<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
ACNIELSEN CORPORATION
AT
$36.75 NET PER SHARE
BY
ARTIST ACQUISITION, INC.
A WHOLLY OWNED SUBSIDIARY OF
VNU N.V.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON TUESDAY, JANUARY 23, 2001, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS BEING MADE PURSUANT TO THE TERMS OF AN AGREEMENT AND PLAN OF
MERGER, DATED AS OF DECEMBER 17, 2000 (THE "MERGER AGREEMENT"), AMONG VNU N.V.
("PARENT"), ARTIST ACQUISITION, INC. ("PURCHASER") AND ACNIELSEN CORPORATION
(THE "COMPANY"). THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE
HAVING BEEN VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE
OFFER AT LEAST THE NUMBER OF SHARES (AS DEFINED HEREIN) THAT, TOGETHER WITH ANY
SHARES THEN OWNED BY PARENT, SHALL CONSTITUTE A MAJORITY OF THE THEN OUTSTANDING
SHARES ON A FULLY DILUTED BASIS (INCLUDING, WITHOUT LIMITATION, ALL SHARES
ISSUABLE UPON THE CONVERSION OF ANY CONVERTIBLE SECURITIES OR UPON THE EXERCISE
OF ANY OPTIONS, WARRANTS, OR RIGHTS) (THE "MINIMUM CONDITION"), (II) ANY
APPLICABLE WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT
OF 1976, AS AMENDED (THE "HSR ACT"), HAVING EXPIRED OR BEEN TERMINATED PRIOR TO
THE EXPIRATION OF THE OFFER (THE "HSR CONDITION") AND (III) THE EUROPEAN
COMMISSION HAVING ISSUED A DECISION UNDER COUNCIL REGULATION NO. 4064/89, AS
AMENDED (THE "EU MERGER REGULATION"), DECLARING THE OFFER AND THE MERGER
COMPATIBLE WITH THE EC COMMON MARKET (THE "EU MERGER CONDITION"). THE OFFER IS
ALSO SUBJECT TO CERTAIN OTHER CONDITIONS CONTAINED IN THIS OFFER TO PURCHASE.
THE OFFER IS NOT SUBJECT TO A FINANCING CONDITION. SEE SECTIONS 1 AND 14, WHICH
SET FORTH IN FULL THE CONDITIONS TO THE OFFER.
------------------------
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY DETERMINED THAT THE
MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING EACH OF
THE OFFER AND THE MERGER (EACH AS DEFINED HEREIN) (COLLECTIVELY THE
"TRANSACTIONS"), ARE FAIR TO, AND IN THE BEST INTEREST OF, THE HOLDERS OF
SHARES, HAS APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
THEREBY, INCLUDING EACH OF THE OFFER AND MERGER, AND HAS RESOLVED TO RECOMMEND
THAT THE HOLDERS OF SHARES ACCEPT THE OFFER AND TENDER SHARES PURSUANT TO THE
OFFER AND, IF APPLICABLE, VOTE THEIR SHARES IN FAVOR OF THE ADOPTION OF THE
MERGER AGREEMENT.
------------------------
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares should either (i) complete and sign the accompanying Letter of
Transmittal (or a manually signed facsimile thereof) in accordance with the
instructions in the Letter of Transmittal and mail or deliver it together with
the certificate(s) evidencing tendered Shares, and any other required documents,
to the Depositary or tender such Shares pursuant to the procedure for book-entry
transfer set forth in Section 3 or (ii) request such stockholder's broker,
dealer, commercial bank, trust company or other nominee to effect the
transaction for such stockholder. Any stockholder whose Shares are registered in
the name of a broker, dealer, commercial bank, trust company or other nominee
must contact such broker, dealer, commercial bank, trust company or other
nominee if such stockholder desires to tender such Shares.
A stockholder who desires to tender Shares and whose certificates evidencing
such Shares are not immediately available, or who cannot comply with the
procedure for book-entry transfer on a timely basis, may tender such Shares by
following the procedure for guaranteed delivery set forth in Section 3.
Questions or requests for assistance may be directed to the Information
Agent or to the Dealer Manager at their respective addresses and telephone
numbers set forth on the back cover of this Offer to Purchase. Additional copies
of this Offer to Purchase, the Letter of Transmittal and the Notice of
Guaranteed Delivery may also be obtained from the Information Agent or from
brokers, dealers, commercial banks or trust companies.
------------------------
THE DEALER MANAGER FOR THE OFFER IS:
MERRILL LYNCH & CO.
December 22, 2000
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SUMMARY TERM SHEET.......................................... ii
INTRODUCTION................................................ 1
1. Terms of the Offer; Expiration Date.................... 4
2. Acceptance for Payment and Payment for Shares.......... 6
3. Procedures for Accepting the Offer and Tendering
Shares................................................. 6
4. Withdrawal Rights...................................... 9
5. Certain Federal Income Tax Consequences................ 9
6. Price Range of Shares; Dividends....................... 10
7. Certain Information Concerning the Company............. 11
8. Certain Information Concerning Purchaser and Parent.... 11
9. Financing of the Offer and the Merger.................. 12
10. Background of the Offer; Contacts with the Company; the
Merger Agreement and Related Agreements................ 13
11. Purpose of the Offer; Plans for the Company After the
Offer and the Merger..................................... 29
12. Dividends and Distributions............................ 31
13. Possible Effects of the Offer on the Market for Shares,
NYSE Listing, Margin Regulations and Exchange Act
Registration........................................... 31
14. Certain Conditions of the Offer........................ 32
15. Certain Legal Matters and Regulatory Approvals......... 34
16. Fees and Expenses...................................... 36
17. Miscellaneous.......................................... 37
SCHEDULES
Schedule I. Directors and Executive Officers of Parent and
Purchaser
</TABLE>
i
<PAGE> 3
SUMMARY TERM SHEET
This summary term sheet highlights selected information from this Offer to
Purchase, and may not contain all of the information that is important to you.
To better understand our offer to you and for a complete description of the
legal terms of the offer, you should read this entire offer to purchase and the
accompanying Letter of Transmittal carefully. Questions or requests for
assistance may be directed to the Information Agent or the Dealer Manager at
their respective addresses and telephone numbers on the last page of this Offer
to Purchase.
WHO IS OFFERING TO BUY MY SECURITIES?
- We are Artist Acquisition, Inc., a newly formed Delaware corporation and
a wholly owned subsidiary of Parent. We have been organized in connection
with this offer and have not carried on any activities other than in
connection with this offer.
- VNU N.V. or "Parent" is a company organized under the laws of the
Netherlands, with securities listed on the AEX-Stock Exchange. Parent is
one of the world's leading media and information companies and has
leading market positions in marketing and media information, directories
and consumer information, as well as educational information. The
principal offices of Parent are located at Ceylonpoort 5-25, 2037 AA
Haarlem, The Netherlands. The telephone number of Parent at such location
is 011-31-23-546-3463.
WHAT ARE THE CLASSES AND AMOUNTS OF SECURITIES SOUGHT IN THIS OFFER?
- We are seeking to purchase all the issued and outstanding shares of
common stock, par value $.01 per share, including the associated
preferred share purchase rights, of ACNielsen Corporation or the
"Company." See the "Introduction" and Section 1.
HOW MUCH ARE YOU OFFERING TO PAY AND WHAT IS THE FORM OF PAYMENT?
- We are offering to pay $36.75 per share, net to each seller in cash and
without any interest. See the "Introduction" and Section 1.
- If you tender your shares in the offer, you will not be obligated to pay
brokerage fees or commissions or, except as otherwise provided in
Instruction 6 of the Letter of Transmittal, stock transfer taxes with
respect to the sale of your shares pursuant to the offer. See the
"Introduction."
WHAT ARE THE MOST SIGNIFICANT CONDITIONS OF THE OFFER?
- We are not obligated to purchase any shares unless the number of shares
validly tendered and not properly withdrawn before the expiration of the
offer represents at least a majority of the then outstanding shares on a
fully diluted basis. See Section 1 and Section 14.
- We are not obligated to purchase any shares unless prior to the
expiration of the offer (i) any applicable waiting period under the HSR
Act has expired or been terminated and (ii) any applicable approval under
the EU Merger Regulation has been obtained. See Section 14.
- We are not obligated to purchase any shares unless prior to the
expiration of the offer the condition relating to the advice of the
Central Works' Council of Parent has been satisfied. See Section 14.
- The offer also is subject to a number of other conditions which are
described in greater detail in Sections 1 and 14.
DO YOU HAVE FINANCIAL RESOURCES TO MAKE PAYMENT?
- The offer is not subject to a financing condition. Parent will provide
the funds necessary to purchase the shares in the offer from a
combination of existing resources and from new borrowing arrangements
consisting of a revolving credit facility of up to $3 billion arranged
with Merrill Lynch International as agent and arranger. See Section 9.
ii
<PAGE> 4
IS YOUR FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN THE OFFER?
- Because the form of payment consists solely of cash and our offer is not
contingent upon our receipt of financing, we do not believe our financial
condition is relevant to your decision to tender in the offer.
HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?
- You will have at least until 12:00 midnight, New York City time, on
January 23, 2001, to decide whether to tender your shares of the Company's
common stock in the offer. If you cannot deliver everything that is
required in order to make a valid tender by that time, you may be able to
use a guaranteed delivery procedure which is described in Section 3 of
this Offer to Purchase. See Section 3.
CAN THE OFFER BE EXTENDED, AND UNDER WHAT CIRCUMSTANCES?
- Subject to the terms of the merger agreement and applicable law, we can
extend the period of time during which the offer remains open. We have
agreed in the merger agreement that we may extend the offer if certain
conditions to the offer have not been satisfied or, if at the expiration
date of the offer, shares constituting more than 80% but less than 90% of
the outstanding shares have been tendered and not withdrawn. See Section
1.
- We have also agreed in the merger agreement that, at the request of the
Company, we will extend the offer if certain conditions to the offer have
not been satisfied.
HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED?
- If we decide to extend the offer, we will inform Citibank, N.A., which is
the Depositary for the offer, of that fact, and will issue a press
release giving the new expiration date no later than 9:00 a.m., New York
City time, on the day after the day on which the offer was previously
scheduled to expire. See Section 1.
HOW DO I TENDER MY SHARES?
To tender your shares in the offer, you must:
- complete and sign the accompanying Letter of Transmittal (or a manually
signed facsimile of the Letter of Transmittal) in accordance with the
instructions in the Letter of Transmittal and mail or deliver it together
with your share certificates, and any other required documents, to the
Depositary;
- tender your shares pursuant to the procedure for book-entry transfer set
forth in Section 3; or
- if your share certificates are not immediately available or if you cannot
deliver your share certificates, and any other required documents, to the
Depositary, prior to the expiration of the offer, or you cannot complete
the procedure for delivery by book-entry transfer on a timely basis, you
may still tender your shares if you comply with the guaranteed delivery
procedures described in Section 3.
UNTIL WHAT TIME CAN I WITHDRAW PREVIOUSLY TENDERED SHARES?
- You may withdraw previously tendered shares any time prior to the
expiration of the offer, and, unless we have accepted and paid for the
shares pursuant to the offer, you may also withdraw any tendered shares
at any time after February 19, 2001. See Section 4.
HOW DO I WITHDRAW PREVIOUSLY TENDERED SHARES?
- To withdraw previously tendered shares, you must deliver a written or
facsimile notice of withdrawal with the required information to the
Depositary while you still have the right to withdraw. If you tendered
shares by giving instructions to a broker or bank, you must instruct the
broker or bank to arrange for the withdrawal of your shares. See Section
4.
iii
<PAGE> 5
WHAT DOES THE COMPANY'S BOARD OF DIRECTORS THINK OF THE OFFER?
- We are making the offer on the basis of the merger agreement. The Board
of the Company has unanimously determined that the merger agreement and
the transactions contemplated thereby, including each of the offer and
the merger, are fair to, and in the best interests of, you, as a
stockholder of the Company, has approved, adopted and declared advisable
the merger agreement and the transactions contemplated thereby, and has
resolved to recommend that you accept the offer and tender your shares.
WILL THE COMPANY CONTINUE AS A PUBLIC COMPANY?
- No. If the merger occurs, the Company will no longer be publicly owned.
Even if the merger does not occur, if we purchase all the tendered
shares, there may be so few remaining stockholders and publicly held
shares that the shares will no longer be eligible to be traded through
the New York Stock Exchange or other securities market and there may not
be a public trading market for the shares. As a result, the Company may
cease making filings with the Securities and Exchange Commission or the
"Commission", or otherwise cease being required to comply with Commission
rules relating to publicly held companies. See Section 13.
WILL THE TENDER OFFER BE FOLLOWED BY A MERGER IF ALL THE SHARES ARE NOT
TENDERED?
- If we accept for payment and pay for at least a majority of the
outstanding shares on a fully diluted basis, we will merge with and into
the Company. If the merger occurs, the Company will become a privately
owned company, and each issued and then outstanding share (other than any
shares held in the treasury of the Company, or owned by Parent or any of
their subsidiaries and any shares held by stockholders seeking appraisal
of their shares) shall be canceled and converted automatically into the
right to receive $36.75 per share, in cash (or any greater amount per
share paid pursuant to the offer).
IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES?
- If you decide not to tender your shares in the offer and the merger
occurs, unless you have exercised your rights to seek appraisal of your
shares, you will receive in the merger the same amount of cash per share
as if you had tendered your shares in the offer. Therefore, if the merger
occurs and you have not sought an appraisal, the only difference to you
between tendering and not tendering your shares is that you will be paid
earlier if you tender your shares. The rights you have to seek appraisal
of your shares are described in this Offer to Purchase. See Section 11.
- If you decide not to tender your shares in the offer and the merger does
not occur, if we purchase all the tendered shares, there may be so few
remaining stockholders and publicly held shares that the shares will no
longer be eligible to be traded through the New York Stock Exchange, or
other securities market, there may not be a public trading market for the
shares and the Company may cease making filings with the Commission or
otherwise cease being required to comply with Commission rules relating
to publicly held companies. See Section 13.
WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
- On December 15, 2000, the last full trading day before we announced our
offer, the last reported closing price per share reported on the New York
Stock Exchange was $24.63 per share. See Section 7.
WITH WHOM MAY I TALK IF I HAVE QUESTIONS ABOUT THE OFFER?
- You can call Innisfree M&A Incorporated, which is the Information Agent
for the offer, at (888) 750-5834 (Bankers and Brokers may call collect at
(212) 750-5833) or Merrill Lynch & Co., which is the Dealer Manager, for
the offer at (212) 236-3790. See the back cover of this Offer to
Purchase.
iv
<PAGE> 6
To the Holders of Common Stock of
ACNIELSEN CORPORATION:
INTRODUCTION
Artist Acquisition, Inc., a Delaware corporation ("Purchaser") and a wholly
owned subsidiary of VNU N.V., a corporation organized under the laws of the
Netherlands ("Parent"), hereby offers to purchase all the shares of common
stock, par value $.01 per share, including the associated preferred share
purchase rights (together, the "Shares"), of ACNielsen Corporation, a Delaware
corporation (the "Company"), that are issued and outstanding for $36.75 per
Share, net to the seller in cash, without interest, upon the terms and subject
to the conditions set forth in this Offer to Purchase and in the related Letter
of Transmittal (which, together with this Offer to Purchase and any amendments
or supplements hereto or thereto, collectively constitute the "Offer"). See
Section 8 for additional information concerning Parent and Purchaser.
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as otherwise provided in Instruction 6 of the Letter of
Transmittal, stock transfer taxes with respect to the purchase of Shares by
Purchaser pursuant to the Offer. However, any tendering stockholder or other
payee who fails to complete and sign the Substitute Form W-9 that is included in
the Letter of Transmittal may be subject to a required back-up U.S. federal
income tax withholding of 31% of the gross proceeds payable to such stockholder
or other payee pursuant to the Offer. See Section 5. Purchaser or Parent will
pay all charges and expenses of Merrill Lynch & Co. ("Merrill Lynch"), which is
acting as Dealer Manager for the Offer (the "Dealer Manager"), Citibank, N.A.
(the "Depositary") and Innisfree M&A Incorporated (the "Information Agent")
incurred in connection with the Offer. See Section 16.
THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD") HAS UNANIMOUSLY
DETERMINED THAT THE MERGER AGREEMENT (AS DEFINED HEREIN) AND THE TRANSACTIONS
CONTEMPLATED THEREBY, INCLUDING EACH OF THE OFFER AND THE MERGER (EACH AS
DEFINED HEREIN) ARE FAIR TO, AND IN THE BEST INTEREST OF, THE HOLDERS OF SHARES,
HAS APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY,
INCLUDING EACH OF THE OFFER AND MERGER, AND HAS RESOLVED TO RECOMMEND THAT THE
HOLDERS OF SHARES ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER
AND, IF APPLICABLE, VOTE THEIR SHARES IN FAVOR OF THE ADOPTION OF THE MERGER
AGREEMENT.
Evercore Group Inc. ("Evercore") has delivered to the Board its written
opinion, dated December 17, 2000, to the effect that, based upon and subject to
various considerations and assumptions set forth in such opinion, the
consideration to be received by the stockholders pursuant to each of the Offer
and the Merger is fair to such stockholders from a financial point of view. A
copy of the written opinion of Evercore is contained in the Company's
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9"),
which has been filed with the Securities and Exchange Commission (the
"Commission") in connection with the Offer and which is being mailed to
stockholders concurrently herewith, and stockholders are urged to read such
opinion carefully in its entirety for a description of the assumptions made,
matters considered and limitations of the review undertaken by Evercore.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE HAVING BEEN
VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST
THE NUMBER OF SHARES THAT, TOGETHER WITH ANY SHARES THEN OWNED BY PARENT, SHALL
CONSTITUTE A MAJORITY OF THE THEN OUTSTANDING SHARES ON A FULLY DILUTED BASIS
(INCLUDING, WITHOUT LIMITATION, ALL SHARES ISSUABLE UPON THE CONVERSION OF ANY
CONVERTIBLE SECURITIES OR UPON THE EXERCISE OF ANY OPTIONS, WARRANTS, OR RIGHTS)
(THE "MINIMUM CONDITION"), (II) ANY APPLICABLE WAITING PERIOD UNDER THE
HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED (THE "HSR
ACT"), HAVING EXPIRED OR BEEN TERMINATED PRIOR TO THE EXPIRATION OF THE OFFER
(THE "HSR CONDITION"), AND (III) THE EUROPEAN COMMISSION HAVING ISSUED A
DECISION UNDER COUNCIL REGULATION NO. 4064/89, AS AMENDED (THE "EU MERGER
REGULATION"), DECLARING THE OFFER AND THE MERGER COMPATIBLE WITH THE EC COMMON
MARKET (THE "EU MERGER CONDITION"). THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER
CONDITIONS CONTAINED IN THIS OFFER TO PURCHASE. SEE SECTIONS 1 AND 14, WHICH SET
FORTH IN FULL THE CONDITIONS TO THE OFFER.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of December 17, 2000 (the "Merger Agreement"), among Parent, Purchaser and
the Company. The Merger Agreement provides,
1
<PAGE> 7
among other things, that as soon as practicable after the purchase of Shares
pursuant to the Offer and the satisfaction or waiver, if permissible, of the
other conditions set forth in the Merger Agreement and in accordance with the
relevant provisions of the General Corporation Law of the State of Delaware
("Delaware Law"), Purchaser will be merged with and into the Company (the
"Merger"). As a result of the Merger, the Company will continue as the surviving
corporation (the "Surviving Corporation") and will become a wholly owned
subsidiary of Parent. At the effective time of the Merger (the "Effective
Time"), each Share issued and outstanding immediately prior to the Effective
Time (other than Shares held in the treasury of the Company or Shares owned by
Parent, or any direct or indirect wholly owned subsidiary of Parent or of the
Company, and other than Shares held by stockholders who shall have demanded and
perfected appraisal rights under Delaware Law) shall be canceled and converted
automatically into the right to receive $36.75 in cash, or any higher price that
may be paid per Share in the Offer, without interest (the "Merger
Consideration"). Stockholders who demand and fully perfect appraisal rights
under Delaware Law will be entitled to receive, in connection with the Merger,
cash for the fair value of their Shares as determined pursuant to the procedures
prescribed by Delaware Law. See Section 11. The Merger Agreement is more fully
described in Section 10. Certain federal income tax consequences of the sale of
Shares pursuant to the Offer and the Merger, as the case may be, are described
in Section 5.
