The Interpublic Group of Companies
Annual Report 2000

Plain-text annual report

Create Value > The Interpublic Group of Companies, Inc. / 2000 T h e I n t e r p u b l i c G r o u p o f C o m p a n i e s , I n c . / 2 0 0 0 Create>Value The Interpublic Group of Companies, Inc. / 2000 INTERPUBLIC IS A GLOBAL MARKETING COMMUNICATIONS AND MARKETING SERVICES COMPANY. We are in the idea business. We provide Clients with customer-driven insights, strategic communications programs and other marketing services that help them build the demand side of their business. Our success and growth are built on the quality of our Client base and the depth of our relationships. TABLE OF CONTENTS: >> FINANCIAL HIGHLIGHTS 1 / CHAIRMEN'S REPORT 2-5 / PHILIP H. GEIER, JR. 6 / LEADERSHIP 7 / PUBLIC RELATIONS 18-21 / HEALTHCARE 22-25 ADVERTISING 8-13 / DIRECT MARKETING 14-17 MARKETING RESEARCH 26-29 SPORTS MARKETING 38-41 / MEETINGS & EVENTS 34-37 / SALES PROMOTION 42-45 / CORPORATE ID & BRAND EQUITY 46-49 MEDIA SERVICES 30-33 / B OARD OF DIRECTORS 50 / OFFICERS & INFORMATION 51 / INTERPUBLIC COMPANIES 52 >> Financial: Highlights > December 31 (Amounts In Thousands, Except Per Share Data) 2000 1999 % CHANGE REVENUE AND INCOME Revenue Income from Operations* As a % of Revenue Net Income* FINANCIAL POSITION Cash and Equivalents Total Assets Total Debt Debt as a % of Total Capital Return on Average Stockholders’ Equity* PER SHARE DATA Diluted EPS* Cash EPS* Cash Dividends OTHER Number of Employees Weighted Average Shares Outstanding (diluted)* $ $ $ 5,625,845 833,522 14.8 % 473,185 $ $ $ 708,312 10,238,222 1,997,045 49.4 % 23.5 % $ $ $ 1.51 1.81 .37 48,200 319,346 $ $ $ 4,977,823 662,679 13.3 % 382,724 $ $ $ 1,029,076 9,247,044 1,311,090 42.6 % 23.6 % $ $ $ 1.24 1.51 .33 42,600 315,532 13.0 % 25.8 % – 23.6 % (31.2 %) 10.7 % 52.3 % – – 21.8 % 19.9 % 12.1 % 13.1 % 1.2 % * Calculated excluding restructuring and other merger related costs (pre-tax charges of $116,131 and $84,183 in 2000 and 1999 respectively) and non-recurring transaction costs related to the Deutsch acquisition (pre-tax charges of $44,715 in 2000). Reported net income including these costs was $358,658 in 2000 and $331,287 in 1999. $ 5,625,845 $ 1.51 $ .37 26.2 % $ 4,977,823 $ 1.24 $ 1.12 $ .33 $.29 $ 4,218,657 23.6 % 23.5 % 1998 1999 2000 1998 1999 2000 1998 1999 2000 1998 1999 2000 REVENUE EARNINGS PER SHARE (DILUTED)* CASH DIVIDENDS PER SHARE RETURN ON AVERAGE STOCKHOLDERS’ EQUITY* 2000 > The Interpublic Group of Companies, Inc. 1 Chairmen’s Report > This year, Interpublic reached a landmark in its evolution as a marketing services company. In 1994, advertising represented 95 percent of our business. In 2000, for the first time, our business was almost evenly balanced between advertising and other marketing communications and marketing services. The year 2000 was another year of robust growth and diversification for Interpublic. Revenue rose to more than $5.6 billion, an increase of 13% over 1999. Net income (before non-recurring items) grew to $473 million, up 23.6% over the prior year. On a diluted basis, earnings per share grew to $1.51, almost 22% above 1999. This year’s revenue, profits and earnings per share would have been even higher had it not been for the strength of the dollar in the global currency markets. With more than 650 offices in 127 countries, we believe our unparalleled reach is only exceeded by the quality of our people and the services and counsel they provide to Clients. And our overall Client roster, especially those Clients our companies serve across multiple markets and multiple disciplines, is second to none. Our agency networks continued to win new business on an impressive scale. Net new business billings of approximately $2.6 billion helped drive our growth and signaled continued Client confidence in the Interpublic companies and the quality of their offerings. Our company’s financial condition continues to be excellent, with a strong balance sheet and solid cash position. Interpublic’s sound financial management and cost- containment policies have helped to maintain and improve our margins. This year, Interpublic reached a landmark in its evolution as a marketing services company. In 1994, advertising represented 95 percent of our business. In 2000, for the first time, our business was almost evenly balanced between advertising and other marketing communications and marketing services. Our philosophy of owning and growing marketing services businesses in a wide array of sectors should prove important to both the short-term and long-term horizons of our investors. It is important to note that this has been a cumulative gain, for these disciplines complement each other and enable further aggressive growth for the entire company. 1 / OPPOSITE PAGE: PHILIP H. GEIER, JR. & JOHN J. DOONER, JR., THE INTERPUBLIC GROUP OF COMPANIES, INC. 2000 > The Interpublic Group of Companies, Inc. 3 This diversification of our business has been a deliberate strategy to expand beyond traditional advertising in order to provide Clients with both the consumer insights and marketing communications services that help them build their businesses. In this regard, Interpublic is truly a communications partner capable of providing expertise which is vital to global and local Clients alike. Growth in the year 2000 was marked by a number of acquisitions that significantly expanded Interpublic’s portfolio of resources. This is not simply a matter of buying volume, but a deliberate effort to create a group of competencies that reflects our strategic priorities. As the global marketing environment grows more complex, Clients are consolidating their accounts both geographically and across disciplines. Interpublic is committed to expanding its charter to enable all our companies to provide integrated marketing solutions to their Clients’ needs. The acquisition in November of Deutsch, Inc., brings one of the most highly regarded U.S. advertising and integrated marketing communications agencies into The Interpublic Group. Deutsch had 2000 billings of more than $1.5 billion, quadrupling in size over the last three years to become the nineteenth largest agency overall in the United States. Deutsch shares our goal of offering a broad range of the highest-quality marketing communications capabilities and top-level strategic and creative services. In addition to its traditional advertising capability, it includes operations in sales promotion, direct marketing, public relations, event marketing, online communications and urban/youth marketing. In April, Interpublic made its first major foray into marketing research through the acquisition of NFO WorldGroup, one of the world’s leading providers of research-based marketing information and counsel. With global reach, a blue-chip Client base and broad range of diagnostic research products and services, NFO’s services will also provide a feedback mechanism for Interpublic’s advertising, marketing and PR professionals to measure the effectiveness of their work so that messages can be refined to reach their targets more precisely. Since the acquisition, we’ve already seen benefits from introducing NFO’s services to a number of Interpublic Clients. Jack Morton Worldwide, Interpublic’s experiential events and meetings unit, was formed through the merger of The Jack Morton Company and the Communications Group of Caribiner International. The successful acquisition of Caribiner and subsequent integration of these two innovative organizations has created the world’s largest company in this fast-growing specialized marketing services capability. In the specialty of recruitment advertising, Interpublic acquired Nationwide Advertising Service, a leading agency in this field. NAS serves over 4,000 corporate Clients throughout the U.S. McCann-Erickson WorldGroup continued to lead the advertising industry in 2000, with another year of outstanding growth and new business results, along with unprecedented levels of industry recognition, including Adweek’s “global agency of the year” for an extraordinary third year in a row. For the fifth straight year, McCann won more than $1 billion in net new billings, including at least three U.S. accounts in the $100+ million range. It also added a growing number of new worldwide Clients from outside the United States to its list of global Clients – already the industry’s most extensive. McCann also installed new top management last year, naming Jim Heekin as Chairman and CEO of McCann-Erickson WorldGroup, the overall multi-unit global marketing communications organization, as well as of McCann-Erickson Advertising Worldwide. Following the late 1999 consolidation of Lowe and Lintas into Lowe Lintas & Partners Worldwide, we saw, in 2000, their emergence into a powerful new agency brand, with a strong management team, superior creative product and the clout of the fourth-largest global agency group in the world. Their recent recognition as U.K. and European “agency of the year” is a testimony to their success. Interpublic’s other operating units also reported strong growth. Two of our public relations com- panies, Weber and Shandwick, combined to form Weber Shandwick Worldwide, now the world’s number one global public relations consultancy. In just three years, Octagon, Interpublic’s sports marketing capability, has come of age, fulfilling our goal to be a world leader in this discipline. Octagon’s success illustrates the benefits of the cross-fertilization that Interpublic is fostering across its networks. It is now the second-largest sports marketing firm in the world, with strong business lines in athlete representation, sponsorship, consulting, event management and ownership, motor sports and television 4 The Interpublic Group of Companies, Inc. > 2000 production and distribution. In 2000, Octagon benefited from closer integration of the Brands Hatch Group, acquired in 1999. It won a 15-year contract to run the British Grand Prix at Silverstone, one of the most famous and historic racing circuits, and acquired a significant interest in the German soccer club Eintracht Frankfurt. All of these developments offer considerable opportunities to generate additional business among Interpublic’s Clients. This year Interpublic appointed Sean Orr, EVP and CFO, and James Heekin, Chairman and CEO of McCann-Erickson WorldGroup, to the Board of Directors. And at year’s end, Interpublic seamlessly completed a nine-month transition period as John Dooner succeeded Phil Geier, who retired after more than 20 years as Chairman and CEO. John, a veteran of more than 25 years with Interpublic, was Chairman and Chief Executive Officer of McCann-Erickson WorldGroup before being named President and Chief Operating Officer of Interpublic in March. Phil will continue his involvement with the company as Chairman Emeritus and as an advi- sor to the Interpublic Board. Added to the new management team was Bruce Nelson, in the newly created position of Executive Vice President & Chief Marketing Officer. His role is to help shape our portfolio strategy and to posi- tion our current companies for higher growth. In addition, he will take on a strategic marketing role with our most senior major Clients. The deliberate and carefully planned management transition is a metaphor for Interpublic’s continuing evolution as a global leader in marketing communications, having systematically grown our capabilities in numerous non-advertising disciplines in response to Clients’ evolving marketing needs. This strategy enables us to provide Clients with more integrated solutions across our network, and to meet the challenge of building more powerful global brands. Our ever-evolving portfolio of tools and resources helps Clients better understand their customers and create more effective marketing solutions. We recognize that our future success will be determined by how well we are able to enhance the depth and quality of our global Client partnerships. Both Interpublic and our Clients recognize that the nature of marketing is undergoing rapid change. Clients rely on us to be ahead of the curve, to be able to interpret the significance of change and its impact on their brands and on their customers. We are prepared to meet those changes with a new vision and a new vitality as embodied in our new generation of leadership, one grown from within the company and sharing its values. As global brands become more dominant, brands themselves are taking on a new significance to consumers. They are much more than just names. They are a part of people’s lives, an element in their identities, and a springboard for building consumer relationships. Today Interpublic offers Clients numerous options to maintain and enhance those relationships, bringing them ever closer to their customers in more meaningful ways. The outlook for this industry, and particularly for Interpublic, is bright. Although there have been reports of some cyclical softening in the advertising market, it is important to note that Interpublic is far more than a collection of advertising agencies, and far more resilient as a result of our diversification. In an era when many Clients may be re-evaluating their marketing strategies, Interpublic now has opportunities to offer and sell other competencies and consulting services. We anticipate continued healthy growth in those specialized communications sectors that account for approximately half of our business. At Interpublic, our focus has always been on driving our Clients’ growth and providing the tools required to help them become smarter managers of their businesses. In conclusion, we extend our thanks to all our employees throughout the world for their continuing efforts to drive Interpublic’s outstanding achievements. And we gratefully acknowledge the loyalty of our shareholders, whose investment is a mark of confidence in our vision. PHILIP H. GEIER, JR. Chairman Emeritus JOHN J. DOONER, JR. Chairman and Chief Executive Officer 2000 > The Interpublic Group of Companies, Inc. 5 Philip H.Geier, Jr. > 20 Years of Leadership: Few people have been as influential as Phil Geier in shaping the modern advertising and marketing communications field. As the Chairman and CEO of Interpublic for 20 years, Phil’s contribution goes far beyond what he delivered on behalf of our company. He is the person who brought the advertising holding company concept to life. In 1980, Phil took the helm of a company that was regarded as a very large player: 8,000 employees around the world. Revenue of $500 million and net income of $21 million. 4.5 million outstanding shares and a market capitalization of almost $500 million. When he became Chairman Emeritus at the end of 2000, Interpublic was much larger: 50,000 employees in 650 offices in 127 countries. Revenue of $5.6 billion, generating net income of $473 million. About 320 million shares and a market capitalization of $12+ billion. Over that 20-year period, Interpublic’s stock had a compounded annual growth rate of over 22%. Phil’s success in being able to lead Interpublic to that kind of extraordinary growth is a tribute to his career-long commitment to providing Clients with the best in communications resources. On the outside, Phil’s reputation was that of a deal-maker. No question that this was true. Whether it was winning a new account, hiring a major talent or acquiring a leading ad agency, Phil genuinely loved putting together a good deal. He had that passion and talent dating back to his college days, when he was the eager campus entrepreneur known as "Deals" Geier. To those of us who have known Phil and who had the good fortune to work with him and for him – and his career within Interpublic has spanned more than 40 years – it was clear that his love of the deal stemmed from a deeper passion he had about the business he was in. He loved advertising and communications and had – and still has! – a genuine enthusiasm for them, as he did for bring- ing people together who shared his passion. Everyone who knows him knows that Phil lives and breathes his work. Some have said “too much.” But it’s because of his commitment and involvement that he developed the extraordinary intuition about the business for which he is famous, and which helped him guide Interpublic to its current global stature and success. Yet for all of his strengths, the real secret of Phil Geier’s success has to have been his unwavering devotion to helping his Clients. His relentless pursuit of Client interests and growth is something he has always been known and admired for. No detail was too small to escape his commitment when it came to helping Clients grow their businesses. At the same time, no task was too large as he acquired and built global networks better positioned to serve the quality Clients with whom he wanted his company to work. In tribute to his Client-centric ideals and values, we are introducing a new annual award at this year's Shareholders Meeting. It will be called “The Philip H. Geier Award” and it will honor the Interpublic manager or team from any of our companies who most embodies Phil’s one-of-a-kind commitment to serving the needs of Clients and a relentless pursuit of their business interests. Phil’s Client-focused passion is an important legacy for all of us as we seek to build further the company he so much cared about and built up so well. Through this award, we look to both recognize Phil's enormous contributions to Interpublic and to keep his values front and center going forward. JOHN J. DOONER, JR. Chairman and Chief Executive Officer ADVERTISING / DIRECT MARKETING / PUBLIC RELATIONS / HEALTHCARE MARKETING RESEARCH / MEETINGS & EVENTS / MEDIA SERVICES SPORTS MARKETING / SALES PROMOTION / CORPORATE ID & BRAND EQUITY Create Leaders > We devise memorable advertising to create desire. We build recognition through corporate identity and brand equity. We leverage the excitement and glory of sports to generate consumer interest. We influence perceptions through media outreach and other public relations techniques. We draw upon unparalleled expertise in media planning and buying to define the time and space for brand messages. We gather deep insight into consumer habits and thoughts through marketing research. We produce dynamic meetings and events that link brands and audiences. We establish unique connections through direct marketing. We build empathy and understanding through healthcare communications. We initiate action through sales promotion. Interpublic is a group of best-of-class leaders, consistently acknowledged for leadership in their respective fields. In addition, our unique collaborative and action-oriented culture encourages and enables these leaders to deliver interconnected solutions for Clients across competencies and across geographies. The Interpublic Group includes many individual units that are among the largest, the most prominent, the most creative and the most successful within their respective sectors. McCann-Erickson WorldGroup is recognized as the world’s leading integrated marketing communications network, with top-tier firepower across creative, marketing and media disciplines. The Lowe Lintas & Partners Worldwide brand is among the most respected for advertising and marketing communications creativity, while DraftWorldwide is an acknowledged leader in direct marketing and CRM. Other Interpublic brands that are newer to the family, such as NFO WorldGroup, Jack Morton Worldwide, FutureBrand, Deutsch and Octagon – to mention just a few – highlight Interpublic's leadership and capabilities in research, experiential motivation, corporate branding, integrated communications and sports marketing. With its longtime Client-centric focus and its long-held reputation for implementation, Interpublic is committed to extending effective strategic counsel and execution to those companies that are leaders in their fields, through every stage of the marketing process around the world. 2000 > The Interpublic Group of Companies, Inc. 7 Advertising > DIRECT MARKETING / PUBLIC RELATIONS / HEALTHCARE MARKETING RESEARCH / MEETINGS & EVENTS / MEDIA SERVICES SPORTS MARKETING / SALES PROMOTION / CORPORATE ID & BRAND EQUITY Create Desire Create Desire > For the third consecutive year, McCann-Erickson Worldwide was named AdWeek’s “Global Agency of the Year.” > Lowe Lintas & Partners was named Campaign magazine’s “U.K. Agency of the Year” and Ad Age Global’s “European Agency of the Year.” And for the second consecutive year won the Grand Prix at Cannes. 8 The Interpublic Group of Companies, Inc. > 2000 2 The Interpublic Group is the proud home of many of the leading agency brands in advertising. Each with its own unique creative offering, they offer Clients unparalleled breadth of service, quality and reach, both regionally and globally. Once again, McCANN-ERICKSON WORLDWIDE ADVERTISING demonstrated why it is repeatedly recognized as the leading global brand in advertising and in integrated marketing communications. The agency’s consistent record of outstanding growth and new business results, combined with its reliable delivery of effective communications, continues to lead the industry. The McCann-Erickson network continues to win extraordinary levels of recognition. Adweek magazine named McCann-Erickson as its 2000 “global agency of the year” for an extraordinary third year in a row. Praising the agency for its “talent, tools and teamwork,” and for its leadership vision with regard to the “future of communications,” the magazine called attention to McCann-Erickson’s ability to win and absorb major new business wins while maintaining and even improving the quality of its creative work. Illustrating how the world’s largest agency network acts “nimbly” on behalf of Clients, the magazine profiled McCann’s expert ability to develop coordinated global campaigns that can be executed effectively in multiple regions of the world. It is important to note that this honor was only one of many accorded the agency in 2000. Its numerous “agency of the year” awards around the world included European-wide recognition for both McCann-Erickson and its Universal McCann media network, a tribute to McCann’s commitment to elevate and integrate media in the overall strategic brand communications process. And demonstrating the unique breadth of its creativity, McCann was able to take top positions at both a worldwide awards show recognizing pure creativity and at one based on effectiveness met- rics. It had the unprecedented honor of win- ning top awards for both integrated marketing communications effectiveness and advertising effectiveness. Praising McCann-Erickson Worldwide Advertising for its “talent, tools and teamwork,” and for its leadership vision with regard to the “future of communications,” Adweek called attention to McCann-Erickson’s ability to win and absorb major new business wins while maintaining and even improving the quality of its creative work. 2 / Clockwise from bottom center: Jim Heekin, Chairman & Chief Executive Officer / Don Dillon, Regional Director Europe, Africa, Middle East Jens Olesen, Regional Director Latin America, Caribbean / Mark Gault, Regional Director North America Peter Hamilton, Regional Director Asia Pacific / McCann-Erickson Worldwide Advertising 2000 > The Interpublic Group of Companies, Inc. 1 1 Jim Heekin was promoted to Chairman and CEO of McCann-Erickson WorldGroup, the overall multi-unit global marketing communications organization, as well as of McCann-Erickson Worldwide, the worldwide ad agency that remains number one in the industry in size, geographic scope, and multinational accounts. At the heart of McCann-Erickson’s consistent year-in, year-out performance is a dedicated Client-focused culture that is determined to help Client brands grow through measurable marketplace success. While McCann installed new top management last year, as John Dooner moved up to become Chairman of Interpublic, the agency’s intense energy and drive toward innovation continued unabated. Jim Heekin was promoted to Chairman and CEO of McCann-Erickson WorldGroup, the overall multi-unit global marketing communications organization, as well as of McCann- Erickson Worldwide, the worldwide ad agency that remains number one in the industry in size, geographic scope, and multinational accounts. Under Jim’s leadership, McCann’s results-driven global culture continued to evolve even as the company expanded its roster of Clients, methods and range of disciplines. Recognizing that the key to effective communications is founded on advanced proprietary knowledge, McCann last year expanded its two ongoing worldwide consumer research projects, Media in Mind™ and McCann Pulse™, as well as its Human Futures Development employee learning program. McCann-Erickson’s new business performance was among the best in the industry. Last year was its fifth straight in winning substantially more than $1 billion in net new billings, including three U.S. accounts in the $100+ million range. And although McCann already has by far the industry’s most extensive list of global Clients, the agency was in the forefront of adding numerous new worldwide Clients from outside the United States. As Client corporations have sought access to more and more marketing communications disciplines to help them sell their brands, McCann has responded by building best-in-class worldwide marketing communications networks outside advertising. Last year, these newer McCann-Erickson WorldGroup networks – MRM Worldwide in the direct response and customer relationship management area; Momentum in the event and promotion marketing arenas; FutureBrand in the branding and packaging design field; Zentropy Partners in the Internet and digital space; Torre Lazur McCann Healthcare WorldWide in healthcare communications; and Weber Shandwick Worldwide as its globally aligned partner for public relations – all expanded the scope and global range of their operations even as they recorded new levels of achievement in professional quality. Momentum and MRM, for example, both were the big awards winners in important shows in their respective sectors. McCann-Erickson WorldGroup, as a result of this marketing communications expansion, is now working with more than 25 global Clients across three or more disciplines. Last year alone, it added new sector assignments around the world from blue-chip companies as it continued to build the level of global momentum that has become so integrally associated with the McCann-Erickson name. 1 2 The Interpublic Group of Companies, Inc. > 2000 The year 2000 also saw the emergence of a new Interpublic advertising brand: Lowe Lintas & Partners Worldwide, a combination of two complementary networks: the highly creative and entrepreneurial Lowe & Partners, and the globally and professionally respected Ammirati Puris Lintas. a global Interpublic network to provide international resources for its Clients. These agencies are Campbell-Ewald, Campbell Mithun, Carmichael Lynch, Dailey & Associates, Deutsch, Gotham, Hill Holliday (including Hill Holliday/GMO), The Martin Agency, Mullen (including Mullen/LHC), and Suissa Miller. With worldwide billings of $12 billion and agencies in 80 countries, Lowe Lintas & Partners is ranked as the number four global agency network. Early results for the new network are encouraging. Lowe Lintas & Partners quickly found itself winning additional assignments from top world marketers as well as delivering strong new business performance, including several global wins. The agency ranked first in growth in the United Kingdom, and won top professional recognition, including an unprecedented second consecutive Grand Prix in Cannes, the AAAA O’Toole Award for most admired large agency – recognizing the totality of its work for all Clients – and the Grand Prix and other top awards from the U.K.’s Institute for Practitioners of Advertising (IPA). Most recently, Lowe Lintas & Partners was named “U.K. Agency of The Year” by Campaign magazine, and “European Agency of The Year” by Ad Age Global. In addition to these two global powerhouse advertising agency networks, Interpublic includes a number of domestic advertising agencies serving a mix of local, national and international Clients. Each is aligned with 3 The year 2000 also saw the emergence of a new Interpublic advertising brand: LOWE LINTAS & PARTNERS WORLDWIDE, a combination of two complementary networks: the highly creative and entrepreneurial Lowe & Partners, and the globally and professionally respected Ammirati Puris Lintas. The new Lowe Lintas & Partners aims to extend the intellectual rigor and creativity which characterized the former Lowe network to the blue-chip multinational Clients and global reach of the former Lintas network. As the marketing landscape evolves, Lowe Lintas & Partners offers the timely competitive advantage of effectiveness through rigor on a global scale. 3 / Frank Lowe, Founder, Chairman & Chief Executive Officer / Lowe Lintas & Partners Worldwide 4 / Jerry Judge, President / Michael Sennott, Deputy Chairman / Lowe Lintas & Partners Worldwide 2000 > The Interpublic Group of Companies, Inc. 4 1 3 ADVERTISING Direct Marketing > PUBLIC RELATIONS / HEALTHCARE MARKETING RESEARCH / MEETINGS & EVENTS / MEDIA SERVICES SPORTS MARKETING / SALES PROMOTION / CORPORATE ID & BRAND EQUITY Create: Connections > For the second consecutive year, DraftWorldwide was named AdWeek’s “Number One U.S. Direct Marketing Agency.” > For the third consecutive year, MRM Worldwide dominated the Direct Marketing Association ECHO Awards. 1 4 The Interpublic Group of Companies, Inc. > 2000 the second year. At the John Caples International Awards, MRM took two first prizes, and president and COO Pam Larrick was awarded the Emerson Award for Lifetime Direct Marketing Innovation and Service. MRM’s proprietary tools help it move fast and smart in generating CRM business solutions. The CRMap provides a proprietary roadmap for Clients to create pre-emptive, profitable relationships with their Clients. The Future Value Model ascribes for Clients the monetary value for each of its customers based on its return on relationship. And the MRM Relationship Center chronicles in real time the dynamics of optimizing each customer’s “touch-points” throughout his or her buying continuum. MRM continued its global expansion with new offices in Los Angeles and Panama City, acquisitions in Mexico City, the United Kingdom and Brazil, and additions to its TPA custom publishing network. officer, DraftWorldwide New York, into the Direct Marketing Association Hall of Fame. In the digital domain, the agency’s interactive division, Draft Digital, acquired Capita Technologies Inc., a 300-person end-to-end e-commerce firm, skilled in Web and wireless business strategy and implementation, and systems and supply chain integration. Other strategic acquisitions included AG Worldwide, based in New York, which provides strategic brand consulting, advertising and marketing campaigns, e-business development and interactive strategy and design; The Sloan Group, a New York-based youth, entertainment and digital marketing agency; and Group III Promotions in Chicago, a leader in event sponsorship and field and mobile marketing. In Europe, DraftWorldwide acquired Trampolin in Sweden, The Boroughloch Group in Edinburgh, and Clouseau in Barcelona. In Canada, Groupe Everest in Montreal, and Fuel Advertising and Segal Communications in Toronto were added to DraftWorldwide’s successful Toronto operation. McCANN RELATIONSHIP MARKETING WORLDWIDE (MRM) is dedicated to making Customer Relationship Management (CRM) a powerful reality for Clients – strategically, creatively and operationally. In 2000, MRM had over $1 billion in billings and operations in 31 countries. 5 The Interpublic Group offers direct, promotional and digital marketing expertise through two global agency networks: DraftWorldwide, one of the world’s largest integrated global marketing firms, and McCann Relationship Marketing, a unit of the McCann-Erickson WorldGroup. DRAFTWORLDWIDE, which surpassed $3 billion in billings in 2000, operates from more than 60 offices in 26 countries. The agency’s strength in data management and modeling, as well as its proprietary research tools, such as BRAND ESSENCESM, enable it to identify, understand, and target best prospects, and keep best customers. In 2000, Adweek named DraftWorldwide the number one U.S. Direct Marketing agency for the second consecutive year; PROMO ranked it the largest Promotional Marketing agency, and it is a top 20 U.S. and top 25 global agency brand, according to Advertising Age. Awards for creative excellence included the Global Marketing Services Agency of the Year, won by DraftWorldwide France at the annual Agencies Grand Prix; and the induction of Emily Soell, vice chairman, chief creative For the third consecutive year, MRM Worldwide dominated the Direct Marketing Association ECHO Awards, winning the automotive industry category a third straight time and the healthcare relationship marketing category for 6 5 / Clockwise from bottom center: Howard Draft, Chairman & Chief Executive Officer / Kevin Berg, President KBA Marketing / Jordan Rednor, President & Chief Operating Officer Worldwide Yvonne Furth, President & Chief Operating Officer, U.S. / Perry Miele, President, International Group / Kevin McKay, President, Capita Technologies Inc. / DraftWorldwide 6 / Pamela Maphis-Larrick, President & Chief Operating Officer / Stan Rapp, Chairman & Chief Executive Officer / McCann Relationship Marketing 2000 > The Interpublic Group of Companies, Inc. 1 7 ADVERTISING / DIRECT MARKETING Public Relations > HEALTHCARE MARKETING RESEARCH / MEETINGS & EVENTS / MEDIA SERVICES SPORTS MARKETING / SALES PROMOTION / CORPORATE ID & BRAND EQUITY Create: Influence > Effective January 1, 2001, Weber Shandwick Worldwide is the world’s largest public relations company with leadership in public affairs, technology, consumer lifestyle and entertainment, all high-growth areas. > Golin/Harris is a top ten ranked global public relations company and it is consistently recognized by its peers and Clients for its award-winning programs across its varied practice areas. 1 8 The Interpublic Group of Companies, Inc. > 2000 has partnered with some of the world’s best known brand names and companies. In 2000, a key survey of public relations users ranked Golin/Harris as one of the top players in consumer marketing. The firm also won more than 30 regional and national industry awards. Golin/Harris expanded capabilities in Washington, D.C., Frankfurt, London, Taiwan, Tokyo, Hong Kong, Singapore and Mexico City. Acquisition of The MWW Group, the fourth-largest independent U.S. firm, specializing in technology marketing, investor relations, corporate communications, consumer and business marketing and public affairs, significantly reinforced the firm’s U.S. resources. In 2001, Golin/Harris will be a $200+ million agency with an expanded global footprint. awards included six First Place CIPRAS, and one PRSA Silver Anvil. In the United Kingdom, PR Week UK awarded the agency “Campaign of the Year” and “Best Crisis Management Campaign.” The firm also won three Gold Awards from the Institute of Public Relations of Singapore, “Best Financial Campaign” and “Best Event” awards from Asian PR News and three Communicator Awards. Cassidy & Associates, Washington, D.C., was ranked the number one lobbying firm. Acquisitions in Argentina, Dublin and Milan, and establishment of offices in Guangzhou China, and Denver, expanded the agency’s global footprint. New programs and services include: Signature, a proprietary approach to creating brand value; Privacy, a suite of services addressing online privacy issues; The European Interactive PR Service, helping Clients take advantage of new media; and a new internal communications and change management unit. In addition, Cassidy & Associates launched Global Trade Strategies, a practice group focused on foreign market access and trade issues. GOLIN/HARRIS INTERNATIONAL is a global strategic communications firm with a strong marketing heritage and consumer focus that specializes in corporate/employee communications, public affairs, technology and financial relations. It offers proprietary tools in such areas as brand development and protection, strategic planning, and analysis of analysts’ perceptions of publicly traded companies. Golin/Harris had revenues of more than $125 million in 2000. The firm helps Clients build their brands and their businesses by creating and managing strong, trust-based relationships with their key constituencies. For more than 40 years, the firm 7 The Interpublic Group delivers world-class constituency management through its two global public relations networks – Weber Shandwick Worldwide and Golin/Harris International. Each offers a full range of practice areas and global representation, and each is poised to address the twenty-first century public relations needs of the world’s greatest companies. Last fall, Interpublic announced the joining of Shandwick International and Weber Public Relations Worldwide into one global brand: WEBER SHANDWICK WORLDWIDE, effective January 1, 2001. With combined 2000 revenues of almost $325 million and 2,500 employees in 68 offices around the world, Weber Shandwick Worldwide is the world’s largest public relations agency, with leadership in critical, high-growth market areas – public affairs, technology, consumer lifestyle and entertainment. From its inception, the new entity represents leading global brands in financial services, automobiles, airlines, packaged goods and technology, as well as a number of emerging brand leaders in the e-commerce, telecommunications and networking arenas. Multiple industry 7 / Scott Meyer, Chairman / Larry Weber, Chief Executive Officer / Weber Shandwick Worldwide 8 / Al Golin, Chairman / Rich Jernstedt, Chief Executive Officer / Dave Gilbert, President / Golin/Harris International 2000 > The Interpublic Group of Companies, Inc. 8 2 1 ADVERTISING / DIRECT MARKETING / PUBLIC RELATIONS Healthcare > MARKETING RESEARCH / MEETINGS & EVENTS / MEDIA SERVICES SPORTS MARKETING / SALES PROMOTION / CORPORATE ID & BRAND EQUITY Create: Empathy > For the fourth consecutive year, Torre Lazur McCann Healthcare Worldwide was named Med Ad News “Agency of the Year.” > Formed just three years ago, Lowe Healthcare has grown into the world’s third-largest fully integrated marketing and communications global healthcare network. 2 2 The Interpublic Group of Companies, Inc. > 2000 LHW employs a holistic approach to healthcare marketing and communications in order to help shape a brand rather than simply advertise it. In 2000, Clients demonstrated their endorsement of this approach through new business and organic growth in prescription brands, direct-to-consumer activities and digital communications programs. Internally, LHW successfully deployed a network intranet to facilitate communication across companies, and developed training initiatives to fulfill its commitment to network knowledge management and global best practices. TORRE LAZUR McCANN HEALTHCARE WORLDWIDE (TLMHWW) ranks fifth in total worldwide gross income and first in ex-U.S. gross income. With 38 offices in 31 cities and 15 countries, TLMHWW draws upon the heritage of both Torre Lazur and McCann- Erickson to provide a fully integrated worldwide healthcare network with dual-agency capability in every major market. The year 2000 brought strong growth, with new business wins including a global assignment for the first product in a new class of antibiotic drugs, and a U.S. program to provide advertising, medical education, public relations and DTC programs for a respiratory product line. Industry recognition included winning a total of 74 creative awards and being named the Med Ad News “Agency of the Year” for an unprecedented fourth time. TLMHWW acquired two U.S companies, Adair-Greene (advertising) and Direct Approach (direct marketing), and Caudex, a U.K. medical education firm. Start-ups included Torre Lazur McCann Brazil, Torre Lazur New Zealand and McCann Healthcare Canada. TLMHWW has developed a number of proprietary tools and services that use new digital technology. The U.S.-based Global Launch Unit focuses solely on the rapid launch of pharmaceutical brands in multiple markets around the world. MELLENIUM III, an Internet-based knowledge management system, enables the agency to manage global brands. PromoPulse.com is a comprehensive Web-based marketing tool that facilitates management, monitoring and evaluation of all marketing activities. ISO HEALTHCARE GROUP (ISO-HCG) is a multinational healthcare management consulting firm specializing in demand- side growth strategies for Clients in the pharmaceutical, medical device and biotech healthcare markets. In the past year, ISO- HCG developed several innovative software products for the pharmaceutical industry, expanded its high-level strategic consulting services offering to Clients and globalized its operations with the opening of a London office. 10 9 The Interpublic Group’s healthcare communications networks offer a full range of diversified services across all marketing disciplines to help healthcare marketers succeed in the face of increasingly complex challenges within the healthcare industry. LOWE HEALTHCARE WORLDWIDE (LHW), part of The Lowe Group, was established three years ago to provide integrated marketing and communications for the full range of prescription and over-the-counter drugs, medical devices and diagnostics, and other healthcare brands. In 2000, LHW became the largest Interpublic global healthcare marketing and communications network in revenue, and the industry’s third- largest healthcare network worldwide. LHW is currently composed of 10 wholly owned companies as well as affiliations and alliances that together serve Clients in 13 countries around the world. This includes full-service communications companies and advertising agencies, as well as managed care marketing, medical education, healthcare public relations and digital communications firms. 9 / George Carteris, Executive Vice President & Chief Financial Officer / John R. Puglisi, Chairman & Chief Executive Officer, Lowe Healthcare Worldwide / Lowe Healthcare Group 10 / From upper left: Mike Lazur, Executive Vice President & Chief Creative Officer / Judy Capano, Executive Vice President & Director of Operations Joe Torre, Chairman & Chief Executive Officer / Ralph DeVito, Chief Financial Officer / Torre Lazur McCann Healthcare Worldwide 2000 > The Interpublic Group of Companies, Inc. 2 5 ADVERTISING / DIRECT MARKETING / PUBLIC RELATIONS / HEALTHCARE Marketing Research > MEETINGS & EVENTS / MEDIA SERVICES SPORTS MARKETING / SALES PROMOTION / CORPORATE ID & BRAND EQUITY Create: Insight > NFO WorldGroup maintains the world’s largest consumer behavior laboratory. Its access panels have an ongoing dialogue with more than 3 million individuals in North America and Europe – one in every 100 households in the United States belongs to an NFO panel. 2 6 The Interpublic Group of Companies, Inc. > 2000 NFO is the largest custom research firm in North America and, with operations in nearly 40 countries, ranks as 11 one of the top three custom research firms in the world. NFO WORLDGROUP is a leading provider of research-based marketing information and counsel to Clients around the globe. NFO is the largest custom research firm in North America and, with operations in nearly 40 countries, ranks as one of the top three custom research firms in the world. NFO fosters a culture of entrepreneurial thinking and takes pride in its ability to attract and retain the highest caliber professionals in its industry. Using leading-edge research techniques, NFO determines what people think and feel and do, in real time and over time, on both a local and a multinational basis. Armed with these insights and sophisticated analytic techniques, NFO provides its Clients with actionable advice to help develop better products, build more powerful brands, and design and implement better marketing and advertising strategies. The company is noted for its in-depth knowledge of consumers, sectors and cultures, as well as its in-depth understanding of Clients’ marketing and business issues. The company offers value-added, proprietary products and services that address a Client’s information needs throughout all phases of the product life cycle, including brand creation, brand tracking, brand repositioning, advertising strategy and tactics, and the evaluation of marketing effectiveness. Leading products include NFO MarketMind for corporate and brand image tracking and NFO TRI*M for customer satisfaction and stakeholder management issues. Each year, more than 3,000 Client companies rely on NFO for insights relevant to critical business decisions. These Clients span a variety of industry sectors including packaged goods, healthcare, financial services, information technology, telecommunications, automotive and travel. NFO was also selected by Forrester Research, a premier provider of syndicated research on trends in technology markets, as the primary data supplier for its highly regarded TechnoGraphics® reports. Founded in 1946, NFO has a heritage of research innovation, having pioneered the use of “panels” for custom research. Today the company is the global leader in access panels, maintaining an ongoing dialogue with more than 3 million individuals in North America and Europe – representing the world’s largest consumer behavior laboratory. Literally one in every 100 households in the United States belongs to an NFO panel. Building on this heritage of innovation, the company established NFO Interactive in 1996 – a unit which now offers a wide array of Internet-enabled research applications involving a panel of 1.5 million online members in the United States and Europe. Late in 2000, NFO created strategic alliances with Lycos (one of the top Internet portals) and NetZero (a leading Internet service provider) that will significantly expand the scope of NFO’s capabilities using the Internet. A central focus of these and other initiatives is the development of new applications that uniquely leverage the power of the Internet, moving well beyond the simple transfer of traditional techniques to an electronic environment. 11 / Bill Lipner, Chairman & Chief Executive Officer / Randy Smith, President & Chief Operating Officer / NFO WorldGroup 2000 > The Interpublic Group of Companies, Inc. 2 9 ADVERTISING / DIRECT MARKETING / PUBLIC RELATIONS / HEALTHCARE MARKETING RESEARCH Meetings & Events > MEDIA SERVICES SPORTS MARKETING / SALES PROMOTION / CORPORATE ID & BRAND EQUITY Create Environments > Jack Morton Worldwide is the undisputed global leader in corporate meetings and events and offers Clients global scope and an unparalleled breadth of resources. 3 0 The Interpublic Group of Companies, Inc. > 2000 12 JACK MORTON WORLDWIDE is a brand communications agency that helps leading companies inspire their most important audiences. Each year, the agency educates and motivates the targeted customers, prospects and employees of over 250 companies around the globe through live meetings, events and targeted experiences that are set in both physical and electronic environments. Jack Morton is the undisputed leader in its category, with over 1,200 strategic, creative and production professionals in more than 30 locations throughout the United States, Europe and Asia-Pacific. In 2000, Jack Morton significantly expanded its business and industry leadership through the successful acquisition and integration of two companies. The April acquisition of the Communications Group of Caribiner International expanded the agency’s global footprint, doubled its talent pool and added a host of top-tier Clients. The addition in January of a pre-eminent environmental design firm, Production Design Group, positions the company as a leader in creating branded environments – including retail installations, trade show exhibits and broadcast and theatrical environments. Jack Morton’s revenues increased nearly 100 percent in 2000, fueled by acquisitions and the doubling of its e-learning and environmental design and fabrication revenues. The agency added significant business through a number of new Client relationships, while also significantly growing its relationships with existing Clients. The agency received numerous awards for the outstanding creativity and quality of its work, including Communication Arts’ Interactive Design Award, a Broadcast Designers Association (BDA) Silver Medal and six Worldmedals from the New York Festivals. Each year, Jack Morton Worldwide educates and motivates the targeted customers, prospects and employees of over 250 companies around the globe through live meetings, events and targeted experiences that are set in both physical and electronic environments. Jack Morton is the undisputed leader in its category. 12 / Bill Morton, Chairman & Chief Executive Officer / Josh McCall, President & Chief Operating Officer / Jack Morton Worldwide 2000 > The Interpublic Group of Companies, Inc. 3 3 ADVERTISING / DIRECT MARKETING / PUBLIC RELATIONS / HEALTHCARE MARKETING RESEARCH / MEETINGS & EVENTS / Media Services > SPORTS MARKETING / SALES PROMOTION / CORPORATE ID & BRAND EQUITY Create Time&Space > For the third time, Universal McCann won “Agency of the Year” at the European Media and Marketing Awards. > For the third consecutive year, Initiative Media Worldwide was ranked the number one Global Media Network by the Research/Analyst Institute. 3 4 The Interpublic Group of Companies, Inc. > 2000 ranked Initiative Media Worldwide the Number One Global Media Network. Group is a new division devoted to the development of original television content. In 2000, the global network opened offices in the Czech Republic, Singapore and Thailand. Initiative Media also formed several new units: Initiative Partners, which provides advertising agencies of all sizes with Initiative’s full breadth of resources and tools; Fastbridge, a worldwide center of expertise dedicated to Internet,WAP/SMS and digital media; and IM Consulting, a specific unit dedicated to econometrics, budget modeling and other services. In 1999, McCann-Erickson Worldwide Advertising consolidated its media planning and buying operations into one global organization, UNIVERSAL McCANN. With a global network of 3,400 people in 62 markets and billings over $15 billion, it is one of the largest media operations in the world. In 2000, Universal McCann won approximately $2 billion in new business worldwide, representing growth of over 15% from 1999. At the European Media and Marketing Awards, Universal McCann and McCann-Erickson won the Grand Prize of “Agency of the Year” for the third time. Universal McCann launched several new services this year. Universal Solutions is a high-end media marketing consultancy devoted to improving accountability and driving incremental productivity. Universal Interactive, a new online planning and buying arm, currently operates in 32 offices in 28 countries and commands total billings of over $100 million. Universal McCann Futures is a strategic research unit that focuses on the evolving television landscape and technologies. Universal McCann Entertainment 13 The Interpublic Group offers Clients the most comprehensive media planning and buying capabilities of any marketing communications organization through Initiative Media Worldwide and Universal McCann. These two networks provide unparalleled global reach and resources. INITIATIVE MEDIA WORLDWIDE is the largest independent media services company in the world, with nearly $14 billion in billings and a network of 75 offices in 35 countries. As an independent network, Initiative is able to offer its power and reach to both advertising agencies and to Clients directly. While media planning and buying is its core product offering, Initiative provides additional services such as television programming and sponsorship, product placement, direct response, online and other interactive media, yellow pages and proprietary newspaper and out-of-home media services. This year, Initiative acquired over $1.2 billion in new business, including new Client wins and major assignments from existing Clients. For the third consecutive year, RECMA, the independent Research /Analysis Institute, The cornerstones of Universal McCann as a global brand are the research and the tools that demonstrate its commitment to being the undisputed champion of consumer understanding: Media in Mind™, the lynchpin of a strategy to place the consumer in the “total” media context, has been launched in 35 countries. It follows over 60,000 consumers across the globe, examining their lifestyles, aspirations and product and brand consumption habits – the largest such ongoing study in the media world. Prophecy II is a software program that harnesses Neural Networks for predicting most efficient TV laydowns. Total Impact Planner calculates accurate multimedia reach and frequency totals. Backed by almost 100 years of marketing communications experience, Universal McCann combines a deep understanding of media with fresh insights into Clients’ businesses to provide successful communications solutions. 14 13 / Marie-Jose Forissier, President & Chief Operating Officer / Lou Schultz, Chairman & Chief Executive Officer / Joseph Studley, Vice Chairman & Chief Finacial Officer / Initiative Media Worldwide 14 / Robin Kent, President / Ira Carlin, Chairman / Murray Dudgeon, EVP, Worldwide Operations Director / Universal McCann 2000 > The Interpublic Group of Companies, Inc. 3 7 ADVERTISING / DIRECT MARKETING / PUBLIC RELATIONS / HEALTHCARE MARKETING RESEARCH / MEETINGS & EVENTS / MEDIA SERVICES Sports Marketing > SALES PROMOTION / CORPORATE ID & BRAND EQUITY Create Glory > Octagon is the communications industry’s leading company across the full spectrum of sports marketing disciplines and practice areas, including motor sports (the British Grand Prix), athlete representation (over 750 athletes represented), sports television production and distribution, and event management. 3 8 The Interpublic Group of Companies, Inc. > 2000 marketing consultancy; event management and ownership; global motor sports circuits and events; and television production and distribution. Octagon combines these skills with marketing expertise to maximize return for its Clients and partners. Hewitt and Gustavo Kuerten, who finished the year as the world’s number one, beating Sampras and Agassi in back-to-back matches at the Masters. Strategic acquisitions strengthened Octagon’s capability in baseball, NFL Football and NHL hockey. The year 2000 was highly successful for Octagon. Octagon Television turned in a strong performance, particularly in cricket and soccer, and with the introduction of motor-sports business from the Brands Hatch Group. The English Football Association renewed an important contract for another three years. Octagon Motorsports won a 15-year contract to run the British Grand Prix at Silverstone, one of the most famous and historic racing circuits in the world. In its first year as part of Octagon, the Brands Hatch Group has become more closely integrated, resulting in new revenue streams. For example, Octagon Television is now the television agency for all Brands Hatch events and Octagon Marketing is the exclusive sponsorship agency. Octagon Athletic Representation performed ahead of target, thanks to good performances by key Clients such as Martina Hingis, Anna Kournikova, Davis Love III, Lleyton Octagon Marketing and Event Management continued its focus on expanding the global network and added agencies in key markets such as Korea and Greece (for the 2004 Olympic Games), as well as strengthening existing operations through acquisitions in South Africa, the United Kingdom and Australia. Octagon also acquired a significant interest in the German soccer club Eintracht Frankfurt in June 2000. Subsequently, Germany won the right to host the 2006 World Cup and the city of Frankfurt will build a new stadium for the team. Octagon has been awarded a contract to operate and market that stadium, including ownership of naming rights. This high-profile partnership with the club is expected to generate further business opportunities. In addition to Octagon, Interpublic is further involved in sports marketing through its Kaleidoscope Sports and Entertainment and Momentum organizations. Octagon is already the second-largest sports marketing firm in the world, with 43 offices in 21 countries. It has a Client roster of more than 1,000 athletes, corporations, broadcasters, sports events and governing bodies. 15 The Interpublic Group is the only marketing communications and services group with a global sports marketing capability. Octagon, Interpublic’s global sports marketing unit, competes at the highest levels in all aspects of sports marketing and ranks among the top agencies of the world. OCTAGON owes its success to a unique proposition: a marketing-led strategy with long- term vision and understanding of partnership. The backing of Interpublic and the group’s marketing strength have been allied to achieve the acquisition of some of the leading national and regional companies in the sector. Just three years after moving into the sector, Octagon is already the second-largest sports marketing firm in the world, with 43 offices in 21 countries. It has a Client roster of more than 1,000 athletes, corporations, broadcasters, sports events and governing bodies. At the core of its offering is an understanding of the consumer – a unique skill in the marketplace. In a complex, multifaceted market, Octagon offers a full range of skills and services: athlete representation; sponsorship and sports 15 / Frank Lowe, Founder, Chairman & Chief Executive Officer / Octagon 2000 > The Interpublic Group of Companies, Inc. 4 1 ADVERTISING / DIRECT MARKETING / PUBLIC RELATIONS / HEALTHCARE MARKETING RESEARCH / MEETINGS & EVENTS / MEDIA SERVICES SPORTS MARKETING Sales Promotion > CORPORATE ID & BRAND EQUITY Create Action > Momentum had more winners than any other agency at the 2000 Pro Awards including “Best Overall Promotion,” “Best Use of Television,” “Most Innovative Communications Strategy,” “Best Activity Generating Brand Awareness/Trial” and “Best Business-to-Business Campaign.” 4 2 The Interpublic Group of Companies, Inc. > 2000 Through Experiential BrandingTM, Momentum’s proprietary approach, promotional programs engage consumers in personal, memorable and valuable ways, to provide them with a meaningful experience with a brand. Momentum’s multidimensional set of services is based on the premise that brands are first and foremost providers of experiences. In 2000, Momentum drove growth by adding more than a dozen major global Clients to its roster, and won assignments from existing Clients to create new promotions, sponsorships, publicity and events-based programs around the world. Momentum received a number of industry honors for its work, most notably the Sports Business Journal’s ranking of Momentum as the top consulting and marketing services firm, and being one of the agencies featured in PROMO magazine’s “Top 100 in 2000.” At the Pro Awards 2000, Momentum had more winners than any other agency. Awards included Best Overall Promotion, Best Use of Advertising, Most Innovative Communication Strategy, Best Activity Generating Brand Awareness/Trial, and Best Business-to-Business Campaign. The 2000 Reggie Awards honored Momentum with the Super Reggie, as well as two Gold and one Bronze Reggie. And in the United Kingdom, NDI Momentum took two Silver and two Bronze prizes at the British POP Awards. Throughout the year, Momentum rapidly expanded its global footprint through office openings and strategic acquisitions. In North America, it added a Cincinnati office and expanded in St. Louis through the acquisition of Waylon. The New York office also grew with the acquisition of Diamond Promotions. Expansion in Europe included developing a field marketing capability in the United Kingdom with the acquisition of GSD; acquisition of a second agency in Germany; addition of a second Spanish office in Barcelona; and entry into several new markets: Belgium, Poland, and Croatia. In Asia, Momentum launched a joint venture in Tokyo and entered the Hong Kong and Taiwan markets. And in Latin America, it acquired second offices in both Mexico and Brazil. Momentum’s fusion of world-class expertise and global reach will continue to help Clients ensure that business and consumer customers experience their brands in new, compelling and differentiated ways, within an increasingly crowded, competitive marketplace. Interpublic’s DraftWorldwide and Zipatoni agencies also provide Clients with full promotion capabilities. 16 MOMENTUM WORLDWIDE is The Interpublic Group’s global event marketing and promotion company. It operates with one simple clear mission: to bring a marketer’s products and services to life. Momentum has grown to be the largest Client-sponsored presence marketing consulting company in the world, with 2000 worldwide billings in excess of $700 million. Momentum offers special expertise with major marquee entertainment, presence marketing promotion and sporting events. As a recognized leader in the emerging field of experiential marketing, Momentum fulfills its mission with a full range of capabilities, including consulting, sales promotion, event production, presence marketing, design and public relations. With these service offerings, Momentum is dedicated to supporting Clients worldwide, through its 52 offices in more than 35 countries. Momentum has grown to be the largest Client-sponsored presence marketing consulting company in the world, with 2000 worldwide billings in excess of $700 million. It offers special expertise with major marquee entertainment, presence marketing promotion and sporting events. 16 / Mark Shapiro, Chairman & Chief Executive Officer, Momentum North America / Chris Weil, Regional Director, Momentum Europe Mark Dowley, Chairman & Chief Executive Officer / Momentum Worldwide 2000 > The Interpublic Group of Companies, Inc. 4 5 ADVERTISING / DIRECT MARKETING / PUBLIC RELATIONS / HEALTHCARE MARKETING RESEARCH / MEETINGS & EVENTS / MEDIA SERVICES SPORTS MARKETING / SALES PROMOTION Corporate ID & Brand Equity > Create Recognition > FutureBrand was named by UK Design Week as the “Number One Global Branding and Packaging Consultancy.” 4 6 The Interpublic Group of Companies, Inc. > 2000 FutureBrand is a leading global brand consulting firm that provides a full range of corporate and consumer branding services and has a broad capability in 17 helping large corporations manage brands. In 2000, FutureBrand won new assignments from a variety of global corporations, including some of the world’s leading names in automobiles, transportation, food and beverages, pharmaceuticals, chemicals, finance, energy, and travel. FutureBrand’s prominence in the industry was recognized this year by a leading U.K.- based trade magazine, Design Week. The magazine ranked FutureBrand as the number one global corporate identity design consultancy, in terms of global fee income; number one U.K. corporate identity consultancy, in terms of U.K. fee income; and the number one global branding and packaging consultancy. FUTUREBRAND is a leading global brand consulting firm that provides a full range of corporate and consumer branding services including: brand strategy and positioning, naming, corporate identity, structural and packaging design, customer environment branding, digital branding and brand valuation. With 26 offices in 19 countries, FutureBrand is focused on key Client industries with dedicated industry practice groups in: technology and communications, consumer products, financial services, travel and hospitality, automotive, entertainment and media and retail. FutureBrand Coleman services a wide range of market leaders in virtually every consumer goods category, including: food, beverages, health and beauty care, pharmaceutical and household products. FutureBrand Marketing Corporation of America provides a range of market and business strategy consulting services, including: market strategy, customer targeting, channels management, new product development, e-business strategy and product branding. FutureBrand Hypermedia provides a full spectrum of interactive, digital branding and immersive branding services including the development of Internet and intranet sites as well as global brand management utilizing proprietary tools and processes such as Identilink, AssetLink and OnTrak. The FutureBrand name itself stems from a successful proprietary methodology pioneered by the firm to help “create and build great brands,” in response to the need for growth into new markets and new segments that is being experienced by most global corporations today. This methodology combines a rigorous strategic analysis of market and industry landscape factors with the highly creative resources needed in design and communications. FutureBrand has a broad capability in helping large corporations manage brands both among their internal and external audiences including employees, customers, the financial community, the media and other influencers. 