<PAGE> 1
GREY ADVERTISING INC.
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement [_] Confidential, for Use of
the Commission Only (as
permitted by Rule 14a-6(s)
(s))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
GREY ADVERTISING INC.
(Name of Registrant as Specific In Its Charter)
---------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] 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 determine):
(4) Proposed maximum Aggregate value of transaction.
(5) Total fee paid:
[_] Fee paid previously with preliminary materials:
[_] 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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
<PAGE> 2
GREY ADVERTISING INC.
777 THIRD AVENUE
NEW YORK, NEW YORK 10017
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JUNE 28, 2000
To the Stockholders of
Grey Advertising Inc.
The Annual Meeting of Stockholders of Grey Advertising Inc. ("Company")
will be held at the Company's San Francisco, California office, 58 Maiden Lane,
San Francisco, California, on June 28, 2000 at 8:00 A.M., local time, for the
following purposes:
(1) To elect one director to hold office for a three year term.
(2) To consider and take action on a proposal to amend the Company's
Restated Certificate of Incorporation to change the name of the
Company.
(3) To consider and take action on a proposal to amend the Company's
Restated Certificate of Incorporation to increase the number of
authorized shares of the Company's Common Stock and Limited
Duration Class B Common Stock, to decrease the par value per
share of existing shares and to make related changes.
(4) To consider and take action on a proposal to amend the Company's
1994 Stock Incentive Plan to increase the number of shares of
Common Stock available for issuance thereunder.
(5) To consider and take action on a proposal to ratify the selection
of Ernst & Young LLP as independent auditors for the Company for
2000.
(6) To transact such other business as may properly come before the
meeting.
Holders of record of the Company's Common Stock and Limited Duration
Class B Common Stock at the close of business on May 25, 2000, and holders of
the Company's Preferred Stock, will be entitled to vote at the meeting.
By Order of the Board of Directors
Steven G. Felsher
Secretary
New York, New York
June 2, 2000
PLEASE SPECIFY YOUR CHOICES, DATE AND SIGN THE ENCLOSED PROXIES AND MAIL THEM
PROMPTLY IN THE ENCLOSED ENVELOPE.
<PAGE> 3
GREY ADVERTISING INC.
777 THIRD AVENUE
NEW YORK, NEW YORK 10017
(212) 546-2000
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
JUNE 28, 2000
This Proxy Statement is being mailed to stockholders on or about June 2,
2000 in connection with the solicitation of proxies by the Board of Directors of
Grey Advertising Inc. ("Company") for the Annual Meeting of Stockholders to be
held at the Company's San Francisco, California office, 58 Maiden Lane, San
Francisco, California, on June 28, 2000 at 8:00 A.M., local time, and at any and
all adjournments thereof, for the purposes set forth in the Notice of Annual
Meeting of Stockholders.
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time prior to its exercise. A stockholder may effect
revocation of a proxy by delivering written notice to the Secretary of the
Company, by giving a later-dated proxy or by attending the meeting and voting in
person. All properly executed, unrevoked proxies will be voted as specified.
Unless contrary directions are given, proxies will be voted for the election of
the nominee for director proposed by the Board of Directors and in favor of the
proposals set forth in the notice. Shares represented by executed proxies
received by the Company will be counted for a quorum regardless of how or
whether such shares are voted on any particular matter. Where nominee
stockholders of record do not vote on specific issues because they did not
receive instructions, such "non-votes" will not be treated as votes cast or
shares present for such issues. The affirmative vote of the holders of a
plurality of the votes cast is required in the election of directors. The vote
required to approve the other matters to be voted on at the meeting, as well as
the effect of abstentions and broker non-votes, is set forth in the sections
describing such matters.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO ANY STOCKHOLDER A COPY OF ITS ANNUAL
REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999 ("10-K").
STOCKHOLDERS DESIRING TO OBTAIN A COPY OF THE 10-K SHOULD ADDRESS WRITTEN
REQUESTS TO MS. LINDA M. FOX, ASSISTANT SECRETARY, GREY ADVERTISING INC., 777
THIRD AVENUE, NEW YORK, NEW YORK 10017.
VOTING SECURITIES
Holders of record of the Company's Common Stock and Limited Duration
Class B Common Stock ("Class B Stock") at the close of business on May 25, 2000,
and holders of the Company's Preferred Stock, will be entitled to vote at the
meeting. On May 25, 2000, the Company had outstanding [ ] shares of Common Stock
and [ ] shares of Class B Stock. The Company also has outstanding and entitled
to vote at the meeting 20,000 shares of its Series I Preferred Stock, and 5,000
shares each of its Series II Preferred Stock and Series III Preferred Stock. At
the meeting, each share of Common Stock will be entitled to one vote; each share
of Class B Stock will be entitled to ten votes; and each share of Preferred
Stock will be entitled to eleven votes.
To the knowledge of the Board of Directors, as of the record date, no
stockholder owned of record or beneficially more than 5% of the Company's
outstanding shares of Common Stock, Class B Stock or Preferred Stock except as
indicated below:
2
<PAGE> 4
<TABLE>
<CAPTION>
AMOUNT OF SHARES
NAME AND ADDRESS AND NATURE OF
TITLE OF CLASS OF RECORD OR BENEFICIAL OR
- -------------- BENEFICIAL OWNER RECORD PERCENTAGE
---------------- OWNERSHIP OF CLASS
---------------- ----------
<S> <C> <C> <C>
Common Stock Edward H. Meyer, as Voting 144,687(a) 14.3
Trustee under a Voting Trust
Agreement, dated as of
February 24, 1986, and as
subsequently amended ("Voting
Trust Agreement"), among the
Voting Trustee, the Company
and the Beneficiaries of the
Voting Trust Agreement
777 Third Avenue, New York,
New York 10017
Edward H. Meyer 205,248(b) 20.3
777 Third Avenue
New York, New York 10017
The Committee Administering
the Company's Employee Stock 36,530(c) 3.6
Ownership Plan
777 Third Avenue
New York, New York 10017
Ariel Capital Management, Inc. 175,781(d) 17.4
307 North Michigan Avenue
Chicago, Illinois 60601
Tweedy Browne Company L.P. 69,620(e) 6.9
52 Vanderbilt Avenue
New York, New York 10017
All executive officers and 309,331(f) 30.6
directors as a group
</TABLE>
3
<PAGE> 5
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Class B Stock Edward H. Meyer, as Voting 142,583(a) 61.2
Trustee under the Voting
Trust Agreement
777 Third Avenue
New York, New York 10017
Edward H. Meyer 135,617(b) 58.2
777 Third Avenue
New York, New York 10017
The Committee Administering 56,944(c) 24.4
the Company's Employee Stock
Ownership Plan
777 Third Avenue
New York, New York 10017
All executive officers and 226,191(f) 97.0
directors as a group
Series I, Series
II and Series
III Preferred Edward H. Meyer 30,000(g) 100.0
Stock 777 Third Avenue
New York, New York 10017
</TABLE>
- ----------
(a) Represents voting power only. Does not include shares issuable upon exercise
or conversion of options or other securities which are contractually bound to be
deposited pursuant to the Voting Trust Agreement. In general, investment power
over the shares deposited in the voting trust established pursuant to the Voting
Trust Agreement is retained by the several beneficiaries of the Voting Trust
Agreement. (See "Certain Relationships and Related Transactions" below.)
(b) Includes shares of Common Stock and of Class B Stock, as the case may be,
issuable upon conversion of the Company's 8-1/2% Convertible Subordinated
Debentures owned by Mr. Meyer, shares of Common Stock issuable upon exercise of
stock options which are currently exercisable (after giving effect to the
assumed conversion and exercise thereof), and Mr. Meyer's beneficial interest in
shares of Common Stock and Class B Stock deposited by him pursuant to the Voting
Trust Agreement as to which he retains investment power. Does not include shares
of Common Stock (3.6% of such class) and Class B Stock (24.4%) held in the
Company's Employee Stock Ownership Plan as to which Mr. Meyer exercises shared
voting power by virtue of his membership on the committee charged with its
administration. Does not include shares of Common Stock, Class B Stock and
shares of Common Stock issuable upon exercise of stock options, held in trust
for Mr. Meyer's children which have been deposited in the voting trust under the
Voting Trust Agreement, or shares of Common Stock or of Class B Stock as to
which Mr. Meyer exercises voting power by virtue of being the Voting Trustee
under the Voting Trust Agreement (other than shares deposited in the Voting
Trust by Mr. Meyer).
(c) The committee which administers the Company's Employee Stock Ownership Plan
exercises voting power over shares held in such plan, and is comprised of Mr.
Meyer and Steven G. Felsher.
(d) Information based on the Company's understanding of publicly-filed material.
Ariel Capital Management, Inc., a registered investment advisor, together with a
related entity, on behalf of its clients, has sole or shared dispositive and
voting power with respect to the shares listed.
4
<PAGE> 6
(e) Information based on the Company's understanding of publicly-filed material.
Tweedy Browne Company L.P., a registered investment advisor, together with a
related entity, on behalf of its clients, has sole or shared dispositive and
voting power with respect to the shares listed.
(f) Includes shares of Common Stock (3.6% of such class) and of Class B Stock
(24.4%), as the case may be, as to which certain executive officers exercise
shared voting power by virtue of their membership on the committee administering
the Company's Employee Stock Ownership Plan. Includes shares of Common Stock and
Class B Stock as to which the Voting Trustee (Mr. Meyer) under the Voting Trust
Agreement exercises voting power. Includes shares of Common Stock and of Class B
Stock issuable upon conversion of the Company's 8-1/2% Convertible Debentures
owned by Mr. Meyer and shares of Common Stock issuable upon exercise of stock
options which are exercisable by beneficiaries under the Voting Trust Agreement
who are obliged, under the terms of the Voting Trust Agreement, to deposit
shares in the voting trust acquired subsequent to the execution of the Voting
Trust Agreement, after giving effect to the assumed conversion and exercise
thereof. Does not include shares of Common Stock issuable to beneficiaries under
the Voting Trust Agreement upon exercise of stock options which are not
presently exercisable.
