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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, 1996
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:
90,578,140 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, 1996 and
December 31, 1995 3-4
Consolidated Income Statement
Three months ended June 30, 1996
and 1995 5
Consolidated Income Statement
Six months ended June 30, 1996
and 1995 6
Consolidated Statement of Cash Flows
Six months ended June 30, 1996
and 1995 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,
1996 1995
Current Assets:
Cash and cash equivalents (includes
certificates of deposit: 1996-$92,860;
1995-$114,182) $ 415,898 $ 418,448
Marketable securities, at cost which
approximates market 41,502 38,926
Receivables (less allowance for doubtful
accounts: 1996-$24,246; 1995-$21,941) 2,467,895 2,320,248
Expenditures billable to clients 142,913 108,165
Prepaid expenses and other current assets 91,056 88,611
Total current assets 3,159,264 2,974,398
Other Assets:
Investment in unconsolidated affiliates 96,498 119,473
Deferred taxes on income 101,653 103,497
Other investments and miscellaneous assets 172,683 144,963
Total other assets 370,834 367,933
Fixed Assets, at cost:
Land and buildings 75,279 76,813
Furniture and equipment 386,487 360,653
461,766 437,466
Less accumulated depreciation 255,199 240,274
206,567 197,192
Unamortized leasehold improvements 83,273 82,075
Total fixed assets 289,840 279,267
Intangible Assets (less accumulated
amortization: 1996-$176,039;
1995-$157,673) 690,749 638,168
Total assets $4,510,687 $4,259,766
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,
1996 1995
Current Liabilities:
Payable to banks $ 178,082 $ 162,524
Accounts payable 2,455,293 2,291,208
Accrued expenses 219,346 256,408
Accrued income taxes 148,023 116,557
Total current liabilities 3,000,744 2,826,697
Noncurrent Liabilities:
Long-term debt 192,911 170,262
Convertible subordinated debentures 114,651 113,235
Deferred compensation and reserve
for termination liabilities 229,082 235,325
Accrued postretirement benefits 47,680 46,461
Other noncurrent liabilities 95,621 102,909
Minority interests in consolidated
subsidiaries 18,946 15,171
Total noncurrent liabilities 698,891 683,363
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:
1996 - 90,393,121
1995 - 89,630,568 9,039 8,963
Additional paid-in capital 457,440 446,931
Retained earnings 782,807 704,946
Adjustment for minimum pension
liability (9,088) (9,088)
Cumulative translation adjustments (99,822) (93,436)
1,140,376 1,058,316
Less:
Treasury stock, at cost:
1996 - 9,086,595 shares
1995 - 10,002,567 shares 283,519 268,946
Unamortized expense of restricted
stock grants 45,805 39,664
Total stockholders' equity 811,052 749,706
Total liabilities and stockholders'
equity $4,510,687 $4,259,766
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)
1996 1995
Revenue $ 631,585 $ 534,427
Other income 43,760 22,727
Gross income 675,345 557,154
Costs and expenses:
Operating expenses 521,568 435,588
Interest 9,665 9,803
Total costs and expenses 531,233 445,391
Income before provision for income taxes 144,112 111,763
Provision for income taxes:
United States - federal 25,971 16,960
- state and local 5,714 7,058
Foreign 29,563 23,372
Total provision for income taxes 61,248 47,390
Income of consolidated companies 82,864 64,373
Loss applicable to minority interests (3,017) (2,083)
Equity in net income of unconsolidated
affiliates 3,081 1,478
Net income $ 82,928 $ 63,768
Weighted average number of common shares 79,772,757 78,106,874
Earnings per common and common equivalent
share $ 1.04 $ .82
Cash dividends per common share $ .170 $ .155
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)
1996 1995
Revenue $ 1,123,793 $ 981,863
Other income 57,711 35,711
Gross income 1,181,504 1,017,574
Costs and expenses:
Operating expenses 987,677 861,180
Interest 19,190 17,730
Total costs and expenses 1,006,867 878,910
Income before provision for income taxes 174,637 138,664
Provision for income taxes:
United States - federal 34,389 22,901
- state and local 7,798 9,618
Foreign 32,187 26,438
Total provision for income taxes 74,374 58,957
Income of consolidated companies 100,263 79,707
Loss applicable to minority interests (4,845) (2,871)
Equity in net income of unconsolidated
affiliates 5,341 2,108
Net income $ 100,759 $ 78,944
Weighted average number of common shares 79,537,347 77,836,723
Earnings per common and common equivalent
share $ 1.27 $ 1.02
Cash dividends per common share $ .325 $ .295
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: 1996 1995
Net income $100,759 $ 78,944
Adjustments to reconcile net income to cash
provided by/(used in) operating activities:
Depreciation and amortization of fixed assets 28,311 26,813
Amortization of intangible assets 13,366 12,960
Amortization of restricted stock awards 7,188 6,788
Equity in net income of unconsolidated
affiliates (5,341) (2,108)
Income applicable to minority interests 4,845 2,871
Translation losses 1,100 1,733
Net gain from sale of investments (8,100) -
Other (2,827) (5,999)
Changes in assets and liabilities, net of acquisitions:
Receivables (95,395) (11,061)
Expenditures billable to clients (31,598) (34,083)
Prepaid expenses and other assets (11,067) (17,322)
Accounts payable and accrued expenses 68,929 (126,262)
Accrued income taxes 25,737 19,064
Deferred income taxes (5,856) (3,133)
Deferred compensation and reserve for termination
allowances (4,347) 1,369
Net cash provided by/(used in) operating
activities 85,704 (49,426)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions (41,603) (31,230)
Proceeds from sale of investments 37,578 -
Capital expenditures (33,494) (29,109)
Net purchases of marketable securities (4,844) (8,080)
Other investments and miscellaneous assets (19,893) (2,583)
Investments in unconsolidated affiliates (6,278) (9,315)
Net cash used in investing activities (68,534) (80,317)
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in short-term borrowings 33,061 8,193
Proceeds from long-term debt 25,000 40,000
Payments of long-term debt (13,618) (13,637)
Treasury stock acquired (41,433) (28,089)
Issuance of common stock 10,763 23,035
Cash dividends (24,995) (22,430)
Net cash (used in)/provided by financing
activities (11,222) 7,072
Effect of exchange rates on cash and cash
equivalents (8,498) 13,343
Decrease in cash and cash equivalents (2,550) (109,328)
Cash and cash equivalents at beginning of year 418,448 413,709
Cash and cash equivalents at end of period $415,898 $304,381
See accompanying notes to consolidated financial statements.
7
PAGE
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, 1996, the consolidated statements of income for the three
months and six months ended June 30, 1996 and 1995 and the
consolidated statement of cash flows for the six months ended June 30,
1996 and 1995, 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, 1996 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,
1995 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
$37.9 million and $40.3 million in the first six months of 1996 and
1995, respectively. Interest payments during the first six months of
1996 were approximately $9.9 million. Interest payments during the
comparable period of 1995 were approximately $12.4 million.
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 1996 1995
Net income $ 82,928 $ 63,768
Add:
Dividends paid net of related income tax
applicable to restricted stock 95 113
Net income, as adjusted $ 83,023 $ 63,881
Weighted average number of common shares
outstanding 77,270,126 75,745,842
Weighted average number of incremental shares
in connection with restricted stock
and assumed exercise of stock options 2,502,631 2,361,032
Total 79,772,757 78,106,874
Earnings per common and common equivalent
share $ 1.04 $ .82
Three Months Ended June 30
Fully Diluted 1996 1995
Net income $ 82,928 $ 63,768
Add:
After tax interest savings on assumed
conversion of subordinated debentures 1,602 1,527
Dividends paid net of related income tax
applicable to restricted stock 98 114
Net income, as adjusted $ 84,628 $ 65,409
Weighted average number of common shares
outstanding 77,270,126 75,745,842
Weighted average number of incremental shares
in connection with restricted stock
and assumed exercise of stock options 2,534,103 2,397,631
Assumed conversion of subordinated
debentures 3,002,130 3,002,130
Total 82,806,359 81,145,603
Earnings per common and common equivalent
share $ 1.02 $ .81
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 1996 1995
Net income before effect of accounting
change $ 100,759 $ 78,944
Add:
Dividends paid net of related income tax
applicable to restricted stock 175 205
Net income, as adjusted $ 100,934 $ 79,149
Weighted average number of common shares
outstanding 77,132,583 75,520,732
Weighted average number of incremental shares
in connection with restricted stock
and assumed exercise of stock options 2,404,764 2,315,991
Total 79,537,347 77,836,723
Earnings per common and common equivalent
share $ 1.27 $ 1.02
Six Months Ended June 30
Fully Diluted 1996 1995
Net income before effect of accounting
change $ 100,759 $ 78,944
Add:
After tax interest savings on assumed
conversion of subordinated debentures 3,165 3,054
Dividends paid net of related income tax
applicable to restricted stock 192 221
Net income, as adjusted $ 104,116 $ 82,219
Weighted average number of common shares
outstanding 77,132,583 75,520,732
Weighted average number of incremental shares
in connection with restricted stock
and assumed exercise of stock options 2,604,223 2,533,231
Assumed conversion of subordinated
debentures 3,002,130 3,002,130
Total 82,738,936 81,056,093
Earnings per common and common equivalent
share $ 1.26 $ 1.01
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, 1996 was $158.5 million, an increase of $10.8
million from December 31, 1995. The ratio of current assets to current
liabilities remained relatively unchanged from December 31, 1995 at
approximately 1.1 to 1.
In June 1996, the Company issued 1,824,609 shares (or approximately $84.8
million) of the Company's common stock in exchange for all the issued and
outstanding stock of DraftDirect Worldwide, Inc. The acquisition was
accounted for as a pooling of interest; however, the Company's financial
statements were not restated for the prior periods as the Company's
consolidated results would not have changed significantly.
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 1996, the Company acquired 933,833 shares of its own stock for
approximately $41.4 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, 1996 Compared to Three Months Ended June 30,
1995
Total revenue for the three months ended June 30, 1996 increased $97.2
million, or 18.2%, to $631.6 million compared to the same period in 1995.
Domestic revenue increased $78.8 million or 42.8% from 1995 levels.
Foreign revenue increased $18.4 million or 5.2% during the second quarter
of 1996 compared to 1995. Other income increased by $21.0 million during
the second quarter of 1996 compared to the same period in 1995. The
increase in other income is primarily from the proceeds resulting from the
sale of a portion of the Company's interest in the CKS Group, Inc. The net
gain was approximately $8.1 million or $.10 per share.
Operating expenses increased $86.0 million or 19.7% during the three months
ended June 30, 1996 compared to the same period in 1995. Interest expense
decreased 1.4% as compared to the same period in 1995.
Pretax income increased $32.3 million or 28.9% during the three months
ended June 30, 1996 compared to the same period in 1995.
The increase in total revenue, operating expenses, and pretax income is
primarily due to acquired companies' results of operations and
contributions from new business gains.
Net losses from exchange and translation of foreign currencies for the
three months ended June 30, 1996 were approximately $.5 million versus $1.1
million for the same period in 1995. The decrease in the quarter ended June
30, 1996 is primarily due to decreased translation losses in Brazil.
The effective tax rate for the three months ended June 30, 1996 was 42.5%,
as compared to 42.4% in 1995.
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, 1996 Compared to Six Months Ended June 30, 1995
Total revenue for the six months ended June 30, 1996 increased $141.9
million, or 14.5%, to $1,123.8 million compared to the same period in 1995.
Domestic revenue increased $108.6 million or 31.1% from 1995 levels.
Foreign revenue increased $33.4 million or 5.3% during the first six months
of 1996 compared to 1995. Other income increased $22.0 million in the
first six months of 1996 compared to the same period in 1995. The increase
in other income is primarily from the proceeds resulting from the sale of a
portion of the Company's interest in the CKS Group, Inc. The net gain was
approximately $8.1 million or $.10 per share.
Operating expenses increased $126.5 million or 14.7% during the six months
ended June 30, 1996 compared to the same period in 1995. Interest expense
increased 8.2% during the six months ended June 30, 1996 as compared to the
same six month period in 1995.
Pretax income increased $36.0 million or 25.9% during the six months ended
June 30, 1996 compared to the same period in 1995.
12
PAGE
The increase in total revenue, operating expenses, and pretax income is
primarily due to acquired companies' results of operations and
contributions from new business gains.
Net losses from exchange and translation of foreign currencies for the six
months ended June 30, 1996 were approximately $1.0 million versus $1.8
million for the same period in 1995. The decrease for the six months ended
June 30, 1996 is primarily due to decreased translation losses in Brazil.
The effective tax rate for the six months ended June 30, 1996 was 42.6%, as
compared to 42.5% in 1995.
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 20, 1996.
(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 solicitationin 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 65,117,053 218,973 0
Frank J. Borelli 65,126,367 209,659 0
John J. Dooner, Jr. 65,115,663 220,363 0
Philip H. Geier, Jr. 65,120,648 215,378 0
Frank B. Lowe 65,112,472 223,554 0
Leif H. Olsen 65,106,670 229,356 0
Martin F. Puris 65,118,330 217,696 0
Allen Questrom 65,111,049 224,977 0
J. Phillip Samper 65,118,410 217,616 0
Joseph J. Sisco 65,070,282 265,744 0
-- Proposal to approve the Company's 1996 Stock Incentive
Plan.
Broker
For Against Abstain Nonvotes
36,789,809 21,330,100 642,460 6,573,657
-- Proposal to approve Amendments to the Company's Outside
Directors' Stock Option.
Broker
For Against Abstain Nonvotes
47,958,564 10,153,905 649,900 6,573,657
14
-- Proposal to approve confirmation of independent
accountants.
Broker
For Against Abstain Nonvotes
65,198,989 61,669 75,368 0
-- Stockholder proposed resolution regarding implementation
of the Mac Bride Principles with respect to the
Company's subsidiary in Northern Ireland.
Broker
For Against Abstain Nonvotes
6,406,527 46,800,233 5,171,991 6,957,275
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 10(a) 1996 Stock Incentive Plan.
Exhibit 10(b) The Interpublic Outside Directors' Stock
Incentive Plan (formerly named The
Interpublic Outside Directors' Stock
Option Plan).
Exhibit 10(c) Credit Agreement, dated as of June 25,
1996, between the Interpublic Group of
Comapnies, Inc. ("Interpublic") and
Chemical Bank.
Exhibit 10(d) Promissory Note, dated June 25, 1996 and
executed by the Interpublic.
Exhibit 10(e) Money Market Note, dated June 25, 1996
and executed by Interpublic.
Exhibit 10(f) Promissory Note, dated June 25, 1996 and
executed by DraftDirect Worldwide, Inc.
Exhibit 10(g) Guaranty, dated June 25, 1996 and
executed by Interpublic.
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, 1996.
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, 1996 By /S/ Eugene P. Beard
Eugene P. Beard
Vice Chairman -
Finance and Operations
Date: August 14, 1996 By /S/ Joseph M. Studley
Joseph M. Studley
Vice President & Controller -
Chief Accounting Officer
16
PAGE
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
INDEX TO EXHIBITS
Exhibit No. Description
Exhibit 10(a) 1996 Stock Incentive Plan.
Exhibit 10(b) The Interpublic Outside Directors' Stock
Incentive Plan (formerly named The
Interpublic Outside Directors' Stock
Option Plan).
Exhibit 10(c) Credit Agreement, dated as of June 25,
1996, between the Interpublic Group of
Companies, Inc. ("Interpublic") and
Chemical Bank.
Exhibit 10(d) Promissory Note, dated June 25, 1996 and
executed by the Interpublic.
Exhibit 10(e) Money Market Note, dated June 25, 1996
and executed by Interpublic.
Exhibit 10(f) Promissory Note, dated June 25, 1996 and
executed by DraftDirect Worldwide, Inc.
Exhibit 10(g) Guaranty, dated June 25, 1996 and
executed by Interpublic.
Exhibit 11 Computation of Earnings Per Share.
Exhibit 27 Financial Data Schedule.
17
Exhibit 10(a)
THE INTERPUBLIC GROUP OF COMPANIES, INC.
1996 STOCK INCENTIVE PLAN
I. ESTABLISHMENT OF THE PLAN.
The Interpublic Group of Companies, Inc. (hereinafter
called the "Corporation") hereby establishes The Interpublic
Group of Companies, Inc. 1996 Stock Incentive Plan
(hereinafter called the "Plan"), subject to the terms and
conditions hereinafter stated.
II. PURPOSES OF THE PLAN.
The purposes of the Plan are:
(A) To encourage stock ownership by key employees of
the Corporation and its Subsidiaries so that they will have
a proprietary interest in the Corporation;
(B) To provide an incentive for such employees to
expand and improve the growth and prosperity of the
Corporation and its Subsidiaries; and
(C) To assist the Corporation and its Subsidiaries in
attracting and retaining key employees.
