SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by the Party other than the Registrant []
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
............................................................
The Interpublic Group of Companies, Inc.
............................................................
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),or
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) 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: <F1>
.........................................................
4) Proposed maximum aggregate value of transaction:
.........................................................
<F1> Set forth the amount on which the filing fee is calculated
and state how it was determined.
[ ] 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: ...............
4) Date Filed: ..........
PAGE
<PAGE>
THE INTERPUBLIC GROUP OF COMPANIES, INC.
1271 Avenue of the Americas
New York, New York 10020
April 7, 1994
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of
Stockholders of The Interpublic Group of Companies, Inc., to be
held at 11:00 A.M. Eastern Time, on Tuesday, May 17, 1994. The
meeting will be held in the Auditorium of the Equitable Center,
787 Seventh Avenue, New York, New York.
The business to be considered is described in the attached
notice of the meeting and Proxy Statement.
In addition to these matters, there will be a report on the
affairs of the Company, an opportunity for questions and comments
by stockholders and a showing of selected commercials recently
produced by the Company's subsidiaries.
We hope you will be able to attend.
Sincerely,
Philip H. Geier, Jr.
Chairman of the Board, President
and Chief Executive Officer
PAGE
<PAGE>
THE INTERPUBLIC GROUP OF COMPANIES, INC.
1271 Avenue of the Americas
New York, New York 10020
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held May 17, 1994
The Annual Meeting of Stockholders of The Interpublic Group of
Companies, Inc. (the "Company") will be held in the Auditorium of
the Equitable Center, 787 Seventh Avenue, New York, New York, on
Tuesday, May 17, 1994, at 11:00 A.M., Eastern Time, for the
following purposes:
1. To elect 11 directors;
2. To consider and act upon a proposal to
approve the Interpublic Outside Directors'
Stock Option Plan;
3. To consider and act upon a proposal to
confirm the appointment of Price Waterhouse
as independent accountants of the Company for
the year 1994; and
4. To transact such other business as may
properly come before the meeting and any
adjournment thereof.
The close of business on March 21, 1994, has been
designated as the record date for the determination of
stockholders entitled to notice of and to vote at this
meeting and any adjournment thereof.
By Order of the Board of Directors,
Christopher Rudge
Secretary
Dated: April 7, 1994
Whether or not you plan to attend the meeting in
person, please fill in, sign, date and promptly return the
enclosed proxy in the accompanying envelope, which requires
no postage if mailed in the United States. The proxy is
revocable, so that you may still vote your shares in person
if you attend the meeting and wish to do so.
PAGE
<PAGE>
THE INTERPUBLIC GROUP OF COMPANIES, INC.
_____________
PROXY STATEMENT
_____________
GENERAL
INTRODUCTION
This Proxy Statement is furnished in connection with
the solicitation by the Board of Directors (the
"Management") of The Interpublic Group of Companies, Inc.
("Interpublic" or the "Company") of proxies to be voted at
the Annual Meeting of Stockholders, which will be held in
the Auditorium of The Equitable Center, 787 Seventh Avenue,
New York, New York, at 11:00 A.M., Eastern Time, on Tuesday,
May 17, 1994.
The address of the Company's principal executive office
is 1271 Avenue of the Americas, New York, N.Y. 10020. This
Proxy Statement, the enclosed form of proxy and the
Company's Annual Report to Stockholders are first being sent
to stockholders on or about April 7, 1994.
Any proxy given in response to this solicitation may be
revoked at any time before it has been exercised. The
giving of the proxy will not affect your right to vote in
person if you attend the meeting. If you do not attend, or
if you attend but do not vote in person, the shares
represented by your proxy will be voted in accordance with
your specification with respect to the matters set forth in
items (1) through (3) and in the discretion of the person
voting your proxy with respect to any other matter arising
and voted upon at the meeting. Any proxy which omits such
specification will be voted FOR the election of Management's
nominees for director, FOR approval of the Interpublic
Outside Directors' Stock Option Plan and FOR the
confirmation of Price Waterhouse as independent accountants.
Stockholders have no appraisal rights with respect to the
matters being acted upon.
OUTSTANDING SHARES
The outstanding capital stock of the Company at the
close of business on March 21, 1994, the record date for
this meeting, consisted of 75,011,265 shares of Common
Stock. Each share of Common Stock is entitled to one vote
on all matters to be acted upon at the meeting. Set forth
below is information as to direct and indirect "beneficial
ownership" (as that term is defined in rules of the
Securities and Exchange Commission relating to solicitation
of proxies) of Common Stock of the Company as of December
31, 1993 by persons who on the basis of data available to
the Company had such beneficial ownership of more than 5% of
the Common Stock of the Company.
PAGE
<PAGE>
Amount
and Nature of Percent
Name and Address Beneficial of
of Beneficial Owner Ownership <F2> Class
The Capital Group, Inc 9,200,300 <F3> 12.3%
and subsidiaries
333 South Hope Street
Los Angeles, CA 90071
<F2> The Securities and Exchange Commission deems a person to be the
beneficial owner of a security (for purposes of the proxy rules)
if that person has voting or investment power or both with
respect to such security. Additionally, a security is deemed to
be beneficially owned by a person who has the right to acquire
beneficial ownership within 60 days -- for example, through the
exercise of a stock option. Under these standards more than one
person may be the beneficial owner of a security.
<F3> Information was obtained from Schedule 13G filed with the
Securities and Exchange Commission by The Capital Group, Inc.
("Capital") on or about February 11, 1994, as subsequently
amended. It is reported by Capital that neither Capital nor any
of its affiliates owns shares of Interpublic. Accounts under
discretionary management of the following investment management
companies owned by Capital hold shares of Interpublic in the
following amounts: Capital Guardian Trust Company and related
entities - 5,768,250 shares; Capital International Limited -
273,350 shares; Capital International, S.A., and other operating
subsidiaries - 363,700 shares and Capital Research and Management
Company - 2,795,000 shares. Capital Research and Management
Company manages a number of mutual funds, including Capital
Income Builder, Inc. and Capital World Growth & Income Fund,
Inc., which Frank Stanton, a director of the Company, serves as a
director.
PAGE
<PAGE>
The following table gives the direct and indirect "beneficial
ownership" of Common Stock of the Company on March 21, 1994, of each
nominee for election as a director, including the executive officers
named in the Summary Compensation Table below, and of all directors
and executive officers of the Company as a group:
Common Options
Name of Stock Exercisable
Beneficial Owner Ownership Within 60 Days
Eugene P. Beard 243,409 71,710
Lynne V. Cheney - -
Philip H. Geier, Jr. 534,978 159,358
Robert L. James 364,584 47,808
Frank B. Lowe 412,878 -
Leif H. Olsen 1,400 -
Kenneth L. Robbins 186,242 40,912
J. Phillip Samper 1,400 -
Joseph J. Sisco 1,600 -
Frank Stanton 3,200 -
Jacqueline G. Wexler 3,682 -
All directors and
executive officers
as a group 1,872,192 513,932
Notes:
(1) Stock ownership includes restricted stock awarded under the 1986
Stock Incentive Plan. Common Stock ownership in column one
together with options exercisable within 60 days in column two
constitute the entire direct and indirect beneficial ownership of
Common Stock by each of the named persons and the group.
(2) No person or group named in the foregoing table has beneficial
ownership of more than 1% of the outstanding Common Stock, as
defined above, except that the directors and executive officers
as a group own 3.2%.
(3) In all cases, the beneficial ownership shown is direct, except
that beneficial ownership by the following persons includes
indirect ownership held through trusts as follows: Mr. James -
36,094 shares and Mr. Lowe - 2,436 shares. In each case,
beneficial ownership of these shares is disclaimed.
