's fees and costs.
ARTICLE X
Agreement Entire
10.01 This Agreement constitutes the entire
understanding between Interpublic and Executive concerning his
employment by Interpublic or any of its affiliates or
subsidiaries and supersedes any and all previous agreements
between Executive and Interpublic or any of its affiliates or
subsidiaries concerning such employment. This Agreement may not
be changed orally.
ARTICLE XI
Applicable Law
11.01 The Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
THE INTERPUBLIC GROUP OF COMPANIES, INC.
By C. XXXX XXXXXXX
XXXXX X. XXXX
