Exhibit 10.15
AGREEMENT made as of the 30th day of March, 1992, between BOZELL,
JACOBS, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, INC., a Delaware corporation with principal offices
at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇., ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (hereinafter referred to as the
"Corporation"), and ▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, residing at Cedar Lane, Remsenburg,
Long Island, New York (hereinafter referred to as "▇▇▇▇▇▇▇▇▇").
WHEREAS, ▇▇▇▇▇▇▇▇▇ is currently employed by the Corporation pursuant
to an Agreement dated August, 1983 between K & E HOLDINGS INC. (a corporation
subsequently merged into the Corporation and thus assumed by the Corporation),
an initial Amendment Agreement dated as of January 2, 1986 and a second
Amendment Agreement dated February 8, 1988 (the original Employment Agreement,
together with the first and second Amendments thereto being hereinafter
collectively referred to as the "Employment Agreement"), and
WHEREAS, the Corporation and ▇▇▇▇▇▇▇▇▇ desire to restate the terms of
their future relationship, and
WHEREAS, the Corporation hereby agrees to continue to employ
▇▇▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇▇▇ hereby agrees to continue to serve the Corporation upon
the terms and conditions hereinafter set forth,
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter contained, the parties hereby agree as follows:
1. Employment.
----------
The Corporation shall employ, or cause one or more of its subsidiary
companies to employ, ▇▇▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇▇▇ shall serve the Corporation and
such of the Corporation's subsidiary companies as may be designated by the
Corporation, upon the terms and conditions hereinafter set forth.
2. Term of Service.
---------------
2.1 Full Time Employment.
--------------------
The Agency shall employ ▇▇▇▇▇▇▇▇▇ for a period (hereinafter referred
to as the "Period of Full Time Employment" beginning on the date hereof and
ending on December 31, 1993 or at such other date as the parties hereto may
mutually agree upon.
2
2.2 Consulting Period.
-----------------
Upon the expiration or termination of the Period of Full Time
Employment of ▇▇▇▇▇▇▇▇▇ pursuant to this Agreement, unless such employment shall
have been terminated for cause pursuant to Paragraph 10.1 hereof, the Agency
shall retain ▇▇▇▇▇▇▇▇▇ as a consultant for a period of seven (7) years
commencing on the date of such expiration or termination (hereinafter referred
to as the "Consulting Period").
2.3 Option to Extend Term.
---------------------
▇▇▇▇▇▇▇▇▇ shall have the option (the "Option"), exercisable at any
time on or before June 30, 1993, to extend the Term through December 31, 1995
(the "Extended Employment Period"), with his Consulting Period to commence,
again subject to termination for cause, on January 1, 1996 but extend only for a
period of five (5) years thereafter. The Option shall be exercised in writing
delivered to the Chief Executive Officer of the Agency by certified or
registered mail, return receipt requested.
3
3. Duties and Extent of Services.
-----------------------------
3.1 Duties and Extent of Services during Period of Full Time
--------------------------------------------------------
Employment.
----------
(a) During the Period of Full Time Employment, ▇▇▇▇▇▇▇▇▇ shall serve
as Chairman of the Executive Committee of the Corporation and such of the
Corporation's subsidiary companies as may be designated by the Board of
Directors of the Corporation, under the direction and supervision of the Board
of Directors of the Corporation, and shall perform, from time to time, such
other services, advisory or otherwise, and the Board of Directors of the
Corporation shall reasonably request, without further compensation other than
that for which provision is made in this Agreement. The principal place of
business of ▇▇▇▇▇▇▇▇▇ shall be the New York metropolitan area. ▇▇▇▇▇▇▇▇▇ shall
also serve during the Period of Full Time Employment as Chairman of the
International Division of the Corporation, and, subject to his election
to the Board of Directors of Bozell Mexico, as hereinafter referred to in
Paragraph 3.1(c), the Corporation will use its best efforts to arrange for his
election as Chairman of Bozell Mexico.
(b) During the Period of Full Time Employment, ▇▇▇▇▇▇▇▇▇ (i)
shall devote such attention and energy to the performance of his duties
hereunder and to promoting
4
and furthering the interests of the Corporation as may reasonably be required;
and (ii) shall not, without the express consent of the Board of Directors of the
Corporation, become directly or indirectly associated with or engaged in
any other business, including without limiting the generality of the foregoing,
any advertising, marketing, public relations or promotional business other than
that of the Corporation, or a subsidiary company of the Corporation, and he
shall do nothing inconsistent with his duties to the Corporation except that he
may engage in business activities in connection with the investment of his
personal assets and such other minimal business activities which shall not
interfere or conflict with the performance by ▇▇▇▇▇▇▇▇▇ of his duties and
obligations under this Agreement. Nothing contained herein shall be deemed
to prohibit or restrict ▇▇▇▇▇▇▇▇▇ from owning shares or otherwise investing
in any advertising, marketing, public relations or promotional company whose
securities are listed on a national securities exchange or actively traded in
the over-the-counter market so long as ▇▇▇▇▇▇▇▇▇'▇ holdings do not exceed more
than 1% of the issued and outstanding securities of such company.
