-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, G2h/qK9tKZSxbS7qQYwhCg3NWEZjdGgYHhDqMJEHDxDCEUJMWQPaTPTX+9+f3t9f xsIH49EgqCDWiQtffq3zhA== 0000908230-03-000053.txt : 20030318 0000908230-03-000053.hdr.sgml : 20030318 20030318121607 ACCESSION NUMBER: 0000908230-03-000053 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20030318 EFFECTIVENESS DATE: 20030318 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WPP GROUP PLC CENTRAL INDEX KEY: 0000806968 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ADVERTISING AGENCIES [7311] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-103888 FILM NUMBER: 03607271 BUSINESS ADDRESS: STREET 1: 27 FARM ST STREET 2: WIJ 5RJ CITY: LONDON ENGLAND BUSINESS PHONE: 011442074082204 MAIL ADDRESS: STREET 1: 27 FARM ST STREET 2: WIJ 5RJ CITY: LONDON ENGLAND S-8 1 wpp_s8-31803.txt WPP GROUP PLC FORM S-8 As filed with the Securities and Exchange Commission on March 18, 2003 Registration No. 333- ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 WPP GROUP PLC (Exact name of registrant as specified in its charter) England and Wales None (State or other jurisdiction (I.R.S. Employer Identification No.) of incorporation or organization) 27 Farm Street London W1J 5RJ England (Address of principal executive offices, including zip code) The WPP Executive Stock Option Plan (Full title of the plan) David Calow Group Chief Counsel 27 Farm Street London W1J 5RJ England (Name and address of agent for service) (011 44) 20 7408 2204 (Telephone number, including area code, of agent for service) Copy to: Curt C. Myers, Esq. Davis & Gilbert LLP 1740 Broadway New York, New York 10019 (212) 468-4800 Calculation of Registration Fee
======================================================================================================================== Title of securities to be registered Amount to be Proposed maximum Proposed maximum Amount of registered offering price aggregate registration per share offering price fee - ------------------------------------------------------------------------------------------------------------------------ Ordinary Shares, nominal value 10p each ("Ordinary 1,000,000 $5.33(2) $5,330,000 $431.19 Shares") issuable upon exercise of additional options that may be granted to persons resident in the U.S. under the Registrant's Executive Stock Option Plan (the "Plan")(1) Ordinary Shares issuable to the Registrant's 15,000,000 $5.27(5) $79,050,000 $6,395.15 Depositary to support American Depositary Shares ("ADSs") issuable upon exercise of additional options that may be granted under the Plan to persons resident in countries outside the United Kingdom (3)(4) Ordinary Shares issuable upon exercise of 3,832 $4.21 $16,132.72(6) $1.31 outstanding options granted under the Plan to persons resident in the U.S. (1) (table continued) ======================================================================================================================== Title of securities to be registered Amount to be Proposed maximum Proposed maximum Amount of registered offering price aggregate registration per share offering price fee - ------------------------------------------------------------------------------------------------------------------------ Ordinary Shares issuable to the Registrant's 8,305,017 $(7) $60,814,904.38(8) $4,919.92 Depositary to support ADSs issuable upon exercise of outstanding options granted under the Plan to persons resident in countries outside the United Kingdom. (3)(4) Total $11,747.57 - ------------------------------------------------------------------------------------------------------------------------
(1) Includes an indeterminate amount of additional Ordinary Shares that may be necessary to adjust the number of Ordinary Shares subject to issuance pursuant to the Plan as a result of any future stock split, stock dividend or similar transaction with respect to the Ordinary Shares. (2) Estimated solely for purposes of calculating the registration fee. Such estimate has been calculated pursuant to Rule 457(c) based on the average of the high and low prices of the Ordinary Shares as reported on The London Stock Exchange on March 13, 2003, translated into U.S. dollars using the Federal Reserve Bank's Noon Buying Rate for pounds sterling of (pound)1.00 - $1.6057. (3) Includes an indeterminate amount of additional Ordinary Shares that may be necessary to adjust the number of Ordinary Shares underlying the ADSs subject to issuance pursuant to the Plan as a result of any future stock split, stock dividend or similar transaction with respect to the Ordinary Shares. (4) American Depositary Shares of the Registrant evidenced by American Depositary Receipts ("ADRs") issuable upon deposit of the Ordinary Shares registered hereunder have been registered under a separate registration statement on Form F-6 (Reg. No. 333-5906). Each ADS represents five Ordinary Shares. (5) Estimated solely for the purposes of calculating the registration fee. Such estimate has been calculated pursuant to Rule 457(c) based on the average of the high and low prices of the ADRs as reported on the Nasdaq National Market on March 12, 2003, divided by five. (6) The proposed maximum aggregate offering price is the sum of the exercise prices of the options exercisable for Ordinary Shares granted and outstanding under the Plan as of March 12, 2003, and not included in the prior registration statement relating to the Plan, in accordance with Rule 457(h) promulgated under the Securities Act of 1933. (7) The exercise prices payable for the Ordinary Shares underlying ADRs issuable upon exercise of outstanding options granted under the Plan are as follows: $6.64 (5,940,082 shares), $6.94 (57,625 shares); $9.30 (368,790 shares), $16.90 (25,080 shares), $12.65 (345,910 shares), $12.42 (22,615 shares), $11.65 (68,405 shares), $11.78 (7,735 shares), $7.08 (1,153,590 shares), and $10.81 (315,185 shares). (8) The proposed maximum aggregate offering price is the sum of the exercise prices of the options exercisable for ADSs granted and outstanding under the Plan as of March 12, 2003, and not included in the prior registration statement relating to the Plan, in accordance with Rule 457(h) promulgated under the Securities Act. PART I INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS Item 1. Plan Information * ---------------- Item 2. Registrant Information and Employee Plan Annual Information * ----------------------------------------------------------- * The document(s) containing the information specified in Part I of Form S-8 will be sent or given to participants in the WPP Executive Stock Option Plan (the "Plan"), as required by Rule 428(b)(1) under the Securities Act of 1933. These documents are not required to be filed with the Commission, but, together with the documents incorporated by reference in this Registration Statement pursuant to Item 3 of Part II of this Registration Statement, constitute a prospectus that meets the requirements of Section 10(a) of the Securities Act. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation of Documents by Reference --------------------------------------- The following documents filed with the Commission by the Company are incorporated by reference in this Registration Statement: a) The Registrant's Annual Report on Form 20-F for the fiscal year ended December 31, 2001, b) All other reports filed by the Registrant pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 since January 1, 2002, c) The Sections entitled "Description of WPP Ordinary Shares" and "Description of WPP American Depositary Shares" contained in the Proxy Statement/Prospectus, dated August 29, 2000, included in Amendment No. 1, filed August 29, 2000, to a Registration Statement on Form F-4 filed by the Registrant (File No. 333-405165). All documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934 after the date of this Registration Statement and prior to the filing of a post-effective amendment to this Registration Statement that indicates that all securities offered hereby have been sold or that deregisters all securities remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any other subsequently filed document that also is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement. Item 4. Description of Securities ------------------------- Not applicable. Item 5. Interests of Named Experts and Counsel -------------------------------------- The validity under English law of the WPP Ordinary Shares offered hereby has been passed upon by David Calow, Esq., of Calow & Co, Solicitors. Mr. Calow is Group Legal Counsel to the Registrant. Mr. Calow owns 9,950 Ordinary Shares of the Registrant. Item 6. Indemnification of Directors and Officers ----------------------------------------- Article 128 of the Registrant's Articles of Association provides: "Subject to the provisions of and to the extent permitted by the Companies Act 1985 and every other statute, statutory instrument, regulation or order for the time being in force