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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ending June 30, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from_____________to________________
Commission file number 1-6686
THE INTERPUBLIC GROUP OF COMPANIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-1024020
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1271 Avenue of the Americas, New York, New York 10020
(Address of principal executive offices) (Zip Code)
(212) 399-8000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13
or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter
period that the registrant was required to file such
reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X . No .
Indicate the number of shares outstanding of each of
the issuer's classes of common stock, as of the
latest practicable date.
Common Stock outstanding at July 31, 1995: 78,066,140
shares.
PAGE
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
I N D E X
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet
June 30, 1995 and
December 31, 1994 3-4
Consolidated Income Statement
Three months ended June 30, 1995
and 1994 5
Consolidated Income Statement
Six months ended June 30, 1995
and 1994 6
Consolidated Statement of Cash Flows
Six months ended June 30, 1995
and 1994 7
Notes to Consolidated Financial Statements 8
Computation of Earnings Per Share 9 - 10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 11 - 13
PART II. OTHER INFORMATION
Item 4. Submission of matters to a Vote of Security
Holders 14
Item 6. Exhibits and Reports on Form 8-K 15
SIGNATURES 16
INDEX TO EXHIBITS 17
2
PART I - FINANCIAL INFORMATION
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Dollars in Thousands)
ASSETS
JUNE 30, DECEMBER 31,
1995 1994
Current Assets:
Cash and cash equivalents (includes
certificates of deposit: 1995-$90,695;
1994-$151,341) $ 304,381 $ 413,709
Marketable securities, at cost which
approximates market 39,318 27,893
Receivables (less allowance for doubtful
accounts: 1995-$24,812; 1994-$22,656) 2,140,166 2,072,764
Expenditures billable to clients 143,448 104,787
Prepaid expenses and other current assets 76,616 56,154
Total current assets 2,703,929 2,675,307
Other Assets:
Investment in unconsolidated affiliates 72,256 63,824
Deferred taxes on income 89,708 84,788
Other investments and miscellaneous assets 123,837 120,242
Total other assets 285,801 268,854
Fixed Assets, at cost:
Land and buildings 80,041 73,370
Furniture and equipment 344,801 320,164
424,842 393,534
Less accumulated depreciation 229,717 212,755
195,125 180,779
Unamortized leasehold improvements 70,107 67,348
Total fixed assets 265,232 248,127
Intangible Assets (less accumulated
amortization: 1995-$143,005;
1994-$130,045) 650,651 601,130
Total assets $3,905,613 $3,793,418
See accompanying notes to consolidated financial statements.
3
PAGE
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Dollars in Thousands Except Per Share Data)
LIABILITIES AND STOCKHOLDERS' EQUITY
JUNE 30, DECEMBER 31,
1995 1994
Current Liabilities:
Payable to banks $ 144,734 $ 128,529
Accounts payable 2,116,871 2,090,406
Accrued expenses 242,272 292,436
Accrued income taxes 90,312 83,802
Total current liabilities 2,594,189 2,595,173
Noncurrent Liabilities:
Long-term debt 161,168 131,276
Convertible subordinated debentures 111,813 110,527
Deferred compensation and reserve
for termination liabilities 228,290 215,893
Accrued postretirement benefits 45,751 45,751
Other noncurrent liabilities 37,890 32,886
Minority interests in consolidated
subsidiaries 12,905 12,485
Total noncurrent liabilities 597,817 548,818
Stockholders' Equity:
Preferred Stock, no par value
shares authorized: 20,000,000
shares issued:none
Common Stock, $.10 par value
shares authorized: 150,000,000
shares issued:
1995 - 89,000,678
1994 - 87,705,760 8,900 8,771
Additional paid-in capital 418,780 383,678
Retained earnings 676,142 619,627
Adjustment for minimum pension
liability (6,422) (6,422)
Cumulative translation adjustments (98,267) (97,587)
999,133 908,067
Less:
Treasury stock, at cost:
1995 - 10,559,098 shares
1994 - 10,001,680 shares 249,489 222,698
Unamortized expense of restricted
stock grants 36,037 35,942
Total stockholders' equity 713,607 649,427
Total Liabilities and Stockholders'
Equity $3,905,613 $3,793,418
See accompanying notes to consolidated financial statements.
4
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT
THREE MONTHS ENDED JUNE 30
(Dollars in Thousands Except Per Share Data)
1995 1994
Revenue $ 534,427 $ 480,796
Other income 22,727 16,709
Gross income 557,154 497,505
Costs and expenses:
Operating expenses 435,588 396,331
Interest 9,803 8,899
Total costs and expenses 445,391 405,230
Income before provision for income taxes 111,763 92,275
Provision for income taxes:
United States - federal 16,960 11,503
- state and local 7,058 4,831
Foreign 23,372 22,934
Total provision for income taxes 47,390 39,268
Income of consolidated companies 64,373 53,007
(Loss)/Income applicable to minority
interests (2,083) 430
Equity in net income of unconsolidated
affiliates 1,478 662
Net income $ 63,768 $ 54,099
Weighted average number of common shares 78,106,874 74,821,374
Earnings per common and common equivalent
share $ .82 $ .72
Cash dividends per common share $ .155 $ .140
See accompanying notes to consolidated financial statements.
5
PAGE
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT
SIX MONTHS ENDED JUNE 30
(Dollars in Thousands Except Per Share Data)
1995 1994
Revenue $ 981,863 $ 885,109
Other income 35,711 33,358
Gross income 1,017,574 918,467
Costs and expenses:
Operating expenses 861,180 786,019
Interest 17,730 16,065
Total costs and expenses 878,910 802,084
Income before provision for income taxes 138,664 116,383
Provision for income taxes:
United States - federal 22,901 17,383
- state and local 9,618 7,965
Foreign 26,438 24,287
Total provision for income taxes 58,957 49,635
Income of consolidated companies 79,707 66,748
Loss applicable to minority interests (2,871) (547)
Equity in net income of unconsolidated
affiliates 2,108 888
Income before effect of accounting
change 78,944 67,089
Effect of accounting change:
Postemployment benefits - (21,780)
Net income $ 78,944 $ 45,309
Weighted average number of common shares 77,836,723 74,991,406
Per Share Data:
Income before effect of accounting change $ 1.02 .89
Effect of accounting change - (.29)
Net income $ 1.02 $ .60
Cash dividends per common share $ .295 $ .265
See accompanying notes to consolidated financial statements.
6
PAGE
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
SIX MONTHS ENDED JUNE 30
(Dollars in Thousands)
CASH FLOWS FROM OPERATING ACTIVITIES: 1995 1994
Net income after effect of accounting change $ 78,944 $ 45,309
Adjustments to reconcile net income to
cash (used in)/provided by operating activities:
Effect of accounting change - 21,780
Depreciation and amortization of fixed assets 26,813 20,263
Amortization of intangible assets 12,960 10,755
Amortization of restricted stock awards 6,788 5,454
Equity in net income of unconsolidated affiliates (2,108) (888)
Income applicable to minority interests 2,871 547
Translation losses 1,733 12,776
Other (5,999) (11,096)
Changes in assets and liabilities, net of acquisitions:
Receivables (11,061) (191,251)
Expenditures billable to clients (34,083) (22,659)
Prepaid expenses and other assets (17,322) (2,579)
Accounts payable and accrued expenses (126,262) 89,845
Accrued income taxes 19,064 7,752
Deferred income taxes (3,133) (26,888)
Deferred compensation and reserve for termination
allowances 1,369 39,972
Net cash used in operating activities (49,426) (908)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions (31,230) (14,970)
Capital expenditures (29,109) (23,452)
Proceeds from sales of assets (362) 712
Net (purchases of)/proceeds from
marketable securities (8,080) 2,607
Other investments and miscellaneous assets (2,221) 5,890
Unconsolidated affiliates (9,315) (3,892)
Net cash used in investing activities (80,317) (33,105)
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase/(decrease) in short-term borrowings 8,193 (13,235)
Proceeds from long-term debt 40,000 25,000
Payments of debt (13,637) (20,272)
Treasury stock acquired (28,089) (20,942)
Issuance of Common Stock 23,035 7,835
Cash Dividends (22,430) (19,353)
Net cash provided by/(used in) financing activities 7,072 (40,967)
Effect of exchange rates on cash and cash
equivalents 13,343 9,399
Decrease in cash and cash equivalents (109,328) (65,581)
Cash and cash equivalents at beginning of year 413,709 292,268
Cash and cash equivalents at end of period $304,381 $226,687
See accompanying notes to consolidated financial statements.
7PAGE
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Consolidated Financial Statements
(a) In the opinion of management, the consolidated balance sheet as of
June 30, 1995, the consolidated statements of income for the three
months and six months ended June 30, 1995 and 1994 and the
consolidated statement of cash flows for the six months ended June 30,
1995 and 1994, contain all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial
position, results of operations and cash flows at June 30, 1995 and
for all periods presented.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been omitted. It is suggested that these
consolidated financial statements be read in conjunction with the
consolidated financial statements and notes thereto included in The
Interpublic Group of Companies, Inc.'s (the "Company") December 31,
1994 annual report to stockholders.
(b) Statement of Financial Accounting Standards (SFAS) No. 95 "Statement
of Cash Flows" requires disclosures of specific cash payments and
noncash investing and financing activities. The Company considers all
highly liquid investments with a maturity of three months or less to
be cash equivalents. Income tax cash payments were approximately
$40.3 million and $46.5 million in the first six months of 1995 and
1994, respectively. Interest payments during the first six months of
1995 were approximately $12.4 million. Interest payments during the
comparable period of 1994 were approximately $10.0 million.
(c) Effective January 1, 1994, the Company adopted SFAS 112 "Employers'
Accounting for Postemployment Benefits" and recorded a one-time pre-
tax charge of $39.6 million or $21.8 million after-tax. As of June
30, 1995 deferred compensation and reserve for termination allowances
includes approximately $40.0 million of postemployment benefits.
8
PAGE
Exhibit 11
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(Dollars in Thousands Except Per Share Data)
Three Months Ended June 30
Primary 1995 1994
Net income $ 63,768 $ 54,099
Add:
Dividends paid net of related income tax
applicable to restricted stock 113 91
Net income, as adjusted $ 63,881 $ 54,190
Weighted average number of common shares
outstanding 75,745,842 72,667,554
Weighted average number of incremental shares
in connection with restricted stock
and assumed exercise of stock options 2,361,032 2,153,820
Total 78,106,874 77,821,374
Earnings per common and common equivalent
share $ .82 $ .72
Three Months Ended June 30
Fully Diluted 1995 1994
Net income $ 63,768 $ 54,099
Add:
After tax interest savings on assumed
conversion of subordinated debentures 1,527 1,527
Dividends paid net of related income tax
applicable to restricted stock 114 96
Net income, as adjusted $ 65,409 $ 55,722
Weighted average number of common shares
outstanding 75,745,842 72,667,554
Weighted average number of incremental shares
in connection with restricted stock
and assumed exercise of stock options 2,397,631 2,227,462
Assumed conversion of subordinated
debentures 3,002,130 3,002,130
Total 81,145,603 78,897,146
Earnings per common and common equivalent
share $ .81 $ .72
9
PAGE
Exhibit 11
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(Dollars in Thousands Except Per Share Data)
Six Months Ended June 30
Primary 1995 1994
Net income before effect of accounting
change $ 78,944 $ 67,089
Effect of accounting change - (21,780)
Add:
Dividends paid net of related income tax
applicable to restricted stock 205 171
Net income, as adjusted $ 79,149 $ 45,480
Weighted average number of common shares
outstanding 75,520,732 72,773,492
Weighted average number of incremental shares
in connection with restricted stock
and assumed exercise of stock options 2,315,991 2,217,914
Total 77,836,723 74,991,406
Per share data:
Income before effect of accounting change 1.02 .89
Effect of accounting change - (.29)
Net Income $ 1.02 $ .60
Six Months Ended June 30
Fully Diluted 1995 1994
Net income before effect of accounting
change $ 78,944 $ 67,089
Effect of accounting change - (21,780)
Add:
After tax interest savings on assumed
conversion of subordinated debentures 3,054 3,020
Dividends paid net of related income tax
applicable to restricted stock 221 178
Net income, as adjusted $ 82,219 $ 48,507
Weighted average number of common shares
outstanding 75,520,732 72,773,492
Weighted average number of incremental shares
in connection with restricted stock
and assumed exercise of stock options 2,533,231 2,272,021
Assumed conversion of subordinated
debentures 3,002,130 3,002,130
Total 81,056,093 78,047,643
Per share data:
Income before effect of accounting change 1.01 .90
Effect of accounting change - (.28)
Net income $ 1.01 $ .62
10
PAGE
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Working capital at June 30, 1995 was $109.7 million, an increase of $29.6
million from December 31, 1994. The ratio of current assets to current
liabilities remained relatively unchanged from December 31, 1994 at
approximately 1.0 to 1.
During 1994, Interpublic Group of Companies, Inc. (the "Company") acquired
Western International Media Corporation and Ammirati & Puris Holding, Inc.
In April 1995, the Company acquired all the assets of Newspaper Services of
America, Inc. The purchase price was approximately $7 million.
In April 1995, the Company along with the management of Campbell Mithun
Esty (CME) acquired substantially all of the assets of CME. The purchase
price for Interpublic's share was $20.0 million. The Company, together
with the management of Campbell Mithun Esty, will operate CME going forward
on a 50/50 basis.
Historically, cash flow from operations has been the primary source of
working capital and management believes that it will continue to be in the
future. The principal use of the Company's working capital is to provide
for the operating needs of its advertising agencies, which include payments
for space or time purchased from various media on behalf of its clients.
The Company's practice is to bill and collect from its clients in
sufficient time to pay the amounts due media. Other uses of working capital
include the payment of cash dividends, acquisitions, capital expenditures
and the reduction of long-term debt. In addition, during the first six
months of 1995, the Company acquired 824,241 shares of its own stock for
approximately $28.1 million for the purposes of fulfilling the Company's
obligations under its various compensation plans.
11
PAGE
RESULTS OF OPERATIONS
Three Months Ended June 30, 1995 Compared to Three Months Ended June 30,
1994
Total revenue for the three months ended June 30, 1995 increased $53.6
million, or 11.2%, to $534.4 million compared to the same period in 1994.
Domestic revenue increased $16.6 million or 9.9% from 1994 levels. Foreign
revenue increased $37.0 million or 11.8% during the second quarter of 1995
compared to 1994. Other income increased by $6.0 million during the second
quarter of 1995 compared to the same period in 1994.
Operating expenses increased $39.3 million or 9.9% during the three months
ended June 30, 1995 compared to the same period in 1994. Interest expense
increased 10.2% as compared to the same period in 1994.
Pretax income increased $19.5 million or 21.1% during the three months
ended June 30, 1995 compared to the same period in 1994.
The increase in total revenue, operating expenses, and pretax income is
primarily due to acquired companies' results of operations.
In the fourth quarter of 1994, the Company recorded restructuring charges
of $48.7 million in connection with the elimination of duplicate facilities
and excess personnel resulting primarily from the merger of Lintas New York
and Ammirati & Puris agencies and certain international offices. Second
quarter 1995 salary savings realized from the restructuring amounted to
approximately $5.5 million.
Net losses from exchange and translation of foreign currencies for the
three months ended June 30, 1995 were approximately $1.3 million versus
$3.8 million for the same period in 1994.
The effective tax rate for the three months ended June 30, 1995 was 42.4%,
as compared to 42.6% in 1994. The decrease in the effective tax rate is
mainly due to the geographic mix of earnings.
The difference between the effective and statutory rates is primarily due
to foreign losses with no tax benefit, losses from translation of foreign
currencies which provided no tax benefit, state and local taxes, foreign
withholding taxes on dividends and nondeductible goodwill expense.
Six Months Ended June 30, 1995 Compared to Six Months Ended June 30, 1994
Total revenue for the six months ended June 30, 1995 increased $96.8
million, or 10.9%, to $981.9 million compared to the same period in 1994.
Domestic revenue increased $27.6 million or 8.6% from 1994 levels. Foreign
revenue increased $69.1 million or 12.3% during the first six months of
1995 compared to 1994. Other income increased $2.4 million in the first
six months of 1995 compared to the same period in 1994.
Operating expenses increased $75.2 million or 9.6% during the six months
ended June 30, 1995 compared to the same period in 1994. Interest expense
increased 10.4% during the six months ended June 30, 1995 as compared to
the same six month period in 1994.
Pretax income increased $22.3 million or 19.1% during the six months ended
June 30, 1995 compared to the same period in 1994.
12
PAGE
The increase in total revenue, operating expenses, and pretax income is
primarily due to acquired companies' results of operations.
In the fourth quarter of 1994, the Company recorded restructuring charges
of $48.7 million in connection with the elimination of duplicate facilities
and excess personnel resulting primarily from the merger of Lintas New York
and Ammirati & Puris agencies and certain international offices. At
December 31, 1994 the Company's liability related to these restructuring
charges totalled $27.6 million for severance. The remaining liability at
June 30, 1995 is $6.5 million for severance. Total salary savings for the
six months ended June 30, 1995 realized from the restructuring amounted to
approximately $8.9 million. The Company expects to realize additional
salary savings from restructuring of approximately $10.1 million during the
remainder of 1995.
Net losses from exchange and translation of foreign currencies for the six
months ended June 30, 1995 were approximately $2.1 million versus $9.4
million for the same period in 1994.
The effective tax rate for the six months ended June 30, 1995 was 42.5%, as
compared to 42.6% in 1994. The decrease in the effective tax rate is
mainly due to the geographic mix of earnings.
13
PART II - OTHER INFORMATION
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
(a) This item is answered in respect of the Annual Meeting
of Stockholders held May 16, 1995.
(b) No response is required to Paragraph (b) because (i)
proxies for the meeting were solicited pursuant to
Regulation 14A under the Securities Exchange Act of
1934, as amended; (ii) there was no solicitation
in opposition to Management's nominees as listed in the
proxy statement; and (iii) all such nominees were
elected.
