Employment Agreement - Interpublic Group of Companies Inc. and Sean F. Orr
EMPLOYMENT AGREEMENT
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AGREEMENT made as of April 27, 1999 by and between THE INTERPUBLIC GROUP OF
COMPANIES, INC., a corporation of the State of Delaware (hereinafter referred to
as "Interpublic"), and SEAN F. ORR (hereinafter referred to as "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 Upon the terms and subject to the conditions set forth herein,
Interpublic will employ Executive for the period beginning June 1, 1999 or an
agreed-upon earlier date and ending on May 31, 2004, or a date representing the
last day of the five year period commencing on the agreed upon earlier date, 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.
ARTICLE II
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Duties
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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 Interpublic may from time to time assign
to him; and
(iii) Serve as Executive Vice President, Chief Financial Officer and
in any such offices of Interpublic or its subsidiaries as he may be elected
or appointed to.
ARTICLE III
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Compensation
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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 Five Hundred Thousand Dollars
($500,000) per annum, payable in equal installments, which Interpublic may pay
at either monthly or semi-monthly intervals and Fifty Thousand Dollars ($50,000)
in the form of an Executive Special Benefits Agreement ("ESBA").
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.
ARTICLE IV
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Bonuses
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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. For calendar year 1999, Executive will be
considered as employed for the full year for MICP determining purposes.
ARTICLE V
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Long-Term Performance Incentive Plan; Stock Options
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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 Executive an award for
the 1997-2002 performance period under Interpublic's Performance Incentive Plan
("LTPIP") (pro-rated to the date of this Agreement) equal to Two Thousand One
Hundred (2,100) performance units tied to the cumulative compound profit growth
of Interpublic, and options under Interpublic's Stock Incentive Plan to purchase
Eight Thousand Four Hundred (8,400) 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 Committee grant
Executive an award for the 1999-2002 performance period under LTPIP equal to
Five Thousand (5,000) performance units tied to the cumulative compound profit
growth of the Interpublic, and options under Interpublic's Stock Incentive Plan
to purchase Twenty Thousand (20,000) 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 Sixty Thousand (60,000) 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 Twenty Thousand (20,000) restricted shares of Interpublic
common stock which shares shall have a restriction period ending five years from
the date of grant.
ARTICLE VI
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Other Employment Benefits
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6.01 Executive shall be elected a member of Interpublic's Development
Council, which shall entitle him to an automobile allowance of Ten Thousand
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Dollars ($10,000) per annum and a financial planning allowance of Five Thousand
Dollars ($5,000) 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.
ARTICLE VII
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Termination
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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 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; or;
(ii) By giving him 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 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 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.
(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 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.
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. For purposes of this
Agreement, "Cause" means any of the following:
(a) any material breach by Executive of any material provision of this
Agreement (including without limitation Sections 8.01 and 8.02 hereof) 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 (it being understood and agreed that a breach
of Section 8.01 or 8.02 hereof and a breach of Executive's duty to devote his
full business time to the affairs of Interpublic, among others, shall be deemed
not capable of being cured);
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(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 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, disloyalty, gross negligence or willful
misconduct 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 May 31, 2004 or the end of the five year term
of this Agreement, his employment hereunder shall terminate on the date of his
death.
ARTICLE VIII
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Covenants
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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.
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 or
thereafter, without the prior written consent of Interpublic, 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.
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.
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 twenty-four (24) months from such
termination either: (a) solicit any employee of Interpublic to leave such employ
to enter the employ of Executive or of any Interpublic 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.
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 Interpublic. Neither this Agreement nor any rights
hereunder shall be assignable by Executive and any such purported assignment by
him shall be void.
ARTICLE X
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Arbitration
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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.
ARTICLE XI
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Agreement Entire
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11.01 This Agreement, along with a separate ESBA and Executive Severance
Agreement, constitutes the entire understanding between Interpublic and
Executive concerning his employment by Interpublic or any of its parents,
affiliates or subsidiaries and supersedes 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.
ARTICLE XII
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Applicable Law
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12.01 The Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
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THE INTERPUBLIC GROUP OF
COMPANIES, INC.
By: /s/ C. Kent Kroeber
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C. Kent Kroeber
/s/ Sean F. Orr
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Sean F. Orr