concerning companies registered under that Act, every director or other officer or auditor of the Company shall be indemnified out of the assets of the Company against all liabilities incurred by him in actual or purported execution or discharge of his duty or the exercise or purported exercise of his actual or purported execution or discharge of his duty or the exercise or purported exercise of his powers or otherwise in relation to or in connection with his duties, powers or offices but, (a) this indemnity shall not apply to any liability to the extent that it is recovered from any other person; 2 (b) the indemnity is subject to such officer or auditor taking all reasonable steps to effect such recovery, to the intent that the indemnity shall not apply where an alternative right of recovery is available and capable of being enforced." Section 310 of the U.K. Companies Act 1985 (as amended by Section 147 of the U.K. Companies Act 2989) applicable to the Registrant, a public limited company incorporated under the laws of England and Wales, provides as follows: "310. PROVISIONS EXEMPTING OFFICERS AND AUDITORS FROM LIABILITY (1) This section applies to any provision, whether contained in a company's articles or in any contract with the company or otherwise, for exempting any officer of the company or any person (whether an officer or not) employed by the company as auditor from, or indemnifying him against, any liability which by virtue of any rule of law would otherwise attach to him in respect of any negligence, default, breach of duty or breach of trust of which he may be guilty in relation to the company. (2) Except as provided by the following subsection, any such provision is void. (3) This section does not prevent the company (a) from purchasing and maintaining for any such officer or auditor insurance against any such liability; or (b) from indemnifying any such officer or auditor against any liability incurred by him (i) in defending any proceedings (whether civil or criminal) in which judgment is given in his favor or he is acquitted, or (ii) in connection with any application under section 144(3) or (4) (acquisition of shares by innocent nominee) or section 727 (general power to grant relief in case of honest and reasonable conduct) in which relief is granted to him by the court." Section 727 of the UK Companies Act 1985 provides as follows: "727 POWER OF COURT TO GRANT RELIEF IN CERTAIN CASES: "(1) If in any proceedings for negligence, default, breach of duty or breach of trust against any officer of a company or a person employed by a company as auditor (whether he is or is not an officer of the company) it appears to the court hearing the case that that officer or person is or may be liable in respect to the negligence, default, breach of duty or breach of trust, but that he has acted honestly and reasonably and that having regard to all of the circumstances of the case (including those connected with his appointment) he ought fairly to be excused for the negligence, default, breach of duty or breach of trust, that court may relieve him, either wholly or partly, from his liability on such terms as it thinks fit. (2) If any such officer or person as above-mentioned has reason to apprehend that any claim will or might be made against him in respect of any negligence, default, breach of duty or breach of trust, he may apply to the court for relief; and the court on the application has the same power to relieve him as under this section it would have had if it had been a court before which proceedings against that person for negligence, default breach of duty or breach of trust had been brought. (3) Where a case to which subsection (1) applies is being tried by a judge with a jury, the judge, after hearing the evidence, may, if he is satisfied that the defendant or defender ought in pursuance of that subsection to be relieved either in whole or in part from the liability sought to be enforced against him, withdraw the case in whole or in part from the jury and forthwith direct judgment to be entered for the defendant or defender on such terms as to costs or otherwise as the judge may think proper." 3 The Registrant maintains directors' and officers' insurance coverage that, subject to policy terms and limitations, will include coverage to reimburse the Registrant for amounts that it may be required or permitted by law to pay directors or officers of the Registrant. Item 7. Exemption from Registration Claimed ----------------------------------- Not applicable. Item 8. Exhibits -------- Exhibit No. Description of Exhibit - ----------- ---------------------- 4.1 Memorandum and Articles of Association of WPP Group plc (incorporated by reference to Exhibit 1.1 of the Company's Annual Report on Form 20-F for the year ended December 31, 2000). 4.2 Amended and Restated Deposit Agreement, dated as of October 24, 1995, among WPP Group plc, Citibank, N.A., as Depositary, and all holders and beneficial owners from time to time of American Depositary Receipts issued thereunder (incorporated by reference to Exhibit (a) of the Registration Statement on Form F-6 filed with the Commission on October 31, 1996 (File No. 333-5906)). 4.3 Amendment No. 1 to Amended and Restated Depositary Agreement, dated as of November 9, 1999, by and among WPP Group plc, Citibank, N.A., as Depositary, and all holders and beneficial owners from time to time of American Depositary Receipts issued thereunder (incorporated herein by reference to Exhibit (a)(i) of Post-Effective Amendment No. 1 to the Registration Statement on Form F-6 filed with the Commission on November 9, 1999 (File No. 333-5906)). 4.4 Amendment No. 2 to Amended and Restated Deposit Agreement, dated October 3, 2000, among WPP Group plc, Citibank, N.A., as Depositary, and all holders and beneficial owners from time to time of American Depositary Receipts issued thereunder (incorporated herein by reference to Exhibit (a)(i) of Amendment No. 2 to the Registration Statement on Form F-6, filed with the Securities and Exchange Commission on June 30, 2000 (File No. 333-5906). 4.5 Amendment No. 3 to Amended and Restated Deposit Agreement, dated May 17, 2002, among WPP Group plc, Citibank, N.A., as Depositary, and all holders and beneficial owners from time to time of American Depositary Receipts issued thereunder (incorporated herein by reference to Exhibit (a)(i) of Amendment No. 3 to the Registration Statement on Form F-6, filed with the Securities and Exchange Commission on April 19, 2002 (File No. 333-5906). 4.6 WPP Executive Stock Option Plan (filed herewith). 5.2 Opinion of David Calow, Esq. regarding validity of shares being registered (filed herewith). 23.1* Consent of Arthur Andersen (omitted). 23.2 Consent of David Calow, Esq. (included in the opinion referenced under Exhibit 5). 24 Power of Attorney (included on the signature page). - -------------------------------- * The consent of Arthur Andersen LLP, the former independent public accountants for the Registrant as of December 31, 2001, 2000 and 1999 and for the years then ended, could not be obtained after reasonable efforts and, accordingly, is being omitted pursuant to Rule 437a under the Securities Act of 1933. Item 9. Undertakings ------------ (a) The undersigned Registrant hereby undertakes: 4 (1) To file, during any period in which it offers or sell securities, a post-effective amendment to this Registration Statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended (the "Securities Act"); (ii) To reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement; provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment is contained in periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in this Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be as a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities that remain unsold at the termination of the offering. (b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Exchange Act) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described in Item 6 above, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether or not such indemnification is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. 5 SIGNATURES ---------- Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of London on March 17, 2003. WPP GROUP plc By: /s/ Paul W. G. Richardson --------------------------------------------- Name: Paul W. G. Richardson Title Group Finance Director POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENT, that each person whose signature appears below hereby severally constitutes and appoints Paul W. G. Richardson his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement and all documents relating thereto, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing necessary or advisable to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement on Form S-8 has been signed by the following persons in the capacities and on the dates indicated.
