SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the fiscal year ended Commission file number
December 31, 1993 1-6686
THE INTERPUBLIC GROUP OF COMPANIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-1024020
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1271 Avenue of the Americas 10020
New York, New York (Zip Code)
(Address of principal executive offices)
(212) 399-8000
Registrant's telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
Common Stock New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X . No___.
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K (Section 229.405 of this chapter) is
not contained herein, and will not be contained, to the best of
Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. ____.
The aggregate market value of the registrant's voting stock
(exclusive of shares beneficially owned by persons referred to in
response to Item 12 hereof) was $2,014,029,612 as of March 21,
1994.
Indicate the number of shares outstanding of each of the
registrant's classes of common stock, as of the latest practicable
date.
Common Stock outstanding at March 21, 1994: 75,011,265 shares.
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DOCUMENTS INCORPORATED BY REFERENCE
1. Portions of the Annual Report to Stockholders for the year
ended December 31, 1993 are incorporated by reference in Parts
I and II.
2. Portions of the Proxy Statement for the 1994 Annual Meeting of
Stockholders are incorporated by reference in Parts I and III.
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PART I
Item 1. Business
The Interpublic Group of Companies, Inc. was incorporated in
Delaware in September 1930 under the name of McCann-Erickson
Incorporated as the successor to the advertising agency businesses
founded in 1902 by A.W. Erickson and in 1911 by Harrison K.
McCann. It has operated under the Interpublic name since January
1961. As used in this Annual Report, the "Registrant" or
"Interpublic" refers to The Interpublic Group of Companies, Inc.
while the "Company" refers to Interpublic and its subsidiaries.
The advertising agency business is the primary business of the
Company. This business is carried on throughout the world through
three advertising agency systems, McCann-Erickson Worldwide,
Lintas Worldwide and The Lowe Group. The Company also offers
advertising agency services through association arrangements with
local agencies in various parts of the world. Other activities
conducted by the Company within the area of "marketing
communications" include market research, sales promotion, product
development, direct marketing, telemarketing and other related
services.
The principal functions of an advertising agency are to plan
and create advertising programs for its clients and to place
advertising in various media such as television, cable, radio,
magazines, newspapers, transit, direct response media and outdoor.
The planning function involves analysis of the market for the
particular product or service, evaluation of alternative methods
of distribution and choice of the appropriate media to reach the
desired market most efficiently. The advertising agency then
creates an advertising program, within the limits imposed by the
client's advertising budget, and places orders for space or time
with the media that have been selected.
The principal advertising agency subsidiaries of Interpublic
operating within the United States directly or through
subsidiaries and the locations of their respective corporate
headquarters are:
McCann-Erickson USA, Inc. ........ New York, New York
Lintas Campbell-Ewald
Company ......................... Detroit (Warren),
Michigan
Lintas, Inc. ..................... New York, New York
Dailey & Associates .............. Los Angeles, California
Lowe & Partners Inc. ............. New York, New York
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In addition to domestic operations, the Company provides advertising
services for clients whose business is international in scope as well as
for clients whose business is restricted to a single country or a small
number of countries. It has offices in Canada as well as in one or more
cities in each of the following countries:
EUROPE, AFRICA AND THE MIDDLE EAST
Austria Germany Namibia South Africa
Belgium Greece Netherlands Spain
Croatia Hungary Norway Sweden
Czech Republic Ireland Poland Switzerland
Denmark Italy Portugal Turkey
Finland Ivory Coast Russia United Arab Emirates
France Kenya Slovakia United Kingdom
Slovenia Zimbabwe
LATIN AMERICA AND THE CARIBBEAN
Argentina Costa Rica Honduras Peru
Barbados Dominican Republic Jamaica Puerto Rico
Bermuda Ecuador Mexico Trinidad
Brazil El Salvador Panama Uruguay
Chile Guatemala Paraguay Venezuela
Colombia
ASIA AND THE PACIFIC
Australia Japan People's Republic South Korea
Hong Kong Malaysia of China Taiwan
India Nepal Philippines Thailand
New Zealand Singapore
Operations in the foregoing countries are carried on by one or more
operating companies, at least one of which is either wholly owned by
Interpublic or a subsidiary or is a company in which Interpublic or a
subsidiary owns a 51% interest or more, except in India and Nepal, where
Interpublic or a subsidiary holds a minority interest.
The Company also offers advertising agency services in Aruba, the
Bahamas, Bahrain, Belize, Bolivia, Cambodia, Cameroon, Egypt, Gabon,
Ghana, Grand Cayman, Guadeloupe, Guyana, Haiti, Reunion, Indonesia,
Iran, Ivory Coast, Kuwait, Lebanon, Martinique, Mauritius, Morocco,
Nicaragua, Nigeria, Oman, Pakistan, Paraguay, Saudi Arabia, Senegal,
Slovakia, Slovenia, Sri Lanka, Surinam, Tunisia, Uganda, United Arab
Emirates (Dubai), Venezuela and Zaire through association arrangements
with local agencies operating in those countries.
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For information concerning revenues, operating profits and
identifiable assets on a geographical basis for each of the last
three years, reference is made to Note 13: Geographic Areas of the
Notes to the Consolidated Financial Statements in the Company's
Annual Report to Stockholders for the year ended December 31,
1993, which Note is hereby incorporated by reference.
Developments in 1993
The Company completed several acquisitions and divestitures
within the United States and abroad in 1993.
Effective as of September 30, 1993, Scali, McCabe, Sloves, Inc.
("Scali"), an advertising agency with headquarters in New York
City, was acquired. Scali, in turn, owns other advertising
agencies in Virginia and in Canada, France, Spain and Mexico.
Other transactions included the purchase in May 1993 of a
nineteen and nine-tenths percent (19.9%) interest in Atlantis
Communications Inc., a Canadian-based distributor and producer of
television programming, and the acquisition in August 1993 of the
remaining interest in McCann-Erickson Taiwan, an advertising
agency. In September 1993, the Company invested in a joint
venture called Brockway Direct Response Television, which is
involved in the production and distribution of infomercials.
McCann-Erickson Hakuhodo Inc. became a wholly-owned subsidiary of
Interpublic when the Company purchased the remaining forty-nine
percent (49%) interest in that Japanese advertising agency in
December 1993.
The Company sold GJW & Malmgren Golt, a U.K. corporation, in
January 1993. In July 1993, the Company completed the sale of
Hawley Martin Partners, Inc., an advertising agency, located in
Richmond, Virginia.
Income from Commissions, Fees and Publications
The Company generates income from planning, creating and
placing advertising in various media. Historically, the
commission customary in the industry was 15% of the gross charge
("billings") for advertising space or time; more recently lower
commissions have frequently been negotiated, but often with
additional incentives for better performance. Under commission
arrangements, media bill the Company at their gross rates. The
Company bills these amounts to its clients, remits the net charges
to the media and retains the balance as its commission. Some
clients, however, prefer to compensate the Company on a fee basis,
under which the Company bills its client for the net charges
billed by the media plus an agreed-upon fee. These fees usually
are calculated to reflect the Company's salary costs and out-of-
pocket expenses incurred on the client's behalf, plus proportional
overhead and a profit mark-up.
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Normally, the Company, like other advertising agencies, is
primarily responsible for paying the media with respect to firm
contracts for advertising time or space. This is a problem only
if the client is unable to pay the Company because of insolvency
or bankruptcy. The Company makes serious efforts to reduce the
risk from a client's insolvency, including (1) carrying out credit
clearances, (2) requiring in some cases payment of media in
advance, or (3) agreeing with the media that the Company will be
solely liable to pay the media only after the client has paid the
Company for the media charges.
The Company also receives commissions from clients for planning
and supervising work done by outside contractors in the physical
preparation of finished print advertisements and the production of
television and radio commercials. This commission is customarily
17.65% of the outside contractor's net charge, which is the same
as 15% of the outside contractor's total charges including
commission. With the spread of negotiated fees, the terms on
which outstanding contractors' charges are billed are subject to
wide variations and even include in some instances the elimination
of commissions entirely provided that there are adequate
negotiated fees.
The Company derives income in many other ways, including the
maintenance of specialized media placement facilities; the
creation and publication of brochures, billboards, point of sale
materials and direct marketing pieces for clients; the planning
and carrying out of specialized marketing research; managing
special events at which clients' products are featured; and
designing and carrying out interactive programs for special uses.
The five clients of the Company that made the largest
contribution in 1993 to income from commissions and fees accounted
individually for 3% to 10% of such income and in the aggregate
accounted for over 33% of such income. Twenty clients of the
Company accounted for approximately 47% of such income. Based on
income from commissions and fees, the three largest clients of the
Company are General Motors Corporation, Unilever and The Coca-Cola
Company. General Motors Corporation first became a client of one
of the Company's agencies in 1916 in the United States.
Predecessors of several of the Lintas agencies have supplied
advertising services to Unilever since 1893. Interpublic acquired
SSC&B, Inc. (now Lintas, Inc.) and its minority interest in the
Lintas agencies (49% in most cases) in September 1979. It
acquired the balance of the ownership of the Lintas agencies (51%
in most cases) in 1982. The client relationship with The Coca-
Cola Company began in 1942 in Brazil and in 1955 in the United
States. While the loss of the entire business of one of the
Company's three largest clients might have a material adverse
effect upon the business of the Company, the Company believes that
it is very unlikely that the entire business of any of these
clients would be lost at the same time, because it represents
several different brands or divisions of each of these clients in
a number of geographical markets - often through more than one of
the Company's agency systems.
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Representation of a client rarely means that the Company
handles advertising for all brands or product lines of the client
in all geographical locations. Any client may transfer its
business from an advertising agency within the Company to a
competing agency, and a client may reduce its advertising budget
at any time. The Company's advertising agencies in many instances
have written contracts with their clients.
As is customary in the industry, these contracts provide for
termination by either party on relatively short notice, usually 90
days but sometimes shorter or longer. In 1993, however, 43% of
income from commissions and fees was derived from clients that had
been associated with one or more of the Company's agencies or
their predecessors for 20 or more years.
Personnel
As of January 1, 1994, the Company employed approximately
17,600 persons, of whom approximately 4,500 were employed in the
United States. Because of the personal service character of the
marketing communications business, the quality of personnel is of
crucial importance to continuing success. There is keen
competition for qualified employees. Interpublic considers its
employee relations to be satisfactory.
The Company has an active program for training personnel. The
program includes meetings and seminars throughout the world. It
also involves training personnel in its offices in New York and in
its larger offices worldwide.
Competition and Other Factors
The advertising agency and other marketing communications
businesses are highly competitive. The Company's agencies must
compete with other agencies, both large and small, and also with
other providers of creative or media services which are not
themselves advertising agencies, in order to maintain existing
client relationships and to obtain new clients. Competition in
the advertising agency business depends to a large extent on the
client's perception of the quality of an agency's "creative
product." An agency's ability to serve clients, particularly
large international clients, on a broad geographic basis is also
an important competitive consideration.
Increasing size brings limitations to an agency's potential for
securing new business, because many clients prefer not to be
represented by an agency that represents a competitor. Moreover,
clients frequently wish to have different products represented by
different agencies. The fact that the Company owns three separate
worldwide agency systems and interests in other advertising
agencies gives it additional competitive opportunities.
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The advertising business is subject to government regulation,
both domestic and foreign. There has been an increasing tendency
in the United States on the part of advertisers to resort to the
courts to challenge comparative advertising on the grounds that
the advertising is false and deceptive. Through the years, there
has been a continuing expansion of specific rules, prohibitions,
media restrictions, labeling disclosures and warning requirements
with respect to the advertising for certain products.
Representatives within state governments and the federal
government as well as foreign governments continue to initiate
proposals to ban the advertising of specific products and to
impose taxes on or deny deductions for advertising which, if
successful, may have an adverse effect on advertising
expenditures.
Some countries are relaxing commercial restrictions as part of
their efforts to attract foreign investment. However, with
respect to other nations, the international operations of the
Company still remain exposed to certain risks which affect foreign
operations of all kinds, such as local legislation, monetary
devaluation, exchange control restrictions and unstable political
conditions. In addition, international advertising agencies are
from time to time exposed to the threat of forced divestment in
favor of local investors because they are considered an integral
factor in the communications process. A provision of the present
constitution in the Philippines is an example.
Item 2. Properties
Most of the advertising operations of the Company are carried
on in leased premises, and its physical property consists
primarily of leasehold improvements, furniture, fixtures and
equipment. These facilities are located in various cities in
which the Company does business throughout the world. However,
subsidiaries of the Company own office buildings in Louisville,
Kentucky; Warren, Michigan; Frankfurt, Germany; Sao Paulo, Brazil;
Lima, Peru; and Brussels, Belgium and own office condominiums in
Buenos Aires, Argentina; Bogota, Colombia; and Manila, the
Philippines. In England, subsidiaries of the Company own office
buildings in London, Manchester, Birmingham and Stoke-on-Trent.
The office building located in Warren, Michigan is held by
the Company subject to a mortgage which will terminate in April,
2000. The Company's ownership of the office building in Frankfurt
is subject to three mortgages which became effective on or about
February 1993. These mortgages terminate at different dates, with
the last to expire in February 2003. Reference is made to Note
14: Commitments and Contingent Liabilities of the Notes to the
Consolidated Financial Statements in the Company's Annual Report
to Stockholders for the year ended December 31, 1993, which Note
is hereby incorporated by reference.
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Item 3. Legal Proceedings
Two of the Company's advertising agencies, McCann-Erickson USA,
Inc. and Lintas, Inc., are defendants in an action commenced on
May 13, 1984 and currently being prosecuted by two plaintiffs in
the Circuit Court of Kanawha County, West Virginia, against
various manufacturers and distributors of tobacco products and
advertising agencies that promoted and advertised tobacco
products. In each of two counts, the plaintiffs seek $260,000,000
in compensatory and punitive damages against each defendant
advertising agency for alleged injuries claimed to have been
caused by the use of tobacco products advertised by them.
The Company's advertising agencies believe that they have
meritorious defenses to this action and are vigorously contesting
it. A motion to dismiss for lack of jurisdiction is pending.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
Executive Officers of the Registrant
There follows the information disclosed in accordance with Item
401 of Regulation S-K of the Securities and Exchange Commission
(the "Commission") as required by Item 10 of Form 10-K with
respect to executive officers of the Registrant.
Name Age Office
Philip H. Geier, Jr. <F1> 59 Chairman of the Board, President
and Chief Executive Officer
Eugene P. Beard <F1> 58 Executive Vice President-Finance
and Operations and Chief
Financial Officer
Robert L. James <F1> 57 Chairman of the Board and Chief
Executive Officer of McCann-
Erickson Worldwide
Frank B. Lowe <F1> 52 Chairman of The Lowe Group
Kenneth L. Robbins <F1> 58 Chairman of the Board and Chief
Executive Officer of Lintas
Worldwide
C. Kent Kroeber 55 Senior Vice President - Human
Resources
Christopher Rudge 56 Senior Vice President, General
Counsel and Secretary
<F1> Also a Director.
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Name Age Office
Thomas J. Volpe 58 Senior Vice President-Financial
Operations
Salvatore F. LaGreca <F2> 40 Vice President and Controller
Joseph M. Studley <F3> 41 Vice President and Controller
<F2> Through March 31, 1994.
<F3> Effective as of April 1, 1994.
There is no family relationship among any of the executive
officers.
The employment histories for the past five years of Messrs.
Geier, Beard, James, Lowe and Robbins are incorporated by
reference to the Proxy Statement for Interpublic's 1994 Annual
Meeting of Stockholders.
Mr. Kroeber joined Interpublic in January 1966 as Manager of
Compensation and Training. He was elected a Vice President in
1970 and Senior Vice President in May 1980.
Mr. Rudge has been associated with Interpublic since January 1,
1973, when he joined it as an Attorney in its Law Department. He
was elected Vice President and Assistant General Counsel on May
15, 1984 and was elected to the additional office of Assistant
Secretary on May 20, 1986. Effective January 1, 1989, he was
elected General Counsel and Secretary. On May 15, 1990, Mr. Rudge
was elected a Senior Vice President of Interpublic.
Mr. Volpe joined Interpublic on March 3, 1986. He was
appointed Senior Vice President-Financial Operations on March 18,
1986. He served as Treasurer from January 1, 1987 through May 17,
1988 and the Treasurer's office continues to report to him. He
was Vice President and Treasurer of Colgate-Palmolive Company from
February 1981 to February 1986 and Assistant Corporate Controller
prior thereto.
Mr. LaGreca, a partner in the independent accounting firm of
KPMG Peat Marwick from 1986 until 1992, returned to Interpublic in
September 1992. While at KPMG Peat Marwick, he was the audit
partner in charge of the firm's advertising agency practice. In
that capacity, he supervised the technical accounting for, and
auditing of, financial statements of various advertising agency
clients. He was elected Vice President and Controller of
Interpublic on October 20, 1992. Mr. LaGreca, who began his
career with the Company as Assistant Treasurer of Lintas, Inc., a
subsidiary of Interpublic, remained in that position from 1981
through 1984. He was Assistant Controller of Interpublic from
1984 through 1986.
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Mr. Studley who has been elected as Vice President and
Controller of Interpublic effective as of April 1, 1994, has been
Senior Vice President and Chief Financial Officer of EC
Television, a division of Interpublic, since January 1, 1990. He
was a Vice President of Lintas New York, a division of one of
Interpublic's subsidiaries, from August 1, 1987 until December 31,
1989.
PART II
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters
The response to this Item is incorporated by reference to the
Registrant's Annual Report to Stockholders for the year ended
December 31, 1993. See Note 12: Results by Quarter (Unaudited),
of the Notes to the Consolidated Financial Statements and
information under the heading Transfer Agent and Registrar for
Common Stock.
Item 6. Selected Financial Data
The response to this Item is incorporated by reference to the
Registrant's Annual Report to Stockholders for the year ended
December 31, 1993 under the heading Selected Financial Data for
Five Years.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
The response to this Item is incorporated by reference to the
Registrant's Annual Report to Stockholders for the year ended
December 31, 1993 under the heading Management's Discussion and
Analysis of Financial Condition and Results of Operations.
Item 8. Financial Statements and Supplementary Data
The response to this Item is incorporated in part by reference
to the Registrant's Annual Report to Stockholders for the year
ended December 31, 1993 under the headings Financial Statements
and Notes to the Consolidated Financial Statements. Reference is
also made to the Financial Statement Schedules listed under Item
14(a) of this Report on Form 10-K.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
Not applicable.
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PART III
Item 10. Directors and Executive Officers of the Registrant
The information required by this Item is incorporated by
reference to the Registrant's Proxy Statement for its 1994 Annual
Meeting of Stockholders (the "Proxy Statement") to be filed not
later than 120 days after the end of the 1993 calendar year,
except for the description of Interpublic's Executive Officers
which appears in Part I of this Report on Form 10-K under the
heading Executive Officers of the Registrant.
Item 11. Executive Compensation
The information required by this Item is incorporated by
reference to the Proxy Statement. Such incorporation by reference
shall not be deemed to specifically incorporate by reference the
information referred to in Item 402(a)(8) of Regulation S-K.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
The information required by this Item is incorporated by
reference to the Proxy Statement.
Item 13. Certain Relationships and Related Transactions
The information required by this Item is incorporated by
reference to the Proxy Statement. Such incorporation by reference
shall not be deemed to specifically incorporate by reference the
information referred to in Item 402(a)(8) of Regulation S-K.
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PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K
(a) Listed below are all financial statements, financial
statement schedules and exhibits filed as part of this Report on
Form 10-K.
1. Financial Statements:
See the Index to Financial Statements on page F-1.
2. Financial Statement Schedules:
See the Index to Financial Statement Schedules on
page F-1.
3. Exhibits:
(Numbers used are the numbers assigned in Item 601 of
Regulation S-K and the EDGAR Filer Manual. An additional copy of
this exhibit index immediately precedes the exhibits filed with
this Report on Form 10-K and the exhibits transmitted to the
Commission as part of the electronic filing of the Report.)
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Exhibit No. Description
3 (i) The Restated Certificate of Incorporation of the
Registrant, as amended is incorporated by reference
to its Report on Form 10-K for the year ended
December 31, 1992. See Commission file number 1-
6686.
(ii) The By-Laws of the Registrant, amended as of February
19, 1991, are incorporated by reference to its Report
on Form 10-K for the year ended December 31, 1990.
See Commission file number 1-6686.
4 Instruments Defining the Rights of Security Holders.
Indenture, dated as of April 1, 1992, between Interpublic
and Morgan Guaranty Trust Company of New York is not
included as an Exhibit to this Report but will be
furnished to the Commission upon its request.
10 Material Contracts.
(a) Underwriting Agreement, dated March 30, 1992, by and
between Interpublic and Goldman Sachs International
Limited is incorporated by reference to Registrant's
Report on Form 10-K for the year ended December 31,
1992. See Commission file number 1-6686.
(b) Employment, Consultancy and other Compensatory
Arrangements with Management.
Employment and Consultancy Agreements and any
amendments or supplements thereto and other
compensatory arrangements filed with the Registrant's
Reports on Form 10-K for the years ended December 31,
1980 through December 31, 1992, inclusive, are
incorporated by reference in this Report on Form 10-
K. See Commission file number 1-6686. Listed below
are agreements or amendments to agreements between
the Registrant and its executive officers which
remain in effect on and after the date hereof or were
executed during the year ended December 31, 1993 and
thereafter, which are filed as exhibits to this
Report on Form 10-K.
(i) Eugene P. Beard
(a) Supplemental Agreement made as of January 5,
1994 to an Employment Agreement made as of
January 1, 1983.
(b) Supplemental Agreement made as of January 1,
1994 to an Employment Agreement made as of
January 1, 1983.
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(ii) Robert L. James
(a) Supplemental Agreement dated as of January 1,
1994 to an Employment Agreement made as of
January 1, 1991.
(b) Supplemental Agreement made as of July 21, 1992
to an Executive Severance Agreement made as of
July 21, 1987.
(iii) Frank B. Lowe
Supplemental Agreement dated as of January 1, 1994 to
an Employment Agreement dated as of January 1, 1991.
(iv) Salvatore F. LaGreca
Supplemental Agreement made as of March 1, 1994 to an
Employment Agreement made as of September 1, 1992.
(c) Executive Compensation Plans.
(i) Trust Agreement, dated as of June 1, 1990 between The
Interpublic Group of Companies, Inc., Lintas
Campbell-Ewald Company, McCann-Erickson USA, Inc.,
McCann-Erickson Marketing, Inc., Lintas, Inc. and
Manufacturers Hanover Trust Company, as Trustee, is
incorporated by reference to Registrant's Annual
Report on Form 10-K for the year ended December 31,
1990. See Commission file number 1-6686.
(ii) The Stock Option Plan (1988) and the Achievement
Stock Award Plan of the Registrant are incorporated
by reference to Appendices C and D of the Prospectus
dated May 4, 1989 forming part of its Registration
Statement on Form S-8 (No. 33-28143).
(iii) The Management Incentive Compensation Plan of the
Registrant is incorporated by reference to the
Appendix of the Prospectus dated March 21, 1988
forming part of its Registration Statement on Form S-
8 (No. 33-20291).
(iv) The 1986 Stock Incentive Plan of the Registrant.
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(v) The 1986 United Kingdom Stock Option Plan of the
Registrant is incorporated by reference to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1992. See Commission file number
1-6686.
(vi) The Employee Stock Purchase Plan (1985) of the
Registrant, as amended to date.
(vii) The Long-Term Performance Incentive Plan of the
Registrant is incorporated by reference to Appendix A
of the Prospectus dated December 12, 1988 forming
part of its Registration Statement on Form S-8 (No.
33-25555).
(viii) Resolution of the Board of Directors adopted on
February 16, 1993, amending the Long-Term Performance
Incentive Plan is incorporated by reference to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1992. See Commission file number
1-6686.
(ix) Resolution of the Board of Directors adopted on May
16, 1989 amending the Long-Term Performance Incentive
Plan is incorporated by reference to Registrant's
Report on Form 10-K for the year ended December 31,
1989. See Commission file number 1-6686.
(d) Loan Agreements.
(i) Amendment No. 2, dated as of October 5, 1993, between
Interpublic and Morgan Guaranty Trust Company of New
York ("Morgan") to a Credit Agreement, dated as of
September 30, 1992 and effective as of December 28,
1992, between Interpublic and Morgan.
(ii) Letter, dated November 1, 1993, between Interpublic
and Morgan.
(iii) Amendment No. 2, dated as of October 5, 1993, between
Interpublic and Chemical Bank ("Chemical") to a
Credit Agreement, dated as of September 30, 1992, and
effective as of December 23, 1992, between
Interpublic and Chemical.
(iv) Letter, dated September 14, 1993, between Interpublic
and Chemical.
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(v) Amendment No. 2, dated as of October 5, 1993, between
Interpublic and Citibank, N.A. ("Citibank") to a
Credit Agreement, dated as of September 30, 1992, and
effective as of December 22, 1992, between
Interpublic and Citibank.
(vi) Letter, dated October 8, 1993, between Interpublic
and Citibank.
(vii) Amendment No. 2, dated as of October 5, 1993, between
Interpublic and NBD Bank, N.A. ("NBD") to a Credit
Agreement, dated as of September 30, 1992, and
effective as of December 23, 1992, between
Interpublic and NBD.
(viii) Letter, dated October 25, 1993, between Interpublic
and NBD.
(ix) Amendment No. 3, dated as of October 5, 1993, between
Interpublic and NBD to a Term Loan Agreement, dated
as of March 14, 1991, between Interpublic and NBD.
(x) Letter, dated October 25, 1993, between Interpublic
and NBD.
(xi) Amendment No. 2, dated as of October 5, 1993, between
Interpublic and Trust Company Bank ("Trust") to a
Credit Agreement, dated as of September 30, 1992, and
effective as of December 30, 1992, between
Interpublic and Trust.
(xii) Letter, dated October 12, 1993, between Interpublic
and Trust.
(xiii) Amendment No. 4, dated as of October 5, 1993, between
Interpublic and Trust to a Credit Agreement, dated as
of March 14, 1991, between Interpublic and Trust.
(xiv) Letter, dated October 12, 1993, between Interpublic
and Trust.
(xv) Amendment No. 2, dated as of October 5, 1993, between
Interpublic and Union Bank of Switzerland ("UBS") to
a Credit Agreement, dated as of September 30, 1992,
and effective as of December 29, 1992, between
Interpublic and UBS.
(xvi) Letter, dated October 14, 1993, between Interpublic
and UBS.
- 17 -
PAGE
<PAGE>
(xvii) Amendment No. 2, dated as of October 5, 1993, between
Interpublic and The Fuji Bank, Limited ("Fuji") to a
Credit Agreement, dated as of September 30, 1992, and
effective as of December 16, 1992, between
Interpublic and Fuji.
(xviii) Letter, dated October 19, 1993, between Interpublic
and Fuji.
(xix) Amendment No. 2, dated as of October 5, 1993, between
Interpublic and The Bank of New York ("BONY") to a
Credit Agreement, dated as of September 30, 1992, and
effective as of December, 30, 1992, between
Interpublic and BONY.
(xx) Letter, dated August 23, 1993, between Interpublic
and BONY.
(xxi) Amendment No. 2, dated as of October 5, 1993, between
Interpublic and Swiss Bank Corporation ("SBC") to a
Credit Agreement, dated as of September 30, 1992, and
effective as of December 18, 1992, between
Interpublic and SBC.
(xxii) Letter, dated October 12, 1993, between Interpublic
and SBC.
(xxiii) Amendment No. 3, dated as of November 17, 1993, to a
Note Purchase Agreement, dated as of August 20, 1991,
by and among Interpublic, McCann-Erickson Advertising
of Canada Ltd. ("McCann Canada"), MacLaren Lintas
Inc. ("MacLaren Lintas"), The Prudential Insurance
Company of America ("Prudential") and Prudential
Property and Casualty Insurance Company ("Prudential
Property").
(xxiv) Letter, dated November 17, 1993, among Interpublic,
McCann Canada, MacLaren Lintas, Prudential and
Prudential Property.
(xxv) Supplemental Agreement made October 27, 1993, between
Lowe International Limited, Lowe Worldwide Holdings
B.V., Lowe & Partners Inc. and Lloyds Bank plc as
Agent ("Lloyds").
(xxvi) Amendment No. 3, dated as of October 27, 1993,
between Interpublic and Lloyds to a Guarantee, dated
December 17, 1991.
- 18 -
PAGE
<PAGE>
(xxvii) Other Loan and Guaranty Agreements filed with the
Registrant's Annual Report on Form 10-K for the years
ended December 31, 1988 and December 31, 1986 are
incorporated by reference in this Report on Form 10-
K. Other Credit Agreements, amendments to various
Credit Agreements, Termination Agreements, Loan
Agreements, a Note Purchase Agreement, dated August
20, 1991, Guarantee, dated December 17, 1991,
Notification dated March 14, 1991 by Registrant and
Intercreditor Agreements filed with the Registrant's
Report on Form 10-K for the years ended December 31,
1989 through December 31, 1992, inclusive and filed
with Registrant's Reports on Form 10-Q for the
periods ended March 31, 1993 and June 30, 1993 are
incorporated by reference into this Report on Form
10-K. See Commission file number 1-6686.
(e) Leases.
Material leases of premises are incorporated by
reference to the Registrant's Annual Report on Form
10-K for the years ended December 31, 1980 and
December 31, 1988. See Commission file number 1-
6686.
(f) Acquisition Agreement for Purchase of Real Estate.
(i) Acquisition Agreement (in German) between
Treuhandelsgesellschaft Aktiengesellschaft & Co.
Grundbesitz OHG and McCann-Erickson Deutschland GmbH
& Co. Management Property KG ("McCann-Erickson
Deutschland") and the English translation of the
Acquisition Agreement are incorporated by reference
to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1992. See Commission file
number 1-6686.
(g) Mortgage Agreements and Encumbrances.
(i) Summaries In German and English of Mortgage
Agreements between McCann-Erickson Deutschland and
Frankfurter Hypothekenbank Aktiengesellschaft
("Frankfurter Hypothekenbank"), Mortgage Agreement,
dated January 22, 1993, between McCann-Erickson
Deutschland and Frankfurter Hypothekenbank, Mortgage
Agreement, dated January 22, 1993, between McCann-
Erickson Deutschland and Hypothekenbank, Summaries In
German and English of Mortgage Agreement, between
McCann-Erickson Deutschland and Frankfurter Sparkasse
and Mortgage Agreement, dated January 7, 1993,
between McCann-Erickson Deutschland and Frankfurter
Sparkasse are incorporated by reference to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1992. See Commission file number
1-6686.
- 19 -
PAGE
<PAGE>
(ii) Summaries In German and English of Documents Creating
Encumbrances In Favor of Frankfurter Hypothekenbank
and Frankfurter Sparkasse In Connection With the
Aforementioned Mortgage Agreements, Encumbrance,
dated January 15, 1993, In Favor Of Frankfurter
Hypothekenbank, and Encumbrance, dated January 15,
1993, In Favor of Frankfurter Sparkasse are
incorporated by reference to Registrant's Annual
Report on Form 10-K for the year ended December 31,
1992. See Commission file number 1-6686.
(iii) Loan Agreement (in English and German), dated January
29, 1993 between Lintas Deutschland GmbH and McCann-
Erickson Deutschland is incorporated by reference to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1992. See Commission file number
1-6686.
11 Computation of Earnings Per Share.
13 This Exhibit includes: (a) those portions of the Annual
Report to Stockholders for the year ended December 31,
1993 which are included therein under the following
headings: Financial Highlights; Management's Discussion
and Analysis of Financial Condition and Results Of
Operations; Consolidated Balance Sheet; Consolidated
Statement of Income; Consolidated Statement of Cash Flows;
Consolidated Statement of Stockholders' Equity; Notes to
Consolidated Financial Statements (the aforementioned
consolidated financial statements together with the Notes
to Consolidated Financial Statements hereinafter shall be
referred to collectively as the "Consolidated Financial
Statements"); Report of Independent Accountants; Selected
Financial Data For Five Years; Report of Management; and
Stockholders' Information; and (b) Appendix to Exhibit 13.
21 Subsidiaries of the Registrant.
23 Consent of Independent Accountants.
24 Power of Attorney to sign Form 10-K and resolution of
Board of Directors re Power of Attorney.
- 20 -
PAGE
<PAGE>
29 (a) Supplemental Agreements filed with Registrant's
Annual Report on Form 10-K for the year ended
December 31, 1990 are incorporated by reference into
this Report on Form 10-K. See Commission file number
1-6686.
(b) The Preferred Share Purchase Rights Plan as adopted
on July 18, 1989 is incorporated by reference to
Registrant's Registration Statement on Form 8-A dated
August 1, 1989 (No. 00017904) and, as amended, by
reference to Registrant's Registration Statement on
Form 8 dated October 3, 1989 (No. 00106686).
b) No reports on Form 8-K were filed during the quarter ended
December 31, 1993.
- 21 -
PAGE
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report
to be signed on its behalf by the undersigned, thereunto duly
authorized.
THE INTERPUBLIC GROUP OF COMPANIES, INC.
(Registrant)
March 30, 1994 BY: Philip H. Geier, Jr.
Philip H. Geier, Jr.,
Chairman of the Board,
President and Chief
Executive Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this Report has been signed below by the following persons
on behalf of the Registrant and in the capacities and on the dates
indicated.
Name Title Date
Chairman of the Board, March 30, 1994
President and Chief Executive
Philip H. Geier, Jr. Officer (Principal Executive
Philip H. Geier, Jr. Officer) and Director
Executive Vice President March 30, 1994
-Finance and Operations
Eugene P. Beard (Principal Financial
Eugene P. Beard Officer) and Director
Vice President and March 30, 1994
Salvatore F. LaGreca Controller (Principal
Salvatore F. LaGreca Accounting Officer)
*Robert L. James Director March 30, 1994
Robert L. James
*Frank B. Lowe Director March 30, 1994
Frank B. Lowe
- 22 -
PAGE
<PAGE>
*Kenneth L. Robbins Director March 30, 1994
Kenneth L. Robbins
*Leif H. Olsen Director March 30, 1994
Leif H. Olsen
*J. Phillip Samper Director March 30, 1994
J. Phillip Samper
*Joseph J. Sisco Director March 30, 1994
Joseph J. Sisco
*Frank Stanton Director March 30, 1994
Frank Stanton
*Jacqueline G. Wexler Director March 30, 1994
Jacqueline G. Wexler
*By Philip H. Geier, Jr.
Philip H. Geier, Jr.
Attorney-in-fact
- 23 -
PAGE
<PAGE>
INDEX TO FINANCIAL STATEMENTS
The Financial Highlights, Management's Discussion and Analysis of
Financial Condition and Results of Operations, Consolidated
Financial Statements, Selected Financial Data for Five Years,
Report of Management appearing in the accompanying Annual Report
to Stockholders for the year ended December 31, 1993, together
with the report thereon of Price Waterhouse dated February 9, 1994
thereof, are incorporated by reference in this report on Form 10-
K. With the exception of the aforementioned information and the
information incorporated in Items 5, 6, 7 and 8, no other data
appearing in the Annual Report to Stockholders for the year ended
December 31, 1993 is deemed to be filed as part of this report on
Form 10-K.
The following financial statement schedules should be read in
conjunction with the financial statements in such Annual Report to
Stockholders for the year ended December 31, 1993. Financial
statement schedules not included in this report on Form 10-K have
been omitted because they are not applicable or the required
information is shown in the financial statements or the notes
thereto.
Separate financial statements for the companies which are 50% or
less owned and accounted for by the equity method have been
omitted because, considered in the aggregate as a single
subsidiary, they do not constitute a significant subsidiary.
INDEX TO FINANCIAL STATEMENT SCHEDULES
Page
Report of Independent Accountants on
Financial Statement Schedules F-2
Consent of Independent Accountants F-2
Financial Statement Schedules Required to be Filed by Item 8 of
this form:
II Amounts Receivable from Related Parties and
Underwriters, Promoters, and Employees Other
than Related Parties F-3
VIII Valuation and Qualifying Accounts F-4
IX Short-Term Borrowings F-5
X Supplementary Income Statement Information F-6
F-1
PAGE
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULES
To the Board of Directors of
The Interpublic Group of Companies, Inc.
Our audits of the consolidated financial statements referred to in
our report dated February 9, 1994 appearing in the 1993 Annual
Report to Stockholders of The Interpublic Group of Companies, Inc.
(which report and consolidated financial statements are
incorporated by reference in this Annual Report on Form 10-K) also
included an audit of the Financial Statement Schedules listed in
Item 14 (a) of this Form 10-K. In our opinion, these Financial
Statement Schedules present fairly, in all material respects, the
information set forth therein when read in conjunction with the
related consolidated financial statements.
