EXHIBIT 10.4
EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT (this "Agreement") dated as of July 30, 1997
between True North Communications Inc., a Delaware corporation (the
"Company"), and Xxxxx Xxxxx (the "Executive").
WHEREAS, the Company is a global communications holding company which
owns companies engaged in the advertising agency business, the multimedia
production business, the business of planning and buying of media time and
space and related businesses.
WHEREAS, the Executive currently serves as Chairman and Chief
Executive Officer of the Company pursuant to an Employment Agreement dated as
of July 17, 1996 (the "Existing Employment Agreement").
WHEREAS, pursuant to the Existing Employment Agreement, the Executive
currently has the right to terminate the Full-Time Employment Period
thereunder and to receive compensation and benefits until December 31, 1999
and thereafter under the Company's Directors Part-Time Employment Agreement.
WHEREAS, the Company desires that the Executive continue to serve as
the Chief Executive Officer of the Company.
WHEREAS, the Company and the Executive desire to replace the Existing
Employment Agreement (insofar as it relates to periods from and after the
Effective Date as hereinafter defined) with this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein, the parties hereby agree as follows:
1. Employment. The Company hereby employs the Executive and the
Executive hereby agrees to be employed by the Company upon the terms and
subject to the conditions contained in this Agreement. The term of full-time
employment of the Executive by the Company pursuant to this Agreement (the
"Full-Time Employment Period") shall commence on the Effective Date and,
unless extended by mutual agreement of the Company and the Executive or
earlier terminated pursuant to Section 4, shall end
fifteen months thereafter.
2. Position and Duties; Responsibilities.
(a) Position and Duties. The Company shall employ the Executive
during the Full-Time Employment Period as its principal executive officer,
with the title of Chief Executive Officer. During the Full-Time Employment
Period, the Executive shall perform faithfully and loyally and to the best of
his abilities the duties assigned to him hereunder, shall devote his full
business time, attention and effort to the affairs of the Company and shall
use his reasonable best efforts to promote the interests of the Company.
Notwithstanding the foregoing, the Executive may engage in charitable, civic
or community activities and, with the prior approval of the Board of Directors
of the Company (the "Board"), may serve as a director of any business
corporation, provided that such activities or service do not violate the terms
of any of the covenants contained in Section 10 or Section 11.
(b) Responsibilities. The Executive shall report directly to the
Board. Subject to the powers, authority and responsibilities vested in the
Board and in duly constituted committees of the Board, the Executive shall
have all the authority and responsibility of the principal executive officer
of a corporation, including without limitation authority and responsibility
for the formulation and execution of the corporate policy of the Company.
Accordingly, the chief executive of each company owned by the Company that is
engaged in the global advertising agency business shall report directly to the
Executive. The Executive shall also perform such other duties (not
inconsistent with the position of principal executive officer) on behalf of
the Company and its subsidiaries as may from time to time be authorized or
directed by the Board and as are customarily exercisable by a chief executive
officer. Notwithstanding any other provision of this Agreement, the Executive
shall be permitted to express to the Board and to the stockholders of the
Company his views on any matter presented to, considered by or raised by the
Board or such stockholders.
3. Compensation.
(a) Salary, VIC and DVIC. With respect to the Full-Time
Employment Period, the Company shall pay to the Executive a salary at the
annual rate of $600,000 and variable incentive compensation ("VIC") and
deferred variable incentive compensation ("DVIC") in accordance with the
Company's Performance Program, provided that the aggregate amount of such
salary, VIC and DVIC for the remainder of calendar year 1997 and for each
subsequent calendar year or portion thereof during the Full-Time Employment
Period shall be not less than the greater of (i) the amount for such period
based on an annual rate of not less than $1,350,000 and (ii) the aggregate
amount of salary and bonus for such period paid to the President of the
Company (such greater amount, annualized if for a period of less than a full
calendar year, being referred to as the "Calendar Year Minimum Compensation")
and that any payment required to be made by this proviso shall be deemed to be
VIC.
(b) Stock Options. During the Full-Time Employment Period, the
Executive shall be entitled to receive variable incentive stock options in
accordance with the Company's variable incentive stock option program, and in
any event shall be entitled to receive variable incentive stock options at
least equivalent to options received by the Company's President. In addition,
the Company covenants that the Compensation Committee shall take such actions
as may be necessary, including approval of stock option agreements with
respect to the future grant of stock options to the Executive, so that upon
the termination of the Full-Time Employment Period all of the stock options
theretofore granted to the Executive by the Company then held by the Executive
shall be fully exercisable until the end of the term thereof. The Company
assumes no responsibility for any liability of the Executive under Section 16
of the Securities Exchange Act of 1934 relating in any manner, directly or
indirectly, to the amendment of such stock options.