5
(c) During the Period of Full Time Employ Employment:
(i) ▇▇▇▇▇▇▇▇▇ shall be elected as a member of the Board of
Directors of the Corporation and of any committees thereof of which he is
currently a member;
(ii) ▇▇▇▇▇▇▇▇▇ shall serve as Chairman of the International
Division of the Corporation;
(iii) the Corporation shall use its best efforts to arrange for
the election of ▇▇▇▇▇▇▇▇▇ to the Board of Directors of Bozell Mexico, a
Mexican corporation in which the Corporation owns a minority interest; and
(iv) ▇▇▇▇▇▇▇▇▇ shall be provided with an office and staff
consistent with his stature and responsibilities under this Agreement.
3.2 Duties and Extent of Service During Consulting Period.
-----------------------------------------------------
(a) Upon commencement of the Consulting Period, ▇▇▇▇▇▇▇▇▇ shall cease
to be a salaried employee of the Corporation and its subsidiary companies,
parents or affiliates, shall cease to be eligible to participate in the
6
Corporation's employee benefit plans and shall resign as an officer and director
of the Corporation and of each of its subsidiary companies, parents or
affiliates.
(b) During the Consulting Period, ▇▇▇▇▇▇▇▇▇ shall furnish consulting
and advisory services to the Corporation and/or its subsidiary companies with
respect to the operation of the Corporation's advertising business and the
maintenance of harmonious relations between the Corporation and those clients of
the Corporation and/or its subsidiary companies, as may be designated by the
Board of Directors of the Corporation. Without limiting the generality of the
foregoing, ▇▇▇▇▇▇▇▇▇ shall (i) cooperate fully with the Chief Executive Officer
of the Corporation and the other senior executive officers of the Corporation
and its subsidiary companies, (ii) provide such assistance and information as
may be reasonably requested by the Board of Directors and officers of the
Corporation, and (iii) be available, by telephone or in person, at such times
and places as may be reasonably requested by the Company and as may be mutually
convenient to the Corporation and ▇▇▇▇▇▇▇▇▇. During the Consulting Period,
(i) ▇▇▇▇▇▇▇▇▇ shall not be required to devote more than an average of 6 hours
per week to such consulting and advisory services and (ii) ▇▇▇▇▇▇▇▇▇'▇
consulting and advisory services shall be subject to Kelmen-
7
son's reasonable business and professional commitments and vacations.
(c) ▇▇▇▇▇▇▇▇▇ may, during the Consulting Period, engage or participate
in, or become employed by, or render advisory or other services in connection
with, any and all other business activities which are not inconsistent with or
otherwise in breach of ▇▇▇▇▇▇▇▇▇'▇ duties and obligations to the Corporation
under Paragraph 13 hereof.
4. Compensation.
------------
4.1 Base Compensation During the Period of Full Time Employment.
-----------------------------------------------------------
(a) As full compensation for the services to be rendered by ▇▇▇▇▇▇▇▇▇
during the Period of Full Time Employment hereunder, the Corporation shall pay
to ▇▇▇▇▇▇▇▇▇ as base compensation (hereinafter referred to as the "Base
Compensation") the greater of the following:
(i) commencing with the annual period beginning January 1,
1991, the annual sum of $734,492 (adjusted as hereinafter provided), and
(ii) Seven Hundred Fifty Eight Thousand Eight Hundred and
Ninety Dollars ($758,890) per annum.
8
Such Base Compensation shall be paid to ▇▇▇▇▇▇▇▇▇ in the same periodic
installments as the salaries of other senior executives of the Corporation or in
such other manner an the parties hereto mutually may agree upon.
(b) On January 1, 1992 and on each January 1 thereafter during the
Term (the "Adjustment Date"), Kelmanson's compensation provided in Paragraph
4.1(a)(i) above shall be adjusted upward based upon the Consumer Price Index for
all Urban Consumer/United States City Average, as published by the Bureau of
Labor Statistics of the United States Department of Labor (the "CPI"). Such
compensation for the twelve (12) months beginning on each Adjustment Date
pursuant to Paragraph 4.1(a)(i) above shall be equal to the greater of (i)
$734,492, or (ii) $734,492, multiplied by a fraction, the numerator of which
shall be the CPI published most recently prior to the Adjustment Date and the
denominator of which shall be the CPI published most recently prior to January
1, 1991. In no event however, shall the salary for any twelve month period
exceed 106% of the salary payable in the previous twelve month period.
4.2 Consulting Fees During The Consulting Period.
--------------------------------------------
During the Consulting Period, the Corporation shall pay to ▇▇▇▇▇▇▇▇▇
consulting fees, payable in monthly installments or in such other manner as the
parties hereto mutually may agree upon, at a rate per annum equal to the sum of
(a) 50% of the Base Compensation in effect at the
9
time of termination of the Period of Full Time Employment, plus (b) Thirty Five
Thousand Dollars ($35,000). In the event that ▇▇▇▇▇▇▇▇▇ exercises the Option
referred to in Paragraph 2.3 hereof, there shall be determined the amount of
Consulting Fees which would have been payable to ▇▇▇▇▇▇▇▇▇ over the seven
(7) year Consulting Period, had the Option not been exercised, which amount
shall be paid to ▇▇▇▇▇▇▇▇▇ in equal installments throughout the five (5) year
Consulting Period in effect as a result of the exercise of the Option.
