Separation Agreement and General Release - Interpublic Group of Companies Inc. and Sean Orr
CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE
CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE between THE INTERPUBLIC GROUP OF COMPANIES, INC. ("Interpublic") and SEAN ORR ("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 August 31, 2003 ("Termination Date"). Until such time, Executive will continue to make himself available (and report to Interpublic's office in New York City as reasonably requested by Interpublic) to provide services to Interpublic consistent with his position, including, but not limited to, supervising the closing of and certifying Interpublic's second quarter and assisting in the smooth transition of his responsibilities.
2. Severance Payment and Benefits. Subject to Executive's execution and non-revocation of, and compliance with this Agreement, Interpublic shall: (a) on or about the Termination Date, pay to Executive the lump sum amount of One Million Three Hundred Sixty Thousand Dollars ($1,360,000), less required federal, state and local withholdings, (b) for a period of two (2) years from the Termination Date ("Severance Period"), pay Executive the annual amount of Twenty Thousand Dollars ($20,000) per year payable in accordance with Interpublic's regular payroll practices and subject to regular withholdings, (c) during the Severance Period, provide Executive with his current benefits including club, automobile and financial planning allowances, and (d) during the Severance Period, continue to defer One Hundred Fifty Thousand Dollars ($150,000) per annum pursuant to certain Executive Special Benefit Agreements, ("ESBA's") between Interpublic and the Executive. The above-referenced payments exceed in value any payments to which Executive may otherwise be entitled.
3. Outplacement; Legal Fees. In addition to the payments set forth in Section 2, Executive shall be entitled to reasonable outplacement services during the course of the Severance Period. Such services may be selected by Executive, subject to the reasonable prior approval of Interpublic. Executive shall also be entitled to reimbursement of legal fees incurred in connection with the negotiation and review of this Release Agreement. Outplacement fees and legal services shall not exceed One Hundred Fifty Thousand Dollars ($150,000) in the aggregate.
4. Insurance. During the Severance Period Executive will be maintained, at Interpublic's expense and at his current level of coverage, in Interpublic's basic life insurance program. Interpublic will also maintain Executive at his current level of coverage, in Interpublic's optional life insurance program. The two-year premium for such coverage is Nine Thousand Three Hundred Eleven And 90/100 Dollars ($9,311.90) which amount will be deducted from the lump-sum payment to be made to Executive pursuant to Section 2(a) of this Agreement.
5. Interpublic Stock; LTPIP; ESBA.
(a) Executive shall be entitled to pro-rated vesting as of the end of the severance period (i.e., August 30, 2005) of all shares of Interpublic restricted stock currently held by him. The pro-rated amount is ninety-six thousand eight hundred sixty-six (96,866) shares. In addition, in the event that Executive has not obtained other employment of substantially comparable status and with a substantially comparable pay level (based on base salary and targeted annual bonus) at the end of the Severance Period, Interpublic agrees to vest, at that time, all of the remaining shares of restricted stock currently held by Executive. In the event of Executive's death, his beneficiary shall be entitled to pro-rated vesting, to the date of death, of all shares of restricted stock currently held by him.
(b) All options to acquire shares of Interpublic stock currently held by Executive will continue to vest through the end of the Severance Period. 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. The pro-rated amount, as of the end of the Severance Period, is four hundred eighty-three thousand five hundred sixty-five (483,565) options. In the event of Executive's death, his beneficiary shall be entitled to exercise options currently held by Executive, pro-rated to the date of death, and will have one (1) year from the date of death to exercise such options.
(c) Executive will be entitled to retain ten thousand six hundred sixty-seven (10,667) units of his 2003-2005 LTPIP units which shall be paid out to Executive on a basis consistent with the payment of comparable 2003-2005 LTPIP units held by other senior corporate executives of Interpublic.
(d) Executive will be entitled to an annuity of Three Hundred Thousand Dollars ($300,000) per year for a period of fifteen (15) years, commencing at age sixty (60). Payments of such amounts shall be made in accordance with all provisions of the Executive Special Benefit Agreements between Executive and Interpublic dated as of May 1, 1999 and as of May 1, 2002, as each was amended as of November, 2002 (including the provisions relating to death benefits and disability benefits) and shall be in full satisfaction of all amounts due to Executive pursuant to those Agreements. For avoidance of doubt, in the event Executive dies after annuity payments have commenced, Executive's beneficiary shall receive the remaining annuity payments, and in the event Executive dies prior to the start of annuity payments, Executive's beneficiary shall receive the Three Hundred Thousand Dollars ($300,000) per year annuity payments in monthly installments over fifteen (15) years beginning on the 15th of the calendar month following Executive's death.
6. 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.
7. Indemnity. The Company shall indemnify Executive with respect to any claim arising out of, or related to, his service as an officer, director or employee of the Company or any of its subsidiaries in accordance with the By-laws of Interpublic and to the maximum extent allowed by applicable law regardless of when the claim is made. In addition, during and following the Severance Period the Company shall maintain directors' and officers' liability insurance coverage for Executive applicable to his service as an officer, director or employee of the Company or any of its subsidiaries in an amount not less than the coverage for senior corporate executives and directors of the Company.
8. Attorney Review. Executive is hereby advised that he should consult with an attorney prior to executing this Agreement.
9. 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.
10. 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: Brian J. Brooks, Executive Vice President, Human Resources, 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.
11. 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. Furthermore, if Executive has received a lump sum payment representing severance under this Agreement and commences employment with another company owned or controlled by Interpublic, Executive agrees to reimburse Interpublic for any portion of the severance payment that compensates Executive for the subsequent employment period. If, however, Executive's new salary is lower than the salary upon which the severance payments are based, Executive will continue to receive as severance, or will not be obligated to repay, the difference in salary for the period of overlap.
12. 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.
13. 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.
14. 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.
15. 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. Executive represents that he has returned all Interpublic property in his possession.
16. Non-Solicitation of Clients and Employees. For a period of one (1) year following the end of the Severance Period, Executive shall not (a) directly or indirectly, either on Executive's own behalf or on behalf of any other person, firm or corporation, solicit any account that is a client of Interpublic at the time of Executive's termination or that was a client of Interpublic at any time within one year prior to the date of Executive's termination of employment; or (b) solicit any Employee of the Corporation to leave such employ to enter the employ of Executive or of any corporation or enterprise with which Executive is then associated. For a period of one (1) year from the Termination Date Executive shall not perform any services relating to advertising, marketing, public relations or related services for any account referred to in clause (a) above. Executive acknowledges that the above restrictions are reasonable and necessary to protect Interpublic's legitimate business interest.
17. Co-operation. Executive agrees to co-operate with Interpublic in connection with any government investigation or legal action involving Interpublic. In connection with such cooperation, Executive shall be entitled to retain his own legal counsel, provided such counsel is reasonably satisfactory to Interpublic, and Interpublic shall pay (as billed) the legal fees and expenses incurred by Executive in connection with such cooperation.
18. Entire Agreement; No Other Promises. Executive hereby acknowledges and represents that this Agreement and Release contains the entire agreement between Executive and Interpublic, and 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.
19. Equitable Relief. Executive acknowledges that a remedy at law for any breach or attempted breach of this Agreement will be inadequate, and agrees that Interpublic 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.
20. 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.
21. 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.
22. 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 Commercial Arbitration 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.
23. 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.
24. 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, | |
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General Counsel and Secretary | |
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/s/ Sean Orr | |
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Sean Orr | |
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Dated: June 26, 2003 |