SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark one)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1993
OR
() TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from____________ to ____________
Commission file Number 1-7155
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THE DUN & BRADSTREET CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 13-2740040
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(State of Incorporation) (I.R.S. Employer Identification No.)
200 Nyala Farms, Westport, Connecticut 06880
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (203) 222-4200
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange
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Common Stock, par value $1 per share New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all
reports required by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
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Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. _____
As of January 31, 1994, 170,931,741 shares of Common Stock of The
Dun & Bradstreet Corporation were outstanding and the aggregate market
value of such Common Stock held by nonaffiliates (based upon its closing
transaction price on the Composite Tape on such date) was approximately
$10,747 million.
(Continued)
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Documents Incorporated by Reference
PART I
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ITEM 1 -Business Performance & Outlook, 1993, Pages 31
and 32, Note 14 Operations by Business
Segments and Page 32, Note 15 Operations
by Geographic Area, of the 1993 Annual
Report.
ITEM 3 -Legal Proceedings Page 29, Note 12 Litigation, of the
1993 Annual Report.
PART II
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ITEM 5 -Market for the Page 16, Financial Review, of the 1993
Registrant's Annual Report.
Common Equity
and Related
Stockholder Matters
ITEM 6 -Selected Financial Pages 34 and 35, Ten-Year Selected
Data Financial Data, of the 1993 Annual
Report.
ITEM 7 -Management's Pages 13 to 16, Financial Review,
Discussion and of the 1993 Annual Report.
Analysis of
Financial Condition
and Results of
Operations
ITEM 8 -Financial Pages 18 to 33 of the 1993 Annual
Statements Report.
and Supplementary
Data
PART III
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ITEM 10 -Directors and Pages 2 to 4 and 21 of the Company's
Executive Proxy Statement dated March 11, 1994.
Officers of
the Registrant
ITEM 11 -Executive Pages 8 to 19 of the Company's Proxy
Compensation Statement dated March 11, 1994.
ITEM 12 -Security Pages 19 to 21 of the Company's Proxy
Ownership of Statement dated March 11, 1994.
Certain Beneficial
Owners and Management
ITEM 13 -Certain Page 19 to 21 of the Company's Proxy
Relationships Statement dated March 11, 1994.
and Related
Transactions
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The Index to Exhibits is located on Pages 26 to 28.
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PART I
As used in this report, except where the context indicates otherwise,
the term "Company" means The Dun & Bradstreet Corporation and all
subsidiaries consolidated in the financial statements contained herein
ITEM 1. BUSINESS
(a)(1) The Dun & Bradstreet Corporation was incorporated under the laws
of the State of Delaware on February 6, 1973 and became the parent
holding company of Dun & Bradstreet, Inc. and its subsidiaries on June
1, 1973. Dun & Bradstreet, Inc. was incorporated under the laws of the
State of Delaware in 1930 and is the successor to a business commenced
in 1841.
(2) Not applicable.
(b)(1) The response to this item is incorporated herein by reference to
Note 14 Operations by Business Segments on Pages 31 to 32 of the 1993
Annual Report.
(2) Not applicable.
(c)(1) The Dun & Bradstreet Corporation is a non-operating holding
company whose revenue is derived primarily from dividends received from
its subsidiaries and interest income on its investments. Reference
should be made to EXHIBIT B, List of Active Subsidiaries as of January
31, 1994, which describes the Company's subsidiaries. A descriptive
narrative of the Company's business segments follows item (d).
The number of employees at December 31, 1993 was approximately 50,400.
(d) The response to this item is incorporated herein by reference to
Note 15 Operations by Geographic Area on Page 32 of the 1993 Annual
Report.
The Company is the world's leading marketer of information, software
and services for business decision making. Its operations can be
divided into five business segments: Marketing Information Services,
Risk Management and Business Marketing Information Services, Software
Services, Directory Information Services, and Other Business Services.
A narrative description of the Company's operations by business segment
follows.
MARKETING INFORMATION SERVICES
IMS International, Inc.
IMS International, Inc. (IMS) provides information and decision-
support services to the pharmaceutical and health-care industries. IMS'
principal services are sales-territory reports, national pharmaceutical-
sales audits and national medical audits, as well as a multinational
data analysis system. Within each of these product classes, individual
country-level reports may differ in one or more important
characteristics depending on the circumstances of local pharmaceutical
sales and distribution. IMS' reports are provided in printed format, as
on-line inquiry-batch processing services and as part of electronic
customer-site workstations. IMS provides information services covering
over 70 countries and maintains offices in 48 countries on six
continents, with 65% of total revenues generated outside the U.S.
Sales-territory reports measure the effectiveness of pharmaceutical
companies' and their competitors' sales forces, by product and product
group within a geographic configuration tailored to each client's needs.
IMS sales-territory reports are available in 26 countries and account
for approximately 41% of IMS' worldwide revenues.
Pharmaceutical audits are syndicated reports which measure sales of
pharmaceutical products for an entire national market and are primarily
used by pharmaceutical companies to understand market dynamics and plan
effective business strategies. Pharmaceutical audits are available in
over 65 countries.
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National medical audits are syndicated reports utilizing data from
physician practices to provide information on how pharmaceutical
products are used, including patient and doctor details, diagnosis and
drug therapy. Medical audits are available in 40 countries.
The raw data from which IMS' services are generated is derived
either from statistically selected panels of drugstores, hospitals,
physicians, etc., or from activities such as warehouse shipments or
wholesaler sales data. To protect privacy, no individual patient is
identified in any IMS medical database. IMS has generally well-
established relationships with the sources required to create its
databases and in many cases has historical connections with the trade
associations and professional societies involved.
All major pharmaceutical companies are customers of IMS and many of
the customers subscribe to reports and services in several countries.
The scope of IMS' customer base enables it to avoid dependence on any
single customer.
While the services offered by IMS are in many respects unique in
their scope and completeness, there is competition in many countries in
which it operates from other market research firms, direct mail and
information service firms, as well as from the in-house capabilities of
its customers. Competition has traditionally arisen on a country-by-
country basis but one company now provides information services to the
pharmaceutical industry in a number of countries. However, no
competitor has the global presence nor offers the range of services that
IMS does.
Nielsen
Nielsen participates in the global consumer marketing information
services market. Nielsen is the world's largest marketing information
and services supplier. Nielsen supplies a wide range of services that
help consumer-goods manufacturers screen, plan, test and evaluate their
individual brands and marketing programs. Comprehensive information is
supplied on sales volume, shares, trends, pricing, promotion,
distribution and inventory levels. Nielsen is a leader in providing
these services to numerous industries including the grocery, beverage
and health and beauty care industries. An extensive range of test-
marketing services, innovative applications, analytical services and
software tools is also provided. Nielsen offers its services to
consumer-goods marketers in 34 countries worldwide, with approximately
70% of revenues generated outside the U.S.
Nielsen provides a measurement of the consumer response at the
actual point of sale -- the final result of the manufacturer's
production and marketing efforts. From a national sample of retail
stores, Nielsen collects point-of-sale information via electronic means
such as scanning of universal product codes (UPC) and store visits by
professional auditors. In the U.S. and other countries where electronic
point-of-sale data are available, weekly reporting of product sales and
related marketing information is the primary product offering along with
value-added analysis, such as market-response modeling and promotion
effectiveness studies. In the audit environment, store purchases are
combined with change-of-stock-on-hand data to produce data on sales to
consumers, retail inventories, brand distribution, out-of-stock items,
prices and displays. Nielsen has established a unit devoted to
Efficient Consumer Response (ECR), an emerging trend in the consumer
packaged goods industry to streamline distribution and sales processes,
eliminate waste and deliver products to consumers faster and at a lower
cost. Nielsen has formed several strategic alliances to enhance its
capabilities in ECR and to begin instituting best practices in the
industry.
Through the addition of Nielsen's household-panel data, information
is not only provided on what stores are selling, but also on what
cooperating households are buying. Nielsen Household Services provide
manufacturers and retailers with detailed consumer-behavior analyses
that help identify target audiences and assess advertising and marketing
effectiveness. These data, coupled with advertising and promotion
stimuli by household, provide a powerful addition to Nielsen's retail-
store databases. Household data are available in most countries
including the U.S.
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Through Nielsen's decision-support and software services, customers
can retrieve data and analyze information via personal computers and
terminals installed in their offices. Customers can access information
in a number of ways, including on-line connection to mainframes or
downloading data into the customer's personal computer or internal
management information systems. Nielsen provides a number of analytic
applications that assist customers in a more productive and efficient
use of their own and Nielsen's information. The Nielsen Workstation,
an innovative Windows-based software system, allows marketing and sales
managers to integrate and evaluate information from a wide array of
sources. Nielsen Spotlight is an expert system that enables users to
access a database to find the most important facts related to volume and
share changes for a brand and searches for the key factors that
influence these share changes. Opportunity Explorer helps
manufacturers' marketing and sales force personnel understand category
dynamics and pinpoint opportunities for increasing sales. Promotion
Simulator takes the analysis to the next stage by helping the sales
force evaluate and plan promotion strategies with the retailers. The
SPACEMAN space management family of products offers a hierarchy of
integrated solutions for analyzing merchandising variables and producing
automated planograms.
Nielsen's products and services are subject to direct and indirect
competition from rival marketing research and information services
companies, marketing research departments of advertisers, advertising
agencies and consulting firms, as well as the in-house operations of a
number of large manufacturers and publishers. There are six major
competitors worldwide, located in the U.S., Europe, Latin America and
the Far East, but none has the global depth and breadth of coverage that
Nielsen provides.
Nielsen Media
Nielsen Media measures television audiences and reports these and
related data to advertisers, advertising agencies, syndicators,
broadcast networks, cable networks, cable operators, television stations
and station representatives in order to increase the effectiveness of
television advertising and programming. This syndicated-statistical
information is offered on a subscription basis. Custom or ad-hoc
analyses of the data are also offered. The data are then used by
subscribers to buy, sell, plan and price television time and to make
programming and scheduling decisions.
In 1993, advertisers spent approximately $30 billion on television
advertising, including $2 billion on cable television advertising,
according to the Television Bureau of Advertising, to bring a variety of
programs and advertising messages to approximately 94.2 million U.S.
television households. These data underscore the need for television
stations, networks, advertisers, advertising agencies and others to
obtain reports on how many households and types of people are reached by
such programming.
Nielsen Media measures television audiences and reports data through
six services: Nielsen Television Index, Nielsen Syndication Services,
Nielsen Homevideo Index, Nielsen Station Index, Nielsen Hispanic
Television Index and Nielsen Hispanic Station Index. Nielsen Television
Index provides daily audience measurement and demographic estimates for
all national broadcast network-television programs through the use of
the Nielsen People Meter. Nielsen Syndication Services provides reports
and services on both the local and national level to the program
syndication segment of the television industry. Nielsen Homevideo Index
provides viewing measurement of cable, pay cable and other newer
television technologies. Nielsen Station Index provides television
audience measurement information in over 200 local markets and daily
information in 30 markets through set meters in the U.S. Nielsen
Hispanic Television Index provides viewing measurement of national
Hispanic audiences, while Nielsen Hispanic Station Index provides
viewing measurement of local Hispanic audiences. Television audience
research services based on techniques similar to those described above
are also provided in Canada, Japan, Finland, Norway, Sweden, Australia,
Columbia, Singapore and Turkey.
Nielsen Media has maintained a strong leadership position, facing
direct competition during 1993 from Arbitron in the local television
measurement arena. Arbitron announced in October of 1993 that it would
discontinue its syndicated broadcast and cable television ratings
service as of December 31, 1993. Indirectly, on both a national and
local basis, competition stems from other marketing research services
offering product movement and television audience data and services.
During 1993, Nielsen Media Research again expanded its local-market
television services and continued to invest to enhance product value,
technical competencies and data quality.
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Nielsen, IMS and Nielsen Media are subject to the usual risks
inherent in carrying on business in certain countries outside the U.S.,
including currency fluctuations, possible nationalization,expropriation,
price controls or other restrictive government actions. Management
believes that the risk of nationalization or expropriation is reduced
because its basic service is the delivery of information, rather than
the production of products which require manufacturing or the use of
natural resources.
RISK MANAGEMENT AND
BUSINESS MARKETING INFORMATION SERVICES
Dun & Bradstreet Information Services
Dun & Bradstreet Information Services (DBIS) is the world's leading
supplier of business-to-business risk management, credit and marketing
information and decision-support services that build customers'
profitability and sales. The division maintains operations in 34
countries, a data-collection network spanning nearly 200 nations and a
database covering more than 32 million businesses worldwide. Its 1,200
business analysts and 2,000 support people gather information through
face-to-face and telephone interviews. More than 200 million trade
experiences are added to the Company's file annually. Suits, liens and
judgments are also collected from more than 2,500 filing locations. And
DBIS updates its information base continually--more than 620,000 times
each business day. Its nine-digit D-U-N-S Number, endorsed by the
United Nations as a standard business identifier for cross-border
electronic data interchange, is a unique tool for establishing corporate
family relationships worldwide. DBIS also provides receivables
management services worldwide and credit insurance in the U.S. The
business generates about 35 percent of its revenue outside the U.S., and
is organized into three regions: North America, Europe/Middle
East/Africa and Asia/Pacific/Latin America.
Dun & Bradstreet Information Services North America
Dun & Bradstreet Information Services North America provides
business information, marketing information, receivable management and
credit insurance services in the U.S. and Canada through U.S. Credit
Information Services, Receivable Management Services, Business Marketing
Services, American Credit Indemnity Company and Dun & Bradstreet Canada,
which are described below.
U. S. Credit Information Services
U. S. Credit Information Services (Credit Services) provides its
customers with access to a database containing information on more than
10 million U.S. businesses. Its core product services include the
Business Information Report, the Payment Analysis Report, reference
books and customized computer-to-computer risk scoring systems. Value-
added solutions are provided through Specialized Industry Services
(Credit Advisory System, Dun's Underwriting Guide, Bankers Advisory
Service), Business Development Services, Analytical Services and
Monitoring Services. Customers can receive information in printed
formats, by fax, by telephone via DunsDial access and delivery system,
through DunsPrint's on-line service, by touch-tone telephone from
DunsVoice (a computer-generated voice system developed by DunsGate), or
by being directly linked by computer via the DunsLink access and
delivery system. Subscribers to Credit Services (approximately 70,000
customers with more than 82,000 contracts in force throughout the U.S.)
use this information in making decisions to extend credit, underwrite
insurance, evaluate purchases, and make other financial and risk
assessment decisions. Credit Services' largest customers are major
manufacturers and wholesalers, insurance companies, banks and other
credit and financial institutions.
The Business Information Report contains commercial credit
information on a specific business. This report includes the D&B Rating
and the Paydex score, a numerical score of the company's past payment
performance based on information in the Dun & Bradstreet database. This
report also includes summary information and payment data, as well as
financial, banking, historical and operational data. The Dun &
Bradstreet Reference Book of American business published six times a
year, contains listings on approximately 3 million businesses in the
United States and Puerto Rico. The Dun & Bradstreet Rating, which
reflects the credit and financial strength of a business, is included in
the Business Information Report and the Dun & Bradstreet Reference Book
of American Businesses. The Payment Analysis Report provides
information on a company's payment record and includes the Paydex score,
historical trends and industry comparisons. The Credit Advisory System
consolidates the most important information found in several reports in
addition to providing the guidelines to specifically measure risk
quality. D&B Express Service, accessible via an 800
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number, provides companies that have an occasional need for business
information with Business Information Reports and other products on
specific companies. Credit Services also markets other specialized
reports and business information.
Credit Services is believed to be the largest commercial credit
reporting agency in the world, but faces competition from in-house
operations of businesses and other general and specialized credit
reporting services.
Receivable Management Services
Receivable Management Services (RMS) provides customers with a full
range of accounts receivable management services, including third-party
collection of accounts, letter demand services and receivable-
outstanding programs. These services substitute and enhance the
customer's own internal management of accounts receivable.
RMS collects delinquent receivables primarily from commercial
establishments on behalf of more than 50,000 customers, including
commercial and insurance enterprises and government agencies.
Collection services are provided throughout the U.S. with charges
generally contingent upon collection. RMS also provides receivable
control programs, letter demand services and customer training programs
on a fixed-fee or contract basis.
Certain states require that RMS, or in some instances an individual
associate of RMS who is responsible for the conduct of the relevant
operations in the respective state's area, be licensed in connection
with collection operations. The laws under which such licenses are
granted generally provide for annual license renewals, as well as
denials, suspensions or revocations for improper actions or other
disabilities.
RMS is considered to be the leader in the commercial collection
industry. RMS faces competition from numerous other commercial
collection agencies, attorneys who receive claims directly from clients
and companies that conduct commercial collections in-house. In
addition, RMS faces potential competition from the expansion of large
consumer agencies into the commercial marketplace.
Business Marketing Services
DBIS provides marketing information services for business-to-
business and educational marketers. Services include comprehensive
information and related services used to plan, execute and evaluate the
results of marketing programs; model, target and reach prospects; and
track sales activities. This information is derived from a proprietary
database covering more than 10 million businesses in the United States
and millions more in over 200 countries. Information is delivered to
businesses in print and on diskette, magnetic tape, CD-ROM and on-line
formats.
DBIS also publishes various business marketing reference directories
including The Million Dollar Directory Series, Dun's Million Dollar Disc
(on CD-ROM), America's Corporate Families and International Affiliates,
Dun's Industrial Guide and the recently expanded Dun's Regional Business
Directories, providing information about local businesses in 41 urban
areas.
Market Data Retrieval offers services that help businesses sell to
the education market. The information provided includes course
offerings, facilities, teachers and administrators in primary and
secondary schools, school districts, preschools, libraries, colleges and
universities.
DBIS, while a market leader in the marketing information industry,
faces competition from other data providers through competitive
distribution channels, delivery formats and data quality enhancements.
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American Credit Indemnity Company
American Credit Indemnity Company (ACI) insures manufacturers,
wholesalers and other businesses against excessive credit losses from
commercial accounts. ACI also provides credit-risk management services
for business credit-insurance policyholders. ACI's services are
distributed through its own dedicated agency force with offices
throughout the U.S. and Canada.
ACI's policy terms are generally for twelve months. Coverage with
respect to a particular credit risk being insured can be canceled at any
time by ACI as to future shipments, upon notice to the policyholder.
Any debtor loss in excess of $500,000 up to $50,000,000 per debtor, and
any policy loss in excess of $1,000,000 up to $6,000,000 per policy, are
reinsured.
A business credit insurance specialist since 1893, ACI enjoys a
substantial market position with regard to credit insurance policies
which are issued in the U.S. and Canada. Competition arises from other
providers of business-credit insurance and from providers of other
financial services such as factoring. At the same time, however, the
potential market for credit insurance is not deeply penetrated by ACI or
other credit insurers.
Dun & Bradstreet Canada
Dun & Bradstreet Canada (D&B Canada) provides business information,
marketing information and receivable-management services in Canada. In
addition to credit reports on local and international businesses, D&B
Canada publishes credit reference books.
Dun & Bradstreet Information Services Europe/Middle East/Africa and
Dun & Bradstreet Information Services Asia/Pacific/Latin America
Dun & Bradstreet Information Services Europe/Middle East/Africa and
Asia/Pacific/Latin America (DBIS Europe and Asia/Pacific/Latin America,
respectively) opened their first overseas office in 1857 and today
conduct operations in offices and branches located throughout Europe,
Latin America, Africa, the Middle East, Asia, Japan and the Pacific Rim.
DBIS Europe and Asia/Pacific/Latin America provide substantially the
same business information, marketing information and receivable
management services globally outside the United States and Canada as
those provided by Dun & Bradstreet Information Services North America.
The Business Information Report contains background and financial
information on businesses located throughout the world obtained from D&B
offices in the 34 countries where there are full operations and from D&B
correspondents in 219 other countries. DBIS US and Asia/Pacific/Latin
America's other major products or services include analytical tools to
help improve business decisions, local and international credit-
reference publications, marketing publications, marketing information
systems, consumer-credit information, as well as receivable-management
services. Customers can receive information through a direct link to
the computer, in printed forms, by fax, on CD-ROM or through third
parties.
DBIS Europe and Asia/Pacific/Latin America's operations are subject
to the usual risks inherent in carrying on business in certain countries
outside of the U.S., including currency fluctuations, possible
nationalization, expropriation, price controls, changes in the
availability of data from public sector sources, or other restrictive
government action. Management believes that the risk of nationalization
or expropriation is reduced because its basic service is the delivery of
information, rather than the production of products which require
manufacturing facilities or the use of natural resources.