(c) At the Annual Meeting, the following number of shares
were cast with respect to each matter voted upon:
-- Proposal to approve Management's nominees for
director as follows:
BROKER
NOMINEE FOR WITHHELD NONVOTES
Eugene P. Beard 66,418,102 153,008 0
Frank J. Borelli 66,347,557 223,553 0
Lynne V. Cheney 66,410,244 160,866 0
Philip H. Geier, Jr. 66,419,400 151,710 0
Frank B. Lowe 61,958,728 4,612,382 0
Leif H. Olsen 66,364,760 206,350 0
J. Phillip Samper 66,417,463 153,647 0
Joseph J. Sisco 66,329,022 242,088 0
-- Proposal to approve an increase in the Company's
authorized Common Stock, par value $.10 per share,
to 150 million shares.
For Against Abstain Broker Nonvotes
63,195,364 3,130,892 244,854 0
-- Proposal to approve the Company's Employee Stock
Purchase Plan (1995).
For Against Abstain Broker Nonvotes
58,644,723 2,410,663 363,800 5,151,924
14
-- Proposal to approve Amendments to the Company's
Management Incentive Compensation Plan.
For Against Abstain Broker Nonvotes
55,613,030 10,386,683 571,397 0
-- Proposal to approve confirmation of independent
accountants.
For Against Abstain Broker Nonvotes
66,389,129 71,978 110,003 0
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 3(i) Restated Certificate of Incorporation
of the Company, as Amended.
Exhibit 10(a) Note Purchase Agreement, dated April,
28, 1995 by and between the Company and
The Prudential Insurance Company of
America.
Exhibit 10(b) Note, dated April 28, 1995, of the
Company.
Exhibit 10(c) Notice, dated June 13, 1995, by The Lowe
Group of Cancellation of a Multicurrency
Revolving Credit Facility Agreement, as
amended, dated December 17, 1991, among
Lowe International Limited, Lowe
Worldwide Holdings, B.V., Lowe &
Partners Inc. and Lloyds Bank plc et.
al.
Exhibit 10(d) Amendment Number 4, dated as of April 1,
1995 to the Credit Agreement, dated as
of September 30, 1992 and effective as
of December 30, 1992 by and between the
Company and The Bank of New York.
Exhibit 10(e) Employee Stock Purchase Plan (1995) of
the Company.
Exhibit 10(f) Management Incentive Compensation Plan
of the Company.
Exhibit 11 Computation of Earnings Per Share.
Exhibit 27 Financial Data Schedule.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter
ended June 30, 1995.
15
PAGE
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
THE INTERPUBLIC GROUP OF COMPANIES, INC.
(Registrant)
Date: August 14, 1995 By /S/ Philip H. Geier, Jr.
Philip H. Geier, Jr.
Chairman of the Board,
President and Chief
Executive Officer
Date: August 14, 1995 By /S/ Joseph M. Studley
Joseph M. Studley
Chief Accounting Officer,
Vice President
and Controller
16
PAGE
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
INDEX TO EXHIBITS
Exhibit No. Description
Exhibit 3(i) Restated Certificate of Incorporation
of the Company, as Amended.
Exhibit 10(a) Note Purchase Agreement, dated April,
28, 1995 by and between the Company and
The Prudential Insurance Company of
America.
Exhibit 10(b) Note, dated April 28, 1995, of the
Company.
Exhibit 10(c) Notice, dated June 13, 1995, by The Lowe
Group of Cancellation of a Multicurrency
Revolving Credit Facility Agreement, as
amended, dated December 17, 1991, among
Lowe International Limited, Lowe
Worldwide Holdings, B.V., Lowe &
Partners Inc. and Lloyds Bank plc et.
al.
Exhibit 10(d) Amendment Number 4, dated as of April 1,
1995 to the Credit Agreement, dated as
of September 30, 1992 and effective as
of December 30, 1992 by and between the
Company and The Bank of New York.
Exhibit 10(e) Employee Stock Purchase Plan (1995) of
the Company.
Exhibit 10(f) Management Incentive Compensation Plan
of the Company.
Exhibit 11 Computation of Earnings Per Share.
Exhibit 27 Financial Data Schedule.
17
RESTATED CERTIFICATE OF INCORPORATION
OF
THE INTERPUBLIC GROUP OF COMPANIES, INC.
Under Section 245 of the Delaware General Corporation Law
We, PAUL FOLEY, President, and J. DONALD McNAMARA, Secretary
of THE INTERPUBLIC GROUP OF COMPANIES, INC., a corporation
existing under the laws of the State of Delaware, do hereby
certify under the seal of the said corporation as follows:
FIRST: The name of the Corporation is THE INTERPUBLIC GROUP
OF COMPANIES, INC. The name under which it was formed was
"McCann-Erickson Incorporated".
SECOND: The Certificate of Incorporation of the Corporation
was filed with the Secretary of State, Dover, Delaware, on the
18th day of September, 1930.
THIRD: The amendments and the restatement of the
Certificate of Incorporation have been duly adopted in accordance
with the provisions of Sections 242 and 245 of the General
Corporation Law of the State of Delaware by an affirmative vote
of the holders of a majority of all outstanding shares entitled
to vote at a meeting of shareholders, and by an affirmative vote
of the holders of a majority of all outstanding shares of each
class entitled to vote separately as a class, and the capital of
the Corporation will not be reduced under or by reason of said
amendment.
FOURTH: The text of the Certificate of Incorporation of
said The Interpublic Group of Companies, Inc., as amended, is
hereby restated as further amended by this Certificate, to read
in full, as follows:
ARTICLE 1. The name of this Corporation is THE
INTERPUBLIC GROUP OF COMPANIES, INC.
ARTICLE 2. The registered office of the Corporation is
located at 306 South State Street in the City of Dover, in
the County of Kent, in the State of Delaware. The name of
its registered agent at said address is the UNITED STATES
CORPORATION COMPANY.
ARTICLE 3. The nature of the business of the
Corporation and the objects or purposes to be transacted,
promoted or carried on by it, are:
PAGE
(a) To conduct a general advertising agency,
public relations, sales promotion, product development,
marketing counsel and market research business, to
conduct research in and act as consultant and advisor
in respect to all matters pertaining to advertising,
marketing, merchandising and distribution of services,
products and merchandise of every kind and description,
and generally to transact all other business not
forbidden by law, and to do every act and thing that
may be necessary, proper, convenient or useful for the
carrying on of such business.
(b) To render managerial, administrative and
other services to persons, firms and corporations
engaged in the advertising agency, public relations,
sales promotion, product development, marketing counsel
or market research business.
(c) To manufacture, buy, sell, create, produce,
trade, distribute and otherwise deal in and with motion
pictures, television films, slide films, video tapes,
motion picture scenarios, stage plays, operas, dramas,
ballets, musical comedies, books, animated cartoons,
stories and news announcements, of every nature, kind
and description.
(d) To undertake and transact all kinds of agency
and brokerage business; to act as agent, broker,
attorney in fact, consignee, factor, selling agent,
purchasing agent, exporting or importing agent or
otherwise for any individual or individuals,
association, partnership or corporation; to conduct
manufacturing operations of all kinds; to engage in the
business of distributors, commission merchants,
exporters and importers; to transact a general
mercantile business.
(e) To acquire, hold, use, sell, assign, lease,
grant licenses in respect of, mortgage or otherwise
dispose of letters patent of the United States or any
foreign country, patent rights, licenses and
privileges, inventions, improvements and processes,
copyrights, trademarks and trade names, relating to or
useful in connection with any business of the
Corporation, its subsidiaries and affiliates, or its or
their clients.
PAGE
(f) To purchase, lease, hold, own, use, improve,
sell, convey, mortgage, pledge, exchange, transfer and
otherwise acquire or dispose of and deal in real
property, buildings, structures, works and improvements
wherever situated, and any interests therein, of every
kind, class and description.
(g) To manufacture, purchase, own, use, operate,
improve, maintain, lease, mortgage, pledge, sell or
otherwise acquire or dispose of and deal in machinery,
equipment, fixtures, materials, tools, supplies and
other personal property used in or in connection with
any business of the Corporation, either for cash or for
credit or for property, stocks or bonds or other
consideration as the Board of Directors may determine.
(h) To make loans to any person, partnership,
company or corporation, with or without security.
(i) To acquire by purchase, subscription or
otherwise, and to receive, hold, own, guarantee, sell,
assign, exchange, transfer, mortgage, pledge or
otherwise dispose of or deal in and with any of the
shares of the capital stock, or any voting trust
certificates in respect of the shares of capital stock,
script, warrants, rights, bonds, debentures, notes,
trust receipts, and other securities, obligations,
choses in action and evidences of indebtedness, book
accounts or any other security interest or any other
kind of interest, secured or unsecured, issued or
crated by, or belonging to or standing in the name of,
any corporation, joint stock company, syndicate,
association, firm, trust or person, public or private,
or the government of the United States of America, or
any foreign government, or any state, territory,
province, municipality or other political subdivision
or any governmental agency, and as owner thereof to
possess and exercise all of the rights, powers and
privileges of ownership, including the right to execute
consents and vote thereon, and to do any and all acts
and things necessary or advisable for the preservation,
protection, improvement and enhancement in value
thereof.
(j) To acquire, and pay for in cash, stock or
bonds of the Corporation or otherwise, the goodwill,
rights, assets and property, and to undertake or assume
the whole or any part of the obligations or
liabilities, of any person, firm, association or
corporation.
PAGE
(k) To cause to be formed, merged, consolidated
or reorganized and to promote and aid in any way
permitted by law the formation, merger, consolidation
or reorganization of any corporation.
(l) To borrow or raise moneys for any of the
purposes of the Corporation and, from time to time
without limit as to amount, to draw, make, accept,
endorse, execute and issue promissory notes, drafts,
bills of exchange, warrants, bonds, debentures and
other negotiable or non-negotiable instruments and
evidences of indebtedness, and to secure the payment of
any thereof and of the interest thereon by mortgage
upon or pledge, conveyance or assignment in trust of
the whole or any part of the property of the
Corporation (including any security interests acquired
by the Corporation to secure obligations owing to the
Corporation), whether at the time owned or thereafter
acquired, and to sell, pledge or otherwise dispose of
such bonds or other obligations of the Corporation for
its corporate purposes.
(m) To purchase, hold, sell and transfer the
shares of its own capital stock; provided it shall not
use its funds or property for the purchase of its own
shares of capital stock when such use would cause any
impairment of its capital except as otherwise permitted
by law, and provided further that shares of its own
capital stock belonging to it shall not be voted,
directly and indirectly.
(n) To aid in any manner, any corporation,
association, firm or individual, any of whose
securities, evidences of indebtedness, obligations or
stock are held by the Corporation directly or
indirectly, or in which, or in the welfare of which,
the Corporation shall have any interest, and to
guarantee securities, evidences of indebtedness and
obligations of other persons, firms, associations and
corporations.
(o) To do any and all of the acts and things
herein set forth, as principal, factor, agent,
contractor, or otherwise, either alone or in company
with others; and in general to carry on any other
similar business which is incidental or conducive or
convenient or proper to the attainment of the foregoing
purposes or any of them, and which is not forbidden by
law; and to exercise any and all powers which now or
PAGE
hereafter may be lawful for the Corporation to exercise
under the laws of the State of Delaware; to establish
and maintain offices and agencies within and anywhere
outside of the State of Delaware; and to exercise all
or any of its corporate powers and rights in the State
of Delaware and in any and all other States,
territories, districts, colonies, possessions or
dependencies of the United States of America and in any
foreign countries.
The objects and purposes specified in the foregoing
clauses shall be construed as both purposes and powers and
shall, except where otherwise expressed, be in nowise
limited or restricted by reference to, or inference from,
the terms of any other clause in this Certificate of
Incorporation, but shall be regarded as independent objects
and purposes.
ARTICLE 4. The total number of shares of capital stock
which the Corporation shall have authority to issue is Four
Million (4,000,000) shares, all of which shall be Common
Stock of the par value of Ten Cents ($.10) per share.
Without action by the stockholders, such shares may be
issued by the Corporation from time to time for such
consideration as may be fixed by the Board of Directors,
provided that such consideration shall be not less than par
value. Any and all shares so issued, the full consideration
for which has been paid or delivered shall be deemed fully
paid stock and shall not be liable to any further call or
assessment thereon, and the holders of such shares shall not
be liable for any further payment thereon. No holder of
shares shall be entitled as a matter of right, preemptive or
otherwise, to subscribe for, purchase or receive any shares
of the stock of the Corporation of any class, now or
hereafter authorized, or any options or warrants for such
stock or securities convertible into or exchangeable for
such stock, or any shares held in the treasury of the
Corporation.
ARTICLE 5. The Corporation is to have perpetual
existence.
ARTICLE 6. The private property of the stockholders
shall not be subject to the payment of corporate debts to
any extent whatever.
ARTICLE 7. The number of directors which shall
constitute the whole board shall be fixed from time to time
by the stockholders or the Board of Directors, but in no
case shall the number be less than three.
PAGE
ARTICLE 8. In addition to the powers and authority
expressly conferred upon them by statute and by this
certificate, the directors are hereby empowered to exercise
all such powers and do all such acts and things as may be
exercised or done by the Corporation; subject, nevertheless,
to the provisions of the statutes of Delaware, of this
Certificate of Incorporation, and to the By-Laws of the
Corporation.
ARTICLE 9. In furtherance and not in limitation of the
powers conferred by statute, the Board of Directors is
expressly authorized:
(a) To make, alter, amend and rescind the By-Laws
of this Corporation, without any action on the part of
the stockholders except as may be otherwise provided in
the By-Laws.
(b) To fix and vary from time to time the amount
to be maintained as surplus, the amount to be reserved
as working capital and the amount to be reserved for
other lawful purposes.
(c) To fix the times for the declaration and
payment of dividends and the amount thereof, subject to
the provisions of Article 4 hereof.
(d) To borrow or raise moneys for any of the
purposes of the Corporation, to authorize and cause to
be executed mortgages and liens without limit as to
amount on the real and personal property of this
Corporation or any part thereof, and to authorize the
guaranty by the Corporation of securities, evidences of
indebtedness and obligations of other persons, firms,
associations and corporations.
(e) To sell, lease, exchange assign, transfer,
convey or otherwise dispose of part of the property,
assets and effects of this Corporation, less than
substantially the whole thereof, on such terms and
conditions as it shall deem advisable, without the
assent of the stockholders.
(f) Pursuant to the affirmative vote of the
holders of a majority of the capital stock issued and
outstanding and entitled to vote thereon, to sell,
lease, exchange, assign, transfer and convey or
otherwise dispose of the whole or substantially the
whole of the property, assets, effects and goodwill, of
PAGE
this Corporation, including the corporate franchise,
upon such terms and conditions as the Board of
Directors shall deem expedient and for the best
interests of this Corporation.
(g) To determine from time to time whether and to
what extent and at what time and place and under what
conditions and regulations the accounts and books of
this Corporation, or any of them, shall be open to the
inspection of the stockholders; and no stockholder
shall have any right to inspect any account, book or
document of this Corporation except as conferred by the
laws of the State of Delaware or the By-Laws or as
authorized by resolution of the stockholders or Board
of Directors.
(h) To designate by resolution or resolutions one
or more committees, such committees to consist of two
or more directors each, which to the extent provided in
said resolution or resolutions or in the By-Laws shall
have and may exercise (except when the Board of
Directors shall be in session) all or any of the powers
of the Board of Directors in the management of the
business and affairs of the Corporation, and have power
to authorize the seal of this Corporation to be affixed
to all papers which may require it.
Whether or not herein specifically enumerated, all powers of
this Corporation, in so far as the same may be lawfully vested in
the Board of Directors, are hereby conferred upon the Board of
Directors. This Corporation may in its By-Laws confer powers
upon its directors in addition to those granted by this
certificate and in addition to the powers and authority expressly
conferred upon them by statute.
ARTICLE 10. No contract or transaction between the
Corporation and one or more of its directors or officers, or
between the Corporation and any other corporation,
partnership, association or other organization in which one
or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or
voidable solely for this reason, or solely because the
director or officer is present at or participates in the
meeting of the Board of Directors or committee thereof which
authorizes the contract or transaction, or solely because
his or their votes are counted for such purpose, if:
PAGE
(a) The material facts as to his interest and as
to the contract or transaction are disclosed or are
known to the Board of Directors or the committee, and
the board or committee in good faith authorizes the
contract or transaction by a vote sufficient for such
purpose without counting the vote of the interested
director or directors; or
(b) The material facts as to his interests and as
to the contract or transaction are disclosed or are
known to the stockholders entitled to vote thereon, and
the contract or transaction is specifically approved in
good faith by vote of the stockholders; or
(c) The contract or transaction is fair as to the
Corporation as of the time it is authorized, approved
or ratified by the Board of directors, a committee
thereof, or the stockholders.
Interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors
or of a committee which authorizes the contract or
transaction.
ARTICLE 11. No person shall be liable to the
Corporation for any loss or damage suffered by it on account
of any action taken or omitted to be taken by him as a
director or officer of the Corporation in good faith, if
such person (a) exercised or used the same degree of
diligence, care and skill as an ordinarily prudent man would
have exercised or used under the circumstances in the
conduct of his own affairs, or (b) took, or omitted to take,
such action in reliance in good faith upon advice of counsel
for the Corporation, or upon the books of account or other
records of the Corporation, or upon reports made to the
Corporation by any of its officers or by an independent
certified public accountant or by an appraiser selected with
reasonable care by the Board of Directors or by any
committee designated by the Board of Directors.
ARTICLE 12. The Corporation reserves the right to
amend, alter, change or repeal any provision contained in
this Certificate of Incorporation, in the manner now or
hereafter prescribed by statute, and all rights conferred
upon stockholders herein are granted subject to this
reservation.
PAGE
IN WITNESS WHEREOF, we have signed this certificate and
caused the corporate seal of the Corporation to be hereunto
affixed this 6th day of May, 1974.
