Employment Agreement - Interpublic Group of Companies Inc. and Steven Berns
AGREEMENT made as of August 3, 1999 by and between THE INTERPUBLIC GROUP OF COMPANIES, INC., a corporation of the State of Delaware (hereinafter referred to as "Interpublic"), and STEVEN BERNS (hereinafter referred to as "Executive").
In consideration of the mutual promises set forth herein the parties hereto agree as follows:
Term of Employment
1.01 Upon the terms and subject to the conditions set forth herein, Interpublic will employ Executive for the period beginning August 3, 1999 and ending on August 2, 2004, or on such earlier date as the employment of Executive shall terminate pursuant to Article VII or Article VIII. The period during which Executive is employed hereunder is referred to herein as the "term of employment". Executive will serve Interpublic during the term of employment.
2.01 During the term of employment Executive will:
(i) Use his best efforts to promote the interests of Interpublic and devote his full time and efforts to its business and affairs;
(ii) Perform such duties as the Chief Executive Officer and the Chief Financial Officer may from time to time reasonably assign to him consistent with the duties, responsibilities, title and authority of Executive as described in Section 2.01(b); and
(iii) Serve in any such offices of Interpublic or its subsidiaries as he may be elected or appointed to consistent with the duties, responsibilities, title and authority of Executive as described in Section 2.01(b); provided, however, that at all times Executive shall retain his position, title and employment with Interpublic.
(b) During the term of employment, Executive shall have the position of Vice President and Treasurer of Interpublic and in such capacity Executive shall have primary responsibilities for all treasury functions customary for such position for similar companies in the same industry as Interpublic. Executive shall report directly to the Chief Financial Officer and Executive Vice President ("CFO") of Interpublic, and the Senior Vice President, Financial Operations ("SVPFO") of Interpublic as long as the person currently holding such title of SVPFO is employed in such position. In accordance with Interpublic's general policies, guidelines and procedures, Executive shall have authority over hiring, firing and promotion of personnel in the treasury area of Interpublic, with appropriate degree of consultation with the CFO and SVPFO of Interpublic.
(c) Executive's services shall be performed at Interpublic's offices in Manhattan, New York City, New York, subject to necessary travel requirements of his position and duties hereunder.
3.01 Interpublic will compensate Executive for the duties performed by him hereunder, including all services rendered as an officer or director of Interpublic, by payment of a salary at the rate of Three Hundred Thousand Dollars ($300,000) per annum, payable in equal installments, which Interpublic 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 Interpublic.
3.03 Interpublic shall pay a special bonus of $50,000 to Executive upon execution and delivery of this agreement to compensate Executive for certain costs and expenses associates with Executive's change in employment.
4.01 Executive will be eligible during the term of employment to participate in the Management Incentive Compensation Plan ("MICP"), in accordance with the terms and conditions of the Plan established from time to time. Executive shall be eligible to receive MICP awards up to one hundred (100%) of his base salary, but the actual award, if any, shall be determined by Interpublic and shall be based on profits of Interpublic, Executive's individual performance and management discretion. In 1999, your minimum guaranteed MICP award will be $100,000.
Long-Term Performance Incentive Plan; Stock Options
5.01 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 1999-2002 performance period under Interpublic's Long-Term Performance Incentive Plan ("LTPIP") equal to Two Thousand (2,000) performance units tied to the cumulative compound profit growth of Interpublic, and options under Interpublic's Stock Incentive Plan to purchase Sixteen Thousand (16,000) shares of Interpublic common stock which may not be exercised in any part prior to the end of the performance period, and thereafter shall be exercisable in whole or in part.
5.02 As soon as administratively feasible after full execution of this Agreement, Interpublic will use its best efforts to have the Management Human Resources Committee of Interpublic grant Executive an award for the 1999-2000 performance period under Interpublic's Performance Incentive Plan ("PIP") equal to Five Hundred (500) performance points tied to the cumulative compound profit growth of the Interpublic, and an option under Interpublic's Stock Incentive Plan to purchase Two Thousand (2,000) shares of Interpublic Common stock which may not be exercised in any part prior to the end of the performance period, and thereafter shall be exercisable in whole or in part.
