EXHIBIT 10.15
SEPARATION AGREEMENT
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This SEPARATION AGREEMENT (the "Agreement") dated January 31, 1999 (the
"Separation Date"), is entered into by and between XXXXXXX X. XXXXXXXX (the
"Executive") and TRUE NORTH COMMUNICATIONS INC., a Delaware corporation (the
"Company").
WHEREAS, the Executive and the Company desire to provide for, among
other things, the termination of the Executive's employment with the Company,
the termination of the Executive's membership on the Company's Board of
Directors, and the financial and other terms relating to such termination; and
WHEREAS, the Executive and the Company desire to enter into this
Agreement to specify the terms and conditions relating to the Executive's
termination and to settle any issues relating to the Employment Agreement
between the Company and the Executive dated July 30, 1997 (the "Employment
Agreement").
NOW, THEREFORE, the parties hereto agree as follows:
1. Resignation as Non-Executive Chairman and Director. Effective as of
the Separation Date, (a) the Executive's employment with the Company is
terminated by mutual agreement, and (b) the Executive hereby resigns as
non-executive Chairman and a director of the Company and, to the extent
applicable, as an officer, director, trustee, agent, representative, fiduciary,
partner, designee or the like, of any and all affiliates of the Company.
2. Payments to and Benefits for the Executive. In exchange for the
Executive's agreement to enter into this Agreement, the Company will pay or
provide to the Executive the following benefits:
(a) For the 12-month period ending January 31, 2000, the
Executive will receive as severance the gross amount of $400,000 (less required
federal, state and local tax withholdings), which amount will be paid in
semi-monthly installments in accordance with the Company's normal payroll
procedures.
(b) The Executive will receive a bonus of $200,000 (less
required federal, state and local tax withholdings) for calendar year 1998, to
be paid in 1999 at the time other 1998 senior executive bonuses are paid.
(c) The Executive shall continue to receive medical, dental
and life insurance benefits through January 31, 2000, in accordance with the
senior executive arrangements that are currently applicable to him; provided,
however, that the Executive's coverage shall be subject to any underlying plan
changes that are generally applicable to senior executives of the Company.
(d) The Executive will retain the use of his current office at
Xxxxx, Cone & Xxxxxxx Worldwide in New York through April 30, 1999.
(e) The Executive will receive one-half of his current annual
car allotment for the six-month period beginning February 1, 1999 and ending
July 31, 1999 (subject to required federal, state and local tax withholdings).
(f) Pursuant to a separate agreement with the Executive's
administrative assistant, she will continue to receive salary and benefits
through July 31, 1999.
3. Existing Stock Options. All stock options heretofore granted by the
Company to the Executive shall be treated in accordance with the underlying
stock option agreements. Pursuant to the terms of Section 5(a) of the Stock
Option Agreement governing the stock option for 50,000 shares granted to the
Executive on July 30, 1997, such stock option shall remain exercisable for one
year following the Separation Date.
4. Phantom Stock.
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(a) If the per share closing price of the Company's common
stock is at or below $23.0625 on any business day that coincides with or
precedes the Separation Date (the "Conditional Grant Date"), then the phantom
stock benefit described in Section 3(c) of the Employment Agreement will be
canceled and in lieu thereof the Company will grant to the Executive an option
to purchase 150,000 shares of Company common stock. This stock option will be
granted and will be fully vested as of the Conditional Grant Date, the exercise
price will be the closing price of Company common stock on the Conditional Grant
Date, and this stock option will expire on March 31, 2001. All other terms of
this stock option will be consistent with the True North Communications Inc.
Stock Option Plan.
(b) If the per share closing price of the Company's common
stock is not at or below $23.0625 on any business day that coincides with or
precedes the Separation Date, then the phantom stock benefit described in
Section 3(c) of the Employment Agreement shall remain in effect, subject to the
following modifications and clarifications:
(i) 150 phantom stock units shall be vested as of
the Separation Date, and no further units shall become vested thereafter.
(ii) The Valuation Date on which the phantom stock
benefit will be measured shall be chosen by the Executive; provided that the
Valuation Date must be the last business day of a calendar quarter occurring on
or before March 31, 2001.
(iii) The phantom stock benefit shall expire on March
31, 2001.
