Separation Agreement and General Release - Interpublic Group of Companies Inc. and Brian J. Brooks
CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE
CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE between THE INTERPUBLIC GROUP OF COMPANIES, INC. ( "Interpublic" ) and BRIAN J. BROOKS ( "Executive" ). In consideration of the mutual covenants herein contained, the parties agree as follows:
1. Termination of Employment. Executive will resign from any and all positions that he holds at Interpublic or any subsidiary thereof effective February 27, 2004 ( "Termination Date "). Until such time, Executive will continue to make himself available to provide services to Interpublic consistent with his position, provided however that Executive will not provide his services from the corporate office after February 13, 2004.
2. Severance Payment and Benefits. Subject to Executive 's execution and non-revocation of, and compliance with this Agreement, Interpublic shall: (a) pursuant to the Employment Agreement, dated as of November 18, 2002, as amended as of April 7, 2003, May 20, 2003 and November 10, 2003 ( "Employment Agreement "), pay Executive his current annual base salary of $495,000 for a period of one (1) year from the Termination Date, subject to ordinary payroll withholding, ( "Severance Period "), (b) during the Severance Period, provide Executive with his current benefits including medical, life insurance, profit sharing, club, automobile and financial planning allowances, (c) during the Severance Period, continue to defer amounts due to Executive under the Senior Executive Retirement Income Plan Agreement ( "SERIP ") between Interpublic and the Executive, and (d) continue Executive 's eligibility for an award (for calendar year 2003) under Interpublic 's annual incentive plan. At the end of the Severance Period, Executive will be entitled to COBRA health coverage for a period of eighteen (18) months.
3. Consulting Period. In addition to the payments set forth in Section 2, Executive shall be retained by Interpublic to provide certain executive recruiting and human resource consulting services during the course of the Severance Period and for a period of one (1) year thereafter (such additional one year period being hereafter referred to as the "Consulting Period "). Such services shall be provided as requested by Interpublic, will be consistent with the level of assignments Executive currently has and will in all cases be subject to the prior approval of the Chief Operating Officer and/or the Chief Human Resource Officer of Interpublic or their designees.
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(a) Subject to the provisions of Sections (b) (c) and (d) of this Agreement, the Executive shall be compensated for such services as follows: In connection with Executive 's services in areas other than executive recruitment, Executive 's time shall be billed at Four Hundred Dollars ($400.00) per hour. In connection with the recruitment of personnel, Executive shall be compensated in an amount equal to twenty -five percent (25%) of the first year 's total cash compensation of individuals placed as a result of Executive 's efforts. For purposes of calculating the fee, an individual 's compensation shall include base salary up to Five Hundred Thousand Dollars ($500,000) and bonuses. The fee shall be payable as follows: The first installment shall be paid upon assignment by Interpublic of a particular search. The second installment shall be payable forty -five (45) days from the start of the search and the third, due upon completion, will be adjusted to reflect the successful candidate 's actual base salary up to Five Hundred Thousand Dollars ($500,000). Each fee installment becomes non -refundable upon receipt. Interpublic may cancel a particular search at any time, however if any candidate introduced before cancellation of the search is hired within one (1) year after the cancellation date, the entire fee is due. If Interpublic should change or cancel the designated position within the first forty -five (45) days of the commencement of a particular search the first installment will be due (a significant change in the job description or title is considered a change in the search, and entails the need for a new assignment). If Interpublic changes or cancels the designated position within the second forty -five (45) days of the contract period, the second installment will also be due. Additional hires (as defined below) shall be billed at twenty -five percent (25%) of the first year 's total cash compensation of the individual hired up to a salary of Five Hundred Thousand Dollars ($500,000). An "additional hire " is defined as the employment by Interpublic (including freelance, consulting, full -time or part -time employee) of any individual whom Executive has identified, within one (1) year of making such introduction. (Notwithstanding the foregoing, Executive 's services provided in connection with the recruitment of individuals listed on Exhibit A attached hereto shall be paid at the aforementioned hourly rate and not as a percentage of compensation.) Executive shall submit monthly time sheets for hours worked or fees earned on Interpublic business to the Chief Operating Officer of Interpublic. Amounts owed to Executive, if any, will be paid within thirty (30) days of the reconciliation outlined in Sections (c) and (d) below. | |
