Exhibit 4.5
WPP GROUP PLC
___________________________________________
LEADERSHIP EQUITY ACQUISITION PLAN
___________________________________________
Approved by the Company in
General Meeting on 2 September, 1999
(Adopted by the Compensation Committee
on 22nd September, 1999 and as amended by
the Compensation Committee on 8th December, 1999
and on . [Appendices 1 and 2] and on [2nd May, 2001]
[Appendix 3])
ALLEN & OVERY
London
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CONTENTS
Clause Page
1. Purpose........................................................ 1
2. Interpretation................................................. 1
3. Eligibility.................................................... 4
4. Acquisition of Investment Shares............................... 4
5. Awards......................................................... 5
6. Commitment of Investment Shares................................ 7
7. Performance Condition.......................................... 7
8. Exceptional Financial Circumstances............................ 8
9. Special Situations............................................. 8
10. Variation of Capital........................................... 9
11. Change of Control.............................................. 10
12. Discharge of Awards............................................ 11
13. Miscellaneous.................................................. 11
14. Amendment...................................................... 14
15. Duration....................................................... 14
Appendix 1.............................................................. 15
Appendix 2.............................................................. 16
Appendix 3.............................................................. 17
1. PURPOSE
The purpose of the Plan is to strengthen the Company's long term financial
performance and its ability to attract and retain key senior executives by
ensuring that participants receive competitive incentives which are linked
to the success of both the Company and individual businesses and which
align the interests of senior executives with the interests of the
Company's share owners.
2. INTERPRETATION
(1) The following words and expressions have the following meanings:
"ADS" means an American Depository Share in the Company held under, or to
be transferred or issued to, any depository approved by the Company.
"Annual Earnings" means an Eligible Person's annual earnings at any time
comprising his basic pay and bonus (which may be a bonus target or such
percentage of a participant's bonus target as the Compensation Committee
shall specify), included on a basis the Compensation Committee decides. It
excludes remuneration attributable to long-term incentive schemes and other
benefits.
"Award" means an award or grant made to an Eligible Person subject to and
on the terms of the Plan.
"Award Period" means the period of 42 days commencing on any day on which
the Company releases its results for any financial period.
"Change of Control Date" means the date on which a person or persons
obtains Control of the Company as described in Rule 11(1)(A) or (B).
"Company" means WPP Group plc.
"Comparator Group" means those companies which the Compensation Committee
select from time to time , and includes the Company.
"Compensation Committee" means the compensation committee of the board of
directors of the Company.
"Control" has the same meaning as in section 840 of the Income and
Corporation Taxes Act 1988.
"Eligible Person" means any employee (including an executive director) of a
Group Company and JMS.
"Employment" means employment as a director or employee of any Group
Company.
"ESOP" means the WPP Group plc Grantor Trust, the WPP Group plc ROW ESOP,
the WPP Group plc UK ESOP and any other employee benefit trust nominated by
the Compensation Committee to operate in conjunction with the Plan, or any
one or more of them.
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"Financial Year" means a financial year of the Company within the meaning
of section 223 of the Companies Act 1985.
"Group" means the Company and all of its subsidiaries (as defined in
section 736 of the Companies Act 1985).
"Group Company" means any member of the Group. A transfer of a
Participant's Employment from one Group Company to another shall be
disregarded.
"Interested" means, in relation both to "Investment Shares" and to Shares
which are not Investment Shares, that the Eligible Person or Participant is
interested in those Shares (and has committed them to the Plan, if
appropriate) if they are held by:
(i) the Eligible Person or Participant beneficially;
(ii) a member of the Eligible Person's or Participant's close family
beneficially;
(iii) a family trust or pension trust in which the Eligible Person or
Participant is interested;
(iv) a private company in which the Eligible Person or Participant is
substantially interested; or
(v) a nominee for any of the above;
or are in the form of Shares which vest under any of the operating company
long term incentive plans or restricted share plans of the Company or the
Company's performance share plan, in accordance with awards made to that
Eligible Person or Participant which have matured in or by reference to a
Financial Year prior to that in which the Eligible Person or Participant
has agreed to participate in the Plan.
"Investment Period" means, in relation to an Award, a period of 5 years
commencing on a date specified by the Compensation Committee, not being
earlier than the date on which an Eligible Person is invited to participate
in the Plan in relation to that Award.
"Investment Shares" means the Shares committed to the Plan by an Eligible
Person to qualify for an Award in accordance with Rule 6.
"JMS" means JMS Financial Services Limited.
"Matching Shares" means Shares which are comprised in an Award.