(c) Other Benefits. During the Full-Time Employment Period, the
Executive shall be entitled to participate in the Company's employee benefit
plans generally available to senior executives of the Company, including group
health, life, short-term disability, long-term disability, pension, profit
sharing, profit-sharing integration, stock purchase, stock purchase
integration and nonqualified deferred compensation and retirement plans and
the plans or programs for the allowance for or the reimbursement of automobile
expenses, financial planning expenses and club dues and any other plans of
general application to employees on the date hereof and such plans and
programs adopted hereafter for the benefit of senior executives of the Company
(all such benefits being hereinafter referred to as the "Employee Benefits"),
in the case of plans or programs in effect on the date hereof on terms no less
favorable than their terms on the date hereof; provided that all retirement
benefits shall be based upon plans in effect on the date hereof, subject to
modifications of general application to all employees. The Executive shall be
entitled to take time off for vacation or illness in accordance with the
Company's policy for senior executives and to receive all other fringe
benefits as are from time to time made generally available to senior
executives of the Company.
(d) Expense Reimbursement. During the Full-Time Employment
Period, the Company shall reimburse the Executive for all
proper expenses incurred by him in the performance of his duties hereunder in
accordance with the Company's policies and procedures.
4. Termination of Full-Time Employment Period;
Suspension.
(a) Termination. The Full-Time Employment Period shall be
terminated upon the first to occur of (i) the expiration thereof pursuant to
Section 1,(ii) termination by the Company at any time without Cause (as such
term is defined in Section 4(b)) upon written notice given to the Executive at
least 30 days prior to such termination, (iii) termination by the Company at
any time for Cause upon written notice given to the Executive at least 10 days
prior to such termination, (iv) termination by the Company on account of the
Executive's having become unable (as determined by the Board in good faith and
certified by a physician chosen by the Company and acceptable to the
Executive) to regularly perform his duties hereunder by reason of illness or
incapacity for a period of more than six consecutive months ("Termination for
Disability"), or (v) the Executive's death. Upon termination of the Full-Time
Employment Period, the Executive shall automatically and without further
action on his part be deemed to have resigned from all offices and
directorships with the Company and its subsidiaries and affiliates.
(b) Definition of Cause. For purposes of this Agreement, "Cause"
shall mean (i) the commission of a felony, (ii) the commission of any act
which involves both dishonesty with respect to the Company or any of its
subsidiaries and moral turpitude and causes the Company to be viewed in a
materially unfavorable light by its customers, employees or investors, (iii)
material willful misconduct with respect to the Company or any of its
subsidiaries, provided that if it reasonably could be concluded that such
alleged material willful misconduct did not occur or was not material or
willful or misconduct and if such alleged material willful misconduct is
curable, the Executive shall have 30 days following written notice thereof to
the Executive to cure such alleged material willful misconduct unless the
Company, in its good faith judgment, determines that such cure period must be
shorter to avoid harm to the Company, in which case such cure period shall be
such lesser number of days as shall be determined in good faith by the Company
and set forth in such written notice to the Executive, commencing upon such
written notice to the Executive, or (iv) breach of any provision of Section
10, 11 or 12.
(c) Suspension. If the Company shall determine that the Executive
has committed any act or acts which constitute Cause and shall notify the
Executive thereof in writing and if the Executive shall deny that he committed
such act or acts or that such act or
acts constitute Cause and shall notify the Company of such denial in writing
within seven days following the Company's written notice to the Executive, the
Board may, in its sole and absolute discretion, suspend the Executive with
full compensation and benefits during the pendency of any investigation or
arbitration with respect thereto.
5. Consequences of Termination of Full-Time Employment
Period.