PAUL FOLEY
PAUL FOLEY
President
Attest:
J. DONALD McNAMARA
J. DONALD McNAMARA
Secretary
[Corporate Seal]
STATE OF NEW YORK }
}ss.:
COUNTY OF NEW YORK}
BE IT REMEMBERED that on this 6th day of May, 1974,
personally came before me MONROE S. SINGER, a Notary Public in
and for the County and State aforesaid, PAUL FOLEY, party to the
foregoing certificate, known to me personally to be such, and
duly acknowledged the said certificate to be his act and deed,
and that the facts therein stated are true.
GIVEN under my hand and seal of office the day and year
aforesaid.
MONROE S. SINGER
MONROE S. SINGER
Notary Public
MONROE S. SINGER
Notary Public, State of New York
No. 31-9023080
Qualified in New York County
Commission Expires March 30, 1979
[Notarial Seal]
PAGE
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
THE INTERPUBLIC GROUP OF COMPANIES, INC.
Under Section 242 of the Delaware General Corporation Law
We, PAUL FOLEY, President, and J. DONALD McNAMARA, Secretary
of The Interpublic Group of Companies, Inc., a corporation
existing under the laws of the State of Delaware, do hereby
certify under the seal of the said corporation as follows:
FIRST: The name of the Corporation is THE INTERPUBLIC GROUP
OF COMPANIES, INC. The name under which it was formed was
"McCann-Erickson Incorporated".
SECOND: The Certificate of Incorporation of the Corporation
was filed with the Secretary of State, Dover, Delaware, on the
18th day of September, 1930. A Restated Certificate of
Incorporation was filed with the Secretary of State, Dover,
Delaware, on the 9th day of May, 1974.
THIRD: The amendment of the Restated Certificate of
Incorporation has been duly adopted in accordance with the
provisions of Sections 242 of the General Corporation Law of the
State of Delaware by an affirmative vote of the holders of a
majority of all outstanding shares entitled to vote at a meeting
of shareholders, and the capital of the Corporation will not be
reduced under or by reason of said amendment.
FOURTH: The first sentence of Article 4 of the Restated
Certificate of Incorporation is hereby amended by striking out
the whole thereof as it now exists and inserting in lieu and
stead thereof a new first sentence, reading in full as follows:
ARTICLE 4. The total number of shares of capital stock
which the Corporation shall have authority to issue is Eight
Million (8,000,000) shares, all of which shall be Common
Stock of the par value of Ten Cents ($.10) per share.
IN WITNESS WHEREOF, we have signed this Certificate and
caused the corporate seal of the Corporation to be hereunto
affixed this 12th day of May, 1976.
PAUL FOLEY
PAUL FOLEY
President
Attest:
J. DONALD McNAMARA
J. DONALD McNAMARA
Secretary
[Corporate Seal]
PAGE
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
THE INTERPUBLIC GROUP OF COMPANIES, INC.
Under Section 242 of the Delaware General Corporation Law
We, PHILIP H. GEIER, JR., Chairman of the Board, and EDWIN
A. KIERNAN, Jr., Secretary, of The Interpublic Group of
Companies, Inc., a corporation existing under the laws of the
State of Delaware, do hereby certify under the seal of the said
corporation as follows:
FIRST: The name of the Corporation is THE INTERPUBLIC GROUP
OF COMPANIES, INC. The name under which it was formed was
"McCann-Erickson Incorporated".
SECOND: The Certificate of Incorporation of the Corporation
was filed with the Secretary of State, Dover, Delaware, on the
18th day of September, 1930. A Restated Certificate of
Incorporation was filed with the Secretary of State, Dover,
Delaware, on the 9th day of May, 1974 which was subsequently
amended by a Certificate of Amendment of the Restated Certificate
of Incorporation filed with the Secretary of State, Dover,
Delaware on the 13th day of May, 1976.
THIRD: The amendment of the Restated Certificate of
Incorporation has been duly adopted in accordance with the
provisions of Sections 242 of the General Corporation Law of the
State of Delaware by an affirmative vote of the holders of a
majority of all outstanding shares entitled to vote at a meeting
of shareholders, and the capital of the Corporation will not be
reduced under or by reason of said amendment.
FOURTH: The first sentence of Article 4 of the Restated
Certificate of Incorporation, as amended, is further amended by
striking out the whole thereof as it now exists and inserting in
lieu and stead thereof a new first sentence, reading in full as
follows:
ARTICLE 4. The total number of shares of capital stock
which the Corporation shall have authority to issue is
Sixteen Million (16,000,000) shares, all of which shall be
Common Stock of the par value of Ten Cents ($.10) per share.
IN WITNESS WHEREOF, we have signed this Certificate and
caused the corporate seal of the Corporation to be hereunto
affixed this 17th day of May, 1983.
PAGE
PHILIP H. GEIER, JR.
PHILIP H. GEIER, JR.
Chairman of the Board
Attest:
EDWIN A. KIERNAN
EDWIN A. KIERNAN
Secretary
[Corporate Seal]
PAGE
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
THE INTERPUBLIC GROUP OF COMPANIES, INC.
Under Section 242 of the Delaware General Corporation Law
We, PHILIP H. GEIER, JR., Chairman of the Board and
President, and EDWIN A. KIERNAN, Jr., Secretary, of The
Interpublic Group of Companies, Inc., a corporation existing
under the laws of the State of Delaware, do hereby certify under
the seal of the said Corporation as follows:
FIRST: The name of the Corporation is THE INTERPUBLIC GROUP
OF COMPANIES, INC. The name under which it was formed was
"McCann-Erickson Incorporated".
SECOND: The Certificate of Incorporation of the Corporation
was filed with the Secretary of State, Dover, Delaware, on the
18th day of September, 1930. A Restated Certificate of
Incorporation was filed with the Secretary of State, Dover,
Delaware, on the 9th day of May, 1974 which was subsequently
amended by Certificates of Amendment of the Restated Certificate
of Incorporation filed with the Secretary of State, Dover,
Delaware on the 13th day of May, 1976 and on the 17th day of May,
1983, respectively.
THIRD: The amendment of the Restated Certificate of
Incorporation has been duly adopted in accordance with the
provisions of Sections 242 of the General Corporation Law of the
State of Delaware by an affirmative vote of the holders of a
majority of all outstanding shares entitled to vote at a meeting
of shareholders, and the capital of the Corporation will not be
reduced under or by reason of said amendment.
FOURTH: The first sentence of Article 4 of the Restated
Certificate of Incorporation, as amended, is hereby further
amended by striking out the whole thereof as it now exists and
inserting in lieu and stead thereof a new first sentence, reading
in full as follows:
ARTICLE 4. The total number of shares of capital stock
which the Corporation shall have authority to issue is Fifty
Million (50,000,000) shares, all of which shall be Common
Stock of the par value of Ten Cents ($.10) per share.
IN WITNESS WHEREOF, we have signed this Certificate and
caused the corporate seal of the Corporation to be hereunto
affixed this 20th day of May, 1986.
PAGE
PHILIP H. GEIER, JR.
PHILIP H. GEIER, JR.
Chairman of the Board and
President
Attest:
EDWIN A. KIERNAN
EDWIN A. KIERNAN
Secretary
[Corporate Seal]
PAGE
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
THE INTERPUBLIC GROUP OF COMPANIES, INC.
Under Section 242 of the Delaware General Corporation Law
We, EUGENE P. BEARD, Executive Vice President, and EDWIN A.
KIERNAN, JR., Secretary, of The Interpublic Group of Companies,
Inc., a corporation existing under the laws of the State of
Delaware, do hereby certify under the seal of the said
Corporation as follows:
FIRST: The name of the Corporation is THE INTERPUBLIC GROUP
OF COMPANIES, INC. The name under which it was formed was
"McCann-Erickson Incorporated".
SECOND: The Certificate of Incorporation of the Corporation
was filed with the Secretary of State, Dover, Delaware, on the
18th day of September, 1930. A Restated Certificate of
Incorporation was filed with the Secretary of State, Dover,
Delaware, on the 9th day of May, 1974 which was subsequently
amended by Certificates of Amendment of the Restated Certificate
of Incorporation filed with the Secretary of State, Dover,
Delaware on the 13th day of May, 1976, on the 17th day of May,
1983 and on the 20th day of May, 1986, respectively.
THIRD: This amendment of the Restated Certificate of
Incorporation has been duly adopted in accordance with the
provisions of Sections 242 of the General Corporation Law of the
State of Delaware by an affirmative vote of the holders of a
majority of all outstanding shares entitled to vote at a meeting
of shareholders, and the capital of the Corporation will not be
reduced under or by reason of said amendment.
FOURTH: Article 4 of the Restated Certificate of
Incorporation, as amended, is hereby further amended by striking
out the whole thereof as it now exists and inserting in lieu and
stead thereof a new Article 4, reading in full as follows:
ARTICLE 4: (a) The total number of shares of all
classes of stock which the Company shall have the authority
to issue is ninety-five million (95,000,000) shares
consisting of seventy-five million (75,000,000) shares of
Common Stock, par value Ten Cents ($.10) per share, and
twenty million (20,000,000) shares of Preferred Stock,
without par value.
PAGE
(b) The shares of authorized Common Stock shall
be identical in all respects and have equal rights and
privileges. Without action by the stockholders, such
shares of Common Stock may be issued by the Company
from time to time for such consideration as may be
fixed by the Board of Directors, provided that such
consideration shall not be less than par value. Any
and all shares so issued, the full consideration for
which has been paid or delivered shall be deemed fully
paid stock and shall not be liable to any further call
or assessment thereon, and the holders of such shares
shall not be liable for any further payment thereon.
No holder of shares of Common Stock shall be entitled
as a matter of right, preemptive or otherwise, to
subscribe for, purchase or receive any shares of the
stock of the Company of any class, now or hereafter
authorized, or any options or warrants for such stock
or securities convertible into or exchangeable for such
stock, or any shares held in the treasury of the
Company.
(c) The Board of Directors shall have the
authority to issue the shares of Preferred Stock from
time to time on such terms and conditions as it may
determine, and to divide the Preferred Stock into one
or more classes or series and in connection with the
creation of any such class or series to fix by the
resolution or resolutions providing for the issue of
shares thereof the designations, powers, preferences
and relative, participating, optional, or other special
rights of such class or series, and the qualifications,
limitations, or restrictions thereof, to the full
extent now or hereafter permitted by law. The number
of authorized shares of Preferred Stock may be
increased or decreased (but not below the number then
outstanding) by the affirmative vote of the holders of
a majority of the Common Stock, without a vote of the
holders of the Preferred Stock, unless a vote of any
such holders is required pursuant to the certificate or
certificates establishing the series of Preferred
Stock.
FIFTH: The existing Article 12 of the Restated Certificate
of Incorporation is hereby renumbered as Article 13.
SIXTH: The Restated Certificate of Incorporation, as
amended, is hereby further amended by inserting a new Article 12,
reading in full as follows:
PAGE
Article 12. A director of the Corporation shall not be
personally liable to the Corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii)
for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the Delaware General Corporation Law,
or (iv) for any transaction from which the director derived
any improper personal benefit. If the Delaware General
Corporation Law is amended after approval by the
stockholders of this Article to authorize corporate action
further eliminating or limiting the personal liability of
directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest
extent permitted by the Delaware General Corporation Law, as
so amended. Any repeal or modification of this Article 12
by the stockholders of the Corporation shall not adversely
affect any right or protection of a director of the
Corporation existing at the time of such repeal or
modification.
IN WITNESS WHEREOF, we have signed this Certificate and
caused the corporate seal of the Corporation to be hereunto
affixed this 19th day of May, 1988.
EUGENE P. BEARD
EUGENE P. BEARD
Executive Vice President
Attest:
EDWIN A. KIERNAN
EDWIN A. KIERNAN
Secretary
PAGE
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
THE INTERPUBLIC GROUP OF COMPANIES, INC.
Under Section 242 of the Delaware General Corporation Law
We, PHILIP H. GEIER, JR., Chairman of the Board and
President, and CHRISTOPHER RUDGE, Secretary, of The Interpublic
Group of Companies, Inc., a corporation existing under the laws
of the State of Delaware, do hereby certify under the seal of the
said Corporation as follows:
FIRST: The name of the Corporation is THE INTERPUBLIC GROUP
OF COMPANIES, INC. The name under which it was formed was
"McCann-Erickson Incorporated".
SECOND: The Certificate of Incorporation of the Corporation
was filed with the Secretary of State, Dover, Delaware, on the
18th day of September, 1930. A Restated Certificate of
Incorporation was filed with the Secretary of State, Dover,
Delaware, on the 9th day of May, 1974 and was subsequently
amended by Certificates of Amendment of the Restated Certificate
of Incorporation filed with the Secretary of State, Dover,
Delaware on the 13th day of May, 1976, the 17th day of May, 1983,
the 20th of May, 1986, and the 25th of May, 1988, respectively.
THIRD: This amendment of the Restated Certificate of
Incorporation has been duly adopted in accordance with the
provisions of Sections 242 of the General Corporation Law of the
State of Delaware by an affirmative vote of the holders of a
majority of all outstanding shares entitled to vote at a meeting
of shareholders, and the capital of the Corporation will not be
reduced under or by reason of said amendment.
FOURTH: Article 4(a) of the Restated Certificate of
Incorporation, as amended, is hereby further amended by striking
out the whole thereof as it now exists and inserting in lieu and
stead thereof a new Article 4(a), reading in full as follows:
ARTICLE 4(a) The total number of shares of all classes
of stock which the Corporation shall have the authority to
issue is one hundred twenty million (120,000,000) shares,
consisting of one hundred million (100,000,000) shares of
Common Stock, par value Ten Cents ($.10) per share and
twenty million (20,000,000) shares of Preferred Stock,
without par value.
PAGE
IN WITNESS WHEREOF, we have signed this Certificate and
caused the corporate seal of the Corporation to be hereunto
affixed this 19th day of May, 1992.
[Corporate Seal] PHILIP H. GEIER, JR.
PHILIP H. GEIER, JR.
Chairman of the Board and
President
Attest:
CHRISTOPHER RUDGE
CHRISTOPHER RUDGE
Secretary
PAGE
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
THE INTERPUBLIC GROUP OF COMPANIES, INC.
Under Section 242 of the Delaware General Corporation Law
I, Christopher Rudge, Senior Vice President and
Secretary of The Interpublic Group of Companies, Inc., a
corporation existing under the laws of the State of Delaware, do
hereby certify as follows:
FIRST: The name of the Corporation is The Interpublic
Group of Companies, Inc. The name under which it was formed was
"McCANN-ERICKSON INCORPORATED."
SECOND: The Certificate of Incorporation of the
Corporation was filed with the Secretary of State, Dover,
Delaware, on the 18th day of September, 1930. A Restated
Certificate of Incorporation was filed with the Secretary of
State, Dover, Delaware, on the 9th day of May, 1974 and was
subsequently amended by Certificates of Amendment of the Restated
Certificate of Incorporation filed with the Secretary of State,
Dover, Delaware, on the 13th day of May, 1976, the 17th day of
May, 1983, the 20th of May, 1986, the 25th of May, 1988 and the
19th of May, 1992, respectively.
THIRD: This amendment of the Restated Certificate of
Incorporation has been duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the
State of Delaware by an affirmative vote of the holders of a
majority of all outstanding shares entitled to vote at a meeting
of shareholders, and the capital of the Corporation will not be
reduced under or by reason of said amendment.
FOURTH: Article 4(a) of the Restated Certificate of
Incorporation, as amended, is hereby further amended by striking
out the whole thereof as it now exists and inserting in lieu and
stead thereof a new Article 4(a), reading in full as follows:
Article 4(a): The total number of shares of all
classes of stock which the Corporation shall have the authority
to issue is one hundred seventy million (170,000,000) shares,
consisting of one hundred fifty million (150,000,000) shares of
Common Stock, par value Ten Cents ($.10) per share, and twenty
million (20,000,000) shares of Preferred Stock, without par
value.
IN WITNESS WHEREOF, I have signed this Certificate this
2nd day of June, 1995.
CHRISTOPHER RUDGE
CHRISTOPHER RUDGE
Senior Vice President and
Secretary
THE INTERPUBLIC GROUP OF COMPANIES, INC.
NOTE PURCHASE AGREEMENT
7.85% Senior Notes due 2005
($25,000,000)
Dated as of April 28, 1995
PAGE
TABLE OF CONTENTS
(Not Part of Agreement)
PAGE
1. AUTHORIZATION OF ISSUE OF NOTES 1
2. PURCHASE AND SALE OF NOTES 1
3. CONDITIONS OF CLOSING 2
4. PREPAYMENTS 3
5. AFFIRMATIVE COVENANTS 4
6. NEGATIVE COVENANTS 7
7. EVENTS OF DEFAULT 9
8. REPRESENTATIONS, COVENANTS AND WARRANTIES 12
9. REPRESENTATIONS OF THE PURCHASER 15
10. DEFINITIONS 16
11. MISCELLANEOUS 20
PURCHASER SCHEDULE
EXHIBIT A -- FORM OF COMPANY NOTE
EXHIBIT B-1 -- FORM OF OPINION OF COMPANY'S SPECIAL COUNSEL
EXHIBIT B-2 -- FORM OF OPINION OF COMPANY'S GENERAL COUNSEL
THE INTERPUBLIC GROUP OF COMPANIES, INC.
1271 AVENUE OF THE AMERICAS
ROCKEFELLER CENTER
NEW YORK, NEW YORK 10020
as of April 28, 1995
The Prudential Insurance Company
of America
c/o Prudential Capital Group
One Gateway Center, 11th Floor
7-45 Raymond Boulevard West
Newark, NJ 07102
Ladies and Gentlemen:
The undersigned, The Interpublic Group of Companies, Inc.,
a Delaware corporation (herein called the "COMPANY"), hereby
agrees with you as follows:
1. AUTHORIZATION OF ISSUE OF NOTES. The Company will
authorize the issue and delivery of its senior promissory notes
(herein, together with any such notes which may be issued
pursuant to any provision of this Agreement, and any such notes
which may be issued hereunder in substitution or exchange
therefor, collectively called the "NOTES" and individually called
a "NOTE") in the aggregate principal amount of $25,000,000, to be
dated the date of issue thereof, to mature April 28, 2005, to
bear interest on the unpaid balance thereof (payable
semi-annually on the twenty-eighth (28th) day of April and
October in each year) from the date thereof until the principal
thereof shall have become due and payable at the rate of 7.85%
per annum and on overdue principal, premium and interest at the
rate specified therein, and to be substantially in the form of
Exhibit A attached hereto.