(c) Notwithstanding the remainder of this Section 4, upon the
mutual agreement of the Executive and the Company, the phantom stock benefit may
be settled as of any mutually agreeable Valuation Date and the Company may grant
to the Executive the stock option described in subsection (a) above; provided
that the per share exercise price of such stock option shall be no less than the
per share market value of Company common stock on the date of grant.
5. Consulting Services. The Executive shall be available to be called
upon by Xxxxxx X. Xxxxxx and Xxxxxxxx X. Xxxxxxxxxx to consult regarding the
Modem Media.Xxxxx Xxxxx, Inc. IPO and related issues regarding that company.
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6. Noncompetition; Nonsolicitation; Confidentiality.
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(a) Covenant Not to Compete. Except with the prior written
consent of the Board of Directors of the Company:
(i) From the Separation Date through February 1,
2000 (the "Non-Compete Period"), the Executive shall not engage in any
activities, whether as employer, proprietor, partner, stockholder (other than
the holder of less than 5% of the stock of a corporation the securities of which
are traded on a national securities exchange or in the over-the-counter market),
director, officer, employee or otherwise, in competition with (A) the businesses
conducted at the date hereof by the Company or any of its affiliates or (B) any
business in which the Company or any of its affiliates is substantially engaged
at any time during the Non-Compete Period; provided that the Executive's
employment with Xxxxxxxxx.xxx shall not in and of itself violate the terms of
this Section 6(a)(i);
(ii) during the Non-Compete Period, the Executive
shall not solicit, directly or indirectly, any existing business relationship of
clients of the Company in which the Company is substantially engaged at any time
during his employment with the Company or during the Non-Compete Period; and
(iii) during the Non-Compete Period, the Executive
shall not induce or attempt to persuade any employee of the Company (other than
the Executive's current administrative assistant) to terminate the employee's
employment relationship with the Company.
(b) Confidential Information and Trade Secrets. The Executive
shall not, at any time make use of any bidding information (or computer programs
thereof) of the Company or its affiliates, nor divulge any trade secrets or
other confidential information of the Company or its affiliates, except to the
extent that such information becomes a matter of public record, is published in
a newspaper, magazine or other periodical available to the general public or as
the Company may so authorize in writing; and, on or as soon as practicable after
the Separation Date, the Executive shall surrender to the Company all records
and other documents obtained by him or entrusted to him during the course of his
employment and Board membership with the Company (together with all copies
thereof) which pertain specifically to any of the businesses covered by the
covenants in Section 6(a)(i) or which were paid for by the Company; provided,
however, that the Executive may retain copies of such documents as necessary for
the Executive's personal records for federal income tax purposes.
(c) Scope of Covenants; Remedies. The following provisions
shall apply to the covenants of the Executive contained in this Section:
(i) the covenants set forth in Section 6(a)(i)
and (ii) shall apply within all territories in which the Company is actively
engaged in the conduct of business during the Non-Compete Period, including,
without limitation, the territories in which customers are then being solicited;
and
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(ii) each party intends and agrees that if in
any action before any court or agency legally empowered to enforce the covenants
contained in Section 6(a) and (b) any term, restriction, covenant or promise
contained therein is found to be unreasonable and accordingly unenforceable,
then such term, restriction, covenant or promise shall be deemed modified to the
extent necessary to make it enforceable by such court or agency.
7. Nondisparagement; Cooperation.
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(a) The Executive shall not, at any time make any statement,
publicly or privately, that would disparage the Company, any of its businesses
or any director or officer of the Company or such businesses or would have a
deleterious effect upon the interests of the Company or such businesses or the
stockholders or other owners of any of them; provided, however, that the
Executive shall not be in breach of this restriction if such statements consist
solely of private statements made to persons other than clients or competitors
of the Company (or their representatives) or members of the press or the
financial community that do not have an adverse effect upon the Company; and
provided further that nothing contained in this Section 7(a) or in any other
provision of this Agreement shall preclude the Executive from making any
statement in good faith that is required by law, regulation or order of any
court or regulatory commission, department or agency.