(g) Represents 20,000 of Series I Preferred Stock, and 5,000 shares of each of
the Company's Series II and Series III Preferred Stock, of which classes Mr.
Meyer owns 100% of the outstanding shares.
5
<PAGE> 7
ELECTION OF DIRECTOR
The Board of Directors presently consists of four members, one of whom is
elected by the holder of the Series I Preferred Stock, and three of whom,
divided into three classes, are elected by the holders of the Common Stock, the
Class B Stock and the Preferred Stock voting together. At each Annual Meeting of
Stockholders, a director of one class is elected to serve for a three-year term
or until the election of his successor.
Edward H. Meyer has been nominated to be elected at the meeting to serve
as a director until the Annual Meeting of Stockholders to be held in 2003. Mr.
Meyer is currently serving on the Board.
The Company's Certificate of Incorporation provides for cumulative voting
for elections of directors. Therefore, if more than one director is being
elected at a meeting, each stockholder is entitled to cast as many votes as
shall equal the number of votes represented by the shares owned by such
stockholder multiplied by the number of directors to be elected and such
stockholder may cast all of such votes for a single nominee for director, or may
distribute them among the number of nominees, as the stockholder determines.
Information relating to Mr. Meyer and to the directors not standing for
election who will continue in office following the meeting is set forth below.
Each person listed below is currently a director of the Company.
<TABLE>
<CAPTION>
TERM
OFFICE
DIRECTOR WILL
NAME(a) AGE OCCUPATION(b) SINCE EXPIRE
------- --- ------------- --------- ------
<S> <C> <C> <C> <C>
Mark N. Kaplan ... 70 Of counsel, Skadden, 1973 2002
Arps, Slate,
Meagher & Flom
LLP, law firm (d)
Edward H. Meyer.... 73 Chairman of the 1961 2000
Board, President
and Chief
Executive Officer
Richard Reiss, Jr.... 56 Chairman, Georgica 1999 - (h)
Advisors LLC, a
private investment
fund
John Shannon...... 63 President, 1991 2001
Grey-International
NO. OF SHARES OF PERCENT OF
VOTING STOCK VOTES CAST
OWNED BY VOTING
NAME(a) BENEFICIALLY(c) SHARES
------- --------------- ----------
<S> <C> <C>
Mark N. Kaplan ... 2,200(e) -(f)
Edward H. Meyer.... 560,822(g) 71.64
Richard Reiss, Jr.... 2,000(i) -(f)
John Shannon...... 1,000 -(f)
</TABLE>
- -----------
(a) There is no family relationship between any director and any other
director or executive officer of the Company.
(b) The positions of Messrs. Meyer and Shannon are with the Company, and
each has served the Company for more than the past five years.
6
<PAGE> 8
Mr. Kaplan also serves on the boards of directors of American Biltrite
Inc., autobytel.com inc., Congoleum, Inc., DRS Technologies, Inc.,
REFAC Technology Development Corporation and Volt Information
Sciences, Inc.
Mr. Meyer is also a director of Ethan Allen Interiors, Inc. and Harman
International Industries, Inc.
Mr. Reiss is also a director of Lazard Funds, Inc., O'Charley's Inc. and
RFS Hotel Investors Inc.
(c) Represents beneficial interests in shares of the Company's Common
Stock, Class B Stock, and Series I, II and III Preferred Stock.
(See "Voting Securities" above.) Information is as of the record
date.
(d) Skadden, Arps, Slate, Meagher & Flom LLP, a law firm to which Mr.
Kaplan is of counsel, has provided certain legal services to the
Company in 1999 and 2000.
(e) Mr. Kaplan owns 1,100 shares of each of the Common Stock and of the
Class B Stock.
(f) Represents less than 1.0% of the votes entitled to be cast.
(g) Mr. Meyer owns beneficially 104,684 shares of Common Stock and 110,053
shares of Class B Stock, as to which he, as the Voting Trustee under the
Voting Trust Agreement, exercises voting power, and 20,000 shares of the
Series I Preferred Stock, and 5,000 shares of each of the Series II and
of the Series III Preferred Stock, representing approximately 10.3%,
47.2%, 100%, 100% and 100% of each class, respectively. Also includes
other shares held pursuant to the Voting Trust Agreement, as to which
Mr. Meyer, as the Voting Trustee, exercises voting power, and shares of
Common Stock and Class B Stock held in the Company's Employee Stock
Ownership Plan as to which Mr. Meyer exercises shared voting power by
virtue of his membership on the committee charged with its
administration. Also includes shares of Common Stock (2.5%) and Class B
Stock (11.0%) issuable on conversion of the Company's 8-1/2% Convertible
Subordinated Debentures owned by Mr. Meyer after giving effect to the
assumed conversion thereof and shares of Common Stock (7.4%) issuable
upon exercise of currently exercisable stock options owned by Mr. Meyer
and shares of Common Stock issuable upon the exercise of stock options
which are exercisable by beneficiaries under the Voting Trust Agreement
after giving effect to the assumed exercise thereof. Does not include
shares of Common Stock issuable to beneficiaries under the Voting Trust
Agreement upon exercise of stock options which are not presently
exercisable.
(h) Mr. Reiss had been elected by the holder of the Series I Preferred
Stock and serves until the election of his successor.
(i) Mr. Reiss owns 2,000 shares of Common Stock.
The Board of Directors has no reason to believe Mr. Meyer will for any
reason be unable to serve as a director. If, however, Mr. Meyer becomes
unavailable to serve for any reason, it is the intention of the persons named in
the enclosed form of proxy, unless otherwise instructed by stockholders, to vote
such proxy for the election of such other person as the Board of Directors may
in its discretion recommend.
Directors who are not employees of the Company receive a fee of $4,500
per quarter and a fee of $3,000 for each meeting of the Board attended.
Directors who are also employees receive no remuneration for serving on the
Board. Under an agreement with the Company, Mr. Kaplan has elected to have
payment of his director's fees deferred until he retires from the Board.
7
<PAGE> 9
During 1999, the Board met four times. Each director attended all of the
meetings of the Board. The Audit Committee, which is comprised of Messrs. Kaplan
and Reiss, reviews the services of the Company's independent auditors, the
preparation of the Company's financial statements and the maintenance of
internal controls by the Company. Messrs. Kaplan and Reiss also comprise the
Company's Compensation Committee, which is charged with overseeing matters
relating to senior executive compensation. The Company does not have a standing
nominating committee. Members of the Audit Committee and the Compensation
Committee receive $1,000 for attendance at each meeting of each such committee
which does not fall on the same day as a meeting of the Board.
REMUNERATION OF MANAGEMENT
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table provides certain summary information concerning
compensation paid or accrued by the Company to or on behalf of its Chief
Executive Officer and each of the four other most highly compensated executive
officers of the Company with respect to the three most recently completed fiscal
years of the Company, except as indicated below:
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-------------------
NAME AND
POSITION YEAR SALARY(2) BONUS(2)
-------- ---- --------- --------
<S> <C> <C> <C>
Edward H. Meyer 1999 $ 2,900,000 $ 250,000
Chairman, 1998 2,900,000 400,000
President 1997 2,575,000 475,000
and Chief
Executive Officer
Robert L. Berenson 1999 $ 625,000 $ 170,000
President 1998 625,000 220,000
Grey-N.Y 1997 540,000 310,000
J. Alec Gerster 1999 $ 400,000 $ 130,000
Executive 1998 400,000 170,000
Vice President 1997 400,000 175,000
Stephen A. Novick 1999 $ 825,000 $ 100,000
Executive 1998 825,000 125,000
Vice President 1997 825,000 150,000
John Shannon 1999 $ 600,730 $ 165,320
President, 1998 600,730 220,320
Grey-International 1997 568,898 262,400
LONG-TERM COMPENSATION
----------------------
ALL
NAME AND REST. STOCK OTHER
POSITION STOCK($) OPTIONS(#) COMP.(1)
-------- -------- ---------- --------
<S> <C> <C> <C>
Edward H. Meyer -0- -0- $ 912,520
Chairman, -0- 30,000 1,395,597
President -0- -0- 1,584,347
and Chief
Executive Officer
Robert L. Berenson -0- -0- $ 280,659
President -0- -0- 356,597
Grey-N.Y -0- -0- 380,854
J. Alec Gerster -0- -0- $ 143,513
Executive -0- 500 191,119
Vice President -0- -0- 219,140
Stephen A. Novick -0- -0- $ 205,412
Executive -0- -0- 432,401
Vice President -0- -0- 495,207
John Shannon -0- -0- $ 61,741
President, -0- 500 82,492
Grey-International -0- -0- 65,982
</TABLE>
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<PAGE> 10
(1) All Other Compensation includes: (i) contributions of $6,300 in 1999 to
the Company's qualified defined contribution plans on behalf of the named
executives other than Mr. Shannon, who, as a United Kingdom resident,
participated in local pension programs to which he contributed funds from
his salary compensation; (ii) amount shown for Mr. Shannon represents
deferred compensation pursuant to a subsidiary-sponsored program for
United Kingdom executives; (iii) respective insurance premium expense
coverage or reimbursement of $79,870, $19,359, $7,213 and $24,112 in
1999, for Messrs. Meyer, Berenson, Gerster and Novick; (iv) accruals in
the amounts of $164,400 for Mr. Meyer in 1999 generally in respect of
amounts which would have been allocated to Mr. Meyer's accounts under the
Company's qualified defined contribution programs for such year but for
certain limitations determined under the federal tax laws; (v) respective
allocations under the Company's Senior Management Incentive Plan ("SMIP")
for 1999 for Messrs. Berenson, Meyer, Gerster and Novick of $130,000,
$661,950, $130,000 and $175,000; (vi) $150,000 of loan forgiveness in
1998 and $125,000 of loan forgiveness effected for 1999 in respect of Mr.
Berenson's indebtedness to the Company; and (vii) $200,000 of loan
forgiveness effected in early 1999 in respect to Mr. Novick's
indebtedness to the Company.
(2) Includes amounts paid into a deferred compensation trust on Mr. Meyer's
behalf in 1999 and amounts deferred on behalf of Messrs. Berenson and
Novick pursuant to Section 162(m) of the Internal Revenue Code. (See
"Certain Relationships and Related Transactions.")