2. PURCHASE AND SALE OF NOTES. Subject to the terms and
conditions herein set forth, the Company hereby agrees to sell to
you and you agree to purchase from the Company the Notes in the
aggregate principal amount set forth opposite your name in the
Purchaser Schedule attached hereto at 100% of such aggregate
principal amount. The Company will deliver to you, at the
Company's offices at 1271 Avenue of the Americas, Rockefeller
Center, New York, New York 10020, one or more Notes registered in
your name, evidencing the aggregate principal amount of Notes to
be purchased by you and in the denomination or denominations
specified with respect to you in the Purchaser Schedule attached
hereto, against payment of the purchase price thereof by transfer
of immediately available funds for credit to the Company's
account #143-46-358 at Morgan Guaranty Trust Company of New York,
60 Wall Street, New York, New York, ABA #021000238, on the date
of closing, which shall be April 28, 1995 or any other date upon
which the Company and you may mutually agree (herein called the
"CLOSING" or the "DATE OF CLOSING").
3. CONDITIONS OF CLOSING. Your obligation to purchase and
pay for the Notes to be purchased by you hereunder is subject to
the satisfaction, on or before the date of closing, of the
following conditions:
3A. OPINION OF PURCHASER'S SPECIAL COUNSEL. You shall
have received from Sabrina M. Coughlin, Assistant General Counsel
of The Prudential Insurance Company of America ("Prudential"),
who is acting as special counsel for you in connection with this
transaction, a favorable opinion reasonably satisfactory to you
as to such matters incident to the matters herein contemplated as
you may reasonably request.
3B. OPINION OF THE COMPANY'S COUNSEL. You shall have
received from Cleary, Gottlieb, Steen & Hamilton, special counsel
for the Company, and either the Vice President, Associate General
Counsel or the Vice President, Assistant General Counsel of the
Company, favorable opinions reasonably satisfactory to you and
substantially in the forms of Exhibits B-1 and B-2 attached
hereto.
3C. REPRESENTATIONS AND WARRANTIES; NO DEFAULT. The
representations and warranties contained in paragraph 8 shall be
true on and as of the date of closing, except to the extent of
changes caused by the transactions herein contemplated; there
shall exist on the date of closing no Event of Default or
Default; and the Company shall have delivered to you an Officer's
Certificate, dated the date of closing, to both such effects.
3D. PURCHASE PERMITTED BY APPLICABLE LAWS. The purchase
of and payment for the Notes to be purchased by you on the date
of closing on the terms and conditions herein provided (including
the use of the proceeds of such Notes by the Company) shall not
violate any applicable law or governmental regulation (including,
without limitation, section 5 of the Securities Act or Regulation
G, T or X of the Board of Governors of the Federal Reserve
System) and shall not subject you to any tax, penalty or
liability under or pursuant to any applicable law or governmental
regulation relating to the extension of credit or the making of
PAGE
investments, and you shall have received such certificates or
other evidence as you may reasonably request to establish
compliance with this condition; provided that for purposes of
this paragraph 3D, "any applicable law or governmental
regulation" shall exclude sections 406 and 407 of ERISA and
section 4975 of the Code.
3E. PROCEEDINGS. All corporate and other proceedings
taken or to be taken in connection with the transactions
contemplated hereby and all documents incident thereto shall be
reasonably satisfactory in substance and form to you, and you
shall have received all such counterpart originals or certified
or other copies of such documents as you may reasonably request.
3F. PAYMENT OF FEES. Prudential shall have received in
immediately available funds a $10,000 structuring fee.
4. PREPAYMENTS. The Notes shall be subject to required
prepayments as specified in paragraph 4A and optional prepayments
as specified in paragraph 4B.
4A. REQUIRED PREPAYMENTS. Until the Notes shall be paid
in full, the Company shall apply to the prepayment of the Notes,
without premium, the sum of $6,250,000 (or such lesser principal
amount as then may be outstanding) on April 28 in each of the
years 2002 to 2004, inclusive, and such principal amounts of the
Notes, together with interest thereon to the prepayment dates and
without premium, shall become due on such prepayment dates. The
remaining $6,250,000 principal amount of the Notes (or such
lesser principal amount as then may be outstanding), together
with interest accrued thereon and without premium, shall become
due on the maturity date of the Notes.
4B. OPTIONAL PREPAYMENT WITH YIELD-MAINTENANCE PREMIUM.
The Notes shall be subject to prepayment, in whole at any time or
from time to time in part (in multiples of $500,000), at the
option of the Company at 100% of the principal amount so prepaid
plus interest thereon to the prepayment date and the Yield
Maintenance Premium, if any, with respect to each such Note.
4C. Notice of Optional Prepayment. The Company shall give
each holder of such Notes irrevocable written notice of any
prepayment pursuant to paragraph 4B not less than 10 Business
Days prior to the prepayment date, specifying such prepayment
date and the principal amount of the Notes, and of the Notes held
by such holder, to be prepaid on such date and stating that such
prepayment is to be made pursuant to paragraph 4B. Notice of
PAGE
prepayment having been given as aforesaid, the principal amount
of the Notes specified in such notice, together with interest
thereon to the prepayment date and together with the premium, if
any, herein provided, shall become due and payable on such
prepayment date.
4D. PARTIAL PAYMENTS PRO RATA. Upon any partial
prepayment of the Notes pursuant to paragraph 4A or 4B, the
principal amount so prepaid of the Notes shall be allocated among
the Notes at the time outstanding (including, for the purpose of
this paragraph 4D only, all Notes prepaid or otherwise retired or
purchased or otherwise acquired by the Company or any of its
Subsidiaries or Affiliates other than by prepayment pursuant to
paragraph 4A or 4B) in proportion to the respective outstanding
principal amounts thereof.
4E. RETIREMENT OF NOTES. The Company shall not, and shall
not permit any of its Subsidiaries or Affiliates to, prepay or
otherwise retire in whole or in part prior to their stated final
maturity (other than by prepayment pursuant to paragraph 4A or 4B
or upon acceleration of such final maturity pursuant to paragraph
7A), or purchase or otherwise acquire, directly or indirectly,
Notes held by any holder unless the Company, such Subsidiary or
such Affiliate shall have offered to prepay or otherwise retire
or purchase or otherwise acquire, as the case may be, the same
proportion of the aggregate principal amount of Notes held by
each other holder of Notes at the time outstanding upon the same
terms and conditions. Any Notes so prepaid or otherwise retired
or purchased or otherwise acquired by the Company or any of its
Subsidiaries or Affiliates shall not be deemed to be outstanding
for any purpose under this Agreement, except as provided in
paragraph 4D.
5. AFFIRMATIVE COVENANTS.
5A. FINANCIAL STATEMENTS. The Company covenants that it
will deliver to each holder of a Note:
(i) as soon as practicable and in any event within 50
days after the end of each quarterly period (other than the
last quarterly period) in each fiscal year, an unaudited
consolidated statement of income and retained earnings and
statement of cash flows of the Company and its Consolidated
Subsidiaries for the period from the beginning of the
current fiscal year to the end of such quarterly period,
and an unaudited consolidated balance sheet of the Company
and its Consolidated Subsidiaries as at the end of such
PAGE
quarterly period, setting forth in each case in comparative
form figures for the corresponding period in the preceding
fiscal year, all in reasonable detail and certified,
subject to changes resulting from year-end adjustments, as
to fairness of presentation, generally accepted accounting
principle (other than as to footnotes) and consistency by
the chief financial officer or chief accounting officer of
the Company (except to the extent of any change described
therein and permitted by generally accepted accounting
principles);
(ii) as soon as practicable and in any event within
95 days after the end of each fiscal year, a consolidated
statement of income and retained earnings and statement of
cash flows of the Company and its Consolidated Subsidiaries
for such year, and a consolidated balance sheet of the
Company and its Consolidated Subsidiaries as at the end of
such year, setting forth in each case in comparative form
corresponding consolidated figures from the preceding
annual audit, and all reported on by Price Waterhouse or
other independent public accountants of recognized standing
selected by the Company whose report shall state that such
audit shall have been conducted by them in accordance with
generally accepted auditing standards;
(iii) promptly upon distribution thereof to
shareholders of the Company, copies of all such financial
statements, proxy statements, notices and reports so
distributed, and promptly upon filing thereof, copies of
all registration statements (other than exhibits or any
registration statement on Form S-8, or other equivalent
substitute form, under the Securities Act) and all reports
which it files with the Securities and Exchange Commission
(or any governmental body or agency succeeding to the
functions of the Securities and Exchange Commission);
(iv) with reasonable promptness, such other
information with respect to the business and consolidated
financial position of the Company and its Consolidated
Subsidiaries as such holder may reasonably request;
(v) within five (5) days of the chief executive
officer, chief operating officer, principal financial
officer or principal accounting officer of the Company
obtaining knowledge of any condition or event known by such
person to constitute a continuing Default, an Officer's
Certificate specifying the nature thereof and, within five
PAGE
(5) days thereafter, an Officer's Certificate specifying
what action the Company proposes to take with respect
thereto; and
(vi) promptly following the chief executive officer,
chief operating officer, principal financial officer or
principal accounting officer of the Company obtaining
knowledge that any member of the Controlled Group (a) has
given or is required to give notice to the PBGC of any
"reportable event" (as defined in Section 4043 of ERISA)
with respect to any Plan which might constitute grounds for
a termination of such Plan under Title IV of ERISA, or that
the plan administrator of any Plan has given or is required
to give notice of any such reportable event, a copy of the
notice of such reportable event given or required to be
given to the PBGC, (b) has received notice of complete or
partial withdrawal liability under Title IV of ERISA, a
copy of such notice, or (c) has received notice from the
PBGC under Title IV of ERISA of an intent to terminate or
appoint a trustee to administer any Plan, a copy of such
notice;
PROVIDED, HOWEVER, that the Company shall be deemed to have
satisfied its obligations under clauses (i) and (ii) above if and
to the extent that the Company has provided to each holder of a
Note pursuant to clause (iii) periodic reports (on Forms 10-Q and
10-K) required to be filed by the Company with the Securities and
Exchange Commission pursuant to the Securities Exchange Act of
1934 for the quarterly and annual periods described in such
clauses (i) and (ii).
Together with each delivery of financial statements required by
clauses (i) and (ii) above, the Company will deliver an Officer's
Certificate with computations in reasonable detail to establish
whether the Company was in compliance on the date of such
financial statements with the provisions of paragraphs 6A through
6C and stating whether, to the knowledge of the individual
signing such Certificate after having exercised reasonable
diligence to ascertain the relevant facts, there exists a
continuing Default, and, if any Default exists, specifying the
nature thereof and what action the Company proposes to take with
respect thereto.
5B. BOOKS AND RECORDS; INSPECTION OF PROPERTY.
(i) The Company will maintain or cause to be maintained the
books of record and account of the Company and each Consolidated
PAGE
Subsidiary, in good order in accordance with sound business
practice so as to permit its financial statements to be prepared
in accordance with generally accepted accounting principles.
(ii) The Company will permit any Person designated by any
holder of Notes in writing, at such holder's expense, to visit
and inspect any of the properties of and to examine the corporate
books and financial records of the Company and make copies
thereof or extracts therefrom and to discuss the affairs,
finances and accounts of the Company with its principal officers
and its independent public accountants, all at such reasonable
times and as often as such holder may reasonably request.
(iii) With the consent of the Company (which consent will
not be unreasonably withheld) or, if an Event of Default has
occurred and is continuing, without the requirement of any such
consent, the Company will permit any Person designated by any
holder of Notes in writing, at such holder's expense, to visit
and inspect any of the properties of and to examine the corporate
books and financial records of any Consolidated Subsidiary and
make copies thereof or extracts therefrom and to discuss the
affairs, finances and accounts of such Consolidated Subsidiary
with its and the Company's principal officers and the Company's
independent public accountants, all at such reasonable times and
as often as such holder may reasonably request.
5C. MAINTENANCE OF PROPERTY; INSURANCE. The Company will
maintain or cause to be maintained in good repair, working order
and condition all properties used and useful in the business of
the Company and each Consolidated Subsidiary and from time to
time will make or cause to be made all appropriate repairs,
renewals and replacement thereof, except where the failure to do
so would not have a material adverse effect on the Company and
its Consolidated Subsidiaries taken as a whole.
The Company will maintain or cause to be maintained,
for itself and its Consolidated Subsidiaries, all to the extent
material to the Company and its Consolidated Subsidiaries taken
as a whole, physical damage insurance on all real and personal
property on an all risks basis, covering the repair and
replacement cost of all such property and consequential loss
coverage for business interruption and extra expense, public
liability insurance in an amount not less than $10,000,000 and
such other insurance of the kinds customarily insured against by
corporations of established reputation engaged in the same or
similar business and similarly situated, of such type and in such
amounts as are customarily carried under similar circumstances.
PAGE
5D. CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. The
Company and its Consolidated Subsidiaries will continue to be
predominantly engaged in business of the same general type as is
now conducted by the Company and its Consolidated Subsidiaries.
Except as otherwise permitted by paragraph 6E, the Company will
at all times preserve and keep in full force and effect its
corporate existence, and rights and franchises material to its
business, and (to the extent material to the Company and its
Consolidated Subsidiaries taken as a whole) those of each of its
Consolidated Subsidiaries, and will qualify, and cause each
Consolidated Subsidiary to qualify, to do business in any
jurisdiction where the failure to do so would have a material
adverse effect on the Company and its Consolidated Subsidiaries
taken as a whole.
5E. COMPLIANCE WITH LAWS. The Company will comply, and
cause each Consolidated Subsidiary to comply, in all material
respects, with the requirements of all applicable laws,
ordinances, rules, regulations, and requirements of any
governmental authority (including, without limitation, ERISA and
the rules and regulations thereunder), except where the necessity
of compliance therewith is contested in good faith by appropriate
proceedings or where the failure to comply would not have a
material adverse effect upon the Company and its Consolidated
Subsidiaries taken as a whole.
5F. INFORMATION REQUIRED BY RULE 144A. The Company
covenants that it will, upon the request of the holder of any
Note, provide such holder, and any qualified institutional buyer
designated by such holder, such financial and other information
as such holder may reasonably determine to be necessary in order
to permit compliance with the information requirements of Rule
144A under the Securities Act in connection with the resale of
Notes, except at such times as the Company is subject to the
reporting requirements of section 13 or 15(d) of the Exchange
Act. For the purpose of this paragraph 5F, the term "QUALIFIED
INSTITUTIONAL BUYER" shall have the meaning specified in Rule
144A under the Securities Act.
5G. RANK OF NOTES. The Company agrees that its
obligations under this Agreement and the Notes shall rank at
least PARI PASSU with all other unsecured senior obligations of
the Company now or hereafter existing.
PAGE
6. NEGATIVE COVENANTS.
6A. CASH FLOW TO TOTAL BORROWED FUNDS. The Company will
not permit the ratio of Cash Flow to Total Borrowed Funds to be
less than 0.25 for any consecutive four quarters, such ratio to
be calculated at the end of each fiscal quarter, on a trailing
four quarter basis.
6B. TOTAL BORROWED FUNDS TO CONSOLIDATED NET WORTH. The
Company will not permit Total Borrowed Funds to exceed 85% of
Consolidated Net Worth at the end of any quarter.
6C. MINIMUM CONSOLIDATED NET WORTH. The Company will not
permit Consolidated Net Worth at any time to be less than the sum
of (i) $250,000,000 and (ii) 25% of the consolidated net income
of the Company for all fiscal quarters ending on or after
December 31, 1990 in which consolidated net income is a positive
number.
6D. NEGATIVE PLEDGE. The Company covenants that neither
it nor any Consolidated Subsidiary will create, assume or suffer
to exist any Lien upon any of its property or assets, whether now
owned or hereafter acquired; PROVIDED, HOWEVER, that the
foregoing restriction and limitation shall not apply to the
following Liens:
(i) Liens existing on the date hereof;
(ii) any Lien existing on any asset of any
corporation at the time such corporation becomes a
Consolidated Subsidiary and not created in contemplation of
such event;
(iii) any Lien on any asset securing Debt incurred or
assumed for the purpose of financing all or any part of the
cost of acquiring such asset, PROVIDED that such Lien
attached to such asset concurrently with or within 90 days
after the acquisition thereof;
(iv) any Lien on any asset of any corporation
existing at the time such corporation is merged or
consolidated with the Company or a Consolidated Subsidiary
and not created in contemplation of such event;
PAGE
(v) any Lien existing on any asset prior to the
acquisition thereof by the Company or a Consolidated
Subsidiary and not created in contemplation of such
acquisition;
(vi) Liens created in connection with Capitalized
Lease Obligations, but only to the extent that such Liens
encumber property financed by such Capitalized Lease
Obligation and the principal component of such Capitalized
Lease Obligation is not increased;
(vii) Liens arising in the ordinary course of its
business which (i) do not secure Debt and (ii) do not in
the aggregate materially impair the operation of the
business of the Company and its Consolidated Subsidiaries
taken as a whole;
(viii) any Lien arising out of the refinancing,
extension, renewal or refunding of any Debt secured by any
Lien permitted by any of the foregoing clauses of this
Section, PROVIDED that such Debt is not increased and is
not secured by any additional assets;
(ix) Liens securing taxes, assessments, fees or other
governmental charges or levies, Liens securing the claims
of materialmen, mechanics, carriers, landlords,
warehousemen and similar Persons, Liens incurred in the
ordinary course of business in connection with workmen's
compensation, unemployment insurance and other similar
laws, Liens to secure surety, appeal and performance bonds
and other similar obligations not incurred in connection
with the borrowing of money, and attachment, judgment and
other similar Liens arising in connection with court
proceedings so long as the enforcement of such Liens is
effectively stayed and the claims secured thereby are being
contested in good faith by appropriate proceedings;
(x) any Lien on property arising in connection with,
and which is the subject of, a securities repurchase
transaction; and
(xi) Liens not otherwise permitted by the foregoing
clauses of this paragraph 6D securing Debt in an aggregate
principal amount at any time outstanding not to exceed 10%
of Consolidated Net Worth.