PAGE
<PAGE>
VOTING
Election of directors shall be decided by a plurality of the
votes cast by the holders of shares of Common Stock present in person
or by proxy at the meeting and entitled to vote. Approval of the
proposals described in Items (2) and (3) will require the affirmative
vote of a majority of the shares present in person or by proxy at the
meeting and entitled to vote. The Company's transfer agent tabulates
the votes. Abstentions and broker non-votes are each tabulated
separately and are counted toward the quorum. Abstentions are counted
in tabulating votes cast on proposals presented to stockholders,
whereas broker non-votes are not counted in tabulating votes cast.
STOCKHOLDERS' PROPOSALS TO BE PRESENTED AT 1995 ANNUAL MEETING
Proposals of stockholders intended to be presented at the Annual
Meeting of Stockholders scheduled to be held on May 16, 1995, must be
received by the Company by December 8, 1994, in order to be considered
for inclusion in the Company's Proxy Statement and form of proxy
relating to that meeting.
1. ELECTION OF DIRECTORS
The nominees of the Management for election as directors of the
Company at the Annual Meeting, to hold office until the next Annual
Meeting of Stockholders and until their successors are elected and
qualify or until their earlier death, resignation or removal, and
certain information concerning each nominee, are given below. All of
the nominees are presently serving as directors of the Company except
Mrs. Cheney. The Management believes that all of the nominees will be
available and able to serve as directors. However, if for any reason
any of these persons should not be available or able to serve, proxies
will be voted for the remainder of those nominated and, unless the
size of the Board of Directors is reduced, for such substituted
nominees as shall be designated by the Management.
The following information with respect to the principal
occupation or employment, recent employment history, age and
directorships in public and certain other companies at February 22,
1994, has been furnished or confirmed to the Company by the respective
nominees.
McCann-Erickson Worldwide, Lintas Worldwide and The Lowe Group,
which are referred to below, are worldwide advertising agency systems
owned by Interpublic.
PAGE
<PAGE>
EUGENE P. BEARD, Executive Vice President-Finance and Operations
and Chief Financial Officer of the Company since 1985, has been
director of Interpublic since 1982. Director of National Westminster
Bancorp Inc., 59 Wall Street Fund, Inc. and Micrografx, Inc. Age 58.
Chairman of the Finance Committee. Member of the Executive Committee
and the Strategic Planning Committee for Non-Core Business.
LYNNE V. CHENEY, Distinguished Fellow, American Enterprise
Institute since 1993. Prior thereto, from 1986 to 1993, Mrs. Cheney
was Chairman of the National Endowment for the Humanities. She is a
director of Reader's Digest Association, Lockheed Corporation and IDS
Mutual Fund Group. Age 52.
PHILIP H. GEIER, JR., Chairman of the Board, President and Chief
Executive Officer of the Company, has been a director of Interpublic
since 1975. Mr. Geier was elected Chairman and Chief Executive
Officer of the Company in 1980 and President in 1985. Mr. Geier is a
director of Fiduciary Trust Company International and Woolworth
Corporation. Age 59.
Chairman of the Executive Committee. Member of the Finance and
Nominating Committees and the Strategic Planning Committee for Non-
Core Business.
ROBERT L. JAMES, Chairman of the Board and Chief Executive
Officer of McCann-Erickson Worldwide since 1985, has been a director
of Interpublic since 1976. Age 57.
FRANK B. LOWE, Chairman of The Lowe Group, has been a director of
Interpublic since 1990. Mr. Lowe has served as Chairman of The Lowe
Group since its founding in 1981. Age 52.
Chairman of the Strategic Planning Committee for Non-Core Business.
PAGE
<PAGE>
LEIF H. OLSEN, President of Leif H. Olsen Investments, Inc.,
economic consultants and financial managers, has been a director of
Interpublic since 1972. Mr. Olsen was Senior Vice President and
Economist of First National City Bank (now Citibank, N.A.) until 1978,
when he became Chairman of the Economic Policy Committee of Citibank
N.A., a post he held until 1985. He is a trustee of Atlantic Mutual
Insurance Company and a director of its affiliate Centennial Insurance
Company. Age 68.
Chairman of the Audit Committee. Member of the Compensation and
Finance Committees and the Strategic Planning Committee for Non-Core
Business.
KENNETH L. ROBBINS, Chairman of the Board and Chief Executive
Officer of Lintas Worldwide, has been a director of Interpublic since
1991. Prior thereto, from 1985, he directed the international
operations of Lintas Worldwide as Chairman of Lintas International.
Age 58.
J. PHILLIP SAMPER, President of Sun Microsystems Computer
Corporation, has been a director of Interpublic since 1990. Mr. Samper
was Vice Chairman and Executive Officer of the Eastman Kodak Company
from 1986 to 1989 and a member of the Board of Directors from 1983 to
1989. He was President and Chief Executive Officer of Kinder-Care
Learning Centers from 1990 to 1991. Mr. Samper is a director of
Armstrong World Industries, Inc. and Sylvan Learning Systems, Inc. Age
59.
Member of the Compensation and Audit Committees.
JOSEPH J. SISCO, Partner, Sisco Associates, international
management consultants based in Washington D.C., has been a director
of Interpublic since 1979. Dr. Sisco served as President and
subsequently as Chancellor of The American University from 1976 to
1981. Prior thereto, he had been with the United States State
Department for more than 25 years. His last position there was Under
Secretary of State for Political Affairs. Dr. Sisco is a director of
Braun A.G., Raytheon Company and Tenneco Inc. Age 74.
Chairman of the Nominating Committee. Member of the Audit,
Compensation, Executive and Finance Committees.
PAGE
<PAGE>
FRANK STANTON, President Emeritus, CBS Inc., has been a director
of Interpublic since 1976. Mr. Stanton was President of CBS Inc.
until 1971 and served as Vice Chairman of its Board of Directors until
his retirement in 1973. He served as Chairman of the American Red
Cross from 1973 to 1979. Mr. Stanton is a director of Berol
Corporation, Capital Income Builder, Inc., Capital World Growth &
Income Fund, Inc., and Sony Music Entertainment Inc. Age 86.
Chairman of the Compensation Committee.
JACQUELINE G. WEXLER, who retired as President of the National
Conference of Christians and Jews in 1990, has been a director of
Interpublic since 1974. Mrs. Wexler was President of Hunter College
from 1969 until 1979 and President of Academic Consulting Associates
from 1979 to 1982. She is a director of United Technologies
Corporation, Inc. Age 67.
Member of the Compensation, Executive and Nominating Committees.
PAGE
<PAGE>
PRINCIPAL COMMITTEES OF THE BOARD OF DIRECTORS
Finance Committee -- The Finance Committee has concurrent
jurisdiction with the Executive Committee over the management of the
financial affairs of the Company while the Board of Directors is not
in session. It also approves capital budgets, guarantees of
obligations of subsidiaries and affiliates and certain capital
transactions, and is the committee which administers the Interpublic
Retirement Account Plan. The Finance Committee held 12 meetings in
1993.
Executive Committee -- The Executive Committee is authorized to
exercise all powers of the Board of Directors which under Delaware law
and the By-Laws of the Company may properly be delegated to a
committee while the Board of Directors is not in session except
certain powers that have been delegated to other committees of the
Board of Directors. The Executive Committee held no meetings in 1993.
Audit Committee -- The Audit Committee, whose members may not be
officers or employees of the Company, is responsible for the selection
and retention, subject to the approval of the Board of Directors and
the stockholders, and the approval of the annual compensation, of the
Company's independent accountants. The Audit Committee confers with
the accountants and from time to time reports to the Board of
Directors upon the scope of the auditing of the books and accounts of
the Company. It also reviews and examines the procedures and methods
employed in the Company's internal audit program. It reviews and
submits to the Board of Directors, as soon as possible after the close
of each fiscal year, the consolidated balance sheet of the Company and
its subsidiaries and the related consolidated statements of income, of
stockholders' equity and of cash flows. The Audit Committee held two
meetings in 1993.