PRICE WATERHOUSE
New York, New York
February 9, 1994
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Registration Statements on Form S-8 of The Interpublic Group of
Companies, Inc. (the "Company"), of our report dated February 9,
1994, appearing in the 1993 Annual Report to Stockholders which is
incorporated in this Annual Report on Form 10-K: Registration
Statements No. 2-79071; No. 2-43811; No. 2-56269; No. 2-61346; No.
2-64338; No. 2-67560; No. 2-72093; No. 2-88165; No. 2-90878, No.
2-97440 and No. 33-28143, relating variously to the Stock Option
Plan (1971), the Stock Option Plan (1981), the Stock Option Plan
(1988) and the Achievement Stock Award Plan of the Company;
Registration Statements No. 2-53544; No. 2-91564, No. 2-98324, No.
33-22008 and No. 33-64062, relating variously to the Employee
Stock Purchase Plan (1975) and the Employee Stock Purchase Plan
(1985) of the Company; Registration Statements No. 33-20291 and
No. 33-2830 relating to the Management Incentive Compensation Plan
of the Company; Registration Statement No. 33-5352 and No. 33-
21605 relating to the 1986 Stock Incentive Plan and 1986 United
Kingdom Stock Option Plan of the Company; and Registration
Statement No. 33-10087 and No. 33-25555 relating to the Long-Term
Performance Incentive Plan of the Company. We also consent to the
incorporation by reference in the Prospectus constituting part of
the Registration Statement on Form S-3 (No. 33-37346) of our
report dated February 9, 1994, appearing in the 1993 Annual Report
to Stockholders which is incorporated in this Annual Report on
Form 10-K. We also consent to the incorporation by reference of
our report on the Financial Statement Schedules, which appears
above.
PRICE WATERHOUSE
New York, New York
March 25, 1994
F-2
PAGE
<PAGE>
SCHEDULE II
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
AMOUNTS RECEIVABLE FROM RELATED PARTIES AND UNDERWRITERS,
PROMOTERS, AND EMPLOYEES OTHER THAN RELATED PARTIES.
For the Years Ended December 31, 1993, 1992 and 1991
(Dollars in Thousands)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
Balance at Deductions - Balance
Beginning Amounts at End
Name of Debtor of Period Additions Collected Other<F1> of Period
1993:
A. Gomes $ 137 $ -0- $ (45) $(24) $ 68<F2>
G. Bowen $ 300 $ -0- $(300) $-0- $-0-
1992:
A. Gomes $ -0- $ 137 $ -0- $-0- $137
G. Bowen $ -0- $ 300 $ -0- $-0- $300
1991:
T. Goodgoll $ -0- $ 159 $(159) $-0- $-0-
<F1> Effect of currency translation.
<F2> Loan is due December 31, 1994 and interest is charged at the
prevailing market rate.
F-3
PAGE
<PAGE>
SCHEDULE VIII
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
For the Years Ended December 31, 1993, 1992 and 1991
(Dollars in Thousands)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
Additions
(1) (2)
Charged Charged
to to other
Balance costs & accounts- Deductions- Balance
Description January 1 expenses describe describe December
31
Allowance for
Doubtful Accounts -
deducted from
Receivables in the
Consolidated
Balance Sheet:
1993 $15,559 $5,600 $ 764<F3> $3,823<F5>
$16,834
$ 898<F6> $2,360<F4>
$ 196<F7>
1992 $18,553 $4,320 $ 449<F7> $5,497<F5>
$15,559
$2,266<F4>
1991 $18,815 $3,434 $ 447<F3> $4,143<F5>
$18,553
Notes:
<F3> Allowance for doubtful accounts of acquired and newly
consolidated companies, net of divestitures.
<F4> Foreign currency translation adjustment.
<F5> Principally amounts written off.
<F6> Reversal of previously written off accounts.
<F7> Miscellaneous.
F-4
PAGE
<PAGE>
<TABLE> SCHEDULE IX
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
SHORT-TERM BORROWINGS
For the Years Ended December 31, 1993, 1992 and 1991
(Dollars in Thousands)
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
At End of Period
Weighted
Maximum Average average
Category of Balance Weighted amount amount interest
aggregate at end average outstanding outstanding rate
short-term of interest during the during the during the
borrowings period<F8> rate period period<F9> period<F9>
<S> <C> <C> <C> <C> <C>
Payable to Banks:
1993: $130,457 6.6% $130,457 $110,972 7.2 %
1992: $ 80,617 9.7% $159,648 $120,482 7.4%
1991 $151,781 10.4% $198,450 $167,963 9.4%
<FN>
<F8> Generally are lines of credit and overdraft facilities bearing interest at prevailing rates.
Does not include interest on short or long-term borrowings, or current portion of long-term
borrowings.
<F9> Computed principally on the basis of average quarterly amounts.
F-5
</TABLE>
PAGE
<PAGE>
SCHEDULE X
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
SUPPLEMENTARY INCOME STATEMENT INFORMATION
For the Years Ended December 31, 1993, 1992 and 1991
(Dollars in Thousands)
COLUMN A COLUMN B
Item Charged to Costs and Expenses
1993 1992 1991
Maintenance and repairs $20,127 $22,196 $19,582
Amortization of
Intangible Assets $18,730 $19,573 $17,004
Taxes Other Than Payroll
and Income Taxes $16,561 $18,519 $13,099
F-6
PAGE
<PAGE>
INDEX TO DOCUMENTS
Exhibit No. Description
3 (i) The Restated Certificate of Incorporation of the
Registrant, as amended is incorporated by reference to its
Report on Form 10-K for the year ended December 31, 1992.
See Commission file number 1-6686.
(ii) The By-Laws of the Registrant, amended as of February 19,
1991, are incorporated by reference to its Report on Form
10-K for the year ended December 31, 1990. See Commission
file number 1-6686.
4 Instruments Defining the Rights of Security Holders.
Indenture, dated as of April 1, 1992, between Interpublic
and Morgan Guaranty Trust Company of New York is not
included as an Exhibit to this Report but will be furnished
to the Commission upon its request.
10 Material Contracts.
(a) Underwriting Agreement, dated March 30, 1992, by and
between Interpublic and Goldman Sachs International Limited
is incorporated by reference to Registrant's Report on Form
10-K for the year ended December 31, 1992. See Commission
file number 1-6686.
(b) Employment, Consultancy and other Compensatory Arrangements
with Management.
Employment and Consultancy Agreements and any amendments or
supplements thereto and other compensatory arrangements
filed with the Registrant's Reports on Form 10-K for the
years ended December 31, 1980 through December 31, 1992,
inclusive, are incorporated by reference in this Report on
Form 10-K. See Commission file number 1-6686. Listed
below are agreements or amendments to agreements between
the Registrant and its executive officers which remain in
effect on and after the date hereof or were executed during
the year ended December 31, 1993 and thereafter, which are
filed as exhibits to this Report on Form 10-K.
INDEX - 1
PAGE
<PAGE>
(i) Eugene P. Beard
(a) Supplemental Agreement made as of January
5, 1994 to an Employment Agreement made
as of January 1, 1983.
(b) Supplemental Agreement made as of January
1, 1994 to an Employment Agreement made
as of January 1, 1983.
(ii) Robert L. James
(a) Supplemental Agreement dated as of
January 1, 1994 to an Employment
Agreement made as of January 1, 1991.
(b) Supplemental Agreement made as of July
21, 1992 to an Executive Severance
Agreement made as of July 21, 1987.
(iii) Frank B. Lowe
Supplemental Agreement dated as of January 1,
1994 to an Employment Agreement dated as of
January 1, 1991.
(iv) Salvatore F. LaGreca
Supplemental Agreement made as of March 1,
1994 to an Employment Agreement made as of
September 1, 1992.
(c) Executive Compensation Plans.
(i) Trust Agreement, dated as of June 1, 1990
between The Interpublic Group of Companies,
Inc., Lintas Campbell-Ewald Company, McCann-
Erickson USA, Inc., McCann-Erickson Marketing,
Inc., Lintas, Inc. and Manufacturers Hanover
Trust Company, as Trustee, is incorporated by
reference to Registrant's Annual Report on
Form 10-K for the year ended December 31,
1990. See Commission file number 1-6686.
(ii) The Stock Option Plan (1988) and the
Achievement Stock Award Plan of the Registrant
are incorporated by reference to Appendices C
and D of the Prospectus dated May 4, 1989
forming part of its Registration Statement on
Form S-8 (No. 33-28143).
(iii) The Management Incentive Compensation Plan of
the Registrant is incorporated by reference to
the Appendix of the Prospectus dated March 21,
1988 forming part of its Registration
Statement on Form S-8 (No. 33-20291).
INDEX - 2
PAGE
<PAGE>
(iv) The 1986 Stock Incentive Plan of the
Registrant.
(v) The 1986 United Kingdom Stock Option Plan of
the Registrant is incorporated by reference to
Registrant's Annual Report on Form 10-K for
the year ended December 31, 1992. See
Commission file number 1-6686.
(vi) The Employee Stock Purchase Plan (1985) of the
Registrant, as amended to date.
(vii) The Long-Term Performance Incentive Plan of
the Registrant is incorporated by reference to
Appendix A of the Prospectus dated December
12, 1988 forming part of its Registration
Statement on Form S-8 (No. 33-25555).
(viii) Resolution of the Board of Directors adopted
on February 16, 1993, amending the Long-Term
Performance Incentive Plan is incorporated by
reference to Registrant's Annual Report on
Form 10-K for the year ended December 31,
1992. See Commission file number 1-6686.
(ix) Resolution of the Board of Directors adopted
on May 16, 1989 amending the Long-Term
Performance Incentive Plan is incorporated by
reference to Registrant's Report on Form 10-K
for the year ended December 31, 1989. See
Commission file number 1-6686.
(d) Loan Agreements.
(i) Amendment No. 2, dated as of October 5, 1993,
between Interpublic and Morgan Guaranty Trust
Company of New York ("Morgan") to a Credit
Agreement, dated as of September 30, 1992 and
effective as of December 28, 1992, between
Interpublic and Morgan.
INDEX - 3
PAGE
<PAGE>
(ii) Letter, dated November 1, 1993, between
Interpublic and Morgan.
(iii) Amendment No. 2, dated as of October 5, 1993,
between Interpublic and Chemical Bank
("Chemical") to a Credit Agreement, dated as
of September 30, 1992, and effective as of
December 23, 1992, between Interpublic and
Chemical.
(iv) Letter, dated September 14, 1993, between
Interpublic and Chemical.
(v) Amendment No. 2, dated as of October 5, 1993,
between Interpublic and Citibank, N.A.
("Citibank") to a Credit Agreement, dated as
of September 30, 1992, and effective as of
December 22, 1992, between Interpublic and
Citibank.
(vi) Letter, dated October 8, 1993, between
Interpublic and Citibank.
(vii) Amendment No. 2, dated as of October 5, 1993,
between Interpublic and NBD Bank, N.A. ("NBD")
to a Credit Agreement, dated as of September
30, 1992, and effective as of December 23,
1992, between Interpublic and NBD.
(viii) Letter, dated October 25, 1993, between
Interpublic and NBD.
(ix) Amendment No. 3, dated as of October 5, 1993,
between Interpublic and NBD to a Term Loan
Agreement, dated as of March 14, 1991, between
Interpublic and NBD.
(x) Letter, dated October 25, 1993, between
Interpublic and NBD.
(xi) Amendment No. 2, dated as of October 5, 1993,
between Interpublic and Trust Company Bank
("Trust") to a Credit Agreement, dated as of
September 30, 1992, and effective as of
December 30, 1992, between Interpublic and
Trust.
(xii) Letter, dated October 12, 1993, between
Interpublic and Trust.
(xiii) Amendment No. 4, dated as of October 5, 1993,
between Interpublic and Trust to a Credit
Agreement, dated as of March 14, 1991, between
Interpublic and Trust.
(xiv) Letter, dated October 12, 1993, between
Interpublic and Trust.
INDEX - 4
PAGE
<PAGE>
(xv) Amendment No. 2, dated as of October 5, 1993,
between Interpublic and Union Bank of
Switzerland ("UBS") to a Credit Agreement,
dated as of September 30, 1992, and effective
as of December 29, 1992, between Interpublic
and UBS.
(xvi) Letter, dated October 14, 1993, between
Interpublic and UBS.
(xvii) Amendment No. 2, dated as of October 5, 1993,
between Interpublic and The Fuji Bank, Limited
("Fuji") to a Credit Agreement, dated as of
September 30, 1992, and effective as of
December 16, 1992, between Interpublic and
Fuji.
(xviii) Letter, dated October 19, 1993, between
Interpublic and Fuji.
(xix) Amendment No. 2, dated as of October 5, 1993,
between Interpublic and The Bank of New York
("BONY") to a Credit Agreement, dated as of
September 30, 1992, and effective as of
December, 30, 1992, between Interpublic and
BONY.
(xx) Letter, dated August 23, 1993, between
Interpublic and BONY.
(xxi) Amendment No. 2, dated as of October 5, 1993,
between Interpublic and Swiss Bank Corporation
("SBC") to a Credit Agreement, dated as of
September 30, 1992, and effective as of
December 18, 1992, between Interpublic and
SBC.
(xxii) Letter, dated October 12, 1993, between
Interpublic and SBC.
(xxiii) Amendment No. 3, dated as of November 17,
1993, to a Note Purchase Agreement, dated as
of August 20, 1991, by and among Interpublic,
McCann-Erickson Advertising of Canada Ltd.
("McCann Canada"), MacLaren Lintas Inc.
("MacLaren Lintas"), The Prudential Insurance
Company of America ("Prudential") and
Prudential Property and Casualty Insurance
Company ("Prudential Property").
(xxiv) Letter, dated November 17, 1993, among
Interpublic, McCann Canada, MacLaren Lintas,
Prudential and Prudential Property.
INDEX - 5
PAGE
<PAGE>
(xxv) Supplemental Agreement made October 27, 1993,
between Lowe International Limited, Lowe
Worldwide Holdings B.V., Lowe & Partners Inc.
and Lloyds Bank plc as Agent ("Lloyds").
(xxvi) Amendment No. 3, dated as of October 27, 1993,
between Interpublic and Lloyds to a Guarantee,
dated December 17, 1991.
(xxvii) Other Loan and Guaranty Agreements filed with
the Registrant's Annual Report on Form 10-K
for the years ended December 31, 1988 and
December 31, 1986 are incorporated by
reference in this Report on Form 10-K. Other
Credit Agreements, amendments to various
Credit Agreements, Termination Agreements,
Loan Agreements, a Note Purchase Agreement,
dated August 20, 1991, Guarantee, dated
December 17, 1991, Notification dated March
14, 1991 by Registrant and Intercreditor
Agreements filed with the Registrant's Report
on Form 10-K for the years ended December 31,
1989 through December 31, 1992, inclusive and
filed with Registrant's Reports on Form 10-Q
for the periods ended March 31, 1993 and June
30, 1993 are incorporated by reference into
this Report on Form 10-K. See Commission file
number 1-6686.
(e) Leases.
Material leases of premises are incorporated
by reference to the Registrant's Annual Report
on Form 10-K for the years ended December 31,
1980 and December 31, 1988. See Commission
file number 1-6686.
(f) Acquisition Agreement for Purchase of Real Estate.
(i) Acquisition Agreement (in German) between
Treuhandelsgesellschaft Aktiengesellschaft &
Co. Grundbesitz OHG and McCann-Erickson
Deutschland GmbH & Co. Management Property KG
("McCann-Erickson Deutschland") and the
English translation of the Acquisition
Agreement are incorporated by reference to
Registrant's Annual Report on Form 10-K for
the year ended December 31, 1992. See
Commission file number 1-6686.
INDEX - 6
PAGE
<PAGE>
(g) Mortgage Agreements and Encumbrances.
(i) Summaries In German and English of Mortgage
Agreements between McCann-Erickson Deutschland
and Frankfurter Hypothekenbank
Aktiengesellschaft ("Frankfurter
Hypothekenbank"), Mortgage Agreement, dated
January 22, 1993, between McCann-Erickson
Deutschland and Frankfurter Hypothekenbank,
Mortgage Agreement, dated January 22, 1993,
between McCann-Erickson Deutschland and
Hypothekenbank, Summaries In German and
English of Mortgage Agreement, between McCann-
Erickson Deutschland and Frankfurter Sparkasse
and Mortgage Agreement, dated January 7, 1993,
between McCann-Erickson Deutschland and
Frankfurter Sparkasse are incorporated by
reference to Registrant's Annual Report on
Form 10-K for the year ended December 31,
1992. See Commission file number 1-6686.
(ii) Summaries In German and English of Documents
Creating Encumbrances In Favor of Frankfurter
Hypothekenbank and Frankfurter Sparkasse In
Connection With the Aforementioned Mortgage
Agreements, Encumbrance, dated January 15,
1993, In Favor Of Frankfurter Hypothekenbank,
and Encumbrance, dated January 15, 1993, In
Favor of Frankfurter Sparkasse are
incorporated by reference to Registrant's
Annual Report on Form 10-K for the year ended
December 31, 1992. See Commission file number
1-6686.
(iii) Loan Agreement (in English and German), dated
January 29, 1993 between Lintas Deutschland
GmbH and McCann-Erickson Deutschland is
incorporated by reference to Registrant's
Annual Report on Form 10-K for the year ended
December 31, 1992. See Commission file number
1-6686.
11 Computation of Earnings Per Share.
INDEX - 7
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<PAGE>
13 This Exhibit includes: (a) those portions of the Annual Report
to Stockholders for the year ended December 31, 1993 which are
included therein under the following headings: Financial
Highlights; Management's Discussion and Analysis of Financial
Condition and Results Of Operations; Consolidated Balance Sheet;
Consolidated Statement of Income; Consolidated Statement of Cash
Flows; Consolidated Statement of Stockholders' Equity; Notes to
Consolidated Financial Statements (the aforementioned
consolidated financial statements together with the Notes to
Consolidated Financial Statements hereinafter shall be referred
to as the "Consolidated Financial Statements"); Report of
Independent Accountants; Selected Financial Data For Five Years;
Report of Management; and Stockholders' Information; and (b)
Appendix to Exhibit 13.
21 Subsidiaries of the Registrant.
23 Consent of Independent Accountants.
24 Power of Attorney to sign Form 10-K and resolution of Board of
Directors re Power of Attorney.
29 (a) Supplemental Agreements filed with Registrant's Annual
Report on Form 10-K for the year ended December 31, 1990
are incorporated by reference into this Report on Form 10-
K. See Commission file number 1-6686.
(b) The Preferred Share Purchase Rights Plan as adopted on July
18, 1989 is incorporated by reference to Registrant's
Registration Statement on Form 8-A dated August 1, 1989
(No. 00017904) and, as amended, by reference to
Registrant's Registration Statement on Form 8 dated October
3, 1989 (No. 00106686).
INDEX - 8
<PAGE>
SUPPLEMENTAL AGREEMENT
SUPPLEMENTAL AGREEMENT made as of January 5, 1994, by
and between THE INTERPUBLIC GROUP OF COMPANIES, INC., a
corporation of the State of Delaware (hereinafter referred to as
the "Corporation"), and EUGENE P. BEARD (hereinafter referred to
as "Executive"):
W I T N E S S E T H
WHEREAS, the Corporation and Executive are parties to
an Employment Agreement made as of January 1, 1983, as amended by
Supplemental Agreements dated as of February 19, 1985, September
24, 1985, March 1, 1986, January 4, 1988, January 1, 1990, May
15, 1990, March 1, 1991, October 1, 1991 and January 1, 1994
(hereinafter referred to collectively as the "Employment
Agreement"); and
WHEREAS, the Corporation and Executive desire to amend
the Employment Agreement;
NOW, THEREFORE, in consideration of the mutual promises
herein and in the Employment Agreement set forth, the parties
hereto, intending to be legally bound, agree as follows:
1. Section 3.04 of the Employment Agreement is hereby
deleted in its entirety effective January 5, 1994
and the following substituted therefor:
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"3.04 If Executive dies while employed by the
Corporation, while receiving payments hereunder, or while
receiving payments in accordance with the provisions of
subdivision (ii) of Section 4.01, any amount payable in
accordance with the provisions of Section 3.03 shall be paid to
his spouse or, if she predeceases him, to the Executor of the
Will or the Administrator of the Estate of Executive."
2. Except as hereinabove amended, the Employment
Agreement shall continue in full force and effect.
3. This Supplemental Agreement shall be governed by
the laws of the State of New York.
THE INTERPUBLIC GROUP OF COMPANIES, INC.
By C. KENT KROEBER
___________________________________
Eugene P. Beard
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<PAGE>
SUPPLEMENTAL AGREEMENT
SUPPLEMENTAL AGREEMENT made as of January 1, 1994, by
and between THE INTERPUBLIC GROUP OF COMPANIES, INC., a
corporation of the State of Delaware (hereinafter referred to as
the "Corporation"), and EUGENE P. BEARD (hereinafter referred to
as "Executive"):
W I T N E S S E T H
WHEREAS, the Corporation and Executive are parties to
an Employment Agreement made as of January 1, 1983, as amended by
Supplemental Agreements dated as of February 19, 1985, September
24, 1985, March 1, 1986, January 4, 1988, January 1, 1990, May
15, 1990, March 1, 1991 and October 1, 1991 (hereinafter
referred to collectively as the "Employment Agreement"); and
WHEREAS, the Corporation and Executive desire to amend
the Employment Agreement;
NOW, THEREFORE, in consideration of the mutual promises
herein and in the Employment Agreement set forth, the parties
hereto, intending to be legally bound, agree as follows:
1. Article III of the Employment Agreement is hereby
deleted in its entirety effective January 1, 1994
and the following substituted therefor:
"ARTICLE III
"Compensation
"3.01 The Corporation will compensate Executive for
the duties performed by him hereunder, including all services
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rendered as an officer or director of the Corporation, by payment
of a salary at the rate of $275,000 per annum, payable in equal
installments, which the Corporation may pay at either monthly or
semi-monthly intervals, and by payment of the additional
compensation specified in Section 3.02.
"3.02 Subject to the provisions of the second sentence
of this Section 3.02, the Corporation will further compensate
Executive for the duties specified in Section 2.01 by payment, at
the times and in the manner specified in Section 3.03, of a sum
("Deferred Compensation") computed at the rate of $300,000 per
annum for each full year and a proportionate amount for any part
year during which Executive actually performs such duties (as
well as for any period during which Executive is receiving
payments pursuant to subdivision (ii) of Section 4.01). Payment
of Deferred Compensation shall be contingent on full performance
by Executive of all his obligations under Articles I, II and IV.
"3.03 The aggregate compensation payable under Section
3.02 shall be paid in 60 equal monthly installments commencing
with the month following the month in which Executive's
employment terminates for any reason, except that sums
equivalent to interest credited during such period of 60 months
shall be paid with the installment or installments payable after
the date of such crediting.
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<PAGE>
"3.04 If Executive dies while employed by the
Corporation or while receiving payments in accordance with the
provisions of subdivision (ii) of Section 4.01, any amount
payable in accordance with the provisions of Section 3.03 shall
be paid to the Executor of the Will or the Administrator of the
Estate of Executive.
"3.05 It is understood that none of the payments made
in accordance with Sections 3.02 and 3.03 shall be considered for
purposes of determining benefits under the Interpublic Retirement
Account Plan (formerly, the Interpublic Pension Plan).
"3.06 The Corporation may at any time increase the
compensation paid to Executive hereunder if the Corporation in
its discretion shall deem it advisable so to do in order to
compensate him fairly for services rendered to the Corporation."
2. Except as hereinabove amended, the Employment
Agreement shall continue in full force and effect.
3. This Supplemental Agreement shall be governed by
the laws of the State of New York.
THE INTERPUBLIC GROUP OF COMPANIES, INC.
By C. KENT KROEBER
___________________________________
Eugene P. Beard
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SUPPLEMENTAL AGREEMENT
SUPPLEMENTAL AGREEMENT dated as of January 1, 1994, by
and between THE INTERPUBLIC GROUP OF COMPANIES, INC., a
corporation of the State of Delaware (hereinafter referred to as
the "Corporation"), and ROBERT L. JAMES (hereinafter referred to
as "Executive").
W I T N E S S E T H
WHEREAS, the Corporation and Executive are parties to
an Employment Agreement made as of January 1, 1991 and a
Supplemental Agreement made as of July 1, 1991 (hereinafter
referred to collectively as the "Employment Agreement"); and
WHEREAS, the Corporation and Executive desire to amend
the Employment Agreement;
NOW, THEREFORE, in consideration of the mutual
promisesherein and in the Employment Agreement set forth, the
parties hereto, intending to be legally bound, agree as follows:
l. Paragraph 3.01 of the Employment Agreement is
amended, effective January 1, 1994, so as to
delete "$635,000" and to substitute "$700,000"
therefor.
2. Except as hereinabove amended, the Employment
Agreement shall continue in full force and effect.
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<PAGE>
3. This Supplemental Agreement shall be governed by
the laws of the State of New York.
THE INTERPUBLIC GROUP OF COMPANIES, INC.
By______________________________________
C. Kent Kroeber
________________________________________
Robert L. James
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SUPPLEMENTAL AGREEMENT
SUPPLEMENTAL AGREEMENT made as of July 21, 1992, by and between
THE INTERPUBLIC GROUP OF COMPANIES, INC., a corporation of the
State of Delaware (hereinafter referred to as the "Corporation"),
and ROBERT L. JAMES (hereinafter referred to as "Executive"):
W I T N E S S E T H
WHEREAS, the Corporation and Executive are parties to an
Executive Severance Agreement made as of July 21, 1987
(hereinafter referred to as the "Agreement"); and
WHEREAS, the Corporation and Executive desire to amend the
Employment Agreement;
NOW, THEREFORE, in consideration of the mutual promises herein
and in the Agreement set forth, the parties hereto, intending to
be legally bound, agree as follows:
1. Section 6.01 of the Agreement is hereby amended
effective July 21, 1992, so as to delete "five" and to
substitute therefor "ten".
2. Except as hereinabove amended, the Agreement shall
continue in full force and effect.
3. This Supplemental Agreement shall be governed by the
laws of the State of New York.
THE INTERPUBLIC GROUP OF COMPANIES, INC.
By C. KENT KROEBER
__________________________________
Robert L. James
<PAGE>
SUPPLEMENTAL AGREEMENT
SUPPLEMENTAL AGREEMENT dated as of January 1, 1994, by
and between THE INTERPUBLIC GROUP OF COMPANIES, INC., a
corporation of the State of Delaware (hereinafter referred to as
the "Corporation"), and FRANK B. LOWE (hereinafter referred to as
"Executive").
W I T N E S S E T H
WHEREAS, the Corporation and Executive are parties to
an Employment Agreement dated as of January 1, 1991 and a
Supplemental Agreement date as of January 28, 1991 (hereinafter
referred to collectively as the "Employment Agreement"); and
WHEREAS, the Corporation and Executive desire to amend
the Employment Agreement;
NOW, THEREFORE, in consideration of the mutual promises
herein and in the Employment Agreement set forth, the parties
hereto, intending to be legally bound, agree as follows:
1. Paragraph 3.01 of the Employment Agreement is
amended, effective January 1, 1994, so as to delete
"$560,000" and substitute "$660,000" therefor.
2. Except as hereinabove amended, the Employment
Agreement shall continue in full force and effect.
3. This Supplemental Agreement shall be governed by the
laws of the State of New York.
THE INTERPUBLIC GROUP OF COMPANIES, INC.
BY _______________________________
C. Kent Kroeber
___________________________________
Frank B. Lowe
<PAGE>
SUPPLEMENTAL AGREEMENT
SUPPLEMENTAL AGREEMENT made as of March 1, 1994 by and
between THE INTERPUBLIC GROUP OF COMPANIES, INC., a corporation
of the State of Delaware (hereinafter referred to as the
"Corporation"), and SALVATORE LAGRECA (hereinafter referred to as
"Executive").
W I T N E S S E T H:
WHEREAS, the Corporation and Executive are parties to
an Employment Agreement made as of September 1, 1992 (hereinafter
referred to as the "Employment Agreement"), and
WHEREAS, the Corporation and Executive desire to amend
the Employment Agreement;
NOW, THEREFORE, in consideration of the mutual promises
herein and in the Employment Agreement set forth, the parties
hereto, intending to be legally bound, agree as follows:
l. Section 3.01 of the Employment Agreement is hereby
amended, effective as of March 1, 1994, by deleting
"One Hundred Forty Thousand Dollars ($140,000) and
substituting "One Hundred Sixty Thousand Dollars
($160,000) therefor.
2. Except as hereinabove amended, the Employment
Agreement shall continue in full force and effect.
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<PAGE>
3. This Supplemental Agreement shall be governed by
the laws of the State of New York.
THE INTERPUBLIC GROUP OF COMPANIES, INC.
By C. KENT KROEBER
__________________________________
Salvatore LaGreca
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<PAGE>
THE INTERPUBLIC GROUP OF COMPANIES, INC.
1986 STOCK INCENTIVE PLAN
I. ESTABLISHMENT OF THE PLAN.
The Interpublic Group of Companies, Inc. (hereinafter called the
"Corporation") hereby establishes The Interpublic Group of
Companies, Inc. 1986 Stock Incentive Plan (hereinafter called the
"Plan"), subject to the terms and conditions hereinafter stated.
II. PURPOSES OF THE PLAN.
The purposes of the Plan are:
(1) to encourage stock ownership by key employees of the
Corporation and its Subsidiaries so that they will have a
proprietary interest in the Corporation;
(2) to provide an incentive for such employees to expand
and improve the growth and prosperity of the Corporation and
its Subsidiaries; and
(3) to assist the Corporation and its Subsidiaries in
attracting and retaining key employees.
III. DEFINITIONS.
Unless the context clearly indicates otherwise, the following
terms, when used in the Plan, shall have the meanings set forth in
this Article III. Wherever used in the Plan, words in the masculine
gender shall be deemed to refer to females as well as to males;
words in the singular number shall be deemed to refer also to the
plural number; and references to a statute or statutory provision
shall be construed as if they referred also to that provision (or to
a successor provision of similar import) as currently amended or
reenacted.
(a) "Award" means an Option or one or more Restricted Shares
granted under the Plan. Unless the context clearly indicates
otherwise, the term "Award" shall include both Options and
Restricted Shares.
(b) "Board" means the Board of Directors of the Corporation.
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(c) "Change of Control" means the occurrence of any of the
following events:
(i) any person (within the meaning of Sections 13(d) and
14(d) of the Securities Exchange Act of 1934 (the "1934 Act")),
other than the Corporation or any of its Subsidiaries, becomes
the beneficial owner (within the meaning of Rule 13d-3 under the
1934 Act) of 30% or more of the combined voting power of the
Corporation's then outstanding voting securities; or
(ii) a tender offer or exchange offer (other than an offer
by the Corporation), pursuant to which shares of the
Corporation's Common Stock were purchased, expires; or
(iii) the stockholders of the Corporation approve an
agreement to merge or consolidate with another corporation and
the surviving corporation is neither the Corporation nor a
corporation that was, prior to the merger or consolidation, a
subsidiary; or
(iv) the stockholders approve an agreement (including a
plan of liquidation) to sell or otherwise to dispose of all or
substantially all of the Corporation's assets; or
(v) during any period of two consecutive years,
individuals who, at the beginning of such period, constituted the
Board of Directors of the Corporation cease for any reason to
constitute at least a majority thereof, unless the election or
the nomination for the election by the Corporation's stockholders
of each new director was approved by a vote of at least two-
thirds of the directors then still in office who were directors
at the beginning of the period.
(d) "Committee" means the committee established by the Board
pursuant to Article IV hereof.
(e) "Common Stock" means shares of the Corporation's $.10 par
value common stock.
(f) "Corporation" means The Interpublic Group of Companies, Inc.
(g) "Disability" means a condition that, in the judgment of the
Committee, has rendered a Grantee completely and presumably
permanently unable to perform any and every duty of his regular
occupation.
(h) "Employee" means any common-law employee of the Corporation
or Subsidiary, including an employee who is a director or officer.
(i) "Grantee" means an individual to whom an Award is granted
under the Plan.
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(j) "Option" means a right granted to purchase Common Stock under
the Plan.
(k) "Plan" means The Interpublic Group of Companies, Inc. 1986
Stock Incentive Plan, as set forth herein and as amended from time
to time.
(l) "Restricted Shares" means shares of Common Stock granted
pursuant to Article IX hereof and subject to the restrictions and
other terms and conditions set forth in the Plan and in the
instrument evidencing the grant of the Restricted Shares.
(m) "Restriction Period" means a period beginning on the date on
which Restricted Shares are granted and ending at the expiration of
(i) four years from that date or (ii) any other date determined by
the Committee in its discretion that occurs no sooner than one year
from the date on which the Restricted Shares are granted. The
Committee may exercise its discretion pursuant to clause (ii) of the
preceding sentence from time to time, either before or after the
Restricted Shares are granted, and may exercise its discretion with
respect to one or more Grantees but not with respect to others and
with respect to certain Restricted Shares held by a Grantee but not
with respect to others; provided, that after the Restricted Shares
have been granted, the Committee may not defer the expiration of the
Restriction Period applicable to such Restricted Shares.
(n) "Retirement" means retirement from the Corporation or a
Subsidiary pursuant to the provisions of the Interpublic Pension
Plan or the Interpublic Retirement Account Plan (or, if applicable,
the provisions of a pension plan of a Subsidiary), as amended from
time to time.
(o) "Subsidiary" means a subsidiary of the Corporation that meets
the definition of a "subsidiary corporation" in Section 425(f) of
the Internal Revenue Code of 1954.
IV. ADMINISTRATION OF THE PLAN.
The Plan shall be administered by a committee (the "Committee")
of not less than three persons who shall be appointed by and shall
serve at the pleasure of the Board. No member of the Committee
shall be eligible to receive an Award under the Plan.
The Committee shall have and may exercise all of the powers
granted to it by the provisions of the Plan. Subject to the express
provisions and limitations of the Plan, the Committee may adopt such
rules, regulations, and procedures as it deems advisable for the
conduct of its affairs, and may appoint one of its members to be its
chairman and any person, whether or not a member, to be its
secretary or agent. The Committee shall have
full authority to direct the proper officers of the Corporation to
issue or transfer shares of the Corporation's Common Stock pursuant
to the exercise of an Option granted under the Plan or in connection
with the grant of Restricted Shares under the Plan.
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The Committee shall act by vote or written consent of a majority
of its members. The decisions of the Committee shall be final and
binding unless otherwise determined by the Board. Each member of
the Committee and each member of the Board shall be without
liability, to the fullest extent permitted by law, for any action
taken or determination made in good faith in connection with the
Plan.
V. CAPITAL STOCK SUBJECT TO AWARDS.
The aggregate number of shares of Common Stock that may be issued
pursuant to Awards granted under the Plan, or pursuant to options
granted under any stock option plan adopted by the Corporation for
the benefit of employees in the United Kingdom, shall not exceed
20,000,000, which number of shares is subject to adjustment as
hereinafter provided in Article XI. Shares of Common Stock issued
pursuant to Awards shall be provided from shares in the
Corporation's treasury or from shares authorized but unissued. If
an Option as to any shares (or an option granted under any stock
option plan adopted by the Corporation for the benefit of employees
in the United Kingdom) is surrendered before exercise, or expires or
terminates for any reason without having been exercised in full, or
for any other reason ceases to be exercisable, the number of
unpurchased shares covered thereby shall become available for the
granting of Awards under the Plan (unless the Plan has been
terminated) within the aggregate maximum stated above. Similarly,
if any shares of Common Stock are returned to the Corporation
pursuant to Paragraph B of Article IX or pursuant to restrictions
set forth in the instrument evidencing the grant of Restricted
Shares, such shares shall become available for the granting of
Awards under the Plan (unless the Plan has been terminated) within
the aggregate maximum stated above.
VI. ELIGIBILITY.
The individuals eligible to receive Awards shall be those
Employees who are not members of the Committee and who are
determined by the Committee to be key employees of the Corporation
and its Subsidiaries.
VII. DESIGNATION OF GRANTEES.
The Committee shall determine from time to time which of those
eligible Employees will be granted Awards under the Plan, how many
shares of Common Stock may be purchased under each Option, and how
many Restricted Shares may be granted pursuant to each grant of
Restricted Shares. In making such determinations, the Committee
shall take into account the duties and responsibilities of each
Employee, his present and potential contributions to the growth and
success of the Corporation or of a Subsidiary, and such other
factors as the Committee shall deem consistent with the purposes of
the Plan. The Committee shall not be precluded from granting an
Award to any eligible Employee solely because such Employee has
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previously received an Award under the Plan. With respect to
grants of Options to acquire 10,000 or less shares of Common Stock
of the Corporation, and with respect to awards of not more than
3,000 Restricted Shares or such lesser number of shares having a
value not in excess of $100,000 at the dat of the award, the
Corporation's Management Human Resources Committee may exercise the
powers of the Committee set forth in this Article in the first
paragraph of Paragraph D of Article VIII, and in the first sentence
only of Section (m) of Article III, provided that no Option may be
granted or Restricted Shares awarded by the Management Human
Resources Committee to an individual who is an officer or director
of the Corporation, and provided further that each member of the
Board who is a member of the Management Human Resources Committee
must concur in any such grant of Options or award of Restricted
Shares.
