YOUNG & RUBICAM INC
DEFM14A, 2000-08-25
ADVERTISING AGENCIES
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<PAGE>
                            SCHEDULE 14A INFORMATION

                  Proxy Statement Pursuant to Section 14(a) of
            the Securities Exchange Act of 1934 (Amendment No.    )

<TABLE>
      <S>        <C>
      Filed by the Registrant /X/
      Filed by a Party other than the Registrant / /

      Check the appropriate box:
      / /        Preliminary Proxy Statement
      / /        Confidential, for Use of the Commission Only (as permitted
                 by Rule 14a-6(e)(2))
      /X/        Definitive Proxy Statement
      / /        Definitive Additional Materials
      / /        Soliciting Material Pursuant to Section240.14a-12

                       YOUNG & RUBICAM INC.
      -----------------------------------------------------------------------
                 (Name of Registrant as Specified In Its Charter)

      -----------------------------------------------------------------------
           (Name of Person(s) Filing Proxy Statement, if other than the
                                    Registrant)
</TABLE>

Payment of Filing Fee (Check the appropriate box):

<TABLE>
<S>        <C>  <C>
/ /        No fee required.
/ /        Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
           and 0-11.
           (1)  Title of each class of securities to which transaction
                applies:
                ----------------------------------------------------------
           (2)  Aggregate number of securities to which transaction
                applies:
                ----------------------------------------------------------
           (3)  Per unit price or other underlying value of transaction
                computed pursuant to Exchange Act Rule 0-11 (set forth the
                amount on which the filing fee is calculated and state how
                it was determined):
                ----------------------------------------------------------
           (4)  Proposed maximum aggregate value of transaction:
                ----------------------------------------------------------
           (5)  Total fee paid:
                ----------------------------------------------------------
/ /        Fee paid previously with preliminary materials.
/X/        Check box if any part of the fee is offset as provided by
           Exchange Act Rule 0-11(a)(2) and identify the filing for which
           the offsetting fee was paid previously. Identify the previous
           filing by registration statement number, or the Form or
           Schedule and the date of its filing.
           (1)  Amount Previously Paid:
                $1,424,097
                ----------------------------------------------------------
           (2)  Form, Schedule or Registration Statement No.:
                Registration Statement on Form F-4 (Reg. No. 333-40516)
                ----------------------------------------------------------
           (3)  Filing Party:
                WPP Group plc
                ----------------------------------------------------------
           (4)  Date Filed:
                6/30/00
                ----------------------------------------------------------
</TABLE>
<PAGE>
                                     [LOGO]


                               285 Madison Avenue
                         New York, New York 10017-6486



                                August 25, 2000


Fellow Stockholders:


    You are cordially invited to attend a special meeting of stockholders of
Young & Rubicam Inc. on September 28, 2000, at 10:00 a.m., New York time, at the
Ney Center for Executive Leadership at the headquarters of Y&R at 285 Madison
Avenue, Ground Floor, New York, New York.



    At the special meeting you will have the chance to vote on the proposed
merger between Y&R and WPP Group plc, an English public limited company. The
combination of Y&R with WPP will create one of the world's leading
communications services groups. If the merger is completed, Y&R will become a
subsidiary of WPP, and each of your shares of Y&R common stock will be converted
into the right to receive .835 of an American depositary share of WPP. Each WPP
ADS represents five WPP ordinary shares. The WPP ADSs are quoted on the Nasdaq
National Market under the symbol "WPPGY." At the time of the merger you may
choose to receive, instead of all or a portion of the WPP ADSs you are otherwise
entitled to receive, five ordinary shares of WPP for each WPP ADS. The WPP
ordinary shares trade on the London Stock Exchange under the symbol "WPP." On
August 24, 2000, the closing price of a WPP ADS on the Nasdaq National Market
was $63 1/2.


    We estimate that, in the merger and in connection with subsequent exercises
of Y&R options, which will become exercisable for WPP shares, WPP will issue
approximately 400 million ordinary shares, including ordinary shares underlying
ADSs, to Y&R stockholders and option holders. Those shares will represent
approximately one-third of the equity of WPP after the merger.

    YOUR BOARD OF DIRECTORS HAS DETERMINED THAT THE MERGER IS ADVISABLE AND IN
THE BEST INTERESTS OF Y&R AND ITS STOCKHOLDERS AND RECOMMENDS THAT ALL
STOCKHOLDERS VOTE "FOR" THE APPROVAL OF THE MERGER AT THE SPECIAL MEETING. THE
FINANCIAL ADVISORS TO Y&R, MORGAN STANLEY & CO. INCORPORATED AND BEAR STEARNS &
CO., INC., HAVE EACH DELIVERED ITS WRITTEN OPINION TO THE EFFECT THAT, AS OF THE
DATE OF THE MERGER AGREEMENT, THE EXCHANGE RATIO WAS FAIR FROM A FINANCIAL POINT
OF VIEW TO THE STOCKHOLDERS OF Y&R.


    The accompanying notice of meeting and proxy statement/prospectus explain
the proposed merger and provide specific information concerning the special
meeting. Please read these materials carefully. YOU SHOULD ALSO CAREFULLY
CONSIDER THE RISK FACTORS RELATING TO THE MERGER DESCRIBED BEGINNING ON PAGE 17.



    Your vote is very important. To be certain that your shares are voted at the
special meeting, please sign, date and return the enclosed proxy card as soon as
possible, whether or not you plan to attend in person. You can also vote your
shares by telephone by following the instructions on the accompanying proxy
card.


                                          Cordially,

                                          /s/ Thomas D. Bell, Jr.

                                          Thomas D. Bell, Jr.
                                          CHAIRMAN AND CHIEF EXECUTIVE OFFICER

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THE WPP ADSS OR ORDINARY SHARES DESCRIBED
IN THIS PROXY STATEMENT/PROSPECTUS OR DETERMINED IF THIS PROXY
STATEMENT/PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE. THIS PROXY STATEMENT/PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES IN ANY
JURISDICTION WHERE AN OFFER OR SOLICITATION WOULD BE ILLEGAL.


This proxy statement/prospectus is dated August 25, 2000 and was first mailed to
                      Y&R stockholders on August 28, 2000.

<PAGE>
[LOGO]


285 Madison Avenue
New York, New York 10017-6486



                   NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
                        To Be Held On September 28, 2000


To the Stockholders of
Young & Rubicam Inc.:


    Notice is hereby given that a special meeting of stockholders of Young &
Rubicam Inc. will be held on September 28, 2000, at 10:00 a.m., New York time,
at the Ney Center for Executive Leadership at the headquarters of Y&R at
285 Madison Avenue, Ground Floor, New York, New York.


    You are cordially invited to attend the special meeting. The purposes of the
special meeting are:


       - To consider and vote on a proposal to approve and adopt the Amended and
         Restated Agreement and Plan of Merger, dated as of May 11, 2000, among
         WPP Group plc, Young & Rubicam Inc., York Merger Corp., a wholly owned
         subsidiary of WPP, and York II Merger Corp., a wholly owned subsidiary
         of York Merger Corp., pursuant to which York II Merger Corp. will be
         merged with and into Y&R, and each share of Y&R common stock
         outstanding immediately prior to the merger will be converted into .835
         of an American depositary share of WPP, each of which represents five
         ordinary shares of WPP. At the time of the completion of the merger,
         Y&R stockholders will have the right to elect to receive WPP ordinary
         shares instead of all or a portion of the WPP ADSs they are otherwise
         entitled to receive.


       - To transact any other business as may properly come before the special
         meeting or any adjournment or postponement of the special meeting.

    These items of business are more fully described later in the document
attached to this notice.


    Only stockholders of record at the close of business on August 4, 2000 are
entitled to notice of and to vote at the special meeting and any adjournments of
the special meeting. You may vote in person or by proxy. Mailing your completed
proxy, or submitting a proxy by telephone, in advance of the meeting will not
prevent you from voting in person at the special meeting.


    It is important to you and to Y&R that your shares be voted on the proposed
merger.

                                          By order of the Board of Directors,

                                          /s/ Stephanie W. Abramson

                                          Stephanie W. Abramson
                                          Executive Vice President, General
                                          Counsel and Secretary

                                IMPORTANT NOTICE


    WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING IN PERSON, YOU ARE
URGED TO READ THE ATTACHED PROXY STATEMENT/PROSPECTUS CAREFULLY AND THEN SIGN,
DATE AND RETURN THE ACCOMPANYING PROXY CARD IN THE ENCLOSED POSTAGE-PAID
ENVELOPE OR SUBMIT A PROXY BY TELEPHONE BY FOLLOWING THE INSTRUCTIONS ON THE
ACCOMPANYING PROXY CARD. IF YOU LATER DESIRE TO REVOKE YOUR PROXY FOR ANY
REASON, YOU MAY DO SO IN THE MANNER SET FORTH IN THE PROXY STATEMENT/PROSPECTUS.

<PAGE>
                               TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                          PAGE
                                        --------
<S>                                     <C>
QUESTIONS AND ANSWERS ABOUT THE
  MERGER..............................      1
SUMMARY...............................      3
RISK FACTORS RELATING TO THE MERGER...     17
  The performance of the merged
    company will be affected by its
    ability to retain key personnel...     17
  We may lose existing clients as a
    result of the merger..............     17
  We may not realize the cost savings
    and other benefits we expect from
    the merger........................     17
  The market price of the WPP ADSs and
    ordinary shares may be subject to
    downward pressure for a period of
    time as a result of sales of Y&R
    common stock and WPP shares by Y&R
    stockholders......................     18
  The value of WPP ADSs you will
    receive in the merger depends on
    the market price of the WPP ADSs
    at the completion of the merger...     18
FORWARD-LOOKING STATEMENTS............     19
THE Y&R SPECIAL MEETING...............     21
  General.............................     21
  Record Date; Quorum.................     21
  Required Vote.......................     21
  Voting and Revocation of Proxies....     21
  Solicitation of Proxies.............     22
  Appraisal Rights....................     22
THE WPP EXTRAORDINARY GENERAL
  MEETING.............................     23
  Resolutions Proposed................     23
  Resolutions Required for the
    Merger............................     23
  Purpose of Resolution 1.............     23
  Purpose of Resolution 6.............     23
  Purpose of Resolution 7.............     24
  Purpose of Resolution 8.............     24
THE MERGER............................     25
  Background of the Merger............     25
  Reasons for the Merger..............     30
  Recommendation of the Y&R Board;
    Considerations of the Y&R Board...     32
  Considerations of the WPP Board.....     35
  Opinions of Y&R's Financial
    Advisors..........................     37
  Opinions of WPP's Financial
    Advisors..........................     50
  Plans for Y&R After the Merger......     61
</TABLE>



<TABLE>
<CAPTION>
                                          PAGE
                                        --------
<S>                                     <C>
  Interests of Directors and Officers
    of Y&R in the Merger..............     62
  Accounting Treatment................     66
  Regulatory Approvals................     66
  Other Effects of the Merger.........     67
  Directors and Management of WPP and
    Y&R Following the Merger..........     69
  Financial Information...............     69
  Dividends...........................     70
  Federal Securities Laws
    Consequences......................     71
MATERIAL TAX CONSEQUENCES.............     72
  General.............................     72
  United States Federal Income Tax
    Consequences to U.S. Holders of
    Y&R Common Stock..................     73
  United States Federal Income Tax
    Consequences to U.S. Holders of
    Employee Stock Options............     74
  Tax Opinion.........................     74
  United States Federal Income Tax
    Consequences of Owning WPP ADSs
    and Ordinary Shares...............     74
  United Kingdom Tax Consequences of
    Owning WPP ADSs and Ordinary
    Shares............................     77
THE MERGER AGREEMENT..................     79
  The Merger..........................     79
  Effective Time and Timing of
    Closing...........................     79
  Consideration to be Received in the
    Merger............................     79
  Exchange of Certificates
    Representing Y&R Common Stock.....     79
  Representations and Warranties......     81
  Conduct of Business Pending the
    Merger; Other Actions.............     82
  Offers for Alternative
    Transactions......................     83
  Agreement Regarding Recommendations
    to Shareholders...................     84
  Stock Options and Other Employee
    Benefits..........................     84
  Indemnification and Insurance.......     86
  Directors and Officers of WPP and
    Y&R Following the Merger..........     86
  Headquarters........................     87
  Changes to Terms of WPP ADSs........     87
  Conditions..........................     87
  Termination and Effects of
    Termination.......................     90
  Expenses............................     92
</TABLE>


                                       i
<PAGE>


<TABLE>
<CAPTION>
                                          PAGE
                                        --------
<S>                                     <C>
  Amendment; Waiver...................     92
THE SALE RESTRICTION AGREEMENTS.......     93
  Restrictions on the Transfer of
    Shares............................     93
  Noncompetition Provisions of the
    Sale Restriction Agreements.......     94
  Damages and Expenses................     94
EXCHANGE RATES........................     95
MARKET PRICE AND DIVIDEND DATA........     96
  Market Prices.......................     96
  Dividend Data.......................     97
DESCRIPTION OF WPP....................     99
DESCRIPTION OF Y&R....................     99
UNAUDITED PRO FORMA CONDENSED
  CONSOLIDATED FINANCIAL
  INFORMATION.........................    100
DESCRIPTION OF WPP ORDINARY SHARES....    114
  General.............................    114
  Dividends...........................    114
  Voting Rights.......................    115
  Liquidation Rights..................    115
  Preemptive Rights and New Issues of
    Shares............................    116
  Disclosure of Interests in Shares...    116
  Changes in Capital..................    116
  Transfer of Shares..................    117
  General Meetings and Notices........    117
  Liability of Directors and
    Officers..........................    117
  Registrar...........................    117
DESCRIPTION OF WPP AMERICAN DEPOSITARY
  SHARES..............................    118
  General.............................    118
  Share Dividends and Other
    Distributions.....................    118
  Deposit, Withdrawal and
    Cancellation......................    119
  Voting Rights.......................    120
  Fees and Expenses...................    120
  Payment of Taxes....................    121
  Reclassifications, Recapitalizations
    and Mergers.......................    121
  Disclosure of Interests.............    121
  Amendment and Termination...........    121
  ADS Holder's Right to Receive the
    Ordinary Shares Underlying the
    ADSs..............................    122
  Limitations on Obligations and
    Liability to ADS Holders..........    122
</TABLE>



<TABLE>
<CAPTION>
                                          PAGE
                                        --------
<S>                                     <C>
  Requirements for Depositary
    Actions...........................    123
COMPARISON OF RIGHTS OF Y&R
  STOCKHOLDERS AND WPP SHARE OWNERS...    124
  Voting Rights.......................    124
  Action by Written Consent...........    126
  Shareholder Proposals and
    Shareholder Nominations of
    Directors.........................    127
  Sources and Payment of Dividends....    127
  Rights of Purchase and Redemption...    128
  Meetings of Shareholders............    129
  Special Meetings of Shareholders....    129
  Appraisal Rights....................    131
  Preemptive Rights...................    132
  Amendment of Governing Instruments..    133
  Preference Stock....................    134
  Stock Class Rights..................    135
  Shareholders' Votes on Certain
    Transactions......................    136
  Rights of Inspection................    137
  Standard of Conduct for Directors...    138
  Classification of the Board of
    Directors.........................    139
  Removal of Directors................    139
  Vacancies on the Board of
    Directors.........................    140
  Liability of Directors and
    Officers..........................    141
  Indemnification of Directors and
    Officers..........................    141
  Shareholders' Suits.................    142
  Provisions Relating to Share
    Acquisitions......................    143
  Takeover Related Provisions.........    144
  Disclosure of Interests.............    145
  Limitation on Enforceability of
    Civil Liabilities Under U.S.
    Federal Securities Laws...........    147
  Proxy Statements and Reports........    148
  Reporting Requirements..............    149
DIRECTORS AND MANAGEMENT OF WPP
  FOLLOWING THE MERGER................    150
  Directors and Executive Officers....    150
  Continuing WPP Directors............    150
  Y&R Designees.......................    152
  Responsibility and Terms of Members
    of the Board of Directors.........    152
  Meetings of the Board of Directors
    of WPP; Committees of the Board...    153
  Share and Option Ownership of
    Directors and Five Percent Share
    Owners............................    153
</TABLE>


                                       ii
<PAGE>


<TABLE>
<CAPTION>
                                          PAGE
                                        --------
<S>                                     <C>
FEES AND EXPENSES.....................    156
VALIDITY OF SECURITIES................    156
EXPERTS...............................    157
U.K. LISTING PARTICULARS AND
  CIRCULAR............................    157
</TABLE>



<TABLE>
<CAPTION>
                                          PAGE
                                        --------
<S>                                     <C>
STOCKHOLDER PROPOSALS FOR THE 2001
  ANNUAL MEETING OF Y&R
  STOCKHOLDERS........................    157

</TABLE>



<TABLE>
<S>                   <C>                                                           <C>
Appendix A --         Amended and Restated Agreement and Plan of Merger, dated as
                      of May 11, 2000, by and among WPP Group plc, Young &
                      Rubicam Inc., York Merger Corp. and York II Merger Corp.....  A-1
Appendix B --         Opinion of Morgan Stanley & Co. Incorporated................  B-1
Appendix C --         Opinion of Bear, Stearns & Co. Inc..........................  C-1
Appendix D --         Opinion of Goldman, Sachs & Co..............................  D-1
Appendix E --         Opinion of Merrill Lynch International......................  E-1
Appendix F --         Summary Listing Particulars.................................  F-1
</TABLE>


                                      iii
<PAGE>
    THIS DOCUMENT INCORPORATES IMPORTANT BUSINESS AND FINANCIAL INFORMATION
ABOUT WPP AND Y&R FROM DOCUMENTS FILED WITH THE SEC THAT ARE NOT INCLUDED IN OR
DELIVERED WITH THIS DOCUMENT. WPP WILL PROVIDE YOU WITH COPIES OF THIS
INFORMATION RELATING TO WPP, WITHOUT CHARGE, UPON WRITTEN OR ORAL REQUEST TO:

                                 WPP GROUP PLC
                            C/O WPP GROUP USA, INC.
                                WORLDWIDE PLAZA
                              309 WEST 49TH STREET
                            NEW YORK, NEW YORK 10019
                            ATTENTION: ANDREW SCOTT
                        TELEPHONE NUMBER: (212) 632-2200


                                       OR



                                 WPP GROUP PLC
                                 27 FARM STREET
                                 LONDON WIX 6RD
                                    ENGLAND
                         ATTENTION: ANDREA HARRIS, ESQ.
                    TELEPHONE NUMBER: (011 44) 20 7408 2204


Y&R WILL PROVIDE YOU WITH COPIES OF THIS INFORMATION RELATING TO Y&R, WITHOUT
CHARGE, UPON WRITTEN OR ORAL REQUEST TO:

                              YOUNG & RUBICAM INC.
                               285 MADISON AVENUE
                            NEW YORK, NEW YORK 10017
                         ATTENTION: INVESTOR RELATIONS
                        TELEPHONE NUMBER: (212) 210-3000


    IN ORDER TO RECEIVE TIMELY DELIVERY OF THE DOCUMENTS IN ADVANCE OF THE Y&R
SPECIAL MEETING, YOU SHOULD MAKE YOUR REQUEST NO LATER THAN SEPTEMBER 21, 2000.


    IN ADDITION, IF YOU HAVE QUESTIONS ABOUT THE MERGER, YOU MAY CONTACT:


                            MACKENZIE PARTNERS, INC.
                                156 FIFTH AVENUE
                               NEW YORK, NY 10010
                                 (800) 322-2885


                                       iv
<PAGE>
                     QUESTIONS AND ANSWERS ABOUT THE MERGER

Q. WHY ARE WPP AND Y&R PROPOSING TO MERGE?


A.The boards of directors of WPP and Y&R believe that the combination of their
  two companies will create a company well positioned to establish a world class
  standard of excellence in global communications services. The boards of
  directors of WPP and Y&R believe that the combined company will be capable of
  generating substantially more long-term share owner value than could be
  achieved by either of our companies individually. Specifically, we believe the
  combined company will:



  - be positioned to offer its clients a broader and deeper range of products
    and services across all areas of communications services;



  - offer its clients the widest choice of professional talent;



  - consist of preeminent global advertising and marketing services companies,
    including Ogilvy & Mather Worldwide, J. Walter Thompson, Y&R Advertising,
    MindShare, The Media Edge, OglivyOne Worldwide, impiric, Hill and Knowlton,
    Burson-Marsteller, Cohn & Wolfe, CommonHealth, Sudler & Hennessey,
    Enterprise IG, KnowledgeBase Marketing, Robinson Lerer & Montgomery, Y&R 2.1
    and Landor Associates;



  - be the leading information and consultancy company in the world;



  - be firmly established as one of the top three advertising and media
    investment management companies in every major geographic region of the
    world, based on 1999 gross income;



  - have one of the broadest portfolios of Internet investments in the industry,
    allowing it to realize revenue from spending by Internet companies and be
    the industry leader in providing on-line advertising and marketing services;
    and



  - offer its employees the broadest range of opportunities in the industry for
    professional excellence, career development and training.



   Moreover, we have quantified to date estimated pre-tax annual cost savings of
   $30 million that we expect to result from the merger by the end of 2001.


Q. WHAT WILL Y&R STOCKHOLDERS RECEIVE IN THE MERGER?

A. You will receive .835 of a WPP ADS for each share of Y&R common stock you
   own. If you prefer, you may elect to receive five WPP ordinary shares instead
   of each WPP ADS you are otherwise entitled to receive.

Q. WHAT IS A WPP ADS?

A. A WPP ADS is an American depositary share that represents five ordinary
   shares of WPP. The WPP ADSs were created to allow U.S. share owners to more
   easily hold and trade interests in WPP on U.S. markets. Citibank, N.A., the
   depositary for the WPP ADSs, will issue the WPP ADSs you will receive in the
   merger and Citibank, N.A.--London Branch, the custodian for the WPP ADSs,
   will hold the WPP ordinary shares represented by those ADSs on behalf of the
   depositary.

Q. WHAT DO I NEED TO DO TO ELECT TO RECEIVE WPP ORDINARY SHARES?

A. You will receive WPP ADSs for your Y&R common stock unless you elect at the
   time of the merger to receive WPP ordinary shares instead. You will receive
   instructions for making this election after the merger is completed. If you
   own shares of Y&R common stock in "street name" through a bank, broker or
   other financial institution, you should seek advice from the financial
   institution concerning making an election to receive WPP ordinary shares.

  Choosing WPP ordinary shares will relieve Y&R of its obligation to pay, under
  current U.K. tax laws, a 1.5% stamp tax on the value of the WPP ordinary
  shares underlying the WPP ADSs. Therefore, there is an advantage to the
  combined company if you elect to receive ordinary shares. However, you should
  consider carefully the advantages and disadvantages to you of receiving WPP
  ADSs before you make this election.

                                       1
<PAGE>
Q. WHAT ARE THE ADVANTAGES AND DISADVANTAGES OF RECEIVING WPP ADSS RATHER THAN
   WPP ORDINARY SHARES?

A. Non-institutional holders of Y&R common stock may prefer to receive WPP ADSs
   instead of WPP ordinary shares for the following reasons:

  - dividends on WPP ADSs are paid in U.S. dollars, whereas dividends on WPP
    ordinary shares are paid in U.K. pounds sterling;

  - WPP ADSs trade in the U.S. on the Nasdaq National Market, whereas WPP
    ordinary shares do not trade on any U.S. market; and

  - unlike WPP ordinary shares, trading of WPP ADSs in the U.S. is not subject
    to a .5% stamp tax on the value of traded shares that under current U.K. tax
    law is imposed on purchasers of WPP ordinary shares.

  You should, however, be aware that the trading volume of the WPP ordinary
  shares on the London Stock Exchange has historically been greater than the
  trading volume of the WPP ADSs on the Nasdaq National Market. If this
  continues, it may be easier for a holder to sell WPP ordinary shares on the
  London Stock Exchange than to sell WPP ADSs on the Nasdaq National Market. In
  addition, various fees are payable by holders of WPP ADSs to the depositary in
  connection with transactions, including the issuance or surrender of the
  depositary receipts representing the ADSs.


  The rights of a holder of WPP ADSs are also different from the rights of a
  holder of WPP ordinary shares with respect to various other matters. We
  explain these differences under "Description of WPP American Depositary
  Shares" beginning on page 118 and under "Description of WPP Ordinary Shares"
  beginning on page 114.


Q. WHAT ARE THE TAX CONSEQUENCES TO Y&R STOCKHOLDERS OF THE MERGER?

A. The exchange by U.S. holders of Y&R common stock for WPP ADSs, including any
   election to instead receive WPP ordinary shares, will generally be tax-free,
   except for any gains with respect to cash received upon the sale of shares
   representing the fractional share interests in WPP shares that Y&R
   stockholders are otherwise entitled to receive. Special rules apply, however,
   to any U.S. holder that is a five-percent transferee holder with respect to
   WPP immediately after the merger.

Q. WHEN IS THE MERGER EXPECTED TO BE COMPLETED?

A. We expect to complete the merger in the fall of 2000. Because the merger is
   subject to shareholder and governmental approvals, we cannot predict the
   exact timing of its completion.

Q. SHOULD I SEND IN MY STOCK CERTIFICATES NOW?

A. No. After we complete the merger, we will send you instructions explaining
   how to exchange your Y&R stock certificates for depositary receipts
   representing WPP ADSs or, if you elect, certificates for WPP ordinary shares.

Q. HOW DO I VOTE?

A. You may choose one of the following ways to cast your vote:

  - by completing the accompanying proxy card and returning it in the enclosed
    postage-paid envelope;


  - by telephone as outlined on the accompanying proxy card; or


  - by appearing and voting in person at the special meeting.

  If your shares are held in "street name," i.e., in the name of a bank, broker
  or other financial institution, you must either direct the financial
  institution as to how to vote your shares or obtain a proxy from the financial
  institution to vote at the special meeting.

Q. MAY I CHANGE MY VOTE?


A. Yes. You may withdraw your proxy or change your vote by notifying Y&R in
   writing, by submitting a new properly completed and signed proxy to Y&R by
   mail, by telephone or by voting in person at the Y&R special meeting.


                                       2
<PAGE>
                                    SUMMARY

    THIS SUMMARY HIGHLIGHTS SELECTED INFORMATION FROM THIS PROXY
STATEMENT/PROSPECTUS. IT DOES NOT CONTAIN ALL OF THE INFORMATION THAT IS
IMPORTANT TO YOU. YOU SHOULD READ CAREFULLY THE ENTIRE PROXY STATEMENT/
PROSPECTUS AND THE ADDITIONAL DOCUMENTS REFERRED TO IN THIS PROXY
STATEMENT/PROSPECTUS TO FULLY UNDERSTAND THE MERGER.


THE COMPANIES (SEE PAGE 99)


                                 WPP GROUP PLC
                                 27 Farm Street
                                 London WIX 6RD
                                    England
                             (011 44) 20 7408 2204

    WPP, an English company, is one of the leading communications services
companies in the world. Through its 70 operating companies, it provides clients
with advertising, media investment management, information and consultancy,
public relations and public affairs, branding and identity, healthcare and
specialist communications services. Headquartered in London, England, WPP,
together with its subsidiaries and associates, employs approximately 39,000
people in 950 offices in 92 countries around the world.

                              YOUNG & RUBICAM INC.
                               285 Madison Avenue
                               New York, NY 10017
                                 (212) 210-3000

    Y&R is a world leader in marketing and communications services, operating
through a network of preeminent companies in advertising, perception management
and public relations, brand identity and design consultancy, database marketing,
customer relationship management and healthcare communications. Headquartered in
New York, Y&R, together with its subsidiaries, employs approximately 15,000
people in over 300 offices in over 70 countries around the world.

THE MERGER (SEE PAGE 25)


    In the merger, an indirect wholly owned subsidiary of WPP will merge with
and into Y&R and, as a result, Y&R will become an indirect wholly owned
subsidiary of WPP. In the merger and in connection with subsequent exercises of
Y&R options, which will become exercisable for WPP shares, WPP will issue
approximately 400 million ordinary shares with an approximate value of
$5.08 billion, based on the closing price on the Nasdaq National Market of a WPP
ADS on August 24, 2000 of $63 1/2.


RECOMMENDATION OF Y&R'S BOARD OF DIRECTORS (SEE PAGE 32)

    The Y&R board of directors has determined that the merger agreement and the
merger are in the best interests of Y&R and its stockholders and has unanimously
approved and declared advisable the merger and the merger agreement. The board
of directors of Y&R recommends that Y&R stockholders vote "FOR" approval and
adoption of the merger agreement at the special meeting.


RECORD DATE FOR VOTING; VOTE REQUIRED OF Y&R STOCKHOLDERS (SEE PAGE 21)



    You can vote at the special meeting of Y&R stockholders if you owned Y&R
common stock at the close of business on August 4, 2000.


    Approval and adoption of the merger agreement requires the affirmative vote
of holders of a majority of the outstanding shares of Y&R common stock.


    As of the record date, August 4, 2000, Y&R had 73,298,883 shares of common
stock outstanding. Each share of Y&R common stock outstanding on the record date
entitles its holder to one vote. As of the record date, the directors and
executive officers of Y&R and their affiliates held common stock representing
approximately 1.6% of all the outstanding Y&R common stock.



VOTE REQUIRED OF WPP SHARE OWNERS (SEE PAGE 23)


    At an extraordinary general meeting of WPP's share owners, resolutions will
be proposed:

- to approve the merger and other related matters; and


- to elect, as additional directors of WPP, four of the current members of Y&R's
  board chosen by Y&R. If elected, these persons will


                                       3
<PAGE>
  join WPP's board effective on completion of the merger.


OPINIONS OF Y&R'S FINANCIAL ADVISORS (SEE PAGE 37)


    Morgan Stanley & Co. Incorporated and Bear, Stearns & Co. Inc., as
co-financial advisors of Y&R, have delivered separate written opinions to the
board of directors of Y&R, each to the effect that, as of the date of the merger
agreement, the exchange ratio was fair from a financial point of view to the Y&R
stockholders. We have attached these opinions as Appendices B and C to this
proxy statement/prospectus. You are urged to read them carefully.

OPINIONS OF WPP'S FINANCIAL ADVISORS (SEE PAGE 50)

    Goldman, Sachs & Co. and Merrill Lynch International have delivered separate
written opinions, dated May 11, 2000, to the board of directors of WPP, each to
the effect that, as of that date, the exchange ratio was fair from a financial
point of view to WPP. The opinions of Goldman Sachs and Merrill Lynch do not
constitute recommendations as to how any holder of WPP ordinary shares or WPP
ADSs should vote with respect to the merger.

    THE FULL TEXTS OF THE SEPARATE WRITTEN OPINIONS OF GOLDMAN SACHS AND MERRILL
LYNCH, EACH DATED MAY 11, 2000 AND EACH OF WHICH SETS FORTH ASSUMPTIONS MADE,
MATTERS CONSIDERED AND QUALIFICATIONS AND LIMITATIONS ON THE REVIEW UNDERTAKEN
IN CONNECTION WITH THAT OPINION, ARE ATTACHED AS APPENDICES D AND E TO THIS
PROXY STATEMENT/PROSPECTUS AND INCORPORATED BY REFERENCE INTO THIS PROXY
STATEMENT/PROSPECTUS. YOU SHOULD READ THESE OPINIONS IN THEIR ENTIRETY.


DIRECTORS AND MANAGEMENT OF WPP AND Y&R FOLLOWING THE MERGER (SEE PAGE 150)



    When we complete the merger, the board of directors of WPP will consist of
16 directors. Four of those directors will be current members of Y&R's board
chosen by Y&R and twelve will be persons who are members of WPP's board. After
we complete the merger, the former Y&R directors on the WPP board will have the
right to designate an additional person who is not a U.S. citizen or resident
and is otherwise reasonably acceptable to WPP's board of directors to be
appointed as a director of WPP.


    Sir Martin Sorrell, the chief executive of WPP, will continue to be the
chief executive of WPP after the merger. Upon completion of the merger, Thomas
D. Bell, Jr., the chairman and chief executive officer of Y&R, will serve as
chairman of Y&R, and Michael J. Dolan, a vice chairman, president and chief
operating officer of Y&R, will serve as president and chief executive officer of
Y&R.



TRANSITION COMMITTEE (SEE PAGE 61)


    Until the first anniversary of the completion of the merger, a four person
transition committee consisting of Mr. Bell, as chairman, Sir Martin Sorrell,
Mr. Dolan and Paul W. G. Richardson, WPP's finance director, will oversee the
transition of Y&R into the WPP group of companies.

    WPP has agreed that, during the first year after the completion of the
merger, it will not combine any of Y&R's existing material businesses with any
other business of WPP, transfer any of Y&R's businesses to WPP or any of its
subsidiaries or offer any Y&R employees employment with the WPP group without
the approval of at least a majority of the members of the transition committee.


EMPLOYMENT AGREEMENTS (SEE PAGE 61)


    In connection with the merger agreement, 22 senior executives and other key
employees of Y&R, including Mr. Dolan and Edward H. Vick, worldwide chairman and
chief executive officer of Y&R Advertising, have entered into employment
agreements with Y&R. These employment agreements, except for the agreements with
Messrs. Dolan and Vick, provide for a two-year term of employment beginning upon
completion of the merger. The agreements with Messrs. Dolan and Vick provide for
a four-year term beginning upon completion of the merger.

    Each of these employment agreements contains a non-competition provision and
a provision prohibiting the executives from soliciting Y&R employees for
employment elsewhere. Both of these provisions would apply for one year after
the executive or key employee's employment with Y&R is terminated.

                                       4
<PAGE>

SALE RESTRICTION AGREEMENTS (SEE PAGE 93)



    A group of senior Y&R executives has executed sale restriction agreements in
which they have agreed not to sell two-thirds, or a total of approximately
6,000,000 shares, of their Y&R common stock and options (and, following
completion of the merger, the WPP shares and options into which those shares and
options will be converted in the merger) for the one-year period ending May 11,
2001. Peter A. Georgescu, the former chairman and chief executive officer of
Y&R, has agreed not to sell 200,000 of his shares of Y&R common stock before
completion of the merger and, after completion of the merger, a number of WPP
shares with a value equal to $10 million. These restrictions will terminate with
respect to any senior executive whom Y&R or WPP terminates without cause or who
leaves Y&R or WPP for good reason after the merger is completed. These
restrictions will terminate with respect to all senior Y&R executives and
Mr. Georgescu if WPP does not comply with its obligations described above under
"--Transition Committee."


    Each of these sale restriction agreements, other than the agreement with Mr.
Georgescu, contains a non-competition provision and a provision prohibiting the
executive from soliciting Y&R employees for employment elsewhere. Both of these
provisions would apply for one year after the executive's employment with Y&R is
terminated.


INTERESTS OF MEMBERS OF THE Y&R BOARD AND MANAGEMENT (SEE PAGE 62)


    When considering the Y&R board's recommendation that you vote in favor of
the merger, you should be aware that the directors and executive officers of Y&R
may have interests in the merger that are different from, or in addition to,
your interest as a Y&R stockholder. For example, if the merger is completed,
substantially all unvested stock options previously granted by Y&R to its
directors and executive officers will become fully vested and exercisable and
certain awards outstanding under Y&R's performance share plan will be paid in
cash as if all performance targets were achieved.


    In addition, under Y&R's change in control severance plan, if the employment
of an executive officer of Y&R is terminated by Y&R without cause or by the
officer for good reason within two years of completion of the merger, the
executive will be entitled to a cash severance payment and continued benefits.
For senior executives and key employees who have entered into the employment
agreements with Y&R that we describe above under "--Employment Agreements," the
change of control provisions of those agreements will supercede their rights
under Y&R's change in control severance plan.



    Alan D. Schwartz, a director of Y&R, is an executive vice president and head
of investment banking at Bear, Stearns & Co. Inc. Bear Stearns acted as
co-financial advisor of Y&R in connection with the merger and will receive a fee
from Y&R for acting in that capacity.



RISK FACTORS (SEE PAGE 17)


    In determining whether to vote to approve and adopt the merger agreement,
you should consider carefully the risk factors described in this proxy
statement/prospectus, including the risks that:

- key employees, including those having relationships with clients, may
  terminate their employment in connection with or after the merger;

- the combined company may lose existing clients as a result of the merger;

- cost savings and other benefits expected from the merger may not be realized;


- sales of Y&R common stock and WPP shares by Y&R stockholders, including sales
  by stockholders not permitted to hold shares of a non-U.S. company and sales
  as a result of Y&R's removal from the S&P 500 Index, may adversely affect the
  market price of WPP ADSs and ordinary shares; and


- the value of WPP ADSs and ordinary shares received in connection with the
  merger may fluctuate considerably.


COMPARISON OF RIGHTS OF HOLDERS OF WPP SHARES WITH HOLDERS OF Y&R COMMON STOCK
(SEE PAGE 124)


    As a result of the merger, holders of Y&R common stock will receive WPP ADSs
or, if they elect, ordinary shares. Each WPP ADS

                                       5
<PAGE>
represents five ordinary shares of WPP. There are numerous differences between
the rights of a stockholder in Y&R, a Delaware corporation, and the rights of a
share owner in WPP, an English company. For example,

- except in limited circumstances, holders of WPP ADSs and ordinary shares are
  not entitled to appraisal rights in mergers or any other types of
  transactions,

- only holders representing 5% or more of the voting power of WPP are permitted
  to make proposals at a share owners meeting,

- persons acquiring 3% or more of the voting power of WPP are required to make
  public disclosures and notifications with respect to their ownership,

- amendments to the memorandum and articles of association of WPP require the
  approval of at least 75% of the votes cast at a share owners meeting,

- under the current terms of the WPP ADSs, registered holders of ADSs may vote
  on matters presented at WPP share owners meetings by providing voting
  instructions to the ADS depositary but are not entitled to attend, speak or
  vote in person at those meetings; however, WPP has agreed to submit a
  resolution to its share owners at the first annual general meeting held after
  completion of the merger to allow holders of ADSs to attend, speak and vote in
  person at WPP share owners meetings, and

- although holders of WPP ordinary shares are permitted to initiate lawsuits on
  behalf of the company in limited circumstances, they are generally unable to
  initiate derivative lawsuits on behalf of WPP.

    You should also be aware that it may be difficult to effect service of
process to begin a lawsuit in a U.S. court against directors and officers of WPP
who are not residents of the U.S.


CONDITIONS TO THE MERGER (SEE PAGE 87)


    We will not complete the merger unless a number of conditions are satisfied.
These include:

- approval by WPP and Y&R shareholders;

- clearance under applicable antitrust laws of the U.S., European Union and
  other jurisdictions and approval by other regulatory authorities, in each case
  without conditions that would have a material adverse effect on WPP and Y&R on
  a combined basis;

- listing of WPP ADSs and ordinary shares as described below under "--Listing of
  WPP ADSs and Ordinary Shares"; and

- receipt of opinions of tax counsel to the effect that the merger generally
  will be tax-free to U.S. holders of Y&R common stock for U.S. federal income
  tax purposes, except with respect to cash received from the proceeds of the
  sale of shares representing the fractional interests in WPP shares that Y&R
  stockholders are otherwise entitled to receive. Special rules apply, however,
  to any U.S. holder that is a five-percent transferee holder of WPP immediately
  after the merger.


TERMINATION OF THE MERGER AGREEMENT (SEE PAGE 90)


    We may terminate the merger agreement by mutual consent with the approval of
both of our boards of directors. Either of us may terminate the merger agreement
if:

- we do not complete the merger by February 11, 2001, unless the failure is
  caused by a material breach of the merger agreement by the company seeking to
  terminate; or

- the shareholders of WPP or Y&R do not approve the merger at their company's
  shareholders meeting; or

- a governmental law or order permanently enjoins or otherwise prohibits the
  merger, unless (1) that law or order results from a material breach of the
  merger agreement by the company seeking to terminate or (2) the company
  seeking to terminate failed to use commercially reasonable efforts to prevent
  the law or order from being enacted or issued.

    Additionally, either WPP or Y&R may terminate the merger agreement if:

- the board of directors of the other company withdraws or adversely modifies
  its favorable recommendation of the merger to its shareholders; or

- the other company's board of directors recommends an alternative transaction
  proposed by a third party; or

                                       6
<PAGE>
- the other company breaches any of its representations, warranties or
  obligations under the merger agreement and, as a result of this breach, a
  condition to the merger would not be satisfied prior to February 11, 2001.


TERMINATION PAYMENTS (SEE PAGE 91)


    Y&R will be required to pay WPP a termination payment of $175 million and
WPP will be required to pay Y&R a termination payment of $75 million if:

- (1) a third party makes a proposal for an alternative transaction to that
  company, (2) the shareholders of that company do not vote to approve the
  merger and (3) within nine months after termination of the merger agreement
  that company enters into or completes an alternative transaction;

- the board of directors of that company recommends an alternative transaction
  or withdraws or adversely modifies its favorable recommendation of the merger
  at a time when a proposal for an alternative transaction with that company is
  pending;

- (1) a third party makes a proposal for an alternative transaction to that
  company, (2) that company terminates the merger agreement because the merger
  has not been completed by February 11, 2001, and (3) within nine months that
  company enters into or completes an alternative transaction; or

- (1) a third party makes a proposal for an alternative transaction to that
  company, (2) that company's representations and warranties are inaccurate or
  that company violates its obligations under the merger agreement and, in
  either case, the result is that a condition to the merger cannot be satisfied,
  and (3) within nine months after termination of the merger agreement that
  company enters into or completes an alternative transaction.

    In a circumstance in which a fee described above is not payable, Y&R and WPP
would be entitled to a $25 million fee from the other if the merger agreement is
terminated because the shareholders of the other company fail to approve the
merger.


AGREEMENT REGARDING RECOMMENDATIONS TO SHAREHOLDERS (SEE PAGE 84)


    The boards of directors of Y&R and WPP have both agreed, subject to their
fiduciary duties, to recommend that their respective shareholders vote to
approve the merger. Even if a company's board of directors changes its
recommendation, that company is still required to submit the merger to a vote of
its shareholders.


ACCOUNTING TREATMENT (SEE PAGE 66)


    WPP will account for the merger as an acquisition under generally accepted
accounting principles in the U.K. and as a purchase under generally accepted
accounting principles in the U.S.


APPRAISAL RIGHTS (SEE PAGE 22)


    Under Delaware law, holders of Y&R common stock do not have the right to
demand an appraisal of the value of their shares in connection with the merger.


LISTING OF WPP ADSS AND ORDINARY SHARES (SEE PAGE 88)


    The WPP ADSs you receive in the merger will be quoted on the Nasdaq National
Market and the WPP ordinary shares underlying those ADSs, or delivered, upon
your election, instead of those ADSs, will be admitted to the Official List of
the U.K. Listing Authority and to trading on the main market of the London Stock
Exchange.


U.S. FEDERAL INCOME TAX CONSEQUENCES (SEE PAGE 73)


    The exchange by U.S. holders of Y&R common stock for WPP ADSs, including any
election to receive instead, ordinary shares, will generally be tax free, except
with respect to cash received from the proceeds of the sale of shares
representing fractional interests in WPP shares. Special rules apply, however,
to any U.S. holder that is a five-percent transferee holder of WPP immediately
after the merger.


WPP SHARES OUTSTANDING (SEE PAGES 114 AND 118)



    As of August 18, 2000, there were 778,963,425 WPP ordinary shares
outstanding. 14,901,875 of those shares were represented by 2,980,375 WPP ADSs
outstanding as of August 18, 2000.


                                       7
<PAGE>

REGULATORY APPROVALS (SEE PAGE 66)



    The merger is subject to a number of customary conditions, including the
expiration or early termination of the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act and approval by the European
Commission under the merger control laws of the European Union. On July 20,
2000, the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act
expired and we did not receive a request for additional information. On
August 24, 2000, the European Commission issued its decision to clear the
merger. We have also made relevant filings with the competition authorities in
Argentina, Australia, Brazil, Hungary, Poland and South Africa. The status of
these filings and approvals of these regulatory authorities are described in
"The Merger--Regulatory Approvals--Other Jurisdictions" on page 66.



    We have both agreed to use reasonable best efforts to complete the merger,
including to gain clearance from antitrust and competition authorities and to
obtain other required regulatory approvals. For this purpose, WPP has also
agreed to take actions and to accept restrictions or conditions, to the extent
consistent with its obligation to use reasonable best efforts, to avoid or
eliminate impediments under any antitrust or competition laws unless those
actions, restrictions or conditions would have a material adverse effect on WPP
and Y&R on a combined basis. Also, neither company is required to agree to any
action, condition or restriction unless that agreement is subject to completion
of the merger. Although we do not expect the regulatory authorities to raise any
significant objections in connection with their decisions regarding the merger,
we cannot assure you that we will obtain all required regulatory approvals or
that these approvals will not require actions or contain restrictions or
conditions that would be detrimental to WPP and Y&R on a combined basis.


COMPARATIVE MARKET PRICE DATA

    We present below the per share closing prices for WPP ADSs as quoted on the
Nasdaq National Market and the closing price for shares of Y&R common stock as
reported on the NYSE Composite Tape. We also present the closing middle market
quotations -- that is, the volume-weighted average sales price for the last ten
minutes of trading -- for WPP ordinary shares as derived from the Daily Official
List of the London Stock Exchange. These prices are presented on the following
dates:

    - May 11, 2000, the last trading day before the formal public announcement
      of the signing of the merger agreement; and


    - August 24, 2000, the latest practicable date before the printing of this
      proxy statement/ prospectus.


    The table also presents implied equivalent per share values for shares of
Y&R common stock by multiplying the price per WPP ADS on the two dates by the
exchange ratio of .835.


<TABLE>
<CAPTION>
                                                                                             Y&R SHARE
                                                                                          PRICE EQUIVALENT
                                                                                WPP           (WPP ADS
                                                     WPP          Y&R        ORDINARY         PER Y&R
                                                  ADS PRICE   SHARE PRICE   SHARE PRICE        SHARE)
                                                  ---------   -----------   -----------   ----------------
<S>                                               <C>         <C>           <C>           <C>
May 11, 2000....................................  $ 63.50      $ 48.375     L8.47              $53.02
August 24, 2000.................................  $ 63.50      $ 53.3125    L8.60              $53.02
</TABLE>


    Y&R STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR WPP ADSS,
WPP ORDINARY SHARES AND SHARES OF Y&R COMMON STOCK BEFORE MAKING A DECISION WITH
RESPECT TO THE MERGER.

                                       8
<PAGE>
CURRENCIES AND EXCHANGE RATES


    References in this document to "dollars," "$" or " CENTS" are to the
currency of the United States and references to "pounds sterling," "pounds,"
"L," "pence" or "p" are to the currency of the United Kingdom. There are 100
pence to each pound. Solely for your convenience, this proxy statement/
prospectus contains translations of U.K. pounds sterling amounts into U.S.
dollars at specified rates. You should not take these translations as assurances
that the pounds sterling amounts currently represent U.S. dollar amounts or
could be converted into U.S. dollars at the rate indicated or at any other rate,
at any time.



    In this proxy statement/prospectus, unless otherwise stated, pounds sterling
have been translated, solely for convenience, into U.S. dollars at a rate of
$1.5130 per L1.00, the noon buying rate in New York City on June 30, 2000 for
cable transfers in U.K. pounds sterling as certified for customs purposes by the
Federal Reserve Bank of New York. On August 24, 2000, the latest practicable
date for which exchange rate information was available before the printing of
this proxy statement/prospectus, the noon buying rate in New York City for cable
transfers in U.K. pounds sterling as certified for customs purposes by the
Federal Reserve Bank of New York was $1.4806 per L1.00. These translations
should not be construed as a representation that the U.S. dollar amounts
actually represent, or could be converted into, pounds sterling at the rates
indicated.



    The period end, average and range of high and low U.S. dollar/pound sterling
exchange rates for the five years ended December 31, 1999, and the six months
ended June 30, 2000, are presented in the section entitled "Exchange Rates"
beginning on page 95.


COMPARATIVE PER SHARE DATA


    We present below audited historical and unaudited pro forma per share data
that reflect the completion of the merger based upon the historical financial
statements of WPP and Y&R. The pro forma data are not indicative of the results
of future operations or the actual results that would have occurred had the
merger been completed at the beginning of the periods presented. You should read
the data presented below together with the audited historical consolidated
financial statements, including applicable notes, of WPP and Y&R that we have
incorporated by reference into this proxy statement/prospectus, and the
Unaudited Pro Forma Condensed Consolidated Financial Information appearing in
this proxy statement/prospectus beginning on page 100. For the selected U.K.
GAAP amounts we present below, Y&R's historical audited financial position and
results of operations include unaudited adjustments to restate the amounts to
U.K. GAAP and to conform with WPP's disclosed accounting policies under U.K.
GAAP as described in the Notes to the Unaudited Pro Forma Condensed Consolidated
Financial Information.



    The first and second columns on the left in the tables below present the
unaudited historical per share amounts for WPP and Y&R for the six month period
ended and at June 30, 2000 and the historical per share amounts for WPP and Y&R
(unaudited) for the year ended and at December 31, 1999. The fifth column
presents pro forma equivalent data based on the estimated number of WPP ordinary
shares to be issued in the merger. Solely for your convenience, in the fourth
and sixth columns below we present in U.S. dollars the WPP pro forma and pro
forma equivalent amounts presented in U.K. pounds sterling in the third and
fifth columns.


                                       9
<PAGE>


<TABLE>
<CAPTION>
                                                            SIX MONTHS ENDED AND AT JUNE 30, 2000
                                         ---------------------------------------------------------------------------
                                                                                                      PRO FORMA
                                                                                                   EQUIVALENT PER
                                         HISTORICAL PER                                            Y&R SHARE (WPP
                                              WPP                             PRO FORMA PER        PRO FORMA DATA
                                            ORDINARY      HISTORICAL PER           WPP              MULTIPLIED BY
                                             SHARE          Y&R SHARE        ORDINARY SHARE            4.175)
                                         --------------   --------------   -------------------   -------------------
                                               L                              L          $          L          $
<S>                                      <C>              <C>              <C>        <C>        <C>        <C>
AMOUNTS UNDER U.K. GAAP
  Earnings:
    Basic..............................        12.3p             35.1p       11.2p    16.9 CENTS   46.8p    70.6 CENTS
    Diluted before exceptional items...        12.0p             52.8p       12.2p    18.5 CENTS   50.9p    77.2 CENTS
    Diluted............................        12.0p             31.2p       10.6p    16.0 CENTS   44.3p    66.8 CENTS
  Book Value(1)........................        L0.48             L0.39       L3.58      $5.42     L14.95     $22.63
AMOUNTS UNDER U.S. GAAP
  Earnings:
    Basic..............................         9.1p             $0.95        6.1p    9.2 CENTS    25.5p    38.4 CENTS
    Diluted............................         8.8p             $0.83        5.8p    8.8 CENTS    24.2p    36.7 CENTS
  Book value(1)........................        L1.39             $3.42       L4.18      $6.32     L17.45     $26.39
OTHER DATA(2), (3)
  Dividends............................         1.2p         5.0 CENTS         n/a        n/a       5.0p    7.6 CENTS
</TABLE>


------------------------

(1) The book value calculation represents equity shareholders funds (net assets
    excluding minority interests) divided by the number of shares outstanding at
    the period end.


(2) On August 14, 2000, WPP's board of directors declared an interim dividend
    for 2000 of 1.2p per WPP ordinary share. We expect that this dividend will
    be paid on November 20, 2000 to WPP's registered share owners as of
    September 15, 2000. See "Market Price and Dividend Data--Dividend Data."


(3) Pro forma equivalent dividend per share has been calculated by reference
    solely to the historical WPP dividend.



<TABLE>
<CAPTION>
                                                           YEAR ENDED AND AT DECEMBER 31, 1999
                                       ---------------------------------------------------------------------------
                                                                                                    PRO FORMA
                                                                                                 EQUIVALENT PER
                                       HISTORICAL PER                                            Y&R SHARE (WPP
                                            WPP                             PRO FORMA PER        PRO FORMA DATA
                                          ORDINARY      HISTORICAL PER           WPP              MULTIPLIED BY
                                           SHARE          Y&R SHARE        ORDINARY SHARE            4.175)
                                       --------------   --------------   -------------------   -------------------
                                             L                              L          $          L          $
<S>                                    <C>              <C>              <C>        <C>        <C>        <C>
AMOUNTS UNDER U.K. GAAP
  Earnings:
    Basic............................       22.9p       157.6p             27.0p    40.9 CENTS  112.7p    170.8 CENTS
    Diluted before exceptional
      items..........................       22.5p        99.0p             22.9p    34.6 CENTS   95.6p    144.5 CENTS
    Diluted..........................       22.5p       130.6p             25.2p    38.1 CENTS  105.2p    159.1 CENTS
AMOUNTS UNDER U.S. GAAP
  Earnings:
    Basic............................       14.2p        $2.43             10.6p    16.0 CENTS   44.3p    66.8 CENTS
    Diluted..........................       13.8p        $2.02             10.0p    15.1 CENTS   41.8p    63.0 CENTS
OTHER DATA(1), (2)
  Dividends..........................        3.1p         7.5 CENTS          n/a        n/a      12.9p    19.6 CENTS
</TABLE>


------------------------


(1) The 1999 dividend amount for WPP is comprised of an interim dividend that
    was declared by the WPP board of directors and paid by WPP during 1999 and a
    final dividend that was paid on July 10, 2000. See "Market Price and
    Dividend Data--Dividend Data."


(2) Pro forma equivalent dividend per share has been calculated by reference
    solely to the historical WPP dividend.


                                       10
<PAGE>
SELECTED HISTORICAL FINANCIAL DATA


    We present below selected historical financial data of WPP and Y&R for each
of the five years ended December 31, 1999 and selected historical financial data
for the six months ended June 30, 2000 and 1999. We derived the selected
historical financial data of WPP and Y&R for each of the five years ended
December 31, 1999 (apart from the selected historical financial data for WPP and
Y&R for 1995 and 1996 and the selected historical balance sheet data for Y&R for
1997) from, and you should read the data in conjunction with, the annual audited
consolidated financial statements of WPP and Y&R, including the notes to those
financial statements, which we have incorporated by reference into this proxy
statement/prospectus. We derived the selected historical financial data for the
six month period ended June 30, 2000 and 1999 from, and you should read the data
in conjunction with, the unaudited interim consolidated financial statements of
WPP and Y&R for those periods, including the notes thereto, which we have
incorporated by reference into this proxy statement/prospectus. The WPP and Y&R
selected historical financial data for 1995 and 1996 and the selected historical
balance sheet data for Y&R for 1997 have been derived from their respective
annual audited consolidated financial statements for those years, which, in
accordance with SEC rules, we have not incorporated by reference into this proxy
statement/prospectus.


    WPP reports its financial results in accordance with U.K. GAAP and Y&R
reports its financial results in accordance with U.S. GAAP. The main differences
between U.S. GAAP and U.K. GAAP that are relevant to WPP's consolidated
financial statements are presented in WPP's Annual Report on SEC Form 20-F for
the year ended December 31, 1999, which reconcile WPP's financial information
for the years ended December 31, 1997, 1998 and 1999 to U.S. GAAP. We have
incorporated WPP's Annual Report on SEC Form 20-F by reference into this proxy
statement/prospectus.

                   SELECTED HISTORICAL FINANCIAL DATA FOR WPP


<TABLE>
<CAPTION>
                                        SIX MONTHS ENDED
                                            JUNE 30,                                 YEARS ENDED DECEMBER 31,
                                 ------------------------------   ---------------------------------------------------------------
                                        2000             1999            1999             1998       1997       1996       1995
                                 -------------------   --------   -------------------   --------   --------   --------   --------
                                    L          $          L          L          $          L          L          L          L
                                                     (IN MILLIONS, EXCEPT PER ORDINARY SHARE AND ADS AMOUNTS)
<S>                              <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
PROFIT & LOSS ACCOUNT DATA
U.K. GAAP
Turnover (gross billings)......  5,655.9    8,557.4    4,445.1    9,345.9    14,140.3   8,000.1    7,287.3    7,084.0    6,553.1
Revenue........................  1,209.1    1,829.4    1,017.3    2,172.6     3,287.1   1,918.4    1,746.7    1,691.3    1,554.9
Profit attributable to ordinary
  shareowners..................     93.1      140.9       75.3      172.8       261.4     140.3      116.0      100.0       68.7
Earnings per ordinary share
  Basic........................    12.3p    18.6 CENTS   10.0p      22.9p    34.6 CENTS   19.1p      15.8p      13.6p       9.4p
  Diluted......................    12.0p    18.2 CENTS    9.8p      22.5p    34.0 CENTS   18.8p      15.7p      13.5p       9.4p
Earnings per ADS
  Basic........................    61.5p    93.0 CENTS   50.0p     114.5p    173.0 CENTS   95.5p     79.0p      68.0p      47.0p
  Diluted......................    60.0p    91.0 CENTS   49.0p     112.5p    170.0 CENTS   94.0p     78.5p      67.5p      47.0p
Cash dividends per ordinary
  share........................     1.2p    1.82 CENTS    1.0p       3.1p    4.69 CENTS   2.56p      2.13p      1.70p      1.31p
Cash dividends per ADS.........     6.0p    9.08 CENTS    5.0p      15.5p    23.45 CENTS  12.80p    10.65p      8.50p      6.55p

U.S. GAAP
Turnover (gross billings)......  5,655.9    8,557.4    4,445.1    9,345.9    14,140.3   8,000.1    7,287.3    7,084.0    6,553.1
Revenue........................  1,209.1    1,829.4    1,017.3    2,172.6     3,287.1   1,918.4    1,746.7    1,691.3    1,554.9
Net Income.....................     68.7      103.9       43.3      106.8       161.6      99.5       80.2       67.1       25.7
Earnings per ordinary share
  Basic........................     9.1p    13.8 CENTS    5.8p      14.2p    21.5 CENTS   13.5p      10.9p       9.1p       3.5p
  Diluted......................     8.8p    13.3 CENTS    5.6p      13.8p    20.9 CENTS   13.2p      10.8p       9.0p       3.5p
Earnings per ADS
  Basic........................    45.5p    69.0 CENTS   29.0p      71.0p    107.5 CENTS   67.5p     54.5p      45.5p      17.5p
  Diluted......................    44.0p    66.5 CENTS   28.0p      69.0p    104.5 CENTS   66.0p     54.0p      45.0p      17.5p
</TABLE>


                                       11
<PAGE>


<TABLE>
<CAPTION>
                                          AT JUNE 30,                                     AT DECEMBER 31,
                                 ------------------------------   ---------------------------------------------------------------
                                        2000             1999            1999             1998       1997       1996       1995
                                 -------------------   --------   -------------------   --------   --------   --------   --------
                                    L          $          L          L          $          L          L          L          L
                                                                          (IN MILLIONS)
<S>                              <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
BALANCE SHEET DATA
U.K. GAAP
Total assets...................  3,619.5    5,476.3    2,630.3    3,206.4     4,851.3   2,452.5    1,979.3    1,894.8    1,881.2
Long-term obligations..........    830.6    1,256.7      548.6      731.7     1,107.1     479.4      296.0      359.9      417.5

U.S. GAAP
Total assets...................  4,145.5    6,272.1    3,231.6    3,726.3     5,637.9   3,059.2    2,675.7    2,629.2    2,760.9
Long-term obligations..........    701.9    1,062.0      453.2      599.6       907.2     378.3      258.4      356.9      422.1
</TABLE>


<TABLE>
<CAPTION>
                                                               INTERIM
                                                              DIVIDEND            YEARS ENDED DECEMBER 31,
                                                         -------------------   ------------------------------
                                                           2000       1999       1999       1998       1997
                                                         --------   --------   --------   --------   --------
                                                                  (IN MILLIONS, EXCEPT PER ORDINARY
                                                                        SHARE AND ADS AMOUNTS)
<S>                                                      <C>        <C>        <C>        <C>        <C>
OTHER DATA
U.S. dollar equivalent dividends per WPP ordinary
  share(1)(2)..........................................  1.82 CENTS 1.63 CENTS 4.78 CENTS 4.07 CENTS 3.53 CENTS
U.S. dollar equivalent dividends per WPP ADS(1)(2).....  9.08 CENTS 8.14 CENTS 23.9 CENTS 20.4 CENTS 17.7 CENTS

<CAPTION>

                                                               YEARS ENDED DECEMBER 31,
                                                           --------------------------------
                                                                 1996             1995
                                                            --------------   --------------
                                                           (IN MILLIONS, EXCEPT PER ORDINARY
                                                                SHARE AND ADS AMOUNTS)
<S>                                                         <C>              <C>              <C>
OTHER DATA
U.S. dollar equivalent dividends per WPP ordinary
  share(1)(2)..........................................         2.87 CENTS       2.03 CENTS
U.S. dollar equivalent dividends per WPP ADS(1)(2).....         14.4 CENTS       10.2 CENTS
</TABLE>


--------------------------


(1) WPP's dividend with respect to each year is comprised of an interim dividend
    paid in November and a final dividend paid in July of the next year, subject
    to approval by WPP's share owners. On August 14, 2000, WPP's board of
    directors declared an interim dividend for 2000, which we expect will be
    paid on November 20, 2000 to WPP's registered share owners as of
    September 15, 2000. See "Market Price and Dividend Data--Dividend Data."



(2) U.S. dollar equivalent dividend amounts were obtained by translating the
    equivalent dividend paid in U.K. pounds sterling into U.S. dollars using the
    closing exchange rate, as reported by Bloomberg for pounds sterling on each
    of the payment dates for those dividends. The U.S. dollar equivalent
    dividend amount of the 2000 interim dividend was obtained by translating the
    dividend declared in U.K. pounds sterling into U.S. dollars using the
    exchange rate of $1.5130 per L1.00, the noon buying rate in New York City on
    June 30, 2000 for cable transfers in U.K. pounds sterling as certified for
    customs purposes by the Federal Reserve Bank of New York.


                                       12
<PAGE>
                   SELECTED HISTORICAL FINANCIAL DATA OF Y&R
                                  (U.S. GAAP)


<TABLE>
<CAPTION>
                                                           SIX MONTHS
                                                              ENDED
                                                            JUNE 30,                       YEARS ENDED DECEMBER 31,
                                                       -------------------   ----------------------------------------------------
                                                         2000       1999       1999       1998       1997       1996       1995
                                                       --------   --------   --------   --------   --------   --------   --------
                                                          $          $          $          $          $          $          $
                                                                        (IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S>                                                    <C>        <C>        <C>        <C>        <C>        <C>        <C>
STATEMENT OF OPERATIONS DATA
Revenues.............................................     943        798      1,717      1,522      1,383      1,222      1,085
Income (loss) before extraordinary charge............      69         50        167        (82)       (24)      (238)         1
Net income (loss)(1).................................      69         50        167        (86)       (24)      (238)         1
Earnings (loss) per common share(1)
  Basic:
    Income (loss) before extraordinary charge(2).....    0.95       0.75       2.43      (1.34)     (0.51)       n/a        n/a
    Net income (loss)(2).............................    0.95       0.75       2.43      (1.42)     (0.51)       n/a        n/a
  Diluted:
    Income (loss) before extraordinary charge(2).....    0.83       0.61       2.02      (1.34)     (0.51)       n/a        n/a
    Net income (loss)(2).............................    0.83       0.61       2.02      (1.42)     (0.51)       n/a        n/a
Cash dividends per common share......................     5.0 CENTS    2.5 CENTS    7.5 CENTS     --     --      n/a        n/a
</TABLE>



<TABLE>
<CAPTION>
                                                              AT JUNE 30,                      AT DECEMBER 31,
                                                              ------------   ----------------------------------------------------
                                                                  2000         1999       1998       1997       1996       1995
                                                              ------------   --------   --------   --------   --------   --------
                                                                   $            $          $          $          $          $
                                                                                         (IN MILLIONS)
<S>                                                           <C>            <C>        <C>        <C>        <C>        <C>
BALANCE SHEET DATA
Total assets................................................     2,365        2,414      1,635      1,538      1,599      1,227
Long-term obligations.......................................       434          276        176        481        328        365
Mandatorily redeemable equity securities....................        --           --         --        508        363         --
</TABLE>


--------------------------


(1) Y&R's net income for 1999 reflects the aggregate after-tax effect of
    approximately $51 million in connection with the net gain recognized on the
    sale of certain assets of Brand Dialogue in exchange for an ownership
    interest in Luminant Worldwide Corporation and additional consideration
    received as a result of achieving revenue and operating profit performance
    targets of the Brand Dialogue contributed assets. Y&R's net loss in 1998
    includes (A) operating charges of $234.4 million associated with the initial
    public offering of shares of common stock of Y&R in May 1998 and consisting
    of non-recurring, non-cash compensation charges resulting from the vesting
    of shares of restricted stock allocated to employees and (B) an
    extraordinary loss on the retirement of debt of $4.4 million. Y&R's net loss
    in 1997 includes other operating charges of $11.9 million for non-cash asset
    impairment write-downs. Y&R's net loss in 1996 includes pretax operating
    charges of $315.4 million primarily related to compensation charges recorded
    in connection with Y&R's recapitalization in that year.


(2) Y&R's earnings per share for 1996 and 1995 cannot be computed because prior
    to its recapitalization Y&R's capital structure consisted of both common
    stock and limited partnership units in predecessor entities.

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA

    WPP and Y&R are providing the following pro forma consolidated financial
information to give you a better picture of what the results of operations and
financial position of the combined businesses of WPP and Y&R might have looked
like had the merger occurred on an earlier date. We are providing this
information for illustrative purposes only. This information does not purport to
represent what the results of operations or financial position of WPP would have
been if the merger had actually occurred on that earlier date. This information
is also not necessarily indicative of what WPP's future operating results or
consolidated financial position will be.


    See "Unaudited Pro Forma Condensed Consolidated Financial Information"
beginning on page 100 for a more detailed explanation of this analysis.


                                       13
<PAGE>
    BASIS OF PREPARATION


    The Unaudited Pro Forma Consolidated Financial Information has been prepared
in accordance with U.K. GAAP, which differs in certain respects from U.S. GAAP.
The Unaudited Pro Forma Consolidated Financial Information has been derived
from: (1) the audited historical consolidated profit and loss account of WPP for
the year ended December 31, 1999, (2) the audited historical consolidated
statement of operations of Y&R for the year ended December 31, 1999 except for
turnover (gross billings) data which are unaudited, (3) the unaudited historical
consolidated profit and loss account of WPP for the six month period ended
June 30, 2000 and the unaudited historical consolidated balance sheet of WPP at
June 30, 2000, (4) the unaudited historical consolidated statement of operations
of Y&R for the six months ended June 30, 2000 and the unaudited historical
consolidated balance sheet of Y&R at June 30, 2000, (5) unaudited
reclassifications to conform Y&R's historical financial information to WPP's
presentation under U.K. GAAP, (6) unaudited adjustments to conform Y&R's
historical financial information with WPP's disclosed accounting policies under
U.K. GAAP, and (7) with respect to unaudited balance sheet data, the unaudited
pro forma adjustments described in the Notes to the Unaudited Pro Forma
Condensed Consolidated Financial Information. No pro forma adjustments were
required to be made in the preparation of the unaudited pro forma condensed
consolidated profit and loss account data.


    WPP intends to account for the merger as an acquisition under U.K. GAAP and
as a purchase under U.S. GAAP. The pro forma consolidated financial information
has been prepared on this basis.

    UNAUDITED PRO FORMA PROFIT AND LOSS ACCOUNT DATA


    The unaudited pro forma profit and loss account data for the year ended
December 31, 1999 assumes that the merger took place on January 1, 1999, the
first day of the financial period presented in the Unaudited Pro Forma Condensed
Consolidated Financial Information. The unaudited pro forma profit and loss
account data for the six months ended June 30, 2000 assumes that the merger took
place on January 1, 1999. This data has been prepared in accordance with the
methodology described above under "--Basis of Preparation."



<TABLE>
<CAPTION>
                                                         SIX MONTHS ENDED          YEAR ENDED
                                                             JUNE 30,             DECEMBER 31,
                                                       ---------------------   -------------------
                                                               2000                   1999
                                                       ---------------------   -------------------
                                                           L           $          L          $
                                                         (IN MILLIONS, EXCEPT PER ORDINARY SHARE
                                                                    AND ADS AMOUNTS)
<S>                                                    <C>         <C>         <C>        <C>
UNAUDITED PRO FORMA PROFIT & LOSS ACCOUNT DATA
U.K. GAAP
Turnover (gross billings)............................    8,359.3   12,647.6    14,619.0   22,118.5
Revenue..............................................    1,809.9    2,738.4     3,234.0    4,893.0
Profit attributable to ordinary shareowners..........      118.6      179.4       281.1      425.3
Basic earnings per ordinary share....................       11.2p  16.9 CENTS      27.0p  40.9 CENTS
Diluted earnings before exceptional items per
  ordinary share.....................................       12.2p  18.5 CENTS      22.9p  34.6 CENTS
Diluted earnings per ordinary share..................       10.6p  16.0 CENTS      25.2p  38.1 CENTS
Basic earnings per ADS...............................       56.0p  84.5 CENTS     135.0p  204.5 CENTS
Diluted earnings before exceptional items per ADS....       61.0p  92.5 CENTS     114.5p  173.0 CENTS
Diluted earnings per ADS.............................       53.0p  80.0 CENTS     126.0p  190.5 CENTS

U.S. GAAP
Turnover (gross billing).............................    8,359.3   12,647.6    14,619.0   22,118.5
Revenue..............................................    1,809.9    2,738.4     3,234.0    4,893.0
Net Income...........................................       65.1       98.5       112.3      169.9
Basic earnings per ADS...............................       30.5p  46.0 CENTS      53.0p  80.0 CENTS
Diluted earnings per ADS.............................       29.0p  44.0 CENTS      50.0p  75.5 CENTS
</TABLE>


                                       14
<PAGE>
    UNAUDITED PRO FORMA BALANCE SHEET DATA


    The unaudited pro forma balance sheet data we provide below assumes that the
merger took place on June 30, 2000, and has been prepared in accordance with the
methodology described above under "--Basis of Preparation."



<TABLE>
<CAPTION>
                                                                AT JUNE 30, 2000
                                                              ---------------------
                                                                  L           $
                                                                  (IN MILLIONS)
<S>                                                           <C>         <C>
UNAUDITED PRO FORMA BALANCE SHEET DATA
U.K. GAAP
Total assets................................................   9,018.0    13,644.2
Total long-term obligations.................................   1,168.2     1,767.5
Equity share owner's funds..................................   4,235.9     6,408.9
U.S. GAAP
Total assets................................................   9,728.7    14,719.5
Total long-term obligations.................................   1,164.4     1,761.7
Share owner's equity........................................   4,942.8     7,478.5
</TABLE>


WHERE YOU CAN FIND MORE INFORMATION

    WPP files annual and special reports and other information and Y&R files
annual, quarterly and special reports, proxy statements and other information
with the U.S. Securities and Exchange Commission. You may read and copy any
reports, statements or other information on file at the SEC's public reference
room located at 450 Fifth Street, NW, Washington, D.C. 20549 or at one of the
SEC's other public reference rooms in New York, New York and Chicago, Illinois.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. The SEC filings are also available to the public from
commercial document retrieval services. The Y&R filings and certain of the most
recent WPP filings, as well as the registration statement of which this proxy
statement/ prospectus forms a part, are available at the Internet world wide web
site maintained by the SEC at WWW.SEC.GOV.

    WPP has filed a registration statement on Form F-4 to register with the SEC
the WPP ordinary shares which Y&R stockholders will receive in connection with
the merger including ordinary shares evidenced by WPP ADSs. A registration
statement on Form F-6 in respect of the WPP ADSs has also been filed. This proxy
statement/prospectus is a part of the registration statement on Form F-4 and
constitutes a prospectus of WPP, as well as being a proxy statement of Y&R for
its special meeting.

    The SEC permits WPP and Y&R to "incorporate by reference" information into
this proxy statement/prospectus. This means that the companies can disclose
important information to you by referring you to another document filed
separately with the SEC. The information incorporated by reference is deemed to
be part of this proxy statement/prospectus, except for any information
superseded by information contained directly in this proxy statement/prospectus.

    This proxy statement/prospectus incorporates by reference the documents set
forth below that have been previously filed with the SEC. These documents
contain important information about WPP and Y&R and their financial conditions.


<TABLE>
<CAPTION>
WPP SEC FILINGS (FILE NO. 000-16350)   PERIOD OR FILING DATE
------------------------------------   ---------------------
<S>                                    <C>
Annual Report on Form 20-F             Year ended December 31, 1999
Reports on Form 6-K                    Filed on April 27, 2000, June 27,
                                       2000, August 5, 2000 and August 15,
                                       2000
</TABLE>



<TABLE>
<CAPTION>
Y&R SEC FILINGS (FILE NO. 001-14093)   PERIOD OR FILING DATE
------------------------------------   ---------------------
<S>                                    <C>
Annual Report on Form 10-K             Year ended December 31, 1999
Quarterly Reports on Form 10-Q         Quarters ended March 31, 2000 and
                                       June 30, 2000
Current Report on Form 8-K             Filed on May 16, 2000
</TABLE>


                                       15
<PAGE>
    WPP and Y&R also incorporate by reference into this proxy
statement/prospectus additional documents that they may file with the SEC from
the date of this proxy statement/prospectus to the date of the Y&R special
meeting. These include reports such as Annual Reports on Form 10-K and
Form 20-F, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, any
Reports on Form 6-K designated as being incorporated by reference into this
proxy statement/prospectus, as well as proxy statements filed by Y&R.


    The WPP ADSs are quoted on the Nasdaq National Market. The WPP ordinary
shares are admitted to the Official List of the U.K. Listing Authority and trade
on the main market of the London Stock Exchange. The WPP ordinary shares also
trade on German stock exchanges in Berlin, Frankfurt, Munich and Stuttgart. You
may inspect any periodic reports, proxy statements and other information filed
with the SEC by Y&R at the offices of the NYSE, 20 Broad Street, New York, New
York 10005.



    If you are a WPP or Y&R shareholder, you may not have been sent some of the
documents incorporated by reference, but you can obtain any of them through WPP
or Y&R as described below, the SEC or the SEC's Internet world wide web site as
described above. Documents incorporated by reference are available without
charge, excluding all exhibits unless an exhibit has been specifically
incorporated by reference into this proxy statement/prospectus. Shareholders may
obtain documents incorporated by reference into this proxy statement/prospectus
by requesting them in writing or by telephone from the appropriate company at
the following addresses:



<TABLE>
<S>                             <C>                             <C>
        WPP Group plc                   WPP Group plc                Young & Rubicam Inc.
   c/o WPP Group USA, Inc.              27 Farm Street                285 Madison Avenue
       Worldwide Plaza                  London WIX 6RD                New York, NY 10017
     309 West 49th Street                  England                   Tel: (212) 210-3000
      New York, NY 10019          Tel: (011 44) 20 7408 2204    Attention: Investor Relations
     Tel: (212) 632-2200        Attention: Andrea Harris, Esq.
   Attention: Andrew Scott
</TABLE>



    If you would like to request documents from WPP or Y&R, please do so by
September 21, 2000 to receive them before the Y&R special meeting.


                            ------------------------


    YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE INTO THIS PROXY STATEMENT/PROSPECTUS TO VOTE ON THE MERGER. NO ONE HAS
BEEN AUTHORIZED TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT FROM WHAT IS
CONTAINED IN, OR INCORPORATED BY REFERENCE INTO, THIS PROXY
STATEMENT/PROSPECTUS. THIS PROXY STATEMENT/PROSPECTUS IS DATED AUGUST 25, 2000.
YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN, OR INCORPORATED BY
REFERENCE INTO, THIS PROXY STATEMENT/ PROSPECTUS IS ACCURATE AS OF ANY DATE
OTHER THAN THAT DATE. NEITHER OUR MAILING OF THIS PROXY STATEMENT/PROSPECTUS TO
Y&R STOCKHOLDERS NOR THE ISSUANCE BY WPP OF ADSS OR ORDINARY SHARES IN
CONNECTION WITH THE MERGER SHALL CREATE ANY IMPLICATION TO THE CONTRARY.
INFORMATION CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS REGARDING WPP HAS BEEN
PROVIDED BY WPP, AND INFORMATION CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS
REGARDING Y&R HAS BEEN PROVIDED BY Y&R.


                                       16
<PAGE>
                      RISK FACTORS RELATING TO THE MERGER


THE PERFORMANCE OF THE MERGED COMPANY WILL BE AFFECTED BY ITS ABILITY TO RETAIN
  KEY PERSONNEL.



    Because our respective employees, including our creative, research, media,
account and practice group specialists, and their skills and relationships with
clients, are among our most important assets, the performance of the post-merger
combined company will be affected by its ability to retain these employees after
the completion of the merger.


    Other than the 22 senior executives and other key employees who have entered
into employment agreements with Y&R in connection with the merger agreement,
personnel of Y&R are generally not subject to employment contracts and therefore
may terminate their employment at any time. Furthermore, those 22 individuals
with employment agreements may voluntarily terminate their employment at any
time, although in doing so they would forfeit their rights under the employment
agreements to receive salary, bonuses, benefits and other compensation.


    Upon completion of the merger, all unvested stock options held by employees
of Y&R, other than those received by employees in Y&R's annual stock option
grant made in April 2000 and those granted thereafter, will become fully vested
and immediately exercisable for WPP shares. Y&R employees, other than a group of
senior Y&R executives who have agreed not to sell two-thirds of their stock and
options for one year ending May 11, 2001, will be free to sell the WPP shares
they receive upon exercise of these options. In addition, under Y&R's change in
control severance plan and under the employment agreements entered into by the
22 senior executives and other key employees of Y&R, senior and key employees of
Y&R will be entitled to receive severance payments if their employment is
terminated by the combined company without cause, or if they terminate their
employment for good reason after completion of the merger. See "The
Merger--Interests of Directors and Officers of Y&R in the Merger."


    We cannot assure you that employees of Y&R or WPP, including senior
executives and key employees, will not terminate their employment in connection
with or after completion of the merger. If the combined company is unable to
retain Y&R's and WPP's senior executives and key employees, or attract qualified
personnel to replace any employees who leave, the business of the combined
company may be materially and adversely impacted.

WE MAY LOSE EXISTING CLIENTS AS A RESULT OF THE MERGER.

    The performance of the combined company will be affected by its ability to
retain the existing clients of WPP and Y&R and attract new clients. Our ability
to retain existing clients and attract new clients may, in some cases, be
limited by clients' policies on conflicts of interest. These policies can in
some cases prevent one agency and, in limited circumstances, different agencies
within the same holding company, from performing similar services for competing
products or companies. Although we do not believe that clients will terminate
relationships where conflicts exist, those conflicts could result in clients
terminating their relationship with the agencies of the combined company or
reducing the projects for which they retain those agencies. Moreover, because of
the combined company's larger number of clients, there could be a greater
likelihood of conflict with potential new clients in the future. If the combined
company fails to maintain existing clients or attract new clients, its business
may be materially and adversely impacted.

WE MAY NOT REALIZE THE COST SAVINGS AND OTHER BENEFITS WE EXPECT FROM THE
  MERGER.


    We expect that the merger will result in cost savings and other benefits to
the combined company. In that regard, we have quantified to date estimated
pre-tax annual cost savings of $30 million that we expect to result from the
merger by the end of 2001. We also expect to realize the benefits we describe


                                       17
<PAGE>

below under "The Merger--Reasons for the Merger." However, our cost savings
estimate is inherently subject to significant uncertainties and contingencies,
many of which are beyond the control of WPP and Y&R. There can be no assurances
that the combined company will achieve these cost savings, and actual savings
may vary materially from this estimate. In particular, the combined company's
ability to successfully realize these cost savings and benefits and the timing
of this realization may be affected by a variety of factors, including:


    - its broad geographic areas of operations and the resulting potential
      complexity of implementing cost savings;

    - the failure to fully develop or carry out its cost savings implementation
      plans; and

    - unexpected events, including major changes in the advertising, marketing
      and communication services industries.

    If the cost savings or benefits we expect are not realized or are delayed,
the market price of the WPP ADSs and ordinary shares could be adversely
affected.

THE MARKET PRICE OF THE WPP ADSS AND ORDINARY SHARES MAY BE SUBJECT TO DOWNWARD
PRESSURE FOR A PERIOD OF TIME AS A RESULT OF SALES OF Y&R COMMON STOCK AND WPP
SHARES BY Y&R STOCKHOLDERS.


    In connection with the merger, stockholders of Y&R may sell a significant
number of shares of Y&R common stock, or the WPP ADSs or ordinary shares they
will receive in the merger. These sales could adversely affect the market price
for the WPP ADSs and ordinary shares for a period of time before and after
completion of the merger. You should be aware that:



    - some U.S. mutual funds, state pension funds and other investors are not
      permitted to hold equity securities of non-U.S. companies;



    - some mutual funds and other investors who hold shares of Y&R because it is
      included in the S&P 500 Index; WPP shares are not included in that index;
      and



    - as of May 15, 2000, the last date for which this information is available,
      employees of Y&R held an aggregate of approximately 9,600,000 shares of
      Y&R common stock received pursuant to equity grants made by Y&R, and as of
      August 4, 2000, they held options to acquire approximately 23 million
      shares of Y&R common stock. Approximately 21 million of these options will
      be fully vested and immediately exercisable upon the completion of the
      merger.



    As we noted above, in connection with the execution of the merger agreement,
WPP entered into sale restriction agreements with senior executives, and a
former senior executive of Y&R, under which they have agreed not to sell a total
of approximately six million shares of their Y&R common stock and/or the shares
received upon the exercise of stock options (and, following completion of the
merger, the WPP shares they will receive in the merger or upon the exercise of
stock options that will become exercisable for WPP shares) for the one year
period ending May 11, 2001, unless the covered executive is either terminated
without "cause" or resigns for "good reason" (as defined in the sale restriction
agreements) prior to May 11, 2001.


THE VALUE OF WPP ADSS YOU WILL RECEIVE IN THE MERGER DEPENDS ON THE MARKET PRICE
OF THE WPP ADSS AT THE COMPLETION OF THE MERGER.

    The number of WPP ADSs that you will receive in the merger for each share of
Y&R common stock is fixed at .835. Because the market price of WPP ADSs and
ordinary shares will fluctuate, the value at the time of the completion of the
merger of the consideration you will receive will depend on the market price at
that time. There can be no assurance as to the market value at the time of the
merger of the consideration you will receive. For historical and current market
prices of the WPP ADSs and ordinary shares, see "Market Price and Dividend
Data."

                                       18
<PAGE>
                           FORWARD-LOOKING STATEMENTS

    This proxy statement/prospectus, and the documents we are incorporating by
reference, contain forward-looking statements about WPP, Y&R and the combined
company, which we intend to be covered by the safe harbor for "forward-looking
statements" provided by the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are statements that are not historical facts and
include financial projections and estimates and their underlying assumptions;
statements regarding plans, objectives and expectations with respect to future
operations, products and services; and statements regarding future performance.
Forward-looking statements are generally identified by the words "expects,"
"anticipates," "believes," "intends," "estimates" and similar expressions.

    The forward-looking statements in this proxy statement/prospectus are
subject to various risks and uncertainties, most of which are difficult to
predict and generally beyond the control of WPP and Y&R. Accordingly, actual
results may differ materially from those expressed in, or implied by, the
forward-looking statements. The risks and uncertainties to which forward-looking
statements are subject include:

- those we discuss above under "Risk Factors Relating to the Merger;"

- those we discuss or identify in our public filings with the SEC;

- risks and uncertainties with respect to our expectations regarding:

    - the timing and completion of the merger;

    - the value of the merger consideration;

    - growth and expansion opportunities;

    - market positions;

    - the conduct of worldwide operations;

    - earnings improvements;

    - cost savings;

    - revenue growth;

    - other benefits anticipated from the merger;

    - gains and losses of clients and client business and projects;

    - changes in the marketing and communications budgets of clients;

    - changes in management or ownership of clients; and

    - retention of, and ability to attract, qualified employees;

- the effects of:

    - foreign exchange rate fluctuations;

    - regional, national and international economic conditions, including
      changes in interest rates and the performance of the financial markets;

    - changes in industry rates of compensation;

    - changes in regional, national and international laws;

    - regulations and taxes;

    - changes in competition and pricing environments;

                                       19
<PAGE>
    - the occurrence of natural disasters;

    - regional, national and international market and industry conditions; and

    - regional, national and international political conditions.

    The actual results, performance or achievement by WPP, Y&R or the combined
company could differ significantly from those expressed in, or implied by, our
forward-looking statements. Accordingly, we cannot assure you that any of the
events anticipated by the forward-looking statements will occur, or if they do,
what impact they will have on the results of operations and financial conditions
of WPP, Y&R or the combined company following the merger.

                                       20
<PAGE>
                            THE Y&R SPECIAL MEETING

GENERAL


    The special meeting of stockholders of Y&R will be held on September 28,
2000, at 10:00 a.m., New York time, at the Ney Center for Executive Leadership
at the headquarters of Y&R at 285 Madison Avenue, Ground Floor, New York, New
York. At the special meeting the Y&R stockholders will consider and vote upon
the Amended and Restated Agreement and Plan of Merger, dated as of May 11, 2000,
by and among WPP, Y&R and York Merger Corp., a wholly owned subsidiary of WPP,
and York II Merger Corp., a wholly owned subsidiary of York Merger Corp. and the
merger of Y&R and York II Merger Corp. Following the merger Y&R will be an
indirect subsidiary of WPP. We have attached a copy of the merger agreement to
this proxy statement/prospectus as Appendix A.


RECORD DATE; QUORUM


    Y&R's board of directors has fixed the close of business on August 4, 2000
as the record date for the determination of the stockholders entitled to notice
of, and to vote at, the special meeting. At the record date there were
73,298,883 outstanding shares of Y&R common stock held by approximately 914 Y&R
stockholders of record.


    The holders of a majority of the outstanding shares of Y&R common stock at
the record date, represented by person or by proxy, will constitute a quorum for
purposes of the special meeting. A quorum is necessary to hold the special
meeting. Any shares of Y&R common stock held in treasury by Y&R or by any of its
subsidiaries are not considered to be outstanding for purposes of a quorum.
Brokers and nominees are not allowed to vote on the approval of the merger on
behalf of stockholders, and shares that are not voted because brokers did not
receive instructions are referred to as "broker non-votes." Abstentions and
"broker non-votes" count as present for establishing a quorum. Once a share is
represented at the special meeting, it will be counted for the purpose of
determining a quorum at the special meeting and any adjournment of the special
meeting, unless the holder is present solely to object to the special meeting.
However, if a new record date is set for the adjourned special meeting, then a
new quorum will have to be established.

REQUIRED VOTE


    Each share of Y&R common stock outstanding as of the close of business on
August 4, 2000 entitles the holder to one vote at the special meeting.
Completion of the merger requires the approval of the merger agreement by the
affirmative vote of the holders of a majority of the voting power of the
outstanding shares of Y&R common stock. Because the vote is based on the number
of shares outstanding rather than on the number of votes cast, failure to vote
your shares is effectively a vote against the merger. In addition, abstentions
and "broker non-votes" will have the same effect as votes against approval of
the merger. You may vote your shares in any of three ways:


    (1) by completing and returning the accompanying proxy card;


    (2) by telephone, as outlined on the accompanying proxy card; or


    (3) by appearing and voting in person at the special meeting.


    At the record date, directors and executive officers of Y&R and their
associates and affiliates owned approximately 1.6% of the outstanding shares of
Y&R common stock.


VOTING AND REVOCATION OF PROXIES


    If you vote your shares of Y&R common stock by signing a proxy, your shares
will be voted at the special meeting as you indicate on your proxy card. If no
instructions are indicated on your signed proxy card, your shares of Y&R common
stock will be voted "FOR" the approval of the merger. If you


                                       21
<PAGE>

vote your shares of Y&R common stock by telephone, your shares will be voted at
the special meeting as instructed.


    You may revoke your proxy at any time before the proxy is voted at the
special meeting. A proxy may be revoked prior to the vote at the special meeting
in any of the following ways:


    (1) by submitting a written revocation to the Secretary of Young &
       Rubicam Inc. at 285 Madison Avenue, New York, New York 10017-6486;


    (2) by submitting a new proxy dated after the date of the proxy that is
       being revoked; or

    (3) by voting in person at the special meeting.

However, simply attending the special meeting will not revoke a proxy.  If you
do not hold your shares of Y&R common stock in your own name, you may revoke a
previously given proxy by following the revocation instructions provided by the
bank, broker or other party who is the registered owner of the shares.

    The Y&R board is not aware of any other business to be brought before the
special meeting. If, however, other matters are properly brought before the
special meeting or any adjournment or postponement of the special meeting, the
persons appointed as proxies will have discretionary authority to vote the
shares represented by duly executed proxies in accordance with their discretion
and judgment.

    Do not include stock certificates when returning the enclosed proxy card. If
the merger is completed, you will be sent instructions at that time for
exchanging your shares of Y&R common stock for WPP shares.

SOLICITATION OF PROXIES


    Y&R will bear the costs of soliciting proxies to vote on the merger at the
special meeting. WPP and Y&R will share equally the amount of the filing fees
and other expenses incurred in connection with the cost of filing, printing and
distributing this proxy statement/prospectus. Officers, directors and employees
of Y&R may also solicit proxies from stockholders by telephone, mail, the
Internet or in person. However, they will not be paid for soliciting proxies.
Y&R will make arrangements with brokerage houses and other custodians, nominees
and fiduciaries to send the proxy materials to beneficial owners, and Y&R will
reimburse those brokerage houses and custodians for their reasonable expenses in
doing so. MacKenzie Partners, Inc. has been retained by Y&R to assist in the
solicitation of proxies, using the means referred to above, and will receive
fees of up to $15,000, plus reasonable out-of-pocket expenses.


APPRAISAL RIGHTS

    Holders of Y&R common stock are not entitled to appraisal rights under
Delaware law in connection with the merger.

                                       22
<PAGE>
                     THE WPP EXTRAORDINARY GENERAL MEETING


    In connection with the merger, the board of directors of WPP has convened an
extraordinary general meeting of the share owners of WPP for September 29, 2000.


RESOLUTIONS PROPOSED

    At the meeting, WPP will propose the following resolutions:


    - Resolution 1--to approve the merger, to increase the authorized share
      capital of WPP from L125,000,000 to L175,000,000 creating an additional
      500,000,000 new WPP ordinary shares of nominal value 10p each, and to
      authorize the WPP board to allot relevant securities up to a maximum
      nominal amount of L73,271,363;



    - Resolutions 2 through 5--to elect as additional directors of WPP,
      effective upon completion of the merger, the following current members of
      Y&R's board designated by Y&R: Michael J. Dolan, F. Warren Hellman,
      Michael H. Jordan and Sir Christopher Lewinton;



    - Resolution 6--to authorize the WPP board to allot equity securities for
      cash on a non-preemptive basis up to an aggregate nominal amount of
      L7,662,089; and



    - Resolution 7--to increase the limit on the aggregate remuneration which
      may be paid to non-executive directors under WPP's articles of association
      from L250,000 to L450,000.



    - Resolution 8--to authorize the WPP board to provide special remuneration
      to non-executive directors, for any special or extra services requested by
      WPP, in the form of a right to acquire WPP ordinary shares.



    At the WPP extraordinary general meeting, on a show of hands, every share
owner of WPP who is present in person will have one vote and, on a poll, every
share owner of WPP who is present in person or by proxy will have one vote for
each WPP ordinary share held. Resolutions 1 through 5 and Resolutions 7 and 8
are ordinary resolutions and will require the approval of more than 50% of the
votes cast by WPP share owners present in person, or if on a poll, in person or
by proxy. Resolution 6 is a special resolution and will require the approval of
at least 75% of the votes cast by WPP share owners present in person or, if on a
poll, in person or by proxy. The standard quorum requirement of two members will
apply.


RESOLUTIONS REQUIRED FOR THE MERGER


    WPP share owners must approve Resolution 1 in order to complete the merger.
The election of the additional directors designated by Y&R pursuant to
Resolutions 2 to 5 by the necessary majorities is a condition to Y&R's
obligation to consummate the merger. The merger will not become effective unless
Resolutions 2 to 5 are approved by the necessary votes or Y&R waives the
requirement for approval.



PURPOSE OF RESOLUTION 1



    In addition to the approval of the merger, Resolution 1 provides for an
increase in the authorized ordinary share capital and grants authority to the
WPP board to allot shares. The increase in authorized share capital and the
board allotment authority will enable the board to allot WPP ordinary shares
pursuant to the merger.



PURPOSE OF RESOLUTION 6



    Resolution 6 grants authority to the WPP board to allot shares for cash on a
non-preemptive basis. The approval of Resolution 6 is not necessary to complete
the merger, and the merger is not


                                       23
<PAGE>

conditional on receipt of that approval. Resolution 6 is conditional on the
passing of Resolution 1 and the merger agreement becoming unconditional in all
respects.



PURPOSE OF RESOLUTION 7



    Resolution 7 increases the limit on the aggregate remuneration which may be
paid to non-executive directors under WPP's articles of association from
L250,000 to L450,000. The approval of Resolution 7 is not necessary to complete
the merger, and the merger is not conditional on receipt of that approval.



PURPOSE OF RESOLUTION 8



    Resolution 8 grants authority to the WPP board to provide special
remuneration to non-executive directors, for any special or extra services
requested by WPP, in the form of a right to acquire WPP ordinary shares. The
approval of Resolution 8 is not necessary to complete the merger, and the merger
is not conditional on receipt of that approval.