PAGE
<PAGE>
Compensation Committee -- The Compensation Committee is
responsible for approving the compensation paid by the Company or any
of its subsidiaries to directors who are employees of the Company or
of any such subsidiary. For these purposes, compensation is deemed to
include: (1) salary, (2) deferred compensation, (3) bonuses and other
extra compensation of all types, including awards under the Company's
Management Incentive Compensation Plan and the 1986 Stock Incentive
Plan, (4) insurance paid for by the Company or any of its subsidiaries
other than group plans, (5) annuities and individual retirement
arrangements, (6) stock options, (7) grants under the Long-Term
Performance Incentive Plan and (8) Special Deferred Benefit
Arrangements. It is the committee that administers the Long-Term
Performance Incentive Plan, the Management Incentive Compensation
Plan, the 1986 Stock Incentive Plan, the United Kingdom Stock Option
Plan and the Employee Stock Purchase Plan (1985). The Compensation
Committee held seven meetings in 1993.
Nominating Committee -- The Nominating Committee is responsible
for recommending to the Board of Directors the persons to be
recommended for election to the Board of Directors at the Annual
Meeting of Stockholders or any special meeting of stockholders or to
be selected by the Board of Directors to fill any vacancy or any
additional position created by the Board of Directors. Stockholders
who desire to recommend nominees may do so by writing to the Secretary
of the Company at the Company's principal executive office set forth
in the second paragraph on page 1 of this Proxy Statement. Any such
recommendation should be submitted prior to December 31 of the year
preceding the Annual Meeting of Stockholders in question, and the
recommendation will be given consideration by the Nominating
Committee. The Nominating Committee held two meetings in 1993.
Strategic Planning Committee for Non-Core Business -- This
Committee was formed in 1991 to develop long-term strategic proposals
for growth with specific emphasis on non-media advertising
developments. In particular, it investigates and reviews new revenue
streams for the Company and its agencies. This Committee held two
meetings in 1993.
ATTENDANCE AT BOARD OF DIRECTORS AND COMMITTEE MEETINGS
The Board of Directors of the Company held six meetings in 1993
and committees of the Board held a total of 25 meetings. Each of the
incumbent directors attended at least 80% of the meetings of the Board
of Directors and committees of the Board on which the director served
in 1993.
PAGE
<PAGE>
DIRECTORS' FEES
Each director who is not an employee of the Company or one of its
subsidiaries received in 1993 an annual retainer of $18,000 for
serving as a director, an annual retainer of $2,000 for each committee
on which he or she served, a fee of $1,000 for each meeting of the
Board attended, a fee of $750 for each committee meeting attended
other than on a Board meeting day, and $400 for each committee meeting
attended after the first Board or committee meeting on any day. The
Chairman of the Compensation Committee received an additional $3,000
per year and the Chairman of each of the Audit and Nominating
Committees received an additional $2,500. The annual retainer payable
to directors was increased to $22,000 in February 1994. The balance
of the fees remain the same for 1994. In addition, Mr. Samper
received a consultancy fee of $21,161 in 1993 for his services to the
Company in evaluating a non-core strategic business opportunity.
Effective June 1, 1994, an outside director with at least five
years of service will be entitled to receive an annual retirement
benefit under the Interpublic Outside Directors' Pension Plan upon
attaining the age of 65. The benefit will equal the amount of the
annual retainer paid to the director in the year in which he or she
ceased to serve as a director and will be paid for the same number of
years as the director's years of service. In the event of the death
of a director with a vested retirement benefit, the then present value
of the director's unpaid retirement benefits will be paid in a lump
sum to the surviving spouse or the estate of the director.
Reference is also made to Proposal 2 relating to the Interpublic
Outside Directors' Stock Option Plan.
PAGE
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COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth compensation from the Company and
its subsidiaries paid to the Chief Executive Officer and the four
other most highly compensated executive officers of the Company who
were serving as executive officers on December 31, 1993 (the "named
executive officers") for services rendered in all capacities for the
three years ended on that date. Compensation is reported in respect
of any year during which the person was an executive officer of the
Company. As used in this Proxy Statement, the executive officers of
the Company are deemed to include any director of the Company who
currently serves as a chief executive officer of one of the Company's
three agency systems, McCann-Erickson Worldwide, Lintas Worldwide and
The Lowe Group.
PAGE
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<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
------LONG TERM COMPENSATION------
------ ANNUAL COMPENSATION --------------- ------ AWARDS --------- PAYOUTS
Other Restricted Securities All
Name Annual Stock Underlying LTIP Other
and Principal Fiscal Salary Bonus Compensation Awards Options Payouts Compensation
Position Year <F4> <F5> <F6> <F7><F8> # <F9> <F10>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Philip H. Geier, Jr.
Chairman of the Board 1993 $965,000 $350,000 $ 189,873 $1,455,822 0 $ 350,000 $ 11,836
of Directors, President, 1992 965,000 722,500 1,071,000 0 97,200 1,174,998 11,889
and Chief Executive Officer 1991 894,167 450,000 460,575 402,358 630,261
Eugene P. Beard
Executive Vice President - 1993 500,000 250,000 103,313 647,032 0 157,500 12,413
Finance and Operations, 1992 500,000 375,750 459,000 0 46,800 528,749 12,506
Chief Financial Officer 1991 445,417 225,000 207,283 179,710 280,116
and Director
Robert L. James
Chairman of McCann-Erickson 1993 635,000 275,000 81,346 404,389 0 258,750 12,081
Worldwide and 1992 635,000 475,000 612,000 0 27,000 521,249 12,099
Director of Interpublic 1991 597,500 520,000 138,159 115,308 420,044
Frank B. Lowe
Chairman of Lowe Worldwide 1993 560,000 250,000 224,087 323,516 0 0 8,935
and Director of Interpublic 1992 560,000 0 161,735 0 23,400 0 10,491
1991 539,631 123,000 3,050,000 54,000 0
Kenneth L. Robbins
Chairman of Lintas Worldwide 1993 525,000 0 99,815 269,607 0 56,050 11,927
and Director of Interpublic 1992 481,250 240,000 0 23,400 216,025 12,098
1991 380,000 0 1,100,821 70,912 175,018
<FN>
<F4> The salaries of inside directors continuing to serve in the same position are reviewed every two years.
PAGE
<PAGE>
<F5> Bonus payments are made pursuant to the Management Incentive Compensation Plan.
<F6> Other Annual Compensation includes $125,000 in housing expenses paid to Mr. Lowe, medical/dental coverage paid on
behalf of Mr. Beard - $14,845, Mr. James - $19,556 and Messrs. Geier, Lowe and Robbins - $19,777 each, and amounts
paid in respect of spouse travel to Mr. Beard - $22,807, Mr. Geier - $28,675, Mr. Lowe - $54,154 and Mr. Robbins -
$32,151.
<F7> The shareholders on May 18, 1993 approved the issuance of restricted stock under the Company's 1986 Stock Incentive
Plan in exchange for phantom shares held under the Long-Term Performance Incentive Plan ("LTPIP") for the 1991-1994
performance period at 120% of their value on the date of exchange.
<F8> Restricted stock issued under the 1986 Stock Incentive Plan (the "Plan") was held at December 31, 1993 in the
following amounts, having the given values as of that date, by the named executive officers: Mr. Geier - 122,604
shares ($3,923,328); Mr. Beard - 30,162 shares ($965,184); Mr. James - 78,979 shares ($2,527,328); Mr. Lowe -
210,436 shares ($6,733,952) and Mr. Robbins - 86,053 shares ($2,753,696). This restricted stock was issued with at
least a five-year vesting period, subject to the release of restrictions by the Committee administering the Plan not
less than one year after the issue date. Dividends on restricted stock are paid on the same basis as ordinary
dividends on Common Stock.
