EXHIBIT 10.25
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of August 1, 2000 (the
"Effective Date") between FCB Worldwide L.L.C., a Delaware limited liability
company (the "Company"), and Xxxxxxx X. Xxxxxx (the "Executive").
WHEREAS, the Company is a wholly-owned subsidiary of True
North Communications Inc. ("True North"), which is a global communications
holding company with ownership interests in subsidiaries, affiliates and joint
ventures that are engaged in the advertising agency business, the multimedia
production business, the business of planning and buying of media time and space
and related businesses (True North, the Company, and their various subsidiaries,
affiliates and joint ventures in which they from time to time have equity
interests are hereinafter referred to collectively as the "True North Group");
WHEREAS, concurrent with the execution of this Agreement, the
Executive and the Company (or an affiliate thereof) will enter into the Stock
Purchase Agreement dated on or about the Effective Date (the "Purchase
Agreement"), pursuant to which the Company (or an affiliate thereof) is
purchasing shares of Xxxxx International (a company registered in the British
Virgin Islands) from a trust under which the Executive has a beneficial interest
and pursuant to which the Executive has certain continuing employment
obligations under this Agreement and with respect to FCB South Africa; and
WHEREAS, the Company and the Executive desire to enter into
this Agreement to provide for the employment of the Executive by the Company,
upon the terms and subject to the conditions set forth herein.
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 initial term of
employment of the Executive by the Company pursuant to this Agreement (the
"Initial Term") shall commence on the Effective Date and, unless earlier
terminated, shall end on July 31, 2003; provided that the term of this Agreement
shall automatically be extended on an ongoing basis following the end of the
Initial Term; provided that the Company may terminate this Agreement as of the
end of the Initial Term or at any time thereafter by giving written notice to
the Executive at least 60 days prior to the applicable termination date. (The
Initial Term and any extension of the term of this Agreement pursuant to this
Section 1 are collectively referred to herein as the "Employment Period.")
2. POSITION AND DUTIES. The Executive's title shall be
President and Chief Operating Officer of FCB North America (or such other
title as may be mutually agreed-upon by
the parties hereto), and he shall report directly to the Company's Chief
Executive Officer (the "CEO"). The Executive shall have the authority, duties
and responsibilities commensurate with his position and title and such other
duties and responsibilities (not inconsistent with his position) as are
assigned to him from time to time by the CEO or the Board of Directors of the
Company (the "Board"). The Executive shall serve as a member of the Company's
operating Board and its Executive Committee, so long as such Board and
Committee continue to exist. During the Employment Period, the Executive
shall perform faithfully and loyally and to the best of the Executive's
abilities his duties hereunder, shall devote his full business time,
attention and efforts to the affairs of the Company and shall use his
reasonable best efforts to promote the interests of the Company and the True
North Group. Notwithstanding the foregoing, the Executive may engage in
charitable, civic or community activities, provided that they do not
interfere with the performance of the Executive's duties and obligations
hereunder. Pursuant to and as set forth in the Purchase Agreement, the
Executive shall also serve as the Non-Executive Chairman of FCB Africa,
performing such supervisory functions as are consistent with that position.
3. COMPENSATION.
(a) ANNUAL BASE SALARY. The Company shall pay to the
Executive an annual base salary at the rate of not less than $550,000 per
annum in accordance with the Company's regular payroll practices. The annual
base salary shall be reviewed periodically in accordance with guidelines
applicable to the Company's and the True North Group's senior executives
generally.
(b) INCENTIVE COMPENSATION. During the Employment Period, the
Executive shall be entitled to participate in the True North Executive
Compensation Program, as such Program applies to similarly situated Company and
True North Group executives and as such Program may be amended from time to
time.
