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Title: |
Incentive Plan |
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Date: |
2001 |
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$35 |
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ID: |
#280764 |
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INCENTIVE PLAN
Ogilvy & Mather
2001-2002 Long-Term Incentive Plan:
Participant Guide
{PAGE}
Objectives
The Long Term Incentive Plan (LTIP) is an important part of your total
compensation, so you need to fully understand how it works and its value to you.
This booklet describes the details of the Plan.
The LTIP has the following objectives:
. Incentivise our executives to achieve outstanding long-term financial
performance.
. Allow our executives to participate directly in the profitable growth of
Ogilvy.
. Reinforce the importance of the goals which are established as part of
Ogilvy's three-year strategic business plan.
. Increase our executives' ownership of WPP Group stock.
. Ensure that our executives have the opportunity to earn competitive total
compensation.
Please note:
This booklet is for eligible executives working in those companies that are
members of the Ogilvy group of companies.
{PAGE}
Overview
The Long Term Incentive Plan (LTIP) rewards executives for exceptional financial
performance against Ogilvy's three-year business plan. The plan pays rewards in
the form of cash and WPP Group restricted stock. Plan terms beginning with
capitals are defined in the glossary.
Key facts
. Three-year plan. The LTIP is a three-year rolling plan -this means each year
a new three-year plan begins. Under the LTIP- members are awarded Performance
Shares. The value of the shares is determined by the financial performance of
Ogilvy over a three-year period.
. Performance Shares. Each year, you receive a fixed number of Performance
Shares based largely on your role and past contribution. Each share has a
target value of $100. The size of your grant defines your LTIP earnings
opportunity.
. Payouts based on financial performance. For each three-year plan, LTIP
financial performance targets are set that define how the performance Shares
will be valued.
. Payouts in cash and restricted stock. Your LTIP payout is made half in cash
and half in WPP Group restricted stock which vests over the two years
following the end of the performance period (50% each year).
. If you leave Ogilvy. Generally, if you retire from Ogilvy, become disabled,
die or take another position within the WPP Group, you keep a pro-rated
portion of your LTIP Performance Shares. Otherwise, you forfeit all
Performance Shares and non-vested restricted stock if you leave Ogilvy.
LTIP: timeline
Year 1 Year 4 Year 5 Year 6
x x x x
--------------------------------------------------------------------
Performance Period
--------------------------------------------------------------------
x x
Performance LTIP Payout Date:
Shares granted
------------
Half as cash
------------
-----------------------------------------
Half as WPP Group
x 50% vest x 50% vest
resticted stock
-----------------------------------------
{PAGE}
Plan details
Rolling three-year plan
The LTIP is a rolling three-year plan. This means that Ogilvy announces a new
plan every year that pays out after the third year, providing performance
targets are met. So, starting with your fourth year at Ogilvy, you can receive
an annual payout based on performance over the prior three-year
[GRAPH APPEARS HERE]
Performance Period as shown below.
Payout Schedule
Targets based on Ogilvy profitability
For each three-year plan, Ogilvy sets targets that determine how performance
will be measured.
These targets are based on two measures:
. Ogilvy's average Operating Profit, which means revenue minus operating costs
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