Simultaneously with the execution of the Merger Agreement, the Company
entered into supplemental employment arrangements with certain members of
management, including amended change of control agreements with each of Nicholas
Trivisonno, Michael Connors, Earl Doppelt and Robert Chrenc, the Chairman and
Chief Executive Officer, Vice Chairman, General Counsel, and Chief Financial
Officer of the Company, respectively (the "Executive Agreements"). The
agreements provide, among other things, that each of Messrs. Trivisonno,
Connors, Doppelt and Chrenc will be entitled to a lump-sum payment of his
benefits under his change in control agreement if he is employed by the Company
on the date that is 90 days following the consummation of the Offer or if prior
to this date, he dies or becomes disabled. In consideration for this accelerated
payment of their benefits Messrs. Trivisonno, Connors, Doppelt and Chrenc have
each agreed, among other things, to refrain from competing with the Company or
soliciting the Company's customers during the eighteen-month period following
the consummation of the Offer. See Section 10.
The Merger Agreement provides that, promptly upon the purchase by Purchaser
of at least a majority of the Shares pursuant to the Offer and from time to time
thereafter, Purchaser shall be entitled to designate up to such number of
directors, rounded up to the next whole number, on the Company's Board (the
"Board") as would equal that percentage of Parent's members on the Board equal
to the percentage of outstanding Shares beneficially owned by Parent and its
affiliates. In the Merger Agreement, the Company has agreed, at such time, to
promptly take all actions available to the Company to cause such persons
designated by Parent to be elected as directors of the Company, including using
its reasonable best efforts to increase the size of the Board or securing the
resignations of incumbent directors, or both.
The consummation of the Merger is subject to the satisfaction or waiver of
certain conditions, including the consummation of the Offer, and, if necessary,
the approval and adoption of the Merger Agreement and the Merger by the
requisite vote of the stockholders of the Company. For a more detailed
description of the conditions to the Merger, see Section 10. Under the Company's
Restated Certificate of Incorporation and Delaware Law, the affirmative vote of
the holders of a majority of the outstanding Shares is the only vote of any
class or series of the Company's capital stock required to approve and adopt the
Merger Agreement and the Merger. Consequently, if Purchaser acquires (pursuant
to the Offer or otherwise) at least a majority of the outstanding Shares, then
Purchaser will have sufficient voting power to adopt the Merger Agreement
without the vote of any other stockholder. See Sections 10 and 11.
Under Delaware Law, if Purchaser acquires, pursuant to the Offer, at least
90% of the then outstanding Shares, Purchaser will be able to adopt the Merger
Agreement without a vote of the Company's stockholders. In such event, Parent
and Purchaser shall take all necessary action to cause the Merger to become
effective in accordance with Delaware Law as promptly as reasonably practicable
after such acquisition, without a meeting of the Company's stockholders. If,
however, Purchaser does not acquire at least 90% of the then outstanding Shares
pursuant to the Offer and a vote of the Company's stockholders is required under
Delaware Law, a significantly longer period of time will be required to effect
the Merger. See Section 11.
2
<PAGE> 8
The Company has advised Purchaser that as of November 30, 2000, 57,830,966
Shares were issued and outstanding, 12,942,060 Shares were reserved for issuance
pursuant to employee stock options and 2,471,445 Shares were held in the
treasury of the Company. As a result, as of such date, the Minimum Condition
would be satisfied if Purchaser acquired 35,386,514 Shares. Also, as of such
date, Purchaser could cause the Merger to become effective in accordance with
Delaware Law, without a meeting of the Company's stockholders, if Purchaser
acquired 63,695,724 Shares.
The Company has issued one preferred share purchase right (a "Right") for
each outstanding share of common stock of the Company pursuant to the Rights
Agreement, dated as of October 17, 1996, between the Company and First Chicago
Trust Company of New York (the "Rights Agreement"). The Company has represented
in the Merger Agreement that it has amended its Rights Agreement (the "Rights
Amendment") to ensure that (a) neither a "Distribution Date" nor a "Stock
Acquisition Date" (in each case as defined in the Rights Agreement) will occur,
and none of Parent or Purchaser or any of their "Affiliates" or "Associates"
will be deemed to be an "Acquiring Person" (in each case as defined in the
Rights Agreement), by reason of the execution and delivery of the Merger
Agreement or the consummation of the transactions to be effected pursuant to the
Merger Agreement and (b) the Rights will expire immediately prior to the
consummation of the Offer. The Company has further represented that the Rights
Amendment is sufficient to render the Rights inoperative with respect to the
acquisition of Shares by Parent, Purchaser or their affiliates pursuant to the
Merger Agreement, the Offer and the Merger.
No appraisal rights are available in connection with the Offer; however,
stockholders may have appraisal rights in connection with the Merger regardless
of whether the Merger is consummated with or without a vote of the Company's
stockholders. See Section 11.
On December 18, 2000, Parent filed with the Federal Trade Commission (the
"FTC") and Antitrust Division of the Department of Justice (the "Antitrust
Division") a Premerger Notification and Report Form under the HSR Act with
respect to the Offer. Accordingly, the statutory waiting period under the HSR
Act applicable to the Offer will expire at 11:59 p.m., New York City time, on
January 1, 2001, unless extended by the FTC or the Antitrust Division requesting
additional information from Parent with respect to the Offer. If such a request
is made, the waiting period will expire at 11:59 p.m., New York City time, on
the tenth calendar day after substantial compliance with such request.
Thereafter, the waiting period may only be extended by court order or with the
consent of Parent. The waiting period under the HSR Act may be terminated prior
to expiration by the FTC and the Antitrust Division. Parent has requested early
termination of the waiting period, although there can be no assurance that this
request will be granted.
Parent expects to notify the Commission of the European Union of the Offer
during the first week of January, 2001 pursuant to the EU Merger Regulation.
Purchaser will be barred from consummating the Offer until the Transactions have
been declared compatible with the European Union common market by the Commission
of the European Union or the Commission of the European Union has failed to make
a decision within one month of the notification. Consequently, the Offer may be
consummated after the one month period, unless the Commission of the European
Union determines the Transactions may not be compatible with the European Union
common market, in which case an in-depth investigation would commence. From the
date the Commission of the European Union determines to commence an in-depth
investigation, it has four months to render a decision on the merits of a
transaction.
Parent and the Company conduct operations in a number of jurisdictions
where other regulatory filings or approvals may be required or advisable in
connection with the completion of the Transactions. Parent and the Company are
currently in the process of reviewing whether any such filings are, in fact,
required or advisable. It is possible that one or more of these filings may not
be made or one or more of the approvals that are required to be obtained prior
to the Effective Time may not be obtained prior to the expiration of the Offer
or the Merger. See Section 15 for additional information regarding such filings
or approvals under the HSR Act, the EU Merger Regulation and in other
jurisdictions.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
3
<PAGE> 9
1. TERMS OF THE OFFER; EXPIRATION DATE.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of such extension or
amendment), Purchaser will accept for payment and pay for all Shares validly
tendered (and not withdrawn in accordance with the procedures set forth in
Section 4) on or prior to the Expiration Date. "Expiration Date" means 12:00
midnight, New York City time, on January 23, 2001, unless and until Purchaser
(subject to the terms and conditions of the Merger Agreement) shall have
extended the period during which the Offer is open, in which case "Expiration
Date" shall mean the latest time and date at which the Offer, as may be extended
by Purchaser, shall expire.
The Offer is subject to the conditions set forth under Section 14,
including the satisfaction of the Minimum Condition, the HSR Condition and the
EU Merger Condition. Subject to the applicable rules and regulations of the
Commission and subject to the terms and conditions of the Merger Agreement,
Purchaser expressly reserves the right to waive any such condition in whole or
in part (except the Minimum Condition as well as the conditions set forth in the
next paragraph), in its sole discretion. Subject to the applicable rules and
regulations of the Commission and subject to the terms and conditions of the
Merger Agreement, Purchaser also expressly reserves the right to increase the
price per Share payable in the Offer and to make any other changes in the terms
and conditions of the Offer; provided, however, that the Purchaser may not,
without the prior consent of the Company, decrease the price per Share payable
in the Offer, reduce the number of Shares to be purchased in the Offer or impose
conditions to the Offer in addition to those set forth in Section 14.
The Merger Agreement provides that, without the prior written consent of
the Company, Purchaser shall not (i) change the form of the consideration to be
paid in the Offer, (ii) decrease the amount of the consideration to be paid in
the Offer, (iii) decrease the number of Shares sought pursuant to the Offer,
(iv) extend the expiration date of the Offer beyond the initial Expiration Date,
except (A) as required by applicable law, (B) that if, immediately prior to the
Expiration Date (as it may be extended), the Shares tendered and not withdrawn
pursuant to the Offer constitute at least 80% but less than 90% of the
outstanding Shares, Purchaser may, in its sole discretion, extend the Offer for
one or more periods not to exceed an aggregate of five business days,
notwithstanding that all conditions to the Offer are satisfied as of such
Expiration Date, or (C) that if any condition to the Offer has not been
satisfied or waived, Purchaser may, in its sole discretion, extend the
Expiration Date for one or more periods (not in excess of 10 business days
each), but in no event later than June 30, 2001, (v) waive the Minimum
Condition, (vi) waive the condition relating to the expiration of the waiting
period under the HSR Act or the issuance of a decision under the EU Merger
Regulation or the condition relating to the non-termination of the Merger
Agreement, (vii) amend any term or other condition of the Offer in any manner
adverse to holders of Shares, or (viii) impose any additional condition to the
Offer; provided, however that, except as set forth above and subject to
applicable legal requirements, Purchaser may waive any condition to the Offer in
its sole discretion; and provided further that the Offer may be extended in
connection with an increase in the consideration to be paid pursuant to the
Offer so as to comply with applicable rules and regulations of the Commission.
If certain of the conditions to the Offer, including (i) the expiration or
termination of any applicable waiting period under the HSR Act or the condition
relating to the issuance of a decision under the EU Merger Regulation; (ii) the
absence of any statute, regulation, judgment, order or injunction that is
enacted, entered, enforced, promulgated or deemed applicable to the Offer or the
Merger, that would prohibit or impose any material limitations on Parent's or
Purchaser's acquisition of the Shares or ownership or operation of all or a
material portion of their or the Company's business or assets; and (iii) the
absence of certain disruptions in the securities or banking markets, shall not
have been satisfied or waived at the initial Expiration Date, Parent will, at
the request of the Company, cause Purchaser to extend the Expiration Date for
one or more periods (not in excess of 10 business days each) but in no event
later than June 30, 2001. If the Offer shall not have been consummated on the
scheduled Expiration Date due to the failure to satisfy the condition relating
to the Central Works' Council of Parent (the "Works' Council"), Parent will, at
the request of the Company, cause Purchaser to extend the Expiration Date for
one or more periods (not in excess of 10 business days each), but in no event
later than September 30, 2001.
4
<PAGE> 10
During any such extension, all Shares previously tendered and not withdrawn
will remain subject to the Offer and subject to the right of a tendering
stockholder to withdraw such stockholder's Shares. See Section 4. Under no
circumstances will interest be paid on the purchase price for tendered Shares,
whether or not the Offer is extended. Any extension of the Offer may be effected
by Purchaser giving oral or written notice of such extension to the Depositary.
Purchaser shall pay for all Shares validly tendered and not withdrawn as
soon as practicable following the acceptance of Shares for payment pursuant to
the Offer. Notwithstanding the immediately preceding sentence and subject to the
applicable rules of the Commission and the terms and conditions of the Offer and
the Merger Agreement, Purchaser also expressly reserves the right (i) to extend
or terminate the Offer and not to accept for payment or pay for any Shares not
theretofore accepted for payment or paid for, upon the occurrence of any of the
conditions to the Offer specified in Section 14, and (ii) to amend the Offer or
to waive any conditions to the Offer in any respect consistent with the
provisions of the Merger Agreement described above, in each case by giving oral
or written notice of such delay, termination, waiver or amendment to the
Depositary and by making public announcement thereof.
Any such extension, termination, waiver or amendment will be followed as
soon as practicable by public announcement thereof, such announcement in the
case of an extension to be made no later than 9:00 a.m., New York City time, on
the next business day after the previously scheduled Expiration Date. Subject to
applicable law (including Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange
Act, which require that material changes be promptly disseminated to
stockholders in a manner reasonably designed to inform them of such changes) and
without limiting the manner in which Purchaser may choose to make any public
announcement, Purchaser will have no obligation to publish, advertise or
otherwise communicate any such public announcement other than by issuing a press
release to the Dow Jones News Service or the Public Relations Newswire.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, Purchaser will extend the Offer to the extent required by Rules l4d-4(c),
l4d-6(d) and 14e-1 under the Exchange Act. Subject to the terms of the Merger
Agreement, if, prior to the Expiration Date, Purchaser should decide to decrease
the number of Shares being sought or to increase or decrease the consideration
being offered in the Offer, such decrease in the number of Shares being sought
or such increase or decrease in the consideration being offered will be
applicable to all stockholders whose Shares are accepted for payment pursuant to
the Offer and, if at the time notice of any such decrease in the number of
Shares being sought or such increase or decrease in the consideration being
offered is first published, sent or given to holders of such Shares, the Offer
is scheduled to expire at any time earlier than the period ending on the tenth
business day from and including the date that such notice is first so published,
sent or given, the Offer will be extended at least until the expiration of such
ten business day period.
There will be no subsequent offering period after the expiration of the
Offer.
For purposes of the Offer, a "business day" means any day on which the
principal offices of the Commission in Washington, D.C. are open to accept
filings, or, in the case of determining a date when any payment is due, any day
on which banks are not required or authorized to close in New York City, and
consists of the time period from 12:01 a.m. through 12:00 midnight, New York
City time.
The Company has provided Purchaser with the Company's stockholder list and
security position listings, including the most recent list of names, addresses
and security positions of non-objecting beneficial owners in the possession of
the Company, for the purpose of disseminating the Offer to holders of Shares.
This Offer to Purchase and the related Letter of Transmittal will be mailed by
Purchaser to record holders of Shares whose names appear on the Company's
stockholder list and will be furnished, for subsequent transmittal to beneficial
owners of Shares, to brokers, dealers, commercial banks, trust companies and
similar persons whose names, or the names of whose nominees, appear on the
stockholder list or, if applicable, who are listed as participants in a clearing
agency's security position listing.
5
<PAGE> 11
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), Purchaser will accept for payment all Shares validly tendered
(and not properly withdrawn in accordance with Section 4) prior to the
Expiration Date as soon as practicable after the occurrence of the Expiration
Date. Purchaser shall pay for all Shares validly tendered and not withdrawn as
soon as practicable following the acceptance of Shares for payment pursuant to
the Offer. See Sections 1 and 15.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of (i) the
certificates evidencing such Shares (the "Share Certificates") or timely
confirmation (a "Book-Entry Confirmation") of a book-entry transfer of such
Shares into the Depositary's account at The Depository Trust Company (the
"Book-Entry Transfer Facility") pursuant to the procedures set forth in Section
3, (ii) the Letter of Transmittal (or a manually signed facsimile thereof),
properly completed and duly executed, with any required signature guarantees or
an Agent's Message (as defined below), in connection with the book-entry
transfer and (iii) any other documents required under the Letter of Transmittal.
The term "Agent's Message" means a message, transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of the
Book-Entry Confirmation which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares that are the subject of such Book-Entry
Confirmation, that such participant has received and agrees to be bound by the
Letter of Transmittal and that Purchaser may enforce such agreement against such
participant.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered and not properly
withdrawn as, if and when Purchaser gives oral or written notice to the
Depositary of Purchaser's acceptance for payment of such Shares pursuant to the
Offer. Upon the terms and subject to the conditions of the Offer, payment for
Shares accepted for payment pursuant to the Offer will be made by deposit of the
purchase price therefor with the Depositary, which will act as agent for
tendering stockholders for the purpose of receiving payments from Purchaser and
transmitting such payments to tendering stockholders whose Shares have been
accepted for payment. UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE
FOR SHARES BE PAID, REGARDLESS OF ANY DELAY IN MAKING SUCH PAYMENT.
If any tendered Shares are not accepted for payment for any reason pursuant
to the terms and conditions of the Offer, or if Share Certificates are submitted
evidencing more Shares than are tendered, Share Certificates evidencing
unpurchased Shares will be returned, without expense to the tendering
stockholder (or, in the case of Shares tendered by book-entry transfer into the
Depositary's account at a Book-Entry Transfer Facility pursuant to the procedure
set forth in Section 3, such Shares will be credited to an account maintained at
such Book-Entry Transfer Facility), as soon as practicable following the
expiration or termination of the Offer.
Purchaser reserves the right to transfer or assign, in whole or from time
to time in part, to one or more of its affiliates, the right to purchase all or
any portion of the Shares tendered pursuant to the Offer, but any such transfer
or assignment will not relieve Purchaser of its obligations under the Offer and
will in no way prejudice the rights of tendering stockholders to receive payment
for Shares validly tendered and accepted for payment pursuant to the Offer.
3. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES.
In order for a holder of Shares to tender Shares validly pursuant to the
Offer, the Letter of Transmittal (or a manually signed facsimile thereof),
properly completed and duly executed, together with any required signature
guarantees or, in the case of a book-entry transfer, an Agent's Message, and any
other documents required by the Letter of Transmittal, must be received by the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase and either (i) the Share Certificates evidencing tendered Shares must
be received by the Depositary at such address or such Shares must be tendered
pursuant to the procedure for book-entry transfer described below and a
Book-Entry Confirmation must be received by the Depositary (including an Agent's
Message if the tendering stockholder has not delivered a Letter of Transmittal),
in each
6
<PAGE> 12
case prior to the Expiration Date, or (ii) the tendering stockholder must comply
with the guaranteed delivery procedures described below.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT
THE OPTION AND RISK OF THE TENDERING STOCKHOLDER, AND THE DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
Book-Entry Transfer. The Depositary will establish accounts with respect
to the Shares at the Book-Entry Transfer Facility for purposes of the Offer
within two business days after the date of this Offer to Purchase. Any financial
institution that is a participant in the system of the Book-Entry Transfer
Facility may make a book-entry delivery of Shares by causing the Book-Entry
Transfer Facility to transfer such Shares into the Depositary's account at the
Book-Entry Transfer Facility in accordance with the Book-Entry Transfer
Facility's procedures for such transfer. However, although delivery of Shares
may be effected through book-entry transfer at the Book-Entry Transfer Facility,
the Letter of Transmittal (or a manually signed facsimile thereof), properly
completed and duly executed, together with any required signature guarantees, or
an Agent's Message, and any other required documents, must, in any case, be
received by the Depositary at one of its addresses set forth on the back cover
of this Offer to Purchase prior to the Expiration Date, or the tendering
stockholder must comply with the guaranteed delivery procedure described below.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE
DELIVERY TO THE DEPOSITARY.
Signature Guarantees. Signatures on all Letters of Transmittal must be
guaranteed by a firm which is a member of the Security Transfer Agent Medallion
Signature Program, or by any other "eligible guarantor institution," as such
term is defined in Rule 17Ad-15 under the Exchange Act (each of the foregoing
being referred to as an "Eligible Institution"), except in cases where Shares
are tendered (i) by a registered holder of Shares who has not completed either
the box entitled "Special Payment Instructions" or the box entitled "Special
Delivery Instructions" on the Letter of Transmittal or (ii) for the account of
an Eligible Institution. If a Share Certificate is registered in the name of a
person other than the signer of the Letter of Transmittal, or if payment is to
be made, or a Share Certificate not accepted for payment or not tendered is to
be returned, to a person other than the registered holder(s), then the Share
Certificate must be endorsed or accompanied by appropriate stock powers, in
either case signed exactly as the name(s) of the registered holder(s) appear on
the Share Certificate, with the signature(s) on such Share Certificate or stock
powers guaranteed by an Eligible Institution. See Instructions 1 and 5 of the
Letter of Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Share Certificates evidencing such Shares are
not immediately available or such stockholder cannot deliver the Share
Certificates and all other required documents to the Depositary prior to the
Expiration Date, or such stockholder cannot complete the procedure for delivery
by book-entry transfer on a timely basis, such Shares may nevertheless be
tendered, provided that all the following conditions are satisfied:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by Purchaser, is
received prior to the Expiration Date by the Depositary as provided below;
and
(iii) the Share Certificates (or a Book-Entry Confirmation) evidencing
all tendered Shares, in proper form for transfer, in each case together
with the Letter of Transmittal (or a manually signed facsimile thereof),
properly completed and duly executed, with any required signature
guarantees or, in the case of a book-entry transfer, an Agent's Message,
and any other documents required by the Letter of Transmittal are received
by the Depositary within three New York Stock Exchange, Inc. ("NYSE")
trading days after the date of execution of such Notice of Guaranteed
Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or mail or by
facsimile transmission to the Depositary and must include a guarantee by an
Eligible Institution in the form set forth in the form of Notice of Guaranteed
Delivery made available by Purchaser.