(a) Expiration or Termination Without Cause. If the Full-Time
Employment Period terminates for a reason set forth in clause (i) or (ii) of
Section 4(a), the commencement of the Company's Directors Part-Time Employment
Agreement shall be deferred until the end of the Initial Part-Time Employment
Period (as such term is defined in Section 6(a)) or until the end of the
Vested Period (as such term is defined in Section 5(a)(iv)), respectively, and
in lieu of any severance amounts which otherwise would be payable to the
Executive:
(i) the Executive shall be entitled to receive (A) all
salary payable with respect to the period through the date of such
termination, (B) unpaid VIC and DVIC for the prior calendar year, (C)
VIC and DVIC for the then current calendar year, prorated through the
date of such termination based on actual results of operations for
such full calendar year and (D) reimbursement of expenses incurred
through the date of such termination; provided, that in determining
the aggregate amount of the salary payable pursuant to clause (A) of
this Section 5(a)(i) and the VIC and DVIC payable pursuant to clause
(C) of this Section 5(a)(i), the Calendar Year Minimum Compensation
shall be prorated through the date of such termination;
(ii) each stock option theretofore granted to the Executive
by the Company then held by the Executive shall, on the date of such
termination, be exercisable for the full term of such option in
accordance with the applicable stock option agreement in effect at the
time of such termination (giving effect to this provision);
(iii) if the Full-Time Employment Period terminates for a
reason set forth in clause (i) of Section 4(a), the Executive shall
become a part-time employee of the Company entitled to the
compensation and benefits payable during the Initial Part-Time
Employment Period in accordance with Section 6(c); and
(iv) if the Full-Time Employment Period terminates for a
reason set forth in clause (ii) of Section 4(a), (A) during the period
of two and one-half years following the termination of the Full-Time
Employment Period (the "Vested Period"), the Executive (or, in the
event of his disability, his legal representative, as applicable)
shall receive the compensation and benefits described in Section
6(c)(i) and Section 6(c)(ii) as if the Vested Period were the Initial
Part-Time Employment Period and such Initial Part-Time Employment
Period could neither be terminated early nor suspended and (B)
following the Vested Period, the Executive shall be entitled to the
compensation and benefits set forth in the Company's Directors
Part-Time Employment Agreement upon the terms set forth therein on the
date hereof, but with all age and service requirements deemed to have
been satisfied and with the benefit calculated at 45% of final average
annual compensation (as defined in such Agreement) regardless of
actual service, and payments thereunder shall be made for the period
commencing on the day following the expiration of the Vested Period.
In the event of the Executive's death during the Vested Period, his
executor shall be entitled to the compensation set forth in clause (A)
of the previous sentence until the expiration of the Vested Period and
the Executive's spouse shall be entitled to the continuation of
medical insurance coverage on the same basis as theretofore provided
to the Executive until the expiration of the Vested Period and
following the Vested Period the compensation and benefits set forth in
the Company's Directors Part-Time Employment Agreement shall become
payable upon the terms set forth therein on the date hereof, but with
all age and service requirements deemed to have been satisfied and
with the benefit calculated at 45% of final average annual
compensation (as defined in such Agreement) regardless of actual
service, and payments thereunder shall be made for the period
commencing on the day following the expiration of the Vested Period.
(b) Termination for Cause. If the Full-Time Employment Period
terminates for any reason set forth in clause (iii) of Section 4(a), the
Executive shall be entitled to receive (i) all salary payable with respect to
the period through the date of such termination, (ii) unpaid VIC and DVIC for
the prior calendar year, (iii) VIC and DVIC for the then current calendar
year, prorated through the date of such termination based on actual results of
operations for such full calendar year, (iv) reimbursement of expenses
incurred through the date of such termination and (v) any
other benefits accrued through the date of such termination; provided that in
determining the aggregate amount of the salary payable pursuant to clause (i)
of this Section 5(b) and the VIC and DVIC payable pursuant to clause (iii) of
this Section 5(b), the Calendar Year Minimum Compensation shall be prorated
through the date of such termination. In addition, (A) during the Vested
Period, the Executive (or, in the event of his disability, his legal
representative, as applicable) shall receive the compensation and benefits
described in Section 6(c)(i) and Section 6(c)(ii) as if the Vested Period were
the Initial Part-Time Employment Period and such Initial Part-Time Employment
Period could neither be terminated early nor suspended and (B) following the
Vested Period, unless the Cause that gave rise to such termination would have
permitted the Company to terminate the Initial Part-Time Employment Period had
it occurred during the Initial Part-Time Employment Period, the Executive
shall be entitled to the compensation and benefits set forth in the Company's
Directors Part-Time Employment Agreement upon the terms set forth therein on
the date hereof, but as if such termination had been without cause and with
all age and service requirements deemed to have been satisfied and with the
benefit calculated at 45% of final average annual compensation (as defined in
such Agreement) regardless of actual service, and payments thereunder shall be
made for the period commencing on the day following the expiration of the
Vested Period. In the event of the Executive's death during the Vested
Period, his executor shall be entitled to the compensation set forth in clause
(A) of the previous sentence until the expiration of the Vested Period and the
Executive's spouse shall be entitled to the continuation of medical insurance
coverage on the same basis as theretofore provided to the Executive until the
expiration of the Vested Period and following the Vested Period, unless the
Cause that gave rise to the termination of the Full-Time Employment Period
would have permitted the Company to terminate the Initial Part-Time Employment
Period had it occurred during the Initial Part-Time Employment Period, the
compensation and benefits set forth in the Company's Directors Part-Time
Employment Agreement shall become payable upon the terms set forth therein on
the date hereof, but as if the termination of the Full-Time Employment Period
had been without cause and with all age and service requirements deemed to
have been satisfied and with the benefit calculated at 45% of final average
annual compensation (as defined in such Agreement) regardless of actual
service, and payments thereunder shall be made for the period commencing on
the day following the expiration of the Vested Period. Except as provided
above in this Section 6(b), the Executive shall not be entitled to any
compensation or benefits under the Company's Directors Part-Time Employment
Agreement or any other severance payments.