DBIS Europe and Asia/Pacific/Latin America face competition from
banks, credit insurance companies, application software developers and
in-house operations of businesses as well as direct competition from
businesses providing similar services. DBIS Europe is the largest
single supplier of credit information services in Europe. The
competition is primarily local and there are no competitors offering a
comparable range of global services or capabilities as DBIS.
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Moody's Investors Service, Inc.
Moody's Investors Service, Inc. (Moody's) assigns ratings to fixed
income securities and publishes a wide variety of business and financial
information. Moody's business extends to over 60 countries and its
customers include corporations, stockbrokers, governments,
municipalities, banks, libraries, institutions and individuals.
Moody's assigns ratings to various corporate and governmental
obligations, Eurosecurities, structured finance transactions and
commercial paper issuers, for which it charges most issuers a fee. At
the end of 1993, Moody's had outstanding ratings on approximately 41,000
corporate and 46,000 municipal obligations. Corporate, municipal and
government ratings are disseminated to the public through a variety of
electronic and print media. A detailed description of both the issue
which is rated and of the issuer, along with a summary of the rating
rationale for the assignment of the specific rating, also appears in
various Moody's publications.
In addition to revenues derived from ratings, Moody's provides
comprehensive historical and current business, financial, investment and
marketing information on over 30,000 major U.S. and non-U.S. entities
and on over 20,000 municipalities and governments and their securities.
This information is available in eight Manuals and on CD-ROM, tapes and
other electronic formats. The manuals are published annually and are
supplemented by news reports issued on a weekly or twice-weekly basis.
Moody's also publishes a variety of investment guides.
Moody's international operations have continued to grow due to the
expansion of international debt markets in recent years. Moody's
maintains offices in eight countries outside of the U.S. Moody's non-
U.S. operations are subject to the usual risks inherent in carrying on
business in countries outside the U.S., including currency fluctuations,
possible nationalization, expropriation, price controls and/or other
restrictive government actions. Management believes that the risks of
nationalization or expropriation are negligible. Moody's business is
not solely dependent on non-U.S. office operations as these offices are
supported by the intensive travel schedule of an internationally focused
staff.
As one of the two largest ratings agencies in the U.S., Moody's
provides opinions on debt instruments and other obligations of both U.S.
and non-U.S. issuers. Internationally, a large number of national and
international ratings agencies have been created over the last several
years as the value of the ratings process has become better understood
and utilized abroad. However, Moody's believes that its long-standing
reputation for high quality and its pre-eminent position in the
marketplace leaves it well positioned to take advantage of the growth in
ratable debt. Moody's publishing business is a viable competitor in the
large and highly segmented print market for financial information.
Moody's intends to maintain this well-established franchise in the print
market through enhancements of its databases and by further expansion
into the electronic market for financial information as a data provider.
Moody's is registered as an investment adviser under the Investment
Advisers Act of 1940 and the laws of a number of states.
Interactive Data Corporation
Interactive Data Corporation's (Interactive) principal business is
to provide securities information, including latest pricing and
descriptive data, corporate actions and announcements for all types of
securities, domestic and international. This information is delivered
soon after close-of-market for securities accounting applications,
including mutual fund and unit investment trust pricing. Interactive
also provides investment analysis software and related computer services
to financial organizations.
Databases offered by Interactive include price, volume and other
data on corporate equities and options, corporate bonds, U.S. Government
and agency securities, municipal bonds and other securities, as well as
company financial information such as revenues, earnings and assets.
Financial data are available on more than 16,000 U.S. and non-U.S.
companies, while securities data are available on more than 65,000 North
American equity securities, as well as numerous North American
government and municipal securities, and over 90,000 securities traded
outside North America. Data are updated daily, monthly, quarterly or
annually as new information becomes available. A wide range of database
management and applications software is also offered to retrieve,
manipulate, screen, download and analyze Interactive's and the
customer's data.
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Delivery mechanisms available to suit individual customer's needs
include direct mainframe-to-mainframe transmission, on-line
telecommunication to a microcomputer or terminal and computer tape
delivered to the customer by courier or mail. Services are distributed
directly to end-user customers and by direct sales distributors of
value-added applications and other data delivery companies.
Interactive's services mainly target the banking, brokerage,
insurance, mutual fund and money manager customer segments. End users
include operations managers, money managers, portfolio managers,
research analysts and pension fund sponsors.
Interactive receives the data from public sources, under license
agreements from other organizations which collect data and creates its
own evaluations for delivery to customers. Although certain licenses
are important to the business, Interactive believes that it could
continue to conduct the business without these licenses, although at a
greater expense.
Interactive has three or four major competitors in each of its
business lines. The principal areas of competition are in quality of
service, primarily accuracy, quality of data, coverage, and price, and
in the case of software, functionality.
SOFTWARE SERVICES
Dun & Bradstreet Software Services, Inc.
Dun & Bradstreet Software Services, Inc. (D&B Software) is a
worldwide leader in the marketplace for client/server and mainframe
software for financial, human-resource, distribution and manufacturing
applications and decision support.
D&B Software products are installed throughout the world on a wide
range of computer hardware platforms, including Data General, Digital
Equipment Corporation, Fujitsu, Hewlett-Packard, IBM, ICL and SUN. The
software is used to manage financial, human-resource, manufacturing,
materials management activities and decision support capabilities. D&B
Software's products consist of an extensive line of applications
software packages for general businesses as well as related
implementation and education services. In addition, D&B Software
provides application tools which enable users to develop their own
applications, link mainframe and microcomputers and perform
sophisticated report writing.
Revenues are derived primarily from sales of perpetual non-exclusive
licenses to use D&B Software's products, annual maintenance fees for
such products, and consulting services related to implementation of
license products. Most of the license and services revenue is generated
by a direct sales force. Maintenance fees and professional services
currently comprise approximately 56% and 25% of D&B Software's revenues,
respectively. Approximately 27% of total revenue is generated from
operations outside of the U.S. In general, customers continue to
demonstrate commitment to D&B Software's products by maintaining high
levels of maintenance renewals.
During 1993, D&B Software continued to enhance its three new product
lines. First, Decision Support System (DSS) tools operating within D&B
Software's SmartStream client/server environment were upgraded to
deliver financial reporting capability and to support additional system
environments. These enhanced products are designed to leverage
investments in existing information systems by applying emerging
technologies to gain better and faster access to information. Second,
client/server financial applications -- Financial Stream -- were made
available in the fourth quarter. The financial applications combine
client/server computing and activity management capabilities to enable
customers to improve productivity by re-engineering how they conduct
business. Finally, in the fourth quarter of 1993, D&B Software
announced enhancements of its UNIX financial applications, which were
derived from existing products.
D&B Software initiated a number of actions during 1993 in order to
focus its capabilities on better serving its customers. Among these
actions was the establishment of a worldwide customer support operation
to significantly increase service levels. This, along with other
actions, will yield productivity improvements resulting from the
consolidation and transfer of certain activities from Europe and Asia
Pacific to the U.S.
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D&B Software has strategic alliances with MicroSoft, Powersoft,
Sybase and Cognos and incorporates software developed by alliance
partners in its client/server DSS and application offerings. D&B
Software also has strategic alliances with hardware vendors such as Data
General, Hewlett-Packard, IBM, ICL, SUN and Digital Equipment
Corporation. D&B Software incurs significant costs in enhancing its
existing product line as well as developing new client/server
applications. As the company continues to invest in and build
technologically emerging client/server solutions, D&B Software will face
new risks including the ability to build new client/server products and
related after-market products, migrate customers to new applications and
manage changes in capabilities required to install and support new
products and manage strategic alliance relationships. Many customers
are indicating that they intend to migrate from their existing mainframe
applications to client/server solutions. However, the timing of this
transition and the related impact on revenue is somewhat uncertain,
influenced, in part, by the economy.
D&B Software's non-U.S. operations are subject to the usual risks
inherent in carrying on business in certain countries outside of the
U.S., including currency fluctuations, possible nationalization,
expropriation, price controls or other restrictive government actions.
Management believes that the risk of nationalization or expropriation is
reduced because its products are software and services, rather than the
production of products which require manufacturing facilities or the use
of natural resources.
D&B Software faces numerous existing as well as potential
competitors. Most competitors operate as niche players in particular
segments of the marketplace. As in the past, D&B Software anticipates
that the field of competitors will change dramatically, resulting from
technological changes and shifts in customer needs. The management of
D&B Software believes the quality of software and related customer
support are the determining competitive factors in this industry.
Sales Technologies, Inc.
Sales Technologies, Inc. (ST), a leader in the field of sales
automation solutions, develops, installs and supports networked systems
that enable organizations to improve sales-force effectiveness,
productivity, communication and customer satisfaction.
ST's products focus on managing sales-force opportunities. Designed
to improve communication between corporate and field offices, ST
products allow multiple personnel access to customer and prospect
information--fully supporting the team-selling environment. Through a
key feature called 'transactions,' synchronized net changes are
communicated between corporate and field databases to ensure each
individual is working with up-to-date information. As a market leader,
ST provides customers with a unique combination of expertise in vertical
industries, training, consulting, selling methodologies, implementation
and roll-out. ST's services staff can also integrate many customers'
existing applications.
ST offers its customers competitive advantage in many areas, due to
ST's organizational size, strength, alliances with key data providers
and number of years in the sales automation business. In particular,
the linkages with other Dun & Bradstreet databases are of increasing
value to customers. ST also provides superior implementation, system
integration, management consulting, user training, help desk, hardware
repair and replacement, database design and facilities management
services, resulting in turnkey solutions.
Although there are hundreds of other sales automation niche vendors,
ST believes its strength lies in working with its customers to provide
a total, integrated solution to actual business problems in the
pharmaceutical, consumer packaged foods, high-technology manufacturing
and financial services industries, as well as other business-to-business
markets.
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Erisco, Inc.
Erisco, Inc. (Erisco) develops and markets proprietary software
applications and services used primarily in the administration of health
care benefits. Its primary markets include managed-care organizations,
insurance carriers, third party administrators and self-administered
corporations. Erisco has successfully completed the first phase of its
new Facets product, which has a targeted market of advanced managed-care
organizations requiring client/server technology. Erisco faces
competition from a variety of software vendors in both traditional
indemnity, as well as the new managed-care markets. The current climate
of health-care reform represents both an opportunity and some
uncertainty, as the new complexion of health-care reform unfolds.
DIRECTORY INFORMATION SERVICES
The Reuben H. Donnelley Corporation
The Reuben H. Donnelley Corporation (RHD) compiles, publishes or
serves as sales and marketing representative of Yellow Pages and other
directories for 18 telephone company clients throughout the U.S. RHD
provides these services for more than 400 directories in 17 states and
the District of Columbia, and is one of the largest marketers of yellow
pages in the U.S. RHD serves the Yellow Pages marketing needs of
600,000 business and service organizations who purchase Yellow Pages
advertising space in the U.S.
Products include consumer and business-to-business Yellow Pages,
neighborhood directories and street address directories. RHD Yellow
Pages product and marketing enhancements include Talking Yellow Pages,
Touch Four audiotex, expanded Community Action Pages, and Restaurant
Menu Advertising Units.
RHD acts in different capacities, depending upon specific contracts
and markets. These capacities include sales agent, partner, proprietary
publisher and publisher and/or compiler.
Proprietary Operations publishes proprietary Yellow Pages
directories in Delaware, Maryland, New Jersey, Pennsylvania, Virginia,
the District of Columbia and California. The unit also participates in
the management of directory activity of RHD's C-Don partnership with
Commonwealth Cellular Telephone Services, Inc. to serve customers in
northeastern Pennsylvania, and the directory activity of three joint
venture agreements between RHD and North Pittsburgh Telephone Company,
Conestoga Telephone and Telegraph, and Denver and Ephrata Telephone and
Telegraph Company in Pennsylvania.
NYNEX Operations manages the Directory Services Agreement with NYNEX
Information Resources Company for customers in New York.
Cincinnati Operations manages the Directory Services Agreement with
Cincinnati Bell for customers in Ohio and northern Kentucky.
Sprint Operations manages the CenDon partnership agreement and
contracts with several of Sprint's operating subsidiaries to publish,
manufacture and distribute classified telephone directories in Florida,
Illinois, Nevada, North Carolina and Virginia. In addition, Sprint
Operations manages the UniDon partnership agreement to serve customers
and advertisers in central Florida markets.
DonTech, a partnership between RHD and Ameritech is responsible for
publishing directories throughout Illinois and northwestern Indiana.
DonTech also sells and distributes "Money Savers" direct mail
advertising coupons, publishes Street Address Directories in Illinois,
Michigan and Indiana, and publishes and markets map books in Illinois.
DonTech operates a fulfillment center which markets directories
primarily throughout Illinois, Indiana, Michigan and Ohio.
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Thomson Directories, a partnership between Donnelley Directory, Ltd.
and T.I.S. (Directories) Limited (The Thomson Corporation), is the
largest independent publisher of Yellow Pages directories in the United
Kingdom. In 1993, the unit published 141 directories.
The units of RHD face increasing competition from other Yellow Pages
publishers and other media, including newspapers, radio, direct mail and
broadcast and cable television.
OTHER BUSINESS SERVICES
Dun & Bradstreet Plan Services, Inc.
Dun & Bradstreet Plan Services, Inc., through its Plan Services,
Inc. (PSI) unit, markets and administers health, dental, life, and
disability insurance for individuals and small to medium-sized
businesses throughout the U.S. PSI promotes the sale of various
insurance plans through seminars, telemarketing, direct mail and
personal contact with insurance agents around the country. As a third
party administrator, PSI performs a variety of functions on behalf of
insurance carriers that bear the insurance risk for the individual and
small group products, and for companies that choose to self-insure their
insurance programs. PSI's sales and marketing activities include
assisting in product design, suggesting pricing strategies, identifying
market opportunities, promoting the product, and providing sales
assistance to agents that distribute the products. The administrative
functions performed by PSI include underwriting and enrolling new cases,
paying claims, billing and collecting premiums, and providing customer
service. In addition, PSI helps manage claims costs through cost
containment activities, including utilization review and medical case
management.
The market for PSI's products and services is employees of small to
medium-sized businesses and individuals that do not receive health
insurance benefits through their employers. The market is fragmented
among many competitors, none of which has a significant share of the
market. Competition in the health insurance market is based largely on
price, but also depends on the level of product benefits, financial
strength of the carrier and the quality and timeliness of service
provided. In addition, the introduction of a government-mandated health
care program could have a favorable or unfavorable impact, depending
upon the terms of the program.
Dun & Bradstreet Plan Services, Inc. also includes Dun & Bradstreet
Pension Services, Inc., which provides pension administration and
benefit consulting for small to medium-sized businesses, and Erisco,
Inc., which is described in the Software Services section.
Gartner Group, Inc.
Gartner Group, Inc. (Gartner Group) is the leading independent
provider of subscription-based research and analysis of the computer
hardware and software, communications and related technology industries
(IT industry). Gartner Group's target customers are corporate and other
large users of information technologies. These client organizations
utilize Gartner Group's research and analysis for strategic planning of
long-term information technology needs and as a basis for systems
purchasing decisions. Gartner Group believes that its products can
provide significant benefits to clients through more effective long-term
planning, improved productivity, reduced costs and better terms from
vendors. These services are also used by vendors of IT systems and
products as a source of information on new markets, competitive
products, buying trends and evolving market needs.
Gartner Group's principal products are annually renewable
subscription services, called Continuous Services, which, on an ongoing
basis, highlight industry developments, review new products and
technologies and analyze industry trends within a particular technology
or market sector. There are currently 34 principal Continuous Services
products, each of which addresses a specific technology or market
sector. Each service is supported by a team of research staff members
with substantial experience in the covered segment or topic of the IT
industry. Revenues from Continuous Service products account for
approximately 86% of annual revenue.
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Gartner Group's other revenues are derived from consulting,
conferences, speaker engagement fees, publications and revenue pursuant
to a research sharing agreement. Consulting clients typically consist
of Continuous Services clients seeking focused advice on their
individual strategic needs with regards to information technology.
As of September 30, 1993, Gartner Group had over 11,000 client
interfaces, defined as an individual IT professional at a client who
receives directly from Gartner Group all printed materials relating to a
particular Continuous Service. At such date, Gartner Group had an
aggregate of approximately 3,700 client organizations, including 47 of
the top 50 1992 Fortune 500 industrial companies. No single client
organization accounted for more than 2% of revenues in fiscal 1993.
In the United States, Gartner Group's distribution network has added
to its direct sales force a network of independent sales
representatives. In 25 countries outside of the United States, the
market is addressed through a direct sales force, distributors and a
joint venture. Sales to customers outside the United States constituted
36% of revenues in 1993. Gartner Group's non-U.S. operations are
subject to the risks inherent in carrying on business in certain
countries outside the U.S., including currency fluctuations, possible
nationalization, expropriation, price controls or other restrictive
government actions. Management believes that the risk of
nationalization or expropriation is reduced because its products are
services, rather than production of products which require manufacturing
facilities or the use of natural resources.
Gartner Group's products and services are subject to direct and
indirect competition from other independent providers of similar
services, as well as, internal marketing and planning organizations of
its customers and other information providers, including electronic and
print media companies and consulting firms, many of whom have
substantially greater financial, information gathering and marketing
resources than Gartner Group. In addition, although Gartner Group
believes that it has established a significant market presence, there
are few barriers to entry into the market and new competitors could
readily seek to compete against Gartner Group in one or more market
segments addressed by its Continuous Service products. Increased
competition, direct and indirect, could adversely affect Gartner
Group's operating results through pricing pressure and loss of market
share.
NCH Promotional Services
NCH Promotional Services (NCH) is a worldwide supplier of coupon
processing and promotional-information management. NCH provides a range
of promotional services including processing of coupons and coupon-
related administration, research and analytical services for
manufacturers and retailers both domestically and internationally.
Internationally, NCH also provides a promotion service for
manufacturer's coupon-and-cash-refund programs. NCH derives
approximately 60% of its revenues from U.S. operations.
Coupons are distributed throughout the U.S. in various forms of
print media, in and on packages and through direct mail. Retailers of
varying sizes are offered coupon processing services using laser
scanning technology, Smartscan, to consolidate and ship all of their
coupons, regardless of type or issuing manufacturer, to NCH where their
coupons will be validated, scanned, counted, sorted and reimbursed to
them in a single check. Various coupon activity reports are also
supplied. Convenience and economy are furnished to the retailer. In
turn, NCH consolidates shipments received from many retailers and bills
the manufacturers, which reduces the manufacturers' coupon redemption
cost and simplifies their coupon handling.
Validation of coupon claims, timely payment and redemption activity
report services are provided for manufacturers through NCH's Process
2000 System. A wide range of customized marketing reports are available
in various data formats, which allows for manufacturers to receive
financial and promotional information related to coupons processed in a
format suited to their individual requirements.
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NCH's foreign operations are subject to the usual risks inherent in
carrying on business in certain countries outside of the U.S., including
currency fluctuations, possible nationalization, expropriation, price
controls or other restrictive government actions. Management believes
that the risk of nationalization or expropriation is reduced by the fact
that its basic products are services and the delivery of information,
rather than the production of products which require manufacturing
facilities or the use of natural resources.
NCH is believed to be the world's largest coupon processor and
promotion-information supplier. Numerous rival coupon clearing houses,
billing services, manufacturer redemption agents and manufacturers who
handle their own redemption services provide competition. Competition
in the retailer service business largely focuses on price. The
manufacturer business competes on a combination of price and service,
namely timeliness, misredemption control and redemption analysis. NCH
provides the widest array of value added products in the industry for
the analysis of redemption information.
Dataquest Incorporated
Dataquest Incorporated (Dataquest) is a global market research and
consulting company serving the high-technology and heavy-machinery
sectors. The company is regionally organized into three business units:
North America, Europe and Asia. Its product lines fall into three
primary categories: technology information, machinery information and
conferences.
Dataquest's Technology Information Group provides worldwide market
coverage on the computer systems and peripherals, document management,
semiconductors, services, software and telecommunications sectors of the
information technology industry. Each of these six groups offers a wide
range of products and services, including annual-subscription services,
consulting and primary research, conferences, reports and newsletters.
Dataquest's Machinery Information Group is one of the most complete
information resources for a customer's management to gather working data
on construction, mining, logging and the material-handling equipment
industries.
