SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark one)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
---------------------- ---------------------
Commission file number 001-12277
ACNIELSEN CORPORATION
- - -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 06-1454128
- - ------------------------------------- -------------------------------------
(State of Incorporation) (I.R.S. Employer Identification No.)
177 Broad Street, Stamford, CT 06901
- - ------------------------------------- -------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (203) 961-3000
--------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Shares Outstanding
Title of Class at April 30, 1998
Common Stock,
par value $.01 per share 57,348,708
<PAGE>
ACNIELSEN CORPORATION
INDEX TO FORM 10-Q
PART I. FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Condensed Consolidated Statements of Income (Unaudited)
Three Months Ended March 31, 1998 and 1997 3
Condensed Consolidated Statements of Cash Flows (Unaudited)
Three Months Ended March 31, 1998 and 1997 4
Condensed Consolidated Balance Sheets
March 31, 1998 (Unaudited) and December 31, 1997 5
Notes to Condensed Consolidated Financial Statements (Unaudited) 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 13
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<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
Item I. FINANCIAL STATEMENTS
ACNIELSEN CORPORATION
Condensed Consolidated Statements Of Income (Unaudited)
(Amounts in thousands except per share amounts)
<CAPTION>
Three Months Ended
March 31,
--------------------------------------------
1998 1997
----------------------- -----------------
<S> <C> <C>
Operating Revenue $325,801 $324,774
Operating Costs 171,974 182,100
Selling and Administrative Expenses 128,876 128,002
Depreciation and Amortization 21,411 23,850
Year 2000 Expenses 3,336 -
----------------- -----------------
Operating Income (Loss) 204 (9,178)
Interest Income 3,081 2,118
Interest Expense (284) (1,388)
Other - Net 101 826
-----------------
-----------------
Other Income - Net 2,898 1,556
Income (Loss) Before Income Tax Provision 3,102 (7,622)
Income Tax Provision (Benefit) 1,303 (3,506)
----------------- -----------------
Net Income (Loss) $1,799 $(4,116)
================= =================
Net Income (Loss) Per Share of Common Stock - Basic $0.03 $(.07)
================= =================
Net Income (Loss) Per Share of Common Stock - Diluted $0.03 $(.07)
================= =================
Weighted Average Number of Shares Outstanding
Basic 57,359 56,919
Diluted 59,353 56,919
<FN>
See accompanying notes to the condensed consolidated financial statements
(unaudited).
</FN>
</TABLE>
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<PAGE>
<TABLE>
ACNIELSEN CORPORATION
Condensed Consolidated Statements of Cash Flows (Unaudited)
(Amounts in Thousands)
<CAPTION>
Three Months Ended
March 31,
--------------------------------------------------
1998 1997
----------------------- -----------------------
<S> <C> <C>
- - --------------------------------------------------------------------------------------------------------------------
Cash Flows from Operating Activities:
Net Income (Loss) $ 1,799 $ (4,116)
Reconciliation of Net Income (Loss) to Net Cash Used In
Operating Activities:
Depreciation and Amortization 21,411 23,850
Deferred Income Taxes (220) 456
Payments Related to Special Charges (3,634) (12,188)
Postemployment Benefit Payments (2,486) (2,496)
Net Decrease in Accounts Receivable 4,873 4,283
Net Increase in Other Working Capital Items (28,117) (29,892)
Other 782 1,154
--
- - ---------------------------------------------------------------- --------------------------------------------------
Net Cash Used In Operating Activities (5,592) (18,949)
- - --------------------------------------------------------------------------------------------------------------------
Cash Flows from Investing Activities:
Capital Expenditures (7,523) (9,357)
Additions to Computer Software (5,234) (3,752)
Decrease in Other Investments 813 901
Other (2,921) (7,289)
--
- - ---------------------------------------------------------------- --------------------------------------------------
Net Cash Used in Investing Activities (14,865) (19,497)
- - --------------------------------------------------------------------------------------------------------------------
Cash Flows from Financing Activities:
Decrease in Short-Term Borrowings (144) (2,646)
Treasury Stock Purchases (8,869) -
Proceeds from the Sale of Common Stock under Option Plans 3,996 448
Other 858 274
- - --------------------------------------------------------------------------------------------------------------------
Net Cash Used in Financing Activities (4,159) (1,924)
- - --------------------------------------------------------------------------------------------------------------------
Effect of Exchange Rate Changes on Cash and Cash Equivalents (4,268) (4,542)
- - --------------------------------------------------------------------------------------------------------------------
Decrease in Cash and Cash Equivalents (28,884) (44,912)
Cash and Cash Equivalents, Beginning of Period 205,726 185,005
- - --------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents, End of Period $ 176,842 $ 140,093
- - --------------------------------------------------------------------------------------------------------------------
Supplemental disclosure of cash flow information:
Cash Paid During the Period for Interest $ 231 $ 1,350
Cash Paid During the Period for Income Taxes $ 1,823 $ 5,347
Noncash Investing and Financing Activities:
Acquisition of Investment and Note Receivable in exchange for $ 19,400 -
Business Assets and Liabilities assumed
<FN>
See accompanying notes to the condensed consolidated financial statements
(unaudited).
</FN>
</TABLE>
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<PAGE>
ACNIELSEN CORPORATION
Condensed Consolidated Balance Sheets
(Amounts in thousands)
[CAPTION]
<TABLE>
- - --------------------------------------------------------------------------------------------------------------------------
March 31, December 31,
1998 1997
(Unaudited)
- - --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Current Assets
Cash and Cash Equivalents $ 176,842 $ 205,726
Accounts Receivable-Net 246,843 260,821
Other Current Assets 47,756 38,423
----------------- -------------
Total Current Assets 471,441 504,970
Notes Receivable and Other Investments 29,050 10,281
Property, Plant and Equipment-Net 147,054 165,660
Other Assets-Net
Prepaid Pension 56,634 57,425
Computer Software 26,481 25,288
Intangibles & Other Assets 53,633 55,001
Goodwill 211,081 220,483
----------------- -------------
Total Other Assets-Net 347,829 358,197
- - --------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 995,374 $ 1,039,108
- - --------------------------------------------------------------------------------------------------------------------------
Liabilities and Shareholders' Equity
Current Liabilities
Accounts Payable $ 81,127 $ 86,908
Short-Term Debt 25,653 25,957
Accrued and Other Current Liabilities 295,486 313,864
Accrued Income Taxes 41,118 42,385
----------------- -------------
Total Current Liabilities 443,384 469,114
Postretirement and Postemployment Benefits 47,931 49,400
Deferred Income Taxes 26,809 27,609
Other Liabilities 29,439 32,881
- - --------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 547,563 579,004
- - --------------------------------------------------------------------------------------------------------------------------
Commitments and Contingencies
Shareholders' Equity
Common Stock 580 577
Additional Paid-in Capital 476,573 471,493
Retained Earnings 45,419 43,620
Treasury Stock (12,835) (3,966)
Accumulated Other Comprehensive Income:
Cumulative Translation Adjustment (51,620)
(61,926)
----------------- -------------
Total Shareholders' Equity 447,811 460,104
- - --------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 995,374 $1,039,108
- - --------------------------------------------------------------------------------------------------------------------------
<FN>
See accompanying notes to the condensed consolidated financial statements
(unaudited).
</FN>
</TABLE>
-5-
<PAGE>
ACNIELSEN CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Interim Consolidated Financial Statements
These interim consolidated financial statements have been prepared in accordance
with the instructions to Form 10-Q and should be read in conjunction with the
consolidated financial statements and related notes in the ACNielsen Corporation
(the "Company") 1997 Annual Report on Form 10-K. In the opinion of management,
all adjustments (which include only normal recurring adjustments), considered
necessary for a fair presentation of financial position, results of operations
and cash flows at the dates and for the periods presented have been included.
Certain prior year amounts have been reclassified to conform with the 1998
presentation.