III. DEFINITIONS.
Unless the context clearly indicates otherwise, the
following terms, when used in the Plan, shall have the
meanings set forth in this Article III. Wherever used in
the Plan, words in the masculine gender shall be deemed to
refer to females as well as to males; words in the singular
number shall be deemed to refer also to the plural number;
and references to a statute or statutory provision shall be
construed as if they referred also to that provision (or to
a successor provision of similar import) as currently in
effect, as amended or as reenacted.
PAGE
(a) "Award" means an Option or one or more Restricted
Shares granted under the Plan. Unless the context clearly
indicates otherwise, the term "Award" shall include both
Options and Restricted Shares.
(b) "Board" means the Board of Directors of the
Corporation.
(c) "Change of Control" means the occurrence of any of
the following events:
(i) Any person (within the meaning of Sections
13(d) and 14(d) of the Securities Exchange Act of 1934
(the "1934 Act")), other than the Corporation or any of
its Subsidiaries, becomes the beneficial owner (within
the meaning of Rule 13d-3 under the 1934 Act) of thirty
percent (30%) or more of the combined voting power of
the Corporation's then outstanding voting securities;
or
(ii) A tender offer or exchange offer (other than
an offer by the Corporation), pursuant to which shares
of the Corporation's Common Stock were purchased,
expires; or
(iii) The stockholders of the Corporation approve
an agreement to merge or consolidate with another
corporation and the surviving corporation is neither
the Corporation nor a corporation that was, prior to
the merger or consolidation, a subsidiary of the
Corporation; or
(iv) The stockholders approve an agreement
(including a plan of liquidation) to sell or otherwise
to dispose of all or substantially all of the
Corporation's assets; or
(v) During any period of two consecutive years,
individuals who, at the beginning of such period,
constituted the Board of Directors of the Corporation
cease for any reason to constitute at least a majority
thereof, unless the election or the nomination for the
election by the Corporation's stockholders of each new
PAGE
director was approved by a vote of at least two-thirds
of the directors then still in office who were
directors at the beginning of the period.
(d) "Committee" means the committee established by the
Board pursuant to Article IV hereof.
(e) "Common Stock" means shares of the Corporation's
$.10 par value common stock.
(f) "Corporation" means The Interpublic Group of
Companies, Inc.
(g) "Disability" means a condition that, in the
judgment of the Committee, has rendered a Grantee completely
and presumably permanently unable to perform any and every
duty of his or her regular occupation.
(h) "Employee" means any common-law employee of the
Corporation or Subsidiary, including an employee who is a
director or officer.
(i) "Grantee" means an individual to whom an Award is
granted under the Plan.
(j) "Option" means a right granted to purchase Common
Stock under the Plan.
(k) "Plan" means The Interpublic Group of Companies,
Inc. 1996 Stock Incentive Plan, as set forth herein and as
amended from time to time.
(l) "Restricted Shares" means shares of Common Stock
granted pursuant to Article IX hereof and subject to the
restrictions and other terms and conditions set forth in the
Plan and in the instrument evidencing the grant of the
Restricted Shares.
(m) "Restriction Period" means a period beginning on
the date on which Restricted Shares are granted and ending
at the expiration of (i) four years from that date or (ii)
any other date determined by the Committee in its discretion
PAGE
that occurs no sooner than one year from the date on which
the Restricted Shares are granted. The Committee may
exercise its discretion pursuant to clause (ii) of the
preceding sentence from time to time, either before or after
the Restricted Shares are granted, and may exercise its
discretion with respect to one or more Grantees but not with
respect to others and with respect to certain Restricted
Shares held by a Grantee but not with respect to others;
provided, that after the Restricted Shares have been
granted, the Committee may not defer the expiration of the
Restriction Period applicable to such Restricted Shares.
(n) "Retirement" means retirement from the Corporation
or a Subsidiary pursuant to the provisions of the
Interpublic Retirement Account Plan (or, if applicable, the
provisions of a pension plan of a Subsidiary), as amended
from time to time.
(o) "Subsidiary" means a subsidiary of the Corporation
that meets the definition of a "subsidiary corporation" in
Section 424(f) of the Internal Revenue Code of 1986, as
amended.
IV. ADMINISTRATION OF THE PLAN.
The Plan shall be administered by a committee (the
"Committee") of at least two directors each of whom is a
"disinterested person" within the meaning of Rule 16b-3
under the Securities Exchange Act of 1934, as amended.
Members of the Committee shall be appointed by and shall
serve at the pleasure of the Board. No member of the
Committee shall be eligible to receive an Award under the
Plan.
The Committee shall have and may exercise all of the
powers granted to it by the provisions of the Plan. Subject
to the express provisions and limitations of the Plan, the
Committee may adopt such rules, regulations, and procedures
as it deems advisable for the conduct of its affairs, and
may appoint one of its members to be its chairman and any
person, whether or not a member, to be its secretary or
agent. The Committee shall have full authority to direct
the proper officers of the Corporation to issue or transfer
PAGE
shares of the Corporation's Common Stock pursuant to the
exercise of an Option granted under the Plan or in
connection with the grant of Restricted Shares under the
Plan.
The Committee shall act by vote or written consent of a
majority of its members. The decisions of the Committee
shall be final and binding unless otherwise determined by
the Board. Each member of the Committee and each member of
the Board shall be without liability, to the fullest extent
permitted by law, for any action taken or determination made
in good faith in connection with the Plan.
V. CAPITAL STOCK SUBJECT TO AWARDS.
A. Shares Available Under the Plan.
The aggregate number of shares of Common Stock that may
be issued pursuant to Awards granted under the Plan shall
not exceed 25,000,000, which number of shares is subject to
adjustment as hereinafter provided in Article XI. Shares of
Common Stock issued pursuant to Awards shall be provided
from shares in the Corporation's treasury or from shares
authorized but unissued. If an Option as to any shares is
surrendered before exercise, or expires or terminates for
any reason without having been exercised in full, or for any
other reason ceases to be exercisable, the number of
unpurchased shares covered thereby shall become available
for the granting of Awards under the Plan (unless the Plan
has been terminated) within the aggregate maximum stated
above. Similarly, if any shares of Common Stock are
returned to the Corporation pursuant to Paragraph B of
Article IX or pursuant to restrictions set forth in the
instrument evidencing the grant of Restricted Shares, such
shares shall become available for the granting of Awards
under the Plan (unless the Plan has been terminated) within
the aggregate maximum stated above.
PAGE
B. Limitations On Awards.
During the term of the Plan, Awards of Restricted
Shares and Awards of Options to any Grantee shall not exceed
in the aggregate 3,750,000 shares of Common Stock.
During the term of the Plan, no more than forty percent
(40%) of the shares of Common Stock reserved for issuance
under Paragraph A of this Section V shall be available for
Awards of Restricted Shares.
VI. ELIGIBILITY.
The individuals eligible to receive Awards shall be
those Employees who are not members of the Committee and who
are determined by the Committee to be key employees of the
Corporation and its Subsidiaries.
VII. DESIGNATION OF GRANTEES.
Subject to the provisions of the Plan, the Committee
shall determine from time to time which of those eligible
Employees will be granted Awards under the Plan, how many
shares of Common Stock may be purchased under each Option,
and how many Restricted Shares may be granted pursuant to
each grant of Restricted Shares. In making such
determinations, the Committee shall take into account the
duties and responsibilities of each Employee, his or her
present and potential contributions to the growth and
success of the Corporation or of a Subsidiary, and such
other factors as the Committee shall deem consistent with
the purposes of the Plan. The Committee shall not be
precluded from granting an Award to any eligible Employee
solely because such Employee has previously received an
Award under the Plan. With respect to grants of Options to
acquire 10,000 or fewer shares of Common Stock of the
Corporation, and with respect to awards of not more than
PAGE
3,000 Restricted Shares, the Corporation's Management Human
Resources Committee may exercise the powers of the Committee
set forth in this Article, in the first paragraph of
Paragraph D of Article VIII, and in the first sentence only
of Section (m) of Article III, provided that no Option may
be granted or Restricted Shares awarded by the Management
Human Resources Committee to an individual who is subject to
Section 16 of the Securities Exchange Act of 1934, as
amended.
VIII. TERMS OF OPTIONS.
Each Option granted under the Plan shall state that it
shall not be treated as an incentive stock option for
purposes of Section 422 of the Internal Revenue Code of
1986, as amended from time to time, or any successor
provision, and shall be subject to the following terms and
conditions:
A. Number of Shares and Option Price.
Each Option shall state the total number of shares of
Common Stock to which it pertains. The purchase price for
shares subject to the Option shall be not less than one
hundred percent (100%) of the fair market value of the
Common Stock of the Corporation at the time such Option is
granted.
B. Duration of Option.
No Option shall be exercisable after the expiration of
ten years from the date on which it is granted, or of such
shorter term as the Committee may establish for any or all
shares subject to such Option. Except as provided in this
Paragraph B, an Option shall terminate on the date on which
the Grantee ceases to be employed by the Corporation or a
Subsidiary.
If a Grantee ceases to be employed by the Corporation
or a Subsidiary owing to his or her Disability or
Retirement, he or she may, at any time within three years
after his or her employment ceases, exercise any Option to
PAGE
the extent that he or she was entitled to exercise it on the
date his or her employment ceased; but in no event shall any
Option be exercisable after the expiration of the term of
the Option established in accordance with the first sentence
of this Paragraph B.
If a Grantee dies while in the employ of the
Corporation or a Subsidiary (or if he or she dies within
three years after he or she has ceased to be employed by the
Corporation or a Subsidiary owing to his or her Disability
or Retirement), and the Grantee has not fully exercised all
of his or her Options at the time of his or her death, his
or her personal representative, or those persons who receive
the Options by bequest or inheritance, shall have the right,
during the one-year period following his or her death, to
exercise such Options. An Option shall be exercisable
during such one-year period only for that number of shares,
if any, that the Grantee could have purchased under such
Option on the date of his or her death. In no event shall
any Option be exercisable after the expiration of the term
of the Option established in accordance with the first
sentence of this Paragraph B.
If a Grantee ceases to be employed by the Corporation
or a Subsidiary owing to his or her Disability or
Retirement, or if a Grantee dies while in the employ of the
Corporation or a Subsidiary, the Committee may provide, on a
case by case basis, for the exercise of all or part of any
Option held by the Grantee, whether or not he or she was
entitled to exercise it on the date that his or her
employment ceased or death occurred; provided, however, that
no such determination shall permit an Option to be exercised
within one year following its grant.
C. Nonassignability.
Options shall not be transferable other than by will or
by the laws of descent and distribution. During a Grantee's
lifetime, Options shall be exercisable only by such Grantee.
PAGE
D. Limitations on Exercise of Options.
An Option may not be exercised in whole or in part
during the twelve-month period commencing with the date on
which it was granted; thereafter it shall become exercisable
on such schedule as is determined by the Committee at the
time of the grant or as otherwise provided by the Plan.
At the time an Option is granted or at any time
thereafter, the Committee may stipulate that, if a Change of
Control occurs, the limitations set forth above in this
Paragraph D shall lapse with respect to such Option, and
that such Option shall be immediately exercisable.
To the extent that any portion of an Option has become
exercisable, it may thereafter be exercised at any time
prior to the expiration or earlier termination of the
Option. Notwithstanding the foregoing, no Option shall be
exercisable by a Grantee at a time when the Grantee is not
employed by the Corporation or by a Subsidiary except to the
extent permitted by Paragraph B of this Article.
E. Manner of Exercise.
Subject to the provisions of Paragraph D of this
Article, an Option may be exercised at one time or from time
to time, except that each partial exercise of an Option
shall be for 50 shares or a multiple thereof, or, if fewer
than 50 shares remain outstanding under the Option, for all
the remaining shares. The procedures for exercise shall be
set forth in the written Option certificate provided for in
Paragraph I of this Article.
F. Payment for Shares.
Payment in full of the purchase price for the shares
purchased pursuant to the exercise of any Option shall be
made in cash upon exercise of the Option. All shares sold
under the Plan pursuant to the exercise of an Option shall
be fully paid and nonassessable.
PAGE
G. Payment of Withholding Taxes.
Payment in full of any federal, state, or local taxes
of any kind required by law to be withheld with respect to
the exercise of the Option shall be made to the Corporation
in cash upon exercise of the Option. A Grantee may
irrevocably elect to have any withholding tax obligation
satisfied by (i) having the Corporation withhold shares
otherwise deliverable to the Grantee with respect to the
exercise of the Option, or (ii) delivering to the
Corporation shares received upon the exercise of the Option
or delivering to the Corporation other shares of Common
Stock; provided, that the Committee may, in its sole
discretion, disapprove any such election.
H. Voting and Dividend Rights.
No Grantee of an Option shall have any voting or
dividend rights or any other rights of a stockholder with
respect to any shares of Common Stock covered by an Option
before he or she exercises the Option with respect to such
shares and his or her name is recorded on the Corporation's
stockholder ledger as the holder of record of such shares.
I. Option Certificates.
The proper officers of the Corporation shall execute
and deliver written Option certificates, which shall contain
such provisions as are expressly provided herein and such
additional provisions as the Committee in each instance
shall deem appropriate and not inconsistent with any of the
express provisions of the Plan.
IX. RESTRICTED SHARES.
Each Restricted Share granted under the Plan shall be
subject to the following terms and conditions, and to such
additional terms and conditions as the Committee shall deem
appropriate; provided that none of these additional terms
and conditions shall be more favorable to a Grantee than the
terms and conditions set forth herein.
PAGE
A. Rights with Respect to Shares.
A Grantee to whom Restricted Shares have been granted
shall have absolute ownership of such shares, including the
right to vote the same and to receive dividends thereon,
subject, however, to the terms, conditions, and restrictions
described in the Plan and in the instrument evidencing the
grant of the Restricted Shares to such Grantee. The
Grantee's absolute ownership shall become effective only
after he or she has received a certificate or certificates
for the number of shares of Common Stock awarded, or after
he or she has received notification that such certificate or
certificates are being held in custody for him or her.
B. Restrictions.
Until the restrictions set forth in this Paragraph B
shall lapse pursuant to Paragraph C or D of this Article IX,
Restricted Shares shall be subject to the following
conditions:
(i) Restricted Shares shall not be sold, assigned,
transferred, pledged, hypothecated, or otherwise disposed
of; and
(ii) If the Grantee ceases to be an Employee for any
reason, except as provided in Paragraph D of the Article,
any Restricted Shares that had been delivered to, or held in
custody for, the Grantee shall be returned to the
Corporation forthwith, and all the rights of the Grantee
with respect to such shares shall immediately terminate
without any payment of consideration by the Corporation. If
the Grantee's interest in the Restricted Shares shall be
terminated pursuant to this clause (ii), he or she shall
forthwith deliver to the Secretary or any Assistant
Secretary of the Corporation the certificates for such
shares, accompanied by such instrument of transfer as may be
required by the Secretary or any Assistant Secretary of the
Corporation.
PAGE
C. Lapse of Restrictions.
Except as provided below with respect to a Change of
Control and as set forth in Paragraph D hereof, the
restrictions set forth in Paragraph B hereof, shall lapse at
the end of the Restriction Period.
At the time Restricted Shares are granted or at any
time thereafter, the Committee may stipulate that the
restrictions set forth in Paragraph B hereof shall lapse
with respect to such Restricted Shares if a Change of
Control occurs.
D. Termination of Employment.
Any provision of Paragraph B hereof to the contrary
notwithstanding, if a Grantee has been in the continuous
employment of the Corporation or of any Subsidiary for more
than one year from the date on which one or more Restricted
Shares were granted to him or her and if such Grantee shall
die or incur a Disability while so employed, then the
restrictions set forth in Paragraph B shall lapse on the
date of the Grantee's death or Disability with respect to a
fraction of the Restricted Shares awarded to such Grantee.
The numerator of the fraction shall be the number of months
that have elapsed since the Restricted Shares were granted,
and the denominator of the fraction shall be the number of
months in the Restriction Period; provided that in the case
of a fractional month, a period of 15 days or more shall be
treated as a full month, and a period of less than 15 days
shall be disregarded.
Any provision of Paragraph B hereof to the contrary
notwithstanding, if a Grantee has been in the continuous
employment of the Corporation or of any Subsidiary for more
than one year from the date on which one or more Restricted
Shares were granted to him or her, and if the employment of
the Grantee by the Corporation or of any Subsidiary shall
terminate for any reason, then the Management Human
Resources Committee of the Corporation may, but is not under
any obligation to, recommend to the Committee that the
restrictions set forth in Paragraph B should lapse. The
Committee in its sole discretion may provide, on a
case-by-case basis, that the restrictions set forth in
Paragraph B shall lapse.