Dataquest's Invitational Computer Conferences Group (ICC) produces
regional trade shows covering the areas of computer peripherals and
computer connectivity.
As a leader in high-technology market research, Dataquest faces
direct competition from a few large competitors as well as a number of
very small competitors and consultants. In addition, Dataquest faces
indirect competition from companies that perform their own in-house
market research.
D&B HealthCare Information
D&B HealthCare Information was formed in 1993 to address new market
opportunities in health-care information and decision-support services.
In July, D&B HealthCare Information acquired Health Research Network, a
provider of clinical information on the incidence and treatment of
HIV/AIDS.
D&B HealthCare was selected by the U.S. Centers for Disease Control
(CDC) to create HIV/AIDS research studies. The studies will create a
national database on AIDS-related conditions and trends in prevention
and treatment. In January 1994 D&B HealthCare acquired Lexecon Health
Service, Inc., the largest non-government supplier of patient outcome
studies to U.S. health-care providers.
D&B Enterprises, Inc.
D&B Enterprises, Inc. invests in emerging and established businesses
in the information industry as a limited partner in Information Partners
Capital Fund, a venture capital limited partnership.
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RESOURCE GROUP
DunsNet
DunsNet, the Company's private telecommunications network, delivers
approximately 90% of the on-line services provided by the Company's
divisions, among them DBIS North America, IMS International, Nielsen
Media Research, Nielsen Marketing Research, Moody's Investors Service,
D&B Software and DBIS Europe and Asia/Pacific/Latin America, to
customers worldwide. Network service is established in four geographic
areas: North America, South America, Europe and the Asia/Pacific
encompassing 27 countries and over 300 cities, providing the Company's
divisions with a shared, economical resource that facilitates expansion
of international on-line services.
DunsNet gives the Company direct control over the quality of the
transmission of data and reduces associated costs. DunsNet also
supports the Company's data-collection activities. Its DunsMail service
provides global delivery of business correspondence via electronic mail.
(Costs are included in all five business segments.)
DunsGate
DunsGate is the corporate resource organization that helps the
Company's divisions develop and maintain advanced electronic
distribution systems that give customers easier, faster and more
effective access to the Company's products. In 1993, DunsGate-operated
gateways, in the U.S., United Kingdom, Canada and Australia, supported
customer access to risk-management and marketing information products
through systems that utilize electronic voice response, facsimile and
personal computers. (Costs are included in Risk Management and Business
Marketing Information Services and Other Business Services.)
DunsCenter
DunsCenter is a corporate resource unit that provides MVS-based data
processing services, particularly for accounting, finance and human
resource applications, solely to internal divisions nationwide.
DunsCenter provides MVS-based Millennium financial software for General
Ledger, Accounts Payable, Accounts Receivable, Fixed Assets, Payroll and
Human Resources applications. DunsCenters' information systems staff
support all of the Millennium financial products applications currently
running on DunsCenter's Amdahl mainframe platform.
The names of the Company's products are trademarks or registered
trademarks of The Dun & Bradstreet Corporation or one of its
subsidiaries.
ITEM 2. PROPERTIES[DJV1]
The principal properties of the Company, by business segment, are
set forth below.
The executive offices of The Dun & Bradstreet Corporation are
located at 200 Nyala Farms, Westport, Connecticut, and 299 Park Avenue,
New York, New York, in leased facilities.
Property of the Company is geographically distributed to meet sales
and operating requirements worldwide. The properties of the Company are
generally considered to be both suitable and adequate to meet current
operating requirements and virtually all space is being utilized.
Marketing Information Services
Owned properties located within the U.S. include nine facilities.
Three properties are located in Omaha, Nebraska and one property each in
Dunedin, Florida; Fond du Lac, Wisconsin; Northbrook, Illinois; Totowa,
New Jersey; Plymouth Meeting and West Norriton, Pennsylvania.
Owned properties located outside the U.S. include twelve facilities:
two properties in Lisbon, Portugal; and one property each in Toronto,
Canada; Oxford, England; Lucerne, Switzerland; Espoo, Finland; Mexico
City, Mexico; Buenos Aires, Argentina; Crows Nest and Artarmon,
Australia; Innsbruck, Austria; and Pinner, England.
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The operations of this segment are also conducted from forty-eight
leased offices located throughout the U.S. and ninety-four non-U.S.
locations.
Risk Management and Business Marketing Information Services
Owned properties located within the U.S. include two office
buildings in Berkeley Heights, New Jersey and one each in Murray Hill
and Parsippany, New Jersey and New York, New York.
Owned properties located outside the U.S. are located in Curitiba,
Rio de Janeiro and Sao Paulo, Brazil; Buenos Aires, Argentina; Mexico
City, Mexico; Caracas and Maracaibo, Venezuela; High Wycombe, England;
and ten properties throughout Italy. The operations of this segment are
also conducted from 142 leased offices located throughout the U.S. and
110 non-U.S. office locations.
Software Services
Operations are conducted from thirty-eight leased offices located
throughout the U.S. and twenty-seven non-U.S. office locations.
Directory Information Services
Owned property located within the U.S. consists of an office
building in Terre Haute, Indiana. Operations are also conducted from
forty-five leased offices located throughout the U.S.
Other Business Services
Owned properties located within the U.S. include three facilities:
one each in San Jose, California; Clinton, Iowa; and El Paso, Texas.
Owned properties located outside the U.S. include six properties in
Mexico and one facility each in Saint John, N.B. , Canada and Corby,
England.
The operations of this segment are also conducted from thirty-one
leased offices located throughout the U.S. and thirty non-U.S. office
locations.
Resource Group
Owned property within the U.S. include one building in Wilton,
Connecticut. Operations are also conducted from fourteen leased office
locations throughout the U.S. and two non-U.S. office locations.
ITEM 3. LEGAL PROCEEDINGS
Reference is made to Note 12 of Notes to Consolidated Financial
Statements on Page 29 of the 1993 Annual Report, which is incorporated
herein by reference.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
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EXECUTIVE OFFICERS OF THE REGISTRANT*
Officers are elected by the Board of Directors to hold office until
their respective successors are chosen and qualified.
Listed below are the executive officers of the registrant at March
1, 1994 and brief summaries of their business experience during the past
five years.
Name Title Age
- ---- ----- ---
Charles W. Moritz Chairman** 57
Robert E. Weissman President and Chief Executive Officer** 53
Edwin A. Bescherer, Jr. Executive Vice President-Finance 60
and Chief Financial Officer
Serge Okun Executive Vice President 47
Volney Taylor Executive Vice President** 54
Michael F. Brewer Senior Vice President- 50
Communications & Government Affairs
David Fehr Senior Vice President 58
John J. Fitzpatrick Senior Vice President-Human Resources 54
William G. Jacobi Senior Vice President 50
Robert J Lievense Senior Vice President 48
Charles F. G. Raikes Senior Vice President 63
and General Counsel
Dennis G. Sisco Senior Vice President 47
Richard B. Williams Senior Vice President- 48
Corporate Strategy
Thomas W. Young Senior Vice President and Controller 55
* Set forth as a separate item pursuant to Items 401(b) and (e) of
Regulation S-K.
** Member of the Board of Directors.
Mr. Moritz was elected Chairman and Chief Executive Officer of
The Dun & Bradstreet Corporation (Dun & Bradstreet), effective January
1, 1985; he relinquished the title of Chief Executive Officer,
effective January 1, 1994.
Mr. Weissman was elected President and Chief Executive Officer of
Dun & Bradstreet, effective January 1, 1994; he had been elected
President and Chief Operating Officer, effective January 1, 1985.
Mr. Bescherer was elected Executive Vice President-Finance of Dun &
Bradstreet, effective June 17, 1987 and, in addition, Chief Financial
Officer, effective April 18, 1984.
Mr. Okun was elected Executive Vice President of Dun & Bradstreet,
effective July 21, 1993; he had been elected Corporate Senior Vice
President, effective July 17, 1991. He also serves as President and
Chief Executive Officer of A. C. Nielsen Company, to which offices he
was elected, effective July 26, 1993, and as President and Chief
Executive Officer of I.M.S. International, Inc., to which offices he
was elected, effective May 26, 1988.
Mr. Taylor was elected Executive Vice President of Dun &
Bradstreet, effective February 1, 1982. He also serves as Chairman of
Dun & Bradstreet Information Services, to which position he was
appointed, effective January 1, 1991, and as President of Dun &
Bradstreet, Inc. and President of Dun & Bradstreet International, Ltd.,
to which offices he was elected, effective January 1, 1991. He had
also served through February 4, 1990 as President of The Reuben H.
Donnelley Corporation, to which office he was elected, effective
January 1, 1988.
Mr. Brewer was elected Senior Vice President-Communications &
Government Affairs of Dun & Bradstreet, effective March 15, 1993; he
had been elected Vice President-Government Affairs, effective January
1, 1987.
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Mr. Fehr was elected Senior Vice President of Dun & Bradstreet,
effective January 1, 1985.
Mr. Fitzpatrick was elected Senior Vice President-Human Resources
of Dun & Bradstreet, effective July 21, 1993; he had been elected
Senior Vice President-Human Resources Administration, effective
September 1, 1987.
Mr. Jacobi was elected Senior Vice President of Dun & Bradstreet,
effective July 21, 1993. Prior thereto, he had served as President &
Chief Operating Officer of Nielsen Media Research (January 1, 1991) and
as Executive Vice President of Nielsen Media Research (March 1, 1989).
He had also served through February 28, 1989 as Senior Vice President-
Planning & Acquisitions of Dun & Bradstreet, to which office he was
elected, effective June 17, 1987.
Mr. Lievense was elected Senior Vice President of Dun & Bradstreet,
effective July 21, 1993. He also serves as Chairman of The Reuben H.
Donnelley Corporation, to which office he was elected, effective July
26, 1993. Previously he had served through July 20, 1993 as Chairman
of Dataquest Incorporated (September 1, 1991) and as President of NCH
Promotional Services, Inc. (July 27, 1990). He had also served through
December 31, 1990 as President of Nielsen Clearing House Division of
A. C. Nielsen Company (June 25, 1989). Prior thereto, he had served as
Senior Vice President-Manufacturing & Engineering of the Mrs. Smith's
Frozen Foods Division of the Kellogg Company (August, 1987).
Mr. Raikes was elected Senior Vice President and General Counsel of
Dun & Bradstreet, effective January 21, 1976.
Mr. Sisco was elected Senior Vice President of Dun & Bradstreet,
effective July 21, 1993. He also serves as President of D&B
Enterprises, Inc., to which office he was elected, effective December
18, 1988, and as Chairman of Dataquest Incorporated, to which office he
was elected, effective July 26, 1993.
Mr. Williams was elected Senior Vice President-Corporate Strategy
of Dun & Bradstreet, effective October 1, 1990. Prior thereto, he had
served with Unisys Corporation as Vice President-Marketing, U.S.
(September 6, 1989) and as Vice President-Corporate Strategy (December
19, 1988).
Mr. Young was elected Senior Vice President and Controller of Dun &
Bradstreet, effective April 15, 1992; he had been elected Vice
President and Controller, effective November 20, 1985.
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
Information in response to this Item is set forth under Common Stock
Information in the "Financial Review" on Page 16 of the 1993 Annual
Report, which information is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
Selected financial data required by this Item is incorporated herein
by reference to the information relating to the years 1989 through 1993
set forth in the "Ten-Year Selected Financial Data" on Pages 34 and 35
of the 1993 Annual Report.
ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Information in response to this Item is set forth in the "Financial
Review" on Pages 13 to 16 of the 1993 Annual Report, which information
is incorporated herein by reference.
ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Index to Financial Statements and Schedules under Item 14 on
Page 19.
ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information in response to this Item is incorporated herein by
reference to the section entitled "Election of Directors" in the
Company's proxy statement dated March 11, 1994 filed with the Securities
and Exchange Commission, except that "Executive Officers of the
Registrant" on Pages 16 and 17 of this report responds to Item 401(b)
and (e) of Regulation S-K.
ITEM 11. EXECUTIVE COMPENSATION
Information in response to this Item is incorporated herein by
reference to the section entitled "Compensation of Executive Officers
and Directors" in the Company's proxy statement dated March 11, 1994
filed with the Securities and Exchange Commission.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Information in response to this Item is incorporated herein by
reference to the section entitled "Security Ownership of Management and
Others" in the Company's proxy statement dated March 11, 1994 filed with
the Securities and Exchange Commission.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information in response to this Item is incorporated herein by
reference to the section entitled "Security Ownership of Management and
Others" in the Company's proxy statement dated March 11, 1994 filed with
the Securities and Exchange Commission.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM
8-K
(a) List of documents filed as part of this report.
(1) Financial Statements
See Index to Financial Statements and Schedules on Page 21.
(2) Financial Statement Schedules.
See Index to Financial Statements and Schedules on Page 21.
(3) Other Financial Information.
Performance and Outlook, 1993.
Ten Year Selected Financial Data.
(4) Exhibits.
See Index to Exhibits on Pages 26 to 28, which indicates which
Exhibits are management contracts or compensatory plans
required to be filed as Exhibits. Only responsive information
appearing on Pages 6 to 12 and 24 to 45 to Exhibit D is
incorporated herein by reference, and no other information
appearing in Exhibit D is or shall be deemed to be filed as
part of this Form 10-K.
(b) Reports on Form 8-K.
None.
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SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
THE DUN & BRADSTREET CORPORATION
(Registrant)
By: CHARLES W. MORITZ
___________________________
(Charles W. Moritz,
Chairman of the Board)
By: ROBERT E. WEISSMAN
___________________________
(Robert E. Weissman,
President and Chief
Executive Officer)
By: EDWIN A. BESCHERER, JR.
___________________________
(Edwin A. Bescherer,Jr.
Executive Vice President-Finance
and Chief Financial Officer)
By: THOMAS W. YOUNG
___________________________
(Thomas W. Young,
Senior Vice President
and Controller)
Date: March 25, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the date indicated.
HALL ADAMS, JR. JOHN R. MEYER
______________________________ ______________________________
(Hall Adams, Jr., Director) (John R. Meyer, Director)
CLIFFORD L. ALEXANDER, JR. CHARLES W. MORITZ
______________________________ ______________________________
(Clifford L. Alexander, Jr., (Charles W. Moritz, Director)
Director)
KINGMAN DOUGLASS JAMES R. PETERSON
______________________________ ______________________________
(Kingman Douglass, Director) (James R. Peterson, Director)
MARY JOHNSTON EVANS MICHAEL R. QUINLAN
______________________________ ______________________________
(Mary Johnston Evans, Director) (Michael R. Quinlan, Director)
ROBERT A. HANSON VOLNEY TAYLOR
______________________________ ______________________________
(Robert A. Hanson, Director) (Volney Taylor, Director)
ROBERT J. LANIGAN ROBERT E.WEISSMAN
______________________________ ______________________________
(Robert J. Lanigan, Director) (Robert E. Weissman, Director)
VERNON R. LOUCKS, JR.
______________________________
(Vernon R. Loucks, Jr., Director)
Dated: March 25, 1994
-20-
<PAGE>
<TABLE>
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
FINANCIAL STATEMENTS:
The Company's consolidated financial statements, the notes thereto and
the related report thereon of Coopers & Lybrand, independent public
accountants, for the years ended December 31, 1993, 1992 and 1991,
appearing on Pages 17 to 35 of the accompanying 1993 Annual Report, are
incorporated by reference into this Annual Report on Form 10-K (see
below). The additional financial data indicated below should be read in
conjunction with such consolidated financial statements.
<CAPTION>
Page
__________________________
10-K 1993 Annual
Report
_____________ _____________
<S> <C> <C>
Report of Independent Public Accountants F-19 17
Statement of Management Responsibility for Financial F-20 18
Statements
As of December 31, 1993 and 1992:
Consolidated Statement of Financial Position F-22 to F-23 19
For the years ended December 31, 1993, 1992 and 1991:
Consolidated Statement of Income F-21 18
Consolidated Statement of Cash Flows F-24 20
Consolidated Statement of Shareowners' Equity F-25 21
Notes to Consolidated Financial Statements F-26 to F-44 22-33
Quarterly Financial Data (Unaudited) for the years ended
December 31, 1993 and 1992 F-44 33
Management's Discussion and Analysis
of Financial Condition and Results of Operations F-12 to F-18 13-16
Other financial information:
Performance and Outlook, 1993 F-1 to F-11 5-12
Ten year selected financial data F-45 34-35
SCHEDULES:
Report of Independent Public Accountants 22 17
The Dun & Bradstreet Corporation and Subsidiaries:
VIII - Valuation and Qualifying Accounts for the years ended
December 31, 1993, 1992 and 1991.................... 23 -
IX - Short-term Borrowings for the years ended
December 31, 1993, 1992 and 1991.................... 24 -
X - Supplementary Income Statement Information for
years ended December 31, 1993, 1992 and............. 25 -
<FN>
Schedules other than those listed above are omitted as not required
or inapplicable or because the required information is given in the
financial statements, including the notes thereto.
-21-
</TABLE>
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareowners and the Board of Directors of
The Dun & Bradstreet Corporation:
Our report on the consolidated financial statements of The Dun &
Bradstreet Corporation as of December 31, 1993 and 1992, and for the
years ended December 31, 1993, 1992 and 1991, has been incorporated by
reference in this Form 10-K from page 17 of the 1993 Annual Report of
The Dun & Bradstreet Corporation. In connection with our audits of such
financial statements, we have also audited the related financial
statement schedules listed in the index on page 21 of this Form 10-K.
In our opinion, the financial statement schedules referred to above,
when considered in relation to the basic financial statements taken as a
whole, present fairly, in all material respects, the information
required to be included therein.
COOPERS & LYBRAND
Stamford, Connecticut
January 27, 1994
-22-
<PAGE>
<TABLE>
SCHEDULE VIII
THE DUN & BRADSTREET CORPORATION AND SUBSIDIARIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
for the years ended December 31, 1993, 1992, 1991
(In millions)
<CAPTION>
___________________________________________________________________________________________
COL. A COL. B COL.C COL. D COL. E
___________________________________________________________________________________________
<S> <C> <C> <C> <C>
Additions
Balance Charged to Balance
Beginning Costs and at End
Description of Period Expenses Deductions(a) of Period
___________ _________ ___________ _____________ _________
ALLOWANCE FOR DOUBTFUL ACCOUNTS:
For the Year Ended December 31, 1993... $ 82.4 $ 42.2 $ 45.4 $ 79.2
======= ======= ======= =======
For the Year Ended December 31, 1992... $ 69.8 $ 64.5 $ 51.9 $ 82.4
======= ======= ======= =======
For the Year Ended December 31, 1991... $ 68.8 $ 48.2 $ 47.2 $ 69.8
======= ======= ======= =======
<FN>
NOTE:
(a) Represents primarily the charge-off of uncollectible accounts
for which a reserve was provided.
-23-
</TABLE>
<PAGE>
<TABLE>
SCHEDULE IX
THE DUN & BRADSTREET CORPORATION AND SUBSIDIARIES
SCHEDULE IX - SHORT-TERM BORROWINGS
for the years ended December 31, 1993, 1992, 1991
(Dollar amounts in millions)
<CAPTION>
__________________________________________________________________________________________________________
COL. A COL.B COL.C COL.D COL.E COL.F
__________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Maximum Average Weighted
Weighted Amount Amount Average
Balance Balance Outstanding Outstanding Interest
Category of Aggregate at End at End During the During the Rate During
Short-term Borrowings of Period of Period Period Period the Period
_____________________ _________ ___________ _____________ _________ ____________
Year Ended December 31, 1993:
Banks(C) $ 6.2 14.75% $ 27.1 $ 9.9 9.82%
Commercial Paper(D) $ 82.9 3.22% $ 123.3 $ 61.7 3.37%
Year Ended December 31, 1992:
Banks(C) $ 10.5 8.86% $ 42.7 $ 17.8 8.15%
Commercial Paper(D) $ 117.8 3.33% $ 241.5 $ 112.0 4.81%
Year Ended December 31, 1991:
Banks(C) $ 13.4 8.14% $ 113.4 $ 52.9 9.41%
Commercial Paper(D) $ 172.3 4.79% $ 229.0 $ 120.5 6.06%
__________________
<FN>
(A) The average amounts outstanding were calculated using daily
balances for commercial paper and monthly balances for notes
payable to banks.
(B) The weighted average interest rates were calculated by dividing the
interest expense for the year for such borrowings by the average
amounts outstanding during the period.