Signature Title Date - --------- ----- ---- /s/ Philip Lader - ------------------------------------ Chairman (non-executive) March 17, 2003 Philip Lader of the Board of Directors /s/ Sir Martin Sorrell - ------------------------------------ Group Chief Executive March 17, 2003 Sir Martin Sorrell (Principal Executive Officer) /s/ Paul W. G. Richardson - ------------------------------------ Group Finance Director March 17, 2003 Paul W. G. Richardson (Principal Financial Officer) /s/ David Barker - ------------------------------------ Group Financial Controller March 18, 2003 David Barker (Controller) /s/ Beth Axelrod - ------------------------------------ Executive Director and March 13, 2003 Beth Axelrod Authorized Representative in the United States /s/ Howard Paster - ------------------------------------ Executive Director March 13, 2003 Howard Paster (continued) 6 Signature Title Date - --------- ----- ---- /s/ Jeremy J. D. Bullmore - ------------------------------------ Non-Executive Director March 13, 2003 Jeremy J. D. Bullmore - ------------------------------------ Non-Executive Director March __, 2003 Esther Dyson - ------------------------------------ Non-Executive Director March __, 2003 Masao Inagaki - ------------------------------------ Non-Executive Director March __, 2003 John B. H. Jackson /s/ Michael Jordan - ------------------------------------ Non-Executive Director March 13, 2003 Michael Jordan - ------------------------------------ Non-Executive Director March __, 2003 David Komansky - ------------------------------------ Non-Executive Director March __, 2003 Christopher Mackenzie /s/ Stanley W. Morten - ------------------------------------ Non-Executive Director March 17, 2003 Stanley W. Morten - ------------------------------------ Non-Executive Director March __, 2003 John A. Quelch 7 EXHIBIT INDEX ------------- Exhibit No. Description of Exhibit - ----------- ---------------------- 4.1 Memorandum and Articles of Association of WPP Group plc (incorporated by reference to Exhibit 1.1 of the Company's Annual Report on Form 20-F for the year ended December 31, 2000). 4.2 Amended and Restated Deposit Agreement, dated as of October 24, 1995, among WPP Group plc, Citibank, N.A., as Depositary, and all holders and beneficial owners from time to time of American Depositary Receipts issued thereunder (incorporated by reference to Exhibit (a) of the Registration Statement on Form F-6 filed with the Commission on October 31, 1996 (File No. 333-5906)). 4.3 Amendment No. 1 to Amended and Restated Depositary Agreement, dated as of November 9, 1999, by and among WPP Group plc, Citibank, N.A., as Depositary, and all holders and beneficial owners from time to time of American Depositary Receipts issued thereunder (incorporated herein by reference to Exhibit (a)(i) of Post-Effective Amendment No. 1 to the Registration Statement on Form F-6 filed with the Commission on November 9, 1999 (File No. 333-5906)). 4.4 Amendment No. 2 to Amended and Restated Deposit Agreement, dated October 3, 2000, among WPP Group plc, Citibank, N.A., as Depositary, and all holders and beneficial owners from time to time of American Depositary Receipts issued thereunder (incorporated herein by reference to Exhibit (a)(i) of Amendment No. 2 to the Registration Statement on Form F-6, filed with the Securities and Exchange Commission on June 30, 2000 (File No. 333-5906). 4.5 Amendment No. 3 to Amended and Restated Deposit Agreement, dated May 17, 2002, among WPP Group plc, Citibank, N.A., as Depositary, and all holders and beneficial owners from time to time of American Depositary Receipts issued thereunder (incorporated herein by reference to Exhibit (a)(i) of Amendment No. 3 to the Registration Statement on Form F-6, filed with the Securities and Exchange Commission on April 19, 2002 (File No. 333-5906). 4.6 WPP Executive Stock Option Plan (filed herewith). 5.2 Opinion of David Calow, Esq. regarding validity of shares being registered (filed herewith). 23.1* Consent of Arthur Andersen (omitted). 23.2 Consent of David Calow, Esq. (included in the opinion referenced under Exhibit 5). 24 Power of Attorney (included on the signature page).
- -------------------------------- * The consent of Arthur Andersen LLP, the former independent public accountants for the Registrant as of December 31, 2001, 2000 and 1999 and for the years then ended, could not be obtained after reasonable efforts and, accordingly, is being omitted pursuant to Rule 437a under the Securities Act of 1933. 8 EX-4.6 3 wpp_exh46-31803.txt WPP GROUP PLC FORM S-8 THE WPP EXECUTIVE STOCK OPTION PLAN As adopted by the Directors on 24th June, 1996 and amended by the Compensation Committee of the Board on 23rd April, 1997 and amended by the Compensation Committee of the Board on 24th September, 1998 and amended by the Compensation Committee of the Board on 5th May, 1999 (with the approval of the shareholders on 28th June, 1999) and amended by the Compensation Committee of the Board on 22nd September, 1999 and amended by the Compensation Committee of the Board on 20th September, 2000 (with the approval of shareholders on 26th June, 2000) CONTENTS Clause Page - ------ ---- 1. Definitions and Interpretation.......................1 2. Eligibility..........................................2 3. Grant of Options.....................................2 4. Limits...............................................3 5. Exercise of Options..................................5 6. Takeover, Reconstruction and Winding-up..............6 7. Variation of Capital.................................7 8. Alterations..........................................8 9. Miscellaneous........................................8 Schedule....................................................10 Appendix 1..................................................12 Appendix 2..................................................16 Appendix 3..................................................17 Appendix 4................................................ 18 Appendix 5................................................ 19 Appendix 6................................................ 21 1. Definitions and Interpretation (1) In this Scheme, unless the context otherwise requires: "the Board" means the board of directors of the Company or a committee appointed by such board of directors; "Depository" means any depository or depositories which hold or whose nominee holds WPP ADSs; "the Company" means WPP Group plc (registered in England and Wales No. 1003653); "the Grant Date" in relation to an Option means the date on which the Option was granted; "Group Member" means: (a) a Participating Company or a body corporate which is (within the meaning of section 736 of the Companies Act 1985) the Company's holding company or a subsidiary of the Company's holding company; or (b) a body corporate which is (within the meaning of section 258 of that Act) a subsidiary undertaking of a body corporate within paragraph (a) above and has been designated by the Board for this purpose; "Option" means a right to acquire Shares or WPP ADSs under the Plan; and a right to acquire Shares shall be known as a "Share Option" and a right to acquire WPP ADSs shall be known as an "ADS Option"; "Participant" means a person who holds an Option granted under the Scheme; "Participating Company" means the Company or any Subsidiary; "the Plan" means the WPP Executive Stock Option Plan as herein set out but subject to any alterations or additions made under Rule 8 below; "Schedule 9" means Schedule 9 to the Taxes Act 1988; "Share" means an ordinary share in the capital of the Company, and for the purposes of Rule 4 (Limits) and if the context requires, other provisions of the Rules, "Shares" include WPP ADSs; "Subsidiary" means a body corporate which is a subsidiary of the Company within the meaning of section 736 of the Companies Act 1985; "the Taxes Act 1988" means the Income and Corporation Taxes Act 1988; "the WOP" means the WPP Worldwide Ownership Plan (originally adopted on 24th June, 1996) as from time to time amended; "WPP ADS" means an American Depository Share representing 10 Shares pursuant to the Amended and Restated Deposit Agreement between the 2 Company and Citibank NA as of 24th October, 1995 and/or any other American depository share arrangement sponsored by the Company; "WPP Receipt" means an American Depository Receipt evidencing WPP ADSs; and expressions not otherwise defined herein have the same meanings as they have in Schedule 9. (2) Any reference in the Plan to any enactment includes a reference to that enactment as from time to time modified, extended or re-enacted. 