5. Bonus Arrangements.
------------------
The Corporation shall pay ▇▇▇▇▇▇▇▇▇ a bonus (the "Bonus") of Three
Hundred Fifty Thousand Dollars ($350,000) on December 31, 1993. In the event of
the termination of ▇▇▇▇▇▇▇▇▇'▇ employment for any reason, including, without
limitation, ▇▇▇▇▇▇▇▇▇'▇ death, prior to December 31, 1993, the Bonus shall
nevertheless be payable on such date. In the event of ▇▇▇▇▇▇▇▇▇'▇ death prior
thereto, the Bonus shall be payable to such person or persons as may be
designated by ▇▇▇▇▇▇▇▇▇ in writing delivered to the Corporation, and in the
absence of such written designation, to ▇▇▇▇▇▇▇▇▇'▇ estate.
10
6. Discretionary Issuance of Additional Stock.
------------------------------------------
The Corporation may consider, at the sole discretion of the Chief
Executive Officer of the Corporation, and subject to the availability of shares
of Stock and subject also to the limitations on the Corporation's right and
ability to issue additional shares, offering to ▇▇▇▇▇▇▇▇▇ not more than 250,000
shares of the Class B Common Stock of the Corporation, in addition to the shares
of the Class B Common Stock currently owned by ▇▇▇▇▇▇▇▇▇, subject to ▇▇▇▇▇▇▇▇▇'▇
execution of the Corporation's standard Subscription Agreement providing for
such purchase.
7. Other Benefits.
--------------
7.1 Employee Benefit Plans.
----------------------
The Corporation shall maintain in full force and effect all of its
employee benefit plans and arrange ments in affect on the date hereof (including
the split-dollar insurance policy, the life insurance policies pursuant to
Paragraph 12.1 hereof and all other insurance policies from which ▇▇▇▇▇▇▇▇▇
currently benefits), or plans or arrangements providing ▇▇▇▇▇▇▇▇▇ with at least
equivalent benefits thereunder, and shall not make any changes in such plans or
arrangements which would adversely affect ▇▇▇▇▇▇▇▇▇'▇ rights or benefits
thereunder. ▇▇▇▇▇▇▇▇▇ shall be entitled to participate in, or receive benefits
under, any
11
generally available pension plan, profit-sharing plan, health-and-accident plan,
or any other employee benefit plan or arrangement made available by the
Corporation or ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Incorporated in the future to the extent that
▇▇▇▇▇▇▇▇▇ qualifies under the provisions of any such plan, and nothing paid to
▇▇▇▇▇▇▇▇▇ under any such plan or arrangement (or under any presently in effect,
other than under any bonus plan referred to in Paragraph 5 hereof) shall be
deemed or treated as a payment to ▇▇▇▇▇▇▇▇▇ hereunder.
7.2 Travel With Spouse.
------------------
It is understood that it will be necessary for business purposes for
▇▇▇. ▇▇▇▇▇▇▇▇▇ to accompany ▇▇▇▇▇▇▇▇▇ on various business trips from time to
time and, whenever ▇▇▇▇▇▇▇▇▇ in the exercise of his reasonable judgment
determines that the presence of ▇▇▇. ▇▇▇▇▇▇▇▇▇ on any business trip will serve
the Corporation's best interests, the Corporation will pay for all reasonable
travel expenses incurred by ▇▇▇. ▇▇▇▇▇▇▇▇▇ on such business trip.
7.3 Type of Air Travel.
------------------
It is acknowledged that the Corporation policy requires all employees,
including senior executives, to travel in Economy Class on domestic flights and
in Business Class on International flights. However, from time to
12
time ▇▇▇▇▇▇▇▇▇ may fly First Class on either a domestic or an international
flight whenever ▇▇▇▇▇▇▇▇▇, in the exercise of his reasonable judgment,
determines that it is in the best interests of the Corporation for him to do so,
as for example, and without limitation, when traveling with a client or with
talent appearing in a commercial produced by the Corporation.
7.4 Review By Chief Financial Officer.
---------------------------------
It is understood and agreed that the Chief Financial Officer of the
Corporation may from time to time review determinations made by ▇▇▇▇▇▇▇▇▇ with
regard to travel arrangements as provided in Paragraphs 7.2 and 7.3 hereof. If
in the reasonable determination of such officer any of such travel arrangements
were not in the best interests of the Corporation, ▇▇▇▇▇▇▇▇▇ agrees to conform
to such determination with regard to future travel arrangements, without any
adjustment of the costs of travel arrangements previously incurred.
7.5 Medical Expenses.
----------------
▇▇▇▇▇▇▇▇▇ shall be reimbursed by the Company for medical expenses
incurred by ▇▇▇▇▇▇▇▇▇ (or by members of his immediate family), which medical
expenses are not subject to reimbursement under the Company's Medical
Reimbursement Plan, up to a maximum of twelve thousand dollars
13
($12,000.00) per annum; provided, however, that the Company reserves the right
to cancel and revoke prospectively the supplemental medical reimbursement
prescribed herein in the event that the Internal Revenue Service determines that
the payment thereof shall not be considered an expense deductible by the
Company for federal income tax purposes.