(C) Bank obligations consist principally of notes payable to banks in
Latin America and Europe.
(D) Represents commercial paper supported by short-term borrowing
agreements with several U.S. banks.
-24-
</TABLE>
<PAGE>
SCHEDULE X
THE DUN & BRADSTREET CORPORATION AND SUBSIDIARIES
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
for the years ended December 31, 1993, 1992, 1991
(In millions)
______________________________________________________________________
COL. A COL.B
______________________________________________________________________
Charged to Costs and
Expenses for the years ended
Item December 31,
_________ ________________________________
1993 1992 1991
_____ _____ _____
Maintenance & Repairs................. $69.7 $76.5 $77.1
===== ===== =====
All other items are omitted as such amounts are each less than one
percent of consolidated operating revenue or have been disclosed in the
consolidated financial statements.
-25-
STATEMENT OF DIFFERENCES
The section symbol shall be expressed as SS.
<PAGE>
<TABLE>
INDEX TO EXHIBITS
<CAPTION>
Regulation S-K Exhibit to
Exhibit Number this Report
______________ ____________
<S> <C>
(3) Articles of Incorporation and By-laws.
(a) Restated Certificate of Incorporation of The Dun &
Bradstreet Corporation dated June 15, 1988 (incorporated
herein by reference to Exhibit 4(a) to Registrant's
Registration No. 33-25774 on Form S-8 filed November 25, 1988).
(b)By-laws of Registrant dated December 15, 1993...................... Exhibit E**
(4) Instruments Defining the Rights of Security Holders, Including
Indentures.
Not Applicable.
(9) Voting Trust Agreement.
Not Applicable.
(10) Material Contracts. (All of the following documents,
except for items (v) and (w), are management
contracts or compensatory plans or arrangements required to be
filed pursuant to Item 14(c).)
(a) Retirement Plan for Directors of Registrant, as amended
December 19, 1990 (incorporated herein by reference to Exhibit E
to Registrant's Annual Report on Form 10-K for the year ended
December 31, 1990, file number 1-7155, filed March 27, 1991).
(b) Nonfunded Deferred Compensation Plan for Non-Employee Directors
of Registrant, as amended April 21, 1993....................... Exhibit F**
(c) Pension Benefit Equalization Plan adopted October 17, 1990
(incorporated herein by reference to Exhibit G to Registrant's
Annual Report on Form 10-K for the year ended December 31, 1990,
file number 1-7155, filed March 27, 1991).
(d) Profit Participation Benefit Equalization Plan adopted October
17, 1990 (incorporated herein by reference to Exhibit H to
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1990, file number 1-7155, filed March 27, 1991).
(e) 1982 Key Employees Stock Option Plan for Registrant and
Subsidiaries, as amended July 17, 1991 (incorporated herein
by reference to Exhibit E to Registrant's Annual Report on
Form 10-K for the year ended December 31, 1991, file number
1-7155, filed March 26, 1992)
(f) 1991 Key Employees Stock Option Plan for Registrant and
Subsidiaries, adopted April 16, 1991 (incorporated herein
by reference to Exhibit 28(a) to Registrant's Registration
No. 33-44551 on Form S-8, filed December 18, 1991).
(g) Ten-Year Incentive Stock Option Agreement (incorporated herein
by reference to Exhibit 28(b) to Registrant's Registration No.
33-44551 on Form S-8, filed December 18, 1991).
(h) Ten-Year Non-Qualified Stock Option Agreement (incorporated
herein by reference to Exhibit 28(c) to Registrant's
Registration No. 33-44551 on Form S-8, filed December 18, 1991).
(i) Stock Appreciation Rights Agreement relating to Incentive
Stock Options (incorporated herein by reference to Exhibit
28(d) to Registrant's Registration No. 33-44551 on Form S-8,
filed December 18, 1991).
(j) Stock Appreciation Rights Agreement relating to Non-Qualified
Stock Options (incorporated herein by reference to Exhibit
28(e) to Registrant's Registration No. 33-44551 on Form S-8,
filed December 18, 1991).
-26-
</TABLE>
<PAGE>
<TABLE>
Regulation S-K Exhibit to
Exhibit Number this Report
______________ ____________
<S> <C>
(k)Limited Stock Appreciation Rights Agreement relating to
Incentive Stock Options (incorporated herein by reference
to Exhibit 28(f) to Registrant's Registration No. 33-44551
on Form S-8, filed December 18, 1991).
(l)Limited Stock Appreciation Rights Agreement relating to
Non-Qualified Stock Options (incorporated herein by reference
to Exhibit 28(g) to Registrant's Registration No. 33-44551 on
Form S-8, filed December 18, 1991).
(m)1982 Key Employees Performance Unit Plan for Registrant and
Subsidiaries, as amended December 18, 1991 (incorporated
herein by reference to Exhibit F to Registrant's Annual Report
on Form 10-K for the year ended December 31, 1991, file number
1-7155, filed March 26, 1992).
(n)Corporate Management Incentive Plan, effective January 1, 1990
(incorporated herein by reference to Exhibit J to Registrant's
Annual Report on Form 10-K for the year ended December 31, 1989,
file number 1-7155, filed March 26, 1990).
(o)1989 Key Employees Restricted Stock Plan for Registrant and
Subsidiaries, as amended July 19, 1989 (incorporated herein by
reference to Exhibit K to Registrant's Annual Report on Form
10-K for the year ended December 31, 1989, file number 1-7155,
filed March 26, 1990).
(p)Restricted Stock Agreement (incorporated herein by reference to
Exhibit L to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1989, file number 1-7155, filed March
26, 1990).
(q)Performance-Based Restricted Stock Agreement................... Exhibit G**
(r)Form of Change-in-Control Severance Agreement, approved July
19, 1989 (incorporated herein by reference to Exhibit M to
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1989, file number 1-7155, filed March 26, 1990)
(s)Supplemental Executive Benefit Plan, as amended October
17, 1990 (incorporated herein by reference to Exhibit J
to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1990, file number 1-7155, filed
March 27, 1991)
(t)IMS International, Inc. Executive Pension Plan, dated
November 5, 1987 (incorporated herein by reference to
Exhibit E to Registrant's Annual Report on Form 10-K for
the year ended December 31, 1992, file number 1-7155, filed
March 25, 1993)
(u)IMS International, Inc. Long-Term Incentive Compensation
Plan, as amended April 19, 1991 (incorporated herein by
reference to Exhibit F to Registrant's Annual Report on Form
10-K for the year ended December 31, 1992, file number
1-7155, filed March 25, 1993).
(v)Agreement of Limited Partnership of D&B Investors L.P.,
dated as of October 14, 1993................................... Exhibit H**
(w)Purchase Agreement and Purchase Agreement Amendment dated
October 14, 1993.among D&B Investors L.P., and other parties... Exhibit I**
(11) Statement Re Computation of Per Share Earnings.
Computation of Earnings Per Share of Common Stock on a Fully
Diluted Basis.................................................. Exhibit A**
(12) Statement Re Computation of Ratios.
Not applicable.
(13) Annual Report to Security Holders.
1993 Annual Report............................................. Exhibit D**
(18) Letter Re Change in Accounting Principles.
Not applicable.
(19) Previously Unfiled Documents.
Not applicable
(21) Subsidiaries of the Registrant.
List of Active Subsidiaries as of January 31, 1994............. Exhibit B**
(22) Published Report Regarding Matters Submitted to a Vote
of Security Holders.
Not applicable
(23) Consents of Experts and Counsel.
Consent of Independent Certified Public Accountants............ Exhibit C**
-27-
</TABLE>
<PAGE>
<TABLE>
Regulation S-K Exhibit to
Exhibit Number this Report
______________ ____________
<S> <C>
(24) Power of Attorney.
Not applicable.
(28) Information from Reports Furnished to State Insurance Regulatory
Authorities.
Not applicable.
(99) Additional Exhibits.
Not applicable.
*Not included in this document
**Filed electronically
-28-
</TABLE>
{PAGE \# "'Page: '#'
'"|Page: 41
}[DJV1] ALL ENTRIES WHICH HAVE BEEN UPDATED ARE IN BOLD PRINT.
<TABLE>
EXHIBIT A
THE DUN & BRADSTREET CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE OF COMMON STOCK
ON A PRIMARY AND FULLY DILUTED BASIS
Dollar Amounts in Millions, Except Per Share Data 1993 1992 1991
__________________________________
(Average share data in thousands)
<CAPTION>
<S> <C> <C> <C>
Weighted average number of shares 177,181 178,346 178,556
Dilutive effect of shares issuable as of year-end
under stock option plans, stock appreciation
rights and restricted stock plan 1,789 1,563 1,669
Adjustment of shares applicable to stock options
and stock appreciation rights exercised
during the year 88 50 30
_____________________________
Weighted average number of shares on a
primary and fully diluted basis 179,058 179,959 180,255
______________________________
Income Before Cumulative Effect of Changes
in Accounting Principles $ 428.7 $ 553.5 $ 506.5
Cumulative Effect to January 1, 1993, of
Changes in Accounting Principles:
-SFAS No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions,
" Net of Income Tax Benefits of $93.7 (140.6) - -
-SFAS No. 112, "Employers' Accounting for
Postemployment Benefits,Net of
Income Tax Benefits of $150.0 (250.0) - -
_____________________________
Net Income $ 38.1 $ 553.5 $ 506.5
_____________________________
Earnings per share of common stock on
a primary and fully diluted basis:
Before Cumulative Effect of Changes in
Accounting Principles $ 2.39 $ 3.08 $ 2.81
Cumulative Effect to January 1, 1993,
of Changes in Accounting Principles:
-SFAS No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions" (.78) - -
-SFAS No. 112, "Employers' Accounting for
Postemployment Benefits" (1.39) - -
_____________________________
Net Income $ .22 $ 3.08 $ 2.81
_____________________________
</TABLE>
A-1
<TABLE>
EXHIBIT B
THE DUN & BRADSTREET CORPORATION
LIST OF ACTIVE SUBSIDIARIES AS OF JANUARY 31, 1994
<CAPTION>
State or Other % Ownership
Jurisdiction of 100% except
Name Incorporation as noted
___________________________________________________________________________
<S> <C> <C>
A. C. NIELSEN COMPANY Delaware
Addex, Inc. Delaware
Nieuw Willemstad Holdings, Inc. Delaware
Nielsen Holding Ges.mbH Austria
A. C. Nielsen Company Ges.mbH Austria
CMIS Coordinierte Management
InformationsSysteme, Ges.mbh Austria
Nielsen Marketing Research Kft. Hungary
A. C. Nielsen Company (Belgium) S.A. Belgium
The Dun & Bradstreet Corporation
& Co. SNC Belgium
Palmetto Assurance Ltd. Bermuda
A. C. Nielsen Chile Limitada Chile
A. C. Nielsen Chile S.A. Chile 51.0
A. C. Nielsen de Colombia S.A. Colombia 87.2
A. C. Nielsen (Argentina) S.A. Delaware
Teollisuuden Tielopalvelu Industrial
Intelligence Ltd. Oy Finland
A.C. Nielsen Finland Oy Finland
Finnpanel Oy Finland 50.0
Kulutustutkimus Oy:
Marketing Radar Ltd. Finland 50.0
Soliditet OY Finland
Dun & Bradstreet Canada Holding, Ltd. Ontario, Canada
The D&B Companies of Canada Ltd. Ontario, Canada
Dun & Bradstreet Finance Inc. Ontario, Canada
Dun & Bradstreet Software
Services Canada L.P. Delaware
Nielsen Korea Limited Korea
Interactive Data Canada Inc. Ontario, Canada
NCH Promotional Services, Inc. Delaware
Nielsen Holdings, Inc. Delaware
Nielsen Leasing Corporation Delaware
A. C. Nielsen S.A. France
Dun & Bradstreet-France S.A. France
Dun & Bradstreet Software
Services (France) S.A. France
Moody's France S.A. France
Nielsen A.E.M. Snc France
Panel de Gestion SARL France 61.0
A. C. Nielsen Hellas Ltd. Greece
A. C. Nielsen of Ireland Limited Ireland
D & B Group Limited Ireland
D&B Marketing Information Services
Italia S.p.A Italy
C.R.A. S.r.l. Italy 60.0
C.R.A. Sistemi S.r.l. Italy
SITA, Societa per gli Indici
Tessile e Abbigliamento-S.r.l. Italy 60.0
</TABLE>
B-1
<PAGE>
<TABLE>
EXHIBIT B - (Continued)
<CAPTION>
State or Other % Ownership
Jurisdiction of 100% except
Name Incorporation as noted
______________________________________________________________________________
<S> <C> <C>
A. C. NIELSEN COMPANY (Continued)
Nielsen Japan K.K. Japan
A. C. Nielsen Company de
Mexico, S.A. de C.V. Mexico
Inmobiliaria Zeta, S.A. de C.V. Mexico
A. C. Nielsen (N.Z.) Limited New Zealand
Nielsen Norge A/S Norway 65.0
Soliditet AS Norway
Dun & Bradstreet Holdings Spain B.V. The Netherlands
Dun & Bradstreet S.A Spain
A. C. Nielsen Company S.A. Spain
Nedro-Nielsen/ESEO-Estudios
de Mercado Lda. Portugal 81.0
A. C. Nielsen P.R. Inc. Puerto Rico
A. C. Nielsen Singapore Pte. Ltd. Singapore
A. C. Nielsen Management Services S.A. Switzerland
A. C. Nielsen S.A. Switzerland
SEN Superstudies AG Switzerland 50.0
Nielsen Medya Arastirma
Hizmetleri Limited Sirketi Turkey
Dataquest Incorporated California
Dataquest Europe S.A. France
DATAQUEST Japan Limited Japan
AMERICAN CREDIT INDEMNITY COMPANY New York 95.0
CORINTHIAN HOLDINGS, INC. Delaware
D&B CORPORATION JAPAN K.K. Japan
D & B ENTERPRISES, INC. Delaware
D&B (R.I.C.) LTD. Delaware
Dun & Bradstreet East-Vent Ltd. Delaware
Dun & Bradstreet C.I.S. Russia
Dun & Bradstreet India Private Limited India
Dun & Bradstreet Satyam Software Limited India
D&B TRANSPORTATION SERVICES COMPANY, INC. Delaware
DNB-PA HOLDINGS CORPORATION Nevada
DUN & BRADSTREET COMPUTER LEASING, INC. Delaware
Fillupar Leasing Partnership Delaware 98.0
DUN & BRADSTREET DIVESTITURE, INC. Delaware
</TABLE>
B-2
<PAGE>
<TABLE>
EXHIBIT B - (Continued)
<CAPTION>
State or Other % Ownership
Jurisdiction of 100% except
Name Incorporation as noted
___________________________________________________________________________
<S> <C> <C>
DUN & BRADSTREET HEALTHCARE INFORMATION, INC. Delaware
Lexecon Health Service Inc. Illinois
DUN & BRADSTREET, INC. Delaware
Dun & Bradstreet Life Insurance Company Arizona
Duns Holding, Inc. Delaware
D&B Acquisition Corp. Delaware
Duns Licensing Associates, L.P. Delaware 82.5
Corinthian Leasing Corporation Delaware
Mergex, Inc. Delaware
DUN & BRADSTREET INTERNATIONAL, LTD. Delaware
Arrebnac Pty. Ltd. Australia
Dun & Bradstreet Pension
Plan Pty. Ltd. Australia
A. C. Nielsen (Holdings)
Pty. Limited Australia
A. C. Nielsen (Trading) Pty.
Limited Australia
A. C. Nielsen (Operations)
Pty. Limited Australia
A. C. Nielsen Australia
Pty. Limited Australia
College Mercantile Pty. Ltd. Australia
Dun & Bradstreet (Australia)
Pty. Limited Australia
Dun & Bradstreet (Nominees)
Pty. Ltd. Australia
Dun & Bradstreet Unit Trust Australia
Dun & Bradstreet Software
Services Australia
Pty. Limited Australia
Moody's Investors Service
Pty. Limited Australia
Nandette Pty. Limited Australia
Australian Independent
Media Data Pty. Ltd. Australia 50.0
Dun & Bradstreet S.A. Argentina
Dun & Bradstreet Holding (Belgium) S.A. Belgium
N.V. Dun & Bradstreet-Eurinform S.A. Belgium
Dun & Bradstreet do Brasil Ltda. Brazil
Dun & Bradstreet Ltda. Chile
Dun & Bradstreet Holdings-France, Inc. Delaware
Kosmos Business Information Limited England
D & B Group, Ltd. Delaware
A. C. Nielsen (Holdings) Limited England
A. C. Nielsen Company Limited England
Dun & Bradstreet Software
Services Limited England
Dun & Bradstreet Software Services
Medium Systems Limited England
Advance-Peterholm Group Ltd. England
D & B Telephone Company Ltd. England
</TABLE>
B-3
<PAGE>
<TABLE>
EXHIBIT B - (Continued)
<CAPTION>
State or Other % Ownership
Jurisdiction of 100% except
Name Incorporation as noted
___________________________________________________________________________
<S> <C> <C>
DUN & BRADSTREET INTERNATIONAL, LTD. (Continued)
D&B Group, Ltd. (Continued)
D & B Europe Limited England
Dun & Bradstreet Limited England
Dataquest Europe Limited England
Dun & Bradstreet
Finance Ltd. England
Dun & Bradstreet Limited Ireland
Dun & Bradstreet Pension
Trustees Limited England
Donnelley Directory, Ltd. Delaware
Thomson Directories [Partnership] England 50.0
Dun & Bradstreet (U.K.) Ltd. England
DunsGate Limited England
Interactive Data Ltd. England
IMS Holdings (U.K.) Limited England
Intercontinental Medical
Statistics Ltd. England
Imsworld Publications Ltd. England
PMS International Limited England
The Medical Direct Mail
Organisation Ltd. England
Medical Market Studies Limited England
Moody's Investors Service Limited England
ST Europe plc England
DunsNet Limited England
S.T. S.A.R.L. France
Dun & Bradstreet Credit Control, Ltd. Delaware
Dun & Bradstreet (HK) Limited Hong Kong
Dun & Bradstreet (Israel) Ltd. Israel
Dunbrad, Inc. Delaware
Dun & Bradstreet Credit
Reporting (Israel) Israel
Wiri Beleggingen B.V. The Netherlands
Dun & Bradstreet Kosmos S.p.A. Italy
Argus Situazioni Aziendali S.r.l. Italy
Dun & Bradstreet Business Information
Services (Japan) K.K. Japan
D&B Information Services (M) Sdn. Bhd. Malaysia
Dun & Bradstreet S.A. de C.V. Mexico
Dun & Bradstreet Nederland Holding B.V. The Netherlands
A. C. Nielsen (Nederland) B.V. The Netherlands
Nederlands Centrum voor Marketing
Analyses B.V. The Netherlands 70.0
Nielsen Marketing Research, spol s r.o. Czech Republic
Dun & Bradstreet Danmark Holding A/S Denmark
AIM Research A/S Denmark
AIM Farmstat ApS Denmark 66.67
D & B International A/S Denmark
A/S H. Hyldahl Denmark
Dahl Jensen Kuvertering ApS Denmark
</TABLE>
B-4
<PAGE>
<TABLE>
EXHIBIT B - (Continued)
<CAPTION>
State or Other % Ownership
Jurisdiction of 100% except
Name Incorporation as noted
___________________________________________________________________________
<S> <C> <C>
DUN & BRADSTREET INTERNATIONAL, LTD. (Continued)
Dun & Bradstreet Nederland Holding B.V. (Continued)
Dun & Bradstreet (C & EE) Holding B.V. The Netherlands
Dun & Bradstreet Hungaria
Informacio Szolgaltato Korlatolt Hungary 51.0
Felelosegu Tarsasag [d/b/a
Dun & Bradstreet Hungaria Kft.]
