CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. THE LOCATIONS OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH ASTERISKS.
EXHIBIT 10.32
MC941121LD
Page 1 of 19
ADVERTISING/MARKETING AGREEMENT
WITNESSETH:
That in consideration of the agreements expressed herein, AT&T Communications, Inc. - Business Communications Services ("AT&T") having an office at 55 Corporate Drive, Bridgewater, New Jersey 08807 and Bronner Slosberg Humphrey Inc., a corporation of the Commonwealth of Massachusetts ("Agency"), having an office at 695 Atlantic Avenue, Boston, Massachusetts 02111, do hereby agree as follows:
ARTICLE 1 - AGENCY SERVICES
The Agency shall act as AT&T's advertising/marketing agency in the planning, preparing, and placing of such advertising/marketing, as may be requested by AT&T. The Agency shall perform other services as AT&T may request, as outlined in Article 30, subject to mutual written agreement of the parties.
Agency shall devote its best efforts on behalf of AT&T to farther AT&T's interests and shall reasonably endeavor in every proper way to make AT&T's advertising/marketing and associated efforts, for which the Agency is herein responsible, successful. To accomplish the foregoing, Agency specifically agrees that its services shall include but not be limited to the following:
A. Assigning and maintaining, with AT&T's consent executive strategic
input and review, an account management group, creative, systems and
fulfillment, research and analysis, teleservices marketing, partnership
marketing, production, media and traffic teams necessary to service the
AT&T account;
B. Provide direct marketing services, including the creation, production
and placement, insertion or distribution of direct mail and direct
response advertising.
C. Attending meetings, as requested by AT&T, with AT&T's staff and
periodic meetings with AT&T's top management;
D. Familiarizing itself with the business of AT&T, its products and
services, and the industry in which AT&T operates; and analyzing the
present and potential advertising/marketing opportunities for such
products and services so as to provide AT&T with marketing and
advertising counsel, including specific advertising/marketing
objectives, strategies and plans for reaching AT&T's business
objectives;
E. Preparing layouts, copy, artwork, scripts and storyboards and furnishing
other elements and materials to be used in finished advertisements for
all media and promotions to be used by AT&T;
MC941121LD
Page 2 of 19
F. Advising AT&T of the availability of all broadcast, publication and out-
of-home media which can appropriately be used to advertise AT&T products
and services; and developing media plans suitable for AT&T;
G. When publications media are to be used, arranging for insertions and
checking the advertisements in accordance with mutually acceptable
practices for date, appearance, position, size, quality and mechanical
reproduction;
H. When broadcast media are to be used, arranging for the programs,
commercials, time and talent, and plan; rendering all services necessary
for the proper and efficient use of the media; auditing the audience
share of broadcasts and verifying the broadcasts in accordance with
mutually acceptable practices for time, accuracy and other related
factors;
I. When outdoor posters, carcards, painted boards and other media are to
be used, arranging for displays and verifying in accordance with
mutually acceptable practices for date, appearance, position, site,
workmanship and mechanical reproduction;
J. Supervising the production of all finished advertising and marketing
material;
K. Negotiating, arranging and contracting for any special talent required,
with AT&T's approval, and for all photography, models, special effects,
layout, artwork and for all printing for use in the
advertising/promotions program; and making appropriate arrangements for
tax withholdings from talent;
L. Analyzing advertising, marketing and consumer research to aid AT&T in
developing advertising strategy and developing and evaluating AT&T's
advertising and media;
M. Conducting and analyzing competitive advertising tracking.
The above services shall be performed to the satisfaction of AT&T, shall be performed in accordance with the highest professional standards and shall be in accordance with such requirements or restrictions as may be lawfully imposed by governmental authority. Services not completed to the reasonable satisfaction of AT&T shall be reperformed at no cost to AT&T.
ARTICLE 2 - APPROVALS BEFORE COMMITMENT
No commitment of any kind shall be made by the Agency on behalf of AT&T unless specifically authorized in writing by AT&T, except as provided in Article 3 (Estimates).
The Agency shall submit concepts, scripts, print copy and other materials as early as possible to AT&T for internal review and required legal and technical approval, and when appropriate to the networks' Broadcast
MC941121LD
Page 3 of 19
Standards Departments, for specific approval prior to initial photographing, broadcasting, telecasting, or print production of commercials or print advertisements.
Agency shall contract with suppliers of media and such contracts shall provide that Agency shall be solely liable for payment of media for time and/or space costs incurred on behalf of AT&T from and after the time at which AT&T shall put Agency in funds for payment thereof, and that all billing shall be sent to the Agency.
