Employment Agreement - Interpublic Group of Companies Inc. and James R. Heekin
EMPLOYMENT AGREEMENT
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AGREEMENT made as of January 1, 1998 by and between THE INTERPUBLIC
GROUP OF COMPANIES, INC., a Delaware corporation ("Interpublic" or the
"Corporation"), and JAMES R. HEEKIN ("Executive").
In consideration of the mutual promises set forth herein the parties
hereto agree as follows:
ARTICLE I
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TERM OF EMPLOYMENT
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1.01 Subject to the provisions of Article VII and Article VIII, and
upon the terms and subject to the conditions set forth herein, the Corporation
will employ Executive for the period beginning January 1, 1998 ("Commencement
Date") and ending on December 31, 2003. (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
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DUTIES
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2.01 During the term of employment, Executive will:
(i) Serve as Regional Director Europe of McCann-Erickson Europe,
a wholly-owned subsidiary of Interpublic ("McCann").
(ii) Use his best efforts to promote the interests of the
Corporation and McCann and devote his full time and efforts to their
business and affairs;
(iii) Perform such duties as the Corporation and McCann may from
time to time assign to him; and (iv) Serve in such other offices of
the Corporation and/or McCann as he may be elected or appointed to.
ARTICLE III
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REGULAR COMPENSATION
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3.01 The Corporation will compensate Executive for the duties performed
by him hereunder, by payment of a total base salary at the rate of Five Hundred
Fifty Thousand Dollars ($550,000) per annum, Fifty Thousand Dollars ($50,000) of
which shall be accrued in accordance with an Executive Special Benefit Agreement
to be entered into between the Executive and Interpublic. The non-accrued
portion of Executive's total base salary shall be payable in equal installments,
which the Corporation shall pay at semi-monthly intervals, subject to customary
withholding for federal, state and local taxes.
3.02 The Corporation may at any time increase the compensation paid to
Executive under this Article III if the Corporation in its sole discretion shall
deem it advisable so to do in order to compensate him fairly for services
rendered to the Corporation.
<PAGE>
ARTICLE IV
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BONUSES
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4.01 As soon as administratively feasible after full execution of this
Agreement, Interpublic will use its best efforts to have the Committee grant
Executive an award for the 1997-2000 performance period under Interpublic's
Long-Term Performance Incentive Plan ("LTPIP") equal to (i) one thousand three
hundred fifty (1,350) performance units tied to the cumulative compound profit
growth of McCann North America, (ii) four hundred fifty (450) performance units
tied to the cumulative compound profit growth of McCann Worldwide, and (iii)
eighteen hundred (1,800) performance units tied to the cumulative compound
profit growth of McCann Europe.
ARTICLE V
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INTERPUBLIC STOCK
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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 to Executive ten
thousand (10,000) shares of Interpublic Common Stock which will be subject to a
five year vesting restriction.
5.02 As soon as administratively feasible after full execution of this
Agreement, Interpublic will use its best efforts to have the Committee grant to
Executive options to purchase twenty thousand (20,000) shares of Interpublic
Common Stock, which will be subject to all the terms and conditions of the
Interpublic Stock Incentive Plan. Forty percent (40%) of the options will be
exercisable after the third anniversary of the date of grant, thirty percent
(30%) will be exercisable after the fourth anniversary and thirty percent (30%)
will be exercisable after the fifth anniversary of the date of grant through the
tenth anniversary of the date of grant.
ARTICLE VI
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OTHER EMPLOYMENT BENEFITS
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6.01 Executive shall be eligible to participate in such other employee
benefits as are available from time to time to other key management executives
of Interpublic in accordance with the then-current terms and conditions
established by Interpublic for eligibility and employee contributions required
for participation in such benefits opportunities.
6.02 Executive will be entitled to four (4) weeks of vacation per year,
to be taken in such amounts and at such times as shall be mutually convenient
for Executive and the Corporation.
<PAGE>
ARTICLE VII
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TERMINATION
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7.01 The Corporation may terminate the employment of Executive
hereunder:
(i) By giving Executive notice in writing at any time specifying
a termination date not less than twelve (12) months after the date on
which such notice is given, in which event Executive's employment
hereunder shall terminate on the date specified in such notice, or
(ii) By giving Executive notice in writing at any time specifying
a termination date less than twelve (12) months after the date on
which such notice is given. In this event Executive's 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 twelve (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.
During the termination period provided in subsection (i), or in the
case of a termination under subsection (ii) providing for a termination period
of less than twelve (12) months, for a period of twelve (12) months after the
termination notice, Executive will be entitled to receive all employee benefits
accorded to him prior to termination which are made available to employees
generally; provided, that such benefits shall cease upon such date that
Executive accepts employment with another employer offering similar benefits.
7.02 Executive may at any time give notice in writing to the
Corporation specifying a termination date not less than twelve (12) 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, and Executive shall
receive his salary until the termination date.
ARTICLE VIII
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COVENANTS
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8.01 While Executive is employed hereunder by the Corporation he shall
not, without the prior written consent of the Corporation, which will not be
unreasonably withheld, 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.
8.02 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
for a period of three years 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.
8.03 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.
8.04 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 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.
8.05 Following the termination of Executive's employment hereunder for
any reason, Executive shall not for a period of twenty-four (24) months from
such termination, (a) solicit any employee of the Corporation, Interpublic or
any affiliated company of Interpublic to leave such employ to enter the employ
of Executive or of any person, firm or corporation 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 event marketing, public relations,
advertising, sales promotion or market research business of any person or entity
which is a client of the Corporation.
8.06 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.
8.07 Executive acknowledges that a remedy at law for any breach or
attempted breach of Article VIII of this Agreement will be inadequate, and
agrees that the Corporation shall be entitled to specific performance and
injunctive and other equitable relief in the case of any such breach or
attempted breach.
8.08 Executive represents and warrants that neither the execution and
delivery of this Employment Agreement nor the performance of Executive's
services hereunder will conflict with, or result in a breach of, any agreement
to which Executive is a party or by which he may be bound or affected, in
particular the terms of any employment agreement to which Executive may be a
party. Executive further represents and warrants that he has full right, power
and authority to enter into and carry out the provisions of this Employment
Agreement.
ARTICLE IX
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Assignment
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9.01 This Agreement shall be binding upon and enure to the benefit of
the successors and assigns of the Corporation. Neither this Agreement nor any
rights hereunder shall be assignable by Executive and any such purported
assignment by him shall be void.
<PAGE>
ARTICLE X
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AGREEMENT ENTIRE
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10.01 This Agreement constitutes the entire understanding between the
Corporation and Executive concerning his employment by the Corporation or any of
its parents, affiliates or subsidiaries and supersedes any and all previous
agreements between Executive and the Corporation or any of its parents,
affiliates or subsidiaries concerning such employment, and/or any compensation
or bonuses. Each party hereto shall pay its own costs and expenses (including
legal fees) incurred in connection with the preparation, negotiation and
execution of this Agreement. This Agreement may not be changed orally.
ARTICLE XI
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APPLICABLE LAW
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11.01 The Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
THE INTERPUBLIC GROUP OF
COMPANIES, INC.
By: /s/ C. KENT KROEBER
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Name: KENT KROEBER
By: /s/ JAMES R. HEEKIN
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Name: JAMES R. HEEKIN