                                       24
<PAGE>
                                   THE MERGER

BACKGROUND OF THE MERGER

    On several occasions during mid-1998, Sir Martin Sorrell, chief executive of
WPP, contacted various representatives of Y&R to discuss developments in the
communication services industry and to explore possibilities for cooperation
between WPP and Y&R. No specific proposals were made by WPP at these times.

    In late 1999, Y&R management, together with the Y&R board of directors,
began to review strategic alternatives available to Y&R. In light of the fact
that the advertising and communications services industry had undergone
significant consolidation in recent years, Y&R's management and board believed
that industry participants that achieved the greatest geographic and functional
scale were likely to be at a competitive advantage and that Y&R could benefit by
being part of a larger, more diverse company. As a result, Y&R's management and
board began to explore a variety of alternatives, including: (1) pursuing a
significant acquisition, (2) entering into a combination with another major
advertising and communications services, or other, company, or (3) continuing as
an independent entity.

    On November 3, 1999, Sir Martin Sorrell and Thomas D. Bell, Jr., then chief
executive officer designate and president and chief operating officer of Y&R,
met in New York and discussed the possibility of a combination between their two
companies. On November 27, 1999, Sir Martin Sorrell and Mr. Bell met in New York
to continue their conversations regarding a combination between WPP and Y&R. At
this meeting their discussion focused on the potential benefits of a
combination. No specific proposals were made at either of these meetings. After
the second meeting, Sir Martin Sorrell and Mr. Bell agreed to meet again in
early January.

    In early December 1999, Y&R retained Morgan Stanley & Co. Incorporated as
its financial advisor to assist Y&R in its review and consideration of the
strategic alternatives available to Y&R. In late December, the Y&R Board
discussed its review of strategic alternatives. In late 1999, and early 2000,
Y&R contacted a number of companies in the advertising and communications
services industries, as well as in other industries, to explore the possibility
of a variety of strategic alliances and combinations.

    In early December 1999, WPP retained Goldman, Sachs & Co. and Merrill Lynch
International, to act as its financial advisors in connection with a possible
combination with Y&R.


    On January 3, 2000, Sir Martin Sorrell, Mr. Bell, who had become president
and chief executive officer of Y&R on January 1, and Michael J. Dolan, a
vice-chairman and then chief financial officer of Y&R, met in New York. At this
meeting, the executives discussed the potential benefits of a combination across
a number of areas, including media investment management, market research,
branding and identity, healthcare, specialist communications and public
relations and public affairs. Sir Martin Sorrell stated that the consideration
for any transaction between the companies would be shares of WPP. The Y&R
representatives stated that any transaction would have to provide Y&R
stockholders with a premium for their shares and be tax-free to Y&R's U.S.
stockholders. Although no specific prices or exchange ratios were proposed, a
general structure for a transaction was outlined. Sir Martin Sorrell also
presented ideas concerning the scope of Y&R's representation on the WPP board
and in the management of Y&R after a combination. The potential impact of a
combination on key client accounts was also discussed by both parties. Sir
Martin Sorrell and Mr. Bell spoke by telephone on several occasions during
January to further discuss the matters addressed at the January 3 meeting.


    At a regularly scheduled meeting in mid-January, the Y&R board, among other
things, reviewed the status of contacts with third parties regarding strategic
alternatives.

                                       25
<PAGE>
    On January 28, 2000, Sir Martin Sorrell and Mr. Bell met in London and
discussed a number of matters relating to a potential combination, including
opportunities for cost savings as a result of a merger, potential client
perspectives on a merger, the current roles of various senior personnel of Y&R
and their possible roles after a combination, and the composition of the
post-transaction board of WPP. Sir Martin Sorrell also proposed possible
exchange ratio ranges, which were discussed.

    During early February, Sir Martin Sorrell and Mr. Bell had a number of
telephone discussions regarding the trading ranges of their two companies' stock
and possible exchange ratios for a transaction.

    In late January and during the month of February, the Y&R board had several
calls to review the status of discussions with third parties regarding Y&R's
strategic alternatives.

    On February 8, 2000, Mr. Bell informed Sir Martin Sorrell that the Y&R board
had authorized Y&R management to continue discussions with WPP, but had
identified several issues, including pricing, governance, management and the
timing of a transaction, that remained to be resolved. Mr. Bell suggested that
Y&R and WPP's respective financial advisers and outside counsel meet to try to
resolve these various issues.

    On February 10, 2000, representatives of Goldman Sachs and Morgan Stanley,
on behalf of WPP and Y&R respectively, met to discuss the financial terms,
including possible exchange ratios, of a combination and the impact of a
transaction on WPP's expected future earnings per share. They also discussed the
potential impact of the announcement of a merger on the trading price of WPP's
shares.

    On February 13, 2000, following the execution of a confidentiality and
standstill agreement, Sir Martin Sorrell and Mr. Bell met to continue their
discussions. After this meeting, representatives of WPP and Y&R and their
respective advisors exchanged preliminary due diligence information.

    On February 18, 2000, Sir Martin Sorrell and Mr. Bell spoke by telephone
about possible exchange ratios and the trading prices of the shares of both
companies. In addition, the parties discussed WPP's request that senior
executives of Y&R execute sale restriction agreements providing that these
executives not sell their Y&R shares and the WPP shares they would receive in
the merger for a period of time and agree to certain additional non-competition
restrictions. They also discussed the governance and management of Y&R after the
completion of a combination.

    On March 5, 2000, Sir Martin Sorrell and Mr. Bell met in Key Biscayne,
Florida to continue their discussions concerning the possible terms of a
combination between WPP and Y&R. At the meeting, the parties discussed their
respective views on possible exchange ratios for a transaction and the two
companies' respective contributions to a combined company. They also discussed
the possible group of senior executives of Y&R who would agree to execute sale
restriction agreements and enter into employment and additional non-compete
agreements in connection with the merger.

    Between March 7 and March 17, 2000, the parties' respective financial
advisors continued discussions of the financial terms of a possible combination
on behalf of their respective clients.

    On March 18, 2000, WPP delivered a draft merger agreement, form of sale
restriction agreement and form of employment agreement to Y&R and its advisors.
Representatives of WPP, its outside financial advisors, Goldman Sachs and
Merrill Lynch, and its outside legal and accounting advisors conducted
operational, financial, legal and accounting due diligence reviews of Y&R, and
representatives of Y&R and its outside legal, financial and accounting advisors
conducted similar due diligence of WPP.

    On March 19, 2000, representatives of WPP and Y&R and their respective
financial and legal advisers engaged in discussions in an effort to resolve
various open issues, including the terms of the sale restriction agreements and
proposed modifications to the circumstances under which payments

                                       26
<PAGE>
would be made to various Y&R senior executives under their severance agreements
with Y&R. However, agreement was not reached on a number of these and other open
issues. On March 20, discussions between WPP and Y&R were terminated.

    In connection with its regularly scheduled meeting on March 21, the Y&R
board continued its discussion and review of Y&R's strategic alternatives,
including the status of discussions with third parties.

    During the months of March and April 2000, Y&R engaged in meetings with a
third party with respect to an acquisition of that party by Y&R that would have
resulted in the issuance of a significant amount of Y&R stock.

    On April 13, 2000, Sir Martin Sorrell sent a letter to Mr. Bell proposing a
combination of the two companies at an exchange ratio of .81 WPP ADSs for each
share of Y&R common stock. The proposal provided that five Y&R representatives
join a WPP board of 16 members on the completion of the merger and that a number
of senior executives enter into sale restriction agreements under which they
would agree (1) not to sell two-thirds of their Y&R shares and options (and WPP
shares and options received in the merger in respect of those shares and
options) for one year after execution of the merger agreement and (2) to new
non-competition agreements. The letter also proposed that, as a condition of
WPP's signing the merger agreement, a number of senior executives enter into
employment agreements providing for their employment with Y&R after completion
of the merger, under which they would waive certain rights under their existing
severance agreements and agree to non-competition restrictions upon termination
of their employment. This letter was accompanied by a revised draft merger
agreement and forms of sale restriction and employment agreements, reflecting
the terms proposed by WPP.

    On April 16, 2000, Sir Martin Sorrell met with Mr. Bell to discuss a number
of issues, including the formation of a committee to oversee the transition of
Y&R into the WPP group of companies.

    On April 17, 2000, Sir Martin Sorrell, Mr. Richardson and representatives of
Goldman Sachs and WPP's outside legal counsel met with Messrs. Bell and Dolan
and representatives of Morgan Stanley and Y&R's outside legal counsel. At this
meeting, the parties discussed the proposed exchange ratio and the governance of
Y&R after the completion of the merger. During these discussions, WPP increased
the proposed exchange ratio to .83 of a WPP ADSs for each share of Y&R common
stock, and made certain other proposals relating to the restrictions on resale
and employment agreements.

    On April 18, 2000, Sir Martin Sorrell sent a letter to Mr. Bell reaffirming
WPP's proposal for an exchange ratio of .83 of a WPP ADSs for each share of Y&R
common stock. WPP also agreed to a request made by Y&R to maintain a committee
to oversee the integration of the two companies for one year following the
completion of the merger.

    During the week of April 17th, Y&R contacted Publicis S.A., a major publicly
traded advertising and media services company based in France, concerning the
possibility of a business combination between the two companies. On April 22,
2000, Maurice Levy, the chairman and president of Publicis, along with other
representatives of Publicis and its financial and legal advisors, met in New
York with Messrs. Bell and Dolan and other representatives of Y&R and its
financial and legal advisors. They discussed the possibility of a strategic
combination between the two companies, including the financial and tax aspects
of a possible transaction. No specific terms were proposed or agreed upon.
Discussions between the two companies' respective advisors concerning a possible
transaction continued on Sunday, April 23.

    During the latter part of April, the Y&R board had a number of informational
calls to discuss the status of discussions with third parties concerning Y&R's
strategic alternatives.

                                       27
<PAGE>
    On April 24, 2000, Y&R and Publicis executed a mutual confidentiality
agreement permitting the exchange of confidential due diligence information
between those two companies, and due diligence continued through the week of
April 24-29. On April 27, Publicis delivered a draft merger agreement to Y&R.

    On April 25, 2000, Sir Martin Sorrell called Mr. Bell to request that WPP
and Y&R continue negotiations. Sir Martin Sorrell reaffirmed the proposed
exchange ratio of .83 and WPP's willingness to establish a transition committee
for one year. The Y&R board subsequently authorized senior management to
continue discussions with Publicis and to resume discussions with WPP.

    On April 25, Bear Stearns was retained by Y&R as an additional financial
advisor.

    On April 27, 2000, WPP issued a statement confirming that WPP and Y&R were
engaged in discussions regarding a possible combination. At a meeting on April
27, the Y&R board determined that Y&R should set forth clearly its position with
respect to the remaining open issues with WPP. Accordingly, later that day Y&R
delivered written comments on the draft documentation to WPP. In light of the
open issues that remained, WPP terminated discussions and issued a public
statement to that effect on May 1.

    Throughout the period from April 24 through May 6, representatives of Y&R
continued to hold discussions regarding its strategic alternatives, including
with representatives of Publicis to determine whether a transaction would be
possible between those two companies that would be more attractive to Y&R's
stockholders than other available strategic alternatives. On May 2, 2000,
Publicis publicly confirmed that it was in discussions with Y&R.

    On May 5, 2000, representatives of WPP, Goldman Sachs, and WPP's outside
legal advisors met in New York with representatives of Y&R, Morgan Stanley, Bear
Stearns and Y&R's outside legal advisors. At this meeting, discussions regarding
the proposed transaction resumed, and WPP simultaneously issued a public
statement to that effect. WPP proposed to increase the exchange ratio from .83
to .835 WPP ADSs per share of Y&R common stock and further delineated those
persons it wished to enter into employment and sale restriction agreements as a
condition to proceeding with the transaction.

    On May 7, the Y&R board met telephonically to receive an update from Y&R's
management and outside advisors. The board reviewed the status of negotiations
with WPP and with Publicis, as well as the open issues remaining with respect to
each of them. The Y&R board also reviewed the status of Y&R's other strategic
alternatives. Representatives of Morgan Stanley discussed various financial
aspects of the possible transactions. Based on concerns regarding the ability to
complete a transaction with Publicis, due to issues concerning availability of
financing and the proposed transaction structure, the Y&R board instructed
senior management to continue negotiations with WPP and to convey to Publicis
the Board's concerns.

    Following a discussion between Mr. Bell and Mr. Levy in which Mr. Bell
communicated those concerns, on May 8, Publicis issued a press release stating
that Publicis had decided to decline an invitation to bid for Y&R.

    Between May 6 and May 10, 2000, representatives of WPP and Y&R held
discussions with various senior operating executives of Y&R regarding the terms
of proposed employment agreements. Also, during that period, representatives of
Y&R and various senior executives and stockholders of Y&R held discussions
regarding the terms of the proposed sale restriction agreements. A WPP
representative was present for some of those discussions. Additionally,
representatives of the two companies and their financial and legal advisors had
further negotiations regarding the terms of the proposed transaction. From May 8
through May 11, 2000, discussions about the proposed merger took place between
Sir

                                       28
<PAGE>
Martin Sorrell, Mr. Bell and key clients of Y&R. During this period, Mr. Bell
also had discussions about the proposed merger with key employees of Y&R.

    On May 11, 2000, representatives of Y&R met again with representatives of
Publicis and discussed further possible transaction structures for a possible
strategic combination between Y&R and Publicis.

    On May 11, 2000, WPP's board met to review the proposed merger and the terms
and conditions of the merger agreement. During this meeting, WPP's management
reviewed the business rationale for the proposed transaction and the
negotiations with Y&R. A representative of WPP's outside legal counsel reviewed
the terms and conditions of the merger agreement. A representative of WPP's
outside U.K. counsel reviewed various U.K. legal matters with the board. Goldman
Sachs and Merrill Lynch presented an analysis of the financial terms of the
merger, including a discussion of valuation methodologies and analyses used in
evaluating the proposed transaction. Following discussion, the WPP board
unanimously approved the merger and the merger agreement and authorized WPP's
executive directors to execute the merger agreement. The board also unanimously
resolved to recommend that share owners of WPP vote to adopt resolutions
necessary to complete the merger.


    On May 11, 2000, the Y&R board held a special meeting to review, consider
and, if appropriate, vote upon the proposed merger with WPP. Representatives of
Y&R's management and Y&R's financial and legal advisors made presentations
regarding the various strategic alternatives available to Y&R, including the
alternatives of (1) continuing as an independent entity, (2) pursuing a
significant acquisition, (3) entering into the proposed merger with WPP, (4)
continuing to discuss a transaction with Publicis or (5) continuing to pursue
other potential strategic combinations. Management and Y&R's advisors reviewed
for the Y&R board the status of negotiations with WPP and Publicis, the business
and strategic rationales for the proposed transaction with WPP and a possible
transaction with Publicis, the terms of the transactions and certain legal or
other considerations relating to a possible transaction with Publicis, including
concerns regarding the availability of financing, the proposed transaction
structure and the availability of synergies. Management and Y&R's advisors also
reviewed, among other things, the matters set forth under "--Reasons for the
Merger" and "--Recommendation of the Y&R Board; Considerations of the Y&R
Board," as well as the provisions contained in the draft merger agreement with
WPP and the related documents, including the sale restriction agreements and
employment agreements. In addition, at this meeting, Morgan Stanley and Bear
Stearns, as co-financial advisors to Y&R, delivered their oral opinions,
subsequently confirmed in writing, each to the effect that, as of that date, and
based on the considerations in their respective opinions, the exchange ratio
pursuant to the proposed merger agreement between WPP and Y&R was fair from a
financial point of view to stockholders of Y&R. Following further discussion and
consideration, the Y&R Board unanimously approved and authorized the execution
of the merger agreement with WPP, on the terms discussed at the meeting, subject
to finalization by the two companies' management and respective legal advisors.


    In the evening of May 11, 2000, representatives of WPP's and Y&R's
management and legal advisors completed the definitive merger agreement and
related documents. Thereafter, the parties executed the merger agreement. In
addition, Mr. Dolan and Edward H. Vick, worldwide chairman and chief executive
officer of Y&R Advertising, and other senior executives of Y&R, entered into
employment agreements with Y&R as of May 11, 2000, and a group of Y&R senior
executives along with Peter A. Georgescu, Y&R's former chairman and chief
executive officer, entered into sale restriction agreements with WPP as of May
11, 2000.

    On May 12, 2000, WPP and Y&R issued a joint press release announcing the
transaction.

                                       29
<PAGE>

REASONS FOR THE MERGER



    WPP and Y&R believe that the merger will establish a combined company well
positioned to establish a world class standard of excellence in global
communications services. We believe that the combined company will be capable of
generating substantially more long-term share owner value than could be achieved
by either of our companies individually. We describe below the key benefits we
expect to derive from the merger.



    ABILITY TO OFFER A WIDE RANGE OF PRODUCTS AND SERVICES THROUGH A PREEMINENT
COMBINATION OF BRANDS. We believe that, through subsidiaries in North America,
Europe, Asia Pacific, Middle East, Africa and Latin America, under a preeminent
combination of brands, the combined company will be uniquely positioned to offer
clients the industry's widest range of products and services on a local and
global basis. These products and services and the combined company's highly
complementary portfolio of leading brands are listed below:



    - ADVERTISING--development of marketing and branding campaigns, and
      production and design of advertisements



       - from WPP: Ogilvy and Mather Worldwide, J. Walter Thompson Company and
         Conquest



       - from Y&R: Y&R Advertising, Dentsu, Young & Rubicam and Y&R 2.1



    - MEDIA INVESTMENT MANAGEMENT--planning and purchasing time and/or space in
      various media, including broadcast and cable television, radio,
      newspapers, magazines, billboards and the Internet



       - from WPP: MindShare



       - from Y&R: The Media Edge and The Digital Edge



    - INFORMATION AND CONSULTANCY--conducting consumer, media, corporate
      communications and policy research, advertising research, pre-testing,
      tracking and evaluation of advertising and promotions design and
      management of international market studies and new product development and
      testing



       - from WPP: Research International, Millward Brown, Kantar Media Research
         Center Partners, IMRB International, Winona Group and Goldfarb
         Consultants and "BRANDZ," an advanced diagnostic and predictive
         proprietary research tool



       - from Y&R: "BrandAsset-Registered Trademark- Valuator," a proprietary
         diagnostic and predictive proprietary research tool



    - PUBLIC RELATIONS--providing advice and services with respect to corporate,
      financial and marketing communications, government lobbying, crisis
      management and public affairs



       - from WPP: Hill and Knowlton, Ogilvy Public Relations Worldwide,
         Alexander Ogilvy, Timmons & Company, The Wexler Group and Buchanan
         Communications



       - from Y&R: Burson-Marsteller, Cohn & Wolfe and Robinson Lerer &
         Montgomery



    - CONSUMER RELATIONSHIP MANAGEMENT--planning, designing and implementing
      direct marketing and sales promotions, including direct mail and direct
      response television advertising, telemarketing and database and online
      marketing



       - from WPP: OgilvyOne Worldwide



       - from Y&R: impiric (formerly Wunderman Cato Johnson) and KnowledgeBase
         Marketing


                                       30
<PAGE>

    - IDENTITY AND DESIGN--providing services with respect to brand and
      corporate identity, package design, retail design and branded
      environments, verbal branding and corporate literature



       - from WPP: Enterprise IG



       - from Y&R: Landor Associates



    - HEALTHCARE--providing marketing and communications services in the
      healthcare area



       - from WPP: CommonHealth



       - from Y&R: Sudler & Hennessey



    POSITION IN ADVERTISING.  Based on WPP's and Y&R's 1999 gross income, the
combined company would have the number one or two position in the following
major geographic regions:



    - North America



    - United Kingdom



    - Continental Europe



    - Asia



    - Latin America



    - Africa and Middle East



    INFORMATION AND CONSULTANCY OPPORTUNITIES



    The combined company will have significant opportunities to offer and
provide its leading global research services, particularly its "BRANDZ" and
"BrandAsset-Registered Trademark- Valuator" proprietary diagnostic and
predictive research tools, to all current and prospective clients of the
combined company.



    INTERNET OPPORTUNITIES


    Both WPP and Y&R have recognized the potential of the Internet for fueling
growth in the communications and services industry and, together, will have one
of the industry's broadest portfolio of Internet investments. The following
chart identifies companies operating in various Internet sectors in which we
have recently made investments:


<TABLE>
<CAPTION>
                      WPP                                                    Y&R
------------------------------------------------  ----------------------------------------------------------
COMPANY           SECTOR                          COMPANY                    SECTOR
-------           ------                          -------                    ------
<S>               <C>                             <C>                        <C>
Syzygy            Web Development                 KnowledgeBase Marketing    Database marketing/CRM
Concept           Web Development                 Luminant                   Internet professional services
Net King          Portal                          Digital Convergence        Internet media targeting
e-Rewards         Loyalty                         Mediaplex                  Internet advertising technology
TWIi              B-to-B sports content           Harris Interactive         Internet research
Intraspect        Knowledge management            Cyber Dialogue             Internet marketing
Visible World     Video personalisation           Naviant                    Targeted Internet advertising
Big Words         College-based e-commerce        iWeb                       Internet advertising technology
Red Sheriff       Internet research               Streampipe                 Internet broadcasting
Metapack          e-fullfilment                   eMotion                    Digital asset management
Roundarch         e-commerce consulting           Gamut Interactive          Smartcard technology
Imagine           e-CRM
Deckchair         Online travel
Inferentia Spa    e-business consultancy
Advertising.com   New media advertising
</TABLE>


    We believe that these investments will afford us significant opportunities
to provide services to our portfolio companies and to establish relationships
with our partners in these investments.

                                       31
<PAGE>

    We believe that the combined company will be positioned to benefit
substantially from:



    - competition-driven increased spending on branding;



    - providing services to dot-coms building their brands;



    - providing services to traditional clients building Internet operations;
      and



    - providing services to Internet-related companies needing help with their
      Internet strategy.



    COST SAVINGS OPPORTUNITIES



    We believe that the combined company will have opportunities to realize cost
savings as a result of the merger. In this regard, we have quantified to date an
estimated annual operating cost savings of $30 million by the end of 2001. The
combined company expects to realize savings:



    - by spreading the cost of WPP's media research tools over a larger client
      base;



    - by combining the two companies' brand equity investment skills; and



    - by eliminating duplicative central costs and coordinating common
      activities, including financial planning, budgeting, reporting and
      control, tax and treasury management, activities relating to mergers and
      acquisitions, investor relations, human resources, property procurement,
      information technology and practice development.



    This cost savings estimate is inherently subject to significant
uncertainties and contingencies, many of which are beyond the control of WPP and
Y&R. There can be no assurances that the combined company will achieve these
cost savings, and actual savings may vary materially from this estimate. The
inclusion of this estimate in this proxy statement/prospectus should not be
regarded as an indication that WPP or Y&R considers this estimate to be an
accurate prediction of future events.


RECOMMENDATION OF THE Y&R BOARD; CONSIDERATIONS OF THE Y&R BOARD

    At a special meeting on May 11, 2000, the Y&R board unanimously determined
that the merger is advisable, and that the merger agreement and the merger are
in the best interests of Y&R and its stockholders. Accordingly, the Y&R board
recommends that the stockholders of Y&R vote "FOR" approval of the merger
agreement and the merger at the special meeting.


    In the course of reaching its decision to adopt the merger agreement, the
Y&R board consulted with management, as well as with outside legal counsel and
financial advisors, and considered the following material factors, in addition
to those set forth above under "--Reasons for the Merger:"


    - the business, operations, properties and assets, financial condition,
      competitive position, business strategy, and prospects of Y&R and WPP (as
      well as the risks involved in achieving these prospects), the nature of
      the advertising and communications services industry in which Y&R
      competes, and current industry, economic and market conditions, both on a
      historical and on a prospective basis;

    - the view of Y&R management and the Y&R board that: (1) the advertising and
      communications services industry has experienced significant consolidation
      in recent years, (2) the industry participants that achieve the greatest
      geographic and functional scale and diversity are likely to be at a
      competitive advantage relative to smaller competitors and to be better
      positioned to take advantage of long-term growth opportunities and trends,
      and (3) Y&R's business and financial performance would benefit from being
      part of a larger, more diverse company;

    - the potential stockholder value that could be expected to be generated
      from the various strategic alternatives available to Y&R, including the
      alternatives of (1) continuing as an independent

                                       32
<PAGE>
      entity, (2) pursuing a significant acquisition, and (3) entering into a
      combination with another major advertising and communications services
      company, or a company in another industry;

    - the fact that the board and management had investigated and discussed
      these strategic alternatives over a period of months, including, more
      recently: (1) a stock acquisition that would have resulted in the issuance
      of a significant number of Y&R shares and (2) a possible merger
      transaction with Publicis S.A.;

    - the publicity surrounding WPP's interest in engaging in a business
      combination with Y&R, and the fact that during the period of this
      publicity no party other than Publicis indicated an interest in engaging
      in a business combination transaction with Y&R that would have resulted in
      the Y&R stockholders receiving a premium for their shares;

    - the view of management and the board that a combination between WPP and
      Y&R would represent an excellent "fit" from a strategic standpoint, with
      minimal conflicts between their respective clients, and would produce a
      strong and diversified combined company;

    - the fact that because the WPP transaction is structured as a merger rather
      than a sale, the merger provides Y&R's stockholders with the opportunity
      to participate in a larger, more competitive company;

    - the fact that the fixed exchange ratio provided for in the merger
      agreement assures that Y&R stockholders and optionholders will hold, on a
      fully diluted basis, approximately one-third of the total issued share
      capital of WPP after the merger, as well as the possibility that because
      the exchange ratio is fixed, the value of the transaction could increase
      or decrease prior to the completion of the merger;

    - the presentations of Y&R's financial advisors concerning financial aspects
      of the proposed merger and of the various strategic alternatives available
      to Y&R, and the oral opinions received from Morgan Stanley and Bear
      Stearns, later confirmed in writing, that as of the date of those
      opinions, and based on the considerations in those opinions, the exchange
      ratio pursuant to the merger agreement was fair from a financial point of
      view to Y&R stockholders;

    - the current and historical market prices of Y&R common stock and WPP ADSs
      and ordinary shares relative to each other and relative to those of other
      industry participants, and the fact that WPP ordinary shares, as with the
      shares of companies in its peer group in Europe, have recently traded at a
      higher price-to-earnings ratio than the shares of companies in its peer
      group in the U.S.;


    - the fact that several members of Y&R's current senior management team are
      expected to play a significant role in the management of the Y&R during
      the transition following the WPP merger as well as on an ongoing basis,
      and that four current Y&R directors (or their designees), and a fifth
      designee to be appointed by those four, will be appointed to the board of
      directors of WPP and will constitute approximately one-third of the
      members of the WPP board;


    - the expectation that the WPP merger will qualify as a tax-free transaction
      for U.S. federal income tax purposes (except with respect to cash received
      for fractional shares); and

    - the terms of the WPP merger agreement, including:

       -- the nature and relatively limited number of conditions to the
          completion of the WPP merger, which the Y&R board believes increases
          the likelihood that the merger will be completed if approved by
          stockholders,

       -- the provisions that allow Y&R, under some circumstances, to furnish
          information to and conduct negotiations with third parties and that
          allow the Y&R board, upon receipt of a superior proposal, to change
          its recommendation to stockholders, and

                                       33
<PAGE>
       -- the expense reimbursement and termination fee provisions requiring WPP
          or Y&R, as the case may be, to compensate the other party in some
          circumstances in the event the merger agreement is terminated.

The Y&R board also considered the following potentially negative factors
associated with the WPP merger:

    - the fact that WPP ordinary shares have experienced substantial price
      volatility in recent months;

    - the fact that the principal trading market for WPP ordinary shares is the
      London Stock Exchange, and although WPP ADSs are quoted on the Nasdaq
      National Market, a significant portion of the WPP ADSs issued in the
      merger may "flow back" to the U.K. by conversion into the form of WPP
      ordinary shares, potentially reducing the price and the liquidity of the
      remaining WPP ADSs; and

    - the fact that the termination fee provisions of the merger agreement could
      discourage alternative proposals being made to Y&R (in this regard, the
      Y&R board took into account that these provisions are customary for
      transactions of this type, provide for amounts within the range that is
      customary for transactions of this size, and were necessary to induce WPP
      to enter into the merger agreement).

    In determining not to pursue a transaction with Publicis, the Y&R board took
into account the view of management and the board that, although the transaction
under consideration by Publicis involved a combination of stock and cash
consideration to Y&R stockholders with a stated dollar value in excess of the
then stated value of the WPP proposal, there were business, financial and tax
issues relating to the Publicis transaction that reduced its value and rendered
it substantially less certain of completion than the WPP proposal, including:

    - the belief of management that Y&R would be a better strategic "fit" as
      part of the WPP organization than as part of a Publicis organization, and
      that reconciling conflicts between Y&R and Publicis clients would be
      significantly more difficult than reconciling conflicts between Y&R and
      WPP clients;

    - the preference of senior management for the WPP transaction from a
      strategic and financial perspective, notwithstanding the fact that
      individual members of management would be subject to restrictions on
      resale of their shares and to more restrictive noncompetitive agreements
      in the WPP transaction than in a transaction with Publicis;

    - the fact that the Publicis transaction would have required the incurrence
      of a significant amount of debt to fund the cash portion of the
      transaction, which could have constrained the combined company's future
      growth;

    - the fact that Publicis shares are not currently traded in the U.S. and
      that, even if Publicis were to list American depositary shares in
      connection with the issuance of shares in a transaction, a significant
      portion of those shares would be likely to "flow back" to France by
      conversion into shares tradable in France, with a potential adverse impact
      on the price and liquidity of the American depositary shares; and

    - the risk of noncompletion or delay of the Publicis transaction due to the
      risk that the financing could not be raised, the difficulty in structuring
      a tax-free transaction, and the complicated nature of the transaction.

    In addition, in considering the proposed merger with WPP, the directors of
Y&R were aware of the interests of certain officers and directors in the merger
described under "--Interests of Directors and Officers of Y&R in the Merger."

                                       34
<PAGE>
    The foregoing discussion addresses the material information and factors
considered by the Y&R board in its consideration of the merger, including
factors that support the merger as well as those that may weigh against it. The
Y&R board conducted numerous discussions of the factors described above,
including asking questions of Y&R's management and legal and financial advisors.
In view of the variety of factors and the amount of information considered, the
Y&R board did not find it practicable to, and did not, make specific assessments
of, quantify or otherwise assign relative weights to the specific factors
considered in reaching its determination. In addition, the Y&R board did not
undertake to make any specific determination as to whether any particular
factor, or any aspect of any particular factor, was favorable or unfavorable to
its ultimate determination. The determination to approve the merger was made
after consideration of all of the factors as a whole. In addition, individual
members of the Y&R board may have given different weights to different factors.

CONSIDERATIONS OF THE WPP BOARD

    At a meeting held on May 11, 2000, the board of directors of WPP unanimously
approved the merger agreement and the merger. In the course of reaching its
conclusions on the merger, the WPP board consulted with WPP's management as well
as its outside advisors and considered a number of factors. The material factors
they considered are summarized below:


    - the reasons described under "--Reasons for the Merger;"


    - the exchange ratio for the combination;

    - the board's view that the merger represents an excellent opportunity to
      implement WPP's long-term strategy;

    - the financial and operating performance and condition and long-term
      prospects of Y&R, WPP and the combined company;

    - WPP and Y&R have quantified to date estimated pre-tax annual cost savings
      of $30 million to result from the merger during the first full year after
      completion of the merger;

    - assuming the cost savings described above are realized, WPP's earnings per
      share in the first full year after the completion of the merger are
      expected to exceed the earnings per share WPP would have generated on a
      stand-alone basis;


    - the similar philosophy and culture of WPP and Y&R and their shared
      approach to the integration of advertising and marketing services for
      clients;



    - that WPP and Y&R share a number of major clients including Ford Motor
      Company, Philip Morris, Sears and Mattel and that after the merger client
      conflicts will be managed more effectively through separate operating
      brands so that clients will be assured of confidentiality;



    - that WPP and Y&R complement one another in providing alternative operating
      brands in the areas of advertising, media investment management,
      information and consultancy, public relations and public affairs, branding
      and identity, healthcare and specialist communications, in the Internet
      sector and that in information and consultancy, Y&R's
      "BrandAsset-Registered Trademark- Valuator" and investment in Internet
      based market research will provide the combined company with additional
      opportunities;



    - their expectation that the merger will offer opportunities for growth as a
      result of enhanced operational capabilities and the opportunity to
      coordinate approaches on global, regional and national client accounts;



    - the chairman and chief executive officer of Y&R, Thomas D. Bell, Jr., will
      serve as chairman of Y&R, and Michael J. Dolan, a vice chairman and the
      president and chief operating officer of


                                       35
<PAGE>

      Y&R, will serve as president and chief executive officer of Y&R upon
      completion of the merger;


    - a number of senior executives and key employees of Y&R including
      Mr. Dolan and Edward H. Vick, worldwide chairman and chief executive
      officer of Y&R Advertising, had or would enter into employment agreements
      in connection with the execution of the merger agreement;


    - five Y&R designees will join WPP's board in connection with the merger;



    - a group of senior Y&R executives executed sale restriction agreements in
      which they have committed not to sell two-thirds, or a total of
      approximately six million shares, of their Y&R common stock and/or the
      shares received upon the exercise of stock options (and, following the
      completion of the merger, the WPP shares they will receive in the merger
      or upon the exercise of stock options that will become exercisable for WPP
      shares) for a one year period ending May 11, 2001;


    - the trading history of the stock of each company, as well as current and
      historic exchange ratios;

    - current industry developments, including continuing consolidation;

    - the commitment of each party to complete the merger as reflected in the
      merger agreement, including:

       - the conditions to closing;

       - the requirement that the parties afford their respective shareholders
         the opportunity to vote on the merger; and

       - the parties' obligations to pay a termination fee if the merger
         agreement is terminated under specified circumstances.

    The WPP board also considered the following potentially negative factors:

    - the potential problems inherent in effecting a transnational combination
      of two organizations which may divert attention from the ongoing business
      of the combined company;

    - the risk that key employees of Y&R or of WPP, who enjoy relationships with
      existing clients or otherwise contribute to the financial success of Y&R
      or WPP, may not remain with the combined company after the merger;

    - the risk that the combined company may lose clients as a result of the
      transaction or otherwise; and

    - the short term effects of the merger, and the probable resulting sales of
      shares by some Y&R stockholders, on the market price of WPP shares.

    The foregoing discussion of the factors considered by the board of directors
of WPP is not intended to be exhaustive but includes the material factors
considered by the WPP board. In view of the wide variety of factors considered
by the WPP board in connection with its evaluation of the merger and the
complexity of these matters, the WPP board did not consider it practical, and
did not attempt, to quantify, rank or otherwise assign relative weights to the
specific factors it considered in reaching its decision. The WPP board conducted
a discussion of the factors described above, including asking questions of WPP's
management and WPP's outside advisors. The WPP board reached a unanimous
consensus that the merger was in the best interests of WPP and its share owners.
In considering the factors described above, individual members of the WPP board
may have given different weights to different factors.

                                       36
<PAGE>
OPINIONS OF Y&R'S FINANCIAL ADVISORS

    OPINION OF MORGAN STANLEY & CO. INCORPORATED

    Under an engagement letter dated December 6, 1999, Y&R retained Morgan
Stanley to provide various financial advisory services, including providing a
fairness opinion in connection with the merger. The Y&R board of directors
selected Morgan Stanley to act as Y&R's financial advisor based on Morgan
Stanley's qualifications, expertise, reputation and its knowledge of the
marketing and communications services industry in general and the business and
affairs of Y&R in particular.

    At a meeting of the Y&R board of directors on May 11, 2000, Morgan Stanley
rendered its oral opinion, subsequently confirmed in writing, that, as of
May 11, 2000, and based upon and subject to the various considerations,
limitations and qualifications set forth in the written opinion, the exchange
ratio pursuant to the merger agreement was fair to holders of shares of Y&R
common stock from a financial point of view.

    The full text of the written opinion of Morgan Stanley, dated May 11, 2000,
is attached as Appendix B to this proxy statement/prospectus. It sets forth,
among other things, the assumptions made, procedures followed, matters
considered and limitations on the scope of the review undertaken by Morgan
Stanley in rendering its opinion. Y&R stockholders are urged to, and should,
read the opinion carefully and in its entirety.

    Morgan Stanley's opinion is directed to the Y&R board of directors and
addresses only the fairness to holders of shares of Y&R common stock from a
financial point of view of the exchange ratio pursuant to the merger agreement
as of the date of the opinion. Y&R stockholders should note that the opinion
does not address:

    - any other aspect of the merger;

    - Y&R's underlying business decisions to pursue the merger; or

    - the price at which WPP ADSs or ordinary shares will trade following the
      merger or any other time.

    Further, the opinion does not constitute a recommendation to any holder of
Y&R common stock, WPP ADSs or ordinary shares as to how to vote at either the
Y&R or WPP shareholders meetings held in connection with the merger.

    The summary of the opinion of Morgan Stanley set forth in this document is
qualified in its entirety by reference to the full text of the written opinion.

    In connection with rendering its opinion, Morgan Stanley, among other
things:

    - reviewed certain publicly available financial statements and other
      information of Y&R and WPP, respectively;

    - reviewed certain internal financial statements and other financial and
      operating data concerning Y&R and WPP, respectively;

    - reviewed certain financial projections prepared by the management of Y&R
      and WPP;

    - discussed the past and current operations and financial condition and the
      prospects of Y&R, including information relating to certain strategic,
      financial and operational benefits anticipated from the merger, with
      senior executives of Y&R;

    - discussed the past and current operations and financial condition and the
      prospects of WPP, including information relating to certain strategic,
      financial and operational benefits anticipated from the merger, with
      senior executives of WPP;

                                       37
<PAGE>
    - reviewed the pro forma impact of the merger on WPP's earnings per share
      and cash flows;

    - reviewed the reported prices and trading activity for Y&R common stock,
      WPP ADSs and ordinary shares;

    - compared the financial performance of Y&R and WPP and the prices and
      trading activity of Y&R common stock, WPP ADSs and ordinary shares with
      that of certain other publicly traded companies comparable with Y&R and
      WPP, respectively, and their securities;

    - reviewed the financial terms, to the extent publicly available, of certain
      comparable acquisition transactions Morgan Stanley deemed relevant;

    - participated in discussions and negotiations among representatives of Y&R,
      WPP and their financial and legal advisors;

    - reviewed the draft of the merger agreement, dated as of May 8, 2000, and
      certain related documents; and

    - performed such other analyses and considered such other factors as Morgan
      Stanley deemed appropriate.

    Morgan Stanley assumed and relied upon, without independent verification,
the accuracy and completeness of the information reviewed by it for the purposes
of its opinion. With respect to the financial projections, including information
relating to certain strategic, financial and operational benefits anticipated
from the merger, Morgan Stanley assumed that they were reasonably prepared on
bases reflecting the best currently available estimates and judgments of the
future financial performance of Y&R and WPP. In addition, Morgan Stanley assumed
that the merger will be consummated in accordance with the terms set forth in
the draft of the merger agreement, dated as of May 8, 2000, including, among
other things, that the merger will be treated as a tax-free reorganization
and/or exchange, each pursuant to the Internal Revenue Code of 1986. Morgan
Stanley also assumed that, in connection with the receipt of all necessary
regulatory approvals for the proposed merger, no restriction will be imposed
that would have material adverse effect on the benefits expected to be derived
in the merger.

    Morgan Stanley did not make any independent valuation or appraisal of the
assets or liabilities of Y&R, nor was Morgan Stanley furnished with any such
appraisals. Morgan Stanley relied without independent verification on the
assessment by the management of Y&R and WPP of their ability to retain key
clients of Y&R and WPP.

    Morgan Stanley's opinion is necessarily based on financial, economic, market
and other conditions as in effect on, and the information made available to
Morgan Stanley as of, the date of its opinion. It should be understood that
subsequent developments or changes in such conditions may affect the opinion and
Morgan Stanley does not have any obligation to update, revise or reaffirm the
opinion.

    In addition, in arriving at the opinion, Morgan Stanley was not authorized
to broadly solicit, and did not broadly solicit, interest from any party with
respect to the acquisition of Y&R or any of its assets.

    The following is a brief summary of various of the analyses performed by
Morgan Stanley in connection with its oral opinion and the preparation of its
written opinion dated May 11, 2000. Some of these summaries of financial
analyses include information presented in tabular format. In order to understand
fully the financial analyses used by Morgan Stanley, the tables must be read
together with the text of each summary. The tables alone do not constitute a
complete description of the financial analyses.

                                       38
<PAGE>
    ANALYSIS OF SELECTED PRECEDENT TRANSACTIONS

    Using publicly available information, Morgan Stanley reviewed the terms of
various announced, pending or completed industry transactions that were deemed
generally comparable to the merger. Morgan Stanley compared publicly available
financial and market statistics of the precedent transactions to the merger. The
following table presents as of May 10, 2000, the representative ranges from
these transactions for each of the following ratios:

    - price paid to estimated earnings ratio for the next fiscal year; and

    - aggregate value to earnings before interest, taxes, depreciation, and
      amortization (EBITDA) ratio for the last twelve months (LTM).

<TABLE>
<CAPTION>
                                                                LOW       MEDIAN      HIGH
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Price to Estimated Earnings.................................    15.4x      27.4x      41.9x
Aggregate Value to LTM EBITDA...............................     7.0       14.4       20.3
</TABLE>

    Based on an analysis of the corresponding estimated earnings and LTM EBITDA
for Y&R, based on estimates from securities research analysts, Morgan Stanley
estimated per share transaction values for Y&R ranging from $35 to $45. Morgan
Stanley noted that, as of May 10, 2000, the value to be received per Y&R common
share based on the exchange ratio of .835 WPP ADSs per Y&R common share was
$51.72.

    No transaction utilized as a comparison in the precedent transactions
analysis is identical to the merger. In evaluating the precedent transactions,
Morgan Stanley made judgments and assumptions regarding industry performance,
general business, economic, market and financial conditions and other matters,
many of which are beyond the control of Y&R, including the impact of competition
on Y&R and the industry in general, industry growth and the absence of any
material adverse change in the financial condition and prospects of Y&R or the
industry or in the financial markets in general. Mathematical analysis (such as
determining the average or median) is not in itself a meaningful method of using
comparable transaction data.

    COMPARABLE COMPANY ANALYSIS

    As part of its analysis, Morgan Stanley compared various financial
information of Y&R with publicly available information for various comparable
communications services companies, including U.S. companies, The Interpublic
Group of Companies, Omnicom Group Inc. and True North Communications Inc., and
European companies Cordiant Communications Group PLC, Havas Advertising S.A.,
Publicis S.A. and Saatchi & Saatchi PLC. For this analysis, Morgan Stanley
examined a range of publicly available estimates of various financial ratios for
these companies based on securities research analysts.

    The following table presents, as of May 10, 2000, the low, high and median
values for each of the following ratios with respect to all the communications
services companies, both U.S. and European, for which Morgan Stanley reviewed
estimates:

    - share price to estimated earnings per share (P/E) for 2000 and 2001;

    - share price to estimated cash earnings per share, defined as net income
      before amortization of goodwill, for 2000 and 2001;

    - aggregate value to estimated 2000 EBITDA; and

    - P/E for 2000 and 2001 to estimated long-term growth rate.

                                       39
<PAGE>

<TABLE>
<CAPTION>
                                                                LOW       MEDIAN      HIGH
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Share price to 2000 Estimated Earnings Per Share............    19.6x      35.6x      57.0x
Share price to 2001 Estimated Earnings Per Share............    17.1       29.0       45.8
Share price to 2000 Estimated Cash Earnings Per Share.......    16.7       27.6       40.4
Share price to 2001 Estimated Cash Earnings Per Share.......    15.4       23.5       34.1
Aggregate Value to Estimated 2000 EBITDA....................     8.9       14.0       21.1
2000 P/E to Estimated Long-Term Growth Rate.................     1.4        2.2        2.6
2001 P/E to Estimated Long-Term Growth Rate.................     1.1        1.8        2.2
</TABLE>

    When Morgan Stanley conducted a comparable analysis for the purpose of
estimating a value of Y&R, Morgan Stanley considered only the estimates for the
comparable U.S. companies.

    The following table presents, as of May 10, 2000, the low, high and median
values for the same ratios as presented above, with respect to the U.S.
communications services companies for which Morgan Stanley reviewed estimates:

<TABLE>
<CAPTION>
                                                                LOW       MEDIAN      HIGH
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Share price to 2000 Estimated Earnings Per Share............    19.6x      27.9x      36.9x
Share price to 2001 Estimated Earnings Per Share............    17.1       23.7       31.8
Share price to 2000 Estimated Cash Earnings Per Share.......    16.7       24.9       33.0
Share price to 2001 Estimated Cash Earnings Per Share.......    15.4       21.5       28.8
Aggregate Value to Estimated 2000 EBITDA....................     8.9       13.8       16.0
2000 P/E to Estimated Long-Term Growth Rate.................     1.4        1.7        2.3
2001 P/E to Estimated Long-Term Growth Rate.................     1.1        1.4        2.0
</TABLE>

    Based on an analysis of the estimates for the U.S. comparable companies
which Morgan Stanley reviewed, and the corresponding information for Y&R, based
on publicly available estimates of securities research analysts, Morgan Stanley
estimated per share values for Y&R ranging from $35 to $50. This range was
multiplied by estimated control premiums ranging from 25% to 40% to determine a
transaction value range of $44 to $70 per Y&R common share.

    No company utilized in the comparable company analysis is identical to Y&R.
In evaluating the comparable companies, Morgan Stanley made judgments and
assumptions with regard to industry performance, general business, economic,
market and financial conditions and other matters, many of which are beyond the
control of Y&R, including the impact of competition on the business of Y&R and
the industry generally, industry growth and the absence of any material adverse
change in the financial condition and prospects of Y&R or the industry or in the
financial markets in general. Mathematical analysis, such as determining the
average or median, is not in itself a meaningful method of using comparable
company data.

    HISTORICAL COMMON STOCK PERFORMANCE

    Morgan Stanley reviewed the recent stock price performance of WPP ADSs over
various time periods ending on May 10, 2000. Morgan Stanley observed the
following:

<TABLE>
<CAPTION>
                                                              AVERAGE CLOSING PRICE
PERIOD ENDING MAY 10, 2000                                        FOR WPP ADSS
--------------------------                                    ---------------------
<S>                                                           <C>
Prior twelve months.........................................         $63.79
Prior nine months...........................................          70.48
Prior six months............................................          80.94
Prior three months..........................................          84.26
May 10, 2000................................................          61.94
</TABLE>

                                       40
<PAGE>
    EXCHANGE RATIO ANALYSIS

    Morgan Stanley reviewed the ratios of the closing prices of Y&R's common
stock and WPP ADSs over various periods from May 10, 1999 to May 10, 2000.
Morgan Stanley examined the premiums represented by the exchange ratio over the
averages of these daily ratios over various periods and dates, including
April 7, 2000, one day prior to news reports of ongoing discussions between Y&R
and WPP. Morgan Stanley observed the following:

<TABLE>
<CAPTION>
                                                              PERIOD AVERAGE   TRANSACTION EXCHANGE
PERIOD ENDED MAY 10, 2000                                     EXCHANGE RATIO      RATIO PREMIUM
-------------------------                                     --------------   --------------------
<S>                                                           <C>              <C>
May 10, 2000................................................       0.73x               14.3%
Unaffected (April 7, 2000)..................................       0.48                73.7
Prior 30 Day Average........................................       0.61                37.7
Prior 60 Day Average........................................       0.57                47.0
Prior 90 Day Average........................................       0.60                39.3
Prior 6 Month Average.......................................       0.65                28.0
Prior 12 Month Average......................................       0.79                 5.6
</TABLE>

    COMPARATIVE STOCK PRICE PERFORMANCE

    Morgan Stanley reviewed the recent stock price performance of WPP ADSs and
compared this performance with that of stock indices comprised of U.S.-based
communications services companies (US Index) and European-based communications
services companies (European Index), respectively. These indices included the
following companies:

    US INDEX:

    - Interpublic

    - Omnicom

    - True North

    - Young & Rubicam

    EUROPEAN INDEX:

    - Cordiant

    - Havas

    - Publicis

    - Saatchi & Saatchi

    The following table presents the changes in value for these indices, as
compared to the change in the stock price of WPP ADSs over the year ending
May 10, 2000:

<TABLE>
<CAPTION>
                                                              PERCENTAGE CHANGE FOR YEAR
                                                                 ENDING MAY 10, 2000
                                                              --------------------------
<S>                                                           <C>
WPP.........................................................             12%
European Index..............................................             80%
US Index....................................................              3%
</TABLE>

                                       41
<PAGE>
    RELATIVE CONTRIBUTION ANALYSIS

    Morgan Stanley analyzed the pro forma contributions of Y&R and WPP to the
combined company assuming consummation of the merger and based on publicly
available historical results of operations and estimates from securities
research analysts for Y&R and WPP. Morgan Stanley observed, among other things,
that based on the actual revenue, EBITDA, EBIT and cash net income for fiscal
1999 for each company, Y&R would have contributed between 33% and 35% to the
combined company's pro forma revenue, EBITDA, EBIT and cash net income
information for fiscal 1999. Morgan Stanley also observed, among other things,
that based on the projected revenue, EBITDA, EBIT and cash net income for each
company, Y&R would contribute between 35% and 37% to the combined company's
projected revenue, EBITDA, EBIT and cash net income for fiscal 2000. These
figures, adjusted to reflect each company's respective capital structures, were
compared to the pro forma fully diluted ownership of the combined company by
holders of Y&R common stock and common stock equivalents of 34% implied by the
merger exchange ratio with WPP on a pro forma basis.

    PRO FORMA ANALYSIS OF THE MERGER

    Morgan Stanley analyzed the pro forma impact of the merger on WPP's
estimated cash earnings per ADS for the fiscal years ending 2000 through 2002.
The analysis was performed assuming completion of the merger at the beginning of
this period, utilizing stand-alone cash earnings estimated for the years ending
2000 through 2002 for Y&R and WPP ADSs based on various financial projections
based on estimates from securities research analysts for Y&R and WPP, including
the value of any synergies estimated by the management of each company. This
analysis indicated that the estimated cash earnings per WPP ADS would be
accretive in each year during the period.

    The preparation of a fairness opinion is a complex process and is not
necessarily susceptible to a partial analysis or summary description. In
arriving at its opinion, Morgan Stanley considered the results of all of its
analyses as a whole and did not attribute any particular weight to any
particular analysis or factor considered by it. Furthermore, Morgan Stanley
believes that selecting any portion of its analyses without considering all
analyses would create an incomplete view of the process underlying its opinion.
In addition, Morgan Stanley may have given various analyses and factors more or
less weight than other analyses and factors, and Morgan Stanley may have deemed
various assumptions more or less probable than other assumptions, so that the
ranges of valuations resulting from any particular analysis described above
should not be taken to be Morgan Stanley's view of the actual value of Y&R or
WPP.

    In performing its analyses, Morgan Stanley made numerous assumptions with
respect to industry performance, general business and economic conditions and
other matters, many of which are beyond the control of Y&R or WPP. Any estimates
contained in Morgan Stanley's analyses are not necessarily indicative of future
results or actual values, which may be significantly more or less favorable than
those suggested by these estimates. These analyses were prepared solely as a
part of Morgan Stanley's analysis of the fairness from a financial point of view
of the exchange ratio to be received by the holders of Y&R common shares
pursuant to the merger agreement and were conducted in connection with the
delivery of the Morgan Stanley opinion to the Y&R board of directors. The
analyses do not purport to be appraisals of value or to reflect the prices at
which Y&R or WPP might actually be sold or the price at which their securities
might actually trade. In addition, as described above, the Morgan Stanley
opinion was one of the many factors taken into consideration by the Y&R board of
directors in making its determination to approve the merger. The exchange ratio
and other terms of the merger agreement were determined through arm's-length
negotiations between Y&R and WPP and were approved by the Y&R board of
directors; however, Morgan Stanley did not recommend any specific consideration
to Y&R or that any specific consideration constituted the only appropriate
consideration for the merger. Consequently, the Morgan Stanley analyses as
described above should not be viewed as

                                       42
<PAGE>
determinative of the opinion of the Y&R board of directors with respect to the
value of Y&R or of whether the Y&R board of directors would have been willing to
agree to different consideration.

    Y&R retained Morgan Stanley based upon Morgan Stanley's qualifications,
experience and expertise. Morgan Stanley is an internationally recognized
investment banking and advisory firm. Morgan Stanley, as part of its investment
banking and financial advisory business, is continuously involved in the
valuation of businesses and their securities in connection with mergers and
acquisitions, negotiated underwritings, competitive biddings, secondary
distributions of listed and unlisted securities, private placements and
valuation for corporate and other purposes. In the course of its trading,
brokerage and financing activities, Morgan Stanley or its affiliates may, at any
time, hold long or short positions in, and buy and sell the debt or equity
securities or senior loans of Y&R or WPP for its account or the account of its
customers. Morgan Stanley and its affiliates have, in the past, provided
financial advisory and financing services to Y&R and its affiliates and have
received fees for the rendering of these services. Morgan Stanley may also
provide investment banking services to the combined entity in the future.

    Under the engagement letter, Morgan Stanley agreed to provide financial
advisory services and the fairness opinion in connection with the merger, and
Y&R agreed to pay Morgan Stanley the following:

    - an advisory fee if the merger is not completed, based primarily on the
      amount of time spent on the engagement by Morgan Stanley;

    - a fee equal to 25% of the transaction fee (described below) in connection
      with Y&R entering into the merger agreement; and

    - a transaction fee upon completion of the merger, against which any of the
      above fees will be credited, of approximately $17.6 million.

    In addition, Y&R has agreed to reimburse Morgan Stanley for any
out-of-pocket expenses incurred by Morgan Stanley in connection with its
engagement and to indemnify Morgan Stanley and its affiliates, their respective
directors, officers, agents and employees and each person, if any, controlling
Morgan Stanley or any of its affiliates against various liabilities and
expenses, including various liabilities under the federal securities laws,
related to or arising out of Morgan Stanley's engagement.

    OPINION OF BEAR, STEARNS & CO. INC.

    Pursuant to an engagement letter dated as of January 20, 2000, Y&R engaged
Bear, Stearns & Co. Inc. as its financial advisor based on Bear Stearns'
experience and expertise. Bear Stearns is an internationally recognized
investment banking firm that has substantial experience with a variety of
transactions in the communications services industry, including business
combinations. Bear Stearns, as part of its investment banking business, is
continuously engaged in the valuation of businesses and securities in connection
with mergers and acquisitions, divestitures, negotiated underwritings, primary
and secondary distributions of listed and unlisted securities, and private
placements.

    At the May 11, 2000 meeting of the Y&R board of directors, Bear Stearns
delivered its oral opinion, which was subsequently confirmed in a written
opinion dated May 11, 2000, to the effect that, as of that date, and subject to
the assumptions, qualifications and limitations set forth in the opinion, the
exchange ratio was fair, from a financial point of view, to Y&R's public
stockholders.

    We have attached as Appendix C to this document the full text of Bear
Stearns' written opinion and urge you to read the opinion in its entirety. This
opinion sets forth the assumptions made, some of the matters considered and
qualifications and limitations on the review undertaken by Bear Stearns.

                                       43
<PAGE>
    In reading the discussion of the fairness opinion set forth below, Y&R
stockholders should be aware that Bear Stearns' opinion:

    - was provided to the Y&R board of directors for its use and benefit in
      connection with its consideration as to whether the exchange ratio was
      fair, from a financial point of view, to Y&R's public stockholders;

    - does not address Y&R's underlying business decision to effect the merger;

    - does not constitute a recommendation to the Y&R board of directors in
      connection with the merger;

    - does not constitute a recommendation to Y&R stockholders as to how to vote
      in connection with the merger proposal; and

    - does not express any opinion as to the price or range of prices at which
      the securities of Y&R and WPP would trade subsequent to the announcement
      of the merger or as to the price or range of prices at which the
      securities of WPP may trade subsequent to the consummation of the merger.

    Although Bear Stearns evaluated the fairness of the exchange ratio from a
financial point of view to Y&R's public stockholders, the exchange ratio itself
was determined by WPP and Y&R through arm's length negotiations. Bear Stearns
did not provide advice to Y&R during the course of these negotiations.

    In arriving at its opinion, Bear Stearns, among other things:

    - reviewed the draft of the merger agreement dated May 11, 2000;

    - reviewed Y&R's Annual Reports to Stockholders and Annual Reports on Form
      10-K for the years ended December 31, 1999 and 1998, and its Current
      Reports on Form 8-K filed during the two years ended December 31, 1999;

    - reviewed various operating and financial information, including
      projections for the four years ending December 31, 2004, provided to Bear
      Stearns by Y&R's management relating to Y&R's business and prospects;

    - reviewed various estimates of revenue enhancements, cost savings and other
      combination benefits expected to result from the merger, prepared and
      provided to Bear Stearns by Y&R's management;

    - met with some members of Y&R's senior management to discuss Y&R's
      business, operations, historical and projected financial results and
      future prospects;

    - reviewed WPP's Annual Reports on Form 20-F for the years ended December
      31, 1997 and 1998, and its Reports on Form 6-K filed during the three
      years ended December 31, 1999;

    - reviewed various operating and financial information, including
      projections relating to WPP's business and prospects prepared by WPP,
      provided to Bear Stearns by Y&R's management;

    - reviewed the historical prices, trading multiples and trading volumes of
      the Y&R common stock and the WPP ADSs;

    - reviewed publicly available financial data, stock market performance data
      and trading multiples of companies which Bear Stearns deemed generally
      comparable to Y&R and WPP;

    - reviewed the terms of recent mergers and acquisitions of companies which
      Bear Stearns deemed generally comparable to Y&R and to the merger;

    - reviewed the pro forma financial results, financial condition and
      capitalization of WPP giving effect to the merger; and

    - conducted other studies, analyses, inquiries and investigations as Bear
      Stearns deemed appropriate.

                                       44
<PAGE>
    In the course of its review, Bear Stearns has relied upon and assumed,
without independent verification, the accuracy and completeness of the financial
and other information, provided to it by Y&R. With respect to projected
financial results and the potential synergies that could be achieved upon
completion of the merger, Bear Stearns has assumed that they have been
reasonably prepared on bases reflecting the best currently available estimates
and judgments of the senior management of Y&R and WPP, respectively, as to the
expected future performance of Y&R and WPP, respectively. Bear Stearns did not
meet with WPP's management. Accordingly, Bear Stearns' review and analysis of
information relating to WPP and cost savings and other combination benefits was
limited to publicly available information and information prepared by WPP and
provided to Bear Stearns by Y&R's management. Bear Stearns relied on Y&R's
management to provide any and all information relating to WPP that was relevant
to its review and analysis. Bear Stearns did not assume any responsibility for
the independent verification of any of the information or of the projections and
synergy estimates provided to it.

    In arriving at its opinion, Bear Stearns did not perform or obtain any
independent appraisal of the assets or liabilities of Y&R and WPP, nor has Bear
Stearns been furnished with any appraisals. In connection with its engagement,
Bear Stearns has not solicited, nor was Bear Stearns asked to solicit, third
party acquisition interest in Y&R. Bear Stearns has assumed that the merger will
be completed in a timely manner and in accordance with the terms of the merger
agreement without any regulatory limitations, restrictions, conditions,
amendments or modifications that collectively would have a material effect on
Y&R and WPP.

    Bear Stearns' opinion is necessarily based on economic, market and other
conditions, and the information made available to Bear Stearns, as of the date
of its opinion.

    The following is a brief summary of the material valuation and financial and
comparative analyses which Bear Stearns considered in connection with the
rendering of its opinion.

    In performing its analyses, Bear Stearns made a number of assumptions with
respect to industry performance, general business, economic, market and
financial conditions and other matters, many of which are beyond the control of
Bear Stearns, WPP and Y&R. Any estimates contained in the analyses performed by
Bear Stearns are not necessarily indicative of actual values or future results,
which may be significantly more or less favorable than suggested by these
analyses. Additionally, estimates of the value of businesses or securities do
not purport to be appraisals or to reflect the prices at which these businesses
or securities may actually be sold. Accordingly, these analyses and estimates
are inherently subject to substantial uncertainty.

    EXCHANGE RATIO AND HISTORICAL STOCK TRADING ANALYSIS.

    Based on WPP's stock price of $61.94 as of May 10, 2000, the exchange ratio
implies a 28.1% premium to Y&R's stock price of $40.38 as of April 7, 2000, the
last trading day prior to press reports of a rumored merger of WPP and Y&R, and
a premium to Y&R's average stock price during various time periods leading up to
April 7, 2000.

<TABLE>
<CAPTION>
                                                  AVG. Y&R     IMPLIED PREMIUM BASED ON WPP
                                                   STOCK     ADS PRICE AS OF 5/10/00 ($61.94)
                                                   PRICE      AND IMPLIED DEAL PRICE $51.72
                                                  --------   --------------------------------
<S>                                               <C>        <C>
April 7, 2000...................................   $40.38                   28.1%
Five trading days ended April 7, 2000...........   $41.34                   25.1%
Ten trading days ended April 7, 2000............   $45.28                   14.2%
One month ended April 7, 2000...................   $44.45                   16.4%
Three months ended April 7, 2000................   $50.95                    1.5%
Six months ended April 7, 2000..................   $51.80                   (0.2%)
One year ended April 7, 2000....................   $47.10                    9.8%
</TABLE>

                                       45
<PAGE>
    The exchange ratio also generally exceeds the ratio of the price of Y&R
common stock to the price of WPP ADSs observed over various periods leading up
to April 7, 2000.

<TABLE>
<CAPTION>
                                                                      RATIO OF Y&R / WPP
                                                          ------------------------------------------
                                                            HIGH             LOW              MEAN
                                                          --------         --------         --------
<S>                                                       <C>              <C>              <C>
April 7, 2000...........................................      NM               NM            0.481
Five trading days ended April 7, 2000...................   0.560            0.474            0.513
Ten trading days ended April 7, 2000....................   0.635            0.474            0.551
One month ended April 7, 2000...........................   0.635            0.415            0.515
Three months ended April 7, 2000........................   0.835            0.415            0.584
Six months ended April 7, 2000..........................   0.962            0.415            0.692
One year ended April 7, 2000............................   1.082            0.415            0.819
</TABLE>

    Bear Stearns also noted that between April 7 and May 10, 2000, stock prices
in the advertising sector and the market as a whole (as represented by the S&P
500) generally declined. Therefore, Bear Stearns viewed the stock price as of
April 7, 2000 as a conservative measure of an unaffected stock price for Y&R.

<TABLE>
<CAPTION>
                                                                  STOCK PRICE CHANGE
                                                           BETWEEN APRIL 7 AND MAY 10, 2000
                                                           --------------------------------
<S>                                                        <C>
DOMESTIC ADVERTISING COMPANIES
Y&R......................................................                14.6%
IPG......................................................               (10.5%)
Omnicom..................................................               (10.7%)
True North...............................................                 1.1%
    Average (excluding Y&R)..............................                (6.7%)
INTERNATIONAL ADVERTISING COMPANIES
WPP......................................................               (24.0%)
Cordiant.................................................               (10.1%)
Saatchi & Saatchi........................................                (7.8%)
Publicis.................................................                (3.7%)
Havas....................................................                (6.7%)
    Average (excluding WPP)..............................                (7.1%)
S&P 500..................................................                (8.8%)
</TABLE>

    GENERALLY COMPARABLE COMPANY ANALYSIS.

    Bear Stearns compared some operating, financial, trading and valuation
information for Y&R to some publicly available operating, financial, trading and
valuation information for selected companies, which, in Bear Stearns' judgment,
were generally comparable to Y&R for purposes of this analysis. Below is a
summary of these comparable companies based on the ratio of closing stock prices
as of May 10, 2000 to estimated 2001 cash earnings per share, which is earnings
per share before amortization expense.

<TABLE>
<CAPTION>
                                                                           LONG-TERM CASH EARNINGS
                                   2000E REVENUE   STOCK PRICE/2001 CASH          PER SHARE
                                    ($ BILLION)     EARNINGS PER SHARE             GROWTH
                                   -------------   ---------------------   -----------------------
<S>                                <C>             <C>                     <C>
Omnicom..........................       $6.0               28.6x                     17%
IPG..............................       $5.1               22.0x                     14%
WPP..............................       $3.5               27.8x                     15%
Y&R (as of 4/7/00)...............       $1.9               18.2x                     19%
True North.......................       $1.6               14.7x                     15%
Cordiant.........................       $0.7               19.7x                     15%
Saatchi & Saatchi................       $0.7               16.5x                     17%
</TABLE>

                                       46
<PAGE>
    Bear Stearns noted that in the U.S. and U.K., there generally existed a
positive correlation between revenue and the multiple of 2001 cash earnings per
share. Bear Stearns further noted that the multiple of cash earnings per share
implied by the exchange ratio for the merger (based on WPP's stock price as of
May 10, 2000) was 23.9x. This multiple represented a premium to the 2001 cash
earnings per share multiples of True North, Cordiant and Saatchi & Saatchi (all
of whom were smaller than Y&R in terms of revenue) and was within the range of
2001 cash earnings per share multiple of IPG, WPP and Omnicom (all of whom were
much larger than Y&R in terms of revenue). Bear Stearns also noted that none of
the generally comparable companies compared is identical to Y&R and that,
accordingly, any analysis of generally comparable companies necessarily involves
complex consideration and judgments concerning differences in financial and
operating characteristics and other factors that would necessarily affect the
relative trading value of Y&R versus the companies to which Y&R was being
compared.

    COMPARABLE ACQUISITION ANALYSIS.

    Bear Stearns reviewed and analyzed the publicly available financial terms of
17 selected acquisitions of advertising, marketing services and public relations
company's which, in Bear Stearns' judgment, were generally comparable to Y&R,
and compared the financial terms of these transactions to the valuation
multiples implied by the exchange ratio for the merger. These transactions
consisted of negotiated transactions completed or announced between January 1,
1998 and April 7, 2000. These transactions include:

<TABLE>
    <S>                                              <C>
    ACQUIRED COMPANY                                 ACQUIRING COMPANY
    ----------------------------------------         ----------------------------------------
    Advertising                                      Advertising
    ----------------------------------------         ----------------------------------------
    GGT Group PLC                                    Omnicom Group
    Hill Holliday                                    Interpublic Group
    Media Business Group PLC                         Interpublic Group
    Springer & Jacoby                                Omnicom Group
    Diamond Ad Ltd.                                  Cordiant Communications Group
    Fallon McElligott                                Publicis S.A.
    Abbott Mead Vickers PLC                          Omnicom Group

    Marketing Services                               Marketing Services
    ----------------------------------------         ----------------------------------------
    Sifo Research & Consulting A.B.                  WPP
    NFO Worldwide Inc.                               Interpublic Group
    KnowledgeBase Marketing Inc.                     Y&R
    Lopex PLC                                        Havas Advertising S.A.
    Intelliquest Information Group                   WPP
    M/A/R/C Group                                    Omnicom Group
    HealthWorld Corp.                                Cordiant Communications Group
    Frankel & Co.                                    Publicis S.A.
    Snyder Communications                            Havas Advertising Group

    Public Relations                                 Public Relations
    ----------------------------------------         ----------------------------------------
    International Public Relations                   Interpublic Group
</TABLE>

    Bear Stearns observed that the ratios of enterprise value, which is equity
value plus debt less cash, to revenue and earnings before interest, taxes,
depreciation and amortization expense on a trailing 12 month basis implied by
the exchange ratio for the merger was within the range of the ratios observed in
the comparable transactions listed above.

                                       47
<PAGE>

<TABLE>
<CAPTION>
                                                                           TRAILING 12 MONTH MULTIPLE
                                                      TRAILING 12 MONTH           OF ENTERPRISE
                                                         MULTIPLE OF            VALUE TO EARNINGS
                                                      ENTERPRISE VALUE       BEFORE INTEREST, TAXES,
                                                         TO REVENUES      DEPRECIATION AND AMORTIZATION
                                                      -----------------   -----------------------------
<S>                                                   <C>                 <C>
Y&R based on exchange ratio and 5/10/00 WPP ADS
  Price.............................................         2.8x                     17.4x
Comparables - High..................................         6.1x                     23.5x
Comparables - Low...................................         0.2x                      2.9x
Comparables - Mean..................................         2.0x                     12.1x
Comparables - Median................................         1.5x                     11.5x
</TABLE>

    The comparable transaction with the highest ratio of enterprise value to
earnings before interest, taxes, depreciation and amortization is the
acquisition of Snyder Communications, a marketing services firm, by Havas
Advertising S.A. (announced February 21, 2000). Bear Stearns examined the value
received by Snyder Communications' stockholders relative to various projected
metrics (based on Wall Street analyst estimates) and examined similar multiples
for Y&R, as shown below:

<TABLE>
<CAPTION>
                                                               Y&R AT MOST RECENT
                                              HAVAS / SNYDER     WPP ADS PRICE
                                              --------------   ------------------
<S>                           <C>             <C>              <C>
Revenue                              --1999       3.73x               2.8x
                                     --2000       3.41x               2.5x
                                     --2001       3.02x               2.3x
EBITDA                               --1999       23.5x              17.4x
                                     --2000       18.4x              15.1x
                                     --2001       15.9x              13.3x
Cash P/E                             --1999       40.9x              32.9x
                                     --2000       31.4x              28.2x
                                     --2001       26.9x              23.9x
P/E                                  --1999       42.1x              37.7x
                                     --2000       35.6x              31.5x
                                     --2001       29.9x              26.1x
</TABLE>

    In comparing the multiples implied by the Havas transaction to the multiples
implied by the Y&R transaction, Bear Stearns noted that the multiples for the
projected periods showed a smaller discrepancy than the trailing 12 month
multiples.

    PRO FORMA CASH EARNINGS PER SHARE ANALYSIS.

    Bear Stearns analyzed the impact of the merger on the earnings per share and
cash earnings per share of Y&R and WPP for the projected fiscal years 2000, 2001
and 2002. The accretion (dilution) stated below assumes $0, $25 million and $100
million of annual pre-tax synergies. Bear Stearns noted that the projected
dilution in earnings per share and cash earnings per share for Y&R, as
illustrated in the table below, is primarily attributable to the discrepancy in
respective trading multiples between Y&R and WPP referred to above.

<TABLE>
<CAPTION>
                                                           PROSPECTIVE 1999-2001 CASH
                                                               EARNINGS PER SHARE
                                                          ACCRETION / (DILUTION) RANGE
                                                          -----------------------------
                                                             LOW                HIGH
                                                          ----------         ----------
<S>                                                       <C>                <C>
Y&R - $0.0 Synergies.............................           (11.4%)            (14.4%)
Y&R - $25.0 Synergies............................            (8.3%)            (12.2%)
Y&R - $100.0 Synergies...........................             1.1%              (5.6%)
WPP - $0.0 Synergies.............................             2.5%               5.5%
WPP - $25.0 Synergies............................             6.1%               8.3%
WPP - $100.0 Synergies...........................            16.4%              16.9%
</TABLE>

                                       48
<PAGE>
    RELATIVE CONTRIBUTION ANALYSIS.

    Bear Stearns reviewed the relative contribution of each of WPP and Y&R to
various income statement categories of the pro forma combined company, including
1999 results, 2000 estimated and 2001 estimated revenues, earnings before
interest, taxes, depreciation and amortization and net cash income. Bear Stearns
then compared these contribution percentages to the proportion of the pro forma
outstanding shares of WPP that Y&R's stockholders would receive based on the
exchange ratio. Bear Stearns observed that Y&R's stockholders would receive
34.8% of the pro forma outstanding shares of WPP (and 33.3% of the equity
value), at the exchange ratio. Set forth below is Y&R's relative contribution to
1999 pro forma, 2000 estimated and 2001 estimated revenues, earnings before
interest, taxes, depreciation and amortization and cash net income:

<TABLE>
<CAPTION>
                                                              1999PF - 2001E
                                                              --------------
<S>                                                           <C>
Revenues....................................................  34.4% - 36.2%
Earnings before interest, taxes, depreciation and
  amortization..............................................  36.1% - 38.2%
After tax cash flow.........................................  34.3% - 35.8%
</TABLE>

    The preparation of a fairness opinion is a complex process and involves
various judgments and determinations as to the most appropriate and relevant
assumptions and financial analysis and the application of these methods to the
particular circumstances involved. Fairness opinions therefore are not readily
susceptible to partial analysis or summary description, and taking portions of
the analyses set out above, without considering the analyses as a whole, would,
in the view of Bear Stearns, create an incomplete and misleading picture of the
processes underlying the analyses considered in rendering its opinion. Bear
Stearns did not form an opinion as to whether any individual analysis or factor
(positive or negative), considered in isolation, supported or failed to support
its opinion. In arriving at its opinion, Bear Stearns considered the results of
its separate analyses and did not attribute particular weight to any one
analysis or factor. The analyses performed by Bear Stearns, particularly those
based on estimates and projections, are not necessarily indicative of actual
values or actual future results, which may be significantly more or less
favorable than suggested by these analyses. These analyses were prepared solely
as part of the Bear Stearns analysis of the fairness, from a financial point of
view, of the exchange ratio to the public stockholders of Y&R.


    Pursuant to the terms of its engagement letter with Bear Stearns, Y&R has
agreed to pay Bear Stearns a maximum total fee of $6 million, $2 million of
which was paid upon the delivery of its opinion and $4 million of which will
become payable upon completion of the merger. In the event that the merger is
not completed and Y&R receives a termination fee, Y&R has agreed to pay Bear
Stearns an additional fee of $2 million for a total fee of $4 million. In
addition, Y&R has agreed to reimburse Bear Stearns for all reasonable
out-of-pocket expenses incurred by Bear Stearns in connection with the merger,
including reasonable fees and disbursements of its legal counsel. Y&R has also
agreed to indemnify Bear Stearns against various liabilities in connection with
its engagement, including various liabilities under the federal securities laws.


    Bear Stearns has previously rendered investment banking and financial
advisory services to Y&R, for which Bear Stearns received customary
compensation. Bear Stearns may provide financial advisory and financing services
to the combined company and/or its affiliates and may receive fees for the
rendering of these services. In the ordinary course of its business, Bear
Stearns may actively trade the securities of Y&R and/or WPP for its own account
and for the accounts of its customers and, accordingly, Bear Stearns may at any
time hold a long or short position in these securities. Alan D. Schwartz, a
director of Y&R who has been designated by Y&R to be a director of WPP after the
merger, is an executive vice president and head of investment banking at Bear
Stearns.

                                       49
<PAGE>
OPINIONS OF WPP'S FINANCIAL ADVISORS

    OPINION OF GOLDMAN, SACHS & CO.

    Goldman, Sachs & Co. has delivered its written opinion, dated May 11, 2000,
to the board of directors of WPP to the effect that, as of such date, the
exchange ratio was fair from a financial point of view to WPP.

    THE FULL TEXT OF THE WRITTEN OPINION OF GOLDMAN SACHS, DATED MAY 11, 2000,
WHICH SETS FORTH ASSUMPTIONS MADE, MATTERS CONSIDERED AND LIMITATIONS ON THE
REVIEW UNDERTAKEN IN CONNECTION WITH THE OPINION, IS ATTACHED AS APPENDIX D AND
IS INCORPORATED BY REFERENCE IN THIS PROXY STATEMENT/ PROSPECTUS. YOU SHOULD
READ THE OPINION IN ITS ENTIRETY.

    In connection with its opinion, Goldman Sachs reviewed, among other things,

    - the merger agreement;

    - annual reports and accounts and annual reports on Form 20-F of WPP for
      each of the four years ended December 31, 1998;

    - unaudited preliminary consolidated financial statements for WPP and its
      subsidiaries for the year ended December 31, 1999;

    - annual reports to stockholders and annual reports on Form 10-K of Y&R for
      each of the two years ended December 31, 1999;

    - a registration statement on Form S-1, including the prospectus contained
      therein, of Y&R, dated May 11, 1998;

    - a registration statement on Form S-3, including the prospectus contained
      therein, of Y&R, dated November 17, 1999;

    - interim reports to share owners of WPP;

    - interim reports to stockholders and quarterly reports on Form 10-Q of Y&R;

    - other communications from WPP and Y&R to their respective shareholders;

    - the operating budget of Y&R for the year ending December 31, 2000,
      prepared by the management of Y&R, and adjustments to the operating budget
      made by the management of WPP;

    - internal financial analyses and forecasts for WPP prepared by the
      management of WPP;

    - financial analyses and forecasts for Y&R prepared by the management of
      WPP; and

    - cost synergies projected by the management of WPP to result from the
      merger.

    Goldman Sachs also held discussions with members of the senior management of
WPP regarding their assessment of the strategic rationale for, and the potential
benefits of, the merger and the past and current business operations, financial
condition and future prospects of WPP and Y&R. In addition, Goldman Sachs:

    - reviewed the reported price and trading activity for the WPP ordinary
      shares, WPP ADSs and Y&R common stock;

    - compared financial and stock market information for WPP and Y&R with
      similar information for other companies the securities of which are
      publicly traded;

    - reviewed the financial terms of recent business combinations in the
      advertising and marketing services industries specifically and in other
      industries generally; and

    - performed other studies and analyses Goldman Sachs considered appropriate.

    Goldman Sachs relied upon the accuracy and completeness of all of the
financial and other information discussed with or reviewed by it and assumed
such accuracy and completeness for purposes

                                       50
<PAGE>
of rendering its opinion. Goldman Sachs has assumed, with the consent of WPP's
board of directors, that the financial forecasts for Y&R prepared by the
management of WPP have been reasonably prepared on a basis reflecting the best
estimates currently available to WPP and judgments of WPP, and that such
forecasts will be realized in the amounts and time periods contemplated thereby.
Goldman Sachs did not make an independent evaluation or appraisal of the assets
and liabilities of WPP or Y&R or any of their subsidiaries and was not furnished
with any such evaluation or appraisal. The advisory services and opinion of
Goldman Sachs were provided for the information and assistance of the board of
directors of WPP in connection with its consideration of the merger, and the
opinion does not constitute a recommendation as to how any holder of WPP
ordinary shares or WPP ADSs should vote with respect to the merger.

    The following is a summary of the material financial analyses used by
Goldman Sachs in connection with providing its opinion to WPP's board of
directors on May 11, 2000.

    THE FOLLOWING SUMMARIES OF FINANCIAL ANALYSES INCLUDE INFORMATION PRESENTED
IN TABULAR FORMAT. YOU SHOULD READ THESE TABLES TOGETHER WITH THE TEXT OF EACH
SUMMARY.

    (1)  EXCHANGE RATIO ANALYSIS.  Goldman Sachs calculated the ratio of the
market price of Y&R common stock to the market price of WPP ADSs on May 10, 2000
and April 7, 2000 (one trading day prior to news reports of ongoing discussions
between Y&R and WPP) and the ratio of the average market price of Y&R common
stock to the average market price of WPP ADSs during selected periods ending
April 7, 2000 and May 10, 2000. These ratios are shown below:

<TABLE>
<CAPTION>
                               RATIO OF Y&R COMMON STOCK/                 RATIO OF Y&R COMMON STOCK/
                             WPP ADSS (AVERAGE FOR SELECTED             WPP ADSS (AVERAGE FOR SELECTED
PERIOD/DATE              PERIODS ENDING AND AS OF MAY 10, 2000)    PERIODS ENDING AND AS OF APRIL 7, 2000)
-----------              ---------------------------------------   ----------------------------------------
<S>                      <C>                                       <C>
As of May 10, 2000/
  April 7, 2000........                    0.75x                                      0.48x

One Month..............                    0.64x                                      0.53x

Three Months...........                    0.57x                                      0.57x

Six Months.............                    0.65x                                      0.69x

Twelve Months..........                    0.79x                                      0.82x
</TABLE>

    Goldman Sachs compared these ratios to the exchange ratio of .835 set forth
in the merger agreement.

    (2)  CONTRIBUTION ANALYSIS.  Goldman Sachs analyzed the percentage
contribution of WPP and Y&R to the combined company resulting from the merger
based on selected historical and estimated future operating and financial
information for WPP, Y&R and the combined company. In performing this analysis,
Goldman Sachs used WPP management's estimates for WPP and estimates of Salomon
Smith Barney, as provided in a report dated March 7, 2000, for Y&R, with
estimated adjustments to U.K. GAAP. The analysis indicated the following
percentage contributions by WPP and Y&R:

<TABLE>
<CAPTION>
                                                              WPP            Y&R
                                                          ------------   ------------
<S>                                                       <C>            <C>
Fully Diluted Equity Market Capitalization
  (as of May 10, 2000)..................................        69.4%          30.6%

Fully Diluted Equity Market Capitalization at .835x
  Exchange Ratio (as of May 10, 2000)...................        66.7%          33.3%

Range of Fiscal Year, or FY 1999 (actual), FY 2000
  (estimated) and FY 2001 (estimated) Sales, EBITDA,
  Operating Profit and Cash Earnings....................  63.5%-67.7%    32.3%-36.5%
</TABLE>

                                       51
<PAGE>
    (3)  SELECTED COMPANIES COMPARISON.  Goldman Sachs reviewed and compared
selected financial information, ratios and multiples for WPP and Y&R to
corresponding financial information, ratios and multiples for three American
(Interpublic Group of Companies Inc., Omnicom Group Inc. and True North
Communications Inc.) and four European (Cordiant Communications Group plc, Havas
Advertising S.A., Publicis S.A. and Saatchi & Saatchi plc) advertising and
marketing services companies.

    The selected companies were chosen because they are publicly-traded
advertising and marketing services companies with operations that for purposes
of analysis may be considered similar to the operations of WPP and Y&R. The
multiples and ratios were calculated using the closing price for Y&R common
stock, WPP ADSs and each of the selected companies' shares on May 10, 2000 and
were based on the most recent publicly available information. Goldman Sachs'
analyses of the selected companies compared the following to the results for WPP
and Y&R:

    - May 10, 2000 closing share price as a percentage of 52-week high share
      price;

    - enterprise value as a multiple of estimated calendar year 2000 earnings
      before interest, taxes, depreciation and amortization, or EBITDA (based on
      Wall Street research reports);

    - enterprise value as a multiple of estimated calendar year 2000 earnings
      before interest and taxes, or EBIT (based on Wall Street research
      reports);

    - the ratio of the closing share price on May 10, 2000 to estimated calendar
      year 2000 earnings per share (as provided by Institutional Brokers
      Estimate System, or IBES);

    - the ratio of the closing share price on May 10, 2000 to estimated calendar
      year 2000 cash earnings per share (based on IBES estimated earnings plus
      amortization of intangibles);

    - estimated annual 5-year growth rate (as provided by IBES); and

    - ratio of price/calendar year 2001 estimated earnings ratio to IBES
      estimated annual 5-year growth rate.

                                       52
<PAGE>
    The results of these analyses are summarized as follows:

<TABLE>
<CAPTION>
                                                         AMERICAN ADVERTISING AND    EUROPEAN ADVERTISING AND
                                                            MARKETING SERVICES          MARKETING SERVICES
                                                                 COMPANIES                   COMPANIES
                                                         -------------------------   -------------------------
                                     WPP        Y&R        MEAN          RANGE         MEAN          RANGE
                                   --------   --------   ---------   -------------   ---------   -------------
<S>                                <C>        <C>        <C>         <C>             <C>         <C>
May 10, 2000 closing share price
  as a percentage of 52-week high
  share price....................   60.0%      63.4%      80.8%       73.1%-88.5%     72.0%       70.1%-76.6%

Enterprise value as a multiple of
  estimated calendar year 2000
  EBITDA (based on Wall Street
  research reports)..............   16.4x      12.7x      12.5x        7.3x-16.3x     19.4x       16.7x-21.5x

Enterprise value as a multiple of
  estimated calendar year 2000
  EBIT (based on Wall Street
  research reports)..............   20.1x      16.5x      16.0x        9.4x-20.4x     24.6x       20.8x-27.7x

Ratio of the closing share price
  on May 10, 2000 to estimated
  calendar year 2000 earnings per
  share (as provided by IBES)....   30.5x      29.8x      28.3x       19.6x-36.9x     35.3x       22.6x-49.5x

Ratio of the closing share price
  on May 10, 2000 to estimated
  calendar year 2000 cash
  earnings per share (based on
  IBES estimated earnings plus
  amortization of intangibles)...   30.5x      25.7x      22.1x       17.0x-27.9x     31.6x       29.1x-34.6x

Estimated annual 5-year growth
  rate (as provided by IBES).....   11.0%      20.0%      15.0%       14.0%-16.0%     18.0%       15.0%-21.6%

Ratio of price/calendar year 2001
  estimated earnings ratio to
  IBES estimated annual 5-year
  growth rate....................    2.5x       1.2x       1.6x         1.2x-2.0x      1.7x         1.2x-2.1x
</TABLE>

    (4)  ANALYSIS AT VARIOUS PRICES.  Goldman Sachs calculated information
relating to the merger based on the exchange ratio of .835 WPP ADSs per share of
Y&R common stock. The calculations indicated that the fully diluted aggregate
equity consideration to be paid in the merger had a market value of $4,805
million, based on the closing price of the WPP ADSs on May 10, 2000, and
represented a 33% ownership interest in the combined company. The calculations
also indicated that the enterprise value of the combined company as a multiple
of the estimated calendar year 2000 EBITDA was 14.4x. In performing these
calculations, Goldman Sachs used WPP management's estimates for WPP and
estimates of Salomon Smith Barney, as provided in a report dated March 7, 2000,
for Y&R, with estimated adjustments to U.K. GAAP.

    (5)  SELECTED TRANSACTIONS ANALYSIS.  Goldman Sachs analyzed and compared
certain information relating to twelve selected transactions in the advertising
and marketing services industry since 1998 to similar information for the
proposed merger, including:

    - fully diluted aggregate levered consideration, which is the consideration
      paid by the acquiror plus the book value of the target's debt less cash;

    - fully diluted aggregate levered consideration as a multiple of last 12
      months revenue;

                                       53
<PAGE>
    - fully diluted aggregate levered consideration as a multiple of last 12
      months EBITDA; and

    - fully diluted aggregate levered consideration as a multiple of last 12
      months EBIT.

    The results of these analyses are summarized as follows:

<TABLE>
<CAPTION>
                                                            ADVERTISING AND MARKETING SERVICES
                                                WPP/Y&R*      INDUSTRY TRANSACTIONS (RANGE)
                                                ---------   ----------------------------------
<S>                                             <C>         <C>
Fully diluted aggregate levered consideration
  (in millions)...............................   $4,774                  $106-$2,177
Fully diluted aggregate levered consideration
  as a multiple of last 12 months revenue.....     2.8x                   0.3x-10.9x
Fully diluted aggregate levered consideration
  as a multiple of last 12 months EBITDA......    17.1x                   4.3x-19.8x
Fully diluted aggregate levered consideration
  as a multiple of last 12 months EBIT........    22.9x                  18.9x-38.5x
</TABLE>

    ----------------------------

    *   Levered value based on closing prices on May 10, 2000.

    (6)  PRO FORMA MERGER ANALYSIS.  Goldman Sachs prepared a pro forma analysis
of the financial impact of the merger to WPP. Goldman Sachs compared the
estimated 2000 and 2001 earnings per ADS of WPP on a stand alone basis to the
estimated 2000 and 2001 estimated earnings per ADS of the combined company on a
pro forma basis. In performing this analysis, Goldman Sachs used WPP
management's estimates for WPP and estimates of Salomon Smith Barney, as
provided in a report dated March 7, 2000, for Y&R, with estimated adjustments to
U.K. GAAP. Goldman Sachs performed this analysis both (A) including estimated
potential synergies in an amount of $25 million dollars to be realized in 2001
and (B) excluding potential synergies to be realized following the merger. Based
on these analyses, the merger would be accretive to WPP's earnings per ADS in
each of 2000 and 2001, both including and excluding estimated potential
synergies.

    The preparation of a fairness opinion is a complex process and is not
necessarily susceptible to partial analysis or summary description. Selecting
portions of the analyses or of the summary set forth above, without considering
the analyses as a whole, could create an incomplete view of the processes
underlying Goldman Sachs' opinion. In arriving at its fairness determination,
Goldman Sachs considered the results of all these analyses. No company or
transaction used in the above analyses as a comparison is directly comparable to
WPP or Y&R or the contemplated merger.

    The analyses were prepared solely for purposes of providing an opinion to
the WPP board of directors as to the fairness from a financial point to WPP of
the exchange ratio. The analyses do not purport to be appraisals or necessarily
reflect the prices at which businesses or securities actually may be sold.
Analyses based upon forecasts of future results are not necessarily indicative
of actual future results, which may be significantly more or less favorable than
suggested by these analyses. Because these analyses are inherently subject to
uncertainty, being based upon numerous factors or events beyond the control of
the parties or their respective advisors, none of WPP, Y&R, Goldman Sachs or any
other person assumes responsibility if future results are materially different
from those forecast.

    As described above, the financial analysis presented by Goldman Sachs to the
WPP board of directors was one of many factors taken into consideration by the
WPP board of directors in making its determination to approve the merger. The
foregoing summary does not purport to be a complete description of the analyses
performed by Goldman Sachs.

    Goldman Sachs, as part of its investment banking business, is continually
engaged in the valuation of businesses and their securities in connection with
mergers and acquisitions, negotiated underwritings, competitive biddings,
secondary distributions of listed and unlisted securities, private placements
and valuations for estate, corporate and other purposes. Goldman Sachs is
familiar with WPP having

                                       54
<PAGE>
provided investment banking services to WPP from time to time, including having
acted as its financial advisor in connection with the combination of Oglivy &
Mather's business in Australia and New Zealand with John Singleton Advertising
in October 1998, and having acted as its financial advisor in connection with,
and having participated in certain of the negotiations leading to, the merger
agreement. Goldman Sachs has also provided investment banking services to Y&R
from time to time, including having acted as an underwriter of the initial
public offering of Y&R common stock in May 1998 and public offerings of Y&R
common stock in November 1998, May 1999 and November 1999. Goldman Sachs
provides a full range of financial advisory and securities services and, in the
course of its normal trading activities, may from time to time effect
transactions and hold securities, including derivative securities, of WPP or Y&R
for its own account and for the accounts of customers.

    Pursuant to a letter agreement dated December 1, 1999, WPP engaged Goldman
Sachs to act as its financial advisor in connection with a possible merger,
acquisition or other business combination with all or a portion of the stock and
assets of Y&R. Pursuant to the terms of this letter agreement, WPP has agreed to
pay Goldman Sachs a transaction fee of $15,000,000 upon consummation of the
transaction.

    WPP also has agreed to reimburse Goldman Sachs for their reasonable
out-of-pocket expenses, including attorneys' fees, and to indemnify Goldman
Sachs against certain liabilities, including certain liabilities under the
federal securities laws.

    OPINION OF MERRILL LYNCH INTERNATIONAL

    At the May 11, 2000 meeting of the board of directors of WPP, Goldman Sachs
and Merrill Lynch presented an analysis of the financial terms of the merger,
including a discussion of valuation methodologies and analyses used in
evaluating the proposed transaction. Merrill Lynch subsequently delivered to the
board of directors of WPP its written opinion, dated as of May 11, 2000, that,
as of that date and based upon and subject to the factors and assumptions set
forth therein, the exchange ratio was fair from a financial point of view to
WPP.

    THE FULL TEXT OF MERRILL LYNCH'S WRITTEN OPINION, WHICH SETS FORTH THE
ASSUMPTIONS MADE, MATTERS CONSIDERED, AND QUALIFICATIONS AND LIMITATIONS ON THE
REVIEW UNDERTAKEN BY MERRILL LYNCH, IS ATTACHED AS APPENDIX E TO THIS PROXY
STATEMENT/PROSPECTUS AND IS INCORPORATED IN THIS PROXY STATEMENT/ PROSPECTUS BY
REFERENCE. THE SUMMARY OF THE MERRILL LYNCH OPINION SET FORTH IN THIS PROXY
STATEMENT/ PROSPECTUS IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT
OF THE MERRILL LYNCH OPINION. The Merrill Lynch opinion has been provided to the
board of directors of WPP for the board's use and benefit and is directed only
to the fairness from a financial point of view of the exchange ratio, does not
address the merits of the underlying decision of WPP to engage in the
transaction and does not constitute a recommendation to any WPP share owner as
to how that share owner should vote on the proposed merger, or any other matters
relating to the transaction. Merrill Lynch did not express any opinion as to the
prices at which WPP ordinary shares or WPP ADSs would trade following the
announcement or completion of the transaction.

    The summary set forth below does not purport to be a complete description of
the analyses underlying the Merrill Lynch opinion. The preparation of a fairness
opinion is a complex analytic process involving various determinations as to the
most appropriate and relevant methods of financial analysis and the application
of those methods to the particular circumstances and, therefore, a fairness
opinion is not readily susceptible to partial analysis or summary description.
In arriving at its opinion, Merrill Lynch did not attribute any particular
weight to any analysis or factor considered by it, but rather made qualitative
judgments as to the significance and relevance of each analysis and factor.
Accordingly, Merrill Lynch believes that its analyses must be considered as a
whole and that selecting portions of its analyses, without considering all
analyses, would create an incomplete view of the process underlying its opinion.