17 / John Elkins, Chairman & Chief Executive Officer / FutureBrand 2000 > The Interpublic Group of Companies, Inc. 4 9 Board of Directors > FRANK J. BORELLI REGINALD K. BRACK JILL M. CONSIDINE JOHN J. DOONER, JR. PHILIP H. GEIER, JR. (1995) 1,2,3,4 Senior Advisor, (1996) 1,2,3,4,5 Former Chairman & (1997) 1,2,4,5 Chairman & (1995) 3,4 Chairman & (1975) 3 Chairman Emeritus Retired Chief Financial Chief Executive Officer, Chief Executive Officer, Chief Executive Officer Retired December 2000 Officer & Director, Time Inc. Marsh & McLennan Companies, Inc. The Depository Trust & Clearing Corporation > JAMES R. HEEKIN FRANK B. LOWE MICHAEL A. MILES LEIF H. OLSEN SEAN F. ORR J. PHILLIP SAMPER (2000) Chairman & (1990) Chairman & (1999) 2,5 (1972) 1,2,3,4 (2000) 4 (1990) 2,5 Former Chairman & President, Leif H. Olsen Executive Vice President & Managing Director, Chief Executive Officer, Chief Executive Officer, Chief Executive Officer, Investments, Inc., Chief Financial Officer Gabriel Venture Partners McCann-Erickson WorldGroup The Lowe Group Philip Morris Companies Inc. Financial Managers & Economic Consultants (Year Elected) 1 Audit Committee 2 Compensation Committee 3 Executive Policy Committee 4 Finance Committee 5 Nominating Committee 5 0 The Interpublic Group of Companies, Inc. > 2000 Officers&Information EXECUTIVE OFFICERS JOHN J. DOONER, JR. Chairman & Chief Executive Officer SEAN F. ORR Executive Vice President & Chief Financial Officer BARRY R. LINSKY Executive Vice President, Planning &Business Development BRUCE NELSON Executive Vice President & Chief Marketing Officer NICHOLAS J. CAMERA Senior Vice President, General Counsel & Secretary THOMAS A. DOWLING Senior Vice President, Financial Administration C. KENT KROEBER Senior Vice President, Human Resources SUSAN WATSON Senior Vice President, Investor Relations STEVEN L. WEISS Senior Vice President, Strategic Planning STEVEN BERNS Vice President & Treasurer ALBERT S. CONTE Vice President, Taxes & General Tax Counsel FREDERICK MOLZ Vice President & Controller CORPORATE HEADQUARTERS: 1271 Avenue of the Americas New York, New York 10020 212.399.8000 TRANSFER AGENT & REGISTRAR FOR COMMON STOCK: First Chicago Trust Company, A Division of EquiServe P.O. Box 2500 Jersey City, NJ 07303-2500 Stock of The Interpublic Group of Companies, Inc., is traded on the New York Stock Exchange. At December 31, 2000, there were 15,523 stockholders of record. ANNUAL MEETING: The annual meeting will be held on Monday, May 14, 2001, at 9:30 a.m. EST in the auditorium of The Equitable Center, 787 Seventh Avenue (between 51st and 52nd Streets) New York, NY 10019. AUTOMATIC DIVIDEND REINVESTMENT PLAN: An Automatic Dividend Reinvestment Plan is offered to all stockholders of record. The Plan, which is administered by First Chicago Trust Company, provides a way to acquire additional shares of Interpublic Common Stock in a systematic and convenient manner that affords savings in commissions for most stockholders. Those inter- ested in participating in this plan are invited to write for details and an authorization form to: First Chicago Trust Company, A Division of EquiServe, Dividend Reinvestment Plan P.O. Box 2598 Jersey City, NJ 07303-2598. General Counsel & Secretary, The Interpublic Group of Companies, Inc. 1271 Avenue of the Americas New York, NY 10020. Exhibits to the annual report will also be furnished, but will be sent only upon payment of the Company’s reasonable expense in furnishing them. STOCK OWNER INTERNET ACCOUNT ACCESS: Stock owners of record may access their account via the Internet. By accessing their account they may view share balances, obtain current market price of shares, historical stock prices, and the total value of their investment. In addition, they may sell or request issuance of dividend and cash investment plan shares. For information on how to access this secure site, please call First Chicago Trust Company, a division of EquiServe, toll-free at (877) THE WEB7 (843.9327) or visit www.gateway.equiserve.com. REGISTRAR & TRANSFER AGENT: First Chicago Trust Company, A Division of EquiServe P.O. Box 2500 Jersey City, NJ 07303-2500 For hearing impaired: 201.222.4955 FORM 10-K: A copy of the Company’s annual report (Form 10-K) to the Securities and Exchange Commission may be obtained without charge by writing to: Nicholas J. Camera, Senior Vice President, E-MAIL: INTERNET: equiserve@equiserve.com www.equiserve.com For more information regarding The Interpublic Group of Companies, visit its website at www.interpublic.com. 2000 > The Interpublic Group of Companies, Inc. 5 1 Interpublic Companies > 1 / McCann-Erickson WorldGroup 2 / The Lowe Group 3 / DraftWorldwide 4 / Octagon 5 / Initiative Media Worldwide 6 / Weber Shandwick Worldwide 7 / Golin /Harris International 8 / Jack Morton Worldwide 9 / NFO WorldGroup 1 / The world’s largest integrated marketing communications company includes McCann-Erickson Advertising, McCann Relationship Marketing, Momentum, Torre Lazur McCann Healthcare, FutureBrand, Zentropy Partners and its globally aligned partner for public relations, Weber Shandwick Worldwide. representation; sponsorship and sports marketing consultancy; event management and ownership; global motor-sports circuits and events and television production and distribution. 5 / The world’s largest independent media management company. 2 / The number four-ranked global advertising agency network includes Lowe Lintas & Partners Advertising and the Lowe Healthcare Group of specialized healthcare communications agencies. 6 / The world’s largest public relations company. 7 / A top ten global public relations company. 3 / The largest domestic and number- three ranked global company specializing in brand building, direct and promotional marketing. 4 / A global leader in all aspects of sports marketing including: athlete 8 / The global leader in experiential marketing and corporate meetings and events. 9 / The largest custom research firm in North America and one of the top three global research firms. Interpublic U.S. Advertising Agencies > In addition to the above global companies, Interpublic has ten powerful domestic advertising agencies serving a mix of local, national and international Clients. Each is aligned with a global Interpublic agency network to provide international resources for its Clients. The ten agencies are: Campbell-Ewald, Campbell Mithun, Carmichael Lynch, Dailey & Associates, Deutsch, Gotham, Hill Holliday (including Hill Holliday/GMO), The Martin Agency, Mullen (including Mullen/LHC) and Suissa Miller. 5 2 The Interpublic Group of Companies, Inc. > 2000 ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C . 20549 ------------------- FORM 10-K Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended Commission file number December 31, 2000 1-6686 ------------------- THE INTERPUBLIC GROUP OF COMP ANIES, INC. (Exact name of registrant as specified in its charter) Delaware 13-1024020 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1271 Avenue of the Americas 10020 New York, New York (Zip Code) (Address of principal executive offices) (212) 399-8000 Registrant's telephone number, including area code Securities registered pursuant to Section 12(b) of the Act: Name of each exchange on Title of each class which registered ------------------- ------------------------ Common Stock New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X . No . --- --- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.___. The aggregate market value of the registrant's voting stock held by non-affiliates of the registrant was $10,934,268,765 as of March 27, 2001. Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. Common Stock outstanding at March 27, 2001: 312,407,679 shares. - 1 -  DOCUMENTS INCORPORATED BY REFERENCE 1. Portions of the Annual Report to Stockholders for the year ended December 31, 2000 are incorporated by reference in Parts I and II. 2. Portions of the Proxy Statement for the 2001 Annual Meeting of Stockholders are incorporated by reference in Parts I and III. PART I Item 1. Business -------- The Interpublic Group of Companies, Inc. was incorporated in Delaware in September 1930 under the name of McCann-Erickson Incorporated as the successor to the advertising agency businesses founded in 1902 by A.W. Erickson and in 1911 by Harri son K. McCann. It has operated under the Interpublic name since January 1961. As used in this Annual Report, the "Registrant" or "Interpublic" refers to The Interpublic Group of Companies, Inc. while the "Company" refers to Interpublic and its subsidiaries. Interpublic is a group of advertising and specialized marketing and communications service companies that together represent one of the largest resources of marketing and advertising expertise in the world. Interpublic's agencies and allied companies operate in more than 650 offices in 127 countries around the world and employ over 48,000 people. Interpublic's business is conducted throughout the world principally through two advertising and specialized marketi ng and communication services systems, McCann-Erickson WorldGroup and The Lowe Group, plus a number of additional marketing communications and marketing services networks, all as described below. MCCANN-ERICKSON WORLDGROUP is the leading worldwide marketing communications company that includes McCann-Erickson Worldwide, the world's largest advertising agency network, as well as specialized companies providing relationship (direct) marketing, experiential (event) marketing, brand strategy and identity development, healthcare communications and e-consultancy and services. THE LOWE GROUP with its flagship arm, Lowe Lintas & Partners Worldwide, is one of the largest advertising agency networks in the world. The agency's world-class creative reputation has been recognized with a number of prestigious industry awards. The other domestic stand -alone advertising agencies that operate autonomously, but are aligned with the foregoing Interpublic networks include: Campbell -Ewald, Campbell Mithun, Carmichael Lynch, Dailey & Associates, Deutsch, Gotham, Hill Holliday (including GMO/Hill Holliday), The Martin Agency, Mullen (including Mullen/LHC) and Suissa Miller. The principal functions of an advertising agency are to plan and create advertising programs for its clients and to place advertising in various media such as television, cinema, radio, magazines, newspapers, direct mail, outdoor and interactive electronic media. Planning advertising programs involves analyzing the market for the particular product or service, creating the appropriate advertising campaign to convey the agreed-upon benefit or message, and choosing the appropriate media to reach the desired market most effectively. The advertising agency develops a communication strategy and then creates an advertising program, within the limits imposed by the client's advertising - 2 - budget, and places orders for space or time with the media that have been selected. In order to meet the growing and changing needs of our client base, we offer many other marketing and media related services through our ownership of companies that are closely related to our advertising business including: DRAFTWORLDWIDE is one of the world's largest global marketing agencies, specializing in brand building, direct and promotional marketing. INITIATIVE MEDIA WORLDWIDE is the world's largest independent media management and media buying company, providing media planning and buying services at all levels. OCTAGON is Interpublic's global sports marketing unit providing sponsorship and sports marketing consultancy, event management and ownership, athlete representation ownership, sports television programming, the production, sale and distribution of sports television rights globally and the management of global motor sports circuits and events. NFO WORLDGROUP is the largest custom research firm in North America and a leading provider of research-based marketing information. THE ALLIED COMMUNICATIONS GROUP is Interpublic's leading -edge marketing services group. The Group's c ompanies provide the Interpublic agencies and their clients with a variety of specialized communications and marketing services including public relations, marketing research, event creation, management and consulting services. This group is comprised of the following autonomously run companies: THE GLOBAL PUBLIC RELATIONS GROUP includes two powerful public relations companies: Weber Shandwick Worldwide, the largest global public relations agency and Golin/Harris International, one of the ten largest U.S. public relations company. ISO HEALTHCARE GROUP is a multinational healthcare management consulting firm, specializing in growth strategies for leading pharmaceutical, biotech and medical device companies. JACK MORTON WORLDWIDE creates, produces and coordinates live meetings and events, environments, video, digital media and learning programs. In addition to domestic operations, the Company provides services for clients whose business is international in scope, as well as for clients whose business is restricted to a single country or a small number of countries. It has offices in Canada as well as in one or more cities in each of the following countries: EUROPE, AFRICA AND THE MIDDLE EAST ---------------------------------- Austria Greece Morocco Slovakia Azerbaijan Hungary Namibia Slovenia Bahrain Iceland Netherlands South Africa Belgium Israel Nigeria Spain Bulgaria Ireland Norway Sweden Cameroon Italy Oman Switzerland Croatia Ivory Coast Pakistan Tunisia Czech Republic Jordan Poland Turkey Denmark Kazakhstan Portugal Ukraine Egypt Kenya Qatar United Arab Emirates Estonia Kuwait Romania United Kingdom Finland Latvia Russia Uzbekistan France Lebanon Saudi Arabia Zambia Germany Mauritius Senegal Zimbabwe - 3 -  LATIN AMERICA AND THE CARIBBEAN ------------------------------- Argentina Colombia Guatemala Peru Barbados Costa Rica Honduras Puerto Rico Bermuda Dominican Republic Jamaica Trinidad Brazil Ecuador Mexico Uruguay Chile El Salvador Panama Venezuela ASIA AND THE PACIFIC -------------------- Australia Korea Philippines Taiwan Hong Kong Malaysia Singapore Thailand India Nepal Sri Lanka Vietnam Indonesia New Zealand South Korea Japan People's Republic of China Operations in the foregoing countries are carried on by one or more operating companies, at least one of which is either wholly owned by Interpublic or a subsidiary or is a company in which Interpublic or a subsidiary owns a 51% interest or more, except in Malawi and Nepal, where Interpublic or a subsidiary holds a minority interest. The Company also offers services in Albania, Aruba, the Bahamas, Belize, Bolivia, Cambodia, Gabon, Ghana, Grand Cayman, Guadeloupe, Guam, Guyana, Haiti, Reunion, Ivory Coast, Martinique, Nicaragua, Nigeria, Paraguay, Surinam, Uganda and Zaire through association arrangements with local agencies operating in those countries. For information concerning revenues and long -lived assets on a geographical basis for each of the last three years, reference is made to Note 12: Geographic Areas of the Notes to the Consolidated Financial Statements in the Company's Annual Report to Stockholders for the year ended December 31, 2000, which Note is hereby incorporated by reference. DEVELOPMENTS IN 2000 -------------------- The Company completed a number of acquisitions within the United States and abroad in 2000. See Note 4 to the Consolidated Financial Statements incorporated by reference in this Report on Form 10-K for a discussion of acquisitions. REVENUE ------- The Company generates revenue from planning, creating and placing advertising in various media and from planning and executing other communications or marketing programs. Historically, the commission customary in the industry was 15% of the gross charge ("billings") for advertising space or time; more recently lower commissions have been negotiated, but often with additional incentives paid for better performance. For example, an incentive component is frequently included in arrangements with clients based on improvements in an advertised brand's awareness or image, or increases in a client's sales or market share of the products or services being advertised. Under commission arrangements, media b ill the Company at their gross rates. The Company bills these amounts to its clients, remits the net charges to the media and retains the balance as its commission. Some clients, however, prefer to compensate the Company on a fee basis, under which the Company bills its client for the net charges billed by the media plus an agreed-upon fee. These fees usually are calculated to reflect the Company's hourly rates and out -of-pocket - 4 - expenses incurred on the client's behalf, plus proportional overhead and a profit mark-up. Normally, the Company, like other agencies, is primarily responsible for paying the media with respect to firm contracts for advertising time or space placed on its clients' behalf. This is a problem only if the client is unable to pay the Company because of insolvency or bankruptcy. The Company makes serious efforts to reduce the risk from a client's insolvency, including (1) carrying out credit clearances, (2) requiring in some cases payment of media in advance, or (3) agreeing with the media that the Company will be solely liable to pay the media only after the client has paid the Company for the media charges. The Company also receives commissions from clients for planning and supervising work done by outside contractors in the physical preparation of finished print advertisements and the production of television and radio commercials and other forms of advertising. This commission is customarily 17.65% of the outside contractor's net charge, which is the same as 15.0% of the outside contractor's total charges including commission. With the expansion of negotiated fees, the terms on which outstanding contractors' charges are billed are subject to wide variations and even include in some instances the elimination of commissions entirely, provided that there are adequate negotiated fees. The Company also derives revenue in many other ways, including the planning and placement in media of advertising produced by unrelated advertising agencies; the maintenance of specialized media placement facilities; the creation and publication of brochures, billboards, point of sale materials and direct marketing pieces for clients; the planning and carrying out of specialized marketing research; public relations campaigns, creating and managing special events at which clients' products are featured; and designing and carrying out interactive programs for special uses. The five clients of the Company that made the largest revenue contribution in 2000 accounted individually for approximately 1.6% to 7.3% of such revenue and in the aggregate accounted for over approximately 15% of such revenue. Twenty clients of the Company accounted for approximately 26% of such revenue. Based on revenue, the five largest clients of the Company are General Motors Corporation, Nestle, Unilever and Johnson & Johnson and Coca-Cola. General Motors Corporation first became a client of one of the Company's agencies in 1916 in the United States. Predecessors of several of the Lintas agencies have supplied advertising services to Unilever since 1893. The client relationship with Nestle b egan in 1940 in Argentina. While the loss of the entire business of one of the Company's five largest clients might have a material adverse effect upon the business of the Company, the Company believes that it is very unlikely that the entire business of any of these clients would be lost at the same time, because it represents several different brands or divisions of each of these clients in a number of geographical markets - in each case through more than one of the Company's agency systems. Representation of a client rarely means that the Company handles advertising for all brands or product lines of the client in all geographical locations. Any client may transfer its business from an agency within the Company to a compe ting agency, and a client may reduce its marketing budget at any time. The Company's agencies in many instances have written contracts with their clients. As is customary in the industry, these contracts provide for termination by either party on relatively short notice, usually 90 days but sometimes shorter or longer. In 2000, however, 21% of revenue was derived from clients that had been associated with one or more of the Company's agencies or their predecessors for 20 or more years. - 5 - PERSONNEL --------- As of January 1, 2001, the Company employed approximately 48,200 persons, of whom nearly 20,100 were employed in the United States. Because of the personal service character of the marketing communications business, the quality of personnel is of crucial importance to continuing success. There is keen competition for qualified employees. Interpublic considers its employee relations to be satisfactory. The Company has an active program for training personnel. The program includes meetings and seminars throughout the world. It also involves training personnel in its offices in New York and in its larger offices worldwide. COMPETITION AND OTHER FACTORS ----------------------------- The advertising agency and other marketing communications and marketing services businesses are highly competitive. The Company's agencies and media services must compete with other agencies and with other providers of creative or media services which are not themselves advertising agencies, in order to maintain existing client relationships and to obtain new clients. Competition in the advertising agency business depends to a large extent on the client's perception of the quality of an agency's "creative product". An agency's ability to serve clients, particularly large international clients, on a broad geographic basis is also an important competitive consideration. On the other hand, because an agency's principal asset is its people, freedom of entry into the business is almost unlimited and quite small agencies are, on occasion, able to take all or some portion of a client's account from a much larger competitor. Moreover, increasing size bring some limitations to an agency's potential for securing new business, because many clients prefer not to be represented by an agency that represents a competitor. Also, clients frequently wish to have different products represented by different agencies. The fact that the Company owns two separate worldwide agency systems and interests in other advertising agencies gives it additional competitive opportunities. The advertising and marketing communications businesses is subject to government regulation, both domestic and foreign. There has been an increasing tendency in the United States on the part of advertisers to resort to the courts, indus try and self-regulatory bodies to challenge comparative advertising on the grounds that the advertising is false and deceptive. Through the years, there has been a continuing expansion of specific rules, prohibitions, media restrictions, labeling disclosures and warning requirements with respect to the advertising for certain products. Representatives within certain government bodies, both domestic and foreign, continue to initiate proposals to ban the advertising of specific products and t o impose taxes on or deny deductions for advertising which, if successful, may have an adverse effect on advertising expenditures. The international operations of the Company still remain exposed to certain risks which affect foreign operations of all kinds, such as local legislation, monetary devaluation, exchange control restrictions and unstable political conditions. In addition, international advertising agencies are still subject to ownership restrictions in certain countries because they are considered an integral factor in the communications process. STATEMENT REGARDING FORWARD LOOKING DISCLOSURE ---------------------------------------------- Certain sections of this report, including "Business", "Competition and Other Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" contain forward looking statements concerning future events and developments that involve risks and uncertainties, including those associated with the effect of national and regional economic conditions, the ability of the Company to attract new clients and retain existing clients, the - 6 - financial success of clients of the Company, other developments of clients of the Company, and developments from changes in the regulatory and legal environment for advertising agencies around the world. Item 2. Properties ---------- Most of the operations of the Company are conducted in leased pre mises, and its physical property consists primarily of leasehold improvements, furniture, fixtures and equipment. These facilities are located in various cities in which the Company does business throughout the world. However, subsidiaries of the Company own office buildings in Garden City, New York; Blair, Nebraska; Warren, Michigan; Frankfurt, Germany; Sao Paulo, Brazil; Lima, Peru; Mexico City, Mexico; Santiago, Chile; and Brussels, Belgium and own office condominiums in Buenos Aires, Argentina; Bogota, Colombia; Manila, the Philippines; in England, subsidiaries of the Company own office buildings in London, Manchester, Birmingham and Stoke-on-Trent. The Company's ownership of the office building in Frankfurt is subject to three mortgages which became effective on or about February 1993. These mortgages terminate at different dates, with the last to expire in February 2003. Reference is made to Note 10: Long-Term Debt, of the Notes to the Consolidated Financial Statements in the Company's Annual Report to Stockholders for the year ended December 31, 2000, which Note is hereby incorporated by reference. Item 3. Legal Proceedings ----------------- Neither the Company nor any of its subsidiaries are subject to any pending material legal proceedings. Item 4. Submission of Matters to a Vote of Security Holders --------------------------------------------------- Not applicable. EXECUTIVE OFFICERS OF THE REGISTRANT ------------------------------------ There follows the information disclosed in accordance with Item 401 of Regulation S-K of the Securities and Exchange Commission (the "Commission") as required by Item 10 of Form 10-K with respect to executive officers of the Registrant. Name Age Office ---- --- ------ John J. Dooner, Jr. (1) 52 Chairman of the Board, President and Chief Executive Officer Sean F. Orr (1) 46 Executive Vice President, Chief Financial Officer Nicholas J. Camera 54 Senior Vice President, General Counsel and Secretary Thomas J. Dowling 49 Senior Vice President-Financial Administration C. Kent Kroeber 62 Senior Vice President-Human Resources - 7 - Barry R. Linsky 59 Executive Vice President-Planning and Business Development Frank B. Lowe (1) 59 Chairman of the Board and Chief Executive Officer of Lowe Lintas and Partners Frederick Molz 44 Vice President and Controller Bruce S. Nelson 49 Executive Vice President and Chief Marketing Officer Susan V. Watson 48 Senior Vice President-Investor Relations ---------- (1) Also a Director There is no family relationship among any of the executive officers. The employment histories for the past five years of Messrs. Dooner, Lowe and Orr are incorporated by reference to the Proxy Statement for Interpublic's 2001 Annual Meetin g of Stockholders. Mr. Camera joined Interpublic in May, 1993. He was elected Vice President, Assistant General Counsel and Assistant Secretary in June, 1994, Vice President, General Counsel and Secretary in December, 1995, and Senior Vice President, General Counsel and Secretary in February, 2000. Mr. Dowling was elected Senior Vice President-Financial Administration of Interpublic effective February, 2001. He joined Interpublic in January, 2000 as Vice President and General Auditor. Mr. Kroeber joined Interpublic in January, 1966 as Manager of Compensation and Training. He was elected Vice President in 1970 and Senior Vice President in May, 1980. Mr. Linsky joined Interpublic in January, 1991 when he was elected Senior Vice President-Planning and Business Development. Prior to that time, he was Executive Vice President, Account Management of Lowe & Partners, Inc. Mr. Linsky was elected to that position in July, 1980, when the corporation was known as The Marschalk Company and was a subsidiary of Interpublic. Mr. Linsky was elected Executive Vice President of Interpublic in February 2001. Mr. Molz was elected Vice President and Controller of Interpublic effective January, 1999. He joined Interpublic in August, 1982, and his most recent position was Senior Vice President -Financial Operations of Ammirati Puris Lintas Worldwide, a subsidiary of Interpublic, since April, 1994. He also held previous positions in the Interpublic Controller's Department and Tax Department. Mr. Nelson joined Interpublic in September, 2000 as Executive Vice President, Chief Marketing Officer. Prior to that he had pursued a multi-disciplinary career with McCann -Erickson for 19 years before leaving as Executive Vice President, Director of Worldwide Accounts to serve as Vice Chairman, Chief Knowledge Officer at Young & Rubicam Inc. Ms. Watson joined Interpublic in October 2000. Prior to joining the company, she was Vice President, Investor Relations at PepsiCo, Inc. and previously was employed by Nielsen Media Research and Gannett Co. in a similar capacity. - 8 - PART II Item 5. Market for the Registrant's Common Equity and Rel ated Stockholder ----------------------------------------------------------------- Matters ------- The response to this Item is incorporated: (i) by reference to the Registrant's Annual Report to Stockholders for the year ended December 31, 2000. See the heading: Results by Quarter (Unaudited), and Note 2: Stockholders' Equity, of the Notes to the Consolidated Financial Statements and information under the heading Transfer Agent and Registrar for Common Stock; (ii) On October 5, 2000 the Registrant issued 20,764 shares of Interpublic Stock and paid Pounds Sterling 1.19 million in cash to the former shareholders of a company as part of the initial payment for 100% of the shares of the company which was acquired in the third quarter of 2000. The shares of Interpublic Stock were valued at US$726,102 at the date of issuance. The shares of Interpublic Stock were issued by the Registrant without registration in an "off shore transaction" and solely to "non U.S. persons" in reliance on Rule 903(b)3 ) of Regulation S under the Securities Act. (iii)On November 9, 2000, the Registrant issued 9,913 shares of Interpublic Stock and paid US$1,000,000 in cash to the Seller of the business and assets of a company representing the consideration paid at Closing. The shares of Interpublic Stock were valued at US$400,000 at the date of issuance. The shares of Interpublic Stock were issued by the Registrant without registration in reliance on Section 4(2) under the Securities Act, based on the sophistication of the acquired company's former stockholder. (iv) On December 31, 2000, the Registrant issued 53,666 shares of Interpublic Stock to former shareholders in respect of the downpayment for the acquisition of 100% of a company. The shares of Interpublic Stock were valued at US$2,150,000 at the date of issuance. The shares of Interpublic Stock were issued by the Registrant without registration in reliance on Section 4(2) under the Securities Act, based on the sophistication of the acquired company's former stockholder. (v) On October 24, 2000, the Registrant issued 26,792 shares of Interpublic Stock and paid Austrian Dollars 36,515,274 in cash to the former shareholders of a company as part of a deferred payment for 41% of the shares of the company 45% of which was acquired in the first quarter of 1997. The shares of Interpublic Stock were valued at US$1,009,533 at the date of issuance. The shares of Interpublic Stock were issued by the Registrant without registration in an "off shore transaction" and solely to "non US persons" in reliance on Rule 903(b)(3) of Regulation S under the Securities Act. (vi) On October 24, 2000, the Registrant issued 26,789 shares of Interpublic Stock and paid Austrian Dollars 20,913,157 in cash to the former shareholders of a company as part of a deferred payment for the remaining 51% of the shares of the company 49% of which was acquired in the first quarter of 1997. The shares of Interpublic Stock were valued at US$1,009,533 at the date of issuance. The shares of Interpublic Stock were issued by the Registrant without registration in an "off shore transaction" and solely to "non US persons" in reliance on Rule 903(b)(3) of Regulation S under the Securities Act. (vii)On September 14, 2000, in respect of the second installment for the acquisition of 80% of the company acquired in the second quarter of 1998, the Registrant issued 5,880 shares of Interpublic Stock and paid Swiss Francs 695,752 in cash to the former shareholders of a company - 9 -  as part of a deferred payment for the remaining 51% of the shares of the company 49% of which was acquired in the first quarter of 1997. The shares of Interpublic Stock were valued at US$225,542 at the date of issuance. The shares of Interpublic Stock were issued by the Registrant without registration in an "off shore transaction" and solely to "non US persons" in reliance on Rule 903(b)(3) of Regulation S under the Securities Act. (viii) On November 7, 2000, in respect of the final payment for 31% and 20% equity purchases, the Registrant issued 35,890 shares of Interpublic Stock for the 31% and 62,274 shares of Interpublic Stock for the 20%. The shares of Interpublic Stock were valued at US$3,866,903 at the date of issuance. Item 6. Selected Financial Data ----------------------- The response to this Item is incorporated by reference to the Registrant's Annual Report to Stockholders for the year ended December 31, 2000 under the heading Selected Financial Data for Five Years. Item 7. Management's Discussion and Analysis of Financial Condition and --------------------------------------------------------------- Results of Operations --------------------- The response to this Item is incorporated by reference to the Registrant's Annual Report to Stockholders for the year ended December 31, 2000 under the heading Management's Discussion and Analysis of Financial Condition and Results of Operations. Item 7A. Quantitative and Qualitative Disclosures About Market Risk ---------------------------------------------------------- The response to this Item is incorporated by reference to the Registrant's Annual Report to Stockholders for the year ended December 31, 2000 under the heading Management's Discussion and Analysis of Financial Condition and Results of Operations. Item 8. Financial Statements and Supplementary Data ------------------------------------------- The response to this Item is incorporated in part by reference to the Registrant's Annual Report to Stockholders for the year ended December 31, 2000 under the headings Financial Statements and Notes to the Consolidated Financial Statements. Reference is also made to the Financial Statement Schedule listed under Item 14(a) of this Report on Form 10-K. Item 9. Changes in and Disagreements with Accountants on Accounting and --------------------------------------------------------------- Financial Disclosure -------------------- Not applicable. - 10 -  PART III Item 10. Directors and Executive Officers of the Registrant -------------------------------------------------- The information required by this Item is incorporated by reference to the Registrant's Proxy Statement for its 2001 Annual Meeting of Stockholders (the "Proxy Statement"), to be filed not later than 120 days after the end of the 2000 calendar year, except for the description of Interpublic's Executive Officers which appears in Part I of this Report on Form 10-K under the heading "Executive Officers of the Registrant". Item 11. Executive Compensation ---------------------- The information required by this Item is incorporated by reference to the Proxy Statement. Such incorporation by reference shall not be deemed to incorporate specifically by reference the information referred to in Item 402(a)(8) of Regulation S-K. Item 12. Security Ownership of Certain Beneficial Owners and Management -------------------------------------------------------------- The information required by this Item is incorporated by reference to the Proxy Statement. Item 13. Certain Relationships and Related Transactions ---------------------------------------------- The information required by this Item is incorporated by reference to the Proxy Statement. Such incorporation by reference shall not be deemed to incorporate specifically by reference the information referred to in Item 402(a)(8) of Regulation S-K. PART IV Item 14. Exhibits, Financial Statement Schedule, and Reports on Form 8-K --------------------------------------------------------------- (a) Listed below are all fina ncial statements, financial statement schedules and exhibits filed as part of this Report on Form 10-K. 1. Financial Statements: See the Index to Financial Statements on page F -1. 2. Financial Statement Schedule: See the Index to Financial Statement Schedule on page F-1. 3. Exhibits: (Numbers used are the numbers assigned in Item 601 of Regulation S-K and the EDGAR Filer Manual. An additional copy of this exhibit index immediately precedes the exhibits filed with this Report on Form 10-K and the exhibits transmitted to the Commission as part of the electronic filing of the Report.) - 11 - Exhibit No. Description ----------- ----------- 3 (i) The Restated Certificate of Incorporation of the Registrant, as amended is incorporated by reference to its Report on Form 10-Q for the quarter ended June 30, 1999. See Commission file number 1-6686. (ii) The By-Laws of the Registrant, amended as of February 19, 1991, are incorporated by reference to its Report on Form 10 -K for the year ended December 31, 1990. See Commission file number 1-6686. 4 Instruments Defining the Rights of Security Holders. (i) Indenture, dated as of September 16, 1997 between Interpublic and The Bank of New York is incorporated by reference to the Registrant's Report on Form 10-Q for the quarter ended September 30, 1998. See Commission file number 1-6686. (ii) The Preferred Share Purchase Rights Plan as adopted on July 18, 1989 is incorporated by reference to Registrant's Registration Statement on Form 8 -A dated August 1, 1989 (No. 00017904) and, as amended, by reference to Registrant's Registration Statement on Form 8 dated October 3, 1989 (No. 00106686). 10 Material Contracts. (a) Purchase Agreement, dated September 10, 1997, among The Interpublic Group of Companies, Inc. ("Interpublic"), Morgan Stanley & Co., Incorporated, Goldman Sachs and Co. and SBC Warburg Dillon Read Inc. is incorporated by reference to the Registrant's Report on Form 10-Q for the quarter ended September 30, 1999. See Commission file number 1-6686. (b) Employment, Consultancy and other Compensatory Arrangements with Management. Employment and Consultancy Agreements and any amendments or supplements thereto and other compensatory arrangements filed with the Registrant's Reports on Form 10-K for the years ended December 31, 1980 through December 31, 1998 inclusive, or filed with the Registrant's Reports on Form 10-Q for the periods ended March 31, 2000, June 30, 2000 and September 30, 2000 are incorporated by reference in this Report on Form 10-K. See Commission file number 1-6686. Listed below are agreements or amendments to agreements between the Registrant and its executive officers which remain in effect on and after the date hereof or were executed during the year ended December 31, 2000 and thereafter, unless previously submitted, which are filed as exhibits to this Report on Form 10 -K. (i) James R. Heekin --------------- (a) Employment Agreement dated as of October 25, 1993 between Interpublic and James R. Heekin. (b) Executive Special Benefit Agreement dated as of January 1, 1994 between Interpublic and James R. Heekin. (c) Executive Severance Agreement dated as of January 1, 1998 between Interpublic and James R. Heekin. (d) Employment Agreement dated as of January 1, 1998 between Interpublic and James R. Heekin. (e) Executive Special Benefit Agreement dated as of February 1, 1998 between Interpublic and James R. Heekin. - 12 -  (f) Supplemental Agreement to an Employment Agreement dated as of March 28, 2000 between Interpublic and James R. Heekin. (g) Supplemental Agreement to an Executive Severance Agreement dated as of June 1, 2000 between Interpublic and James R. Heekin. (h) Executive Special Benefit Agreement dated as of January 1, 2000 between Interpublic and James R. Heekin. (ii) Barry R. Linsky --------------- (a) Supplemental Agreement to an Executive Special Benefit Agreement dated as of June 30, 2000 between Interpublic and Barry R. Linsky. (b) Executive Special Benefit -Income Replacement Agreement dated as of June 1, 2000 between Interpublic and Barry R. Linsky. (c) Supplemental Agreement dated as of March 26, 2001, between Interpublic and Barry R. Linsky. (iii)C. Kent Kroeber --------------- (a) Supplemental Agreement to an Executive Special Benefit Agreement dated as of June 30, 2000 between Interpublic and C. Kent Kroeber. (b) Executive Special Benefit -Income Replacement Agreement dated as of June 1, 2000 between Interpublic and C. Kent Kroeber. (iv) Thomas J. Volpe --------------- (a) Supplemental Agreement to an Executive Special Benefit Agreement dated as of June 30, 2000 between Interpublic and Thomas J. Volpe. (b) Supplemental Agreement to an Executive Special Benefit-Income Replacement Agreement dated as of June 30, 2000 between Interpublic and Thomas J. Volpe. (c) Executive Special Benefit Agreement dated as of Marc h 21, 2000 between Interpublic and Thomas J. Volpe. (d) Executive Special Benefit -Income Replacement Agreement dated as of June 1, 2000 between Interpublic and Thomas J. Volpe. (v) Bruce Nelson ------------ (a) Employment Agreement dated as of September 5, 2000 between Interpublic and Bruce Nelson. (b) Executive Special Benefit Agreement dated as of September 1, 2000 between Interpublic and Bruce Nelson. (c) Supplemental Agreement dated as of September 1, 2000 to an Executive Special Benefit Agreement dated as of Janua ry 1, 1986 between Interpublic and Bruce Nelson. - 13 -  (vi) Frank B. Lowe ------------- (a) Employment Agreement dated as of January 1, 2001 between Interpublic and Frank B. Lowe. (b) Supplemental Agreement to an Employment Agreement dated as of January 2, 2001 between Interpublic and Frank B. Lowe. (c) Executive Special Benefit Agreement dated as of January 15, 2001 between Interpublic and Frank B. Lowe. (c) Executive Compensation Plans. (i) Trust Agreement, dated as of June 1, 1990 between Interpublic, Lintas Campbell-Ewald Company, McCann-Erickson USA, Inc., McCann-Erickson Marketing, Inc., Lintas, Inc. and Chemical Bank, as Trustee, is incorporated by reference to Registrant's Annual Report o n Form 10-K for the year ended December 31, 1990. See Commission file number 1-6686. (ii) The Stock Option Plan (1988) and the Achievement Stock Award Plan of the Registrant are incorporated by reference to Appendices C and D of the Prospectus dated May 4, 1989 forming part of its Registration Statement on Form S-8 (No. 33-28143). (iii) The Management Incentive Compensation Plan of the Registrant is incorporated by reference to the Registrant's Report on Form 10-Q for the quarter ended June 30, 1995. See Commission file number 1-6686. (iv) The 1986 Stock Incentive Plan of the Registrant is incorporated by reference to Registrant's Annual Report on Form 10-K for the year ended December 31, 1993. See Commission file number 1-6686. (v) The 1986 United Kingdom Stock Option Plan of the Registrant is incorporated by reference to Registrant's Annual Report on Form 10-K for the year ended December 31, 1992. See Commission file number 1-6686. (vi) The Employee Stock Purchase Plan (1985) of the Registrant, as amended, is incorporated by reference to Registrant's Annual Report on Form 10-K for the year ended December 31, 1993. See Commission file number 1-6686. (vii) The Long-Term Performance Incentive Plan of the Registrant is incorporated by reference to Appendix A of the Prospectus dated December 12, 1988 forming part of its Registration Statement on Form S-8 (No. 33-25555). (viii) Resolution of the Board of Directors adopted on February 16, 1993, amending the Long-Term Performance Incentive Plan is incorporated by reference to Registrant's Annual Report on Form 10-K for the year ended December 31, 1992. See Commission file number 1-6686. (ix) Resolution of the Board of Directors adopted on May 16, 1989 amending the Long-Term Performance Incentive Plan is incorporated by reference to Registrant's Report on Form 10-K for the year ended December 31, 1989. See Commission file number 1-6686. (x) The 1996 Stock Incentive Plan of the Registrant is incorporated by reference to the Registrant's Report on Form 10-Q for the quarter ended June 30, 1996. See Commission file number 1-6686. - 14 -  (xi) The 1997 Performance Incentive Plan of the Registrant is incorporated by reference to the Registrant's Report on Form 10-Q for the quarter ended June 30, 1997. See Commission file number 1-6686. (d) Loan Agreements. (i) Other Loan and Guaranty Agreements filed with the Registrant's Annual Report on Form 10-K for the years ended December 31, 1988 and December 31, 1986 are incorporated by reference in this Report on Form 10-K. Other Credit Agreements, amendments to various Credit Agreements, Supplemental Agreements, Termination Agreements, Loan Agreements, Note Purchase Agreements, Guarantees and Intercreditor Agreements filed with the Regist rant's Report on Form 10-K for the years ended December 31, 1989 through December 31, 1999, inclusive and filed with Registrant's Reports on Form 10-Q for the periods ended March 31, 2000, June 30, 2000 and September 30, 2000 are incorporated by reference into this Report on Form 10-K. See Commission file number 1-6686. (e) Leases. Material leases of premises are incorporated by reference to the Registrant's Annual Report on Form 10 -K for the years ended December 31, 1980 and December 31, 1988. See Commission file number 1-6686. (f) Acquisition Agreement for Purchase of Real Estate. Acquisition Agreement (in German) between Treuhandelsgesellschaft Aktiengesellschaft & Co. Grundbesitz OHG and McCann-Erickson Deutschland GmbH & Co. Management Property KG ("McCann-Erickson Deutschland") and the English translation of the Acquisition Agreement are incorporated by reference to Registrant's Annual Report on Form 10-K for the year ended December 31, 1 992. See Commission file number 1 -6686. (g) Mortgage Agreements and Encumbrances. (i) Summaries in German and English of Mortgage Agreements between McCann-Erickson Deutschland and Frankfurter Hypothekenbank Aktiengesellschaft ("Frankfurter Hypothekenbank"), Mortgage Agreement, dated January 22, 1993, between McCann-Erickson Deutschland and Frankfurter Hypothekenbank, Mortgage Agreement, dated January 22, 1993, between McCann-Erickson Deutschland and Hypothekenbank are incorporated by reference to Registrant's Annual Report on Form 10 -K for the year ended December 31, 1993. See Commission file number 1-6686. Summaries in German and English of Mortgage Agreement, between McCann-Erickson Deutschland and Frankfurter Sparkasse and Mortgage Agreement, dated January 7, 1993, between McCann-Erickson Deutschland and Frankfurter Sparkasse are incorporated by reference to Registrant's Annual Report on Form 10-K for the year ended December 31, 1992. See Commission file number 1-6686. (ii) Summaries in German and English of Documents creating Encumbrances in favor of Frankfurter Hypothekenbank and Frankfurter Sparkasse in connection with the aforementioned Mortgage Agreements, Encumbrance, dated January 15, 1993, in favor of Frankfurter Hypothekenbank, and Encumbrance, dated January 15, 1993, in favor of Frankfurter Sparkasse are incorporated by reference to Registrant's Annual Report on Form 10-K for the year ended December 31, 1992. See Commission file number 1-6686. - 15 -  (iii) Loan Agreement (in English and German), dated January 29, 1993 between Lintas Deutschland GmbH and McCann-Erickson Deutschland is incorporated by reference to Registrant's Annual Report on Form 10-K for the year ended December 31, 1992. See Commission file number 1-6686. 11 Computation of Earnings Per Share. 13 This Exhibit includes: (a) those portions of the Annual Report to Stockholders for the year ended December 31, 2000 which are included therein under the following headings: Financial Highlights; Report of Management; Management's Discussion and Analysis of Financial Condition and Results of Operations; Consolidated Balance Sheet; Consolidated Statement of Income; Consolidated Statement of Cash Flows; Consolidated Statement of Stockholders' Equity and Comprehensive Income; Notes to Consolidated Financial Statements (the aforementioned Consolidated Financial Statements together with the Notes to Consolidated Financial Statements hereinafter shall be referred to as the "Consolidated Financial Statements"); Report of Independent Accountants; Selected Financial Data for Five Years; Results by Quarter (Unaudited); and Stockholders Information. 21 Subsidiaries of the Registrant. 23 Consent of Independent Accountants: PricewaterhouseCoopers LLP Consent of Independ ent Public Accountants: J.H. Cohn LLP Consent of Independent Accountants: Arthur Andersen LLP 24 Power of Attorney to sign Form 10-K and resolution of Board of Directors re Power of Attorney. 99 The Company filed the following reports on Form 8-K during the quarter ended December 31, 2000: (i) Senior Debt Indenture dated as of October 20, 2000, by The Interpublic Group of Companies, Inc. and The Bank of New York, Trustee, relating to the 7.875% Notes due 2005 is incorporated by reference to Exhibit 99.1 of the Registrant's Form 8 -K dated October 24, 2000. (ii) Underwriting Agreement dated as of October 17, 2000, relating to the 7.875% Notes due 2005 is incorporated by reference to Exhibit 99.2 of the Registrant's Form 8 -K dated October 24, 2000. - 16 -  SIGNATURES Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. THE INTERPUBLIC GROUP OF COMPANIES, INC. (Registrant) March 29, 2001 BY: /s/ John J. Dooner, Jr. ---------------------------------- John J. Dooner, Jr. Chairman of the Board, President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Name Title Date ---- ----- ---- /s/ John J. Dooner, Jr. Chairman of the Board, March 29, 2001 ------------------------- President and Chief John J. Dooner, Jr. Executive Officer (Principal Executive Officer) /s/ Sean F. Orr Executive Vice President, March 29, 2001 ------------------------- Chief Financial Officer Sean F. Orr (Principal Financial Officer) and Director /s/ Frank J. Borelli Director March 29,2001 ------------------------- Frank J. Borelli /s/ Reginald K. Brack Director March 29, 2001 ------------------------- Reginald K. Brack /s/ Jill M. Considine Director March 29, 2001 ------------------------- Jill M. Considine /s/ James R. Heekin Director March 29, 2001 ------------------------- James R. Heekin - 17 - /s/ Frank B. Lowe Director March 29, 2001 ------------------------- Frank B. Lowe /s/ Michael A. Miles Director March 29, 2001 ------------------------- Michael A. Miles /s/ Frederick Molz Vice President and March 29, 2001 ------------------------- Controller (Principal Frederick Molz Accounting Officer) /s/ Leif H. Olsen Director March 29, 2001 ------------------------- Leif H. Olsen /s/ J. Phillip Samper Director March 29, 2001 ------------------------- J. Phillip Samper By: /s/ Nicholas J. Camera ---------------------- Nicholas J. Camera - 18 -  F-1 INDEX TO FINANCIAL STATEMENTS The Financial Statements appearing under the headings: Financial Highlights, Report of Management; Management's Discussion and Analysis of Financial Condition and Results of Operations, Consolidated Financial Statements, Notes to Consolidated Financial Statements, Report of Independent Accountants, Selected Financial Data for Five Years and Results by Quarter (Unaudited), accompanying the Annual Report to Stockholders for the year ended December 31, 2000, together with the report thereon of PricewaterhouseCoopers LLP dated February 26, 2001 are incorporated by reference in this report on Form 10-K. With the exception of the aforementioned information and the information incorporated in Items 5, 6 and 7, no other data appearing in the Annual Report to Stockholders for the year ended December 31, 2000 is deemed to be filed as part of this report on Form 10-K. The following financial sta tement schedule should be read in conjunction with the financial statements in such Annual Report to Stockholders for the year ended December 31, 2000. Financial statement schedules not included in this report on Form 10-K have been omitted because they are not applicable or the required information is shown in the financial statements or the notes thereto. Separate financial statements for the companies which are 50% or less owned and accounted for by the equity method have been omitted because, considered in the aggregate as a single subsidiary, they do not constitute a significant subsidiary. - 19 -  INDEX TO FINANCIAL STATEMENT SCHEDULE Page Report of Independent Accountants on Financial Statement Schedule F-2 Financial Statement Schedule Required to be filed by Item 8 of this form: II Valuation and Qualifying Accounts F-3 - 20 -  F-2 Report of Independent Accountants on Financial Statement Schedule To the Board of Directors and Stockholders of The Interpublic Group of Companies, Inc. Our audits of the consolidated financial statements referred to in our report dated February 26, 2001, except for Note 15 which is as of March 19, 2001, appearing in the 2000 Annual Report to Stockholders of The Interpublic Group of Companies, Inc. (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the financial statement schedule listed in Item 14(a)(2) of this Form 10-K. In our opinion, this financial statement schedule presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. PRICEWATERHOUSECOOPERS LLP -------------------------- New York, New York February 26, 2001 - 21 -  F-3 SCHEDULE II THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS For the Years Ended December 31, 2000, 1999 and 1998 ================================================================================ (Dollars in thousands) COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F -------------------------------------------------------------------------------- Additions/(Deductions) ---------------------- Charged Balance at Charged to to Other Balance Beginning Costs & Accounts- Deductions- at End Description of Period Expenses Describe Describe of Period -------------------------------------------------------------------------------- Allowance for Doubtful Accounts - deducted from Receivables in the Consolidated Balance Sheet: 2000 $60,565 $24,125 $3,630(1) $(18,717)(3) $64,923 1,503(5) (4,792)(4) (1,391)(2) 1999 $54,060 $24,013 $5,148(1) $(23,765)(3) $60,565 2,934(5) (1,215)(2) (610)(4) 1998 $44,581 $20,421 $6,699(1) $(17,038)(3) $54,060 2,111(5) (3,310)(4) 596(2) ------------------- [FN] (1) Allowance for doubtful acco unts of acquired and newly consolidated companies. (2) Foreign currency translation adjustment. (3) Principally amounts written off. (4) Reversal of previously recorded allowances on accounts receivable. (5) Miscellaneous. - 22 -  INDEX TO DOCUMENTS ------------------ Exhibit No. Description ----------- ----------- 3 (i) The Restated Certificate of Incorporation of the Registrant, as amended is incorporated by reference to its Report on Form 10-Q for the quarter ended June 30, 1999. See Commission file number 1-6686. (ii) The By-Laws of the Registrant, amended as of February 19, 1991, are incorporated by reference to its Report on Form 10 -K for the year ended December 31, 1990. See Commission file number 1-6686. 4 Instruments Defining the Rights of Security Holders. (i) Indenture, dated as of September 16, 1997 between Interpublic and The Bank of New York is incorporated by reference to the Registrant's Report on Form 10-Q for the quarter ended September 30, 1998. See Commission file number 1 -6686. (ii) The Preferred Share Purchase Rights Plan as adopted on July 18, 1989 is incorporated by reference to Registrant's Registration Statement on Form 8-A dated August 1, 1989 (No. 00017904) and, as amended, by reference to Registrant's Registration Statement on Form 8 dated October 3, 1989 (No. 00106686). 10 Material Contracts. (a) Purchase Agreement, dated September 10, 1997, among The Interpublic Group of Companies, Inc. ("Interpublic"), Morgan Stanley & Co., Incorporated, Goldman Sachs and Co. and SBC Warburg Dillon Read Inc. is incorporated by reference to the Registrant's Report on Form 10-Q for the quarter ended September 30, 1999. See Commission file number 1 -6686. (b) Employment, Consultancy and other Compensatory Arrangements with Management. Employment and Consultancy Agreements and any amendments or supplements thereto and other compensatory arrangements filed with the Registrant's Reports on Form 10-K for the years ended December 31, 1980 through December 31, 1998 inclusive, or filed with the Registrant's Reports on Form 10-Q for the periods ended March 31, 2000, June 30, 2000 and September 30, 2000 are incorporated by reference in this Report on Form 10-K. See Commission file number 1-6686. Listed below are agreements or amendments to agreements between the Registrant and its executive officers which remain in effect on and after the date hereof or were executed during the year ended December 31, 2000 and thereafter, unless previously submitted, which are filed as exhibits to this Report on Form 10-K. (i) James R. Heekin --------------- (a) Employment Agreement dated as of October 25, 1993 between Interpublic and James R. Heekin. (b) Executive Special Benefit Agreement dated as of January 1, 1994 between Interpublic and James R. Heekin. - 23 -  (c) Executive Severance Agreement dated as of January 1, 1998 between Interpublic and James R. Heekin. (d) Employment Agreement dated as of January 1, 1998 between Interpublic and James R. Heekin. (e) Executive Special Benefit Agreement dated as of February 1, 1998 between Interpublic and James R. Heekin. (f) Supplemental Agreement to an Employment Agreement dated as of March 28, 2000 between Interpublic and James R. Heekin. (g) Supplemental Agreement to an Executive Severance Agreement dated as of June 1, 2000 between Interpublic and James R. Heekin. (h) Executive Special Benefit Agreement dated as of January 1, 2000 between Interpublic and James R. Heekin. (ii) Barry R. Linsky --------------- (a) Supplemental Agreement to an Executive Special Benefit Agreement dated as of June 30, 2000 between Interpublic and Barry R. Linsky. (b) Executive Special Benefit-Income Replacement Agreement dated as of June 1, 2000 between Interpublic and Barry R. Linsky. (c) Supplemental Agreement dated as of March 26, 2001 between Interpublic and Barry R. Lin sky. (iii) C. Kent Kroeber --------------- (a) Supplemental Agreement to an Executive Special Benefit Agreement dated as of June 30, 2000 between Interpublic and C. Kent Kroeber. (b) Executive Special Benefit-Income Replacement Agreement dated as of June 1, 2000 between Interpublic and C. Kent Kroeber. (iv) Thomas J. Volpe --------------- (a) Supplemental Agreement to an Executive Special Benefit Agreement dated as of June 30, 2000 between Interpublic and Thomas J. Volpe. (b) Supplemental Agreement to an Executive Special Benefit-Income Replacement Agreement dated as of June 30, 2000 between Interpublic and Thomas J. Volpe. (c) Executive Special Benefit Agreement dated as of March 21, 2000 between Interpublic and Thomas J. Volpe. - 24 -  (d) Executive Special Benefit-Income Replacement Agreement dated as of June 1, 2000 between Interpublic and Thomas J. Volpe. (v) Bruce Nelson ------------ (a) Employment Agreement dated as of September 5, 2000 between Interpublic and Bruce Nelson. (b) Executive Special Benefit Agreement dated as of September 1, 2000 between Interpublic and Bruce Nelson. (c) Supplemental Agreement dated as of September 1, 2000 to an Executive Special Benefit Agreement dated as of January 1, 1986 between Interpublic and Bruce Nelson. (vi) Frank B. Lowe ------------- (a) Employment Agreement dated as of January 1, 2001 between Interpublic and Frank B. Lowe. (b) Supplemental Agreement to an Employment Agreement dated as of January 2, 2001 between Interpublic and Frank B. Lowe. (c) Executive Special Benefit Agreement dated as of January 15, 2001 between Interpublic and Frank B. Lowe. (c) Executive Compensation Plans. (i) Trust Agreement, dated as of June 1, 1990 between Interpublic, Lintas Campbell-Ewald Company, McCann-Erickson USA, Inc., McCann -Erickson Marketing, Inc., Lintas, Inc. and Chemical Bank, as Trustee, is incorporated by reference to Registrant' s Annual Report on Form 10-K for the year ended December 31, 1990. See Commission file number 1-6686. (ii) The Stock Option Plan (1988) and the Achievement Stock Award Plan of the Registrant are incorporated by reference to Appendices C and D of the Prospectus dated May 4, 1989 forming part of its Registration Statement on Form S-8 (No. 33-28143). (iii) The Management Incentive Compensation Plan of the Registrant is incorporated by reference to the Registrant's Report on Form 10-Q for the quarter ended June 30, 1995. See Commission file number 1-6686. (iv) The 1986 Stock Incentive Plan of the Registrant is incorporated by reference to R egistrant's Annual Report on Form 10-K for the year ended December 31, 1993. See Commission file number 1-6686. (v) The 1986 United Kingdom Stock Option Plan of the Registrant is incorporated by reference to Registrant's Annual Report on Form 10-K for the year ended December 31, 1992. See Commission file number 1-6686. (vi) The Employee Stock Purchase Plan (1985) of the Registrant, as amended, is incorporated by reference to - 25 -  Registrant's Annual Report on Form 10-K for the year ended December 31, 1993. See Commission file number 1-6686. (vii) The Long-Term Performance Incentive Plan of the Registrant is incorporated by reference to Appendix A of the Prospectus dated December 12, 1988 forming part of its Registration Statement on Form S-8 (No. 33 -25555). (viii) Resolution of the Board of Directors adopted on February 16, 1993, amending the Long-Term Performance Incentive Plan is incorporated by reference to Registrant's Annual Report on Form 10-K for the year ended December 31, 1992. See Commission file number 1-6686. (ix) Resolution of the Board of Directors adopted on May 16, 1989 amending the Long-Term Performance Incentive Plan is incorporated by reference to Registrant's Report on Form 10-K for the year ended December 31, 1989. See Commission file number 1-6686. (x) The 1996 Stock Incentive Plan of the Registrant is incorporated by reference to the Registrant's Report on Form 10-Q for the quarter ended June 30, 1996. See Commission file number 1-6686. (xi) The 1997 Performance Incentive Plan of the Registrant is incorporated by reference to the Registrant's Report on Form 10-Q for the quarter ended June 30, 1997. See Commission file number 1-6686. (d) Loan Agreements. (i) Other Loan and Guaranty Agreements filed with the Registrant's Annual Report on Form 10 -K for the years ended December 31, 1988 and December 31, 1986 are incorporated by reference in this Report on Form 10-K. Other Credit Agreements, amendments to various Credit Agreements, Supplemental Agreements, Termination Agreements, Loan Agreements, Note Purchase Agreements, Guarantees and Intercreditor Agreements filed with the Registrant's Report on Form 10-K for the years ended December 31, 1989 through December 31, 1999, inclusive and filed with Registrant's Reports on Form 10 -Q for the periods ended March 31, 2000, June 30, 2000 and September 30, 2000 are incorporated by reference into this Report on Form 10-K. See Commission file number 1-6686. (e) Leases. Material leases of premises are incorporated by reference to the Registrant's Annual Report on Form 10-K for the years ended December 31, 1980 and December 31, 1988. See Commission file number 1 -6686. (f) Acquisition Agreement for Purchase of Real Estate. Acquisition Agreement (in German) between Treuhandelsgesellschaft Aktiengesellschaft & Co. Grundbesitz OHG and McCann-Erickson Deutschland GmbH & Co. Management Property KG ("McCann-Erickson Deutschland") and the English translation of the Acquisition Agreement are incorporated by reference to Registrant's Annual Report on Form 10-K for the year ended December 31, 1992. See Commission file number 1-6686. - 26 -  (g) Mortgage Agreements and Encumbrances. (i) Summaries in German and English of Mortgage Agreements between McCann -Erickson Deutschland and Frankfurter Hypothekenbank Aktiengesellschaft ("Frankfurter Hypothekenbank"), Mortgage Agreement, dated January 22, 1993, between McCann-Erickson Deutschland and Frankfurter Hypothekenbank, Mortgage Agreement, dated January 22, 1993, between McCann-Erickson Deutschland and Hypothekenbank are incorporated by reference to Registrant's Annual Report on Form 10-K for the year ended December 31, 1993. See Commission file number 1-6686. Summaries in German and English of Mortgage Agreement, between McCann-Erickson Deutschland and Frankfurter Sparkasse and Mortgage Agreement, dated January 7, 1993, between McCann-Erickson Deutschland and Frankfurter Sparkasse are incorporated by reference to Registrant's Annual Report on Form 10-K for the year ended December 31, 1992. See Commission file number 1-6686. (ii) Summaries in German and English of Documents creating Encumbrances in favor of Frankfurter Hypothekenbank and Frankfurter Sparkasse in connection with the aforementioned Mortgage Agreements, Encumbrance, dated January 15, 1993, in favor of Frankfurter Hypothekenbank, and Encumbrance, dated January 15, 1993, in favor of Frankfurter Sparkasse are incorporated by reference to Registrant's Annual Report on Form 10-K for the year ended December 31, 1992. See Commission file number 1-6686. (iii) Loan Agreement (in English and German), dated January 29, 1993 between Lintas Deutschland GmbH and McCann-Erickson Deutschland is incorporated by reference to Registrant's Annual Report on Form 10-K for the year ended December 31, 1992. See Commission file number 1-6686. 