EXHIBIT 10(b)
EXECUTIVE SEVERANCE AGREEMENT
THIS AGREEMENT ("Agreement") dated January 1, 1998, by
and between The Interpublic Group of Companies, Inc.
("Interpublic"), a Delaware corporation (Interpublic and its
subsidiaries being referred to herein collectively as the
"Company"), and Xxxx X. Xxxxxx, Xx. (the "Executive").
W I T N E S S E T H
WHEREAS, the Company recognizes the valuable services
that the Executive has rendered thereto and desires to be assured
that the Executive will continue to attend to the business and
affairs of the Company without regard to any potential or actual
change of control of Interpublic;
WHEREAS, the Executive is willing to continue to serve
the Company but desires assurance that he will not be materially
disadvantaged by a change of control of Interpublic; and
WHEREAS, the Company is willing to accord such
assurance provided that, should the Executive's employment be
terminated consequent to a change of control, he will not for a
period thereafter engage in certain activities that could be
detrimental to the Company;
NOW, THEREFORE, in consideration of the Executive's
continued service to the Company and the mutual agreements herein
contained, Interpublic and the Executive hereby agree as follows:
ARTICLE I
RIGHT TO PAYMENTS
Section 1.1. TRIGGERING EVENTS. If Interpublic
undergoes a Change of Control, the Company shall make payments to
the Executive as provided in article II of this Agreement. If,
within two years following a Change of Control, either (a) the
Company terminates the Executive other than by means of a
termination for Cause or for death or (b) the Executive resigns
for a Good Reason (either of which events shall constitute a
"Qualifying Termination"), the Company shall make payments to the
Executive as provided in article III hereof.
Section 1.2. CHANGE OF CONTROL. A Change of Control
of Interpublic shall be deemed to have occurred if (a) any person
(within the meaning of Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934 (the "1934 Act")), other than Interpublic or
any of its majority-controlled subsidiaries, becomes the
beneficial owner (within the meaning of Rule 13d-3 under the 0000
Xxx) of 30 percent or more of the combined voting power of
Interpublic's then outstanding voting securities; (b) a tender
offer or exchange offer (other than an offer by Interpublic or a
majority-controlled subsidiary), pursuant to which 30 percent or
more of the combined voting power of Interpublic's then
outstanding voting securities was purchased, expires; (c) the
stockholders of Interpublic approve an agreement to merge or
consolidate with another corporation (other than a majority-
controlled subsidiary of Interpublic) unless Interpublic's
shareholders immediately before the merger or consolidation are
to own more than 70 percent of the combined voting power of the
resulting entity's voting securities; (d) Interpublic's
stockholders approve an agreement (including, without limitation,
a plan of liquidation) to sell or otherwise dispose of all or
substantially all of the business or assets of Interpublic; or
(e) during any period of two consecutive years, individuals who,
at the beginning of such period, constituted the Board of
Directors of Interpublic cease for any reason to constitute at
least a majority thereof, unless the election or the nomination
for election by Interpublic's stockholders of each new director
was approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of the
period. However, no Change of Control shall be deemed to have
occurred by reason of any transaction in which the Executive, or
a group of persons or entities with which the Executive acts in
concert, acquires, directly or indirectly, more than 30 percent
of the common stock or the business or assets of Interpublic.
Section 1.3. TERMINATION FOR CAUSE. Interpublic shall
have Cause to terminate the Executive for purposes of Section 1.1
of this Agreement only if, following the Change of Control, the
Executive (a) engages in conduct that constitutes a felony under
the laws of the United States or a state or country in which he
works or resides and that results or was intended to result,
directly or indirectly, in the personal enrichment of the
Executive at the Company's expense; (b) refuses (except by reason
of incapacity due to illness or injury) to make a good faith
effort to substantially perform his duties with the Company on a
full-time basis and continues such refusal for 15 days following
receipt of notice from the Company that his effort is deficient;
or (c) deliberately and materially breaches any agreement between
himself and the Company and fails to remedy that breach within 30
days following notification thereof by the Company. If the
Company has Cause to terminate the Executive, it may in fact
terminate him for Cause for purposes of section 1.1 hereof if (a)
it notifies the Executive of such Cause, (b) it gives him
reasonable opportunity to appear before a majority of
Interpublic's Board of Directors to respond to the notice of
Cause and (c) a majority of the Board of Directors subsequently
votes to terminate him.
