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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended Commission file number
December 31, 1999 1-6686
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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)
Registrant's telephone number, including area code: (212) 399-8000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
- ------------------- ------------------------
Common Stock New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X . No .
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of Registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. X .
---
The aggregate market value of the registrant's voting stock (exclusive of shares
beneficially owned by persons referred to in response to Item 12 hereof) was
$12,170,836,232 as of March 23, 2000.
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
Common Stock outstanding at March 23, 2000: 287,967,109 shares.
DOCUMENTS INCORPORATED BY REFERENCE
1. Portions of the Annual Report to Stockholders for the year ended December
31, 1999 are incorporated by reference in Parts I and II.
2. Portions of the Proxy Statement for the 2000 Annual Meeting of Stockholders
are incorporated by reference in Parts I and III.
PART I
Item 1. Business
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The Interpublic Group of Companies, Inc. was incorporated in Delaware
in September 1930 under the name of McCann-Erickson Incorporated as the
successor to the advertising agency businesses founded in 1902 by A.W. Erickson
and in 1911 by Harrison K. McCann. It has operated under the Interpublic name
since January 1961. As used in this Annual Report, the "Registrant" or
"Interpublic" refers to The Interpublic Group of Companies, Inc. while the
"Company" refers to Interpublic and its subsidiaries.
The advertising agency business is the primary business of the Company.
This business is conducted throughout the world primarily through two
advertising agency systems, McCann-Erickson WorldGroup and The Lowe Group, plus
a number of standalone local agencies. Interpublic also carries on an
independent media buying business through its ownership of Initiative Media
Worldwide and its affiliates, as well as a separate relationship (direct)
marketing business through its ownership of DraftWorldwide, a global public
relations capability through International Public Relations, an internet and
business consultancy through its Zentropy Partners, and a multi-national sports
and event marketing organization, Octagon. The Company also offers advertising
agency services through association arrangements with local agencies in various
parts of the world. Other activities conducted by the Company within the area of
"marketing communications" include brand equity and corporate identity services,
management consulting, healthcare marketing, market research, sales promotion,
internet services, sales meetings and events, multicultural advertising and
promotion, and other related specialized marketing and communications services.
The principal functions of an advertising agency are to plan and create
advertising programs for its clients and to place advertising in various media
such as television, cinema, radio, magazines, newspapers, direct mail, outdoor
and interactive electronic media. The planning function involves analysis of the
market for the particular product or service, evaluation of alternative methods
of distribution and choice of the appropriate media to reach the desired market
most efficiently. The advertising agency develops a communications strategy and
then creates an advertising program, within the limits imposed by the client's
advertising budget, and places orders for space or time with the media that have
been selected.
The principal advertising agency subsidiaries of Interpublic operating
within the United States directly or through subsidiaries and the locations of
their respective corporate headquarters are:
Campbell-Ewald Company............ Detroit (Warren), Michigan
Campbell Mithun Esty LLC.......... Minneapolis, Minnesota
Dailey & Associates, Inc.......... Los Angeles, California
DraftWorldwide, Inc............... Chicago, Illinois
Hill, Holliday, Connors,
Cosmopulos, Inc................. Boston, Massachusetts
International Public Relations. Inc. New York, New York, and London, England
Lowe Lintas & Partners.......... New York, New York
McCann-Erickson USA, Inc.......... New York, New York
Zentropy Partners, Inc............ Cambridge, Massachusetts
In addition to domestic operations, the Company provides services for
clients whose business is international in scope as well as for clients whose
business is restricted to a single country or a small number of countries. It
has offices in Canada as well as in one or more cities in each of the following
countries:
EUROPE, AFRICA AND THE MIDDLE EAST
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Austria Germany Morocco Slovakia
Azerbaijan Greece Namibia Slovenia
Bahrain Hungary Netherlands South Africa
Belgium Israel Nigeria Spain
Bulgaria Ireland Norway Sweden
Cameroon Italy Oman Switzerland
Croatia Ivory Coast Pakistan Tunisia
Czech Republic Jordan Poland Turkey
Denmark Kazakhstan Portugal Ukraine
Egypt Kenya Qatar United Arab Emirates
Estonia Kuwait Romania United Kingdom
Finland Lebanon Russia Uzbekistan
France Mauritius Saudi Arabia Zambia
Senegal Zimbabwe
LATIN AMERICA AND THE CARIBBEAN
-------------------------------
Argentina Colombia Guatemala Peru
Barbados Costa Rica Honduras Puerto Rico
Bermuda Dominican Republic Jamaica Trinidad
Brazil Ecuador Mexico Uruguay
Chile El Salvador Panama Venezuela
ASIA AND THE PACIFIC
--------------------
Australia Korea Philippines Taiwan
Hong Kong Malaysia Singapore Thailand
India Nepal Sri Lanka Vietnam
Indonesia New Zealand South Korea
Japan People's Republic
of China
Operations in the foregoing countries are carried on by one or more
operating companies, at least one of which is either wholly owned by Interpublic
or a subsidiary or is a company in which Interpublic or a subsidiary owns a 51%
interest or more, except in Malawi and Nepal, where Interpublic or a subsidiary
holds a minority interest.
The Company also offers services in Albania, Aruba, the Bahamas,
Belize, Bolivia, Cambodia, Gabon, Ghana, Grand Cayman, Guadeloupe, Guam, Guyana,
Haiti, Reunion, Ivory Coast, Martinique, Nicaragua, Nigeria, Paraguay, Surinam,
Uganda and Zaire through association arrangements with local agencies operating
in those countries.
For information concerning revenues and long-lived assets on a
geographical basis for each of the last three years, reference is made to Note
12: Geographic Areas of the Notes to the Consolidated Financial Statements in
the Company's Annual Report to Stockholders for the year ended December 31,
1999, which Note is hereby incorporated by reference.
Developments in 1999
- --------------------
The Company completed a number of acquisitions within the United States
and abroad in 1999.
See Note 4 to the Consolidated Financial Statements incorporated by
reference in this Report on Form 10-K for a discussion of acquisitions.
Income from Commissions and Fees
- --------------------------------
The Company generates income from planning, creating and placing
advertising in various media and from planning and executing other
communications or marketing programs. Historically, the commission customary in
the industry was 15% of the gross charge ("billings") for advertising space or
time; more recently lower commissions have been negotiated, but often with
additional incentives for better performance. For example, an incentive
component is frequently included in arrangements with clients based on
improvements in an advertised brand's awareness or image, or increases in a
client's sales or market share of the products or services being advertised.
Under commission arrangements, media bill the Company at their gross rates. The
Company bills these amounts to its clients, remits the net charges to the media
and retains the balance as its commission. Some clients, however, prefer to
compensate the Company on a fee basis, under which the Company bills its client
for the net charges billed by the media plus an agreed-upon fee. These fees
usually are calculated to reflect the Company's salary costs and out-of-pocket
expenses incurred on the client's behalf, plus proportional overhead and a
profit mark-up.