                                       55
<PAGE>
    In performing its analyses, numerous assumptions were made with respect to
industry performance, general business, economic, market and financial
conditions and other matters, many of which are beyond the control of Merrill
Lynch, WPP and Y&R. Any estimates contained in the analyses performed by Merrill
Lynch are not necessarily indicative of actual values or future results, which
may be significantly more or less favorable than suggested by those analyses.
Additionally, estimates of the value of businesses or securities do not purport
to be appraisals or to reflect the prices at which those businesses or
securities might actually be sold. Accordingly, these analyses and estimates are
inherently subject to substantial uncertainty.

    In arriving at its opinion, Merrill Lynch, among other things:

    - reviewed certain publicly available business and financial information
      relating to Y&R and WPP that Merrill Lynch deemed relevant;

    - reviewed certain information, including certain financial forecasts for
      Y&R, and certain internal financial forecasts for WPP, in each case
      prepared by the management of WPP, relating to the business, earnings,
      cash flow, assets, liabilities and prospects of Y&R and WPP, as well as
      the amount and timing of the cost savings and synergies expected to result
      from the merger, furnished to Merrill Lynch by Y&R and WPP, respectively;

    - conducted discussions with members of senior management and
      representatives of Y&R and WPP concerning the matters described above, as
      well as their respective businesses and prospects before and after giving
      effect to the merger and the cost savings and synergies expected to result
      from the merger;

    - reviewed the market prices and valuation multiples for shares of Y&R
      common stock, WPP ordinary shares and WPP ADSs and compared them with
      those of certain publicly traded companies that Merrill Lynch deemed
      relevant;

    - reviewed the results of operations of Y&R and WPP and compared them with
      those of certain publicly traded companies that Merrill Lynch deemed
      relevant;

    - compared the proposed financial terms of the merger with the financial
      terms of certain other transactions that Merrill Lynch deemed relevant;

    - participated in certain discussions and negotiations among representatives
      of Y&R and WPP and their financial and legal advisors;

    - reviewed the potential pro forma impact of the merger on WPP;

    - reviewed the merger agreement; and

    - reviewed other financial studies and analyses and took into account such
      other matters as Merrill Lynch deemed necessary, including Merrill Lynch's
      assessment of general economic, market and monetary conditions.

    In preparing its opinion, Merrill Lynch assumed and relied on the accuracy
and completeness of all information supplied or otherwise made available to
Merrill Lynch, discussed with or reviewed by or for Merrill Lynch, or publicly
available, and Merrill Lynch did not assume any responsibility for independently
verifying this information or undertake an independent evaluation or appraisal
of any of the assets or liabilities of Y&R or WPP and was not furnished with any
evaluation or appraisal. In addition, Merrill Lynch did not assume any
obligation to conduct any physical inspection of the properties or facilities of
Y&R or WPP. With respect to the financial forecast information for Y&R, and the
internal financial forecast information for WPP, prepared by the management of
WPP and the cost savings and synergies expected to result from the transaction
discussed with Merrill Lynch by Y&R or WPP, Merrill Lynch assumed that they had
been reasonably prepared and reflected the best currently available estimates
and judgment of Y&R's or WPP's management as to the expected future

                                       56
<PAGE>
financial performance of Y&R or WPP, as the case may be, and the cost savings
and related expenses and synergies expected to result from the transaction.
Merrill Lynch further assumed that the merger would qualify as a tax-free
reorganization for U.S. federal income tax purposes. Merrill Lynch also assumed
that the merger will be completed on the terms and conditions set forth in the
merger agreement.

    Merrill Lynch's opinion was necessarily based upon market, economic and
other conditions as they existed and could be evaluated on, and on the
information made available to Merrill Lynch as of, the date of the opinion.
Merrill Lynch assumed that in the course of obtaining the necessary regulatory
or other consents or approvals (contractual or otherwise) for the transaction,
no restrictions, including any divestiture requirements or amendments or
modifications, will be imposed that will have a material adverse effect on the
contemplated benefits of the transaction.

    Set forth below is a summary of the material analyses performed by Merrill
Lynch in connection with the Merrill Lynch opinion.

    VALUATION ANALYSIS OF Y&R AND WPP

    COMPARABLE COMPANY ANALYSIS.  A comparable public company analysis reviews a
business's operating performance and outlook relative to a group of publicly
traded peer companies to determine an implied unaffected market trading value.
Merrill Lynch considered the operating statistics, projected growth rates and
trading multiples of various comparable advertising and marketing services
companies in both the United States (The Interpublic Group of Companies, Omnicom
Group Inc. and True North Communications Inc.) and in Europe (Publicis S.A.,
Havas Advertising S.A. and Cordiant Communications Group PLC). For purposes of
comparing projected financial statistics and growth rates of these companies,
Merrill Lynch relied on various securities research analysts.

    As of May 9, 2000, Merrill Lynch analyzed four operating and financial
statistics for each of the comparable public companies. Those operating
statistics included latest twelve months EBITDA margins, five year projected EPS
growth rates, multiples of 2000 EBITDA and multiples of 2000 EPS.

    Merrill Lynch calculated for each of the comparable public companies their
operating margins of earnings before interest, taxes, depreciation and
amortization (commonly referred to as EBITDA) for the previous twelve months in
which public financial data was available to their respective revenue for the
same period. EBITDA margins ranged from a low of 12.8% to a high of 19.4%, which
compared with Y&R's EBITDA margin of 16.3% and WPP's EBITDA margin of 14.1%.

    Merrill Lynch reviewed the five year projected earnings per share (commonly
referred to as EPS) growth rates as provided by various securities research
analysts for each of the comparable public companies. EPS growth rates ranged
from a low of 10% to a high of 20%, which compared with Y&R's projected EPS
growth rate of 20% and WPPs projected EPS growth rate of 15%.

    For each comparable public company, Merrill Lynch calculated the multiple of
enterprise value to projected 2000 EBITDA. The enterprise value of each of the
selected comparable public companies was calculated as equity value plus total
debt plus the face value of preferred stock, if any, plus the value of minority
interests, if any, minus cash and marketable securities and adjusted for
off-balance sheet assets. Projected 2000 EBITDA for each comparable public
company was obtained from various securities research analysts. 2000 EBITDA
multiples ranged from a low of 8.7x to a high of 19.7x, which compared with
Y&R's 2000 EBITDA multiple of 11.4x and WPP's 2000 EBITDA multiple of 16.6x.

    Merrill Lynch also calculated the multiple of stock price to projected 2000
EPS. Projected 2000 EPS for each comparable public company was obtained from
various securities research analysts. 2000 EPS multiples ranged from a low of
18.9x to a high of 42.7x, which compared to Y&R's 2000 EPS multiple of 26.5x and
WPP's 2000 EPS multiple of 29.2x.

                                       57
<PAGE>
    Merrill Lynch then applied the various multiples to the projected EBITDA and
EPS of both Y&R and WPP taking into consideration both EBITDA margins and
projected EPS growth rates, among other things. Based upon the application of
the multiple analysis for the comparable public companies, Merrill Lynch
calculated a summary reference range of implied per share value of Y&R common
stock of $41.50 to $50.00. Similarly, Merrill Lynch determined an implied per
share value of the WPP ADSs of $66.50 to $78.75.

    No company in the group of comparable companies is identical to Y&R or WPP.
Accordingly, an analysis of the results of such a comparison is not purely
mathematical; rather, it involves complex considerations and judgments
concerning differences in historical and projected financial, trading and
operating characteristics of the comparable companies and other factors that
could affect the value of these companies, Y&R and WPP.

    COMPARABLE ACQUISITION TRANSACTION ANALYSIS.  A comparable acquisition
transaction analysis provides an implied valuation range based upon financial
information of companies which have been acquired in selected recent
transactions and which are in the same or similar industries as the business
being valued. As such, this analysis is only performed on the target company, in
this case Y&R. Merrill Lynch reviewed the publicly available financial terms and
financial statistics of nine selected acquisition transactions in the
advertising and marketing services industry over an observation period beginning
August 1996 and extending through March 2000. For purposes of its valuation
analysis, Merrill Lynch determined that the following acquisition transactions
were most comparable to the proposed transaction between WPP and Y&R:

    - Frankel & Company / Publicis S.A.

    - Snyder Communications Inc. / Havas S.A.

    - Abbot Mead Vickers plc / Omnicom Group Inc.

    - International Public Relations plc / Interpublic Group of Cos Inc.

    - Arnold Communications / Snyder Communications Inc.

    - Hill, Holliday, Connors, Cosmopulos Inc. / Interpublic Group of Cos Inc.

    - GGT Group plc / Omnicom Group Inc.

    - Bozell Jacobs Kenyon & Eckhardt Inc. / True North Communications Inc.

    - Y&R / Hellman & Friedman

    For the selected acquisition transactions listed above, Merrill Lynch
analyzed the transaction value as a multiple of both revenue and EBITDA of the
target company for the year in which the transaction occurred (based on publicly
available information and selected securities research analysts' reports) and
determined that the relevant revenue multiples ranged from a low of 0.8x to a
high of 3.9x and that the relevant EBITDA multiples ranged from a low of 7.7x to
a high of 20.2x. The transaction value of each of the selected acquisition
transactions was calculated as offer value plus total debt plus the face value
of preferred stock, if any, plus the value of minority interests, if any, minus
cash and marketable securities and adjusted for off-balance sheet assets. Based
on the application of the multiple analysis for the comparable acquisition
transactions, Merrill Lynch calculated a summary reference range of implied per
share value of Y&R common stock of $49.50 to $65.00.

    No company utilized in the comparable acquisition transaction analysis is
identical to Y&R. Accordingly, an analysis of the results of this comparison is
not purely mathematical, rather it involves complex considerations and judgments
primarily concerning differences in historical and projected financial,
operating and trading characteristics of the companies involved in the other
acquisition transactions and the circumstances surrounding those transactions.

                                       58
<PAGE>
    DISCOUNTED CASH FLOW ANALYSIS.  A discounted cash flow analysis provides
insight into the intrinsic value of a business based on the projected earnings
and capital requirements and the net present value of the subsequent cash flows
anticipated to be generated by the assets of the business. Merrill Lynch
performed a discounted cash flow analysis by estimating the present value of the
future streams of the stand-alone, unlevered, after-tax free cash flows that
would be produced by both Y&R and WPP for fiscal years 2000 through 2004, based
upon forecasts for those years prepared by the managements of Y&R and WPP.
Ranges of estimated terminal values were calculated for fiscal year 2004 based
on estimated trailing 2004 EBITDA exit multiples ranging from 11.0x to 15.0x for
Y&R and 13.0x to 17.0x for WPP. Merrill Lynch discounted the free cash flow
streams and the estimated terminal values to a present value based upon an
estimated discount rate ranging from 12.0% to 14.0% for both Y&R and WPP. Based
upon the discounted cash flow analysis, Merrill Lynch calculated a summary
reference range of implied per share value of Y&R common stock of $44.50 to
$60.75 and a summary reference range of implied per share value of the WPP ADSs
of $53.50 to $71.00, before taking into account estimated synergies anticipated
by the management of WPP to result from the transaction. Merrill Lynch further
determined that the summary reference range of implied per share value of Y&R
common stock would increase to $47.00 to $64.00 after taking into account those
synergies.

    HISTORICAL STOCK PRICE ANALYSIS.  Merrill Lynch observed that the 52-week
trading range of Y&R's common stock for the period preceding May 11, 2000 was
from $36.13 to $73.00. The 52-week trading range for the WPPs ADSs for the same
period was from $39.75 to $102.56.

    SECURITIES RESEARCH ANALYSTS' PRICE TARGETS.  Merrill Lynch also reviewed
publicly available equity research reports from selected investment banks and
observed that the range of price targets for the per share value of Y&R's common
stock published in those reports ranged from $56.00 to $68.00. Similarly,
Merrill Lynch observed that the range of price targets for the per share value
of the WPP ADSs published in their respective reports ranged from $65.00 to
$89.25.

    PRO FORMA COMBINATION ANALYSIS

    Merrill Lynch analyzed the potential pro forma impact of the transaction on
WPP's reported earnings per share, after taking into account estimated synergies
anticipated by the management of WPP to result from the transaction. Based on
financial information and synergy assumptions provided by the managements of Y&R
and WPP, Merrill Lynch analyzed the potential pro forma effect on WPP's
projected reported earnings per share for the years 2000 through 2002, by
comparing those projections to the combined projected earnings per share for Y&R
and WPP and as a combined entity. The pro forma combination analysis indicated
that the transaction would result in accretion to WPP's reported earnings per
share in 2000, 2001 and 2002, both with and without the benefit of synergies.

    RELATIVE VALUATION ANALYSIS

    CONTRIBUTION ANALYSIS.  Based on financial information provided by the
managements of Y&R and WPP, Merrill Lynch analyzed the historical and projected
financial contribution of each of Y&R and WPP and to the combined company before
synergies and transaction adjustments. Merrill Lynch reviewed the combined
company's pro forma EBITDA, net income and after-tax cash flow (defined as net
income plus depreciation and amortization, plus minority interest and less
tax-effected equity income). For the period 1999 through 2002, WPP's
contribution of EBITDA, net income and after-tax cash flow ranged from
approximately 62-63%, 65-67%, and 62-63%, respectively. These contribution
ranges compared favorably with WPP share owners' ownership of the pro forma
entity of approximately 67%.

    HISTORICAL IMPLIED EXCHANGE RATIO ANALYSIS.  Merrill Lynch calculated the
implied exchange ratio based on the trading prices of Y&R common stock divided
by the trading prices of WPP ADS over the two years from May 12, 1998 to May 9,
2000. For the time periods below, Merrill Lynch calculated the

                                       59
<PAGE>
maximum, mean and median exchange ratios implied by the historical stock prices
of WPP and Y&R during those time periods. These implied exchange ratios were
compared to the proposed exchange ratio of .835:

<TABLE>
<CAPTION>
                       TIME PERIOD                         MAXIMUM      MEAN     MINIMUM
---------------------------------------------------------  --------   --------   --------
<S>                                                        <C>        <C>        <C>
Last Two Years...........................................   1.3194     0.8925     0.4149
Last One Year............................................   1.0824     0.7903     0.4149
Last Six Months..........................................   0.9055     0.6505     0.4149
Last Three Months........................................   0.7449     0.5641     0.4149
Last One Month...........................................   0.7449     0.6316     0.4955
May 9, 2000..............................................   0.7303     0.7303     0.7303
</TABLE>

    IMPLIED EXCHANGE RATIO BASED ON VARIOUS VALUATION METHODOLOGIES.  Merrill
Lynch calculated the implied exchange ratio based on the implied summary
reference ranges of each of the valuation methodologies previously mentioned:
historical stock price analysis, securities research analysts' price targets,
comparable company analysis and discounted cash flow analysis. The comparable
acquisition transaction analysis summary reference range was not included in
this analysis as a summary reference range was only calculated for Y&R. For each
of these summary reference ranges, Merrill Lynch divided Y&R's low value per
share by WPP's high value per share to establish the minimum implied exchange
ratio and divided Y&R's high value per share by WPP's low value per share to
establish the maximum implied exchange ratio. For purposes of the implied
exchange ratio based on the discounted cash flow analysis, Merrill Lynch used
the Y&R summary reference range assuming no synergies, with synergies and with
50% of the synergies. These implied exchange ratios were compared to the
proposed exchange ratio of .835:

<TABLE>
<CAPTION>
                                                            LOW IMPLIED      HIGH IMPLIED
VALUATION METHODOLOGY                                      EXCHANGE RATIO   EXCHANGE RATIO
---------------------------------------------------------  --------------   --------------
<S>                                                        <C>              <C>
Historical Stock Price Analysis..........................       0.352            1.837
Securities Research Analysts' Price Targets..............       0.628            1.046
Comparable Company Analysis..............................       0.527            0.752
Discounted Cash Flow Analysis--No Synergies..............       0.627            1.136
Discounted Cash Flow Analysis--50% of Synergies..........       0.644            1.166
Discounted Cash Flow Analysis--100% of Synergies.........       0.662            1.196
</TABLE>

    Merrill Lynch's analysis was one of the many factors taken into
consideration by the board of directors of WPP in making its determination to
recommend the merger agreement and the transactions contemplated by the merger
agreement. Consequently, the analyses described above should not be viewed as
determinative of the opinion of the board of directors or management of WPP with
respect to the value of Y&R or whether the board would have been willing to
recommend a merger at a different level of consideration.

    WPP retained Merrill Lynch to act as financial advisor in connection with
the transaction. Merrill Lynch was selected by WPP based on Merrill Lynch's
qualifications, expertise and reputation, as well as Merrill Lynch's familiarity
with Y&R. Merrill Lynch is an internationally recognized investment banking and
advisory firm. Merrill Lynch, as part of its investment banking business, is
continuously engaged in the valuation of businesses and securities in connection
with mergers and acquisitions, negotiated underwritings, competitive biddings,
secondary distributions of listed and unlisted securities, private placements
and valuations for corporate and other purposes.

                                       60
<PAGE>
    Pursuant to an engagement letter dated March 16, 2000, WPP engaged Merrill
Lynch to provide financial advisory services to it in connection with the
transaction, including, among other things, rendering the Merrill Lynch opinion.
Pursuant to the terms of the engagement letter, WPP agreed to pay Merrill Lynch
a transaction fee upon completion of the merger of $15,000,000, or an advisory
fee totalling 25% of any termination fee paid to WPP by Y&R in the event the
transaction is terminated (this fee not to exceed $7,500,000). In addition, WPP
has agreed to reimburse Merrill Lynch for its out-of-pocket expenses, including
attorneys' fees, incurred in connection with its engagement, and to indemnify
Merrill Lynch and certain related persons against various liabilities and
expenses arising out of or in conjunction with its rendering of services under
its engagement.

    Merrill Lynch has, in the past, provided financial advisory and financing
services to WPP, Y&R and their affiliates and may continue to do so and has
received, and may receive, fees for the rendering of those services. In
addition, in the ordinary course of Merrill Lynch's business, Merrill Lynch may
actively trade WPP ordinary shares or WPP ADSs and other securities of WPP, as
well as shares of Y&R common stock, for its own account and for the accounts of
its customers and, accordingly, may at any time hold a long or short position in
those securities.

PLANS FOR Y&R AFTER THE MERGER


    SUBSIDIARY OF WPP.  Following the merger, Y&R will be an indirect wholly
owned subsidiary of WPP.



    EMPLOYMENT AGREEMENTS.  In connection with the execution of the merger
agreement, Y&R has entered into employment agreements with 22 of its senior
executives and key employees, including Michael J. Dolan, a vice chairman and
the president and chief operating officer of Y&R, and Edward H. Vick, worldwide
chairman and chief executive officer of Y&R Advertising. Mr. Dolan will serve as
president and chief executive officer of Y&R and Mr. Vick will continue to serve
in his current positions with Y&R Advertising following the merger. The
employment agreements of Messrs. Dolan and Vick are described in "--Interests of
Directors and Officers of Y&R in the Merger."


    The employment agreements (other than with respect to Messrs. Dolan and
Vick) generally provide for an initial two-year term beginning on completion of
the merger with possible six-month extensions. These agreements also provide
that if the executive or employee is terminated by Y&R without "cause" or leaves
Y&R for "good reason" within two years following the merger, each as defined in
the respective employment agreement, the executive or employee will be entitled
to receive a severance payment equal to two years of base salary and annual
bonus and to continued benefits for two years. Under the employment agreements,
termination of employment for "good reason" generally includes adverse changes
in an executive's or employee's responsibilities or salary, changes in principal
work locations of more than 50 miles and failure to maintain comparable benefits
policies and incentive compensation opportunities. In addition, the employment
agreements restrict the executive or employee for one year after termination of
their employment from working on the account of any client for whom the
executive or employee had a direct relationship or significant supervisory
responsibility or, if applicable, from performing the same corporate functions
for a competitor of Y&R, or soliciting other employees to do so, while employed
by Y&R.


    TRANSITION COMMITTEE.  WPP and Y&R have agreed that, until the first
anniversary of the completion of the merger, a four person committee will
oversee the transition of Y&R into the WPP group of companies. The committee
will initially be comprised of Thomas D. Bell, Jr., Y&R's chairman and chief
executive officer, who will be chairman of the committee, Michael J. Dolan, a
vice chairman of Y&R and Y&R's president and chief operating officer, Sir Martin
Sorrell, WPP's chief executive and Paul W. G. Richardson, WPP's finance
director. If any former Y&R executive or WPP executive ceases to be a member of
the committee, the other remaining Y&R executive or WPP executive will have the
right to select a replacement.


                                       61
<PAGE>
    Although the transition committee will not control the operation of the
businesses of Y&R or WPP, WPP has agreed that, during the first year after
completion of the merger, it will not combine any of Y&R's existing material
businesses with any other business of WPP or transfer any of those businesses to
WPP or any of its subsidiaries, or offer employment to any Y&R employees with a
member of the WPP group, without the approval of at least a majority of the
members of the committee. If WPP fails to comply with this commitment, and does
not cure that failure within 30 business days after a Y&R transition committee
member notifies WPP of that failure, the executives of Y&R who executed sale
restriction agreements agreeing not to sell a portion of their shares for one
year from May 11, 2000 will become free to sell those shares. See "The Sale
Restriction Agreements" for a description of those agreements.

    HEADQUARTERS OF Y&R ADVERTISING AGENCIES.  The merger agreement provides
that the headquarters of Y&R's advertising agencies currently located in the
U.S. will continue to be located in the U.S. after completion of the merger.

INTERESTS OF DIRECTORS AND OFFICERS OF Y&R IN THE MERGER

    Some of the directors and officers of Y&R have interests in the merger that
are different from, or in addition to, the interests of Y&R stockholders
generally. These interests, to the extent material, are described below. The Y&R
board was aware of these interests and considered them, among other matters, in
approving the merger agreement and the merger.

    CHANGE IN CONTROL SEVERANCE PLAN.  Y&R adopted a change in control severance
plan in December of 1999 to ensure the continued and dedicated service of
certain of the company's key employees in the event of an actual change in
control. The completion of merger would constitute a change in control under the
change in control severance plan. Approximately 50 key employees are eligible to
participate in the plan, including the following four executive officers, three
of whom serve on the Y&R board:

    - Thomas D. Bell, Jr., chairman, chief executive officer and director;


    - Michael J. Dolan, a vice chairman and the president, chief operating
      officer and director;


    - Edward H. Vick, worldwide chairman and chief executive officer of Y&R
      Advertising and director; and

    - Stephanie W. Abramson, executive vice president, secretary and general
      counsel.

    In the case of Messrs. Dolan and Vick and the twenty other senior executives
and key employees who entered into the employment agreements described above
under "--Plans for Y&R After the Merger--Employment Agreements," the change in
control severance plan has been superceded by the new employment agreements.

    Pursuant to the change in control severance plan, upon the termination of
the employment of a participant by Y&R other than for "cause," death or
disability, or by the participant for "good reason" (each as defined in the
change in control severance plan as supplemented by a participant's
participation schedule), during the two-year period following a change in
control, the executive will be entitled to receive the following payments and
benefits:

    - accrued and unpaid compensation, including a pro-rata annual bonus for the
      portion of the year ending on the participant's date of termination, based
      on the greater of the participant's average annual bonus earned during the
      three-year period prior to the change in control and the participant's
      annual target bonus as in effect prior to the change in control;

    - a lump sum severance benefit equal to the product of

       (a) the severance factor, which in the case of Messrs. Bell, Dolan and
           Vick is three, and with respect to other participants is two or one,
           and

                                       62
<PAGE>
       (b) the sum of the participant's annual base salary and the greater of
           the participant's average annual bonus earned during the three-year
           period prior to the change in control and the participant's annual
           target bonus as in effect prior to the change in control;

    - an amount equal to the additional benefit accruals under Y&R's defined
      benefit pension plan and employer contributions under Y&R's defined
      contribution plan, as if the participant had continued to be employed by
      the company for the number of years equal to the participant's severance
      factor; and

    - continued coverage under Y&R's welfare benefit plans for the number of
      years equal to the severance factor.

The change in control severance plan also provides that, with respect to any
awards of performance shares granted to a participant under the Y&R 1997
Incentive Compensation Plan, the performance goals and other conditions will be
deemed to be met upon a change in control and the participant will be entitled
to receive a lump sum cash payment equal to the value of those performance
shares, whether or not the participant's employment is terminated.


    In addition to the good reason events relating to changes in the terms and
conditions of a participant's employment that are specified in the change in
control severance plan, the participation schedules of Messrs. Bell, Dolan and
Vick provide that a voluntary termination of employment for any reason during
the two year period following a change in control will constitute a good reason
termination, and the participation schedules for certain other participants
provide that a voluntary termination of employment during the 90 day period
following the first anniversary of a change in control will constitute a good
reason termination.


    With respect to Messrs. Bell, Dolan and Vick, the change in control
severance plan provides that, if any payments under the change in control
severance plan or otherwise would be subject to the excise tax under
Section 4999 of the U.S. tax code, the company will provide an additional
payment so that the executive officer will retain an amount equal to the
payments he would have retained if the excise tax had not applied. The change in
control severance plan also provides that following a qualified termination, a
participant will continue to be indemnified from losses arising out of the
participant's performance as an officer, director or employee of the company. In
addition, the change in control severance plan contains non-competition and
non-solicitation provisions that apply during specified periods following a
participant's termination of employment. The benefits payable under the change
in control severance plan are in lieu of any severance benefits payable to the
participants under other agreements or severance plans of the company.

    NEW EMPLOYMENT AGREEMENTS.  In connection with entering into the merger
agreement, Y&R entered into new employment agreements with each of
Messrs. Dolan and Vick and with twenty other senior executives and key employees
of Y&R that become effective upon the completion of the merger. The new
employment agreements replace and supercede a participant's right to receive the
severance benefits provided under the change in control severance plan described
above. See "--Change in Control Severance Plan."


    The new employment agreements with each of Messrs. Dolan and Vick are for an
initial term of four years which begins upon completion of the merger. During
the term, Mr. Dolan will serve as president and chief executive officer of Y&R,
and Mr. Vick will serve as worldwide chairman and chief executive officer of Y&R
Advertising. During the term, Mr. Dolan will be entitled to receive a minimum
annual base salary of $800,000, subject to annual discretionary increases by
WPP, and an annual cash bonus with a target amount of $600,000, with the ability
to earn additional bonus amounts for performance exceeding target, provided that
Mr. Dolan's annual bonus for the year 2000 will not be less than $800,000.
Mr. Dolan will also receive a stay bonus of $800,000 on the first anniversary of
the completion of the merger if Mr. Dolan is then an employee of Y&R. During the
term, Mr. Vick will be


                                       63
<PAGE>

entitled to receive an annual base salary of $800,000 and an annual cash bonus
with a target bonus amount of $700,000, with the ability to earn additional
bonus amounts for performance exceeding target. On January 1, 2001, Mr. Dolan
will be awarded 5,000 units for the 2001-2003 performance period, and, effective
retroactive to January 1, 2000, Mr. Vick will be awarded 5,000 units for the
2000-2002 performance period, in each case under a long-term incentive plan to
be established by Y&R. The units will be payable 50% in cash on the March 15
following the end of the performance period and 50% in WPP restricted stock that
will vest in two equal installments on each of the first and second
anniversaries of the cash payment date. Messrs. Dolan and Vick will be entitled
to continue to participate in the Y&R long-term incentive plan, or a comparable
successor plan, for subsequent performance periods with the award level
determined by WPP's chief executive. In addition, in September of 2000,
Mr. Vick will be granted stock options to acquire WPP ADSs, and in September of
2001, Mr. Dolan will be granted stock options to acquire WPP ADSs, in each case
with a fair market value equal to the executive's annual base salary at the time
options are granted, subject to the terms of the WPP Group Executive Stock
Option Plan. The employment agreements also provide that each of Messrs. Dolan
and Vick will be invited to participate in the WPP Leadership Equity Acquisition
Plan and that, during the term, they will each be entitled to participate in the
incentive and employee stock option programs of WPP and in the employee benefit
programs of Y&R.


    In the event that, prior to the fourth anniversary of the completion of the
merger, the employment of Messrs. Dolan or Vick is terminated by Y&R other than
for "cause," death or disability, or by the executive for "good reason," the
terminated executive will be entitled to receive the following payments and
benefits:

    - accrued and unpaid compensation, including a pro-rata annual bonus for the
      portion of the year ending on the executive's date of termination based on
      the greater of the executive's average annual bonus earned during the
      three-year period prior to the merger and the executive's annual target
      bonus as in effect prior to the merger or, if higher, as in effect prior
      to the termination date;

    - a lump sum severance benefit equal to, if the executive's termination
      occurs before the second anniversary of the completion of the merger,
      three times, and if the executive's termination occurs within the third or
      fourth year of the executive's term, depending upon the time of
      termination, between one and two times, the sum of

       (1) his highest annual rate of salary or wages, including any amounts
           deferred at his election, in effect at any time during the year
           preceding the executive's termination; and


       (2) the greater of his average annual bonus earned during the three-year
           period before the merger and his annual target bonus preceding the
           merger;


    - an amount equal to the additional benefit accruals under Y&R's defined
      benefit pension plan and employer contributions under Y&R's defined
      contribution plan, as if the executive had continued to be employed by the
      company for three years, if the executive's termination occurs before the
      second anniversary of the completion of the merger, and between one and
      two years, depending upon the time of termination, if the executive's
      termination occurs within the third or fourth year of the executive's
      term; and

    - continued coverage under Y&R's welfare benefit plans for three years, if
      the executive's termination occurs before the second anniversary of the
      completion of the merger. If the executive's termination occurs within the
      third or fourth year of the executive's term, coverage under Y&R's welfare
      benefit plans would continue for between one and two years, depending on
      the time of termination.

                                       64
<PAGE>
    In addition, the employment agreements preserve the executive's right under
the change in control severance plan to receive a cash payment for the awards of
performance shares granted under the 1997 Incentive Compensation Plan and to be
indemnified, each as described above.


    "Good reason" is generally defined in the employment agreements with
Messrs. Dolan and Vick in the same manner as in the employment agreements
described above under "--Plans for Y&R After the Merger--Employment Agreements,"
except that in the agreements with Messrs. Dolan and Vick "good reason" also
includes the voluntary termination of their employment within the 90 day period
after the first anniversary of the completion of the merger.


    The new employment agreements for Messrs. Dolan and Vick provide that, if
any payments under the agreements or otherwise would be subject to the excise
tax under Section 4999 of the U.S. tax code, the company will provide an
additional payment so that the executive will retain a net amount equal to the
payments he would have retained if the excise tax had not applied. In addition,
their employment agreements contain non-competition, non-solicitation and
confidentiality provisions similar to those described above under "--Plans for
Y&R After the Merger--Employment Agreements."

    EFFECT OF THE MERGER ON THE Y&R EQUITY PLANS.  At the effective time of the
merger, all options to acquire shares of Y&R common stock by their terms will
become options to acquire either WPP ADSs or ordinary shares, depending
generally on whether the holder's primary place of employment is in the U.K. or
U.S., respectively. Pursuant to the equity-based plans, upon a change in control
of Y&R, except for most options granted during 2000, the unvested stock options
granted under the equity-based plans will generally vest and the restrictions on
restricted stock will generally lapse. The transactions contemplated by the
merger agreement will constitute a change in control under the stock plans.
Assuming that the merger closes on September 1, 2000, the aggregate number of
shares of Y&R common stock underlying stock options held by Messrs. Bell, Dolan
and Vick and Ms. Abramson that will become vested in connection with the merger
is approximately 1,300,000. The aggregate number of stock options held by all
non-employee directors of Y&R that will become vested in connection with the
merger is 14,000.


    THE SALE RESTRICTION AGREEMENTS.  Contemporaneously with the execution of
the merger agreement, WPP entered into sale restriction agreements with 16
senior executives of Y&R, including Messrs. Bell, Dolan and Vick, that prohibit
these executives from selling a portion of their Y&R common stock, including the
common stock underlying stock options, for the one-year period commencing on
May 11, 2000. We describe these restrictions under "The Sale Restriction
Agreements" beginning on page 93.


    INDEMNIFICATION OF DIRECTORS AND OFFICERS.  WPP has agreed that the
indemnification provisions of the certificate of incorporation and bylaws of Y&R
as in effect at the effective time of the merger will not be amended, repealed
or otherwise modified for a period of six years from the effective time of the
merger in any manner that would adversely affect the rights thereunder of
individuals who at the effective time of the merger, were directors, officers,
employees or agents of Y&R.

    WPP has agreed to cause the surviving corporation in the merger, to the
fullest extent permitted under applicable law, to indemnify and hold harmless,
each present and former director, officer, employee, and agent of Y&R or any of
its subsidiaries against any costs or expenses, including attorneys' fees,
damages and liabilities in connection with any actual or threatened claim or
investigation in connection with any action or omission occurring or alleged to
occur prior to the effective time of the merger, including, without limitation,
acts or omissions in connection with any persons serving as an officer, director
or other fiduciary in any entity if this service was at the request or for the
benefit of Y&R.

    The merger agreement requires that, for a period of six years after the
effective time of the merger, WPP will maintain in effect the current policies
of directors' and officers' liability insurance maintained by Y&R or policies
with no less favorable coverage.

                                       65
<PAGE>
ACCOUNTING TREATMENT


    WPP will account for the merger as an acquisition under U.K. GAAP in
accordance with Financial Reporting Standard 6, "Acquisitions and Mergers," and
will account for the merger as a purchase for U.S. GAAP purposes in accordance
with APB Opinion No. 16, "Business Combinations." See the "Unaudited Pro Forma
Condensed Consolidated Financial Information" beginning on page 100.



REGULATORY APPROVALS



    U.S. ANTITRUST.  Under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, we were required to give notification and furnish information
relating to the operations of WPP and Y&R to the U.S. Federal Trade Commission
and the Antitrust Division of the U.S. Department of Justice. On June 20, 2000,
WPP and Y&R each filed a premerger notification and report form under the HSR
Act with the FTC and the Department of Justice. On July 20, 2000, the HSR
waiting period expired and we have not received any request for additional
information.



    Although the HSR waiting period has expired, at any time before or after the
consummation of the merger, the Department of Justice or the FTC could take any
action under the antitrust laws that it deems necessary or desirable in the
public interest, including seeking to enjoin the completion of the merger or
seeking the divestiture of substantial assets of Y&R or WPP.



    EUROPEAN UNION.  WPP and Y&R each conducts business in member states of the
European Union. Council Regulation (EEC) 4064/89, as amended, requires
notification to and approval by the European Commission of mergers or
acquisitions involving parties with aggregate worldwide sales and individual
European Union sales exceeding specified thresholds. WPP and Y&R filed a merger
notification with the European Commission on July 24, 2000 and the European
Commission issued its decision to clear the merger on August 24, 2000.



    OTHER JURISDICTIONS.  WPP and Y&R conduct operations in other jurisdictions
where other regulatory filings or approvals may be required or advisable in
connection with the completion of the merger. These jurisdictions include
Argentina, Australia, Brazil, Hungary, Poland and South Africa. We describe
below the status of our regulatory filings in each of these jurisdictions:



    - ARGENTINA. We made the relevant filing, including the related
      documentation, with the Argentine regulatory authorities on July 18, 2000.
      Under Argentine law, the regulatory authorities have up to 45 working days
      after approval of the documentation included in the filing to issue a
      resolution with respect to the merger, although a resolution may be issued
      sooner. The documentation included in the filing was approved on
      August 17, 2000.



    - AUSTRALIA. We made the relevant filing with the Australian Foreign
      Investment Review Board (FIRB) on July 21, 2000 and approval of the merger
      was granted by the Australian FIRB on August 16, 2000.



    - BRAZIL. We made the relevant filing with the Brazilian authorities on
      June 2, 2000. Under Brazilian law, there is no minimum investigation
      period and the merger may be completed before approval is received.



    - HUNGARY. We made the relevant filing with the Hungarian authorities on
      August 4, 2000. Under Hungarian law, the regulatory authorities have a
      maximum of 90 days to conduct an initial investigation. This period may be
      extended for an additional 60 days. The Hungarian authorities have,
      however, indicated that they may issue a decision regarding the merger
      prior to the completion of the initial 90-day investigation period.



    - POLAND. We made the relevant filing with the Polish authorities on
      June 14, 2000. As the Polish authorities did not respond within the period
      allowed for investigation, the merger can be completed.


                                       66
<PAGE>

    - SOUTH AFRICA. We made the relevant filing with the South African
      authorities on June 28, 2000. Under South African law, the regulatory
      authorities have up to 90 days from the date of filing to conduct an
      investigation. If the South African authorities do not respond within the
      90-day period, the merger may be completed.



    GENERAL.  It is possible that any of the governmental entities with which
filings are made may seek regulatory concessions as conditions for granting
approval of the merger. Under the merger agreement, WPP and Y&R have each agreed
to use its reasonable best efforts to complete the merger, including to gain
clearance from antitrust and competition authorities and obtain other required
approvals. For this purpose, WPP has also agreed to offer to take and to accept,
to the extent consistent with its obligation to use reasonable best efforts, any
actions, conditions, terms or restrictions necessary to obtain any regulatory
approval, unless those conditions, terms and restrictions in the aggregate would
have a material adverse effect on WPP and Y&R on a combined basis. Also, neither
company is required to agree to any action, condition, term or restriction
unless that agreement is subject to completion of the merger. Although we do not
expect regulatory authorities to raise any significant objections in connection
with their decisions regarding the merger, we can not be certain that we will
obtain all required regulatory approvals or that these approvals will not
contain terms, conditions or restrictions that would be detrimental to WPP after
the merger.


OTHER EFFECTS OF THE MERGER


    LISTING OF SHARES.  It is a condition to the merger that the WPP ordinary
shares to be issued by WPP in connection with the merger are admitted to the
Official List of the U.K. Listing Authority and to trading on the main market of
the London Stock Exchange. If the merger is completed, the newly issued WPP
ordinary shares will be admitted to the official list of the U.K. Listing
Authority and to trading on the market for listed securities of the London Stock
Exchange and dealings in the WPP ordinary shares are expected to commence, at
8:00 a.m., London time, on the day the merger is completed. In addition, the WPP
ADSs issuable in connection with the merger will be listed on the Nasdaq
National Market upon completion of the merger. For information concerning the
material income tax consequences of the ownership of WPP ADSs and ordinary
shares, see "Material Tax Consequences--United States Federal Income Tax
Consequences of Owning WPP ADSs and Ordinary Shares."



    SUBORDINATED CONVERTIBLE NOTES OF Y&R.  The 3% subordinated convertible
notes of Y&R will remain outstanding after completion of the merger and will be
convertible into WPP ADSs. In connection with the merger, we expect to solicit
the consent of the holders of the convertible notes to:



    - amend the indenture relating to those notes to provide that, after
      completion of the merger, Y&R's obligation under the indenture to file
      with the SEC and distribute to noteholders certain financial information
      regarding Y&R may be satisfied by WPP by (1) filing with the SEC all
      periodic reports WPP is required to file under the Exchange Act and (2)
      furnishing to noteholders and the indenture trustee all financial
      information WPP distributes to holders of its ADSs; and



    - amend the registration agreement related to the indenture to release Y&R
      from its obligation to maintain a shelf registration statement for the
      resale of the convertible notes.



If the requisite consent of the convertible noteholders is obtained and the
merger is completed, WPP will, to the fullest extent permitted by law, fully and
unconditionally guarantee Y&R's payment obligations under those notes and Y&R
will discontinue filing periodic reports with the SEC under the Exchange Act.


    CONTENT AND TIMING OF REPORTS AND NOTICES OF THE COMPANIES; DEFINITION OF
FOREIGN PRIVATE ISSUER. The content and timing of reports and notices that WPP
files with the SEC differ in several respects

                                       67
<PAGE>
from the reports and notices that Y&R currently files. WPP is a foreign private
issuer for the purposes of the reporting rules under the Exchange Act.

    As a U.S. reporting company, Y&R currently must file with the SEC, among
other reports and notices:

    (1) an Annual Report on Form 10-K within 90 days after the end of each
       fiscal year;

    (2) a Quarterly Report on Form 10-Q within 45 days after the end of each
       fiscal quarter; and

    (3) Current Reports on Form 8-K upon the occurrence of various corporate
       events.

    As a foreign private issuer, pursuant to the requirements of the Exchange
Act, WPP is required to:

    (1) file with the SEC an annual report on Form 20-F within six months after
       the end of each fiscal year; and

    (2) furnish reports on Form 6-K upon the occurrence of significant corporate
       events.

    As a foreign private issuer, WPP is not required under the Exchange Act to
file quarterly reports on Form 10-Q after the end of each financial quarter.

    In addition, the content and timing of reports and notices that holders of
WPP ADSs and ordinary shares will receive will differ from the reports and
notices that are currently received by Y&R stockholders. As a U.S. reporting
company, Y&R must mail to its stockholders in advance of each annual meeting of
stockholders:

    (1) an annual report containing audited financial statements; and

    (2) a proxy statement that complies with the requirements of the Exchange
       Act.

    As a foreign private issuer, WPP is exempt from the rules under the Exchange
Act prescribing the furnishing and content of annual reports and proxy
statements to its share owners. WPP expects to retain its status as a foreign
private issuer after the completion of the merger. Under SEC rules, WPP will
retain its status as a foreign private issuer so long as either:

    - 50% or more of WPP's ordinary shares, including ordinary shares underlying
      WPP ADSs, are beneficially owned by share owners who are not residents of
      the U.S.; or

    - all three of the following conditions continue to be satisfied:

       - at least 50% of WPP's directors and its executive officers are neither
         citizens nor residents of the U.S.;

       - at least 50% of WPP's assets are located outside the U.S.; and

       - WPP's business is administered principally outside the U.S.


    After completion of the merger, U.S. share owners may hold more than 50% of
WPP's ordinary shares, including ordinary shares underlying the WPP ADSs. If at
any time at which U.S. share owners hold more than a majority of WPP's shares
and, either (1) a majority of WPP's directors or executive officers are U.S.
citizens or residents, (2) a majority of WPP's assets are located in the U.S. or
(3) WPP administers its business principally within the U.S., WPP would no
longer qualify as a foreign private issuer. If, at any time, WPP does not
qualify as a foreign private issuer, it will be required to file Annual Reports
on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. In
addition, WPP will then be subject to the rules under the Exchange Act regarding
the furnishing and content of annual reports and proxy statements to its share
owners.



    Although WPP, as a foreign private issuer, is exempt from the rules under
the Exchange Act regarding the furnishing of annual reports, under the rules of
the Nasdaq National Market, WPP is


                                       68
<PAGE>

required to distribute to the holders of its ADSs an annual report containing
audited financial statements a reasonable period of time before WPP's annual
general meeting of share owners. WPP currently furnishes holders of its ordinary
shares and ADSs with its Annual Report and Accounts which contains audited
financial statements prepared in conformity with U.K. GAAP, including U.S. GAAP
reconciliations, and a discussion of WPP's financial results that is comparable
to the management's discussion and analysis that is contained in Y&R's Annual
Reports on Form 10-K. WPP also furnishes those holders with semi-annual interim
reports, which include unaudited interim financial information prepared in
conformity with U.K. GAAP, and notices of meetings of share owners and related
documents in accordance with the rules of the London Stock Exchange. In
addition, as required by the merger agreement, effective upon completion of the
merger, WPP will amend its agreement with the depositary of the ADSs to require
that WPP furnish to the depositary sufficient copies of all reports distributed
by WPP to holders of its ordinary shares for distribution to holders of WPP ADSs
in the same manner as those reports are distributed to holders of WPP ordinary
shares. See "Description of WPP American Depositary Shares." WPP also plans to
introduce quarterly reporting in 2002.


    DELISTING OF Y&R COMMON STOCK.  If the merger is completed, we expect that
the Y&R common stock will be delisted from the NYSE and deregistered under the
Exchange Act.


    THE MARKET PRICE FOR THE WPP ADSS AND ORDINARY SHARES.  Some U.S. mutual
funds and state pension funds currently holding Y&R common stock who are
precluded from holding non-U.S. equities will be required to sell their Y&R
shares (or the WPP ADSs or ordinary shares they receive in exchange) prior to or
after completion of the merger. In addition, Y&R common stock is presently
included in the S&P 500 Index. Mutual funds and other investment vehicles whose
investment objective is to track the performance of the S&P 500 Index held, as
of June 16, 2000, approximately 7,800,000 shares of Y&R common stock. These
funds will also be required to sell their Y&R shares (or the WPP ADSs or
ordinary shares they receive in the merger) if, as is likely after the merger,
Y&R is removed from the S&P 500 and WPP is not included. Furthermore, as of
May 15, 2000, the last date for which this information is available, Y&R
employees held a total of approximately 9,600,000 shares of Y&R common stock
received pursuant to equity grants made by Y&R and, as of August 4, 2000, they
held Y&R stock options to purchase approximately 23 million shares, of which
approximately 21 million shares will vest and become immediately exercisable
upon completion of the merger. Y&R employees may sell their Y&R shares or the
WPP ADSs or ordinary shares they receive in the merger. These sales could
adversely affect the market price for the WPP ADSs and ordinary shares.


    After the combination is completed, the relative weight of WPP in the FTSE
100 Index, the FTSE Eurotop 300 Index and other indices is expected to increase.
As a result, pension funds, unit trusts and other investment vehicles whose
investment objective is to track the performance of any of these indices are
likely to increase their holdings of WPP ordinary shares which may
counterbalance the adverse effect on the market price for the WPP ADSs or
ordinary shares caused by some of the factors described above.

DIRECTORS AND MANAGEMENT OF WPP AND Y&R FOLLOWING THE MERGER

    Information regarding the directors and management of WPP after the merger
is contained under the caption "The Merger Agreement--Directors and Officers of
WPP and Y&R Following the Merger."

FINANCIAL INFORMATION

    WPP prepares its financial statements in accordance with U.K. GAAP and
presents them in pounds sterling. WPP financial statements include a
reconciliation of the U.K. GAAP financial information to U.S. GAAP and a summary
of the effects of the differences between U.K. GAAP and U.S. GAAP in accordance
with SEC rules.

                                       69
<PAGE>
    If WPP loses its status as a foreign private issuer, under SEC rules it will
be required to prepare financial statements in accordance with U.S. GAAP and
present them in U.S. dollars, in addition to its financial statements prepared
in accordance with U.K. GAAP and presented in U.K. pounds sterling. See "--Other
Effects of the Merger" above. The notes to WPP's Annual Report on Form 20-F for
the year ended December 31, 1999 describe the significant differences between
U.K. GAAP and U.S. GAAP as they relate to WPP. The notes to the Unaudited Pro
Forma Condensed Consolidated Financial Information, prepared in accordance with
U.K. GAAP, set forth a summary of certain estimated adjustments which would be
required if U.S. GAAP had been applied to that information.

DIVIDENDS


    WPP has historically paid dividends on a semi-annual basis and expects to
continue to pay semi-annual dividends on WPP ordinary shares. The amount of
future dividends of WPP will be dependent upon its earnings and financial
condition and other factors affecting its businesses. WPP's aggregate interim
and final dividends for the year ended December 31, 1999, was 3.1p per ordinary
share or $.239 per ADS (based on the exchange rates on the dates of payment). On
August 14, 2000, WPP's board of directors declared an interim dividend of 1.2p
per WPP ordinary share or 9.08 CENTS per ADS (based on the noon buying rate in
New York City on June 30, 2000 for cable transfers in pounds sterling as
certified for customs purposes by the Federal Reserve Bank of New York). WPP
expects to pay this interim dividend on November 20, 2000 to registered share
owners on September 15, 2000. These WPP dividend amounts do not include the
associated U.K. tax credit that may be available to beneficial owners of WPP
ADSs or ordinary shares who are resident in the U.S. for tax purposes.


    As described more fully below, eligible U.S. holders of WPP ADSs or ordinary
shares may be entitled to tax benefits on the payment of cash dividends by WPP.
Provided certain tax elections are made by such holders, dividend payments carry
a U.K. tax credit that, under current tax rules, is fully offset by a deemed
U.K. withholding tax. This U.K. credit and the withholding tax offset are
illustrated by the following example:

<TABLE>
<CAPTION>
EXAMPLE
-------
<S>                                                            <C>
1. Announced dividend per WPP ADS translated to U.S.
   dollars..................................................    $ .25
2. Plus: U.K. tax credit (1/9th of line 1)..................      .028
                                                                ------
3. Gross taxable amount.....................................      .278
4. Less: Deemed U.K. withholding tax (15% of line 3, up to a
   maximum of the tax credit amount)........................     (.028)
                                                                ------
5. Net dividend payment.....................................      .25
</TABLE>

    An eligible U.S. holder may be entitled to credit the amount of the deemed
U.K. withholding tax against its U.S. federal income tax liability. For more
information, see "Material Tax Consequences--United States Federal Income Tax
Consequences of Owning WPP ADSs and Ordinary Shares--Taxation of Dividends" and
"United Kingdom Tax Consequences of Owning WPP ADSs or Ordinary Shares--Taxation
of Distributions."

    Holders of WPP ordinary shares receive dividends in pounds sterling. The ADS
depositary will convert dividends received in respect of WPP ordinary shares
into U.S. dollars and distribute the dividends in U.S. dollars to holders of WPP
ADSs. See "Description of WPP American Depositary Shares--Share Dividends and
Other Distributions."

                                       70
<PAGE>
FEDERAL SECURITIES LAWS CONSEQUENCES

    All WPP ADSs and ordinary shares received in the merger by Y&R stockholders,
other than stockholders who have agreed not to sell a number of shares before
May 11, 2001, will be freely transferable, except that WPP ADSs and ordinary
shares received by persons who are deemed to be "affiliates" of Y&R under the
Securities Act of 1933, as amended, at the time of the Y&R special meeting may
be resold by them only in transactions permitted by Rule 145 under the
Securities Act or as otherwise permitted under the Securities Act. Persons who
may be deemed to be affiliates of Y&R for these purposes generally include
individuals or entities that control, are controlled by or are under common
control with Y&R and include directors and executive officers of Y&R. The merger
agreement requires Y&R to use commercially reasonable efforts to cause each of
its affiliates to execute a written agreement to the effect that he or she will
not offer, sell or otherwise dispose of any WPP ADSs or ordinary shares issued
to them in the merger in violation of the Securities Act or the related SEC
rules.

                                       71
<PAGE>
                           MATERIAL TAX CONSEQUENCES

GENERAL

    The following is a discussion of the material U.S. federal income tax
consequences of the merger to U.S. holders of Y&R common stock and the material
U.S. federal income tax considerations and U.K. tax considerations applicable to
the ownership of WPP ADSs or ordinary shares by U.S. holders. As used in this
discussion, a "U.S. holder" means (1) prior to completion of the merger, a
beneficial owner of a share of Y&R common stock or an option to acquire a Y&R
share, and (2) after completion of the merger, a beneficial owner of a WPP ADS
or ordinary share or an option to acquire a WPP ADS or ordinary share that, for
U.S. federal income tax purposes, is characterized as:

    - a citizen or individual resident of the U.S.;

    - a corporation or partnership organized in or under the laws of the U.S. or
      any state thereof, including the District of Columbia;

    - an estate the income of which is subject to U.S. federal income taxation
      regardless of its source; or

    - a trust if, in general, the trust is subject to the supervision of a court
      within the U.S. and the control of one or more U.S. persons as described
      in Section 7701(a)(30) of the U.S. Internal Revenue Code of 1986, as
      amended (the "U.S. tax code").

    This discussion does not address all aspects of U.S. federal income taxation
or U.K. taxation that may be relevant to a U.S. holder of Y&R common stock or a
U.S. holder of WPP ADSs or ordinary shares in light of their particular
circumstances. For instance, the discussion does not address all aspects of U.S.
federal income taxation or U.K. taxation to a shareholder:

    - who is resident or, in the case of an individual shareholder, ordinarily
      resident, in the U.K. for purposes of the U.K.-U.S. Income Tax Treaty of
      December 31, 1975 and the U.K.-U.S. Estate and Gift Tax Treaty of
      October 19, 1978;

    - who carries on a trade in the U.K., which for this purpose includes a
      profession or vocation in the U.K. through a branch or agency, and where
      the Y&R common stock, WPP ADSs or ordinary shares are or have been used,
      held or acquired for the purpose of that trade, branch or agency; or

    - who is an individual and who has, on or after March 17, 1998, ceased to be
      resident or ordinarily resident for tax purposes in the U.K. and continues
      to be neither resident nor ordinarily resident in the U.K. for a period of
      less than five complete years of assessment for U.K. tax purposes.

    In addition, the discussion below does not address all aspects of U.S.
federal income taxation or U.K. taxation that may be relevant to shareholders
who are subject to special provisions of U.S. federal income tax law or U.K. tax
law. For example, the discussion does not address all aspects of U.S. federal
income taxation or U.K. taxation that may be relevant to:

    - shareholders liable for alternative minimum tax;

    - shareholders that actually or constructively will own 10% or more by vote
      of the outstanding stock of WPP;

    - shareholders that hold their shares as part of a straddle, hedge,
      synthetic security, conversion transaction or other integrated investment
      composed of WPP shares and one or more other investments;

    - shareholders whose "functional currency" is not the U.S. dollar;

                                       72
<PAGE>
    - financial institutions;

    - insurance companies;

    - tax-exempt organizations;

    - traders in securities that elect mark-to-market accounting treatment; or

    - broker-dealers.

    Further, except as described in "--United States Federal Income Tax
Consequences to U.S. Holders of Employee Stock Options," the discussion below is
limited to shareholders who hold shares of Y&R common stock and, after the
merger, WPP ADSs or ordinary shares, as capital assets and does not address U.S.
state or local taxation or taxation by countries other than the U.S. and the
U.K.

    The discussion below is based on existing U.K. and U.S. federal income tax
law, including legislation, administrative rulings and court decisions, as well
as on the relevant U.K.-U.S. tax treaties, all as in effect on the date of this
proxy statement/prospectus, all of which are subject to change, or changes in
interpretation, possibly with retroactive effect. This discussion is further
based, in part, upon the representations of the depositary and the assumption
that each obligation in the deposit agreement relating to WPP ADSs and any
related agreement will be performed in accordance with its terms. The foregoing
discussion also assumes that the merger will be completed in accordance with the
terms of the merger agreement.

    Finally, WPP believes that it is not a "passive foreign investment company"
within the meaning of Section 1297(a) of the U.S. tax code or a "foreign
personal holding company" within the meaning of Section 552(a) of the U.S. tax
code and the discussion below so assumes.

    Each Y&R stockholder is advised to consult his or her own tax advisor as to
the U.S. federal income tax consequences and U.K. tax consequences of the
merger, and the ownership and disposition of the WPP ADSs or ordinary shares to
him or her, in each case in light of the facts and circumstances that may be
unique to him or her, and as to any U.K. inheritance and gift taxes, U.S.
estate, gift, state, local, or non-U.S./non-U.K. tax consequences of the merger.

UNITED STATES FEDERAL INCOME TAX CONSEQUENCES TO U.S. HOLDERS OF Y&R COMMON
  STOCK

    For U.S. federal income tax purposes, the merger will be treated as a
reorganization within the meaning of Section 368(a) of the U.S. tax code.
Accordingly, U.S. holders of Y&R common stock will not recognize gain or loss as
a result of the receipt solely of WPP ADSs or ordinary shares in exchange for
shares of Y&R common stock, except to the extent of any cash received upon the
sale of fractional WPP ADSs or ordinary shares as explained below. As further
discussed below, different rules apply to any shareholder of Y&R who,
immediately after the merger, will be a five-percent transferee shareholder, as
defined in Treasury regulations promulgated under Section 367(a) of the U.S. tax
code, with respect to WPP.

    The aggregate tax basis of the WPP ADSs or ordinary shares received in the
merger will equal the aggregate tax basis of the shares of Y&R common stock
exchanged, decreased by the basis of any Y&R common stock allocated to a
fractional interest in a WPP ADS or ordinary share that is sold for cash. The
holding period of the WPP ADSs or ordinary shares will include the holding
period of the shares of Y&R common stock for which they are exchanged.

    Fractional interests in WPP ADSs or ordinary shares will not be issued to
Y&R stockholders in the merger. In lieu of the issuance of fractional interests
in WPP ADSs or ordinary shares, any fractional interests Y&R stockholders
otherwise would have been entitled to receive will be sold and the proceeds of
that sale will be paid to those stockholders. A U.S. holder who receives cash in
respect of a fractional share will recognize gain or loss equal to the cash
amount received for the fractional

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share reduced by the U.S. holder's tax basis in Y&R common stock exchanged which
is allocable to the fractional share interest. Any gain or loss will generally
be capital gain or loss, and will be long-term capital gain or loss with respect
to shares of Y&R common stock held for more than 12 months at the effective time
of the merger.

    A U.S. holder who is a five-percent transferee shareholder with respect to
WPP after the merger will qualify for non-recognition treatment as described in
this proxy statement/prospectus only if the shareholder files a "gain
recognition agreement," as defined in Treasury regulations promulgated under
Section 367(a) of the U.S. tax code, with the U.S. Internal Revenue Service. Any
U.S. holder of Y&R stock who will be a five-percent transferee shareholder is
urged to consult with his or her tax advisor concerning the decision to file a
gain recognition agreement and the procedures to be followed in connection with
that filing.

UNITED STATES FEDERAL INCOME TAX CONSEQUENCES TO U.S. HOLDERS OF EMPLOYEE STOCK
  OPTIONS


    The conversion pursuant to the merger by a U.S. holder of an employee stock
option to acquire a share of Y&R common stock into an option to acquire WPP ADSs
or ordinary shares will not be taxable for U.S. federal income tax purposes. A
U.S. holder of an option to acquire a WPP ADS or ordinary share converted from
an option to acquire Y&R common stock that was received as compensation and who
exercises that option, will generally recognize ordinary income for U.S. federal
income tax purposes in an amount equal to the excess of the fair market value on
the exercise date of the stock received pursuant to that exercise over the price
paid for that stock pursuant to the option and be subject to applicable
withholding taxes. A U.S. holder's basis in stock received as a result of the
exercise of an option will equal the fair market value of the stock on the
exercise date and a U.S. holder's holding period begins on the exercise date.
Thereafter, the U.S. holder will be subject to the rules discussed below with
respect to U.S. holders of WPP ADSs and ordinary shares. The above discussion
does not address the U.S. federal income tax consequences of the exercise of any
option that is treated as an incentive stock option within the meaning of
section 422(b) of the U.S. tax code. Any U.S. holder of an option that is
treated as an incentive stock option is urged to consult his or her own tax
advisor concerning the consequences to him or her of the merger and exercise of
the option.


TAX OPINION

    The merger agreement provides that WPP and Y&R must each receive an opinion
from its counsel substantially to the effect that the merger will be treated as
a reorganization within the meaning of Section 368(a) of the U.S. tax code and a
U.S. holder of Y&R common stock who receives WPP ADSs or ordinary shares in
exchange for shares of Y&R common stock will not recognize gain or loss on the
exchange, except with respect to cash received upon the sale of WPP fractional
share interests. Each tax opinion from counsel will be based on representations
of WPP and Y&R and various assumptions as noted in these opinions.

    The merger agreement permits each of WPP and Y&R to waive (but neither
intends to waive) the receipt of its counsel's opinion as a condition to its
obligation to consummate the merger. The tax opinions will not be binding on the
IRS or a court and will not preclude the IRS or a court from adopting a contrary
position. Neither WPP nor Y&R will seek a ruling from the IRS as to the U.S.
federal income tax treatment of the merger.

UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF OWNING WPP ADSS AND ORDINARY
  SHARES

    In general, for U.S. federal income tax purposes, U.S. holders of WPP ADSs
will be treated as the owners of the underlying WPP ordinary shares, and
deposits and withdrawals of WPP ordinary shares by U.S. holders in exchange for
WPP ADSs will not be subject to U.S. federal income tax.

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    TAXATION OF DIVIDENDS

    For U.S. federal income tax purposes, a U.S. holder will generally include
in gross income the amount of any dividend paid by WPP plus, provided that
certain tax elections are made, as discussed more fully below, see "United
Kingdom Tax Consequences of Owning WPP ADSs and Ordinary Shares--Taxation of
Distributions," the full amount of any U.K. tax credit considered to be received
(unreduced by any applicable U.K. withholding tax), to the extent paid out of
WPP's current and/or accumulated earnings and profits, as determined for U.S.
federal income tax purposes, as ordinary income when the dividend is actually
received by the U.S. holder in the case of WPP ordinary shares or constructively
received by the U.S. holder in the case of dividends paid to the depositary with
respect to WPP ADSs. The dividend will generally not be eligible for the
dividends-received deduction generally allowed to U.S. corporations in respect
of dividends received from other U.S. corporations. Distributions in excess of
WPP's current and/or accumulated earnings and profits, as determined for U.S.
federal income tax purposes, will be treated as a non-taxable return of capital
to the extent of the U.S. holder's tax basis in the WPP ADSs or ordinary shares
and thereafter as capital gain.

    The amount of the dividend includible in the income of a U.S. holder will be
the U.S. dollar value of the dividend (including, provided that certain tax
elections are made, any U.K. tax credit considered to be received as described
below), determined at the spot rate on the date that dividend is includible in
the income of the U.S. holder, regardless of whether the payment is in fact
converted into U.S. dollars. A U.S. holder will have a basis in any U.K. pound
sterling distributed by WPP equal to the U.S. dollar value of the U.K. pound
sterling on the date it is actually or constructively received by the U.S.
holder, in the case of WPP ordinary shares, or by the depositary, in the case of
WPP ADSs. Generally, any gain or loss resulting from currency exchange
fluctuations during the period from the date the dividend payment is includible
in income to the date that payment is converted into U.S. dollars will be
treated as ordinary income or loss. This gain or loss will generally be income
from sources within the U.S. for foreign tax credit limitation purposes.

    Under the U.K.-U.S. Income Tax Treaty, a beneficial owner of WPP shares and
of any cash dividend paid on WPP shares who is a U.S. person for U.S. federal
income tax purposes and who is eligible for benefits under the U.K.-U.S. Income
Tax Treaty with respect to income derived in connection with those shares (an
"eligible U.S. holder") who receives a dividend from WPP may be entitled to a
foreign tax credit for any U.K. tax withheld; provided such eligible U.S. holder
makes an election to be treated as receiving the tax credit due under the
U.K.-U.S. Income Tax Treaty, see "United Kingdom Tax Consequences of Owning WPP
ADSs and Ordinary Shares--Taxation of Distributions." If an eligible U.S. holder
is so entitled, the foreign tax credit generally would be equal to one-ninth of
any cash dividend received and would give rise to additional dividend income in
the same amount. For foreign tax credit limitation purposes, WPP expects that
dividends paid by WPP will be income from sources outside of the U.S., but
generally will be treated separately, together with other items of "passive
income" or, in the case of certain holders, "financial services income."

    It is possible that, after the merger, WPP will be at least 50% owned by
persons treated as U.S. persons under the U.S. tax code. Under Section 904(g) of
the U.S. tax code, dividends paid by a non-U.S. corporation that is at least 50%
owned by U.S. persons may be treated as U.S. source income rather than non-U.S.
source income for foreign tax credit purposes to the extent the non-U.S.
corporation has more than an insignificant amount of U.S. source income for
foreign tax credit purposes. The effect of this rule may be to treat a portion
of the dividends paid by WPP as U.S. source income. This treatment may affect
adversely an eligible U.S. holder's ability to use foreign tax credits. Under
these circumstances, section 904(g)(10) of the U.S. tax code may permit an
eligible U.S. holder to elect to treat WPP dividends as non-U.S. source income
for foreign tax credit limitation purposes, if the dividend income is separated
from other income items for purposes of calculating the holder's foreign tax
credit. Although there is no form prescribed for making this election,
applicable U.S.

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Treasury regulations suggest that the election is made by claiming the credit in
the manner described in this paragraph.

    Eligible U.S. holders that do not elect, or are not permitted, to claim a
foreign tax credit may instead claim a deduction for foreign tax withheld. Each
U.S. holder is urged to consult his or her tax advisor concerning whether the
U.S. holder is eligible for benefits under the U.K.-U.S. Income Tax Treaty and
whether, and to what extent, a foreign tax credit or deduction will be available
with respect to dividends received from WPP.

    Each eligible U.S. holder that relies on the U.K.-U.S. Income Tax Treaty
should consider disclosing this reliance on the eligible U.S. holder's U.S.
federal income tax return. A U.S. holder that fails to disclose reliance on a
treaty where this disclosure is required could be subject to penalties under
U.S. federal income tax law.

    TAXATION OF CAPITAL GAINS

    Upon a sale or other disposition of WPP ADSs or ordinary shares, a U.S.
holder will recognize gain or loss for U.S. federal income tax purposes in an
amount equal to the difference between the U.S. dollar value of the amount
realized and the U.S. holder's tax basis, determined in U.S. dollars, in the WPP
ADSs or ordinary shares. Gain or loss recognized will be long-term capital gain
or loss with respect to WPP ADSs or ordinary shares held for more than
12 months at the time of the sale or other disposition and any gain recognized
generally will be income from sources within the U.S. for foreign tax credit
limitation purposes.

    A U.S. holder that is liable for both U.S. federal income tax and U.K. tax
on a sale or other disposition of WPP ADSs or ordinary shares should consult
with his or her tax advisor to determine the U.S. holder's entitlement to credit
the U.K. tax against the U.S. holder's U.S. federal income tax liability.

    BACKUP WITHHOLDING AND INFORMATION REPORTING

    In general, information reporting requirements will apply to dividends in
respect of the WPP ADSs or ordinary shares and the proceeds received on the sale
or disposition of the WPP ADSs or ordinary shares paid within the U.S., and in
certain cases outside of the U.S., to a U.S. holder unless the U.S. holder is an
exempt recipient, such as a corporation, and a 31% backup withholding may apply
to these amounts if the U.S. holder fails to provide an accurate taxpayer
identification number or has been notified by the U.S. IRS that he or she is
subject to backup withholding as a result of a failure to report interest and
dividends required to be shown on the U.S. Holder's U.S. federal income tax
returns.

    In general, payment of proceeds from the sale of WPP ADSs or ordinary shares
to or through a U.S. office of a broker is subject to both U.S. backup
withholding and information reporting requirements, unless the holder or
beneficial owner certifies its non-U.S. status under penalties of perjury or
otherwise establishes an exemption. U.S. information reporting and backup
withholding generally will not apply to a payment made outside the U.S. of the
proceeds of a sale of WPP ADSs or ordinary shares through an office outside the
U.S. of a non-U.S. broker. However, U.S. information reporting requirements (and
after December 31, 2000, backup withholding) will apply to a payment made
outside the U.S. of the proceeds of a sale of WPP ADSs or ordinary shares
through an office outside the U.S. of a broker (i) that is a U.S. person,
(ii) that derives 50% or more of its gross income for a specified three-year
period from the conduct of a trade or business in the U.S., (iii) that is a
"controlled foreign corporation" for U.S. federal income tax purposes, or
(iv) with respect to payments made after December 31, 2000, that is a foreign
partnership, if at any time during its tax year, one or more of its partners are
U.S. persons (as defined in U.S. Treasury regulations) who in the aggregate hold
more than 50% of the income or capital interests in the partnership or if, at
any time during the

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tax year, that foreign partnership is engaged in a U.S. trade or business,
unless the broker has documentary evidence in its files that the holder or
beneficial owner is a non-U.S. person or the holder or beneficial owner
otherwise establishes an exemption.

    Amounts withheld under the backup withholding rules may be credited against
a U.S. holder's U.S. federal income tax liability, and a U.S. holder may obtain
a refund of any excess amounts withheld under the backup withholding rules by
filing the appropriate claim for refund with the IRS.

UNITED KINGDOM TAX CONSEQUENCES OF OWNING WPP ADSS AND ORDINARY SHARES

    TAXATION OF DISTRIBUTIONS

    An individual shareholder resident in the U.K. generally will be entitled to
a tax credit (the "U.K. tax credit") in respect of any dividend received. The
amount of the U.K. tax credit is equal to one-ninth of the cash dividend or 10%
of the aggregate of the cash dividend and the U.K. tax credit.

    Under the terms of the U.K.-U.S. Income Tax Treaty, an eligible U.S. holder
may be entitled to receive from U.K. Inland Revenue, in respect of a cash
dividend, a cash payment equal to the amount of the U.K. tax credit to which an
individual resident in the U.K. for tax purposes would have generally been
entitled had that resident received the dividend. Such payment will be reduced
by an amount of U.K. tax to be withheld from that payment equal to 15% of the
sum of the dividend and the amount of the U.K. tax credit (the "U.K. Withholding
Tax"). Under the U.K.-U.S. Income Tax Treaty, the U.K. Withholding Tax cannot
exceed the amount of the U.K. tax credit. As a result, at current levels of the
U.K. tax credit, an eligible U.S. holder would not be entitled to receive any
cash payment in respect of the U.K. tax credit for dividends paid by WPP. For
example, if an eligible U.S. holder receives a dividend (solely for illustrative
purposes) of 90, the U.S. holder would be entitled to a U.K. tax credit of 10.
However, since the maximum amount of U.K. Withholding Tax, which would be 15% of
100, exceeds the amount of the U.K. tax credit, no actual treaty payment would
be made and the U.S. holder would receive only the cash dividend, which in this
case would be 90.

    Under U.S. Revenue Procedure 2000-13, 2000-6 I.R.B. 515, an eligible U.S.
holder may elect to be treated as receiving the U.K. tax credit in respect of a
dividend paid by WPP without affirmatively making a claim to U.K. Inland
Revenue. An eligible U.S. holder would make this election by so indicating on
U.S. IRS Form 8833 (Treaty-Based Return Position Disclosure Under Section 6114
or 7701(b)) and filing the completed Form 8833 with the U.S. holder's federal
income tax return for the relevant year. An eligible U.S. holder that makes this
election will be treated as having received an additional dividend equal to the
gross amount of the U.K. tax credit (unreduced by the amount of U.K. Withholding
Tax), which additional dividend must be included in the U.S. holder's gross
income, and as having paid the applicable U.K. Withholding Tax due under the
treaty, on the date of the dividend distribution. However, as mentioned above,
the amount of the U.K. Withholding Tax cannot exceed the amount of the U.K. tax
credit and, accordingly, an eligible U.S. holder will be considered to have paid
U.K. Withholding Tax only to the extent of the U.K. tax credit. Following the
example above, an eligible U.S. holder that made this election would be treated
for U.S. federal income tax purposes as receiving a dividend of 100 and as
having paid U.K. Withholding Tax of 10.

    TAXATION OF CAPITAL GAINS

    A U.S. holder who is neither resident nor ordinarily resident for tax
purposes in the U.K. will not generally be liable for U.K. tax on capital gains
realized on the disposal of WPP ADSs or ordinary shares.

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<PAGE>
    INHERITANCE AND GIFT TAXES

    WPP ADSs and ordinary shares are assets situated in the U.K. for the
purposes of U.K. inheritance tax. An individual who is domiciled in the U.S. and
who is not a national of the U.K. for purposes of the U.K.-U.S. Estate and Gift
Tax Treaty, however, will generally not be subject to U.K. inheritance tax in
respect of the WPP ADSs or ordinary shares on the individual's death or on a
gift of the WPP ADSs or ordinary shares during the individual's lifetime,
provided that any applicable U.S. federal gift or estate tax liability is paid.
In the exceptional case where the WPP ADSs or ordinary shares are subject both
to U.K. inheritance tax and to U.S. federal gift or estate tax, the U.K.-U.S.
Estate and Gift Tax Treaty generally provides for any tax paid in the U.K. to be
credited against tax payable in the U.S. or for any tax paid in the U.S. to be
credited against tax payable in the U.K. based on priority rules set out in that
treaty.

    STAMP DUTY AND STAMP DUTY RESERVE TAX

    Y&R will be liable for all U.K. stamp duty, stamp duty reserve tax or
similar U.K. governmental charges, or any other interest or penalties thereon
that may be payable by Y&R or, after the merger, WPP, pursuant to the deposit
agreement relating to the ADSs. See "Description of WPP American Depositary
Shares--Payment of Taxes."

    No stamp duty will be payable on the acquisition or transfer of WPP ADSs or
beneficial ownership of WPP ADSs, provided that any instrument of transfer is
not executed in the U.K. and provided further that the instrument of transfer is
not brought into the U.K. An agreement for the transfer of WPP ADSs or
beneficial ownership of WPP ADSs will not give rise to a liability for stamp
duty reserve tax.

    A transfer for value of the WPP ordinary shares will generally be subject to
AD VALOREM stamp duty or to stamp duty reserve tax. Stamp duty will arise on the
execution of an instrument to transfer WPP ordinary shares. Stamp duty reserve
tax will arise on the entry into an agreement to transfer WPP ordinary shares
but the charge may be canceled if stamp duty has been paid. Stamp duty and stamp
duty reserve tax are normally a liability of the purchaser. Any transfer for
value of the underlying WPP ordinary shares represented by WPP ADSs, but not a
transfer of the WPP ADSs themselves, may give rise to a liability on the
transferee to U.K. stamp duty or stamp duty reserve tax. The rate of stamp duty
payable is 0.5% of the consideration rounded to the nearest L5, and 0.5% of the
consideration in the case of stamp duty reserve tax. On a transfer of WPP
ordinary shares from the custodian of the depositary to a holder of a WPP ADS
upon cancellation of the WPP ADS, only a fixed stamp duty of L5.00 per
instrument of transfer will be payable.

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                              THE MERGER AGREEMENT


    The following is a summary of the material terms of the merger agreement.
This summary is qualified in its entirety by reference to the complete text of
the merger agreement, a copy of which is attached to this proxy
statement/prospectus as Appendix A and is incorporated by reference into this
document. Y&R stockholders are urged to read the merger agreement in its
entirety because it is the legal document that governs the merger.


THE MERGER


    York II Merger Corp., an indirect wholly owned subsidiary of WPP, will merge
with and into Y&R, with Y&R surviving as an indirect wholly owned subsidiary of
WPP.



    The merger agreement originally provided for the merger of York Merger
Corp., a direct subsidiary of WPP, or, at the election of WPP, an indirect
subsidiary of WPP, with and into Y&R. On August 18, 2000, the merger agreement
was amended to reflect the substitution of York II Merger Corp. as the entity
merging with and into Y&R.


EFFECTIVE TIME AND TIMING OF CLOSING


    The merger will become effective and be completed when Y&R and York II
Merger Corp. file a certificate of merger with the Secretary of State of the
State of Delaware or at a later time, if so specified in the certificate of
merger. We expect the merger to become effective on the same day as the closing
of the merger, which will take place either as soon as practicable after the
conditions described in the merger agreement have been satisfied or waived or on
another date agreed upon by WPP and Y&R.


CONSIDERATION TO BE RECEIVED IN THE MERGER

    At the time the merger becomes effective:

    - each outstanding share of Y&R common stock will be canceled and converted
      into a right to receive .835 of a WPP ADS. After we complete the merger,
      Y&R stockholders may elect to receive five WPP ordinary shares instead of
      each WPP ADS for all or a portion of the WPP ADSs the Y&R stockholders are
      otherwise entitled to receive; and


    - each outstanding Y&R stock option will by its terms become an option to
      purchase WPP ADSs or ordinary shares as described on page 84 under
      "--Stock Options and Other Employee Benefits."


    In the event that before the completion of the merger a stock split, reverse
stock split, stock dividend, recapitalization or redenomination of share
capital, or other similar transaction causes a change to the number of
outstanding shares of Y&R common stock, WPP ordinary shares, or the number of
WPP ordinary shares represented by a WPP ADS changes, the number of WPP ADSs or
ordinary shares, as the case may be, into which a share of Y&R common stock will
be converted in the merger will be appropriately adjusted.


    The shares of restricted Y&R common stock that come out of Y&R's deferred
compensation plan at or prior to the time of the merger will be canceled and
converted as described above.


EXCHANGE OF CERTIFICATES REPRESENTING Y&R COMMON STOCK

    WPP will appoint an exchange agent who will exchange certificates
representing shares of Y&R common stock for American depositary receipts
representing WPP ADSs or, if a Y&R stockholder properly elects, certificates
representing ordinary shares. Promptly after the merger is completed, Y&R or the
exchange agent will mail to each registered holder of shares of Y&R common stock
a letter of

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transmittal which the holder must properly complete and deliver to the exchange
agent with the holder's common stock certificates. This letter of transmittal
will include a form of election, which any registered holder of shares of Y&R
common stock may use to elect to receive ordinary shares instead of all or part
of WPP ADSs the holder is otherwise entitled to receive. Any registered holder
of Y&R common stock who fails to submit a properly completed form of election
will automatically receive the merger consideration in the form of WPP ADSs when
the holder delivers to the exchange agent the holder's common stock
certificates, together with a properly completed letter of transmittal.

    WPP will issue the ordinary shares that will underlie the WPP ADSs to be
issued as merger consideration in registered form to the exchange agent as
nominee and agent for those Y&R stockholders who do not elect to receive WPP
ordinary shares. These WPP ordinary shares will be delivered to the custodian
for the WPP ADSs and, in exchange, the depositary will issue American depositary
receipts representing the WPP ADSs that will be delivered to those stockholders
of Y&R who do not elect to receive ordinary shares. WPP will also deposit with
the exchange agent WPP ordinary share certificates in an amount sufficient to
deliver WPP ordinary shares to holders of Y&R common stock who elect to receive
ordinary shares.

    After a registered holder of shares of Y&R common stock delivers
certificates for those shares, a signed transmittal letter and, if applicable, a
signed form of election, to the exchange agent, the holder will be entitled to
receive in exchange for the holder's Y&R common stock:

    - the number of WPP ADSs or, if a properly completed form of election is
      delivered, to the extent elected, ordinary shares, into which the holder's
      shares were converted in the merger, excluding fractional share interests;
      and

    - a check in the amount, after giving effect to any required tax
      withholdings, of:

       (1) cash in U.S. dollars, in lieu of any fractional interest in WPP ADSs
           or ordinary shares on the terms described below; plus

       (2) any cash dividends or other distributions that the holder has the
           right to receive, including dividends or other distributions payable
           with respect to the holder's WPP ADSs or ordinary shares with a
           record date after the completion of the merger and a payment date on
           or before the date the holder properly delivers Y&R common stock
           certificates to the exchange agent.

    The depositary will not deliver fractional WPP ADSs or ordinary shares in
connection with the merger. Instead, each holder of shares of Y&R common stock
exchanged in the merger who would otherwise have received a fraction of a WPP
ADS or ordinary share, as applicable, will receive cash in an amount equal to
the holder's proportionate interest in the net proceeds, after being converted
into U.S. dollars, from the sale on the London Stock Exchange by the exchange
agent of WPP ordinary shares representing all of the fractional shares which Y&R
stockholders are otherwise entitled to receive. Y&R will pay all commissions,
transfer taxes and out-of-pocket costs, including the expenses and compensation
of the exchange agent, incurred in connection with the sale of the WPP ordinary
shares representing all fractional shares.

    Shares of Y&R common stock that are surrendered to the exchange agent will
be canceled. No interest will be paid or accrued on any amount payable to
holders of Y&R common stock. In addition, no holder of Y&R common stock will
receive any dividends or other distributions with respect to WPP ADSs or
ordinary shares to which the holder is entitled under the merger agreement until
that holder's Y&R common stock certificate is surrendered to the exchange agent
with a properly completed letter of transmittal.

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    In order for a person who is not a registered holder of the Y&R common stock
to have a certificate exchanged, the person must:

    - ensure that the certificate surrendered is properly endorsed or otherwise
      in proper form for transfer; and

    - pay the exchange agent any transfer or other taxes required or establish
      to the satisfaction of the exchange agent that such taxes have been paid
      or are not payable.

    A Y&R stockholder who holds Y&R common stock in "street name" through a
bank, broker or other financial institution should receive information about the
procedures for exchanging that holder's shares for WPP ADSs or ordinary shares
from that institution and should direct inquiries about the election for WPP
ordinary shares to the institution. Some financial institutions, including
participants in The Depository Trust Company, may require beneficial owners of
Y&R common stock to give instructions to the institution on the WPP ordinary
share election. DTC has advised WPP and Y&R that DTC participants will have
until the close of business on the 30th day, or if not a business day, then on
the next subsequent business day, following the completion of the merger to make
any elections for WPP ordinary shares on their own behalf or on behalf of their
underlying beneficial owners. In addition, some financial institutions may
impose fees on beneficial owners of Y&R common stock who elect to receive WPP
ordinary shares to cover transaction fees charged by DTC.

REPRESENTATIONS AND WARRANTIES

    The merger agreement contains a number of customary representations and
warranties made by WPP and Y&R regarding:

    - due organization, good standing and qualification;

    - capital structure;

    - corporate authority to enter into the merger agreement and lack of
      conflicts with corporate governance documents, contracts or laws;

    - governmental filings;

    - SEC reports and financial statements;

    - absence of changes since December 31, 1999;

    - litigation and liabilities;

    - brokers' and finders' fees;

    - employee benefit plans;

    - labor and employment matters;

    - licenses;

    - intellectual property;

    - continuity of business;

    - compliance with laws;

    - non-competition provisions in certain contracts; and

    - tax matters.

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    Y&R has also represented that:

    - it has taken or will take all actions appropriate and necessary to ensure
      that provisions of the Delaware General Corporation Law limiting business
      combinations will not affect the merger or any other transaction
      contemplated by the merger agreement; and

    - neither the merger agreement nor the merger will trigger Y&R's rights plan
      and the rights under that plan will expire when the merger is completed.

    The merger agreement also contains customary representations and warranties
of WPP regarding York Merger Corp., including that it has not engaged in prior
business activities or incurred liabilities other than in connection with the
merger agreement.

CONDUCT OF BUSINESS PENDING THE MERGER; OTHER ACTIONS

    Y&R and WPP have each agreed that during the period from the signing of the
merger agreement until the completion of the merger, it will carry on its
business in the ordinary and usual course in all material respects. Moreover, to
the extent consistent with this obligation, each company is required to use
commercially reasonable efforts to preserve its business organization intact and
maintain its existing relations and goodwill with customers, clients, suppliers,
creditors, regulators, lessors, employees and business associates.

    WPP and Y&R have each also agreed that before the completion of the merger
they will:

    - not amend their corporate governance documents;

    - not split, combine, subdivide or reclassify their outstanding shares;

    - not adopt a plan of complete or partial liquidation;

    - not declare or pay dividends or make distributions on their outstanding
      shares or securities convertible into those shares other than in the case
      of Y&R, regular quarterly cash dividends of no more than $.025 per share
      of Y&R common stock, dividends required under the terms of the Y&R's money
      market preferred stock, interest payments payable under the terms of Y&R's
      outstanding 3% convertible notes and distributions required under the
      terms of existing Y&R employee stock option plans, and, in the case of
      WPP, regular interim and final annual cash dividends, including increases
      consistent with past practice;

    - not repurchase any of their outstanding shares or securities convertible
      into those shares except as required by the terms of securities now
      outstanding and, in the case of WPP, in the ordinary course or as required
      by the terms of WPP's existing employee stock plans;

    - not take any action, or fail to take any action which to the knowledge of
      their senior executives would prevent, materially delay or materially
      impede the completion of the merger;

    - use their reasonable best efforts to cause the merger to qualify as a tax
      free reorganization under the U.S. tax code;

    - timely satisfy all applicable tax reporting and filing requirements
      contained in the U.S. tax code relating to the merger; and

    - not take any action to cause their shares to be delisted, in the case of
      WPP, on the London Stock Exchange and on the Nasdaq National Market and in
      the case of Y&R, on the New York Stock Exchange.

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    In addition, Y&R has agreed that, except to the extent previously disclosed
to WPP, it will not take any of the following actions:

    - issue any new shares of common stock or securities convertible into those
      shares, except for grants of up to 800,000 options in total to new hires
      and to persons who become employees of Y&R as a result of an acquisition,
      issuances of shares to satisfy option exercises or conversion of Y&R's 3%
      convertible notes;

    - incur or materially modify (1) the terms of any material indebtedness or
      (2) any other liability outside the ordinary and usual course of business,
      other than an incurrence or a liability outside of Y&R's control;

    - enter into any merger or share exchange;

    - dispose of any business or material asset outside the ordinary and usual
      course of business;

    - make acquisitions of businesses or assets outside of the ordinary and
      usual course of business, except for individual acquisitions for
      $50 million or less and acquisitions that in total are for no more than
      $100 million;

    - amend or make any new awards of stock-based compensation or other benefits
      under, any compensation or benefit plan, except increases in salary or
      non-stock-based bonus compensation in the ordinary and usual course of
      business consistent with past practice and grants of 800,000 options in
      total to new hires and to persons who become employees of Y&R as a result
      of an acquisition;

    - exempt any party from its rights plan;

    - fail to enforce its rights under any standstill agreement;

    - enter into or amend the terms of, or terminate any material joint venture,
      partnership or similar arrangement, unless permitted by the provision
      described above regarding acquisitions; and

    - change its tax accounting policies, elections or settle any material
      audits, examinations or litigation regarding taxes.

OFFERS FOR ALTERNATIVE TRANSACTIONS

    WPP and Y&R have each agreed not to, and each is required to use its best
efforts to cause its employees, agents and representatives not to:

    - initiate, solicit or encourage any party to make, or facilitate the making
      of, a merger, reorganization, share exchange, consolidation, or similar
      transaction with that company or the purchase of all or any significant
      portion of that company's assets or shares; or

    - engage in any discussions or negotiations with or provide any confidential
      information or data to any person relating to an offer for an alternative
      transaction or engage in any negotiations with any person concerning any
      alternative transaction offer, or otherwise facilitate any effort to make
      or implement an alternative transaction offer.

However, if either WPP or Y&R receives an alternative transaction offer, it may,
after giving the other company at least 24 hours notice, engage in discussions
or negotiations with, and furnish confidential information to, the person that
made the offer, if that offer:

    - did not result from the breach of that company's obligations described
      above not to solicit or engage in discussions regarding an alternative
      transaction offer; and

    - the company's board of directors determines in its good faith judgment
      after receiving the advice of its financial adviser that the offer is
      reasonably likely to result in a superior offer.

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    A "superior offer" is a bona-fide written alternative transaction offer
that:

    - is no longer subject to any due diligence investigation by the person
      making the offer; and

    - the board of directors of the company receiving the offer determines in
      its good faith judgment, after consultation with its financial advisors,
      to be an offer more favorable from a financial point of view to its
      shareholders than the merger under the merger agreement between WPP and
      Y&R, and taking into account all legal, financial, regulatory and other
      aspects of the offer, the offer is for a transaction that is reasonably
      likely to be completed.

    Both WPP and Y&R have also agreed:

    - to terminate any discussions or negotiations regarding alternative
      transactions that were being conducted before the merger agreement was
      signed;

    - to inform its subsidiaries and their representatives of the relevant
      obligations undertaken in the merger agreement;

    - to notify the other company promptly if any inquiries, proposals or
      requests for information regarding an alternative transaction are received
      or any discussions or negotiations are sought and identify the person
      making the inquiry, proposal or request and the material terms of any
      alternative transaction offer that company receives; and

    - to the extent the company has a right to do so, to promptly request that
      each person who executed a confidentiality agreement with it within the
      12 months prior to the date of the merger agreement in connection with
      that company's consideration of an alternative transaction return or
      destroy all confidential information previously furnished to the person.

AGREEMENT REGARDING RECOMMENDATIONS TO SHAREHOLDERS


    The boards of directors of WPP and Y&R are required, subject to their
fiduciary duties under applicable law, to recommend that their shareholders vote
to approve the merger, and, in the case of WPP, that the WPP share owners elect
Y&R's designees to WPP's board. See "The WPP Extraordinary General Meeting"
beginning on page 23, and "Directors and Management of WPP Following the Merger"
beginning on page 150.


    Both companies' boards of directors are also required, subject to their
fiduciary duties under applicable law, to deliver written notice, at least four
business days before that board of directors modifies its favorable
recommendation of the merger, and in the case of WPP's board, the recommendation
to elect Y&R's designees to WPP's board, advising the other company that it
intends to do so unless the other company modifies the terms and conditions of
the merger agreement.

    However, each of the companies is required to submit the merger for a vote
of its share owners even if, in accordance with its fiduciary duties, the
company's board of directors determines not to recommend approval of the merger.

STOCK OPTIONS AND OTHER EMPLOYEE BENEFITS

    STOCK OPTIONS.  In the merger, generally all Y&R stock options held by a
person whose primary place of residence or employment with Y&R is in Europe will
by their terms become options to acquire WPP ordinary shares. Generally, all
other options will by their terms become options to acquire WPP ADSs.

    Each Y&R stock option will remain subject to the terms of the Y&R stock
option plan under which it was issued, except that after the merger Y&R stock
options that become options to acquire WPP ordinary shares will be exercisable
for 4.175 ordinary shares for each share of Y&R common

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stock subject to that option before the merger and all other options will be
exercisable for .835 WPP ADSs for each share of Y&R common stock subject to that
option before the merger.

    The exercise price per WPP ADS or ordinary share, as applicable, for each of
these options will be the exercise price per share of Y&R common stock
applicable to that option before completion of the merger divided by 4.175, if
the option is exercisable for WPP ordinary shares, or .835, if the option is
exercisable for WPP ADSs.

    Notwithstanding the foregoing, the number of WPP ADSs or ordinary shares, as
applicable, and the exercise price per WPP ADS or ordinary share applicable to
any Y&R stock option intended to be an "incentive stock option," as defined in
section 422 of the U.S. tax code, will be adjusted as required by that section
of the U.S. tax code.

    OTHER EMPLOYEE BENEFITS.  For at least the twelve month period after
completion of the merger, WPP will provide to Y&R employees:

    - salary, incentive compensation and other employee benefits, except
      stock-based benefits and compensation, which in the aggregate are
      substantially comparable to the benefits provided by Y&R before the
      merger; and

    - stock-based benefits and compensation pursuant to criteria and procedures
      substantially similar to the criteria and procedures applied to similarly
      situated employees of WPP.

    However, Y&R employees who are subject to collective bargaining or other
labor agreements will receive benefits under the terms of those agreements. Y&R
employees who have entered into an employment agreement with Y&R will receive
all salary, incentive compensation and other employee benefits under the terms
of that employment agreement.

    After completion of the merger, WPP will, for calendar year 2000, honor the
terms of Y&R's year 2000 annual bonus program and administer the program
consistent with Y&R's historical annual bonus programs.

    WPP will also recognize:

    - a Y&R employee's prior service with Y&R and its predecessor entities for
      purposes of eligibility and vesting and benefit accruals and
      determinations under any employee compensation, incentive or benefit plans
      that are maintained for the benefit of Y&R employees after the merger to
      the same extent as that service is recognized by Y&R before the merger,
      except to the extent this would result in an employee receiving
      duplication of benefits for the same period of service; and

    - any co-payments and deductibles incurred by a Y&R employee for purposes of
      determining the employee deductible or out-of-pocket requirements under
      any medical or similar plans that Y&R employees will be eligible to
      participate in after the merger.

    In addition, WPP has agreed to honor the terms of:

    - each existing employment, change of control, severance and termination
      plan or agreement between Y&R and any Y&R director, officer or employee;
      and

    - all obligations pursuant to outstanding retention plans, equity-based
      plans, programs or agreements, bonus plans or programs, bonus deferral
      plans, vested and accrued benefits under any employee benefit plan,
      program or arrangement of Y&R and similar employment, compensation and
      benefit arrangements and agreements in effect as of the merger, in each
      case to the extent the obligation is legally binding on Y&R or any of its
      subsidiaries.

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INDEMNIFICATION AND INSURANCE

    After the merger, WPP will indemnify the individuals who are or were
directors or officers of Y&R or any of its subsidiaries as of or before the
completion of the merger for any losses they incur because they acted as
directors and officers of Y&R or its subsidiaries before the merger, as follows:

    - WPP will maintain all rights to indemnification and all limitations on
      liability existing under the Y&R certificate of incorporation and bylaws
      in favor of those directors and officers;

    - WPP will maintain all rights to indemnification and all limitations on
      liability existing under any agreement between any of those directors or
      officers;

    - WPP will, for a period of six years after the merger, indemnify those
      directors and officers to the same extent they are indemnified on the date
      of the merger agreement;

    - WPP will, for a period of six years after the merger, indemnify and hold
      harmless those directors and officers against any costs or expenses,
      including reasonable attorney's fees, judgments, fines, losses, claims,
      damages or liabilities they incur in connection with any claim arising out
      of or pertaining to matters relating to their duties or actions in their
      capacity as officers or directors and existing or occurring at or before
      completion of the merger. In this regard, WPP will advance fees and
      expenses, including reasonable attorney's fees, as incurred to the fullest
      extent permitted under applicable law if the person to whom expenses are
      advanced provides a customary undertaking to repay these expenses if it is
      ultimately determined that this person is not entitled to indemnification;
      and

    - WPP will, for a period of six years after the merger, provide liability
      insurance for those directors and officers for acts or omissions occurring
      before the merger on terms at least as favorable as those of any policy
      presently in effect. WPP will not, however, be required to provide any
      more coverage than can be obtained for the remainder of the period for an
      annual premium that is more than 200% of the annual premium currently paid
      by Y&R for its existing coverage.

DIRECTORS AND OFFICERS OF WPP AND Y&R FOLLOWING THE MERGER


    At the time the merger is completed, the board of directors of WPP will
consist of 16 directors. Under the merger agreement, Y&R is entitled to
designate five persons to be members of the WPP board at the time the merger is
completed. Y&R has designated to date the following four of its current
directors for election to the WPP board:


    - Michael J. Dolan;

    - F. Warren Hellman;


    - Michael H. Jordan; and



    - Sir Christopher Lewinton.



