Exhibit 10.1
THE INTERPUBLIC GROUP OF
COMPANIES, INC.
2009 PERFORMANCE INCENTIVE
PLAN
Section 1.
Purpose.
The purposes of the Plan are to
promote the interests of the Company and its shareholders by
enabling the Company to:
(a) attract,
retain, and motivate talented individuals as Eligible
Employees;
(b) provide
Eligible Employees with cash and equity-based incentives tied to
the achievement of business, financial, and strategic objectives of
the Company and its Subsidiaries and Affiliates; and
(c) provide
Eligible Employees with incentives and opportunities tied to the
Company’s Common Stock.
Section 2.
Definitions.
Unless the context clearly indicates
otherwise, the following terms, when used in the Plan in
capitalized form, shall have the meanings set forth
below:
“ Affiliate ”
means any corporation or other entity (other than the Company or
one of its Subsidiaries) in which the Company has a
“controlling interest,” as defined in Treas. Reg.
§§ 1.409A-1(b)(5)(iii)(E)(1) and 1.414(c)-2(b)(i),
provided that the language “at least 40 percent” is
used instead of “at least 80 percent” each place it
appears in Treas. Reg. § 1.414(c)-2(b)(2)(i).
“ Award ” means
any grant or award under the Plan, as evidenced in an Award
Agreement.
“ Award Agreement
” means (a) any written agreement with respect to an Award
that is entered into and delivered to a Participant as provided in
Section 12(a) hereof, and any amendment thereto, or (b)
an EIP Award.
“ Board ” means
the Board of Directors of the Company.
“ Cause ” means,
with respect to any Participant: (a) a material breach by the
Participant of a provision in an employment agreement with
Interpublic or an Affiliate that, if capable of being cured, has
not been cured within 15 days after the Participant receives
written notice from his Employer of such breach; (b)
misappropriation by the Participant of funds or property of the
Company or an Affiliate; (c) any attempt by the Participant to
secure any personal profit related to the business of the Company
or an Affiliate that is not approved in writing by the Board or by
the person to whom the Participant reports directly; (d) fraud,
material dishonesty, gross negligence, gross malfeasance, or
insubordination by the Participant, or willful (1) failure by
the Participant to follow the code of conduct of the Company or an
Affiliate or (2) misconduct by the Participant in the
performance of his duties as an employee of the Company or an
Affiliate, excluding in each case any act (or series of acts) taken
in good faith by the Participant that does not (and in the
aggregate do not) cause material harm to the Company or an
Affiliate; (e) refusal or failure by the Participant to attempt in
good faith to perform the Participant’s duties as an employee
or to follow a reasonable good-faith direction of the Board or the
person to whom the Participant reports directly that has not been
cured within 15 days after the Participant receives written notice
from his Employer of such refusal or failure; (f) commission
by the Participant, or a formal charge or indictment alleging
commission by the Participant, of a felony or a crime involving
dishonesty, fraud, or moral
turpitude; or (g) conduct by the
Participant that is clearly prohibited by the policy of the Company
or an Affiliate prohibiting discrimination or harassment based on
age, gender, race, religion, disability, national origin or any
other protected category.
“ Change of Control
” means:
(a) Subject
to items (b) and (c) of this definition below, the first to occur
of the following events:
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(1)
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Any person (within the meaning of
Sections 13(d) and 14(d) of the Exchange Act becomes the beneficial
owner (within the meaning of Rule 13d-3 under the Exchange Act) of
stock that, together with other stock held by such person,
possesses more than 50 percent of the combined voting power of the
Company's then-outstanding stock;
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(2)
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Any person (within the meaning of
Sections 13(d) and 14(d) of the Exchange Act) acquires (or has
acquired during the 12-month period ending on the date of the most
recent acquisition by such person) ownership of stock of the
Company possessing 30 percent or more of the combined voting power
of the Company's then-outstanding stock;
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(3)
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Any person (within the meaning of
Sections 13(d) and 14(d) of the Exchange Act) acquires (or has
acquired during the 12-month period ending on the date of the most
recent acquisition by such person) assets from the Company that
have a total gross fair market value equal to 40 percent or more of
the total gross fair market value of all of the assets of the
Company immediately prior to such acquisition or acquisitions
(where gross fair market value is determined without regard to any
associated liabilities); or
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(4)
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During any 12-month period, a
majority of the members of the Board is replaced by directors whose
appointment or election is not endorsed by a majority of the
members of the Board before the date of their appointment or
election.