Normally, the Company, like other agencies, is primarily responsible
for paying the media with respect to firm contracts for advertising time or
space. This is a problem only if the client is unable to pay the Company because
of insolvency or bankruptcy. The Company makes serious efforts to reduce the
risk from a client's insolvency, including (1) carrying out credit clearances,
(2) requiring in some cases payment of media in advance, or (3) agreeing with
the media that the Company will be solely liable to pay the media only after the
client has paid the Company for the media charges.
The Company also receives commissions from clients for planning and
supervising work done by outside contractors in the physical preparation of
finished print advertisements and the production of television and radio
commercials and other forms of advertising. This commission is customarily
17.65% of the outside contractor's net charge, which is the same as 15% of the
outside contractor's total charges including commission. With the expansion of
negotiated fees, the terms on which outstanding contractors' charges are billed
are subject to wide variations and even include in some instances the
elimination of commissions entirely provided that there are adequate negotiated
fees.
The Company also derives income in many other ways, including the
planning and placement in media of advertising produced by unrelated advertising
agencies; the maintenance of specialized media placement facilities; the
creation and publication of brochures, billboards, point of sale materials and
direct marketing pieces for clients; the planning and carrying out of
specialized marketing research; developments/public relations campaigns,
managing special events at which clients' products are featured; and designing
and carrying out interactive programs for special uses.
The five clients of the Company that made the largest contribution in
1999 to income from commissions and fees accounted individually for 1.8% to 8.0%
of such income and in the aggregate accounted for over approximately 18% of such
income. Twenty clients of the Company accounted for approximately 28% of such
income. Based on income from commissions and fees, the three largest clients of
the Company are General Motors Corporation, Nestle and Unilever. General Motors
Corporation first became a client of one of the Company's agencies in 1916 in
the United States. Predecessors of several of the Lintas agencies have supplied
advertising services to Unilever since 1893. The client relationship with Nestle
began in 1940 in Argentina. While the loss of the entire business of one of the
Company's three largest clients might have a material adverse effect upon the
business of the Company, the Company believes that it is very unlikely that the
entire business of any of these clients would be lost at the same time, because
it represents several different brands or divisions of each of these clients in
a number of geographical markets - in each case through more than one of the
Company's agency systems.
Representation of a client rarely means that the Company handles
advertising for all brands or product lines of the client in all geographical
locations. Any client may transfer its business from an advertising agency
within the Company to a competing agency, and a client may reduce its
advertising budget at any time.
The Company's agencies in many instances have written contracts with
their clients. As is customary in the industry, these contracts provide for
termination by either party on relatively short notice, usually 90 days but
sometimes shorter or longer. In 1999, however, 23% of income from commissions
and fees was derived from clients that had been associated with one or more of
the Company's agencies or their predecessors for 20 or more years.
Personnel
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As of January 1, 2000, the Company employed approximately 38,600
persons, of whom nearly 16,200 were employed in the United States. Because of
the personal service character of the marketing communications business, the
quality of personnel is of crucial importance to continuing success. There is
keen competition for qualified employees. Interpublic considers its employee
relations to be satisfactory.
The Company has an active program for training personnel. The program
includes meetings and seminars throughout the world. It also involves training
personnel in its offices in New York and in its larger offices worldwide.
Competition and Other Factors
- -----------------------------
The advertising agency and other marketing communications businesses
are highly competitive. The Company's agencies and media services must compete
with other agencies and with other providers of creative or media services which
are not themselves advertising agencies, in order to maintain existing client
relationships and to obtain new clients. Competition in the advertising agency
business depends to a large extent on the client's perception of the quality of
an agency's "creative product". An agency's ability to serve clients,
particularly large international clients, on a broad geographic basis is also an
important competitive consideration. On the other hand, because an agency's
principal asset is its people, freedom of entry into the business is almost
unlimited and quite small agencies are, on occasion, able to take all or some
portion of a client's account from a much larger competitor.
Moreover, increasing size bring some limitations to an agency's
potential for securing new business, because many clients prefer not to be
represented by an agency that represents a competitor. Also, clients frequently
wish to have different products represented by different agencies. The fact that
the Company owns two separate worldwide agency systems and interests in other
advertising agencies gives it additional competitive opportunities.
The advertising and marketing communications businesses is subject to
government regulation, both domestic and foreign. There has been an increasing
tendency in the United States on the part of advertisers to resort to the
courts, industry and self-regulatory bodies to challenge comparative advertising
on the grounds that the advertising is false and deceptive. Through the years,
there has been a continuing expansion of specific rules, prohibitions, media
restrictions, labeling disclosures and warning requirements with respect to the
advertising for certain products. Representatives within state governments and
the federal government as well as foreign governments continue to initiate
proposals to ban the advertising of specific products and to impose taxes on or
deny deductions for advertising which, if successful, may have an adverse effect
on advertising expenditures.
Some countries are relaxing commercial restrictions as part of their
efforts to attract foreign investment. However, with respect to other nations,
the international operations of the Company still remain exposed to certain
risks which affect foreign operations of all kinds, such as local legislation,
monetary devaluation, exchange control restrictions and unstable political
conditions. In addition, international advertising agencies are still subject to
ownership restrictions in certain countries because they are considered an
integral factor in the communications process.
Statement Regarding Forward Looking Disclosure
- ----------------------------------------------
Certain sections of this report, including "Business", "Competition and
Other Factors" and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" contain forward looking statements concerning future
events and developments that involve risks and uncertainties, including those
associated with the effect of national and regional economic conditions, the
ability of the Company to attract new clients and retain existing clients, the
financial success of clients of the Company, other developments of clients of
the Company, and developments from changes in the regulatory and legal
environment for advertising agencies around the world.
Item 2. Properties
----------
Most of the operations of the Company are conducted in leased premises,
and its physical property consists primarily of leasehold improvements,
furniture, fixtures and equipment. These facilities are located in various
cities in which the Company does business throughout the world. However,
subsidiaries of the Company own office buildings in Louisville, Kentucky; Blair,
Nebraska; Warren, Michigan; Frankfurt, Germany; Sao Paulo, Brazil; Lima, Peru;
Mexico City, Mexico; Santiago, Chile; and Brussels, Belgium and own office
condominiums in Buenos Aires, Argentina; Bogota, Colombia; Manila, the
Philippines; in England, subsidiaries of the Company own office buildings in
London, Manchester, Birmingham and Stoke-on-Trent.
The Company's ownership of the office building in Frankfurt is subject
to three mortgages which became effective on or about February 1993. These
mortgages terminate at different dates, with the last to expire in February
2003. Reference is made to Note 10: Long-Term Debt, of the Notes to the
Consolidated Financial Statements in the Company's Annual Report to Stockholders
for the year ended December 31, 1999, which Note is hereby incorporated by
reference.
Item 3. Legal Proceedings
-----------------
Neither the Company nor any of its subsidiaries are subject to any
pending material legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
Not applicable.
Executive Officers of the Registrant
- ------------------------------------
There follows the information disclosed in accordance with Item 401 of
Regulation S-K of the Securities and Exchange Commission (the "Commission") as
required by Item 10 of Form 10-K with respect to executive officers of the
Registrant.