"Participant" means a person who holds an Award including, if relevant, his
legal personal representatives.
"Performance Condition" means the condition set out in Rule 7.
"Performance Period" means, in relation to an Award, a period of 5 years
commencing with the beginning of the Financial Year in which the Award is
made.
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"Plan" means the WPP Group plc Leadership Equity Acquisition Plan as from
time to time amended in accordance with the provisions of these Rules.
"Relevant Event" means cessation of Employment for any reason other than
Voluntary Resignation or Termination for Cause.
"Relevant Proportion" means the proportion that the length of the period
from the start of an Investment Period to the occurrence of the Relevant
Event bears to the length of that Investment Period (calculated in days).
"Share" means an ordinary share in the capital of the Company and includes
ADSs.
"Termination for Cause" means cessation of Employment in circumstances
where the Participant is dismissed (with or without notice), or resigns to
avoid such dismissal, because
(i) he has committed a serious or persistent breach, or failure to
observe, any of the terms or conditions of the Employment;
(ii) he is guilty of any act of dishonesty or serious misconduct or any
conduct which the Compensation Committee considers may bring any
Group Company into disrepute;
(iii) he is convicted of a criminal offence carrying a term of imprisonment
(other than an offence under road traffic legislation for which a
non-custodial penalty is imposed);
(iv) he is disqualified by a competent court from being a director or
officer of any body corporate.
"TSR" means the total shareholder return of a company (or a group of
companies) measured on the assumption that dividends are reinvested and on
such other assumptions and basis and averaged over such period as the
Compensation Committee decides.
"Vested Matching Shares" means the number of Matching Shares comprised in
an Award which is determined as at the end of the Performance Period as
being the number in respect of which the Performance Condition has been
satisfied, and subject to Rule 8.
"Voluntary Resignation" means cessation of Employment in circumstances
where the Participant resigns of his own volition other than:
(i) on account of serious ill-health, retirement at normal or contractual
retirement age or early retirement agreed by the Company; and
(ii) where he resigns in circumstances which entitle him to terminate the
Employment without notice on account of a breach of contract by the
Group Member by which he is employed.
(2) Words importing the singular shall include the plural and vice versa and
words importing the masculine shall include the feminine.
(3) Any reference, express or implied, to an enactment includes references to:
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(a) that enactment as amended, extended or applied by or under any other
enactment; and
(b) any enactment which that enactment re-enacts (with or without
modification).
3. ELIGIBILITY
(1) No person is entitled as of right to participate in the Plan.
(2) The Compensation Committee may decide from time to time which Eligible
Persons may participate, and the extent of their participation, in the Plan
through the receipt of an Award or Awards.
(3) An Eligible Person who is within three years of the date on which he is
bound to retire from Employment is not eligible to receive an Award unless
the Compensation Committee otherwise decides in exceptional circumstances.
4. ACQUISITION OF INVESTMENT SHARES
(1) In order to participate in the Plan through the receipt of an Award an
Eligible Person must agree to participate in the Plan by making an
investment in Shares and committing to the Plan Shares in which he is
Interested.
(2) The minimum number of Shares which an Eligible Person may commit to the
Plan must represent a minimum value of Shares in which an Eligible Person
is Interested for the purpose of participating in the Plan. Except in the
case of Mr Sorrell and JMS, in respect of any Award that minimum value
shall be an amount equal to the Eligible Person's Annual Earnings at the
time he agrees to participate in the Plan.
(3) The maximum value of Shares which an Eligible Person may commit during the
life of the Plan must represent a maximum value of Shares in which an
Eligible Person is Interested. That maximum value shall be three times
the Eligible Person's Annual Earnings (or $10m in aggregate in the case of
Mr Sorrell and JMS). The Compensation Committee may decide a lower maximum
value of Shares for an Eligible Person in relation to any Award.
(4) The Compensation Committee shall establish arrangements for inviting
Eligible Persons whom they have invited to participate in the Plan to
acquire their Investment Shares over such period and by such instalments as
they decide.
(5) Investment Shares must be obtained and/or held in accordance with an
investment policy determined from time to time by the Compensation
Committee. At least one third of such Shares must normally be obtained by
purchase or, in the case of Shares acquired under any of the Company's
share option schemes, by subscription or otherwise, or may be capable of
being acquired:
. by applying the after tax proceeds of any short term incentive scheme
applicable to the Financial Year in which the Participant agrees to
participate in the acquisition of Shares; and/or
. in the form of Shares which vest under any of the operating company
long term incentive plans or restricted share plans of the Company or
the Company's performance share plan
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("LTIPs"), in accordance with awards which mature in or by reference
to the Financial Year in which the Participant agrees to participate
in the Plan; and/or
. by applying the after tax cash proceeds of any awards made under any
of the LTIPs which mature in the Financial Year in which the
Participant agrees to participate in the Plan in the acquisition of
Shares.
