WPPGF WPP PLC (PK)

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 11-K

For the period ended January 15, 2020

OR

For the transition period from                  to                 

Commission file number 1-38303

J. Walter Thompson Company Profit Sharing and Matched Savings Plan

WPP plc

Sea Containers, 18 Upper Ground

London, United Kingdom, SE1 9GL

J. WALTER THOMPSON COMPANY PROFIT SHARING

AND MATCHED SAVINGS PLAN

INDEX TO FINANCIAL STATEMENTS

*All other schedules required by Section 2520.103-10 of the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because they are not applicable.

See accompanying notes to the financial statements.

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J. WALTER THOMPSON COMPANY PROFIT SHARING

AND MATCHED SAVINGS PLAN

STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS

FOR THE PERIOD FROM JANUARY 1, 2020 TO JANUARY 15, 2020 (DATE OF PLAN MERGER)

See accompanying notes to the financial statements.    

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J. WALTER THOMPSON COMPANY PROFIT SHARING

AND MATCHED SAVINGS PLAN

J. WALTER THOMPSON COMPANY PROFIT SHARING

AND MATCHED SAVINGS PLAN

NOTES TO FINANCIAL STATEMENTS

AS OF JANUARY 15, 2020 (DATE OF PLAN MERGER) AND DECEMBER 31, 2019

Catch-up Contributions

Participating employees who have attained age 50 may contribute an additional percentage of eligible compensation as Catch-up Contributions (“Catch-up Contributions”) in accordance with the Internal Revenue Code (“IRC”). The maximum amount of Catch-up Contributions for the years 2020 and 2019, was $6,500 and $6,000, respectively.

Matching Contributions

Each Participating Employer determines annually whether a discretionary matching contribution (“Matching Contribution”) will be made. To receive a Matching Contribution, if any, an eligible participant must be employed on December 31 of the relevant Plan year and have completed one year of qualifying service as defined by the Plan. Matching Contributions may be made to the account of each participant in an amount up to one half of the first 6% in Deferred Contributions. Catch-up Contributions are not eligible for Matching Contributions.

Profit Sharing Contributions

Each Participating Employer, except for JWT Specialized Communications, LLC and iStrategyLabs, LLC, may make a discretionary Profit Sharing Contribution (“Profit Sharing Contribution”) to their eligible employees’ Plan accounts. Eligible employees must have completed two years of qualifying service before incurring a one year break in service, as defined by the Plan. Profit Sharing Contributions, if any, are determined annually by the relevant Participating Employer and are allocated to each participant employed by the Participating Employer as of December 31 of the relevant Plan year based upon eligible compensation, as defined by the Plan.

Rollover Contributions

An eligible employee of a Participating Employer, whether or not a participant in the Plan, may make rollover contributions in accordance with the terms of the Plan (“Rollover Contributions”).

Participant Accounts

Each participant’s account is credited with the participant’s contributions and allocations of (a) any employer contributions and (b) Plan earnings (losses), and is charged with an allocation of administrative expenses that are paid by the Plan. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account balance.

Investments

Participants direct the investment of their account balances into various investment options offered by the Plan. The Plan currently offers a number of mutual funds, a common collective trust, the MRJ Value Equity Fund, and a WPP Stock Fund, which invests in American Depositary Shares of WPP plc (“WPP plc ADSs”).

Vesting

Deferred Contributions, Catch-up Contributions, Rollover Contributions, Profit Sharing Contributions and their related earnings are 100% vested and non-forfeitable. Matching Contributions and related earnings are not vested and are forfeitable upon termination of employment until a participant completes three years of service.

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J. WALTER THOMPSON COMPANY PROFIT SHARING

AND MATCHED SAVINGS PLAN

NOTES TO FINANCIAL STATEMENTS

AS OF JANUARY 15, 2020 (DATE OF PLAN MERGER) AND DECEMBER 31, 2019

Forfeited Accounts

At December 31, 2019, forfeited non-vested accounts totaled $343,266. These amounts can be used to reduce future employer contributions or pay Plan expenses. During the period from January 1, 2020 to January 15, 2020, no forfeiture amounts were used for these purposes. Forfeitures of $331,417 were transferred to the SIP on January 15, 2020 as part of the merger of the Plan with and into the SIP. This amount was included in net assets transferred out in the Statement of Changes in Net Assets Available for Benefits.