VIII. TERMS OF OPTIONS.
Each option granted under the Plan shall be subject to the
following terms and conditions:
A. Number of Shares and Option Price.
Each Option shall state the total number of shares of Common
Stock to which it pertains. The purchase price for shares subject
to the Option shall be eighty five percent (85%) of the fair market
value of the Common Stock of the Corporation at the time such Option
is granted, or such higher price as the Committee may establish for
any or all shares subject to any Option.
B. Duration of Option.
No Option shall be exercisable after the expiration of ten years
from the date on which it is granted, or of such shorter term as the
Committee may establish for any or all shares subject to such
Option. Except as provided in this Paragraph B, an Option shall
terminate on the date on which the Grantee ceases to be employed by
the Corporation or a Subsidiary.
If a Grantee ceases to be employed by the Corporation or a
Subsidiary owing to his Disability or Retirement, he may, at any
time within three years after his employment ceases, exercise any
Option to the extent that he was entitled to exercise it on the date
his employment ceased; but in no event shall any Option be
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exercisable after the expiration of the term of the Option esta-
blished in accordance with the first sentence of this Paragraph B.
If a Grantee dies while in the employ of the Corporation or a
Subsidiary (or if he dies within three years after he has ceased to
be employed by the Corporation or a Subsidiary owing to his
Disability or Retirement), and the Grantee has not fully exercised
all of his Options at the time of his death, his personal
representative, or those persons who receive the Options by bequest
or inheritance, shall have the right, during the one-year period
following his death, to exercise such Options. An Option shall be
exercisable during such one-year period only for that number of
shares, if any, that the Grantee could have purchased under such
Option on the date of his death. In no event shall any Option be
exercisable after the expiration of the term of the Option
established in accordance with the first sentence of this Paragraph
B.
If a Grantee ceases to be employed by the Corporation or a
Subsidiary owing to his Disability or Retirement, or if a Grantee
dies while in the employ of the Corporation or a Subsidiary, the
Committee may provide, on a case by case basis, for the exercise of
all or part of any Option held by the Grantee, whether or not he was
entitled to exercise it on the date that his employment ceased or
death occurred; provided, however, that no such determination shall
permit an Option to be exercised within one year following its
grant.
C. Nonassignability.
Options shall not be transferable other than by will or by the
laws of descent and distribution. During a Grantee's lifetime,
Options shall be exercisable only by such Grantee.
D. Limitations on Exercise of Options.
An Option may not be exercised in whole or in part during the
twelve-month period commencing with the date on which it was
granted; thereafter it shall become exercisable on such schedule as
is determined by the Committee at the time of the grant or as
otherwise provided by the Plan.
At the time an Option is granted or at any time thereafter, the
Committee may stipulate that the limitations set forth above in this
Paragraph D shall lapse with respect to such Option, and that such
Option shall be immediately exercisable, if a Change of Control
occurs.
To the extent that any installment has become exercisable, it may
thereafter be exercised at any time prior to the expiration or
earlier termination of the Option. Notwithstanding the foregoing,
no Option shall be exercisable by a Grantee except at a time when
the Grantee is employed by the Corporation or by a Subsidiary, or to
the extent permitted by Paragraph B of this Article.
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E. Manner of Exercise.
Subject to the provisions of Paragraph D of this Article, the
Option may be exercised at one time or from time to time, except
that each partial exercise of an Option shall be for 50 shares or a
multiple thereof, or, if fewer than 50 shares remain outstanding
under the Option, for all the remaining shares. The procedures for
exercise shall be set forth in the written Option certificate
provided for in Paragraph 1 of this Article.
F. Payment for Shares.
Payment in full of the purchase price for the shares purchased
pursuant to the exercise of any Option shall be made in cash upon
exercise of the Option. All shares sold under the Plan pursuant to
the exercise of an Option shall be fully paid and nonassessable.
G. Payment of Withholding Taxes.
Payment in full of any federal, state, or local taxes of any kind
required by law to be withheld with respect to the exercise of the
Option shall be made to the Corporation in cash upon exercise of the
Option. A Grantee may irrevocably elect to have any withholding tax
obligation satisfied by (a) having the Corporation withhold shares
otherwise deliverable to the Grantee with respect to the exercise of
the Option, or (b) delivering to the Corporation shares received
upon the exercise of the Option or delivering to the Corporation
other shares of Common Stock; provided, that the Committee may, in
its sole discretion, disapprove any such election.
H. Voting and Dividend Rights.
No Grantee of an Option shall have any voting or dividend rights
or any other rights of a stockholder with respect to any shares of
Common Stock covered by an Option before he exercises the Option
with respect to such shares and his name is recorded on the
Corporation's stockholder ledger as the holder of record of such
shares.
I. Option Certificates.
The proper officers of the Corporation shall execute and deliver
written Option certificates, which shall contain such provisions as
are expressly provided herein and such additional provisions as the
Committee in each instance shall deem appropriate and not
inconsistent with any of the express provisions of the Plan.
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IX. RESTRICTED SHARES.
Each Restricted Share granted under the Plan shall be subject to
the following terms and conditions, and to such additional terms and
conditions as the Committee shall deem appropriate; provided that
none of these additional terms and conditions shall be more
favorable to a Grantee than the terms and conditions set forth
herein;
A. Rights with Respect to Shares.
A Grantee to whom Restricted Shares have been granted shall have
absolute ownership of such shares, including the right to vote the
same and to receive dividends thereon, subject, however, to the
terms, conditions, and restrictions described in the Plan and in the
instrument evidencing the grant of the Restricted Shares to such
Grantee. The Grantee's absolute ownership shall become effective
only after he has received a certificate or certificates for the
number of shares of Common Stock awarded, or after he has received
notification that such certificate or certificates are being held in
custody for him.
B. Restrictions.
Until the restrictions set forth in this Paragraph B shall lapse
pursuant to Paragraph C or D of this Article IX, Restricted Shares
shall be subject to the following conditions:
(i) Restricted Shares shall not be sold, assigned, transferred,
pledged, hypothecated, or otherwise disposed of; and
(ii) if the Grantee ceases to be an Employee for any reason,
except as provided in Paragraph D of the Article, any Restricted
Shares that had been delivered to, or held in custody for, the
Grantee shall be returned to the Corporation forthwith, and all the
rights of the Grantee with respect to such shares shall immediately
terminate without any payment of consideration by the Corporation.
If the Grantee's interest in the Restricted Shares shall be
terminated pursuant to this clause (ii), he shall forthwith deliver
to the Secretary or any Assistant Secretary of the Corporation the
certificates for such shares, accompanied by such instrument of
transfer as may be required by the Secretary or any Assistant
Secretary of the Corporation.
C. Lapse of Restrictions.
Except as provided below with respect to a Change of Control and
as set forth in Paragraph D hereof, the restrictions set forth in
Paragraph B hereof, shall lapse at the end of the Restriction
Period.
At the time Restricted Shares are granted or at any time
thereafter, the Committee may stipulate that the restrictions set
forth in Paragraph B hereof shall lapse with respect to such
Restricted Shares if a Change of Control occurs.
- 8 -<PAGE> <PAGE>
D. Attainment of Age 65; Termination of Employment.
Any provision of Paragraph B hereof to the contrary
notwithstanding, if a Grantee has been in the continuous employment
of the Corporation or of any Subsidiary for more than one year from
the date on which one or more Restricted Shares were granted to him,
and if such Grantee shall attain age 65 while so employed, then the
restrictions set forth in Paragraph B shall lapse on the date of the
Grantee's attainment of age 65 with respect to all of the Restricted
Shares awarded to such Grantee.
Any provision of Paragraph B hereof to the contrary
notwithstanding, if a Grantee has been in the continuous employment
of the Corporation or of any Subsidiary for more than one year from
the date on which one or more Restricted Shares were granted to him,
and if such Grantee shall, before he attains age 65, die or incur a
Disability while so employed, then the restrictions set forth in
Paragraph B shall lapse on the date of the Grantee's death or
Disability with respect to a fraction of the Restricted Shares
awarded to such Grantee. The numerator of the fraction shall be the
number of complete years that have elapsed since the Restricted
Shares were granted, and the denominator of the fraction shall be
the number of complete years in the Restriction Period.
Any provision of Paragraph B hereof to the contrary
notwithstanding, if a Grantee has been in the continuous employment
of the Corporation or of any Subsidiary for more than one year from
the date on which one or more Restricted Shares were granted to him,
and if the employment of the Grantee by the Corporation or of any
Subsidiary shall terminate for any reason, then the Committee may
provide, on a case-by-case basis, that the restrictions set forth in
Paragraph B shall lapse.
E. Agreement by Grantee Regarding Withholding Taxes.
Each Grantee who receives one or more Restricted Shares shall
agree that, subject to the provisions of Paragraph B hereof:
(i) no later than the date of the lapse of the restrictions set
forth in Paragraph B hereof (and any additional restrictions set
forth in the instrument evidencing the grant of the Restricted
Shares) he will pay to the Corporation, or make arrangements
satisfactory to the Committee regarding payment of, any federal,
state, or local taxes of any kind required by law to be withheld
with respect to the Restricted Shares, and
(ii) the Corporation and its Subsidiaries shall, to the extent
permitted by law, have the right to deduct from any payments of any
kind otherwise due to the Grantee any federal, state, or local taxes
of any kind required by law to be withheld with respect to the
Restricted Shares.
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A Grantee may irrevocably elect to have any withholding tax
obligation satisfied by (a) having the Corporation withhold shares
otherwise deliverable to the Grantee in connection with the grant of
Restricted Shares, or (b) delivering to the Corporation such
Restricted Shares or delivering to the Corporation other shares of
Common Stock; provided, that the Committee may, in its sole
discretion, disapprove any such election.
F. Tax Assistance Payments.
When the restrictions set forth in Paragraph B hereof, or in the
instrument evidencing the grant of the Restricted Shares, lapse, the
Committee may, in its discretion, direct the Corporation to make
cash payments to assist the Grantee in satisfying his federal income
tax liability with respect to the Restricted Shares. Such payments
may be made only to those Grantees whose performance the Committee
determines to have been fully satisfactory between the date on which
the Restricted Shares were granted and the date on which such
restrictions lapse. The Committee may, in its discretion, estimate
the amount of the federal income tax in accordance with methods or
criteria uniformly applied to Grantees similarly situated, without
regard to the individual circumstances of a particular Grantee.
G. Election to Recognize Gross Income in Year of Grant.
If a Grantee properly elects, within 30 days of the date of grant
of a Restricted Share, to include in gross income for federal income
tax purposes an amount equal to the fair market value of the shares
of Common Stock awarded on the date of grant, he shall make
arrangements satisfactory to the Committee to pay in the year of
such grant any federal, state, or local taxes required to be
withheld with respect to such shares. If he shall fail to make the
payments, the Corporation and its Subsidiaries shall, to the extent
permitted by law, have the right to deduct from any payments of any
kind otherwise due to the Grantee any federal, state, or local taxes
of any kind required by law to be withheld with respect to such
shares of Common Stock.
H. Restrictive Legends; Certificates May be Held in Custody.
Certificates evidencing Restricted Shares shall bear an
appropriate legend referring to the terms, conditions, and
restrictions described in the Plan and in the instrument evidencing
the grant of the Restricted Shares. Any attempt to dispose of such
Restricted Shares in contravention of the terms, conditions, and
restrictions described in the Plan or in the instrument evidencing
the grant of the Restricted Shares shall be ineffective. The
Committee may enact rules that provide that the certificates
evidencing such shares may be held in custody by a bank or other
institution, or that the Corporation may itself hold such shares in
custody, until the restrictions thereon shall have lapsed.
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I. Foreign Laws.
Notwithstanding any provisions of the Plan to the contrary,
including but not limited to Articles VI and VII and Paragraphs A
and B(i) of the Article IX, if Restricted Shares are to be awarded
to a Grantee who is subject to the laws, including but not limited
to the tax laws, of any country other than the United States, the
Committee may, in its discretion, direct the Corporation to sell,
assign, or otherwise transfer the Restricted Shares to a trust or
other entity or arrangement, rather than grant the Restricted Shares
directly to the Grantee, in order to comply with such laws or to
assure that the Grantee qualifies for tax treatment that is
comparable to the tax treatment accorded to the recipients of
Restricted Shares by the tax laws of the United States or for tax
treatment that is made available by the laws of such country.
J. Issuance of Restricted Shares in respect of Phantom Shares.
Notwithstanding any provision of the Plan to the contrary, the
Committee may grant Restricted Shares under the Plan to key
employees of the Company who agree to forfeit phantom shares held by
them under the Long-Term Performance Incentive Plan of the Company
in exchange for Restricted Shares. The Committee shall have the
authority to determine the terms of the exchange including the
exchange ratio of Restricted Shares issued for phantom shares and
the date for valuing Restricted Shares.
X. COMPLIANCE WITH LAW AND OTHER CONDITIONS.
A. Restrictions on Grant of Awards.
The listing on the New York Stock Exchange or the registration or
qualification under any federal or state law of any shares of Common
Stock to be granted pursuant to Awards may be necessary or desirable
as a condition of or in connection with such Awards (in order to
permit the exercise of Options, the awarding of Restricted Shares,
or the resale or other disposition of any shares of Common Stock by
or on behalf of the Grantees). If the Board in its sole discretion
determines that such listing, registration, or qualification is
necessary or desirable, delivery of the certificates for such shares
of Common Stock shall not be made until such listing, registration,
or qualification shall have been completed. The Corporation agrees
that it will use its best efforts to effect any such listing,
registration, or qualification; provided, however, that the
Corporation shall not be required to use its best efforts to effect
such registration under the Securities Act of 1933 other than by
providing the information called for by Form S-3 and Form S-8, as
presently in effect, or such other forms as may be in effect from
time to time calling for information comparable to that presently
required to be furnished under Form S-3 and Form S-8.
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B. Restrictions on Resale of Unregistered Shares.
If the shares of Common Stock that have been awarded or issued to
a Grantee pursuant to the terms of the Plan are not registered under
the Securities Act of 1933, as amended, pursuant to an effective
registration statement, such Grantee may be required, if the
Committee shall deem it advisable, to agree in writing (i) that any
shares of Common Stock acquired by such Grantee pursuant to the Plan
will not be sold except pursuant to an effective registration
statement under the Securities Act of 1933, as amended, or pursuant
to an exemption from registration under said Act, and (ii) that such
Grantee is acquiring such shares of Common Stock for his own account
and not with a view to the distribution thereof.
XI. ADJUSTMENTS.
The number of shares of Common Stock of the Corporation reserved
for Awards under the Plan and the Option Price under any outstanding
Options shall be subject to adjustment by the Committee, in its sole
discretion, 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 adjustments
under this Article XI shall be conclusive and binding for all
purposes of the Plan.
XII. MISCELLANEOUS PROVISIONS.
A. No Right to Receive Award.
Nothing in the Plan shall be construed to give any Employee any
right to receive an Award under the Plan.
B. Effect of Stock Splits, etc. on Restricted Shares.
Any shares of Common Stock of the Corporation received by a
Grantee as a stock dividend on Restricted Shares, or as a result of
stock splits, combinations, exchanges of shares, reorganizations,
mergers, consolidations, or other events affecting Restricted
Shares, shall have the same status, be subject to the same
restrictions, and bear the same legend as the shares with respect to
which they were issued.
C. Expenses of Plan.
The expenses of the Plan shall be borne by the Corporation.
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XIII. AMENDMENT, SUSPENSION, OR TERMINATION.
A. Amendment.
The Plan may be amended at any time and from time to time by the
Board, but no amendment that increases the aggregate number of
shares of Common Stock that may be granted pursuant to the Plan or
that extends the period during which Awards may be granted under the
Plan shall be effective unless and until the same is approved, at a
meeting held to take such action at which a quorum is present, by
the affirmative vote of the holders of a majority of the shares of
Common Stock of the Corporation present in person or by proxy and
entitled to vote. Without the written consent of a Grantee, no
amendment of the Plan shall adversely affect any right of such
Grantee with respect to any Award theretofore granted to him.
B. Right of Board to Suspend or Terminate Plan.
The Board may at any time suspend or terminate the Plan. No
Awards may be granted during any suspension of the Plan or after the
Plan has been terminated.
C. Termination of Plan.
The Plan shall terminate upon the earlier of the following dates:
(i) on the date of termination specified in a resolution of the
Board, or
(ii) on a date ten years from the date of which the Plan is
approved by the stockholders of the Corporation in accordance with
Article XV hereof.
Except as otherwise provided in Article XV, the termination of the
Plan shall not affect any Awards previously granted. After the Plan
terminates, the function of the Committee will be limited to
supervising the administration of Awards previously granted.
XIV. GOVERNING LAW.
The Plan and all Awards made thereunder shall be governed by the
laws of the State of New York.
XV. ADOPTION BY BOARD AND APPROVAL BY STOCKHOLDERS.
The Plan shall become effective upon its adoption by the Board;
provided, however, that if the Plan is not approved by the
stockholders of the Corporation prior to the first anniversary of
its adoption, the Plan and all Awards made thereunder shall be of no
effect. Stockholder approval shall be obtained, at a meeting held
to take such action at which a quorum is present, by the affirmative
vote of the holders of a majority of the shares of Common Stock of
the Corporation present in person or by proxy and entitled to vote.
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THE INTERPUBLIC GROUP OF COMPANIES
Employee Stock Purchase Plan (1985)
The purpose of this Plan is to provide employees a continued
opportunity to purchase IPG stock through annual offerings to be
made during the ten-year period commencing July 1, 1985.
6,000,000 <F1> shares in the aggregate are reserved for this
purpose.
1. Administration: The Plan will be administered by a
Committee appointed by the Board of Directors, consisting of at
least three of its members.
The Committee will have authority to make rules and
regulations for the administration of the Plan; its
interpretations and decisions with regard thereto shall be final
and conclusive.
2. Eligibility: All employees of the Corporation and any
subsidiaries designated by the Committee will be eligible to
participate in the Plan, in accordance with such rules as may be
prescribed from time to time, which rules, however, shall neither
permit nor deny participation in the Plan contrary to the
requirements of the Internal Revenue Code (including but not
limited to, Section 423(b)(3), (4) and (8) thereof) and
regulations promulgated thereunder. No employee may be granted
an option if such employee, immediately after the option is
granted, owns 5% or more of the total combined voting power or
value of all classes of stock of the Corporation or its
subsidiaries. For purposes of the preceding sentence, the rules
of Section 424(d) of the Internal Revenue Code shall apply in
determining the stock ownership of an individual, and stock which
the employee may purchase under outstanding options shall be
treated as stock owned by the employee.
3. Offerings: The Corporation will make one or more
annual offerings to employees to purchase stock under this Plan.
The terms and conditions for each such offering shall specify the
amount of stock that may be purchased thereunder. Each offering
shall include a Purchase Period of 12 months' duration during
which (or during such portion thereof as an employee may elect to
participate) the amounts received as compensation by an employee
shall constitute the measure of such of the employee's
participation in the offering as is based on compensation.
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4. Participation: An employee eligible on the effective
date of any offering may participate in such offering at any time
by completing and forwarding a Payroll Deduction Authorization
form to his appropriate payroll location. The form will
authorize a regular payroll deduction from the employee's
compensation, and must specify the date on which such deduction
is to commence, which may not be retroactive.
5. Deductions: The Corporation will maintain payroll
deduction accounts for all participating employees. With respect
to any offering made under this Plan, an employee may authorize a
payroll deduction of up to a maximum of 10% of the compensation
he receives during the Purchase Period specified in the offering
(or during such portion thereof as he may elect to participate).
No employee may be granted an option which permits his
rights to purchase stock under this Plan, or any other stock
purchase plan of the Corporation or its subsidiaries, to accrue
(within the meaning of Section 423(b)(8) of the Internal Revenue
Code and the regulations thereunder) at a rate which exceeds
$25,000 of fair market value of stock (determined at the date of
the offering) for each calendar year in which the option is
outstanding at any time.
6. Deduction Changes: An employee may at any time
increase or decrease his payroll deduction by filing a new
Payroll Deduction Authorization form. The change may not become
effective sooner than the next pay period after receipt of the
form. A payroll deduction may be increased only once and reduced
only once during any Purchase Period.
7. Withdrawal of Funds: An employee may at any time and
for any reason permanently draw out the balance accumulated in
his account, and thereby withdraw from participation in an
offering. He may thereafter begin participation again only once
during the remainder of the Purchase Period specified in the
offering. Partial withdrawals will not be permitted.
8. Purchase of Shares: Each employee participating in any
offering under this Plan will be granted an option, upon the
effective date of such offering, for as many full shares of IPG
stock as he may elect to purchase with the following amounts:
(a) up to 10% of the compensation received during the
specified Purchase Period (or during such portion thereof as
he may elect to participate), to be paid by payroll
deductions during such period;
(b) the balance (if any) carried forward from his
payroll deduction account for the preceding Purchase Period
pursuant to the final paragraph of this Section 8; and
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(c) the balance (if any) carried forward from his
payroll deduction account for the final Purchase Period
(ending June 30, 1985) under The Interpublic Group of
Companies Employee Stock Purchase Plan (1975).
Notwithstanding the preceding sentence, in no event may the
number of shares purchased by any employee under an offering
exceed 3,600 shares.
The purchase price for each share purchased under any
offering will be 85% of the average market price on the last
business day of the month as of the end of which the purchase is
made.
As of the last day of each month during any offering, the
account of each participating employee shall be totaled and the
purchase price determined. When a participating employee shall
have sufficient funds in his account to purchase one or more full
shares as of that date, the employee shall be deemed to have
exercised his option to purchase such share or shares at such
price; his account shall be charged for the amount of the
purchase; and a stock certificate shall be issued to him as of
such day. Subsequent shares covered by the employee's option
will be purchased in the same manner, whenever sufficient funds
have again accrued in his account.
Payroll deductions may be made under each offering to the
extent authorized by the employee, subject to the maximum
limitation imposed for such offering. A separate employee
account will be maintained with respect to each offering.
A participating employee may not purchase a share under any
offering beyond 12 months from the effective date thereof. Any
balance remaining in an employee's payroll deduction account at
the end of a Purchase Period will be carried forward into the
employee's payroll deduction account for the following Purchase
Period under the Plan or, upon the termination of the Plan, into
the employee's payroll deduction account for the first Purchase
Period under any successor plan if a successor plan is then in
effect. In no event will the balance carried forward be equal to
or greater than the purchase price on the last day of the last
month of the Purchase Period. Any balance remaining in a payroll
deduction account at the termination of the Plan shall be
refunded automatically to the employee in accordance with Section
17 unless a successor plan becomes effective immediately
following the termination of the Plan.
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9. Registration of Certificates: Certificates may be
registered only in the name of the employee, or, if he so
indicates on his Payroll Deduction Authorization form, in his
name jointly with a member of his family, with right of
survivorship. An employee who is a resident of a jurisdiction
which does not recognize such a joint tenancy may have
certificates registered in his name as tenant in common with a
member of his family, without right of survivorship.
10. Definitions: The phrase "average market price" means
the average of the high and low prices of IPG stock on the New
York Stock Exchange on a given day or, if no sales of IPG stock
were made on that day, the average of the high and low prices of
IPG stock on the next preceding day on which sales were made on
said Exchange.
"Compensation" means only basic compensation, including any
employer contribution to a profit-sharing or stock bonus plan
(including the Interpublic Savings Plan) or to any other employee
benefit plan to the extent that such employer contribution
represents an amount that would have been paid to the employee in
cash, as basic compensation, but for the employee's election
pursuant to a qualified cash or deferred arrangement under
Section 401(k) of the Internal Revenue Code (an "elective cash or
deferred contribution") or pursuant to a cafeteria plan within
the meaning of the Section 125 of the Internal Revenue Code (a
"salary reduction contribution"), and excluding overtime,
bonuses, cost-of-living allowances, deferred compensation awards
(apart from any elective cash or deferred contribution), or any
other extra payment of any kind (apart from any salary reduction
contribution). Solely for purposes of this Plan, "compensation"
consisting of any elective cash or deferred contribution or a
salary reduction contribution shall be deemed to be received by
the employee on the date on which the contribution would have
been paid to the employee but for the employee's election.
"Date of Offering" shall be the first working day (as
defined below) during the Purchase Period specified for any
offering made under this Plan.
The term "subsidiary" means all subsidiaries of the
Corporation, whether presently a subsidiary or hereafter becoming
a subsidiary, all within the meaning of Section 424(f) of the
Internal Revenue Code and regulations promulgated thereunder.
"Working day" means a day other than a Saturday, Sunday or
scheduled IPG holiday.
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11. Rights as a Stockholder: None of the rights or
privileges of a stockholder of the Corporation shall exist with
respect to shares purchased under this Plan unless and until
certificates representing such full shares shall have been
issued.
12. Rights on Retirement, Death or Termination of
Employment: In the event of a participating employee's
retirement, death, or termination of employment, no payroll
deduction shall be taken from any pay due and owing to him at
such time and the balance in his account shall be paid to him or,
in the event of his death, to his estate.
13. Rights not Transferable: Rights under this Plan are
not transferable by a participating employee other than by will
or laws of descent and distribution, and are exercisable during
his lifetime only by him.
14. Application of Funds: all funds received or held by
the Corporation under this Plan may be used for any corporate
purposes.
15. Adjustment in Case of Changes Affecting IPG Stock: In
the event of a subdivision of the outstanding shares, or the
payment of a stock dividend, the number of shares reserved under
this Plan, including shares covered by outstanding grants to
participating employees, shall be increased proportionately, and
the purchase price for each participant at such time reduced
proportionately, and such other adjustment shall be made as may
be deemed equitable by the Board of Directors. In the event of
any other change affecting IPG stock, such adjustment shall be
made as may be deemed equitable by the Board of Directors to give
proper effect to such event.
16. Amendment of the Plan: The Board of Directors may at
any time, or from time to time, amend this Plan in any respect,
except that, without the approval of a majority of the shares of
stock of the Corporation then issued and outstanding and entitled
to vote, no amendment shall be made (i) increasing or decreasing
the number of shares reserved under this Plan (other than as
provided in Section 15) or (ii) decreasing the purchase price per
share (other than as provided in Section 15).
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17. Termination of the Plan: This Plan and all rights of
employees under any offering hereunder shall terminate:
(a) on the day that participating employees become
entitled to purchase a number of shares equal to or greater
than the number of shares remaining available for purchase.
If the number of shares so purchasable is greater than the
shares remaining available, the available shares shall be
allocated by the Committee among such participating
employees in such manner (consistent) with the requirements
of Section 423(b)(4) and (5) of the Internal Revenue Code
and the regulations thereunder) as it deems fair; or
(b) at any time, at the discretion of the Board of
Directors.
No offering hereunder shall be made, the Purchase Period under
which shall extend beyond June 30, 1995. Upon termination of
this Plan, all amounts in the accounts of participating employees
shall be promptly refunded unless those amounts are carried
forward, in accordance with the final paragraph of Section 8,
into accounts established under a successor plan.
18. Governmental Regulations: The Corporation's obligation
to sell and deliver IPG stock under this Plan is subject to the
approval of any governmental authority required in connection
with the authorization, issuance or sale of such stock.
<F1> Adjusted for the two-for-one stock split, which was
effective June 23,1986, the three-for-two stock split, which was
effective June 15, 1989 and the two-for-one stock split, which
became effective on June 15, 1992.
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<PAGE>
AMENDMENT NO. 2 TO CREDIT AGREEMENT
AMENDMENT, dated as of October 5, 1993 to the Credit Agreement
dated as of September 30, 1992 which was effective as of December
28, 1992 (the "Agreement") and amended as of April 30, 1993
between THE INTERPUBLIC GROUP OF COMPANIES, INC. (the "Borrower")
and Morgan Guaranty Trust Company of New York (the "Bank").
The parties hereto desire to amend the Agreement subject to
the terms and conditions of this Amendment, as hereinafter
provided. Accordingly, the parties hereto agree as follows:
1. Definitions. Unless otherwise specifically defined
herein, each term used herein which is defined in the Agreement
shall have the meaning assigned to such term in the Agreement.
Each reference to "hereof", "hereunder", "herein" and "hereby"
and each other similar reference and each reference to "this
Agreement" and each other similar reference contained in the
Agreement and in each of the documents relating to the Agreement
shall from and after the date hereof refer to the Agreement as
amended hereby.
2. Amendments.
A. The definition of "Debt" set forth in Section 1.1 of the
Agreement is hereby amended to read in its entirety as follows:
"Debt" of any Person means at any date, without
duplication,
(i) all obligations of such Person for borrowed money,
including reimbursement obligations for letters of credit,
(ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all
obligations of such Person to pay the deferred purchase price
of property or services, except trade accounts payable arising
in the ordinary course of business, (iv) all obligations of
such Person as lessee under capital leases, (v) all Debt of
others secured by a Lien on any asset of such Person, whether
or not such Debt is assumed by such Person, and (vi) all debt
of others Guaranteed by such Person, but in each case
specified in (i) through (vi) excludes obligations arising in
connection with securities repurchase transactions.
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B. The definition of "Total Borrowed Funds" set forth in
Section 1.1 of the Agreement is hereby amended to read in its
entirety as follows:
"Total Borrowed Funds" means at any date, without
duplication, (i) all outstanding obligations of the Borrower
and its Consolidated Subsidiaries for borrowed money, (ii) all
outstanding obligations of the Borrower and its Consolidated
Subsidiaries evidenced by bonds, debentures, notes or similar
instruments and (iii) any outstanding obligations of the type
set forth in (i) or (ii) of any other Person Guaranteed by the
Borrower and its Consolidated Subsidiaries, it being
understood that the obligation to repurchase securities
transferred pursuant to a securities repurchase agreement
shall not be deemed to give rise to any amount of Total
Borrowed Funds pursuant to this definition.
C. Section 6.9 of the Agreement is hereby amended by deleting
the word "and" at the end of Section 6.9 (i), deleting the period
at the end of Section 6.9 (j) and inserting a semicolon and the
word "and" in its place, and adding the following new paragraph
immediately thereafter:
"(k) any Lien on property arising in connection with a
securities repurchase transaction."
D. Section 7(e) of the Agreement is hereby amended by adding
the following provision after the reference to "$10,000,000"
therein:
"and provided further that it is understood that the
obligations referred to herein exclude those obligations
arising in connection with securities repurchase
transactions".
3. Agreement as Amended. Except as expressly amended hereby,
the Agreement shall continue in full force and effect in
accordance with the terms thereof.
4. Governing Law. This Amendment, and the Agreement as
amended hereby, shall be construed in accordance with and
governed by the laws of the State of New York.
5. Severability. In case any one or more of the provisions
contained in this Amendment should be invalid, illegal or
unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
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6. Counterparts. This Amendment may be executed in any
number of counterparts, each of which shall constitute an
original but all of which when taken together shall constitute
one and the same instrument.
7. Effectiveness. This Amendment shall become effective as
of the date first above written upon receipt by the Bank of
counterparts hereof executed by each of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their duly authorized officers as of
the day and year first above written.
THE INTERPUBLIC GROUP OF COMPANIES, INC.
By:
Name: Alan M. Forster
Title: Vice President & Treasurer
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By:
Name: Charles R. Pardue
Title: Associate
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<PAGE>
Letterhead of Morgan Guaranty
[Interpublic]
Ladies and Gentlemen:
We refer to the Credit Agreement, dated as of September 30,
1992 and effective as of December 28, 1992 between The
Interpublic Group of Companies, Inc. ("Interpublic") and Morgan
Guaranty Trust Company of New York (the "Agreement").
We understand that Interpublic is contemplating entering into
one or more transactions in which it would purchase United States
Treasury securities with a remaining term to maturity of 90 days
or less and simultaneously enter into a repurchase transaction
with respect to such securities with a securities broker/dealer.
You have advised us that (a) all or substantially all of the
initial purchase price for these Treasury securities would be
paid directly from the proceeds of the repurchase transaction,
(b) the Treasury securities would not be included in a balance
sheet of Interpublic prepared in accordance with generally
accepted accounting principles in the United States and (c) the
face amount of the Treasury securities involved would at no time
exceed 15% of Interpublic's consolidated total assets (as
reported on the audited statement of financial condition most
recently filed with the Securities and Exchange Commission by
Interpublic prior to the inception of such a transaction). A
transaction of the type described in this paragraph is referred
to herein as a "Transaction".
You have asked us to confirm, and we do hereby irrevocably
confirm, that a Transaction of the type described above would not
be deemed to constitute or to give rise to an "obligation for
money borrowed (or...capitalized lease obligation...obligation
under a purchase money mortgage, conditional sale or other title
retention agreement or...obligation under notes payable or drafts
accepted representing extensions of credit)" as those terms are
used in subsection 7(e) of the Agreement. To further effect our
mutual understanding set forth herein, we agree pursuant to
subsection 8.2(a) of the Agreement that no event occurring in
connection with a Transaction will be deemed to give rise to an
Event of Default (as defined in the Agreement) under subsection
7(e) of the Agreement, and the Agreement will be deemed to be
amended accordingly.
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<PAGE>
This letter shall not affect any provision of the Agreement
other than subsections 7(e) and shall not affect or prejudice the
status (under subsections 7(e) or any other provision of the
Agreement) of any event or transaction other than as specifically
set forth herein. We understand and agree that this letter may
be relied on by Interpublic and shall be binding upon the Bank
(as defined in the Agreement), any successor to or transferee or
assignee of the Bank and any Participant (as defined in
subsection 8.3 of the Agreement).
Very truly yours,
By
Charles R. Pardue,
Associate
Accepted and Agreed to by:
The Interpublic Group of Companies, Inc.
By
Alan M. Forster
Vice President & Treasurer
- 2 -
<PAGE>
AMENDMENT NO. 2 TO CREDIT AGREEMENT
AMENDMENT, dated as of October 5, 1993 to the Credit Agreement
dated as of September 30, 1992 which was effective as of December
23, 1992 (the "Agreement") and amended as of April 30, 1993
between THE INTERPUBLIC GROUP OF COMPANIES, INC. (the "Borrower")
and Chemical Bank (the "Bank").
The parties hereto desire to amend the Agreement subject to
the terms and conditions of this Amendment, as hereinafter
provided. Accordingly, the parties hereto agree as follows:
1. Definitions. Unless otherwise specifically defined
herein, each term used herein which is defined in the Agreement
shall have the meaning assigned to such term in the Agreement.
Each reference to "hereof", "hereunder", "herein" and "hereby"
and each other similar reference and each reference to "this
Agreement" and each other similar reference contained in the
Agreement and in each of the documents relating to the Agreement
shall from and after the date hereof refer to the Agreement as
amended hereby.
2. Amendments.
A. The definition of "Debt" set forth in Section 1.1 of the
Agreement is hereby amended to read in its entirety as follows:
"Debt" of any Person means at any date, without
duplication, (i) all obligations of such Person for borrowed
money, including reimbursement obligations for letters of
credit, (ii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase
price of property or services, except trade accounts payable
arising in the ordinary course of business, (iv) all
obligations of such Person as lessee under capital leases, (v)
all Debt of others secured by a Lien on any asset of such
Person, whether or not such Debt is assumed by such Person,
and (vi) all debt of others Guaranteed by such Person, but in
each case specified in (i) through (vi) excludes obligations
arising in connection with securities repurchase transactions.
- 1 -
PAGE
<PAGE>
B. The definition of "Total Borrowed Funds" set forth in
Section 1.1 of the Agreement is hereby amended to read in its
entirety as follows:
"Total Borrowed Funds" means at any date, without
duplication, (i) all outstanding obligations of the Borrower
and its Consolidated Subsidiaries for borrowed money, (ii) all
outstanding obligations of the Borrower and its Consolidated
Subsidiaries evidenced by bonds, debentures, notes or similar
instruments and (iii) any outstanding obligations of the type
set forth in (i) or (ii) of any other Person Guaranteed by the
Borrower and its Consolidated Subsidiaries, it being
understood that the obligation to repurchase securities
transferred pursuant to a securities repurchase agreement
shall not be deemed to give rise to any amount of Total
Borrowed Funds pursuant to this definition.
C. Section 6.9 of the Agreement is hereby amended by deleting
the word "and" at the end of Section 6.9 (i), deleting the period
at the end of Section 6.9 (j) and inserting a semicolon and the
word "and" in its place, and adding the following new paragraph
immediately thereafter:
"(k) any Lien on property arising in connection with a
securities repurchase transaction."
