-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BUOK/7FOx3sV+vbw7cej5yLkeFMz8itOu7Q5P7WRrRakQukmqIkEvNOv5qHzqwum c9HcoMpnOrmFPpqW8DiAIg== 0000950172-97-000117.txt : 19970222 0000950172-97-000117.hdr.sgml : 19970222 ACCESSION NUMBER: 0000950172-97-000117 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19970212 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: GREY ADVERTISING INC /DE/ CENTRAL INDEX KEY: 0000043952 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ADVERTISING AGENCIES [7311] IRS NUMBER: 130802840 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-06825 FILM NUMBER: 97525299 BUSINESS ADDRESS: STREET 1: 777 THIRD AVE CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2125462000 MAIL ADDRESS: STREET 1: 777 THIRD AVE STREET 2: 777 THIRD AVE CITY: NEW YORK STATE: NY ZIP: 10017 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MEYER EDWARD H CENTRAL INDEX KEY: 0000904458 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: C/O GREY ADVERTISING INC STREET 2: 777 THIRD AVENUE CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2125462656 MAIL ADDRESS: STREET 1: C/O SKADDEN ARPS SLATE MEAGHER STREET 2: 919 THIRD AVENUE CITY: NEW YORK STATE: NY ZIP: 10022 SC 13D/A 1 SCHEDULE 13D AMENDMENT NO. 10 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D (Rule 13d-101) Under the Securities Exchange Act of 1934 (Amendment No. 10) GREY ADVERTISING INC. _____________________________________________________________ (Name of Issuer) Common Stock, par value $1 per share Limited Duration Class B Common Stock, par value $1 per share _____________________________________________________________ (Title of Class and Securities) 397838 10 3 397838 20 2 ____________________________________________________________ (CUSIP Number of Class of Securities) Edward H. Meyer c/o Grey Advertising Inc. 777 Third Avenue, New York, NY 10017 (212)546-2000 _____________________________________________________________ (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) Copy to: David J. Friedman, Esq. Skadden, Arps, Slate, Meagher & Flom 919 Third Avenue New York, New York 10022 (212) 735-3000 November 26, 1996 ____________________________________________________________ (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Statement because of Rule 13d-1(b)(3) or (4), check the following: ( ) SCHEDULE 13D CUSIP No. 397838 10 3 (Common Stock) _________________________________________________________________ (1) NAMES OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS Edward H. Meyer (2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) ( ) (b) (x) (3) SEC USE ONLY _________________________________________________________________ (4) SOURCE OF FUNDS PF; OO _________________________________________________________________ (5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) __________________________________________________________________ (6) CITIZENSHIP OR PLACE OF ORGANIZATION U.S.A. _________________________________________________________________ (7) SOLE VOTING POWER NUMBER OF SHARES 104,553 shares BENEFICIALLY 63,891 shares (voting power by Mr. OWNED BY EACH Meyer as Trustee; beneficial REPORTING ownership disclaimed) PERSON WITH 25,446 shares (issuable upon conversion of debentures) 46,666 shares (issuable upon exercise of exercisable stock options) ___________________________________________________________________ (8) SHARED VOTING POWER 50,136 shares held in Employee Stock Ownership Plan ___________________________________________ (9) SOLE DISPOSITIVE POWER 104,553 shares 25,446 shares (issuable upon conversion of debentures) 46,666 shares (issuable upon exercise of exercisable stock options) ____________________________________________ (10) SHARED DISPOSITIVE POWER None _________________________________________________________________ (11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 104,553 shares 25,446 shares (issuable upon conversion of debentures) 46,666 shares (issuable upon exercise of exercisable stock options) _________________________________________________________________ (12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES (x) __________________________________________________________________ (13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 11.8% (18.4%, including the 25,446 shares and 46,666 shares issuable upon conversion of debentures and exercise of options, respectively) ___________________________________________________________________ (14) TYPE OF REPORTING PERSON IN SCHEDULE 13D CUSIP No. 397838 20 2 (Class B Stock) _________________________________________________________________ (1) NAMES OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS Edward H. Meyer _________________________________________________________________ (2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) ( ) (b) (x) _________________________________________________________________ (3) SEC USE ONLY _________________________________________________________________ (4) SOURCE OF FUNDS PF; OO _________________________________________________________________ (5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) __________________________________________________________________ (6) CITIZENSHIP OR PLACE OF ORGANIZATION U.S.A. _________________________________________________________________ (7) SOLE VOTING POWER NUMBER OF SHARES 110,053 shares BENEFICIALLY 63,732 shares (voting power by Mr. OWNED BY EACH Meyer as Trustee; beneficial REPORTING ownership disclaimed) PERSON WITH 25,446 shares (issuable upon conversion of debentures) ___________________________________________ (8) SHARED VOTING POWER 56,944 shares held in Employee Stock Ownership Plan ___________________________________________ (9) SOLE DISPOSITIVE POWER 110,053 shares 25,446 shares (issuable upon conversion of debentures) ____________________________________________ (10) SHARED DISPOSITIVE POWER None _________________________________________________________________ (11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 110,053 shares 25,446 shares (issuable upon conversion of debentures) _________________________________________________________________ (12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES (X) _________________________________________________________________ (13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 37.4% (42.4%, including the 25,446 shares issuable upon conversion of debentures) _________________________________________________________________ (14) TYPE OF REPORTING PERSON IN _________________________________________________________________ SCHEDULE 13D ITEM 1. SECURITY AND ISSUER. This Amendment No. 10 hereby amends and supple- ments the Statement on Schedule 13D, as amended, filed by Edward H. Meyer. This filing relates to the shares of Common Stock, par value $1 per share ("Common Stock") and to the shares of Limited Duration Class B Common Stock, par value $1 per share ("Class B Stock") (the Common Stock and Class B Stock being hereinafter collectively referred to as the "Shares") of Grey Advertising Inc., a Delaware corpora- tion (the "Company" or "Grey"). The Company has its princi- pal executive offices at 777 Third Avenue, New York, New York 10017. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. The last paragraph of Item 3 is amended and restated to read as follows: The 1995 and 1996 Options, each more fully de- scribed in Item 6 below, were granted to Mr. Meyer without cash consideration. ITEM 4. PURPOSE OF TRANSACTION. The second paragraph of Item 4 is amended and restated to read as follows: Mr. Meyer may acquire additional shares of Common Stock by exercising the 1995 Option (as defined in Item 6 below), and/or by exercising the 1996 Option (as defined in Item 6 below). In addition, Mr. Meyer may elect to purchase additional Shares or sell any Shares held at any time sub- ject to applicable law. Any such determination may be based on a number of factors, including the continued employment of Mr. Meyer by the Company, the price and availability of shares, subsequent developments affecting the Company, the Company's business and prospects, general stock market and economic conditions and other similar factors. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. The first two paragraphs of Item 5 are deleted and replaced with the following three paragraphs: As of January 1, 1997, Mr. Meyer beneficially owns 129,999 shares of Common Stock (including 25,446 shares that are issuable upon conversion of Mr. Meyer's holdings of $3,025,000 principal amount of the Company's 8 1/2% Convert- ible Subordinated Debentures Due December 31, 2003 (the "Debentures")) and 135,499 shares of Class B Stock (includ- ing 25,446 shares that are issuable upon conversion of the Debentures), representing approximately 14.2% and 42.4%, respectively, of the Common Stock and Class B Stock out- standing, assuming such additional shares were outstanding.* In addition, as more fully described in Item 6 below, Mr. Meyer has been granted two issuances of options _____________________ * Based on 888,108 shares of Common Stock and 294,107 shares of Class B Stock outstanding as of January 1, 1997. to purchase shares of Common Stock. On February 21, 1995, the Company finalized the documentation relating to the issuance to Mr. Meyer of the 1995 Option (as defined in Item 6) to purchase 40,000 shares of Common Stock effective as of January 5, 1995. The 1995 Option, by its terms, became exercisable as to 13,333 shares as of the 1995 Effective Date (as defined in Item 6), as to an additional 13,333 shares as of the first anniversary of the 1995 Effective Date and as to the final 13,334 shares as of the second anniversary of the 1995 Effective Date. On November 26, 1996, the Company granted Mr. Meyer the 1996 Option (as defined in Item 6) to purchase 20,000 shares of Common Stock. The 1996 Option, by its terms, became exercisable as to 6,666 shares as of the 1996 Effective Date (as defined in Item 6). The 1996 Option will become exercisable for 6,667 additional shares of Common Stock on the first anniversary and 6,667 additional shares of Common Stock on the second anniversary of the 1996 Effective Date. Assuming the exercise of the 1995 Option in whole (including the final trenche of the 1995 Option which vested on January 5, 1997) and of the 1996 Option with respect to the 6,666 shares presently exercisable, Mr. Meyer would beneficially