(b) The Company shall not authorize any person to make any
statement, publicly or privately, that would disparage the Executive; provided,
however, that the Company shall not be in breach of this restriction if such
statements consist solely of (i) private statements made to any officers,
directors or employees of the Company or (ii) private statements made to persons
other than clients or competitors of the Company (or their representatives) or
members of the press or the financial community that do not have a material
adverse effect upon the Executive; and provided further that nothing contained
in this Section 7(b) or in any other provision of this Agreement shall preclude
any officer, director, employee, agent or other representative of the Company
from making any statement in good faith that is required by any law, regulation
or order of any court or regulatory commission, department or agency.
8. Enforcement.
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(a) The parties hereto agree that the Company would be damaged
irreparably in the event that any provision of Section 6 or 7 of this Agreement
were not performed in accordance with its terms or were otherwise breached and
that money damages would be an inadequate remedy for any such nonperformance or
breach. Accordingly, the Company and its successors or permitted assigns shall
be entitled, in addition to other rights and remedies existing in their favor,
to an injunction or injunctions to prevent any breach or threatened breach of
any of such provisions and to enforce such provisions specifically (without
posting a bond or other security). Each of the parties agrees that he or it will
submit himself or itself to the personal jurisdiction of the courts of the State
of Illinois in any action by the other party to enforce an arbitration award
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against him or it or to obtain interim injunctive or other relief pending an
arbitration decision.
(b) The Executive acknowledges and agrees that in the event
that he breaches any of the provisions of Section 6 or 7 of this Agreement, (i)
the Company shall not be obligated to commence or continue any payments or
benefits provided for hereunder, and (ii) the Executive shall be obligated to
pay to the Company its costs and expenses in enforcing this Agreement and
defending against any lawsuit (including court costs, expenses and reasonable
legal fees).
9. Release and Waiver.
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(a) As a material inducement to the Company to enter into this
Agreement, the Executive knowingly and voluntarily releases, acquits and forever
discharges the Company, its divisions and affiliates and each of their
predecessors, successors, assigns, agents, directors, officers, employees,
representatives, and all persons acting by, through, under or in concert with
any of them (hereinafter referred to collectively as the "Releasees"), from any
and all charges, complaints, claims, liabilities, obligations, promises,
agreements, controversies, damages, actions, causes of action, suits, rights,
demands, costs, losses, debts and expenses of any nature whatsoever (upon any
legal or equitable theory, whether contractual, common-law, statutory, federal,
state, local or otherwise), known or unknown, suspected or unsuspected, which,
from the beginning of the world up to and including the Separation Date, exists,
have existed, or may hereafter arise, which and which the Executive or his
heirs, executors, administrators, successors and assigns ever had, now has or at
any time hereafter may have, own or hold against each or any of the Releasees;
provided, however, that the foregoing release does not extend to any benefits to
be provided to the Executive pursuant to this Agreement or to the Executive's
benefits under the True North Communications Inc. Retirement Plan, the True
North Communications Inc. Stock Purchase Integration Plan and the True North
Communications Inc. Directors' Deferred Fee Plan.
(b) This release and waiver includes but is not limited to:
(i) any claims for wrongful termination,
defamation, invasion of privacy, intentional infliction of emotional distress,
or any other common law claims;
(ii) any claims for the breach of any written,
implied or oral contract between you and the Company, including but not limited
to any contract of employment;
(iii) 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; and
(iv) 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 the filing of an administrative charge, any claims for
unemployment or workers' compensation benefits, or for the consideration being
provided to you pursuant to Paragraph 1 of this Agreement.
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This release and waiver includes all claims that you have 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 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 Employee Retirement Income Security Act of
1974, the Vietnam Era Veterans' Readjustment Assistance Act of 1974, Executive
Order 11246, the Illinois Human Rights Act, the Illinois Wage Payment and
Collection Act, the Xxxx County Human Rights Ordinance, and the Chicago Human
Rights Ordinance, as each of them has been or may be amended. The Executive
further waives any right to any form of recovery or compensation from any legal
action brought by him or on his behalf in connection with his employment or
termination of employment with the Company.
The Executive acknowledges that he has not assigned any of his rights to make
the aforementioned claims or demands. By signing this Agreement and Release, the
Executive is forever giving up his rights to make the aforementioned claims or
demands.