Dun & Bradstreet spol s r.o. Czech Republic
Dun & Bradstreet Software Services
(Nederland) B.V. The Netherlands
Dun & Bradstreet B.V. The Netherlands
IMS Services Nederland B.V. The Netherlands
Nielsen Marketing Research SP.z.o.o. Poland
Soliditet Norden AB Sweden
A. C. Nielsen Company A.B. Sweden
Soliditet AB Sweden
Dun & Bradstreet (New Zealand) Limited New Zealand
Dun & Bradstreet S.A. Peru
Dun & Bradstreet Poland sp. z o.o. Poland
Dun & Bradstreet Portugal, Lda. Portugal
Dun & Bradstreet (Singapore) Pte. Ltd. Singapore
Dun & Bradstreet A.G. Switzerland
Bichet Auskunfte A.G. Switzerland
Ifico-Burgel A.G. Switzerland
Novinform AG Switzerland
Renseignements Fell SA Switzerland 70.0
Dun & Bradstreet C.A. Venezuela
Dun & Bradstreet Zimbabwe (Private) Limited Zimbabwe
DUN & BRADSTREET INVESTMENTS CANADA INC. Ontario, Canada
DUN & BRADSTREET LEASING INC. Canada
DUN & BRADSTREET PLAN SERVICES, INC. Delaware
Dun & Bradstreet Pension Services, Inc. Delaware
Erisco, Inc. New York
Plan Services, Inc. Florida
Guy, Murray & Smith, Inc. Delaware
DUN & BRADSTREET SOFTWARE HOLDINGS, INC. Delaware
DBC Holding Corp. Delaware
Dun & Bradstreet Software Services, Inc. Georgia
DBS-Dun & Bradstreet Software
Services do Brasil Ltda. Brazil
D&BS Services (M) Sdn. Bhd. Malaysia
Dun & Bradstreet Software
Services Hong Kong Limited Hong Kong
Dun & Bradstreet Software
Services New Zealand Limited New Zealand
Dun & Bradstreet Software
Services (S) PTE Ltd. Singapore
</TABLE>
B-5
<PAGE>
<TABLE>
EXHIBIT B - (Continued)
<CAPTION>
State or Other % Ownership
Jurisdiction of 100% except
Name Incorporation as noted
___________________________________________________________________________
<S> <C> <C>
DUN & BRADSTREET SOFTWARE HOLDINGS, INC. (Continued)
DBC Holding Corp. (Continued)
Dun & Bradstreet Software Services Inc. (Continued)
Dun & Bradstreet Software
Services International, Inc. Georgia
Dun & Bradstreet Software
Services Deutschland Germany
Beteiligungs GmbH & Co.
Dun & Bradstreet
Software Services Germany
Deutschland OHG
Dun & Bradstreet Software
Services (Canada) No. 2 Limited Ontario,Canada
Dun & Bradstreet Software
Services Holdings S.A. France
Dun & Bradstreet Software
Services Australia Australia
Holdings Pty. Ltd.
K.K. Dun & Bradstreet Software Japan
DUN-DONNELLEY PUBLISHING CORPORATION Delaware
DUNSNET S.A.R.L. France
550 COCHITUATE ROAD INVESTMENT CORPORATION Delaware
GARTNER GROUP, INC. Delaware 52.0
Gartner Group Asia, Inc. Delaware
Gartner Group Europe, Inc. Delaware
Gartner Group Sales, Inc. Delaware
GG Hong Kong, Inc. Delaware
New Science Associates Inc. Delaware
Real Decisions, Inc. Connecticut
Gartner Group FSC, Inc. Virgin Islands
Gartner Group Scandinavia, A/S Denmark
Gartner Group UK Ltd. England
GG France S.A.R.L. France
Gartner Group, GMBH Germany
Gartner Group Italia S.R.L. Italy
Gartner Group Benelux The Netherlands
Gartner Group Norge, A/S Norway
Gartner Group Sverige, AB Sweden
I.M.S. INTERNATIONAL, INC. Delaware
I.M.S. Financial, Inc. Delaware
IMS Pharminform Holding AG Switzerland
Informations Medicales Et
Statistiques S.A. Belgium
Informations Medicales &
Statistiques S.A.R.L. Morocco
Information Medical
Statistics Norge A/S Norway
IMS AG Switzerland
IMS Medinform A.S. Czech Republic
</TABLE>
B-6
<PAGE>
<TABLE>
EXHIBIT B - (Continued)
<CAPTION>
State or Other % Ownership
Jurisdiction of 100% except
Name Incorporation as noted
___________________________________________________________________________
<S> <C> <C>
I.M.S. INTERNATIONAL, INC. (Continued)
I.M.S. Financial, Inc. (Continued)
IMS Pharminform Holding A.G. (Continued)
IMS Information Medical
Statistics AG Switzerland
IMS Poland Limited Poland
IMS Medinform Hungaria Ltd. Hungary
IMSMARQ AG Switzerland
IMS Servicos Ltda. Brazil
IMS Tunisia Tunisia
Interdata S.A. de C.V. Mexico
RCI Research Consultants AG Switzerland
Marketing Y Datos Limitada
[k/a Markdata Ltda.] Chile
Interstatistik AG Switzerland
I M S Ges.m.b.H. Austria
Datec Industria e Comercio,
Distribuidora Grafica Brazil
e Mala Direta Ltda.
Interdata Dominicana, S.A. Dominican Republic
Intercomunicaciones Y Servicio
de Datos S.A. Colombia
[k/a Interdata S.A.]
Pharma Data Paraguaya S.R.L. Paraguay
Pharma Data Uruguaya S.A. Uruguay
Data Coordination AG Switzerland
PMA Sociedad Anonima Argentina
Datandina S.A. Peru Peru
Institute for Medical Statistics Oy Finland
I.M.S. (Nederland) B.V. The Netherlands
Datandina Ecuador S.A. Ecuador
Asserta Centroamerica Medicion
de Mercados, S.A. Guatemala
PMV De Venezuela, C.A. Venezuela
Pharmadat Marktforschungs-
Gesellschaft m.b.H. Austria
Pharmacall Statistik Ges.
m.b.H. Austria
Medidat Marktforschungs-
Gesellschaft m.b.H. Austria 50.0
Intercontinental Marketing
Services Iberica, S.A. Spain
Pharmatest Medical Market
Studies, S.A. Spain
Mercados Y Analisis, S.A.
[k/a M.A.S.A.] Spain
IMS Turkiye Ltd. Turkey
IMS Software Services, Ltd. Delaware
Dun & Bradstreet Germany Holding, Ltd. Delaware
ACN Marketing Research Holding GmbH Germany
A. C. Nielsen GmbH Germany
A. C. Nielsen
Werbeforschung S&P GmbH Germany
Dataquest GmbH Germany
DunsNet Datenkommunikation GmbH Germany
ST Europe GmbH Germany
</TABLE>
B-7
<PAGE>
<TABLE>
EXHIBIT B - (Continued)
<CAPTION>
State or Other % Ownership
Jurisdiction of 100% except
Name Incorporation as noted
___________________________________________________________________________
<S> <C> <C>
I.M.S. INTERNATIONAL, INC. (Continued)
I.M.S. Financial, Inc. (Continued)
Dun & Bradstreet Germany Holding, Ltd. (Continued)
D & B Schimmelpfeng GmbH Germany
D&B Unterstutzungskasse GmbH Germany
IMS Holding Deutschland GmbH Germany
IFNS Marktforschung GmbH Germany
IMS GmbH Institut fur
medizinische Statistik Germany
I.M.S. Hellas Ltd. Greece
IMS Data GmbH Germany
INFO-MED Gesellschaft
fur Regional- Germany
marketing MBH
Midoc Medizinische Informations-
und Dokumentations- Germany
Gesellschaft m.b.H.
Schimmelpfeng Ges.mbH Austria
D&B-Schimmelpfeng
Ges.mbH Austria
IMS Japan Ltd. (KK) Japan
Pharmamedia AG Switzerland 51.0
I.M.S. Portugal-Consultores Internacionais
de Marketung Farmaceutico, Lda. Portugal
IMS (NZ) Limited New Zealand
IMS Investments (NZ) Limited New Zealand
Riddell Information Services Pty. Ltd. N.S.W., Australia
IMS Australia Pty. Ltd. N.S.W., Australia
Permail Pty. Limited N.S.W., Australia
IMS Pacific Limited Hong Kong
IMS HK Investments Ltd. Hong Kong
IMS of Canada, Ltd. Canada
Informations Medicales Et Statistiques SarL France
Intercontinental Medical Statistics
International, Ltd. New York
Market Research International, Ltd. Delaware
Nippon Computer Services, Inc. Japan
IMS Asia (1989) Pte. Ltd. Singapore
Clark-O'Neill, Inc. New Jersey
IMS America, Ltd. New Jersey
Coordinated Management Systems, Inc. Delaware
INTERACTIVE DATA CORPORATION Delaware
MOODY'S INVESTORS SERVICE, INC. Delaware
Moody's Canada Inc. Canada
Moody's Deutschland GmbH Germany
Moody's Hong Kong Limited Hong Kong
Moody's Japan Kabushiki Kaisha Japan
Moody's Investors Service Espana, S.A. Spain
</TABLE>
B-8
<PAGE>
<TABLE>
EXHIBIT B - (Continued)
<CAPTION>
State or Other % Ownership
Jurisdiction of 100% except
Name Incorporation as noted
___________________________________________________________________________
<S> <C> <C>
OAK INVESTMENTS LTD. Bermuda
SALES TECHNOLOGIES, INC. Georgia
THE REUBEN H. DONNELLEY CORPORATION Delaware
D&B Investors L.P. Delaware 99.0
Am-Don Partnership [d/b/a DonTech] Illinois 50.0
CenDon Partnership Illinois 50.0
Uni-Don Partnership Florida 50.0
January 31, 1994
</TABLE>
B-9
EXHIBIT C
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the registration
statements of The Dun & Bradstreet Corporation on Form S-3 (File No.
33-10462) and on Forms S-8 (File Nos. 2-53006, 33-21719, 33-25774,
33-27144, 33-44551, 33-49060 and 33-51005) of our reports dated
January 27, 1994, on our audits of the consolidated financial
statements and financial statement schedules of The Dun &
Bradstreet Corporation as of December 31, 1993 and 1992 and for
the years ended December 31, 1993, 1992 and 1991, which reports
are incorporated by reference or included in this Form 10-K.
COOPERS & LYBRAND
Stamford, Connecticut
March 25, 1994
C-1
EXHIBIT D
PERFORMANCE & OUTLOOK
Marketing Information Services
IMS International
IMS International is the world's leading provider of marketing, sales-
management and medical information and decision-support services for the
pharmaceutical industry. Customers use IMS' services to monitor and
evaluate performance, forecast industry developments, reduce operating
costs, make strategic business decisions and respond to demand for
health-care cost management. IMS provides services in more than 70
countries and generates about 65 percent of its revenue outside the U.S.
______________________________________________________________________
On the strength of Xponent, IMS America gained new business and won the
vast majority of competitive reviews for prescriber information
services.
_______________________________________________________________________
1993 Performance Revenue was $613.9 million, up 4.7 percent on a
reported basis, and up about 10 percent excluding the stronger dollar.
Operating income* growth was substantial, reflecting solid revenue
growth and productivity improvements.
Operating Highlights IMS America has enjoyed substantial success in
adding new subscribers since it introduced Xponent, a unique prescriber-
level information service, more than a year ahead of schedule. One of
the most powerful sources of pharmaceutical sales and marketing
information ever produced in the U.S., the Xponent service permits
customers to measure sales performance more accurately, evaluate
promotions and create customized micro-marketing programs. On the
strength of the new service, IMS won the vast majority of supplier
reviews by pharmaceutical manufacturers for sales-management and
targeting information services in 1993, including a significant number
of clients who had been using competitive services.
IMS also introduced PlanTrak, a managed-care information service, and
began the phased launch of Xponent PlanTrak, a combined sales-
management and micro-marketing service focused on information related to
health-care reform.
IMS International introduced IDRAC, a CD-ROM system that delivers
information and administrative services designed to help customers
increase efficiency during the European Community regulatory approval
process. IDRAC will be expanded in 1994 with national modules and
multimedia capabilities.
IMS released MediPlus in Germany, the U.K. and France, an enhanced
service that draws prescription and treatment data from physicians'
personal computers and includes a graphical user interface, multiple
language capabilities and faster response times. IMS' medical databases
do not identify individual patients to protect privacy.
IMS America's health-care division agreed with the Health Industry
Business Communications Council to develop a common category database
that will substantially reduce industry-wide administrative costs by
providing standard classifications for 240,000 medical and surgical
products.
_______________________________________________________________________
*Operating income comments throughout the Performance & Outlook section
are before restructuring income/expense net.
F-1
<PAGE>
1994 Outlook IMS anticipates strong double-digit underlying revenue
growth, driven in part by new products. Operating income will be up
somewhat less than revenue growth, however, because of new-product
investment spending. The long-term goal for IMS continues to be for
growth above the corporate average.
A.C. Nielsen
A.C. Nielsen is the world's leading provider of marketing, media and
television-audience research information and decision-support systems.
Nielsen Marketing Research
Nielsen Marketing Research provides consumer packaged goods
manufacturers and retailers with retail, promotion, media, household and
consumer information services and decision-support tools. Operating in
36 countries, the division generates about 70 percent of its revenue
outside the U.S.
1993 Performance Nielsen Marketing Research reported
worldwide revenue of $1.05 billion, down 6.4 percent on a reported basis
from a year ago, but up about 3 percent excluding the impact of a
stronger dollar and the divestiture of Donnelley Marketing Information
Services. Excluding these factors, Nielsen generated a modest increase
in operating income.
Operating Highlights Nielsen outsourced its U.S. mainframe computing and
systems software operations to Electronic Data Systems (EDS) in 1993, a
move that increased processing power and reduced by one-half the time
required to deliver information to customers. It allows the company to
focus its resources on rapid development of value-added services.
Nielsen Solution System, a total reengineering of how Nielsen North
America manages and delivers information to customers, will go into
production during 1994. The first large, open-architecture,
client/server information-management system in the marketing research
industry, Nielsen Solution System will allow customers to make fact-
based business decisions using current marketplace information. It will
deliver faster desktop access to complex marketing research information
and provide customers with new capabilities to integrate external and
internal data and create new databases responsive to changing
conditions.
With Efficient Consumer Response (ECR) emerging as a major opportunity
for manufacturers, distributors and retailers to reengineer distribution
and promotion practices and eliminate waste in the supply chain, Nielsen
became the first marketing research company to establish a unit devoted
to ECR and other retail-oriented services. Nielsen acquired interests in
NON-STOP Logistics, a provider of warehousing and distribution services,
and in Scanner Applications, a promotion measurement company, and formed
a Solutions Partners program that also includes NCH Promotional
Services, Strategic Mapping and EDS.
__________________________________________________________________
IMS International and A.C. Nielsen, the world's largest marketing
research businesses, formed closer links during 1993 to leverage their
global capabilities, their decision-support services, and their
complementary positions in over-the-counter (OTC) health-care
information services.
____________________________________________________________________
F-2
<PAGE>
Nielsen North America launched Opportunity Explorer and Promotion
Simulator expert-system software that analyzes historical actions that
affect product sales and simulates the impact of future promotion
strategies. These products run on Nielsen Workstation PC software, the
world's leading marketing and sales-management decision-support system,
which is being enhanced for 1994. Nielsen has installed this Windows-
based software on more than 10,000 personal computers at 2,000 customer
sites.
In the highly competitive U.S. market, Nielsen won new contracts in 1993
with Continental Baking and Eastman Kodak. It also retained contracts
with companies, including Coca-Cola Foods, Colgate-Palmolive, Pfizer,
Philip Morris, Bausch & Lomb and Pillsbury. In early 1994, Nielsen
gained a major contract with Bristol-Myers Squibb, winning back this
customer's business from Information Resources, Inc. (IRI). Nielsen
also reached a new agreement that expands its relationship with Johnson
& Johnson, including recovering the McNeil division of J&J from IRI.
<TABLE>
_________________________________________________________________________________
Marketing Information Services
<CAPTION>
Dollar amounts in millions 1993 1992 % Change 1991 1990 1989
_________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Operating Revenue $1,868.3 $1,893.9 -1.4 $1,832 $1,938 $1,715
Operating Income
Before Restructuring
Income/Expense - Net $ 296.5 $302.7 -2.0 $286 $332 $312
Operating Margin
% Before Restructuring
Income/Expense - Net +15.9 +16.0 -.6
___________________________________________________________________________________
<FN>
Excluding the impact of the stronger dollar and the divestiture
of Donnelley Marketing Information Services, revenue growth was
about 6% and operating income was up about 7%.
</TABLE>
Nielsen International, which encompasses Asia-Pacific and Latin American
operations as well as those in Europe, widened its lead against its
competitors as it continued to reengineer and streamline operations to
improve responsiveness to customers and accelerate product development.
The unit began to roll out advanced scanning-based information services
in the United Kingdom and France and will extend scanning capabilities
to eight northern European countries in 1994. Nielsen International also
will introduce a major new release of The Nielsen Inf*Act Workstation, a
Retailer Workstation and a variety of additional decision-support
applications.
Nielsen signed a five-year European partnership agreement with Procter &
Gamble covering 32 product categories. Under a global agreement with
Coca-Cola, Nielsen will provide marketing information on its beverage
and foods categories in 27 nations.
Nielsen International established operations in Poland. It also acquired
a majority interest in Cadem S.A., the leading marketing research firm
in Chile, and acquired STARS, Puerto Rico's only store-audit service. In
Turkey, Nielsen acquired an interest in Zet-Nielsen Business Information
A.S., a marketing information provider, and established television-
audience measurement services.
Nielsen also introduced national People Meter television audience-
measurement services in Sweden and Singapore.
F-3
<PAGE>
1994 Outlook Nielsen Marketing Research anticipates worldwide underlying
revenue growth above the 3 percent growth achieved in 1993, with 1994
operating margins consistent with last year due to new-product
investment spending. The long-term goal for Nielsen is growth at the
corporate average.
Nielsen Media Research
Nielsen Media Research reported solid growth in revenue and operating
income, as its annual revenue exceeded $200 million for the first time.
Nielsen Media's customers include national and local television
broadcasters, cable networks and systems, syndicators, advertisers and
advertising agencies.
Nielsen Media introduced metered local audience-measurement service in
the Orlando-Daytona Beach-Melbourne market in Florida during 1993. In
February 1994, Nielsen entered the West Palm Beach-Ft. Pierce market,
bringing the total number of Nielsen metered markets to 30, with
Cleveland and Detroit to follow later in the year. The Arbitron Co.
announced in 1993 that it was discontinuing syndicated local market
television and cable ratings service.
_______________________________________________________________________
Nielsen built competitive momentum, winning numerous contracts with
major clients and, in early 1994, capturing the Bristol-Myers Squibb
account from IRI.
_______________________________________________________________________
Nielsen Media launched the first phase of a new national delivery system
that, when completed, will provide online delivery and cross-media
analysis of broadcast, cable and syndication data. The division's
Personal NAD Facility, also introduced in 1993, became the first system
using CD-ROM technology to deliver demographic breakdowns of viewership
for selected market areas for all national TV programming sources.
In 1994, Nielsen Media Research is expecting strong double-digit growth
in revenue and operating income.
Risk Management and Business Marketing Information Services
Dun & Bradstreet Information Services
Dun & Bradstreet Information Services (DBIS) is the world's leading
supplier of business-to-business risk management, credit and marketing
information and decision-support services that build customers'
profitability and sales. The division maintains operations in 34
countries, a data-collection network spanning nearly 200 nations and
a database covering more than 32 million businesses worldwide. Its nine-
digit D-U-N-S Number, endorsed by the United Nations as a standard
business identifier for cross-border electronic data interchange, is a
unique tool for establishing corporate family relationships worldwide.
DBIS also provides receivables-management services worldwide and credit
insurance in the U.S. The business generates about 35 percent of its
revenue outside the U.S.
1993 Performance Worldwide DBIS revenue was $1.20 billion, up about 1
percent from 1992 on a reported basis, and up about 3 percent excluding
the impact of the stronger dollar and the acquisition of Soliditet. The
division reported solid growth in operating income for the year, with
higher operating margins resulting from continuing productivity
improvements.
F-4
<PAGE>
DBIS North America reported a slight increase in revenue from a year
ago. Revenue from U.S. credit services increased 3 percent to $559
million, with a small increase in sales for the year. DBIS Europe had a
modest decrease in revenue on a reported basis, but posted a slight
increase excluding the acquisition of Soliditet and the unfavorable
impact of a stronger dollar.
Operating Highlights DBIS took a number of actions to introduce
integrated business information services and to enhance its traditional
information products. The division introduced portfolio-analysis
services in the U.S. and the U.K., and database-marketing services in
the U.S., that allow customers to integrate their own information with
DBIS' data and perform analyses that highlight risk and identify
marketing opportunities. These services generated significant new
revenue in their initial release.
In North America, DBIS enhanced the Business Information Report. New
features of the report include the D&B Paydex Score and an explanation
of the score, which rates a company's past payment performance.
