EMPLOYMENT AGREEMENT
AGREEMENT made as of August 11, 1994 by and among THE
INTERPUBLIC GROUP OF COMPANIES, INC., a corporation of the State
of Delaware (hereinafter referred to as "Interpublic"), Xxxxxxxx
& Puris Inc., a corporation of the State of New York ("A & P")
and Xxxxxx Xxxxx (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 A & P, or another subsidiary of Interpublic into which A &
P may be merged (A & P or such other subsidiary sometimes being
referred to herein as the "Corporation") will employ Executive
for the period beginning August 11, 1994 and ending on August 10,
1999 or on such earlier date as the employment of Executive shall
terminate pursuant to Article VI or Article VII. (The period
during which Executive is employed hereunder is referred to
herein as the "term of employment".) 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; and
(iii) serve in such offices of the Corporation or its
subsidiaries as he may be elected or appointed to, which
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initially shall be Chief Executive Officer of A & P, and Vice
Chairman of Lintas Worldwide. In addition, Executive will be
appointed or elected to the Oversight Committee, the Executive
Committee and the Board of Directors of Lintas Worldwide.
Executive will report exclusively to Interpublic's Chief
Executive Officer.
2.02 In connection with Executive's employment, he shall be
based at the offices of the Corporation at New York, New York
except for reasonable necessary travel on business for the
Corporation or Interpublic in connection with his duties
hereunder, or as otherwise specifically consented to by
Executive.
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 or
Interpublic, by payment of a salary at the rate of $600,000 per
annum, payable in equal installments, which the Corporation may
pay at either monthly or semi-monthly intervals.
3.02 Interpublic may at any time increase the compensation
paid to Executive hereunder if Interpublic in its discretion
shall deem it advisable so to do in order to compensate him
fairly for services rendered to the Corporation. In any event,
Executive's salary shall be reviewed no less often than every 24
months during the term of this Agreement, beginning 24 months
following the last such review prior to the effective date of
this Agreement.
ARTICLE IV
Bonuses
4.01 Executive shall, subject to full execution of this
Agreement, receive a sign-up bonus of $1.9 million, which shall
be paid within thirty days of the date hereof.
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4.02 Except as may be provided in Section 4.04 of this
Agreement, in addition to the bonus set forth in section 4.01
above, Executive shall receive an additional bonus of $1.9
million, which shall be paid in February, 1995.
4.03 Executive additionally shall be eligible to receive a
bonus of up to $1.5 million subject, however, to the attainment
of certain operating profit targets which will be determined by
the Oversight Committee of the Corporation and Interpublic, which
bonus, if any, will be paid in February, 1996.
4.04 In addition, Executive shall be entitled for calendar
year 1994 to share in an executive bonus pool of $1.5 million, of
which $661,348 has been paid as of the date hereof. Of the
remaining $838,652 available for distribution, there will be a
dollar for dollar reduction for any 1994 revenue shortfall from
$53.5 million. Should such revenue shortfall exceed the $838,652
remaining available for distribution pursuant to this Section
4.04, such additional shortfall will be deducted, dollar for
dollar from the bonus amount due pursuant to Section 4.02 hereof.
The portion of such bonus pool which Executive shall receive,
which shall be paid in January, 1995, shall be determined in the
sole discretion of Executive.
4.05 For calendar year 1995, and all subsequent calendar
years during the term of this Agreement, Executive will be
eligible to participate in Interpublic's Management Incentive
Compensation Plan ("MICP"), in accordance with the terms and
conditions of the MICP established from time to time. Executive
shall be eligible to receive MICP awards of up to fifty percent
of base salary, but the actual award. if any, shall be determined
by the Corporation and Interpublic and shall be based on profits
of the Corporation and Interpublic, Executive's individual
performance and management discretion.
4.06 The bonus described in Section 4.01 shall be paid
irrespective of whether Executive's employment with the
Corporation has terminated for any reason prior to payment.
Executive shall be eligible for the bonuses described in Sections
4.03 and 4.04, and shall be paid the bonus described in Section
4.02, only if Executive is employed by the Corporation on the
date of payment, or if Executive's employment has terminated
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earlier due to (i) death, (ii) disability, (iii) termination by
the Corporation for reasons other than a violation of Sections
7.01 or 7.02, or (iv) termination by Executive for "good reason"
as defined in Section 6.02.