(c) OTHER BENEFITS. During the Employment Period, the
Executive shall be entitled to participate in the employee benefit plans and
programs and fringe benefits that are generally available to senior executives
of the Company and the True North Group from time to time. As of the Effective
Date, these plans, programs and benefits include executive medical and dental
coverage, executive life insurance coverage, 401(k)/profit sharing, executive
deferred compensation, an annual auto allowance of $8,250 (plus reimbursement
for the cost of insurance, routine maintenance and fuel), reimbursement for
financial and tax planning costs (up to $8,000 for the first year and up to
$2,000 per year thereafter), reimbursement for health club dues (up to $1,500
per year), payment of professional dues, and vacation earned at the rate of four
weeks per year.
The Company also undertakes to pay all reasonable costs and fees relating to the
immigration and relocation of the Executive and his immediate family to the
United States, including reasonable costs of travel, moving household goods,
Green Card application, and annual home leave for the Executive and his
immediate family once each year (four round trip business class air tickets per
year).
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In addition, each year the Company will permit the Executive to attend one
five-day annual renewal/refresher program at FlightSafety International to
maintain the Executive's flying license, and the Company will reimburse the
Executive for this expense (up to $11,000 per year).
(d) EXPENSE REIMBURSEMENT. During the 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 for senior executives. The Executive shall
submit appropriate invoices for all such expenses.
4. TERMINATION OF EMPLOYMENT PERIOD.
(a) QUALIFYING TERMINATION. For purposes of this Agreement,
"Qualifying Termination" means the occurrence of any of the following events:
(i) termination of the Executive's employment by the Company without Cause (as
defined in subsection (b) below) during the Employment Period, (ii) expiration
of this Agreement at the end of the Initial Term or thereafter pursuant to a
written notice given by the Company to the Executive in accordance with Section
1 hereof, (iii) termination of the Executive's employment by the Company on
account of the Executive having become unable (as determined by the Company in
good faith) to perform regularly his duties hereunder by reason of illness or
incapacity for a period of more than four consecutive months (termination for
"Disability"), (iv) termination of the Executive's employment on account of the
Executive's death, or (v) termination of the Executive's employment by the
Executive due to and within 60 days of the occurrence, without the Executive's
consent, of (A) a material breach of the Company's obligations set forth in
Section 3 of this Agreement or (B) any change or changes in the Executive's
position or duties and responsibilities that, taken as a whole, result in a
material diminution of the Executive's position or duties and responsibilities
as set forth in Section 2 hereof; provided that this subpart (B) shall apply
only during the first 20 months of the Employment Period.
For purposes of this Agreement, an isolated, insubstantial and inadvertent
action taken by the Company in good faith and which is remedied by the Company
promptly (as soon as reasonably practicable, but no later than 60 days) after
receipt of written notice thereof given by the Executive shall not constitute a
basis for a Qualifying Termination.
(b) DEFINITION OF CAUSE. The Company may terminate the
Executive's employment immediately for "Cause" if, in the reasonable
determination of the Board, the Company's Chief Executive Officer, or the True
North Chief Executive Officer, as set forth in a writing setting forth in
reasonable detail the reasons for such termination, (i) the Executive engages in
conduct that violates in any material respect significant written policies of
the Company or True North which were provided to the Executive within a
reasonable period of time prior to his violation thereof; (ii) the Executive
fails to perform the essential functions of his job (except for a failure
resulting from a bona fide illness or incapacity) or fails to carry out the
reasonable directions of the Board or the Company's Chief Executive Officer with
respect to material duties; (iii) the Executive engages in embezzlement or
misappropriation of corporate funds, commits a felony or engages in any
significant violation of any material statutory or
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common law duty of loyalty to the Company; or (iv) the Executive breaches a
material provision of Section 7 or 8 of this Agreement. For purposes of this
Agreement, prior to taking action to terminate the Executive's employment for
Cause, the Company shall provide the Executive with written notice of any
violation(s) of clause (i), (ii), (iii), or (iv) above (providing reasonable
detail as to the circumstances of such violation(s)) and, except in the case
of violations of clause (iii) above, shall provide the Executive with a
reasonable opportunity to cure any such violation(s); provided that the
Company need not provide such opportunity to cure if the violation(s) in
question cannot reasonably be cured. The Executive shall attempt to cure such
violation(s) as soon as practicable after receipt of such written notice (but
in no event later than 60 days after receipt of such written notice).
