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                              EMPLOYMENT AGREEMENT


                AGREEMENT, made as of July 21, 2000 (the "Effective Date"), by
and between GREY GLOBAL GROUP INC. (the "Company"), a Delaware corporation
having its principal office at 777 Third Avenue, New York, New York 10017, and
STEVEN G. FELSHER (the "Executive"), an individual residing at 61 East 11th
Street, New York, New York 10003.

                WHEREAS, the Executive is presently employed as Vice Chairman,
Chief Financial Officer, Secretary and Treasurer of the Company; and

                WHEREAS, the Executive has agreed to continue employment with
the Company on the terms and conditions set forth herein;

                NOW, THEREFORE, in consideration of the foregoing and of the
respective agreements contained herein, the parties hereto, intending to be
legally bound, hereby agree as follows:

                  1. Term. The term of this Agreement (the "Term") shall com-
mence on the date hereof and shall continue until July 21, 2005; provided,
however, that on July 21, 2004 and each July 21 thereafter, the Term shall
automatically be extended for one additional year unless, not later than April
21 of such year, the Company or the Executive shall have given notice not to
extend the Term.

                  2. Employment. During the Term, the Company shall employ the
Executive, and the Executive shall serve the Company, (a) as a Vice Chairman and
as Chief Financial Officer and, unless otherwise determined by the Board of
Directors of the Company (the "Board"), as Secretary and Treasurer of the
Company and (b) in such other positions (but not less senior) of the Company to
which the Executive shall be appointed from time to time by the Board.

                  3. Duties. The Executive shall perform such services and
duties in the New York City metropolitan area (including reasonable travel
consistent with a person of his position) as shall be reasonably assigned or
delegated to him by the chief executive officer of the Company (the "Chief
Executive Officer") and/or the Board which shall, in any event, be consistent
with his responsibilities as a senior executive officer of the Company. During
his employment hereunder, the Executive shall devote full time to the
performance of his duties hereunder.
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                  4.       Compensation and Employee Benefits.

                           (a)      Salary. The Company shall pay to the
         Executive a salary at an annual rate no less than the annual rate in
         effect on the Effective Date, or such greater annual rate as may from
         time to time be fixed by the Board. The Company shall provide the
         Executive with a compensation review no less frequently than someone of
         his salary level and seniority in accordance with the policies of the
         Company in place at such time. Payments of salary shall made in such
         installments as are customary from time to time for executive officers
         of the Company.

                           (b)      Bonus Compensation. During the Term, the
         Executive shall participate in the Company's discretionary bonus plan
         and shall be entitled to such bonuses as may be awarded to the
         Executive in the sole discretion of the Board.

                           (c)      Section 162(m). The payment of any
         compensation to the Executive shall be deferred to the extent necessary
         to preserve the deductibility of such payment under Section 162(m) of
         the Internal Revenue Code of 1986, as amended (the "Code"). Any amounts
         so deferred shall accrue interest at such rate as may reasonably be
         determined by the Company, which rate shall be no less favorable than
         the rate applied to similar deferrals by other senior executives of the
         Company.

                           (d)      Employee Benefits.

                                    (i) During the Term, the Executive shall
                  continue to participate in the Company's compensation and
                  benefit plans and programs, in each instance to the extent
                  such plans and programs are available generally by their terms
                  to employees of his seniority, office, nature of
                  responsibilities and length of service.

                                    (ii) Provided the Executive shall have
                  performed his obligations under this Agreement and not
                  terminated his employment hereunder without Good Reason when
                  the Executive shall have attained the age of 60, the Company
                  shall continue to provide the Executive and his eligible
                  dependents with full health insurance benefits for the
                  remainder of the Executive's life on the same basis as such
                  benefits are available generally to senior executive officers
                  of the Company immediately prior to such termination (such
                  benefits, the


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                  "Lifetime Health Benefits"). Benefits otherwise receivable by
                  the Executive pursuant to this Section 4(d)(ii) shall be
                  reduced to the extent that benefits of the same type are
                  received by or made available to the Executive by a subsequent
                  employer at no additional cost to the Executive (the
                  "Subsequent Benefits"). To the extent that the Subsequent
                  Benefits are no longer made available to the Executive, the
                  Lifetime Health Benefits shall continue to be provided to the
                  Executive as set forth in the first sentence of this Section
                  4(d)(ii).