7.6 Benefit Plan Differential.
-------------------------
▇▇▇▇▇▇▇▇▇ shall be entitled to participate ratably with other senior
officers in all contributions during each annual period to the present Profit
Sharing Plan and any employee stock ownership or other qualified plan of BJK&E
or any qualified plan adopted by the Company subsequent hereto.
At the end of each of the Company's fiscal years within the Term,
there shall be determined the aggregate amount of the annual addition
attributable to employer contributions and forfeitures within the meaning of
Section 415(c)(2)(A) and (C) of the Internal Revenue Code of 1986 (the "Code")
to ▇▇▇▇▇▇▇▇▇'▇ account for the plan year corresponding with such fiscal year
under any of BJK&E's qualified defined contribution plans under Section 401 of
the Code (the "Annual Addition"). ▇▇▇▇▇▇▇▇▇ shall be paid promptly a bonus in
cash equal to the difference, if any, between:
14
(i) $30,000 (or such greater or lesser amount that is the
maximum annual addition for such year under Section 415(c)(1)(A) of
the Code), and
(ii) the Annual Addition to the Executive's accounts for
such year.
7.7 Other Expenses.
--------------
(a) The Corporation will pay to ▇▇▇▇▇▇▇▇▇, upon the execution of
this Agreement and in a single lump-sum payment, the sum of Twenty Thousand
Dollars ($20,000) to compensate ▇▇▇▇▇▇▇▇▇ for legal fees incurred to date by him
in connection with the negotiation of this Employment Agreement and prior
Employment Agreements.
(b) The Corporation will pay to ▇▇▇▇▇▇▇▇▇, upon the execution of
this Agreement and in a single lump-sum payment, the sum of Twelve Thousand
Dollars ($12,000) to compensate ▇▇▇▇▇▇▇▇▇ for accounting fees incurred by him in
connection with the preparation of prior personal income tax returns. In
addition, the Corporation agrees to provide the services of the firm of
certified public accountants generally retained by it (currently Peat Marwick
Main & Co.) in connection with the preparation of ▇▇▇▇▇▇▇▇▇'▇ personal annual
federal, state and local income tax returns if Kel-
15
menson so elects to utilize such firm, without cost to ▇▇▇▇▇▇▇▇▇.
7.8 Additional Possible Death Benefit.
---------------------------------
In the event of ▇▇▇▇▇▇▇▇▇'▇ death at any time from and after the
date of the execution of this Agreement through the Period of Full Time
Employment, the Agency will pay to ▇▇▇▇▇▇▇▇▇, for a period of twenty-nine (29)
months beginning six (6) months after the date of ▇▇▇▇▇▇▇▇▇'▇ death, the
Consulting Fees which would have been paid to ▇▇▇▇▇▇▇▇▇ within such twenty-nine
(29) month period had he survived, computed as if retirement had occurred on the
date of ▇▇▇▇▇▇▇▇▇'▇ death. In addition, in the event of ▇▇▇▇▇▇▇▇▇'▇ death
within the twenty-nine (29) month period beginning on the commencement of the
Consulting Period, the Agency will pay, throughout the remainder of such twenty-
nine (29) month period, the Consulting Fees which would have been payable to
▇▇▇▇▇▇▇▇▇ within such remaining period had he survived.
All payments hereunder will be made to ▇▇▇▇▇▇▇▇▇'▇ estate or to
such persons or person as ▇▇▇▇▇▇▇▇▇ may specifically designate in writing
delivered to the Agency.
16
8. Expenses.
--------
8.1 General.
-------
It is contemplated that, in connection with his employment
hereunder during the Period of Full Time Employment and during the Consulting
Period, ▇▇▇▇▇▇▇▇▇ may be required to incur reasonable business, entertainment
and travel expenses. The Corporation shall advance funds to ▇▇▇▇▇▇▇▇▇ or
reimburse ▇▇▇▇▇▇▇▇▇ in full, for all reasonable business, entertainment and
other related expenses, including, without limitation, travel expenses,
incurred or expended by him incident to the performance of his duties
hereunder, upon submission by ▇▇▇▇▇▇▇▇▇ to the Corporation of vouchers or
expense statements reasonably satisfactory to the Corporation evidencing such
expenses. Specifically included, again without limitation, among the expenses
reimbursable pursuant to this Paragraph 8.1 are expenses incurred by ▇▇▇▇▇▇▇▇▇
for special staff food and drink for entertainment or meetings at any residence
of ▇▇▇▇▇▇▇▇▇ in furtherance of the Corporation's business activities. In the
event, however, that the Corporation utilizes ▇▇▇▇▇▇▇▇▇'▇ residence in
Remsenburg, N. Y. on a daily basis for purposes of client entertainment or
company business, the Corporation will pay to ▇▇▇▇▇▇▇▇▇, in addition to
reimbursement for food and drink as hereinabove provided, the sum of
17
One Thousand Five Hundred Dollars ($1,500) per day for each such day of use.
8.2 Automobiles.
-----------
In connection with his services hereunder, the Corporation shall
provide ▇▇▇▇▇▇▇▇▇ during the Period of Full Time Employment two automobiles
similar in make to those in use by ▇▇▇▇▇▇▇▇▇ on the date hereof or exclusive use
by ▇▇▇▇▇▇▇▇▇ and shall employ, or reimburse ▇▇▇▇▇▇▇▇▇ for the cost of a driver
reasonably selected by ▇▇▇▇▇▇▇▇▇ for such automobiles.