Name Age Office
- ---- --- ------
Philip H. Geier, Jr.(1) 65 Chairman of the Board, President
and Chief Executive Officer
Sean F. Orr(1) 45 Executive Vice President, Chief
Financial Officer
Nicholas J. Camera 53 Senior Vice President, General
Counsel and Secretary
John J. Dooner, Jr.(1) 51 Chairman and Chief Executive
Officer of McCann-Erickson
WorldGroup
C. Kent Kroeber 61 Senior Vice President-Human
Resources
Barry R. Linsky 58 Senior Vice President-Planning
and Business Development
Frank B. Lowe(1) 58 Chairman of the Board and Chief
Executive Officer of Lowe Lintas & Partners
Frederick Molz 43 Vice President and Controller
Thomas J. Volpe 64 Senior Vice President-Financial Operations
- ----------
[FN]
(1) Also a Director
</FN>
There is no family relationship among any of the executive officers.
The employment histories for the past five years of Messrs. Geier,
Dooner, Lowe and Orr are incorporated by reference to the Proxy Statement for
Interpublic's 2000 Annual Meeting of Stockholders.
Mr. Camera joined Interpublic in May, 1993. He was elected Vice
President, Assistant General Counsel and Assistant Secretary in June, 1994, Vice
President, General Counsel and Secretary in December, 1995, and Senior Vice
President, General Counsel and Secretary in February, 2000.
Mr. Kroeber joined Interpublic in January, 1966 as Manager of
Compensation and Training. He was elected Vice President in 1970 and Senior Vice
President in May, 1980.
Mr. Linsky joined Interpublic in January, 1991 when he was elected
Senior Vice President-Planning and Business Development. Prior to that time, he
was Executive Vice President, Account Management of Lowe & Partners, Inc. Mr.
Linsky was elected to that position in July, 1980, when the corporation was
known as The Marschalk Company and was a subsidiary of Interpublic.
Mr. Molz was elected Vice President and Controller of Interpublic
effective January, 1999. He joined Interpublic in August, 1982, and his most
recent position was Senior Vice President-Financial Operations of Ammirati Puris
Lintas Worldwide, a subsidiary of Interpublic, since April, 1994. He also held
previous positions in the Interpublic Controller's Department and Tax
Department.
Mr. Volpe joined Interpublic in March, 1986. He was appointed Senior
Vice President-Financial Operations in March, 1986. He served as Treasurer from
January 1, 1987 through May 17, 1988 and the Treasurer's office continues to
report to him.
PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
-----------------------------------------------------------------
Matters
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The response to this Item is incorporated:
(i) by reference to the Registrant's Annual Report to Stockholders for
the year ended December 31, 1999. See the heading: Results by
Quarter (Unaudited), and Note 2: Stockholders' Equity, of the
Notes to the Consolidated Financial Statements and information
under the heading Transfer Agent and Registrar for Common Stock;
(ii) on October 5, 1999, a subsidiary of the Registrant acquired 100%
of the capital stock of a company in consideration for which
Registrant paid $2,960,612.88 in cash and issued 24,330 shares of
Interpublic Stock to the shareholders of the acquired company. The
shares of Interpublic Stock had a market value of $985,365.00 on
the date of issuance. The shares of Interpublic Stock were issued
by the Registrant without registration in an "offshore
transaction" and solely to "non-U.S. persons" in reliance on Rule
903(b)(3) of Regulation S under the Securities Act;
(iii) on October 26, 1999, a subsidiary of the Registrant acquired 100%
of the capital stock of a company in consideration for which
Registrant paid $1,508,780.00 in cash and issued 17,412 shares of
Interpublic Stock to the shareholders of the acquired company. The
shares of Interpublic Stock were valued at $682,332.75 on the date
of issuance. The shares of Interpublic Stock were issued by the
Registrant without registration in an "offshore transaction" and
solely to "non-U.S. persons" in reliance on Rule 903(b)(3) of
Regulation S under the Securities Act;
(iv) on October 29, 1999, the Registrant issued a total of 63,990
shares of Interpublic Stock and paid $7,048,233.75 to shareholders
of a foreign company as installment payments of the purchase price
of the capital stock of the foreign company. The Interpublic stock
issued had a market value of (pound)1,412,500 (U.S.$2,353,225) on
the date of issuance. The shares of Interpublic Stock were issued
by the Registrant without registration in an "offshore
transaction" and solely to "non-U.S. persons" in reliance on Rule
903(b)(3) of Regulation S under the Securities Act;
(v) on October 29, 1999, the Registrant issued an aggregate of 16,243
shares of Interpublic Stock and paid $416,687.55 in cash to the
two former stockholders of a company which was acquired in the
fourth quarter of 1998. This represented a deferred payment of the
purchase price. The shares of Interpublic Stock were valued at
$625,050.57 on the date of issuance. The shares of Interpublic
Stock were issued by the Registrant without registration in
reliance on Section 4(2) under the Securities Act, based on the
sophistication of the acquired company's former stockholders;
(vi) on November 8, 1999, a subsidiary of the Registrant acquired
substantially all of the assets and assumed substantially all the
liabilities of a domestic company in consideration for which the
registrant paid $19,230,657.25 in cash and issued a total of
1,019,831 shares of the registrant's common stock par value $.10
per share ("Interpublic Stock") to the security holders of the
company. The shares of Interpublic Stock had a market value of
$39,317,646.53 on the date of issuance. The shares of Interpublic
Stock were issued by the Registrant without registration in
reliance on Section 4(2) under the Securities Act, based on the
sophistication of the acquired company's former stockholders;
(vii) on November 9, 1999, a subsidiary of the Registrant acquired 100%
of the capital stock of a domestic company in consideration for
which the Registrant paid $1,900,000 in cash and issued a total of
200,131 shares of Interpublic Stock to the security holders of the
company. The shares of Interpublic Stock had a market value of
$7,600,000 on the date of issuance. The shares of Interpublic
Stock were issued by the Registrant without registration in
reliance on Section 4(2) under the Securities Act, based on the
sophistication of the acquired company's former stockholders;
(viii) on November 12, 1999, the Registrant paid U.S. $8,130,000 in cash
and issued a total of 210,948 shares of Interpublic Stock to
shareholders of a foreign company as an installment payment of the
purchase price for 100% of the capital stock of a foreign company
acquired in the first quarter of 1998. The Interpublic stock
issued had a market value of (pound)5,000,000 (U.S. $8,250,700) on
the date of issuance. The shares of Interpublic Stock were issued
by the Registrant without registration in an "offshore
transaction" and solely to "non-U.S. persons" in reliance on Rule
903(b)(3) of Regulation S under the Securities Act;
(ix) on November 24, 1999, the Registrant issued a total of 178,763
shares of Interpublic Stock to shareholders of a foreign company
in full payment of the purchase price for 100% of the capital
stock of the foreign company. The Interpublic stock issued had a
market value of (pound)4,350,000 (U.S. $7,074,536) on the date of
issuance. The shares of Interpublic Stock were issued by the
Registrant without registration in an "offshore transaction" and
solely to "non-U.S. persons" in reliance on Rule 903(b)(3) of
Regulation S under the Securities Act;
(x) on December 10, 1999, a subsidiary of the Registrant acquired 100%
of the issued and outstanding shares of a company in consideration
for which the Registrant paid $1,000,000 in cash and issued 31,764
shares of Interpublic Stock to the acquired company's
shareholders. The shares of Interpublic Stock had a market value
of $1,500,000 on the date of issuance. The shares of Interpublic
Stock were issued by the Registrant without registration in
reliance on Section 4(2) under the Securities Act, based on the
sophistication of the acquired company's former stockholders;
(xi) on December 14, 1999, the Registrant paid U.S. $4,481,636.20 in
cash and issued a total of 31,838 shares of Interpublic Stock to
shareholders of a foreign company in full payment of the purchase
price for 51% of the capital stock of the foreign company. The
Interpublic stock issued had a market value of DM 2,900,000 (U.S.