7
<PAGE> 13
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of the
Share Certificates evidencing such Shares, or a Book-Entry Confirmation of the
delivery of such Shares, and the Letter of Transmittal (or a manually signed
facsimile thereof), properly completed and duly executed, with any required
signature guarantees or, in the case of a book-entry transfer, an Agent's
Message, and any other documents required by the Letter of Transmittal.
Determination of Validity. ALL QUESTIONS AS TO THE FORM OF DOCUMENTS AND
THE VALIDITY, FORM, ELIGIBILITY (INCLUDING TIME OF RECEIPT) AND ACCEPTANCE FOR
PAYMENT OF ANY TENDER OF SHARES WILL BE DETERMINED BY PURCHASER, IN ITS SOLE
DISCRETION, WHICH DETERMINATION SHALL BE FINAL AND BINDING ON ALL PARTIES.
Purchaser reserves the absolute right to reject any and all tenders determined
by it not to be in proper form or the acceptance for payment of which may, in
the opinion of its counsel, be unlawful. Purchaser also reserves the absolute
right to waive any condition of the Offer to the extent permitted by applicable
law and the Merger Agreement or any defect or irregularity in the tender of any
Shares of any particular stockholder, whether or not similar defects or
irregularities are waived in the case of other stockholders. NO TENDER OF SHARES
WILL BE DEEMED TO HAVE BEEN VALIDLY MADE UNTIL ALL DEFECTS AND IRREGULARITIES
HAVE BEEN CURED OR WAIVED. NONE OF PURCHASER, PARENT OR ANY OF THEIR RESPECTIVE
AFFILIATES OR ASSIGNS, THE DEALER MANAGER, THE DEPOSITARY, THE INFORMATION AGENT
OR ANY OTHER PERSON WILL BE UNDER ANY DUTY TO GIVE NOTIFICATION OF ANY DEFECTS
OR IRREGULARITIES IN TENDERS OR INCUR ANY LIABILITY FOR FAILURE TO GIVE ANY SUCH
NOTIFICATION. Purchaser's interpretation of the terms and conditions of the
Offer (including the Letter of Transmittal and the instructions thereto) will be
final and binding.
A tender of Shares pursuant to any of the procedures described above will
constitute the tendering stockholder's acceptance of the terms and conditions of
the Offer, as well as the tendering stockholder's representation and warranty to
Purchaser that (i) such stockholder has the full power and authority to tender,
sell, assign and transfer the tendered Shares (and any and all other Shares or
other securities issued or issuable in respect of such Shares), and (ii) when
the same are accepted for payment by Purchaser, Purchaser will acquire good and
unencumbered title thereto, free and clear of all liens, restrictions, charges
and encumbrances and not subject to any adverse claims.
The acceptance for payment by Purchaser of Shares pursuant to any of the
procedures described above will constitute a binding agreement between the
tendering stockholder and Purchaser upon the terms and subject to the conditions
of the Offer.
Appointment as Proxy. By executing the Letter of Transmittal as set forth
above, a tendering stockholder irrevocably appoints designees of Purchaser as
such stockholder's agents, attorneys-in-fact and proxies, each with full power
of substitution, in the manner set forth in the Letter of Transmittal, to the
full extent of such stockholder's rights with respect to the Shares tendered by
such stockholder and accepted for payment by Purchaser (and with respect to any
and all other Shares or other securities issued or issuable in respect of such
Shares on or after December 17, 2000). All such powers of attorney and proxies
shall be considered irrevocable and coupled with an interest in the tendered
Shares. Such appointment will be effective when, and only to the extent that,
Purchaser accepts such Shares for payment. Upon such acceptance for payment, all
prior powers of attorney and proxies given by such stockholder with respect to
such Shares (and such other Shares and securities) will be revoked, without
further action, and no subsequent powers of attorney or proxies may be given nor
any subsequent written consent executed by such stockholder (and, if given or
executed, will not be deemed to be effective) with respect thereto. The
designees of Purchaser will, with respect to the Shares for which the
appointment is effective, be empowered to exercise all voting and other rights
of such stockholder as they in their sole discretion may deem proper at any
annual or special meeting of the Company's stockholders or any adjournment or
postponement thereof, by written consent in lieu of any such meeting or
otherwise. Purchaser reserves the right to require that, in order for Shares to
be deemed validly tendered, immediately upon Purchaser's payment for such
Shares, Purchaser must be able to exercise full voting rights with respect to
such Shares (and such other Shares and securities).
UNDER THE "BACKUP WITHHOLDING" PROVISIONS OF U.S. FEDERAL INCOME TAX LAW,
THE DEPOSITARY MAY BE REQUIRED TO WITHHOLD 31% OF ANY PAYMENTS OF CASH PURSUANT
TO THE OFFER. TO PREVENT BACKUP FEDERAL INCOME TAX WITHHOLDING WITH RESPECT TO
PAYMENT TO CERTAIN STOCKHOLDERS OF THE PURCHASE PRICE OF SHARES PURCHASED
8
<PAGE> 14
PURSUANT TO THE OFFER, EACH SUCH STOCKHOLDER MUST PROVIDE THE DEPOSITARY WITH
SUCH STOCKHOLDER'S CORRECT TAXPAYER IDENTIFICATION NUMBER AND CERTIFY THAT SUCH
STOCKHOLDER IS NOT SUBJECT TO BACKUP FEDERAL INCOME TAX WITHHOLDING BY
COMPLETING THE SUBSTITUTE FORM W-9 IN THE LETTER OF TRANSMITTAL. SEE INSTRUCTION
9 OF THE LETTER OF TRANSMITTAL.
4. WITHDRAWAL RIGHTS.
Tenders of Shares made pursuant to the Offer are irrevocable except that
such Shares may be withdrawn at any time prior to the Expiration Date and,
unless theretofore accepted for payment and paid for by Purchaser pursuant to
the Offer, may also be withdrawn at any time after February 19, 2001. If
Purchaser extends the Offer, is delayed in its acceptance for payment of Shares
or is unable to accept Shares for payment pursuant to the Offer for any reason,
then, without prejudice to Purchaser's rights under the Offer, the Depositary
may, nevertheless, on behalf of Purchaser, retain tendered Shares, and such
Shares may not be withdrawn except to the extent that tendering stockholders are
entitled to withdrawal rights as described in this Section 4, subject to Rule
14e-1(c) under the Exchange Act. Any such delay will be by an extension of the
Offer to the extent required by law. See Section 1.
For a withdrawal to be effective, a written or facsimile transmission
notice of withdrawal must be timely received by the Depositary at one of its
addresses set forth on the back cover page of this Offer to Purchase. Any such
notice of withdrawal must specify the name of the person who tendered the Shares
to be withdrawn, the number of Shares to be withdrawn and the name of the
registered holder of such Shares, if different from that of the person who
tendered such Shares. If Share Certificates evidencing Shares to be withdrawn
have been delivered or otherwise identified to the Depositary, then, prior to
the physical release of such Share Certificates, the serial numbers shown on
such Share Certificates must be submitted to the Depositary and the signature(s)
on the notice of withdrawal must be guaranteed by an Eligible Institution,
unless such Shares have been tendered for the account of an Eligible
Institution. If Shares have been tendered pursuant to the procedure for
book-entry transfer as set forth in Section 3, any notice of withdrawal must
specify the name and number of the account at the Book-Entry Transfer Facility
to be credited with the withdrawn Shares.
ALL QUESTIONS AS TO THE FORM AND VALIDITY (INCLUDING TIME OF RECEIPT) OF
ANY NOTICE OF WITHDRAWAL WILL BE DETERMINED BY PURCHASER, IN ITS SOLE
DISCRETION, WHOSE DETERMINATION WILL BE FINAL AND BINDING. NONE OF PURCHASER,
PARENT OR ANY OF THEIR RESPECTIVE AFFILIATES OR ASSIGNS, THE DEALER MANAGER, THE
DEPOSITARY, THE INFORMATION AGENT OR ANY OTHER PERSON WILL BE UNDER ANY DUTY TO
GIVE ANY NOTIFICATION OF ANY DEFECTS OR IRREGULARITIES IN ANY NOTICE OF
WITHDRAWAL OR INCUR ANY LIABILITY FOR FAILURE TO GIVE ANY SUCH NOTIFICATION.
Withdrawals of Shares may not be rescinded. Any Shares properly withdrawn
will thereafter be deemed not to have been validly tendered for purposes of the
Offer. However, withdrawn Shares may be re-tendered at any time prior to the
Expiration Date by following one of the procedures described in Section 3.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The following is a summary of the principal federal income tax consequences
of the Offer and the Merger to holders whose Shares are purchased pursuant to
the Offer or whose Shares are converted into the right to receive cash in the
Merger (whether upon receipt of the Merger Consideration or pursuant to the
proper exercise of dissenter's rights). The discussion applies only to holders
of Shares in whose hands Shares are capital assets, and may not apply to Shares
received pursuant to the exercise of employee stock options or otherwise as
compensation, or to holders of Shares who are not citizens or residents of the
United States of America.
THE TAX DISCUSSION SET FORTH BELOW IS INCLUDED FOR GENERAL INFORMATION
PURPOSES ONLY AND IS BASED UPON PRESENT LAW. BECAUSE INDIVIDUAL CIRCUMSTANCES
MAY DIFFER, EACH HOLDER OF SHARES SHOULD CONSULT SUCH HOLDER'S OWN TAX ADVISOR
TO DETERMINE THE APPLICABILITY OF THE RULES DISCUSSED TO SUCH STOCKHOLDER AND
THE PARTICULAR TAX EFFECTS OF THE OFFER AND THE MERGER, INCLUDING THE
APPLICATION AND EFFECT OF STATE, LOCAL AND OTHER TAX LAWS.
The receipt of cash pursuant to the Offer and the receipt of cash pursuant
to the Merger (whether as Merger Consideration or pursuant to the proper
exercise of dissenter's rights) will be a taxable transaction for
9
<PAGE> 15
federal income tax purposes (and also may be a taxable transaction under
applicable state, local and other income tax laws). In general, for federal
income tax purposes, a holder of Shares will recognize gain or loss equal to the
difference between such holder's adjusted tax basis in the Shares sold pursuant
to the Offer or converted to cash in the Merger and the amount of cash received
therefor. Gain or loss must be determined separately for each block of Shares
(i.e., Shares acquired at the same cost in a single transaction) sold pursuant
to the Offer or converted to cash in the Merger. Such gain or loss will be
capital gain or loss. Individual holders will be subject to tax on the net
amount of such gain at a maximum rate of 20% if the Shares were held for more
than 12 months. Special rules (and generally lower maximum rates) apply to
individuals in lower tax brackets. The deductibility of capital losses is
subject to certain limitations. Stockholders should consult their own tax
advisors in this regard.
Payments in connection with the Offer or the Merger may be subject to
backup withholding at a 31% rate. Backup withholding generally applies if a
stockholder (i) fails to furnish such stockholder's social security number or
taxpayer identification number ("TIN"), (ii) furnishes an incorrect TIN, (iii)
fails properly to report interest or dividends or (iv) under certain
circumstances, fails to provide a certified statement, signed under penalties of
perjury, that the TIN provided is such stockholder's correct number and that
such stockholder is not subject to backup withholding. Backup withholding is not
an additional tax but merely an advance payment, which may be refunded to the
extent it results in an overpayment of tax. Certain persons, including
corporations and financial institutions generally, are exempt from backup
withholding. Certain penalties apply for failure to furnish correct information
and for failure to include the reportable payments in income. Each stockholder
should consult with such stockholder's own tax advisor as to such stockholder's
qualifications for exemption from withholding and the procedure for obtaining
such exemption.
6. PRICE RANGE OF SHARES; DIVIDENDS.
The Shares are listed and principally traded on the NYSE. The following
table sets forth, for the quarters indicated, the high and low sales prices per
Share on the NYSE as reported by the Dow Jones News Service. The Company did not
pay or declare any dividends in the quarters indicated.
SHARES MARKET DATA
<TABLE>
<CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
1998:
Third Quarter............................................. $28.13 $19.69
Fourth Quarter............................................ $28.94 $20.44
1999:
First Quarter............................................. $28.38 $22.88
Second Quarter............................................ $30.25 $26.69
Third Quarter............................................. $31.69 $22.38
Fourth Quarter............................................ $25.25 $20.63
2000:
First Quarter............................................. $25.13 $16.50
Second Quarter............................................ $26.50 $21.00
Third Quarter............................................. $25.81 $22.94
Fourth Quarter (through December 15, 2000)................ $25.81 $21.94
</TABLE>
On December 15, the last full trading day prior to the announcement of the
execution of the Merger Agreement and of Purchaser's intention to commence the
Offer, the closing price per Share as reported on the NYSE was $24.63. On
December 21, 2000, the last full trading day prior to the commencement of the
Offer, the closing price per Share as reported on the NYSE was $36.13. As of
December 18, 2000, the approximate number of holders of record of the Shares was
5,046.
STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
10
<PAGE> 16
7. CERTAIN INFORMATION CONCERNING THE COMPANY.
Except as otherwise set forth in this Offer to Purchase, all of the
information concerning the Company contained in this Offer to Purchase has been
furnished by the Company or has been taken from or based upon publicly available
documents and records on file with the Commission and other public sources.
Neither Purchaser nor Parent assumes any responsibility for the accuracy or
completeness of the information concerning the Company furnished by the Company
or contained in such documents and records or for any failure by the Company to
disclose events which may have occurred or may affect the significance or
accuracy of any such information but which are unknown to Purchaser or Parent.
General. The Company is a Delaware corporation with its principal
executive offices located at 177 Broad Street, Stamford, Connecticut and its
telephone number at such address is (203) 961-3000. According to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1999, the
Company is a global leader in delivering market research, information and
analysis to the consumer products and services industries. The Company's
services are offered in over 100 countries around the globe. The Company
provides its clients with market research, information and analysis for
understanding and making critical decisions about their products and their
markets. The Company also conducts media and entertainment information
businesses, including its television audience measurement business which
operates outside the United States and Canada.
Available Information. The Company is subject to the informational filing
requirements of the Exchange Act and, in accordance therewith, is required to
file periodic reports, proxy statements and other information with the
Commission relating to its business, financial condition and other matters.
Information as of particular dates concerning the Company's directors and
officers, their remuneration, stock options granted to them, the principal
holders of the Company's securities and any material interest of such persons in
transactions with the Company is required to be disclosed in proxy statements
distributed to the Company's stockholders and filed with the Commission. Such
reports, proxy statements and other information should be available for
inspection at the public reference facilities maintained by the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and also should
be available for inspection at the Commission's regional offices located at
Seven World Trade Center, 13th Floor, New York, New York 10048 and the
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies of such materials may also be obtained by mail, upon
payment of the Commission's customary fees, by writing to its principal office
at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. The
Commission also maintains a World Wide Website on the Internet at
http://www.sec.gov that contains reports and other information regarding issuers
that file electronically with the Commission.
8. CERTAIN INFORMATION CONCERNING PURCHASER AND PARENT.
General. Purchaser is a newly incorporated Delaware corporation organized
in connection with the Offer and the Merger and has not carried on any
activities other than in connection with the Offer and the Merger. The principal
offices of Purchaser are located at 770 Broadway, New York, New York 10003-9595
and its telephone number at such address is (646) 654-5000. Purchaser is a
wholly owned subsidiary of Parent.
Until immediately prior to the time that Purchaser will purchase Shares
pursuant to the Offer, it is not anticipated that Purchaser will have any
significant assets or liabilities or engage in activities other than those
incidental to its formation and capitalization and the transactions contemplated
by the Offer and the Merger. Because Purchaser is newly formed and has minimal
assets and capitalization, no meaningful financial information regarding
Purchaser is available.
Parent is a corporation organized under the laws of the Netherlands, with
securities listed on the AEX -- Stock Exchange. Parent is one of the world's
leading media and information companies and has leading market positions in
marketing and media information, directories and consumer information, as well
as educational information. The principal offices of Parent are located at
Ceylonpoort 5-25, 2037 AA Haarlem, The Netherlands. The telephone number of
Parent at such location is 011-31-23-546-3463.
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<PAGE> 17
The name, citizenship, business address, business telephone number,
principal occupation or employment, and five-year employment history for each of
the directors and executive officers of Purchaser and Parent and certain other
information are set forth in Schedule I hereto. Except as described in this
Offer to Purchase and in Schedule I hereto, none of Parent, Purchaser or, to the
best knowledge of such corporations, any of the persons listed on Schedule I to
the Offer of Purchase has during the last five years (i) been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
(ii) been a party to any judicial or administrative proceeding (except for
matters that were dismissed without sanction or settlement) that resulted in a
judgment, decree or final order enjoining the person from future violations of,
or prohibiting activities subject to, federal or state securities laws or
finding any violation of such laws.
Neither Parent nor Purchaser owns any Shares. Except as described in this
Offer to Purchase, (i) none of Purchaser, Parent, nor, to the best knowledge of
Purchaser and Parent, any of the persons listed in Schedule I to this Offer to
Purchase or any associate or majority owned subsidiary of Purchaser, Parent or
any of the persons so listed, beneficially owns or has any right to acquire any
Shares and (ii) none of Purchaser, Parent, nor, to the best knowledge of
Purchaser and Parent, any of the persons or entities referred to above nor any
director, executive officer or subsidiary of any of the foregoing has effected
any transaction in the Shares during the past 60 days.
Except as provided in the Merger Agreement, and as otherwise described in
this Offer to Purchase, none of Purchaser, Parent, nor, to the best knowledge of
Purchaser and Parent, any of the persons listed in Schedule I to this Offer to
Purchase, has any agreement, arrangement, understanding, whether or not legally
enforceable, with any other person with respect to any securities of the
Company, including, but not limited to, the transfer or voting of such
securities, joint ventures, loan or option arrangements, puts or calls,
guaranties of loans, guaranties against loss or the giving or withholding of
proxies, consents or authorizations. Except as set forth in this Offer to
Purchase, since December 1, 1998, neither Purchaser, Parent nor, to the best
knowledge of Purchaser and Parent, any of the persons listed on Schedule I
hereto, has had any transaction with the Company or any of its executive
officers, directors or affiliates that is required to be reported under the
rules and regulations of the Commission applicable to the Offer. Except as set
forth in this Offer to Purchase, since December 1, 1998, there have been no
negotiations, transactions or material contacts between any of Purchaser,
Parent, or any of their respective subsidiaries or, to the best knowledge of
Purchaser and Parent, any of the persons listed in Schedule I to this Offer to
Purchase, on the one hand, and the Company or its affiliates, on the other hand,
concerning a merger, consolidation or acquisition, tender offer for or other
acquisition of any class of the Company's securities, an election of the
Company's directors or a sale or other transfer of a material amount of assets
of the Company.
9. FINANCING OF THE OFFER AND THE MERGER.
The Offer is not conditioned upon any financing arrangements. The total
amount of funds required by Purchaser to consummate the Offer and the Merger and
to pay related fees and expenses is estimated to be approximately $2.4 billion.
Purchaser will obtain all of such funds from Parent, either directly or
indirectly in the form of capital contributions and/or loans from Parent and its
affiliates. Parent will obtain all such funds pursuant to a Revolving Credit
Facility Agreement, dated as of December 17, 2000 (the "Credit Agreement"),
among Parent as borrower, Parent as guarantor, Merrill Lynch International as
agent and arranger and the banks from time to time parties thereto (the
"Banks"). This summary is not a complete description of the terms and conditions
of the Credit Agreement and is qualified in its entirety by reference to the
full text of the Credit Agreement, a copy which has been filed with the
Commission as an exhibit to the Schedule TO filed by Parent and Purchaser with
respect to the Offer.