Notes Receivable from Participants

The Plan provides for loans and hardship withdrawals. Eligible participants can obtain loans from their qualifying account balances, as defined by the Plan. General purpose loans and residential loans (for purchasing the participant’s principal residence) are available. A loan to a participant may not be made in an amount less than $1,000. Total outstanding loans may not exceed the lesser of $50,000 or 50% of the participant’s vested account balance and no more than four loans may be outstanding at any given time.

General purpose loans must be repaid within five years and residential loans must be repaid within twenty years. However, the term of a loan may not extend beyond the participant’s employment with a Participating Employer. The notes are secured by the balance in the participant’s account and bear interest at 1% above the prime rate as determined quarterly by the Plan Administrator. Principal and interest are paid ratably through payroll deductions. When loans are repaid, the principal and interest are reinvested in the investment funds in which the participant is currently enrolled.

Payment of Benefits

Distributions from the Plan are generally made in the form of a lump sum payment. Distributions are made at the time of retirement, termination, disability or death, according to Plan provisions. Upon termination, vested account balances between $1,000 and $5,000, will be automatically rolled over into a Merrill Lynch IRA. Vested account balances below $1,000 will automatically be paid to the participant in a lump sum distribution. In addition, upon reaching age 59 ¹⁄₂, a participant may elect to withdraw an amount equal to all or any portion of his or her interest in their vested Matching Contributions, Deferred Contributions, Catch-up Contributions, and Profit Sharing Contributions, including earnings thereon. In addition, Rollover Contributions may be withdrawn at any time.

Basis of Accounting

The financial statements of the Plan are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Investment Valuation and Income Recognition

The Plan’s investments are reported at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

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J. WALTER THOMPSON COMPANY PROFIT SHARING

AND MATCHED SAVINGS PLAN

NOTES TO FINANCIAL STATEMENTS

AS OF JANUARY 15, 2020 (DATE OF PLAN MERGER) AND DECEMBER 31, 2019

Investment Valuation and Income Recognition – (continued)

Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Net appreciation/depreciation includes the Plan’s gains and losses on investments bought and sold as well as held during the year.

Use of Estimates

The preparation of financial statements in accordance with GAAP requires Plan management to make estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates.

Notes Receivable from Participants

Notes receivable from participants are measured at their unpaid principal balance plus any accrued but unpaid interest. Interest income is recorded on the accrual basis. Related fees are charged directly to the borrowing participant’s account and are included in administrative expenses when incurred. No allowance for credit losses has been recorded as of January 15, 2020 or December 31 2019. If a participant does not make loan repayments and the Plan Administrator considers the participant loan to be in default, the loan balance is reduced, and the delinquent participant note receivable is recorded as a benefit payment based on the terms of the Plan document.

Excess Contributions Payable                

Amounts payable to participants for contributions in excess of amounts allowed by the IRS are recorded as a liability with a corresponding reduction to contributions. There were no excess contributions for the year ended December 31, 2019.

Payment of Benefits

Benefits are recorded when paid.

Administrative and Investment Expenses

Certain administrative and investment expenses of maintaining the Plan are paid by the Plan, unless otherwise paid by the Company. Expenses that are paid by the Company are excluded from these financial statements. Fees related to the administration of notes receivable from participants are charged directly to the participant’s account and are included in administrative expenses. Investment related expenses are included in net appreciation/depreciation of fair value of investments.

Date of Management’s Review of Subsequent Events

The Plan’s management has evaluated subsequent events through July 13, 2020, the date the financial statements were available to be issued.

Subsequent to January 15, 2020, there was an outbreak of the novel coronavirus (“COVID-19”), which impacted the financial markets and the global economy. Valuations of the Plan’s investments are as of the date of the asset transfer out of the Plan on January 15, 2020 and did not consider the impact of the emergence and spread of COVID-19.

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J. WALTER THOMPSON COMPANY PROFIT SHARING

AND MATCHED SAVINGS PLAN

NOTES TO FINANCIAL STATEMENTS

AS OF JANUARY 15, 2020 (DATE OF PLAN MERGER) AND DECEMBER 31, 2019

The framework for measuring fair value provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under the FASB Accounting Standards Codification 820 are described as follows: Level 1 inputs consist of unadjusted quoted prices for identical assets or liabilities in active markets that the Plan has the ability to access; Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, or other inputs that are derived principally from, or corroborated by, observable market data by correlation or other means. If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. Level 3 inputs are unobservable and significant to the fair value measurement.

The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques maximize the use of relevant observable inputs and minimize the use of unobservable inputs.

The following is a description of the valuation methodologies used for assets measured at fair value:

Mutual Funds

The mutual funds are valued at the daily closing prices as reported by the fund. Mutual funds held by the Plan are open-end mutual funds that are registered with the Securities and Exchange Commission. These funds are required to publish their daily net asset value (“NAV”) and to transact at that price. The mutual funds held by the Plan are deemed to be actively traded.

