OMNICOM GROUP INC.
437 Madison Avenue
New York, New York 10022
NOTICE OF 2006 ANNUAL MEETING OF SHAREHOLDERS
Meeting Date: ....... Tuesday, May 23, 2006
Time: ............... 10:00 a.m. Pacific Time
Place: .............. DDB San Francisco
555 Market Street
San Francisco, California 94105
Subject: ............ Election of directors
Ratification of the appointment of KPMG LLP as
our independent auditors for the 2006 fiscal year
Record Date: ........ April 7, 2006
Shareholders will also transact any other business that is properly
presented at the meeting. At this time, we know of no other matters that will be
presented.
The Board recommends that shareholders vote FOR the election of the
directors and the ratification of the appointment of KPMG LLP.
Please sign and return your proxy card in the enclosed envelope, or vote
by telephone or Internet (instructions are on your proxy card), so that your
shares will be represented whether or not you plan to attend the 2006 Annual
Meeting.
MICHAEL J. O'BRIEN
Secretary
New York, New York
April 26, 2006
CONTENTS
Page
CORPORATE GOVERNANCE ...................................................... 1
Board Composition; Shareholder Communications; Stock
Ownership Guidelines ................................................. 1
Board Operations ....................................................... 2
Director Attendance .................................................... 4
Director Compensation .................................................. 4
Ethical Business Conduct ............................................... 5
EXECUTIVE COMPENSATION .................................................... 5
Summary Compensation Table ............................................. 5
Stock Options .......................................................... 7
Compensation Committee Report on Executive Compensation ................ 8
Salary Continuation Agreements ......................................... 11
EQUITY COMPENSATION PLANS ................................................. 11
PERFORMANCE GRAPH ......................................................... 12
STOCK OWNERSHIP ........................................................... 13
EXECUTIVE OFFICERS ........................................................ 14
AUDIT RELATED MATTERS ..................................................... 15
Fees Paid to Independent Auditors ...................................... 15
Audit Committee Report ................................................. 15
ITEMS TO BE VOTED ON ...................................................... 17
Item 1 - Election of Directors ......................................... 17
Item 2 - Ratification of the Appointment of Independent Auditors ....... 19
INFORMATION ABOUT VOTING AND THE MEETING .................................. 19
Quorum; Required Vote; Effect of an Abstention and Broker Non-Votes .... 19
Voting ................................................................. 20
Voting by Street Name Holders .......................................... 20
Default Voting ......................................................... 20
Right to Revoke ........................................................ 20
Tabulation of Votes .................................................... 20
ADDITIONAL INFORMATION .................................................... 21
Section 16(a) Beneficial Ownership Reporting Compliance ................ 21
Expense of Solicitation ................................................ 21
Incorporation by Reference ............................................. 21
Availability of Certain Documents ...................................... 21
Delivery of Documents to Shareholders Sharing an Address ............... 21
SHAREHOLDER PROPOSALS FOR THE 2007 ANNUAL MEETING ......................... 22
OMNICOM GROUP INC.
437 Madison Avenue
New York, New York 10022
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PROXY STATEMENT
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The Board of Directors of Omnicom Group Inc., a New York corporation
("Omnicom", "we", "us" or "our"), is using this Proxy Statement to solicit
proxies for our 2006 Annual Meeting of Shareholders on Tuesday, May 23, 2006, at
10:00 a.m. Pacific Time, at DDB San Francisco, 555 Market Street, San Francisco,
California 94105 and at any adjournments or postponements of the Annual Meeting.
This Proxy Statement and the accompanying proxy card are being mailed on or
about April 26, 2006.
Holders of our common stock, par value $0.15 per share, as of the close of
business on April 7, 2006, will be entitled to vote their shares at the 2006
Annual Meeting. On that date, there were 170,561,209 shares of our common stock
outstanding, each of which is entitled to one vote for each matter to be voted
on at the Annual Meeting.
You can vote your shares:
o by returning the enclosed proxy card;
o through the Internet at the website shown on the proxy card;
o by telephone using the toll-free number shown on the proxy card; or
o in person at the 2006 Annual Meeting.
Votes submitted through the Internet or by telephone must be received by
11:59 p.m. Eastern Time on Thursday, May 18, 2006, for shares held in our
employee retirement savings plan and/or our employee stock purchase plan, and by
11:59 p.m. Eastern Time on Monday, May 22, 2006, for all other shares. Internet
and telephone voting are available 24 hours a day and, if you use one of these
methods, you do not need to return a proxy card. If you attend the meeting and
vote in person, your vote will supersede any earlier voting instructions.
You may be asked to present valid photo identification, such as a driver's
license or passport, before being admitted to the 2006 Annual Meeting. Cameras
(including cellular phones with photographic capabilities), recording devices
and other electronic devices will not be permitted at the 2006 Annual Meeting.
If you hold shares in "street name" (that is, through a bank, broker or
other nominee) and would like to attend the 2006 Annual Meeting, you will need
to bring an account statement or other acceptable evidence of ownership of our
common stock on April 7, 2006, the record date for voting. Alternatively, in
order to vote, you may obtain a proxy from your bank, broker or other nominee
and bring the proxy to the 2006 Annual Meeting.
Additional information about the meeting is included below in this Proxy
Statement in the section entitled "Information About Voting and the Meeting".
CORPORATE GOVERNANCE
Board Composition; Shareholder Communications; Stock Ownership Guidelines
Our Board currently consists of 11 directors: nine independent or outside
directors, our Chairman of the Board (Bruce Crawford) and our CEO and President
(John Wren). Each director stands for election annually. Biographical
information and information about the committees on which our directors serve is
included below in this Proxy Statement in the section entitled "Items To Be
Voted On: Item 1 - Election of Directors".
Our Board has determined that all of our outside directors are
"independent" within the meaning of the rules of the New York Stock Exchange,
Inc. ("NYSE"), as well as under our Corporate Governance Guidelines. In
determining that each of our outside directors is independent, the Board
considered that, although
infrequently, Omnicom and its subsidiaries sometimes, in the ordinary course of
business, sell products and services to, and/or purchase products and services
from, entities (including charitable foundations) with which certain directors
are affiliated. The Board determined that these transactions were not otherwise
material to the entity or Omnicom and that none of our directors had a material
interest in the transactions with these entities. The Board therefore determined
that none of these relationships impaired the independence of any outside
director.
As a matter of policy, the independent directors regularly meet by
themselves, without management present, in executive session, and met five times
in 2005. Mr. Purcell, the Chairman of our Governance Committee, presided at
these executive sessions.
Interested parties, including shareholders, may communicate (if they wish,
on a confidential, anonymous basis) directly with the independent directors as a
group, with the Board as a whole or with any individual director by writing to
our corporate secretary at the address above. Communications that are intended
specifically for the independent directors or any individual director (including
the presiding director of the executive sessions of our independent directors)
should clearly state that the independent directors or the individual director
is the intended recipient of such communication and such communications should
be marked "Confidential".
The Board encourages stock ownership by directors and senior managers. As
described below, on average approximately one-half of the directors' annual
compensation is paid in common stock and directors are permitted to elect to
receive all or a portion of their cash director compensation in common stock.
Information about stock ownership by our directors and executive officers is
included below in this Proxy Statement in the section entitled "Stock
Ownership". The Board adopted stock ownership guidelines for our directors in
2004. The director guidelines provide, in general, that our directors must own
Omnicom stock equal to or greater than five times their annual cash retainer
within five years of adoption of the guidelines or within five years of their
joining the Board, whichever is later.
Board Operations
Our Board met eight times during 2005. The Board's policy is generally to
conduct specific oversight tasks through committees, with the objective of
freeing the Board as a whole to focus on strategic matters as well as particular
tasks that by law or custom require the attention of the full Board. Our Board
has established five standing committees, functioning in the following areas:
o audit and financial reporting
o management/compensation
o corporate governance
o finance and acquisitions/divestitures
o qualified legal compliance
Each of the committees operates under a written charter recommended by the
Governance Committee and approved by the Board and the Board operates pursuant
to our Corporate Governance Guidelines. Each Board committee is authorized to
retain its own outside advisors. Our Corporate Governance Guidelines and
committee charters are posted on our website at http://www.omnicomgroup.com.
Audit Committee: The Audit Committee's purpose is to assist the Board in
carrying out its oversight responsibilities relating to financial reporting. In
this regard, the Audit Committee assists Board oversight of (a) the integrity of
our financial statements, (b) compliance with legal and regulatory requirements,
(c) the qualifications and independence of our independent auditors, and (d) the
performance of our internal audit function and independent auditors.
Furthermore, the Audit Committee prepares the report included below in the
section entitled "Audit Related Matters: Audit Committee Report". Among other
responsibilities, the Audit Committee has the power to retain or dismiss, and to
approve the compensation of, our independent auditors.
The members of our Audit Committee are Messrs. Murphy (Committee Chair),
Clark, Cook and Henning. The Board has determined that each member of our Audit
Committee is "independent" within the meaning of the rules of both the NYSE and
the Securities and Exchange Commission ("SEC"). The Board has also
2
determined that each member of our Audit Committee is an "audit committee
financial expert" within the meaning of the rules of the SEC, and is
"financially literate" and has "accounting or related financial management
expertise", as such qualifications are defined under the rules of the NYSE.
The Audit Committee met 13 times last year.