D. Section 7(e) of the Agreement is hereby amended by
adding the following provision after the reference to
"$10,000,000" therein:
"and provided further that it is understood that the
obligations referred to herein exclude those obligations
arising in connection with securities repurchase
transactions".
3. Agreement as Amended. Except as expressly amended hereby,
the Agreement shall continue in full force and effect in
accordance with the terms thereof.
4. Governing Law. This Amendment, and the Agreement as
amended hereby, shall be construed in accordance with and
governed by the laws of the State of New York.
5. Severability. In case any one or more of the provisions
contained in this Amendment should be invalid, illegal or
unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
- 2 -
PAGE
<PAGE>
6. Counterparts. This Amendment may be executed in any
number of counterparts, each of which shall constitute an
original but all of which when taken together shall constitute
one and the same instrument.
7. Effectiveness. This Amendment shall become effective as
of the date first above written upon receipt by the Bank of
counterparts hereof executed by each of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their duly authorized officers as of
the day and year first above written.
THE INTERPUBLIC GROUP OF COMPANIES, INC.
By:
Name: Alan M. Forster
Title: Vice President & Treasurer
CHEMICAL BANK
By:
Name: William Ewing III
Title: Managing Director
- 3 -
<PAGE>
Letterhead of Chemical Bank
[Interpublic]
Ladies and Gentlemen:
We refer to the Credit Agreement, dated as of September 30,
1992 and effective as of December 23, 1992 between The
Interpublic Group of Companies, Inc. ("Interpublic") and Chemical
Bank (the "Agreement").
We understand that Interpublic is contemplating entering into
one or more transactions in which it would purchase United States
Treasury securities with a remaining term to maturity of 90 days
or less and simultaneously enter into a repurchase transaction
with respect to such securities with a securities broker/dealer.
You have advised us that (a) all or substantially all of the
initial purchase price for these Treasury securities would be
paid directly from the proceeds of the repurchase transaction,
(b) the Treasury securities would not be included in a balance
sheet of Interpublic prepared in accordance with generally
accepted accounting principles in the United States and (c) the
face amount of the Treasury securities involved would at no time
exceed 15% of Interpublic's consolidated total assets (as
reported on the audited statement of financial condition most
recently filed with the Securities and Exchange Commission by
Interpublic prior to the inception of such a transaction). A
transaction of the type described in this paragraph is referred
to herein as a "Transaction".
You have asked us to confirm, and we do hereby irrevocably
confirm, that a Transaction of the type described above would not
be deemed to constitute or to give rise to an "obligation for
money borrowed (or...capitalized lease obligation...obligation
under a purchase money mortgage, conditional sale or other title
retention agreement or...obligation under notes payable or drafts
accepted representing extensions of credit)" as those terms are
used in subsection 7(e) of the Agreement. To further effect our
mutual understanding set forth herein, we agree pursuant to
subsection 8.2(a) of the Agreement that no event occurring in
connection with a Transaction will be deemed to give rise to an
Event of Default (as defined in the Agreement) under subsection
7(e) of the Agreement, and the Agreement will be deemed to be
amended accordingly.
- 1 -
PAGE
<PAGE>
This letter shall not affect any provision of the Agreement
other than subsections 7(e) and shall not affect or prejudice the
status (under subsections 7(e) or any other provision of the
Agreement) of any event or transaction other than as specifically
set forth herein. We understand and agree that this letter may
be relied on by Interpublic and shall be binding upon the Bank
(as defined in the Agreement), any successor to or transferee or
assignee of the Bank and any Participant (as defined in
subsection 8.3 of the Agreement).
Very truly yours,
By
William Ewing III
Managing Director
Accepted and Agreed to by:
The Interpublic Group of Companies, Inc.
By
Alan M. Forster
Vice President & Treasurer
- 2 -
<PAGE>
AMENDMENT NO. 2 TO CREDIT AGREEMENT
AMENDMENT, dated as of October 5, 1993 to the Credit Agreement
dated as of September 30, 1992 which was effective as of December
22, 1992 (the "Agreement") and amended as of April 30, 1993
between THE INTERPUBLIC GROUP OF COMPANIES, INC. (the "Borrower")
and Citibank, N.A. (the "Bank").
The parties hereto desire to amend the Agreement subject to
the terms and conditions of this Amendment, as hereinafter
provided. Accordingly, the parties hereto agree as follows:
1. Definitions. Unless otherwise specifically defined
herein, each term used herein which is defined in the Agreement
shall have the meaning assigned to such term in the Agreement.
Each reference to "hereof", "hereunder", "herein" and "hereby"
and each other similar reference and each reference to "this
Agreement" and each other similar reference contained in the
Agreement and in each of the documents relating to the Agreement
shall from and after the date hereof refer to the Agreement as
amended hereby.
2. Amendments.
A. The definition of "Debt" set forth in Section 1.1 of the
Agreement is hereby amended to read in its entirety as follows:
"Debt" of any Person means at any date, without
duplication, (i) all obligations of such Person for borrowed
money, including reimbursement obligations for letters of
credit, (ii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase
price of property or services, except trade accounts payable
arising in the ordinary course of business, (iv) all
obligations of such Person as lessee under capital leases, (v)
all Debt of others secured by a Lien on any asset of such
Person, whether or not such Debt is assumed by such Person,
and (vi) all debt of others Guaranteed by such Person, but in
each case specified in (i) through (vi) excludes obligations
arising in connection with securities repurchase transactions.
- 1 -
PAGE
<PAGE>
B. The definition of "Total Borrowed Funds" set forth in
Section 1.1 of the Agreement is hereby amended to read in its
entirety as follows:
"Total Borrowed Funds" means at any date, without
duplication, (i) all outstanding obligations of the Borrower
and its Consolidated Subsidiaries for borrowed money, (ii) all
outstanding obligations of the Borrower and its Consolidated
Subsidiaries evidenced by bonds, debentures, notes or similar
instruments and (iii) any outstanding obligations of the type
set forth in (i) or (ii) of any other Person Guaranteed by the
Borrower and its Consolidated Subsidiaries, it being
understood that the obligation to repurchase securities
transferred pursuant to a securities repurchase agreement
shall not be deemed to give rise to any amount of Total
Borrowed Funds pursuant to this definition.
C. Section 6.9 of the Agreement is hereby amended by deleting
the word "and" at the end of Section 6.9 (i), deleting the period
at the end of Section 6.9 (j) and inserting a semicolon and the
word "and" in its place, and adding the following new paragraph
immediately thereafter:
"(k) any Lien on property arising in connection with a
securities repurchase transaction."
D. Section 7(e) of the Agreement is hereby amended by
adding the following provision after the reference to
"$10,000,000" therein:
"and provided further that it is understood that the
obligations referred to herein exclude those obligations
arising in connection with securities repurchase
transactions".
3. Agreement as Amended. Except as expressly amended hereby,
the Agreement shall continue in full force and effect in
accordance with the terms thereof.
4. Governing Law. This Amendment, and the Agreement as
amended hereby, shall be construed in accordance with and
governed by the laws of the State of New York.
5. Severability. In case any one or more of the provisions
contained in this Amendment should be invalid, illegal or
unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
- 2 -
PAGE
<PAGE>
6. Counterparts. This Amendment may be executed in any
number of counterparts, each of which shall constitute an
original but all of which when taken together shall constitute
one and the same instrument.
7. Effectiveness. This Amendment shall become effective as
of the date first above written upon receipt by the Bank of
counterparts hereof executed by each of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their duly authorized officers as of
the day and year first above written.
THE INTERPUBLIC GROUP OF COMPANIES, INC.
By:
Name: Alan M. Forster
Title: Vice President & Treasurer
CITIBANK, N.A.
By:
Name: Eric Huttner
Title: Vice President
- 3 -
<PAGE>
Letterhead of Citibank, N.A.
[Interpublic]
Ladies and Gentlemen:
We refer to the Credit Agreement, dated as of September 30,
1992 and effective as of December 22, 1992 between The
Interpublic Group of Companies, Inc. ("Interpublic") and
Citibank, N.A. (the "Agreement").
We understand that Interpublic is contemplating entering into
one or more transactions in which it would purchase United States
Treasury securities with a remaining term to maturity of 90 days
or less and simultaneously enter into a repurchase transaction
with respect to such securities with a securities broker/dealer.
You have advised us that (a) all or substantially all of the
initial purchase price for these Treasury securities would be
paid directly from the proceeds of the repurchase transaction,
(b) the Treasury securities would not be included in a balance
sheet of Interpublic prepared in accordance with generally
accepted accounting principles in the United States and (c) the
face amount of the Treasury securities involved would at no time
exceed 15% of Interpublic's consolidated total assets (as
reported on the audited statement of financial condition most
recently filed with the Securities and Exchange Commission by
Interpublic prior to the inception of such a transaction). A
transaction of the type described in this paragraph is referred
to herein as a "Transaction".
You have asked us to confirm, and we do hereby irrevocably
confirm, that a Transaction of the type described above would not
be deemed to constitute or to give rise to an "obligation for
money borrowed (or...capitalized lease obligation...obligation
under a purchase money mortgage, conditional sale or other title
retention agreement or...obligation under notes payable or drafts
accepted representing extensions of credit)" as those terms are
used in subsection 7(e) of the Agreement. To further effect our
mutual understanding set forth herein, we agree pursuant to
subsection 8.2(a) of the Agreement that no event occurring in
connection with a Transaction will be deemed to give rise to an
Event of Default (as defined in the Agreement) under subsection
7(e) of the Agreement, and the Agreement will be deemed to be
amended accordingly.
- 1 -
PAGE
<PAGE>
This letter shall not affect any provision of the Agreement
other than subsections 7(e) and shall not affect or prejudice the
status (under subsections 7(e) or any other provision of the
Agreement) of any event or transaction other than as specifically
set forth herein. We understand and agree that this letter may
be relied on by Interpublic and shall be binding upon the Bank
(as defined in the Agreement), any successor to or transferee or
assignee of the Bank and any Participant (as defined in
subsection 8.3 of the Agreement).
Very truly yours,
By
Eric Huttner
Vice President
Accepted and Agreed to by:
The Interpublic Group of Companies, Inc.
By
Alan M. Forster
Vice President & Treasurer
- 2 -
<PAGE>
AMENDMENT NO. 2 TO CREDIT AGREEMENT
AMENDMENT, dated as of October 5, 1993 to the Credit Agreement
dated as of September 30, 1992 which was effective as of December
23, 1992 (the "Agreement") and amended as of April 30, 1993
between THE INTERPUBLIC GROUP OF COMPANIES, INC. (the "Borrower")
and NBD Bank, N.A. (the "Bank").
The parties hereto desire to amend the Agreement subject to
the terms and conditions of this Amendment, as hereinafter
provided. Accordingly, the parties hereto agree as follows:
1. Definitions. Unless otherwise specifically defined
herein, each term used herein which is defined in the Agreement
shall have the meaning assigned to such term in the Agreement.
Each reference to "hereof", "hereunder", "herein" and "hereby"
and each other similar reference and each reference to "this
Agreement" and each other similar reference contained in the
Agreement and in each of the documents relating to the Agreement
shall from and after the date hereof refer to the Agreement as
amended hereby.
2. Amendments.
A. The definition of "Debt" set forth in Section 1.1 of the
Agreement is hereby amended to read in its entirety as follows:
"Debt" of any Person means at any date, without
duplication, (i) all obligations of such Person for borrowed
money, including reimbursement obligations for letters of
credit, (ii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase
price of property or services, except trade accounts payable
arising in the ordinary course of business, (iv) all
obligations of such Person as lessee under capital leases, (v)
all Debt of others secured by a Lien on any asset of such
Person, whether or not such Debt is assumed by such Person,
and (vi) all debt of others Guaranteed by such Person, but in
each case specified in (i) through (vi) excludes obligations
arising in connection with securities repurchase transactions.
- 1 -
PAGE
<PAGE>
B. The definition of "Total Borrowed Funds" set forth in
Section 1.1 of the Agreement is hereby amended to read in its
entirety as follows:
"Total Borrowed Funds" means at any date, without
duplication, (i) all outstanding obligations of the Borrower
and its Consolidated Subsidiaries for borrowed money, (ii) all
outstanding obligations of the Borrower and its Consolidated
Subsidiaries evidenced by bonds, debentures, notes or similar
instruments and (iii) any outstanding obligations of the type
set forth in (i) or (ii) of any other Person Guaranteed by the
Borrower and its Consolidated Subsidiaries, it being
understood that the obligation to repurchase securities
transferred pursuant to a securities repurchase agreement
shall not be deemed to give rise to any amount of Total
Borrowed Funds pursuant to this definition.
C. Section 6.9 of the Agreement is hereby amended by deleting
the word "and" at the end of Section 6.9 (i), deleting the period
at the end of Section 6.9 (j) and inserting a semicolon and the
word "and" in its place, and adding the following new paragraph
immediately thereafter:
"(k) any Lien on property arising in connection with a
securities repurchase transaction."
D. Section 7(e) of the Agreement is hereby amended by adding
the following provision after the reference to "$10,000,000"
therein:
"and provided further that it is understood that the
obligations referred to herein exclude those obligations
arising in connection with securities repurchase
transactions".
3. Agreement as Amended. Except as expressly amended hereby,
the Agreement shall continue in full force and effect in
accordance with the terms thereof.
4. Governing Law. This Amendment, and the Agreement as
amended hereby, shall be construed in accordance with and
governed by the laws of the State of New York.
5. Severability. In case any one or more of the provisions
contained in this Amendment should be invalid, illegal or
unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
- 2 -
PAGE
<PAGE>
6. Counterparts. This Amendment may be executed in any
number of counterparts, each of which shall constitute an
original but all of which when taken together shall constitute
one and the same instrument.
7. Effectiveness. This Amendment shall become effective as
of the date first above written upon receipt by the Bank of
counterparts hereof executed by each of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their duly authorized officers as of
the day and year first above written.
THE INTERPUBLIC GROUP OF COMPANIES, INC.
By:
Name: Alan M. Forster
Title: Vice President & Treasurer
NBD BANK, N.A.
By:
Name: Carolyn J. Parks
Title: Vice President
- 3 -
<PAGE>
Letterhead of Bank
[Interpublic]
Ladies and Gentlemen:
We refer to the Credit Agreement, dated as of September 30,
1992 and effective as of December 23, 1992 between The
Interpublic Group of Companies, Inc. ("Interpublic") and NBD
Bank, N.A. (the "Agreement").
We understand that Interpublic is contemplating entering into
one or more transactions in which it would purchase United States
Treasury securities with a remaining term to maturity of 90 days
or less and simultaneously enter into a repurchase transaction
with respect to such securities with a securities broker/dealer.
You have advised us that (a) all or substantially all of the
initial purchase price for these Treasury securities would be
paid directly from the proceeds of the repurchase transaction,
(b) the Treasury securities would not be included in a balance
sheet of Interpublic prepared in accordance with generally
accepted accounting principles in the United States and (c) the
face amount of the Treasury securities involved would at no time
exceed 15% of Interpublic's consolidated total assets (as
reported on the audited statement of financial condition most
recently filed with the Securities and Exchange Commission by
Interpublic prior to the inception of such a transaction). A
transaction of the type described in this paragraph is referred
to herein as a "Transaction".
You have asked us to confirm, and we do hereby irrevocably
confirm, that a Transaction of the type described above would not
be deemed to constitute or to give rise to an "obligation for
money borrowed (or...capitalized lease obligation...obligation
under a purchase money mortgage, conditional sale or other title
retention agreement or...obligation under notes payable or drafts
accepted representing extensions of credit)" as those terms are
used in subsection 7(e) of the Agreement. To further effect our
mutual understanding set forth herein, we agree pursuant to
subsection 8.2(a) of the Agreement that no event occurring in
connection with a Transaction will be deemed to give rise to an
Event of Default (as defined in the Agreement) under subsection
7(e) of the Agreement, and the Agreement will be deemed to be
amended accordingly.
- 1 -
PAGE
<PAGE>
This letter shall not affect any provision of the Agreement
other than subsections 7(e) and shall not affect or prejudice the
status (under subsections 7(e) or any other provision of the
Agreement) of any event or transaction other than as specifically
set forth herein. We understand and agree that this letter may
be relied on by Interpublic and shall be binding upon the Bank
(as defined in the Agreement), any successor to or transferee or
assignee of the Bank and any Participant (as defined in
subsection 8.3 of the Agreement).
Very truly yours,
By
Carolyn J. Parks
Vice President
Accepted and Agreed to by:
The Interpublic Group of Companies, Inc.
By
Alan M. Forster
Vice President & Treasurer
- 2 -
<PAGE>
AMENDMENT NO. 3 TO TERM LOAN AGREEMENT
AMENDMENT, dated as of October 5, 1993 to the Term Loan
Agreement dated as of March 14, 1991 (the "Agreement") and
amended as of December 21, 1992 and as of April 30, 1993 between
THE INTERPUBLIC GROUP OF COMPANIES, INC. (the "Borrower") and NBD
Bank, N.A. (the "Bank").
The parties hereto desire to amend the Agreement subject to
the terms and conditions of this Amendment, as hereinafter
provided. Accordingly, the parties hereto agree as follows:
1. Definitions. Unless otherwise specifically defined
herein, each term used herein which is defined in the Agreement
shall have the meaning assigned to such term in the Agreement.
Each reference to "hereof", "hereunder", "herein" and "hereby"
and each other similar reference and each reference to "this
Agreement" and each other similar reference contained in the
Agreement shall from and after the date hereof refer to the
Agreement as amended hereby.
2. Amendments.
A. The definition of "Total Borrowed Funds" set forth in
Section 1.1 of the Agreement is hereby amended to read in its
entirety as follows:
"Total Borrowed Funds" of any person shall mean at any
date, without duplication, (i) all outstanding
obligations of such person for borrowed money, (ii) all
outstanding obligations of such person evidenced by
bonds, debentures, notes or similar instruments and (iii)
any outstanding obligations of the type set forth in (i)
or (ii) of any other Person Guaranteed by such person, it
being understood that the obligation to repurchase
securities transferred pursuant to a securities
repurchase agreement shall not be deemed to give rise to
any amount of Total Borrowed Funds pursuant to this
definition.
B. Section 5.2(d) of the Agreement is hereby amended by
deleting the word "and" at the end of Section 5.2(d)(vii),
deleting the period at the end of Section 5.2(d)(viii) and
inserting a semicolon and the word "and" in its place, and adding
the following new paragraph immediately thereafter:
"(ix) any Lien on property arising in connection with a
securities repurchase transaction."
3. Agreement as Amended. Except as expressly amended hereby,
the Agreement shall continue in full force and effect in
accordance with the terms thereof.
- 1 -
PAGE
<PAGE>
4. Governing Law. This Amendment, and the Agreement as
amended hereby, shall be construed in accordance with and
governed by the laws of the State of New York.
5. Severability. In case any one or more of the provisions
contained in this Amendment should be invalid, illegal or
unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
6. Counterparts. This Amendment may be executed in any
number of counterparts, each of which shall constitute an
original but all of which when taken together shall constitute
one and the same instrument.
7. Effectiveness. This Amendment shall become effective as
of the date first above written upon receipt by the Bank of
counterparts hereof executed by each of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their duly authorized officers as of
the day and year first above written.
THE INTERPUBLIC GROUP OF COMPANIES, INC.
By:
Name: Alan M. Forster
Title: Vice President & Treasurer
NBD BANK, N.A.
By:
Name: Carolyn J. Parks
Title: Vice President
- 2 -
<PAGE>
Letterhead of NBD, N.A.
[Interpublic]
Ladies and Gentlemen:
We refer to the Term Loan Agreement, dated as of March 14,
1991 between The Interpublic Group of Companies, Inc.
("Interpublic") and NBD Bank, N.A. (the "Agreement").
We understand that Interpublic is contemplating entering into
one or more transactions in which it would purchase United States
Treasury securities with a remaining term to maturity of 90 days
or less and simultaneously enter into a repurchase transaction
with respect to such securities with a securities broker/dealer.
You have advised us that (a) all or substantially all of the
initial purchase price for these Treasury securities would be
paid directly from the proceeds of the repurchase transaction,
(b) the Treasury securities would not be included in a balance
sheet of Interpublic prepared in accordance with generally
accepted accounting principles in the United States and (c) the
face amount of the Treasury securities involved would at no time
exceed 15% of Interpublic's consolidated total assets (as
reported on the audited statement of financial condition most
recently filed with the Securities and Exchange Commission by
Interpublic prior to the inception of such a transaction). A
transaction of the type described in this paragraph is referred
to herein as a "Transaction".
You have asked us to confirm, and we do hereby irrevocably
confirm, that a Transaction of the type described above would not
be deemed to constitute or to give rise to "Debt" within the
meaning of subsections 6.1(e) and 6.1(f). To further effect our
mutual understanding set forth herein, we agree pursuant to
subsection 7.1(a) of the Agreement that no event occurring in
connection with a Transaction will be deemed to give rise to an
Event of Default (as defined in the Agreement) under subsections
6.1(e) and 6.1(f) of the Agreement, and the Agreement will be
deemed to be amended accordingly.
- 1 -
PAGE
<PAGE>
This letter shall not affect any provision of the Agreement
other than subsections 6.1(e) and 6.1(f) and shall not affect or
prejudice the status (under subsections 6.1(e) and 6.1(f) or any
other provision of the Agreement) of any event or transaction
other than as specifically set forth herein. We understand and
agree that this letter may be relied on by Interpublic and shall
be binding upon the Bank (as defined in the Agreement), any
successor to or transferee or assignee of the Bank.
Very truly yours,
By
Carolyn J. Parks
Vice President
Accepted and Agreed to by:
The Interpublic Group of Companies, Inc.
By
Alan M. Forster
Vice President & Treasurer
- 2 -
<PAGE>
AMENDMENT NO. 2 TO CREDIT AGREEMENT
AMENDMENT, dated as of October 5, 1993 to the Credit Agreement
dated as of September 30, 1992 which was effective as of December
30, 1992 (the "Agreement") and amended as of April 30, 1993
between THE INTERPUBLIC GROUP OF COMPANIES, INC. (the "Borrower")
and TRUST COMPANY BANK (the "Bank").
The parties hereto desire to amend the Agreement subject to
the terms and conditions of this Amendment, as hereinafter
provided. Accordingly, the parties hereto agree as follows:
1. Definitions. Unless otherwise specifically defined
herein, each term used herein which is defined in the Agreement
shall have the meaning assigned to such term in the Agreement.
Each reference to "hereof", "hereunder", "herein" and "hereby"
and each other similar reference and each reference to "this
Agreement" and each other similar reference contained in the
Agreement and in each of the documents relating to the Agreement
shall from and after the date hereof refer to the Agreement as
amended hereby.
2. Amendments.
A. The definition of "Debt" set forth in Section 1.1 of the
Agreement is hereby amended to read in its entirety as follows:
"Debt" of any Person means at any date, without
duplication, (i) all obligations of such Person for borrowed
money, including reimbursement obligations for letters of
credit, (ii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase
price of property or services, except trade accounts payable
arising in the ordinary course of business, (iv) all
obligations of such Person as lessee under capital leases, (v)
all Debt of others secured by a Lien on any asset of such
Person, whether or not such Debt is assumed by such Person,
and (vi) all debt of others Guaranteed by such Person, but in
each case specified in (i) through (vi) excludes obligations
arising in connection with securities repurchase transactions.
- 1 -
PAGE
<PAGE>
B. The definition of "Total Borrowed Funds" set forth in
Section 1.1 of the Agreement is hereby amended to read in its
entirety as follows:
"Total Borrowed Funds" means at any date, without
duplication, (i) all outstanding obligations of the Borrower and
its Consolidated Subsidiaries for borrowed money, (ii) all
outstanding obligations of the Borrower and its Consolidated
Subsidiaries evidenced by bonds, debentures, notes or similar
instruments and (iii) any outstanding obligations of the type set
forth in (i) or (ii) of any other Person Guaranteed by the
Borrower and its Consolidated Subsidiaries, it being understood
that the obligation to repurchase securities transferred pursuant
to a securities repurchase agreement shall not be deemed to give
rise to any amount of Total Borrowed Funds pursuant to this
definition.
C. Section 6.9 of the Agreement is hereby amended by deleting
the word "and" at the end of Section 6.9 (i), deleting the period
at the end of Section 6.9 (j) and inserting a semicolon and the
word "and" in its place, and adding the following new paragraph
immediately thereafter:
"(k) any Lien on property arising in connection with a
securities repurchase transaction."
D. Section 7(e) of the Agreement is hereby amended by adding
the following provision after the reference to "$10,000,000"
therein:
"and provided further that it is understood that the
obligations referred to herein exclude those obligations
arising in connection with securities repurchase
transactions".
3. Agreement as Amended. Except as expressly amended hereby,
the Agreement shall continue in full force and effect in
accordance with the terms thereof.
4. Governing Law. This Amendment, and the Agreement as
amended hereby, shall be construed in accordance with and
governed by the laws of the State of New York.
5. Severability. In case any one or more of the provisions
contained in this Amendment should be invalid, illegal or
unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
- 2 -
PAGE
<PAGE>
6. Counterparts. This Amendment may be executed in any
number of counterparts, each of which shall constitute an
original but all of which when taken together shall constitute
one and the same instrument.
7. Effectiveness. This Amendment shall become effective as
of the date first above written upon receipt by the Bank of
counterparts hereof executed by each of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their duly authorized officers as of
the day and year first above written.
THE INTERPUBLIC GROUP OF COMPANIES, INC.
By:
Name: Alan M. Forster
Title: Vice President & Treasurer
TRUST COMPANY BANK
By:
Name: Allison Lewis Vella
Title: Vice President
- 3 -
<PAGE>
Letterhead of Bank
[Interpublic]
Ladies and Gentlemen:
We refer to the Credit Agreement, dated as of September 30,
1992 and effective as of December 30, 1992 between The
Interpublic Group of Companies, Inc. ("Interpublic") and Trust
Company Bank (the "Agreement").
We understand that Interpublic is contemplating entering into
one or more transactions in which it would purchase United States
Treasury securities with a remaining term to maturity of 90 days
or less and simultaneously enter into a repurchase transaction
with respect to such securities with a securities broker/dealer.
You have advised us that (a) all or substantially all of the
initial purchase price for these Treasury securities would be
paid directly from the proceeds of the repurchase transaction,
(b) the Treasury securities would not be included in a balance
sheet of Interpublic prepared in accordance with generally
accepted accounting principles in the United States and (c) the
face amount of the Treasury securities involved would at no time
exceed 15% of Interpublic's consolidated total assets (as
reported on the audited statement of financial condition most
recently filed with the Securities and Exchange Commission by
Interpublic prior to the inception of such a transaction). A
transaction of the type described in this paragraph is referred
to herein as a "Transaction".
You have asked us to confirm, and we do hereby irrevocably
confirm, that a Transaction of the type described above would not
be deemed to constitute or to give rise to an "obligation for
money borrowed (or...capitalized lease obligation...obligation
under a purchase money mortgage, conditional sale or other title
retention agreement or...obligation under notes payable or drafts
accepted representing extensions of credit)" as those terms are
used in subsection 7(e) of the Agreement. To further effect our
mutual understanding set forth herein, we agree pursuant to
subsection 8.2(a) of the Agreement that no event occurring in
connection with a Transaction will be deemed to give rise to an
Event of Default (as defined in the Agreement) under subsection
7(e) of the Agreement, and the Agreement will be deemed to be
amended accordingly.
- 1 -
PAGE
<PAGE>
This letter shall not affect any provision of the Agreement
other than subsections 7(e) and shall not affect or prejudice the
status (under subsections 7(e) or any other provision of the
Agreement) of any event or transaction other than as specifically
set forth herein. We understand and agree that this letter may
be relied on by Interpublic and shall be binding upon the Bank
(as defined in the Agreement), any successor to or transferee or
assignee of the Bank and any Participant (as defined in
subsection 8.3 of the Agreement).
Very truly yours,
By
Allison Lewis Vella
Vice President
Accepted and Agreed to by:
The Interpublic Group of Companies, Inc.
By
Alan M. Forster
Vice President & Treasurer
- 2 -
<PAGE>
AMENDMENT NO. 4 TO CREDIT AGREEMENT
AMENDMENT, dated as of October 5, 1993 to the Credit Agreement
dated as of March 14, 1991 (the "Agreement") and amended as of
December 30, 1992, March 15, 1993 and April 30, 1993,
respectively between THE INTERPUBLIC GROUP OF COMPANIES, INC.
(the "Borrower") and TRUST COMPANY BANK (the "Bank").
The parties hereto desire to amend the Agreement subject to
the terms and conditions of this Amendment, as hereinafter
provided. Accordingly, the parties hereto agree as follows:
1. Definitions. Unless otherwise specifically defined
herein, each term used herein which is defined in the Agreement
shall have the meaning assigned to such term in the Agreement.
Each reference to "hereof", "hereunder", "herein" and "hereby"
and each other similar reference and each reference to "this
Agreement" and each other similar reference contained in the
Agreement shall from and after the date hereof refer to the
Agreement as amended hereby.
2. Amendments.
A. The definition of "Total Borrowed Funds" set forth in
Section 1.1 of the Agreement is hereby amended to read in its
entirety as follows:
"Total Borrowed Funds" means at any date, without
duplication, (i) all outstanding obligations of the Borrower
and its Consolidated Subsidiaries for borrowed money, (ii) all
outstanding obligations of the Borrower and its Consolidated
Subsidiaries evidenced by bonds, debentures, notes or similar
instruments and (iii) any outstanding obligations of the type
set forth in (i) or (ii) of any other Person Guaranteed by the
Borrower and its Consolidated Subsidiaries, it being
understood that the obligation to repurchase securities
transferred pursuant to a securities repurchase agreement
shall not be deemed to give rise to any amount of Total
Borrowed Funds pursuant to this definition.
B. Section 6.9 of the Agreement is hereby amended by deleting
the word "and" at the end of Section 6.9(g), deleting the period
at the end of Section 6.9(h) and inserting a semicolon and the
word "and" in its place, and adding the following new paragraph
immediately thereafter:
"(i) any Lien on property arising in connection with a
securities repurchase transaction."
3. Agreement as Amended. Except as expressly amended hereby,
the Agreement shall continue in full force and effect in
accordance with the terms thereof.
- 1 -
PAGE
<PAGE>
4. Governing Law. This Amendment, and the Agreement as
amended hereby, shall be construed in accordance with and
governed by the laws of the State of New York.
5. Severability. In case any one or more of the provisions
contained in this Amendment should be invalid, illegal or
unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
6. Counterparts. This Amendment may be executed in any
number of counterparts, each of which shall constitute an
original but all of which when taken together shall constitute
one and the same instrument.
7. Effectiveness. This Amendment shall become effective as
of the date first above written upon receipt by the Bank of
counterparts hereof executed by each of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their duly authorized officers as of
the day and year first above written.
THE INTERPUBLIC GROUP OF COMPANIES, INC.
By:
Name: Alan M. Forster
Title: Vice President & Treasurer
TRUST COMPANY BANK
By:
Name: Allison Lewis Vella
Title: Vice President
- 2 -
<PAGE>
Letterhead of Trust Company Bank
[Interpublic]
Ladies and Gentlemen:
We refer to the Credit Agreement, dated as of March 14, 1991
between The Interpublic Group of Companies, Inc. ("Interpublic")
and TRUST COMPANY BANK (the "Agreement").
We understand that Interpublic is contemplating entering into
one or more transactions in which it would purchase United States
Treasury securities with a remaining term to maturity of 90 days
or less and simultaneously enter into a repurchase transaction
with respect to such securities with a securities broker/dealer.
You have advised us that (a) all or substantially all of the
initial purchase price for these Treasury securities would be
paid directly from the proceeds of the repurchase transaction,
(b) the Treasury securities would not be included in a balance
sheet of Interpublic prepared in accordance with generally
accepted accounting principles in the United States and (c) the
face amount of the Treasury securities involved would at no time
exceed 15% of Interpublic's consolidated total assets (as
reported on the audited statement of financial condition most
recently filed with the Securities and Exchange Commission by
Interpublic prior to the inception of such a transaction). A
transaction of the type described in this paragraph is referred
to herein as a "Transaction".
You have asked us to confirm, and we do hereby irrevocably
confirm, that a Transaction of the type described above would not
be deemed to constitute or to give rise to "Debt" within the
meaning of subsection 7(e) and 7(f) of the Agreement. To further
effect our mutual understanding set forth herein, we agree
pursuant to subsection 8.2(A) of the Agreement that no event
occurring in connection with a Transaction will be deemed to give
rise to an Event of Default (as defined in the Agreement) under
subsections 7(e) and 7(f) of the Agreement, and the Agreement
will be deemed to be amended accordingly.
- 1 -
PAGE
<PAGE>
This letter shall not affect any provision of the Agreement
other than subsection 7(e) and subsection 7(f) and shall not
affect or prejudice the status (under subsection 7(e) and
subsection 7(f) or any other provision of the Agreement) of any
event or transaction other than as specifically set forth herein.
We understand and agree that this letter may be relied on by
Interpublic and shall be binding upon the Bank (as defined in the
Agreement), any successor to or transferee or assignee of the
Bank and any Participant (as defined in subsection 8.3 of the
Agreement).
Very truly yours,
By
Allison Lewis Vella
Vice President
Accepted and Agreed to by:
The Interpublic Group of Companies, Inc.
By
Alan M. Forster
Vice President & Treasurer
- 2 -
<PAGE>
AMENDMENT NO. 2 TO CREDIT AGREEMENT
AMENDMENT, dated as of October 5, 1993 to the Credit Agreement
dated as of September 30, 1992 which was effective as of December
29, 1992 (the "Agreement") and amended as of April 30, 1993
between THE INTERPUBLIC GROUP OF COMPANIES, INC. (the "Borrower")
and Union Bank of Switzerland (the "Bank").
The parties hereto desire to amend the Agreement subject to
the terms and conditions of this Amendment, as hereinafter
provided. Accordingly, the parties hereto agree as follows:
1. Definitions. Unless otherwise specifically defined
herein, each term used herein which is defined in the Agreement
shall have the meaning assigned to such term in the Agreement.
Each reference to "hereof", "hereunder", "herein" and "hereby"
and each other similar reference and each reference to "this
Agreement" and each other similar reference contained in the
Agreement and in each of the documents relating to the Agreement
shall from and after the date hereof refer to the Agreement as
amended hereby.
2. Amendments.
A. The definition of "Debt" set forth in Section 1.1 of the
Agreement is hereby amended to read in its entirety as follows:
"Debt" of any Person means at any date, without
duplication, (i) all obligations of such Person for borrowed
money, including reimbursement obligations for letters of credit,
(ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all
obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in
the ordinary course of business, (iv) all obligations of such
Person as lessee under capital leases, (v) all Debt of others
secured by a Lien on any asset of such Person, whether or not
such Debt is assumed by such Person, and (vi) all debt of others
Guaranteed by such Person, but in each case specified in (i)
through (vi) excludes obligations arising in connection with
securities repurchase transactions.
- 1 -
PAGE
<PAGE>
B. The definition of "Total Borrowed Funds" set forth in
Section 1.1 of the Agreement is hereby amended to read in its
entirety as follows:
"Total Borrowed Funds" means at any date, without
duplication, (i) all outstanding obligations of the Borrower
and its Consolidated Subsidiaries for borrowed money, (ii) all
outstanding obligations of the Borrower and its Consolidated
Subsidiaries evidenced by bonds, debentures, notes or similar
instruments and (iii) any outstanding obligations of the type
set forth in (i) or (ii) of any other Person Guaranteed by the
Borrower and its Consolidated Subsidiaries, it being
understood that the obligation to repurchase securities
transferred pursuant to a securities repurchase agreement
shall not be deemed to give rise to any amount of Total
Borrowed Funds pursuant to this definition.
C. Section 6.9 of the Agreement is hereby amended by deleting
the word "and" at the end of Section 6.9 (i), deleting the period
at the end of Section 6.9 (j) and inserting a semicolon and the
word "and" in its place, and adding the following new paragraph
immediately thereafter:
"(k) any Lien on property arising in connection with a
securities repurchase transaction."
D. Section 7(e) of the Agreement is hereby amended by adding
the following provision after the reference to "$10,000,000"
therein:
"and provided further that it is understood that the
obligations referred to herein exclude those obligations
arising in connection with securities repurchase
transactions".
3. Agreement as Amended. Except as expressly amended hereby,
the Agreement shall continue in full force and effect in
accordance with the terms thereof.
4. Governing Law. This Amendment, and the Agreement as
amended hereby, shall be construed in accordance with and
governed by the laws of the State of New York.
5. Severability. In case any one or more of the provisions
contained in this Amendment should be invalid, illegal or
unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
- 2 -
PAGE
<PAGE>
6. Counterparts. This Amendment may be executed in any
number of counterparts, each of which shall constitute an
original but all of which when taken together shall constitute
one and the same instrument.