Note 2 - Financial Instruments with Off-Balance-Sheet Risk
The Company uses foreign exchange forward contracts to hedge significant known
transactional exposures. At March 31, 1998 the Company had $30,040 of foreign
currency forward contracts outstanding, which mature on various dates over the
next nine months. These forward contracts mature in monthly installments through
December 1998. Any gain or loss on the forward contract is deferred and included
in the measurement of the related foreign currency transaction.
The Company does not utilize derivative financial instruments for trading or
other speculative purposes.
Note 3 - Earnings Per Share
The following table sets forth the computation of basic and diluted earnings
(loss) per share (EPS) for the quarters ended March 31, 1998 and 1997 (Amounts
in Thousands, Except Per Share Data):
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Weighted-average number of shares outstanding for basic EPS 57,359 56,919
Dilutive effect of shares issuable as of period-end under stock option
plans 1,994 0
============== ===============
Weighted-average number of shares and share equivalents for diluted EPS
59,353 56,919
============== ===============
Net Income (Loss) $1,799 $(4,116)
============== ===============
Diluted earnings (loss) per share $.03 $(0.07)
============== ===============
</TABLE>
No adjustments were made to March, 1997 basic EPS to compute diluted EPS as it
would result in anti-dilution. As such, no adjustment was made for options to
purchase 8,404,035 shares of common stock at share prices ranging from $11.10 to
$17.05 per share, which were outstanding at the end of March, 1997.
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<PAGE>
Note 4 - New Accounting Pronouncements
The Company has adopted Statement of Financial Accounting Standards No. 130,
"Reporting Comprehensive Income", which establishes standards for the reporting
and disclosure of comprehensive income and its components in the financial
statements. This statement is effective for interim and annual periods for
fiscal years beginning after December 15,1997. The Company's comprehensive loss
for the quarters ended March 31, 1998 and 1997, reported net of tax, are set
forth in the following table:
<TABLE>
(in thousands)
<CAPTION>
1998 1997
- - ---------------------------------------------- ------------------ -----------------
<S> <C> <C>
Net Income (Loss) $1,799 $(4,116)
Other Comprehensive Loss, Net of Tax
Foreign Currency Translation Adjustments (10,306) (8,883)
Unrealized Loss on Securities - (992)
---------- ----------
Comprehensive Loss $(8,507) $(13,991)
======== =========
</TABLE>
In April 1998, the American Institute of Certified Public Accountants issued
Statement of Position (SOP) 98-5, "Reporting on the Costs of Start-Up
Activities." The SOP, which the Company plans to adopt on January 1, 1999,
requires that costs of the Company's start-up activities be expensed as
incurred. The Company currently capitalizes certain one-time costs related to
introducing new services and conducting business in new geographic areas.
Adoption of this SOP is expected to result in a one-time, non-cash, after-tax
charge recorded as a cumulative effect of a change in accounting in the range of
$15,000 to $20,000. However, adoption of the new accounting policy is not
expected to have a material impact on the Company's future results of
operations.
Note 5 - Litigation
On July 29, 1996, Information Resources, Inc. ("IRI") filed a complaint in the
United States District Court for the Southern District of New York, naming as
defendants D&B, A.C. Nielsen Company (which is a subsidiary of the Company
"ACNielsenCo") and I.M.S. International, Inc., a subsidiary of Cognizant
Corporation ("IMS") (the "IRI Action").
The complaint alleges various violations of the United States antitrust laws,
including alleged violations of Sections 1 and 2 of the Sherman Act. The
complaint also alleges a claim of tortious interference with a contract and a
claim of tortious interference with a prospective business relationship. These
latter claims relate to the acquisition by defendants of Survey Research Group
Limited ("SRG"). IRI alleges that SRG violated an alleged agreement with IRI
when it agreed to be acquired by the defendants and that the defendants induced
SRG to breach that agreement.
IRI's complaint alleges damages in excess of $350 million, which amount IRI has
asked to be trebled under the antitrust laws. IRI also seeks punitive damages in
an unspecified amount.
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<PAGE>
By notice of motion dated October 15, 1996, defendants moved for an order
dismissing all claims in the complaint. On May 6, 1997 the United States
District Court for the Southern District of New York issued a decision on the
motion to dismiss. The Court dismissed IRI's claim of attempted monopolization
in the United States with leave to replead within sixty days. The Court denied
defendants' motion with respect to the remaining claims in the complaint. On
June 3, 1997, defendants filed an answer and counterclaims. Defendants denied
all material allegations of the complaint. In addition, ACNielsenCo asserted
counterclaims against IRI alleging that IRI has made false and misleading
statements about ACNielsenCo's services and commercial activities and that such
conduct constitutes a violation of Section 43(a) of the Lanham Act and unfair
competition. ACNielsenCo seeks injunctive relief and damages.
On July 7, 1997, IRI filed an amended complaint seeking to replead the claim of
attempted monopolization in the United States, which had been dismissed by the
Court in its May 6, 1997 decision. By notice of motion dated August 18, 1997,
defendants moved for an order dismissing the amended claim. On December 1, 1997,
the Court denied defendants' motion.
In connection with the IRI Action, D&B, Cognizant Corporation (the parent
company of IMS) and the Company have entered into an Indemnity and Joint Defense
Agreement (the "Indemnity and Joint Defense Agreement") pursuant to which they
have agreed (i) to certain arrangements allocating potential liabilities ("IRI
Liabilities") that may arise out of or in connection with the IRI Action and
(ii) to conduct a joint defense of such action. In particular, the Indemnity and
Joint Defense Agreement provides that the Company will assume exclusive
liability for IRI Liabilities up to a maximum amount to be calculated at the
time such liabilities, if any, become payable (the "ACN Maximum Amount"), and
that Cognizant and D&B will share liability equally for any amounts in excess of
the ACN Maximum Amount. The ACN Maximum Amount will be determined by an
investment banking firm as the maximum amount which the Company is able to pay
after giving effect to (i) any plan submitted by such investment bank which is
designed to maximize the claims paying ability of the Company without impairing
the investment banking firm's ability to deliver a viability opinion (but which
will not require any action requiring stockholder approval), and (ii) payment of
related fees and expenses. For these purposes, financial viability means the
ability of the Company, after giving effect to such plan, the payment of related
fees and expenses and the payment of the ACN Maximum Amount, to pay its debts as
they become due and to finance the current and anticipated operating and capital
requirements of its business, as reconstituted by such plan, for two years from
the date any such plan is expected to be implemented.
The Indemnity and Joint Defense Agreement also imposes certain restrictions on
the payment of cash dividends and the ability of the Company to purchase its
stock.
Management of ACNielsen is unable to predict at this time the final outcome of
the IRI Action or whether its resolution could materially affect the Company's
results of operations, cash flows or financial position.
-8-
<PAGE>
The Company and its subsidiaries are also involved in other legal proceedings
and litigation arising in the ordinary course of business. In the opinion of
management, the outcome of such current legal proceedings, claims and
litigation, if decided adversely, could have a material effect on quarterly or
annual operating results or cash flows when resolved in a future period.
However, in the opinion of management, these matters will not materially affect
the Company's consolidated financial position.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations (Dollar amounts in thousands, except per share data)
Net income for the first quarter was $1,799 or $0.03 per diluted share, a
$5,915, or $0.10 per share improvement over the first quarter 1997 loss of
$4,116 or $0.07 per diluted share. Net income included an after-tax negative
currency translation impact of $1,317, or $0.02 per diluted share.
Revenue for the quarter ended March 31, 1998 was $325,801, an increase of 0.3%
from the first quarter of 1997, reflecting the negative impact of a strong U.S.
dollar. Driven by solid growth in all regions, revenue advanced 9.4% in local
currency.
Operating income was $204, an increase of $9,382 over 1997, despite a negative
currency translation impact of $2,281. Strong local currency revenue growth,
coupled with improved operating efficiency across all three of the Company's
regions, drove the substantial increase. Excluding Year 2000 costs, operating
income increased $12,718 over 1997 to $3,540.
Other income-net was $2,898, compared with $1,556 in the first three months of
1997, primarily reflecting lower interest expense on lower borrowings and higher
interest income.
