THE INTERPUBLIC OUTSIDE DIRECTORS' STOCK OPTION PLAN
WHEREAS, The Interpublic Group of Companies, Inc. wishes to
adopt a stock option plan for its outside directors (the "Plan");
NOW, THEREFORE, the Plan is hereby adopted as of June 1,
1994.
ARTICLE I
INTRODUCTION
1.1. Name of Plan. The name of the Plan is the "Interpublic
Outside Directors' Stock Option Plan."
1.2. Purpose of Plan. The Plan is being established to
attract, retain and compensate for service highly qualified
individuals who are 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 underscoring 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
terms shall have the following meanings, unless the context
clearly indicates otherwise:
Act. "Act" means the Securities Exchange Act of 1934, as
presently or hereafter amended.
Committee. "Committee" means the directors of the
Corporation who are not Outside Directors.
Corporation. "Corporation" means The Interpublic Group of
Companies, Inc.
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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.
NQSO. "NQSO" means a nonqualified stock option, and "NQSOs"
means nonqualified stock options.
Option Period. "Option Period" means the period beginning
on the date of grant of an NQSO 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
Option Plan, as amended from time to time.
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
NATURE OF OPTIONS
4.1. NQSOs. Only NQSOs may be granted under the Plan.
ARTICLE V
SHARES AVAILABLE
5.1. Numbers of Shares Available. The Plan provides for the
issuance of an aggregate of 75,000 shares of Common Stock of the
Corporation, par value $.10 per share, which may be authorized
but unissued shares, treasury shares, or shares purchased on the
open market.
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5.2. Adjustments. The number of shares of Common Stock of
the Corporation reserved for awards under the Plan and the
exercise price and the securities issuable under any outstanding
NQSOs shall be subject to appropriate adjustment by the Committee
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 adjustment under this Section 5.2.
shall be conclusive and binding for all purposes of the Plan.
ARTICLE VI
GRANTS OF NQSOs
6.1. Annual Grant. Each year on the first Friday in the
month of June, each individual Outside Director shall
automatically receive an NQSO covering the whole number of shares
of Common Stock of the Corporation that has a 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 valued most closely to $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 NQSOs 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.
6.2. Option Price. The exercise price of the NQSO shall be
the Fair Market Value on the date of the grant.
ARTICLE VII
OPTION PERIOD
7.1. Duration. An NQSO granted under the Plan shall become
exercisable three years after the date of grant and shall expire
ten years after the date of grant.
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ARTICLE VIII
PAYMENT
8.1. Exercise Price. The exercise price of an NQSO shall be
paid in cash in U.S. Dollars on the date of exercise.
ARTICLE IX
CESSATION OF SERVICE,
RETIREMENT, DEATH
9.1 Cessation of Service. Upon cessation of service as an
Outside Director (other than for reasons of retirement or death),
NQSOs 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.
9.2. Retirement. If a grantee ceases to serve as an Outside
Director and is eligible for a benefit under the Interpublic
Outside Directors' Pension Plan, NQSOs 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.
9.3 Death. Upon the death of a grantee, NQSOs 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 or heirs.
9.4 Forfeiture. If an NQSO is not exercisable on the date
on which the grantee ceases to serve as an Outside Director, or
if an NQSO is not exercised in full before it ceases to be
exercisable in accordance with Article VII hereof and the
preceding provisions of this Article IX, the NQSO shall, to the
extent not previously exercised, thereupon be forfeited.
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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 or
the exercise price, date of exercisability or Option Period of an
NQSO 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 grantees any NQSOs 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. An NQSO may not be granted
under the Plan after June 7, 2004, but NQSOs granted prior to
that date shall continue to become exercisable and may be
exercised according to the terms of the Plan.
ARTICLE XI
NONTRANSFERABILITY
11.1. Options Not Transferable. No NQSO granted under the
Plan is transferable other than by will or the laws of descent
and distribution. During the grantee's lifetime, an NQSO may
only be exercised 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 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 NQSOs under the Plan shall
be executed in accordance with the requirements of Section 16 of
the Act and any regulations promulgated thereunder.
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ARTICLE XIII
RIGHTS OF DIRECTORS
13.1. Rights to NQSOs. Except as provided in the Plan, no
Outside Director shall have any claim or right to be granted an
NQSO under the Plan. Neither the Plan nor any action thereunder
shall be construed as giving any director any right to be
retained in the services of the Company.