7. Effectiveness. This Amendment shall become effective as
of the date first above written upon receipt by the Bank of
counterparts hereof executed by each of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their duly authorized officers as of
the day and year first above written.
THE INTERPUBLIC GROUP OF COMPANIES, INC.
By:
Name: Alan M. Forster
Title: Vice President & Treasurer
UNION BANK OF SWITZERLAND
By:
Name: Bruce T. Richards
Title: First Vice President
By:
Name: Daniel H. Perron
Title: Assistant Vice President
- 3 -
<PAGE>
Letterhead of Union Bank of Switzerland
[Interpublic]
Ladies and Gentlemen:
We refer to the Credit Agreement, dated as of September 30,
1992 and effective as of December 29, 1992 between The
Interpublic Group of Companies, Inc. ("Interpublic") and Union
Bank of Switzerland (the "Agreement").
We understand that Interpublic is contemplating entering into
one or more transactions in which it would purchase United States
Treasury securities with a remaining term to maturity of 90 days
or less and simultaneously enter into a repurchase transaction
with respect to such securities with a securities broker/dealer.
You have advised us that (a) all or substantially all of the
initial purchase price for these Treasury securities would be
paid directly from the proceeds of the repurchase transaction,
(b) the Treasury securities would not be included in a balance
sheet of Interpublic prepared in accordance with generally
accepted accounting principles in the United States and (c) the
face amount of the Treasury securities involved would at no time
exceed 15% of Interpublic's consolidated total assets (as
reported on the audited statement of financial condition most
recently filed with the Securities and Exchange Commission by
Interpublic prior to the inception of such a transaction). A
transaction of the type described in this paragraph is referred
to herein as a "Transaction".
You have asked us to confirm, and we do hereby irrevocably
confirm, that a Transaction of the type described above would not
be deemed to constitute or to give rise to an "obligation for
money borrowed (or...capitalized lease obligation...obligation
under a purchase money mortgage, conditional sale or other title
retention agreement or...obligation under notes payable or drafts
accepted representing extensions of credit)" as those terms are
used in subsection 7(e) of the Agreement. To further effect our
mutual understanding set forth herein, we agree pursuant to
subsection 8.2(a) of the Agreement that no event occurring in
connection with a Transaction will be deemed to give rise to an
Event of Default (as defined in the Agreement) under subsection
7(e) of the Agreement, and the Agreement will be deemed to be
amended accordingly.
- 1 -
PAGE
<PAGE>
This letter shall not affect any provision of the Agreement
other than subsections 7(e) and shall not affect or prejudice the
status (under subsections 7(e) or any other provision of the
Agreement) of any event or transaction other than as specifically
set forth herein. We understand and agree that this letter may
be relied on by Interpublic and shall be binding upon the Bank
(as defined in the Agreement), any successor to or transferee or
assignee of the Bank and any Participant (as defined in
subsection 8.3 of the Agreement).
Very truly yours,
By
Bruce T. Richards
First Vice President
By
Daniel H. Perron
Assistant Vice President
Accepted and Agreed to by:
The Interpublic Group of Companies, Inc.
By
Alan M. Forster
Vice President & Treasurer
- 2 -
<PAGE>
AMENDMENT NO. 2 TO CREDIT AGREEMENT
AMENDMENT, dated as of October 5, 1993 to the Credit Agreement
dated as of September 30, 1992 which was effective as of December
16, 1992 (the "Agreement") and amended as of April 30, 1993
between THE INTERPUBLIC GROUP OF COMPANIES, INC. (the "Borrower")
and The Fuji Bank, Limited (the "Bank").
The parties hereto desire to amend the Agreement subject to
the terms and conditions of this Amendment, as hereinafter
provided. Accordingly, the parties hereto agree as follows:
1. Definitions. Unless otherwise specifically defined
herein, each term used herein which is defined in the Agreement
shall have the meaning assigned to such term in the Agreement.
Each reference to "hereof", "hereunder", "herein" and "hereby"
and each other similar reference and each reference to "this
Agreement" and each other similar reference contained in the
Agreement and in each of the documents relating to the Agreement
shall from and after the date hereof refer to the Agreement as
amended hereby.
2. Amendments.
A. The definition of "Debt" set forth in Section 1.1 of the
Agreement is hereby amended to read in its entirety as follows:
"Debt" of any Person means at any date, without
duplication, (i) all obligations of such Person for borrowed
money, including reimbursement obligations for letters of credit,
(ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all
obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in
the ordinary course of business, (iv) all obligations of such
Person as lessee under capital leases, (v) all Debt of others
secured by a Lien on any asset of such Person, whether or not
such Debt is assumed by such Person, and (vi) all debt of others
Guaranteed by such Person, but in each case specified in (i)
through (vi) excludes obligations arising in connection with
securities repurchase transactions.
- 1 -
PAGE
<PAGE>
B. The definition of "Total Borrowed Funds" set forth in
Section 1.1 of the Agreement is hereby amended to read in its
entirety as follows:
"Total Borrowed Funds" means at any date, without
duplication, (i) all outstanding obligations of the Borrower
and its Consolidated Subsidiaries for borrowed money, (ii) all
outstanding obligations of the Borrower and its Consolidated
Subsidiaries evidenced by bonds, debentures, notes or similar
instruments and (iii) any outstanding obligations of the type
set forth in (i) or (ii) of any other Person Guaranteed by the
Borrower and its Consolidated Subsidiaries, it being
understood that the obligation to repurchase securities
transferred pursuant to a securities repurchase agreement
shall not be deemed to give rise to any amount of Total
Borrowed Funds pursuant to this definition.
C. Section 6.9 of the Agreement is hereby amended by deleting
the word "and" at the end of Section 6.9 (i), deleting the period
at the end of Section 6.9 (j) and inserting a semicolon and the
word "and" in its place, and adding the following new paragraph
immediately thereafter:
"(k) any Lien on property arising in connection with a
securities repurchase transaction."
D. Section 7(e) of the Agreement is hereby amended by
adding the following provision after the reference to
"$10,000,000" therein:
"and provided further that it is understood that the
obligations referred to herein exclude those obligations
arising in connection with securities repurchase
transactions".
3. Agreement as Amended. Except as expressly amended hereby,
the Agreement shall continue in full force and effect in
accordance with the terms thereof.
4. Governing Law. This Amendment, and the Agreement as
amended hereby, shall be construed in accordance with and
governed by the laws of the State of New York.
5. Severability. In case any one or more of the provisions
contained in this Amendment should be invalid, illegal or
unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
- 2 -
PAGE
<PAGE>
6. Counterparts. This Amendment may be executed in any
number of counterparts, each of which shall constitute an
original but all of which when taken together shall constitute
one and the same instrument.
7. Effectiveness. This Amendment shall become effective as
of the date first above written upon receipt by the Bank of
counterparts hereof executed by each of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their duly authorized officers as of
the day and year first above written.
THE INTERPUBLIC GROUP OF COMPANIES, INC.
By:
Name: Alan M. Forster
Title: Vice President & Treasurer
THE FUJI BANK, LIMITED
By:
Name: Yoshihiko Shotsugu
Title: Vice President & Manager
- 3 -
<PAGE>
Letterhead of The Fuji Bank, Limited
[Interpublic]
Ladies and Gentlemen:
We refer to the Credit Agreement, dated as of September 30,
1992 and effective as of December 26, 1992 between The
Interpublic Group of Companies, Inc. ("Interpublic") and The Fuji
Bank, Limited (the "Agreement").
We understand that Interpublic is contemplating entering into
one or more transactions in which it would purchase United States
Treasury securities with a remaining term to maturity of 90 days
or less and simultaneously enter into a repurchase transaction
with respect to such securities with a securities broker/dealer.
You have advised us that (a) all or substantially all of the
initial purchase price for these Treasury securities would be
paid directly from the proceeds of the repurchase transaction,
(b) the Treasury securities would not be included in a balance
sheet of Interpublic prepared in accordance with generally
accepted accounting principles in the United States and (c) the
face amount of the Treasury securities involved would at no time
exceed 15% of Interpublic's consolidated total assets (as
reported on the audited statement of financial condition most
recently filed with the Securities and Exchange Commission by
Interpublic prior to the inception of such a transaction). A
transaction of the type described in this paragraph is referred
to herein as a "Transaction".
You have asked us to confirm, and we do hereby irrevocably
confirm, that a Transaction of the type described above would not
be deemed to constitute or to give rise to an "obligation for
money borrowed (or...capitalized lease obligation...obligation
under a purchase money mortgage, conditional sale or other title
retention agreement or...obligation under notes payable or drafts
accepted representing extensions of credit)" as those terms are
used in subsection 7(e) of the Agreement. To further effect our
mutual understanding set forth herein, we agree pursuant to
subsection 8.2(a) of the Agreement that no event occurring in
connection with a Transaction will be deemed to give rise to an
Event of Default (as defined in the Agreement) under subsection
7(e) of the Agreement, and the Agreement will be deemed to be
amended accordingly.
- 1 -
PAGE
<PAGE>
This letter shall not affect any provision of the Agreement
other than subsections 7(e) and shall not affect or prejudice the
status (under subsections 7(e) or any other provision of the
Agreement) of any event or transaction other than as specifically
set forth herein. We understand and agree that this letter may
be relied on by Interpublic and shall be binding upon the Bank
(as defined in the Agreement), any successor to or transferee or
assignee of the Bank and any Participant (as defined in
subsection 8.3 of the Agreement).
Very truly yours,
By
Yoshihiko Shiotsugu
Vice President & Manager
Accepted and Agreed to by:
The Interpublic Group of Companies, Inc.
By
Alan M. Forster
Vice President & Treasurer
- 2 -
<PAGE>
AMENDMENT NO. 2 TO CREDIT AGREEMENT
AMENDMENT, dated as of October 5, 1993 to the Credit Agreement
dated as of September 30, 1992 which was effective as of December
30, 1992 (the "Agreement") and amended as of April 30, 1993
between THE INTERPUBLIC GROUP OF COMPANIES, INC. (the "Borrower")
and The Bank of New York (the "Bank").
The parties hereto desire to amend the Agreement subject to
the terms and conditions of this Amendment, as hereinafter
provided. Accordingly, the parties hereto agree as follows:
1. Definitions. Unless otherwise specifically defined
herein, each term used herein which is defined in the Agreement
shall have the meaning assigned to such term in the Agreement.
Each reference to "hereof", "hereunder", "herein" and "hereby"
and each other similar reference and each reference to "this
Agreement" and each other similar reference contained in the
Agreement and in each of the documents relating to the Agreement
shall from and after the date hereof refer to the Agreement as
amended hereby.
2. Amendments.
A. The definition of "Debt" set forth in Section 1.1 of the
Agreement is hereby amended to read in its entirety as follows:
"Debt" of any Person means at any date, without
duplication, (i) all obligations of such Person for borrowed
money, including reimbursement obligations for letters of credit,
(ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all
obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in
the ordinary course of business, (iv) all obligations of such
Person as lessee under capital leases, (v) all Debt of others
secured by a Lien on any asset of such Person, whether or not
such Debt is assumed by such Person, and (vi) all debt of others
Guaranteed by such Person, but in each case specified in (i)
through (vi) excludes obligations arising in connection with
securities repurchase transactions.
- 1 -
PAGE
<PAGE>
B. The definition of "Total Borrowed Funds" set forth in
Section 1.1 of the Agreement is hereby amended to read in its
entirety as follows:
"Total Borrowed Funds" means at any date, without
duplication, (i) all outstanding obligations of the Borrower
and its Consolidated Subsidiaries for borrowed money, (ii) all
outstanding obligations of the Borrower and its Consolidated
Subsidiaries evidenced by bonds, debentures, notes or similar
instruments and (iii) any outstanding obligations of the type
set forth in (i) or (ii) of any other Person Guaranteed by the
Borrower and its Consolidated Subsidiaries, it being
understood that the obligation to repurchase securities
transferred pursuant to a securities repurchase agreement
shall not be deemed to give rise to any amount of Total
Borrowed Funds pursuant to this definition.
C. Section 6.9 of the Agreement is hereby amended by deleting
the word "and" at the end of Section 6.9 (i), deleting the period
at the end of Section 6.9 (j) and inserting a semicolon and the
word "and" in its place, and adding the following new paragraph
immediately thereafter:
"(k) any Lien on property arising in connection with a
securities repurchase transaction."
D. Section 7(e) of the Agreement is hereby amended by adding
the following provision after the reference to "$10,000,000"
therein:
"and provided further that it is understood that the
obligations referred to herein exclude those obligations
arising in connection with securities repurchase
transactions".
3. Agreement as Amended. Except as expressly amended hereby,
the Agreement shall continue in full force and effect in
accordance with the terms thereof.
4. Governing Law. This Amendment, and the Agreement as
amended hereby, shall be construed in accordance with and
governed by the laws of the State of New York.
5. Severability. In case any one or more of the provisions
contained in this Amendment should be invalid, illegal or
unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
- 2 -
PAGE
<PAGE>
6. Counterparts. This Amendment may be executed in any
number of counterparts, each of which shall constitute an
original but all of which when taken together shall constitute
one and the same instrument.
7. Effectiveness. This Amendment shall become effective as
of the date first above written upon receipt by the Bank of
counterparts hereof executed by each of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their duly authorized officers as of
the day and year first above written.
THE INTERPUBLIC GROUP OF COMPANIES,INC.
By:
Name: Alan M. Forster
Title: Vice President & Treasurer
THE BANK OF NEW YORK
By:
Name: Howard F. Bascom, Jr.
Title: Vice President
- 3 -
<PAGE>
Letterhead of The Bank of New York
[Interpublic]
Ladies and Gentlemen:
We refer to the Credit Agreement, dated as of September 30,
1992 and effective as of December 30, 1992 between The
Interpublic Group of Companies, Inc. ("Interpublic") and The Bank
of New York (the "Agreement").
We understand that Interpublic is contemplating entering into
one or more transactions in which it would purchase United States
Treasury securities with a remaining term to maturity of 90 days
or less and simultaneously enter into a repurchase transaction
with respect to such securities with a securities broker/dealer.
You have advised us that (a) all or substantially all of the
initial purchase price for these Treasury securities would be
paid directly from the proceeds of the repurchase transaction,
(b) the Treasury securities would not be included in a balance
sheet of Interpublic prepared in accordance with generally
accepted accounting principles in the United States and (c) the
face amount of the Treasury securities involved would at no time
exceed 15% of Interpublic's consolidated total assets (as
reported on the audited statement of financial condition most
recently filed with the Securities and Exchange Commission by
Interpublic prior to the inception of such a transaction). A
transaction of the type described in this paragraph is referred
to herein as a "Transaction".
You have asked us to confirm, and we do hereby irrevocably
confirm, that a Transaction of the type described above would not
be deemed to constitute or to give rise to an "obligation for
money borrowed (or...capitalized lease obligation...obligation
under a purchase money mortgage, conditional sale or other title
retention agreement or...obligation under notes payable or drafts
accepted representing extensions of credit)" as those terms are
used in subsection 7(e) of the Agreement. To further effect our
mutual understanding set forth herein, we agree pursuant to
subsection 8.2(a) of the Agreement that no event occurring in
connection with a Transaction will be deemed to give rise to an
Event of Default (as defined in the Agreement) under subsection
7(e) of the Agreement, and the Agreement will be deemed to be
amended accordingly.
- 1 -
PAGE
<PAGE>
This letter shall not affect any provision of the Agreement
other than subsections 7(e) and shall not affect or prejudice the
status (under subsections 7(e) or any other provision of the
Agreement) of any event or transaction other than as specifically
set forth herein. We understand and agree that this letter may
be relied on by Interpublic and shall be binding upon the Bank
(as defined in the Agreement), any successor to or transferee or
assignee of the Bank and any Participant (as defined in
subsection 8.3 of the Agreement).
Very truly yours,
By
Howard F. Bascom, Jr.
Vice President
Accepted and Agreed to by:
The Interpublic Group of Companies, Inc.
By
Alan M. Forster
Vice President & Treasurer
- 2 -
<PAGE>
AMENDMENT NO. 2 TO CREDIT AGREEMENT
AMENDMENT, dated as of October 5, 1993 to the Credit Agreement
dated as of September 30, 1992 which was effective as of December
18, 1992 (the "Agreement") and amended as of April 30, 1993
between THE INTERPUBLIC GROUP OF COMPANIES, INC. (the "Borrower")
and Swiss Bank Corporation (the "Bank").
The parties hereto desire to amend the Agreement subject to
the terms and conditions of this Amendment, as hereinafter
provided. Accordingly, the parties hereto agree as follows:
1. Definitions. Unless otherwise specifically defined
herein, each term used herein which is defined in the Agreement
shall have the meaning assigned to such term in the Agreement.
Each reference to "hereof", "hereunder", "herein" and "hereby"
and each other similar reference and each reference to "this
Agreement" and each other similar reference contained in the
Agreement and in each of the documents relating to the Agreement
shall from and after the date hereof refer to the Agreement as
amended hereby.
2. Amendments.
A. The definition of "Debt" set forth in Section 1.1 of the
Agreement is hereby amended to read in its entirety as follows:
"Debt" of any Person means at any date, without
duplication, (i) all obligations of such Person for borrowed
money, including reimbursement obligations for letters of credit,
(ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all
obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in
the ordinary course of business, (iv) all obligations of such
Person as lessee under capital leases, (v) all Debt of others
secured by a Lien on any asset of such Person, whether or not
such Debt is assumed by such Person, and (vi) all debt of others
Guaranteed by such Person, but in each case specified in (i)
through (vi) excludes obligations arising in connection with
securities repurchase transactions.
- 1 -
PAGE
<PAGE>
B. The definition of "Total Borrowed Funds" set forth in
Section 1.1 of the Agreement is hereby amended to read in its
entirety as follows:
"Total Borrowed Funds" means at any date, without
duplication, (i) all outstanding obligations of the Borrower
and its Consolidated Subsidiaries for borrowed money, (ii) all
outstanding obligations of the Borrower and its Consolidated
Subsidiaries evidenced by bonds, debentures, notes or similar
instruments and (iii) any outstanding obligations of the type
set forth in (i) or (ii) of any other Person Guaranteed by the
Borrower and its Consolidated Subsidiaries, it being
understood that the obligation to repurchase securities
transferred pursuant to a securities repurchase agreement
shall not be deemed to give rise to any amount of Total
Borrowed Funds pursuant to this definition.
C. Section 6.9 of the Agreement is hereby amended by deleting
the word "and" at the end of Section 6.9 (i), deleting the period
at the end of Section 6.9 (j) and inserting a semicolon and the
word "and" in its place, and adding the following new paragraph
immediately thereafter:
"(k) any Lien on property arising in connection with a
securities repurchase transaction."
D. Section 7(e) of the Agreement is hereby amended by adding
the following provision after the reference to "$10,000,000"
therein:
"and provided further that it is understood that the
obligations referred to herein exclude those obligations
arising in connection with securities repurchase
transactions".
3. Agreement as Amended. Except as expressly amended hereby,
the Agreement shall continue in full force and effect in
accordance with the terms thereof.
4. Governing Law. This Amendment, and the Agreement as
amended hereby, shall be construed in accordance with and
governed by the laws of the State of New York.
5. Severability. In case any one or more of the provisions
contained in this Amendment should be invalid, illegal or
unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
- 2 -
PAGE
<PAGE>
6. Counterparts. This Amendment may be executed in any
number of counterparts, each of which shall constitute an
original but all of which when taken together shall constitute
one and the same instrument.
7. Effectiveness. This Amendment shall become effective as
of the date first above written upon receipt by the Bank of
counterparts hereof executed by each of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their duly authorized officers as of
the day and year first above written.
THE INTERPUBLIC GROUP OF COMPANIES, INC.
By:
Name: Alan M. Forster
Title: Vice President & Treasurer
SWISS BANK CORPORATION
By:
Name: Jane A. Majeski
Title: Director, Merchant Banking
Name: Dominic J. Sorresso
Title: Associate Director,
Merchant Banking
- 3 -
<PAGE>
Letterhead of Swiss Bank Corporation
[Interpublic]
Ladies and Gentlemen:
We refer to the Credit Agreement, dated as of September 30,
1992 and effective as of December 12, 1992 between The
Interpublic Group of Companies, Inc. ("Interpublic") and Swiss
Bank Corporation (the "Agreement").
We understand that Interpublic is contemplating entering into
one or more transactions in which it would purchase United States
Treasury securities with a remaining term to maturity of 90 days
or less and simultaneously enter into a repurchase transaction
with respect to such securities with a securities broker/dealer.
You have advised us that (a) all or substantially all of the
initial purchase price for these Treasury securities would be
paid directly from the proceeds of the repurchase transaction,
(b) the Treasury securities would not be included in a balance
sheet of Interpublic prepared in accordance with generally
accepted accounting principles in the United States and (c) the
face amount of the Treasury securities involved would at no time
exceed 15% of Interpublic's consolidated total assets (as
reported on the audited statement of financial condition most
recently filed with the Securities and Exchange Commission by
Interpublic prior to the inception of such a transaction). A
transaction of the type described in this paragraph is referred
to herein as a "Transaction".
You have asked us to confirm, and we do hereby irrevocably
confirm, that a Transaction of the type described above would not
be deemed to constitute or to give rise to an "obligation for
money borrowed (or...capitalized lease obligation...obligation
under a purchase money mortgage, conditional sale or other title
retention agreement or...obligation under notes payable or drafts
accepted representing extensions of credit)" as those terms are
used in subsection 7(e) of the Agreement. To further effect our
mutual understanding set forth herein, we agree pursuant to
subsection 8.2(a) of the Agreement that no event occurring in
connection with a Transaction will be deemed to give rise to an
Event of Default (as defined in the Agreement) under subsection
7(e) of the Agreement, and the Agreement will be deemed to be
amended accordingly.
- 1 -
PAGE
<PAGE>
This letter shall not affect any provision of the Agreement
other than subsections 7(e) and shall not affect or prejudice the
status (under subsections 7(e) or any other provision of the
Agreement) of any event or transaction other than as specifically
set forth herein. We understand and agree that this letter may
be relied on by Interpublic and shall be binding upon the Bank
(as defined in the Agreement), any successor to or transferee or
assignee of the Bank and any Participant (as defined in
subsection 8.3 of the Agreement).
Very truly yours,
By
Jane A. Majeski
Director, Merchant Banking
By
Dominic J. Sorresso
Associate Director,
Merchant Banking
Accepted and Agreed to by:
The Interpublic Group of Companies, Inc.
By
Alan M. Forster
Vice President & Treasurer
- 2 -
<PAGE>
AMENDMENT NO. 3 TO NOTE PURCHASE AGREEMENT DATED AS OF AUGUST 20,
1991 BY AND AMONG THE INTERPUBLIC GROUP OF COMPANIES, INC.,
MCCANN-ERICKSON ADVERTISING OF CANADA LTD., MACLAREN:LINTAS INC.,
THE PRUDENTIAL PROPERTY AND CASUALTY INSURANCE COMPANY AND THE
PRUDENTIAL INSURANCE COMPANY OF AMERICA
AMENDMENT No. 3, dated as of November 17, 1993 to a Note
Purchase Agreement dated as of August 20, 1991 (the "Note
Purchase Agreement") by and among The Interpublic Group of
Companies, Inc. (the "Company"), McCann-Erickson Advertising of
Canada Ltd., MacLaren:Lintas, Inc., The Prudential Insurance
Company of America and Prudential Property and Casualty Insurance
Company.
The parties hereto desire to amend the Note Purchase Agreement
subject to the terms and conditions of this Amendment, as
hereinafter provided. Accordingly, the parties hereto agree as
follows:
1. Definitions. Unless otherwise specifically defined
herein, each term used herein which is defined in the Note
Purchase Agreement shall have the meaning assigned to such term
in the Note Purchase Agreement. Each reference to "hereof",
"hereunder", "herein" and "hereby" and each other similar
reference and each reference to "this Note Purchase Agreement"
and each other similar reference contained in the Note Purchase
Agreement shall from and after the date hereof refer to the Note
Purchase Agreement as amended hereby.
2. Amendments.
A. Section 6D of the Note Purchase Agreement is hereby
amended by deleting the word "and" at the end of Section 6D (IX),
renumbering clause 6D(X) so that it becomes 6D(XI), and adding a
new provision immediately preceding the renumbered 6D(XI) to read
in its entirety as follows:
"(X) any Lien on property arising in connection with a
securities repurchase transaction; and"
- 1 -
PAGE
<PAGE>
B. The definition of "Debt" set forth in Section 11B of the
Note Purchase Agreement is hereby amended to read in its entirety
as follows:
"Debt" shall mean as to any Person without duplication,
(i) all obligations of such Person for borrowed money,
including reimbursement obligations for letters of credit,
(ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all
obligations of such Person to pay the deferred purchase price
of property or services, except trade accounts payable arising
in the ordinary course of business, (iv) all Capitalized Lease
Obligations of such Person, (v) all Debt of others secured by
a Lien on any asset of such Person, whether or not such Debt
is assumed by such Person, and (vi) all Debt of others
Guaranteed by such Person, provided, however, that the
obligations specified in (i) through (vi) shall not include
obligations arising in connection with securities repurchase
transactions.
C. The definition of "Total Borrowed Funds" set forth in
Section 11B of the Note Purchase Agreement is hereby amended to
read in its entirety as follows:
"Total Borrowed Funds" shall mean at any date, without
duplication, (i) all outstanding obligations of the Company
and its Consolidated Subsidiaries for borrowed money, (ii) all
outstanding obligations of the Company and its Consolidated
Subsidiaries evidenced by bonds, debentures, notes or similar
instruments and (iii) any outstanding obligations of the type
set forth in (i) or (ii) of any other Person Guaranteed by the
Company or a Consolidated Subsidiary; provided, however, that
Total Borrowed Funds shall not include any obligation to
repurchase securities under a securities repurchase
transaction.
3. Miscellaneous. Except as specifically amended above, the
Note Purchase Agreement shall remain in full force and effect.
4. Governing Law. This Amendment shall be construed and
enforced in accordance with, and the rights of the parties shall
be governed by, the law of the State of New York.
5. Counterparts, This Amendment may be signed in any number
of counterparts, each of which shall be an original, with the
same effect as if the signatures thereto and hereto were upon the
same instrument.
- 2 -
PAGE
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the date first above written.
Very truly yours,
THE INTERPUBLIC GROUP OF
COMPANIES, INC.
By: Alan M. Forster
Title: Vice President &
Treasurer
McCANN-ERICKSON ADVERTISING
OF CANADA LTD.
By: Thomas B. Beckett
Title: Senior Vice President
Chief Financial Officer
MACLAREN:LINTAS INC.
By: Thomas B. Beckett
Title: Chief Financial Officer
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: Gail McDermott
Title: Vice President
PRUDENTIAL PROPERTY AND CASUALTY
INSURANCE COMPANY
By: Gail McDermott
Title: Vice President
- 3 -
<PAGE>
(Prudential Letterhead)
[Interpublic]
Ladies and Gentlemen:
We refer to the Note Purchase Agreement, dated as of August
20, 1991, between The Interpublic Group of Companies, Inc.
("Interpublic"), McCann-Erickson Advertising of Canada Ltd. and
MacLaren: Lintas Inc. and each of the institutions addressed
therein (the "Agreement").
We understand that Interpublic is contemplating entering into
one or more transactions in which it would purchase United States
Treasury securities with a remaining term to maturity of 90 days
or less and simultaneously enter into a repurchase transaction
with respect to such securities with a securities broker/dealer.
You have advised us that (a) all or substantially all of the
initial purchase price for these Treasury securities would be
paid directly from the proceeds of the repurchase transaction,
(b) the Treasury securities would not be included in a balance
sheet of Interpublic prepared in accordance with generally
accepted accounting principles in the United States and (c) the
face amount of the Treasury securities involved would at no time
exceed 15% of Interpublic's consolidated total assets (as
reported on the audited statement of financial condition most
recently filed with the Securities and Exchange Commission by
Interpublic prior to the inception of such a transaction). A
transaction of the type described in this paragraph is referred
to herein as a "Transaction".
You have asked us to confirm, and we do hereby irrevocably
confirm, that a Transaction of the type described above would not
be deemed to constitute or to give rise to an "obligation for
money borrowed (or...Capitalized Lease Obligation...obligation
under a purchase money mortgage, conditional sale or other title
retention agreement or...obligation under notes payable or drafts
accepted representing extensions of credit)" as those terms are
used in subsection 8A(iii) of the Agreement. To further effect
our mutual understanding set forth herein, we agree pursuant to
subsection 12C of the Agreement that no event occurring in
connection with a Transaction will be deemed to give rise to an
Event of Default (as defined in the Agreement) under subsection
8A(iii) of the Agreement, and the Agreement will be deemed to be
amended accordingly.
- 1 -
PAGE
<PAGE>
This letter shall not affect any provision of the Agreement
other than subsection 8A(iii) and shall not affect or prejudice
the status (under subsection 8A(iii) or any other provision of
the Agreement) of any event or transaction other than as
specifically set forth herein. We understand and agree that this
letter may be relied on by Interpublic and shall be binding upon
each holder of any Note (as defined in the Agreement) now or
hereafter outstanding.
Very truly yours,
The Prudential Insurance Company
of America
By: Gail McDermott
Title: Vice President
Prudential Property and Casualty
Insurance Company
By: Gail McDermott
Title: Vice President
Accepted and Agreed To:
The Interpublic Group of Companies, Inc.
By: Alan M. Forster
Title: Vice President & Treasurer
McCann-Erickson Advertising of Canada, Ltd.
By: Thomas B. Beckett
Title: Senior Vice President
Chief Financial Officer
MacLaren:Lintas Inc.
By: Erwin Buck
Title: Chief Financial Officer
- 2 -
<PAGE>
THIS SUPPLEMENTAL AGREEMENT is made the 27th day of October 1993.
BETWEEN
(1) LOWE INTERNATIONAL LIMITED as a borrower (the "Company");
(2) LOWE WORLDWIDE HOLDINGS B.V. AND LOWE & PARTNERS INC. as
borrowers (the "Original Subsidiary Borrowers").
(3) LLOYDS BANK PLC as arranger (the "Arranger");
(4) LLOYDS BANK PLC as agent (the "Agent");
(5) THE FINANCIAL INSTITUTIONS named in the First Schedule
(together the "Banks", each a "Bank"), and
(6) THE INTERPUBLIC GROUP OF COMPANIES, INC. as guarantor
(the "Guarantor").
WHEREAS:
(A) This Supplemental Agreement is supplemental to a
Multicurrency Revolving Credit Facility Agreement (the
"Facility Agreement") dated 17th December 1991 as amended
in the Supplemental Agreement dated 17th December 1992
and as amended in the Supplemental Agreement dated 30th
June 1993.
(B) The Guarantor entered into a guarantee (the "Guarantee")
dated 17th December 1991 as amended in Amendment No. 1
dated 18th December 1992, Amendment No. 2 dated 30 June
1993 and Amendment No. 3 dated 27 October 1993 with
Lloyds Bank Plc as agent for the Beneficiaries of the
Guarantee, guaranteeing the payment obligations of the
Borrowers under the Facility Agreement.
(C) The parties hereto have agreed to the amendment of the
Facility Agreement to the extent set out in this
Supplemental Agreement.
(D) The Available Facility was reduced from 48,000,000 Pounds
Sterling to 15,000,000 Pounds Sterling with effect from
27th May 1992.
(E) Manufacturers Hanover Trust Co. transferred 500,000
Pounds Sterling to each of the Banks named in the First
Schedule in accordance with clause 34.3 of the Facility
Agreement on 28th May 1992.
- 1 -
PAGE
<PAGE>
NOW IT IS HEREBY AGREED AS FOLLOWS:
1. Interpretation
1.1 Unless the context otherwise requires and save as
mentioned below, words and expression defined in, or to
be construed in accordance with, the Facility Agreement
shall have the same meaning and construction when used in
this Supplemental Agreement.
1.2 In this Supplemental Agreement (unless the context
otherwise requires) references to clauses are to clauses
of this Supplemental Agreement.
2. Amendments to the Facility Agreement
2.1 The Facility Agreement shall, with effect from the date
of this Supplemental Agreement be amended as follows:-
(a) in Clause 1.1 by adding the following at the end of the
definition of "Debt", immediately following the words
"but excludes Debt owing to another member of the Group"
and before the semicolon:
"and obligations arising in connection with
securities repurchase transactions."
(b) in Clause 21.2(v) by inserting the word "Debt"
immediately prior to the words "obligation" and
"obligations" each time such words appear.
3. Counterparts
This Supplemental Agreement may be executed in any number of
counterparts and by the different parties hereto in separate
counterparts, each of which, when executed and delivered,
shall constitute one and the same instrument.
4. Law
This Supplemental Agreement shall be governed by and construed
and interpreted in accordance with the Laws of England.
- 2 -
PAGE
<PAGE>
I N W I T N E S S whereof this Supplemental Agreement has been
duly executed by
the parties hereto the day and year first above written.
THE FIRST SCHEDULE
The Banks
Dresdner Bank Aktiengesellschaft, London Branch
The Fuji Bank Limited, London Branch
Lloyds Bank Plc
Midland Bank Plc
Union Bank of Switzerland
The Borrowers
LOWE INTERNATIONAL LIMITED
By: D. Coleman
LOWE WORLDWIDE HOLDINGS B.V.
By: F. Bergman
LOWE & PARTNERS, INC.
By: J. Carmichael
The Guarantor
THE INTERPUBLIC GROUP OF COMPANIES, INC.
By: A. Forster
The Arranger/Agent
LLOYDS BANK PLC
By: L. Tinsley
- 3 -
PAGE
<PAGE>
The Banks
DRESDNER BANK AKTIENGESELLSCHAFT, LONDON BRANCH
By: D. Stewart & R. Bates
THE FUJI BANK, LIMITED, LONDON BRANCH
By: G. Holgate
LLOYDS BANK PLC
By: S. Lawton
MIDLAND BANK PLC
By: B. Mayer
UNION BANK OF SWITZERLAND
By: C. Waltenspuel & S. Attwood
- 4 -
<PAGE>
AMENDMENT NO. 3 TO
GUARANTEE BETWEEN THE INTERPUBLIC
GROUP OF COMPANIES, INC. AND
LLOYDS BANK PLC
AMENDMENT No. 3, dated as of 27 October 1993 to a Guarantee
dated December 17, 1991 between The Interpublic Group of
Companies, Inc. (the "Guarantor") and Lloyds Bank Plc (the
"Agent"), as previously amended by an Amendment No. 1 dated as of
December 18, 1992 and as amended by Amendment No. 2, dated as of
June 30, 1993 (The "Guarantee").
The parties hereto desire to amend the Guarantee subject to
the terms and conditions of this Amendment, as hereinafter
provided. Accordingly, the parties hereto agree as follows:
1. Definitions. Unless otherwise specifically defined
herein, each term used herein which is defined in the Guarantee
shall have the meaning assigned to such term in the Guarantee.
Each reference to "hereof", "hereunder", "herein" and "hereby"
and each other similar reference and each reference to "this
Guarantee" and each other similar reference contained in the
Guarantee shall from and after the date hereof refer to the
Guarantee as amended hereby.
2. Amendments.
A. The definition of "Debt" set forth in Section 1.2 of the
Guarantee is hereby amended to read in its entirety as follows:
"Debt" of any person means at any date, without
duplication: (i) all obligations of such person for
indebtedness, including reimbursement obligations for letters
of credit; (ii) all obligations of such person evidenced by
bonds, debentures, notes or other similar instruments; (iii)
all obligations of such person to pay the deferred purchase
price of property or services, except trade accounts payable
arising in the ordinary course of business; (iv) all
obligations of such person as lessee under capitalized leases;
(v) all Debt of others secured by a lien on any asset of such
person, whether or not such Debt is assumed by such person;
and (vi) all Debt of others guaranteed by such person; but in
each case specified in (i) through (vi) herein, excludes
obligations arising in connection with securities repurchase
transactions.
- 1 -
PAGE
<PAGE>
B. The definition of "Total Borrowed Funds" set forth in
Section 5.2 (iii) of the Guarantee is hereby amended to read in
its entirety as follows:
"Total Borrowed Funds" means at any date, without
duplication, (a) all outstanding obligations of the Guarantor
and its Consolidated Subsidiaries for borrowed money, (b) all
outstanding obligations of the Guarantor and its Consolidated
Subsidiaries evidenced by bonds, debentures, notes or similar
instruments and (c) any outstanding obligations of the type
set forth in (a) or (b) of any other Person guaranteed by the
Guarantor or a Consolidated Subsidiary, it being understood
that the obligation to repurchase securities transferred
pursuant to a securities repurchase agreement shall not be
deemed to give rise to any amount of Total Borrowed Funds
pursuant to this definition.