(c) Disability or Death. If the Full-Time Employment Period
terminates for a reason set forth in clause (iv) or (v) of Section 4(a),
commencement of the Company's Directors Part-Time Employment Agreement shall
be deferred until the end of the Vested Period and in lieu of any severance
amounts which otherwise would be payable to the Executive the Executive or his
executor, administrator or other legal representative, as the case may be,
shall be entitled to the payments and benefits set forth in Section 5(a)(i)
and Section 5(a)(ii) and during the Vested Period the Executive or his
executor, administrator or other legal representative, as the case may be,
shall be entitled to the compensation set forth in Section 6(c)(i), and (A) in
the case of Termination for Disability, the Executive shall be entitled to the
benefits set forth in Section 6(c)(ii) (and in the event the Executive dies
prior to the end of the Vested Period, the Executive's spouse shall be
entitled to the continuation of medical insurance coverage on the same basis
as theretofore provided to the Executive until the end of the Vested Period)
or (B) in the case of termination on account of the Executive's death, the
Executive's spouse shall be entitled to the continuation of medical insurance
coverage on the same basis as theretofore provided to the Executive until the
end of the Vested Period and, in either case, the compensation and benefits
set forth in the Company's Directors Part-Time Employment Agreement shall
become payable upon the terms set forth therein on the date hereof, but with
all age and service requirements deemed to have been satisfied and with the
benefit calculated at 45% of final average annual compensation (as defined in
such Agreement) regardless of actual service, for the period commencing on the
day following the expiration of the Vested Period.
6. Initial Part-Time Employment Period.
(a) Commencement. If the Full-Time Employment Period terminates
for a reason set forth in clause (i) of Section 4(a), the Executive shall
become a part-time employee of the Company for the period commencing upon
termination of the Full-Time Employment Period and ending on August 31, 2001
(the "Initial Part-Time Employment Period").
(b) Position and Duties. During the Initial Part-Time Employment
Period the Executive shall be a part-time employee of the Company and shall
make himself available, upon reasonable notice (reasonableness to include, but
not be limited to, a good faith effort to accommodate the schedules and time
needs of the parties), to perform services for the Company which (i) shall be
related to such projects and matters as the Board or the Chief Executive
Officer of the Company may designate from time to time, (ii) are commensurate
with the Executive's years of experience and
level of skill and (iii) are similar to the services rendered by the Executive
prior to the termination of the Full-Time Employment Period, including, but
not limited to, the duties set forth in Section 12. The Executive shall not
be required to devote more than 10 days during any calendar quarter to the
performance of such services.
(c) Compensation. As compensation for the services to be
performed by the Executive during the Initial Part-Time Employment Period,
the Executive shall receive the following compensation and benefits in
accordance with the Company's normal payroll policies:
(i) cash compensation shall be paid to the Executive
during the Initial Part-Time Employment Period at the rate of
$1,350,000 per year;
(ii) the Employee Benefits shall continue to be paid to the
Executive during the Initial Part-Time Employment Period, in the case
of Employee Benefits in effect on the date hereof on terms no less
favorable than their terms on the date hereof; provided that coverage
for the Executive under the Company's long-term disability insurance
plan shall cease upon termination of the Full-Time Employment Period;
provided further that all retirement benefits shall be based upon
plans in effect on the date hereof, subject to modifications of
general application to all employees; and provided further that for
the year in which the Full-Time Employment Period terminates
contributions shall be made to a supplemental retirement plan for the
benefit of the Executive in an amount which, together with any
contributions made for such year for the benefit of the Executive
under the Company's Profit Sharing Retirement Plan, Profit Sharing
Integration Plan, Stock Purchase Plan and Stock Purchase Integration
Plan, is equal to the contributions which would have been made for
such year for the benefit of the Executive under such plans based upon
compensation received by the Executive during such year
notwithstanding the hours of service conditions of such plans; and
(iii) the Company shall reimburse the Executive in
accordance with the Company's policies and procedures for all proper
expenses incurred by him in the performance of his duties during the
Initial Part-Time Employment Period.