5. CONSEQUENCES OF TERMINATION OF EMPLOYMENT PERIOD.
(a) BENEFITS UPON TERMINATION. If the Employment Period
terminates for any reason, the Executive (or the Executive's executor,
administrator or other legal representative, as the case may be) shall be
entitled to receive the following benefits:
(i) within 30 days after the amount in question is reasonably
determinable (1) base salary payable through the date of termination of
employment, (2) unpaid annual incentive compensation for the calendar
year immediately preceding the date of such termination, and (3)
reimbursement of proper expenses incurred through the date of such
termination; and
(ii) participation (by the Executive or the Executive's
qualified dependents, as the case may be) in all other applicable
benefit plans or programs in accordance with the provisions thereof
applicable to terminated employees (or their qualified dependents, as
the case may be).
(b) ADDITIONAL BENEFITS UPON QUALIFYING TERMINATION. If the
Employment Period terminates after the occurrence of a Qualifying Termination
(as defined in Section 4(a)), the Executive (or the Executive's executor,
administrator or other legal representative, as the case may be) shall be
entitled to receive the following additional benefits:
(i) within 30 days after the amount in question is reasonably
determinable, annual incentive compensation for the calendar year in
which such termination shall have occurred, prorated through the date
of such termination based on actual results of operations for such full
calendar year;
(ii) if the Qualifying Termination is for any reason other
than death or Disability:
(A) subject to the last sentence of this Section 5(b),
for a period equal to the greater of (1) the
remainder of the Initial Term or (2) 18 months,
commencing on the day immediately following the date
of termination of the employment of the Executive
(any such period during which severance
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is required to be paid being the "Severance Period"),
the Executive shall be entitled to receive base
salary, at the rate payable as of the date of such
termination, payable in accordance with the Company's
normal payroll policies;
(B) all stock options granted to the Executive by True
North on or after the Effective Date that are
unvested on the date of his Qualifying Termination
but would have vested within the Severance Period,
shall become fully vested as of such date and may be
exercised for the period set forth in and in
accordance with the other terms and conditions of the
relevant grant agreement for such stock options; and
(C) subject to the last sentence of this Section 5(b),
during the Severance Period, the Executive shall be
entitled to participate in life insurance, medical
and dental benefits on terms no less favorable than
on the termination date, subject to legal
restrictions and to modifications of general
application to all similarly situated employees; and
(iii) all unvested stock options shall be treated in
accordance with the terms of the underlying stock option agreements.
As a condition to the receipt of the severance benefits described in
subparagraph (ii) above, the Company reserves the right in accordance with the
standard Company severance policy to require the Executive to sign a standard
separation agreement, containing a general release of claims.
6. 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, state and foreign withholding taxes in accordance with
the Executive's Form W-4 on file with the Company and all applicable social
security and Medicare taxes.
