EXHIBIT 4.20
TRANSLATION FROM THE ORIGINAL SPANISH
EMPLOYMENT AGREEMENT
ENTERED INTO BY AND BETWEEN
MEDIA PLANNING GROUP, S.A. AND Xx. Xxxxxxxx Xxxxx
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Agreement signed by and between the parties
under the scope of the provisions of Article
2.1.a) of the Employee Act and
of Royal Decree 1382/1985, dated August 1
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Barcelona, January 20, 2001
------------------------ EMPLOYMENT AGREEMENT --------------------------
SUMMARY
I. THE PARTIES
II. REPRESENTATIONS
III. CLAUSES
Clause 1st. Appointment and Legal Regime
Appointment and Objective of the Agreement
Powers of the Manager
Hierarchical Dependency: Reporting and Rendering of Accounts
Start and Duration
Social Security Regime
Clause 2nd. Economic Regime
Salary
Automobile
Work-Related Expenses
Review and Determination of Economic Conditions
Clause 3rd. Employment Conditions
Hours
Holidays and Vacations
Ethical Duties
Clause 4th. Dedication, Confidentiality, Reservation of Ownership and
Non-Competition Agreement
Dedication
Confidentiality
Reservation of Intellectual and Industrial Property
Non-Competition
Penalization
Reporting Obligation
Specific Obligations
Scope of Application
Clause 5th. Social Security
Temporary Disability
Retirement
Widowhood and Orphandom
Clause 6th. Termination and Suspension of Agreement
Indemnification to Manager
Advance Notification
Suspension of Agreement
Company Succession
Clause 7th. Legislation
Page no. 1
------------------------ EMPLOYMENT AGREEMENT --------------------------
Clause 8th. Jurisdiction
Page no. 2
In Barcelona, on January 20, 2001
I
THE PARTIES
Party of the first part, Media Planning Group, S.A., a company of Spanish
nationality, legally domiciled in Barcelona, Xx. Xxxxxxx, No. 17, herein
represented by Xx. Xxxxxxxx Xxxxx, of legal age and Spanish nationality, with
domicile in Barcelona, calle Xxx Xxxxxxx de Anzizu, 59, holder of national
identification document number 36.210.822-J, and by Mr. Alain de Pouzilhac, of
legal age and of French nationality, with domicile in Paris, 21 rue de
Miromesnil, holder of passport number 753.197.031.529, who represent that they
are fully authorized to sign the present Agreement in virtue of the decision by
the Board of Directors of Media Planning Group, S.A. of March 30, 2000. This
party may hereinafter be called Contracting Party or MPG.
Party of the second part, Xx. Xxxxxxxx Xxxxx, of legal age, of Spanish
nationality, with professional domicile in Barcelona, calle Xx. Xxxxxxx, 17,
holder of national identification document number 46.219.948-E, who acts on /his
own behalf and interest. This party may hereinafter be called Manager.
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II
REPRESENT
That Manager has held Senior Management positions in different companies in the
Media Planning Group since January 1, 1994, having undertaken his professional
career as a Manager in different Group companies.
That the work performed by Manager falls within and is coherent with the
precepts contained in Royal Decree 1382/1985, of August 1, which regulates the
special-nature employment relationship of senior management personnel.
That the employment relationship existing between the parties continues in
effect, pursuant to the conditions which have heretofore been applicable,
agreeing in the agreement now being signed the new conditions which shall govern
the employment relationship starting from the effective date, pursuant to the
provisions of Clause 1.7 of this agreement.
That the purpose of both parties has always been and now likewise continues to
be that the assumption of management functions, including the tasks of director
in the company Media Planning Group, S.A., or in any Group Company by Manager
may not prejudice his labor rights, the stability of his job nor the conditions
of his severance.
And, by common accord, the parties, mutually recognizing the necessary legal
standing to bind themselves, have agreed to formalize the present
Senior-Management agreement under the scope established in Article 4.1 of the
aforementioned Royal Decree 1382/1985, being governed by the following
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III
CLAUSES
Clause 1st. Appointment and Legal Regime
Appointment and Objective of the Agreement
1.1 Manager performs and shall continue performing the functions of a Senior
Manager in Media Planning Group, S.A., pursuant to the conditions and
terms established in this Agreement.