own 176,665 shares of Common Stock (including the 25,446 shares that are exercisable upon conversion of the Debentures, as described above), representing 18.4% of the outstanding Common Stock, (assuming the shares exercis- able upon conversion of the Debentures and exercise of the Options were outstanding for the purposes of the calcula- tion). The last paragraph of Item 5 is amended and restated to read as follows: The aggregate number of shares of Common Stock, Class B Stock, and Preferred Stock held by Mr. Meyer (in- cluding the shares issuable upon the exercise of the 1995 Option (including the final trenche of the 1995 Option which vested on January 5, 1997), the 1996 Option, to the extent it is presently exercisable, and conversion of the Deben- tures), the Common Stock and Class B Stock held by the Voting Trust with respect to Beneficiaries other than Mr. Meyer and the Common Stock and Class B Stock held by the ESOP in the aggregate represents 71.0% of the votes entitled to be cast at a meeting of stockholders of the Company, assuming that the shares issuable upon exercise of the Options and conversion of the Debentures were outstanding for purposes of the calculation. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS AND RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. The last two paragraphs of Item 6 are deleted and replaced with the following three paragraphs: On February 21, 1995, the Company finalized the documentation relating to a Stock Option Agreement, effec- tive as of January 5, 1995 (the "1995 Effective Date") between the Company and Mr. Meyer (the "1995 Option Agree- ment"), granting to Mr Meyer 40,000 shares of Common Stock pursuant to the Company's 1994 Stock Incentive Plan (the "Plan"). The 1995 Option became exercisable as to 13,333 shares as of the 1995 Effective Date, became exercisable as to a further 13,333 shares on January 5, 1996 and became exercisable as to the remaining 13,334 shares on January 5, 1997. The 1995 Option expires on January 5, 2004. The number of shares subject to the 1995 Option and/or the exercise price are subject to adjustment upon the occurrence of certain events such as stock dividends, recapitalizations resulting in stock splits or combinations or exchanges in respect of the Common Stock. The Company and Mr. Meyer entered into a Stock Option Agreement (the "1996 Option Agreement", attached hereto as Exhibit 15), effective as of November 26, 1996, the ("1996 Effective Date"), granting to Mr. Meyer an option (the "1996 Option") to purchase 20,000 shares of Common Stock pursuant to the Plan. The 1996 Option became exercis- able as to 6,666 shares as of the 1996 Effective Date and will become exercisable as to the remaining shares in sub- stantially equal installments on November 26, 1997 and November 26, 1998. The 1996 Option expires on November 26, 2005. The number of shares subject to the 1996 Option and/or the exercise price are subject to adjustment upon the occurrence of certain events such as stock dividends, recapitalizations resulting in stock splits or combinations or exchanges in respect of the Common Stock. The foregoing is a summary description only and is qualified in its entirety by reference to the 1995 Option Agreement and the 1996 Option Agreement and the complete text of the Plan. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. Item 7 is amended to include the following: Exhibit 15 . . . Stock Option Agreement, effective as of November 26, 1996, by and between the Company and Edward H. Meyer. SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: February 11, 1997. /s/ Edward H. Meyer EDWARD H. MEYER INDEX TO EXHIBITS Exhibit No. Exhibit Page Number 15 Stock Option Agreement, N/A effective as of November 26, 1996, by and between the Company and Edward H. Meyer. EX-99 2 EXHIBIT 15 - STOCK OPTION AGREEMENT EXHIBIT 15 GREY ADVERTISING INC. STOCK OPTION AGREEMENT AGREEMENT, dated as of November 26, 1996, by and between GREY ADVERTISING INC., a Delaware corporation ("Company"), and EDWARD H. MEYER, residing at 580 Park Avenue, New York, N.Y. 10021 (such individual or, as the context requires, his/her guardian, legal representative, estate or other person to whom the rights hereunder may be transferred by will or by the laws of descent and distribution, being hereinafter referred to as the "Optionee"). Pursuant to the Grey Advertising Inc. 1994 Stock Incentive Plan ("Plan"), the Board of Directors, or a committee thereof, of the Company ("Board") has granted the Optionee, on the terms and conditions set forth herein, an option to purchase 20,000 shares of the Company's common stock, par value $1 per share ("Common Stock"). The Plan is hereby incorporated by reference and made a part hereof, and this Agreement shall be subject to all terms and conditions thereof. NOW THEREFORE, the Company and the Optionee hereby agree as follows: 1. Grant of Option. (a) Number of Shares and Option Price. In accordance with the allotment made by the Committee and subject to the terms and conditions hereof, the Company grants, as of the date hereof, to the Optionee a non-qualified option to purchase ("Option") an aggregate of 20,000 shares of Common Stock ("Option