The named executive officers also hold shares that were originally issued as restricted stock under the Plan on
which the restrictions have been released by the Committee on the condition that each of the holders agreed to
reimburse the Company for the value of his released shares in the event he leaves the employ of the Company before
the end of the original restriction period. These shares are held as follows: Mr. Geier - 316,000 shares; Mr. Beard
- 136,000 shares; Mr. James - 120,000 shares and Mr. Robbins - 26,250 shares.
<F9> Payouts under the LTPIP are made at the end of four-year performance periods. These four-year periods begin at two-
year intervals. Payouts for the 1989-1992 performance period were partially made in December 1992, with the balance
made in February 1993.
<F10> All Other Compensation for 1993 consists of the Company's matching contributions under the Interpublic Savings Plan
and the Company's share of the cost of group term life insurance. $1,800 was paid for premiums on group term life
insurance for each of the named executive officers except Mr. Lowe for whom $1,152 was paid. The following amounts
were paid to the named executive officers as matching contributions under the Savings Plan: Mr. Geier - $10,036; Mr.
Beard - $10,613; Mr. James - $10,281; Mr. Lowe -$7,783; and Mr. Robbins - $10,127.
</TABLE>
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<TABLE>
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
______________________________________________________________________________________________________________________________
The following table gives the number of options and the year-end value of options held by the named executive officers and
whether or not they are exercisable. None of these officers were granted options in 1993 or acquired shares upon the exercise
of options.
______________________________________________________________________________________________________________________________
<CAPTION>
Number of Securities Underlying Value of Unexercised
Unexercised Options at In-The-Money Options at
December 31, 1993 December 31, 1993 <F11>
------------------------------- ----------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C>
Philip H. Geier, Jr. 159,358 340,200 $ 2,077,136 $ 2,590,988
Eugene P. Beard 71,710 154,800 934,697 1,160,325
Robert L. James 47,808 94,500 623,149 719,719
Frank B. Lowe 0 77,400 0 580,163
Kenneth L. Robbins 40,912 68,400 668,466 492,975
<FN>
<F11> Based on the closing price of the Company's Common Stock as reported in the New York Stock Exchange Composite
Transactions on December 31, 1993.
</TABLE>
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<TABLE>
Long-Term Incentive Plan - Awards in Last Fiscal Year
______________________________________________________________________________________________________________________________
The following table provides information as to awards to the named executive officers in 1993 under the Long-Term Performance
Incentive Plan.
______________________________________________________________________________________________________________________________
<CAPTION>
Estimated Future Payouts under Non-Stock -
Price-Based Plans
Number and ------------------------------------------------
Allocation of Performance or Threshold Target Maximum
Performance Other Period Until (8% Growth) (15% Growth) (27% or Greater
Name Units Maturation or Payout Growth)
<S> <C> <C> <C> <C> <C>
Philip H. Geier, Jr. 10,800 IPG Worldwide 1/1/93 - 12/31/96 $ 216,000 $1,242,000 $1,890,000
Eugene P. Beard 6,350 IPG Worldwide 1/1/93 - 12/31/96 127,000 730,250 1,111,250
Robert L. James 5,625 McCann-Erickson 1/1/93 - 12/31/96 112,500 646,875 984,375
Worldwide
1,125 McCann-Erickson 22,500 129,375 196,875
International
Frank B. Lowe 5,250 Lowe Worldwide 1/1/93 - 12/31/96 105,000 603,750 918,750
550 Lowe International 11,000 63,250 96,250
550 Lowe USA 11,000 63,250 96,250
Kenneth L. Robbins 5,250 Lintas Worldwide 1/1/93 - 12/31/96 105,000 603,750 918,750
1,100 Lintas International 22,000 126,500 192,500
<FN>
The Long-Term Performance Incentive Plan ("LTPIP") provides for awards at two-year intervals of designated numbers of
"performance units" to key employees of the Company and its subsidiaries who are members of the Development Council, a group
of approximately 175 senior officers of the Company and its subsidiaries worldwide. The value of the performance units is
tied to the annual growth of profits of one or more operating components consisting of the office, agency, regional or
worldwide agency system with which an employee is principally associated. Performance units are awarded with a provisional
value of $100, which may increase to as much as $175 and may decrease to as little as zero, the increase or decrease depending
in each case on the extent to which the growth rates of the applicable operating components exceed or fall short of pre-
established growth rate objectives over a period of four calendar years (a "performance period").
The threshold growth rate objective is based on 8% growth in cumulative compound operating profit of an operating component
during a performance period, resulting in a threshold payout of $20 per performance unit. Failure to reach the threshold
payout will result in a zero award. The target growth rate objective given above is arbitrarily fixed at 15%. This growth
rate would result in a target payout of $115 per performance unit. The maximum growth rate objective is 27%, resulting in a
maximum payout of $175 per performance unit. It would be unusual to achieve the maximum growth rate objective.
</TABLE>
PAGE
<PAGE>
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT
AND CHANGE-IN-CONTROL ARRANGEMENTS
EMPLOYMENT AGREEMENTS
The named executive officers have employment contracts with the Company
providing for the annual compensation and termination dates set forth
below:
Contract Termination
Name Rate <F12> Date <F13>
Philip H. Geier, Jr. $ 965,000 June 30, 1996
Eugene P. Beard 575,000 <F14> June 30, 1995
Robert L. James 700,000 December 31, 1994
Frank B. Lowe 660,000 December 31, 1995
Kenneth L. Robbins 525,000 July 31, 1994
<F12> Contract rates do not include compensation pursuant to Special
Deferred Benefit Arrangements described below.
<F13> Each employment contract described above is terminable by either
party at any time upon twelve months' notice.
<F14> Includes deferred amount of $300,000.
PAGE
<PAGE>
SPECIAL DEFERRED BENEFIT ARRANGEMENTS
Mr. Beard is a party to three agreements which provide that if he dies
while he is employed by the Company amounts aggregating $194,000 per year
will be paid to his beneficiaries for 15 years following his death.
Alternatively, he will be paid benefits for 15 years ranging from $182,360
per year if he retires after March 31, 1994 to $194,000 per year if he
retires on or after his 60th birthday. The Company will enter into an
agreement with Mr. Beard providing for payment to him of an annual benefit
of $230,000 for 15 years commencing July 18, 1998. This benefit will be
forfeited if Mr. Beard were to leave the Company prior to July 18, 1998 for
any reason except death or disability without the consent of the
Compensation Committee.
Mr. Geier is a party to two agreements which provide that if he dies
while he is employed by the Company amounts aggregating $160,000 per year
will be paid to his beneficiaries for 15 years following his death.
Alternatively, he will be paid benefits for 15 years ranging from $148,000
per year if he retires after March 31, 1994 to $160,000 per year if he
retires on or after his 60th birthday. The Company will enter into an
agreement with Mr. Geier providing for payment to him of an annual benefit
of $255,000 for 15 years commencing July 18, 1998. This benefit will be
forfeited if Mr. Geier were to leave the Company prior to July 18, 1998 for
any reason except death or disability without the consent of the
Compensation Committee.
Mr. James is a party to an agreement which provides that if he dies
while he is employed by the Company $70,000 per year will be paid to his
beneficiaries for 15 years following his death. Alternatively, he will be
paid benefits for 15 years ranging from $57,400 per year if he retires on
or after March 31, 1994 to $70,000 per year if he retires on or after his
60th birthday.
