EXHIBIT 10.12
Severance Agreement
AGREEMENT made as of the 6th day of July, 1993 between DDB Needham
Worldwide Inc. ("DDB Needham"), a New York Corporation with its principal place
of business at 437 Madison Avenue, New York, New York, 10022, and John L.
Bernbach, an employee of DDB Needham, currently residing at 105 East 64th
Street, New York, NY 10021,
1. In the event the Executive's employment by DDB Needham is terminated by the
Executive or by DDB Needham other than for cause (as defined in paragraph 2
below), DDB Needham shall be obligated to pay to the Executive severance
compensation at a rate equal to the Executive's annual rate of base salary
as at the effective date of termination of executive's employment for the
number of months determined in accordance with the following schedule (the
"Severance Period"):
Years of Continuous Service Severance Period
--------------------------- ----------------
5 years or less ............................. 6 months
More than 5 but less than 10 years .......... 12 months
More than 10 years .......................... 15 months
Severance compensation payments shall commence in the calendar month
following the effective date of termination of Executive's employment,
shall be made on the same dates salary payments are made to employees of
the New York office of DDB Needham, and shall be subject to tax withholding
as required by law. The effective date of termination of the Executive's
employment shall be the end of the calendar month, and the party
terminating Executive's employment (i.e. DDB Needham or the Executive)
shall give the other party not less than three calendar months prior
written notice of such termination.
If the Executive's employment is terminated by DDB Needham other than for
cause, DDB Needham's obligation to make these severance compensation
payments shall be reduced, even up to the entire amount, by any
compensation earned during the Severance Period by the Executive from
rendering services of the same nature as services rendered by DDB Needham.
If the Executive's employment is terminated by the Executive, DDB Needham's
obligation to make these severance compensation payments shall be reduced,
even up to the entire amount, by any compensation earned by the Executive
during the Severance Period. The Executive agrees to give DDB Needham
prompt written notice of any and all such arrangements under which he earns
compensation during the Severance Period.
The Executive's entitlements under this Agreement supersede and replace and
hereby terminate entitlements he has or may hereafter have had to
compensation payments by reason of termination of employment under DDB
Needham's policies and procedures as in effect from time to time.
2. For the purposes of this Agreement, the term "cause" shall mean:
(a) Dishonesty affecting DDB Needham;
(b) Use of alcohol or illegal drugs, interfering with performance of the
obligations assigned to the Executive, continuing after warning;
(c) Conviction of an indictable offense or of any crime involving
dishonesty, moral turpitude, fraud or misrepresentation, or the
commission of any act which is in violation of any federal or state
law or regulation protecting the rights of employees;
(d) The commission of any willful or intentional act which could
reasonably be expected to injure the reputation, business or business
relationships of DDB Needham;
(e) Willful neglect or refusal to perform the duties assigned to the
Executive, continuing after warning.
3. Protection of Confidential Information/Return of Property
(a) The Executive acknowledges that his position with DDB Needham and his
rendering of services to DDB Needham's clients necessarily requires
and has and will continue to result in the disclosure to him of
confidential information and trade secrets of DDB Needham clients and
of DDB Needham (such as without limitation, marketing plans, budgets,
designs, client preferences and policies, identity of appropriate
personnel of client with sufficient authority to influence a shift in
suppliers, and the various planning and marketing techniques and
systems which DDB Needham has developed and many hereafter develop
which currently include ROI, R.O.I. PLUS, Media Aperture, Integrated
Communications, Personal Media Network, Blueprint for Advertising
Excellence, and the related methods of training employees to utilize
such systems and the Lifestyles database). The Executive agrees (i)
that he will not at any time disclose to anyone any confidential
information or trade secret of DDB Needham or any client of DDB
Needham or utilize such confidential information or trade secret for
his own benefit, or for the benefit of third parties, and (ii) that
all memoranda, notes, records, or other documents compiled by him or
made available to him during his employment concerning the business of
DDB Needham and/or its clients shall be the property of DDB Needham
and shall be delivered to DDB Needham on the termination of his
employment or at any other time upon request.
If the Executive should breach any of his agreements under this
subparagraph (a), DDB Needham's obligation to make severance
compensation payments hereunder shall forthwith terminate, but the
Executive shall not be obligated to refund such payments theretofore
made, if any, by DDB Needham. If the Executive should breach or is
about to breach his agreement under (i) of this subparagraph (a), DDB
Needham shall also have the right to have provisions of (i)
specifically enforced by any court having equity jurisdiction without
being required to post bond or other security and without having to
prove the inadequacy of the available remedies at law (Executive
hereby acknowledges that any such breach or threatened breach will
cause irreparable injury to DDB Needham for which money damages will
not provide an adequate remedy), and the right to take such other
actions available to it at law or in equity.