2. Eligibility (1) Subject to sub-rule (3) below, a person is eligible to be granted an Option under the Plan if (and only if) he is a full-time director or qualifying employee of a Participating Company. (2) For the purposes of sub-rule (1) above: (a) a person shall be treated as a full-time director of a Participating Company if he is obliged to devote to the performance of the duties of his office or employment with that and any other Participating Company not less than 25 hours a week; (b) a qualifying employee, in relation to a Participating Company, is an employee of the Participating Company (other than one who is a director of a Participating Company). (3) A person is not eligible to be granted an Option under the Plan at any time within the two years immediately preceding the date (if any) on which he is bound to retire in accordance with the terms of his contract of employment. 3. Grant of Options (1) Subject to sub-rule (2) below and Rule 4 below, the Board may grant or procure the grant to any person who is eligible to be granted an Option under the Plan an Option to acquire Shares in the Company, upon the terms set out in the Plan and upon such other objective terms as the Board may specify; and for this purpose an option to acquire includes an option to purchase and an option to subscribe. Unless the Board otherwise determines Share Options shall be granted to persons who are eligible under the Plan and who are resident in the United Kingdom and ADS Options shall be granted to other persons who are eligible. (2) An Option may only be granted under the Plan: (a) within the period of 6 weeks beginning with the date on which the Plan is approved and adopted by the Company in general meeting or the dealing day next following the date on which the Company announces its results for any period, or at any other time when the circumstances are considered by the Board to be sufficiently exceptional to justify the grant thereof; and (b) within the period of 10 years beginning with the date on which the Plan is approved and adopted as aforesaid 24th June, 1996. 3 (3) The price at which Shares may be acquired by the exercise of an Option shall be determined by the Board before the grant thereof, but shall not be less than: (a) in the case of a Share Option, if Shares of the same class as those Shares are listed in the London Stock Exchange Daily Official List, the average middle-market quotation of Shares of that class (as derived from that List) over a number of consecutive dealing days (being not more than five) immediately preceding the Grant Date; (b) in the case of a Share Option, if paragraph (a) above does not apply, the market value (within the meaning of Part VIII of the Taxation of Chargeable Gains Act 1992) of Shares of that class, as reasonably determined by the Board; (c) in the case of an ADR Option, the fair market value of a WPP ADS as quoted on NASDAQ over a number of consecutive dealing days (being not more than five) immediately preceding the Grant Date; or (d) except in the case of an Option to acquire shares otherwise than by subscription, the nominal value of those Shares. (4) An Option granted under the Plan to any person: (a) shall not, except as provided in Rule 5(4) below, be capable of being transferred by him; and (b) shall lapse forthwith if he is adjudged bankrupt. 4. Limits (1) No options shall be granted under the Plan or the WOP which would, at the time they are granted, exceed the limit set out in this Rule 4(1). That limit is that the number of shares which; (i) shall have been issued; or (ii) may be issued in pursuance of options granted under the Plan or the WOP in the period of 10 years beginning with 28th June, 1999 (which is subject to the requirement under Rule 3(2)(b) that Options may only be granted within 10 years after 28th June, 1996) must not exceed such number as represents 10 per cent of the ordinary share capital of the Company in issue at the time of grant of the options. In applying this Rule, Shares issued under any other employee share scheme adopted by the Company after 28th June 1999 (or Shares issued or capable of issue under any other share option scheme of the Company adopted after that date, as the case may be) shall also count against that limit. (2) No person shall be granted Options under the Plan which would, at the time they are granted, cause the market value of the Shares in the Company for which he may subscribe (but excluding those for which he has already subscribed) in pursuance of Options granted to him in the period of 10 years ending at that time, under the Plan or under any other share option scheme (other than a savings related scheme) adopted by the Company, to exceed 4 times the higher of the total remuneration (excluding benefits in kind) expressed as an annual rate 4 payable by the Participating Companies to him as at that time and the total remuneration (excluding benefits in kind) received by him in any period of 12 months ending within the preceding 2 years in respect of his office or employment with the Participating Companies; and for the purposes of this sub-rule: (a) any Option which shall have been released to any extent shall be treated to that extent as if it were still exercisable; (b) shares in a Participating Company shall not be regarded as benefits in kind; (c) where a payment of remuneration is made otherwise than in sterling, the payment shall be treated as being of the amount of sterling ascertained by applying such rate of exchange published in a national newspaper as the Board shall reasonably determine; and (d) a person's remuneration shall be deemed to include fees paid to a company whose principal purpose is to provide his services, being services of a nature which he would be expected to perform as an employee of a Participating Company, and being fees referable to those services and exclusive of VAT. (3) For the purposes of this Rule, the market value of the Shares in relation to which an Option was granted shall be calculated: (a) in the case of an Option granted under the Plan, as on the day by reference to which the price at which Shares may be acquired by the exercise thereof was determined in accordance with Rule 3(3) above; (b) in the case of an option granted under any option scheme (other than a savings related scheme) approved by the Inland Revenue, as at the time when it was granted or, in a case where an agreement relating to the Shares has been made under paragraph 29 of Schedule 9, such earlier time or times as may be provided in the agreement; and (c) in the case of any other option, as on the day or days by reference to which the price at which shares may be acquired by the exercise thereof was determined and the Board may adopt such exchange rate as it thinks fit for the conversion of one currency to another currency. (4) No person shall be granted an Option under the Plan if the number of Shares which may be acquired on exercise of that Option, when added to the number of Shares which have been or may still be acquired on the exercise of Options previously granted to him under the Plan, exceeds 3% of the total of (a) the number of Shares which have been or may still be acquired on the exercise of Options previously granted to all persons under the Plan, and (b) the number of Shares still available for the grant of Options under the Plan. (5) Any Option granted under the Plan shall be limited and take effect so that the above limits are complied with. 5 5. Exercise of Options (1) The exercise of any Option granted under the Plan shall be effected in such form and manner as the Board may from time to time prescribe. (2) Subject to sub-rules (4) and (5) below and to sub-rules (1) and (3) of Rule 6 below, an Option granted under the Plan may not be exercised before the third anniversary of the Grant Date. (3) Subject to sub-rule (4) and paragraphs (a) and (c) of sub-rule (5) and paragraph (b) of sub-rule 7 below and to sub-rules (1) and (3) of Rule 6 below, an Option granted under the Plan may not be exercised if the relevant condition is not satisfied; and in this sub-rule the relevant condition is a condition related to performance which constitutes a term specified by the Board as mentioned in Rule 3(1) above or, if there is no such condition, the condition in the Schedule hereto. (4) If any Participant dies before exercising an Option granted to him under the Plan and at a time when either he is a director or employee of a Group Member or he is or would but for sub-rule (3) above be entitled to exercise the Option by virtue of sub-rule (5) below, the Option may (and must, if at all) be exercised by his personal representatives within 12 months after the date of his death. (5) If any Participant ceases to be a director or employee of a Group Member (otherwise than by reason of his death), the following provisions apply in relation to any Option granted to him under the Plan: (a) if he so ceases by reason of injury or disability, or by reason only that his office or employment is in a company which ceases to be a Group Member, or relates to a business or part of a business which is transferred to a person who is not a Group Member, the Option may (and subject to sub-rule (4) above must, if at all) be exercised within the exercise period; (b) if he so ceases by reason of retirement on or after reaching the age at which he is bound to retire in accordance with the terms of his contract of employment (or, if there is no such age, if he retires at all), the Option may (and subject to sub-rule (4) above must, if at all) be exercised within the exercise period, but subject to sub-rule (3) above; (c) if he so ceases for any other reason, the Option may not be exercised at all unless the Board shall so permit, in which event it may (and subject to sub-rule (4) above must, if at all) be exercised to the extent permitted by the Board within the exercise period; and in this sub-rule the exercise period is the period which shall expire 12 months after his so ceasing or 42 months after the Grant Date, whichever shall be the latest. (6) Subject to sub-rule 6(A) below, a Participant shall not be treated for the purposes of sub-rule (5) above as ceasing to be a director or employee of a Group Member until such time as he is no longer a director or employee of any Group Member, and a female Participant who ceases to be such a director or employee by reason of pregnancy or confinement and who exercises her right to return to work under the Employment Rights Act 1996 before exercising an Option under the Plan shall be treated for those purposes as not having ceased to be such a director or employee. 