AGGREGATE OPTIONS EXERCISED IN 1999 AND STOCK OPTION VALUES AS AT DECEMBER 31,
1999(1)
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
DECEMBER 31, 1999 DECEMBER 31, 1999
SHARES ---------------------------- -----------------------
ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE REALIZED(2) UNEXERCISABLE UNEXERCISABLE
- ------------------------ -------------------- ------------------ ------------------------------ ----------------------
<S> <C> <C> <C> <C>
Edward H. Meyer -- -- 75,000/0 $14,372,500/0
Robert L. Berenson -- -- 0/5,000 0/$1,257,500
J. Alec Gerster -- -- 0/3,000 0/$662,500
Stephen A. Novick -- -- 0/3,500 0/$880,250
John Shannon -- -- 0/2,500 0/$536,750
</TABLE>
(1) All options relate to shares of Common Stock.
(2) "Value Realized" represents the market price of the Common Stock on the
date of exercise less the exercise price paid.
OPTION GRANTS IN THE LAST FISCAL YEAR
No options were granted to any of the named executive officers during 1999.
9
<PAGE> 11
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation Committee is comprised of the Company's outside
directors, Mark N. Kaplan and Richard R. Reiss, Jr. Mr. Reiss joined the
Committee in September 1999 after his election to the board in May 1999,
following the death of Richard Shinn. Mr. Kaplan has served on the Committee for
many years. The Committee is responsible for the establishment of the goals of
the Company's compensation practices and the implementation of compensation
programs that further these goals. It reviews regularly the development of the
Company's operations, its revenue and profit performance, its prospects for
growth, the general trends in the advertising agency industry and the particular
needs of the Company.
The Committee reviews and approves allocations under several long-term
deferred and current compensation programs. These programs, which utilize both
cash and stock awards, are designed to foster the retention of key management
personnel and a strong commitment by the Company's senior executives to the
interests of the Company's stockholders, clients and business, by rewarding
excellent performance with current compensation, enhancing motivation for
continued profit performance, and encouraging a strong community of interests
with the Company's stockholders through share awards.
These are particularly important, and not readily subject to a short-term
formula approach, in the advertising industry where compensation is heavily
negotiated and where there is great demand for talented people, thus resulting
in a high potential for executive turnover. The Committee believes that the
programs adopted by the Company have been helpful in retaining and motivating
its executive officers.
The Company's executive officers, as disclosed in this proxy statement,
own a substantial interest in the Company's stock, a significant portion of
which was acquired over many years through a number of the Company's stock
programs. This indicates the importance which the Company places on management
having the same interests as stockholders generally.
A significant portion of the executives' total compensation is provided
through payment of discretionary annual bonuses and through allocations under
the Company's 1998 Senior Management Incentive Plan (the "1998 SMIP") which are
intended to create incentives to improve growth and profitability. In granting
annual bonuses, the Committee considers the results of operations of the
Company, the executives' relative contribution to the Company's overall success,
the need for executives to believe they are compensated competitively, the need
for bonuses to be scaled to reflect seniority and contribution, and other
relevant factors. In addition, in 1999, advertising industry professionals were
subject to the increased recruiting efforts by internet businesses and an
increased demand for highly qualified people generally. As a result, increases
in both cash and stock compensation were approved consistent with the
recommendations of the Chief Executive Officer to ensure the retention of key
executives of the Company.
The Company faced several challenges during the year, including difficult
conditions in a number of markets in which the Company operates, the loss of
certain clients in the Company's advertising agency business in 1998 which were
not replaced fully, the continued losses at certain of its international
operations, and the associated costs incurred to address those international
operations. As a result net income was lower than in the prior year. Mr. Meyer's
bonus for 1999 was $250,000, a decrease of $150,000 from his bonus for 1998
which the Committee believed was an appropriate reduction consistent with the
decline in the Company's profitability for 1999. In determining the bonus to Mr.
Meyer, nevertheless, the Committee recognized that Mr. Meyer continues to have
strong relationships with key clients of the Company, plays an important
leadership role in the Company, and that Mr. Meyer undertook positive
initiatives to return the Company to better levels of performance. The Committee
also recognizes the increasingly costly marketplace for senior executive talent
in the advertising agency industry generally and the necessity for the Company
to remain competitive. In determining Mr. Meyer's compensation elements, the
Committee considered the performance of the Company and the compensation of
other chief executive officers generally, as such data is publicly available and
set forth in various compilations. The Committee further considered that Mr.
Meyer has been employed by the Company since 1956 and has served as the Chief
Executive Officer since 1971, and that
10
<PAGE> 12
Mr. Meyer has helped the Company to build a solid foundation for the Company's
growth. The Committee also considered Mr. Meyer's long-term contributions in
creating value for the Company and its stockholders by establishing and
maintaining many significant client relationships, and by overseeing the
Company's expansion into new disciplines and parts of the world.
Under the 1998 SMIP, as approved by the Company's stockholders,
participants are credited with compensation in an aggregate amount equal to 12%
of the Company's pre-tax operating earnings for each year from 1998 through
2002. Because of Mr. Meyer's senior position and his substantial interest in the
equity of the Company, the Committee awarded Mr. Meyer with respect to 1999 an
amount corresponding to 15% of the aggregate amount credited for 1999 under
SMIP.
The income laws deny tax deductions to publicly-held corporations for
annual compensation paid to certain executive officers in excess of $1,000,000,
subject to certain exceptions. The Committee believes the Company should take
appropriate steps to be in a position to preserve the tax deductibility of
compensation payments, to the extent such steps are consistent with providing
competitive compensation to its executives and the Company otherwise satisfies
the requirements of the tax law. Thus, to satisfy the requirements of the tax
law, the Committee submitted to, and secured the approval of, the stockholders
at the 1994 annual meeting of stockholders, the Company's stock compensation and
incentive plans designed to comply with such tax laws. In addition, and for the
same purpose, as discussed below, the Company has entered into arrangements with
Mr. Meyer, and deferred certain compensation for Messrs. Berenson and Novick to
ensure continued compliance in the future.
Mark N. Kaplan
Richard R. Reiss, Jr.
11
<PAGE> 13
SENIOR EXECUTIVE OFFICER POST-EMPLOYMENT COMPENSATION PLAN; PENSION ARRANGEMENTS
The Senior Executive Officer Post-Employment Compensation Plan provides
that certain qualified officers of the Company and its subsidiaries will be
entitled upon retirement at or after the age of 60 to a lifetime supplemental
pension of a maximum of $60,000 per year depending, in part, upon the date of
retirement. Persons who are executive vice presidents of the Company, or more
senior, or are designated senior executive officers of certain of the Company's
subsidiaries, and who have met certain age and length of service requirements,
and have been designated by the Board of Directors of the Company, are
participants under the plan. In addition, a surviving spouse of a recipient of a
pension under the plan is entitled to an annual pension equal to a maximum of
$30,000 depending, in part, upon the date of retirement of the deceased
participant, for the shorter of such spouse's life and 20 years. Each of the
named executives (other than Mr. Shannon) is a participant in the plan. In
addition, the Company has certain understandings whereby certain additional
pension amounts may be paid to Messrs. Berenson and Novick. Furthermore, in
1999, the Company agreed to make certain payments ("pension deposits") to a
rabbi trust established with the United States Trust Company of New York which
would be used to fund a pension obligation to be payable to Mr. Meyer over the
eleven year period following the normal expiration of his current employment
agreement ("pension period"). The initial pension deposit, made with respect to
1997, was $1,040,000 and annual pension deposits of $360,000 have been and are
scheduled to be made through 2002 contingent on Mr. Meyer's continued
employment. The amount of the pension to be paid to Mr. Meyer will be dependent
on, and be limited to, the funds in the rabbi trust during the pension period.
In addition, upon termination of Mr. Meyer's employment prior to the
commencement of the pension period or upon his death, any undistributed funds in
the rabbi trust would be paid to Mr. Meyer or his estate, as the case may be, in
satisfaction of any future obligations with respect to this pension.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has an agreement with Mr. Berenson providing for his
continued employment with the Company through December 31, 1999 at an annual
salary of $625,000 per year. In 1995, the Company loaned Mr. Berenson $125,000
which is forgivable by the Company assuming Mr. Berenson's continued employment
through 1999. During 1996, the Company loaned Mr. Berenson $700,000, $200,000 of
which is forgivable by the Company assuming Mr. Berenson's continued employment
through 2003 and $500,000 of which is forgivable by the Company assuming Mr.
Berenson's employment through 2004. In addition, upon a change in control of the
Company and the involuntary termination of Mr. Berenson's employment or material
diminution of his status, he shall be entitled to continued salary for one year
following such event and the immediate vesting of all of his currently-held
theretofore unvested stock options and allocations under SMIP, and the
forgiveness of the outstanding loans detailed above.
In 1994 the Company agreed to lend to Mr. Novick $600,000 to acquire a
new residence intended to be used, in part, for business entertaining. This loan
was forgivable in three installments of $200,000 at the end of each of 1996,
1997, and 1998, provided Mr. Novick was then employed by the Company. In early
1999 the Company forgave the then remaining $200,000 of the loan.
The Company has an employment agreement with Mr. Meyer, which provides
for Mr. Meyer's employment with the Company through December 31, 2002. The
agreement also provides for a minimum annual salary of $2,900,000 for Mr.
Meyer's services as Chief Executive Officer. If the Company terminates Mr.
Meyer's full-time employment as Chief Executive Officer without cause (as
defined in the agreement), or if Mr. Meyer effects such termination due to a
change of control of the Company or other good reason specified in the
agreement, Mr. Meyer will receive $3,000,000 in consideration of his employment.
The agreement further provides that the Company will defray premiums on life
insurance policies on Mr. Meyer's life payable to a beneficiary designated by
him; the Company paid $39,283 in premiums in respect of these policies in 1999.