11 Computation of Earnings Per Share. 13 This Exhibit includes: (a) those portions of the Annual Report to Stockholders for the year ended December 31, 2000 which are included therein under the following headings: Financial Highlights; Report of Management; Management's Discussion and Analysis of Financial Condition and Results of Operations; Consolidated Balance Sheet; Consolidated Statement of Income; Consolidated Statement of Cash Flows; Consolidated Statement of Stockholders' Equity and Comprehensive Income; Notes to Consolidated Financial Statements (the aforementioned Consolidated Financial Statements together with the Notes to Consolidated Financial Statements hereinafter shall be referred to as the "Consolidated Financial Statements"); Report of Independent Accountants; Selected Financial Data for Five Years; Results by Quarter (Unaudited); and Stockholders Information. 21 Subsidiaries of the Registrant. 23 Consent of Independent Accountants: PricewaterhouseCoopers LLP Consent of Independent Public Accountants: J.H. Cohn LLP Consent of Independent Accountants: Arthur Andersen LLP 24 Power of Attorney to sign Form 10-K and resolution of Board of Directors re Power of Attorney. 99 The Company filed the following reports on Form 8-K during the quarter ended December 31, 2000: - 27 -  (i) Senior Debt Indenture dated as of October 20, 2000, by The Interpublic Group of Companies, Inc. and The Bank of New York, Trustee, relating to the 7.875% Notes due 2005 is incorporated by reference to Exhibit 99.1 of the Registrant's Form 8 -K dated October 24, 2000. (ii) Underwriting Agreement dated as of October 17, 2000, relating to the 7.875% Notes due 2005 is incorporated by reference to Exhibit 99.2 of the Registrant's Form 8 -K dated October 24, 2000. - 28 - Exhibit 10(b)(i)(a) EMPLOYMENT AGREEMENT -------------------- AGREEMENT made as of October 25, 1993 by and between THE INTERPUBLIC GROUP OF COMPANIES, INC., a corporation of the State of Delaware (hereinafter referred to as "Interpublic" or the "Corporation"), and JAMES R. HEEKIN (hereinafter referred to as "Executive"). In consideration of the mutual promises set forth herein the parties hereto agree as follows: ARTICLE I --------- Term of Employment ------------------ 1.01 Upon the terms and subject to the conditions set forth herein, Interpublic or one of its subsidiaries will employ Executive for the period beginning October 25, 1993 and ending on October 25, 1998, or on such earlier date as the employment of Executive shall terminate pursuant to Article IV or Article V. (The period during which Executive is employed hereunder is referred to herein as the "term of employment" and Interpublic or whichever of the aforementioned subsidiaries shall form time to time employ Executive pursuant to this Agreement is referred to herein as the "Corporation"). Executive will serve the Corporation during the term of employment. ARTICLE II ---------- Duties ------ 2.01 During the term of employment, Executive will in the course of performing his duties hereunder: (i) use his best efforts to promote the interests of the Corporation and devote his full time and efforts to its business and affairs; (ii) perform such duties as the Corporation may from time to time assign to him consistent with his position and title of President of McCann-Erickson North America. 2.02 Executive shall report only to John Dooner or the then-current Chief Executive Officer of McCann-Erickson Worldwide, and the respective managements of the offices and operations constituting McCann -Erickson North America shall report only to Executive. 2.03 During t he term of employment, unless otherwise agreed to by Executive, Executive shall be based in the Corporation's New York office, subject to the travel requirements of the position and duties hereunder. ARTICLE III ----------- Compensation ------------ 3.01 The Corporation will compensate Executive for the duties performed by him hereunder, including all services rendered as an officer or director of the Corporation, by payment of a salary at the initial rate of $400,000 per annum, which salary shall be payable in equal installments, which the Corporation may pay at either monthly or semi-monthly intervals. In - 29 - addition, he will receive the compensation described in Article VII, subject to conditions set forth therein. 3.02 The Corporation may, in addition, at any time increase the compensation paid to Executive hereunder if the Corporation in its discretion shall deem it advisable so to do in order to compensate him fairly for services rendered to the Corporation. ARTICLE IV --------- Termination ----------- 4.01 Interpublic may terminate the employment of Executive hereunder: (i) by giving Executive notice in writing within the first twenty-four months after his employment commences hereunder, in which event his employment shall terminate on the date specified in such notice. In this event the Corporation will pay Exe cutive an amount equal to the amount by which twenty-four months salary at his then current rate exceeds the salary paid to him from the date his employment commenced until the termination date, plus an amount equal to twelve months salary, such payment to be made during the period immediately following the termination date specified in such notice, payable in successive equal monthly installments, each of which shall be equal to one month's salary at the rate in effect at the time of such termination. (ii) by giving Executive notice in writing at any time specifying a termination date not less than twelve (12) months after the date on which such notice is given, if given subsequent to the commencement of the twenty-fifth month of employment hereunder, in which event his employment hereunder shall terminate on the date specified in such notice, or (iii) by giving him notice in writing at any time specifying a termination date less than twelve months after the date on which such notice is given if such notice is given subsequent to the commencement of the twenty-fifth month of employment hereunder. In this event his employment hereunder shall terminate on the date specified in such notice and the Corporation shall thereafter pay him a sum equal to the amount by which twelve months salary at his then current rate exceeds the salary paid to him for the period from the date on which such notice is given to the termination date specified in such notice. Such payment shall be made during the period immediately following the termination date specified in such notice, in successive equal monthly installments each of which shall be equal to one month's salary at the rate in effect at the time of such termination, with any residue in respect of a period less than one month to be paid together with the last installment. 4.02 Executive may at any time give notice in writing to the Interpub lic specifying a termination date not less than one hundred twenty (120) days after the date on which such notice is given, in which event his employment hereunder shall terminate on the date specified in such notice. 4.03 Executive may at any time give notice in writing to Interpublic specifying a termination date not less than one hundred twenty (120) days after the date on which such notice is given, in which event his employment hereunder shall terminate on the date specified in such notice. 4.04 If Executive dies before October 24, 1998, his employment hereunder shall terminate on the date of his death. - 30 -  ARTICLE V --------- Covenants --------- 5.01 While Executive is employed hereunder by the Corporation he shall not, without the prior written consent of the Corporation engage, directly or indirectly, in any other trade, business or employment, or have any interest, direct or indirect, in any other business, firm or corporation; provided, however, that he may continue to own or may hereafter acquire any securities of any class of any publicly-owned company or any company not engaged in the advertising business, and he may engage in public speaking, writing, educational, charitable and other similar endeavors, as to which endeavors Executive agrees to keep Corporation generally apprised. 5.02 Executive shall use his best efforts to treat as confidential and keep secret the affairs of the Corporation and shall not at any time during the term of employment or thereafter, without the prior written consent of the Corporation, divulge, furnish or make known or accessible to, or use for the benefit of, anyone other than the Corporation and its subsidiaries and affiliates any information of a confidential nature relating in any way to the business of the Corporation or its subsidiaries or affiliates or their clients and obtained by him in the course of his employment hereunder. For purposes herein, confidential information includes, but is not limited to, trade secrets, budgetary information, and client or Interpublic and Corporation strategic and business plans. 5.03 If Executive materially breaches the provisions of Section 5.02, Interpublic may, notwithstanding the provisions of Section 4.01, terminate the employment of Executive at any time by giving him notice in writing specifying a termination date. In such event, his employment hereunder shall terminate on the date specifie d in such notice. If Executive violates the provisions of Section 5.01, Interpublic may give him notice specifying the nature of the violation and giving Executive thirty days in which to cure his performance. In the event of a continuing violation after such notice and cure period, Executive's employment hereunder shall terminate on the date specified in such notice. 5.04 All records, papers and documents kept or made by Executive relating to the business of the Corporation or its subsidiaries or affiliates or their clients shall be and remain the property of the Corporation. 5.05 All articles invented by Executive, processes discovered by him, trademarks, designs, advertising copy and art work, display and prom otion materials and, in general, everything of value conceived or created by him pertaining to the business of the Corporation or any of its subsidiaries or affiliates during the term of employment, and any and all rights of every nature whatever thereto, shall immediately become the property of the Corporation, and Executive will assign, transfer and deliver all patents, copyrights, royalties, designs and copy, and any and all interests and rights whatever thereto and thereunder to the Corporation, without further compensation, upon notice to him from the Corporation. 5.06 Following the termination of Executive's employment hereunder for any reason, Executive shall not for a period of twenty-four (24) months from such termination, if such termination occurs during the first two years of employment hereunder, or for a period of twelve months is such termination occurs subsequent to the first two years employment, either (a) solicit any employee of the Corporation to leave such employ to enter the employ of Executive or of any corporation or enterprise with which Executive is then associated or (b) solicit or handle on Executive's own behalf or on behalf of any other person, firm or corporation, the advertising, public relations, sales promotion or market research business of any advertiser which is a client of the Corporation at the time of such termination and as to which brand Executive devoted services. - 31 -  ARTICLE VI ---------- Assignment ---------- 6.01 This Agreement shall be binding upon and enure to the benefit of the successors and assigns of Interpublic, subject to Section 4.04 hereof. Neither this Agreement nor any rights hereunder shall be assignable by Executive and any such purported assignment by him shall be void. ARTICLE VII ----------- Additional Compensation ------------------- 7.01 Within 30 days of Executive's commencing employment pursuant to this Agreement, the Corporation will pay Executive a sign-up bonus of $100,000. 7.02 Executive will be eligible during the term of employment, to participate in the Management Incentive Compensation Plan ("MICP"), and to receive an an nual bonus in an amount up to 50% of Executive's annual salary, inclusive of any amount deferred pursuant to Section 7.03 below, subject to all of the terms and conditions of the Plan. However, any awards pursuant to the MICP, if any, shall be determined by the Corporation and shall be based on the profits of McCann-Erickson Worldwide, Executive's individual performance and management discretion. Notwithstanding the foregoing and subject to full execution of this Agreement, the Co rporation agrees to award a bonus to Executive for the calendar year 1993 of at lest $100,000, subject to deduction of any applicable withholding taxes, and to pay such bonus by or before February 28, 1994. Also, subject to full execution of this Agreement, the Corporation agrees to award a bonus to Executive for the calendar year 1994 of at least $200,000, subject to deduction of any applicable withholding taxes, and to pay such bonus in February 1995. The guaranteed portions of Executive's 1993 and 1994 bonuses referred to in this Section 7.02 will be paid to Executive whether or not he is in the employ of the Corporation on the payment dates for such bonuses. 7.03 Interpublic will enter into an Executive Special Benefit Agreement ("ESBA") with Executive consistent with the terms as provided by the Corporation to Executive in writing. Should Executive elect not to enter into the ESBA, the deferred amount shall be added to his annual salary. 7.04 As soon as administratively feasible after execution of this Agreement, Interpublic will use its best efforts to have the Compensation Committee of the Board of Directors (the "Committee") grant Executive a pro rata award for the 1991-1994 performance period and a full award for the 1993 -1996 performance period under the Interpublic Long-Term Performance Incentive Plan ("LTPIP"). With respect to the 1991-1994 performance period, an award equal to 1,500 perfor mance units tied to the cumulative compound profit growth of McCann-Erickson North America will be recommended, with a minimum guaranteed value at the end of the performance period of $100,000. With respect to the 1993-1996 performance period, the Corporation will recommend to the Committee an award of 2,025 performance units, tied to the cumulative profit growth of McCann-Erickson North America over the four -year period. In addition, options covering 8,100 shares of Common Stock w ill be issued to Executive under the 1986 Stock Incentive Plan no later than November 1, 1993. These options will be 100% exercisable as of January 1 1997. The payment of benefits under the LTPIP and the terms of options under the 1986 Stock Incentive Plan will be subject to all of the terms and conditions of those plans. 7.05 Interpublic will also use its best efforts to have the Committee grant to Executive no later than November 1, 1993, subject to all of the terms and conditions of the 1986 Stock Incentive Plan, an award of 11,500 restricted shares of Interpublic Common Stock of which 2,500 shares shall be restricted for one year from the date of grant, 4,500 shares shall have a restriction period - 32 - ending three years form the date of grant and 4,500 shares shall have a restriction period ending five years from the date of grant. If the market value of the 4,500 shares having the three year restriction period is less than $125,000 on the date on which the restrictions lapse, Interpublic will pay Executive such additional amount in cash that is necessary to ensure that the cash payment together with the value of the shares on the date of lapse (based on the closing price of the common stock on The New York St ock Exchange) shall equal $125,000. 7.06 Interpublic will use its best efforts to have the Committee grant to Executive no later than November 1, 1993 options to purchase an additional 12,000 shares of Interpublic Common Stock which will be subject to all of the terms and conditions of the 1986 Stock Incentive Plan. Forty percent of these options will be exercisable after a three-year holding period, thirty percent will be exercisable after a four -year holding period and the balance will be exercisable after a five -year holding period. The grant of these options shall be at 85% of the market value of Interpublic common stock on the date the grant is approved by the Committee. 7.07 Interpublic agrees to have its Management Human Resources Committee elect Executive to membership in the Development Council and Executive shall receive, at a minimum, all fringe benefits, vacation and perquisites given to Executive, employees of Interpublic or the Corporation holding a similar title and position. Executive will also have an annual automobile allowance of $7,000 and the Corporation shall pay for garage parking in proximity to his office. 7.08 The Corporation will also pay or reimburse Executive for the cost of club membership in the amount of $10,000 per annum. 7.09 Should the Committee fail to make any or all of the awards referred to in Sections 7.04, 7.05 and 7.06, the Corporation will take whatever action is n ecessary to grant Executive compensation or other benefits of equivalent value, subject to Executive's approval, which will not unreasonably withheld. ARTICLE VIII ------------ Agreement Entire ---------------- 8.01 This Agreement constitutes the entire understanding between Interpublic and Executive concerning his employment by Interpublic's aforementioned subsidiaries and supersedes any and all previous agreements between Executive and Interpublic or any of its subsidiaries concerning such employment. T his Agreement may not be changed orally. - 33 -  ARTICLE IX ----------- Applicable Law -------------- 9.01 The Agreement shall be governed by and construed in accordance with the laws of the State of New York. THE INTERPUBLIC GROUP OF COMPANIES, INC. By: /s/ C. Kent Kroeber ------------------------------------- Name: C. Kent Kroeber Title: By: /s/ JAMES R. HEEKIN ------------------------------------- Name: JAMES R. HEEKIN Title: - 34 - Exhibit 10(b)(i)(b) EXECUTIVE SPECIAL BENEFIT AGREEMENT ----------------------------------- AGREEMENT made as of January 1, 1994 by and between THE INTERPUBLIC GROUP OF COMPANIES, INC ., a corporation of the State of Delaware (hereinafter referred to as "Interpublic") and JAMES R. HEEKIN (hereinafter referred to as "Executive"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, Executive is in the employ of Interpublic and/or one or more of its subsidiaries (Interpublic and its subsidiaries being hereinafter referred to collectively as the "Corporation"); and WHEREAS, Interpublic and Executive desire to enter into an Executive Special Benefit Agreement which shall be supplementary to any employment agreement or arrangement which Executive now or hereinafter may have with respect to Executive's employment by Interpublic or any of its subsidiaries; NOW, THEREFORE, in consideration of the mutual promises herein set forth, the parties hereto, intending to be legally bound, agree as follows: ARTICLE I --------- Death and Special Retirement Benefits -------------------------------------- 1.01 For purposes of this Agreement the "Accrual Term" shall mean the period of seventy-two months beginning on the date of this Agreement and ending on the day preceding the sixth anniversary hereof or on such earlier date on which Executive shall cease to be in the employ of the Corporation. 1.02 The Corporation shall provide Executive with the following benefits contingent upon Executive's compliance with all the terms and conditions of this Agreement and Executive's satisfactory completion of a physical examinat ion in connection with an insurance policy on the life of Executive which Interpublic or its assignee (other than Executive) proposes to obtain and own. Effective at the end of the Accrual Term, Executive's annual compensation will be increased by $25,000 if Executive is in the employ of the Corporation at that time. 1.03 If, during the Accrual Term or thereafter during a period of employment by the Corporation which is continuous from the date of this Agreement, Executive shall die while in the employ of the Corporation, the Corporation shall pay to such beneficiary or beneficiaries as Executive shall have designated pursuant to Section 1.07 (or in the absence of such designation, shall pay to the Executor of the Will or the Administrator of the Estate of Executive) survivor income payments of Eighty Two Thousand Five Hundred Dollars ($82,500) per annum for fifteen years following Executive's death, such payments to be made on January 15 of each of the fifteen years beginning with the year following the year in which Executive dies. 1.04 If, after a continuous period of employment from the date of this Agreement, Executive shall retire from the employ of the Corporation so that the first day on which Executive is no longer in the employ of the Corporation occurs on or after Executive's sixtieth birthday, the Corporation shall pay to Executive special retirement benefits at the rate of Eighty-Two Thousand Five Hundred Dollars ($82,500) per annum for fifteen years beginning with the calendar month following Executive's last day of employment, such payments to be made in equal monthly installments. - 35 -  1.05 If, after a continuous period of employment from the date of this Agreement, Executive shall retire, resign, or be terminated from the employ of the Corporation so that the first day on which Executive is no longer in the employ of the Corporation occurs on or after Executive's fifty -fifth birthday but prior to Executive's sixtieth birthday, the Corporation shall pay to Executive special retirement benefits at the annual rates set forth below for fifteen years beginning with the calendar month following Executive's last day of employment, such payments to be made in equal monthly installments: Last Day of Employment Annual Rate On or after 55th birthday but prior to 56th birthday $ 57,750 On or after 56th birthday but prior to 57th birthday $ 62,700 On or after 57th birthday but prior to 58th birthday $ 67,650 On or after 58th birthday but prior to 59th birthday $ 72,600 On or after 59th birthday but prior to 60th birthday $ 77,550 1.06 If, following such termination of employment, Executive shall die before payment of all of the installments provided for in Section 1.04 or Section 1.05, any remaining installments s hall be paid to such beneficiary or beneficiaries as Executive shall have designated pursuant to Section 1.07 or, in the absence of such designation, to the Executor of the Will or the Administrator of the Estate of Executive. 1.07 For purposes of Sections 1.03, 1.04 and 1.05, or any of them, Executive may at any time designate a beneficiary or beneficiaries by filing with the chief personnel officer of Interpublic a Beneficiary Designation Form provided by such officer. Executive may at any time, by filing a new Beneficiary Designation Form, revoke or change any prior designation of beneficiary. 1.08 If Executive shall die while in the employ of the Corporation, no sum shall be payable pursuant to Sections 1.04, 1.05, 1.06, 2.01, 2.02 or 2.03. 1.09 In connection with the life insurance policy referred to in Section 1.02, Interpublic has relied on written representations made by Executive concerning Executive's age and the state of Executive's health. If said representations are untrue in any material respect, whether directly or by omission, and if the Corporation is damaged by any such untrue representations, no sum shall be payable pursuant to Sections 1.03, 1.04, 1.05, 1.06, 2.01, 2.02 or 2.03. 1.10 It is expressly agreed that Interpublic or its assignee (other than Executive) shall at all times be the sole and complete owner and beneficiary of the life insurance policy referred to in Sections 1.02 and 1.09, shall have the unrestricted right to use all amounts and exercise all options and privileges thereunder without the knowledge or consent of Executive or Executive's designated beneficiary or any other person and that neither Executive nor Executive's designated beneficiary nor any other person shall have any right, title or interest, legal or equitable, whatsoever in or to such policy. ARTICLE II ---------- Alternative Deferred Compensation --------------------------------- 2.01 If Executive shall, for any reason other than death, cease to be employed by the Corporation on a date prior to Executive's fifty -fifth birthday, the Corporation shall, in lieu of any payment pursuant to Article I of this Agreement, compensate Executive by payment, at the times and in t he manner specified in Section 2.02, of a sum computed at the rate of Twenty Fivey Thousand Dollars ($25,000) per annum for each full year and proportionate amount for any part year from the date of this Agreement to the date of such termination during which Executive is in the employ of the Corporation with a maximum payment of One Hundred Fifty Thousand dollars ($150,000). Such payment - 36 - shall be conditional upon Executive's compliance with all the terms and conditions of this Agreement. 2.02 The aggregate compensation payable under Section 2.01 shall be paid in equal consecutive monthly installments commencing with the first month in which Executive is no longer in the employ of the Corporation and continuing for a number of months equal to the number of months which have elapsed from the date of this Agreement to the commencement date of such payments, up to a maximum of 72 months. 2.03 If Executive dies while receiving payments in accordance with the provisions of Section 2.02, any installments payable in accordance with the provisions of Section 2.02 less any amounts previously paid Executive in accordance therewith, shall be paid to the Executor of the Will or the Administrator of the Estate of Executive. 2.04 It is understood that none of the payments made in accordance with this Agreement shall be considered for purposes of determining benefits under the Interpublic Pension Plan, nor shall such sums be entitled to credits equivalent to interest under the Plan for Credits Equivalent to Interest on Balances of Deferred Compensation Owing under Employment Agreements adopted effective as of January 1, 1974 by Interpublic. ARTICLE III ---------- Non-solicitation of Clients or Employees ----------------------------------------- 3.01 Following the termination of Executive's employment hereunder for any reason, Executive shall not for a period of twenty-four months from such termination, if such termination occurs during the first two years of employment hereunder, or for a period of twelve months if such termination occurs subsequent to the first two years of employment, either (a) solicit any employee of the Corpo ration to leave such employ to enter the employ of Executive or of any corporation or enterprise with which Executive is then associated or (b) solicit or handle on Executive's own behalf or on behalf of any other person, firm or corporation, the advertising, public relations, sales promotion or market research business of any advertiser which is a client of the Corporation at the time of such termination and as to which brand Executive devoted services. ARTICLE IV ---------- Assignment ----------- 4.01 This Agreement shall be binding upon and inure to the benefit of the successors and assigns of Interpublic. Neither this Agreement nor any rights hereunder shall be subject in any matter to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge by Executive, and any such attempted action by Executive shall be void. This Agreement may not be changed orally, nor may this Agreement be amended to increase the amount of any benefits that are payable pursuant to this Agreement or to accelerate the payment of any such benefits. - 37 -  ARTICLE V ---------- Contractual Nature of Obligation -------------------------------- 5.01 The liabilities of the Corporation to Executive pursuant to this Agreement shall be those of a debtor pursuant to such contractual obligations as are created by the Agreement. Executive's rights with respect to any benefit to which Executi ve has become entitled under this Agreement, but which Executive has not yet received, shall be solely the rights of a general unsecured creditor of the Corporation. ARTICLE VI ---------- Applicable Law --------------- 6.01 This Agreement shall be governed by and construed in accordance with the laws of the State of New York. THE INTERPUBLIC GROUP OF COMPANIES, INC. By: /s/ C. KENT KROEBER ------------------------------------- C. KENT KROEBER By: /s/ JAMES R. HEEKIN, III ------------------------------------- JAMES R. HEEKIN, III - 38 - Exhibit 10(b)(i)(c) EXECUTIVE SEVERANCE AGREEMENT ------------------------ This AGREEMENT ("Agreement") dated January 1, 1998 by and between The Interpublic Group of Companies, Inc. ("Interpublic"), a Delaware corporation (Interpublic and its subsidiaries being referred to herein collectively as the "Company"), and JAMES R. HEEKIN (the "Executive"). W I T N E S S E T H WHEREAS, the Company recognizes the valuable services that the Executive has rendered thereto and desires to be assured that the Executive will continue to attend to the business and affairs of the Company without regard to any potential or actual change of control of Interpublic; WHEREAS, the Executive is willing to continue to serve the Company but desires assurance that he will not be materially disadvantaged by a change of control of Interpublic; and WHEREAS, the Company is willing to accord such assurance provided that, should the Executive's employment be terminated consequent to a change of control, he will not for a period thereafter engage in certain activities that could be detrimental to the Company; NOW, THEREFORE, in consideration of the Executive's continued service to the Company and the mutual agreements herein contained, Interpublic and the Executive hereby agree as follows: ARTICLE I RIGHT TO PAYMENTS ----------------- Section 1.1. TRIGGERING EVENTS. If Interpublic undergoes a Change of Control, the Company shall make payments to the Executive as provided in article II of this Agreement. If, within two years following a Change of Control, either (a) the Company terminates the Executive other than by means of a termination for Cause or for death or (b) the Executive resigns for a Good Reason (either of which events shall constitute a "Qualifying Termination"), the Company shall make payments to the Executive as provided in article III hereof. Section 1.2. CHANGE OF CONTROL. A Change of Control of Interpublic shall be deemed to have occurred if (a) any person (within the meaning of Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the "1934 Act")), other than Interpublic or any of its majority -controlled subsidiaries, becomes the beneficial owner (within the meaning of Rule 13d-3 under the 1934 Act) of 30 percent or more of the combined voting power of Interpublic's then outstanding v oting securities; (b) a tender offer or exchange offer (other than an offer by Interpublic or a majority-controlled subsidiary), pursuant to which 30 percent or more of the combined voting power of Interpublic's then outstanding voting securities was purchased, expires; (c) the stockholders of Interpublic approve an agreement to merge or consolidate with another corporation (other than a majority -controlled subsidiary of Interpublic) unless Interpublic's shareholders immediately before the merger or consolidation are to own more than 70 percent of the combined voting power of the resulting entity's voting securities; (d) Interpublic's stockholders approve an agreement (including, without limitation, a plan of liquidation) to sell or otherwise dispose of all or substantially all of the business or assets of Interpublic; or (e) during any period of two consecutive years, individuals who, at the beginning of such period, constituted the Board of Directors of Interpublic - 39 - cease for any reason to constitute at least a majority thereof, unless the election or the nomination for election by Interpublic's stockholders of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period. However, no Change of Control shall be deemed to have occurred by reason of any transaction in which the Executive, or a group of persons or entities with which the Executive acts in concert, acquires, directly or indirectly, more than 30 percent of the common stock or the business or assets of Interpublic. Section 1.3. TERMINATION FOR CAUSE. Interpublic shall have Cause to terminate the Executive for purposes of Section 1.1 of this Agreement only if, following the Change of Control, the Executive (a) engages in conduct that constitutes a felony under the laws of the United States or a state or country in which he works or resides and that results or was intended to result, directly or indirectly, in the personal enrichment of the Executive at the Company's expense; (b) refuses (except by reason of incapacity due to illness or injury) to ma ke a good faith effort to substantially perform his duties with the Company on a full-time basis and continues such refusal for 15 days following receipt of notice from the Company that his effort is deficient; or (c) deliberately and materially breaches any agreement between himself and the Company and fails to remedy that breach within 30 days following notification thereof by the Company. If the Company has Cause to terminate the Executive, it may in fact terminate him for Cause for purposes of section 1.1 hereof if (a) it notifies the Executive of such Cause, (b) it gives him reasonable opportunity to appear before a majority of Interpublic's Board of Directors to respond to the notice of Cause and (c) a majority of the Board of Directors subsequently votes to terminate him. Section 1.4. RESIGNATION FOR GOOD REASON. The Executive shall have a Good Reason for resigning only if (a) the Company fails to elect the Executive to, or removes him from, any office of the Company, including without limitation membership on any Board of Directors, that the Executive held immediately prior to the Change of Control; (b) the Company reduces the Executive's rate of regular cash and fully vested deferred base com pensation ("Regular Compensation") from that which he earned immediately prior to the Change of Control or fails to increase it within 12 months following the Change of Control by (in addition to any increase pursuant to section 2.2 hereof) at least the average of the rates of increase in his Regular Compensation during the four consecutive 12-month periods immediately prior to the Change of Control (or, if fewer, the number of 12-month periods immediately prior to the Change of Control during which the Executive was continuously employed by the Company); (c) the Company fails to provide the Executive with fringe benefits and/or bonus plans, such as stock option, stock purchase, restricted stock, life insurance, health, accident, disability, incentive, bonus, pension and profit sharing plans ("Benefit or Bonus Plans"), that, in the aggregate, (except insofar as the Executive has waived his rights thereunder pursuant to article II hereof) are as valuable to him as those that he enjoyed immediately prior to the Change of Control; (d) the Company fails to provide the Executive with an annual number of paid vacation days at least equal to that to which he was entitled immediately prior to the Change of Control; (e) the Company breaches any agreement between it and the Executive (including this Agreement); (f) without limitation of the foregoing clause (e), the Company fails to obtain the express assumption of this Agreement by any successor of the Compa ny as provided in section 6.3 hereof; (g) the Company attempts to terminate the Executive for Cause without complying with the provisions of section 1.3 hereof; (h) the Company requires the Executive, without his express written consent, to be based in an office outside of the office in which Executive is based on the date hereof or to travel substantially more extensively than he did prior to the Change of Control; or (i) the Executive determines in good faith that the Company has, without his consent, effected a significant change in his status within, or the nature or scope of his duties or responsibilities with, the Company that obtained immediately prior to the Change of Control (including but not limited to, subjecting the Executive's activities and exercise of authority to greater immediate supervision than existed prior to the Change of Control); PROVIDED, HOWEVER, that no event designated in clauses (a) through (i) of this sentence shall constitute a Good Reason unless the Executive notifies - 40 - Interpublic that the Company has committed an action or inaction specified in clauses (a) through (i) (a "Covered Action") and the Company does not cure such Covered Action within 30 days after such notice, at which time such Good Reason shall be deemed to have arisen. Notwithstanding the immediately preceding sentence, no action by the Company shall give rise to a Good Reason if it results from the Executive's termination for Cause or death or from the Executive's resignation for other than a Good Reason, and no action by the Company specified in clauses (a) through (i) of the preceding sentence shall give rise to a Good Reason if it results from the Executive's Disability. If the Executive has a Good Reason to resign, he may in fact resign for a Good Reason for purposes of section 1.1 of this Agreement by, within 30 days after the Good Reason arises, giving Interpublic a minimum of 30 and a maximum of 90 days advance notice of the date of his resignation. Section 1.5. DISABILITY. For all purposes of this Agreement, the term "Disability" shall have the same meaning as that term has in the Interpublic Long-Term Disability Plan. ARTICLE II PAYMENTS UPON A CHANGE OF CONTROL --------------------------------- Section 2.1. ELECTIONS BY THE EXECUTIVE. If the Executive so elects prior to a Change of Control, the Company shall pay him, within 30 days following the Change of Control, cash amounts in respect of certain Benefit or Bonus Plans or deferred compensation arrangements designated in sections 2.2 through 2.4 hereof ("Plan Amounts"). The Executive may make an election with respect to the Benefit or Bonus Plans or deferred compensation arrangements covered under any one or more of sections 2.2 through 2.4, but an election with respect to any such section shall apply to all Plan Amounts that are specified therein. Each election shall be made by notice to Interpublic on a form satisfactory to Interpublic and, once made, may be revoked by such notice on such form at any time prior to a Change of Control. If the Executive elects to receive payments under a section of this article II, he shall, upon receipt of such payments, execute a waiver, on a form satisfactory to Interpublic, of such rights as are indicated in that section. If the Executive does not make an election under this article with respect to a Benefit or Bonus Plan or deferred compensation arrangement, his rights to receive payments in respect thereof shall be governed by the Plan or arrangement itself. Section 2.2. ESBA. The Plan Amount in respect of all Executive Special Benefit Agreements ("ESBA's") between the Executive and Interpublic shall consist of an amount equal to the present discounted values, using the Discount Rate designated in section 5.8 hereof as of the date of the Change of Control, of all payments that the Executive would have been entitled to receive under the ESBA's if he had terminated employment with the Company on the day immediately prior to the Change of Control. Upon receipt of the Plan Amount in respect of the ESBA's, the Executive shall waive any rights that he may have to payments under the ESBA's. If the Executive makes an election pursuant to, and executes the waiver required under, this section 2.2, his Regular Compensation shall be increased as of the date of the Change of Control at an annual rate equal to the sum of the annual rates of deferred compensation in lieu of which benefits are provided the Executive under any ESBA the Accrual Term for which (as defined in the ESBA) includes the date of the Change of Control. Section 2.3. MICP. The Plan Amount in respect of the Company's Management Incentive Compensation Plans ("MICP") and/or the 1997 Performance Incentive Plan ("1997 PIP") shall consist of an amount equal to the sum of all amounts awarded to the Executive under, but deferred pursuant to, the MICP and/or the 1997 PIP as of the date of the Change of Control and all amounts equivalent to interest creditable thereon up to the date that the Plan Amount is paid. Upon receipt of that Plan Amount, the Executive shall waive his rights to receive any a mounts under the MICP and/or the 1997 PIP that were deferred prior to the Change of Control and any interest equivalents thereon. - 41 -  Section 2.4. DEFERRED COMPENSATION. The Plan Amount in respect of deferred compensation (other than amounts referred to in other sections of this article II) shall be an amount equal to all compensation from the Company that the Executive has earned and agreed to defer (other than through the Interpublic Savings Plan pursuant to Section 401(k) of the Internal Revenue Code (the "Code")) but has not received as of the date of the Change of Control, together with all amounts equivalent to interest creditable thereon through the date that the Plan Amount is paid. Upon receipt of this Plan Amount, the Executive shall waive his rights to receive any deferred compensation that he earned prior to the date of the Change of Control and any interest equivalents thereon. Section 2.5. STOCK INCENTIVE PLANS. The effect of a Change of Control on the rights of the Executive with respect to options and restricted shares awarded to him under the Interpublic 1986 Stock Incentive Plan, the 1996 Stock Incentive Plan and the 1997 Performance Incentive Plan, shall be governed by those Plans and not by this Agreement. ARTICLE III PAYMENTS UPON QUALIFYING TERMINATION ------------------------------------ Section 3.1. BASIC SEVERANCE PAYMENT. In the event that the Executive is subjected to a Qualifying Termination within two years after a Change of Control, the Company shall pay the Executive within 30 days after the effective date of his Qualifying Termination (his "Termination Date") a cash amount equal to his Base Amount times the number designated in Section 5.9 of this Agreement (the "Designated Number"). The Executive's Base Amount shall equal the average of the Executive's Includable Compensation for the two whole calendar years immediately preceding the date of the Change of Control (or, if the Executive was employed by the Company for only one of those years, his Includable Compensation for that year). The Executive's Includable Compensation for a calendar year shall consist of (a) the compensation reported by the Company on the Form W-2 that it filed with the Internal Revenue Service for that year in respect of the Executive or which would have been reported on such form but for the fact that Executive's services wer e performed outside of the United States, plus (b) any compensation payable to the Executive during that year the receipt of which was deferred at the Executive's election or by employment agreement to a subsequent year, minus (c) any amounts included on the Form W-2 (or which would have been included if Executive had been employed in the United States) that represented either (i) amounts in respect of a stock option or restricted stock plan of the Company or (ii) payments during the year of amounts payable in prior years but deferred at the Executive's election or by employment agreement to a subsequent year. The compensation referred to in clause (b) of the immediately preceding sentence shall include, without limitation, amounts initially payable to the Executive under the MICP or a Long-Term Performance Incentive Plan or the 1997 PIP in that year but deferred to a subsequent year, the amount of deferred compensation for the year in lieu of which benefits are provided the Executive under an ESBA and amounts of Regular Compensation earned by the Executive during the year but deferred to a subsequent year (including amounts deferred under Interpublic Savings Plan pursuant to Section 401(k) of the Code); clause (c) of such sentence shall include, without limitation, all amounts equivalent to interest paid in respect of deferred amounts and all amounts of Regular Compensation paid during the year but earned in a prior year and deferred. Section 3.2. MICP SUPPLEMENT. The Company shall also pay the Executive within 30 days after his Termination Date a cash amount equal to (a) in the event that the Executive received an award under the MICP (or the Incentive Award program applicable outside the United States) or the 1997 PIP ("Incentive Award") in respect of the year immediately prior to the year that includes the Termination Date (the latter year constituting the "Termination Year"), the amount of that award multiplied by the fraction of the Termination Year preceding the Termination Date or (b) in the event that the Executive did not receive an MICP award (or an Incentive Award) in respect of the year immediately prior to the Termination Year, the amount of the MICP award (or Incentive Award) that Executive received in respect of the second year immediately prior to the - 42 - Termination Year multiplied by one plus the fraction of the Termination Year preceding the Termination Date. ARTICLE IV TAX MATTERS ----------- Section 4.1. Withholding. The Company may withhold from any amounts payable to the Executive hereunder all federal, state, cit y or other taxes that the Company may reasonably determine are required to be withheld pursuant to any applicable law or regulation, but, if the Executive has made the election provided in section 4.2 hereof, the Company shall not withhold amounts in respect of the excise tax imposed by Section 4999 of the Code or its successor. Section 4.2. Disclaimer. If the Executive so agrees prior to a Change of Control by notice to the Company in form satisfactory to the Company, the amounts payable to the Executive under this Agreement but not yet paid thereto shall be reduced to the largest amounts in the aggregate that the Executive could receive, in conjunction with any other payments received or to be received by him from a ny source, without any part of such amounts being subject to the excise tax imposed by Section 4999 of the Code or its successor. The amount of such reductions and their allocation among amounts otherwise payable to the Executive shall be determined either by the Company or by the Executive in consultation with counsel chosen (and compensated) by him, whichever is designated by the Executive in the aforesaid notice to the Company (the "Determining Party"). If, subsequent t o the payment to the Executive of amounts reduced pursuant to this section 4.2, the Determining Party should reasonably determine, or the Internal Revenue Service should assert against the party other than the Determining Party, that the amount of such reductions was insufficient to avoid the excise tax under Section 4999 (or the denial of a deduction under Section 280G of the Code or its successor), the amount by which such reductions were insufficient shall, upon notice to the other party, be deemed a loan from the Company to the Executive that the Executive shall repay to the Company within one year of such reasonable determination or assertion, together with interest thereon at the applicable federal rate provided in section 7872 of the Code or its successor. However, such amount shall not be deemed a loan if and to the extent that repayment thereof would not eliminate the Executive's liability for any Section 4999 excise tax. ARTICLE V COLLATERAL MATTERS ------------------ Section 5.l. Nature of Payments. All payments to the Executive under this Agreement shall be considered either payments in consideration of his continued service to the Company, severance payments in consideration of his past services thereto or payments in consideration of the covenant contained in section 5.l0 hereof. No payment hereunder shall be regarded as a penalty to the Company. Section 5.2. Legal Expenses. The Company shall pay all legal fees and expenses that the Executive may incur as a result of the Company's contesting the validity, the enforceability or the Executive's interpretation of, or determinations under, this Agreement. Without limitation of the foregoing, Interpublic shall, prior to the earlier of (a) 30 days after notice from the Executive to Interpublic so requesting or (b) the occurrence of a Change of Control, provide the Execu tive with an irrevocable letter of credit in the amount of $100,000 from a bank satisfactory to the Executive against which the Executive may draw to pay legal fees and expenses in connection with any attempt to enforce any of his rights under this Agreement. Said letter of credit shall not expire before 10 years following the date of this Agreement. Section 5.3. Mitigation. The Executive shall not be required to mitigate the amount of any payment provided for in this Agreement either by seeking other employment or otherwise. The amount of any payment provided for - 43 - herein shall not be reduced by any remuneration that the Executive may earn from employment with another employer or otherwise following his Termination Date. Section 5.4. Setoff for Debts. The Company may reduce the amount of any payment due the Executive under article III of this Agreement by the amount of any debt owed by the Executive to the Company that is embodied in a written instrument, that is due to be repaid as of the due date of the payment under this Agreement and that the Company has not already recovered by setoff or otherwise. Section 5.5. Coordination with Employment Contract. Payments to the Executive under article III of this Agreement shall be in lieu of any payments for breach of any employment contract between the Executive and the Company to which the Executive may be entitled by reason of a Qualifying Termination, and, before making the payments to the Executive provided under article III hereof, the Company may require the Executive to execute a waiver of any rights that he may have to recover payments in respect of a breach of such contract as a result of a Qualifying Termination. If the Executive has a Good Reason to resign and does so by providing the notice specified in the last sentence of section l.4 of this Agreement, he shall be deemed to have satisfied any notice requirement for resignation, and any service requirement following such notice, under any employment contract between the Executive and the Company. Section 5.6. Benefit of Bonus Plans. Except as otherwise provided in this Agreement or required by law, the Company shall not be compelled to include the Executive in any of its Benefit or Bonus Plans following the Executive's Termination Date, and the Company may require the Executive, as a condition to receiving the payments provided under article III hereof, to execute a waiver of any such rights. However, said waiver shall not affect any rights that the Executive may have in respect of his participation in any Benefit or Bonus Plan prior to his Termination Date. Section 5.7. Funding. Except as provided in section 5.2 of this Agreement, the Company shall not be required to set aside any amounts that may be necessary to satisfy its obligations hereunder. The Company's potential obligations to make payments to the Executive under this Agreement are solely contractual ones, and the Executive shall have no rights in respect of such payments except as a general and unsecured creditor of the Company. Section 5.8. Discount Rate. For purposes of this Agreement, the term "Discount Rate" shall mean the applicable Federal short-term rate determined under Section 1274(d) of the Code or its successor. If such rate is no longer determined, the Discount Rate shall be the yield on 2 -year Treasury notes for the most recent period reported in the most recent issue of the Federal Reserve Bulletin or its successor, or, if such rate is no longer reported therein, such measure of the yield on 2-year Treasury notes as the Company may reasonably determine. Section 5.9. Designated Numb er. For purposes of this Agreement, the Designated Number shall be Two (2.0). Section 5.10. Covenant of Executive. In the event that the Executive undergoes a Qualifying Termination that entitles him to any payment under article III of this Agreement, he shall not, for 18 months following his Termination Date, either (a) solicit any employee of Interpublic or a majority -controlled subsidiary thereof to leave such employ and enter into the employ of the Executive or any person or entity with which the Executive is associated or (b) solicit or handle on his own behalf or on behalf of any person or entity with which he is associated the advertising, public relations, sales promotion or market research busines s of any advertiser that is a client of Interpublic or a majority-controlled subsidiary thereof as of the Termination Date. Without limitation of any other remedies that the Company may pursue, the Company may enforce its rights under this section 5.l0 by means of injunction. This section shall not limit any other right or remedy that the Company may have under applicable law or any other agreement between the Company and the Executive. - 44 -  ARTICLE VI GENERAL PROVISIONS ------------------ Section 6.l. Term of Agreement. This Agreement shall terminate upon the earliest of (a) the expiration of five years from the date of this Agreement if no Change of Control has occurred during that period; (b) the termination of the Executive's employment with the Company for any reason prior to a Change of Control; (c) the Company's termination of the Executive's employment for Cause or death, the Executive's compulsory retirement within the provisions of 29 U.S.C. ss.631(c) (or, if Executive is not a citizen or resident of the United States, compulsory retirement under any applicable procedure of the Company in effect immediately prior to the change of control) or the Executive's resignation for other than Good Reason, following a Change of Control and the Company's and the Executive's fulfillment of all of their obligations under this Agreement; and (d) the expiration following a Change of Control of the Designated Number plus three years and the fulfillment by the Company and the Executive of all of their obligations hereunder. Section 6.2. Governing Law. Except as otherwise expressly provided herein, this Agreement and the rights and obligations hereunder shall be construed and enforced in accordance with the laws of the State of New York. Section 6.3. Successors to the Company. This Agreement shall inure to the benefit of Interpublic and its subsidiaries and shall be binding upon and enforceable by Interpublic and any successor thereto, including, without limitation, any corporation or corporations acquiring directly or indirectly all or substantia lly all of the business or assets of Interpublic whether by merger, consolidation, sale or otherwise, but shall not otherwise be assignable by Interpublic. Without limitation of the foregoing sentence, Interpublic shall require any successor (whether direct or indirect, by merger, consolidation, sale or otherwise) to all or substantially all of the business or assets of Interpublic, by agreement in form satisfactory to the Executive, expressly, absolutely and unconditionally to assu me and agree to perform this Agreement in the same manner and to the same extent as Interpublic would have been required to perform it if no such succession had taken place. As used in this agreement, "Interpublic" shall mean Interpublic as heretofore defined and any successor to all or substantially all of its business or assets that executes and delivers the agreement provided for in this section 6.3 or that becomes bound by this Agreement either pursuant to this Agreement or by operation of law. Section 6.4. Successor to the Executive. This Agreement shall inure to the benefit of and shall be binding upon and enforceable by the Executive and his personal and legal representatives, executors, administrators, heirs, distributees, legatees and, subject to section 6.5 hereof, his designees ("Successors"). If the Executive should die while amounts are or may be payable to him under this Agreement, references hereunder to the "Executive" shall, where appropriate, be deemed to refer to his Successors. Section 6.5. Nonalienability. No right of or amount payable to the Executive under this Agreement shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, hypothecation, encumbrance, charge, execution, attachment, levy or similar process or (except as provided in section 5.4 hereof) to setoff against any obligation or to assignment by operation of law. Any attempt, voluntary or involuntary, to effect any action specified in the immediately preceding sentence shall be void. However, this section 6.5 shall not prohibit the Executive from designating one or more persons, on a form satisfactory to the Company, to receive amounts payable to him under this Agreement in the event that he should die before receiving them. Section 6.6. Notices. All notices provided for in this Agreement shall be in writing. Notices to Interpublic shall be deemed given when personally delivered or sent by certified or registered mail or overnight delivery service to The Interpublic Group of Companies, Inc., l27l Avenue of the Americas, New York, New York l0020, attention: Corpo rate Secretary. Notices to the Executive shall be deemed given when personally delivered or sent by certified or - 45 - registered mail or overnight delivery service to the last address for the Executive shown on the records of the Company. Either Interpublic or the Executive may, by notice to the other, designate an address other than the foregoing for the receipt of subsequent notices. Section 6.7. Amendment. No amendment of this Agreement shall be effective unless in writing and signed by both the Company and the Executive. Section 6.8. Waivers. No waiver of any provision of this Agreement shall be valid unless approved in writing by the party giving such waiver. No waiver of a breach under any provision of this Agreement shall be deemed to be a waiver of such provision or any other provision of this Agreement or any subsequent breach. No failure on the part of either the Company or the Executive to exercise, and no delay in exercising , any right or remedy conferred by law or this Agreement shall operate as a waiver of such right or remedy, and no exercise or waiver, in whole or in part, of any right or remedy conferred by law or herein shall operate as a waiver of any other right or remedy. Section 6.9. Severability. If any provision of this Agreement shall be held invalid or unenforceable in whole or in part, such invalidity or unenforceability shall not affect any other provision of this Agreement or part thereof, each of which shall remain in full force and effect. Section 6.l0. Captions. The captions to the respective articles and sections of this Agreement are intended for convenience of reference only and have no substantive significance. Section 6.ll. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original but all of which together shall constitute a single instrument. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. THE INTERPUBLIC GROUP OF COMPANIES, INC. By /s/ C. KENT KROEBER ---------------------------------------- C. KENT KROEBER /s/ JAMES R. HEEKIN ---------------------------------------- JAMES R. HEEKIN - 46 - Exhibit 10(b)(i)(d) EMPLOYMENT AGREEMENT -------------------- AGREEMENT made as of January 1, 1998 by and between THE INTERPUBLIC GROUP OF COMPANIES, INC., a Delaware corporation ("Interpublic" or the "Corporation"), and JAMES R. HEEKIN ("Executive"). In consideration of the mutual promises set forth herein the parties hereto agree as follows: ARTICLE I --------- TERM OF EMPLOYMENT ------------------ 1.01 Subject to the provisions of Article VII and Article VIII, and upon the terms and subject to the conditions set forth herein, the Corporation will employ Executive for the period beginning January 1, 1998 ("Commencement Date") and ending on December 31, 2003. (The period during which Executive is employed hereunder is referred to herein as the "term of employment.") Executive will serve the Corporation during the term of employment. ARTICLE II ---------- DUTIES ------ 2.01 During the term of employment, Executive will: (i) Serve as Regional Director Europe of McCann-Erickson Europe, a wholly -owned subsidiary of Interpublic ("McCann"). (ii) Use his best efforts to promote the interests of the Corporation and McCann and devote his full time and efforts to their business and affairs; (iii) Perform such duties as the Corporation and McCann may from time to time assign to him; and (iv) Serve in such other offices of the Corporation and/or McCann as he may be elected or appointed to. ARTICLE III ----------- REGULAR COMPENSATION -------------------- 3.01 The Corporation will compensate Executive for the duties performed by him hereunder, by payment of a total base salary at the rate of Five Hundred Fifty Thousand Dollars ($550,000) per annum, Fifty Thousand Dollars ($50,000) of which shall be accrued in accordance with an Executive Special Benefit Agreement to be entered into between the Executive and Interpublic. The non-accrued portion of Executive's total base salary shall be payable in equal installments, which the Cor poration shall pay at semi -monthly intervals, subject to customary withholding for federal, state and local taxes. 3.02 The Corporation may at any time increase the compensation paid to Executive under this Article III if the Corporation in its sole discretion shall deem it advisable so to do in order to compensate him fairly for services rendered to the Corporation. - 47 -  ARTICLE IV ---------- BONUSES ------- 4.01 As soon as administratively feasible after full execution of this Agreement, Interpublic will use its best efforts to have the Committee grant Executive an award for the 1997-2000 performance period under Interpublic's Long-Term Performance Incentive Plan ("LTPIP") equal to (i) one thousand three hundred fifty (1,350) performance units tied to the cumulative compound profit growth of McCann North America, (ii) four hundred fifty (450) performance units tied to the cumulative compound profit growth of McCann Worldwide, and (iii) eighteen hundred (1,800) performance units tied to the cumulative compound profit growth of McCann Europe. ARTICLE V --------- INTERPUBLIC STOCK ----------------- 5.01 As soon as administratively feasible after full execution of this Agreement, Interpublic will use its best efforts to have the Compensation Committee of its Board of Directors ("Committee") grant to Executive ten thousand (10,000) shares of Interpublic Common Stock which will be subject to a five year ves ting restriction. 