    Twelve of the directors will be persons from WPP's current board selected by
WPP before completion of the merger. One of these twelve directors will be Masao
Inagaki, a current director of WPP and chairman and chief executive officer of
Asatsu-DK, one of WPP's largest share owners. Y&R and WPP have agreed that,
after the completion of the merger, the former Y&R directors on the WPP board
will have the right to designate at any time before June 30, 2001 a fifth Y&R
designee, who is not a U.S. citizen or resident and is otherwise reasonably
acceptable to WPP's board of directors, for appointment as a director of WPP.
WPP's board of directors will appoint the designee of the former Y&R directors
to WPP's board unless doing so would be inconsistent with WPP's articles of
association or the board's fiduciary duties. We have included biographies of the
current directors of WPP and the four Y&R designees under "Directors and
Management of WPP Following the Merger," beginning on


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page 150. In that section of this proxy statement/prospectus, we also describe
the share and option ownership of the current WPP directors and the current Y&R
designees, the responsibilities of WPP's board, its committees and rights of the
Y&R designees once they have joined WPP's board. WPP has agreed to include for
consideration by its share owners at their first annual general meeting after
completion of the merger a proposal for an amendment to WPP's articles of
association to require that notices of meetings of WPP's board be delivered to
directors located outside of the U.K. Under WPP's current articles of
association, WPP is only required to send notices of meetings to directors
outside the U.K. if the director requests notice. Subject to its fiduciary
duties, WPP's board will recommend that share owners approve the proposed
amendment.



    Upon completion of the merger, Thomas D. Bell, Y&R's chairman and chief
executive officer, will serve as chairman of Y&R and Mr. Dolan, a vice chairman
and the president and chief operating officer of Y&R, will serve as Y&R's
president and chief executive officer. In addition, until the first anniversary
of completion of the merger, WPP will maintain a four person transition
committee. We describe this committee under "The Merger--Plans for Y&R After the
Merger--Transition Committee" beginning on page 61.


HEADQUARTERS

    The merger agreement provides that:

    - the main headquarters of WPP will continue to be located in London,
      England after completion of the merger; and

    - the headquarters of each advertising agency currently operated by Y&R that
      is located in the U.S. will continue to be located within the U.S. after
      completion of the merger.

CHANGES TO TERMS OF WPP ADSS

    WPP has agreed that it will amend its agreement with the depositary for its
ADSs to require WPP to deliver to the depositary any reports WPP mails or
otherwise distributes to holders of its ordinary shares. The depositary will
then distribute those reports to holders of WPP ADSs.

    WPP has also agreed to include for consideration by its share owners at
their first annual general meeting after completion of the merger a proposal for
an amendment to WPP's articles of association that would grant, to the extent
reasonably practicable, holders of ADSs substantially the same rights as holders
of ordinary shares, including rights to receive notice of, attend, speak and
vote at general meetings of WPP share owners by providing for the appointment of
multiple proxies and sub-proxies and that all votes on special and extraordinary
resolutions be taken on a poll. Subject to its fiduciary duties, WPP's board
will recommend that its share owners approve the proposed amendment. If this
amendment is approved by WPP share owners, WPP will make corresponding
amendments to its agreement with the depositary. See "Description of WPP
Ordinary Shares," "Description of WPP American Depositary Shares" and
"Comparison of Rights of Y&R Stockholders and WPP Share Owners."

CONDITIONS

    CONDITIONS TO EACH PARTY'S OBLIGATIONS TO COMPLETE THE MERGER

    Y&R's and WPP's respective obligations to complete the merger are subject to
the satisfaction or waiver of the following conditions:

    - SHAREHOLDER APPROVALS.

       (1) the holders of a majority of the voting power of Y&R common stock
           having approved and adopted the merger agreement; and

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       (2) the holders of a simple majority of the WPP ordinary shares, whether
           in person or by proxy, at the extraordinary general meeting of the
           share owners of WPP, having approved Resolutions 1 to 5, details of
           which we describe above under "The WPP Extraordinary General
           Meeting."


    - REGULATORY APPROVALS.  Without being subject to conditions or restrictions
      that would have a material adverse effect on WPP and Y&R on a combined
      basis:

       (1) all waiting periods under the Hart-Scott-Rodino Antitrust
           Improvements Act having expired or been terminated;

       (2) the European Commission confirming that the merger and any matters
           arising from the merger are compatible with the common market and any
           national authority within the European Union to which the merger or
           any part of the merger is referred by the European Commission
           approving the merger in accordance with national merger control laws;


       (3) necessary approvals under competition regulations of jurisdictions
           outside the United States and the European Union having been
           obtained;



       (4) all rules and regulations of the New York Stock Exchange, the Nasdaq
           National Market, the U.K. Listing Authority and the London Stock
           Exchange having been complied with;



       (5) the U.K.'s H.M. Treasury under Section 765 of the U.K. Income and
           Corporation Tax Act 1988 having consented to the merger; and



       (6) all other consents, approvals and declarations and authorizations of
           other governmental entities which, if not obtained before completion
           of the merger, would have a material adverse effect on WPP and Y&R on
           an individual basis, or make the merger illegal, having been
           obtained.



    We describe in detail the regulatory approvals required or advisable in
connection with the completion of the merger and the actions the merger
agreement requires that WPP and Y&R take in order to obtain regulatory approvals
under "The Merger--Regulatory Approvals."


    - NO LAWS OR ORDERS.  No law, judgment or order having been enacted or
      entered by a governmental entity that restrains, enjoins or otherwise
      prohibits the completion of the merger or that materially frustrates the
      express intent and purposes of the merger agreement and no governmental
      entity having instituted a proceeding that would have a material adverse
      effect on WPP and Y&R on a combined basis.

    - STOCK EXCHANGE LISTING.

       (1) The WPP ordinary shares to be issued in the merger having been
           admitted to the Official List of the U.K. Listing Authority and to
           trading on the main market of the London Stock Exchange; and

       (2) the WPP ADSs to be issued having been authorized for listing on the
           Nasdaq National Market, subject to official notice of issuance.

    As used in the merger agreement, a "material adverse effect" means, with
respect to any entity, a material adverse effect on the business, properties,
results of operations or financial condition of the entity and its subsidiaries,
taken as a whole, except that events, consequences or conditions caused by the
following will not be considered to have a material adverse effect:

    - the announcement of the merger agreement and the merger, including any
      termination or reduction in client business due to the announcement of
      completion of the merger or the identity of the parties to the merger;

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    - the impact of any change in business of specified clients publicly
      announced before the merger agreement is signed; or

    - general changes in economic conditions in the broader economy or the
      advertising industry, unless the change materially and disproportionately
      affects that entity.

    ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF WPP

    The obligations of WPP to effect the merger are also subject to the
satisfaction, or waiver by WPP, of the following conditions:

    - REPRESENTATIONS AND WARRANTIES.  Y&R's representations and warranties in
      the merger agreement having been true in all material respects when the
      merger agreement was entered into and as of the date the merger is
      completed, except to the extent that a representation or warranty
      expressly speaks as of a specific date, in which case it need be true only
      as of that date, and except to the extent that together all inaccuracies
      in the representations and warranties would not reasonably be expected to
      have a material adverse effect on Y&R. Y&R's representation regarding its
      capitalization must by itself be true in all material respects.

    - COMPLIANCE WITH COVENANTS.  Y&R having performed all material obligations
      required to be performed by it under the merger agreement at or before the
      date of the closing of the merger.

    - TAX OPINION.  WPP having received an opinion from Fried, Frank, Harris,
      Shriver & Jacobson substantially to the effect that, on the basis of the
      facts, representations and assumptions set forth in the opinion:

       (1) the merger will be treated for U.S. federal income tax purposes as a
           reorganization within the meaning of Section 368 of the U.S. tax
           code;

       (2) WPP will be treated as a corporation under Section 367(a) of the U.S.
           tax code with respect to each transfer of property pursuant to the
           merger;

       (3) no gain or loss will be recognized by the stockholders of Y&R who
           exchange Y&R common stock solely for WPP ADSs or ordinary shares in
           the merger, except with respect to cash received instead of
           fractional interests in those shares; and

       (4) each of WPP, Y&R and WPP's direct and indirect subsidiaries that are
           party to the merger agreement will be a party to the reorganization
           within the meaning of Section 368 of the U.S. tax code.

    WPP does not intend to waive this tax opinion condition.

    ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF Y&R

    The obligation of Y&R to effect the merger is also subject to the
satisfaction or, except as noted below, waiver by Y&R of the following
conditions:

    - REPRESENTATIONS AND WARRANTIES.  WPP's representations and warranties in
      the merger agreement having been true in all material respects when the
      merger agreement was entered into and as of the closing date, except to
      the extent that a representation or warranty expressly speaks as of a
      specific date, in which case it need be true only as of that date and
      except to the extent that together all inaccuracies in the representations
      and warranties would not reasonably be expected to have a material adverse
      effect on WPP.  WPP's representation regarding its capitalization must by
      itself be true in all material respects.

    - COMPLIANCE WITH COVENANTS.  WPP having performed all material obligations
      required to be performed by it under the merger agreement at or before the
      date of the closing of the merger.

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    - TAX OPINION.  Y&R having received an opinion from Wachtell, Lipton,
      Rosen & Katz, substantially to the effect that, on the basis of the facts,
      representations and assumptions set forth in the opinion:

       (1) the merger will be treated for U.S. federal income tax purposes as a
           reorganization within the meaning of Section 368 of the U.S. tax
           code;

       (2) WPP will be treated as a corporation under Section 367(a) of the U.S.
           tax code with respect to each transfer of property pursuant to the
           merger;

       (3) no gain or loss will be recognized by the stockholders of Y&R who
           exchange Y&R common stock solely for WPP ADSs or ordinary shares in
           the merger, except with respect to cash received instead of
           fractional interests in those ordinary shares; and

       (4) each of WPP, Y&R and WPP's direct and indirect subsidiaries that are
           party to the merger agreement will be a party to the reorganization
           within the meaning of Section 368 of the U.S. tax code.

    Y&R does not intend to waive this tax opinion condition.

TERMINATION AND EFFECTS OF TERMINATION

    RIGHT TO TERMINATE.  The merger agreement may be terminated at any time
before the closing in any of the following ways:

    (1) by mutual written consent;

    (2) by either company, if:

       (a) the merger is not completed by February 11, 2001, provided that
           neither company may terminate the merger agreement if the failure to
           complete the merger by that date is caused by the failure of the
           company seeking to terminate to fulfill its obligations under the
           merger agreement;

       (b) a governmental authority enacts any law or issues a final
           non-appealable permanent injunction that prohibits the completion of
           the merger, except that the right to terminate the merger agreement
           for this reason is not available to any company that has not used
           commercially reasonable efforts to prevent this law from being
           enacted or this injunction from being issued or this injunction or
           order is due to a material breach by that company of its obligations
           under the merger agreement; or

       (c) either company's shareholders do not approve the merger at their
           respective shareholders meeting;

    (3) by WPP, if:

       (a) the Y&R board withdraws or adversely modifies its favorable
           recommendation of the merger to Y&R's stockholders;

       (b) Y&R or its board recommends an alternative transaction offer to its
           stockholders; or

       (c) any representation or warranty of Y&R contained in the merger
           agreement is inaccurate, or Y&R breaches any of its obligations
           contained in the merger agreement, which, unless cured within 20
           business days following written notice of this inaccuracy or breach
           from WPP, would result in conditions to the merger not being
           satisfied before or as of February 11, 2001; and

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    (4) by Y&R, if:

       (a) the WPP board withdraws or adversely modifies its favorable
           recommendation of the merger to WPP's share owners;

       (b) WPP or its board recommends an alternative transaction offer to its
           share owners; or

       (c) any representation or warranty of WPP contained in the merger
           agreement is inaccurate, or WPP breaches any of its obligations
           contained in the merger agreement, which, unless cured within 20
           business days following written notice of this inaccuracy or breach
           from Y&R, would result in conditions to the merger not being
           satisfied before or as of February 11, 2001.

    TERMINATION FEES PAYABLE TO WPP.  Y&R has agreed to pay WPP a termination
fee of $175 million if:

    (1) Y&R's board of directors withdraws or adversely modifies its favorable
       recommendation of the merger to its stockholders at a time when an
       alternative transaction offer for Y&R is pending;

    (2) Y&R or its board of directors recommends an alternative transaction
       offer to its stockholders; or

    (3) an alternative transaction offer for Y&R is made or is publicly
       announced and the merger agreement is subsequently terminated:

       (a) by WPP or Y&R, because the necessary approval of Y&R's stockholders
           is not obtained at the Y&R stockholders meeting;

       (b) by Y&R, because the merger is not consummated by February 11, 2001,
           except if the necessary approval of WPP share owners has not then
           been obtained, for any reason other than as a result of a breach by
           Y&R; or

       (c) by WPP, because any representation or warranty of Y&R contained in
           the merger agreement is inaccurate or Y&R breaches any of its
           obligations contained in the merger agreement, which, unless cured
           within 20 business days following written notice of this breach from
           WPP, would not be satisfied prior to or as of the termination date;
           and

in the case of each of (a), (b) or (c), if within nine months after the merger
agreement is terminated, Y&R enters into an agreement in respect of any
alternative transaction, or an alternative transaction is completed.

    Y&R has also agreed to pay WPP a termination fee of $25 million under
circumstances in which no $175 million fee is payable if either Y&R or WPP
terminates the merger because Y&R's stockholders do not approve the merger.

    TERMINATION FEES PAYABLE TO Y&R.  WPP has agreed to pay Y&R a termination
fee of $75 million if:

    (1) WPP's board of directors withdraws or adversely modifies its favorable
       recommendation of the merger to its share owners at a time when an
       alternative transaction offer for WPP is pending;

    (2) WPP or its board of directors recommends an alternative transaction to
       its share owners; or

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    (3) an alternative offer for WPP is made or is publicly announced and the
       merger agreement is subsequently terminated:

       (a) by WPP or Y&R, because the necessary approval of WPP's share owners
           is not obtained at the WPP share owners meeting;

       (b) by WPP, because the merger is not consummated by February 11, 2001,
           except if the necessary approval of Y&R stockholders has not then
           been obtained, for any reason other than as a result of a breach by
           WPP; or

       (c) any representation or warranty of WPP contained in the merger
           agreement is inaccurate or WPP breaches any of its obligations
           contained in the merger agreement, which, unless cured within 20
           business days following written notice of this breach from Y&R, would
           not be satisfied prior to or as of the termination date; and

in the case of each of (a), (b) or (c), if within nine months after the merger
agreement is terminated, WPP enters into an agreement in respect of any
alternative transaction or an alternative transaction is completed.

    WPP has also agreed to pay Y&R a termination fee of $25 million under
circumstances in which no $75 million fee is payable if either Y&R or WPP
terminates the merger because WPP's share owners do not approve the merger.

EXPENSES

    Whether or not the merger is completed, all costs and expenses incurred in
connection with the merger, the merger agreement and the transaction
contemplated by the merger agreement will be paid by the party incurring the
expense, except that WPP or Y&R will share equally the costs and expenses of
filing, printing and distributing the Form F-4 registration statement, this
proxy statement/prospectus, the circular to be distributed to shareholders of
WPP and the listing particulars relating to the WPP ordinary shares.

AMENDMENT; WAIVER

    WPP and Y&R may amend the merger agreement by written agreement prior to
completion of the merger, but, after Y&R's stockholders or WPP's share owners
have approved the merger agreement, no amendment may be made which by law
requires further shareholder approval without the shareholder approval being
obtained.

    Any provision of the merger agreement may be waived before the merger is
completed, but only if the waiver is in writing and signed by the party against
whom the waiver is to be effective.

                                       92
<PAGE>
                        THE SALE RESTRICTION AGREEMENTS


    Contemporaneously with the execution of the merger agreement, WPP entered
into sale restriction agreements with 16 senior executives of Y&R, including
Thomas D. Bell, Y&R's chairman and chief executive officer and Michael J. Dolan,
a vice chairman of Y&R and Y&R's president and chief operating officer, Edward
H. Vick, worldwide chairman and chief executive officer of Y&R Advertising and
with Peter A. Georgescu, Y&R's former chairman and chief executive officer.
Under these agreements, these senior executives and Mr. Georgescu have agreed
not to sell a total of approximately six million shares of their Y&R common
stock and/or the shares received upon the exercise of stock options (and,
following completion of the merger, the WPP shares and/or stock options they
will receive in the merger in exchange for these Y&R shares and options) for the
one year period ending May 11, 2001. We summarize the material terms of these
agreements below, but this description does not purport to describe all of their
terms.


RESTRICTIONS ON THE TRANSFER OF SHARES

    Each of the senior executives who executed a sale restriction agreement
agreed not to sell two-thirds of the total number of his or her Y&R shares (and
the WPP shares he or she will receive in the merger in exchange for those
shares) during the one year period ending on May 11, 2001. For purposes of these
agreements, the senior executive's total number of Y&R shares is comprised of:

    - the number of shares of Y&R common stock owned by him or her on May 11,
      2000; plus

    - the number of shares of Y&R common stock underlying the Y&R stock options
      he or she held on May 11, 2000.

    Mr. Georgescu has agreed not to sell 200,000 shares of Y&R common stock
before completion of the merger. After the completion of the merger until
May 11, 2001, Mr. Georgescu will not sell the number of WPP shares that have a
value of $10 million at the time the merger is completed.

    Under the sale restriction agreements, the limitations on the sale of shares
will cease to apply if WPP violates any the provisions contained in the merger
agreement relating to the transition committee and does not cure that violation
within 30 business days after receiving notice. See "The Merger--Plans for Y&R
After the Merger--Transition Committee."

    Under the sale restriction agreements, other than the agreement with
Mr. Georgescu, the limitations on the sale of shares will also cease to apply
if:

    - Y&R or, after the effective time of the merger, WPP terminates the
      employment of the senior executive who executed this agreement without
      cause;

    - the senior executive terminates his or her employment for good reason; or

    - the senior executive dies or is disabled.

    Under the sale restriction agreements, termination of employment for "cause"
means:

    - the senior executive's willful and continued failure to substantially
      perform his or her duties as in effect before May 11, 2000 if this failure
      continues after Y&R has given notice to the senior executive; or


    - the senior executive's willful misconduct that materially injures Y&R.


    Under the sale restriction agreements, termination of employment for "good
reason" means:

    - the assignment of any duties inconsistent with or the reduction of
      responsibilities associated with the senior executive's position with Y&R
      immediately prior to the execution of the merger agreement;

                                       93
<PAGE>
    - a reduction of the senior executive's base salary;

    - a change in the senior executive's principal work location of more than 50
      miles;

    - the failure of Y&R to pay any current or deferred compensation within
      seven days of the due date;

    - the failure of Y&R to continue any benefit plans, to provide substitute
      benefit plans, or to provide the number of paid vacation days to which the
      senior executive was entitled immediately prior to the execution of the
      merger agreement;

    - the material reduction of benefits under any benefit plans to which the
      senior executive was entitled immediately prior to the execution of the
      merger agreement; or

    - the failure of Y&R to afford annual bonus and long-term incentive
      compensation opportunities equal to those opportunities available
      immediately prior to the execution of the merger agreement.

NONCOMPETITION PROVISIONS OF THE SALE RESTRICTION AGREEMENTS

    The sale restriction agreements provide that so long as the senior executive
is employed by Y&R and following termination for any reason, the senior
executive will not:

    - for one year, work for any competitor of Y&R on the account of any Y&R
      client with whom the senior executive had a direct relationship or as to
      which the senior executive had a significant involvement at any time
      during the two years prior to termination;

    - for one year, if the senior executive's responsibilities do not
      principally involve client service, work for a principal competitor of Y&R
      in a similar corporate function;

    - for one year, if the senior executive's responsibilities are of a client
      service related nature, work for a competitor of Y&R on the account of any
      substantial competitor of any client for which the senior executive had
      substantial responsibility during the two years prior to termination or
      work directly for a competitor of these clients;

    - for one year, solicit or hire any employee of Y&R; and

    - disclose any confidential information of Y&R and its clients.

    These noncompete provisions are not contained in the sale restriction
agreement entered into with Mr. Georgescu.

DAMAGES AND EXPENSES

    Y&R's and WPP's sole remedy for a breach of these sale restriction
agreements is to seek specific performance of the covenants contained in these
agreements, including a court order requiring the breaching party to purchase a
number of shares sold or transferred in violation of these agreements. Under no
circumstances will the individuals who executed these agreements be responsible
for any monetary damages.

    Under these agreements, WPP must pay all legal fees and expenses reasonably
incurred by these individuals in connection with any contest regarding the sale
restriction provisions of these agreements so long as there is a reasonable
basis for the claims asserted by these individuals and those claims were
asserted in good faith. These individuals are obligated to return any fees or
expenses that were advanced plus interest if it is judicially determined that
there was no good faith basis to assert any of these claims.

                                       94
<PAGE>
                                 EXCHANGE RATES

    This table sets forth, for each period indicated, the high and low exchange
rates for one pound sterling expressed in U.S. dollars, the average exchange
rate during that period, and the exchange rate at the end of that period.


<TABLE>
<CAPTION>
                                     -------------   ----------------------------------------------------
                                      SIX MONTHS
                                         ENDED                     YEAR ENDED DECEMBER 31,
                                     JUNE 30, 2000     1999       1998       1997       1996       1995
                                     -------------   --------   --------   --------   --------   --------
<S>                                  <C>             <C>        <C>        <C>        <C>        <C>
High...............................     $1.6537      $1.6765    $1.7222    $1.7035    $1.7123    $1.6440
Low................................      1.4702       1.5515     1.6114     1.5775     1.4948     1.5302
Average............................      1.5694       1.6146     1.6602     1.6397     1.5733     1.5803
Period End.........................      1.5130       1.6150     1.6628     1.6427     1.7123     1.5535
</TABLE>



    As of August 24, 2000, the latest practicable date for which exchange rate
information was available prior to the printing of this document, the exchange
rate for one pound sterling expressed in U.S. dollars was $1.4806.


    This table sets forth, for each period indicated, the high and low exchange
rates for one U.S. dollar expressed in pounds sterling, the average exchange
rate during that period, and the exchange rate at the end of that period.


<TABLE>
<CAPTION>
                                     -------------   ----------------------------------------------------
                                      SIX MONTHS
                                         ENDED                     YEAR ENDED DECEMBER 31,
                                     JUNE 30, 2000     1999       1998       1997       1996       1995
                                     -------------   --------   --------   --------   --------   --------
<S>                                  <C>             <C>        <C>        <C>        <C>        <C>
High...............................     L0.6802      L0.6445    L0.6205    L0.6339    L0.6690    L0.6535
Low................................      0.6047       0.5965     0.5807     0.5870     0.5840     0.6083
Average............................      0.6372       0.6193     0.6023     0.6099     0.6356     0.6328
Period End.........................      0.6609       0.6192     0.6014     0.6088     0.5840     0.6437
</TABLE>



    As of August 24, 2000, the latest practicable date for which exchange rate
information was available prior to the printing of this document, the exchange
rate for one U.S. dollar was L0.6755.


    All of the exchange rate information set forth above is based on the noon
buying rates in New York City for cable transfer in pounds sterling as certified
for customs purposes by the Federal Reserve Bank of New York on the relevant
dates.

                                       95
<PAGE>
                         MARKET PRICE AND DIVIDEND DATA

MARKET PRICES

    WPP

    The primary trading market for the WPP ordinary shares is the London Stock
Exchange, where they are traded under the ticker symbol "WPP." The WPP ordinary
shares are also traded on German stock exchanges in Berlin, Frankfurt, Munich,
and Stuttgart. WPP ADSs, each representing five ordinary shares, are issued by a
depositary and are quoted on the Nasdaq National Market, where their ticker
symbol is "WPPGY."

    The table below sets forth, for the calendar quarters indicated, the highest
and lowest middle-market quotations for the ordinary shares as derived from the
Daily Official List of the London Stock Exchange and the range of high and low
bid prices of WPP ADSs as quoted on the Nasdaq National Market.


<TABLE>
<CAPTION>
                                                                      WPP
                                                                   ORDINARY
                                                                    SHARES                 WPP ADSS(1)
                                                              -------------------   --------------------------
                                                                HIGH       LOW         HIGH           LOW
                                                              --------   --------   -----------   ------------
                                                                  (L PER WPP               ($ PER ADS)
                                                                   ORDINARY
                                                                    SHARE)
<S>                                                           <C>        <C>        <C>           <C>
YEAR ENDED DECEMBER 31, 1998
First Quarter...............................................    3.43       2.43      29 3/16       20 1/4
Second Quarter..............................................    4.27       3.43      35 3/4        28 3/4
Third Quarter...............................................    4.67       2.71      38 1/2        22 13/16
Fourth Quarter..............................................    3.78       2.02      32 3/8        18
YEAR ENDED DECEMBER 31, 1999
First Quarter...............................................    5.49       3.59      44 3/8        30 7/16
Second Quarter..............................................    5.75       4.98      46            39 3/4
Third Quarter...............................................    6.27       5.39      50 7/16       42 11/16
Fourth Quarter..............................................    9.96       5.70      83 1/8        47 1/2
YEAR ENDED DECEMBER 31, 2000
First Quarter...............................................   13.24       8.68     102 9/16       70 1/8
Second Quarter..............................................   11.20       7.10      88            56 1/4
Third Quarter (through August 24, 2000).....................    9.89       8.50      73 5/8        62 3/16
</TABLE>


------------------------

(1) With effect from November 16, 1999, WPP split its existing ADSs on a
    two-for-one basis so that a WPP ADS is now equivalent to five ordinary
    shares. Comparative figures for prior periods have been restated
    accordingly.

    Y&R STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE WPP
ADSS AND ORDINARY SHARES.


    On May 11, 2000, the last trading day prior to the formal public
announcement of the signing of the merger agreement, the last middle market
quotation of the WPP ordinary shares on the London Stock Exchange was L8.24 per
ordinary share and the high and low bid prices for the WPP ADSs as quoted on the
Nasdaq National Market were $65.50 and $62.8125, respectively. On August 24,
2000, the last trading day for which information was available prior to the
printing of this proxy statement/ prospectus, the last middle market quotation
of the ordinary shares on the London Stock Exchange was L8.60 per ordinary share
and the high and low bid prices for the WPP ADSs as quoted on the Nasdaq
National Market were $64.25 and $63.25, respectively.


                                       96
<PAGE>

    As of August 18, 2000, the last date prior to the printing of this proxy
statement/prospectus for which it was practicable for us to obtain information,
there were approximately 10,727 registered holders of WPP ordinary shares and
462 registered holders of WPP ADSs.


    Y&R

    The Y&R common stock is traded the New York Stock Exchange under the ticker
symbol "YNR." The table below sets forth, for the calendar quarters indicated,
the high and low sale prices of shares of Y&R common stock as reported on the
NYSE Composite Tape.


<TABLE>
<CAPTION>
                                                                     Y&R COMMON
                                                                        STOCK
                                                              -------------------------
                                                                 HIGH           LOW
                                                              -----------   -----------
                                                                    ($ PER SHARE)
<S>                                                           <C>           <C>
YEAR ENDED DECEMBER 31, 1998
First Quarter(1)............................................  --            --
Second Quarter..............................................  33 1/16       26 1/2
Third Quarter...............................................  35 7/8        28 3/8
Fourth Quarter..............................................  33 5/8        19 3/4
YEAR ENDED DECEMBER 31, 1999
First Quarter...............................................  43 5/16       31 1/4
Second Quarter..............................................  44 3/8        37 1/4
Third Quarter...............................................  48 1/4        39 11/16
Fourth Quarter..............................................  73 1/4        43
YEAR ENDED DECEMBER 31, 2000
First Quarter...............................................  71 9/16       38 9/16
Second Quarter..............................................  60 11/16      37 1/8
Third Quarter (through August 24, 2000).....................  59 1/4        50 7/8
</TABLE>


------------------------

(1) Y&R completed its initial public offering during the second quarter of 1998
    and therefore no trading information is available for any prior period.


    The last sale price of a share of Y&R common stock on the NYSE on May 11,
2000, the day prior to the formal public announcement of the signing of the
merger agreement, was $48.375 per share. On August 24, 2000, the last trading
day for which information was available prior to the printing of this proxy
statement/prospectus the last sale price was $52.3125 per share.



    As of August 4, 2000, the last date prior to the printing of this proxy
statement/prospectus for which it was practicable for us to obtain this
information, there were approximately 914 registered holders of Y&R common
stock.


    Y&R STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE Y&R
COMMON STOCK.

DIVIDEND DATA

    WPP

    The following table sets forth dividends announced and paid in respect of
WPP ADSs and ordinary shares, on a per ADS and per ordinary share basis for the
periods indicated, but does not include the associated U.K. tax credit that may
be available to beneficial owners of WPP ADSs or ordinary shares who are
resident in the U.S. for tax purposes. See "Material Tax Consequences--United
Kingdom Tax Consequences of Owning WPP ADSs and Ordinary Shares." The percentage
of any dividend represented by the associated U.K. tax credit has varied over
the periods indicated. As of

                                       97
<PAGE>
April 6, 1999, the U.K. tax credit is now effectively completely set off by the
amount of applicable U.K. withholding taxes. The U.K. tax credit is currently
one-ninth of the cash dividend.

    Dividends have been translated from pounds sterling per WPP ADS into U.S.
dollars using the closing exchange rate as reported by Bloomberg on the date the
dividends were paid. Dividends have historically been paid semi-annually, with
the regular interim dividend paid in November and the regular final dividend
paid in July of the next year, subject to approval by WPP's share owners. See
"Exchange Rates" and "Description of WPP Ordinary Shares--Dividends" and
"Description of WPP American Depositary Shares--Share Dividends and Other
Distributions."


<TABLE>
<CAPTION>
                                                                 DIVIDENDS PER WPP ORDINARY
                                                                    SHARE AND WPP ADS(1)
                                                              --------------------------------
                                                              INTERIM       FINAL      TOTAL
                                                              --------    ---------   --------
<S>                                                           <C>         <C>         <C>
1995
  Ordinary Share............................................   0.445p       0.865p     1.310p
  ADS.......................................................  3.5 CENTS   6.7 CENTS   10.2 CENTS
1996
  Ordinary Share............................................   0.556p       1.144p     1.7p
  ADS.......................................................  4.7 CENTS   9.7 CENTS   14.4 CENTS
1997
  Ordinary Share............................................   0.70p        1.43p      2.13p
  ADS.......................................................  5.9 CENTS   11.8 CENTS  17.7 CENTS
1998
  Ordinary Share............................................   0.84p        1.72p      2.56p
  ADS.......................................................  7.0 CENTS   13.4 CENTS  20.4 CENTS
1999
  Ordinary Share............................................   1.00p        2.1p       3.1p
  ADS.......................................................  8.1 CENTS   15.8 CENTS  23.9 CENTS
2000
  Ordinary Share............................................   1.20p         n/a        n/a
  ADS....................................................... .908 CENTS      n/a        n/a
</TABLE>


------------------------


(1) With effect from November 16, 1999, WPP split its existing ADSs on a
    two-for-one basis so that a WPP ADS is now equivalent to five ordinary
    shares. Comparative figures for prior periods have been restated
    accordingly.


    Y&R


    The following table sets forth the quarterly dividends in respect of Y&R
common stock declared and paid in 1999 and in the first and second quarters of
2000. Y&R did not pay any dividend in respect of prior periods.



<TABLE>
<CAPTION>
                                                                              DIVIDENDS PER SHARE OF
                                                                                 Y&R COMMON STOCK
                                                        -------------------------------------------------------------------
                                                           FIRST        SECOND         THIRD        FOURTH
                                                          QUARTER       QUARTER       QUARTER       QUARTER        TOTAL
                                                        -----------   -----------   -----------   -----------   -----------
<S>                                                     <C>           <C>           <C>           <C>           <C>
  1999................................................          --     2.5 CENTS     2.5 CENTS     2.5 CENTS      7.5 CENTS
  2000................................................   2.5 CENTS     2.5 CENTS            --            --             --
</TABLE>


                                       98
<PAGE>
                               DESCRIPTION OF WPP


    WPP is one of the leading communications services companies in the world.
Through its 70 operating companies, it provides clients with advertising, media
investment management, information and consultancy, public relations and public
affairs, branding and identity, healthcare and specialist communications
services. WPP employs 39,000 people (including associates) in 950 offices in 92
countries. WPP's clients include more than 300 of the Fortune 500 and over
one-third of the Nasdaq 100. In the year ended December 31, 1999, WPP had annual
turnover (gross billings) of approximately $14 billion, revenues of
approximately $3.3 billion, and pre-tax profits of approximately
$386.4 million. During the six months ended June 30, 2000, WPP had annual
turnover (gross billings) of approximately $8.6 billion, revenues of
approximately $1.8 billion and pre-tax profits of approximately $208.3 million.
At June 30, 2000, net assets were $582.1 million.


    WPP operates through a number of established national and international
marketing and communications companies. Among these are the well known
advertising networks Ogilvy & Mather Worldwide and J. Walter Thompson Company;
MindShare in media investment management; Research International and Millward
Brown in information and consultancy; the worldwide public relations and public
affairs companies Hill and Knowlton and Ogilvy Public Relations Worldwide; a
wide range of specialist communications companies including the Enterprise
Identity Group, specializing in branding and corporate identity; and
CommonHealth, specializing in healthcare communications. WPP's ten largest
clients in 1999 were American Express, Ford, IBM, Johnson & Johnson, Kellogg,
Nestle, Philip Morris, Schering-Plough, Unilever and Warner Lambert.

                               DESCRIPTION OF Y&R

    Y&R provides marketing and communications services to approximately 5,500
client accounts, including a number of large multinational organizations such as
AT&T, Citibank, Colgate-Palmolive, Ford, Philip Morris and Sony. Y&R provides
clients with superior creative services and extensive research capabilities and
operates through recognized market leaders, including:

    - Y&R Advertising (full-service advertising);

    - Dentsu, Young & Rubicam (full-service advertising in the Asia/Pacific
      region);

    - Y&R 2.1 (full-service on-line and off-line advertising and marketing
      services);

    - The Bravo Group and Kang & Lee (multi-cultural marketing and
      communications);

    - impiric (customer relationship management, direct marketing and sales
      promotion);

    - KnowledgeBase Marketing (customer relationship marketing);

    - Brand Dialogue (digital interactive branding and digital commerce);

    - The Media Edge (media planning, buying and placement services);

    - The Digital Edge (Internet media planning, buying and placement services);

    - Burson-Marsteller (perception management and public relations);

    - Cohn & Wolfe (full-service public relations);

    - Robinson Lerer & Montgomery (strategic corporate public relations);

    - Landor Associates (branding consultation and design services); and

    - Sudler & Hennessey (healthcare communications).

    Y&R is a Delaware corporation founded over 75 years ago. Y&R's executive
offices are located at 285 Madison Avenue, New York, New York 10017; telephone
(212) 210-3000.

                                       99
<PAGE>
        UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

INTRODUCTORY NOTE

    The following Unaudited Pro Forma Condensed Consolidated Financial
Information gives pro forma effect to the merger, after giving effect to the pro
forma adjustments described in the accompanying notes. We have prepared this
financial information from, and you should read it in conjunction with, the
historical consolidated financial statements, including applicable notes
thereto, of WPP and Y&R that we have incorporated by reference into this proxy
statement/prospectus. For information on how to obtain any of those documents,
see "Summary--Where You Can Find More Information."

    We have provided the Unaudited Pro Forma Condensed Consolidated Financial
Information for illustrative purposes only. This information does not purport to
represent what the actual results of operations or the financial position of WPP
would have been if the merger had actually occurred on the dates assumed and
does not necessarily indicate what WPP's future operating results or
consolidated financial position will be.

    We have prepared the Unaudited Pro Forma Condensed Consolidated Financial
Information in accordance with U.K. GAAP, which differs in certain respects from
U.S. GAAP. The Notes to the financial statements included in WPP's Annual Report
on Form 20-F for the year ended December 31, 1999 describe the principal
differences between U.K. GAAP and U.S. GAAP as they relate to WPP. We have
included in the Notes to the Unaudited Pro Forma Condensed Consolidated
Financial Information a summary of the estimated material adjustments to profit
attributable to ordinary share owners and equity share owners' funds which would
be required if U.S. GAAP had been applied.

    WPP will account for the merger as an acquisition under U.K. GAAP in
accordance with Financial Reporting Standard 6, "Acquisitions and Mergers." WPP
will account for the merger as a purchase for U.S. GAAP purposes in accordance
with APB Opinion No. 16, "Business Combinations."


    The historical financial statements of Y&R were prepared in accordance with
U.S. GAAP. For purposes of presenting the Unaudited Pro Forma Condensed
Consolidated Financial Information, we have adjusted Y&R's historical audited
consolidated statement of operations for the year ended December 31, 1999,
unaudited consolidated statement of operations for the six months ended
June 30, 2000 and unaudited consolidated balance sheet at June 30, 2000 to
include (1) unaudited amounts for turnover (gross billings) and cost of sales,
(2) unaudited reclassifications to conform Y&R's historical financial
information to WPP's presentation under U.K. GAAP and (3) unaudited adjustments
to conform Y&R historical financial information with WPP's disclosed accounting
policies under U.K. GAAP as described in the Notes to the Unaudited Pro Forma
Condensed Consolidated Financial Information.



    The pro forma adjustments reflected in the balance sheet data included in
the Unaudited Pro Forma Condensed Consolidated Financial Information reflect
estimates made by WPP management and assumptions that it believes to be
reasonable. The Unaudited Pro Forma Condensed Consolidated Financial Information
does not take into account any synergies, including cost savings, or any
severance and restructuring costs, which may or are expected to occur as a
result of the merger. See "The Merger--Reasons for the Merger."



    The pro forma amounts pertaining to the consolidated WPP entity in the
unaudited pro forma consolidated financial information are presented in pounds
sterling. Solely for convenience, we have translated the pro forma amounts into
U.S. dollars using a rate of L1.00 to $1.5130, the noon buying rate in New York
City on June 30, 2000 for cable transfers in U.K. pounds sterling as certified
for customs purposes by the Federal Reserve Bank of New York. You should not
construe these translations as a representation that the U.K pounds sterling
amounts actually represent, or could be converted into, U.S. dollars at this
rate.


                                      100
<PAGE>
    UNAUDITED PRO FORMA CONDENSED CONSOLIDATED PROFIT AND LOSS ACCOUNT DATA
                     FOR THE SIX MONTHS ENDED JUNE 30, 2000


    The following unaudited pro forma condensed consolidated profit and loss
account data for the six months ended June 30, 2000, presented as if the merger
took place on January 1, 2000, are derived from (1) the unaudited historical
consolidated profit and loss account of WPP for that period, (2) Y&R's
historical unaudited statement of operations for that period, (3) unaudited
reclassifications to conform Y&R's historical financial information to WPP's
presentation under U.K. GAAP and (4) unaudited adjustments to conform Y&R's
historical statement of operations with WPP's disclosed accounting policies
under U.K. GAAP. No pro forma adjustments were required to be made in
preparation of the unaudited pro forma condensed profit and loss data for the
six months ended June 30, 2000 set forth below.



<TABLE>
<CAPTION>
                                                            WPP           Y&R               PRO FORMA
                                                          --------      --------      ----------------------
                                                             L             L             L             $
                                                          --------      --------      --------      --------
                                                          (IN MILLIONS EXCEPT PER SHARE AND PER ADS AMOUNTS)
<S>                                                       <C>           <C>           <C>           <C>
TURNOVER (GROSS BILLINGS)...........................       5,655.9       2,703.4       8,359.3      12,647.6
Cost of Sales.......................................      (4,446.8)     (2,102.6)     (6,549.4)     (9,909.2)
                                                          --------      --------      --------      --------
REVENUE.............................................       1,209.1         600.8       1,809.9       2,738.4
Direct Costs........................................        (138.0)           --        (138.0)       (208.8)
                                                          --------      --------      --------      --------
GROSS PROFIT........................................       1,071.1         600.8       1,671.9       2,529.6
Operating Costs.....................................        (924.6)       (524.1)     (1,448.7)     (2,191.9)
OPERATING PROFIT BEFORE EXCEPTIONAL CHARGE..........         146.5          76.7         223.2         337.7
Exceptional operating charge........................            --         (36.7)        (36.7)        (55.5)
OPERATING PROFIT....................................         146.5          40.0         186.5         282.2
Income from Associates..............................          14.2           2.4          16.6          25.1
PROFIT ON ORDINARY ACTIVITIES BEFORE INTEREST AND
  TAXATION..........................................         160.7          42.4         203.1         307.3
PROFIT ON ORDINARY ACTIVITIES BEFORE INTEREST,
  TAXATION AND EXCEPTIONAL CHARGE...................         160.7          79.1         239.8         362.8
Net interest payable on similar charges.............         (23.0)         (5.2)        (28.2)        (42.7)
                                                          --------      --------      --------      --------
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION.......         137.7          37.2         174.9         264.6
Taxation on profit on ordinary activities before
  exceptional item..................................         (41.3)        (28.9)        (70.2)       (106.2)
Exceptional tax credit arising on exercised stock
  options...........................................            --          18.1          18.1          27.4
                                                          --------      --------      --------      --------
PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION........          96.4          26.4         122.8         185.8
Minority interests..................................          (3.3)         (0.9)         (4.2)         (6.4)
                                                          --------      --------      --------      --------
PROFIT ATTRIBUTABLE TO ORDINARY SHARE OWNERS........          93.1          25.5         118.6         179.4
                                                          ========      ========      ========      ========

EARNINGS PER SHARE
Basic earnings per ordinary share...................         12.3p         35.1p         11.2p      16.9 CENTS
Diluted earnings before exceptional items per
  ordinary share....................................         12.0p         52.8p         12.2p      18.5 CENTS
Diluted earnings per ordinary share.................         12.0p         31.2p         10.6p      16.0 CENTS

EARNINGS PER ADS
Basic earnings per ADS..............................         61.5p           n/a         56.0p      84.5 CENTS
Diluted earnings before exceptional items per ADS...         60.0p           n/a         61.0p      92.5 CENTS
Diluted earnings per ADS............................         60.0p           n/a         53.0p      80.0 CENTS
</TABLE>



     THE NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL
                                  INFORMATION
                       ARE AN INTEGRAL PART OF THIS DATA.


                                      101
<PAGE>
    UNAUDITED PRO FORMA CONDENSED CONSOLIDATED PROFIT AND LOSS ACCOUNT DATA
                      FOR THE YEAR ENDED DECEMBER 31, 1999


    The following unaudited pro forma condensed consolidated profit and loss
account data for the year ended December 31, 1999, presented as if the merger
took place on January 1, 1999, are derived from (1) the audited historical
consolidated profit and loss account of WPP for that period, (2) Y&R's audited
historical statement of operations for that period, except for turnover (gross
billings) and cost of sales data which are unaudited, (3) unaudited
reclassifications to conform Y&R's historical financial statements to WPP's
presentation under U.K. GAAP and (4) unaudited adjustments to conform Y&R's
historical statement of operations with WPP's disclosed accounting policies
under U.K. GAAP. No pro forma adjustments were required to be made in the
preparation of the unaudited pro forma condensed consolidated profit and loss
account data for the year ended December 31, 1999 set forth below.



<TABLE>
<CAPTION>
                                                                WPP         Y&R             PRO FORMA
                                                             ---------   ---------   -----------------------
                                                                 L           L           L            $
                                                             ---------   ---------   ----------   ----------
                                                               (IN MILLIONS, EXCEPT PER SHARE AND PER ADS
                                                                                AMOUNTS)
<S>                                                          <C>         <C>         <C>          <C>
TURNOVER (GROSS BILLINGS)..................................    9,345.9     5,273.1     14,619.0     22,118.5
Cost of Sales..............................................   (7,173.3)   (4,211.7)   (11,385.0)   (17,225.5)
                                                             ---------   ---------   ----------   ----------
REVENUE....................................................    2,172.6     1,061.4      3,234.0      4,893.0
Direct Costs...............................................     (317.3)         --       (317.3)      (480.1)
                                                             ---------   ---------   ----------   ----------
GROSS PROFIT...............................................    1,855.3     1,061.4      2,916.7      4,412.9
Operating Costs............................................   (1,591.8)     (923.4)    (2,515.2)    (3,805.5)
                                                             ---------   ---------   ----------   ----------
OPERATING PROFIT...........................................      263.5       138.0        401.5        607.4
Income from Associates.....................................       27.3         6.6         33.9         51.3
                                                             ---------   ---------   ----------   ----------
PROFIT ON ORDINARY ACTIVITIES BEFORE INTEREST AND
  TAXATION.................................................      290.8       144.6        435.4        658.7
Net interest payable and similar charges...................      (35.4)       (9.2)       (44.6)       (67.5)
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION..............      255.4       135.4        390.8        591.2
Tax on profit on ordinary activities before exceptional
  item.....................................................      (76.6)      (50.6)      (127.2)      (192.5)
Exceptional tax credit arising on exercised stock
  options..................................................         --        26.2         26.2         39.7
TAX ON PROFIT ON ORDINARY ACTIVITIES.......................      (76.6)      (24.4)      (101.0)      (152.8)
                                                             ---------   ---------   ----------   ----------
PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION...............      178.8       111.0        289.8        438.4
Minority interests.........................................       (6.0)       (2.7)        (8.7)       (13.1)
                                                             ---------   ---------   ----------   ----------
PROFIT ATTRIBUTABLE TO ORDINARY SHARE OWNERS...............      172.8       108.3        281.1        425.3
                                                             =========   =========   ==========   ==========

EARNINGS PER SHARE
Basic earnings per ordinary share..........................      22.9p      157.6p        27.0p   40.9 CENTS
Diluted earnings before exceptional tax credit per ordinary
  share....................................................      22.5p       99.0p        22.9p   34.6 CENTS
Diluted earnings per ordinary share........................      22.5p      130.6p        25.2p   38.1 CENTS

EARNINGS PER ADS
Basic earnings per ADS.....................................     114.5p         n/a       135.0p   204.5 CENTS
Diluted earnings before exceptional tax credit per ADS.....     112.5p         n/a       114.5p   173.0 CENTS
Diluted earnings per ADS...................................     112.5p         n/a       126.0p   190.5 CENTS
</TABLE>



     THE NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL
                                  INFORMATION
                       ARE AN INTEGRAL PART OF THIS DATA.


                                      102
<PAGE>

            UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
                                AT JUNE 30, 2000



    The following unaudited pro forma condensed consolidated balance sheet at
June 30, 2000 is derived from (1) the unaudited historical consolidated balance
sheet of WPP at June 30, 2000, (2) the unaudited historical consolidated balance
sheet of Y&R at June 30, 2000, (3) unaudited reclassifications to conform Y&R's
audited historical balance sheet to WPP's presentation under U.K. GAAP,
(4) unaudited adjustments to conform Y&R's historical balance sheet to WPP's
disclosed accounting policies under U.K. GAAP, and (5) the unaudited pro forma
adjustments described in the Notes to the Unaudited Pro Forma Condensed
Consolidated Financial Information. These unaudited pro forma adjustments were
determined as if the merger had occurred on June 30, 2000.



<TABLE>
<CAPTION>
                                                                                     PRO FORMA
                                                                WPP        Y&R      ADJUSTMENTS        PRO FORMA
                                                              --------   --------   -----------   -------------------
                                                                 L          L            L           L          $
                                                              --------   --------   -----------   --------   --------
                                                                                   (IN MILLIONS)
<S>                                                           <C>        <C>        <C>           <C>        <C>
FIXED ASSETS
Intangible assets
  Corporate brands..........................................     350.0         --          --        350.0      529.6
  Goodwill-existing.........................................     511.0      251.2      (251.2)       511.0      773.1
  Goodwill-resulting from the transaction...................        --         --     3,964.3      3,964.3    5,997.9
Tangible assets.............................................     211.1      127.7        30.9        369.7      559.4
Investments.................................................     448.9      159.6       (36.2)       572.3      865.9
                                                              --------   --------     -------     --------   --------
                                                               1,521.0      538.5     3,707.8      5,767.3    8,725.9

CURRENT ASSETS
Stocks and work in progress.................................     198.1       75.8          --        273.9      414.4
Debtors.....................................................   1,336.3      753.1          --      2,089.4    3,161.3
Debtors within working capital facility:
  Gross debts...............................................     396.3         --          --        396.3      599.6
  Non-returnable proceeds...................................    (228.1)        --          --       (228.1)    (345.1)
Cash at bank and in hand....................................     395.9      105.2       218.1        719.2    1,088.1
                                                              --------   --------     -------     --------   --------
                                                               2,098.5      934.1       218.1      3,250.7    4,918.3

CREDITORS: amounts falling due within
  one year..................................................  (2,404.2)  (1,097.1)      (92.7)    (3,594.0)  (5,437.7)
NET CURRENT LIABILITIES.....................................    (305.7)    (163.0)      125.4       (343.3)    (519.4)
TOTAL ASSETS LESS CURRENT LIABILITIES.......................   1,215.3      375.5     3,833.2      5,424.0    8,206.5
CREDITORS: amounts falling due after more
  than one year.............................................    (754.9)    (330.5)         --     (1,085.4)  (1,642.2)
PROVISIONS FOR LIABILITIES AND CHARGES......................     (75.7)      (7.1)         --        (82.8)    (125.3)
                                                              --------   --------     -------     --------   --------
NET ASSETS..................................................     384.7       37.9     3,833.2      4,255.8    6,439.0
                                                              --------   --------     -------     --------   --------

CAPITAL AND RESERVES
Called up share capital.....................................      77.9        0.5        39.9        118.3      179.0
Reserves....................................................     296.6       27.7     3,793.3      4,117.6    6,229.9
                                                              --------   --------     -------     --------   --------
EQUITY SHARE OWNERS' FUNDS..................................     374.5       28.2     3,833.2      4,235.9    6,408.9
Minority interests..........................................      10.2        9.7          --         19.9       30.1
                                                              --------   --------     -------     --------   --------
TOTAL CAPITAL EMPLOYED......................................     384.7       37.9     3,833.2      4,255.8    6,439.0
                                                              --------   --------     -------     --------   --------
</TABLE>



     THE NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL
                                  INFORMATION
                       ARE AN INTEGRAL PART OF THIS DATA.


                                      103
<PAGE>
            NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
                             FINANCIAL INFORMATION


1. TRANSLATION OF Y&R CONSOLIDATED FINANCIAL STATEMENTS



    Y&R presents its financial statements in U.S. dollars. Solely for
convenience, the results of Y&R, as adjusted and restated to conform with WPP's
disclosed accounting policies under U.K. GAAP, have been translated into pounds
sterling using a rate of $1.6178 to L1.00, the average exchange rate for the
year ended December 31, 1999 and $1.57 to L1.00, the average exchange rate for
the six months ended June 30, 2000. The balance sheet has been translated into
pounds sterling using a rate of $1.5166 to L1.00, the closing rate on June 30,
2000.



    These translations should not be construed as a representation that the U.S.
dollar amounts actually represent, or could be converted into, U.K. pounds
sterling at the rates indicated.


2. UNAUDITED PRO FORMA ACQUISITION ADJUSTMENTS

    The Unaudited Pro Forma Condensed Consolidated Financial Information records
the merger as being accounted for as an acquisition with the excess of the fair
value of the consideration over the fair value of net assets acquired being
allocated to goodwill.


    The Unaudited Pro Forma Condensed Consolidated Financial Information assumes
that WPP will issue 4.175 WPP ordinary shares, equivalent to .835 of a WPP ADS,
in exchange for each Y&R common share. The total purchase price assumed is based
upon the WPP closing middle market quotation on June 30, 2000 of L9.65 and the
number of Y&R shares in existence on June 30, 2000 of 73.2 million combined with
23.6 million stock options multiplied by the exchange ratio of 4.175. This also
assumes that 404 million new WPP ordinary shares will be issued in connection
with the merger. In calculating the number of new WPP shares to be issued, no
account has been taken of (1) any Y&R common shares issued since June 30, 2000;
(2) any Y&R stock options issued since June 30, 2000; (3) any WPP ordinary
shares to be issued in respect of the Y&R 3% convertible notes; or (4) any new
WPP ordinary shares that will have to be issued as consideration for certain
previous acquisitions by Y&R.



    Estimated professional fees of L55.6 million (primarily legal, investment
bankers' and accountants' fees) and stamp duty of L37.1 million related to the
acquisition are assumed to be accounted for as acquisition costs and share issue
costs, respectively. These transaction costs of L92.7 million are expected to be
paid on completion of the merger and as a result have been accrued in the pro
forma net assets statement (creditors: amounts falling due within one year).



    A preliminary allocation of the purchase price has been performed for
purposes of the Unaudited Pro Forma Condensed Consolidated Financial Information
based on initial appraisal estimates and other valuation studies which are in
process and which WPP believes are reasonable. The final allocation is subject
to completion of these studies, which is expected to be within the next twelve
months. It is expected that as a result of these studies further adjustments may
be required, particularly in relation to taxation and other balance sheet
accounts. A summary, in accordance with U.K. GAAP, is shown below:



<TABLE>
<CAPTION>
                                                                   AT
                                                              JUNE 30, 2000
                                                              -------------
                                                                    L
                                                              (IN MILLIONS)
<S>                                                           <C>
Share consideration (L40.4 million share capital; L3,821.0
  million share premium)....................................     3,898.5
Professional fees...........................................        55.6
Total purchase consideration................................     3,954.1
Less:
  Fair value of net liabilities acquired (see below)........       228.3
  Proceeds on exercise of Y&R options (a)...................      (218.1)
                                                                 -------
Goodwill....................................................     3,964.3
                                                                 =======
</TABLE>


                                      104
<PAGE>
            NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
                             FINANCIAL INFORMATION

2. UNAUDITED PRO FORMA ACQUISITION ADJUSTMENTS (CONTINUED)

    Goodwill arising on the transaction has been assumed to have an indefinite
useful economic life and has therefore not been amortized. Under U.K. GAAP,
goodwill assumed to have an indefinite life is subject to an annual impairment
review conducted in accordance with FRS 11 "Impairment of Fixed Assets and
Goodwill."



    Explanation of goodwill adjustments:



    (a) Proceeds from the assumed exercise of 21,459,668 Y&R options outstanding
       at June 30, 2000 which are or become exercisable as a result of the
       merger.


    Fair value adjustments relate to intangible fixed assets, tangible fixed
assets, fixed asset investments and the proceeds from the exercise of Y&R stock
options.


<TABLE>
<CAPTION>
                                                                   AT
                                                              JUNE 30, 2000
                                                              -------------
                                                                    L
                                                              (IN MILLIONS)
<S>                                                           <C>
Book value of net assets in accordance with U.K. GAAP.......       37.9

Fair value adjustments:

Elimination of existing goodwill(a).........................     (251.2)
Revaluation of 285 Madison Avenue(b)........................       30.9
Revaluation of listed investments(c)........................      (30.0)
Elimination of treasury stock(d)............................       (6.2)
Minority interest...........................................       (9.7)
                                                                 ------

Fair value of net liabilities acquired......................     (228.3)
                                                                 ------
</TABLE>



    Explanation of fair value adjustments:



    (a) Eliminates the existing Y&R goodwill which will be assumed in the WPP
       goodwill arising as a result of the merger.



    (b) Revalues the freehold office owned by Y&R at 285 Madison Avenue to the
       estimated fair market value.



    (c) Revalues the listed investments held by Y&R to their fair market value
       based upon the market price at June 30, 2000.



    (d) Eliminates treasury stock held as an asset on the balance sheet which
       will be cancelled on completion under the terms of the merger agreement.


                                      105
<PAGE>
            NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
                             FINANCIAL INFORMATION


3. EARNINGS PER SHARE



    Unaudited pro forma earnings per share is calculated based on the weighted
average number of shares outstanding during the period, adjusted as if the
merger had taken place at the beginning of the period. The weighted average
number of shares is calculated using the average weighted number of WPP shares
during the respective periods aggregated with the weighted average number of Y&R
shares during the respective periods, multiplied by 4.175, the number of WPP
ordinary shares underlying the exchange ratio.



    Diluted earnings per share takes into account the exercise of WPP employee
share options where these are expected to be diluted, aggregated with the number
of Y&R options expected to be dilutive, multiplied by 4.175, the number of WPP
ordinary shares underlying the exchange ratio. The number of shares used in the
June 30, 2000 calculation of pro forma number of shares also includes the
dilutive impact of the Y&R 3% convertible notes.



<TABLE>
<CAPTION>
                                                               BASIC NUMBER OF SHARES (MILLIONS)
                                               -----------------------------------------------------------------
                                                      SIX MONTHS ENDED                     YEAR ENDED
                                                        JUNE 30, 2000                   DECEMBER 31, 1999
                                               -------------------------------   -------------------------------
                                                 WPP        Y&R      PRO FORMA     WPP        Y&R      PRO FORMA
                                               --------   --------   ---------   --------   --------   ---------
<S>                                            <C>        <C>        <C>         <C>        <C>        <C>
Weighted average.............................   757.5       72.6          n/a     753.3       68.7          n/a
Multiplication factor........................     n/a      4.175          n/a       n/a      4.175          n/a
                                                -----      -----      -------     -----      -----      -------
Weighted average, new WPP shares.............   757.5      303.1      1,060.6     753.3      286.8      1,040.1
                                                -----      -----      -------     -----      -----      -------
</TABLE>



    Unaudited pro forma basic earnings per share have been calculated using
unaudited pro forma earnings of L118.6 million for the six months ended June 30,
2000 and unaudited pro forma earnings of L281.1 million for the year ended
December 31, 1999.



<TABLE>
<CAPTION>
                                                              DILUTED NUMBER OF SHARES (MILLIONS)
                                               -----------------------------------------------------------------
                                                      SIX MONTHS ENDED                     YEAR ENDED
                                                        JUNE 30, 2000                   DECEMBER 31, 1999
                                               -------------------------------   -------------------------------
                                                 WPP        Y&R      PRO FORMA     WPP        Y&R      PRO FORMA
                                               --------   --------   ---------   --------   --------   ---------
<S>                                            <C>        <C>        <C>         <C>        <C>        <C>
Weighted average.............................   775.2       86.4          n/a     768.7       82.9          n/a
Multiplication factor........................     n/a      4.175          n/a       n/a      4.175          n/a
Weighted average, new WPP shares (U.K.
  GAAP)......................................   775.2      360.7      1,135.9     768.7      346.1      1,114.8
Weighted average number of share options
  issued with exercise criteria not yet
  satisfied..................................     5.2        n/a          5.2       5.4        n/a          5.4
                                                -----      -----      -------     -----      -----      -------
Weighted average, new WPP shares (U.S.
  GAAP)......................................   780.4      360.7      1,141.1     774.1      346.1      1,120.2
                                                =====      =====      =======     =====      =====      =======
</TABLE>



    Unaudited pro forma diluted earnings per share have been calculated using
unaudited pro forma earnings of L120.1 million for the six months ended June 30,
2000 (which includes L1.5 million in respect of the elimination of interest
arising in the six months to June 30, 2000 in respect of the Y&R 3% convertible
notes in 2000) and unaudited pro forma earnings of L281.1 million for the year
ended December 31, 1999.



    Unaudited pro forma diluted earnings before exceptional items per ordinary
share have been calculated using earnings of L138.7 million for the six months
ended June 30, 2000 and L254.9 million for the year ended December 31, 1999,
which reflect the removal of the Y&R exceptional operating


                                      106
<PAGE>
            NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
                             FINANCIAL INFORMATION


3. EARNINGS PER SHARE (CONTINUED)


charge in respect of treasury stock (for the six months ended June 30, 2000
only) and the Y&R exceptional tax credits arising on the exercise of stock
options.



    Basic and diluted earnings per ADS have been calculated as detailed above,
multiplied by a factor of 5.



4. U.S. TO U.K. GAAP ADJUSTMENTS TO HISTORICAL Y&R FINANCIAL STATEMENTS



    The following tables show the impact of the unaudited U.K. GAAP adjustments
on Y&R's historical financial statements (as conformed to WPP presentation
format) to restate these figures in accordance with WPP's accounting policies
under U.K. GAAP.



<TABLE>
<CAPTION>
                                                                                     UNAUDITED
                                                   Y&R                              U.S. TO U.K.                 Y&R
                                             AS REPORTED IN                             GAAP               AS RESTATED IN
UNAUDITED RESTATED PROFIT AND LOSS ACCOUNT   ACCORDANCE WITH   RECLASSIFICATIONS    ADJUSTMENTS            ACCORDANCE WITH
FOR THE YEAR ENDED DECEMBER 31, 1999            U.S. GAAP       (SEE NOTE (1))     (SEE NOTE (2))             U.K. GAAP
------------------------------------------   ---------------   -----------------   --------------   -----------------------------
                                                    $                                  $                  $               L
                                              (IN MILLIONS)                      (IN MILLIONS)      (IN MILLIONS)   (IN MILLIONS)
<S>                                          <C>               <C>                 <C>              <C>             <C>
Turnover (gross billings)..................           --                               8,530.9 (a)      8,530.9         5,273.1
Cost of Sales..............................           --                              (6,813.7)(a)     (6,813.7)       (4,211.7)
                                                ========             =====            ========       ==========      ==========
Revenue....................................      1,717.2                                    --          1,717.2         1,061.4
Operating Costs............................     (1,509.1)                                 15.2 (b)     (1,493.9)         (923.4)
                                                --------             -----            --------       ----------      ----------
Operating Profit/(loss)....................        208.1                                  15.2            223.3           138.0
Non-operating exceptional item.............         85.0                                 (85.0)(c)           --              --
Income from associates.....................           --              10.6 (i)              --             10.6             6.6
                                                --------             -----            --------       ----------      ----------
Profit/(loss) on ordinary activities before
  interest & taxation......................        293.1              10.6               (69.8)           233.9           144.6
Net interest payable & similar charges.....        (14.9)                                   --            (14.9)           (9.2)
                                                --------             -----            --------       ----------      ----------
Profit on ordinary activities before
  taxation.................................        278.2              10.6               (69.8)           219.0           135.4
Taxation on profit on ordinary activities
  before exceptional items.................       (111.3)            (42.4)(vii)
                                                                      (6.1)(i)            78.0 (f)        (81.8)          (50.6)
Exceptional tax credit on exercised stock
  options..................................           --              42.4 (vii)            --             42.4            26.2
                                                --------             -----            --------       ----------      ----------
Tax on profit on ordinary activities.......       (111.3)             (6.1)               78.0            (39.4)          (24.4)
                                                --------             -----            --------       ----------      ----------
Profit on ordinary activities after
  taxation.................................        166.9               4.5                 8.2            179.6           111.0
Equity in net income of unconsolidated
  affiliates...............................          4.5              (4.5)(i)              --               --              --
Minority interests.........................         (4.3)                                   --             (4.3)           (2.7)
                                                --------             -----            --------       ----------      ----------
Profit attributable to ordinary share
  owners...................................        167.1                --                 8.2            175.3           108.3
                                                --------             -----            --------       ----------      ----------
</TABLE>



 The accompanying notes to the unaudited restatements form an integral part of
                                   this data.


                                      107
<PAGE>
            NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
                             FINANCIAL INFORMATION


4. U.S. TO U.K. GAAP ADJUSTMENTS TO HISTORICAL Y&R FINANCIAL STATEMENTS
(CONTINUED)


<TABLE>
<CAPTION>
                                                                                      UNAUDITED
                                                    Y&R                              U.S. TO U.K.                 Y&R
                                              AS REPORTED IN                             GAAP               AS RESTATED IN
UNAUDITED RESTATED PROFIT AND LOSS ACCOUNT    ACCORDANCE WITH   RECLASSIFICATIONS    ADJUSTMENTS            ACCORDANCE WITH
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2000     U.S. GAAP       (SEE NOTE (1))     (SEE NOTE (2))             U.K. GAAP
--------------------------------------------  ---------------   -----------------   --------------   -----------------------------
                                                     $                                    $                $               L
                                               (IN MILLIONS)                        (IN MILLIONS)    (IN MILLIONS)   (IN MILLIONS)
<S>                                           <C>               <C>                 <C>              <C>             <C>
Turnover (gross billings)...................           --                 --            4,244.3 (a)      4,244.3         2,703.4
Cost of Sales...............................                                           (3,301.0)(a)     (3,301.0)       (2,102.6)
                                                 ========           ========           ========       ==========      ==========
Revenue.....................................        943.3                                    --            943.3           600.8
Operating Costs.............................       (833.7)                                 10.9 (b)       (822.8)         (524.1)
Operating exceptional item..................           --                                 (57.6)(g)        (57.6)          (36.7)
                                                 --------           --------           --------       ----------      ----------
Operating Profit/(loss).....................        109.6                                 (46.7)            62.9            40.0
Non-operating exceptional item..............         12.2                                 (12.2)(c)           --              --
Income from associates......................           --                3.8 (i)                             3.8             2.4
                                                 --------           --------           --------       ----------      ----------
Profit/(loss) on ordinary activities before
  interest & taxation.......................        121.8                3.8              (58.9)            66.7            42.4
Net interest payable & similar charges......         (8.1)                                                  (8.1)           (5.2)
                                                 --------           --------           --------       ----------      ----------
Profit on ordinary activities before
  taxation..................................        113.7                3.8              (58.9)            58.6            37.2
Taxation on profit on ordinary activities
  before exceptional items..................        (45.4)             (28.2)(vii)
                                                                        (1.6)(i)           29.9 (f)        (45.3)          (28.9)
Exceptional tax credit on exercised stock
  options...................................           --               28.2 (vii)           --             28.2            18.1
                                                 --------           --------           --------       ----------      ----------
Tax on profit on ordinary activities........        (45.4)              (1.6)              29.9            (17.1)          (10.8)
                                                 --------           --------           --------       ----------      ----------
Profit on ordinary activities after
  taxation..................................         68.3                2.2              (29.0)            41.5            26.4
Equity in net income of unconsolidated
  affiliates................................          2.2               (2.2)(i)             --               --              --
Minority interests..........................         (1.3)                                                  (1.3)           (0.9)
                                                 --------           --------           --------       ----------      ----------
Profit attributable to ordinary share
  owners....................................         69.2                 --              (29.0)            40.2            25.5
                                                 --------           --------           --------       ----------      ----------

<CAPTION>
UNAUDITED RESTATED NET ASSET STATEMENT AS AT JUNE 30, 2000
----------------------------------------------------------
FIXED ASSETS
<S>                                                          <C>               <C>                 <C>              <C>
Intangible assets..................................                371.9               (4.2)(ii)         (73.6)(b)
Goodwill...........................................                                                       86.8 (e)        380.9
Tangible fixed assets..............................                189.4                4.2 (ii)                          193.6
Investments in associated undertakings.............                 35.1                 --                 --             35.1
Other investments..................................                151.9                9.5 (vi)          45.6 (d)        207.0
Other assets.......................................                197.6             (197.6)(iii)           --               --
                                                                --------           --------           --------       ----------
                                                                   945.9             (188.1)              58.8            816.6
                                                                --------           --------           --------       ----------
CURRENT ASSETS
Stocks & work in progress..........................                115.0                                                  115.0
Debtors............................................              1,130.7               13.8 (iv)            --               --
                                                                      --              197.6 (iii)       (199.9)(f)      1,142.2
Cash at bank & in hand.............................                173.3              (13.8)(iv)                          159.5
                                                                --------           --------           --------       ----------
                                                                 1,419.0              197.6             (199.9)         1,416.7
                                                                --------           --------           --------       ----------

CREDITORS: amounts falling due within one year.....             (1,665.2)               0.5 (v)            0.8 (h)     (1,663.9)
                                                                --------           --------           --------       ----------

Net Current Liabilities............................               (246.2)             198.1             (199.1)          (247.2)
                                                                --------           --------           --------       ----------
Total Assets less Current Liabilities..............                699.7               10.0             (140.3)           569.4
                                                                --------           --------           --------       ----------
CREDITORS: amounts falling due after more than one year..         (434.3)              10.2 (v)          (86.8)(e)
                                                                                                           9.7 (f)       (501.2)

PROVISIONS FOR LIABILITIES AND CHARGES.............                                   (10.7)(v)                           (10.7)
                                                                --------           --------           --------       ----------
NET ASSETS.........................................                265.4                9.5             (217.4)            57.5
                                                                --------           --------           --------       ----------

<CAPTION>
UNAUDITED RESTATED NET ASSET STATEMENT AS AT JUNE 30, 2000
----------------------------------------------------------
FIXED ASSETS
<S>                                                          <C>
Intangible assets..................................
Goodwill...........................................                251.2
Tangible fixed assets..............................                127.7
Investments in associated undertakings.............                 23.1
Other investments..................................                136.5
Other assets.......................................                   --
                                                              ----------
                                                                   538.5
                                                              ----------
CURRENT ASSETS
Stocks & work in progress..........................                 75.8
Debtors............................................                   --
                                                                   753.1
Cash at bank & in hand.............................                105.2
                                                              ----------
                                                                   934.1
                                                              ----------
CREDITORS: amounts falling due within one year.....             (1,097.1)
                                                              ----------
Net Current Liabilities............................               (163.0)
                                                              ----------
Total Assets less Current Liabilities..............                375.5
                                                              ----------
CREDITORS: amounts falling due after more than one year..
                                                                  (330.5)
PROVISIONS FOR LIABILITIES AND CHARGES.............                 (7.1)
                                                              ----------
NET ASSETS.........................................                 37.9
                                                              ----------
</TABLE>



 The accompanying notes to the unaudited restatements form an integral part of
                                   this data.


                                      108
<PAGE>
            NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
                             FINANCIAL INFORMATION


NOTE 1--RECLASSIFICATIONS



    Reclassifications have been made to the Y&R historical financial information
presented under U.S. GAAP to conform to WPP's presentation and disclosed
accounting policies under U.K. GAAP. None of these reclassifications impact net
income or net assets except as described in (vi) below.



    These reclassifications include the following items:



    (I)  EQUITY ACCOUNTING



    In accordance with U.K. GAAP, the investor's share of operating profit or
    loss of associated undertakings and joint ventures is shown separately on
    the face of the profit and loss account and the investor's share of the
    taxation charge of associated undertakings and joint ventures is included
    within the taxation charge shown in the profit and loss account. Under
    U.S. GAAP, net after-tax profits or losses are included in the income
    statement as a single line item.



    (II)  INTANGIBLE FIXED ASSETS



    Certain intangible fixed assets have been reclassified as tangible fixed
    assets in accordance with WPP's disclosed accounting policies.



    (III)  DEBTORS



    Deferred income taxes and other noncurrent assets have been reclassified
    under debtors within current assets to conform with WPP's balance sheet
    presentation under U.K. GAAP.



    (IV)  CASH



    Financial instruments with an initial maturity of up to three months have
    been reclassified from cash and cash equivalents to other current assets,
    included within debtors.



    (V)  PENSION LIABILITIES



    Pension liabilities have been reclassified from creditors: amounts falling
    due within one year and creditors: amounts falling due after more than one
    year to provisions for liabilities and charges.



    (VI)  TREASURY STOCK



    Under U.S. GAAP when a company acquires its own shares (treasury stock) the
    cost of the shares acquired is shown as a reduction from capital. Under
    WPP's presentation, such shares are shown within investments included within
    fixed assets. This increased net assets at June 30, 2000 by $9.5 million.



    (VII)  EXCEPTIONAL TAX CREDIT ON EXERCISED STOCK OPTIONS



    For U.K. GAAP presentation purposes within this restatement, the cash
    benefit for tax purposes relating to stock options exercised has been
    separately presented as an exceptional tax credit.


                                      109
<PAGE>
            NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
                             FINANCIAL INFORMATION


NOTE 2--U.S. TO U.K. GAAP ADJUSTMENTS



    Accounting principles generally accepted in the U.K. differ in certain
material respects from those generally accepted in the U.S. The differences
which are material to restating the historical consolidated financial statements
of Y&R to conform to WPP's disclosed accounting policies under U.K. GAAP are set
out below.



(A) TURNOVER (GROSS BILLINGS) AND COST OF SALES



    In accordance with the presentation adopted by WPP, turnover (gross
billings) comprises the gross amounts billed to clients in respect of
commission-based income together with the total of other fees earned. Cost of
sales comprises media payments and production costs. Such amounts have not been
included in the historical audited financial statements of Y&R and have been
extracted from unaudited underlying accounting records for the purposes of this
restatement.


(B) GOODWILL

    In accordance with U.K. GAAP and FRS 10 "Goodwill and Intangible Assets,"
goodwill resulting from acquisitions made by Y&R on or after January 1, 1998 has
been capitalized as an intangible asset. WPP has assumed that this goodwill has
an indefinite life and as a result no amortization has been provided. Under U.K.
GAAP, goodwill assumed to have an indefinite life is subject to an annual
impairment review in accordance with FRS 11 "Impairment of Fixed Assets and
Goodwill."

    Goodwill resulting from acquisitions made by Y&R before January 1, 1998 has
been fully written off against equity share owners' funds, in accordance with
the then preferred treatment adopted by WPP under U.K. GAAP.

    Under U.S. GAAP, goodwill resulting from a business combination accounted
for as a purchase is amortized over its estimated useful life, not to exceed 40
years. Y&R's management evaluates the carrying value of Y&R's tangible and
intangible assets each year, or whenever events or circumstances indicate that
these assets may be impaired. Intangible assets are determined to be impaired if
the future anticipated undiscounted cash flows arising from the use of the
intangible assets are less than their carrying value. If an impairment is deemed
to have occurred, the asset is written down to its fair value.


    This adjustment increased operating profit for the year ended December 31,
1999 by $15.2 million and for the six month period ended June 30, 2000 by
$10.9 million. The adjustment reduced goodwill (intangibles) by $73.6 million as
at June 30, 2000.



(C) NON-OPERATING EXCEPTIONAL ITEMS



    In 1999, in accordance with U.S. GAAP, Young & Rubicam recognized a gain on
the sale of certain assets of Brand Dialogue in exchange for a minority
ownership interest in Luminant and additional consideration received in the
fourth quarter of 1999 as a result of achieving revenue and operating profit
performance targets of the Brand Dialogue assets. During the six months ended
June 30, 2000, Y&R recognized further gains largely relating to (a) additional
consideration received in relation to Brand Dialogue and (b) the sale of certain
assets and rights known as Y&R Teamspace in exchange for an operating interest
in eMotion Inc. Under U.K. GAAP, these gains would be included in the statement
of total recognized gains and losses which has not been separately presented.
This reduced profit on ordinary activities before interest and taxation by
$85.0 million for the year ended December 31, 1999 and by $12.2 million for the
six months ended June 30, 2000.


                                      110
<PAGE>
            NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
                             FINANCIAL INFORMATION


NOTE 2--U.S. TO U.K. GAAP ADJUSTMENTS (CONTINUED)


(D) MARKETABLE INVESTMENTS



    In accordance with U.K. GAAP and WPP's acccounting policy, marketable
investments that represent an interest of less than 20% are stated at cost less
provision for diminution in value. Under U.S. GAAP, where such investments are
listed investments and are "available for sale," they are marked to market and
any resulting unrealized gain or loss is recorded in share owners' funds. This
increased fixed asset investments by $45.6 million at June 30, 2000.



(E) CONTINGENT CONSIDERATION



    In accordance with U.K. GAAP and WPP's accounting policy, a liability has
been reflected for contingent consideration in instances where management
considers the likelihood of payment probable. Under U.S. GAAP, contingent
consideration is not recognized until the outcome of the contingency is
determined beyond a reasonable doubt. This increased goodwill (intangible
assets) and creditors: amounts falling due after more than one year by
$86.8 million at June 30, 2000.



(F) DEFERRED TAXES



    Under U.K. GAAP, deferred tax assets are accounted for only to the extent
that it is considered probable that a liability or asset will materialize in the
foreseeable future. Under U.S. GAAP, deferred taxes are accounted for on all
timing differences and a valuation allowance is established in respect of those
deferred tax assets where it is more likely than not that some portion will
remain unrealized. This reduced the tax charge in the profit and loss account
for the year ended December 31, 1999 by $78.0 million, and for the six month
period ended June 30, 2000, by $29.9 million. The adjustment reduced debtors by
$199.9 million and creditors: amounts falling due in more then one year by
$9.7 million at June 30, 2000.



(G) TREASURY STOCK



    Under U.K. GAAP, if repurchased treasury stock is used for the purpose of
satisfying Y&R's obligation upon exercise of stock options issued to employees,
Y&R should record as an operating cost, the excess of the cost of repurchasing
the treasury stock over the proceeds from employees on exercising stock options.
Under U.S. GAAP, this difference is recorded as a reduction of shareholders'
equity. For the six month period ended June 30, 2000, under U.K. GAAP, this
results in a charge of $57.6 million which has been reflected as an operating
exceptional item within this restatement. For the year ended December 31, 1999,
the difference between the proceeds on exercise of employee share options less
the cost of satisfying these options is not material.



(H)  PENSION LIABILITY



Under U.S. GAAP, Y&R recognized an additional pension liability through
shareholders' equity. An adjustment of $0.8 million has been made at June 30,
2000 to eliminate this liability as it is not applicable under U.K. GAAP.



5. COST SAVINGS


    WPP and Y&R have quantified to date estimated pre-tax annual cost savings of
$30 million that they expect to result from the merger by the year ending
December 31, 2001. The Unaudited Pro Forma Consolidated Condensed Finanical
Information does not contain an adjustment to reflect these

                                      111
<PAGE>
            NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
                             FINANCIAL INFORMATION


5. COST SAVINGS (CONTINUED)

estimated cost savings. There can be no assurance that anticipated cost savings
will be achieved in the expected amounts or at the times anticipated.


6. RECONCILIATION OF UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL
   INFORMATION FROM U.K. GAAP TO U.S. GAAP


    The tables below set out the principal adjustments to profit and share
owners funds reflected in the Unaudited Pro Forma Consolidated Condensed
Financial Information which would be required if U.S. GAAP had been applied.
Note 3 above sets out the explanation for these adjustments.

NET INCOME


<TABLE>
<CAPTION>
                                                                 YEAR ENDED
                                                              DECEMBER 31, 1999
                                                              -----------------
                                                                      L
                                                                (IN MILLIONS,
                                                               EXCEPT PER ADS
                                                                  AMOUNTS)
<S>                                                           <C>
Unaudited Pro Forma Profit Attributable to Ordinary Share
  Owners Under U.K. GAAP....................................        281.1
    U.S. GAAP Adjustments:
      Goodwill amortization--existing.......................        (42.1)
      Amortization of additional goodwill and other
        separately identifiable intangibles arising as a
        result of the transaction...........................       (124.1)
      Executive compensation................................        (58.4)
      Deferred tax items....................................          3.3
      Gain on sale of certain assets of Brand Dialogue......         52.5
                                                                   ------
Unaudited Pro Forma Net Income as Adjusted for U.S. GAAP....        112.3
Earnings per ADS (U.S. GAAP)
      Basic.................................................         53.0p
      Diluted...............................................         50.0p
</TABLE>



<TABLE>
<CAPTION>
                                                                SIX MONTHS
                                                                  ENDED
                                                              JUNE 30, 2000
                                                              --------------
                                                                    L
                                                              (IN MILLIONS,
                                                              EXCEPT PER ADS
                                                                 AMOUNTS)
<S>                                                           <C>
Unaudited Pro Forma Profit Attributable to Ordinary Share
  Owners Under U.K. GAAP....................................      118.6
    U.S. GAAP Adjustments:
      Goodwill amortization--existing.......................      (21.9)
      Amortization of additional goodwill and other
        separately identifiable intangibles arising as a
        result of the transaction...........................      (62.0)
      Executive compensation................................       (5.4)
      Deferred tax items....................................       (8.7)
      Gain on sale of certain assets of Brand Dialogue and
        TeamSpace...........................................        7.8
      Eliminate exceptional charge arising in respect of
        treasury stock......................................       36.7
                                                                  -----
Unaudited Pro Forma Net Income as adjusted for U.S. GAAP....       65.1
Earnings per ADS (U.S. GAAP)
      Basic.................................................       30.5p
      Diluted...............................................       29.0p
</TABLE>


                                      112
<PAGE>
            NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
                             FINANCIAL INFORMATION


6. RECONCILIATION OF UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL
   INFORMATION FROM U.K. GAAP TO U.S. GAAP (CONTINUED)

SHARE OWNERS' FUNDS


<TABLE>
<CAPTION>
                                                                   AT
                                                              JUNE 30, 2000
                                                              -------------
                                                                    L
                                                              (IN MILLIONS)
<S>                                                           <C>
Unaudited Pro Forma Share Owners' Funds Under U.K. GAAP.....     4,235.9
  U.S. GAAP Adjustments:
    Capitalization of goodwill arising on acquisition (net
      of accumulated amortization and amounts capitalized
      under U.K. GAAP)......................................       474.8
    Revaluation of investments marked to market.............        74.1
    Shares owned by Employee Share Ownership Plan...........      (113.3)
    Deferred tax items......................................       275.1
    Other...................................................        (3.8)
                                                                 -------
Unaudited Pro Forma Share Owners' Funds Under U.S. GAAP.....     4,942.8
                                                                 -------
</TABLE>



7. SEGMENTAL INFORMATION



    The tables below present unaudited pro forma segment information, including
Y&R segments presented to conform with the segments as reported by WPP and to
U.K. GAAP.


Contribution by Geographical Area:


<TABLE>
<CAPTION>
                                                                      SIX MONTHS
                                                YEAR ENDED               ENDED
                                             DECEMBER 31, 1999       JUNE 30, 2000
                                            -------------------   -------------------
L MILLIONS                                  REVENUE    PBIT(1)    REVENUE    PBIT(1)
----------                                  --------   --------   --------   --------
<S>                                         <C>        <C>        <C>        <C>
North America.............................  1,533.6     223.1       884.8     143.7
United Kingdom............................    529.5      58.3       290.0      27.9
Continental Europe........................    691.3      93.0       353.6      44.8
Asia Pacific, Latin America, Africa and
  Middle East.............................    479.6      61.0       281.5      23.4
                                            -------     -----     -------     -----
                                            3,234.0     435.4     1,809.9     239.8
                                            =======     =====     =======     =====
</TABLE>


Contribution by Operating Sector:


<TABLE>
<CAPTION>
                                                                       SIX MONTHS
                                                 YEAR ENDED               ENDED
                                              DECEMBER 31, 1999       JUNE 30, 2000
                                             -------------------   -------------------
L MILLIONS                                   REVENUE    PBIT(1)    REVENUE    PBIT(1)
----------                                   --------   --------   --------   --------
<S>                                          <C>        <C>        <C>        <C>
Advertising & media investment
  management...............................  1,525.6     240.5       830.9     128.2
Information & consultancy..................    419.7      42.1       239.5      22.5
Public relations & public affairs..........    374.6      42.0       247.1      36.1
Branding & identity, healthcare and
  specialist communications................    914.1     110.8       492.4      53.0
                                             -------     -----     -------     -----
                                             3,234.0     435.4     1,809.9     239.8
                                             =======     =====     =======     =====
</TABLE>


------------------------

(1) "PBIT" means profit on ordinary activities before interest, taxation and
    exceptional items.


                                      113
<PAGE>
                       DESCRIPTION OF WPP ORDINARY SHARES

GENERAL


    The following information is a summary of the material terms of the ordinary
shares nominal value 10p each as specified in WPP's articles of association as
presently in effect. You are encouraged to read WPP's memorandum and articles of
association which are an exhibit to the registration statement of which this
proxy statement/prospectus forms a part. See also "Description of WPP American
Depositary Shares" and "Comparison of Rights of Y&R Stockholders and WPP Share
Owners."



    Unless you elect to receive ordinary shares, the WPP ordinary shares issued
in exchange for Y&R common stock in the merger will be delivered in the form of
WPP ADSs, each of which represents five WPP ordinary shares. The deposit
agreement among Citibank, N.A., WPP and ADS holders governs the rights of
holders of WPP ADSs as described in "Description of WPP American Depositary
Shares." You should be aware that these rights are different from the rights of
the owners of WPP ordinary shares.


    All of the issued WPP ordinary shares are fully paid. WPP ordinary shares
are represented in certificated form and also in uncertificated form under
"CREST." CREST is an electronic settlement system in the United Kingdom which
enables WPP ordinary shares to be evidenced other than by a physical certificate
and transferred electronically rather than by delivery of a physical
certificate. After the merger, all WPP ordinary shares, including those
underlying the WPP ADSs to be issued in the merger:


    - may be represented by certificates in registered form issued (subject to
      the terms of issue of the shares) by WPP's registrars, Computershare
      Services PLC, P.O. Box 82, The Pavilions, Bridgewater Road, Bristol BS99
      7NH, England; or


    - may be in uncertificated form with the relevant CREST member account being
      credited with the WPP ordinary shares issued.


    As of August 18, 2000, there were 778,963,425 WPP ordinary shares
outstanding of which 14,901,875 were represented by WPP ADSs.


    Under English law, persons who are neither residents nor nationals of the
U.K. may freely hold, vote and transfer ordinary shares in the same manner and
under the same terms as U.K. residents or nationals.

DIVIDENDS

    If recommended by the directors of WPP, WPP share owners may, by ordinary
resolution, declare final dividends, but no dividends may be declared in excess
of the amount recommended by the directors. The directors may also pay interim
dividends without share owner approval. No dividend may be paid other than out
of profits available for distribution under the U.K. Companies Act. For a
further discussion, see "Comparison of Rights of Y&R Stockholders and WPP Share
Owners--Sources and Payment of Dividends." Dividends on WPP ordinary shares will
be announced and paid in pounds sterling. Dividends with respect to ordinary
shares underlying WPP ADSs will be converted into U.S. dollars by the ADS
depositary and distributed to the holders of WPP ADSs as described in
"Description of WPP American Depositary Shares--Share Dividends and Other
Distributions."

    WPP's articles of association permit a scrip dividend scheme under which
registered owners of WPP ordinary shares may be given the opportunity to elect
to receive fully paid WPP ordinary shares instead of cash, or a combination of
shares and cash, with respect to future dividends.

                                      114
<PAGE>
VOTING RIGHTS

    Every holder of WPP ordinary shares present in person or (being a
corporation) present by a duly authorized representative at a meeting of share
owners has one vote on a vote taken by a show of hands and on a poll every
holder of WPP ordinary shares who is present in person or by proxy has one vote
for each share of which he is the holder. Voting at any meeting of share owners
is by a show of hands unless a poll is demanded. A poll may be demanded by:

    - the chairman of the meeting;

    - at least five share owners having the right to vote at the meeting;

    - any share owner or share owners representing one-tenth or more of the
      total voting rights for all the members having the right to vote at the
      meeting; or

    - a share owner or share owners holding shares conferring a right to vote at
      the meeting on which the aggregate sum paid up is equal to not less than
      one-tenth of the total sum paid up on all the shares conferring such
      right.

    WPP has agreed that it will include for consideration by its share owners,
at the first annual general meeting after completion of the merger, a resolution
to amend its articles of association to provide, among other things, that all
special and extraordinary resolutions are to be taken on a poll.

    Ordinary resolutions decided on a show of hands must be approved by at least
a majority of the share owners present in person or by proxy. If a poll is
demanded, the resolution conducted on a poll must be approved by holders of at
least a majority of the votes cast. Both special and extraordinary resolutions
require the affirmative vote of at least 75% of the votes cast in person or by
proxy to be approved. If a poll is demanded, the special or extraordinary
resolution conducted on a poll must be approved by at least 75% of the votes
cast. We described the difference between ordinary, extraordinary and special
resolutions under "Comparison of Rights of Y&R Stockholders and WPP Share
Owners--Special Meetings of Share Owners."

    Registered holders of WPP ordinary shares may appoint a proxy to attend and
vote on their behalf at any share owners meeting. WPP has agreed in the merger
agreement that it will include for consideration by its share owners, at the
first annual general meeting after completion of the merger, a resolution to
amend WPP's articles of association to permit proxies to speak at share owners
meetings.

    Registered holders of WPP ADSs may vote the ordinary shares underlying their
ADSs by supplying voting instructions to the ADS depositary, who will endeavor
to vote the ordinary shares underlying the ADSs in accordance with those
instructions.

    WPP has agreed in the merger agreement that it will include for
consideration by its share owners, at the first annual general meeting after
completion of the merger, a resolution to amend its articles of association to
permit holders of WPP ADSs to attend, speak and vote at share owners meetings.

LIQUIDATION RIGHTS

    In the event of the liquidation of WPP, after payment of all liabilities and
applicable deductions under U.K. laws, including under Section 719 of the U.K.
Companies Act 1985 or Section 187 of the U.K. Insolvency Act 1986, which enables
the liquidator to make payments to employees or former employees on the
cessation or transfer of WPP's business, the remaining assets will be divided
equally among the holders of the WPP ordinary shares. The liquidator, however,
may divide among the share owners IN SPECIE the whole or any part of the
remaining assets and may determine how such division should be carried out as
among the share owners if the liquidator is authorized to do so by extraordinary
resolution of the share owners.

                                      115
<PAGE>
PREEMPTIVE RIGHTS AND NEW ISSUES OF SHARES

    Under Section 80 of the U.K. Companies Act, directors are, with certain
exceptions, unable to allot relevant securities without the authority of the
share owners in a general meeting. Relevant securities as defined in the U.K.
Companies Act would include WPP ordinary shares or securities convertible into
WPP ordinary shares. In addition, Section 89 of the U.K. Companies Act imposes
further restrictions on the issue of equity securities (as defined in the U.K.
Companies Act, which would include WPP ordinary shares and securities
convertible into ordinary shares) which are, or are to be, paid up wholly in
cash and not first offered to existing share owners.

    WPP's articles of association allow share owners in a general meeting to
authorize the directors, for a period up to five years, to allot relevant
securities generally up to an aggregate nominal amount fixed by the share
owners, and to allot equity securities for cash other than in connection with a
rights issue. In accordance with institutional investor guidelines, the nominal
amount of relevant securities to be fixed by share owners is normally restricted
to one-third of the existing issued ordinary share capital, and the amount of
equity securities to be issued for cash other than in connection with a rights
issue is restricted to 5% of the existing issued ordinary share capital. At
WPP's annual general meeting in 2000, these amounts were fixed at L25,693,103
and L3,892,894, respectively.

    The authorities referred to above granted to the directors at the annual
general meeting in 2000 expire on June 25, 2005.

DISCLOSURE OF INTERESTS IN SHARES


    The U.K. Companies Act gives WPP the power to require persons whom it
believes to have an interest in its voting shares, to disclose certain
information with respect to those interests. Failure to supply the information
required may lead to disenfranchisement of the relevant shares and a prohibition
on their transfer and receipt of dividends and payments in respect of those
shares. In this context, the term "interest" is widely defined and will
generally include an interest of any kind whatsoever in voting shares, including
any interest of a holder of a WPP ADS. See "Comparison of Rights of Y&R
Stockholders and WPP Share Owners--Disclosure of Interests."


CHANGES IN CAPITAL

    WPP share owners may pass an ordinary resolution to do any of the following:

    - increase its share capital by the creation of new shares of such amount as
      the resolution prescribes;

    - consolidate and divide all or any of its share capital into new shares of
      a larger amount than its existing shares;

    - divide some or all of WPP's shares into shares of a smaller nominal
      amount; and

    - cancel any shares which have not, at the date of the relevant resolution,
      been taken or agreed to be taken by any person and reduce the amount of
      its authorized share capital by the amount of the shares so canceled.

    WPP will also be able to:

    - with the authority of share owners by special resolution, purchase its own
      shares; and

    - by special resolution and, where required by the U.K. Companies Act, with
      the sanction of the court, reduce its share capital, any capital
      redemption reserve, share premium account or any other undistributable
      reserve.

                                      116
<PAGE>
TRANSFER OF SHARES

    Except as described in this paragraph, WPP's articles of association will
not restrict the transferability of WPP ordinary shares. WPP ordinary shares
will be able to be transferred by an instrument in any usual form or in any form
acceptable to the directors. The board may refuse to register a transfer:

    (1) if it is of shares which are not fully paid;

    (2) if it is of shares on which WPP has a lien;

    (3) if it is not stamped and duly presented for registration, together with
       the share certificate and evidence of title as the board reasonably
       requires;

    (4) if it is with respect to more than one class of shares;

    (5) if it is in favor of more than four persons jointly; or

    (6) in certain circumstances, if the holder has failed to provide the
       required particulars to the investigating power referred to under
       "--Disclosure of Interests in Shares" above.

    WPP may not refuse to register transfers of WPP ordinary shares if this
refusal would prevent dealings in the shares on the London Stock Exchange from
taking place on an open and proper basis.

    If the board refuses to register a transfer of a share, it shall, within two
months after the date on which the transfer was lodged, send to the transferee
notice of the refusal.

    The registration of transfers may be suspended at any time and for any
period as the directors may determine. The register of share owners may not be
closed for more than 30 days in any year.

GENERAL MEETINGS AND NOTICES

    A share owner who is not registered on WPP's register of share owners with
an address in the U.K. and who has not supplied to WPP an address within the
U.K. for the purpose of giving notice will not be entitled to receive notices
from WPP. In certain circumstances, WPP will be able to give notices to share
owners by advertisement in newspapers in the U.K. Holders of WPP ADSs will be
entitled to receive notices under the terms of the deposit agreement relating to
WPP ADSs. See "Description of WPP American Depositary Shares--Voting Rights."
Under English law, WPP is required to hold an annual general meeting of share
owners within 15 months after the preceding annual general meeting and, subject
to the foregoing, the meeting may be held at a time and place determined by the
directors.