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(b)
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A Change of Control shall not be
deemed to occur by reason of:
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(1)
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The acquisition of additional
control of the Company by any person or persons acting as a group
that is considered to “effectively control” the Company
(within the meaning of guidance issued under Section 409A of the
Code); or
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(2)
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A transfer of assets to any entity
controlled by the shareholders of the Company immediately after
such transfer, including a transfer to (A) a shareholder of
the Company (immediately before such transfer) in exchange for or
with respect to its stock, (B) an entity, 50 percent or more
of the total value or voting power of which is owned (immediately
after such transfer) directly or indirectly by the Company,
(C) a person or persons acting as a group that owns
(immediately after such transfer) directly or indirectly 50 percent
or more of the total value or voting power of all outstanding stock
of the Company, or (D) an entity, at least 50 percent of the
total value or voting power of which is owned (immediately after
such transfer) directly or indirectly by a person described in
clause (C), above.
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(c) Notwithstanding
any other provision of this definition, a Change of Control shall
not be deemed to have occurred unless the relevant facts and
circumstances give rise to a change in the ownership or effective
control of the Company, or in the ownership of a substantial
portion of the assets of the Company, within the meaning of Section
409A(a)(2)(A)(v) of the Code.
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“ Code ” means
the Internal Revenue Code of 1986, as amended.
“ Committee ”
means the committee established by the Board pursuant to
Section 3 hereof.
“ Common Stock
” means the Company’s $0.10 par value common
stock.
“ Company ” means
The Interpublic Group of Companies, Inc.
“ Corporate
Transaction ” means any stock split, stock dividend,
extraordinary cash dividend, recapitalization, reorganization,
merger, consolidation, split-up, spin-off, combination, exchange of
shares, warrants or rights offering to purchase Common Stock at a
price substantially below fair market value, or other similar
event.
“ Disability ”
means long-term disability as defined under the terms of the
Company’s applicable long-term disability plans or
policies.
“ Dividend Equivalent
” means an Award of a contractual right to receive payments
equivalent to the amount of dividends paid with respect to Shares,
as described in Section 10(a) hereof.
“ Eligible
Employee ” means any employee of the Company, its
Subsidiaries, or its Affiliates determined by the Committee to be
responsible for, or able to contribute to, the growth,
profitability, and success of the Company. However, this term does
not include directors who are not employees of such
entities.
“ Employer ”
means, with respect to a Participant as of any date, the Company,
Subsidiary, or Affiliate that employs the Participant as of such
date.
“ Exchange Act
” means the Securities Exchange Act of 1934, as
amended.
“ Executive Incentive
Performance Award ” or “EIP Award
” means the target bonus established by the Committee for a
Participant, which may be communicated to the Participant in the
form of a letter, granted under Section 9 hereof and payable
in cash, Shares, or a combination, in accordance with the terms of
the Award.
“ Executive
Officer ” means those persons who are officers of the
Company within the meaning of Rule 16a-l(f) of the
Exchange Act.
“ Full Value Award
” means an Award, other than an Option, SAR or Dividend
Equivalent, that is settled by the issuance of Shares.
“ Incentive
Stock Option ” or “ ISO ”
means an Option intended to meet the requirements of
Section 422 of the Code.
“ Nonstatutory
Stock Option ” means an Option that is not
intended to be an Incentive Stock Option.
“ Option ” means
the right to purchase the number of Shares specified by the
Committee, at a price and during a term fixed by the Committee in
accordance with the Plan and subject to any other limitations and
restrictions (required by law or otherwise) as the Plan and the
Committee shall impose.
“ Other Stock-Based
Awards ” means an equity-based or equity-related Award
granted under Section 7 hereof that is not otherwise described
by the terms of the Plan.
“ Participant ”
means an Eligible Employee selected by the Committee to receive an
Award under the Plan.
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“ Performance Cash
” means an Award of a contractual right granted under
Section 8 hereof to receive a dollar amount that becomes
vested upon the attainment, in whole or in part, of Performance
Objectives specified by the Committee.