7. NONCOMPETITION; NONSOLICITATION; CONFIDENTIALITY.
(a) COVENANT NOT TO COMPETE. The Executive acknowledges that
in the course of employment with the Company pursuant to this Agreement, the
Executive will become familiar with the Confidential Information (as defined
below) of the Company and its subsidiaries, affiliates and clients, and that the
Executive's services will be of special, unique and extraordinary value to the
Company. The Executive also acknowledges that the Company's obligations under
both this Agreement and the Purchase Agreement forms adequate consideration for
the obligations of the Executive set forth below. Except with the prior written
consent of the Board:
(i) during the Employment Period and any Severance Period the
Executive shall not engage in any activities, whether as employer,
proprietor, principal, partner, stockholder (other than the holder of
1% or less of the stock of a corporation the securities of which are
traded on a securities exchange or in the over-the-counter market),
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director, officer, employee or otherwise, in competition with (A) the
businesses conducted at the date hereof by the Company or (B) any
business in which the Company is substantially engaged or proposed to
be engaged within the three-month period preceding the termination of
Executive's employment with the Company; and
(ii) during the Executive's employment with the Company and
for 18 months thereafter, the Executive shall not, directly or
indirectly, either on the Executive's behalf or on behalf of any other
person, firm or corporation:
(A) solicit, call on, service or otherwise do business
with, or interfere in any way with the Company's
relationship with (by encouraging the termination of
that relationship or otherwise) any account that is a
client of the Company at the time of the Executive's
termination, or that was a client of the Company at
any time within six months prior to the date of such
termination;
(B) perform any services relating to advertising,
marketing, research, public relations or related
services for any account described in (A) above; or
(C) recruit or solicit, or attempt to recruit or solicit,
the employment or consulting services of or hire or
employ or retain the employment or consulting
services of any person who is at such time or who was
at any time within 12 months immediately prior to
such time, an employee of the True North Group.
The foregoing restrictions of this Section 7(a)(ii) are not intended to
restrict the Executive from working as an in-house employee for an
entity that is a client of the Company; provided that the Executive
does not take any direct or indirect actions in that capacity that are
designed to have a more than frivolous or insignificant negative impact
on the Company.
(b) CONFIDENTIAL INFORMATION AND TRADE SECRETS. The
Executive agrees that the Company has a protectable interest in Company
bidding information, trade secrets, client information, computer programs,
financial information and other confidential information (collectively, the
"Confidential Information"). The Executive shall not, at any time during the
Employment Period (except for the benefit of the Company within the scope of
the Executive's duties) or thereafter, make use of any nor divulge any
Confidential Information, except to the extent that such Confidential
Information becomes a matter of public record, is published in a newspaper,
magazine or other periodical available to the general public (other than as a
result of disclosure by the Executive) or as the Company may so authorize in
writing or to the extent required to be disclosed in any legal proceeding;
and when the Executive shall cease to be employed by the Company, the
Executive shall surrender to the Company all Confidential Information and
records and other documents obtained by him or entrusted to the Executive
during the course of the Executive's employment hereunder (together with all
copies thereof) which pertain specifically to any of the businesses covered
by the covenants in Section 7(a)(i) or
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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. The Executive also agrees that the
Executive will not at any time (whether before or after the termination of
the Executive's employment with the Company) disclose to anyone the economic
terms of this Agreement, except to the Executive's counsel, accountants and
members of the Executive's immediate family.
(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 Sections 7(a)(i) and 7(a)(ii)
shall apply within all geographic areas in North America and Africa in
which the Company is actively engaged in the conduct of business during
the Employment Period, including, without limitation, the geographic
areas in North America and Africa in which customers are then being
solicited;
(ii) the Executive expressly agrees and acknowledges that the
covenants contained in Sections 7(a) and 7(b) are reasonable in all
respects (including subject matter, time period and geography) and
necessary because of the substantial and irreparable harm that would be
caused to the Company by the Executive engaging in any of the
prohibited activities contained in such Sections. The Executive
expressly agrees and acknowledges that the covenants contained in this
Agreement will not preclude the Executive from earning a livelihood,
nor unreasonably limit the Executive's ability to earn a living, since
the Executive has the ability and experience to engage in employment
that will not breach or violate the covenants contained in this
Agreement. Each party intends and agrees that if in any action before
any court or agency legally empowered to enforce the covenants
contained in Sections 7(a) and 7(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; and
(iii) the covenants contained in Sections 7(a) and 7(b)
shall survive the conclusion of the Executive's employment by the Company.