If the after tax cash proceeds of any LTIP award and, where applicable, the
number of Shares which vest under any LTIP award are insufficient to
acquire the balance of the number of Shares (when taken with any Shares in
which the Participant is Interested at the time when the Eligible Person is
invited to participate in the Plan and committed to the Plan under (6)
below) which the Participant agreed to commit to the Plan, the Compensation
Committee may allow the Participant to acquire the balance within a further
period they specify. If the Participant fails to acquire the balance within
the specified period and to commit them to the Plan, the Award shall,
subject to the last paragraph of Rule 5(4), lapse, if the number of Shares
committed in respect of that Award falls short of the minimum number
applicable under (2) above, and shall be scaled down appropriately, if the
number of Shares committed in respect of that Award exceeds that minimum
number but is less than the number which the Participant agreed to commit.
(6) The investment policy of the Compensation Committee may allow a proportion,
not exceeding two thirds, of the Investment Shares which the Eligible
Person has agreed to contribute to the Plan to be satisfied by the
commitment to the Plan of Shares in which the Eligible Person is Interested
at the time when the Eligible Person is invited to participate in the Plan
(without the need for acquisition by him). The Compensation Committee
shall determine the value to be attributed to any existing holding.
5. AWARDS
(1) By agreeing to participate in the Plan and by agreeing to commit Investment
Shares in accordance with Rule 4 in the Financial Year in which he is
invited to participate an Eligible Person shall be entitled to receive an
Award granted by the Compensation Committee. Awards will normally be made
during an Award Period, but exceptionally may be made at other times.
(2) The Compensation Committee decides by when the Investment Shares must be
committed in a Financial Year to qualify for an Award.
(3) An Award shall relate to a number of Matching Shares the Compensation
Committee determines not exceeding five Matching Shares for every
Investment Share contributed. The number of Matching Shares which a
Participant may become entitled to acquire under an Award shall be
determined at the end of the Performance Period.
(4) The Compensation Committee shall determine the form in which the Award is
made and its full terms. In particular, the Award may take the form of any
one or more of the following, provided that the terms of the Award are
consistent with the Plan:
(i) as two separate awards, including either or both of:
(a) a bonus award payable at the end of the Investment Period, for an
amount equal to the fair market value of the Matching Shares
subject to the Award at
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the time the Award is made (as determined by the Compensation
Committee); and
(b) an award of an option to acquire the Matching Shares subject to
the Award, exercisable, subject to the other provisions of the
Rules, at the earlier of the Change of Control Date and a date no
sooner than one month after the end of the Investment Period, for
a consideration equal to the fair market value of the Matching
Shares subject to the Award at the time the Award is made (as
determined by the Compensation Committee);
(ii) an option to acquire the Matching Shares exercisable for a nil or a
nominal consideration;
(iii) an award of Matching Shares, subject to restrictions, or a promise
to receive Matching Shares; and
(iv) such other form which the Compensation Committee considers has a
substantially similar purpose or effect.
In the case of an Award consisting of or including an option element
granted in accordance with the requirements of fixed plan accounting under
US generally accepted accounting principles, the option so granted so far
as it relates to the acquisition of Shares (but not any cash amount) shall
be exercisable, with no restriction other than that the Participant is in
Employment, for a short period determined by the Compensation Committee
immediately prior to the expiry of the option by effluxion of time,
notwithstanding that the Performance Condition and/or the requirement to
remain Interested in Investment Shares has not been met.
(5) A Participant shall become entitled to acquire the number of Vested
Matching Shares comprised in an Award or, as the case may be, the bonus
award referred to in Rule 5(4)(1)(a) above and subject to and in accordance
with the form of the Award under, and the last paragraph of, (4) above,
only:
(i) if the Participant remains Interested in the Investment Shares
throughout the Investment Period;
(ii) subject to and in accordance with the Performance Condition in Rule 7
and subject to 8, and
(iii) subject to Rules 9 and 11, if the Participant continues in
Employment throughout the Investment Period.
(6) If a Participant ceases to be Interested in any of the Investment Shares
during the Investment Period the Award will lapse in respect of all the
Matching Shares to which it relates.
(7) During the Investment Period a Participant shall not be entitled to any
dividends or other rights in respect of Matching Shares comprised in an
Award nor shall he be entitled to vote in respect of the Matching Shares.