LIABILITY OF DIRECTORS AND OFFICERS

    See "Comparison of Rights of Y&R Stockholders and WPP Share
Owners--Liability of Directors and Officers" for a discussion of the inability
of an English company to exempt directors and officers from certain liabilities.

REGISTRAR


    The registrar for WPP ordinary shares is Computershare Services PLC,
P.O. Box 82, The Pavilions, Bridgewater Road, Bristol BS99 7NH, England.


                                      117
<PAGE>
                 DESCRIPTION OF WPP AMERICAN DEPOSITARY SHARES

GENERAL

    Citibank, N.A. as depositary will issue WPP ADSs to you in the form of a
certificated American depositary receipt upon completion of the merger, unless
you elect to receive WPP ordinary shares. Each ADS will represent an ownership
interest in, and the right to receive, five WPP ordinary shares, which WPP will
deposit with the custodian, which currently is Citibank, N.A.--London Branch.
Each ADS will also represent securities, cash or other property deposited with
the depositary but not distributed to ADS holders. The depositary's principal
office is located at 111 Wall Street, 5th Floor, New York, New York 10043, and
the custodian's principal office is located at 11 Old Jewry, London EC2R 8DB,
England.


    Because the depositary will be the legal owner of the underlying ordinary
shares, ADS holders will generally exercise their rights as share owners through
the depositary.


    You may hold ADSs either directly or indirectly through your broker or
financial institution. If you hold ADSs directly, you are an ADS holder. This
description assumes you hold your ADSs directly. If you hold the ADSs
indirectly, you must rely on the procedures of your broker or financial
institution to assert the rights of ADS holders described in this section. You
should consult with your broker or financial institution to find out what those
procedures are.

    The following is a summary of the deposit agreement between WPP, the
depositary and the holders of ADSs. Because it is a summary, it does not contain
all the information that may be important to you. For more complete information,
you should read the deposit agreement and the American depositary receipts
evidencing the ADSs. We describe in "Summary--Where You Can Find More
Information" how you can obtain copies of the deposit agreement and the ADSs. In
addition, you may inspect the deposit agreement and the ADR, at the principal
office of the depositary and at the office of the custodian.


    As of August 18, 2000, there were 2,980,375 WPP ADSs outstanding.


SHARE DIVIDENDS AND OTHER DISTRIBUTIONS

    HOW WILL ADS HOLDERS RECEIVE DIVIDENDS AND OTHER DISTRIBUTIONS ON THE ADSS?

    The depositary will pay to the ADS holders the cash dividends or other
distributions it or the custodian receives on shares or other deposited
securities, after deducting its fees and expenses. The ADS holders will receive
these distributions in proportion to the number of ordinary shares their ADSs
represent. However, before making any distribution, the depositary will deduct
any withholding taxes that must be paid under applicable laws. See "Material Tax
Consequences."


    - CASH.  The depositary will, promptly after payment, convert into U.S.
      dollars any cash dividend or distribution WPP pays on the ordinary shares.
      If conversion into U.S. dollars is not possible on a reasonable basis or
      if a necessary governmental approval cannot be obtained on a reasonable
      basis, the depositary may distribute the pounds sterling only to those ADS
      holders to whom it is practicable to do so or hold the pounds sterling it
      cannot convert for the account of the ADS holders who have not been paid.
      The depositary will not invest the pounds sterling and it will not be
      liable for any interest. The depositary will distribute only whole U.S.
      dollars and cents.


    - SHARES.  If WPP distributes ordinary shares as a dividend or free
      distribution, the depositary will either distribute new ADSs representing
      the distributed shares or, if new ADSs are not distributed, the ADSs then
      outstanding will also represent the distributed shares. If the depositary
      distributes new ADSs, it will only distribute whole ADSs and will sell
      shares which would require it to issue a fractional ADS and distribute the
      net proceeds to the ADS holders otherwise entitled to those shares.

                                      118
<PAGE>
    - RIGHTS TO RECEIVE ADDITIONAL SHARES.  If WPP offers holders of ordinary
      shares any rights, including rights to subscribe for additional shares,
      the depositary may, after consulting with WPP and if requested by WPP,
      distribute these rights to the holders of ADSs. If the depositary
      determines that it is not legal or not feasible to make these rights
      available to the holder of ADSs, the depositary may sell the rights and
      allocate the net proceeds to holders' accounts and, to the extent
      practicable distribute the net proceeds to the holders of ADSs in the same
      way it distributes cash. If WPP does not instruct the depositary
      otherwise, the depositary may allow rights that are not distributed or
      sold to lapse.

      U.S. securities laws may restrict the distribution of rights or the
      securities for which the rights are exercisable. The depositary will not
      offer holders of ADSs rights unless the offer and distribution of those
      rights and the securities to which the rights are exercisable are either
      exempt from registration or have been registered under the Securities Act.
      The deposit agreement does not obligate WPP to register under the
      Securities Act those rights or the securities for which they are
      exercisable.

    - OTHER DISTRIBUTIONS.  The depositary will send to the ADS holders anything
      else WPP distributes on deposited securities by any means the depositary
      thinks is legal, fair and practical. If it cannot make the distribution in
      that way, the depositary may decide to sell what WPP distributed and
      distribute the net proceeds, in the same way as it distributes cash.

    The deposit agreement does not obligate WPP to take any other action to
permit the distribution of ADSs, shares, rights or anything else to ADS holders.

DEPOSIT, WITHDRAWAL AND CANCELLATION

    HOW DOES THE DEPOSITARY ISSUE ADSS?

    The depositary will issue the ADSs that Y&R stockholders are entitled to
receive in the merger in certificated ADR form, against deposit of the
underlying ordinary shares. The depositary will issue ADSs to any person who
deposits ordinary shares, along with any appropriate instruments of transfer, or
endorsement, with the custodian. As a condition to issuing the ADSs for
deposited ordinary shares, the depositary may require delivery of evidence of
any necessary approvals of the governmental agency in England, if any, which is
responsible for regulating currency exchange at that time, and an agreement
transferring any rights as a share owner to receive dividends or other property.
Upon payment of its fees and of any taxes or charges, including stamp taxes or
stock transfer taxes or fees, the depositary will register the appropriate
number of ADSs in the names requested by the person depositing the ordinary
shares and will issue certificated ADRs representing ADSs or, if the depositing
person specifically requests, deliver the ADRs at the depositary's principal
office to the persons requested. THESE TAXES OR CHARGES WILL NOT BE PAYABLE BY
Y&R STOCKHOLDERS OR BY HOLDERS OF OUTSTANDING Y&R STOCK OPTIONS IN CONNECTION
WITH THEIR RECEIPT OF WPP ADSS PURSUANT TO THE MERGER AGREEMENT.

    HOW DO ADS HOLDERS CANCEL AN ADS AND OBTAIN ORDINARY SHARES?

    Subject to applicable law, holders of ADSs may submit a written request to
withdraw ordinary shares and turn in their ADRs, at the principal office of the
depositary. Ordinary shares that an ADS holder withdraws will be delivered in
registered form or by electronic delivery. Upon payment of its fees and of any
taxes or charges, including stamp taxes or stock transfer taxes and fees, the
depositary will deliver the deposited securities underlying the ADSs at the
office of the custodian, unless delivered electronically. The depositary may,
however, deliver at its principal office any dividends or distributions with
respect to the ordinary shares represented by the ADSs being turned in, or any
proceeds from the sale of any dividends, distributions or rights, which may be
held by the depositary. Alternatively, at the request, risk and expense of the
ADS holder, the depositary will deliver the ordinary shares at its principal
office in New York City.

                                      119
<PAGE>
VOTING RIGHTS

    HOW DO ADS HOLDERS VOTE?

    As soon as practicable after the depositary receives notice of any meeting
of WPP share owners, the depositary will fix a record date with respect to that
meeting for the purpose of allowing the ADS holders to give the depositary
instructions as to how to vote. The depositary will notify all registered
holders of ADSs as of that record date and deliver various materials to the ADS
holders. These materials will (1) describe the meeting time, place and the
matters to be voted on and (2) explain how the ADS holder may instruct the
depositary to vote the ordinary shares underlying the holder's ADSs. For
instructions to be valid, the depositary must receive them on or before the date
specified in the instructions. The depositary will, to the extent practical,
subject to applicable law and the provisions of the memorandum and articles of
association of WPP, vote the underlying ordinary shares as you instruct. The
depositary will only vote as you instruct. The depositary and its agents are not
responsible for failing to carry out voting instructions or for the manner of
carrying out voting instructions. If a holder of ADSs holds the ADSs through a
brokerage account or in a "street name" the holder must instruct the registered
holder to instruct the depositary with regard to voting the ordinary shares
underlying the ADSs.


    Although a holder of WPP ADSs is currently not entitled to attend, speak and
vote at WPP share owner meetings, WPP has agreed in the merger agreement that it
will include for consideration by its share owners at the first annual general
share owners meeting after completion of the merger a resolution to amend WPP's
articles of association to permit holders of ADSs to attend, speak and vote at
share owners meetings. We describe in "The Merger--Other Effects of the Merger"
beginning on page 67, the reports and notices that WPP files with the SEC as
well as those distributed to holders of ADSs.


FEES AND EXPENSES

<TABLE>
<CAPTION>

<S>                                            <C>
                    FOR:                       ADS HOLDERS MUST PAY:
- Each issuance of an ADR, including           $5.00 (or less) per 100 ADSs
  issuances as a result of a share dividend,
  share split or an exchange of shares for
  the underlying WPP ordinary shares

- Each surrender of an ADR, including if the   $5.00 (or less) per 100 ADSs
  deposit agreement terminates

- Each cash distribution                       $2.00 (or less) per 100 ADSs

- Transfer and registration of ordinary        Registration or transfer fees
  shares on WPP's share register from or to
  the name of the depositary or its agent
  when ordinary shares are deposited or
  withdrawn

- Transfers of ADRs                            $1.50 (or less) per ADR certificate

- Conversion of pounds sterling to U.S.        Fees and expenses incurred by the depositary
  dollars

- Cable, telex, facsimile transmission and     Fees and expenses incurred by the depositary
  delivery expenses, if expressly provided in
  the agreement

- As necessary                                 Certain taxes and governmental charges the
                                               depositary or the custodian has to pay on any
                                               ADS or ordinary share underlying an ADS, for
                                               example, stock transfer taxes, stamp duty
                                               reserve tax or withholding taxes
</TABLE>

                                      120
<PAGE>
    NO TAXES OR CHARGES WILL BE PAYABLE BY Y&R STOCKHOLDERS OR BY HOLDERS OF
OUTSTANDING Y&R STOCK OPTIONS IN CONNECTION WITH THEIR RECEIPT OF WPP ADSS
PURSUANT TO THE MERGER AGREEMENT.

PAYMENT OF TAXES

    The depositary may deduct the amount of any taxes owed from any payments to
the ADS holders. It may also restrict the transfer of ADSs or restrict the
withdrawal of underlying deposited securities until the ADS holders pay any
taxes owed on the ADSs or the underlying ordinary shares. It may also sell
deposited shares to pay any taxes owed. The ADS holders will remain liable if
the proceeds of the sale are not enough to pay the taxes. If the depositary
sells deposited shares, it will, if appropriate, reduce the number of ADSs held
to reflect the sale and pay any proceeds, or send any property, remaining after
it has paid the taxes.

RECLASSIFICATIONS, RECAPITALIZATIONS AND MERGERS

    If WPP:

    - Changes the nominal or par value of any of the WPP ordinary shares;

    - Reclassifies, splits or consolidates any of the WPP ordinary shares;

    - Distributes securities on any of the WPP ordinary shares that are not
      distributed to you; or

    - Recapitalizes, reorganizes, merges, consolidates or sells its assets,
      then:

       (1) the cash, shares or other securities received by the depositary will
           become new deposited securities under the deposit agreement, and each
           ADS will automatically represent its equal share of the new deposited
           securities; and

       (2) the depositary will, if WPP asks it to, issue new ADSs or ask holders
           of ADSs to surrender their outstanding ADSs in exchange for new ADSs
           identifying the new deposited securities.

DISCLOSURE OF INTERESTS

    The obligation of a holder of WPP ordinary shares and other persons with an
interest in the shares to disclose information to WPP under English law also
applies to holders of ADSs and any other persons with an interest in the ADSs.
The consequences for failure to comply with these provisions will be the same
for holders of ADSs and any other persons with an interest as for a holder of
WPP ordinary shares. See "Description of WPP Ordinary Shares--Disclosure of
Interests in Shares."

AMENDMENT AND TERMINATION

    HOW MAY THE DEPOSIT AGREEMENT BE AMENDED?

    WPP may agree with the depositary to amend the deposit agreement and the WPP
ADRs without the consent of holders of the ADSs for any reason. If the amendment
adds or increases fees or charges, except for taxes and governmental charges, or
prejudices any substantial right of the ADS holders, it will only become
effective 60 days after the depositary notifies the ADS holders of the
amendment. AT THE TIME AN AMENDMENT BECOMES EFFECTIVE, HOLDERS OF THE ADSS ARE
CONSIDERED, BY CONTINUING TO HOLD THEIR ADSS, TO CONSENT TO THE AMENDMENT AND TO
BE BOUND BY THE DEPOSIT AGREEMENT AS AMENDED. HOWEVER, NO AMENDMENT WILL IMPAIR
THE RIGHT OF HOLDERS OF THE ADSS TO RECEIVE THE DEPOSITED SECURITIES IN EXCHANGE
FOR THEIR ADSS.

                                      121
<PAGE>
    HOW MAY THE DEPOSIT AGREEMENT BE TERMINATED?

    The depositary will terminate the deposit agreement if WPP asks it to do so,
in which case it must notify the holder of the ADSs at least 30 days before
termination. The depositary may also resign by providing written notice of its
resignation to WPP. This resignation will be effective upon the earlier of
(1) 60 days or (2) WPP's appointment of a successor depositary. If the
depositary notifies WPP of its resignation and WPP fails to appoint a new
depositary within 60 days, the depositary may terminate the depositary agreement
without the approval of WPP by notifying holders of the ADSs at least 30 days
prior to the termination.

    If any ADSs remain outstanding after termination, the depositary will stop
registering the transfer of ADSs, will stop distributing dividends to ADS
holders, and will not give any further notices or do anything else under the
deposit agreement other than:

    (1) collect dividends and distributions on the deposited securities;

    (2) sell rights and other property offered to holders of deposited
       securities; and

    (3) deliver ordinary shares and other deposited securities upon cancellation
       of ADSs.

    At any time after six months after termination of the deposit agreement, the
depositary may sell any remaining deposited securities. After that, the
depositary will hold the money it received on the sale, as well as any cash it
is holding under the agreement, for the pro rata benefit of the ADS holders that
have not surrendered their ADSs. It will not invest the money and has no
liability for interest. The depositary's only obligations will be to account for
the money and cash. After termination, WPP's only obligations will be with
respect to indemnification of, and to pay specified amounts to, the depositary.

ADS HOLDER'S RIGHT TO RECEIVE THE ORDINARY SHARES UNDERLYING THE ADSS

    You have the right to cancel your ADSs and withdraw the underlying ordinary
shares at any time except:

- due to temporary delays caused by the depositary or WPP closing its transfer
  books, the deposit of ordinary shares in connection with voting at a share
  owners meeting, or the payment of dividends;

- when the ADS holder owes money to pay fees, taxes and similar charges; or

- when it is necessary to prohibit withdrawals in order to comply with any laws
  or governmental regulations that apply to ADSs or to the withdrawal of
  ordinary shares or other deposited securities.

    This right of withdrawal may not be limited by any provision of the deposit
agreement.

LIMITATIONS ON OBLIGATIONS AND LIABILITY TO ADS HOLDERS

    The deposit agreement expressly limits the obligations of WPP and the
depositary. It also limits the liability of WPP and the depositary. WPP and the
depositary:

- are only obligated to perform those obligations as are specifically set forth
  in the deposit agreement in good faith and using its reasonable judgment;

- are not liable if either of them is prevented or delayed by law, any provision
  of the WPP memorandum and articles of association or circumstances beyond
  their control from performing their obligations under the agreement;

- are not liable if either of them exercises, or fails to exercise, discretion
  permitted under the agreement;

                                      122
<PAGE>
- have no obligation to become involved in a lawsuit or proceeding related to
  the ADSs or the deposit agreement on your behalf or on behalf of any other
  party unless they are indemnified to their satisfaction;

- may rely upon any advice of or information from any legal counsel,
  accountants, any person depositing ordinary shares, any ADS holder or any
  other person whom they believe in good faith is competent to give them that
  advice or information; and

- may rely and shall be protected in acting upon any written notice, request,
  direction or other document believed by them in good faith to be genuine and
  to have been signed or presented by the proper party or parties.

    In the deposit agreement, WPP and the depositary agree to indemnify each
other under specified circumstances.

    The depositary and its agents are not liable for any failure to carry out
any instructions to vote any of the ordinary shares, for the manner in which any
of these votes are cast or for the effect of these votes.

    The depositary may own and deal in any class of securities of WPP and its
affiliates and in ADSs.

REQUIREMENTS FOR DEPOSITARY ACTIONS

    Before the depositary will issue or register the transfer of an ADS, make a
distribution on an ADS, or permit withdrawal of ordinary shares, WPP or the
depositary may require:

- payment of taxes or other governmental charges, and transfer or registration
  fees charged by third parties for the transfer of any shares or other
  deposited securities, as well as the fees and expenses of the depositary;

- production of satisfactory proof of the identity of the person presenting
  ordinary shares for deposit or ADSs upon withdrawal, and of the genuineness of
  any signature or other information they deem necessary; and

- compliance with regulations the depositary may establish consistent with the
  deposit agreement, including presentation of transfer documents.

    The depositary may refuse to deliver, transfer, or register transfers of
ADSs generally when the transfer books of the depositary are closed or at any
time if the depositary or WPP, in good faith thinks it advisable to do so.

                                      123
<PAGE>
         COMPARISON OF RIGHTS OF Y&R STOCKHOLDERS AND WPP SHARE OWNERS

    As a result of the merger, holders of Y&R common stock will receive WPP
ADSs, each representing five WPP ordinary shares, or, at the election of the
holder, WPP ordinary shares. WPP is a company incorporated under the laws of
England and Wales. The following is a summary comparison of material differences
between the rights of a Y&R stockholder and a WPP share owner arising from the
differences between the corporate laws of Delaware and those of England and
Wales, the governing instruments of the two companies, and the securities laws
and regulations governing the two companies. This summary is not a complete
description of the laws of Delaware or of England and Wales, the other rules or
laws referred to in this summary, the Y&R certificate of incorporation, the Y&R
bylaws or the WPP memorandum and articles of association. For information on how
to obtain the governing instruments of Y&R and WPP, see "Summary--Where You Can
Find More Information." You are encouraged to obtain and read these documents.

    You should refer to "Description of WPP American Depositary Shares" for a
description of the WPP ADSs and a discussion of the ways in which the rights of
holders of WPP ADSs may differ from those of holders of WPP ordinary shares.

    Unless the context otherwise requires, references to "share owner" or "share
owners" means the person(s) whose name(s) appear on a company's register of
members and who are the legal owners of the shares concerned.
<TABLE>
<CAPTION>
<S>                                           <C>
   PROVISIONS CURRENTLY APPLICABLE TO Y&R      PROVISIONS APPLICABLE TO WPP SHARE OWNERS
                STOCKHOLDERS

                                      VOTING RIGHTS

<CAPTION>
<S>                                           <C>
-  Under Delaware law, each stockholder is    -  Under English law, a share owner who is
   entitled to one vote for each share of        present in person and entitled to vote at
   capital stock held by the stockholder         a share owners meeting is entitled to one
   unless the certificate of incorporation       vote on a show of hands regardless of the
   provides otherwise. Y&R's certificate of      number of shares he or she holds;
   incorporation does not alter the voting       provided, however, that any five ordinary
   rights of holders of Y&R common stock.        share owners, including proxies for share
                                                 owners (or a lower number if provided in
                                                 the articles of association) and any
                                                 share owner or share owners, including
                                                 proxies for share owners, representing at
                                                 least 10% of the ordinary shares of the
                                                 voting rights, or a lower percentage if
                                                 provided in the articles of association,
                                                 has the statutory right to demand a vote
                                                 by a poll, on a poll each ordinary share
                                                 owner, including proxies for share
                                                 owners, is entitled to one vote for each
                                                 ordinary share held.

                                              -  WPP's articles of association provide
                                              that resolutions put to a vote at a share
                                                 owners meeting will be decided on a show
                                                 of hands, unless a poll is demanded by

                                              (a)  the chairman of the meeting;

                                              (b)  at least five share owners present that
                                                   have the right to vote on the
                                                   resolution;
</TABLE>

                                      124
<PAGE>
<TABLE>
<CAPTION>
   PROVISIONS CURRENTLY APPLICABLE TO Y&R      PROVISIONS APPLICABLE TO WPP SHARE OWNERS
                STOCKHOLDERS
<S>                                           <C>
                                              (c)  any share owner or share owners repre-
                                                   senting at least 10% of the voting
                                                   rights of all share owners that have
                                                   the right to vote on the resolution;
                                                   and

                                              (d)  any share owner or share owners hold-
                                                   ing shares that have voting rights on
                                                   the resolution on which the aggregate
                                                   sum paid on its or their shares is
                                                   equal to at least 10% of the total sum
                                                   paid on all the shares having these
                                                   voting rights on the resolution.

                                              -  Under English law, ordinary resolutions
                                              are decided on a show of hands and must be
                                                 approved by at least a majority of the
                                                 votes cast by share owners present in
                                                 person, or by proxy if the articles of
                                                 association so permit. If a poll is
                                                 demanded, the resolution conducted on a
                                                 poll must be approved by at least a
                                                 majority of the votes cast at the meet-
                                                 ing. Both special and extraordinary
                                                 resolutions require the affirmative vote
                                                 of at least 75% of the votes cast at the
                                                 meeting to be approved.

                                              -  Under WPP's current articles of
                                              association, proxies of share owners are
                                                 entitled to attend and, on a poll, vote
                                                 at share owners meetings but not on a
                                                 show of hands. Proxies of share owners
                                                 are not, however, currently entitled to
                                                 speak at share owners meetings.

                                              WPP has agreed that it will include for con-
                                                 sideration by its share owners at the
                                                 first annual general meeting of share
                                                 owners after completion of the merger a
                                                 resolution to amend WPP's articles of
                                                 association to provide, among other
                                                 things, that all special and
                                                 extraordinary resolutions are to be taken
                                                 on a poll and to entitle proxies of share
                                                 owners to attend, speak and vote as
                                                 entitled at share owners meetings.

                                              A holder of WPP ADSs is currently not enti-
                                                 tled to attend, speak or vote at WPP
                                                 share owners meetings. Under the current
                                                 terms of the ADSs, the ADS depositary
                                                 will to the extent practical, subject to
                                                 applicable law and the memorandum and
                                                 articles of association
</TABLE>

                                      125
<PAGE>
<TABLE>
<CAPTION>
   PROVISIONS CURRENTLY APPLICABLE TO Y&R      PROVISIONS APPLICABLE TO WPP SHARE OWNERS
                STOCKHOLDERS
<S>                                           <C>
                                                 of WPP, vote the ordinary shares
                                                 underlying the ADSs in accordance with
                                                 the written instructions of the
                                                 registered holder. If, however, a holder
                                                 of WPP ADSs holds ADSs through a
                                                 brokerage account or otherwise in "street
                                                 name" in order to vote, the holder must
                                                 instruct the registered holder of the
                                                 ADSs to instruct the depositary with
                                                 regard to voting the ordinary shares
                                                 underlying the holder's ADSs. A more
                                                 complete description of the voting rights
                                                 of a holder of WPP ADSs is found at
                                                 "Description of WPP American Depositary
                                                 Shares--Voting Rights."

                                              WPP has agreed in the merger agreement that
                                                 it will include for consideration by its
                                                 share owners, at the first annual general
                                                 share owners meeting after completion of
                                                 the merger, a resolution to amend WPP's
                                                 articles of association to provide, to
                                                 the extent reasonably practicable,
                                                 holders of ADSs with substantially the
                                                 same rights to receive notice of, attend,
                                                 speak and vote at general meetings of WPP
                                                 share owners.

-  The Y&R bylaws provide that the presence   -  Under English law, two share owners
   of the holders of a majority of the        present in person constitute a quorum for
   outstanding voting power entitled to vote     purposes of a general meeting, unless the
   constitutes a quorum for the transaction      company's articles of association specify
   of business at a stockholders meeting.        otherwise. WPP's articles of association
                                                 do not specify otherwise, except that the
                                                 share owners will not need to be present
                                                 in person, and may instead be present by
                                                 proxy, to constitute a quorum.

-  Under Delaware law, a certificate of       -  Cumulative voting is not recognized under
   incorporation may provide that in             English law.
   elections of directors and other
   specified circumstances, stockholders are
   entitled to cumulate votes. The Y&R
   certificate of incorporation does not
   provide for cumulative voting for the
   election of directors.
<CAPTION>
<S>                                           <C>

                                ACTION BY WRITTEN CONSENT
<CAPTION>
<S>                                           <C>
-  Under Delaware law, unless otherwise pro-  -  Under English law, share owners of a
   vided in the certificate of                public company such as WPP are not permitted
   incorporation, stockholders may take any      to pass resolutions by written consent.
   action required or
</TABLE>

                                      126
<PAGE>
<TABLE>
<CAPTION>
   PROVISIONS CURRENTLY APPLICABLE TO Y&R      PROVISIONS APPLICABLE TO WPP SHARE OWNERS
                STOCKHOLDERS
<S>                                           <C>
   permitted to be taken at a stockholders
   meeting without a meeting if the action
   is consented to in writing by
   stockholders entitled to cast the same
   number of votes that would be required to
   take that action at a meeting at which
   stockholders were present and voting in
   person. The certificate of incor-
   poration of Y&R, however, states that
   stockholders may not take action by
   written consent.
<CAPTION>
<S>                                           <C>

              SHAREHOLDER PROPOSALS AND SHAREHOLDER NOMINATIONS OF DIRECTORS
<CAPTION>
<S>                                           <C>
-  Under the Y&R bylaws, any stockholder may  -  Under English law, share owners may
   nominate candidates for election to the       demand that a resolution be voted on at a
   board of directors or bring other             general meeting if the demand is made
   business before an annual meeting if the   (1)  by share owners holding at least 5% of
   stockholder gives timely notice in              the voting power of shares having a
     writing of the proposals or nominations       right to vote on the resolution, or
     to be brought before the annual          (2)  by at least 100 share owners holding
     meeting. To be timely, a stockholder's        shares on which there has been paid up
     notice must be received by the                an average sum per share owner of at
     Secretary of Y&R at least 90 days, but        least L100.
     no more than 120 days, before the first  The share owners must deposit the demand at
     Tuesday in June or any other date           the company's registered office at least
     designated by the board of directors.       six weeks before the general meeting to
   If, however, less than 105 days' notice       which it relates.
   or prior public disclosure of the date of     In general, resolutions to appoint
   the meeting is given or made to               directors must be put to share owners on
   stockholders, a stockholder's notice will     the basis of one resolution for each
   be timely if it is received by the 15th       nominated director. A resolution
   day following the day on which notice or      including more than one director may be
   public disclosure of the meeting was          presented to be voted upon at a general
   mailed or made.                               meeting only if the share owners have
   In addition, SEC rules allow precatory        first unanimously approved so doing.
   resolutions to be included in
   management's proxy statement for annual
   meetings of shareholders if, among other
   conditions required to be met, advance
   notice is given to the corporation.
<CAPTION>
<S>                                           <C>

                             SOURCES AND PAYMENT OF DIVIDENDS
<CAPTION>
<S>                                           <C>
-  Under Delaware law, subject to any         -  Subject to the prior rights of holders of
   restriction in the corporation's           preferred shares, an English company may pay
   certificate of incorporation, the board       dividends on its ordinary shares only out
   of directors may declare and pay              of its distributable profits, defined as
   dividends out of                              accumulated, realized profits less
   (1)  surplus of the corporation, which is     accumulated, realized losses, and not out
                                                      of share capital,
</TABLE>

                                      127
<PAGE>
<TABLE>
<CAPTION>
   PROVISIONS CURRENTLY APPLICABLE TO Y&R      PROVISIONS APPLICABLE TO WPP SHARE OWNERS
                STOCKHOLDERS
<S>                                           <C>
       defined as net assets less statutory      which includes share premiums, which are
        capital, or                                   equal to the excess of the
   (2)  if no surplus exists, out of the net          consideration for the issue of
        profits of the corporation for the            shares over the aggregate nominal
        year in which the dividend is                 amount of such shares. Amounts
        declared and/or the preceding year;           credited to the share premium
   provided, however, that if the capital of          account, however, may be used to pay
   the corporation has been diminished to an          up unissued shares which may then be
   amount less than the aggregate amount of           distributed to share owners in pro-
   capital represented by the issued and         portion to their holdings.
   outstanding stock of all classes having    -  In addition, under English law, WPP will
   preference upon the distribution of        not be permitted to make a distribution if,
   assets, the board may not declare and pay     at the time, the amount of its net assets
   dividends out of the corporation's net        is less than the aggregate of its issued
   profits until the deficiency in the           and paid-up share capital and
   capital has been repaired.                    undistributable reserves. If rec-
   Y&R's certificate of incorporation            ommended by the WPP board, WPP share
   contains no provisions restricting            owners may, by ordinary resolution,
   dividends on Y&R common stock.                declare final dividends, but no dividend
                                                 may be declared in excess of the amount
                                                 recommended by the WPP board. The WPP
                                                 board has the power under WPP's articles
                                                 of association to pay interim dividends
                                                 without the approval of share owners to
                                                 the extent the financial position of WPP
                                                 justifies a dividend. WPP has
                                                 historically paid interim and final
                                                 dividends in respect of each year.
<CAPTION>
<S>                                           <C>

                            RIGHTS OF PURCHASE AND REDEMPTION
<CAPTION>
<S>                                           <C>

-  Under Delaware law, any corporation may    -  Under English law, a company may issue
   purchase, redeem and dispose of its own       redeemable shares if authorized by its
   shares, except that it may not purchase       articles of association, subject to any
   or redeem these shares if the capital of      conditions stated therein. WPP's articles
   the corporation is impaired or would          of association permit the issuance of
   become impaired as a result of the            redeemable shares.
   redemption.                                -  A company may purchase its own shares, if
   However, at any time, a corporation may       the purchase
   purchase or redeem any of its shares       (1)  is authorized by its articles of
   which are entitled upon any distribution   association; and
     of assets to a preference over another   (2)  (a) in the case of an open-market pur-
     class of its stock if these shares will       chase, authority to make the market
     be retired upon acquisition or                purchase has been given by a special
     redemption, thereby reducing the              resolution of its share owners; or
     capital of the corporation.                     (b) in all other cases, has first
                                                   been approved by a special resolution.

                                              WPP's articles of association authorize WPP
                                                 to purchase its own shares.
</TABLE>

                                      128
<PAGE>
<TABLE>
<CAPTION>
   PROVISIONS CURRENTLY APPLICABLE TO Y&R      PROVISIONS APPLICABLE TO WPP SHARE OWNERS
                STOCKHOLDERS
<S>                                           <C>

                                              -  A company may redeem or repurchase shares
                                                 only if the shares are fully paid and, in
                                                 the case of public companies, only out of
                                                 (1)  distributable profits; or
                                                 (2)  the proceeds of a new issue of
                                                 shares made for the purpose of the
                                                      repurchase or redemption.

                                              -  The U.K. Listing Authority requires that
                                                 where a company has issued shares which
                                                 are traded on the London Stock Exchange
                                                 and are convertible into a class of
                                                 shares to be repurchased, the holders of
                                                 the convertible shares must first pass an
                                                 extraordinary resolution approving any
                                                 repurchase at a separate class meeting.

                                              -  The U.K. Listing Authority requires that
                                                 purchases within a 12-month period of 15%
                                                 or more of a company's share capital must
                                                 be made through either a tender or
                                                 partial offer to all share owners, at a
                                                 stated maximum or fixed price.

                                              -  Purchases within a 12-month period below
                                                 the 15% threshold may be made through
                                                 (1)  the open market, provided that the
                                                      price is not more than 5% above the
                                                      average of the middle market quota-
                                                      tions taken from the daily official
                                                      list of the London Stock Exchange
                                                      for the five trading days before the
                                                      purchase date; or
                                              (2)  an off-market transaction negotiated
                                                   with one or more share owners.
<CAPTION>
<S>                                           <C>

                                 MEETINGS OF SHAREHOLDERS
<CAPTION>
<S>                                           <C>
-  Y&R's bylaws provide that all meetings of  -  Under WPP's articles of association, all
   stockholders are to be held at any place   general meetings of share owners will be
   designated by the Y&R board or, if no         held at the time and place determined by
   designation is made, at the principal         the directors.
   office of Y&R.
<CAPTION>
<S>                                           <C>

                             SPECIAL MEETINGS OF SHAREHOLDERS
<CAPTION>
<S>                                           <C>
-  Delaware law provides that special         -  Under English law, an extraordinary
   meetings of stockholders may be called by  general meeting of share owners may be
                                                 called by
</TABLE>

                                      129
<PAGE>
<TABLE>
<CAPTION>
   PROVISIONS CURRENTLY APPLICABLE TO Y&R      PROVISIONS APPLICABLE TO WPP SHARE OWNERS
                STOCKHOLDERS
<S>                                           <C>

   (1)  the board of directors; or               (1)  the board of directors; or
   (2)  any person or persons authorized by      (2)  share owners holding at least
        the corporation's certificate of              one-tenth of the paid-up capital of
        incorporation or bylaws.                      the company carrying voting rights
                                                      at the general meetings.
   Y&R's bylaws provide that special          -  The notice requirement for an ordinary
   meetings of stockholders may be called     resolution, an extraordinary resolution and
   only on the order of                          a special resolution are as follows:
   (1)  the chairman of the board of             (1)  Ordinary resolution--14 clear days'
        directors; or                                 notice;
   (2)  the board of directors.               (2)  Extraordinary resolution--14 clear
-  Y&R's bylaws provide that stockholders     days' notice; and
   entitled to receive notice of a special    (3)  Special resolution--21 clear days'
   meeting must receive notice of the              notice.
     meeting at least 10 days and not more    In addition, general meetings may be called
     than 60 days prior to the meeting. This     upon shorter notice if
   notice must identify the business to be       (1)  in the case of an annual general
   transacted and, if directors are to be        meeting, all the share owners who are
        elected, the nominees proposed for            permitted to attend and vote agree
        election to the board of directors.           to the shorter notice; or
-  Y&R's certificate of incorporation         (2)  in the case of an extraordinary general
   provides that the business permitted to         meeting, a majority of the share owners
   be conducted at any special meeting is          holding at least 95% by nominal value
     limited to the purpose or purposes            of the shares which can be voted at
     specified by the order calling the            this meeting so agree.
     special meeting.

                                              "Clear days' notice" means calendar days and
                                                 excludes

                                              (1)  the date of mailing;

                                              (2)  the date of receipt or deemed receipt
                                              of the notice; and

                                              (3)  the date of the meeting itself.

                                              WPP's articles of association provide that
                                                 documents sent by first class mail are
                                                 deemed received the day after mailing
                                                 and, if sent by second class mail, on the
                                                 second day after mailing.

                                              "Extraordinary resolutions" are relatively
                                                 unusual and are confined to matters out
                                                 of the ordinary course of business, such
                                                 as a proposal to wind up the affairs of
                                                 the company.
</TABLE>

                                      130
<PAGE>
<TABLE>
<CAPTION>
   PROVISIONS CURRENTLY APPLICABLE TO Y&R      PROVISIONS APPLICABLE TO WPP SHARE OWNERS
                STOCKHOLDERS
<S>                                           <C>
                                              "Special resolutions" generally involve pro-
                                                 posals to

                                              (1)  change the name of the company;

                                              (2)  alter its capital structure;

                                              (3)  change or amend the rights of share
                                                   owners;

                                              (4)  permit the company to issue new shares
                                                   for cash without applying the share
                                                   owners preemptive rights;

                                              (5)  amend the company's objects clause in
                                                   its memorandum of association;

                                              (6)  amend the company's articles of associ-
                                                   ation; or

                                              (7)  carry out other matters for which the
                                                   company's articles of association or
                                                   the U.K. Companies Act prescribe that a
                                                   "special resolution" is required.

                                              All other proposals relating to the ordinary
                                                 course of a company's business, such as
                                                 the election of directors and
                                                 transactions, such as mergers,
                                                 acquisitions and dispositions, are the
                                                 subject of an "ordinary resolution."
<CAPTION>
<S>                                           <C>

                                     APPRAISAL RIGHTS
<CAPTION>
<S>                                           <C>
-  Under Delaware law, stockholders of a      -  While English law does not generally
   corporation involved in a merger have the  provide for appraisal rights, a shareholder
   right to demand and receive payment of        may apply to a court and the court may
   the fair value of their stock in lieu of      specify terms for the acquisition that it
   receiving the merger consideration.           considers appropriate as described under
   However, appraisal rights are not             "--Shareholders Votes on Certain
   available to holders of shares                Transactions" below.

   (1)  listed on a national securities
        exchange;

   (2)  designated as a national market
        system security on an interdealer
        quotation system operated by the
        National Association of Securities
        Dealers, Inc.; or

   (3)  held of record by more than 2,000
        stockholders;

   unless holders of stock are required to
   accept in the merger anything other than
   any combination of
</TABLE>

                                      131
<PAGE>
<TABLE>
<CAPTION>
   PROVISIONS CURRENTLY APPLICABLE TO Y&R      PROVISIONS APPLICABLE TO WPP SHARE OWNERS
                STOCKHOLDERS
<S>                                           <C>
   (1)  shares of stock or depositary
        receipts of the surviving
        corporation in the merger;

   (2)  shares of stock or depositary
        receipts of another corporation
        that, at the effective date of the
        merger, will be either

        (a)  listed on a national securities
             exchange;

        (b)  designated as a national market
             system security on an
             interdealer quotation system
             operated by the National
             Association of Securities
             Dealers, Inc.; or

        (c)  held of record by more than
             2,000 holders; or

   (3)  cash in lieu of fractional shares of
        the stock or depositary receipts
        received.

   In addition, appraisal rights are not
   available to the holders of shares of the
   surviving corporation in the merger, if
   the merger does not require the approval
   of the stockholders of that corporation.
<CAPTION>
<S>                                           <C>

                                    PREEMPTIVE RIGHTS
<CAPTION>
<S>                                           <C>
-  Under Delaware law, a stockholder is not   -  Under English law, the issuance for cash
entitled to preemptive rights to subscribe    of
for additional issuances of stock or any         (1)  equity securities, being those
        security convertible into stock       which, with respect to dividends or capital,
        unless they are specifically granted          carry a right to participate beyond
        in the certificate of incorporation.          a specified amount; or
   Y&R's certificate of incorporation does    (2)  rights to subscribe for or convert into
     not provide for preemptive rights.            equity securities
                                              must be offered first to the existing equity
                                                 share owners in proportion to the
                                                 respective nominal values of their
                                                 holdings, unless a special resolution to
                                                 the contrary has been passed by share
                                                 owners in a general meeting.

                                              At its annual general meeting each year, WPP
                                                 has passed, as is the custom of many
                                                 English companies whose shares are listed
                                                 on the London Stock Exchange, a
                                                 resolution to authorize the directors of
                                                 WPP to allot up to a specified amount of
                                                 share capital, generally
</TABLE>

                                      132
<PAGE>
<TABLE>
<CAPTION>
   PROVISIONS CURRENTLY APPLICABLE TO Y&R      PROVISIONS APPLICABLE TO WPP SHARE OWNERS
                STOCKHOLDERS
<S>                                           <C>
                                                 5% of issued share capital, without these
                                                 preemption rights. WPP expects that it
                                                 will continue this practice after the
                                                 merger.
<CAPTION>
<S>                                           <C>

                            AMENDMENT OF GOVERNING INSTRUMENTS
<CAPTION>
<S>                                           <C>

-  Under Delaware law, unless the             -  Under English law, share owners have the
   certificate of incorporation requires a       power to amend
   greater vote, an amendment to the          (1)  the objects, or purpose, clause in a
   certificate of incorporation requires           company's memorandum of association;
   (1)  recommendation of the board of             and
        directors;                            (2)  any provisions of the company's
   (2)  the affirmative vote of a majority    articles of association
        of the outstanding stock entitled to  by special resolution, subject to, in the
        vote; and                             case of amendments to the objects clause of
   (3)  the affirmative vote of a majority       the memorandum of association, the right
        of the outstanding stock of each              of dissenting share owners to apply
        class adversely affected by the               to the courts to cancel the
        amendment.                                    amendments.
-  Under Delaware law, stockholders have the  -  Under English law, the board of directors
   power to adopt, amend or repeal bylaws by  is not authorized to change the memorandum
   the affirmative vote of a majority of the     of association or the articles of
   outstanding stock entitled to vote unless     association. See "--Stock Class Rights."
   the certificate of incorporation or the    Amendments affecting the rights of the hold-
   bylaws specify another percentage.            ers of any class of shares may, depending
-  Under Y&R's certificate of incorporation,     on the rights attached to the class and
   approval of the holders of shares             the nature of the amendments, also
   representing at least 80% of the voting       require approval by extraordinary
   power of the capital stock of Y&R             resolution of the classes affected in
   entitled to vote is required to amend or      separate class meetings. See "--Stock
   repeal any of the articles of the Y&R         Class Rights."
   certificate of incorporation relating to:
   (1)  the number of directors;
   (2)  the classification of the Y&R board;
   (3)  filling vacancies on the board;
   (4)  the removal of directors;
   (5)  limitations on the liability of
        directors;

   (6)  the prohibition on stockholder
        action by written consent;

   (7)  the amendment to the Y&R bylaw pro-
        visions described below;

   (8)  the amendment of Y&R's certificate
        of incorporation itself;

   (9)  the issuance of stock and rights;
</TABLE>

                                      133
<PAGE>
<TABLE>
<CAPTION>
   PROVISIONS CURRENTLY APPLICABLE TO Y&R      PROVISIONS APPLICABLE TO WPP SHARE OWNERS
                STOCKHOLDERS
<S>                                           <C>
   (10) the right of the Y&R board to
        consider clients, creditors,
        employees and other constituencies
        in determining whether to take any
        corporate action;

   (11) the procedures for the submission of
        proposals and nominations by the
        stockholders; or

   (12) interested party transactions.

-  Under Y&R's certificate of incorporation
   and bylaws, approval of the holders of
   shares representing at least 80% of the
   combined voting power of the capital
   stock of Y&R entitled to vote is required
   to amend or repeal any of the bylaws
   relating to

   (1)  the requirements for holding and
        notice of annual and special
        meetings of the stockholders;

   (2)  the number of directors; and

   (3)  amendment of Y&R's bylaws
        themselves.

-  Under Delaware law, if provided by the
   certificate of incorporation, the board
   of directors has the power to adopt,
   amend or repeal the bylaws of a company.
   The Y&R certificate of incorporation
   authorizes the Y&R board to adopt, amend
   or repeal the Y&R bylaws by a vote of a
   majority of the directors.
<CAPTION>
<S>                                           <C>

                                     PREFERENCE STOCK
<CAPTION>
<S>                                           <C>
-  The Y&R certificate of incorporation       -  Subject to the rights of any existing
   authorizes the Y&R board of directors      shareholders, WPP's articles of association
   (1)  to provide for the issuance of one       permit WPP to issue new shares with any
        or more series of preference stock;      rights granted to holders of such shares,
   (2)  to issue up to 10,000,000 shares of           including rights of priority over
        preferred stock;                              the WPP ordinary shares. WPP
   (3)  to fix the designations and number            currently has only issued ordinary
        of the shares constituting each               shares.
        series of preferred stock; and
   (4)  to fix for each series, its relative
rights.
</TABLE>

                                      134
<PAGE>
<TABLE>
<CAPTION>
   PROVISIONS CURRENTLY APPLICABLE TO Y&R      PROVISIONS APPLICABLE TO WPP SHARE OWNERS
                STOCKHOLDERS
<S>                                           <C>
   Y&R currently has outstanding one series
   of preference stock, designated as money
   market preferred stock, of which there
   are 87 shares issued and outstanding.
   The Y&R board of directors has authorized
   the issuance of cumulative participating
   junior preferred stock. This stock is
   issuable to holders of rights issued
   under Y&R's stockholders' rights plan
   upon the occurrence of triggering events
   related to an acquisition of a large
   block of Y&R's stock by a third party.
   See "--Takeover Related Provisions"
   below. To date, Y&R has not issued any
   shares of cumulative participating junior
   preferred stock.
<CAPTION>
<S>                                           <C>

                                    STOCK CLASS RIGHTS
<CAPTION>
<S>                                           <C>
-  Under Delaware law, any change to the      -  WPP's articles of association provide
rights of holders of Y&R's common stock or    that
     preference stock would require an        (1)  the rights of any class of shares may
     amendment to the Y&R certificate of           only be changed with the consent in
     incorporation. Holders of shares of a         writing of holders of three-fourths of
     class or series are entitled to vote as       the total nominal value of shares of
     a class upon a proposed amendment to          that class or by an extraordinary
     the certificate of incorporation if the       resolution passed at a separate class
     amendment will                                meeting of the holders of the relevant
   (1)  increase or decrease the authorized        class of shares;
        shares of the class or series;        (2)  the quorum required for the separate
   (2)  increase or decrease the par value            class meetings is at least two
        of the shares of the class or                 people who hold, or act as proxies
        series; or                                    for, at least one third of the total
   (3)  alter or change the powers,                   nominal value of the existing shares
        preferences or special rights of the          of the class, except that at any
        shares of the class or series so as           adjournment of a class meeting one
        to affect them adversely.                     share owner constitutes a quorum,
                                                      regardless of the number of shares
                                                      that person holds;

                                              (3)  every holder of shares of a class
                                              having a separate class meeting is entitled,
                                                   on a poll, to one vote in respect of
                                                   each share held; and

                                              (4)  a poll may be demanded at a separate
                                                   class meeting by any person present in
                                                   person or by proxy and entitled to
                                                   vote.
</TABLE>

                                      135
<PAGE>
<TABLE>
<CAPTION>
   PROVISIONS CURRENTLY APPLICABLE TO Y&R      PROVISIONS APPLICABLE TO WPP SHARE OWNERS
                STOCKHOLDERS
<S>                                           <C>
<CAPTION>

                       SHAREHOLDERS' VOTES ON CERTAIN TRANSACTIONS
<S>                                           <C>
-  Generally, under Delaware law, unless the  -  The U.K. Companies Act provides for
   certificate of incorporation provides for     schemes of arrangement, which are
   the vote of a larger portion of the           arrangements or compromises between a
   stock, completion of a merger or              company and any class of share owners or
   consolidation or substantially all of a       creditors and used in certain types of
   corporation's assets or dissolution           reconstructions, amalgamations, capital
   requires                                      reorganizations or takeovers. These
   (1)  the approval of the board of             arrangements require the approval of
        directors; and                           (1)  at a special meeting convened by
   (2)  approvals by the vote of the holders          order of the court of a majority of
        of a majority of the outstanding              share owners or creditors
        stock or, if the certificate of               representing 75% in value of the
        incorporation provides for more or            capital held by or debt owed to the
        less than one vote per share, a               class of share owners or creditors
        majority of the votes of the                  or class thereof present in person
        outstanding stock of a corporation            or by proxy; and
        entitled to vote on the matter.       (2)  the court.

   Y&R's certificate of incorporation does    Once approved, sanctioned and becoming
   not provide for the vote of a larger          effective, all share owners and creditors
   portion of the stock for a merger or          of the relevant class are bound by the
   consolidation.                                terms of the scheme, and a dissenting
-  Under the rules of the NYSE, acquisitions     share owner would have no rights
   involving                                     comparable to appraisal rights provided
   (1)  any director, officer or substantial     under Delaware law.
        security holders and the issuance of  -  Under the rules of the U.K. Listing
   additional shares of common stock of a     Authority, share owner approval
   listed company totaling one percent or        (1)  is usually required for an
        more of the outstanding shares of        acquisition or disposal by a listed
        that company's common stock or one            company if, generally, the size of
        percent or more of the voting power           the company or business to be
        of the company; or                            acquired or disposed of represents
   (2)  the issuance of additional shares of          25% or more of the size of the
        common stock of a listed company              listed company; and
     totaling 20% or more of the outstand-    (2)  may also be required for an acquisition
     ing shares of common stock or 20% or          or disposal of assets between a listed
     more of the voting power of the company       company and parties, including
   require the approval of the holders of a   (a)  directors of the company or its
   majority of the shares voting on the            subsidiaries;
   acquisition. Other transactions do not     (b)  holders of 10% or more of the nominal
     require stockholder approval under the        value of any class of the company's or
     NYSE rules.                                   any holding company's or its
                                                   subsidiary's shares having the right to
                                                   vote; or
                                              (c)  any of their affiliates.
</TABLE>

                                      136
<PAGE>
<TABLE>
<CAPTION>
   PROVISIONS CURRENTLY APPLICABLE TO Y&R      PROVISIONS APPLICABLE TO WPP SHARE OWNERS
                STOCKHOLDERS
<S>                                           <C>
                                              -  The U.K. Companies Act also provides

                                              (1)  that where a takeover offer is made for
                                                   the shares of a U.K. company; and
                                              (2)  within four months of the date of the
                                                   offer, the offeror has acquired or con-
                                                   tracted to acquire at least 90% in
                                                   value of the shares of any class to
                                                   which the offer relates, the offeror
                                                   may, within two months of reaching the
                                                   90% level, require share owners who do
                                                   not accept the offer to transfer their
                                                   shares on the terms of the offer. A
                                                   dissenting share owner may object to
                                                   the transfer or its proposed terms by
                                                   applying to the court within six weeks
                                                   of the date on which notice of the
                                                   transfer was given. In the absence of
                                                   fraud or oppression, the court is
                                                   unlikely to order that the acqui-
                                                   sition shall not take effect, but it
                                                   may specify terms of the transfer that
                                                   it finds appropriate. A minority share
                                                   owner is also entitled in these
                                                   circumstances, in the alternative, to
                                                   require the offeror to acquire his
                                                   shares on the terms of the offer.

                                              -  The rules of the Nasdaq National Market,
                                              on which the WPP ADSs are listed, are
                                                 similar to those of the NYSE with respect
                                                 to acquisitions, except that approval of
                                                 share owners is required in connection
                                                 with an acquisition transaction involving
                                                 an officer, director or substantial share
                                                 owner only if 5% or more of the
                                                 outstanding stock or voting power is
                                                 being issued.
<CAPTION>
<S>                                           <C>

                                   RIGHTS OF INSPECTION
<CAPTION>
<S>                                           <C>
-  Delaware law allows any stockholder        -  Except when closed under the provisions
   (1)  to inspect                            of the U.K. Companies Act, the register and
       (a)  the corporation's stock ledger;      index of names of share owners of an
       (b)  a list of its stockholders; and      English company may be inspected during
       (c)  its other books and records; and     business hours
                                                 (1)  for free, by its share owners; and
                                              (2)  for a fee by any other person.
</TABLE>

                                      137
<PAGE>
<TABLE>
<CAPTION>
   PROVISIONS CURRENTLY APPLICABLE TO Y&R      PROVISIONS APPLICABLE TO WPP SHARE OWNERS
                STOCKHOLDERS
<S>                                           <C>
   (2)  to make copies or extracts of those   In both cases, the documents may be copied
   materials during normal business hours,       for a fee.
   provided that                              -  The share owners of an English public
       (a)  the stockholder makes a written   company may also inspect, without charge,
            request under oath stating the                during business hours
            purpose of his inspection; and       (1)  minutes of meetings of the share
       (b)  the inspection is for a purpose               owners and obtain copies of the
            reasonably related to the                     minutes for a fee; and
            person's interest as a            (2)  service contracts of the company's
            stockholder.                           directors.

                                              In addition, the published annual accounts
                                              of a public company are required to be
                                                 available for share owners at a general
                                                 meeting and a share owner is entitled to
                                                 a copy of these accounts.

                                              The share owners of WPP do not have rights
                                                 to inspect the accounting records of WPP
                                                 or minutes of meetings of its directors.
<CAPTION>
<S>                                           <C>

                            STANDARD OF CONDUCT FOR DIRECTORS
<CAPTION>
<S>                                           <C>
-  Delaware law does not contain any          -  Under English law, a director has a
   specific provisions setting forth the      fiduciary duty to act in a company's best
   standard of conduct of a director. The        interest. This duty includes obligations
   scope of the fiduciary duties of Y&R's        (1)  not to create an actual or potential
   board is thus determined by the courts of     conflict between his duty to the company
        the State of Delaware. In general,            and duties to any other person or
        directors have a duty to act without          his personal interests, and
        self-interest, on a well-informed     (2)  to exercise his powers only in accor-
        basis and in a manner they                 dance with the memorandum and arti-
        reasonably believe to be in the best     cles of association of the company.
        interests of the stockholders.        In addition, a director must exercise
-  Y&R's certificate of incorporation         reasonable care and skill. The precise scope
   specifically permits Y&R's board, in          of this duty is not defined, but the test
   determining whether to take any action,       generally is both subjective (i.e., was
   to take into account the interests of         the director's conduct that of a
   clients, creditors, employees and other       reasonably diligent person who has the
   constituencies, including the communities     knowledge and experience of the director)
   in which Y&R does business.                   and objective (i.e., was the director's
-  The Y&R board currently consists of 10        conduct that of a reasonably diligent
   members, three of whom are executive          person having the knowledge and
   officers of Y&R.                              experience that a director should have).

                                              In addition, directors are also required to
                                                 disclose to the company of which he is a
</TABLE>

                                      138
<PAGE>
<TABLE>
<CAPTION>
   PROVISIONS CURRENTLY APPLICABLE TO Y&R      PROVISIONS APPLICABLE TO WPP SHARE OWNERS
                STOCKHOLDERS
<S>                                           <C>
                                                 director certain information, including
                                                 personal interests in contracts or
                                                 arrangements with the company that may
                                                 not be apparent.

                                              -  WPP's board currently consists of 14 mem-
                                                 bers, 10 of whom are non-executive
                                                 officers of WPP. After completion of the
                                                 merger, the WPP board will be comprised
                                                 of 15 members, including five members of
                                                 Y&R's current board designated by Y&R.
                                                 Ten of these directors will be
                                                 non-executive directors. See "Directors
                                                 and Management of WPP Following the
                                                 Merger."
<CAPTION>
<S>                                           <C>
                         CLASSIFICATION OF THE BOARD OF DIRECTORS
<CAPTION>
<S>                                           <C>
-  Delaware law permits the certificate of    -  While English law permits a company to
   incorporation or a stockholder-adopted     provide for terms of different length for
   bylaw to provide that directors be            its directors, WPP's articles of
   divided into one, two or three classes,       association do not provide for any such
   with the term of office of one class of       differentiation. WPP's articles of
   directors to expire each year.                association provide that all directors
   Y&R's certificate of incorporation            who, at the date of the notice con-
   provides that, except with regards to         vening an annual general meeting, have
   directors elected or appointed in respect     been in office for more than 30 months
   of any class of preference stock, the Y&R     since they were last elected or
   board will be divided into three classes      re-elected by share owners, must retire
   of directors with                             from office. These retired directors will
   (1)  the number of directors divided as       be eligible for re-election at that
        evenly as possible among the three            annual general meeting.
        classes; and
   (2)  each class elected to serve for a
        term of three years.
   The provision of Y&R's certificate of
   incorporation relating to the
   classification of the Y&R board may only
   be amended or repealed with the approval
   of the Y&R board and by the affirmative
   vote of the holders of shares
   representing at least 80% of the combined
   voting power of the outstanding shares of
   capital stock of Y&R entitled to vote.
<CAPTION>
<S>                                           <C>
                                   REMOVAL OF DIRECTORS
<CAPTION>
<S>                                           <C>
-  Delaware law provides that a director may  -  Under the U.K. Companies Act, share own-
   be removed with or without cause by the       ers may remove a director without cause
   holders of a majority in voting power of      by ordinary resolution, irrespective of
   the shares entitled to vote at an             any provisions of the company's articles
   election of                                   of association
</TABLE>

                                      139
<PAGE>
<TABLE>
<CAPTION>
   PROVISIONS CURRENTLY APPLICABLE TO Y&R      PROVISIONS APPLICABLE TO WPP SHARE OWNERS
                STOCKHOLDERS
<S>                                           <C>
   directors, except that                        or service contract the director has with
   (1)  members of a classified board of         the company, provided that 28 clear days'
        directors may be removed only for        notice of the resolution is given to the
        cause, unless the certificate of              company.
        incorporation provides otherwise;     -  The articles of association of WPP
   and                                        provide that all directors who, at the date
   (2)  directors may not be removed in          of the notice convening an annual general
        certain situations in the case of a      meeting, have been in office for more
        corporation having cumulative                 than 30 months since they were last
        voting.                                       elected or re-elected by share
   Under Y&R's certificate of incorporation,          owners, must retire from office.
   directors of Y&R may be removed only for           These retired directors will be
   cause by the affirmative vote of holders           eligible for re-election at that
   of 80% of the shares entitled to vote for          annual general meeting.
   the election of directors.
<CAPTION>
<S>                                           <C>

                           VACANCIES ON THE BOARD OF DIRECTORS
<CAPTION>
<S>                                           <C>
-  Under Delaware law, unless otherwise pro-  -  Under English law, share owners may by
   vided in the certificate of incorporation     ordinary resolution, at a meeting at
   or the bylaws,                                which any director retires, appoint a
   (1)  vacancies on a board of directors;       person to be a director
   and                                           (1)  to fill a vacancy; or
   (2)  newly created directorships              (2)  to become an additional director,
        resulting from an increase in the        subject to any maximum provided in the
        number of directors                           company's articles of association.
  may be filled by a majority of the          -  The board of directors has the power to
  directors in office. In the case of a          appoint a director to serve until the
  classified board, directors elected to         next annual general meeting of the
   fill vacancies or newly created               company, whereupon the director concerned
   directorships will hold office until the      is required to retire but will be
   next election of the class for which the      eligible for election.
   directors have been chosen.
-  Y&R's certificate of incorporation
   provides that, subject to the rights of
   any holders of preference stock,
  (1)  any vacancies on Y&R's board; or
   (2)  newly created directorships will be
        filled only by the affirmative vote
        of a majority of the remaining
        directors in office, even if less
        than a quorum. Y&R's certificate of
        incorporation also provides that any
        directors chosen to fill a vacancy
        not resulting from an increase in
        the number of directors will serve
        for the remainder of the term of his
        or her predecessor.
</TABLE>

                                      140
<PAGE>
<TABLE>
<CAPTION>
<S>                                           <C>
   PROVISIONS CURRENTLY APPLICABLE TO Y&R      PROVISIONS APPLICABLE TO WPP SHARE OWNERS
                STOCKHOLDERS

                           LIABILITY OF DIRECTORS AND OFFICERS

<CAPTION>
<S>                                           <C>

-  Delaware law permits a corporation's       -  English law does not permit a company to
   certificate of incorporation to include a     exempt any director or officer of the
   provision eliminating or limiting the         company or any person employed by the
   personal liability of a director to the       company as an auditor from any liability
   corporation and its stockholders for          arising from negligence, default, breach
   damages arising from a breach of              of duty or breach of trust against the
   fiduciary duty as a director. However, no     company.
   provision can limit the liability of a
   director for
   (1)  any breach of his duty of loyalty to
        the corporation or its stockholders;
   (2)  acts or omissions not in good faith
        or which involve intentional
        misconduct or a knowing violation of
        law;
   (3)  intentional or negligent payment of
        unlawful dividends or stock
        purchases or redemptions; or
   (4)  any transaction from which he
        derives an improper personal
        benefit.
  Y&R's certificate of incorporation
  provides that a director of Y&R will not
  be personally liable to Y&R or its
  stockholders for monetary damages for
  breach of fiduciary duty as a director.
<CAPTION>
<S>                                           <C>

                        INDEMNIFICATION OF DIRECTORS AND OFFICERS
<CAPTION>
<S>                                           <C>
-  Delaware law provides that a corporation   -  English law does not permit a company to
   may indemnify any officer or director who     indemnify
   is made a party to any third party suit       (1)  a director or officer of the
   or proceeding on account of being a           company, or
   director, officer or employee of the          (2)  any person employed by the company
   corporation against expenses, including       as an auditor
        attorney's fees, judgments, fines        against any liability arising from
        and amounts paid in settlement           negligence, default, breach of duty or
        reasonably incurred by him in            breach of trust against the company,
        connection with the action, through,     except that indemnification is allowed
        among other things, a majority vote      for liabilities incurred in proceedings
        of a quorum consisting of directors      in which
        who were not parties to the suit or      (1)  judgment is entered in favor of the
        proceeding if the officer or                  director or officer or the director
        director                                      or officer is acquitted; or
   (1)  acted in good faith and in a manner
        he reasonably believed to be in the
        best interests of the corporation;
        and
</TABLE>

                                      141
<PAGE>
<TABLE>
<CAPTION>
   PROVISIONS CURRENTLY APPLICABLE TO Y&R      PROVISIONS APPLICABLE TO WPP SHARE OWNERS
                STOCKHOLDERS
<S>                                           <C>
   (2)  in a criminal proceeding, had no      (2)  the director or officer is held liable,
        reasonable cause to believe his       but the court finds that he acted honestly
     conduct was unlawful.                         and reasonably and that relief should
-  Y&R's certificate of incorporation              be granted.
   provides that                              -  WPP's articles of association provide
   (1)  Y&R will indemnify its current and    that to the extent permitted by the U.K.
        former directors and officers to the     Companies Act, every director or other
        fullest extent permitted by law;              officer or an auditor of WPP is to
   (2)  the indemnification will include the          be indemnified against liabilities
        right to receive advance payment of           he incurs in the actual or purported
        any expenses incurred in connection           discharge of his duties or exercise
        with any proceeding; and                      of his power.
   (3)  if required by law, advance payment   -  The U.K. Companies Act enables companies
        of any expenses will be made only        to purchase and maintain insurance for
        upon delivery to Y&R of an               directors, officers and auditors against
        undertaking, by the director or               any liability arising from
        officer, to repay all amounts                 negligence, default, breach of duty
   advanced if it is ultimately determined            or breach of trust against the
   that the director or officer is not                company.
   entitled to indemnification.               -  WPP maintains directors' and officers'
-  Y&R's certificate of incorporation also       insurance.
   provides that Y&R will be required to
   indemnify a person in connection with a
   proceeding initiated by the person only
   if the proceeding was authorized by the
   board of directors.
-  Y&R maintains directors' and officers'
   insurance.

<CAPTION>
                                   SHAREHOLDERS' SUITS
<S>                                           <C>
-  Under Delaware law, a stockholder may      -  While English law only permits a share
   initiate a derivative action to enforce a     owner to initiate a lawsuit on behalf of
   right of a corporation if the corporation     the company in limited circumstances, the
   fails to enforce the right itself. An         U.K. Companies Act permits a share owner
   individual may also commence a class          whose name is on the register of share
   action suit on behalf of himself and          owners of the company to apply for a
   other similarly situated stockholders         court order
   where the requirements for maintaining a      (1)  when the company's affairs are being
        class action under Delaware law have     or have been conducted in a manner
        been met. The complaint must                  unfairly prejudicial to the
   (1)  state that the plaintiff was a                interests of all or some share
        stockholder at the time of the                owners, including the share owner
        transaction of which the plaintiff            making the claim; or
        complains or that the plaintiff's        (2)  when any act or omission of the com-
        shares thereafter devolved on the             pany is or would be so prejudicial.
        plaintiff by operation of law; and
</TABLE>

                                      142
<PAGE>
<TABLE>
<CAPTION>
   PROVISIONS CURRENTLY APPLICABLE TO Y&R      PROVISIONS APPLICABLE TO WPP SHARE OWNERS
                STOCKHOLDERS
<S>                                           <C>
   (2)  (a) allege with particularity the        A court has wide discretion in granting
        efforts made by the plaintiff to         relief, and may authorize civil
        obtain the action the plaintiff          proceedings to be brought in the name of
        desires from the directors; or           the company by a share owner on terms
       (b) state the reasons for the             that the court directs. Except in these
       plaintiff's failure to obtain the         limited circumstances, English law does
       action or for not making the effort.      not generally permit class action
-  Additionally, the plaintiff must remain a     lawsuits by share owners on behalf of the
   stockholder through the duration of the       company or on behalf of other share
   derivative suit. The action will not be       owners. In order to become a share owner
   dismissed or compromised without the          and enforce these rights under English
   approval of the Delaware Court of             law, holders of WPP ADSs will be required
   Chancery.                                     to withdraw from the depositary at least
                                                 one of their WPP ordinary shares
                                                 underlying the WPP ADSs. See "Description
                                                 of WPP American Depositary
                                                 Shares--Deposit, Withdrawal and
                                                 Cancellation" for information about how
                                                 to withdraw WPP ordinary shares.

<CAPTION>
<S>                                           <C>

                        PROVISIONS RELATING TO SHARE ACQUISITIONS
<CAPTION>
<S>                                           <C>
-  Section 203 of the Delaware General        -  In the case of a company whose shares are
   Corporation Law prohibits "business           traded on the London Stock Exchange,
   combinations," including mergers, sales       share owner approval must be obtained for
   and leases of assets, issuances of            certain acquisitions or disposals of
   securities and similar transactions by a      assets involving directors or substantial
   corporation or a subsidiary with an           share owners or their associates. In
   "interested stockholder" who benefi-          addition, takeovers of public companies,
   cially owns 15 percent or more of a           i.e., generally those whose shares are
   corporation's voting stock, within three      traded on the London Stock Exchange, are
   years after the person or entity becomes      regulated by the City Code, which is
   an interested stockholder, unless             (1)  comprised of non-statutory rules
   (1)  the transaction that will cause the      unenforceable at law; and
        person to become an interested           (2)  administered by the Takeover Panel,
        stockholder is approved by the board     a body consisting of representatives of
        of directors of the target prior to           the City of London financial and
        the transaction;                              professional institutions which
   (2)  after completion of the transaction           oversees the conduct of takeovers.
        in which the person becomes an        -  The City Code provides that when
        interested stockholder, the              (3)  any person acquires, whether by a
        interested stockholder holds a least     series of transactions over a period of
        85% of the voting stock of the                time or not, shares which, together
corporation not including (a) shares held             with shares held or acquired by
by officers and directors and (b) shares              persons acting in concert with him,
        held by specified employee benefit            represent 30% or more of the voting
        plans; or                                     rights of a public company; or
   (3)  after the person becomes an              (4)  any person, together with persons
        interested stockholder, the business     acting in concert with him, holds at
        combination is approved by the board          least 30% but not more than 50% of
        and holders of at least 66 2/3% of            the voting
        the outstanding voting stock,
        excluding shares held by the
        interested stockholder.
</TABLE>

                                      143
<PAGE>
<TABLE>
<CAPTION>
   PROVISIONS CURRENTLY APPLICABLE TO Y&R      PROVISIONS APPLICABLE TO WPP SHARE OWNERS
                STOCKHOLDERS
<S>                                           <C>
   The merger of WPP and Y&R is not gov-             rights and that person, or any person
   erned by the limitations set forth in         acting in concert with him, acquires any
   Section 203. The Y&R board has                additional shares,
   unanimously approved and adopted the          the person must generally make an offer
   merger and the merger agreement.              for all of the equity shares of the
                                                 company, whether voting or non-voting,
                                                 and any class of voting non-equity shares
                                                 of the company held by that person or any
                                                 person acting in concert with him, for
                                                 cash, or accompanied by a cash
                                                 alternative, at not less than the highest
                                                 price paid by the person or these persons
                                                 for the relevant shares during the
                                                 12 months preceding the date of the
                                                 offer.

<CAPTION>
<S>                                           <C>
                               TAKEOVER RELATED PROVISIONS
<CAPTION>
<S>                                           <C>

-  Under Delaware law, directors generally    -  Under English law, directors of a company
   have a duty to act without self-interest,     have a fiduciary duty to take only those
   on a well-informed basis and in a manner      actions which are in the interests of the
   they reasonably believe to be in the best     company. Generally, anti-takeover
   interests of the stockholders.                measures are not actions which fall
  Nevertheless, a Delaware court will            within this category.
  generally apply a policy of judicial        -  Under the City Code, a company is prohib-
   deference to board of director decisions      ited from taking any action without the
   to adopt anti-takeover measures in the        approval of its share owners at a general
   face of a potential takeover where the        meeting after
   directors are able to show that               (1)  a bona fide offer has been communi-
   (1)  they had reasonable grounds for               cated to its board of directors; or
        believing that there was a danger to     (2)  its board of directors has reason to
        corporate policy and effectiveness            believe that a bona fide offer might
        from an acquisition proposal; and             be imminent,
   (2)  the board action taken was            which action could effectively result in the
        reasonable in relation to the threat     offer being frustrated or the share
   posed.                                        owners being denied an opportunity to
-  Y&R's certificate of incorporation            decide on its merits.
   permits the Y&R board to take into         -  WPP does not maintain a share owner
   account, in determining whether to take    rights plan.
   any action, the interests of clients,
   creditors, employees and other
   constituencies, including the communi-
   ties in which Y&R does business.

-  One right issued under Y&R's
   stockholders' rights plan is attached to
   each share of Y&R common stock presently
   outstanding. The rights are not
   exercisable unless a person becomes the
   beneficial owner of 15% or more of the
   outstanding shares of Y&R common stock,
   other than as a result of an offer
   approved by Y&R's board of directors. If
   a
</TABLE>

                                      144
<PAGE>
<TABLE>
<CAPTION>
   PROVISIONS CURRENTLY APPLICABLE TO Y&R      PROVISIONS APPLICABLE TO WPP SHARE OWNERS
                STOCKHOLDERS
<S>                                           <C>
   person becomes the beneficial owner of
   15% or more of the outstanding shares of
   Y&R common stock, other than as a result
   of an offer approved by Y&R's board,
   holders of rights, other than the 15%
   beneficial owner and certain transferees
   and related persons, would become
   entitled to purchase, at a purchase price
   of $87.50 per right, shares of Y&R common
   stock with a market value of twice that
   purchase price.

                                 DISCLOSURE OF INTERESTS

<CAPTION>
<S>                                           <C>
-  Acquirors of Y&R common stock are subject  -  The U.K. Companies Act provides that any-
   to disclosure requirements under Sec-         one who acquires a material interest or
   tion 13(d)(1) of the Exchange Act and         becomes aware that he has acquired a
   Rule 13d-1 thereunder, which provide that     material interest in 3% or more of any
   any person who becomes the beneficial         class of shares of a public company's
   owner of more than 5% of the outstanding      issued share capital carrying rights to
   Y&R common stock must, within 10 days         vote at general share owner meetings must
   after such acquisition                        notify that company in writing of his
   (1)  file a Schedule 13D with the SEC         interest within two days. Thereafter, any
        disclosing specified information;        increase or decrease of a whole
        and                                           percentage or decrease which reduces
   (2)  send a copy of the Schedule 13D to            the interest to below 3% must be
        Y&R and to each securities exchange           notified in writing to the company.
        on which Y&R common stock is traded.          This requirement will apply to
-  Y&R is required by the rules of the SEC            holders of WPP ordinary shares.
   to disclose in the proxy statement            In addition, the U.K. Companies Act pro-
   relating to its annual meeting of             vides that a public company may, by
   stockholders the identity and number of       notice in writing, require a person whom
   shares of Y&R common stock beneficially       the company knows or reasonably believes
   owned by:                                     to be or to have been within the three
   (1)  each of its directors;                   preceding years, interested in the
   (2)  its chief executive officer;             company's issued voting share capital to
   (3)  each of its four most highly compen-     (1)  confirm whether this is or is not
        sated executive officers other than      the case; and
        its chief executive officer;             (2)  if this is the case, to give further
   (4)  all of its directors and executive       information that the company requires
        officers as a group; and                      relating to his interest and any
   (5)  any beneficial owner of 5% or more            other interest in the company's
        of the Y&R common stock of whom it            shares of which he or she is aware.
        is aware.                                The disclosure must be made within a rea-
                                                 sonable period as specified in the
                                                 relevant notice which may be as short as
                                                 one or two days.
                                                 ADSs will generally constitute holding an
                                                 interest in the underlying WPP ordinary
</TABLE>

                                      145
<PAGE>

<TABLE>
<CAPTION>
   PROVISIONS CURRENTLY APPLICABLE TO Y&R      PROVISIONS APPLICABLE TO WPP SHARE OWNERS
                STOCKHOLDERS
<S>                                           <C>

                                                 shares.
                                                 When the notice is served by a company on
                                                 a person who is or was interested in
                                                 shares of the company and that person
                                                 fails to give the company any information
                                                 required by the notice within the time
                                                 specified in the notice, the company may
                                                 apply to the court for an order directing
                                                 that the shares in question be subject to
                                                 restrictions prohibiting, among other
                                                 things,
                                                 (1)  any transfer of the shares;
                                                 (2)  the exercise of voting rights;
                                                 (3)  the issue of further shares; and
                                                 (4)  other than in a liquidation,
                                                 dividends and other payments.
                                                 These restrictions may also avoid any
                                                 agreement to transfer the shares. In
                                                 respect of an interest in shares that is
                                                 less than .25% of the relevant class of
                                                 shares in a company whose shares are
                                                 traded on the London Stock Exchange, the
                                                 restrictions extend only to prohibition
                                                 on attending and voting at share owners
                                                 meetings.
                                                 The articles of association of WPP
                                                 provide that the WPP board may impose the
                                                 restrictions on share owners set forth in
                                                 the above paragraph, which restrictions
                                                 are normally imposed by the courts in the
                                                 event a notice is served.
                                                 In addition, holders of WPP ADSs are
                                                 required to comply with specified U.S.
                                                 securities law requirements, including
                                                 filing Schedules 13D with respect to
                                                 their beneficial ownership of the
                                                 underlying WPP ordinary shares if they
                                                 beneficially hold more than 5% of the WPP
                                                 ordinary shares outstanding.
                                              -  WPP is required by the listing rules of
                                              the U.K. Listing Authority to disclose in
                                                 its annual report the identity and share
                                                 interests of its directors and any
                                                 persons connected with them, as defined
                                                 in the U.K. Companies Act, and of any
                                                 person with an interest of
</TABLE>

                                      146
<PAGE>
<TABLE>
<CAPTION>
   PROVISIONS CURRENTLY APPLICABLE TO Y&R      PROVISIONS APPLICABLE TO WPP SHARE OWNERS
                STOCKHOLDERS
<S>                                           <C>
                                                 3% or more of its ordinary shares,
                                                 including ordinary shares underlying
                                                 ADSs.

<CAPTION>
<S>                                           <C>
   LIMITATION ON ENFORCEABILITY OF CIVIL LIABILITIES UNDER U.S. FEDERAL SECURITIES LAWS
<CAPTION>
<S>                                           <C>
              ABILITY TO BRING SUITS, ENFORCE JUDGMENTS AND ENFORCE U.S. LAW
<CAPTION>
<S>                                           <C>

-  Y&R is a U.S. company incorporated under   -  WPP is an English company located in the
   the laws of Delaware and has substantial      U.K. Many of the directors and officers
   assets located in the U.S. As a result,       of WPP will be residents of the U.K. and
   investors generally can initiate lawsuits     not the U.S. In addition, although WPP
   in the U.S. against Y&R and its directors     will have substantial assets in the U.S.,
   and officers and can enforce lawsuits         the majority of WPP's assets and a large
   based on U.S. federal securities laws in      portion of the assets of WPP's directors
   U.S. courts.                                  and officers will be located outside of
                                                 the U.S.
                                                As a result, U.S. investors may find it
                                                 difficult in a lawsuit based on the civil
                                                liability provisions of the U.S. federal
                                                securities laws
                                                 (1)  to effect service within the U.S.
                                                 upon WPP and the directors and officers
                                                      of WPP located outside the U.S.;
                                                 (2)  to enforce in U.S. courts or outside
                                                 the U.S., judgments obtained against
                                                      those persons in U.S. courts;
                                                 (3)  to enforce in U.S. courts judgments
                                                      obtained against those persons in
                                                      courts in jurisdictions outside the
                                                      U.S.; and
                                                 (4)  to enforce against those persons in
                                                 the U.K., whether in original actions or
                                                      in actions for the enforcement of
                                                      judgments of U.S. courts, civil
                                                      liabilities based solely upon the
                                                      U.S. federal securities laws.
<CAPTION>
<S>                                           <C>
                                   SHORT SWING PROFITS
<CAPTION>
<S>                                           <C>
-  Directors and officers of Y&R are          -  Directors and officers of WPP are not
   governed by rules under the Exchange Act   subject to the Exchange Act's "short swing"
   that may require directors and officers       profit rules because WPP is a foreign
   to forfeit to Y&R any "short swing"           private issuer under the Exchange Act
   profits realized from purchases and           which is not subject to these rules.
   sales, as determined under the Exchange       However, directors of WPP are subject to
   Act and the rules thereunder, of Y&R          applicable U.K. legislation prohibiting
   equity securities.                            insider dealing.
</TABLE>

                                      147
<PAGE>
<TABLE>
<CAPTION>
   PROVISIONS CURRENTLY APPLICABLE TO Y&R      PROVISIONS APPLICABLE TO WPP SHARE OWNERS
                STOCKHOLDERS
<S>                                           <C>
                                                 In addition, the directors have to comply
                                                 with the Model Code of the U.K. Listing
                                                 Authority which has been adopted by WPP,
                                                 which provides that the considerations
                                                 taken into account by directors when
                                                 deciding whether or not to deal in shares
                                                 of the company of which they are a
                                                 director must not be of a short-term
                                                 nature.
                                                 The Model Code also places additional
                                                 restrictions on trading during periods
                                                 prior to announcement of a company's
                                                 results.

<CAPTION>
<S>                                           <C>
                               PROXY STATEMENTS AND REPORTS
<CAPTION>
<S>                                           <C>
                           NOTICES AND REPORTS TO SHAREHOLDERS
<CAPTION>
<S>                                           <C>
-  Under the Exchange Act proxy rules, Y&R    -  As a foreign private issuer, WPP will not
   must comply with notice and disclosure     be governed by the proxy rules under the
   requirements relating to the solicitation     Exchange Act.
   of proxies for stockholder meetings.          However, WPP will be governed by the Com-
                                                 panies Act and the listing rules of the
                                                 U.K. Listing Authority regulating notices
                                                 of share owner meetings, which provide
                                                 that notice of a share owner meeting must
                                                 be accompanied by
                                                 (1)  a share owner circular containing an
                                                      explanation of the purpose of the
                                                      meeting; and
                                                 (2)  the recommendations of the board
                                                 with respect to actions to be taken.
                                                 In addition, WPP sends WPP ordinary share
                                                 owners a copy of its annual report and
                                                 accounts or a summary thereof. Under the
                                                 rules of the Nasdaq National Market, WPP
                                                 is required to distribute to its ADS
                                                 holders copies of its annual report. In
                                                 connection with the merger WPP will amend
                                                 its agreement with the ADS depositary to
                                                 require it to deliver to the depositary,
                                                 for distribution, to ADS holders, all
                                                 reports WPP distributes to holders of its
                                                 ordinary shares.

                                                 In addition, under the listing rules of
                                                 the U.K. Listing Authority, WPP will,
                                                 depending on their size and importance,
                                                 be required to
</TABLE>

                                      148
<PAGE>
<TABLE>
<CAPTION>
   PROVISIONS CURRENTLY APPLICABLE TO Y&R      PROVISIONS APPLICABLE TO WPP SHARE OWNERS
                STOCKHOLDERS
<S>                                           <C>
                                                 send to share owners details relating to
                                                 certain acquisitions, dispositions,
                                                 takeovers, mergers and offers either made
                                                 by or in respect of the company.

<CAPTION>
<S>                                           <C>
                                  REPORTING REQUIREMENTS
<CAPTION>
<S>                                           <C>

-  As a U.S. public company, Y&R must file    -  As a foreign private issuer with
   with the SEC, among other reports and      securities quoted on the Nasdaq National
   notices:                                      Market and registered under Section 12 of
   (1)  an Annual Report on Form 10-K within     the Exchange Act, WPP will be required to
        90 days after the end of each fiscal     publicly file with the SEC Annual Reports
        year;                                         on Form 20-F within six months
   (2)  a Quarterly Report on Form 10-Q               after the end of each fiscal year
   within 45 days after the end of each fis-          and reports on Form 6-K.
   cal quarter; and                           -  WPP is also required to notify the U.K.
   (3)  Current Reports on Form 8-K upon the  Listing Authority of
        occurrence of important corporate        (1)  any major new developments relating
        events.                                  to its business which are not public
                                                      knowledge and may lead to a
                                                      substantial movement in its share
                                                      price;
                                                 (2)  notifications received by it from
                                                 persons holding an interest in 3% or more
                                                      of any class of the company's share
                                                      capital;
                                                 (3)  any changes in its board of
                                                 directors;
                                                 (4)  any purchase or redemption by it of
                                                 its own equity securities;
                                                 (5)  interests of directors in its shares
                                                 or debentures; and
                                                 (6)  changes in its capital structure.
</TABLE>

                                      149
<PAGE>
              DIRECTORS AND MANAGEMENT OF WPP FOLLOWING THE MERGER

DIRECTORS AND EXECUTIVE OFFICERS


    At the time the merger is completed, the board of directors of WPP will
consist of 16 directors. Four of those directors will be the current members of
Y&R's board of directors listed below under "--Y&R Designees" who have been
designated by Y&R and will stand for election at the WPP Extraordinary General
Meeting. See "The WPP Extraordinary General Meeting" beginning on page 23.
Eleven of those directors will be persons designated by WPP from WPP's board
members before we complete the merger. In addition, Mr. Masao Inagaki, a current
director of WPP and chairman and chief executive officer of Asatsu-DK, one of
WPP's largest share owners, will continue to be a member of the board of
directors of WPP after completion of the merger. Y&R and WPP have agreed that,
after the completion of the merger, the former Y&R directors on the WPP board
have the right to designate at any time before June 30, 2001 a fifth Y&R
designee, who is not a U.S. citizen or resident and is otherwise reasonably
acceptable to WPP's board of directors, for appointment as a director of WPP. We
have set forth below the name, age, current position and business experience of
the 16 persons who have been designated to serve on the WPP board of directors
as of the completion of the merger.



CONTINUING WPP DIRECTORS



    HAMISH MAXWELL, age 73, has been a member of the board directors of WPP
since July 1996 and has been non-executive chairman since October 1996. He
served as chairman and chief executive of Philip Morris Companies, Inc. from
1984 to 1991. Mr. Maxwell is also a director of Sola International Inc. and was
previously a director of Bankers Trust.



    SIR MARTIN SORRELL, age 55, has been a member of the board of directors of
WPP since 1986, becoming WPP's chief executive in the same year. Sir Martin
Sorrell is also a director of Colefax Group plc and was formerly a director of
Storehouse plc.


    BRIAN J. BROOKS, age 44, joined WPP and has been a member of the board of
directors of WPP since September 1992. Since joining WPP, Mr. Brooks has been
WPP's director of human resources and is currently WPP's chief human resource
officer. Mr. Brooks was previously a partner in Towers Perrin in New York and
London. He is an attorney admitted to practice law in the U.S.


    JEREMY J. D. BULLMORE, age 70, has been a member of the board of directors
of WPP Group since 1987 as a non-executive director. He was previously with J.
Walter Thompson, London, for 33 years, the last 11 as chairman. He was chairman
of the Advertising Association from 1981 to 1987. Mr. Bullmore is also a
director of the Guardian Media Group plc and president of National Advertising
Benevolent Society.



    ESTHER DYSON, age 48, has been a member of the board of directors of WPP as
a non-executive director since June 1999 and is chair of wpp.com. Ms. Dyson is
also chair of EDVenture Holdings and Internet Corp. She also is a member of the
boards of Aristotle, Audumbla (Sweden), Scala Business Solutions N.V.,
GreaterTalent.com, CV-Online, New World Publishing, Uproar Inc., Thinking Tools,
Inc., APP Group (Prague), LanguageWare.net, Graphisoft N.V., EDVenture Forums,
KeySystem, Cybiko, Medscape, NewspaperDirect, BrunswickDirect, TrustWorks
(Amsterdam), IBS (Moscow), Sourceree and Talus Solutions. Ms. Dyson is also on
the advisory boards of Internet Capital Group, ICG Europe, Rambler Group
(Moscow), Municel, Tacit Information Systems and Swissair Group. Ms. Dyson was
formerly a director of PRT Group.



    MASAO INAGAKI, age 77, has been a member of WPP's board of directors since
September 1998 as a non-executive director as a result of the WPP-Asatsu
strategic alliance. He is a director and chairman and chief executive of
Asatsu-DK Inc. Mr. Inagaki has been Vice-President of the Japan Advertising
Agencies Association since 1987 and is a director of Asatsu-DK Inc. He was
formerly director of BBDO Worldwide Inc.


                                      150
<PAGE>

    JOHN B. H. JACKSON, age 70, has been a member of WPP's board of directors
since September 1993 as a non-executive director. He is chairman of Hilton Group
plc and Celltech Chiroscience plc, and a director of Billiton Plc, Brown &
Jackson plc, Burdale Holdings Limited, Cambridge Animation Systems Limited,
Concept Broadcast Development Limited, Envision Licensing Limited, History Today
Limited, Neos Limited, John Jackson Consultants Limited, One World Action
Limited, Twenty Five Ennismore Gardens Limited, Wyndeham Press Group plc, Xenova
Group plc, Urban Catalyst Limited, Oxford Technology Venture Capital Trust plc
and Oxford Technology II Venture Capital Trust plc. He is also the non-solicitor
chairman of Mishcon de Reya and chairman of the Countryside Alliance. He was
formerly director of Caledonian Publishing plc, Duphar Limited, Hephaistos
Limited, Howden Group plc, Graseby plc, National Interactive Video Centre (a
charity), Peboc Limited, Pilot Investment Trust plc and Renex Limited.



    CHRISTOPHER MACKENZIE, age 45, was appointed to the board of directors of
WPP in March 2000 as a non-executive director. He is currently partner and
principal at the investment firm of Clayton, Dubilier & Rice and a director of
CD&R Limited and was previously a company officer of General Electric. He is
also a non-executive director of Fairchild-Dormier GmbH, Schulte GmbH and
Jacquesson et Fils S.A.



    STANLEY W. MORTEN, age 56, has been a member of the board of directors of
WPP since 1991 as a non-executive director. He is the chairman and president of
Morten Paper and Metal, Inc. He was until recently chief operating officer of
Punk, Ziegel & Company, a New York-based investment banking firm. Mr. Morten
previously was managing director of the equity division of Wertheim Schroder &
Co., Inc. in New York.



    JOHN A. QUELCH, age 48, has been a member of the board of directors of WPP
since 1988 as a non-executive director. He is Professor and Dean of London
Business School and was formerly the Sebastian S. Kresge Professor of Marketing
at Harvard University Graduate School of Business Administration. Mr. Quelch is
also a director of Communication Services Group and was formerly a non-executive
director of US Office Products Company, USA Floral Products Inc. and Pentland
Group plc.



    PAUL W. G. RICHARDSON, age 42, has been a member of the board of directors
of WPP since December 1996, becoming WPP's finance director the same year after
four years with WPP as director of treasury. Previously he spent six years with
Hanson plc. He is a chartered accountant and member of the Association of
Corporate Treasurers. Mr. Richardson is also a non-executive director of Chime
Communications plc, Syzygy AG, Singleton Group Limited in Australia, The Grass
Roots Group plc, International Business Research (USA) Inc. and Internet Crimes
Group, Inc. and a number of WPP Group subsidiaries.



    ERIC R. SALAMA, age 39, joined the parent company of WPP in 1994 and has
been a member of the board of directors of WPP since July 1996. Since
July 1996, Mr. Salama has been director of strategy for WPP. He is also
currently chief executive of wpp.com. Prior to joining the parent company of
WPP, Mr. Salama was joint managing director of The Henley Centre, a WPP company.
He is an advisor to the U.K. Government in the fields of creative and media
industries and a trustee of the British Museum. He is a director of The Grass
Roots plc, Syzygy AG, Deckchair.com Holdings Limited and Metapack Limited.



Y&R DESIGNEES



    MICHAEL J. DOLAN, age 53, has been a vice chairman and a director of Y&R
since July 1996. Since May 11, 2000, he has also been president and chief
operating officer of Y&R. From July 1996 until July 12, 2000, Mr. Dolan was
chief financial officer of Y&R. From 1992 to 1996, he was president and chief
executive officer of the joint venture, Snack Ventures Europe, between PepsiCo
Foods International and General Mills. He also served as senior vice president,
operations, of PepsiCo Foods International. Mr. Dolan is a director of Luminant
Worldwide Corporation, Thomas Weisel Partners


                                      151
<PAGE>

and Gamut Interactive. Mr. Dolan is expected to serve as president and chief
executive officer of Y&R and as an executive director of WPP upon completion of
the merger.



    F. WARREN HELLMAN, age 65, has been a director of Y&R since December 1996.
He is chairman of Hellman & Friedman LLC, a private investment company he
founded in 1984. Previously he was president and a director of Lehman Brothers,
as well as head of its Investment Banking Division, and chairman of Lehman
Corporation (a closed-end investment company). Mr. Hellman is a director of Levi
Strauss & Co., II Fornaio (America) Corp., Matrix Partners, FWB Associates and
Farallon Capital Management, as well as a number of private and venture-backed
companies.



    MICHAEL H. JORDAN, age 63, has been a director of Y&R since December 1999.
He has been chairman of the board of directors of Luminant Worldwide Corporation
since the closing of its initial public offering in September 1999 and an
advisor to Luminant since January 1999. In addition, since May 1999, he has been
chairman of the board of directors of eOriginal, Inc. and chief executive
officer since December 1999. Mr. Jordan retired in December 1998 as chairman and
chief executive officer of CBS Corporation, formerly Westinghouse Electric
Corporation, positions he held since June 1993. Prior to joining Westinghouse,
he was a principal with the investment firm of Clayton, Dubilier & Rice, Inc.
from September 1992 through June 1993. From 1974 to 1992, he was an executive at
PepsiCo, Inc. holding a number of positions including president and chief
financial officer. Mr. Jordan is also a director of Aetna Inc., Clariti
Telecommunications International Ltd., Dell Computer Corp., and Marketwatch.com
Inc. Mr. Jordan is a member of the President's Export Council, the chairman of
the U.S.-Japan Business Council, the chairman of The College Fund/UNCF and the
chairman of the Policy Board of the Americans for the Arts. Mr. Jordan was
formerly a director of CVS Corporation, Rhone-Poulenc Rorer, Inc., and is
currently a director of Digital Convergence.com Inc., Enikia LLC, eRewards Inc.,
Eritmo.com Inc., GrupoCima, Microcast Incorporated, Wirebreak Networks, Inc.,
Sky Auction.com Inc. and The Feld Group.



    SIR CHRISTOPHER LEWINTON, age 68, has been a director of Y&R since
May 1999. He is chairman of TI Group plc, a specialized engineering company, a
position he has held since 1989, and a director of Video Networks Limited. He
was formerly a member of the Supervisory Board of Mannesmann A.G. and a former
director of Reed Elsevier PLC and Messier Dowty International Limited.


RESPONSIBILITY AND TERMS OF MEMBERS OF THE BOARD OF DIRECTORS

    The board of directors is responsible for approving WPP policy and strategy
and is responsible to share owners for WPP's financial and operational
performance. Responsibility for the development and implementation of policy and
strategy and for day-to-day management issues has been delegated by the full
board to the executive directors.

    The board meets at least seven times a year, and more frequently when
business needs require. After completion of the merger, the board is expected to
consist of 11 non-executive directors and five executive directors.

    In accordance with the requirements of the Combined Code embodied in the
listing rules of the U.K. Listing Authority, Mr. J.A. Quelch has been appointed
as the senior independent non-executive director to be available to deal with
concerns regarding WPP where it could be inappropriate for these to be dealt
with by the chairman or chief executive.

    WPP's articles of association provide that a director appointed since the
last annual general meeting of share owners or who has held office for more than
30 months since his appointment or re-election by WPP in a general meeting of
share owners, shall retire from office but shall be eligible for re-election.

    If elected by the WPP share owners at the extraordinary general meeting, the
Y&R designees will not be required to retire from office in accordance with
WPP's articles of association until the first formal general meeting of share
owners to be held after the completion of a period of 30 months after completion
of the merger.

                                      152
<PAGE>

    Under the terms of the merger agreement, if any of the Y&R designees are
unable to serve on the WPP board because of death, illness, disability or any
similar reason before the completion of the merger, Y&R will be permitted to
select a replacement who is reasonably acceptable to WPP.



    If during the two years after completion of the merger any Y&R designee
retires or resigns from the WPP board or steps down from board because of death,
illness, disability or any similar reason, the remaining Y&R designees will be
entitled to recommend a replacement who is reasonably acceptable to WPP. If the
Y&R designee who retires, resigns or steps down from the WPP board is not a U.S.
citizen or resident, the replacement Y&R designee may not be a U.S. citizen or
resident. The WPP board will appoint the recommended candidate to the WPP board
unless doing so would be inconsistent with WPP articles of association or the
board's fiduciary duties.