PAGE
E. Agreement by Grantee Regarding Withholding Taxes.
Each Grantee who receives one or more Restricted Shares
shall agree that, subject to the provisions of Paragraph B
hereof:
(i) No later than the date of the lapse of the
restrictions set forth in Paragraph B hereof (and any
additional restrictions set forth in the instrument
evidencing the grant of the Restricted Shares) he or she
will pay to the Corporation, or make arrangements
satisfactory to the Committee regarding payment of, any
federal, state, or local taxes of any kind required by law
to be withheld with respect to the Restricted Shares, and
(ii) The Corporation and its Subsidiaries shall, to
the extent permitted by law, have the right to deduct from
any payments of any kind otherwise due to the Grantee any
federal, state, or local taxes of any kind required by law
to be withheld with respect to the Restricted Shares.
A Grantee may irrevocably elect to have any withholding
tax obligation satisfied by (a) having the Corporation
withhold shares otherwise deliverable to the Grantee in
connection with the grant of Restricted Shares, or (b)
delivering to the Corporation such Restricted Shares or
delivering to the Corporation other shares of Common Stock;
provided, that the Committee may, in its sole discretion,
disapprove any such election.
F. Tax Assistance Payments.
When the restrictions set forth in Paragraph B hereof,
or in the instrument evidencing the grant of the Restricted
Shares, lapse, the Committee may, in its discretion, direct
the Corporation to make cash payments to assist the Grantee
in satisfying his federal income tax liability with respect
to the Restricted Shares. Such payments may be made only to
those Grantees whose performance the Committee determines to
have been fully satisfactory between the date on which the
PAGE
Restricted Shares were granted and the date on which such
restrictions lapse. The Committee may, in its discretion,
estimate the amount of the federal income tax in accordance
with methods or criteria uniformly applied to Grantees
similarly situated, without regard to the individual
circumstances of a particular Grantee.
G. Election to Recognize Gross Income in Year of Grant.
If a Grantee properly elects, within 30 days of the
date of grant of a Restricted Share, to include in gross
income for federal income tax purposes an amount equal to
the fair market value of the shares of Common Stock awarded
on the date of grant, he or she shall make arrangements
satisfactory to the Committee to pay in the year of such
grant any federal, state, or local taxes required to be
withheld with respect to such shares. If he or she shall
fail to make the payments, the Corporation and its
Subsidiaries shall, to the extent permitted by law, have the
right to deduct from any payments of any kind otherwise due
to the Grantee any federal, state, or local taxes of any
kind required by law to be withheld with respect to such
shares of Common Stock.
H. Restrictive Legends; Certificates May be Held in
Custody.
Certificates evidencing Restricted Shares shall bear an
appropriate legend referring to the terms, conditions, and
restrictions described in the Plan and in the instrument
evidencing the grant of the Restricted Shares. Any attempt
to dispose of such Restricted Shares in contravention of the
terms, conditions, and restrictions described in the Plan or
in the instrument evidencing the grant of the Restricted
Shares shall be ineffective. The Committee may enact rules
that provide that the certificates evidencing such shares
may be held in custody by a bank or other institution, or
that the Corporation may itself hold such shares in custody,
until the restrictions thereon shall have lapsed.
PAGE
I. Foreign Laws.
Notwithstanding any provisions of the Plan to the
contrary, including but not limited to Articles VI and VII
and Paragraphs A and B(i) of Article IX, if Restricted
Shares are to be awarded to a Grantee who is subject to the
laws, including but not limited to the tax laws, of any
country other than the United States, the Committee may, in
its discretion, direct the Corporation to sell, assign, or
otherwise transfer the Restricted Shares to a trust or other
entity or arrangement, rather than grant the Restricted
Shares directly to the Grantee, in order to comply with such
laws or to assure that the Grantee qualifies for tax
treatment that is comparable to the tax treatment accorded
to the recipients of Restricted Shares by the tax laws of
the United States or for tax treatment that is made
available by the laws of such country.
X. COMPLIANCE WITH LAW AND OTHER CONDITIONS.
A. Restrictions on Grant of Awards.
The listing on the New York Stock Exchange or the
registration or qualification under any federal or state law
of any shares of Common Stock to be awarded or sold pursuant
to Awards may be necessary or desirable as a condition of or
in connection with such Awards (in order to permit the
exercise of Options, the awarding of Restricted Shares, or
the resale or other disposition of any shares of Common
Stock by or on behalf of the Grantees). If the Board in its
sole discretion determines that such listing, registration,
or qualification is necessary or desirable, delivery of the
certificates for such shares of Common Stock shall not be
made until such listing, registration, or qualification
shall have been completed. The Corporation agrees that it
will use its best efforts to effect any such listing,
registration, or qualification; provided, however, that the
Corporation shall not be required to use its best efforts to
effect such registration under the Securities Act of 1933
PAGE
other than by providing the information called for by Form
S-3 and Form S-8, as presently in effect, or such other
forms as may be in effect from time to time calling for
information comparable to that presently required to be
furnished under Form S-3 and Form S-8.
B. Restrictions on Resale of Unregistered Shares.
If the shares of Common Stock that have been awarded or
sold to a Grantee pursuant to the terms of the Plan are not
registered under the Securities Act of 1933, as amended,
pursuant to an effective registration statement, such
Grantee may be required, if the Committee shall deem it
advisable, to agree in writing (i) that any shares of Common
Stock acquired by such Grantee pursuant to the Plan will not
be sold except pursuant to an effective registration
statement under the Securities Act of 1933, as amended, or
pursuant to an exemption from registration under said Act,
and (ii) that such Grantee is acquiring such shares of
Common Stock for his or her own account and not with a view
to the distribution thereof.
XI. ADJUSTMENTS.
The number of shares of Common Stock of the Corporation
reserved for Awards under the Plan, the number of shares
comprising outstanding Awards, the number of shares
permitted to be granted to any Grantee during the term of
the Plan as set forth in Section V(B) hereof, and in the
case of outstanding Options, the exercise price shall be
subject to adjustment by the Committee, in its sole
discretion, to reflect any stock split, stock dividend,
recapitalization, merger, consolidation, reorganization,
combination, or exchange of shares or other similar event.
All determinations made by the Committee with respect to
adjustments under this Article XI shall be conclusive and
binding for all purposes of the Plan.
PAGE
XII. MISCELLANEOUS PROVISIONS.
A. No Right to Receive Award.
Nothing in the Plan shall be construed to give any
Employee any right to receive an Award under the Plan.
B. Effect of Stock Splits, etc. on Restricted Shares.
Any shares of Common Stock of the Corporation received
by a Grantee as a stock dividend on Restricted Shares, or as
a result of stock splits, combinations, exchanges of shares,
reorganizations, mergers, consolidations, or other events
affecting Restricted Shares, shall have the same status, be
subject to the same restrictions, and bear the same legend
as the shares with respect to which they were issued.
C. Expenses of Plan.
The expenses of the Plan shall be borne by the
Corporation.
XIII. AMENDMENT, SUSPENSION, OR TERMINATION.
A. Amendment.
The Plan may be amended at any time and from time to
time by the Board, but no amendment that increases the
aggregate number of shares of Common Stock that may be
granted pursuant to the Plan or that extends the period
during which Awards may be granted under the Plan shall be
effective unless and until the same is approved, at a
meeting held to take such action at which a quorum is
present, by the affirmative vote of the holders of a
majority of the shares of Common Stock of the Corporation
present in person or by proxy and entitled to vote. Without
the written consent of a Grantee, no amendment of the Plan
shall adversely affect any right of such Grantee with
respect to any Award theretofore granted to him or to her.
PAGE
B. Right of Board to Suspend or Terminate Plan.
The Board may at any time suspend or terminate the
Plan. No Awards may be granted during any suspension of the
Plan or after the Plan has been terminated.
C. Termination of Plan.
The Plan shall terminate upon the earlier of the
following dates:
( i) On the date of termination specified in a
resolution of the Board, or
(ii) On a date ten years from the date on which the
Plan is approved by the stockholders of the Corporation in
accordance with Article XV hereof.
Except as otherwise provided in Article XV, the
termination of the Plan shall not affect any Awards
previously granted. After the Plan terminates, the function
of the Committee will be limited to supervising the
administration of Awards previously granted.
XIV. GOVERNING LAW.
The Plan and all Awards made thereunder shall be
governed by the laws of the State of New York.
XV. ADOPTION BY BOARD AND APPROVAL BY STOCKHOLDERS.
The Plan shall become effective upon its adoption by
the Board; provided, however, that if the Plan is not
approved by the stockholders of the Corporation prior to the
first anniversary of its adoption, the Plan and all Awards
made thereunder shall be of no effect. Stockholder approval
shall be obtained, at a meeting held to take such action at
which a quorum is present, by the affirmative vote of the
holders of a majority of the shares of Common Stock of the
Corporation present in person or by proxy and entitled to
vote.
Exhibit 10(b)
THE INTERPUBLIC OUTSIDE DIRECTORS' STOCK INCENTIVE PLAN
ARTICLE I
INTRODUCTION
1.1 Name of Plan. The name of the Plan is the
"Interpublic Outside Directors' Stock Incentive Plan."
1.2 Purpose of Plan. The Plan is being established to
attract, retain and compensate for service highly qualified
individuals to serve as members of the Board of Directors of the
Corporation, but not current employees of the Corporation or any
of its Subsidiaries, and to enable them to increase their
ownership in the Corporation's Common Stock. The Plan will be
beneficial to the Corporation and its stockholders since it will
allow these directors to have a greater personal financial stake
in the Corporation through the ownership of the Corporation's
Common Stock, in addition to strengthening their common interest
with stockholders in increasing the value of the Corporation's
Common Stock longer term.
1.3 Effective Date. The effective date of the Plan is
June 1, 1994, or such later date as stockholder approval is
obtained.
ARTICLE II
DEFINITIONS
When used in capitalized form in the Plan, the following term
shall have the following meanings, unless the context clearly
indicates otherwise:
Act. "Act" means the Securities Exchange Act of 1934,
as currently in effect or hereafter amended.
Committee. "Committee" means the directors of the
Corporation who are not Outside Directors.
PAGE
Common Stock. "Common Stock" means shares of the
Corporation's $.10 par value common stock.
Corporation. "Corporation" means The Interpublic Group
of Companies, Inc.
Fair Market Value. "Fair Market Value" means the mean
of the high and low prices at which the Common Stock of the
Corporation is traded on the date in question, as reported on the
composite tape for New York Stock Exchange issues.
Option. "Option" means a right to purchase Common
Stock under the Plan.
Option Period. "Option Period" means the period
beginning on the third anniversary of the date of grant of an
Option and ending on the tenth anniversary of the date of grant.
Outside Directors. "Outside Directors" means members
of the Board of Directors of the Corporation who are not
employees of the Corporation or any of its Subsidiaries.
Plan. "Plan" means the Interpublic Outside Directors'
Stock Incentive Plan, as amended from time to time.
Restricted Shares. "Restricted Shares" means shares of
Common Stock granted pursuant to Article VIII hereof and subject
to the restrictions and other terms and conditions set forth in
the Plan.
Restriction Period. "Restriction Period" with respect
to any Restricted Shares means the period beginning on the date
on which such Restricted Shares are granted and ending on the
fifth anniversary of the date of grant.
Subsidiary. "Subsidiary" means a subsidiary of the
Corporation that meets the definition of a "subsidiary
corporation" in Section 424(f) of the Internal Revenue Code of
1986, as amended.
PAGE
ARTICLE III
ELIGIBILITY
3.1 Condition. An individual who is an Outside
Director on or after June 1, 1994 shall be eligible to
participate in the Plan.
ARTICLE IV
SHARES AVAILABLE
4.1 Number of Shares Available. An aggregate of Two
Hundred Thousand (200,000) shares of Common Stock are available
for issuance under the Plan pursuant to awards of Options and
Restricted Shares. Such shares of Common Stock may be authorized
but unissued shares, treasury shares, or shares purchased on the
open market.
4.2 Adjustments. The number of shares of Common Stock
of the Corporation reserved for awards of Options and Restricted
Shares under the Plan, the number of shares comprising awards of
Restricted Shares, and the exercise price and the number of
shares issuable under any outstanding Options, shall be subject
to proportionate adjustment by the Committee to the extent
required to prevent dilution or enlargement of the rights of the
grantee in the event of any stock split, stock dividend,
recapitalization, merger, consolidation, reorganization,
combination, or exchange of shares or other similar event. All
determinations made by the Committee with respect to adjustment
under this Section 4.2 shall be conclusive and binding for all
purposes of the Plan.
4.3 Effect of Stock Splits, etc. on Restricted Shares.
Any shares of Common Stock of the Corporation received by a
grantee as a stock dividend on Restricted Shares, or as a result
of stock splits, combinations, exchanges of shares,
reorganizations, mergers, consolidations, or other events
affecting Restricted Shares, shall have the same status, be
subject to the same restrictions, and bear the same legend as the
shares with respect to which they were issued.
PAGE
ARTICLE V
GRANTS OF OPTIONS
5.1 Options. The only types of options which may be
granted under the Plan are non-qualified stock options.
5.2 Annual Grant. Each year on the first Friday in
the month of June, each Outside Director then serving shall
automatically receive an Option covering the whole number of
shares of Common stock of the Corporation that have an aggregate
Fair Market Value on the date of grant of $30,000, or if no whole
number of shares has such an aggregate Fair Market Value then
that whole number of shares having a Fair Market Value not in
excess of $30,000. Notwithstanding the foregoing, if, on that
first Friday, the General Counsel of the Corporation determines,
in his or her sole discretion, that the Corporation is in
possession of material, undisclosed information about the
Corporation, then the annual grant of Options to Outside
Directors shall be suspended until the second day after public
dissemination of such information. If Common Stock of the
Corporation is not traded on the New York Stock Exchange on any
date a grant would otherwise be made, then the grant shall be
made as of the next day thereafter on which Common Stock of the
Corporation is so traded.
5.3 Option Price. The exercise price per share of the
Option shall be the Fair Market Value of the Common Stock on the
date of the grant.
ARTICLE VI
OPTION PERIOD
6.1 Duration. An Option granted under the Plan shall
become exercisable three years after the date of grant and shall
expire ten years after the date of grant, unless it is sooner
terminated pursuant to Section 9.1 of the Plan.
PAGE
ARTICLE VII
PAYMENT UPON EXERCISE OF OPTIONS
7.1 Exercise Price. The exercise price of an Option
shall be paid in cash in U.S. Dollars on the date of exercise.
ARTICLE VIII
RESTRICTED SHARES
8.1 Grants. On the first Friday in June 1996, and on
the first Friday in June every five years thereafter during the
term of the Plan, the Corporation shall grant Two Thousand
(2,000) Restricted Shares to each person who is serving as an
Outside Director as of such date.
8.2 Additional Restrictions. Each Restricted Share
granted under the Plan shall be subject to the following terms
and conditions:
A. Rights with Respect to Shares.
A grantee to whom Restricted Shares have been granted
under the plan shall have absolute ownership of such shares,
including the right to vote the same and to receive dividends
thereon, subject, however, to the terms, conditions, and
restrictions described in the Plan. The grantee's absolute
ownership shall become effective only after he or she has
received a certificate or certificates for the number of shares
of Common Stock awarded, or after he or she has received
notification that such certificate or certificates are being held
in custody for him or her.
B. Restrictions.
Until the expiration of the Restriction Period
therefor, Restricted Shares shall be subject to the following
conditions:
PAGE
(i) Restricted Shares shall not be sold, assigned,
transferred, pledged, hypothecated, or otherwise disposed of; and
(ii) if the grantee ceases to serve as an Outside
Director for any reason, then, except as otherwise provided in
Section 9.2 of the Plan, any Restricted Shares for which the
Restriction Period has not lapsed that had been delivered to, or
held in custody for, the grantee shall be returned to the
Corporation forthwith, and all the rights of the grantee with
respect to such shares shall be immediately terminate without any
payment of consideration by the Corporation.
C. Lapse of Restrictions.
Except as otherwise set forth in Section 9.2 of the
Plan, the restrictions set forth in Paragraph B of this Section
8.2 for Restricted Shares shall lapse at the end of the
Restriction Period with respect to such shares.
D. Tax Assistance Payments.
When the restrictions set forth in Paragraph B hereof
lapse, the Committee may, in its discretion, direct the
Corporation to make cash payments to assist the grantee in
satisfying his federal income tax liability with respect to the
Restricted Shares. Such payments may be made only to those
grantees whose performance the Committee determines to have been
fully satisfactory between the date on which the Restricted
Shares were granted and the date on which such restrictions
lapse. The Committee may, in its discretion, estimate the amount
of the federal income tax in accordance with methods or criteria
uniformly applied to grantees similarly situated, without regard
to the individual circumstances of a particular grantee.
E. Restrictive Legends; Certificates May Be Held in
Custody.
Certificates evidencing Restricted Shares shall bear an
appropriate legend referring to the terms, conditions, and
restrictions described in the Plan. Any attempt to dispose of
such Restricted Shares in contravention of the terms, conditions,
PAGE
and restrictions described in the Plan shall be ineffective. The
Committee may enact rules that provide that the certificates
evidencing such shares may be held in custody by a bank or other
institution, or that the Corporation may itself hold such shares
in custody, until the restrictions thereon shall have lapsed.