The employment agreement also provides that Mr. Meyer may, for a period
subsequent to his termination of full-time employment as Chief Executive
Officer, provide the Company with consulting services for compensation at the
rate of $10,000 per month. If the Company terminates Mr. Meyer's full-time
employment as Chief Executive Officer without cause, or if Mr. Meyer effects
such termination due to a
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<PAGE> 14
change in control of the Company or for other good reason, Mr. Meyer will
receive a lump sum payment equivalent to his then current aggregate remuneration
multiplied by the greater of the number of years remaining in the term of the
employment agreement and the number three. In such event, Mr. Meyer will also
have an option to sell to the Company each share of the Common Stock and the
Class B Stock which he then owns at the per share market value of the Common
Stock. Mr. Meyer's agreement also provides that, for the ten year period
(subject to reduction or suspension in the event Mr. Meyer becomes disabled or
is in breach of his agreement) following his termination of employment, the
Company will, among other things, provide Mr. Meyer with an office, and related
office staff and facilities, and the continued use of a car and driver. The
Company has also agreed to reimburse Mr. Meyer for certain business expenses
incurred by him for a ten year period following termination of his employment up
to $100,000 per year during the first five years of such period and $50,000 per
year during the remainder of such period, with such amounts being adjusted for
increases in the consumer price index until the date of termination of his
employment. During such ten year period, Mr. Meyer has also been charged with
the responsibility of overseeing a certain portion of the Company's charitable
contributions and, thus, will see to the contribution to charities of $100,000
per year of the Company's funds during the first five years of the period and of
$50,000 per year during the remainder of the period.
In the context of the agreement extending the term of Mr. Meyer's
employment agreement through the date hereinabove mentioned, the Company and Mr.
Meyer also reached agreement providing for the deferral of certain compensation
otherwise payable to him and the payment of such deferred compensation into a
trust, commonly referred to as a rabbi trust, established with United States
Trust Company of New York. The purpose of the trust arrangement is to enhance
the Company's ability to deduct compensation paid to Mr. Meyer without the
application of Section 162(m) of the Internal Revenue Code ("Section") at such
time as the monies are paid to Mr. Meyer from the trust. The Section, under
certain circumstances, denies a tax deduction to an employer for certain
compensation expenses in excess of $1,000,000 per year paid by a publicly-held
corporation to certain of its executives. For 1999, all W-2 compensation
attributable to Mr. Meyer in excess of $999,700 was deferred and paid into the
trust. In 2000 and subsequent years, such compensation as shall be timely
elected by Mr. Meyer shall be deferred and paid into the trust provided that no
such election shall cause any compensation paid to Mr. Meyer to be
non-deductible by reason of the Section. Amounts deferred and paid into the
trust shall be paid to Mr. Meyer or to his estate, as the case may be, following
the expiration of Mr. Meyer's employment agreement, or the termination of his
employment by reason of death or disability. For the purpose of the presentation
of Mr. Meyer's compensation in the Summary Compensation Table hereinabove
provided, the amounts deferred and paid into the trust are deemed having been
paid to Mr. Meyer.
In 1983, the Company sold and issued $3,025,000 principal amount of its
8-1/2% Convertible Subordinated Debentures, due December 31, 2003, to Mr. Meyer
in consideration of a purchase price of equal amount, of which $25,000 was paid
in cash and the remainder by delivery of Mr. Meyer's long-term 9% full recourse
promissory note in the principal amount of $3,000,000 due December 31, 2004. The
Debentures are convertible at any time into one share of Common Stock and one
share of Class B Stock, at a current conversion price of $118.33, subject to
adjustment upon the occurrence of certain events. During 1992, Mr. Meyer
exercised certain stock options which had been granted to him in 1984, and, in
connection therewith pursuant to the stock option agreement, issued to the
Company his promissory note in the amount of $3,169,690, representing the
exercise price in excess of the par value of the shares issued on exercise,
which amount was paid in cash, and his promissory note in the amount of
$2,339,988, representing the amount of tax required to be withheld in connection
with such option exercise. The promissory notes are each full recourse, mature
on December 22, 2001 and bear interest at the rate of 6.06% per year. Mr. Meyer
is also indebted to the Company in the aggregate amount of $762,950 pursuant to
long-term 9%, full recourse promissory notes delivered to the Company in
connection with Mr. Meyer's purchase of shares of Series I, II and III Preferred
Stock (collectively the "Preferred Stock"). The redemption date of Preferred
Stock is fixed at April 7, 2004. The terms of the Preferred Stock also give Mr.
Meyer or his estate, as the case may be, the option to require the Company to
redeem his Preferred Stock for a period of 12 months following his (i) death,
(ii) permanent disability or permanent mental disability, (iii) termination of
full-time employment for good reason or (iv) termination of full-time employment
by the Company without cause.
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<PAGE> 15
If Mr. Meyer had been terminated effective December 31, 1999 under
circumstances which would have resulted in payment of the special severance
detailed in the foregoing description of his agreement, the amount then payable
to him would have been $23,472,493. Other than pursuant to the loans described
above in connection with Mr. Meyer's securities, and Mr. Berenson's
arrangements, no executive named above is indebted to the Company for more than
$60,000. Certain key employees of the Company, including the named executives
(other than Mr. Shannon) and certain members of their immediate families
("Beneficiaries"), have entered into the Voting Trust Agreement, as amended in
1987 and 1994, pursuant to which the Beneficiaries have deposited the shares of
Common Stock and Class B Stock owned by them into a voting trust. The
Beneficiaries have also agreed to deposit into the voting trust shares of Common
Stock or Class B Stock hereafter acquired by them. The voting trust was extended
in 1994 and will continue until 2004. Mr. Meyer has been designated the sole
Voting Trustee. Beneficiaries retain the sole authority to receive dividends
and, in general, to dispose of their shares held in the voting trust. The
Company has entered into indemnification agreements with each of the members of
the Board of Directors providing, generally, for the fullest indemnification
permitted by law.
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<PAGE> 16
PERFORMANCE GRAPH
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN FOR THE COMPANY, THE SP 500
NDEX AND FIVE OTHER PUBLICLY-TRADED ADVERTISING AGENCIES
[TOTAL SHAREHOLDER RETURNS GRAPH]
<TABLE>
<CAPTION>
ANNUAL RETURN PERCENTAGE
YEARS ENDING
COMPANY NAME / INDEX DEC95 DEC96 DEC97 DEC98 DEC99
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
GREY ADVERTISING INC 35.05 29.18 30.79 12.19 11.17
S&P 500 INDEX 37.58 22.96 33.36 28.58 21.04
PEER GROUP 34.42 28.86 60.78 44.10 83.26
</TABLE>
<TABLE>
<CAPTION>
INDEXED RETURNS
BASE YEARS ENDING
PERIOD
COMPANY NAME / INDEX DEC94 DEC95 DEC96 DEC97 DEC98 DEC99
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
GREY ADVERTISING INC 100 135.05 174.46 228.17 255.98 284.58
S&P 500 INDEX 100 137.58 169.17 225.60 290.08 351.12
PEER GROUP 100 134.42 173.21 278.49 401.31 735.43
</TABLE>
The Company's peer group is comprised of The Interpublic Group of Companies,
Inc., Omnicom Group, Inc., True North Communications, Inc., WPP Group, plc,
Cordiant plc for 1993 - 1996, beginning in 1997 Cordiant Communications Group
and Saatchi & Saatchi plc, the two companies resulting from the demerger of
Cordiant plc in December 1997, and beginning in 1999 Young & Rubicam Inc. The
graph assumes the initial investment of $100 on December 31, 1994 and the
reinvestment of dividends thereafter.
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<PAGE> 17
APPROVAL OF AN AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION TO
CHANGE THE NAME OF THE COMPANY
The Board of Directors of the Company has approved, and recommends that
the stockholders approve the adoption of, an amendment to Article First of the
Company's Restated Certificate of Incorporation to change the Company's name
from Grey Advertising Inc. to Grey Global Group Inc. A copy of the proposed
amendment to Article First of the Restated Certificate of Incorporation is
attached as Annex A.
Over the last decade, the nature of the Company's business has evolved to
become increasingly global in nature. At the same time, the services provided to
clients involved more communications disciplines and expanded rapidly beyond
classic advertising to include a broad range of communication activities. The
non-advertising businesses specialize in, among other areas, public
relations/public affairs, direct marketing, internet communications, healthcare
marketing, and on-line and off-line media services.
To reflect more accurately the direction of the Company, the nature of
the services provided and the growth of substantial business in these developing
practices, the Board of Directors believes it is in the best interest of the
Company and its stockholders to change the name of the Company to Grey Global
Group Inc.
As reflected in the new name, the Company will now serve as a holding
company managing its various operations on a global basis, with the core
advertising agency operating as a separate division known as Grey Worldwide.
Grey Worldwide, as well as the Company's non-advertising operations, will report
to, and benefit from the services provided by, Grey Global Group Inc.
The affirmative vote of the holders of shares entitled to cast a majority
of the votes entitled to be cast by all holders of outstanding shares of Common
Stock, Limited Duration Class B Common Stock and Preferred Stock voting together
is required to adopt the proposed amendment. Accordingly, broker non-votes and
abstentions will have the same effect as a negative vote.
The Board of Directors of the Company has considered the proposed
amendment and, for the reasons described herein, unanimously recommends that the
Company's stockholders adopt the proposed amendment to Article First of the
Restated Certificate of Incorporation to change the name of the Company as set
forth in this Proxy Statement.
APPROVAL OF AN AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED COMMON SHARES, TO REDUCE THE PAR VALUE OF
EXISTING SHARES AND TO MAKE OTHER RELATED CHANGES
The Board of Directors of the Company has approved, and recommends that
the stockholders approve the adoption of, an amendment to Article Fourth of the
Company's Restated Certificate of Incorporation to increase the number of
authorized shares of Common Stock and Limited Duration Class B Common Stock,
reduce the par value of existing shares and amend the terms of the Company's
outstanding Preferred Stock to provide for equitable adjustments in the event of
a stock split or stock dividend relating to the Company's common shares. A copy
of the proposed amendment to Article Fourth of the Restated Certificate of
Incorporation is attached as Annex B.
