<p style= text-align: justify; >According to the Company’s FORM 10-K for fiscal year ended December 31, 2007, on January 28, 2008, the court granted defendants’ motion in its entirety, dismissing all claims and directing the court to close the case. On February 4, 2008, the plaintiffs filed a notice of intent to appeal that decision to the United States Court of Appeals for the Second Circuit.</p> <p style= text-align: justify; >As summarized by the same SEC filing, beginning on June 13, 2002, several putative class actions were filed against us and certain senior executives in the United States District Court for the Southern District of New York. The actions have since been consolidated under the caption In re Omnicom Group Inc. Securities Litigation, No. 02-CV-4483 (RCC), on behalf of a proposed class of purchasers of our common stock between February 20, 2001 and June 11, 2002. The consolidated complaint alleges, among other things, that our public filings and other public statements during that period contained false and misleading statements or omitted to state material information relating to (1) our calculation of the organic growth component of period-to-period revenue growth, (2) our valuation of and accounting for certain internet investments made by our Communicade Group (“Communicade”), which we contributed to Seneca Investments LLC (“Seneca”) in 2001, and (3) the existence and amount of certain contingent future obligations in respect of acquisitions. The complaint seeks an unspecified amount of compensatory damages plus costs and attorneys’ fees. Defendants moved to dismiss the complaint and on March 28, 2005, the court dismissed portions (1) and (3) of the complaint detailed above. The court’s decision denying the defendants’ motion to dismiss the remainder of the complaint did not address the ultimate merits of the case, but only the sufficiency of the pleading. Defendants have answered the complaint. Discovery concluded in the second quarter of 2007. On April 30, 2007, the court granted plaintiff’s motion for class certification, certifying the class proposed by plaintiffs. In the third quarter of 2007 defendants filed a motion for summary judgment on plaintiff’s remaining claim.</p>
<p style= text-align: justify; >The original complaint alleges that Omnicom and certain of its officers and directors violated the federal securities laws. Specifically, the complaint alleges, among other things, that during the Class Period defendants reported that Omnicom was experiencing growth in its revenues and earnings, despite the overall economic slowdown and the worst decline in advertising revenue that the industry had ever experienced. Defendants attributed Omnicom’s growth to, for the most part, the numerous acquisitions made by the Company.</p>
<p style= text-align: justify; >During 2000 and 2001, Omnicom acquired 73 companies. Omnicom, however, failed to reveal that it strung out the payments on its acquisitions for years to come, yet immediately accounted for the revenue from the acquired companies, thereby pumping up the Omnicom’s organic growth rate. During the Class Period, the Company failed to disclose $250 to $350 million in liabilities created by having to make future payments on its acquisitions. Moreover, Omnicom accounted for “earn-out payments” (payments to the acquired companies) as acquisition expenses, rather than compensation, so that the amounts were not subtracted from the Company’s net income.</p>
<p style= text-align: justify; >The plaintiffs further allege that during the Class Period, Omnicom failed to disclose that under certain circumstances, it would be obligated to purchase certain companies in which it had invested. Thereby, Omnicom misrepresented its liabilities. Omnicom also failed to disclose that it transferred its holdings in several troubled internet companies to Seneca, a company it created, so that it would avoid writing down the losses on the investments. Omnicom’s consideration for the transfers was $280 million in Seneca stock, which constituted an overstatement of the value of the investments. As a result of Defendants’ false and misleading statements, Omnicom securities traded at artificially inflated levels during the class period.</p>
<p style= text-align: justify; >Background</p>
<p style= text-align: justify; >According to a law firms website on February 2, 2003, the Court appointed the New Orleans Employees’ Retirement System (“NORS”) as Lead Plaintiff and BLB&amp;G, NORS’ counsel, as Lead Counsel. NORS filed an Amended Consolidated Complaint on May 19, 2003. The Complaint alleges that Omnicom defrauded investors by failing to record significant losses and write-downs that it had suffered in connection with a number of its investments in internet services companies. Specifically, in the mid to late 1990’s, Omnicom made significant investments in internet services companies hoping to benefit from the dot-com craze. When the internet market collapsed in mid-2000, however, those investments became essentially worthless.</p>
<p style= text-align: justify; >At that point, Omnicom and its senior management were faced with a choice: either they could admit that Omnicom’s internet strategy had failed and record the impairment charges that were required under Generally Accepted Accounting Principles (”GAAP”), or they could perpetrate a scheme to defraud investors into believing that Omnicom had not suffered a loss on these investments and that it had continued to meet or exceed Wall Street’s estimates when they knew that this was simply not the case.</p>
<p style= text-align: justify; >Omnicom chose the latter course. At year-end 2000 and then again in the first quarter of 2001, Omnicom fraudulently avoided required impairment charges. Then, in May 2001, it orchestrated a sham transaction, the Seneca transaction, to remove its failed internet investments from its books without recording any loss. The truth about these events did not come to light until a year later when the Chairman of Omnicom’s Audit Committee resigned and The Wall Street Journal ran an article revealing that Omnicom had orchestrated the Seneca transaction to improperly avoid required write-offs. In response to these disclosures, Omnicom’s stock price plummeted.</p>
<p style= text-align: justify; >The Amended Consolidated Complaint was sustained by Hon. Richard Conway Casey, United States District Judge, on March 28, 2005. According to Judge Casey, the complaint adequately stated a claim of fraud with respect to Omnicom’s valuation and accounting for its internet investments and the Seneca transaction it utilized to remove those assets from its books. On July 15, 2005, NORS made a motion for class certification before Judge Casey. On April 30, 2007, the Court granted NORS’ motion for class certification. Members of the Class have now been mailed the court-ordered Notice of Pendency of Class Action. The notice sets forth the rights of class members. The parties have completed fact and expert discovery. Defendants moved for summary judgment on July 20, 2007. The motion was fully briefed and argued on October 2, 2007. On January 29, 2008, Judge Pauley issued a ruling and order granting summary judgement. Lead Plaintiff appealed the opinion on February 4, 2008. Lead Plaintiff submitted its brief on May 1. Defendants submitted their brief on July 1, 2008. Lead Plaintiff submitted a reply brief on August 1, 2008. the date for oral argument has not yet been scheduled.</p>