Shares") at an option exercise price of $235.00 per share, which price is subject to adjustment in accordance with Section 4 of this Agreement. The option price, as adjusted from time to time, is hereinafter referred to as the "Option Price". (b) Term of Option; Conditions and Manner of Exercise. (i) The term of the Option and of this Agreement shall commence as of the date hereof ("Date of Grant") and, unless earlier terminated as provided in this Agreement, shall terminate upon the expiration of nine years from the Date of Grant. Upon the termination of the Option, all rights of the Optionee hereunder shall cease. (ii) The Option, subject to the following provisions of this paragraph, shall become exercisable in cumulative installments as follows: one-third of the shares subject to the Option from and after the Date of Grant; one-third of the shares subject to the Option from and after the first anniversary of the Date of Grant; and one-third of the shares subject to the Option from and after the second anniversary of the Date of Grant; provided, however, that the Option may be exercised only to purchase whole shares, and in no case may a fraction of a share be purchased. The right of the Optionee to purchase Option Shares with respect to which the Option has become exercisable as herein provided may be exercised in whole or in part at any time or from time to time prior to the ninth anniversary of the Date of Grant. (iii) The Option (or any portion thereof) shall be exercised in the following manner: the Optionee shall deliver to the Company written notice of the exercise of the Option (or any portion thereof) in a form satisfactory to the Board, specifying the number of Option Shares subject to the Option which the Optionee elects to purchase, together with full payment of the Option Price (w) in cash, (x) by delivery of a check payable to the order of the Company, (y) in shares of Common Stock with a fair market value equal to the Option Price or portion thereof being paid with shares (provided, in each instance, that such shares of Common Stock were owned by the Optionee for at least six months prior to the exercise of the Option, unless such requirement is waived by the Board), or (z) a combination thereof. The Company shall thereafter cause certificates representing the Option Shares purchased to be delivered as promptly as practicable, provided that the Optionee shall pay to the Company at the time of exercise, or shall otherwise make arrangements satisfactory to the Company regarding payment of, any additional amount, if any, as the Company deems necessary to satisfy the Company's liability to withhold Federal, state or local income or other taxes incurred by the Company or the employer of the Optionee by reason of the exercise of the Option, or any portion thereof, or the transfer of the Option Shares thereupon. If requested by the Company, the Optionee shall also deliver this Agreement to the Secretary of the Company who shall endorse hereon a notation of such exercise and return this Agreement to the Optionee. The date of exercise of an Option that is validly exercised shall be deemed to be the date on which there shall have been delivered to the Company the instruments and payments referred to in the first sentence of this paragraph (iii), provided that the Optionee has satisfied or thereafter satisfies the other requirements of this paragraph (iii). The Optionee shall be deemed to be the holder of the Option Shares issued pursuant to the exercise of the Option as of the date of exercise. (iv) For the purposes of the preceding paragraph (iii), "fair market value" per share of Common Stock, as of a particular date, shall mean (x) the closing sales price per share of Common Stock reported on NASDAQ or, if the shares are not so reported, on the system or exchange on which the trading prices of the shares are then reported or traded, (y) if there is no reported closing sales prices per share on such date, the average of the closing bid and asked prices for the shares on such date as reported by NASDAQ or such other system, or (z) if the shares of Common Stock are not then quoted by NASDAQ (or such other system) or traded on one of the exchanges, such value as the Board, in its sole discretion, shall determine. 2. Termination of Employment. (a) Except as provided in this Section 2, Options may not be exercised after the Optionee has ceased to be employed by the Company or a subsidiary of the Company. (b) If the Optionee's employment by the Company or a subsidiary of the Company should terminate for any reason other than death, disability (as defined in subparagraph (c) below) or cause (as such term is defined in the Optionee's employment agreement with the Company), the Option may be exercised, to the extent the Optionee was entitled to exercise the Option on the date employment was terminated, at any time within one year after such date, but in no event later than nine years from the Date of Grant. (c) If the Optionee's employment by the Company or a subsidiary of the Company should terminate by reason of the Optionee's death or disability (within the meaning of Section 105(d)(4) of the Internal Revenue Code of 1954, as amended), the Option may be exercised, in its entirety at any time within one year after such date, but in no event later than nine years from the Date of Grant. 