The Company's operating results by geographic region for the quarters
ended March 31, 1998 and 1997 are set forth in the table below.
<TABLE>
(in thousands)
<CAPTION>
Operating Revenue Operating Income
(Loss)
------------------------- ------------------------
1998 1997 1998 1997
<S> <C> <C> <C> <C>
United States $83,167 $73,307 $5,785 $450
Canada/ Latin America 48,066 48,059 5,436 2,831
-------- --------- -------- -------
Total Americas 131,233 121,366 11,221 3,281
Europe, Middle East & Africa 131,598 133,625 (5,037) (6,998)
Asia Pacific * 62,970 69,783 (2,644) (5,461)
-------- --------- -------- -------
Subtotal 325,801 324,774 3,540 (9,178)
Year 2000 Costs - - (3,336) -
--------- --------- -------- -------
Total $325,801 $324,774 $204 $(9,178)
======== ======== ======= ========
*Includes ACNielsen Japan
</TABLE>
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<PAGE>
The following discusses results on a geographic basis:
Total Americas revenue increased 8.1% to $131,233 from $121,366. Excluding the
impact of currency translation, revenue grew 10.8%. Operating income was
$11,221, a $7,940 improvement over the prior year, including a $735 negative
foreign translation impact.
In the United States, revenue grew 13.5% to $83,167, reflecting continued growth
in account-level information, consumer panels and the addition of new revenue
from ACNielsen EDI, acquired in December. Excluding ACNielsen EDI, U.S. revenue
grew 10.5%. Operating income was $5,785, an increase of $5,335 over the prior
year. The gain was driven by revenue growth, continuing improvements in
operating efficiency and additional income from ACNielsen EDI.
In Canada and Latin America, reported revenue of $48,066 was essentially
unchanged, due to a negative foreign translation impact of $3,284. In local
currency, revenue grew 6.8%. The increase in local currency revenue, even after
the transfer of ACNielsen's Latin American media measurement businesses to the
IBOPE Media Information joint venture, resulted from higher retail measurement
sales in Canada, Mexico, Brazil and Colombia, and revenue from a major
customized research project in Mexico. Excluding the transferred media business,
revenue grew more than 13% in local currency. Operating income increased 92% to
$5,436 from $2,831 in 1997, including a $735 negative impact of foreign currency
translation. The improvement was the result of local-currency revenue growth,
improved operating efficiency and the elimination of losses from the Company's
Latin American media measurement business.
Revenue in the Europe, Middle East & Africa ("EMEA") region declined 1.5% to
$131,598, from $133,625 in 1997, due to a $12,922 negative impact of foreign
currency translation. Revenue for EMEA grew 8.2% in local currency, reflecting
continuing growth in the United Kingdom, France and in the Nordic region; nearly
40% growth in Eastern Europe; revenue from businesses in South Africa and
Israel, acquired in last year's second quarter; and the addition of revenue from
ACNielsen EDI's European operations. Excluding the impact of acquisitions,
local-currency revenue grew 3.6%. EMEA reduced its operating loss for the
quarter $1,961, to $5,037, despite a negative currency translation impact of
$478. The improvement was the result of local-currency revenue growth, increased
productivity and lower costs, as the region continued to make progress on its
turnaround.
Asia Pacific's revenue decreased 9.8% to $62,970 from $69,783, due to a $13,416
negative impact from currency translation. Revenue for Asia Pacific grew 9.5% in
local currency due to solid growth in Southeast Asia, China, Hong Kong and New
Zealand, and from ACNielsen's multi-country research business. The region
reduced its operating loss from $5,461 to $2,644, despite a $1,068 negative
currency translation impact. The improvement was the result of productivity
gains, improved operating efficiency, lower costs and a more disciplined
approach to customized research.
In Japan, continuing efforts to reduce costs and improve efficiency contributed
to the region's overall income improvement in the first quarter. Additional
operating improvements, from actions announced at the end of 1997, are expected
to be realized in the second half of 1998.
-10-
<PAGE>
Liquidity and Capital Resources
Three Months Ended March 31, 1998 and 1997
Net cash used in operating activities for the quarter ended March 31, 1998
totaled $5,592, compared with $18,949 for the comparable period in 1997. The
change primarily is the result of improved operating results (net income of
$1,799 in 1998 as compared with a net loss of $4,116 in 1997) and a decrease in
payments related to special charges ($8,554).
Net cash used in investing activities totaled $14,865 for the quarter ended
March 31, 1998, compared with $19,497 for the comparable period in 1997.
Net cash used in financing activities for the quarter ended March 31, 1998,
totaled $4,159, compared with $1,924 for the comparable period in 1997. The
increase in the cash used of $2,235 primarily reflected the purchase of treasury
stock ($8,869) offset by an increase in proceeds from the sale of common stock
under option plans ($3,548) and a reduction in the amount of cash used to retire
short-term borrowings ($2,502).
During the first quarter of 1998, the Company became a partner in a joint
venture that provides media measurement services in Latin America. The joint
venture, IBOPE Media Information, will offer television audience measurement
(TAM), radio audience measurement (RAM), and advertising expenditure measurement
services (AEM) in various Latin American markets. Under the terms of the
agreement, the Company received an 11% equity interest in the joint venture and
a $9,400 interest bearing note in exchange for the Company's Latin America TAM,
RAM and AEM business assets and the assumption of certain transition liabilities
in a non-cash transaction. The first quarter 1998 financial statements reflect a
preliminary allocation of the business assets exchanged that will be finalized
later in the year. The Company did not recognize a gain or loss on the
transaction.
Year 2000
The Company relies on software and related technologies in the operation of its
business. Based on a comprehensive assessment, the Company determined that it
will be required to modify or replace significant portions of its software so
that its computer systems will be Year 2000 compliant. The Company is utilizing
internal and external resources to execute its Year 2000 compliance program.
Third-party contract programmers have been retained, and are presently
renovating and testing software. Renovation of code is scheduled to be
substantially complete by year end 1998, with testing and implementation of new
programs to be completed by mid-1999. The Company currently believes that it
will be able to modify or replace its affected systems in a timely manner and
with no significant disruptions to its operations.
Preliminary estimates of the total Year 2000 compliance costs to be incurred
with respect to the affected systems approximate $15,000 to $20,000 over the
costs of normal software upgrades and replacements. Maintenance and modification
costs will be expensed as incurred, while the costs of new software will be
capitalized and amortized over the software's useful life. Such costs are
expected to be incurred primarily in 1998 and totaled $3,336 and $0 for the
three months ended March 31, 1998 and 1997, respectively.
-11-
<PAGE>
The Company also is communicating with its data suppliers and customers
regarding the Year 2000 issue. Failure by data suppliers to successfully address
the issue could result in delays in data becoming available to the Company for
use in its products and services. Failure by customers could disrupt their
ability to maximize their use of such products and services. The Company is
currently unable to determine the effect, if any, that such failures might have
on the Company's operations or future business results.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
10(g) 1996 ACNielsen Corporation Non-Employee Directors' Stock
Incentive Plan (As amended February 19, 1998)
10(i) 1996 ACNielsen Corporation Key Employees' Stock Incentive Plan
(As amended February 19, 1998)
(27) Financial Data Schedule (filed electronically)
(b) Reports on Form 8-K.
There were no reports on Form 8-K filed during the quarter ended March
31, 1998.