(c) This Agreement shall not in any way be construed as an
admission by the Company or the Executive that the Releasees, on the one hand,
or the Executive, on the other hand, has acted wrongfully against the other or
that the Releases, on the one hand, or the Executive, on the other hand, has any
valid claims whatsoever against the other, and the Company, on the one hand, and
the Executive, on the other hand, specifically denies any liability to or
wrongful acts against the other.
(d) The Executive acknowledges that he has been given a period
of at least 21 days to review and consider the terms and conditions of this
Agreement. After executing this Agreement, the Executive shall have seven days
to revoke this Agreement; but he may only do so by delivering a writing
indicating this revocation and returning all sums paid pursuant to this
Agreement to the Company no later than the close of business on the seventh day
following the date the Executive executes this Agreement. If the Executive
revokes this Agreement it shall not be effective or enforceable.
10. Press Release. The Executive and Company management shall mutually
agree on any press release issued to announce the Executive's resignation.
11. Taxation. All payments and benefits under this Agreement shall
be subject to all applicable taxes and withholding.
12. Arbitration; Certain Costs. Any dispute or controversy between the
Company and the Executive, whether arising out of or relating to this Agreement,
the breach of this Agreement, or otherwise, shall be settled by arbitration
administered by the American Arbitration Association in accordance with its
Commercial Rules then in effect and judgment on the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof. The
arbitrator shall have the authority to award any remedy or relief that a court
of competent jurisdiction could order or grant, including, without limitation,
the issuance of an injunction. However, either party may, without inconsistency
with this arbitration provision, apply to any court having jurisdiction over
such dispute or
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controversy and seek interim provisional, injunctive or other equitable relief
until the arbitration award is rendered or the controversy is otherwise
resolved. Except as necessary in court proceedings to enforce this arbitration
provision or an award rendered hereunder, or to obtain interim relief, neither a
party nor an arbitrator may disclose the existence, content or results of any
arbitration hereunder without the prior written consent of the Company and the
Executive. The Company and the Executive acknowledge that this Agreement
evidences a transaction involving interstate commerce. Notwithstanding any
choice of law provision included in this Agreement, the United States Federal
Arbitration Act shall govern the interpretation and enforcement of this
arbitration provision.
13. Advice of Counsel. The Executive represents and warrants to the
Company that he has conferred extensively with his own attorneys regarding the
provisions of this Agreement prior to entering into it, that he has carefully
read and fully understands all of the provisions of this Agreement, and that he
is entering into this Agreement voluntarily.
14. Entire Agreement; Amendments. This Agreement (a) sets forth the
entire agreement between the parties hereto with respect to the subject matter
hereof, superseding any and all prior agreements, understandings or arrangements
between the parties and (b) may not be amended or modified in any respect other
than by a writing executed by the parties hereto. Specifically, except as
specifically provided in this Agreement, the Employment Agreement shall have no
further force or effect after the Separation Date. No benefits shall be provided
to the Executive (including Part-Time Directors Plan benefits), except those
benefits specifically provided for under this Agreement.
15. Governing Law. This Agreement will be governed by and construed and
enforced under the laws of the State of Illinois, without regard to its conflict
of laws rules.
16. Severability. In the event that any one or more of the provisions
of this Agreement is held to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions will not in any way be
affected or impaired thereby. If any one or more of the provisions contained in
this Agreement is held to be excessively broad as to duration, geographical
scope, activity or subject, such provisions will be construed by limiting and
reducing them so as to be enforceable to the maximum extent compatible with
applicable law.
17. Binding Effect. This Agreement shall inure to the benefit of, and
shall be binding upon, the parties hereto and their respective successors,
assigns, heirs, and legal representatives.
18. Notices. All notices and other communications which are required or
may be given under this Agreement shall be in writing and shall be deemed to
have been duly given if delivered or mailed, first class registered or certified
mail, return receipt requested, postage prepaid;
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If to the Executive, to:
Xxxxxxx X. Xxxxxxxx
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
000-000-0000
If to the Company, to:
True North Communications Inc.
FCB Center
000 Xxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxxx X. Xxxxxxxxxx
000-000-0000
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
TRUE NORTH COMMUNICATIONS INC.
By:
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Xxxxxxx Xxxxx, Xxxxxxx X. Xxxxxxxx
Chairman of the Compensation Committee
Dated: Dated:
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