ARTICLE IX
CESSATION OF SERVICE, RETIREMENT, DEATH
9.1 Options.
A. Options Granted Prior to June 1, 1996.
(i) With respect to each grantee who was first elected
or appointed as an Outside Director on or after January 1, 1995,
and who ceases to be an Outside Director for any reason other
than death, Options which have been granted prior to June 1, 1996
and which are exercisable on the date of cessation of service
shall continue to be exercisable by the grantee for ninety days
following the date of cessation of service, but in no event after
the expiration of the Option Period.
(ii) With respect to each grantee who was first elected
or appointed as an Outside Director prior to January 1, 1995: (A)
if such grantee ceases to serve as an Outside Director (other
than because of his or her death) and, as of the date of such
cessation of service is eligible for a benefit under the
Interpublic Outside Directors' Pension Plan, Options which have
been granted prior to June 1, 1996 and which are exercisable on
the date of cessation of service shall continue to be exercisable
by the grantee for sixty months following the date of retirement
from the Board, but in no event after the expiration of the
Option Period, and (B) if such grantee ceases to serve as an
Outside Director (other than because of his or her death) and, as
of the date of such cessation of service is not eligible for a
benefit under the Interpublic Outside Directors' Pension Plan,
Options which have been granted prior to June 1, 1996 and which
are exercisable on the date of cessation of service shall
continue to be exercisable by the grantee for ninety days
following cessation of service, but in no event after the
expiration of the Option Period.
PAGE
(iii) Upon the death of a grantee while serving as an
Outside Director, Options which have been granted prior to June
1, 1996 and which are exercisable on the date of death shall be
exercisable thirty-six months from date of death, but in no event
after expiration of the Option Period, by the grantee's legal
representatives, heirs or beneficiaries.
B. Options Granted on or after June 1, 1996.
With respect to each grantee who receives a grant of
Options on or after June 1, 1996, and who ceases to be an Outside
Director for any reason (including without limitation death),
such Options which have been granted on or after June 1, 1996 and
which are exercisable on the date of cessation of service shall
continue to be exercisable by the grantee or the grantee's legal
representatives, heirs or beneficiaries for thirty-six months
following the date of cessation of service, but in no event after
the expiration of the Option Period.
9.2 Restricted Shares. Upon a grantee's cessation of
service as an Outside Director for any reason (including death)
on or after the first anniversary of the date on which the
Restricted Shares were granted, the Restriction Period shall
lapse on the date of the grantee's cessation of service with
respect to a fraction of the Restricted Shares awarded to such
grantee. The numerator of the fraction shall be the number of
months that have elapsed since the Restricted Shares were
granted, and the denominator of the fraction shall be the number
of months in the Restriction Period; provided that in the case of
a fractional month, a period of 15 days or more shall be treated
as a full month, and a period of less than 15 days shall be
disregarded.
9.3 Forfeiture.
A. If an Option is not exercisable on the date on
which the grantee ceases to serve as an Outside Director, or if
an Option is not exercised in full before it ceases to be
exercisable in accordance with Article VI hereof and the
preceding provisions of this Article IX, the Option shall, to the
extent not previously exercised, thereupon be forfeited.
PAGE
B. If a grantee's interest in any Restricted Shares
shall be terminated pursuant to Section 8.2B of the Plan, he or
she shall forthwith deliver to the Secretary or any Assistant
Secretary of the Corporation the certificates for such shares,
accompanied by such instrument of transfer as may be required by
the Secretary or any Assistant Secretary of the Corporation.
ARTICLE x
ADMINISTRATION, AMENDMENT AND TERMINATION OF THE PLAN
10.1 Administration. The Plan shall be administered
by the Committee.
10.2 Amendment and Termination. The Plan may be
terminated or amended by the Committee as it deems advisable.
However, an amendment revising the size or frequency of awards of
Options or Restricted Shares, the duration of the Restriction
Periods for Restricted Shares, or the exercise price, date of
exercisability or Option Period of an Option shall not be made
more frequently than every six months unless necessary to comply
with the Internal Revenue Code of 1986, as amended. No amendment
may revoke or alter in a manner unfavorable to the grantee any
Options or Restricted Shares then outstanding, nor may the
Committee amend the Plan without stockholder approval where the
absence of such approval would cause the Plan to fail to comply
with Rule 16b-3 under the Act or any other requirement of any
applicable law or regulation.
10.3 Expiration of the Plan. Options or Restricted
Shares may not be granted under the Plan after June 7, 2004, but
Options granted prior to that date shall continue to become
exercisable and may be exercised according to the terms of the
Plan.
PAGE
ARTICLE XI
NONTRANSFERABILITY
11.1 Options Not Transferable. No Options granted
under the Plan are transferable other than by will or the laws of
the descent and distribution. During the grantee's lifetime, an
Option may be exercised only by the grantee or the grantee's
guardian or legal representative.
ARTICLE XII
COMPLIANCE WITH SEC REGULATIONS
12.1 Rule 16b-3. It is the Corporation's intent that
the Plan comply in all respects with new Rule 16b-3 under the Act
and that the Plan qualify as a formula plan meeting the
conditions of paragraph (c)(2)(ii) of new Rule 16b-3. If any
provision of the Plan is found not to be in compliance with the
Rule, or the Plan is found not to qualify as such formula plan,
any provision which is not in compliance or does not qualify
shall be deemed to be null and void. All grants and exercises of
Options, and grants of Restricted Shares, under the Plan shall be
executed in accordance with the requirements of Section 16 of the
Act and any regulations promulgated thereunder.
ARTICLE XIII
RIGHTS OF DIRECTORS
13.1 Rights to Awards. Except as provided in the
Plan, no Outside Director shall have any claim or right to be
granted an award under the Plan. Neither the Plan nor any action
thereunder shall be construed as giving any Outside Director any
right to be retained in the services of the Corporation in any
capacity.
Exhibit 10(c)
CREDIT AGREEMENT
BETWEEN
THE INTERPUBLIC GROUP OF COMPANIES, INC.
AND
CHEMICAL BANK
____________________
US$10,000,000
____________________
Dated as of June 25, 1996
PAGE
TABLE OF CONTENTS
SECTION PAGE
SECTION 1
INTERPRETATIONS AND DEFINITIONS
1.1 Definitions 1
1.2 Accounting Terms and Determinations 7
SECTION 2
THE LOANS
2.1 Commitment 8
2.2 Method of Borrowing 8
2.3 The Note 10
2.4 Maturity of Loans 10
2.5 Interest Rates 10
2.6 Fees 14
2.7 Optional Termination or Reduction of Commitment 14
2.8 Mandatory Termination or Reduction of Commitment 14
2.9 Optional Prepayments 15
2.10 General Provisions as to Payments 15
2.11 Computation of Interest and Fees 15
2.12 Funding Losses 16
2.13 Extension of Commitment 16
2.14 Subsidiary Borrowers 16
SECTION 3
CONDITIONS OF LENDING
3.1 All Loans 18
3.2 Initial Loan 18
SECTION 4
CHANGE IN CIRCUMSTANCES AFFECTING LOANS
4.1 Basis for Determining Interest Rate Inadequate 20
4.2 Illegality 20
4.3 Increased Costs and Reduced Returns 20
SECTION 5
REPRESENTATIONS AND WARRANTIES
5.1 Corporate Existence and Power 23
5.2 Corporate and Governmental Authorization;
Contravention 23
5.3 Binding Effect 23
5.4 Financial Information 23
5.5 Litigation 24
5.6 Compliance with ERISA 24
5.7 Taxes 24
5.8 Subsidiaries 24
PAGE
SECTION PAGE
SECTION 6
COVENANTS
6.1 Information 25
6.2 Maintenance of Property; Insurance 27
6.3 Conduct of Business and Maintenance of Existence 27
6.4 Compliance with Laws 27
6.5 Inspection of Property, Books and Records 28
6.6 Cash Flow to Total Borrowed Funds 28
6.7 Total Borrowed Funds to Consolidated Net Worth 28
6.8 Minimum Consolidated Net Worth 28
6.9 Negative Pledge 29
6.10 Consolidations, Mergers and Sales of Assets 30
6.11 Use of Proceeds 30
SECTION 7
EVENTS OF DEFAULT
7.1 Events of Default 31
SECTION 8
MISCELLANEOUS
8.1 Notices 34
8.2 Amendments and Waivers; Cumulative Remedies 34
8.3 Successors and Assigns 34
8.4 Expenses; Documentary Taxes; Indemnification 35
8.5 Withholding Taxes 36
8.6 Counterparts 37
8.7 Headings; Table of Contents 37
8.8 Governing Law 37
PAGE
AGREEMENT dated as of June 25, 1996 between THE INTERPUBLIC GROUP
OF COMPANIES, INC., a Delaware corporation (the "Borrower"), and
CHEMICAL BANK (the "Bank").
SECTION I
INTERPRETATIONS AND DEFINITIONS
1.1 Definitions. The following terms, as used herein, shall
have the following respective meanings:
"Adjusted CD Rate" has the meaning set forth in Section
2.5(b) hereof.
"Adjusted London Interbank Offered Rate" has the
meaning set forth in Section 2.5(c) hereof.
"Applicable Lending Office" means, with respect to the
Bank, (i) in the case of Domestic Loans, its Domestic Lending
Office and (ii) in the case of Eurodollar Loans, its Eurodollar
Lending Office.
"Assessment Rate" has the meaning set forth in Section
2.5(b) hereof.
"Base Rate" means, for any day, a rate per annum equal
to the higher of (i) the rate established from time to time by
the Bank in the United States as its prime or reference rate of
interest, changes in which are to be effective from the opening
of business on the day such change is made and (ii) the sum of
(A) .5% plus (B) the overnight federal funds rate for such day as
published in the weekly statistical release designated by the
Board of Governors of the Federal Reserve System as "H.15(519)"
(or any successor publication thereto).
"Base Rate Loan" means a Loan which the Borrower
specifies pursuant to Section 2.2 hereof shall be a Base Rate
Loan.
"Benefit Arrangement" means, at any time, an employee
benefit plan within the meaning of Section 3(3) of ERISA which is
not a Plan or a Multiemployer Plan and which is maintained or
otherwise contributed to by any member of the ERISA Group.
"Cash Flow" means the sum of net income of the Borrower
and its Consolidated Subsidiaries (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, provided that
such sum shall not be adjusted for any increase or decrease in
deferred taxes
PAGE
resulting from Quest & Associates, Inc., a Subsidiary of the
Borrower, investing in a portfolio of computer equipment leases
(it being understood that such increase or decrease in deferred
taxes relating to such investment shall not exceed $25,000,000).
"CD Base Rate" has the meaning set forth in Section
2.5(b) hereof.
"CD Loan" means a Loan which the Borrower specifies
pursuant to Section 2.2 hereof shall be a CD Loan.
"CD Margin" has the meaning set forth in Section 2.5(b)
hereof.
"Code" means the Internal Revenue Code of 1986, as
amended, and any successor statute thereto.
"Commitment" means the obligation of the Bank to lend
the amount set forth in Section 2.1 hereof, as such amount may be
reduced from time to time pursuant to Section 2.7 hereof.
"Consolidated Subsidiary" means at any date any
Subsidiary or other entity the accounts of which would be
consolidated with those of the Borrower in its consolidated
financial statements as of such date.
"Consolidated Net Worth" means at any date the
consolidated stockholders' equity of the Borrower and its
Consolidated Subsidiaries as such appear on the financial
statements of the Borrower determined in accordance with
generally accepted accounting principles (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 without
taking into account the effect of cumulative currency translation
adjustments).
"Debt" of any Person means at any date, without
duplication, (i) all obligations of such Person for borrowed
money, including reimbursement obligations for letters of credit,
(ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all
obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in
the ordinary course of business, (iv) all obligations of such
Person as lessee under capital leases, (v) all Debt of others
secured by a Lien on any asset of such Person, whether or not
such Debt is assumed by such Person, and (vi) all Debt of others
Guaranteed by such Person, but in each case specified in (i)
through (vi) excludes obligations arising in connection with
securities repurchase transactions.
PAGE
"Default" means any condition or event which
constitutes an Event of Default or which with the giving of
notice or lapse of time, or both, would become an Event of
Default.
"Dollars" and the sign "$" mean lawful money of the
United States of America.
"Domestic Business Day" means any day except a
Saturday, Sunday or other day on which commercial banks in New
York, New York are authorized by law to close.
"Domestic Lending Office" means the principal office of
the Bank located at the address set forth on the signature pages
hereof for its Domestic Lending Office, or such other branch (or
affiliate) located within the United States as the Bank may
hereafter designated as its Domestic Lending Office.
"Domestic Loans" means CD Loans or Base Rate Loans or
both.
"Domestic Reserve Percentage" has the meaning set forth
in Section 2.5(b) hereof.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
"ERISA Group" means the Borrower and all members of a
controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control which,
together with the Borrower, are treated as a single employer
under Section 414(b) or (c) of the Code.
"Eurodollar Business Day" means any Domestic Business
Day on which commercial banks in London are open for
international business (including dealings in Dollar deposits).
"Eurodollar Lending Office" means the office of the
Bank located at the address set forth on the signature pages
hereof for its Eurodollar Lending Office, or such other branch
(or affiliate) of the Bank as it may hereafter designate as its
Eurodollar Lending Office.
"Eurodollar Loan" means a Loan which the Borrower
specifies pursuant to Section 2.2 hereof shall be a Eurodollar
Loan.
"Eurodollar Margin" has the meaning set forth in
Section 2.5(c) hereof.
"Eurodollar Reserve Percentage" has the meaning set
forth in Section 2.5(c) hereof.
PAGE
"Event of Default" has the meaning set forth in Section
7 hereof.
"Fixed CD Rate" has the meaning set forth in Section
2.5(b) hereof.
"Fixed Rate Loans" means CD Loans, Eurodollar Loans or
Money Market Rate Loans.
"Guarantee" by any Person means 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
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, to purchase assets, goods, securities or services, to
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 has a corresponding meaning.
"Interest Period" means: (1) with respect to each CD
Loan, at the Borrower's option, the period commencing on the date
of such Loan and ending 30, 60, 90 or 180 days thereafter, (2)
with respect to each Eurodollar Loan, at the Borrower's option,
the period commencing on the date of such Loan and ending one,
two, three or six months thereafter and (3) with respect to each
Base Rate Loan the period commencing on the date of such Loan and
ending 30 days thereafter provided, that:
(a) any Interest Period which would otherwise end on a
day which is not a Eurodollar Business Day shall be extended to
the next succeeding Eurodollar Business Day unless with respect
to a Eurodollar Loan such Eurodollar Business Day falls in
another calendar month, in which case such Interest Period shall
end on the next preceding Eurodollar Business Day;
(b) with respect to a Eurodollar Loan, any Interest
Period which begins on the last Eurodollar Business Day of the
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the
last Eurodollar Business Day of a calendar month; and
PAGE
(c) any Interest Period which would otherwise end
after the Termination Date shall end on the Termination Date;
provided further, however, that if any such Interest
Period shall be less than 30 days, the Loan for such Interest
Period shall be a Base Rate Loan.
"Lien" means, with respect to any asset, any mortgage,
lien, pledge, charge, security interest or other encumbrance of
any kind in respect of such asset. For purposes of this
Agreement, the Borrower or any subsidiary shall be deemed to own
subject to a Lien any asset which it has acquired or holds
subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title
retention agreement relating to such asset.
"Loan" and "Loans" means a Domestic Loan, a Eurodollar
Loan, or a Money Market Rate Loan, as the context may require.
"London Interbank Offered Rate" has the meaning set
forth in Section 2.5(c) hereof.
"Material Plan" means at any time a Plan or Plans
having aggregate unfunded benefit liabilities (within the meaning
of Section 4001(a)(18) of ERISA) in excess of $25,000,000.
"Money Market Rate Loan" means a Loan made by the Bank
to the Borrower pursuant to Section 2.5(d) hereof.
"Multiemployer Plan" means at any time an employee
pension benefit plan that is a "multiemployer plan" within the
meaning of Section 4001(a)(3) of ERISA to which any member of the
ERISA Group is then making or accruing an obligation to make
contributions or has within the preceding five plan years made
contributions, including for these purposes any Person which
ceased to be a member of the ERISA Group during such five year
period.
"Note" or "Notes" means the promissory note of the
Borrower, substantially in the form of Exhibits A and B hereto
evidencing the obligation of the Borrower to repay the Loans.
"PBGC" means the Pension Benefit Guaranty Corporation
or any entity succeeding to any or all of its functions under
ERISA.
"Participant" has the meaning set forth in Section 8.3.
"Person" means an individual, a corporation, a
partnership, an association, a business trust or any other entity
or organization, including a government or political subdivision
or an agency or instrumentality thereof.