$1,505,633) on the date of issuance. The shares of Interpublic
Stock were issued by the Registrant without registration in an
"offshore transaction" and solely to "non-U.S. persons" in
reliance on Rule 903(b)(3) of Regulation S under the Securities
Act;
(xii) on December 16, 1999, the Registrant paid U.S. $11,416,000 in cash
and issued a total of 237,279 shares of Interpublic Stock to
shareholders of a foreign company in full payment of the purchase
price for 100% of the capital stock of the foreign company. The
Interpublic stock issued had a market value of (pound)7,080,000
(U.S. $11,338,903) on the date of issuance. The shares of
Interpublic Stock were issued by the Registrant without
registration in an "offshore transaction" and solely to "non-U.S.
persons" in reliance on Rule 903(b)(3) of Regulation S under the
Securities Act;
(xiii) on December 17, 1999, the Registrant paid U.S. $1,302,000 in cash
and issued a total of 3,321 shares of Interpublic Stock to
shareholders of a foreign company in full payment of the purchase
price for 60% of the capital stock of the foreign company. The
Interpublic stock issued had a market value of Mexican Pesos
1,505,900 (U.S. $159,776) on the date of issuance. The shares of
Interpublic Stock were issued by the Registrant without
registration in an "offshore transaction" and solely to "non-U.S.
persons" in reliance on Rule 903(b)(3) of Regulation S under the
Securities Act;
(xiv) on December 20, 1999, the Registrant acquired 100% of the capital
stock of a domestic company in consideration for which the
Registrant paid $4,915,500 in cash and issued a total of 31,773
shares of Interpublic Stock to the security holders of the
company. The shares of Interpublic Stock had a market value of
$1,638,500 on the date of issuance. The shares of Interpublic
Stock were issued by the Registrant without registration in
reliance on Section 4(2) under the Securities Act, based on the
sophistication of the acquired company's former stockholders;
(xv) on December 23, 1999, a subsidiary of the Registrant acquired 60%
of the capital stock of a foreign company in consideration for
which Registrant paid $867,900 in cash and issued without
registration 13,770 shares of the Common Stock, $.10 par value of
Registrant (the "Interpublic Stock") to the shareholders of the
acquired company. The shares of Interpublic Stock had a market
value of $710,100 on the date of issuance. The shares of
Interpublic Stock were issued by the Registrant without
registration in an "offshore transaction" and solely to "non-U.S.
persons" in reliance on Rule 903(b)(3) of Regulation S under the
Securities Act of 1933, as amended, (the "Securities Act");
(xvi) on December 23, 1999, the Registrant acquired 100% of the capital
stock of three related companies, in consideration for which
Registrant paid $7,309,292 in cash and issued 53,927 shares of
Interpublic Stock to the shareholders of the acquired company. The
shares of Interpublic Stock were valued at $2,696,350 on the date
of issuance. The shares of Interpublic Stock were issued by the
Registrant without registration in an "offshore transaction" and
solely to "non-U.S. persons" in reliance on Rule 903(b)(3) of
Regulation S under the Securities Act;
(xvii) on December 30, 1999, the Registrant acquired 100% of the capital
stock of a company in consideration for which Registrant paid
$4,065,501.13 in cash and issued 9,658 shares of Interpublic Stock
to the shareholders of the acquired company. The shares of
Interpublic Stock were valued at $536,622.63 on the date of
issuance. The shares of Interpublic Stock were issued by the
Registrant without registration in an "offshore transaction" and
solely to "non-U.S. persons" in reliance on Rule 903(b)(3) of
Regulation S under the Securities Act;
(xviii)on October 13, 1999, a subsidiary of the Registrant acquired 100%
of the capital stock of a domestic company in consideration for
which Registrant paid $2,025,000 in cash and issued 17,159 shares
of the Common Stock, $.10 par value, of Registrant (the
"Interpublic Stock") to the shareholders of the acquired company.
The shares of Interpublic Stock were valued at $674,992.16 on the
date of issuance. The shares of Interpublic Stock were issued by
the Registrant without registration in reliance on Section 4(2)
under the Securities Act, based on the sophistication of the
acquired company's former stockholders;
(xix) on December 7, 1999, IPG acquired all of the common stock of a
company in exchange for which Interpublic issued to the former
stockholders of the company 357,833 shares of Interpublic Stock
with a value on the date of issuance of $15,000,000. The shares of
Interpublic Stock were issued by the Registrant without
registration in reliance on Section 4(2) under the Securities Act,
based on the sophistication of the acquired company's former
stockholders; and
(xx) on December 1, 1999, a subsidiary of the Registrant acquired 100%
of the capital stock of a foreign company in consideration for
which Registrant issued 5,158,122 shares of the Common Stock, $.10
par value of Registrant (the "Interpublic Stock") to the
shareholders of the acquired company. The shares of Interpublic
Stock had a market value of U.S. $239,853,000 on the date of
issuance. The shares of Interpublic Stock were issued by the
Registrant without registration in an "offshore transaction" and
solely to "non-U.S. persons" in reliance on Rule 903(b)(3) of
Regulation S under the Securities Act of 1933, as amended (the
"Securities Act").
Item 6. Selected Financial Data
-----------------------
The response to this Item is incorporated by reference to the
Registrant's Annual Report to Stockholders for the year ended December 31, 1999
under the heading Selected Financial Data for Five Years.
Item 7. Management's Discussion and Analysis of Financial Condition and
---------------------------------------------------------------
Results of Operations
---------------------
The response to this Item is incorporated by reference to the
Registrant's Annual Report to Stockholders for the year ended December 31, 1999
under the heading Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
----------------------------------------------------------
The response to this Item is incorporated by reference to the
Registrant's Annual Report to Stockholders for the year ended December 31, 1999
under the heading Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Item 8. Financial Statements and Supplementary Data
-------------------------------------------
The response to this Item is incorporated in part by reference to the
Registrant's Annual Report to Stockholders for the year ended December 31, 1999
under the headings Financial Statements and Notes to the Consolidated Financial
Statements. Reference is also made to the Financial Statement Schedule listed
under Item 14(a) of this Report on Form 10-K.
