Exhibit 4.6
WPP GROUP PLC
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PERFORMANCE SHARE PLAN
(as amended by Resolutions of the
Compensation Committee passed on
21 July 1995, 17 January 1996
and 9th December 1999)
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WPP GROUP PLC
Performance Share Plan
(As amended by Resolutions of the Compensation Committee
passed on 21 July 1995, 17 January 1996 and 9th December 1999)
1. PURPOSE
The Performance Share Plan (the "Plan") of WPP Group plc (the "Company"),
is part of a continuing program of key executive incentive compensation
authorised by the Directors of the Company on 21st June, 1993. The Plan is
intended to benefit the Company by motivating senior executives who are
materially important to the development of the Company's businesses by
creating an incentive for them to remain in the employment of the Company
and/or as Directors and to work the best of their abilities for the
achievement of the Company's strategic growth objectives. This purpose is
intended to be accomplished under the Plan by notionally allocating
Performance Shares representing shares or bonus units under the Plan to
such key personnel (in addition to their annual cash compensation and share
options) which, if performance objectives and service requirements with the
Company are achieved, will permit them to share in the Company's success.
2. PARTICIPANTS
Participants in the Plan shall be executive directors or full-time
employees of the Company or its subsidiary companies (or any company which
is contracted to provide the services of an executive director to any such
company) who are determined by the Compensation Committee (the "Committee")
of the Board of Directors (the "Board") of the Company, in its discretion,
to be senior management personnel important to the growth of the Company,
and to whom the Committee shall make any award in writing under the Plan.
3. PERFORMANCE PERIOD
Except as provided in Section 5, the Performance Period over which the
achievement of any performance objectives shall be determined, shall not be
less than three years.
4. PERFORMANCE SHARE AWARDS
Performance Share Awards shall be made pursuant to the following
guidelines:
(a) Initial Grants. After the approval of this Plan by the Board, the
Committee shall establish a specified performance period over which a
specified performance objective is targeted for achievement. Initial
awards shall be made to such number of Participants as then
determined by the Committee. In making its determination of who shall
be Participants the Committee shall take into account such factors as
the Participants level of responsibility, potential to the impact the
achievement of the performance objective(s), job performance, level
and types of compensation and such other factors as the Committee
deems relevant;
(b) Notwithstanding the provisions of paragraph (a) the Committee in its
discretion may establish at the time it established the targeted
performance objective a minimum performance target and may provide
for payment on a reduced scale if the targeted performance objective
is not achieved but the minimum performance target is met or
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exceeded. Similarly, the Committee in its discretion may allow a greater
payment if any targeted objective is exceeded;
(c) Subsequent Awards. During the term of the Plan additional Performance
Shares may be awarded in the discretion of the Committee, either (i) to
new participants in the Plan or (ii) to any one or more of the initial
Participants in the Plan in respect of Subsequent Performance Periods;
(d) Notice of Awards. Upon the making of any award by the Committee the
Participant shall be advised of the number of Performance Shares awarded
to him or (or her) and of the terms of the award;
(e) Form of Awards. The Committee may, at its absolute discretion, determine
that an Award be made in the following forms:
(i) as two separate awards, including either or both of:
(a) a bonus award payable at the end of the Performance Period,
for an amount equal to the fair market value of the
Performance Shares subject to the award at the time the award
is made (as determined by the Compensation Committee); and
(b) an award of an option to acquire Shares in the Company
equivalent to the Performance Shares subject to the award,
normally exercisable ,subject to the other provisions of the
Rules, no sooner than one month after the end of the
Performance Period, for a consideration equal to the fair
market value of the Performance Shares subject to the award
at the time the award is made (as determined by the
Compensation Committee);
(ii) an option to acquire the Performance Shares exercisable for a nil
or a nominal consideration;
(iii) an award of Performance Shares, subject to restrictions, or a
promise to receive Performance 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 with the Company or its subsidiary companies, for a short
period determined by the Committee immediately prior to the expiry of the
option by effluxion of time, notwithstanding that the performance
objective has not been met.