5.03 As soon as administratively feasible after full execution of this Agreement, Interpublic will use its best efforts to have the Committee grant Executive options to purchase an aggregate of Ten Thousand (10,000) shares of Interpublic Common Stock, which may not be exercised in any part for a period of three (3) years from the date of the grant and thereafter shall be exercisable in three annual installments, the first of which may be exercised for forty percent (40%) of the number of shares covered by the option on or after the third anniversary of the date of the grant and the second and third of which may be exercised on or after each successive anniversary date of the grant for thirty percent (30%) of the number of shares covered by the option.
5.04 As soon as administratively feasible after full execution of this Agreement, Interpublic will use its best efforts to have the Committee grant to Executive, an award of Four Thousand (4,000) restricted shares of Interpublic common stock which shares shall have a restriction period ending five years from the date of grant.
Other Employment Benefits
6.01 Executive shall be elected a member of Interpublic's Development Council, which shall entitle him to an automobile allowance of Seven Thousand Dollars ($7,000) per annum and a financial planning allowance of Two Thousand Five Hundred Dollars ($2,500) per annum.
6.02 Executive shall be eligible to participate in such other employee benefits 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.
6.03 In addition to the compensation and benefits provided for in this Agreement, Interpublic agrees to pay or reimburse Executive for all reasonable, ordinary and necessary business expenses (including travel) and entertainment expenses incurred in the performance of his services hereunder in accordance with the policies of Interpublic as from time to time in effect.
6.04 Executive shall be entitled to vacation at the rate of four (4) weeks per calendar year.
6.05 Executive shall be entitled to receive fringe benefits and prerequisites in accordance with the plans, practices, programs or policies of Interpublic from time to time in effect and available generally to senior executive of Interpublic at Executive's management level.
7.01 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 nine (9) 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; or;
(ii) By giving him notice in writing at any time specifying a termination date less than nine (9) months after the date on which such notice is given. In this event his employment hereunder shall terminate on the date specified in such notice and Interpublic shall thereafter pay him a sum equal to the amount by which nine (9) 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 Subsection 7.01 (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 payment of salary or salary equivalents to Executive after notice of termination shall have been given pursuant to Subsection 7.01 (ii), should Executive commence other employment prior to the last payment due under that subsection, no further payments shall be made to Executive.
7.02 Executive may at any time give notice in writing to Interpublic specifying a termination date not less than nine (9) 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.
7.03 If the employment of Executive hereunder is terminated pursuant to this Article VII by either Interpublic 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.
7.04 Notwithstanding anything else in this Agreement, Interpublic may terminate the employment of Executive hereunder for Cause. Interpublic shall provide Executive with 30 days written notice of its intent to terminate Executive under the provisions of this Section 7.04, which notice shall (x) indicate the specific provisions of this Section 7.04 on which termination is predicated, (y) set forth in reasonable detail the facts and circumstances on which the termination is based and, (z) specify a termination date. Executive shall have a right to meet with the executive to whom he reports and other members of senior management senior to him to discuss the matters set forth in such notice and to cure the same within 30 days after receiving such notice.
For purposes of this Agreement, "Cause" means any of the following:
(a) any material breach by Executive of any material provision of this Agreement. Upon written notice of same by the Interpublic describing in reasonable detail the breach asserted and stating that it constitutes notice pursuant to this Section 7.04(a), which breach, if capable of being cured, has not been cured within 30 days after such notice.
(b) Executive's absence from duty for a period of time exceeding fifteen (15) consecutive business days or twenty (20) out of any (30) consecutive business days (other than account of permitted vacation or as permitted for illness, disability or authorized leave in accordance with Interpublic's policies and procedures) without the consent of the Board of Directors;
(c) Executive having commenced employment with another employer prior to the effective date of Executive's voluntary resignation from employment with Interpublic under Section 7.02 hereof without the consent of the Board of Directors of Interpublic;
(d) misappropriation by Executive of funds or property of Interpublic or any attempt by Executive to secure any personal profit by receipt of unauthorized third party compensation related to the business of Interpublic (other than as permitted by this Agreement) and not fairly disclosed to and approved by the Board of Directors;
(e) fraud, dishonesty or willful misconduct of a material nature on the part of Executive in the performance of his duties as an employee of Interpublic; or
(f) a felony conviction of Executive.
Upon a termination for Cause, Interpublic shall pay Executive his salary and benefits through the date of termination of employment; and Executive shall receive no severance hereunder.
7.05 If Executive dies before August 2, 2004 his employment hereunder shall terminate 30 days after the date of his death.
