WPP Worldwide Ownership Plan Owner s Guide

Transcription

1 WPP Worldwide Ownership Plan Owner s Guide

2 Contents About WPP 1 Letter from the Group Chief Executive 2 About the Plan 3 Participating in the Plan 4 Your questions answered 5-6 Tracking your stock options 7 Administration and contacts 7 Introduction This guide is for all those participating in the WPP Worldwide Ownership Plan. It explains the main points of the Plan. A separate guide providing full details of the choices you have when your option becomes exercisable is available from the Plan website (see below). Throughout this guide, we use the words stock, stock options and share owners. You may be more familiar with the words share, share options and stockholders. The words have the same meaning. Warning for participants in Hong Kong: The contents of this document have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the option. If you are in any doubt about the contents of this document, you should obtain independent professional advice. Key points of the Plan > You are eligible to participate in the Plan if you work for a company wholly owned by WPP, have at least two years service and do not already participate in the WPP Leaders, Partners or High Potential programs. > The Plan is a stock option plan that gives you the right to buy WPP stock at a fixed price. > You hold the stock option for three years. At the end of the three-year period, if the WPP stock price has risen, you can choose whether to keep your stock option or to buy WPP stock at the fixed price. > You will receive a stock option grant every year, provided you remain eligible to participate in the Plan. > Your stock option becomes exercisable three years after the date it was granted and can be exercised during the following seven years if you remain with the WPP Group, and unless there is a country-specific curtailment of the Plan. The Worldwide Ownership Plan online The Worldwide Ownership Plan has a dedicated site on the WPP Group intranet containing important information and useful data for Plan participants. This user-friendly website enables you to review and manage your stock option portfolio online at any time. You can download option certificates and statements, find FAQs, check the exercise timetable and your exercise information, and calculate theoretical option values. You may also receive important requests and reminders from your Plan Manager relating to the administration of the Plan. Go to inside.wpp.com/compensation and follow the link to Worldwide Ownership Plan.

3 About WPP WPP is the world s largest communications services group, comprising over 150 companies, each with its own distinctive brand. Collectively, the Group has over 175,000* people working in 3,000 offices in 110 countries, and serves clients worldwide, including more than 350 of the Fortune Global 500. *Including associates WPP Worldwide Ownership Plan Owner s Guide 1

4 Dear Colleague I m pleased to welcome you as a participant in WPP s Worldwide Ownership Plan. WPP is the only major company of its kind to extend stock options to all our people worldwide. We do so for two very simple reasons. First, it brings home to us the realities of ownership: not just rewards but also the responsibilities. And, secondly, it encourages people, whenever it is in the clear interests of our clients, to work in partnership across the Group. Since everyone in the Group is a potential share owner, the continued achievement of these aims will ensure that everyone continues to benefit. We earn our living by adding value to our clients businesses: by applying to them the talent and imagination of our people. Although the Plan will become part of your total pay package, its primary purpose does not relate to pay and does not replace existing pay arrangements. The main purpose of the Plan is to provide the benefits of ownership and the opportunity to share in our collective success. Sir Martin Sorrell Group Chief Executive 2 WPP Worldwide Ownership Plan Owner s Guide

5 About the Plan The WPP Worldwide Ownership Plan The Worldwide Ownership Plan is a stock option plan. It offers you a low-risk opportunity to have a stake in WPP by giving you the right to buy WPP stock at a fixed price. You can exercise that right to buy after three years if the WPP stock price has risen. Please note that a stock option plan is not a savings plan. WPP stock options have a value only if WPP performs well and the stock price rises. How a stock option plan can work Eligibility criteria You automatically qualify for a stock option grant in any year in which grants are made if: > You work for, and are on the payroll of, a company wholly owned by WPP and that is not currently in earn out. > You have at least two years service. > You are not eligible to receive awards under another WPP stock program (for example, the WPP Leader, WPP Partner and WPP High Potential programs). In each year that stock option grants are made, eligibility will be determined on 1 July of that year. Size of stock option grant The amount of the stock option granted each year will be at WPP s discretion. All participants in a WPP company in the same country will receive the same size of grant, regardless of position or pay level. However, the amount of stock granted to participants may vary between countries. Frequency of grant If you continue to meet the eligibility requirements, it is intended that you will receive a grant each year during the Plan s life. This gives you the opportunity to build your total amount of stock options, and exercise your stock options as and when you choose to, once they have vested. WPP Worldwide Ownership Plan Owner s Guide 3

