PRELIMINARY COPIES
SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
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Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
............................................................
The Interpublic Group of Companies, Inc.
............................................................
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules
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applies:
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applies:
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computed pursuant to Exchange Act Rule 0-11. (Set
forth the amount on which the filing fee is calculated
and state how it was determined):
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
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previous filing by registration statement number, or the
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PRELIMINARY COPIES
THE INTERPUBLIC GROUP OF COMPANIES, INC.
1271 Avenue of the Americas
New York, New York 10020
April __, 1997
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of
Stockholders of The Interpublic Group of Companies, Inc., to be
held at 9:30 A.M. Eastern Time, on Monday, May 19, 1997. The
meeting will be held in the Auditorium of the Equitable Center,
787 Seventh Avenue, New York, New York.
The business to be considered is described in the attached
notice of the meeting and Proxy Statement.
In addition to these matters, there will be a report on the
affairs of the Company, an opportunity for questions and comments
by stockholders and a showing of selected commercials recently
produced by the Company's subsidiaries.
We hope you will be able to attend.
Sincerely,
Philip H. Geier, Jr.
Chairman of the Board
and Chief Executive Officer
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PRELIMINARY COPIES
THE INTERPUBLIC GROUP OF COMPANIES, INC.
1271 Avenue of the Americas
New York, New York 10020
_________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 19, 1997
The Annual Meeting of Stockholders of The Interpublic Group
of Companies, Inc. (the "Company") will be held in the Auditorium
of the Equitable Center, 787 Seventh Avenue, New York, New York,
on Monday, May 19, 1997, at 9:30 A.M., Eastern Time, for the
following purposes:
1. To elect 11 directors;
2. To consider and act upon a proposal to amend the
Company's Restated Certificate of Incorporation to
increase the number of authorized shares of Common
Stock, $.10 par value, of the Company to 225 million
shares;
3. To consider and act upon a proposal to adopt the 1997
Performance Incentive Plan of the Company;
4. To consider and act upon a proposal to confirm the
appointment of Price Waterhouse LLP ("Price
Waterhouse"), as independent accountants of the Company
for the year 1997;
5. To consider and act upon a proposed stockholder
resolution regarding Northern Ireland; and
6. To transact such other business as may properly come
before the meeting and any adjournment thereof.
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The close of business on March 24, 1997, has been designated
as the record date for the determination of stockholders entitled
to notice of and to vote at this meeting and any adjournment
thereof.
By Order of the Board of Directors,
Nicholas J. Camera
Secretary
Dated: April __, 1997
Whether or not you plan to attend the meeting in
person, please fill in, sign, date and promptly return the
enclosed proxy in the accompanying envelope, which requires no
postage if mailed in the United States. The proxy is revocable,
so that you may still vote your shares in person if you attend
the meeting and wish to do so.
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PRELIMINARY COPIES
THE INTERPUBLIC GROUP OF COMPANIES, INC.
-----------
PROXY STATEMENT
-----------
GENERAL
INTRODUCTION
This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors (the "Management") of The
Interpublic Group of Companies, Inc. ("Interpublic" or the
"Company") of proxies to be voted at the Annual Meeting of
Stockholders, which will be held in the Auditorium of The
Equitable Center, 787 Seventh Avenue, New York, New York, at 9:30
A.M., Eastern Time, on Monday, May 19, 1997.
The address of the Company's principal executive office is
1271 Avenue of the Americas, New York, NY 10020. This Proxy
Statement and the enclosed form of proxy are first being sent to
stockholders on or about April 11, 1997. The Company's Annual
Report to Stockholders was first sent to stockholders on or about
March 31, 1997.
Any proxy given in response to this solicitation may be
revoked at any time before it has been exercised. The giving of
the proxy will not affect your right to vote in person if you
attend the meeting. If you do not attend the Annual Meeting, or
if you attend but do not vote in person, the shares represented
by your proxy will be voted in accordance with your instruction
on the matters set forth in items 1 through 5. If no voting
instructions are given with respect to any one or more of the
items, a duly executed proxy will be voted with respect to the
uninstructed matters as follows: FOR the election of
Management's nominees for director, FOR the amendment of the
Company's Restated Certificate of Incorporation to increase the
number of authorized Common Stock to 225 million shares, FOR the
adoption of the 1997 Performance Incentive Plan of the Company,
FOR the confirmation of Price Waterhouse LLP ("Price Waterhouse")
as independent accountants and AGAINST the stockholder resolution
regarding Northern Ireland. A duly executed proxy also will be
voted in the discretion of the proxy holder on any other matter
arising and voted upon at the meeting.
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OUTSTANDING SHARES
The record date for the Annual Meeting is March 24, 1997.
The outstanding capital stock of the Company at the close of
business on March 24, 1997, consisted of 81,512,748 shares of
Common Stock. Each share of Common Stock is entitled to one vote
on all matters that are submitted to a vote of stockholders at
the meeting. The following table sets forth information
concerning direct and indirect beneficial ownership of the
Company's Common Stock as of December 31, 1996, by persons known
to the Company to have beneficial ownership of more than 5% of
the Common Stock of the Company:
Amount
and Nature of Percent
Name and Address Beneficial of
of Beneficial Owner Ownership <F1> Class
The Capital Group Companies, Inc. 6,334,460 <F2> 7.8%
and subsidiaries
333 South Hope Street
Los Angeles, CA 90071
<F1> The Securities and Exchange Commission rules deem a person
to be the beneficial owner of a security (for purposes of
the proxy statement disclosure) if that person has or shares
either or both voting or investment power with respect to
such security. Additionally, a security is deemed to be
beneficially owned by a person who has the right to acquire
beneficial ownership thereof within 60 days -- for example,
through the exercise of a stock option.
<F2> Based on information supplied by The Capital Group
Companies, Inc. ("Capital") in a Schedule 13G filed with the
Securities and Exchange Commission on or about February 12,
1997. Capital reports that it is the parent holding company
of a group of investment management companies that, by
reason of their discretionary investment management
activities, in the aggregate have sole voting power with
respect to 2,212,860 shares of Common stock and sole
dispositive power with respect to 6,334,460 shares of Common
Stock. Capital disclaims beneficial ownership of all such
shares of Common Stock.
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The following table sets forth information concerning the
direct and indirect beneficial ownership of the Company's Common
Stock as of March 24, 1997 of each director, each nominee for
election as a director, each executive officer named in the
Summary Compensation Table below, and all directors and executive
officers of the Company as a group:
Common Options
Name of Stock Exercisable
Beneficial Owner Ownership <F3><F4><F5> Within 60 Days
Eugene P. Beard 245,162 226,510
Frank J. Borelli 2,500 -
Reginald K. Brack 850 -
Jill M. Considine - -
John J. Dooner, Jr. 154,866 54,100
Philip H. Geier, Jr. 480,393 483,558
Frank B. Lowe 372,878 23,400
Leif H. Olsen 2,400 -
Martin F. Puris 513,608 -
Allen Questrom 2,000 -
J. Phillip Samper 3,400 -
Joseph J. Sisco 3,600 -
All directors and
executive officers
as a group 1,918,133 974,734
<F3> The Securities and Exchange Commission rules deem a person
to be the beneficial owner of a security (for purposes of
the proxy statement disclosure) if that person has or shares
either or both voting or investment power with respect to
such security. Additionally, a security is deemed to be
beneficially owned by a person who has the right to acquire
beneficial ownership thereof within 60 days -- for example,
through the exercise of a stock option. Common Stock
ownership set forth in this table includes restricted stock
awarded under the 1986 Stock Incentive Plan, the 1996 Stock
Incentive Plan and the Interpublic Outside Directors' Stock
Incentive Plan, respectively. Common Stock ownership in
column one, together with options exercisable within 60 days
in column two, constitute the entire direct and indirect
beneficial ownership of Common Stock of each of the named
persons and the group.
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<F4> No person nor the group named in the foregoing table has
beneficial ownership of more than 1% of the outstanding
shares of Common Stock except, that Mr. Geier owns 1.1756%
of the outstanding Common Stock and the directors and
executive officers as a group own 3.5070%.
<F5> Except for shares of Common Stock held by Messrs. Lowe and
Puris, the beneficial ownership shown is direct. The shares
shown as beneficially owned by Mr. Lowe include 2,436 shares
that he holds indirectly through a trust, as to which he
disclaims beneficial ownership. The shares beneficially
owned by Mr. Puris include 42,588 shares of Common Stock
that are owned by his spouse of which he is the indirect
beneficial owner.
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VOTING
Election of directors will be decided by a plurality of the
votes cast by the holders of shares of Common Stock present in
person or by proxy at the meeting and entitled to vote. Approval
of the proposal described in Item 2 will require the affirmative
vote of a majority of all outstanding shares of Common Stock.
Approval of the proposals described in Items 3 through 5 will
require the affirmative vote of a majority of the shares present
in person or by proxy at the meeting and entitled to vote. The
Company's transfer agent tabulates the votes. Abstentions and
broker non-votes are each tabulated separately and are counted
toward the quorum. For Item 2, shares that are the subject of an
abstention or a broker non-vote will constitute a vote against
the matter. For Items 3 through 5, shares that are the subject
of an abstention are counted, whereas shares that are the subject
of a broker non-vote are not counted, as shares entitled to vote
on the particular matter.
STOCKHOLDERS' PROPOSALS TO BE PRESENTED AT 1998 ANNUAL MEETING
Proposals of stockholders intended to be presented at the
Annual Meeting of Stockholders scheduled to be held on May 18,
1998, must be received by the Company by December 15, 1997, in
order to be considered for inclusion in the Company's Proxy
Statement and form of proxy relating to that meeting.
1. ELECTION OF DIRECTORS
The nominees of the Management for election as directors of
the Company at the Annual Meeting will hold office until the next
Annual Meeting of Stockholders and until their successors are
elected and qualify or until their earlier death, resignation or
removal. Certain biographical information concerning each
nominee is provided below. All of the nominees are currently
serving as directors of the Company. The Management believes
that all of the nominees will be available and able to serve as
directors. However, if for any reason any of these persons
should not be available or are unable to serve, proxies will be
voted for the remainder of those nominated and, unless the size
of the Board of Directors is reduced, for a substituted nominee
designated by the Management.
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The following information with respect to the principal
occupation or employment, recent employment history, age and
directorships in other companies at February 28, 1997, has been
furnished or confirmed to the Company by the respective nominees.
McCann-Erickson Worldwide, Ammirati Puris Lintas Worldwide
and The Lowe Group are worldwide advertising agency systems owned
by Interpublic.
EUGENE P. BEARD has been Vice Chairman-Finance and
Operations and Chief Financial Officer of the Company since 1995
and previously was Executive Vice President-Finance and
Operations and Chief Financial Officer of the Company from 1985
to 1995. Mr. Beard has been a director of Interpublic since
1982.
He is a director of 59 Wall Street Fund, Inc., All American
Communications, Inc. and Micrografx, Inc. Age 61.
Chairman of the Finance Committee. Member of the Executive
Policy Committee.
FRANK J. BORELLI has been Senior Vice President and Chief
Financial Officer of Marsh & McLennan Companies, Inc. since 1984.
He is a director of Marsh & McLennan Companies, Inc., Mid Ocean
Limited and United Water Resources, Inc. Mr. Borelli is Chairman
and a Director of the Financial Executives Institute and is also
a Trustee of the New York City Chapter of the National Multiple
Sclerosis Society and the Nyack Hospital. Mr. Borelli has been a
director of Interpublic since 1995. Age 61.
Member of the Audit, Compensation and Finance Committees.
REGINALD K. BRACK has been Chairman of Time Inc. from
September 1994 to the present and its Chairman, President and
Chief Executive Officer from December 1986 until August 1994.
Mr. Brack has been a director of Interpublic since 1996. Age 59.
Member of the Compensation and Nominating Committees.
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JILL M. CONSIDINE has been President of the New York
Clearing House Association since 1993. The New York Clearing
House Association is a private payments system, clearing
interbank payments and checks. She was Chief Administrative
Officer of American Express Bank Ltd. and a member of its Board
of Directors from 1991 to 1993. Prior to that time she served as
New York State Superintendent of Banks from 1985 to 1991. She is
a trustee of Atlantic Mutual Insurance Company and a director of
its affiliate Centennial Insurance Company. Ms. Considine has
been a director of Interpublic since February 1997. Age 52.
Member of the Compensation Committee.
JOHN J. DOONER, JR. has been Chairman and Chief Executive
Officer of McCann-Erickson Worldwide since 1995 and previously
was Chief Executive Officer of McCann-Erickson Worldwide from
1994 to 1995. From 1992 to 1994, Mr. Dooner was President of
McCann-Erickson Worldwide. He served as President of
McCann-Erickson North America from 1988-1992. Mr. Dooner has
been a director of Interpublic since 1995. Age 48.
PHILIP H. GEIER, JR., Chairman of the Board and Chief
Executive Officer of the Company, has been a director of
Interpublic since 1975. Mr. Geier was elected Chairman and Chief
Executive Officer of the Company in 1980. Mr. Geier is a
director of Fiduciary Trust Company International and Woolworth
Corporation. Age 62.
Chairman of the Executive Policy Committee. Member of the Finance
and Nominating Committees.
FRANK B. LOWE, Chairman of The Lowe Group, has been a
director of Interpublic since 1990. Mr. Lowe has served as
Chairman of The Lowe Group since its founding in 1981. Age 55.
LEIF H. OLSEN, President of Leif H. Olsen Investments, Inc.,
economic consultants and financial managers, has been a director
of Interpublic since 1972. Mr. Olsen was Senior Vice President
and Economist of First National City Bank (now Citibank, N.A.)
until 1978, when he became Chairman of the Economic Policy
Committee of Citibank N.A., a post he held until 1985. He is a
director of BNY Hamilton Funds, a trustee of Atlantic Mutual
Insurance Company and a director of its affiliate Centennial
Insurance Company. Age 71.
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Chairman of the Compensation Committee. Member of the Audit,
Executive Policy and Finance Committees.
MARTIN F. PURIS, Chairman, Chief Executive Officer and Chief
Creative Officer of Ammirati Puris Lintas Worldwide as of July 1,
1995, has been a director of Interpublic since 1995. From August
1994 until July 1995, Mr. Puris was Vice Chairman of Ammirati
Puris Worldwide and Chief Executive Officer of Ammirati Puris
Lintas, Inc., both of which are subsidiaries of Interpublic. Mr.
Puris, a founder of Ammirati & Puris Inc., has been with that
company since its inception in 1974, and was its President and
Chief Executive Officer from 1974 to 1994 when Interpublic
acquired that advertising agency. Age 58.
ALLEN QUESTROM, Chairman and Chief Executive Officer of
Federated Department Stores, Inc. from 1990 to the present, has
been a director of Interpublic since 1995. He is a director of
Federated Department Stores, Inc. Age 56.
Member of the Compensation and Nominating Committees.
J. PHILLIP SAMPER, Chairman, Chief Executive Officer and
President of Quadlux, Inc. from 1996 to the present, has been a
director of Interpublic since 1990. Mr. Samper was Chairman and
Chief Executive Officer of Cray Research, Inc. during 1995 and
was President of Sun Microsystems Computer Corporation from 1994
to 1995. Mr. Samper was Vice Chairman and Executive Officer of
the Eastman Kodak Company from 1986 to 1989 and a member of the
Board of Directors from 1983 to 1989. He was President and Chief
Executive Officer of Kinder-Care Learning Centers from 1990 to
1991. Mr. Samper is a director of Armstrong World Industries,
Inc., Sylvan Learning Systems, Inc., Network Storage Corp. and
Ingram Micro, Inc. Age 63.
Chairman of the Nominating Committee. Member of the Compensation
and Executive Policy Committees.