Mr. Lowe is a party to an agreement which provides that if he dies while
he is employed by the Company $158,400 per year will be paid to his
beneficiaries for 15 years following his death. If he retires on or after
his 60th birthday, he will be paid a benefit of $158,400 per year for 15
years. If he retires, resigns or his employment is terminated on or after
his 55th birthday but prior to his 60th birthday, he will be paid benefits
ranging from $72,864 to $148,896 per year for 15 years based on the year
his employment terminates. In the event Mr. Lowe's employment terminates
prior to his 55th birthday, other than by reason of death, he will be paid
in installments aggregating $72,000 for each year he has worked since
January 1, 1991.
Mr. Robbins is a party to an agreement which provides that if he dies
while he is employed by the Company $104,000 per year will be paid to his
beneficiaries for 15 years following his death. Alternatively, he will be
paid benefits for 15 years ranging from $91,520 per year if he retires on
or after March 31, 1994 to $104,000 per year if he retires on or after his
60th birthday.
PAGE
<PAGE>
A deferred compensation trust for the purpose of funding up to 30% of
the gross retirement benefit obligations of the Company under these Special
Deferred Benefit Arrangements and other deferred arrangements was
established in 1990.
EXECUTIVE SEVERANCE AGREEMENTS
The named executive officers have agreements with the Company pursuant
to which (a) sums previously deferred pursuant to employment agreements,
Special Deferred Benefit Agreements and the Management Incentive
Compensation Plans of the Company and its subsidiaries would become payable
within 30 days following a "Change of Control" of the Company (as defined
in the agreements), if the individual had so elected prior to the Change of
Control, and (b) a cash severance payment would become payable to such
individual if, within two years after the Change of Control, his employment
should be terminated by the Company (except for "Cause" as defined in the
agreements) or the individual should resign for "Good Reason" (as defined
in the agreements).
The agreements entitle an individual to resign for Good Reason if,
without his consent, in any circumstance other than his disability, his
office in the Company or the geographical area of his employment should be
changed or his compensation should not continue to be paid and increased on
the same basis as had been in effect prior to the Change of Control or the
individual should determine in good faith that the Company had, without his
consent, effected a significant change in his status within or the nature
or scope of his duties or responsibilities with the Company and the Company
failed to cure such situation within 30 days after written notice from the
individual.
The severance payment would be three times the individual's average
annual compensation during the two calendar years ended prior to the date
of the Change of Control, plus a partial annual bonus based on the prior
year's bonus prorated for the elapsed portion of the year in which
employment terminated. The average compensation used in calculating the
severance payment would be the individual's taxable compensation plus any
deferred compensation accrued during the two relevant years but would not
include any deferred compensation earned in prior years but paid in those
years and would not include any taxable compensation relating to any stock
option or restricted stock plan of the Company.
Each agreement includes a covenant by the individual providing that if
the individual's employment terminates in circumstances entitling him to a
severance payment, he will, for a period of 18 months following the
termination of his employment, neither (a) solicit any employee of the
Company or any of its subsidiaries to leave such employ to enter into the
employ of the individual, or any person or entity with which the individual
is associated, nor (b) solicit or handle, on his own behalf or on behalf of
any person or entity with which he is associated, the advertising, public
relations, sales promotion or market research business of any advertiser
which was a client of the Company or any of its subsidiaries on the date
the individual's employment terminates.
PAGE
<PAGE>
The agreements give the individuals who are parties thereto an option to
limit payment under the agreements to such sum as would avoid subjecting
the individual to the excise tax imposed by Section 4999 of the Internal
Revenue Code.
GENERAL
Directors of the Company occasionally participate in the Interpublic
stock repurchase program by arranging block sales of shares to Interpublic
generally through their brokers. In 1993, Mr. Lowe sold 60,000 shares to
Interpublic pursuant to this program.
All directors and executive officers of the Company have filed stock
ownership reports on Form 4 and Form 5 on a timely basis according to the
rules, except that Mr. Lowe inadvertently filed one late report relating to
the transaction described above.
RETIREMENT PLAN
As of January 1, 1992, the Company adopted, subject to Internal Revenue
Service approval, the Interpublic Retirement Account Plan to provide
benefits under a "cash balance formula" to employees of Interpublic and
most of its domestic subsidiaries having at least five years of service.
Each year a participant's account balance is credited with an amount equal
to a percentage of the participant's annual compensation plus interest
credits. The percentage of annual compensation varies based on the sum of
the participant's age and years of service from 1.5% for participants with
a sum less than 40 years to 5% for participants with a sum of 80 or more
years. Interest credits are based on the 1-year Treasury Bill Rate plus 1
percentage point, compounded quarterly, and are guaranteed at a minimum
rate of 8% for 1992 and 1993 and 5% thereafter. Employees who qualify for
retirement may receive their benefits as early as the first day of the
month that follows retirement. For employees who do not qualify for
retirement, benefits may be withdrawn in a single lump sum or in annuity
form as of the first day of January following the first anniversary of
termination of employment.
Prior to January 1, 1992, employees employed by the Company and most of
its domestic subsidiaries who had attained the age of 21 and had at least
five years of service were entitled to receive a monthly benefit upon
retirement pursuant to a defined benefit pension plan. Until July 31,
1987, the monthly benefit was computed as a percentage of average monthly
compensation during the five consecutive calendar years with highest
compensation with certain exclusions. The percentage of average monthly
compensation used to calculate the monthly benefit was determined by
multiplying the number of years of accredited service by 1.3%. Beginning
July 31, 1987 the method of calculating the pension benefit was changed to
a career average formula based on annual compensation. The percentage of
annual compensation used to calculate the benefit was 1% of each year's
compensation up to $15,000 plus 1.3% of any compensation in excess of that
amount.
PAGE
<PAGE>
Participants in the defined benefit pension plan on December 31, 1991,
had their normal retirement benefit converted on an actuarial basis into an
"opening cash balance" as of January 1, 1992. This opening cash balance
was incorporated into the participant's cash balance benefit under the
Interpublic Retirement Account Plan and became eligible for interest
credits and withdrawal on the same terms that apply to other amounts
accrued under the cash balance formula. In addition, participants
continued to accrue benefits pursuant to the career average formula and
became eligible to receive upon retirement the higher of (1) the
participant's benefit under the cash balance formula or (2) the
participant's accrued retirement benefit under the career average formula
as of December 31, 1991, plus any accrual after that date calculated
pursuant to the career average formula. Employees joining the Company
after December 31, 1991 are eligible to accrue benefits only under the cash
balance formula.
With certain minor exceptions, "compensation" under the career average
formula as well as the cash balance formula includes all compensation
subject to Federal income tax withholding, including deferred compensation
paid during the year and non-cash items on which withholding is required,
such as shares of restricted stock as to which restrictions have
terminated. Compensation also includes contributions made to the Savings
Plan on a pre-tax basis pursuant to Section 401(k) of the Internal Revenue
Code. Annual compensation for pension accruals since December 31, 1988 has
been limited by Federal tax law. In 1993, the applicable limit was
$235,840. Effective January 1, 1994 the limit is $150,000, plus cost-of-
living adjustments.
Benefits under the cash balance formula and the career average formula
are not reduced by social security payments or by payments from other
sources. Joint and survivor and guaranteed minimum payment options, with
reduced pensions, are available upon retirement subject to certain
limitations. All benefits are funded through a trust.
The estimated annual retirement benefit that each of the named executive
officers would receive at normal retirement age, payable as a straight life
annuity, is given as follows: Mr. Beard - $113,529; Mr. Geier - $118,800;
Mr. James - $118,800; Mr. Lowe - $30,716 and Mr. Robbins - $92,633. The
current ERISA limit for annual retirement benefits is $118,800.
Alternatively, each of the named executive officers could take the benefit
as a lump sum estimated as follows: Mr. Beard - $1,176,750; Mr. Geier -
$1,231,386; Mr. James - $1,231,386; Mr. Lowe - $318,379 and Mr. Robbins -
$960,163.