Under the Credit Agreement, the Banks have made available to Parent a
364-day revolving credit facility of up to $3 billion (or, from time to time,
its equivalent in Euros). Loans under the Credit Agreement (the "Loans") may be
utilized to finance the transaction contemplated under the Merger Agreement, to
refinance certain indebtedness of the Company and its subsidiaries, and to
finance any other potential acquisitions by Parent or its subsidiaries of shares
in another entity. Parent is currently considering various refinancing
alternatives that may be pursued following consummation of the Offer, which may
include an equity offering by Parent, other borrowing or the use of other cash
resources. Such refinancing is not necessary to consummate the Offer or the
Merger.
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<PAGE> 18
Loans bear interest at LIBOR or, in the case of Loans denominated in Euros,
EURIBOR, plus the applicable margin, which generally ranges between 0.45% and
0.55%. Parent is obligated to pay a commitment commission on the undrawn portion
of the credit facility under the Credit Agreement at a rate per annum equal to
0.20%.
The Loans are subject to mandatory repayment in certain limited
circumstances. Voluntary prepayments of the Loans and voluntary reduction of the
credit facility are permitted, in whole or in part, at the option of Parent in
minimum principal amounts, without premium or penalty, subject to payment of an
additional fee under certain conditions.
The obligations of any of Parent's subsidiaries which may become future
borrowers under the Credit Agreement have been unconditionally guaranteed by
Parent, acting in its capacity as guarantor. Neither the Loans nor Parent's
guarantee obligation are secured by any collateral. The Credit Agreement
contains representations and warranties, conditions precedent, covenants, events
of default and other provisions customarily found in similar agreements.
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY; THE MERGER AGREEMENT AND
RELATED AGREEMENTS.
Over the past several years, various subsidiaries of Parent, and the
Company have engaged in various commercial transactions, including licensing
arrangements, in the ordinary course of their respective businesses.
During the period from late 1999 until November, 2000, representatives of
VNU, Inc., a wholly owned subsidiary of Parent, and the Company had discussions
with respect to creating an international joint venture wherein each party would
contribute certain of its media and film entertainment assets and license
certain technology. On January 5, 2000, VNU, Inc. and the Company entered into a
confidentiality agreement in connection with these discussions. In April, 2000
while negotiations and discussions were ongoing with respect to a possible joint
venture, VNU, Inc. became more interested in the Company as an acquisition
candidate and performed market and other analyses of the Company's business.
These activities culminated in a presentation by VNU, Inc.'s management to
Parent's Executive and Supervisory Boards on April 18, 2000, seeking
authorization to continue review of a possible combination of the two companies.
After receiving such authorization, VNU, Inc., its consultants and Merrill
Lynch, VNU, Inc.'s financial advisor, continued to research and assess the
business of the Company and the possible combination of the Company and VNU,
Inc.
On June 22, 2000, Nicholas Trivisonno, Chairman and Chief Executive Officer
of the Company and Gerald Hobbs, Chief Executive Officer of VNU, Inc. met for
dinner in New York City and discussed their respective businesses. Mr. Hobbs
spoke about potential strategies of Parent and transactions that might be
attractive to Parent, including possible business combination transactions with
the Company and others.
On September 5, 2000 Mr. Hobbs visited Mr. Trivisonno to discuss the
possibility of the combination of the two companies. On September 11, 2000, Mr.
Hobbs, Thomas Mastrelli, the Chief Operating Officer of VNU, Inc. and Dan
O'Shea, Chief Operating Officer of VNU MI, another wholly owned subsidiary of
Parent, along with a representative of Merrill Lynch, met with Mr. Trivisonno,
Earl Doppelt, Executive Vice President and General Counsel of the Company,
Michael Connors, Vice Chairman of the Company, Robert Chrenc, Executive Vice
President and the Chief Financial Officer of the Company, and a representative
of Evercore, the Company's financial advisor. At that meeting, the
representatives of the Company gave a presentation on the nature of the
Company's business, its operating results and its "Operation Leading Edge"
program.
On September 26, 2000, Mr. Doppelt met with James Ross, Vice President and
General Counsel of VNU, Inc. as well as representatives of Parent's outside
counsel, Shearman & Sterling, at the offices of Shearman & Sterling. Mr. Doppelt
reviewed the history of the action commenced by Information Resources, Inc. on
July 29, 1996 in the United States District Court for the Southern District of
New York, naming as defendants The Dun & Bradstreet Corporation, A.C. Nielsen
Company and IMS International, Inc. and its current status.
13
<PAGE> 19
On September 29, 2000, the Supervisory Board of Parent met and considered
the results of the meetings between the representatives of VNU, Inc. and the
Company and evaluations by executives of VNU, Inc. and Merrill Lynch of the
Company and the proposed combination. After considering the available
information, the Supervisory Board of Parent authorized VNU, Inc. to continue
discussions with the Company regarding its acquisition and to make a proposal to
acquire the Company for up to $32.00 per Share with the ability to go to $35.00
per Share under certain circumstances.
On October 5, 2000, Mr. Hobbs met with Mr. Trivisonno in Stamford,
Connecticut, and indicated that VNU, Inc. was prepared to make an offer to
acquire the Company in the range of $32.00 per Share, which might be increased
if the results of VNU, Inc.'s due diligence review of the Company were positive.
Mr. Trivisonno responded that he would not, and he believed the Company's Board
of Directors would not, support a transaction at that price. On October 10,
2000, Mr. Trivisonno telephoned Mr. Hobbs to confirm that the Company was not
interested in proceeding with a transaction on the terms outlined by Mr. Hobbs
at the October 5(th) meeting. Following this conversation, discussions between
VNU, Inc. and the Company regarding the proposed acquisition ceased and
conversations regarding the proposed joint venture resumed.
On November 10, 2000, Mr. Trivisonno met R.F. van den Bergh, the Chairman
of the Executive Board and Chief Executive Officer of Parent, for dinner in
Amsterdam, the Netherlands. During dinner, Mr. van den Bergh reiterated VNU,
Inc.'s previous offer of $31.75 to $32.25 per Share and, when Mr. Trevisonno
indicated that the Company would consider a transaction price at or above $40.00
per Share, indicated that Parent might be prepared to make an offer for the
Company for up to $35.00 per Share if the results of VNU, Inc.'s due diligence
were satisfactory.
On November 21, 2000, following discussions with VNU, Inc.'s advisors, Mr.
van den Bergh sent Mr. Trivisonno the following letter:
[PARENT LETTERHEAD]
November 21, 2000
Mr. Nicholas L. Trivisonno
Chairman and Chief
Executive Officer
ACNielsen Corporation
177 Broad Street
Stamford, CT 06901
Dear Nick,
As you, Jerry and I have previously discussed, the prospect of
combining our two companies presents compelling strategic and financial
advantages. The combination would create the world's leading media and
marketing information services company across all distribution platforms,
and reunite the ACNielsen brand.
While you and I both see the exciting opportunities such a combination
clearly presents for our two companies, the momentum we had developed
toward a possible transaction has unfortunately slowed recently as we have
worked to achieve a mutually acceptable view of the price to be paid to
ACNielsen's stockholders in the combination.
As you know, we believed that our proposal in October of a price in
the range of $32.00 per share fairly valued ACNielsen. That price
represented a premium of 37% over Monday's closing price of ACNielsen's
common stock and a 39% premium over the average trading price of
ACNielsen's common stock during the past 30 days. Nevertheless, you advised
me that this price did not adequately reflect your views of ACNielsen's
full value.
14
<PAGE> 20
We have reconsidered our prior proposal and are now prepared to
significantly improve that proposal in an effort to move forward quickly to
enter into a definitive agreement and clearly deliver full value to your
stockholders. Consistent with our discussions on November 10, 2000, I am
pleased to report that the Supervisory Board of VNU has formally authorized
me to present to you our revised offer to acquire all of the outstanding
shares of ACNielsen's common stock in a merger transaction in which your
stockholders would receive a price of $35.00 per share in cash. We believe
this enhanced offer fully reflects the value of ACNielsen, including the
appropriate financial benefits expected to result under Operation Leading
Edge. Additionally, this price provides a premium of 49% over Monday's
closing price of ACNielsen's common stock and a 52% premium over the
average trading price of ACNielsen's common stock during the past 30 days.
We are confident that our revised offer will be enthusiastically received
by your stockholders. Nick, this increase is a significant step forward on
our part and we are prepared to proceed on this basis only if you are
prepared to move forward promptly with us toward the completion of a
definitive agreement for the transaction.
We recognize that your Board of Directors will want to understand how
your management team would fit into the leadership structure of the
combined company. We hope and expect that your management team would
continue to play an important leadership role going forward. We will want
and need ACNielsen's management to continue to build the business and we
will work with you to identify the key employees and discuss appropriate
roles and responsibilities and aim to put in place a generous management
retention/incentive package that would be based on specific operating
targets over the next few years. We would appropriately address ACNielsen's
existing employment agreements, benefit plans and other commitments to its
employees consistent with our detailed discussion last month. We are
confident that your senior executives and workforce would find working in
the combined company to be professionally rewarding and exciting.
Our proposal is conditioned on its approval by the ACNielsen's Board
of Directors and on the negotiation of a definitive merger agreement
containing mutually acceptable terms. This proposal is also subject to our
receipt of all regulatory and other required approvals, which we are
confident will be obtained in a timely manner. We would, of course, expect
to conduct a confirmatory due diligence investigation of ACNielsen prior to
executing a definitive merger agreement, and we and our advisors are
confident that we could complete our due diligence expeditiously. We have
already obtained a bank commitment to finance the acquisition of all of the
outstanding shares of ACNielsen's common stock and, consequently, our
proposal is not conditioned on securing financing.
We are submitting this offer on a confidential basis and have no
current intention to announce it publicly. We view this transaction as a
critical strategic initiative for VNU and, as indicated above, our revised
offer is being presented on the condition that you agree to move forward
with us promptly toward bringing the transaction to a successful
completion. Accordingly, I would appreciate your response by December 6,
2000. Absent your favorable response by that date, our revised offer will
be automatically withdrawn as our board wishes us to consider other
available alternatives at that point.
Nick, I know you and I both see clearly the benefits of the
combination of our two companies and I hope that you and your Board will
also now recognize the full value we are offering to your stockholders to
bring this to completion. I am available at any time to discuss our revised
offer with you and will look forward to your response.
15
<PAGE> 21
With kind regards,
VNU nv
/s/ R.F. VAN DEN BERGH
--------------------------------------
R.F. van den Bergh
Chairman of the Executive Board
Later that day, Mr. Hobbs called Mr. Trivisonno to alert him that he would
be receiving a letter from Parent with respect to the possible combination of
the two companies. On November 22, 2000, Mr. Trivisonno called Mr. Hobbs and
suggested that, although the price set forth in the letter was not acceptable,
their respective financial advisors should meet to discuss the terms of the
proposed transaction. Following that conversation Mr. Trivisonno called Mr. van
den Bergh to further discuss a meeting between representatives of Merrill Lynch
and Evercore. Later that day, a representative of Merrill Lynch called a
representative of Evercore to set up a meeting. On November 30, 2000
representatives of Merrill Lynch met with representatives of Evercore to discuss
the possible combination and plans for the due diligence process, as well as
Evercore's analysis of the value of the Company's shares. On December 5, 2000, a
representative of Evercore called a representative of Merrill Lynch and
indicated that the Company's position was that the per Share price should be
closer to $40.00 than to $35.00 and indicated that certain other material terms
of the proposed transaction had yet to be agreed. On December 7, 2000, a
representative of Merrill Lynch called a representative of Evercore to discuss a
potential offer price of $36.00 per Share, in response to which Evercore
expressed its view that a transaction below $40.00 per Share would be
unacceptable to the Company. Later in the day, a representative of Evercore
called a representative of Merrill Lynch and stated that the Company was seeking
$37.50 per Share. On the evening of December 7, 2000, Mr. Hobbs called Mr.
Trivisonno and, after some discussion, Messrs. Hobbs and Trivisonno agreed on a
per Share purchase price of $36.50 with the potential to be increased to $36.75
depending on the results of due diligence, subject to approval by the
Supervisory Board of Parent and the Board of the Company.
On December 8, 2000, Messrs. Hobbs, Mastrelli, O'Shea and Ross and Parent's
legal and financial advisors met with Messrs. Trivisonno, Doppelt , Connors and
Chrenc and the Company's legal and financial advisors, to discuss the terms of
the proposed transaction. Parent and the Company entered into a Confidentiality
and Standstill Agreement, which superceded the January 5, 2000 confidentiality
agreement between Parent and the Company. On December 10, 2000, Parent's legal
advisors delivered a draft merger agreement to the Company's legal advisors.
On December 12, 2000, the Supervisory Board of Parent met and authorized a
purchase price for all of the outstanding shares of the Company of $36.50 per
Share, with the potential to be increased to $36.75 per Share, depending on the
results of due diligence.
From December 8, 2000 to December 17, 2000, Parent, VNU, Inc. and their
financial and legal advisors conducted a financial and legal due diligence
review of the Company. During this period, the parties and their legal and
financial advisors negotiated the terms of the Merger Agreement.
On December 17, 2000, the parties agreed upon a per Share price of $36.75
and later that same day the parties executed the Merger Agreement and the
Executive Agreements.
16
<PAGE> 22
THE MERGER AGREEMENT
THE FOLLOWING IS A SUMMARY OF CERTAIN PROVISIONS OF THE MERGER AGREEMENT.
THIS SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE MERGER AGREEMENT,
WHICH IS INCORPORATED HEREIN BY REFERENCE, AND A COPY OF WHICH HAS BEEN FILED AS
AN EXHIBIT TO THE TENDER OFFER STATEMENT ON SCHEDULE TO (THE "SCHEDULE TO")
FILED BY PURCHASER AND PARENT WITH THE COMMISSION IN CONNECTION WITH THE OFFER.
THE MERGER AGREEMENT MAY BE EXAMINED AND COPIES MAY BE OBTAINED AT THE PLACES
SET FORTH IN SECTION 7. DEFINED TERMS USED HEREIN AND NOT DEFINED HEREIN SHALL
HAVE THE RESPECTIVE MEANINGS ASSIGNED TO THOSE TERMS IN THE MERGER AGREEMENT.
The Offer. The Merger Agreement provides for the commencement of the Offer
on the fifth business day after the public announcement of the execution of the
Merger Agreement. The obligation of Purchaser to accept for payment Shares
tendered pursuant to the Offer is subject to the satisfaction of the Minimum
Condition and certain other conditions that are described in Section 14 of this
Offer to Purchase. Purchaser and Parent have agreed that no change in the Offer
may be made which decreases the price per Share payable in the Offer, which
reduces the maximum number of Shares to be purchased in the Offer, amends any
term or other condition of the Offer in a manner adverse to stockholders or
which imposes conditions to the Offer in addition to those set forth in Section
14 of this Offer to Purchase without the prior consent of the Company.
The Merger. The Merger Agreement provides that, upon the terms and subject
to the conditions thereof, and in accordance with Delaware Law, Purchaser shall
be merged with and into the Company. As a result of the Merger, the separate
corporate existence of Purchaser will cease and the Company will continue as the
Surviving Corporation and will become a wholly owned subsidiary of Parent. Upon
consummation of the Merger, each issued and then outstanding Share (other than
any Shares held in the treasury of the Company, or owned by Purchaser, Parent or
any direct or indirect wholly owned subsidiary of Parent or of the Company and
any Shares which are held by stockholders who have not voted in favor of the
Merger or consented thereto in writing and who shall have demanded properly in
writing appraisal for such Shares in accordance with Delaware Law) shall be
converted automatically into the right to receive the Merger Consideration.
Pursuant to the Merger Agreement, each share of common stock, par value
$.01 per share, of Purchaser issued and outstanding immediately prior to the
Effective Time shall be converted into and exchanged for one validly issued,
fully paid and nonassessable share of common stock, par value $.01 per share, of
the Surviving Corporation.
The Merger Agreement provides that the directors of Purchaser immediately
prior to the Effective Time will be the initial directors of the Surviving
Corporation and that the officers of the Company immediately prior to the
Effective Time will be the initial officers of the Surviving Corporation.
Subject to the Merger Agreement, at the Effective Time, the restated certificate
of incorporation of the Company, as in effect immediately prior to the Effective
Time, will be the Certificate of Incorporation of the Surviving Corporation.
Subject to the Merger Agreement, at the Effective Time, the by-laws of the
Company, as in effect immediately prior to the Effective Time, will be the
by-laws of the Surviving Corporation.
Stockholders Meeting and Proxy Statement. Pursuant to the Merger
Agreement, the Company shall, if required by applicable law in order to
consummate the Merger, take all action necessary to convene and hold a special
meeting of its stockholders as promptly as practicable following consummation of
the Offer for the purpose of considering and voting upon the adoption of the
Merger Agreement (the "Stockholders Meeting"). If Purchaser acquires at least a
majority of the outstanding Shares, Purchaser will have sufficient voting power
to approve the Merger, even if no other stockholder votes in favor of the
Merger.
The Merger Agreement provides that, if required by law to consummate the
Merger, the Company shall, with the cooperation of Parent, promptly prepare and
file with the Commission under the Exchange Act, a proxy statement (the "Proxy
Statement") with respect to the Stockholders' Meeting. The Company has agreed to
use its best efforts to respond to all the Commission's comments with respect to
the Proxy Statement and, subject to compliance with the Commission's rules and
regulations, to cause the Proxy Statement to be mailed to stockholders of the
Company at the earliest practicable date. Except as otherwise provided in the
Merger Agreement, the Company has agreed to include in the Proxy Statement the
recommendation of the
17
<PAGE> 23
Board that the stockholders of the Company vote in favor of the adoption of the
Merger Agreement. Parent and Purchaser have agreed to cause all Shares then
owned by them and their subsidiaries to be voted in favor of adoption of the
Merger Agreement. The Merger Agreement also provides that, in the event that
Purchaser shall acquire at least 90% of the then outstanding Shares in the
Offer, Purchaser and Parent will take all necessary actions to cause the Merger
to become effective, in accordance with Delaware Law, as soon as practicable
after the Offer, without a meeting of the Company's stockholders.