(b) Non-Interference
It is a condition of DDB Needham's obligation to make severance
compensation payments hereunder that before the expiration of the
Severance Period the Executive not engage, directly or indirectly, in
the following activities:
(i) attempt in any manner to solicit from any client of DDB Needham
(except on behalf of DDB Needham) business of the type performed
by DDB Needham, or persuade any client of DDB Needham to cease to
do business or reduce the amount of business which any such
client has customarily done or contemplates doing with DDB
Needham, whether or not the relationship between DDB Needham and
such client was originally established in whole or in part
through his efforts; or
(ii) render any services of any type performed by DDB Needham for its
clients to or for any client of DDB Needham unless rendered as an
employee or consultant of DDB Needham; or
(iii)attempt in any manner to employ or otherwise retain the services
of any person who is then or at any time during the preceding 12
month period was in the employ of DDB Needham.
If the Executive engages in any of the aforesaid activities before the
expiration of the Severance Period, DDB Needham's obligation to make
severance compensation payments hereunder shall forthwith terminate,
but the Executive shall not be obligated to refund such payments
theretofore made, if any, by DDB Needham.
(c) Consultative Services
In the event the Executive's employment by DDB Needham is terminated
by the Executive, a further condition of DDB Needham's obligation to
make severance compensation payments hereunder is that the Executive,
if not physically or mentally disabled, shall hold himself available
to render to DDB Needham advisory and consultative services with
respect to the business and operations of DDB Needham (i) on such
business days during the first calendar month following the effective
date of termination of his employment as may from time to time be
designated by DDB Needham to the Executive in a notice given not less
than one day before the day or the first day of the period specified
in said notice, and (ii) on up to ten business days during the second
calendar month following the effective date of his termination of
employment as may from time to time designated by DDB Needham to the
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Executive in a notice given not less than three days before the day or
the first day of the period specified in said notice. DDB Needham
shall reimburse the Executive for reasonable travel and living
expenses necessarily incurred by him while away from his principal
place of residence in the performance of such advisory and
consultative services. If the Executive fails to render such advisory
and consultative services when so requested DDB Needham's obligation
to make severance compensation payments hereunder shall forthwith
terminate, but the Executive shall not be obligated to refund such
payments theretofore made, if any, by DDB Needham.
(d) For purposes of this paragraph 3, "DDB Needham" includes subsidiaries
of DDB Needham, and the term "client" means any person or entity (i)
who is a client of DDB Needham on the date being the earlier if the
date on which DDB Needham's obligation to make severance compensation
payments hereunder terminates or the commencement date of the
Severance Period (the applicable date hereinafter called "the Critical
Date"), and (ii) who was a client of DDB Needham during the twelve
month period preceding the Critical Date, and (iii) who is a
prospective client to whom DDB Needham had made a presentation (or
similar offering of services) during the twelve month period preceding
the Critical Date.
(e) The provisions of this paragraph 3 shall survive the termination of
this Agreement.
4. DDB Needham shall not be obligated to make severance compensation payments
hereunder in the event of the Executive's death while in the employ of DDB
Needham. If the Executives death occurs during the Severance Period, DDB
Needham's obligation to make severance compensation payments hereunder
shall terminate on the last day of the calendar month in which death
occurs.
5. The Executive understands and agrees that this Agreement does not
constitute nor have the effect of an express or implied contract for
employment by DDB Needham for any fixed period, and that, subject to the
notice of requirements of paragraph 1 hereof, his employment with DDB
Needham is "at will".
6. This Agreement may not be orally canceled, changed, modified or amended,
and no cancellation, change, modification or amendment shall be effective
or binding, unless in writing and signed by both parties to this Agreement.
7. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without application of the principle of the
doctrine of conflict of laws.
8. This Agreement represents the entire Agreement between the Executive and
DDB Needham with respect to the subject matter hereof, and all prior
agreements (including without limitation the Employment Agreement dated
September 1, 1986, as amended by Letter Agreement dated February 11, 1988)
relating to compensation payments by reason of termination of the
Executive's employment, written or oral, are nullified and superseded
hereby, and neither party has relied on any representations of the other
party except as expressly set forth herein.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first above written.
John L. Bernbach
..................................
John L. Bernbach
DDB Needham Worldwide Inc.
Gerald Germain
By:................................
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