7. Termination of Initial Part-Time Employment Period;
Suspension.
(a) Termination. The Initial Part-Time Employment Period shall be
terminated on the first to occur, after the termination of the Full-Time
Employment Period, of (i) August 31, 2001, (ii) termination thereof by the
Company at any time for Cause upon written notice given to the Executive at
least 10 days prior to such termination, (iii) Termination for Disability or
(iv) the Executive's death.
(b) Suspension. If the Company shall determine that the Executive
has committed any act or acts which constitute Cause and shall notify the
Executive thereof in writing and if the Executive shall deny that he committed
such act or acts or that such act or acts constitute Cause and shall notify
the Company of such denial in writing within seven days following the
Company's written notice to the Executive, the Board may, in its sole and
absolute discretion, suspend the Executive with full compensation and benefits
during the pendency of any investigation or arbitration with respect thereto.
8. Consequences of Termination of Initial Part-Time Employment
Period.
(a) Expiration. If the Initial Part-Time Employment Period
terminates on August 31, 2001, in lieu of any severance amounts which
otherwise would be payable to the Executive, the Executive shall thereafter be
entitled to the compensation and benefits set forth in the Company's Directors
Part-Time Employment Agreement upon the terms set forth therein on the date
hereof, but with all age and service requirements deemed to have been
satisfied and with the benefit calculated at 45% of final average annual
compensation (as defined in such Agreement) regardless of actual service, and
payments thereunder shall be made for the period commencing on September 1,
2001.
(b) Termination for Cause. If the Initial Part-Time Employment
Period is terminated by the Company for Cause, during the remainder of the
Vested Period the Executive (or, in the event of his disability, his legal
representative, as applicable) shall receive the compensation and benefits
described in Section 6(c)(i) and Section 6(c)(ii) as if the Initial Part-Time
Employment Period had not been terminated, but the Executive shall not be
entitled to any compensation or benefits under the Company's Directors Part-
Time Employment Agreement or any other severance payments. In the event of
the Executive's death during the Vested Period, his executor shall be entitled
to such compensation until the expiration of the Vested Period and the
Executive's spouse shall be
entitled to the continuation of medical insurance coverage on the same basis
as theretofore provided to the Executive until the end of the Vested Period.
(c) Disability or Death. If the Initial Part-Time Employment
Period terminates as a result of a Termination for Disability or the
Executive's death, in lieu of any severance amounts which otherwise would be
payable to the Executive, the Executive or his executor, administrator or
other legal representative, as the case may be, shall be entitled to the
compensation set forth in Section 6(c)(i) until August 31, 2001 and (i) in
the case of Termination for Disability, the Executive shall be entitled to the
benefits set forth in Section 6(c)(ii) until August 31, 2001 (and, in the
event the Executive dies prior to August 31, 2001, the Executive's spouse
shall be entitled to the continuation of medical insurance coverage on the
same basis as theretofore provided to the Executive until August 31, 2001) or
(ii) in the case of termination on account of the Executive's death, the
Executive's spouse shall be entitled to the continuation of medical insurance
coverage on the same basis as theretofore provided to the Executive until
August 31, 2001 and, in either case, the compensation and benefits set forth
in the Company's Directors Part-Time Employment Agreement shall become payable
upon the terms set forth therein on the date hereof, but with all age and
service requirements deemed to have been satisfied and with the benefit
calculated at 45% of final average annual compensation (as defined in such
Agreement) regardless of actual service, for the period commencing on
September 1, 2001.
9. Federal and State Withholding. The Company shall deduct from
the amounts payable to the Executive pursuant to this Agreement the amount of
all required federal and state withholding taxes in accordance with the
Executive's Form W-4 on file with the Company and all applicable social
security taxes.