Under the proposed amendment, the number of authorized shares of Common
Stock would be increased from ten million (10,000,000) to fifty million
(50,000,000), and the number of authorized shares of Limited Duration Class B
Common Stock would be increased from two million (2,000,000) to ten million
(10,000,000). The number of authorized shares of Preferred Stock would not be
affected. The additional shares of Common Stock and Limited Duration Class B
Common Stock authorized by the proposed amendment will have the same rights and
privileges, respectively, as the shares of Common Stock and Limited Duration
Class B Common Stock currently authorized. The shares of Common Stock and
Limited Duration Class B Common Stock are collectively referred to as the
"Common Equity".
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<PAGE> 18
Although currently authorized shares are sufficient to meet all known
needs, the Board of Directors considers it desirable that it have the
flexibility to issue an additional amount of shares without further stockholder
action unless required by law or the regulations of the exchange or association
on which the Company's shares are traded or quoted. This will enhance the
Company's flexibility in connection with possible stock splits, stock dividends,
acquisitions, financing and other corporate purposes should the Board of
Directors deem such actions to be in the best interest of the Company and its
stockholders.
Each of the Company's outstanding classes of shares presently have a par
value of $1.00 per share and, as a result, the Company is required to maintain,
as stated capital under Delaware law, $1.00 for each share outstanding.
Accordingly, if the Board of Directors were to issue additional shares, the
Company would need to increase stated capital by $1.00 for each share so issued.
To minimize the amount required to be maintained as stated capital and, thereby,
increase the funds available under Delaware law for dividends and the repurchase
of stock, the proposed amendment would also reduce the par value of each share
from $1.00 to $.01. Following the adoption of the proposed amendment, the stated
capital of the Company will be adjusted to reflect the reduced par value of the
Company's shares.
The Company presently has outstanding 30,000 shares of Preferred Stock,
all of which are held by Edward H. Meyer, the Company's Chairman, President and
Chief Executive Officer. As described below, the Board has determined, for the
sake of clarity, that modifications to the Preferred Stock are appropriate. The
Preferred Stock has rights essentially the same as one share of Common Stock and
one share of Limited Duration Class B Common Stock, in respect of voting and
dividends, and as contemplated upon issuance, its value is determined with
reference to the increase in the per share book value of the Common Stock. In
particular, the holder of a share of Preferred Stock is entitled to 11 votes
(the same as a holder of one share of Common Stock and one share of Limited
Duration Class B Common Stock), dividends equal to the greater of the fixed
dividend preference specified in the terms of the Preferred Stock and the
dividends paid on two shares of Common Equity, liquidation rights equal to the
greater of the liquidation preference amount specified in the terms of the
Preferred Stock and the amount received in liquidation by a holder of two shares
of Common Equity and a redemption price equal to the book value attributable of
two shares of Common Equity at the time of redemption, less a specified amount
equal to the discount at which such shares was originally issued. The Board
believes the adjustments are technical in nature and appropriate for the sake of
clarity.
To preserve the intent of the Book Value Preferred Stock Plan and to
ensure that the holder of the Preferred Stock is treated in a fair and equitable
manner, the proposal contemplates that the terms of the Preferred Stock be
amended so that following a stock dividend, stock split or similar event the
foregoing rights of the Preferred Stock would be equitably adjusted so that the
holder of Preferred Stock would be in a position similar to that of a holder of
one share of Common Stock and one share of Limited Duration Class B Common Stock
who would receive additional shares pursuant to a split or dividend. The
proposed amendment would effect all such equitable adjustments other than the
one relating to the redemption price, since the adjustment to the redemption
price could be effected by Board action, as permitted by the existing terms of
the Preferred Stock.
By amending the Restated Certificate of Incorporation at this time
as described in the preceding paragraph, the Company will avoid the delay which
would otherwise be involved in having to seek stockholder approval in the future
when or if the Board determined to effect a stock split or dividend.
While the issuance of shares in certain instances could have the
affect of forestalling a hostile takeover, the Board does not intend or view the
increase in authorized shares as an anti-takeover measure nor is the Company
aware of any proposed or contemplated transaction of this type.
Under the Company's Restated Certificate of Incorporation, the
Company's stockholders do not have preemptive rights. Accordingly, should the
Board of Directors elect to issue additional shares of Common Equity, existing
stockholders would not have any preferential rights to purchase such shares. In
addition, if the Board of Directors elects to issue additional shares of Common
Stock, such issuance could have a dilutive effect on earnings per share, voting
power and share holdings of current stockholders.
17
<PAGE> 19
The affirmative vote of the holders of shares entitled to cast a majority
of the votes entitled to be cast by all holders of outstanding shares of Common
Stock and Limited Duration Class B Common Stock, and the holder of Preferred
Stock, each voting as a separate class is required to adopt the proposed
amendment. Accordingly, broker non-votes and abstentions will have the same
effect as a negative vote.
The Board of Directors of the Company has considered the proposed
amendment and, for the reasons described herein, unanimously recommends that the
Company's stockholders adopt the proposed amendment to Article Fourth of the
Restated Certificate of Incorporation to allow for an increase the number of
authorized shares of Common Stock and Limited Duration Class B Common Stock,
reduce the par value of existing shares and amend the terms of the Company's
outstanding Preferred Stock to provide for equitable adjustments in the event of
a stock split, stock dividend or like event relating to the Company's common
shares.
APPROVAL OF AN AMENDMENT TO THE COMPANY'S 1994 STOCK INCENTIVE PLAN TO
INCREASE THE NUMBER OF SHARES OF COMMON STOCK AVAILABLE THEREUNDER
On June 27, 1994, the stockholders of the Company approved the
adoption of the Company's 1994 Stock Incentive Plan ("Plan"). Since then, of the
250,000 shares of Common Stock authorized for issuance under the Plan, 226,424
shares have been issued with respect to past awards. Additional shares are
required in order to support the Company's long-term incentive compensation
programs and to attract and retain employees. Accordingly, the Board of
Directors has approved and recommends to stockholders the authorization of an
additional 250,000 shares of Common Stock for issuance under the Plan.
The following is a description of the material terms of the Plan, and as
such is qualified by the actual terms of the Plan, a copy of which is on file
with the SEC.
PURPOSE AND ADMINISTRATION
The purpose of the Plan is to encourage ownership of Common Stock by
eligible key employees of the Company and its subsidiaries, and thereby to
provide increased incentive for such employees to put forth maximum effort for
the success of the Company and its subsidiaries, and to enable the Company
better to attract, retain and reward such employees. The Plan is administered by
the Compensation Committee ("Committee"). Key employees of the Company and its
subsidiaries are eligible to receive awards under the Plan.
AWARDS
Awards under the Plan may be granted in the form of options or restricted
stock, subject to the applicable terms and conditions set forth in the Plan. No
employee may be granted options for more than 75,000 shares or more than 75,000
shares of restricted stock over the term of the Plan.
If there is any change in the Common Stock due to stock dividend, stock
split, combination or exchange of shares, or otherwise, the number of shares
available for awards, the maximum number of options and shares of restricted
stock which may be granted to any one individual, the shares subject to any
award and the exercise price applicable to outstanding options will be
appropriately adjusted.
Options granted under the Plan are designated as either "incentive stock
options" (within the meaning of Section 422 of the Code) or "nonqualified stock
options". Unless sooner terminated by the terms of the Plan or by the terms of
any specific grant, each option will expire not later than ten years from the
date of grant. Additional requirements apply to options granted to "ten percent
stockholders". Options will be exercisable over their term at such times, in
such installments and subject to such conditions as the Committee may prescribe.
The Plan provides that each option granted to a participant expires if such
participant, without the written consent of the Company, engages in any business
or activity competitive with the business conducted by the Company or any of its
subsidiaries.
Shares of restricted stock may be sold to participants at a purchase
price per share determined by the Committee (which may be less than the then
fair market value per share). Shares of restricted stock may be
18
<PAGE> 20
issued or sold under the Plan for a per share purchase price below fair market
value only if the Company's "Earnings" for its fiscal year immediately prior to
the year of such issuance or sale exceed $15,000,000. "Earnings" for a
particular year is defined in the Plan as the Company's net income as determined
for financial reporting purposes, determined in accordance with generally
accepted accounting principles consistently applied, after deduction of all
expenses incurred by the Company, but before deduction of any amounts credited
for such year under the Company's 1998 Senior Management Incentive Plan (or any
successor plan thereto) and any deduction for the provision for taxes on income.
An employee who is granted the right to purchase shares of restricted stock may
exercise such right during such period after the time of grant as may be
determined by the Committee, provided that he or she is still an employee of the
Company or any of its subsidiaries on the date of such exercise.
Shares of restricted stock issued to or purchased by an employee under
the Plan will be subject to such restrictions as may be imposed by the Committee
at the time of issuance or at the time of the grant of the right to purchase
shares. Such restrictions may vary from employee to employee and may also vary
among several grants to the same employee.
AMENDMENT
The Board may, at any time, terminate, modify, amend or interpret the
Plan in any respect, except that any such amendment will be effective only upon
stockholder approval if the Board determines that such approval is necessary or
appropriate under the circumstances.
NEW PLAN BENEFITS
Since awards under the Plan are made in the discretion of the Committee,
neither the awards that will be made in 2000 nor the awards that would have been
made in 1999 had the amendment been in effect are reasonably ascertainable.
FEDERAL INCOME TAX TREATMENT
The following discussion of certain relevant income tax effects
applicable to options and restricted stock granted under the Plan is a brief
summary, and reference is made to the Internal Revenue Code and the regulations
and interpretations issued thereunder for a complete statement of all relevant
federal tax consequences. This summary is not intended to be exhaustive and does
not describe state, local or foreign tax consequences.
An optionee generally will not be taxed upon the grant of a nonqualified
stock option. Rather, at the time of exercise of such option, the optionee will
recognize ordinary income for federal income tax purposes in an amount equal to
the excess of the fair market value of the shares purchased over the option
price. The Company will generally be entitled to a tax deduction at such time
and in the same amount that the optionee recognizes ordinary income.