_______________________________________________________________________
DBIS continued its aggressive global expansion by acquiring Soliditet,
the leading provider of business information in Sweden, Norway and
Finland.
________________________________________________________________________
DBIS North America formed an alliance with Equifax, a consumer credit
reporting company, to develop new information-driven solutions for
customers, including credit scores on virtually all small businesses in
the U.S. by the end of 1994. DBIS also increased the number of
businesses on which it provides credit scores from 4.5 million to 10
million.
In Europe, DBIS acquired Soliditet in May and moved quickly to integrate
the company. Soliditet is the leading provider of commercial credit
information in Sweden, Norway and Finland.
DBIS formed a joint venture with the European Bank for Reconstruction
and Development to accelerate the development of business information
services in Central and Eastern Europe. With sanctions lifted, DBIS
began supplying customers worldwide with information on South African
companies through an arrangement with ITC, the company D&B divested in
1986.
DBIS rolled out D&B Access PC software to eight European countries,
where it accounted for as much as 65 percent of online inquiries
by year-end. D&B Access provides fast, flexible delivery of business
information to customers and a wider range of information options.
DBIS began providing global online access to information on firms in
Mexico in August, meeting customer needs driven in part by the North
American Free Trade Agreement and the fast-growing Mexican economy.
D&B's database on Mexican companies was increased from 75,000 to 300,000
files by year-end.
DBIS' APLAN network technology, which supports developments in Mexico,
was also expanded in Venezuela, Japan and Taiwan, providing customers
with domestic, regional and global business information delivered in
those countries' languages. Argentina, Chile, Peru and Brazil will be
added to the network in 1994.
1994 Outlook Worldwide DBIS underlying revenue growth is expected to be
in the mid-single digits. Strong growth in operating income is expected
in 1994, with further improvements in productivity. The long-term goal
for DBIS is growth at the corporate average.
F-5
<PAGE>
Moody's Investors Service
Moody's Investors Service issues ratings on corporate and government
obligations and issuers of commercial paper in the U.S., Canada, Europe
and Asia/Pacific, and publishes business and financial information.
1993 Performance Moody's reported strong revenue growth and a
substantial increase in operating income for the third consecutive year,
reflecting continuing favorable bond-market conditions.
Operating Highlights Moody's continued to extend its international
capabilities while maintaining its strong leadership position in the
U.S. Moody's geographic expansion, including the official opening of its
Madrid office, continues as capital flows become increasingly global.
Moody's also maintains offices in London, Paris, Frankfurt, Sydney and
Tokyo.
During the year, Moody's Corporate Department issued first-time ratings
on six companies that specialize in derivative products and developed a
capability to deliver opinions and ratings electronically to clients.
Moody's also established a Global Credit Research Client Service Desk to
facilitate communication with analysts and serve the needs of strategic
corporate fixed-income investors worldwide; increased the number of non-
U.S. investor briefings on global credit topics; initiated
teleconferences that allow investors to discuss timely credit issues
with Moody's analysts; and established a calling program that has built
stronger relationships between Moody's analysts and strategic investors.
<TABLE>
_________________________________________________________________________________
Risk Management and Business Marketing Information Services
<CAPTION>
Dollar amounts in millions 1993 1992 % Change 1991 1990 1989
_________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Operating Revenue $1,564.2 $1,520.6 +2.9 $1,397 $1,351 $1,330
Operating Income
Before Restructuring
Income/Expense - Net $ 404.6 $379.6 +6.6 $285 $253 $374
Operating Margin
% Before Restructuring
Income/Expense - Net +25.9 +25.0 +3.6
___________________________________________________________________________________
<FN>
Excluding the impact of the stronger dollar and the acquisition
of Soliditet, revenue growth was up about 5% and operating income was
up about 11%.
</TABLE>
________________________________________________________________________
Favorable bond-market conditions led to another record performance at
Moody's in 1993.
________________________________________________________________________
Moody's Public Finance assigned a record 13,500 ratings in 1993 as U.S.
municipal volume totaled $290 billion, the highest ever recorded. Facing
this volume, Public Finance expanded its analytical focus on the revenue
sectors of the markets, strengthening its market position, by creating
revenue specialty groups. Public Finance also established a full
capacity rating desk in its Western Regional Office and launched a
new product devoted exclusively to refunded bonds that includes new
weekly, biweekly and quarterly updates. Refunding volume accounted for
close to 65 percent of market volume in 1993.
F-6
<PAGE>
In the U.S., where Moody's Financial Information Services (FIS)
installed its 1,000th CD-ROM customer, the department placed sales
personnel in San Francisco and Dallas to build market share for Moody's
products. FIS also signed a letter of intent with Toyo Keizai, Japan's
largest business information company, to produce an English-language CD-
ROM product containing data on Japanese public companies.
1994 Outlook The anticipated slowdown in the volume of refinancings and
new debt issues did not occur in 1993 and is now expected to occur in
1994, even though the market continues to exhibit strong volume.
Consequently, Moody's is not anticipating growth in 1994 and may
experience a decline in revenue and operating income. Long-term, Moody's
is expected to achieve growth at the corporate average, with some
variability due to changing bond-market conditions.
________________________________________________________________________
Interactive Data provides securities-related information and software to
the investment community in North America, Europe and Asia/Pacific.
Interactive Data's revenue and operating income increased in
1993.
Software Services
Dun & Bradstreet Software
D&B Software, with revenue of more than $400 million, is a worldwide
leader in the marketplace for client/server and mainframe software for
financial, human-resources, distribution and manufacturing applications
and decision-support.
1993 Performance Excluding the impact of the divestiture of Information
Associates and the stronger dollar, D&B Software reported a modest
decline in revenue. Excellent growth in client/server revenue, which
exceeded expectations by nearly 200 percent, was offset by an
anticipated decline in mainframe software revenue. However, D&B Software
achieved an excellent increase in operating income, reflecting the
positive impact of a workforce reduction, the consolidation of certain
activities and the closing of two facilities.
<TABLE>
__________________________________________________________________________________
Software Services
<CAPTION>
Dollar amounts in millions 1993 1992 % Change 1991 1990 1989
_________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Operating Revenue $ 475.6 $533.5 -10.9 $ 557 $558 $ 230
Operating Income
Before Restructuring
Income/Expense - Net $ 43.7 $ 18.7 +133.7 $ 43 $ 57 $ 33
Operating Margin
% Before Restructuring
Income/Expense - Net +9.2 +3.5 +162.9
___________________________________________________________________________________
<FN>
Excluding the impact of the stronger dollar and the divestiture
of Information Associates, revenue declined about 7%, and operating
income was up about 113%.
</TABLE>
F-7
<PAGE>
Operating Highlights Sales of SmartStream client/server software
contributed to D&B Software's improved operating income performance in
1993.
The division released FinancialStream, the first SmartStream
applications package in September, and an enhanced version of
SmartStream Decision Support in July. By year-end, D&B Software
recognized revenue from client/server sales representing approximately
300 customer sites.
________________________________________________________________________
Customers responded enthusiastically to D&B Software's initial
client/server offerings, as revenues exceeded expectations by nearly 200
percent.
________________________________________________________________________
SmartStream provides companies with enhanced workflow and information-
distribution capabilities. Faster, easier access to business information
through Windows-based desktop workstations allows more business
processes to be automated. Global functionality will permit the software
to be easily adapted and used in international operations. The remaining
elements of the enterprise-wide SmartStream architecture, covering human
resources and manufacturing & distribution applications, are scheduled
for release during 1994.
Early SmartStream results included several sales to customers who will
use the software's full capabilities for reengineering business
processes for greater productivity and profitability. Other customers
focused on targeted applications and business functions as they began to
make the transition from mainframe to client/server-based computer
architectures.
D&B Software continued to provide customers with flexible approaches to
converting to client/server computing. The division also delivered a
number of enhancements to its mainframe software during the year and
improved the maintenance and support services it provides to mainframe
software customers.
D&B Software has established third-party development and/or marketing
relationships with a number of organizations, including Microsoft, Data
General, Hewlett-Packard, IBM, Sybase, Andersen Consulting and Price
Waterhouse.
D&B Software established direct operations in Malaysia to serve a
growing client base in that country.
1994 Outlook Nineteen-ninety-four is expected to be an exciting year for
D&B Software, with substantial growth in client/server revenue. However,
given the anticipated continuing decline in mainframe software revenue,
D&B Software's total revenue may not increase and could be down
slightly. Nonetheless, with the anticipated growth in client/server
revenue and further productivity improvements, operating income is
expected to be up substantially. Long-term, D&B Software is expected to
achieve growth above the corporate average.
________________________________________________________________________
Sales Technologies is the largest U.S. supplier of sales automation
solutions, with operations also in Canada, Germany, the U.K. and France.
The division reported a decline in revenue and an operating loss.
F-8
<PAGE>
________________________________________________________________________
Erisco, which provides software and services for health-care
administration, reported a significant increase in operating income, but
a modest decrease in revenue due to the discontinuation of its Defined
Contribution Services product line.
Directory Information Services
Reuben H. Donnelley
Reuben H. Donnelley compiles, publishes or serves as sales and marketing
representative for more than 400 yellow pages directories in 17 states
and the District of Columbia. Donnelley serves markets in various
regions of the U.S. in association with NYNEX, Cincinnati Bell and
Sprint, and is a proprietary publisher in the mid-Atlantic area and
southern California. DonTech, a partnership with Ameritech Advertising
Services, Inc., serves Illinois and northwestern Indiana. Thomson
Directories Ltd., a partnership with The Thomson Corporation, serves
markets in the United Kingdom through 155 directories.
1993 Performance Directory Information Services' reported revenue
increased 7.5 percent to $450.7 million, primarily as a result of timing
factors. Excluding the impact of timing factors, revenue was essentially
unchanged. Underlying sales of yellow pages directories also were
essentially unchanged. Operating income rose 14.8 percent to $185.2
million. Excluding the impact of timing factors, segment operating
income was up about 3 percent.
<TABLE>
_________________________________________________________________________________
Directory Information Services
<CAPTION>
Dollar amounts in millions 1993 1992 % Change 1991 1990 1989
_________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Operating Revenue $ 450.7 $419.4 +7.5 $ 463 $450 $ 437
Operating Income
Before Restructuring
Income/Expense - Net $ 185.2 $161.3 +14.8 $209 $184 $162
Operating Margin
% Before Restructuring
Income/Expense - Net +41.1 +38.5 +6.8
___________________________________________________________________________________
<FN>
Excluding the impact of timing factors, revenue was essentially
unchanged and operating income was up about 3%.
</TABLE>
Operating Highlights Donnelley conducted a major reengineering of its
operations that will reduce its costs, increase productivity and support
the development of new advertising products for emerging electronic
media. These steps included shortening the production phase for many
directories, which increases the time available for sales campaigns and
improves advertising quality.
________________________________________________________________________
Donnelley's major reengineering has created a new platform for building
sales growth and developing new products.
________________________________________________________________________
F-9
<PAGE>
In addition, Donnelley introduced workstation-based account-planning and
territory-management software that helps sales representatives analyze
their assignments, segment key industry sectors, calculate customers'
return on investment and apply D&B Information Services' marketing and
business information. The planned increase in the use of laptop
computers will further improve customer service and satisfaction,
automate additional publishing and administrative functions,
and contribute to the development of an easily adaptable, digitized
database of advertising information.
1994 Outlook Directory Information Services expects a modest increase in
underlying revenue and a strong increase in underlying operating income
as a result of productivity actions initiated in 1993. While long-term
growth is expected to be below the corporate average, Donnelley remains
a high-margin business with a strong cash flow.
Other Business Services
Dun & Bradstreet Plan Services provides group-health-insurance marketing
and administration services to insurance companies, agents and
businesses. Dun & Bradstreet Pension Services supplies pension and
profit-sharing services. Dun & Bradstreet Plan Services reported
declines in revenue and operating income.
NCH Promotional Services provides cents-off coupon redemption,
promotion, processing and management services to retailers and
manufacturers. The division reported declines in revenue and operating
income, due in part to actions taken to improve cash flow and overall
profitability.
Dataquest provides global market research, analysis and consulting
services for information technology, hardware, software, communications
and services companies, and for the heavy-machinery industry. The
division posted a slight increase in revenue and significantly reduced
its operating loss during the year.
Gartner Group, with offices in 25 countries, is a leading provider of
research, analysis and advisory services to users and suppliers
of information technology systems and software. In April, The Dun &
Bradstreet Corporation acquired a majority interest in Gartner Group
from Information Partners Capital Fund L.P. Following a public offering
of Gartner stock, D&B retained 52 percent ownership.
Gartner posted substantial growth in revenue and operating income. The
unit continued to expand its range of information-technology research
services by acquiring New Science Associates, Inc., a provider of
complementary subscription-based services. In January 1994, it acquired
Real Decisions Corp., which provides asset and resource management
services and corporate information technology benchmarking.
_______________________________________________________________________
Gartner Group posted revenue growth of more than 20 percent, with even
higher growth in profits and expanding margins.
________________________________________________________________________
D&B Health Care Information was formed in 1993 to address new market
opportunities in health-care information and decision-support
services. In July, the division acquired Health Research Network, a
provider of clinical information on the incidence and treatment
of HIV/AIDS.
F-10
<PAGE>
The division was selected by the U.S. Centers for Disease Control to
track HIV/AIDS. The study will create a national database on AIDS-
related conditions and trends in prevention and treatment. D&B
HealthCare acquired Lexecon Health Service, Inc., in January 1994, the
largest non-government supplier of patient outcome studies to U.S.
health-care providers.
<TABLE>
________________________________________________________________________________
Other Business Services
<CAPTION>
Dollar amounts in millions 1993 1992 % Change 1991 1990 1989
_________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Operating Revenue $ 351.6 $383.3 -8.3 $ 402 $540 $ 607
Operating Income
Before Restructuring
Income/Expense - Net $ 28.0 $ 50.4 -44.4 $ 37 $ 63 $ 82
Operating Margin
% Before Restructuring
Income/Expense - Net +8.0 +13.1 -38.9
___________________________________________________________________________________
<FN>
Adjusted for the timing effect of the acquisition of Gartner Group
and the divestiture of Datastream, and the impact of the stronger
dollar, revenue was essentially unchanged and operating income was up
about 11%.
</TABLE>
Corporate Resources
DunsNet is the company's worldwide telecommunications network that
supports the delivery of online products of D&B operating units to
customers in North America, Europe and Asia/Pacific. (Costs are
allocated across all business segments.)
DunsGate develops and maintains advanced electronic information products
and distribution systems that give customers faster, easier and more
effective access to D&B data and services through their telephones,
personal computers and facsimile machines. (Costs are allocated across
Risk Management and Business Marketing Services and Other Business
Services.)
________________________________________________________________________
This discussion mentions several products and company names that are
trademarks of other companies. It is not our intention to claim these
names or trademarks as our own.
________________________________________________________________________
F-11
<PAGE>
FINANCIAL REVIEW
The Company reported earnings per share in 1993 of $3.36, up 8.4% from
$3.10 a year ago, excluding the adoption of Financial Accounting
Standards (FASB) Statements of Financial Accounting Standards (SFAS) No.
112 and No. 106 and a net restructuring charge of $166.7 million after-
tax. (See Notes 2 and 5 to the Consolidated Financial Statements.)
Full-year earnings per share were reduced by $.05 per share as a result
of the increase in the U.S. corporate income tax rate. Including the
effect of these factors, the Company reported 1993 earnings per share of
$.23 and net income of $38.1 million.
Operating revenue in 1993 was down .8% to $4,710.4 million from
$4,750.7 million a year ago. Excluding the effects of divestitures and
acquisitions, the adverse impact of the stronger dollar and certain
timing factors, 1993 revenue for D&B's current portfolio of businesses
was up about 3.5%.
In 1993 the Company sold Donnelley Marketing Information Services
(DMIS), redeemed preferred shares and notes related to the sales of
Donnelley Marketing and Datastream and resolved certain contingencies
related to other divestitures. As a result of the above transactions, a
$40.0 million gain was recognized.
In 1993, the Company also recognized a $21.0 million non-operating
gain related to the initial public offering of Gartner Group, Inc.
(Gartner Group) in which the Company holds a majority interest. In
connection with the above operating and non-operating gains, the Company
recorded $61.0 million of restructuring expense related to work-force
reductions (non-severance costs) and restructuring of certain operations
and businesses.
Additional restructuring actions initiated in 1993 totaling $256.5
million represented an acceleration of ongoing efforts to achieve long-
term productivity improvements and to leverage the Company's global
synergies. A significant portion of the charge was for downsizing the
number of data-processing centers, reducing worldwide real estate costs,
and reengineering back-office accounting functions. The ongoing pre-tax
savings from these synergy actions, which are expected to grow in the
next few years to approximately $100 million annually, will be used
principally for initiatives to accelerate revenue growth. (See Note 5
to the Consolidated Financial Statements.)
Operating income before restructuring expense-net in 1993 increased
5.6% to $830.0 million from $785.9 million in 1992. Excluding the
effects of divestitures and acquisitions, the stronger dollar, certain
timing factors and restructuring expense-net, 1993 operating income was
up about 13%. Operating income after restructuring expense-net
decreased to $552.5 million.
For the Company's current portfolio of businesses, operating
expenses excluding restructuring expense-net and the effect of the
stronger dollar increased 1.7% in 1993 compared with 1992, reflecting
productivity improvements.
In 1993, the Company adopted the provisions of SFAS No. 112,
"Employers' Accounting for Postemployment Benefits," and SFAS No. 106,
"Employers' Accounting for Postretirement Benefits Other than Pensions."
The adoption of SFAS No. 112 and SFAS No. 106 resulted in one-time, non-
cash, after-tax charges of $250 million and $140 million, respectively,
in the first quarter. (See Note 2 to the Consolidated Financial
Statements.)
Interest income-net 1993 was $26.9 million, compared with interest
income-net of $11.3 million a year ago, reflecting lower interest
expense due in part to a lower level of short-term borrowings, a larger
portfolio of marketable securities and interest income on notes related
to the sale of Datastream. In effect, a portion of the increase in
interest income-net represented an offset to the absence of operating
income from divested businesses.
Non-operating income-net in 1993 included a $21.0 million gain from
the initial public offering of Gartner Group. Other expense-net of
$12.4 million in 1993 compared with other expense-net of $2.0 million a
year ago reflected the minority interests' share of income/loss of
majority-owned subsidiaries and various partnerships.
The Company's effective tax rates were 27.1%, 30.4% and 31.3% in
1993, 1992 and 1991, respectively. The lower rate in 1993 primarily
reflected the favorable tax effects of the fourth-
F-12
<PAGE>
quarter restructuring charge. Excluding the effects of the charge, the
full-year tax rate would have been 29.5%, reflecting the continuing
favorable effects of global tax-planning actions, partially offset by
the increase in the U.S. corporate income tax rate.
Return on average shareowners' equity (excluding restructuring
expense-net of $277.5 million, a $21.0 million gain from Gartner Group's
sale of stock and the cumulative effect of accounting changes in 1993)
was 34.6%, 26.1% and 25.2% in 1993, 1992 and 1991, respectively. Return
on average shareowner's equity was 24.9% in 1993, before cumulative
effect of accounting changes.
Shareowners' Equity totaled $1,111.3 million at December 31, 1993,
compared with $2,156.0 million at December 31, 1992. The decline was
principally attributed to the repurchase of the Company's common stock
that was authorized by the Company's Board of Directors after
considering a number of factors, including the favorable long-term
growth prospects of the Company, its continuing strong cash flow and
cash position, and the attractive financial implications of a share
repurchase for the Company, resulting in part from low interest rates
and the Company's high dividend yield. The decline also reflected the
after-tax effects of adopting SFAS No. 112 and SFAS No. 106 and the
after-tax effect of restructuring expense. The Company believes that
because of its strong cash flow characteristics (described in the
Liquidity Section below) the lower level of shareowners' equity will not
have a material effect on the Company's ability to obtain appropriate
financing to meet the growth needs of the Company.
Regarding 1994, the Company is anticipating growth in earnings per
share somewhat above the 8.4% growth in 1993 earnings per share to
$3.36, which excludes the $256.5 million net restructuring charge and
the impact of the required accounting changes.
The Company also believes it will achieve underlying revenue growth
in 1994 above its 1993 underlying revenue growth of about 3.5%, despite
the expected continuing weak growth in the global economy in 1994.