PRINCIPAL COMMITTEES OF THE BOARD OF DIRECTORS
Executive Policy Committee -- The Executive Policy Committee
is authorized to exercise all powers of the Board of Directors
which under Delaware law and the By-Laws of the Company may
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properly be delegated to a committee while the Board of Directors
is not in session, except certain powers that have been delegated
to other committees of the Board of Directors. The Executive
Policy Committee did not hold any meetings in 1996.
Finance Committee -- The Finance Committee is authorized to
review the financial affairs of the Company and make
recommendations with respect thereto to the Board of Directors.
It also approves capital budgets, guarantees of obligations of
subsidiaries and affiliates and certain capital transactions
(including mergers and acquisitions), and is the committee which
administers the Interpublic Retirement Account Plan. The Finance
Committee held twelve meetings in 1996.
Audit Committee -- The Audit Committee, whose members cannot
be officers or employees of the Company, is responsible for the
selection and retention of, subject to the approval of the Board
of Directors, and the approval of the annual compensation of, the
Company's independent accountants. The Audit Committee confers
with the independent accountants and from time to time reports to
the Board of Directors upon the scope of the auditing of the
books and accounts of the Company. It also reviews and examines
the procedures and methods employed in the Company's internal
audit program. It reviews and submits to the Board of Directors,
as soon as possible after the close of each fiscal year, the
consolidated balance sheet of the Company and its subsidiaries
and the related consolidated statements of income, of
stockholders' equity and of cash flows. The Audit Committee held
two meetings in 1996.
Compensation Committee -- The Compensation Committee is
responsible for approving the compensation paid by the Company or
any of its subsidiaries to officers of the Company or of any
subsidiary. For these purposes, compensation is deemed to
include: (1) salary, (2) deferred compensation, (3) bonuses and
other extra compensation of all types, including awards under the
Company's Management Incentive Compensation Plan, the 1996 Stock
Incentive Plan and its predecessor, the 1986 Stock Incentive
Plan, (4) insurance paid for by the Company or any of its
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subsidiaries other than group plans, (5) annuities and individual
retirement arrangements, (6) grants of performance units under
the Long-Term Performance Incentive Plan and (7) Special Deferred
Benefit Arrangements. It is the committee that administers the
Long-Term Performance Incentive Plan, the Management Incentive
Compensation Plan, the 1996 Stock Incentive Plan, the 1986 Stock
Incentive Plan, the 1986 United Kingdom Stock Option Plan and the
Employee Stock Purchase Plan (1995). The Compensation Committee
held six meetings in 1996.
Nominating Committee -- The Nominating Committee is
responsible for recommending to the Board of Directors the
persons to be nominated for election to the Board of Directors at
the Annual Meeting of Stockholders or any special meeting of
stockholders or to be selected by the Board of Directors to fill
any vacancy or any additional position created by the Board of
Directors. Stockholders who desire to recommend nominees may do
so by writing to the Secretary of the Company at the Company's
principal executive office set forth in the second paragraph on
page 1 of this Proxy Statement. Any such recommendation should
be submitted prior to December 31 of the year preceding the
Annual Meeting of Stockholders in question, and the
recommendation will be given consideration by the Nominating
Committee. The Nominating Committee held one meeting in 1996.
ATTENDANCE AT BOARD OF DIRECTORS AND COMMITTEE MEETINGS
The Board of Directors of the Company held six meetings in
1996 and committees of the Board held a total of 27 meetings.
During 1996, each of Messrs. Geier, Lowe, Puris and Samper
attended fewer than 75% of the meetings of the Board of Directors
and committees of the Board on which each director served.
However, Mr. Geier was present at all meetings of the Board.
DIRECTORS' FEES
Each director who is not an employee of the Company or one
of its subsidiaries receives an annual retainer of $24,000 for
serving as a director, an annual retainer of $2,000 for each
committee on which he or she serves, a fee of $1,000 for each
meeting of the Board attended and a fee of $1,000 for each
committee meeting attended. The Chairman of the Compensation
Committee receives an additional $3,000 per year and the Chairman
of each of the Audit and Nominating Committees receives an
additional $2,500.
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Effective June 1, 1994, an outside director with at least
five years of service has been entitled to receive an annual
retirement benefit under the Interpublic Outside Directors'
Pension Plan (the "Outside Directors' Pension Plan"). In
general, the benefit becomes payable in the month following the
month the director leaves the Board. The benefit is equal to the
amount of the annual retainer paid to the director in the year in
which he or she ceased to serve as a director and will be paid
for the same number of years as the director's years of service,
up to a maximum of 15 years. In the event of the death of a
director with a vested retirement benefit, the then present value
of the director's unpaid retirement benefits will be paid to the
surviving spouse or the estate of the director.
Effective December 31, 1995, the Outside Directors' Pension
Plan was terminated, except to the extent benefits have been
accrued prior to termination. As a result there will be no
further accruals for the benefit of existing directors under the
Outside Directors' Pension Plan for subsequent years. Any
director with fewer than five years of service on the date of
termination will not receive any benefits under the Plan.
In 1994, the stockholders of the Company approved the
Interpublic Outside Directors' Stock Incentive Plan (formerly
called the Interpublic Outside Directors' Stock Option Plan) and
adopted certain amendments to that Plan in 1996 (the Interpublic
Outside Directors' Stock Incentive Plan is referred to
hereinafter as the "Outside Directors' Plan"). The Outside
Directors' Plan provides for the issuance on the first Friday in
June in each year to each outside director serving on that date
of options to purchase the number of shares of Common Stock
having an aggregate fair market value of $30,000 on the date of
grant. The exercise price of each option is equal to the fair
market price of the Common Stock on the date of grant. Such
options become exercisable on the third anniversary after the
date of grant and expire ten years from the date of grant.
An outside director may exercise stock options granted prior
to June 1, 1996 that are exercisable on the date of cessation of
service for 90 days following cessation of service as a director,
except that an outside director who is eligible to receive a
benefit under the Outside Directors' Pension Plan may exercise
such options for five years following the date of retirement from
the Board of Directors, but in no event after the expiration of
the ten-year option term. Options granted on or after June 1,
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1996 that are exercisable at the time of cessation of service may
be exercised for a period of three years following cessation of
service, whether or not the director is eligible to receive a
benefit under the Outside Directors' Pension Plan, but in no
event after expiration of the ten-year option term.
The Outside Directors' Plan provides for a periodic grant of
2,000 restricted shares of the Company's Common Stock to all
outside directors then in office. The first grant was made on
the first Friday in June 1996. An additional grant of 2,000
shares will be made on the first Friday in June every fifth year
thereafter while the Outside Directors' Plan remains in effect.
Upon receipt of the restricted shares, the outside director
will have all rights of ownership with respect to such restricted
shares, including the right to vote and to receive dividends,
except that, prior to the expiration of a five-year period after
the date of grant (the "Restricted Period"), the outside director
will be prohibited from selling or otherwise transferring such
restricted shares. If, on or after the first anniversary of the
grant of the restricted shares, an outside director's service as
a director terminates for any reason (including death) during the
Restricted Period, the restrictions on transfer will lapse
immediately in proportion to the number of months that have
elapsed since the date of grant and the remainder of such
restricted shares will be forfeited. If an outside director's
service terminates for any reason (including death) before the
first anniversary of the date of grant of the restricted shares,
all of such restricted shares will be forfeited. The committee
administering the Outside Directors' Plan may in its discretion
direct the Company to make cash payments to an outside director
to assist in satisfying the federal income tax liability with
respect to the award or vesting of the restricted shares.
On June 7, 1996, Mr. Borelli, Mr. Olsen, Mr. Questrom, Mr.
Samper and Dr. Sisco, all outside directors at that time, each
received an award of stock options, covering 642 shares of Common
Stock with an exercise price of $46.75 per share. Each of those
directors also received at the time a grant of 2,000 shares of
the Company's Common Stock.
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COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth compensation paid by the
Company and its subsidiaries to the Chief Executive Officer and
the four other most highly compensated executive officers of the
Company who were serving as executive officers on December 31,
1996 (the "named executive officers") for services rendered in
all capacities for each year in the three-year period ended on
that date. As used in this Proxy Statement, the executive
officers of the Company are deemed to include any director of the
Company who currently serves as a chief executive officer of one
of the Company's three agency systems, McCann-Erickson Worldwide,
Ammirati Puris Lintas Worldwide and The Lowe Group. In addition
to the named executive officers who are employed by Interpublic,
the Company has designated as its other executive officers its
Senior Vice President-Human Resources, its Vice President,
General Counsel and Secretary, its Senior Vice
President-Financial Operations, its Senior Vice
President-Planning and Business Development and its Vice
President and Controller.
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<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION> __LONG TERM COMPENSATION ___
______ ANNUAL COMPENSATION _______ ____ AWARDS ____ PAYOUTS
Other Restr All
Name Annual icted Securities Other
and Principal Fiscal Compen Stock Underlying LTIP Compen
Position Year Salary Bonus sation Awards Options Payouts sation
<F6> <F8> <F10> <F11> # <F13>
<F7> <F9> <F12> <F14>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Philip H. Geier, Jr.
Chairman of the 1996 $965,000 $1,200,000 $ 89,642 $ -0- $108,000 $567,000 $ 9,557
Board of Direc- 1995 965,000 868,600 - 4,605,000 108,000 843,750 9,558
tors and Chief 1994 965,000 550,000 $106,841 -0- -0- -0- 8,550
Executive Officer
Eugene P. Beard
Vice Chairman- 1996 $750,000 $ 900,000 $ - $ -0- 113,328 $333,375 $ 9,557
Finance and 1995 662,500 588,245 - 2,878,125 63,972 375,000 7,483
Operations, Chief 1994 575,000 400,000 47,485 -0- -0- -0- 8,549
Financial Officer
and Director
John J. Dooner, Jr.
Chairman of McCann- 1996 $750,000 $ 770,000 $ 74,393 $ -0- 60,000 $354,375 $ 7,726
and Director 1995 685,000 550,000 59,640 -0- 55,080 535,750 7,009
of Interpublic 1994 600,000 375,000 84,949 2,816,795 -0- -0- 7,445
Frank B. Lowe
Chairman of The Lowe 1996 $750,000 $ 600,000 $257,561 $3,510,938 60,000 $459,000 $ 8,550
Group and Director 1995 660,000 475,000 267,366 -0- 30,000 472,500 8,082
of Interpublic 1994 660,000 375,000 101,685 -0- -0- -0- 8,082
Martin F. Puris
Chairman of Ammirati 1996 $750,000 $ 600,000 $ 52,573 $ -0- 60,000 $ -0- $ 54,464
Puris Lintas World- 1995 712,500 475,000 - 1,273,125 27,000 -0- 50,638
wide and Director 1994 240,097 -0- - -0- -0- -0- 1,900,528
of Interpublic
PAGE
<PAGE>
<FN>
<F6> The salaries of executive officers continuing to serve in the same position are reviewed every two years.
<F7> Mr. Puris became employed by one of Interpublic's subsidiaries on August 10, 1994, at the time Interpublic acquired
Ammirati & Puris Holdings Inc.
<F8> Consists primarily of bonus payments made pursuant to the Company's Management Incentive Compensation Plan.
<F9> Mr. Puris has irrevocably waived a bonus in the amount of $1.5 million that was to become due in 1996. In lieu
thereof, he has received a retirement/survivor benefit as more fully described under the heading "Special Deferred
Benefit Arrangements" in this Proxy Statement.
<F10> Other Annual Compensation for 1996 includes $24,078 in medical/dental coverage and $32,221 in club dues paid on behalf
of Mr. Geier, $24,078 in medical/dental coverage and $28,735 paid in respect of spousal travel on behalf of Mr.
Dooner, $200,000 in housing expenses paid to Mr. Lowe, and $18,339 for use of a company car and $13,874 in parking
expenses paid to Mr. Puris.
Other Annual Compensation for 1995 includes $17,490 in medical/dental coverage and $16,407 paid in respect of spousal
travel on behalf of Mr. Dooner and $216,667 in housing expenses paid to Mr. Lowe.
Other Annual Compensation for 1994 includes $31,728 paid in respect of spousal travel on behalf of Mr. Dooner and
$62,061 paid in respect of spousal travel for Mr. Lowe.
<F11> Restricted stock grants covering 8,620 shares were made to Mr. Dooner in 1994 under the 1986 Stock Incentive Plan (the
"1986 Plan") in exchange for phantom shares held under the Long-Term Performance Incentive Plan for the 1991-1994
performance period at 120% of their value on the date of exchange pursuant to an arrangement approved by stockholders
at the 1993 Annual Meeting.
<F12> The number and value of shares of restricted stock held by the named executive officers under the 1986 Plan at
December 31, 1996 (based on the closing price of the Common Stock on December 31, 1996) are as follows: Mr. Geier -
187,604 shares ($8,911,190); Mr. Beard - 105,162 shares ($4,995,195); Mr. Dooner - 130,591 shares ($6,203,073); Mr.
Lowe - 285,436 shares ($13,558,210) and Mr. Puris - 35,000 shares ($1,662,500). The restricted stock awarded to all
named executive officers other than Mr. Dooner was issued with at least a five-year vesting period, subject to the
discretion of the Committee administering the Plan to release the restrictions not earlier than one year after the
issue date. Of the restricted stock awarded to Mr. Dooner in March 1994, shares that have vested in less than three
years from the date of grant are as follows: 5,750 shares on December 15, 1995, and 2,875 shares on December 15, 1996.
Dividends on restricted stock are paid on the same basis as ordinary dividends on the Common Stock.
PAGE
<PAGE>
<F13> Payouts under the Long-Term Performance Incentive Plan are made at the end of four-year performance periods. These
four-year periods begin at two-year intervals. An interim payment of approximately 50% of the total payout for the
1993-1996 performance period was made in December 1996 and is shown on the Table. The balance was paid in the first
quarter of 1997 and is not shown on the Table. Mr. Beard's payout was deferred until his retirement.
<F14> Other Compensation for 1996 consisted of: (i) the following amounts paid to the named executive officers as matching
contributions under the Interpublic Savings Plan - Mr. Geier - $6,749; Mr. Beard - $6,749; Mr. Dooner - $7,030; and
Mr. Lowe -$6,750; (ii) premiums paid by the Company on group life insurance - Mr. Geier - $2,808; Mr. Beard - $2,808;
Mr. Dooner - $696; Mr. Lowe - $1,800; and Mr. Puris - $1,800; and (iii) premiums aggregating $52,664 paid by the
Company for Mr. Puris consisting of: (a) life insurance policies on the life of Mr. Puris including (i) premiums for
two split-dollar life insurance policies totaling $13,269; and (ii) premiums on two other life insurance policies
totaling $31,602; and (b) a disability insurance policy, the premiums for which were $7,793.
</TABLE>
PAGE
<PAGE>
<TABLE>
Stock Option Grants In 1996
________________________________________________________________________________________________________________________
The following table provides information on grants of stock options in 1996 to the named executive officers and the
estimated grant date present value of the options.
________________________________________________________________________________________________________________________
<CAPTION>
Individual Grants
________________________________________________________________________________________________________________________
% of Total Grant Date
Number of Options Granted Present
Securities Underlying to Employees in Exercise Expiration Value
Options Granted Fiscal Year Price ($/Sh) Date ($)
<F14><F15> <F16><F17>
<S> <C> <C> <C> <C> <C>
Philip H. Geier, Jr. 108,000 4.62% $47.9375 5/20/06 $ 2,264,760
Eugene P. Beard 23,328 0.9987% 40.1250 1/16/06 373,015
90,000 3.8532% 47.9375 5/20/06 1,887,300
John J. Dooner, Jr. 60,000 2.57% 47.9375 5/20/06 1,258,200
Frank B. Lowe 60,000 2.57% 47.9375 5/20/06 1,258,200
Martin F. Puris 60,000 2.57% 47.9375 5/20/06 1,258,200
<FN>
<F14> Mr. Beard's grant of a stock option covering 23,328 shares was awarded on January 16, 1996 pursuant to the 1986
Stock Incentive Plan. This option has a ten-year term and an exercise price equal to 100% of the fair market
value of the Common Stock on the date of grant. The option becomes exercisable on January 1, 1998.