9. Vacations.
---------
During the Period of Full Time Employment under this Agreement,
▇▇▇▇▇▇▇▇▇ shall be entitled to actual vacations (taken consecutively or in
segments) the length of which shall be determined consistent with the effective
discharge of ▇▇▇▇▇▇▇▇▇'▇ duties hereunder and the past customs and practices of
the Corporation up to a maximum of 25 days per annum.
10. Termination.
-----------
10.1 Termination by Corporation for Cause.
-------------------------------------
▇▇▇▇▇▇▇▇▇'▇ employment hereunder during the Period of Full Time
Employment may be terminated by the
18
Corporation for cause only by reason of one or more of the following
occurrences: (i) ▇▇▇▇▇▇▇▇▇ shall have been guilty of wilful and material breach
of this Agreement or habitual neglect of duty in the course of his employment,
which breach or neglect is unrelated to any illness or other disability, and of
which breach or neglect he shall have been previously advised, except in the
case of any act or omission which would be criminal and the Board of Directors
has made a determination to that effect, or (ii) the engaging by ▇▇▇▇▇▇▇▇▇ in
any competitive act or the willful making by ▇▇▇▇▇▇▇▇▇ of any unauthorized
disclosure.
Termination for cause shall not have occurred because of any act
or omission by ▇▇▇▇▇▇▇▇▇ believed by ▇▇▇▇▇▇▇▇▇ in good faith not to be adverse
to the bent inter est of the Corporation without his intention of gaining from
such act or omission, directly or indirectly, any profit or benefit to which he
was not legally entitled. In the event that the employment of ▇▇▇▇▇▇▇▇▇ either
during the Period of Full Time Employment or during the Consulting Period should
be terminated by the Corporation for cause in accordance with this Paragraph
9.1, the Corporation shall have no further obligations under this Agreement.
19
10.2 Disability.
----------
(a) If ▇▇▇▇▇▇▇▇▇ should be incapacitated by reason of mental or
Physical disability during the period of full time of employment so that he is
prevented from performing the services required of him in accordance with his
obligations under Paragraph 3.1 of this Agreement, and such incapacity continues
for a period of 180 consecutive days, or for shorter periods aggregating 180
days during any period of 365 consecutive days, the Corporation may, upon
written notice to ▇▇▇▇▇▇▇▇▇, terminate the full time employment of ▇▇▇▇▇▇▇▇▇
hereunder. Upon such termination, ▇▇▇▇▇▇▇▇▇ shall become a consultant to the
Corporation in accordance with this Agreement and shall be entitled to the
compensation provided for in Paragraph 4 hereof.
(b) If, during the Consulting Period, ▇▇▇▇▇▇▇▇▇ should be
incapacitated by reason of any mental or physical disability occurring in or
continuing into the Consulting Period so that he is prevented from performing
the services required of him pursuant to Paragraph 3.2 hereof, ▇▇▇▇▇▇▇▇▇ shall
continue to be paid the compensation provided for in Paragraph 4 hereof;
provided, however, that in the event ▇▇▇▇▇▇▇▇▇ shall fully recover from such
incapacity, ▇▇▇▇▇▇▇▇▇ shall render such services to the Corporation during any
balance of the Consulting Period.
20
Reference is made to that certain Employment Agreement dated as of March
30, 1992 between Bozell, Jacobs, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Inc. and ▇▇▇-▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ("Employment Agreement").
It is understood and agreed that the reference to "Chairman of the
Executive Committee" in the second and third lines of Paragraph 3.1(a) and in
the fourth and fifth lines of Paragraph 10.3 of the Employment Agreement shall
be changed to "Chairman of the Board of Directors".
Except as is referred to herein, all the terms and provisions of the
Employment Agreement shall remain unamended and in full force and effect as of
the date hereof.
DATED: July 13, 1992
Bozell, Jacobs, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Inc.
By: /s/ Valentine ▇. ▇▇▇▇▇▇
--------------------------------------
Valentine ▇. ▇▇▇▇▇▇
/s/ ▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------------
▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
FIRST AMENDMENT, made as of the 30th day of June, 1993, to the Employment
Agreement between Bozell, Jacobs, ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Inc, a Delaware
corporation with its principal offices at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ (hereinafter the "Corporation"), and ▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ residing at Cedar
Lane, Remsenburg, New York (hereinafter "▇▇▇▇▇▇▇▇▇").
WHEREAS, ▇▇▇▇▇▇▇▇▇ is currently employed by the Corporation pursuant to an
employment agreement dated as of March 30, 1992 (the "Employment Agreement"),
pursuant to which ▇▇▇▇▇▇▇▇▇, at Paragraph 2.3 thereof, was granted an option to
extend the term of the agreement from June 30, 1993 through December 21, 1995,
and
WHEREAS, ▇▇▇▇▇▇▇▇▇ has duly executed such option, and
WHEREAS, the parties desire to grant to ▇▇▇▇▇▇▇▇▇ an additional option to
extend the term for an additional one year through December 31, 1996,
NOW THEREFORE, in consideration of the premises and mutual agreements
hereinafter contained, the parties hereby agree as follows:
1. ▇▇▇▇▇▇▇▇▇ is hereby given and granted the right and option (the
"Second Option"), exercisable at any time before June 30, 1995, to extend the
Period of Full Time Employment, as defined in Paragraph 2.1 of the Employment
Agreement, for a period of one additional year through December 31, 1996.