“ Performance
Criteria ” means earnings per share (basic or
diluted); operating income; operating profit after tax; operating
income growth; net operating profit; gross or operating margins;
operating efficiency; revenue; revenue growth; organic revenue
growth; return on equity; Share price (including growth measures
and total shareholder return); cash flow (including operating cash
flow, free cash flow, cash flow return on equity, and cash flow
return on investment); earnings before interest, taxes,
depreciation, and/or amortization; net earnings or net income
(before or after taxes); net sales or revenue growth; return
measures (including return on assets, capital, invested capital,
equity, sales, or revenue); productivity ratios; expense targets;
market share; customer satisfaction; working capital targets;
economic value added or EVA ® (net operating profit
after tax minus the sum of capital multiplied by the cost of
capital); or any other criteria selected by the Committee; provided
that any such other criteria shall not apply to an Award to a
“covered employee” within the meaning of
Section 162(m)(3) of the Code. Performance Criteria may
relate to the performance of (a) the Company, (b) a
Subsidiary, (c) an Affiliate, (d) a division or unit of
the Company, any Subsidiary, or any Affiliate, (e) an office,
group of agencies, or all or part of any agency system,
(f) the Participant, or (g) any combination of the
foregoing, as measured either in absolute terms or in comparison
with the performance of other companies.
“ Performance
Objectives ” mean, for any Award that is contingent in
whole or in part on achievement of performance objectives, the
objectives or other performance levels with respect to specified
Performance Criteria that are measured over a Plan Year or other
specified period for the purpose of determining the amount of the
Award and/or whether the Award is granted or vested. With respect
to any Award to a “covered employee” (within the
meaning of Section 162(m)(3) of the Code) that is intended to
qualify as “other performance-based compensation”
(within the meaning of Section 162(m)(4)(C) of the Code), the
applicable Performance Objectives shall be set forth in writing no
later than 90 days after commencement of the period of service
(within the meaning of Treas. Reg. § 1.162-27(e)(2)(i))
to which the Performance Objectives relate (or, if sooner, before
25 percent of such period of service has elapsed), at a time when
achievement of the Performance Objectives is substantially
uncertain.
“ Performance
Period ” means the period over which achievement of
Performance Objectives set forth in an Award is measured. The
Performance Period that applies to an Award made to a Participant
may overlap or coincide with the Performance Period that applies to
another Award made to that Participant. Except with respect to an
EIP Award, the duration of a Performance Period shall not be less
than one year. If the amount payable under a multi-year Award is
determined based on performance in more than one period of service
( e.g. , the Performance Objectives for an Award covering
three years are based on annual performance in each of the three
years, rather than cumulative performance over the three-year
period), the Performance Period for such Award shall be the period
that begins on the first day of the first applicable period of
service and ends on the last day of the last applicable period of
service.
“ Performance Shares
” or “ Performance Units ” means an
Award of a contractual right granted under Section 7 hereof to
receive cash, Shares, or a combination, that becomes vested upon
the attainment, in whole or in part, of Performance Objectives
specified by the Committee.
“ Plan ” means
The Interpublic Group of Companies, Inc. 2009 Performance
Incentive Plan, as set forth herein and amended from time to
time.
“ Plan Year
” means the calendar year.
“ Prior Plan
” means The Interpublic Group of Companies, Inc. 2006
Performance Incentive Plan, The Interpublic Group of
Companies, Inc. 2004 Performance Incentive Plan, The
Interpublic Group of Companies, Inc. 2002 Performance
Incentive Plan and The Interpublic Group of Companies, Inc.
1997 Performance Incentive Plan.
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“ Restricted
Period ” means a period during which an Award of
Restricted Stock or Restricted Stock Units is subject to
forfeiture. The Restricted Period that applies to an Award made to
a Participant may overlap or coincide with the Restricted Period
that applies to another Award made to that Participant. The
duration of a Restricted Period shall not be less than one year;
provided that, to the extent permitted by Sections 11 and 12(a)
hereof, a Restricted Period may terminate before the expiration of
one year, in connection with a Change of Control or a
Participant’s Termination of Employment due to Retirement,
death, or Disability.
“ Restricted
Stock ” means an Award of Common Stock granted under
Section 6 hereof that becomes vested and nonforfeitable, in
whole or in part, upon the attainment, in whole or in part, of
conditions specified by the Committee, which may include
Performance Objectives.
“ Restricted
Stock Unit ” means an Award of a contractual
right granted under Section 6 hereof to receive an amount
(payable in cash, Shares, or a combination, as determined by the
Committee) that is based on the fair market value of a Share and
that becomes vested and nonforfeitable, in whole or in part, upon
the attainment, in whole or in part, of conditions specified by the
Committee, which may include Performance Objectives.
“ Retirement ”
means, except as otherwise set forth in an Award Agreement, a
Participant’s Termination of Employment for a reason other
than Cause (as determined by the Company) if, at the time of such
Termination of Employment the Participant is eligible for
retirement as approved by the Company.
“ Shares ” means
shares of Common Stock.