<F15> All other options were granted on May 20, 1996 pursuant to the 1986 Stock Incentive Plan. Each option has a
ten-year term and an exercise price equal to 100% of the fair market value of the Common Stock on the date of
the grant. The options become exercisable on January 1, 2001.
PAGE
<PAGE>
<F16> The grant date present value of the January 16, 1996 options set forth in the table is based on the
Black-Scholes Option Pricing Model and assumes that the options are held until they expire on January 16, 2006.
The calculations are based on the following set of assumptions: volatility of 25.22%, dividend yield of 1.55%
and risk-free rate of return of 5.84%.
<F17> The grant date present value of the May 20, 1996 options set forth in the table is based on the Black-Scholes
Option Pricing Model and assumes that the options are held until they expire on May 20, 2006. The calculations
are based on the following set of assumptions: volatility of 24.95%, dividend yield of 1.42% and risk-free
rate of return of 6.86%.
</TABLE>
PAGE
<PAGE>
<TABLE>
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
________________________________________________________________________________________________________________________
The following table provides information on stock option exercises and the number and the year-end value of options held
by the named executive officers.
_______________________________________________________________________________________________________________________
<CAPTION> Number of Shares Value of
Underlying Unexercised
Unexercised Options at In-The-Money Options
December 31, 1996 December 31, 1996
(#) ($)<F18>
______________________ ____________________
Shares
Acquired
on Value Unexer Unexer
Name Exercise (#) Realized ($) Exercisable cisable Exercisable cisable
<S> <C> <C> <C> <C> <C> <C>
Philip H. Geier, Jr. 8,000 $227,775 386,358 313,200 $10,439,472 $3,363,525
Eugene P. Beard None -0- 179,710 224,100 4,766,452 1,959,712
John J. Dooner, Jr. None -0- 32,500 136,680 732,844 1,211,498
Frank B. Lowe None -0- -0- 113,400 -0- 856,613
Martin F. Puris None -0- -0- 87,000 -0- 390,563
<FN>
<F18> Based on the closing price of the Company's Common Stock on December 31, 1996.
</TABLE>
PAGE
<PAGE>
EMPLOYMENT CONTRACTS, TERMINATION OF
EMPLOYMENT AND CHANGE-IN-CONTROL ARRANGEMENTS
EMPLOYMENT AGREEMENTS
Each of the named executive officers has employment contracts
with the Company providing for the annual compensation and
termination dates set forth below:
Expiration
Name Salary <F19> Date <F20>
Philip H. Geier, Jr. $965,000 June 30, 2001
Eugene P. Beard 750,000 December 31, 1998
John J. Dooner, Jr. 750,000 December 31, 1998
Frank B. Lowe 750,000 December 31, 2000
Martin F. Puris 750,000 August 10, 1999
<F19> Salaries do not include compensation pursuant to
Special Deferred Benefit Arrangements described below.
<F20> Each employment contract described above is terminable
by either party at any time upon twelve months' notice,
except that the Employment Agreement with Mr. Puris
permits him to terminate that contract on six months'
notice.
PAGE
<PAGE>
SPECIAL DEFERRED BENEFIT ARRANGEMENTS
Mr. Beard is a party to three agreements which provide that
if he dies while he is employed by the Company amounts
aggregating $194,000 per year will be paid to his beneficiaries
for 15 years following his death. Alternatively, he will be paid
benefits for 15 years of $194,000 per year if he retires on or
after his 60th birthday. The Company also has entered into an
agreement with Mr. Beard which provides that if he dies while he
is employed by the Company the amount of $230,000 per year will
be paid to his beneficiaries for 15 years following his death.
Alternatively, he will be paid an annual benefit of $230,000 for
15 years if he retires on or after July 18, 1998. This benefit
will be forfeited if Mr. Beard, without the consent of the
Compensation Committee, were to leave the Company prior to July
18, 1998 for any reason except death or disability.
Mr. Dooner is a party to two agreements which provide that
if he dies while he is employed by the Company amounts
aggregating $186,000 per year will be paid to his beneficiaries
for 15 years following his death. Alternatively, if he retires,
resigns or is otherwise no longer in the employment of the
Company on or after his 55th birthday he will be paid benefits
for 15 years ranging from $130,200 to $186,000 per year depending
upon the year his employment terminates. In the event Mr.
Dooner's employment terminates prior to his 55th birthday, other
than by reason of death, he will be paid lesser sums but not less
than an aggregate of $300,000. The Company also has entered into
an agreement with Mr. Dooner which provides that if he dies while
he is employed by the Company, his beneficiaries would receive
$88,500 annually for 15 years. Alternatively if he retires from
the Company on or after July 18, 1998, the Company will pay him
retirement benefits at the rate of $88,500 per year for 15 years.
This benefit will be forfeited if Mr. Dooner, without the consent
of the Compensation Committee, were to leave the Company prior to
July 18, 1998 for any reason except death or disability.
PAGE
<PAGE>
Mr. Geier is a party to two agreements which provide that if
he dies while he is employed by the Company amounts aggregating
$160,000 per year will be paid to his beneficiaries for 15 years
following his death. Alternatively, he will be paid benefits for
15 years of $160,000 per year if he retires on or after his 60th
birthday. The Company also has entered into an agreement with
Mr. Geier which provides that if he dies while he is employed by
the Company the amount of $255,000 per year will be paid to his
beneficiaries for 15 years following his death. Alternatively,
he will be paid an annual benefit of $255,000 for 15 years if he
retires on or after July 18, 1998. This benefit will be
forfeited if Mr. Geier, without the consent of the Compensation
Committee, were to leave the Company prior to July 18, 1998 for
any reason except death or disability.
Mr. Lowe is a party to an agreement which provides that if
he dies while he is employed by the Company $158,400 per year
will be paid to his beneficiaries for 15 years following his
death. If he retires on or after his 60th birthday, he will be
paid a benefit of $158,400 per year for 15 years. If he retires,
resigns or his employment is terminated on or after his 55th
birthday, but prior to his 60th birthday, he will be paid
benefits ranging from $72,864 to $148,896 per year for 15 years
based on the year his employment terminates. The Company also
has entered into an agreement with Mr. Lowe that provides that if
he dies while he is employed by the Company, an amount of
$133,200 per year will be paid to his beneficiaries for 15 years
following his death. If he retires on or after his 64th
birthday, he will receive a benefit of $133,200 per year for 15
years. If he retires or resigns or his employment is terminated
on or after his 60th birthday, but prior to his 64th birthday, he
will receive benefits for a period of 15 years ranging from
$60,952 to $117,216 per year, depending upon the year his
employment terminates.
Mr. Puris is a party to an agreement which provides that if
he dies while he is employed by the Company, his beneficiaries
will receive payments of $300,000 per year for 15 years following
his death. If he retires on or after his 65th birthday, Mr.
Puris will receive retirement benefits of $300,000 per year for
15 years. If he retires, resigns or his employment is terminated
on or after his 63rd birthday, but prior to his 65th birthday, he
PAGE
<PAGE>
will be paid benefits ranging from $230,000 to $265,000 per year
for 15 years, depending upon the year his employment terminates.
In the event the employment of Mr. Puris were to terminate prior
to his 63rd birthday, he would receive a lump-sum amount that in
any case would not be less than $1,500,000.
A deferred compensation trust for the purpose of funding up
to 35% of the gross retirement benefit obligations of the Company
under these Special Deferred Benefit Arrangements and other
deferred arrangements was established in 1990.
EXECUTIVE SEVERANCE AGREEMENTS
Messrs. Beard, Dooner, Geier and Lowe each have an agreement
with the Company pursuant to which (a) sums previously deferred
pursuant to employment agreements, Special Deferred Benefit
Agreements and the Management Incentive Compensation Plans of the
Company and its subsidiaries would become payable within 30 days
following a "Change of Control" of the Company, if the individual
had so elected prior to the Change of Control, and (b) a cash
severance payment would become payable to such individual if,
within two years after the Change of Control, his employment
should be terminated by the Company (except for "Cause") or the
individual should resign for "Good Reason".
The agreements provide that a Change of Control occurs if:
(a) any person other than Interpublic or any of its subsidiaries,
becomes the beneficial owner (within the meaning of Rule 13d-3 of
the Securities Exchange Act of 1934, as amended) of 30% or more
of the combined voting power of Interpublic's then outstanding
voting securities; (b) the stockholders approve an agreement to
merge or consolidate with another corporation (other than a
subsidiary of Interpublic) or an agreement to sell or dispose of
all or substantially all of the business or assets of
Interpublic; or (c) during any period of two consecutive years,
individuals who, at the beginning of such period, constituted the
Board of Directors cease for any reason to constitute at least a
majority thereof, unless the election or the nomination for
election by Interpublic'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.
The agreements provide, for purposes of determining an
Executive's right to receive severance payments only, that
Interpublic shall have Cause to terminate an executive, following
a Change of Control, if the executive: (a) engages in conduct
PAGE
<PAGE>
that constitutes a felony and that results in the personal
enrichment of the executive at the Company's expense; (b) refuses
to substantially perform his responsibilities for the Company; or
(c) deliberately and materially breaches any agreement between
himself and the Company and fails to remedy that breach within a
30-day cure period.
For purposes of determining an executive's right to receive
severance payments only, an executive under the terms of the
agreements may resign for "Good Reason" if, without his consent,
in any circumstance other than his disability, his office in the
Company or the geographical area of his employment should be
changed or his compensation should not continue to be paid and
increased on the same basis as had been in effect prior to the
Change of Control or the individual should determine in good
faith that the Company had, without his consent, effected a
significant change in his status within, or the nature or scope
of his duties or responsibilities with, the Company and the
Company failed to cure such situation within 30 days after
written notice from the individual.
The severance payment would be three times the individual's
average annual compensation during the two calendar years ended
prior to the date of the Change of Control, plus a partial annual
bonus based on the prior year's bonus prorated for the elapsed
portion of the year in which employment terminated. The average
compensation used in calculating the severance payment would be
the individual's taxable compensation plus any deferred
compensation accrued during the two relevant years but would not
include any deferred compensation earned in prior years but paid
in those years and would not include any taxable compensation
relating to any stock option or restricted stock plan of the
Company.
Each agreement includes a covenant by the individual
providing that if the individual's employment terminates in
circumstances entitling him to a severance payment, he will, for
a period of 18 months following the termination of his
employment, neither (a) solicit any employee of the Company or
any of its subsidiaries to leave such employ to enter into the
employ of the individual, or any person or entity with which the
individual is associated, nor (b) solicit or handle, on his own
behalf or on behalf of any person or entity with which he is
associated, the advertising, public relations, sales promotion or
market research business of any advertiser which was a client of
the Company or any of its subsidiaries on the date the
individual's employment terminates.
PAGE
<PAGE>
The agreements give the individuals who are parties thereto
an option to limit payment under the agreements to such sum as
would avoid subjecting the individual to the excise tax imposed
by Section 4999 of the Internal Revenue Code.
GENERAL
Since the beginning of 1996, repurchases by the Company of
shares of Common Stock under its publicly-announced stock
repurchase program have included an aggregate of 5,000 shares
offered to the Company by Barry Linsky, Senior Vice
President-Planning and Business Development of Interpublic. The
shares were purchased at the then current market price of the
Common Stock.
In connection with the acquisition of Ammirati & Puris,
Inc., Interpublic agreed to accept the terms of a loan made prior
to the acquisition by Ammirati & Puris, Inc. to Mary Herrmann,
Mr. Puris' wife. As of March 31, 1996, this note was repaid in
full. The largest principal amount outstanding during 1996 was
$75,000. Interest at the average rate of 5.79% was imputed to
Ms. Herrmann and included in her reportable income for 1996.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Shortly after he became a director of the Company in July
1996, Mr. Brack purchased shares of the Company in one
transaction that he was required, but did not report, to the
Securities and Exchange Commission on Form 4. He reported the
purchase on Form 5 that was filed timely with the Securities and
Exchange Commission.
RETIREMENT PLAN
As of January 1, 1992, the Company adopted the Interpublic
Retirement Account Plan to provide benefits under a "cash balance
formula" to employees of Interpublic and most of its domestic
subsidiaries who have at least five years of service. Each year
a participant's account balance is credited with an amount equal
to a percentage of the participant's annual compensation plus
interest credits. The percentage of annual compensation varies
based on the sum of the participant's age and years of service
from 1.5% for participants with a sum less than 40 years to 5%
for participants with a sum of 80 or more years. Interest
credits are based on the 1-year Treasury Bill Rate plus 1
percentage point, compounded quarterly, and are guaranteed at a
minimum rate of 5%. Employees who qualify for retirement may
receive their benefits as early as the first day of the month
that follows retirement. For employees who do not qualify for
retirement, benefits may be withdrawn in a single lump sum or in
PAGE
<PAGE>
annuity form as of the first day of January following the first
anniversary of termination of employment.
Prior to January 1, 1992, employees employed by the Company
and most of its domestic subsidiaries who had attained the age of
21 and had at least five years of service were entitled to
receive a monthly benefit upon retirement pursuant to a defined
benefit pension formula. Until July 31, 1987, the monthly
benefit was computed as a percentage of average monthly
compensation during the five consecutive calendar years with
highest compensation with certain exclusions. The percentage of
average monthly compensation used to calculate the monthly
benefit was determined by multiplying the number of years of
accredited service (which is defined in the Plan as the period of
participation in the Plan) by 1.3%. Beginning July 31, 1987, the
method of calculating the pension benefit was changed to a career
average formula based on annual compensation. The percentage of
annual compensation used to calculate the benefit was 1% of each
year's compensation up to $15,000 plus 1.3% of any compensation
in excess of that amount.
Participants under the defined benefit pension formula on
December 31, 1991, had their normal retirement benefit converted
on an actuarial basis into an "opening cash balance" as of
January 1, 1992. This opening cash balance was incorporated into
the participant's cash balance benefit under the Interpublic
Retirement Account Plan and became eligible for interest credits
and withdrawal on the same terms that apply to other amounts
accrued under the cash balance formula. In addition,
participants continued to accrue benefits pursuant to the career
average formula and became eligible to receive upon retirement
the higher of (1) the participant's benefit under the cash
balance formula or (2) the participant's accrued retirement
benefit under the career average formula as of December 31, 1991,
plus any accrual after that date calculated pursuant to the
career average formula. Employees joining the Company after
December 31, 1991 are eligible to accrue benefits only under the
cash balance formula.
With certain minor exceptions, "compensation" under the
career average formula as well as the cash balance formula
includes all compensation subject to Federal income tax
withholding, including deferred compensation paid during the year
and non-cash items on which withholding is required, such as
shares of restricted stock as to which restrictions have
terminated. Compensation also includes contributions made to the
Savings Plan on a pre-tax basis pursuant to Section 401(k) of the
Internal Revenue Code. Annual compensation for pension accruals
since December 31, 1988 has been limited by Federal tax law.
Currently, the limit is $160,000, plus cost-of-living
adjustments.
PAGE
<PAGE>
Benefits under the cash balance formula and the career
average formula are not reduced by social security payments or by
payments from other sources. Joint and survivor and guaranteed
minimum payment options, with reduced pensions, are available
upon retirement subject to certain limitations. All benefits are
funded through a trust.
The estimated annual retirement benefit that each of the
named executive officers would receive at normal retirement age,
payable as a straight life annuity, is given as follows: Mr.
Beard - $114,374; Mr. Dooner - $88,639; Mr. Geier - $125,000; Mr.
Lowe - $32,276 and Mr. Puris - $9,549. The current Internal
Revenue Code limit for annual retirement benefits is $125,000.