MEETINGS OF THE BOARD OF DIRECTORS OF WPP; COMMITTEES OF THE BOARD

    The merger agreement provides that a majority of the meetings of the WPP
board will be held in London, England. The committees of the WPP board after the
merger will initially be the same as the current standing committees of the WPP
board, which are the audit committee, the compensation committee and the
nomination committee.

    The audit committee is responsible for overseeing the involvement of WPP's
auditors in the planning and review of the WPP's annual report and accounts and
the half year report and discussing with the auditors the findings of the audit.
The independence and objectivity of the external auditors is also considered,
and the committee reviews any recommendation relating to the reappointment of
the auditors. The committee considers accounting and legal requirements as well
as the regulations contained in the listing rules of the U.K. Listing Authority
and the SEC for proper compliance by WPP. The committee also promotes the
maintenance of effective systems of internal control and is responsible for the
scope of internal audit.

    The audit committee meets at least three times a year and currently
comprises the following non-executive directors: Messrs. J.B.H. Jackson
(Chairman), J.J.D. Bullmore and S.W. Morten.

    The compensation committee reviews the remuneration policy of WPP including
base remuneration, incentive plans and terms of employment of executive
directors and senior executives of WPP, and directors and senior executives of
its operating company. The committee approves and monitors all arrangements with
WPP's chief executive.

    The committee is comprised exclusively of non-executive directors,
currently: Messrs. S.W. Morten (Chairman), H. Maxwell and J.A. Quelch. Each
non-executive director is independent of management and free from any business
or any other relationship which would materially interfere with the exercise of
their independent judgment.

    The compensation committee consults with WPP's chief executive and director
of human resources about proposals relating to the remuneration of other
executive directors and have access to professional advice inside and outside
WPP, including independent executive remuneration consultants.

    The nominations committee considers appointments to the board of directors
and makes recommendations in this respect to the WPP board. Currently, the
committee comprises the following directors: Messrs. H. Maxwell (Chairman), B.J.
Brooks, S.W. Morten, J.A. Quelch and Sir Martin Sorrell.

SHARE AND OPTION OWNERSHIP OF DIRECTORS AND FIVE PERCENT SHARE OWNERS


    The directors of WPP, including executive directors, as a group are expected
to beneficially own approximately 1.2% of WPP's ordinary shares after giving
effect to the merger. WPP is not aware of any share owner who will own more than
5% of the outstanding WPP ordinary shares after the merger.



    The following table summarizes as of August 21, 2000 the beneficial
ownership of WPP ordinary shares of the continuing WPP directors and as of
August 4, 2000 the beneficial ownership of the shares


                                      153
<PAGE>

of Y&R common stock of the Y&R designees. This stock ownership information does
not include any options to purchase WPP ordinary shares or options to purchase
shares of Y&R common stock.



<TABLE>
<CAPTION>
                                                               NUMBER OF WPP
WPP DIRECTORS                                                 ORDINARY SHARES
-------------                                                 ---------------
<S>                                                           <C>
Brian J. Brooks(1)..........................................        361,783
Jeremy J. D. Bullmore.......................................         20,065
Esther Dyson................................................             --
Masao Inagaki (2)...........................................             --
John B. H. Jackson..........................................         12,500
Christopher Mackenzie.......................................         10,000
Hamish Maxwell..............................................         35,000
Stanley W. Morten...........................................         20,000
John A. Quelch..............................................         10,000
Paul W. G. Richardson(1)....................................        331,176
Eric R. Salama(1)...........................................        429,576
Sir Martin Sorrell(1)(3)....................................     11,238,373
</TABLE>


------------------------
(1) Each of these executive directors has a technical interest as an employee
    and potential beneficiary in one of WPP's Employee Share Ownership Plans in
    WPP's shares held under the relevant ESOP.

(2) Mr. Inagaki is a director and chairman of Asatsu-DK, which at June 20, 2000
    held 31,295,646 shares, representing 4.02% of the issued share capital of
    WPP.


(3) The number of WPP ordinary shares shown for Sir Martin Sorrell includes
    exercisable but unexercised options. Sir Martin Sorrell's interests also
    include 1,571,190 and 577,391 unexercised phantom options. He also has
    beneficial interest in 4,961,392 WPP ordinary shares granted under WPP's
    Capital Investment Plan and 1,754,520 WPP ordinary shares granted under
    WPP's National Share Award Plan. These plans are described in the Annual
    Report of WPP on Form 20-F for the year ended December 31, 1999, which we
    have incorporated into this proxy statement/prospectus by reference.



<TABLE>
<CAPTION>
                                                              NUMBER OF
Y&R DESIGNEES                                                 Y&R SHARES
-------------                                                 ----------
<S>                                                           <C>
Michael J. Dolan............................................   253,483
F. Warren Hellman...........................................   285,916
Michael H. Jordan...........................................     2,835
Sir Christopher Lewinton....................................     3,209
</TABLE>


    In connection with the merger, each share of Y&R common stock will be
converted into a right to receive .835 WPP ADS or, at the election of the
holder, 4.175 WPP ordinary shares.

    As of June 20, 2000, the WPP directors held the long-term incentive plan
awards described in the following table. Except as indicated below, WPP
directors do not hold any options.

                                      154
<PAGE>
LONG-TERM INCENTIVE PLAN AWARDS(1)

    The following long-term incentive plan awards were granted to WPP directors:


<TABLE>
<CAPTION>
                                       NUMBER AT                                         PRICE PER SHARE OF VESTED
                          PLAN(1)    JUNE 19, 2000          PERFORMANCE PERIOD           UNITS ON VALUATION DATE(2)
                          --------   -------------   ---------------------------------   --------------------------
<S>                       <C>        <C>             <C>                                 <C>
Brian J. Brooks.........   PSP            18,545     Jan. 1, 1996--Dec. 31, 1998                    365.8p
                           PSP            29,990     Jan. 1, 1997--Dec. 31, 1999                    981.0p
                           PSP            46,728     Jan. 1, 1998--Dec. 31, 2000                       n/a
                           PSP            48,359     Jan. 1, 1999--Dec. 31, 2001                       n/a
                           PSP            26,961     Jan. 1, 2000--Dec. 31, 2002                       n/a
                           LEAP          272,600     Jan. 1, 1999--Dec. 31, 2003                       n/a
Paul W. G. Richardson...   PSP            10,577     Jan. 1, 1996--Dec. 31, 1998                    365.8p
                           PSP            33,470     Jan. 1, 1997--Dec. 31, 1999                    981.0p
                           PSP            55,513     Jan. 1, 1998--Dec. 31, 2000                       n/a
                           PSP            65,944     Jan. 1, 1999--Dec. 31, 2001                       n/a
                           PSP            36,765     Jan. 1, 2000--Dec. 31, 2002                       n/a
                           LEAP          299,030     Jan. 1, 1999--Dec. 31, 2003                       n/a
Eric R. Salama..........   PSP            12,400     Jan. 1, 1996--Dec. 31, 1998                    365.8p
                           PSP            27,892     Jan. 1, 1997--Dec. 31, 1999                    981.0p
                           PSP            46,261     Jan. 1, 1998--Dec. 31, 2000                       n/a
                           PSP            48,359     Jan. 1, 1999--Dec. 31, 2001                       n/a
                           PSP            26,961     Jan. 1, 2000--Dec. 31, 2002                       n/a
                           LEAP          272,645     Jan. 1, 1999--Dec. 31, 2003                       n/a
Sir Martin
  Sorrell(3)(4).........    --         8,594,493                    n/a                                n/a
                           PSP           219,812     Jan. 1, 1999--Dec. 31, 2001                       n/a
                           PSP           137,255     Jan. 1, 2000--Dec. 31, 2002                       n/a
                           LEAP        5,369,070     Jan. 1, 1999--Dec. 31, 2003                       n/a
</TABLE>



------------------------------
(1) The long-term incentive plans operated by WPP consist of WPP's Performance
    Share Plan (PSP) and Leadership Equity Acquisition Plan (LEAP). The number
    of shares shown for LEAP represents the maximum number of shares ("Matching
    Shares") that is capable of vesting at the end of the performance period, if
    the performance requirement is satisfied to the fullest extent and subject
    to the retention of WPP shares as required by the applicable plan until the
    end of the investment period, which expires in September 2004. The number of
    Sir Martin Sorrell's Matching Shares includes those attributable to JMS
    Financial Services Limited, a company owned by Sir Martin Sorrell (JMS). The
    8,594,493 shares referred to in note (3) are not awarded under either the
    PSP or LEAP. PSP and LEAP are described in WPP's Annual Report on Form 20-F
    for the year ended December 31, 1999, which we have incorporated by
    reference into this proxy statement/prospectus.


(2) Valuation date is December 31 at the end of the relevant performance period.


(3) The 8,594,493 shares represent the number of shares, or cash equivalent of
    shares that vest, under WPP's Capital Investment Plan (CIP) and National
    Share Award Plan (NSAP). The performance conditions were satisfied under the
    CIP and NSAP before these plans were due to mature in September 1999. Each
    plan has been extended until September 2004, subject to good leaver and
    change of control provisions, when the awards vest. Consequently their value
    cannot be established until that time.


   Under arrangements made with Sir Martin Sorrell relating to the payment on
   his behalf of U.S. withholding tax under WPP's Capital Investment Plan and
   pension payments made under an agreement with Sir Martin Sorrell, a
   subsidiary of WPP has made payments of which the maximum amount outstanding
   during the year was $552,543 and which remained outstanding at December 31,
   1999.


(4) Through JMS, Sir Martin Sorrell holds 1,571,190 unexercised phantom options
    granted at a base price of 52.5p and exercisable until April 2003, and
    577,391 granted at a base price of 115p per share and exercisable in
    March 2004. JMS has indicated that it does not intend to exercise the
    1,571,190 phantom options until March 2003, subject to change of control
    provisions and provisions permitting Sir Martin Sorrell to terminate his
    employment with WPP.


                                      155
<PAGE>

    As of August 4, 2000, the Y&R designees owned the following outstanding
options to purchase shares of Y&R common stock:



<TABLE>
<CAPTION>
                                     Y&R SHARES                       EXERCISE PRICE     EXERCISABLE/
                                    UNDER OPTION    EXPIRATION DATE     PER SHARE      UNEXERCISABLE(2)
                                    ------------   -----------------  --------------   ----------------
<S>                                 <C>            <C>                <C>              <C>
OPTIONS HELD BY Y&R DESIGNEES
Michael J. Dolan(1)...............     260,865     December 12, 2006     $ 7.67         182,610/78,255
                                       150,000     December 31, 2007     $12.33              0/150,000
                                       200,000          May 25, 2009     $37.25         66,666/133,334
                                       200,000        April 25, 2010     $42.625             0/200,000
F. Warren Hellman.................       2,000      January 16, 2010     $59.9375              0/2,000
Michael H. Jordan.................       2,000      January 16, 2010     $59.9375              0/2,000
Sir Christopher Lewinton..........       2,000      January 16, 2010     $59.9375              0/2,000
</TABLE>


------------------------
(1) In addition to the options listed on this table, Mr. Dolan received a grant
    of Performance Shares under Y&R's 1997 Incentive Compensation Plan. His
    target award is 10,980 shares with a value of $468,000 based on the value of
    Y&R's stock on the grant date. Mr. Dolan will be eligible to earn from 0% to
    200% of the target award in accordance with Y&R's cumulative performance
    against pre-determined objectives over three years from 2000 through 2002,
    payable after the three-year cumulative results are finalized. Mr. Dolan
    will be deemed to have met his current performance target and his
    performance shares shall be payable upon completion of the merger.

(2) All options except those granted to Mr. Dolan with an expiration date of
    April 25, 2010 will vest upon completion of the merger.


    Under the merger agreement, after completion of the merger each of
Messrs. Dolan, Hellman and Jordan will be entitled to receive upon exercise of
an option .835 of a WPP ADS for each share of Y&R common stock subject to that
option before completion of the merger. Sir Christopher Lewinton will be
entitled to receive, upon exercise of his options, 4.175 WPP ordinary shares for
each share of Y&R common stock subject to that option before completion of the
merger.


                               FEES AND EXPENSES

    Pursuant to the merger agreement, WPP and Y&R have agreed to each pay half
of certain expenses. See "The Merger Agreement--Expenses."

    WPP and its subsidiary, York Merger Corp., estimate that they will incur
fees and expenses in connection with the merger of approximately $45 million.


    Y&R estimates that it will incur fees and expenses in connection with the
merger of approximately $27 million.


    In addition, we estimate that the U.K. stamp duty taxes that will be paid by
Y&R in connection with the deposit of the WPP ordinary shares underlying the WPP
ADS to be issued in the merger will be between $50 and $100 million depending on
the extent to which Y&R stockholders elect to receive WPP ordinary shares in
lieu of the WPP ADSs they are otherwise entitled to receive.

    These fees and expenses related to the merger will be financed from
generally available funds of WPP and Y&R.


    Neither WPP nor Y&R will pay any fees or commissions to any broker or dealer
or any person, other than MacKenzie Partners, Inc. and the exchange agent, for
soliciting Y&R stockholders with respect to the merger. Upon request, Y&R will
reimburse brokers, dealers, commercial banks and trust companies for reasonable
and necessary costs and expenses incurred by them in forwarding materials to
their customers.


                             VALIDITY OF SECURITIES

    Allen & Overy will pass upon the validity under English law of the WPP
ordinary shares to be issued pursuant to the merger.

                                      156
<PAGE>
                                    EXPERTS

    The consolidated financial statements of Y&R as of December 31, 1999 and
1998, and for each of the three years in the period ended December 31, 1999
incorporated into this proxy statement/ prospectus by reference to Y&R's Annual
Report on Form 10-K for the year ended December 31, 1999, have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.

    The audited consolidated financial statements of WPP as of December 31, 1999
and 1998, and for each of the three years in the period ended December 31, 1999
incorporated by reference into this proxy statement/prospectus to the WPP's
Annual Report on Form 20-F for the year ended December 31, 1999, have been
audited by Arthur Andersen, independent auditors, as indicated in their report
with respect hereto, and are included in reliance upon the authority of said
firm as experts in giving said reports.

                     U.K. LISTING PARTICULARS AND CIRCULAR


    WPP will deliver a copy of a document comprising the U.K. listing
particulars relating to WPP in accordance with the Listing Rules to the
Registrar of Companies in England and Wales for registration and the document
will be available for inspection at the offices of Allen & Overy, One New
Change, London, EC4M 9QQ, England, until the date on which the merger is
completed. We have attached summary listing particulars as Appendix F to this
proxy statement/prospectus. Neither the listing particulars nor the documents
listed in the summary listing particulars as available for inspection, form part
of, or are incorporated into, this proxy statement/prospectus, except to the
extent specifically provided. In addition, WPP is convening an extraordinary
general meeting of its share owners, and distributing to its share owners a
circular relating to the merger, a copy of which will be available for
inspection at the offices of Allen & Overy until the merger is completed and at
the place of the extraordinary general meeting from 15 minutes prior to the
meeting until its conclusion. The contents of the circular do not form part of,
nor are they incorporated into, this proxy statement/prospectus.


     STOCKHOLDER PROPOSALS FOR THE 2001 ANNUAL MEETING OF Y&R STOCKHOLDERS

    If the merger is completed as expected, Y&R will not hold an annual meeting
of Y&R stockholders in 2001. If the merger is not approved by Y&R stockholders
or is not completed for any other reason, Y&R expects it will hold its 2001
Annual Meeting of Stockholders in May 2001. Any eligible stockholder of Y&R
wishing to have a proposal considered for inclusion in the Company's 2001 proxy
solicitation materials under Rule 14a-8 of the Securities Exchange Act of 1934,
must set forth the proposal in writing and file it with the Secretary of Young &
Rubicam, Inc., 285 Madison Avenue, New York, New York 10017, at a reasonable
time in advance of the date of mailing of Y&R's proxy statement. Y&R will
consider any proposal filed on or before December 10, 2000 to be in compliance
with this requirement. An eligible stockholder is one who is the record or
beneficial owner of at least 1% or $2,000 in market value of securities entitled
to be voted at that annual meeting and has held such securities for at least one
year and who shall continue to own those securities through the date on which
the annual meeting is held.

    In addition, under Y&R's bylaws, a stockholder who wishes to propose
business for consideration at the 2001 Annual Meeting of Stockholders or to
nominate persons for election to Y&R's board of directors must deliver to Y&R
the information specified in Y&R's bylaws not later than the "Advance Notice
Date." For this purpose, the Advance Notice Date is between 90 and 120 days in
advance of the date of the 2001 Annual Meeting of Stockholders or, if later, the
fifteenth day following the date Y&R first announces the date of its 2001 Annual
Meeting of Stockholders. Under Rule 14a-4 of the Exchange Act, the Company may
exercise discretionary voting authority under proxies it solicits for the 2001
Annual Meeting of Stockholders to vote on any proposal made by a stockholder
that the stockholder does not seek to include in Y&R's proxy statement pursuant
to Rule 14a-8, unless Y&R is notified about the proposal before the Advance
Notice Date and the proposing stockholder states an intention to, and submits
proof that it did, distribute proxies to a percentage of the stockholders
sufficient to carry the proposal.

                                      157
<PAGE>
                                                                      APPENDIX A


                              AMENDED AND RESTATED
                          AGREEMENT AND PLAN OF MERGER
                                  BY AND AMONG
                                 WPP GROUP PLC,
                             YOUNG & RUBICAM INC.,
                               YORK MERGER CORP.
                                      AND
                              YORK II MERGER CORP.
                            DATED AS OF MAY 11, 2000


                                      A-1
<PAGE>
                               TABLE OF CONTENTS


<TABLE>
<S>            <C>                                                           <C>
ARTICLE I THE MERGER.......................................................     A-8

Section 1.1.   THE MERGER..................................................     A-8
Section 1.2.   CONVERSION AND EXCHANGE OF SHARES...........................     A-9
Section 1.3.   SURRENDER AND PAYMENT.......................................    A-10
Section 1.4.   COMPANY STOCK OPTIONS.......................................    A-13
Section 1.5.   FRACTIONAL SHARES...........................................    A-14
Section 1.6.   THE SURVIVING CORPORATION...................................    A-14
Section 1.7.   LOST, STOLEN OR DESTROYED CERTIFICATES......................    A-15
Section 1.8.   APPRAISAL RIGHTS............................................    A-15
Section 1.9.   COMPANY ESCROW ACCOUNT......................................    A-15

ARTICLE II REPRESENTATIONS AND WARRANTIES..................................    A-16

Section 2.1.   REPRESENTATIONS AND WARRANTIES OF THE COMPANY...............    A-16
               2.1.1. ORGANIZATION, GOOD STANDING AND QUALIFICATION........    A-16
               2.1.2. CAPITAL STRUCTURE....................................    A-17
               2.1.3. CORPORATE AUTHORITY, APPROVAL AND FAIRNESS OPINION...    A-18
               2.1.4. GOVERNMENTAL FILINGS, NO VIOLATIONS..................    A-18
               2.1.5. REPORTS; FINANCIAL STATEMENTS........................    A-19
               2.1.6. ABSENCE OF CERTAIN CHANGES...........................    A-19
               2.1.7. LITIGATION AND LIABILITIES...........................    A-20
               2.1.8. TAKEOVER STATUTES....................................    A-20
               2.1.9. BROKERS AND FINDERS..................................    A-21
               2.1.10. EMPLOYEE BENEFIT PLANS..............................    A-21
               2.1.11. LABOR AND EMPLOYMENT MATTERS........................    A-23
               2.1.12. LICENSES............................................    A-23
               2.1.13. INTELLECTUAL PROPERTY...............................    A-24
               2.1.14. RIGHTS AGREEMENT....................................    A-24
               2.1.15. CONTINUITY OF BUSINESS..............................    A-24
               2.1.16. COMPLIANCE WITH LAWS................................    A-24
               2.1.17. CERTAIN CONTRACTS...................................    A-24
               2.1.18. TAX TREATMENT.......................................    A-25
               2.1.19. TAX MATTERS.........................................    A-25
Section 2.2.   REPRESENTATIONS AND WARRANTIES OF PARENT....................    A-25
               2.2.1. ORGANIZATION, GOOD STANDING AND QUALIFICATION........    A-26
               2.2.2. CAPITAL STRUCTURE....................................    A-26
               2.2.3. CORPORATE AUTHORITY AND APPROVAL.....................    A-27
               2.2.4. GOVERNMENTAL FILINGS, NO VIOLATIONS..................    A-27
               2.2.5. REPORTS; FINANCIAL STATEMENTS........................    A-28
               2.2.6. ABSENCE OF CERTAIN CHANGES...........................    A-29
               2.2.7. LITIGATION AND LIABILITIES...........................    A-29
               2.2.8. TAKEOVER STATUTES....................................    A-29
               2.2.9. BROKERS AND FINDERS..................................    A-29
               2.2.10. EMPLOYEE BENEFIT PLANS..............................    A-29
               2.2.11. LABOR AND EMPLOYMENT MATTERS........................    A-31
               2.2.12. LICENSES............................................    A-31
               2.2.13. INTELLECTUAL PROPERTY...............................    A-31
               2.2.14. CONTINUITY OF BUSINESS..............................    A-32
               2.2.15. COMPLIANCE WITH LAWS................................    A-32
</TABLE>


                                      A-2
<PAGE>

<TABLE>
<S>            <C>                                                           <C>
               2.2.16. CERTAIN CONTRACTS...................................    A-32
               2.2.17. TAX TREATMENT.......................................    A-32
               2.2.18. MERGER SUB HOLDING CO.'S AND MERGER SUB'S               A-32
               OPERATIONS..................................................
               2.2.19. TAX MATTERS.........................................    A-32

ARTICLE III COVENANTS......................................................    A-33

Section 3.1.   INTERIM OPERATIONS OF THE COMPANY...........................    A-33
Section 3.2.   INTERIM OPERATIONS OF PARENT................................    A-35
Section 3.3.   ACQUISITION PROPOSALS.......................................    A-36
Section 3.4.   INFORMATION SUPPLIED........................................    A-38
Section 3.5.   MEETINGS....................................................    A-39
Section 3.6.   FILINGS; OTHER ACTIONS; NOTIFICATION........................    A-40
Section 3.7.   ACCESS......................................................    A-41
Section 3.8.   PUBLICITY...................................................    A-42
Section 3.9.   BENEFITS AND OTHER MATTERS..................................    A-42
               3.9.1. EMPLOYEE BENEFITS....................................    A-42
               3.9.2. DIRECTOR AND OFFICER INDEMNIFICATION AND                 A-43
               INSURANCE...................................................
               3.9.3. DIRECTORS AND OFFICERS OF PARENT.....................    A-44
Section 3.10.  EXPENSES....................................................    A-44
Section 3.11.  OTHER ACTIONS BY THE COMPANY AND PARENT.....................    A-45
               3.11.1. TAKEOVER STATUTES...................................    A-45
               3.11.2. DIVIDENDS...........................................    A-45
Section 3.12.  TRADING/LISTING APPLICATIONS; ESTABLISHMENT OF PARENT           A-45
               DEPOSITARY SHARES...........................................
Section 3.13.  LETTERS OF ACCOUNTANTS......................................    A-45
Section 3.14.  AGREEMENTS OF COMPANY AFFILIATES............................    A-46
Section 3.15.  TAX REPRESENTATION LETTERS..................................    A-46
Section 3.16.  SECTION 16(B)...............................................    A-46
Section 3.17.  EMPLOYEE AND NO-SALE AGREEMENTS TO BE ENTERED INTO BY           A-46
               DESIGNEES...................................................
Section 3.18.  HEADQUARTERS; NAME..........................................    A-46
               3.18.1. HEADQUARTERS OF THE PARENT..........................    A-46
               3.18.2. HEADQUARTERS OF ADVERTISING AGENCIES OF THE             A-46
               COMPANY.....................................................
               3.18.3. NAME OF PARENT......................................    A-46
Section 3.19.  CONVERTIBLE NOTES...........................................    A-46
Section 3.20.  TREATMENT OF HOLDERS OF PARENT DEPOSITARY SHARES............    A-47
Section 3.21.  TRANSITION COMMITTEE........................................    A-47

ARTICLE IV CONDITIONS......................................................    A-48

Section 4.1.   CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE             A-48
               MERGER......................................................
               4.1.1. SHAREHOLDER APPROVALS................................    A-48
               4.1.2. REGULATORY CONSENTS..................................    A-48
               4.1.3. LAWS AND ORDERS......................................    A-48
               4.1.4. EFFECTIVENESS OF FORM F-4............................    A-49
               4.1.5. LISTING AND TRADING..................................    A-49
Section 4.2.   CONDITIONS TO OBLIGATIONS OF PARENT, MERGER SUB HOLDING CO.     A-49
               AND MERGER SUB..............................................
               4.2.1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY........    A-49
               4.2.2. PERFORMANCE OF OBLIGATIONS OF THE COMPANY............    A-49
               4.2.3. TAX OPINION..........................................    A-49
Section 4.3.   CONDITIONS TO OBLIGATION OF THE COMPANY.....................    A-50
               4.3.1. REPRESENTATIONS AND WARRANTIES OF PARENT.............    A-50
               4.3.2. PERFORMANCE OF OBLIGATIONS OF PARENT.................    A-50
               4.3.3. TAX OPINION..........................................    A-50
</TABLE>



                                      A-3

<PAGE>

<TABLE>
<S>            <C>                                                           <C>
ARTICLE V TERMINATION......................................................    A-51

Section 5.1.   TERMINATION BY MUTUAL CONSENT...............................    A-51
Section 5.2.   TERMINATION BY EITHER PARENT OR THE COMPANY.................    A-51
Section 5.3.   TERMINATION BY THE COMPANY..................................    A-51
Section 5.4.   TERMINATION BY PARENT.......................................    A-51
Section 5.5.   EFFECT OF TERMINATION AND ABANDONMENT.......................    A-52

ARTICLE VI MISCELLANEOUS AND GENERAL.......................................    A-53

Section 6.1.   SURVIVAL....................................................    A-53
Section 6.2    MODIFICATION OR AMENDMENT...................................    A-53
Section 6.3.   WAIVER OF CONDITIONS........................................    A-54
Section 6.4.   FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.......    A-54
Section 6.5.   COUNTERPARTS................................................    A-54
Section 6.6.   GOVERNING LAW; SUBMISSION TO JURISDICTION...................    A-54
Section 6.7.   NOTICES.....................................................    A-54
Section 6.8.   ENTIRE AGREEMENT............................................    A-56
Section 6.9    SEVERABILITY................................................    A-56
Section 6.10.  INTERPRETATION..............................................    A-56
Section 6.11.  ASSIGNMENT..................................................    A-56
Section 6.12.  SPECIFIC PERFORMANCE........................................    A-56

EXHIBITS       [OMITTED]

Exhibit A-1    FORM OF EMPLOYMENT AGREEMENT
Exhibit A-2    LIST OF COMPANY EMPLOYEES EXECUTING AN EMPLOYMENT AGREEMENT
Exhibit B-1    FORM OF NO-SALE AGREEMENT
Exhibit B-2    LIST OF COMPANY EMPLOYEES AND/OR STOCKHOLDERS EXECUTING A
               NO-SALE AGREEMENT
Exhibit C      COMPANY DESIGNEES
Exhibit D      FORM OF COMPANY AFFILIATE LETTER
Exhibit E      FORM OF PARENT'S TAX REPRESENTATION LETTER
Exhibit F      FORM OF COMPANY'S TAX REPRESENTATION LETTER
</TABLE>



                                      A-4

<PAGE>

                                  DEFINITIONS


<TABLE>
<CAPTION>
TERM                                                           SECTION
----                                                          ---------
<S>                                                           <C>
2000 Bonus Program..........................................   3.9.1.1
Acquisition Proposal........................................     3.3.1
Acquisition Transaction.....................................     3.1.4
Affiliate...................................................     2.1.1
Agreement...................................................  preamble
Bankruptcy and Equity Exception.............................     2.1.3
Certificates................................................     1.2.5
Closing.....................................................     1.1.3
Closing Date................................................     1.1.3
Code........................................................  recitals
Common Certificate..........................................     1.2.5
Companies Act...............................................     2.1.1
Company.....................................................  preamble
Company Affiliates..........................................      3.14
Company Committee Members...................................      3.21
Company Common Shares.......................................     1.2.1
Company Convertible Notes...................................     2.1.2
Company Designees...........................................     3.9.3
Company Disclosure Schedule.................................       2.1
Company Employee Plans......................................  2.1.10.1
Company Employees...........................................  2.1.10.1
Company Employment Agreement................................  2.1.10.1
Company Money Market Preferred Shares.......................     1.2.1
Company Officers............................................     2.1.7
Company Preference Shares...................................     2.1.2
Company Proxy Statement.....................................   3.4.1.1
Company Reports.............................................     2.1.5
Company Required Consents...................................   2.1.4.1
Company Requisite Vote......................................     2.1.3
Company Stock Option........................................     1.4.1
Company Stock Plans.........................................     2.1.2
Company Stockholders' Meeting...............................       3.5
Confidentiality Agreement...................................     3.3.1
Contracts...................................................   2.1.4.2
Convertible Notes Indenture.................................    3.19.1
Deposit Agreement...........................................     1.2.4
Depositary..................................................     1.2.4
DGCL........................................................     1.1.1
Disclosure Schedules........................................       2.2
Dissenting Shares...........................................       1.8
Effective Time..............................................     1.1.2
Employment Agreement........................................  recitals
ERISA.......................................................  2.1.10.1
ERISA Affiliate.............................................  2.1.10.2
Europe Company Stock Options................................     1.4.1
Excess Shares...............................................       1.5
Excess Shares Trust.........................................       1.5
</TABLE>


                                      A-5

<PAGE>


<TABLE>
<CAPTION>
TERM                                                           SECTION
----                                                          ---------
<S>                                                           <C>
Exchange Act................................................     2.1.1
Exchange Agent..............................................     1.3.1
Excluded Share..............................................     1.2.1
Form F-4....................................................   3.4.1.1
Governmental Consents.......................................     4.1.2
Governmental Entity.........................................   2.1.4.1
HSR Act.....................................................   2.1.4.1
Indemnitees.................................................     3.9.2
IP Rights...................................................    2.1.13
Law.........................................................   2.1.4.2
Licenses....................................................    2.1.12
LSE.........................................................       1.5
Material Adverse Effect.....................................     2.1.1
Merger......................................................  recitals
Merger Sub..................................................  preamble
Merger Sub Holding Co. .....................................  preamble
NASDAQ......................................................   2.2.4.1
Nominee.....................................................     1.3.1
Nominee Agreement...........................................     1.3.1
Non-Electing Record Holder..................................     1.3.1
Non-Europe Company Stock Options............................     1.4.1
Non-US Company Designee.....................................     3.9.3
No-Sale Agreement...........................................  recitals
Note Holders................................................    3.19.1
NYSE........................................................     1.3.4
Orders......................................................     4.1.3
Parent......................................................  preamble
Parent ADRs.................................................     1.2.4
Parent Certificates.........................................     1.3.1
Parent Circular.............................................     3.4.2
Parent Committee Members....................................      3.21
Parent Depositary Shares....................................     1.2.2
Parent Designees............................................     3.9.3
Parent Director Resolutions.................................       3.5
Parent Disclosure Schedule..................................       2.2
Parent Documents............................................     3.4.2
Parent Employee Plans.......................................  2.2.10.1
Parent Employees............................................  2.2.10.1
Parent ERISA Plans..........................................  2.2.10.2
Parent Executive Directors..................................     2.2.7
Parent Listing Particulars..................................     3.4.2
Parent Ordinary Shares......................................     1.2.2
Parent Plans................................................  2.2.10.1
Parent Reports..............................................     2.2.5
Parent Required Consents....................................   2.2.4.1
Parent Requisite Resolutions................................       3.5
Parent Requisite Vote.......................................     2.2.3
Parent Shareholders Meeting.................................       3.5
Parties.....................................................  recitals
Party.......................................................  recitals
</TABLE>


                                      A-6
<PAGE>

<TABLE>
<CAPTION>
TERM                                                           SECTION
----                                                          ---------
<S>                                                           <C>
Person......................................................     2.1.1
Planning Committee..........................................      3.21
Preferred Certificate.......................................     1.2.5
Preferred Consideration.....................................     1.2.3
Regulation..................................................   2.1.4.1
Reports.....................................................     2.2.5
Representatives.............................................     3.3.1
Rights Agreement............................................     2.1.2
SEC.........................................................     1.4.2
Securities Act..............................................     1.4.2
Subsidiary..................................................     2.1.1
Superior Proposal...........................................     3.3.1
Surviving Corporation.......................................     1.1.1
Takeover Statute............................................     2.1.8
Tax Representation Letter...................................      3.15
Tax Returns.................................................  2.1.20(a)
Taxes.......................................................  2.1.20(c)
Termination Date............................................       5.2
U.K. GAAP...................................................     2.2.5
U.S. GAAP...................................................     2.1.5
UKLA........................................................   2.2.4.1
US/UK Company Employee......................................  2.1.10.3
US/UK Parent Employee Plan..................................  2.2.10.4
</TABLE>

                                      A-7
<PAGE>

               AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER



    THIS AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER, dated as of May 11,
2000 (this "AGREEMENT"), by and among WPP Group plc, an English public limited
company ("PARENT"), Young & Rubicam Inc., a Delaware corporation (the
"COMPANY"), York Merger Corp., a Delaware corporation and a direct, wholly owned
subsidiary of Parent ("MERGER SUB HOLDING CO.") and York II Merger Corp., a
Delaware corporation and a direct, wholly owned subsidiary of Merger Sub Holding
Co. ("MERGER SUB").


                              W I T N E S S E T H:


    WHEREAS, the respective Boards of Directors of the Company, Parent, Merger
Sub Holding Co. and Merger Sub (each, a "PARTY" and, together, the "PARTIES")
have approved this Agreement and deem it advisable and in the best interests of
their respective shareholders to consummate the merger of Merger Sub with and
into the Company on the terms and conditions set forth in this Agreement (the
"MERGER");


    WHEREAS, for U.S. federal income tax purposes, it is intended that the
Merger qualify as a reorganization under the provisions of Section 368 of the
Internal Revenue Code of 1986, as amended (the "CODE"), and the rules and
regulations promulgated thereunder;

    WHEREAS, concurrently with the execution and delivery of this Agreement and
as a condition and inducement to the willingness of Parent to enter into this
Agreement, Parent and/or the Company are entering into an employment agreement
substantially in the form of the agreement attached as EXHIBIT A-1 (each an
"EMPLOYMENT AGREEMENT") with each of the employees of the Company or its
Subsidiaries listed on EXHIBIT A-2 and a sale restriction/non-compete and
non-solicitation agreement substantially in the form of the agreement attached
as EXHIBIT B-1 (each a "NO-SALE AGREEMENT") with each of the
stockholder-employees or former stockholder-employees of the Company or its
subsidiaries listed on EXHIBIT B-2.

    NOW, THEREFORE, in consideration of the mutual representations, warranties,
covenants and agreements contained in this Agreement, the Parties, intending to
be legally bound, agree as follows:

                                   ARTICLE I
                                   THE MERGER

    Section 1.1.  THE MERGER.

    1.1.1.  At the Effective Time (as defined in Section 1.1.2), Merger Sub
shall be merged with and into the Company in accordance with the Delaware
General Corporation Law (the "DGCL"), whereupon the separate existence of Merger
Sub shall cease, and the Company shall be the surviving corporation in the
Merger (the "SURVIVING CORPORATION") and shall continue as a wholly owned
subsidiary to be governed by the laws of the State of Delaware, and the separate
corporate existence of the Company, with all its rights, privileges, immunities,
powers, franchises, restrictions, disabilities and duties, shall continue
unaffected by the Merger except as set forth in this Article I. The Merger shall
have the effects specified in the DGCL.

    1.1.2.  On the Closing Date (as defined in Section 1.1.3), the Company and
Merger Sub will file a certificate of merger with the Secretary of State of the
State of Delaware and make all other filings or recordings required by
applicable Law (as defined in Section 2.1.4.2) in connection with the Merger.

                                      A-8
<PAGE>
The Merger shall become effective at the time the certificate of merger is duly
filed with the Secretary of State of the State of Delaware or at any later time
as specified in the certificate of merger (the "EFFECTIVE TIME").

    1.1.3.  The consummation of the Merger (the "CLOSING") shall take place at
10:00 A.M. (New York City time) at the offices of Fried, Frank, Harris,
Shriver & Jacobson, One New York Plaza, New York, New York, as soon as
practicable, but in any event within three business days after the day on which
the last to be fulfilled or waived of the conditions set forth in Article IV
(other than those conditions that by their nature are to be fulfilled at the
Closing, but subject to the fulfillment or waiver of these conditions) shall be
fulfilled or waived in accordance with this Agreement, unless otherwise agreed
in writing by the Company and Parent (the "CLOSING DATE").


    Section 1.2.  CONVERSION AND EXCHANGE OF SHARES.  At the Effective Time, by
virtue of the Merger:


    1.2.1.  Each share of Common Stock, par value $.01 per share, of the Company
(including any associated preferred stock purchase rights) (shares of Common
Stock together with the associated rights, the "COMPANY COMMON SHARES") and each
share of Money Market Preferred Stock, par value $.01 per share, of the Company
("COMPANY MONEY MARKET PREFERRED SHARES") held by the Company as treasury stock
or held by Parent or any Subsidiary of Parent or the Company immediately prior
to the Effective Time (each, an "EXCLUDED SHARE") shall be canceled and no
payment of any consideration shall be made with respect to these shares.

    1.2.2.  Subject to Section 1.5, each Company Common Share outstanding
immediately prior to the Effective Time, other than the Excluded Shares, shall
be converted into and shall be canceled in exchange for the right to receive
 .835 (the "EXCHANGE RATIO") American Depositary Shares of Parent ("PARENT
DEPOSITARY SHARES"), each Parent Depositary Share representing five
(5) ordinary shares of nominal value 10p each of Parent ("PARENT ORDINARY
SHARES"). Each holder of converted and canceled Company Common Shares shall have
the right to elect to receive, in lieu of some or all of the Parent Depositary
Shares the holder has the right to receive pursuant to the prior sentence, the
Parent Ordinary Shares represented by the Parent Depositary Shares in respect of
which this election is made.

    1.2.3.  Subject to Section 1.8, each Company Money Market Preferred Share
outstanding immediately prior to the Effective Time, other than Company Money
Market Preferred Shares constituting Excluded Shares, shall be converted into
and shall be canceled in exchange for the right to receive from the Company
(solely out of cash of its own on hand or out of its own borrowings), $115 in
cash plus the amount of all dividends accrued and unpaid in respect of the
Company Money Market Preferred Share as of the Closing Date, without interest
thereon (the "PREFERRED CONSIDERATION").

    1.2.4.  The Parent Depositary Shares issued in connection with the Merger
shall be evidenced by one or more receipts ("PARENT ADRS") issued in accordance
with the Amended and Restated Deposit Agreement, dated as of October 24, 1995,
among Parent, Citibank, N.A., as Depositary (the "DEPOSITARY"), and the holders
and beneficial owners from time to time of Parent ADRs, as amended and restated
in accordance with this Agreement as of the date on which the Effective Time
occurs (the "DEPOSIT AGREEMENT"). As of the Effective Time, the Company shall be
liable for all United Kingdom stamp duties, stamp duty reserve tax and other
similar taxes and similar levies imposed in connection with the issuance or
creation of the Parent Depositary Shares to be issued in the Merger and any
Parent ADRs in connection therewith and any other United Kingdom stamp duty,
stamp duty reserve tax or other similar United Kingdom governmental charge (or
any interest or penalties thereon) that may be payable by Parent and the Company
pursuant to the Deposit Agreement. The Company shall have the same obligation
with respect to issuance of Parent Depositary Shares and Parent ADRs in
connection with the exercise of any Company Stock Options outstanding as of the
Effective Time that become exercisable for Parent Depositary Shares in
accordance with Section 1.4.1. Subject to

                                      A-9
<PAGE>
Section 1.3.3, no holder of Company Stock Options or Company Common Shares shall
be obligated to pay any fee or other charge or expense to the Depositary, in
connection with the issuance of Parent Ordinary Shares, Parent Depositary Shares
or Parent ADRs pursuant to the Merger or Company Stock Options outstanding at
the Effective Time, or the related Parent Certificates (as defined in
Section 1.3.1).

    1.2.5.  At the Effective Time, all Company Common Shares and Company Money
Market Preferred Shares shall no longer be outstanding, shall be canceled and
retired and shall cease to exist, and each certificate (a "COMMON CERTIFICATE")
formerly representing any Company Common Shares (other than Company Common
Shares constituting Excluded Shares) shall thereafter represent only the right
to receive Parent Depositary Shares (or at the election of the holder of
canceled Company Common Shares, Parent Ordinary Shares) as provided in
Section 1.2.2 and the right, if any, to receive cash in lieu of fractional
interests in Parent Depositary Shares or Parent Ordinary Shares, as applicable,
pursuant to Section 1.5 and any distribution or dividend pursuant to
Section 1.3.6, in each case without interest, and each certificate (a "PREFERRED
CERTIFICATE" and when referred to together with Common Certificates, the
"CERTIFICATES") formerly representing any Company Money Market Preferred Shares
(other than Company Money Market Preferred Shares constituting Excluded Shares)
shall thereafter represent only the right to receive the Preferred Consideration
with respect to each Company Money Market Preferred Share formerly represented
by the Preferred Certificate. Subject to the contemplated amendments to the
Deposit Agreement set forth in Section 3.20, the Parent Depositary Shares and
Parent Ordinary Shares issued in accordance with this Article I shall be of the
same class and shall have the same rights as the currently outstanding Parent
Depositary Shares or the currently outstanding Parent Ordinary Shares, as
applicable (it being understood that no dividends in respect of the year ended
December 31, 1999 or any other dividend for which the record date is prior to
the date of the Effective Time shall be paid in respect of the Parent Depositary
Shares or Parent Ordinary Shares issued pursuant to this Article I).

    1.2.6.  Each share of common stock of Merger Sub, par value $0.01 per share,
outstanding immediately prior to the Effective Time shall be converted into one
share of common stock of the Surviving Corporation.

    1.2.7.  In the event that, subsequent to the date of this Agreement but
prior to the Effective Time, the Company changes the number of Company Common
Shares or Company Money Market Preferred Shares, or Parent changes the number of
Parent Ordinary Shares, issued and outstanding, in each case as a result of a
stock split, reverse stock split, stock dividend, recapitalization or
redenomination of share capital, or Parent changes the number of Parent Ordinary
Shares represented by a Parent Depositary Share, the Exchange Ratio and/or the
Preferred Consideration, as applicable, and other items dependent thereon shall
be appropriately adjusted.

    Section 1.3.  SURRENDER AND PAYMENT.

    1.3.1.  Prior to the Effective Time, Parent shall appoint an agent
reasonably acceptable to the Company as exchange agent (the "EXCHANGE AGENT") in
connection with the Merger for the purpose of exchanging Common Certificates for
Parent ADRs or for certificates representing Parent Ordinary Shares ("PARENT
CERTIFICATES"), as applicable, and cash in lieu of fractional Parent Depositary
Shares and Parent Ordinary Shares, as applicable, in accordance with
Section 1.5, and exchanging Preferred Certificates for the Preferred
Consideration. The Company shall act as agent for each holder of record of
Company Common Shares as of the Effective Time that does not elect to receive
Parent Ordinary Shares in lieu of Parent Depositary Shares (each, a
"NON-ELECTING RECORD HOLDER") and shall enter into an agreement (the "NOMINEE
AGREEMENT") with Parent and the Exchange Agent. Parent shall issue the Parent
Ordinary Shares that will represent the Parent Depositary Shares issuable
pursuant to the Merger in registered form to the Exchange Agent (or its
nominee), as nominee and agent for and on

                                      A-10
<PAGE>
behalf of the Non-Electing Record Holders (the "NOMINEE") for the issuance of
Parent Depositary Shares in respect of Company Common Shares for which Common
Certificates have been properly delivered to the Exchange Agent and no election
has been made to receive Parent Ordinary Shares, subject to the terms and
conditions of this Agreement and the Nominee Agreement. The Parent Ordinary
Shares in registered form held by the Nominee of the Non-Electing Record Holders
shall be deposited by the Nominee or on its behalf with the Depositary (or as it
may direct) as and when required for the delivery of Parent Depositary Shares in
accordance with this Article I. To the extent required, the Exchange Agent will
requisition from the Depositary, from time to time, that number of Parent
Depositary Shares, in any denominations as the Exchange Agent shall specify, as
are issuable in respect of Company Common Shares of Non-Electing Record Holders
for which Common Certificates have been properly delivered to the Exchange
Agent. Parent shall deposit with the Exchange Agent, from time to time that
number of Parent Certificates, in any denominations as the Exchange Agent shall
specify, as are issuable in respect of Company Common Shares for which Common
Certificates have been properly delivered to the Exchange Agent, and an election
has been made to receive Parent Ordinary Shares. Parent shall also from time to
time deposit or cause to be deposited with the Exchange Agent U.S. dollars in an
amount sufficient to provide the Exchange Agent with the cash to fund payments
to be made pursuant to Section 1.3.6. The Company shall maintain, pursuant to
Section 1.9, sufficient funds in an escrow account with the Exchange Agent to
provide the Exchange Agent with the cash to fund payments in respect of the
Preferred Consideration.

    1.3.2.  Promptly after the Effective Time, the Surviving Corporation shall
send, or shall cause the Exchange Agent to send, to each holder of record as of
the Effective Time of Company Common Shares and/or Company Money Market
Preferred Shares (other than holders of shares that constitute Excluded Shares)
a letter of transmittal (which shall with respect to holders of Company Common
Shares also serve as a form of election), in a form upon which the Company and
Parent may reasonably agree, for use in effecting delivery of Certificates to
the Exchange Agent. This letter of transmittal shall provide each holder of
record of Company Common Shares with the option to elect to receive Parent
Ordinary Shares in lieu of Parent Depositary Shares. Each holder of Company
Common Shares or Company Money Market Preferred Shares that have been converted
in the Merger into the right to receive the consideration set forth in Sections
1.2.2 and 1.2.3, as applicable, shall, upon surrender to the Exchange Agent of a
Certificate or Certificates, together with a properly completed letter of
transmittal covering the Company Common Shares or Company Money Market Preferred
Shares, as applicable, represented by the Certificate or Certificates, receive
(i) the number of whole Parent Depositary Shares (or, if an election is duly
made therefor, the number of whole Parent Ordinary Shares) into which all of the
Company Common Shares, represented by the holder's Common Certificate or Common
Certificates, are converted in accordance with Section 1.2.2, (ii) a check in an
amount of U.S. dollars (after giving effect to any required tax withholdings)
equal to (A) any cash in lieu of fractional interests in shares to be paid
pursuant to Section 1.5, plus (B) any cash dividends or other distributions that
the holder has the right to receive pursuant to Section 1.3.6 and/or (iii) a
check in an amount of U.S. dollars (after giving effect to any required tax
withholdings) equal to the aggregate amount of the Preferred Consideration which
all of the Company Money Market Preferred Shares, represented by the holder's
Preferred Certificate or Preferred Certificates, are converted pursuant to
Section 1.2.3. Until so surrendered, each Common Certificate shall, after the
Effective Time, represent for all purposes only the right to receive the number
of whole Parent Depositary Shares and/or Parent Ordinary Shares, as applicable,
into which the Company Common Shares represented by that Common Certificate are
converted in accordance with Section 1.2.2 and the applicable amounts provided
in the foregoing clause (ii) and each Preferred Certificate shall, after the
Effective Time, represent for all purposes only the right to receive the
Preferred Consideration into which the Company Money Market Preferred Shares
represented by that Preferred Certificate are converted in accordance with
Section 1.2.3.

                                      A-11
<PAGE>
    1.3.3.  If any Parent Depositary Shares, Parent Ordinary Shares or Preferred
Consideration, as applicable, are to be issued or paid to a person other than
the registered holder of Company Common Shares or Company Money Market Preferred
Shares, as applicable, represented by a Certificate or Certificates surrendered
with respect thereto, it shall be a condition to this issuance or payment that
the Certificate or Certificates so surrendered shall be properly endorsed or
otherwise be in proper form for transfer and that the Person (as defined in
Section 2.1.1) requesting this issuance or payment shall pay to the Exchange
Agent any transfer or other taxes required as a result of this issuance or
payment to a Person other than the registered holder of these Company Common
Shares or Company Money Market Preferred Shares, as applicable, or establish to
the satisfaction of the Exchange Agent that this tax has been paid or is not
payable.

    1.3.4.  The stock transfer books of the Company shall be closed at the close
of trading on the New York Stock Exchange ("NYSE") on the day prior to the
Effective Time, and thereafter there shall be no further registration of
transfers of Company Common Shares or Company Money Market Preferred Shares that
were outstanding prior to the Effective Time. After the Effective Time,
Certificates presented to the Surviving Corporation for transfer shall be
canceled and exchanged for the consideration provided for, and in accordance
with the procedures set forth, in this Article I.

    1.3.5.  Any Parent Ordinary Shares or Parent Depositary Shares to be issued
in respect of Company Common Shares (and any cash in lieu of fractional
interests in Parent Ordinary Shares or Parent Depositary Shares to be paid
pursuant to Section 1.5, plus any cash dividend or other distribution that a
former holder of Company Common Shares has the right to receive pursuant to
Section 1.3.6) and any Preferred Consideration to be paid in respect of Company
Money Market Preferred Shares, in each case pursuant to this Article I, that
remains unclaimed by any former holder of Company Common Shares or Company Money
Market Preferred Shares six months after the Effective Time shall be held by the
Exchange Agent (or a successor agent appointed by Parent) or shall be delivered
to the Depositary upon the instruction of Parent and held by the Depositary, in
either case subject to the instruction of Parent in an account or accounts
designated for this purpose. Parent shall not be liable to any former holder of
Company Common Shares or Company Money Market Preferred Shares for any
securities delivered or any amount paid by the Depositary, the Exchange Agent or
its nominee, as the case may be, to a public official pursuant to applicable
abandoned property laws. Any cash remaining unclaimed by holders of Company
Common Shares or Company Money Market Preferred Shares two years after the
Effective Time (or any earlier date immediately prior to that time as this cash
would otherwise escheat to or become property of any Governmental Entity (as
defined in Section 2.1.4.1)) or as is otherwise provided by applicable Law
shall, to the extent permitted by applicable Law, become the property of the
Surviving Corporation or Parent, as Parent may determine (provided that
unclaimed Preferred Consideration shall become property of the Surviving
Corporation).

    1.3.6.  No dividends or other distributions with respect to Parent
Depositary Shares and Parent Ordinary Shares issuable with respect to the
Company Common Shares shall be paid to the holder of any unsurrendered Common
Certificates until those Common Certificates are surrendered as provided in this
Article I. Upon surrender, there shall be issued and/or paid to the holder of
the Parent Depositary Shares or Parent Ordinary Shares issued in exchange
therefor, without interest, (A) at the time of surrender, the dividends or other
distributions payable with respect to those Parent Depositary Shares and
Ordinary Depositary Shares with a record date on or after the date of the
Effective Time and a payment date on or prior to the date of this surrender and
not previously paid and (B) at the appropriate payment date, the dividends or
other distributions payable with respect to those Parent Depositary Shares and
Parent Ordinary Shares with a record date on or after the date of the Effective
Time but with a payment date subsequent to surrender. For purposes of dividends
or other distributions in respect of Parent Depositary Shares and Parent
Ordinary Shares, all Parent Depositary Shares and Parent Ordinary Shares to be
issued and delivered pursuant to the Merger shall be deemed

                                      A-12
<PAGE>
issued and outstanding as of the Effective Time, and holders of these shares
shall not be entitled to receive any dividend in respect of the calendar year
1999 or any other dividend in respect of which the record date is prior to the
date of the Effective Time.

    Section 1.4.  COMPANY STOCK OPTIONS.

    1.4.1.  At the Effective Time, all employee and director stock options
granted to current or former employees or directors (and the Stock Options
listed in Section 2.1.10 of the Company Disclosure Schedule as an exception to
the representation set forth in Section 2.1.10.6 of this Agreement) to purchase
Company Common Shares (each, a "COMPANY STOCK OPTION") which are then
outstanding and unexercised shall cease to represent a right to acquire Company
Common Shares and (x) Company Stock Options held by a Person whose primary place
of residence or employment with the Company or any of its Subsidiaries is in
Europe ("EUROPE COMPANY STOCK OPTIONS") shall be converted automatically into
options to acquire Parent Ordinary Shares as provided below and (y) all other
Company Stock Options ("NON-EUROPE COMPANY STOCK OPTIONS") shall be converted
automatically into options to acquire Parent Depositary Shares as provided
below, and Parent shall assume each Company Stock Option subject to the terms of
any of the Company Stock Plans (as defined in Section 2.1.2) and the agreements
evidencing grants thereunder. The Board of Directors of the Company and Parent
shall take, or shall cause their committees to take, all action necessary to
effectuate the foregoing. From and after the Effective Time, (i) the number of
Parent Ordinary Shares purchasable upon exercise of each outstanding Europe
Company Stock Option shall be equal to the product of (x) the number of Company
Common Shares that were purchasable under that Europe Company Stock Option
immediately prior to the Effective Time and (y) five (5) times the Exchange
Ratio (subject to adjustment as provided in Section 1.2.7), rounded up or down
to the nearest whole Parent Ordinary Share, and (ii) the exercise price per
Parent Ordinary Share under each Europe Company Stock Option shall be obtained
by dividing (x) the exercise price per Company Common Share of each Europe
Company Stock Option immediately prior to the Effective Time by (y) five times
the Exchange Ratio (subject to adjustment as provided in Section 1.2.7), rounded
up or down to the nearest cent. From and after the Effective Time, (i) the
number of Parent Depositary Shares purchasable upon exercise of each outstanding
Non-Europe Company Stock Option shall be equal to the product of (x) the number
of Company Common Shares that were purchasable upon exercise of that Non-Europe
Company Stock Option immediately prior to the Effective Time and (y) the
Exchange Ratio (subject to adjustment as provided in Section 1.2.7), rounded up
or down to the nearest whole Parent Depositary Share, and (ii) the exercise
price per Parent Depositary Share under each Non-Europe Company Stock Option
shall be obtained by dividing (x) the exercise price per Company Common Share of
each Non-Europe Company Stock Option immediately prior to the Effective Time by
(y) the Exchange Ratio (subject to adjustment as provided in Section 1.2.7),
rounded up or down to the nearest cent. Notwithstanding the foregoing, the
number of Parent Ordinary Shares or Parent Depositary Shares, as applicable, and
the exercise price per Parent Ordinary Share or Depositary Share, as applicable,
of each Europe Company Stock Option or Non-Europe Company Stock Option, as
applicable, which is intended to be an "INCENTIVE STOCK OPTION" (as defined in
Section 422 of the Code) shall be adjusted in accordance with the requirements
of Section 424 of the Code.

    1.4.2.  Prior to the Effective Time, Parent shall reserve for issuance and
shall make available for issuance in accordance with Section 1.4.1 the number of
Parent Depositary Shares and Parent Ordinary Shares necessary to satisfy
Parent's obligations under Section 1.4.1. No later than the Effective Time,
Parent shall file with the U.S. Securities and Exchange Commission (the "SEC") a
registration statement on an appropriate form or a post-effective amendment to a
previously filed registration statement under the Securities Act of 1933, as
amended (the "SECURITIES ACT"), with respect to the Parent Ordinary Shares and
Parent Depositary Shares which are subject to the Non-Europe Company Stock
Options as provided in Section 1.4.1, and shall use reasonable best efforts to
maintain the current

                                      A-13
<PAGE>
status of the prospectus contained therein, as well as comply with any
applicable state securities or "BLUE SKY" laws, for so long as those options
remain outstanding.

    Section  1.5.  FRACTIONAL SHARES.

    Each former holder of Company Common Shares otherwise entitled to receive a
fractional interest in a Parent Depositary Share or Parent Ordinary Share will
be entitled to receive in accordance with the provisions of this Section 1.5 a
cash payment in lieu of that fractional interest in a Parent Depositary Share or
Parent Ordinary Share representing the holder's proportionate interest in the
net proceeds from the sale by the Exchange Agent on behalf of all holders
otherwise entitled to fractional interests of the aggregate of (x) the Parent
Ordinary Shares (and fractional interests therein) underlying the fractional
interests in Parent Depositary Shares, and (y) the fractional interests in
Parent Ordinary Shares, in each case which would otherwise be issued pursuant to
the Merger (the "EXCESS SHARES"). The sale of the Excess Shares by the Exchange
Agent shall be executed through the London Stock Exchange Limited (the "LSE").
The Exchange Agent shall convert or cause to be converted by sale or in any
other manner that it may determine, the proceeds of the sale of the Excess
Shares into U.S. dollars. Until the net proceeds of the sale of the Excess
Shares have been distributed to the former holders of Company Common Shares, the
Exchange Agent will hold the proceeds in trust for those former holders (the
"EXCESS SHARES TRUST"). Commissions, transfer taxes and other out-of-pocket
transaction costs, including the expenses and compensation, of the Exchange
Agent incurred in connection with the sale of the Excess Shares shall be at the
Company's expense for which, pursuant to Section 1.9, the Company shall maintain
sufficient funds in an escrow account and shall not be paid from cash held in
the Excess Shares Trust. The Exchange Agent shall determine the portion of the
Excess Shares Trust to which each former holder of Company Common Shares shall
be entitled, if any, by multiplying the amount of the aggregate net proceeds
comprising the Excess Shares Trust by a fraction the numerator of which shall be
the number of Parent Ordinary Shares (and/or the amount of fractional interest
therein) underlying the fractional interest in a Parent Depositary Share and/or
the fractional interest in a Parent Ordinary Share, as applicable, to which the
former holder would otherwise be entitled and the denominator of which is the
aggregate number of Parent Ordinary Shares (and fractional interests therein)
underlying the aggregate amount of fractional interests in Parent Depositary
Shares plus the aggregate amount of fractional interests in Parent Ordinary
Shares to which all former holders of Company Common Shares would otherwise be
entitled. As soon as practicable after the determination of the amount of cash,
if any, to be paid to former holders of Company Common Shares in lieu of
fractional interests in a Parent Ordinary Share or a Parent Depositary Share,
the Exchange Agent shall pay those amounts to the former holders without
interest.

    Section 1.6.  THE SURVIVING CORPORATION.

    1.6.1.  The certificate of incorporation of the Company in effect at the
Effective Time shall be the certificate of incorporation of the Surviving
Corporation until amended in accordance with applicable Law.

    1.6.2.  The by-laws of the Company in effect at the Effective Time shall be
the by-laws of the Surviving Corporation until amended in accordance with
applicable Law.

    1.6.3.  From and after the Effective Time, until successors are duly elected
or appointed and qualified in accordance with applicable Law, (i) the directors
of Merger Sub at the Effective Time shall be the directors of the Surviving
Corporation, and (ii) subject to Section 3.9.3, the officers of the Company at
the Effective Time shall be the officers of the Surviving Corporation.

                                      A-14
<PAGE>
    Section 1.7.  LOST, STOLEN OR DESTROYED CERTIFICATES.

    In the event any Certificate shall have been lost, stolen or destroyed, upon
the holder's compliance with the replacement requirements established by the
Exchange Agent, including, if necessary, the posting by the holder of a bond in
customary amount as indemnity against any claim that may be made against it with
respect to the Certificate, the Exchange Agent will issue and deliver in
exchange for the lost, stolen or destroyed Certificate the applicable number of
whole Parent Depositary Shares or whole Parent Ordinary Shares (including cash
in lieu of fractional shares in accordance with Section 1.5), and any unpaid
dividends or other distributions deliverable pursuant to Section 1.3.6 in
respect of Company Common Shares or the Preferred Consideration payable in
respect of the Company Money Market Preferred Shares, as applicable, represented
by the Certificate pursuant to this Agreement.

    Section 1.8.  APPRAISAL RIGHTS.

    In accordance with Section 262 of the DGCL, no appraisal rights shall be
available to holders of Company Common Shares in connection with the Merger.
Holders of Company Money Market Preferred Shares which are issued and
outstanding immediately prior to the Effective Time and which are held by a
holder who has not voted those shares in favor of the approval and adoption of
this Agreement, who shall have delivered a written demand for appraisal of those
shares in accordance with the DGCL and who, as of the Effective Time, shall not
have effectively withdrawn or lost this right to appraisal (the "DISSENTING
SHARES") shall be entitled to those rights (but only those rights) as are
granted by Section 262 of the DGCL. Each holder of Dissenting Shares who becomes
entitled to payment for those Dissenting Shares pursuant to Section 262 of the
DGCL shall receive payment from the Surviving Corporation in accordance with the
DGCL; PROVIDED, HOWEVER, that (i) if any holder of Dissenting Shares shall have
failed to establish their entitlement to appraisal rights as provided in
Section 262 of the DGCL, (ii) if any holder of Dissenting Shares shall have
effectively withdrawn the holder's demand for appraisal of the holder's shares
or lost the holder's right to appraisal and payment for the holder's shares
under Section 262 of the DGCL or (iii) if neither any holder of Dissenting
Shares nor the Surviving Corporation shall have filed a petition demanding a
determination of the value of all Dissenting Shares within the time provided in
Section 262 of the DGCL, the holder shall forfeit the right to appraisal of
those Dissenting Shares and each Dissenting Share shall be exchanged pursuant to
Section 1.2.3 of this Agreement. The Company shall give Parent prompt notice of
any demands received by the Company for appraisal of Company Money Market
Preferred Shares and Parent shall have the right to conduct all negotiations and
proceedings with respect to those demands. Any and all amounts paid by the
Company to holders of Dissenting Shares shall be paid by the Company solely out
of cash of its own on hand or out of its own borrowings. In no event shall the
Parent or its Affiliates provide directly or indirectly any funds to the Company
in respect of payments to holders of Dissenting Shares or the repayment of any
of these borrowings.

    Section 1.9.  COMPANY ESCROW ACCOUNT.

    No later than two (2) business days before Closing, the Company shall
establish an escrow account with the Exchange Agent consisting of an adequate
amount of cash from the Company's working capital to fund the Company's
obligations under (i) Section 1.2.4 with respect to stamp duties, stamp duty
reserve taxes and other similar taxes and similar levies, (ii) Section 1.3 with
respect to the Preferred Consideration, (iii) Section 1.5 with respect to
commissions, transfer taxes and other out-of-pocket transaction costs of the
Exchange Agent incurred in connection with the sale of the Excess Shares,
(iv) Section 1.8 with respect to Dissenting Shares and (v) any other expense
that counsel to Parent and counsel to Company reasonably agree relate to the
Company's stockholders.

                                      A-15
<PAGE>
                                   ARTICLE II
                         REPRESENTATIONS AND WARRANTIES

    Section 2.1.  REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

    Except as disclosed in the Company Reports (as defined in Section 2.1.5)
filed with the SEC prior to the date of this Agreement and except as set forth
in the corresponding sections of the Company's disclosure schedule to this
Agreement (the "COMPANY DISCLOSURE SCHEDULE"), the Company represents and
warrants to Parent as follows:

        2.1.1.  ORGANIZATION, GOOD STANDING AND QUALIFICATION.

    Each of the Company and its Subsidiaries is duly organized, validly existing
and in good standing (with respect to jurisdictions that recognize the concept
of good standing) under the Laws of its respective jurisdiction of organization
and has all requisite corporate or similar power and authority, and all
government licenses, authorizations, consents and approvals required to own,
operate and lease its properties and assets and to carry on its business as
presently conducted and is duly qualified to do business and is in good standing
(with respect to jurisdictions that recognize the concept of good standing) in
each jurisdiction where the ownership, operation or leasing of its assets or
properties or conduct of its business requires qualification, except where the
failure to be so organized, qualified or in good standing (with respect to
jurisdictions that recognize the concept of good standing) or to have this power
or authority, would not, individually or in the aggregate, have a Material
Adverse Effect (as defined below) on the Company. The Company has made available
to Parent complete and correct copies of the Company's certificate of
incorporation and by-laws, in each case as amended and as in effect as of the
date of this Agreement. As used in this Agreement, the term (i) "Subsidiary"
means, with respect to the Company, any entity, whether incorporated or
unincorporated, in which the Company owns, directly or indirectly, more than
fifty percent of the securities or other ownership interests having by their
terms ordinary voting power to elect more than fifty percent of the directors or
other persons performing similar functions, or the management and policies of
which the Company otherwise has the power to direct, and, with respect to
Parent, any body corporate which is a subsidiary or subsidiary undertaking, in
each case within the meaning of the Companies Act 1985 of the United Kingdom, as
amended (the "COMPANIES ACT"); (ii) "Material Subsidiaries" when used in
reference to the Company means Young & Rubicam Denmark Group A/S (Denmark),
Young & Rubicam Development (Holdings) Limited, and Young & Rubicam
International Group B.V. (Netherlands) and Subsidiaries of the Company that are
"Significant Subsidiaries" (as defined in Rule 1-02(w) of Regulation S-X
promulgated under the Exchange Act); and when used in reference to Parent means
all Subsidiaries of Parent that are Significant Subsidiaries; (iii) "Material
Adverse Effect" on or with respect to Parent or the Company, as the case may be,
means a material adverse effect on the business, properties, results of
operations or financial condition of Company and its Subsidiaries, taken as a
whole, or the Parent and its Subsidiaries, taken as a whole, as the case may be;
PROVIDED, HOWEVER, that the events, consequences or conditions arising out of or
caused by the following shall not be deemed to be a Material Adverse Effect:
(a) the announcement of this Agreement and the Merger, including any
termination, or reduction in, client business due to the announcement or
completion of the Merger or the identity of the parties to this Agreement;
(b) with respect to the clients listed in Section 2.1.1 of the Company
Disclosure Schedule (in the case or the Company) or in Section 2.2.1 of the
Parent Disclosure Schedule (as defined in Section 2.2) (in the case of Parent),
the impact of any change in client business publicly announced by Parent or the
Company, as applicable, or any client prior to the date of this Agreement; or
(c) general changes in economic conditions in the broader economy or the
advertising industry as a whole (except to the extent that any change materially
disproportionately affects Parent and its Subsidiaries, on the one hand, or the
Company and its Subsidiaries, on the other hand); (iv) "Person" shall mean any
individual, corporation, general or limited partnership, limited liability or
unlimited liability company, joint venture, estate, trust, association,
organization,

                                      A-16
<PAGE>
Governmental Entity or other entity of any kind or nature; and (v) "Affiliate"
shall have the meaning specified in Rule 12b-2 of the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT").

        2.1.2.  CAPITAL STRUCTURE.

    (a) As of the date of this Agreement, the authorized capital stock of the
Company consists of 250,000,000 Company Common Shares, of which 72,170,192
Company Common Shares were issued and outstanding as of the close of business on
May 1, 2000, and 10,000,000 shares of Preference Stock, par value $.01 per share
(the "COMPANY PREFERENCE SHARES"). Of the authorized Company Preference Shares,
(i) 2,500,000 shares have been designated as Cumulative Participating Junior
Preferred Stock, of which no shares are issued or outstanding as of the date of
this Agreement but of which all have been reserved for issuance pursuant to the
Rights Agreement, dated May 1, 1998, between the Company and The Bank of New
York, as rights agent (the "RIGHTS AGREEMENT"), and (ii) 50,000 shares have been
designated as Company Money Market Preferred Shares, of which 87 shares are
issued and outstanding as of the date of this Agreement. All of the outstanding
Company Common Shares and Company Preference Shares have been duly authorized
and validly issued and are fully paid and nonassessable. As of the date of this
Agreement, the Company has no Company Common Shares or Company Preference Shares
reserved for or otherwise subject to issuance, except (i) no more than
25,306,605 Company Common Shares subject to issuance pursuant to Company Stock
Options outstanding as of the date of this Agreement (and the weighted average
exercise price of those Company Stock Options and the plans or agreements
pursuant to which those Company Stock Options have been issued (the "COMPANY
STOCK PLANS") are set forth in Section 2.1.2 of the Company Disclosure Schedule)
and (ii) no more than 3,918,900 Company Common Shares subject to issuance upon
conversion of the Company's 3% convertible subordinated notes due January 15,
2005 ("COMPANY CONVERTIBLE NOTES"). The Company Stock Options outstanding as of
the date of this Agreement (and identified in Section 2.1.2 of the Company
Disclosure Schedule) exercisable for up to 2,200,000 of the Company Common
Shares referenced in clause (i) of the prior sentence will not vest or become
exercisable as a result of the execution of this Agreement or the consummation
of the transactions contemplated by this Agreement. From the close of business
on May 1, 2000 until the date of this Agreement, the Company has not issued,
granted or sold any Company Common Shares other than pursuant to the exercise of
Company Stock Options.

    (b) Each of the outstanding shares of capital stock or other ownership
interests of each of the Company's Subsidiaries that constitute a Significant
Subsidiary is duly authorized, validly issued, fully paid and nonassessable and
owned by the Company or a direct or indirect wholly owned Subsidiary of the
Company, in each case free and clear of any lien, pledge, security interest,
claim or other encumbrance, except as would not, individually or in the
aggregate, have a Material Adverse Effect on the Company. Except as set forth in
Section 2.1.2(a), as of the date of this Agreement, there are no preemptive or
other outstanding rights, options, warrants, conversion rights, stock
appreciation rights, redemption rights, repurchase rights, agreements,
arrangements, calls, commitments or rights of any kind which obligate the
Company or any of its Material Subsidiaries to issue or sell any shares of
capital stock or other securities of the Company or any of its Material
Subsidiaries or any securities or obligations convertible or exchangeable into
or exercisable for, or giving any Person a right to subscribe for or acquire
from the Company or any of its Material Subsidiaries, any securities of the
Company or any of its Material Subsidiaries, and no securities or obligations
evidencing any rights are authorized, issued or outstanding. Except as set forth
in Section 2.1.2(a), as of the date of this Agreement, the Company does not have
outstanding any bonds, debentures, notes or other obligations the holders of
which have the right to vote (or which are convertible, exchangeable or
exercisable for or into securities having the right to vote) with the
stockholders of the Company on any matter.

                                      A-17
<PAGE>
        2.1.3.  CORPORATE AUTHORITY, APPROVAL AND FAIRNESS OPINION.


    The Company has all requisite corporate power and authority to execute and
deliver this Agreement, to perform its obligations under this Agreement and to
consummate the Merger and the other transactions contemplated by this Agreement,
subject only to the adoption of this Agreement by the affirmative vote of the
holders of record not less than a majority of all of the votes entitled to be
cast by holders of Company Common Shares and Company Money Market Preferred
Shares (the "COMPANY REQUISITE VOTE"). Each Company Common Share entitles its
record holder to one vote per share, and each Company Money Market Preferred
Share entitles its record holder to one-tenth of a vote per share, in connection
with a vote of the stockholders of the Company with respect to the adoption of
this Agreement. The execution and delivery of this Agreement, the performance by
the Company of its obligations under this Agreement and the consummation by the
Company of the Merger and the other transactions contemplated by this Agreement
have been duly authorized by all necessary corporate action on the part of the
Company, subject only to adoption of the Merger Agreement by the stockholders of
the Company pursuant to the Company Requisite Vote, and assuming the due
authorization, execution and delivery of this Agreement by Parent and, to the
extent applicable, Merger Sub Holding Co. and Merger Sub, this Agreement
constitutes the valid and binding agreement of the Company enforceable against
the Company in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles (the "BANKRUPTCY AND EQUITY EXCEPTION"). The Board of Directors of
the Company has adopted resolutions (A) approving this Agreement, the Merger and
the other transactions contemplated by this Agreement, (B) declaring the
advisability of this Agreement, (C) determining that this Agreement, the Merger
and the other transactions contemplated by this Agreement are in the best
interests of the Company's stockholders and (D) subject to Section 3.3.5,
recommending that the Company's stockholders vote in favor of the adoption of
this Agreement at the Company Stockholders Meeting. The Board of Directors of
the Company has received the opinion of its financial advisors, Morgan
Stanley & Co. Incorporated and Bear Stearns and Co. Inc., to the effect that, as
of the date of this Agreement, the Exchange Ratio is fair to the holders of
Company Common Shares from a financial point of view.


        2.1.4.  GOVERNMENTAL FILINGS, NO VIOLATIONS.

           2.1.4.1.  Other than the necessary filings, notices, approvals,
       confirmations, consents, declarations and/or decisions (A) pursuant to
       Sections 1.1.2 and 3.4, (B) under the Hart-Scott-Rodino Antitrust
       Improvements Act of 1976, as amended (the "HSR ACT"), the Exchange Act
       and the Securities Act, (C) with and from the European Commission, in
       accordance with Council Regulation (EEC) No 4064/89 as amended (the
       "REGULATION"), (D) with and from the competent authority of any member
       state of the European Union to which any of the transactions contemplated
       by this Agreement is referred pursuant to Article 9 of the
       Regulation (E) or under other antitrust laws, competition or other
       similar rules, regulations and judicial doctrines of jurisdictions
       outside of the United States and the European Union, and (F) to comply
       with the rules and regulations of the NYSE and the NASDAQ (as defined in
       Section 2.2.4.1) (these filings, notices, approvals, confirmations,
       consents, declarations and/or decisions to be made, given or obtained by
       the Company being, if any, the "COMPANY REQUIRED CONSENTS"), no filings,
       notices, declarations and/or decisions are required to be made by the
       Company or any of its Subsidiaries with, nor are any approvals or other
       confirmations or consents required to be obtained by the Company or any
       of its Subsidiaries from, any governmental or regulatory (including stock
       exchange) authority, agency, court, commission, body or other
       governmental entity (each, a "GOVERNMENTAL ENTITY"), in connection with
       the execution and delivery by the Company of this Agreement and the
       performance by the Company of its obligations under this Agreement and
       the consummation by the Company of the Merger and the other transactions
       contemplated by this Agreement, except those the

                                      A-18
<PAGE>
       failure of which to make, give or obtain, individually or in the
       aggregate, would not have a Material Adverse Effect on the Company or
       prevent, materially delay or materially impair the Company's ability to
       consummate the Merger or any of the other transactions contemplated by
       this Agreement.

           2.1.4.2.  The execution, delivery and performance of this Agreement
       by the Company do not, and the performance of the Company of its
       obligations under this Agreement and the consummation by the Company of
       the Merger and the other transactions contemplated by this Agreement will
       not, constitute or result in (A) a breach or violation of, or a default
       under, the Company's certificate of incorporation or by-laws (as amended
       from time to time), (B) subject to making, giving or obtaining all
       necessary filings, notices, approvals, confirmations, declarations and/or
       decisions specified by Section 2.1.4.1, a breach or violation of, or a
       default under, the acceleration of any obligations or the creation of a
       lien, pledge, security interest, right of purchase, sale or termination
       or other encumbrance on the assets of the Company or any of its
       Subsidiaries (with or without notice, lapse of time or both) pursuant to
       any agreement, lease, license, contract, note, mortgage, indenture,
       arrangement or other obligation ("CONTRACTS") binding upon the Company or
       any of its Subsidiaries or any law, ordinance, regulation, judgment,
       order, decree, injunction, arbitration, award, license or permit of any
       Governmental Entity ("LAW") or governmental or non-governmental permit or
       license to which the Company or any of its Subsidiaries is subject, or
       (C) any change in the rights or obligations of any party under any of
       these Contracts except, in the case of clause (B) or (C) above, for any
       breach, violation, default, acceleration, creation or change that,
       individually or in the aggregate, would not have a Material Adverse
       Effect on the Company or prevent, materially delay or materially impair
       the Company's ability to consummate the Merger or any of the other
       transactions contemplated by this Agreement.

        2.1.5.  REPORTS; FINANCIAL STATEMENTS.

    Since December 31, 1997, the Company has filed with the SEC all material
forms, statements, reports and documents (including all exhibits, post-effective
amendments and supplements thereto) required to be filed by it under each of the
Securities Act, the Exchange Act and the respective rules and regulations
thereunder (collectively, the "COMPANY REPORTS"). As of their respective dates,
the Company Reports did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements made therein, in the light of the circumstances under which they
were made, not misleading. Each of the consolidated balance sheets included in
or incorporated by reference into the Company Reports (including the related
notes and schedules) fairly presents, in all material respects, the financial
position of the Company and its subsidiaries as of its date and each of the
related consolidated statements of operations, cash flows and charges in equity
(deficit) included in or incorporated by reference into the Company Reports
(including any related notes and schedules) fairly presents, in all material
respects, the results of operations and cash flows of the Company and its
subsidiaries for the periods set forth therein (subject, in the case of
unaudited statements, to notes and normal year-end audit adjustments that will
not be material in amount or effect), in each case in conformity with generally
accepted accounting principles in the United States ("U.S. GAAP") consistently
applied during the periods involved except as may be noted therein.

        2.1.6.  ABSENCE OF CERTAIN CHANGES.

    Except as expressly contemplated by this Agreement, since December 31, 1999,
the Company and its Subsidiaries have conducted their respective businesses only
in, and have not engaged in any material transaction other than in accordance
with, the ordinary and usual course of these businesses, and since December 31,
1999 there has not been (i) any change in the financial condition, properties,
business or results of operations of the Company and its Subsidiaries except
those changes that,

                                      A-19
<PAGE>
individually or in the aggregate, have not had and would not have a Material
Adverse Effect on the Company; (ii) any declaration, setting aside or payment of
any dividend or other distribution in cash, stock or property in respect of the
Company's capital stock or any securities convertible, exchangeable or
exercisable for or into shares of its capital stock, except for (w) regular
quarterly cash dividends of no more than U.S. $.025 per Company Common Share,
(x) dividends in respect of the Company Money Market Preferred Shares in
accordance with their terms, and (y) interest payments in respect of the Company
Convertible Notes in accordance with their terms; (iii) any redemption,
repurchase or other acquisition of any shares of the Company's capital stock or
any securities convertible, exchangeable or exercisable for or into shares of
its capital stock (other than as required by the terms of any Company Stock Plan
and other than repurchases of Company Money Market Preferred Shares for not more
than the Preferred Consideration per share), or (iv) any change by it in
accounting principles, practices or methods except as required by changes in
U.S. GAAP. Between December 31, 1999 and the date of this Agreement, except as
contemplated by this Agreement, there has not been any increase in the
compensation payable or that could become payable by the Company or any of its
Subsidiaries to officers or key employees, other than increases in the ordinary
and usual course of business, and the Company has not entered into or amended
any of its compensation or benefit plans or agreements, including severance,
change of control or similar plans and agreements. Since December 31, 1999, the
Company has granted awards under its performance share plan implemented pursuant
to the Company's 1997 Incentive Compensation Plan and under similar plans to the
categories of persons with the terms (including performance targets) applicable
to these awards set forth in Section 2.1.6 of the Company Disclosure Schedule.
Section 2.1.6 of the Company Disclosure Schedule sets forth the estimated total
value of the awards payable solely as a result of a change of control and the
amount reflected in the Company's budget for 2000 previously delivered to
Parent.

        2.1.7.  LITIGATION AND LIABILITIES.

    (a) There are no civil, criminal or administrative actions, suits, claims,
hearings, investigations or proceedings pending or, to the knowledge of the
Company's chief executive officer, chief financial officer, chief accounting
officer, general counsel or executive vice president for human resources
("COMPANY OFFICERS"), threatened against the Company or any of its Subsidiaries
except, in each case, for those that, individually or in the aggregate, have not
had and would not have a Material Adverse Effect on the Company or prevent,
materially delay or materially impair the Company's ability to consummate the
Merger or any of the other transactions contemplated by this Agreement.

    (b) Neither the Company nor any of its Subsidiaries had at December 31,
1999, or has incurred since that date and as of the date of this Agreement, any
liabilities or obligations (whether absolute, accrued, contingent or otherwise)
of any nature, except (i) liabilities, obligations or contingencies (1) which
are accrued or reserved against in the most recent audited consolidated balance
sheet of the Company as of December 31, 1999 or reflected in the notes thereto
or (2) which were incurred after December 31, 1999 in the ordinary course of
business and consistent with past practices or (ii) liabilities, obligations or
contingencies which (1) would not, individually or in the aggregate, have a
Material Adverse Effect on the Company, (2) have been discharged or paid in full
prior to the date of this Agreement in the ordinary course of business, or
(3) are not required to be reflected in the consolidated financial statements of
the Company and its Subsidiaries prepared in accordance with U.S. GAAP
consistently applied.

        2.1.8.  TAKEOVER STATUTES.

    The Board of Directors of the Company has taken or will take all appropriate
and necessary action to render any "fair price," "moratorium," "control share
acquisition" or other similar anti-takeover statute or regulation, including
Section 203 of the DGCL (each, a "TAKEOVER STATUTE") inapplicable to this
Agreement, the Merger and the other transactions contemplated by this Agreement.

                                      A-20
<PAGE>
        2.1.9.  BROKERS AND FINDERS.

    Neither the Company nor any of its Subsidiaries, officers, directors or
employees has employed any broker or finder or incurred any liability for any
brokerage fees, commissions or finders' fees in connection with the execution
and delivery of this Agreement or the Merger or the other transactions
contemplated by this Agreement, except that the Company has retained Morgan
Stanley & Co. Incorporated and Bear, Stearns & Co. Inc. as its financial
advisors.

        2.1.10.  EMPLOYEE BENEFIT PLANS.

           2.1.10.1.  Set forth in Section 2.1.10 of the Company Disclosure
       Schedule is a list of each stock option, stock purchase, and stock
       appreciation right with respect to the 100 highest paid (based on 1999
       base salary and annual bonus) Company Employees (as defined below) who
       are participants in the Company's Key Corporation Managers Bonus Plan,
       including the exercise prices, vesting schedules and expiration dates of
       the Company Stock Options, each material stock based incentive plan, or
       other similar arrangement or policy applicable to any current, former, or
       retired employee, officer, consultant, independent contractor, agent or
       director of the Company or any of its Subsidiaries (collectively, the
       "COMPANY EMPLOYEES"), each material plan, program, or policy providing
       for bonuses, profit-sharing, stock option or other stock related rights
       or other forms of incentive or deferred compensation, vacation benefits,
       insurance coverage and self-insured arrangements, health or medical
       benefits, disability benefits, workers' compensation, supplemental
       unemployment benefits, severance benefits and post-employment or
       retirement benefits or other employee benefits of any kind, whether
       funded or unfunded, which is maintained, administered or contributed to
       by the Company or any of its Subsidiaries or under which the Company or
       any of its Subsidiaries has any liability, contingent or otherwise, and
       which covers any Company Employee employed or providing services or
       formerly employed or providing services in the United States or the
       United Kingdom to the Company or any of its Subsidiaries, (including but
       not limited to each "employee benefit plan," as defined in Section 3(3)
       of the Employee Retirement Income Security Act of 1974, as amended
       ("ERISA"), but excluding any plan that is a "multiemployer plan," as
       defined in Section 3(37) of ERISA) (collectively, the "COMPANY EMPLOYEE
       PLANS"), and each material employment, severance, consulting,
       non-compete, or similar agreement or contract that provides for equity
       grants and/or cash incentives that are beyond and are inconsistent with
       the Company's ordinary annual equity grant and/or cash incentive programs
       as set forth in the guidelines and criteria therefor previously provided
       to Parent (each a "COMPANY EMPLOYMENT AGREEMENT"). True and complete
       copies of all Company Employment Agreements and Company Employee Plans,
       as listed in the preceding sentence, including, but not limited to, any
       trust instruments and insurance contracts forming a part of any Company
       Employee Plan, and all amendments have been provided or made available to
       Parent. For purposes of this Agreement, the term "Company Foreign Plan"
       shall refer to each material plan, program or contract maintained,
       sponsored or contributed to by the Company or a Subsidiary that is
       subject to or governed by the laws of any jurisdiction other than the
       United States or the United Kingdom, and which would have been treated as
       a Company Employee Plan had it been a United States or United Kingdom
       plan, program or contact. The Company shall use its reasonable best
       efforts to make available to Parent, within thirty (30) days following
       the date of this Agreement, a list and copies of the Company Foreign
       Plans.

           2.1.10.2.  Each Company Employee Plan and Company Employment
       Agreement has been established and maintained in compliance with its
       terms and with the requirements prescribed by any and all statutes,
       orders, rules and regulations (including but not limited to ERISA and the
       Code) which are applicable to the plan or agreement, except where failure
       to so comply would not, individually or in the aggregate, have a Material
       Adverse Effect on the Company. Except as would not, individually or in
       the aggregate, have a Material Adverse

                                      A-21
<PAGE>
       Effect on the Company in the six years prior to the date of this
       Agreement, neither the Company, any of its Subsidiaries nor any ERISA
       Affiliate contributes to, or is or has been required to contribute to,
       any "multiemployer plan" as defined in Section 3(37) of ERISA. Except as
       would not, individually or in the aggregate, have a Material Adverse
       Effect on the Company, (i) neither the Company, any of its Subsidiaries
       nor any of its ERISA Affiliates has incurred a liability, contingent or
       otherwise, under Title IV of ERISA that has not been satisfied in full,
       and (ii) to the knowledge of the Company Officers no condition exists
       that presents a risk to the Company, any of its Subsidiaries or any of
       its ERISA Affiliates of incurring any such liability other than liability
       for premiums due the Pension Benefit Guaranty Corporation (which premiums
       have been paid when due). For purposes of this Agreement, "ERISA
       Affiliate" means, with respect to the Company or Parent, as applicable,
       each business or entity which is a member of a "controlled group of
       corporations," under "common control" or an "affiliated service group"
       with the Company or Parent, as applicable, within the meaning of Sections
       414(b), (c) or (m) of the Code, or required to be aggregated with the
       Company or Parent, as applicable, under Section 414(o) of the Code, or is
       under "common control" with the Company or Parent, as applicable, within
       the meaning of Section 4001(a)(14) of ERISA. Except as would not,
       individually or in the aggregate, have a Material Adverse Effect on the
       Company, all contributions required to be made under the terms of any
       Company Employee Plan or Company Foreign Plan have been made, and where
       applicable to a Company Employee Plan, the Company, its Subsidiaries and
       its ERISA Affiliates have complied with the minimum funding requirements
       under Section 412 of the Code and Section 302 of ERISA with respect to
       each Company Employee Plan. Each Company Employee Plan which is intended
       to be qualified under Section 401(a) of the Code is so qualified and has
       been so qualified during the period from its adoption to date, and each
       trust forming a part thereof is exempt from federal income tax pursuant
       to Section 501(a) of the Code and, to the knowledge of the Company
       Officers, no circumstances exist which could reasonably be expected to
       materially adversely affect qualification or exemption.

           2.1.10.3.  Except as would not, individually or in the aggregate,
       have a Material Adverse Effect on the Company, neither the Company, any
       of its Subsidiaries nor any of its ERISA Affiliates (i) maintains,
       contributes to or is party to any Company Employee Plan or Company
       Employment Agreement which provides, or has any liability to provide,
       life insurance, medical, severance or other employee welfare benefits to
       any Company Employee upon his retirement or termination of employment,
       except as may be required by Section 4980B of the Code; or (ii) has ever
       represented, promised or contracted (whether in oral or written form) to
       any Company Employee employed by or providing services to, or formerly
       employed by or providing services to, the Company or any of its
       Subsidiaries in the United States or the United Kingdom (each a "US/UK
       COMPANY EMPLOYEE") (either individually or to the US/UK Company Employees
       as a group) that the US/UK Company Employee(s) would be provided with
       life insurance, medical, severance or other employee welfare benefits
       upon their retirement or termination of employment, except to the extent
       required by Section 4980B of the Code.

           2.1.10.4.  The execution, delivery of and performance by the Parties
       of their obligations under and the consummation of the transactions
       contemplated by this Agreement will not (either alone or upon the
       occurrence of any additional or subsequent events) (i) constitute an
       event under any Company Employee Plan, any Company Employment Agreement,
       or any trust or loan related to any of those plans or agreements that
       will or may result in any payment (whether of severance pay or
       otherwise), acceleration, forgiveness of indebtedness, vesting,
       distribution, increase in benefits or obligation to fund benefits with
       respect to any Company Employee, (ii) to the knowledge of any Company
       Officer, constitute an event under any Company Foreign Plans or any trust
       or loan related to any of those plans that will or may

                                      A-22
<PAGE>
       result in payments (whether of severance pay or otherwise), acceleration,
       forgiveness of indebtedness, vesting, distributions, increases in
       benefits or obligations to fund benefits with respect to any Company
       Employee (other than US/UK Company Employees) that would be, individually
       or in the aggregate, material, or (iii) result in the triggering or
       imposition of (x) any restrictions or limitations on the right of the
       Company, any of its Subsidiaries or Parent to amend or terminate any
       Company Employee Plan or any Company Employment Agreement, or (y) to the
       knowledge of the Company Officers, any material restrictions or
       limitations on the rights of the Company, any of its Subsidiaries or
       Parent to amend or terminate any Company Foreign Plan. No payment or
       benefit which will or may be made by the Company, or any of the
       Subsidiaries of the Company, Parent or any of their respective ERISA
       Affiliates with respect to any US/UK Company Employee will be
       characterized as an "excess parachute payment" within the meaning of
       Section 280G(b)(1) of the Code. Except as would not have a Material
       Adverse Effect on the Company, there is no commitment covering any US/UK
       Company Employee, or, to the knowledge of the Company Officers, any other
       Company Employee, that, individually or in the aggregate, would
       reasonably be expected to give rise to the payment of any amount that
       would result in a material loss of tax deductions pursuant to
       Section 162(m) of the Code.

           2.1.10.5.  There has been no amendment to, written interpretation or
       announcement (whether or not written) by the Company or, to the knowledge
       of the Company Officers, any of its Subsidiaries or any of its ERISA
       Affiliates relating to, or change in employee participation or coverage
       under, any Company Employee Plan or Company Employment Agreement which
       would increase the expense of maintaining the plan or agreement above the
       level of the expense incurred in respect thereof for the 12 months ended
       on December 31, 1999, except as would not, individually or in the
       aggregate, have a Material Adverse Effect on the Company. Except as would
       not, individually or in the aggregate, have a Material Adverse Effect on
       the Company, all Company Foreign Plans (i) have been maintained in
       accordance with all applicable requirements; (ii) if they are intended to
       qualify for special tax treatment, meet all requirements for that
       treatment; and (iii) if they are intended to be funded and/or
       book-reserved are fully funded and/or book reserved, as appropriate,
       based upon reasonable actuarial assumptions.

           2.1.10.6.  Except with respect to options granted to members of the
       Board of Directors of the Company under the Directors Stock Option Plan
       adopted January 16, 2000, the Company has not granted any Company Stock
       Options under any Company Stock Plan to any person who was not a common
       law employee of the Company or a Subsidiary of the Company as of the date
       of grant.

        2.1.11.  LABOR AND EMPLOYMENT MATTERS.

    Except as would not, individually or in the aggregate, have a Material
Adverse Effect on the Company, the Company and each Subsidiary (i) is in
compliance with all applicable Laws respecting employment, employment practices,
labor, terms and conditions of employment and wages and hours, in each case,
with respect to Company Employees; and (ii) is not liable for any payment to any
trust or other fund or to any Governmental Entity, with respect to unemployment
compensation benefits, social security or other benefits for Company Employees.
No work stoppage or labor strike against the Company or any Subsidiary by
Company Employees is pending or, to the knowledge of the Company Officers,
threatened.

        2.1.12.  LICENSES.

    Each of the Company and its Subsidiaries has all material permits, licenses,
certificates, waivers or authorizations ("LICENSES") from all Governmental
Entities having jurisdiction over any part of its business necessary for the
conduct of any of its activities and all Licenses are valid and in full force
and

                                      A-23
<PAGE>
effect, except for any Licenses the failure of which to have or to be in full
force and effect would not, individually or in the aggregate, have a Material
Adverse Effect on the Company. Except as would not, individually or in the
aggregate, have a Material Adverse Effect on the Company, no event has occurred
or other fact exists with respect to any of the Licenses held by the Company or
any of its Subsidiaries which permits, or after notice or lapse of time or both
would permit, revocation or termination thereof or would result in any other
material impairment of the rights of the holder of any of the Licenses.

        2.1.13.  INTELLECTUAL PROPERTY.

    Each of the Company and its Subsidiaries own or have a valid right to use
patents, trademarks, trade names, domain names, service marks, copyrights,
processes, formulae, methods, schedules, technology, know-how, computer software
programs and applications and other proprietary information ("IP RIGHTS") as are
necessary in connection with its respective businesses, except where the failure
to own or have a valid right to use such IP Rights, individually or in the
aggregate, would not have a Material Adverse Effect on the Company. Except as
would not, individually or in the aggregate, have a Material Adverse Effect on
the Company, neither the Company nor any of its Subsidiaries has, to the
knowledge of the Company Officers, infringed on any IP Rights of any third
party.

        2.1.14.  RIGHTS AGREEMENT.

    The Company has taken all necessary action so that (a) neither the execution
nor delivery of this Agreement, the performance by the Parties of their
respective obligations under this Agreement, as applicable, and the consummation
of the transactions completed by this Agreement, including the Merger, give rise
to or will give rise to a "Distribution Date," "Stock Acquisition Date" or
"Trigger Date," or result in Parent or any of its Affiliates becoming an
"Acquiring Person" (each as defined in the Rights Agreement), under the Rights
Agreement and (b) the rights issued pursuant to the Rights Agreement shall
expire immediately prior to the Effective Time.