An optionee generally will not be in receipt of taxable income upon the
grant or timely exercise of an incentive stock option. Exercise of an incentive
stock option will be timely if made during its term and if the optionee remains
an employee of the Company or a subsidiary at all times during the period
beginning on the date of grant of the option and ending on the date three months
before the date of exercise (or one year before the date of exercise in the case
of a disabled optionee). The tax consequences of an untimely exercise of an
incentive stock option will be determined in accordance with the rules
applicable to nonqualified stock options. The Company is not entitled to any tax
deduction in connection with the grant or exercise of an incentive stock option.
However, if the optionee disposes of stock within the holding periods described
above, the Company may be entitled to a tax deduction for the amount of ordinary
income, if any, realized by the optionee.
An awardee generally will not be taxed upon the grant of a restricted
stock award, but rather will recognize ordinary income in an amount equal to the
fair market value of the Company's common stock at the
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<PAGE> 21
time the shares are no longer subject to a risk of forfeiture. The Company will
be entitled to a deduction at the time when, and in the amount that, the awardee
recognizes ordinary income.
On May 1, 2000, the closing price of the Company's Common Stock, as
quoted on the NASDAQ National Market System, was $470.00 per share.
The affirmative vote of the holders of shares entitled to cast a majority
of the votes entitled to be cast by holders of outstanding shares of Common
Stock, Limited Duration Class B Common Stock and Preferred Stock present and
entitled to vote on such matter is required to adopt the proposed amendment.
Accordingly, abstentions, but not broker non-votes, will have the same effect as
a negative vote.
The Board of Directors has considered the proposed amendment and, for the
reasons described herein, unanimously recommends the approval of the proposed
amendment to authorize an additional 250,000 shares of Common Stock for issuance
under the Plan.
RELATIONSHIP WITH INDEPENDENT AUDITORS
The Board of Directors of the Company has selected its present auditors,
the firm of Ernst & Young LLP, as independent auditors to examine and report on
the financial statements of the Company for the year ending December 31, 2000. A
representative of Ernst & Young LLP is expected to be present at the meeting to
make such statements as they deem appropriate and to respond to appropriate
stockholder questions. The Board has determined that, although not required, it
would be desirable to request from the stockholders an expression as to whether
they concur in the foregoing selection. The Board recommends that stockholders
vote to ratify such selection. If the holders of a majority of the votes
represented at the meeting do not ratify the selection of Ernst & Young LLP, the
selection of independent auditors will be reconsidered by the Board. Abstentions
will have the same effect as a negative vote, while broker non-votes will be
disregarded and have no effect.
The Board of Directors unanimously recommends a vote "FOR" this proposal.
STOCKHOLDER PROPOSALS
Any stockholder who wishes to submit a proposal to be presented at the
2001 Annual Meeting of Stockholders must forward such proposal to the Secretary
of the Company, at the address of the Company which is given above, so that it
is received no later than April 1, 2001.
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<PAGE> 22
SOLICITATION OF PROXIES
The solicitation of proxies will be conducted primarily by mail.
Employees of the Company, however, may solicit proxies by telephone, other means
of communication or personal contact, but at no additional compensation.
OTHER MATTERS
The Board of Directors is not aware of any other matters which may be
brought before the meeting. If other matters not known come before the meeting,
the persons named in the accompanying form of proxy or their substitutes will
vote such proxy in accordance with their best judgment.
Steven G. Felsher
Secretary
June 2, 2000
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<PAGE> 23
Annex A
PROPOSED AMENDMENT TO ARTICLE FIRST OF THE COMPANY'S
RESTATED CERTIFICATE OF INCORPORATION
FIRST: The name of the corporation (hereinafter called the
"Company") is GREY GLOBAL GROUP INC.
22
<PAGE> 24
Annex B
PROPOSED AMENDMENT TO ARTICLE FOURTH OF THE COMPANY'S
RESTATED CERTIFICATE OF INCORPORATION
FOURTH: The total number of shares of all classes of stock which the
Company shall have authority to issue is sixty million five hundred thousand
(60,500,000), consisting of fifty million (50,000,000) shares of Common Stock,
par value $.01 per share ("Common Stock"), and ten million (10,000,000) shares
of Limited Duration Class B Common Stock, par value $.01 per share ("Class B
Common Stock"), and five hundred thousand (500,000) shares of Preferred Stock,
par value $.01 per share ("Preferred Stock").
The designations and the powers, preferences and rights, and the
qualifications, limitations or restrictions thereof, of the Preferred Stock,
Common Stock and Class B Common Stock of the Company are set forth in the
following provisions:
A. Preferred Stock....
IV. Series I Preferred Stock. The number of shares constituting the
Series I Preferred Stock shall be 20,000, which number may from time to time be
decreased (but not below the number then outstanding) by the Board of Directors
and the voting power, preferences and relative, participating, optional,
dividend and other special rights, and the qualifications, limitations and
restrictions of the Series I Preferred Stock and the restrictions on the
Corporation in connection with the Series I Preferred Stock shall be as follows:
1. Dividends....
1C. Participating Dividends. Whenever there
is a declaration of a dividend upon the Common Equity, there shall also be a
declaration of a Participating Dividend upon the Series I Preferred Stock if, at
the time of such declaration upon the Common Equity, the Total Dividend Rate
multiplied by two (which number shall be equitably and automatically adjusted,
following the payment of any dividend with respect to the Common Equity in
additional shares of Common Equity, in a manner which corresponds in a direct
manner to the relative increase in the number of outstanding shares of Common
Equity as a result of the stock dividend) times the sum of (i) any prior payment
or payments or dividends upon Common Equity during the Dividend Year per share
of Common Equity outstanding at the time of such payment or payments ("Prior
Common Equity Dividend Payments") and (ii) the amount of any such declaration of
a dividend upon the Common Equity per share of Common Equity outstanding at the
time of such declaration ("Common Equity Dividend Declaration"), is greater than
the sum of any prior payment or payments of Preferential Dividends upon Series I
Preferred Stock during the Dividend Year per Share outstanding at the time of
such payment or payments ("Prior Preferential Dividend Payments") and any prior
payment or payments of Participating Dividends upon Series I Preferred Stock
during the Dividend Year per Share outstanding at the time of such payment or
payments ("Prior Participating Dividend Payments"). If there shall be a
declaration of a Participating Dividend as aforesaid, (a) the amount of such
Participating Dividend during any Dividend Year shall be equal to the Total
Dividend Rate multiplied by two (which number shall be equitably and
automatically adjusted, following the payment of any dividend with respect to
the Common Equity in additional shares of Common Equity, in a manner which
corresponds in a direct manner to the relative increase in the number of
outstanding shares of Common Equity as a result of the stock dividend) times the
sum of the Prior Common Equity Dividend Payments and the Common Equity Dividend
Declaration, minus the sum of the Prior Preferential Dividend Payments and the
Prior Participating Dividend Payments; and (b) payment of such Participating
Dividend shall be made on the date that payment of the corresponding dividend
upon the Common Equity is made. The foregoing notwithstanding, the holders of
Series I Preferred Stock shall not be entitled to participate in any dividend on
the Common Equity to the extent payable in additional shares of Common Equity.
23
<PAGE> 25
2. Redemption...
3. Liquidation....
3B. Liquidation Participation. Upon any such
liquidation, dissolution or winding up of the Corporation, after the holders of
the Series I Preferred Stock shall have been paid in full the Liquidation
Preference and the accrued and unpaid Preferential Dividends and the holders of
any other series of Preferred Stock have been paid their liquidation preferences
and any accrued and unpaid preferential dividends, the holders of the Series I
Preferred Stock and the holders of any other series of Preferred Stock shall not
be entitled to any further payment unless and until the holders of Common Equity
shall have received out of the assets of the Corporation available for
distribution to its stockholders (whether from capital, surplus or earnings),
for each share of Common Stock, an amount in cash equal to one-half (which
number shall be equitably and automatically adjusted, following the payment of
any dividend with respect to the Common Equity in additional shares of Common
Equity, in a manner which corresponds (but in an inverse manner) to the relative
increase in the number of outstanding shares of Common Equity as a result of the
stock dividend) of the Liquidation Preference and for each share of Class B
Common Stock, an amount equal to one-half (which number shall be equitably and
automatically adjusted, following the payment of any dividend with of the
Liquidation Preference; but respect to the Common Equity in additional shares of
Common Equity, in a manner which corresponds (but in an inverse manner) to the
relative increase in the number of outstanding shares of Common Equity as a
result of the stock dividend) if, after the holders of Common Equity shall have
been paid in full such amounts, the value of the remainder of the assets of the
Corporation available for distribution to its stockholders per share of Common
Equity, Series I Preferred Stock, and any other series of Preferred Stock
entitled to a liquidation participation is greater than the Original Discount
for a share of Series I Preferred Stock, the holder of any such share of Series
I Preferred Stock shall be entitled to receive a liquidation participation such
that the aggregate liquidation payment for each share of Series I Preferred
Stock is equal to the difference between two (which number shall be equitably
and automatically adjusted, following the payment of any dividend with respect
to the Common Equity in additional shares of Common Equity, in a manner which
corresponds in a direct manner to the relative increase in the number of
outstanding shares of Common Equity as a result of the stock dividend) times the
aggregate liquidation payment for each share of Common Equity and the Original
Discount at which the share of Series I Preferred Stock was issued....
4. Voting.
4A. General Right to Vote. The holders of Series I
Preferred Stock shall be entitled to eleven (which corresponds to the total
number of votes entitled to be cast by a holder of one share of Common Stock and
one share of Class B Common Stock and which number shall be automatically
increased should the Company pay a dividend on its Common Equity in additional
shares of Common Equity by the number of additional votes which such a holder of
one share of Common Stock and one share of Class B Common Stock would be
entitled to cast as a result of the stock dividend or any future stock
dividends) votes for each Share held of record and, together with the holders of
any other series of Preferred Stock who shall have the right and power to vote
generally with the holders of Common Equity, shall, together with the holders of
Common Equity, all voting as a single class, possess voting power for the
election of directors and for all other purposes, except as is otherwise
provided in the Restated Certificate of Incorporation or any certificate
amendatory thereof or supplemental thereto, this paragraph 4 and in paragraph 6
hereof. The foregoing notwithstanding, on and subsequent to the Conversion Date,
the holders of Series I Preferred Stock shall be entitled to two (which
corresponds to the total number of votes entitled to be cast by a holder of two
shares of Common Stock and which number shall be automatically increased should
the Company pay a dividend on its Common Equity in additional shares of Common
Equity by the number of additional votes which such a holder of two shares of
Common Stock would be entitled to cast as a result of the stock dividend or any
future stock dividends) votes for each Share held of record....