(8) The Participant shall cease to have any rights in respect of the number of
Matching Shares comprised in an Award which are not Vested Matching Shares
with effect from the end of the Performance Period, and shall cease to have
any rights in respect of all the Matching Shares
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comprised in an Award with effect from the earliest of (i) subject to Rule
9, the cessation of Employment, (ii) his failure to remain Interested in
the Investment Shares or to acquire and commit the minimum number of
Investment Shares required under Rule 4, (iii) the date on which Rule 5(9)
applies and (iv) the date on which Rule 13(13) applies.
(9) An Award is personal to a Participant and cannot be transferred, assigned,
used as security or otherwise charged or turned to account except that the
Award may be transferred if, immediately after the transfer, the
Participant would be Interested in the Award if the Award consisted of
Shares. An Award shall lapse if the Participant does or attempts to do any
such thing or if he is adjudged bankrupt or enters into any arrangement
with his creditors under any formal insolvency procedure or, if the Award
is not held by the Participant, if an event occurs as a result of which he
would cease to be Interested in the Award, if the Award consisted of
Shares.
(10) The receipt of an Award shall not confer on the Participant (unless
otherwise provided in the terms of the Award) any right to the allotment of
a specified number of Shares by the Company or to the transfer of a
specified number of Shares from any particular transferor. The discharge
of the Award shall be in accordance with Rule 12.
6. COMMITMENT OF INVESTMENT SHARES
(1) Any Shares in which an Eligible Person is or becomes Interested under Rule
4 shall be committed to the Plan and held under arrangements approved by
the Compensation Committee so as to constitute the Investment Shares of the
Participant.
(2) The Compensation Committee shall be entitled to rely on a declaration in a
form satisfactory to it that an Eligible Person is or continues to be
Interested in the Investment Shares.
(3) A Participant shall forthwith notify the Compensation Committee if he
ceases to be Interested in the Investment Shares or any of them.
(4) The commitment of Shares to the Plan as Investment Shares shall not of
itself affect any right of the Eligible Person to dividends or other rights
attaching to those Shares.
(5) Shares shall cease to be Investment Shares at the end of the Investment
Period or when the Award lapses under Rule 5(8).
7. PERFORMANCE CONDITION
(1) The number of Matching Shares comprised in an Award which are Vested
Matching Shares shall be determined at the end of the Performance Period.
That number will depend subject to Rule 8 on the ranking of the TSR of the
Company over the Performance Period within the Comparator Group in
accordance with the following table.
8
The Company's rank within Comparator No. of Matching Shares for each Investment
Group Share
--------------------------------------------------------------------------------------
1st 5
2nd 5
3rd 4.5
4th 4
5th 3.5
6th 3
7th 2.5
8th 2
9th or lower 0.5
The rankings set out in the above table are based on a Comparator Group
consisting of fifteen companies including the Company. If the number of
companies in the Comparator Group is different the Compensation Committee
shall adjust the rankings in the above table on a basis which it considers
to be fair and reasonable.
(2) TSR shall be averaged over a proper period before the start and the end of
the relevant Performance Period on such basis as the Compensation Committee
decides from time to time.
(3) The Compensation Committee may, in appropriate circumstances, amend the
Performance Condition in relation to any Award if an event has occurred in
consequence of which the Compensation Committee considers that the
Performance Condition should be amended for the purpose of ensuring that
either the criteria against which the performance of the Company will be
measured will be no less demanding and will be a fairer measure of that
performance or will provide a more effective incentive to Participants.
8. EXCEPTIONAL FINANCIAL CIRCUMSTANCES
(1) If the Compensation Committee determines that exceptional financial
circumstances have occurred or have prevailed during the Performance Period
applicable to an Award, the Compensation Committee shall have power to
determine that the number of Matching Shares which may become Vested
Matching Shares at the end of a Performance Period, in respect of all
Awards having the same Performance Period, shall be changed at the end of
the Performance Period.
(2) In exercising its discretion under this Rule to adjust the number of
Matching Shares which may become Vested Matching Shares at the end of a
Performance Period the Compensation Committee shall have regard to all
factors which they consider appropriate and shall treat all Participants
whose Awards relate to the same Performance Period on a like basis.
(3) This Rule shall not operate to reduce Vested Matching Shares to less than
0.5 of a Matching Share for each Investment Share.