5.02 As soon as administratively feasible after full execution of this Agreement, Interpublic will use its best efforts to have the Committee grant to Executive options to purchase twenty thousand (20,000) shares of Interp ublic Common Stock, which will be subject to all the terms and conditions of the Interpublic Stock Incentive Plan. Forty percent (40%) of the options will be exercisable after the third anniversary of the date of grant, thirty percent (30%) will be exercisable after the fourth anniversary and thirty percent (30%) will be exercisable after the fifth anniversary of the date of grant through the tenth anniversary of the date of grant. ARTICLE VI ---------- OTHER EMPLOYMENT BENEFITS ------------------------- 6.01 Executive shall be eligible to participate in such other employee benefits as are available from time to time to other key management executives of Interpublic in accordance with the then-current terms and conditions established by Interpublic for eligibility and employee contributions required for participation in such benefits opportunities. 6.02 Executive will be entitled to four (4) weeks of vacation per year, to be taken in such amounts and at such times as shall be mutually convenient for Executive and the Corporation. ARTICLE VII ----------- TERMINATION ----------- 7.01 The Corporation may terminate the employment of Executive hereunder: (i) By giving Executive notice in writing at any time specifying a termination date not less than twelve (12) months after the date on - 48 -  which such notice is given, in which event Executive's employment hereunder shall terminate on the date specified in such notice, or (ii) By giving Executive notice in writing at any time specifying a termination date less than twelve (12) months after the date on which such notice is given. In this event Executive's employment hereunder shall terminate on the date specified in such notice and the Corporation shall thereafter pay him a sum equal to the amount by which twelve (12) months salary at his then current rate exceeds the salary paid to him for the period from the date on which such notice is given to the termination date specified in such notice. Such payment shall be made during the period immediately following the termination date specified in such notice, in successive equal monthly installments each of which shall be equal to one month's salary at the rate in effect at the time of such termination, with any residue in respect of a period less than one month to be paid together with the last installment. During the termination period provided in subsection (i), or in the case of a termination under subsection (ii) providing for a termination period of less than twelve (12) months, for a period of twelve (12) months after the termination notice, Executive will be entitled to receive all employee benefits accorded to him prior to termination which are made available to employees generally; provided, that such benefits shall cease upon such date that Executive accepts employment with another employer offering similar benefits. 7.02 Executive may at any time give notice in writing to the Corporation specifying a termination date not less than twelve (12) months after the date on which such notice is given, in which event his employment hereunder shall terminate on the date specified in such notice, and Executive shall receive his salary until the termination date. ARTICLE VIII ------------ COVENANTS --------- 8.01 While Executive is employed hereunder by the Corporation he shall not, without the prior written consent of the Corporation, which will not be unreasonably withheld, engage, directly or indirectly, in any other trade, business or employment, or have any interest, direct or indirect, in any other business, firm or corporation; provided, however, that he may continue to own or may hereafter acquire any securities of any class of any publicly-owned company. 8.02 Executive shall treat as confidential and keep secret the affairs of the Corporation and shall not at any time during the term of employment or for a period of three years thereafter, without the prior written consent of the Corporation, divulge, furnish or make known or accessible to, or use for the benefit of, anyone other than the Corporation and its subsidiaries and affiliates any information of a confidential nature relating in any way to the business of the Corporation or its subsidiaries or affiliates or their clients and obtained by him in the course of his employment hereunder. 8.03 All records, papers and documents kept or made by Executive relating to the business of the Corporation or its subsidiaries or affiliates or their clients shall be and remain the property of the Corporation. 8.04 All articles invented by Executive, processes discovered by him, trademarks, designs, advertising copy and art work, display and promotion materials and, in general, everything of value conceived or created by him pertaining to the business of the Corporation or any of its subsidiaries or affiliates during the term of employment, and any and all rights of every nature whatever thereto, shall immediately become the property of the Corporation, and Executive will assign, transfer and deliver all patents, copyrights, royalties, designs and copy, and any and all int erests and rights whatever thereto and thereunder to the Corporation. - 49 -  8.05 Following the termination of Executive's employment hereunder for any reason, Executive shall not for a period of twenty-four (24) months from such termination, (a) solicit any employee of the Corporation, Interpublic or any affiliated company of Interpublic to leave such employ to enter the employ of Executive or of any person, firm or corporation with which Executive is then associated o r (b) solicit or handle on Executive's own behalf or on behalf of any other person, firm or corporation, the event marketing, public relations, advertising, sales promotion or market research business of any person or entity which is a client of the Corporation. 8.06 If at the time of enforcement of any provision of this Agreement, a court shall hold that the duration, scope or area restriction of any provision hereof is unreasonable under circumstances now or then existing, the parties hereto agree that the maximum duration, scope or area reasonable under the circumstances shall be substituted by the court for the stated duration, scope or area. 8.07 Executive acknowledges that a remedy at law for any breach or attempted breach of Article VIII of this Agreement will be inadequate, and agrees that the Corporation shall be entitled to specific performance and injunctive and other equitable relief in the case of any such breach or attempted breach. 8.08 Executive represents and warrants that neither the execution and delivery of this Employment Agreement nor the performance of Executive's services hereunder will conflict with, or result in a breach of, any agreement to which Executive is a party or by which he may be bound or affected, in particular the terms of any employment agreement to which Executive may be a party. Executive further represents and warrants that he has full right, power and authority to enter into and carry out the provisions of this Employment Agreement. ARTICLE IX ---------- Assignment ---------- 9.01 This Agreement shall be binding upon and enure to the benefit of the successors and assigns of the Corporation. Neither this Agreement nor any rights hereunder shall be assignable by Executive and any such purported assignment by him shall be void. ARTICLE X --------- AGREEMENT ENTIRE ---------------- 10.01 This Agreement constitutes the entire understanding between the Corporation and Executive concerning his employment by the Corporation or any of its parents, affiliates or subsidiaries and supersedes any and all previous agreements between Executive and the Corporation or any of its parents, affiliates or subsidiaries concerning such employment, and/or any compensation or bonuses. Each party hereto shall pay its own costs and expenses (including legal fees) incurred in connection with the preparation, negotiation and execution of this Agreement. This Agreement may not be changed orally. - 50 -  ARTICLE XI ---------- APPLICABLE LAW -------------- 11.01 The Agreement shall be governed by and construed in accordance with the laws of the State of New York. THE INTERPUBLIC GROUP OF COMPANIES, INC. By: /s/ C. KENT KROEBER ------------------------------------- Name: KENT KROEBER By: /s/ JAMES R. HEEKIN ------------------------------------- Name: JAMES R. HEEKIN - 51 - Exhibit 10(b)(i)(e) EXECUTIVE SPECIAL BENEFIT AGREEMENT ----------------------------------- AGREEMENT made as of February 1, 1998 by and between THE INTERPUBLIC GROUP OF COMPANIES, INC., a corporation of the State of Delaware (hereinafter referred to as "Interpublic") and JAMES R. HEEKIN (hereinafter referred to as "Executive"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, Executive is in the employ of Interpublic and/or one or more of its subsidiaries (Interpublic and its subsidiaries being hereinafter referred to collectively as the "Corporation"); and WHEREAS, Interpublic and Executive desire to enter i nto an Executive Special Benefit Agreement which shall be supplementary to any employment agreement or arrangement which Executive now or hereinafter may have with respect to Executive's employment by Interpublic or any of its subsidiaries; NOW, THEREFORE, in consideration of the mutual promises herein set forth, the parties hereto, intending to be legally bound, agree as follows: ARTICLE I --------- DEATH AND SPECIAL RETIREMENT BENEFITS ------------------------------------- 1.01 For purposes of this Agreement the "Accrual Term" shall mean the period of ninety-six (96) months beginning on the date of this Agreement and ending on the day preceding the eighth anniversary hereof or on such earlier date on which Executive shall cease to be in the employ of the Corporation. 1.02 The Corporation shall provide Executive with the following benefits contingent upon Executive's compliance with all the terms and conditions of this Agreement and Executive's satisfactory completion of a physical exa mination in connection with an insurance policy on the life of Executive which Interpublic or its assignee (other than Executive) proposes to obtain and own. Effective at the end of the Accrual Term, Executive's annual compensation will be increased by Fifty Thousand Dollars ($50,000) if Executive is in the employ of the Corporation at that time. 1.03 If, during the Accrual Term or thereafter during a period of employment by the Corporation which is continuous from the date of this Agreement, Executive shall die while in the employ of the Corporation, the Corporation shall pay to such beneficiary or beneficiaries as Executive shall have designated pursuant to Section 1.07 (or in the absence of such designation, shall pay to the Executor of the Will or the Administrator of the Estate of Executive) survivor income payments of One Hundred Twenty Thousand Dollars ($120,000) per annum for fifteen (15) years following Executive's death, such payments to be made on January 15th of each of the fifteen (15) years beginning with the year following the year in which Executive dies. 1.04 If, after a continuous period of employment from the date of this Agreement, Executive shall retire from the employ of the Corporation so that the first day on which Executive is no longer in the employ of the Corporation occurs on or after Executive's sixtieth birthday, the Corporation shall pay to Executive special retirement benefits at the rate of One Hundred Twenty Thousand Dollars ($120,000) per annum for fifteen (15) years beginning with the calendar month following Executive's last day of employment, such payments to be made in equal monthly installments. - 52 -  1.05 If, after a continuous period of employment from the date of this Agreement, Executive shall retire, resign, or be terminated from the employ of the Corporation so that the first day on which Executive is no longer in the employ of the Corporation occurs on or after Executive's fifty -fifth birthday but prior to Executive's sixtieth birthday, the Corporation shall pay to Executive special retirement benefits at the annual rates set forth below for fifteen years beginning with the calendar month following Executive's last day of employment, such payments to be made in equal monthly installments: Last Day of Employment Annual Rate ---------------------- ----------- On or after 55th birthday but prior to 56th birthday $ 62,400 On or after 56th birthday but prior to 57th birthday $ 76,800 On or after 57th birthday but prior to 58th birthday $ 91,200 On or after 58th birthday but prior to 59th birthday $105,600 On or after 59th birthday but prior to 60th birthday $112,800 1.06 If, following such termination of employment, Executive shall die before payment of all of the installments provided for in Section 1.04 or Section 1.05, any remaining installments shall be paid to such beneficiary or beneficiaries as Executive shall have designated pursuant to Section 1.07 or, in the absence of such designation, to the Executor of the Will or the Administrator of the Estate of Executive. 1.07 For purposes of Sections 1.03, 1.04 and 1.05, or any of them, Executive may at any time designate a beneficiary or beneficiaries by filing with the chief personnel officer of Interpublic a Beneficiary Designation Form provided by such officer. Executive may at any time, by filing a new Beneficiary Designation Form, revoke or change any prior designation of beneficiary. 1.08 If Executive shall die while in the employ of the Corporation, no sum shall be payable pursuant to Sections 1.04, 1.05, 1.06, 2.01, 2.02 or 2.03. 1.09 In connection with the life insurance policy referred to in Section 1.02, Interpublic has relied on written representations made by Executive concerning Executive's age and the state of Executive's health. If said representations are untrue in any material respect, whether directly or by omission, and if the Corporation is damaged by any such untrue representations, no sum shall be payable pursuant to Sections 1.03, 1.04, 1.05, 1.06, 2.01, 2.02 or 2.03. 1.10 It is expressly agreed that Interpublic or its assignee (other than Executive) shall at all times be the sole and complete owner and beneficiary of the life insurance policy referred to in Sections 1.02 and 1.09, shall have the unrestricted right to use all amounts and exercise all options and privileges thereunder without the knowledge or consent of Executive or Executive's designated beneficiary or any other person and that neither Executive nor Executive's designated beneficiary nor any other person shall have any right, title or interest, legal or equitable, whatsoever in or to such policy. ARTICLE II ---------- ALTERNATIVE DEFERRED COMPENSATION --------------------------------- 2.01 If Executive shall, for any reason other than death, cease to be employed by the Corporation on a date prior to Executive's fifty -fifth birthday, the Corporation shall, in lieu of any payment pursuant to Article I of this Agreement, c ompensate Executive by payment, at the times and in the manner specified in Section 2.02, of a sum computed at the rate of Fifty Thousand Dollars ($50,000) per annum for each full year and proportionate amount for any - 53 - part year from the date of this Agreement to the date of such termination during which Executive is in the employ of the Corporation. Such payment shall be conditional upon Executive's compliance with all the terms and conditions of this Agreement. 2.02 The aggregate compensation payable under Section 2.01 shall be paid in equal consecutive monthly installments commencing with the first month in which Executive is no longer in the employ of the Corporation and continuing for a number of months equal to the number of months which have elapsed from the date of this Agreement to the commencement date of such payments, up to a maximum of ninety-six (96) months. 2.03 If Executive dies while receiving payments in accordance with the provisions of Section 2.02, any installments payable in accordance with the provisions of Section 2.02 less any amounts previously paid Executive in accordance therewith, shall be paid to the Executor of the Will or the Administrator of the Estate of Executive. 2.04 It is understood that none of the payments made in accordance with this Agreement shall be considered for purposes of determining benefits under the Interpublic Pension Plan, nor shall such sums be entitled to credits equivalent to interest under the Plan for Credits Equivalent to Interest on Balances of Deferred Compensation Owing under Employment Agreements adopted effective as of January 1, 1974 by Interpublic. ARTICLE III ----------- NON-SOLICITATION OF CLIENTS OR EMPLOYEES ---------------------------------------- 3.01 Following the termination of Executive's employment hereunder for any reason, Executive shall not for a period of twenty-four (24) months from such termination, if such termination occurs during the first two (2) years of employment hereunder, or for a period of twelve (12) months if such termination occurs subsequent to the first two years of employment, either (a) solicit any employee of the Corporation to leave such employ to enter the employ of Executive or of any corporation or enterprise with which Executive is then associated or (b) solicit or handle on Executive's own behalf or on behalf of any other person, firm or corporation, the advertising, public relations, sales promotion or market research business of any advertiser which is a client of the Corporation at the time of such termination and as to which brand Executive devoted services. ARTICLE IV ---------- ASSIGNMENT ---------- 4.01 This Agreement shall be binding upon and inure to the benefit of the successors and assigns of Interpublic. Neither this Agreement nor any rights hereunder shall be subject in any matter to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge by Executive, and any such attempted action by Executive shall be void. This Agreement may not be changed orally, nor may this Agreement be amended to increase the amount of any benefits that are payable pursuant to this Agreement or to accelerate the payment of any such benefits. - 54 -  ARTICLE V --------- CONTRACTUAL NATURE OF OBLIGATION -------------------------------- 5.01 The liabilities of the Corporation to Executive pursuant to this Agreement shall be those of a debtor pursuant to such contractual obligations as are created by the Agreement. Executive's rights with respect to any benefit to which Executive has become entitled under this Agreement, but which Executive has not yet received, shall be solely the rights of a general unsecured creditor of the Corporation. ARTICLE VI ---------- APPLICABLE LAW -------------- 6.01 This Agreement shall be governed by and construed in accordance with the laws of the State of New York. THE INTERPUBLIC GROUP OF COMPANIES, INC. THE INTERPUBLIC GROUP OF COMPANIES, INC. By /s/ C. KENT KROEBER ---------------------------------------- C. KENT KROEBER /s/ JAMES R. HEEKIN ---------------------------------------- JAMES R. HEEKIN - 55 - Exhibit 10(b)(i)(f) SUPPLEMENTAL AGREEMENT ---------------------- SUPPLEMENTAL AGREEMENT made as of March 28, 2000 between THE INTERPUBLIC GROUP OF COMPANIES, INC., a Delaware corporation ("Interpublic") and JAMES R. HEEKIN ("Executive"). W I T N E S S E T H: ------------------- WHEREAS, Interpublic and Executive are parties to an Employment Agreement made as of January 1, 1998 (hereinafter referred to as the "Agreement"); and WHEREAS, Interpublic and Executive desire to amend the Agreement; NOW, THEREFORE, in consideration of the mutual promises herein and in the Agreement set forth, the parties hereto, intending to be legally bound, agree as follows: 1. Paragraph 3.01 of the Agreement is hereby deleted and amended to read in its entirety as follows: "The Corporation will compensate Executive for the duties performed by him hereunder, by payment of a total base salary at the rate of Eight Hundred Seventy Thousand Dollars ($870,000) per annum, One Hundred Thousand Dollars ($100,000) of which shall be accrued in accordance with certain Executive Special Benefit Agreements entered into between the Executive and Interpublic. The non-accrued portion of Executive's total base salary shall be payable in equal installments, which the Corporation shall pay at semi-monthly intervals, subject to customary withholding for federal, state and local taxes." 2. A new paragraph 5.03 shall be added to read as follows: "Executive has been granted: (i) effective December 16, 1999, seventy thousand (70,000) shares of Interpublic Common Stock which are subject to a five-year vesting restriction, and (ii) effective March 21, 2000 an additional thirty thousand (30,000) shares of Interpublic Common Stock, which are subject to a seven -year vesting restriction." 3. A new paragraph 5.04 shall be added to read as follows: "Executive has been granted: (i) effective December 12, 1999, options to purchase one hundred thousand (100,000) shares of Interpublic Common Stock, and (ii) effective March 21, 2000, options to purchase eighty thousand (80,000) shares of Interpublic Common Stock, all of which are subject to all the terms and conditions of the Interpublic Stock Incentive Plan. Forty percent (40%) of the options will be exercisable after the third anniversary of the date of grant, thirty percent (30%) will be exercisable after the fourth anniversary and thirty percent (30%) will be exercisable after the fifth anniversary of the date of grant through the tenth anniversary of the date of grant." Except as hereinabove amended, the Agreement shall continue in full force and effect. - 56 -  This Supplemental Agreement shall be governed by the laws of the State of New York, applicable to contracts made and fully to be performed therein. THE INTERPUBLIC GRO UP OF COMPANIES, INC. By /s/ C. KENT KROEBER ---------------------------------------- C. KENT KROEBER /s/ JAMES R. HEEKIN ---------------------------------------- JAMES R. HEEKIN - 57 - Exhibit 10(b)(i)(g) SUPPLEMENTAL AGREEMENT ---------------------- SUPPLEMENTAL AGREEMENT made as of June 1, 2000, by and between THE INTERPUBLIC GROUP OF COMPANIES, INC., a corporation of the State of Delaware (hereinafter referred to as the "Corpor ation"), and James R. Heekin (hereinafter referred to as "Executive"). W I T N E S S E T H: ------------------- WHEREAS, the Corporation and Executive are parties to an Executive Severance Agreement made as of January 1, 1998 (hereinafter referred to as the "Agreement"); and WHEREAS, the Corporation and Executive desire to amend the Executive Severance Agreement; NOW, THEREFORE, in consideration of the mutual promises herein and in the Agreement set forth, the parties hereto, intending to be legally bound, agree as follows: 1. Paragraph 5.9 of the Agreement is hereby amended effective June 1, 2000, so as to delete "Two (2.0)" and to substitute therefor "Three (3)". 2. Except as hereinabove amended, the Agreement shall continue in full force and effect. 3. This Supplemental Agreement shall be governed by the laws of the State of New York. THE INTERPUBLIC GROUP OF COMPANIES, INC. By /s/ C. KENT KROEBER ---------------------------------------- C. KENT KROEBER /s/ JAMES R. HEEKIN ---------------------------------------- JAMES R. HEEKIN - 58 - Exhibit 10(b)(i)(h) EXECUTIVE SPECIAL BENEFIT AGREEMENT ----------------------------------- AGREEMENT made as of January 1, 2000, by and between THE INTERPUBLIC GROUP OF COMPANIES, INC., a corporation of the State of Delaware (hereinafter referred to as "Interpublic") and JAMES R. HEEKIN (hereinafter referred to as "Executive"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, Executive is in the employ of Interpublic and/or one or more of its subsidiaries (Interpublic and its subsidiaries being hereinafter referred to collectively as the "Corporation"); and WHEREAS, Interpublic and Executive desire to enter into an Executive Special Benefit Agreement which shall be supplementary to any employment agreement or arrangement which Executive now or hereinafter may have with respect to Executive's employment by Interpublic or any of its subsidiaries; NOW, THEREFORE, in consideration of the mutual promises herein set forth, the parties hereto, intending to be legally bound, agree as follows: ARTICLE I --------- Death and Special Retirement Benefits ------------------------------------- 1.01 For purposes of this Agreement the "Accrual Term" shall mean the period of ninety-six (96) months beginning on the date of this Agreement and ending on the day preceding the eighth anniversary hereof or on such earlier date on which Executive shall cease to be in the employ of the Corporation. 1.02 The Corporation shall provide Executive with the following benefits contingent upon Executive's compliance with all the terms and conditions of this Agreement and Executive's satisfactory completion of a physical examination in connection with an insurance policy on the life of Executive which Interpublic or its assignee (other than Executive) proposes to obtain and own. Effective at the end of the Accrual Term, Executive's annual compensation will be increased by Twenty Five Thousand Dollars ($25,000) if Executive is in the employ of the Corporation at that time. 1.03 If, during the Accrual Term or thereafter during a period of employment by the Corporation which is continuous from the date of this Agreement, Executive shall die while in the employ of the Corporation, the Corporation shall pay to such beneficiary or beneficiaries as Executive shall have designated pursuant to Section 1.07 (or in the absence of such designation, shall pay to the Executor of the Will or the Administrator of the Estate of Executive) survivor income payments of Fifty Thousand Dollars ($50,000) per annum fo r fifteen (15) years following Executive's death, such payments to be made on January 15th of each of the fifteen (15) years beginning with the year following the year in which Executive dies. 1.04 If, after a continuous period of employment from the date of this Agreement, Executive shall retire from the employ of the Corporation so that the first day on which Executive is no longer in the employ of the Corporation occurs on or after Executive's sixtieth birthday, the Corporation sh all pay to Executive special retirement benefits at the rate of Fifty Thousand Dollars ($50,000) per annum for fifteen (15) years beginning with the calendar month following Executive's last day of employment, such payments to be made in equal monthly installments. 1.05 If, after a continuous period of employment from the date of this Agreement, Executive shall retire, resign, or be terminated from the employ of - 59 - the Corporation so that the first day on which Executive is no longer in the employ of the Corporation occurs on or after Executive's fifty-eighth birthday but prior to Executive's sixtieth birthday, the Corporation shall pay to Executive special retirement benefits at the annual rates set forth below for fifteen years beginning with the calendar month following Executive's last day of employment, such payments to be made in equal monthly installments: Last Day of Employment Annual Rate ---------------------- ----------- On or after 58th birthday but prior to 59th birthday $38,000 On or after 59th birthday but prior to 60th birthday $44,000 1.06 If, following such termination of employment, Executive shall die before payment of all of the installments provided for in Section 1.04 or Section 1.05, any remaining installments shall be paid to such beneficiary or beneficiaries as Executive shall have designated pursuant to Section 1.07 or, in the absence of such designation, to the Executor of the Will or the Administrator of the Estate of Executive. 1.07 For purposes of Sections 1.03, 1.04 and 1.05, or any of them, Executive may at any time designate a beneficiary or beneficiaries by filing with the chief personnel officer of Interpublic a Beneficiary Designation Form provided by such officer. Executive may at any time, by filing a new Beneficiary Designation Form, revoke or change any prior designation of beneficiary. 1.08 If Executive shall die while in the employ of the Corporation, no sum shall be payable pursuant to Sections 1.04, 1.05, 1.06, 2.01, 2.02 or 2.03. 1.09 In connection with the life insurance policy referred to in Section 1.02, Interpublic has relied on written representations made by Executive concerning Executive's age and the state of Executive's health. If said representations are untrue in any material respect, whether directly or by omission, and if the Corporation is damaged by any such untrue representations, no sum shall be payable pursuant to Sections 1.03, 1.04, 1.05, 1.06, 2.01, 2.02 or 2.03. 1.10 It is expressly agreed that Interpublic or its assignee (other than Executive) shall at all times be the sole and complete owner and beneficiary of the life insurance policy referred to in Sections 1.02 and 1.09, shall have the unrestricted right to use all amounts and exercise all options and privileges thereunder without the knowledge or consent of Executive or Executive's designated beneficiary or any other person and that neither Executive nor Executive's designated beneficiary nor any other person shall have any right, title or interest, legal or equitable, whatsoever in or to such policy. ARTICLE II ---------- Alternative Deferred Compensation --------------------------------- 2.01 If Executive shall, for any reason other than death, cease to be employed by the Corporation on a date prior to Executive's fifty-eighth birthday, the Corporation shall, in lieu of any payment pursuant to Article I of this Agreement, compensate Executive by payment, at the times and in the manner specified in Section 2.02, of a sum computed at the rate of Twenty Thousand Dollars ($25,000) per annum for each full year and proportionate amount for any part year fro m the date of this Agreement to the date of such termination during which Executive is in the employ of the Corporation with a maximum payment of Twenty Five Thousand Dollars ($25,000). Such payment shall be conditional upon Executive's compliance with all the terms and conditions of this Agreement. 2.02 The aggregate compensation payable under Section 2.01 shall be paid in equal consecutive monthly installments commencing with the first month in which Executive is no longer in the employ of the Corporation and continuing for a number of months equal to the number of months which have elapsed from the - 60 - date of this Agreement to the commencement date of such payments, up to a maximum of ninety-six (96) months. 2.03 If Executive dies while receiving payments in accordance with the provisions of Section 2.02, any installments payable in accordance with the provisions of Section 2.02 less any amounts previously paid Executive in accordance therewith, shall be paid to the Executor of the Will or the Administrator of the Estate of Executive. 2.04 It is understood that none of the payments made in accordance with this Agreement shall be considered for purposes of determining benefits under the Interpublic Pension Plan, nor shall such sums be entitled to credits equivalent to interest under the Plan for Credits Equivalent to Interest on Balances of Deferred Compensation Owing under Employment Agreements adopted effective as of January 1, 1974 by Interpublic. ARTICLE III ----------- Non-solicitation of Clients or Employees ---------------------------------------- 3.01 Following the termination of Executive's employment hereunder for any reason, Executive shall not for a period of twelve months either (a) solicit any employee of the Corporation to leave such employ to enter the employ of Executive or of any corporation or enterprise with which Executive is then associated or (b) solicit or handle on Executive's own behalf or on behalf of any other person, firm or corporation, the advertising, public relations, sales promotion or market research business of any advertiser which is a client of the Corporation at the time of such termination. ARTICLE IV ---------- Assignment ---------- 4.01 This Agreement shall be binding upon and inure to the benefit of the successors and assigns of Interpublic. Neither this Agreement nor any rights hereunder shall be subject in any matter to anticipation, aliena tion, sale, transfer, assignment, pledge, encumbrance or charge by Executive, and any such attempted action by Executive shall be void. This Agreement may not be changed orally, nor may this Agreement be amended to increase the amount of any benefits that are payable pursuant to this Agreement or to accelerate the payment of any such benefits. ARTICLE V --------- Contractual Nature of Obligation -------------------------------- 5.01 The liabilities of the Corporation to Executive pursuant to this Agreement shall be those of a debtor pursuant to such contractual obligations as are created by the Agreement. Executive's rights with respect to any benefit to which Executive has become entitled under this Agreement, but which Executive has not yet received, shall be solely the rights of a general unsecured creditor of the Corporation. - 61 -  ARTICLE VI ---------- Applicable Law -------------- 6.01 This Agreement shall be governed by and construed in accordance with the laws of the State of New York. THE INTERPUBLIC GROUP OF COMPANIES, INC. By /s/ C. KENT KROEBER ---------------------------------------- C. KENT KROEBER /s/ JAMES R. HEEKIN ---------------------------------------- JAMES R. HEEKIN - 62 - Exhibit 10(b)(ii)(a) SUPPLEMENTAL AGREEMENT ---------------------- AGREEMENT made as of June 30, 2000 by and between THE INTERPUBLIC GROUP OF COMPANIES, INC., a corporation of the State of Delaware (hereinafter referred to as "Interpublic") and BARRY LINSKY (hereinafter referred to as "Executive"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, Executive and Interpublic are parties to an Executive Special Benefit Agreement made as of March 1, 1987, and Supplemental Agreements made as of May 23, 1990 and March 1, 1993 (hereinafter referred to collectively as the "Agreement"); and; WHEREAS, the Corporation and Executive desire to amend the Agreement; NOW, THEREFORE, in consideration of the mutual promises herein set forth, the parties hereto, intending to be legally bound, agree as follows: 1. Section 1.03 of the Agreement is hereby amended, so as to delete "per annum for fifteen years following Executive's death, such payments to be made on January 15th of each of the fifteen (15) years beginning with the year following the year in which Executive dies" and to substitute "per annum for fifteen (15) years in monthly installments beginning with the 15th of the calendar month following Executive's death, and in equal monthly installments thereafter". 2. A new Section 1.11 to the Agreement is hereby added to read in its entirety as follows: "If Executive's employment continues beyond the maximum target benefit age provided in this Agreement, the maximum target age benefit will be increased 4% annually until Executive fully retires. In no event, however, will the 4% annual benefit increase be applied past the year 2003". 3. Except as herein above amended, the Agreemen t shall continue in full force and effect. 4. This Supplemental Agreement shall be governed by the laws of the State of New York. THE INTERPUBLIC GROUP OF COMPANIES, INC. By /s/ C. KENT KROEBER ---------------------------------------- C. KENT KROEBER /s/ BARRY LINSKY ---------------------------------------- BARRY LINSKY - 63 - Exhibit 10(b)(ii)(b) EXECUTIVE SPECIAL BENEFIT-INCOME REPLACEMENT AGREEMENT ------------------------------------------------------ AGREEMENT made as of June 1, 2000 by and between THE INTERPUBLIC GROUP OF COMPANIES, INC., a corporation of the State of Delaware (hereinafter referred to as "Interpublic") and BARRY R. LINKSY (hereinafter referred to as "Executive"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, Executive is in the employ of Interpublic and/or one or more of its subsidiaries (Interpublic and its subsidiaries being hereinafter referred to collectively as the "Corporation"); and WHEREAS, Interpublic and Executive desire to enter into an Executive Special Benefit-Income Replacement Agreement which shall be supplementary to any employment agreement or arrangement which Executive now or hereinafter may have with respect to Executive's employment by Interpublic or any of its subsidiaries; NOW, THEREFORE, in consideration of the mutual promises herein set forth, the parties hereto, intending to be legally bound, agree as follows: ARTICLE I --------- Income Replacement Payment -------------------------- 1.01 Effective January 1, 2002, provided Executive is employed by the Corporation on such date, the Corporation shall provide Executive with the following benefits: (a) Upon Executive's retirement from the employ of the Corporation, the Corporation shall pay or cause to be paid, to Executive Two Hundred and Fifty-Eight Thousand Dollars ($258,000) per annum for fifteen (15) years in monthly installments beginning with the 15th of the month following Executive's last day of employment and in equal monthly installments thereafter. If Executive should die before all annual payments under this Section 1.01(a) are made, such payments shall continue to be paid to Executive's estate in accordance with the terms of this Agreement. (b) If Executive shall die while in the employ of the Corporation (or while payments are being made under Section 1.01(a) of this Agreement), the Corporation shall pay or cause to be paid to such beneficiary or beneficiaries as Executive shall have designated pursuant to Section 1.02 (or in the absence of such designation, shall pay to the Executor of the Will or the Administrator of the Estate of Executive) Two Hundred and Fifty-Eight Thousand Dollars ($258,000) per annum for fifteen (15) years in monthly installments beginning with the 15th of the calendar month following Executive's death and in equal monthly installments thereafter. (c) In the event of the Executive's death, the Executor of the Will, or its Administrator of the Estate of the Executive can apply for a present value payment of any unpaid portion of the payments to be made under this Agreement, which the Corporation may grant, in its discretion. In such event, the present value shall be based on an annual rate approved by the Board of Directors. 1.02 For purposes of this Agreement, Executive may at any time designate a beneficiary or beneficiaries by filing with the chief personnel officer of Interpublic a Beneficiary Designation Form provided by such officer. - 64 - Executive may at any time, by filing a new Beneficiary Designation Form, revoke or change any prior designation of beneficiary. ARTICLE II ---------- Assignment ---------- 2.01 This Agreement shall be binding upon and inure to the benefit of the successors and assigns of Interpublic. Neither this Agreement nor any rights hereunder shall be subject in any matter to anticipation , alienation, sale, transfer, assignment, pledge, encumbrance or charge by Executive, and any such attempted action by Executive shall be void. This Agreement may not be changed orally. ARTICLE III ----------- Contractual Nature of Obligation -------------------------------- 3.01 The liabilities of the Corporation to Executive pursuant to this Agreement sha ll be those of a debtor pursuant to such contractual obligations as are created by the Agreement. ARTICLE IV ---------- General Provisions ------------------ 4.01 It is understood that none of the payments made in accordance with this Agreement shall be considered for purposes of determining benefits under the Interpublic Pension Plan, nor shall such sums be entitled to credits equivalent to interest under the Plan for Credits Equivalent to Interest on Balances of Deferred Compensation Owing under Employment Agreement adopted effective as of January 1, 1974 by Interpublic. 4.02 This Agreement shall be governed by and construed in accordance with the Employee Retirement Income Security Act of 1974, as amended, and to the extent not preempted thereby, the laws of the State of New York. 4.03 The Corporation shall have the right to withhold from all payments made to Executive or his estate or beneficiary under this Agreement all taxes which it shall reasonably determine shall be required. THE INTERPUBLIC GROUP OF COMPANIES, INC. By /s/ C. KENT KROEBER ---------------------------------------- Name: C. KENT KROEBER Title: Senior Vice President, Human Resources /s/ BARRY R. LINSKY ---------------------------------------- BARRY R. LINSKY - 65 - Exhibit 10(b)(ii)(c) SUPPLEMENTAL AGREEMENT ---------------------- SUPPLEMENTAL AGREEMENT made as of March 26, 2001 by and between The Interpublic Group of Companies, Inc., a corporation of the State of Delaware (hereinafter referred to as the "Corporation"), and BARRY R. LINSKY (hereinafter referred to as "Executive"). W I T N E S S E T H; ------------------- WHEREAS, the Corporation and Executive are parties to an Employment Agreement made as of January 1, 1991, a Supplemental Agreement dated as of August 15, 1992, a Supplemental Agreement dated as of January 1, 1995, a Supplemental Agreement made as of January 1, 1996 and a Supplemental Agreement dated as of August 1, 1996 (hereinafter collectively referred to as the "Employment Agreement"); and WHEREAS, the Corporation and Executive desire to amend the Agreement; NOW, THEREFORE, in consideration of the mutual promises herein and in the Employment Agreement set forth, the parties hereto, intending to be legally bound, agree as follows: 1. Section 1.01 of the Employment Agreement is hereby amended, effective as of March 26, 2001, so as to delete: "and ending on December 31, 2000" therefrom and substitute "and ending on December 31, 2005" therefore. 2. Section 2.01 (iii) of the Employment Agreement is hereby amended, effective as of March 26, 2001, so as to delete: "Executive's initial position will be Senior Vice President-Planning and Business Development at Interpublic" therefrom and substitute "Serve as Executive Vice President" therefore. . 3. Except as hereinabove amended, the Employment Agreement shall continue in full force and effect. 4. This Supplemental Agreement shall be governed by the laws of the State of New York. THE INTERPUBLIC GROUP OF COMPANIES, INC. By /s/ C. KENT KROE BER ---------------------------------------- C. KENT KROEBER /s/ BARRY R. LINSKY ---------------------------------------- BARRY R. LINSKY - 66 - Exhibit 10(b)(iii)(a) SUPPLEMENTAL AGREEMENT ---------------------- AGREEMENT made as of June 30, 2000 by and between THE INTERPUBLIC GROUP OF COMPANIES, INC., a corporation of the State of Delaware (hereinafter referred to as "Interpublic") and C. KENT KROEBER (hereinafter referred to as "Executive"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, Executive and Interpublic are parties to an Executive Special Benefit Agreement made as of July 1, 1987, and Supplemental Agreements made as of May 23, 1990, June 1, 1994 and October 27, 1998 (hereinafter referred to collectively as the "Agreement"); and; WHEREAS, the Corporation and Executive desire to amend the Agreement; NOW, THEREFORE, in consideration of the mutual promises herein set forth, the parties hereto, intending to be legally bound, agree as follows: 1. Section 1.03 of the July 1, 1987 Agreement and Sections 1.02 of the October 27, 1998 and June 1, 1994 Agreements are hereby amended, so as to delete "per annum for fifteen (15) years following Executive's death, such payments to be made on January 15th of each of the fifteen (15) years beginning with the year following the year in which Executive dies" and to substitute "per annum for fifteen (15) years in monthly installments beginning with the 15th of the calendar month following Executive's death, and in equal monthly installments thereafter". 2. A new Section 1.11 to the July 1, 1987 Agreement and a new Se ction 1.05 to the October 27, 1998 Agreement are hereby added to read in their entirety as follows: "If Executive's employment continues beyond the maximum target benefit age provided in this Agreement, the maximum target age benefit will be increased 4% annually until Executive fully retires. In no event, however, will the 4% annual benefit increase be applied past the year 2003". 3. Except as herein above amended, the Agreement shall continue in full force and effect. 4. This Supplemental Agreement shall be governed by the laws of the State of New York. THE INTERPUBLIC GROUP OF COMPANIES, INC. By /s/ NICHOLAS J. CAMERA ---------------------------------------- By: NICHOLAS J. CAMERA /s/ C. KENT KROEBER ---------------------------------------- C. KENT KROEBER - 67 - Exhibit 10(b)(iii)(b) EXECUTIVE SPECIAL BENEFIT-INCOME REPLACEMENT AGREEMENT ------------------------------------------------------ AGREEMENT made as of June 1, 2000 by and between THE INTERPUBLIC GROUP OF COMPANIES, INC., a corporation of the State of Delaware (hereinafter referred to as "Interpublic") and C. KENT KROEBER (hereinafter referred to as "Executive"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, Executive is in the employ of Interpublic and/or one or more of its subsidiaries (Interpublic and its subsidiaries being hereinafter referred to collectively as the "Corporation"); and WHEREAS, Interpublic and Executive desire to enter into an Executive Special Benefit-Income Replacement Agreement which shall be supplementary to any employment agreement or arrangement which Executive now or hereinafter may have with respect to Executive's employment by Interpublic or any of its subsidiaries; NOW, THEREFORE, in consideration of the mutual promises herein set forth, the parties hereto, intending to be legally bound, agree as follows: ARTICLE I --------- Income Replacement Payment -------------------------- 1.01 Effective January 1, 2002, provided Executive is employed by the Corporation on such date, the Corporation shall provide Executive with the following benefits: (a) Upon Executive's retirement from the employ of the Corporation, the Corporation shall pay or cause to be paid, to Executive Two Hundred and Eighty-Six Thousand Dollars ($286,000) per annum for fifteen (15) years in monthly installments beginning with the 15th of the calendar month following Executive's last day of employment and in equal monthly installments thereafter. If Executive should die before all annual payments under this Section 1.01(a) are made, such payments shall continue to be paid to Executive's estate in accordance with the terms of this Agreement. (b) If Executive shall die while in the employ of the Corporation (or while payments are being made under Section 1.01(a) of this Agreement), the Corporation shall pay or cause to be paid to such beneficiary or beneficiaries as Executive shall have designated pursuant to Section 1.02 (or in the absence of such designation, shall pay to the Execu tor of the Will or the Administrator of the Estate of Executive) Two Hundred and Eighty-Six Thousand Dollars ($286,000) per annum for fifteen (15) years in monthly installments beginning with the 15th of the calendar month following Executive's death, and in equal monthly installments thereafter. (c) In the event of the Executive's death, the Executor of the Will, or its Administrator of the Estate of the Executive can apply for a present value payment of any unpaid portion of the payments to be made under this Agreement, which the Corporation may grant, in its discretion. In such event, the present value shall be based on an annual rate approved by the Board of Directors. 1.02 For purposes of this Agreement, Executive may at any time designate a beneficiary or beneficiaries by filing with the General Counsel and Secretary of Interpublic a Beneficiary Designation Form provided by such - 68 - officer. Exe cutive may at any time, by filing a new Beneficiary Designation Form, revoke or change any prior designation of beneficiary. ARTICLE II ---------- Assignment ---------- 2.01 This Agreement shall be binding upon and inure to the benefit of the successors and assigns of Interpublic. Neither this Agreement nor any rights hereunder shall be subject in an y matter to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge by Executive, and any such attempted action by Executive shall be void. This Agreement may not be changed orally. ARTICLE III ----------- Contractual Nature of Obligation -------------------------------- 3.01 The liabilities of the Corporation to Executive pursuant to this Agreement shall be those of a debtor pursuant to such contractual obligations as are created by the Agreement. ARTICLE IV ---------- General Provisions ------------------ 4.01 It is understood that none of the payments made in accordance with this Agreement shall be considered for purposes of determining benefits under the Interpublic Pension Plan, nor sh all such sums be entitled to credits equivalent to interest under the Plan for Credits Equivalent to Interest on Balances of Deferred Compensation Owing under Employment Agreement adopted effective as of January 1, 1974 by Interpublic. 4.02 This Agreement shall be governed by and construed in accordance with the Employee Retirement Income Security Act of 1974, as amended, and to the extent not preempted thereby, the laws of the State of New York. 4.03 The Corporation shall have the right to withhold from all payments made to Executive or his estate or beneficiary under this Agreement all taxes which it shall reasonably determine shall be required. THE INTERPUBLIC GROUP OF COMPANIES, INC. By /s/ NICHOLAS J. CAMERA ---------------------------------------- Name: NICHOLAS J. CAMERA Title: Senior Vice President General Counsel and Secretary /s/ C. KENT KROEBER ---------------------------------------- C. KENT KROEBER - 69 - Exhibit 10(b)(iv)(a) SUPPLEMENTAL AGREEMENT ---------------------- AGREEMENT made as of June 30, 2000 by and between THE INTERPUBLIC GROUP OF COMPANIES, INC., a corporation of the State of Delaware (hereinafter referred to as "Interpublic") and THOMAS J. VOLPE (hereinafter referred to as "Executive"). W I T N E S S E T H: WHEREAS, Executive and Interpublic are parties to an Executive Special Benefit Agreement made as of April 1, 1986 and Supplemental Agreements made as of May 23, 1990 and March 21, 2000 (hereinafter referred to collectively as the "Agreement"); and; WHEREAS, the Corporation and Executive desire to amend the Agreement; NOW, THEREFORE, in consideration of the mutual promises herein set forth, the parties hereto, intending to be legally bound, agree as follows: 1. Section 1.03 of the April 1,1986 Agreement is hereby amended, so as to delete "per annum for fifteen years following Executive's death, such payments to be made on January 15 of each of the fifteen years beginning with the year following the year in which Executive dies" and to substitute "per annum for fifteen (15) years in monthly installments beginning with the 15th of the calendar month following Executive's death, and in equal monthly installments thereafter". 2. Section 1.02 of the March 21, 2000 agreement is hereby amended, so as to delete "per annum for fifteen (15) years following Executive's death, such payments to be made on the 15th of the month following the month in which Executive dies, and on each anniversary of such date for each of the fourteen (14) years thereafter" and substitute "per annum for fifteen years in monthly installments beginning with the 15th of the calendar month following Executive's death, and in equal monthly installments thereafter". 3. Section 1.03 of the March 21, 2000 agreement is hereby amended, so as to delete "per annum for fifteen (15) years following Executive's last day of employment, such payments to be made on the 15th of the month following the month in which Executive retires, and on each anniversary of such date for each of the fourteen (14) years thereafter" and substitute "per annum for fifteen years in monthly installments beginning with the 15th of the calendar month following Exe cutive's last day of employment, and in equal monthly installments thereafter". 4. A new Section 1.11 to the April 1, 1986 Agreement is hereby added to read in their entirety as follows: "If Executive's employment continues beyond the maximum target benefit age provided in this Agreement, the maximum target age benefit will be increased 4% annually until Executive fully retires. In no event, however, will the 4% annual benefit increase be applied past the year 2003". 5. Except as herein above amended, the Agreement shall continue in full force and effect. - 70 -  6. This Supplemental Agreement shall be governed by the laws of the State of New York. THE INTERPUBLIC GRO UP OF COMPANIES, INC. By /s/ C. KENT KROEBER ---------------------------------------- C. KENT KROEBER /s/ THOMAS J. VOLPE ---------------------------------------- THOMAS J. VOLPE - 71 - Exhibit 10(b)(iv)(b) SUPPLEMENTAL AGREEMENT ---------------------- AGREEMENT made as of June 30, 2000 by and between THE INTERPUBLIC GROUP OF COMPANIES, INC., a corporation of the State o f Delaware (hereinafter referred to as "Interpublic") and THOMAS J. VOLPE (hereinafter referred to as "Executive"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, Executive and Interpublic are parties to an Executive Special Benefit Agreement -Income Replacement Agreement made as of June 1, 2000 (hereinafter referred to as the "AGREEMENT"); and; WHEREAS, the Corporation and Executive desire to amend the Agreement; NOW, THEREFORE, in consideration of the mutual promises herein set forth, the parties hereto, intending to be legally bound, agree as follows: 1. Section 1.01 (a) of the Agreement is hereby amended, so as to delete "per annum for fifteen (15) years following Executive's last day of employment, such payments to be made on the 15th of the month following the month in which Executive retires, and on each anniversary of such date for each of the fourteen (14) years thereafter" and substitute "per annum for fifteen (15) years in monthly installments beginning with the 15th of the calendar month following Executive's last day of employment, and in equal monthly installments thereafter". 2. Section 1.01 (b) of the Agreement is hereby amended, so as to delete "per annum for fifteen (15) years following Executive's death, such payments to be made on the 15th of the month following the month in which Executive di es, and on each anniversary of such date for each of the fourteen (14) years thereafter" and substitute "per annum for fifteen (15) years in monthly installments beginning with the 15th of the calendar month following Executive's death, and in equal monthly installments thereafter". 3. Except as herein above amended, the Agreement shall continue in full force and effect. 4. This Supplemental Agreement shall be governed by the laws of the State of New York. THE INTERPUBLIC GROUP OF COMPANIES, INC. By /s/ C. KENT KROEBER ---------------------------------------- C. KENT KROEBER /s/ THOMAS J. VOLPE ---------------------------------------- THOMAS J. VOLPE - 72 - Exhibit 10(b)(iv)(c) EXECUTIVE SPECIAL BENEFIT AGREEMENT ----------------------------------- AGREEMENT made as of March 21, 2000 by and between THE INTERPUBLIC GROUP OF COMPANIES, INC., a corporation of the State of Delaware (hereinafter referred to as "Interpublic") and THOMAS J. VOLPE (hereinafter referred to as "Executive"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, Executive is in the employ of Interpublic and/or one or more of its subsidiaries (Interpublic and its subsidiaries being hereinafter referred to collectively as the "Corporation"); and WHEREAS, Interpublic and Executive desire to enter into an Executive Special Benefit Agreement which shall be supplementary to any employment agreement or arrangement which Executive now or hereinafter may have with respect to Executive's employment by Interpublic or any of its subsidiaries ; NOW, THEREFORE, in consideration of the mutual promises herein set forth, the parties hereto, intending to be legally bound, agree as follows: ARTICLE I --------- Death and Special Retirement Benefits ------------------------------------- 1.01 The Corporation shall provide Executive with the following benefits contingent upon Executive's compliance with all the terms and conditions of this Agreement. 1.02 If, during a period of employment by the Corporation which is continuous from the date of this Agreement, Executive shall die while in the employ of the Corporation, the Corporation shall pay to such beneficiary or beneficiaries as Executive shall have designated pursuant to Section 1.04 (or in the absence of such designation, shall pay to the Executor of the Will or the Administrator of the Estate of Executive) survivor income payments of One Hundred Forty Seven Thousand Dollars ($147,000) per annum for fifteen (15) years following Executive's death, such payments to be made on the 15th of the month following the month in which Executive dies, and on each ann iversary of such date for each of the fourteen (14) years thereafter. 1.03 Upon Executive's retirement from the employ of the Corporation the Corporation shall pay to Executive special retirement benefits at the rate of One Hundred Forty Seven Thousand Dollars ($147,000) per annum for fifteen (15) years following Executive's last day of employment, such payments to be made on the 15th of the month following the month in which Executive retires, and on each anniversary of such date for each of the fourteen (14) years thereafter. 1.04 For purposes of Sections 1.02 and 1.03, Executive may at any time designate a beneficiary or beneficiaries by filing with the chief personnel officer of Interpublic a Beneficiary Designation Form provided by such officer. Executive may at any time, by filing a new Beneficiary Designation Form, revoke or change any prior designation of beneficiary. - 73 -  ARTICLE II ---------- Assignment ---------- 2.01 This Agreement shall be binding upon and inure to the benefit of the successors and assigns of Interpublic. Neither this Agreement nor any rights hereunder shall be subject in any matter to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge by Executive, and any such attempted action by Executive shall be void. This Agreement may not be changed orally, nor may this Agreement be amended to increase the amount of any benefits that are payable pursuant to this Agreement or to accelerate the payment of any such benefits. ARTICLE III ----------- Contractual Nature of Obligation -------------------------------- 3.01 The liabilities of the Corporation to Executive pursuant to this Agreement shall be those of a debtor pursuant to such contractual obligations as are created by the Agreement. Executive's rights with respect to any benefit to which Executive has become entitled under this Agreement, but which Executive has not yet r eceived, shall be solely the rights of a general unsecured creditor of the Corporation. ARTICLE IV ---------- General Provisions ------------------ 4.01 It is understood that none of the payments made in accordance with this Agreement shall be considered for purposes of determining benefits under the Interpublic Pension Plan, nor shall such sums be entitled to credits equivalent to interest under the Plan for Credits Equivalent to Interest on Balances of Deferred Compensation Owing under Employment Agreement adopted effective as of January 1, 1974 by Interpublic. 4.02 This Agreement shall be governed by and construed in accordance with the Employee Retirement Income Security Act of 1974, as amended, and to the extent not preempted thereby, the laws of the State of New York. THE INTERPUBLIC GROUP OF COMPANIES, INC. By /s/ C. KENT KROEBER ---------------------------------------- C. KENT KROEBER /s/ THOMAS J. VOLPE ---------------------------------------- THOMAS J. VOLPE - 74 - Exhibit 10(b)(iv)(d) EXECUTIVE SPECIAL BENEFIT-INCOME REPLACEMENT AGREEMENT ------------------------------------------------------ AGREEMENT made as of June 1, 2000 by and between THE INTERPUBLIC GROUP OF COMPANIES, INC., a corporation of the State of Delaware (hereinafter referred to as "Interpublic") and THOMAS J. VOLPE (hereinafter referred to as "Executive"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, Executive is in the employ of Interpublic and/or one or more of its subsidiaries (Interpublic and its subsidiaries being hereinafter referred to collectively as the "Corporation"); and WHEREAS, Interpublic and Executive desire to enter into an Executive Special Benefit-Income Replacement Agreement which shall be supplementary to any employment agreement or arrangement which Executive now or hereinafter may have with respect to Executive's employment by Interpublic or any of its subsidiaries; NOW, THEREFORE, in consideration of the mutual promises herein set forth, the parties hereto, intending to be legally bound, agree as follows: ARTICLE I --------- Income Replacement Payment -------------------------- 1.01 Effective January 1, 2001, provided Executive is employed by the Corporation on such date, the Corporation shall provide Executive with the following benefits: (a) Upon Executive's retirement from the employ of the Corporation, the Corporation shall pay or cause to be paid, to Executive One Hundred and Three Thousand Dollars ($103,000) per annum for fifteen (15) years following Executive's last day of employment, such payments to be made on the 15th of the month following the month in which Executive retires, and on each anniversary of such date for each of the fourteen (14) years thereafter. If Executive should die before all annual payments under this Section 1.01(a) are made, such payments shall continue to be paid to Executive's estate in accordance with the terms of this Agreement. (b) If Executive shall die while in the employ of the Corporation (or while payments are being made under Section 1.01(a) of this Agreement), the Corporation shall pay or cause to be paid to such beneficiary or beneficiaries as Executive shall have designated pursuant to Section 1.02 (or in the absence of such designation, shall pay to the Executor of the Will or the Administrator of the Estate of Executive) One Hundred and Three Thousand Dollars ($103,000) per annum for fifteen (15) years following Executive's death, such payments to be made on the 15th of the month following the month in which Executive dies, and on each anniversary of such date for each of the fourteen (14) years thereafter. (c) In the event of the Executive's death, the Executor of the Will, or its Administrator of the Estate of the Executive can apply for a present value payment of any unpaid portion of the payments to be made under this Agreement, w hich the Corporation may grant, in its discretion. In such event, the present value shall be based on an annual rate approved by the Board of Directors. 1.02 For purposes of this Agreement, Executive may at any time designate a beneficiary or beneficiaries by filing with the chief personnel officer of Interpublic a Beneficiary Designation Form provided by such officer. - 75 - Executive may at any time, by filing a new Beneficiary Designation Form, revoke or change any prior designation of beneficiary. ARTICLE II ---------- Assignment ---------- 2.01 This Agreement shall be binding upon and inure to the benefit of the successors and assigns of Interpublic. Neither this Agreement nor any rights hereunder shall be subject in any matter to anticipation, alienation, sale, transfer, as signment, pledge, encumbrance or charge by Executive, and any such attempted action by Executive shall be void. This Agreement may not be changed orally. ARTICLE III ----------- Contractual Nature of Obligation -------------------------------- 3.01 The liabilities of the Corporation to Executive pursuant to this Agreement shall be those of a debtor pursuant to such contractual obligations as are created by the Agreement. ARTICLE IV ---------- General Provisions ------------------ 4.01 It is understood that none of the payments made in accordance with this Agreement shall be considered for purposes of determining benefits under the Interpublic Pension Plan, nor shall such sums be entitled to credits equivalent to interest under the Plan for Credits Equivalent to Interest on Balances of Deferred Compensation Owing under Employment Agreement adopted effective as of January 1, 1974 by Interpublic. 