Compensation Committee: The Compensation Committee's purpose is to assist
the Board in carrying out its oversight responsibilities relating to
compensation matters, to prepare a report on executive compensation for
inclusion in our annual Proxy Statement and to serve as the Board committee
authorized to administer and approve awards under our equity and other
compensation plans.
The members of our Compensation Committee are Messrs. Roubos (Committee
Chair) and Coleman and Ms. Denison and Ms. Rice. The Board has determined that
each member of our Compensation Committee is "independent" within the meaning of
the rules of the NYSE.
The Compensation Committee met six times last year.
The report of the Compensation Committee is included below in this Proxy
Statement in the section entitled "Executive Compensation: Compensation
Committee Report on Executive Compensation".
Governance Committee: The Governance Committee's purpose is to assist the
Board in carrying out its oversight responsibilities relating to the composition
of the Board and certain corporate governance matters. As part of its
responsibilities, the committee considers and makes recommendations to the full
Board with respect to the following matters:
o nominees for election to the Board and committees it establishes
from time to time and criteria therefor;
o the functions of the Board committees;
o standards and procedures for review of the Board's performance;
o Omnicom's corporate governance policies generally, including with
respect to director qualification standards, responsibilities,
access to management and independent advisors, compensation,
orientation and education, and performance evaluation;
o management succession;
o the Code of Conduct applicable to our directors, officers and
employees; and
o the Governance Committee's performance of its own responsibilities.
The members of our Governance Committee are Messrs. Purcell (Committee
Chair), Clark, Coleman and Murphy, and Ms. Denison and Ms. Rice. The Board has
determined that each member of our Governance Committee is "independent" within
the meaning of the rules of the NYSE.
The Governance Committee met five times last year.
Nominations for directors may be made only by the Board or a Board
committee, or by a shareholder entitled to vote who delivers notice along with
the additional information and materials required by our by-laws to our
corporate secretary not later than 60 days prior to the date set for the annual
meeting. You can obtain a copy of the full text of the by-law provision noted
above by writing to our corporate secretary at our address on the cover of this
Proxy Statement. Our by-laws have also been filed with the SEC.
The Governance Committee will consider all candidates recommended by our
shareholders in accordance with the procedures included in our by-laws and this
Proxy Statement. We did not receive any recommended nominees from shareholders
this year. Any future director candidates recommended by shareholders that are
properly submitted will be considered in the same manner in which the Governance
Committee evaluates nominees submitted by the Board or Governance Committee.
3
Our Board seeks to assure that it is composed of individuals with
substantial experience and judgment from diverse backgrounds but, except for the
requirement that a substantial majority be independent, non-management
directors, we do not have rigid director qualification requirements. However,
our Governance Committee will consider the following qualifications and skills
of director nominees:
o their independence;
o their background and experience in relation to other members of the
Board; and
o their commitment to the time required to discharge their duties.
The Governance Committee reviews the composition of the Board at least
annually and recommends to the full Board nominees for election. The Governance
Committee identifies the skills and experience needed to replace any departing
director and may perform research to identify director candidates. The
Governance Committee has the power to engage third parties to assist in
identifying and evaluating potential nominees.
Finance Committee: The Finance Committee's purpose is to assist the Board
in carrying out its oversight responsibilities relating to financial matters
affecting Omnicom, including in respect of acquisitions, divestitures and
financings.
The members of our Finance Committee are Messrs. Crawford (Committee
Chair), Purcell and Roubos.
The Finance Committee met eight times last year.
Qualified Legal Compliance Committee: Our Qualified Legal Compliance
Committee ("QLCC") is comprised of the current members of our Audit Committee.
As contemplated by SEC rules on corporate governance, the purpose of the QLCC is
to receive, investigate and recommend responses to reports made by attorneys
employed or retained by Omnicom or one of its subsidiaries of evidence of a
material violation of U.S. federal or state securities law, a material breach of
fiduciary duty arising under U.S. federal or state law or a similar material
violation of any U.S. federal or state law. The QLCC only meets when necessary
and met once to adopt its charter in 2005.
Director Attendance
Attendance at Board and committee meetings during 2005 averaged 99% for
the directors as a group. Each of our directors attended at least 91% of the
meetings of the Board and the committees of the Board on which he or she served
during 2005. In 2005, all of our directors attended the Annual Meeting.
Director Compensation
Directors who are not current or former employees of Omnicom or its
subsidiaries are paid:
o an annual retainer of $60,000;
o $2,000 for attendance at a Board or committee meeting in person,
$1,000 for participation by telephone or video conference at any
regularly scheduled meeting and $2,000 for participation by
telephone or video conference at any special meeting; and
o in accordance with our Director Equity Plan approved by shareholders
at our 2004 Annual Meeting, common stock each quarter equal in value
at the time of award to $17,500.
The Chair of our Audit Committee receives an additional fee of $10,000
each year. We do not have a retirement plan for directors.
Our Director Equity Plan provides that each director may elect to receive
all or a portion of his or her cash director compensation for the following
year's service in common stock. Directors may also elect to defer any common
shares payable to them, which will be credited to a bookkeeping account in the
directors' names. These elections generally must be made prior to the start of
the calendar year for which the fees would be payable. The number of shares of
common stock delivered or credited to a director's account will be based on the
fair market value of our common stock on the first trading day immediately
preceding the date the fees would have been paid to the director.
Directors who are also employees of Omnicom receive no compensation for
serving as directors.
4
Ethical Business Conduct
We have a Code of Conduct in place designed to assure that our business is
carried out in an honest and ethical way. The Code of Conduct requires that our
employees avoid conflicts of interest, comply with all laws and other legal
requirements and otherwise act with integrity. In addition, we have adopted a
Code of Ethics for Senior Financial Officers regarding ethical action and
integrity relating to financial matters applicable to our senior financial
officers. Our Code of Conduct and Code of Ethics for Senior Financial Officers
are available on our website at http://www.omnicomgroup.com, and are also
available in print to any shareholder that requests them. We will disclose any
future amendments to, or waivers from, certain provisions of these ethical
policies and standards for senior financial officers, executive officers and
directors on our website within the time period required by the SEC and the
NYSE.
We also have procedures to receive, retain and treat complaints received
regarding accounting, internal accounting controls or auditing matters and to
allow for the confidential and anonymous submission by employees of concerns
regarding questionable accounting or auditing matters, as well as possible
violations of our Code of Conduct or Code of Ethics for Senior Financial
Officers. The procedures are posted on our website and the websites of our
various global networks.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table summarizes the total compensation for each of the last
three years (unless otherwise indicated) for the Chief Executive Officer and for
each of our four most highly compensated executive officers during 2005. These
five persons are referred to collectively as the "named executive officers" in
this Proxy Statement.
Long-Term
Annual Compensation Compensation Awards(1)
------------------------------------------------ --------------------------
Name and Other Restricted All Other
Principal Annual Stock Compensation
Position Year Salary Bonus(2) Compensation(3) Awards(4) (5)
----------- ---- ---------- ---------- --------------- ---------- ------------
John D. Wren 2005 $1,000,000 $4,400,000 $ 199,413 -- $ 15,103
President and Chief 2004 1,000,000 4,000,000 193,159 -- 14,594
Executive Officer of 2003 1,000,000 1,100,000 -- -- 10,117
Omnicom
Thomas L. Harrison 2005 $ 900,000 $1,500,000 -- -- $100,377
Chairman and Chief 2004 900,000 1,750,000 -- $ 380,500 61,753
Executive Officer of 2003 881,000 750,000 -- -- 51,087
Diversified Agency
Services
Kenneth R. Kaess, Jr.(6) 2005 $ 825,000 $2,400,000 -- -- $ 21,014
Former President and 2004 825,000 1,875,000 -- -- 18,359
Chief Executive 2003 806,000 525,000 -- $ 305,980 9,774
Officer of DDB
Worldwide
Andrew Robertson 2005 $ 900,000 $2,500,000 $ 95,433 -- $ 22,161
President and Chief 2004 900,000 1,850,000 67,418 -- 17,432
Executive Officer of
BBDO Worldwide(7)
Randall Weisenburger 2005 $ 975,000 $3,900,000 $ 147,293 -- $ 13,345
Executive Vice 2004 975,000 3,500,000 -- -- 12,300
President and Chief 2003 975,000 350,000 -- $1,147,425 8,000
Financial Officer of
Omnicom
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(1) There have been no stock options granted and no payouts to any of our
named executive officers pursuant to a long-term incentive plan as defined
in Item 402(a)(7)(iii) of Regulation S-K in any of our last three
completed fiscal years.
(2) The named executive officers elected to receive reduced cash bonuses for
2003, even though they had satisfied the performance criteria established
by the Compensation Committee.
5
(3) The amounts in this column include perquisites and other personal benefits
where the total incremental cost of all perquisites and other personal
benefits exceeds $50,000 per year. Where no amount is shown, the value of
the perquisites or personal benefits provided was less than the minimum
amount required to be reported. Perquisites and other personal benefits
are valued on the basis of the aggregate incremental cost to Omnicom and
its subsidiaries.
For Mr. Wren and Mr. Weisenburger, the 2005 totals include $186,293 and
$136,073, respectively, for personal use of aircraft hours, which reflect
the incremental cost to Omnicom after taking into account amounts Mr. Wren
and Mr. Weisenburger reimbursed to Omnicom using the Standard Industrial
Fare Level (SIFL) tables prescribed under IRS regulations. Prior to 2004,
Omnicom calculated the cost of the personal use using the SIFL tables.