Item 9. Changes in and Disagreements with Accountants on Accounting and
---------------------------------------------------------------
Financial Disclosure
--------------------
Not applicable.
PART III
Item 10. Directors and Executive Officers of the Registrant
--------------------------------------------------
The information required by this Item is incorporated by reference to
the Registrant's Proxy Statement for its 2000 Annual Meeting of Stockholders
(the "Proxy Statement"), to be filed not later than 120 days after the end of
the 1999 calendar year, except for the description of Interpublic's Executive
Officers which appears in Part I of this Report on Form 10-K under the heading
"Executive Officers of the Registrant".
Item 11. Executive Compensation
----------------------
The information required by this Item is incorporated by reference to
the Proxy Statement. Such incorporation by reference shall not be deemed to
incorporate specifically by reference the information referred to in Item
402(a)(8) of Regulation S-K.
Item 12. Security Ownership of Certain Beneficial Owners and Management
--------------------------------------------------------------
The information required by this Item is incorporated by reference to
the Proxy Statement.
Item 13. Certain Relationships and Related Transactions
----------------------------------------------
The information required by this Item is incorporated by reference to
the Proxy Statement. Such incorporation by reference shall not be deemed to
incorporate specifically by reference the information referred to in Item
402(a)(8) of Regulation S-K.
PART IV
Item 14. Exhibits, Financial Statement Schedule, and Reports on Form 8-K
---------------------------------------------------------------
(a) Listed below are all financial statements, financial statement
schedules and exhibits filed as part of this Report on Form 10-K.
1. Financial Statements:
See the Index to Financial Statements on page F-1.
2. Financial Statement Schedule:
See the Index to Financial Statement Schedule on page F-1.
3. Exhibits:
(Numbers used are the numbers assigned in Item 601 of Regulation S-K
and the EDGAR Filer Manual. An additional copy of this exhibit index immediately
precedes the exhibits filed with this Report on Form 10-K and the exhibits
transmitted to the Commission as part of the electronic filing of the Report.)
Exhibit No. Description
- ------------ -----------
3 (i) The Restated Certificate of Incorporation of the Registrant,
as amended is incorporated by reference to its Report on Form
10-Q for the quarter ended June 30, 1999. See Commission file
number 1-6686.
(ii) The By-Laws of the Registrant, amended as of February 19,
1991, are incorporated by reference to its Report on Form 10-K
for the year ended December 31, 1990. See Commission file
number 1-6686.
4 Instruments Defining the Rights of Security Holders.
(i) Indenture, dated as of September 16, 1997 between Interpublic
and The Bank of New York is incorporated by reference to the
Registrant's Report on Form 10-Q for the quarter ended
September 30, 1998. See Commission file number 1-6686.
(ii) The Preferred Share Purchase Rights Plan as adopted on July
18, 1989 is incorporated by reference to Registrant's
Registration Statement on Form 8-A dated August 1, 1989 (No.
00017904) and, as amended, by reference to Registrant's
Registration Statement on Form 8 dated October 3, 1989 (No.
00106686).
10 Material Contracts.
(a) Purchase Agreement, dated September 10, 1997, among The
Interpublic Group of Companies, Inc. ("Interpublic"), Morgan
Stanley & Co., Incorporated, Goldman Sachs and Co. and SBC
Warburg Dillon Read Inc. is incorporated by reference to the
Registrant's Report on Form 10-Q for the quarter ended
September 30, 1999. See Commission file number 1-6686.
(b) Employment, Consultancy and other Compensatory Arrangements
with Management.
Employment and Consultancy Agreements and any amendments or
supplements thereto and other compensatory arrangements filed
with the Registrant's Reports on Form 10-K for the years ended
December 31, 1980 through December 31, 1998 inclusive, or
filed with the Registrant's Reports on Form 10-Q for the
periods ended March 31, 1999, June 30, 1999 and September 30,
1999 are incorporated by reference in this Report on Form
10-K. See Commission file number 1-6686. Listed below are
agreements or amendments to agreements between the Registrant
and its executive officers which remain in effect on and after
the date hereof or were executed during the year ended
December 31, 1999 and thereafter, unless previously submitted,
which are filed as exhibits to this Report on Form 10-K.
(i) Sean F. Orr
-----------
(a) Employment Agreement dated as of April 27, 1999
between Interpublic and Sean F. Orr.
(b) Executive Special Benefit Agreement dated as of
May 1, 1999 between Interpublic and Sean F. Orr.
(c) Executive Severance Agreement dated as of April 27,
1999 between Interpublic and Sean F. Orr.
(ii) Eugene P. Beard
---------------
(a) Executive Special Benefit Agreement dated as of
March 13, 2000 between Interpublic and Eugene P.
Beard.
(b) Letter Agreement dated as of January 17, 2000
between Interpublic and Eugene P. Beard.
(iii) Martin F. Puris
---------------
(a) Termination Letter dated as of November 1, 1999
between Interpublic and Martin F. Puris.
(c) Executive Compensation Plans.
(i) Trust Agreement, dated as of June 1, 1990 between
Interpublic, Lintas Campbell-Ewald Company,
McCann-Erickson USA, Inc., McCann-Erickson
Marketing, Inc., Lintas, Inc. and Chemical Bank,
as Trustee, is incorporated by reference to
Registrant's Annual Report on Form 10-K for the
year ended December 31, 1990. See Commission file
number 1-6686.
(ii) The Stock Option Plan (1988) and the Achievement
Stock Award Plan of the Registrant are incorporated
by reference to Appendices C and D of the
Prospectus dated May 4, 1989 forming part of its
Registration Statement on Form S-8 (No. 33-28143).
(iii) The Management Incentive Compensation Plan of the
Registrant is incorporated by reference to the
Registrant's Report on Form 10-Q for the quarter
ended June 30, 1995. See Commission file number
1-6686.
(iv) The 1986 Stock Incentive Plan of the Registrant is
incorporated by reference to Registrant's Annual
Report on Form 10-K for the year ended December 31,
1993. See Commission file number 1-6686.
(v) The 1986 United Kingdom Stock Option Plan of the
Registrant is incorporated by reference to
Registrant's Annual Report on Form 10-K for the
year ended December 31, 1992. See Commission file
number 1-6686.
(vi) The Employee Stock Purchase Plan (1985) of the
Registrant, as amended, is incorporated by
reference to Registrant's Annual Report on Form
10-K for the year ended December 31, 1993. See
Commission file number 1-6686.
(vii) The Long-Term Performance Incentive Plan of the
Registrant is incorporated by reference to Appendix
A of the Prospectus dated December 12, 1988 forming
part of its Registration Statement on Form S-8 (No.
33-25555).
(viii) Resolution of the Board of Directors adopted on
February 16, 1993, amending the Long-Term
Performance Incentive Plan is incorporated by
reference to Registrant's Annual Report on Form
10-K for the year ended December 31, 1992. See
Commission file number 1-6686.
(ix) Resolution of the Board of Directors adopted on May
16, 1989 amending the Long-Term Performance
Incentive Plan is incorporated by reference to
Registrant's Report on Form 10-K for the year ended
December 31, 1989. See Commission file number
1-6686.