4.02 This Agreement shall be governed by and construed in accordance with the Employee Retirement Income Security Act of 1974, as amended, and to the extent not preempted thereby, the laws of the State of New York. 4.03 The Corporation shall have the right to withhold from all payments made to Executive or his estate or beneficiary under this Agreement all taxes which it shall reasonably determine shall be required. THE INTERPUBLIC GROUP OF COMPANIES, INC. By /s/ C. KENT KROEBER ---------------------------------------- Name: C. KENT KROEBER Title: Senior Vice President, Human Resources /s/ THOMAS J. VOLPE ---------------------------------------- THOMAS J. VOLPE - 76 - Exhibit 10(b)(v)(a) EMPLOYMENT AGREEMENT -------------------- AGREEMENT made as of September 5, 2000 by and between THE INTERPUBLIC GROUP OF COMPANIES, INC., a Delaware corporation ("Interpublic" or the "Corporation"), and BRUCE NELSON ("Executive"). In consideration of the mutual promises set forth herein the parties hereto agree as follows: ARTICLE I --------- Term of Employment ------------------ 1.01 Subject to the provisions of Article VII and Article VIII, and upon the terms and subject to the conditions set forth herein, the Corporation will employ Executive for the period beginning September 5, 2000 ("Commencement Date") and ending on August 31, 2005. (The period during which Executive is employed hereunder is referred to herein as the "term of employment.") Executive will serve the Corporation during the term of employment. ARTICLE II ---------- Duties ------ 2.01 During the term of employment, Executive will: (i) Serve as Executive Vice President, Chief Marketing Officer of Interpublic; (ii) Use his best efforts to promote the interests of the Corporation and devote his full time and efforts to their business and affairs; (iii) Perform such duties as the Corporation may from time to time assign to him; and (iv) Serve in such other offices of the Corporation as he may be elected or appointed to. ARTICLE III ----------- Regular Compensation -------------------- 3.01 The Corporation will compensate Executive for the duties performed by him hereunder, by payment of a base salary at the rate of Six Hundred Thousand Dollars ($600,000) per annum, of which Five Hundred Thousand Dollars ($500,000) shall be payable in equal installments, which the Corporation shall pay at semi -monthly intervals, subject to customary withholding for federal, state and local taxes, and One Hundred Thousand Dollars ($100,000) will be subject to an Executive Special Benefit Agreement to be entered into between Executive and Interpublic. 3.02 The Corporation may at any time increase the compensation paid to Executive under this Article III if the Corporation in its sole discretion shall deem it advisable so to do in order to compensate him fairly for services rendered to the Corporation. - 77 -  ARTICLE IV ---------- Bonuses ------- 4.01 Executive will be eligible during the term of employment to participate in the Management Incentive Compensation Plan ("MICP"), in accordance with the terms and con ditions of the Plan established from time to time. Executive shall be eligible to receive MICP awards up to one hundred percent (100%) of his base salary, but the actual award, if any, shall be determined by the Corporation and shall be based on profits of Interpublic, Executive's individual performance, and management discretion. 4.02 As soon as administratively feasible after full execution of this Agreement, Interpublic will use its best efforts to have the Compensation Committee of its Board of Directors ("Committee") grant Executive an award for the 1999-2002 performance period under Interpublic's Long-Term Performance Incentive Plan ("LTPIP") equal to three thousand one hundred twenty-five (3,125) performance units tied to the cumulative compound profit growth of Interpublic and options under Interpublic's Stock Incentive Plan to purchase twenty -five thousand (25,000) shares of Interpublic common stock which may not be exercised in any part prior to the end of the performance period and thereafter shall be exercisable in whole or in part. 4.03 As soon as administratively feasible after full execution of this Agreement, Interpublic will use its best efforts to have the Committee grant Executive an award for the 2001-2004 performance period under Interpublic's Long-Term Performance Incentive Plan ("LTPIP") equal to six thousand (6,000) performance units tied to the cumulative compound profit growth of Interpublic and options under Interpublic's Stock Incentive Plan to purchase thirty thousand (30,000) shares of Interpublic common stock which may not be exercised in any part prior to the end of the performance period and thereafter shall be exercisable in whole or in part. ARTICLE V --------- Interpublic Stock ----------------- 5.01 As soon as administratively feasible after full execution of this Agreement, Interpublic will use its best efforts to have the Compensation Committee of its Board of Directors ("Committee") grant to Executive twenty thousand (20,000) shares of Interpublic Common Stock which will be subject to a five year vesting restriction. 5.02 As soon as administratively feasible after full execution of this Agreement, Interpublic will use its best efforts to have the Committee grant to Executive options to purchase forty-five thousand (45,000) shares of Interpublic Common Stock, which will be subject to all the terms and conditions of the Interpublic Stock Incentive Plan. Forty percent (40%) of the options will be exercisable after the third anniversary of the date of grant, thirty percent (30%) will be exercisable after the fourth anniversary and thirty percent (30%) will be exercisable after the fifth anniversary of the date of grant through the tenth anniversary of the date of grant. ARTICLE VI ---------- Other Employment Benefits ------------------------- 6.01 Executive shall be eligible to participate in such other employee benefits as are available from time to time to other key management executives of Interpublic in accordance with the then-current terms and conditions - 78 - established by Interpublic for eligibility and employee contributions required for participation in such benefits opportunities. 6.02 Executive will be entitled to four (4) weeks of vacation per year, to be taken in such amounts and at such times as shall be mutually convenient for Executive and the Corporation. 6.03 Executive shall be reimbursed for all reasonable out -of-pocket expenses actually incurred by him in the conduct of the business of the Corporation provided that Executive submits all substantiation of such expenses to the Corporation on a timely basis in accordance with standard policies of Interpublic. 6.04 Executive shall be entitled to an automobile allowance of Seven Thousand Dollars ($7,000) per annum, and shall be reimbursed for actual parking expenses in New York City relating to business purposes, provided that Executive submits all substantiation of such parking expenses to the Corporation on a timely basis in accordance with standard policies of Interpublic. 6.05 Executive shall be elected a member of the Interpublic Development Council. ARTICLE VII ----------- Termination ----------- 7.01 The Corporation may terminate the employment of Executive hereunder: (i) By giving Executive notice in writing at any time specifying a termination date not less than twelve (12) months after the date on which such notice is given, in which event Executive's employment hereunder shall terminate on the date specified in such notice, or (ii) By giving Executive notice in writing at any time specifying a termination date less than twelve (12) months after the date on which such notice is given. In this event Executive's employment hereunder shall terminate on the date specified in such notice and the Corporation shall thereafter pay him a sum equal to the amount by which twelve (12) months salary at his then current rate exceeds the salary paid to him for the period from the date on which such notice is given to the termination date specified in such notice. Such payment shall be made during the period immediately following the termination date specified in such notice, in successive equal monthly installments each of which shall be equal to one (1) month's salary at the rate in effect at the time of such termination, with any residue in respect of a period less than one (1) month to be paid together with the last installment. During the termination period provided in subsection (i), or in the case of a termination under subsection (ii) providing for a termination period of less than twelve (12) months, for a period of twelve (12) months after the termination notice, Executive will be entitled to receive all employee benefits accorded to him prior to termination which are made available to employees generall y; provided, that such benefits shall cease upon such date that Executive accepts employment with another employer offering similar benefits. 7.02 Notwithstanding the provisions of Section 7.01, during the period of notice of termination, Executive will use reasonable, good faith efforts to obtain other employment reasonably comparable to his employment under this Agreement. Upon obtaining other employment (including work as a consultant, independent contractor or establishing his own business), Executive will promptly notify the Corporation, and (a) in the event that Executive's salary and other non -contingent compensation ("new compensation") payable to Executive in connection with his new employment shall equ al or exceed the salary portion - 79 - of the amount payable by the Corporation under Section 7.01, the Corporation shall be relieved of any obligation to make payments under Section 7.01, or (b) in the event Executive's new compensation shall be less than the salary portion of payments to be made under Section 7.01, the Corporation will pay Executive the difference between such payments and the new compensation. 7.03 Executive may at any time give notice in writing to the Corporation specifying a termination date not less than twelve (12) months after the date on which such notice is given, in which event his employment hereunder shall terminate on the date specified in such notice, and Executive shall receive his salary until the termination date. 7.04 Notwithstanding the provisions of Section 7.01, the Corporation may terminate the employment of Executive hereunder, at any time after the Commencement Date, for Cause. For purposes of this Agreement, "Cause" means the following: (i) Any material breach by Executive of any provision of this Agreement (including without limitation Sections 8.01 and 8.02 hereof) upon notice of same by the Corporation which breach, if capable of being cured, has not been cured within fifteen (15) days after such notice (it being understood and agreed that a breach of Section 8.01 or 8.02 hereof, among others, shall be deemed not capable of being cured); (ii) Executive's absence from duty for a period of time exceeding fifteen (15) consecutive business days or twenty (20) out of any thirty (30) consecutive business days (other than on account of permitted vacation or as permitted for illness, disability or authorized leave in accordance with Interpublic's policies and procedures) without the co nsent of the Board of Directors of the Corporation; (iii) The acceptance by Executive, prior to the effective date of Executive's voluntary resignation from employment with the Corporation, of a position with another employer, without the consent of the Board of Directors; (iv) Misappropriation by Executive of funds or property of the Corporation or any attempt by Executive to secure any personal profit related to the business of the Corporation (other than as permitted by this Agreement) and not fairly disclosed to and approved by the Board of Directors; (v) Fraud, dishonesty, disl oyalty, gross negligence or willful misconduct on the part of Executive in the performance of his duties as an employee of the Corporation; (vi) A felony conviction of Executive; or (vii) Executive's engaging, during the term of employment, in activities which are prohibited by state and/or federal laws prohibiting discrimination based on age, sex, race, religion or national origin, or engaging in conduct which is constituted as sexual harassment. Upon a termination for Cause, the Corporation shall pay Executive his salary through the date of termination of employment, and Executive shall not be entitled to any Special Bonus or Performance Bonus with respect to the year of termination, or to any other payments hereunder. - 80 -  ARTICLE VIII ------------ Covenants --------- 8.01 While Executive is employed hereunder by the Corporation he shall not, without the prior written consent of the Corporation, which will not be unreasonably withheld, engage, directly or indirectly, in any other trade, business or employment, or have any interest, direct or indirect, in any other business, firm or corporation; provided, however, that he may continue to own or may hereafter acquire any securities of any class of any publicly-owned company. 8.02 Executive shall treat as confidential and keep secret the affairs of the Corporation and shall not at any time during the term of employment or for a period of three (3) years thereafter, without the prior written consent of the Corporation, divulge, furnish or make known or accessible to, or use for the benefit of, anyone other than the Corporation and its subsidiaries and affiliates any information of a confidential nature relating in any way to the business of the Corporation or its subsidiaries or affiliates or their clients and obtained by him in the course of his employment hereunder. 8.03 All records, papers and documents kept or made by Executive relating to the business of the Corporation or its subsidiaries or affiliates or their clients shall be and remain the property of the Corporation. 8.04 All articles invented by Executive, processes discovered by him, trademarks, designs, advertising copy and art work, display and promotion materials and, in general, everything of value conceived or created by him pertaining to the business of the Corporation or any of its subsidiaries or affiliates during the term of employment, and any and all rights of every nature whatever thereto, shall immediately become the property of the Corporation, and Executive will assign, transfer and deliver all patents, copyrights, royalties, designs and c opy, and any and all interests and rights whatever thereto and thereunder to the Corporation. 8.05 Following the termination of Executive's employment hereunder for any reason, Executive shall not for a period of twenty-four (24) months from such termination, (a) solicit any employee of the Corporation, Interpublic or any affiliated company of Interpublic to leave such employ to enter the employ of Executive or of any person, firm or corporation with which Executive is then associated or (b) solicit or handle on Executive's own behalf or on behalf of any other person, firm or corporation, the event marketing, public relations, advertising, sales promotion or market research business of any person or entity which is a client of the Corporation. 8.06 If at the time of enforcement of any provision of this Agreement, a court shall hold that the duration, scope or area restriction of any provision hereof is unreasonable under circumstances now or then existing, the parties hereto agree that the maximum duration, scope or area reasonable under the circumstances shall be substituted by the court for the stated duration, scope or area. 8.07 Executive acknowledges that a remedy at law for any breach or attempted breach of Article VIII of this Agreement will be inadequate, and agrees that the Corporation shall be entitled to specific performance and injunctive and other equitable relief in the case of any such breach or attempted breach. 8.08 Executive represents and warrants that neither the execution and delivery of this Employment Agreement nor the performance of Executive's services hereunder will conflict with, or result in a breach of, any agre ement to which Executive is a party or by which he may be bound or affected, in particular the terms of any employment agreement to which Executive may be a party. Executive further represents and warrants that he has full right, power and authority to enter into and carry out the provisions of this Employment Agreement. - 81 -  ARTICLE IX ---------- Arbitration ----------- 9.01 Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, including claims involving alleged legally protected rights, such as claims for age discrimination in violation of the Age Discrimination in Employment Act of 1967, as amended, Title VII of the Civil Rights Act, as amended, and all other federal and state law claims for defamation, breach of contract, wrongful termination and any other claim arising because of Executive's employment, termination of employment or otherwise, shall be settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association and Section 12.01 hereof, and judgement upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. The arbitration shall take place in the city where Executive customarily renders services to the Corporation. The prevailing party in any such arbitration shall be entitled to receive attorney's fees and costs. ARTICLE X --------- Assignment ---------- 10.01 This Agreement shall be binding upon and enure to the benefit of the successors and assigns of the Corporation. Neither this Agreement nor any rights hereunder shall be assignable by Executive and any such purported assignment by him shall be void. ARTICLE XI ---------- Agreement Entire ---------------- 11.01 This Agreement constitutes the entire understanding between the Corporation and Executive concerning his employment by the Corporation or any of its parents, affiliates or subsidiaries and supersedes any and all previous agreements between Executive and the Corporation or any of its parents, affiliates or subsidiaries concerning such employment, and/or any compensation or bonuses. Each party hereto shall pay its own costs and expenses (including legal fees) incurred in connection with the prep aration, negotiation and execution of this Agreement. This Agreement may not be changed orally. ARTICLE XII ----------- Applicable Law -------------- - 82 -  12.01 The Agreement shall be governed by and construed in accordance with the laws of the State of New York. THE INTERPUBLIC GROUP OF COMPANIES, INC. By /s/ C. KENT KROEBER ---------------------------------------- Name: C. KENT KROEBER Title: Senior Vice President, Human Resources /s/ BRUCE NELSON ---------------------------------------- BRUCE NELSON - 83 - Exhibit 10(b)(v)(b) EXECUTIVE SPECIAL BENEFIT AGREEMENT ----------------------------------- AGREEMENT made as of September 1, 2000, by and between THE INTERPUBLIC GROUP OF COMPANIES, INC., a corporation of the State of Delaware (hereinafter referred to as "Interpublic") and BRUCE NELSON (hereinafter referred to as "Executive"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, Executive is in the employ of Interpublic and/or one or more of its subsidiaries (Interpublic and its subsidiaries being hereinafter referred to collectively as the "Corporation"); and WHEREAS, Interpublic and Executive desire to enter into an Executive Special Benefit Agreement which shall be supplementary to any employment agreement or arrangement which Executive now or hereinafter may have with respect to Executive's employment by Interpublic or any of its subsidiaries; NOW, THEREFORE, in consideration of the mutual promises herein set forth, the parties hereto, intending to be legally bound, agree as follows: ARTICLE I --------- Death and Special Retirement Benefits ------------------------------------- 1.01 For purposes of this Agreement the "Accrual Term" shall mean the period of seventy -two (72) months beginning on the date of this Agreement and ending on the day preceding the sixth anniversary hereof or on such earlier date on which Executive shall cease to be in the employ of the Corporation. 1.02 The Corporation shall provide Executive with the following benefits contingent upon Executive's compliance with all the terms and conditions of this Agreement and Executive's satisfactory completion of a physical examination in connection with an insurance policy on the life of Executive which Interpublic or its assignee (other than Executive) proposes to obtain and own. Effective at the end of the Accrual Term, Executive's annual compensation will be increased by One Hundred Thousand Dollars ($100,000) if Executive is in the employ of the Corporation at that time. 1.03 If, during the Accrual Term or thereafter during a period of employment by the Corporation which is continuous from the date of this Agreement, Executive shall die while in the employ of the Corporation, the Corporation shall pay to such beneficiary or beneficiaries as Executive shall have designated pursuant to Section 1.07 (or in the absence of such designation, shall pay to the Executor of the Will or the Administrator of the Estate of Executive) survivor income payments of One Hundred and Twenty Thousand Dollars ($120,000) per annum for fifteen (15) years in monthly installments beginning with the 15th of the calendar month following Executive's death, and in equal monthly installment thereafter. 1.04 If, after a continuous period of employment from the date of this Agreement, Executive shall retire from the employ of the Corporation so that the first day on which Executive is no longer in the employ of the Corporation occurs on or after Executive's sixtieth birthday, the Corporation shall pay to Executive special retirement benefits at the rate of One Hundred and Twenty Thousand Dollars ($120,000) per annum for fifteen (15) years in monthly installments beginning with the 15th of the calendar month following Executive's last day of employment, and in equal monthly installments thereafter. - 84 -  1.05 If, after a continuous period of employment from the date of this Agreement, Executive shall retire, resign, or be terminated from the employ of the Corporation so that the first day on which Executive is no longer in the employ of the Corporation occurs on or after Executive's fifty -fifth birthday but prior to Executive's sixtieth birthday, the Corporation shall pay to Executive special retirement benefits at the annual rates set forth below for fifteen years beginning with the calendar month following Executive's last day of employment, such payments to be made in equal monthly installments: Last Day of Employment Annual Rate ---------------------- ----------- On or after 55th birthday but prior to 56th birthday $62,400 On or after 56th birthday but prior to 57th birthday $76,800 On or after 57th birthday but prior to 58th birthday $91,200 On or after 58th birthday but prior to 59th birthday $105,600 On or after 59th birthday but prior to 60th birthday $112,800 1.06 If, following such termination of employment, Executive shall die before payment of all of the installments provided for in Section 1.04 or Section 1.05, any remaining installments shall be paid to such beneficiary or beneficiaries as Executive shall have designated pursuant to Section 1.07 or, in the absence of such designation, to the Executor of the Will or the Administrator of the Estate of Executive. 1.07 For purposes of Sections 1.03, 1.04 and 1.05, or any of them, Executive may at any time designate a beneficiary or beneficiaries by filing with the chief personnel officer of Interpublic a Beneficiary Designation Form provided by such officer. Executive may at any time, by filing a new Beneficiary Designation Form, revoke or change any prior designation of beneficiary. 1.08 If Executive shall die while in the employ of the Corporation, no sum shall be payable pursuant to Sections 1.04, 1.05, 1.06, 2.01, 2.02 or 2.03. 1.09 In connection with the life insurance policy referred to in Section 1.02, Interpublic has relied on written representations made by Executive concerning Executive's age and the state of Executive's health. If said representations are untrue in any material respect, whether directly or by omission, and if the Corporation is damaged by any such untrue representations, no sum shall be payable pursuant to Sections 1.03, 1.04, 1.05, 1.06, 2.01, 2.02 or 2.03. 1.10 It is expressly agreed that Interpublic or its assignee (other than Executive) shall at all times be the sole and complete owner and beneficiary of the life insurance policy referred to in Sections 1.02 and 1.09, shall have the unrestricted right to use all amounts and exercise all options and privileges thereunder without the knowledge or consent of Executive or Executive's designated beneficiary or any other person and that neither Executive nor Executive's designated beneficiary nor any other person shall have any right, title or interest, legal or equitable, whatsoever in or to such policy. ARTICLE II ---------- Alternative Deferred Compensation --------------------------------- 2.01 If Executive shall, for any reason other than death, cease to be employed by the Corporation on a date prior to Executive's fifty -fifth birthday, the Corporation shall, in lieu of any payment pursuant to Article I of this Agreement, c ompensate Executive by payment, at the times and in the manner specified in Section 2.02, of a sum computed at the rate of One Hundred Thousand Dollars ($100,000) per annum for each full year and proportionate amount for any part year from the date of this Agreement to the date of such termination during which Executive is in the employ of the Corporation with a maximum payment of - 85 - One Hundred Thousand Dollars ($100,000). Such payment shall be conditional upon Executive's compliance with all the ter ms and conditions of this Agreement. 2.02 The aggregate compensation payable under Section 2.01 shall be paid in equal consecutive monthly installments commencing with the first month in which Executive is no longer in the employ of the Corporation and continuing for a number of months equal to the number of months which have elapsed from the date of this Agreement to the commencement date of such payments, up to a maximum of seventy-two (72) months. 2.03 If Executive dies while receiving payments in accordance with the provisions of Section 2.02, any installments payable in accordance with the provisions of Section 2.02 less any amounts previously paid Executive in accordance therewith, shall be paid to the Executor of the Will or the Administrator of the Estate of Executive. 2.04 It is understood that none of the payments made in accordance with this Agreement shall be considered for purposes of determining benefits under the Interpublic Pension Plan, nor shall such sums be entitled to credits equivalent to interest under the Plan for Credits Equivalent to Interest on Balances of Deferred Compensation Owing under Employment Agreements adopted effective as of January 1, 1974 by Interpublic. ARTICLE III ----------- Non-solicitation of Clients or Employees ---------------------------------------- 3.01 Following the termination of Executive's employment hereunder for any reason, Executive shall not for a period of twelve months either (a) solicit any employee of the Corporation to leave such employ to enter the employ of Executive or of any corporation or enterprise with which Executive is then associated or (b) solicit or handle on Executive's own behalf or on behalf of any other person, firm or corporation, the advertising, public relations, sales promotion or market research business of any advertiser which is a client of the Corporation at the time of such termination. ARTICLE IV ---------- Assignment ---------- 4.01 This Agreement shall be binding upon and inure to the benefit of the successors and assigns of Interpublic. Neither this Agreement nor any rights hereunder shall be subject in any matter to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge by Executive, and any such attempted action by Executive shall be void. This Agreement may not be changed orally, nor may this Agreement be amended to increase the amount of any benefits that are payable pursuant to this Agreement or to accelerate the payment of any such benefits. ARTICLE V --------- Contractual Nature of Obligation -------------------------------- 5.01 The liabilities of the Corporation to Executive pursuant to this Agreement shall be those of a debtor pursuant to such contractual obligations as are created by the Agreement. Executive's rights with respect to any benefit to which Executive has become entitled under this Agreement, but which Executive has not yet received, shall be solely the rights of a general unsecured creditor of the Corporation. - 86 -  ARTICLE VI ---------- Applicable Law -------------- 6.01 This Agreement shall be governed by and construed in accordance with the laws of the State of New York. THE INTERPUBLIC GROUP OF COMPANIES, INC. By /s/ C. KENT KROEBER ---------------------------------------- C. KENT KROEBER /s/ BRUCE NELSON ---------------------------------------- BRUCE NELSON - 87 - Exhibit 10(b)(v)(c) SUPPLEMENTAL AGREEMENT ---------------------- SUPPLEMENTAL AGREEMENT made as of September 1, 2000 by and between THE INTERPUBLIC GROUP OF COMPANIES, INC., a corporation of the State of Delaware (hereinafter referred to as "Interpublic"), and BRUCE NELSON (hereinafter referred to as "Executive"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, Interpublic and Executive are parties to an Executive Special Benefit Agreement made as of January 1, 1986 (hereinafter referred to as the "Agreement"); and WHEREAS, Interpublic and Executive desire to amend the Agreement; NOW, THEREFORE, in consideration of the mutual promises herein and in the Agreement set forth, the parties hereto, intending to be legally bound, agree as follows: 1. Section 1.03 of the Agreement is hereby amended, effective as of September 1, 2000, so as to delete "survivor income payments of One Hundred and Fifty Thousand Dollars ($150,000) per annum for fifteen years following Executive's death, such payments to be made on January 15 of each of the fifteen years beginning with the year following the year in which Executive dies" and substitute, "survivor income payments of Two Hundred and Eighty Thousand Dollars ($280,000) per annum for fifteen years in monthly installments beginning with the 15th of the calendar month following Executive's death and in equal monthly installments". 2. Section 1.04 of the Agreement is hereby amended, effective as of September 1, 2000 so as to delete "per annum for fifteen years beginning with the calendar month following Executive's last day of employment, such payments to be made in equal monthly installments" and substitute, "per annum for fifteen years in monthly installments beginning with the 15th of the calendar month following Executive's last day of employment and in equal monthly installments". 3. Section 1.05 of the Agreement is hereby amended, effective as of September 1, 2000 so as to delete "Executive's forty-ninth birthday", and substitute "Executive's fiftieth birthday but prior to Executive's sixtieth birthday" and add "Executive shall receive certain supplementary retirement benefits at the following rates. Increased benefit amounts apply if Executive remains employed at least until age 55". Last Day of Employment Annual Rate ---------------------- -------- On or after 49th birthday but prior to 50th birthday $150,000 On or after 50th birthday but prior to 51st birthday $156,000 On or after 51st birthday but prior to 52nd birthday $162,000 On or after 52nd birthday but prior to 53rd birthday $168,000 On or after 53rd birthday but prior to 54th birthday $174,000 On or after 54th birthday but prior to 55th birthday $180,000 On or after 55th birthday but prior to 56th birthday $219,280 On or after 56th birthday but prior to 57th birthday $232,960 On or after 57th birthday but prior to 58th birthday $246,640 On or after 58th birthday but prior to 59th birthday $260,320 On or after 59th birthday but prior to 60th birthday $270,160 4. Section 2.01 of the Agreement is hereby amended, effective as of September 1, 2000 so as to delete "If Executive shall, for any reason other than death, cease to be employed by the Corporation on a date prior to November 3, - 88 - 1995, the Corporation shall, in lieu of any payment pursuant to Article I of this Agreement, compensate Executive by payment, at the times and in the manner specified in Section 2.02, of a sum computed at the rate of Fifty Thousand Dollars ($50,000)" and substitute "If Executive leaves the employ of the Corporation for any reason other than death, he will be paid, the vested benefit". 5. This Supplemental Agreement shall be governed by the laws of the State of New York. Except as hereinabove amended, the Agreement shall continue in full force and effect. THE INTERPUBLIC GRO UP OF COMPANIES, INC. By: /s/ C. KENT KROEBER ---------------------------------------- C. KENT KROEBER /s/ BRUCE NELSON ---------------------------------------- BRUCE NELSON - 89 - Exhibit 10(b)(vi)(a) EMPLOYMENT AGREEMENT -------------------- AGREEMENT made as of January 1, 2001 by and between THE INTERPUBLIC GROUP OF COMPANIES, INC., a Delaware corporation ("Interpublic" or the "Corporation"), and FRANK B. LOWE ("Executive"). In consideration of the mutual promises set forth herein the parties hereto agree as follows: ARTICLE I --------- Term of Employment ------------------ 1.01 Subject to the provisions of Article VII and Article VIII, and upon the terms and subject to the conditions set forth herein, the Corporation will employ Executive for the period beginning January 1, 2001 ("Commencement Date") and ending on December 31, 2005. (The period during which Executive is employed hereunder is referred to herein as the "term of employment.") Executive will serve the Corporation during the term of employment. ARTICLE II ---------- Duties ------ 2.01 During the term of employment, Executive will: (i) Serve as Chairman and Chief Executive Officer of The Lowe Group, Lowe Lintas Worldwide, and Octagon Worldwide, wholly-owned subsidiaries of Interpublic ("Lowe"). (ii) Use his best efforts to promote the interests of the Corporation and Lowe and devote his full business time and efforts to their business and affairs; (iii) Perform such duties as the Corporation may from time to time assign to him; (iv) Serve in such other offices of the Corporation and/or Lowe as he may be elected or appointed to; (v) No significant change in Executive's status or his nature or scope of his duties shall be effected without his consent; and (vi) Be proposed as a member of the Corporation's Board of Directors. ARTICLE III ----------- Regular Compensation -------------------- 3.01 The Corporation will compensate Executive for the duties performed by him hereunder, by payment of a base salary at the rate of One Million United States Dollars ($1,000,000) per annum, payable in equal installments, which the Corporation shall pay at semi-monthly intervals, subject to customary withholding for federal, state and local taxes. In addition, the Corporation will make a payment of Two Hundred Thousand United States Dollars ($200,000) per year pursuant to an Executive Special Benefit Agreement to be entered into between the Executive and Interpublic. In addition, the Executive Severance Agreement, dated January 1, 1998 between the Executive and the - 90 - Corporation ("ESA") will remain in full force and effect during the term of employment. 3.02 The Corporation may at any time increase the compensation paid to Executive under this Article III if the Corporation in its sole discretion shall deem it advisable so to do in order to compensate him fairly for services rendered to the Corporation. ARTICLE IV ---------- Bonuses ------- 4.01 Executive will be eligible during the term of employment to participate in the Management Incentive Compensation Plan ("MICP"), in accordance with the terms and conditions of the Plan established from time to time, and appropriate for an executive holding such a position. 4.02 As soon as administratively feasible after full execution of this Agreement, Interpublic will use its best efforts to have the Compensation Committee of its Board of Directors ("Committee") grant Executive an additional award for th e 2000-2002 performance period under Interpublic's Long Term Performance Incentive Plan ("LTPIP") equal to Two Thousand (2,000) performance units tied to the cumulative compound profit growth of Lowe Lintas and options under Interpublic's Stock Incentive Plan to purchase Twenty Thousand (20,000) shares of Interpublic common stock which may not be exercised in any part prior to the end of the performance period and thereafter shall be exercisable in whole or in part. 4.03 As soon as administratively feasible after full execution of this Agreement, Interpublic will use its best efforts to have the Committee grant Executive an award for the 2001-2004 performance period under the LTPIP equal to Eleven Thousand (11,000) performance units tied to the cumulative compound profit growth of Lowe Lintas and Three Thousand (3,000) units tied to his cumulative compound project growth of Octagon and options under Interpublic's Stock Incentive Plan to purchase Sixty-Five Thousand (65,000) shares of Interpublic common stock which may not be exercised in any part prior to the end of the performance period and thereafter shall be exercisable in whole or in part. 4.04 Executive has previously been granted an award under Interpublic's 1999-2002 LTPIP equal to Three Thousand (3,000) units tied to the cumulative compound profit growth of Octagon 2000. ARTICLE V --------- Interpublic Stock ----------------- 5.01 As soon as administratively feasible after full execution of this Agreement, Interpublic will use its best efforts to have the Compensation Committee of its Board of Directors ("Committee") grant to Executive One Hundred Thirty-Five Thousand (135,000) shares of Interpublic Common Stock which will be subject to a four year vesting restriction. 5.02 As soon as administratively feasible after full execution of this Agreement, Interpublic will use its best efforts to have the Committee grant to Executive options to purchase One Hundred Fifty Thousand (150,000) shares of Interpublic Common Stock, which will be subject to all the terms and conditions of the Interpublic Stock Incentive Plan. Forty percent (40%) of the options will be exercisable after the third anniversary of the date of grant, thirty percent (30%) will be exercisable after the fourth anniversary and thir ty percent (30%) will be exercisable after the fifth anniversary of the date of grant through the tenth anniversary of the date of grant. - 91 -  ARTICLE VI ---------- Other Employment Benefits ------------------------- 6.01 Executive shall be eligible to participate in such other employee benefits as are available from time to time to other key management executives of Interpublic in accordance with the then-current terms and conditions established by Interpublic for eligibility and employee contributions required for participation in such benefits opportunities. 6.02 Executive shall be entitled to an automobile allowance of Ten Thousand Dollars ($10,000) per annum. 6.03 Executive shall remain a member of the Interpublic Development Council. ARTICLE VII ----------- Termination ----------- 7.01 The Corporation may terminate the employment of Executive hereunder: (i) By giving Executive notice in writing at any time specifying a termination date not less than twelve (12) months after the date on which such notice is given, in which event Executive's employment hereunder shall terminate on the date specified in such notice, or (ii) By giving Executive notice in writing at any time specifying a termination date less than twelve (12) months after the date on which such notice is given. In this event Executive's employment hereunder shall terminate on the date specified in such notice and the Corporation shall thereafter pay him a sum equal to the amount by which twelve (12) months salary at his then current rate exceeds the salary paid to him for the period from the date on which such notice is given to the termination date specified in such notice. Such payment shall be made during the period immediately following the termination date specified in such notice, in successive equal monthly installments each of which shall be equal to one (1) month's salary at the rate in effect at the time of such termination, with any residue in respect of a period less than one (1) month to be paid together with the last installment. During the termination period provided in subsection (i), or in the case of a termination under subsection (ii) providing for a termination period of less than twelve (12) months, for a period of twelve (12) months after the termination notice, Executive will be entitled to receive all employee benefits accorded to him prior to termination which are made available to employees generally; provided, that such benefits shall cease upon such date that Executive accepts employment with another employer offering similar benefits. In addition, in the event of a termination pursuant to subsection (i) or (ii), Executive will be entitled to a pro-rata portion of his LTPIP entitlements, restricted stock grants and stock option grants. Such pro-ration shall be in accordance with Interpublic's standard policies and practices in such cases. 7.02 Notwithstanding the provisions of Section 7.01, during the period of notice of termination, Executive will use reasonable, good faith efforts to obtain other employment reasonably comparable to his employment under this Agreement. Upon obtaining other employment (including work as a consultant, independent contractor or establishing his own business), Executive will promptly notify the Corporation, and (a) in the event that Executive's salary and other non -contingent compensation ("new compensation") payable to Executive in connection with his new employment shall equal or exceed the salary portion - 92 - of the amount payable by the Corporation under Section 7.01, the Corporation shall be reli eved of any obligation to make payments under Section 7.01, or (b) in the event Executive's new compensation shall be less than the salary portion of payments to be made under Section 7.01, the Corporation will pay Executive the difference between such payments and the new compensation. 7.03 Executive may at any time give notice in writing to the Corporation specifying a termination date not less than twelve (12) months after the date on which such notice is given, in which event his employment hereunder shall terminate on the date specified in such notice, and Executive shall receive his salary until the termination date. 7.04 Notwithstanding the provisions of Section 7.01, the Corporation may terminate the employment of Executive hereunder, at any time after the Commencement Date, for Cause. For purposes of this Agreement, "Cause" means the following: (i) Any material breach by Executive of any provision of this Agreement (including without limitation Sections 8.01 and 8.02 hereof) upon notice of same by the Corporation which breach, if capable of being cured, has not been cured within fifteen (15) days after such notice (it being understood and agreed that a breach of Section 8.01 or 8.02 hereof, among others, shall be deemed not capable of being cured); (ii) Executive's absence from duty for a period of time exceeding fifteen (15) consecutive business days or twenty (20) out of any thirty (30) consecutive business days (other than on account of permitted vacation or as permitted for illness, disability or authorized leave in accordance with Interpublic's policies and procedures) without the consent of the Board of Directors of the Corporation; (iii) The acceptance by Executive, prior to the effecti ve date of Executive's voluntary resignation from employment with the Corporation, of a position with another employer, without the consent of the Board of Directors; (iv) Misappropriation by Executive of funds or property of the Corporation or any attempt by Executive to secure any personal profit related to the business of the Corporation (other than as permitted by this Agreement) and not fairly disclosed to and approved by the Board of Directors; (v) Fraud, dishonesty, disloyalty, gross negligence or willful misconduct on the part of Executive in the performance of his duties as an employee of the Corporation; (vi) A felony conviction of Executive; or (vii) Executive's engaging, during the term of employment, in activities which are prohibited by state and/or federal laws prohibiting discrimination based on age, sex, race, religion or national origin, or engaging in conduct which is constituted as sexual harassment. Upon a termination for Cause, the Corporation shall pay Executive his salary through the date of termination of employment, and Executive shall not be entitled to any Special Bonus or Performance Bonus with respect to the year of termination, or to any other payments hereunder. 7.05 If Executive dies before D ecember 31, 2005, his employment hereunder shall terminate on the date of his death. - 93 -  ARTICLE VIII ------------ Covenants --------- 8.01 While Executive is employed hereunder by the Corporation he shall not, without the prior written consent of the Corporation, which will not be unreasonably withheld, engage, directly or indirectly, in any other trade, business or employment, or have any interest, direct or indirect, in any other business, firm or corporation; provided, however, that he may continue to own or may hereafter acquire any securities of any class of any publicly-owned company as well as investments in other entities that are held for investment purposes only provided that such entities are not in competition with the Corporation and that investment in such entities does not create a conflict of interest on his part of Executive. 8.02 Executive shall treat as confidential and keep secret the affairs of the Corporation and shall not at any time during the term of employment or thereafter, without the prior written consent of the Corporation, divulge, furnish or make known or accessible to, or use for the benefit of, anyone other than the Corporation and its subsidiaries and affiliates any information of a confidential nature relating in any way to the business of the Corporation or its subsidiaries or affiliates or their clients and obtained by him in the course of his employment hereunder. 8.03 All records, papers and documents kept or made by Executive relating to the business of the Corporation or its subsidiaries or affiliates or their clients shall be and remain the property of the Corporation. 8.04 All articles invented by Executive, processes discovered by him, trademarks, designs, advertising copy and art work, display and promotion materials and, in general, everything of value conceived or created by him pertaining to the business of the Corporation or any of its subsidiaries or affiliates during the term of employment, and any and all rights of every nature whatever thereto and which are not in the public domain, shall immediately become the property of the Corporation, and Executive will assign, transfer and deliver all patents, copyrights, royalties, designs and copy, and any and all interests and rights whatever thereto and thereunder to the Corporation. 8.05 Following the termination of Executive's employment hereunder for any reason, Executive shall not for a period of two (2) years from such termination, (a) solicit any employee of the Corporation, Interpublic or any affiliated company of Interpublic to leave such employ to enter the employ of Executive or of any person, firm or corporation with which Executive is then associated or (b) solicit or handle on Executive's own behalf or on behalf of any other person, firm or corporation, the event marketing, public relations, advertising, sales promotion or market research business of any person or entity which is a client of the Corporation at the time of termination of employment. 8.06 If at the time of enforcement of any provision of this Agreement, a court shall hold that the duration, scope or area restriction of any provision hereof is unreasonable under circumstances now or then existing, the parties hereto agree that the maximum duration, scope or area reasonable under the circumstances shall be substituted by the court for the stated duration, scope or area. 8.07 Executive acknowledges that a remedy at law for any breach or attempted breach of Article VIII of this Agreement will be inadequate, and agrees that the Corporation shall be entitled to specific performance and injunctive and other equitable relief in the case of any such breach or attempted breach. 8.08 Executive represents and warrants that neither the execution and delivery of this Employment Agreement nor the performance of Executive's services hereunder will conflict with, or result in a breach of, any agreement to which Executive is a party or by which he may be bound or affected, in - 94 - particular the terms of any employment agreement to which Executive may be a party. Executive further represents and warrants that he has full right, power and authority to enter into and carry out the provisions of this Employment Agreement. ARTICLE IX ---------- Arbitration ----------- 9.01 Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, including claims involving alleged legally protected rights, such as claims for age discrimination in violation of the Age Discrimination in Employment Act of 1967, as amended, Title VII of the Civil Rights Act, as amended, and all other federal and state law claims for defamation, breach of contract, wrongful termination and any other claim arising because of Ex ecutive's employment, termination of employment or otherwise, shall be settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association and Section 12.01 hereof, and judgement upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. The arbitration shall take place in any of the cities where Executive customarily renders services to the Corporation. The prevailing party in any such arbitration shall be entitled to receive attorney's fees and costs. ARTICLE X --------- Assignment ---------- 10.01 This Agreement shall be binding upon and enure to the benefit of the successors and assigns of the Corporation. Neither this Agreement nor any rights hereunder shall be assignable by Executive and any such purported assignment by him shall be void. ARTICLE XI ---------- Agreement Entire ---------------- 11.01 This Agreement (and the ESA) constitutes the entire understanding between the Corporation and Executive concerning his employment by the Corporation or any of its parents, affiliates or subsidiaries and supersedes any and all p revious agreements between Executive and the Corporation or any of its parents, affiliates or subsidiaries concerning such employment, and/or any compensation or bonuses. Each party hereto shall pay its own costs and expenses (including legal fees) incurred in connection with the preparation, negotiation and execution of this Agreement. This Agreement may not be changed orally. - 95 -  ARTICLE XII ----------- Applicable Law -------------- 12.01 The Agreement shall be governed by and construed in accordance with the laws of the State of New York. THE INTERPUBLIC GROUP OF COMPANIES, INC. By /s/ C. KENT KROEBER ---------------------------------------- Name: C. KENT KROEBER Title: Senior Vice President, Human Resources /s/ FRANK B. LOWE ---------------------------------------- FRANK B. LOWE - 96 - Exhibit 10(b)(vi)(b) SUPPLEMENTAL AGREEMENT ---------------------- SUPPLEMENTAL AGREEMENT made as of January 2, 2001 between THE INTERPUBLIC GROUP OF COMPANIES, INC., a Delaware corporation ("Interpublic") and FRANK B. LOWE ("Executive"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, Interpublic and Executive are parties to an Employment Agreement made as of January 1, 2001 (hereinafter referred to as the "Agreement"); and WHEREAS, Interpublic and Executive desire to amend the Agreement; NOW, THEREFORE, in consideration of the mutual promises herein and in the Agreement set forth, the parties hereto, intending to be legally bound, agree as follows: 1. Paragraph 2.01(v) of the Agreement is hereby deleted i n its entirety, effective as of the date hereof, and substituting therefor: "Both parties agree and understand that certain changes are being considered to the organization which may involve modifications to Executive's titles and responsibilities. If any of Executive's current titles and/or responsibilities are changed by the Corporation in any material way without Executive's consent, Executive's exclusive remedy shall be, at his option, to terminate this Agreement upon written notice to the Corporation within thirty (30) days of such change in title and/or responsibilities. In such event, the Executive shall be entitled to receive severance in accordance with the provisions of Section 7.03 from the date of such notice of termination." Except as hereinabove amended, the Agreement shall continue in full force and effect. This Supplemental Agreement shall be governed by the laws of the State of New York, applicable to contracts made and fully to be performed therein. THE INTERPUBLIC GROUP OF COMPANIES, INC. By /s/ C. KENT KROEBER ---------------------------------------- C. KENT KROEBER /s/ FRANK B. LOWE ---------------------------------------- FRANK B. LOWE - 97 - Exhibit 10(b)(vi)(c) EXECUTIVE SPECIAL BENEFIT AGREEMENT ----------------------------------- AGREEMENT made as of January 15, 2001, by and between THE INTERPUBLIC GROUP OF COMPANIES, INC., a corporation of the State of Delaware (hereinafter referred to as "Interpublic") and FRANK LOWE (hereinafter referred to as "Executive"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, Executive is in the employ of Interpublic and/or one or more of its subsidiaries (Interpublic and its subsidiaries being hereinafter referred to collectively as the "Corporation"); and WHEREAS, Interpublic and Executive desire to enter into an Executive Special Benefit Agreement which shall be supplementary to any employment agreement or arrangement which Executive now or hereinafter may have with respect to Executive's employment by Interpublic or any of its subsidiaries; NOW, THEREFORE, in consideration of the mutual promises herein set forth, the parties hereto, intending to be legally bound, agree as follows: ARTICLE I --------- Death and Special Retirement Benefits ------------------------------------- 1.01 For purposes of this Agreement the "Accrual Term" shall mean the period of seventy -two (72) months beginning on the date of this Agreement and ending on the day preceding the sixth anniversary hereof or on such earlier date on which Executive shall cease to be in the employ of the Corporation. 1.02 The Corporation shall provide Executive with the following benefits contingent upon Executive's compliance with all the terms and conditions of this Agreement and Executive's satisfactory completion of a physical examination in connection with an insurance policy on the life of Executive which Interpublic or its assignee (other than Executive) proposes to obtain and own. 1.03 If, during the Accrual Term or thereafter during a period of employment by the Corporation which is continuous from the date of this Agreement, Executive shall die while in the employ of the Corporation, the Corporation shall pay to such beneficiary or beneficiaries as Executive shall have designated pursuant to Section 1.07 (or in the absence of such designation, shall pay to the Executor of the Will or the Administrator of the Estate of Executive) survivor income payments of One Hundred Eighty One Thousand Four Hundred and Ninety Five Dollars ($181,495) per annum for fifteen (15) years in monthly installments beginning with the 15th of the calendar month following Executive's death, and in equal monthly installment thereafter. 1.04 If, after a continuous period of employment from the date of this Agreement, Executive shall retire from the employ of the Corporation so that the first day on which Executive is no longer in the employ of the Corporation occurs on or after Executive's sixty-fourth birthday, the Corporation shall pay to Executive special retirement benefits at the rate of One Hundred Eighty One Thousand Four Hundred and Ninety Five Dollars ($181,495) per annum for fifteen (15) years in monthly installments beginning with the 15th of the calendar month following Executive's last day of employment, and in equal monthly installments thereafter. - 98 -  1.05 If, after a continuous period of employment from the date of this Agreement, Executive shall retire, resign, or be terminated from the employ of the Corporation so that the first day on which Executive is no longer in the employ of the Corporation occurs on or after Executive's sixtieth birthday but prior to Executive's sixty -fourth birthday, the Corporation shall pay to Executive special retirement benefits at the annual rates set forth below for fifteen years beginning with the calendar month following Executive's last day of employment, such payments to be made in equal monthly installments: Last Day of Employment Annual Rate ---------------------- ----------- On or after 60th birthday but prior to 61st birthday $80,648 On or after 61st birthday but prior to 62nd birthday $100,016 On or after 62nd birthday but prior to 63rd birthday $127,443 On or after 63rd birthday but prior to 64th birthday $154,606 1.06 If, following such termination of employment, Executive shall die before payment of all of the installments provided for in Section 1.04 or Section 1.05, any remaining installments shall be paid to such beneficiary or beneficiary or beneficiaries as Executive shall have designated pursuant to Section 1.07 or, in the absence of such designation, to the Executor of the Will of the Administrator of the Estate of Executive. 1.07 For purposes of Sections 1.03 and 1.04 and 1.05, or any of them, Executive may at any time designate a beneficiary or beneficiaries by filing with the chief personnel officer of Interpublic a Beneficiary Designation Form provided by such officer. Executive may at any time, by filing a new Beneficiary Designation Form, revoke or change any prior designation of beneficiary. 1.08 If Executive shall die while in the employ of the Corporation, no sum shall be payable pursuant to Sections 1.04, 1.05, 1.06. 1.09 In connection with the life insurance policy referred to in Section 1.02, Interpublic has relied on written representations made by Executive concerning Executive's age and the state of Executive's health. If said represen tations are untrue in any material respect, whether directly or by omission, and if the Corporation is damaged by any such untrue representations, no sum shall be payable pursuant to Sections 1.03, 1.04, 1.05, 1.06 1.10 It is expressly agreed that Interpublic or its assignee (other than Executive) shall at all times be the sole and complete owner and beneficiary of the life insurance policy referred to in Sections 1.02 and 1.09, shall have th e unrestricted right to use all amounts and exercise all options and privileges thereunder without the knowledge or consent of Executive or Executive's designated beneficiary or any other person and that neither Executive nor Executive's designated beneficiary nor any other person shall have any right, title or interest, legal or equitable, whatsoever in or to such policy. 1.11 It is expressly agreed that if Executive should become permanently disabled at any time prior to the end of the Accrual Term, the Corporation shall provide Executive with a maximum benefit payment of Five Hundred Thousand Dollars ($500,000) per year for a period of fifteen (15) years. The term "Permanent Disability" shall mean a determination that Executive is permanently unable to perform the ordinary responsibilities of his position following an absence from work of sixty (60) consecutive days as a result of illness, injury or incapacity. The determination of Disability shall be subject to verification by the Corporation. The foregoing disability payment incorporates all amounts to which Executive is entitled under the ESBA Agreements between the Executive and the Corporation dated January 1, 1991 and January 1, 1996. 