Both Mr. Wren and Mr. Weisenburger have reimbursed and continue to
reimburse Omnicom for the entire SIFL amount promptly after incurring the
cost of a flight. For Mr. Robertson, the 2005 total includes $44,076 in
moving expenses and $25,535 in auto lease payments.
(4) The value shown above represents the pre-tax value of the restricted
shares based on the reported closing price of our common shares on the
date of the award. One-fifth of the restricted shares granted vest on each
of the first five anniversaries of the grant. Dividends will be payable on
the shares to the extent paid on Omnicom's common stock generally,
regardless of whether the shares are vested or unvested at the time. The
total number and value of restricted shares owned by the named executive
officers on December 31, 2005 based on the closing sales price ($85.13)
were as follows:
o Mr. Harrison held 6,800 restricted shares with a pre-tax value of
$578,884.
o Mr. Kaess held 3,200 restricted shares with a pre-tax value of
$272,416.
o Mr. Robertson held 13,200 restricted shares with a pre-tax value of
$1,123,716.
o Mr. Weisenburger held 15,320 restricted shares with a pre-tax value
of $1,304,192.
(5) All other compensation consists of each of the following:
o Employer contributions to one or more retirement savings plans in
the amount of $12,600 on behalf of each of Messrs. Wren,
Weisenburger and Harrison, $21,000 on behalf of Mr. Robertson and
$18,900 on behalf of Mr. Kaess.
o Employer premium payments for life insurance in the amount of $2,503
for Mr. Wren, $6,622 for Mr. Harrison, $2,114 for Mr. Kaess, $1,161
for Mr. Robertson and $745 for Mr. Weisenburger.
o Employer premium payments for medical and dental insurance in the
amount of $49,870 and disability insurance in the amount of $31,286
for Mr. Harrison.
(6) Deceased March 27, 2006.
(7) Mr. Robertson was not an executive officer prior to 2004.
6
Stock Options
Option Grants in Last Fiscal Year: No stock options were granted to the
named executive officers in 2005.
Aggregated Option Exercises Last Year and Fiscal Year-End Option Values:
The following table provides information about option exercises by the named
executive officers in 2005, and the value of their unexercised options at the
end of 2005. The value realized was calculated by subtracting the exercise price
from the fair market value of our common stock on the exercise date. The value
of unexercised in-the-money options at December 31, 2005 was calculated by
subtracting the exercise price of in-the-money options from the closing sales
price ($85.13) of our common stock at year end.
Number of Shares
Underlying Value of Unexercised
Unexercised In-the-Money
Number Options at Options at
of Shares December 31, 2005 December 31, 2005
Acquired on Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercisable
---- ----------- -------- ----------------- ---------------------
John D. Wren (1) ................ 140,000 $9,999,150 2,650,000/1,500,000 $44,505,415/$8,445,000
Thomas L. Harrison (1) .......... -- -- 583,333/166,667 $5,397,888/$3,796,674
Kenneth R. Kaess, Jr. (1) ....... -- -- 135,556/166,667 $1,182,091/$3,796,674
Andrew Robertson (1) ............ -- -- 73,333/166,667 $792,526/$3,796,674
Randall Weisenburger (1)(2) ..... -- -- 1,179,999/620,001 $18,664,427/$15,876,823
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(1) Each of the named executive officers has stock options granted under the
2001 Long-Term Shareholder Value Plan (the "2001 Plan"), some of which are
unexercisable. In general, unexercised options granted under the 2001 Plan
are cancelled on termination of employment, except that otherwise
exercisable options may be exercised within five business days of such
termination. In certain limited circumstances, including the retirement,
involuntary termination, death or total disability of the executive, those
options would become exercisable in full and remain exercisable for the
balance of their term. In order to be eligible for acceleration upon
retirement, an executive must have reached a certain age and have devoted
a certain number of years of service to Omnicom or one of its
subsidiaries. Currently, Mr. Harrison and Mr. Wren could qualify for
acceleration upon retirement with respect to their grants under the 2001
Plan. If there is a change of control of Omnicom, all outstanding options
will become exercisable at the effective time of the transaction and
remain exercisable for the balance of their term. Those stock options
granted to Mr. Kaess under the 2001 Plan accelerated following his death.
For these purposes, a change of control means, with certain exceptions,
(a) the acquisition, directly or indirectly, of Omnicom stock such that
the acquirer has more than 20% of the outstanding securities entitled to
vote for a majority of the members of the Board or otherwise has the
ability to elect a majority of the Board; (b) a change in the composition
of the Board such that a majority of the members are not continuing
directors; (c) the consummation of a merger or consolidation which has
been approved by the shareholders of Omnicom, other than one in which the
voting securities of Omnicom outstanding immediately prior thereto
continues to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least 80% of
the total voting power represented by the voting securities of Omnicom or
such surviving entity; (d) the consummation of a plan of complete
dissolution or liquidation; or (e) an agreement for the sale or
disposition of all or substantially all of its assets which has been
approved by Omnicom's shareholders.
(2) Mr. Weisenburger has stock options granted under our Equity Incentive
Plan, some of which are unexercisable. In general, unexercised stock
options granted under our Equity Incentive Plan would be cancelled in the
event of termination of employment. In certain limited circumstances,
including the retirement, involuntary termination, death or total
disability of Mr. Weisenburger, those options would become exercisable in
full and remain exercisable during the 36 months following the event but
not beyond the balance of their term. Mr. Weisenburger does not currently
meet the criteria for retirement. If there is a change of control of
Omnicom, all outstanding options will become exercisable at the effective
time of the transaction and remain exercisable for the balance of their
term.
7
Compensation Committee Report on Executive Compensation
The members of the Compensation Committee are Gary L. Roubos, Committee
Chair, Leonard S. Coleman, Jr., Susan S. Denison and Linda Johnson Rice. The
Board has determined that each member of the Compensation Committee is
"independent" within the meaning of the rules of the NYSE. The Compensation
Committee has furnished the following report on executive compensation for
fiscal 2005.
Omnicom's Executive Compensation Philosophy: The fundamental objectives of
Omnicom's executive compensation policies are to enable us to attract, motivate
and retain the talented executives who are a critical component of Omnicom's
long-term success and to ensure that executives are provided incentives and
compensated in a way that advances the short and long-term interests of
shareholders. Omnicom achieves these objectives using executive compensation
structures for senior management that combine three principal elements: base
salary, performance-based cash bonuses and long-term stock-based awards. The
Compensation Committee's philosophy and goals are summarized below.
Flexibility and Competitiveness: Omnicom maintains flexibility in its mix
of awards in order to meet changing market conditions and to attract and retain
world-class senior management talent. In making compensation decisions with
respect to each of the components listed above, the Compensation Committee
considers the competitive market for executives and compensation levels provided
by companies of comparable size and complexity. The Compensation Committee
regularly reviews the compensation practices at companies with which Omnicom
competes for talent as well as companies comparable to Omnicom. Competitive
market data are derived periodically, including data from companies in the peer
group index of the Shareholder Return Performance Graph (included below in the
Section entitled "Performance Graph"). The Compensation Committee's objective is
not simply to match compensation levels within a particular range related to
levels provided by industry peers, but to use these comparisons as one factor in
determining the optimal combination of salary, short term incentives, and
long-term stock-based compensation to provide maximum performance incentives.
Performance-Based Compensation: Historically, the fixed portion of
Omnicom's compensation has been substantially less than the variable portion to
provide management incentives to achieve Omnicom's performance goals. In
addition, Omnicom frequently utilizes stock-based compensation to strengthen the
alignment of its executives' interests with those of its shareholders.
Merit-Driven Compensation: The Compensation Committee aims to provide
total compensation that reflects an accurate assessment of individual
performance, current responsibilities, leadership potential and contribution to
Omnicom achieving its objectives.
Omnicom's Executive Compensation Policies: The Compensation Committee
determines the compensation of the Chief Executive Officer and the other named
executive officers subject, in the CEO's case, to the approval of the full
Board. The Compensation Committee considers the factors described below and the
recommendations of the CEO in determining the compensation of the named
executive officers other than the CEO. The CEO determines the compensation of
executives who are not named executive officers, subject to the approval of the
Compensation Committee for stock-based incentive awards.
The Compensation Committee engages compensation consultants to assist it
generally in overseeing Omnicom's compensation programs and in determining
appropriate compensation levels and structures for executive officers. Omnicom's
policies with respect to each of the three principal elements identified above,
as well as other elements of compensation, are described below.
Base Salary: Adjustments in base salary for executive officers are
discretionary and generally are considered no more frequently than every 18
months. In determining base salary and adjustments to base salary, the
Compensation Committee considers:
o the executive's level of responsibility;
o Omnicom's profitability and the profitability of the business unit
with which the executive is associated; and
o our knowledge of executive compensation practices of other companies
of similar size, geographic reach and financial characteristics.
Omnicom's profitability is determined by reference to its earnings per share,
and profitability of a business unit is determined by reference to its operating
profit.
8
In setting salaries, the Compensation Committee considers the importance
of placing a high proportion of executives' compensation "at risk" in the form
of an incentive cash bonus as well as long-term stock-based compensation.
Incentive Cash Bonuses: The annual cash bonus typically represents a
substantial portion of the cash compensation of executive officers. The
Compensation Committee administers incentive bonuses for all executive officers.
