omnicom group employee stock purchase plan (espp)
TRANSCRIPT
Omnicom Group Employee Stock Purchase Plan (ESPP)
What is the Omnicom Group ESPP?
An employee benefit program that permits eligible employees of participating Omnicom Group companies to buy shares of Omnicom common stock at a discount through payroll deductions.
Plan Overview
The ESPP is an IRS qualified plan under Section 423Computershare is the plan administratorEmployee Contributions
1% - 10% of covered comp Deductions are after-tax
Stock is purchased as of the end of each plan quarter5% discountDividend reinvestment
Who is Eligible to Participate?
Full-time employees of participating Omnicom Group companies
You must have six months of continuous employment before you can enroll in the plan
Can Part-time Employees Contribute?
Part-time employees may be eligible to participate
Part-time employees must have six months of continuous employment at a participating company, and also must customarily work:
more than 20 hours each week and,more than five months each year
Moving between agencies
If you move from one participating company to another participating company:
your contributions will generally be carried over to the new companyyour continuous service counts for eligibility
Rehires
Employees rehired within 12 months can enroll at the start of the next plan quarter if the service requirement was previously met
prior service at other participating Omnicom companies counts toward eligibility
Employees rehired after a one year absence must meet the six months eligibility requirement again before they can enroll
Enrollment
You may elect to enroll at the start of the plan quarter after meeting the eligibility requirement
You must complete the Enrollment Form and the W-9 Form
Both forms should be returned to your company’s HR/Benefits departmentFor the June 1, 2015 enrollment, forms must be returned by Friday, May 29th
Enrollment, continued
Be sure to:Complete all information requested on the formsSign in all places indicatedRead and retain the Terms and Conditions for your recordsKeep a copy of the forms for your records
Plan Quarters
Plan quarters differ from calendar quarters and are:
September 1 to November 30 December 1 to February 28 March 1 to May 31 June 1 to August 31
ESPP Contributions
You decide on the percentage you would like to invest
You can elect to contribute from 1% to 10% of your eligible pay
must be in increments of 1%
IRS maximum employee contribution is $23,750 for each calendar year (which is $25,000 less the 5% discount)
ESPP Contributions, continued
Contributions are deducted each pay period
The deduction amount is your elected percentage times your gross regular earnings each pay period
But, the amount is deducted after taxes from your net pay
If your gross pay is $2,500 each pay period, and, you elect 7% ($175.00), then your net take-home pay is:
$2,500 less your pre-tax deductions (401k, medical, flex spending, etc.), less your taxes (Federal, State, FICA, etc.), less any voluntary after-tax deductions and then less your $175 ESPP contribution
ESPP Eligible Pay
Eligible pay is regular pay only
It does not include:
OvertimeBonusesFringe benefitsDeferred and other special compensation
ESPP Contribution Changes
You may change your contribution percent at the start of any plan quarter by submitting an ESPP Change FormThe percent cannot be changed during a plan quarterBut, you may elect to stop participating:
during the quarter and receive a refund of your current quarter’s contributions, orat the start of the next plan quarter
Stock Purchases
Your contributions buy whole and fractional shares of Omnicom Group Inc. common stock
Stock is allocated to your account after the end of each plan quarter
The symbol for Omnicom Group Inc. common stock is “OMC” and the stock is traded on the New York Stock Exchange
The Discount
ESPP participants purchase Omnicom stock at 95% of the fair market value
a 5% discount
The purchase date is the last business day of each plan quarterThe fair market value is the average of the high and low market prices of Omnicom stock on the purchase date
How the Discount Works
Example:
$1,050 will purchase 15 shares of stock if the fair market value is $70 a share.
But, the ESPP will discount the purchase price to $66.50 and the $1,050 contribution will allow you to purchase 15.789474 shares.