ARTICLE 3 - ESTIMATES
The Agency shall furnish to AT&T, in writing and in advance, labor fee and a cost estimate of all expenditures in connection with all services and projects recommended by Agency or requested by AT&T. Prior to undertaking such projects or committing AT&T's funds, Agency shall obtain written authorization from AT&T. Agency shall furnish revisions of these estimates when changes in costs are anticipated in excess of ten percent (10%), plus or minus. Each estimate as approved by AT&T shall be executed by both parties. Approved estimates shall constitute the only authorization for the Agency to take any action, make any commitments or expend any money. In those situations where time or circumstances will not permit specific prior written authorization, commitments not to exceed $50,000 may be made with oral approval, provided such approval shall be confirmed by an approved written estimate no later than ten (10) working days thereafter.
ARTICLE 4 - DISCOUNTS
Agency shall obtain all prompt payment or other similar discounts available to it from media and other suppliers from which it makes purchases in the performance of the services hereunder. When Agency receives a cash discount, rebate, frequency discount, volume discount, promotional consideration, or other similar credit from such media or other suppliers, AT&T shall receive full allowance for each such amount, provided Agency, after timely notification, receives payment from AT&T within the applicable discount period.
ARTICLE 5 - ANNUAL REVIEW
An annual review shall take place during the first quarter (January - March) of each calendar year for the review of the previous year's performance, to be attended by appropriate AT&T management representatives and by Agency management and senior members of the AT&T agency group. The purpose of this review is for AT&T to present its evaluation of Agency performance to Agency and for Agency to present its evaluation of AT&T management to AT&T, for AT&T and Agency to mutually agree on any corrective action that may be needed and for AT&T and Agency to set annual objectives.
MC941121LD
Page 4 of 19
ARTICLE 6 - DEFINITIONS
A. "Gross Revenue" as used herein shall mean the total amount of compensation,
exclusive of pass-through costs, the Agency receives from AT&T for a
advertising/marketing services performed after reconciliation and any
rebates or supplementary fees are paid.
B. "Annual Salary" as used herein shall mean annual base salary, excluding
bonuses. It does not include employer paid FICA, insurance and medical
benefits its or payments into retirement plans.
C. "Direct Salaries" as used herein shall mean [***]
1. [***]
[***]
Total number of hours worked on Agency business means [***]
2. At AT&T's option, such option to be obtained by the Agency in writing
from AT&T, AT&T may elect to "buy-out" designated individuals. For those
individuals bought out by AT&T, AT&T shall be responsible for that
person's total annual base salary, excluding bonuses.
D. "Indirect Salaries" as used herein shall mean [***]
E. "All Other Expenses (ACE)" as used herein shall mean all other allowable
expenses allocable to AT&T and shall include:
1. Other salaries that can be directly allocable to the AT&T account that
are not included in direct salaries as defined in Section C above.
2. Payroll Related Expenses such as employer paid FICA, insurance and
medical benefits.
3. Employer payments into ERISA-approved retirement plans.
4. Indirect Costs which include indirect salaries, agency overhead costs
(e.g., space and facilities, professional fees and general corporate
expenses). Donations are not to be included in Indirect Costs.
CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. THE LOCATIONS OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH ASTERISKS.
MC941121LD
Page 5 of 19
For purposes of compensation computation as set forth in Article 7, All
Other Expenses are equal to [***]
F. "Direct Client Service Expenses" as used herein shall include out-of-pocket
expenses of Agency employees related to the AT&T account.
G. "Total Costs" as used herein shall equal [***]
H. "Profit Before Taxes" as used herein shall mean [***]
ARTICLE 7 - AGENCY COMPENSATION
A. Agency compensation for the calendar year shall be computed as follows:
1. During the last quarter of the previous calendar year, AT&T and the
Agency shall meet to determine:
a. The account staffing (including all functions as defined in Article
6, Paragraph C) for the AT&T account for the next calendar year.
b. The aggregate Direct Salaries, as defined herein, of the agreed upon
account staff.
2. The fee for the calendar year is then [***]
3. For 1994 the yearly fee is [***]. For each subsequent year, the
yearly fee shall be mutually agreed upon by the parties in writing and
attached as an amendment hereto.
B. [***] The specific criteria for evaluation shall be mutually agreed
upon by the parties. However, the yearly Agency evaluation as performed by
AT&T shall be at the sole discretion of AT&T.
1. At the end of each calendar year, the Agency shall submit to AT&T actual
Direct Salaries as defined herein, and a computation of Profit Before
Taxes according to the formula:
Profit = [***]
2. Based on the Agency evaluation as decided by AT&T, the Agency shall be
allowed:
a. [***] profit (expressed as a percent of Total Costs) if Agency
evaluation is rated "unacceptable."
CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. THE LOCATIONS OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH ASTERISKS.
MC941121LD
Page 6 of 19
b. [***] profit (expressed as a percent of Total Costs) if Agency
evaluation is rated "fully meets."
c. [***] profit (expressed as a percent of Total Costs) if
Agency evaluation is rated "exceeds."
d. [***] profit (expressed as a percent of Total Costs) if Agency
evaluation is rated "far exceeds."