2. In the event of the exercise of the Second Option, the Consulting
Period, as defined in Paragraph 2.2 of the Employment Agreement, shall, unless
▇▇▇▇▇▇▇▇▇'▇ employment shall have been terminated for cause pursuant to
Paragraph 10.1 of the Employment Agreement, commence on January 1, 1997 and
shall extend for a period of four years thereafter. The amount of Consulting
Fees payable throughout the said four year Consulting Period shall be the total
amount of Consulting Fees payable throughout the five year Consulting Period
referred to in Paragraph 4.2 of the Employment Agreement. The Consulting Fees
shall be paid to ▇▇▇▇▇▇▇▇▇ in equal installments throughout the said four year
period.
3. The Second Option shall be exercised in writing delivered to the Chief
Executive Officer of the Agency by certified or registered mail, return receipt
requested.
2
4. As thus amended, all of the terms and conditions of the Employment
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this agreement as of
the date and year first above written.
BOZELL, JACOBS, ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇, INC.
By: /s/ Valentine ▇. ▇▇▇▇▇▇
----------------------------
Valentine ▇. ▇▇▇▇▇▇
/s/ ▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------
▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
3
SECOND AMENDMENT, entered into this 3rd day of February, 1995, to the
Employment Agreement between Bozell, Jacobs, ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇, Inc., a
Delaware corporation with its principal offices at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ (hereinafter the "Corporation"), and ▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
residing at Cedar Lane, Remsenburg, New York (hereinafter "▇▇▇▇▇▇▇▇▇").
WHEREAS, ▇▇▇▇▇▇▇▇▇ is currently employed by the Corporation pursuant
to an employment agreement dated as of March 30, 1992 (the "Employment
Agreement"), pursuant to which ▇▇▇▇▇▇▇▇▇, at Paragraph 2.3 thereof, was granted
an option to extend the term of the agreement from June 30, 1993 through
December 31, 1995, which option ▇▇▇▇▇▇▇▇▇ has duly exercised, and
WHEREAS, ▇▇▇▇▇▇▇▇▇ was granted an additional option to extend the term
of the Employment Agreement for an additional one year period through December
31, 1996 pursuant to a first amendment to the Employment Agreement dated as of
June 30, 1993 (the "First Amendment"), and
WHEREAS, the parties wish to further amend the Employment Agreement
and First Amendment on the terms and conditions set forth herein (all terms not
otherwise defined
herein shall be used as defined in the Employment Agreement and First
Amendment),
NOW, THEREFORE, in consideration of the premises and mutual agreements
hereinafter contained, the parties hereby agree as follows:
1. The Second Option, as defined in Paragraph 1 of the First
Amendment, if exercised by ▇▇▇▇▇▇▇▇▇ pursuant to the provisions thereof, shall
extend the Period of Full Time Employment, as defined in Paragraph 2.1 of the
Employment Agreement, through March 31, 1998. In the event ▇▇▇▇▇▇▇▇▇ exercises
the Second Option, the Consulting Period shall commence on April 1, 1998 and
continue for four (4) years thereafter, and the Consulting Fee shall be
calculated and paid in accordance with Paragraph 4.2 of the Employment Agreement
and Paragraph 2 of the First Amendment.
2. Paragraph 7.8 of the Employment Agreement as amended by the First
Amendment is hereby deleted in its entirety and the following is hereby
substituted in its place and stead:
"7.8(a) In the event of ▇▇▇▇▇▇▇▇▇'▇ death at any time from and after
the date of the execution of this Agreement through the Period of Full
Time
2
Employment, and prior to his exercise of the Second Option, the Agency
will pay to ▇▇▇▇▇▇▇▇▇, for a period of five (5) years beginning six
(6) months after the date of ▇▇▇▇▇▇▇▇▇'▇ death (the "Payment
Commencement Date"), the Consulting Fees which would have been paid to
▇▇▇▇▇▇▇▇▇ within such five (5) year period had he survived, computed
as if retirement had occurred on the date of ▇▇▇▇▇▇▇▇▇'▇ death. In
addition, in the event that ▇▇▇▇▇▇▇▇▇ has not exercised the Second
Option and dies during the Consulting Period, the Agency will pay,
throughout the remainder of the Consulting Period, the Consulting Fees
which would have been payable to ▇▇▇▇▇▇▇▇▇ within such remaining
period had he survived. Notwithstanding the foregoing, in such latter
event, no payment shall be due ▇▇▇▇▇▇▇▇▇ for the last fifteen and one-
half (15 1/2) months of said five (5) year period (the "15 1/2 Month
Payment") unless the annual Gross Income, as hereinafter defined,
earned by the Corporation and its subsidiaries from the Chrysler
account throughout the United States and the remainder of the world
(the "Worldwide Chrysler Account") in the last full fiscal year of the
Corporation immediately preceding the Payment Commencement Date (the
"Comparison Year"), is at
3
least equal to $63,010,000, the annual Gross Income earned from the
Worldwide Chrysler Account for the Corporation's fiscal year ending
March 31, 1994 (the "Base Year"), adjusted upward to account for the
aggregate percentage increase in the 8-media composite cost-per-