1.12 It is agreed upon that should Executive become Disabled as defined above, the Corporation has the right to appoint a Doctor to examine Executive for purposes in verifying Executive's disability. - 99 -  ARTICLE II ---------- Non-solicitation of Clients or Employees ---------------------------------------- 2.01 Following the termination of Executive's employment hereunder for any reason, Executive shall not for a period of twelve months either (a) solicit any employee of the Corporation to leave such employ to enter the employ of Executive or of any corporation or enterprise with which Executive is then associated or (b) solicit or handle on Executive's own behalf or on behalf of any other person, firm or corporation, the advertising, public relations, sales promotion or market research business of any advertiser which is a client of the Corporation at the time of such termination. ARTICLE III ----------- Assignment ---------- 3.01 This Agreement shall be binding upon and inure to the benefit of the successors and assigns of Interpublic. Neither this Agreement nor any rights hereunder shall be subject in any matter to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge by Executive, and any such attempted action by Executive shall be void. This Agreement may not be changed orally, nor may this Agreement be amended to increase the amount of any benefits that are payable pursuant to this Agreement or to accelerate the payment of any such benefits. ARTICLE IV ---------- Contractual Nature of Obligation -------------------------------- 4.01 The liabilities of the Corporation to Executive pursuant to this Agreement shall be those of a debtor pursuant to such contractual obligations as are created by the Agreement. Executive's rights with respect to any benefit to which Executive has become entitled under this Agreement, but which Executive has not yet received, shall be solely the rights of a general unsecured creditor of the Corporation. ARTICLE V --------- Applicable Law -------------- 5.01 This Agreement shall be governed by and construed in accordance with the laws of the State of New York. THE INTERPUBLIC GROUP OF COMPANIES, INC. By /s/ C. KENT KROEBER ---------------------------------------- Name: C. KENT KROEBER Title: Senior Vice President, Human Resources /s/ FRANK LOWE ---------------------------------------- FRANK LOWE - 100 - Exhibit 11 THE INTERPUBLIC GROUP OF COMPANIES, INC. COMPUTATION OF EARNINGS PER SHARE (Dollars in Thousands Except Per Share Data) Year Ended December 31 2000 1999 1998 1997 1996 ------------------------------------------------------------------- BASIC: Net income $358,658 $331,287 $339,907 $224,184 $228,914 Weighted average number of common shares outstanding 303,191,966 297,992,048 294,755,783 283,795,670 284,219,045 Net income per share - Basic $1.18 $1.11 $1.15 $ .79 $ .81 DILUTED: Net income $358,658 $331,287 $339,907 $224,184 $228,914 After tax interest savings on assumed conversion of subordinated debentures(1)(2) -- -- -- 5,929 6,410 Add: Dividends paid net of related income tax applicable to the Restricted Stock Plan 666 631 541 447 384 ------------------------------------------------------------------- Net income, as adjusted $359,324 $331,918 $340,448 $230,560 $235,708 =================================================================== Weighted average number of common shares outstanding 303,191,966 297,992,048 294,755,783 283,795,670 284,219,045 Assumed conversion of subordinated debentures(1)(2) -- -- -- 8,020,582 8,933,004 Weighted average number of incremental shares in connection with assumed exercise of stock options 6,110,212 7,310,725 6,924,013 6,508,296 4,438,746 Weighted average number of incremental shares in connection with the Restricted Stock Plan 3,350,631 3,536,805 3,453,838 3,277,294 3,211,128 ------------------------------------------------------------------- Total 312,652,809 308,839,578 305,133,634 301,601,842 300,801,923 =================================================================== Diluted earnings per share data: Net income per share - diluted $1.15 $1.07 $1.12 $ .76 $ .78 All share data for prior periods have been adjusted the two -for-one stock split effective July 15, 1999. ----------------- (1) The computation of diluted EPS for 2000, 1999 and 1998 excludes the assumed conversion of the 1.87% and 1.80% Convertibl e Subordinated Notes due 2006 and 2004, respectively, because they were antidilutive. (2) The computation of diluted EPS for 1997 and 1996 excludes the assumed conversion of the 1.80% Convertible Subordinated Notes due 2004 because they were antidilutive. - 101 -  THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Exhibit 13 During 2000, The Interpublic Group of Companies, Inc. (the "Company") acquired several companies in transactions accounted for as poolings of interests. The Company acquired NFO Worldwide, Inc. ("NFO") in April 2000 and Deutsch, Inc. and its affiliate companies ("Deutsch") in November 2000. The results of NFO, Deutsch and other acquisitions, all of which have been accounted for as poolings of interests, have been included in the Company's financial statements for all prior periods. The following discussion relates to the combined results of the Company after giving effect to all of the pooled companies. For the purposes of the following discussion, the restructuring and other merger related costs (in 2000 and 1999) and the Deutsch transaction costs (in 2000) will be referred to, collectively, as "non-recurring items". The non -recurring items are described in a subsequent section of this discussion. All amounts discussed bel ow are as reported unless otherwise noted. RESULTS OF OPERATIONS The Company reported net income of $358.7 million or $1.15 diluted earnings per share for the year ended December 31, 2000. Excluding the impact of non-recurring items in all years, net income would have been $473.2 million or $1.51 diluted earnings per share, compared to $382.7 million or $1.24 diluted earnings per share for the year ended December 31, 1999 and $339.9 million or $1.12 diluted earnings per share for th e year ended December 31, 1998. The following table sets forth net income and earnings per share as reported and before non-recurring items: (Dollars in thousands, except per share amounts) 2000 1999 1998 ---- ---- ---- Net income as reported $ 358,658 $ 331,287 $ 339,907 Earnings per share Basic $ 1.18 $ 1.11 $ 1.15 Diluted $ 1.15 $ 1.07 $ 1.12 Net income before non-recurring items $ 473,185 $ 382,724 $ 339,907 Earnings per share Basic $ 1.56 $ 1.28 $ 1.15 Diluted $ 1.51 $ 1.24 $ 1.12 Revenue ------- Worldwide revenue for 2000 was $5.6 billion, an increase of $648 million or 13.0% over 1999. Domestic revenue, which represented 54.6% of worldwide revenue in 2000, increased $514 million or 20.1% over 1999. International revenue, which represented 45.4% of worldwide revenue in 2000, increased $134 million or 5.6% over 1999. International revenue would have increased 15% excluding the effect of the strengthening of the U.S. dollar against major currencies. The increase in worldwide revenue is a result of both growth from new business gains and - 102 - growth from acquisitions. Exclusive of acquisitions, worldwide revenue on a constant dollar basis increased 13.0% over 1999. Revenue from specialized marketing and communication services, which include media buying, market research, relationship (direct) marketing, public relations, sports and event marketing, healthcare marketing and e-consultancy and services, comprised approximately 47% of total worldwide revenue in 2000, compared to 44% in 1999. Worldwide revenue for 1999 was $5.0 billion, an increase of $759 million or 18.0% over 1998. Domestic revenue, which represented 51.4% of worldwide revenue, increased $401 million or 18.6% over 1998. International revenue, which represented 4 8.6% of worldwide revenue in 1999, increased $358 million or 17.4% over 1998. International revenue would have increased 22% excluding the effect of the strengthening of the U.S. dollar against major currencies. Operating Expenses ------------------ Worldwide operating expenses for 2000, excluding non-recurring items, were $4.8 billion, an increase of 11.0% over 1999. Operating expenses outside the United States increased 3.7%, while domestic operating expenses increased 18.3%. These increases were commensurate with the increases in revenue. Worldwide operating expenses for 1999, excluding non-recurring items, were $4.3 billion, an increase of 18.4% over 1998, comprised of a 16.7% increase in international expenses and a 20.0% increase in domestic expenses. Significant portions of the Company's expenses relate to employee compensation and various employee incentive and benefit programs. The employee incentive programs are based primarily upon operating results. Salaries and related expenses were $3.1 billion in 2000 or 55.5% of revenue as compared to $2.7 billion in 1999 or 55.2% of revenue and $2.3 billion in 1998 or 55.4% of revenue. The year over year dollar increase is a result of growth from acquisitions and new business gains. Office and general expenses were $1.6 billion in 2000, $1.5 billion in 1999, and $1.2 billion in 1998. The year over year increase is a result of the continued growth of the Company. In the fourth quarter of 1999, NFO recorded special charges of $22 million as a result of the difficult competitive environment due to client consolidation in the financial services industry. Approximately $16 million of the special charges were related to the write -off of intangible assets which were deemed permanently impaired. Income from Operations ---------------------- Income from operations for 2000 was $672.7 million. Excluding non -recurring items, income from operations for 2000 was $833.5 million, an increase of $170.8 million or 25.8% over 1999. Exclusive of acquisitions, foreign exchange fluctuations and amortization of intangible assets, income from operations increased 25% for 2000 compared to 1999. Income from operations for 1999 was $578.5 million. Excluding non -recurring items, income from operations for 1999 was $662.7 million compared to $572.6 million in 1998, an increase of 15.7%. The increase is a result of growth from acquisitions and new business gains. Restructuring and Other Merger Related Costs -------------------------------------------- During 2000, the Company recorded pre-tax restructuring and other merger related costs of $116.1 million ($72.9 million net of tax). Of the total pre-tax restructuring and other merger-related costs, cash charges represented $84 million. The key components of the charge were the costs associated with the restructuring of Lowe Lintas & Partners Worldwide. The remaining costs r elate principally to transaction and other merger related costs arising from the acquisition of NFO. - 103 - In October 1999, the Company announced the merger of two of its advertising networks. The networks affected, Lowe & Partners Worldwide and Ammirati Puris Lintas were combined to form a new agency network called Lowe Lintas & Partners Worldwide. The merger involved the consolidation of operations in Lowe Lintas agencies in approximately 24 cities in 22 countries around the world. As of September 30, 2000, all restructuring activities had been completed. A summary of the components of the reserve for restructuring and other merger related costs for Lowe Lintas is as follows: (Dollars in millions) Year to Date December 31, 2000 ------------------------------------------------------ Balance Expense Cash Asset Balance at 12/31/99 recognized Paid Write-offs Reclassifications at 12/31/00 ----------- ---------- ---- ---------- ----------------- ----------- Severance and termination costs $43.6 $32.0 $(46.7) $ -- $(17.2) $11.7 Fixed asset write-offs 11.1 14.2 -- (25.3) -- -- Lease termination costs 3.8 21.1 (10.1) -- -- 14.8 Investment write-offs and other 23.4 20.5 (6.4) (37.5) -- -- -------------------------------------------------------------------------- Total $81.9 $87.8 $(63.2) $(62.8) $(17.2) $26.5 ========================================================================== The severance and termination costs recorded in 2000 relate to approximately 360 employees who have been terminated or notified that they will be terminated. The remaining severance and termination amounts will be paid in 2001. The employee groups affect ed include management, administrative, account management, creative and media production personnel, principally in the U.S. and several European countries. Included in severance and termination costs is an amount of $17.2 million related to non-cash charges for stock options which has been reclassified to additional paid in capital. The fixed asset write-offs relate largely to the abandonment of leasehold improvements as part of the merger. The amount recognized in 2000 relat es to fixed asset write-offs in 4 offices, the largest of which is in the U.K. Lease termination costs relate to the offices vacated as part of the merger. The lease terminations have been completed, with the cash portion to be paid out over a p eriod of up to five years. The investment write-offs relate to the loss on sale or closing of certain business units. In 2000, $12.7 million has been recorded as a result of the decision to sell or abandon 3 businesses located in Asia and Europe. In the aggregate, the businesses being sold or abandoned represent an immaterial portion of the revenue and operations of Lowe Lintas & Partners. The write-off amount was computed based upon the difference between the estimated sales proceeds (if any) and the carrying value of the related assets. These sales or closures were completed in mid 2000. The Company has begun to benefit from the resulting reduction in employee related costs, compensation, benefits and space occupancy. A significant portion of the savings is being offset by investments in creative talent, technology and other capabilities to support the acceleration of growth in the future. In addition to the Lowe Lintas restructuring and other merger related costs noted above, additional charges, substantially all of which were cash costs, were recorded through September 30, 2000. These costs relate principally to the non-recurring transaction and ot her merger related costs arising from the acquisition of NFO. - 104 - Deutsch Transaction Costs ------------------------- In connection with the acquisition of Deutsch, the Company recognized a charge related to one-time transaction costs of $44.7 million ($41.6 million net of tax) . The principal component of this amount related to the expense associated with various equity participation agreements with certain members of management. These agreements provided for participants to receive a portion of the proceeds in the event of the sale or merger of Deutsch. Interest Expense ---------------- Interest expense was $109 million in 2000, $81 million in 1999 and $64 million in 1998. The increase in 2000 was attributable to higher debt levels and higher interest rates in 2000. Other Income, Net ----------------- Other income, net primarily consists of interest income, investment income and net gains from equity investments. Net equity gains were $40 million, $49 million and $44 million in 2000, 1999, and 1998, respectively. Other Items ----------- Income applicable to minority interests increased by $5.8 million in 2000 and by $5.5 million in 1999. The 2000 and 1999 increases were primarily due to the strong performance of companies that were not wholly owned, as well as the acquisition of additional such entities during 2000 and 1999. The Company's effective income tax rate was 41.5% in 2000, 40.6% in 1999 and 40.5% in 1998 (39.0% , 40.4% and 40.5% excluding non-recurring items). As described in Note 4, prior to its acquisition by the Company, Deutsch had elected to be treated as an "S" Corporation and accordingly, its income tax expense was lower than it would have been had Deutsch b een treated as a "C" Corporation. Deutsch became a "C" Corporation upon its acquisition by the Company. Assuming Deutsch had been a "C" Corporation since 1997, the effective tax rate, on a pro forma basis excluding non-recurring items, would have been 40.4%, 41.4% and 40.9% for 2000, 1999 and 1998, respectively. Cash Based Earnings ------------------- Management believes that cash based earnings are a relevant measure of financial performance as it illustrates the Company's performance and ability to support growth. The Company defines cash based earnings as net income excluding non-recurring items, adjusted to exclude amortization of intangible assets, net of tax where applicable. Cash based earnings are not calculated in the same manner by all companies and are intended to supplement, not replace, the other measures calculated in accordance with generally accepted accounting principles. Cash based earnings for the three years ending December 31, 2000, 1999, and 1998 were as follows: (Amounts in thousands except per share data) 2000 1999 1998 --------------------------------------- Net income as reported $358,658 $331,287 $339,907 Non-recurring items, net of tax 114,527 51,437 -- --------------------------------------- Net income, as adjusted 473,185 382,724 339,907 Add back amortization of intangible assets 112,478 99,326 61,396 Less related tax effect (14,411) (13,031) (6,146) --------------------------------------- Cash based earnings (as defined above) $571,252 $469,019 $395,157 ======================================= Per share amounts (diluted) $1.81 $1.51 $1.30 - 105 - LIQUIDITY AND CAPITAL RESOURCES The Company's financial position remained strong during 2000, with cash and cash equivalents at December 31, 2000, of $708.3 million. The ratio of current assets to current liabilities was approximately 1 to 1 at December 31, 2000. Working capital at December 31, 2000, was a negative $80 million, which was $251.0 million lower than the level at the end of 1999. Total debt at December 31, 2000 was $2.0 billion, an increase of $686 million from December 31, 1999. The increase in debt is primarily attributable to the net effect of payments made for acquisitions and other investments. On June 27, 2000, the Company entered into a syndicated multi-currency credit agreement under which a total of $750 million may be borrowed; $375 million may be borrowed under a 364-day facility and $375 million under a five -year facility. The facilities bear interest at variable rates based on either LIBOR or a bank's base rates, at the Company's option. As of December 31, 2000, approximately $174 million had been borrowed under the facilities. The weighted -average interest rate on the borrowings at December 31, 2000 was 6.5%. The proceeds from the syndicated credit agreement were used to refinance borrowings and for general corporate purposes including acquisitions and other investments. Some of the pre -existing borrowing facilities were subsequently terminated. On October 20, 2000, the Company completed the issuance and sale of $500 million principal amount of senior unsecured notes due 2005. The notes bear an interest rate of 7.875% per annum. The Company used the net proceeds of approximately $496 million from the sale of the notes to repay outstanding indebtedness under its credit facilities. Cash flow from operations and existing credit facilities, and refinancings thereof, have been the primary sources o f working capital and management believes that they will continue to be so in the future. Net cash provided by operating activities was $300 million, $737 million and $552 million for the years ended December 31, 2000, 1999, and 1998, respectively. The Company's working capital is used primarily to provide for the operating needs of its subsidiaries, which includes payments for space or time purchased from various media on behalf of clients. The Company's practice is to bill and collect from its clients in sufficient time to pay the amounts due for media on a timely basis. Other uses of working capital include the repurchase of the Company's common stock, payment of cash dividends, capital expenditures and acquisitions. The Company acquires shares of its stock on an ongoing basis. During 2000, the Company purchased approximately 4.8 million shares of its common stock, compared to 6.5 million shares in 1999. The Company repurchases its stock for the purpose of fulfilling its obligations under various compensation plans. The Company, excluding pooled entities, paid $109.1 million ($.37 per share) in dividends to stockholders in 2000, as compared to $90.4 million ($.33 per share) paid during 1999. The Company's capital expenditures in 2000 were $202 million compared to $187 million in 1999 and $160 million in 1998. The primary purposes of these expenditures were to upgrade computer and telecommunications systems to better serve clients and to moderniz e offices. During 2000, the Company paid approximately $1,582 million in cash and stock for new acquisitions, including a number of specialized marketing and communications services companies to complement its existing agency systems and to optimally position itself in the ever-broadening communications marketplace. This amount includes the value of stock issued for pooled companies. The Company and its subsidiaries maintain credit facilities in the United States and in countries where they conduct business to manage their future liquidity requirements. The Company's available credit facilities were approximately $1,300 million, of which $300 million were utilized at December 31, 2000, and - 106 - approximately $600 million, of which $100 million were utilized at December 31, 1999. Return on average stockholders' equity was 18.8% in 2000 and 20.7% in 1999. Excluding non-recurring items, return on average stockholders' equity was 23.5% in 2000 and 23.6% in 1999. As discussed in Note 12, revenue from international operations was 45.4%, 48.6% and 48.8% of worldwide revenue in 2000, 1999 and 1998, respectively. The Company continuously evaluates and attempts to mitigate its exposure to foreign exchange, economic and political risks. The notional value and fair value of all outstanding forwards and options contracts at the end of the year were not significant. The Company is not aware of any significant occurrences that could negatively impact its liquidity. However, should such a trend develop, the Company believes that there are sufficient funds available under its existing lines of credit and refinancings thereof, and from internal cash-generating capabilities to meet future needs. OTHER MATTERS True North Communications, Inc. ------------------------------- As discussed in Note 15, on March 19, 2001, the Company entered into an agreement to acquire True North Communications, Inc., a global provider of advertising and communication services. The acquisition, which will create an industry leading combination of advertising and marketing services capabilities to offer clients on a global basis, is expected to close mid year. New Accounting Pronouncements ----------------------------- Revenue Recognition ------------------- In December 1999, the Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" ("SAB 101"). SAB 101 provides guidance on the recognition, presentation, and disclosure of revenue in financial statements. SAB 101 was adopted by the Company effective January 1, 2000. The adoption of SAB 101 had no significant effect on the Company's operating results or financial position. Accounting for Derivatives Instruments and Hedging Activities ------------------------------------------------------------- In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133"), which had an initial adoption date by the Company of January 1, 2000. In June 1999, the FASB postponed the adoption date of SFAS 133 until January 1, 2001. The Company will adopt the provisions of SFAS 133 effective January 1, 2001 and believes its adoption of SFAS 133 will have no impact on its financial condition or results of operations. Equity Based Compensation ------------------------- In April 2000, the FASB issued Interpretation No. 44, ("FIN 44") Accounting for Certain Transactions Involving Stock Compensation - an interpretation of APB Opinion No. 25. This interpretation, which was effective from July 1, 2000, addressed various issues including the definition of employee for the purpose of applying APB 25, criteria for determining whether a plan qualifies as a non-compensatory plan, the accounting consequence of various modifications to the terms of a previously fixed stock option award and the accounting for an exchange of stock compensation awards in a business combination. The adoption of FIN 44 did not have a material impact on the Company's financial statements. - 107 - Conversion to the Euro ---------------------- On January 1, 1999, certain member countries of the European Union established fixed conversion rates between their existing currencies and the European Union's common currency (the "Euro"). The Company conducts business in m ember countries. The transition period for the introduction of the Euro will be between January 1, 1999, and June 30, 2002. The Company is addressing the issues involved with the introduction of the Euro. The major important issues facing the Company include: converting information technology systems, reassessing currency risk, negotiating and amending contracts and processing tax and accounting records. Based upon progress to date, the Company believes that use of the Euro will not have a significant impact on the manner in which it conducts its business affairs and processes its business and accounting records. Accordingly, conversion to the Euro has not, and is not expected to have a material effect on the Company's financial condition or results of operations. Quantitative and Qualitative Disclosures about Market Risk ---------------------------------------------------------- The Company's financial market risk arises from fluctuations in interest rates and foreign currencies. Most of the Company's debt obligations are at fixed interest rates. A 10% change in market interest rates would not have a material effect on the Company's pre-tax earnings, cash flows or fair value. At December 31, 2000, the Company had an insignificant amount of foreign currency derivative financial instruments in place. The Company does not hold any financial instrument for trading purposes. Interactive Assets ------------------ The Company maintains a portfolio of marketable securities and other interactive assets. The market value of these investments is subject to market volatility. The volatility, as it relates to the marketable securities, is reflected in unrealized gains and losses recorded in stockholders' equity. Management continually monitors the value of all of its investments to determine whether an "other than temporary" impairment has occurred. To the extent such an impairment occurs, provision would be made in the appropriate period. Cautionary Statement -------------------- This Report on Form 10-K (the "Report"), including Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. These statements are based on current plans, expectations, estimates and projections, and therefore undue reliance should not be placed on them. Forward-looking statements speak only as of the date they are made, and Interpublic undertakes no obligation to update publicly any of them in light of new information, future events or otherwise. Forward-looking statements involve inherent risks and uncertainties. The Company cautions that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Such factors include, but are not limited to, those associated with the effect of national and regional economic conditions, the ability of the Company to attract new clients and retain existing clients, the financial success and other developments of the clients of the Company, developments from changes in the regulatory and legal environment for advertising companies around the world, the Company's ability to effectively integrate recent acquisitions and the Company's ability to attract and retain key management personnel. - 108 -  REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Stockholders of The Interpublic Group of Companies, Inc. In our opinion, based on our audits and the reports of other auditors, the accompanying consolidated balance sheets and the related consolidated statements of income, of cash flows, and of stockholders' equity and comprehensive income present fairly, in all material respects, the financial position of The Interpublic Group of Companies, Inc. and its subsidiaries (the "Company") at December 31, 2000 and 1999, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2000 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audits. We did not audit the financial statements of NFO Worldwide, Inc. ("NFO"), a wholly-owned subsidiary, which statements reflect total assets constituting approximately 5% of the related 1999 consolidated financial st atement total. Additionally, we did not audit the financial statements of Deutsch, Inc. and Subsidiary and Affiliates ("Deutsch"), a wholly-owned subsidiary, which statements reflect total net loss constituting approximately 2% of the related 2000 consolidated financial statement total and total net income constituting approximately 5% of the related 1999 consolidated financial statement total. Those statements were audited by other auditors whose reports thereon have been furnished t o us, and our opinion expressed herein, insofar as it relates to the amounts included for NFO and Deutsch, is based solely on the reports of the other auditors. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits and the reports of other auditors provide a reasonable basis for our opinion. PricewaterhouseCoopers LLP New York, New York February 26, 2001 except for Note 15, which is as of March 19, 2001 - 109 -  REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Board of Directors and Stockholders of NFO Worldwide, Inc.: We have audited the accompanying consolidated balance sheet of NFO Worldwide, Inc. (a Delaware corporation) and subsidiar ies as of December 31, 1999, and the related consolidated statements of income, stockholders' equity, and cash flows for each of the years in the two-year period ended December 31, 1999. These financial statements (not presented separately herein) are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of NFO Worldwide, Inc. and subsidiaries as of December 31, 1999, and the results of their operations and their cash flows for each of the years in the two-year period ended December 31, 1999, in conformity with accounting principles generally accepted in the United States. Our audits were made for the purpose of forming an opinion on the consolidated financial statements taken as a whole. The schedule referred to in Item 14 (not separately presented herein) is presented for the purpose of complying with the Securities an d Exchange Commission's rules and is not part of the consolidated financial statements. This schedule has been subjected to the auditing procedures applied in our audits of the consolidated financial statements and, in our opinion, fairly states in all material respects the financial data required to be set forth therein in relation to the consolidated financial statements taken as a whole. Arthur Andersen LLP New York, New York, February 25, 2000 - 110 -  Report of Independent Public Accountants ---------------------------------------- To the Stockholder Deutsch, Inc. and Subsidiary and Affiliates We have audited the combined balance sheets of Deutsch, Inc. and Subsidiary and Affiliates as of December 31, 2000 and 1999, and the related combined statements of operations, stockholder's equity and cash flows for the years then ended. These combined financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these combined financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the combined financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall combined financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the combined financial statements referred to above present fairly, in all material respects, the financial position of Deutsch, Inc. and Subsidiary and Affiliates as of December 31, 2000 and 1999, and their results of operations and cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. The 1999 combined financial statements have been restated to reflect the correct treatment of payments made to the Company's sole stockholder. In financial statements previously issued for the year ended December 31, 1999, certain payments had been classified as bonuses which, it has been determined, should have been reflected as distributions to the Company's sole stockholder. Accordingly, the Company has restated the 1999 financial statements to reflect the correct accounting for the payments and the related tax effects. J.H. Cohn LLP Roseland, New Jersey February 13, 2001 - 111 -  FINANCIAL STATEMENTS THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES CONSOLIDATED BALANCE SHEET DECEMBER 31 (Dollars in Thousands Except Per Share Data) ASSETS 2000 1999 --------------------------- CURRENT ASSETS: Cash and cash equivalents (includes certificates of deposit: 2000-$110,919; 1999-$150,343) $ 708,312 $1,029,076 Marketable securities 39,777 36,765 Receivables (net of allowance for doubtful accounts: 2000-$64,923; 1999-$60,565) 4,687,552 4,442,229 Expenditures billable to clients 379,507 337,769 Prepaid expenses and other current assets 210,905 147,085 --------------------------- Total current assets 6,026,053 5,992,924 --------------------------- OTHER ASSETS: Investment in unconsolidated affiliates 86,055 62,225 Deferred taxes on income 283,134 -- Other investments and miscellaneous assets 486,368 719,024 --------------------------- Total other assets 855,557 781,249 --------------------------- FIXED ASSETS, AT COST: Land and buildings 173,162 164,678 Furniture and equipment 862,043 783,698 Leasehold improvements 324,786 277,383 --------------------------- 1,359,991 1,225,759 Less: accumulated depreciation (699,609) (632,488) --------------------------- Total fixed assets 660,382 593,271 --------------------------- Intangible assets (net of accumulated amortization: 2000-$719,895; 1999-$607,417) 2,696,230 1,879,600 --------------------------- TOTAL ASSETS $10,238,222 $9,247,044 =========================== - 112 -  FINANCIAL STATEMENTS THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES CONSOLIDATED BALANCE SHEET DECEMBER 31 (Dollars in Thousands Except Per Share Data) LIABILITIES AND STOCKHOLDERS' EQUITY 2000 1999 ---- ---- CURRENT LIABILITIES: Payable to banks $ 491,984 $ 262,483 Accounts payable 4,590,361 4,629,415 Accrued expenses 852,549 769,566 Accrued income taxes 171,186 160,484 ---------------------------- Total current liabilities 6,106,080 5,821,948 ---------------------------- NONCURRENT LIABILITIES: Long-term debt 971,957 530,117 Convertible subordinated notes 533,104 518,490 Deferred compensation and reserve for termination allowances 385,518 348,172 Deferred taxes on income -- 45,888 Accrued postretirement benefits 48,350 50,226 Other noncurrent liabilities 61,051 86,127 Minority interests in consolidated subsidiaries 85,806 81,612 ---------------------------- Total noncurrent liabilities 2,085,786 1,660,632 ---------------------------- STOCKHOLDERS' EQUITY: Preferred Stock, no par value shares authorized: 20,000,000 shares issued: none Common Stock, $.10 par value shares authorized: 550,000,000 shares issued: 2000 - 320,135,098; 1999 - 315,921,839 32,013 31,592 Additional paid-in capital 1,100,898 807,308 Retained earnings 1,627,163 1,392,224 Accumulated other comprehensive loss, net of tax (390,653) (76,695) ---------------------------- 2,369,421 2,154,429 Less: Treasury stock, at cost: 2000 - 5,462,809 shares; 1999 - 8,909,904 shares 194,758 312,930 Unamortized expense of restricted stock grants 128,307 77,035 ---------------------------- Total stockholders' equity 2,046,356 1,764,464 ---------------------------- Commitments and contingencies TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $10,238,222 $9,247,044 ============================ Prior periods have been restated to reflect the aggregate effect of the acquisitions accounted for as poolings of interests. The accompanying notes are an integral part of these financial statements. - 113 -  FINANCIAL STATEMENTS THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME YEAR ENDED DECEMBER 31 (Amounts in Thousands Except Per Share Data) 2000 1999 1998 ----------------------------------------- Revenue $ 5,625,845 $ 4,977,823 $ 4,218,657 ----------------------------------------- Salaries and related expenses 3,120,289 2,745,956 2,339,894 Office and general expenses 1,559,556 1,469,862 1,244,771 Amortization of intangible assets 112,478 99,326 61,396 Restructuring and other merger related costs 116,131 84,183 -- Deutsch transaction costs 44,715 -- -- ----------------------------------------- Total operating expenses 4,953,169 4,399,327 3,646,061 ----------------------------------------- Income from operations 672,676 578,496 572,596 Interest expense (109,111) (81,341) (64,296) Other income, net 94,341 103,562 98,555 ----------------------------------------- Income before provision for income taxes 657,906 600,717 606,855 Provision for income taxes 273,034 243,971 245,636 ----------------------------------------- Income of consolidated companies 384,872 356,746 361,219 Income applicable to minority interests (39,809) (33,991) (28,503) Equity in net income of unconsolidated affiliates 13,595 8,532 7,191 ----------------------------------------- Net Income $ 358,658 $ 331,287 $ 339,907 ========================================= Per Share Data: Basic EPS $ 1.18 $ 1.11 $ 1.15 Diluted EPS $ 1.15 $ 1.07 $ 1.12 Weighted average shares: Basic 303,192 297,992 294,756 Diluted 312,653 308,840 305,134 Prior periods have been restated to reflect the aggregate effect of the acquisitions accounted for as poolings of interests. The accompanying notes are an integral part of these financial statements. - 114 -  FINANCIAL STATEMENTS THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS YEAR ENDED DECEMBER 31 (Dollars in Thousands) 2000 1999 1998 ------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 358,658 $ 331,287 $ 339,907 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization of fixed assets 150,370 128,302 110,086 Amortization of intangible assets 112,478 99,326 61,396 Amortization of restricted stock awards 36,693 25,926 20,272 Provision for (benefit of) deferred income taxes (31,546) 9,316 (11,972) Equity in net income of unconsolidated affiliates (13,595) (8,532) (7,191) Income applicable to minority interests 39,809 33,991 28,503 Translation losses 1,192 690 1,034 Net gain on investments (19,345) (43,390) (40,465) Restructuring costs, non-cash 32,100 52,264 -- Deutsch transaction costs, non-cash 36,091 -- -- Other (6,011) (5,198) 12,667 Change in assets and liabilities, net of acquisitions: Receivables (250,966) (820,510) (269,536) Expenditures billable to clients (30,005) (24,413) (31,199) Prepaid expenses and other assets (61,552) 5,399 (39,790) Accounts payable and accrued expenses (62,833) 996,630 336,799 Accrued income taxes (13,057) (64,423) 26,870 Deferred compensation and reserve for termination allowances 21,698 20,496 14,537 ------------------------------------ Net cash provided by operating activities 300,179 737,161 551,918 ------------------------------------ CASH FLOWS FROM INVESTING ACTIVITIES: Acquisitions, net (576,615) (248,406) (255,995) Capital expenditures (201,871) (186,669) (159,596) Proceeds from sales of assets 27,090 72,542 28,346 Net (purchases of) proceeds from marketable securities (3,191) (9,114) 3,934 Other investments and miscellaneous assets (177,522) (127,494) -- Investment in unconsolidated affiliates (12,494) (10,531) (16,725) ------------------------------------ Net cash used in investing activities (944,603) (509,672) (400,036) ------------------------------------ CASH FLOWS FROM FINANCING ACTIVITIES: Increase in short-term borrowings 180,120 47,592 15,304 Proceeds from long-term debt 1,013,873 405,927 220,494 Payments of long-term debt (513,811) (70,126) (98,294) Proceeds from ESOP -- -- 7,420 Treasury stock acquired (236,756) (300,524) (164,928) Issuance of common stock 45,267 66,130 35,239 Cash dividends - Interpublic (109,086) (90,424) (76,894) Cash dividends - pooled companies (14,424) (14,643) (16,461) ------------------------------------ Net cash provided by (used in) financing activities 365,183 43,932 (78,120) ------------------------------------ Effect of exchange rates on cash and cash equivalents (41,523) (43,552) 10,998 ------------------------------------ Increase/(decrease) in cash and cash equivalents (320,764) 227,869 84,760 Cash and cash equivalents at beginning of year 1,029,076 801,207 716,447 ------------------------------------ Cash and cash equivalents at end of year $ 708,312 $1,029,076 $801,207 ==================================== Prior periods have been restated to reflect the aggregate effect of the acquisitions accounted for as poolings of interests. The accompanying notes are an integral part of these financial statements. - 115 -  FINANCIAL STATEMENTS THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME FOR THE THREE -YEAR PERIOD ENDED DECEMBER 31, 2000 (Dollars in Thousands) Accumulated Unamortized Common Additional Other Expense Stock Paid -In Retained Comprehensive Treasury of Restricted (par value $.10) Capital Earnings Income (loss) Stock Stock Grants Total ----------------------------------------------------------------------------------------------------------------------- BALANCES, DECEMBER 31, 1999 $31,592 $ 807,308 $1,392,224 $ (76,695) $(312,930) $(77,035) $1,764,464 Comprehensive income: Net income 358,658 $ 358,658 Adjustment for minimum pension liability (41) (41) Change in market value of securities available-for -sale (223,085) (223,085) Foreign currency translation adjustment (90,832) (90,832) ---------- Total comprehensive income $ 44,700 Cash dividends - IPG (109,086) (109,086) Cash dividends - pooled companies (14,424) (14,424) Awards of stock under Company plans: Achievement stock and incentive awards 11 203 214 Res tricted stock, net of forfeitures 198 84,471 6,265 (51,272) 39,662 Employee stock purchases 63 21,965 22,028 Exercise of stock options, including tax benefit 188 57,721 57,909 Purchase of Company's own stock (236,756) (236,756) Issuance of shares for acquisitions 34,561 348,460 383,021 Equity adjustments - pooled companies 94,859 (207) 94,652 Other (28) 2 (2) (28) ---------------------------------------------------------------------------------------------------------------------- BALANCES, DECEMBER 31, 2000 $32,013 $1,100,898 $1,627,163 $(390,653) $(194,758) $(128,307) $2,046,356 ---------------------------------------------------------------------------------------------------------------------- - 116 -  FINANCIAL STATEMENTS THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES CONSOL IDATED STATEMENT OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME FOR THE THREE -YEAR PERIOD ENDED DECEMBER 31, 2000 (Dollars in Thousands) Accumulated Unamortized Common Additional Other Expense Unearned Stock Paid-In Retained Comprehensive Treasury of Restricted ESOP (par value $.10) Capital Earnings Income (loss) Stock Stock Grants Plan Total ----------------------------------------------------------------------------------------------------------------------------------- BALANCES, DECEMBER 31, 1998 $30,995 $597,657 $1,166,785 $(160,970) $(132,688) $(71,348) $ -- $1,430,431 Comprehensive income: Net income $ 331,287 $ 331,287 Adjustment for minimum pension liability 18,596 18,596 Change in market value of securities available-for -sale 158,607 158,607 Foreign currency translation adjustment (92,928) (92,928) -------- Total comprehensive income $415,562 Cash dividends - IPG (90,424) (90,424) Cash dividends - pooled companies (14,643) (14,643) Equity adjustments - pooled companies (594) (594) Awards of stock under Company plans: Achievement stock and incentive awards 198 333 531 Restricted stock, net of forfeitures 66 36,902 (7,927) (5,687) 23,354 Employee sto ck purchases 40 19,068 19,108 Exercise of stock options, including tax benefit 276 81,539 81,815 Purchase of Company's own stock (300,524) (300,524) Issuance of shares for acquisitions 63,447 127,876 191,323 Par value of shares issued for two -for-one stock split 187 (187) -- Other 28 8,497 8,525 ------------------------------------------------------------------------------------------------------------------------------------ BALANCES, DECEMBER 31, 1999 $31,592 $807,308 $1,392,224 $ (76,695) $(312,930) $(77,035) $ -- $1,764,464 ------------------------------------------------------------------------------------------------------------------- ----------------- - 117 -  FINANCIAL STATEMENTS THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME FOR THE THREE -YEAR PERIOD ENDED DECEMBER 31, 2000 (Dollars in Thousands) Accumulated Unamortized Common Additional Other Expense Unearned Stock Paid -In Retained Comprehensive Treasury of Restricted ESOP (par value $.10) Capital Earnings Income (loss) Stock Stock Grants Plan Total -------------- --------------------------------------------------------------------------------------------------------------------- BALANCES, DECEMBER 31, 1997 $30,564 $455,283 $920,448 $(159,064) $ (23,411) $(56,634) $(7,420) $1,159,766 Comprehensive income: Net income $339,907 $ 339,907 Adjustment for minimum pension liability (24,013) (24,013) Change in market value of securities available-for -sale (2,576) (2,576) Foreign currency translation adjustment 24,683 24,683 ---------- Total comprehensive income $ 338,001 Cash dividends - IPG (76,894) (76,894) Cash dividends - pooled companies (16,461) (16,461) Awards of stock under Company plans: Achievement stock and incentive awards 274 110 384 Restricted stock, net of forfeitures 63 36,619 (2,406) (14,714) 19,562 Employee stock purchases 26 13,325 13,351 Exercise of stock options, including tax benefit 123 42,518 42,641 Purchase of Company's own stock (164,928) (164,928) Issuance of shares for acquisitions 36,714 57,947 94,661 Conversion of convertible debentures 3 1,002 1,005 Payments from ESOP 7,420 7,420 Par value of s hares issued for two -for-one stock split 215 (215) -- Other 1 11,922 11,923 ----------------------------------------------------------------------------------------------------------------------------------- BALANCES, DECEMBER 31, 1998 $30,995 $ 597,657 $1,166,785 $(160,970) $(132,688) $(71,348) $ -- $1,430,431 ----------------------------------------------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements. Prior periods have been restated to reflect the aggregate effect of the acquisitions accounted for as poolings of interests. - 118 -  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations The Company is a worldwide provider of advertising agency and related services. The Company conducts business through the following subsidiaries: McCann-Erickson WorldGroup, The Lowe Group, DraftWorldwide, Initiative Media Worldwide, Weber Shandwick Worldwide, Golin/Harris International, Octagon, NFO WorldGroup, Jack Morton Worldwide and other related companies. The Company also has arrangements through association with local agencies in various parts of the world. Other specialized marketing and communications services conducted by the Company include media buying, market research, relationship (direct) marketing, public relations, sports and event marketing, healthcare marketing and e-consultancy and services. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries, most of which are wholly owned. The Company also has certain investments in unconsolidated affiliates that are carried on the equity basis. The Company's consolidated financial statements, including the related notes, have been restated as of the earliest period presented to include the results of operations, financial position and cash flows of the 2000 pooled entities in addition to prior pooled entities. Short-term and Long-term Investments The Company's investments in marketable securities are categorized as available-for-sale securities, as defined by Statement of Financial Accounting Standards No. 115 ("SFAS 115"), "Accounting for Certain Investments in Debt and Equity Securities". Unrealized holding gains and losses are reflected as a net amount within stockholders' equity until realized. The cost of securities sold is based on the average cost of securities when computing realized gains and losses. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Translation of Foreign Currencies Balance sheet accounts are translated principally at rates of exchange prevailing at the end of the year except for fixed assets and related depreciation in countries with highly inflationary economies, which are translated at rates in effect on dates of acquisition. Revenue and expense accounts are translated at average rates of exchange in effect during each year. Translation adjustments are included within stockholders' equity except for countries with highly inflationary economies, in which case they are included in current operations. Revenue Revenue is recognized when earned. For advertising services the revenue is earned generally when media placements appear or production costs (principally labor) are incurred and billable, as specified in the relevant client contract. Revenue from non-advertising services is recognized as the relevant services are provided. In December 1999, the Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" ("SAB 101"). SAB 10 1 provides guidance on the recognition, presentation and disclosure of revenue in financial statements. SAB 101 was adopted by the Company on January 1, 2000. The adoption of SAB 101 had no significant effect on the Company's operating results or financial position. - 119 - Depreciation and Amortization Depreciation is computed principally using the straight-line method over estimated useful lives of the related assets, ranging generally from 3 to 20 years for furniture and equipment and from 10 to 45 years for various component parts of buildings. Leasehold improvements and rights are amortized over the terms of related leases. Company policy provides for the capitalization of all major expenditures for renewal and improvements and for current charges to income for repairs and maintenance. Long-lived Assets The excess of purchase price over the fair value of net tangible assets acquired is amortized on a straight -line basis over periods not exceeding 40 years. Customer lists are amortized on a straight-line basis over the expected useful life of the customer lists (generally 5 to 40 years). The Company evaluates the recoverability of the carrying value of long-lived assets whenever events or changes in circumstances indicate that the net book value of an operation may not be recoverable. If the sum of projected future undiscounted cash flows of an operation is less than its carrying value, an impairment loss is recognized. The impairment loss is measured by the excess of the carrying value over fair value based on estimated discounted future cash flows or other valuation measures. During 1999, the Company recorded a pre -tax charge of $16 million related to the write-off of goodwill and customer lists within NFO's North American financial services division. Cash flow analyses were performed, resulting in the determination by management that the intangible assets within this division were permanently impaired. Income Taxes Deferred income taxes reflect the impact of temporary differences between the amount of assets and liabilities recognized for financial reporting purposes and such amounts recognized for income tax purposes. Earnings per Common and Common Equivalent Share The Company applies the principles of Statement of Financial Accounting Standards 128 ("SFAS 128"), "Earnings Per Share". Basic earnings per share is based on the weighted-average number of common shares outstanding during each year. Diluted earnings per share also includes common equivalent shares applicable to grants under the stock incentive and stock option plans and the assumed conversion of convertible subordinated debentures and notes, if they are determined to be dilutive. Treasury Stock Treasury stock is acquired at market value for the purpose of fulfilling obligations under various compensation plans and is recorded at cost. Issuances are accounted for on a first-in, first-out basis. Concentrations of Credit Risk The Company's clients are in various businesses, located primarily in North America, Latin America, Europe and the Asia Pacific Region. The Company performs ongoing credit evaluations of its clients. Reserves for credit losses are maintained at levels considered adequate by management. The Company invests its excess cash in deposits with major banks and in money market securities. These securities typically mature within 90 days and bear minimal risk. Segment Reporting The Company provides advertising and many other closely related specialized marketing and communications services. All of these services fall within one reportable segment as defined in Statement of Financial Accounting Standards No. 131 ("SFAS 131"), "Disclosures about Segments of an Enterprise and Related Information." Accounting for Derivatives Instruments and Hedging Activities In June 1998, the Financial Accounting Standards Board issued Statement of - 120 - Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133"), which had an initial adoption date by the Company of January 1, 2000. In June 1999, the FASB postponed the adoption date of SFAS 133 u ntil January 1, 2001. The Company will adopt the provisions of SFAS 133 effective January 1, 2001 and believes its adoption of SFAS 133 will have no impact on its financial condition or results of operations. Equity Based Compensation In April 2000, the FASB issued Interpretation No. 44, ("FIN 44") Accounting for Certain Transactions Involving Stock Compensation - an interpretation of APB Opinion No. 25. This interpretation, which was effective from July 1, 2000, addressed various issues including the definition of employee for the purpose of applying APB 25, criteria for determining whether a plan qualifies as a non-compensatory plan, the accounting consequence of various modifications to the terms of a previously fixed stock option award and the accounting for an exchange of stock compensation awards in a business combination. The adoption of FIN 44 did not have a material impact on the Company's financial statements. Reclassifications Certain amounts for prior years have been reclassified to conform to current year presentation. NOTE 2: STOCKHOLDERS' EQUITY In connection with the Deutsch acquisition and based on the taxable structure of the transaction, a deferred tax asset of approximately $110 million and a current tax liability of $15 million were recorded with a corresponding adjustment to additional paid in capital. Comprehensive Income Accumulated other comprehensive income (loss) amounts are reflected net of tax, where applicable, in the consolidated financial statements as follows: (Dollars in thousands) Total Accumulated Foreign Unrealized Minimum Other Currency Holding Pension Comprehensive Translation Gains/ Liability Income/ Adjustment (Losses) Adjustment (Loss) ------------------------------------------------- Balances, December 31, 1997 $(158,299) $ 12,465 $(13,230) $(159,064) Current-period change 24,683 (2,576) (24,013) (1,906) ----------------------------------------------- Balances, December 31, 1998 $(133,616) $ 9,889 $(37,243) $(160,970) Current-period change (92,928) 15 8,607 18,596 84,275 ----------------------------------------------- Balances, December 31, 1999 $(226,544) $168,496 $(18,647) $ (76,695) Current-period change (90,832) (223,085) (41) (313,958) ----------------------------------------------- Balances, December 31, 2000 $(317,376) $(54,589) $(18,688) $(390,653) =============================================== See Note 13 for additional discussion of unrealized holding gains and losses on investments. - 121 - NOTE 3: EARNINGS PER SHARE The following is a reconciliation of the components of the basic and diluted EPS computations for income available to common stockholders for the years ended December 31: (Amounts in Thousands Except Per Share Data) 2000 1999 1998 ------------------------------- ------------------------------- ------------------------------ Per Per Per Share Share Share Income Shares Amount Income Shares Amount Income Shares Amount ------------------------------- ------------------------------- ------------------------------ BASIC EPS Income available to common stockholders $358,658 303,192 $1.18 $331,287 297,992 $1.11 $339,907 294,756 $1.15 ------------------- ------------------- ---------------------- Effect of Dilutive Securities: Options 6,110 7,311 6,924 Restricted stock 666 3,351 631 3,537 541 3,454 DILUTED EPS $359,324 312,653 $1.15 $331,918 308,840 $1.07 $340,448 305,134 $1.12 =================== =================== ====================== The computation of diluted EPS for 2000, 1999, and 1998 excludes the assumed conversion of the 1.80% and 1.87% Convertible Subordinated Notes (See Note 10) because they were antidilutive. NOTE 4: ACQUISITIONS The Company acquired a number of advertising and specialized marketing and communications services companies during the three-year period ended December 31, 2000. The aggregate purchase price, including cash and stock payments for new acquisitions (including pooled entities), was $1,582 million, $559 million and $820 million in 2000, 1999 and 1998, respectively. The aggregate purchase price for new acquisitions accounted for as purchases was $823 million, $293 million, and $405 million in 2000, 1999, and 1998, respectively. 2000 Acquisitions In 2000, the Company paid $500 million in cash and issued 26.8 million shares of its comm on stock to acquire 77 companies. Of the acquisitions, 74 were accounted for under the purchase method of accounting and 3 were accounted for under the pooling of interests method. The Company also recorded an additional liability for acquisition related deferred payments of $1 million, for cases where contingencies related to acquisitions have been resolved. For those entities accounted for as purchase transactions, the purchase price of the acquisitions has been allocated to assets acquired and liabilities assumed based on estimated fair values. The results of operations of the acquired companies were included in the consolidated results of the Company from their respective acquisition dates which occurred throughout the year. The companies acquired in transactions accounted for as purchases included Capita Technology, Nationwide Advertising Services, Waylon, MWW and certain assets of Caribiner International. None of the acquisitions was significant on an individual basis. In connection with the 2000 purchase transactions, goodwill of approximately $744 million was recorded. The purchase price allocations made in 2000 are preliminary and subject to adjustment. Goodwill related to the acquisitions is being amortized on a straight -line basis over their estimated useful lives. In April 2000, the Company acquired NFO in a transaction accounted for as a pooling of interests. Approximately 12.6 million shares were issued. In November 2000, the Company acquired Deutsch in a transaction accounted for as a pooling of interests. Approximately 6 million shares were issued to acquire Deutsch. The Company's consolidated financial statements have been restated as of the earliest period presented to include the results of operations, financial - 122 - position and cash flows of NFO, Deutsch and other acquisitions accounted for as poolings. 1999 Acquisitions In 1999, the Company paid $189 million in cash and issued 8.4 million shares of its common stock to acquire 56 companies. Of the acquisitions, 52 were accounted for under the purchase method of accounting and 4 were accounted for under the pooling of interests method. The Company also recorded a liability for acquisition related deferred payments of $28 million, for cases where contingencies related to acquisitions have been resolved. For those entities accounted for as purchase transactions, the purchase price of the acquisitions has been allocated to assets acquired and liabilities assumed based on estimated fair values. The results of operations of the acquired companies were included in the consolidated results of the Company from their respective acquisition dates which occurred throughout the year. The companies acquired in transactions accounted for as purchases included The Cassidy Companies, Spedic France, Mullen Advertising, and PDP Promotions UK. None of the acquisitions was significant on an individual basis. In connection with the 1999 purchase transactions, goodwill of approximately $254 million was recorded. Goodwill related to the acquisitions is being amortized on a straight-line basis over their estimated useful lives. On December 1, 1999, the Company acquired Brands Hatch Leisure Plc. for 5.2 million shares of stock. The acquisition has been accounted for as a pooling of interests. Additionally, during 1999 the Company issued 641,596 shares to acquire 3 other companies which have been accounted for as poolings of interests. The following unaudited pro forma data summarize the results of operations for the periods indicated as if the 1999 and 2000 purchase acquisitions had been completed as of January 1, 1999. The pro forma data give effect to actual operating results prior to the acquisition, adjusted to include the estimated pro forma effect of interest expense, amortization of intangibles and income taxes. These pro forma amounts do not purport to be indicative of the results that would have actually been obtained if the acquisitions occurred as of the beginning of the periods presented or that may be obtained in the future. For the year ended December 31, 2000 (Amounts in thousands except per share data) Pre- Pro forma IPG acquisition with 2000 IPG results acquisitions (as reported) (unaudited) (unaudited) ------------- ----------- ----------- Revenues $5,625,845 $230,549 $5,856,394 Net income 358,658 9,552 368,210 Earnings per share: Basic 1.18 1.20 Diluted 1.15 1.16 - 123 - For the year ended December 31, 1999 (Amounts in thousands except per share data) Pre- Pro forma IPG acquisition with 1999 and IPG results 2000 acquisitions (as reported) (unaudited) (unaudited) ------------- ----------- ----------- Revenues $4,977,823 $418,289 $5,396,112 Net income 331,287 22,781 354,068 Earnings per share: Basic 1.11 1.15 Diluted 1.07 1.11 1998 Acquisitions In 1998, 15 million shares of the Company's common stock were issued for acquisitions accounted for as poolings of interests. The companies pooled and the respective shares of the Company's common stock issued included the following: International Public Relations - 5.2 million shares, Hill Holliday - 4.1 million shares, The Jack Morton Company - 4.3 million shares, and Carmichael Lynch - 1 million shares. In 1998, the Company paid $282 million in cash and issued 2.7 million shares of its common stock to acquire 77 companies, all of which have been accounted for as purchases. These acquisitions included Gillespie, Ryan McGinn, CSI, Flam mini, Gingko, Defederico, Herrero Y Ochoa, Infratest Burke AG, CF Group, MarketMind Technologies, and Ross -Cooper-Lund. The Company also recorded a liability for acquisition related deferred payments of $24 million. Deferred Payments Certain of the Company's acquisition agreements provide for deferred payments by the Company, contingent upon future revenues or profits of the companies acquired. Deferred payments of both cash and shares of the Company's common stock for prior years' acquisitions were $185 million, $210 million, and $84 million in 2000, 1999 and 1998, respectively. Such payments are capitalized and recorded as goodwill. Investments During 2000, the Company sold its investment in Exhibition Services for combined proceeds of approximately $12 million. During 1999, the Company sold a portion of its investments in Lycos and USWEB for combined proceeds of approximately $56 million. Additionally, the Company sold its minority investment in Nicholson NY, Inc. to Icon for $19 million in shares of Icon's common stock. During 1998, the Company sold a portion of its investments in MarchFirst, Inc., (formerly USWEB, CKS Group) and Lycos with combined proceeds of approximately $20 million. Included in other income, net, are net equity gains of $40 million, $49 million and $44 million in 2000, 1999, and 1998, respectively. Restatements As noted above, the Company acquired NFO and Deutsch during 2000 in transactions which were accounted for as poolings of interests. The accompanying consolidated financial statements, including the related notes, have been restated as of the earliest period presented to include the results of operations, financial position and cash flows of all pooled entities. Revenue and net income for NFO for the quarter ended March 31, 2000 were $106 million, and $.2 million, respectively. Revenue and net income for Deutsch for - 124 - the three quarters ended September 30, 2000 were $88 million, and $19 million, respectively. In connection with the acquisition of Deutsch, the Company recognized a charge related to one-time transaction costs of $44.7 million. The principal component of this amount related to the expense associated with various equity participation agreements with certain members of management. These agreements provided for participants to receive a portion of the proceeds in the event of the sale or merger of Deutsch. Prior to its acquisition by the Company, Deutsch elected to be treated as an "S" Corporation under applicable sections of the Internal Revenue Code as well as for state income tax purposes. Accordingly, income tax expense was lower than would have been the case had Deutsch been treated as a "C" Corporation. Deutsch became a "C" Corporation upon its acquisition by the Company. On a pro forma basis, assuming "C" Corporation status, net income for Deutsch and the Company would have been lower by $10.7 million, $6.5 million and $2.5 million in 2000, 1999 and 1998, respectively. NOTE 5: PROVISION FOR INCOME TAXES The Company accounts for income taxes under Statement of Financial Accounting Standards No. 109 ("SFAS 109"), "Accounting for Income Taxes". SFAS 109 applies an asset and liability approach that requires the recognition of deferred tax assets and liabilities with respect to the expected future tax consequences of events that have been recognized in the consolidated financial statements and tax returns. The components of income before provision for income taxes are as follows: (Dollars in thousands) 2000 1999 1998 ------ ---- ---- Domestic $367,920 $365,118 $322,651 Foreign 289,986 235,599 284,204 --------------------------------------- Total $657,906 $600,717 $606,855 ======================================= The provision for income taxes consists of: Federal Income Taxes (Including Foreign Withholding Taxes): Current $128,468 $ 92,018 $110,226 Deferred (8,434) 19,891 4,335 --------------------------------------- 120,034 111,909 114,561 --------------------------------------- State and Local Income Taxes: Current 36,838 23,168 23,713 Deferred (2,795) 4,252 802 --------------------------------------- 34,043 27,420 24,515 --------------------------------------- Foreign Income Taxes: Current 139,274 119,469 123,669 Deferred (20,317) (14,827) (17,109) --------------------------------------- 118,957 104,642 106,560 --------------------------------------- Total $273,034 $243,971 $245,636 ======================================= - 125 - At December 31, 2000 and 1999 the deferred tax assets/(liabilities) consisted of the following items: (Dollars in thousands) 2000 1999 ---- ---- Postretirement/postemployment benefits $ 55,230 $ 52,317 Deferred compensation 16,478 4,940 Pension costs 25,225 10,036 Depreciation (5,174) (8,537) Rent (10,515) (8,674) Interest 1,669 4,100 Accrued reserves 15,653 9,399 Allowance for doubtful accounts 9,695 5,222 Goodwill amortization 98,130 (5,504) Investments in equity securities 32,856 (140,320) Tax loss/tax credit carryforwards 49,145 47,783 Restructuring and other merger related costs 13,453 9,497 Other 4,525 86 ----------------------- Total deferred tax assets / (liabilities) 306,370 (19,655) Deferred tax valuation allowance 23,236 26,233 ----------------------- Net deferred tax assets / (liabilities) $283,134 $(45,888) ======================= The valuation allowance of $23.2 million and $26.2 million at December 31, 2000 and 1999, respectively, represents a provision for uncertainty as to the realization of certain deferred tax assets, including U.S. tax credits and net operating loss carryforw ards in certain jurisdictions. The change during 2000 in the deferred tax valuation allowance primarily relates to the utilization of tax credits and net operating loss carryforwards. At December 31, 2000, there were $19.3 million of tax credit carryforwards with expiration periods through 2005 and net operating loss carryforwards with a tax effect of $29.8 million with various expiration periods. A reconciliation of the effective income tax rate as shown in the consolidated statement of income to the federal statutory rate is as follows: 2000 1999 1998 ---- ---- ---- Statutory federal income tax rate 35.0% 35.0% 35.0% State and local income taxes, net of federal income tax benefit 3.5 2.8 3.7 Impact of foreign operations, including withholding taxes (0.5) 0.8 0.4 Goodwill and intangible assets 3.4 3.6 2.8 Effect of pooled companies 1.0 0.3 (0.8) Other (0.9) (1.9) (0.6) ------------------------ Effective tax rate 41.5% 40.6% 40.5% ======================== Excluding the impact of non-recurring items, the effective tax rate would have been 39.0%, 40.4% and 40.5% in 2000, 1999 and 1998, respectively. As described in Note 4, prior to its acquisition by the Company, Deutsch had elected to be treated as an "S" Corporation and accordingly, its income tax expense was lower than it would have been had Deutsch been treated as a "C" Corporation. Deutsch became a "C" Corporation upon its acquisition by the Company. Assuming Deutsch had been a "C" Corporation since 1997, the pro forma effective tax rate for the Company, would have been 40.4%, 41.4% and 40.9% respectively (excluding non-recurring items) for 2000, 1999 and 1998. - 126 - Also, in connection with the Deutsch transaction a deferred tax asset of approximately $110 million and a current tax liability of approximately $15 million were recognized with a corresponding adjustment to