Conduct of Business by the Company Pending the Merger. Pursuant to the
Merger Agreement, the Company has covenanted that, during the period from the
date of Merger Agreement to the Effective Time, the Company shall, and shall
cause each of its Subsidiaries to, act and carry on its business in the ordinary
course of business consistent with past practice and, to the extent consistent
therewith, use its reasonable best efforts to preserve intact its current
business organizations, keep available the services of its current key officers
and employees and preserve the goodwill of those engaged in material business
relationships with the Company. The Merger Agreement provides that, by way of
amplification and not limitation, except as contemplated therein, the Company
shall not, and shall not and shall not permit any of its Subsidiaries to,
without the prior consent of Parent, do any of the following:
(a)(i) declare, set aside or pay any dividends on, or make any other
distributions (whether in cash, securities or other property) in respect
of, any of its outstanding capital stock (other than, with respect to a
Subsidiary of the Company, to its corporate parent), (ii) split, combine or
reclassify any of its outstanding capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in
substitution for shares of its outstanding capital stock, (iii) purchase,
redeem or otherwise acquire any shares of outstanding capital stock or any
rights, warrants or options to acquire any such shares, except, in the case
of this clause (iii), for the acquisition of Shares from holders of
outstanding options to purchase Shares ("Stock Options") in full or partial
payment of the exercise price or any taxes payable by such holder upon
exercise of Stock Options to the extent required under the terms of such
Stock Options as in effect on the date of the Merger Agreement;
(b) issue, sell, grant, pledge or otherwise encumber any shares of its
capital stock, any other voting securities or any securities convertible
into or exchangeable for, or any rights, warrants or options to acquire,
any such shares, voting securities or convertible or exchangeable
securities, other than (i) upon the exercise of vested Stock Options
outstanding on the date of the Merger Agreement and (ii) the issuance of
Shares as required by the terms of the ACNielsen Employee Stock Ownership
Plan consistent with past practice;
(c) amend its certificate of incorporation, by-laws or other
comparable charter or organizational documents;
(d) directly or indirectly acquire, make any investment (other than
investments not exceeding $5,000,000 in the aggregate) in, or make any
capital contributions to, any person (other than a Subsidiary of the
Company) other than in the ordinary course of business consistent with past
practice;
(e) make any new capital expenditure or expenditures in excess of
$2,500,000 in the aggregate, other than as set forth in the Company's
budget for capital expenditures;
(f) enter into, amend or terminate any material contract involving
expenses of at least $2,500,000 per year other than in the ordinary course
of business consistent with past practice;
(g) directly or indirectly sell, pledge or otherwise dispose of or
encumber any of its properties or assets that are material to its business,
except for sales, pledges or other dispositions or encumbrances in the
ordinary course of business consistent with past practice;
(h)(i) except for borrowings under the Three-Year Credit Agreement,
dated as of April 15, 1998, among the Company, The Chase Manhattan Bank and
the lenders named therein, and under certain uncommitted lines of credit in
the ordinary course of business consistent with past practice and other
than in connection with any action permitted by paragraph (d) above, incur
any indebtedness for borrowed money or guarantee any such indebtedness of
another person, other than indebtedness owing to or
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guarantees of indebtedness owing to the Company or any direct or indirect
wholly owned Subsidiary of the Company or (ii) make any loans or advances
to any other person, other than to the Company or to any direct or indirect
wholly owned Subsidiary of the Company and other than routine advances to
employees consistent with past practice;
(i) except as required under any existing domestic material employee
benefits plans or employee benefits plans not subject to United States law
(collectively, the "Plans"), (A) grant or agree to grant to any director,
officer or employee, any increase in wages or bonus, severance, profit
sharing, retirement, deferred compensation, insurance or other compensation
or benefits to such officers and employees, except for increases in the
ordinary course of business and consistent with past practice, or (B)
establish any new compensation or benefit plans or arrangements, or amend
or agree to amend any existing Plans, except as may be required under
existing agreements or by law;
(j) except as required under the existing Plans, accelerate the
payment, right to payment or vesting of any bonus, severance, profit
sharing, retirement, deferred compensation, Stock Option, insurance or
other compensation or benefits;
(k) enter into or amend any employment, severance or similar agreement
with any existing officers or employees, except for severance agreements
entered into to the extent required pursuant to severance plans existing on
the date of the Merger Agreement;
(l) make or rescind any tax election or settle or compromise any
income tax liability of the Company or of any of its Subsidiaries with any
governmental entity or settle any action, suit, claim, investigation or
proceeding with any government entity (legal, administrative or
arbitrative) in an amount in excess of $1,000,000;
(m) pay, discharge or satisfy any claims, liabilities or obligations,
other than the payment, discharge or satisfaction (i) of any such claims,
liabilities or obligations in the ordinary course of business or (ii) of
claims, liabilities or obligations reflected or reserved against in, or
contemplated by, the consolidated financial statements (or the notes
thereto) of the Company and its consolidated Subsidiaries or (iii) other
than settlements which involve solely the payment of money that would not
result in an uninsured or underinsured payment by or liability of the
Company in excess of $2,000,000 in the aggregate above reserves established
therefor on the books of the Company;
(n) except as disclosed in the Company's previous filings with the
Commission or required by a governmental entity, make any change in any
method of accounting or accounting practice or policy, except as required
by GAAP;
(o) enter into any agreement, understanding or commitment that
materially restrains, limits or impedes the Company's ability to compete
with or conduct any material line of business, including, but not limited
to, geographic limitations on the Company's activities;
(p) plan, announce, implement or effect any reduction in force,
lay-off, early retirement program, severance program or other program or
effort concerning the termination of employment of employees of the Company
or its Subsidiaries; provided, however, that routine employee terminations
or terminations under the Company's "Operation Leading Edge" program (as
disclosed in the Company's previous filings with the Commission) shall not
be considered subject to this paragraph (p); or
(q) authorize any of, or commit or agree to take any of, the foregoing
actions in respect of which it is restricted by the provisions of this
section except to the extent such action is otherwise expressly
contemplated by the Merger Agreement.
Company Board Representation. The Merger Agreement provides that, promptly
upon the purchase by Purchaser of Shares pursuant to the Offer, Parent shall be
entitled to designate up to such number of directors, rounded up to the next
whole number, on the Board as shall give Parent representation on the Board
equal to the product of the total number of directors on the Board (giving
effect to the directors elected pursuant to this sentence), multiplied by the
percentage that the number of Shares beneficially owned by Purchaser at such
time (including Shares so accepted for payment) bears to the total number of
Shares then outstanding;
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provided that, in the event that the Minimum Condition shall have been
satisfied, in no event shall the directors designated by Parent constitute less
than a majority of the Board. The Company has agreed that it shall, upon the
request of Parent, use its reasonable best efforts promptly either to increase
the size of its Board or to secure the resignations of such number of its
incumbent directors, or both, as is necessary to enable the Parent Designees to
be so elected or appointed to the Board, and the Company shall take all actions
available to the Company to cause the Parent Designees to be so elected or
appointed. At such time, the Company shall, if requested by Parent, also take
all action necessary to cause persons designated by Parent to constitute at
least the same percentage (rounded up to the next whole number) as is on the
Board of (i) each committee of the Board, (ii) each board of directors (or
similar body) of each Subsidiary of the Company and (iii) each committee (or
similar body) of each such board. Notwithstanding the foregoing, until the
Effective Time, the parties have agreed to use their best efforts to ensure that
at least two members of the Board of the Company shall, at all times prior to
the Effective Time, be directors of the Company who were directors of the
Company on December 17, 2000 (the "Continuing Directors"), provided that, if
there shall be in office fewer than two Continuing Directors for any reason, the
Board shall cause the person designated by the remaining Continuing Director to
fill such vacancy who shall be deemed to be a Continuing Director for all
purposes of the Merger Agreement, or if no Continuing Directors then remain, the
other director of the Company then in office shall designate two persons to fill
such vacancies who will not be officers or employees or affiliates of the
Company or Parent or any of their respective subsidiaries and such persons shall
be deemed to be Continuing Directors for all purposes of the Merger Agreement.
The Merger Agreement provides that, from and after the time, if any, that
the Parent Designees constitute a majority of the Board and prior to the
Effective Time, subject to the terms of the Merger Agreement, any amendment or
modification of the Merger Agreement or the Company's restated certificate of
incorporation or by-laws of the Company, any termination of the Merger Agreement
by the Company, any extension by the Company of the time for the performance of
any of the obligations of Parent or Purchaser thereunder, or waiver of any
condition to the Company's obligations thereunder or any of the Company's rights
thereunder which adversely affects the holders of Shares other than Purchaser or
Parent may be effected only if there are in office one or more Continuing
Directors and such action is approved by the action of unanimous vote of the
entire Board.
Access to Information. Under the terms of the Merger Agreement, until the
Effective Time, and subject to the provisions of any confidentiality agreement
by which the Company is bound (provided that the Company shall advise Parent
that information is not being provided as a result thereof and whether such
information, in the good faith belief of the Company, has had or would
reasonably be expected to have a Material Adverse Effect on the Company), the
Company shall, and shall cause each of its Subsidiaries to, afford to Parent and
its officers, employees, counsel, financial advisors and other representatives
prompt, reasonable access to all of the Company's and its Subsidiaries'
properties, books, contracts, commitments, tax returns, personnel and records,
and, during such period, the Company shall, and shall cause each of its
Subsidiaries to, furnish as promptly as practicable to Parent such information
concerning the Company's and its Subsidiaries' businesses, properties, financial
condition, operations and personnel as Parent may from time to time reasonably
request.
A "Material Adverse Effect" with respect to any person means a material
adverse effect on (a) the ability of such person to perform its obligations
under the Merger Agreement or to consummate the transactions contemplated
thereby or (b) the financial condition, business or results of operations of
such person and its Subsidiaries taken as a whole, other than any change,
circumstance or effect relating to (i) the economy or securities markets in
general, (ii) the industries in which such person operates and not specifically
relating to such person, (iii) the performance of the Merger Agreement or the
transactions contemplated thereby in accordance with the terms of the Merger
Agreement or (iv) any development relating to the action commenced by
Information Resources, Inc. on July 29, 1996 in the United States District Court
for the Southern District of New York, naming as defendants The Dun & Bradstreet
Corporation, A.C. Nielsen Company (a subsidiary of the Company) and I.M.S.
International, Inc., and any related proceedings.
No Solicitation. The Company has agreed that it shall not (whether
directly or indirectly through advisors, agents or other intermediaries), and
shall use its reasonable best efforts to cause its respective
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<PAGE> 26
officers, directors, advisors, representatives and other agents of the Company
not to, directly or indirectly, (i) solicit, initiate or knowingly encourage any
inquiries relating to, or the submission of, any Acquisition Proposal (as
defined below), (ii) participate in any discussions or negotiations regarding
any Acquisition Proposal, or, in connection with any Acquisition Proposal,
furnish to any person any information or data with respect to or access to the
properties of the Company or any of its Subsidiaries, or take any other action
to facilitate the making of any proposal that constitutes or may reasonably be
expected to lead to, any Acquisition Proposal or (iii) enter into any agreement
with respect to any Acquisition Proposal or approve or resolve to approve any
Acquisition Proposal; provided that, prior to consummation of the Offer, if the
Board of the Company, after receiving advice from outside counsel, has concluded
in good faith that such action is reasonably necessary for the Board to act in a
manner consistent with its fiduciary duties under applicable law, then the
Company may furnish information with respect to the Company and its Subsidiaries
and participate in discussions or negotiations regarding such Acquisition
Proposal, in which case the Company will not disclose any information to such
person without entering into a confidentiality agreement substantially identical
to the confidentiality agreement between the Company and Parent dated December
8, 2000 (the "Confidentiality Agreement"), provided that the Company may enter
into a confidentiality agreement without a standstill or with a standstill
provision less favorable to the Company if it waives or similarly modifies the
standstill provision in the Confidentiality Agreement. The Company has agreed
that it shall promptly (but in no case later than 24 hours after receipt)
provide Parent with a copy of any written Acquisition Proposal received and a
written statement with respect to any non-written Acquisition Proposal received,
which statement shall include the identity of the parties making the Acquisition
Proposal and the material terms thereof. The Company has further agreed that it
shall keep Parent informed on a current basis of the status and content of any
discussions regarding any Acquisition Proposal with a third party. The Company
or the Company's Board is not prohibited by these provisions from taking and
disclosing to the Company's stockholders a position contemplated by Rules 14d-9
and 14e-2(a) promulgated under the Exchange Act (or any similar communications
in connection with the making or amendment of a tender offer or exchange offer)
or from making any disclosure required by applicable law or, prior to the
consummation of the Offer, from taking any action contemplated by paragraph
(d)(i) of the section entitled "Termination" below), including having the Board
take such actions as are necessary to approve or resolve to approve the
intention to enter into an agreement with respect to a Superior Proposal (as
hereinafter defined) (or any announcement in connection therewith) or enter into
an agreement with respect to a Superior Proposal concurrently with termination
pursuant to paragraph (d)(i) of the section entitled "Termination" below.
"Acquisition Proposal" means any offer or proposal for a merger,
consolidation, share exchange, recapitalization, liquidation or other business
combination involving the Company or any of its Subsidiaries or the acquisition
or purchase of 20% or more of any class of equity securities of the Company or
any of its Subsidiaries, or any tender offer (including self-tenders) or
exchange offer that if consummated would result in any person beneficially
owning 20% or more of any class of equity securities of the Company or any of
its Subsidiaries, or a substantial portion of the assets of, the Company or any
of its Subsidiaries, other than the transactions contemplated by the Merger
Agreement.
"Superior Proposal" means an Acquisition Proposal which the Board
determines, in good faith after consultation with an independent, nationally
recognized investment banking firm, (i) if consummated would result in a
transaction more favorable to the Company's stockholders, from a financial point
of view, than the transactions contemplated by the Merger Agreement and (ii) is
reasonably capable of being financed by the person making such Acquisition
Proposal.
Employee Stock Options and Employee Benefit Plans. The Merger Agreement
provides that each Stock Option which immediately prior to the Effective Time is
not vested will accelerate and become fully vested and exercisable upon the
Effective Time in accordance with the terms of the applicable Company Stock
Option Plan (the "Accelerated Stock Options"). As of the Effective Time, each
Stock Option (including the Accelerated Stock Options) shall be canceled by the
Company and in consideration of such cancellation, the Company shall pay to each
holder of a canceled Stock Option an amount (the "Option Spread") equal to the
product of (x) the excess, if any, of (i) the Merger Consideration over (ii) the
exercise price per Share of such Stock Option multiplied by (y) the number of
Shares subject to such Stock Option immediately prior to
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<PAGE> 27
its cancellation. The Option Spread, after reduction for any required
withholding Taxes, shall be paid in cash as promptly as practicable following
the Effective Time.
The Merger Agreement also provides that as of the Effective Time, (i) each
then outstanding deferred share unit issued under the 1996 ACNielsen
Non-Employee Directors' Deferred Compensation Plan (the "Directors' Deferred
Compensation Plan") shall be cancelled and in consideration of such
cancellation, the holder of such deferred share unit shall receive, as soon as
practicable following the Effective Time, a cash payment equal to the number of
deferred share units then held by such holder, multiplied by the Merger
Consideration, (ii) each deferred cash account established under the Directors'
Deferred Compensation Plan shall be cancelled and in consideration of such
cancellation, the participant in whose name the deferred cash account is
established shall receive as promptly as practicable following the Effective
Time a cash payment equal to the balance in such deferred cash account and (iii)
each then outstanding share of restricted stock issued under the 1996 ACNielsen
Non-Employee Directors' Stock Incentive Plan shall be cancelled and in
consideration of such cancellation, the holder of such shares of restricted
stock shall receive as promptly as practicable following the Effective Time a
cash payment equal to the number of shares of restricted stock then held by such
holder, multiplied by the Merger Consideration.
The Merger Agreement further provides that following the Effective Time,
the Company will take all actions necessary to ensure that no holder of a Stock
Option or any participant in any employee incentive or benefit plans or programs
or arrangements or non-employee director plans maintained by the Company shall
have any right thereunder to acquire any capital stock of Parent or the
Surviving Corporation.
In the Merger Agreement, Parent agreed that those individuals who are
employed by the Company or any of its Subsidiaries immediately prior to the
Effective Time shall continue to be employees of the Surviving Entity as of the
Effective Time (each such employee, an "Affected Employee"); provided, however,
that none of these provisions shall be construed to limit the ability of the
applicable employer to terminate the employment of any Affected Employee at any
time.
Parent has agreed that for a period of 12 months following the Effective
Time, Parent shall, or shall cause the Surviving Corporation to, provide each
Affected Employee with employee benefits that are no less favorable in the
aggregate than those provided to each such Affected Employee immediately prior
to the Effective Time (other than equity-based compensation or benefits provided
under the ACNielsen Employee Stock Ownership Plan), provided that Parent shall
not be required to provide equity-based compensation to any Affected Employees.
Parent has also agreed that it shall, for a period of 12 months following the
Effective Time, maintain (or cause its Subsidiaries to maintain) a severance pay
practice, program or arrangement for the benefit of each Affected Employee that
is no less favorable than such practice, program or arrangement in effect
immediately prior to the Effective Time with respect to such Affected Employee.
To the extent permitted under applicable law, Parent has agreed that it
shall, or shall cause the Surviving Entity to, give Affected Employees full
credit for purposes of eligibility and vesting and benefit accrual (except for
benefit accruals under any defined benefit pension plan or supplemental or
excess pension plan) under such employee benefit plans or arrangements
maintained by the Parent or the Surviving Corporation in which such Affected
Employees participate for such Affected Employees' service with the Company or
any Subsidiary of the Company to the same extent recognized by the Company or
such Subsidiary immediately prior to the Effective Time.
The Merger Agreement provides that, to the extent permitted under
applicable law, Parent shall, or shall cause the Surviving Corporation to, (a)
waive all limitations as to preexisting conditions, exclusions and waiting
periods with respect to participation and coverage requirements applicable to
the Affected Employees under any welfare benefit plans in which such Affected
Employees may be eligible to participate after the Effective Time, other than
limitations or waiting periods that are already in effect with respect to such
Affected Employees and that have not been satisfied as of the Effective Time
under any welfare plan maintained for the Affected Employees immediately prior
to the Effective Time, and (b) provide each Affected Employee with credit for
any co-payments and deductibles paid prior to the Effective Time in satisfying
any applicable deductible or out-of-pocket requirements under any welfare plans
that such Affected Employees are eligible to participate in after the Effective
Time.
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<PAGE> 28
In addition, Parent has agreed that it shall, or cause the Surviving
Corporation to, discharge the obligations under any change in control agreement
entered into by the Company and an Affected Employee.
The Merger Agreement further provides that pursuant to the terms of the
Trust Under the ACNielsen Nonqualified Plans and the Trust Under the ACNielsen
Deferred Compensation Plan (together, the "Rabbi Trusts"), the Company shall
make an irrevocable contribution to each Rabbi Trust in an amount (i) sufficient
to pay each participant the benefits under the plans covered by such Rabbi Trust
and (ii) sufficient to pay the annual fees payable to the trustees under such
Rabbi Trust for a three-year period.
Indemnification; Directors' and Officers' Insurance. The Merger Agreement
provides that, for a period of six years after the Effective Time, the
provisions with respect to indemnification, exculpation and advancement of
expenses set forth in Article V of the restated certificate of incorporation of
the Company as in effect on December 17, 2000, shall not be amended, repealed or
otherwise modified in any manner that would adversely affect the rights
thereunder of individuals who at any time prior to the Effective Time were
directors or officers of the Company in respect of actions or omissions
occurring at or prior to the Effective Time (including, without limitation, the
transactions contemplated by the Merger Agreement), unless such modification is
required by law.
In the Merger Agreement, Parent has agreed that from and after the
Effective Time, it shall cause the Surviving Corporation and its successors to
indemnify, defend and hold harmless each person who is now, or has been at any
time prior to the date of the Merger Agreement or who becomes prior to the
Effective Time, an officer or director of the Company (the "Covered Parties")
against all losses, claims, damages, costs, expenses (including reasonable
attorneys' fees and expenses), liabilities or judgments or amounts that are paid
in settlement with the approval of the indemnifying party (which approval shall
not be unreasonably withheld or delayed) incurred in connection with any
threatened or actual action, suit or proceeding based in whole or in part on or
arising in whole or in part out of the fact that such person is or was a
director or officer of the Company ("Indemnified Liabilities"), including all
Indemnified Liabilities based in whole or in part on, or arising in whole or in
part out of, the Merger Agreement or the transactions contemplated thereby, in
each case, to the full extent that a corporation is permitted under Delaware Law
to indemnify its own directors or officers, as the case may be. Parent has
agreed that in the event any such claim, action, suit, proceeding or
investigation is brought against any Covered Party, the indemnifying party shall
assume and direct all aspects of the defense thereof, including settlement, and
the Covered Party shall cooperate in the vigorous defense of any such matter.
The Merger Agreement provides that the Covered Party shall have a right to
participate in (but not control) the defense of any such matter with its own
counsel and at its own expense. Notwithstanding the right of the indemnifying
party to assume and control the defense of such litigation, claim or proceeding,
such Covered Party shall have the right to employ separate counsel and to
participate in the defense of such litigation, claim or proceeding, and the
indemnifying party shall bear the fees, costs and expenses of such separate
counsel and shall pay such fees, costs and expenses promptly after receipt of an
invoice from such Covered Party if (i) the use of counsel chosen by the
indemnifying party to represent such Covered Party would present such counsel
with a conflict of interest, (ii) the defendants in, or targets of, any such
litigation, claim or proceeding shall have been advised by counsel that there
may be legal defenses available to it or to other Covered Parties which are
different from or in addition to those available to the indemnifying party, or
(iii) the indemnifying party shall not have employed counsel satisfactory to
such Covered Party, in the exercise of the Covered Party's reasonable judgment,
to represent such Covered Party within a reasonable time after notice of the
institution of such litigation, claim or proceeding. The indemnifying party
shall not settle any such matter unless (i) the Covered Party gives prior
written consent, which shall not be unreasonably withheld or delayed, or (ii)
the terms of the settlement provide that the Covered Party shall have no
responsibility for the discharge of any settlement amount and impose no other
obligations or duties on the Covered Party, and the settlement discharges all
rights against Covered Party with respect to such matter. In no event shall the
indemnifying party be liable for any settlement effected without its prior
written consent. Any Covered Party wishing to claim indemnification upon
learning of any such claim, action, suit, proceeding or investigation, shall
promptly notify Parent and the Surviving Corporation (but the failure so to
notify shall not relieve the indemnifying party from any liability which it may
have under the terms of the Merger Agreement, except to the extent such failure
materially prejudices such indemnifying party), and shall deliver
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<PAGE> 29
to Parent and the Surviving Corporation the undertaking contemplated by Section
145(e) of Delaware Law. The Covered Parties as a group will be represented by a
single law firm (plus no more than one local counsel in any jurisdiction) with
respect to each such matter unless there is, under applicable standards of
professional conduct, a conflict on any significant issue between the positions
of any two or more Covered Parties. Such rights to indemnification shall
continue in full force and effect for a period of six years from the Effective
Time; provided, however, that all rights to indemnification in respect of any
Indemnified Liabilities asserted or made within such period shall continue until
the disposition of such Indemnified Liabilities.