PAGE
6E. CONSOLIDATIONS, MERGERS AND SALES OF ASSETS. The
Company covenants that it will not, and will not permit any
Consolidated Subsidiary to, be a party to any merger or
consolidate with any other corporation or sell, lease or transfer
or otherwise dispose of all or substantially all of its assets
except that
(i) any Consolidated Subsidiary may merge or
consolidate with, or sell, lease, transfer or otherwise
dispose of all or substantially all of its assets to, any
other Consolidated Subsidiary; and
(ii) any Consolidated Subsidiary may merge or
consolidate with, or sell, lease, transfer or otherwise
dispose of all or substantially all of its assets to, the
Company; and
(iii) the Company and any Consolidated Subsidiary may
merge or consolidate with or sell, lease, transfer or
otherwise dispose of all or substantially all of its assets
to, any other Person (a "TRANSACTION"); PROVIDED, HOWEVER,
that (a) in the case of a Transaction involving the
Company, either (x) the Company shall be the continuing or
surviving corporation or (y) the continuing or surviving
corporation or the transferee of such assets shall be a
corporation organized under the laws of the United States
or Canada and such continuing or surviving corporation or
transferee shall expressly assume in a writing (in a form
reasonably satisfactory to the Required Holder(s)) all of
the Company's obligations under this Agreement and the
Notes, and (b) immediately after such merger, consolidation
or transfer no Default or Event of Default shall exist.
7. EVENTS OF DEFAULT.
7A. ACCELERATION. If any of the following events shall
occur and be continuing for any reason whatsoever (and whether
such occurrence shall be voluntary or involuntary or come about
or be effected by operation of law or otherwise):
(i) the Company defaults in the payment of any
principal of or premium on any Note when the same shall
become due, either by the terms thereof or otherwise as
herein provided; or
PAGE
(ii) the Company defaults in the payment of any
interest on any Note for more than five (5) days after the
date due; or
(iii) the Company or any Significant Subsidiary or
Significant Group of Subsidiaries defaults in any payment
of principal of or interest on any other obligation for
money borrowed (or any Capitalized Lease Obligation, any
obligation under a purchase money mortgage, conditional
sale or other title retention agreement or any obligation
under notes payable or drafts accepted representing
extensions of credit) beyond any period of grace provided
with respect thereto, or the Company or any Significant
Subsidiary or Significant Group of Subsidiaries fails to
perform or observe any other agreement, term or condition
contained in any agreement under which any such obligation
is created (or if any other event thereunder or under any
such agreement shall occur and be continuing), and the
effect of such payment default, failure or other event is
to cause, or to permit the holder or holders of such
obligation (or a trustee on behalf of such holder or
holders) to cause, such obligation to become due or to
require the purchase thereof prior to any stated maturity,
provided that the aggregate amount of all obligations as to
which such a payment default shall occur and be continuing
or such a failure or other event causing or permitting
acceleration shall occur and be continuing exceeds
$10,000,000; or
(iv) any representation or warranty made by the
Company herein or in any certificate furnished pursuant to
this Agreement shall be false in any material respect on
the date as of which made; or
(v) the Company fails to perform or observe any
agreement contained in paragraph 6A, 6B, 6C or 6E; or
(vi) the Company fails to perform or observe any
other agreement, term or condition contained herein and
such failure shall not be remedied within 30 days after the
Company shall have received notice thereof; or
(vii) the Company or any Significant Subsidiary or
Significant Group of Subsidiaries makes a general
assignment for the benefit of creditors or is generally not
paying its debts as such debts become due; or
PAGE
(viii) the Company or any Significant Subsidiary or
Significant Group of Subsidiaries shall commence a
voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or
its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment
of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its
property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in
an involuntary case or other proceeding commenced against
it; or
(ix) an involuntary case or other proceeding shall be
commenced against the Company or any Significant Subsidiary
or Significant Group of Subsidiaries seeking liquidation,
reorganization or other relief with respect to it or its
debts under any bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, and
such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of 60 days; or
(x) an order for relief shall be entered against the
Company or any Significant Subsidiary or Significant Group
of Subsidiaries under the federal bankruptcy laws as now or
hereafter in effect; or
(xi) any order, judgment or decree is entered in any
proceedings against the Company in a court of competent
jurisdiction of the United States (or a State or other
jurisdiction thereof) or Canada (or a Province or other
jurisdiction thereof) decreeing the dissolution of the
Company and such order, judgment or decree remains unstayed
and in effect for more than 60 days; or
(xii) the Company or any other member of the Controlled
Group shall fail to pay when due any amount or amounts
aggregating in excess of $1,000,000 which it shall have
become liable to pay to the PBGC or to a Plan under Title
IV of ERISA (except where such liability is contested in
good faith by appropriate proceedings as permitted under
paragraph 5E); or notice of intent to terminate a Plan or
Plans (other than any multi-employer plan or multiple
employer plan, within the meaning of Section 4001(a)(3) or
PAGE
4063, respectively, of ERISA) having unfunded benefit
liabilities (within the meaning of Section 4001(a)(18) of
ERISA) in excess of $25,000,000 shall be filed under Title
IV of ERISA by any member of the Controlled Group, any plan
administrator or any combination of the foregoing; or the
PBGC shall institute proceedings under Title IV of ERISA to
terminate or to cause a trustee to be appointed to
administer any such Plan; or
(xiii) final judgment in an amount in excess of
$10,000,000 is rendered against the Company or any
Significant Subsidiary or Significant Group of Subsidiaries
and, within 90 days after entry thereof, such judgment is
not discharged or satisfied or execution thereof stayed
pending appeal, or within 90 days after the expiration of
any such stay, such judgment is not discharged or
satisfied;
then (a) if such event is an Event of Default specified in clause
(viii), (ix) or (x) of this paragraph 7A with respect to the
Company, all of the Notes at the time outstanding shall
automatically become immediately due and payable at par together
with interest accrued thereon, without presentment, demand,
protest or notice of any kind, all of which are hereby waived by
the Company and (b) if such event is any other Event of Default,
the Required Holder(s) may at its or their option, by notice in
writing to the Company, declare all of the Notes to be, and all
of the Notes shall thereupon be and become, immediately due and
payable together with interest accrued thereon and together with
the Yield-Maintenance Premium, if any, with respect to each Note
without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Company; provided that the
Yield-Maintenance Premium, if any, with respect to each such Note
shall be due and payable upon such declaration only if (x) such
event is an Event of Default specified in any of clauses (i) to
(vi), inclusive, or clause (xii) or (xiii) of this paragraph 7A,
(y) the Required Holders shall have given to the Company at least
10 Business Days before such declaration written notice stating
their intention so to declare such Notes to be due and payable
and identifying one or more such Events of Default the occurrence
of which on or before the date of such notice permits such
declaration and (z) one or more of the Events of Default so
identified shall be continuing at the time of such declaration.
PAGE
It is agreed that Repurchase Transactions are not deemed to
create obligations which may give rise to an Event of Default
under clause (iii) of this paragraph 7A, provided that the
aggregate face amount of all Treasury securities involved in all
such Repurchase Transactions at no time exceeds 15% of the
Company's consolidated total assets (as reported on the audited
statement of financial condition of the Company most recently
filed with the Securities and Exchange Commission by the Company
prior to the inception of such a Repurchase Transaction) after
giving effect to such proposed Repurchase Transaction.
7B. OTHER REMEDIES. If any Event of Default or Default
shall occur and be continuing, the holder of any Note may proceed
to protect and enforce its rights under this Agreement and such
Note by exercising such remedies as are available to such holder
in respect thereof under applicable law, either by suit in equity
or by action at law, or both, whether for specific performance of
any covenant or other agreement contained in this Agreement or in
aid of the exercise of any power granted in this Agreement. No
remedy conferred in this Agreement upon the holder of any Note is
intended to be exclusive of any other remedy, and each and every
such remedy shall be cumulative and shall be in addition to every
other remedy conferred herein or now or hereafter existing at law
or in equity or by statute or otherwise.
7C. RESCISSION OF ACCELERATION. At any time after any
declaration of acceleration of any of the Notes shall have been
made pursuant to paragraph 7A by any holder or holders of such
Notes, and before a judgment or decree for the payment of money
due has been obtained by such holder or holders, the Required
Holder(s) may, by written notice to the Company and to the other
holders of such Notes, rescind and annul such declaration and its
consequences, PROVIDED that (i) the principal of and interest on
the Notes which shall have become due otherwise than by such
declaration of acceleration shall have been duly paid, and (ii)
all Events of Default other than the nonpayment of principal of
and interest on the Notes which have become due solely by such
declaration of acceleration, shall have been cured or waived by
the Required Holder(s). No rescission or annulment referred to
above shall affect any subsequent Default or any right, power or
remedy arising out of such subsequent Default.
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company
represents, covenants and warrants:
PAGE
8A. ORGANIZATION. The Company is a corporation duly
organized and existing in good standing under the laws of the
State of Delaware, and has the corporate power and all material
governmental licenses, authorizations, consents and approvals
required to own its property and to carry on its business as now
being conducted.
8B. CORPORATE AUTHORIZATION; GOVERNMENTAL AUTHORIZATION;
CONTRAVENTION. (i) The Company has the corporate power and
authority to execute, deliver and perform this Agreement and has
taken all necessary corporate action to authorize the execution,
delivery and performance of this Agreement. The Company has the
corporate authority to issue and sell the Notes and has taken all
necessary corporate action to authorize the issuance of and sale
of the Notes on the terms and conditions of this Agreement.
(ii) None of the offering, issuance, sale and delivery of
the Notes, and fulfillment of or compliance with the terms and
provisions hereof or of the Notes, by the Company requires any
authorization, consent, approval, exemption or other action by or
notice to or filing with any court or administrative or
governmental body (other than routine filings after the date of
closing with the Securities and Exchange Commission and/or state
Blue Sky authorities).
(iii) Neither the execution, delivery or performance of
this Agreement and the Notes nor the offering, issuance and sale
of the Notes, nor fulfillment or any compliance with the terms
and provisions hereof and thereof, will conflict with, or result
in a breach of the terms, conditions or provisions of, or
constitute a default under, or result in any violation of, or
result in the creation of any Lien upon any of the properties or
assets of the Company or any Consolidated Subsidiary pursuant to,
the charter or by-laws of the Company or any Consolidated
Subsidiary, any award of any arbitrator or any material agreement
(including any agreement with stockholders), instrument, order,
judgment, decree, statute, law, rule or regulation to which the
Company or any Consolidated Subsidiary is subject, excluding
sections 406 and 407 of ERISA and section 4975 of the Code.
8C. BINDING EFFECT. Each of the Agreement and the Notes
constitutes, or when executed and delivered will constitute, a
legal, valid and binding obligation of the Company in accordance
with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting
creditors' rights generally, and subject to general principles of
PAGE
equity (regardless of whether enforceability is considered in a
proceeding in equity or at law).
8D. BUSINESS; FINANCIAL STATEMENTS The Company has
furnished you with the following documents and financial
statements:
(i) The following financial statements of the
Company: the audited consolidated balance sheets of the
Company and its Consolidated Subsidiaries as of December
31, 1994, 1993 and 1992 and the related consolidated
statements of earnings and retained earnings and statement
of cash flows for the three year period ended December 31,
1994, reported on by Price Waterhouse. The financial
statements referred to in this subparagraph (i) are herein
collectively referred to as the "HISTORICAL FINANCIAL
STATEMENTS."
(ii) The Company's Annual Report on Form 10-K for the
years ended December 31, 1994, 1993 and 1992, in each case
as filed with the Securities and Exchange Commission. The
reports referred to in this subparagraph (ii) are herein
collectively referred to as the "PUBLIC DOCUMENTS."
The Historical Financial Statements (including any related
schedules and/or notes) fairly present the consolidated
financial position and the consolidated results of operations and
consolidated cash flows of the corporations described therein at
the dates and for the periods shown, all in conformity with
generally accepted accounting principles applied on a consistent
basis (except as otherwise therein or in the notes thereto
stated) throughout the periods involved. There has been no
material adverse change in the business, condition (financial or
otherwise) or operations of the Company and its Consolidated
Subsidiaries taken as a whole since December 31, 1994. The
Public Documents have been prepared in all material respects in
conformity with the rules and regulations of the Securities and
Exchange Commission applicable thereto and set forth an accurate
description in all material respects of the business conducted by
the Company and its Consolidated Subsidiaries and the properties
owned and operated in connection therewith.
8E. ACTIONS PENDING. There is no action, suit or
proceeding pending or, to the knowledge of the Company,
threatened against the Company or any of its Consolidated
Subsidiaries by or before any court, arbitrator or administrative
or governmental body in which there is a significant probability
PAGE
of an adverse decision which, if adversely decided, would result
in any material adverse change in the business, condition
(financial or otherwise) or operations of the Company and its
Consolidated Subsidiaries taken as a whole or which in any manner
draws into question the validity of this Agreement or any Note.
8F. COMPLIANCE WITH ERISA. Each member of the Controlled
Group has fulfilled its obligations under the minimum funding
standards of ERISA and the Code with respect to each Plan and is
in compliance in all material respects with the presently
applicable provisions of ERISA and the Code except where the
failure to comply would not have a material adverse effect on the
Company and its Consolidated Subsidiaries taken as a whole, and
has not incurred any unsatisfied material liability to the PBGC
or a Plan under Title IV of ERISA other than a liability to the
PBGC for premiums under Section 4007 of ERISA.
8G. TAXES. United States Federal income tax returns of
the Company and its Consolidated Subsidiaries have been examined
and closed through the fiscal year ended December 31, 1985. The
Company has and each of its Consolidated Subsidiaries has filed
all Federal and other material income tax returns which, to the
best knowledge of the officers of the Company, are required to be
filed, and each has paid all taxes as shown on such returns and
on all assessments received by it to the extent that such taxes
have become due except for those which are being contested in
good faith by the Company or the Consolidated Subsidiary, as the
case may be. The charges and accruals and reserves on the books
of the Company and its Consolidated Subsidiaries in respect of
taxes or other governmental charges are, in the opinion of the
Company, adequate.
8H. SUBSIDIARIES; QUALIFICATIONS. Each of the Company's
Consolidated Subsidiaries is a corporation duly organized and
existing in good standing under the laws of its jurisdiction of
incorporation, and the Company and its Consolidated Subsidiaries
have such corporate powers and all such governmental licenses,
authorizations, consents and approvals required to own their
respective properties and to carry on their respective business
as now being conducted, all to the extent material to the Company
and its Consolidated Subsidiaries taken as a whole.
8I. OFFERING OF NOTES. Neither the Company nor any agent
authorized to act on its behalf has, directly or indirectly,
offered the Notes, or any similar security of the Company for
sale to, or solicited any offers to buy the Notes or any similar
security of the Company from, or otherwise approached or
PAGE
negotiated with respect thereto with, any Person other than not
more than 10 institutional investors, and neither the Company nor
any agent authorized to act on its behalf has taken or will take
any action which would subject the issuance or sale of the Notes
to the provisions of section 5 of the Securities Act or to the
provisions of any securities or Blue Sky law of any applicable
jurisdiction.
8J. REGULATION G, ETC. The proceeds of sale of the Notes
will be used to refinance a portion of the Company's short-term
borrowings. None of such proceeds will be used, directly or
indirectly, for the purpose, whether immediate, incidental or
ultimate, of purchasing or carrying any "margin stock" as defined
in Regulation G (12 CFR Part 207) of the Board of Governors of
the Federal Reserve System (herein called "margin stock") or for
the purpose of maintaining, reducing or retiring any indebtedness
which was originally incurred to purchase or carry any stock that
is then currently a margin stock or for any other purpose which
might constitute this transaction a "purpose credit" within the
meaning of such Regulation G. Neither the Company nor any agent
acting on its behalf has taken or will take any action which
might cause this Agreement or the Notes to violate Regulation G,
Regulation T or any other regulation of the Board of Governors of
the Federal Reserve System or to violate the Securities Exchange
Act of 1934, as amended, in each case as in effect now or as the
same may hereafter be in effect.
8K. DISCLOSURE. The Historical Financial Statements and
the Public Documents (as of the respective dates thereof and when
taken as a whole) do not contain any untrue statement of a
material fact and do not omit to state a material fact necessary
in order to make the statements contained therein not misleading.
8L. TITLE TO PROPERTIES. The Company has and each of its
Consolidated Subsidiaries has good and marketable title to its
respective real properties (other than properties which it
leases) and good title to all of its other respective properties
and assets, except where the failure to have such title would not
have a material adverse effect on the Company and its
Consolidated Subsidiaries taken as a whole, subject to no Lien of
any kind except Liens permitted by paragraph 6D. All leases
necessary in any material respect for the conduct of the
respective businesses of the Company and its Consolidated
Subsidiaries are valid and subsisting and are in full force and
effect, except where the failure to be so in effect would not
have a material adverse effect on the Company and its
Consolidated Subsidiaries taken as a whole.