thousand between the Base Year and the Comparison Year. The percentage
increase in the 8 media composite CPM used in making such comparison
shall be obtained from the Media Cost-Per Thousand (CPM) Increase
Table prepared annually and distributed by the American Association of
Advertising Agencies ("AAAA") to its membership annually. At the end
of the Comparison year, the annual Gross Income from the Worldwide
Chrysler Account earned in the Base Year, for purposes of determining
▇▇▇▇▇▇▇▇▇'▇ eligibility for the 15 1/2 Month Payment, shall be
adjusted to an amount equal to the greater of (i) $63,010,000, the
amount of Gross Income earned from the Worldwide Chrysler Account in
the Base Year, or (ii) the amount of such annual Gross Income
increased by the aggregate annual percentage increase in the 8-media
composite (CMP) between the Base Year and the year ended immediately
preceding the end of the Comparison Year. The parties agree that if
the method
4
utilized in the report distributed annually by AAAA in determining the
annual 8-media composite (CPM) percentage increase is changed in any
material manner, or if AAAA ceases distributing such data to its
membership prior to the determination of the right of ▇▇▇▇▇▇▇▇▇'▇
estate to all payments due pursuant to the provisions of this
Paragraph 7.8(a), then the parties agree to use their best efforts to
ascertain and utilize for the purposes of this Agreement the best CPM
index determination then available to the advertising industry, and to
use best efforts as well to adjust any such index if necessary in
order to fairly and equitably relate such index to the adjustment
provided herein.
(b) In the event ▇▇▇▇▇▇▇▇▇ exercises the Second Option, the
Consultancy Fees shall be computed in accordance with the provisions
of paragraph 2 of the First Amendment, which provides for a four (4)
year Consulting Period, and if ▇▇▇▇▇▇▇▇▇ dies prior to the
commencement of the Consulting Period, ▇▇▇▇▇▇▇▇▇ will receive the
Consulting Fee which would have been paid to ▇▇▇▇▇▇▇▇▇ during such
four (4) year period had he survived, computed as if retirement had
occurred on the date
5
of ▇▇▇▇▇▇▇▇▇'▇ death. If ▇▇▇▇▇▇▇▇▇'▇ death occurs within such
Consulting Period, no payment shall be due to ▇▇▇▇▇▇▇▇▇ for the last
twelve (12) months of said four (4) year period unless the Annual
Gross Income earned from the Worldwide Chrysler Account in the
Comparison Year is at least equal to the Annual Gross Income earned
from said account in the Base Year, adjusted pursuant to the formula
set forth in paragraph 7.8(a) above.
"Gross Income", as used herein, is hereby defined as the sum of (i)
commissions earned from media on the Worldwide Chrysler Account, (ii) fees
earned from the Worldwide Chrysler Account, (iii) commissions earned on
print and broadcast production from the Worldwide Chrysler Account, and
(iv) time charges for collateral materials and other services performed for
the Worldwide Chrysler Account".
All payments hereunder will be made to ▇▇▇▇▇▇▇▇▇'▇ estate or to such
persons or person as ▇▇▇▇▇▇▇▇▇ may specifically designate in writing delivered
to the Agency.
3. It is acknowledged that pursuant to the Corporation's Bonus Plan
(the "Bonus Plan") currently in effect, ▇▇▇▇▇▇▇▇▇ is eligible to receive a bonus
from two
6
separate bonus pools within the Bonus Plan, those being the Holding Company
Executive Pool (the "HCE Pool") and the Detroit Profit Center Plan (the "Detroit
Pool")
a. With regard to the HCE Pool, the Corporation agrees that ▇▇▇▇▇▇▇▇▇'▇
share of any bonus payable from the HCE Pool shall be an amount equal to
▇▇▇▇▇▇▇▇▇'▇ Base Compensation multiplied by a fraction, the numerator of which
shall be the total amount of the HCE Pool, and the denominator of which shall be
the total salaries of all employees eligible to participate in the HCE Pool. The
amount of any bonus to ▇▇▇▇▇▇▇▇▇ from the HCE Pool, however, shall not exceed
twenty-five (25%) percent of ▇▇▇▇▇▇▇▇▇'▇ Base Compensation, or such greater
percentage as may be determined from time to time by and at the discretion of
the Chief Executive Officer of the Corporation with approval of the Compensation
Committee of the Board of Directors of the Corporation.
b. With regard to the Detroit Pool, the Corporation agrees that
▇▇▇▇▇▇▇▇▇'▇ share of any bonus payable from the Detroit Pool shall be determined
in accordance with the provisions of the Bonus Plan and shall thereby be subject
to review by the Compensation Committee of the Board of Directors of the
Corporation, but shall be no less than an amount equal to ▇▇▇▇▇▇▇▇▇'▇ Base
7
Compensation multiplied by a fraction, the numerator of which shall be the total
amount of the Detroit Pool, and the denominator of which shall be the total
salaries of all employees eligible to participate in the Detroit Pool. By reason
of the obligation of the Corporation to pay for the acquisition of the
Jeep/Eagle Account from ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Esty, it is agreed that the amount of
any bonus to ▇▇▇▇▇▇▇▇▇ from the Detroit Pool for the Corporation's fiscal years
ending March 31, 1995 and March 31, 1996 shall not exceed twenty-five percent
(25%) of ▇▇▇▇▇▇▇▇▇'▇ Base Compensation.