1.2 The parties define the legal bond between them as a special
senior-management relationship, pursuant to the provisions of Art. 2.1.a)
of the Amended Text of the Employee Act, and Art. 1.2 of Royal Decree
1382/1985, of August 1.
Powers of the Manager
1.3 Manager, during the performance of his position, holds the broadest powers
for the performance of his function. To this end, Contracting Party shall
at all times keep in effect the corresponding notarized powers of attorney
inherent to the legal control of the Company and related to the general
objectives thereof, which he shall exercise with autonomy and full
responsibility only limited by the judgments and direct instructions
derived from the supreme government and administrative body of the
Company.
1.4 Likewise, the notarized powers of attorney required to perform management
activities in the affiliate companies with whose management he is charged,
shall be granted and formalized.
Hierarchical Dependency: Reporting and Rendering of Accounts
1.5 Manager, during the performance of his position, shall report and render
accounts directly and exclusively to MPG's Board of Directors.
Start and Duration
1.6 The Special Senior-Management Employment Relationship governed by the
present agreement has an indefinite duration from its start, expressly
recognizing seniority from January 1, 1994.
1.7 The effectiveness of this agreement is subject to the effective execution
of the "Agreement to Contribute" signed today by and among Havas
Advertising, S.A. and the remaining stockholders of Media Planning Group,
S.A.
If the condition precedent stipulated in the preceding paragraph is met,
the present agreement shall take effect on the "Completion date" (as
defined in the "Agreement to Contribute"), and it shall take full effect
from January 1, 2000.
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Social Security Regime
1.8 Contracting Party shall enroll Manager in such Social Security Regime as
at all times appertains pursuant to current law, in virtue of his
special-nature labor relationship.
Clause 2nd. Economic Regime
Salary
2.1 FIXED CONTRIBUTION: Manager shall receive for his services an annual
compensation of a fixed nature in the following amount:
o Year 2000: FIFTY MILLION PESETAS (Ptas. 50,000,000)
o Year 2001: FIFTY-FIVE MILLION PESETAS (Ptas. 55,000,000)
The aforementioned compensation of a fixed nature shall be distributed in
12 monthly payments of an identical amount, which shall be paid by months
completed. This compensation is understood to be without prejudice to the
bonus indicated in the following paragraph and other supplements and
incentives as may be established in the future.
2.2 BONUS: In addition to the fixed compensation, Contracting Party shall pay
Manager an annual bonus as a function of his personal performance and the
objectives established by Contracting Party.
2.3 REPRESENTATION EXPENSES: As representation expenses, these being construed
as all those necessary for the performance of the position, Manager may
dispose of an annual amount of EIGHT MILLION PESETAS (8,000,000 Ptas.).
The aforementioned amount shall be increased by 10% per year.
2.4 PROFIT-SHARING: In addition to the amounts established in the preceding
sections, Manager shall have a right to receive 5% on the excess of the
consolidated pretax profit of Media Planning Group, S.A., budgeted for
each of the fiscal years.
Automobile
2.5 The Contracting Party shall provide a vehicle to the Manager so that he
may be able to perform his functions adequately, and said vehicle shall be
charged to the Contracting Party and insured against all risks by the
same, pursuant to the company's policy in this regard.
Work-Related Expenses
2.6 Contracting Party shall provide to Manager, at its expense, a portable
telephone for his exclusive use.
2.7 Manager's travel expenses which result from the performance of his
functions shall be borne by Contracting Party. To that end,
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Contracting Party shall provide Manager with a company credit card which
he may use to pay for work-related expenses.
Review and Determination of Economic Conditions
2.8 The review and updating of Manager's economic conditions, the
determination of the amounts of those that are variable in nature, and the
negotiation of new conditions shall be undertaken by Contracting Party's
Board of Directors. However, Manager's different compensation items shall
be reviewed at least in the IPC.
Clause 3rd. Employment Conditions
Hours
3.1 Manager shall not be subject to a specific work day or times, without
prejudice to his obligation to perform his own tasks for his position
under the principles of effectiveness, good faith, and confidentiality,
and taking into consideration at all times the legal precepts in this
regard for the rest of the staff.