Dividends
Dividends are automatically reinvested to purchase more shares of OMC
shares are purchased at current market priceshares purchased with dividends are not discounted, but Omnicom pays the purchase fees
You may elect instead to receive a check for dividends
Participant Accounts
Individual accounts are established at the time of the first stock purchase allocation
This means that new plan participants who join for the June 1st plan quarter will not have an ESPP account until after the August 31, 2015 allocation
Your account will hold full and fractional shares of OMCYour account value changes daily as the OMC stock price changes
Participant Statements
Quarterly statements are mailed by Computershare to your home address, or you may elect to receive electronic communications by signing up through the Computershare website
statements are issued after the end of each calendar quarter (not plan quarter)
Statements report all activity during the quarter such as purchases, dividends and salesStatements also contain important tax information
How to Follow Your Investment
Computershare’s Internet site located at: www-us.computershare.com/employee Toll-free number 1-800-527-0573Participant Statements
Omnicom’s Internet site located at: www.omnicomgroup.comShareholder information
* Keep your statements for cost basis information and tax reporting purposes. There is a fee if you request replacement copies.
Quarterly Statements* Annual Year-End Summary Statement Tax Reporting Statements
Accessing Your Account
After your account is established, you will receive information from Computershare mailed to your home addressThis will include your assigned Personal Identification Number (PIN)
you may change your PIN at any time, and are encouraged to change your assigned PIN to one that is familiar to youyour PIN provides you with secure access to your account balance
Internet Site
Log on at https://www-us.computershare.com/employee
Enter the company code (OMC) or the company name (Omnicom) where indicatedUnder Choose User ID, select SSN
Enter your SSN as your User IDEnter your PIN the first time you log on to the website, you will be prompted
to change your PIN
Click on Login to view your account
IVR phone number is 1-800-527-0573Automated IVR available virtually 24 hours a day, 7 days a week. Registered Customer Service Representatives available 8am - 7pm (Eastern) weekdays to:
Execute sale ordersRequest a new PINAssist with other inquiries
Interactive Voice Response (IVR) System
ESPP Fees
Omnicom pays all fees for stock purchased under the ESPP (i.e., through payroll deductions)Omnicom pays all fees for dividends reinvested under the ESPPYou pay fees when shares are sold
$0.10 per share$40 minimum fee
You pay a $30 fee if you request your shares be transferred to your brokerage account
Selling Stock
Once shares are allocated, you may decide to sell the stock at any time
But, there are tax issues to consider when making the decision to sell stock acquired through the ESPP
Sell shares through the website or IVR:You can request a Customer Service Representative through the IVR
Stock is real-time tradedRemember, you pay fees for sales
Tax Considerations
Dividends are taxed as ordinary income in the year received
even if dividends are reinvested
Early disposition of stockSelling stock within two years of purchase
Ordinary IncomeFor shares held under 2 years: the amount of the discount is ordinary incomeFor shares held over 2 years: the ordinary income portion depends on the sale price
Cost basis of sharesPurchase price plus amount taxed as ordinary income
Omnicom Group Inc.2006 – 2015 High and Low Prices
Adjusted for June 2007 stock split
$20
$30
$40
$50
$60
$70
$80
$90
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Year High
Year Low
Omnicom Group Inc. Jan 2011 – April 2015 Month-end Stock Prices
$30
$40
$50
$60
$70
$80
$90
Jan
-20
11
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r-20
11
Jul-
2011
Oct
-20
11
Jan
-20
12
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r-20
12
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2012
Oct
-20
12
Jan
-20
13
Ap
r-20
13
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2013
Oct
-20
13
Jan
-20
14
Ap
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14
Jul-
2014
Oct
-20
14
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15
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Stock Price
Omnicom Group Inc.Jan 2, 2014 – May 12, 2015 Daily Stock Prices
$60
$65
$70
$75
$80
$85
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Stock Price
Why Buy Stock through the ESPP?
Opportunity to be an owner of the company
Convenient, systematic approach to investing
Ability to purchase Omnicom Group Inc. stock at a 5% discount from fair market value
Omnicom will pay all fees for purchasing stock through payroll deductions
Full and fractional share purchases
Automatic dividend reinvestment available