PAGE
9. REPRESENTATIONS OF THE PURCHASER. By acceptance of the
Notes, you hereby acknowledge that the Notes have not been
registered under the Securities Act and may not be sold, offered
for sale or otherwise transferred except pursuant to an exemption
from such registration requirements. You represent, and in
making this sale to you it is specifically understood and agreed,
that you are not acquiring the Notes to be purchased by you
hereunder with a view to or for sale in connection with any
distribution thereof within the meaning of the Securities Act,
provided that the disposition of your property shall at all times
be and remain within your control. You further acknowledge that
you are a "qualified institutional buyer" as that term is defined
in Rule 144A under the Securities Act. You also represent that
all of the funds being used by you to pay the purchase price of
the Notes being purchased by you hereunder are assets of an
insurance company general account and, if any assets in the
general account are, or may be, assets of any "employee benefit
plan" within the meaning of Section 3(3) of ERISA, you meet the
conditions for application of the general exemption in Section I
of the Proposed Class Exemption for Certain Transactions
Involving Insurance Company General Accounts (59 Fed. Reg. 43134
(1994)).
10. DEFINITIONS. The following terms shall have the
meanings specified with respect thereto below:
10A. YIELD-MAINTENANCE TERMS.
"CALLED PRINCIPAL" shall mean, with respect to any Note,
the principal of such Note that is to be prepaid pursuant to
paragraph 4B (any partial prepayment being applied in
satisfaction of required payments of principal in inverse order
of their scheduled due dates) or is declared to be immediately
due and payable pursuant to paragraph 7A, as the context
requires.
"DISCOUNTED VALUE" shall mean, with respect to the Called
Principal of any Note, the amount obtained by discounting all
Remaining Scheduled Payments with respect to such Called
Principal from their respective scheduled due dates to the
Settlement Date with respect to such Called Principal, in
accordance with accepted financial practice and at a discount
factor (applied on a semiannual basis) equal to the Reinvestment
Yield with respect to such Called Principal.
PAGE
"REINVESTMENT YIELD" shall mean, with respect to the Called
Principal of any Note, the yield to maturity implied by (i) the
yields reported, as of 10:00 A.M. (New York City time) on the
Business Day next preceding the Settlement Date with respect to
such Called Principal, on the display designated as "Page 678" on
the Telerate Service (or such other display as may replace Page
678 on the Telerate Service) for actively traded U.S. Treasury
securities having a maturity equal to the Remaining Average Life
of such Called Principal as of such Settlement Date, or if such
yields shall not be reported as of such time or the yields
reported as of such time shall not be ascertainable, (ii) the
Treasury Constant Maturity Series yields reported, for the latest
day for which such yields shall have been so reported as of the
Business Day next preceding the Settlement Date with respect to
such Called Principal, in Federal Reserve Statistical Release
H.15 (519) (or any comparable successor publication) for actively
traded U.S. Treasury securities having a constant maturity equal
to the Remaining Average Life of such Called Principal as of such
Settlement Date. Such implied yield shall be determined, if
necessary, by (a) converting U.S. Treasury bill quotations to
bond-equivalent yields in accordance with accepted financial
practice and (b) interpolating linearly between reported yields.
"REMAINING AVERAGE LIFE" shall mean, with respect to the
Called Principal of any Note, the number of years (calculated to
the nearest one-twelfth year) obtained by dividing (i) such
Called Principal into (ii) the sum of the products obtained by
multiplying (a) each Remaining Scheduled Payment of such Called
Principal (but not of interest thereon) by (b) the number of
years (calculated to the nearest one-twelfth year) which will
elapse between the Settlement Date with respect to such Called
Principal and the scheduled due date of such Remaining Scheduled
Payment.
"REMAINING SCHEDULED PAYMENTS" shall mean, with respect to
the Called Principal of any Note, all payments of such Called
Principal and interest thereon that would be due on or after the
Settlement Date with respect to such Called Principal if no
payment of such Called Principal were made prior to its scheduled
due date.
"SETTLEMENT DATE" shall mean, with respect to the Called
Principal of any Note, the date on which such Called Principal is
to be prepaid pursuant to paragraph 4B or is declared to be
immediately due and payable pursuant to paragraph 7A, as the
context requires.
PAGE
"YIELD-MAINTENANCE PREMIUM" shall mean, with respect to any
Note, a premium equal to the excess, if any, of the Discounted
Value of the Called Principal of such Note over the sum of (i)
such Called Principal plus (ii) interest accrued thereon as of
(including interest due on) the Settlement Date with respect to
such Called Principal. The Yield-Maintenance Premium shall in no
event be less than zero.
10B. OTHER TERMS.
"AFFILIATE" shall mean any Person directly or indirectly
controlling, controlled by, or under direct or indirect common
control with, the Company, except a Subsidiary. A Person shall
be deemed to control a corporation if such Person possesses,
directly or indirectly, the power to direct or cause the
direction of the management and policies of such corporation,
whether through the ownership of voting securities, by contract
or otherwise.
"BUSINESS DAY" shall mean any day other than a Saturday, a
Sunday or a day on which commercial banks in New York City are
required or authorized to be closed.
"CAPITALIZED LEASE OBLIGATION" shall mean, as to any
Person, any rental obligation which, under generally accepted
accounting principles, is or will be required to be capitalized
on the books of such Person, taken at the amount thereof
accounted for as indebtedness (net of interest expense) in
accordance with such principles.
"CASH FLOW" shall mean the sum of net income (plus any
amount by which net income has been reduced by reason of the
recognition of post-retirement and post-employment benefit costs
prior to the period in which such benefits are paid),
depreciation expenses, amortization costs and changes in deferred
taxes.
"CODE" shall mean the Internal Revenue Code of 1986, as
amended, and any successor statute thereto.
"COMPANY" shall have the meaning specified in the
introductory paragraph.
"CONSOLIDATED NET WORTH" shall mean, at any date, the
consolidated stockholders' equity of the Company and its
Consolidated Subsidiaries as such appear on the financial
PAGE
statements of the Company determined in accordance with generally
accepted accounting principles ((i) plus any amount by which
retained earnings has been reduced by reason of the recognition
of post-retirement and post-employment benefit costs prior to the
period in which such benefits are paid and (ii) without taking
into account the effect of cumulative translation adjustments).
"CONSOLIDATED SUBSIDIARY" shall mean at any date any
Subsidiary or other entity the accounts of which would be
consolidated with those of the Company in its consolidated
financial statements as of such date.
"CONTROLLED GROUP" shall mean all members of a controlled
group of corporations and all trades or businesses (whether or
not incorporated) under common control which, together with the
Company, are treated as a single employer under Section 414(b) or
414(c) of the Code.
"DEBT" shall mean, as to any Person, without duplication,
(i) all obligations of such Person for borrowed money, including
reimbursement obligations for letters of credit, (ii) all
obligations of such Person evidenced by bonds, debentures, notes
or other similar instruments, (iii) all obligations of such
Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary
course of business, (iv) all Capitalized Lease Obligations of
such Person, (v) all Debt of others secured by a Lien on any
asset of such Person, whether or not such Debt is assumed by such
Person and (vi) all Debt of others Guaranteed by such Person;
provided, however, that the obligations specified in (i) through
(vi) shall not include obligations arising in connection with
securities repurchase transactions.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended.
"EVENT OF DEFAULT" shall mean any of the events specified
in paragraph 7A, provided that there has been satisfied any
requirement in connection with such event for the giving of
notice, or the lapse of time, or both, and "DEFAULT" shall mean
any of such events, whether or not any such requirement has been
satisfied.
"GUARANTEE" shall mean, as to any Person, any obligation,
contingent or otherwise, of such Person directly or indirectly
guaranteeing any Debt or other obligation of any other Person
and, without limiting the generality of the foregoing, any
PAGE
obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt or other obligation (whether
arising by virtue of partnership arrangements, by agreement to
keep-well, take-or-pay, to maintain financial statement
conditions or otherwise) or (ii) entered into for the purpose of
assuring in any other manner the obligee of such Debt or other
obligation of the payment thereof or to protect such obligee
against loss in respect thereof (in whole or in part), provided
that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business. The
term "Guarantee" used as a verb shall have a corresponding
meaning.
"HISTORICAL FINANCIAL STATEMENTS" shall have the meaning
specified in clause (i) of paragraph 8D.
"LIEN" shall mean, with respect to any asset, any mortgage,
pledge, security interest, encumbrance, lien or charge of any
kind in respect of such asset (including as a result of any
conditional sale or other title retention agreement and any lease
in the nature thereof).
"NOTE(s)" shall have the meaning specified in paragraph 1.
"OFFICER's CERTIFICATE" shall mean a certificate signed in
the name of the Company by its President, one of its Vice
Presidents or its Treasurer.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
or any entity succeeding to any or all of its functions under
ERISA.
"PERSON" shall mean and include an individual, a
partnership, a joint venture, a corporation, a trust, an
unincorporated organization and a government or any department or
agency thereof.
"PLAN" shall mean, at a particular time, any defined
benefit pension plan which is covered by Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the
Code and is either (i) maintained by a member of the Controlled
Group for employees of a member of the Controlled Group or (ii)
maintained pursuant to a collective bargaining agreement or any
other arrangement under which more than one employer makes
contributions and to which a member of the Controlled Group is
then making or accruing an obligation to make contributions or
has within the preceding five plan years made contributions.
PAGE
"PUBLIC DOCUMENTS" shall have the meaning specified in
clause (ii) of paragraph 8D.
"REPURCHASE TRANSACTION" shall mean one or more
transactions in which the Company purchases United States
Treasury securities with a remaining term to maturity of 90 days
or less and simultaneously enters into a repurchase transaction
with respect to such securities with a securities broker/dealer,
where (a) all or substantially all of the initial purchase price
for the Treasury securities is paid directly from the proceeds of
the repurchase transaction and (b) the Treasury securities would
not be included in a balance sheet of the Company prepared in
accordance with generally accepted accounting principles.
"REQUIRED HOLDER(s)" shall mean the holder or holders of at
least 66-2/3% of the aggregate principal amount of the Notes from
time to time outstanding.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
"SIGNIFICANT SUBSIDIARY or SIGNIFICANT GROUP OF
SUBSIDIARIES" at any time of determination means any Consolidated
Subsidiary or group of Consolidated Subsidiaries which,
individually or in the aggregate, together with its or their
Subsidiaries, accounts or account for more than 10% of the
consolidated gross revenues of the Company and its Consolidated
Subsidiaries for the most recently ended fiscal year or for more
than 10% of the total assets of the Company and its Consolidated
Subsidiaries as of the end of such fiscal year; PROVIDED that in
connection with any determination under (x) paragraph 7A(iii)
there shall be a payment default, failure or other event (of the
type specified in that paragraph) with respect to an obligation
(of the type specified in that paragraph but without regard to
the principal amount of such obligation) of each Consolidated
Subsidiary included in such group, (y) paragraph 7A (vii),
(viii), (ix) or (x) the condition or event described therein
shall exist with respect to each Consolidated Subsidiary included
in such group or (z) paragraph 7A(xiii) there shall be a final
judgment (of the type specified in that paragraph but without
regard to the amount of such judgment) rendered against each
Consolidated Subsidiary included in such group.
"SUBSIDIARY" shall mean any corporation or other entity of
which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or
PAGE
other persons performing similar functions is at the time
directly or indirectly owned by the Company.
"TOTAL BORROWED FUNDS" shall mean at any date, without
duplication, (i) all outstanding obligations of the Company and
its Consolidated Subsidiaries for borrowed money, (ii) all
outstanding obligations of the Company and its Consolidated
Subsidiaries evidenced by bonds, debentures, notes or similar
instruments and (iii) any outstanding obligations of the type set
forth in (i) or (ii) of any other Person Guaranteed by the
Company or a Consolidated Subsidiary; PROVIDED, HOWEVER, that
Total Borrowed Funds shall not include any obligation to
repurchase securities under a securities repurchase transaction.
"TRANSFEREE" shall mean any direct or indirect transferee
of all or any part of any Note purchased by you under this
Agreement.
10C. ACCOUNTING TERMS AND DETERMINATIONS. All references
in this Agreement to "generally accepted accounting principles"
shall mean generally accepted accounting principles in effect in
the United States of America at the time of application thereof.
Unless otherwise specified herein, all accounting terms used
herein shall be interpreted, all determinations with respect to
accounting matters hereunder shall be made, and all financial
statements and certificates and reports as to financial matters
required to be furnished hereunder shall be prepared, in
accordance with generally accepted accounting principles, applied
on a basis consistent (except for changes concurred in by the
Company's independent public accountants) with the most recent
audited consolidated financial statements of the Company and its
Consolidated Subsidiaries delivered pursuant to paragraph 5A(ii).
11. MISCELLANEOUS.
11A. NOTE PAYMENTS. The Company agrees that, so long as
you shall hold any Note, it will make payments of principal
thereof and premium, if any, and interest thereon, which comply
with the terms of this Agreement, by wire transfer of immediately
available funds for credit to your account or accounts as
specified in the Purchaser Schedule attached hereto, or such
other account or accounts in the United States as you may
designate in writing not less than 5 Business Days prior to any
payment date, notwithstanding any contrary provision herein or in
any Note with respect to the place of payment. Any payment under
this Agreement or any Note due on a day that is not a Business
Day may be made on the next succeeding day which is a Business
PAGE
Day without penalty or additional interest. You agree that,
before disposing of any Note, you will make a notation thereon
(or on a schedule attached thereto) of all principal payments
previously made thereon and of the date to which interest thereon
has been paid. The Company agrees to afford the benefits of this
paragraph 11A to any Transferee which shall have made the same
agreement as you have made in this paragraph 11A.
11B. EXPENSES. The Company agrees to pay, and save you
and any Transferee harmless against liability for the payment of,
all out-of-pocket expenses arising in connection with (i) all
document production and duplication charges and the fees and
expenses of one special counsel (and any local counsel) engaged
in connection with any subsequent proposed modification of, or
proposed consent under, this Agreement or the Notes, whether or
not such proposed modification shall be effected or proposed
consent granted (but in either event only if requested by the
Company), and (ii) the costs and expenses, including attorneys'
fees, incurred by you or any Transferee in enforcing any rights
under this Agreement or the Notes. In addition, with respect to
you only, the Company agrees to pay, and save you harmless
against liability for the payment of, all out-of-pocket expenses
incurred by you in connection with your responding to any
subpoena or other legal process or informal investigative demand
issued in connection with and arising pursuant to this Agreement
or the transactions contemplated hereby or by reason of your
having acquired any Note (but not including any general
investigation or proceeding involving your investments or
activities generally), including without limitation costs and
expenses incurred in any bankruptcy case. The obligations of the
Company under this paragraph 11B shall survive the transfer of
any Note or portion thereof or interest therein and the payment
of any Note.
11C. CONSENT TO AMENDMENTS. This Agreement may be
amended, and the Company may take any action herein prohibited,
or omit to perform any act herein required to be performed by it,
if the Company shall obtain the written consent to such
amendment, action or omission to act, of the Required Holder(s),
except that, without the written consent of the holder or holders
of all the Notes at the time outstanding, no amendment to this
Agreement shall change the maturity of any Note, or change the
principal of, or the rate or time of payment of interest or any
premium payable with respect to any Note, or affect the time,
amount or allocation of any required prepayments, or reduce the
proportion of the principal amount of the Notes required with
respect to any consent, amendment or waiver or to accelerate the
PAGE
Notes. Each holder of any Note at the time or thereafter
outstanding shall be bound by any consent authorized by this
paragraph 11C, whether or not such Note shall have been marked to
indicate such consent, but any such Notes issued thereafter may
bear a notation referring to any such consent. The Company will
not, directly or indirectly, pay or cause to be paid any
remuneration, whether by way of supplemental or additional
interest, fee or otherwise, to any holder of Notes as
consideration for or as an inducement to the entering into by
such holder of Notes of any waiver or amendment of, or giving a
consent in respect of, any of the terms and provisions of this
Agreement or any Note unless such remuneration is concurrently
paid, on the same terms, ratably to all holders of Notes. The
Company will give prompt written notice of the receipt and effect
of each such waiver, amendment or consent to all holders of the
Notes. No course of dealing between the Company and the holder
of any Note, nor any delay in exercising any rights hereunder or
under any Note, shall operate as a waiver of any rights of any
holder of any Note. As used herein and in the Notes, the term
"this Agreement" and references thereto shall mean this Agreement
as it may from time to time be amended or supplemented.
11D. FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES;
LOST NOTES. The Notes are issuable as registered notes without
coupons in denominations of at least $5,000,000, except in
connection with the transfer of Notes issued by the Company in
smaller denominations in which case and with respect to those
Notes only, the minimum denomination will be such smaller amount.
The Company shall keep at its principal office a register in
which the Company shall provide for the registration of Notes and
of transfers of Notes. Upon surrender for registration of
transfer of any Note at the principal office of the Company, the
Company shall, at its expense, execute and deliver one or more
new Notes of like tenor and of a like aggregate principal amount,
registered in the name of such transferee or transferees. At the
option of the holder of any Note, such Note may be exchanged for
other Notes of like tenor and of any authorized denominations, of
a like aggregate principal amount, upon surrender of the Note to
be exchanged at the principal office of the Company. Whenever
any Notes are so surrendered for exchange, the Company shall, at
its expense, execute and deliver the Notes which the holder
making the exchange is entitled to receive. Every Note
surrendered for registration of transfer or exchange shall be
duly endorsed, or be accompanied by a written instrument of
transfer duly executed, by the holder of such Note or such
holder's attorney duly authorized in writing. Any Note or Notes
issued in exchange for any Note or upon transfer thereof shall
PAGE
carry the rights to unpaid interest and interest to accrue which
were carried by the Note so exchanged or transferred, so that
neither gain nor loss of interest shall result from any such
transfer or exchange. Upon receipt of written notice from the
holder of any Note of the loss, theft, destruction or mutilation
of such Note and, in the case of any such loss, theft or
destruction, upon receipt of such holder's unsecured indemnity
agreement (satisfactory in form and substance to the Company), or
in the case of any such mutilation upon surrender and
cancellation of such Note, the Company will make and deliver a
new Note, of like tenor, in lieu of the lost, stolen, destroyed
or mutilated Note.
11E. PERSONS DEEMED OWNERS. Prior to due presentment for
registration of transfer, the Company may treat the Person in
whose name any Note is registered as the owner and holder of such
Note for the purpose of receiving payment of principal of and
premium, if any, and interest on such Note and for all other
purposes whatsoever, whether or not such Note shall be overdue,
and the Company shall not be affected by notice to the contrary.