Holidays and Vacations
3.2 Manager shall also not be subject to a work schedule for holidays and
vacations, without prejudice to his right to enjoy, in an annual
calculation, one and the other, for a specific number of days never less
than the minimum established in the general legal or contractual precepts.
Manager shall organize his holidays and vacation in his prudent judgment,
but always taking into consideration the interests of Contracting Party
and pursuant to the Board of Directors.
Ethical Duties
3.3 Manager shall provide his services pursuant to the nature of his position
and functions with due diligence and pursuant to the principles of good
faith, integrity, and loyalty.
Clause 4th. Dedication, Confidentiality, Reservation of Ownership and
Non-Competition Agreement
Dedication
4.1 Manager shall perform his employment obligations on a full-time basis, and
therefore may not enter into other employment agreements with other
companies while the employment relationship subsists, except upon express
authorization from Contracting Party's Board of Directors.
4.2 Notwithstanding, Manager may dedicate himself to the management of his
assets and wealth, and belong to corporate management bodies of other
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companies not in the Group insofar as such does not prejudice his
performance, and with the knowledge of this circumstance by the Board of
Directors.
4.3 Likewise, without the knowledge of this circumstance by the Board of
Directors, Manager is not authorized to hold, directly or indirectly, more
than 50% of the stock of a company which competes with the Contracting
Party, provided that as a result of the aforementioned ownership of stock
Manager exercises any type of influence on the management of the competing
company.
Confidentiality
4.4 Manager acknowledges:
- that in the performance of the employment commitments stipulated in
this Agreement, he may have access to confidential information (as
defined below and hereafter designated as "Confidential
Information").
- that the activities to be performed by him in execution of this
Agreement shall result in direct contacts with Contracting Party's
customers, and therefore Manager may have access to technical
knowledge, business practices, and in general to contracting party's
and its customers' confidential information; and
- that this confidential information constitutes one of Contracting
Party's principal assets, and therefore it is within the legitimate
general interest thereof to include a confidentiality clause in this
Agreement.
4.5 Pursuant to the aforesaid, Manager agrees to respect and protect the
Confidential Information, and at the same time subjects himself to all the
terms and conditions of this confidentiality clause, without prejudice to
any other agreement which is more favorable to the protection of the
Confidential Information.
4.6 In particular, Manager undertakes to keep confidential all oral or written
information which he may create, use, receive, or possess while this
Agreement is in effect, whether information of a conceptual, creative (in
the advertising sense of this term), technical, accounting, administrative
nature or other type of information, regardless of its current or future
medium, and whose existence and/or content is confidential or is deemed
confidential or of appreciable value by Contracting Party and to which
Manager has access within the context of the performance of this
agreement. In particular, the present obligation refers to the following
information:
- any of contracting party's Data Processing, either for internal use
or to be used by one of its customers;
- any methodology developed by Contracting Party, both to cover its
own needs and those of its customers, either a methodology applied
to management, personnel management, creation, commercial
environment, purchase of media/spaces, audiovisual production,
administration, legal or financial activities, etc.
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- any transmission of information of a commercial nature or related to
research, finance (preferably that related to markets, sales,
profit, prices, customer and supplier lists, compensation, etc.).
4.7 Manager undertakes, except for legal or contractual exceptions in this
regard, not to acquire any type of ownership rights over all or part of
the Confidential Information or information of value to Contracting Party,
which is and shall continue to be the exclusive property of Contracting
Party or of Third Parties (as applicable).
4.8 Likewise, Manager recognizes and agrees that ownership of all media that
contains Confidential Information (principally files, letters, memoranda,
notes, reports, lists, plans, drawings, mock-ups, prototypes, photographs,
recordings, computer media of any type, as well as any other elements),
that Manager may have in his possession, or use or have temporarily,
belong exclusively to Contracting Party or to Third Parties (as
applicable).
4.9 Manager also agrees not to use or exploit the Confidential Information
(including the media on which it is found) for any purpose other than the
needs and objectives derived from his employment relationship, except upon
express written authorization from Contracting Party.
4.10 As a result, during and after the duration of this Agreement (regardless
of the reason for its termination), Manager undertakes:
i) Not to disclose, publish, reveal, transmit, transfer, or communicate
to third parties all or part of the confidential information;
ii) Not to use or exploit all or part of the Confidential Information
for any purposes other than those stipulated in this Agreement or
authorized in writing by Contracting Party.
iii) Not to reproduce or make copies of all or part of the Confidential
Information, except to save the content or file thereof on behalf of
Contracting Party.