V. Series II Preferred Stock. The number of shares constituting the
Series II Preferred Stock shall be 5,000, which number may from time to time be
decreased (but not below the number of shares then
24
<PAGE> 26
outstanding) by the Board of Directors and the voting power, preferences and
relative, participating, optional, dividend and other special rights, and the
qualifications, limitations and restrictions of the Series II Preferred Stock
and the restrictions on the Corporation in connection with the Series II
Preferred Stock shall be as follows:
1. Dividends....
1C. Participating Dividends. Whenever there
is a declaration of a dividend upon the Common Equity, there shall also be a
declaration of a Participating Dividend upon the Series II Preferred Stock if,
at the time of such declaration upon the Common Equity, the Total Dividend Rate
multiplied by two (which number shall be equitably and automatically adjusted,
following the payment of any dividend with respect to the Common Equity in
additional shares of Common Equity, in a manner which corresponds in a direct
manner to the relative increase in the number of outstanding shares of Common
Equity as a result of the stock dividend) times the sum of (i) any prior payment
or payments or dividends upon Common Equity during the Dividend Year per share
of Common Equity outstanding at the time of such payment or payments ("Prior
Common Equity Dividend Payments") and (ii) the amount of any such declaration of
a dividend upon the Common Equity per share of Common Equity outstanding at the
time of such declaration ("Common Equity Dividend Declaration"), is greater than
the sum of any prior payment or payments of Preferential Dividends upon Series
II Preferred Stock during the Dividend Year per Share outstanding at the time of
such payment or payments ("Prior Preferential Dividend Payments") and any prior
payment or payments of Participating Dividends upon Series II Preferred Stock
during the Dividend Year per Share outstanding at the time of such payment or
payments ("Prior Participating Dividend Payments"). If there shall be a
declaration of a Participating Dividend as aforesaid, (a) the amount of such
Participating Dividend during any Dividend Year shall be equal to the Total
Dividend Rate multiplied by two (which number shall be equitably and
automatically adjusted, following the payment of any dividend with respect to
the Common Equity in additional shares of Common Equity, in a manner which
corresponds in a direct manner to the relative increase in the number of
outstanding shares of Common Equity as a result of the stock dividend) times the
sum of the Prior Common Equity Dividend Payments and the Common Equity Dividend
Declaration, minus the sum of the Prior Preferential Dividend Payments and the
Prior Participating Dividend Payments; and (b) payment of such Participating
Dividend shall be made on the date that payment of the corresponding dividend
upon the Common Equity is made.
25
<PAGE> 27
2. Redemption...
3. Liquidation....
3B. Liquidation Participation. Upon any such
liquidation, dissolution or winding up of the Corporation, after the holders of
the Series II Preferred Stock shall have been paid in full the Liquidation
Preference and the accrued and unpaid Preferential Dividends and the holders of
any other series of Preferred Stock have been paid their liquidation preferences
and any accrued and unpaid preferential dividends, the holders of the Series II
Preferred Stock and the holders of any other series of Preferred Stock shall not
be entitled to any further payment unless and until the holders of Common Equity
shall have received out of the assets of the Corporation available for
distribution to its stockholders (whether from capital, surplus or earnings),
for each share of Common Stock, an amount in cash equal to one-half (which
number shall be equitably and automatically adjusted following the payment of
any dividend with respect to the Common Equity in additional shares of Common
Equity, in a manner which corresponds (but in an inverse manner) to the relative
increase in the number of outstanding shares of Common Equity as a result of the
stock dividend) of the Liquidation Preference; but if, after the holders of
Common Equity shall have been paid in full such amount, the value of the
remainder of the assets of the Corporation available for distribution to its
stockholders per share of Common Equity, Series I Preferred Stock, Series II
Preferred Stock and any other series of Preferred Stock entitled to a
liquidation participation is greater than the Original Discount for a share of
Series II Preferred Stock, the holder of any such share of Series II Preferred
Stock shall be entitled to receive a liquidation participation such that the
aggregate liquidation payment for each share of Series II Preferred Stock is
equal to the difference between the aggregate of two (which number shall be
equitably and automatically adjusted following the payment of any dividend with
respect to the Common Equity in additional shares of Common Equity, in a manner
which corresponds in a direct manner to the relative increase in the number of
outstanding shares of Common Equity as a result of the stock dividend) times the
liquidation payment for each share of Common Equity and the Original Discount at
which the share of Series II Preferred Stock was issued....
4. Voting.
4A. General Right to Vote. The holders of Series II
Preferred Stock shall be entitled to eleven (which corresponds to the total
number of votes entitled to be cast by a holder of one share of Common Stock and
one share of Class B Common Stock and which number shall be automatically
increased should the Company pay a dividend on its Common Equity in additional
shares of Common Equity by the number of additional votes which such a holder of
one share of Common Stock and one share of Class B Common Stock would be
entitled to cast as a result of the stock dividend or any future stock
dividends) votes for each Share held of record and, together with the holders of
any other series of Preferred Stock who shall have the right and power to vote
generally with the holders of Common Equity, shall, together with the holders of
Common Equity, all voting as a single class, possess voting power for the
election of directors and for all other purposes, except as is otherwise
provided in this Certificate of Designations or the Restated Certificate of
Incorporation or any certificate amendatory thereof or supplemental thereto. The
foregoing notwithstanding, on and subsequent to the Conversion Date, the holders
of Series II Preferred Stock shall be entitled to two (which corresponds to the
total number of votes entitled to be cast by a holder of two shares of Common
Stock and which number shall be automatically increased should the Company pay a
dividend on its Common Equity in additional shares of Common Equity by the
number of additional votes which such a holder of two shares of Common Stock
would be entitled to cast as a result of the stock dividend or any future stock
dividends) votes for each Share held of record....
VI. Series III Preferred Stock. The number of shares constituting
the Series III Preferred Stock shall be 5,000, which number may from time to
time be decreased (but not below the number then outstanding) by the Board of
Directors and the voting power, preferences and relative, participating,
optional, dividend and other special rights, and the qualifications, limitations
and restrictions of the Series III Preferred
26
<PAGE> 28
Stock and the restrictions on the Corporation in connection with the Series III
Preferred Stock shall be as follows:
1. Dividends....
1C. Participating Dividends. Whenever there is
a declaration of a dividend upon the Common Equity, there shall also be a
declaration of a Participating Dividend upon the Series III Preferred Stock if,
at the time of such declaration upon the Common Equity, the Total Dividend Rate
multiplied by two (which number shall be equitably and automatically adjusted,
following the payment of any dividend with respect to the Common Equity in
additional shares of Common Equity, in a manner which corresponds in a direct
manner to the relative increase in the number of outstanding shares of Common
Equity as a result of the stock dividend) times the sum of (i) any prior payment
or payments or dividends upon Common Equity during the Dividend Year per share
of Common Equity outstanding at the time of such payment or payments ("Prior
Common Equity Dividend Payments") and (ii) the amount of any such declaration of
a dividend upon the Common Equity per share of Common Equity outstanding at the
time of such declaration ("Common Equity Dividend Declaration"), is greater than
the sum of any prior payment or payments of Preferential Dividends upon Series
III Preferred Stock during the Dividend Year per Share outstanding at the time
of such payment or payments ("Prior Preferential Dividend Payments") and any
prior payment or payments of Participating Dividends upon Series III Preferred
Stock during the Dividend Year per Share outstanding at the time of such payment
or payments ("Prior Participating Dividend Payments"). If there shall be a
declaration of a Participating Dividend as aforesaid, (a) the amount of such
Participating Dividend during any Dividend Year shall be equal to the Total
Dividend Rate multiplied by two (which number shall be equitably and
automatically adjusted, following the payment of any dividend with respect to
the Common Equity in additional shares of Common Equity, in a manner which
corresponds in a direct manner to the relative increase in the number of
outstanding shares of Common Equity as a result of the stock dividend) times the
sum of the Prior Common Equity Dividend Payments and the Common Equity Dividend
Declaration, minus the sum of the Prior Preferential Dividend Payments and the
Prior Participating Dividend Payments; and (b) payment of such Participating
Dividend shall be made on the date that payment of the corresponding dividend
upon the Common Equity is made.
27
<PAGE> 29
2. Redemption....
3. Liquidation....
3B. Liquidation Participation. Upon any such
liquidation, dissolution or winding up of the Corporation, after the holders of
the Series III Preferred Stock shall have been paid in full the Liquidation
Preference and the accrued and unpaid Preferential Dividends and the holders of
any other series of Preferred Stock have been paid their liquidation preferences
and any accrued and unpaid preferential dividends, the holders of the Series III
Preferred Stock and the holders of any other series of Preferred Stock shall not
be entitled to any further payment unless and until the holders of Common Equity
shall have received out of the assets of the Corporation available for
distribution to its stockholders (whether from capital, surplus or earnings),
for each share of Common Stock, an amount in cash equal to one-half (which
number shall be equitably and automatically adjusted, following the payment of
any dividend with respect to the Common Equity in additional shares of Common
Equity, in a manner which corresponds (but in an inverse manner) to the relative
increase in the number of outstanding shares of Common Equity as a result of the
stock dividend) of the Liquidation Preference; but if, after the holders of
Common Equity shall have been paid in full such amount, the value of the
remainder of the assets of the Corporation available for distribution to its
stockholders per share of Common Equity, Series I Preferred Stock, Series II
Preferred Stock, Series III Preferred Stock and any other series of Preferred
Stock entitled to a liquidation participation is greater than the Original
Discount for a share of Series III Preferred Stock, the holder of any such share
of Series III Preferred Stock shall be entitled to receive a liquidation
participation such that the aggregate liquidation payment for each share of
Series III Preferred Stock is equal to the difference between the aggregate of
two (which number shall be equitably and automatically adjusted, following the
payment of any dividend with respect to the Common Equity in additional shares
of Common Equity, in a manner which corresponds in a direct manner to the
relative increase in the number of outstanding shares of Common Equity as a
result of the stock dividend) times the liquidation payment for each share of
Common Equity and the Original Discount at which the share of Series III
Preferred Stock was issued....