ARTICLE V
Other Employment Benefits and Compensation
5.01 Executive shall participate in the Interpublic Long
Term Performance Incentive Plan ("LTPIP"), in accordance with the
terms of such plan. Executive shall participate in such other
employee benefits and executive compensation programs as are
available to senior executives of Interpublic generally, and as
are available from time to time to other Interpublic key
management executives in accordance with the then-current terms
and conditions established by Interpublic for eligibility and
employee contributions required for participation in such
benefits opportunities.
5.02 Executive shall be entitled to 6 weeks paid vacation
per year.
5.03 Executive shall be entitled to receive prompt
reimbursement from the Corporation of all reasonable expenses
incurred by Executive in promoting the business of the
Corporation and in performing services hereunder, including all
expenses of travel and entertainment and living expenses while
away from home on business or at the request of or in the service
of the Corporation, provided that such expenses are incurred and
accounted for in accordance with the policies and procedures
established by Interpublic from time to time. Executive shall be
entitled to first class travel on business trips to the extent
that such class of services is available.
5.04 Executive shall be entitled to receive benefits
accorded to members of Interpublic's Development Council,
including up to $5,000 per annum reimbursement for financial
planning and tax preparation expenses, and 100% reimbursement for
medical expenses in accordance with the terms and conditions of
the Development Council Health Care Program, as they may exist
from time to time.
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5.05 The Corporation shall continue to provide Executive
with an automobile under the lease in effect with respect to
Executive on the date hereof, and pay related expenses to the
extent on the date hereof. Following the expiration of such
lease, the Corporation shall provide Executive with an automobile
allowance in an amount comparable to the cost of such lease for
the remainder of the term of this Agreement, or provide Executive
with the cash equivalent value thereof plus a gross up for tax
liability.
5.06 As soon as administratively feasible after full
execution of this Agreement, Interpublic will use its best
efforts to have the Compensation Committee of its Board of
Directors ("Committee") grant Executive an award for the
1995-1998 performance period under the LTPIP equal to 3,600
performance units tied to the cumulative compound profit growth
of the Corporation, and an option under Interpublic's 1986 Stock
Incentive Plan (the "Stock Plan") to purchase 14,400 shares of
Interpublic common stock at the fair market value of such stock
on January 1, 1995 (as determined in accordance with the terms of
the Stock Plan), which option may not be exercised in any part
prior to January 1, 1999 and thereafter shall be exercisable in
whole or part; provided, however, that in the event Executive's
employment is terminated for any reason other than in accordance
with Section 7.03 after December 31, 1996 but before January 1,
1999, Interpublic shall use its best efforts to have the
Committee (i) pay a pro-rata share of the compensation tied to
such performance units immediately following the end of the
performance period and (ii) vest a pro-rata portion of such stock
options, in either case based upon the number of calendar months
following December 31, 1994 but before January 1, 1999 in which
Executive was employed.
5.07 The terms of disability provisions under A & P's
policies existing on the date hereof, as applicable to Executive,
will remain in effect during the term of this Agreement.
5.08 The two split-dollar life insurance policies on
Executive's life in effect on the date hereof (Metropolitan Life
Insurance Company policy numbers 930750497A and 930750498A),
shall be maintained in effect by the Corporation in accordance
with their terms and conditions during the term of this
Agreement.
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5.9 The Corporation will continue to pay Executive's club
memberships which exist on the date of this Agreement.
5.10 The Corporation will continue to pay the premium on the
$5 million term life insurance policy on the life of Executive,
in effect on the date hereof, and such premium payments will
continue to be treated as compensation to Executive to the extent
required under applicable tax law.
5.11 Following Executive's retirement, Interpublic will
cause Executive to become eligible for retiree medical coverage
under the terms and conditions of its then existing clan.
ARTICLE VI
Termination
6.01 (i) Interpublic may terminate the employment of
Executive hereunder by giving Executive notice in writing at any
time specifying a termination date not earlier than the later of
(A) one year following the date of such notice or (B)
December 31, 1996.
(ii) Notwithstanding clause (i) above, Interpublic may
terminate the employment of Executive hereunder by giving him
notice in writing specifying any termination date after December
31, 1996, which date shall be no less than ten days following
such Executive's receipt of such notice. 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 12 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.