(x) The 1996 Stock Incentive Plan of the Registrant is
incorporated by reference to the Registrant's
Report on Form 10-Q for the quarter ended June 30,
1996. See Commission file number 1-6686.
(xi) The 1997 Performance Incentive Plan of the
Registrant is incorporated by reference to the
Registrant's Report on Form 10-Q for the quarter
ended June 30, 1997. See Commission file number
1-6686.
(d) Loan Agreements.
(i) Amendment dated August 31, 1999 to the Credit
Agreement dated as of June 25, 1996 between
Interpublic and The Chase Manhattan Bank (formerly
known as Chemical Bank).
(ii) Other Loan and Guaranty Agreements filed with the
Registrant's Annual Report on Form 10-K for the
years ended December 31, 1988 and December 31,
1986 are incorporated by reference in this Report
on Form 10-K. Other Credit Agreements, amendments
to various Credit Agreements, Supplemental
Agreements, Termination Agreements, Loan
Agreements, Note Purchase Agreements, Guarantees
and Intercreditor Agreements filed with the
Registrant's Report on Form 10-K for the years
ended December 31, 1989 through December 31, 1998,
inclusive and filed with Registrant's Reports on
Form 10-Q for the periods ended March 31, 1999,
June 30, 1999 and September 30, 1999 are
incorporated by reference into this Report on Form
10-K. See Commission file number 1-6686.
(e) Leases.
Material leases of premises are incorporated by reference to
the Registrant's Annual Report on Form 10-K for the years
ended December 31, 1980 and December 31, 1988. See Commission
file number 1-6686.
(f) Acquisition Agreement for Purchase of Real Estate.
Acquisition Agreement (in German) between
Treuhandelsgesellschaft Aktiengesellschaft & Co. Grundbesitz
OHG and McCann-Erickson Deutschland GmbH & Co. Management
Property KG ("McCann-Erickson Deutschland") and the English
translation of the Acquisition Agreement are incorporated by
reference to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1992. See Commission file number
1-6686.
(g) Mortgage Agreements and Encumbrances.
(i) Summaries in German and English of Mortgage
Agreements between McCann-Erickson Deutschland and
Frankfurter Hypothekenbank Aktiengesellschaft
("Frankfurter Hypothekenbank"), Mortgage Agreement,
dated January 22, 1993, between McCann-Erickson
Deutschland and Frankfurter Hypothekenbank, Mortgage
Agreement, dated January 22, 1993, between
McCann-Erickson Deutschland and Hypothekenbank are
incorporated by reference to Registrant's Annual
Report on Form 10-K for the year ended December 31,
1993. See Commission file number 1-6686. Summaries in
German and English of Mortgage Agreement, between
McCann-Erickson Deutschland and Frankfurter Sparkasse
and Mortgage Agreement, dated January 7, 1993,
between McCann-Erickson Deutschland and Frankfurter
Sparkasse are incorporated by reference to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1992. See Commission file number
1-6686.
(ii) Summaries in German and English of Documents creating
Encumbrances in favor of Frankfurter Hypothekenbank
and Frankfurter Sparkasse in connection with the
aforementioned Mortgage Agreements, Encumbrance,
dated January 15, 1993, in favor of Frankfurter
Hypothekenbank, and Encumbrance, dated January 15,
1993, in favor of Frankfurter Sparkasse are
incorporated by reference to Registrant's Annual
Report on Form 10-K for the year ended December 31,
1992. See Commission file number 1-6686.
(iii) Loan Agreement (in English and German), dated January
29, 1993 between Lintas Deutschland GmbH and
McCann-Erickson Deutschland is incorporated by
reference to Registrant's Annual Report on Form 10-K
for the year ended December 31, 1992. See Commission
file number 1-6686.
11 Computation of Earnings Per Share.
13 This Exhibit includes: (a) those portions of the Annual Report to
Stockholders for the year ended December 31, 1999 which are included
therein under the following headings: Financial Highlights;
Vice-Chairman's Report of Management; Management's Discussion and
Analysis of Financial Condition and Results of Operations; Consolidated
Balance Sheet; Consolidated Statement of Income; Consolidated Statement
of Cash Flows; Consolidated Statement of Stockholders' Equity and
Comprehensive Income; Notes to Consolidated Financial Statements (the
aforementioned Consolidated Financial Statements together with the
Notes to Consolidated Financial Statements hereinafter shall be
referred to as the "Consolidated Financial Statements"); Report of
Independent Accountants; Selected Financial Data for Five Years;
Results by Quarter (Unaudited); and Stockholders Information.
21 Subsidiaries of the Registrant.
23 Consent of Independent Accountants:
PricewaterhouseCoopers LLP
Consent of Independent Auditors: Ernst & Young
Consent of Independent Auditors: Ernst & Young LLP
24 Power of Attorney to sign Form 10-K and resolution of Board of
Directors re Power of Attorney.
27 Financial Data Schedules.
99 The Company filed the following reports on Form 8-K during the quarter
ended December 31, 1999:
(i) Agreement and Plan of Merger, dated as of December 20, 1999,
between The Interpublic Group of Companies, Inc. and NFO
Worldwide, Inc., is incorporated by reference to Exhibit 2.1
of the Registrant's Form 8-K dated December 20, 1999.
(ii) Stock Option Agreement, dated as of December 20, 1999, between
The Interpublic Group of Companies, Inc. and NFO Worldwide,
Inc., is incorporated by reference to Exhibit 2.2 of the
Registrant's Form 8-K dated December 20, 1999.
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange
Act of 1934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.
THE INTERPUBLIC GROUP OF COMPANIES, INC.
(Registrant)
March 21,2000 BY: Philip H. Geier, Jr.
--------------------
Philip H. Geier, Jr.
Chairman of the Board, President
and Chief Executive Officer
(Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Name Title Date
---- ----- ----
/s/ Philip H. Geier, Jr. Chairman of the Board, March 21, 2000
- ------------------------ President and Chief Executive
Philip H. Geier, Jr. Officer (Principal Executive
Officer)
/s/ Sean F. Orr Executive Vice President March 21, 2000
- ------------------------ Chief Financial Officer
Sean F. Orr (Principal Financial
Officer) and Director
/s/ Frank J. Borelli Director March 21, 2000
- ------------------------
Frank J. Borelli
/s/ Reginald K. Brack Director March 21, 2000
- ------------------------
Reginald K. Brack
/s/ Jill M. Considine Director March 21, 2000
- ------------------------
Jill M. Considine
/s/ John J. Dooner, Jr. Director March 21, 2000
------------------------
John J. Dooner, Jr.