-12-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ACNIELSEN CORPORATION
(Registrant)
Date: May 8, 1998 By: /s/ Robert J. Chrenc
---------------------------
Robert J. Chrenc
Executive Vice President
and Chief Financial Officer
Date: May 8, 1998 By: /s/ Michael S. Geltzeiler
------------------------------------
Michael S. Geltzeiler
Senior Vice President and Controller
-13-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 176,842
<SECURITIES> 0
<RECEIVABLES> 246,843
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 471,441
<PP&E> 430,697
<DEPRECIATION> 283,643
<TOTAL-ASSETS> 995,374
<CURRENT-LIABILITIES> 443,384
<BONDS> 0
0
0
<COMMON> 580
<OTHER-SE> 447,231
<TOTAL-LIABILITY-AND-EQUITY> 995,374
<SALES> 0
<TOTAL-REVENUES> 325,801
<CGS> 0
<TOTAL-COSTS> 325,597
<OTHER-EXPENSES> (101)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (2,797)
<INCOME-PRETAX> 3,102
<INCOME-TAX> 1,303
<INCOME-CONTINUING> 1,799
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,799
<EPS-PRIMARY> 0.03
<EPS-DILUTED> 0.03
</TABLE>
Exhibit (10)i
1996 ACNIELSEN CORPORATION
KEY EMPLOYEES' STOCK INCENTIVE PLAN
1. Purpose of the Plan
The purpose of the Plan is to aid the Company and its Subsidiaries in
securing and retaining key employees of outstanding ability and to motivate such
employees to exert their best efforts on behalf of the Company and its
Subsidiaries by providing incentives through the granting of Awards. The Company
expects that it will benefit from the added interest which such key employees
will have in the welfare of the Company as a result of their proprietary
interest in the Company's success.
2. Definitions
The following capitalized terms used in the Plan have the respective
meanings set forth in this Section:
(a) Act: The Securities Exchange Act of 1934, as
amended, or any successor thereto.
(b) Award: An Option, Stock Appreciation Right or Other
Stock-Based Award granted pursuant to the Plan.
(c) Beneficial Owner: As such term is defined in Rule
13d-3 under the Act (or any successor rule thereto).
(d) Board: The Board of Directors of the Company.
(e) Change in Control: The occurrence of any of the
following events:
(i) any Person (other than the Company, any trustee
or other fiduciary holding securities under an
employee benefit plan of the Company, or any company
owned, directly or indirectly, by the stockholders of
the Company in substantially the same proportions as
their ownership of stock of the Company), becomes the
Beneficial Owner, directly or indirectly, of
securities of the Company representing 20% or more of
the combined voting power of the Company's
then-outstanding securities;
<PAGE>
(ii) during any period of twenty-four months (not
including any period prior to the Effective Date),
individuals who at the beginning of such period
constitute the Board, and any new director (other
than (A) a director nominated by a Person who has
entered into an agreement with the Company to effect
a transaction described in Sections 2(e)(i), (iii) or
(iv) of the Plan, (B) a director nominated by any
Person (including the Company) who publicly announces
an intention to take or to consider taking actions
(including, but not limited to, an actual or
threatened proxy contest) which if consummated would
constitute a Change in Control or (C) a director
nominated by any Person who is the Beneficial Owner,
directly or indirectly, of securities of the Company
representing 10% or more of the combined voting power
of the Company's securities) whose election by the
Board or nomination for election by the Company's
stockholders was approved in advance by a vote of at
least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of
the period or whose election or nomination for
election was previously so approved, cease for any
reason to constitute at least a majority thereof;
(iii) the stockholders of the Company approve any
transaction or series of transactions under which the
Company is merged or consolidated with any other
company, other than a merger or consolidation (A)
which would result in the voting securities of the
Company outstanding immediately prior thereto
continuing to represent (either by remaining
outstanding or by being converted into voting
securities of the surviving entity) more than 66 2/3%
of the combined voting power of the voting securities
of the Company or such surviving entity outstanding
immediately after such merger or consolidation and
(B) after which no Person holds 20% or more of the
combined voting power of the then-outstanding
securities of the Company or such surviving entity;
or
<PAGE>
(iv) the stockholders of the Company approve a plan
of complete liquidation of the Company or an
agreement for the sale or disposition by the Company
of all or substantially all of the Company's assets.
(f) Code: The Internal Revenue Code of 1986, as amended,
or any successor thereto.
(g) Committee: The Compensation Committee of the Board.
(h) Company: ACNielsen Corporation, a Delaware
corporation.
(i) D&B: The Dun & Bradstreet Corporation, a Delaware
corporation.
(j) Disability: Inability to engage in any substantial
gainful activity by reason of a medically
determinable physical or mental impairment which
constitutes a permanent and total disability, as
defined in Section 22(e)(3)of the Code (or any
successor section thereto). The determination whether
a Participant has suffered a Disability shall be made
by the Committee based upon such evidence as it deems
necessary and appropriate. A Participant shall not be
considered disabled unless he or she furnishes such
medical or other evidence of the existence of the
Disability as the Committee, in its sole discretion,
may require.
(k) Effective Date: The date on which the Plan takes
effect, as defined pursuant to Section 17 of the
Plan.
(l) Fair Market Value: On a given date, the arithmetic
mean of the high and low prices of the
Shares as reported on such date on the Composite
Tape of the principal national securities exchange on
which such Shares are listed or admitted to trading,
or, if no Composite Tape exists for such national
<PAGE>
securities exchange on such date, then on the
principal national securities exchange on which such
Shares are listed or admitted to trading, or, if the
Shares are not listed or admitted on a national
securities exchange, the arithmetic mean of the per
Share closing bid price and per Share closing asked
price on such date as quoted on the National
Association of Securities Dealers Automated Quotation
System (or such market in which such prices are
regularly quoted), or, if there is no market on which
the Shares are regularly quoted, the Fair Market
Value shall be the value established by the Committee
in good faith. If no sale of Shares shall have been
reported on such Composite Tape or such national
securities exchange on such date or quoted on the
National Association of Securities Dealers Automated
Quotation System on such date, then the immediately
preceding date on which sales of the Shares have been
so reported or quoted shall be used.
(m) LSAR: A limited stock appreciation right granted
pursuant to Section 8(d) of the Plan.
(n) Other Stock-Based Awards: Awards granted pursuant to
Section 9 of the Plan.
(o) Option: A stock option granted pursuant to Section
7 of the Plan.
(p) Option Price: The purchase price per Share of an
Option, as determined pursuant to Section 7(a)of the
Plan.
(q) Participant: An individual who is selected by the
Committee to participate in the Plan pursuant to
Section 5 of the Plan.
(r) Performance-Based Awards: Certain Other Stock-Based
Awards granted pursuant to Section 9(b) of the Plan.
<PAGE>
(s) Person: As such term is used for purposes of Section
13(d) or 14(d) of the Act (or any successor section
thereto).
(t) Plan: The 1996 ACNielsen Corporation Key Employees'
Stock Incentive Plan.
(u) Retirement: Termination of employment with the
Company or a Subsidiary after such Participant has
attained age 55 and ten years of service with the
Company; or, with the prior written consent of the
Committee that such termination be treated as a
Retirement hereunder, termination of employment under
other circumstances.
(v) Shares: Shares of common stock, par value $0.01 per
Share, of the Company.
(w) Spinoff Date: The date on which the Shares that are
owned by D&B are distributed to the holders of
record of shares of D&B.
(x) Stock Appreciation Right: A stock appreciation right
granted pursuant to Section 8 of the Plan.
(y) Subsidiary: A subsidiary corporation, as defined in
Section 424(f) of the Code (or any successor section
thereto).
3. Shares Subject to the Plan
The total number of Shares which may be issued under the Plan is
12,000,000. The maximum number of Shares for which Awards may be granted during
a calendar year to any Participant shall be 700,000. The Shares may consist, in
whole or in part, of unissued Shares or treasury Shares. The issuance of Shares
or the payment of cash upon the exercise of an Award shall reduce the total
number of Shares available under the Plan, as applicable. Shares which are
subject to Awards which terminate or lapse may be granted again under the Plan.