4. Voting....
4A. General Right to Vote. The holders of Series III
Preferred Stock shall be entitled to eleven (which corresponds to the
total number of votes entitled to be cast by a holder of one share of Common
Stock and one share of Class B Common Stock and which number shall be
automatically increased should the Company pay a dividend on its Common Equity
in additional shares of Common Equity by the number of additional votes which
such a holder of one share of Common Stock and one share of Class B Common Stock
would be entitled to cast as a result of the stock dividend or any future stock
dividends) votes for each Share held of record and, together with the holders of
any other series of Preferred Stock who shall have the right and power to vote
generally with the holders of Common Equity, shall, together with the holders of
Common Equity, all voting as a single class, possess voting power for the
election of directors and for all other purposes, except as is otherwise
provided in this Certificate of Designations or the Restated Certificate of
Incorporation or any certificate amendatory thereof or supplemental thereto. The
foregoing notwithstanding, on and subsequent to the Conversion Date, the holders
of Series III Preferred Stock shall be entitled to two (which corresponds to the
total number of votes entitled to be cast by a holder of two shares of Common
Stock and which number shall be automatically increased should the Company pay a
dividend on its Common Equity in additional shares of Common Equity by the
number of additional votes which such a holder of two shares of Common Stock
would be entitled to cast as a result of the stock dividend or any future stock
dividends) votes for each Share held of record....
28
<PAGE> 30
GREY ADVERTISING INC.
COMMON STOCK
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDER TO BE HELD ON JUNE 28, 2000
The undersigned stockholder(s) of Grey Advertising Inc. ("Company")
hereby appoint(s) Edward H. Meyer and Steven G. Felsher, and each of them, the
true and lawful proxies, agents and attorneys of the undersigned each with full
power to act without the other and with full power of substitution and
revocation, to represent and act for the undersigned, in the name, place and
stead of the undersigned, and to vote all shares of the Company which the
undersigned would be entitled to vote if personally present at the Annual
Meeting of Stockholders to be held at the Company's San Francisco, California
Office, 58 Maiden Lane, San Francisco, California on June 28, 2000, at 8:00 A.M.
local time, and at any and all adjournments thereof, on the following matters.
THE SHARES REPRESENTED HEREBY WILL BE VOTED IN ACCORDANCE WITH THE
SPECIFICATIONS HEREIN, BUT WHERE SPECIFICATIONS ARE NOT INDICATED, THIS PROXY
WILL BE VOTED FOR THE ELECTION OF THE NOMINEE FOR DIRECTOR AND IN FAVOR OF THE
PROPOSALS REFERRED TO IN ITEMS 2 THROUGH 5. IF OTHER MATTERS NOT KNOWN COME
BEFORE THE MEETING THE PERSONS NAMED HEREIN OR THEIR SUBSTITUTES WILL VOTE SUCH
SHARES IN ACCORDANCE WITH THEIR BEST JUDGMENT.
THE UNDERSIGNED HEREBY RATIFIES AND CONFIRMS ALL THAT SAID PROXIES,
AGENTS AND ATTORNEYS, OR EITHER OF THEM, OR THEIR SUBSTITUTES, LAWFULLY MAY DO
AT THE MEETING AND HEREBY REVOKES ALL PROXIES HERETOFORE GIVEN BY THE
UNDERSIGNED TO VOTE AT SAID MEETING OR ANY AND ALL ADJOURNMENTS THEREOF.
IF ONLY ONE OF SAID PROXIES, OR HIS SUBSTITUTE, BE PRESENT AND VOTE AT
SAID MEETING, OR AT ANY OR ALL ADJOURNMENTS THEREOF, SUCH PERSON SHALL HAVE AND
MAY EXERCISE ALL POWERS HEREBY GRANTED.
(CONTINUED ON REVERSE SIDE)
<PAGE> 31
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
GREY ADVERTISING INC.
COMMON STOCK
JUNE 28, 2000
PLEASE DETACH AND MAIL IN THE ENVELOPE PROVIDED
- ------------------------------------------------------------------------------
WITHHELD
FOR FROM
PROPOSAL NO. 1. [ ] [ ]
The election of Edward H.
Meyer, as Director, to hold office until the Annual Meeting to be held in 2003
or until the election of his successor
FOR AGAINST ABSTAIN
PROPOSAL NO. 2. [ ] [ ] [ ]
A proposal to amend the Company's Restated Certificate of Incorporation to
change the name of the Company.
FOR AGAINST ABSTAIN
PROPOSAL NO. 3. [ ] [ ] [ ]
A proposal to amend the Company's Restated Certificate of Incorporation to
increase the number of authorized shares of the Company's Common Stock and
Limited Duration Class B Common Stock, to decrease the par value per share of
existing shares and to make related changes.
FOR AGAINST ABSTAIN
PROPOSAL NO. 4. [ ] [ ] [ ]
A proposal to amend
the Company 's 1994 Stock Incentive Plan to increase the number
of shares of Common Stock available for issuance thereunder.
FOR AGAINST ABSTAIN
PROPOSAL NO. 5. [ ] [ ] [ ]
A proposal to ratify the selection of Ernst & Young LLP as independent auditors
for the Company for 2000.
PROPOSAL NO. 6.
The transaction of such other business as may properly come before the
meeting, and at any and all adjournments thereof.
The undersigned hereby acknowledges receipt of the Notice of the Meeting and
Proxy Statement dated June 2, 2000.
Signature(s) (L.S.) Dated: , 2000
--------------------------------- --------------
NOTE: Stockholder(s) should sign exactly as name appears above.
<PAGE> 32
GREY ADVERTISING INC.
LIMITED DURATION CLASS B
COMMON STOCK
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDER TO BE HELD ON JUNE 28, 2000
The undersigned stockholder(s) of Grey Advertising Inc. ("Company")
hereby appoint(s) Edward H. Meyer and Steven G. Felsher, and each of them, the
true and lawful proxies, agents and attorneys of the undersigned each with full
power to act without the other and with full power of substitution and
revocation, to represent and act for the undersigned, in the name, place and
stead of the undersigned, and to vote all shares of the Company which the
undersigned would be entitled to vote if personally present at the Annual
Meeting of Stockholders to be held at the Company's San Francisco, California
Office, 58 Maiden Lane, San Francisco, California on June 28, 2000, at 8:00 A.M.
local time, and at any and all adjournments thereof, on the following matters.
THE SHARES REPRESENTED HEREBY WILL BE VOTED IN ACCORDANCE WITH THE
SPECIFICATIONS HEREIN, BUT WHERE SPECIFICATIONS ARE NOT INDICATED, THIS PROXY
WILL BE VOTED FOR THE ELECTION OF THE NOMINEE FOR DIRECTOR AND IN FAVOR OF THE
PROPOSALS REFERRED TO IN ITEMS 2 THROUGH 5. IF OTHER MATTERS NOT KNOWN COME
BEFORE THE MEETING THE PERSONS NAMED HEREIN OR THEIR SUBSTITUTES WILL VOTE SUCH
SHARES IN ACCORDANCE WITH THEIR BEST JUDGMENT.
THE UNDERSIGNED HEREBY RATIFIES AND CONFIRMS ALL THAT SAID PROXIES,
AGENTS AND ATTORNEYS, OR EITHER OF THEM, OR THEIR SUBSTITUTES, LAWFULLY MAY DO
AT THE MEETING AND HEREBY REVOKES ALL PROXIES HERETOFORE GIVEN BY THE
UNDERSIGNED TO VOTE AT SAID MEETING OR ANY AND ALL ADJOURNMENTS THEREOF.
IF ONLY ONE OF SAID PROXIES, OR HIS SUBSTITUTE, BE PRESENT AND VOTE AT
SAID MEETING, OR AT ANY OR ALL ADJOURNMENTS THEREOF, SUCH PERSON SHALL HAVE AND
MAY EXERCISE ALL POWERS HEREBY GRANTED.
(CONTINUED ON REVERSE SIDE)
<PAGE> 33
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
GREY ADVERTISING INC.
LIMITED DURATION CLASS B
COMMON STOCK
JUNE 28, 2000
PLEASE DETACH AND MAIL IN THE ENVELOPE PROVIDED
- ------------------------------------------------------------------------------
WITHHELD
FOR FROM
PROPOSAL NO. 1. [ ] [ ]
The election of Edward H.
Meyer, as Director, to hold office until the Annual Meeting to be held in 2003
or until the election of his successor
FOR AGAINST ABSTAIN
PROPOSAL NO. 2. [ ] [ ] [ ]
A proposal to amend the Company's Restated Certificate of Incorporation to
change the name of the Company.
FOR AGAINST ABSTAIN
PROPOSAL NO. 3. [ ] [ ] [ ]
A proposal to amend the Company's Restated Certificate of Incorporation to
increase the number of authorized shares of the Company's Common Stock and
Limited Duration Class B Common Stock, to decrease the par value per share of
existing shares and to make related changes.
FOR AGAINST ABSTAIN
PROPOSAL NO. 4. [ ] [ ] [ ]
A proposal to amend
the Company 's 1994 Stock Incentive Plan to increase the number
of shares of Common Stock available for issuance thereunder.
FOR AGAINST ABSTAIN
PROPOSAL NO. 5. [ ] [ ] [ ]
A proposal to ratify the selection of Ernst & Young LLP as independent auditors
for the Company for 2000.
PROPOSAL NO. 6.
The transaction of such other business as may properly come before the
meeting, and at any and all adjournments thereof.
The undersigned hereby acknowledges receipt of the Notice of the Meeting and
Proxy Statement dated June 2, 2000.
Signature(s) (L.S.) Dated: , 2000
--------------------------------- --------------
NOTE: Stockholder(s) should sign exactly as name appears above.