Prior to or shortly after the beginning of the year, the Compensation
Committee identifies the executive officers who will receive cash bonuses and
their incentive levels. The committee normally establishes specific performance
goals based on business criteria. In general, performance goals are based on one
or more of the following criteria: revenue growth, operating income, net income,
earnings per share, cash flow and return on equity. In determining the extent to
which the established performance goals are met for a given period, the
Compensation Committee exercises its judgment whether to include or exclude the
impact of changes in accounting principles and extraordinary, unusual or
infrequently occurring events reported in Omnicom's public filings.
At the end of the year, the Compensation Committee reviews the performance
of each participant against his or her performance goals. Awards are paid only
after the committee has determined that the performance goals have been
attained. The Compensation Committee considers the recommendations of the CEO as
to the named executive officers other than the CEO, and retains the discretion
to adjust the amount of an award otherwise payable to a participant despite the
attainment of previously established performance goals.
In 2005, Omnicom exceeded threshold levels of performance, and the
executive officers were entitled to their targeted cash bonuses. These bonuses
were paid on or around March 31, 2006. In 2003, even though Omnicom exceeded
threshold levels of performance and executive officers were entitled to their
targeted cash bonuses, senior management, including the named executive officers
and other executive officers, elected to receive reduced bonuses to assure that
lower-level employees received substantial incentive compensation in recognition
of their performance in 2003.
Long-Term Stock-Based Incentive Awards: The Compensation Committee
determines the restricted stock award grants and stock option grants for the
named executive officers. Such grants for executive officers who are not named
executive officers are recommended by the CEO and determined by the Compensation
Committee in a discretionary manner.
o Restricted Stock Awards: The Compensation Committee grants
restricted stock awards annually to a relatively broad group of key
executives based upon the executive's level of responsibility and
judgment of the executive's current and expected future contribution
to Omnicom's performance. In general, the Compensation Committee's
judgment is based on an analysis of the executive's contribution by
evaluating such factors as the revenue growth and profitability of
Omnicom and the business unit with which the executive was
associated, and various personal performance factors, which may
include such qualitative factors as organizational leadership, staff
development, progress toward strategic initiatives and client
development. Restricted stock awards typically vest over a period of
five years, with 20% vesting each year. The restricted stock is
subject to forfeiture if a participant's employment is terminated
for certain reasons before the shares become vested. During the
award cycle, participants receive dividends on and have the right to
vote the awarded shares. No restricted stock was awarded to the
named executive officers in 2005.
o Stock Options: The Compensation Committee grants stock options to a
relatively select group of key executives based upon the same
measurements as those on which restricted stock awards are based.
Stock options are granted with an exercise price equal to the market
price of Omnicom's stock on the day of grant and generally vest over
a period of three years. In one year, however, the Compensation
Committee granted stock options all of which vested after a period
of six years, subject to acceleration in certain events including
the attainment of certain share price thresholds. No stock options
were awarded to the named executive officers in 2005.
o Performance Share Units: In prior years, the Compensation Committee
has approved awards to certain executive officers under which they
have the right to earn performance share units. Performance share
units entitle the holder to payouts of cash and/or common stock, as
determined by
9
the Compensation Committee, up to a maximum amount, based on the
value of one share of common stock on the payout date for each
performance share unit. The Compensation Committee retains the
overall discretion to reduce any performance compensation and
performance share units that the holder would otherwise be entitled
to receive.
The Compensation Committee has awarded performance share units
based on a review of Omnicom's earnings per share growth over a
three-year period. If the executive officer is affiliated with one
of Omnicom's subsidiaries, the committee evaluates the executive
using a formula that considers both Omnicom's earnings per share
growth over a three-year period and the three-year net profit growth
of that subsidiary. No performance share units for the performance
period of 2003 to 2005 were paid out because the executive officers
eligible to receive these awards elected not to receive them, even
though the specified targets were met, including our CEO and
President and our Executive Vice President and CFO, who in 2005
would have earned sizable stock grants as a result of Omnicom
exceeding certain threshold levels of performance. The Compensation
Committee took into consideration the fact that Mr. Wren and Mr.
Weisenburger waived these grants when deciding upon their cash
incentive bonuses for 2005.
CEO Compensation: In determining Mr. Wren's compensation for 2005, the
Compensation Committee applied the same principles described in this
Compensation Committee Report in the same manner that they were applied to other
executives. The Compensation Committee arrived at the mix of base salary, bonus
and long-term grants reflected in the Summary Compensation Table above by
evaluating the responsibilities of his position, Omnicom's performance and the
competitive marketplace.
Mr. Wren's base salary for 2005 was set at $1,000,000 per year, the same
as his base salary for 2004 and 2003, and he received a cash incentive bonus for
2005 of $4,400,000. Mr. Wren's base salary and incentive bonus were approved by
the Board upon the recommendation of the Compensation Committee and are
consistent with its practice of having incentive compensation serve as a
substantial component of our executives' compensation. In determining the
ultimate amount of the incentive bonus to be paid to Mr. Wren, in addition to
the relevant factors discussed above that are applicable to the other named
executive officers, the Compensation Committee considered Omnicom's financial
performance in fiscal 2005 compared to 2004, Mr. Wren's individual contribution
to that performance, competitive compensation practices, and Mr. Wren's
contribution to non-financial attributes of Omnicom and its subsidiaries,
including corporate governance matters.
Under Mr. Wren's leadership, in comparing fiscal 2005 to fiscal 2004,
Omnicom achieved diluted earnings per share growth of 12.4%, net income growth
of 9.3%, and worldwide revenue growth of 7.5%. Mr. Wren's compensation for 2005
is a reflection of his personal performance, and Omnicom's overall performance,
in 2005.
Internal Revenue Code Section 162(m): Section 162(m) limits the tax
deduction for compensation in excess of $1 million paid in any one year to a
Chief Executive Officer and certain other executive officers unless the
compensation is "qualified performance-based compensation". Last year at the
Annual Meeting, Omnicom's shareholders approved the adoption of our Senior
Management Incentive Plan. Under the Incentive Plan, payments of bonuses will
constitute "qualified performance-based compensation" under the provisions of
Section 162(m) if payable on account of the attainment of one or more
pre-established, objective performance goals included in the Senior Management
Incentive Plan. Notwithstanding the adoption of the Incentive Plan by Omnicom's
stockholders last year, the Compensation Committee reserves the right to pay
Omnicom's employees, including participants in the Incentive Plan, other amounts
which may or may not be deductible under Section 162(m) or other provisions of
the Internal Revenue Code. Omnicom's Equity Incentive Plan has been approved by
its shareholders pursuant to the requirements of Section 162(m) so that awards
earned under these plans will qualify for tax deduction by Omnicom when paid.
The Compensation Committee considers the anticipated tax treatment to
Omnicom and its subsidiaries in its review and establishment of compensation
programs and awards. The Compensation Committee intends to continue to consider
the deductibility of compensation as a factor in assessing whether a particular
arrangement is appropriate given the goals of maintaining a competitive
executive compensation system generally, motivating executives to achieve
corporate performance objectives and increasing shareholder value.
Conclusion: The Compensation Committee believes that it is achieving its
goals in allowing executive compensation to reflect Omnicom's financial
performance. This reflection imposes an adequate risk to levels of executive
compensation when Omnicom's performance does not meet the Compensation
Committee's
10
ambitious goals and creates an adequate incentive since executives are amply
rewarded when their performance contributes to Omnicom's financial performance
exceeding those goals. The Compensation Committee further believes that it
awards compensation that is reasonable when all elements of potential
compensation are considered. The first-rate talent and leadership of Omnicom's
executives make an enormous impact in Omnicom's long-term performance. The
Compensation Committee concludes that Omnicom's executive compensation structure
is meeting the objectives set forth in the statement of the Compensation
Committee's philosophy.
Gary L. Roubos, Chairman
Leonard S. Coleman, Jr.
Susan S. Denison
Linda Johnson Rice
Members of the Compensation Committee
Salary Continuation Agreements
We have entered into salary continuation agreements with each of the named
executive officers under which we agreed to make annual payments to them for up
to ten years after termination of full time employment, unless termination is
for "cause", in consideration for their agreements not to compete and to consult
during the service period. "Cause" is generally defined for this purpose as
willful malfeasance, such as breach of trust, fraud or dishonesty. If a covered
executive dies before expiration of the applicable payment period, his
beneficiary is entitled to 75% of the executive's payment for the remainder of
that period. The payments are equal to a percentage of the covered executive's
salary and are subject to reduction in certain circumstances. The salary
percentages are equal to 50% for the named executive officers. The payment
periods are based on age and service and are currently: ten years for Mr. Wren,
nine years for Mr. Harrison, five years for Mr. Robertson, and three years for
Mr. Weisenburger. Pursuant to the terms of his salary continuation agreement,
Mr. Kaess's beneficiary will receive payments equal to 37.5% of his salary for a
ten year period.
EQUITY COMPENSATION PLANS
Our principal equity plan for employees is our Equity Incentive Plan,
which was approved by shareholders in 2002, and amended with shareholder
approval in 2003, and replaced all prior employee equity incentive plans. As a
result of the adoption of the Equity Incentive Plan, no new awards may be made
under prior plans. Awards that are forfeited or cancelled under prior plans may
be reissued under the Equity Incentive Plan. Outstanding equity awards under
prior plans, however, were not affected by the adoption of our Equity Incentive
Plan.
Our principal equity plan for non-employee directors is our Director
Equity Plan, which was approved by our shareholders at our Annual Meeting in
2004. We also have a tax-qualified employee stock purchase plan available to
substantially all domestic employees.
All of our current equity compensation plans have been approved by
shareholders. The following table provides information about our current equity
compensation plans as of December 31, 2005.