The Merger Agreement also provides that for a period of six years after the
Effective Time, Parent shall cause to be maintained in effect policies of
directors' and officers' liability insurance, for the benefit of those persons
who are covered by the Company's directors' and officers' liability insurance
policies at the Effective Time, providing coverage with respect to matters
occurring prior to the Effective Time that is at least equal to the coverage
provided under the Company's current directors' and officers' liability
insurance policies, to the extent that such liability insurance can be
maintained at an annual cost to Parent not greater than 200 percent of the
premium for the current Company directors' and officers' liability insurance;
provided that if such insurance cannot be so maintained at such cost, Parent
shall maintain as much of such insurance as can be so maintained at a cost equal
to 200 percent of the current annual premiums of the Company for such insurance.
Parent, Purchaser and the Company have agreed that in the event that Parent
or the Surviving Corporation or any of its successors or assigns (i)
consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger or
(ii) transfers or conveys all or substantially all of its properties and assets
to any person, then, and in each such case, proper provision shall be made so
that the successors or assigns of Parent or the Surviving Corporation shall
succeed to the obligations set forth in the sections with respect to employee
benefit plans and directors' and officers' indemnification and insurance.
Consents, Approvals and Filings. The Merger Agreement provides that, on
the terms and subject to the conditions thereof, each of the parties thereto
shall (i) make promptly its respective filings, and thereafter make any other
required submissions, under the HSR Act, the EU Merger Regulation, the Exchange
Act and any other relevant statute, rule or regulation, with respect to the
Offer, the Merger and the other transactions contemplated thereby and (ii) use
reasonable best efforts (or, in connection with obtaining antitrust approval
from any U.S. governmental entity, best efforts) to take, or cause to be taken,
all appropriate action, and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate and make
effective the Offer, the Merger and the other transactions contemplated thereby,
including using reasonable best efforts (or, in connection with obtaining
antitrust approval from any U.S. governmental entity, best efforts) to obtain
all licenses, permits, consents, approvals, authorizations, qualifications and
orders of governmental entities and cooperate to obtain all consents, approvals
and authorizations (without out-of-pocket expense to the Company) of parties to
contracts with the Company and its Subsidiaries as are necessary for the
consummation of the Offer, the Merger and the other transactions contemplated
thereby and to fulfill the conditions to the Offer and the Merger. In case at
any time after the Effective Time any further action is necessary or desirable
to carry out the purposes of the Merger Agreement, the proper officers and
directors of each party shall use their reasonable best efforts to take all such
action.
Notwithstanding anything to the contrary in the Merger Agreement, Parent
has agreed to, and to cause its affiliates to, promptly take all steps necessary
to secure government antitrust clearance for the consummation of the
transactions contemplated thereby as soon as practicable but by no later than
June 30, 2001. Parent further agreed to give the Company reasonable notice of
any meetings prior to the Closing Date with any governmental entity regarding
the transactions contemplated thereby, and the Company at its option may have
representatives at such meetings.
Notwithstanding anything to the contrary in the Merger Agreement, Parent
has agreed to use its best efforts to take, or cause to be taken, all necessary
action and to do, or cause to be done, all things necessary to satisfy the
condition to the Offer relating to the Works' Council set forth in paragraph (c)
of Section 14 of this Offer to Purchase; provided that nothing in the Merger
Agreement shall require Parent or any of its Subsidiaries to take, or cause to
be taken, or do or cause to be done, any action which would result in a
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<PAGE> 30
material detriment to Parent and its Subsidiaries or would result in a material
restriction on the business activities thereof. The Merger Agreement also
provides that upon receiving written advice from the Works' Council that is not
unconditional positive advice or conditional positive advice, Parent shall, as
promptly as practicable and in any event within five days thereof, notify the
Works' Council in writing, as required by the Netherlands Works Council Act, as
to its intention to enter into such bank facility and issue a guarantee in
connection therewith.
Parent, Purchaser and the Company have agreed that, on the terms and
subject to the conditions set forth in the Merger Agreement, each of the parties
shall use its reasonable best efforts to take, or cause to be taken, all
actions, and do, or cause to be done, and assist and cooperate with the other
parties in doing, all things necessary, proper or advisable to consummate and
make effective, in the most expeditious manner practicable, the Offer, the
Merger and the other transactions contemplated thereby, including the
satisfaction of the conditions precedent set forth in the Merger Agreement.
Certain Undertakings. Each of Parent, Purchaser and the Company have
agreed to make the undertakings and to take or cause to be taken all other
actions as are required in order to comply with the Indemnity and Joint Defense
Agreement dated as of October 28, 1996 among The Dun & Bradstreet Corporation,
Nielsen Media Research, Inc. and the Company.
Representations and Warranties. The Merger Agreement contains various
customary representations and warranties of the parties thereto including
representations by the Company as to the absence of certain changes or events
concerning the Company's business, compliance with law, litigation, Commission
filings, employee benefit plans, labor matters, property and leases,
intellectual property, environmental matters, taxes, amendments to the Rights
Agreement, material contracts, and brokers. Certain of the representations and
warranties are qualified as to materiality or "Material Adverse Effect."
Conditions to the Merger. Under the Merger Agreement, the respective
obligation of each party to effect the Merger is subject to the satisfaction or
written waiver on or prior to the Effective Time, of the following conditions:
(a) Purchaser shall have accepted for payment and paid for all Shares validly
tendered in the Offer and not withdrawn; provided, however, that neither Parent
nor Purchaser may invoke this condition if Purchaser shall have failed to
purchase Shares so tendered and not withdrawn in violation of the terms of the
Merger Agreement or the Offer; (b) the Merger Agreement shall have been adopted
by the affirmative vote of the holders of a majority of the outstanding shares
of Common Stock of the Company if such vote is required pursuant to the
Company's restated certificate of incorporation, Delaware Law or other
applicable law; and (c) no temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent jurisdiction or other
legal restraint or prohibition preventing the consummation of the Merger shall
be in effect; provided, however, that, prior to invoking this condition, the
party so invoking this condition shall have complied with its obligations
described in the section above entitled "Consents, Approvals and Filings" and
the parties to the Merger Agreement shall have used their reasonable best
efforts or best efforts (as applicable) to lift or remove such order,
injunction, restraint or prohibition.
Termination. The Merger Agreement provides that it may be terminated and
the Merger may be abandoned at any time prior to the Effective Time, whether
before or after approval of matters presented in connection with the Merger by
the stockholders of Purchaser or, subject to the terms thereof, of the Company:
(a) by the mutual written consent of Parent and the Company duly
authorized by the Board of Parent and the Company; provided, however, that
if Parent shall have nominated a majority of the directors, such consent of
the Company may only be given if approved by the Board of the Company in
accordance with the provisions regarding the Continuing Directors;
(b) by either of Parent or the Company duly authorized by the Board of
such person if (i) a statute, rule or executive order shall have been
enacted, entered or promulgated prohibiting the transactions contemplated
by the Merger Agreement on the terms contemplated by the Merger Agreement
or (ii) any governmental entity shall have issued an order, decree or
ruling or taken any other action (which order, decree, ruling or other
action the parties thereto shall use their reasonable best efforts (or, in
connection with obtaining antitrust approval from any governmental entity,
best efforts) to lift), in each case
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permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated thereby and such order, decree, ruling or other
action shall have become final and non-appealable;
(c) by either of Parent or the Company duly authorized by the Board of
such person if consummation of the Offer shall not have occurred on or
before June 30, 2001 (the "Termination Date"); provided, however, that the
party seeking to terminate the Merger Agreement pursuant to this clause (c)
shall not have breached in any material respect its obligations under the
Merger Agreement; and provided further that the Termination Date shall be
extended to such later date (but in no event later than September 30, 2001)
as the Offer shall have been extended by Purchaser at the request of the
Company pursuant to the provisions of the Merger Agreement, unless a
condition to consummation of the Offer (other than the condition relating
to the Works' Council) shall not have been satisfied and either (i) Parent
can reasonably demonstrate that such failure to be satisfied resulted from
a reason other than the failure of the condition relating to the Works'
Council to be satisfied or (ii) such condition failed to be satisfied as a
result of a material breach by the Company of its obligations under the
Merger Agreement;
(d) by the Company, upon approval of its Board:
(i) prior to consummation of the Offer, if (A) the Board of the
Company notifies Parent in writing that it intends to enter into an
agreement with respect to a Superior Proposal, attaching the most
current version of such agreement (or a description of all material
terms and conditions thereof) to such notice, (B) Parent does not make,
within four business days of receipt of the Company's written
notification of its intention to enter into a binding agreement for a
Superior Proposal, an offer that the Board of the Company determines, in
good faith after consultation with its financial advisor, is at least as
favorable to the stockholders of the Company as such Superior Proposal
(it being understood that the Company shall not enter into any such
binding agreement during such four-day period) and (C) the Company prior
to such termination pursuant to this clause (d)(i) pays to Parent in
immediately available funds an amount equal to $60,000,000 as described
under the section entitled "Fees and Expenses" below (the Company agrees
to notify Parent promptly if its intention to enter into a written
agreement referred to in its notification shall change at any time after
giving effect to such notification); or
(ii) if Parent or Purchaser shall have terminated the Offer or the
Offer expires without Parent or Purchaser, as the case may be,
purchasing any Shares pursuant thereto; provided that the Company may
not terminate the Merger Agreement pursuant to this clause (d)(ii) if
the Company is in material breach of the Merger Agreement; or
(iii) prior to the consummation of the Offer, if (A) there shall be
a breach of any representation or warranty of Parent or Purchaser in the
Merger Agreement that is qualified as to Material Adverse Effect, (B)
there shall be a breach in any material respect of any representation or
warranty of Parent or Purchaser in the Merger Agreement that is not so
qualified, other than any such breaches which, in the aggregate, have
not had or would not reasonably be likely to have a Material Adverse
Effect on Parent and Purchaser, taken as a whole, or (C) there shall be
a material breach by Parent or Purchaser of any of its covenants or
agreements contained in the Merger Agreement, which breach, in the case
of clause (A), (B) or (C), either is not reasonably capable of being
cured or, if it is reasonably capable of being cured, has not been cured
within the earlier of (i) 10 days after giving of notice to Parent of
such breach and (ii) the expiration of the Offer, provided that the
Company may not terminate the Merger Agreement pursuant to this clause
(d)(iii) if the Company is in material breach of the Merger Agreement;
(e) by Parent or Purchaser duly authorized by the Board of such
person:
(i) prior to the consummation of the Offer, if the Board of the
Company shall have withdrawn, or modified or changed, in a manner
adverse to Parent or Purchaser, its approval or recommendation of the
Offer, the Merger Agreement or the Merger or shall have recommended or
approved an Acquisition Proposal, it being understood and agreed that
neither the delivery of notice pursuant to
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clause (d)(i) above any subsequent public announcement of such notice
nor any communication by the Board of the Company to the stockholders of
the Company pursuant to Rule 14d-9(e)(3) under the Exchange Act (or any
similar communication to the stockholders of the Company in connection
with the making or amendment of a tender offer or exchange offer) shall
entitle Parent to terminate the Merger Agreement pursuant to this clause
(e)(i), unless the Company enters into a definitive agreement with
respect to an Acquisition Proposal; or
(ii) prior to the consummation of the Offer, if there shall have
been a material breach by the Company of any provision described in the
section above entitled "No Solicitation"; or
(iii) if the Offer has expired or terminated without Parent or
Purchaser purchasing any Shares thereunder and, pursuant to the terms of
the Merger Agreement, Purchaser is neither required to accept and pay
for the Shares tendered in the Offer nor to extend the expiration date
of the Offer; provided that Parent or Purchaser may not terminate the
Merger Agreement pursuant to this clause (e)(iii) if Parent or Purchaser
is in material breach of the Merger Agreement; or
(iv) prior to the consummation of the Offer, if the Company shall
have (A) exempted for purposes of Section 203 of the Delaware Law any
acquisition of Shares by any person or "group" (as defined in Section
13(d)(3) of the Exchange Act), other than Parent, Purchaser or their
affiliates, or (B) amended (or agreed to amend) the Rights Agreement or
redeemed (or agreed to redeem) its outstanding Rights thereunder for the
purpose of exempting an acquisition of Shares from the Rights Agreement
and Rights; or
(v) prior to the consummation of the Offer, if (A) there shall be a
breach of any representation or warranty of the Company in the Merger
Agreement that is qualified as to Material Adverse Effect, (B) there
shall be a breach in any material respect of any representation or
warranty of the Company in the Merger Agreement that is not so qualified
other than any such breaches which, in the aggregate, have not had or
would not reasonably be likely to have a Material Adverse Effect on the
Company, or (C) there shall be a material breach by the Company of any
of its covenants or agreements contained in the Merger Agreement, which
breach, in the case of clause (A), (B) or (C), either is not reasonably
capable of being cured or, if it is reasonably capable of being cured,
has not been cured within the earlier of (i) 10 days after giving of
written notice to the Company of such breach and (ii) the expiration of
the Offer; provided that Parent or Purchaser may not terminate the
Merger Agreement pursuant to this clause (e)(v) if Parent or Purchaser
is in material breach of the Merger Agreement.
Effect of Termination. In the event of termination of the Merger Agreement
by either the Company or Parent or Purchaser as provided in the immediately
preceding section entitled "Termination," the Merger Agreement shall forthwith
become void and have no effect, without any liability or obligation on the part
of Parent, Purchaser or the Company, other than the provisions with respect to
access to information, confidentiality of such information, effect of
termination, fees and expenses and the general provisions and except to the
extent that such termination results from the material breach by a party of any
of its representations, warranties, covenants or agreements set forth in the
Merger Agreement.
Fees and Expenses. The Merger Agreement provides that, except as provided
below, all fees and expenses incurred in connection with the Offer, the Merger,
the Merger Agreement and the transactions contemplated thereby shall be paid by
the party incurring such fees or expenses, whether or not the Offer or the
Merger is consummated.
Parent, Purchaser and the Company have agreed that if (i) Parent or
Purchaser terminates the Merger Agreement pursuant to the provisions described
above in clauses (e)(i) or (e)(iv) of the section entitled "Termination", or
(ii) the Company terminates the Merger Agreement pursuant to clause (d)(i) of
the section entitled "Termination", then, in each case, the Company shall pay,
or cause to be paid, to Parent an amount equal to $60,000,000, at or prior to
the time of termination in the case of a termination pursuant to clause (d)(i)
or as promptly as is reasonably practicable (but in no event later than two
business days) in the case of a termination pursuant to clause (e)(i) or (iv).
In addition, if (A) the Merger Agreement is
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terminated pursuant to clauses (e)(ii), (e)(iii) or (d)(ii) of the section
entitled "Termination", (B) on the date of such termination, no condition to the
Offer has failed to be satisfied as a result of a material breach of the Merger
Agreement by Parent or Purchaser and prior thereto there shall have been
publicly announced, and not withdrawn, an Acquisition Proposal, and (C) within
15 months after such termination, the Company shall enter into an agreement with
respect to any Acquisition Proposal, then the Company shall pay an amount equal
to $60,000,000 concurrently with entering into any such agreement.
The Merger Agreement further provides that if the condition relating to the
Works' Council set forth in clause (c) of Section 14 of this Offer to Purchase
is not satisfied and the Merger Agreement is terminated pursuant to clause (c)
of the section entitled "Termination," unless a condition to consummation of the
Offer (other than such condition relating to the Works' Council) shall not have
been satisfied and either (i) Parent can reasonably demonstrate that such
failure to be satisfied resulted from a reason other than the failure of such
condition relating to the Works' Council to be satisfied or (ii) such condition
failed to be satisfied as a result of a material breach by the Company of its
obligations under the Merger Agreement, then Parent shall pay, or cause to be
paid, to the Company an amount equal to $60,000,000.
EXECUTIVE AGREEMENTS
THE FOLLOWING IS A SUMMARY OF CERTAIN PROVISIONS OF THE EXECUTIVE
AGREEMENTS DATED AS OF DECEMBER 17, 2000. THIS SUMMARY IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO THE EXECUTIVE AGREEMENTS, WHICH ARE INCORPORATED HEREIN
BY REFERENCE, AND A COPY OF EACH OF WHICH HAS BEEN FILED WITH THE COMMISSION AS
AN EXHIBIT TO THE SCHEDULE TO. THE EXECUTIVE AGREEMENTS MAY BE EXAMINED AND
COPIES MAY BE OBTAINED AT THE PLACES SET FORTH SET FORTH IN SECTION 7.
In connection with the Merger, the Company entered into amended change in
control agreements with each of Nicholas Trivisonno, Michael Connors, Earl
Doppelt and Robert Chrenc. The agreements will become effective upon the
consummation of the Offer. Pursuant to the agreements, each executive is
entitled to a lump-sum payment of his benefits under his change in control
agreement if he remains employed by the Company on the date that is 90 days
following the consummation of the Offer (the "Payment Date") or if, prior to the
Payment Date, (i) his employment is terminated by the Company without "cause"
(generally a termination other than for the executive's willful and continued
failure to perform his duties or his engaging in conduct that is materially
injurious to the company), (ii) he resigns for "good reason" (generally a
reduction in compensation or a required relocation), or (iii) he dies or becomes
disabled. The lump-sum payment includes: (i) three times the sum of the
executive's annual base salary and annual bonus; (ii) a prorated portion of the
executive's annual target bonus; (iii) a full target bonus payable with respect
to any long-term performance period in effect at the time of the consummation of
the Offer; and (iv) the present value of the executive's benefits benefit under
the Company's 1996 Supplemental Executive Retirement Plan using the maximum
credited service allowed to be taken into account and assuming that the
executive is employed at age 55.
In addition, upon an executive's termination of employment following the
Payment Date (or, prior to the Payment Date, if he is terminated by the Company
without cause, he resigns for good reason, or he dies or becomes disabled) the
executive will be entitled to the following benefits: (i) his full base salary
through the date of termination; (ii) cash reimbursement of up to 20% of his
annual compensation (but no more than $100,000) for outplacement and job
separation expenses; (iii) life and health insurance coverage for up to 36
months; and (iv) retiree life and medical insurance beginning at age 55.
In addition, the executive is entitled to a gross-up payment from the
Company to cover any required excise taxes payable by the executive as a result
of any payments made in connection with the Offer and/or the Merger. Upon the
consummation of the Offer, the full amount of each executive's lump-sum payment
(including any gross-up payments) will be deposited in an escrow account. In
consideration for the acceleration of these payments, the executives have agreed
to (i) refrain from competing with the Company or soliciting the Company's
customers and employees during the eighteen-month period following the
consummation of the Offer, (ii) the termination of their previously executed
change in control agreements and
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(iii) repay their loans pursuant to the loan agreements with Northern Trust
Company, which are guaranteed by the Company, on or prior to the Payment Date.
11. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY AFTER THE OFFER AND THE MERGER.
Purpose of the Offer. The Offer is being made pursuant to the Merger
Agreement. The purpose of the Offer and the Merger is for Parent to acquire
control of, and the entire equity interest in, the Company. The purpose of the
Merger is for Parent to acquire all Shares not purchased pursuant to the Offer.
Upon consummation of the Merger, the Company will become a direct wholly owned
subsidiary of Parent.
Under Delaware Law, the approval of the Board and the affirmative vote of
the holders of a majority of the outstanding Shares is required to adopt the
Merger Agreement. The Board of the Company has unanimously determined that each
of the Offer and the Merger is fair to, and in the best interests of, the
stockholders of the Company, has approved, adopted and declared advisable the
Merger Agreement and the Merger (such approval and adoption having been made in
accordance with Delaware Law, including, without limitation, Section 203
thereof) and has resolved to recommend that stockholders accept the Offer and
tender their Shares pursuant to the Offer. Unless the Merger is consummated
pursuant to the short-form merger provisions under Delaware Law described below,
the only remaining required corporate action of the Company is the adoption of
the Merger Agreement by the affirmative vote of the holders of a majority of the
outstanding Shares. Accordingly, if the Minimum Condition is satisfied,
Purchaser will have sufficient voting power to cause the adoption of the Merger
Agreement without the affirmative vote of any other stockholder.
