UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
May 23, 2005
OMNICOM GROUP INC.
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(Exact name of registrant as specified in its charter)
New York No. 001-10551 No. 13-1514814
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
437 Madison Avenue
New York, New York 10022
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 415-3600
Not Applicable
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[_] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
(A) The Annual Meeting of stockholders of Omnicom Group Inc. (the
"Company") was held on May 24, 2005. At the Annual Meeting, the Company's
stockholders approved the Senior Management Incentive Plan (the "Incentive
Plan"). The Incentive Plan is currently administered by the Compensation
Committee of the Board of Directors. Executives selected by the Committee are
eligible to participate in the Incentive Plan. Each participant in the Incentive
Plan may be paid a bonus of up to 2% of the Company's Earnings (as defined in
the Incentive Plan) for the relevant Performance Period (as defined in the
Incentive Plan), reduced in the discretion of the Committee by such amount, if
any, as the Committee deems appropriate. Bonuses will be payable, as determined
by the Committee, in cash and/or equity-based awards. To the extent that
equity-based awards are granted in lieu of cash they will be granted under
another plan maintained by the Company. Payments of bonuses under the Incentive
Plan are intended to constitute "qualified performance-based compensation" under
the provisions of section 162(m) of the Internal Revenue Code, which limits the
deductibility of compensation in excess of $1 million paid by a publicly traded
corporation to certain "covered employees", unless the compensation is
"qualified performance-based compensation."
The foregoing description of the Incentive Plan does not purport to be
complete and is qualified in its entirety by reference to such plan, a copy of
which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is
incorporated herein by reference.
(B) On May 23, 2005, the Compensation Committee of the Company's Board of
Directors designated the executive officers of the Company as participants under
the Incentive Plan. The Committee also established criteria to assist it in
determining certain participants' bonuses under the Incentive Plan. The criteria
will serve as guidelines for the Committee's exercise of its negative discretion
in applying the formula under the Incentive Plan. The criteria are based on the
Company's earnings per share growth for the applicable year. In some cases, the
criteria are also based on the following performance measures for the Company
subsidiary with which an executive officer is affiliated: pretax profit margin,
net profit and revenue growth, in each case as compared to the same measure for
the prior year.
(C) On May 23, 2005, the Company and its wholly owned subsidiaries Omnicom
Finance Inc., Omnicom Capital Inc. and Omnicom Finance Plc (the "Borrowers" and,
together with the Company, the "Loan Parties") entered into an Amended and
Restated Five Year Credit Agreement (the "Credit Agreement") with the lenders
named therein (the "Lenders"), Citigroup Global Markets Inc. and J.P. Morgan
Securities Inc., as lead arrangers and book managers, ABN Amro Bank N.V., as
syndication agent, JPMorgan Chase Bank, N.A. and HSBC USA, N.A., as
documentation agents, and Citibank, N.A. as administrative agent (the "Agent")
for the Lenders. The Credit Agreement has a maturity date of May 23, 2010. Under
the Credit Agreement, the Lenders committed to provide advances and letters of
credit in an aggregate amount of up to $2,100,000,000. Interest on the
borrowings under the Credit Agreement is payable at a base rate or Eurocurrency
rate, in either case plus an applicable margin and fees. Borrowings under the
Credit Agreement may be used for general corporate
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purposes of the Borrowers and their subsidiaries, including as commercial paper
liquidity support and to fund acquisitions not prohibited under the Credit
Agreement.
The terms of the Credit Agreement include customary representations and
warranties, affirmative and negative covenants (including certain financial
covenants) and events of default. Upon the occurrence, and during the
continuance, of an event of default, including but not limited to nonpayment of
principal when due, failure to perform or observe certain terms, covenants or
agreements under the Credit Agreement, and certain defaults of other
indebtedness, the Agent may terminate the obligation of the Lenders under the
Credit Agreement to make advances and issue letters of credit and declare any
outstanding obligations under the Credit Agreement immediately due and payable.
In addition, in the event of an actual or deemed entry of an order for relief
with respect to any Loan Party under the Federal Bankruptcy Code, the obligation
of each Lender to make advances and issue letters of credit shall automatically
terminate and any outstanding obligations under the Credit Agreement shall
immediately become due and payable. Subject to the terms and conditions of the
Credit Agreement, the Company may request that the Lenders' commitments under
the Credit Agreement be increased; provided that in no event may the aggregate
amount of the Lenders' commitments under the Credit Agreement at any time exceed
$2,250,000,000.
The obligations of the Borrowers under the Credit Agreement are guaranteed
by the Company.
The foregoing description of the Credit Agreement does not purport to be a
complete statement of the parties' rights and obligations under the Credit
Agreement and the transactions contemplated by the Credit Agreement. The
foregoing description of the Credit Agreement is qualified in its entirety by
reference to the Credit Agreement, a copy of which is attached hereto as Exhibit
10.2 and is incorporated herein by reference.
The Company has also received commitments for a new 364-day revolving
credit facility which provides for up to $400 million of borrowings. The terms
of the commitments provide that the facility will be available from June 2005
through June 2006 and the Company will have the right to convert borrowings at
maturity into a one-year term loan.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant
The information described above under Part C of "Item 1.01 Entry into a
Material Definitive Agreement" is hereby incorporated herein by reference.
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Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
The following exhibits are filed as part of this Current Report on Form
8-K:
10.1 Senior Management Incentive Plan
10.2 Amended and Restated Five Year Credit Agreement (the
"Agreement"), dated as of May 23, 2005, by and among Omnicom
Finance Inc., a Delaware corporation, Omnicom Capital Inc., a
Connecticut corporation, Omnicom Finance Plc, a corporation
organized under the laws of England and Wales, Omnicom Group
Inc., a New York corporation, the banks, financial
institutions and other institutional lenders and initial
issuing banks listed on the signature pages of the Agreement,
Citigroup Global Markets Inc. and J.P. Morgan Securities Inc.,
as lead arrangers and book managers, ABN Amro Bank N.V., as
syndication agent, JPMorgan Chase Bank, N.A. and HSBC Bank
USA, N.A., as documentation agents, and Citibank, N.A., as
administrative agent for the lenders.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
OMNICOM GROUP INC.
Date: May 26, 2005 By: /s/ Michael J. O'Brien
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Name: Michael J. O'Brien
Title: Senior Vice President, General
Counsel and Secretary
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EXHIBIT INDEX
Exhibit No. Exhibit
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10.1 Senior Management Incentive Plan
10.2 Amended and Restated Five Year Credit Agreement (the
"Agreement"), dated as of May 23, 2005, by and among Omnicom
Finance Inc., a Delaware corporation, Omnicom Capital Inc., a
Connecticut corporation, Omnicom Finance Plc, a corporation
organized under the laws of England and Wales, Omnicom Group
Inc., a New York corporation, the banks, financial
institutions and other institutional lenders and initial
issuing banks listed on the signature pages of the Agreement,
Citigroup Global Markets Inc. and J.P. Morgan Securities Inc.,
as lead arrangers and book managers, ABN Amro Bank N.V., as
syndication agent, JPMorgan Chase Bank, N.A. and HSBC Bank
USA, N.A., as documentation agents, and Citibank, N.A., as
administrative agent for the lenders.
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