additional paid in capital. The total amount of undistributed earnings of foreign subsidiaries for income tax purposes was approximately $704 million at December 31, 2000. It is the Company's intention to reinvest undistributed earnings of its foreign subsidiaries and thereby indefinitely postpone their remittance. Accordingly, no provision has been made for foreign withholding taxes or United States income taxes which may become payable if undistributed earnings of foreign subsidiaries were paid as dividends to the Company. The additional taxes on that portion of undistributed earnings which is available for dividends are not practicably determinable. NOTE 6: SUPPLEMENTAL CASH FLOW INFORMATION Cash and Cash Equivalents For purposes of the consolidated statement of cash flows, the Company considers all highly liquid investments with a maturity of three months or less to be cash equivalents. Income Tax and Interest Payments Cash paid for income taxes was approximately $241 million, $186 million and $200 illion in 2000, 1999 and 1998, respectively. Interest payments were approximately $76 million, $57 million and $40 million in 2000, 1999, and 1998, respectively. Acquisitions As more fully described in Note 4, the Company issued 26.8 million shares, 8.4 million shares, and 17.7 million shares of the Company's common stock in connection with acquisitions during 2000, 1999 and 1998, respectively. Details of businesses acquired in transactions accounted for as purchases were as follows: (Dollars in thousands) 2000 1999 1998 ---- ---- ---- Fair value of assets acquired $1,358,623 $627,005 $726,601 Liabilities assumed 349,024 148,637 319,676 ------------------------------------- Net assets acquired 1,009,599 478,368 406,925 Less: noncash consideration 381,787 186,210 91,077 Less: cash acquired 51,197 43,752 59,853 ------------------------------------- Net cash paid for acquisitions $ 576,615 $248,406 $255,995 ===================================== The amounts shown above exclude future deferred payments due in subsequent years, but include cash deferred payments of $127 million, $120 million and $55 million made during 2000, 1999 and 1998, respectively. NOTE 7: INCENTIVE PLANS The 1997 Performance Incentive Plan ("1997 PIP Plan") was approved by the Company's stockholders in May 1997 and includes both stock and cash based incentiv e awards. The maximum number of shares of the Company's common stock which may be granted in any year under the 1997 PIP Plan is equal to 1.85% of the total number of shares of the Company's common stock outstanding on the first day of the year adjusted for additional shares as defined in the 1997 PIP - 127 - Plan document (excluding management incentive compensation performance awards). The 1997 PIP Plan also limits the number of shares available with respect to awards made to any one participant as well as limiting the number of shares available under certain awards. Awards made prior to the 1997 PIP Plan remain subject to the respective terms and conditions of the predecessor plans. Except as otherwise noted, awards under the 1997 PIP Plan have terms similar to awards made under the respective predecessor plans. Stock Options Outstanding options are generally granted at the fair market value of the Company's common stock on the date of grant and are exercisable as determined by the Compensation Committee of the Board of Directors (the "Committee"). Generally, options become exercisable between two and five years after the date of grant and expire ten years from the grant date. Followin g is a summary of stock option transactions during the three-year period ended December 31: 2000 1999 1998 --------------------------------------------------- ----- Weighted Weighted Weighted Average Average Average Exercise Exercise Exercise (Shares in thousands) Shares Price Shares Price Shares Price -------------------------------------------------------- Shares under option, beginning of year 27,627 $ 23 29,505 $ 19 25,466 $ 13 Options granted 4,297 42 4,743 39 8,399 32 Options exercised (2,476) 14 (4,497) 11 (3,108) 8 Options cancelled (1,932) 30 (2,124) 25 (1,252) 15 ------ ------ ------ Shares under option, end of year 27,516 $ 26 27,627 $ 23 29,505 $ 19 ====== ====== ====== Options exercisable at year-end 8,179 $ 15 7,955 $ 13 6,954 $ 11 The following table summarizes information about stock options outstanding and exercisable at December 31, 2000: (Shares in thousands) Weighted- Average Weighted- Weighted- Number Remaining Average Number Average Range of Outstanding Contractual Exercise Exercisable Exercise Exercise Prices at 12/31/00 Life Price at 12/31/00 Price ------------------------------------------------------------------------------- $ 4.33 to $9.99 1,914 2 $ 9 1,914 $ 9 10.00 to 14.99 2,728 4 11 2,652 11 15.00 to 24.99 9,075 6 18 2,654 18 25.00 to 56.28 13,799 8 37 959 31 Employee Stock Purchase Plan Under the Employee Stock Purchase Plan ("ESPP"), employees may purchase common stock of the Company through payroll deductions not exceeding 10% of their compensation. The price an employee pays for a share of sto ck is 85% of the market price on the last business day of the month. The Company issued approximately .6 million shares in 2000 and .5 million shares in 1999, and 1998, - 128 - respectively, under the ESPP. An additional 14.9 million shares were reserved for issuance at December 31, 2000. SFAS 123 Disclosures The Company applies the disclosure principles of Statement of Financial Accounting Standards No. 123 ("SFAS 123"), "Accounting for Stock-Based Compensation". As permitted by the provisions of SFAS 123, the Company applies APB Opinion 25, "Accounting for Stock Issued to Employees", and related interpretations in accounting for its stock-based employee compensation plans. If compensation cost for the Company's stock option plans and its ESPP had been determined based on the fair value at the grant dates as defined by SFAS 123, the Company's pro forma net income and earnings per share would have been as follows: (Dollars in Thousands Except Per Share Data) 2000 1999 1998 ---- ---- ---- Net Income As reported $358,658 $331,287 $339,907 Pro forma $327,880 $303,645 $322,084 Earnings Per Share Basic As reported $ 1.18 $ 1.11 $ 1.15 Pro forma $ 1.08 $ 1.02 $ 1.09 Diluted As reported $ 1.15 $ 1.07 $ 1.12 Pro forma $ 1.05 $ 0.99 $ 1.06 For purposes of this pro forma information, the fair value of shares issued under t he ESPP was based on the 15% discount received by employees. The weighted -average fair value (discount) on the date of purchase for stock purchased under this plan was $6.17, $5.28, and $3.82 in 2000, 1999, and 1998, respectively. The weighted average fair value of options granted during 2000, 1999, and 1998 was $14.86, $12.94, and $8.85, respectively. The fair value of each option grant has been estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions: 2000 1999 1998 ---- ---- ---- Expected option lives 6 years 6 years 6 years Risk free interest rate 6.15% 5.72% 4.87% Expected volatility 25.86% 19.73% 19.17% Dividend yield .89% .81% .95% As required by SFAS 123, this pro forma information is based on stock awards beginning in 1995 and accordingly the pro forma information for 1999 and 1998 is not likely to be representative of the pro forma effects in future years because options generally vest over five years. Restricted Stock Restricted stock issuances are subject to certain restrictions and vesting requirements as determined by the Committee. The vesting period is generally five to seven years. No monetary consideration is paid by a recipient for a restricted stock award and the grant date fair value of these shares is amortized over the restriction periods. At December 31, 2000, there was a total of 6.8 million shares of restricted stock outst anding. During 2000, 1999 and 1998, the Company awarded 2.2 million shares, .9 million shares and 1.3 million shares of restricted stock with a weighted-average grant date fair value of $42.72, $40.03 and $28.99, respectively. The cost recorded for restricted stock - 129 - awards in 2000, 1999 and 1998 was $36.7 million, $25.9 million, and $20.3 million, respectively. Performance Units Performance units have been awarded to certain key employees of the Company and its subsidiaries. The ultimate value of these performance units is contingent upon the annual growth in profits (as defined) of the Company, its operating components or both, over the performance periods. The awards are generally paid in cash. The projected value of these units is accrued by the Company and charged to expense over the performance period. The Company expensed approximately $40 million, $42 million and $30 million in 2000, 1999, and 1998, respectively. NOTE 8: RETIREMENT PLANS Defined Benefit Pension Plans Through March 31, 1998 the Company and certain of its domestic subsidiaries had a defined benefit plan ("Domestic Plan") which covered substantially all regular domestic employees. Effective April 1, 1998 this Plan was curtailed, and participants with five or less years of service became fully vested in the Domestic Plan. Participants with five or more years of service as of March 31, 1998 retain their vested balances and participate in a new compensation plan. Under the new plan, each participant's account is credited with an annual allocation, which approximates the projected discounted pension benefit accrual (normally made under the Domestic Plan) plus interest, while they continue to work for the Company. Participants in active service are eligible to receive up to ten years of allocations coinciding with the number of years of plan participation with the Company after March 31, 1998. Net periodic pension costs (income) for the Domestic Plan for 2000, 1999 and 1998 were ($.9) million, $1.3 million and $.9 million, respectively. Additionally, NFO maintains a defined benefit plan ("NFO Plan") covering approximately one half of NFO's U.S. employees. The periodic pension costs for this plan for 2000, 1999, and 1998 were $.5 million, $.8 million and $.6 million, respectively. The Company's stockholders' equity balance includes a minimum pension liability of $18.7 million, $18.6 million and $37.2 million at December 31, 2000, 1999 and 1998, respectively. The Company also has several foreign pension plans in which benefits are based primarily on years of service and employee compensation. It is the Company's policy to fund these plans in accordance with local laws and income tax regulations. Net periodic pension costs for foreign pension plans for 2000, 1999 and 1998 included the following components: (Dollars in thousands) 2000 1999 1998 ---- ---- ---- Service cost $ 9,464 $ 9,619 $ 6,847 Interest cost 11,600 11,759 10,908 Expected return on plan assets (11,999) (9,380) (9,437) Amortization of unrecognized transition obligation 501 390 373 Amortization of prior service cost 713 833 482 Recognized actuarial loss / (gain) (329) 508 (70) Other -- (9) -- -------------------------------- Net periodic pension cost $ 9,950 $ 13,720 $ 9,103 ================================ - 130 - The following table sets forth the change in the benefit obligation, the change in plan assets, the funded status and amounts recognized for the pension plans in the Company's consolidated balance sheet at December 31, 2000, and 1999: (Dollars in thousands) Domestic Foreign Pension Plans Pension Plans ------------------------------------------------ 2000 1999 2000 1999 ------------------------------------------------ Change in benefit obligation Beginning obligation $ 151,878 $ 166,538 $ 226,503 $ 220,964 Service cost 701 768 9,464 9,619 Interest cost 10,512 9,869 11,600 11,759 Benefits paid (14,721) (12,671) (10,912) (12,777) Participant contribution s - - 1,589 2,410 Actuarial (gains) / losses 5,439 (12,626) 7,991 (7,264) Currency effect -- -- (14,912) 1,440 Other -- -- 316 352 ------------------------------------------------ Ending obligation 153,809 151,878 231,639 226,503 ------------------------------------------------ Change in plan assets Beginning fair value 135,510 129,755 192,739 161,975 Actual return on plan assets 2,496 15,354 (2,338) 30,651 Employer contributions 9,185 3 ,072 8,278 7,887 Participant contributions -- -- 1,589 2,410 Benefits paid (14,721) (12,671) (10,912) (12,777) Currency effect -- -- (5,799) 156 Other -- -- 190 2,437 ------------------------------------------------ Ending fair value 132,470 135,510 183,747 192,739 ------------------------------------------------ Funded status of the plans (21,339) (16,368) (47,892) (33,764) Unrecognized net actuarial loss/(gain) 33,542 18,927 5,374 (18,163) Unrecognized prior service cost (7) (13) 1,306 3,704 Unrecognized transition cost -- -- 2,732 1,838 ------------------------------------------------ Net asset/(liability) recognized $ 12,196 $ 2,546 $ (38,480) $ (46,385) ================================================ At December 31, 2000 and 1999, the assets of the Domestic Plan and the foreign pension plans were primarily invested in fixed income and equity securities. For the Domestic Plans, discount rates of 7.5% in 2000, 7.75% in 1999 and 6.75% to 7% in 1998 and salary increase assumptions of 4.5% in 2000 and 1999 (for the NFO Plan) and 4.5% to 6% in 1998 were used in determining the actuarial present value of the projected benefit obligation. The expected return of Domestic Plans assets was 9% to 9.5% in 2000 and 1999 and 9% to 10% in 1998. For the foreign pension plans, discount rates ranging from 3.8% to 10% in 2000, 3.75% to 14% in 1999, and 4% to 14% in 1998 and salary increase assumptions ranging from 2.5% to 10% in 2000, 3% to 10% in 1999 and 2% to 10% in 1998 were used in determining the actuarial present value of the projected benefit obligation. The expected rates of return on the assets of the foreign pension plans ranged from 2% to 10% in 2000, and 2% to 14% in 1999 and 1998. The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the Domestic Plan with accumulated benefit obligation in excess of plan assets were $145 million, $145 million, and $124 million, respectively, as of December 31, 2000, and $152 million, $152 million, and $136 million, respectively, as of December 31, 1999. The projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for the foreign p ension plans with accumulated benefit obligations in excess of plan - 131 - assets were $77 million, $72 million and $5 million respectively, as of December 31, 2000, and $90 million, $72 million and $9 million respectively, as of December 31, 1999. Other Benefit Arrangements The Company also has special unqualified deferred benefit arrangements with certain key employees. Vesting is based upon the age of the employee and the terms of the employee's contract. Life insurance contracts have been purchased in amounts which may be used to fund these arrangements. In addition to the defined benefit plans described above, the Company also sponsors other defined contribution plans ("Savings Plans") that cover substantially all domestic employees of the Company and participating subsidiaries. The Savings Plans permit participants to make contributions on a pre-tax and/or after-tax basis. The Savings Plans allow participants to choose among several investment alternatives. The Company matches a portion of participants' contributions based upon the number of years of service. The Company contributed $15.3 million, $12 million and $9.3 million to the Savings Plans in 2000, 1999 and 1998, respectively. Postretirement Benefit Plans The Company and its subsidiaries provide certain postretirement health care benefits for employees who were in the employ of the Company as of January 1, 1988, and life insurance benefits for employees who were in the employ of the Company as of December 1, 1961. The plans cover certain domestic employees and certain key employees in foreign countries. Effective January 1, 1993, the Company's plan covering postretirement medical benefits was amended to place a cap on annual benefits payable to retirees. The coverage is self-insured, but is administered by an insurance company. The Company accrues the expected cost of postretirement benefits other than pensions over the period in which the active employee s become eligible for such postretirement benefits. The net periodic expense for these postretirement benefits for 2000, 1999 and 1998 was $2 million, $2 million and $3 million, respectively. The following table sets forth the change in benefit obligation, change in plan assets, funded status and amounts recognized for the Company's postretirement benefit plans in the consolidated balance sheet at December 31, 2000 and 1999: (Dollars in thousands) 2000 1999 --------------------- Change in benefit obligation Beginning obligation $ 38,835 $ 41,793 Service cost 493 477 Interest cost 2,963 2,795 Participant contributions 90 90 Benefits paid (3,931) (2,020) Plan amendments (625) -- Actuarial gain 3,623 (4,300) -------------------- Ending obligation 41,448 38,835 -------------------- Change in plan assets Beginning fair value -- -- Actual return on plan assets -- -- Employer contributions 3,841 1,930 Participant contributions 90 90 Benefits paid (3,931) (2,020) -------------------- Ending fair value -- -- -------------------- Funded status of the plans (41,448) (38,835) Unrecognized net actuarial gain (5,370) (9,440) Unrecognized prior service cost (1,532) (1,951) -------------------- Net amount recognized $(48,350) $(50,226) ==================== - 132 - Discount rates of 7.5% in 2000, 7.5% to 7.75% in 1999, and 6.75% in 1998 and salary increase assumption of 5% to 6% in 2000 and 4% to 6% in 1999 and 1998 were used in determining the accumulated postretirement benefit obligation. A 5% to 6.7% and a 7% to 7.4% increase in the cost of covered health care benefits were assumed for 2000 and 1999, respectively. This rate is assumed to decrease incrementally to approximately 5.5% in the year 2002 and remain at that level thereafter. The health care cost trend rate assumption does not have a significant effect on the amounts reported. Postemployment Benefits In accordance with SFAS 112, "Employers' Accounting for Postemployment Benefits", the Company accrues costs relating to certain benefits including severance, worker's compensation and health care coverage over an employee's service life. The Company's liability for postemployment benefits totaled approximately $83 million and $67 million at December 31, 2000 and 1999, respectively, and is included in deferred compensation and reserve for termination allowances. The net periodic expe nse recognized in 2000, 1999 and 1998 was approximately $29 million, $34 million and $32 million, respectively. NOTE 9: SHORT -TERM BORROWINGS The Company and its domestic subsidiaries have lines of credit with various banks including new facilities as discussed in Note 10. These credit lines permit borrowings at fluctuating interest rates determined by the banks. Short-term borrowings by subsidiaries outside the United States principally consist of drawings against bank overdraft facilities and lines of credit. These borrowings bear interest at the prevailing local rates. Where required, the Company has guaranteed the repayment of these borrowings. Unused lines of credit by the Company and its subsidiaries at December 31, 2000 and 1999 aggregated approximately $1 billion and $500 million, respectively. The weighted-average interest rate on outstanding balances at December 31, 2000 and 1999 were approximately 6.7% and 5.8%, respectively. Current maturities of long-term debt are included in the payable to banks balance. NOTE 10: LONG-TERM DEBT Long-term debt at December 31 consisted of the following: (Dollars in thousands) 2000 1999 --------------------- Convertible Subordinated Notes - 1.87% $ 311,860 $304,076 Convertible Subordinated Notes - 1.80% 221,244 214,414 Term loans - 5.64% to 7.91% (4.20% to 7.91% in 1999) 273,996 289,621 Syndicated Multi-Currency Credit Agreement - 7.0% 160,000 -- Senior Notes Payable to Banks under a Revolving Credit Agreement Due March 2003 - 4.3% to 6.9% -- 35,603 Senior Notes Payable - 6.83% to 7.52% -- 102,000 Subordinated Notes - 9.84% -- 25,000 Senior Unsecured Note - 7.88% 500,000 -- Germany mortgage note payable - 7.6% 24,537 26,779 Other mortgage notes payable and long-term loans - 3.0% to 11.0% 67,215 75,026 --------------------- 1,558,852 1,072,519 Less: current portion 53,791 23,912 --------------------- Long-term debt $1,505,061 $1,048,607 ===================== - 133 - On June 1, 1999, the Company issued $361 million face amount of Convertible Subordinated Notes due 2006. The 2006 notes were issued at an original price of 83% of the face amount, generating proceeds of approximately $300 million. The notes are convertible into 6.4 million shares of the Company's common stock at a conversion rate of 17.616 shares per $1,000 face amount. On September 16, 1997, the Company issued $250 million face amount of Convertible Subordinated Notes due 2004 with a coupon rate of 1.80%. The 2004 Notes were issued at an original price of 80% of the face amount, generating proceeds of approximately $200 million. The notes are convertible into 6.7 million shares of the Company's common stock at a conversion rate of 26.772 shares per $1,000 face amount. On June 27, 2000, the Company entered into a syndicated multi-currency credit agreement under which a total of $750 million may be borrowed; $375 million may be borrowed under a 364-day facility and $375 million under a five -year facility. The facilities bear interest at variable rates based on either LIBOR or a bank's base rates, at the Company's option. As of December 31, 2000, approximately $174 million had been borrowed under the facilities. Of this amount $160 million is included as long-term debt at December 31, 2000. The proceeds from the syndicated credit agreement were used to refinance borrowings and for general corporate purposes including acqu isitions and other investments. Some of the pre-existing borrowing facilities were subsequently terminated. On October 20, 2000, the Company completed the issuance and sale of $500 million principal amount of senior unsecured notes due 2005. The notes bear an interest rate of 7.875% per annum. The Company used the net proceeds of approximately $496 million from the sale of the notes to repay outstanding indebtedness under its credit facilities. Under various loan agreements, the Company must mainta in specified levels of net worth and meet certain cash flow requirements and is limited in its level of indebtedness. The Company has complied with the limitations under the terms of these loan agreements. Long-term debt maturing over the next five years and thereafter is as follows: 2001-$53.8 million; 2002-$112.5 million; 2003-$30.8 million; 2004-$259.2 million; 2005 -$667.3 million and $435.2 million thereafter. See Note 13 for discussion of fair market value of the Company's long-term debt. NOTE 11: RESTRUCTURING AND OTHER MERGER RELATED COSTS During 2000, the Company recorded pre-tax restructuring and other merger related costs of $116.1 million ($72.9 million net of tax). Of the total pre-tax restructuring and other merger-related costs, cash charges represented $84 million. The key components of the charge were the costs associated with the restructuring of Lowe Lintas & Partners Worldwide. The remaining costs relate principally to transaction and other merger related costs arising from the merger with NFO. In October 1999, the Company announced the merger of two of its advertising networks. The networks affected, Lowe & Partners Worldwide and Ammirati Puris Lintas, were combined to form a new agency network called Lowe Lintas & Partners Worldwide. The merger involved the consolidation of operations in Lowe Lintas agencies in approximately 24 cities in 22 countries around the world. As of September 30, 2000, all restructuring activities had been completed. - 134 - A summary of the components of the reserve for restructuring and other merger-related costs for Lowe Lintas is as follows: (Dollars in millions) Year to Date December 31, 2000 ------------------------------------------------------ Balance Expense Cash Asset Balance at 12/31/99 recognized Paid Write-offs Reclassifications at 12/31/00 ----------- ---------- ---- ---------- ----------------- ----------- Severance and termination costs $43.6 $32.0 $(46.7) $ -- $(17.2) $11.7 Fixed asset write-offs 11.1 14.2 -- (25.3) -- -- Lease termination costs 3.8 21.1 (10.1) -- -- 14.8 Investment write-offs and other 23.4 20.5 (6.4) (37.5) -- -- --------------------------------------------------------------------------- Total $81.9 $87.8 $(63.2) $(62.8) $(17.2) $ 26.5 =========================================================================== The severance and termination costs recorded in 2000 relate to approximately 360 employees who have been terminated or notified that they will be terminated. The remainin g severance and termination amounts will be paid in 2001. The employee groups affected include management, administrative, account management, creative and media production personnel, principally in the U.S. and several European countries. Included in severance and termination costs is an amount of $17.2 million related to non-cash charges for stock options which has been reclassified to additional paid in capital. The fixed asset write-offs relate largely to the abandonment of leasehold improvements as part of the merger. The amount recognized in 2000 relates to fixed asset write-offs in 4 offices, the largest of which is in the U.K. Lease termination costs relate to the offices vacated as part of the merger. The lease terminations have been completed, with the cash portion to be paid out over a period of up to five years. The investment write-offs relate to the loss on sale or closing of certain business units. In 2000, $12.7 million of investment write-offs has been recorded, the majority of which results from the decision to sell or abandon 3 businesses located in Asia and Europe. In the aggregate, the businesses being sold or abandoned represent an immaterial portion of the r evenue and operations of Lowe Lintas & Partners. The write-off amount was computed based upon the difference between the estimated sales proceeds (if any) and the carrying value of the related assets. These sales or closings were completed in mid 2000. In addition to the Lowe Lintas restructuring and other merger related costs noted above, additional charges, substantially all of which were cash costs, were recorded during 2000. These costs relate principally to the non -recurring transaction and other merger related costs arising from the acquisition of NFO. - 135 - NOTE 12: GEOGRAPHIC AREAS Long-lived assets and revenue are presented below by major geographic area: (Dollars in thousands) 2000 1999 1998 ----------------------------------- Long-Lived Assets: United States $2,261,601 $1,784,072 $1,198,067 ----------------------------------- International United Kingdom 506,468 477,774 393,348 All other Europe 778,623 685,521 641,895 Asia Pacific 165,955 151,083 141,113 Latin America 101,901 79,401 58,134 Other 114,487 76,269 50,853 ----------------------------------- Total International 1,667,434 1,470,048 1,285,343 ----------------------------------- Total Consolidated $3,929,035 $3,254,120 $2,483,410 =================================== Revenue: United States $3,073,854 $2,560,161 $2,158,777 ----------------------------------- International United Kingdom 545,207 527,250 450,103 All other Europe 1,088,025 1,140,532 902,602 Asia Pacific 444,411 346,205 325,758 Latin America 266,217 213,260 232,940 Other 208,131 190,415 148,477 ----------------------------------- Total International 2,551,991 2,417,662 2,059,880 ----------------------------------- Total Consolidated $5,625,845 $4,977,823 $4,218,657 =================================== Revenue is attributed to geographic areas based on where the services are performed. Property and equipment is allocated based upon physical location. Intangible assets, other assets, and investments are allocated based on the location of the related operation. The largest client of the Company contributed approximately 7% in 2000, 7% in 1999 and 7% in 1998 to revenue. The Company's second largest client contributed approximately 3% in 2000, 4% in 1999, and 4% in 1998 to revenue. Consolidated net income includes (gains)/losses from exchange and translation of foreign currencies of ($1.4) million, $6.7 million and $4.3 million in 2000, 1999 and 1998, respectively. NOTE 13: FINANCIAL INSTRUMENTS Financial assets, which include cash and cash equivalents, marketable securities and receivables, have carrying values which approximate fair value. Long -term equity securities, included in other investments and miscellaneous assets in the Consolidated Balance Sheet, are deemed to be available-for-sale as defined by SFAS 115 and accordingly are reported at fair value, with net unrealized gains and losses reported within stockholders' equity. - 136 - The following table summarizes net unrealized gains and losses on marketable securities before taxes at December 31: (Dollars in millions) 2000 1999 1998 --------------------------- Cost $217.1 $172.3 $121.3 Unrealized gains / (losses) - gains 1.1 302.3 20.2 - losses (94.9) (12.2) (1.5) --------------------------- Net unrealized gains / (losses) (93.8) 290.1 18.7 --------------------------- Fair market value $123.3 $462.4 $140.0 =========================== Net of tax, net unrealized holding gains (losses) were $(55) million, $168 million and $10 million at December 31, 2000, 1999 and 1998, respectively. Financial liabilities with carrying values approximating fair value include accounts payable and accrued expenses, as well as payable to banks and long -term debt. As of December 31, 2000, the 1.87% Convertible Subordinated Notes due 2006 had a cost basis of $312 million with a market value of $339 million, and the 1.80% Convert ible Subordinated Notes due 2004 had a cost basis of $221 million with a market value of $293 million. As of December 31, 1999, the 1.87% Convertible Subordinated Notes due 2006 had a cost basis of $304 million with a market value of $416 million, and the 1.80% Convertible Subordinated Notes due 2004 had a cost basis of $214 million with a market value of $392 million. The fair values were determined by obtaining quotes from brokers (refer to Note 10 for additional information on long -term debt). On October 20, 2000, the Company completed the issuance and sale of $500 million principal amount of senior unsecured notes due 2005. As of December 31, 2000, the market value of this note was $509 million. The notes bear an interest rate of 7.875% per annum. The Company occasionally uses forwards and options to hedge a portion of its net investment in foreign subsidiaries and certain intercompany transactions in order to mitigate the impact of changes in foreign exchange rates on working capital. The notional value and fair value of all outstanding forwards and options contracts at the end of the year as well as the net cost of all settled contracts during the year were not significant. NOTE 14: COMMITMENTS AND CONTINGENCIES At December 31, 2000 the Company's subsidiaries operating primarily outside the United States were contingently liable for discounted notes receivable of $9.7 million. The Company and its subsidiaries lease certain facilities and equipment. Gross rental expense amounted to approximately $326 million for 2000, $293 million for 1999 and $257 million for 1998, which was reduced by sublease income of $14.6 million in 2000, $17.2 million in 1999 and $16.4 million in 1998. - 137 - Minimum rental commitments for the rental of office premises and equipment under noncancellable leases, some of which provide for rental adjustments due to increased property taxes and operating costs for 2001 and thereafter, are as follows: (Dollars in thousands) Gross Rental Sublease Commitment Income ---------- ------ Period 2001 $228,351 $13,421 2002 206,390 11,265 2003 168,093 7,513 2004 150,005 2,500 2005 133,633 1,725 2006 and thereafter 596,633 6,108 Certain of the Company's acquisition agreements provide for deferred payments by the Company, contingent upon future revenues or profits of the companies acquired. Such contingent amounts would not be material taking into account the future revenues or profits of the companies acquired. The Company and certain of its subsidiaries are party to various tax examinations, some of which have resulted in assessments. The Company intends to vigorously defend any and all assessments and believes that additional taxes (if any) that may ultimately result from the settlement of such assessments or open examinations would not have a material adverse effect on the consolidated financial statements. The Company is involved in legal and administrative proceedings of various types. While any litigation contains an element of uncertainty, the Company believes that the outcome of such proceedings or claims will not have a material adverse effect on the Company. Note 15 SUBSEQUENT EVENT On March 19, 2001, the Company entered into an agreement to acquire True North Communications Inc. ("True North"), a global provider of advertising and communication services. Under the terms of the agreement, True North shareholders will receive 1.14 shares of Interpublic stock for each share of True North stock. The transaction is subject to certain conditions, including the receipt of approval from True North's shareholders and applicable regulatory approval. The acquisition, which is expected to close mid year, will be accounted for as a pooling of interests. - 138 -  SELECTED FINANCIAL DATA FOR FIVE YEARS (Amounts in Thousands Except Per Share Data) 2000 1999 1998 1997 1996 ---- ---- ---- ---- ---- OPERATING DATA Revenue $ 5,625,845 $ 4,977,823 $ 4,218,657 $ 3,610,706 $ 3,053,926 Operatin g expenses 4,792,323 4,315,144 3,646,061 3,195,564 2,695,038 Restructuring and other merger related costs 116,131 84,183 -- -- -- Deutsch transaction costs 44,715 -- -- -- -- Special compensation charge -- -- -- 32,229 -- Interest expense 109,111 81,341 64,296 59,820 53,321 Provision for income taxes 273,034 243,971 245,636 197,665 166,244 Net Income $ 358,658 $ 331,287 $ 339,907 $ 224,184 $ 228,914 PER SHARE DATA Basic Net Income $ 1.18 $ 1.11 $ 1.15 $ .79 $ .81 Weighted -average shares 303,192 297,992 294,756 283,796 284,219 Diluted Net Income $ 1.15 $ 1.07 $ 1.12 $ .76 $ .78 Weighted -average shares 312,653 308,840 305,134 301,602 300,802 FINANCIAL POSITION Working capital $ (80,027) $ 170,976 $ 96,881 $ 244,361 $ 149,919 Total assets $10,238,222 $ 9,247,044 $ 7,526,563 $ 6,254,577 $ 5,253,456 Total long-term debt $ 1,505,061 $ 1,048,607 $ 706,444 $ 554,550 $ 423,459 Book value per share $ 6.50 $ 5.75 $ 4.71 $ 3.79 $ 3.34 OTHER DATA Cash dividends - Interpublic $ 109,086 $ 90,424 $ 76,894 $ 61,242 $ 51,786 Cash dividends per share - Interpublic $ .37 $ .33 $ .29 $ .25 $ .22 Number of employees 48,200 42,600 38,100 33,000 27,000 ---------------------------------------------------------------- Prior year data has been restated to reflect the aggregate effect of the acquisitions accounted for as poolings of interests. - 139 -  RESULTS BY QUARTER (UNAUDITED) (Amounts in Thousands Except Per Share Data) 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 2000 1999 2000 1999 2000 1999 2000 1999 -------------------------------------------------------------- ----------------------------------------------- Revenue $1,225,365 $1,037,860 $1,446,538 $1,249,641 $1,353,081 $1,172,875 $1,600,861 $1,517,447 Operating expenses 1,107,868 944,013 1,147,332 995,159 1,178,581 1,038,041 1,358,542 1,337,931 Restructuring and other merger related charges 36,051 -- 52,775 -- 27,305 -- -- 84,183 Deutsch transaction costs -- -- -- -- -- -- 44,715 -- Income from operations 81,446 93,847 246,431 254,482 147,195 134,834 197,604 95,333 Interest expense (20,414) (17,475) (22,082) (20,591) (32,339) (21,714) (34,276) (21,561) Other income, net 17,011 12,884 29,274 29,213 16,676 15,151 31,380 46,314 Income before provision for income taxes 78,043 89,256 253,623 263,104 131,532 128,271 194,708 120,086 Provision for income taxes 31,382 35,765 105,565 104,208 53,298 52,295 82,789 51,703 Net equity interests (3,726) (2,386) (5,597) (6,203) (8,156) (4,364) (8,735) (12,506) ------------------------------------------------------------------------------------------------------------- Net income $ 42,935 $ 51,105 $ 142,461 $ 152,693 $ 70,078 $ 71,612 $ 103,184 $ 55,877 ============================================================================================================= Per share data: Basic EPS $ .14 $ .17 $ .47 $ .51 $ .23 $ .24 $ .34 $ .19 Diluted EPS $ .14 $ .17 $ .46 $ .49 $ .22 $ .23 $ .33 $ .18 Cash dividends per share - Interpublic $ .085 $ .075 $ .095 $ .085 $ .095 $ .085 $ .095 $ .085 Weighted-Average Shares: Basic 299,822 296,457 300,363 298,126 305,929 298,688 306,653 298,698 Diluted 310,522 307,701 323,161 317,381 314,958 309,298 321,715 309,790 Stock price: High $55 9/16 $40 $48 1/4 $ 43 5/16 $44 5/8 $44 1/16 $43 3/4 $58 1/16 Low $37 $34 7/8 $38 $ 34 19/32 $33 1/2 $36 1/2 $33 1/16 $35 3/4 ------------------------------------------------------------------------------------------------------------- Prior year data has been restated to reflect the aggregate effect of the acquisitions accounted for as poolings of interests. - 140 -  REPORT OF MANAGEMENT The financial statements, including the financial analysis and all other information in this Annual Report, were prepared by management, who is responsible for their integrity and objectivity. Management believes the financial statements, which require the use of certain estimates and judgments, reflect the Company's financial position and operating results in conformity with generally accepted accounting principles. All financial information in this Annual Report is consistent with the financial statements. Management maintains a system of internal accounting controls which provides reasonable assurance that, in all material respects, assets are maintained and accounted for in accordance with management's authorization, and transactions are recorded accurately in the books and records. To assure the effectiveness of the internal control system, the organizational structure provides for defined lines of responsibility and delegation of authority. The Finance Committee of the Board of Directors, which is comprised of the Company's Chairman and Chief Financial Officer and three outside Directors, is responsible for defining these lines of responsibility and delegating the authority to management to conduct the day-to-day financial affairs of the Company. In carrying out its duties, the Finance Committee primarily focuses on monitoring financial and operational goals and guidelines; approving and monitoring specific proposals for acquisitions; approving capital expenditures; working capital, cash and balance sheet management; and overseeing the hedging of foreign exchange, interest-rate and other financial risks. The Committee meets regularly to review presentations and reports on these and other financial matters to the Board. It also works closely with, but is separate from, the Audit Committee of the Board of Directors. The Company has formally stated and communicated policies requiring of employees high ethical standards in their conduct of its business. As a further enhancement of the above, the Company's comprehensive internal audit program is designed for continual evaluation of the adequacy and effectiveness of its internal controls and measures adherence to established policies and procedures. The Audit Committee of the Board of Directors is comprised of four directors who are not employees of the Company. The Committee reviews audit plans, internal controls, financial reports and related matters, and meets regularly with management, internal auditors and independent accountants. The independent accountants and the internal auditors have free access to the Audit Committee, without management being present, to discuss the results of their audits or any other matters. The independent accountants, PricewaterhouseCoopers LLP, were recommended by the Audit Committee of the Board of Directors and selected by the Board of Directors, and their appointment was ratified by the stockholders. The independent accountants have examined the financial statements of the Company and their opinion is included as part of the financial statements. - 141 - EXHIBIT 21 PAGE 1 MARCH 21, 2001 NAME PERCENTAGE OF VOTING SECURITIES JURISDICTION OWNED BY UNDER WHICH IMMEDIATE ORGANIZED PARENT (%) IMM EDIATE PARENT ------------ ---------- ------------------ DOMESTIC: The Interpublic Group of Companies, Inc. Delaware - - (Registrant) Access Communications, LLC California 50 Shandwick Public Affairs, Inc. Lowe Biocore Inc. California 100 Lowe Group Holdings Inc. Bragman Nyman Cafarelli, Inc. California 100 Registrant Bragman Nyman Cafarelli LLC California 100 Bragman Nyman Cafarelli, Inc. Casablanca Productions' California 100 Registrant Casanova Pendrill Publicidad, Inc. California 100 Registrant CLS Sports Inc. California 100 Registrant Conan Entertainment LLC California 50 Western Int'l Syndication Corp . Creative Color, Inc. California 100 Graphic Orb, Inc. Dailey & Associates, Inc. California 100 Registrant Deutsch LA, Inc. California 100 DA Acquisition Corp. Eidolon Corporation California 100 Registrant Goldberg, Moser, O'Neill LLC California 80 Lowe & Partners/SMS Inc. Graphic Orb, Inc. California 100 Registrant International Business Services, Inc. California 100 Infoplan Int'l, Inc. Initiative Media Corp. California 100 Registrant Kaleidoscope Films, Inc. California 51 Re gistrant Main Street Media, LLC California 100 Western Int'l Media Corp. North Light, Ltd. California 100 Dailey & Assoc., Inc. Octagon CLS Sports Corp. California 100 Registrant Octagon Sullivan & Sperbeck Corp. California 100 Registrant Outdoor Advertising Group, Inc. California 100 Registrant PIC-TV & Associates, Inc. California 100 Initiative Media Worldwide, Inc. PMK, Inc. California 100 Registrant Sagon-Phior California 100 Registrant SMS Productions, Inc. Cali fornia 100 Registrant Suissa Miller Advertising LLC California 80 Lowe Group Holdings Inc. Sullivan & Sperbeck California 100 Registrant The FutureBrand Company, Inc. California 100 Registrant The Phillips -Ramsey Co. California 100 Registrant Western Int'l Advocacy Group California 100 Registrant Western Int'l Syndication Corp. California 100 Registrant Western Motivational Incentives Group California 100 Western Int'l Media Corp. Western Traffic, Inc. California 100 Registrant Momentum-NA, Inc. Colorado 100 McCann-Erickson USA, Inc. ClinARC Co. Connecticut 100 Registrant Adair Greene, Inc. Delaware 10 0 McCann-Erickson USA, Inc. Advantage Int'l Holdings, Inc. Delaware 100 Registrant AG Multimedia LLC Delaware 55 DraftWorldwide, Inc. Ammirati Puris Lintas Inc. Delaware 100 Registrant - 142 - EXHIBIT 21 PAGE 2 MARCH 21, 2001 NAME PERCENTAGE OF VOTING SECURITIES JURISDICTION OWNED BY UNDER WHICH IMMEDIATE ORGANIZED PARENT (%) IMMEDIATE PARENT ------------ ---------- ------------------ DOMESTIC: Ammirati Puris Lintas USA, Inc. Delaware 100 Registrant Anderson & Lembke, Inc. Delaware 100 Registrant Angotti, Thomas, Hedge, Inc. Delaware 100 Registrant Asset Recovery Group, Inc. Delaware 100 Registrant Barbour Griffith & Rogers, Inc. Delaware 100 Registrant BrandFutures, LLC Delaware 50 FutureBrand Company, Inc. BSG Holding LLC Delaware 100 Protech Holdings Business Science Research Corp., Inc. Delaware 100 Registrant Campbell-Ewald Company Delaware 100 Registrant Campbell Mithun Esty LLC Delaware 75 Registrant Capita Technologies, Inc. Delaware 86 Registrant Columbian Advertising, Inc. Delaware 100 Registrant CrossMediaCEM, Inc. Delaware 100 Registrant Digital Cafe LLC Delaware 100 Campbell Mithun Esty, LLC DraftWorldwide, Inc. Delaware 100 Registrant GDI Holdings LLC Delaware 100 Protech Holdings, Inc. Global Event Marketing & Management (GEMM) Inc. Delaware 100 Registrant Golin/Harris International Inc. Delaware 100 Shandwick N. Amer. Holding Co. Inc. Gravity Sports & Entertainment LLC Delaware 100 Registrant Healthcare Capital, Inc. Delaware 100 McCann Healthcare, Inc. Hill, Holliday, Connors, Cosmopulos, Inc. Delaware 100 Registrant Hypermedia Solutions, LLC Delaware 55 The Coleman Group, LLC ICN Acquisition Corp. Delaware 100 Registrant Icon-Nicholson, Inc. Delaware 100 Registrant Industry Entertainment, LLC Delaware 51 Registrant Industry Entertainment Management, LLC Delaware 100 Industry Entertainment, LLC Industry Entertainment Productions, LLC Delaware 100 Industry Entertainment, LLC Infoplan International, Inc. Delaware 100 Registrant Interpublic Game Shows, Inc. Delaware 100 Registrant Interpublic KFI Ventures, Inc. Delaware 100 Registrant Interpublic SV Ventures, Inc. Delaware 100 Registrant IPG DC Ventures, Inc. Delaware 100 Registrant IPG Interactive Investment Corp. Delaware 100 Registrant IPG S&E, Inc. Delaware 100 Registrant IPG S&E Ventures, Inc. Delaware 100 Registrant Jack Morton Worldwide Inc. Delaware 100 Registrant Jack Tinker Advertising, Inc. Delaware 100 Registrant Jay Advertising, Inc. Delaware 100 Registrant JMP Holding Company, Inc. Delaware 100 Registrant KAL Acquisition Corp. Delaware 100 Registrant Kaleidoscope Sports and Entertainment LLC Delaware 100 Registrant - 143 - EXHIBIT 21 PAGE 3 MARCH 21, 2001 NAME PERCENTAGE OF VOTING SECURITIES JURISDICTION OWNED BY UNDER WHICH IMMEDIATE ORGANIZED PARENT (%) IMMEDIATE PARENT ------------ ---------- ------------------ DOMESTIC: LFS, Inc. Delaware 100 Registrant Lowe Fox Pavlika Inc. Delaware 100 Lowe & Partners/SMS Inc. Lowe & Partners/SMS Interactive Inc. Delaware 100 Lowe & Partners/SMS Inc. LMMS-USA, Inc. Delaware 100 McCann-Erickson USA, Inc. Market Reach Retail LLC Delaware 50 Skott, Inc. MarketCorp Promotions, Inc. Delaware 100 DraftWorldwide, Inc. Marketing Corporation of America Delaware 100 Registrant McAvey & Grogan, Inc. Delaware 100 Registrant McCann-Erickson USA, Inc. Delaware 100 Registrant McCann-Erickson Corporation (S.A.) Delaware 100 Registrant McCann-Erickson Corporation (Int'l) Delaware 100 Registrant McCann-Erickson (Paraguay) Co. Delaware 100 Registrant McCann-Erickson Worldwide, Inc. Delaware 100 Registrant McCann Healthcare, Inc. Delaware 100 McCann-Erickson USA, Inc. McCann Worldwide Marketing Communications Co. Delaware 100 Registrant Media Inc. Delaware 100 Registrant Media Direct Partners, Inc. Delaware 100 Media, Inc. Media Partnership Corporation Delaware 100 Registrant M. Gould Co., Inc. Delaware 100 Registrant Miller/Huber Relationship Marketing LLC Delaware 80 Lowe Group Holdings Inc. Murphy Pintak Gautier Hudome Agency, Inc. Delaware 100 Registrant NAS Recruitment Comm. Services, Inc. Delaware 100 McCann-Erickson USA, Inc. Newspaper Services of America, Inc. Delaware 100 Registrant NFO Worldwide, Inc. Delaware 100 Registrant Octagon Baseball, Inc. Delaware 100 Octagon Worldwide, Inc. Octagon CSI Inc. Delaware 100 Octagon CSI Limited Octagon Worldwide Inc. Delaware 100 Registrant Octagon Worldwide Brazil Inc. Delaware 100 Octagon Worldwide Inc. Pedersen & Gesk, Inc. Delaware 100 McCann-Erickson USA, Inc. Player, LLC Delaware 51 Registrant Player Development LLC Delaware 100 Player LLC Player Management LLC Delaware 100 Player LLC Powell Tate Inc. Delaware 100 The Cassidy Companies, Inc. Protech Holdings, Inc. Delaware 100 Capita Technologies, Inc. RABA Holdings LLC Delaware 100 Protech Holdings, Inc. Regan, Campbell & Ward LLC Delaware 60 McCann-Erickson Worldwide USA, Inc. R Works, Inc. Delaware 100 Registrant R.O.I. Research, LLC Delaware 100 Kaleidoscope Sports & Entertainment RX Media, Inc. Delaware 100 Registrant Shandwick N. America Holding Co. Ltd. Delaware 100 Shandwick Investments Ltd. Skott, Inc. Delaware 100 Newspaper Services of America, Inc. The Botway Group, Ltd. Delaware 100 Registrant The Cassidy Companies, Inc. Delaware 100 Registrant - 144 - EXHIBIT 21 PAGE 4 MARCH 21, 2001 NAME PERCENTAGE OF VOTING SECURITIES JURISDICTION OWNED BY UNDER WHICH IMMEDIATE ORGANIZED PARENT (%) IMMEDIATE PARENT ------------ ---------- ------------------ DOMESTIC: The Coleman Group, LLC Delaware 100 Registrant The Coleman Group Worldwide LLC Delaware 100 Registrant The Gillespie Holding Company, Inc. Delaware 100 The Gillespie Organization, Inc. The ISO Healthcare Group, Inc. Delaware 100 Registrant The Lowe Group, Inc. Delaware 100 Lowe Worldwide Holdings B.V. The MWW Group, Inc. Delaware 100 Registrant The Publishing Agency, Inc. Delaware 100 Registrant The Publishing Agency International, Inc. Delaware 100 Registrant The Works, LLC Delaware 100 Kaleidoscope Sports & Enter. LLC Thunder House Online Marketing Communications, Inc. Delaware 100 Registrant Weller & Klein Research, Inc. Delaware 100 Registrant WPR Acquisition Corp. Delaware 100 McCann-Erickson USA, Inc. Zentropy Partners, Inc. Delaware 86 Registrant H&C Holdings Limited District of Columbia 100 Advantage Int'l Holdings, Inc. Octagon Financial Services District of 100 Advantage Int'l Holdings, Inc. Columbia Octagon Marketing & Athlete Representation, Inc. District of 100 Advantage Int'l Holdings, Inc. Columbia Rowan & Blewitt, Inc. District of 100 Registrant Columbia Shandwick Public Affairs Inc. District of 100 Shandwick N. Amer. Holding Co. Inc. Columbia Accent Marketing Florida 51 Registrant (51%) and Communications, LLC individual Shareholder (49%) Ben Disposition, Inc. Florida 100 LFS, Inc. Rubin Barney & Birger, Inc. Florida 100 Registrant Austin Kelley Advertising, Inc. Georgia 100 Registrant Clockwork Advertising, Inc. Georgia 100 Adair Greene, Inc. Fitzgerald & Company Georgia 100 Registrant Studio "A", Inc. Georgia 100 Registrant Creative Retail Environments Worldwide, Inc. Illinois 100 Kevin Berg & Assoc., Inc. Group III Promotions Illinois 100 Registrant Kevin Berg & Associates, Inc. Illinois 100 Registrant Quest Futures Group, Inc. Kansas 100 Registrant Adware Systems, Inc. Kentucky 100 McCann-Erickson USA, Inc. Hill Holiday Exhibition Massachusetts 100 Hill, Holliday, Connors, Services, Inc. Cosmopulos, Inc. Lowe Grob Health & Science, Inc Massachusetts 80 Lowe Group Holdings Inc. MSP Group, Inc. Massachusetts 100 Hill, Holliday, Connors, Cosmopulos, Inc. Mullen Advertising Inc. Massachusetts 80 Lowe Group Holdings Inc. Neva Group, Inc. Massachusetts 100 Registrant Planet Interactive, Inc. Massachusetts 100 Jack Morton Worldwide Weber Group, Inc. Massachusetts 100 WPR Acquisition Corp. - 145 - EXHIBIT 21 PAGE 5 MARCH 21, 2001 NAME PERCENTAGE OF VOTING SECURITIES JURISDICTION OWNED BY UNDER WHICH IMMEDIATE ORGANIZED PARENT (%) IMMEDIATE PARENT ------------ ---------- ------------------ DOMESTIC: Allied Med Comm., Inc. New Jersey 100 MPE Communications, Inc. Biogenesis Communications, Inc. New Jersey 100 Registrant Complete Medical Communications, Inc. New Jersey 90 Complete Med. Comm. Int'l Ltd. CPR Financial Communications New Jersey 100 Shandwick USA, Inc. Curry, Martin and Schiavelli, Inc. New Jersey 100 Registrant Genquest, Biomedical Educ. Serv., Inc. New Jersey 100 Biogenesis Communications, Inc. Gillespie, Advertising, Magazine Mktg. & Public Relations, Inc. New Jersey 100 Registrant Global Healthcare Associates, Inc. New Jersey 100 Registrant HealthVizion Communications, Inc. New Jersey 100 Torre Lazur, Inc. Horizon Communications, Inc. New Jersey 100 McCann-Erickson USA, Inc. Integrated Communications Corp. New Jersey 100 Registrant International Oncology Network, Inc. New Jersey 100 Torre Lazur, Inc. Interpublic, Inc. New Jersey 100 Registrant MPE Communications, Inc. New Jersey 100 Registrant MWW, Inc. New Jersey 100 Registrant Pace, Inc. New Jersey 100 Registrant Sound Vision, Inc. New Jersey 100 Torre Lazur, Inc. Spectral Fusion, Inc. New Jersey 100 Torre Lazur, Inc. The Gillespie Organization, Inc. New Jersey 100 Registrant Torre Lazur Healthcare Group, Inc. New Jersey 100 Registrant Zoot Suit Kids, Inc. New Jersey 100 Gillespie Advertising Magazine Mktg. & Public Relations, Inc. ABP/DraftWorldwide, Inc. New York 100 Registrant Botway Print Advert., Inc. New York 100 Registrant Bragman Nyman Cafarelli N.Y.C., Inc. New York 100 Bragman Nyman Cafarelli LLC D.L. Blair, Inc. New York 100 Registrant DA Acquisition Corp. New York 100 DA Parent Acquisition Corp. DA Parent Acquisition Corp. New York 100 Registrant Decipher Consulting Inc. New York 100 Decipher Ltd. Deutsch Direct, Inc. New York 100 DA Acquisition Corp. Deutsch Inc. New York 100 DA Acquisition Corp. Deutsch LA, Inc. New York 100 DA Acquisition Corp. Direct Approach Mktg. Services, Inc. New York 100 McCann. Erickson USA, Inc. DRush LLC New York 50 dShare Inc. DShare Inc. New York 100 Deutsch Inc. GDL, Inc. New York 100 The Lowe Group, Inc.(100% of Common Stock) and Goldschmidt Dunst & Lawson Corp. (100% Pref. Stock) - 146 - EXHIBIT 21 PAGE 6 MARCH 21, 2001 NAME PERCENTAGE OF VOTING SECURITIES JURISDICTION OWNED BY UNDER WHICH IMMEDIATE ORGANIZED PARENT (%) IMMEDIATE PARENT ------------ ---------- ------------------ DOMESTIC: GlobalComm Group, Inc. New York 100 Registrant Goldschmidt Dunst & Lawson Corp. New York 100 The Lowe Group, Inc. Herbert Zeltner, Inc. New York 100 Registrant Jones Films, Inc. New York 100 DA Acquisition Corp. LCF&L, Inc. New York 100 The Lowe Group, Inc. (99.9%) and GDL, Inc. (.1%) Lowe Diamond Art Studio New York 100 Lowe Diamond Marketing Group, Inc. Lowe Diamond Marketing Group New York 100 The Lowe Group, Inc. Lowe Diamond Promotion Group New York 100 Lowe Diamond Marketing Group, Inc. Lowe Group Holdings, Inc. New York 100 Registrant Lowe Healthcare PR, LLC New York 50 Lowe McAdams Healthcare, Inc. Lowe McAdams Healthcare Inc. New York 100 Lowe Group Holding Inc. Lowe & Partners/SMS Inc. New York 100 Lowe Int'l (16%), Lowe Worldwide Holdings B.V. (4%) and Registrant (80%) Ludgate Communications, Inc. New York 100 Ludgate Group Limited McCann Relationship Marketing, Inc. New York 100 Registrant McCann-Erickson Marketing, Inc. New York 100 Registrant Mr. Editorial, Inc. New York 100 DA Acquisition Corp. PDG Acquisition Corp. New York 100 Registrant Production Design Group Ltd. New York 100 Jack Morton Worldwide Promotion & Merchandising, Inc. New York 100 D.L. Blair, Inc. Shandwick USA Inc. New York 100 Shandwick N. Amer. Holding Co. Inc. The Coleman Group, LLC New York 100 Registrant The Gotham Group, Inc. New York 100 Registrant The Sloan Group New York 100 Kevin Berg & Associates Western Trading LLC New York 55 Western Init. Media Worldwide Western Trading/Cushman & Wakefield LLC New York 83 Western Trading, LLC Western WW Trading, LLC New York 55 Western Init. Media Worldwide Long Haymes Carr, Inc. N. Carolina 100 Registrant F&S Disposition, Inc. Ohio 100 Ammirati Puris Lintas Inc. Nationwide Advertising Services, LLC Ohio 100 McCann-Erickson USA, Inc. ICP-Pittsburgh Pennsylvania 66.67 Int'l Cycling Productions, Inc. Scientific Frontiers, Inc. Pennsylvania 100 Registrant The Medicine Group USA, Inc. Pennsylvania 100 Registrant Marketing Arts Corporation Virginia 100 The Martin Agency, Inc. Cabell Eanes, Inc. Virginia 100 The Martin Agency, Inc. Pros, Inc. Virginia 100 Advantage Int'l Holdings, Inc. The Martin Agency, Inc. Virginia 100 Lowe & Partners/SMS Inc. Weber McGinn, Inc. Virginia 100 Registrant - 147 - EXHIBIT 21 PAGE 7 MARCH 21, 2001 NAME PERCENTAGE OF VOTING SECURITIES JURISDICTION OWNED BY UNDER WHICH IMMEDIATE ORGANIZED PARENT (%) IMMEDIATE PARENT ------------ ---------- ------------------ FOREIGN: Dial Database Marketing Argentina 60 Interpublic S.A. de Publicidad FutureBrand S.A. Argentina 70 Registrant (70%); Luis Rey (15%); Gustavo Kniszczer (15%) Grupo Nueva Comunicacion SA Argentina 80 Registrant (80%); Cesar Leonardo Mansilla (20%) Interpublic S.A. de Publicidad Argentina 100 Registrant IM Naya Argentina 50 Registrant Nueva Argentina 80 Registrant Promocionar Argentina 60 Interpublic S.A. de Publicidad Adlogic Proprietary Limited Australia 50 Merchant Partners Australia Ltd. Advantage Holdings Australia 100 Advantage Int'l Holdings Inc. Ammirati Puris Lintas Proprietary Ltd. Australia 100 Registrant Ammirati Puris Lintas Melbourne Australia 100 Ammirati Puris Lintas Prop. Ltd. Australia Pty. Ltd. Australia 100 Charcoal Nominees Limited Australian Safari Pty. Limited Australia 100 Octagon Worldwide Pty. Limited CWFS Australia 100 McCann Australia (50%) and McCann-Erickson Ltd.(50%) Directory Investments Pty Ltd. Australia 100 Shandwick Holdings Pty. Ltd. (91%) IPR Shandwick Pty. Ltd. (9%) Direct Response Australia 51 McCann-Erickson Pty. Limited Future Motorsports Concepts Australia 50 Octagon Worldwide Pty. Limited Harrison Advertising Pty Limited Australia 100 McCann-Erickson Advertising Ltd. Impulse Art Proprietary Limited Australia 100 Ammirati Puris Lintas Prop. Ltd. Initiative Media Australia Australia 100 Merchant and Partners Australia Pty. Ltd. Australia 100 Pty. Limited International Public Relations Pty. Ltd. Australia 100 Shandwick Holdings Pty. Ltd. Interpublic Australia Proprietary Ltd. Australia 100 Registrant Interpublic Limited Proprietary Ltd. Australia 100 Registrant IPR Shandwick Pty. Ltd. Australia 100 Shandwick Holdings Pty. Ltd. Lintas: Hakuhodo Pty. Ltd. Australia 50 Ammirati Puris Lintas Prop. Ltd. Marplan Proprietary Limited Australia 100 Registrant McCann-Erickson Advertising Pty. Ltd. Australia 100 Registrant McCann-Erickson Sydney Proprietary Ltd. Australia 100 McCann-Erickson Advertising Ltd. Merchant and Partners Australia Pty. Ltd. Australia 100 Registrant Octagon CSI (Australia) Pty Ltd. Australia 100 Octagon CSI Limited Octagon Worldwide Pty. Limited Australia 80 Advantage Holdings Pty Ltd. Pearson Davis Australia 59 Ammirati Puris Lintas Product Management Pty. Ltd. Australia 100 IPR Shandwick Pty. Ltd. - 148 - EXHIBIT 21 PAGE 8 MARCH 21, 2001 NAME PERCENTAGE OF VOTING SECURITIES JURISDICTION OWNED BY UNDER WHICH IMMEDIATE ORGANIZED PARENT (%) IMMEDIATE PARENT ------------ ---------- ------------------ FOREIGN: Shandwick Holdings Pty. Ltd. Australia 100 Shandwick Investments Ltd. Universal Advertising Placement Pty. Ltd. Australia 100 McCann-Erickson Advertising Ltd. Ammirati Puris Lintas Holdings Gesellschaft m.b.H. Austria 100 Registrant Ammirati Puris Lintas Werbeagentur GmbH Austria 100 Ammirati Puris Lintas Holdings GmbH Initiatives Media Werbemittlung Ges.m.b.H. Austria 100 Ammirati Puris Lintas Werbeagentur Gesellschaft m.b.H. Lowe GGK Beteiligungsverwaltungs AG Austria 100 Lowe Worldwide Holdings BV Lowe GGK Lintas Holding Austria 100 Lowe Beteiligungsverwaltungs AG. Lowe Lintas GGK Werbeagentur Austria 75 Lowe GGK Lintas Holding AG. McCann-Erickson Gesellschaft m.b.H. Austria 100 Registrant Panmedia Holding AG Austria 74 Lowe Worldwide Holdings BV Panmedia Werbeplanung AG Austria 74 Panmedia Holding AG Azerbaijan Azerbaijan 100 Registrant Global Public Relations Ltd. Bahamas 100 Shandwick Asia Pacific Ltd. Advertising Tractor S.A. Belgium 100 Draft Belgium Holding S.P.R.L. (80%) and Karamba S.A. (20%) Direct Creations S.A. Belgium 100 Lowe Lintas & Partners S.A. Draft Belgium Holdings S.P.R.L. Belgium 100 Draft Group Holdings Limited Eleven Pool (KSE) Belgium 100 Interpublic Belgium Holdings SA Feedback S.P.R.L. Belgium 100 DraftWorldwide, Inc. Initiative Media Brussels S.A. Belgium 100 Ammirati Puris Lintas Brussels S.A. (96%) and Initiative Media (4%) Initiative Media Int'l S.A. Belgium 100 Lintas Holding B.V. Karamba S.A. Belgium 100 Draft Belgium Holding S.P.R.L. Lowe Lintas & Partners S.A. Belgium 100 Lowe Worldwide Holdings B.V. McCann-Erickson Co. S.A. Belgium 100 Registrant Octagon Holdings BVBA Holdings BV Belgium 100 Octagon Worldwide Holdings BV Outdoor Services SA.NV Belgium 100 Interpublic Belgium Holdings SA Programming Media Int'l PMI S.A. Belgium 100 Registrant Promo Sapiens S.A. Belgium 100 Draft Belgium Holding S.P.R.L. (85%) and Karamba S.A. (15%) Shandwick Belgium S.A. Belgium 100 Shandwick Investments Ltd. Universal Media, S.A. Belgium 100 McCann-Erickson Co., S.A. (50%); Lowe Lintas & Partners S.A. (50%) The Advanced Marketing Draft Belgium Holding S.P.R.L. Centre S.A. Belgium 100 (0.2%); Karamba S.A. (99.8%) Triad Assurance Limited Bermuda 100 Registrant Bullet Promocoes Ltda. Brazil 60 Interpublic Publicidade e Pesquisas Sociedade Ltda Contemporanea Brazil 60 Interpublic Brazil (54%); Intelan SA (Uruguay) (6%) - 149 - EXHIBIT 21 PAGE 9 MARCH 21, 2001 NAME PERCENTAGE OF VOTING SECURITIES JURISDICTION OWNED BY UNDER WHICH IMMEDIATE ORGANIZED PARENT (%) IMMEDIATE PARENT ------------ ---------- ------------------ FOREIGN: DraftWorldwide Ltda. Brazil 66 DraftWorldwide, Inc. DraftWorldwide Sao Paulo Ltda. Brazil 66 DraftWorldwide, Inc. Interpublic Publicidade e Pesquisas Sociedade Ltda. Brazil 100 Int'l Business Services, Inc. Lowe Lintas & Partners Ltda. Brazil 98.75 Registrant McCann-Erickson Publicidade Ltda. Brazil 100 Registrant MPMPPA Profissionais de Promocao Associados Ltda. Brazil 100 MPM Lintas Communicacoes Ltda. Octagon do Brazil Participacoes S/C Ltda. Brazil 100 Octagon Worldwide Brazil Inc. Sight Brazil 60 McCann-Erickson Italiana S.A. Sun Marketing Direct Brazil 65 Interpublic Publicidade e Pesquisas Sociedade Ltda. TMKT-MRM Servicos de Marketing Ltda. Brazil 55 Interpublic Publicidad e Pesquisas Sociedade Ltda (55%); TMKT Telemarketing S/C Ltda (9%); SMK Servicos de Marketing S/C Ltda (36%); 4 individuals (1% each) Universal Publicidade Ltda. Brazil 100 Interpublic Publicidade E Pesquisas Sociedade Ltda. Asiatic Corporation Brit. Virgin 100 PR Consultants Scotland Ltd. Islands Karting Marketing and Management Corp. Brit. Virgin 51 Octagon Motorsports Ltd. Lowe Holdings BVI Limited Brit. Virgin 100 Lowe Group Holdings Inc. Islands Octagon Asia Inc. Brit. Virgin 100 Octagon Prism Limited Islands Octagon CSI Holdings S.A. Brit. Virgin 100 Communication Services Int'l Islands (Holdings) S.A. Octagon CSI International Holdings S.A. Brit. Virgin 100 Octagon CSI S.A. Islands Octagon Motorsports Limited Brit. Virgin 66.6 Octagon Worldwide Inc. Islands SBK Superbike Brit. Virgin Octagon Motorsports Ltd. (50%); International Limited Islands 100 Octagon Worldwide Inc. (50%) PBI Bulgaria 51 Registrant Adware Systems Canada Inc. Canada 100 Adware Systems, Inc. Ammirati Puris Ltd. Canada 100 Registrant BDDS Groupe Canada 70 Shandwick Canada Calimero Partenariat, Inc. Canada 100 DraftWorldwide Canada, Inc. Cameron McCleery Productions Limited Canada 100 MacLaren McCann Canada Inc. Continental Shandwick Canada Inc. (50%) Communications Inc. Canada 100 Golin/Harris Int'l Inc. (50%) Continental PIR Communications Ltd. Canada 100 Continental Communications Inc. Diefenbach-Elkins Limited Canada 100 Diefenbach-Elkins Dollery Rudman Freibauer Design Canada 75 McClaren McCann - 150 - EXHIBIT 21 PAGE 10 MARCH 21, 2001 NAME PERCENTAGE OF VOTING SECURITIES JURISDICTION OWNED BY UNDER WHICH IMMEDIATE ORGANIZED PARENT (%) IMMEDIATE PARENT ------------ ---------- ------------------ FOREIGN: DraftWorldwide Quebec Inc. Canada 100 DraftWorldwide Canada DRF Canada 75 McClaren McCann Durnan Communications Canada 100 Ammirati Puris Lintas Canada Ltd. Everest Commandities (GECM) Inc. Canada 100 DraftWorldwide Quebec, Inc. Everest Estrie Publicite (GECM) Inc. Canada 100 DraftWorldwide Quebec, Inc. Everest Relations Publiques (GECM) Inc. Canada 100 DraftWorldwide Quebec, Inc. Fuel Canada 100 Messary Induestries Ltd. (33%); DraftWorldwide Canada Inc. (67%) FSA Targeting Inc. Canada 100 Registrant Gingko Direct Ltd. Canada 100 The Gingko Group Ltd. Groupe Everest Canada 100 DraftWorldwide, Inc. Hawgtown Creative Ltd. Canada 100 DraftWorldwide, Inc. HyperMedia Solutions (1998) Inc. Canada 100 Hypermedia Solutions ISOGROUP Canada, Inc. Canada 100 Registrant Kelly Management Group Inc. Canada 100 Octagon Canada Inc. Lambert Multimedia Inc. Canada 100 DraftWorldwide Quebec Inc. Le Groupe BDDS Inc. Canada 70 3707822 Canada, Inc.