PAGE
"Plan" means at any time a defined benefit pension plan
(other than a Multiemployer Plan) which is covered by Title IV of
ERISA or subject to the minimum funding standards under Section
412 of the Code and either (i) is maintained, or contributed to,
by any member of the ERISA Group for employees of any member of
the ERISA Group or (ii) has at any time within the preceding five
years been maintained, or contributed to, by any Person which was
at such time a member of the ERISA Group for employees of any
Person which was at such time a member of the ERISA Group.
"Regulation U" means Regulation U of the Board of
Governors of the Federal Reserve System, as in effect from time
to time.
"Significant Subsidiary" or "Significant Group of
Subsidiaries" at any time of determination means any Consolidated
Subsidiary or group of Consolidated Subsidiaries, respectively,
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 Borrower and its Consolidated
Subsidiaries for the most recently ended fiscal year or for more
than 10% of the total assets of the Borrower and its Consolidated
Subsidiaries as of the end of such fiscal year; provided that in
connection with any determination with respect to a Significant
Group of Subsidiaries under (x) Section 7(f), there shall be a
payment default, failure or other event (of the type described
therein but without regard to the principal amount of such
obligation) of each Consolidated Subsidiary included in such
group, (y) Sections 7(g) and (h) and the last sentence of Section
6.10, the condition or event described therein shall exist with
respect to each Consolidated Subsidiary included in such group or
(z) Section 7(j), there shall be a final judgment (of the type
specified therein but without regard to the amount of such
judgment) rendered against each Consolidated Subsidiary included
in such group.
"Subsidiary" means 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
other persons performing similar functions is at the time
directly or indirectly owned by the Borrower.
"Termination Date" means June 30, 1999 or such later
date to which the Commitment is extended in accordance with
Section 2.13 hereof.
"Total Borrowed Funds" means at any date, without
duplication, (i) all outstanding obligations of the Borrower and
its Consolidated Subsidiaries for borrowed money, (ii) all
outstanding obligations of the Borrower and its Consolidated
Subsidiaries evidenced by bonds, debentures, notes or similar
PAGE
instruments and (iii) any outstanding obligations of the type set
forth in (i) or (ii) of any other Person Guaranteed by the
Borrower and its Consolidated Subsidiaries, it being understood
that the obligation to repurchase securities transferred pursuant
to a securities repurchase agreement shall not be deemed to give
rise to any amount of Total Borrowed Funds pursuant to this
definition.
1.2 Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein
shall be interpreted, all accounting determinations hereunder
shall be made, and all financial statements required to be
delivered hereunder shall be prepared, in accordance with
generally accepted accounting principles as in effect from time
to time, applied on a basis consistent (except for changes
concurred in by the Borrower's independent public accountants)
with the most recent audited consolidated financial statements of
the Borrower and its Consolidated Subsidiaries delivered to the
Bank.
SECTION 2
THE LOANS
2.1 Commitment. At any time prior to the Termination
Date the Bank agrees, on the terms and conditions set forth in
this Agreement, to lend to the Borrower from time to time amounts
not exceeding in the aggregate at any one time outstanding the
principal amount of $10,000,000 minus the value of any
outstanding letter(s) of credit issued by the Bank on behalf of
DraftDirect Worldwide, Inc. (the "Commitment"). Each Loan under
this Section 2.1 shall be in the principal amount of $250,000
(except that any such Loan may be in the amount of the unused
Commitment) or any larger multiple thereof. During such period
and within the foregoing limits, the Borrower may borrow under
this Section 2.1, repay or to the extent permitted by Section 2.9
hereof prepay Loans and reborrow under this Section 2.1.
2.2 Method of Borrowing.
(a) With respect to each Loan made pursuant to Section
2.1 hereof, the Borrower shall give the Bank notice prior to
11:00 a.m. on the drawdown date in the case of a Base Rate
Loan, at least one Domestic Business Day's notice in the
case of a CD Loan, or at least three Eurodollar Business
Days' notice in the case of a Eurodollar Loan, specifying:
(i) the date of such Loan, which shall be a Domestic
Business Day in the case of a Domestic Loan and a
Eurodollar Business Day in the case of a Eurodollar
Loan;
(ii) the principal amount of such Loan;
(iii) whether the Loan is to be a Base Rate Loan, a
CD Loan or a Eurodollar Loan (and, if such Loan is to
be a Eurodollar Loan, whether Section 2.14 is to be
applicable thereto); and
(iv) in the case of a Fixed Rate Loan, the duration of
the Interest Period applicable thereto, subject to the
definition of Interest Period.
(b) On the date of each Loan the Bank will make the
proceeds thereof available to the Borrower at the Domestic
Lending Office.
(c) If the Bank makes a new Loan hereunder on a day
which the Borrower is to repay all or any part of an
outstanding Loan, the Bank shall apply the proceeds of its
new Loan to make such repayment and only an amount equal to
the difference (if any) between the amount being borrowed
and the amount being repaid shall be made available by the
Bank to the Borrower as provided in subsection (b) of this
Section or remitted by the Borrower to the Bank as provided
in Section 2.10 hereof, as the case may be.
PAGE
2.3 The Note.
(a) The Loans shall be evidenced by a single Note
payable to the order of the Bank for the account of its
Applicable Lending Office in an amount equal to the
aggregate unpaid principal amount of the Loans. The Money
Market Rate Loans shall be evidenced by the Money Market
Rate Note, a form of which is attached hereto as Exhibit B.
(b) The Bank shall record and prior to any transfer,
if permitted, of its Note, shall endorse on the schedule
forming a part thereof appropriate notations evidencing the
date, the type, the amount and the maturity of each Loan to
be evidenced by the Note and the date and amount of each
payment of principal made by the Borrower with respect
thereto; provided that the failure of the Bank to make any
such recordation or endorsement shall not affect the
obligations of the Borrower hereunder or under the Note and,
further provided, the Bank shall make such additions and
deletions as the Borrower may request in order to correct
any mistakes. The Bank is hereby irrevocably authorized by
the Borrower so to endorse the Note and to attach to and
make a part of the Note a continuation of any such schedule
as and when required.
2.4 Maturity of Loans. Each Loan shall mature, and
the principal amount thereof shall be due and payable, on
the last day of the Interest Period applicable to such Loan.
Each Money Market Rate Loan shall mature at such time as may
be agreed to by the Bank and the Borrower.
2.5 Interest Rates.
(a) Each Base Rate Loan shall bear interest on the
outstanding principal amount thereof, for each day from the
date such Loan is made until it becomes due, at a rate per
annum equal to the Base Rate. Such interest shall be
payable for each Interest Period on the last day thereof.
Any overdue principal of and, to the extent permitted by
law, overdue interest on the Base Rate Loans shall bear
interest during such overdue period for each day until paid
at a rate per annum equal to the sum of 1% plus the
otherwise applicable rate for such day, payable on demand of
the Bank.
(b) Each CD Loan shall bear interest on the
outstanding principal amount thereof, for each Interest
Period applicable thereto, at a rate per annum equal to the
applicable Fixed CD Rate; provided that if any CD Loan or
any portion thereof shall, as a result of clause (c) of the
definition of Interest Period, have an Interest Period of
PAGE
less than 30 days, such portion shall bear interest during
such Interest Period at the rate applicable to Base Rate
Loans during such Period. Such interest shall be payable for
each Interest Period on the last day thereof and, if such
Interest Period is longer than 90 days, at intervals of 90
days after the first day thereof. Any overdue principal of
and, to the extent permitted by law, overdue interest on the
CD Loans shall bear interest during such overdue period for
each day until paid at a rate per annum equal to the sum of
1% plus the higher of (i) the Fixed CD Rate applicable to
such Loan and (ii) the rate applicable to Base Rate Loans
for such day, payable on demand of the Bank.
The "Fixed CD Rate" applicable to any CD Loan for any
Interest Period means a rate per annum equal to the sum of the CD
Margin plus the applicable Adjusted CD Rate.
The "CD Margin" means (i) .4250%, 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 to Cash Flow to
Total Borrowed Funds was equal to or greater than .50 to 1; or
(ii) .5250%, 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) .6250%, if the
conditions set forth in both clauses (i) and (ii) are not
satisfied.
The "Adjusted CD Rate" applicable to any Interest Period
means a rate per annum determined pursuant to the following
formula:
ACDR = CDBR A + AR
1 - DRP
ACDR = Adjusted CD Rate for such Interest Period
CDBR = CD Base Rate for such Interest Period
AR = Assessment Rate
DRP = Domestic Reserve Percentage
The "CD Base Rate" means for any Interest Period the prevailing
per annum rate of interest as reasonably determined by the Bank
(rounded upward, if necessary, to the next higher 1/100 of 1%)
bid at 11:00 a.m. (New York time) (or as soon thereafter as
practicable) on the first day of such Interest Period by two
PAGE
or more certificate of deposit dealers of recognized standing
selected by the Bank for the purchase at face value of US dollar
certificates of deposit issued by major New York banks in an
amount comparable to the principal amount of the CD Loan to which
such Interest Period applies and with a maturity comparable to
such Interest Period.
The "Domestic Reserve Percentage" means for any day, that
percentage (expressed as a decimal) which is in effect on such
day, as prescribed by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum
reserve requirement (including, without limitation, any basic,
supplemental or emergency reserves) for a member bank of the
Federal Reserve System with deposits exceeding five billion
Dollars in respect of new non-personal time deposits in Dollars
having a maturity comparable to the related Interest Period and
in an amount of $100,000 or more. The Fixed CD Rate shall be
adjusted automatically on and as of the effective date of any
change in the Domestic Reserve Percentage.
"Assessment Rate" means for any Interest Period the net
annual assessment rate (rounded upwards, if necessary, to the
next higher 1/100 of 1%) actually incurred by the Bank to the
Federal Deposit Insurance Corporation (or any successor) for such
Corporation's (or such successor's) insuring time deposits at
offices of the Bank in the United States during the most recent
period for which such rate has been determined prior to the
commencement of such Interest Period.
(c) Each Eurodollar Loan shall bear interest on the unpaid
principal amount thereof, for the Interest Period applicable
thereto, at a rate per annum equal to the sum of the Eurodollar
Margin plus the applicable Adjusted London Interbank Offered
Rate. Such interest shall be payable for each Interest Period on
the last day thereof and, if such Interest Period is longer than
three months, at intervals of three months after the first day
thereof. Any overdue principal of and, to the extent permitted
by law, overdue interest on the Eurodollar Loans shall bear
interest for each day until paid at a rate per annum equal to the
sum of 1% plus the higher of (i) the rate of interest applicable
to such Loan and (ii) the rate applicable to Base Rate Loans for
such day, payable on demand of the Bank.
The "Adjusted London Interbank Offered Rate" applicable to
any Interest Period means a rate per annum equal to the quotient
obtained (rounded upwards, if necessary, to the next higher 1/100
of 1%) by dividing (i) the applicable London Interbank Offered
Rate by 1.00 minus the Eurodollar Reserve Percentage.
PAGE
The "London Interbank Offered Rate" applicable to any
Interest Period means the rate per annum at which deposits in
Dollars are offered to the Bank in the London interbank market at
approximately 11:00 a.m. (London time) two Eurodollar Business
Days prior to the first day of such Interest Period in an amount
approximately equal to the principal amount of the Eurodollar
Loan to which such Interest Period is to apply and for a period
of time comparable to such Interest Period.
The "Eurodollar Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such
day, as prescribed by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum
reserve requirement for a member bank of the Federal Reserve
System with deposits exceeding five billion dollars in respect of
"Eurocurrency liabilities" (or in respect of any other category
of liabilities which includes deposits by reference to which the
interest rate on Eurodollar Loans is determined or any category
of extensions of credit or other assets which includes loans by a
non-United States office of the Bank to United States residents).
The Adjusted London Interbank Offered Rate shall be adjusted
automatically on and as of the effective date of any change in
the Eurodollar Reserve Percentage.
The "Eurodollar Margin" means (i) .30%, 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) .40%, 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)
.50%, if the conditions set forth in both clauses (i) and (ii)
are not satisfied.
(d) Each Money Market Rate Loan shall be made by the Bank
to the Borrower upon such terms and conditions and in such
amounts as may be agreed upon from time to time by the Bank and
the Borrower. Each Money Market Rate Loan shall be evidenced by
a Note in the form of Exhibit B hereto.
2.6 Fees. The Borrower shall pay to the Bank a commitment
fee computed on the unused portion of the Commitment. The per
annum commitment fee shall be on any date from and after the date
hereof (i) .125% of the unused portion of the Commitment, 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
PAGE
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)
.180% of the unused portion of the Commitment, if the conditions
set forth in clauses (i) and (ii) are not satisfied. Such fees
shall accrue from the date hereof to and including the
Termination Date and shall be payable quarterly in arrears on the
last day of each June, September, December and March and on any
date on which the Commitment is terminated or otherwise reduced.
2.7 Optional Termination or Reduction of Commitment. The
Borrower may, upon at least three Domestic Business Days' notice
to the Bank, terminate at any time or reduce from time to time
the unused portion of the Commitment. Any such reduction of the
Commitment shall be in the amount of $1,000,000 or any larger
multiple thereof. If the Commitment is terminated in its
entirety, the accrued commitment fee shall be payable on the
effective date of such termination.
2.8 Mandatory Termination or Reduction of Commitment. If
not previously terminated by the Borrower pursuant to Section
2.7, the Commitment shall terminate on the Termination Date, and
any Loans then outstanding (together with accrued interest
thereon) shall be due and payable on such date.
2.9 Optional Prepayments.
(a) The Borrower may, upon at least one Domestic
Business Day's notice to the Bank, prepay the Base Rate
Loans without premium or penalty in whole at any time or
from time to time in part in an amount equal to $250,000 or
any multiple of $250,000 in excess thereof (or such lesser
amount as applicable if less than $250,000 is outstanding)
by paying the principal amount being prepaid together with
accrued interest thereon to the date of prepayment.
(b) Except as provided in Section 4.2 hereof, the
Borrower may not prepay all or any portion of the principal
amount of any Fixed Rate Loan prior to the maturity thereof.
2.10 General Provisions as to Payments. The Borrower
shall make each payment of principal of, and interest on, the
Loans and of commitment fees hereunder not later than 11:00 a.m.
(local time) on the date when due in funds immediately available
at the Applicable Lending Office for
PAGE
the account of (i) the Domestic Lending Office in the case of
Domestic Loans and Money Market Rate Loans or (ii) the Eurodollar
Lending Office in the case of Eurodollar Loans. Whenever any
payment of principal of, or interest on, the Domestic Loans, the
Money Market Rate Loans, the commitment fee shall be due on a day
which is not a Domestic Business Day, the date for payment
thereof shall be extended to the next succeeding Domestic
Business Day. Whenever any payment of principal of, or interest
on, the Eurodollar Loans shall be due on a day which is not a
Eurodollar Business Day, the date for payment thereof shall be
extended to the next succeeding Eurodollar Business Day unless as
a result thereof it would fall in the next calendar month, in
which case it shall be advanced to the next preceding Eurodollar
Business Day. If the date for any payment of principal is
extended by operation of law or otherwise, interest shall be
payable for such extended time.
2.11 Computation of Interest and Fees. Interest on
the Loans bearing interest based on clause (i) of the definition
of Base Rate shall be computed on the basis of a year of 365 or
366 days, as the case may be, and paid for actual days elapsed.
Interest on Loans bearing interest based on clause (ii) of the
definition of Base Rate, the CD Loans, the Eurodollar Loans, the
Money Market Rate Loans and the calculation of the commitment fee
shall be computed on the basis of a year of 360 days and paid for
actual days elapsed.
2.12 Funding Losses. If the Borrower makes any
payment of principal with respect to any Fixed Rate Loan
(pursuant to Section 4 or Section 7 or otherwise) on any day
other than the last day of an Interest Period applicable to such
Loan, or if the Borrower fails to borrow any Fixed Rate Loan
after notice has been given to the Bank in accordance with
Section 2.2 hereof, the Borrower shall reimburse the Bank on
demand for any resulting loss or expense incurred by it (or by
any existing or prospective Participant in the related Loan)
including (without limitation) any loss incurred in obtaining,
liquidating or employing deposits from third parties; provided
that the Bank shall have delivered to the Borrower a certificate
by a Bank officer as to the amount of such loss.
2.13 Extension of Commitment. Not more than 60 nor
less than 45 days prior to each date which is either the second
or third anniversary of this Agreement, the Borrower may request
in writing that the Bank extend the Commitment for an additional
period of one year from the then current Termination Date. If
the Bank, in its sole discretion, decides to grant such request,
it shall so notify the Borrower not less than 30 days before the
then current Termination Date in writing, whereupon the
Commitment shall be extended for an additional period of one year
from the then current Termination Date, and the term "Termination
PAGE
Date" shall thereafter refer to the date that the Commitment, as
so extended, will terminate. If not extended as provided in this
Section 2.13, the Commitment will automatically terminate on the
then current Termination Date without further action by the
Borrower or the Bank.