In the Merger Agreement, the Company has agreed to take all action
necessary to convene and hold a special meeting of its stockholders as promptly
as practicable following consummation of the Offer for the purpose of
considering and taking action on the Merger Agreement, if such action is
required by Delaware Law. Parent and Purchaser have agreed that all Shares owned
by them and their subsidiaries will be voted in favor of the adoption of the
Merger Agreement.
The Merger Agreement provides that, promptly upon the purchase by Purchaser
of Shares pursuant to the Offer, Purchaser will be entitled to designate
representatives to serve on the Board in proportion to Purchaser's ownership of
Shares following such purchase. See Section 10. Purchaser expects that such
representation would permit Purchaser to exert substantial influence over the
Company's conduct of its business and operations.
Short-Form Merger. Under Delaware Law, if Purchaser acquires, pursuant to
the Offer or otherwise, at least 90% of the then outstanding Shares, Purchaser
will be able to approve the Merger without a vote of the Company's stockholders.
In such event, Parent, Purchaser and the Company have agreed in the Merger
Agreement to take all necessary actions to cause the Merger to become effective
as soon as practicable, without a meeting of the Company's stockholders. If,
however, Purchaser does not acquire at least 90% of the outstanding Shares
pursuant to the Offer or otherwise and a vote of the Company's stockholders is
required under Delaware Law, a significantly longer period of time would be
required to effect the Merger.
Appraisal Rights. No appraisal rights are available in connection with the
Offer. However, if the Merger is consummated, stockholders who have not tendered
their Shares or voted in favor of adoption of the Merger Agreement will have
certain rights under Delaware Law to demand appraisal of, and to receive payment
in cash of the fair value of, their Shares. Stockholders who perfect such rights
by complying with the procedures set forth in Section 262 of the Delaware Law
("Section 262") will have the "fair value" of their Shares (exclusive of any
element of value arising from the accomplishment or expectation of the Merger)
determined by the Delaware Court of Chancery and will be entitled to receive a
cash payment equal to such fair value from the Surviving Corporation. In
addition, such dissenting stockholders would be entitled to receive payment of a
fair rate of interest from the date of consummation of the Merger on the amount
determined to be the fair value of their Shares.
Parent does not intend to object, assuming the proper procedures are
followed, to the exercise of appraisal rights by any stockholder and the demand
for appraisal of, and payment in cash for the fair value of, the Shares. Parent
intends, however, to cause the Surviving Corporation to argue in an appraisal
proceeding that,
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for purposes of such proceeding, the fair value of each Share is less than or
equal to the Merger Consideration. In this regard, stockholders should be aware
that opinions of investment banking firms (including Evercore) as to the
fairness from a financial point of view are not necessarily opinions as to "fair
value" under Section 262.
The foregoing summary of the rights of dissenting stockholders under
Delaware Law does not purport to be a complete statement of the procedures to be
followed by stockholders desiring to exercise any dissenters' rights under
Delaware Law. The preservation and exercise of dissenters' rights require strict
adherence to the applicable provisions of Delaware Law.
Going Private Transactions. The Commission has adopted Rule 13e-3 under
the Exchange Act which is applicable to certain "going private" transactions and
which may, under certain circumstances, be applicable to the Merger or another
business combination following the purchase of Shares pursuant to the Offer or
in which Purchaser seeks to acquire the remaining Shares not held by it.
Purchaser believes that Rule 13e-3 will not be applicable to the Merger. Rule
13e-3 requires, among other things, that certain financial information
concerning the Company and certain information relating to the fairness of the
proposed transaction and the consideration offered to minority stockholders in
such transaction be filed with the Commission and disclosed to stockholders
prior to consummation of the transaction.
Plans for the Company. It is expected that, initially following the
Merger, the business and operations of the Company will, except as set forth in
this Offer to Purchase, be continued by the Company substantially as they are
currently being conducted. Parent will continue to evaluate the business and
operations of the Company during the pendency of the Offer and after the
consummation of the Offer and the Merger, and will take such actions as it deems
appropriate under the circumstances then existing. Parent intends to seek
additional information about the Company during this period. Thereafter, Parent
intends to review such information as part of a comprehensive review of the
Company's business, operations, capitalization and management in order to
determine what, if any, changes would be desirable in light of the circumstances
which then exist. Such changes could include, among other things, changes in the
Company's business, corporate structure, restated certificate of incorporation,
by-laws, capitalization or management. It is expected that the business and
operations of the Company would form an important part of Parent's future
business plans.
Assuming the Minimum Condition is satisfied and Purchaser purchases Shares
pursuant to the Offer, Parent intends to exercise promptly its rights under the
Merger Agreement to obtain majority representation on, and control of, the
Company Board. See "Section 10 -- Merger Agreement -- Company Board
Representation" above. Parent will exercise such rights by causing the Company
to elect to the Company Board the following individuals: Rob van den Bergh, Theo
G.G. Bouwman, Frans J.G.M. Cremers, Gerald Hobbs, Thomas A. Mastrelli and James
Ross. Information with respect to such directors is contained in Schedule I
hereto and in Schedule I to the Schedule 14D-9. The Merger Agreement provides
that, upon the purchase of and payment for any Shares by Parent or any of its
subsidiaries pursuant to the Offer, Parent shall be entitled to designate such
number of directors, rounded up to the next whole number, on the Company Board
such that the percentage of its designees on the Company Board shall equal the
percentage of the outstanding Shares beneficially owned by Parent and its
affiliates at such time. See Section 11. The Merger Agreement provides that the
directors of Purchaser and the officers of the Company at the Effective Time of
the Merger will, from and after the Effective Time, be the initial directors and
officers, respectively, of the Surviving Corporation.
Purchaser or an affiliate of Purchaser may, following the consummation or
termination of the Offer, seek to acquire additional Shares through open market
purchases, privately negotiated transactions, a tender offer or exchange offer
or otherwise, upon such terms and at such prices as it shall determine, which
may be more or less than the price to be paid pursuant to the Offer. Purchaser
and its affiliates also reserve the right to dispose of any or all Shares
acquired by them, subject to the terms of the Merger Agreement.
Except as indicated in this Offer to Purchase, Parent does not have any
current plans or proposals which relate to or would result in any extraordinary
corporate transaction, such as a merger, reorganization or liquidation,
relocation of any operations of the Company or any of its subsidiaries, any
purchase, sale or
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transfer of a material amount of assets, involving the Company or any of its
subsidiaries, any material change in the Company's present indebtedness,
capitalization or dividend policy, any change in the present Board or management
of the Company or any other material change in the Company's corporate structure
or business.
12. DIVIDENDS AND DISTRIBUTIONS.
The Merger Agreement provides that the Company shall not, between the date
of the Merger Agreement and the Effective Time, without the prior consent of
Parent, (a) declare, set aside or pay any dividends on, or make any other
distributions (whether in cash, securities or other property) in respect of, any
of its outstanding capital stock (other than, with respect to a Subsidiary of
the Company, to its corporate parent), (b) split, combine or reclassify any of
its outstanding capital stock or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
outstanding capital stock, or (c) purchase, redeem or otherwise acquire any
shares of outstanding capital stock or any rights, warrants or options to
acquire any such shares, except, in the case of this clause (c), for the
acquisition of Shares from holders of Stock Options in full or partial payment
of the exercise price or any taxes payable by such holder upon exercise of Stock
Options to the extent required under the terms of such Stock Options as in
effect on the date of the Merger.
If, on or after December 17, 2000, the Company should declare, set aside,
make or pay any dividend on the Shares or make any other distribution (including
the issuance of additional shares of capital stock pursuant to a stock dividend
or stock split, the issuance of other securities or the issuance of rights for
the purchase of any securities) with respect to the Shares that is payable or
distributable to stockholders of record on a date prior to the transfer to the
name of Purchaser or its nominee or transferee on the Company's stock transfer
records of the Shares purchased pursuant to the Offer as otherwise permitted by
the Merger Agreement, then, without prejudice to Purchaser's rights under
Section 14, any dividend, distribution or right shall be received and held by
the tendering stockholder for the account of Purchaser and will be required to
be promptly remitted and transferred by each tendering stockholder to the
Depositary for the account of Purchaser, accompanied by appropriate
documentation of transfer.
13. POSSIBLE EFFECTS OF THE OFFER ON THE MARKET FOR SHARES, NYSE LISTING, MARGIN
REGULATIONS AND EXCHANGE ACT REGISTRATION.
Possible Effects of the Offer on the Market for the Shares. The purchase
of Shares by Purchaser pursuant to the Offer will reduce the number of Shares
that might otherwise trade publicly and will reduce the number of holders of
Shares, which could adversely affect the liquidity and market value of the
remaining Shares held by the public.
Parent intends to cause the delisting of the Shares by the NYSE following
consummation of the Offer.
NYSE Listing. Depending upon the number of Shares purchased pursuant to
the Offer, the Shares may no longer meet the standards for continued listing on
the NYSE. According to NYSE's published guidelines, the NYSE would consider
delisting the Shares if, among other things, the number of Shares publicly held
falls below 600,000 (exclusive of holdings of directors, officers, or their
immediate families and other concentrated holdings of 10% or more), or the
number of holders of Shares falls below 400 or the number of holders of Shares
falls below 1,200 and the average monthly trading volume (for most recent 12
months) is less than 100,000 shares. If, as a result of the purchase of Shares
pursuant to the Offer, the Shares no longer meet the requirements of the NYSE
for continued listing, the listing of the Shares will be discontinued. In such
event, the market for the Shares would be adversely affected.
In the event the Shares were no longer eligible for listing on the NYSE,
quotations might still be available from other sources. The extent of the public
market for the Shares and the availability of such quotations would, however,
depend upon the number of holders of such Shares remaining at such time, the
interest in maintaining a market in such Shares on the part of securities firms,
the possible termination of registration of such Shares under the Exchange Act
as described below and other factors. Purchaser cannot predict whether the
reduction in the number of Shares that might otherwise trade publicly would have
an
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adverse or beneficial effect on the market price for or marketability of the
Shares or whether it would cause future market prices to be greater or less than
the Merger Consideration.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. Such registration may be terminated upon application by the
Company to the Commission if the Shares are not listed on a "national securities
exchange" and there are fewer than 300 record holders. The termination of the
registration of the Shares under the Exchange Act would substantially reduce the
information required to be furnished by the Company to holders of Shares and to
the Commission and would make certain provisions of the Exchange Act, such as
the short-swing profit recovery provisions of Section 16(b), the requirement of
furnishing a proxy statement in connection with stockholders' meetings pursuant
to Section 14(a) or 14(c) of the Exchange Act and the related requirements of an
annual report, and the requirements of Rule 13e-3 under the Exchange Act with
respect to "going private" transactions, no longer applicable to the Shares. In
addition, "affiliates" of the Company and persons holding "restricted
securities" of the Company may be deprived of the ability to dispose of such
securities pursuant to Rule 144 promulgated under the Securities Act of 1933, as
amended. If registration of the Shares under the Exchange Act were terminated,
the Shares would no longer be eligible for reporting in the Nasdaq National
Market System. Purchaser currently intends to seek to cause the Company to
terminate the registration of the Shares under the Exchange Act as soon after
consummation of the Offer as the requirements for termination of registration
are met.
Margin Regulations. The Shares are currently "margin securities," as such
term is defined under the rules of the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board"), which has the effect, among other things,
of allowing brokers to extend credit on the collateral of such securities.
Depending upon factors similar to those described above regarding listing and
market quotations, following the Offer it is possible that the Shares might no
longer constitute "margin securities" for purposes of the margin regulations of
the Federal Reserve Board, in which event such Shares could no longer be used as
collateral for loans made by brokers. In addition, if registration of the Shares
under the Exchange Act were terminated, the Shares would no longer constitute
"margin securities."
14. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer and subject to the terms
of the Merger Agreement, Purchaser shall not be required to accept for payment
or, subject to any applicable rules and regulations of the Commission, including
Rule 14e-1(c) under the Exchange Act (relating to Purchaser's obligation to pay
for or return tendered Shares promptly after termination or withdrawal of the
Offer), pay for, and may delay the acceptance for payment of or, subject to the
restriction referred to above, the payment for, any tendered Shares, and may
amend the Offer consistent with the terms of the Merger Agreement or terminate
the Offer and not accept for payment any tendered Shares, if:
(a) immediately prior to the expiration of the Offer, the Minimum
Condition shall not have been satisfied,
(b) (i) the European Commission shall not have issued a decision under
Article 6(1)(b) or 8(2) of the EC Merger Regulation (or shall not have been
deemed to have done so under Article 10(6) of the EC Merger Regulation)
declaring the Offer and the Merger compatible with the EC common market and
(ii) any applicable waiting period under the HSR Act shall not have expired
or been terminated,
(c) none of the following conditions shall have been satisfied: (i)
Parent shall have received the unconditional positive advice of the Works'
Council regarding the intent by Parent to enter into the bank facility to
be entered into by Parent in connection with the financing of the Offer
(the "Facility") and the issuance of the guarantee of Parent related
thereto (the "Facility Guarantee") (any such unconditional positive advice
is referred to as "Positive Advice"); or (ii) Parent shall have received
conditional positive advice of the Works' Council with respect to the
Facility and the Facility Guarantee and the fulfillment of the conditions
specified therein would not result in material detriment to Parent and its
Subsidiaries, or result in material restrictions on the business activities
thereof (any such conditional positive advice is referred to as "Acceptable
Conditional Advice"); or (iii) Parent shall have received written advice
from the Works' Council that is not Positive Advice or Acceptable
Conditional Advice regarding the Facility
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to be entered into and the Facility Guarantee to be issued and either (A)
35 days shall have elapsed from the date that Parent has notified the
Works' Council of its intention to enter into the Facility and issue the
Facility Guarantee, provided that the Works' Council shall not have
commenced any appeal or other legal proceeding in respect of the Facility
or the Facility Guarantee or (B) the Works' Council shall have notified
Parent in writing or publicly announced that it will disclaim its right to
appeal or take any other legal action in connection with the Facility to be
entered into or the Facility Guarantee to be issued, or
(d) the Merger Agreement shall have been terminated in accordance with
its terms, or
(e) at any time on or after the date of the Merger Agreement and prior
to the Expiration Date, any of the following events shall occur and be
continuing and shall not have resulted from the breach by Parent or
Purchaser of any of their obligations under the Merger Agreement:
(i) there shall be any statute, rule, regulation, judgment, order
or injunction enacted, entered, enforced, promulgated or deemed
applicable to the Offer or the Merger, that shall (A) prohibit or impose
any material limitations on Parent's or Purchaser's ownership or
operation (or that of any of their respective Subsidiaries or
affiliates) of all or a material portion of their or the Company's
businesses or assets, (B) challenge the acquisition by Parent or
Purchaser of any Shares pursuant to the Offer, (C) prohibit the making
or consummation of the Offer or the Merger or the performance of any of
the transactions contemplated by the Merger Agreement, or (D) impose
material limitations on the ability of Purchaser, or render Purchaser
unable, to accept for payment, pay for or purchase some or all of the
Shares pursuant to the Offer and the Merger, or effectively to exercise
full rights of ownership of the Shares, including, without limitation,
the right to vote the Shares purchased by Purchaser or Parent on all
matters properly presented to the Company's stockholders; or
(ii) (A) any representation or warranty of the Company contained in
the Merger Agreement that is qualified as to Material Adverse Effect
shall not be true and correct, or (B) any representation or warranty of
the Company in the Merger Agreement that is not so qualified shall not
be true and correct in all material respects, in each case as of the
date of consummation of the Offer as though made on or as of such date
(other than representations and warranties that by their terms address
matters only as of another specified date, which shall be true and
correct only as of such other specified date) except where (1) the
failure of such representations and warranties (other than those
relating to the number of shares and/or options, warrants or other
rights to acquire capital stock set forth in the Company's
representations and warranties in the Merger Agreement) referred to in
clause (e)(ii)(B) to be so true and correct, in the aggregate, have not
had and would not reasonably be expected to have a Material Adverse
Effect on the Company or (2) where the failure of such representations
and warranties relating to the number of shares and/or options, warrants
or other rights to acquire capital stock set forth in the Company's
representations and warranties in the Merger Agreement to be so true and
correct would not, in the aggregate, relate to an inaccuracy in excess
of 150,000 shares and/or options, warrants or other rights to acquire
capital stock; or
(iii) the Company shall have breached or failed in any material
respect to perform any material obligation or to comply with any
material agreement or covenant of the Company to be performed by or
complied with by it under the Merger Agreement; or
(iv) there shall have occurred (A) any general suspension of
trading in, or limitation on prices for, securities on the New York
Stock Exchange or in the Nasdaq National Market System, for a period in
excess of three hours (excluding suspensions or limitations resulting
solely from physical damage or interference with such exchanges not
related to market conditions), (B) a declaration of a banking moratorium
or any suspension of payments in respect of banks in the United States
or outside the United States (whether or not mandatory), (C) any
limitation (whether or not mandatory) by any United States or foreign
governmental authority on the extension of credit by banks or other
financial institutions or (D) in the case of any of the foregoing
existing at the time of the commencement of the Offer, a material
acceleration or worsening thereof; or
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<PAGE> 39
(v) except as previously disclosed by the Company in the Company's
previous filings with the Commission or to Parent, there shall have
occurred an event, change, occurrence, or development of a state of
facts or circumstances having, or which would reasonably be expected to
have, a Material Adverse Effect on the Company,
that in the reasonable judgment of Parent or Purchaser, in any such case, and
regardless of the circumstances (including any action or inaction by Parent or
Purchaser) giving rise to such condition, makes it inadvisable to proceed with
the Offer and/or with such acceptance for payment of, or payment for, Shares.
Subject to the terms of the Merger Agreement, the foregoing conditions are
for the sole benefit of Parent and Purchaser and may be waived by Parent or
Purchaser, in whole or in part, at any time and from time to time, in the sole
discretion of Parent or Purchaser. The failure by Parent or Purchaser at any
time to exercise any of the foregoing rights shall not be deemed a waiver of any
right and each such right shall be deemed an ongoing right which may be asserted
at any time and from time to time.
15. CERTAIN LEGAL MATTERS AND REGULATORY APPROVALS.
General. Based upon its examination of publicly available information with
respect to the Company and the review of certain information furnished by the
Company to Parent and discussions between representatives of Parent with
representatives of the Company during Parent's investigation of the Company (see
Section 10), neither Purchaser nor Parent is aware of (a) any license or other
regulatory permit that appears to be material to the business of the Company or
any of its subsidiaries, taken as a whole, which might be adversely affected by
the acquisition of Shares by Purchaser pursuant to the Offer or (b) except as
set forth below, of any approval or other action by any domestic (federal or
state) or foreign Governmental Authority which would be required prior to the
acquisition of Shares by Purchaser pursuant to the Offer. Should any such
approval or other action be required, it is Purchaser's current intention to
seek such approval or action. Purchaser does not currently intend, however, to
delay the purchase of Shares tendered pursuant to the Offer pending the outcome
of any such action or the receipt of any such approval (subject to Purchaser's
right to decline to purchase Shares if any of the conditions in Section 14 shall
have occurred). There can be no assurance that any such approval or other
action, if needed, would be obtained without substantial conditions or that
adverse consequences might not result to the business of the Company, Purchaser
or Parent or that certain parts of the businesses of the Company, Purchaser or
Parent might not have to be disposed of or held separate or other substantial
conditions complied with in order to obtain such approval or other action or in
the event that such approval was not obtained or such other action was not
taken. Purchaser's obligation under the Offer to accept for payment and pay for
Shares is subject to certain conditions, including conditions relating to the
legal matters discussed in this Section 15. See Section 14 for certain
conditions of the Offer.