Furthermore, Manager may not keep for himself any copy of all or part of
the Confidential Information and he shall proceed, upon request by
Contracting Party, to return or destroy the aforementioned copies,
regardless of their nature.
Reservation of Intellectual and Industrial Property
4.11 Manager assigns to Contracting Party all the rights to exploit any works
subject to protection under the scope of intellectual property, created by
Manager during the term of this agreement in virtue of his relationship to
Contracting Party, or inherent to its activities, exclusively, including
the rights to reproduce, distribute, communicate publicly, and transform.
4.12 Inventions of any type which are patentable or protectable made by Manager
during the term of this agreement
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shall belong to Contracting Party, provided that such inventions are the
result of a research activity forming part, expressly or implicitly, in
whole or in part, of the objective of this agreement.
4.13 Likewise, Contracting Party shall have a right to assume ownership of the
inventions subject to protection, or to reserve for itself a right of use
thereon, if, even if not an inventive activity forming part of the
objective of this agreement, such inventions are related to the activity
of Manager at Contracting Party and the obtainment thereof was
predominantly influenced by knowledge acquired by him within Contracting
Party, and provided that Manager is made aware of its decision to assume
ownership or reserve for itself any right of use within a period of three
(3) months from receipt by Contracting Party of the notification.
4.14 Except in the cases imperatively stipulated by the Patent Act, Manager
shall not have a right to any additional compensation whatsoever for the
assignment of the rights, inventions, and innovations stipulated in the
preceding paragraphs.
Non-Competition
4.15 During the duration of this agreement, and for a period of two (2) years
from the termination date hereof for any cause, Manager undertakes:
(i) Not to perform any work in connection with any type of advertising /
advertising account business (hereinafter called "advertising
accounts") or with potential clients, either on his own behalf and
interest or through any company where Manager exercises management
responsibilities or in which he has interests;
(ii) Not to participate in commercial acts competing with Contracting
Party;
(iii) Not to request directly or indirectly that any employee of
Contracting Party leave his current employment with the company.
The "advertising accounts" and "potential clients" of this clause refer to
the advertising accounts of public or private companies to which
Contracting Party has provided consulting or other services during the
twelve (12) months prior to the termination of this agreement.
4.16 If Contracting Party's clients are international clients, Manager
acknowledges that Contracting Parties may apply the aforementioned
employment non-competition stipulations internationally.
4.17 For such legal effects as are applicable, it is construed that 15% of
Manager's fixed compensation is to compensate for the post-contractual
non-competition obligation stipulated in the preceding paragraphs.
Penalties
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4.18 Any breach by Manager of the obligations included in this article shall
give rise to minimum indemnification equal to one year's worth of
Manager's fixed compensation at the time the breach occurs, without
prejudice to claiming greater amounts in the corresponding judicial forum.
Reporting Obligation
4.19 Manager undertakes to inform interested third parties regarding his
non-competition and confidentiality obligations.
Specific Obligations
4.20 Manager undertakes to adopt all measures required to comply with the
obligations of this clause, and undertakes to notify Contracting Party
immediately of any event, whether the event may be according to his wishes
or not, which could cause any breaches of confidentiality herein
stipulated.
4.21 Silence or lack of action by Contracting Party may not in any case be
deemed a relinquishing of Manager's obligations or a precedent.
4.22 Manager acknowledges that a breach of the obligations included in this
clause may jeopardize Contracting Party's interests, and he shall be
deemed liable for any damages or injuries that may result.
Scope of Application
4.23 The references contained in this clause to Contracting Party shall be
construed as made to Havas Advertising, S.A. as well, and to its
affiliates, provided Media Planning Group, S.A. is a company in which
Havas Advertising, S.A. has an interest.
Clause 5th. Social Security
Temporary Disability
5.1 In case of temporary disability, Manager shall have a right to have
contracting party supplement his Social Security benefits, up to reaching
100% of his compensation.