2.14 Subsidiary Borrowers.
(a) Designation of Subsidiary Borrower. Any notice of a
borrowing pursuant to Section 2.2(a) may include, at the option
of the Borrower, a designation that (i) the terms and provisions
of this Section 2.14 shall be applicable to such Loan, and (ii)
DraftDirect Worldwide, Inc. shall be the borrower with respect to
such Loan. Any Loan as to which such a designation is made is
referred to herein as a "Subsidiary Loan" and DraftDirect
Worldwide, Inc., is referred to herein as the "Subsidiary
Borrower". Except to the extent inconsistent with any term or
provision of this Section 2.14, the terms and provisions of this
Agreement shall apply to each Subsidiary Loan (and to each
promissory note evidencing a Subsidiary Loan) to the same extent
as applicable to any other Loan (and any Note).
(b) Funding and Notes; Commitment. On the date of each
Subsidiary Loan, the Bank will make the proceeds thereof
available to the Subsidiary Borrower at the Applicable Lending
Office. Each Subsidiary Loan shall be evidenced by a separate
promissory note of the Subsidiary Borrower, substantially in the
form of Exhibit C hereto, payable to the order of the Bank for
the account of its Applicable Lending Office ("Subsidiary Note").
For purposes of computing the amount from time to time of the
unused Commitment, the outstanding principal amount of all
Subsidiary Loans at any time shall be deemed to constitute
outstanding Loans of like principal amount under this Agreement.
(c) Payments, Prepayments, Funding Losses, Etc. The terms
and provisions of Sections 2.9, 2.10, 2.12, 4 and 8.3 of this
Agreement are intended to be applicable to Subsidiary Loans (and
the Subsidiary Notes), provided that references to the Borrower's
rights and obligations therein (including rights and obligations
in respect of notices) shall, in the case of any Subsidiary Loan,
be deemed to be references to the Subsidiary Borrower's rights
and obligations. Except as provided in the preceding sentence,
all references to the "Borrower" in this Agreement shall be
deemed to be references to The Interpublic Group of Companies,
Inc. So long as DraftDirect Worldwide, Inc. is a Subsidiary
Borrower under the Agreement, such fees as described in Section
1.6 shall be paid by DraftDirect Worldwide, Inc.
(d) Conditions to Subsidiary Loans. In addition to the
conditions set forth in Section 3, the obligation of the Bank to
make the initial Subsidiary Loan to any Subsidiary Borrower shall
be subject to the receipt by the Bank of the following:
PAGE
(i) a duly executed Subsidiary Note of such Subsidiary
Borrower, with the duly executed guaranty of
Borrower affixed thereto; and
(ii) an opinion of counsel to such Subsidiary Borrower
to the effect that (A) such Subsidiary Borrower is
a corporation duly organized, validly existing and
in good standing under the laws of its
jurisdiction of incorporation, (B) the execution,
delivery and performance by such Subsidiary
Borrower of the Subsidiary Note are within the
Subsidiary Borrower's corporate powers and have
been duly authorized by all necessary corporate
action, and (C) the Subsidiary Note of such
Subsidiary Borrower constitutes a valid and
binding obligation of the Subsidiary Borrower.
Each borrowing by a Subsidiary Borrower shall be deemed to be a
representation and warranty by the Borrower on the date of such
Subsidiary Loan as to the matters specified in clause (ii)(A),
(ii)(B) and (ii) (C) above
(e) Notices. Notices, requests, demands or communications
to any Subsidiary Borrower shall be delivered or addressed to the
Borrower as provided in Section 8.1(a).
PAGE
SECTION 3
CONDITIONS OF LENDING
The obligation of the Bank to make each Loan hereunder is subject
to the performance by the Borrower of all its obligations under
this Agreement and to the satisfaction of the following further
conditions:
3.1 All Loans. In the case of each Loan hereunder,
including the initial Loan:
(a) receipt by the Bank of the notice from the
Borrower required by Section 2.2 hereof;
(b) the fact that immediately after the making of the
Loan no Default with respect to Sections 6.1(d), 6.6, 6.7,
6.8, 6.9 or 6.10 or Event of Default shall have occurred and
be continuing, except that in the case of any Loan which,
after the application of proceeds thereof, results in no net
increase in the outstanding principal amount of Loans made
by the Bank, the fact that immediately after the making of
the Loan, no Event of Default shall have occurred and be
continuing;
(c) the fact that the representations and warranties
contained in this Agreement shall be true on and as of the
date of the Loan (except, in the case of any Loan which,
after the application of the proceeds thereof, results in no
net increase in the outstanding principal amount of Loans
made by the Bank, the representations and warranties set
forth in Sections 5.4(B) and 5.5 so long as the Borrower has
disclosed to the Bank any matter which would cause any such
representation to be untrue on the date of such Loan); and
(d) receipt by the Bank of such other documents,
evidence, materials and information with respect to the
matters contemplated hereby as the Bank may reasonably
request.
Each borrowing hereunder shall be deemed to be a
representation and warranty by the Borrower on the date of such
Loan as to the facts specified in (b) and (c) of this Section.
3.2 Initial Loan. In the case of the initial Loan:
(a) receipt by the Bank of a duly executed Note;
(b) receipt by the Bank of an opinion of counsel to
the Borrower as to the matters referred to in Sections 5.1, 5.2,
5.3, 5.5 and 5.8 hereof, and covering such other matters as the
Bank may reasonably request, dated the date
PAGE
of such Loan, satisfactory in form and substance to the Bank;
(c) receipt by the Bank of certified copies of all
corporate action taken by the Borrower to authorize the
execution, delivery and performance of this Agreement and the
Note, and the Loans hereunder and such other corporate documents
and other papers as the Bank may reasonably request;
(d) receipt by the Bank of a certificate of a duly
authorized officer of the Borrower as to the incumbency, and
setting forth a specimen signature, of each of the persons (i)
who has signed this Agreement on behalf of the Borrower; (ii) who
will sign the Note on behalf of the Borrower; and (iii) 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 this Agreement and the
transactions contemplated hereby; and
(e) receipt by the Bank of a certificate of a duly
authorized officer of the Borrower to the effect set forth in
Sections 3.1(b) and 3.1(c) hereof.
PAGE
SECTION 4
CHANGE IN CIRCUMSTANCES AFFECTING LOANS
4.1 Basis for Determining Interest Rate Inadequate.
If on or prior to the first day of any Interest Period deposits
in Dollars (in the applicable amounts) are not being offered to
the Bank in the relevant market for such Interest Period, the
Bank shall forthwith give notice thereof to the Borrower,
whereupon the obligations of the Bank to make CD Loans or
Eurodollar Loans, as the case may be, shall be suspended until
the Bank notifies the Borrower that the circumstances giving rise
to such suspension no longer exist. Unless the Borrower notifies
the Bank at least two Domestic Business Days before the date of
any Fixed Rate Loan for which a notice of borrowing has
previously been given that it elects not to borrow on such date,
such Loan shall instead be made as a Base Rate Loan or the notice
of borrowing may be withdrawn.
4.2 Illegality. If, after the date of this Agreement,
the adoption of any applicable law, rule or regulation, or any
change therein, or any change in the interpretation or
administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Bank (or its
Eurodollar Lending Office) with any request or directive (whether
or not having the force of law) of any such authority, central
bank or comparable agency shall make it unlawful or impossible
for the Bank (or its Eurodollar Lending Office) to make, maintain
or fund its Eurodollar Loans, the Bank shall forthwith so notify
the Borrower, whereupon the Bank's obligation to make Eurodollar
Loans shall be suspended. Before giving any notice to the
Borrower pursuant to this Section 4.2, the Bank will designate a
different Eurodollar Lending Office if such designation will
avoid the need for giving such notice and will not, in the
judgment of the Bank, be otherwise disadvantageous to the Bank.
If the Bank shall determine that it may not lawfully continue to
maintain and fund any of its outstanding Eurodollar Loans to
maturity and shall so specify in such notice, the Borrower shall
immediately prepay in full the then outstanding principal amount
of each such Eurodollar Loan, together with accrued interest
thereon.
4.3 Increased Costs and Reduced Returns.
(a) If, after the date hereof, the adoption of any
applicable law, rule or regulation, or any change therein, or any
change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof or compliance
by the Bank (or its Applicable Lending Office) with any request
or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency:
PAGE
(i) shall subject the Bank (or its Applicable Lending
Office) to any tax, duty or other charge with respect to its
obligation to make Fixed Rate Loans, its Fixed Rate Loans,
or its Note, or shall change the basis of taxation of
payments to the Bank (or its Applicable Lending Office) of
the principal of or interest on its Fixed Rate Loans or in
respect of any other amounts due under this Agreement, in
respect of its Fixed Rate Loans or its obligation to make
Fixed Rate Loans, (except for changes in the rate of tax on
the overall net income of the Bank or its Applicable Lending
Office imposed by the jurisdiction in which the Bank's
principal executive office or Applicable Lending Office is
located); or
(ii) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement (including,
without limitation, any imposed by the Board of Governors of
the Federal Reserve System, but excluding (A) with respect
to any CD Loan any such requirement included in an
applicable Domestic Reserve Percentage and (B) with respect
to any Eurodollar Loan any such requirement included in an
applicable Eurodollar Reserve Percentage) against assets of,
deposits with or for the account of, or credit extended by,
the Bank (or its Applicable Lending Office) or shall impose
on the Bank (or its Applicable Lending Office) or on the
United States market for certificates of deposit or the
London interbank market any other condition affecting its
obligation to make Fixed Rate Loans, its Fixed Rate Loans or
its Note;
and the result of any of the foregoing is to increase the cost to
the Bank (or its Applicable Lending Office) of making or
maintaining any Fixed Rate Loan, or to reduce the amount of any
sum received or receivable by the Bank (or its Applicable Lending
Office) under this Agreement or under its Note with respect
thereto, by an amount deemed by the Bank to be material, then,
within 15 days after demand by the Bank, the Borrower agrees to
pay to the Bank such additional amount or amounts as will
compensate the Bank for such increased cost or reduction.
(b) If the Bank shall have determined that the adoption,
after the date hereof, of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any change
in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance
by the Bank (or its Applicable Lending Office) with any request
or directive regarding capital adequacy (whether or not having
the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the
PAGE
rate of return on the Bank's capital as a consequence of its
obligations hereunder to a level below that which the Bank could
have achieved but for such adoption, change or compliance (taking
into consideration the Bank's policies with respect to capital
adequacy) by an amount deemed by the Bank to be material, then
from time to time, within 15 days after demand by the Bank, the
Borrower shall pay to such Bank such additional amount or amounts
as will compensate the Bank for such reduction.
(c) The Bank will promptly notify the Borrower of any event
of which it has knowledge, occurring after the date hereof, which
will entitle the Bank to compensation pursuant to this Section
and will designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount of,
such compensation and will not, in the judgment of the Bank, be
otherwise disadvantageous to the Bank. A certificate by an
officer of the Bank claiming compensation under this Section and
setting forth the additional amount or amounts to be paid to it
hereunder shall, in the absence of manifest error, constitute
prima facie evidence of such amount. In determining such amount,
the Bank may use any reasonable averaging and attribution
methods.
PAGE
SECTION 5
REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents and warrants to the Bank
that:
5.1 Corporate Existence and Power. The Borrower is a
corporation duly organized, validly existing and in good standing
under the laws of the State of its incorporation, and has all
corporate powers and all material governmental licenses,
authorizations, consents and approvals required to carry on its
business as now conducted.
5.2 Corporate and Governmental Authorization;
Contravention. The execution, delivery and performance by the
Borrower of this Agreement and the Note are within the Borrower's
corporate powers, have been duly authorized by all necessary
corporate action, require no action by or in respect of, or
filing with, any governmental body, agency or official and do not
contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of
incorporation or by-laws of the Borrower or of any judgment,
injunction, order, decree, material agreement or other instrument
binding upon the Borrower or result in the creation or imposition
of any Lien on any asset of the Borrower or any of its
Consolidated Subsidiaries.
5.3 Binding Effect. This Agreement constitutes a
valid and binding agreement of the Borrower and the Notes, when
executed and delivered in accordance with this Agreement, will
constitute a valid and binding obligation of the Borrower.
5.4 Financial Information.
(a) The consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as at December 31, 1995 and the related
consolidated statements of income and retained earnings and cash
flows of the Borrower and its Consolidated Subsidiaries for the
fiscal year then ended, certified by Price Waterhouse, certified
public accountants, and set forth in the Borrower's most recent
Annual Report on Form 10-K, a copy of which has been delivered to
the Bank, fairly present in conformity with generally accepted
accounting principles, the consolidated financial position of the
Borrower and its Consolidated Subsidiaries at such date and the
consolidated results of operations for such fiscal year;
(b) Since December 31, 1995 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.
PAGE
5.5 Litigation. There is no action, suit or
proceeding pending against, or to the knowledge of the Borrower
threatened against, the Borrower or any of its Consolidated
Subsidiaries before any court or arbitrator or any governmental
body, agency or official in which there is a significant
probability of an adverse decision which would materially
adversely affect the business, consolidated financial position or
consolidated results of operations of the Borrower and its
Consolidated Subsidiaries taken as a whole or which in any manner
draws into question the validity of this Agreement or the Notes.
5.6 Compliance with ERISA. Each member of the ERISA
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
Borrower and its Consolidated Subsidiaries taken as a whole. No
member of the ERISA Group has 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.
5.7 Taxes. United States Federal income tax returns
of the Borrower and its Consolidated Subsidiaries have been
examined and closed through the fiscal year ended December 31,
1987. The Borrower and its Consolidated Subsidiaries have filed
all United States Federal income tax returns and all other
material tax returns which are required to be filed by them and
have paid all taxes due reported on such returns or pursuant to
any assessment received by the Borrower or any Consolidated
Subsidiary, to the extent that such assessment has become due.
The charges, accruals and reserves on the books of the Borrower
and its Consolidated Subsidiaries in respect of taxes or other
governmental charges are, in the opinion of the Borrower,
adequate except for those which are being contested in good faith
by the Borrower.
5.8 Subsidiaries. Each of the Borrower's Consolidated
Subsidiaries is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of
incorporation, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted, all to the
extent material to the Borrower and its Subsidiaries taken as a
whole.
PAGE
SECTION 6
COVENANTS
So long as the Commitment shall be in effect or the Note is
outstanding, the Borrower agrees that:
6.1 Information. The Borrower will deliver to the Bank:
(a) as soon as available and in any event within 95 days
after the end of each fiscal year of the Borrower, a consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries as
at the end of such year, and consolidated statements of income and
retained earnings and statement of cash flows of the Borrower and
its Consolidated Subsidiaries for such year, setting forth in each
case in comparative form the figures for the preceding fiscal year,
all reported on by Price Waterhouse or other independent certified
public accountants of nationally recognized standing;
(b) as soon as available and in any event within 50 days
after the end of each of the first three quarters of each fiscal
year of the Borrower, an unaudited consolidated balance sheet of
the Borrower and its Consolidated Subsidiaries as at the end of
such quarter and the related unaudited consolidated statements of
income and retained earnings and statement of cash flows of the
Borrower and its Consolidated Subsidiaries for such quarter and for
the portion of the Borrower's fiscal year ended at the end of such
quarter setting forth in each case in comparative form the figures
for the corresponding quarter and the corresponding portion of the
Borrower's previous fiscal year, all certified (subject to changes
resulting from year-end adjustments) as to fairness of
presentation, in conformity with generally accepted accounting
principles (other than as to footnotes) and consistency (except to
the extent of any changes described therein and permitted by
generally accepted accounting principles) by the chief financial
officer or the chief accounting officer of the Borrower;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate
of the chief financial officer or the chief accounting officer of
the Borrower (i) setting forth in reasonable detail the
calculations required to establish whether the Borrower was in
compliance with the requirements of Sections 6.6 to 6.8, inclusive,
on the date of such financial statements and (ii) stating whether
any Default has occurred and is continuing on the date of such
certificate and, if any Default then has occurred and is
continuing, setting forth the details thereof and the action which
the Borrower is taking or proposes to take with respect thereto;
PAGE
(d) within 10 days of the chief executive officer, chief
operating officer, principal financial officer or principal
accounting officer of the Borrower obtaining knowledge of any event
or circumstance known by such person to constitute a Default, if
such Default is then continuing, a certificate of the principal
financial officer or the principal accounting officer of the
Borrower setting forth the details thereof and within five days
thereafter, a certificate of either of such officers setting forth
the action which the Borrower is taking or proposes to take with
respect thereto;
(e) promptly upon the mailing thereof to the shareholders of
the Borrower generally, copies of all financial statements, reports
and proxy statements so mailed;
(f) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent) and annual,
quarterly or monthly reports which the Borrower shall have filed
with the Securities and Exchange Commission;
(g) if and when the chief executive officer, chief operating
officer, principal financial officer or principal accounting
officer of the Borrower obtains knowledge that any member of the
ERISA Group (i) 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 knows 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; (ii)
has received notice of complete or partial withdrawal liability
under Title IV of ERISA or notice that any Multiemployer Plan is in
reorganization, is insolvent or has been terminated, a copy of such
notice; or (iii) has received notice from the PBGC under Title IV
of ERISA of an intent to terminate, impose liability (other than
for premiums under Section 4007 of ERISA) in respect of, or appoint
a trustee to administer any Plan, a copy of such notice;
(h) if at any time the value of all "margin stock" (as
defined in Regulation U) owned by the Borrower and its Consolidated
Subsidiaries exceeds (or would, following application of the
proceeds of an intended Loan hereunder, exceed) 25% of the value of
the total assets of the Borrower and its Consolidated Subsidiaries,
in each case as reasonably determined by the Borrower, prompt
notice of such fact; and
(i) from time to time such additional information regarding
the financial position or business of the Borrower as the Bank may
reasonably request; provided, however, that the
PAGE
Borrower shall be deemed to have satisfied its obligations under
clauses (a) and (b) above if and to the extent that the Borrower
has provided to the Bank pursuant to clause (f) the periodic
reports on Forms 10-Q and 10-K required to be filed by the Borrower
with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934, as amended, for the quarterly and
annual periods described in such clauses (a) and (b).