Agency shall use its best effort to provide actual Direct Salaries, actual
All Other Expenses and Profit calculations within sixty (60) days of the end
of the calendar year but in no event later than ninety (90) days after the
end of the calendar year, so that reconciliation can be made. Agency agrees
to keep accurate books of account and records, in accordance with generally
accepted accounting principles, concerning all transactions hereunder,
including documentation supporting all charges and including out-of-pocket
expenses. An independent certified public accounting firm of the Agency's
choice and at the Agency's expense shall annually review the Agency's
books of account and records and shall certify that the bills to AT&T and
actual Direct Salaries and Profit computations are accurate and in
accordance with the definitions set forth in this Agreement. Verification of
Direct Salaries shall be performed as outlined in Schedule I, attached
hereto and made a part hereof. This audit privilege shall include access by
the independent auditors to individual payroll and personnel records. Said
books of account and records (excluding individual payroll and personnel
records) shall be preserved and maintained by Agency and kept available for
inspection by AT&T for at least three (3) years from the end of each
accounting period.
C. AT&T shall pay the Agency on dates to be mutually agreed upon by the
parties.
D. If for any reason Agency anticipates exceptional increases in Direct
Salaries during any quarter of the year, a meeting between Agency and AT&T
shall be called by the Agency to discuss what action should be taken while
still providing AT&T with needed services.
E. If for any reason AT&T expects the advertising/marketing budget to decline
or increase significantly above or below the anticipated budget for the
year, AT&T will notify Agency of this change as soon as possible.
F. AT&T agrees to reimburse the Agency directly for reasonable Direct Client
Service Expenses, including travel and living expenses authorized by AT&T
and incurred in connection with this Agreement. Reimbursement for travel and
living expenses shall be in accordance with the following guidelines:
1. Transportation
a. Airline Tickets - Agency will be reimbursed for air fare that has been
purchased at coach fare for domestic travel (business class is allowed
for international flights over six (6) hours in
CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. THE LOCATIONS OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH ASTERISKS.
MC941121LD
Page 7 of 19
duration). Agency employees may not request specific flights/carriers or
arrange/alter travel plans to obtain airline promotional benefits. Agency
employees traveling under first class status will be responsible for the
expense difference incurred. The ticket stub must be presented and relate
directly to the AT&T assignment. Reimbursement will not be made for the
purchase of travel insurance.
b. Reasonable taxi, bus, rail or car rental expenses will be reimbursed along
with associated receipts from tolls, tips, and parking fees will be
reimbursed by AT&T. Reimbursement for car rental expenses will be made upon
presentation of a car rental agreement/receipt. Car rentals must be
contracted at the lowest available rate and in the compact/subcompact
category where possible, unless special requirements dictate otherwise, in
which cases AT&T prior approval is required. For more than two people, a
mid-size rental is acceptable, however, names of the people must be
indicated on the car rental receipt.
AT&T will not reimburse car rental refueling charges.
Cab fares for "late nights" (after 8PM) are billable.
c. A mileage allowance, as approved yearly by the IRS, will be reimbursed to
Agency employees who use their own personal automobiles for services
provided on behalf of AT&T. Allowable mileage is determined by deducting the
normal commuting mileage.
When traveling, use public transportation as a first choice, personal car as
a second choice, and car rental as the last choice.
2. Lodging and Meals - Maximum of $150.00/day hotel allowance for domestic
travel, unless special requirements dictate otherwise, in which case AT&T
prior approval is required. Lower rates should be used if available. Agency
shall only invoice hotel expenses that are directly related to the work
performed under this Agreement. Expenses incurred at hotels for AT&T
business-related services (fax, typing, photocopying) are reimbursable.
AT&T will reimburse the Agency for meal expenses not exceeding $65.00 per
day, per person, which shall include room service and gratuities. Business
lunches are billable (only if an AT&T employee is present). Overtime meals
are not billable.
3. Business Calls - Business calls made on AT&T's behalf while staying
overnight are billable. Calls must list reason and person called and be on
the AT&T Network. Personal calls are not billable.
4. Personal Expenses - AT&T will not reimburse personal expenses of Agency
employees. If expenses of a personal nature (i.e., hotel/ship purchases,
alcoholic beverages, telephone and long
MC941121LD
Page 8 of 19
distance charges, in-room movies, sundry items, etc.) are charged
against the room, the amount will be deducted from the invoice presented
to AT&T. For trips which extend beyond five (5) days, reasonable valet
and laundry charges will be reimbursed. AT&T will reimburse reasonable
gratuities.
5. Magazines/Newspapers/Books are not billable unless specifically
requested, in writing, by AT&T.
E. Services provided by Agency employees - For services requested by AT&T,
the Agency shall provide, as a maximum, the following number of people:
Maximum Number of People
a. Location Shoots ...
*End of Preview*
Click the 'Add to Cart' button to download the complete and formatted agreement.