Number of securities to Weighted-average Number of securities remaining
be issued upon exercise exercise price of available for future issuance under
of outstanding options, outstanding options, equity compensation plans (excluding
Plan Category warrants and rights warrants and rights securities reflected in first column)
------------- ----------------------- ------------------- -------------------------------------
Equity compensation plans
approved by security holders .... 15,702,835 $74.05 8,948,656(1)
Equity compensation plans not
approved by security holders .... -- -- --
---------- ------ ---------
Total ............................. 15,702,835 $74.05 8,948,656
========== ====== =========
----------
(1) This figure includes 1,063,798 shares that remained available for purchase
as of December 31, 2005 under the employee stock purchase plan, which is a
tax-qualified plan in which all eligible full-time and part-time domestic
employees may participate. The maximum number of shares that may be issued
under our Equity Incentive Plan as restricted stock or other non-option
awards is 3.25 million shares (in addition to shares relating to
restricted stock awards made under the plan prior to May 20, 2003).
11
PERFORMANCE GRAPH
The graph below compares cumulative total return on our common stock
during the last five fiscal years with the Standard & Poor's 500 Composite Index
and a peer group of publicly held corporate communications and marketing holding
companies. The peer group consists of The Interpublic Group of Companies, Inc.,
WPP Group plc, Publicis Groupe SA and Havas. Cordiant Communications Group and
Grey Global Group Inc., which were included in the peer group for prior years,
are no longer included following their acquisition by WPP Group. As a result,
the graph has been restated for all prior years to exclude Cordiant and Grey
Global. The graph shows the value at the end of each year of each $100 invested
in our common stock, the S&P 500 Index and the peer group. The graph assumes the
reinvestment of dividends.
Returns depicted in the graph are not indicative of future performance.
[The following information is depicted as a line chart in the printed material.]
COMPARISON OF CUMULATIVE FIVE YEAR TOTAL RETURN
INDEXED RETURNS
Base Years Ending
Period ---------------------------------------------
Company Name / Index Dec00 Dec01 Dec02 Dec03 Dec04 Dec05
--------------------------------------------------------------------------------
OMNICOM GROUP 100 108.87 79.75 109.07 106.53 108.74
S&P 500 INDEX 100 88.12 68.66 88.34 97.94 102.75
PEER GROUP 100 77.20 44.14 52.26 51.14 53.19
12
STOCK OWNERSHIP
The following table sets forth certain information as of the close of
business on March 31, 2006 (except as otherwise noted), with respect to the
beneficial ownership (1) of our common stock by:
o each person known to Omnicom to own beneficially more than 5% of our
outstanding common stock;
o each current director or nominee;
o each named executive officer; and
o all directors and executive officers as a group.
Options Total Percent of
Number of Exercisable Beneficial Shares
Name Shares Owned(2) within 60 days Ownership Outstanding
---- --------------- -------------- ---------- -----------
FMR Corp. (3) 15,691,896 -- 15,691,896 8.90%
UBS Global Asset Mgt. (Americas) Inc. (4) 12,107,195 -- 12,107,195 6.87%
John D. Wren 376,503 2,450,000 2,826,503 1.60%
Bruce Crawford 238,100 -- 238,100 *
Robert Charles Clark 2,962 -- 2,962 *
Leonard S. Coleman, Jr 6,728 -- 6,728 *
Errol M. Cook (5) 5,362 -- 5,362 *
Susan S. Denison 8,295 -- 8,295 *
Thomas L. Harrison 68,199 583,333 651,532 *
Michael A. Henning 5,534 -- 5,534 *
Kenneth R. Kaess, Jr.(6) -- -- -- --
John R. Murphy 8,597 -- 8,597 *
John R. Purcell (7) 46,642 -- 46,642 *
Linda Johnson Rice 3,145 -- 3,145 *
Andrew Robertson 20,283 73,333 93,616 *
Gary L. Roubos 9,829 -- 9,829 *
Randall J. Weisenburger 111,246 1,299,999 1,411,245 *
All directors and executive officers
as a group (20 persons) 1,079,531 5,203,997 6,283,528 3.56%
----------
* less than 1%
(1) Beneficial ownership has been determined in accordance with Rule 13d-3 of
the Securities Exchange Act of 1934, as amended.
(2) Unless otherwise indicated, the number of shares owned represents both
sole voting and sole investment power. Includes:
o shares held pursuant to executive restricted stock program, namely,
Mr. Harrison--4,400 shares, Mr. Robertson--9,200 shares, and Mr.
Weisenburger--10,660 shares;
o shares held pursuant to the outside director equity plan, the payout
of which has been deferred at the election of the holder, namely,
Mr. Clark--1,612 shares, Mr. Cook--1,612 shares, Ms. Denison--3,108
shares, Mr. Henning--3,284 shares, Mr. Murphy--3,284 shares, Mr.
Purcell--1,612 shares, and Ms. Rice--1,700 shares;
o shares previously held under restricted stock awards, the payout of
which has been deferred at the election of the holder, namely, Mr.
Wren--92,996 shares, Mr. Harrison--52,400 shares and Mr.
Weisenburger--57,640 shares;
o shares credited under the Omnicom Group Retirement Savings Plan,
namely, Mr. Wren-- 10,013 shares, Mr. Harrison--1,762 shares, and
Mr. Weisenburger--498 shares; and
o shares purchased under an employee stock purchase plan, namely, Mr.
Harrison--2,438 shares and Mr. Weisenburger--2,448 shares.
13
(3) Stock ownership is as of December 31, 2005, and is based solely on a
Schedule 13G/A filed by FMR Corp. with the SEC on February 14, 2006. In
its filing, FMR Corp. reported having sole voting power over 1,137,201
shares and sole dispositive power over 15,691,896 shares. Edward C.
Johnson 3rd is Chairman of FMR Corp. and reported sole dispositive power
over all of the shares beneficially owned by FMR Corp. FMR Corp. has
certified in its Schedule 13G/A that our stock was acquired and is held in
the ordinary course of business, and was not acquired and is not held for
the purpose of changing or influencing control of Omnicom. The address of
FMR Corp. is 82 Devonshire Street, Boston, Massachusetts 02109.
(4) Stock ownership is as of December 31, 2005, and is based solely on a
Schedule 13G filed with the SEC on February 14, 2006, by UBS AG for the
benefit and on behalf of the Traditional Investments division of the UBS
Global Asset Management business group of UBS AG. UBS Global Asset
Management (Americas) Inc., a member of the UBS Global Asset Management
business group of UBS AG, is identified as the subsidiary which acquired
the shares being reported. In the filing, UBS AG reported having sole
voting power over 6,818,818 shares and shared dispositive power over
12,107,195 shares. UBS AG has certified in its Schedule 13G that our stock
was acquired and is held in the ordinary course of business, and was not
acquired and is not held for the purpose of changing or influencing
control of Omnicom. The address of UBS AG is Bahnhofstrasse 45, PO Box
CH-8021, Zurich, Switzerland.
(5) Includes 3,500 shares which are held in a joint brokerage account shared
by Mr. Cook and his wife.
(6) Mr. Kaess died prior to March 31, 2006, the date as of which the table
speaks.
(7) Includes 2,000 shares held by Mr. Purcell's wife. Mr. Purcell disclaims
beneficial ownership of shares held by his wife.
EXECUTIVE OFFICERS
The following table sets forth the names, ages and positions of our
executive officers as of the date of this Proxy Statement.
Name Position Age
---- -------- ---
Bruce Crawford Chairman 77
John D. Wren President and Chief Executive Officer 53
Randall J. Weisenburger Executive Vice President and Chief Financial Officer 47
Philip J. Angelastro Senior Vice President of Finance and Controller 41
Michael Birkin Vice Chairman 47
Charles E. Brymer President and Chief Executive Officer of DDB Worldwide 46
Jean-Marie Dru President and Chief Executive Officer of TBWA Worldwide 59
Thomas L. Harrison Chairman and Chief Executive Officer of Diversified Agency Services 58
Peter Mead Vice Chairman 66
Michael J. O'Brien Senior Vice President, General Counsel and Secretary 45
Andrew Robertson President and Chief Executive Officer of BBDO Worldwide 45
Daryl D. Simm Chairman and Chief Executive Officer of Omnicom Media Group 44
Information concerning Mr. Crawford and Mr. Wren is included below under
"Items To Be Voted On: Item 1 - Election of Directors".
Randall J. Weisenburger was appointed Executive Vice President and Chief
Financial Officer in September 1998.
Philip J. Angelastro was promoted to Senior Vice President of Finance in
January 2002 and was appointed Controller on February 1, 1999. Mr. Angelastro
joined Omnicom in June 1997 as Vice President of Finance of Diversified Agency
Services ("DAS") after being a Partner at Coopers & Lybrand LLP.
Michael Birkin was appointed Vice Chairman of Omnicom, as well as
President and CEO of Omnicom Asia-Pacific, on March 1, 2005. From 1999 to 2005,
he served as Worldwide President of DAS. Mr. Birkin previously served as
International President of DAS from 1997 to 1999 and European Managing Director
of DAS from 1995 to 1997.
Charles E. Brymer was appointed President and CEO of DDB Worldwide on
April 20, 2006. Prior to that, Mr. Brymer was Chairman and Group Chief Executive
of Interbrand Group, a position he held since 1994. Prior to that he was the
President of Interbrand Group's U.S. business.