“ Stock Appreciation
Right ” or “ SAR ” means the right,
denominated in Shares, to receive, upon surrender of the right, in
whole or in part, but without payment, an amount (payable in cash,
Shares, or a combination, as determined by the Committee) for each
Share that does not exceed the excess of the fair market value of
the Shares on the date of exercise over the fair market value of
the Shares on the date of grant, subject to any other limitations
and restrictions (required by law or otherwise) as the Plan and the
Committee shall impose.
“ Subsidiary ”
means a subsidiary of the Company that meets the definition of a
“subsidiary corporation” in Section 424(f) of
the Code.
“ Termination of
Employment ” means, for any Participant, except as
otherwise provided in the Plan or an Award Agreement, the date of
the Participant’s “separation from service”
(within the meaning of Section 409A(a)(2)(A)(i) of the Code) with
the Participant’s Employer and all other entities with which
such Employer would have to be combined under Section 414(b) or (c)
of the Code if the 80 percent ownership standard prescribed by
Section 1563(a)(1), (2), and (3) of the Code, and Treas. Reg.
§ 1.414(c)-2, were replaced with a 50 percent ownership
standard. For purposes of the Plan: (a) a Participant who is on a
bona fide leave of absence and does not have a statutory or
contractual right to reemployment shall be deemed to have had a
“separation for service” on the first date that is more
than six months after the commencement of such leave of absence.
However, if the leave of absence is due to any medically
determinable physical or mental impairment that can be expected to
last for a continuous period of six months or more, and such
impairment causes the Participant to be unable to perform the
duties of his position of employment or any substantially similar
position of employment, the preceding sentence shall be deemed to
refer to a 29-month period rather than to a six-month period; and
(b) a sale of assets by the Company or an Affiliate to an unrelated
buyer that results in the Participant working for the buyer or one
of its affiliates shall not, by itself, constitute a
“separation from service” unless the Company or the
Participant’s Employer, with the buyer’s written
consent, so provides in writing 60 or fewer days before the closing
of such sale.
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Section 3.
Administration.
(a)
The Committee. The Plan shall be administered by a committee
(the “Committee”) of outside directors (within the
meaning of Treas. Reg. § 1.162-27(e)(3)) that satisfies
the requirements of Rule 16b-3 under the Exchange Act. Members
of the Committee shall be appointed by and shall serve at the
pleasure of the Board. No member of the Committee shall be eligible
to receive an Award under the Plan.
(b)
Committee Powers. The Committee shall have and may exercise
all of the powers granted to it by the provisions of the Plan.
Subject to the express provisions and limitations of the Plan, the
Committee may adopt such rules, regulations, and procedures as it
deems advisable for the conduct of its affairs, and may appoint one
of its members to be its chairman and any person, whether or not a
member, to be its secretary or agent. The Committee shall have full
authority to direct the proper officers of the Company to issue or
transfer Shares pursuant to the issuance or exercise of an Award
under the Plan.
(c)
Committee Action. The Committee may act at a duly called
meeting by the vote of a majority of its members or without a
meeting by unanimous written consent. The decisions of the
Committee shall be final and binding unless otherwise determined by
the Board. Each member of the Committee and each member of the
Board shall be without liability, to the fullest extent permitted
by law, for any action taken or determination made in good faith in
connection with the Plan.
(d)
Awards. Subject to the provisions of the Plan, the Committee
is authorized to grant the following Awards:
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(3)
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Restricted Stock Units,
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(6)
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Other Stock-Based Awards,
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(8)
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Executive Incentive Performance
Awards,
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(9)
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Dividend Equivalents, and
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(10)
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Shares in Lieu of Cash.
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(e)
Participants. Subject to the provisions of the Plan, the
Committee is authorized to designate the Eligible Employees who
shall receive Awards and to determine the nature and size of the
Award that an Eligible Employee shall receive.
(f)
Correction of Defects, Omissions, and Inconsistencies. The
Committee may correct any defect, remedy any omission, or reconcile
any inconsistency in the Plan or any Award in the manner and to the
extent it deems desirable to carry out the intent of the Plan and
such Award.
(g)
Delegation. If the Committee deems it advisable, the
Committee may delegate its authority under this Section 3 or
any other provision of the Plan to one or more of its members or to
one or more persons other than its members to the extent permitted
by applicable law, except that no such
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delegation shall be permitted with
respect to the participation in the Plan of persons who are subject
to Section 16 of the Exchange Act. Any person to whom the
Committee delegates its authority under this Section 3 may
receive Awards only if the Awards are granted directly by the
Committee without delegation.