6.2 Maintenance of Property; Insurance.
(a) The Borrower will maintain or cause to be maintained in
good repair, working order and condition all properties used and
useful in the business of the Borrower 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 Borrower and its Consolidated Subsidiaries taken as a whole.
(b) The Borrower will maintain or cause to be maintained, for
itself and its Consolidated Subsidiaries, all to the extent
material to the Borrower 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
against risks 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.
6.3 Conduct of Business and Maintenance of Existence.
The Borrower will continue, and will cause each Consolidated
Subsidiary to continue, to engage predominantly in business of the
same general type as now conducted by the Borrower and its
Consolidated Subsidiaries, and, except as otherwise permitted by
Section 6.10 hereof, will preserve, renew and keep in full force
and effect, and will cause each Consolidated Subsidiary to
preserve, renew and keep in full force and effect their respective
corporate existence and their respective rights and franchises
necessary in the normal conduct of business, all to the extent
material to the Borrower and its Consolidated Subsidiaries taken as
a whole.
6.4 Compliance with Laws. The Borrower will comply, and
cause each Consolidated Subsidiary to comply, in all material
respects with all applicable laws, ordinances, rules, regulations,
and requirements of governmental authorities
PAGE
(including, without limitation, ERISA and the rules and regulations
thereunder and all federal, state and local statutes, laws or
regulations or other governmental restrictions relating to
environmental protection, hazardous substances or the cleanup or
other remediation thereof) 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 on the Borrower and its Consolidated Subsidiaries taken as
a whole.
6.5 Inspection of Property, Books and Records.
(a) The Borrower will keep, and will cause each Consolidated
Subsidiary to keep, proper books of record and account in
accordance with sound business practice so as to permit its
financial statements to be prepared in accordance with generally
accepted accounting principles; and will permit representatives of
the Bank at the Bank's expense to visit and inspect any of the
Borrower's properties, to examine and make abstracts from any of
the Borrower's corporate books and financial records and to discuss
the Borrower's affairs, finances and accounts with the principal
officers of the Borrower and its independent public accountants,
all at such reasonable times and as often as may reasonably be
necessary to ensure compliance by the Borrower with its obligations
hereunder.
(b) With the consent of the Borrower (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
Borrower will permit representatives of the Bank, at the Bank'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 Borrower's principal
officers and the Borrower's independent public accountants, all at
such reasonable times and as often as the Bank may reasonably
request.
6.6 Cash Flow to Total Borrowed Funds. The ratio of
Cash Flow to Total Borrowed Funds shall not be less than .30 for
any consecutive four quarters, such ratio to be calculated at the
end of each quarter on a trailing four quarter basis.
6.7 Total Borrowed Funds to Consolidated Net Worth.
Total Borrowed Funds will not exceed 85% of Consolidated Net Worth
at end of any quarter of any fiscal year.
6.8 Minimum Consolidated Net Worth. Consolidated Net
Worth will at no time be less than $550,000,000 plus 25% of the
PAGE
consolidated net income of the Borrower at the end of each fiscal
quarter for each fiscal year commencing after the fiscal year
ending December 31, 1994.
6.9 Negative Pledge. Neither the Borrower nor any
Consolidated Subsidiary will create, assume or suffer to exist any
Lien on any asset now owned or hereafter acquired by it, except
for:
(a) Liens existing on the date hereof;
(b) 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;
(c) 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 attaches to such
asset concurrently with or within 90 days after the acquisition
thereof;
(d) any Lien on any asset of any corporation existing at the
time such corporation is merged into or consolidated with the
Borrower or a Consolidated Subsidiary and not created in
contemplation of such event;
(e) any Lien existing on any asset prior to the acquisition
thereof by the Borrower or a Consolidated Subsidiary and not
created in contemplation of such acquisition;
(f) any Lien created in connection with capitalized lease
obligations, but only to the extent that such Lien encumbers
property financed by such capital lease obligation and the
principal component of such capitalized lease obligation is not
increased;
(g) 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 Borrower and
its Consolidated Subsidiaries, taken as a whole;
(h) 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;
(i) Liens securing taxes, assessments, fees or other
governmental charges or levies, Liens securing the claims of
materialmen, mechanics, carriers, landlords, warehousemen and
PAGE
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;
(j) Liens not otherwise permitted by the foregoing clauses of
this Section securing Debt in an aggregate principal amount at any
time outstanding not to exceed 10% of Consolidated Net Worth;
(k) any Liens on any asset of Quest & Associates, Inc., a
Subsidiary of Borrower, created in connection with the August 1995
investment by Quest & Associates, Inc. in a portfolio of computer
equipment leases; and
(l) any Liens on property arising in connection with a
securities repurchase transaction.
6.10 Consolidations, Mergers and Sales of Assets. The
Borrower will not (i) consolidate or merge with or into any other
Person (other than a Subsidiary of the Borrower) unless the
Borrower's shareholders immediately before the merger or
consolidation are to own more than 70% of the combined voting power
of the resulting entity's voting securities or (ii) sell, lease or
otherwise transfer all or substantially all of the Borrower's
business or assets to any other Person (other than a Subsidiary of
the Borrower). The Borrower will not permit any Significant
Subsidiary or (in a series of related transactions) any significant
Group of Subsidiaries to consolidate with, merge with or into or
transfer all of any substantial part of its assets to any Person
other than the Borrower or a Subsidiary of the Borrower.
6.11 Use of Proceeds. The proceeds of the Loans will be
used for general corporate purposes, including the making of
acquisitions. No part of the proceeds of any Loan hereunder will be
used, directly or indirectly, for the purpose, whether immediate,
incidental or ultimate of buying or carrying any "Margin stock" in
violation of Regulation U. If requested by the Bank, the Borrower
will furnish to the Bank in connection with any Loan hereunder a
statement in conformity with the requirements of Federal Reserve Form
U-1 referred to in Regulation U.
PAGE
SECTION 7
EVENTS OF DEFAULT
7.1 Events of Default. If any one or more of the
following events ("Events of Default") shall have occurred and be
continuing:
(a) the Borrower shall fail to pay (i) any principal of any
Loan when due or (ii) interest on any Loan or any commitment fee
within four days after the same has become due; or
(b) any Subsidiary Borrower shall fail to pay any principal
of or interest on any Subsidiary Loan when due and such failure
shall not be remedied by such Subsidiary Borrower or the Borrower
within four Domestic Business Days after written notice thereof
has been given to such Subsidiary Borrower and the Borrower by
the Bank; or
(c) the Borrower shall fail to observe or perform any
covenant contained in Section 6.1(d) or Sections 6.6 to 6.8 or
6.10 hereof; or
(d) the Borrower shall fail to observe or perform any
covenant or agreement contained in this Agreement (other than
those covered by clause (a) or (c) above) for 30 days after
written notice thereof has been given to the Borrower by the
Bank; or
(e) any representation, warranty or certification made by
the Borrower in this Agreement or in any certificate, financial
statement or other document delivered pursuant to this Agreement
shall prove to have been incorrect in any material respect upon
the date when made or deemed made; or
(f) (1) the Borrower or any Significant Subsidiary or
Significant Group of Subsidiaries defaults in any payment at any
stated maturity 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 (2) the Borrower or any Significant Subsidiary
or Significant Group of Subsidiaries defaults in any payment
other than at any stated maturity 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
PAGE
grace provided with respect thereto, or the Borrower 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
default with respect to a payment other than at any stated
maturity, 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
any such payment defaults (whether or not at stated maturity),
failures or other events shall have occurred and be continuing
exceeds $10,000,000 and provided, further, that it is understood
that the obligations referred to herein exclude those obligations
arising in connection with securities repurchase transactions; or
(g) the Borrower 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 shall make a general assignment
for the benefit of creditors, or shall fail generally to pay its
debts as they become due, or shall take any corporate action to
authorize any of the foregoing; or
(h) an involuntary case or other proceeding shall be
commenced against the Borrower 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 an order for relief shall be entered
against the Borrower or any Significant Subsidiary or Significant
Group of Subsidiaries under the federal bankruptcy laws as now or
hereafter in effect; or
(i) any member of the ERISA 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
PAGE
Section 6.4); or notice of intent to terminate a Material Plan
(other than any multiple employer plan within the meaning of
Section 4063 of ERISA) shall be filed under Title IV of ERISA by
any member of the ERISA Group, any plan administrator or any
combination of the foregoing; or the PBGC shall institute
proceedings under Title IV of ERISA to terminate, to impose
liability (other than for premiums under Section 4007 of ERISA)
in respect of, or to cause a trustee to be appointed to
administer any such Material Plan; or
(j) judgments or orders for the payment of money in excess
of $10,000,000 in the aggregate shall be rendered against the
Borrower or any Significant Subsidiary or Significant Group of
Subsidiaries and such judgments or orders shall continue
unsatisfied and unstayed for a period of 60 days; or
(k) any person or group of persons (within the meaning of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as
amended (the "1934 Act")), other than the Borrower or any of its
Subsidiaries, becomes the beneficial owner (within the meaning of
Rule 13d-3 under the 1934 Act) of 30% or more of the combined
voting power of the Borrower's then outstanding voting
securities; or a tender offer or exchange offer (other than an
offer by the Borrower or a Subsidiary) pursuant to which 30% or
more of the combined voting power of the Borrower's then
outstanding voting securities was purchased, expires; or during
any period of two consecutive years, individuals who, at the
beginning of such period, constituted the Board of Directors of
the Borrower cease for any reason to constitute at least a
majority thereof, unless the election or the nomination for the
election by the Borrower's stockholders of each new director was
approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of the
period;
then, and in every such event, (1) in the case of any of the
Events of Default specified in paragraphs (g) or (h) above,
the Commitment shall thereupon automatically be terminated
and the principal of and accrued interest on the Note shall
automatically become due and payable without presentment,
demand, protest or other notice or formality of any kind,
all of which are hereby expressly waived and (2) in the case
of any other Event of Default specified above, the Bank may,
by notice in writing to the Borrower, terminate the
Commitment hereunder, if still in existence, and it shall
thereupon be terminated, and the Bank may, by notice in
writing to the Borrower, declare the Note and all other sums
payable under this Agreement to be, and the same shall
thereupon forthwith become, due and payable without
presentment, demand, protest or other notice or formality of
any kind, all of which are hereby expressly waived.
PAGE
SECTION 8
MISCELLANEOUS
8.1 Notices. Unless otherwise specified herein all
notices, requests, demands or other communications to or from the
parties hereto shall be sent by United States mail, certified,
return receipt requested, telegram, telex or facsimile, and shall
be deemed to have been duly given upon receipt thereof. In the
case of a telex, receipt of such communication shall be deemed to
occur when the sender receives its answer back. In the case of a
facsimile, receipt of such communication shall be deemed to occur
when the sender confirms such receipt by telephone. Any such
notice, request, demand or communication shall be delivered or
addressed as follows:
(a ) if to the Borrower, to it at 1271 Avenue of the
Americas, New York, New York 10020; Attention: Vice President and
Treasurer (with a copy at the same address to the Vice President
and General Counsel);
(b) if to the Bank, communications relating to its
Eurodollar Loans (including without limitation any Sterling
Loans) shall be delivered or addressed to the address or telex
number set forth on the signature pages hereof for its Eurodollar
Lending Office and all other communications shall be delivered or
addressed to the address or telex number set forth on the
signature pages hereof for its Domestic Lending Office;
or at such other address or telex number as any party hereto may
designate by written notice to the other party hereto.
8.2 Amendments and Waivers; Cumulative Remedies.
(a) None of the terms of this Agreement may be waived,
altered or amended except by an instrument in writing duly
executed by the Borrower and the Bank.
(b) No failure or delay by the Bank in exercising any
right, power or privilege hereunder or under the Note shall
operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof
or the exercise of any other right, power or privilege. The
rights and remedies provided herein shall be cumulative and not
exclusive of any rights or remedies provided by law.
PAGE
8.3 Successors and Assigns.
(a) The provisions of this Agreement shall be binding
upon and shall inure to the benefit of the Borrower and the
Bank, except that the Borrower may not assign or otherwise
transfer any of its rights and obligations under this
Agreement except as provided in Section 2.15 and Section
6.10 hereof, without the prior written consent of the Bank
which the Bank shall not unreasonably delay or withhold.
(b) The Bank may at any time grant to one or more
banks or other institutions (each a "Participant")
participating interests in its Commitment or any or all of
its Loans. In the event of any such grant by the Bank of a
participating interest to a Participant, whether or not upon
notice to the Borrower the Bank shall remain responsible for
the performance of its obligations hereunder, and the
Borrower shall continue to deal solely and directly with the
Bank in connection with the Bank's rights and obligations
under this Agreement. Any agreement pursuant to which the
Bank may grant such a participating interest shall provide
that the Bank shall retain the sole right and responsibility
to enforce the obligations of the Borrower hereunder
including, without limitation, the right to approve any
amendment, modification or waiver of any provision of this
Agreement; provided that such participation agreement may
provide that the Bank will not agree to any modification,
amendment or waiver of this Agreement (i) which increases or
decreases the Commitment of the Bank (ii) reduces the
principal of or rate of interest on any Loan or fees hereunder
or (iii) postpones the date fixed for any payment of principal
of or interest on any Loan or any fees hereunder without the
consent of the Participant. The Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.12
and 4 with respect to its participating interest.
(c) The Bank may at any time assign all or any portion
of its rights under this Agreement and the Note or Notes to a
Federal Reserve Bank. No such assignment shall release the
Bank from its obligations hereunder.
(d) No Participant or other transferee of the Bank's
rights shall be entitled to receive any greater payment under
Sections 2.12, 4.1 through 4.3 or 8.5 than the Bank would have
been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Borrower's
prior written consent or by reason of the provisions of
Section 4.3(c) or 8.5(c) requiring the Bank to designate a
different Applicable Lending Office under certain
circumstances or at a time when the circumstances giving rise
to such greater payment did not exist.
PAGE
8.4 Expenses; Documentary Taxes; Indemnification.
(a) The Borrower shall pay (i) all out-of-pocket
expenses and internal charges of the Bank (including reasonable
fees and disbursements of counsel) in connection with any Default
hereunder and (ii) if there is an Event of Default, all
out-of-pocket expenses incurred by the Bank (including reasonable
fees and disbursements of counsel) in connection with such Event of
Default and collection and other enforcement proceedings resulting
therefrom. The Borrower shall indemnify the Bank against any
transfer taxes, documentary taxes, assessments or charges made by
any governmental authority by reason of the execution and delivery
of this Agreement or the Note.
(b) The Borrower agrees to indemnify the Bank and hold
the Bank harmless from and against any and all liabilities, losses,
damages, costs and expenses of any kind (including, without
limitation, the reasonable fees and disbursements of counsel for
the Bank in connection with any investigative, administrative or
judicial proceeding, whether or not the Bank shall be designated a
party thereto) which may be incurred by the Bank relating to or
arising out of any actual or proposed use of proceeds of Loans
hereunder or any merger or acquisition involving the Borrower;
provided, that the Bank shall not have the right to be indemnified
hereunder for its own gross negligence or willful misconduct as
determined by a court of competent jurisdiction.