                           (e)      Pension. As additional consideration to the
         Executive for entering into this Agreement and for services heretofore
         performed and to be performed hereunder provided that the Executive has
         performed his obligations under this Agreement and not terminated his
         employment hereunder without Good Reason when the Executive shall
         have attained the age of 60 the Company shall pay to the Executive a
         pension of $100,000 per year from the Company for the balance of his
         life in equal monthly installments, commencing upon his termination of
         employment with the Company; provided, however, that such pension
         shall be reduced to the extent of any benefits received by the
         Executive under the Company's Senior Officer Pension Plan or any
         successor plan (such pension, as it may be reduced, the "Pension").
         Notwithstanding anything in this Agreement to the contrary and even
         after the Term, if, prior to the Executive's attainment of age 60, the
         Executive's employment is terminated (i) by the Company without Cause,
         (ii) by the Executive for Good Reason or (iii) due to the Executive's
         Disability (as defined in Section 5 hereof), then the Company shall
         make Pension payments to the Executive in equal monthly installments
         commencing on the Executive's attainment of age 60. Upon the
         Executive's death, the Company shall pay to the Executive's then
         spouse, if any, a lump sum cash payment equal to the present value of
         the Survivor Pension (as defined below); provided, however, that for
         purposes of the calculation of the Survivor Pension, such spouse's age
         shall be assumed to be the greater of her actual age or the age which
         is five years younger than the Executive's age on the date of his
         death. Such present value shall be determined using such interest rate
         and actuarial assumptions as may reasonably be determined by the Board.
         For purposes hereof, "Survivor Pension" shall mean a pension for such
         spouse's lifetime with an annual benefit equal to one-half of the
         annual Pension benefit.


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                           (f)      Equity Compensation.

                                    (i) On each of the first five anniversaries
                  of the Effective Date, so long as the Executive is employed by
                  the Company on each such date, the Company shall grant to the
                  Executive a non-qualified option to purchase 300 shares of the
                  Company's company stock (the "Company Stock") pursuant to
                  the Company's 1994 Stock Incentive Plan or any successor plan
                  thereto (the "Stock Plan") (such grants, the "Required Option
                  Grants"). Each Required Option Grant shall (A) have a ten-year
                  term, (B) have a per share exercise price equal to the fair
                  market value (as defined in the Stock Plan) of the Company
                  Stock on the date of grant, (C) subject to the provisions
                  hereof, become vested and exercisable at the rate of one-third
                  on each of the third, fourth and fifth anniversaries of the
                  dates on which each Required Option Grant is made, so long as
                  the Executive is employed by the Company on each such date,
                  (D) be equitably adjusted to reflect any change in the Company
                  Stock due to a stock split, stock dividend or otherwise and
                  (E) be otherwise subject to the terms of the Stock Plan.

                                    (ii) On each of the first five anniversaries
                  of the Effective Date, so long as the Executive is employed by
                  the Company on each such date, the Company shall grant to the
                  Executive 300 shares of restricted Company Stock (such grants,
                  the "Required Stock Grants"). Each Required Stock Grant shall
                  (A) have a per share purchase price of $1.00 (which shall be
                  adjusted in accordance with Section 4(f)(ii)(C)), (B) subject
                  to the provisions hereof, become vested at the rate of
                  one-third on each of the third, fourth and fifth anniversaries
                  of the date on which each Required Stock Grant is made, so
                  long as the Executive is employed by the Company on each such
                  date, (C) be equitably adjusted to reflect any change in the
                  Company Stock due to a stock split, stock dividend or
                  otherwise and (D) be otherwise subject to the terms of the
                  Stock Plan.