10. Noncompetition; Nonsolicitation. (a) The Executive
acknowledges that in the course of his employment with the Company pursuant to
this Agreement he will become familiar, and during the course of his
employment with the Company or any of its subsidiaries prior to the date of
this Agreement he has become familiar, with trade secrets and customer lists
of, and other confidential information concerning, the Company and its
subsidiaries, affiliates and clients and that his services have been and will
be of special, unique and extraordinary value to the Company.
(b) The Executive agrees that during the Full-Time Employment
Period and for a period of five years thereafter (the "Noncompetition Period")
he shall not in any manner, directly or
indirectly, through any person, firm or corporation, alone or as a member of a
partnership or as an officer, director, stockholder, investor or employee of
or consultant to any other corporation or enterprise or otherwise, engage or
be engaged, or assist any other person, firm, corporation or enterprise in
engaging or being engaged, in any business being conducted by the Company or
any of its subsidiaries as of the termination of the Full-Time Employment
Period in any geographic area in which the Company or any of its subsidiaries
is then conducting such business. Within seven days following the termination
of the Full-Time Employment Period, the Company shall deliver to the Executive
a written description of the businesses being conducted by the Company and its
subsidiaries as of the date of such termination and the respective geographic
areas in which such businesses are then being conducted; provided, however,
that if the Company shall fail to deliver such written description within such
seven-day period, the Executive may deliver to the Company a written demand
therefor and the Company shall have seven days following the delivery of such
written demand to deliver such written description to the Executive. The
Executive shall have no liability for any breach of the covenant contained in
this Section 10(b) which may occur during the period commencing on the
termination of the Full-Time Employment Period and ending on the date of the
delivery of such written description to the Executive, provided that the
Executive shall have attempted in good faith to comply with such covenant
during such period. Notwithstanding the foregoing, subsequent to the
termination of the Full-Time Employment Period the Executive may engage or be
engaged, or assist any other person, firm, corporation or enterprise in
engaging or being engaged, in any business activity which is competitive with
a business activity being conducted by the Company or any of its subsidiaries
at the time of termination of the Full-Time Employment Period only if, at
least 60 days prior to the commencement of such competitive activity, the
Executive delivers to the Company a written release, in form and substance
satisfactory to the Company, releasing the Company from all further
obligations to the Executive pursuant to this Agreement, pursuant to the
Company's Directors Part-Time Employment Agreement, pursuant to any other
agreement or arrangement with the Company or any subsidiary of the Company or
otherwise, other than the right of the Executive to receive benefits under any
retirement plan of the Company; and provided further, that nothing contained
in this Section 10(b) shall release or otherwise affect the obligations of the
Executive contained in Section 11 of this Agreement.
(c) The Executive further agrees that during the Non-competition
Period he shall not (i) in any manner, directly or indirectly, induce or
attempt to induce any employee of the Company or any of its subsidiaries or
affiliates to terminate or abandon his or her employment for any purpose
whatsoever, or (ii) in
connection with any business to which Section 10(b) applies, call on, service,
solicit or otherwise do business with any client of the Company or any of its
subsidiaries; provided, however, that the restriction contained in clause (i)
of this Section 10(c) shall not apply to, or interfere with, the proper
performance by the Executive of his duties pursuant to Section 2 of this
Agreement.
(d) Nothing in this Section 10 shall prohibit the Executive from
being (i) a stockholder in a mutual fund or a diversified investment company
or (ii) a passive owner of not more than two percent of the outstanding stock
of any class of a corporation so long as the Executive has no active
participation in the business of such corporation.
(e) If, at any time of enforcement of this Section 10, a court or
an arbitrator holds that the restrictions stated herein are unreasonable under
circumstances then existing, the parties hereto agree that the maximum period,
scope or geographical area reasonable under such circumstances shall be
substituted for the stated period, scope or area and that the court shall be
allowed to revise the restrictions contained herein to cover the maximum
period, scope and area permitted by law.