/s/ Frank B. Lowe Director March 21, 2000
- -------------------------
Frank B. Lowe
/s/ Michael A. Miles Director March 21, 2000
- -------------------------
Michael A. Miles
/s/ Frederick Molz Vice President and March 21, 2000
- ------------------------- Controller (Principal
Frederick Molz Accounting Officer)
/s/ Leif H. Olsen Director March 21, 2000
- -------------------------
Leif H. Olsen
/s/ Allen Questrom Director March 21, 2000
- -------------------------
Allen Questrom
/s/ J. Phillip Samper Director March 21, 2000
- -------------------------
J. Phillip Samper
By: /s/ Nicholas J. Camera
----------------------
Nicholas J. Camera
F-1
INDEX TO FINANCIAL STATEMENTS
The Financial Statements appearing under the headings: Financial Highlights,
Vice-Chairman's Report of Management; Management's Discussion and Analysis of
Financial Condition and Results of Operations, Consolidated Financial
Statements, Notes to Consolidated Financial Statements, Report of Independent
Accountants, Selected Financial Data for Five Years and Results by Quarter
(Unaudited), accompanying the Annual Report to Stockholders for the year ended
December 31, 1999, together with the report thereon of PricewaterhouseCoopers
LLP dated February 22, 2000 are incorporated by reference in this report on Form
10-K. With the exception of the aforementioned information and the information
incorporated in Items 5, 6 and 7, no other data appearing in the Annual Report
to Stockholders for the year ended December 31, 1999 is deemed to be filed as
part of this report on Form 10-K.
The following financial statement schedule should be read in conjunction with
the financial statements in such Annual Report to Stockholders for the year
ended December 31, 1999. Financial statement schedules not included in this
report on Form 10-K have been omitted because they are not applicable or the
required information is shown in the financial statements or the notes thereto.
Separate financial statements for the companies which are 50% or less owned and
accounted for by the equity method have been omitted because, considered in the
aggregate as a single subsidiary, they do not constitute a significant
subsidiary.
INDEX TO FINANCIAL STATEMENT SCHEDULE
Page
Report of Independent Accountants on
Financial Statement Schedule F-2
Financial Statement Schedule Required to be filed by Item 8 of this form:
VIII Valuation and Qualifying Accounts F-3
F-2
REPORT OF INDEPENDENT ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE
To the Board of Directors and Stockholders of
The Interpublic Group of Companies, Inc.
Our audits of the consolidated financial statements referred to in our report
dated February 22, 2000 appearing in the 1999 Annual Report to Stockholders of
The Interpublic Group of Companies, Inc. (which report and consolidated
financial statements are incorporated by reference in this Annual Report on Form
10-K) also included an audit of the Financial Statement Schedule listed in Item
14 (a)(2) of this Form 10-K. In our opinion, this Financial Statement Schedule
presents fairly, in all material respects, the information set forth therein
when read in conjunction with the related consolidated financial statements.
PricewaterhouseCoopers LLP
New York, New York
February 22, 2000
F-3
SCHEDULE VIII
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
For the Years Ended December 31, 1999, 1998 and 1997
================================================================================
(Dollars in thousands)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
- --------------------------------------------------------------------------------
Additions
---------
Charged
Balance at Charged to to Other Balance
Beginning Costs & Accounts- Deductions- at End
Description of Period Expenses Describe Describe of Period
- --------------------------------------------------------------------------------
Allowance for
Doubtful Accounts -
deducted from
Receivables in the
Consolidated
Balance Sheet:
1999 $53,093 $21,271 $5,148(5) $(22,780)(3) $57,841
2,934(1) (1,215)(2)
(610)(4)
1998 $44,110 $18,362 $6,471(1) $(15,247)(3) $53,093
2,111(5) (3,310)(4)
596(2)
1997 $37,049 $16,753 $2,256(1) $ (2,553)(2) $44,110
848(5) (7,869)(3)
(2,374)(4)
- ----------------------
[FN]
(1) Allowance for doubtful accounts of acquired and newly consolidated
companies.
(2) Foreign currency translation adjustment.
(3) Principally amounts written off.
(4) Reversal of previously recorded allowances on accounts receivable.
(5) Miscellaneous.
</FN>
INDEX TO DOCUMENTS
Exhibit No. Description
- ------------ -----------
3 (i) The Restated Certificate of Incorporation of the
Registrant, as amended is incorporated by reference to its
Report on Form 10-Q for the quarter ended June 30, 1999. See
Commission file number 1-6686.
(ii) The By-Laws of the Registrant, amended as of February 19,
1991, are incorporated by reference to its Report on Form
10-K for the year ended December 31, 1990. See Commission
file number 1-6686.
4 Instruments Defining the Rights of Security Holders.
(i) Indenture, dated as of September 16, 1997 between
Interpublic and The Bank of New York is incorporated by
reference to the Registrant's Report on Form 10-Q for the
quarter ended September 30, 1998. See Commission file number
1-6686.
(ii) The Preferred Share Purchase Rights Plan as adopted on July
18, 1989 is incorporated by reference to Registrant's
Registration Statement on Form 8-A dated August 1, 1989 (No.
00017904) and, as amended, by reference to Registrant's
Registration Statement on Form 8 dated October 3, 1989 (No.
00106686).
10 Material Contracts.
(a) Purchase Agreement, dated September 10, 1997, among The
Interpublic Group of Companies, Inc. ("Interpublic"), Morgan
Stanley & Co., Incorporated, Goldman Sachs and Co. and SBC
Warburg Dillon Read Inc. is incorporated by reference to the
Registrant's Report on Form 10-Q for the quarter ended
September 30, 1999. See Commission file number 1-6686.
(b) Employment, Consultancy and other Compensatory Arrangements
with Management.
Employment and Consultancy Agreements and any amendments or
supplements thereto and other compensatory arrangements
filed with the Registrant's Reports on Form 10-K for the
years ended December 31, 1980 through December 31, 1998
inclusive, or filed with the Registrant's Reports on Form
10-Q for the periods ended March 31, 1999, June 30, 1999 and
September 30, 1999 are incorporated by reference in this
Report on Form 10-K. See Commission file number 1-6686.
Listed below are agreements or amendments to agreements
between the Registrant and its executive officers which
remain in effect on and after the date hereof or were
executed during the year ended December 31, 1999 and
thereafter, unless previously submitted, which are filed as
exhibits to this Report on Form 10-K.
(i) Sean F. Orr
-----------
(a) Employment Agreement dated as of April 27,
1999 between Interpublic and Sean F. Orr.
(b) Executive Special Benefit Agreement dated as
of May 1, 1999 between Interpublic and Sean
F. Orr.
(c) Executive Severance Agreement dated as of
April 27, 1999 between Interpublic and Sean
F. Orr.
(ii) Eugene P. Beard
---------------
(a) Executive Special Benefit Agreement dated as
of March 13, 2000 between Interpublic and
Eugene P. Beard.
(b) Letter Agreement dated as of January 17,
2000 between Interpublic and Eugene P.
Beard.
(iii) Martin F. Puris
---------------
(a) Termination Letter dated as of November 1,
1999 between Interpublic and Martin F.
Puris.
(c) Executive Compensation Plans.
(i) Trust Agreement, dated as of June 1, 1990 between
Interpublic, Lintas Campbell-Ewald Company,
McCann-Erickson USA, Inc., McCann-Erickson Marketing,
Inc., Lintas, Inc. and Chemical Bank, as Trustee, is
incorporated by reference to Registrant's Annual
Report on Form 10-K for the year ended December 31,
1990. See Commission file number 1-6686.
(ii) The Stock Option Plan (1988) and the Achievement
Stock Award Plan of the Registrant are incorporated
by reference to Appendices C and D of the Prospectus
dated May 4, 1989 forming part of its Registration
Statement on Form S-8 (No. 33-28143).