3. Non-transferability. The Option granted hereunder shall not be transferable other than by will or by the laws of descent and distribution, and may be exercised, during the lifetime of the Optionee, only by the Optionee or by his guardian or legal representative. 4. Effect of Certain Changes. (a) If there is any change in the aggregate number of issued and outstanding shares of the Common Stock and Company's Limited Duration Class B Common Stock, par value $1 per share ("Class B Stock"; the Common Stock and the Class B Stock are collectively referred to herein as the "Common Equity") through the declaration of stock dividends, or through a recapitalization resulting in stock splits, or combinations or exchanges of such shares, the number of Option Shares and the Option Price per share shall be proportionately adjusted by the Board to reflect any increase or decrease in the number of issued shares of Common Equity; provided, however, that any fractional shares resulting from such adjustment shall be eliminated. (b) In the event of a proposed dissolution or liquidation of the Company, or in the event of any corporate separation or division, including, but not limited to, a split-up, split-off or spin-off, the Board, in its sole discretion, may provide (i) that the Optionee shall have the right to exercise the Option, to the extent then exercisable, solely for the kind and amount of shares of stock and other securities, property, cash or any combination thereof receivable upon such dissolution, liquidation, or corporate separation or division by a holder of the number of shares of Common Stock for which the Option might have been exercised immediately prior to such dissolution, liquidation, or corporate separation or division, or (ii) that the Option shall terminate as of a date to be fixed by the Board, provided however, that not less than twenty days' prior written notice of the date so fixed shall be given to the Optionee, who shall have the right, during the period of twenty days preceding such termination, to exercise the Option as to all or any part of the Option Shares covered thereby, including shares as to which the Option would not otherwise be exercisable, or (iii) for an equitable adjustment in the Option Price. (c) The Board shall, in its sole discretion, in the case of a merger or consolidation in which the Company is not the surviving corporation (i) promptly make an appropriate adjustment to the number and class of shares of Common Stock available pursuant to the Option, to the amount and kind of shares or other securities or property receivable upon the exercise of the Option after the effective date of any such transaction, and/or to the Option Price, or (ii) provide for the cancellation of the Option, or any portion thereof then outstanding, in consideration for a cash payment equal to the product of (x) the difference between the Option Price and the fair market value of the consideration per share received or receivable by holders of Common Equity in any such transaction multiplied by (y) the number of Option Shares then subject to the Option. (d) Paragraphs (b) and (c) of this Section 4 shall not apply to a merger or consolidation in which the Company is the surviving corporation and pursuant to which shares of Common Stock are not converted into or exchanged for stock or securities of any other corporation, cash or any other thing of value. In case of any consolidation or merger of another corporation into the Company in which the Company is the surviving corporation and in which there is a reclassification or change (including a change in the right to receive cash or other property) of the shares of Common Stock (other than a change in par value, or from par value to no par value, or as a result of a subdivision or combination, but including any change in such shares into two or more classes or series of shares), the Board may, in its sole discretion (i) make an appropriate adjustment to the number and class of shares of Common Stock available pursuant to the Option, to the amount and kind of shares or other securities or property receivable upon the exercise of the Option after the effective date of any such transaction, and/or to the Option Price or (ii) provide for the cancellation of the Option, or any portion thereof then outstanding, in consideration for a cash payment equal to the product of (x) the difference between the Option Price and the fair market value of the consideration per share received or receivable by holders of Common Equity in any such transaction multiplied by (y) the number of Option Shares then subject to the Option. (e) In the event of a change in the Common Stock of the Company as presently constituted, which is limited to a change of all of its authorized shares with par value into the same number of shares with a different par value or without par value, the shares resulting from any such change shall be deemed to be the Common Stock within the meaning of the Plan. (f) To the extent that the foregoing adjustments relate