Alternatively, each of the named executive officers could take
the benefit as a lump sum estimated as follows: Mr. Beard -
$1,185,508; Mr. Dooner - $918,769; Mr. Geier - $1,276,038; Mr.
Lowe - $334,548 and Mr. Puris - $96,437.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In July 1996, Interpublic, in consideration for a payment in
cash of $250,000, acquired a 2.5% equity interest in Investment
Sciences Systems LLC ( ISS"), a company in which Leif H. Olsen
Investments, Inc. ( LHOI") had an investment. ISS was formed to
acquire rights in and to market a software technology (the
"Software Technology") that ISS believes will be useful to
financial managers in developing global investment strategies and
programs of risk allocation for their clients. Mr. Olsen, a
director of Interpublic, and his son are principals of LHOI,
economic consultants and financial managers. As the result of
Interpublic's investment in ISS and other services rendered by
Mr. Olsen, LHOI received a 2.5% equity interest in ISS valued at
the time of the investment at $250,000. LHOI and ISS also agreed
to form a joint venture, in which each have a 50% interest, to
manage third-party funds (the "Fund Manager"). In consideration
for past services rendered by LHOI to ISS and its predecessor in
the development of the Software Technology, ISS has granted to
the Fund Manager a perpetual non-exclusive license to use the
Software Technology for its money management activities. The
Fund Manager currently is inactive.
PAGE
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Compensation Policies for Executive Officers
In 1996, the Compensation Committee of the Company consisted
of six experienced outside directors. Each of the members of the
Compensation Committee has served and continue to serve on a
number of other corporate boards in a similar capacity. All
members have extensive knowledge of compensation practices in the
private business sector generally.
The objective of the Company's executive compensation
program is to provide key executives with short and long-term
compensation opportunities that will enhance shareholder value by
motivating executives, increasing retention and rewarding
outstanding individual and Company performance.
The compensation paid to executives consists of a base
salary and incentive compensation. Base salary generally
reflects the executive's level of responsibility, performance and
experience. Incentive compensation opportunities are provided
pursuant to one or more of the following three
shareholder-approved incentive plans:
Management Incentive Compensation Plan (the "MICP"),
which is an annual bonus plan that establishes a bonus
pool based on profits for the last-completed fiscal
year. Individual awards are made based on performance
and are typically paid in cash but may be paid in
stock.
Long-Term Performance Incentive Plan (the "LTPIP"),
which provides for biennial awards of performance units
each having a four-year term. These awards entitle a
participating executive to receive cash payments based
on the extent to which long-term operating profit
targets are achieved by the division or entity of the
Company for which the executive is responsible.
Stock Incentive Plans, which provide for the issuance
of stock options and restricted stock. These
instruments increase in value over time only if the
market price of Interpublic Common Stock increases.
They are usually forfeited in the absence of action by
the Committee if an executive leaves the Company within
a specified period following the date of the award.
PAGE
<PAGE>
The determination of the amount and form of executive
compensation, including incentive compensation, paid to each
executive officer of the Company is made by the Committee based
on a discretionary evaluation, after taking into account a range
of factors that may include:
(i) The financial results of the Company and the
anticipated developments in the advertising industry.
(ii) The total annualized compensation for the particular
executive based on salary, bonus and incentive
compensation.
(iii) The accumulated value of incentive compensation
previously provided such as stock options, restricted
stock or performance units.
(iv) The current and future financial and tax impact on the
Company and on the executive of benefits under the
Company's compensation plans.
(v) The particular achievements of the executive.
(vi) The talents and unique qualities of the executive, and
the value of his or her accumulated experience with the
Company as those factors are relevant to the future
management of the Company.
There is no pre-determined weight assigned to any of the
above factors; however compensation decisions by the Committee
are greatly influenced by the annual financial performance of the
Company.
The Committee's overall knowledge and experience of
executive compensation practices provides the basis for making
the subjective evaluations which in part determine the salaries
paid and the incentive awards made to the executive officers.
1996 Compensation of Executive Officers
During 1996, Mr. Lowe was the only named executive officer
who received a salary increase. Other executive officers not
listed on the Summary Compensation Table received salary
increases in 1996 in accordance with the Company's review
policies. Salary increases are based on personal performance,
promotions and overall financial results. Other than with
respect to promotional increases, increases in salary generally
are not awarded more frequently than once every two years.
PAGE
<PAGE>
Under the MICP annual bonuses to officers and key employees
of the Company and its subsidiaries are paid from an annual bonus
pool that may not exceed 5% of the amount by which consolidated
pre-tax income on a worldwide basis exceeds 15% of the average
equity capital of the Company in the immediately preceding
calendar year. In 1996, total MICP payments to executive
officers were higher than in 1995 as a result of the Company
satisfying and exceeding its annual business plan and objectives,
including achievement of targeted revenue, profit and net income
margins, before the effect of a non-cash charge to record the
impairment of assets and related goodwill.
In 1996, no awards of performance units were granted under
the LTPIP to executive officers.
Under the Stock Incentive Plan, stock options and restricted
stock may be awarded to officers and key employees of the Company
and its subsidiaries. Stock options are granted on such terms as
are approved by the Committee, provided that the term of the
option may not exceed ten years and the exercise price may not be
less than the market price of the Common Stock on the date of
grant. Shares of restricted stock granted are restricted as to
transfer for a minimum of five years from date of grant and are
forfeited if the executive should leave the employment of the
Company, unless the Compensation Committee deems otherwise. In
determining individual grants of stock options and restricted
stock the Committee takes into consideration the number of years
since previous grants, the financial performance of the Company
over recent years in terms of annual operating margin, revenue
and operating profit growth and the growth of shareholders value
and the overall compensation and performance of the executive.
The Committee also reviews various outside survey data pertaining
to the pattern of grants made by other companies having
approximate capitalization and growth similar to those of
Interpublic (including several of the companies in the Peer Group
Index, appearing in the two performance graphs that follow this
Report).
A total of 83,000 shares of restricted stock were granted to
three executive officers during the year in recognition of
individual achievements.
Stock option awards that are granted together with LTPIP
awards are normally made biennially during odd numbered years.
The Committee can and has in the past, awarded grants of stock
options in the year prior to the start of a performance period of
PAGE
<PAGE>
the LTPIP. In anticipation of LTPIP awards for the 1997-2000
performance period, the Committee in 1996 made grants of stock
options under the 1986 Stock Incentive Plan, including the stock
option grants to the named executive officers described in the
Stock Option Grant Table. The number of stock options awarded
each executive officer was based on the judgment of the
Committee. The Committee considered such factors as each
executive's level of responsibility in the Company, the
executive's overall performance and his anticipated or expected
contribution to the continued success of the Company. The
Committee also reviewed various outside survey data as stated
above. Mr. Beard's stock option award for 1996 included a grant
covering 23,328 shares which was made in conjunction with the
1995-1998 performance period of the LTPIP.
Stock option grants made in anticipation of LTPIP grants and
covering an aggregate of 79,800 shares of Common Stock were made
to five executive officers other than the named executive
officers during the year.
Stock options covering an aggregate of 14,000 shares and
unrelated to any LTPIP awards to be made in the future were
granted to three executive officers other than the named
executive officers.
Tax Law Changes
Under the federal income tax laws, the deduction that a
publicly-held company is allowed for compensation paid to the
chief executive officer and to its other four most highly
compensated executive officers generally is limited to $1 million
exclusive of qualifying performance-based compensation. The
Committee has and will continue to consider ways to maximize the
deductibility of executive compensation, including the
utilization of performance- based plans, while retaining the
discretion the Committee deems necessary to compensate executive
officers in a manner commensurate with performance and the
competitive environment for executive talent. In 1995,
shareholders approved changes to the MICP, which included
performance-based criteria and limits that the Committee could
use in determining individual MICP awards. The LTPIP
historically has been a performance-based plan. The Stock
Incentive Plan and the proposed 1997 Performance Incentive Plan
set forth in Appendix A of this Proxy Statement, contain
PAGE
<PAGE>
provisions relating to stock option grants and performance units
to be granted thereunder that are intended to make the awards
thereunder eligible for performance-based compensation exclusive
from the $1 million limitation.
Compensation of Chief Executive Officer
During 1996, Philip H. Geier, Jr., the Company's Chairman of
the Board and Chief Executive Officer received a salary of
$965,000, a level that has been unchanged since 1991. Mr. Geier
received a MICP award for 1996 of $1,200,000.
Mr. Geier's 1996 MICP award was based on a number of factors
including an increase of 22% in net income, an increase of 19% in
earnings per share, an increase of 16% in gross income, in each
case before the effect of a non-cash charge to record the
impairment of assets and related goodwill all of which in the
opinion of the Committee led to a continued significant increase
in shareholder value.
Mr. Geier's stock option grant of 108,000 shares made in
conjunction with the anticipated awards for the 1997-2000
performance period of the LTPIP, is at the same level that he
received in conjunction with the 1995-1998 LTPIP, when Mr. Geier
was granted the maximum award for his participation level. The
Committee considered, in addition to the factors set forth under
the heading Compensation Policies for Executive Officers" of
this Report, the Company's compensation strategy of tying a major
portion of a key executive's compensation to the value of
Interpublic stock. As of December 31, 1996, a substantial
portion of the value of Mr. Geier's entire annualized
compensation package is based on or related to the future
performance of Interpublic stock.
Leif H. Olsen, Chairman
Frank J. Borelli
Reginald K. Brack
Allen Questrom
J. Phillip Samper
Joseph J. Sisco
PAGE
<PAGE>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN <F21>
THE INTERPUBLIC GROUP OF COMPANIES, INC. COMMON STOCK,
THE S&P 500 AND PEER GROUP INDEX <F22>
_______________________________________________________________
1991 1992 1993 1994 1995 1996
Interpublic 100.00 123.64 115.32 117.76 161.53 179.49
S & P 500 100.00 107.61 118.41 120.01 164.95 202.73
Peer Group 100.00 124.51 135.96 147.14 197.44 254.62
- -----------------------------------------------------------------
<F21> Assumes $100 is invested on December 31, 1991, and that
all dividends are reinvested.
<F22> The Peer Group Index includes Interpublic and in
addition consists of Cordiant plc (formerly Saatchi &
Saatchi plc), Omnicom, True North Communications Inc.
(formerly Foote Cone & Belding), Grey Advertising and
WPP Group. Total shareholder return is weighted
according to market capitalization at the beginning of
each annual period.
PAGE
<PAGE>
<TABLE>
COMPARISON OF ELEVEN-YEAR CUMULATIVE TOTAL RETURN OF <F23>
THE INTERPUBLIC GROUP OF COMPANIES, INC. COMMON STOCK,
THE S&P 500 AND PEER GROUP INDEX <F24>
The table below contains the data points used in the Performance Graph that appears in the printed proxy statement.
_________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
Interpublic 100.00 131.81 155.78 184.45 250.70 275.13 458.16 566.49 528.34 539.52 740.09 822.34
S&P 500 100.00 118.62 124.76 145.34 191.25 185.30 241.51 259.88 285.96 289.84 398.37 489.60
Peer Group 100.00 106.87 112.00 115.03 132.02 93.23 135.70 168.97 184.50 199.68 267.93 345.53
_________________________________________________________________________________________________________________________
<FN>
<F23> Assumes $100 is invested on December 31, 1985, and that all dividends are reinvested.
<F24> The Peer Group Index includes Interpublic, and in addition consists of Cordiant plc (formerly Saatchi & Saatchi
plc), Omnicom, True North Communications Inc. (formerly Foote Cone & Belding), Grey Advertising and WPP Group.
Total shareholder return is weighted according to market capitalization at the beginning of each annual period.
An important objective of the Company is to create long-term reward for shareholders. Accordingly the table that
appears above has been presented to show comparative cumulative return over an eleven-year period.
</TABLE>
PAGE
<PAGE>
2. PROPOSAL TO INCREASE AUTHORIZED SHARES OF COMMON STOCK
On March 20, 1997, the Company's Board of Directors adopted
a resolution proposing that Article 4 of the Company's Restated
Certificate of Incorporation be amended to increase the number of
authorized shares of Common Stock, $.10 par value, from
150,000,000 to 225,000,000 shares. In addition to the _______
shares of Common Stock outstanding at March __, 1997, a total of
_____ shares were reserved for issuance pursuant to various
employee benefit plans and a total of _____ shares are reserved
for issuance upon the conversion of outstanding subordinated
convertible debentures. This leaves an aggregate of ____
unissued shares that are not reserved for issuance.
Purposes of Increase
The Board of Directors believes that it is in the best
interests of the Company and its stockholders to make additional
shares available for issuance from time to time in order to have
the flexibility to meet such corporate purposes and needs as may
be determined by the Board of Directors to be proper and as may
arise from time to time, including a possible stock split. In
addition, such purposes and needs may include increases in
capital through one or more offerings of Common Stock or the
issuance of shares of Common Stock in exchange for the
acquisition of other companies or properties. If the proposed
amendment to the Restated Certificate of Incorporation is
approved, the additional shares will be available for issuance at
such times as the Board of Directors deems advisable without
further action of the Company's stockholders, except to the
extent required by law or the rules of any stock exchange on
which the Company's securities are listed by reason of the
nature of the transaction in which the shares are to be issued.
Stockholders will not have preemptive rights to purchase any
of the additional authorized shares of Common Stock.
Under the laws of Delaware, the jurisdiction of the
Company's incorporation, the affirmative vote of the majority of
all outstanding shares of Common Stock is necessary for the
adoption of the proposed amendment to the Restated Certificate of
Incorporation.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
PAGE
<PAGE>
3. ADOPTION OF THE 1997 PERFORMANCE INCENTIVE PLAN
The Company's Board of Directors (the Board") has adopted,
and is submitting to stockholders for approval, The Interpublic
Group of Companies, Inc. 1997 Performance Incentive Plan (the
Plan"). If approved by stockholders, the Plan will replace the
1996 Stock Incentive Plan, the Company's current stock incentive
plan (the 1996 Plan"), and the Management Incentive Compensation
Plan, the Company's annual bonus plan (the MICP").
Description of the Plan
The text of the Plan is attached hereto as Annex A. the
following description of the Plan is qualified in its entirety by
reference to the text of the Plan.
Purposes of the Plan. The purposes of the Plan are to
promote the interests of the Company and its shareholders, and to
further align the interests of shareholders and the participants
in the Plan, by (i) attracting, retaining, and motivating the
individuals who are the participants in the Plan, (ii) providing
the participants in the Plan with incentives tied to the
achievement of business, financial, and strategic objectives of
the Company and its subsidiaries and affiliates, and (iii)
providing the participants in the Plan with equity-based
incentives and subsequent equity ownership opportunities,
including incentives and opportunities tied to the Common Stock
of the Company.
Administration. The Plan will be administered by a
committee that satisfies the requirements of Rule 16b-3 under the
Securities Exchange Act of 1934, as amended (the Exchange Act"),
and accordingly will be composed solely of two or more members of
the Board of Directors who are not employees of the Company and
who do not have any other disqualifying affiliations with the
Company (the Committee"). If the Committee deems it advisable,
the Committee may delegate its authority under the Plan to the
extent permitted by applicable law, except that no such
delegation of authority is permitted with respect to the
participation in the Plan of persons who are subject to Section
16 of the Exchange Act.
<PAGE>
<PAGE>
Eligibility. Any employee of the Company, or any of its
subsidiaries or affiliates (defined to include any corporation or
other entity in which the Company directly or indirectly owns at
least a 40% interest), that the Committee determines to be
responsible for, or able to contribute to, the growth,
profitability, and success of the Company is eligible to
participate in the Plan. Directors who are not employees are not
eligible to participate in the Plan.