8.5 Withholding Taxes.
(a) With respect to any Loan as to which the Bank's
Applicable Lending Office is located outside the United States, all
payments by the Borrower to the Bank under this Agreement are to be
made free and clear of any and all taxes, duties, imposts, fees,
withholdings or deductions (the "Deductions") of any nature now or
hereafter imposed by the United States of America or any political
subdivision or taxing authority thereof or therein. If any
Deduction is, by law, required to be made from any payment
hereunder, then the Borrower shall (i) made such Deduction, (ii)
pay the amount of such Deduction to the relevant taxing authority
and (iii) pay to the Bank such additional amount as will result in
receipt by the Bank of a net amount equal to the amount the Bank
would have received hereunder had no such Deduction been required,
provided that the Borrower shall not be required to pay any such
additional amount (A) in respect of any tax imposed on the net
income of the Bank by the jurisdiction under the laws of which the
Bank is organized or where its principal place of business or
Applicable Lending Office is located, or any political subdivision
or taxing authority thereof or therein, or (B) to the extent such
Deduction is required as a result of the Bank's failure to comply
with its obligations pursuant to Section 8.5(b) hereof. In the
event such Deduction is so required to be made from any payment
PAGE
hereunder, the Borrower shall, as soon as practicable, deliver to
the Bank any receipts issued by the relevant taxing authority
evidencing the amount of such Deduction and its payment.
(b) The Bank agrees to complete and deliver to the Borrower,
prior to the date on which the first payment to the Bank is due
under any Loan made hereunder and (so long as it remains eligible
to do so) from time to time thereafter, (i) with respect to any
Loan as to which the Bank's Applicable Lending Office is located
outside the United States, an Internal Revenue Service Form 1001
certifying that it is entitled to benefits under an income tax
treaty to which the United States is a party that reduces the rate
of withholding tax on payments of interest to zero or (ii) with
respect to any Loan as to which the Bank's Applicable Lending
Office is located in the United States, an Internal Revenue Service
Form 4224 in duplicate certifying that the income receivable
pursuant to this Agreement is effectively connected with the
conduct of a trade or business in the United States. The Bank
further agrees to complete and deliver to the Borrower from time to
time, so long as it is eligible to do so, any successor or
additional form required by the Internal Revenue Service in order
to secure an exemption from, or reduction in the rate of, U.S.
withholding tax.
(c) The Bank agrees that if the Borrower is required to pay
any additional amounts pursuant to Section 8.5(a) hereof in respect
of any Loan, the Bank will, upon the request of the Borrower,
designate a different Applicable Lending Office if such designation
will reduce the amount of the Deductions required to be made by the
Borrower and will not otherwise be materially disadvantageous to
the Bank.
8.6 Counterparts. This Agreement may be signed in any
number of counterparts with the same effect as if the signatures
thereto and hereto were upon the same instrument.
8.7 Headings; Table of Contents. The section and
subsection headings used herein and the Table of Contents have been
inserted for convenience of reference only and do not constitute
matters to be considered in interpreting this Agreement.
8.8 Governing Law. This Agreement, the Note and the
Subsidiary Note shall be construed in accordance with and governed
by the law of the State of New York.
PAGE
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed and delivered by their proper and duly authorized
officers as of June 25, 1996.
THE INTERPUBLIC GROUP OF COMPANIES, INC.
By: ALAN M. FORSTER
Title: Vice President & Treasurer
CHEMICAL BANK
By: THOMAS J. COX
Title: Vice President
Domestic and Eurodollar Lending Offices
Chemical Bank
270 Park Avenue
New York, NY 10020
Attn.: Mr. Fred Vagnini
Tel #: 212-622-4083
Tel #: 212-332-4370
Fed Wire: ABA #021000128
Acct.: Chemical Bank
270 Park Avenue
New York, NY 10020
PAGE
EXHIBIT A
NOTE
June 25, 1996
New York, New York
FOR VALUE RECEIVED, THE INTERPUBLIC GROUP OF COMPANIES,
INC., a Delaware corporation (the "Borrower"), hereby promises to
pay to the order of CHEMICAL BANK (the "Bank"), for the account of
its Applicable Lending Office, the unpaid principal amount of each
Loan made by the Bank to the Borrower pursuant to the Credit
Agreement referred to below on the last day of the Interest Period
relating to such Loan. The Borrower promises to pay interest on
the unpaid principal amount of each such Loan on the dates and at
the rate or rates provided for in the Credit Agreement.
All such payments of principal and interest shall be
made in lawful money of the United States of America in Federal or
other immediately available funds at the office of the Bank located
at 270 Park Avenue, New York, NY 10020.
All Loans made by the Bank, the respective maturities
thereof and all repayments of the principal thereof shall be
recorded by the Bank and, prior to any transfer hereof, endorsed by
the Bank on the schedule attached hereto, or on a continuation of
such schedule attached to and made a part hereof; provided that the
failure of the Bank to make any such recordation or endorsement
shall not affect the obligations of the Borrower hereunder or under
the Credit Agreement.
This note is the Note referred to in the Credit
Agreement dated as of June 25, 1996 between the Borrower and the
Bank (as the same may be amended from time to time, the "Credit
Agreement"). Terms defined in the Credit Agreement are used herein
with the same meanings. Reference is made to the Credit Agreement
for provisions for the prepayment hereof and the acceleration of
the maturity hereof.
THE INTERPUBLIC GROUP OF COMPANIES, INC.
By: Alan M. Forster
Title: Vice President & Treasurer
PAGE
LOANS AND PAYMENTS OF PRINCIPAL
Amount of
Amount Type Principal Maturity Notation
Date of Loan of Loan Repaid Date Made By
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
PAGE
EXHIBIT B
MONEY MARKET NOTE
June 25, 1996
New York, New York
FOR VALUE RECEIVED, THE INTERPUBLIC GROUP OF COMPANIES,
INC., a Delaware corporation (the "Borrower"), hereby promises to
pay to the order of CHEMICAL BANK (the "Bank"), for the account of
its Domestic Lending Office, Money Market Rate Loans made by the
Bank to the Borrower pursuant to the Credit Agreement referred to
below upon such terms and conditions as may be agreed upon pursuant
to said Credit Agreement. The Borrower promises to pay interest on
the unpaid principal amount of each such Loan on the dates and at
the rate or rates provided for in the Credit Agreement.
All such payments of principal and interest shall be
made in lawful money of the United States of America in Federal or
other immediately available funds at the office of the Bank located
at 270 Park Avenue, New York, NY 10020.
All Money Market Loans made by the Bank, the respective
maturities thereof and all repayments of the principal thereof
shall be recorded by the Bank and, prior to any transfer hereof,
endorsed by the Bank on the schedule attached hereto, or on a
continuation of such schedule attached to and made a part hereof;
provided that the failure of the Bank to make any such recordation
or endorsement shall not affect the obligations of the Borrower
hereunder or under the Credit Agreement.
This note is one of the Money Market Notes referred to
in the Credit Agreement dated as of June 25, 1996, between the
Borrower and the Bank (as the same may be amended from time to
time, the "Credit Agreement"). Terms defined in the Credit
Agreement are used herein with the same meanings. Reference is
made to the Credit Agreement for provisions for the prepayment
hereof and the acceleration of the maturity hereof.
THE INTERPUBLIC GROUP OF COMPANIES, INC.
By: Alan M. Forster
Title: Vice Presient & Treasurer
PAGE
LOANS AND PAYMENTS OF PRINCIPAL
Amount of
Amount Type Principal Maturity Notation
Date of Loan of Loan Repaid Date Made By
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
PAGE
EXHIBIT C
NOTE
June 25, 1996
New York, New York
FOR VALUE RECEIVED, DraftDirect Worldwide, Inc., a
Delaware corporation (the "Subsidiary Borrower"), hereby promises
to pay to the order of CHEMICAL BANK (the "Bank"), for the account
of its Applicable Lending Office, the unpaid principal amount of
each Subsidiary Loan made by the Bank to the Subsidiary Borrower
pursuant to Section 2.15 of the Credit Agreement referred to below
on the last day of the Interest Period relating to such Subsidiary
Loan. The Subsidiary Borrower promises to pay interest on the
unpaid principal amount of each such Subsidiary Loan on the dates
and at the rate or rates provided for in the Credit Agreement.
All such payments of principal and interest shall be
made in lawful money of the United States of America in Federal or
other immediately available funds at the office of the Bank located
at 270 Park Avenue, New York, NY 10020.
All Subsidiary Loans made by the Bank, the respective
maturities thereof and all repayments of the principal thereof
shall be recorded by the Bank and, prior to any transfer hereof,
endorsed by the Bank on the schedule attached hereto, or on a
continuation of such schedule attached to and made a part hereof;
provided that the failure of the Bank to make any such recordation
or endorsement shall not affect the obligations of the Subsidiary
Borrower hereunder or under the Credit Agreement.
This note is the Subsidiary Note referred to in Section
2.14 of the Credit Agreement dated as of June 25, 1996 between The
Interpublic Group of Companies, Inc. and the Bank (as the same may
be amended from time to time, the "Credit Agreement"). Terms
defined in the Credit Agreement are used herein with the same
meanings. Reference is made to the Credit Agreement for provisions
for the prepayment hereof and the acceleration of the maturity
hereof.
DraftDirect Worldwide, Inc.
By: Daniel E. Ginsburg
Title: President
PAGE
LOANS AND PAYMENTS OF PRINCIPAL
Amount of
Amount Type Principal Maturity Notation
Date of Loan of Loan Repaid Date Made By
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
PAGE
GUARANTY
The Interpublic Group of Companies, Inc. (the
"Guarantor") hereby unconditionally guarantees to the Bank the due
and punctual payment of the principal of, and interest on, the Note
upon which this Guaranty is endorsed (the "Note"). The foregoing
is an absolute, continuing and irrevocable guaranty of payment and
not of collectibility or performance. The Guarantor hereby waives
diligence, presentment and demand of payment (except as provided in
the Credit Agreement) and covenants that this Guaranty will not be
discharged except by payment as herein provided. Until all amounts
of principal of, and interest on, the Note have been paid or
otherwise satisfied in full, the Guarantor will not exercise any
rights that it may have acquired by way of subrogation under this
Guaranty, by any payment made hereunder or otherwise, or accept any
payment on account of such subrogation rights. If any payment (or
part thereof) of the principal of, or interest on, the Note is
rescinded or must otherwise be returned by the Bank upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization
of the primary obligor under the Note, this Guaranty shall continue
to be effective, or be reinstated, as to said payment (or part
thereof) as if such payment (or part thereof) had not been made.
THE INTERPUBLIC GROUP OF COMPANIES, INC.
By: Alan M. Forster
Title: Vice President
Exhibit 10(d)
NOTE
June 25, 1996
New York, New York
FOR VALUE RECEIVED, THE INTERPUBLIC GROUP OF COMPANIES,
INC., a Delaware corporation (the "Borrower"), hereby promises to
pay to the order of CHEMICAL BANK (the "Bank"), for the account
of its Applicable Lending Office, the unpaid principal amount of
each Loan made by the Bank to the Borrower pursuant to the Credit
Agreement referred to below on the last day of the Interest
Period relating to such Loan. The Borrower promises to pay
interest on the unpaid principal amount of each such Loan on the
dates and at the rate or rates provided for in the Credit
Agreement.
All such payments of principal and interest shall be
made in lawful money of the United States of America in Federal
or other immediately available funds at the office of the Bank
located at 270 Park Avenue, New York, NY 10020.
All Loans made by the Bank, the respective maturities
thereof and all repayments of the principal thereof shall be
recorded by the Bank and, prior to any transfer hereof, endorsed
by the Bank on the schedule attached hereto, or on a continuation
of such schedule attached to and made a part hereof; provided
that the failure of the Bank to make any such recordation or
endorsement shall not affect the obligations of the Borrower
hereunder or under the Credit Agreement.
This note is the Note referred to in the Credit
Agreement dated as of June 25, 1996 between the Borrower and the
Bank (as the same may be amended from time to time, the "Credit
Agreement"). Terms defined in the Credit Agreement are used
herein with the same meanings. Reference is made to the Credit
Agreement for provisions for the prepayment hereof and the
acceleration of the maturity hereof.
THE INTERPUBLIC GROUP OF COMPANIES, INC.
By: Alan M. Forster
Title: Vice President & Treasurer
PAGE
LOANS AND PAYMENTS OF PRINCIPAL
Amount of
Amount Type Principal Maturity Notation
Date of Loan of Loan Repaid Date Made By
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
Exhibit 10(e)
MONEY MARKET NOTE
June 25, 1996
New York, New York
FOR VALUE RECEIVED, THE INTERPUBLIC GROUP OF COMPANIES,
INC., a Delaware corporation (the "Borrower"), hereby promises to
pay to the order of CHEMICAL BANK (the "Bank"), for the account
of its Domestic Lending Office, Money Market Rate Loans made by
the Bank to the Borrower pursuant to the Credit Agreement
referred to below upon such terms and conditions as may be agreed
upon pursuant to said Credit Agreement. The Borrower promises to
pay interest on the unpaid principal amount of each such Loan on
the dates and at the rate or rates provided for in the Credit
Agreement.
All such payments of principal and interest shall be
made in lawful money of the United States of America in Federal
or other immediately available funds at the office of the Bank
located at 270 Park Avenue, New York, NY 10020.
All Money Market Loans made by the Bank, the respective
maturities thereof and all repayments of the principal thereof
shall be recorded by the Bank and, prior to any transfer hereof,
endorsed by the Bank on the schedule attached hereto, or on a
continuation of such schedule attached to and made a part hereof;
provided that the failure of the Bank to make any such
recordation or endorsement shall not affect the obligations of
the Borrower hereunder or under the Credit Agreement.
This note is one of the Money Market Notes referred to
in the Credit Agreement dated as of June 25, 1996, between the
Borrower and the Bank (as the same may be amended from time to
time, the "Credit Agreement"). Terms defined in the Credit
Agreement are used herein with the same meanings. Reference is
made to the Credit Agreement for provisions for the prepayment
hereof and the acceleration of the maturity hereof.
THE INTERPUBLIC GROUP OF COMPANIES, INC.
By: Alan M. Forster
Title: Vice Presient & Treasurer
PAGE
LOANS AND PAYMENTS OF PRINCIPAL
Amount of
Amount Type Principal Maturity Notation
Date of Loan of Loan Repaid Date Made By
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
Exhibit 10(f)
NOTE
June 25, 1996
New York, New York
FOR VALUE RECEIVED, DraftDirect Worldwide, Inc., a
Delaware corporation (the "Subsidiary Borrower"), hereby promises
to pay to the order of CHEMICAL BANK (the "Bank"), for the
account of its Applicable Lending Office, the unpaid principal
amount of each Subsidiary Loan made by the Bank to the Subsidiary
Borrower pursuant to Section 2.15 of the Credit Agreement
referred to below on the last day of the Interest Period relating
to such Subsidiary Loan. The Subsidiary Borrower promises to pay
interest on the unpaid principal amount of each such Subsidiary
Loan on the dates and at the rate or rates provided for in the
Credit Agreement.
All such payments of principal and interest shall be
made in lawful money of the United States of America in Federal
or other immediately available funds at the office of the Bank
located at 270 Park Avenue, New York, NY 10020.
All Subsidiary Loans made by the Bank, the respective
maturities thereof and all repayments of the principal thereof
shall be recorded by the Bank and, prior to any transfer hereof,
endorsed by the Bank on the schedule attached hereto, or on a
continuation of such schedule attached to and made a part hereof;
provided that the failure of the Bank to make any such
recordation or endorsement shall not affect the obligations of
the Subsidiary Borrower hereunder or under the Credit Agreement.
This note is the Subsidiary Note referred to in Section
2.14 of the Credit Agreement dated as of June 25, 1996 between
The Interpublic Group of Companies, Inc. and the Bank (as the
same may be amended from time to time, the "Credit Agreement").
Terms defined in the Credit Agreement are used herein with the
same meanings. Reference is made to the Credit Agreement for
provisions for the prepayment hereof and the acceleration of the
maturity hereof.
DraftDirect Worldwide, Inc.
By: Daniel E. Ginsburg
Title: President
PAGE
LOANS AND PAYMENTS OF PRINCIPAL
Amount of
Amount Type Principal Maturity Notation
Date of Loan of Loan Repaid Date Made By
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
Exhibit 10(g)
GUARANTY
The Interpublic Group of Companies, Inc. (the
"Guarantor") hereby unconditionally guarantees to the Bank the
due and punctual payment of the principal of, and interest on,
the Note upon which this Guaranty is endorsed (the "Note"). The
foregoing is an absolute, continuing and irrevocable guaranty of
payment and not of collectibility or performance. The Guarantor
hereby waives diligence, presentment and demand of payment
(except as provided in the Credit Agreement) and covenants that
this Guaranty will not be discharged except by payment as herein
provided. Until all amounts of principal of, and interest on,
the Note have been paid or otherwise satisfied in full, the
Guarantor will not exercise any rights that it may have acquired
by way of subrogation under this Guaranty, by any payment made
hereunder or otherwise, or accept any payment on account of such
subrogation rights. If any payment (or part thereof) of the
principal of, or interest on, the Note is rescinded or must
otherwise be returned by the Bank upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the
primary obligor under the Note, this Guaranty shall continue to
be effective, or be reinstated, as to said payment (or part
thereof) as if such payment (or part thereof) had not been made.
THE INTERPUBLIC GROUP OF COMPANIES, INC.
By: Alan M. Forster
Title: Vice President