Retirement and Permanent Disability
5.2 Contracting Party shall guarantee Manager, that once he reaches 65 years
of age, or if he is in a situation of permanent disability, he shall
receive an economic amount which, added to the pension he receives from
Social Security, results in 70% of all his fixed compensation received
during the last twelve months prior to the date of his separation for
retirement or permanent disability.
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The pension supplement shall be revalued annually with the official IPC
for the previous year.
In case of death of the retired Manager under the foregoing preferential
conditions, if he leaves a widow, a lifetime widow's Pension shall be
established in an amount equivalent to 50% of the Supplementary Pension
that the retired Manager received on the date of his death.
Widowhood and Orphandom
5.3 In case of death of Manager while he is still working, his widow and
children are guaranteed the right to receive from the following benefits
from Contracting Party:
a) his widow shall have a right to receive, during her lifetime, an
economic amount which added to the widow's pension she receives from
Social Security, results in 70% of Manager's fixed compensation at
the time of his death.
b) each of his orphaned children younger than eighteen (18) years of
age, or in a regular period of university studies, shall have a
right to receive an economic amount which added to the orphan's
pension they obtain from Social Security, results in 15% of
Manager's fixed compensation at the time of his death.
The sum of the supplementary amounts received by the widow and orphan
children, stipulated in paragraphs a) and b), above, may not in any case
be more than 100% of Manager's fixed compensation at the time of his
death.
Clause 6th. Termination, Suspension of Agreement and Corporate Succession
Indemnification to Manager
6.1 In all cases of contractual extinguishment that generate a right to
compensation in favor of Manager pursuant to the currently applicable
regulations, or which may generate such in virtue of future changes in the
regulations, such indemnification shall amount in general to the sum of
the following amounts:
- an amount equivalent to multiplying by TWENTY-FOUR the monthly fixed
compensation of Manager at the time the contractual extinguishment;
- an amount equal to multiplying by TWO the bonus and representation
expenses received by Manager in the year immediately prior to the
extinguishment of the contract;
- The amount the results from prorating the base salary, the
representation expenses and the bonus corresponding to the
pre-notification period stipulated in Clauses 6.7 and 6.8 of this
Agreement.
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6.2 By way of example and not exhaustively, the following cases of
extinguishment with a right to the indemnification agreed in this clause
are listed:
1. Going out of business.
2. Disciplinary dismissal overturned or voided.
3. Extinguishment for objective causes.
4. Collective dismissal.
5. Force majeure.
6. Termination of the agreement by Manager based on any of the causes
stipulated in paragraphs a), b), and c) of Article 10.3 of Royal
Decree 1382/1985. That is to say, for breaches of contract by
Contracting Party, including thereunder material modification of the
employment conditions under the stipulated regulatory terms.
In any case, for these resolutive effects both the formal withdrawal
of Manager's agency and the de facto removal of the real content of
the management functions he performs, shall be construed as the
aforementioned material modification of employment conditions.
7. Contractual termination by Manager based on the cause stipulated in
paragraph d) of Article 10.3 of Royal Decree 1382/1985. That is to
say, by corporate succession or change of ownership thereof whose
effect is a change in its governing bodies or the content and scope
of its principal activity, provided that the extinguishment occurs
within the three months subsequent to the occurrence of such
changes.
8. Contractual termination by Manager when, for any reason other than
that stipulated in the preceding paragraph, such as a change in the
capital stock of the Group companies or any other cause, there is a
change in Contracting Party's governing bodies or the content and
scope of its principal activity, provided that the extinguishment
occurs within the three months subsequent to the occurrence of the
aforementioned change in capital stock or the occurrence of any
other regardless of the cause.
6.3 Likewise Manager may terminate the agreement with a right to the
indemnification agreed in Clause 6.1 when, for any reason, the current
President-Director General of Havas Advertising, S.A., Mr. Alain de
Pouzilhac, ceases to provide his services to Havas Advertising, S.A.,
provided that the extinguishment occurs within the six months subsequent
to the aforementioned removal, severance, or effective extinguishment of
the functions of the President-Director General.
6.4 In particular, when Manager was able to exercise but did not exercise the
resolutive authority stipulated in numbers 7 and 8 of paragraph 6.2,
above, but the agreement is extinguished for any of the other causes cited
in paragraphs 6.2 and 6.3, the
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indemnification to be received by Manager shall be that agreed in Clause
6.1 of this agreement.