to stock or securities of the Company, such adjustments shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. (g) Except as otherwise expressly provided in this Agreement or in the Plan, the Optionee shall have no rights by reason of any subdivision or consolidation of shares of stock of any class or the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class or by reason of any dissolution, liquidation, merger or consolidation or spin-off of assets or stock of another corporation, and any issue by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Option Shares. The grant of the Option does not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structures or to merge or to consolidate or to dissolve, liquidate or sell, or transfer all or part of its business or assets. 5. Restrictions upon Option Shares. (a) The Optionee, as a condition to the exercise of the Option, by exercising the Option, or any portion thereof, warrants, effective as of the date of exercise, but only to the extent the Option Shares are not being issued pursuant to an effective registration statement on Form S-8 (or any successor form), that (i) the Option Shares are being acquired for investment, for the Optionee's own account, and not with a view to the distribution or resale thereof in violation of the Securities Act of 1933, as amended ("1933 Act"), and (ii) he/she will not sell or transfer any of such shares unless and until (A) a registration statement under the 1933 Act is then in effect covering such shares and the purchaser or transferee thereof has been furnished with a prospectus which complies with the provisions of the 1933 Act, or (B) in the opinion of counsel for the Company, registration under the 1933 Act is not required in connection with the sale or transfer. (b) The Option shall not be exercisable if its exercise would violate any applicable state securities law, any registration provisions or other requirements of the 1933 Act, the Securities Exchange Act of 1934, as amended (or any rules or regulations promulgated under either of such Acts), or any other applicable law, ordinance, rule or regulation. In connection with the foregoing, the Company shall not be obligated to prepare and file (or cause to be prepared and filed), nor take any action to cause to become effective, any registration statement required by applicable law with respect to the issuance of the Option Shares subject to the Option, or any portion thereof, or upon exercise thereof, nor shall the Company be obligated to seek an exemption from any such registration statement requirement. (c) The Company may in its discretion place an appropriate legend or notation on the certificates representing Option Shares issued upon exercise of the Option, or any portion thereof. (d) The Company may instruct any transfer agent for its Common Equity not to transfer any of the Option Shares unless advised by the Company that the provisions of the Plan and this Agreement have been complied with. (e) The Optionee agrees to take any other action which may reasonably be requested by the Company in order to ensure that the Company, by allowing the Optionee to exercise the Option (in whole or in part), will not be in violation of any law or regulation. 6. Agreement Not to Compete. Anything in the Plan or the Agreement to the contrary notwithstanding, if the Optionee, without the written consent of the Company, engages either directly or indirectly, in any manner or capacity, as principal, agent, partner, officer, director, employee or otherwise, in any business or activity competitive with the business conducted by the Company or any subsidiary of the Company, the Option, to the extent not previously exercised, shall expire forthwith. 7. No Employment Agreement. This Agreement shall not be deemed or construed to be an agreement by the Company to employ the Optionee for any specific or non-specific period of time. 8. Notices. Any notice required or permitted under this Agreement shall be deemed given when delivered personally, or when deposited in the United States postal system, postage prepaid, addressed, as appropriate, to Optionee either at his address hereinabove set forth or such other address as he may designate in writing to the Company, or to the Company, at Grey Advertising Inc., 777 Third Avenue, New York, New York 10017, Attention: Corporate Secretary; or such other address as the Company may designate in writing to the Optionee. 9. Failure to Enforce Not a Waiver. The failure of the Company to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof. 10. Governing Law. This Agreement shall be governed by and construed according to the laws of the State of Delaware, without regard to the conflicts of law rules thereof. 11. Amendments. This Agreement may be amended or modified at any time by an instrument in writing signed by the parties hereto, provided that no such amendment or modification shall be made which would be inconsistent with the terms of the Plan. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year above written. GREY ADVERTISING INC. By /s/ Steven G. Felscher Executive Vice President /s/ Edward H. Meyer EDWARD H. MEYER -----END PRIVACY-ENHANCED MESSAGE-----