5. PERFORMANCE SHARES
For the purposes of this Plan, the term Performance Shares shall be a
reference to units of bonus or Shares and the award thereof shall represent
the contingent right to received a sum of money per unit held or a transfer
of Shares, subject to the form of the award under section 4(e) if specified
performance objectives are achieved. The amount of money contingently
payable
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per Performance Share or the number of Shares to be transferred shall be
determined in accordance with Section 7 or otherwise as the Company may
choose. The performance objectives will be established for each Performance
Period by the Committee. Performance Objectives need not be the same in
respect of all Participants and may be established separately for the
Company as a whole [or for its various groups, divisions and subsidiaries],
all as the Committee may determine, in its discretion. The performance
objectives may be defined in terms of the comparative total shareholder
return performance within a comparator group selected by the Committee.
Awards of Performance Shares may be conditional on the Participants'
continued employment in the Group, or continuing to be a Director of the
Company or a Subsidiary (or contracted to provide the services of any
executive director to the Group) over the Performance Period or in any other
manner the Committee may determine. In the event of a public tender for all
or any part of the ordinary shares of the Company or in the event of any
proposal to merge or consolidate the Company with another company or to
liquidate or sell substantially all of the assets for the Company, the
Committee may, in its discretion, change or eliminate any Performance Period
relating to any performance objective.
6. PERFORMANCE MEASUREMENT
The determination of Performance Share Payments shall be made for the
Committee on the basis of performance over the applicable Performance
Period.
7. PERFORMANCE SHARE PAYMENT
(a) The payment amount which a holder of Performance Shares shall be
entitled to receive if the applicable targeted performance objective is
met shall be an amount equal to the market value of one ordinary share
of the Company's stock on the date of the expiration of the applicable
Performance Period multiplied by the number of Performance Shares held;
(b) For the purposes hereof market value as of any date shall be the value
as of said date as reasonably determined by the Committee;
(c) Following the determination by the Committee of the level of payment to
which a holder of Performance Shares has become entitled, the Committee
may in its absolute discretion decide to procure the transfer to the
individual of a number of ordinary shares of the Company's stock in
lieu of such payment save that where the individuals are directors of
WWP Group plc, the Committee may only exercise this discretion on or
after 1 January 1996. Subject to section 7(d) below, the number of
shares transferred would be the largest whole number being not greater
than the number calculated by the equation:
A Divided By B
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Where A = the payment amount calculated under Section 7(a)
B = the market value of one ordinary share of the Company's
stock on the date of the expiration of the applicable
Performance Period
(d) As an alternative to the calculation set out in section 7(c) above the
Committee may decide that the number of shares transferred shall be
determined by the actual acquisition of shares using an amount of cash
equivalent in the value to the relevant level of
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Performance Share value (as calculated under section 7 (a)), such
acquisition being made at the best price reasonably available at the
date.
8. PERFORMANCE THRESHOLD
Notwithstanding Sections 3, 4 and 5 above, the Committee may set a
performance threshold for any Performance Period. If the performance
threshold is not satisfied for any Performance Period no payments or
transfer of shares will be made to any participant on account of that
Performance Period.
9. OPTIONAL DEFERRED PAYMENTS
Subject to the provisions of the following paragraphs of this Section,
distribution of amounts or transfer of shares to which a Participant is
entitled in respect of the Performance Shares shall be made as soon as
practicable after the holder of such Performance Shares becomes entitled
thereto.
Prior to the end of the performance Period the Participant may make an
election to have distribution of any amount he may be entitled to receive in
respect to such Performance Shares (whether in cash, in ordinary shares if
the Company decides, or a combination thereof as determined by the Company)
deferred until such year as he may elect, effect, after the year in which
the amount would otherwise be paid or shares transferred to him, up to and
including the year of his retirement, and at the same time (prior to the
time the award is made to him and prior to the date he becomes entitled to
such award) may elect to have such amount paid to him in such deferred
annual instalments over such years as he shall then specify. If a
Participant elects any such deferral the following rules shall apply to the
deferred payment;
(a) Such election shall be irrevocable;
(b) The right to such deferred payment shall be nonassignable, and any
attempted transfer or assignment, or any pledge or other hypothecation
of such right, shall be void and of no effect;
(c) Except in the case of a Participant who also participates in the
Company's Leadership Equity Acquisition Plan ("LEAP"), in the event of
death during the deferral period of a Participant who has elected a
deferred payment the unpaid balance of the deferred amount owing to him
at the time of his death shall be distributed to his estate within six
months of the date of his death, irrespective of whether or not the
deferral period elected has expired. In the case of a Participant who
also participates in LEAP and whose unpaid balance is represented by
Shares and being used towards the Participant's Investment Shares in
LEAP, the unpaid balance shall be retained until the end of the
relevant investment period in LEAP;
(d) Until payment is made to a Participant of the full deferred payment (or
transfer of shares) to which he is entitled the Company will accrue for
the account of the Participant during the period of deferral an amount
equal to the dividends paid on the Company's ordinary shares during
such period adjusted by the change in the capital value of the shares
multiplied by the number of Performance Shares still unpaid and held
for his account in accordance with his deferred payment election. At
the time the Participant is entitled to receive any amount due him
under the Plan, in accordance with his election, there shall also be
paid to such participant the accrued dividend equivalent amount, plus
or minus the adjusted capital value of the shares, either in lump sum
or in deferred annual instalments as specified by him at the time of
this original election.