It is understood and agreed that the Corporation may eliminate the Bonus
Plan or modify the terms thereof, and that if eliminated, the Corporation shall
have no further obligation to ▇▇▇▇▇▇▇▇▇ with regard to bonus payments provided
for in this Paragraph 3, and if modified, the obligations of the Corporation
hereunder shall be considered changed to reflect such modification; provided,
however, that ▇▇▇▇▇▇▇▇▇ shall not be treated any less favorably in connection
with any such termination or modification than any other Bonus Plan participant.
4. The Corporation hereby gives and grants to the Executive an option to
purchase 250,000 shares of the Class B Common Stock of the Corporation pursuant
to the terms and conditions of the Bozell, Jacobs, ▇▇▇▇▇▇ &
8
▇▇▇▇▇▇▇▇ Inc. Stock Option Plan (the "Stock Option Plan"). The grant of such
option shall be evidenced by the execution by both the Corporation and
▇▇▇▇▇▇▇▇▇, simultaneously with the execution of this Agreement, of a Stock
Option Agreement the form of which is annexed hereto as Schedule 1.
5. Except as amended herein, all of the terms and conditions of the
Employment Agreement and First Amendment shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this agreement as of
the date and year first above written.
BOZELL, JACOBS, ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇, INC.
By: /s/ Valentine ▇. ▇▇▇▇▇▇
-------------------------
Valentine ▇. ▇▇▇▇▇▇
/s/ ▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------
▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
9
THIRD AMENDMENT
THIRD AMENDMENT dated July 30, 1997 (the "Third Amendment") between BOZELL,
JACOBS, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, INC. (the "Company") and ▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (the
"Executive") to the Employment Agreement dated March 30, 1992, as amended by the
First Amendment dated as of June 30, 1993, and by the Second Amendment dated
February 3, 1995 (the employment agreement as thus amended being hereinafter the
"Employment Agreement").
WITNESSETH:
----------
WHEREAS, the Company and the Executive have entered into the Employment
Agreement, and
WHEREAS, the Company, Cherokee Acquisition Corporation and True North
Communications Inc. ("True North") have entered into an Agreement and Plan of
Merger, dated as of July 30, 1997 (the "Agreement and Plan of Merger"), pursuant
to which the Company will become a wholly-owned subsidiary of True North; and
WHEREAS, the Company and the Executive desire to amend the Employment
Agreement to extend the term of the Employment Agreement for an additional three
years from its expiration date without automatically extending the Executive's
service as Chairman and a member of the Board of the Company and of Bozell
Mexico, with such amendment to become effective upon the Effective Time (as such
term is defined in Section 1.2 of the Agreement and Plan of Merger).
NOW, THEREFORE, it is agreed that the Employment Agreement is hereby
amended in the following manner:
1. Effective Date. This Third Amendment shall become effective only if
Bozell, Jacobs, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Inc. becomes a wholly-owned subsidiary of
True North Communications Inc. pursuant to the Agreement and Plan of Merger,
dated as of July 30, 1997, among Bozell, Jacobs, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Inc.,
Cherokee Acquisition Corporation and True North Communications Inc. (the
"Agreement and Plan of Merger"), and all of the terms and conditions of this
Third Amendment shall become effective from and after the Effective Time (as
such term is defined in Section 1.2 of the Agreement and Plan of Merger).
2. Term of Agreement. Paragraph 2.1 of the Employment Agreement is hereby
amended to extend the Period of Full Time Employment, as defined in Paragraph
2.1 of the Employment Agreement, through March 31, 2001; provided, however, for
purposes of Paragraphs 3.1(a), 3.1(c)(i), and 3.1(c)(iii) of the Employment
Agreement, this Third Amendment shall not automatically extend ▇▇▇▇▇▇▇▇▇'▇
service as Chairman of the Board of Directors of the Corporation and such of the
Corporation's subsidiary companies as may be designated by the Board of
Directors of the Corporation, as a member of the Board of Directors of the
Corporation, or as a member and Chairman of the Board of Directors of Bozell
Mexico. The Consulting Period (as defined in Paragraph 2.2 of the Employment
Agreement) shall commence on April 1, 2001 and continue for four (4) years
thereafter, and the Consulting Fee (as defined in Paragraph 4.2 of the
Employment Agreement) shall be calculated and paid in accordance with Paragraph
4.2 of the Employment Agreement and
Paragraph 2 of the First Amendment to the Employment Agreement, dated as of June
30, 1993.
3. Effectiveness of Employment Agreement. All of the terms and conditions
of the Employment Agreement as amended by this Third Amendment shall remain in
full force and effect throughout the term hereof, as such term has been extended
hereby.
IN WITNESS WHEREOF, the parties hereto have executed this Third Amendment
on the day and year first above written.
BOZELL, JACOBS, ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇, INC.
By: ___________________________
Title: ________________________
ACCEPTED AND AGREED:
____________________
▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