14
Jean-Marie Dru was appointed President and CEO of TBWA Worldwide in March
2001. He had previously been President International of TBWA Worldwide. Mr. Dru
was co-founder and Chairman of BDDP Group, which merged with TBWA in 1998.
Thomas L. Harrison was appointed Chairman and CEO of DAS in May 1998.
Peter Mead was appointed Vice Chairman in May 2000. He had previously been
Group Chief Executive of Abbot Mead Vickers plc and Joint Chairman of AMV BBDO.
Michael J. O'Brien joined Omnicom in November 2003 and was appointed
Senior Vice President, General Counsel and Secretary in December 2003. Prior to
that, he was a partner in the law firm of Goodwin Procter LLP (since April
2002). Prior to that, he was a partner in the law firm of O'Sullivan LLP.
Andrew Robertson was named CEO of BBDO Worldwide in May 2004, having been
made President of BBDO Worldwide in 2002. In 2001, Mr. Robertson was President
and CEO of BBDO North America, and was subsequently elected to the Worldwide
Board of Directors of BBDO. He joined BBDO in 1995.
Daryl D. Simm was named Chairman and CEO of the newly formed Omnicom Media
Group in November 2005. Mr. Simm previously held the position of President and
CEO of OMG.
AUDIT RELATED MATTERS
Fees Paid to Independent Auditors
The following table shows information about fees billed by KPMG LLP and
affiliates for professional services (as well as all "out-of-pocket" costs
incurred in connection with these services) rendered for the last two fiscal
years:
Approved Approved
by Audit by Audit
2005 Committee 2004 Committee
---- --------- ---- ---------
Audit Fees (1) ........... $17,898,332 100% $20,000,000 100%
Audit-Related Fees (2) ... 996,585 100% 2,147,200 100%
Tax Fees (3) ............. 417,527 100% 609,053 100%
All Other Fees (4) ....... -- --
----------- -----------
Total Fees ............... $19,312,444 $22,756,253
=========== ===========
----------
(1) Audit Fees consist of fees for professional services for the audit or
review of our consolidated financial statements or for audit services that
are normally provided by independent auditors in connection with statutory
and regulatory filings or engagements. Audit Fees in 2004 and 2005 include
the audit of internal controls over financial reporting.
(2) Audit-Related Fees consist of fees for assurance and related services that
are reasonably related to the performance of the audit or review of our
consolidated financial statements and are not reported under Audit Fees,
including due diligence related to mergers and acquisitions and special
procedures to meet certain statutory requirements.
(3) Tax Fees consist primarily of fees for tax compliance including the review
and preparation of statutory tax returns and other tax compliance related
services.
(4) All Other Fees are fees for any products or services not included in the
first three categories.
In deciding to reappoint KPMG LLP to be our auditors for 2006, the Audit
Committee considered KPMG LLP's provision of services in the last two years to
assure that they were compatible with maintaining KPMG LLP's independence. The
committee determined that these fees were compatible with the independence of
KPMG LLP as our independent auditors.
Audit Committee Report
The members of our committee are John R. Murphy, Committee Chair, Robert
Charles Clark, Errol M. Cook and Michael A. Henning. The Board has determined
that each member of the Audit Committee is independent within the meaning of the
rules of the NYSE and the SEC. The Board has also determined that each member is
"financially literate" and has "accounting or related financial management
expertise," as such qualifications are defined under the rules of the NYSE, and
is an "audit committee financial expert" within the meaning of the rules of the
SEC. The Board has adopted a written Audit Committee Charter, a copy of which is
posted on our website at http://www.omnicomgroup.com.
15
During 2005, the Audit Committee met 13 times. The Audit Committee
schedules its meetings with a view towards ensuring that it devotes appropriate
attention to all of its tasks. The Audit Committee's meetings include, whenever
appropriate, executive sessions with Omnicom's independent registered public
accountants and with Omnicom's internal auditors, in each case, without the
presence of Omnicom's management. The Audit Committee's primary purpose is to
assist the Board in carrying out its oversight responsibilities relating to
Omnicom's financial reporting. In this regard, the committee: (a) assists Board
oversight of (i) the integrity of Omnicom's financial statements, (ii) Omnicom's
compliance with legal and regulatory requirements, (iii) the qualifications and
independence of Omnicom's independent auditors, and (iv) the performance of
Omnicom's internal audit function and independent auditors; and (b) prepares
this Report. In carrying out these responsibilities, the Audit Committee, among
other things: (a) monitors preparation of quarterly and annual financial reports
by Omnicom's management; (b) supervises the relationship between Omnicom and its
independent registered public accountants, including (i) having direct
responsibility for their appointment, compensation and retention, (ii) reviewing
the scope of their audit services, (iii) approving audit and non-audit services,
and (iv) confirming the independence of the independent registered public
accountants; and (c) oversees management's implementation and maintenance of
effective systems of internal controls.
Management is responsible for the preparation, presentation and integrity
of Omnicom's financial statements, accounting and financial reporting principles
and the establishment and effectiveness of internal controls and procedures
designed to assure compliance with accounting standards and applicable laws and
regulations. The independent auditors are responsible for performing an
independent audit of the financial statements in accordance with the standards
of the Public Company Accounting Oversight Board (United States), expressing an
opinion as to the conformity of such financial statements with generally
accepted accounting principles and auditing management's assessment of the
effectiveness of internal control over financial reporting. The independent
auditors have free access to the Audit Committee to discuss any matters they
deem appropriate.
In performing its oversight role, the Audit Committee has reviewed and
discussed with management Omnicom's audited 2005 financial statements as of
December 31, 2005. The Committee has also discussed with KPMG LLP the matters
required to be discussed by Statement on Auditing Standards No. 61,
"Communication with Audit Committees", as amended, as issued by the Auditing
Standards Board of the American Institute of Certified Public Accountants, which
included discussion of the quality of Omnicom's accounting principles, the
reasonableness of significant judgments and the clarity of disclosures in the
financial statements. The committee has received and reviewed the written
disclosures and the letter from KPMG LLP required by Independence Standards
Board Standard No. 1, "Independence Discussions with Audit Committees", as
currently in effect, and has discussed with KPMG LLP its independence. The Audit
Committee has adopted a policy that requires it to pre-approve each audit and
permissible non-audit service rendered by KPMG LLP except for items exempt from
pre-approval requirements by applicable law. On a quarterly basis, the Audit
Committee reviews and generally pre-approves specific types of services and the
range of fees that may be provided by KPMG LLP without first obtaining specific
pre-approval from the Audit Committee. The policy requires the specific
pre-approval of all other permitted services.
During fiscal 2005, the Audit Committee performed all of its duties and
responsibilities under the Audit Committee Charter. In performing these duties
and responsibilities, the Audit Committee acts only in an oversight capacity and
necessarily relies on the work and assurances of Omnicom's management and KPMG
LLP, which expresses an opinion on the conformity of Omnicom's annual financial
statements to accounting principles generally accepted in the United States.
Based on the review and discussions referred to in this Report, the Audit
Committee recommended to the Board that the audited financial statements of
Omnicom for the year ended December 31, 2005 be included in its Annual Report on
Form 10-K for the fiscal year ended December 31, 2005 for filing with the SEC.
John R. Murphy, Chairman
Robert Charles Clark
Errol M. Cook
Michael A. Henning
Members of the Audit Committee
16
ITEMS TO BE VOTED ON
Item 1 - Election of Directors
The current 11 members of the Board have been nominated to continue to
serve as directors for another year. All of the nominees have been recommended
for re-election to the Board by our Governance Committee and approved and
nominated for re-election by the Board.
The Board recommends that shareholders vote FOR all nominees.
The Board has no reason to believe that any of the nominees would be
unable or unwilling to serve if elected. If a nominee becomes unable or
unwilling to accept nomination or election, the Board prior to the meeting may
select a substitute nominee or undertake to locate another director after the
meeting. If you have submitted a proxy and a substitute nominee is selected,
your shares will be voted for the substitute nominee.
In accordance with our by-laws, directors are elected by a plurality of
the votes cast. That means the nominees will be elected if they receive more
affirmative votes than any other nominees. Our form of proxy permits you to
withhold your vote for particular nominees. However, shares represented by
proxies so designated will count as being present for purposes of determining a
quorum and will not affect whether a given nominee is elected because directors
are elected by a plurality of the shares voted at a meeting at which a quorum is
present. Such proxies may also be voted on other matters, if any, that may be
properly presented at the meeting.
Set forth below is biographical and other information, as of the date of
the mailing of this Proxy Statement, about our nominees for election as
director, which was confirmed by them for inclusion in this Proxy Statement.
[PHOTO OMITTED] John D. Wren
Age: 53
Director since 1993
Mr. Wren is President and Chief Executive Officer of Omnicom, a
position he has held since January 1997. Prior to 1997, he
served as President of Omnicom.
[PHOTO OMITTED] Bruce Crawford
Age: 77
Director since 1989
Chairman of the Board and Chairman of the Finance Committee
Mr. Crawford is Chairman of the Board of Omnicom, a position he
has held since 1995. He is Chairman of the Executive Committee
of The Metropolitan Opera and Chairman Emeritus of Lincoln
Center. He is also a Director of Venetian Heritage and The
Animal Medical Center.
[PHOTO OMITTED] Robert Charles Clark
Age: 62
Director since 2002
Member of the Audit and Governance Committees
Mr. Clark is a Harvard University Distinguished Service
Professor, Harvard Law School. He was Dean of Harvard Law School
from July 1989 through June 2003. He has served as professor of
law at Harvard since 1979, and before that, was a tenured
professor at Yale Law School. His specialty is corporate law.