PAGE
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
COMPENSATION POLICIES FOR EXECUTIVE OFFICERS
The principal objective of the Company's compensation program is to
provide key executives with short and long-term compensation which will
enhance shareholder value by motivating executives, increasing retention
and rewarding outstanding individual and Company performance.
Compensation begins with a base salary intended to reflect
responsibilities based on fully-satisfactory personal performance. To the
base salary is added incentive compensation pursuant to one or more of the
following three plans:
- Management Incentive Compensation Plan (MICP), which is an annual
bonus plan based on profits for the last completed fiscal year. Individual
awards are typically paid in cash but may be paid in stock.
- Long-Term Performance Incentive Plan (LTPIP), which provides for
biennial awards each having a four-year term. These provide for cash
incentives based on the long-term profits of the division or entity of the
Company for which the executive is responsible. (Incentives under this
plan based on appreciation of Interpublic Common Stock have been phased out
in favor of stock options.)
- 1986 Stock Incentive Plan, which provides for the issuance of stock
options and restricted stock. These instruments gain in value over time
based on the increase in value of Interpublic Common Stock. They are
forfeited in the absence of action by the Committee if an executive leaves
the Company during the restriction period.
The determination of the amount and form of executive compensation,
including incentive compensation, paid to each executive officer of the
Company is made by the Committee based on a discretionary evaluation, after
taking into account a number of factors that may include:
1. The financial results of the Company and the anticipated changes in
the economy and the Company.
2. The total compensation level for the particular executive based on
salary, bonus and incentive compensation.
3. The accumulated value of incentive compensation previously provided
such as stock options, restricted stock or performance units.
4. The Company's compensation plans and the current and future
financial and tax impact on the Company and on the executive of
benefits under these plans.
5. The particular achievements of the executive.
6. The talents and unique qualities of the executive, and the value of
his or her accumulated experience with the Company as those factors
are relevant to the future management of the Company.
PAGE
<PAGE>
The Committee consists of five highly experienced outside directors.
Four of the five members have served on the Compensation Committee for at
least 15 years, and have served on a number of other boards in a similar
capacity. All members have extensive knowledge of compensation practices
in industry and in the private sector.
The Committee's overall knowledge and experience of executive
compensation practices provides the basis for making judgmental evaluations
which in part determine individual performance awards to the executive
officers. In addition, compensation decisions by the Committee are greatly
influenced by the annual financial performance of the Company, which over
the last decade has been excellent.
1993 COMPENSATION OF EXECUTIVE OFFICERS
Salaries of the named executive officers remained unchanged in 1993 from
1992 except for an increase given to one officer to reflect his increased
responsibilities. The Company's policy is to review salaries of senior
executive officers serving in the same position every two years.
The terms of the MICP provide for a bonus pool in any one year that may
not exceed 5% of the amount by which consolidated pre-tax income on a
worldwide basis (as defined in the Plan) exceeds 15% of the average equity
capital of the Company in the immediately preceding calendar year. In
recognition of economic factors, the Committee approved lower bonuses to
executive officers with respect to 1993 than had been paid with respect to
1992. The payment of lower bonuses does not reflect on the performance of
the particular executive officers, but represents a general management
decision to conserve resources.
During late 1992 and early 1993, payouts were made in respect of
performance units held by two of the named executive officers (Mr. Geier
and Mr. Beard) based on the compound profit growth of Interpublic of 18%
over the 1989-1992 performance period. Payouts were made to each of two
other named executive officers holding 1989-1992 performance units (Mr.
James and Mr. Robbins) based on the compound profit growth of the
advertising agency systems on which their performance units were based.
Mr. Lowe did not hold 1989-1992 performance units. Performance units tied
to phantom shares reached their maximum value for the 1989-1992 performance
period of $4.8611 per phantom share.
In 1993, all U.S. executives holding phantom shares under the 1991-
1994 performance period under the LTPIP were given the opportunity to
exchange those phantom shares for restricted stock at a 20% premium over
the value of the phantom shares as of the date of exchange. Restrictions
on the restricted stock expire on September 20, 2000. This exchange was
approved by shareholders and is more fully described in the 1993 Proxy
Statement. Dividends on phantom shares (less dividends on the restricted
stock issued in exchange) will continue to be paid through 1994.
PAGE
<PAGE>
TAX LAW CHANGES
In 1993, the tax laws were amended to limit the deduction a publicly-
held company is allowed for compensation paid in 1994 and thereafter to the
chief executive officer and to the four most highly compensated executive
officers other than the chief executive officer. Generally, amounts paid
in excess of $1 million to a covered executive, other than performance-
based compensation, cannot be deducted. The Committee intends to consider
ways to maximize the deductibility of executive compensation, including
utilization of performance-based plans, while retaining the discretion the
Committee deems necessary to compensate executive officers in a manner
commensurate with performance and the competitive environment for executive
talent.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
For 1993, Mr. Geier received a salary of $965,000, unchanged from 1992.
The Committee believes that the level of Mr. Geier's salary is appropriate
in light of the Company's financial results. In 1993, the Company had an
increase of 12% in net income, an increase of 11% in earnings per share and
an increase of 2.5% in gross income before the effect of foreign currency
exchange [(3.3%) after such effect], in each case before the effect of FAS
106 with respect to post-retirement benefits other than pension and FAS 109
with respect to income taxes.
Mr. Geier received a bonus for 1993 under the MICP of $350,000, compared
with a bonus of $722,500 in 1992. The reduction of bonuses paid to the
named executive officers, including Mr. Geier, reflects the Company's
decision to conserve resources.
Mr. Geier received in 1993 cash payments of $350,000 in respect of the
1989-1992 performance period under the LTPIP. He also received restricted
stock having a value of $1,455,822 in exchange for outstanding phantom
shares issued for the 1991-1994 performance period.
A total of 10,800 performance units were issued to Mr. Geier in 1993 in
respect of the 1993-1996 performance period under the LTPIP. Individual
grants of performance units are determined by a formula and reflect both
the executive's salary range and organizational responsibilities. These
performance units, as well as restricted stock and options granted in
previous years, are long-term awards that will result in compensation to
Mr. Geier only in the event of his continued service to the Company. The
primary purpose of these long-term contingent awards is the same for Mr.
Geier as it is for all other executive officers, i.e., to provide a strong
incentive to continue to serve the shareholders and to increase the value
of the Company.
In addition to the previously described six factors that may be
considered by the Committee in determining compensation, a key performance
measurement used in determining Mr. Geier's 1993 compensation was his
achievement in successfully guiding the Company for the third consecutive
year through a difficult business environment and causing it to excel in
relation to its peers in quantitative as well as qualitative terms, as
shown by the Performance Graph below.
PAGE
<PAGE>
The Compensation Committee consists entirely of non-employee directors.
This Report is made unanimously.
Frank Stanton, Chairman
Leif H. Olsen
J. Phillip Samper
Joseph J. Sisco
Jacqueline G. Wexler
PAGE
<PAGE>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN <F15>
THE INTERPUBLIC GROUP OF COMPANIES, INC. COMMON STOCK,
THE S&P 500 AND PEER GROUP INDEX <F16>
The table below contains the data points used in the Performance Graph
which appears in the printed proxy statement.
- ----------------------------------------------------------------------
Interpublic 100.00 135.92 149.16 248.40 307.13 286.45
S & P 500 100.00 131.59 127.49 166.17 178.81 196.75
Peer Group 100.00 114.61 80.87 117.74 146.60 160.12
____________________________________________
<F15> Assumes $100 is invested on December 31, 1988 and that
dividends are reinvested.
Total shareholder return is weighted according to market
capitalization at the beginning of each annual period.
<F16> The Peer Group Index includes Interpublic and in addition
consists of Saatchi & Saatchi, Omnicom, Foote Cone & Belding,
Grey Advertising and WPP Group.