11. Confidentiality. The Executive shall not, at any time during
the Full-Time Employment Period, the Initial Part-Time Employment Period, the
duration of the Company's Directors Part-Time Employment Agreement or
thereafter, make use of or disclose, directly or indirectly, any (i) trade
secret or other confidential or secret information of the Company or of any of
its subsidiaries, affiliates or clients or (ii) other technical, business,
proprietary or financial information of the Company or of any of its
subsidiaries, affiliates or clients not available to the public generally or
to the competitors of the Company or to the competitors of any of its
subsidiaries or affiliates, in each case that the Executive obtained as a
result of his employment by the Company or any of its subsidiaries
("Confidential Information"), except to the extent that such Confidential
Information (a) is used by the Executive during the Full-Time Employment
Period in the proper performance of his duties pursuant to this Agreement, (b)
is disclosed by the Executive to his legal counsel in connection with legal
services performed by such counsel for the Executive, provided that such
disclosure is made on a confidential basis, (c) becomes a matter of public
record or is published in a newspaper, magazine or other periodical available
to the general public, other than as a result of any act or omission of the
Executive outside the proper performance of his duties pursuant to this
Agreement, or (d) is required to be disclosed by any law, regulation or order
of any court or regulatory commission, department or agency. Promptly
following the termination of the
Full-Time Employment Period, the Executive shall surrender to the Company all
records, memoranda, notes, plans, reports, computer tapes and software and
other documents and data which constitute Confidential Information which he
may then possess or have under his control (together with all copies thereof);
provided, however, that the Executive may retain copies of such documents as
are necessary for the preparation of his federal or state income tax returns;
and provided further that if the Company believes that not all Confidential
Information which the Executive may then possess or have under his control has
been surrendered to the Company, the Company shall request with specificity
the Confidential Information to be surrendered by the Executive. The
Executive shall have a reasonable period of time following such request to
surrender such Confidential Information which in no event shall be less than
15 or more than 30 days following such request and, if the Executive makes a
good faith effort to comply with such request, his failure to surrender any
Confidential Information shall not constitute Cause for purposes of Section
4(b)(iv) hereof.
12. Nondisparagement; Cooperation. (a) The Executive shall not, at
any time during the Full-Time Employment Period, the Initial Part-Time
Employment Period or the duration of the Company's Directors Part-Time
Employment Agreement or thereafter, make any statement, publicly or privately,
which would disparage the Company, its business or any director or officer of
the Company or would have a deleterious effect upon the interests of the
Company's business or its stockholders; provided, however, that the Executive
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 by the Executive in the course of carrying out his duties pursuant to
this Agreement or (ii) private statements made to persons other than clients
or competitors of the Company or any of its subsidiaries or its affiliates (or
their representatives) or members of the press or the financial community that
do not have a material adverse effect upon the Company; and provided further
that nothing contained in this Section 12(a) or in any other provision of this
Agreement shall preclude the Executive from making any statement in good faith
which is required by law, regulation or order of any court or regulatory
commission, department or agency. During the Full-Time Employment Period, the
Initial Part-Time Employment Period and the duration of the Company's
Directors Part-Time Employment Agreement and upon reasonable notice and at the
expense of the Company, the Executive shall take such actions as the Company
shall reasonably request (reasonableness to include, but not be limited to, a
good faith effort to accommodate the schedules and time needs of the parties)
in furtherance of the client relationships of the Company and its
subsidiaries. Upon the termination of the Full-Time Employment Period, the
Executive shall urge the clients of the
Company and its subsidiaries to maintain their relationships with the Company
and its subsidiaries, which action, together with any other actions required
under this Agreement, shall not require the Executive to perform services (i)
during the Initial Part-Time Employment Period in excess of the limit of 10
days of service during any calendar quarter set forth in Section 6(b) or (ii)
during the duration of the Company's Directors Part-Time Employment Agreement
in excess of 10 days during any calendar quarter.
(b) The Company shall not, at any time during the Full-Time
Employment Period, the Initial Part-Time Employment Period or the duration of
the Company's Directors Part-Time Employment Agreement or thereafter,
authorize any person to make or allow, nor shall the Company condone the
making of, any statement, publicly or privately, which 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
any of its subsidiaries or affiliates (or their representatives) or members of
the press or the financial community that do not have a materially adverse
effect upon the Executive; and provided further that nothing contained in this
Section 12(b) shall preclude any officer, director, employee, agent or other
representative of the Company from making any statement in good faith which is
required by any law, regulation or order of any court or regulatory
commission, department or agency.
13. Enforcement. The parties hereto agree that the Company would
be damaged irreparably in the event that any provision of section 10, 11, or
12 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 suc-
cessors 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 against him or
it or to obtain interim injunctive or other relief pending an arbitration
decision.
14. Survival. Sections 10, 11, 12 and 13 of this Agreement shall
survive and continue in full force and effect in accordance with their
respective terms, notwithstanding any termination
of the Full-Time Employment Period, the Initial Part-Time Employment Period or
the duration of the Company's Directors Part-Time Employment Agreement.