                           (g)      Expense Reimbursement. The Company shall
         reimburse the Executive for ordinary and reasonable business expenses
         incurred by the Executive on behalf of the Company in accordance with
         customary Company policies.


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                           (h)      Vacation. The Executive shall be entitled to
         the vacation time afforded to officers of his position and tenure, in
         accordance with the Company's general vacation policy.

                  5.  Termination.  The Executive's employment under this
Agreement may be terminated upon the occurrence of any one of the circumstances
described in Subsections (a), (b), (c), (d) or (e) of this Section 5:

                           (a)      Death. This Agreement shall terminate upon
         the Executive's death. Upon such termination, (i) the Company shall pay
         (A) to the estate of the Executive in a lump sum all amounts due to the
         Executive which were earned pursuant to Section 4 hereof prior to the
         Executive's death but not yet paid, such amount to be paid within 30
         days of such termination and (B) to Executive's then spouse. if any,
         the Pension in accordance with the provisions of Section 4(e) hereof,
         (ii) the Executive's account under the Company's 1998 Senior Management
         Incentive Plan (the "SMIP") shall become fully vested and the stock
         options and the restricted Common Stock granted pursuant to Section
         4(f) hereof shall vest in accordance with the Stock Plan.

                           (b)      Disability. The Company may terminate the
         Executive's employment hereunder at any time because of Disability and
         the Executive shall be paid under the terms of the Company's long term
         disability policy (if any) in effect from time to time. Upon such
         termination, (i) the Company shall also pay to the Executive (A) a lump
         sum amount equal to all amounts due to the Executive which were earned
         pursuant to Section 4 hereof prior to the termination of the
         Executive's employment hereunder because of the Executive's Disability
         but not yet paid, such amount to be paid within 30 days of such
         termination and (B) the Pension in accordance with the provisions of
         Section 4(e) hereof, (ii) the Executive's account under the SMIP shall
         become fully vested and the stock options and the restricted Common
         Stock granted pursuant to Section 4(f) hereof shall vest in accordance
         with the Stock Plan.. As used in this Agreement, "Disability" shall
         mean the Executive's physical or mental incapacity which, in the
         reasonable, good faith determination of the Board, renders him
         incapable of carrying out his duties under this Agreement for a period
         of 120 calendar days in any six month period.

                           (c)      Cause. The Company may terminate the
         Executive's employment hereunder for "Cause" in accordance with the
         procedure set forth in Subsection (f) of this Section 5. For purposes
         of this Agreement, "Cause"


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         shall be defined as follows: (i) the repeated and willful failure by
         the Executive, after written notice detailing such alleged failure,
         substantially to perform his duties hereunder (other than any such
         failure resulting from Disability), (ii) the willful engaging by the
         Executive in any other conduct designed to be injurious, in any
         material way, to the reputation, business or business relationships of
         the Company, (iii) the conviction (after exhausting all appeals,
         provided that the Executive is pursuing such appeals) of any felony or
         (iv) the knowing and willful violation, in any material way, by the
         Executive of the provisions of Sections 6 or 7 hereof. If the
         Executive's employment should be terminated by the Company for Cause,
         the Company shall have no further obligations to the Executive
         hereunder following the date of termination; provided, however, that
         the Company shall pay or provide all vested or earned rights, payments,
         benefits and entitlements then due and payable to the Executive,
         including, without limitation, all amounts due to the Executive which
         were earned pursuant to Section 4 hereof but not yet paid prior to the
         date of the Executive's termination of employment. The foregoing
         notwithstanding, in the event the Executive is convicted of a felony or
         a crime involving the Executive's fraud or misrepresentation, the
         Company may suspend the Executive's employment hereunder pending the
         pursuit of available appeals, but shall continue to pay salary and
         provide health insurance benefits of up to six months.