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(b) Interpublic and Executive shall agree in advance as to the scope of each assignment and the appropriate method of compensation (i.e., hours or fees). In the event the assignment is a fee -based assignment, the salary level and job description shall be agreed upon at such time. | |
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(c) During the Severance Period, Executive will receive consulting fees earned to the extent they are in excess of his base salary, up to a total maximum annual aggregate compensation during that period (exclusive of bonus amounts, if any) of Seven Hundred Thousand Dollars ($700,000). Fees/commissions will be reconciled against base salary within thirty (30) days of the end of each quarter and a final reconciliation undertaken within thirty (30) days of the end of the Severance Period. Amounts paid in excess of base salary will not be subject to withholding and Executive will be provided with a 1099 for such amounts. | |
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(d) During the Consulting Period, Executive shall be compensated for all fees earned by him in connection with Interpublic business, with a guaranteed minimum annual compensation of Four Hundred Thousand Dollars ($400,000). Such minimum guaranteed amount will be paid in equal monthly installments and reconciled within thirty (30) days of the end of each quarter against hourly fees/commissions earned during each quarter. A final reconciliation will be conducted within thirty (30) days of the end of the Consulting Period. Such amounts will not be subject to withholding and Executive will be provided with a 1099 for such amounts. | |
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(e) Executive shall be entitled to reimbursement of pre -approved expenses incurred in connection with the provision of consulting services. Where Interpublic and Executive agree on an assignment, Interpublic and Executive will also agree on a sufficient expense budget for Executive to successfully complete the assignment. | |
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(f) Executive shall be entitled to retain the cellular phone and lap -top computer currently in his possession but the expense of maintaining those services shall be borne by Executive. | |
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(g) The above -referenced payments exceed in value any payments to which Executive may otherwise be entitled. |
4. Interpublic Stock.
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(a) Interpublic restricted stock currently held by Executive will continue to vest during the Severance Period, and will be released pro -rata at the end of that period in accordance with Exhibit B attached hereto. In addition, at the end of the additional restriction period contemplated by Section 14, and assuming full compliance by Executive with the provision of that Section, Executive shall be entitled to full vesting of the 102,233 shares of Interpublic restricted stock granted to Executive on November 10, 2003. | |
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(b) All options to acquire shares of Interpublic stock currently held by Executive will continue to vest through the end of the Severance Period in accordance with Exhibit B attached hereto. Options will be exercisable on a pro -rated basis in accordance with their terms by Executive for a period of ninety (90) days following the end of the Severance Period. | |
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(c) At the end of the Severance Period, Executive will be entitled to a pro -rata portion of units awarded to him under Interpublic 's LTPIP in accordance with Exhibit B attached hereto and shall be payable in accordance with the terms of that Plan. | |
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(d) All shares of Interpublic restricted stock currently held by Executive shall vest on a "Change of Control ", as defined in the Executive Severance Agreement previously entered into between Executive and Interpublic. |
5. Release of Claims. By signing this Agreement and Release, Executive, on behalf of himself and his current, former, and future heirs, executors, administrators, attorneys, agents and assigns, releases and waives all legal claims in law or in equity of any kind whatsoever that Executive has or may have against Interpublic, its parents, subsidiaries and affiliates, and their respective officers, directors, employees, shareholders, members, agents, attorneys, trustees, fiduciaries, representatives, benefit plans and plan administrators, successors and/or assigns, and all persons or entities acting by, through, under, or in concert with any or all of them (collectively, the "Releasees"). This release and waiver covers all rights, claims, actions and suits of all kinds and descriptions that Executive now has or has ever had, whether known or unknown or based on facts now known or unknown, fixed or contingent, against the Releasees, occurring from the beginning of time up to and including the date that Executive executes this Agreement and Release, including, without limitation:
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(a) any claims for wrongful termination, defamation, invasion of privacy, intentional infliction of emotional distress, or any other common law claims; | |
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(b) any claims for the breach of any written, implied or oral contract between Executive and Interpublic, including but not limited to any contract of employment; | |
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(c) any claims of discrimination, harassment or retaliation based on such things as age, national origin, ancestry, race, religion, sex, sexual orientation, or physical or mental disability or medical condition; | |
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(d) any claims for payments of any nature, including but not limited to wages, overtime pay, vacation pay, severance pay, commissions, bonuses and benefits or the monetary equivalent of benefits, but not including any claims for unemployment or workers ' compensation benefits, or for the consideration being provided to Executive pursuant to Paragraphs 2, 3, 4 or 5 of this Agreement, or for the payments and benefits to which Executive is entitled under the employee benefit plans of Interpublic; and | |
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(e) all claims that Executive has or that may arise under the common law and all federal, state and local statutes, ordinances, rules, regulations and orders, including but not limited to any claim or cause of action based on the Fair Labor Standards Act, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Family and Medical Leave Act, the Americans with Disabilities Act, the Civil Rights Acts of 1866, 1871 and 1991, the Rehabilitation Act of 1973, the National Labor Relations Act, the Employee Retirement Income Security Act of 1974, the Worker Adjustment and Retraining Notification Act, the Vietnam Era Veterans ' Readjustment Assistance Act of 1974, Executive Order 11246, and any state laws governing employee rights, as each of them has been or may be amended. |
This release and waiver does not release Interpublic from its obligations under this Agreement and Release. This Agreement and Release shall be binding upon and inure to the benefit of Executive and the Releasees and any other individual or entity who may claim any interest in the matter through Executive. Executive also acknowledges that he has not assigned any of his rights to make the aforementioned claims or demands. Executive also acknowledges and represents that he has not filed nor will he file any lawsuits based on claims or demands that he has released herein.
6. Attorney Review. Executive is hereby advised that he should consult with an attorney prior to executing this Agreement.
7. Review Period. Executive is also advised that he has twenty -one (21) days from the date this Agreement is delivered to him within which to consider whether he will sign it.
8. Revocation Period. If Executive signs this Agreement, he acknowledges that he understands that he may revoke this Agreement within seven (7) days after he has signed it by notifying Interpublic in writing that he has revoked this Agreement. Such notice shall be addressed to: Christopher J. Coughlin, Chief Operating Officer, The Interpublic Group of Companies, Inc., 1271 Avenue of the Americas, New York, New York 10020. This Agreement shall not be effective or enforceable in accordance with its terms until the 7 -day revocation period has expired.
9. Employment with Another IPG Agency. In the event Executive accepts employment with any company owned or controlled by Interpublic during the period in which payments are being made pursuant to this Agreement, all such payments shall cease upon commencement of such employment.
10. Intellectual Property Rights. Executive acknowledges and agrees that all concepts, writings and proposals submitted to and accepted by Interpublic ( "Intellectual Property ") which relate to the business of Interpublic and which have been conceived or made by him during the period of his employment, either alone or with others are the sole and exclusive property of Interpublic or its clients. As of the date hereof, Executive hereby assigns in favor of Interpublic all the Intellectual Property covered by this paragraph. On or subsequent to the date hereof, Executive shall execute any and all other papers and lawful documents required or necessary to vest sole rights, title and interest in Interpublic or its nominee of the Intellectual Property.
11. Non -Admission. This Agreement and Release shall not in any way be construed as an admission by the Company of any liability for any reason, including, without limitation, based on any claim that the Company has committed any wrongful or discriminatory act.