9. SPECIAL SITUATIONS
(1) If a Participant ceases to be in Employment during, but not earlier than
one year after, the start of the Investment Period for any reason, other
than Voluntary Resignation or Termination for Cause, Rule 5 shall apply as
if the number of Matching Shares which the Participant could become
entitled to acquire at the end of the Investment Period, depending
9
on the Company's ranking within the Comparator Group at the end of the
Performance Period under Rule 7 and subject to Rule 8, were reduced to the
Relevant Proportion of the number of Matching Shares to which the
Participant would have been entitled if his Employment had not terminated.
However, if the Company's ranking is 9th or lower (meaning below the median
of the Comparator Group) the Participant shall not be entitled to acquire
any Matching Shares at the end of the Investment Period, except to the
extent (if any) that the Compensation Committee decides. This applies
whether the cessation of Employment occurs during or after the end of the
Performance Period.
In consequence:
(i) Rule 5(5)(iii) shall cease to apply; and
(ii) the Participant shall become entitled to acquire a number of Matching
Shares at the end of the Investment Period (subject to Rule 9(2) and
the reduction by reference to the Relevant Proportion), and dependent
on the ranking of the Company within the Comparator Group under Rule
7(1) at or above the median at the end of the Performance Period and
subject to Rule 8.
(2) If a Participant ceases to be in Employment:
(i) during the first year of an Investment Period in any circumstances,
or
(ii) during an Investment Period after the expiry of the first year of
that period in any circumstances other than those set out in Rule
9(1)
the Award applicable to that Investment Period shall lapse, in respect of
the Investment Period referred to in paragraph (i) above and shall lapse,
except to the extent that the Compensation Committee otherwise decide, in
respect of the Investment Period referred to in paragraph (ii) above.
(3) Subject to any relevant legal or regulatory requirements prevailing in any
jurisdiction, for the purposes of this rule a woman who ceases to be in
Employment due to pregnancy or confinement will be regarded as having
ceased Employment on the date on which she indicates that she does not
intend to return to work. In the absence of such indication she will be
regarded as having ceased Employment on the last day on which she is
entitled to return to work. A woman who exercises her statutory right or
any equivalent contractual right to return to work following pregnancy or
confinement shall not be treated as having ceased to be in employment.
10. VARIATION OF CAPITAL
(1) In the event of any increase or variation in the capital of the Company
arising out of or in connection with a capitalisation issue, an offer to
the holders of Shares, a rights issue, a subdivision, consolidation or
reduction of capital, special dividend, demerger, or other variation of
capital, the terms of outstanding Awards and the terms on which Investment
Shares have been contributed to the Plan may be adjusted in such manner as
the Compensation Committee considers appropriate. An adjustment shall not
have effect unless the auditors or other financial advisers appointed by
the Compensation Committee acting as experts and not arbitrators confirm
that in their opinion the adjustment is fair and reasonable and such
confirmation shall be final and binding.
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(2) Participants shall be notified of any adjustment made under this Rule.
11. CHANGE OF CONTROL
(1) If:
(A) any person (and/or persons acting in concert) obtains Control of the
Company as a result or in consequence of making a general offer to
acquire the whole of the issued share capital of the Company which is
made subject to a condition such that if satisfied the person making
the offer will have Control of the Company, or
(B) if any person (and/or persons acting in concert) obtains Control of
the Company other than as a result of or in consequence of making
such general offer but the offeror is bound by Rule 9 of the City
Code on Takeovers and Mergers to make a general offer for the
minority,
then:
(i) in relation to all outstanding Awards the Investment Period shall be
deemed to end on the Change of Control Date and the Performance
Period shall, if it has not already ended, be shortened and deemed to
end on the Change of Control Date;
(ii) the number of Vested Matching Shares which a Participant may become
entitled to acquire shall be determined as at the Change of Control
Date dependent on the Company's ranking within the Comparator Group
under Rule 7 at that date, having regard to paragraph (2) below and
subject to Rule 8; provided that the Company is not applying
Accounting Principles Board Opinion 25 of the Financial Accounting
Standards Board of the United States, to the extent that the value of
any Vested Matching Shares for US tax purposes exceeds three times
the "base amount" applicable to the Participant, as defined in
Section 280G(b)(3) of the United States' Internal Revenue Code, by 20
per cent. or less, the number of Vested Matching Shares will be
reduced by such number as shall be necessary to avoid the imposition
of the excise tax imposed by Section 4999 of the Internal Revenue
Code (or any similar tax that may hereafter be enacted); and
(iii) on the Change of Control Date the Participant shall cease to have
any rights in respect of outstanding Awards except in relation to the
Vested Matching Shares under (ii) above.