                           (d)      Without Good Reason. The Executive may
         terminate his employment hereunder without "Good Reason" (as defined in
         Section 5(e)) in accordance with the procedure set forth in Subsection
         (f) of this Section 5. If the Executive's employment should be
         terminated by the Executive without Good Reason, the Company shall have
         no further obligations to the Executive hereunder following the date
         of termination; provided, however, that the Company shall pay or
         provide all vested or earned rights, payments, benefits and
         entitlements then due and payable to the Executive, including, without
         limitation, all amounts due to the Executive which were earned pursuant
         to Section 4 hereof but not yet paid prior to the date of the
         Executive's termination of employment.

                           (e)      Termination by the Company Without Cause or
         by the Executive for Good Reason.

                                    (i) If (1) the Company terminates the
                  employment of the Executive without Cause or (2) the Executive
                  terminates his employment within 90 days following a breach,
                  in any material




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                  respect, by the Company of any provision of Sections 2, 3 or 4
                  hereof (such breach, "Good Reason"):

                                    (A)     the Company shall pay the Pension to
                                            the Executive in accordance with
                                            the provisions of Section 4(e)
                                            hereof;

                                    (B)     the Executive shall be deemed to be
                                            fully vested in the Lifetime Health
                                            Benefits, which benefits shall
                                            continue following termination of
                                            the Executive's employment;

                                    (C)     all the unvested portions of any
                                            rights or benefits of the Executive
                                            under any stock option or restricted
                                            stock plan of the Company or the
                                            Company's 1998 Senior Management
                                            Incentive Plan (or any successor
                                            plan) which the Executive has as of
                                            the date of such termination shall
                                            vest; and

                                    (D)     the Company shall pay to the
                                            Executive in a lump sum an amount
                                            equal to the higher of (i) 1.4 times
                                            the sum of (A) the highest annual
                                            rate of base salary in effect with
                                            respect to the Executive during the
                                            two years immediately prior to the
                                            Executive's termination of
                                            employment, (B) the highest annual
                                            bonus earned by the Executive with
                                            respect to the two years immediately
                                            prior to the Executive's termination
                                            of employment and (C) the highest
                                            allocation credited to the
                                            Executive's account under the
                                            Company's 1998 Senior Management
                                            Incentive Plan (or any successor
                                            plan) during the two years
                                            immediately prior to the
                                            Executive's termination of
                                            employment or (ii) the amounts which
                                            would have been paid during the
                                            remainder of the original Term
                                            assuming the amount referred to in
                                            (B) and (C) of this subsection.


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                           (f) Notice of Termination. Any termination of the
         Executive's employment (other than by reason of death) pursuant to
         this Section 5 shall be communicated from one party hereto to the other
         party hereto by a written notice of termination which shall state in
         detail the basis therefor under the applicable provisions hereof and,
         if curable, the actions reasonably to be taken by the Executive (or the
         Company, as the case may be) to cure such breach. Notwithstanding the
         foregoing, the Executive's employment shall not be terminated (i) for
         Cause without the Executive being given an opportunity (A) to be heard
         before the Board and (B) to cure within 15 days, if curable, the
         conditions constituting Cause; (ii) for Disability without the
         Executive (and/or his legal and/or medical representatives) being given
         an opportunity to be heard before the Board; (iii) by the Executive for
         Good Reason without the Company being given an opportunity to cure
         within 15 days, if curable, the conditions constituting Good Reason;
         (iv) by the Executive without Good Reason without the Executive giving
         the Company at least 15 days written notice; or (v) for any reason
         (other than death), without specific Board action.

                  6. Trade Secrets. The Executive acknowledges that from time to
time he will have knowledge of business matters and affairs of the Company and
its affiliates (collectively, the "Grey Group") not available to others, and
that the work to be performed by him will place him in a position of trust with
respect to the clients and business operations of the Grey Group. The Executive
acknowledges that such information is a valuable trade secret and is the sole
property of the Grey Group. Accordingly, the Executive, other than in the course
of performing his duties hereunder, shall not during the term of this Agreement,
or at any time thereafter (unless the same shall have otherwise become public
knowledge), reveal, divulge or otherwise make known any of said information to
any person other than an officer or employee of the Company or such other person
as the Board may designate.