Marketing Information Services reported a 1.4% decrease in revenue
in 1993 to $1,868.3 million from $1,893.9 million in 1992 as a result
of the impact of the stronger dollar and the divestiture of Donnelley
Marketing Information Services (DMIS). Excluding these factors, full-
year revenue growth for the segment was about 6%. IMS International's
1993 revenue was $613.9 million, up 4.7% on a reported basis, and up
about 10% excluding the impact of the stronger dollar. Nielsen
Marketing Research reported worldwide revenue of $1.05 billion, down
6.4% on a reported basis from a year ago but up about 3% excluding the
impact of the stronger dollar and the divestiture of DMIS. Nielsen
Media reported a solid increase in revenue for 1993. Reported operating
income for the segment, excluding restructuring expense-net, decreased
2% to $296.5 million from $302.7 million a year ago. Adjusted for the
divestiture of DMIS and the impact of the stronger dollar, operating
income was up about 7%, reflecting productivity improvements at IMS
International and Nielsen Marketing Research International, partially
offset by higher costs at Nielsen Marketing Research in the United
States.
Risk Management and Business Marketing Information Services' revenue
in 1993 was up 2.9% to $1,564.2 million from $1,520.6 million in 1992.
Excluding the impact of the stronger dollar and the acquisition of
Soliditet, full-year revenue was up about 5%. Dun & Bradstreet
Information Services (DBIS) North America reported a slight increase in
revenue from a year ago. U.S. credit services' 1993 revenue was up 3%
to $559 million. U.S. credit services posted a small increase in sales
for the full year. DBIS Europe had a modest decrease in revenue in 1993
on a reported basis, but posted a slight increase excluding the
acquisition of Soliditet and the unfavorable impact of the stronger
dollar. Moody's Investors Service reported a strong increase in revenue
for the year, reflecting favorable bond market conditions. Reported
operating income for the segment, excluding restructuring expense-net,
increased by 6.6% in 1993 to $404.6 million from $379.6 million in 1992.
Excluding the impact of the stronger dollar, the acquisition of
Soliditet and restructuring expense-net, operating income was up 11%, as
a result of the 5% growth in underlying revenue and significant
productivity improvements.
F-13
<PAGE>
Software Services reported a 10.9% decrease in revenue in 1993 to
$475.6 million from $533.5 million. Excluding the impact of the
stronger dollar and divestiture of Information Associates, 1993 segment
revenue decreased about 7% and D&B Software had a modest decline.
Operating income for the segment, excluding restructuring expense-net,
increased by 133.7% to $43.7 million in 1993 from $18.7 million in 1992,
reflecting the positive impact of a work-force reduction, the
consolidation of certain activities and the closing of two facilities at
D&B Software. Excluding the impact of the stronger dollar, the
divestiture of Information Associates and restructuring expense-net,
operating income was up about 113%, reflecting the above actions to
improve productivity.
Directory Information Services' reported revenue increased 7.5% to
$450.7 million from $419.4 million, primarily as a result of timing
factors. Excluding the impact of timing factors, segment revenue was
essentially unchanged. Underlyling sales of yellow pages directories
were essentially unchanged compared with last year. Operating income
for the segment, excluding restructuring expense-net, increased 14.8% to
$185.2 million in 1993 from $161.3 million in 1992. Excluding the
impact of timing factors and restructuring expense-net, operating income
for the segment was up about 3%.
Other Business Services reported an 8.3% decrease in revenue in 1993
to $351.6 million from $383.3 million in 1992. Adjusted for the timing
effect of the acquisition of Gartner Group and the divestiture of
Datastream, and the impact of the stronger dollar, segment revenue was
essentially unchanged. Gartner Group posted a substantial increase in
revenue. NCH Promotional Services reported a decrease in revenue, due
in part to actions taken to improve profitability and cash flow. Dun &
Bradstreet Plan Services also reported a decrease in 1993 revenue.
Operating income for the segment, excluding restructuring expense-net,
decreased 44.4% to $28.0 million in 1993 from $50.4 million in 1992.
Adjusted for the timing effect of the acquisition of Gartner Group and
the divestiture of Datastream, the stronger dollar and restructuring
expense-net, operating income was up about 11%, due principally to a
strong contribution from Gartner Group.
In 1992, the Company reported earnings per share of $3.10, up 9.2%
from $2.84 per share in 1991. Net income for 1992 increased 9.3% to
$553.5 million from $506.5 million in 1991.
Operating revenue in 1992 increased $99.7 million, or 2.1% to
$4,750.7 million from $4,651.0 million in 1991. Revenue growth in 1992
was held down by the effects of four divestitures--Donnelley Marketing
in February 1991, the communications unit of IMS International in July
1991, Information Associates in June 1992 and Datastream International
in September 1992--as well as by the impact of changes in contractual
arrangements at Reuben H. Donnelley in 1991. Excluding these factors,
and the impact of a slightly weaker dollar, revenue growth for D&B's
current portfolio of businesses was about 5%, which was held down by the
negative impact of economic and industry conditions on Directory
Information Services and Dun & Bradstreet Software.
Operating income in 1992 increased by 5.6% to $785.9 million from
$744.3 million in 1991. Excluding the effects of divestitures, the 1991
changes in the Donnelley contracts, 1991 restructuring expense and the
impact of a slightly weaker dollar, operating income increased by about
9%.
Operating expenses excluding the effect of acquisitions and
divestitures, restructuring expense-net and the impact of a weaker
dollar, increased 4% in 1992 compared with 1991.
Interest income-net in 1992 was $11.3 million, compared with interest
expense-net of $10.1 million in 1991, reflecting a larger portfolio of
marketable securities and a lower level of short-term borrowings, due to
a significant increase in cash flow from operations and proceeds from
the sales of Datastream International and Information Associates. In
effect, a portion of the increase in interest income-net represented an
offset to the absence of operating income from divested businesses.
Other expense-net in 1992 was $2.0 million compared with other
income-net of $3.1 million in 1991. Other expense-net in 1992 included
a $3.4 million gain on foreign-currency put options, compared with an
$11.2 million gain in 1991.
In 1991, the Company reported earnings per share of $2.84, up 1.8%
from $2.79 per share in 1990. Net income was essentially unchanged at
F-14
<PAGE>
$506.5 million, compared with $506.7 million in 1990. Earnings per
share increased, while net income was flat, because of the impact of
share repurchases in 1990.
Operating revenue in 1991 decreased by $186.3 million or 3.9% to
$4,651.0 million from $4,837.3 million in 1990. The decrease in
operating revenue was attributable to the divestitures of Zytron,
Neodata Services and Petroleum Information in 1990, Donnelley Marketing
in February 1991 and the communications unit of IMS in July 1991.
Adjusted for these divestitures, revenue growth for the Company
approximated 5% in 1991, despite recessionary conditions.
Operating income in 1991 decreased 5.4% to $744.3 million from
$786.9 million in 1990, as a result of divestitures. The positive
effect of changes in contractual arrangements between Reuben H.
Donnelley and several telephone companies was offset by net
restructuring expense of $15 million. Excluding the effects of
divestitures, the changes in Reuben H. Donnelley contracts and
restructuring expense-net, operating income increased by about 4%.
Operating expenses excluding restructuring expense-net in 1991
decreased 3.9% compared with 1990. The decrease in operating expenses
was due to the absence of expenses from divested units.
Interest expense-net in 1991 was $10.1 million compared with
interest income-net of $1.5 million in 1990, reflecting a lower
portfolio of marketable securities that resulted from a number of
factors, including the use of funds for restructuring payments and 1990
share repurchases.
Other income-net in 1991 was $3.1 million, compared with other
expense-net of $20.6 million in 1990, and included an $11.2 million gain
on foreign-currency put options.
In line with its often stated strategy of sharpening its focus on
key markets for information services, during 1991, Donnelley Marketing
and the communications unit of IMS were sold in the first and third
quarters, respectively. In 1992, the Information Associates unit of Dun
& Bradstreet Software and Datastream International were sold during the
second and third quarters, respectively.
Restructuring actions initiated in 1992 included the reorganization
of European operations at Nielsen Marketing Research, and work-force
reductions and actions to consolidate operations at Dun & Bradstreet
Software and Reuben H. Donnelley. The pre-tax costs of these actions
essentially offset a pre-tax gain of $107 million on the sales of
Datastream International and Information Associates (See Note 5 to the
Consolidated Financial Statements.)
Restructuring actions initiated by the Company in 1991 included the
consolidation of regional operations, management realignments and the
restructuring of certain operations at Reuben H. Donnelley, as well as
work-force reductions at Nielsen Marketing Research, Dun & Bradstreet
Software and Dun & Bradstreet Information Services. The pre-tax costs
of these actions totaled $113 million and were largely offset by a pre-
tax net gain of $98 million on divestitures. (See Note 5 to the
Consolidated Financial Statements.) The resulting net restructuring
expense of $15 million was largely offset by benefits from changes in
Reuben H. Donnelley contracts.
In 1993, 1992 and 1991, certain restructuring actions initiated in
1992, 1991 and 1990 were completed at a lower cost than originally
estimated and other actions required more costs to implement than
originally expected. In addition, costs to complete certain actions
being implemented changed based on revised estimates and experience to
date. In a number of instances, new restructuring actions were
initiated to complement or enhance original actions and certain actions
were expanded, contracted or discontinued based on changed
circumstances. While the total costs of all restructuring actions
remained unchanged, the changes in estimates and other changes did
impact operating income by business segment. (See Notes 5 and 14 to the
Consolidated Financial Statements.)
Restructuring actions significantly affect year-to-year comparisons
of operating income by segment. Accordingly, Marketing Information
Services reported operating income of $243.5 million in 1993 compared
with operating income of $257.2 million and $362.5 million in 1992 and
1991, respectively. Risk Management and Business Marketing Information
Services
F-15
<PAGE>
reported operating income in 1993 of $307.6 million, compared
with operating income of $371.0 million and $250.4 million in 1992 and
1991, respectively. Software Services' operating loss for 1993 totaled
$24.6 million, compared with an operating loss of $19.2 million and
operating income of $29.2 million in 1992 and 1991, respectively.
Directory Information Services operating income in 1993 totaled $170.3
million, compared with $154.0 million and $175.6 million in 1992 and
1991, respectively. Other Business Services' operating income in 1993
totaled $24.8 million, compared with $149.8 million and $36.1 million in
1992 and 1991, respectively.
Non-U.S. Operations and Monetary Assets-The Company has operations in
more than 60 countries. Approximately 38% of the Company's revenues in
1993 were from non-U.S. operations, including approximately 27% from
European operations. The percentage of the Company's revenue from non-
U.S. (particularly European) opeations declined in 1993 compared with
1992 because of the effect of divestitures in 1992 and the strengthening
of the U.S. dollar in 1993. Non-U.S. operations accounted for
approximately 33% of the Company's operating income in 1993, including
European operations, which accounted for approximately 22%. Changes in
the value of non-U.S. currencies relative to the U.S. dollar cause
fluctuations in U.S. dollar operating results. In 1993, foreign
currency translation decreased U.S. dollar revenue and operating income
growth by approximately 4%.
Since 1989, the Company has used various financial instruments,
which have provided partial protection against foreign currency
exposures versus annual plan; however, this practice did not avoid year-
to-year fluctuations in U.S. dollar operating results resulting from
foreign currency translation. For 1994, the Company does not plan to
continue this practice; however, the cost/benefit of this practice will
be re-evaluated periodically and might be used in the future.
Non-U.S. monetary assets are maintained in European currencies,
principally in Germany, Switzerland, the Netherlands, Italy, the United
Kingdom and Spain. Changes in the value of these currencies relative to
the U.S. dollar are charged or credited to shareowners' equity. The
effect of exchange rate changes during 1993 reduced the U.S. dollar
amount of cash and cash equivalents by approximately $40 million.
F-16
<PAGE>
Liquidity and Financial Position - The Company's financial condition
continues to be very strong. At December 31, 1993, cash, cash
equivalents and current marketable securities totaled $669 million and
short-term debt totaled $258 million, including $166 million of Alaska
Native Corporation obligations.
In 1993, the Company continued to be a strong generator of cash from
operating activities. Cash generated from operating activities less
cash outlays for capital expenditures and computer software and other
intangibles additions totaled $493 million, which exceeded dividend
payments of $423 million. In 1994, the Company expects to continue this
strong performance before the effect of two abnormally large cash
outlays for restructuring expenses and postemploymenet benefits. In
1994, the Company anticipates cash outlays in the range of $170 million
for restructuring actions, primarily associated with restructuring
actions initiated in 1993, and cash outlays in the range of $200 million
for postemployment benefits, primarily severance pay. In 1994, after
the effect of the above two abnormally large expenditures, the Company
expects to be a moderate user of cash.
Net cash provided by operating activities totaled $932.2 million for
1993, compared with $1,002.3 million and $663.2 million for 1992 and
1991, respectively. The decrease of $70.1 million in net cash provided
by operating activities primarily reflected a smaller reduction of other
working capital in 1993 by NCH Promotional Services, compared with the
reduction in 1992 that resulted from changes in payment terms to
retailers.
Net cash used in investing activities totaled $382.2 million for
1993 compared with $298.9 million and $201.8 million in 1992 and 1991,
respectively. The increase in cash usage in 1993 reflected increased
payments for acquisitions ($118.3 million), lower proceeds from sale of
businesses ($67.0 million) and increased other investments and notes
receivable ($30.6 million), partially offset by the sale of marketable
securities ($172.9 million). Capital expenditures were $235.7 million,
$196.9 million and $226.2 million in 1993, 1992 and 1991, respectively.
Cash received ($107.5 million) during 1993 from the redemption of
preferred shares and notes related to the sales of Donnelley Marketing,
Datastream International, and the sale of DMIS was added to the general
funds of the Corporation. The Company anticipates that these funds will
be used to fund certain restructuring actions.
Net cash used in financing activities totaled $353.8 million in
1993, compared with $481.3 million in 1992, and $477.7 million in 1991.
The decrease in cash usage in 1993 reflected the proceeds ($54.0
million) from Gartner Group's initial public offering and third-parties
investments in partnerships ($625.0 million), which was used in part to
purchase the Company's common stock, partially offset by increased
($563.9 million) purchases of treasury shares.
In late 1996, third-parties special investors interests ($500 million)
in the investment partnership (See Note 4 to the Consolidated Financial
Statements) will be exchanged for cash, Company stock, a debt instrument
issued by the Company, or a combination thereof at the Company's
discretion. Additionally, the limited partners in the database
licensing partnership described in Note 4 will have the right to have
their limited partnership interests ($125 million) liquidated after
1996.
Management believes that short and medium-term financing
alternatives available to the Company, in addition to the Company's
large portfolio of cash, cash equivalents and marketable securities, as
well as cash generated from operations, will be more than sufficient to
meet the Company's cash requirements including capital expenditures,
severance payments, restructuring expenses, payments for acquisitions
and those that might result from liquidation of partnership minority
interests.
Dividends - The regular quarterly dividend was increased to $.61 from
$.57 per share on April 21, 1993. The increase brought dividends per
share in 1993 to $2.40, an increase of 6.7% over the $2.25 paid in 1992.
On an annualized basis, the dividend rate of $2.44 was up 7.0% from the
previous rate.
F-17
<PAGE>
Common Stock Information - The Company's common stock (symbol DNB) is
listed on the New York, London, Tokyo, Zurich, Geneva and Basel stock
exchanges. During 1993 and 1992, 69.4 million shares and 56.6 million
shares, respectively, were traded, representing 39.2% and 31.8% of the
average number of shares outstanding in the respective years. The
number of shareowners of record declined to 15,458 at January 31, 1994
from 16,076 at January 31, 1993.
The following summarizes price and dividend-per-share information
for Dun & Bradstreet common stock as reported in the periods shown:
Price Per Share ($) Dividends Paid
------------------------------- --------------
1993 1992 Per Share ($)
-------------- --------------- --------------
High Low High Low 1993 1992
_____________________________________________________________________________
First Quarter 61 3/4 55 3/4 58 52 3/4 .57 .54
Second Quarter 60 3/4 57 3/8 56 7/8 50 5/8 .61 .57
Third Quarter 64 7/8 57 1/2 59 1/8 54 1/4 .61 .57
Fourth Quarter 68 1/2 60 5/8 58 3/4 55 5/8 .61 .57
___________________________________________________________________
Year 68 1/2 55 3/4 59 1/8 50 5/8 2.40 2.25
___________________________________________________________________
F-18
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareowners and the Board of Directors of The Dun & Bradstreet
Corporation:
We have audited the accompanying consolidated statement of financial
position of The Dun & Bradstreet Corporation and Subsidiaries as of
December 31, 1993 and 1992, and the related consolidated statements of
income, shareowners' equity and cash flows for the years ended December
31, 1993, 1992 and 1991. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
The Dun & Bradstreet Corporation and Subsidiaries as of December 31,
1993 and 1992, and the consolidated results of their operations and
their cash flows for the years ended December 31, 1993, 1992 and 1991,
in conformity with generally accepted accounting principles.
As discussed in Note 2 to the consolidated financial statements, in
1993, the Company adopted Statement of Financial Accounting Standards
No. 106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions" and Statement of Financial Accounting Standards No. 112,
"Employers' Accounting for Postemployment Benefits".
Coopers & Lybrand
______________________
Stamford, Connecticut
January 27, 1994
F-19
<PAGE>
Statement of Management Responsibility for Financial Statements
To the Shareowners of
The Dun & Bradstreet Corporation:
Management has prepared and is responsible for the consolidated
financial statements and related information that appear on pages 13 to
35. The consolidated financial statements, which include amounts based
on judgments of management, have been prepared in conformity with
generally accepted accounting principles. Other financial information
in the annual report is consistent with that in the consolidated
financial statements.
Management believes that the Company's internal control systems
provide reasonable assurance at reasonable cost that assets are
safeguarded against loss from unauthorized use or disposition, and that
the financial records are reliable for preparing financial statements
and maintaining accountability for assets. These systems are augmented
by written policies, an organizational structure providing division of
responsibilities, careful selection and training of qualified financial
people and a program of internal audits.
The independent accountants are engaged to conduct an audit of and
render an opinion on the financial statements in accordance with
generally accepted auditing standards. These standards include an
assessment of the systems of internal controls and tests of transactions
to the extent considered necessary by them to support their opinion.
The Board of Directors, through its Audit Committee consisting
solely of outside directors of the Company, is responsible for reviewing
and monitoring the Company's financial reporting and accounting
practices. Coopers & Lybrand and the internal auditors each have full
and free access to the Audit Committee and meet with it regularly, with
and without management.
Robert E. Weissman
________________________
Robert E. Weissman
President and
Chief Executive Officer
Edwin A. Bescherer, Jr.
__________________________________
Edwin A. Bescherer, Jr.