C. Section 7.1 of the Guarantee is hereby amended by deleting
the word "and" at the end of Section 7.1 (x), deleting the
reference to "(xi)" and replacing it with "(xii)" and adding the
following new paragraph immediately after 7.1 (x):
"(xi) any Lien on property arising in connection
with a securities repurchase transaction; and"
Section 3. Limitation of Amount. The Guarantor hereby
agrees that the face amount of the securities involved in any
repurchase transaction referred to herein would at no time exceed
15% of the Guarantor's consolidated total assets as reported on
the audited statement of financial condition most recently filed
with the Securities and Exchange Commission prior to the
inception of such transaction.
Section 4. Miscellaneous. Except as specifically amended as
set forth above, the Guarantee shall remain in full force and
effect.
Section 5. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the law of the State of New
York.
Section 6. Counterparts. This Amendment may be signed in any
number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon
the same instrument.
- 2 -
PAGE
<PAGE>
IN WITNESS WHEREOF the parties hereto have caused this Amendment
to be duly executed and is intended to be effective as of the
date first above written.
THE INTERPUBLIC GROUP OF COMPANIES, INC.
By: Alan M. Forster
Title: Vice President & Treasurer
LLOYDS BANK Plc
as Agent
By: Michael Dutfield
Title: Manager
- 3 -
<PAGE>
<TABLE>
EXHIBIT 11
<CAPTION>
THE INTERPUBLIC GROUP OF COMPANIES, INC.
COMPUTATION OF EARNINGS PER SHARE <F1>
(Dollars in Thousands Except Per Share Data)
Year Ended December 31
1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
PRIMARY:
Net Income before effect of
accounting changes $125,279 $111,913 $94,557 $80,064 $70,600
Effect of accounting
changes (512) (24,640) - - -
Add: Dividends paid
net of related income
tax applicable to the
Restricted Stock Plan 311 365 282 166 114
Net income, as adjusted $125,078 $ 87,638 $94,839 $80,230 $70,714
Weighted average number
of common shares
outstanding 72,607,363 72,168,964 70,440,108 65,186,536 65,272,576
Weighted average number of
incremental shares in
connection with assumed
exercise of stock options
based on the treasury stock
method using average market
price 1,088,155 1,321,447 631,682 507,860 512,132
PAGE
<PAGE>
Weighted average number
of incremental shares
in connection with
the Restricted Stock
Plan based on the
treasury stock method
using average unamortized
deferred compensation and
average market price 1,520,003 1,484,207 1,788,296 1,654,280 1,548,722
Total 75,215,521 74,974,618 72,860,086 67,348,676 67,333,430
Primary earnings per common and
common equivalent share $1.66 $1.17 $1.30 $1.19 $1.05
<FN>
<F1> Restated to reflect the two-for-one stock split effected in June 1992 in the form of a 100%
stock dividend and the three-for-two stock split effected in June 1989 in the form of a 50%
stock dividend.
- 1 -
</TABLE>
PAGE
<PAGE>
<TABLE>
EXHIBIT 11
<CAPTION>
THE INTERPUBLIC GROUP OF COMPANIES, INC.
COMPUTATION OF EARNINGS PER SHARE <F2>
(Dollars in Thousands Except Per Share Data)
Year Ended December 31
1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
FULLY DILUTED:
Net Income before effect
of accounting changes $ 125,279 $ 111,913 $ 94,557 $ 80,064 $ 70,600
Effect of accounting changes (512) (24,640) - - -
After tax interest savings
on assumed conversion
of subordinated debentures 5,941 4,385 - - -
Add: Dividends paid
net of related income
tax applicable to the
Restricted Stock Plan 330 375 308 192 138
Net income, as adjusted $ 131,038 $ 92,033 $ 94,865 $ 80,256 $ 70,738
Weighted average number
of common shares
outstanding 72,607,363 72,168,964 70,440,108 65,186,536 65,272,576
Assumed conversion of
subordinated debentures 3,002,130 2,251,598 - - -
Weighted average number
of incremental shares
in connection with
assumed exercise of
stock options based on
year-end market price
when higher than
average market prices
and market prices
on dates of exercise
and termination 1,097,745 1,333,738 743,142 587,928 568,478
PAGE
<PAGE>
Weighted average number
of incremental shares
in connection with the
Restricted Stock Plan
based on ending
unamortized deferred
compensation and ending
or average market price,
whichever is higher 1,598,026 1,525,738 1,929,348 1,816,944 1,715,020
Total 78,305,264 77,280,038 73,112,598 67,591,408 67,556,074
Fully diluted earnings
per common and common
equivalent share $1.67 $1.19 $1.30 $1.19 $1.05
<FN>
<F2> Restated to reflect the two-for-one stock split effected in June 1992 in the form of a 100%
stock dividend and the three-for-two stock split effected in June 1989 in the form of a 50%
stock dividend.
- 2 -
</TABLE>
<PAGE>
THE INTERPUBLIC GROUP OF COMPANIES, INC.
The Interpublic Group of Companies is one of the largest organizations of
advertising agencies in the world. It includes the parent company, The
Interpublic Group of Companies, Inc., McCann-Erickson Worldwide,
Lintas:Worldwide, The Lowe Group and Dailey & Associates. The Interpublic
Group employs more than 17,000 people and maintains offices in over 90
countries.
TABLE OF CONTENTS
Financial Highlights 1
Chairman's Report to Stockholders 2
E C Television 4
Financial Statements 5
Board of Directors and Executive Officers 31
Stockholders' Information 32
NOTE: All references to page numbers in this Exhibit 13 are page numbers
appearing in the paper version of the Annual Report of the Company at
and for the period ended December 31, 1993.
PAGE
<PAGE>
FINANCIAL HIGHLIGHTS
(Dollars in Thousands Except Per Share Data)
______________________________________________________________________
Percent
1993 1992 Increase
(Decrease)
Operating Data
Gross income $1,793,856 $1,855,971 (3.3)
Income before effect of
accounting changes 125,279 111,913 11.9
Per common and common
equivalent share 1.67 1.50 11.3
Net income 124,767 87,273 43.0
Per common and common
equivalent share 1.66<F2> 1.17<F1> 41.9
Cash dividends per share .49 .45 8.9
Weighted average number
of shares 75,215,521 74,974,618 0.3
Financial Position
Working capital $ 167,175 $ 224,534 (25.5)
Total assets 2,869,817 2,623,345 9.4
Stockholders' equity per share:
Before effect of
accounting changes 7.54 7.14 5.6
After effect of
accounting changes 7.54<F2> 6.81<F1> 10.7
Return on stockholders' equity:
Before effect of
accounting changes 23.3% 19.1% 22.0
After effect of
accounting changes 23.2%<F2> 15.4%<F1> 50.6
KEY INDICATORS<F3>
Gross Income<F3>
1993 $1,793,856
1992 $1,855,971 1990 $1,368,169
1991 $1,677,498 1989 $1,256,854
______________________________________________________________________
Earnings per Share<F3>
1993 $ 1.67/1.66<F2>
1992 $ 1.50/1.17<F1> 1990 $ 1.19
1991 $ 1.30 1989 $ 1.05
______________________________________________________________________
Cash Dividends per Share<F3>
1993 $ .49
1992 $ .45 1990 $ .37
1991 $ .41 1989 $ .32
______________________________________________________________________
Return on Stockholders' Equity<F3>
1993 23.3/23.2%<F2>
1992 19.1/15.4%<F1> 1990 20.3%
1991 18.5% 1989 20.2%
<F1> Includes an after-tax charge of $24,640,000 or $.33 per share
for effect of accounting change, FAS 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions."
<F2> Includes a charge of $512,000 or $.01 per share for the
cumulative effect of accounting change, FAS 109, "Accounting
for Income Taxes."
<F3> The information on Gross Income, Earnings Per Share, Cash
Dividends Per Share and Return on Stockholders' Equity is
depicted in graphic form, under the heading "Key Indicators" in
the paper version of the Annual Report.
Note: All data are restated to reflect the two-for-one stock
split effected in June 1992 in the form of a 100% stock
dividend and the three-for-two stock split effected in June
1989 in the form of a 50% stock dividend.
- 1 -PAGE
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Liquidity and Capital Resources
Working capital decreased 25.5% in 1993 after increasing 26.1% in 1992
and 22% in 1991. The decline in working capital in 1993 is primarily
due to the acquisitions of Scali, McCabe, Sloves, Inc. and the
remaining 49% interest in McCann-Erickson Hakuhodo in Japan with short-
term borrowings. The Company intends to refinance a portion of this
debt in early 1994. The increase in 1992 is due principally to the
payment of approximately $34 million of short-term loan facilities with
part of the proceeds from the issuance of the convertible subordinated
debentures. The increase in 1991 is attributable to the increase in
income from operations, the $10 million refinancing of short-term loan
facilities with long-term obligations, more efficient management of
receivables and payables, and working capital of companies acquired
through the issuance of the Company's Common Stock. The ratio of
current assets to current liabilities was relatively consistent each
year at 1.1 to 1.
The Company's principal source of working capital during the three
years has been from operations. In addition, during 1992 the Company
used most of the proceeds from the issuance of convertible subordinated
debentures (approximately $101 million net proceeds) to pay down $57.4
million of its long-term debt and $34 million of short-term borrowings.
In 1991, the Company refinanced $75 million of existing lines of credit
with two $25 million term loans and a portion of a $50 million private
placement. The remaining proceeds of the $50 million private placement
were used to partially refinance two long-term Canadian dollar loans.
- 2 -
PAGE
<PAGE>
During 1993, the Company acquired $37.2 million (1,219,151 shares) of
its own Common Stock for purposes of fulfilling its obligations under
various compensation plans. During 1992 and 1991, $51.9 million
(1,738,329 shares) and $17.1 million (811,942 shares) were acquired,
respectively. Quarterly dividends paid to shareholders were increased
during 1993 from 11.5 cents to 12.5 cents per share, and in 1992 from
10.5 cents to 11.5 cents per share.
The Company's capital expenditures in 1993 were $40.3 million, an
increase of 9% from 1992. Capital expenditures for 1992 were $36.9
million, a decrease of 21% from 1991. The Company's capital
expenditures are typically for furniture and fixtures, leasehold
improvements, and computer and telecommunications equipment. In
addition, the Company purchased a building and land in Frankfurt,
Germany during 1993 for a purchase price of approximately $41.5
million. The purchase was financed with a ten year mortgage, which has
a balance of $32.5 million at December 31, 1993.
The Company and its domestic subsidiaries had credit lines aggregating
$156 million in 1993, $144 million in 1992 and $171 million in 1991.
At December 31, 1993, $17.6 million of these credit lines were
utilized. In 1992, $1.7 million of credit lines were utilized and in
1991 $37 million of credit lines were utilized. Subsidiaries outside
the U.S. had short-term borrowings with local banks aggregating $93
million, $76 million and $110 million at December 31, 1993, 1992 and
1991, respectively. Unused lines of credit available to these
subsidiaries equaled $119 million in 1993, $157 million in 1992 and
$190 million in 1991.
The principal use of the Company's working capital is to provide for
the operating needs of its advertising agencies, which include payments
- 3 -PAGE
<PAGE>
for space or time purchased from various media on behalf of clients.
The Company's practice is to bill and collect from its clients in
sufficient time to pay the amounts due media on a timely basis. Other
uses of working capital include the payment of cash dividends,
acquisitions and capital expenditures. Approximately 66%, 70% and 73%
of the Company's assets at December 31, 1993, 1992 and 1991,
respectively, were outside the United States. Working capital was not
significantly affected by the fluctuation of foreign currencies during
1993, but the continuation of this trend is dependent upon the future
movement of the dollar in relation to foreign currencies. The Company
actively hedges currency exposure to mitigate any negative effect on
working capital.
During 1993, 1992 and 1991, the Company acquired several advertising
agencies with funds provided by existing cash balances and shares of
the Company's Common Stock. Some of these acquisitions provide for
deferred payments which are contingent upon future revenues or profits
of the agencies acquired.
Return on average equity was 23.2%, 15.4% and 18.5% in 1993, 1992 and
1991, respectively. The decrease in 1992 compared to 1991 is mainly
due to the effect of adopting FAS 106 "Employers' Accounting for
Postretirement Benefits Other Than Pensions." Excluding the effect of
FAS 106, return on average equity would have been 19.1% in 1992.
The overall strengthening of the U.S. dollar beginning in the latter
part of 1992 and continuing into 1993 resulted in a net charge of
approximately $26 million and $95 million to the cumulative translation
adjustment account in 1993 and 1992, respectively.
- 4 -PAGE
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations
Worldwide income from commissions and fees decreased 3.6% in 1993,
mainly due to the unfavorable effect of foreign exchange rates,
following increases of 10% in 1992 and 23% in 1991. The U.S. dollar
was considerably stronger in 1993 as compared to 1992, which had a
negative impact on revenue of $105.3 million. The increases in revenue
in 1992 and 1991 resulted from the favorable effects of acquisitions:
Baader-Lang-Behnken in Germany and the Brindfors Group in Scandinavia
in 1992, MPM:Lintas in Brazil in late 1991, and The Lowe Group in late
1990.
Revenue from outside the United States decreased $86.4 million in 1993,
mainly due to unfavorable exchange rates; this follows an increase of
$125.8 million in 1992 mainly due to the effects of the aforementioned
acquisitions, increased advertising expenditures from existing clients,
and net new business. In 1991, revenue from outside the U.S. increased
by $187.9 million, resulting from the consolidation of Lowe for the
full year in 1991 and from the acquisition of Ronnberg & Co. (Sweden),
the MPM Group (Brazil), and a full year's results of ECTV Paris.
Foreign revenue accounted for 67%, 69% and 68% of worldwide revenue in
1993, 1992 and 1991, respectively.
Commissions and fees from domestic operations increased 3.9% in 1993,
8.5% in 1992, and 29% in 1991. The increase in 1993 is largely
attributable to the acquisition of Scali, McCabe, Sloves. The increase
in 1991 is mainly attributable to the consolidation of Lowe's domestic
operations for the full year and to the acquisition of Fremantle
International.
- 5 -PAGE
<PAGE>
Other income increased 4.9% in 1993 and 20.4% in 1992. The increases
are due to interest income, mainly from international operations.
Total costs and expenses worldwide decreased almost 5% in 1993, and
increased 11% in 1992 and 22% in 1991. A significant portion of the
Company's expenses relate to compensation and various employee
incentive and benefit programs which are based principally upon
operating results. Costs and expenses outside the United States
decreased in 1993, following increases in 1992 and 1991. The decrease
in 1993 is attributable to the Company's continuing cost containment
efforts, as well as the impact of foreign currency exchange. The
increases in 1992 and 1991 are in line with the movement of revenue, in
addition to the inclusion in 1991 of production costs of ECTV Paris for
its soap opera "Riviera", and amortization of goodwill on the Lowe
acquisition. Domestic costs increased 1% in 1993, 10% in 1992 and 25%
in 1991.
Interest expense decreased 20.4% in 1993, was flat in 1992 and
increased 78% in 1991. The decrease in 1993 is mainly due to the
effects of foreign currency exchange and the general decline in
interest rates worldwide. The increase in 1991 was mainly due to the
cost of financing various acquisitions, including the full year effect
of the Lowe acquisition financing on 1991's results. In addition,
1991's amount was impacted by interest expense pertaining to Lowe's
operations.
Equity in net income of unconsolidated affiliates decreased in 1993
mainly due to the consolidation of additional subsidiaries in 1993.
This followed an increase in 1992 after a decrease in 1991. The
primary reason for the decrease in 1991 is the consolidation of Lowe
for the full year of 1991. Income applicable to minority
- 6 -PAGE
<PAGE>
interests has increased each of the past three years, due to
corresponding changes in the level of profits at majority owned
companies. The inclusion of the minority interests related to
companies owned by Lowe also contributed to the increase in 1991.
As more fully discussed in Note 8, the Company adopted FAS 106
effective January 1, 1992 and recorded a one-time, after-tax charge of
$24.6 million in 1992.
The effective income tax rates were 43.1% in 1993, 44.1% in 1992 and
47.3% in 1991. The reduction in the effective rate during 1993 and
1992 is due predominantly to the mix of foreign earnings. The Company
changed its accounting for income taxes effective January 1, 1993, as
required by FAS 109, "Accounting for Income Taxes". The impact of
adoption was a $.5 million reduction in net income.
In 1992, the FASB issued FAS 112, "Employers' Accounting for
Postemployment Benefits". Under certain circumstances, this statement
requires accrual accounting of expected costs of providing
postemployment benefits due to an employee's death, disability, or
other termination of active employment other than retirement. This
statement is effective for U.S. and foreign plans for fiscal years
beginning after December 15, 1993. The Company has not adopted FAS 112
in the December 31, 1993 financial statements and based upon
preliminary estimates, the effect of adoption would be approximately
$10-$15 million.
- 7 -
PAGE
<PAGE>
FINANCIAL STATEMENTS
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
DECEMBER 31
(Dollars in Thousands Except Per Share Data)
ASSETS 1993 1992
Current Assets:
Cash and cash equivalents (includes
certificates of deposit: 1993-$94,451;
1992-$77,353) $ 292,268 $ 255,778
Marketable securities, at cost which
approximates market 30,106 34,882
Receivables (less allowance for doubtful
accounts: 1993-$16,834; 1992-$15,559) 1,525,717 1,460,212
Expenditures billable to clients 100,230 112,059
Prepaid expenses and other current assets 54,835 51,849
Total current assets 2,003,156 1,914,780
Other Assets:
Investment in unconsolidated affiliates 28,182 23,683
Deferred taxes on income 38,570 41,070
Other investments and miscellaneous
assets 92,048 64,883
Total other assets 158,800 129,636
Fixed Assets, at cost:
Land and buildings 65,327 28,398
Furniture and equipment 268,387 254,928
333,714 283,326
Less accumulated depreciation 170,998 161,743
162,716 121,583
Unamortized leasehold improvements 53,975 58,863
Total fixed assets 216,691 180,446
Intangible Assets (less accumulated
amortization: 1993-$111,710;
1992-$92,980) 491,170 398,483
Total assets $2,869,817 $2,623,345
The notes on pages 13 to 26 are an integral part of these statements.
- 8 -
PAGE
<PAGE>
FINANCIAL STATEMENTS
INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
DECEMBER 31
(Dollars in Thousands Except Per Share Data)
LIABILITIES AND STOCKHOLDERS' EQUITY 1993 1992
Current Liabilities:
Payable to banks $ 147,075 $ 94,445
Accounts payable 1,428,442 1,331,082
Accrued expenses 183,501 204,028
Accrued income taxes 76,963 60,691
Total current liabilities 1,835,981 1,690,246
Noncurrent Liabilities:
Long-term debt 118,088 94,603
Convertible subordinated debentures 107,997 105,634
Deferred compensation and reserve
for termination allowances 146,774 136,585
Accrued postretirement benefits 44,480 44,000
Other noncurrent liabilities 39,274 24,843
Minority interests in consolidated
subsidiaries 13,208 16,264
Total noncurrent liabilities 469,821 421,929
Stockholders' Equity:
Preferred Stock, no par value
shares authorized: 20,000,000
shares issued: none
Common Stock, $.10 par value
shares authorized: 100,000,000
shares issued:
1993 - 86,299,688;
1992 - 85,182,207 8,630 8,518
Additional paid-in capital 335,340 308,377
Retained earnings 570,267 481,401
Adjustment for minimum pension liability (704) -
Cumulative translation adjustments (116,432) (90,472)
797,101 707,824
Less:
Treasury stock, at cost:
1993 - 11,449,031 shares;
1992 - 10,119,755 shares 208,821 169,374
Unamortized expense of restricted
stock grants 24,265 27,280
Total stockholders' equity 564,015 511,170
Commitments and Contingencies (see notes)
Total Liabilities and Stockholders'
Equity $2,869,817 $2,623,345
The notes on pages 13 to 26 are an integral part of these statements.
- 9 -
PAGE
<PAGE>
FINANCIAL STATEMENTS
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
YEAR ENDED DECEMBER 31
(Dollars in Thousands Except Per Share Data)
1993 1992 1991
Income:
Commissions and fees $1,739,778 $1,804,421 $1,634,670
Other income 54,078 51,550 42,828
Gross income 1,793,856 1,855,971 1,677,498
Costs and Expenses:
Salaries and related expenses 917,185 993,077 880,220
Office and general expenses 618,466 622,515 578,496
Interest 26,445 33,221 33,499
Total costs and expenses 1,562,096 1,648,813 1,492,215
Income before provision for
income taxes and effect of
accounting changes 231,760 207,158 185,283
Provision for Income Taxes:
United States - federal 29,277 23,719 24,740
- state & local 14,289 12,181 11,451
Foreign 56,253 55,435 51,493
Total taxes 99,819 91,335 87,684
Income of consolidated
companies 131,941 115,823 97,599
Income applicable to
minority interests (7,606) (6,728) (5,245)
Equity in net income of
unconsolidated affiliates 944 2,818 2,203
Income before effect of
accounting changes 125,279 111,913 94,557
Effect of accounting changes:
Postretirement benefits - (24,640) -
Income taxes (512) - -
Net Income $ 124,767 $ 87,273 $ 94,557
Per Share Data:
Income before effect of
accounting changes $ 1.67 $ 1.50 $ 1.30
Effect of accounting changes:
Postretirement benefits - (.33) -
Income taxes (.01) - -
Net Income $ 1.66 $ 1.17 $ 1.30
The notes on pages 13 to 26 are an integral part of these statements.
Page - 11 - intentionally omitted.
- 10 -PAGE
<PAGE>
<TABLE> FINANCIAL STATEMENTS
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31
(Dollars in Thousands)
<CAPTION> 1993 1992 1991
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $124,767 $ 87,273 $ 94,557
Adjustments to reconcile net income to cash provided by
operating activities:
Depreciation and amortization of fixed assets 42,537 39,586 36,905
Amortization of intangible assets 18,730 19,573 17,004
Amortization of restricted stock awards 8,837 7,401 9,792
Provision for deferred income taxes (524) 8,179 380
Equity in net income of unconsolidated affiliates (944) (2,817) (2,203)
Income applicable to minority interests 7,606 6,728 5,245
Translation losses 15,513 3,780 5,466
Effect of accounting changes 512 24,640 -
Other (7,647) (8,085) (13,957)
Change in assets and liabilities, net of acquisitions
Receivables (66,374) 20,307 (54,300)
Expenditures billable to clients 15,570 3,570 (14,628)
Prepaid expenses and other assets (29,232) (16,738) (7,151)
Accounts payable and accrued expenses 59,363 (16,497) 7,482
Accrued income taxes 8,576 (5,019) 4,422
Deferred compensation and reserve for termination allowances 5,343 16,572 4,193
Net cash provided by operating activities 202,633 188,453 93,207
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions (76,528) (19,774) (18,618)
Capital expenditures (78,813) (36,928) (46,643)
Proceeds from sales of assets 1,513 2,636 4,799
Net proceeds from sales of marketable securities 2,807 (1,606) 372
Unconsolidated affiliates (9,490) (500) 4,411
Net cash used in investing activities (160,511) (56,172) (55,679)
CASH FLOWS FROM FINANCING ACTIVITIES:
(Decrease) increase in short-term borrowings 35,467 (69,798) 36,655
Proceeds from long-term debt 42,409 113,345 165,994
Payments of long-term debt (15,533) (68,634) (132,348)
Treasury stock acquired (37,153) (51,883) (17,115)
Issuance of Common Stock 19,413 10,414 6,913
Cash dividends (35,901) (32,483) (29,265)
Net cash provided by (used in) financing activities 8,702 (99,039) 30,834
Effect of exchange rates on cash and cash equivalents (14,334) (17,192) (8,064)
Increase in cash and cash equivalents 36,490 16,050 60,298
Cash and cash equivalents at beginning of year 255,778 239,728 179,430
Cash and cash equivalents at end of year $292,268 $255,778 $239,728
<FN>
The notes on pages 13 to 26 are an integral part of these statements.
</TABLE>
- 12 -
PAGE
<PAGE>
<TABLE> FINANCIAL STATEMENTS
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
For The Three-Year Period Ended December 31, 1993
(Dollars in Thousands)
<CAPTION> Unamortized
Additional Cumulative Expense
Common Paid-In Retained Translation Treasury of Restricted
Stock Capital Earnings Adjustments Stock Stock Grants
<S> <C> <C> <C> <C> <C> <C>
Balances, December 31, 1990 $4,049 $238,070 $371,489 $16,497 $ 99,012 $21,388
Net income 94,557
Cash dividends (29,265)
Foreign currency translation
adjustment (12,248)
Awards of Common Stock under
Company Plans:
Achievement Stock Award Plan 133 (94)
1986 Stock Incentive Plan -
Restricted Stock 51 18,729 18,780
Long Term Performance Incentive
Plan 3 508
Employee Stock Purchase
Plan 12 3,390
Exercise of stock options 16 2,715
Purchase of Company's
own stock 17,115
Tax benefit relating to
exercise of stock options 783
Restricted Stock: Forfeitures 821 (554)
Amortization (9,792)
Issuance of shares for acquisitions
and pooling of interests 59 23,065 896 37
Par value of shares issued for
two-for-one stock split 4,191 (4,191)
Balances, December 31, 1991 $8,381<F3>$287,393 $433,486<F3> $ 4,249 $116,891 $29,822
<FN>
<F3> Restated to reflect two-for-one stock split effective June 1992.
The notes on pages 13 to 26 are an integral part of these statements.
</TABLE>
- 13 -
PAGE
<PAGE>
<TABLE> FINANCIAL STATEMENTS
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
For The Three-Year Period Ended December 31, 1993
(Dollars in Thousands)
<CAPTION> Unamortized
Additional Cumulative Expense
Common Paid-In Retained Translation Treasury of Restricted
Stock Capital Earnings Adjustments Stock Stock Grants
<S> <C> <C> <C> <C> <C> <C>
Balances, December 31, 1991 $8,381<F4> $287,393 $433,486<F4> $ 4,249 $116,891 $29,822
Net income before effect of
accounting change 111,913
Effect of accounting change (24,640)
Cash dividends (32,483)
Foreign currency translation
adjustment (94,721)
Awards of Common Stock under Company
Plans:
Achievement Stock Award Plan 291 (124)
1986 Stock Incentive
Plan - Restricted Stock 13 5,457 5,355
Employee Stock Purchase Plan 13 4,298
Exercise of stock options 33 5,093
Purchase of Company's own stock 51,883
Tax benefit relating to
exercise of stock options 977
Restricted Stock: Forfeitures 724 (496)
Amortization (7,401)
Issuance of shares for acquisitions
and pooling of interests 52 4,868 (6,849)
Par value of shares issued for
two-for-one stock split 26 (26)
Balances, December 31, 1992 $8,518 $308,377 $481,401 $(90,472) $169,374 $27,280
<FN>
<F4> Restated to reflect two-for-one stock split effective June 1992.
The notes on pages 13 to 26 are an integral part of these statements.
</TABLE>
- 14 -
PAGE
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE THREE-YEAR PERIOD ENDED DECEMBER 31, 1993
(Dollars in Thousands)
<CAPTION> Unamortized
Additional Cumulative Expense
Common Paid-In Retained Translation Treasury of Restricted
Stock Capital Earnings Other Adjustments Stock Stock Grants
<S> <C> <C> <C> <C> <C> <C> <C>
Balances, December 31, 1992 $8,518 $308,377 $481,401 $ - $(90,472) $169,374 $27,280
Net income before effect of
accounting change 125,279
Effect of accounting change (512)
Cash dividends (35,901)
Foreign currency translation
adjustment (25,960)
Awards of Common Stock under Company
Plans:
Achievement Stock Award Plan 239 (96)
1986 Stock Incentive
Plan - Restricted Stock 14 6,548 (945) 7,507
Employee Stock Purchase Plan 17 4,359
Exercise of stock options 81 12,303
Purchase of Company's own stock 37,153
Tax benefit relating to
exercise of stock options 2,653
Restricted Stock: Forfeitures 3,739 (1,685)
Amortization (8,837)
Issuance of shares for acquisitions 861 (404)
Adjustment for minimum pension
liability (704)
Balances, December 31, 1993 $8,630 $335,340 $570,267 $(704) $(116,432) $208,821 $24,265
<FN>
The notes on pages 13 to 26 are an integral part of these statements.
</TABLE>
- 15 -
PAGE
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation: The consolidated statements include the
accounts of the Company and its subsidiaries, most of which are wholly
owned. The investment in unconsolidated affiliates is carried on the
equity basis.
Translation of Foreign Currencies: Balance sheet accounts are
translated principally at rates of exchange prevailing at the end of
the year except that fixed assets and related depreciation in countries
with highly inflationary economies are translated at rates in effect on
dates of acquisition. Revenue and expense accounts are translated at
average rates of exchange in effect during each year. Translation
adjustments are included as a separate component of stockholders'
equity except for countries with highly inflationary economies, which
are included in current operations.
Commissions, Fees and Costs: Commissions and fees are generally
recognized when media placements appear and production costs are
incurred. Salaries and other agency costs are generally expensed as
incurred.
Depreciation and Amortization: Depreciation is computed principally
using the straight-line method over estimated useful lives of the
related assets, ranging generally from 3 to 20 years for furniture and
equipment and from 10 to 45 years for various component parts of
buildings.
- 16 -PAGE
<PAGE>
Leasehold improvements and rights are amortized over the terms of
related leases. Company policy provides for capitalization of all major
expenditures for renewal and improvements and for current charges to
income for repairs and maintenance.
Intangible Assets: The excess of purchase price over the value of net
tangible assets acquired is being amortized on a straight-line basis
over periods not exceeding 40 years.
Income Taxes: Deferred income taxes reflect the impact of temporary
differences between the amount of assets and liabilities recognized for
financial reporting purposes and such amounts recognized for tax
purposes. No provision has been made for foreign withholding taxes or
United States income taxes which may become payable if the
undistributed earnings of the foreign subsidiaries were paid as
dividends to the Company, since a major portion of these earnings has
been reinvested in working capital and other business needs. The
additional income taxes on that portion of undistributed earnings which
is available for dividends, after utilization of available tax credits,
are not material.
Earnings per Common and Common Equivalent Share: Earnings per share
are based on the weighted average number of common shares outstanding
during each year and, if dilutive, common equivalent shares applicable
to grants under the stock incentive and stock option plans, and
conversion of Convertible Subordinated Debentures.
- 17 -PAGE
<PAGE>
Concentrations of Credit Risk: The Company's clients are in various
businesses, primarily in North America, Latin America, Europe and the
Pacific Region. The Company performs ongoing credit evaluation of its
clients. Reserves for credit losses are maintained at levels
considered adequate by management. The Company invests its excess cash
in deposits with major banks and in money market securities. These
securities typically mature within 90 days and bear minimal risk.
- 18 -PAGE
<PAGE>
NOTE 2: STOCKHOLDERS' EQUITY
In May 1992, the Company's certificate of incorporation was amended to
increase the number of authorized shares of Common Stock from
75,000,000 to 100,000,000.
In June 1992, a two-for-one stock split was effected by the payment of
a 100 percent stock dividend. This split has been reflected
retroactively in the consolidated financial statements. The number of
shares of Common Stock reserved for issuance pursuant to various plans
under which stock is issued was increased by 100 percent. All earnings
per share and outstanding share data included in the consolidated
financial statements and notes thereto have been adjusted to give
effect to the stock split.
The Company has a Preferred Share Rights Plan designed to deter
coercive takeover tactics. Pursuant to this plan, common stockholders
are entitled to purchase 1/100 of a share of preferred stock at an
exercise price of $100 if a person or group acquires or commences a
tender offer for 15% or more of Interpublic's Common Stock. Rights
holders (other than the 15% stockholder) will also be entitled to buy,
for the $100 exercise price, shares of Interpublic's Common Stock with
a market value of $200 in the event a person or group actually acquires
15% or more of Interpublic Common Stock. Rights may be redeemed at
$.01 per right under certain circumstances.
- 19 -
PAGE
<PAGE>
NOTE 3: ACQUISITIONS
During 1993, the Company acquired several advertising agencies and
related companies for an aggregate purchase price of approximately
$88.6 million. The amount includes the acquisition of Scali, McCabe,
Sloves, Inc. effective September 1993 for $49.1 million, which includes
cash payments of $37.8 million, the issuance of 37,625 shares of the
Company's Common Stock, and $10.1 million for deferred payments to be
made in 1994 and 1995. During 1993, the Company acquired the remaining
49% ownership interest in McCann-Erickson Hakuhodo in Japan for $23.6
million. Also in 1993, the Company acquired a 20% interest in Atlantis
Communications, Inc., a Canadian television production company, through
cash payments, conversion of debt to equity and a transfer of the
Canadian rights to the Company's "Riviera" soap opera for a total of
approximately $12.5 million. These acquisitions were accounted for as
purchases. During 1993, the Company made deferred payments of $15.4
million relating to prior year acquisitions.
During 1992, the Company acquired several advertising agencies and
related companies for an aggregate purchase price of approximately $10
million. The amount includes the acquisition of a 51% ownership
interest in JBR Advertising in Norway, an additional 34% ownership
interest in Baader-Lang-Behnken (bringing the Company's ownership to
75%), and the remaining 16.7% ownership interest in Still, Price,
Court, Twivy, D'Souza; Lintas Group Ltd. in the United Kingdom. These
acquisitions were accounted for as purchases. Moreover, during the
second quarter of 1992 the Company made a $9.8 million deferred payment
and issued 161,164 shares of its Common Stock for the 1991 acquisition
of Kuiper & Schouten by The Lowe Group.
- 20 -PAGE
<PAGE>
In October 1992, the Company acquired Brindfors Intressenter AB ("Lowe
Brindfors") in exchange for 442,431 shares of its Common Stock and $1.3
million in cash, which was accounted for as a pooling of interests.
In 1991, the Company paid approximately $26.3 million and issued
1,181,874 shares of its Common Stock to acquire various advertising
agencies, including Ronnberg & Co., located in Sweden, the MPM Group in
Brazil, Long, Haymes & Carr (discussed below), an additional 31%
ownership interest in Fremantle International (bringing the Company's
ownership to 80%), and the remaining 25% ownership interest not already
owned by The Lowe Group ("Lowe") in Lowe Lurzer (Dusseldorf). In
September 1991, the Company issued 312,308 shares of its Common Stock
in exchange for all the issued and outstanding common stock of Long,
Haymes & Carr. This acquisition was accounted for as a pooling of
interests; however, the Company's financial statements were not
restated for prior periods as the Company's consolidated results would
not have changed significantly.
For each of the three years presented, the Company's consolidated
results would not have changed significantly had the revenue and net
income of the companies acquired as purchases been fully included in
each year.
- 21 -
PAGE
<PAGE>
NOTE 4: PROVISION FOR INCOME TAXES
Effective January 1, 1993 the Company adopted FAS 109, "Accounting for
Income Taxes". This statement applies an asset and liability approach
that requires the recognition of deferred tax assets and liabilities
with respect to the expected future tax consequences of events that
have been recognized in the consolidated financial statements and tax
returns.
The components of income before taxes are as follows:
(Dollars in Thousands) 1993 1992 1991
Domestic $ 78,488 $ 60,453 $ 61,413
Foreign 153,272 146,705 123,870
Total $231,760 $207,158 $185,283
The provision for income taxes consists of:
(Dollars in Thousands) 1993 1992 1991
Federal income taxes (including foreign
withholding taxes):
Current $ 28,071 $ 10,982 $ 21,954
Deferred 1,206 12,737 2,786
29,277 23,719 24,740
State and local income taxes:
Current 14,682 10,483 11,014
Deferred (393) 1,698 437
14,289 12,181 11,451
Foreign income taxes:
Current 57,590 61,692 54,336
Deferred (1,337) (6,257) (2,843)
56,253 55,435 51,493
7Total $ 99,819 $ 91,335 $ 87,684
- 22 -PAGE
<PAGE>
At December 31, 1993 the deferred tax assets and (liabilities) consist
of the following items:
Postretirement benefits $20,822
Deferred compensation 9,519
Pension costs 3,561
Depreciation (3,970)
Tax loss/tax credit carryforwards 24,279
Other 5,598
Total deferred tax assets 59,809
Deferred tax valuation allowance 21,239
Net deferred tax assets $38,570
The valuation allowance of $21,239,000 at December 31, 1993 represents
a provision for uncertainty as to the realization of certain deferred
tax assets, including U.S. tax credit carryforwards and net operating
loss carryforwards in certain jurisdictions. At December 31, 1993,
there are $14,857,000 of tax credit carryforwards with expiration
periods through 1998 and net operating loss carryforwards with a tax
effect of $9,422,000 with various expiration periods.
In 1992, the provision for income taxes included deferred taxes of
$8,179,000 resulting from the effect of timing differences. This
provision resulted principally from $14,284,000 due to current tax
deductions in excess of book expenses related to stock incentive
awards, and $539,000 due to pension deductions in excess of book
expenses. This provision was partly offset by deferred tax credits of
$2,902,000 from deferred compensation and incentive accruals, and
$2,592,000 of interest expense recognized for accounting purposes but
not currently deductible.