State Takeover Laws. The Company is incorporated under the laws of the
State of Delaware. In general, Section 203 of Delaware Law prevents an
"interested stockholder" (generally a person who owns or has the right to
acquire 15% or more of a corporation's outstanding voting stock, or an affiliate
or associate thereof) from engaging in a "business combination" (defined to
include mergers and certain other transactions) with a Delaware corporation for
a period of three years following the date such person became an interested
stockholder unless, among other things, prior to such date the board of
directors of the corporation approved either the business combination or the
transaction in which the interested stockholder became an interested
stockholder. On December 17, 2000, prior to the execution of the Merger
Agreement, the Board by unanimous vote of all directors present at a meeting
held on such date, approved the Merger Agreement and the transactions
contemplated thereby, determined that each of the Offer and the Merger is fair
to, and in the best interest of, the stockholders of the Company. Accordingly,
Section 203 is inapplicable to the Offer and the Merger.
A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or have
substantial assets, stockholders, principal executive offices or principal
places of business, or whose business operations otherwise have substantial
economic effects, in such states. In Edgar v. MITE Corp., the Supreme Court of
the United States invalidated on constitutional grounds the Illinois Business
Takeover Statute, which, as a matter of state securities law, made takeovers of
34
<PAGE> 40
corporations meeting certain requirements more difficult. However, in 1987 in
CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of
Indiana may, as a matter of corporate law and, in particular, with respect to
those aspects of corporate law concerning corporate governance, constitutionally
disqualify a potential acquiror from voting on the affairs of a target
corporation without the prior approval of the remaining stockholders. The state
law before the Supreme Court was by its terms applicable only to corporations
that had a substantial number of stockholders in the state and were incorporated
there.
The Company, directly or through its subsidiaries, conducts business in a
number of states throughout the United States, some of which have enacted
takeover laws. Purchaser does not know whether any of these laws will, by their
terms, apply to the Offer or the Merger and has not complied with any such laws.
Should any person seek to apply any state takeover law, Purchaser will take such
action as then appears desirable, which may include challenging the validity or
applicability of any such statute in appropriate court proceedings. In the event
it is asserted that one or more state takeover laws is applicable to the Offer
or the Merger, and an appropriate court does not determine that it is
inapplicable or invalid as applied to the Offer, Purchaser might be required to
file certain information with, or receive approvals from, the relevant state
authorities. In addition, if enjoined, Purchaser might be unable to accept for
payment any Shares tendered pursuant to the Offer, or be delayed in continuing
or consummating the Offer, and the Merger. In such case, Purchaser may not be
obligated to accept for payment any Shares tendered. See Section 14.
Antitrust. Under the HSR Act and the rules that have been promulgated
thereunder by the FTC, certain acquisition transactions may not be consummated
unless certain information has been furnished to the Antitrust Division and the
FTC and certain waiting period requirements have been satisfied. The acquisition
of Shares by Purchaser pursuant to the Offer are subject to such requirements.
Pursuant to the HSR Act, on December 18, 2000, Parent filed a Premerger
Notification and Report Form in connection with the purchase of Shares pursuant
to the Offer with the Antitrust Division and the FTC. Under the provisions of
the HSR Act applicable to the Offer, the purchase of Shares pursuant to the
Offer may not be consummated until the expiration of a 15-calendar day waiting
period following the filing by Parent. Accordingly, the waiting period under the
HSR Act applicable to the purchase of Shares pursuant to the Offer will expire
at 11:59 p.m., New York City time, on January 1, 2001, unless such waiting
period is earlier terminated by the FTC and the Antitrust Division or extended
by a request from the FTC or the Antitrust Division for additional information
or documentary material prior to the expiration of the waiting period. Pursuant
to the HSR Act, Parent has requested early termination of the waiting period
applicable to the Offer. There can be no assurance, however, that the 15-day HSR
Act waiting period will be terminated early. If either the FTC or the Antitrust
Division were to request additional information or documentary material from
Parent with respect to the Offer, the waiting period with respect to the Offer
would expire at 11:59 p.m., New York City time, on the tenth calendar day after
the date of substantial compliance with such request. Thereafter, the waiting
period could be extended only by court order. If the acquisition of Shares is
delayed pursuant to a request by the FTC or the Antitrust Division for
additional information or documentary material pursuant to the HSR Act, the
Offer may, but need not, be extended and, in any event, the purchase of and
payment for Shares will be deferred until 10 days after the request is
substantially complied with, unless the waiting period is sooner terminated by
the FTC and the Antitrust Division. Only one extension of such waiting period
pursuant to a request for additional information is authorized by the HSR Act
and the rules promulgated thereunder, except by court order. Any such extension
of the waiting period will not give rise to any withdrawal rights not otherwise
provided for by applicable law. See Section 4. It is a condition to the Offer
that the waiting period applicable under the HSR Act to the Offer expire or be
terminated. See Section 1 and Section 14.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of Shares by
Purchaser pursuant to the Offer. At any time before or after the purchase of
Shares pursuant to the Offer by Purchaser, the FTC or the Antitrust Division
could take such action under the antitrust laws as it deems necessary or
desirable in the public interest, including seeking to enjoin the purchase of
Shares pursuant to the Offer or seeking the divestiture of Shares purchased by
Purchaser or the divestiture of substantial assets of Parent, the Company or
their respective subsidiaries. Private parties and state attorneys general may
also bring legal action under federal or state antitrust laws
35
<PAGE> 41
under certain circumstances. Based upon an examination of information available
to Parent relating to the businesses in which Parent, the Company and their
respective subsidiaries are engaged, Parent and Purchaser believe that the Offer
will not violate the antitrust laws. Nevertheless, there can be no assurance
that a challenge to the Offer on antitrust grounds will not be made or, if such
a challenge is made, what the result would be. See Section 14 for certain
conditions to the Offer, including conditions with respect to litigation.
The consummation of the Merger is also contingent upon confirmation from
the European Commission under the EU Merger Regulation, that the Merger does not
create or strengthen a dominant position as a result of which effective
competition would be significantly impeded in the European common market. Parent
and the Company will jointly prepare and file with the European Commission the
required notification of the Merger. The European Commission has one month from
the date on which such information is supplied in which to complete its
preliminary investigation into the Merger. If, following such one-month period,
the European Commission considers that it needs to examine the Merger more
closely, it may initiate a Phase II investigation; if it does initiate a Phase
II investigation, the European Commission must make a final determination as to
whether or not the Merger is compatible with the European common market no later
than four months after the initiation of such investigation. If the European
Commission does not make a decision within this four-month period, the Merger
would automatically be deemed to be compatible with the European common market
and would be allowed to proceed. Parent and the Company believe it is likely
that the European Commission will determine that the Merger is compatible with
the common market. However, no assurance can be given that the European
Commission will not impose certain conditions or restrictions on the Merger.
Parent and the Company have determined that approvals (or expiration of any
waiting periods) under the Competition Act of Canada are not required to
consummate the Offer or the Merger.
Parent and the Company conduct operations in a number of jurisdictions
domestically and abroad, with respect to which other regulatory filings or
approvals may be required or advisable in connection with the completion of the
Transactions. Parent and the Company are currently in the process of reviewing
whether filings or approvals may be required or desirable in these jurisdictions
which may be material to Parent and the Company and its subsidiaries. None of
these other filings or approvals are conditions to Purchaser's obligation to
accept for purchase Shares tendered in the Offer. It is possible that one or
more of these filings may not be made, or one or more of these approvals, which
are not as a matter of practice required to be obtained prior to effectiveness
of a merger transaction, may not be obtained, prior to the Effective Time.
Other Laws and Legal Matters. According to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1999, the Company conducts
operations in a number of non-U.S. countries. In the event that one or more
non-U.S. laws is deemed to be applicable to the Offer, Parent and/or the Company
may be required to file certain information or to receive the approval of the
relevant foreign authority. Such government may also attempt to impose
additional conditions on the Company's operations conducted in such countries.
After completion of the Offer, Purchaser will seek further information regarding
the applicability of any such laws and presently intends to take such action as
such laws may require.
16. FEES AND EXPENSES.
Except as set forth below, Purchaser will not pay any fees or commissions
to any broker, dealer or other person for soliciting tenders of Shares pursuant
to the Offer.
Parent has engaged Merrill Lynch & Co. ("Merrill Lynch") to act as its
financial advisor and Dealer Manager in connection with the Offer and the
Merger. Parent will pay Merrill Lynch customary compensation for its financial
advisory services in connection with the Offer and the merger. Parent has agreed
to reimburse Merrill Lynch for all reasonable out-of-pocket fees, expenses and
costs, including reasonable fees and expenses of legal counsel, and to indemnify
Merrill Lynch and certain related persons against certain liabilities and
expenses in connection with the Offer and the Merger, including certain
liabilities under the federal securities laws. Merrill Lynch has from time to
time provided financial advisory services to Parent.
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<PAGE> 42
Purchaser and Parent have retained Innisfree M&A Incorporated to serve as
the Information Agent and Citibank, N.A. to serve as the Depositary in
connection with the Offer. The Information Agent may contact holders of Shares
by personal interview, mail, telephone, telex, telegraph and other methods of
electronic communication and may request brokers, dealers, commercial banks,
trust companies and other nominees to forward the Offer materials to beneficial
holders. The Information Agent and the Depositary will each receive reasonable
and customary compensation for their services, be reimbursed for certain
reasonable out-of-pocket expenses and be indemnified against certain liabilities
in connection with their services, including certain liabilities and expenses
under the federal securities laws.
Except as set forth above, neither Parent nor Purchaser will pay any fees
or commissions to any broker or dealer or other person or entity in connection
with the solicitation of tenders of Shares pursuant to the Offer. Brokers,
dealers, banks and trust companies will be reimbursed by Purchaser for customary
mailing and handling expenses incurred by them in forwarding the Offer materials
to their customers.
17. MISCELLANEOUS.
The Offer is being made solely by this Offer to Purchase and the related
Letter of Transmittal and is being made to holders of Shares. Purchaser is not
aware of any jurisdiction where the making of the Offer is prohibited by any
administrative or judicial action pursuant to any valid state statute. If
Purchaser becomes aware of any valid state statute prohibiting the making of the
Offer or the acceptance of Shares pursuant thereto, Purchaser will make a good
faith effort to comply with any such state statute. If, after such good faith
effort, Purchaser cannot comply with any such state statute, the Offer will not
be made to (nor will tenders be accepted from or on behalf of) the holders of
Shares in such state. In any jurisdiction where the securities, blue sky or
other laws require the Offer to be made by a licensed broker or dealer, the
Offer shall be deemed to be made on behalf of Purchaser by the Dealer Manager or
by one or more registered brokers or dealers licensed under the laws of such
jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF PURCHASER OR THE COMPANY NOT CONTAINED IN THIS OFFER
TO PURCHASE OR IN THE LETTER OF TRANSMITTAL, AND IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
Pursuant to Rule 14d-3 of the General Rules and Regulations under the
Exchange Act, Parent, Parent and Purchaser have filed with the Commission the
Schedule TO, together with exhibits, furnishing certain additional information
with respect to the Offer. The Schedule TO and any amendments thereto, including
exhibits, may be inspected at, and copies may be obtained from, the same places
and in the same manner as set forth in Section 7 (except that they will not be
available at the regional offices of the Commission).
ARTIST ACQUISITION, INC.
Dated: December 22, 2000
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<PAGE> 43
SCHEDULE I
INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE
OFFICERS OF PARENT AND PURCHASER
1. DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER. The following table sets
forth the name and present principal occupation or employment, and material
occupations, positions, offices or employments for the past five years, of each
director and executive officer of Purchaser. Unless otherwise indicated, each
such person is a citizen of the United States of America, and the business
address of each such person is 770 Broadway, New York, New York 10036. Unless
otherwise indicated, each such person has held his or her present occupation as
set forth below, or has been an executive officer of Purchaser, or the
organization indicated, for the past five years.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
---- --------------------------------------------------
<S> <C>
Thomas A. Mastrelli.................. Mr. Mastrelli has been the sole director and Chief Operating
Officer of Purchaser since December 2000. Since January 1,
1999, Mr. Mastrelli has served as Chief Operating Officer of
VNU, Inc. From April 16, 1998 to December 31, 1998, Mr.
Mastrelli served as Executive Vice President and General
Manager of VNU, Inc. Beginning in 1981, he was a partner at
the public accounting and consulting firm of Leslie Sufrin
and Company.
Gerald S. Hobbs...................... Mr. Hobbs has been the Chief Executive Officer of Purchaser
since December 2000. See Part 2 of this Schedule I.
James Ross........................... Mr. Ross has been the General Counsel of Purchaser since
December 2000. Mr. Ross has been Vice President, General
Counsel and Secretary of VNU, Inc. for the past five years.
</TABLE>
2. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. The following table sets
forth the name and present principal occupation or employment, and material
occupations, positions, offices or employments for the past five years, of each
director and executive officer of Parent. Unless otherwise indicated, each such
person is a citizen of the Netherlands, and the business address of each such
person is c/o VNU N.V., Ceylonpoort 5-25, 2037 AA Haarlem, the Netherlands.
Unless otherwise indicated, each occupation set forth opposite an individual's
name refers to employment with Parent. Unless otherwise indicated, each such
person has held his or her present occupation as set forth below, or has been an
executive officer at Parent, or the organization indicated, for the past five
years.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
---- --------------------------------------------------
<S> <C>
Piet A.W. Roef....................... Mr. Roef has been Chairman of the Supervisory Board of
Directors of Parent since 1995. Mr. Roef also serves as a
Member of Supervisory Boards of Directors of Gamma Holding
N.V., Hagemeyer N.V., Koninklijke Numico N.V. and Robeco
N.V. He also served as the Chairman of the Supervisory
Boards of Directors of P&C Groep N.V. and Parcom.
Peter J. van Dun..................... Mr. van Dun has been a member of the Supervisory Board of
Directors of Parent since 1996. Mr. Van Dun served as a
member of the Executive Board of Ahold NV till 1997. Mr. van
Dun also serves as Member of the Supervisory Board of
Directors of Macintosh N.V., Member of Foundation Ahold
Continuity, and member of the Board of Meyer Monitor B.V.
</TABLE>
I-1
<PAGE> 44
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
---- --------------------------------------------------
<S> <C>
Aad G. Jacobs........................ Mr. Jacobs has been Vice Chairman of the Supervisory Board
of Directors of Parent since April 2000. Mr. Jacobs has been
a member of the Supervisory Board of Directors of Parent
since 1998. From 1992 to 1998, Mr. Jacobs served as Chairman
of the Executive Board of ING Groep N.V. Mr. Jacobs also
serves as Chairman of the Supervisory Board of Directors of
Vedior N.V., Vice-Chairman of the Supervisory Board of
Directors of Dutch Participation Company N.V., Member of the
Supervisory Boards of Directors of Amsterdam Exchanges
(Euronext), Buhrman N.V., IHC Caland N.V., ING Groep N.V.,
Koninklijke Nederlandsche Petroleum Maatschappij N.V./Royal
Dutch Shell, the Dutch Railways, National Investment Bank
N.V. and N.V. Struktongroep.
Frank L.V. Meysman
(Citizen of Belgium)............... Mr. Meysman has been a member of the Supervisory Board of
Directors of Parent since 1995. Mr. Meysman currently serves
as a director and Executive Vice President of Sara Lee Corp.
During the past five years, Mr. Meysman has served as a
Member of the Board of the American Chamber of Commerce in
the Netherlands, and Director of Zeneca Group PLC and GIMV
N.V.
Lien M.W.M. Vos-van Gortel........... Ms. Vos-van Gortel has been a member of the Supervisory
Board of Directors of Parent since 1995. Ms. Vos-van Gortel
also serves as a Member of the Council of State. During the
5 past years she has served as a Member of the Supervisory
Board of Directors of NCM Holding N.V., Chairman of the
Supervision Boards on the Lotteries and the National Nature
Historic Museum, and member of the Boards of Advice of
Association of Holders of Shares VEB and the Dutch Cancer
Institute.
Peter A.F.W. Elverding............... Mr. Elverding has been a member of the Supervisory Board of
Directors of Parent since April 2000. From October 1995 he
served as a member of the Executive Board of DSM N.V. As of
July 1999, Mr. Elverding serves as the Chairman of the
Executive Board of DSM N.V. He also serves as member of the
Board of the Dutch employers association, member of the
Supervisory Board of the Dutch gaz union, member of the
Supervisory Board of De Nederlandsche Bank, member American
Chamber of Commerce in the Netherlands and member of the
Supervision Board of the University of Maastricht
Joep L. Brentjens.................... Mr. Brentjens has been a member of the Supervisory Board of
Directors of Parent since April 2000. Mr. Brentjens served
as Chairman of the Executive Board of Directors of Parent
from 1981 until April 2000. He has also served as Chairman
of the Supervisory Boards of Directors of Heijmans N.V. and
Arboned, member of the Supervisory Boards of Directors of
Roto Smeets de Boer N.V. and Koninklijke Emballage Industrie
Van Leer N.V., member of the Executive Board of P. Bakker
Hillegom B.V., Member of the Foundation Katholieke
Universiteit Nijmegen and Member of the Board of Advice of
ABN AMRO Bank N.V.
</TABLE>
I-2
<PAGE> 45
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
---- --------------------------------------------------
<S> <C>
Rob F. van den Bergh................. Mr. van den Bergh has been the Chairman and Chief Executive
Officer of Parent since April 2000. Mr. Van den Bergh
previously served as the Vice Chairman of the Executive
Board of Directors of Parent from 1998 to April 2000. From
1992 to 1998, Mr. van den Bergh served as member of the
Executive Board of Parent. He also has served on the
Supervisory Boards of Directors of Philips Nederland, CVI,
Boompers and he is member of the Supervision Board of the
Jewish Historic Museum.
Frans J.G.M. Cremers................. Mr. Cremers has been the Chief Financial Officer of Parent
since 1997 and a member of the Executive Board of Directors
of Parent since 1996. Mr. Cremers served as Financial
Director and Member of the Board of Shell Expro UK from 1993
until 1996.
Theo G.G.M. Bouwman.................. Mr. Bouwman has been a member of the Executive Board of
Directors of Parent since April 2000. From 1994 to April
2000, Mr. Bouwman served as CEO of the Consumer Magazines
Group. He serves as a member of the Dutch Publishers
Association and as a member of the Foundation Press Now. He
also serves as a Chairman of the Supervision Board for the
advertisement branche.
Gerald S. Hobbs
(Citizen of the United States)..... Mr. Hobbs has served as a member of the Executive Board of
Directors of Parent since 1998. Mr. Hobbs has been the
Chairman of the Board of Directors and Chief Executive
Officer of VNU, Inc. since 1994. Prior to joining VNU Inc.,
Mr. Hobbs was the Chief Executive Officer of BPI
Communications, a wholly owned subsidiary of Parent. He has
also served as both the Chairman of the Board and a Director
of the American Business Press, and is currently a Director
of the Advertising Council, Inc., BPA International, Jobson
Publishing and the Construction Market Data Group.
</TABLE>
I-3
<PAGE> 46
THE LETTER OF TRANSMITTAL AND CERTIFICATES EVIDENCING SHARES AND ANY OTHER
REQUIRED DOCUMENTS SHOULD BE SENT OR DELIVERED BY EACH STOCKHOLDER OR HIS
BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE TO THE
DEPOSITARY AT ONE OF ITS ADDRESSES SET FORTH BELOW.
The Depositary for the Offer is:
CITIBANK, N.A.
<TABLE>
<S> <C> <C>
By Overnight Courier: By Registered or Certified Mail: By Hand:
Citibank, N.A. Citibank, N.A. Citibank, N.A.
Corporate Actions Department Corporate Actions Department c/o Securities Transfer and Reporting
40 Campanelli Drive P.O. Box 842011 Services, Inc.
Braintree, MA 02184 Boston, MA 02284-2011 100 William Street-Galleria
Re: ACNielsen New York, NY 10038
</TABLE>
Questions or requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
listed below. Additional copies of this Offer to Purchase, the Letter of
Transmittal and the Notice of Guaranteed Delivery may be obtained from the
Information Agent. A stockholder may also contact brokers, dealers, commercial
banks or trust companies for assistance concerning the Offer.
The Information Agent for the Offer is:
INNISFREE M&A INCORPORATED LOGO
501 Madison Avenue, 20th Floor
New York, New York 10022
Bankers and Brokers Call Collect: (212) 750-5833
All Others Call Toll Free: (888) 750-5834
The Dealer Manager for the Offer is:
MERRILL LYNCH & CO.
4 World Financial Center
New York, New York 10080
Call Collect: (212) 236-3790