WPP Stock Fund

The fair value of the WPP Stock Fund is based on quoted NAVs of the WPP plc ADSs held by the Plan at year end.

MRJ Value Equity Fund

The fair value of the MRJ Value Equity Fund, which is not traded in an active market, is based on the fair value of the underlying investments.

Wells Fargo Stable Value Fund C

The investment in the Wells Fargo Stable Value Fund C, which is solely invested in the Wells Fargo Stable Return Fund G, is composed primarily of fully benefit-responsive investment contracts that are valued at the NAV of the bank collective trust. The NAV is used as a practical expedient to estimate fair value. This practical expedient would not be used if it is determined to be probable that the fund will sell the investment for an amount different from the reported NAV. Participant transactions (purchases and sales) may occur daily. If the Plan initiates a full redemption of the collective trust, the issuer reserves the right to require sufficient notification in order to ensure that securities liquidations will be carried out in an orderly business manner.

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J. WALTER THOMPSON COMPANY PROFIT SHARING

AND MATCHED SAVINGS PLAN

NOTES TO FINANCIAL STATEMENTS

AS OF JANUARY 15, 2020 (DATE OF PLAN MERGER) AND DECEMBER 31, 2019

Wells Fargo Stable Value Fund C – (continued)

The Wells Fargo Stable Value Fund C, included in the tables below, files a U.S. Department of Labor Form 5500, Annual Return/Report of Employee Benefit Plan, as a direct filing entity. Accordingly, certain disclosure requirements under FASB ASU 2015-12 with respect to investment strategies for investments measured using the NAV practical expedient are not required in this report.

The following table sets forth by level, within the fair value hierarchy, the Plan’s investments at fair value as of December 31, 2019. There were no assets held at January 15, 2020.

Investments Measured at Fair Value Using the Practical Expedient

The following table summarizes investments for which fair value is measured using the NAV per share practical expedient for the Wells Fargo Stable Value Fund C as of December 31, 2019. There were no assets held at January 15, 2020. There are no participant redemption restrictions for these investments; the redemption notice period is applicable only to the Plan.

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J. WALTER THOMPSON COMPANY PROFIT SHARING

AND MATCHED SAVINGS PLAN

NOTES TO FINANCIAL STATEMENTS

AS OF JANUARY 15, 2020 (DATE OF PLAN MERGER) AND DECEMBER 31, 2019

The IRS has determined and informed the Company by a letter dated April 6, 2017, that the Plan and related trust are designed in accordance with applicable sections of the IRC. The Plan Administrator believes that the Plan is designed, and is currently being operated, in compliance with the applicable requirements of the IRC and, therefore, believes that the Plan is qualified, and the related trust is tax-exempt.

GAAP requires Plan management to evaluate tax positions taken by the Plan and recognize a tax liability if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by the IRS. The IRS concluded its examination of the 2015 – 2017 Plan years and has accepted the respective tax returns as filed.

The Plan provides participants the option to invest in the WPP Stock Fund, a party-in-interest. At December 31, 2019, the Plan held 63,488 WPP plc ADSs in the WPP Stock Fund valued at $4,462,580.

These transactions qualify as exempt party-in-interest transactions. There have been no known prohibited transactions with parties-in-interest.

Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants would become 100% vested in the Matching Contribution portion of their account.

The Plan invests in various investment securities. Investment securities are exposed to various risks, such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the Statements of Net Assets Available for Benefits.

Other receivables of $2,670,135 at December 31, 2019, represent compensation received from the demutualization of an insurance company relating to an annuity contract previously held by the Plan, and interests in certain real property held by the Plan. These other receivables are included in the transfer of Plan assets due to the Plan merger, reflected in the Statement of Changes in Net Assets Available for Benefits. When these amounts are deposited to the successor trustee, they will be allocated under the SIP, consistent with the terms of the SIP and applicable law.

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J. WALTER THOMPSON COMPANY PROFIT SHARING

AND MATCHED SAVINGS PLAN

NOTES TO FINANCIAL STATEMENTS

AS OF JANUARY 15, 2020 (DATE OF PLAN MERGER) AND DECEMBER 31, 2019

On January 15, 2020, all assets of the Plan, representing all participant account balances in the amount of $408,539,652, were transferred to the SIP, as part of the merger of the Plan with and into the SIP.

*****

12

See accompanying Report of Independent Registered Public Accounting Firm.

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