<PAGE>
4. Administration
The Plan shall be administered by the Committee, which may delegate its
duties and powers in whole or in part to any subcommittee thereof consisting
solely of at least two individuals who are each "non-employee directors" within
the meaning of Rule 16b-3 under the Act (or any successor rule thereto) and
"outside directors" within the meaning of Section 162(m) of the Code (or any
successor section thereto). The Committee is authorized to interpret the Plan,
to establish, amend and rescind any rules and regulations relating to the Plan,
and to make any other determinations that it deems necessary or desirable for
the administration of the Plan. The Committee may correct any defect or supply
any omission or reconcile any inconsistency in the Plan in the manner and to the
extent the Committee deems necessary or desirable. Any decision of the Committee
in the interpretation and administration of the Plan, as described herein, shall
lie within its sole and absolute discretion and shall be final, conclusive and
binding on all parties concerned (including, but not limited to, Participants
and their beneficiaries or successors). The Committee shall require payment of
any amount it may determine to be necessary to withhold for federal, state,
local or other taxes as a result of the exercise of an Award. Unless the
Committee specifies otherwise, the Participant may elect to pay a portion or all
of such withholding taxes by (a) delivery in Shares or (b) having Shares
withheld by the Company from any Shares that would have otherwise been received
by the Participant. The number of Shares so delivered or withheld shall have an
aggregate Fair Market Value sufficient to satisfy the applicable withholding
taxes. If the chief executive officer of the Company is a member of the Board,
the Board by specific resolution may constitute such chief executive officer as
a committee of one which shall have the authority to grant Awards of up to an
aggregate of 10,000 Shares in each calendar year to each Participant who is not
subject to the rules promulgated under Section 16 of the Act (or any successor
section thereto); provided, however, that (a) such chief executive officer shall
notify the Committee of any such grants made pursuant to this Section 4 and (b)
the chairman of the Committee shall approve any such grants made pursuant to
this Section 4.
<PAGE>
5. Eligibility
Key employees (but not members of the Committee or any person who
serves only as a director) of the Company and its Subsidiaries, who are from
time to time responsible for the management, growth and protection of the
business of the Company and its Subsidiaries, are eligible to be granted Awards
under the Plan. Participants shall be selected from time to time by the
Committee, in its sole discretion, from among those eligible, and the Committee
shall determine, in its sole discretion, the number of Shares to be covered by
the Awards granted to each Participant.
6. Limitations
No Award may be granted under the Plan after the tenth anniversary of
the Effective Date, but Awards theretofore granted may extend beyond that date.
7. Terms and Conditions of Options
Options granted under the Plan shall be, as determined by the
Committee, non-qualified, incentive or other stock options for federal income
tax purposes, as evidenced by the related Award agreements, and shall be subject
to the foregoing and the following terms and conditions and to such other terms
and conditions, not inconsistent therewith, as the Committee shall determine:
(a) Option Price. The Option Price per Share shall be
determined by the Committee, but shall not be less than 100% of the Fair Market
Value of the Shares on the date an Option is granted.
(b) Exercisability. Options granted under the Plan shall be
exercisable at such time and upon such terms and conditions as may be determined
by the Committee, but in no event shall an Option be exercisable more than ten
years after the date it is granted.
(c) Exercise of Options. Except as otherwise provided in the
Plan or in an Award agreement, an Option may be exercised for all, or from time
to time any part, of the Shares for which it is then exercisable. For purposes
of Section 7 of the Plan, the exercise date of an Option shall be the later of
<PAGE>
the date a notice of exercise is received by the Company and, if applicable, the
date payment is received by the Company pursuant to clauses (i), (ii) or (iii)
in the following sentence. The purchase price for the Shares as to which an
Option is exercised shall be paid to the Company in full at the time of exercise
at the election of the Participant (i) in cash, (ii) in Shares having a Fair
Market Value equal to the aggregate Option Price for the Shares being purchased
and satisfying such other requirements as may be imposed by the Committee, (iii)
partly in cash and partly in such Shares, (iv) through the withholding of Shares
(which would otherwise be delivered to the Participant) with an aggregate Fair
Market Value on the exercise date equal to the aggregate Option Price and
satisfying such other requirements as may be imposed by the Committee or (v)
through the delivery of irrevocable instructions to a broker to deliver promptly
to the Company an amount equal to the aggregate Option Price for the Shares
being purchased. No Participant shall have any rights to dividends or other
rights of a stockholder with respect to Shares subject to an Option until the
Participant has given written notice of exercise of the Option, paid in full for
such Shares and, if applicable, has satisfied any other conditions imposed by
the Committee pursuant to the Plan.
(d) Exercisability Upon Termination of Employment by Death. If
a Participant's employment with the Company and its Subsidiaries terminates by
reason of death after the date of grant of an Option, (i) the unexercised
portion of such Option shall immediately vest in full and (ii) such portion may
thereafter be exercised during the shorter of (A) the remaining stated term of
the Option or (B) five years after the date of death.
(e) Exercisability Upon Termination of Employment by
Disability or Retirement. If a Participant's employment with the Company and its
Subsidiaries terminates by reason of Disability or Retirement after the date of
grant of an Option, (i) the unexercised portion of such Option shall immediately
vest in full and (ii) such portion may thereafter be exercised during the
shorter of (A) the remaining stated term of the Option or (B) five years after
the date of such termination of employment; provided, however, that if a
Participant dies within a period of five years after such termination of
employment, an unexercised Option may thereafter be exercised, during the
shorter of (i) the remaining stated term of the Option or (ii) the period that
is the longer of (A) five years after the date of such termination of employment
or (B) one year after the date of death.
<PAGE>
(f) Effect of Other Termination of Employment. Except as
otherwise provided in an Award agreement, if a Participant's employment with the
Company and its Subsidiaries terminates for any reason other than death,
Disability or Retirement after the date of grant of an Option as described
above, an unexercised Option may thereafter be exercised during the period
ending 90 days after the date of such termination of employment, but only to the
extent to which such Option was exercisable at the time of such termination of
employment.
<PAGE>
8. Terms and Conditions of Stock Appreciation Rights
(a) Grants. The Committee also may grant (i) a Stock
Appreciation Right independent of an Option or (ii) a Stock Appreciation Right
in connection with an Option, or a portion thereof. A Stock Appreciation Right
granted pursuant to clause (ii) of the preceding sentence (A) may be granted at
the time the related Option is granted or at any time prior to the exercise or
cancellation of the related Option, (B) shall cover the same Shares covered by
an Option (or such lesser number of Shares as the Committee may determine) and
(C) shall be subject to the same terms and conditions as such Option except for
such additional limitations as are contemplated by this Section 8 (or such
additional limitations as may be included in an Award agreement).
(b) Terms. The exercise price per Share of a Stock
Appreciation Right shall be an amount determined by the Committee but in no
event shall such amount be less than the greater of (i) the Fair Market Value of
a Share on the date the Stock Appreciation Right is granted or, in the case of a
Stock Appreciation Right granted in conjunction with an Option, or a portion
thereof, the Option Price of the related Option and (ii) an amount permitted by
applicable laws, rules, by-laws or policies of regulatory authorities or stock
exchanges. Each Stock Appreciation Right granted independent of an Option shall
entitle a Participant upon exercise to an amount equal to (i) the excess of (A)
the Fair Market Value on the exercise date of one Share over (B) the exercise
price per Share, times (ii) the number of Shares covered by the Stock
Appreciation Right. Each Stock Appreciation Right granted in conjunction with an
Option, or a portion thereof, shall entitle a Participant to surrender to the
Company the unexercised Option, or any portion thereof, and to receive from the
Company in exchange therefor an amount equal to (i) the excess of (A) the Fair
Market Value on the exercise date of one Share over (B) the Option Price per
Share, times (ii) the number of Shares covered by the Option, or portion
thereof, which is surrendered. The date a notice of exercise is received by the
Company shall be the exercise date. Payment shall be made in Shares or in cash,
or partly in Shares and partly in cash, valued at such Fair Market Value, all as
shall be determined by the Committee. Stock Appreciation Rights may be exercised
from time to time upon actual receipt by the Company of written notice of
exercise stating the number of Shares subject to an exercisable Option with
respect to which the Stock Appreciation Right is being exercised. No fractional
Shares will be issued in payment for Stock Appreciation Rights, but instead cash
will be paid for a fraction or, if the Committee should so determine, the number
of Shares will be rounded downward to the next whole Share.