(2) For the purpose of paragraph (1) above in determining the Company's TSR the
price of Shares for each of the 60 Dealing Days up to and including the
Change of Control Date shall be deemed to be the higher of the closing
price on the Change of Control Date, as derived from the Stock Exchange
Daily Official List, and the price which would otherwise have been taken
into account in determining the TSR of the Company on each of those Dealing
Days.
(3) If:
(i) under section 425 of the Companies Act 1985 the Court sanctions a
compromise or arrangement for the purposes of or in connection with a
scheme for the
11
reconstruction of the Company or its amalgamation with any other
company or companies, or
(ii) a resolution is passed for the voluntary winding up of the Company
for the purposes of or in connection with a reconstruction or
division of the Company or its business
the terms of outstanding Awards and the terms on which Investment Shares
have been contributed to the Plan will be varied in such manner as the
Compensation Committee considers appropriate. A variation shall not have
effect unless the auditors or other financial advisers appointed by the
Compensation Committee acting as experts and not as arbitrators confirm
that in their opinion the variation is fair and reasonable and such
confirmation shall be final and binding.
12. DISCHARGE OF AWARDS
(1) The manner in which an Award shall be satisfied at the end of the
Investment Period shall depend on the form of the Award determined by the
Compensation Committee under Rule 5(4).
(2) Awards will normally be satisfied by the transfer of the number of Vested
Matching Shares to the Participant, or as he may direct, or to a depository
in the case of ADSs, from the ESOP.
(3) Awards will normally be satisfied within 30 days after the Compensation
Committee has determined the ranking of the Company for the purposes of
Rule 7 subject to Rule 8 or, if later, within 30 days after the end of the
Investment Period or, if the Award is in the form of a right to acquire
Shares, within 30 days after the Participant gives notice of exercise of
that right to the Company.
(4) Any transfer of Shares is subject to the Compensation Committee being
satisfied that the transfer would be lawful in the relevant jurisdiction.
(5) The transfer of Shares under the Plan is subject to obtaining any approval
or consent required under the provisions of the document "Admission of
Securities to Listing" published by the London Stock Exchange, or under the
City Code on Take-overs and Mergers, or of any applicable regulations or
enactment (whether in the United Kingdom or overseas). The Participant
shall do all things necessary to obtain or obviate the need for such
consent.
13. MISCELLANEOUS
(1) The Plan shall be administered by the Compensation Committee whose decision
on any matter concerning the Plan shall be final and binding unless it is a
matter on which the decision of the auditors or any other financial adviser
is final and binding.
(2) The Compensation Committee shall approve all documents required in
connection with Awards.
(3) The Compensation Committee may establish arrangements under which the cash
value of an Award may be paid to an Eligible Person in lieu of the
discharge of the Award under Rule 12.
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(4) The cost of establishing and operating the Plan (including but not limited
to stamp duty and stamp duty reserve tax) shall be borne by the Company.
The costs relating to the transfer of Shares may be borne by the relevant
Group Companies pro rata to the number of their employees participating or
eligible to participate under the Plan.
(5) All notices under the Plan shall be in writing. Any notice or other
document to be served under the Plan may be delivered or sent by first
class post, recorded delivery post or telex or facsimile process, and if to
a Group Company to their respective registered offices for the time being,
and if to a Participant, to the Participant at the address which he shall
give to the Company for the purpose, or failing any such address to his
last known place of abode.
(6) Any notice or document shall be deemed to have been served:
(a) if delivered, at the time of delivery; or
(b) if posted, at 10.00 a.m. on the second business day after it was put
into the post; or
(c) if sent by telex or facsimile process, at the time of despatch.
(7) In proving service of a notice or document it shall be sufficient to prove
that delivery was made or that the envelope containing the notice or
document was properly addressed, prepaid and posted or that the telex or
facsimile message was properly addressed and despatched as the case may be.
(8) Participation in the Plan is a matter separate from any contract of
employment or other agreement and any benefit conferred by the Plan shall
not be counted for pension or any other purpose.
(9) A Participant shall have no entitlement by way of compensation or damages
resulting from the termination of the office or employment by virtue of
which he is or may be eligible to participate in the Plan for the loss of
any right or benefit or prospective right or benefit under the Plan which
he might otherwise have enjoyed whether the compensation is claimed for
wrongful dismissal or otherwise.
(10) The Plan is intended to operate on a worldwide basis and, accordingly, the
Compensation Committee may adopt any rate of exchange for converting any
currency into any other currency as they decide at any time and from time
to time for any purpose in connection with the Plan.