- 23 -PAGE
<PAGE>
In 1991, the provision for income taxes included deferred taxes of
$380,000 resulting from the effect of timing differences. This
provision resulted principally from $3,478,000 of income recognized for
accounting purposes but not currently taxable. This amount was offset
by deferred tax credits of $2,341,000 due to deferred compensation and
incentive accruals, and $853,000 for pension expense in excess of tax
deductible amounts.
A reconciliation of the effective income tax rate as shown in the
consolidated statement of income to the federal statutory rate is as
follows:
1993 1992 1991
Statutory federal income tax rate 35.0% 34.0% 34.0%
State and local income taxes,
net of federal income tax benefit 4.0 3.9 4.1
Impact of foreign operations, including
withholding taxes 3.3 3.4 7.4
Amortization of intangible assets not
deductible for tax purposes 2.7 3.1 2.9
Other (1.9) (0.3) (1.1)
Effective tax rate 43.1% 44.1% 47.3%
- 24 -PAGE
<PAGE>
NOTE 5: LONG-TERM PERFORMANCE INCENTIVE PLAN
Under the Long-Term Performance Incentive Plan ("Plan"), grants
consisting of performance units are awarded to certain key employees of
the Company and its subsidiaries. The ultimate value of these
performance units is contingent upon the annual growth of profit (as
defined in the Plan) of the Company or its operating components or
both, over a four-year performance period, and is generally payable in
cash. The projected value of these units is accrued by the Company and
charged to expense over the four-year performance period.
The Plan also provides that a portion of each participant's grant may
be issued as performance units deemed to be the equivalent of "phantom"
shares of the Company's Common Stock, at the rate of thirty-six phantom
shares for each performance unit. The value of phantom shares is a
function of the amount, if any, by which the market value of the
Company's Common Stock increases during the performance period and is
payable either in cash or in shares of the Company's Common Stock. The
increase in the value of these units is accrued and expensed over the
four-year performance period. In addition, amounts of cash equivalent
to the quarterly dividends paid on the Company's Common Stock are paid
to phantom share recipients and expensed pursuant to the provisions of
the Plan.
For all such performance units, costs charged to income were
approximately $10 million in 1993, $17 million in 1992 and $9.6 million
in 1991. As of December 31, 1993, the Company has a recorded liability
of approximately $17.6 million, which represents the estimated amounts
payable for the 1991-1994 and 1993-1996 performance periods.
- 25 -PAGE
<PAGE>
NOTE 6: EMPLOYEE STOCK PLANS
The 1986 Stock Incentive Plan, United Kingdom Stock Option Plan and
1988 Stock Option Plan
The 1986 Stock Incentive Plan incorporates both stock option and
restricted stock award features. Under the Plan, 10,200,000 shares of
Common Stock of the Company are reserved for issuance pursuant to the
exercise of nonqualified stock options granted during the period ending
May 20, 1996. Key employees of the Company and its subsidiaries are
eligible to participate in the Plan.
Stock options have been awarded by the Stock Option Committee at prices
not less than 85 percent of the fair market value of the Company's
Common Stock on the date each option is granted. The options become
exercisable on the basis of a schedule determined by the Committee.
Those awarded prior to December 20, 1988 are exercisable in increments
of 25 percent per year commencing on the first anniversary of the grant
of the option. Awards issued on and after December 20, 1988 generally
become exercisable in three annual installments of 40 percent in the
first year and 30 percent in the succeeding two years, commencing on
the third anniversary of the grant of the option. All options expire
ten years from grant date. At December 31, 1993, there were
unexercised options under this plan for 6,223,987 shares of the
Company's Common Stock. Under the 1988 Stock Option Plan the Company
can grant, through 1998, options to purchase 600,000 shares of the
Company's Common Stock to key employees who are employed outside the
United States. Exercise requirements are similar to those under the
1986 Plan; however, grants may be made at prices which are less than 85
percent of the fair market value of the Company's Common Stock on the
date the option is granted. At December 31, 1993, there were
unexercised options under this plan for 114,760 shares of the Company's
Common Stock.
- 26 -
PAGE
<PAGE>
Shares of restricted stock awarded under the 1986 Stock Incentive Plan
are subject to certain restrictions and vesting requirements. No
monetary consideration is paid by a recipient for a restricted stock
award. During 1993 and 1992 the Company awarded 242,132 and 181,500
shares, respectively. The Company recognized expense of approximately
$8.8 million, $7.4 million and $9.8 million for amortization related to
all restricted awards in 1993, 1992 and 1991, respectively. At
December 31, 1993 there were outstanding a total of 2,426,081 shares of
restricted stock awarded under this Plan. The cost of these shares is
being amortized over the restriction periods. The Plan also authorizes
the Compensation Committee to direct that discretionary tax assistance
payments be made to recipients when the restrictions lapse. Such
payments are expensed as awarded.
The 1986 United Kingdom Stock Option Plan ("UK Plan") is substantially
similar to the stock option portion of the 1986 Stock Incentive Plan,
except that the exercise price of options granted under the UK Plan may
not be less than the fair market value at the date of grant. Stock
options awarded under the UK Plan come within the 10,200,000 share
limit provided for in the 1986 Stock Incentive Plan. At December 31,
1993 there were unexercised options for 388,473 shares of the Company's
Common Stock under the UK Plan.
- 27 -
PAGE
<PAGE>
Following is a summary of stock option transactions during the three-
year period ended December 31, 1993
_______________________________________________________________________
Number of Shares Option Price Range
Under Option Per Share
_______________________________________________________________________
Balances, December 31, 1990 2,332,506
New Awards:
1986 Stock Incentive Plan 4,487,588 $14.477 -$22.313
1986 United Kingdom Stock Option
Plan 180,180 19.875 - 25.344
Exercised (321,706) 2.573 - 16.094
Cancelled (168,230) 6.951 - 22.219
Balances, December 31, 1991 6,510,338
New Awards:
1986 Stock Incentive Plan 1,375,564 23.269 - 34.000
1986 United Kingdom Stock Option
Plan 257,934 29.563 - 34.000
Exercised (423,836) 6.951 - 21.250
Cancelled (583,278) 8.837 - 23.269
Balances, December 31, 1992 7,136,722
New Awards:
1986 Stock Incentive Plan 667,820 21.463 - 34.063
1986 United Kingdom Stock Option
Plan 33,720 28.688 - 31.938
Exercised (810,009) 6.951 - 24.172
Cancelled (301,033) 9.083 - 34.000
Balances, December 31, 1993 6,727,220 $ 6.951 -$34.063
Exercisable, December 31, 1993 2,012,617 $ 6.951 -$34.000
Under the Company's Achievement Stock Award Plan, awards may be made up
to an aggregate of 1,248,000 shares of Common Stock together with cash
awards to cover any applicable withholding taxes. As of December 31,
1993, 1,152,852 shares had been awarded, with 10,825 shares awarded
during 1993.
- 28 -PAGE
<PAGE>
The Employee Stock Purchase Plan was adopted by the stockholders in
1985, and allows employees an opportunity to purchase Common Stock of
the Company through ten consecutive annual offerings, which commenced
on July 1, 1985. Under the Plan, employees may purchase Common Stock
of the Company through payroll deductions not exceeding 10 percent of
their compensation. The price an employee pays for a share of stock is
85 percent of the average market price on the last business day of the
month. At December 31, 1993, 737,866 shares had been issued, including
171,686 shares issued during 1993. An additional 4,142,670 shares were
reserved for issuance at that date.
- 29 -
PAGE
<PAGE>
NOTE 7: RETIREMENT PLANS
Domestic Retirement Plan
The Company and certain of its domestic subsidiaries have a defined
benefit plan ("Domestic Plan") which covers substantially all
employees. The Company's policy is to fund pension costs as permitted
by applicable tax regulations. The projected unit credit method is
used to determine pension costs based upon career average pay, while
funding requirements for the Domestic Plan are determined using the
accrued benefit unit credit method. The pension plan was amended as of
January 1, 1992 to provide that pension benefits accrued after that
date would be calculated under a new "cash balance" formula. Under the
cash balance formula, the participant's account balance is credited
each year with an amount equal to a percentage of that year's annual
compensation, plus interest credits. Participants in the pension plan
on December 31, 1991 who continue to work for the Company after that
date had their normal retirement benefit under the plan as of that date
converted on an actuarial basis into an opening account balance as of
January 1, 1992.
In accordance with FAS 87, "Employers' Accounting for Pensions", the
Company has recorded an additional minimum pension liability for the
Domestic Plan of $11.9 million and $5.7 million at December 31, 1993
and 1992, respectively, representing the excess of unfunded accumulated
benefit obligation over previously recorded pension cost liabilities.
A corresponding amount is recognized as an intangible asset to the
extent of unrecognized prior service cost and net transition
obligation, with the balance recorded as a separate reduction of
stockholders' equity. In 1993, the Company has recorded an intangible
asset of $11.2 million and a charge to stockholders' equity of $.7
million. In 1992, the Company recorded an intangible asset equal to
the additional minimum pension liability.
- 30 -PAGE
<PAGE>
Net pension cost for the Domestic Plan for 1993, 1992 and 1991 includes
the following components:
(Dollars in Thousands) 1993 1992 1991
Service cost-benefits earned
during the year $ 3,735 $ 3,654 $ 3,851
Interest cost on projected benefit
obligation 9,943 9,454 8,473
Actual return on plan assets (10,831) (4,479) (17,541)
Net amortization and deferral 1,050 (5,222) 8,573
Total pension cost $ 3,897 $ 3,407 $ 3,356
The following table sets forth the funded status and amounts recognized
for the Domestic Plan in the Company's consolidated balance sheet at
December 31, 1993 and 1992:
(Dollars in Thousands) 1993 1992
Actuarial present value of accumulated
benefit obligation (including vested
benefits of $120,185 in 1993 and
$107,575 in 1992) $124,138 $111,615
Actuarial present value of projected benefit
obligation 136,561 118,013
Plan assets at fair value 110,913 104,438
Projected benefit obligation in excess of
plan assets (25,648) (13,575)
Unrecognized net loss (gain) 13,127 (1,038)
Unrecognized prior service cost (3,871) (3,884)
Unrecognized net obligation 15,099 16,986
Additional minimum liability (11,932) (5,666)
Accrued pension liability at December 31, 1993
and 1992 $(13,225) $ (7,177)
- 31 -PAGE
<PAGE>
At December 31, 1993, pension assets were primarily invested in fixed
income and equity securities. Prior service costs are being amortized
over the estimated average remaining service period of active
employees. The initial net obligation is being amortized over 15 years.
A discount rate of 7.5% in 1993 and 8.5% in 1992 and 1991 and a salary
increase assumption of 6% in 1993 and 7% in 1992 and 1991 were used in
determining the actuarial present value of the projected benefit
obligation. The expected return on assets was 10% for 1993, 1992 and
1991.
Foreign Retirement Plans
The Company has several foreign pension plans in which benefits are based
primarily on years of service and employee compensation. It is the
Company's policy to fund these plans in accordance with local laws and
income tax regulations.
Net pension costs for foreign pension plans for 1993, 1992 and 1991 include
the following components:
(Dollars in Thousands) 1993 1992 1991
Service cost-benefits earned during
the year $ 5,117 $ 4,860 $ 4,696
Interest cost on projected benefit
obligation 10,204 10,026 9,121
Actual return on plan assets (21,029) (15,307) (12,320)
Net amortization and deferral 13,943 7,699 5,974
Total pension cost $ 8,235 $ 7,278 $ 7,471
- 32 -
PAGE
<PAGE>
<TABLE>
The following table sets forth the funded status of the foreign pension plans:
<CAPTION>
1993 1992
Assets Accumulated Assets Accumulated
Exceed Benefits Exceed Benefits
Accumulated Exceed Accumulated Exceed
Benefits Assets Benefits Assets
<S> <C> <C> <C> <C>
Actuarial present value of
accumulated benefit obligation
(including vested benefits of:
1993 - $61,117 and $53,062
1992 - $48,836 and $49,631) $61,477 $ 59,388 $50,041 $ 54,653
Actuarial present value of
projected benefit obligation 69,152 72,574 55,797 67,616
Plan assets at fair value 92,868 5,813 77,750 6,071
Projected benefit obligation
(in excess of) less than
plan assets 23,716 (66,761) 21,953 (61,545)
Unrecognized net gain (19,140) (2,322) (15,874) (6,533)
Unrecognized prior service
costs 5,349 - 6,195 -
Unrecognized net (asset)/
obligation (2,153) 8,347 (3,206) 9,511
Prepaid (accrued) pension cost at
December 31, 1993 and 1992 $ 7,772 $(60,736) $ 9,068 $(58,567)
</TABLE>
- 33 -
PAGE
<PAGE>
Foreign plans utilized discount rates ranging from 5.5% to 12.5% and 4%
to 12.5% in 1993 and 1992, respectively, and salary increase
assumptions ranging from 4% to 12% and 4.5% to 12% in 1993 and 1992,
respectively, to determine the actuarial present value of the projected
benefit obligation. The expected rates of return on assets of foreign
plans ranged from 6.5% to 12.5% in 1993 and 1992.
The Company also has Special Deferred Benefit Arrangements with certain
key employees. Vesting is based upon age and the terms of the
employee's contract. Life insurance contracts have been purchased in
amounts which may be used to fund these arrangements.
- 34 -PAGE
<PAGE>
NOTE 8: POSTRETIREMENT & POSTEMPLOYMENT BENEFITS
Postretirement Benefit Plans
The Company and its subsidiaries provide certain postretirement health
care benefits for employees who were in the employ of the Company as of
January 1, 1988, and life insurance benefits for employees who were in
the employ of the Company as of December 1, 1961. The plans cover
employees in the United States and certain key employees in foreign
countries. Effective January 1, 1993, the Company's plan covering
postretirement medical benefits was amended to place a cap on annual
benefits payable to retirees. Such coverage is self-insured, but is
administered by an insurance company.
Effective January 1, 1992, the Company adopted FAS 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions", and
recorded a one-time, after-tax charge of $24.6 million. This statement
requires that the Company accrue the expected cost of postretirement
benefits other than pensions over the period in which the active
employees become eligible for such postretirement benefits. The pay-
as-you-go cost for postretirement health care benefits was
approximately $1.6 million in 1991.
The components of periodic expense for these postretirement benefits
for 1993 and 1992 are as follows:
(Dollars in Thousands) 1993 1992
Service cost-benefits earned during the year $ 675 $ 1,244
Interest cost on accumulated postretirement
benefit obligation 2,869 3,519
Recognition of initial transition obligation - 41,070
Net amortization and deferral (791) -
Total postretirement cost $2,753 $45,833
- 35 -PAGE
<PAGE>
The following table sets forth the funded status and amounts recognized
for the Company's postretirement benefit plans in its consolidated
balance sheet at December 31, 1993 and 1992:
1993 1992
Accumulated postretirement benefit
obligation:
Retirees $ 24,739 $ 19,300
Fully eligible active plan participants 5,177 10,800
Other active plan participants 7,515 13,900
Total accumulated postretirement
benefit obligation $ 37,431 $ 44,000
Plan assets at fair value - -
Accumulated postretirement benefit
obligation in excess of plan assets (37,431) (44,000)
Unrecognized net gain (7,049) -
Accrued postretirement benefit liability
at December 31, 1993 and 1992 $(44,480) $(44,000)
A discount rate of 7.5% and 8.5% in 1993 and 1992, respectively, and a
salary increase assumption of 6% in 1993 and 7% in 1992, were used in
determining the accumulated postretirement benefit obligation. A 10.5%
and an 11% increase in the cost of covered health care benefits were
assumed for fiscal years 1993 and 1992, respectively. The rate is
assumed to decrease incrementally to 6% after nine years and remain at
that level thereafter. The health care cost trend rate assumption does
not have a significant effect on the amounts reported. For example, a
1% increase in the health care cost trend rate would increase the
accumulated postretirement benefit obligation at December 31, 1993 by
approximately $1.5 million, and the net periodic cost for 1993 by $.1
million.
Postemployment Benefit Plans
In 1992, the Financial Accounting Standards Board issued FAS 112,
"Employers' Accounting for Postemployment Benefits". Under certain
circumstances, this statement requires accrual accounting of expected
- 36 -PAGE
<PAGE>
costs of providing postemployment benefits due to an employee's death,
disability, lay-off or other termination of active employment other
than retirement. This statement is effective for U.S. and foreign
plans for the fiscal years beginning after December 15, 1993. The
Company has not adopted FAS 112 in the December 31, 1993 financial
statements and based upon preliminary estimates, the effect of adoption
would be approximately $10-$15 million.
- 37 -
PAGE
<PAGE>
NOTE 9: SHORT-TERM BORROWINGS
The Company and its domestic subsidiaries have lines of credit with
various banks. These credit lines permit borrowings at fluctuating
interest rates determined by the banks. Short-term borrowings by
subsidiaries outside the United States principally consist of drawings
against bank overdraft facilities and lines of credit. These
borrowings bear interest at the prevailing local rates. Where
required, the Company has guaranteed the repayment of the borrowings.
Unused lines of credit by the Company and its subsidiaries at December
31, 1993 and 1992 aggregated $257 million and $299 million,
respectively.
- 38 -
PAGE
<PAGE>
NOTE 10: LONG-TERM DEBT
Long-term debt at December 31 consisted of the following:
(Dollars in Thousands) 1993 1992
Convertible Subordinated Debentures - 3.75% $107,997 $105,634
Term loans-5.5% to 9.0%.(8.5% to 9.0% in 1992) 90,000 95,000
Borrowings from syndicated facility arrangement -
6.88% (8.25%-13.21% in 1992) 4,991 5,389
Other long-term loans-5.7% to 9.0% (7.5%
to 9.5% in 1992) 39,715 8,042
242,703 214,065
Less: current portion 16,618 13,828
$226,085 $200,237
The increase in other long-term loans during 1993 was due primarily to
the purchase of a building and land by one of the Company's
subsidiaries, which was financed by a mortgage of $32.8 million bearing
a rate of interest of 7.6% Payments of approximately $.3 million have
been made as of December 31, 1993. The remaining other long-term loan
balance of $7.2 million at December 31, 1993, includes loans from
Morgan Guaranty U.K. and New York Life Mortgage which mature at various
dates between 1994 and 1999.
In April 1992, the Company issued Convertible Subordinated Debentures
maturing on April 1, 2002 for a face value of $135 million. The terms
of the bond offering included an issuance price equal to 77% of face
value with a coupon of 3 3/4%. The debentures are convertible into
Common Stock of the Company at a rate of 22.238 shares per each U.S.
$1,000 principal amount. Most of the proceeds were used to pay down
existing debt, including approximately $47.6 million of the syndicated
facility, $9.8 million of Canadian bank loans, and about $34 million
short-term domestic borrowings.
The term loans at December 31, 1993 are with Trust Company Bank and the
National Bank of Detroit for $25 million and $15 million, respectively,
- 39 -PAGE
<PAGE>
with payments each year until maturity in 1996. Also included in term
loans is a private placement with The Prudential Insurance Company of
America for $50 million, with payments due in 1996, 1997 and 1998.
Under various loan agreements, the Company must maintain specified
levels of net worth and meet certain cash flow requirements, and is
limited in the level of indebtedness. The Company has complied with
the limitations under the terms of these loan agreements.
Long-term debt maturing over the next five years is as follows:
1994:$16.6 million; 1995:$15.1 million; 1996:$35.9 million; 1997:$18.5
million and 1998:$17.9 million. The remaining debt of $138.7 million
matures during the years 1999-2003.
The only material financial instruments which are not carried in the
consolidated balance sheet at amounts which approximate fair values are
the Convertible Subordinated Debentures. The carrying value of this
debt is $108 million and the fair value was $121.5 million at December
31, 1993. The fair value is estimated by obtaining quotes from
brokers.
- 40 -
PAGE
<PAGE>
NOTE 11: DISCLOSURES UNDER FAS 95
This accounting standard requires disclosures of specific cash payments
and noncash investing and financing activities. The Company considers
all highly liquid investments with a maturity of three months or less
to be cash equivalents.
Cash paid for income taxes was $78.5 million, $74.9 million, $77.1
million, in 1993, 1992 and 1991, respectively. Interest payments were
$24.1 million in 1993, $30.4 million in 1992 and $32.4 million in 1991.
As more fully described in Note 3, in 1993 the Company issued 37,625
shares in conjunction with the acquisition of Scali, McCabe, Sloves.
During 1992 the Company issued a total of 603,595 shares of its Common
Stock in connection with the acquisitions of Lowe Brindfors and Kuiper
& Schouten. In 1991 the Company issued 1,181,874 shares for
acquisitions of several advertising agencies.
Details of businesses acquired in transactions accounted for as
purchases were as follows:
(Dollars in Thousands) 1993 1992 1991
Fair value of assets acquired $172,166 $28,483 $73,934
Liabilities assumed 91,736 5,326 24,790
Net assets acquired 80,430 23,157 49,144
Less non-cash consideration 1,135 4,644 22,831
Less cash acquired 2,767 - 7,695
Net cash paid for acquisitions $ 76,528 $18,513 $18,618
- 41 -PAGE
<PAGE>
The 1993 amounts shown above exclude deferred payments of $10.1 million
in connection with the Scali acquisition, which are payable in 1994-
1995, but include $15.4 million of deferred payments made during 1993
relating to various prior year acquisitions. The 1992 amounts shown
above include a deferred payment of $9.8 million in connection with the
1991 acquisition of Kuiper and Schouten by the Lowe Group, but exclude
a payment of $1.3 million in connection with the 1992 acquisition of
Lowe Brindfors.
- 42 -
PAGE
<PAGE>
<TABLE>
NOTE 12: RESULTS BY QUARTER (UNAUDITED)
<CAPTION>
__________________________________________________________________________________________________________
(Dollars in Thousands 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Except Per Share Data) 1993 1992 1993 1992 1993 1992 1993 1992
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gross income $389,785 $400,745 $483,758 $485,325 $411,027 $435,776 $509,286 $534,129
Operating expenses 360,731 371,814 377,990 392,289 376,697 403,309 420,233 448,180
Provision for income
taxes 10,018 10,815 44,892 39,953 13,058 10,862 31,851 29,705
Net income before effect of
accounting changes 11,025 9,645 48,987 43,232 14,690 12,440 50,577 46,596
Effect of accounting changes:
Postretirement benefits - (24,640) - - - - - -
Income taxes (512) - - - - - - -
Net income 10,513 (14,995) 48,987 43,232 14,690 12,440 50,577 46,596
Earnings per Common and
Common Equivalent Share:
Before effect of accounting
changes .15 .13 .65 .58 .20 .17 .67 .62
Effect of accounting changes:
Postretirement benefits - (.33) - - - - - -
Income taxes (.01) - - - - - - -
Net income .14 (.20) .65 .58 .20 .17 .67 .62
Cash dividends per share .115 .105 .125 .115 .125 .115 .125 .115
Price range per share:
High 35 1/2 29 3/16 31 1/4 30 31 3/4 34 1/4 32 7/8 35 3/4
Low 28 26 7/16 25 1/8 26 3/8 23 7/8 28 29 3/4 29 3/4
<FN>
Note: Restated to reflect two-for-one stock split during 1992.
First Quarter 1992 restated for effect of adopting FAS 106 "Employers' Accounting for Postretirement
Benefits Other Than Pensions". The effect of the accounting change on other quarters in 1992 was not
significant and therefore they were not restated.
</TABLE>
- 43 -PAGE
<PAGE>
NOTE 13: GEOGRAPHIC AREAS
Total assets, income from commissions and fees, and income before
provision for income taxes are presented below by major geographic
area.
(Dollars in Thousands) 1993 1992 1991
Total Assets:
United States $ 970,242 $ 798,764 $ 760,918
International
Europe 1,133,057 1,171,061 1,436,991
Far East 457,444 379,325 363,574
Latin America 171,826 145,228 101,718
Other 137,248 128,967 121,099
Total International 1,899,575 1,824,581 2,023,382
Total Consolidated $2,869,817 $2,623,345 $2,784,300
Income From Commissions and Fees:
United States $ 582,183 $ 560,431 $ 516,434
International
Europe 710,386 842,150 778,649
Far East 242,255 210,302 194,351
Latin America 136,509 117,383 76,912
Other 68,445 74,155 68,324
Total International 1,157,595 1,243,990 1,118,236
Total Consolidated $1,739,778 $1,804,421 $1,634,670
- 44 -
PAGE
<PAGE>
(Dollars in Thousands) 1993 1992 1991
Income Before Provision for Income Taxes:
Operating income:
United States $ 94,475 $ 75,337 $ 73,786
International
Europe 80,139 102,307 100,866
Far East 44,193 31,010 27,455
Latin America 34,021 30,094 11,237
Other 5,376 1,632 5,438
Total International 163,729 165,043 144,996
Items not allocated to operations,
principally interest expense:
United States (15,987) (14,884) (12,373)
International (10,457) (18,338) (21,126)
Total Consolidated $ 231,760 $ 207,158 $ 185,283
The largest client of the Company contributed approximately 10% in 1993
and 9% in 1992 and 1991 to income from commissions and fees. The
Company's second largest client contributed approximately 10% in 1993,
8% in 1992 and 9% in 1991 to income from commissions and fees.
Dividends received from foreign subsidiaries were $40.1 million in
1993, $38.4 million in 1992 and $34.3 million in 1991. Net assets of
foreign subsidiaries were approximately $512 million, $446 million, and
$461 million at December 31, 1993, 1992 and 1991, respectively.
Undistributed earnings of foreign subsidiaries at December 31, 1993
were approximately $159 million.
- 45 -PAGE
<PAGE>
Consolidated net income includes losses from exchange and translation
of foreign currencies of $13.9 million, $4.6 million and $6.4 million
in 1993, 1992 and 1991, respectively.
- 46 -
PAGE
<PAGE>
NOTE 14: COMMITMENTS AND CONTINGENT LIABILITIES
At December 31, 1993, subsidiaries which operate outside the United
States were contingently liable for discounted notes receivable of
approximately $16.1 million.
The Company and its subsidiaries lease certain facilities and
equipment. Gross rental expense amounted to approximately $135 million
for 1993, $134 million for 1992 and $132 million for 1991, which was
reduced by sublease income of $15.4 million, $12.5 million and $14.9
million in 1993, 1992 and 1991, respectively. Minimum rental
commitments for the rental of office premises and equipment under
noncancellable leases, some of which provide for rental adjustments due
to increased property taxes and operating costs for 1994 and
thereafter, are as follows:
(Dollars in Thousands)
Gross Sublease
Period Amount Income
1994 $113,960 $ 8,504
1995 92,136 4,648
1996 79,603 4,327
1997 69,012 4,235
1998 60,425 3,729
1999 and thereafter 287,826 22,166
The Company and certain of its subsidiaries are party to various tax
examinations, some of which have resulted in assessments. The Company
intends to vigorously defend any and all assessments and believes that
additional taxes (if any) that may ultimately result from settlement of
such assessments and open examinations would not have a material
adverse effect on the consolidated financial statements.
- 47 -PAGE
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
_______________________________________________________________________
1177 Avenue of the Americas
New York, New York 10036
To the Board of Directors and Stockholders of
The Interpublic Group of Companies, Inc. February 9, 1994
In our opinion, the accompanying consolidated balance sheet and the
related consolidated statements of income, of stockholders' equity and
of cash flows present fairly, in all material respects, the financial
position of The Interpublic Group of Companies, Inc. and its
subsidiaries (the "Company") at December 31, 1993 and 1992, and the
results of their operations and their cash flows for each of the three
years in the period ended December 31, 1993, in conformity with
generally accepted accounting principles. These financial statements
are the responsibility of the Company's management; our responsibility
is to express an opinion on these financial statements based on our
audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for the opinion expressed
above.
As discussed in Notes 4 and 8 to the consolidated financial statements,
effective January 1, 1993 the Company changed its method of accounting
for income taxes as required by Statement of Financial Accounting
Standards Number 109 and effective January 1, 1992 the Company changed
its method of accounting for postretirement benefits as required by
Statement of Financial Accounting Standards Number 106.
Price Waterhouse
- 48 -
PAGE
<PAGE>
<TABLE>
SELECTED FINANCIAL DATA FOR FIVE YEARS
<CAPTION>
_____________________________________________________________________________________________
(Dollars in Thousands
Except Per Share Data) 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
Operating Data
Gross income $1,793,856 $1,855,971 $1,677,498 $1,368,169 $1,256,854
Operating expenses 1,535,651 1,615,592 1,458,716 1,199,759 1,104,211
Interest expense 26,445 33,221 33,499 18,872 14,995
Provision for income taxes:
United States - federal 29,277 23,719 24,740 17,698 19,292
- state and local 14,289 12,181 11,451 6,590 8,169
Foreign 56,253 55,435 51,493 48,176 40,618
Total taxes 99,819 91,335 87,684 72,464 68,079
Income before effect of accounting
changes 125,279 111,913 94,557 80,064 70,600
Effect of accounting changes:
Postretirement benefits - (24,640) - - -
Income taxes (512) - - - -
Net Income 124,767 87,273 94,557 80,064 70,600
Cash dividends 35,901 32,483 29,265 24,403 21,414
Per Share Data
Income before effect of accounting
changes 1.67 1.50 1.30 1.19 1.05
Effect of accounting changes:
Postretirement benefits - (.33) - - -
Income taxes (.01) - - - -
Net Income 1.66 1.17 1.30 1.19 1.05
Cash dividends .49 .45 .41 .37 .32
Financial Position
Working Capital $ 167,175 $ 224,534 $ 178,004 $ 145,468 $ 162,371
Total assets 2,869,817 2,623,345 2,784,300 2,584,111 1,740,729
PAGE
<PAGE>
Long-term debt 226,085 200,237 170,458 144,468 36,512
Stockholders' equity per share 7.54 6.81 7.78 6.94 5.32
Other Data
Weighted average number
of shares 75,215,521 74,974,618 72,860,086 67,348,676 67,333,430
Number of employees 17,600 16,800 16,800 16,800 14,700
<FN>
Note: Restated to reflect the two-for-one stock split during 1992 and the three-for-two stock
split during 1989.
</TABLE>
- 49 -
PAGE
<PAGE>
REPORT OF MANAGEMENT
The financial statements, including the financial analyses and all
other information in this Annual Report, were prepared by management,
which is responsible for their integrity and objectivity. Management
believes the financial statements, which require the use of certain
estimates and judgements, reflect the Company's financial position and
operating results in conformity with generally accepted accounting
principles. All financial information in this Annual Report is
consistent with the financial statements.
Management maintains a system of internal accounting controls which
provides reasonable assurance that, in all material respects, assets
are maintained and accounted for in accordance with management's
authorization and transactions are recorded accurately in the books and
records. To assure the effectiveness of the internal control system,
the organizational structure provides for defined lines of
responsibility and delegation of authority. The Company has formally
stated and communicated policies requiring of employees high ethical
standards in their conduct of its business. As a further enhancement
of the above, the Company's comprehensive internal audit program is
designed for continual evaluation of the adequacy and effectiveness of
its internal controls and measures adherence to established policies
and procedures.
The Audit Committee of the Board of Directors is comprised of three
directors who are not employees of the Company. The Committee reviews
audit plans, internal controls, financial reports and related matters,
and meets regularly with management, internal auditors and independent
accountants. The independent accountants and the internal auditors
have free access to the Audit Committee, without management being
present, to discuss the results of their audits or any other matters.
- 50 -PAGE
<PAGE>
The independent accountants, Price Waterhouse, are recommended by the
Audit Committee of the Board of Directors and selected by the Board of
Directors, and their appointment is ratified by the shareholders. The
independent accountants have examined the financial statements of the
Company and their opinion is presented on page 27.
- 51 -
PAGE
<PAGE>
STOCKHOLDERS' INFORMATION
Corporate Headquarters
1271 Avenue of the Americas
New York, New York 10020
212/399-8000
Transfer Agent and Registrar for Common Stock
First Chicago Trust Company of New York
P.O. Box 2500
Jersey City, New Jersey 07303-2500
Stock of The Interpublic Group of Companies, Inc. is traded on the New
York Stock Exchange. At December 31, 1993, there were 5,391
stockholders of record.
Annual Meeting
The annual meeting will be held on Tuesday, May 17, 1994 at 11 a.m.
Eastern Time in the auditorium of The Equitable Center, Main Floor, 787
Seventh Avenue (between 51st and 52nd Streets), New York, New York
10019.
Automatic Dividend Reinvestment Plan
An Automatic Dividend Reinvestment Plan is offered to all stockholders
of record. The Plan, which is administered by First Chicago Trust
Company of New York, provides a way to acquire additional shares of
Interpublic Common Stock in a systematic and convenient manner that
affords savings in commissions for most stockholders.
Those interested in participating in this plan are invited to write for
details and an authorization form to:
First Chicago Trust Company of New York
Dividend Reinvestment Plan
P.O. Box 2598
Jersey City, New Jersey 07303-2598.
Form 10-K
A copy of the Company's annual report (Form 10-K) to the Securities and
Exchange Commission may be obtained without charge by writing to:
William S. Keating
Vice President and Associate General Counsel
The Interpublic Group of Companies, Inc.
1271 Avenue of the Americas
New York, New York 10020.
Exhibits to the annual report will also be furnished, but will be sent
only upon payment of the Company's reasonable expense in furnishing
them.
- 52 -
PAGE
<PAGE>
APPENDIX TO EXHIBIT 13
The graphic material depicting Gross Income, Earnings Per Share, Cash
Dividends Per Share and Return on Stockholders' Equity which appears in
the paper version of the Company's Annual Report at and for the period
ended December 31, 1993, is described in narrative form in this
electronic version under the heading "KEY INDICATORS".
- 53 -
<PAGE>
<TABLE>
EXHIBIT 21 - MARCH 18, 1994
<CAPTION>
PERCENTAGE
OF VOTING
SECURITIES
JURISDICTION OWNED BY
UNDER WHICH IMMEDIATE
NAME ORGANIZED PARENT (%) IMMEDIATE PARENT
<S> <C> <C> <C>
Domestic:
The Interpublic Group of Companies, Inc. Delaware - -
(Registrant)
Dailey & Associates California 100 Registrant
International Business Services, Inc. California 100 Infoplan International, Inc.
North Light, Ltd. California 100 Dailey & Associates
The Phillips-Ramsey Co. California 100 Registrant
McLaughlan Mohr Massey, Inc. California 100 Lowe SMS Ltd.
McCann-Erickson Event Marketing, Inc. Colorado 100 McCann-Erickson USA, Inc.
Business Science Research Corporation, Inc. Delaware 100 Registrant
Asset Recovery Group, Inc. Delaware 100 Registrant
Healthcare Capital, Inc. Delaware 100 McCann Healthcare, Inc.
Infoplan International, Inc. Delaware 100 Registrant
Interpublic Television, Inc. Delaware 100 Registrant
LFS, Inc. Delaware 100 Registrant
Lintas Campbell-Ewald Company Delaware 100 Registrant
Lintas, Inc. Delaware 100 Registrant
Lintas USA, Inc. Delaware 100 Registrant
Jack Tinker Advertising, Inc. Delaware 100 Registrant
McCann-Erickson USA, Inc. Delaware 100 Registrant
McCann-Erickson Corporation (International) Delaware 100 Registrant
McCann-Erickson Corporation (S.A.) Delaware 100 Registrant
McCann-Erickson (Paraguay) Co. Delaware 100 Registrant
McCann-Erickson Worldwide, Inc. Delaware 100 Registrant
McCann Healthcare, Inc. Delaware 100 McCann-Erickson USA, Inc.
The Lowe Group, Inc. Delaware 100 Deo Nederland B.V.
McLaughlan Mohr Massey, Inc. Delaware 100 Lowe SMS Ltd.
Benito Advertising, Inc. Florida 100 LFS, Inc.
Quest & Associates, Inc. Kansas 100 Registrant
- 1 -
PAGE
<PAGE>
ZML Software Systems, Inc. Kentucky 100 McCann-Erickson USA, Inc.
Lintas Marketing Communications, Inc. Michigan 100 Registrant
Interpublic, Inc. New Jersey 100 Registrant
Fremantle International Inc. New York 80 Registrant
McCann Direct, Inc. New York 100 Registrant
The Gotham Group, Inc. New York 100 Registrant
McCann-Erickson Marketing, Inc. New York 100 Registrant
Lowe & Partners Inc. New York 100 Lowe International Limited (80%)
and Lowe Worldwide Holdings
B.V. (20%)
LCF&L, Inc. New York The Lowe Group, Inc. (99.9%) and
GDL, Inc. (.1%)
Goldschmidt Dunst & Lawson Corp. New York 100 The Lowe Group, Inc.