12. Non -Disparagement. Each party agrees not to, and Interpublic agrees to cause its officers, members of its board of directors, its consultants and its other agents not to, say, write or cause to be said or written, any statement that may be considered defamatory, derogatory or disparaging of the other. Interpublic and the Executive agree to develop a mutually acceptable communications plan for external and internal use regarding Executive 's departure from Interpublic as well as a form of reference. Executive and his advisors will be given a reasonable opportunity to review and comment on the internal and external communications plan with respect to all references to Executive and the form of reference, and Interpublic will accept all reasonable requests from Executive in that regard.
13. Confidentiality/Company Property. Executive acknowledges that he has had access to confidential, proprietary business information of Interpublic as a result of employment, and Executive hereby agrees not to use such information personally or for the benefit of others. Executive also agrees not to disclose to anyone any confidential information at any time in the future so long as it remains confidential. Executive further agrees to keep the terms and the existence of this Agreement and Release confidential and not to discuss it with anyone other than his attorney, tax advisor, spouse, or as may be required by law. Except as provided herein Executive represents that he has returned all Interpublic property in his possession.
14. Non -Solicitation of Clients and Employees. During the Severance Period and the Consulting Period the Executive shall not: (a) accept employment with or serve as a consultant, advisor or in any other capacity to Omnicom, WPP, Publicis, Grey Advertising or Havas or any of their respective subsidiaries, affiliates or operating entities; (b) directly or indirectly, either on the Executive 's own behalf or on behalf of any other person, firm or corporation, solicit or perform services for any account that is a client of Interpublic or any of its subsidiaries at the time of the Executive 's termination of employment with Interpublic or that was a client of Interpublic or any of its subsidiaries at any time within one year prior to the date of the Executive 's termination of employment; (c) directly or indirectly employ or attempt to employ or assist anyone else to employ any person who is at such time or who was within the six -month period immediately prior to such time in the employ of Interpublic or any of its subsidiaries. In addition, and in exchange for the consideration set forth in Section 4 hereof, for an additional two -year period (i.e. through January 31, 2008), Executive agrees to abide by the provisions of section (c) of this Section 14.
15. Termination. Executive shall be entitled to terminate this Agreement upon sixty (60) days written notice to Interpublic. In such event, Interpublic shall have no further obligation to Executive beyond the termination date set by Executive (other than any unpaid severance amounts to which Executive would otherwise have been entitled under the Employment Agreement) and all stock and other benefits shall vest, in accordance with Interpublic 's standard policies, as of that termination date.
16. Entire Agreement; No Other Promises. Executive hereby acknowledges and represents that this Agreement and Release contains the entire agreement between Executive and Interpublic, and, except as provided herein, it supersedes any and all previous agreements concerning the subject matter hereof. Executive further acknowledges and represents that neither Interpublic nor any of its agents, representatives or employees have made any promise, representation or warranty whatsoever, express, implied or statutory, not contained herein, concerning the subject matter hereof, to induce Executive to execute this Agreement and Release, and Executive acknowledges that he has not executed this Agreement and Release in reliance on any such promise, representation or warranty.
17. Equitable Relief. Each party acknowledges that a remedy at law for any breach or attempted breach of this Agreement will be inadequate, and agrees that the other shall be entitled to specific performance and injunctive and other equitable relief in the case of any such breach or attempted breach. It is also agreed that, in addition to any other remedies, in the event of a material breach of this Agreement by Executive, Interpublic may withhold and retain all or any portion of the severance payments.
18. Severability. If any term or condition of this Agreement and Release shall be held to be invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, this Agreement and Release shall be construed without such term or condition. If at the time of enforcement of any provision of this Agreement, a court shall hold that the duration, scope or area restriction of any provision hereof is unreasonable under circumstances now or then existing, the parties hereto agree that the maximum duration, scope or area reasonable under the circumstances shall be substituted by the court for the stated duration, scope or area.
19. Choice of Law and Forum. This Agreement and Release shall be construed and enforced in accordance with, and governed by, the laws of the State of New York, without regard to its choice of law provisions.
20. Arbitration. 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 Employment Dispute Rules of the American Arbitration Association 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 New York, New York.