7.06 Notwithstanding anything else in this Agreement, Executive may terminate his employment hereunder for Good Reason. Executive shall provide Interpublic with 30 days written notice of its intent to terminate his employment under provisions of this Section 7.06, which notice shall (x) indicate the specific provisions of the Section 7.06 in which such a terminated is predicated and (y) set forth in reasonable detail the facts and circumstances on which termination is based and (z) specify a termination date. Interpublic shall have the right, if the basis for such termination is curable, to cure such breach within 30 days after receiving such notice. For purposes of this Agreement, "Good Reason" means any of the following:
(a) Interpublic's failure to pay or grant any amount or benefit due under this Agreement or Interpublic otherwise breaches a material term of this Agreement
(b) There occurs a material diminution in the titles, authority, status or responsibilities, or compensation or benefits, of Executive as at the date of such occurrence; or
(c) Interpublic together with its subsidiaries enters into a transaction to sell substantially all of its assets, Interpublic enters into a transaction to sell its capital stock or merge or consolidate such that in excess of fifty percent of the shares of capital stock are no longer held by stockholders holding such shares immediately prior to such transaction, or a majority of the Board of Directors of Interpublic is not the same as immediately preceding such change or there occurs a substantial change in the executive management of Interpublic.
Should executive's employment be terminated for "Good Reason" the Company will pay him nine months salary on his date of termination.
7.07 In the event Executive shall be unable to perform his duties hereunder by virtue of illness or physical or mental incapacity or disability and Executive shall fail to perform such duties for periods aggregating 120 consecutive days in any 360 day period, Interpublic shall have the right to terminate Executive's employment hereunder prior to Executive's recovery from such illness or disability, at the end of any calendar month after such 120 day period is satisfied upon at least 15 days prior written notice to him.
8.01 While Executive is employed hereunder by Interpublic he shall not without the prior written consent of Interpublic 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 and direct his personal investments and those for the benefit of his family.
8.02 Executive shall treat as confidential and keep secret the affairs of Interpublic and shall not at any time during the term of employment for a period of 3 years, without the prior written consent of Interpublic, knowingly divulge, furnish or make known or accessible to, or use for the benefit of, anyone other than Interpublic and its subsidiaries and affiliates any information of a confidential nature relating in any way to the business of Interpublic or its subsidiaries or affiliates or their clients and obtained by him in the course of his employment hereunder. For the purpose of this Agreement, the following shall not be treated as confidential information: (i) information previously known to Executive prior to the employment term, (ii) information which is part of the public domain, (iii) information required to be disclosed by applicable law or legal process, or (iv) information which is lawfully in possession of a third party.
8.03 If Executive violates any provision of Section 8.01 or Section 8.02, Interpublic may, notwithstanding the provisions of Section 7.01, 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.
8.04 All records, papers and documents kept or made by Executive relating to the business of Interpublic or its subsidiaries or affiliates or their clients shall be and remain the property of Interpublic, except Executive shall be permitted to retain his chronological file of correspondence and have access to documents for which he may be responsible in the extent of an inquiry or proceeding.
8.05 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 Interpublic 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 Interpublic, 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 Interpublic, without further compensation, upon notice to him from Interpublic.
8.06 Following the termination of Executive's employment hereunder for any reason, Executive shall not for a period of twelve (12) months from such termination either: (a) solicit any employee of Interpublic or to leave such employ to enter the employ of Executive or of any company 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 Interpublic, the advertising, public relations, sales promotion or market research business of any advertiser which is a client of Interpublic at the time of such termination.
9.01 This Agreement shall be binding upon and enure to the benefit of the successors and assigns of Interpublic. Neither this Agreement nor any rights hereunder shall be assignable by Executive and any such purported assignment by him shall be void.
10.01 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 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 12.01 hereof, and judgement 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 Interpublic.
11.01 This Agreement constitutes the entire understanding between Interpublic and Executive concerning his employment by Interpublic or any of its parents, affiliates or subsidiaries and supersedes, except any applicable benefit plan in effect from time to time, any and all previous agreements between Executive and Interpublic or any of its parents, affiliates or subsidiaries concerning such employment, and/or any compensation or bonuses. This Agreement may not be changed orally.
12.01 The Agreement shall be governed by and construed in accordance with the laws of the State of New York.
THE INTERPUBLIC GROUP
By: /s/ C. Kent Kroeber
C. Kent Kroeber
/s/ Gunnar P. Wilmont
Gunnar P. Wilmot