(11) No obligation to transfer or procure the transfer of Shares shall arise,
nor shall there be any obligation to do any other thing in relation to a
Participant under or in connection with the Plan or the making or Vesting
of any Award unless and until the Compensation Committee is satisfied in
its discretion that either:
(i) the Participant has made payment or has made arrangements
satisfactory to the Company for the payment to it and/or to any Group
Member or other person of such sum as is, in the sole discretion of
the Compensation Committee, sufficient to settle any liability for
any tax and/or, unless the Compensation Committee otherwise
determines, social security contributions or the like (in any
jurisdiction) which are or would be recoverable from such person in
connection with the Plan or any Award
13
and in respect of which the Group Member or other person is or may be
liable to account (in any jurisdiction); or
(ii) the Participant has entered into an agreement satisfactory to the
Compensation Committee to ensure that such a payment will be made by
the Participant.
(12) Receipt of an Award shall authorise the Company or any person nominated by
the Company at its sole discretion to sell such number of Shares from the
number to which the Award relates as it may estimate as being necessary to
produce a cash sum sufficient to meet the liabilities referred to in sub-
rule (11) and account to any Group Member or other person and/or the
relevant authorities in respect of such tax and/or social security
liabilities (in any jurisdiction at the appropriate time).
(13) If a Participant owes a debt or other monetary obligation to a Group
Company, the Company, or any Group Company, as appropriate, has a charge
over the Participant's interest in the Plan (but not over his Investment
Shares). Satisfaction of an Award may be withheld until the Participant
has discharged to the satisfaction of the Committee the debt or other
monetary obligation. Without prejudice to the generality of the foregoing
if a Participant who has ceased to be in Employment breaches any
contractual obligation owed to any Group Company relating to restrictions
on that Participant following the termination of his Employment the
Participant's Award shall be forfeited.
(14) The Plan and any Award shall be governed by and construed in accordance
with the laws of England and Wales.
(15) The Plan shall apply to JMS with all modifications that the Compensation
Committee considers necessary or desirable.
(16) Two or more Eligible Persons who have been invited to participate in the
Plan or two or more Participants ("Joint Participants") may together apply
to the Compensation Committee to treat Awards respectively made or to be
made to them pursuant to offers of participation made at the same time as
joint Awards ("Joint Awards") in accordance with this sub-rule. Such an
application may be made at any time during the Investment Period applicable
to those Awards or offers of participation. The Compensation Committee may
accept or reject such an application. If it accepts an application:
(i) the Joint Awards shall relate to a number of Matching Shares the
Compensation Committee determines, provided that the number of
Matching Shares subject to the Joint Awards may not exceed five
Matching Shares for each of the Investment Shares contributed in
aggregate by the Joint Participants;
(ii) The Compensation Committee may alter the form of Award made to any of
the Joint Participants;
(iii) the Compensation Committee may limit the value or amount of the Award
made to any of the Joint Participants in such manner as it considers
appropriate, consistent with the form of Award made in accordance
with Rule 5(4)(i), where appropriate;
(iv) the Compensation Committee may allocate the aggregate of the Matching
Shares under the Joint Awards amongst the Joint Participants and
decouple any of the Joint
14
Awards from the Investment Shares in such manner as the Compensation
Committee considers appropriate.
14. AMENDMENT
(1) Subject to sub-rules (2) and (3) below, the Compensation Committee may at
any time alter or add to all or any provisions of the Plan, or the terms of
all Awards made under it, in any respect.
(2) No alteration or addition to the advantage of Eligible Persons or
Participants shall be made under sub-rule (1) without the prior approval of
the Company in general meeting, other than a minor amendment to benefit the
administration of the Plan, to take account of a change in legislation or
to obtain or maintain favourable tax, exchange control or regulatory
treatment for Eligible Persons, Participants or Group Companies.
(3) No alteration or addition shall be made to the terms of any Award made
prior to the date of the alteration or addition which would adversely
affect the Participant's interest in that Award in any material respect
without the consent of the Participant.
15. DURATION
No Award may be made later than 2 September, 2004.
15
APPENDIX 1
PARTICIPATION CONSEQUENT ON THE MERGER OF THE
COMPANY AND YOUNG & RUBICAM, INC
This Appendix constitutes the Young & Rubicam part of the WPP Leadership Equity
Acquisition Plan ("Y & R Part") applicable to those employees of Young &
Rubicam, Inc and its subsidiaries ("Y & R Participants") who are offered the
opportunity to participate in the Plan as a result of the merger of the Company
and Young & Rubicam, Inc. The terms of the Y & R Part are identical to those of
the Plan to which the Y & R Part is appended except as set out below:
1. The definition of "Investment Period" in Rule 2(1), shall apply as if Y & R
Participants had been offered participation in the Plan on 22 September
1999.