Section 1.4. RESIGNATION FOR GOOD REASON. The
Executive shall have a Good Reason for resigning only if (a) the
Company fails to elect the Executive to, or removes him from, any
office of the Company, including without limitation membership on
any Board of Directors, that the Executive held immediately prior
to the Change of Control; (b) the Company reduces the Executive's
rate of regular cash and fully vested deferred base compensation
("Regular Compensation") from that which he earned immediately
prior to the Change of Control or fails to increase it within 12
months following the Change of Control by (in addition to any
increase pursuant to section 2.2 hereof) at least the average of
the rates of increase in his Regular Compensation during the four
consecutive 12-month periods immediately prior to the Change of
Control (or, if fewer, the number of 12-month periods immediately
prior to the Change of Control during which the Executive was
continuously employed by the Company); (c) the Company fails to
provide the Executive with fringe benefits and/or bonus plans,
such as stock option, stock purchase, restricted stock, life
insurance, health, accident, disability, incentive, bonus,
pension and profit sharing plans ("Benefit or Bonus Plans"),
that, in the aggregate, (except insofar as the Executive has
waived his rights thereunder pursuant to article II hereof) are
as valuable to him as those that he enjoyed immediately prior to
the Change of Control; (d) the Company fails to provide the
Executive with an annual number of paid vacation days at least
equal to that to which he was entitled immediately prior to the
Change of Control; (e) the Company breaches any agreement between
it and the Executive (including this Agreement); (f) without
limitation of the foregoing clause (e), the Company fails to
obtain the express assumption of this Agreement by any successor
of the Company as provided in section 6.3 hereof; (g) the Company
attempts to terminate the Executive for Cause without complying
with the provisions of section 1.3 hereof; (h) the Company
requires the Executive, without his express written consent, to
be based in an office outside of the office in which Executive is
based on the date hereof or to travel substantially more
extensively than he did prior to the Change of Control;
or (i) the Executive determines in good faith that the Company
has, without his consent, effected a significant change in his
status within, or the nature or scope of his duties or
responsibilities with, the Company that obtained immediately
prior to the Change of Control (including but not limited to,
subjecting the Executive's activities and exercise of authority
to greater immediate supervision than existed prior to the Change
of Control); provided, however, that no event designated in
clauses (a) through (i) of this sentence shall constitute a Good
Reason unless the Executive notifies Interpublic that the Company
has committed an action or inaction specified in clauses (a)
through (i) (a "Covered Action") and the Company does not cure
such Covered Action within 30 days after such notice, at which
time such Good Reason shall be deemed to have arisen.
Notwithstanding the immediately preceding sentence, no action by
the Company shall give rise to a Good Reason if it results from
the Executive's termination for Cause or death or from the
Executive's resignation for other than a Good Reason, and no
action by the Company specified in clauses (a) through (i) of the
preceding sentence shall give rise to a Good Reason if it results
from the Executive's Disability. If the Executive has a Good
Reason to resign, he may in fact resign for a Good Reason for
purposes of section 1.1 of this Agreement by, within 30 days
after the Good Reason arises, giving Interpublic a minimum of 30
and a maximum of 90 days advance notice of the date of his
resignation.
Section 1.5. DISABILITY. For all purposes of this
Agreement, the term "Disability" shall have the same meaning as
that term has in the Interpublic Long-Term Disability Plan.
ARTICLE II
PAYMENTS UPON A CHANGE OF CONTROL
section 2.1. ELECTIONS BY THE EXECUTIVE. If the
Executive so elects prior to a Change of Control, the Company
shall pay him, within 30 days following the Change of Control,
cash amounts in respect of certain Benefit or Bonus Plans or
deferred compensation arrangements designated in sections 2.2