11F. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT. All representations and warranties contained herein
or made in writing by or on behalf of the Company in connection
herewith shall survive the execution and delivery of this
Agreement and the Notes, the transfer by you of any Note or
portion thereof or interest therein and the payment of any Note,
and may be relied upon by any Transferee, regardless of any
investigation made at any time by or on behalf of you or any
Transferee. Subject to the preceding sentence, this Agreement
and the Notes embody the entire agreement and understanding
between you and the Company and supersede all prior agreements
and understandings relating to the subject matter hereof.
11G. SUCCESSORS AND ASSIGNS. All covenants and other
agreements in this Agreement contained by or on behalf of any of
the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto
(including, without limitation, any Transferee) whether so
expressed or not.
11H. DISCLOSURE TO OTHER PERSONS. You agree to use your
best efforts (and each other holder of a Note, by availing itself
of the benefits of paragraph 5A(iv) or 5B, similarly agrees) to
hold in confidence and not disclose any information (other than
information (i) which was publicly known or otherwise known to
you, at the time of disclosure (except pursuant to disclosure in
PAGE
connection with this Agreement), (ii) which subsequently becomes
publicly known through no act or omission by you, or (iii) which
otherwise becomes known to you, other than through disclosure by
the Company or any of its Subsidiaries) delivered or made
available by or on behalf of the Company or any of its
Subsidiaries to you which is proprietary in nature, PROVIDED that
nothing herein shall prevent the holder of any Note from
delivering copies of any financial statements and other documents
delivered to such holder, and disclosing any other information
disclosed to such holder, by or on behalf of the Company or any
Subsidiary in connection with or pursuant to this Agreement to
(i) such holder's directors, officers, employees, agents and
professional consultants (which Persons shall be bound by the
provisions hereof), (ii) any other holder of any Note, (iii) any
Person to which such holder offers to sell such Note or any part
thereof (which Person agrees to be bound by the provisions of
this paragraph 11H), (iv) any federal or state regulatory
authority having jurisdiction over such holder, (v) the National
Association of Insurance Commissioners or any similar
organization or (vi) any other Person to which such delivery or
disclosure may be necessary or appropriate (a) in compliance with
any law, rule, regulation or order applicable to such holder, (b)
in response to any subpoena or other legal process or informal
investigative demand, (c) in connection with any litigation to
which such holder is a party or (d) in order to protect such
holder's investment in such Note.
11I. NOTICES. All written communications provided for
hereunder shall be sent by first class mail or nationwide
overnight delivery service (with charges prepaid) and (i) if to
you, addressed to you at the address specified for such
communications in the Purchaser Schedule attached hereto, or at
such other address as you shall have specified to the Company in
writing, (ii) if to any other holder of any Note, addressed to
such other holder at such address as such other holder shall have
specified to the Company in writing or, if any such other holder
shall not have so specified an address to the Company, then
addressed to such other holder in care of the last holder of such
Note which shall have so specified an address to the Company, and
(iii) if to the Company addressed to it at 1271 Avenue of the
Americas, New York, New York 10020, Attention: Senior Vice
President - Financial Operations (together with a copy similarly
addressed but marked Attention: General Counsel), or at such
other address as the Company shall have specified to the holder
of each Note in writing; provided, however, that any such
communication to the Company may also, at the option of the
holder of any Note, be delivered by any other reasonable means to
the Company at its address specified above.
PAGE
11J. DESCRIPTIVE HEADINGS. The descriptive headings of
the several paragraphs of this Agreement are inserted for
convenience only and do not constitute a part of this Agreement.
11K. SATISFACTION REQUIREMENT. If any agreement,
certificate or other writing, or any action taken or to be taken,
is by the terms of this Agreement required to be satisfactory to
you or to the Required Holder(s), the determination of such
satisfaction shall be made by you or the Required Holder(s), as
the case may be, in the sole and exclusive judgment (exercised in
good faith) of the Person or Persons making such determination.
11L. GOVERNING LAW. This Agreement shall be construed and
enforced in accordance with, and the rights of the parties shall
be governed by, the law of the State of New York applicable to
agreements to be performed wholly therein.
11M. COUNTERPARTS. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall
be deemed an original, and it shall not be necessary in making
proof of this Agreement to produce or account for more than one
such counterpart.
[SIGNATURES APPEAR ON THE NEXT PAGE.]
PAGE
If you are in agreement with the foregoing, please sign the
form of acceptance on the enclosed counterpart of this letter and
return the same to the Company, whereupon this letter shall
become a binding agreement among you and the Company.
Very truly yours,
THE INTERPUBLIC GROUP OF
COMPANIES, INC.
By: ALAN M. FORSTER
ALAN M. FORSTER
Vice President and
Treasurer
The foregoing Agreement is
hereby accepted as of the
date first above written.
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: GAIL McDERMOTT
GAIL McDERMOTT
Vice President
PAGE
PURCHASER SCHEDULE
Aggregate
Principal
Amount of
Notes to be NOTE
PURCHASED DENOMI
NATION(s)
THE PRUDENTIAL INSURANCE COMPANY $25,000,000 $25,000,000
OF AMERICA
(1) All payments on account of Notes held
by such purchaser shall be made by wire
transfer of immediately available funds
for credit to:
Account No. 050-54-526
Morgan Guaranty Trust Company of New York
23 Wall Street
New York, New York 10015
(ABA No.: 021-000-238)
Each such wire transfer shall set forth
the name of the Company, the full title
(including the coupon rate and final maturity
date) of the Notes, a reference to "!INV5069"
and the due date and application (as among
principal, premium and interest) of the
payment being made.
(2) Address for all notices relating to payments:
The Prudential Insurance Company of America
c/o Prudential Capital Group
Three Gateway Center
100 Mulberry Street
Newark, New Jersey 07102-4077
Attention: Manager, Investment Operations Group (Privates)
Telephone:(201) 802-5260
Fax: (201) 802-8055
PAGE
(3) Address for all other communications and notices:
The Prudential Insurance Company of America
c/o Prudential Capital Group
One Gateway Center, 11th Floor
7-45 Raymond Boulevard West
Newark, New Jersey 07102-5311
Attention: Managing Director
(4) Tax Identification No.: 22-1211670
PAGE
EXHIBIT A
[FORM OF NOTE]
THE INTERPUBLIC GROUP OF COMPANIES, INC.
7.85% SENIOR NOTE DUE APRIL 28, 2005
No. R-________ _____________,199_
$_____________
FOR VALUE RECEIVED, the undersigned, The Interpublic Group
of Companies, Inc. (herein called the "COMPANY"), a corporation
organized and existing under the laws of the State of Delaware,
hereby promises to pay to ______________________________, or
registered assigns, the principal sum of _______________________
DOLLARS on April 28, 2005 with interest (computed on the basis of
a 360-day year of twelve 30-day months) (a) on the unpaid balance
thereof at the rate of 7.85% per annum from the date hereof,
payable semi-annually on the twenty-eighth (28th) day of April
and October in each year, commencing with the first such date
next succeeding the date hereof, until the principal hereof shall
have become due and payable, and (b) on any overdue payment
(including any overdue prepayment) of principal and premium and,
to the extent permitted by applicable law, each overdue payment
of interest, payable semi-annually as aforesaid (or, at the
option of the registered holder hereof, on demand), at a rate per
annum equal to 9.85%.
Payments of both principal and interest are to be made at
the office of Morgan Guaranty Trust Company of New York, 16 Broad
Street, New York, New York, or at such other place as the holder
hereof shall designate to the Company in writing, in lawful money
of the United States of America.
This Note is one of a series of Senior Notes (herein called
the NOTES") issued pursuant to a Note Purchase Agreement, dated
as of April 28, 1995 (herein called the "AGREEMENT"), between the
Company and The Prudential Insurance Company of America and is
entitled to the benefits thereof.
PAGE
The Notes are issuable only as registered Notes. This Note
is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly
executed, by the registered holder hereof or such holder's
attorney duly authorized in writing, a new Note for a like
principal amount will be issued to, and registered in the name
of, the transferee. Prior to due presentment for registration of
transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company
shall not be affected by any notice to the contrary.
This Note is subject to required and optional prepayment,
as specified in the Agreement.
In case an Event of Default, as defined in the Agreement,
shall occur and be continuing, the principal of this Note may be
declared or otherwise become due and payable in the manner and
with the effect provided in the Agreement.
THIS NOTE IS INTENDED TO BE PERFORMED IN THE STATE OF NEW
YORK AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
LAW OF SUCH STATE.
THE INTERPUBLIC GROUP OF
COMPANIES, INC.
By: ALAN M. FORSTER
ALAN M. FORSTER
Vice President and Treasurer
THE INTERPUBLIC GROUP OF COMPANIES, INC.
7.85% SENIOR NOTE DUE APRIL 28, 2005
No. R-01 April 28, 1995
$25,000,000
FOR VALUE RECEIVED, the undersigned, The Interpublic
Group of Companies, Inc. (herein called the "COMPANY"), a
corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to The Prudential Insurance
Company of America, or registered assigns, the principal sum of
TWENTY-FIVE MILLION DOLLARS on April 28, 2005 with interest
(computed on the basis of a 360-day year of twelve 30-day months)
(a) on the unpaid balance thereof at the rate of 7.85% per annum
from the date hereof, payable semi-annually on the twenty-eighth
(28th) day of April and October in each year, commencing with the
first such date next succeeding the date hereof, until the
principal hereof shall have become due and payable, and (b) on
any overdue payment (including any overdue prepayment) of
principal and premium and, to the extent permitted by applicable
law, each overdue payment of interest, payable semi-annually as
aforesaid (or, at the option of the registered holder hereof, on
demand), at a rate per annum equal to 9.85%.
Payments of both principal and interest are to be made
at the office of Morgan Guaranty Trust Company of New York, 16
Broad Street, New York, New York, or at such other place as the
holder hereof shall designate to the Company in writing, in
lawful money of the United States of America.
This Note is one of a series of Senior Notes (herein
called the "NOTES") issued pursuant to a Note Purchase Agreement,
dated as of April 28, 1995 (herein called the "AGREEMENT"),
between the Company and The Prudential Insurance Company of
America and is entitled to the benefits thereof.
The Notes are issuable only as registered Notes. This
Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly
executed, by the registered holder hereof or such holder's
attorney duly authorized in writing, a new Note for a like
principal amount will be issued to, and registered in the name
PAGE
of, the transferee. Prior to due presentment for registration of
transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company
shall not be affected by any notice to the contrary.
This Note is subject to required and optional prepayment, as
specified in the Agreement.
In case an Event of Default, as defined in the
Agreement, shall occur and be continuing, the principal of this
Note may be declared or otherwise become due and payable in the
manner and with the effect provided in the Agreement.
THIS NOTE IS INTENDED TO BE PERFORMED IN THE STATE OF
NEW YORK AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH
THE LAW OF SUCH STATE.
THE INTERPUBLIC GROUP OF
COMPANIES, INC.
By: ALAN M. FORSTER
ALAN M. FORSTER
Vice President and Treasurer
PAGE
THE LOWE GROUP
BOWATER HOUSE
68-114 KNIGHTSBRIDGE
LONDON SW1X 7LT
ENGLAND
TEL: 0171-225-3434
FAX: 0171-561-5016
13 June 1995
BY HAND
Lloyds Bank Plc
St. George's House
PO Box 787
6/8 Eastcheap
London EC3M 1LL
FOR THE ATTENTION OF: SIMON ELLIS
Dear Sirs:
RE: MULTI CURRENCY FACILITY DATED 17TH DECEMBER 1991
BETWEEN:
(i) LOWE INTERNATIONAL LIMITED;
(ii) LOWE WORLDWIDE HOLDINGS B.V. & LOWE & PARTNERS INC.;
(iii) LLOYDS BANK PLC AS ARRANGER;
(iv) LLOYDS BANK PLC AS AGENT;
(v) DRESDNER BANK: THE FUJI BANK LIMITED, MIDLAND BANK PLC
AND THE UNION BANK OF SWITZERLAND, (THE "FACILITY
AGREEMENT").
As amended by various supplemental agreements.
Please take this letter as formal notification of cancellation of
the whole of the available facility in accordance with the
provisions of Clause 12.5 of the Facility Agreement. Such
cancellations is understood to be irrevocable with the provisions
of Clause 12.6 of the Facility Agreement and the cancellation
should take effect on 30 June 1995.
I will be grateful if you could acknowledge receipt of this
letter.
Yours faithfully,
D. COLEMAN
D. COLEMAN
SOLICITOR
AMENDMENT NO. 4 TO CREDIT AGREEMENT
AMENDMENT, dated as of April 1, 1995 to the Credit
Agreement dated as of September 30, 1992 and effective as of
December 30, 1992, as amended on April 30, 1993, October 5, 1993,
and August 15, 1994 (the "Agreement") between THE INTERPUBLIC
GROUP OF COMPANIES, INC. (the "Borrower") and THE BANK OF NEW
YORK (the "Bank").
The parties hereto desire to amend the Agreement subject to
the terms and conditions of this Amendment, as hereinafter
provided. Accordingly, the parties hereto agree as follows:
1. DEFINITIONS. Unless otherwise specifically defined
herein, each term used herein which is defined in the
Agreement shall have the meaning assigned to such term
in the Agreement. Each reference to "hereof",
"hereunder", "herein" and "hereby" and each other
similar reference and each reference to "this
Agreement" and each other similar reference contained
in the Agreement and in each of the documents relating
to the Agreement shall from and after the date hereof
refer to the Agreement as amended hereby.
2. AMENDMENTS.
A. The definition of "Termination Date" set forth in
Section 1.1 of the Agreement is hereby amended to
read in its entirety as follows:
"Termination Date" means December 1, 1997 or such
later date to which the Commitment is extended in
accordance with Section 2.13 hereof.
B. Section 2.1 of the Agreement is hereby amended by
replacing the number "$10,000,000" with the number
"$15,000,000".
C. The definition of "CD Margin" set forth in Section
2.5(B) of the Agreement is hereby amended to read
in its entirety as follows:
The "CD Margin" means on any date from and after
April 1, 1995 (i) .425%, if at the end of each of
the two most recently completed fiscal quarters
PAGE
the Borrower's ratio of Total Borrowed Funds to
Consolidated Net Worth was equal to or less than
.40 to 1 and the Borrower's ratio of Cash Flow to
Total Borrowed Funds was equal to or greater than
.50 to 1; or (ii) .525%, if (a) the conditions of
clause (i) have not been satisfied and (b) at the
end of each of the two most recently completed
fiscal quarters the Borrower's ratio of Total
Borrowed Funds to Consolidated Net Worth was equal
to or less than .70 to 1 and the Borrower's ratio
of Cash Flow to Total Borrowed Funds was equal to
or greater than .35 to 1; or (iii) 5/8 of 1%, if
the conditions set forth in both clauses (i) and
(ii) are not satisfied.
D. The definition of "Euro-Dollar Margin" set forth
in Section 2.5(C) of the Agreement is hereby
amended to read in its entirety as follows:
The "Euro-Dollar Margin" means on any date from
and after April 1, 1995 (i) 3/10 of 1%, if at the
end of each of the two most recently completed
fiscal quarters the Borrower's ratio of Total
Borrowed Funds to Consolidated Net Worth was equal
to or less than .40 to 1 and the Borrower's ratio
of Cash Flow to Total Borrowed Funds was equal to
or greater than .50 to 1; or (ii) 4/10 of 1%, if
(a) the conditions of clause (i) have not been
satisfied and (b) at the end of each of the two
most recently completed fiscal quarters the
Borrower's ratio of Total Borrowed Funds to
Consolidated Net Worth was equal to or less than
.70 to 1 and the Borrower's ratio of Cash Flow to
Total Borrowed Funds was equal to or greater than
.35 to 1; or (iii) 1/2 of 1%, if the conditions
set forth in both clauses (i) and (ii) are not
satisfied.
E. Section 2.6 of the Agreement is hereby amended to
read in its entirety as follows:
2.6 FEES. The Borrower shall pay to the Bank a
commitment fee on the unused portion of the
Commitment. The per annum commitment fee shall be
on any date from and after April 1, 1995 (i) 1/8
of 1% of the unused portion of the Commitment, if
at the end of each of the two most recently
PAGE
completed fiscal quarters the Borrower's ratio of
Total Borrowed Funds to Consolidated Net Worth was
equal to or less than .40 to 1 and the Borrower's
ratio of Cash Flow to Total Borrowed Funds was
equal to or greater than .50 to 1; or (ii) .15% of
the unused portion of the Commitment, if (a) the
conditions of clause (i) have not been satisfied
and (b) at the end of each of the two most
recently completed fiscal quarters the Borrower's
ratio of Total Borrowed Funds to Consolidated Net
Worth was equal to or less than .70 to 1 and the
Borrower's ratio of Cash Flow to Total Borrowed
Funds was equal to or greater than .35 to 1 or
(iii) .18% of the unused portion of the
Commitment, if the conditions set forth in both
clauses (i) and (ii) are not satisfied. Such fees
shall accrue from April 1, 1995 to and including
the Termination Date and shall be payable
quarterly in arrears on the last day of each
December, March, June, and September and on any
date on which the Commitment is terminated or
otherwise reduced.
F. Section 5.4(B) of the Agreement is hereby amended
to read in its entirety as follows:
"Since December 31, 1991 there has been no
material adverse change in the business, financial
position or results of operations of the Borrower
and its Consolidated Subsidiaries, considered as a
whole, other than as a result of the recognition
of post-retirement and post-employment costs prior
to the period in which such benefits are paid and
the recording of the restructuring charge in the
fourth quarter of 1994."
3. Agreement as Amended. Except as expressly amended
hereby, the Agreement shall continue in full force and
effect in accordance with the terms thereof.