Section 4. Shares Available for
Awards.
(a)
Basic Limitations. Subject to the provisions of subsections
(b) through (f) of this Section 4, the number of
Shares available for grant to Participants under the Plan (the
“Share Authorization”) shall be:
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(1)
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20,000,000 Shares for grant of Full
Value Awards and Dividend Equivalents, plus
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(A)
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the number of Shares available for
grant of Options and SARs under the Prior Plans as of the effective
date of the Plan (as specified by Section 12(s) hereof);
provided, that any such Shares shall be available for grant only as
the subject of Options or SARs,
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(B)
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the number of Shares available for
grant of Full Value Awards under the Prior Plans as of the
effective date of the Plan (as specified by
Section 12(s) hereof) provided, that any such Shares
shall be available for grant only as the subject of Full Value
Awards, and
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(C)
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the number of Shares that, as of
such effective date, are subject to outstanding awards under the
Prior Plans and that, on or after such effective date, cease to be
subject to such awards for any reason other than by reason of
exercise or settlement of such awards to the extent such awards are
exercised for or settled in Shares; provided that any such Shares
that were the subject of Options or SARs shall be available for
grant only as the subject of Options or SARs and any such Shares
that were the subject of Full Value Awards shall be available for
grant only as the subject of Full Value Awards.
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(b)
Aggregate Limitation on ISOs. Subject to the adjustment
provisions in Section 4(e) hereof, in any Plan Year, ISOs
may be granted with respect to no more than 200,000
Shares.
(c)
Individual Limitation of Awards. Subject to the adjustment
provisions in Section 4(e) hereof, the following
limitations shall apply to Awards under the Plan:
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(1)
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No individual Participant shall be
granted, in any Plan Year, Options and/or SARs with respect to more
than 2,000,000 Shares in the aggregate;
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(2)
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No individual Participant shall be
granted, in any Plan Year, performance-based grants of Restricted
Stock and/or Restricted Stock Units with respect to more than
1,000,000 Shares in the aggregate;
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(3)
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No individual Participant shall be
granted, in any Plan Year, Performance Shares, Performance Units,
or Other Stock Based Awards that provide for more than 2,000,000
Shares in the aggregate; and
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(4)
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No individual Participant shall be
granted, in any Plan Year, Performance Cash in an amount of more
than $6,000,000.
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For purposes of the individual
limits set forth in this Section 4(c), any Awards that are canceled
shall continue to count against the individual share and cash
limits.
(d)
Shares Available for Issuance.
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(1)
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The number of Shares covered by an
Award shall count against the limitations prescribed by subsections
(a) and (b), above, on the number of Shares available for award
under the Plan only to the extent that such Shares are actually
issued; provided, that the full number of Shares with respect to
which SARs may be settled by the issuance of Shares shall count
against the number of Shares available for award under the Plan,
regardless of the number of Shares actually issued upon settlement
of such SARs.
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(2)
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If any Shares covered by an Award,
or to which such an Award relates (A) terminate, lapse or are
forfeited or canceled, (B) are otherwise settled without the
delivery of the full number of Shares underlying the Award (except
as provided in paragraph (2), above, with respect to SARs),
(C) are settled in cash in lieu of Shares, or (D) are
exchanged with the Committee’s permission, prior to the
issuance of Shares, for Awards not involving Shares, then the
Shares covered by such Award, or to which such Award relates, to
the extent of any such forfeiture, termination, lapse,
cancellation, etc., shall again be, or shall become, available for
issuance under the Plan.
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(3)
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Shares that are (A) delivered in
payment of the exercise price of an Option or (B) delivered to or
withheld by the Company to pay withholding taxes related to an
Option or SAR, shall not become available for issuance under this
Plan.
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(4)
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The Shares issued under the Plan may
be authorized and unissued Shares or treasury Shares.
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(e)
Adjustment for Corporate Transactions. In the event of a
Corporate Transaction, the Committee shall (in order to preserve,
or to prevent enlargement of, the benefits or potential benefits
available under the Plan), in such manner as the Committee deems
equitable, adjust—
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(1)
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the number and kind of shares that
thereafter may be made the subject of Awards,
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(2)
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the number and kinds of shares that
are subject to outstanding Awards, and
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(3)
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the grant, exercise, or conversion
price with respect to any of the foregoing.
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Any shares received as a result of a
Corporate Transaction affecting Restricted Stock shall have the
same status, be subject to the same restrictions, and bear the same
legend as the Restricted Stock with respect to which the shares
were issued. Additionally, the Committee may make provisions for a
cash payment