8. NONDISPARAGEMENT; COOPERATION. (a) The Executive shall
not, at any time during his employment with the Company or thereafter, make
any public or private statement to the news media, to any True North Group
competitor or client, or to any other individual or entity, if such statement
would disparage any of the True North Group, any of their respective
businesses or any director or officer of any of them or such businesses or
would have a deleterious effect upon the interests of any of 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 (i) private statements made to any officers, directors or
employees of any of the True North Group by the Executive in the course of
carrying out his duties pursuant to this Agreement or, to the extent
applicable, his duties as a director or officer, or (ii) private statements
made to persons other than (x) clients or competitors of any of the True
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North Group (or their representatives) or (y) members of the press or the
financial community that do not have a material adverse effect upon any of
the True North Group; and provided further that nothing contained in this
Section 8(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, or as part of any judicial proceeding.
(b) The Company shall not, at any time during the
Executive's employment with the Company or thereafter, authorize any person
to make, 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 True North Group or (ii) private statements made to persons
other than clients or competitors of any of the True North Group (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 8(b) or in any other provision of this
Agreement shall preclude any officer, director, employee, agent or other
representative of any of the True North Group 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, or as part of any judicial
proceeding.
9. ENFORCEMENT. The parties hereto agree that the Company
would be damaged irreparably in the event that any provision of Section 7 or
8(a) of this Agreement were not performed in accordance with its terms or
were otherwise breached, that the Executive would be damaged irreparably in
the event that any provision of Section 8(b) 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, the Executive, and their 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 she or it will submit himself or itself to the
personal jurisdiction of the courts of the State of New York 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.
10. SURVIVAL. Sections 7, 8, 9 and 11 of this
Agreement shall survive and continue in full force and effect in accordance
with their respective terms, notwithstanding any termination or expiration of
the Employment Period.
11. ARBITRATION. 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 ("AAA") 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. Any arbitration shall be held before a single arbitrator who shall
be selected by mutual agreement of
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the Company and the Executive, unless the parties are unable to agree to an
arbitrator, in which case the arbitrator will be selected under the
procedures of the AAA. 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, the
Company or the Executive may, at its or his option, without inconsistency
with this arbitration provision, apply to any court having jurisdiction over
such dispute or controversy for the purpose of seeking injunctive or other
equitable relief to enforce Sections 7, 8 and 9 of this Agreement, as
applicable. 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.
12. NOTICE. All notices and other communications required
or permitted hereunder shall be in writing and shall be deemed to have been
duly given when personally delivered or five days after deposit in the United
States mail, certified and return receipt requested, postage prepaid,
addressed (a) if to the Executive, to the most recent address then shown on
the employment records of the Company, with a copy to Xxxxxxx X. Xxxxxxxxxx,
Esq., Xxxxxxx Xxxx & Xxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, and if
to the Company, to True North Communications Inc., 000 Xxxx Xxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000-0000, Attention: General Counsel, or (b) to such
other address as either party may have furnished to the other in writing in
accordance herewith, except that notices of change of address shall be
effective only upon receipt.
13. 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 determined 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.
14. 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 understandings,
agreements or representations by or between the parties, written or oral,
which may have related in any manner to the subject matter hereof.
15. SUCCESSORS AND ASSIGNS. This Agreement shall be
enforceable by the Executive and the Executive's heirs, executors,
administrators and legal representatives, and by the Company and its
successors and permitted assigns. Any successor or permitted assign of the
Company shall assume by instrument delivered to the Executive the liabilities
of the Company hereunder. This Agreement shall not be assigned by the Company
other than to a successor
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pursuant to a merger, consolidation or transfer of all or substantially all
of the capital stock or assets of the Company.
16. GOVERNING LAW. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
New York, without regard to principles of conflict of laws.
17. 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.
18. 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 above written.
FCB WORLDWIDE L.L.C.
By: /s/ J. Xxxxxxx Xxxx
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J. Xxxxxxx Xxxx,
Chief Executive Officer
EXECUTIVE
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
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