15. 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 controversy and seek interim
provisional, injunctive or other equitable relief until the arbitration award
is rendered or the controversy is otherwise resolved. The Company shall
reimburse the Executive, upon demand, for all costs and expenses (including
without limitation attorneys' fees) reasonably incurred by the Executive in
good faith in connection with this arbitration provision, including without
limitation in connection with any such application undertaken by the Executive
in good faith, as well as for all such costs and expenses reasonably incurred
by the Executive in connection with entering and/or enforcing the award
rendered by the arbitrator. 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.
16. Expenses of this Agreement. The Company shall pay the
Executive's legal fees and expenses incurred in connection with this
Agreement, in an amount not to exceed $30,000, promptly upon submission to the
Company of a detailed statement therefor, subject to approval of the Company's
General Counsel.
17. Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed given when (a)
delivered personally or by overnight courier to the following addresses of the
other party hereto and his or its counsel (or such other address for such
party or his or its counsel
as shall be specified by notice given pursuant to this Section 17) or (b) sent
by facsimile to the following facsimile numbers of the other party hereto and
his or its counsel (or such other facsimile number for such party or his or
its counsel as shall be specified by notice given pursuant to this Section
17), with the confirmatory copy delivered by overnight courier to the
addresses of such party and his or its counsel pursuant to this Section 17:
(a) if to the Company, to:
Chief Human Resources Officer
True North Communications Inc.
000 Xxxx Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Facsimile No.: 000-000-0000
with a copy to:
Xxxxxx X. Xxxx
Sidley & Austin
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile No.: 312-853-7036
(b) if to the Executive, to:
Xxxxx Xxxxx
000 Xxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile No.: 000-000-0000
with a copy to:
Xxxxxx X. Xxxxx
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile No.: 000-000-0000
18. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under applicable law or rule
in any jurisdiction, such invalidity, illegality or unenforceability shall not
affect the validity, legality or enforceability of any other provision of this
Agreement or the validity, legality or enforceability of such provision in any
other jurisdiction, but this Agreement shall be reformed, construed and
enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.
19. Entire Agreement. This Agreement constitutes the entire
agreement and understanding between the parties with respect to the subject
matter hereof and supersedes and preempts any prior understanding, agreements
or representations by or between the parties, written or oral, which may have
related in any manner to the subject matter hereof; it being understood that
this Agreement relates to the terms of the Executive's employment from and
after the Effective Date and nothing herein supersedes or preempts the
Existing Employment Agreement insofar as it applies to periods prior to the
Effective Date.
20. Merger. The Company, a subsidiary of the Company and Bozell,
Jacobs, Xxxxxx & Xxxxxxxx, Inc. ("Bozell") are parties to an Agreement and
Plan of Merger dated as of July 30, 1997 pursuant to which Bozell will become
a wholly-owned subsidiary of the Company (such transaction being hereinafter
referred to as the "Merger"). Provided the Merger is consummated prior to the
close of business on December 31, 1997, the "Effective Date" shall be December
1, 1997. In the event the Merger is not so consummated, this Agreement shall
be of no force or effect.
21. Successors and Assigns. This Agreement shall be enforceable
by the Executive and his heirs, executors, administrators and legal
representatives, and by the Company and its successors and permitted assigns.
Any successor of the Company shall assume the liabilities of the Company
hereunder. This Agreement shall not be assigned by the Company other than to
a successor pursuant to a merger, consolidation or transfer of all or
substantially all of the capital stock or assets of the Company. The
Executive's rights pursuant to this Agreement shall continue notwithstanding
any change in control (as defined in the Directors Part-Time Employment
Agreement).
22. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Illinois without regard to principles of conflict of laws.
23. Amendment and Waiver. The provisions of this Agreement may be
amended or waived only by the written agreement of the Company and the
Executive, and no course of conduct or failure or delay in enforcing the
provisions of this Agreement shall affect the validity, binding effect or
enforceability of this Agreement.
24. Counterparts. This Agreement may be executed in two
counterparts, each of which shall be deemed to be an original and
both of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
TRUE NORTH COMMUNICATIONS INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------
Xxxxxxx X. Xxxxxxxx
Chairman of the Compensation
Committee of the Board of
Directors
/s/ Xxxxxxx X. Xxxxx
-------------------------------
Xxxxxxx X. Xxxxx
a Member of the Compensation
Committee of the Board of
Directors
/s/ Xxxxx Xxxxx
-------------------------------
Xxxxx Xxxxx