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Notwithstanding any election of any Participant to receive payment under
the Plan on a deferred basis as provided above, the Committee in its
sole discretion may, at any time, in respect of all or any one or more
Participants who have made such election, terminate such election and
make immediate distribution of the amount to which the Participant is
then entitled; and the Committee, in its discretion, may amend the
forgoing provisions hereof relating to the election of deferred payments
and the rules applicable thereto if, in its judgement, the tax benefits
intended by such provisions and rules will not be adversely affected. An
election may not be terminated or amended by the Committee in the case
of a Participant who also participates in LEAP in respect of any
deferral if the shares underlying the deferral are committed to LEAP
(unless the Participant gives his consent to the termination or
amendment).
10. CONDITIONS TO PAYMENTS
Except as otherwise herein provided or determined by the Committee, a
Participant, in order to be entitled to receive any payment or the transfer
of Company shares in respect of Performance Shares awarded to him must be a
Director of the Company or in the employ of the Company or a subsidiary of
the Company (or any company which is contracted to provide the services of
an executive director to any such company) on the expiration of the
relevant performance period and must have been such continuously from the
time of the award of the Performance Shares except for leaves of absence
which may be approved by the Committee. No vested interest in any payment
under the Plan shall accrue during the term of the Performance Period and
no payment nor transfer of Company shares in respect of Performance Shares
shall be required to be made to any Participant whose employment with the
Company or a subsidiary is terminated (or the relevant services contract is
terminated), with or without cause, prior to the time he is entitled to
receive a distribution hereunder; provided, however, (a) that if a
participant in the Plan retires upon the attainment of age 55 prior to the
time he is entitled to receive distribution of any Performance Shares
awarded to him, the amount of payment to him shall be pro-rated in such
manner as the Committee shall reasonably determine, and (b) that the
Committee, in its absolute discretion, may make such pro-rate or other
payment (or no payment), as it may determine, to a Participant whose
employment terminates (on account of death, disability or otherwise) prior
to the time he is entitled to receive distribution on his Performance
Shares and prior to his retirement at age 55. If termination is on account
of death the Committee may make payment of any distribution it authorises
to the Participant's surviving spouse, heirs or estate, as the Committee
may determine. If a participant elects under section 9 to defer
distribution of the amount to which he may be entitled until a later year
and the deferring participant's employment with the Company or another WWP
group company terminates for any reason other than Voluntary Resignation or
Termination for Cause prior to the end of the deferral period but after the
end of the performance period, then at the end of the deferral period the
participant will be entitled to receive the full distribution of the amount
(or transfer of shares) to which he would have otherwise been entitled had
his employment not terminated. If a participant so elects and his
employment with the Company or another WPP group company terminates by
reason of Voluntary Resignation or Termination for Cause prior to the end
of the deferral period but after the end of the performance period, then
distribution to which the participant would otherwise have been entitled
had his employment not terminated shall be forfeited. In this section
"Voluntary Resignation" and "Termination for Cause" have the same meanings
as in LEAP. The foregoing provisions of this section shall apply on a like
basis to a Participant which is a company supplying the services of an
executive director to the Group as the Committee reasonably determines,
except that any transfer of shares shall be subject to compliance with
applicable law.