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6.5 In any case, the corresponding severance wages [salarios de tramitacion],
plus the liquidation amount that might be pending, shall be added to the
indemnification cited in the preceding paragraphs.
6.6 Notwithstanding the aforesaid, this indemnification clause shall not take
effect when the agreement is extinguished by resignation of Manager,
disciplinary dismissal confirmed or not challenged judicially, or by
retirement, death, major or permanent absolute or total disability
Manager.
Advance Notification
6.7 As stipulated in Article 10.1 of Royal Decree 1382/1985, Manager may
extinguish the agreement through voluntary resignation, with at least six
(6) months' advance written notification. Contracting Party shall have a
right, in case of full or partial breach of the advance notification duty,
to indemnification equivalent to the amount of all the economic
compensation corresponding to the time remaining in such period.
6.8 As stipulated in Art. 11 of Royal Decree 1382/1985, Contracting Party may
abandon the agreement, notifying Manager of such in writing, with six (6)
months' advance notification. If such advance notification is breached in
full or in part, it shall be obligated to pay the amount of all economic
compensation corresponding to the time remaining in such period.
Suspension of Agreement
6.9 If as a result of the appointment of Manager to perform functions of the
corporate management body, there is a conflict of interest between his
special employment relationship with the commercial one inherent to such
integration, this special senior-management relationship shall not
extinguish, but rather it shall be suspended, the time elapsed being
calculated for all effects, such that the suspension period shall be taken
into consideration for the effects of seniority, compensation and, if
applicable, indemnification.
6.10 If for any reason Manager ceases to be a Director, the suspension of the
special employment relationship would be raised, the present agreement
taking effect again and the special employment bond being reestablished
with the compensation that he would receive if the agreement had been in
effect during the entire suspension period.
6.11 In such case, if Contracting Party besides relieving him of his duties as
Director, sought to do without Manager's services, it shall pay the
indemnification established in this clause as applicable.
Company Succession
6.12 The present agreement shall bind Media Planning, S.A., and any other
applicable company, by express application of Article 44 of the Employee
Act in all the cases such article stipulates, and the agreement
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shall be maintained and respected in its entirety by the liquidators,
successors, acquirers, etc., of Media Planning Group, S.A., it being
committed to give advance notice to third parties of this clause and the
obligation to maintain the provisions of this agreement.
6.13 In all the cases mentioned, in addition to the preceding guarantee, it is
likewise agreed that Contracting Party and its Group shall be jointly and
severally liable with the successor entity, for the indemnification
obligations contained in this clause.
6.14 All the aforesaid is agreed without prejudice to the extinctive authority
with right to indemnification stipulated in numbers 6, 7, and 8 of Clause
6.2 of this agreement.
6.15 The agreement shall be maintained as a unique senior-management special
employment relationship, without prejudice to Manager's being able to
provide his services, which shall necessarily be those appropriate to his
position, in another Entity, either those that ipso jure currently form
part of Grupo Media Planning Group, or those that might form part of it in
the future by horizontal or vertical disaggregation of the existing ones,
or be established as new ones in the aforementioned Group or in another
manner of association.
Clause 7th. Legislation
7.1 For all matters not regulated by the present agreement, the provisions of
Royal Decree 1382/1985, of August 1, which regulates the special nature of
the employment relationships of Senior Management personnel, shall be
followed, to whose content the parties expressly subject themselves as a
preferentially applicable legal precept, and, in the absence thereof, to
general labor law.
Clause 8th. Jurisdiction
8.1 If this relationship is declared commercial, civil, or a common employment
relationship by judicial entities or arbitration, conciliation bodies or
an administrative authority, such shall not be an impediment to applying
the clauses of this agreement in their entirety, even when the competent
jurisdiction is not labor.
AND IN WITNESS WHEREOF the Parties, after having read the document in detail,
confirm and sign it in duplicate, both copies having the same force and effect,
in the city and on the date indicated at the beginning.
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For Media Planning Group, S.A. Manager
/s/ Xxxxxxxx Xxxxx /s/ Xxxxxxxx Xxxxx
Xx. Xxxxxxxx Xxxxx Xx. Xxxxxxxx Xxxxx
/s/ Alain de Pouzilhac
Mr. Alain de Pouzilhac
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