(70%); Yves St. Amand (7.5%); M. Dumas (7.5%); Yves Dupre (7.5%); Jean-Francois Lebron (7.5%) Lowe Investments Limited Canada 100 Lowe Group Holdings Inc. (54%) Lowe Worldwide Holdings BV (46%) MacLaren McCann Canada Inc. Canada 100 Registrant Octagon Canada Inc. Canada 100 Octagon Worldwide Inc. Pipeline Productions, Inc. Canada 100 Fuel Advertising (40%); DraftWorldwide Canada (60%) P&T Communications Canada 100 Messary Industries Ltd. (49%); DraftWorldwide Canada (51%) Promaction Corporation Canada 100 McCann-Erickson Advert. of Canada Promaction 1986 Inc. Canada 100 MacLaren McCann Canada, Inc. Segal Communications Canada 100 DraftWorldwide, Inc. Sensas (GECM) Inc. Canada 100 DraftWorldwide Quebec Inc. Shandwick Canada Inc. Canada 100 Shandwick Investment of Canada Ltd. Shandwick Investment of Canada Ltd. Canada 100 Shandwick Investments Ltd. The FutureBrand Company Canada 75 MacLaren McCann Canada Inc. The Gingko Group Ltd. Canada 100 DraftWorldwide Canada, Inc. The Medicine Group Limited Canada 51 Complete Medical Group Ltd. Tribu Lintas Inc. Canada 100 MacLaren McCann Canada, Inc. Creactiva Chile 60 DraftWorldwide Chile Limitada Dittborn, Urzueta y Asociados Marketing Chile 60 McCann-Erickson S.A. de Publicidad Directo S.A. DraftWorldwide Chile Ltda. Chile 100 DraftWorldwide Latinoamerica Ltda. DraftWorldwide Latinoamerica Ltda. Chile 100 DraftWorldwide, Inc. Initiative Media Servicios de Medios Ltda. Chile 99 Ammirati Puris Lintas Chile S.A. Lowe (Chile) Holdings SA Chile 100 Lowe & Partners South America Holdings SA - 151 - EXHIBIT 21 PAGE 11 MARCH 21, 2001 NAME PERCENTAGE OF VOTING SECURITIES JURISDICTION OWNED BY UNDER WHICH IMMEDIATE ORGANIZED PARENT (%) IMMEDIATE PARENT ------------ ---------- ------------------ FOREIGN: Lowe & Partners Porta SA Chile 55 Lowe (Chile) Holdings SA (19.3%); Lowe Worldwide Holdings BV (35.71%) McCann-Erickson S.A. de Publicidad Chile 100 Registrant Ammirati Puris Lintas China China 50 Registrant,; Shanghai Bang Da Advtg. Lowe & Partners Live Consultants Ltd. China 90 Lowe & Partners Live Limited McCann-Erickson Guangming Advertising Limited China 51 McCann-Erickson Worldwide Ammirati Puris Lintas Colombia Colombia 100 Registrant Epoca S.A. Colombia 60 Registrant Harrison Publicidad De Colombia S.A. Colombia 100 Registrant Initiative Media Colombia SA Colombia 100 Ammirati Puris Lintas Colombia McCann-Erickson Centroamericana Costa Rica 100 Registrant (Costa Rica) Ltda. McCann-Erickson Zagreb Croatia 100 McCann-Erickson Int'l GmbH McCann-Erickson Prague Aisa Czech Rep. 60 NFO Worldwide, Inc. Ammirati Lintas Praha Spol. S.R.O. Czech Rep. 100 Ammirati Puris Lintas Deutschland Initiative Media Prague sro Czech Rep. 100 Registrant Lowe Lintas GGK spol. Sro Czech Rep. 93 Lowe Lintas GGK Holdings AG McCann-Erickson Prague, Spol. S.R.O. Czech Rep. 100 McCann-Erickson International GmbH Pan Media Western Praha spol Czech Rep. 100 Lowe Lintas GGK Holdings AG Pool Media International srl Czech Rep. 100 McCann-Erickson Prague, Spol. s.r.o. Ammirati Puris Lintas Denmark A/S Denmark 100 Lowe Lintas & Partners AS Campbell-Ewald Aps Denmark 100 Registrant Initiative Universal Aps Denmark 100 Registrant Job A/S Denmark 100 Ammirati Puris Lintas Denmark Lowe Holdings ApS Denmark 100 IPG Group Denmark Holdings ApS Lowe Lintas & Partners A/S Denmark 75 Lowe Worldwide Holdings BV McCann-Erickson A/S Denmark 100 Registrant Medialog A/S Denmark 100 Registrant Octagon Holdings ApS Denmark 100 Interpublic Group Denmark Holdings ApS Overseas Group Denmark Aps Denmark 100 Registrant Overseas Holdings Denmark AS Denmark 100 Overseas Group Denmark Aps Parafilm A/S Denmark 100 Registrant Progaganda, Reuther, Lund & Priesler Reklamebureau Aps Denmark 75 Registrant Signatur APS Denmark 100 Ammirati Puris Lintas Denmark A/S McCann-Erickson Dominicana, S.A. Dominican Rep. 100 Registrant McCann-Erickson (Ecuador) Publicidad S.A. Ecuador 96 McCann-Erickson Corporation (Int'l) McCann-Erickson Centro Americana (El Salvador) S.A. El Salvador 100 Registrant - 152 - EXHIBIT 21 PAGE 12 MARCH 21, 2001 NAME PERCENTAGE OF VOTING SECURITIES JURISDICTION OWNED BY UNDER WHICH IMMEDIATE ORGANIZED PARENT (%) IMMEDIATE PARENT ------------ ---------- ------------------ FOREIGN: AS Division Estonia 75 Registrant (75%); Urmas Lilleng (9%); Rain Pikand (9%); Tonu Sikk (5%); Andrus Lember (2%) ISOGROUP/Pavias Holdings Europe 100 Registrant Ammirati Puris Lintas Oy Finland 100 Lowe Worldwide Holdings BV Hasan & Partners Oy Finland 100 Registrant Lintas Service Oy Finland 100 Lintas Oy Lowe Brindfors Oy Finland 100 Lowe Sweden AB Lowe Brindfors Production Oy Finland 100 Lowe Brindfors Oy Mainostoinisto Ami Hasan & Company Oy Finland 100 Hasan & Partners, Inc. Mainostoinisto Womena - McCann Oy Finland 100 Registrant McCann-Pro Oy Finland 100 Oy Liikemainonta-McCann AB Oy Liikemainonta-McCann AB Finland 100 Registrant PMI-Mediaporssi Oy Finland 66 Oy Liikemainonta-McCann AB (33%); Lintas Oy (33%) Womena-Myynninvauhdittajat Oy Finland 100 Oy Liikemainonta-McCann AB Alice SNC France 100 Lowe Alice SA (50%); Antennes Sa (50%) Antennes SA France 100 Lowe Alica SA CDRG France France 74 McCann-Erickson France Holding Co. Creation Sarl France 97.5 SP3 S.A. Creative Marketing Service SAS France 100 France C.C.P.M. DCI Pharma Sarl France 100 Zeta S.A. D.L. Blair Europe SNC France 100 T.C. Promotions, I, Inc. (50%); T.C. Promotions II, Inc. (50%) DraftDirect Worldwide Sante Sarl France 100 DraftWorldwide S.A. DraftWorldwide S.A. France 100 Draft Group Holdings Limited E.C. Television/Paris, S.A. France 100 France C.C.P.M. Equation Graphique France 100 DraftWorldwide S.A. Fab + S.A. France 99.4 SP3 S.A. France C.C.P.M. France 100 Lowe Worldwide Holdings BV FutureBrand Menu France 51 Registrant Huy Oettgen Oettgen S.A. France 100 DraftWorldwide S.A. Infernal Sarl France 100 SP3 S.A. Initiatives Media Paris S.A. France 100 France C.C.P.M. Leuthe il-autre Agence France 85 McCann-Erickson (France) Holding Co. Lowe Alice S.A. France 100 Lowe Worldwide Holdings B.V. Lowe Lintas & Partners SA France 100 France C.C.P.M. MACAO France 100 McCann-Erickson France MacLaren Lintas S.A. France 100 France C.C.P.M. McCann Communications France 75 McCann-Erickson (France) Holding Co. McCann-Promotion S.A. France 99.8 McCann-Erickson (France) Holding Co. McCann-Erickson (France) Holding Co. France 100 Registrant McCann-Erickson (Paris) S.A. France 100 McCann-Erickson (France) Holding Co. McCann-Erickson Rhone Alpes S.A. France 100 McCann-Erickson (France) Holding Co. McCann-Erickson Thera France France 74 CDRG Communications MDEO France 80 McCann-Erickson France Menu & Associes France 51 The Coleman Group Worldwide LLC Nationwide Advertising Svcs. France 100 McCann France Octagon International Sarl France 100 Advantage Int'l Holdings Inc. - 153 - EXHIBIT 21 PAGE 13 MARCH 21, 2001 NAME PERCENTAGE OF VOTING SECURITIES JURISDICTION OWNED BY UNDER WHICH IMMEDIATE ORGANIZED PARENT (%) IMMEDIATE PARENT ------------ ---------- ------------------ FOREIGN: Pierre De Lune S.A. France 100 Topaze Investissements S.A. Pschitt S.A. France 100 Pschitt K France S.A. Publi Media Service France 50 Owned in quarters by McCann, Ammirati Puris Lintas agencies in France, Publicis and Idemedia SDIG France 66 McCann-Erickson France Holding Co. SA Shandwick France Sarl France 100 Shandwick Holdings SA Shandwick Holding SA France 100 Shandwick Investments Ltd. Slad France 60 McCann-Erickson (France) Holding Co. Societe our le Developpement De L'Industrie du Gaz en France S.A. France 66 McCann-Erickson France SPEDIC France 100 Registrant SP3 S.A. France 100 McCann-Erickson (France) Holding Co. Strateus France 72 France C.C.P.M. Synthese Marketing S.A. France 100 DraftWorldwide S.A. Topaze Investissements S.A. France 100 DraftWorldwide S.A. Topaze Promotions Valeur S.A. France 100 Topaze Investissements S.A. Universal Media S.A. France 100 McCann-Erickson (France) Holding Co. Valefi France 55 McCann-Erickson (France) Holding Co. Virtuelle France 60 Fieldplan Limited Western International Media Holdings Sarl France 100 Alice SNC Zeta Agence Consel En Publicite S.A. France 100 DraftDirect Worldwide Sante Sarl Zoa Sarl France 100 Alice SNC Adplus Werbeagentur GmbH Germany 100 Lowe & Partners GmbH Ammirati Puris Lintas Deutschland GmbH Germany 100 Registrant Ammirati Puris Lintas Service GmbH Germany 100 Ammirati Puris Lintas Deutschland Ammirati Puris Lintas Hamburg GmbH Germany 100 Ammirati Puris Lintas Deutschland Ammirati Puris Lintas Germany 100 Ammirati Puris Lintas Deutschland Baader, Lang, Behnken Werbeagentur GmbH Germany 100 Ammirati Puris Lintas Deutschland B&L Dr. von Bergen und Rauch GmbH Germany 100 Interpublic GmbH Change Communications GmbH Germany 80 Ammirati Puris Lintas Deutschland Creative Media Services GmbH Germany 100 Ammirati Puris Lintas Deutschland DCM Dialog-Creation-Munchen Agentur fur Dialogmarketing GmbH Germany 80 M&V Agentur fur Dialogmarketing und Verkaufsforderung GmbH DeOtter & DeVries Germany 51 The Jack Morton Company Draft Beteiligungs GmbH Germany 100 DraftDirect Worldwide Holdings GmbH Germany DraftDirect Worldwide Holdings GmbH (Germany) Germany 100 Draft Group Holdings Limited DraftWorldwide Agentur fur Marketing Kommunikation GmbH (Munich) Germany 70 M&V Agentur fur Dialogmarketingd und Verkaufsforderung GmbH - 154 - EXHIBIT 21 PAGE 14 MARCH 21, 2001 NAME PERCENTAGE OF VOTING SECURITIES JURISDICTION OWNED BY UNDER WHICH IMMEDIATE ORGANIZED PARENT (%) IMMEDIATE PARENT ------------ ---------- ------------------ FOREIGN: Exclusiv-Verlag Meissner GmbH Germany 100 Shandwick Deut. GmbH & Co. KG Heinrich Hoffman & Partner GmbH Germany 100 Lowe & Partners Werbeagentur GmbH Initiativ Media GmbH Germany 100 Ammirati Puris Lintas Deut. GmbH Interpublic GmbH Germany 100 Registrant KMB Kommunikation Und Marketing Bonn GmbH Germany 100 Shandwick Deut. GmbH & Co. KG Kolitho Repro GmbH Germany 100 Peter Reincke Direkt-Marketing GmbH Krakow McCann Werbeagentur GmbH Germany 100 McCann-Erickson Deutschland GmbH Kreatives Direktmarketing Beteiligungs GmbH Germany 100 Draft Group Holdings Limited Lowe Deutschland Holding GmbH Germany 100 Lowe Worldwide Holdings B.V. (75%); Registrant (25%) Lowe & Partners GmbH Germany 63.7 Lowe Deutschland Holding GmbH Lowe Hoffmann & Schnakenburg GmbH Germany 51.2 Lowe Deutschland Holding GmbH Lowe & Partners GmbH Hamburg Germany 100 Lowe Deutschland Holding Gmbh Lutz Bohme Public Relations GmbH Germany 100 Shandwick Deutschland GmbH & Co. KG Mailpool Adressen- Management GmbH Germany 100 DraftDirect Worldwide Holdings GmbH Max W.A. Kramer GmbH Germany 100 Ammirati Puris Lintas Deut. GmbH McCann Direct GmbH Germany 100 McCann-Erickson Deutschland GmbH McCann-Erickson Dusseldorf Germany 100 McCann-Erickson Deutschland McCann-Erickson (International) GmbH Germany 100 Registrant McCann-Erickson Deutschland GmbH Germany 100 McCann-Erickson (Int'l) GmbH McCann-Erickson Deutschland GmbH & Co. Mgmt. Prop. KG (Partnership) Germany 100 Registrant McCann-Erickson Scope GmbH Germany 100 McCann-Erickson Deutschland GmbH McCann-Erickson Frankfurt GmbH Germany 100 McCann-Erickson Deutschland GmbH McCann-Erickson Hamburg GmbH Germany 100 McCann-Erickson Deutschland GmbH McCann-Erickson Management Property GmbH Germany 100 McCann-Erickson Deutschland GmbH (80%), Interpublic GmbH (20%) McCann-Erickson Nurnberg GmbH Germany 100 McCann-Erickson DeutschlandGmbH McCann-Erickson Thunderhouse Germany 100 Registrant McCann-Erickson Service GmbH Germany 100 McCann-Erickson Deutschland GmbH MCS Medizinischer Creativ Service, GmbH Germany 60 McCann-Erickson Deutschland GmbH M&V Agentur fur Dialog Marketing und Germany 82 Draft Direct Worldwide Holdings Verkaufsforderung GmbH GmbH Germany Peter Reincke/ DraftWorldwide GmbH Germany 76 DraftDirect Worldwide Holdings GmbH PR Bonn Public Relations Gesellschaft fur Kommunikatins und Marketingberatung mbH Germany 100 McCann-Erickson Deutschland GmbH - 155 - EXHIBIT 21 PAGE 15 MARCH 21, 2001 NAME PERCENTAGE OF VOTING SECURITIES JURISDICTION OWNED BY UNDER WHICH IMMEDIATE ORGANIZED PARENT (%) IMMEDIATE PARENT ------------ ---------- ------------------ FOREIGN: Pro concept marketing Verwaltungsgesellschaft Germany 51 McCann-Erickson Deutschland GmbH PWS Germany 100 McCann-Erickson Deutschland GmbH Scherer MRM Holding GmbH Germany 75 McCann-Erickson Deutschland Scherer Team GmbH Germany 100 Scherer MRM Holding GmbH Servicepro Agentur fur Dialogmarketing und Germany 100 M&V Agentur Fur Dialogmarketing Verkaufsforderung GmbH und Verkaufsforderung GmbH Shandwick Deutschland GmbH & Co. KG Germany 100 Shandwick Europe Holding GmbH Shandwick Deutschland Verwaltungsgesellschaft MBH Germany 100 Shandwick Europe Holding GmbH Shandwick Europe Holding GmbH Germany 100 Shandwick Investments Ltd. Stinnes Marketing Consulting GmbH Germany 100 Shandwick Deutschland GmbH & Co. KG Typo-Wenz Artwork GmbH Germany 100 Interpublic GmbH Universalcommunication Media Intensiv GmbH Germany 100 Interpublic GmbH Unterstuetzungskasse der H.K. McCann Company GmbH Germany 100 McCann-Erickson (Int'l) GmbH Verwaltungsgesell Schaft Lutz Bohme GmbH Germany 100 Shandwick Europe Holding GmbH Western Media GmbH Germany 100 Adplus GmbH Wolff & Partner DraftWorldwide, Kreatives DraftDirect Worldwide Holdings Direktmarketing GmbH & Co. Germany 100 GmbH Germany Lowe Lintas & Partners Advertising Company S.A. Greece 100 Interpublic Ltd. International Media Advertising Greece 100 Fieldplan Ltd. McCann-Erickson Athens S.A. Greece 100 Registrant Initiative Media Advertising S.A. Greece 100 Fieldplan Limited Universal Media Hellas S.A. Greece 100 McCann-Erickson (Int'l) GmbH Publicidad McCann-Erickson Centroamericana (Guatemala), S.A. Guatemala 100 Registrant Asdia Limited Guernsey 70 Registrant McCann-Erickson Centroamericana S. de R.L. Honduras 100 Registrant Anderson & Lembke Asia Limited Hong Kong 100 Anderson & Lembke, Inc. Ammirati Puris Lintas Hong Kong Ltd. Hong Kong 54 Lowe Worldwide Holdings BV Dailey International Enterprises Ltd. Hong Kong 100 Registrant (50%), Ammirati Puris Lintas (50%) Dailey Investments Limited Hong Kong 100 Registrant (50%), Ammirati Puris Lintas (50%) DraftWorldwide Limited Hong Kong 100 DraftWorldwide, Inc. Forrest Int'l Holdings, Ltd. Hong Kong 100 Registrant Infoplan (Hong Kong) Limited Hong Kong 100 McCann-Erickson (HK) Limited Karting Mall (Hong Kong) Ltd. Hong Kong 100 Karting Marketing & Mgmt. Corp. Lintas Holdings B.V. Hong Kong 100 Registrant Live Hong Kong 100 Lowe & Partners/Live Limited - 156 - EXHIBIT 21 PAGE 16 MARCH 21, 2001 NAME PERCENTAGE OF VOTING SECURITIES JURISDICTION OWNED BY UNDER WHICH IMMEDIATE ORGANIZED PARENT (%) IMMEDIATE PARENT ------------ ---------- ------------------ FOREIGN: Lowe & Partners/Live Limited Hong Kong 74 Lowe Group Holdings Inc. Ludgate Asia Ltd. Hong Kong 100 Ludgate Group Limited McCann-Erickson, Guangming Ltd. Hong Kong 100 Registrant McCann-Erickson (HK) Limited Hong Kong 100 Registrant Octagon CSI Asia Pacific Ltd. Hong Kong 100 Octagon CSI Int'l Holdings SA Octagon Prism Limited Hong Kong 85 Octagon Sports Marketing Limited Orvieto Limited Hong Kong 100 Asiatic Corp. Presko Limited Hong Kong 100 Shandwick Asia Pacific Limited Prism Golf Management Ltd. Hong Kong 50 Octagon Prism Limited Prism Holdings Limited Hong Kong 100 Octagon Prism Limited (50%); Prism Golf Management (50%) Shandwick Asia Pacific Limited Hong Kong 100 Shandwick Investments Limited Shandwick Hong Kong Limited Hong Kong 100 Shandwick Asia Pacific Limited Strategic Solutions Limited Hong Kong 100 DraftWorldwide Limited H.K. Ammirati Puris Lintas Budapest Reklam Es Marketing Kommunikacios Kft Hungary 100 Ammirati Puris Lintas Deutschland GGK Direct Kft. Hungary 70 Lowe Lintas GGK Holdings AG Initiative Media Hungary Hungary 100 Lintas Budapest Lowe Lintas GGK Kft. Hungary 77 Lowe Lintas GGK Holdings AG McCann Communications Budapest KFT Hungary 100 Registrant McCann-Erickson Interpress International Advertising Agency Ltd. Hungary 100 Registrant Panmedia Western Kft. Hungary 70 Lowe Lintas GGK Holdings AG Gott Folk enf. Iceland 65 Overseas Holdings Denmark A/S Associate Corp. Consl. (India) Pvt.Ltd. India 99.60 McCann-Erickson (India) Private Ltd. DraftWorldwide (India PVT Ltd.) India 74 DraftWorldwide, Inc. McCann-Erickson (India) Pvt. India 60 McCann-Erickson Worldwide Inc. Result Services Private Ltd. India 99.10 McCann-Erickson (India) Private Ltd. APL Indonesia Indonesia 55 Ammirati Puris Lintas Grafix Indonesia 100 PT Inpurema Konsultama PT Intra Primustana Respati Indonesia 100 Shandwick Investment Ltd. Financial and Corporate Communications Limited Ireland 100 Registrant McCann-Erickson, Limited Ireland 100 Registrant Asdia Limited Isle of Guernsey 74 Registrant Pool Limited Isle of Man 100 Overseas Holdings Denmark A/S Kesher Barel Israel 50 Registrant Select Media Israel 100 Registrant Shamluk, Raban, Golani Israel 60 A.T.M.Z. Holding Company Ltd. Ammirati Puris Lintas Milano S.p.A. Italy 100 Ammirati Puris Lintas Holding BV Centro Media Planning- Buying-Booking S.r.l. Italy 100 Ammirati Puris Lintas Milano SpA Chorus Media Srl Italy 51 Lowe Pirella Gottsche SpA Dialogo Italy 100 McCann-Erickson Italiana SpA DraftWorldwide Italia Srl. Italy 100 DraftWorldwide, Inc. Gio Rossi Italy 71 McCann-Erickson - 157 - EXHIBIT 21 PAGE 17 MARCH 21, 2001 NAME PERCENTAGE OF VOTING SECURITIES JURISDICTION OWNED BY UNDER WHICH IMMEDIATE ORGANIZED PARENT (%) IMMEDIATE PARENT ------------ ---------- ------------------ FOREIGN: Initiative Media S.R.L. Italy 100 Ammirati Puris Lintas SPA Infoplan Italiana S.P.A. Italy 100 Registrant Lowe Lintas Pirella Gottsche & Partners S.p.A. Italy 100 Lowe Worldwide Holdings BV Mass Media Partner S.r.l. Italy 100 Shandwick Corporate Comm., SpA McCann-Erickson Italiana SpA Italy 100 Registrant McCann Mktg. Communications SpA Italy 100 McCann-Erickson Italiana SpA Octagon Motorsport Srl. Italy 100 Inka AG Pool Media International Registrant (95%) and Business (P.M.I.) S.r.l. Italy 100 Science Research Corp (5%) SBK Motorsport Srl Italy 100 SBK Superbike International Ltd. Shandwick Corporate Communication SPA Italy 100 Shandwick Investments Limited Shandwick Italia Holding Srl Italy 100 Shandwick Investments Limited Shandwick Mktg. Communication Srl Italy 100 Shandwick Italia Holding Srl Shandwick Roma in Liquidazione Srl Italy 100 Shandwick Italia Holding Srl Spring S.R.L. Italy 99 Lowe Lintas Pirella Gottsche & Ptnrs. Universal S.R.L. Italy 100 Registrant Universal Media Srl Italy 100 McCann-Erickson Italiana SpA Ammirati Puris Lintas S.A. Ivory Coast 67 France C.C.P.M. McCann-Erickson Ivory Coast Ivory Coast 98.80 McCann-Erickson France Nelson Ivory Coast Ivory Coast 100 McCann-Erickson France McCann-Erickson (Jamaica) Ltd. Jamaica 100 Registrant Ammirati Puris Lintas K.K. Japan 100 Ammirati Puris Lintas Nederland BV (29%); Registrant (71%) Hakuhodo Lintas K.K. Japan 50 Ammirati Puris Lintas Worldwide Ltd. Infoplan, Inc. Japan 100 McCann-Erickson Inc. Int'l Management Consultants Ltd. Japan 100 IPR Shandwick Inc. IPR Shandwick Inc. Japan 100 Shandwick Investments Limited ISDM Japan Inc. Japan 73.32 McCann-Erickson Inc. (Japan) Japan Mktg. Communications Inc. Japan 100 IPR Shandwick Inc. KK ISD Japan Japan 75 McCann-Erickson Inc. K.K. Momentum Japan 100 McCann-Erickson Inc. K.K. Standard McIntyre Japan 100 McCann-Erickson Healthcare, Inc. McCann-Erickson Inc. Japan 100 Registrant Public Relations Services Co. Ltd. Japan 100 IPR Shandwick Inc. Universal Public Relations Services Ltd. Japan 100 IPR Shandwick Inc. Third Dimension Limited Jersey 100 Interpublic Limited Vy-McCann Limited Jersey 51 McCann-Erickson Worldwide, Inc. Kazakhstan Kazakhstan 100 Registrant McCann-Erickson (Kenya) Ltd. Kenya 73 Registrant McCann-Erickson Korea Korea 51 McCann-Erickson SIA Divizija Latvia 75 Registrant (75%); Ainars Scipcinskis (12.5%); Aigors Rungis (12.5%) Communication Services (International) Holdings SA Luxembourg 100 Registrant Inka AG Luxembourg 100 Octagon Motorsport Limited - 158 - EXHIBIT 21 PAGE 18 MARCH 21, 2001 NAME PERCENTAGE OF VOTING SECURITIES JURISDICTION OWNED BY UNDER WHICH IMMEDIATE ORGANIZED PARENT (%) IMMEDIATE PARENT ------------ ---------- ------------------ FOREIGN: API Sponsorship SDM.BHD Malaysia 100 Advantage Sponsorship Canada Ltd. (50%) & Octagon Sports Marketing Ltd. (50%) DraftWorldwide Sdn. Bhd. Malaysia 100 DraftWorldwide, Inc. Initiative Media (M) Sdn. Bhd. Malaysia 100 Lowe Lintas & Partners (Malaysia) Sdn. Bhd. McCann-Erickson (Malaysia) Sdn. Bhd. Malaysia 100 Registrant Mutiara-McCann (Malaysia) Sdn. Bhd. Malaysia 83.50 Registrant Shandwick Sdn. Bhd. Malaysia 100 Shandwick Investments Limited Union 2000 Malaysia 60 DraftWorldwide, Inc. Universal Communication Sdn. Bhd. Malaysia 100 McCann-Erickson (Malaysia) Sdn. Bhd. Lowe Mauritius Limited Mauritius 100 Lowe Group Holdings Inc. Ammirati Puris Lintas S.A. de C.V. Mexico 100 Interpublic Holding Co. SA de CV Business Strategic Consultants, S.C. Mexico 60 Interpublic Holding Co. Sa de CV Corporacion Interpublic Mexicana, S.A. de C.V. Mexico 100 Interpublic Holding Co. SA de CV Inversionistas Asociados, S.A. De C.V. Mexico 100 Interpublic Holding Co. SA de CV Initiative Media, S.a. de C.V. Mexico 100 Interpublic Holding Co. SA de CV Initiative Media Mexico Mexico 100 Interpublic Holding Co. SA de CV Inversionistas Asociados, S.A. De C.V. Mexico 100 Interpublic Holding Co. SA de CV Lowe & Partners/SMS De Mexico, S.A. Mexico 100 Interpublic Holding Co. SA de CV Pedrote Mexico 60 Interpublic Holding Co. SA de CV Promoideas, S.A. de CV Mexico 60 Interpublic Holding Co. SA de CV (60%); Carlos Sanchez Guadarrama (40%) Publicidad Nortena, S. De R.L. De C.V. Mexico 100 Interpublic Holding Co. SA de CV Vierka Mexico 100 Interpublic Holding Co. SA de CV Zimat Consultores, SA de CV Mexico 100 Zimat Golin/Harris SA (owned by Interpublic SA de CV) CSI International SAM Monaco 100 Communication Services Int'l (Holdings) S.A. Ammirati Puris Lintas Direct B.V. Netherlands 80 Ammirati Puris Lintas Nederland BV Anderson & Lembke Europe B.V. Netherlands 100 Anderson & Lembke, Inc. Borremans & Ruseler Thematische Actiemarketing BV Netherlands 100 Borus Groep BV Borus Groep BV Netherlands 100 IPG Nederland BV Coleman Millford BV Netherlands 71 IPG Nederland B.V. Data Beheer BV Netherlands 100 Data Holding B.V. - 159 - EXHIBIT 21 PAGE 19 MARCH 21, 2001 NAME PERCENTAGE OF VOTING SECURITIES JURISDICTION OWNED BY UNDER WHICH IMMEDIATE ORGANIZED PARENT (%) IMMEDIATE PARENT ------------ ---------- ------------------ FOREIGN: Data Holding BV Netherlands 100 IPG Nederland B.V. Gold Reclame En Marketing Advisers BV Netherlands 100 IPG Nederland B.V. Initiative Media Programming BV Netherlands 100 Ammirati & Puris Lintas B.V. IPG Nederland BV . Netherlands 100 Registrant (62%); Poundhold (37.6%) ISOGroup Europe BV Netherlands 100 Registrant Lowe Digital BV Netherlands 80 Lowe Direct (22.5%), Lowe Lintas (57.5%) L'eau Netherlands 60 Lowe Lintas BV Lowe Holland BV Netherlands 100 Lowe Worldwide Holdings BV Lowe Lintas BV Netherlands 100 Lowe Worldwide Holdings BV Lowe Worldwide Holdings BV Netherlands 100 Interpublic Netherlands McCann-Erickson (Nederland) BV Netherlands 100 IPG Nederland BV Octagon BV Int'l Holdings Inc. Netherlands 100 Advantage Int'l Holdings Inc. Octagon CSI International BV Netherlands 100 Octagon CSI International NV Octagon Worldwide Holdings BV Netherlands 100 Octagon Worldwide Inc. Pacific Investments Trust BV Netherlands 100 SBK Superbike Int'l Limited P. Strating Promotion BV Netherlands 100 IPG Nederland B.V. Programming Media International BV Netherlands 100 Registrant Reclame-Adviesbureau Via BV Netherlands 100 IPG Nederland BV Roomijsfabriek "De Hoop" BV Netherlands 100 Lowe Worldwide Holdings BV Shandwick BV Netherlands 100 Shandwick Investments Limited Shandwick International BV Netherlands 100 Shandwick Investments Limited Shandwick Netherland BV Netherlands 100 Shandwick International B.V. Shandwick New Zealand Limited Netherlands 100 Shandwick Investments Limited Universal Media BV Netherlands 100 IPG Nederland B.V. VDBJ Stichting Beheer Sandelen VDBJ/ Communicatie Groep BV Netherlands 60 IPG Nederland B.V. Western International Media Holdings BV Netherlands 100 Lowe Group Holdings, Inc. (52%), Ammirati Puris Lintas (38%), Western Media (10%) Zet Zet BV Netherlands 100 Data Gold B.V. Octagon CSI International NV Netherland Antilles 100 Octagon CSI International BV Ammirati Puris Lintas (NZ) Ltd. New Zealand 51 Registrant DLM New Zealand 100 McCann-Erickson Initiative Media (NZ) Limited New Zealand 99 Ammirati Puris Lintas (NZ) Ltd. McCann-Erickson Limited New Zealand 100 Registrant Pritchard Wood-Quadrant Ltd. New Zealand 100 Registrant Universal Media Limited New Zealand 100 McCann-Erickson Limited Digit A/S Norway 100 JBR/McCann/A/S JBR Film A/S Norway 100 JBR Reklamebyra A/S JBR McCann A/S Norway 100 McCann-Erickson A/S JBR McCann Signatur A/S Norway 100 McCann-Erickson A/S JBR Purkveien A/S Norway 100 McCann-Erickson A/S JBR Riddeersvoldgate A.S. Norway 100 McCann-Erickson A/S - 160 - EXHIBIT 21 PAGE 20 MARCH 21, 2001 NAME PERCENTAGE OF VOTING SECURITIES JURISDICTION OWNED BY UNDER WHICH IMMEDIATE ORGANIZED PARENT (%) IMMEDIATE PARENT ------------ ---------- ------------------ FOREIGN: Lowe Norway A/S Norway 100 Lowe Sweden AB Lowe & Partners Norway A/S Norway 66.6 Lowe Norway A/S McCann-Erickson A/S Norway 100 McCann-Erickson Marketing Scandinavian Design Group AS Norway 75 McCann-Erickson AS Showproduksjon AS Norway 100 McCann-Erickson AS Epoca McCann S.A. Panama 100 Registrant Ammirati Puris Lintas Manila Philippines 58 Registrant H.K. McCann Communications Company, Inc. Philippines 100 McCann-Erickson (Philippines) Inc. McCann-Erickson (Philippines), Inc. Philippines 58 Registrant (30%), Business Science Research Corp. (28%) McCann Group of Companies, Inc. Philippines 100 Registrant Ammirati Puris Lintas Sp. z.o.o. Poland 100 Ammirati Puris Lintas Deut. GmbH GGK Direct Warszawa Sp. z.o.o. Poland 100 Lowe Lintas GGK Holding AG (80%); Lowe Lintas GGK (Warsaw) (20%) GGK Public Relations Sp. z.o.o. Poland 95 Lowe Lintas GGK Holding AG (95%); Andrzej Halicki (5%) IM Warsaw Poland 100 Ammirati Puris Lintas Warsaw ITI McCann-Erickson Int'l Advertising Poland 100 McCann-Erickson Int'l GmbH Lowe Lintas GGK Sp. z.o.o. Poland 100 Lowe Lintas GGK Holding AG McCann Communications-Poland Poland 100 Registrant McCann-Erickson Prague Spol. s.r.o. Poland 100 McCann-Erickson Int'l GmbH Panmedia Western Sp. z.o.o. Poland 95 Lowe Lintas GGK Holding AG Ammirati Puris Lintas, Lda. Portugal 100 Interpublic SGPS/Lda. Iniciativas De Meios-Actividades Publicitarias, Limitada Portugal 98 Ammirati Puris Lintas, Ltda. Interpublic SGPS/Lda Portugal 100 Registrant Kramaidem-Publicidade E Marketing, S.A. Portugal 100 Registrant McCann-Erickson/ Portugal Limitada Portugal 100 Interpublic SGPS/Ltda. MKM Markimage, Marketing E Imagem, S.A. Portugal 100 McCann-Erickson Portugal Publicidade Ltda. Universal Media Publicidade, Limitada Portugal 100 McCann-Erickson/Portugal Ltda. Ammirati Puris Lintas Puerto Rico, Inc. Puerto Rico 100 Ammirati Puris Lintas, Inc. McCann-Erickson, Dublin Limited Republic of 100 Registrant Ireland B.V. McCann-Erickson Romania Romania 75 Registrant Lowe GGK Bucaresti Publicitate Srl Romania 61 Lowe Lintas GGK Holdings AG McCann-Erickson Moscow Russia 100 McCann-Erickson Int'l GmbH Boroughloch Scotland 100 DraftWorldwide, Inc. Ammirati Puris Lintas (Singapore) Pte. Ltd. Singapore 100 Registrant DraftWorldwide Pte. Ltd. Singapore 100 DraftWorldwide, Inc. Lowe Lintas & Partners Singapore Pte. Ltd. Singapore 100 Lowe Group Holdings Inc. - 161 - EXHIBIT 21 PAGE 21 MARCH 21, 2001 NAME PERCENTAGE OF VOTING SECURITIES JURISDICTION OWNED BY UNDER WHICH IMMEDIATE ORGANIZED PARENT (%) IMMEDIATE PARENT ------------ ---------- ------------------ FOREIGN: McCann-Erickson (Singapore) Singapore 100 Registrant Monsoon Singapore 80 Lowe Group Holdings Shandwick Pte Limited Singapore 100 Shandwick Investments Limited CPM Slovakia SRO Slovak Rep. 50 Panmedia Werbeplanung GmbH Lowe GGK Bratislava Sro Slovak Rep. 92 Lowe Lintas GGK Holdings AG McCann-Erickson Bratislava Slovak Rep. 100 McCann-Erickson Prague Spol. srl Panmedia s.r.o. Slovak Rep. 91 Lowe Lintas GGK Holdings AG Adsearch Proprietary Limited South Africa 100 Registrant Ammirati Puris Lintas (Proprietary) Limited South Africa 100 Ammirati Puris Lintas Holding (76%) Registrant (24%) ASDIA South Africa 70 Registrant Campbell-Ewald Proprietary Limited South Africa 100 McCann-Erickson South Africa Proprietary Limited Column Communications CC South Africa 100 Ammirati Puris Lintas (Prop.) Ltd. ESPM South Africa 86 Octagon Sports Marketing Ltd. Fibre Design Communication (Proprietary) Ltd. South Africa 100 Registrant Group Africa Investments (Proprietary) Ltd. South Africa 70 Registrant McCann Cape Town (Proprietary) Limited South Africa 100 McCann Group McCann Durban (Proprietary) Limited South Africa 100 McCann Group McCann-Erickson Promotions (Proprietary) Ltd. South Africa 100 Registrant McCann-Erickson South Africa (Pty.) Ltd. ("McCann Group") South Africa 100 Registrant McCann International (Proprietary) Limited South Africa 100 McCann Group McCann South Africa Proprietary Limited South Africa 100 McCann-Erickson Johannesburg (Proprietary) Limited McCann-Erickson Johannesburg (Proprietary) South Africa 100 McCann-Erickson South Africa Limited (Proprietary) Limited McCannix Proprietary Limited (Proprietary) Limited South Africa 100 McCann-Erickson Johannesburg Media Initiative (Proprietary) Limited South Africa 100 Ammirati Puris Lintas (Prop.) Ltd. Telerix Investments (Proprietary) Limited South Africa 100 Octagon Sports Marketing Ltd. The Loose Cannon Company Proprietary Limited South Africa 100 McCann-Erickson South Africa Universal Media (Proprietary) Limited South Africa 100 McCann Group Lintas Korea, Inc. South Korea 100 Registrant McCann-Erickson, Inc.-Doosan South Korea 100 McCann-Erickson Marketing, Inc. Alpha Grupo de Comunicacion Cientifica, S.L. Spain 60 Shandwick Iberica S.A. - 162 - EXHIBIT 21 PAGE 22 MARCH 21, 2001 NAME PERCENTAGE OF VOTING SECURITIES JURISDICTION OWNED BY UNDER WHICH IMMEDIATE ORGANIZED PARENT (%) IMMEDIATE PARENT ------------ ---------- ------------------ FOREIGN: Cachagua S.A. Spain 100 The Interpublic Group of Companies de Espana S.A. Cano & Martinez Direct, S.A. Spain 80 McCann-Erickson, S.A. Clarin, S.A. Spain 100 McCann-Erickson S.A. Clouseau Spain 80 DraftWorldwide S.A. Coleman Schmidlin & Partner SA Spain 71 Coleman Group Worldwide, LLC Common Sense Publicidad Y Diseno, S.A. Spain 80 McCann-Erickson S.A. Directing MRM S.A. Spain 99.99 The Interpublic Group of Companies de Espana S.A. DraftWorldwide S.A. Spain 100 Draft Group Holdings Limited Encuadre S.A. Spain 67 Clarin, S.A. Events & Programming The Interpublic Group of International Companies de Espana S.A. Consultancy, S.A. (EPIC) Spain 100 Interpublic de Espana S.A. Iniciativas de Medios, S.A. Spain 100 Ammirati Puris Lintas, S.A. Infomark, S.A. (Informatica Aplicada al Marketing, S.A.) Spain 75 McCann-Erickson S.A. Lowe FMRG Spain 81.02 Lowe W.W. Holdings BV (57.55%); Lowe Int'l Holding BV (23.47%) Lowe Lintas & Partners SA Spain 100 Interpublic Group of Companies de Espana SA McCann-Erickson S.A. Spain 100 The Interpublic Group of Companies de Espana S.A. McCann-Erickson The Interpublic Group of Barcelona S.A. Spain 100 Companies de Espana S.A. Pool Media International S.A. Spain 100 The Interpublic Group of Companies de Espana S.A. Reporter, S.A. Spain 75 Ecuacion Diferencial, SL (75%); Marina Specht (25%) Shandwick Iberica, S.A. Spain 100 Shandwick Investments Limited Sidney Comunicacion S.A. Spain 75 McCann-Erickson S.A. Sidney Marketing y Communicacion Integral S.A. Spain 75 McCann-Erickson S.A. Sidney System Prom, S.A. Spain 60 McCann-Erickson S.A. Sidney Task Force S.A. Spain 60 McCann-Erickson S.A. The Interpublic Group of Companies de Espana Spain 100 Registrant Think for Sale Communication Integral S.L. Spain 100 DraftWorldwide S.A. Universal Bus Interface Corporation S.L. Spain 80 DraftWorldwide S.A. Universal Media S.A. Spain 100 McCann-Erickson S.A. Valmorisco Communications Spain 100 The Interpublic Group of Companies de Espana S.A. Western Int'l Media SA Spain 100 Western Int'l Media Holdings BV Anderson & Lembke AB Sweden 100 Anderson & Lembke, Inc. Creator Sweden 51 McCann-Erickson Draft Promotion AB Sweden 100 DraftWorldwide Trampolin AB DraftWorldwide Sweden AB Sweden 100 DraftWorldwide Trampolin AB DraftWorldwide Trampolin AB Sweden 100 Inter P Group Sweden AB Infoplan AB Sweden 100 McCann-Erickson AB - 163 - EXHIBIT 21 PAGE 23 MARCH 21, 2001 NAME PERCENTAGE OF VOTING SECURITIES JURISDICTION OWNED BY UNDER WHICH IMMEDIATE ORGANIZED PARENT (%) IMMEDIATE PARENT ------------ ---------- ------------------ FOREIGN: Jack Wahl Sweden 100 Lowe Brindfors AB Large Medium AB Sweden 50 Lowe Brindfors AB Lowe Lintas AB Sweden 100 Lowe Worldwide Holdings BV Lowe & Partners Sweden AB Sweden 100 Lowe Worldwide Holdings BV Lowe Brindfors Annonsbyra AB Sweden 100 Lowe & Partners Sweden AB Lowe Forever Annonsbyra AB Sweden 100 Lowe Brindfors Annonsbyra AB McCann Annonsbyra AB Sweden 100 McCann-Erickson AB McCann Annonsbyra I Malmoe AB Sweden 100 McCann-Erickson AB McCann-Erickson AB Sweden 100 Registrant Message Plus Digital AB Sweden 100 Lowe & Partners Sweden AB Message Plus Media AB Sweden 100 Lowe & Partners Sweden AB PMI Initiative Universal Ammirati Puris Lintas AB (50%) Media AB Sweden 100 McCann-Erickson AB (50%) Ronnberg & McCann A.B. Sweden 100 McCann-Erickson AB Storakers Sweden 50 Ronnberg & McCann A.B. Trigge R. AKTiebolag Sweden 80 McCann Sweden Bosch & Butz Werbeagenter AG Switzerland 100 Lowe Worldwide Holdings BV Coleman Schmidlin Partner AG Switzerland 71 Coleman Group Worldwide LLC Dynor Switzerland 100 Octagon Holding ApS Get Neue Gestaltungstechnik AG Switzerland 100 Bosch & Butz Werbeagenter AG Initiative Media Western AG Switzerland 100 Western Int'l Media Holdings BV Initiative Media Switzerland Switzerland 100 Ammirati Puris Lintas Holding BV Lowe GGK Switzerland 82 Lowe Int'l Holdings BV McCann-Erickson S.A. Switzerland 100 Registrant McCann-Erickson Services S.A. Switzerland 100 Registrant Octagon (Switzerland) AG Switzerland 100 Octagon Holdings ApS Octagon Worldwide AG Switzerland 100 Advantage Int'l Holdings, Inc. P.C.M. Marketing AG Switzerland 100 Ammirati Puris Lintas Deut. GmbH Pool Media-PMI S.A. Switzerland 100 Registrant Target Group AG Switzerland 51 McCann-Erickson Unimedia S.A. Switzerland 100 Registrant Lowe Lintas & Partners Taiwan Ltd. Taiwan 100 Registrant McCann-Erickson Communications Group Co. Ltd. Taiwan 100 Registrant Shandwick Taiwan Ltd. Taiwan 100 Shandwick Asia Pacific Limited BTL (Thailand) Ltd. Thailand 100 Presko Shandwick Ltd. Lowe Lintas & Partners (Thailand) Ltd. Thailand 100 Registrant McCann-Erickson (Thailand) Ltd. Thailand 100 Registrant McCann-Erickson (Thailand) Ltd. Thailand 100 Registrant Presko Shandwick Limited Thailand 100 Shandwick Holdings Ltd. (51%) Orvieto Ltd. (49%) Shandwick Holdings Limited Thailand 100 Shandwick Investments Limited McCann-Erickson (Trinidad) Limited Trinidad 100 Registrant BEC Turkey 100 Pars/McCann Beyaz Turkey 100 Pars/McCann Initiative Media Istanbul Turkey 70 Registrant - 164 - EXHIBIT 21 PAGE 24 MARCH 21, 2001 NAME PERCENTAGE OF VOTING SECURITIES JURISDICTION OWNED BY UNDER WHICH IMMEDIATE ORGANIZED PARENT (%) IMMEDIATE PARENT ------------ ---------- ------------------ FOREIGN: IPG Tanitim ve Halkla Ilskiler AS Turkey 51 Registrant Link Ajams Limited Sirketi Turkey 100 PARS Lowe Adam Tanitim Hizmetleri AS Turkey Turkey 80 Lowe Worldwide Holdings B.V. McCann-Direct Reklam Tanitama Servisleri A.S. Turkey 100 PARS PARS McCann-Erickson Reklamcilik A.S.("PARS") Turkey 100 Registrant Universal Media Planlama Ve Dagitim Turkey 100 PARS Lintas Gulf Limited U.A.E. 51 Ammirati Puris Lintas Worldwide Addison Whitney Ltd.; Interpublic Limited (50%), Worldwide Ltd. United Kingdom 100 Business Science Research (50%) Addition Communications Limited United Kingdom 100 SP Group Limited Addition Marketing Group Limited United Kingdom 100 SP Group Limited Advantage Soccer Limited United Kingdom 100 Octagon Sports Marketing Ltd. Advantage Sponsorship Canada Limited United Kingdom 100 Octagon Sports Marketing Ltd. Advantage Sports Media Limited United Kingdom 100 Octagon Sports Marketing Ltd. Adware Systems Limited United Kingdom 100 Orkestra Limited Advantage Television Limited United Kingdom 100 Octagon Sports Marketing Ltd. Ammirati Puris Lintas Limited United Kingdom 100 Interpublic Limited Ammirati Puris Lintas International Limited United Kingdom 100 Interpublic Limited Ammirati Puris Lintas Russia Ltd. United Kingdom 100 Interpublic Limited API United Kingdom 100 Octagon Sports Marketing Ltd. Artel Studios Limited United Kingdom 100 Stowe, Bowden, Wilson Limited Bahbout and Stratton Limited United Kingdom 100 Registrant Barnett Fletcher Promotions Co. Ltd. United Kingdom 100 Interpublic Limited Brand Matters Limited United Kingdom 100 Registrant Brands Hatch Investments Limited United Kingdom 100 Brands Hatch Leisure Plc Brands Hatch Leisure Limited United Kingdom 100 Interpublic Inc. Brands Hatch Limited United Kingdom 100 Brands Hatch Leisure Limited Briefcope Limited United Kingdom 100 IPR Limited Brilliant Pictures Limited United Kingdom 100 Still Price Court Twivy D'Souza Lintas Group Limited British Motorsports Promoters Limited United Kingdom 50 Octagon Motorsports Limited Broadway Communications Group (Holdings) Limited United Kingdom 100 Newtonvale Limited Brompton Advertising Ltd. United Kingdom 100 The Brompton Group Ltd. Brompton Promotions Ltd. United Kingdom 100 The Brompton Group Ltd. Bureau of Commercial Information Limited United Kingdom 100 Registrant - 165 - EXHIBIT 21 PAGE 25 MARCH 21, 2001 NAME PERCENTAGE OF VOTING SECURITIES JURISDICTION OWNED BY UNDER WHICH IMMEDIATE ORGANIZED PARENT (%) IMMEDIATE PARENT ------------ ---------- ------------------ FOREIGN: Bureau of Commercial Research Limited United Kingdom 100 Registrant Business Geographics United Kingdom 70 Int'l Poster Management Ltd. Campbell-Ewald Limited United Kingdom 100 Interpublic Limited (50%), Business Science Research (50%) Caudex Medical Limited United Kingdom 100 Registrant Causeway Communications Ltd. United Kingdom 100 IPR Limited CM Lintas International Ltd. United Kingdom 100 Interpublic Limited Coachouse Ltd. United Kingdom 100 McCann-Erickson Manchester Ltd. Coleman Planet & Partners Limited United Kingdom 71 Registrant Colourwatch Group Limited United Kingdom 100 Lowe International Limited Complete Congress Services Limited United Kingdom 67 Complete Medical Group Ltd. Complete Exhibition Services Ltd. United Kingdom 80 Complete Medical Group Ltd. Complete Healthcare Training Limited United Kingdom 75 Complete Medical Group Ltd. Complete Market Research Limited United Kingdom 75 Complete Medical Group Ltd. Complete Medical Communications Int'l Ltd. United Kingdom 85 Complete Medical Group Ltd. Complete Medical Communications (UK) Ltd. United Kingdom 80 Complete Medical Group Ltd. Complete Medical Group Ltd. United Kingdom 100 Interpublic Limited Creation United Kingdom 100 Interpublic Limited Davies/Baron Limited United Kingdom 100 Interpublic Limited Davies Day Limited United Kingdom 100 Octagon Sports Mktg. Ltd. Daytona Raceway Limited United Kingdom 100 The Rebel Group Limited Decifer Limited United Kingdom 75 Lowe International Limited Diagnosis Limited CMC house United Kingdom 80 Complete Medical Group Limited DraftWorldwide Limited United Kingdom 100 Draft Group Holdings Limited Draft Group Holdings Limited United Kingdom 100 Interpublic Limited DRS Advertising Limited United Kingdom 100 Draft Group Holdings Limited English and Pockett Limited United Kingdom 75 Registrant Epic (Events & Programming Int'l Consultancy) Ltd. United Kingdom 100 Interpublic Limited EXP Momentum United Kingdom 100 Interpublic Limited Fieldplan Ltd. United Kingdom 100 Interpublic Limited Firstsale 2 Limited United Kingdom 100 Shandwick Marketing Service Ltd. Fleet PR Limited United Kingdom 100 Shandwick Public Relations Ltd. Gotham Limited United Kingdom 100 Interpublic Limited Gresham Financial Marketing Ltd. United Kingdom 100 Shandwick Consultants Ltd. Grand Slam Millennium Television Ltd. United Kingdom 100 Octagon Sports Marketing Ltd. Grand Slam Sports Limited United Kingdom 100 Octagon Sports Marketing Ltd. GSD Momentum Limited United Kingdom 100 Registrant Harrison Advertising (International) Ltd. United Kingdom 100 Interpublic Limited - 166 - EXHIBIT 21 PAGE 26 MARCH 21, 2001 NAME PERCENTAGE OF VOTING SECURITIES JURISDICTION OWNED BY UNDER WHICH IMMEDIATE ORGANIZED PARENT (%) IMMEDIATE PARENT ------------ ---------- ------------------ FOREIGN: H.K. McCann Limited United Kingdom 100 McCann Erickson Advertising Ltd. Hopkins & Bailey Ltd. United Kingdom 100 Radclyffe Comm. Group Ltd. HPI 1999 Limited United Kingdom 100 Draft Group Holdings Limited HPI International Limited United Kingdom 100 Draft Group Holdings Limited HPI Research Group Limited United Kingdom 100 Draft Group Holdings Limited Initiative Media Limited United Kingdom 100 Interpublic Limited Initiative Media London Limited United Kingdom 99.5 Still Price Court Twivy D'Souza Lintas Group Limited International Poster Management Ltd. United Kingdom 100 Interpublic Limited International Public Relations ltd. United Kingdom 100 Interpublic Limited Interpublic Limited United Kingdom 100 Registrant Interpublic Pension Fund Trustee Co. Ltd. United Kingdom 100 Interpublic Limited IPR Communications Ltd. United Kingdom 100 IPR Limited J V Knightsbridge Travel Limited United Kingdom 50 Lowe International limited Kumquat Limited United Kingdom 100 Draft Group Holdings Limited LHSB Management Services Ltd. United Kingdom 100 Lowe International Limited Lintas W.A. Limited United Kingdom 100 Interpublic Limited Lovell Vass Boddey Limited United Kingdom 100 Draft Group Holdings Limited Lowe Azure Limited United Kingdom 100 Lowe International limited Lowe Broadway Limited United Kingdom 100 Broadway Communications Group (Holdings) Limited Lowe Digital Limited United Kingdom 100 Lowe International Limited Lowe Direct Limited United Kingdom 75 Lowe International Limited Lowe Fusion Healthcare Limited United Kingdom 100 Lowe International limited Lowe & Howard-Spink Media Limited United Kingdom 100 Lowe International Limited Lowe International Limited United Kingdom 100 Interpublic Limited Lowe Lintas Ltd. United Kingdom 100 Lowe International Limited Lowe & Partners Financial Limited United Kingdom 100 Lowe International Limited Lowe & Partners UK Limited United Kingdom 100 Lowe International Limited Lowe Lintas & Partners Worldwide Limited United Kingdom 100 Interpublic Limited Lowe Plus Limited United Kingdom 100 Lowe International limited Ludcom PLC United Kingdom 100 Ludgate Group Limited Ludgate Bachard Limited United Kingdom 100 Ludgate Group Limited Ludgate Communications Limited United Kingdom 100 Ludgate Group Limited Ludgate Design Limited United Kingdom 100 Ludgate Group Limited Ludgate Group Limited United Kingdom 100 Interpublic Limited Ludgate Laud Limited United Kingdom 100 Ludgate Group Limited Matter of Fact Communications Limited United Kingdom 100 McCann-Erickson Bristol Ltd. McCann Communications Limited United Kingdom 100 Interpublic Limited McCann Direct Limited United Kingdom 100 Interpublic Limited - 167 - EXHIBIT 21 PAGE 27 MARCH 21, 2001 NAME PERCENTAGE OF VOTING SECURITIES JURISDICTION OWNED BY UNDER WHICH IMMEDIATE ORGANIZED PARENT (%) IMMEDIATE PARENT ------------ ---------- ------------------ FOREIGN: McCann-Erickson Advertising Limited United Kingdom 100 Interpublic Limited McCann-Erickson Belfast Limited United Kingdom 100 McCann-Erickson United Kingdom Ltd. McCann-Erickson Bristol Limited United Kingdom 100 McCann-Erickson United Kingdom Ltd. McCann-Erickson Central Limited United Kingdom 100 McCann-Erickson United Kingdom Ltd. McCann-Erickson Manchester Limited United Kingdom 100 McCann-Erickson United Kingdom Ltd. McCann-Erickson Payne, Golley Ltd. United Kingdom 75.9 McCann-Erickson United Kingdom Ltd. McCann-Erickson Scotland Limited United Kingdom 100 McCann-Erickson United Kingdom Ltd. McCann-Erickson United Kingdom Limited United Kingdom 100 Interpublic Limited McCann-Erickson Wales United Kingdom 100 McCann-Erickson Payne Golley McCann-Erickson Payne Golley Limited United Kingdom 100 McCann-Erickson United Kingdom Ltd. McCann-Erickson Scotland Limited United Kingdom 100 McCann-Erickson United Kingdom Ltd. McCann Media Limited United Kingdom 100 McCann-Erickson Bristol McCann Properties Limited United Kingdom 100 McCann-Erickson United Kingdom Ltd. Miller/Shandwick Technologies Inc. United Kingdom 100 Shandwick Europe Limited Miller Starr Limited United Kingdom 60 Registrant MLS Soccer Limited United Kingdom 100 Octagon Sports Marketing Limited Movie and Media Sports United Kingdom 100 Registrant (48%); Octagon (Holdings) Limited Worldwide Ltd. (31%); Octagon Worldwide Inc. (26%) Movie and Media Sports Limited United Kingdom 100 Movie & Media Sports (Holdings) Ltd. MSW Management Limited United Kingdom 100 Octagon Sports Marketing Limited Nationwide Public Relations Ltd. United Kingdom 100 IPR Limited NDI Display Group United Kingdom 100 Interpublic Limited Neva Europe Limited United Kingdom 100 Registrant Newtonvale Limited United Kingdom 51 Lowe International Limited (25.5%); Registrant (25.5%) Octagon Athlete Representation Limited United Kingdom 100 Octagon Sports Marketing Ltd. Octagon CSI Limited United Kingdom 100 Third Dimension Limited Octagon Event Marketing Limited United Kingdom 100 Interpublic Limited Octagon Sponsorship Consulting Limited United Kingdom 100 Octagon Sports Marketing Ltd. Octagon Mktg. Services Limited United Kingdom 100 Octagon Sports Marketing Ltd. Octagon Motorsports Limited United Kingdom 100 Newtonvale Limited Octagon Motorsports Marketing Limited. United Kingdom 100 Octagon Worldwide Limited Octagon SC Limited United Kingdom 100 Octagon Sponsorship Consulting Ltd. - 168 - EXHIBIT 21 PAGE 28 MARCH 21, 2001 NAME PERCENTAGE OF VOTING SECURITIES JURISDICTION OWNED BY UNDER WHICH IMMEDIATE ORGANIZED PARENT (%) IMMEDIATE PARENT ------------ ---------- ------------------ FOREIGN: Octagon Sponsorship Europe Limited United Kingdom 100 Octagon Sports Marketing Ltd. Octagon Sponsorship Limited United Kingdom 100 Octagon Sponsorship Consulting Ltd. Octagon Sports Marketing Limited United Kingdom 100 Octagon Worldwide Limited Octagon Worldwide Limited United Kingdom 100 Interpublic Limited Orbit International (1990) Ltd. United Kingdom 100 Lowe International Limited Orkestra Ltd. United Kingdom 100 Interpublic Limited Packaging Brands Limited United Kingdom 100 Registrant Paragon Communications Limited United Kingdom 100 Int'l Public Relations Ltd. Paragon North East Limited United Kingdom 100 Paragon Communications Limited Packaging Matters Limited United Kingdom 100 Registrant Planet Packaging Consultants, Ltd. United Kingdom 71 The Coleman Group Worldwide LLC Poundhold Ltd. United Kingdom 100 Lowe International Limited PR Consultants Scotland Limited United Kingdom 100 Int'l Public Relations Ltd. Prime Communications Limited United Kingdom 100 Shandwick Public Relations Ltd. Pritchard Wood and Partners Ltd. United Kingdom 100 Interpublic Ltd. (50%), Business Science Research (50%) The Quay Advertising & Marketing Limited (Bahbout & Stratton) United Kingdom 100 Bahbout & Stratton Ltd. Quorum Graphic Design Consultants Ltd. United Kingdom 100 Shandwick Europe Limited Radclyffe Communications Group Ltd. United Kingdom 100 Shandwick Europe Ltd. Rebel Enterprises Limited United Kingdom 100 The Rebel Group Limited Research Matters Limited United Kingdom 100 Registrant Rogers & Cowan Brand Placement Ltd. United Kingdom 100 Shandwick UK Limited Rogers & Cowan International Ltd. United Kingdom 100 Shandwick Europe Ltd. Royds London Limited United Kingdom 100 McCann-Erickson United Kingdom Ltd. Salesdesk Limited United Kingdom 100 Orkestra Ltd. Shandwick Broadcast Limited United Kingdom 100 Shandwick Europe Limited Shandwick Communications Limited United Kingdom 100 Shandwick Europe Limited Shandwick Consultants Limited United Kingdom 100 Shandwick Europe Limited Shandwick Europe Limited United Kingdom 100 Shandwick Investments Limited Shandwick Interactive Design Consultancy Ltd. United Kingdom 100 Shandwick Europe Limited Shandwick Interactive Limited United Kingdom 100 Shandwick Europe Limited Shandwick International Limited United Kingdom 100 IPR Limited Shandwick Investments Limited United Kingdom 100 Int'l Public Relations Ltd. - 169 - EXHIBIT 21 PAGE 29 MARCH 21, 2001 NAME PERCENTAGE OF VOTING SECURITIES JURISDICTION OWNED BY UNDER WHICH IMMEDIATE ORGANIZED PARENT (%) IMMEDIATE PARENT ------------ ---------- ------------------ FOREIGN: Shandwick Investor Relations Limited United Kingdom 100 Shandwick UK Limited Shandwick Limited United Kingdom 100 Int'l Public Relations Ltd. Shandwick Marketing Services Limited United Kingdom 100 Int'l Public Relations Ltd. Shandwick North Limited United Kingdom 100 Shandwick Europe Limited Shandwick Northern Ireland Limited United Kingdom 100 IPR Limited Shandwick PR Company Limited United Kingdom 100 Shandwick Europe Limited Shandwick Public Affairs Limited United Kingdom 100 Shandwick Europe Limited Shandwick Public Relations Limited United Kingdom 100 IPR Limited Shandwick Scotland Limited United Kingdom 100 PR Consultants Scotland Limited Shandwick Trustees Limited United Kingdom 100 Int'l Public Relations Ltd. Shandwick UK Limited United Kingdom 100 Shandwick Europe Limited Shandwick Welbeck Limited United Kingdom 100 Widestrong Limited Silverstone Haymarket Limited United Kingdom 100 Octagon Motorsports Limited Smithfield Lease Limited United Kingdom 100 Lowe International Limited Sports Management Limited United Kingdom 100 Octagon Sports Mrktg. Limited SP Lintas Group Limited United Kingdom 100 Interpublic Limited Still Price Court Twivy D'Souza Ltd. United Kingdom 100 SP Lintas Group Limited Stowe, Bowden, Wilson Limited United Kingdom 100 McCann-Erickson United Kingdom Ltd. Symphony Direct Communications Ltd. United Kingdom 100 Draft Group Holdings Limited Talbot Television Limited United Kingdom 100 Fremantle International Inc. Tavistock Advertising Limited United Kingdom 100 Lowe International Limited The Arbor Group plc United Kingdom 100 Interpublic Limited The Barnett Fletcher Promotions Co., Ltd. United Kingdom 100 Registrant The Below the Line Agency Limited United Kingdom 100 Interpublic Limited The Boroughloch Consultancy Limited United Kingdom 100 Draft Group Holdings Limited The Brompton Group Ltd. United Kingdom 100 Lowe Int'l Limited The Business in Marketing & Communications Ltd. United Kingdom 100 Shandwick Public Relations Ltd. The Championship Group Limited United Kingdom 100 Octagon Sports Marketing Limited The Howland Street Studio Ltd. United Kingdom 100 Interpublic Limited The Line Limited United Kingdom 100 SP Group Limited The Lowe Group Limited United Kingdom 100 Lowe International Limited The Medicine Group (Education) Ltd. United Kingdom 60 Complete Medical Group Ltd. The PR Centre Limited United Kingdom 100 PR Consultants Scotland Limited The Quay Advertising and Marketing Limited United Kingdom 100 Bahbout and Stratton Limited - 170 - EXHIBIT 21 PAGE 30 MARCH 21, 2001 NAME PERCENTAGE OF VOTING SECURITIES JURISDICTION OWNED BY UNDER WHICH IMMEDIATE ORGANIZED PARENT (%) IMMEDIATE PARENT ------------ ---------- ------------------ FOREIGN: The Really Big Promotions Co. Ltd. United Kingdom 100 Interpublic Limited The Rebel Group Limited United Kingdom 100 Octagon Motorsports Limited Tinker and Partners Limited United Kingdom 100 Interpublic Limited Toca Limited United Kingdom 100 Octagon Motorsports Limited TPS Public Relations Limited United Kingdom 100 Shandwick Public Relations Ltd. Tweak Limited United Kingdom 100 SP Lintas Group Limited Two Six Seven Limited United Kingdom 100 Lowe International limited Universal Advertising Limited United Kingdom 100 Interpublic Limited Universal Communications Worldwide Limited United Kingdom 100 Interpublic Limited Virtual Reality Sports Limited United Kingdom 100 Octagon Sports Marketing Limited Washington Soccer Limited United Kingdom 100 Octagon Sports Marketing Limited Weber Europe Limited United Kingdom 100 Interpublic Limited Western International United Kingdom 100 Lowe International Limited (52%) Media Limited. WIMC (UK) Limited (48%) Western International Media Europe Limited. United Kingdom 100 Western Int'l Media Limited Widestrong Limited United Kingdom 100 PR Consultants Scotland Limited WIMC UK Limited United Kingdom 100 Interpublic Limited Lingfield S.A. (S.A.F.I.) Uruguay 100 Registrant Lowe & Partners South America Holdings, S.A. Uruguay 100 Lowe Group Holdings, Inc. McCann-Erickson Latin America, S.A. Uruguay 100 Registrant Rockdone Corporation S.A. (S.A.F.I.) Uruguay 100 Universal Publicidade SA (safi) Steffen Corporation Uruguay 100 Ammirati Puris Lintas Brazil Universal Publicidad S.A. (S.A.F.I.) Uruguay 100 McCann-Erickson Publicidade Ltda. McCann Uzbekistan Uzbekistan 100 Registrant McCann-Erickson Publicidad De Venezuela, S.A. Venezuela 100 Registrant Afamal Advertising (Rhodesia) Private Ltd. Zimbabwe 100 Registrant Lintas (Private) Limited Zimbabwe 80 Fieldplan Ltd. A number of inactive subsidiaries and other subsidiaries, all of which considered in the aggregate as a single subsidiary would not constitute a significant subsidiary, are omitted from the above list. These subsidiaries normally do business under their official corporate names. International Business Services, Inc. does business in Michigan under the name "McCann-I.B.S., Inc." and in New York under the name "McCann International Business Services". Ammirati Puris Lintas, Inc. conducts business through its Ammirati Puris Lintas New York division. McCann-Erickson conducts some of its business in the states of Kentucky and Michigan under the name "McGraphics". McCann-Erickson USA, Inc. does business in Michigan under the name SAS and does busin ess in Indiana, Michigan, New York, Pennsylvania and Wisconsin under the name of McCann-Erickson Universal Group. - 171 - Exhibit 23 Consent of Independent Accountants We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 of The Interpublic Group of Companies, Inc. (the "Company"), of our report dated February 26, 2001, except for Note 15 which is as of March 1 9, 2001, which appears in the 2000 Annual Report to Stockholders which is incorporated in this Annual Report on Form 10-K: Registration Statements on Form S-8 No. 2-79071; No. 2-43811; No. 2-56269; No. 2-61346; No. 2-64338; No. 2-67560; No. 2-72093; No. 2-88165; No. 2-90878; No. 2-97440; and No. 33-28143, relating to the Stock Option Plan (1971), the Stock Option Plan (1981), the Stock Option Plan (1988) and the Achievement Stock Award Plan of the Company; Registration Statements on F orm S -8 No. 2-53544; No. 2-91564; No. 2-98324; No. 33-22008; No. 33 -64062; and No. 33-61371, relating to the Employee Stock Purchase Plan (1975), the Employee Stock Purchase Plan (1985) and the Employee Stock Purchase Plan of the Company (1995); Registration Statements on Form S-8 No. 33-20291 and No. 33-2830 relating to the Management Incentive Compensation Plan of the Company; Registration Statements on Form S-8 No. 33-5352; No. 33-21605; No. 333-4747; and No. 333-23603 relating to the 1986 Stock Incentive Plan, the 1986 United Kingdom Stock Option Plan and the 1996 Stock Incentive Plan of the Company; Registration Statements on Form S-8 No. 33-10087 and No. 33-25555 relating to the Long-Term Performance Incentive Plan of the Company; Registration Statement on Form S-8 No. 333-28029 relating to The Interpublic Outside Directors' Stock Incentive Plan of the Company; Registration Statement on Form S-8 No. 33-42675 relating to the 1997 Performance Incentive Plan of the Company; and Registration Statement on Form S-3 No. 333-53592 related to the public offering of shares of the Company. We also consent to the incorporation by reference of our report dated February 26, 2001 relating to the financial sta tement schedule, which appears in this Form 10 -K. PricewaterhouseCoopers LLP New York, New York March 27, 2001 - 172 -  CONSENT OF INDEPENDENT ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in the Registration Statements on Form S-8 of The Interpublic Group of Companies, Inc. (the "Company"), of our reports dated February 25, 2000, with respect to the consolidated financial statements of NFO Worldwide, Inc. and subsidiaries as of December 31, 1999, and for each of the years in the two -year period ended December 31, 1999, which appears in the Company's 2000 Annual Report on Form 10-K: Registration Statements No. 2-79071; No. 2-43811; No. 2-56269; No. 2-61346; No. 2 -64338; No. 2-67560; No. 2-72093; No. 2-88165; No. 2-90878; No. 2-97440 and No. 33-28143, relating variously to the Stock Option Plan (1971), the Stock Option Plan (1981), the Stock Option Plan (1988) and the Achievement Stock Award Plan of the Company; Registration Statements No. 2-53544; No. 2-91564; No. 2-98324; No. 33-22008; No. 33-64062 and No. 33-61371, relating variously to the Employee Stock Purchase Plan (1975), the Employee Stock Purchase Plan (1985) and the Employee Stock Purchase Plan of the Company (1995); Registration Statements No. 33-20291 and No. 33-2830 relating to the Management Incentive Compensation Plan of the Company; Registration Statements No. 33-5352; No. 33-21605; No. 333-4747 and No. 333-23603 relating to the 1986 Stock Incentive Plan, the 1986 United Kingdom Stock Option Plan and the 1996 Stock Incentive Plan, of the Company; Registration Statements No. 33 -10087 and No. 33-25555 relating to the Long-Term Performance Incentive Plan of the Company; Registration Statement No. 333-28029 relating to The Interpublic Outside Directors' Stock Incentive Plan of the Company; Registration Statement No. 33-42675 relating to the 1997 Performance Incentive Plan of the Company; and Registration Statement on Form S-3 No. 333-53592 relating to the public offering of shares. It should be noted that we have not audited any financial statements of NFO Worldwide, Inc. subsequent to December 31, 1999 or performed any audit procedures subsequent to the date of our report. Arthur Andersen LLP New York, New York March 27, 2001 - 173 -  Consent of Independent Public Accountants ----------------------------------------- We consent to the incorporation by reference in the Registration Statements on Form S-8 of The Interpublic Group of Companies, Inc. (the "Company"), of our report dated February 13, 2001, included in the Company's 2000 Annual Report as Form 10-K; Registration Statements No. 2-79071; No. 2-43811; No. 2-56269; No. 2-61346; No. 2-64338; No. 2 -67560; No. 2-72093; No. 2-88165; No. 2-90878; No. 2-97440; and No. 33-28143, relating variously to the Stock Option Plan (1971), the Stock Option Plan (1981), the Stock Option Plan (1988) and the Achievement Stock Award Plan of the Company; Registration Statements No. 2-53544; No. 2-91564; No. 2-98324; No. 33 -22008; No. 33 -64062; and No. 33-61371, relating variously to the Employee Stock Purchase Plan (1975), the Employee Stock Purchase Plan (1985) and the Employee Stock Purchase Plan of the Company (1995); Registration Statements No. 33-20291 and No. 33-2830 relating to the Management Incentive Compensation Plan of the Company; Registration Statements No. 33-5352; No. 33-21605; No. 333-4747; and No. 333-23603 relating to the 1986 Stock Incentive Plan, the 1986 United Kingdom Stock Option Plan and the 1996 Stock Incentive Plan of the Company; Registration Statements No. 33-10087 and No. 33-25555 relating to the Long-Term Performance Incentive Plan of the Company; Registration Statement No. 333-28029 relating to The Interpublic Outside Directors' Stock Incentive Plan of the Company; Registration Statement No. 33-42675 relating to the 1997 Performance Incentive Plan of the Company; and Registration Statement on Form S-3 No. 333-53592 relating to the public offering of shares. J.H. Cohn LLP Roseland, New Jersey March 27, 2001 - 174 - Exhibit 24 POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature appears below constitutes and appoints JOHN J. DOONER, JR., SEAN F. ORR, FREDERICK MOLZ and NICHOLAS J. CAMERA, and each of them, as true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution, for him, and in his name, place and stead, in any and all capacities, to sign the Report on Form 10-K for the year ended December 31, 2000, for The Interpublic Group of Companies, Inc., S.E.C. File No. 1-6686, and any and all amendments and supplements thereto and all other instruments necessary or desirable in connection therewith, and to file the same, with all exhibits thereto, and all documents in connection therewith, with the Securities and Exchange Commission and the New Yor k Stock Exchange, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requested and necessary to be done in and about the premises as fully to all intents and purposes as he might do or could do in person, hereby ratifying and confirming all that said attorney -in-fact and agents or any of them or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Dated: March 29, 2001 ------------------------- ------------------------- John J. Dooner, Jr. James R. Heekin --------------------------- ------------------------- Sean F. Orr Frank B. Lowe ------------------------- ------------------------- Frank J. Borelli Michael A. Miles ------------------------- ------------------------- Reginald K. Brack Leif H. Olsen ------------------------- ------------------------- Jill M. Considine J. Phillip Samper - 175 -  THE INTERPUBLIC GROUP OF COMPANIES, INC. Certified Resolutions --------------------- I, Nicholas J. Camera, Secretary of The Interpublic Group of Companies, Inc. (the "Corporation"), hereby certify that the resolu tions attached hereto were duly adopted on March 29, 2001 by the Board of Directors of the Corporation and that such resolutions have not been amended or revoked. WITNESS my hand and the seal of the Corporation this 29th day of March, 2001. /S/ NICHOLAS J. CAMERA ------------------------------ NICHOLAS J. CAMERA - 176 -  THE INTERPUBLIC GROUP OF COMPANIES, INC. MEETING OF THE BOARD OF DIRECTORS Resolutions re Form 10-K ------------------------ RESOLVED, that the Chairman of the Board and the Executive Vice President and Chief Financial Officer of the Corporation be, and each of them hereby is, authorized to execute and deliver on behalf of the Corporation an annual report on Form 10-K for the year ended December 31, 2000, in the form presented to this meeting with such changes therein as either of them with the advice of the General Counsel shall approve; and further RESOLVED, that the Chairman of the Board in his capacity as Chief Executive Officer, the Executive Vice-President, Chief Financial Officer in his capacity as Chief Financial Officer, and the Vice President and Controller in his capacity as Chief Accounting Officer of the Corporation be, and each of them hereby is, authorized to execute such annual report on Form 10-K; and further RESOLVED, that the officers of the Corporation be and each of them hereby is, authorized and directed to file such annual report on Form 10-K, with all the exhibits thereto and any other documents that may be necessary or desirable in connection therewith, after its execution by t he foregoing officers and by a majority of this Board of Directors, with the Securities and Exchange Commission and the New York Stock Exchange; and further RESOLVED, that the officers and directors of the Corporation who may be required to execute such annual report on Form 10-K be, and each of them hereby is, authorized to execute a power of attorney in the form submitted to this meeting appointing John J. Dooner, Jr., Sean F. Orr, Frederick Molz and Nicholas J. Camera, and each of them, severally, his or her true and lawful attorneys and agents to act in his or her name, place and stead, to execute said annual report on Form 10 -K and any and all amendments and supplements thereto and all other instruments necessary or desirable in connection therewith; and further RESOLVED, that the signature of any officer of the Corporation required by law to affix his signature to such annual report on Form 10-K or to any amendment or supplement thereto and such additional documents as they may deem necessary or advisable in connection therewith, may be affixed by said officer personally or by any attorney -in-fact duly constituted in writing by said officer to sign his name thereto; and further RESOLVED, that the officers of the Corporation be, and each of them hereby is, authorized to execute such amendments or supplements to such annual report on Form 10-K and such additional documents as they may deem necessary or advisable in connection with any such amendment or supplement and to file the foregoing with the Securities and Exchange Commission and the New York Stock Exchange; and further RESOLVED, that the officers of the Corporation be, and each of them hereby is, authorized to take such actions and to execute such other documents, agreements or instruments as may be necessary or desirable in connection with the foregoing. - 177 - INTERPUBLIC IS A GLOBAL MARKETING COMMUNICATIONS AND MARKETING SERVICES COMPANY. We are in the idea business. We provide Clients with customer-driven insights, strategic communications programs and other marketing services that help them build the demand side of their business. Our success and growth are built on the quality of our Client base and the depth of our relationships. TABLE OF CONTENTS: >> FINANCIAL HIGHLIGHTS 1 / CHAIRMEN'S REPORT 2-5 / PHILIP H. GEIER, JR. 6 / LEADERSHIP 7 / PUBLIC RELATIONS 18-21 / HEALTHCARE 22-25 ADVERTISING 8-13 / DIRECT MARKETING 14-17 MARKETING RESEARCH 26-29 SPORTS MARKETING 38-41 / MEETINGS & EVENTS 34-37 / SALES PROMOTION 42-45 / CORPORATE ID & BRAND EQUITY 46-49 MEDIA SERVICES 30-33 / B OARD OF DIRECTORS 50 / OFFICERS & INFORMATION 51 / INTERPUBLIC COMPANIES 52 >> Create Value > The Interpublic Group of Companies, Inc. / 2000 T h e I n t e r p u b l i c G r o u p o f C o m p a n i e s , I n c . / 2 0 0 0 Create>Value The Interpublic Group of Companies, Inc. / 2000 

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