6 (6A) In the case of Options granted after 1st September 1999 (other than under the Approved Part), a Participant, who gives or is given notice to leave employment as a director or employee of a Group Member in any circumstances other than death or in those circumstances referred to in sub-rule (5)(a) or (b), shall, if he subsequently ceases to be in such employment, be treated for the purposes of sub-rule (5) above as ceasing to be a director or employee of a Group Member on the date on which that notice is given (and for the avoidance of doubt any purported exercise of the option during the period of notice shall be of no effect). If a Participant is given notice to leave employment as a director or employee of a Group Member and the Board subsequently uses its discretion under sub- rule (5)(c) to allow his Option to be exercisable, nothing in this sub- rule (6)A will make his Option lapse or cease to be exercisable. (7) Notwithstanding any other provision of the Plan, an Option granted under the Plan (a) may not be exercised after the expiration of the period of 10 years (or such shorter period as the Board may have determined before the grant thereof) beginning with the Grant Date (the last day of such period being the "Expiry Date"); and (b) in respect of any option granted after 1 September 1998, such option shall be exercisable for the period of four (4) months ending on the Expiry Date irrespective of whether the relevant condition (as that term is defined in Rule 5(3)) has been satisfied. (8) Within 30 days after an Option under the Plan has been exercised by any person, the grantor of the Option shall, in the case of a Share Option, procure the allotment or transfer to him (or a nominee for him) of the number of Shares in respect of which the Option has been exercised and, in the case of an ADS Option, procure the issue to him of a WPP Receipt evidencing the WPP ADSs in respect of which the Option has been exercised (including, if appropriate, by procuring the allotment or transfer of Shares to a Depository) unless: (a) the Board considers that the issue or transfer thereof would not be lawful in all relevant jurisdictions; or (b) in a case where a Group Member is obliged to account for any tax (in any jurisdiction) for which the person in question is liable by virtue of the exercise of the Option, that or another Group Member is unable to withhold the tax from his remuneration nor has received payment from him of a corresponding amount. (8A) The Board may agree with any Participant at any time that an Option granted under the Plan before 28th June, 1999 shall be treated as if it had been an ADS Option (and not a Share Option). The Board shall select such exchange rate as it considers appropriate for converting the price at which Shares may be acquired from sterling to U.S. dollars. (9) All Shares allotted under the Plan shall rank pari passu in all respects with the Shares of the same class for the time being in issue save as regards any rights attaching to such Shares by reference to a record date prior to the date of the allotment. (10) If Shares of the same class as those allotted under the Plan are listed in the London Stock Exchange Official List, the Company shall apply to the London Stock Exchange for any Shares so allotted to be admitted to that List. 6. Takeover, Reconstruction and Winding-up (1) If any person obtains control of the Company (within the meaning of section 840 of the Taxes Act 1988) as a result of making a general offer to acquire Shares in the Company, or having obtained such 7 control makes such an offer, the Board shall within 7 days of becoming aware thereof notify every Participant thereof and, subject to sub-rules (4), (5) and (7) of Rule 5 above, an Option granted under the Plan may be exercised within three months (or such longer period as the Board may permit) of such notification. (2) For the purposes of sub-rule (1) above, a person shall be deemed to have obtained control of the Company if he and others acting in concert with him have together obtained control of it. (3) If any person becomes bound or entitled to acquire Shares in the Company under sections 428 to 430F of the Companies Act 1985, or if under section 425 of that Act the Court sanctions a compromise or arrangement proposed for the purposes of or in connection with a scheme for the reconstruction of the Company or its amalgamation with any other company or companies, or if the Company passes a resolution for voluntary winding up, or if an order is made for the compulsory winding up of the Company, the Board shall forthwith notify every Participant thereof and any Option granted under the Plan may, subject to sub-rules (4), (5) and (7) of Rule 5 above, be exercised within one month of such notification, but to the extent that it is not exercised within that period shall (notwithstanding any other provision of the Plan) lapse on the expiration thereof. (4) The Board may determine (the determination to apply equally to all Options outstanding at the time) that the provisions of sub-rules (1) and (3) above will neither cause Options to become exercisable nor to lapse at different times than would otherwise be the case, if the Board considers that the Options will continue to be an appropriate incentive notwithstanding the changed circumstances, or that the position of Participants can be adequately preserved by the grant to them of some other right or rights in substitution for or addition to the existing rights. 7. Variation of Capital (1) In the event of any increase or variation of the share capital of the Company (whenever effected), the Board may make such adjustments as it considers appropriate under sub-rule (2) below. (2) An adjustment made under this sub-rule shall be to one or more of the following: (a) the number of Shares in respect of which any Option granted under the Plan may be exercised; (b) the price at which Shares may be acquired by the exercise of any such Option: (c) where any such Option has been exercised, but no Shares have been allotted or transferred pursuant to such exercise, the number of Shares which may be so allotted or transferred and the price at which they may be acquired. (3) An adjustment under sub-rule (2) above may have the effect of reducing the price at which Shares may be acquired by the exercise of an Option to less than their nominal value, but only if and to the extent that the Board shall be authorised to capitalise from the reserves of the Company a sum equal to the amount by which the nominal value of the Shares in respect of which the Option is exercised and which are to be allotted pursuant to such exercise exceeds the price at which the same may be subscribed for and to apply such sum in paying up such amount on such Shares; and so that on exercise of any Option in respect of 8 which such a reduction shall have been made the Board shall capitalise such sum (if any) and apply the same in paying up such amount as aforesaid. (4) As soon as reasonably practicable after making any adjustment under sub-rule (2) above, the Board shall give notice in writing thereof to any Participant affected thereby. 8. Alterations (1) Subject to sub-rule (2) below, the Board may at any time alter or add to all or any of the provisions of the Plan, or the terms of any Option granted under it, in any respect. (2) No alteration or addition to the advantage of Participants shall be made under sub-rule (1) above to any Rule of the Plan without the prior approval by ordinary resolution of the members of the Company in general meeting other than a minor amendment to benefit the administration of the Plan, to take account of a change in legislation or to obtain or maintain favourable tax, exchange control or regulatory treatment for any Participant or Group Member. (3) As soon as reasonably practicable after making any alteration or addition under sub-rule (1) above, the Board shall give notice in writing thereof to any Participant affected thereby. 