<PAGE>
(c) Limitations. The Committee may impose, in its discretion,
such conditions upon the exercisability or transferability of Stock Appreciation
Rights as it may deem fit.
(d) Limited Stock Appreciation Rights. The Committee may grant
LSARs that are exercisable upon the occurrence of specified contingent events.
Such LSARs may provide for a different method of determining appreciation, may
specify that payment will be made only in cash and may provide that any related
Awards are not exercisable while such LSARs are exercisable. Unless the context
otherwise requires, whenever the term "Stock Appreciation Right" is used in the
Plan, such term shall include LSARs.
9. Other Stock-Based Awards
(a) Generally. The Committee, in its sole discretion, may
grant Awards of Shares, Awards of restricted Shares and Awards that are valued
in whole or in part by reference to, or are otherwise based on the Fair Market
Value of, Shares ("Other Stock-Based Awards"). Such Other Stock-Based Awards
shall be in such form, and dependent on such conditions, as the Committee shall
determine, including, without limitation, the right to receive one or more
Shares (or the equivalent cash value of such Shares) upon the completion of a
specified period of service, the occurrence of an event and/or the attainment of
performance objectives. Other Stock-Based Awards may be granted alone or in
addition to any other Awards granted under the Plan. Subject to the provisions
of the Plan, the Committee shall determine to whom and when Other Stock-Based
Awards will be made, the number of Shares to be awarded under (or otherwise
related to) such Other Stock-Based Awards; whether such Other Stock-Based Awards
shall be settled in cash, Shares or a combination of cash and Shares; and all
other terms and conditions of such Awards (including, without limitation, the
vesting provisions thereof). Notwithstanding the foregoing: (i) any Other
Stock-Based Awards consisting of restricted Shares or phantom Shares that are
payable in Shares, and which are not identified by the Committee as being
granted in lieu of salary or a cash bonus, shall become fully vested no sooner
than the earlier of (A) the death or Disability of the Participant to whom such
Other Stock-Based Award was made or (B) either (I) three years after the date of
grant thereof, if vesting is based solely upon the lapse of time or (II) one
year after the date of grant thereof, if vesting is based on performance
<PAGE>
criteria; and (ii) any Other Stock-Based Awards, other than restricted Shares or
phantom Shares described in Section 9(a)(i) above, shall be identified by the
Committee as being granted in lieu of salary or a cash bonus; provided, however,
that the Committee may grant Other Stock-Based Awards that do not comply with
the foregoing provisions of this sentence if such Other Stock-Based Awards in
the aggregate do not exceed five percent of the total number of Shares that may
be issued under the Plan.
(b) Performance-Based Awards. Notwithstanding anything to the
contrary herein, certain Other Stock-Based Awards granted under this Section 9
may be granted in a manner which is deductible by the Company under Section
162(m) of the Code (or any successor section thereto) ("Performance-Based
Awards"). A Participant's Performance-Based Award shall be determined based on
the attainment of written performance goals approved by the Committee for a
performance period established by the Committee (i) while the outcome for that
performance period is substantially uncertain and (ii) no more than 90 days
after the commencement of the performance period to which the performance goal
relates or, if less, the number of days which is equal to 25 percent of the
relevant performance period. The performance goals, which must be objective,
shall be based upon one or more of the following criteria: (i) consolidated
earnings before or after taxes (including earnings before interest, taxes,
depreciation and amortization); (ii) net income; (iii) operating income; (iv)
earnings per Share; (v) book value per Share; (vi) return on stockholders'
equity; (vii) expense management; (viii) return on investment; (ix) improvements
in capital structure; (x) profitability of an identifiable business unit or
product; (xi) maintenance or improvement of profit margins; (xii) stock price;
(xiii) market share; (xiv) revenues or sales; (xv) costs; (xvi) cash flow;
(xvii) working capital and (xviii) return on assets. The foregoing criteria may
relate to the Company, one or more of its Subsidiaries or one or more of its
divisions or units, or any combination of the foregoing, and may be applied on
an absolute basis and/or be relative to one or more peer group companies or
indices, or any combination thereof, all as the Committee shall determine. In
addition, to the degree consistent with Section 162(m) of the Code (or any
successor section thereto), the performance goals may be calculated without
regard to extraordinary items. The maximum amount of a Performance-Based Award
to any Participant with respect to a fiscal year of the Company shall be
<PAGE>
$6,000,000. The Committee shall determine whether, with respect to a performance
period, the applicable performance goals have been met with respect to a given
Participant and, if they have, to so certify and ascertain the amount of the
applicable Performance-Based Award. No Performance-Based Awards will be paid for
such performance period until such certification is made by the Committee. The
amount of the Performance-Based Award actually paid to a given Participant may
be less than the amount determined by the applicable performance goal formula,
at the discretion of the Committee. The amount of the Performance-Based Award
determined by the Committee for a performance period shall be paid to the
Participant at such time as determined by the Committee in its sole discretion
after the end of such performance period; provided, however, that a Participant
may, if and to the extent permitted by the Committee and consistent with the
provisions of Section 162(m) of the Code, elect to defer payment of a
Performance-Based Award.
10. Adjustments Upon Certain Events
Notwithstanding any other provisions in the Plan to the contrary, the
following provisions shall apply to all Awards granted under the Plan:
(a) Generally. In the event of any change in the outstanding
Shares after the Effective Date by reason of any Share dividend or split,
reorganization, recapitalization, merger, consolidation, spin-off, combination
or exchange of Shares or other corporate exchange, or any distribution to
stockholders of Shares other than regular cash dividends, the Committee in its
sole discretion and without liability to any person may make such substitution
or adjustment, if any, as it deems to be equitable, as to (i) the number or kind
of Shares or other securities issued or reserved for issuance pursuant to the
Plan or pursuant to outstanding Awards, (ii) the Option Price and/or (iii) any
other affected terms of such Awards.
<PAGE>
(b) Change in Control. Except as otherwise provided in an
Award agreement, in the event of a Change in Control, the Committee in its sole
discretion and without liability to any person may take such actions, if any, as
it deems necessary or desirable with respect to any Award (including, without
limitation, (i) the acceleration of an Award, (ii) the payment of a cash amount
in exchange for the cancellation of an Award and/or (iii) the requiring of the
issuance of substitute Awards that will substantially preserve the value, rights
and benefits of any affected Awards previously granted hereunder) as of the date
of the consummation of the Change in Control.
11. No Right to Employment
The granting of an Award under the Plan shall impose no obligation on
the Company or any Subsidiary to continue the employment of a Participant and
shall not lessen or affect the Company's or Subsidiary's right to terminate the
employment of such Participant.
12. Successors and Assigns
The Plan shall be binding on all successors and assigns of the Company
and a Participant, including without limitation, the estate of such Participant
and the executor, administrator or trustee of such estate, or any receiver or
trustee in bankruptcy or representative of the Participant's creditors.
13. Nontransferability of Awards
An Award shall not be transferable or assignable by the Participant
otherwise than by will or by the laws of descent and distribution. During the
lifetime of a Participant, an Award shall be exercisable only by such
Participant. An Award exercisable after the death of a Participant may be
exercised by the legatees, personal representatives or distributees of the
Participant. Notwithstanding anything to the contrary herein, the Committee, in
its sole discretion, shall have the authority to waive this Section 13 (or any
part thereof) to the extent that this Section 13 (or any part thereof) is not
required under the rules promulgated under any law, rule or regulation
applicable to the Company.
<PAGE>
14. Amendments or Termination
The Board may amend, alter or discontinue the Plan, but no amendment,
alteration or discontinuation shall be made which, (a) without the approval of
the stockholders of the Company, would (except as is provided in Section 10 of
the Plan), (i) increase the total number of Shares reserved for the purposes of
the Plan, (ii) change the maximum number of Shares for which Awards may be
granted to any Participant, (iii) materially increase the benefits accruing to
Participants under the Plan or (iv) materially modify the eligibility
requirements for participation in the Plan, or (b) without the consent of a
Participant, would impair any of the rights or obligations under any Award
theretofore granted to such Participant under the Plan; provided, however, that
the Committee may amend the Plan in such manner as it deems necessary to permit
the granting of Awards meeting the requirements of the Code or other applicable
laws. Notwithstanding anything to the contrary herein, the Board may not amend,
alter or discontinue the provisions relating to Section 10(b) of the Plan after
the occurrence of a Change in Control.