        2.1.15.  CONTINUITY OF BUSINESS.

    Section 2.1.15 of the Company Disclosure Schedule sets forth, as of the date
of this Agreement, the ten largest clients (measured by fees and commissions
generated) of the Company and its Subsidiaries for the calendar year ended
December 31, 1999. To the knowledge of any of the Company Officers, no client of
the Company or any of its Subsidiaries identified pursuant to the preceding
sentence has advised the Company or any Subsidiary orally or in writing prior to
or as of the date of this Agreement that it (y) is terminating or considering
terminating the handling of its business by the Company or its Subsidiary, as
applicable, as a whole or (z) is planning to reduce its aggregate future
spending with the Company or any of its Subsidiaries in any material manner.

        2.1.16.  COMPLIANCE WITH LAWS.

    Neither the Company nor any of its Subsidiaries is in violation of, or has
violated, any applicable provisions of any Laws except for any violations that,
individually or in the aggregate, would not have a Material Adverse Effect on
the Company.

        2.1.17.  CERTAIN CONTRACTS.

    Section 2.1.17 of the Company Disclosure Schedule sets forth a list of
material Contracts with respect to partnerships, joint ventures, strategic
alliances, acquisitions or dispositions containing covenants of the Company or
any of its Subsidiaries not to compete (i) in any line of business, (ii) in any
industry or (iii) in any geographical area, in each of cases (i), (ii) and
(iii) that is material to the Company and its Subsidiaries taken as a whole.

                                      A-24
<PAGE>
        2.1.18.  TAX TREATMENT.

    Neither the Company nor any of its Subsidiaries has taken or agreed to take
any action or failed to take any action, and the Company Officers do not know of
any other action taken or failed to be taken by any other Person, which action
or failure would jeopardize the treatment of the Merger as a reorganization
within the meaning of Section 368 of the Code or the ability of counsel to
render the opinions described in Sections 4.2.3 and 4.3.3 of this Agreement.

        2.1.19.  TAX MATTERS.

    (a) All returns, declarations, reports, estimates, information returns and
statements required to be filed on or before the Effective Time under federal,
state, local or any foreign tax laws ("TAX RETURNS") with respect to Company or
any of its Subsidiaries, have been or will be timely filed, or requests for
extensions have been timely filed and have not expired, except where a failure
or failures to so timely file would not, individually or in the aggregate, have
a Material Adverse Effect on the Company.

    (b) Except as would not, individually or in the aggregate, have a Material
Adverse Effect on the Company, all material Tax Returns filed by the Company or
any of its Subsidiaries are complete and accurate in all material respects.

    (c) Except as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company, all Taxes (as defined
below) shown to be due and payable (without regard to whether those Taxes have
been assessed) on the Tax Returns of the Company or any of its Subsidiaries have
been paid or adequate reserves have been established for the satisfaction of
those Taxes. For purposes of this Agreement, "Taxes" shall mean all taxes,
charges, fees, levies or other assessments, however denominated, including,
without limitation, all net income, gross income, gross receipts, sales, use, ad
valorem, goods and services, capital, transfer, franchise, profits, license,
withholding, payroll, employment, employer health, excise, estimated, severance,
stamp, occupation, property or other taxes, custom duties, fees, assessments or
charges of any kind whatsoever, together with any interest and any penalties,
additions to tax or additional amounts imposed by any taxing authority whether
arising before, on or after the Effective Time.

    (d) There are no outstanding agreements or waivers extending the statutory
period of limitations applicable to federal, state, local or foreign income or
other Tax Returns required to be filed by or with respect to the Company or any
of its Subsidiaries, except as would not, individually or in the aggregate, have
a Material Adverse Effect on the Company.

    (e) Except as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company, neither the Company
nor any of its Subsidiaries is a party to any Tax sharing or similar agreement
or any agreement pursuant to which it or any of its Subsidiaries has an
obligation to indemnify any party (other than the Company or one of its
Subsidiaries) with respect to Taxes.

    (f) Except as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company, all Taxes due with
respect to completed and settled examinations or concluded litigation relating
to the Company or any of its Subsidiaries have been paid in full or adequate
reserves have been established for the payment thereof.

    (g) No material audit or examination or refund litigation with respect to
any Tax Return is pending as of the date of this Agreement.

    Section  2.2.  REPRESENTATIONS AND WARRANTIES OF PARENT.

    Except as disclosed in the Parent Reports (as defined in Section 2.2.5)
filed with the SEC prior to the date of this Agreement and except as set forth
in the corresponding sections of Parent's disclosure schedule to this Agreement
(the "PARENT DISCLOSURE SCHEDULE" and, together with the Company

                                      A-25
<PAGE>
Disclosure Schedule, the "DISCLOSURE SCHEDULES"), Parent represents and warrants
to the Company as follows:

        2.2.1.  ORGANIZATION, GOOD STANDING AND QUALIFICATION.

    Each of Parent and its Subsidiaries is duly organized, validly existing and
in good standing (with respect to jurisdictions that recognize the concept of
good standing) under the Laws of its jurisdiction of organization and has all
requisite corporate or similar power and authority, and all government licenses,
authorizations, consents and approvals required to own, operate and lease its
properties and assets and to carry on its business as presently conducted and is
duly qualified to do business and is in good standing (with respect to
jurisdictions that recognize the concept of good standing) in each jurisdiction
where the ownership, operation or leasing of its assets or properties or conduct
of its business requires this qualification, except where the failure to be so
organized, qualified or in good standing (with respect to jurisdictions that
recognize the concept of good standing), or to have this power or authority,
would not, individually or in the aggregate, have a Material Adverse Effect on
Parent. Parent has made available to the Company complete and correct copies of
its memorandum and articles of association and the Deposit Agreement, as amended
to the date of this Agreement. These memorandum and articles of association and
the Deposit Agreement, as so made available, are in full force and effect.

        2.2.2.  CAPITAL STRUCTURE.

    (a) As of the date of this Agreement, the authorized share capital of Parent
is L125,000,000 divided into 1,250,000,000 Parent Ordinary Shares. As of the
close of business on May 5, 2000, the issued share capital of Parent consisted
of 778,578,881 Parent Ordinary Shares. All of the outstanding Parent Ordinary
Shares are, and all of the Parent Ordinary Shares to be issued pursuant to the
Merger are, or will be when issued, duly authorized and validly issued and fully
paid or credited as fully paid. As of the date of this Agreement, Parent has no
Parent Ordinary Shares reserved for or otherwise subject to issuance, except
(i) no more than 30,000,000 Parent Ordinary Shares subject to issuance pursuant
to outstanding options to purchase Parent Ordinary Shares and (ii) a number of
Parent Ordinary Shares with a value upon issuance equivalent to no more than
$100 million, in the aggregate, which are issuable pursuant to "earn-out"
provisions of acquisition and similar agreements previously entered by Parent
and/or its Subsidiaries. As of the date of this Agreement, except as set forth
above, Parent does not have outstanding any bonds, debentures, notes or other
obligations the holders of which have the right to vote (or which are
convertible into or exercisable for securities having the right to vote) with
the shareholders of Parent on any matter.

    (b) Each of the outstanding shares of capital stock or other ownership
interests of each of Parent's Subsidiaries that constitute a Significant
Subsidiary is duly authorized, validly issued, fully paid and nonassessable and
owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, in
each case free and clear of any material lien, pledge, security interest, claim
or other encumbrance, except as would not have a Material Adverse Effect on
Parent. Except as set forth in Section 2.2.2(a), as of the date of this
Agreement, there are no preemptive or other outstanding rights, options,
warrants, conversion rights, stock appreciation rights, redemption rights,
repurchase rights, agreements, arrangements, calls, commitments or rights of any
kind which obligate Parent or any of its Material Subsidiaries to issue or sell
any shares of capital stock or other securities of Parent or any of its Material
Subsidiaries or any securities or obligations convertible or exchangeable into
or exercisable for, or giving any Person a right to subscribe for or acquire
from Parent or any of its Material Subsidiaries, any securities of Parent or any
of its Material Subsidiaries, and no securities or obligations evidencing any
rights are authorized, issued or outstanding. Except as set forth in
Section 2.2.2(a), as of the date of this Agreement, Parent does not have
outstanding any bonds, debentures, notes or other obligations the holders of
which have the right to vote (or which are convertible, exchangeable or

                                      A-26
<PAGE>
exercisable for or into securities having the right to vote) with the
shareholders of Parent on any matter.

        2.2.3.  CORPORATE AUTHORITY AND APPROVAL.


    Each of Parent and, to the extent applicable, Merger Sub Holding Co. and
Merger Sub has all requisite corporate power and authority to execute and
deliver this Agreement, to perform its obligations under this Agreement and to
consummate the Merger and the other transactions contemplated by this Agreement,
subject only in the case of Parent to the approval of the Parent Requisite
Resolutions and the Parent Director Resolutions (both as defined in
Section 3.5) by, on a show of hands, not less than a simple majority of the
holders of the outstanding Parent Ordinary Shares, present in person or, on a
poll, by the holders of not less than a simple majority of the votes attaching
to the Parent Ordinary Shares who vote in person or by proxy (the "PARENT
REQUISITE VOTES"). The execution and delivery by each of Parent and, to the
extent applicable, Merger Sub Holding Co. and Merger Sub, of this Agreement, the
performance by each of Parent, Merger Sub Holding Co. and Merger Sub of its
obligations under this Agreement and the consummation by Parent, Merger Sub
Holding Co. and Merger Sub of the Merger and the other transactions contemplated
by this Agreement have been duly authorized by all necessary corporate action on
the part of Parent, Merger Sub Holding Co. and Merger Sub, subject only in the
case of Parent to the approval of the Parent Requisite Resolutions and the
Parent Director Resolutions pursuant to the Parent Requisite Votes, and assuming
the due authorization, execution and delivery of this Agreement by the Company,
this Agreement constitutes the valid and binding agreement of Parent and, to the
extent applicable, Merger Sub Holding Co. and Merger Sub, enforceable against
Parent and, to the extent applicable, Merger Sub Holding Co. and Merger Sub in
accordance with its terms, subject to the Bankruptcy and Equity Exception. The
Board of Directors of Parent has approved this Agreement, the Merger and the
other transactions contemplated by this Agreement and has adopted a resolution,
subject to Section 3.3.5 of this Agreement, that the Parent's shareholders be
recommended to vote in favor of the adoption of the Parent Requisite Resolutions
and the Parent Director Resolutions at the Parent Shareholders Meeting (as
defined in Section 3.5).


        2.2.4.  GOVERNMENTAL FILINGS, NO VIOLATIONS.


           2.2.4.1.  Other than the necessary filings, notices, approvals,
       confirmations, consents, declarations and/or decisions (A) pursuant to
       Sections 1.1.2 and 3.4, (B) under the HSR Act, the Exchange Act and the
       Securities Act, (C) to comply with the rules and regulations of the U.K.
       Listing Authority ("UKLA"), the LSE, the NYSE and the National
       Association of Securities Dealers Automated Quotation System National
       Market (the "NASDAQ") or any other stock exchanges on which securities of
       the Company or Parent or any of its Subsidiaries are listed or traded,
       (D) with and from the European Commission, in accordance with the
       Regulation, (E) with and from the competent authority of any member state
       of the European Union to which any of the transactions contemplated by
       this Agreement is referred pursuant to under Article 9 of the
       Regulation), (F) or under other antitrust laws, competition or other
       similar rules, regulations and judicial doctrines of jurisdictions
       outside of the United States and the European Union and (G) with and from
       H.M. Treasury pursuant to Section 765 of Income and Corporation Tax Act
       1988 (these filings, notices, approvals, confirmations, consents,
       declarations and/or decisions to be made, given or obtained by Parent
       being the "PARENT REQUIRED CONSENTS"), no filings, notices, declarations
       and/or decisions are required to be made by Parent or any of its
       Subsidiaries with, nor are any approvals or other confirmations or
       consents required to be obtained by Parent or any of its Subsidiaries
       from, any Governmental Entity, in connection with the execution and
       delivery by Parent and, to the extent applicable, Merger Sub Holding Co.
       and Merger Sub of this Agreement, the performance by Parent, Merger Sub
       Holding Co. and Merger Sub of their obligations under this Agreement and
       the consummation by Parent, Merger Sub Holding Co. and Merger Sub of the
       Merger and the other transactions contemplated by this Agreement, except
       those the


                                      A-27
<PAGE>

       failure of which to make, give or obtain, individually or in the
       aggregate, would not have a Material Adverse Effect on Parent or prevent,
       materially delay or materially impair Parent's, Merger Sub Holding Co.'s
       or Merger Sub's ability to consummate the Merger or any of the other
       transactions contemplated by this Agreement.



           2.2.4.2.  The execution and delivery of this Agreement by Parent and,
       to the extent applicable, Merger Sub Holding Co. and Merger Sub do not,
       and the performance of Parent and, to the extent applicable, Merger Sub
       Holding Co. and Merger Sub of their obligations under this Agreement and
       the consummation by Parent, Merger Sub Holding Co. and Merger Sub of the
       Merger and the other transactions contemplated by this Agreement
       (including the issuance of Parent Depositary Shares, the issuance of
       Parent Ordinary Shares to the Nominee and the deposit of Parent Ordinary
       Shares by the Nominee with the Depositary against issuance of Parent
       Depositary Shares in accordance with the Deposit Agreement) will not,
       constitute or result in (A) a breach or violation of, or a default under
       Parent's memorandum or articles of association or the certificate of
       incorporation and by-laws of each of Merger Sub Holding Co. and Merger
       Sub (each as amended from time to time), (B) subject to making, giving or
       obtaining all necessary filings, notices, approvals, confirmations,
       declarations and/or decisions specified by Section 2.2.4.1, a breach or
       violation of, or a default under, the acceleration of any obligations or
       the creation of a lien, pledge, security interest, right of purchase,
       sale or termination or other encumbrance on the assets of Parent or any
       of its Subsidiaries (with or without notice, lapse of time or both)
       pursuant to any Contract binding upon Parent or any of its Subsidiaries
       or any Law or governmental or non-governmental permit or license to which
       Parent or any of its Subsidiaries is subject, or (C) any change in the
       rights or obligations of any party under any of these Contracts except,
       in the case of clause (B) or (C) above, for any breach, violation,
       default, acceleration, creation or change that, individually or in the
       aggregate, would not have a Material Adverse Effect on Parent or prevent,
       materially delay or materially impair Parent's, Merger Sub Holding Co.'s
       or Merger Sub's ability to consummate the Merger or any of the other
       transactions contemplated by this Agreement.


        2.2.5.  REPORTS; FINANCIAL STATEMENTS.

    Since January 1, 1997, Parent has filed with the SEC all material forms,
statements, reports and documents (including all exhibits, post-effective
amendments and supplements thereto) required to be filed by it under each of the
Securities Act, the Exchange Act and the respective rules and regulations
thereunder (collectively the "PARENT REPORTS" and, together with the Company
Reports, the "REPORTS"). As of their respective dates, the Parent Reports did
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they were made, not
misleading. Each of the consolidated balance sheets of Parent and its
subsidiaries included in or incorporated by reference into the Parent Reports
(including the related notes and schedules) presents fairly, in all material
respects, the financial position of Parent and its subsidiaries as of its date,
and each of the related consolidated statements of income, changes in
shareowners' funds and cash flows included in or incorporated by reference into
the Parent Reports (including any related notes and schedules) presents fairly,
in all material respects, the results of operations and cash flows of Parent and
its subsidiaries for the periods set forth therein (subject, in the case of
unaudited statements, to notes and normal year-end audit adjustments that will
not be material in amount or effect), in each case in conformity with generally
accepted accounting principles in the United Kingdom ("U.K. GAAP") consistently
applied during the periods involved except as may be noted therein. The related
notes reconciling to U.S. GAAP the consolidated financial statements of Parent,
or any portion thereof, as applicable, comply in all material respects with the
requirements of the SEC applicable to this reconciliation. The audited
consolidated statement of income of Parent and its subsidiaries for the year
ended December 31, 1999 to be included in Parent's Annual Report on Form 20-F
for that year will be consistent with the unaudited consolidated statement of
income of Parent and its subsidiaries included in Parent's press release of
February 17, 2000.

                                      A-28
<PAGE>
        2.2.6.  ABSENCE OF CERTAIN CHANGES.

    Except as expressly contemplated by this Agreement, since December 31, 1999,
Parent and its Subsidiaries have conducted their respective businesses only in,
and have not engaged in any material transaction other than according to, the
ordinary and usual course of such businesses, and since December 31, 1999 there
has not been (i) any change in the financial condition, properties, business or
results of operations of Parent and its Subsidiaries except those changes that,
individually or in the aggregate, have not had and would not have a Material
Adverse Effect on Parent; (ii) any declaration, setting aside or payment of any
dividend or other distribution in cash, stock or property in respect of Parent's
capital stock, except for regular cash dividends in the ordinary course, or
(iii) any change by Parent in accounting principles, practices or methods,
except as required by changes in U.K. GAAP or U.S. GAAP, as applicable.

        2.2.7.  LITIGATION AND LIABILITIES.


    (a) There are no civil, criminal or administrative actions, suits, claims,
hearings, investigations or proceedings pending or, to the knowledge of Parent's
executive directors (the "PARENT EXECUTIVE DIRECTORS"), threatened against
Parent or any of its Subsidiaries, except for those that, individually or in the
aggregate, would not have a Material Adverse Effect on Parent or prevent,
materially delay or materially impair Parent's, Merger Sub Holding Co.'s or
Merger Sub's ability to consummate the Merger or any of the other transactions
contemplated by this Agreement.


    (b) Neither Parent nor any of its Subsidiaries had at December 31, 1999, or
has incurred since that date and as of the date of this Agreement, any
liabilities or obligations (whether absolute, accrued, contingent or otherwise)
of any nature, except (i) liabilities, obligations or contingencies (1) which
are accrued or reserved against in the most recent consolidated financial
statements of Parent as of December 31, 1999 or reflected in the notes thereto,
or (2) which were incurred after December 31, 1999 in the ordinary course of
business and consistent with past practices, (ii) liabilities, obligations or
contingencies which (1) would not, individually or in the aggregate, have a
Material Adverse Effect on Parent, (2) have been discharged or paid in full
prior to the date of this Agreement in the ordinary course of business, or
(3) are not required to be reflected in the consolidated financial statements of
Parent and it Subsidiaries prepared in accordance with U.K. GAAP consistently
applied.

        2.2.8.  TAKEOVER STATUTES.

    The Board of Directors of the Parent has taken or will take all appropriate
and necessary action to render any potentially applicable Takeover Statute
inapplicable to this Agreement, the Merger and the other transactions
contemplated by this Agreement.

        2.2.9.  BROKERS AND FINDERS.

    Neither Parent nor any of its Subsidiaries, officers, directors or employees
has employed any broker or finder or incurred any liability for any brokerage
fees, commissions or finders' fees in connection with the execution and delivery
of this Agreement, the Merger or any of the other transactions contemplated by
this Agreement, except that Parent has employed Goldman Sachs International and
Merrill Lynch, Pierce, Fenner & Smith, Incorporated, as its financial advisors.

        2.2.10.  EMPLOYEE BENEFIT PLANS.

           2.2.10.1.  Parent maintains the Executive Stock Option Plan, the
       Performance Share Plan, the Long-Term Incentive Plan, and the Worldwide
       Ownership Plan (collectively, "PARENT EMPLOYEE PLANS") in which
       directors, former directors, employees and former employees of Parent or
       any of its Subsidiaries (collectively, "PARENT EMPLOYEES") may
       participate subject to their terms and the determinations of the
       compensation committee of Parent, and the Leadership Equity Acquisition
       Plan, in which a small number of senior executives of Parent and certain
       Subsidiaries may participate subject to their terms and the
       determinations of the

                                      A-29
<PAGE>
       compensation committee of Parent (collectively, "PARENT PLANS"). All
       Parent Plans have been adopted and administered in conformity with all
       applicable Laws, and subject to all necessary consents or approvals of
       Parent's shareholders. True and complete copies of all Parent Employee
       Plans, and all amendments thereto, have been provided or made available
       to the Company.

           2.2.10.2.  Each material Parent employee benefit and welfare plan
       maintained in the United States or the United Kingdom has been
       established and maintained in compliance with its terms and with the
       requirements prescribed by any and all statutes, orders, rules and
       regulations (including but not limited to ERISA and the Code) which are
       applicable to that plan, except where failure to so comply would not,
       individually or in the aggregate, have a Material Adverse Effect on
       Parent. Except as would not, individually or in the aggregate, have a
       Material Adverse Effect on Parent, neither Parent, any of its
       Subsidiaries nor any ERISA Affiliate contributes to, or is or has ever
       been required to contribute to, any "multiemployer plan" as defined in
       Section 3(37) of ERISA. Except as would not, individually or in the
       aggregate, have a Material Adverse Effect on Parent, in the six years
       prior to the date of this Agreement, (i) neither Parent, any of its
       Subsidiaries nor any of its ERISA Affiliates has incurred a liability,
       contingent or otherwise, under Title IV of ERISA that has not been
       satisfied in full, and (ii) to the knowledge of Parent's Executive
       Directors no condition exists that presents a risk to Parent, any of its
       Subsidiaries or any of its ERISA Affiliates of incurring any liability
       other than liability for premiums due the Pension Benefit Guaranty
       Corporation (which premiums have been paid when due). Except as would
       not, individually or in the aggregate, have a Material Adverse Effect on
       Parent, all contributions required to be made under the terms of any
       employee benefit plan subject to ERISA that is maintained, sponsored,
       contributed to or required to be contributed to by Parent or its
       Subsidiaries (the "PARENT ERISA PLANS") have been made, and where
       applicable to a Parent ERISA Plan, Parent, its Subsidiaries and its ERISA
       Affiliates have complied with the minimum funding requirements under
       Section 412 of the Code and Section 302 of ERISA with respect to each
       Parent ERISA Plan. Each Parent ERISA Plan which is intended to be
       qualified under Section 401(a) of the Code is so qualified and has been
       so qualified during the period from its adoption to date, and each trust
       forming a part thereof is exempt from federal income tax pursuant to
       Section 501(a) of the Code and, to the knowledge of the Parent Executive
       Directors, no circumstances exist which could reasonably be expected to
       adversely affect this qualification or exemption.

           2.2.10.3.  Except as would not, individually or in the aggregate,
       have a Material Adverse Effect on Parent, neither Parent, any of its
       Subsidiaries nor any of its ERISA Affiliates (i) maintains or contributes
       to any Parent ERISA Plan which provides, or has any liability to provide,
       life insurance, medical, severance or other employee welfare benefits to
       any Parent Employee upon his retirement or termination of employment,
       except as may be required by Section 4980B of the Code or (ii) has ever
       represented, promised or contracted (whether in oral or written form) to
       any Parent Employee (either individually or to the Parent Employees as a
       group) that the Parent Employee(s) would be provided with life insurance,
       medical, severance or other employee welfare benefits upon their
       retirement or termination of employment, except to the extent required by
       Section 4980B of the Code.

           2.2.10.4.  The execution, delivery of and performance by the Parties
       of their obligations under and the consummation of the transactions
       contemplated by this Agreement will not (either alone or upon the
       occurrence of any additional or subsequent events) (i) constitute an
       event under any material Parent employee plan that covers Parent
       Employees employed by or providing services to Parent or any of its
       Subsidiaries in the United States or the United Kingdom (a "US/UK PARENT
       EMPLOYEE PLAN"), trust or loan that will or may result in any

                                      A-30
<PAGE>
       payment (whether of severance pay or otherwise), acceleration,
       forgiveness of indebtedness, vesting, distribution, increase in benefits
       or obligation to fund benefits with respect to any Parent Employee, or
       (ii) result in the triggering or imposition of any restrictions or
       limitations on the right of Parent or any of its Subsidiaries to amend or
       terminate any material US/UK Parent Employee Plan and receive the full
       amount of any excess assets remaining or resulting from this amendment or
       termination, subject to applicable taxes. No payment or benefit which
       will or may be made by Parent, any of the Subsidiaries of the Company,
       the Company or any of their respective affiliates with respect to any
       Parent Employee will be characterized as an "excess parachute payment"
       within the meaning of Section 280G(b)(1) of the Code. Except as would not
       have a Material Adverse Effect on Parent, there is no commitment covering
       any Parent Employee that, individually or in the aggregate, would
       reasonably be expected to give rise to the payment of any amount that
       would result in a material loss of tax deductions pursuant to
       Section 162(m) of the Code.

           2.2.10.5.  There has been no amendment to, written interpretation or
       announcement (whether or not written) by Parent, any of its Subsidiaries
       or any of its Affiliates relating to, or change in employee participation
       or coverage under, any material US/UK Parent Employee Plan which would
       increase the expense of maintaining that US/UK Parent Employee Plan above
       the level of the expense incurred in respect thereof for the 12 months
       ended on December 31, 1999, except as would not, individually or in the
       aggregate, have a Material Adverse Effect on Parent.

           2.2.10.6.  Except as would not, individually or in the aggregate,
       have a Material Adverse Effect on Parent, all Parent ERISA Plans
       (i) have been maintained in accordance with all applicable requirements;
       (ii) if they are intended to qualify for special tax treatment meet all
       requirements for that treatment; and (iii) if they are intended to be
       funded and/or book-reserved are fully funded and/or book reserved, as
       appropriate, based upon reasonable actuarial assumptions.

        2.2.11.  LABOR AND EMPLOYMENT MATTERS.

    Except as would not, individually or in the aggregate, have a Material
Adverse Effect on Parent, Parent and each Subsidiary (i) is in compliance with
all applicable Laws respecting employment, employment practices, labor, terms
and conditions of employment and wages and hours, in each case, with respect to
Parent Employees; and (ii) is not liable for any payment to any trust or other
fund or to any Governmental Entity, with respect to unemployment compensation
benefits, social security or other benefits for Parent Employees. No work
stoppage or labor strike against Parent or any Subsidiary by Parent Employees is
pending or, to the knowledge of the Parent Executive Directors, threatened.

        2.2.12.  LICENSES.

    Each of Parent and its Subsidiaries has all material Licenses from all
Governmental Entities having jurisdiction over any part of its business
necessary for the conduct of any of its activities and all such material
Licenses are valid and in full force and effect, except for any Licenses the
failure of which to have or to be in full force and effect would not,
individually or in the aggregate, have a Material Adverse Effect on Parent.
Except as would not, individually or in the aggregate, have a Material Adverse
Effect on Parent, no event has occurred or other fact exists with respect to any
of the Licenses held by Parent or any of its Subsidiaries which permits, or
after notice or lapse of time or both would permit, revocation or termination
thereof or would result in any other material impairment of the rights of the
holder of any of the Licenses.

        2.2.13.  INTELLECTUAL PROPERTY.

    Each of Parent and its Subsidiaries own or have a valid right to use IP
Rights as are necessary in connection with its respective businesses, except
where the failure to own or have a valid right to use

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<PAGE>
such IP Rights, individually or in the aggregate, would not have a Material
Adverse Effect on Parent. Except as would not, individually or in the aggregate,
have a Material Adverse Effect on Parent, neither Parent nor any of its
Subsidiaries has infringed on any IP Rights of any third party.

        2.2.14.  CONTINUITY OF BUSINESS.

    Section 2.2.14 of the Parent Disclosure Schedule sets forth, as of the date
of this Agreement, the ten largest clients (measured by fees and commissions
generated) of Parent and its Subsidiaries for the calendar year ended
December 31, 1999. No client of Parent or any of its Subsidiaries identified
pursuant to the preceding sentence has advised Parent or any of its Subsidiaries
orally or in writing prior to or as of the date of this Agreement that it
(y) is terminating or considering terminating the handling of its business by
Parent or its Subsidiary, as applicable, as a whole or (z) is planning to reduce
its aggregate future spending with Parent or any of its Subsidiaries in any
material manner.

        2.2.15.  COMPLIANCE WITH LAWS.

    Neither Parent nor any of its Subsidiaries is in violation of, or has
violated, any applicable provisions of any Laws except for any violations that,
individually or in the aggregate, would not have a Material Adverse Effect on
Parent.

        2.2.16.  CERTAIN CONTRACTS.

    Section 2.2.16 of the Parent Disclosure Schedule sets forth a list of
material Contracts with respect to partnerships, joint ventures, strategic
alliances, acquisitions or dispositions containing covenants of Parent or any of
its Subsidiaries not to compete (i) in any line of business, (ii) in any
industry or (iii) in any geographical area, in each of cases (i), (ii) and
(iii) that is material to Parent and its Subsidiaries taken as a whole.

        2.2.17.  TAX TREATMENT.

    Neither Parent nor any of its Subsidiaries has taken or agreed to take any
action or failed to take any action, and the Parent Executive Directors do not
know of any action taken or failed to be taken by any other Person, which action
or failure would jeopardize the treatment of the Merger as a reorganization
within the meaning of Section 368 of the Code or the ability of counsel to
render the opinions described in Sections 4.2.3 and 4.3.3 of this Agreement.


        2.2.18.  MERGER SUB HOLDING CO.'S AND MERGER SUB'S OPERATIONS.



    Each of Merger Sub Holding Co. and Merger Sub was formed solely for the
purpose of engaging in the transactions contemplated by this Agreement and has
not (i) engaged in any business activities, (ii) conducted any operations or
(iii) incurred any liabilities other than pursuant to this Agreement and in
connection with the Merger and other transactions contemplated by this
Agreement.


        2.2.19.  TAX MATTERS.

    (a) All Tax Returns required to be filed on or before the Effective Time
under federal, state, local or any foreign tax laws with respect to Parent or
any of its Subsidiaries, have been or will be timely filed, or requests for
extensions have been timely filed and have not expired, except where a failure
or failures to so timely file would not, individually or in the aggregate, be
expected to have a Material Adverse Effect on Parent.

    (b) Except as would not, individually or in the aggregate, have a Material
Adverse Effect on Parent, all material Tax Returns filed by Parent or any of its
Subsidiaries are complete and accurate in all material respects.

    (c) Except as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on Parent, all Taxes shown to be due
and payable (without regard to whether

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<PAGE>
those Taxes have been assessed) on the Tax Returns of Parent or any of its
Subsidiaries have been paid or adequate reserves have been established for the
satisfaction of those Taxes.

    (d) There are no outstanding agreements or waivers extending the statutory
period of limitations applicable to federal, state, local or foreign income or
other Tax Returns required to be filed by or with respect to Parent or any of
its Subsidiaries, except as would not, individually or in the aggregate, have a
Material Adverse Effect on Parent.

    (e) Except as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on Parent, neither Parent nor any of
its Subsidiaries is a party to any Tax sharing or similar agreement or any
agreement pursuant to which it or any of its Subsidiaries has an obligation to
indemnify any party (other than Parent or one of its Subsidiaries) with respect
to Taxes.

    (f) Except as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on Parent, all Taxes due with respect
to completed and settled examinations or concluded litigation relating to Parent
or any of its Subsidiaries have been paid in full or adequate reserves have been
established for the payment thereof.

    (g) No material audit or examination or refund litigation with respect to
any Tax Return is pending as of the date of this Agreement.

                                  ARTICLE III
                                   COVENANTS

    Section 3.1.  INTERIM OPERATIONS OF THE COMPANY.

    During the period from the date of this Agreement until the Effective Time,
the Company shall, and shall cause each of its Subsidiaries to (unless the
Parent shall otherwise approve in writing and except as otherwise expressly
contemplated by or provided in this Agreement or as set forth in the
corresponding section of the Company Disclosure Schedule):

        3.1.1.  conduct its businesses in the ordinary and usual course in all
    material respects and, to the extent consistent therewith, use commercially
    reasonable efforts to preserve its business organization intact and maintain
    its existing relations and goodwill with employees, customers, clients,
    suppliers, creditors, lessors and business associates;

        3.1.2.  not (i) amend the certificate of incorporation or by-laws of the
    Company; (ii) split, combine, subdivide or reclassify any of the outstanding
    shares of capital stock of the Company; or (iii) adopt a plan of complete or
    partial liquidation;

        3.1.3.  with respect to the Company and its Material Subsidiaries
    (i) subject to Section 3.11.2, not declare, set aside or pay any dividend or
    distribution payable in cash, stock or property in respect of any of its
    capital stock or any securities convertible, exchangeable or exercisable for
    or into shares of its capital stock, other than (w) in respect of the
    Company Common Shares, regular quarterly cash dividends of no more than
    $.025 per Company Common Share, (x) in respect of the Company Money Market
    Preferred Shares, dividends required pursuant to the terms thereof, (y) in
    respect of the Company Convertible Notes, interest payments required to be
    made under the terms thereof, and (z) dividends paid to the Company or
    wholly owned Subsidiaries of the Company; and (ii) not repurchase, redeem or
    otherwise acquire (except for repurchases, redemptions or acquisitions
    (A) required by the terms of its capital stock or securities outstanding on
    the date of this Agreement, (B) required by the respective terms as of the
    date of this Agreement of any Company Stock Plans, or (C) repurchases of
    Company Money Market Preferred Shares for not more than the Preferred
    Consideration per share) any shares of its capital stock, or any securities
    convertible, exchangeable or exercisable for or into any shares of its
    capital stock;

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<PAGE>
        3.1.4.  except as permitted by Section 3.1.5, not (i) issue, sell,
    pledge, dispose of or encumber any shares of, or securities convertible into
    or exchangeable or exercisable for, or rights, options, warrants, conversion
    rights, stock appreciation rights, redemption rights, repurchase rights,
    agreements, arrangements, calls, commitments or rights of any kind to
    acquire, its capital stock (other than (x) grants to new hires and to
    employees who become Company Employees as a result of acquisitions or other
    business combinations permitted by this Agreement of Company Stock Options
    to purchase up to 800,000 Company Common Shares, in the aggregate; PROVIDED
    that those Company Stock Options are granted under Company Stock Plans in
    effect as of the date of this Agreement in a manner consistent with past
    practice and shall not vest or become exercisable as a result of this
    Agreement or the consummation of the transactions contemplated by this
    Agreement, (y) Company Common Shares issuable pursuant to Company Stock
    Options outstanding on the date of this Agreement under the Company Stock
    Plans or granted after the date of this Agreement in accordance with the
    terms of this Agreement, or (z) upon conversion of the Company Convertible
    Notes outstanding as of the date of this Agreement); (ii) incur or modify in
    any material respect (x) any material indebtedness or any of the terms of
    any material indebtedness or (y) any other liability except in the ordinary
    and usual course of business and except for any judgment issued against the
    Company or any of its Subsidiaries or any other liability, the incurrence of
    which is not within the control of the Company or any of its Subsidiaries;
    (iii) enter into any merger, reorganization, consolidation or share
    exchange; (iv) sell, lease, license to any Person(s) or otherwise dispose of
    any business or material assets or any other assets, outside the ordinary
    and usual course of business (by merger, consolidation, stock or asset
    disposition or otherwise); or (v) purchase, lease or license from any Person
    or otherwise acquire any assets (outside of the ordinary and usual course of
    business) and/or business(s) (by merger, consolidation, stock or asset
    acquisition or otherwise) (any of these transactions an "ACQUISITION
    TRANSACTION"), or enter into any agreement with respect to any Acquisition
    Transaction; PROVIDED that the Company and its Subsidiaries may enter into
    or consummate any Acquisition Transaction so long as (1) no individual
    Acquisition Transaction (together with all related transactions) entered
    into after the date of this Agreement involves payment, delivery of
    consideration or an agreement to deliver any future consideration of a value
    or an estimated value of more than $50 million, (2) all Acquisition
    Transactions entered into after the date of this Agreement do not involve
    payment, delivery of consideration or an agreement to deliver any future
    consideration of a value or an estimated value of more than $100 million, in
    the aggregate, and (3) Parent is given notice no later than concurrently
    with the entry into any agreement with respect to an Acquisition Transaction
    and, in any event, before any public disclosure regarding an Acquisition
    Transaction is made by the Company any of its Subsidiaries or by any other
    party (if any Company Officer is aware that any public disclosure is to be
    made by the other party);

        3.1.5.  not (i) terminate, establish, adopt, enter into, implement, make
    any new grants or awards of equity-based compensation or other benefits
    under, amend or otherwise modify any compensation or benefit plan or
    outstanding award thereunder or agreement or increase the salary, wage,
    bonus or other compensation of any directors, officers or employees except
    (1) for increases in salary, wages or non-equity bonus compensation or
    non-equity benefits in the ordinary and usual course of business consistent
    with past practice; and (2) as permitted in accordance with Section 3.1.4
    and pursuant to the agreements listed in Section 3.1.5 of the Company
    Disclosure Schedule; and (3) any immaterial amendment or modification to any
    compensation or benefit plan, (ii) cause the acceleration of the time of
    payment or vesting, or trigger any payment or funding, of any compensation,
    benefits or awards, under any Company Employment Agreement, any Company
    Employee Plan or any Company Foreign Plan, except in each case as required
    by the applicable Company Employee Plan, Company Foreign Plan or Company
    Employment Agreement pursuant to the terms in effect as of the date of this
    Agreement, (iii) settle the exercise of stock options in other than Company
    Common Shares or (iv) terminate Without Cause (as defined in the No-Sale

                                      A-34
<PAGE>
    Agreement) the employment of any employee of the Company or any of its
    Subsidiaries who is a party to a No-Sale Agreement or take any action that
    would permit any of those employees to terminate his or her employment for
    Good Reason (as defined in the Employment Agreement), except if the Board of
    Directors of the Company determines in good faith that any such termination
    or action is required for it to comply with its fiduciary duties under
    applicable law;

        3.1.6.  subject to Section 3.6.1(b), not take any action or omit to take
    any action which to the knowledge of the Company Officers would prevent,
    materially delay or materially impede the consummation of the Merger or the
    other transactions contemplated by this Agreement, including any action or
    omission that would cause the Merger to fail to qualify as a reorganization
    under Section 368 of the Code;

        3.1.7.  timely satisfy, or cause to be timely satisfied, all applicable
    Tax reporting and filing requirements contained in the Code with respect to
    the transactions contemplated by this Agreement, including, without
    limitation, the reporting requirements contained in United States Treasury
    Regulation Section 1.367(a)-3(c)(6);

        3.1.8.  not (w) take any action to amend the Rights Agreement,
    (x) redeem the rights subject to the Rights Agreement or (y) take any action
    to exempt any third party from the Rights Agreement;

        3.1.9.  not waive any of its rights under, or release any other party
    from, amend, or fail to enforce its rights under, any provision of any
    standstill agreement;

        3.1.10.  except as permitted by Section 3.1.4, not enter into, or
    modify, amend the terms of, or terminate any material joint venture,
    partnership or similar arrangement;

        3.1.11.  not (i) change its (w) Tax accounting policies, practices or
    methods, or (x) Tax elections; and (ii) settle any material audits,
    examinations or litigation with respect to Taxes;

        3.1.12.  not take any action to cause the Company Common Shares to cease
    to be listed on the NYSE; or

        3.1.13.  authorize or enter into an agreement to do any of the
    foregoing.

    Section 3.2.  INTERIM OPERATIONS OF PARENT.

    During the period from the date of this Agreement until the Effective Time,
Parent shall, and shall cause each of its Subsidiaries to, as applicable (unless
the Company shall otherwise approve in writing and except as otherwise expressly
contemplated by or provided in this Agreement or as set forth in the
corresponding section of the Parent Disclosure Schedule):

        3.2.1.  conduct its business in the ordinary and usual course in all
    material respects and, to the extent consistent therewith, use commercially
    reasonable efforts to preserve its business organization intact and maintain
    its existing relations and goodwill with customers, suppliers, creditors,
    lessors, employees and business associates;

        3.2.2.  not (i) amend the memorandum and articles of association of
    Parent or the Deposit Agreement; (ii) split, combine, subsidize or
    reclassify the outstanding share capital of Parent or (iii) adopt a plan of
    complete or partial liquidation;

        3.2.3.  (i) subject to Section 3.11.2, not declare, set aside or pay any
    dividend or distribution payable in cash, stock or property in respect of
    any of its capital stock, other than regular interim and final annual cash
    dividends, consistent with past practice (including increases consistent
    with past practice); or (ii) repurchase, redeem or otherwise acquire (except
    for repurchases, redemptions or acquisitions (A) required by the terms of
    its capital stock or securities outstanding on the date of this Agreement,
    (B) required by the terms as of the date of this Agreement of, or

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<PAGE>
    in the ordinary course of the operation of, any Parent employee stock option
    or other employee plan or scheme or (C) otherwise in the ordinary course)
    any shares of its capital stock or any securities convertible, exchangeable
    or exercisable for or into shares of its capital stock;

        3.2.4.  subject to Section 3.6.1(b), not take any action or omit to take
    any action (including, without limitation, acquisitions or dispositions, or
    waiving any of its rights under, releasing any other party from, amending,
    or failing to enforce its rights under, any provision of any standstill
    agreement) which to the knowledge of the Parent Executive Directors would
    prevent, materially delay or materially impede the consummation of the
    Merger or the other transactions contemplated by this Agreement, including
    any action or omission that would cause the Merger to fail to qualify as a
    reorganization under Section 368 of the Code;

        3.2.5.  timely satisfy, or cause to be timely satisfied, all applicable
    Tax reporting and filing requirements contained in the Code with respect to
    the transactions contemplated by this Agreement, including, without
    limitation, the reporting requirements contained in United States Treasury
    Regulation Section 1.367(a)-3(c)(6);

        3.2.6.  not take any action to cause the Parent Ordinary Shares to cease
    to be listed on the LSE or the Parent Depositary Shares evidenced by Parent
    ADRs to cease to be eligible for quotation on NASDAQ; or

        3.2.7.  authorize or enter into an agreement to do any of the foregoing.

    Section 3.3.  ACQUISITION PROPOSALS.

        3.3.1.  Each of the Company and Parent agrees that neither it nor any of
    its Subsidiaries nor any of its or any of its Subsidiaries' officers or
    directors shall, and each of the Company and Parent shall direct and use its
    best efforts to cause its and its Subsidiaries' officers, directors,
    employees, investment bankers, attorneys, accountants, financial advisors,
    agents or other representatives (collectively, with respect to each of the
    Company and Parent, the "REPRESENTATIVES") not to, directly or indirectly,
    initiate, solicit, encourage or otherwise facilitate any inquiries by any
    Person not a Party or the making of any proposal or offer by any Person not
    a Party with respect to, a merger, reorganization, share exchange,
    consolidation or similar transaction involving the Company or Parent, as
    applicable, or any purchase of, or offer to purchase, all or a substantial
    portion of the equity securities of the Company or Parent, as applicable, or
    of all or a substantial portion of the assets of the Company or Parent, as
    applicable, and its Subsidiaries taken as a whole (any such proposal or
    offer with respect to the Company or Parent, as applicable, whether made
    prior to or after termination of this Agreement, being referred to with
    respect to that Party as an "ACQUISITION PROPOSAL"), except, in each case,
    in connection with (and the term "Acquisition Proposal" shall not include) a
    proposal for, or with respect to, a transaction that is permitted under
    Sections 3.1 or 3.2, as applicable, if immediately after the consummation of
    such transaction the stockholders or shareholders of the Company or Parent,
    as applicable, immediately prior to the consummation of such transaction
    continue to hold at least a majority of the outstanding shares of the entity
    surviving or resulting from that transaction. Each of the Company and Parent
    further agrees that neither it nor any of its Subsidiaries nor any of its or
    any of its Subsidiaries' officers or directors will, and that it will direct
    and use its best efforts to cause its Representatives not to, directly or
    indirectly, engage in any discussions or negotiations with or provide any
    confidential information or data to any Person not a Party relating to an
    Acquisition Proposal or engage in any negotiations concerning an Acquisition
    Proposal, or otherwise facilitate any effort or attempt to make or implement
    an Acquisition Proposal. Notwithstanding the foregoing, in the event that
    (i) Parent or the Company shall receive an Acquisition Proposal and has not
    at any time violated, in any material respect, the terms of this
    Section 3.3.1, (ii) the Board of Directors of Parent or the Company, as
    applicable, determines in its good faith judgment after receiving the advice
    of its financial advisor that this Acquisition Proposal is reasonably likely
    to

                                      A-36
<PAGE>
    result in a Superior Proposal and (iii) after giving the other Party at
    least 24 hours notice of its intention to do so, the Party that received the
    Acquisition Proposal may, in the case of the Company, prior to the receipt
    of the Company Requisite Vote, and in the case of Parent, prior to receipt
    of the Parent Requisite Vote, engage in discussions and/or negotiations with
    the Person that made the Acquisition Proposal and/or furnish confidential
    information and data to that Person pursuant to a customary confidentiality
    agreement containing terms (other than any standstill or similar terms) no
    less restrictive than those set forth in the Confidentiality Agreement,
    dated as of February 13, 2000, between the Company and Parent (the
    "CONFIDENTIALITY AGREEMENT"); PROVIDED that a copy of all written
    information furnished to the Person that made the Acquisition Proposal is
    promptly provided to the other Party to this Agreement. For purposes of this
    Agreement, a "Superior Proposal" means in respect of the Company or Parent,
    as applicable, any bona fide written Acquisition Proposal that (A) is no
    longer conditioned upon or subject to any due diligence investigation of the
    Company or Parent, as applicable, and its businesses by the Person making
    the Acquisition Proposal and (B) the Board of Directors of the Company or
    Parent, as applicable, determines in its good faith judgment (x) after
    consultation with its financial advisors (and taking into account all the
    terms and conditions of the Acquisition Proposal deemed relevant by that
    Board of Directors, including any break-up fees, expense reimbursement
    provisions, conditions to consummation, and the ability of the Person making
    the Acquisition Proposal to obtain any financing necessary to effect the
    transactions contemplated by the Acquisition Proposal), to be more favorable
    from a financial point of view to its shareholders or stockholders, as
    applicable, than the Merger, and (y) taking into account all legal,
    financial, regulatory and other aspects of the Acquisition Proposal, to
    constitute a transaction that is reasonably likely to be consummated on the
    terms set forth in the Acquisition Proposal.

        3.3.2.  Each of the Company and Parent agrees that it will immediately
    cease and cause to be terminated any existing activities, discussions or
    negotiations with any Person conducted heretofore with respect to any
    Acquisition Proposal. Each of the Company and Parent also agrees that, if it
    has not already done so, it will promptly request, to the extent it has a
    contractual right to do so, that each Person, if any, that has heretofore
    executed a confidentiality agreement within the 12 months prior to the date
    of this Agreement in connection with its consideration of any Acquisition
    Proposal to return or destroy all confidential information or data
    heretofore furnished to any Person by or on behalf of it or any of its
    Subsidiaries.

        3.3.3.  Each of the Company and Parent agrees that it will take the
    necessary steps promptly to inform its Subsidiaries and its Subsidiaries'
    Representatives of the obligations undertaken in this Section 3.3. Each of
    the Company and Parent agrees that it will promptly (and in no event later
    than 24 hours after receipt of an Acquisition Proposal) notify (which notice
    shall be provided orally and in writing and shall identify the Person making
    the Acquisition Proposal and set forth its material terms) the other Party
    after receipt of an Acquisition Proposal, or if any nonpublic information is
    requested from, or any discussions or negotiations are sought to be
    initiated or continued with, any of its or its Subsidiaries' Representatives
    and thereafter shall keep the other Party informed, on a current basis, of
    the status and material terms of any proposals or offers.

        3.3.4.  Except as provided in Section 3.3.5, nothing contained in this
    Agreement shall prohibit the Company or Parent, as applicable, from taking
    and disclosing to its shareholders or stockholders, as applicable, a
    position contemplated by Rule 14e-2(a) under the Exchange Act with respect
    to an Acquisition Proposal by means of a tender or exchange offer or, in the
    case of Parent, taking this action and making these recommendations as the
    directors of Parent reasonably consider necessary so as to comply with any
    obligations imposed on Parent by the City Code on Takeovers and Mergers or
    the U.K. Panel on Takeover and Mergers in relation to any Acquisition
    Proposal (provided, that it is hereby acknowledged, for the avoidance of
    doubt that no provision of the City Code requires Parent or its directors to
    solicit or initiate any Acquisition Proposal).

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<PAGE>
        3.3.5.  Subject to its fiduciary duties under applicable Law as
    determined by the Board of Directors of Parent in good faith after receipt
    of the advice of outside counsel, the Board of Directors of Parent shall
    recommend that its shareholders vote to approve the Parent Requisite
    Resolutions and the Parent Director Resolutions (and these recommendations
    shall be included in the Parent Circular (as defined in Section 3.4.2)).
    Subject to its fiduciary duties under applicable law as determined by the
    Board of Directors in good faith after receipt of the advice of outside
    counsel, the Board of Directors of the Company shall recommend that the
    stockholders of the Company vote to approve the adoption of this Agreement
    (and this recommendation shall be included in the Company Proxy Statement
    (as defined in Section 3.4.1.1)). Notwithstanding the foregoing,
    (a) subject to its fiduciary duties under applicable law, the Board of
    Directors of the Company shall deliver written notice to Parent four
    (4) business days prior to modifying its recommendation to its stockholders
    advising Parent that it intends to do so absent modification to the terms
    and conditions of this Agreement and (b) subject to its fiduciary duties
    under applicable law, the Board of Directors of Parent shall deliver written
    notice to the Company four (4) business days prior to modifying its
    recommendation to its shareholders advising the Company that it intends to
    do so absent modification to the terms and conditions of this Agreement.

        3.3.6.  The Merger, this Agreement and the transactions contemplated by
    this Agreement shall be submitted to the stockholders of the Company for the
    purpose of approving this Agreement, the Merger and the transactions
    contemplated by this Agreement regardless of the recommendation or any
    change in the recommendation of the Company's Board of Directors with
    respect thereto.

        3.3.7.  The Merger, this Agreement and the transactions contemplated by
    this Agreement shall be submitted to the shareholders of Parent for the
    purpose of approving this Agreement, the Merger and the transactions
    contemplated by this Agreement regardless of the recommendation or any
    change in the recommendation of Parent's Board of Directors with respect
    thereto.

    Section 3.4.  INFORMATION SUPPLIED.

        3.4.1.  Registration Statement; Other SEC Filings.

           3.4.1.1.  Each of Parent and the Company shall cooperate and promptly
       prepare and Parent shall file with the SEC as soon as practicable a
       Registration Statement on Form F-4 (or any successor form) (the
       "FORM F-4") under the Securities Act with respect to the Parent Ordinary
       Shares and the Parent Depositary Shares issuable and deliverable pursuant
       to this Agreement. A portion of the Form F-4 shall serve as a prospectus
       with respect to the Parent Ordinary Shares and Parent Depositary Shares
       issuable and deliverable pursuant to the terms of this Agreement and as
       the Company's proxy statement with respect to the Company Stockholders'
       Meeting (as defined in Section 3.5) (the "COMPANY PROXY STATEMENT").
       Parent will cause the Form F-4 to comply as to form in all material
       respects with the applicable provisions of the Securities Act and
       Exchange Act and the rules and regulations under the Securities Act and
       Exchange Act. Each of Parent and the Company shall use reasonable best
       efforts to have the Form F-4 declared effective by the SEC as promptly as
       practicable after the filing. Parent shall use reasonable best efforts to
       obtain, prior to the effective date of the Form F-4, all necessary state
       securities law or "Blue Sky" permits or approvals required to effect the
       transactions contemplated by this Agreement. Parent will advise the
       Company, promptly after it receives notice, of the time when the
       Form F-4 has become effective or any supplement or amendment has been
       filed, the issuance of any stop order, the suspension of the
       qualification of the Parent Depositary Shares or Parent Ordinary Shares
       issuable and deliverable in connection with the Merger for offering or
       sale in any jurisdiction.

           3.4.1.2.  The Company and Parent each agrees, as to itself and its
       Subsidiaries, that none of the information supplied or to be supplied by
       it or its Subsidiaries for inclusion or

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<PAGE>
       incorporation by reference in the Form F-4 or the Company Proxy
       Statement, including any amendment or supplement, will, at the time the
       Form F-4 becomes effective under the Securities Act, or, in the case of
       the Company Proxy Statement, at the date of mailing to stockholders and
       at the time of the Company Stockholder Meeting, contain any untrue
       statement of a material fact or omit to state any material fact required
       to be stated therein or necessary in order to make the statements
       therein, in the light of the circumstances under which they were made,
       not misleading. If at any time prior to the date of the consummation of
       the Merger any information relating to the Company or Parent, or any of
       their respective Affiliates, officers or directors, should be discovered
       by the Company or Parent which should be set forth in an amendment and/or
       a supplement to the Form F-4 or the Company Proxy Statement, so that the
       Form F-4 or the Company Proxy Statement would not, at the time the
       Form F-4 becomes effective under the Securities Act, or, in the case of
       the Company Proxy Statement, at the date of mailing to stockholders and
       at the time of the Company Stockholder Meeting, include any misstatement
       of a material fact or omit to state any material fact required to be
       stated therein or necessary to make the statements therein, in the light
       of the circumstances under which they were made, not misleading, the
       Party which discovers this information shall promptly notify the other
       Party and, to the extent required by Law, an appropriate amendment or
       supplement describing that information shall be promptly filed with the
       SEC or any other applicable Governmental Entity and, to the extent
       required by Law, disseminated to the Company's stockholders.

           3.4.1.3.  Each of Parent and the Company will use reasonable best
       efforts to cause the Parent Documents (as defined in Section 3.4.2) or
       the Company Proxy Statement, as applicable, to be mailed to its
       respective shareholders or stockholders, as applicable, as promptly as
       practicable after the date of this Agreement.

        3.4.2.  The Company and Parent shall cooperate and Parent shall promptly
    prepare and file with the UKLA (a) a circular to be sent to Parent
    shareholders in connection with the Parent Shareholders Meeting (as defined
    in Section 3.5) (the "PARENT CIRCULAR"), containing (i) a notice convening
    the Parent Shareholders Meeting, (ii) any other information (if any) as may
    be required by the UKLA and (iii) any other information as Parent and the
    Company shall agree to include; and (b) listing particulars relating to
    Parent and its Subsidiaries and the Parent Ordinary Shares (the "PARENT
    LISTING PARTICULARS," and the Parent Circular and the Parent Listing
    Particulars together being the "PARENT DOCUMENTS"). Parent agrees, as to
    itself and its Subsidiaries, that the Parent Documents and any supplements
    and any other circulars or documents issued to shareholders or employees of
    Parent, will contain all particulars relating to Parent required to comply
    in all material respects with all United Kingdom statutory and other legal
    provisions (including, without limitation, the Companies Act, the U.K.
    Financial Services Act 1986 and the rules and regulations made thereunder,
    and the rules and requirements of the UKLA, LSE, NYSE and the NASDAQ) and
    the Company and Parent each agrees, as to itself and its Subsidiaries, that
    all information contained in those documents with respect to itself or its
    Subsidiaries will be substantially in accordance with the facts and will not
    omit anything material likely to affect the import of that information.
    Parent will prepare (with the cooperation of the Company) a summary of the
    Parent Listing Particulars, which shall comprise a fair summary of the key
    information set out in the Parent Listing Particulars to be included in the
    Company Proxy Statement.

    Section 3.5.  MEETINGS.

    The Company will take all action necessary to convene a meeting to be held
as promptly as practicable after the Form F-4 has been declared effective by the
SEC, of the holders of Company Common Shares and Company Money Market Preferred
Shares at which those stockholders will vote with respect to the adoption of
this Agreement (the "COMPANY STOCKHOLDERS' MEETING"). Parent will take all
action necessary to convene, as promptly as practicable, after the Parent
Documents have been

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<PAGE>
approved by the LSE, an extraordinary general meeting of Parent shareholders at
which the resolutions specified in the next succeeding sentence will be proposed
(the "PARENT SHAREHOLDERS MEETING"). Parent shall propose at the Parent
Shareholders Meetings resolutions to approve all of the following transactions
or matters: (1) (A) an increase in the authorized ordinary share capital of
Parent and (B) the authorization of the Board of Directors of Parent to allot
securities, including to the Company stockholders pursuant to the Merger (the
"PARENT REQUISITE RESOLUTIONS"), (2) the election of the Company Designees (as
defined in Section 3.9.3 of this Agreement) in accordance with Section 3.9.3,
subject to the consummation of the Merger (the "PARENT DIRECTOR RESOLUTIONS"),
and (3) any additional resolutions necessary to effect the transactions
contemplated by this Agreement.

    Section 3.6.  FILINGS; OTHER ACTIONS; NOTIFICATION.

        3.6.1.  (a) Subject to Section 3.3.5 of this Agreement, the Company and
    Parent shall each cooperate with the other and (i) use (and shall cause
    their respective Subsidiaries to use) their reasonable best efforts promptly
    to take or cause to be taken all actions, and do or cause to be done all
    things, necessary, proper or advisable under this Agreement and applicable
    Laws to consummate the Merger and the other transactions contemplated by
    this Agreement as promptly as practicable, including preparing and filing as
    promptly as practicable all documentation to effect all necessary filings,
    notices, petitions, statements, registrations, submissions of information,
    applications and other documents, and (ii) use (and shall cause their
    respective Subsidiaries to use) reasonable best efforts to obtain as
    promptly as practicable all approvals, consents, registrations, permits,
    authorizations and other confirmations required to be obtained from any
    third party, including the Company Required Consents and Parent Required
    Consents, necessary, proper or advisable to consummate the Merger and the
    other transactions contemplated by this Agreement. Parent shall offer to
    take (and if this offer is accepted, commit to take) all steps which, to the
    extent consistent with its use of reasonable best efforts, it is capable of
    taking to avoid or eliminate impediments under any antitrust, competition,
    or trade regulation law that may be asserted by any Governmental Entity with
    respect to the Merger so as to enable the Effective Time to occur as
    promptly as possible and shall use its reasonable best efforts to defend
    through litigation on the merits any claim asserted in any court by any
    party, including appeals. Without limiting the foregoing, Parent shall, to
    the extent consistent with its use of reasonable best efforts, (x) propose,
    negotiate, offer to commit and effect (and if this offer is accepted, commit
    to and effect), by consent decree, hold separate order, or otherwise, the
    sale, divestiture or disposition of any assets or businesses or otherwise or
    (y) offer to take, or offer to commit to take, any action limiting its
    freedom of action with respect to, any businesses, services, or assets, in
    each case in order to avoid the entry of, or to effect the dissolution of,
    any injunction, temporary restraining order or other order that prohibits
    consummation of the Merger.

        (b) Notwithstanding anything contained in this Agreement to the
    contrary, neither Party shall be required by this Section 3.6.1 to take any
    action, including to accept or agree to any conditions, terms or
    restrictions or any disposition of assets or businesses, as the case may be,
    (x) which are not conditioned on consummation of the Merger or (y) which,
    individually or in the aggregate, would have a Material Adverse Effect on
    Parent, the Company and their respective Subsidiaries taken together after
    giving effect to the Merger.

        (c) The Company shall not accept or agree to any conditions, terms, or
    restrictions or any disposition of assets or business pursuant to this
    Section 3.6.1 without the prior written consent of Parent (not to be
    unreasonably withheld). Subject to applicable Laws relating to the exchange
    of information, the Company and Parent shall have the right to review in
    advance, and to the extent practicable each will consult the other on, all
    the information relating to the Company and its Subsidiaries or Parent and
    its Subsidiaries, as the case may be, that appears in any filing made with,
    or written materials submitted to, any third party and/or any Governmental
    Entity in connection with the Merger and the other transactions contemplated
    by this Agreement. In

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    exercising the foregoing right, each of the Company and Parent shall act
    reasonably and as promptly as practicable.

        3.6.2.  The Company and Parent each shall, upon request by the other,
    furnish the other with all information concerning itself, its Subsidiaries,
    directors, officers and shareholders and stockholders, as applicable, and
    any other matters as may be reasonably necessary or advisable in connection
    with the Form F-4, the Company Proxy Statement, the Parent Documents or any
    other necessary filing, notice, statement, registration, submission of
    information or application made by or on behalf of the Company or Parent or
    any of their respective Subsidiaries to any third party and/or any
    Governmental Entity in connection with the Merger and the other transactions
    contemplated by this Agreement.

        3.6.3.  The Company and Parent each shall keep the other apprised of the
    status of matters relating to the Merger and the other transactions
    contemplated by this Agreement, including promptly furnishing the other with
    copies of notices or other communications received by the Company or Parent,
    as the case may be, or any of its Subsidiaries, from any third party whose
    consent or approval is required or advisable and/or any Governmental Entity
    with respect to the Merger and the other transactions contemplated by this
    Agreement. The Company and Parent each shall give reasonably prompt notice
    to the other of any change which in its good faith judgement would have a
    Material Adverse Effect on it or of any failure of any condition set forth
    in Article IV to the other Party's obligations to effect the Merger.

        3.6.4.  Prior to making any filing, notice, petition, statement,
    registration, submission of information or application to or with any third
    party and/or Governmental Entity (including any securities exchange) in
    connection with the consummation of the Merger and the other transactions
    contemplated by this Agreement and except as may be required by Law or by
    obligations pursuant to any listing agreement with or the rules of any
    securities exchange, each Party shall make all reasonable best efforts to
    consult with the other Party with respect to the content of the filing,
    notice, petition, statement, registration, submission of information or
    application and to provide the other Party with copies of the proposed
    filing, notice, petition, statement, registration, submission of information
    or application. The Company and Parent each shall not agree to participate
    in any meeting with any Governmental Entity in respect of any filings,
    investigation or other inquiry relating to the Merger and the other
    transactions contemplated by this Agreement unless it consults with the
    other Party in advance and, to the extent practicable and permitted by the
    Governmental Entity, gives the other Party the opportunity to attend and
    participate thereat.

        3.6.5.  In the event any claim, action, suit, investigation or other
    proceeding by any Governmental Entity or other Person or other legal or
    administrative proceeding is commenced that questions the validity or
    legality of this Agreement, the Merger or the other transactions
    contemplated by this Agreement or claims or damages in connection therewith,
    the Parties agree to cooperate and use commercially reasonable efforts,
    subject to the limitations set forth in Section 3.6.1, to defend against and
    respond thereto.

    Section 3.7.  ACCESS.

    In order to facilitate the consummation of the Merger and the other
transactions contemplated by this Agreement, the Parties agree that, upon
reasonable request to any Parent Executive Director or Company Officer, as the
case may be, designated for the purpose, and except as may otherwise be required
by applicable Law, the Company and Parent each shall (and shall cause its
Subsidiaries to) provide reasonable access to the Representatives of the other,
during normal business hours throughout the period prior to the Effective Time,
to its properties, books, contracts and records and, during this period, each
shall (and shall cause its Subsidiaries to) furnish promptly to the other all
information concerning its business, properties and personnel as may reasonably
be requested; PROVIDED that no

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receipt of information pursuant to this Section 3.7 shall affect or be deemed to
modify any representation or warranty made by the Company or Parent hereunder;
and PROVIDED, FURTHER, that the foregoing shall not require the Company or
Parent to permit any inquiry, or to disclose any information, that in the
reasonable judgment of the Company or Parent, as the case may be, would
(i) violate any antitrust or competition Law or (ii) result in the disclosure of
any trade secrets of third parties or violate any of its obligations with
respect to confidentiality to third parties if the Company or Parent, as the
case may be, shall have used commercially reasonable efforts to obtain the
consent of the third party to inspection or disclosure. All of this information
shall be governed by the terms of the Confidentiality Agreement, including
without limitation all information disclosed in the Disclosure Schedules, and
the Company and Parent, and each of their respective Subsidiaries, shall use
commercially reasonable efforts to maintain the confidentiality of all of the
information disclosed in the Disclosure Schedules.

    Section 3.8.  PUBLICITY.

    The initial press release concerning this Agreement, the Merger and the
other transactions contemplated by this Agreement shall be a joint press
release, and thereafter the Company and Parent shall consult with each other
prior to issuing any press releases or otherwise making public announcements
with respect to the Merger and the other transactions contemplated by this
Agreement.

    Section 3.9.  BENEFITS AND OTHER MATTERS.

        3.9.1.  EMPLOYEE BENEFITS.

           3.9.1.1.  For at least the twelve month period immediately following
       the Effective Time, Parent will, or will cause the Surviving Corporation
       to, provide to Company Employees (i) salary, incentive compensation and
       other employee benefits (other than equity-based benefits and
       compensation) which in the aggregate are substantially comparable to the
       benefits provided pursuant to the Company's and its Subsidiaries' plans,
       programs, policies and arrangements immediately prior to the Effective
       Time and (ii) equity-based benefits and compensation pursuant to criteria
       and procedures established by Parent which will be substantially similar
       to the criteria and procedures applied to similarly situated employees of
       Parent or its Subsidiaries; PROVIDED, HOWEVER, that, (x) with respect to
       Company Employees who are subject to collective bargaining or other labor
       agreements, all benefits shall be provided in accordance with the
       applicable collective bargaining or other labor agreements and (y) with
       respect to Company Employees party to an employment agreement with the
       Company, all salary, incentive compensation and other employee benefits
       shall be provided in accordance with the employment agreement with the
       Company Employee; and PROVIDED, FURTHER, that except as set forth in the
       following sentence the foregoing shall not be construed to limit Parent's
       flexibility in determining the design of any benefit plan or program. In
       respect of the annual bonus payable to the Company Employees for service
       rendered in calendar year 2000, Parent will, or will cause the Surviving
       Corporation to, continue to honor the terms and conditions of and
       obligations (whether existing as of the date of this Agreement or
       thereafter) under the Company's year 2000 annual bonus program and the
       award or participation agreements thereunder (the "2000 BONUS PROGRAM"),
       which 2000 Bonus Program will be administered consistent with the
       Company's historic annual bonus programs. The Company represents to
       Parent, and Parent hereby acknowledges that, for purposes of the
       Company's Change in Control Severance Plan, the "Service Supplement" and
       the "Severance Factor" shall be, for purposes of persons identified in
       Section 2.1.10 of the Company Disclosure Schedule as "Tier 1", "Tier 2"
       and "Tier 3" employees, 3, 2 and 1, respectively.

           3.9.1.2.  As of and after the Effective Time, Parent will, or will
       cause the Surviving Corporation to, give Company Employees full credit
       for purposes of eligibility and vesting and benefit accruals and
       determinations (but not for purposes of benefit accruals or

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<PAGE>
       determinations under any defined benefit pension plans, to the extent
       this credit would result in a duplication of benefits for the same period
       of service), under any employee compensation and incentive plans, benefit
       plans, programs, policies and arrangements maintained for the benefit of
       Company Employees as of and after the Effective Time by Parent, its
       Subsidiaries or the Surviving Corporation for the Company Employees'
       service with the Company, its Subsidiaries and their predecessor entities
       to the same extent recognized by the Company immediately prior to the
       Effective Time. Parent will, or will cause its Subsidiaries, to provide
       each Company Employee with credit for any co-payments and deductibles
       incurred prior to the Effective Time (or that later transition date to
       new welfare benefits plans as defined in Section 3(1) of ERISA) for the
       calendar year in which the Effective Time (or that later transition date)
       occurs, in satisfying any applicable deductible or out-of-pocket
       requirements under any welfare plans that the Company Employees are
       eligible to participate in after the Effective Time.

           3.9.1.3.  From and after the Effective Time, Parent will honor, and
       will cause its Subsidiaries to honor, in accordance with its terms,
       (x) each existing employment, change of control, severance and
       termination plan, policy or agreement of or between the Company or any of
       its Subsidiaries and any officer, director or employee of that company,
       equity-based plans, programs or agreements, bonus plans or programs and
       (y) all obligations pursuant to outstanding restoration plans,
       equity-based plans, programs or agreements, bonus plans or programs,
       bonus deferral plans, vested and accrued benefits under any employee
       benefit plan, program or arrangement of the Company or its Subsidiaries
       and similar employment, compensation and benefit arrangements and
       agreements in effect as of the Effective Time, in each case to the extent
       legally binding on the Company or any of its Subsidiaries.

        3.9.2.  DIRECTOR AND OFFICER INDEMNIFICATION AND INSURANCE.

    (a) Parent agrees that all rights to indemnification and all limitations on
liability existing in favor of any Indemnitee (as defined below) in respect of
acts or omissions of these Indemnitees on or prior to the Effective Time as
provided in the certificate of incorporation and by-laws of the Company or an
agreement between an Indemnitee and the Company or its Subsidiaries in effect as
of the date of this Agreement shall continue in full force and effect in
accordance with its terms.

    (b) For six years after the Effective Time, Parent shall indemnify and hold
harmless the individuals who on or prior to the Effective Time were officers or
directors of the Company or any of its Subsidiaries (the "INDEMNITEES") to the
same extent as set forth in Section 3.9.2(a) above with respect to all actions
or omissions by them in their capacities as officers or directors of the
Company, or taken by them at the request of, the Company or any of its
Subsidiaries. In the event any claim in respect of which indemnification is
available pursuant to the foregoing provisions is asserted or made within that
six-year period, all rights to indemnification shall continue until the claim is
disposed of or all judgments, orders, decrees or other rulings in connection
with the claim are duly satisfied.

    (c) For six years after the Effective Time, Parent agrees that it will or
will cause the Surviving Corporation to indemnify and hold harmless the
Indemnitees against any costs or expense (including reasonable attorney's fees),
judgements, fines, losses, claims, damages or liabilities incurred in connection
with any claim, action, suit proceeding or investigation, whether civil,
criminal, administrative or investigative, arising out of or pertaining to
matters relating to their duties or actions in their capacity as officers and
directors and existing or occurring at or prior to the Effective Time, whether
asserted or claimed prior to, at or after the Effective Time, to the fullest
extent permitted under applicable law (and Parent shall, or shall cause the
Surviving Corporation to, also advance fees and expenses (including reasonable
attorney's fees) as incurred to the fullest extent permitted under applicable
law; PROVIDED that the person to whom expenses are advanced provides a customary
undertaking complying with applicable law to repay these expenses if it is
ultimately determined that

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<PAGE>
this person is not entitled to indemnification). The Certificate of
Incorporation of the Surviving Corporation shall contain provisions not less
favorable with respect to indemnification than are set forth in Article X of the
Company's Certificate of Incorporation, which provisions shall not be amended,
repealed or otherwise modified for a period of six years from the Effective Time
in any manner that would adversely affect the rights thereunder of the
Indemnitees.

    (d) For six years after the Effective Time, Parent shall procure the
provision of officers' and directors' liability insurance in respect of acts or
omissions occurring prior to the Effective Time covering each Person currently
covered by the Company's officers' and directors' liability insurance policy on
terms with respect to coverage and in amounts no less favorable than those of
the policy in effect on this date; PROVIDED, HOWEVER, that during this period,
Parent shall not be required to procure any coverage in excess of the amount
that can be obtained for the remainder of the period for an annual premium of
200% of the current annual premium paid by the Company for its existing
coverage.

    (e)  The obligations of Parent under this Section 3.9.2 shall not be
terminated or modified in a manner as to adversely affect any Indemnitee to whom
this Section 3.9.2 applies without the consent of the affected Indemnitee (it
being expressly agreed that the Indemnitees to whom this Section 3.9.2 applies
are intended to and shall be third party beneficiaries of this Section 3.9.2).

        3.9.3.  DIRECTORS AND OFFICERS OF PARENT.

    The Board of Directors of Parent shall take all action necessary so that, at
the Effective Time, the Board of Directors of Parent shall consist of: sixteen
(16) directors, (x) ten (10) of which shall be selected by the Board of
Directors of Parent prior to the Effective Time from among the directors of
Parent (the "PARENT DESIGNEES"), (y) five (5) current directors of the Company
listed on EXHIBIT C (the "COMPANY DESIGNEES") and (z) Mr. Masao Inagaki. If any
of the Company Designees are unable to serve due to death, illness, disability
or any other similar reason, prior to the Effective Time, the Company shall
select a replacement who shall be a "Company Designee" subject to Parent's
approval not to be unreasonably withheld; PROVIDED that at least one Company
Designee shall be neither a U.S. citizen nor a U.S. resident for purposes of
Rule 3b-4(c)(2)(i) under the Exchange Act (this Company Designee, a "NON-US
COMPANY DESIGNEE"). If during a two year period after the Effective Time any
Company Designee ceases to be a member of the Board of Directors of Parent due
to retirement, resignation, death, illness, disability or similar reason, the
remaining Company Designees shall be entitled to recommend a replacement
(reasonably acceptable to Parent), who if so appointed shall be for purposes of
this sentence a "Company Designee." Subject to the provisions of the memorandum
and articles of association of Parent and its fiduciary duties under applicable
Law, Parent's Board of Directors shall appoint the recommended replacement to
Parent's Board of Directors; PROVIDED that if a Non-US Company Designee is to be
replaced, the recommended replacement shall be neither a U.S. citizen nor a U.S.
resident for purposes of Rule 3b-4(c)(2)(i) under the Exchange Act. In the event
that Mr. Inagaki is unable to serve due to death, illness, disability or other
similar reason, Parent shall select a replacement (reasonably acceptable to the
Company Designees) who is neither a U.S. citizen or a U.S. resident for purposes
of Rule 3b-4(c)(2)(i) under the Exchange Act. Following the Effective Time, a
majority of the meetings of the Board of Directors of Parent in each year shall
be held in London, England. As of the Effective Time, the Company's current
Chief Executive Officer shall be the Chairman of the Company, and the Company's
current Chief Financial Officer shall be the President and CEO of the Company
following the Effective Time.

    Section 3.10.  EXPENSES.

    Except as otherwise provided in Section 5.5, whether or not the Merger is
consummated, all costs and expenses incurred in connection with the Merger, this
Agreement and the transactions contemplated by this Agreement shall be paid by
the party incurring the expense, except that the

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Company and Parent shall share equally the costs and expenses of filing,
printing and distributing the Form F-4, the Company Proxy Statement, the Parent
Documents and related documents.

    Section 3.11.  OTHER ACTIONS BY THE COMPANY AND PARENT.

        3.11.1.  TAKEOVER STATUTES.

    Subject to their respective fiduciary duties under applicable Law, if any
Takeover Statute is or may become applicable to the Merger or the other
transactions contemplated by this Agreement, each of the Company and Parent and
their respective Board of Directors shall, subject to applicable Law, grant any
approvals and take any actions as are necessary so that the Merger and the other
transactions contemplated by this Agreement may be consummated as promptly as
practicable on the terms contemplated by this Agreement, and otherwise act to
eliminate or minimize the effects of any Takeover Statute on these transactions.

        3.11.2.  DIVIDENDS.

    After the date of this Agreement, each of Parent and the Company shall
coordinate with the other as to the declaration of any dividends in respect of
Parent Ordinary Shares and Company Common Shares and the record dates, it being
the intention of the Parties that Persons who are holders of Company Common
Shares prior to the Merger and holders of Parent Ordinary Shares or Parent
Depositary Shares receive in respect of the calendar year in which the Closing
Date occurs either (x) four quarterly dividends in respect of their Company
Common Shares, (y) two semi-annual dividends in respect of the Parent Ordinary
Shares or Parent Depositary Shares they receive pursuant to the Merger or
(z) two quarterly dividends in respect of their Company Common Shares and one
semi-annual dividend in respect of the Parent Ordinary Shares or Parent
Depositary Shares they receive pursuant to the Merger.

    Section 3.12.  TRADING/LISTING APPLICATIONS; ESTABLISHMENT OF PARENT
DEPOSITARY SHARES.

    Parent shall promptly prepare and submit to the LSE an application with
respect to the admission of the Parent Ordinary Shares to trading on the LSE and
to the NASDAQ a listing application in respect of the Parent Depositary Shares
issuable pursuant to the Merger, and shall use reasonable best efforts to
obtain, prior to the Effective Time, approval for the admission to trading of
the Parent Ordinary Shares, in the case of the LSE, subject to allotment, and
the listing of the Parent Depositary Shares, in the case of the NASDAQ, subject
to official notice of issuance. Parent will prior to the Effective Time enter
into all necessary agreements with the Depositary and other parties to establish
the Parent Depositary Shares deliverable pursuant to the Merger.

    Section 3.13.  LETTERS OF ACCOUNTANTS.

    (a) The Company shall use commercially reasonable efforts to cause to be
delivered to Parent "comfort" letters of PricewaterhouseCoopers LLP, the
Company's independent public accountants, dated the effective date of the
Form F-4 and the Closing Date, respectively, and addressed to the Company and
its directors and Parent and its directors, in form reasonably satisfactory to
Parent and customary in scope and substance for "comfort" letters delivered by
independent public accountants in connection with registration statements
similar to the Form F-4.

    (b) Parent shall use commercially reasonable efforts to cause to be
delivered to the Company "comfort" letters of Arthur Anderson, Parent's
independent public accountants, dated the effective date of the Form F-4 and the
Closing Date, respectively, and addressed to Parent and its directors and the
Company and its directors, in form reasonably satisfactory to the Company and
customary in scope and substance for "comfort" letters delivered by independent
public accountants in connection with registration statements similar to the
Form F-4.

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    Section 3.14.  AGREEMENTS OF COMPANY AFFILIATES.

    The Company shall promptly cause to be prepared and delivered to Parent a
list identifying all persons who may be deemed to be as of the date of the
Company Stockholders Meeting "affiliates" of the Company for purposes of
Rule 145 under the Securities Act (the "COMPANY AFFILIATES"), and shall use
commercially reasonable efforts to cause each Company Affiliate to deliver to
Parent an executed agreement in the form attached as EXHIBIT D as promptly as
practicable prior to the Closing Date.

    Section 3.15.  TAX REPRESENTATION LETTERS.

    Parent shall deliver to counsel to Parent and to counsel to the Company as
of the Closing Date a "TAX REPRESENTATION LETTER" substantially in the form
attached as EXHIBIT E and containing any other customary representations as
shall be necessary to enable each counsel to render the opinions described in
Sections 4.2.3 and 4.3.3 of this Agreement. The Company shall deliver to counsel
to the Company and to counsel to Parent as of the Closing Date a Tax
Representation Letter substantially in the form attached as EXHIBIT F and
containing any other customary representations as shall be necessary to enable
counsel to render the opinions described in Sections 4.2.3 and 4.3.3 of this
Agreement.

    Section 3.16.  SECTION 16(B).

    Parent and the Company shall take all steps reasonably necessary to cause
the transactions contemplated by this Agreement and any other dispositions of
equity securities of the Company (including derivative securities) in connection
with the transactions contemplated by this Agreement by each individual who is a
director or officer of the Company to be exempt under Rule 16b-3 promulgated
under the Exchange Act.

    Section 3.17.  EMPLOYEE AND NO-SALE AGREEMENTS TO BE ENTERED INTO BY
DESIGNEES.

    The Company and Parent shall use their reasonable best efforts to induce
each of the employees and/or stockholders of the Company and its Subsidiaries
designated by the Group Chief Executive of Parent in consultation with the Chief
Executive Officer of the Company to enter into an Employment Agreement
(including the terms discussed prior to the date of this Agreement) and/or a
No-Sale Agreement, in each case as designated prior to the Effective Time;
PROVIDED that, with respect to any Person who does not enter into an Employment
Agreement and/or No-Sale Agreement, nothing in this Section 3.17 shall affect
the rights this Person may have under any existing employment agreements,
severance plans or arrangements in which this Person is a party or participant.

    Section 3.18.  HEADQUARTERS; NAME.

        3.18.1.  HEADQUARTERS OF THE PARENT.

    The main headquarters and company offices of Parent will continue to be
located in London, England after the Effective Time.

        3.18.2.  HEADQUARTERS OF ADVERTISING AGENCIES OF THE COMPANY.

    The headquarters of each advertising agency operated by the Company and/or
any of its Subsidiaries that, as of the date of this Agreement, is located in
the United States will continue to be located in the United States after the
Effective Time.

        3.18.3.  NAME OF PARENT.

    Parent shall maintain its current company name after the Effective Time.

    Section 3.19.  CONVERTIBLE NOTES.

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        3.19.1.

    If required by the terms of the Convertible Notes Indenture, Parent shall
make, or shall cause the Company to make, a Designated Event Offer, as defined
in the Indenture dated as of January 20, 2000 for the Company's 3% Convertible
Subordinated Notes (the "CONVERTIBLE NOTES INDENTURE"), in accordance with
Sections 3.08 and 4.07 thereof, to all the holders of convertibles notes ("NOTE
HOLDERS") under the Convertible Notes Indenture.

        3.19.2.

    To the extent requested by Parent, the Company shall use its reasonable best
efforts to cooperate in obtaining, prior to the Closing Date, the consent of the
Note Holders as is necessary under the Convertible Notes Indenture to amend the
Convertible Notes Indenture to remove Section 4.02 (other than the first
sentence thereof); PROVIDED that if this Agreement is terminated prior to the
consummation of the Merger, Parent shall reimburse the Company for its out of
pocket fees and expenses (including any consent fee paid but only to the extent
requested by Parent) incurred pursuant to this Section 3.19.2.

    Section 3.20.  TREATMENT OF HOLDERS OF PARENT DEPOSITARY SHARES.

    (a) Parent shall, at or prior to the Effective Time, enter into an amendment
to the Deposit Agreement with the Depositary to require that Parent deliver to
the Depositary for mailing, and if so delivered, the Depositary shall mail or
cause to be mailed, to the registered holders of Parent Depositary Shares any
reports mailed or otherwise distributed to holders of Parent Ordinary Shares.
This amendment shall be reasonably satisfactory to the Company.

    (b) Parent shall include for consideration by its shareholders at the first
annual general meeting of Parent after the Effective Time and, subject to its
fiduciary duties, the Board of Directors of Parent shall recommend the approval
of a resolution to approve amendments to Parent's articles of association in
order to provide, to the extent reasonably practicable, for the holders of
Parent Depositary Shares substantially the same rights as holders of Parent
Ordinary Shares, including with respect to the rights to receive notice of,
attend, speak and vote at general meetings of holders of Parent Ordinary Shares
including by providing for the appointment of multiple proxies and sub-proxies
and by providing that all votes on special and extraordinary resolutions be
taken on a poll. If these amendments are approved, Parent shall cause the
Deposit Agreement to be amended to the extent reasonably necessary to give
effect to these amendments to Parent's articles of association. In addition, the
Parent shall include for consideration by its shareholders at the first annual
general meeting of Parent after the Effective Time and, subject to its fiduciary
duties, the Board of Directors of Parent shall recommend approval of, a
resolution to amend the Parents' articles of association to provide for the
delivery of notice of Parent board meetings to directors outside the United
Kingdom (whether or not requested by a director).

    Section 3.21  TRANSITION COMMITTEE.

    (a) The Parties will maintain, during the period from the date of this
Agreement through the first anniversary of the Effective Time, a transition
committee (the "TRANSITION COMMITTEE") initially comprised of the Company's
current Chief Executive Officer (who shall be Chairman of the Transition
Committee) and Chief Financial Officer (the "COMPANY COMMITTEE MEMBERS") and
Parent's current Group Chief Executive and Group Finance Director (the "PARENT
COMMITTEE MEMBERS"). The Transition Committee shall not be responsible for
controlling the operation of the businesses of the Company or Parent. During the
period from the Effective Time until the first anniversary of the Effective
Time, unless approved by a majority of the members of the Transition Committee,
Parent shall not, and shall not permit any of its Subsidiaries to, (x) cause any
of the material businesses of the Company or any of its Subsidiaries existing as
of the date of this Agreement to be combined with any business of, or held by,
Parent or any of its Subsidiaries (other than the Company and its Subsidiaries)
or (y) offer any

                                      A-47
<PAGE>
employee of the Company or any of its Subsidiaries employment with Parent or any
Subsidiary of Parent (other than the Company or any of its Subsidiaries). In the
event that any Parent Committee Member or Company Committee Member shall not
become, or, prior to the first anniversary of the Effective Time, shall cease to
be, for any reason, a member of the Transition Committee, the remaining Parent
Committee Member (if the person ceasing to be a member was a Parent Committee
Member) or Company Committee Member (if the person ceasing to be a member was a
Company Committee Member) shall select a replacement Parent Committee Member or
Company Committee Member, as applicable, who shall be (x) if selected by the
remaining Company Committee Member, an employee of the Company or any of its
Subsidiaries, and (y) if selected by the remaining Parent Committee Member, an
employee of Parent or any of its Subsidiaries.

    (b) In the event that Parent breaches any of the provisions of
Section 3.21(a) (and Parent fails to cure the breach within thirty
(30) business days after having received written notice from any Company
Committee Member setting forth in reasonable detail the action or inaction
giving rise to the breach), any party to a No-Sale Agreement shall have the
right during the thirty (30) day period thereafter to terminate the provisions
of Section 1(a) of the No-Sale Agreement, which upon this termination the
provisions of that Section will be of no further force and effect.

                                   ARTICLE IV
                                   CONDITIONS

    Section 4.1.  CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER.


    The respective obligations of Parent, Merger Sub Holding Co., Merger Sub and
the Company to effect the Merger are subject to the satisfaction or waiver of
each of the following conditions:


        4.1.1.  SHAREHOLDER APPROVALS.

    (a) This Agreement shall have been adopted by the stockholders of the
Company constituting the Company Requisite Vote and (b) the Parent Requisite
Resolutions and the Parent Director Resolutions shall have been duly approved by
the shareholders of Parent constituting the Parent Requisite Vote.

        4.1.2.  REGULATORY CONSENTS.

    (a) All the Company Required Consents and Parent Required Consents from or
with any Governmental Entity in connection with the consummation of the Merger
and the other transactions contemplated by this Agreement shall have been made
or obtained, and (b) all other consents, approvals, declarations and
authorizations of any Governmental Entity of competent jurisdiction the failure
of which to have been obtained prior to the Effective Time would, individually
or in the aggregate, have a Material Adverse Effect on Parent or a Material
Adverse Effect on the Company after the Effective Time, or make illegal the
consummation of the Merger (these consents, approvals, declarations and
authorizations, together with the Company Required Consents and the Parent
Required Consents, the "GOVERNMENTAL CONSENTS") shall have been obtained. No
Governmental Consents shall contain any terms or impose any condition or
restriction relating or applying to, or requiring changes in or limitations on,
the operation of any asset or businesses of the Company, Parent or any of their
respective Subsidiaries which term, condition or restriction, individually or in
the aggregate, would have a Material Adverse Effect on Parent, the Company and
their respective Subsidiaries, taken as a whole after giving effect to the
Merger.

        4.1.3.  LAWS AND ORDERS.

    No Governmental Entity of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any Law (whether temporary, preliminary or
permanent) that is in effect and restrains, enjoins or otherwise prohibits the
consummation of the Merger, or that would materially frustrate the express
intent and purposes of this Agreement (collectively, "ORDER") and no
Governmental Entity of competent jurisdiction has instituted a proceeding that
would, individually or in the aggregate, have a Material Adverse Effect on
Parent, the Company and their respective Subsidiaries, taken as a whole after
giving effect to the Merger.

                                      A-48
<PAGE>
        4.1.4.  EFFECTIVENESS OF FORM F-4.

    The Form F-4 shall have become effective and no stop order suspending the
effectiveness of the Form F-4 shall then be in effect, and no proceeding for
that purpose shall then be threatened by the SEC or shall have been initiated by
the SEC and not concluded or withdrawn and all state securities or "blue sky"
permits or approvals required to consummate the Merger shall have been received.

        4.1.5.  LISTING AND TRADING.

    The Parent Ordinary Shares to be issued pursuant to the Merger shall have
been admitted to the Official List of the UKLA and to trading on the main market
of the LSE and this admission shall have become effective in accordance with the
rules and regulations of the UKLA and the LSE and the Parent Depositary Shares
to be issued shall have been authorized for listing on the NASDAQ, subject to
official notice of issuance.


    Section 4.2.  CONDITIONS TO OBLIGATIONS OF PARENT, MERGER SUB HOLDING CO.
AND MERGER SUB.


    The obligation of Parent to effect the Merger is also subject to the
satisfaction or waiver by Parent prior to the Closing Date of the following
conditions:

        4.2.1.  REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

    Each representation and warranty of the Company set forth in this Agreement
shall be true and correct in all material respects when made and as of the
Closing Date as if made on and as of that date (provided that those
representations and warranties which are by their express provisions made as of
a specific date need be true and correct only as of the specified date), except
to the extent that the failures of the representations and warranties to be true
and correct, taken together, would not reasonably be expected to have a Material
Adverse Effect on the Company (it being understood that, for purposes of
determining the accuracy of any representations and warranties, all "Material
Adverse Effect" qualifications and other qualifications based on the word
"material" contained in the representations and warranties shall be
disregarded), PROVIDED, HOWEVER, that the foregoing Material Adverse Effect
qualifier shall be inapplicable with respect to the representations and
warranties contained in Section 2.1.2(a), which shall be true and correct in all
material respects, and Parent shall have received a certificate signed on behalf
of the Company by an executive officer of the Company to that effect.

        4.2.2.  PERFORMANCE OF OBLIGATIONS OF THE COMPANY.

    The Company shall have performed in all material respects all obligations
and covenants required to be performed by or complied with by it under this
Agreement at or prior to the Closing Date, and Parent shall have received a
certificate signed on behalf of the Company by an executive officer of the
Company to that effect.

        4.2.3.  TAX OPINION.


    Parent shall have received an opinion from Fried, Frank, Harris, Shriver &
Jacobson (or, if Fried, Frank, Harris, Shriver & Jacobson refuses to issue this
opinion, from other counsel reasonably satisfactory to Parent), dated as of the
Closing Date, substantially to the effect that, on the basis of the facts,
representations and assumptions set forth in the opinion, (i) the Merger will be
treated for U.S. federal income tax purposes as a reorganization within the
meaning of Section 368 of the Code (ii) Parent will be treated as a corporation
under Section 367(a) of the Code with respect to each transfer of property
thereto pursuant to the Merger, (iii) no gain or loss will be recognized by the
stockholders of the Company who exchange Company Common Shares solely for Parent
Ordinary Shares or Parent Depositary Shares pursuant to the Merger (except with
respect to cash received in lieu of fractional interests in Parent Depositary
Shares or Parent Ordinary Shares), and (iv) each of Parent, the Company and
Merger Sub Holding Co. will be a party to the reorganization within the meaning
of Section 368 of the Code. The opinion set forth in clause (ii) may assume that
any


                                      A-49
<PAGE>

stockholder who is a "five-percent transferee shareholder" with respect to
Parent within the meaning of United States Treasury Regulation
Section 1.367(a)-3(c)(5)(ii) files the agreement described in United States
Treasury Registration Section 1.3.67(a)-3(c)(1)(iii)(B). In rendering its
opinion, counsel shall be entitled to rely upon customary representations of
Parent and the Company reasonably requested by counsel, including, without
limitation, those contained in the Tax Representation Letters substantially in
the form of Exhibits E and F.


    Section 4.3.  CONDITIONS TO OBLIGATION OF THE COMPANY.

    The obligation of the Company to effect the Merger is also subject to the
satisfaction or waiver by the Company prior to the Closing Date of the following
conditions:

        4.3.1.  REPRESENTATIONS AND WARRANTIES OF PARENT.

    Each representation and warranty of Parent set forth in this Agreement shall
be true and correct in all material respects when made and as of the Closing
Date as if made on and as of that date (provided that those representations and
warranties which are by their express provisions made as of a specific date need
be true and correct only as of the specified date), except to the extent that
the failures of the representations and warranties to be true and correct, taken
together, would not reasonably be expected to have a Material Adverse Effect on
Parent (it being understood that, for purposes of determining the accuracy of
any representations and warranties, all "Material Adverse Effect" qualifications
and other qualifications based on the word "material" contained in the
representations and warranties shall be disregarded), PROVIDED, HOWEVER, that
the foregoing Material Adverse Effect qualifier shall be inapplicable with
respect to the representations and warranties contained in Section 2.2.2(a),
which shall be true and correct in all material respects, and the Company shall
have received a certificate signed on behalf of Parent by an executive officer
of Parent to that effect.

        4.3.2.  PERFORMANCE OF OBLIGATIONS OF PARENT.

    Parent shall have performed in all material respects all obligations and
covenants required to be performed by or complied with by it under this
Agreement at or prior to the Closing Date, and the Company shall have received a
certificate signed on behalf of Parent by an executive officer of Parent to that
effect.

        4.3.3.  TAX OPINION.


    The Company shall have received an opinion from Wachtell, Lipton, Rosen &
Katz (or, if Wachtell, Lipton, Rosen & Katz refuses to issue this opinion, from
other counsel reasonably satisfactory to the Company), dated as of the Closing
Date, substantially to the effect that, on the basis of the facts,
representations and assumptions set forth in the opinion, (i) the Merger will be
treated for U.S. federal income tax purposes as a reorganization within the
meaning of Section 368 of the Code, (ii) Parent will be treated as a corporation
under Section 367(a) of the Code with respect to each transfer of property
thereto pursuant to the Merger, (iii) no gain or loss will be recognized by the
stockholders of the Company who exchange Company Common Shares solely for Parent
Ordinary Shares or Parent Depositary Shares pursuant to the Merger (except with
respect to cash received in lieu of fractional Parent Depositary Shares or
Parent Ordinary Shares) and (iv) each of Parent, the Company and Merger Sub
Holding Co. will be a party to the reorganization within the meaning of
Section 368 of the Code. The opinion set forth in clause (ii) may assume that
any stockholder who is a "five-percent transferee shareholder" with respect to
Parent within the meaning of United States Treasury Regulation
Section 1.367(a)-3(c)(5)(ii) files the agreement described in United States
Treasury Registration Section 1.367(a)-3(c)(1)(iii)(B). In rendering this
opinion, counsel shall be entitled to rely upon customary representations of
Parent and the Company reasonably requested by counsel, including, without
limitation, those contained in the Tax Representation Letters substantially in
the form of Exhibits E and F.


                                      A-50
<PAGE>
                                   ARTICLE V
                                  TERMINATION

    Section 5.1.  TERMINATION BY MUTUAL CONSENT.