Shares Available for Awards. The maximum number of shares
of Common Stock in respect of which awards may be granted under
the Plan (other than management incentive compensation
performance awards) in any year consists of a base amount,
supplemented by certain additional shares, if any. The base
amount is equal to 1.85% of the total number of shares of Common
Stock outstanding on the first day of the year. If, in any year,
awards are made in respect of fewer than the number of shares
comprising the base amount, the unused balance is carried forward
and will be available for awards in future years. In addition,
the following shares are available for future awards under the
Plan: (i) shares tendered or withheld in payment of the exercise
price of a stock option or to satisfy a tax withholding
obligation, (ii) shares issued, or shares issuable in respect of
awards, that are forfeited, and (iii) shares issuable in respect
of awards that are settled in cash in lieu of shares of Common
Stock. The shares of Common Stock issuable under the Plan may be
either authorized but unissued shares or shares held in treasury
and not reserved for any other purpose.
Aggregate Limitations on Restricted Stock and Incentive
Stock Option Awards. Of the total number of shares available for
awards (other than management incentive compensation performance
awards) in any year, no more than 25% of such shares may be the
subject of restricted stock awards and no more than 200,000
shares of Common Stock may be the subject to incentive stock
option awards.
Individual Award Limitations on Stock Options and SARS. In
any year, no participant may receive stock options and stock
appreciation rights in respect of more than 250,000 shares of
Common Stock.
Awards. The following types of awards may be made to
employees under the Plan: (i) stock options, (ii) stock
appreciation rights, (iii) restricted stock, (iv) phantom shares,
(v) performance units, (vi) management incentive compensation
performance awards (see Management Incentive Compensation
Performance Awards"), (vii) shares in lieu of cash, and (viii)
PAGE
<PAGE>
dividend equivalents. The selection of employees to receive
awards, the type and amount of an award, and the terms and
conditions of an award all are matters that are determined in the
sole discretion of the Committee.
Stock Options. Stock Options granted under the Plan may be
either incentive stock options ( ISOs") that are intended to
satisfy the requirements of Section 422 of the Internal Revenue
Code of 1986, as amended (the Code"), or options that are not
intended to meet such requirements ( nonstatutory stock
options"). The exercise price of a stock option may not be less
than 100% of the market price of the Common Stock on the date of
the grant and the term of a stock option may not be longer than
10 years.
Each stock option may be exercised at such times and subject
to such terms and conditions as the Committee may specify at the
time of the grant or thereafter; provided that, except in the
event of the retirement, death or disability of the holder of
upon the occurrence of a change of control" (as hereinafter
defined), a stock option may not be exercised in whole or in part
during the twelve-month following the grant. Payment of the
exercise price of a stock option may be made (i) in cash or its
equivalent, (ii) if and to the extent permitted by the Committee,
by the delivery or attestation to the ownership of shares of
Common Stock owned by the holder, or (iii) by a combination of
the foregoing.
Stock Appreciation Rights. A stock appreciation right
entitles the holder to receive from the Company a payment in an
amount equal to the excess of the fair market value of a share of
Common Stock on the date of exercise over the base price. The
Committee has the discretion to determine the time or times at
which or the event or events upon which a stock appreciation
right may be exercised in whole or in part, subject to the
limitation that, except in the event of the retirement, death or
disability of the holder or upon the occurrence of a change of
control", a stock appreciation right may not be exercised in
whole or in part during the twelve-month period following the
grant. The Committee also has the discretion to determine the
method of exercise and whether a stock appreciation right shall
be settled in cash, shares of Common Stock, or a combination of
cash and shares. Stock appreciation rights may be granted in
tandem with or in addition to a stock option and may be granted
either at the same time as a stock option or at a later time.
Stock appreciation rights may not have a base price that is less
than the fair market value of the Common Stock on the date of the
grant (except that a stock appreciation right granted in tandem
with a previously granted stock option may have a base price
equal to the exercise price of such stock option) or a term that
is longer than ten years.
PAGE
<PAGE>
Restricted Stock. Restricted stock is Common Stock that is
granted to an employee subject to the satisfaction of such terms
and conditions as the Committee may determine. Vesting may be
based solely on the lapse of time, or the lapse of time combined
with the satisfaction of performance or other criteria specified
by the Committee. Until such time as the restrictions imposed by
the Committee lapse (the restricted period"), shares of
restricted stock are subject to forfeiture and may not be sold,
assigned, transferred, pledged, hypothecated, or otherwise
disposed of by the holder. Except in the event of the
retirement, death or disability of the holder or upon the
occurrence of a change of control", the restricted period may
not be less than one year. Subject to such terms, conditions,
and restrictions as may be imposed by the Committee, the holder,
during the restricted period, otherwise has absolute ownership of
the restricted shares, including the right to vote and receive
dividends on the shares.
A holder of restricted stock may irrevocably elect to have
any withholding tax obligation associated with the lapse of
restrictions on restricted stock satisfied by (i) having the
Company withhold shares of restricted stock otherwise deliverable
to the participant or (ii) delivering to the Company such
restricted stock or other shares of Common Stock; provided that
the Committee may, in its discretion, disapprove any such
election. When the restrictions on restricted stock lapse, the
Committee may, in its discretion, direct the Company to make cash
payments to assist the holder in satisfying his federal income
tax liability with respect to the restricted stock. Such
payments may be made only to those holders whose performance the
Committee determines to have been fully satisfactory between the
date on which the restricted stock were granted and the date on
which the restrictions lapse.
Phantom Shares. A phantom share represents the right of the
holder to receive, subject to such terms and conditions as the
Committee shall establish, an amount determined by the Committee
based on the achievement of performance goals established by the
Committee relating to the fair market value, book value, or
formula value of an equity interest in the Company or any of its
subsidiaries or affiliates (or any combination thereof). Except
in the event of the retirement, death or disability of the holder
or upon the occurrence of a change of control", phantom shares
may not vest during the twelve-month period following the grant.
Payment of the value of a phantom share may be made in cash,
shares of Common Stock, or a combination of cash and shares, at
such time and in such manner as the Committee shall determine.
Performance Units. Performance units represent a
contractual right of the holder to receive a payment that becomes
PAGE
<PAGE>
vested upon the attainment of performance objectives established
by the Committee relating to one or more of the following
criteria: (i) cumulative compound operating profit growth, (ii)
total return to shareholders, (iii) return on equity, (iv)
increase in revenue, (v) net operating income, (vi) cash flow, or
(vii) any other criteria selected by the Committee (in the case
of an award to an employee who is not a covered employee" within
the meaning of Section 162(m) of the Code). The performance
objectives may relate to the performance of the Company, any of
its subsidiaries or affiliates, a division or unit of the Company
or any of its subsidiaries or affiliates, an office, group of
agencies, or all or any part of an agency system, in each such
case as measured in absolute terms or in comparison with the
performance of other companies. The number of performance units
granted to an employee, the applicable performance criteria, the
performance period and all other terms and conditions of a
performance unit are determined in the discretion of the
Committee.
Performance units may be settled in cash, in shares of
Common Stock, or a combination of cash and shares, as determined
by the Committee. The maximum amount that may be paid to a
holder with respect to a performance unit award for any four-year
performance period is $3.5 million (which amount shall be
proportionately increased or decreased for performance periods of
other than four years). No employee may participate in more than
four performance periods at one time.
Shares in Lieu of Cash. The Committee may award shares of
Common Stock in lieu of all or part of any compensation that
otherwise is payable in cash to an employee by the Company or any
of its subsidiaries or affiliates. If shares of Common Stock are
issued in lieu of cash, the number of shares to be issued must
have a fair market value equal to or less than the amount of cash
otherwise payable.
Dividend Equivalents. In connection with any award, the
Committee in its discretion may grant dividend equivalents, to be
paid on a current, deferred, or contingent basis. Dividend
equivalents represent the right to receive a payment equal to the
aggregate dividend payment on a corresponding number of shares of
Common Stock, and may be paid in cash, shares of Common Stock, or
a combination of cash and shares.
Management Incentive Compensation Performance Awards. Under
the management incentive compensation performance award component
of the Plan, the Committee in its sole discretion is authorized
to make management incentive compensation awards ( MICP awards")
PAGE
<PAGE>
to employees of the Company and its subsidiaries and affiliates,
subject to the limitation that no single individual is permitted
to receive in any year an award in excess of $2 million. The
funds available for all MICP awards in any year may not exceed 5%
of the amount by which the consolidated income (excluding
extraordinary gains and income taxes applicable thereto) before
taxes of the Company and its subsidiaries on a worldwide basis,
adjusted for all extraordinary losses after income tax effect,
and before provision for such incentive compensation, exceeds 15%
of the average equity capital of the Company during the
immediately preceding year.
In determining the amount of MICP awards, the Committee is
required to consider one or more of the following factors: (i)
achievement of the worldwide business plan adopted by the
Company, (ii) contribution to clients' business, consisting of
improvement in the quality of work produced or improvement in
efficiency, (iii) financial factors, consisting of operating
margin, level of or growth in revenue, and level of or growth in
operating profit, and (iv) individual performance. MICP awards
may be made in cash, shares of Common Stock, or a combination of
cash and shares. The number of shares of Common Stock issuable
in connection with MICP awards is limited to the excess of
600,000 shares over the number of shares previously issued under
the MICP while it was in effect.
Nontransferability. Unless the Committee shall permit (on
such terms and conditions as it shall establish) an award to be
transferred to a member of a participant's immediate family or to
a trust, partnership, corporation, or similar vehicle the parties
in interest in which are limited to the participant and members
of the participant's immediate family, no award may be assignable
or transferable except by will or by the laws of descent and
distribution.
Termination of Employment. If the employment of the holder
of an award terminates for any reason, any nonvested portion of
the award will be forfeited, unless the Committee in its sole
discretion determines otherwise, except that only in the case of
the retirement, death or disability of the holder may the
Committee allow an award to become vested prior to the first
anniversary of the grant.
PAGE
<PAGE>
Change of Control. Upon the occurrence of a change of
control" all awards then outstanding will immediately become
fully vested. A change of control is defined by the Plan to mean
the occurrence of any of the following events: (i) any person
(within the meaning of Sections 13(d) and 14(d) of the Exchange
Act), other than the Company or any of its subsidiaries, becomes
the beneficial owner (within the meaning of Rule 13d-3 under the
Exchange Act) of thirty percent (30%) or more of the combined
voting power of the Company's then outstanding voting securities,
(ii) a tender offer or exchange offer (other than an offer by the
Company), pursuant to which 20% or more of the then outstanding
shares of Common Stock were purchased, expires, (iii) the
stockholders of the Company approve an agreement to merge or
consolidate with another corporation and the surviving
corporation is neither the Company nor a corporation that was,
prior to the merger or consolidation, a subsidiary of the
Company, (iv) the stockholders approve an agreement (including a
plan of liquidation) to sell or otherwise to dispose of all or
substantially all of the Company's assets, or (v) during any
period of two consecutive years, individuals who, at the
beginning of such period, constituted the Board cease for any
reason to constitute at least a majority thereof, unless the
election or the nomination for the election by the Company'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.
Adjustments. If the Committee at any time determines that a
corporate transaction" has occurred that affects the Common
Stock such that an adjustment is required to preserve, or to
prevent enlargement of, the benefits or potential benefits
available under the Plan, the Committee may, in such manner as
the Committee deems equitable, adjust any or all of (i) the
number and kind of shares that thereafter may be made the subject
of awards, (ii) the number and kinds of shares that are subject
to outstanding awards, and (iii) the grant, exercise, or
conversion price of any award. In addition, the Committee may
make provisions for a cash payment to a participant or other
PAGE
<PAGE>
person holding an outstanding award. A corporate transaction"
is defined by the Plan to mean any stock split, stock dividend,
extraordinary cash dividend, recapitalization, reorganization,
merger, consolidation, split-up, spin-off, combination, exchange
of shares, warrants or rights offering to purchase Common Stock
at a price substantially below fair market value or other similar
event.
Amendment of Plan. The Board or the Committee may amend,
suspend, or terminate the Plan, or any portion thereof, at any
time; provided that no amendment may be made without shareholder
approval if (i) shareholder approval is required by law or (ii)
if the amendment would increase the number of shares of Common
Stock available for awards under the Plan. Without the written
consent of an affected participant, no termination, suspension,
or modification of the Plan may adversely affect any right of
such participant under the terms of an award granted before the
date of such termination, suspension, or modification.
Effective Date; Duration of the Plan. The Plan will become
effective on the date the Plan is approved by the Company's
shareholders. No Awards may be granted under the Plan after the
annual meeting of the Company's shareholders in 2002. Upon
shareholder approval of the Plan, no further awards may be made
under the 1996 Plan or under the MICP.
Federal Income Tax Consequences.
The material federal income tax consequences of awards under
the Plan, based on the current provisions of the Internal Revenue
Code and the regulations thereunder, are as follows:
The grant of an option or SAR to an employee will have no
tax consequences to the employee or to the Company or its
subsidiaries or affiliates. In general, upon the exercise of an
ISO, the employee will not recognize income, and the employer
will not be entitled to a tax deduction. (However, the excess of
the acquired shares' fair market value on the exercise date over
the exercise price is included in the employee's income for
purposes of the alternative minimum tax.) When an employee
disposes of ISO shares, the difference between the exercise price
and the amount realized by the employee will, in general,
constitute long-term capital gain or loss, as the case may be.
However, if the employee fails to hold the ISO shares for more
than one year after exercising the ISO and for more than two
years after the grant of the ISO, the portion of any gain
realized by the employee upon the disposition of the shares that
PAGE
<PAGE>
does not exceed the excess of the fair market value of the shares
on the exercise date over the exercise price generally will be
treated as ordinary income, the balance of any gain or any loss
will be treated as a capital gain or loss (long-term or
short-term, depending on whether the shares have been held for
more than one year), and the employer generally will be entitled
to a tax deduction equal to the amount of ordinary income
recognized by the employee. If an employee exercises an ISO, but
fails to remain employed by the Company (or a subsidiary in which
the Company holds at least 50 percent of the voting power) from
the date of grant until three months preceding the date of
exercise (one year preceding the date of exercise if the
employee's employment terminated due to disability), the option
will be treated for tax purposes as a nonstatutory stock option,
as described below.
In general, upon the exercise of a nonstatutory stock
option, the employee will recognize ordinary income equal to the
excess of the acquired shares' fair market value on the exercise
date over the exercise price, and the employer generally will be
entitled to a tax deduction in the same amount. Upon the
exercise of a SAR, the employee will recognize as ordinary income
any cash received and the fair market value on the exercise date
of any shares received, and the employer generally will be
entitled to a tax deduction in the same amount.
With respect to other awards that are settled either in cash
or in shares that are transferable or are not subject to a
substantial risk of forfeiture, the employee will recognize
ordinary income equal to the excess of (a) the cash or the fair
market value of any shares received (determined as of the date of
settlement) over (b) the amount, if any, paid for the shares by
the employee, and the employer generally will be entitled to a
tax deduction in the same amount.
In the case of an award to an employee that is settled in
shares that are nontransferable and subject to a substantial risk
of forfeiture, the employee generally will recognize ordinary
income equal to the excess of (a) the fair market value of the
shares received (determined as of the date on which the shares
become transferable or not subject to a substantial risk of
forfeiture, whichever occurs first) over (b) the amount, if any,
paid for the shares by the employee, and the employer generally
will be entitled to a tax deduction in the same amount.
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<PAGE>
An employee whose shares are both nontransferable and
subject to a substantial risk of forfeiture may elect to
recognize income when the shares are received, rather than upon
the expiration of the transfer restriction or risk of forfeiture.
If an employee makes this election, the amount of ordinary
income, and the amount of the employer's tax deduction, are
determined as of the date of receipt, rather than upon the
expiration of the applicable restrictions.