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11. COMMITTEE MEMBERSHIP; AUTHORITY
The Plan shall be administered by the members of the Compensation of the
Board so long as it shall consist solely of members of the Board who are
not Participants who are not Participants in the Plan and who shall not be,
and have not been at any time during the prior year, eligible to become
Participants therein, and who have not been at any time during the prior
year eligible for selection as a person to whom shares may be allocated or
to whom share options may be granted pursuant to any other plan of the
Company or any of its affiliates entitling the participants therein to
acquire shares or share option of the Company or any of its affiliates. In
the event said Committee, by reason of changes in its membership, shall no
longer be so qualified, the Board shall appoint a new Committee to
administer the Plan, which shall consist solely of not less than three (3)
members of the Board who are so qualified. The said Committee shall have
plenary authority to interpret the Plan, to establish any rules or
regulations relating to the Plan which it determines to be appropriate, and
to make any other determination which it believes necessary or advisable
for the proper administration of the Plan. Its decisions in matters
relating to the Plan shall be final and conclusive on the Company and all
Participants.
12. DETERMINATION OF ACHIEVEMENT OF OBJECTIVES
Not in limitation of its authority as provided for in the preceding
section, the Committee in regard to any performance award authorised by it,
may thereafter change or modify the terms of the award and the Committee
may determine reasonably whether any performance objective of any award has
been met.
13. PAYMENTS IN ORDINARY SHARES; SOURCE OF SHARES
It is anticipated that if the Company chooses to exercise its discretion
contained within Section 7(c) or 7(d) any Company shares delivered pursuant
to the terms of the Plan will be ordinary shares or American Depository
Receipts representing an interest in the Company's ordinary shares acquired
by the WPP Group plc UK ESOP or the WPP Group plc ROW ESOP or the WPP Group
plc Grantor Trust (as appropriate) prior to or during the term of the Plan.
Shares delivered to Participants hereunder in satisfaction of Performance
Share rights after release of any conditions applicable thereto may
nonetheless thereafter be restricted stock under the Securities Act of
1933, as presently amended, and the certificates for such Shares may have a
legend imprinted thereon restricting the resale of said shares except in a
registered offering or pursuant to an available exemption from
registration.
14. AMENDMENT OF PLAN
The Committee shall have the authority to make amendments and revisions to
this Plan.
15. ADDITIONAL PROVISIONS
The following additional terms and provisions apply to the Plan:
(a) The award of Performance Shares to a Participant in the Plan shall
create no rights in such participant as a shareholder of the Company;
(b) No adjustment shall be made in the number of Performance Shares
awarded on account of cash dividends which may be paid, or other
rights which may be issued to, the Company's ordinary shareholders
during the term of the Plan except as stated in subparagraph (c)
below;
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(c) In the event of stock dividends, stock splits or reverse stock splits,
affecting the number of Company shares during the term of the Plan,
appropriate revision shall be made by the Committee (i) in the
targeted performance objectives, and (ii) in the number of Performance
Shares awarded to reflect the effect of such stock dividend, stock
split or reverse stock split on the interests of the Participants in
the Plan;
(d) No Participant in the Plan shall have any right because he is a
Participant in the Plan to continue in the employ of the Company or of
any of its subsidiaries for any period of time, or any right to a
continuation of his present or any other rate of compensation, and
such rights and powers as the Company or any of such subsidiaries now
has or which it may have in the future to dismiss or discharge any
Participant from his employment or to change the assignments of any
Participant are expressly reserved to the Company nor shall he have
any right to claim compensation for the cancellation of his
Performance Shares as a result of termination of his employment for
any reason;
(e) The Company at the time any payment is made under the Plan is
authorised to withhold from such payment any amount necessary to
satisfy income tax withholding requirements in respect of such
payment. Alternatively, and if the Company chooses to exercise its
discretion contained within Section 7(c) or 7(d) if the Participant
shall pay to the Company such cash amount or additional cash amount as
may be necessary to satisfy withholding requirements he shall be
entitled to receive delivery of all shares due to him hereunder if the
Company elects to satisfy his entitlement in Company shares.
16. NON-ASSIGNABILITY
Rights under the Plan and in respect of Shares granted under the Plan are
not transferable and may not be assigned or pledged by any Participant at
any time, and no recognition shall be required to be given by the Company
to any attempted assignment of Performance Shares. This non-assignability
shall not apply to any shares of the Company delivered to Participants
hereunder after such Performance Shares shall be fully vested in the holder
thereof.
17. PLAN A PART OF CONTINUING COMPENSATION PROGRAM
This Plan is part of a continuing program of incentive compensation for
senior management of the Company and is expected to be supplemented or
continued in effect after the term hereof by an additional plan or plans as
approved by the Board of Directors.
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