Mr. Clark is a director of Collins & Aikman Corp. and Time
Warner Inc. Mr. Clark is also a member of the Board of Trustees
of Teachers Insurance and Annuity Association (TIAA).
17
[PHOTO OMITTED] Leonard S. Coleman, Jr.
Age: 57
Director since 1993
Member of the Compensation and Governance Committees
Mr. Colemen was Senior Advisor, Major League Baseball from 1999
until 2005. Previously, he was Chairman of Arena Co., a
subsidiary of Yankees/Nets, until September 2002. Before that,
he was President, National League, Major League Baseball. Mr.
Coleman is a director of Cendant Corporation, H.J. Heinz
Corporation, Churchill Downs Inc., Aramark Corporation and
Electronic Arts Inc.
[PHOTO OMITTED] Errol M. Cook
Age: 66
Director since 2003
Member of the Audit Committee
Mr. Cook is a private investor and consultant. Previously, he
was a managing director and partner of Warburg Pincus from March
1991 until his retirement in February 1999. Before that, Mr.
Cook was a Senior Partner of Ernst & Young (August
1961-September 1989) and a Managing Director of Schroders
(September 1989-March 1991). Mr. Cook is also a director of
Journal Register Company.
[PHOTO OMITTED] Susan S. Denison
Age: 60
Director since 1997
Member of the Compensation and Governance Committees
Ms. Denison is a partner of Cook Associates, an executive search
firm, a position she has held since June 2001. Previously, she
served as a Partner at TASA Worldwide/Johnson, Smith & Knisely
and the Cheyenne Group. She also served as Executive Vice
President, Madison Square Garden and Executive Vice President
and General Manager at Showtime Networks. Ms. Denison is also a
director of InterCure, Inc.
[PHOTO OMITTED] Michael A. Henning
Age: 65
Director since 2003
Member of the Audit Committee
Mr. Henning was Deputy Chairman of Ernst & Young from December
1999 to October 2000 and Chief Executive Officer of Ernst &
Young International from September 1993 to December 1999. He is
also a director of CTS Corporation.
[PHOTO OMITTED] John R. Murphy
Age: 72
Director since 1996
Chairman of the Audit Committee and member of the
Governance Committee
Mr. Murphy is Vice Chairman of National Geographic Society, a
position he has held since March 1998. From May 1996 until March
1998, Mr. Murphy was President and Chief Executive Officer of
National Geographic Society. He is a trustee of Mercer
University, a trustee and Chairman of the Board of the
Mercantile Mutual Funds and a director of SirsiDynix. Mr. Murphy
is also a past president of the U.S. Golf Association.
[PHOTO OMITTED] John R. Purcell
Age: 74
Director since 1986
Chairman of the Governance Committee and member of the
Finance Committee
Mr. Purcell is Chairman and Chief Executive Officer of Grenadier
Associates Ltd., a merchant banking and financial advisory firm.
He served as Chairman of Donnelley Marketing, Inc., a database
direct marketing firm, from 1991 to 1996. He is also a director
of Technology Solutions Co.
18
[PHOTO OMITTED] Linda Johnson Rice
Age: 48
Director since 2000
Member of the Compensation and Governance Committees
Ms. Rice is President and Chief Executive Officer of Johnson
Publishing Company, Inc. and President of Fashion Fair
Cosmetics, a division of Johnson Publishing. Ms. Rice is a
director of Bausch & Lomb Inc., Kimberly-Clark Corporation and
MoneyGram International Inc.
[PHOTO OMITTED] Gary L. Roubos
Age: 69
Director since 1986
Chairman of the Compensation Committee and member of the
Finance Committee
Mr. Roubos was Chairman of Dover Corporation, a diversified
industrial manufacturing corporation, from May 1989 to May 1999,
and Chief Executive Officer of that company from January 1981 to
May 1994. He is also a director of ProQuest Company.
Item 2 - Ratification of the Appointment of Independent Auditors
In accordance with the Audit Committee's charter, the Audit Committee has
appointed KPMG LLP as our independent auditors for our fiscal year ending
December 31, 2006. We are submitting the selection of our independent auditors
for shareholder ratification at the 2006 Annual Meeting. KPMG LLP has been our
independent auditor since June 2002.
Representatives of KPMG LLP are expected to be present at the 2006 Annual
Meeting, will have the opportunity to make a statement if they desire to do so
and are expected to be available to respond to appropriate questions.
The Audit Committee is not bound by the results of the vote regarding
ratification of the independent auditors. If our shareholders do not ratify the
selection, the Audit Committee will reconsider whether to retain KPMG LLP, but
still may retain them. Even if the selection is ratified, the Audit Committee,
in its discretion, may change the appointment at any time during the year if it
determines that such a change would be in the best interests of Omnicom and its
shareholders.
The Board recommends that shareholders vote FOR ratification of the
appointment of KPMG LLP as our independent auditors.
Approval of this proposal requires the favorable vote of the holders of a
majority of the shares voting on the proposal.
INFORMATION ABOUT VOTING AND THE MEETING
Quorum; Required Vote; Effect of an Abstention and Broker Non-Votes
More than 50% of the shares entitled to vote will constitute a quorum for
the transaction of business at the 2006 Annual Meeting. Abstentions and broker
non-votes will be counted for purposes of determining whether a quorum exists.
(Broker non-votes are proxies returned by brokers or other nominees who do not
vote on a particular item because they did not receive instruction from the
beneficial owner and were not permitted to exercise discretionary voting
authority.) If a quorum is not present, the shareholders who are present or
represented may adjourn the meeting until a quorum exists. The time and place of
the adjourned meeting will be announced at the time the adjournment is taken,
and no other notice need be given. We will, however, publish a press release if
the meeting is adjourned to another date. An adjournment will have no effect on
business that may have already been conducted at the meeting.
In order to ratify the appointment of KPMG LLP as our independent
auditors, assuming a quorum exists, the affirmative vote of the holders of a
majority of the shares represented at the meeting and actually voted is
required. In order to obtain approval of the election of any nominee as a
director, assuming a quorum exists, a
19
plurality vote is required. Abstentions, broker non-votes and withheld votes
will not be considered as votes cast in favor or against any proposal. As a
result, abstentions, broker non-votes and, in the case of election of directors,
withheld votes, will have no effect on the matters brought to a vote at the
meeting.
Voting
You can vote your shares by proxy card, through the Internet, by telephone
or in person. We have adopted the Internet and telephone voting procedures to
authenticate shareholders' identities, to allow shareholders to provide their
voting instructions and to confirm that their instructions have been recorded
properly. By submitting your proxy through the Internet, by telephone or by
using the enclosed proxy card, you will authorize two of our officers or their
designees to represent you and vote your shares at the meeting in accordance
with your instructions or, if no instructions are given, in their discretion.
They may also vote your shares to adjourn the meeting and will be authorized to
vote your shares at any adjournments or postponements of the meeting.
Fidelity Management Trust Company, as trustee under our retirement savings
plan, and Computershare Trust Company, Inc., as administrator of our employee
stock purchase plan, will vote common stock held in the plans as indicated by
participants in whose accounts the shares are held, whether or not vested, on
their proxies. Please note that your shares held in either plan will be voted as
you instruct if your proxy card, telephone or Internet voting instructions are
received on or before 11:59 p.m. Eastern Time on Thursday, May 18, 2006. In
accordance with the terms of the retirement savings plan, Fidelity Management
Trust Company will vote all shares for which it does not receive voting
instructions by the deadline provided above in the same proportion on each issue
as it votes the shares for which it does receive instructions. In accordance
with the terms of the employee stock purchase plan, Computershare Trust Company,
Inc. will not vote shares for which it does not receive voting instructions by
the deadline provided above.
Voting by Street Name Holders
If you are the beneficial owner of shares held in "street name" by a
broker, bank or other nominee, the broker, bank or other nominee, as the record
holder of the shares, is required to vote those shares according to your
instructions. Your broker, bank or other nominee should have enclosed a voting
instruction card for you to use in directing it on how to vote your shares.
Under existing rules, if your broker holds your shares in its name and you
have not given voting instructions, your broker nonetheless has the discretion
to authorize the designated proxies to act, except on certain matters. As such,
they could vote in respect of the election of directors, and the ratification of
the appointment of KPMG LLP as our independent auditors.
Default Voting
If you submit a proxy but do not indicate any voting instructions, your
shares will be voted FOR the election of all nominees for director and FOR the
ratification of the appointment of KPMG LLP. If any other business properly
comes before the shareholders for a vote at the meeting, your shares will be
voted according to the discretion of the holders of the proxy.
Right to Revoke
If you submit your proxy, you may change your voting instructions at any
time prior to the vote at the 2006 Annual Meeting. For shares held directly in
your name, you may change your vote by granting a new proxy, through the
Internet, by telephone or in writing, which bears a later date (thereby
automatically revoking the earlier proxy) or by attending the Annual Meeting and
voting in person. For shares beneficially owned by you, but held in "street
name" by a broker, bank or other nominee, please refer to the information
forwarded to you by your broker, bank or other nominee for instructions on
revoking or changing your proxy.
Tabulation of Votes
Mellon Investor Services will act as inspectors at the 2006 Annual
Meeting. They will determine the presence of a quorum and will tabulate and
certify the votes.