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6.02 Executive may at any time give notice in writing to the
Corporation specifying a termination date not less than six
months after the date on which such notice is given, in which
event his employment hereunder shall terminate on the date
specified in such notice. Notwithstanding the above, Executive
may at any time give notice in writing to the Corporation
specifying a termination date not less than 10 days after the
date on which such notice is given, if Executive has "good
reason" to terminate his employment. In that case, and unless the
Corporation has undone to the reasonable satisfaction of
Executive the actions giving rise to such good reason prior to
the termination date set forth in such notice, such termination
shall be treated as termination by the Corporation pursuant to
Section 6.01 (ii), and Executive shall be entitled to an
extension of salary payments accordingly. For purposes of this
Agreement, Executive shall have "good reason" to terminate his
employment in the event of (i) a substantial breach by the
Corporation of any material provision of this Agreement,
including a reduction in salary, or (ii) a substantial diminution
in Executive's authority, duties or responsibilities, except with
respect to such assignment or diminution which is made on a
temporary basis (not more than 30 days).
6.03 If the employment of Executive hereunder is terminated
pursuant to this Article VI 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.
6.04 If Executive dies before the fifth anniversary of the
date hereof, his employment hereunder shall terminate on the date
of his death.
6.05 Executive shall be under no duty to mitigate, by
obtaining other employment or otherwise, any payments due him by
the Corporation pursuant to Sections 6.01 or 6.02 and the
Corporation shall have no right to offset any amounts earned by
Executive from other employment or other sources against such
payments.
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ARTICLE VII
Covenants
7.01 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 (including
any publicly listed mutual fund), and provided further that he
may continue to serve as a member of the Board of Directors of
the Mystic Seaport Museum and the Upward Fund.
7.02 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.
7.03 If Executive violates any provision of Section 7.01 or
Section 7,02, the Corporation may, notwithstanding the provisions
of Section 6.01, terminate 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.
7.04 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.
7.05 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
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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, without further compensation, upon notice to him
from the Corporation.
7.06 Following the termination of Executive's employment
hereunder for any reason, Executive shall not for a period of
twenty-four months from such termination either (a) solicit any
employee of the Corporation or Interpublic 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 for
which the Corporation had actively performed services for
compensation during the 180-day period immediately prior to
Executive's termination, or to whom the Corporation had made a
substantive presentation during such period seeking such
advertiser's business.
ARTICLE VIII
Assignment
8.01 This Agreement shall be binding upon and enure to the
benefit of the successors and assigns of the Corporation, and the
heirs, legatees, administrators and personal representatives of
Executive. Neither this Agreement nor any rights hereunder shall
be assignable by Executive and any such purported assignment by
him shall be void. Neither this Agreement nor any rights
hereunder shall be assignable by the Corporation without the
prior written consent of Executive.
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ARTICLE IX
Agreement Entire
9.01 This Agreement supersedes any and all previous
agreements between Executive and the Corporation concerning his
employment by the Corporation, and/or any compensation or
bonuses. This Agreement may not be amended except by an
instrument signed by both parties hereto.
ARTICLE X
Applicable Law
10.01 The Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard
to conflicts of law.
ARTICLE XI
Notices
11.01 All notices and other communications required or
permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given if delivered personally, mailed by
certified mail (return receipt requested) or sent by overnight
delivery service or facsimile transmission to the parties at the
following addresses or at such other addresses as shall be
specified by the parties by like notice:
(a) If to A & P or the Corporation:
Xxxxxxxx & Puris Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Chief Executive Officer
Facsimile: (000) 000-0000
(b) If to Interpublic:
The Interpublic Group of Companies, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: C. Xxxx Xxxxxxx
Senior Vice President, Human Resources
Facsimile: (000) 000-0000
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(c) If to Executive:
At Executive's last known address as listed with
Employer
ARTICLE XII
Counterparts
12.01 This Agreement may be executed in any number of
counterparts and by different parties hereto in separate
counterparts, with the same effect as if all parties had signed
the same document. All such counterparts shall be deemed an
original, shall be construed together and shall constitute one
and the same instrument.
THE INTERPUBLIC GROUP OF COMPANIES, INC.
By C. Xxxx Xxxxxxx
XXXXXXXX & PURIS, INC.
By Xxxxxx Xxxxxxx, Xx.
Employee: Xxxxxx X. Xxxxx