9. Miscellaneous (1) The rights and obligations of any individual under the terms of his office or employment with any Group Member shall not be affected by his participation in the Plan or any right which he may have to participate therein, and an individual who participates therein shall by participating be deemed to waive any and all rights to compensation or damages in consequence of the termination of his office or employment for any reason whatsoever insofar as those rights arise or may arise from his ceasing to have rights under or be entitled to exercise any Option under the Plan as a result of such termination. (2) In the event of any dispute or disagreement as to the interpretation of the Plan, or as to any question or right arising from or related to the Plan, the decision of the Board shall be final and binding upon all persons. (3) The Company and any Subsidiary may provide money to the trustees of any trust or any other person to enable them or him to acquire Shares to be held for the purposes of the Plan (which Shares may be held by a Depository on behalf of any such trustees or other person) or enter into any guarantee or indemnity for these purposes, to the extent permitted by section 153 of the Companies Act 1985. (4) In the event that Shares are transferred to a Participant in pursuance of any Option granted under the Plan, the Participant shall, if so required by the person making the transfer, join that person in making a claim for relief under section 165 of the Taxation of Chargeable Gains Act 1992 in respect of the disposal made by him in effecting such transfer, should such relief be available. (5) Any notice or other communication under or in connection with the Plan may be given by personal delivery or by sending the same by post, in the case of a company to its registered office, and in the case of an individual to his last known address, or, where he is a director or employee of a Group Member, either to his last known address or to the 9 address of the place of business at which he performs the whole or substantially the whole of the duties of his office or employment. (6) The Board may establish further plans based on the Plan but modified to take account of local tax, exchange control or securities laws in overseas territories, provided that any Shares made available under such further plans are treated as counting against the limits expressed in Rule 4(1) to (6). 10. Withholding (1) The grant or exercise of any Option under this Scheme is subject to the condition that the grant or an exercise of the Option shall not be valid unless the Participant has, in addition to complying with the other requirements of this Scheme, paid or procured the payment to the Group Member which is his employer, or otherwise provided for (in a manner satisfactory to that Group Member or, if appropriate, the trustees of any employee benefit trust) an amount equal to the Taxation for which any Group Member may be liable by reason of that grant or exercise. (2) Without limitation to (1) above, the Company or any other Group Member which is a Participant's employer or the trustees of any employee benefit trust may withhold any amount and make such arrangements as it considers necessary which comply with applicable law to meet any liability to Taxation in respect of the grant, exercise or cancellation of Options or other event relating to Options or in respect of any benefit under this Scheme. These arrangements may include the sale of any Shares on behalf of a Participant, which the Participant is deemed to have authorised, to produce a cash sum sufficient to meet the Taxation liabilities referred to in this Rule 10. (3) The Company may in its sole discretion waive the requirements set out in this Rule 10 in respect of any part of the Participant's employer's liability to Taxation, including in particular, any employer's liability to National Insurance Contributions. (4) In this Rule, "Taxation" means all forms of taxation or levy by any state or any political sub-division of a state and includes income tax, Pay as You Earn, National Insurance or other social security contributions, whether being the primary liability of the employer or the employee, or any other person. 10 SCHEDULE 1. The condition in this Schedule is that (i) The average WPP TSR for a Relevant End Period exceeds the average WPP TSR for a Relevant Base Period by an amount which, expressed as a percentage, is greater than the percentage by which the average FT-SE 100 TSR for the same Relevant End Period exceeds the average FT-SE 100 TSR for the same Relevant Base Period; and that the same shall have been computed by the Company and communicated to the Participant. The Company shall be obliged to perform the calculation and communicate the result to the Participant not later than the fifth working day following the end of the calendar month in which the last weekday of the Relevant End Period falls. For the purposes of the paragraph above: (a) a Relevant Base Period is any period of 60 weekdays of which the last is the day 3 years prior to the last weekday of the Relevant End Period (or, if that day is not a weekday, the last preceding weekday) and is not earlier than the last weekday before the Grant Date (weekdays in this Schedule being Monday to Friday inclusive, including bank holidays); (b) a Relevant End Period is any period of 60 weekdays; (c) FT-SE 100 TSR on any day means the total shareholder return figure for the index FT-SE 100 companies (currently known as the index of "total return") published in the Financial Times in respect of that day; (d) WPP TSR on any day means the total shareholder return figure for the Company calculated on the same basis as total shareholder return is calculated for the purposes of FT-SE 100 TSR. AND (ii) Looking at two associated financial years of the Company of which the later one is the third financial year after the earlier one, the earnings per Share of the Company for the later one must have exceeded its earnings per share for the earlier one by an amount which, when expressed as a fraction of the last mentioned earnings per share, is not less than ((R2-R1)/Rl) + 0.06, where R1 is the retail prices index for the last month in the earlier year and R2 is the retail prices index for the last month in the later year. For the purposes of the paragraph above (a) the earnings per share of the Company shall be taken to be its headline earnings per Share, as calculated in accordance with the principles set out in Statement of Investment Practice No.1 "The Definition of IIMR Headline Earnings" issued by The Institute of Investment Management and Research, or shall be calculated on such basis as shall have been determined by the Board before the grant of the Option; 11 (b) two financial years of the Company are associated if the earlier one is not earlier than the financial year of the Company last preceding the Grant Date and the later one is not later than the financial year of the Company last preceding the date on which the Option is exercised; (c) "financial year" has the same meaning as in section 742 of the Companies Act 1985; (d) the retail prices index is the general index of retail prices (for all items) published by the Central Statistical Office of the Chancellor of the Exchequer or, if that index is not published for the month in question, any substituted index or index figures published by that Office. 2. The Board may make such adjustments to the method of calculating WPP TSR, FT-SE 100 TSR, earnings per share or any other feature of the above condition as it considers appropriate to take account of any increase or variation of the share capital of the Company, any change to the calculation of FT-SE 100 TSR or to earnings per share or any other factors considered by the Board to be relevant. 12 APPENDIX 1 This Appendix constitutes the Inland Revenue approved part of the WPP Executive Stock Option Plan ("the Approved Part"). The terms of the Approved Part are identical to those of the other part of the said scheme to which this Approved Part is appended except as follows. 1. In the definition of "Subsidiary" in Rule 1(1), add to the end words "and is under the control of the Company within the meaning of Section 840 of the Taxes Act 1988". 2. In Rule 2(3), add to the end the words "nor when he is not eligible to participate in the Plan by virtue of paragraph 8 of Schedule 9". 2A. Only Share Options, and not ADS Options, shall be granted under the Approved Part. 3. In Rule 3(1), after the word "Company", add the words "which satisfy the requirements of paragraphs 10 - 14 of Schedule 9". 4. In Rule 3(2), after the words "general meeting", add the words ", the date on which the Approved Part is approved by the Inland Revenue under Schedule 9". 