When an employee sells any shares acquired under a
nonqualified stock option, a SAR, or any other award other than
an ISO, the employee will recognize capital gain or loss equal to
the difference between the amount realized on the disposition of
the shares and the employee's basis in the shares. In general,
the employee's basis in any such shares will be equal to the
amount of ordinary income recognized in connection with the
receipt of the shares plus any amount paid for the shares. Any
capital gain or loss realized upon the disposition of the shares
will be long-term or short-term, depending on whether the shares
have been held for more than one year from the date as of which
ordinary income was recognized.
When a cash payment is made to an employee, the employee
will recognize the amount of the cash payment as ordinary income,
and the employer generally will be entitled to a tax deduction in
the same amount.
In general, a corporation is denied a deduction for any
compensation paid to its chief executive officer or to any of its
four most highly compensated officers (other than the chief
executive officer) to the extent that the compensation paid to
the officer exceeds $1,000,000 in any year. Performance-based
compensation," however is not subject to this deduction limit.
The Plan permits the grant of both awards that qualify as
performance-based compensation, such as options, SARs,
performance units, and incentive compensation awards, and awards
that do not so qualify, such as restricted stock, phantom shares,
awards of shares of Common Stock in lieu of cash, and dividend
equivalents.
Any acceleration, vesting, or increase in the amount of an
award under the Plan as a result of a change of control might
under certain circumstances be deemed to be a parachute payment"
for tax purposes. In general, if the present value of all
parachute payments to a disqualified individual" (any one of a
limited class of shareholders, officers, and highly compensated
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employees) equals or exceeds three times the individual's base
amount" (annualized compensation over a five-year period), the
individual will be subject to a 20% excise tax on the excess of
the parachute payments over the individual's base amount, and the
employer will be denied a tax deduction for such excess, except
to the extent it is established that the excess represents a
reasonable compensation for services actually rendered. Payments
outside of the Plan also may constitute parachute payments.
New Plan Benefits.
The selection of employees to receive awards under the Plan
will be determined by the Committee in its discretion.
Therefore, the benefits under the Plan that will be received by
any individual or group are not determinable. On March 24, 1996,
the closing price of the Common Stock on the New York Stock
Exchange was $53 3/8 per share.
Vote Required.
The affirmative vote of a majority of the shares of the
Common Stock present in person or by proxy and entitled to vote
at the Annual Meeting is required to approve the Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
4. APPOINTMENT OF INDEPENDENT ACCOUNTANTS
Price Waterhouse have been appointed and are acting as
independent accountants of the Company for the year 1997. This
firm has been the Company's independent accountants since 1952.
Price Waterhouse has advised the Company that they are
independent accountants with respect to the Company and its
subsidiaries within the meaning of the rules and regulations of
the Securities and Exchange Commission.
A representative of Price Waterhouse is expected to be
present at the Annual Meeting with the opportunity to make a
statement and to respond to appropriate questions.
If a majority of the shares of Common Stock present in
person or by proxy and entitled to vote do not confirm the
appointment of Price Waterhouse, the Board of Directors of the
Company will take such vote into consideration and take action
consistent to the extent practicable with the stockholders' vote
and the Company's need for the services of independent
accountants for the balance of the year 1997.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR CONFIRMATION OF
THE APPOINTMENT OF PRICE WATERHOUSE.
5. STOCKHOLDERS' PROPOSAL REGARDING NORTHERN IRELAND
Interpublic is advised that two stockholders intend to
present the proposal set forth below for consideration and action
by stockholders at the Annual Meeting. The names and addresses
of these two shareholders and the number of shares of Common
Stock each has stated that they own will be furnished by
Interpublic promptly upon receipt by Interpublic of an oral or
written request for such information. The stockholders' proposal
is as follows:
WHEREAS, the Interpublic Group has a wholly-owned subsidiary
in Northern Ireland, McCann-Erickson Belfast Ltd.,
WHEREAS, the on-going peace process in Northern Ireland
encourages us to search for non-violent means for establishing
justice and equality;
WHEREAS, employment discrimination in Northern Ireland has
been cited by the International Commission of Jurists as being
one of the major causes of the conflict in that country; and
WHEREAS, Dr. Sean MacBride, founder of Amnesty International
and Nobel Peace laureate, has proposed several equal opportunity
employment principles to serve as guidelines for corporations in
Northern Ireland. These include:
1. Increasing the representation of individuals from under
represented religious groups in the workforce including
managerial, supervisory, administrative, clerical and technical
jobs.
2. Adequate security for the protection of minority
employees both at the workplace and while traveling to and from
work.
3. The banning of provocative religious or political
emblems from the workplace.
4. All job openings should be publicly advertised and
special recruitment efforts should be made to attract applicants
from under represented religious groups.
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5. Layoff, recall, and termination procedures should not
in practice, favor particular religious groupings.
6. The abolition of job reservations, apprenticeship
restrictions, and differential employment criteria, which
discriminate on the basis of religion or ethnic origin.
7. The development of training programs that will prepare
substantial numbers of current minority employees for skilled
jobs, including the expansion of existing programs and the
creation of new programs to train, upgrade, and improve the
skills of minority employees.
8. The establishment of procedures to assess, identify and
actively recruit minority employees with potential for further
advancement.
9. The appointment of a senior management staff member to
oversee the Company's affirmative action efforts and the setting
up of timetables to carry out affirmative action principles.
RESOLVED, Shareholders request the Board of Directors to:
1. Make all possible lawful efforts to implement
and/or increase activity on each of the nine MacBride
Principles.
SUPPORTING STATEMENT
-- We believe that our Company benefits by hiring from the
widest available talent pool. An employee's ability to do the
job should be the primary consideration in hiring and promotion
decisions.
-- Continued discrimination and worsening employment
opportunities have been cited as contributing to support for a
violent solution to Northern Ireland's problems.
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-- Implementation of the MacBride Principles by the Company
will demonstrate its concern for human rights and equality of
opportunity in its international operations.
Please vote your proxy FOR these concerns.
INTERPUBLIC'S STATEMENT IN OPPOSITION
Interpublic has one advertising agency in Northern Ireland,
McCann-Erickson Belfast, which was acquired in June 1986. This
agency has about 40 employees.
Management of Interpublic believes that McCann-Erickson
Belfast's policies and practices are consistent with
Interpublic's policy to recruit, employ and promote all qualified
personnel without regard to race, creed, color, national origin,
sex, age, veteran status or disability.
The Company shares the proponent's concern for human rights
and equality of opportunity as well as the need to encourage
employment and opportunity in Northern Ireland. It believes that
an effective commitment to fair employment has been made in good
faith by McCann Erickson Belfast, and that implementation of all
of the MacBride Principles is not necessary nor desirable under
the circumstances. Furthermore it is not practical or prudent
for the Board of Directors of the Company to develop solutions in
the United States to problems unique to Northern Ireland.
Interpublic believes that McCann-Erickson Belfast is in full
compliance with the Fair Employment (Northern Ireland) Act of
1989, as amended, effective in Northern Ireland. Under this law,
an employee designated as the Monitoring Officer is required to
monitor the religious composition of the workforce and to submit
a statutory annual report to the Fair Employment Commission. The
Monitoring Officer for McCann-Erickson Belfast reports he has
found no evidence of religious or political discrimination in the
composition of its workforce.
McCann-Erickson Belfast ("MEB") has adopted and implements
the following Policy Statement on Religious Equality of
Opportunity in Employment:
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(1) Overall responsibility for policy and practice has
been undertaken by the Managing Director, although it is
emphasized that employees at every level within the
organization have a responsibility in the promotion of
equality of opportunity in employment.
(2) MEB endorses the merit principle, namely that the
best individual for a job will be selected without regard
for his or her religious belief or perceived religious
affiliation. This principle applies both to permanent
payroll and temporary positions. The merit principle is
confirmed as applying to recruitment to the Company,
training, transfer and promotion.
(3) Job vacancies which require external candidates
will be advertised in the press or lodged with accredited
organizations including the job centers in a way which
ensures that qualified candidates across the community are
made aware of such opportunities. Word of mouth as a means
of securing applicants is discontinued.
(4) MEB will periodically review its selection
criteria and procedures to maintain a system where
individuals are selected, promoted and treated solely on the
basis of their merits and those abilities which are
appropriate to the job. Such reviews may include the
evaluation of existing and new objective tests related to
clearly defined job attributes.
(5) MEB will monitor the religious composition of the
total employee body by defined job groupings and will carry
out compositional analyses of all applicants for vacancies
at every level. The religious affiliation records will be
maintained, summarized and analyzed by the Monitoring
Officer.
(6) Where compositional analysis points to the need
for further affirmative action, MEB will determine what
action is required to be taken and will diligently implement
appropriate action.
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(7) MEB will distribute and publicize this policy
statement throughout the premises and elsewhere as is from
time to time appropriate.
(8) MEB will ensure through the grievance procedure
that any employee who believes that inequitable treatment
has been applied to him or her within the scope of this
policy is afforded full opportunity to raise the matter.
(9) All employees have a responsibility to accept
their personal involvement in the practical application of
this policy, but specific responsibility falls upon
management who are involved in recruitment, employee
administration and training.
(10) It is the responsibility of all employees in
conjunction with MEB to foster and encourage a harmonious
working atmosphere in which no section of the community
feels threatened or intimidated because of their religion.
Vote Required
The affirmative vote of the majority of the shares present
in person or by proxy and entitled to vote at the Annual Meeting
is required to approve the stockholders' proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE
STOCKHOLDERS' PROPOSAL REGARDING NORTHERN IRELAND.
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SOLICITATION OF PROXIES
The solicitation of proxies is made on behalf of the
Management of the Company. Solicitation of proxies will be
primarily by mail. In addition, proxies may be solicited in
person or by telephone, telefax or other means by officers,
directors and employees of the Company, for which they will
receive no additional compensation. Banks, brokers and others
holding stock in their names or in the names of nominees will be
reimbursed for out-of-pocket expenses incurred in sending proxy
material to the beneficial owners of such shares. The cost of
solicitation will be borne by the Company. D.F. King & Co., New
York, N.Y., has been retained to assist the Company in the
distribution of proxy materials to, and the solicitation of
proxies from, brokers and other institutional holders at a fee of
$7,500, plus reasonable out-of-pocket expenses. The Company also
has agreed to indemnify D.F. King for certain liabilities,
including liabilities arising under the federal securities laws.
The Management is not aware of any other matters which may
be brought before the meeting. If other matters not now known
come before the meeting, the persons named in the accompanying
form of proxy or their substitutes will vote such proxy in
accordance with their best judgment.
By Order of the Board of
Directors,
Nicholas J. Camera
Secretary
April __, 1997
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APPENDIX A
THE INTERPUBLIC GROUP OF COMPANIES, INC.
1997 PERFORMANCE INCENTIVE PLAN
Section 1. Purpose.
The purposes of the Plan are to promote the interests of the
Company and its shareholders, and further align the interests of
shareholders and Eligible Employees, by
(a) attracting, retaining, and motivating
outstanding individuals as Eligible Employees;
(b) providing Eligible Employees with
incentives tied to the achievement of business, financial,
and strategic objectives of the Company and its Subsidiaries
and Affiliates; and
(c) providing Eligible Employees with
equity-based incentives and subsequent equity ownership
opportunities, including incentives and opportunities tied
to the Company's Common Stock.
Section 2. Definitions.
Unless the context clearly indicates otherwise, the following
terms, when used in the Plan in capitalized form, shall have the
meanings set forth below:
"Affiliate" means any corporation or other entity (other than the
Company or one of its Subsidiaries) in which the Company directly
or indirectly owns at least forty percent (40%) of the combined
voting power of all classes of stock of the entity or at least
forty percent (40%) of the ownership interests in the entity.
"Award" means any grant or award under the Plan, as evidenced in
a written document delivered to a Participant as provided in
Section 14(a) hereof.
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"Board" means the Board of Directors of the Company.
"Change of Control" means the occurrence of any of the following
events:
(a) any person (within the meaning of Sections 13(d) and
14(d) of the Exchange Act), other than the Company or any of its
Subsidiaries, becomes the beneficial owner (within the meaning of
Rule 13d-3 under the Exchange Act) of thirty percent (30%) or
more of the combined voting power of the Company's then
outstanding voting securities; or
(b) a tender offer or exchange offer (other than an offer
by the Company), pursuant to which twenty percent (20%) or more
of the then outstanding shares of Common Stock were purchased,
expires; or
(c) the stockholders of the Company approve an agreement to
merge or consolidate with another corporation and the surviving
corporation is neither the Company nor a corporation that was,
prior to the merger or consolidation, a subsidiary of the
Company; or
(d) the stockholders approve an agreement (including a plan
of liquidation) to sell or otherwise to dispose of all or
substantially all of the Company's assets; or
(e) during any period of two consecutive years, individuals
who, at the beginning of such period, constituted the Board cease
for any reason to constitute at least a majority thereof, unless
the election or the nomination for the election by the Company'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.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the committee established by the Board pursuant
to Section 3 hereof.
"Common Stock" means the Company's $.1O par value common stock.
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"Company" means The Interpublic Group of Companies, Inc.
"Corporate Transaction" means any stock split, stock dividend,
extraordinary cash dividend, recapitalization, reorganization,
merger, consolidation, split-up, spin-off, combination, exchange
of shares, warrants or rights offering to purchase Common Stock
at a price substantially below fair market value, or other
similar event.
"Disability" means long-term disability as defined under the
terms of the Company's applicable long-term disability plans or
policies.
"Dividend Equivalent" means an Award, granted in accordance with
the provisions of Section 12 hereof, that provides for payments
equivalent in amount to the dividends on Shares.
"Eligible Employee" means any employee of the Company, its
Subsidiaries, or its Affiliates determined by the Committee to be
responsible for, or able to contribute to, the growth,
profitability, and success of the Company. However, this term
does not include directors who are not employees of such
entities.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
"Executive Officer" means those persons who are officers of the
Company within the meaning of Rule 16a-l(f) of the Exchange Act.
"Incentive Stock Option" or "ISO" means an Option intended to
meet the requirements of Section 422 of the Code.
"Management Incentive Compensation Performance Award" or "MICP
Award" means an Award granted under Section 10 hereof and payable
wholly in cash, wholly in Shares, or partly in cash and partly in
Shares in accordance with the terms of the Award.
"Nonstatutory Stock Option" means an Option that is not intended
to be an Incentive Stock Option.
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"Option" means the right to purchase the number of Shares
specified by the Committee, at a price and during a term fixed by
the Committee in accordance with the Plan and subject to any
other limitations and restrictions (required by law or otherwise)
as the Plan and the Committee shall impose.
"Participant" means an Eligible Employee selected by the
Committee to receive an Award under the Plan.
"Performance Period" means a period during which an Award of
Performance Units is subject to forfeiture. The Performance
Period that applies to an Award made to a Participant may overlap
or coincide with the Performance Period that applies to another
Award made to that Participant. The duration of a Performance
Period shall not be less than one year.
"Performance Units" means any Award of a contractual right
granted under Section 9 hereof to receive cash or Shares that
becomes vested upon the attainment, in whole or in part, of
performance objectives determined by the Committee.
"Phantom Shares" means an Award of a contractual right granted
under Section 8 hereof to receive cash or Shares payable in
accordance with the terms of the Award.
"Plan" means The Interpublic Group of Companies, Inc. 1997
Performance Incentive Plan, set forth herein, and as it may be
amended from time to time.
"Plan Year" means the calendar year.
"Restricted Period" means a period during which an Award of
Restricted Stock is subject to forfeiture. The Restricted Period
that applies to an Award made to a Participant may overlap or
coincide with the Restricted Period that applies to another Award
made to that Participant. The duration of a Restricted Period
shall not be less than one year; provided that a Restricted
Period may terminate before the expiration of one year, pursuant
to Section 13 hereof, in connection with the termination of the
Participant's employment due to retirement, death, or Disability
or, pursuant to Section 14(d) hereof, by reason of a Change of
Control.