(iii) The Management Incentive Compensation Plan of the
Registrant is incorporated by reference to the
Registrant's Report on Form 10-Q for the quarter
ended June 30, 1995. See Commission file number
1-6686.
(iv) The 1986 Stock Incentive Plan of the Registrant is
incorporated by reference to Registrant's Annual
Report on Form 10-K for the year ended December 31,
1993. See Commission file number 1-6686.
(v) The 1986 United Kingdom Stock Option Plan of the
Registrant is incorporated by reference to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1992. See Commission file number
1-6686.
(vi) The Employee Stock Purchase Plan (1985) of the
Registrant, as amended, is incorporated by reference
to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1993. See Commission file
number 1-6686.
(vii) The Long-Term Performance Incentive Plan of the
Registrant is incorporated by reference to Appendix A
of the Prospectus dated December 12, 1988 forming
part of its Registration Statement on Form S-8 (No.
33-25555).
(viii) Resolution of the Board of Directors adopted on
February 16, 1993, amending the Long-Term Performance
Incentive Plan is incorporated by reference to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1992. See Commission file number
1-6686.
(ix) Resolution of the Board of Directors adopted on May
16, 1989 amending the Long-Term Performance Incentive
Plan is incorporated by reference to Registrant's
Report on Form 10-K for the year ended December 31,
1989. See Commission file number 1-6686.
(x) The 1996 Stock Incentive Plan of the Registrant is
incorporated by reference to the Registrant's Report
on Form 10-Q for the quarter ended June 30, 1996. See
Commission file number 1-6686.
(xi) The 1997 Performance Incentive Plan of the Registrant
is incorporated by reference to the Registrant's
Report on Form 10-Q for the quarter ended June 30,
1997. See Commission file number 1-6686.
(d) Loan Agreements.
(i) Amendment dated August 31, 1999 to the Credit
Agreement dated as of June 25, 1996 between
Interpublic and The Chase Manhattan Bank (formerly
known as Chemical Bank).
(ii) Other Loan and Guaranty Agreements filed with the
Registrant's Annual Report on Form 10-K for the years
ended December 31, 1988 and December 31, 1986 are
incorporated by reference in this Report on Form
10-K. Other Credit Agreements, amendments to various
Credit Agreements, Supplemental Agreements,
Termination Agreements, Loan Agreements, Note
Purchase Agreements, Guarantees and Intercreditor
Agreements filed with the Registrant's Report on Form
10-K for the years ended December 31, 1989 through
December 31, 1998, inclusive and filed with
Registrant's Reports on Form 10-Q for the periods
ended March 31, 1999, June 30, 1999 and September 30,
1999 are incorporated by reference into this Report
on Form 10-K. See Commission file number 1-6686.
(e) Leases.
Material leases of premises are incorporated by reference to
the Registrant's Annual Report on Form 10-K for the years
ended December 31, 1980 and December 31, 1988. See Commission
file number 1-6686.
(f) Acquisition Agreement for Purchase of Real Estate.
Acquisition Agreement (in German) between
Treuhandelsgesellschaft Aktiengesellschaft & Co. Grundbesitz
OHG and McCann-Erickson Deutschland GmbH & Co. Management
Property KG ("McCann-Erickson Deutschland") and the English
translation of the Acquisition Agreement are incorporated by
reference to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1992. See Commission file number
1-6686.
(g) Mortgage Agreements and Encumbrances.
(i) Summaries in German and English of Mortgage
Agreements between McCann-Erickson Deutschland and
Frankfurter Hypothekenbank Aktiengesellschaft
("Frankfurter Hypothekenbank"), Mortgage Agreement,
dated January 22, 1993, between McCann-Erickson
Deutschland and Frankfurter Hypothekenbank, Mortgage
Agreement, dated January 22, 1993, between
McCann-Erickson Deutschland and Hypothekenbank are
incorporated by reference to Registrant's Annual
Report on Form 10-K for the year ended December 31,
1993. See Commission file number 1-6686. Summaries in
German and English of Mortgage Agreement, between
McCann-Erickson Deutschland and Frankfurter Sparkasse
and Mortgage Agreement, dated January 7, 1993,
between McCann-Erickson Deutschland and Frankfurter
Sparkasse are incorporated by reference to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1992. See Commission file number
1-6686.
(ii) Summaries in German and English of Documents creating
Encumbrances in favor of Frankfurter Hypothekenbank
and Frankfurter Sparkasse in connection with the
aforementioned Mortgage Agreements, Encumbrance,
dated January 15, 1993, in favor of Frankfurter
Hypothekenbank, and Encumbrance, dated January 15,
1993, in favor of Frankfurter Sparkasse are
incorporated by reference to Registrant's Annual
Report on Form 10-K for the year ended December 31,
1992. See Commission file number 1-6686.
(iii) Loan Agreement (in English and German), dated January
29, 1993 between Lintas Deutschland GmbH and
McCann-Erickson Deutschland is incorporated by
reference to Registrant's Annual Report on Form 10-K
for the year ended December 31, 1992. See Commission
file number 1-6686.
11 Computation of Earnings Per Share.
13 This Exhibit includes: (a) those portions of the Annual Report to
Stockholders for the year ended December 31, 1999 which are included
therein under the following headings: Financial Highlights;
Vice-Chairman's Report of Management; Management's Discussion and
Analysis of Financial Condition and Results of Operations; Consolidated
Balance Sheet; Consolidated Statement of Income; Consolidated Statement
of Cash Flows; Consolidated Statement of Stockholders' Equity and
Comprehensive Income; Notes to Consolidated Financial Statements (the
aforementioned Consolidated Financial Statements together with the
Notes to Consolidated Financial Statements hereinafter shall be
referred to as the "Consolidated Financial Statements"); Report of
Independent Accountants; Selected Financial Data for Five Years;
Results by Quarter (Unaudited); and Stockholders Information.
21 Subsidiaries of the Registrant.
23 Consent of Independent Accountants:
PricewaterhouseCoopers LLP
Consent of Independent Auditors: Ernst & Young
Consent of Independent Auditors: Ernst & Young LLP
24 Power of Attorney to sign Form 10-K and resolution of Board of
Directors re Power of Attorney.
27 Financial Data Schedules.
99 The Company filed the following reports on Form 8-K during the quarter
ended December 31, 1999:
(i) Agreement and Plan of Merger, dated as of December 20, 1999,
between The Interpublic Group of Companies, Inc. and NFO
Worldwide, Inc., is incorporated by reference to Exhibit 2.1
of the Registrant's Form 8-K dated December 20, 1999.
(ii) Stock Option Agreement, dated as of December 20, 1999, between
The Interpublic Group of Companies, Inc. and NFO Worldwide,
Inc., is incorporated by reference to Exhibit 2.2 of the
Registrant's Form 8-K dated December 20, 1999.