PAGE
<PAGE>
2. APPROVAL OF INTERPUBLIC OUTSIDE DIRECTORS' STOCK OPTION PLAN
Stockholders are asked to approve the Interpublic Outside
Directors' Stock Option Plan (the "Plan") providing for the issuance
on the first Friday in June in each year to each outside director
serving on that date of options to purchase shares of Interpublic
Common Stock having an aggregate fair market value of $30,000. The
purchase price for Interpublic Common Stock subject to options will be
its fair market value on the date of grant. Options will become
exercisable three years after the date of grant and will expire ten
years from the date of grant.
The purpose of the Plan is to enable members of the Board of
Directors who are not current employees of the Company to increase
their ownership of Interpublic Common Stock and to align their
interests with the stockholders of the Company in consideration for
their services to the Company. The six nominees for director who are
not employees will be eligible to participate in the Plan, subject to
the election of the nominees and the approval of the Plan by the
stockholders.
The number of options that would be issued to six outside
directors under the Plan is not currently determinable. Based on the
mean between the high and low trading prices of the Interpublic Common
Stock of $30.125 per share on March 30, 1994, as reported on the New
York Stock Exchange, options to purchase approximately 1,000 shares
would have been issued to each outside director, and options to
purchase a total of 6,000 shares would have been issued to six outside
or non-executive directors as a group.
An outside director will be able to exercise his or her stock
options for 90 days following cessation of service as a director
except that an outside director who is eligible to receive a benefit
under the Interpublic Outside Directors' Pension Plan may exercise his
or her options for 60 months following the date of retirement from the
Board of Directors, but in no event after the expiration of the ten-
year option term.
A total of 75,000 shares of Interpublic Common Stock will be
available for issuance under the Plan. Options will be issued under
the Plan for a period of ten years. The number of shares available
for award, and the exercise price and shares available under
outstanding options, are subject to adjustment to reflect any stock
split, stock dividend, recapitalization or other reorganization of the
Company.
The Plan will be administered by a Committee consisting of the
directors of the Company who are not outside directors. No persons
other than outside directors who are not current employees are
eligible to participate in the Plan.
PAGE
<PAGE>
TAX EFFECTS
Options to be issued under the Plan are nonqualified options
for U.S. Federal income tax purposes. Under current Treasury
Department regulations, no income is recognized by the optionee and no
deduction allowed to the Company or a subsidiary at the time an option
is granted. However, the optionee generally will recognize taxable
ordinary income at the time of exercise of an option in an amount
equal to the excess of the fair market value of the shares acquired at
the time of exercise over the option price thereof. The amount of
ordinary income will be deductible by the Company or a subsidiary for
Federal income tax purposes, provided that the amount qualifies as an
ordinary and necessary business expense. If the optionee subsequently
sells the shares, he or she will realize capital gain (or loss) on the
sale equal to the difference between (a) the sale price and (b) the
sum of the option price and the amount of ordinary income recognized
as a result of the exercise of the option. The capital gain (or loss)
will be a long-term capital gain (or loss) if more than 12 months have
elapsed between the date ordinary income was recognized and the date
of the sale. The maximum tax rate on net capital gain (the excess of
any net long-term capital gain over any net short-term capital loss)
is 28%.
The text of the Plan is annexed hereto as Appendix A, and the
foregoing description is qualified in its entirety by reference to
such text.
The favorable vote of a majority of the shares of Common Stock
present in person or by proxy and entitled to vote at the Annual
Meeting is required to approve this proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
PAGE
<PAGE>
3. APPOINTMENT OF INDEPENDENT ACCOUNTANTS
Price Waterhouse have been appointed and are acting as
independent accountants of the Company for the year 1994. This firm
has certified the Company's financial statements since 1952, and has
advised the Company that they are independent accountants with respect
to the Company and its subsidiaries within the meaning of the rules
and regulations of the Securities and Exchange Commission.
A representative of Price Waterhouse is expected to be present
at the Annual Meeting with the opportunity to make a statement and to
respond to appropriate questions.
If a majority of the shares of stock present in person or by
proxy and entitled to vote do not confirm the appointment of Price
Waterhouse, the Board of Directors of the Company will take such vote
into consideration and take action consistent to the extent
practicable with the stockholders' vote and the Company's need for the
services of independent accountants for the balance of the year 1994.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR CONFIRMATION OF
THIS APPOINTMENT.
PAGE
<PAGE>
SOLICITATION OF PROXIES
The solicitation of proxies is made on behalf of the
Management of the Company. Solicitation of proxies will be primarily
by mail. In addition, proxies may be solicited in person or by
telephone or telefax or other means by officers, directors and
employees of the Company, at no additional compensation. Banks,
brokers and others holding stock in their names or in the names of
nominees will be reimbursed for out-of-pocket expenses incurred in
sending proxies and proxy material to the beneficial owners of such
shares. The cost of solicitation will be borne by the Company. D.F.
King & Co., New York, N.Y., has been retained to assist the Management
in the distribution of proxy materials to, and the solicitation of
proxies from, brokers and other institutional holders at a fee of
$5,500 plus reasonable out-of-pocket expenses.
The Management is not aware of any other matters which may be
brought before the meeting. If other matters not now 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 judgement.
By Order of the Board of Directors,
Christopher Rudge
Secretary
April 7, 1994
PAGE
<PAGE>
APPENDIX A
THE INTERPUBLIC OUTSIDE DIRECTORS' STOCK OPTION PLAN
WHEREAS, The Interpublic Group of Companies, Inc. wishes to
adopt a stock option plan for its outside directors (the "Plan");
NOW, THEREFORE, the Plan is hereby adopted as of June 1, 1994.
ARTICLE I
INTRODUCTION
1.1. Name of Plan. The name of the Plan is the "Interpublic
Outside Directors' Stock Option Plan."
1.2. Purpose of Plan. The Plan is being established to
attract, retain and compensate for service highly qualified
individuals who are members of the Board of Directors of the
Corporation, but not current employees of the Corporation or any
of its subsidiaries, and to enable them to increase their
ownership in the Corporation's Common Stock. The Plan will be
beneficial to the Corporation and its stockholders since it will
allow these directors to have a greater personal financial stake
in the Corporation through the ownership of the Corporation's
Common Stock, in addition to underscoring their common interest
with stockholders in increasing the value of the Corporation's
Common Stock longer term.
1.3. Effective Date. The effective date of the Plan is June
1, 1994, or such later date as stockholder approval is obtained.
ARTICLE II
DEFINITIONS
When used in capitalized form in the Plan, the following terms
shall have the following meanings, unless the context clearly
indicates otherwise:
Act. "Act" means the Securities Exchange Act of 1934, as
presently or hereafter amended.
Committee. "Committee" means the directors of the Corporation
who are not Outside Directors.
Corporation. "Corporation" means The Interpublic Group of
Companies, Inc.
PAGE
<PAGE>
Fair Market Value. "Fair Market Value" means the mean of the
high and low prices at which the Common Stock of the Corporation
is traded on the date in question, as reported on the composite
tape for New York Stock Exchange issues.
NQSO. "NQSO" means a nonqualified stock option, and "NQSOs"
means nonqualified stock options.
Option Period. "Option Period" means the period beginning on
the date of grant of an NQSO and ending on the tenth anniversary
of the date of grant.
Outside Directors. "Outside Directors" means members of the
Board of Directors of the Corporation who are not employees of
the Corporation or any of its subsidiaries.
Plan. "Plan" means the Interpublic Outside Directors' Stock
Option Plan, as amended from time to time.
ARTICLE III
ELIGIBILITY
3.1. Condition. An individual who is an Outside Director on
or after June 1, 1994 shall be eligible to participate in the
Plan.