                  7. Restrictive Covenants. So long as the Executive is employed
by the Company hereunder and for a period of one year following the Executive's
termination of employment for any reason, the Executive shall not:

                (a) persuade or attempt to persuade (either directly or
         indirectly) any client of the Grey Group to discontinue using any
         marketing, advertising, public relations or other services rendered by
         any member of the Grey Group to any such client;


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                  (b) except in the performance of his normal and proper job
         function for the Company, persuade or attempt to persuade (either
         directly or indirectly) any employee of any member of the Grey Group to
         terminate his or her employment with such member of the Grey Group; and

                  (c) directly or indirectly, whether as officer, director,
         employee, consultant, owner, investor, partner or stockholder, be
         engaged in or have any financial interest (other than an interest of
         less than 1% of the stock of a publicly traded company) in or
         affiliation with or render any services to or for any advertising
         agency or public relations agency, or any other person, firm or
         organization which is in competition with any member of the Grey Group.

If any court or other administrative body shall determine that any of the
provisions of this Section 7 are unenforceable because of the duration of the
provisions or the area or activities covered thereby, such court or
administrative body shall have the power to reduce the duration, area or
activities of such provisions and, in their reduced form, such provisions shall
then be enforceable and shall be enforced.

                  8. Notice. Any notice, advice or accounting to either party to
this Agreement shall be sufficient if in writing and sent by certified mail,
return receipt requested parties respective address hereinabove provided or to
such other address as may be designated in writing by such party from time to
time. A copy of any notice given to the Executive shall also be given to such
legal counsel designated by the Executive in writing to receive such a copy.
Notice given in the manner herein provided shall be deemed to be given when
personally delivered or, if mailed, three days after such mailing.

                  9. Waiver. No provisions of this Agreement shall be waived,
altered or amended, except in a writing signed by the parties hereto. Any such
waiver shall be limited to the particular instance and the particular time when
and for which it is given.

                  10. Specific Performance. If the Executive should fail to
comply with the terms of Sections 6 or 7 hereof, the Company may enforce any
right it may have by law, and, in addition, shall be entitled, as a matter of
right, to equitable or other injunctive relief against the Executive to prevent
his failing to comply with such


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provisions. Any rights under this Section 10 may be enforced in the appropriate
court in the Borough of Manhattan, City and State of New York.


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                  11. Entire Agreement. This Agreement constitutes the entire
agreement between the Company and the Executive with respect to the subject
matter hereof, supersedes any prior agreement(s) between the parties with
respect to the same subject matter, and may be amended, modified or changed only
by an agreement in writing signed by the parties hereto. Any provision of this
agreement which by its terms contemplates its survival beyond the Term of this
Agreement shall so survive.

                  12. Severability. The provisions of this Agreement are
severable and the invalidity of any one provision shall in no event affect the
validity of any other paragraph, clause or provision whatsoever.

                  13. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of New York,
without regard to its principles of conflicts of laws.

                  14. Assignment. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors,
assigns, heirs and personal representatives.

                  15. Withholding. The Company may withhold from any amounts
payable under this Agreement all federal, state and other taxes as shall be
legally required.


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         IN WITNESS WHEREOF, the parties hereto have executed this Agreement of
the day and year first above written.


                                          EXECUTIVE


                                          /s/ Steven G. Felsher
                                          -----------------------------------
                                          Steven G. Felsher

                                          Date:12/19/00
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                                          GREY GLOBAL GROUP INC.


                                          /s/ Edward H. Meyer
                                          ------------------------------------
                                          Edward H. Meyer
                                          Chairman and Chief Executive Officer

                                          Date:12/19/00
                                               ------------------------------


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