15. International Participants
With respect to Participants who reside or work outside the United
States of America and who are not (and who are not expected to be) "covered
employees" within the meaning of Section 162(m) of the Code, the Committee may,
in its sole discretion, amend the terms of the Plan or Awards with respect to
such Participants in order to conform such terms with the requirements of local
law.
16. Choice of Law
The Plan shall be governed by and construed in accordance with the
laws of the State of New York applicable to contracts made and to be performed
in the State of New York.
17. Effectiveness of the Plan
The Plan shall be effective as of the Spinoff Date. If the Plan is not
approved by the stockholders of the Company prior to the first anniversary of
the Spinoff Date, no Awards may be granted thereafter.
<PAGE>
Exhibit 10(g)
1996 ACNIELSEN CORPORATION
NON-EMPLOYEE DIRECTORS' STOCK INCENTIVE PLAN
1. Purpose of the Plan
The purpose of the Plan is to aid the Company in attracting, retaining
and compensating non-employee directors and to enable them to increase their
ownership of Shares. The Plan will be beneficial to the Company and its
stockholders since it will allow non-employee directors of the Board to have a
greater personal financial stake in the Company through the ownership of Shares,
in addition to underscoring their common interest with stockholders in
increasing the value of the Shares on a long-term basis.
2. Definitions
The following capitalized terms used in the Plan have the respective
meanings set forth in this Section:
(a) Act: The Securities Exchange Act of 1934, as
amended, or any successor thereto.
(b) Award: An Option or Share of Restricted Stock
granted pursuant to the Plan.
(c) Beneficial Owner: As such term is defined in Rule
13d-3 under the Act (or any successor rule thereto).
(d) Board: The Board of Directors of the Company.
(e) Change in Control: The occurrence of any of the
following events:
(i) any Person (other than the Company, any trustee
or other fiduciary holding securities under an
employee benefit plan of the Company, or any company
owned, directly or indirectly, by the stockholders of
the Company in substantially the same proportions as
their ownership of stock of the Company), becomes the
Beneficial Owner, directly or indirectly, of
securities of the Company representing 20% or more of
the combined voting power of the Company's
then-outstanding securities;
<PAGE>
(ii) during any period of twenty-four months (not
including any period prior to the Effective Date),
individuals who at the beginning of such period
constitute the Board, and any new director (other
than (A) a director nominated by a Person who has
entered into an agreement with the Company to effect
a transaction described in Sections 2(e)(i), (iii) or
(iv) of the Plan, (B) a director nominated by any
Person (including the Company) who publicly announces
an intention to take or to consider taking actions
(including, but not limited to, an actual or
threatened proxy contest) which if consummated would
constitute a Change in Control or (C) a director
nominated by any Person who is the Beneficial Owner,
directly or indirectly, of securities of the Company
representing 10% or more of the combined voting power
of the Company's securities) whose election by the
Board or nomination for election by the Company's
stockholders was approved in advance by a vote of at
least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of
the period or whose election or nomination for
election was previously so approved, cease for any
reason to constitute at least a majority thereof;
(iii) the stockholders of the Company approve any
transaction or series of transactions under which the
Company is merged or consolidated with any other
company, other than a merger or consolidation (A)
which would result in the voting securities of the
Company outstanding immediately prior thereto
continuing to represent (either by remaining
outstanding or by being converted into voting
securities of the surviving entity) more than 66 2/3%
of the combined voting power of the voting securities
of the Company or such surviving entity outstanding
immediately after such merger or consolidation and
(B) after which no Person holds 20% or more of the
combined voting power of the then-outstanding
securities of the Company or such surviving entity;
or
<PAGE>
(iv) the stockholders of the Company approve a plan
of complete liquidation of the Company or an
agreement for the sale or disposition by the Company
of all or substantially all of the Company's assets.
(f) Code: The Internal Revenue Code of 1986, as amended,
or any successor thereto.
(g) Committee: The Compensation Committee of the Board.
(h) Company: ACNielsen Corporation, a Delaware
corporation.
(i) D&B: The Dun & Bradstreet Corporation, a Delaware
corporation.
(j) Disability: Inability to continue to serve as a
non-employee director of the Board due to a medically
determinable physical or mental impairment which
constitutes a permanent and total disability, as
determined by the Committee (excluding any member
thereof whose own Disability is at issue in a given
case) based upon such evidence as it deems necessary
and appropriate. A Participant shall not be
considered disabled unless he or she furnishes such
medical or other evidence of the existence of the
Disability as the Committee, in its sole discretion,
may require.
(k) Effective Date: The date on which the Plan takes
effect, as defined pursuant to Section 13 of the
Plan.
(l) Fair Market Value: On a given date, the arithmetic
mean of the high and low prices of the Shares as
reported on such date on the Composite Tape of the
principal national securities exchange on which such
Shares are listed or admitted to trading, or, if no
Composite Tape exists for such national securities
exchange on such date, then on the principal national
securities exchange on which such Shares are listed
or admitted to trading, or, if the Shares are not
listed or admitted on a national securities exchange,
the arithmetic mean of the per Share closing bid
<PAGE>
price and per Share closing asked price on such date
as quoted on the National Association of Securities
Dealers Automated Quotation System (or such market
in which such prices are regularly quoted), or, if
there is no market on which the Shares are regularly
quoted, the Fair Market Value shall be the value
established by the Committee in good faith. If no
sale of Shares shall have been reported on such
Composite Tape or such national securities exchange
on such date or quoted on the National Association of
Securities Dealers Automated Quotation System on
such date, then the immediately preceding date on
which sales of the Shares have been so reported or
quoted shall be used.
(m) Option: A stock option granted pursuant to Section
6 of the Plan.
(n) Option Price: The purchase price per Share of an
Option, as determined pursuant to Section 6(b) of
the Plan.
(o) Participant: Any director of the Company who is not
an employee of the Company or any Subsidiary of the
Company as of the date that an Award is granted.
(p) Person: As such term is used for purposes of Section
13(d) or 14(d) of the Act (or any successor section
thereto).
(q) Plan: The 1996 ACNielsen Corporation Non-Employee
Directors' Stock Incentive Plan.
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(r) Restricted Stock: A Share of restricted stock
granted pursuant to Section 7 of the Plan.
(s) Retirement: Termination of service with the Company
after such Participant has attained age 70,
regardless of the length of such Participant's
service; or, with the prior written consent of the
Committee (excluding any member thereof whose own
Retirement is at issue in a given case), termination
of service at an earlier age after the Participant
has completed six or more years of service with the
Company.
(t) Shares: Shares of common stock, par value $0.01 per
share, of the Company.
(u) Spinoff Date: The date on which the Shares that are
owned by D&B are distributed to the holders of
record of shares of D&B.
(v) Subsidiary: A subsidiary corporation, as defined in
Section 424(f) of the Code (or any successor section
thereto).
3. Shares Subject to the Plan
The total number of Shares which may be issued under the Plan is
300,000. The Shares may consist, in whole or in part, of unissued Shares or
treasury Shares. The issuance of Awards or the payment of cash upon exercise of
an Award shall reduce the total number of Shares available under the Plan, as
applicable. Shares which are (a) withheld pursuant to Section 6(d)(iv) of the
Plan or (b) subject to Awards which terminate or lapse may be granted again
under the Plan.
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4. Administration
The Plan shall be administered by the Committee, which may delegate its
duties and powers in whole or in part to any subcommittee thereof consisting
solely of at least two "non-employee directors" within the meaning of Rule 16b-3
under the Act (or any successor rule thereto). The Committee is authorized to
interpret the Plan, to establish, amend and rescind any rules and regulations
relating to the Plan, and to make any other determinations that it deems
necessary or desirable for the administration of the Plan. The Committee may
correct any defect or supply any omission or reconcile any inconsistency in the
Plan in the manner and to the extent the Committee deems necessary or desirable.