ARTICLE IV
NATURE OF OPTIONS
4.1. NQSOs. Only NQSOs may be granted under the Plan.
ARTICLE V
SHARES AVAILABLE
5.1. Numbers of Shares Available. The Plan provides for the
issuance of an aggregate of 75,000 shares of Common Stock of the
Corporation, par value $.10 per share, which may be authorized
but unissued shares, treasury shares, or shares purchased on the
open market.
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5.2. Adjustments. The number of shares of Common Stock of
the Corporation reserved for awards under the Plan and the
exercise price and the securities issuable under any outstanding
NQSOs shall be subject to appropriate adjustment by the Committee
to reflect any stock split, stock dividend, recapitalization,
merger, consolidation, reorganization, combination, or exchange
of shares or other similar event. All determinations made by the
Committee with respect to adjustment under this Section 5.2.
shall be conclusive and binding for all purposes of the Plan.
ARTICLE VI
GRANTS OF NQSOs
6.1. Annual Grant. Each year on the first Friday in the
month of June, each individual Outside Director shall
automatically receive an NQSO covering the whole number of shares
of Common Stock of the Corporation that has a Fair Market Value
on the date of grant of $30,000, or if no whole number of shares
has such an aggregate Fair Market Value then that whole number of
shares valued most closely to $30,000. Notwithstanding the
foregoing, if, on that first Friday, the General Counsel of the
Corporation determines, in his or her sole discretion, that the
Corporation is in possession of material, undisclosed information
about the Corporation, then the annual grant of NQSOs to Outside
Directors shall be suspended until the second day after public
dissemination of such information. If Common Stock of the
Corporation is not traded on the New York Stock Exchange on any
date a grant would otherwise be made, then the grant shall be
made as of the next day thereafter on which Common Stock of the
Corporation is so traded.
6.2. Option Price. The exercise price of the NQSO shall be
the Fair Market Value on the date of the grant.
ARTICLE VII
OPTION PERIOD
7.1. Duration. An NQSO granted under the Plan shall become
exercisable three years after the date of grant and shall expire
ten years after the date of grant.
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ARTICLE VIII
PAYMENT
8.1. Exercise Price. The exercise price of an NQSO shall be
paid in cash in U.S. Dollars on the date of exercise.
ARTICLE IX
CESSATION OF SERVICE,
RETIREMENT, DEATH
9.1 Cessation of Service. Upon cessation of service as an
Outside Director (other than for reasons of retirement or death),
NQSOs exercisable on the date of cessation of service shall
continue to be exercisable by the grantee for ninety days
following cessation of service, but in no event after the
expiration of the Option Period.
9.2. Retirement. If a grantee ceases to serve as an Outside
Director and is eligible for a benefit under the Interpublic
Outside Directors' Pension Plan, NQSOs exercisable on the date of
cessation of service shall continue to be exercisable by the
grantee for sixty months following the date of retirement from
the Board, but in no event after the expiration of the Option
Period.
9.3 Death. Upon the death of a grantee, NQSOs exercisable
on the date of death shall be exercisable thirty-six months from
date of death, but in no event after expiration of the Option
Period, by the grantee's legal representatives or heirs.
9.4 Forfeiture. If an NQSO is not exercisable on the date
on which the grantee ceases to serve as an Outside Director, or
if an NQSO is not exercised in full before it ceases to be
exercisable in accordance with Article VII hereof and the
preceding provisions of this Article IX, the NQSO shall, to the
extent not previously exercised, thereupon be forfeited.
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ARTICLE X
ADMINISTRATION, AMENDMENT
AND TERMINATION OF THE PLAN
10.1. Administration. The Plan shall be administered by the
Committee.
10.2. Amendment and Termination. The Plan may be terminated
or amended by the Committee as it deems advisable. However, an
amendment revising the size or frequency of awards or the
exercise price, date of exercisability or Option Period of an
NQSO shall not be made more frequently than every six months
unless necessary to comply with the Internal Revenue Code of
1986, as amended. No amendment may revoke or alter in a manner
unfavorable to the grantees any NQSOs then outstanding, nor may
the Committee amend the Plan without stockholder approval where
the absence of such approval would cause the Plan to fail to
comply with Rule 16b-3 under the Act or any other requirement of
any applicable law or regulation.
10.3. Expiration of the Plan. An NQSO may not be granted
under the Plan after June 7, 2004, but NQSOs granted prior to
that date shall continue to become exercisable and may be
exercised according to the terms of the Plan.
ARTICLE XI
NONTRANSFERABILITY
11.1. Options Not Transferable. No NQSO granted under the
Plan is transferable other than by will or the laws of descent
and distribution. During the grantee's lifetime, an NQSO may
only be exercised by the grantee or the grantee's guardian or
legal representative.
ARTICLE XII
COMPLIANCE WITH SEC REGULATIONS
12.1. Rule 16b-3. It is the Corporation's intent that the
Plan comply in all respects with new Rule 16b-3 under the Act and
that the Plan qualify as a formula plan meeting the conditions of
paragraph (c)(2)(ii) of Rule 16b-3. If any provision of the Plan
is found not to be in compliance with the Rule, or the Plan is
found not to qualify as such formula plan, any provision which is
not in compliance or does not qualify shall be deemed to be null
and void. All grants and exercises of NQSOs under the Plan shall
be executed in accordance with the requirements of Section 16 of
the Act and any regulations promulgated thereunder.
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ARTICLE XIII
RIGHTS OF DIRECTORS
13.1. Rights to NQSOs. Except as provided in the Plan, no
Outside Director shall have any claim or right to be granted an
NQSO under the Plan. Neither the Plan nor any action thereunder
shall be construed as giving any director any right to be
retained in the services of the Company.
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THE INTERPUBLIC GROUP OF COMPANIES, INC.
Proxy Solicited on Behalf of the Board of Directors of
the Company for Annual Meeting of Stockholders, May 17, 1994
The undersigned hereby constitutes and appoints Eugene P. Beard,
Philip H. Geier, Jr. and Christopher Rudge, and each of them, his
true and lawful agents and proxies, with full power of
substitution in each, to represent the undersigned at the Annual
Meeting of Stockholders of THE INTERPUBLIC GROUP OF COMPANIES,
INC. to be held in The Equitable Center, 787 Seventh Avenue, New
York, New York, on Tuesday, May 17, 1994 at 11:00 A.M. Eastern
Time, and at any adjournments, thereof, on all matters to come
before the meeting.
Election of Directors. Nominees:
Eugene P. Beard, Lynne V. Cheney, Philip H. Geier, Jr.,
Robert L. James, Frank B. Lowe, Leif H. Olsen, Kenneth
L. Robbins, J. Phillip Samper, Joseph J. Sisco, Frank
Stanton, Jacqueline G. Wexler
You are encouraged to specify your choices by marking the
appropriate boxes, SEE REVERSE SIDE, but you need not mark any
boxes if you wish to vote in accordance with the Board of
Directors' recommendations. The Proxy Holders cannot vote your
shares unless you sign and return this card.
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PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE
This proxy when properly executed will be voted in the manner
directed herein. If no direction is made, this proxy will be
voted FOR election of directors, FOR proposals 2 and 3 and in
their discretion on such other matters as may properly come
before the meeting.
The Board of Directors recommends a vote FOR proposals 2 and 3.
FOR WITHHELD
1. Election
of Directors.
FOR AGAINST ABSTAIN
2. Approval of Interpublic
Outside Directors'
Stock Option Plan.
FOR AGAINST ABSTAIN
3. Approval of independent
accountants.
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APPENDIX TO PROXY MATERIAL
The performance graph which appears on page 16 of the Company's
printed Proxy Statement is described in narrative form in this
electronic version under the heading "Comparison of Five-Year
Cumulative Total Return".