2. The definition of "Performance Period" in Rule 2(1), shall apply as if Y &
R Participants had been invited to participate in the Plan on 22 September
1999.
3. Rule 3.3 shall apply as if Awards were received by Y & R Participants in
1999.
4. Rules 5(1) shall apply as if Y & R Participants were invited to participate
on 22 September 1999.
5. The number of Matching Shares which the Compensation Committee determines
that a Participant may become entitled to acquire under Rule 5(3) shall be
reduced in the proportion that the period from the date on which the
Participant was invited to participate in the Plan to 22nd September, 2004
(being the end of the Investment Period) bears to 5 years (being the
Investment Period from 22nd September, 1999 to 22nd September, 2004). That
proportion is settled being four fifths of the number of Matching Shares
otherwise available for invitations issued following shareholder approval
in September 2000. Rule 7(1) shall be applied accordingly.
6. In Rule 5(5), delete the words "throughout the Investment Period" wherever
they appear and replace those words with the words "from the date the
Investment Shares are acquired until the end of the Investment Period".
7. Rules 9(1) and 9(2) shall be modified.
(i) The references to "one year" in Rules 9(1) and 9(2) shall be taken to
be a proportion of one year and that period shall commence on the
date on which the Participant is invited to participate in the Plan
(and not at the start of the Investment Period which is deemed to
have commenced on 22nd September, 1999). The proportion shall be the
same proportion as is calculated under paragraph 5 above for the
purpose of determining the number of Matching Shares to which the
Participant may become entitled.
(ii) The "Relevant Proportion" shall be taken as the proportion that the
length of the period from the date on which the Participant is
invited to participate in the Plan to the occurrence of the Relevant
Event bears to the length of the period from the date on which the
Participant is invited to participate in the Plan to 22nd September,
2004, being the end of the Investment Period (calculated in days).
16
APPENDIX 2
MR M DOLAN
This Appendix applies solely to Mr M. Dolan whose participation in the Plan is
proposed in unusual circumstances. Mr Dolan, as a Y& R Participant, will
participate in the Plan on the basis as modified by Appendix 1.
17
APPENDIX 3
PARTICIPATION ON OR AFTER 1ST JANUARY, 2001
(other than for directors of WPP Group plc)
This Appendix shall be treated as a separate long-term incentive plan which does
not involve the issue of new shares in WPP Group plc and in which directors of
WPP Group plc shall not be eligible to participate. It shall also form part of
the Leadership Equity Acquisition Plan (the "Plan") and constitute all of the
terms of the Plan for Participants joining on or after 1st January, 2001 (other
than directors of WPP Group plc). Accordingly the terms of the Plan for such
Participants shall be identical to those set out above (that is as adopted on
22nd September, 1999 and as amended on 8th December, 1999 in both cases by the
Compensation Committee but without Appendices 1 and 2 which relate to the merger
of the Company and Young & Rubicam, Inc) and shall be as notified in the
following manner.
1. Rule 2 (Interpretation)
Definition of "Eligible Person" excludes a director of the Company.
Definition of "Interested". The Compensation Committee may decide on
different or extended arrangements to determine whether an Eligible Person
or Participant is interested in Shares (and has committed them to the Plan)
than the circumstances set out in this definition.
Definitions of "Investment Period" and "Performance Period". The
Compensation Committee may decide on periods of a different length and/or
periods commencing with effect from any date it selects for the purpose of
these definitions.
2. Rule 4 (Acquisition of Investment Shares)
The minimum and maximum numbers/values of Shares which an Eligible Person
may commit to Plan shall not be as set out in sub-rules (2) and (3) but
shall be determined by the Compensation Committee.
The after tax proceeds of any short term incentive scheme, and/or Shares
which vest under any LTIPs and/or the after tax cash proceeds of awards
made under any LTIPs may relate under Rule 4(5) to a year other than the
year in which the Participant agrees to participate in the Plan.
The Compensation Committee may further modify Rule 4 in respect of any
Award.
3. Rule 5 (Awards)
Rule 5(3). The Compensation Committee may determine a different proportion
of Matching Shares to Investment Shares than the ratio of 5 to 1.
4. Rule 7 (Performance Condition)
The Compensation Committee may determine a different table of rankings and
numbers of Matching Shares.
18
5. Rule 9 (Special Situations)
The period of one year adopted for vesting purposes in this Rule may be a
different period chosen by the Compensation Committee.
6. Rule 12 (Discharge of Awards)
An award cannot be satisfied by the allotment of new Shares.