6 Participating in the Plan Every year in which you meet the eligibility requirements, you may receive a grant of WPP stock at a fixed price based on the market value of WPP stock at the time the option is granted. Your local Plan Manager will notify you by about the amount of stock that has been granted to you. These grants give you the opportunity to buy the WPP stock but they cannot be exercised for three years. Plan timescale for first grant Date You are granted your stock option If the WPP stock price is lower than the stock option price fixed three years earlier, there is no benefit to be gained by exercising your stock option. You can, however, retain your stock option for a further seven years in anticipation of future increases in the market price, unless there is a country-specific curtailment of the Plan. Three years after the Grant Date, assuming you remain eligible, your stock option can be exercised if the stock price has risen. You have two choices: 1. Cashless stock sale You can exercise your stock options and then sell your stock in a transaction that will give you the sale proceeds in cash. The sale proceeds will consist of the difference between the fixed option price and the current market price. The broker s fee and local taxes will be deducted before you receive the sale proceeds. 2. Self-funded stock purchase You can invest your own money to buy the stock at the fixed option price and become a WPP share owner. You will be responsible for settling any local tax liability relating to the exercise process. When you have to decide You can exercise your stock option three years after it is granted. There are at least three exercise opportunities per year, at which time you have to make a decision. You can check the exercise timetable on the Plan website. As each exercise date approaches, your Plan Manager will notify you by . Going forward This is an annual plan and it is intended that you receive a stock option grant every year during the life of the Plan, providing that you remain eligible to participate. The diagram below shows how the grant and exercise process works over the long term. Date Date Date Date Date Date 4 WPP Worldwide Ownership Plan Owner s Guide

7 Your questions answered Am I eligible for the Plan? You become eligible if you work for a company wholly owned by WPP and have two years service as at 1 July of any year. To be eligible in 2011, for example, you would need to have joined the company before July You are not eligible if you are participating in any other WPP stock plans (such as the WPP Leader, Partner or High Potential Group programs), or a contract or freelance worker, or if your company is currently in earn out. When do I receive my options? Options are granted annually, usually during the fourth quarter of each year for every year in which you are eligible to receive a stock option. What if I am a member of the WPP Leader or WPP Partner or the High Potential Group? You will not be eligible to participate in the Plan. What size of stock option grant will I get? The amount of stock you may be granted will vary from year to year at the discretion of WPP. Will people with longer service or at a more senior level get a larger amount of stock? No, every eligible employee in a country will receive the same amount of stock. Will this cost me anything? There is no cost when the stock option is granted. Later on, if you decide to exercise your option and keep the WPP stock there will be associated costs, as described on page 4. Will I have to pay tax? You are likely to have to pay local taxes on any financial gain you make as a result of exercising your stock option and/or selling WPP stock. Your Plan Manager may be able to inform you of the tax situation. Can I use this Plan as a savings plan? No, this is a stock option plan and not a savings plan. What if I leave my company for medical reasons, or because I retire? You may exercise your stock options earlier, but your exercise period will be curtailed and the number of options that become exercisable may be pro-rated. If you leave for any other reason, including dismissal, you will normally lose the right to exercise any stock options you hold. What if I take maternity leave? During your maternity leave, you retain the right to exercise your stock options and they remain valid for the original exercise period. If you do not return to work, your options will lapse in accordance with the Rules of the Plan. Can I exercise my stock options at other times? Options may become exercisable on a takeover, reconstruction or winding up of WPP for a limited period after the event, varying from approximately six weeks to six months, failing which they will lapse. In the case of such an event, you receive full details in good time of whether, and if so, how, and when you may exercise your options. What if I transfer to another WPP company? You will still be able to exercise your stock options if you move within the WPP Group. This also applies if you transfer from one country to another. However, you will be granted stock options only if you are employed by a company that is wholly owned by WPP at the time of the grant. Important note: It is your responsibility to notify the Plan Managers in both your old company and new company so that they can amend their records accurately. If you do not, there is a possibility that you will be omitted from receiving the annual grant and your existing stock options will lapse. Does my prior service count? If you have worked in a company within the WPP Group that is not participating in the Plan (usually non-wholly owned companies), but subsequently move to a wholly-owned WPP company, you may be able to count your past service. Prior service with a company acquired by WPP will be counted towards the two-year eligibility criterion. What if I die in service? Your legal personal representatives will be entitled to exercise your stock options within the year following your death. After 12 months the options will lapse. Will I remain in the Plan regardless of my own or my company s performance? Yes, as long as you remain an employee of a WPP company and do not become eligible to receive stock under any other WPP stock plan. What if I don t want to participate in the Plan? If you are eligible, you are automatically entitled to participate in the Plan. However, you are under no obligation to exercise your stock options. Your rights and obligations under employment with any WPP Group company will not be affected by your participation in the Plan or any right which you may have to participate in it. The Plan and award you hold under it does not form part of any contract of employment between you and any WPP Group company. WPP Worldwide Ownership Plan Owner s Guide 5