5. In Rule 3(3)(a), add at the end the words "(or such other dealing day or days as may be agreed with the Inland Revenue)". 6. In Rule 3(3)(b), delete the words "reasonably determined by the Board" and substitute the words "agreed in advance for the purposes of the Plan with the Shares Valuation Division of the Inland Revenue, on the Grant Date (or such other day as may be agreed with the Inland Revenue)". 7. Add the following as Rule 4(3A): "No person shall be granted Options under the Approved Part which would, at the time they are granted. cause the aggregate market value of the Shares which he may acquire in pursuance of Options granted to him under the Approved Part or under any other share option scheme, not being a savings related share option scheme, approved under Schedule 9 and established by the Company or by any associated company of the Company (and not exercised) to exceed or further exceed (pound)30,000". 8. In Rule 5(5), delete the words "or 42 months after the Grant Date" and substitute the words ",42 months after the Grant Date or 42 months after the last date prior to his so ceasing on which he exercised an option (not being one granted under a savings related share option scheme) in circumstances in which paragraphs (a) and (b) of Section 185(3) of the Taxes Act 1988 applied". 8A. Add the following after Rule 5(5)(b) as Rule 5(5)(bb): "if he so ceases by reason of redundancy (within the meaning of the Employment Rights Act 1996) the Option may not be exercised at all following such cessation". 8B. In Rule 5(5)(c), delete the words "(including without limitation by reason of redundancy (within the meaning of the Employment Rights Act 1996))". 13 8C. In Rule 5(6A) delete the words "after 1st September 1999 (other than under the Approved Part" and replace those words with "18th May, 2000" 9. Add the following as Rule 5(7A): "A Participant shall not be eligible to exercise an Option under the Plan at any time when he is not eligible to participate in the Plan by virtue of paragraph 8 of Schedule 9". 9A. Rule 5(8A) shall not apply. 10. Add the following as Rules 6(5) and (6): "(5) (a) If any company ("the acquiring company"): obtains control of the Company as a result of making - (i) a general offer to acquire the whole of the issued ordinary share capital of the Company which is made on a condition such that if it is satisfied the person making the offer will have control of the Company, or (ii) a general offer to acquire all the Shares in the Company which are of the same class as the Shares which may be acquired by the exercise of Options granted under the Plan, or (b) obtains control of the Company in pursuance of a compromise or arrangement sanctioned by the court under section 425 of the Companies Act 1985 or Article 418 of the Companies (Northern Ireland) Order 1986, or (c) becomes bound or entitled to acquire Shares in the Company under sections 428 to 430F of that Act or Articles 421 to 423 of that Order, any Participant may at any time within the appropriate period (which expression shall be construed in accordance with paragraph 15(2) of Schedule 9), by agreement with the acquiring company, release any Option granted under the Plan which has not lapsed ("the old option") in consideration of the grant to him of an option ("the new option") which (for the purposes of that paragraph) is equivalent to the old option but relates to shares in a different company (whether the acquiring company itself or some other company falling within paragraph 10(b) or (c) of Schedule 9). (6) The new option shall not be regarded for the purposes of sub-rule (5) above as equivalent to the old option unless the conditions set out in paragraph 15(3) of Schedule 9 are satisfied, but so that the provisions of the Plan shall for this purpose be construed as if: (i) the new option were an option granted under the Plan at the same time as the old option; (ii) except for the purposes of the definitions of "Group Member", "Participating Company" and "Subsidiary" in Rule 1(1) above and the reference to "the Board" in Rule 5(7) above, the expression 14 "the Company" were defined as "a company whose shares may be acquired by the exercise of options granted under the Plan"; (iii) the relevant condition referred to in Rule 5(3) above had been satisfied; and (iv) Rule 8(2) below were omitted." 11. At the start of Rule 7(1), add the words "Subject to sub-rule (2A) below". 12. In Rule 7(1), delete the words "increase or." 13. Add the following as Rule 7(2A): "At a time when the Plan is approved by the Inland Revenue under Schedule 9, no adjustment under sub-rule (2) above shall be made without the prior approval of the Inland Revenue." 14. In Rule 8(1) delete the words "sub-rule (2)" and substitute the words "sub-rules (2), (2A) and (2B)". 15. At the end of Rule 8(1), add the words "(having regard to the fact that, if an alteration or addition which does not solely relate to a special term is made at a time when the Plan is approved by the Inland Revenue under Schedule 9, the approval will not thereafter have effect unless the Inland Revenue have approved the alteration or addition)". 16. Add the following as Rule 8(2A) and (2B): "(2A) No alteration or addition to the disadvantage of any Participant, other than to a special term, shall be made under sub-rule (1) above unless: (a) the Board shall have invited every relevant Participant to give an indication as to whether or not he approves the alteration or addition, and (b) the alteration or addition is approved by a majority of those Participants who have given such an indication. (2B) No alteration or addition which solely relates to a special term subject to which an Option has been granted shall be under sub-rule (1) above unless: (a) there shall have occurred an event which shall have caused the Board reasonably to consider that the special term would not, without the alteration or addition, achieve its original purpose, and (b) the Board shall act fairly and reasonably in making the alteration or addition." 17. At the end of Rule 8(3), add the words "and if the Plan is then approved by the Inland Revenue under Schedule 9, to the Inland Revenue." 15 18. Add as Rule 8(4): "Any reference in this Rule to a special term is a reference to a term specified by the Board as mentioned in Rule 3(1) above or a term of the Schedule hereto". 19. Delete Rule 9(6). 16 APPENDIX 2 Special Rules Applicable to Grants of Incentive Stock Options 1. Options granted in accordance with the Plan (either including or excluding Appendix 1 thereto) may be designated as "Incentive Stock Options" ("ISOs") within the meaning of section 422 of the United States Internal Revenue Code of 1986, as amended (the "U.S. Tax Code"). 2. The aggregate number of Shares (including Shares comprised in any WPP ADS) for which ISOs may be granted under Appendix 2 shall not exceed 73,811,500. 3. The class of persons who may receive ISOs shall, in addition to the limitations imposed by Rule 2 of the Plan, be limited to those persons who are employees of the Company or its "parent" or "subsidiary" corporations within the meaning of sections 424(f) and (g), respectively, of the U.S. Tax Code. 4. In addition to any other restrictions contained in the Plan, ISOs shall not be transferable otherwise than by will or the laws of descent and distribution. During the lifetime of the person to whom an ISO is granted, the ISO shall be exercisable only by such person. 5. To the extent that the aggregate market value of Shares (including Shares comprised in any WPP ADS) with respect to which ISOs are exercisable (determined without regard to this sentence) for the first time by a Participant during any calendar year (under all plans or schemes of the Company or its "parent" and "subsidiary" corporations within the meaning of sections 424(f) and (g), respectively, of the U.S. Tax Code) exceeds US $100,000, such Options shall to the extent of such excess be treated as Options which are not ISOs. For the purposes of the preceding sentence, the market value of any Shares (including Shares comprised in any WPP ADS) subject to an ISO shall be determined at the time such ISO is granted. 6. This schedule shall be deemed to be included within the Plan as adopted by shareholders for the purpose of any ISO grants. 17 APPENDIX 3 India The Plan will apply to options granted to residents in India with the following modifications: 1. Notwithstanding any other provision of the Plan, a person is eligible to be granted an option under this Appendix if (and only if) he is a full-time director or qualifying employee (as defined in Rule 2(2)) of a Participating Company (whether or not the Company itself) resident in India. 2. Notwithstanding any other provision of the Plan, the exercise of an option will only take effect on the date on which the shares acquired by virtue of that exercise are sold by the Participant. 