21. Binding Effect. This Agreement shall be binding on, and shall inure to the benefit of, Interpublic and its successors. This Agreement shall also inure to the benefit of Executive 's heirs, executors, beneficiaries and legal representatives.
22. Amendment. This Agreement and Release may not be amended or modified in any way, except pursuant to a written instrument signed by both parties.
HAVING READ AND UNDERSTOOD THE RELEASE, CONSULTED COUNSEL OR VOLUNTARILY ELECTED NOT TO CONSULT COUNSEL, AND HAVING HAD SUFFICIENT TIME TO CONSIDER WHETHER TO ENTER INTO THIS AGREEMENT AND RELEASE, THE PARTIES HERETO HAVE EXECUTED THIS AGREEMENT AND RELEASE AS OF THE DAY AND YEAR FIRST WRITTEN BELOW
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THE INTERPUBLIC GROUP OF | |
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COMPANIES, INC. | |
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By: /s/ Nicholas J. Camera | |
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Name: Nicholas J. Camera | |
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Title: Senior Vice President, General | |
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Counsel and Secretary | |
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/s/ Brian J. Brooks | |
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Brian J. Brooks |
Exhibit A
Major Projects
McCann WorldGroup
CCO Campbell Mithun
Regional Director Asia Pac
President MRM Worldwide
Global head Planning and Budgeting
Ops director EMEA
Global Strategy leader : Microsoft
President/COO McCann Global Healthcare
Latin American Regional Succession
Gotham
Stone Roberts Successor
Campbell -Ewald
Exec Creative Officer : Chevrolet
FCB
Brendan Successor (I am unlikely to play a lead role, but they need my help with candidates)
CMG
CEO FutureBrand (probably complete)
President Golin Harris NY
Head of Brand consulting -Europe
Initiative
WW president
Lowe + Draft
CEO: HSBC Relationship (hopefully)
I think this is about it, other than the financial positions here and at the Partnership.
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Exhibit B | ||||||||||||
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* |
Stock Options | |||||||||||
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The following stock options will be available to Mr. Brooks on or before his termination on February 28, 2005 (includes one year severance). He will have 90 days from February 28, 2005 to exercise these options. | ||||||||||||
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Options |
Exercise |
Exercisable | ||||||||||
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Grant Date |
Granted |
Price |
2/28/2005 | |||||||||
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11/18/2002 |
40,000 |
$14.0150 |
12,000 | |||||||||
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11/18/2002 |
16,000 |
$14.0150 |
16,000 |
(LTPIP 02 -04) | ||||||||
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3/26/2003 |
20,000 |
$ 9.6400 |
6,388 | |||||||||
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11/18/2003 |
4,800 |
$14.8250 |
1,000 | |||||||||
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80,800 |
35,388 | |||||||||||
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* |
Restricted Stock | |||||||||||
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The following restricted shares will be released to Mr. Brooks on his date of termination on February 28, 2005 (includes one year severance). | ||||||||||||
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Lapse |
Shares |
Released Upon | ||||||||||
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Grant Date |
Date |
Granted |
Termination | |||||||||
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4/1/2003 |
4/1/2004 |
8,333 |
8,333 | |||||||||
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4/1/2003 |
4/1/2005 |
8,333 |
7,985 | |||||||||
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4/1/2003 |
4/1/2006 |
8,334 |
5,324 | |||||||||
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11/18/2003 |
11/18/2008 |
2,400 |
600 | |||||||||
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11/10/2003 |
11/10/2010 |
102,233 |
18,255 | |||||||||
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11/18/2002 |
11/18/2004 |
3,900 |
3,900 | |||||||||
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11/18/2002 |
11/18/2005 |
21,300 |
15,975 | |||||||||
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154,833 |
60,372 | |||||||||||
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* |
LTPIP | |||||||||||
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Mr. Brooks is a participant in the 2003 -2005 LTPIP periods tied to the performance of Interpublic. He was granted 5,000 units in that performance period. We are requesting 3,611 units from the Compensation and Professional Development Committee. Payment, if any, will be made in accordance with other executives payments. | ||||||||||||