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"Restricted Stock" means any Award of Common Stock granted under
Section 7 hereof that becomes vested and nonforfeitable upon the
attainment, in whole or in part, of conditions established by the
Committee.
"Shares" means shares of Common Stock.
"Stock Appreciation Right" means a contractual right granted
under Section 6 hereof to receive cash, Shares, or a combination
thereof.
"Subsidiary" means a subsidiary of the Company that meets the
definition of a "subsidiary corporation" in Section 424(f) of the
Code.
Section 3. Administration.
(a) The Committee. The Plan shall be administered by a
committee (the "Committee") that satisfies the requirements of
Rule 16b-3 under the Exchange Act. Members of the Committee
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.
(b) Committee Powers. 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 Company to issue or transfer Shares pursuant to
the issuance or exercise of an Award under the Plan.
(c) Committee Action. The Committee may act at a duly
called meeting by the vote of a majority of its members or
without a meeting by unanimous written consent. 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.
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(d) Awards. Subject to the provisions of the Plan, the
Committee shall have the authority to grant the following Awards:
(a) Options,
(b) Stock Appreciation Rights,
(c) Restricted Stock,
(d) Phantom Shares,
(e) Performance Units,
(f) Management Incentive Compensation
Performance Awards,
(g) Shares in Lieu of Cash, and
(h) Dividend Equivalents.
(e) Participants. Subject to the provisions of the Plan, the
Committee shall have the authority to designate the Eligible
Employees who shall receive Awards and to determine the nature
and size of the Award that an Eligible Employee shall receive.
(f) Delegation. If the Committee deems it advisable, the
Committee may delegate its authority under this Section 3 to
persons other than its members to the extent permitted by
applicable law, except that no such delegation shall be permitted
with respect to the participation in the Plan of persons who are
subject to Section 16 of the Exchange Act. Any person to whom
the Committee delegates its authority under this Section 3 may
receive Awards only if the Awards are granted directly by the
Committee without delegation.
Section 4. Maximum Amount Available for Awards.
(a) Basic Limitation. Subject to the provisions of
subsections (b) through (f) of this Section 4, the maximum number
of Shares in respect of which Awards may be granted in any Plan
Year is 1.85% of the total number of Shares issued and
outstanding on the first day of that Plan Year, including Shares
held in the Company's treasury.
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(b) Additional Shares. In addition to the Shares authorized
by Section 4(a) hereof, the following Shares may be the subject
of Awards under the Plan:
(1) Carryovers. If the maximum number of Shares in
respect of which Awards may be granted in any Plan Year
pursuant to this Section 4 (the "Maximum Shares") exceeds
the number of Shares in respect of which Awards are granted
in that Plan Year (the "Covered Shares"), Shares equal to
the excess of the Maximum Shares over the Covered Shares
("Unused Shares") shall be added to the Shares otherwise
available for Awards in the immediately following Plan Year.
Unused Shares may be carried over to each subsequent Plan
Year in succession to the extent that Awards are not granted
in respect of the Unused Shares.
(2) Surrender of Shares. If a Participant tenders, or
has withheld, Shares in payment of all or part of the option
price under an Option granted under the Plan, or in
satisfaction of withholding tax obligations, the Shares
tendered by the Participant or so withheld shall become
available for Awards.
(3) Forfeiture of Shares. If Shares that are issued
under the Plan are subsequently forfeited (or if an Award
with respect to Shares is forfeited) in accordance with the
terms of the Award, the forfeited Shares shall immediately
become available for Awards.
(4) Payment of Cash in Lieu of Shares. To the extent
that cash is paid pursuant to an Award in lieu of Shares,
the Shares covered by the Award shall become available for
Awards.
(5) MICP Awards. The Shares authorized by the
preceding provisions of this Section 4 shall not be
available for distribution under Section 10 hereof.
However, in addition to the Shares available under the
preceding provisions of this Section 4, the excess of (A)
600,000 Shares over (B) the number of Shares previously
distributed under The Interpublic Group of Companies, Inc.
Management Incentive Compensation Plan, as approved by the
Company's shareholders on May 16, 1995, shall be authorized
for distribution under Section 10 hereof.
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(c) Aggregate Limitations on Restricted Stock and ISOs.
Subject to the adjustment provisions of Section 4(f) hereof, not
more than 25% of the Shares in respect of which Awards may be
granted in any Plan Year (disregarding Shares that may be
distributed pursuant to Section 4(b)(5) hereof) may be the
subject of Awards of Restricted Stock, and no more than 200,000
Shares may be the subject of ISOs that are granted in any Plan
Year.
(d) Individual Limitations on Options and Stock Appreciation
Rights. Subject to the adjustment provisions in Section 4(f)
hereof, an individual Participant may not receive, in any Plan
Year, Options and Stock Appreciation Rights with respect to more
than 250,000 Shares.
(e) Shares Available for Issuance. Shares of Common Stock
may be made available from the authorized but unissued Shares
or from Shares held in the Company's treasury and not reserved
for some other purpose. If an Award is payable solely in cash,
no Shares shall be deducted from the number of Shares available
for issuance under this Section 4 by reason of that Award.
(f) Adjustment for Corporate Transactions. If the
Committee determines that any Corporate Transaction affects the
Common Stock such that an adjustment is required to preserve,
or to prevent enlargement of, the benefits or potential
benefits available under the Plan, the Committee may, in such
manner as the Committee deems equitable, adjust any or all of
(1) the number and kind of shares that thereafter may
be made the subject of Awards,
(2) the number and kinds of shares that are subject
to outstanding Awards, and
(3) the grant, exercise, or conversion price with
respect to any of the foregoing.
Any Shares received as a result of a Corporate Transaction
affecting Restricted Stock shall have the same status, be
subject to the same restrictions, and bear the same legend as
the Restricted Stock with respect to which the Shares were
issued. Additionally, the Committee may make provisions for a
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cash payment to a Participant or other person holding an
outstanding Award. However, the number of shares subject to
any Award shall always be a whole number.
Section 5. Stock Options.
(a) Grant. The Committee shall have the authority to
grant both Incentive Stock Options and Nonstatutory Stock
Options; provided that Incentive Stock Options may not be
granted to any Eligible Employee who is not an employee of the
Company or one of its Subsidiaries at the time of grant.
(b) Exercise Price. The Committee shall establish the
exercise price at the time each Option is granted, which price
shall not be less than 100% of the fair market value of the
Shares subject to the Option on the date of grant.
(c) Exercise. Each Option shall be exercised at such
times and subject to such terms and conditions as the Committee
may specify in the applicable Award or thereafter; provided
that unless the Option becomes vested earlier pursuant to
Section 13 or 14(d) hereof, an Option may not be exercised in
whole or in part during the twelve-month period commencing with
the date on which the Option was granted. The Committee may
impose such conditions on the exercise of Options as it
determines to be appropriate, including, without limitation,
conditions relating to the application of federal or state
securities laws. No Shares shall be delivered pursuant to any
exercise of an Option unless arrangements satisfactory to the
Committee have been made to assure full payment of the exercise
price therefor. Without limiting the generality of the
foregoing, payment of the exercise price may be made in cash
or, if and to the extent permitted by the Committee, by
exchanging Shares owned, or the ownership of which is attested
to, by the optionee (which are not the subject of any pledge or
other security interest and which are fully vested), or by a
combination of the foregoing, provided that the combined value
of all cash and the fair market value of any Shares tendered to
the Company, valued as of the date of such tender, is at least
equal to the exercise price.
(d) Term. An Option shall be exercisable for a term
determined by the Committee, which shall not be longer than ten
years from the date on which the Option is granted.
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(e) Termination of Employment. An Option shall be
exercisable following the termination of a Participant's
employment to the extent determined pursuant to Sections 13 and
14(d) hereof, provided that
(1) If the Participant's employment terminates due to
the Participant's retirement with the approval of the
Company, the Participant (or, following the Participant's
death, the Participant's beneficiary or personal
representative) may exercise any Option held by the
Participant at the time of such termination, to the extent
such Option is vested in accordance with the terms of the
Option and Sections 13 and 14(d) hereof, for a period of
three years following such termination (but not after the
date the Option otherwise expires).
(2) If the Participant's employment terminates due to
the Participant's death or Disability, the Participant
(or, following the Participant's death, the Participant's
beneficiary or personal representative) may exercise any
Option held by the Participant at the time of such
termination, to the extent such Option is vested in
accordance with the terms of the Option and Sections 13
and 14(d) hereof, for a period of one year following such
termination (but not after the date the Option otherwise
expires).
(3) If the Participant's employment terminates for
any reason not described in Section 5(e)(1) or (2) hereof,
the Participant (or, following the Participant's death,
the Participant's beneficiary or personal representative)
may exercise any Option held by the Participant at the
time of such termination, to the extent such Option is
vested in accordance with the terms of the Option and
Sections 13 and 14(d) hereof, for a period of three months
following such termination (but not after the date the
Option otherwise expires).
Section 6. Stock Appreciation Rights.
(a) Grant. The Committee shall have the authority to
grant Stock Appreciation Rights in tandem with an Option, in
addition to an Option, or freestanding and unrelated to an
Option. If a Stock Appreciation Right is granted in tandem
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with an Option, the Stock Appreciation Right and the related
Option shall provide alternative rights, so that a Participant
may not exercise both the Stock Appreciation Right and the
Option with respect to a Share covered by both the Option and
the related Stock Appreciation Right. Stock Appreciation
Rights granted in tandem or in addition to an Option may be
granted either at the same time as the Option or at a later
time. Stock Appreciation Rights shall not be exercisable after
the expiration of ten years from the date of grant and shall
have a base price determined in the same manner as, and subject
to the same conditions that apply with respect to, the exercise
price for an Option under Section 5(b) hereof; provided that if
a Stock Appreciation Right is granted in tandem with a
previously granted Option, the base price for the Stock
Appreciation Right may be equal to the exercise price for such
Option.
(b) Exercise. Each Stock Appreciation Right shall be
exercised at such times and subject to such terms and
conditions as the Committee may specify in the applicable Award
or thereafter; provided that unless the Stock Appreciation
Right becomes vested earlier pursuant to Section 13 or 14(d)
hereof, a Stock Appreciation Right may not be exercised in
whole or in part during the twelve-month period commencing with
the date on which the Stock Appreciation Right was granted. A
Stock Appreciation Right shall entitle the Participant to
receive from the Company an amount equal to the excess of the
fair market value of a Share on the date of exercise of the
Stock Appreciation Right over the base price thereof. Subject
to Sections 13 and 14(d) hereof, the Committee shall determine
the time or times at which or the event or events upon which a
Stock Appreciation Right may be exercised in whole or in part,
the method of exercise and whether such Stock Appreciation
Right shall be settled in cash, Shares, or a combination of
cash and Shares; provided that unless otherwise specified by
the Committee at or after grant, a Stock Appreciation Right
granted in tandem with an Option shall be exercisable at the
same time or times as the related Option is exercisable.
(c) Termination of Employment. A Stock Appreciation Right
shall be exercisable following the termination of a
Participant's employment to the extent determined pursuant to
Sections 13 and 14(d) hereof and for periods identical with
those prescribed for Options under Section 5(e) hereof.
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Section 7. Restricted Stock.
(a) Grant. Each Share of Restricted Stock 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 Participant than the terms and
conditions set forth herein.
(b) Rights of Participant. A Participant to whom
Restricted Stock has been granted shall have absolute ownership
of such shares, including the right to vote the same and to
receive dividends thereon, subject to the terms, conditions,
and restrictions described in the Plan and in the Award.
(c) Restrictions. Until the restrictions set forth in
this subsection (c) shall lapse, Restricted Stock shall be
subject to the following conditions:
(1) Restricted Stock shall not be sold, assigned,
transferred, pledged, hypothecated, or otherwise disposed
of; and
(2) if the Participant ceases to be an Employee for
any reason, except as provided in Sections 13 and 14(d)
hereof, any Restricted Stock that had been delivered to,
or held in custody for, the Participant shall be returned
to the Company forthwith, accompanied by any instrument of
transfer requested by the Company, and all of the rights
of the Participant with respect to such Shares shall
immediately terminate without any payment of consideration
by the Company.
(d) Lapse of Restrictions. Unless the Restricted Stock
vests earlier pursuant to Section 13 or 14(d) hereof, the
restrictions set forth in Section 7(c) hereof shall lapse at
the end of the Restricted Period.
(e) Agreement by Participant Regarding Withholding Taxes.
Each Participant who receives Restricted Stock shall agree
that, subject to the provisions of Section 7(c) hereof:
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(1) no later than the date of the lapse of the
restrictions set forth in Section 7(c) hereof (and any
additional restrictions set forth in the Award of the
Restricted Stock), the Participant will pay to the
Company, or make arrangements satisfactory to the
Committee regarding payment of, any taxes of any kind
required by law to be withheld with respect to the
Restricted Stock, and
(2) the Company and its Subsidiaries and Affiliates
shall, to the extent permitted by law, have the right to
deduct from any payments of any kind otherwise due to the
Participant any taxes of any kind required by law to be
withheld with respect to the Restricted Stock.
A Participant may irrevocably elect to have any withholding tax
obligation satisfied by
(A) having the Company withhold shares otherwise
deliverable to the Participant in connection with the
Award of Restricted Stock, or
(B) delivering to the Company such Restricted Stock
or delivering to the Company other Shares;
provided that the Committee may, in its sole discretion,
disapprove any such election.
(f) Tax Assistance Payments. When the restrictions set
forth in Section 7(c) hereof, or in the Award of the Restricted
Stock, lapse, the Committee may, in its discretion, direct the
Company to make cash payments to assist the Participant in
satisfying his income tax liability with respect to the
Restricted Stock. Such payments may be made only to those
Participants whose performance the Committee determines to have
been fully satisfactory between the date on which the
Restricted Stock were granted and the date on which such
restrictions lapse. The Committee may, in its discretion,
estimate the amount of the income tax liability in accordance
with methods or criteria uniformly applied to Participants
similarly situated, without regard to the individual
circumstances of a particular Participant.
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(g) Election to Recognize Gross Income in Year of Grant.
If a Participant properly elects, within 30 days of the date of
grant of Restricted Stock, to include in gross income for
federal income tax purposes an amount equal to the fair market
value of the Shares awarded on the date of grant, he shall make
arrangements satisfactory to the Committee to pay in the year
of such grant any taxes required to be withheld with respect to
such Shares. If he fails to make the payments, the Company and
its Subsidiaries and Affiliates shall, to the extent permitted
by law, have the right to deduct from any payments of any kind
otherwise due to the Participant any taxes of any kind required
by law to be withheld with respect to the Shares.
(h) Restrictive Legends; Certificates May Be Held in
Custody. Certificates evidencing Restricted Stock 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 Stock. Any attempt to
dispose of Restricted Stock in contravention of the terms,
conditions, and restrictions described in the Plan or in the
instrument evidencing the grant of the Restricted Stock shall
be ineffective. The Committee may require that the
certificates evidencing such shares be held in custody by a
bank or other institution, or that the Company itself hold such
shares in custody, until the restrictions thereon have lapsed.
(i) Foreign Laws. Notwithstanding any provisions of the
Plan to the contrary, if Restricted Stock is to be awarded to a
Participant 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
Company to sell, assign, or otherwise transfer the Restricted
Stock to a trust or other entity or arrangement, rather than
grant the Restricted Stock directly to the Participant.
Section 8. Phantom Shares.
(a) Grant. The Committee shall have the authority to
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determine the number of Phantom Shares to be granted to a
Participant and the other terms and conditions of the Phantom
Shares.
(b) Payment. Each Phantom Share shall represent the right
of the Participant to receive an amount determined by the
Committee based on the achievement of performance goals,
established by the Committee, relating to the fair market
value, book value, or formula value of an equity interest in
the Company, an Affiliate, or a Subsidiary (or any combination
thereof). Payment of the value of a Phantom Share shall be in
cash, Shares, or both, as determined by the Committee and shall
be made at such time and in such manner as the Committee shall
determine.