GDL, Inc. New York 100 The Lowe Group, Inc.(100% of
Common Stock) and Goldschmidt
Dunst & Lawson Corp. (100% of
Preferred Stock)
Scali, McCabe, Sloves, Inc. New York 100 Registrant
Long Haymes Carr Lintas, Inc. North Carolina 100 Registrant
Fahlgren Inc. Ohio 100 Lintas, Inc.
The Martin Agency, Inc. Virginia 91 Scali, McCabe, Sloves, Inc.
Alan S. Newman Associates, Inc. Virginia 100 The Martin Agency, Inc.
The Stenrich Group Inc. Virginia 100 The Martin Agency, Inc.
Cabell Eanes, Inc. Virginia 100 The Martin Agency, Inc.
Foreign:
Interpublic S.A. de Publicidad Argentina 100 Registrant
Lintas Proprietary Limited Australia
(New South Wales) 100 Registrant
Lintas Communications Pty. Limited Australia
(New South Wales) 100 Lintas Proprietary Limited
Underline Design Group Pty. Limited Australia 51 Lintas Communications Pty.
Limited
McCann-Erickson Advertising Pty. Limited Australia
(New South Wales) 100 Registrant
Sales Communications International Pty. Limited Australia
(New South Wales) 100 McCann Erickson Advertising Pty.
Ltd.
Merchant and Partners (Sydney) Pty. Ltd. Australia 100 Merchant and Partners Australia
Pty. Limited
Merchant and Partners Australia Pty. Limited Australia 100 Registrant
- 2 -
PAGE
<PAGE>
Lintas Melbourne Proprietary Limited Australia
(Victoria) 100 Lintas Proprietary Limited
Initiatives Media Werbemittlung Ges. m.b.H. Austria 100 Lintas Werbeagentur Gesellschaft
m.b.H.
Lintas Werbeagentur Gesellschaft m.b.H. Austria 100 Registrant
McCann-Erickson Gesellschaft m.b.H. Austria 100 Registrant
PCS Werbeagentur Ges. m.b.H. Austria 100 Lintas Werbeagentur Gesellschaft
m.b.H.
Campbell Ewald Werbeagentur Ges.m.b.H. Austria 100 Lowe Worldwide Holdings B.V.
Initiative Media Brussels S.A. Belgium 100 Lintas Brussels S.A. (96%) and
Initiatives Media (a French
corporation) (4%)
Programming Media International-PMI S.A. Belgium 100 Registrant
Initiative Media International S.A. Belgium 100 Lintas Holding B.V.
McCann-Erickson Co. S.A. Belgium 100 Registrant
Lintas Brussels S.A. Belgium 100 Lintas Holding B.V.
Universal Media, S.A. Belgium 100 Registrant
A.C.E. Advertising Creation Marketing N.V. Belgium 100 Lintas Brussels S.A.
De Roeck En Heering P.R. Consultants N.V. Belgium 100 Lintas Brussels S.A.
Lowe Troost S.A. Belgium 95 Lowe Worldwide Holdings B.V.
Lowe Communication Group Belgium S.A. Belgium 100 Lowe Troost S.A. (99%) Lowe
Worldwide Holdings B.V. (1%)
Direct Creations S.A. Belgium 51 Lowe Troost S.A.
Triad Assurance Limited Bermuda 100 Registrant
Interpublic Publicidade e Pesquisas Brazil 100 International Business Services,
Sociedade Limitada Inc.
McCann-Erickson Publicidade Ltda. Brazil 100 Registrant
MPM Lintas Communicacoes Ltda. Brazil 98.75 Registrant
PPA Profissionais de Promocao Associados Ltda. Brazil 100 MPM Lintas Communicacoes Ltda.
Harrod & Mirlin, Inc. Canada 100 Registrant (61.5%) and McCann
-Erickson Advertising of
Canada Ltd. (38.5%)
McCann-Erickson Advertising of Canada Ltd. Canada (Federal) 100 Registrant
MacLaren Lintas Inc. Canada (Federal) 100 Registrant
Promaction Corporation Canada 100 McCann-Erickson Advertising of
Canada
Lowe SMS Ltd. Canada 100 Lowe Worldwide Holdings B.V.
(43%) and Scali, McCabe,
Sloves, Inc. (57%)
West-Can Communications Ltd. Canada 100 Scali, McCabe, Sloves,Inc.
C.L.A. Commercial Productions, Ltd. Canada 100 West Can Communications Ltd.
Show & Tell Studios Inc. Canada 100 West Can Communications Ltd.
All Media Translations Inc. Canada 100 West Can Communications Ltd.
- 3 -
PAGE
<PAGE>
McCann-Erickson S.A. de Publicidad Chile 100 Registrant
Lintas Chile S.A. Chile 100 Lintas Holding B.V.
Harrison Publicidad De Colombia S.A. Colombia 100 Registrant
McCann-Erickson Centroamericana Costa Rica 100 Registrant
(Costa Rica) Ltda.
Jadran/McCann-Erickson Limited Croatia 100 McCann-Erickson International
GmbH
McCann-Erickson Prague Czech Republic 100 McCann-Erickson International
GmbH
Lintas Praha Spol. s.r.o. Czech Republic 100 Lintas Deutschland GmbH
Milvang/GR2 A/S Denmark 100 Lintas Danmark A/S
Signatur APS Denmark 100 Lintas Danmark A/S
Lintas Danmark A/S Denmark 100 Lintas Holding B.V.
McCann-Erickson A/S Denmark 100 Registrant
Pool Media International Aps Denmark 100 Registrant
McCann-Erickson Dominicana, S.A. Dominican Republic 100 Registrant
McCann-Erickson (Ecuador) Publicidad S.A. Ecuador 96 McCann-Erickson Corporation
(International)
McCann-Erickson Centro Americana El Salvador 100 Registrant
(El Salvador) S.A.
Artel Studios Limited England 100 Stowe, Bowden, Wilson Limited
The Below the Line Agency Limited England 100 Interpublic Limited
Bureau of Commercial Information Limited England 100 Registrant
Bureau of Commercial Research Limited England 100 Registrant
CM Lintas International Ltd. England 100 Interpublic Limited
Epic (Events & Programming International England 100 Interpublic Limited
Consultancy) Limited
H.K. McCann Limited England 100 McCann Erickson Advertising
Limited
Initiative Media Limited England 100 Interpublic Limited
Interpublic Limited England 100 Registrant
Fieldplan Ltd. England 100 Interpublic Limited
Interpublic Pension Fund Trustee England 100 Interpublic Limited
Company Limited
Lintas International Limited England 100 Interpublic Limited
Lintas Overseas Limited England 100 Interpublic Limited
Lintas Superannuation Trustees Limited England 100 Lintas International Limited
Talbot Television Limited England 100 Fremantle International Inc.
Lintas W.A. Limited England 100 Interpublic Limited
Still Price Court Twivy D'Souza England 100 Interpublic Limited
Lintas Group Limited
- 4 -
PAGE
<PAGE>
Still Price Court Twivy D'Souza Lintas England 100 Still Price Court Twivy D'Souza
Limited Lintas Group Limited
Initiative Media London Limited England 99.5 Still Price Court Twivy D'Souza
Lintas Group Limited
Brilliant Pictures Limited England 100 Still Price Court Twivy D'Souza
Lintas Group Limited
Lintas Supplementary Pension Trustees Limited England 100 Lintas International Limited
Matter of Fact Communications Limited England 100 McCann-Erickson Bristol Limited
Orkestra Ltd. England 100 Interpublic Limited
Adware Systems Limited England 100 Orkestra Limited
McCann Communications Limited England 100 Interpublic Limited
McCann-Erickson Advertising Limited England 100 Interpublic Limited
McCann-Erickson Bristol Limited England 100 McCann-Erickson United Kingdom
Limited
McCann-Erickson Central Limited England 100 McCann-Erickson United Kingdom
Limited
McCann-Erickson United Kingdom Limited England 100 Interpublic Limited
McCann-Erickson Manchester Limited England 100 McCann-Erickson United Kingdom
Limited
McCann Properties Limited England 100 McCann-Erickson United Kingdom
Limited
The Howland Street Studio Ltd. England 100 Interpublic Limited
Coachouse Ltd. England 100 McCann-Erickson Manchester
Limited
Salesdesk Limited England 100 Orkestra Ltd.
Stowe, Bowden, Wilson Limited England 100 McCann-Erickson United Kingdom
Limited
Universal McCann Limited England 100 Interpublic Limited
Lowe International Limited England 100 Interpublic Limited
The Brompton Group Ltd. England 100 Lowe International Limited
Brompton Advertising Ltd. England 100 The Brompton Group Ltd.
Brompton Promotions Ltd. England 100 The Brompton Group Ltd.
Hamilton Wright Ltd. England 100 Lowe International Limited
Orbit International (1990) Ltd. England 100 Lowe International Limited
Lowe Howard-Spink Ltd. England 100 Lowe International Limited
International Poster Management Ltd. England 100 Interpublic Limited
Tavistock Advertising Limited England 100 Lowe International Limited
Allen Brady & Marsh Ltd. England 100 Tavistock Advertising Limited
Poundhold Ltd. England 100 Lowe International Limited
Colourwatch Ltd. England 100 Lowe International Limited
Kenlarton Ltd. England 100 Lowe International Limited
S.C. Advertising (UK) Limited England 100 Lowe International Limited
- 5 -
PAGE
<PAGE>
Colourwheel Limited England 100 Lighthold Limited
Face Photosetting Ltd. England 100 Smithfield Lease Limited
Smithfield Lease Limited England 100 Lowe International Limited
Two Six Seven Limited England 100 Lowe International Limited
Lighthold Limited England 100 Lowe International Limited
ABM Kershaw Limited England 100 Lowe International Limited
The Lowe Group Limited England 100 Lowe International Limited
Relationship Marketing Limited England 100 Lowe International Limited
The Results Machine Limited England 100 Lowe International Limited
LHSB Management Services Ltd. England 100 Lowe International Limited
Lowe & Howard-Spink Media Limited England 100 Lighthold Limited
The Lowe Group Nominees Ltd. England 100 Lowe International Limited
Impulse International Oy Finland 100 Lintas Oy
Lintas Oy Finland 100 Lintas Holding B.V.
Lintas Make Direct Oy Finland 100 Lintas Oy
Lintas Service Oy Finland 100 Lintas Oy
Womena-Myynninvauhdittajat Oy Finland 100 Oy Liikemainonta-McCann AB
Oy Liikemainonta-McCann AB Finland 100 Registrant
McCann-Pro Oy Finland 100 Oy Liikemainonta-McCann AB
Mainostoinisto Womena - McCann Oy Finland 100 Registrant
PMI - Mediaporssi Oy Finland 66 Oy Liikemainonta-McCann AB (33%)
and Lintas Oy (33%)
Lowe Brindfors Oy Finland 100 Lowe Scandinavia AB
Brindfors Production Oy Finland 100 Lowe Brindfors Oy
E.C. Television/Paris, S.A. France 100 France C.C.P.M.
France C.C.P.M. France 100 Lintas Holding B.V.
Initiatives Media Paris France 100 France C.C.P.M.
Initiative Media International S.A. France 100 Lintas Holding B.V.
JSC McCann Direct France 75 McCann-Erickson (France)
McCann - Promotion S.A. France 99.8 McCann-Erickson (France)
Lintas-Paris France 100 France C.C.P.M.
McCann-Erickson (France) France 100 Registrant
McCann-Erickson (Paris) S.A. France 100 McCann-Erickson (France)
SP3 Conseil S.A. France 100 SP3 S.A.
Creation Sarl France 97.5 SP3 S.A.
Fab + S.A. France 99.4 SP3 S.A.
Infernal Sarl France 100 SP3 S.A.
SP3 Conseils Paris S.A. France 99.8 SP3 S.A.
SP3 Lyon S.A. France 95 SP3 S.A.
SP3 S.A. France 100 McCann-Erickson (France)
Delacroix et Gervasi S.A. France 100 SP3
- 6 -
PAGE
<PAGE>
McCann Rhone Alpes S.A. France 100 McCann-Erickson (France)
Delacroix S.A. France 60.1 McCann-Erickson (France)
Publi Media Service France 50 Owned in quarters by McCann,
Lintas agencies in France,
Publicis and Idemedia
Sprint S.A. France 100 France C.C.P.M.
Universal Media S.A. France 100 McCann-Erickson (France)
Lowe Quadrillage et Associes S.A. France 100 Lowe Worldwide Holdings B.V.
Audour, Soum, Larue/Scali, McCabe, Sloves, S.A. France 60 Scali, McCabe, Sloves, Inc.
Initiativ Media GmbH Germany 100 Lintas Deutschland GmbH
Initiativ Verkaufsforderung GmbH Germany 100 Lintas Hamburg GmbH
Interpublic GmbH Germany 100 Registrant
Krakow McCann-Erickson GmbH Germany 100 McCann-Erickson Deutschland GmbH
Lintas Deutschland GmbH Germany 100 Registrant
Lintas Direct GmbH Germany 100 Lintas Deutschland GmbH
Lintas Frankfurt GmbH Germany 100 Lintas Hamburg GmbH
Lintas Hamburg GmbH Germany 100 Lintas Deutschland GmbH
Lintas S Sales Communications GmbH Germany 100 Lintas Deutschland GmbH
Max W.A. Kamer GmbH Germany 100 Lintas Deutschland GmbH
Baader-Lang-Behnken GmbH Germany 75 Lintas Deutschland GmbH
Creative Media Services GmbH Germany 100 Lintas Deutschland GmbH
McCann Direct GmbH Agentur fuer Direktmarketing Germany 100 McCann-Erickson Deutschland GmbH
McCann-Erickson (International) GmbH Germany 100 Registrant
McCann-Erickson Deutschland GmbH Germany 100 McCann-Erickson (International)
GmbH
McCann-Erickson Scope GmbH Germany 100 McCann-Erickson Deutschland GmbH
McCann-Erickson Frankfurt GmbH Germany 100 McCann-Erickson Deutschland GmbH
McCann-Erickson Hamburg GmbH Germany 100 McCann-Erickson Deutschland GmbH
McCann-Erickson Nurnberg GmbH Germany 100 McCann-Erickson Deutschland GmbH
McCann-Erickson Service GmbH Germany 100 McCann-Erickson Deutschland GmbH
McCann-Promotion GmbH Germany 100 McCann-Erickson Deutschland GmbH
Universalcommunication Media Intensiv GmbH Germany 100 Interpublic GmbH
McCann Healthcare Pharma Kommunikation GmbH Germany 100 McCann-Erickson Deutschland GmbH
McCann-Erickson Management Property GmbH Germany 100 McCann-Erickson Deutschland GmbH
(80%) Interpublic GmbH (20%)
Typo-Wenz Artwork GmbH Germany 100 Interpublic GmbH
Unterstuetzungskasse der H.K. Germany 100 McCann-Erickson (International)
McCann Company mbH GmbH
Lowe & Partners GmbH Dusseldorf Germany 100 Lowe Worldwide Holdings B.V
(75%) and Registrant (25%)
Heinrich Hoffman & Partner GmbH Germany 100 Lowe & Partners GmbH Frankfurt
- 7 -
PAGE
<PAGE>
Lowe & Partners GmbH Frankfurt Germany 100 Lowe & Partners GmbH Dusseldorf
Adplus GmbH Germany 100 Lowe & Partners GmbH Frankfurt
K&S Werbeagentur Marketing und Consulting GmbH Germany 100 Adplus GmbH
Lowe & Partners GmbH Hamburg Germany 100 Lowe & Partners GmbH Dusseldorf
Fremantle (Deutschland) Fernsehproduktions GmbH Germany 100 Fremantle International, Inc.
McCann-Erickson (Hellas) L.L.C. Greece 100 Registrant
Universal Media Greece Greece 100 McCann-Erickson (International)
GmbH
Lintas Worldwide Advertising (Hellas) L.L.C. Greece 100 Interpublic Limited
Sprint Advertising S.A. Greece 51 Fieldplan Limited
Initiative Media Advertising S.A. Greece 100 Fieldplan Limited
Fremantle Hellas Greece 95 Talbot Television Limited
Publicidad McCann-Erickson Centroamericana Guatemala 100 Registrant
(Guatemala), S.A.
McCann-Erickson Centroamericana S. de R.L. Honduras 100 Registrant
(Honduras)
Interpublic (China) Limited Hong Kong 100 Registrant
Lintas Hong Kong Limited Hong Kong 100 Lintas Holding B.V.
Infoplan (Hong Kong) Limited Hong Kong 100 McCann-Erickson (HK) Limited
McCann-Erickson (HK) Limited Hong Kong 100 Registrant
McCann-Erickson Interpress International Hungary 100 Registrant
Advertising Agency Ltd.
Lintas Budapest Reklam es Marketing Hungary 90 Lintas Deutschland GmbH
Kommunicacios Kft
Centro Media Planning-Buying-Booking S.r.l. Italy 100 Lintas Milano S.p.A.
Harrison McCann S.r.l. Italy 100 McCann-Erickson Italiana S.p.A.
Lintas Milano S.p.A. Italy 100 Lintas Holding B.V.
McCann-Erickson Italiana S.p.A. Italy 100 Registrant
McCann Marketing Communications S.p.A. Italy 100 McCann-Erickson Italiana S.p.A.
Spring S.r.l. Italy 100 Lintas Milano S.p.A.
Pool Media International (P.M.I.) S.r.l. Italy 100 Registrant (95%) and Business
Science Research Corp (5%)
Universal Media S.r.l. Italy 100 McCann-Erickson Italiana S.p.A.
Universal S.r.l. Italy 100 McCann-Erickson Italiana S.p.A.
Pirella Gottsche Lowe S.p.A. Italy 90 Lowe Worldwide Holdings B.V.
De Toffel & PG S.r.l. Italy 100 Pirella Gottsche Lowe S.p.A.
Europa Immagine & Comunicazione Srl Italy 100 Pirella Gottsche Lowe S.p.A.
Lintas - Abidjan Ivory Coast 67 France C.C.P.M.
McCann-Erickson (Jamaica) Limited Jamaica 100 Registrant
Cato Design, Inc. Japan 51 McCann-Erickson Worldwide, Inc.
Hakuhodo Lintas K.K. Japan 50 Registrant
- 8 -
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<PAGE>
McCann-Erickson Hakuhodo Inc. Japan 100 Registrant
Lintas Japan K.K. Japan 100 Lintas Nederland B.V.
McCann-Erickson (Kenya) Limited Kenya 73 Registrant
McCann-Erickson (Malaysia) Sdn. Bhd. Malaysia 100 Registrant
Mutiara-McCann (Malaysia) Sdn. Bhd. Malaysia 79 Registrant
Lintas Worldwide (Malaysia) Sdn. Bhd. Malaysia 100 Registrant
Initiative Media (M) Sdn. Bhd. Malaysia 100 Lintas Worldwide (Malaysia) Sdn.
Universal Communication Sdn. Bhd. Malaysia 100 McCann-Erickson (Malaysia) Sdn.
Bhd.
Lintas Direct S.A. de C.V. Mexico 100 Registrant
Corporacion Interpublic Mexicana, S.A. de C.V. Mexico 100 Registrant and Inversionistas
Asociados, S.A. de C.V.
Inversionistas Asociados, S.A. de C.V. Mexico 100 Registrant
Lintas Mexico S.A. de C.V. Mexico 100 Registrant
Lintas Worldwide Namibia (Pty) Limited Namibia 100 Fieldplan Ltd.
Data Gold B.V. Netherlands 100 IPG Nederland B.V.
Initiative Media B.V. Netherlands 100 Lintas Nederland B.V.
IPG Nederland B.V. Netherlands 100 Registrant
Lintas Direct B.V. Netherlands 80 Lintas Nederland B.V.
Lintas Holding B.V. Netherlands 100 Registrant
Lintas Nederland B.V. Netherlands 100 IPG Nederland B.V.
McCann-Direct B.V. Netherlands 100 McCann-Erickson (Nederland) B.V.
McCann-Erickson (Nederland) B.V. Netherlands 100 IPG Nederland B.V.
McCann-Erickson Industrieel B.V. Netherlands 100 McCann-Erickson (Nederland) B.V.
P. Strating Promotion B.V. Netherlands 100 IPG Nederland B.V.
Reclame-Adviesbureau Via B.V. Netherlands 100 IPG Nederland B.V.
Programming Media International B.V. Netherlands 100 Registrant
Universal Media B.V. Netherlands 100 IPG Nederland B.V.
Zet Zet B.V. Netherlands 100 Data Gold B.V.
Lowe Worldwide Holdings B.V. Netherlands 100 Poundhold Ltd.
Lowe International Holdings B.V. Netherlands 100 Registrant
Deo Nederland B.V. Netherlands 100 Lowe Worldwide Holdings B.V.
Lowe Kuiper & Schouten B.V. Netherlands 100 Lowe Worldwide Holdings B.V.
Lowe Europa B.V. Netherlands 100 Lowe Worldwide Holdings B.V.
Lintas (NZ) Limited New Zealand 100 Registrant
McCann-Erickson Limited New Zealand 100 Registrant
Universal Media Limited New Zealand 100 McCann-Erickson Limited
McCann-Erickson Belfast Limited Northern Ireland 100 McCann-Erickson United Kingdom
Limited
McCann-Erickson A/S Norway 100 Registrant
Universal Media A/S Norway 100 McCann-Erickson A/S
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<PAGE>
McCann Production A/S Norway 100 McCann-Erickson A/S
JBR Reklamebyra A/S Norway 100 McCann-Erickson A/S
JBR Filialen A/S Norway 100 JBR Reklamebyra A/S
JBR Film A/S Norway 100 JBR Reklamebyra A/S
JBR Invest A/S Norway 100 JBR Reklamebyra A/S
Lowe Brindfors A/S Norway 90 Lowe Scandinavia AB
McCann-Erickson de Panama, S.A. Panama 100 Registrant
Universal Ideas S.A. Panama 100 McCann-Erickson de Panama, S.A.
Conte/McCann-Erickson de Panama S.A. Panama 51 McCann-Erickson de Panama, S.A.
McCann-Erickson (Paraguay) Company Paraguay 100 McCann-Erickson (Paraguay) Co.
(Delaware)
McCann-Erickson Guangming Advertising Limited People's Republic 51 McCann-Erickson Worldwide
of China
McCann-Erickson Corporacion Publicidad S.A. Peru 100 Registrant
McCann Group of Companies, Inc. Philippines 100 Registrant
ITI McCann-Erickson International Advertising Poland 51 McCann-Erickson International
GmbH
Lintas Warszawa Poland 100 Lintas Deutschland GmbH
Lintas, Agencia Internacional de Portugal 100 Lintas Holding B.V.
Publicidade, Ltda.
Inciativas De Meios-Actividades Publicitarias, Portugal 98 Lintas, Agencia Internacional de
Limitada Publicidade, Ltda.
McCann-Erickson/Portugal Limitada Portugal 100 Business Science Research
Corporation
Universal Media Publicidade, Limitada Portugal 100 McCann-Erickson/Portugal
Limitada
Lowe Portuguesa Publicidade a Estudios de
Mercado, S.A. Portugal 100 Lowe Worldwide Holdings B.V.
Fremantle Portugal, Producoes Televisas, LDA Portugal 100 Talbot Television Limited (95%)
and Fremantle International,
Inc. (5%)
Lintas Puerto Rico, Inc. Puerto Rico 100 Lintas, Inc.
McCann-Erickson, Limited Republic of Ireland 100 Registrant
McCann-Erickson Moscow Russia 100 McCann-Erickson International
GmbH
McCann-Erickson Scotland Limited Scotland 100 McCann-Erickson United Kingdom
Limited
McCann-Erickson (Singapore) Private Limited Singapore 100 Registrant
Lintas Worldwide (Singapore) Private Limited Singapore 100 Registrant
McCann-Erickson South Africa (Pty.) South Africa 100 Registrant
Ltd. ("McCann Group")
- 10 -
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<PAGE>
McCann Cape Town (Proprietary) Limited South Africa 100 McCann Group
McCann Durban (Proprietary) Limited South Africa 100 McCann Group
McCann International (Proprietary) Limited South Africa 100 McCann Group
Media Solutions (Proprietary) Limited South Africa 100 McCann Group
Universal Media (Proprietary) Limited South Africa 100 McCann Group
McCannix Proprietary Limited South Africa 100 McCann-Erickson Johannesburg
(Proprietary) Limited
McCann South Africa Proprietary Limited South Africa 100 McCann-Erickson Johannesburg
(Proprietary) Limited
McCann-Erickson Johannesburg (Proprietary) South Africa 100 McCann-Erickson South Africa
Limited (Proprietary) Limited
Media Initiative (Proprietary) Limited South Africa 100 Lintas (Proprietary) Limited
Lintas (Proprietary) Limited South Africa 100 Lintas Holding B.V. (76%)
Registrant (24%)
McCann-Erickson, Inc. South Korea 51 McCann-Erickson Marketing, Inc.
Lintas Korea, Inc. South Korea 100 Registrant
Clarin, S.A. Spain 100 McCann-Erickson S.A.
Events & Programming International Spain 100 Registrant
Consultancy, S.A. (EPIC)
Cinestar S.A. Spain 100 Clarin, S.A.
Encuadre S.A. Spain 67 Clarin, S.A.
Iniciativas de Medios, S.A. Spain 100 Lintas, S.A.
Lintas S.A. Spain 100 Lintas Holding B.V.
McCann-Erickson S.A. Spain 100 Registrant
McCann-Erickson Barcelona S.A. Spain 100 Registrant
Pool Media International S.A. Spain 100 Registrant
Universal Media S.A. Spain 100 McCann-Erickson S.A.
Lowe Dospordos S.A. Spain 83.7 Lowe Worldwide Holdings B.V.
Lowe FMS S.A. Spain 100 Lowe Worldwide Holdings B.V.
Lowe MBAC S.A. Spain 100 Lowe Worldwide Holdings B.V.
RZR/Scali, McCabe, Sloves, S.A. Spain 80 Scali, McCabe, Sloves, Inc.
Fremantle de Espana S.L. Spain 100 Fremantle International Inc.
AB Lintas Shoppen Sweden 100 Lintas AB
McCann-Erickson AB Sweden 100 Registrant
Lintas AB Sweden 100 Lintas Holding B.V.
Werne & Co. Annonsbyra I Malmoe AB Sweden 100 McCann-Erickson AB
Werne & Co. Annonsbyra AB Sweden 100 McCann-Erickson AB
Ronnberg & Co. A.B. Sweden 100 McCann-Erickson AB
PMI Initiative Universal Media AB Sweden 100 Lintas AB (50%)
McCann-Erickson AB (50%)
- 11 -
PAGE
<PAGE>
Lowe Scandinavia AB Sweden 100 Interpublic Svenska AB (66.9%)
and Brindfors Intressenter
Invest AB (33.1%)
Brindfors Intressenter Invest AB Sweden 100 Interpublic Svenska AB
Interpublic Svenska AB Sweden 100 Lowe International Holdings B.V.
Lowe Brindfors AB Sweden 100 Lowe Scandinavia AB
Lowe Brindfors Annonsbyra AB Sweden 100 Lowe Scandinavia AB
Boxer Film Produktion AB Sweden 100 Lowe Scandinavia AB
Ulla Andersson Mediaaktiebolag Sweden 85 Lowe Scandinavia AB
Message Mediaformedling AB Sweden 100 Lowe Scandinavia AB
Boisen & Partners Annonsbyra AB Sweden 100 Lowe Scandinavia AB
Lintas A.G. Switzerland 100 Lintas Holding B.V.
Max W.A. Kamer AG Switzerland 100 Lintas Deutschland GmbH
McCann-Erickson S.A. Switzerland 100 Registrant
McCann-Erickson Services S.A. Switzerland 100 Registrant
P.C.M. Marketing AG Switzerland 100 Lintas Deutschland GmbH
Pool Media-PMI S.A. Switzerland 100 Registrant
Unimedia S.A. Switzerland 100 Registrant
Lintas Taiwan Limited Taiwan 100 Registrant
McCann-Erickson Taiwan Company Taiwan 100 Registrant
Harrison Communications, Ltd. Taiwan 60 Registrant
McCann-Erickson (Thailand) Ltd. Thailand 100 Registrant
Lintas (Thailand) Ltd. Thailand 80 Registrant
Lintas Gulf Limited Tortola 51 Lintas International Limited
McCann-Erickson (Trinidad) Limited Trinidad 100 Registrant
PARS McCann-Erickson Reklamcilik A.S.("PARS") Turkey 100 Registrant
Link Ajams Limited Sirketi Turkey 100 PARS
Universal Media Planlama Ve Dagitim Turkey 100 PARS
McCann-Direct Reklam Tanitama Servisleri A.S. Turkey 100 PARS
Grafika Lintas Reklamcilik A.S. Turkey 51 Registrant
McCann-Erickson Publicidad De Venezuela, S.A. Venezuela 99.67 Registrant
McCann-Erickson Payne, Golley Ltd. Wales 75.9 McCann-Erickson United Kingdon
Limited
Lintas (Private) Limited Zimbabwe 85 Fieldplan Ltd.
- 12 -
PAGE
<PAGE>
<FN>
A number of inactive subsidiaries and other subsidiaries, all of which considered in the aggregate as a
single subsidiary would not constitute a significant subsidiary, are omitted from the above list.
These subsidiaries normally do business under their official corporate names. International Business
Services, Inc. does business in Michigan under the name "McCann-I.B.S., Inc." and in New York under the
name "McCann International Business Services". Lintas, Inc. conducts business through its Lintas New York
division. McCann-Erickson conducts some of its business in the states of Kentucky and Michigan under the
name "McGraphics". ZML Software Systems, Inc. also does business under the name "Adware". McCann-Erickson
USA, Inc. does business in Michigan under the name SAS and does business in Indiana, Michigan, New York,
Pennsylvania and Wisconsin under the name of McCann-Erickson Universal Group. Dailey & Associates Inc.
does business in New York under the name "Dailey & Associates of California".
- 13 -
</TABLE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULES
To the Board of Directors of
The Interpublic Group of Companies, Inc.
Our audits of the consolidated financial statements referred to in our
report dated February 9, 1994 appearing in the 1993 Annual Report to
Stockholders of The Interpublic Group of Companies, Inc. (which report
and consolidated financial statements are incorporated by reference in
this Annual Report on Form 10-K) also included an audit of the
Financial Statement Schedules listed in Item 14 (a) of this Form 10-K.
In our opinion, these Financial Statement Schedules present fairly, in
all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.
PRICE WATERHOUSE
New York, New York
February 9, 1994
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Registration Statements on Form S-8 of The Interpublic Group of
Companies, Inc. (the "Company"), of our report dated February 9, 1994,
appearing in the 1993 Annual Report to Stockholders which is
incorporated in this Annual Report on Form 10-K: Registration
Statements No. 2-79071; No. 2-43811; No. 2-56269; No. 2-61346; No. 2-
64338; No. 2-67560; No. 2-72093; No. 2-88165; No. 2-90878, No. 2-97440
and No. 33-28143, relating variously to the Stock Option Plan (1971),
the Stock Option Plan (1981), the Stock Option Plan (1988) and the
Achievement Stock Award Plan of the Company; Registration Statements
No. 2-53544; No. 2-91564, No. 2-98324, No. 33-22008 and No. 33-64062,
relating variously to the Employee Stock Purchase Plan (1975) and the
Employee Stock Purchase Plan (1985) of the Company; Registration
Statements No. 33-20291 and No. 33-2830 relating to the Management
Incentive Compensation Plan of the Company; Registration Statement No.
33-5352 and No. 33-21605 relating to the 1986 Stock Incentive Plan and
1986 United Kingdom Stock Option Plan of the Company; and Registration
Statement No. 33-10087 and No. 33-25555 relating to the Long-Term
Performance Incentive Plan of the Company. We also consent to the
incorporation by reference in the Prospectus constituting part of the
Registration Statement on Form S-3 (No. 33-37346) of our report dated
February 9, 1994, appearing in the 1993 Annual Report to Stockholders
which is incorporated in this Annual Report on Form 10-K. We also
consent to the incorporation by reference of our report on the
Financial Statement Schedules, which appears above.
PRICE WATERHOUSE
New York, New York
March 25, 1994
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual
whose signature appears below constitutes and appoints PHILIP H.
GEIER, JR., EUGENE P. BEARD, SALVATORE F. LAGRECA, and
CHRISTOPHER RUDGE, and each of them, as true and lawful
attorneys-in-fact and agents with full power of substitution and
resubstitution, for him, and in his name, place and stead, in any
and all capacities, to sign the Report on Form 10-K for the year
ended December 31, 1993, for The Interpublic Group of Companies,
Inc., S.E.C. File No. 1-6686, and any and all amendments and
supplements thereto and all other instruments necessary or
desirable in connection therewith, and to file the same, with all
exhibits thereto, and all documents in connection therewith, with
the Securities and Exchange Commission and the New York Stock
Exchange, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and
every act and thing requested and necessary to be done in and
about the premises as fully to all intents and purposes as he
might do or could do in person, hereby ratifying and confirming
all that said attorney-in-fact and agents or any of them or their
or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Dated: March 15, 1994
Philip H. Geier, Jr. Kenneth L. Robbins
Philip H. Geier, Jr. Kenneth L. Robbins
Eugene P. Beard J. Phillip Samper
Eugene P. Beard J. Phillip Samper
Salvatore F. LaGreca Joseph J. Sisco
Salvatore F. LaGreca Joseph J. Sisco
Robert L. James Frank Stanton
Robert L. James Frank Stanton
Frank B. Lowe Jacqueline G. Wexler
Frank B. Lowe Jacqueline G. Wexler
Leif H. Olsen
Leif H. Olsen
- 1 -
PAGE
<PAGE>
THE INTERPUBLIC GROUP OF COMPANIES, INC.
Certified Resolutions
I, Christopher Rudge, Secretary of The
Interpublic Group of Companies, Inc. (the "Corporation"),
hereby certify that the resolutions attached hereto were
duly adopted on March 15, 1994 by the Board of Directors of
the Corporation and that such resolutions have not been
amended or revoked.
WITNESS my hand and the seal of the Corporation this 24th
day of March 1994.
Christopher Rudge
Christopher Rudge
- 2 -
PAGE
<PAGE>
THE INTERPUBLIC GROUP OF COMPANIES, INC.
MEETING OF THE BOARD OF DIRECTORS
Resolutions re Form 10-K
RESOLVED, that the Chairman of the Board and President
and the Executive Vice President-Finance and Operations of the
Corporation be, and each of them hereby is, authorized to execute
and deliver on behalf of the Corporation an annual report on Form
10-K for the year ended December 31, 1993, in the form presented
to this meeting with such changes therein as either of them with
the advice of the General Counsel shall approve; and further
RESOLVED, that the Chairman of the Board and President
in his capacity as Chief Executive Officer, the Executive Vice
President-Finance and Operations in his capacity as Chief
Financial Officer, and the Vice President and Controller in his
capacity as Chief Accounting Officer of the Corporation be, and
each of them hereby is, authorized to execute such annual report
on Form 10-K; and further
RESOLVED, that the officers of the Corporation be and
each of them hereby is, authorized and directed to file such
annual report on Form 10-K, with all the exhibits thereto and any
other documents that may be necessary or desirable in connection
therewith, after its execution by the foregoing officers and by a
majority of this Board of Directors, with the Securities and
Exchange Commission and the New York Stock Exchange; and further
- 3 -
PAGE
<PAGE>
RESOLVED, that the officers and directors of the
Corporation who may be required to execute such annual report on
Form 10-K be, and each of them hereby is, authorized to execute a
power of attorney in the form submitted to this meeting
appointing Philip H. Geier, Jr., Eugene P. Beard, Salvatore F.
LaGreca and Christopher Rudge, and each of them, severally, his
or her true and lawful attorneys and agents to act in his or her
name, place and stead, to execute said annual report on Form 10-K
and any and all amendments and supplements thereto and all other
instruments necessary or desirable in connection therewith; and
further
RESOLVED, that the signature of any officer of the
Corporation required by law to affix his signature to such annual
report on Form 10-K or to any amendment or supplement thereto
and such additional documents as they may deem necessary or
advisable in connection therewith, may be affixed by said
officer personally or by any attorney-in-fact duly constituted
in writing by said officer to sign his name thereto; and further
RESOLVED, that the officers of the Corporation be, and
each of them hereby is, authorized to execute such amendments or
supplements to such annual report on Form 10-K and such
additional documents as they may deem necessary or advisable in
connection with any such amendment or supplement and to file
the foregoing with the Securities and Exchange Commission and the
New York Stock Exchange; and further
- 4 -
PAGE
<PAGE>
RESOLVED, that the officers of the Corporation be, and
each of them hereby is, authorized to take such actions and to
execute such other documents, agreements or instruments as may be
necessary or desirable in connection with the foregoing.
- 5 -
<PAGE>