8 Your questions answered continued What kind of stock will I receive? If you are resident in the Americas, you will receive WPP American Depository Shares (ADSs). One ADS is equivalent to five WPP ordinary shares. Residents of all other countries will receive ordinary (UK) shares. I already own some WPP stock will these stock options affect my existing holding? No. Can I buy more stock options? No, you cannot increase the size of any grant, but you are of course free to buy WPP stock in the market. How is the Plan administered? Every wholly-owned WPP company has one or more Plan Manager who administers the Plan at a local level. They keep participant data up to date, are responsible for keeping participants informed via , and manage the grant and exercise processes locally. Your Plan Manager should be your first point of contact if you have any comments or queries relating to the Plan that are not addressed on the Plan website. You can also manage many aspects of your stock options via the Plan website: go to inside.wpp.com/compensation and follow the link to Worldwide Ownership Plan. What do I do next? If you are eligible, you will receive an from your Plan Manager notifying you of the grant for every year the stock options are granted. If you move from one WPP company to another, you must notify the Plan Manager in both your previous and new company to ensure you remain in the Plan. You don t have to do anything else until the exercise date approaches, at which time you will be notified with full details of the choices open to you. 6 WPP Worldwide Ownership Plan Owner s Guide

9 Tracking your stock options As a holder of WPP stock options, you may want to follow the progress of WPP s stock price. The market price will change from day to day and can rise or fall in value. Small daily price changes are less important to a company s overall stock price performance; longer-term trends are what count. It is impossible to predict future market price performance. WPP stock trading WPP stock is traded on the following stock exchanges: > The London Stock Exchange, in UK sterling. > NASDAQ in New York, in US dollars in the form of American Depository Shares (ADSs). The formula for converting between these two stock types is: one ADS = five ordinary shares. You can find WPP s current stock price online, via the Check stock price function on the Plan website, and in the financial market section of newspapers that list WPP s stock exchanges. Calculating the value of your stock options The real value of your stock option can be calculated only when the option has vested and becomes exercisable, three years after the option was granted. Your stock option will have a value if the market price of the stock rises above the price fixed at the time of your option grant. To establish the nominal value of your option you can use the Quick Calc feature on the Plan website which can be accessed as follows: go to inside.wpp.com/compensation, follow the link to Worldwide Ownership Plan and then click on view your options. When assessing potential value, remember that you will need to factor in costs relating to the exercising of your option, such as the cost of purchasing the shares comprised in the option (number of shares x grant price), broker s fees and local taxes. Administration and contacts Company Plan Managers Every wholly-owned WPP company has at least one Plan Manager who administers the Plan at a local level. If you are unsure who this is, please ask your company financial manager. Your company Plan Manager should be able to answer any questions relating to eligibility and participation in the Plan. The WPP Worldwide Ownership Plan Manager is based at: WPP 27 Farm Street London W1J 5RJ United Kingdom Tel: +44 (0) Fax: +44 (0) The overall Plan is administered by: HWC Limited Channing House Eagle Way Sowton Exeter Devon EX2 7HY United Kingdom Tel: +44 (0) Online information Plan information, including translated documents and interactive services in key languages, is available on the Plan website. Go to inside.wpp.com/compensation and follow the link to Worldwide Ownership Plan. For all US recipients The stock options described in this guide are the subject of a prospectus covering securities that have been registered under the Securities Act of Please refer to the Prospectus for Worldwide Ownership Plan for more complete detail regarding the Plan. The prospectus can be viewed on the Plan website, which can be accessed via Please note This guide is intended to provide a reasonably thorough explanation of the WPP Worldwide Ownership Plan, using non-technical language where possible. If this document differs from the provisions set out in the WPP Worldwide Ownership Plan Rules, the Plan Rules will take precedence. Also, if your option was granted under part of the Plan relating to UK tax-advantaged options (and your option certificate will tell you this), if this document differs from the provisions set out in the relevant UK legislation, the UK legislation will take precedence. WPP plc 2014/6 Registered in Jersey, Number Registered Office: Queensway House Hilgrove Street St Helier Jersey JE1 1ES WPP Worldwide Ownership Plan Owner s Guide 7