3. Notwithstanding any other provision of the Plan, an option granted to a Participant under this Appendix shall not be capable of being transferred by that Participant except as provided in Rule 5(4) (in the event of a Participant's death). 4. Notwithstanding any other provision of the Plan: (a) any exercise of an option by a Participant is only effective if, and to the extent that, the net proceeds (that is, after taking account of dealing costs and any interest on the money, if any, lent to the Participant to facilitate the exercise of the option) from the immediate sale of the shares acquired by the exercise of that option would be not less than the price at which the Participant is able to acquire the shares by virtue of that option; (b) in the event that the net proceeds from the sale of shares acquired by the exercise of an option by a Participant on the day of acquisition of such shares would be less than the price at which the Participant may acquire the shares by virtue of that option, with the result that there would be a shortfall between the acquisition price and the net proceeds of such sale, any purported exercise of the option will not take effect. 5. Further to 4 above, and notwithstanding any other provision of the Plan, neither the Company nor any Participating Companies make any representation or guarantee as to whether an intended exercise of an option by a Participant on any given day will be effective, and neither the Company nor any Participating Company shall be considered to be or held accountable or liable in any way for the inability of a Participant to exercise his option as a consequence of the restrictions on exercise set out in 4 above. 6. The exercise of an option granted under this Appendix shall be effected in the following manner: (a) The exercise shall be deemed to take effect, if at all, 3 working days after the receipt by the Company of the Participant's notice of his intention to exercise it. (b) Assuming that the Company is able to establish that the condition referred to in paragraph 4(a) above is met, a third party selected by the Company will lend the option exercise price to the Participant by way of transferring the sum directly to the Company. 18 (c) The Company will then issue the shares to a nominee for the Participant, which nominee will be a company controlled by a firm of stockbrokers nominated by the Company. (d) The nominee will sell the shares in question on the Participant's behalf. (e) The nominee will receive the sale price and deduct from this dealing costs and the interest, if any referred to in paragraph 4(a) above. (f) As soon as practicable the remaining balance will be converted into Indian Rupees at the best rate reasonably obtainable on the foreign exchange markets and the resulting sum (net of costs of conversion) remitted to the Participant. 6. The Plan shall be administered by the Board or a committee appointed by it and any determination by it shall be final for the purposes of the Plan's administration in respect of employees of a Participating Company (whether or not the Company itself) resident in India. 19 APPENDIX 4 Belgium The Plan will apply to Options granted to residents of Belgium after 1 January 1999 with the following modifications. 1. In Rule 3(4), a further sub-rule (c) shall be added as follows: "(c) shall be cancelled if he notifies the Company that he refuses to accept the Option within 60 days of the date of the Company's communication to him in respect of the Option." 2. In Rule 5(2), delete the words: "the third anniversary of the Grant Date" and substitute the words "the 1 January following the third anniversary of the Grant Date." 3. In Rule 5(4), delete the words: "within 12 months after the date of his death." and substitute the words "in the later of the period of 12 months commencing with the date of his death or the period of 6 months commencing on 1 January following the third anniversary of the Grant Date." 4. In Rule 5(5), delete the words: "and in this sub-rule the exercise period is the period which shall expire 12 months after his so ceasing on 42 months after the Grant Date, whichever shall be the latest" and substitute the words "and in this sub-rule the exercise period is the period which shall commence on the 1 January following the third anniversary of the Grant Date (the "Third Anniversary") and expire 12 months after his so ceasing or 6 months after the Third Anniversary, whichever shall be the latest." 20 APPENDIX 5 Netherlands The Plan will apply to Options granted to residents of the Netherlands with the following alterations: 1. Rule 5(7) shall be deleted and replaced by the following in substitution:- "(7) Notwithstanding any other provision of the Plan, an Option granted under the Plan may not be exercised after the expiration of 4 years (or such shorter period as the Board may have determined before the grant thereof) beginning with the Grant Date." 2. Rule 10 shall be amended by the insertion of the following sub-rule: "(5) Without prejudice to sub-rules (1) to (4) above, each Option is granted subject to the condition that, upon such Option becoming exercisable in accordance with the Rules of the Plan, the Participant will pay or procure the payment to the Group Member which is his employer or otherwise provide for (in a manner satisfactory to that Group Member or, if appropriate, the trustees of any employee benefit trust), an amount equal to Taxation which any Group Member or the trustees of any employee benefit trust may be required to withhold on the Participant's behalf by reason of that Option becoming exercisable. No Option in the Netherlands may be exercised, unless the Participant has complied with his obligations under this Rule 10(5)." 21 APPENDIX 6 Switzerland The Plan will apply to Options granted to the residents of Switzerland on or after 1 January 2002 with the modification that in Rule 5(7) the words "and six months" be inserted after the words "10 years". EX-5.1 4 wpp_exh51-31803.txt WPP GROUP PLC FORM S-8 Exhibit 5.1 ---------- Calow & Co. Solicitors Robin Hill, 15 Beech Road Reigate, Surrey RH2 9LS March 18, 2003 WPP Group plc 27 Farm Street London W1J 5RJ England Dear Sirs: In connection with the registration under the Securities Act of 1933, as amended, on Form S-8 of a maximum of 24,308,849 Ordinary Shares of 10p each (the "Ordinary Shares") in the capital of WPP Group plc (the "Company"), a public limited company incorporated in England under the Companies Acts 1948-1976, which may be issued by the Company to United States residents or issued to and deposited with the Depository of the Company's American Depository Receipts facility in respect of American Depository Shares issued to residents of countries outside the United Kingdom, in either case pursuant to the terms of the WPP Executive Stock Option Plan (the "Plan"), I have examined the Plan and the Registration Statement on Form S-8 dated March 18, 2003 (the "Registration Statement"), and have reviewed such matters of English law as I have deemed necessary for this opinion, and I advise you that in my opinion: The Company is a corporation duly organized and validly existing under the laws of England. The Ordinary Shares, when issued in accordance with the terms and provisions of the Plan, will be validly issued and fully paid and no personal liability for calls for further funds will attach to the holders thereof in their capacity as holders of such Ordinary Shares. Such Opinion assumes: 1) That the laws of England as they are today remain unchanged so far as relevant to the issue of Ordinary Shares; 2) That the directors of the Company allot and issue Ordinary Shares in respect of which options are validly exercised under the Plan in accordance with the provisions of the Company's Memorandum and Articles of Association and such laws of England as are relevant to the issue of Ordinary Shares under the Plan; 3) That there are no restrictions imposed otherwise than pursuant to current English law whether by contract, court order or otherwise or by or pursuant to any law other than English law in any case affecting the ability of the Company to issue Ordinary Shares; 4) That the Company does not become insolvent, liquidated or struck-off the register or otherwise subject to legal disability to issue shares; 5) That the Company has available at all times sufficient authorized but unissued Ordinary Shares in the capital of the Company to meet its obligations under the Plan and under any other arrangement pursuant to which third parties may call for the issue of Ordinary Shares to them. The opinion contained herein is given with respect to the laws of England only. I hereby consent to the filing of this opinion as an exhibit to the Registration Statement. I also consent to the use of my name in such Registration Statement in the form and in the context in which it appears in the Registration Statement attached to this letter. Yours faithfully, /s/ D. F. Calow ------------------ D. F. Calow Calow & Co. Solicitors 2 -----END PRIVACY-ENHANCED MESSAGE-----