Any decision of the Committee in the interpretation and administration of the
Plan, as described herein, shall lie within its sole and absolute discretion and
shall be final, conclusive and binding on all parties concerned (including, but
not limited to, Participants and their beneficiaries or successors).
5. Eligibility
All Participants shall be eligible to participate under this Plan.
6. Terms and Conditions of Options
Options granted under the Plan shall be non-qualified stock options for
federal income tax purposes, as evidenced by the related Option agreements, and
shall be subject to the foregoing and the following terms and conditions and to
such other terms and conditions, not inconsistent therewith, as the Committee
shall determine:
(a) Grants. A Participant may receive, on such dates as
determined by the Committee in its sole discretion, grants consisting of such
number of Options as determined by the Committee in its sole discretion.
(b) Option Price. The Option Price per Share shall be
determined by the Committee, but shall not be less than 100% of the Fair Market
Value of the Shares on the date an Option is granted.
(c) Exercisability. Options granted under the Plan shall be
exercisable at such time and upon such terms and conditions as may be determined
by the Committee, but in no event shall an Option be exercisable more than ten
years after the date it is granted.
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(d) Exercise of Options. Except as otherwise provided in the
Plan or in a related Option agreement, an Option may be exercised for all, or
from time to time any part, of the Shares for which it is then exercisable. For
purposes of Section 6 of the Plan, the exercise date of an Option shall be the
later of the date a notice of exercise is received by the Company and, if
applicable, the date payment is received by the Company pursuant to clauses (i),
(ii) or (iii) in the following sentence. The purchase price for the Shares as to
which an Option is exercised shall be paid to the Company in full at the time of
exercise at the election of the Participant (i) in cash, (ii) in Shares having a
Fair Market Value equal to the aggregate Option Price for the Shares being
purchased and satisfying such other requirements as may be imposed by the
Committee, (iii) partly in cash and partly in such Shares, (iv) through the
withholding of Shares (which would otherwise be delivered to the Participant)
with an aggregate Fair Market Value on the exercise date equal to the aggregate
Option Price and satisfying such other requirements as may be imposed by the
Committee or (v) through the delivery of irrevocable instructions to a broker to
deliver promptly to the Company an amount equal to the aggregate Option Price
for the Shares being purchased. No Participant shall have any rights to
dividends or other rights of a stockholder with respect to Shares subject to an
Option until the Participant has given written notice of exercise of the Option,
paid in full for such Shares and, if applicable, has satisfied any other
conditions imposed by the Committee pursuant to the Plan.
(e) Exercisability Upon Termination of Service by Death. If a
Participant's service with the Company and its Subsidiaries terminates by reason
of death after the date of grant of an Option, (i) the unexercised portion of
such Option shall immediately vest in full and (ii) such portion may thereafter
be exercised during the shorter of (A) the remaining stated term of the Option
or (B) five years after the date of death.
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(f) Exercisability Upon Termination of Service by Disability
or Retirement. If a Participant's service with the Company and its Subsidiaries
terminates by reason of Disability or Retirement after the date of grant of an
Option, (i) the unexercised portion of such Option shall immediately vest in
full and (ii) such portion may thereafter be exercised during the shorter of (A)
the remaining stated term of the Option or (B) five years after the date of such
termination of service; provided, however, that if a Participant dies within a
period of five years after such termination of service, the unexercised portion
of the Option may thereafter be exercised, during the shorter of (i) the
remaining stated term of the Option or (ii) the period that is the longer of (A)
five years after the date of such termination of service or (B) one year after
the date of death.
(g) Effect of Other Termination of Service. If a Participant's
service with the Company and its Subsidiaries terminates for any reason other
than death, Disability or Retirement after the date of grant of an Option as
described above, the unexercised portion of an Option may thereafter be
exercised during the period ending ninety days after the date of such
termination of service, but only to the extent to which such Option was
exercisable at the time of such termination of service.
7. Terms and Conditions of Restricted Stock
Restricted Stock granted under the Plan shall be subject to the
foregoing and the following terms and conditions and to such other terms and
conditions, not inconsistent therewith, as the Committee shall determine:
(a) Grants. A Participant may receive, on such dates as
determined by the Committee in its sole discretion, grants consisting of such
amounts of Restricted Stock as determined by the Committee in its sole
discretion.
(b) Restrictions. Restricted Stock granted under the Plan may
not be sold, transferred, pledged, assigned or otherwise disposed of under any
circumstances; provided, however, that the foregoing restrictions shall elapse
at such time and upon such terms and conditions as may be specified by the
Committee in the related Award agreement(s).
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(c) Acceleration. Notwithstanding anything in the Plan to the
contrary, (i) the restrictions set forth in Section 7(b) of the Plan shall
automatically elapse in the event that a Participant terminates service with the
Company as a result of death or Disability and (ii) the Committee (excluding any
member thereof whose own Award is at issue in a given case) may, in its sole
discretion, accelerate the elapsing of the restrictions set forth in Section
7(b) of the Plan in the event that a Participant terminates service with the
Company for any other reason. In the absence of such acceleration, all Shares of
Restricted Stock as to which restrictions have not previously elapsed pursuant
to Section 7(b) of the Plan shall be forfeited upon the termination of a
Participant's service with the Company for reasons other than death or
Disability.
8. Adjustments Upon Certain Events
Notwithstanding any other provisions in the Plan to the contrary, the
following provisions shall apply to all Awards granted under the Plan:
(a) Generally. In the event of any change in the outstanding
Shares after the Effective Date by reason of any Share dividend or split,
reorganization, recapitalization, merger, consolidation, spin-off, combination
or exchange of Shares or other corporate exchange, or any distribution to
stockholders of Shares other than regular cash dividends, the Committee in its
sole discretion and without liability to any person may make such substitution
or adjustment, if any, as it deems to be equitable, as to (i) the number or kind
of Shares or other securities issued or reserved for issuance pursuant to the
Plan or pursuant to outstanding Awards, (ii) the Option Price and/or (iii) any
other affected terms of such Awards.
(b) Change in Control. In the event of a Change in Control,
the Committee in its sole discretion and without liability to any person may
take such actions, if any, as it deems necessary or desirable with respect to
any Award (including, without limitation, (i) the acceleration of an Award, (ii)
the payment of a cash amount in exchange for the cancellation of an Award and/or
(iii) the requiring of the issuance of substitute Awards that will substantially
preserve the value, rights and benefits of any affected Awards previously
granted hereunder) as of the date of the consummation of the Change in Control.
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9. Successors and Assigns
The Plan shall be binding on all successors and assigns of the Company
and a Participant, including without limitation, the estate of such Participant
and the executor, administrator or trustee of such estate, or any receiver or
trustee in bankruptcy or representative of the Participant's creditors.
10. Amendments or Termination
The Board may amend, alter or discontinue the Plan, but no amendment,
alteration or discontinuation shall be made which would impair the rights of any
Participant under any Award theretofore granted without such Participant's
consent.
11. Nontransferability of Awards
An Award shall not be transferable or assignable by the Participant
otherwise than by will or by the laws of descent and distribution. During the
lifetime of a Participant, an Award shall be exercisable only by such
Participant. An Award exercisable after the death of a Participant may be
exercised by the legatees, personal representatives or distributees of the
Participant. Notwithstanding anything to the contrary herein, the Committee, in
its sole discretion, shall have the authority to waive this Section 11 (or any
part thereof) to the extent that this Section 11 (or any part thereof) is not
required under the rules promulgated under any law, rule or regulation
applicable to the Company.
12. Choice of Law
The Plan shall be governed by and construed in accordance with the
laws of the State of New York applicable to contracts made and to be performed
in the State of New York.
13. Effectiveness of the Plan
The Plan shall be effective as of the Spinoff Date.
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