4. REPRESENTATIONS AND WARRANTIES. The Borrower
represents and warrants to the Bank that: (i) it has
full power and authority to enter into this Amendment
and to carry out the transactions contemplated by, and
perform its obligations under the Agreement as amended
hereby; (ii) the execution and delivery of this
Amendment and the performance of the Agreement as
PAGE
amended hereby have been duly authorized by all
necessary corporate action of the Borrower; (iii) the
representations and warranties contained in this
Agreement are true and correct as of the date hereof;
and (iv) as of the date hereof, no Default or Event of
Default has occurred and is continuing.
5. GOVERNING LAW. This Amendment, and the Agreement as
amended hereby, shall be construed in accordance with
and governed by the laws of the State of New York.
6. SEVERABILITY. In case any one or more of the
provisions contained in this Amendment should be
invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be
affected or impaired thereby.
7. COUNTERPARTS. This Amendment may be executed in any
number of counterparts, each of which shall constitute
an original but all of which when taken together shall
constitute one and the same instrument.
8. EFFECTIVENESS. This Amendment shall become effective
as of April 1, 1995 upon receipt by the Bank of all of
the following documents, in form and substance
satisfactorily to the Bank:
(a) counterparts of this Amendment duly executed by
each of the parties hereto;
(b) a duly executed, amended and restated Note, dated
as of April 1, 1995, in the principal amount of
U.S. $15,000,000;
(c) certified copies, each dated as of April 1, 1995,
of (i) all corporate action taken by the Borrower
approving this Amendment, the amended and restated
Note and the matters contemplated hereby and
thereby and (ii) such other corporate documents
and papers as the Bank may reasonably request;
(d) a certificate of a duly authorized officer of the
Borrower, dated as of April 1, 1995, as to the
incumbency, and setting forth a specimen
signature, of each of the persons (i) who has
signed this Amendment and the amended and restated
PAGE
Note on behalf of the Borrower; and (ii) who will,
until replaced by other persons duly authorized
for that purpose, act as the representatives of
the Borrower for the purpose of signing documents
in connection with the Agreement, as amended
hereby and the transactions contemplated hereby
and thereby; and
(e) an opinion of counsel to the Borrower, dated the
date of receipt by the Bank, to the effect that
this Amendment and the amended and restated Note
have been duly authorized, executed and delivered
by the Borrower and confirming the opinion of such
counsel furnished to the Bank pursuant to Section
3.2 of the Agreement with references therein to
the Agreement to mean the Agreement as amended by
this Amendment and with references thereon to the
Note(s) to mean and include the amended and
restated Note.
9. Miscellaneous. Upon the effectiveness of this
Amendment, on and after the date hereof, each reference
in the Agreement to "the Note" or "the Notes" shall
mean and include the amended and restated Note
delivered by the Borrower to the Bank pursuant to
Section 8 hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be executed by their duly authorized officers as of the day
and year first above written.
THE INTERPUBLIC GROUP OF
COMPANIES, INC.
ALAN M. FORSTER
ALAN M. FORSTER
Vice President & Treasurer
BANK OF NEW YORK
HOWARD F. BASCOM, JR.
HOWARD F. BASCOM, JR.
Vice President
THE INTERPUBLIC GROUP OF COMPANIES
EMPLOYEE STOCK PURCHASE PLAN (1995)
The purpose of this Plan is to provide employees a continued
opportunity to purchase IPG stock through annual offerings to be
made during the ten-year period commencing July 1, 1995.
6,000,000 shares in the aggregate are reserved for this purpose.
1. ADMINISTRATION: The Plan will be administered by a
Committee appointed by the Board of Directors, consisting of at
least three of its members.
The Committee will have authority to make rules and
regulations for the administration of the Plan; its
interpretations and decisions with regard thereto shall be final
and conclusive.
2. ELIGIBILITY: All employees of the Corporation and any
subsidiaries designated by the Committee will be eligible to
participate in the Plan, in accordance with such rules as may be
prescribed from time to time, which rules, however, shall neither
permit nor deny participation in the Plan contrary to the
requirements of the Internal Revenue Code (including, but not
limited to, Section 423(b)(3), (4) and (8) thereof) and
regulations promulgated thereunder. No employee may be granted
an option if such employee, immediately after the option is
granted, owns 5% or more of the total combined voting power or
value of all classes of stock of the Corporation or its
subsidiaries. For purposes of the preceding sentence, the rules
of Section 424(d) of the Internal Revenue Code shall apply in
determining the stock ownership of an individual, and stock which
the employee may purchase under outstanding options shall be
treated as stock owned by the employee.
3. OFFERINGS: The Corporation will make one or more annual
offerings to employees to purchase stock under this Plan. The
terms and conditions for each such offering shall specify the
amount of stock that may be purchased thereunder. Each offering
shall include a Purchase Period of 12 months' duration during
which (or during such portion thereof as an employee may elect to
participate) the amounts received as compensation by an employee
shall constitute the measure of such of the employee's
participation in the offering as is based on compensation.
PAGE
4. PARTICIPATION: An employee eligible on the effective
date of any offering may participate in such offering at any time
by completing and forwarding a Payroll Deduction Authorization
form to his appropriate payroll location. The form will
authorize a regular payroll deduction from the employee's
compensation, and must specify the date on which such deduction
is to commence, which may not be retroactive.
5. DEDUCTIONS: The Corporation will maintain payroll
deduction accounts for all participating employees. With respect
to any offering made under this Plan, an employee may authorize a
payroll deduction of up to a maximum of 10% of the compensation
he receives during the Purchase Period specified in the offering
(or during such portion thereof as he may elect to participate).
No employee may be granted an option which permits his
rights to purchase stock under this Plan, or any other stock
purchase plan of the Corporation or its subsidiaries, to accrue
(within the meaning of Section 423(b)(8) of the Internal Revenue
Code and the regulations thereunder) at a rate which exceeds
$25,000 of fair market value of stock (determined at the date of
the offering) for each calendar year in which the option is
outstanding at any time.
6. DEDUCTION CHANGES: An employee may at any time increase
or decrease his payroll deduction by filing a new Payroll
Deduction Authorization form. The change may not become
effective sooner than the next pay period after receipt of the
form. A payroll deduction may be increased only once and reduced
only once during any Purchase Period.
7. WITHDRAWAL OF FUNDS: An employee may at any time and
for any reason permanently draw out the balance accumulated in
his account, and thereby withdraw from participation in an
offering. He may thereafter begin participation again only once
during the remainder of the Purchase Period specified in the
offering. Partial withdrawals will not be permitted.
8. PURCHASE OF SHARES: Each employee participating in any
offering under this Plan will be granted an option, upon the
effective date of such offering, for as many full shares of IPG
stock as he may elect to purchase with the following amounts:
(a) up to 10% of compensation received during the
specified Purchase Period (or during such portion thereof as
he may elect to participate), to be paid by payroll
deductions during such period;
(b) the balance (if any) carried forward from his
payroll deduction account for the preceding Purchase Period
pursuant to the final paragraph of this Section 8; and
PAGE
(c) the balance (if any) carried forward from his
payroll deduction account for the final Purchase Period
(ending June 30, 1995) under The Interpublic Group of
Companies Employee Stock Purchase Plan (1985).
Notwithstanding the preceding sentence, in no event may the
number of shares purchased by any employee under an offering
exceed 3,600 shares.
The purchase price for each share purchased under any
offering will be 85% of the average market price on the last
business day of the month as of the end of which the purchase is
made.
As of the last day of each month during any offering, the
account of each participating employee shall be totaled and the
purchase price determined. When a participating employee shall
have sufficient funds in his account to purchase one or more full
shares as of that date, the employee shall be deemed to have
exercised his option to purchase such share or shares at such
price; his account shall be charged for the amount of the
purchase; and the ownership of such share or shares shall be
appropriately evidenced on the books of the Company. Subsequent
shares covered by the employee's option will be purchased in the
same manner, whenever sufficient funds have again accrued in his
account. Upon the purchase of shares of IPG stock under an
option, the Company shall deliver, or cause to be delivered,
promptly to the employee, a statement reflecting the status of
his account.
Payroll deductions may be made under each offering to the
extent authorized by the employee, subject to the maximum
limitation imposed for such offering. A separate employee
account will be maintained with respect to each offering.
A participating employee may not purchase a share under any
offering beyond 12 months from the effective date thereof. Any
balance remaining in an employee's payroll deduction account at
the end of a Purchase Period will be carried forward into the
employee's payroll deduction account for the following Purchase
Period under the Plan or, upon the termination of the Plan, into
the employee's payroll deduction account for the first Purchase
Period under any successor plan if a successor plan is then in
effect. In no event will the balance carried forward be equal to
or greater than the purchase price on the last day of the last
month of the Purchase Period. Any balance remaining in a payroll
deduction account at the termination of the Plan shall be
refunded automatically to the employee in accordance with Section
18 unless a successor plan becomes effective immediately
following the termination of the Plan.
PAGE
9. ISSUANCE OF CERTIFICATES: The Company shall issue
certificates to participating employees upon request.
10. REGISTRATION OF CERTIFICATES: Certificates may be
registered only in the name of the employee, or, if he so
indicates on his Payroll Deduction Authorization form, in his
name jointly with a member of his family, with right of
survivorship. An employee who is a resident of a jurisdiction
which does not recognize such a joint tenancy may have
certificates registered in his name as tenant in common with a
member of his family, without right of survivorship.
11. DEFINITIONS: The phrase "average market price" means
the average of the high and low prices of IPG stock on the New
York Stock Exchange on a given day or, if no sales of IPG stock
were made on that day, the average of the high and low prices of
IPG stock on the next preceding day on which sales were made on
said Exchange.
"Compensation" means only basic compensation, including any
employer contribution to a profit-sharing or stock bonus plan
(including the Interpublic Savings Plan) or to any other employee
benefit plan to the extent that such employer contribution
represents an amount that would have been paid to the employee in
cash, as basic compensation, but for the employee's election
pursuant to a qualified cash or deferred arrangement under
Section 401(k) of the Internal Revenue Code (an "elective cash or
deferred contribution") or pursuant to a cafeteria plan within
the meaning of Section 125 of the Internal Revenue Code (a
"salary reduction contribution"), and excluding overtime,
bonuses, cost-of-living allowances, deferred compensation awards
(apart from any elective cash or deferred contribution), or any
other extra payment of any kind (apart from any salary reduction
contribution). Solely for purposes of this Plan, "compensation"
consisting of an elective cash or deferred contribution or a
salary reduction contribution shall be deemed to be received by
the employee on the date on which the contribution would have
been paid to the employee but for the employee's election.
"Date of Offering" shall be the first working day (as
defined below) during the Purchase Period specified for any
offering made under this Plan.
The term "subsidiary" means all subsidiaries of the
Corporation, whether presently a subsidiary or hereafter becoming
a subsidiary, all within the meaning of Section 424(f) of the
Internal Revenue Code and regulations promulgated thereunder.
PAGE
"Working day" means a day other than a Saturday, Sunday or
scheduled IPG holiday.
12. RIGHTS AS A STOCKHOLDER: None of the rights or
privileges of a stockholder of the Corporation shall exist with
respect to shares purchased under this Plan unless and until such
shares shall have been appropriately evidenced on the books of
the Corporation.
13. RIGHTS ON RETIREMENT, DEATH OR TERMINATION OF
EMPLOYMENT: In the event of a participating employee's
retirement, death, or termination of employment, no payroll
deduction shall be taken from any pay due and owing to him at
such time and the balance in his account shall be paid to him or,
in the event of his death, to his estate.
14. RIGHTS NOT TRANSFERABLE: Rights under this Plan are
not transferable by a participating employee other than by will
or laws of descent and distribution, and are exercisable during
his lifetime only by him.
15. APPLICATION OF FUNDS: All funds received or held by
the Corporation under this Plan may be used for any corporate
purpose.
16. ADJUSTMENT IN CASE OF CHANGES AFFECTING IPG STOCK: In
the event of a subdivision of the outstanding shares, or the
payment of a stock dividend, the number of shares reserved under
this Plan, including shares covered by outstanding grants to
participating employees, shall be increased proportionately, and
the purchase price for each participant at such time reduced
proportionately, and such other adjustment shall be made as may
be deemed equitable by the Board of Directors. In the event of
any other change affecting IPG stock, such adjustment shall be
made as may be deemed equitable by the Board of Directors to give
proper effect to such event.
17. AMENDMENT OF THE PLAN: The Board of Directors may at
any time, or from time to time, amend this Plan in any respect,
except that, without the approval of the stockholders of the
Corporation, no amendment shall be made (i) increasing or
decreasing the number of shares reserved under this Plan (other
than as provided in Section 16) or (ii) decreasing the purchase
price per share (other than as provided in Section 16).
18. TERMINATION OF THE PLAN: This Plan and all rights of
employees under any offering hereunder shall terminate:
(a) on the day that participating employees become
entitled to purchase a number of shares equal to or greater
than the number of shares remaining available for purchase.
PAGE
If the number of shares so purchasable is greater than the
shares remaining available, the available shares shall be
allocated by the Committee among such participating
employees in such manner (consistent with the requirements
of Section 423(b)(4) and (5) of the Internal Revenue Code
and the regulations thereunder) as it deems fair; or
(b) at any time, at the discretion of the Board of
Directors.
No offering hereunder shall be made, the Purchase Period under
which shall extend beyond June 30, 2005. Upon termination of
this Plan, all amounts in the accounts of participating employees
shall be promptly refunded unless those amounts are carried
forward, in accordance with the final paragraph of Section 8,
into accounts established under a successor plan.
19. GOVERNMENTAL REGULATIONS: The Corporation's obligation
to sell and deliver IPG stock under this Plan is subject to the
approval of any governmental authority required in connection
with the authorization, issuance or sale of such stock.
THE INTERPUBLIC GROUP OF COMPANIES, INC.
Management Incentive Compensation Plan
1. PURPOSE.
The purpose of the Management Incentive Compensation Plan is
to promote the success of The Interpublic Group of Companies,
Inc. (the "CORPORATION"), by providing incentive compensation, in
addition to salaries, to officers and key employees in executive,
managerial, and other important positions, who can have a
substantial impact on the Corporation's success.
The Plan is designed to promote the success of the
Corporation by improving the ability of the Corporation and its
subsidiaries operating in the United States to attract and retain
key employees and by orienting the efforts of key employees
toward improvements in corporate profitability.
2. ADMINISTRATION.
The Plan will be administered by a committee (the
"COMMITTEE") which shall be the Compensation Committee of the
Board of Directors or such other of its committees as the Board
of Directors shall designate. The Committee will have full
responsibility for administering and interpreting the provisions
of the Plan in all areas except those specifically identified
hereafter as reserved by the Board of Directors. Action relating
specifically to one or more members of the Board of Directors
shall require the approval of at least a majority of those
members of the Committee who are not eligible to receive awards
under the Plan.
3. INCENTIVE FUND DETERMINATION.
Incentive compensation awards may be made in the sole
discretion of the Committee except, however, that the fund
available for such awards with respect to any one 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 Corporation 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 Corporation in the calendar year immediately preceding the
year with respect to which the awards are made (the "PRECEDING
YEAR").
PAGE
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 award will be made unless the award is approved by the
Committee in its sole discretion.
4. ELIGIBILITY.
Officers and key employees of the Corporation and its
subsidiaries operating in the United States, including directors
who are also employees, in executive, managerial and other
important positions, may be selected to be eligible to receive
incentive awards under the Plan. Eligibility will be determined
by the Committee after receiving and giving consideration to
recommendations from the chief executive officer of the
Corporation. Eligibility will be determined as soon as possible
and preferably prior to the start of each calendar year by the
Committee. No person shall be eligible to receive an incentive
award with respect to any year unless he was in the employ of the
Corporation or one of its affiliates on the first business day of
the year with respect to which the award is made.
5. ALLOCATION OF INCENTIVE AMOUNTS.
In allocating the total funds, one or more of the following
factors will be considered:
(a) Achievement of the annual worldwide Business Plan
adopted by the Corporation.
(b) Contribution to Client's Business
(1) Improvement in the quality of work produced.
(2) Improvement in efficiency.
(c) Financial Factors
(1) Operating margin.
(2) Level of or growth in revenue.
(3) Level of or growth in operating profit.
(d) Individual Performance
6. MAXIMUM INDIVIDUAL INCENTIVE AWARDS.
The maximum individual award permitted under the Plan, with
respect to any year, is $1,250,000.
PAGE
7. FORM AND TIMING OF INCENTIVE AWARDS.
The Committee will be responsible for determining the form
and timing of incentive awards under the Plan. In its
discretion, the Committee may make any award wholly in cash,
wholly in shares of Common Stock of the Corporation, or partly in
cash and partly in shares of Common Stock of the Corporation. As
determined by the Board of Directors from time to time, at or
prior to the time of an award, shares of Common Stock to be
awarded under the provisions of the Plan may be issued by the
Corporation from its authorized but unissued shares of such stock
or may be delivered from shares of stock held in the treasury.
For purposes of Section 3 of the Plan, any shares so awarded
shall be valued by using the average closing price of shares of
Common Stock of the Corporation on the New York Stock Exchange on
the last ten trading days of the calendar month preceding the
month in which such shares are awarded.
Individual management incentive compensation awards will 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. Awards will normally be made as
soon as possible after the end of each calendar year.
8. SHARES ISSUABLE UNDER THE PLAN.
The number of shares of Common Stock authorized for
distribution under the Plan is 600,000. In the event of a
reorganization, recapitalization, stock split, stock dividend,
combination of shares, merger, consolidation, rights offering, or
any other change in the corporate structure or shares of the
Corporation, the Committee is empowered to make such adjustment,
if any, as it may deem appropriate in the number and kind of
shares authorized for distribution.
9. TERMINATION AND AMENDMENT.
The Board of Directors shall have the power to suspend or
terminate the Plan at any time, or to amend the Plan from time to
time as may be appropriate and in the best interests of the
Corporation, but shall not without the approval of Stockholders
amend the Plan so as to (i) materially increase the benefits
accruing to participants, (ii) materially increase the number of
securities which may be issued under the Plan or (iii) materially
modify the requirements as to eligibility for participation in
the Plan.