    This Agreement may be terminated and the Merger may be abandoned at any time
prior to the Effective Time, whether before or after the adoption of this
Agreement by the stockholders of the Company and/or the approval of the Parent
Requisite Resolutions and Parent Director Resolutions by the shareholders of
Parent, by mutual written consent of the Company and Parent, by action of their
respective Boards of Directors.

    Section 5.2.  TERMINATION BY EITHER PARENT OR THE COMPANY.

    This Agreement may be terminated and the Merger may be abandoned at any time
prior to the Effective Time by action of the Board of Directors of either Parent
or the Company if (i) the Merger shall not have been consummated by the nine
month anniversary of the date of this Agreement (the "TERMINATION DATE"),
whether this date is before or after the date of adoption of this Agreement by
stockholders of the Company and/or after the date of the approval of the Parent
Requisite Resolutions and Parent Director Resolutions by shareholders of Parent;
PROVIDED that the right to terminate this Agreement pursuant to this clause (i)
shall not be available to any Party whose failure to fulfill in any material
respect its obligations under this Agreement has caused or resulted in the
Merger to have been consummated, on or before the Termination Date; (ii) a
Governmental Entity of competent jurisdiction shall have enacted any Law or
issued a final non-appealable permanent injunction or order that prohibits the
consummation of the Merger; PROVIDED that the right to terminate this Agreement
pursuant to this clause (ii) shall not be available to any Party who has not
used commercially reasonable efforts to prevent this Law from being enacted or
this injunction or order from being issued or this injunction or order is due to
a material breach by that Party of its obligations under this Agreement;
(iii) the Company Requisite Vote shall not have been obtained at a duly held
Company Stockholders Meeting, including any adjournments or postponements; or
(iv) the Parent Requisite Vote shall not have been obtained at a duly held
Parent Shareholders Meeting, including any adjournments or postponements.

    Section 5.3.  TERMINATION BY THE COMPANY.

    This Agreement may be terminated and the Merger may be abandoned at any time
prior to the Effective Time, whether before or after the adoption of this
Agreement by the stockholders of the Company, by action of the Board of
Directors of the Company, if (i) the Board of Directors of Parent shall have
withdrawn or adversely modified its recommendations that Parent's shareholders
vote to approve the Parent Requisite Resolutions or the Parent Director
Resolutions; (ii) Parent or its Board of Directors shall recommend an
Acquisition Proposal to its shareholders; or (iii) any representation or
warranty of Parent contained in this Agreement shall be inaccurate or Parent
shall breach any covenant or agreement contained in this Agreement, in either
case as a result of which (because of the failure of Parent to cure within
twenty (20) business days following written notice of this breach from the
Company) a condition set forth in Sections 4.3.1 or 4.3.2 would not be satisfied
prior to or as of the Termination Date.

    Section 5.4.  TERMINATION BY PARENT.

    This Agreement may be terminated and the Merger may be abandoned at any time
prior to the Effective Time, whether before or after the shareholders of Parent
vote to approve the Parent Requisite Resolution, by action of the Board of
Directors of Parent, if (i) the Board of Directors of the Company shall have
withdrawn or adversely modified its recommendation that the Company's
stockholders vote to adopt this Agreement and the transactions contemplated by
this Agreement; (ii) the Company or its Board of Directors shall recommend an
Acquisition Proposal to its stockholders; or (iii) any representation or
warranty of the Company contained in this Agreement shall

                                      A-51
<PAGE>
be inaccurate or the Company shall breach any covenant or agreement contained in
this Agreement, in either case as a result of which (because of the failure of
the Company to cure within twenty (20) business days following written notice of
this breach from Parent) a condition set forth in Sections 4.2.1 or 4.2.2 would
not be satisfied prior to or as of the Termination Date.

    Section 5.5.  EFFECT OF TERMINATION AND ABANDONMENT.

        5.5.1.  In the event of termination of this Agreement and the
    abandonment of the Merger pursuant to this Article V, this Agreement (other
    than as set forth in Section 6.1) shall become void and of no effect with no
    liability on the part of either Party (or of any of their Representatives);
    PROVIDED, HOWEVER, that no termination shall relieve either Parent or the
    Company of any liability for damages resulting from any willful and
    intentional breach of this Agreement or from any obligation to pay, if
    applicable, the amounts payable pursuant to Section 5.5.2 or 5.5.3.

        5.5.2. (a)  If:

           (i)  Parent shall terminate this Agreement pursuant to clauses
       (i) at a time when an Acquisition Proposal for the Company is pending or
       (ii) of Section 5.4; or

           (ii)  any Person shall have made an Acquisition Proposal relating to
       the Company or shall have publicly announced an Acquisition Proposal (or
       an intention to make an Acquisition Proposal) and thereafter (x) this
       Agreement is terminated pursuant to clause (iii) of Section 5.2, by the
       Company pursuant to clause (i) of Section 5.2 (except if the Parent
       Requisite Vote has not been obtained prior to this termination; provided
       that if the Parent Shareholders Meeting has not been held prior to the
       time of this termination, this exception shall not be applicable if an
       inaccuracy of a representation or warranty of the Company contained in
       this Agreement, or the failure of the Company to comply with any of its
       obligations contained in this Agreement, is the primary cause of, or
       resulted in, the Parent Shareholders Meeting not having been held), or
       pursuant to clause (iii) of Section 5.4 and (y) within 9 months after the
       termination of this Agreement, the Company enters into an agreement in
       respect of any Acquisition Proposal or a transaction pursuant to an
       Acquisition Proposal is consummated,

then in any case as described in clause (i) or (ii) the Company shall pay to
Parent (by wire transfer of immediately available funds not later than, in the
case of clause (i), one (1) business day following the date of termination of
this Agreement or, in the case of clause (ii), the date of the agreement in
respect of the Acquisition Proposal or, if earlier, consummation of the
transaction in respect thereof) an amount equal to $175 million (less, in the
case of clause (ii), any amount previously or simultaneously paid by the Company
to Parent pursuant to paragraph (b) of this Section 5.5.2).

        (b)  If either the Company or Parent shall terminate this Agreement
    pursuant to clause (iii) of Section 5.2, then the Company shall pay to
    Parent (by wire transfer of immediately available funds) not later than the
    date of termination of this Agreement an amount equal to $25 million.

        (c)  The Company acknowledges that the agreements contained in this
    Section 5.5.2 are an integral part of the transactions contemplated by this
    Agreement, and that, without these agreements, Parent would not enter into
    this Agreement; accordingly, if the Company fails promptly to pay any amount
    due pursuant to this Section 5.5.2, and, in order to obtain the payment,
    Parent commences a suit which results in a judgment against the Company for
    the payment set forth in this Section 5.5.2, the Company shall pay to Parent
    its costs and expenses (including attorneys' fees) in connection with this
    suit, together with interest on the amount due from each date for payment
    until the date of the payment at the prime rate of Citibank, N.A. in effect
    on the date the payment was required to be made plus 2 percent.

        5.5.3.  (a) If:

                                      A-52
<PAGE>
           (i)  the Company shall terminate this Agreement pursuant to clauses
       (i) at a time when an Acquisition Proposal for Parent is pending or
       (ii) of Section 5.3; or

           (ii)  any Person shall have made an Acquisition Proposal relating to
       Parent or shall have publicly announced an Acquisition Proposal (or the
       intention to make a proposal) and thereafter (x) this Agreement is
       terminated pursuant to clause (iv) of Section 5.2, by Parent pursuant to
       clause (i) of Section 5.2 (except if the Company Requisite Vote has not
       been obtained prior to the time of this termination; provided that if the
       Company Stockholders Meeting has not been held prior to the time of this
       termination, this exception shall not be applicable if an inaccuracy of a
       representation or warranty of Parent contained in this Agreement, or the
       failure of Parent to comply with any of its obligations contained in this
       Agreement is the cause of, or resulted in, the Company Stockholders
       Meeting not having been held), or pursuant to clause (iii) of
       Section 5.3 and (y) within 9 months after the termination of this
       Agreement, Parent enters into an agreement in respect of any Acquisition
       Proposal or a transaction pursuant to an Acquisition Proposal is
       consummated,

then in any case as described in clause (i) or (ii) Parent shall pay to the
Company (by wire transfer of immediately available funds not later than, in the
case of clause (i), one (1) business day following the date of termination of
this Agreement or, in the case of clause (ii), the date of the agreement in
respect of the Acquisition Proposal or, if earlier, consummation of the
transaction in respect thereof) an amount equal to $75 million (less, in the
case of clause (ii), any amount previously or simultaneously paid by Parent to
the Company pursuant to paragraph (b) of this Section 5.5.3).

        (b)  If either Parent or the Company shall terminate this Agreement
    pursuant to clause (iv) of Section 5.2, then Parent shall pay to the Company
    (by wire transfer of immediately available funds) not later than the date of
    termination of this Agreement an amount equal to $25 million.

        (c)  Parent acknowledges that the agreements contained in this
    Section 5.5.3 are an integral part of the transactions contemplated by this
    Agreement, and that, without these agreements, the Company would not enter
    into this Agreement; accordingly, if Parent fails promptly to pay an amount
    due pursuant to this Section 5.5.3 and, in order to obtain the payment, the
    Company commences a suit which results in a judgment against Parent for the
    payment set forth in this Section 5.5.3, the Parent shall pay to the Company
    its costs and expenses (including attorneys' fees) in connection with this
    suit, together with interest on the amount due from each date for payment
    until the date of the payment at the prime rate of Citibank, N.A. in effect
    on the date the payment was required to be made plus 2 percent.

                                   ARTICLE VI
                           MISCELLANEOUS AND GENERAL

    Section 6.1.  SURVIVAL.

    This Article VI and the agreements of the Company and Parent contained in
Sections 3.9, 3.18.2, 3.20 and 3.21 shall survive the Effective Time. This
Article VI, the representations and warranties contained in Sections 2.1.9 and
2.2.9, the agreements of the Company and Parent contained in Sections 3.10, 5.5
and the last sentence of 3.7 shall survive the termination of this Agreement.
All other representations, warranties, agreements and covenants in this
Agreement shall not survive the Effective Time or the termination of this
Agreement.

    Section 6.2  MODIFICATION OR AMENDMENT.

    This Agreement may be modified or amended by agreement of the Parties, by
action taken or authorized by their respective Boards of Directors, at any time
prior to the Effective Time; PROVIDED, HOWEVER, that, after approval by
shareholders, in the case of Parent, or stockholders, in the case of the

                                      A-53
<PAGE>
Company, of the matters presented at the Company Stockholders Meeting or the
Parent Shareholders Meeting, no modification or amendment shall be made which
under applicable Law requires further approval by the shareholders or
stockholders, as the case may be, without further approval. This Agreement may
not be modified or amended except by an instrument in writing executed and
delivered by duly authorized officers of each of the Parties.

    Section 6.3.  WAIVER OF CONDITIONS.

    Any provision of this Agreement may be waived prior to the Effective Time
if, and only if, this waiver is in writing and signed by the Party against whom
the waiver is to be effective.

    Section 6.4.  FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.

    No failure or delay by any Party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. Except as otherwise herein provided, the
rights and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by Law.

    Section 6.5.  COUNTERPARTS.

    This Agreement may be executed in any number of counterparts, each
counterpart being deemed to be an original instrument, and all counterparts
shall together constitute the same agreement.

    Section 6.6.  GOVERNING LAW; SUBMISSION TO JURISDICTION.

        (a) This Agreement shall be deemed to be made in, and in all respects
    shall be interpreted, construed and governed by and in accordance with the
    laws of the State of Delaware applicable to contracts to be performed wholly
    in that state, except to the extent, in the case of Parent, the Companies
    Act and English Law are applicable.

        (b)  The Parties irrevocably submit to the jurisdiction of the courts of
    the State of Delaware and the federal courts of the United States of
    America, in each case located in the State of Delaware, solely in respect of
    the interpretation and enforcement of the provisions of this Agreement and
    in respect of the transactions contemplated by this Agreement and waive, and
    agree not to assert, as a defense in any action, suit or proceeding for the
    interpretation or enforcement hereof, that it is not subject thereto or that
    any action, suit or proceeding may not be brought or is not maintainable in
    these courts or that the venue of these courts may not be appropriate or
    that this Agreement may not be enforced in or by these courts. The Parties
    consent to and grant any of these courts jurisdiction over the person of the
    Parties and over the subject matter of any dispute and agree that mailing of
    process or other papers in connection with any action or proceeding in the
    manner provided in Section 6.7, or in other manners as may be permitted by
    Law, shall be valid and sufficient service thereof.

    Section 6.7.  NOTICES.

    Notices, requests, instructions or other documents to be given under this
Agreement shall be in writing and shall be deemed given, (i) when sent if sent
by facsimile, provided that the facsimile is promptly confirmed by telephone
confirmation thereof, (ii) when delivered, if delivered personally to the
intended recipient, and (iii) one business day after date of guaranteed delivery
later, if sent by

                                      A-54
<PAGE>
overnight guaranteed delivery via a national courier service, and in each case,
addressed to a Party at the following address for that Party:

IF TO THE COMPANY:

    Young & Rubicam Inc.
    285 Madison Avenue
    New York, New York 10017
    Attention: Stephanie W. Abramson, Esq.
    Telecopier: (212) 210-5544

with copies to

    Wachtell, Lipton, Rosen & Katz
    51 West 52nd Street
    New York, New York 10019
    Attention: Martin Lipton, Esq.
            Patricia A. Vlahakis, Esq.
    Telecopier: (212) 403-2000

and

    Freshfields
    65 Fleet Street
    London EC4T 2HS
    England
    Attention: Edward Braham, Esq.
    Telecopier: 44-171-832-7001


IF TO PARENT, MERGER SUB HOLDING CO. OR MERGER SUB:


    WPP Group PLC
    27 Farm Street
    London W1X 6RD
    England
    Attention: Group Chief Executive
    Telecopier: 44-171-493-6819

with copies to

    Fried, Frank, Harris, Shriver & Jacobson
    One New York
    Plaza New York,
    New York 10004
    Attention: Arthur Fleischer, Jr., Esq.
            Stuart Z. Katz, Esq.
    Telecopier: (212) 859-4000

and

    Davis & Gilbert
    1740 Broadway
    Third Floor
    New York, New York 10019
    Attention: Philip S. Reiss, Esq.
            Curt C. Myers, Esq.
    Telecopier: (212) 765-7920

                                      A-55
<PAGE>
and

    Allen & Overy
    One New Change
    London EC4M 9QQ
    England
    Attention: Richard Cranfield, Esq.
            Mark Gearing, Esq.
    Telecopier: 44-171-330-9999

or to any other Persons or addresses as may be designated in writing by the
Party to receive this notice as provided above.

    Section 6.8.  ENTIRE AGREEMENT.

    This Agreement (including the exhibits), the Disclosure Schedules (including
the exhibits) and the Confidentiality Agreement (other than Sections 3 and 4 of
the Confidentiality Agreement which are hereby terminated and have no further
force and effect) constitute the entire agreement, and supersede all other prior
agreements, understandings, representations and warranties both written and
oral, between the Parties with respect to the subject matter of this Agreement.
References to this Agreement shall for all purposes be deemed to include
references to the Disclosure Schedules (including the exhibits). Except as set
forth in Section 3.9.2, this Agreement is not intended to confer upon any Person
other than the Parties any rights or remedies hereunder. No employee or former
employee of the Company or Parent who is not a director of the Company or Parent
shall be deemed a third party beneficiary with respect to any provision of this
Agreement.

    Section 6.9  SEVERABILITY.

    The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the validity or
enforceability of the other provisions. If any provision of this Agreement, or
the application to any Person or any circumstance, is invalid or unenforceable,
(a) a suitable and equitable provision shall be substituted therefor in order to
carry out, so far as may be valid and enforceable, the intent and purpose of the
invalid or unenforceable provision unless the substitution of that provision
would materially frustrate the express intent and purposes of this Agreement and
(b) the remainder of this Agreement and the application of this provision to
other Persons or circumstances shall not be affected by its invalidity or
unenforceability, nor shall invalidity or unenforceability affect the validity
or enforceability of this provision, or the application thereof, in any other
jurisdiction.

    Section 6.10.  INTERPRETATION.

    The headings in this Agreement are for convenience of reference only, do not
constitute part of this Agreement and shall not be deemed to limit or otherwise
affect any of the provisions of this Agreement. Where a reference in this
Agreement is made to a Section or Exhibit, that reference shall be to a Section
of or Exhibit to this Agreement unless otherwise indicated. Whenever the words
"include," "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation."

    Section 6.11.  ASSIGNMENT.

    This Agreement shall not be assignable by operation of law or otherwise, and
any purported assignment in violation of this provision shall be void.

    Section 6.12.  SPECIFIC PERFORMANCE.

    Each Party acknowledges and agrees that the other Party could be irreparably
damaged in the event that its obligations contained in this Agreement are not
performed in accordance with their specific terms or are otherwise breached in
each case on or prior to the Effective Time. Accordingly, each Party agrees that
the other Party will be entitled to an injunction or injunctions to enforce
specifically any covenants in any action in any court having personal and
subject matter jurisdiction, in addition to any other remedy to which that Party
may be entitled at law or in equity.

                                      A-56
<PAGE>

    IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officers of Parent, the Company, Merger Sub Holding Co. and
Merger Sub as of the date of this Agreement.



<TABLE>
<CAPTION>

<S>                                         <C>   <C>

                                            WPP GROUP PLC

                                            By:   /s/ MARTIN SORRELL
                                                  -----------------------------------------
                                                  Name: Martin Sorrell
                                                  Title: Group Chief Executive

                                            YOUNG & RUBICAM INC.

                                            By:   /s/ THOMAS D. BELL, JR.
                                                  -----------------------------------------
                                                  Name: Thomas D. Bell, Jr.
                                                  Title: Chief Executive Officer

                                            YORK MERGER CORP.

                                            By:   /s/ MARTIN SORRELL
                                                  -----------------------------------------
                                                  Name: Martin Sorrell
                                                  Title: Chief Executive Officer

                                            YORK II MERGER CORP.

                                            By:   /s/ MARTIN SORRELL
                                                  -----------------------------------------
                                                  Name: Martin Sorrell
                                                  Title: Chief Executive Officer
</TABLE>


                                      A-57
<PAGE>
                                                                      APPENDIX B

<TABLE>
<S>                                                          <C>
MORGAN STANLEY DEAN WITTER                                   1585 BROADWAY
                                                             NEW YORK, NEW YORK 10036
                                                             (212) 761-4000
</TABLE>

                                  May 11, 2000

Board of Directors
Young & Rubicam Inc.
285 Madison Avenue
New York, NY 10017

Members of the Board:

    We understand that Young & Rubicam Inc. ("Y&R" or the "Company"), WPP Group
plc ("WPP") and York Merger Corp., a wholly owned subsidiary of WPP ("Merger
Sub") propose to enter into an Agreement and Plan of Merger, substantially in
the form of the draft dated May 8, 2000 (the "Merger Agreement") which provides,
among other things, for the merger (the "Merger") of Merger Sub with and into
Y&R. Pursuant to the Merger, among other things, Y&R will become a wholly owned
subsidiary of WPP and each outstanding share of Y&R common stock, par value $.01
per share, including any associated preferred stock purchase rights
(collectively, "Y&R Common Stock"), other than shares held in treasury or held
by WPP or any subsidiary of Y&R or WPP, will be converted into the right to
receive 0.835 (the "Exchange Ratio") American Depositary Shares of WPP ("WPP
Depositary Shares"), each WPP Depositary Share representing five (5) ordinary
shares of nominal value 10 pence each of WPP ("WPP Ordinary Shares"). Each
holder of shares of converted Y&R Common Stock shall have the right to elect to
receive, in lieu of some or all of the WPP Depositary Shares pursuant to the
prior sentence, the WPP Ordinary Shares represented by the WPP Depositary Shares
in respect of which this election is made. The terms and conditions of the
Merger are more fully set forth in the Merger Agreement.

    You have asked for our opinion as to whether the Exchange Ratio pursuant to
the Merger Agreement is fair from a financial point of view to holders of shares
of Y&R Common Stock.

    For purposes of the opinion set forth herein, we have, among other things:

<TABLE>
    <S>     <C>
    (i)     reviewed certain publicly available financial statements and
            other information of the Company and WPP, respectively;

    (ii)    reviewed certain internal financial statements and other
            financial and operating data concerning the Company and WPP,
            respectively;

    (iii)   reviewed certain financial projections prepared by the
            management of the Company and WPP;
</TABLE>

                                      B-1
<PAGE>
                                                      MORGAN STANLEY DEAN WITTER
<TABLE>
    <S>     <C>
    (iv)    discussed the past and current operations and financial
            condition and the prospects of the Company, including
            information relating to certain strategic, financial and
            operational benefits anticipated from the Merger, with
            senior executives of the Company;

    (v)     discussed the past and current operations and financial
            condition and the prospects of WPP, including information
            relating to certain strategic, financial and operational
            benefits anticipated from the Merger with senior executives
            of WPP;

    (vi)    reviewed the pro forma impact of the Merger on WPP's
            earnings per share and cash flows;

    (vii)   reviewed the reported prices and trading activity for Y&R
            Common Stock, WPP Ordinary Shares and WPP Depositary Shares;

    (viii)  compared the financial performance of the Company and WPP
            and the prices and trading activity of Y&R Common Stock, WPP
            Ordinary Shares and WPP Depositary Shares with that of
            certain other publicly-traded companies comparable with the
            Company and WPP, respectively, and their securities;

    (ix)    reviewed the financial terms, to the extent publicly
            available, of certain comparable acquisition transactions
            deemed relevant;

    (x)     participated in discussions and negotiations among
            representatives of the Company, WPP and their financial and
            legal advisors;

    (xi)    reviewed the draft Merger Agreement and certain related
            documents; and

    (xii)   performed such other analyses and considered such other
            factors as we have deemed appropriate.
</TABLE>

    We have assumed and relied upon without independent verification the
accuracy and completeness of the information reviewed by us for the purposes of
this opinion. With respect to the financial projections, including information
relating to certain strategic, financial and operational benefits anticipated
from the Merger, we have assumed that they have been reasonably prepared on
bases reflecting the best currently available estimates and judgments of the
future financial performance of the Company and WPP. In addition, we have
assumed that the Merger will be consummated in accordance with the terms set
forth in the Merger Agreement, including, among other things, that the Merger
will be treated as a tax-free reorganization and/or exchange, each pursuant to
the Internal Revenue Code of 1986. We have also assumed that in connection with
the receipt of all necessary regulatory approvals for the proposed Merger, no
restrictions will be imposed that would have a material adverse effect on the
benefits expected to be derived in the Merger. We have not made any independent
valuation or appraisal of the assets or liabilities of the Company, nor have we
been furnished with any such appraisals. We have relied without independent
verification on the assessment of the management of the Company and WPP on their
ability to retain key clients of the Company and WPP. Our opinion is necessarily
based on financial, economic, market and other conditions as in effect on, and
the information made available to us as of, the date hereof. It should be
understood that subsequent developments or changes in such conditions may affect
this opinion and we do not have any obligation to update, revise or reaffirm
this opinion.

    In arriving at our opinion, we were not authorized to broadly solicit, and
did not broadly solicit, interest from any party with respect to the acquisition
of the Company or any of its assets.

    We have acted as financial advisor to the Board of Directors of the Company
in connection with this transaction and will receive a fee for our services. In
the past, Morgan Stanley & Co. Incorporated and its affiliates have provided
financial advisory and financing services for the Company and have received fees
for the rendering of these services. In the ordinary course of our businesses,
we and our

                                      B-2
<PAGE>
                                                      MORGAN STANLEY DEAN WITTER
affiliates may actively trade the debt and equity securities of the Company and
WPP for our account or for the accounts of customers and, accordingly, we or our
affiliates may at any time hold long or short positions in such securities.

    It is understood that this letter is for the information and use of the
Board of Directors of the Company and may not be used for any other purpose
without our prior written consent, except that this opinion may be included in
its entirety in any filing made by the Company in respect of the transaction
with the Securities and Exchange Commission so long as this opinion is
reproduced in such filing in full and any description of or reference to us or
summary of this opinion and the related analyses in such filing is in a form
acceptable to us and our counsel. In addition, this opinion does not in any
manner address the prices at which WPP Depositary Shares or WPP Ordinary Shares
will trade at any time, including following consummation of the Merger, and
Morgan Stanley expresses no opinion or recommendation as to how the shareholders
of the Company and WPP should vote at the shareholders' meetings held in
connection with the Merger. This opinion does not address the Company's
underlying business decision to pursue the Merger.

    Based on and subject to the foregoing, we are of the opinion on the date
hereof that the Exchange Ratio pursuant to the Merger Agreement is fair from a
financial point of view to holders of shares of Y&R Common Stock.

<TABLE>
<S>  <C>
Very truly yours,

MORGAN STANLEY & CO. INCORPORATED

By:  /s/ Michael J. Boublik
-------------------------------------------------------------
Michael J. Boublik
MANAGING DIRECTOR
</TABLE>

                                      B-3
<PAGE>
                                                                      APPENDIX C

                            [LETTERHEAD OF BEAR STEARNS]

                                  May 11, 2000

The Board of Directors
Young & Rubicam Inc.
285 Madison Avenue
New York, NY 10017

Ladies and Gentlemen:

    We understand that Young & Rubicam Inc. ("YNR") and WPP Group plc ("WPP")
have entered into an Agreement and Plan of Merger (the "AGREEMENT") dated
May 11, 2000, which provides for the merger of YNR with and into a wholly owned
subsidiary of WPP (the "MERGER"). The Agreement provides that upon consummation
of the Merger, each share of Common Stock, par value $0.01 per share, of YNR
("YNR COMMON SHARES") outstanding will be automatically converted into the right
to receive 0.835 American Depositary Shares of WPP ("WPP DEPOSITARY SHARES")
(the "EXCHANGE Ratio"). Each WPP Depositary Share represents five ordinary
shares of WPP. You have provided us with a copy of the Agreement in draft form.

    You have asked us to render our opinion as to whether the Exchange Ratio is
fair, from a financial point of view, to the public shareholders of YNR.

    In the course of performing our review and analyses for rendering this
opinion, we have:

    1.  reviewed the Agreement, in draft form;

    2.  reviewed YNR's Annual Reports to Shareholders and Annual Reports on Form
       10-K for the years ended December 31, 1997 through 1999, and its Reports
       on Form 8-K for the three years ended December 31, 1999;

    3.  reviewed certain operating and financial information, including
       projections for the five years ending December 31, 2004, provided to us
       by YNR's management relating to YNR's business and prospects;

    4.  reviewed certain estimates of revenue enhancements, cost savings and
       other combination benefits expected to result from the Merger, prepared
       and provided to us by YNR's management;

    5.  met with certain members of YNR's senior management to discuss YNR's
       business, operations, historical and projected financial results and
       future prospects;

    6.  reviewed WPP's Annual Reports to shareholders for the years ended
       December 31, 1997 through 1998, and its reports on Form 6-K for the three
       years ended December 31, 1999;

    7.  reviewed certain operating and financial information, including
       projections, provided to us by YNR's management relating to WPP's
       business and prospects;

    8.  reviewed the historical prices, trading multiples and trading volumes of
       the YNR Common Shares and the WPP Depositary Shares;

                                      C-1
<PAGE>
    9.  reviewed publicly available financial data, stock market performance
       data and trading multiples of companies which we deemed generally
       comparable to YNR and WPP;

    10. reviewed the terms of recent mergers and acquisitions of companies which
       we deemed generally comparable to YNR and the Merger;

    11. reviewed the pro forma financial results, financial condition and
       capitalization of WPP giving effect to the Merger; and

    12. conducted such other studies, analyses, inquiries and investigations as
       we deemed appropriate.

    In the course of our review, we have relied upon and assumed, without
independent verification, the accuracy and completeness of the financial and
other information, provided to us by YNR. With respect to projected financial
results and the potential synergies that could be achieved upon consummation of
the Merger, we have assumed that they have been reasonably prepared on bases
reflecting the best currently available estimates and judgments of the senior
management of YNR as to the expected future performance of YNR and WPP,
respectively. We note that we have not met with WPP's management. Accordingly,
our review and analysis of information relating to WPP and the anticipated
revenue enhancements, cost savings and other combination benefits was limited to
publicly available information and information provided to us by YNR's
management. We have relied on YNR's management to provide any and all
information relating to WPP that is relevant to our review and analysis. We have
not assumed any responsibility for the independent verification of any such
information or of the projections and synergy estimates provided to us, and we
have further relied upon the assurances of YNR's senior management that they are
unaware of any facts that would make the information, projections and synergy
estimates provided to us incomplete or misleading.

    In arriving at our opinion, we have not performed or obtained any
independent appraisal of the assets or liabilities of YNR and WPP, nor have we
been furnished with any such appraisals. In connection with our engagement, we
have not solicited, nor were we asked to solicit, third party acquisition
interest in YNR. We have assumed that the Merger will be consummated in a timely
manner and in accordance with the terms of the Agreement without any regulatory
limitations, restrictions, conditions, amendments or modifications that
collectively would have a material effect on YNR and WPP.

    We do not express any opinion as to the price or range of prices at which
the securities of YNR and WPP may trade subsequent to the announcement of the
Merger or as to the price or range of prices at which the securities of WPP may
trade subsequent to the consummation of the Merger.

    We have acted as a financial advisor to YNR in connection with the Merger
and will receive a customary fee for such services, a substantial portion of
which is contingent on successful consummation of the Merger. Bear, Stearns &
Co. Inc. ("BEAR STEARNS") has been previously engaged by YNR to provide certain
investment banking and financial advisory services for which we received
customary fees. In addition, we note that Alan D. Schwartz, Executive Vice
President and Senior Managing Directors of Bear Stearns, is a member of YNR's
Board of Directors. In the ordinary course of business, Bear Stearns may
actively trade the equity and debt securities and senior loans of YNR and/or WPP
for our own account and for the account of our customers and, accordingly, may
at any time hold a long or short position in such securities.

    It is understood that this letter is intended for the benefit and use of the
Board of Directors of YNR and does not constitute a recommendation to the Board
of Directors of YNR or any holders of YNR securities as to how to vote in
connection with the Merger. This opinion does not address YNR's underlying
business decision to pursue the Merger. This letter is not to be used for any
other purpose, or be reproduced, disseminated, quoted from or referred to at any
time, in whole or in part, without our prior written consent; PROVIDED, HOWEVER,
that this letter may be included in its entirety in any joint proxy
statement/prospectus to be distributed to the holders of YNR Common Shares in
connection

                                      C-2
<PAGE>
with the Merger. Our opinion is subject to the assumptions and conditions
contained herein and is necessarily based on economic, market and other
conditions, and the information made available to us, as of the date hereof. We
assume no responsibility for updating or revising our opinion based on
circumstances or events occurring after the date hereof.

    Based on and subject to the foregoing, it is our opinion that, as of the
date hereof, the Exchange Ratio is fair, from a financial point of view, to
YNR's public shareholders.

<TABLE>
<S>                                            <C>
Very truly yours,

BEAR, STEARNS & CO. INC.

By: /s/ Davies B. Beller
---------------------------------------------
Davies B. Beller
Senior Managing Director
</TABLE>

                                      C-3
<PAGE>
                                                                      APPENDIX D
--------------------------------------------------------------------------------

                                  [LETTERHEAD]

PERSONAL AND CONFIDENTIAL
-------------------------------
--------------------------------------------------------------------------------

May 11, 2000

Board of Directors
WPP Group plc
27 Farm Street
London W1X 6RD
UK

Ladies and Gentlemen:

    You have requested our opinion as to the fairness from a financial point of
view to WPP Group plc (the "Company") of the exchange ratio of 0.835 of an
American Depositary Share of the Company ("Company ADSs"), each Company ADS
representing five (5) ordinary shares, nominal value 10p each, of the Company
("Company Shares"), to be paid by the Company for each outstanding share of
common stock, par value $0.01 per share (the "Y&R Shares"), of Young & Rubicam
Inc. ("Y&R") (the "Exchange Ratio") (with each holder of Y&R Shares being
entitled to elect to receive the Company Shares underlying all or a portion of
the Company ADSs the holder is otherwise entitled to receive) pursuant to the
Agreement and Plan of Merger, dated as of May 11, 2000, among the Company, Y&R
and York Merger Corp., a direct wholly owned subsidiary of the Company (the
"Agreement").

    Goldman, Sachs & Co., as part of its investment banking business, is
continually engaged in the valuation of businesses and their securities in
connection with mergers and acquisitions, negotiated underwritings, competitive
biddings, secondary distributions of listed and unlisted securities, private
placements and valuations for estate, corporate and other purposes. We are
familiar with the Company having provided certain investment banking services to
the Company from time to time, including having acted as its financial advisor
in connection with the combination of Ogilvy & Mather's business in Australia
and New Zealand with John Singleton Advertising in October 1998, and having
acted as its financial advisor in connection with, and having participated in
certain of the negotiations leading to, the Agreement. We also have provided
certain investment banking services to Y&R from time to time, including having
acted as an underwriter of the initial public offering of Y&R Shares in
May 1998 and public offerings of Y&R Shares in November 1998, May 1999 and
November 1999. Goldman, Sachs & Co. provides a full range of financial advisory
and securities services, and in the course of its normal trading activities, may
from time to time effect transactions and hold securities, including derivative
securities, of the Company or Y&R for its own account and for the accounts of
customers.

    In connection with this opinion, we have reviewed, among other things, the
Agreement; the Annual Reports and Accounts and Annual Reports on Form 20-F of
the Company for each of the four years ended December 31, 1998; unaudited
preliminary consolidated financial statements for the

                                      D-1
<PAGE>
Company and its subsidiaries for the year ended December 31, 1999; Annual
Reports to Stockholders and Annual Reports on Form 10-K of Y&R for each of the
two years ended December 31, 1999; the Registration Statement on Form S-1,
including the Prospectus contained therein, of Y&R dated May 11, 1998; the
Registration Statement on Form S-3, including the Prospectus contained therein,
of Y&R dated November 17, 1999; certain interim reports to stockholders of the
Company; certain interim reports to stockholders and Quarterly Reports on Form
10-Q of Y&R; certain other communications from the Company and Y&R to their
respective stockholders; the operating budget of Y&R for the year ended
December 31, 2000, prepared by the management of Y&R, and adjustments thereto
made by the management of the Company; and certain internal financial analyses
and forecasts for the Company and certain financial analyses and forecasts for
Y&R prepared by the management of the Company, including certain cost synergies
projected by the management of the Company to result from the transaction
contemplated by the Agreement. We also have held discussions with members of the
senior management of the Company regarding their assessment of the strategic
rationale for, and the potential benefits of, the transaction contemplated by
the Agreement and the past and current business operations, financial condition
and future prospects of the Company and Y&R. In addition, we have reviewed the
reported price and trading activity for the Company Shares, the Company ADSs and
the Y&R Shares, compared certain financial and stock market information for the
Company and Y&R with similar information for certain other companies the
securities of which are publicly traded, reviewed the financial terms of certain
recent business combinations in the advertising and marketing services
industries specifically and in other industries generally and performed such
other studies and analyses as we considered appropriate.

    We have relied upon the accuracy and completeness of all of the financial
and other information discussed with or reviewed by us and have assumed such
accuracy and completeness for purposes of rendering this opinion. In that
regard, we have assumed with your consent that the financial forecasts for Y&R
prepared by the management of the Company have been reasonably prepared on a
basis reflecting the best estimates currently available to the Company and
judgments of the Company, and that such forecasts will be realized in the
amounts and time periods contemplated thereby. In addition, we have not made an
independent evaluation or appraisal of the assets and liabilities of the Company
or Y&R or any of their subsidiaries and we have not been furnished with any such
evaluation or appraisal. Our advisory services and the opinion expressed herein
are provided for the information and assistance of the Board of Directors of the
Company in connection with its consideration of the transaction contemplated by
the Agreement and such opinion does not constitute a recommendation as to how
any holder of Company ADSs or Company Shares should vote with respect to such
transaction.

    Based upon and subject to the foregoing and based upon such other matters as
we consider relevant, it is our opinion that as of the date hereof the Exchange
Ratio pursuant to the Agreement is fair from a financial point of view to the
Company.

Very truly yours,


/s/ GOLDMAN, SACHS & CO.
---------------------------------------------
Goldman, Sachs & Co.


                                      D-2
<PAGE>
                                                                      APPENDIX E


                                                        Merrill Lynch
                                                        International
                                                        Ropemaker Place
                                                        25 Ropemaker Street
                                                        London EC2Y 9LY
                                                        Telephone: 020 7628 1000
                                                        Direct: 020 7867
                                                        Telex: 8811047 MERLYN G


[LOGO]

                                          May 11, 2000

Board of Directors
WPP Group plc
27 Farm Street
London W1X 6RD
United Kingdom

Members of the Board of Directors:

    Young & Rubicam Inc. (the "Company"), WPP Group plc ("WPP") and York Merger
Corp., a newly formed, wholly owned subsidiary of WPP (the "Acquisition Sub"),
are entering into an Agreement and Plan of Merger, dated as of May 11, 2000 (the
"Agreement"), pursuant to which the Acquisition Sub will be merged with and into
the Company in a transaction (the "Merger") in which each outstanding share of
the Company's common stock, par value $.01 per share, including any associated
preferred stock purchase rights (the "Company Shares"), will be converted into
the right to receive 0.835 (the "Exchange Ratio") American Depositary Shares of
WPP ("WPP Depositary Shares") (each such WPP Depositary Share representing five
(5) ordinary shares of nominal value 10p each of WPP ("WPP Ordinary Shares", and
together with the WPP Depositary Shares, the "WPP Shares")). Each holder of
converted Company Shares will have the right to elect to receive, in lieu of
some or all of the WPP Depositary Shares pursuant to the prior sentence, the WPP
Ordinary Shares represented by the WPP Depositary Shares in respect of which
this election is made.

    You have asked us whether, in our opinion, the Exchange Ratio is fair from a
financial point of view to WPP.

    In arriving at the opinion set forth below, we have, among other things:

    (1) Reviewed certain publicly available business and financial information
       relating to the Company and WPP that we deemed to be relevant;

    (2) Reviewed certain information, including certain financial forecasts for
       Y&R, and certain internal financial forecasts for WPP, in each case
       prepared by the management of WPP, relating to the business, earnings,
       cash flow, assets, liabilities and prospects of the Company and WPP,
       furnished to us by the Company and WPP, as well as the amount and timing
       of the cost savings and synergies expected to result from the Merger (the
       "Expected Synergies") furnished to us by the Company and WPP,
       respectively;

                                      E-1
<PAGE>
    (3) Conducted discussions with members of senior management and
       representatives of the Company and WPP concerning the matters described
       in clauses 1 and 2 above, as well as their respective businesses and
       prospects before and after giving effect to the Merger and the Expected
       Synergies;

    (4) Reviewed the market prices and valuation multiples for the Company
       Shares and WPP Shares and compared them with those of certain publicly
       traded companies that we deemed to be relevant;

    (5) Reviewed the results of operations of the Company and WPP and compared
       them with those of certain publicly traded companies that we deemed to be
       relevant;

    (6) Compared the proposed financial terms of the Merger with the financial
       terms of certain other transactions that we deemed to be relevant;

    (7) Participated in certain discussions and negotiations among
       representatives of the Company and WPP and their financial and legal
       advisors;

    (8) Reviewed the potential pro forma impact of the Merger;

    (9) Reviewed the Agreement; and

    (10) Reviewed such other financial studies and analyses and took into
       account such other matters as we deemed necessary, including our
       assessment of general economic, market and monetary conditions.

    In preparing our opinion, we have assumed and relied on the accuracy and
completeness of all information supplied or otherwise made available to us,
discussed with or reviewed by or for us, or publicly available, and we have not
assumed any responsibility for independently verifying such information or
undertaken an independent evaluation or appraisal of any of the assets or
liabilities of the Company or WPP or been furnished with any such evaluation or
appraisal. In addition, we have not assumed any obligation to conduct, nor have
we conducted, any physical inspection of the properties or facilities of the
Company or WPP. With respect to the financial forecast information and the
Expected Synergies furnished to or discussed with us by the Company or WPP, we
have assumed that they have been reasonably prepared and reflect the best
currently available estimates and judgment of the Company's or WPP's management
as to the expected future financial performance of the Company or WPP, as the
case may be, and the Expected Synergies. We have further assumed that the Merger
will qualify as a tax-free reorganization for U.S. federal income tax purposes.
We have also assumed that the Merger will be consummated on the terms and
conditions set forth in the Agreement.

    Our opinion is necessarily based upon market, economic and other conditions
as they exist and can be evaluated on, and on the information made available to
us as of, the date hereof. We have assumed that in the course of obtaining the
necessary regulatory or other consents or approvals (contractual or otherwise)
for the Merger, no restrictions, including any divestiture requirements or
amendments or modifications, will be imposed that will have a material adverse
effect on the contemplated benefits of the Merger.

    We are acting as financial advisor to WPP in connection with the Merger and
will receive a fee from WPP for our services, a significant portion of which is
contingent upon the consummation of the Merger. In addition, WPP has agreed to
indemnify us for certain liabilities arising out of our engagement. We are
currently providing, and have in the past provided, financial advisory and
financing services to WPP and the Company, including with respect to strategic
acquisitions which have been recently considered by the Company, and may
continue to do so, and have received and may receive, fees for the rendering of
such services. In addition, in the ordinary course of our business, we may
actively trade the Company Shares and other securities of the Company, as well
as WPP Shares, for

                                      E-2
<PAGE>
our own account and for the accounts of customers and, accordingly, may at any
time hold a long or short position in such securities.

    This opinion is for the use and benefit of the Board of Directors of WPP.
Our opinion does not address the merits of the underlying decision by WPP to
engage in the Merger and does not constitute a recommendation to any shareholder
of WPP as to how such shareholder should vote on the proposed Merger or any
matter related thereto.

    We are not expressing any opinion herein as to the prices at which WPP
Shares will trade following the announcement or consummation of the Merger.

    On the basis of and subject to the foregoing, we are of the opinion that, as
of the date hereof, the Exchange Ratio is fair from a financial point of view to
WPP.

                                          Very truly yours,
                                          MERRILL LYNCH INTERNATIONAL

                                      E-3
<PAGE>

                                                                      APPENDIX F


                                 WPP GROUP PLC
                          SUMMARY LISTING PARTICULARS
                RELATING TO THE MERGER WITH YOUNG & RUBICAM INC.

1.  LISTING PARTICULARS

    Listing Particulars dated 25 August 2000 and prepared in accordance with the
    Listing Rules made under section 142 of the Financial Services Act 1986 have
    been published and alone contain full details relating to WPP Group plc and
    the new WPP ordinary shares of 10 pence each ("WPP Ordinary Shares") to be
    issued, credited as fully paid (the "Consideration Shares"), in connection
    with the proposed merger of WPP Group plc with Young & Rubicam Inc. (the
    "Merger.")

    The directors of WPP Group plc ("WPP") and the proposed new directors of WPP
    (the ``Proposed Directors"), whose names appear in paragraph 2 below, accept
    responsibility for the information contained in the Listing Particulars and
    these Summary Listing Particulars. To the best of the knowledge and belief
    of the directors of WPP (the "Directors") and the Proposed Directors (who
    have taken all reasonable care to ensure that such is the case), the
    information contained in these documents is in accordance with the facts and
    does not omit anything likely to affect the import of such information.

    The Directors of WPP and the Proposed Directors are satisfied that these
    Summary Listing Particulars contain a fair summary of the key information
    set out in the Listing Particulars.

    These Summary Listing Particulars have been authorised for issue by the UK
    Listing Authority without approval of their contents.

2.  DIRECTORS AND REGISTERED OFFICE

2.1 The Directors of WPP and their respective functions are as follows:

<TABLE>
<CAPTION>
DIRECTOR                                         OFFICE
<S>                                              <C>
Hamish Maxwell                                   Chairman, Non-Executive Director
Sir Martin Stuart Sorrell                        Group Chief Executive
Paul Winston George Richardson                   Group Finance Director
Brian John Nordstrom Brooks                      Chief Human Resources Officer
Eric Ralph Salama                                Group Director of Strategy and
                                                 Chief Executive of wpp.com
John Jeremy David Bullmore                       Non-Executive Director
Esther Dyson                                     Non-Executive Director
Steven Heyer                                     Non-Executive Director
Masao Inagaki                                    Non-Executive Director
John Bernard Haysom Jackson                      Non-Executive Director
Christopher Alasdhair Anthony Ewan Mackenzie     Non-Executive Director
Stanley Wilbur Morten                            Non-Executive Director
John Anthony Quelch                              Non-Executive Director
Joel Emanuel Smilow                              Non-Executive Director
</TABLE>

    The registered office of WPP is Pennypot Industrial Estate, Hythe, Kent CT21
    6PE, England. The business address of WPP is 27 Farm Street, London W1J 5RJ,
    England.

    Steven Heyer and Joel Smilow will retire as Directors of WPP on the date and
    time upon which all the conditions to the Merger have been satisfied or
    waived (the "Effective Date").

                                      F-1
<PAGE>
2.2 The Proposed Directors and their proposed functions will be as follows:

<TABLE>
<CAPTION>
PROPOSED DIRECTOR             OFFICE
<S>                           <C>
Michael James Dolan           Chief Executive Officer of Y&R
Frederick Warren Hellman      Non-Executive Director
Michael Hugh Jordan           Non-Executive Director
Sir Christopher Lewinton      Non-Executive Director
</TABLE>

3.  INFORMATION ON WPP

    WPP Group plc is one of the leading communications services companies in the
    world. Through its 70 operating companies, it provides clients with
    advertising, media investment management, information and consultancy,
    public relations and public affairs, branding and identity, healthcare and
    specialist communications services. WPP operating companies include
    Ogilvy & Mather Worldwide, J. Walter Thompson, Conquest, MindShare, Research
    International, Millward Brown, Hill and Knowlton, Ogilvy Public Relations
    Worldwide, CommonHealth and Enterprise IG. WPP is a member of Business
    Week's Global 1000, the Forbes International 800, the FTSE-Eurotop 300, the
    United Kingdom's FTSE 100 companies and the MSCI. The Company aims to
    provide clients, both national and international, with a comprehensive and,
    as required, integrated range of communications services of the highest
    quality, strategically and tactically.

    The WPP Group employs 39,000 people (including associates) in 950 offices in
    92 countries. Clients include more than 300 of the Fortune 500 and over
    one-half of the Nasdaq 100. In the year ended 31 December 1999, WPP had
    annual turnover (gross billings) of US$15.1 billion (L9.34 billion),
    revenues of US$3.5 billion (L2.2 billion) and pre-tax profits of
    US$413 million (L255 million). As at 31 December 1999 net assets were
    US$529 million (L327 million).

4.  INFORMATION ON YOUNG & RUBICAM INC. ("Y&R")

    Y&R is one of the world's leading global communications services groups. The
    Y&R Group (``Y&R Group") comprises a network of agencies in the fields of
    advertising, media investment management, information and consultancy,
    public relations and public affairs, branding and identity, healthcare and
    specialist communications. Y&R has over 300 offices in over 70 countries
    around the world. For the year ended 31 December 1999, the Y&R Group had
    worldwide billings of US$8.53 billion. Set out below is a summary of some of
    the key areas of the Y&R Group's business.

    Young & Rubicam Advertising is a leading full-service consumer advertising
    agency, offering expertise in consumer research, strategic and creative
    development, and media buying and planning. In addition to agency networks
    in a number of countries, Young & Rubicam Advertising is represented in the
    Asia Pacific region by Dentsu, Young & Rubicam, a series of joint ventures
    with Dentsu, Inc. of Japan, in which Y&R is the majority partner (owning at
    least 66% of each joint venture) except in Japan, the Philippines and India.

    The Media Edge is a leading, full-service global media business and The
    Digital Edge, formed in 1999, specialises in planning and buying for
    internet media, electronic commerce and other fledgling technologies and
    digital media.

    Y&R 2.1 is a new type of advertising agency, dedicated to integrating
    on-line and off-line marketing communications in support of brands around
    the world.

    The Bravo Group and Kang & Lee are full-service advertising agencies in the
    United States devoted to creating communications targeted at fast-growing
    multicultural groups. Bravo's focus is on Hispanic Americans, Kang & Lee's
    on Asian Americans.

                                      F-2
<PAGE>
    Impiric is a global, full-service consulting and communications firm that
    provides strategic, customer-centred solutions to business problems. Impiric
    works closely with KnowledgeBase Marketing, another recently acquired Y&R
    company.

    Y&R's diversified communications group includes Burson-Marsteller, the
    world's largest public relations and public affairs firm, Landor Associates,
    one of the world's leading branding consultancies and strategic design
    firms, Cohn & Wolfe, a public relations and public affairs firm and
    Sudler & Hennessey, an international healthcare communications agency. Most
    recently, Y&R acquired Robinson Lerer & Montgomery, a leader in the field of
    strategic communications.

    In the area of internet marketing, Y&R has made considerable investments
    including Luminant Worldwide Corporation, a key player in the interactive
    services arena, Harris Interactive, a leader in on-line market research, and
    Digital Convergence, MediaPlex and iWeb, creators of new internet vehicles
    that deliver marketing messages and content to consumers.

5.  SUMMARY OF THE TERMS OF THE PROPOSED MERGER WITH Y&R


5.1 WPP, Y&R, York Merger Corp. and York II Merger Corp. have entered into an
    agreement and plan of merger dated as of 11 May 2000 (the "Merger
    Agreement"). Pursuant to the Merger Agreement, the Merger will be effected
    by a statutory merger under Delaware general corporate law whereby York II
    Merger Corp. (a Delaware corporation and an indirect wholly-owned subsidiary
    of WPP), will be merged with and into Y&R and Y&R, as the surviving entity,
    will become an indirect wholly-owned subsidiary of WPP in accordance with
    the terms of the Merger Agreement.



5.2 The Merger will become effective and be completed when Y&R and York II
    Merger Corp. file a certificate of merger with the Secretary of State of the
    State of Delaware or at a later time, if so specified in the certificate of
    merger. It is expected that the Merger will become effective on the same day
    as the closing of the Merger, which will take place either as soon as
    practicable after the conditions described in the Merger Agreement have been
    satisfied or waived or on another date agreed upon by WPP and Y&R.


    WPP Ordinary Shares will continue to be traded on the London Stock Exchange
    and WPP American Depositary Shares (``WPP ADSs") will remain listed on the
    Nasdaq. Following completion of the Merger, WPP will indirectly own all of
    the common stock of Y&R.

5.3 At the time the Merger becomes effective:


    (i) each share of common stock at a par value of US$0.01 per share of Y&R (a
        "Y&R Common Share") will be cancelled and converted into a right to
        receive 0.835 of a WPP ADS (each holder of Y&R Common Shares may elect
        to receive WPP Ordinary Shares instead of all or a portion of the WPP
        ADSs the holder is otherwise entitled to receive); and


    (ii) each outstanding option to acquire Y&R Common Shares (a "Y&R Stock
         Option") will be converted into an option to purchase WPP ADSs or WPP
         Ordinary Shares as described in paragraph 5.5 below.

    If, before the completion of the Merger, a stock split, a share combination,
    stock dividend, recapitalisation or redenomination of share capital or other
    similar transaction causes a change to the number of outstanding Y&R Common
    Shares or WPP Ordinary Shares, or the number of WPP Ordinary Shares
    represented by a WPP ADS changes, the number of WPP ADSs or WPP Ordinary
    Shares, as the case may be, into which a Y&R Common Share will be converted
    under the terms of the Merger, will be appropriately adjusted.

                                      F-3
<PAGE>
5.4 Each WPP ADS represents five WPP Ordinary Shares and holders of Y&R Common
    Shares ("Y&R Share Owners") will receive 0.835 of a WPP ADS in exchange for
    each Y&R Common Share they own at the Effective Date. Y&R Share Owners will
    have the right to elect to receive WPP Ordinary Shares instead of all or a
    proportion of the WPP ADSs they are otherwise entitled to receive. Y&R Share
    Owners who would otherwise have been entitled to receive a fraction of a WPP
    ADS or WPP Ordinary Share will receive, in lieu thereof, a payment in cash
    (without interest) equal to their proportionate interest in the net proceeds
    from the sale of the WPP Ordinary Shares representing the aggregate of such
    fractional entitlements which such Y&R Share Owners would be entitled to
    receive pursuant to the terms of the Merger.

5.5 Upon the Merger becoming effective, all Y&R Stock Options held by a person
    whose primary place of residence or employment with Y&R is in Europe will be
    converted into options to acquire WPP Ordinary Shares. All other options
    will be converted into options to acquire WPP ADSs.

    Each Y&R Stock Option will remain subject to the terms of the Y&R stock
    option plan under which it was issued, except that after the Merger becomes
    effective, Y&R Stock Options that are converted into options to acquire WPP
    Ordinary Shares will be exercisable for 4.175 WPP Ordinary Shares for each
    Y&R Common Share subject to that option before the Merger and all other
    options will be exercisable for 0.835 of a WPP ADS for each Y&R Common Share
    subject to that option before the Merger.

    The exercise price per WPP Ordinary Share or WPP ADS, as applicable, for
    each of these options will be the exercise price per Y&R Common Share
    applicable to that option before completion of the Merger divided by 4.175,
    if the option is exercisable for WPP Ordinary Shares, or 0.835, if the
    option is exercisable for WPP ADSs.

    Notwithstanding the foregoing, the number of WPP Ordinary Shares or WPP
    ADSs, as applicable, and the exercise price per WPP Ordinary Share or WPP
    ADS applicable to any Y&R Stock Option intended to be an "incentive stock
    option", as defined in section 422 of the US Internal Revenue Code of 1986,
    as amended (the "US Code"), will be adjusted as required by that section of
    the US Code.

5.6 Y&R Share Owners who receive WPP ADSs (or WPP Ordinary Shares) will be
    entitled to receive all dividends and distributions payable on the WPP
    Ordinary Shares represented by such WPP ADSs (or those WPP Ordinary Shares)
    except for the interim dividend payable in respect of the year ending
    31 December 2000 and any other dividend the record date of which falls prior
    to the Effective Date.

5.7 Under the terms of the Merger, the Y&R 3% Convertible Subordinated Notes due
    2005 (the "Y&R Convertible Notes") will become convertible into 0.835 of a
    WPP ADS for each Y&R Common Share into which the Y&R Convertible Notes are
    convertible prior to completion of the Merger.

5.8 Accordingly, it is expected that completion of the Merger will require the
    issue of up to approximately 433,710,712 new WPP Ordinary Shares (including
    new WPP Ordinary Shares to be issued on the exercise of the Y&R Stock
    Options, the conversion of the Y&R Convertible Notes and as deferred
    consideration for previous Y&R acquisitions). On the basis of a price of
    L8.45 for each WPP Ordinary Share (based on the closing middle market price
    on 11 May 2000, the last business day prior to the announcement of the
    Merger), the Merger values the entire fully diluted share capital of Y&R at
    approximately L3.6 billion.

5.9 Immediately following the Merger becoming effective, the interests of WPP's
    existing Share Owners are expected to represent approximately two-thirds and
    those of Y&R Share Owners and option holders one-third of the enlarged fully
    diluted issued share capital of WPP.

5.10 The Merger is subject to a number of conditions, including approval by WPP
    Share Owners and Y&R Share Owners at their respective general meetings. In
    addition, the Merger is conditional on a number of regulatory and other
    consents and confirmations in the European Union and certain

                                      F-4
<PAGE>
    other jurisdictions. The Merger is expected to be completed on 3 October
    2000 assuming that the various approvals and regulatory consents are
    received by such date.

6.  TERMINATION OF THE MERGER AGREEMENT AND TERMINATION PAYMENTS

6.1 The Merger Agreement may be terminated before the Effective Date, whether
    before or after approval by Y&R Share Owners and WPP Share Owners, by the
    mutual written consent of Y&R and WPP or by either party in certain
    circumstances.

6.2 In certain circumstances a termination payment of either US$25 million or
    US$75 million may be payable by WPP to Y&R or US$25 million or US$175
    million by Y&R to WPP pursuant to the Merger Agreement.

7.  SALE RESTRICTIONS

    Contemporaneously with the execution of the Merger Agreement, WPP entered
    into no-sale agreements with sixteen senior executives of Y&R, including
    Mr Thomas D. Bell Jr., Y&R's chairman and chief executive officer,
    Mr Michael J. Dolan, the chief executive officer of Y&R following completion
    of the Merger, Edward H. Vick, worldwide chairman and chief executive
    officer of Y&R Advertising and Mr Peter A. Georgescu, former chairman and
    chief executive of Y&R. Under these agreements, these senior executives and
    Mr Georgescu have agreed not to sell a total of approximately six million of
    their Y&R Common Shares and/or the shares received from the exercise of
    their Y&R Stock Options (and, following completion of the Merger, the WPP
    Ordinary Shares and options which they will receive under the terms of the
    Merger in exchange for those shares and options) for a one year period
    ending on 11 May 2001.

8.  DIVIDENDS AND DIVIDEND POLICY

    It is expected that half yearly dividends will continue to be paid on WPP
    Ordinary Shares in July and November in each year. The level of future WPP
    dividends will be dependent upon WPP's earnings, financial condition and
    other factors affecting its businesses. However, the payment of a dividend
    in any period cannot be guaranteed and is ultimately within the discretion
    of the Board of WPP.

    Holders of WPP Ordinary Shares receive dividends in pounds sterling.
    Citibank, N.A., in its capacity as depositary in respect of WPP ADSs (the
    ``Depositary"), will convert into US dollars any cash dividend paid by WPP
    on the WPP Ordinary Shares, unless it is not reasonable, because of
    governmental regulation or otherwise, for the Depositary to effect the
    conversion into US dollars. The Depositary will distribute those US dollars,
    after deducting its fees and expenses, to holders of WPP ADSs.

    The Consideration Shares will rank PARI PASSU in all respects with the
    existing WPP Ordinary Shares except that they will not rank for the interim
    dividend payable in respect of the year ending 31 December 2000 or for any
    other dividend the record date of which falls prior to the Effective Date.

9.  ACCOUNTING TREATMENT AND REPORTING

    WPP will account for the Merger using the acquisition method of accounting
    under UK GAAP in accordance with FRS 6 "Acquisitions and Mergers". This
    results in pro forma goodwill of approximately L3,964.3 million (as sourced
    from the pro forma information in Part IV of the Listing Particulars) based
    on the closing mid-market price of WPP Ordinary Shares of L9.65 on
    30 June 2000, and 73.2 million Y&R Common Shares and 23.6 million Y&R Stock
    Options in issue as at 30 June 2000. This also assumes that 404 million new
    WPP Ordinary Shares will have been issued in connection with the Merger. In
    calculating the number of new WPP Ordinary Shares to be issued, no account
    has been taken of (i) any Y&R Common Shares issued since 30 June 2000; (ii)
    any Y&R Stock Options granted since 30 June 2000; (iii) any WPP Ordinary
    Shares to be issued in respect of the Y&R Convertible Notes or (iv) any new
    WPP Ordinary Shares that will have to be issued as consideration for certain
    previous acquisitions by Y&R. The actual goodwill arising as a result of the
    Merger will be based on the closing mid-market price of WPP Ordinary Shares
    and the number of Y&R Common Shares and Y&R Stock Options in issue at the
    Effective Date.

                                      F-5
<PAGE>
    Goodwill arising on the transaction has been assumed to have an indefinite
    useful economic life and will therefore not be amortised. Goodwill assumed
    to have an indefinite useful economic life is subject to an annual
    impairment review conducted in accordance with FRS 11 "Impairment of Fixed
    Assets and Goodwill".

    The financial year end of WPP will continue to be 31 December in each year.
    The consolidated accounts of WPP will be published in sterling and will be
    prepared in accordance with UK GAAP, with a reconciliation of certain
    financial information to US GAAP. WPP plans to introduce quarterly earnings
    reporting during 2002.

10. RISK FACTORS RELATING TO THE MERGER

10.1 THE PERFORMANCE OF THE ENLARGED WPP GROUP WILL BE AFFECTED BY ITS ABILITY
     TO RETAIN KEY PERSONNEL.

    The employees of both the WPP Group and the Y&R Group are important and the
    performance of the enlarged WPP Group will be affected by its ability to
    retain these employees after completion of the Merger.

    Other than the 22 senior executives and other key employees who have
    entered, or are to enter, into employment agreements with Y&R, personnel of
    Y&R are generally not subject to employment contracts and therefore may
    terminate their employment at any time. Furthermore, those 22 individuals
    entering into new employment agreements may voluntarily terminate their
    employment at any time, although in doing so they would forfeit their rights
    under such employment agreements to receive salary, bonuses and other
    benefits.

    If the enlarged WPP Group is unable to retain Y&R's and WPP's senior
    executives and key employees, or fails to attract qualified personnel to
    replace any employees who leave, the business of the enlarged WPP Group may
    be materially and adversely affected.

10.2 EXISTING CLIENTS MAY BE LOST AS A RESULT OF THE MERGER.

    The performance of the enlarged WPP Group will be affected by its ability to
    retain the existing clients of WPP and Y&R and attract new clients. The
    ability to retain existing clients and attract new clients may, in some
    cases, be limited by clients' policies on conflicts of interest. These
    policies can in some cases prevent one agency and, in limited circumstances,
    different agencies under the same holding company, from performing similar
    services for competing products or companies. If the enlarged WPP Group
    fails to maintain existing clients or attract new clients, its business may
    be materially and adversely affected.

10.3 THE COST SAVINGS AND OTHER BENEFITS EXPECTED FROM THE MERGER MAY NOT BE
     REALISED.

    It is expected that the Merger will result in cost savings and other
    benefits to the enlarged WPP Group. In that regard, estimated pre-tax annual
    operating savings of US$30 million are expected to be achieved by the end of
    2001. However, this cost saving estimate is inherently subject to
    significant uncertainties and contingencies, many of which are beyond the
    control of WPP and Y&R. There can be no assurances that the enlarged WPP
    Group will achieve these cost savings. The enlarged WPP Group's ability to
    successfully realise these cost savings and benefits and the timing of this
    realisation may be affected by a variety of factors and as a result the
    market price of the WPP Ordinary Shares and WPP ADSs could be adversely
    affected.

10.4 THE MARKET PRICE OF WPP ORDINARY SHARES AND WPP ADSS MAY BE SUBJECT TO
     DOWNWARD PRESSURE FOR A PERIOD OF TIME AS A RESULT OF SALES BY Y&R SHARE
     OWNERS.

    In connection with the Merger, Y&R Share Owners may sell a significant
    number of the WPP ADSs or WPP Ordinary Shares they will receive in the
    Merger. These sales could adversely affect the

                                      F-6
<PAGE>
    market price of the WPP Ordinary Shares and WPP ADSs for a period of time
    after completion of the Merger.

11. DIRECTORS' CONTRACTS

11.1 SIR MARTIN SORRELL

    (a) Sir Martin Sorrell's services to the WPP Group outside the USA are
       provided by JMS Financial Services Limited ("JMS") and he is employed by
       WPP Group USA, Inc. for his duties in the USA.

    (b) Taken together, the agreement with JMS (the "UK Agreement") and the
       agreement with Sir Martin Sorrell (the "US Agreement") provide for annual
       salary and fees of L840,000, annual pension contributions of L336,000, an
       annual bonus of up to 200% of his annual salary and fee, and
       participation in the Leadership Equity Acquisition Plan ("LEAP"). In
       addition, JMS is entitled to phantom options linked to the WPP Ordinary
       Share price, granted in 1993 and 1994.

    (c) Sir Martin Sorrell and JMS have, in addition, agreed to defer their
       respective interests under two incentive plans (the Capital Investment
       Plan and the Notional Share Award Plan) until September 2004. JMS has
       also stated its intention not to exercise its phantom options in respect
       of 1993 until March 2003 and has agreed to defer its interests in the
       phantom options in respect of 1994 until March 2004.

    (d) In addition, WPP is under an obligation to reimburse JMS the cost of
       providing life and accident insurance, health insurance, other benefits
       as may be agreed from time to time and 50% of the reasonable cost of
       providing insurance against the UK Agreement and the US Agreement
       terminating in the event of death, ill-health or disability.

    (e) WPP may terminate the UK Agreement and the US Agreement with immediate
       effect for certain defaults committed by either JMS or Sir Martin Sorrell
       and in the event of Sir Martin Sorrell's ill-health or disability in
       accordance with the provisions of the UK Agreement and the US Agreement
       ("Permitted Terminations").

    (f) In a number of specified circumstances, such as a reduction by WPP in
       the fees payable or the bonus and incentive provisions contained in the
       UK Agreement and the US Agreement, JMS and Sir Martin Sorrell may
       terminate the UK Agreement and the US Agreement and any such termination
       will be deemed to be a termination of the UK Agreement and the US
       Agreement by WPP. JMS may terminate the UK Agreement if a person acquires
       20% or more of WPP and, within 12 months, the majority of the Board of
       WPP alters and JMS does not approve the appointments to the Board of WPP.
       If the US Agreement terminates (for reasons other than a US divestment
       following which Sir Martin Sorrell is offered similar employment with
       another member of the WPP Group), the UK Agreement will also terminate.
       Upon a change of control of WPP, JMS and Sir Martin Sorrell may terminate
       the UK Agreement and the US Agreement respectively within 90 days and WPP
       is obliged to pay two times the annual fees, salary and bonuses and, in
       respect of the US Agreement, pension contributions payable to JMS and Sir
       Martin Sorrell. If WPP terminates the UK Agreement and the US Agreement
       for any reason other than a Permitted Termination then WPP shall pay to
       JMS and Sir Martin Sorrell amounts representing twice of each of their
       annual fee and salary.

    (g) Sir Martin Sorrell has also entered into certain restrictive covenants
       which apply for the period of 12 months following termination of the UK
       Agreement and the US Agreement.

                                      F-7
<PAGE>
11.2 MR PAUL RICHARDSON

    Mr Paul Richardson has a service agreement dated 8 January 1997. The
    agreement is terminable at any time on 12 months' notice by either party.
    Mr Richardson is entitled to receive an annual salary from 1 April 1999 of
    L225,000, an annual bonus of between 50% and 75% of base salary subject to
    the satisfaction of annual performance targets and to participate in the WPP
    Performance Share Plan and LEAP. Mr Richardson is also entitled to a pension
    contribution equal to 10% of base salary, a car allowance, private medical
    cover and risk benefit cover.

11.3 MR BRIAN BROOKS

    Mr Brian Brooks has a service agreement dated 1 June 1993. The agreement is
    terminable at any time by not less than 12 months' written notice given by
    either party. Mr Brooks is entitled to receive an annual salary of
    US$325,000, a bonus of between 50% and 75% of base salary subject to certain
    conditions being met and incentives under the WPP Performance Share Plan and
    LEAP. Mr Brooks is also entitled to be a member of the medical, dental,
    retirement and disability plan established by WPP Group USA, Inc. and life
    insurance cover.

11.4 MR ERIC SALAMA

    Mr Eric Salama has a service agreement dated 1 April 1997. The agreement is
    terminable at any time on 12 months' notice by either party. Mr Salama is
    entitled to receive an annual salary from 1 April 1999 of L165,000, an
    annual bonus of between 50% and 75% of base salary subject to the
    satisfaction of annual performance targets and to participate in the WPP
    Performance Share Plan and LEAP. Mr Salama is also entitled to a pension
    contribution equal to 10% of base salary, a car allowance, private medical
    cover and risk benefit cover.

11.5 NON-EXECUTIVE DIRECTORS

    The following non-executive Directors all have letters of appointment for a
    three-year term and are entitled to receive the fees set out below and to be
    reimbursed all reasonable out of pocket expenses:

<TABLE>
<CAPTION>
NAME                                                     FEES     DATE OF APPOINTMENT
<S>                                                    <C>        <C>
Hamish Maxwell.......................................   L102,000  15 July 1996
Jeremy Bullmore(1)...................................    L25,000  23 December 1987
Esther Dyson(2)......................................    L25,000  28 June 1999
Steven Heyer.........................................    L25,000  18 May 2000
Masao Inagaki(3).....................................         --  14 September 1998
John Jackson.........................................    L30,000  28 September 1993
Christopher Mackenzie................................    L25,000  14 March 2000
Stanley Morten.......................................    L30,000  2 December 1991
John Quelch..........................................    L25,000  11 February 1988
Joel Smilow..........................................    L25,000  23 April 1998
</TABLE>

------------------------

    NOTES:

     (1)  In addition to his fee as a non-executive Director, Jeremy Bullmore is
       also entitled to receive further remuneration under his consulting
       arrangements with WPP. In this respect, for the year ended 31 December
       1999, Mr Bullmore received an additional L46,000 and the sum of L11,000
       as a car allowance.

     (2)  In addition to her fee as a non-executive Director, Esther Dyson is
       entitled to consulting fees of US$10,000 per day for services she
       provides to wpp.com. She may elect to receive all or part of this fee in
       the form of WPP Ordinary Shares.

                                      F-8
<PAGE>
     (3)  Pursuant to the agreement referred to in paragraph 15.1(c) of this
       document, Asatsu-DK, Inc. has the right to appoint a non-executive
       Director to the WPP Board subject to it retaining its shareholding in
       WPP. Mr Inagaki was appointed pursuant to this right.

     (4)  Steven Heyer and Joel Smilow will retire as Directors of WPP on the
       Effective Date.

12. PROPOSED DIRECTORS' SERVICE CONTRACTS AND LETTERS OF APPOINTMENT

12.1 MR MICHAEL DOLAN'S SERVICE CONTRACT


    (a) Contemporaneously with the execution of the Merger Agreement, Y&R
       entered into a service agreement with Mr Michael J. Dolan, a vice
       chairman of Y&R and Y&R's president and chief operating officer, to serve
       as chief executive officer of Y&R following the Merger.


    (b) Mr Dolan's service agreement provides for an initial four year term of
       employment which begins upon completion of the Merger. The service
       agreement also provides for a one year extension of the term of
       Mr Dolan's employment. Under his service agreement, Mr Dolan's
       remuneration will comprise:

        (i) a starting annual base salary of US$800,000, subject to increase by
            WPP;

        (ii) an annual cash bonus with a target bonus amount of US$600,000 (but
             with an opportunity to earn up to 200% of his base salary) to be
             determined based on the achievement of annual targets provided that
             for the year 2000, Mr Dolan's annual bonus will not be less than
             US$800,000;

       (iii) a one-time stay bonus of US$800,000 payable on the first
             anniversary of completion of the Merger if Mr Dolan is then an
             employee of Y&R;

        (iv) on 1 January 2001, an award of 5,000 units (indexed to the value of
             WPP Ordinary Shares) pursuant and subject to the terms and
             conditions of a long-term incentive plan to be established after
             completion of the Merger. The plan under which the award will be
             made will be modelled on the WPP Operating Company Long Term
             Incentive Plan;

        (v) in September 2001, the grant of stock options to acquire WPP ADSs
            with an aggregate fair market value equal to his annual base salary
            at that time, subject to the terms of the WPP Group Executive Stock
            Option Plan (1996);

        (vi) the right to participate in LEAP and the incentive and employee
             stock option programmes of WPP and the employee benefit programmes
             of Y&R on special terms.

    (c) Mr Dolan's service agreement also provides that if his employment is
       terminated by Y&R without cause (as defined in the service agreement) or
       he leaves Y&R for good reason (as defined in the service agreement)
       within two years following completion of the Merger, he will be entitled
       to receive:

        (i) a pro-rata bonus for the performance year in which his contract is
            terminated;

        (ii) a severance benefit equal to three times the sum of:

             (aa)  his highest annual base salary at any time during the 12
                   months immediately preceding the date of termination of his
                   contract; and

             (bb)  the greater of his annual target bonus immediately preceding
                   the date of termination of his contract and the average of
                   his annual bonuses earned during the three-year period
                   preceding the Merger; and

       (iii) insurance and supplemental retirement benefits.

                                      F-9
<PAGE>
    (d) If however Mr Dolan's employment is terminated by Y&R without cause (as
       defined in the service agreement) or he leaves Y&R for good reason (as
       defined in the service agreement) within the third or fourth year of the
       initial term of his service agreement, he will be entitled to a severance
       benefit equal to, depending upon the time of termination, no less than
       one times but no more than two times the sum of:

        (i) the greater of his annual base salary during the year preceding the
            termination of his employment; and

        (ii) the greater of his annual target bonus amount immediately preceding
             the date of termination of his contract and the average of his
             annual bonuses earned during the three-year period preceding the
             Merger.


    (e) The service agreement with Mr Dolan contains provisions designed to
       avoid the imposition of excise taxes on him under the US Internal Revenue
       Code.


    (f) Mr Dolan's service agreement also provides that with respect to any
       awards of performance shares granted to him under the Young & Rubicam
       1997 Incentive Compensation Plan, performance goals and other conditions
       will be deemed to be met as of the effective time of the Merger and Y&R
       will pay him a lump sum cash payment equal to the value of these
       performance shares. The benefits payable under his service agreement are
       in lieu of any severance benefits payable to Mr Dolan under any other
       agreements or severance plans of Y&R.

    (g) Mr Dolan has also entered into certain restrictive covenants which apply
       for the period of 12 months following termination of the service
       agreement.

12.2 Following completion of the Merger, each of the Proposed Directors (other
    than Mr Dolan) will be appointed as a non-executive Director of WPP for an
    initial two year fixed period and will be entitled to receive fees of
    L25,000 per annum and to be reimbursed for all reasonable out of pocket
    expenses.

13. WORKING CAPITAL

    The Company is of the opinion that the enlarged WPP Group has sufficient
    working capital for its present requirements, that is for at least the next
    12 months following the date of this document.

14. FINANCIAL AND TRADING POSITION

14.1 There has been no significant change in the financial or trading position
    of the WPP Group since 30 June 2000, being the date to which WPP prepared
    its unaudited interim accounts.

14.2 There has been no significant change in the financial or trading position
    of the Y&R Group since 30 June 2000, being the date to which Y&R prepared
    its unaudited interim accounts.

15. MATERIAL CONTRACTS

15.1 The following contracts (not being contracts entered into in the ordinary
    course of business) (i) have been entered into by a member of the WPP Group
    during the two years immediately preceding the date of this document and are
    or may be material or (ii) contain a provision under which a member of the
    WPP Group has an obligation or entitlement which is or may be material to
    the WPP Group as at the date of this document:

    (a) A US$500,000,000, four year, multicurrency revolving credit facility
       agreement dated 3 July 1998 between WPP and certain of its subsidiaries
       as borrowers, certain specified banks and financial institutions as
       lenders, Bankers Trust Company as facility agent and Bankers Trust

                                      F-10
<PAGE>
       International, Barclays Bank PLC and J.P. Morgan Securities Ltd. as
       arrangers. The facility is available for general corporate purposes. The
       margin payable under the facility is initially 0.425% per annum (plus
       LIBOR and reserve asset costs (as defined therein)) although following
       delivery of a ratio certificate by WPP this may be adjusted to between a
       range of 0.55% per annum to 0.2% per annum The obligations of each of the
       borrowers to the facility agent and each of the lenders under the
       facility are guaranteed by WPP.

    (b) An indenture dated 15 July 1998 between WPP Finance (USA) Corporation,
       WPP as guarantor, and Bankers Trust Company as trustee, in connection
       with the issue by WPP Finance (USA) Corporation of US$200,000,000 6 5/8%
       Notes due 15 July 2005 and US$100,000,000 6 7/8% Notes due 15 July 2008
       (together, the "Notes"). The Notes are fully and unconditionally
       guaranteed by WPP . Pursuant to the Indenture, WPP is subject to certain
       covenants and restrictive covenants including a negative pledge and
       limitations on sale and leaseback transactions and on indebtedness of
       certain subsidiaries. The Indenture contains customary provisions with
       respect to events of default by WPP or WPP Finance (USA) Corporation.

    (c) An agreement dated 3 August 1998 between WPP and Asatsu-DK, Inc
       ("Asatsu") pursuant to which WPP subscribed for approximately 23% (at
       that time) of the share capital of Asatsu for approximately L139 million
       and Asatsu subscribed for 31,295,646 WPP Ordinary Shares representing
       approximately 4% (at that time) of the issued share capital of WPP. Each
       party agreed not to transfer any shares held by them in the other for a
       period of five years and thereafter only to transfer such shares
       following a procedure set out in the agreement. Each party is further
       entitled to nominate a non-executive director to the board of the other
       subject to retaining its shareholding in the other. On the same date,
       Asatsu and WPP entered into a co-operation and alliance agreement to
       exploit mutual opportunities for business both inside and outside Japan.
       Due to the disparity of the percentage shareholdings of WPP in Asatsu and
       of Asatsu in WPP, an agreement was also entered into on 3 August 1998
       imposing, amongst other things, limitations, in certain circumstances, on
       the voting rights in respect of the shares held by WPP in Asatsu.

    (d) A syndicated 364 day revolving credit facility agreement dated
       15 October 1999 between WPP Pearls Limited as borrower, WPP, Barclays
       Bank PLC as agent and arranger and certain financial institutions as
       lenders. The borrowers under the facility are WPP Pearls Limited and any
       other subsidiary of WPP that accedes to the facility as borrower. The
       aggregate amount of the revolving credit facility available under the
       agreement is US$150,000,000. The facility is available to be used for
       general corporate purposes and may be drawn down in dollars or in any
       other currency which is freely transferable and available in the London
       interbank market. The interest payable under the facility is 0.40% per
       annum over LIBOR and reserve asset costs (as defined therein). The
       obligations of each of the borrowers under the agreement are guaranteed
       by WPP and by any other subsidiary of WPP that accedes to the facility.


    (e) A US$700,000,000, 364 day, multicurrency revolving credit facility
       agreement dated 7 August 2000 between WPP Finance Co. Limited and WPP
       Group U.S. Finance Corp. as borrowers, WPP as guarantor, Citibank
       International plc as facility agent and certain specified banks and
       financial institutions as lenders. The facility is available to finance
       the working capital requirements of the WPP Group and, following
       completion of the Merger, to repay certain existing indebtedness of the
       Y&R Group and to finance the working capital requirements of the Y&R
       Group. The term of the facility may be extended for a further 364 days at
       the discretion of each of the lenders on the request of WPP in its
       capacity as borrowers' agent. The whole or part of the facility may be
       converted into a term loan with a fixed term to 7 August 2003 at any time
       during the first year following signing (subject to certain
       restrictions). The interest payable under the facility is 0.40% per
       annum, over LIBOR (or in the case of advances in Euros EURIBOR)


                                      F-11
<PAGE>

       and mandatory costs. The obligations of each of the borrowers under the
       agreement are guaranteed by WPP.


    (f) The Merger Agreement and the no-sale agreements (referred to in
       paragraph 7 above) in connection with the Merger.

15.2 The following contracts (not being contracts entered into in the ordinary
    course of business) (i) have been entered into by a member of the Y&R Group
    during the two years immediately preceding the date of this document and are
    or may be material or (ii) contain a provision under which a member of the
    Y&R Group has an obligation or entitlement which is material to the Y&R
    Group as at the date of this document:

    (a) A lease dated 12 July 1984 between Peter Catalano and Michael Kornblum
       and Y&R relating to the lease of offices at 230 Park Avenue South, New
       York, New York for a current annual rent of US$16,650,000 increasing by
       an annual rate of 3.5% for the remainder of the lease. The lease is due
       to expire on 22 January 2006, although Y&R has the option to renew the
       lease for 4 further terms of 5 years each.

    (b) A US$200,000,000, one-year credit facility agreement (``the facility")
       dated 30 June 1999 between Y&R as borrower, certain banks and financial
       institutions, Citibank N.A. as administrative and documentation agent,
       and Salomon Smith Barney Inc. as arranger and book manager, as amended
       and restated by an agreement dated 29 June 2000. The facility contains
       customary provisions with respect to warranties and representations,
       events of default, restrictive covenants including negative pledges and
       restrictions on future borrowings. Y&R is required to pay interest on
       outstanding borrowings under the facility at varying rates, generally
       equal to the base rate, or to an applicable margin in the range of 0.525%
       per annum to 0.700% per annum plus LIBOR (depending on the ratio of debt
       to earnings (before interest, taxation, depreciation and amortisation)).
       Y&R is also required to pay a facility fee ranging from 0.100% per annum
       to 0.175% per annum to 0.200% per annum on the total amount of the
       commitment.

    (c) An indenture dated 20 January 2000 between Y&R and Bank of New York as
       trustee pursuant to which Y&R issued US$287,500,000 Y&R Convertible Notes
       (as defined in paragraph 5.7 above). The Y&R Convertible Notes are
       currently convertible into an aggregate of 3,919,030 Y&R Common Shares at
       a conversion price of US$73.36 per share. After the Merger the Y&R
       Convertible Notes will be convertible into 0.835 of a WPP ADS for each
       Y&R Common Share into which they were convertible prior to the Merger.

    (d) A US$400,000,000, five-year unsecured revolving credit facility ("the
       Revolving Credit Facility") dated 8 May 1998, between Y&R and other
       members of the Y&R Group as borrowers, certain banks and financial
       institutions, Citibank N.A. as administrative and documentation agent,
       Bank of America National Trust and Savings Association as syndication
       agent, Citicorp Securities as arranger, and BancAmerica Robertson
       Stephens as co-arranger, as amended by an agreement dated 30 June 1999.
       The Revolving Credit Facility contains customary provisions with respect
       to warranties and representations, events of default, and restrictive
       covenants including negative pledges and restrictions on future
       borrowings. Y&R is required to pay interest on outstanding borrowings
       under the Revolving Credit Facility at varying rates, generally equal to
       the base rate, or to an applicable margin in the range of 0.275% per
       annum to 0.300% per annum plus LIBOR (depending on the ratio of debt to
       earnings (before interest, taxation, depreciation, and amortisation)).
       Y&R is also required to pay a facility fee ranging from 0.125% per annum
       to 0.200% per annum of the total amount of the commitment. Under the
       Revolving Credit Facility, Y&R guarantees the obligations of each
       borrower.

                                      F-12
<PAGE>
    (e) The Merger Agreement and the no-sale agreements (referred to in
       paragraph 7 above) in connection with the Merger.

16. LITIGATION

16.1 WPP

    (a) Save as set out in subparagraphs (b) and (c) below, there are no, nor
       have there been any, legal or arbitration proceedings nor, so far as the
       Directors of WPP are aware, are any such proceedings pending or
       threatened by or against WPP or any of its subsidiaries, which may have,
       or have had during the 12 months preceding the date of this document, a
       significant effect on the WPP Group's financial position.

    (b) During 1997, WPP entered into negotiations with Canary Wharf Limited to
       take a lease of the five floors of 25 North Colonade, Canary Wharf.
       Although heads of terms were exchanged, contracts were not entered into,
       and WPP and Ogilvy & Mather Limited commenced proceedings against Canary
       Wharf Limited and certain of its directors and employees for damages for
       fraudulent misrepresentation, conspiracy, deceit and unlawful
       interference with WPP's business interests. The four-week trial concluded
       on 14 July 2000. Judgment was given by Mr Justice Ferris on 23 August
       2000. The trial was concerned only with issues of liability, and,
       therefore, the judgment did not deal with the question of damages.
       Judgment was given in favour of Canary Wharf Limited. A costs order has
       not yet been made. If costs are awarded against WPP and Ogilvy & Mather
       Limited they are likely to be in the region of L600,000 to L800,000.

    (c) An action was commenced by Hispanic Newspapers Network, Inc., and
       others, in the United States District Court for the Southern District of
       New York in August 2000 against Ogilvy & Mather, J. Walter Thompson, Y&R
       and WPP (the "defendants"). The plaintiffs represent a group of fourteen
       Hispanic owned newspapers. The complaint is based on causes of action for
       certain alleged antitrust violations, civil rights violations and other
       statutory violations based on the plaintiffs' allegation that the
       defendants conspired to unlawfully exclude the plaintiffs from earning
       advertising revenues from various federal government advertising
       accounts. The plaintiffs seek compensatory damages of no less than
       US$300 million, treble damages, unspecified punitive damages and
       injunctive relief. The defendants have yet to be served in the action.
       WPP and Y&R believe that the action is without substance and intend to
       vigorously defend this action.

16.2 Y&R

    Save as referred to in subparagraph 16.1 (c) above, there are no, nor have
    there been any, legal or arbitration proceedings nor, so far as Y&R are
    aware, are any such proceedings pending or threatened by or against Y&R or
    any of its subsidiaries which may have, or have had during the 12 months
    preceding the date of this document, a significant effect on the Y&R Group's
    financial position.

17. AVAILABILITY OF LISTING PARTICULARS

    Copies of the Listing Particulars are being sent to each WPP Share Owner on
    the register on 24 August 2000 and are available, free of charge, from WPP's
    registered office. The Listing Particulars are also available for inspection
    at the offices of Allen & Overy at One New Change, London EC4M 9QQ, England
    and at the Document Viewing Facility, Financial Services Authority,
    25 North Colonade, Canary Wharf, London E14 5HS during normal business hours
    on any weekday (Saturdays and public holidays excepted), from 25 August 2000
    until the conclusion of the Extraordinary General Meeting of WPP to be held
    on 29 September 2000.

                                      F-13
<PAGE>
18. LISTING AND DEALING

    Application has been made to the UK Listing Authority for the Consideration
    Shares to be admitted to the Official List and to the London Stock Exchange
    for the Consideration Shares to be admitted to trading on the London Stock
    Exchange's market for listed securities ("Admission"). The WPP ADSs
    representing the Consideration Shares will be listed on the Nasdaq. It is
    expected that Admission will become effective and that dealings on the
    London Stock Exchange will commence at 8.00 am (London time) on the
    Effective Date. It is a condition to the Merger becoming effective that
    Admission becomes effective.

19. PROCEDURE FOR RECEIVING CONSIDERATION SHARES

    Promptly after the Effective Date, the Exchange Agent (as defined in the
    Merger Agreement) will send each Y&R Share Owner (other than WPP, Y&R or any
    of their respective subsidiaries) holding certificates, a letter of
    transmittal for use in effecting delivery of Y&R Common Shares to the
    Exchange Agent. Upon surrender of a Y&R share certificate for cancellation
    to the Exchange Agent, together with a duly executed and completed letter of
    transmittal, and any other documents required by the Exchange Agent, the
    holder of each Y&R share certificate will be entitled to receive in exchange
    for such Y&R share certificate:

    (a) one or more WPP American Depositary Receipts evidencing, in the
       aggregate, the whole number of WPP ADSs that such holder has the right to
       receive as consideration for the Merger unless such Y&R Share Owner
       properly elects to receive WPP Ordinary Shares instead of all or some of
       his entitlement to WPP ADSs; and

    (b) a cheque for an amount (after giving effect to any required tax
       withholdings) equal to:

       (i) cash in lieu of fractions of WPP ADSs and/or WPP Ordinary Shares, as
           the case may be; and

       (ii) any cash dividends or other distributions in respect of WPP ADSs
           and/or WPP Ordinary Shares with (aa) a record date after the
           completion of the Merger and for which such WPP ADSs and/or WPP
           Ordinary Shares are entitled to rank and (bb) a payment date on or
           before the date the holder properly delivers the Y&R share
           certificate to the Exchange Agent.

    The Y&R share certificates so surrendered will be cancelled. No interest
    will be paid or accrued on any amount payable upon surrender of the Y&R
    Common Shares.

20. DOCUMENTS AVAILABLE FOR INSPECTION

    Copies of the following documents will be available for inspection during
    usual business hours on any weekday (Saturdays and public holidays excepted)
    at the offices of Allen & Overy, One New Change, London EC4M 9QQ until the
    conclusion of the WPP Extraordinary General Meeting to be held on
    29 September, 2000:

    (a) the Memorandum and Articles of Association of WPP;

    (b) the published audited consolidated accounts of WPP for the two financial
       years ended 31 December 1999 and the unaudited interim results for the
       six months ended 30 June 2000;

    (c) the published audited consolidated accounts of Y&R for the two financial
       years ended 31 December 1999 and the unaudited interim results for the
       six months ended 30 June 2000;

    (d) the rules of the WPP Share Schemes to which the WPP options and awards
       have been granted;

                                      F-14
<PAGE>
    (e) the letter from PricewaterhouseCoopers LLP regarding the summary of
       differences between US GAAP and UK GAAP for Y&R set out in Section 6 of
       Part III of the Listing Particulars;

    (f) the letter from Arthur Andersen set out in Part IV of the Listing
       Particulars;

    (g) the letter from Goldman Sachs & Co. dated 11 May 2000 giving its opinion
       as at that date that the consideration to be paid by WPP to Y&R Share
       Owners is fair from a financial point of view to WPP;

    (h) the letter from Merrill Lynch International dated 11 May 2000 giving its
       opinion as at that date that the consideration to be paid by WPP to Y&R
       Share Owners is fair from a financial point of view to WPP;

    (i) the service agreements and letters of appointment of the Directors of
       WPP and the service agreement for Mr Dolan each of which is referred to
       in paragraph 7 of Part VI of the Listing Particulars;

    (j) the material contracts referred to in paragraph 9 of Part VI of the
       Listing Particulars;

    (k) the Proxy Statement/Prospectus distributed to Y&R Share Owners to seek
       their approval to the Merger;

    (l) the written consents referred to in paragraph 14 of Part VI of the
       Listing Particulars;

    (m) the Circular; and

    (n) the Y&R stock option plans pursuant to which the Y&R Stock Options have
       been granted.

    Dated 25 August 2000

                                      F-15
<PAGE>

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<PAGE>



          THE YOUNG & RUBICAM INC. BOARD OF DIRECTORS RECOMMENDS A VOTE
                               "FOR" PROPOSAL 1

1.      Proposal to approve and adopt the Amended and Restated Agreement and
   Plan of Merger, dated as of May 11, 2000, among WPP Group Plc, Young &
   Rubicam Inc., York Merger Corp., a wholly owned subsidiary of WPP, and
   York II Merger Corp., a wholly owned subsidiary of York Merger Corp.,
   pursuant to which York II Merger Corp. will be merged with and into Young
   & Rubicam Inc., and shares of Young & Rubicam Inc. common stock outstanding
   immediately prior to the merger will each be converted into .835 of an
   American depositary share of WPP, each of which represents five ordinary
   shares of WPP. Holders of Young & Rubicam Inc. common stock will have the
   option of receiving five WPP ordinary shares instead of each American
   depositary share they are otherwise entitled to receive.


          / / FOR                  / / AGAINST                / / ABSTAIN

2. By returning this proxy card you are conferring upon the proxies the
   authority to vote in their descretion upon such other business as may
   properly come before the Young & Rubicam Inc. Special Meeting or any
   postponements or adjournments thereof.

YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICE BY MARKING THE APPROPRIATE BOX (SEE
ABOVE), BUT YOU NEED NOT MARK ANY BOX IF YOU WISH TO VOTE IN ACCORDANCE WITH
THE BOARD OF DIRECTORS' RECOMMENDATION. HOWEVER, THE PROXY HOLDERS CANNOT VOTE
YOUR SHARES UNLESS YOU SIGN, DATE AND RETURN THIS CARD.

Change of Address and
Comments Mark Here / /

Please sign exactly as your name appears herein. If shares are held jointly, all
holders should sign. When signing as attorney, executor, administrator, trustee
or guardian, please give your full title. If a corporation, please sign in full
corporate name by president or other authorized officer. If a partnership,
please sign in partnership name by authorized person, indicating, where proper,
official position or representative capacity.



Please sign exactly as your name appears herein. 18 shares are held jointly,
all holders should sign when signing as an attorney, executor, administrator,
trustee or guardian, please give your full title. If a corporation, please
sign in full corporate name by president or other authorized officer. If
partnership, please sign in partnership name by authorized person,
indicating, where proper, official position or representative capacity.



                                         Dated: __________________________, 2000

                                         _______________________________________
                                                       (signature)
                                         _______________________________________
                                               (signature if held jointly)


PLEASE MARK, SIGN, DATE AND MAIL THIS CARD           VOTES MUST BE INDICATED
  PROMPTLY IN THE POSTAGE PREPAID RETURN          /X/ IN BLACK OR BLUE INK. /X/
            ENVELOPE PROVIDED


<PAGE>


                              YOUNG & RUBICAM INC.
                               285 MADISON AVENUE
                            NEW YORK, NEW YORK 10017

                                      PROXY


   THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
         SPECIAL MEETING OF STOCKHOLDERS OF YOUNG & RUBICAM INC.
                    TO BE HELD ON SEPTEMBER 28, 2000.

   IF NO INSTRUCTIONS TO THE CONTRARY ARE GIVEN, THIS PROXY WILL BE VOTED "FOR"
APPROVAL AND ADOPTION OF THE MERGER AGREEMENT DESCRIBED ON THE REVERSE SIDE
HEREOF.

   The undersigned hereby appoints STEPHANIE W. ABRAMSON, MICHAEL J. DOLAN
and JACQUES TORTOROLI, proxies, with the power of substitution and with the
authority in each to act in the absence of the other, to vote all shares the
undersigned is entitled to vote at the Young & Rubicam Inc. Special Meeting
to be held on September 28, 2000 at 10:00 A.M., New York time, at the Ney
Center for Executive Leadership at the headquarters of Young & Rubicam Inc.
at 285 Madison Avenue, ground floor, New York, New York, and at any
adjournments or postponements thereof, on the matters set forth on the
reverse side hereof.

The undersigned hereby acknowledges receipt of the notice of the special
meeting and the related proxy statement/prospectus.

            (Continued and to be dated and signed on reverse side.)




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