20
ADDITIONAL INFORMATION
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires our
directors and executive officers, and persons who own more than 10% of our
common stock, to file reports of ownership and changes in ownership of our
common stock with the SEC. Purchases and sales of our common stock by such
persons are published on our website at http://www.omnicomgroup.com.
Based solely upon a review of the copies of such reports filed with the
SEC, and on written representations from our reporting persons, we believe that
all Section 16(a) filing requirements applicable to our executive officers,
directors and persons who own more than 10% of our common stock were complied
with during 2005, with the following exceptions. Last year, a report deadline
was missed that resulted in a late Form 4 filing with respect to each of our
directors who was not an employee or a former employee of Omnicom, which
identified a grant under the Director Equity Plan that should have been reported
earlier on a Form 4. Philip J. Angelastro and Andrew Robertson each filed a late
Form 4 last year to report a transaction that should have been reported earlier
on a Form 4. Jean-Marie Dru filed two late Forms 4 in 2006 to report a total of
six transactions that should have been reported earlier on Forms 4. Each of
these reports was filed late due to administrative oversight.
Expense of Solicitation
We will bear all costs of this proxy solicitation. Proxies may be
solicited by mail, in person, by telephone or by facsimile or electronic
transmission by our officers, directors, and regular employees. We may reimburse
brokerage firms, banks, custodians, nominees and fiduciaries for their expenses
to forward proxy materials to beneficial owners. We have retained D.F. King &
Co., Inc. to assist in the solicitation of proxies. For these services, we will
pay D.F. King & Co. a fee of approximately $10,000 and reimburse it for certain
of out-of-pocket disbursements and expenses.
Incorporation by Reference
To the extent that this Proxy Statement is incorporated by reference into
any other filing by Omnicom under the Securities Act of 1933 or the Securities
Exchange Act of 1934, the sections of this Proxy Statement entitled "Executive
Compensation: Compensation Committee Report on Executive Compensation," "Audit
Related Matters: Audit Committee Report" (to the extent permitted by the rules
of the SEC) and "Performance Graph" will not be deemed incorporated, unless
specifically provided otherwise in such filing.
Availability of Certain Documents
A copy of our 2005 Annual Report to Shareholders is enclosed. You also may
obtain a copy of this document, our 2005 Annual Report on Form 10-K filed with
the SEC, our Corporate Governance Guidelines, our Code of Conduct, our Code of
Ethics for Senior Financial Officers and the charters for our Audit,
Compensation, Governance, Finance and Qualified Legal Compliance Committees,
without charge, by writing to: Omnicom Group Inc., 437 Madison Avenue, New York,
New York 10022, Attn: Corporate Secretary. All of these documents also are
available through our website at http://www.omnicomgroup.com. Please note that
the information contained on our website is not incorporated by reference in, or
considered to be part of, this Proxy Statement.
Delivery of Documents to Shareholders Sharing an Address
If you are the beneficial owner of shares of our common stock held in
"street name" by a broker, bank or other nominee, your broker, bank or other
nominee may only deliver one copy of this Proxy Statement and our 2005 Annual
Report to multiple shareholders who share an address unless that broker, bank or
other nominee has received contrary instructions from one or more of the
shareholders at a shared address. We will deliver promptly, upon written or oral
request, a separate copy of this Proxy Statement and our 2005 Annual Report to a
shareholder at a shared address to which a single copy of the documents was
delivered. A shareholder who wishes to receive a separate copy of the Proxy
Statement and Annual Report, now or in the future, should submit this request by
writing to: Omnicom Group Inc., 437 Madison Avenue, New York, New York 10022,
21
Attn: Corporate Secretary or calling our corporate secretary at (212) 415-3600.
Beneficial owners sharing an address who are receiving multiple copies of Proxy
Statements and Annual Reports and who wish to receive a single copy of such
materials in the future will need to contact their broker, bank or other nominee
to request that only a single copy of each document be mailed to all
shareholders at the shared address in the future.
SHAREHOLDER PROPOSALS FOR THE 2007 ANNUAL MEETING
Any shareholder who wishes to present a proposal for inclusion in next
year's Proxy Statement and form of proxy must deliver the proposal to our
principal executive offices no later than the close of business on December 22,
2006. Proposals should be addressed to: Omnicom Group Inc., 437 Madison Avenue,
New York, New York 10022, Attn: Corporate Secretary.
Our by-laws require that written notice of a nomination for director or
submission of a proposal to be voted on at an annual meeting be provided to our
corporate secretary no less than 60 days prior to the date set for the meeting,
which was March 24, 2006 for the 2006 Annual Meeting. In order for a nomination
or proposal to be considered, the notice must contain certain information
prescribed by our by-laws. A copy of the applicable by-law provisions may be
obtained, without charge, upon written request addressed to: Omnicom Group Inc.,
437 Madison Avenue, New York, New York 10022, Attn: Corporate Secretary. As the
rules of the SEC make clear, simply submitting a proposal does not guarantee its
inclusion.
MICHAEL J. O'BRIEN
Secretary
New York, New York
April 26, 2006
22
OMNICOM GROUP INC.
437 Madison Avenue o New York, New York 10022
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE 2006 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 23, 2006.
The undersigned hereby appoints Randall J. Weisenburger and Michael J. O'Brien,
and each of them, as proxies, each with full power of substitution, to vote all
shares of common stock of Omnicom Group Inc. that the undersigned is entitled to
vote at the 2006 Annual Meeting of Shareholders to be held on May 23, 2006, and
at any postponements or adjournments thereof, as specified on the reverse of
this proxy card and in their discretion upon such other matters as may properly
come before such Annual Meeting and at any postponements or adjournments
thereof. Receipt of the Notice of the Meeting and the accompanying Proxy
Statement is hereby acknowledged.
This proxy, when properly executed, will be voted in the manner directed by you
if received by 11:59 p.m. Eastern Time, on Monday, May 22, 2006. If you do not
give any direction, this proxy will be voted FOR Items (1) and (2) and in the
discretion of the proxies upon such other matters as may properly come before
the Annual Meeting.
If the undersigned is a participant in our employee retirement savings plan
and/or our employee stock purchase plan and has Omnicom stock allocated to his
or her account(s), then the undersigned directs the trustee or the administrator
of the relevant plan likewise to appoint the above-named individuals as proxies
to vote and act with respect to all shares of such stock so allocated in the
manner specified on the reverse of this card and in their discretion on all
other matters as may properly come before the meeting. If you are such a
participant and your voting instructions are not received by 11:59 p.m. Eastern
Time, on Thursday, May 18, 2006, the trustee of the employee retirement saving
plan will vote your plan shares in the same proportion as it votes all other
shares in the plan for which it has received timely voting instructions and the
administrator of the employee stock purchase plan will not vote your shares.
Please specify your choices by marking the appropriate boxes on the REVERSE
SIDE. You need not mark any boxes if you wish to vote in accordance with the
Board of Directors' recommendations. It is important that your shares are
represented at this meeting, whether or not you attend the meeting in person.
Therefore, please complete the reverse side and mail it or use our Internet or
toll-free telephone voting system explained on the reverse side.
(Continued and to be dated and signed on the reverse side)
--------------------------------------------------------------------------------
^ FOLD AND DETACH HERE ^
FOR INTERNET AND TELEPHONE PROXY INSTRUCTIONS, SEE REVERSE SIDE
Please
mark
with
[X]
--------------------------------------------------------------------------------
1. Election of Directors
01 John D. Wren
02 Bruce Crawford FOR WITHHOLD
03 Robert Charles Clark ALL FROM ALL
04 Leonard S. Coleman, Jr. NOMINEES NOMINEES
05 Errol M. Cook [_] [_]
06 Susan S. Denison
07 Michael A. Henning FOR all, except vote WITHHELD from the following
08 John R. Murphy nominee(s):
09 John R. Purcell
10 Linda Johnson Rice ________________________________________________
11 Gary L. Roubos
2. Ratification of KPMG LLP as our independent FOR AGAINST ABSTAIN
auditors for 2006 [_] [_] [_]
--------------------------------------------------------------------------------
The Board of Directors recommends that you vote FOR Items 1 and 2.
Signature ______________________________________________________________________
Joint Signature if held jointly ________________________________________________
Date: __________________, 2006
Please sign exactly as your name appears on this proxy. If stock is held in the
name of joint holders, each should sign. If you are signing as a trustee,
executor, etc., please so indicate. Please mark, sign, date and mail this card
promptly in the postage prepaid return envelope provided.
--------------------------------------------------------------------------------
^ FOLD AND DETACH HERE ^
Dear Shareholder:
We have established different ways to vote your shares. You may appoint your
proxies to vote your shares by mailing the enclosed proxy card, or through the
Internet or via toll-free telephone, 24 hours a day, 7 days a week. Please note
that all proxy appointments through the Internet or by telephone must be
received by 11:59 p.m. Eastern Time, on Thursday, May 18, 2006, for shares held
in our employee plans and by 11:59 p.m. Eastern Time, on Monday, May 22, 2006,
for all other shares.
To vote over the Internet:
o Log on to the Internet and go to the website:
http://www.proxyvoting.com/omc
o Have this proxy card ready
o Follow the instructions that appear on your computer screen
To vote over the telephone:
o On a touch-tone telephone, call 1-866-540-5760
o Have this proxy card ready
o Follow the recorded instructions
Your Internet or telephone authorization allows the named proxies to vote your
shares in the same manner as if you marked, signed and returned your proxy card.
If you elect to appoint your proxies by Internet or by telephone, you do NOT
need to mail back your proxy card.