(c) Conditions. Each Award of Phantom Shares shall be
subject to such terms and conditions as the Committee shall
establish, including conditions comparable to those provided in
Section 7 or 9 hereof. Unless the Phantom Shares vest earlier
pursuant to Section 13 or 14(d) hereof, Phantom Shares shall
not be vested during the twelve-month period commencing on the
date on which the Phantom Shares are granted.
(d) Termination of Employment. The rights of a
Participant with respect to an Award of Phantom Shares
outstanding at the time of the termination of the Participant's
employment shall be governed by Sections 13 and 14(d) hereof.
Section 9. Performance Units.
(a) Grant. The Committee shall have the authority to
determine the number of Performance Units to be granted to a
Participant and the other terms and conditions of the
Performance Units. The Performance Units shall become vested
upon the determination by the Committee that the performance
objectives established by the Committee for the Performance
Units have been attained, in whole or in part. Payment (if
any) with respect to a Performance Unit shall be made as soon
as administratively practicable after the conclusion of the
applicable Performance Period. An individual Participant may
not participate in more than four Performance Periods at any
one time.
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(b) Performance Objectives. The performance objectives
shall relate to the achievement of performance objectives
relating to one or more of the following criteria:
(1) cumulative compound operating profit growth;
(2) total return to shareholders;
(3) return on equity;
(4) increase in revenue;
(5) net operating income;
(6) cash flow; or
(7) any other criteria selected by the Committee;
provided that any such other criteria shall not
apply to an Award to a "covered employee" within
the meaning of Section 162(m)(3) of the Code.
The performance objectives may relate to the performance of (A)
the Company, (B) a Subsidiary, (C) an Affiliate, (D) a division
or unit of the Company, any Subsidiary, or any Affiliate, (E)
an office, group of agencies, or all or part of any agency
system, (F) the Participant, or (G) any combination of the
foregoing, over a Performance Period established by the
Committee, as measured either in absolute terms or in
comparison with the performance of other companies. Partial
achievement of the objective(s) may result in a payment
corresponding to the degree of achievement.
(c) Maximum Payment. The maximum amount that may be paid
to any Participant in respect of an Award of Performance Units
shall be $3.5 million for a four-year Performance Period. If
the Performance Period is longer or shorter than four years,
the $3.5 million limit shall be proportionately increased or
reduced to reflect the length of the Performance Period.
Payment may be made in cash, in Shares, or both, as determined
by the Committee.
(d) Termination of Employment. The rights of a
Participant with respect to an Award of Performance Units
outstanding at the time of the termination of the Participant's
employment shall be governed by Sections 13 and 14(d) hereof.
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(e) Interpretation. Notwithstanding any other provision
of this Section 9 to the contrary, if an Award of Performance
Units is intended at the time of grant to be "other
performance-based compensation" within the meaning of Section
162(m)(4)(C) of the Code, and if the Committee's authority to
exercise any discretion under this Section 9 with respect to
the Award would cause the Award to fail to qualify as "other
performance-based compensation," the Committee shall not be
entitled to exercise such discretion with respect to that
Award.
Section 10. Management Incentive Compensation Performance
Awards
(a) Incentive Fund Determination. MICP Awards may be made
in the sole discretion of the Committee except that the fund
available for such Awards with respect to any one Plan Year may
not exceed 5% of the amount by which the consolidated income
(excluding extraordinary gains and income taxes applicable
thereto) before income taxes of the Company and its
subsidiaries on a worldwide basis, adjusted for all
extraordinary losses after income tax effects, and before
provision for such incentive compensation, exceeds 15% of the
average equity capital of the Company in the Plan Year
immediately preceding the Plan Year with respect to which the
Awards are made (the "Preceding Year").
For purposes of this Section 10(a), average equity capital
shall be determined by averaging equity capital as at the first
business day of the Preceding Year, the last day of June, and
the last day of December of the Preceding Year (assuming
conversion of all outstanding convertible debentures).
No MICP Award shall be made unless the Award is approved
by the Committee in its sole discretion.
(b) Determination of MICP Amounts. The Committee shall
consider one or more of the following factors in determining
the amount of the MICP Awards:
(1) Achievement of the annual worldwide business
plan adopted by the Company
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(2) Contribution to clients' business
(A) Improvement in the quality of work produced
(B) Improvement in efficiency
(3) Financial factors
(A) Operating margin
(B) Level of or growth in revenue
(C) Level of or growth in operating profit
(4) Individual performance
(c) Maximum Individual MICP Awards. The maximum
individual MICP Award permitted, with respect to any Plan Year,
is $2,000,000.
(d) Form and Timing of MICP Awards. The Committee shall
be responsible for determining the form and timing of MICP
Awards under the Plan. In its discretion, the Committee may
make any Award wholly in cash, wholly in Shares, or partly in
cash and partly in Shares. For purposes of Section 10(a)
hereof, any Shares awarded under this Section 10 shall be
valued by using the average closing price of the Shares on the
New York Stock Exchange on the last ten trading days of the
calendar month preceding the month in which the Shares are
awarded.
Individual MICP Awards shall be paid on a current basis
except that, in any instance, the Committee may direct that up
to 75% of an individual's Award be paid on a deferred basis
subject to such terms and conditions as the Committee may
prescribe. MICP Awards shall normally be made as soon as
possible after the end of each Plan Year.
Section 11. Shares in Lieu of Cash.
The Committee may grant Awards of Shares in lieu of all or
part of any compensation otherwise payable in cash to an
Eligible Employee by the Company or any Subsidiary or
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Affiliate. If Shares are issued in lieu of cash, the number of
Shares to be issued shall be equal to the number of whole
Shares that have an aggregate fair market value (determined on
the date the cash otherwise would have been payable) equal to
or less than the amount of such cash.
Section 12. Dividend Equivalents.
The Committee may grant to a Participant, in connection
with any Award, Dividend Equivalents, which may be paid in
cash, in Shares, or both, and which may be paid on a current,
deferred, or contingent basis, as determined by the Committee
in its discretion.
Section 13. Termination of Employment.
If the Participant's employment terminates for any reason,
the Participant (or, following the Participant's death, the
Participant's beneficiary or personal representative) shall be
vested only in the portion of the Award (if any) in which the
Participant was vested immediately before the termination of
the Participant's employment except to the extent that the
Committee in its sole discretion determines otherwise.
Notwithstanding the preceding sentence, and subject to Section
14(d) hereof, the Committee may not determine that an Award
shall be vested before the first anniversary of the date on
which the Award was granted unless the Participant's employment
terminated due to retirement, death, or Disability.
Section 14. General Provisions.
(a) Awards. Each Award hereunder shall be evidenced in
writing. The written terms of the Award shall be delivered to
the Participant and shall incorporate the terms of the Plan by
reference and specify the terms and conditions thereof and any
rules applicable thereto.
(b) Withholding. The Company shall have the right to
deduct from all amounts paid to a Participant in cash (whether
under the Plan or otherwise) any taxes required by law to be
withheld in respect of Awards under the Plan. In the case of
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any Award satisfied in the form of Common Stock, no Shares
shall be issued unless and until arrangements satisfactory to
the Company shall have been made to satisfy any withholding tax
obligations applicable with respect to such Award. Without
limiting the generality of the foregoing and subject to such
terms and conditions as the Committee may impose, the Company
shall have the right to retain, or the Committee may, subject
to such terms and conditions as it may establish from time to
time, permit Participants to elect to tender, Common Stock
(including Common Stock issuable in respect of an Award) to
satisfy, in whole or in part, the amount required to be
withheld.
(c) Nontransferability. Unless the Committee shall permit
(on such terms and conditions as it shall establish) an Award
to be transferred to a member of the Participant's immediate
family or to a trust, partnership, corporation, or similar
vehicle the parties in interest in which are limited to the
Participant and members of the Participant's immediate family
(collectively, the "Permitted Transferees"), no Award shall be
assignable or transferable except by will or the laws of
descent and distribution, and except to the extent required by
law, no right or interest of any Participant shall be subject
to any lien, obligation or liability of the Participant. All
rights with respect to Awards granted to a Participant under
the Plan shall be exercisable during the Participant's lifetime
only by such Participant or, if applicable, the Permitted
Transferees.
(d) Change of Control. Upon the occurrence of a Change of
Control, all Awards then outstanding shall immediately become
fully vested.
(e) No Right to Employment. No person shall have any
claim or right to be granted an Award, and the grant of an
Award shall not be construed as giving a Participant the right
to be retained in the employ of the Company, any Subsidiary or
any Affiliate. Further, the Company and each Subsidiary and
Affiliate expressly reserve the right at any time to dismiss a
Participant free from any liability, or any claim under the
Plan, except as provided herein or in any agreement entered
into with respect to an Award.
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(f) No Rights to Awards; No Shareholder Rights. No
Participant or Eligible Employee shall have any claim to be
granted any Award under the Plan, and there is no obligation of
uniformity of treatment of Participants and Eligible Employees.
Subject to the provisions of the Plan and the applicable Award,
no person shall have any rights as a shareholder with respect
to any Shares of Common Stock to be issued under the Plan prior
to the issuance thereof.
(g) Foreign Benefits. The Committee may grant Awards to
Eligible Employees of the Company and its Subsidiaries and
Affiliates who reside in jurisdictions outside the United
States. The Committee may adopt such supplements to the Plan
as may be necessary to comply with applicable laws of such
jurisdictions and to afford participants favorable treatment
under such laws; provided that no Award shall be granted under
any such supplement on the basis of terms or conditions that
are inconsistent with provisions of the Plan.
(h) Amendment of Plan. The Board or the Committee may
amend, suspend, or terminate the Plan or any portion thereof at
any time; provided that no amendment shall be made without
shareholder approval if (1) shareholder approval is required by
law or (2) if the amendment would increase the number of Shares
available for Awards under the Plan, except pursuant to Section
4(f) hereof. Without the written consent of an affected
Participant, no termination, suspension, or modification of the
Plan shall adversely affect any right of such Participant under
the terms of an Award granted before the date of such
termination, suspension, or modification.
(i) Application of Proceeds. The proceeds received by the
Company from the sale of Shares under the Plan shall be used
for general corporate purposes.
(j) Compliance with Legal and Exchange Requirements. The
Plan, the grant and exercise of Awards thereunder, and the
other obligations of the Company under the Plan, shall be
subject to all applicable federal and state laws, rules, and
regulations, and to such approvals by any regulatory or
governmental agency as may be required. The Company, in its
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discretion, may postpone the grant and exercise of Awards, the
issuance or delivery of Shares under any Award or any other
action permitted under the Plan to permit the Company, with
reasonable diligence, to complete such stock exchange listing
or registration or qualification of Shares or other required
action under any federal or state law, rule, or regulation and
may require any Participant to make such representations and
furnish such information as it may consider appropriate in
connection with the issuance or delivery of Shares in
compliance with applicable laws, rules, and regulations. The
Company shall not be obligated by virtue of any provision of
the Plan to recognize the exercise of any Award or otherwise to
sell or issue Shares in violation of any such laws, rules, or
regulations; and any postponement of the exercise or settlement
of any Award under this provision shall not extend the term of
such Awards, and neither the Company nor its directors or
officers shall have any obligation or liability to the
Participant with respect to any Award (or stock issuable
thereunder) that shall lapse because of such postponement.
(k) Deferrals. The Committee may postpone the exercise of
Awards, the issuance or delivery of Shares, the payment of cash
under any Award, or any action permitted under the Plan to
prevent the Company or any of its Subsidiaries or Affiliates
from being denied an income tax benefit with respect to any
Award. The Committee also may establish rules under which a
Participant may elect to postpone receipt of Shares or cash
under any Award.
(l) Severability of Provisions. If any provision of the
Plan shall be held invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provision hereof,
and the Plan shall be construed and enforced as if such provi-
sion had not been included.
(m) Incapacity. Any benefit payable to or for the benefit
of a minor, an incompetent person, or other person incapable of
receipting therefor shall be deemed paid when paid to such
person's guardian or to the party providing or reasonably ap-
pearing to provide for the care of such person, and such
payment shall fully discharge any liability or obligation of
the Committee, the Board, the Company, and all other parties
with respect thereto.
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(n) Rules of Construction. Whenever 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 shall be
deemed to refer also to the plural; 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 in effect, as amended, or as reenacted.
(o) Headings and Captions. The headings and captions
herein are provided for reference and convenience only, shall
not be considered part of the Plan, and shall not be employed
in the construction of the Plan.
(p) Applicable Law. The validity, construction,
interpretation, administration, and effect of the Plan and of
its rules and regulations, and rights relating to the Plan,
shall be determined solely in accordance with the laws of the
State of New York (without regard to its rules regarding choice
of law).
(q) Effective Date. The Plan shall become effective on
the date the Plan is approved by the Company's shareholders.
No Awards may be granted under the Plan after the annual
meeting of the Company's shareholders in 2002; provided that
any Awards granted before such annual meeting shall continue in
effect thereafter in accordance with the terms of the Awards
and the Plan. Upon shareholder approval of the Plan, no
further awards may be made under The Interpublic Group of
Companies, Inc. 1996 Stock Incentive Plan or under The
Interpublic Group of Companies, Inc. Management Incentive
Compensation Plan.<PAGE>
PRELIMINARY COPIES
APPENDIX
FORM OF PROXY
THE INTERPUBLIC GROUP OF COMPANIES, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR ANNUAL MEETING OF STOCKHOLDERS, MAY 19, 1997
The undersigned hereby constitutes and appoints Eugene P.
Beard, Philip H. Geier, Jr. and Nicholas J. Camera, and each of
them, his true and lawful agents and proxies, with full power
of substitution in each, to represent the undersigned at the
Annual Meeting of Stockholders of THE INTERPUBLIC GROUP OF
COMPANIES, INC. to be held in The Equitable Center, 787 Seventh
Avenue, New York, New York, on Monday, May 19, 1997 at 9:30
A.M. Eastern Time, and at any adjournments thereof, on all
matters to come before the meeting.
Election of Directors. Nominees:
Eugene P. Beard, Frank J. Borelli, Reginald K. Brack, Jill
M. Considine, John J. Dooner, Jr., Philip H. Geier, Jr.,
Frank B. Lowe, Leif H. Olsen, Martin F. Puris, Allen
Questrom and J. Phillip Samper.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE
APPROPRIATE BOXES, SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY
BOXES IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF
DIRECTORS' RECOMMENDATIONS. THE PROXY HOLDERS CANNOT VOTE YOUR
SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
<PAGE>
<PAGE>
PLEASE MARK YOUR
VOTES AS IN THIS X
EXAMPLE
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ELECTION OF
EACH OF THE DIRECTOR NOMINEES, FOR PROPOSALS 2, 3 AND 4 AND AGAINST
PROPOSAL 5 AND IN THE DISCRETION OF THE PROXY HOLDERS ON SUCH OTHER MATTERS
AS MAY PROPERLY COME BEFORE THE MEETING.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 2, 3 AND 4 AND
AGAINST PROPOSAL 5.
FOR WITHHELD
1. Election
of Directors.
(see reverse)
For, except vote withheld from the following nominee(s):
FOR AGAINST ABSTAIN
2. Approval of increase in
Common Stock to 225
million shares
FOR AGAINST ABSTAIN
3. Approval of the 1997
Performance Incentive
Plan
FOR AGAINST ABSTAIN
4. Confirmation of independent
accountants.
FOR AGAINST ABSTAIN
5. Stockholders' Resolution
Regarding Northern Ireland
Signature(s)_______________________ Date________________________
The signer hereby revokes all proxies heretofore given by the signer to
vote at said meeting or any adjournments thereof.
Note: Joint owners should each sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such.
<PAGE>