Executive Vice President - Finance
and Chief Financial Officer
F-20
<PAGE>
<TABLE>
The Dun & Bradstreet Corporation and Subsidiaries
Consolidated Statement of Income
Years Ended December 31,
<CAPTION>
Dollar amounts in millions, except per share data 1993 1992 1991
___________ ___________ __________
<S> <C> <C> <C>
Operating Revenue $4,710.4 $4,750.7 $4,651.0
Operating Costs, Selling and
Administrative Expenses 3,506.7 3,585.9 3,540.8
Depreciation and Amortization 373.7 378.9 350.9
Restructuring Expense - Net 277.5 0 15.0
___________ ___________ __________
Operating Income 552.5 785.9 744.3
___________ ___________ __________
Interest Income 51.6 44.1 30.8
Interest Expense (24.7) (32.8) (40.9)
Gain on Sale of Gartner Group Stock 21.0 0 0
Other (Expense) Income - Net (12.4) (2.0) 3.1
___________ ___________ __________
Non-Operating Income(Expense) - Net 35.5 9.3 (7.0)
___________ ___________ __________
Income Before Provision for Income Taxes and Cumulative
Effect of Changes in Accounting Principles 588.0 795.2 737.3
Provision for Income Taxes 159.3 241.7 230.8
___________ ___________ __________
Income Before Cumulative Effect of Changes in
Accounting Principles 428.7 553.5 506.5
Cumulative Effect to January 1, 1993, of Changes
in Accounting Principles:
-SFAS No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions,"
Net of Income Tax Benefits of $93.7 (140.6) - -
-SFAS No. 112, "Employers' Accounting for
Postemployment Benefits," Net of Income Tax
Benefits of $150.0 (250.0) - -
___________ ___________ __________
Net Income $ 38.1 $ 553.5 $ 506.5
_______________________________________________________________ ___________ __________
Earnings Per Share of Common Stock:
Before Cumulative Effect of Changes in
Accounting Principles $ 2.42 $ 3.10 $ 2.84
Cumulative Effect to January 1, 1993, of Changes in
Accounting Principles:
-SFAS No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions," (0.79) - -
-SFAS No. 112, "Employers' Accounting for
Postemployment Benefits" (1.40) - -
_______________________________________________________________ ___________ __________
Net Earnings Per Share of Common Stock $ .23 $ 3.10 $ 2.84
___________ ___________ ___________
Average Number of Shares Outstanding 177,181,000 178,346,000 178,556,000
_______________________________________________________________ ___________ ___________
<FN>
The accompanying notes are an integral part of the consolidated
financial statements
F-21
</TABLE>
<PAGE>
<TABLE>
The Dun & Bradstreet Corporation and Subsidiaries
Consolidated Statement of Financial Position
December 31,
<CAPTION>
Dollar amounts in millions, except per share data 1993 1992
__________ __________
<S> <C> <C>
Assets
Current Assets
Cash and Cash Equivalents $ 650.9 $ 494.5
Marketable Securities 17.7 45.0
Accounts Receivable - Net 1,078.9 1,110.2
Other Current Assets 374.9 280.7
__________ __________
Total Current Assets 2,122.4 1,930.4
______________________________________________________________ __________
Investments
Marketable Securities, interest-bearing,
at cost which approximates market 106.2 140.4
Other Investments and Notes Receivable 310.6 387.9
__________ __________
Total Investments 416.8 528.3
______________________________________________________________ __________
Property, Plant and Equipment - Net 861.1 864.8
______________________________________________________________ __________
Other Assets-Net
Deferred Charges 318.5 283.1
Computer Software 294.5 246.8
Other Intangibles 214.7 228.1
Goodwill 942.4 833.4
__________ __________
Total Other Assets - Net 1,770.1 1,591.4
______________________________________________________________ __________
Total Assets $5,170.4 $4,914.9
___________________________________________________________________________
___________________________________________________________________________
The accompanying notes are an integral part of the consolidated
financial statements
F-22
<PAGE>
The Dun & Bradstreet Corporation and Subsidiaries
___________________________________________________________________________
Liabilities and
Shareowners' Equity
Current Liabilities
Accounts and Notes Payable $ 371.8 $ 473.7
Accrued and Other Current Liabilities 1,561.5 980.5
Accrued Income Taxes 110.8 190.4
__________ __________
Total Current Liabilities 2,044.1 1,644.6
______________________________________________________________ __________
Unearned Subscription Income 263.7 262.5
Postretirement and Postemployment Benefits 545.7 131.8
Deferred Income Taxes 85.9 151.7
Other Liabilities and Minority Interests 1,119.7 568.3
______________________________________________________________ __________
Total Liabilities $4,059.1 $2,758.9
______________________________________________________________ __________
Shareowners' Equity
Preferred Stock, par value $1 per share,
authorized - 10,000,000 shares;
outstanding - none
Common Stock, par value $1 per share,
authorized - 400,000,000 shares;
issued-188,406,813 and 188,401,399 shares for
1993 and 1992, respectively $ 188.4 $ 188.4
Capital in Excess of Par Value 64.2 59.4
Retained Earnings 2,135.7 2,520.6
Treasury Stock, at cost, 18,124,514 and 10,166,186
shares for 1993 and 1992, respectively (1,036.5) (472.0)
Cumulative Translation Adjustment (240.5) (140.4)
______________________________________________________________ __________
Total Shareowners' Equity $1,111.3 $2,156.0
______________________________________________________________ __________
Total Liabilities and Shareowners' Equity $5,170.4 $4,914.9
______________________________________________________________ __________
<FN>
F-23
</TABLE>
<PAGE>
<TABLE>
The Dun & Bradstreet Corporation and Subsidiaries
Consolidated Statement of Cash Flows
Years Ended December 31,
<CAPTION>
Dollar amounts in millions, except per share data 1993 1992 1991
___________ ___________ __________
<CAPTION>
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net Income $ 38.1 $ 553.5 $ 506.5
Reconciliation of Net Income to Net Cash
Provided by Operating Activities:
Cumulative Effect of Changes in Accounting
Principles:
Postretirement Benefits Other than Pensions 140.6 0 0
Postemployment Benefits 250.0 0 0
Depreciation and Amortization 373.7 378.9 350.9
Gains from Sale of Businesses
and Gartner Group Stock (61.0) (106.9) (98.1)
Restructuring Provisions 317.5 106.9 113.1
Restructuring Payments (95.1) (93.6) (137.5)
Postemployment Benefit Payments (44.3) 0 0
Net Decrease (Increase) in Accounts Receivable 36.8 12.0 (107.5)
Deferred Income Taxes 18.2 (24.7) 63.2
Net (Increase) Decrease in
Other Working Capital Items (42.3) 176.2 (27.4)
___________ ___________ ___________
Net Cash Provided by Operating Activities 932.2 1,002.3 663.2
_______________________________________________________________ ___________ ___________
Cash Flows from Investing Activities:
Proceeds from (Payments for) Marketable
Securities - Net 83.9 (89.0) (7.1)
Proceeds from Sale of Businesses 107.5 174.5 228.1
Payments for Acquisition of Businesses (excluding cash
and cash equivalents acquired of $12.8 in 1993) (120.1) (1.8) (19.7)
Capital Expenditures (235.7) (196.9) (226.2)
Computer Software & Other Intangibles Additions (202.9) (160.6) (154.0)
(Increase)Decrease in Other Investments and
Notes Receivable (29.8) .8 (64.3)
Other 14.9 (25.9) 41.4
___________ ___________ ___________
Net Cash Used in Investing Activities (382.2) (298.9) (201.8)
_______________________________________________________________ ___________ ___________
Cash Flows from Financing Activities:
Payment of Dividends (423.0) (401.3) (383.9)
Payments for Purchase of Treasury Shares (612.2) (48.3) (25.8)
Net Proceeds from Exercise of Stock Options 43.1 23.6 11.5
Decrease in Domestic Short-term Borrowings (34.9) (54.5) (36.5)
Third Parties' Investments in Partnerships 625.0 0 0
Other 48.2 (.8) (43.0)
___________ ___________ ___________
Net Cash Used in Financing Activities (353.8) (481.3) (477.7)
_______________________________________________________________ ___________ ___________
Effect of Exchange Rate Changes on Cash
and Cash Equivalents (39.8) (12.7) (12.8)
_______________________________________________________________ ___________ ___________
Increase(Decrease) in Cash and Cash Equivalents 156.4 209.4 (29.1)
Cash and Cash Equivalents, Beginning of Year 494.5 285.1 314.2
_______________________________________________________________ ___________ ___________
Cash and Cash Equivalents, End of Year $ 650.9 $ 494.5 $ 285.1
_______________________________________________________________ ___________ ___________
<FN>
The accompanying notes are an integral part of the consolidated
financial statements
F-24
</TABLE>
<PAGE>
<TABLE>
The Dun & Bradstreet Corporation and Subsidiaries
CONSOLIDATED STATEMENT OF SHAREOWNERS' EQUITY
<CAPTION>
Dollar amounts in millions, except per share data
__________________________________________________________________________________________________________________
Common Capital in Cumulative
Three Years Ended Stock Excess of Retained Treasury Translation
December 31, 1993 ($1 Par Value) Par Value Earnings Stock Adjustment Total
____________________________________________ ____________ ___________ ___________ ______________ _______
<S> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1991 $188.4 $55.3 $2,245.8 $(439.6) $(5.8) $2,044.1
Net Income 506.5 506.5
Cash Dividends ($2.15 per share) (383.9) (383.9)
Treasury shares reissued under
stock options and deferred
compensation plans (341,477) 1.2 11.5 12.7
Treasury shares reissued under
restricted stock plan (40,096) 1.8 1.8
Less unearned portion (1.8) (1.8)
Plus earned portion of grants 3.4 3.4
Treasury shares acquired (553,383) (25.8) (25.8)
Change in cumulative translation
adjustment (33.9) (33.9)
____________________________________________ ____________ ___________ ___________ ______________ _______
Balance, December 31, 1991 188.4 56.5 2,368.4 (450.5) (39.7) 2,123.1
Net Income 553.5 553.5
Cash Dividends ($2.25 per share) (401.3) (401.3)
Treasury shares reissued under
stock options and deferred
compensation plans (577,296) 2.9 23.6 26.5
Treasury shares reissued under
restricted stock plan (71,884) 4.0 4.0
Less unearned portion (4.0) (4.0)
Plus earned portion of grants 3.2 3.2
Treasury shares acquired (864,108) (48.3) (48.3)
Change in cumulative translation
adjustment (100.7) (100.7)
____________________________________________ ____________ ___________ ___________ ______________ _______
Balance, December 31, 1992 188.4 59.4 2,520.6 (472.0) (140.4) 2,156.0
Net Income 38.1 38.1
Cash Dividends ($2.40 per share) (423.0) (423.0)
Treasury shares reissued under
stock options and deferred
compensation plans (958,011) 4.8 43.1 47.9
Treasury shares reissued under
restricted stock plan (93,888) 5.4 5.4
Less unearned portion (5.4) (5.4)
Plus earned portion of grants 4.6 4.6
Treasury shares acquired (9,010,227) (612.2) (612.2)
Change in cumulative translation
adjustment (100.1) (100.1)
____________________________________________ ____________ ___________ ___________ ______________ _______
Balance, December 31, 1993 $188.4 $64.2 $2,135.7 $(1,036.5) $(240.5) $1,111.3
____________________________________________ ____________ ___________ ___________ ______________ _______
<FN>
The accompanying notes are an integral part of the consolidated
financial statements
F-25
</TABLE>
<PAGE>
The Dun & Bradstreet Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 1. Summary of Significant Accounting Policies
Principles of Consolidation. The consolidated financial statements
include those of the Company, its subsidiaries and partnerships in
which the Company has a controlling interest. Investments in
companies over which the Company has influence but not a controlling
interest are carried at equity. The effects of all significant
intercompany transactions have been eliminated.
The financial statements of IMS International, Inc. (IMS), Dun &
Bradstreet Software, Gartner Group, Inc. (Gartner Group) and
subsidiaries outside the United States and Canada reflect a fiscal
year ending November 30 to facilitate timely reporting of the
Company's consolidated financial results.
Cash Equivalents. Marketable securities that mature within 90 days of
purchase date are considered cash equivalents.
Unbilled Expenditures. These expenditures, which are included in
other current assets, represent costs to be expensed upon contract
completion and the cost of coupons purchased in connection with
clearing house activities, which are rebilled to customers.
Property, Plant and Equipment. Buildings and machinery and equipment
are depreciated over their estimated useful lives using principally
the straight-line method. Leasehold improvements are amortized on a
straight-line basis over the shorter of the term of the lease or the
estimated useful life of the improvement.
Investments. Other investments and notes receivable are carried at
cost, which approximates market, except for investments accounted for
under the equity method.
Other Assets. Deferred charges include prepaid pension costs and
assets of grantor trusts established to pay benefits for U.S.
supplemental pension plans. Certain computer software costs are
capitalized in accordance with Statement of Financial Accounting
Standards No. 86, "Accounting for the Costs of Computer Software to
be Sold, Leased, or Otherwise Marketed," and are reported at the
lower of unamortized cost or net realizable value. Other intangibles
result from acquisitions and database development. Computer software
and other intangibles are being amortized, using principally the
straight-line method, over three to five years and five to 15 years,
respectively. Goodwill represents the excess purchase price over the
fair value of identifiable net assets of businesses acquired and is
amortized on a straight-line basis over 10 to 40 years. At each
balance sheet date, the Company reviews the recoverability of goodwill
based on estimated undiscounted future cash flows from operating
activities compared with the carrying value of goodwill.
Unearned Subscription Income. Amounts billed for service and
subscriptions are credited to unearned subscription income and
reflected in operating revenue over the subscription term, which is
generally one year.
Earnings Per Share of Common Stock. Earnings per share are based on
the weighted average number of shares of common stock outstanding
during the year. The inclusion of shares issuable under stock options
in the calculation of earnings per share would not result in material
dilution.
Reclassifications. Certain prior-year amounts have been reclassified
to conform with the 1993 presentation.
F-26
<PAGE>
Note 2. Accounting Changes
During the first quarter of 1993, the Company adopted the provisions
of Statement of Financial Accounting Standards No. 106 (SFAS No.
106), "Employers' Accounting for Postretirement Benefits Other than
Pensions." The Statement requires the accrual of the projected
future cost of providing postretirement benefits during the period
that associates render the services necessary to be eligible for such
benefits. In prior years, this expense was recognized as claims were
paid.
The Company elected to immediately recognize the accumulated
postretirement benefit obligation ("APBO"). Measured as of January 1,
1993, the effect of adopting SFAS No. 106 was a one-time, non-cash,
after-tax charge of $140.6 million ($.79 per share).
During the third quarter of 1993, the Company adopted, retroactive to
January 1, 1993, Statement of Financial Accounting Standards No. 112
(SFAS No. 112), "Employers' Accounting for Postemployment Benefits"
and restated its first quarter results to reflect the change. SFAS
No. 112 requires that employers expense the costs of postemployment
benefits paid before retirement, principally severance benefits,
over the service lives of employees if certain conditions are met,
and must be adopted by all companies by 1994. Under the Company's
previous accounting policy, the total cost of such benefits was
expensed when the event occurred.
The initial effect of adopting SFAS No. 112 was a one-time, after-tax
charge of $250 million ($1.40 per share). There was no immediate
impact on cash as a result of this accounting change. As in the past,
the cash impact of such postemployment benefits will occur as payments
are made.
Ongoing operating expenses increased marginally as a result of
adopting SFAS No. 106 and SFAS No. 112.
F-27
<PAGE>
Note 3. Acquisitions
In 1993, 1992 and 1991, the Company acquired various companies in
separate transactions that were accounted for as purchases.
The aggregate purchase price of such acquisitions totaled
approximately $120 million in 1993. The largest acquisitions were
Soliditet, a provider of commercial-credit information in
Scandinavia, and Gartner Group, a provider of research, analysis and
advisory services to users and suppliers of information technology
systems and software.
The aggregate purchase price for acquisitions totaled approximately
$2 million and $20 million in 1992 and 1991, respectively.
The results of operations of all purchases are included in the
Consolidated Statement of Income from dates of acquisition. Had the
acquisitions made in 1991, 1992 and 1993 been consummated on
January 1 of the year preceding the year of acquisition, the results
of these acquired operations would not have had a significant impact
on the Company's consolidated results of operations for any of the
years presented.
F-28
<PAGE>
Note 4. Investment Partnerships
During 1993, three of the Company's subsidiaries contributed
assets and third-party investors contributed cash ($125 million)
to a limited partnership. One of the Company's subsidiaries
serves as general partner. All the other partners, including
the third-party investors, hold limited partner interests. The
partnership, which is a separate and distinct legal entity, is
in the business of licensing database assets and computer
software.
In addition, during 1993, the Company participated in the
formation of a limited partnership to invest in various
securities including those of the Company. One of the Company's
subsidiaries serves as managing general partner. Third-party
investors hold limited partner and special investors interests
totaling $500 million. The special investors are entitled to a
specified return on their investments. Funds raised by the
partnership provided a source of the financing for the Company's
repurchase of 8.3 million shares of its common stock.
For financial reporting purposes, the assets, liabilities,
results of operations and cash flows of the partnerships
described above are included in the Company's consolidated
financial statements. The third-parties investments in these
partnerships at December 31, 1993 totaled approximately $625
million and are reflected in other liabilities and minority
interests. Third-parties share of partnerships results of
operations, including specified returns, is reflected in other
income and expense-net.
F-29
<PAGE>
Note 5. Restructuring
In 1993, the Company recorded a $317.5 million restructuring charge
that was partially offset by one-time operating gains of $40.0
million, thereby resulting in a $277.5 million net restructuring
expense. 1993 results also included a $21.0 million non-operating
gain related to the initial public offering of the Gartner Group,
which reduced the impact of the restructuring charges to $256.5
million before-tax ($166.7 million after-tax). This charge,
represented an acceleration of the Company's ongoing efforts to
achieve long-term productivity improvements.
The $40.0 million operating gains related to the divestiture of
Donnelley Marketing Information Services, the redemption of
preferred shares received from the 1991 sale of Donnelley Marketing,
the redemption of notes related to the 1992 sale of Datastream
and the resolution of contingencies related to other divestitures.
The Company received $107.5 million in cash and notes with a fair
market value of $2.8 million related to the above transactions.
The $21.0 million gain in non-operating income-net related to the
initial public offering of Gartner Group, in which the Company holds
a majority interest.
Restructuring expense ($317.5 million) consisted of the costs to
consolidate the Company's data centers ($54.0 million), reduce
worldwide real estate costs ($117.2 million), consolidate back-office
accounting functions ($19.1 million), discontinue certain production
and data collection systems and products ($66.2 million) and initiate
work-force reductions (non-severance costs) and other actions ($61.0
million).
During 1992, the Company sold Datastream International and
Information Associates, a unit of Dun & Bradstreet Software and
initiated other actions to restructure certain operations and
businesses and to reduce costs and increase operating efficiencies.
The pre-tax costs associated with these actions essentially offset a
pre-tax gain of $106.9 million on the sales.
During 1991, the Company sold Donnelley Marketing and the
communications unit of IMS and initiated other actions to
restructure certain operations and businesses and to reduce costs
and increase operating efficiencies. The pre-tax costs associated
with these actions totaled $113 million and were largely offset by a
pre-tax net gain of $98 million on the divestitures.
In 1993, 1992 and 1991, certain restructuring actions initiated in
1992, 1991 and 1990 were completed at a lower cost than originally
estimated, and other actions required more costs to implement than
originally expected. In addition, costs to complete certain actions
being implemented changed based on revised estimates and experience
to date. In a number of instances, new restructuring actions were
initiated to complement or enhance original actions and certain
actions were expanded, contracted or discontinued based on changed
circumstances. While the total cost of all restructuring actions
remained unchanged, the changes in estimates and other changes did
impact operating income by business segment. (See Note 14 to the
Consolidated Financial Statements.)
F-30
<PAGE>
The Dun & Bradstreet Corporation and Subsidiaries
Notes to Consolidated Financial Statements continued
Dollar amounts in millions
Note 6. Postretirement Benefit Plans
The Company has defined benefit pension plans covering substantially
all associates in the United States. The benefits to be paid to
associates under these plans are based on years of credited service
and average final compensation. Pension costs are determined
actuarially and funded to the extent allowable under the Internal
Revenue Code. Supplemental plans in the United States are maintained
to provide retirement benefits in excess of levels allowed by ERISA.
The Company's non-U.S. subsidiaries provide retirement benefits for
associates consistent with local practices, primarily using defined
benefit or termination indemnity plans.
The components of net periodic pension cost are summarized as follows:
1993 1992 1991
___________________________________________________
Service Cost $42.2 $42.7 $37.8
Interest Cost 88.8 85.8 78.5
Actual Return on
Plan Assets (126.3) (80.1) (202.3)
Net Amortization
and Deferral 14.2 (30.5) 98.5
___________________________________________________
Net Periodic
Pension Cost $18.9 $17.9 $12.5
___________________________________________________
The status of defined benefit pension plans at December 31, 1993 and
1992, is as follows:
<TABLE>
<CAPTION>
Funded Unfunded
_______________ ________________________________
U.S.(1) Non-U.S.
_______________ ______________
<S> <C> <C> <C> <C> <C> <C>
1993 1992 1993 1992 1993 1992
_____________________________________________________________________________________________
Fair Value of Plan Assets $1,223.3 $1,157.6
Actuarial Present Value
of Benefit Obligations:
Vested Benefits $858.0 $750.7 $71.0 $49.8 $68.1 $65.1
Non-Vested Benefits 33.0 27.2 7.3 4.3 .6 1.1
______________________________________________________________________________________________
Accumulated Benefit
Obligations 891.0 777.9 78.3 54.1 68.7 66.2
Effect of Projected
Future Salary Increases 153.7 114.6 37.4 33.4 .2 .2
______________________________________________________________________________________________
Projected Benefit
Obligations 1,044.7 892.5 115.7 87.5 68.9 66.4
______________________________________________________________________________________________
Plan Assets in Excess of
(Less than) Projected
Benefit Obligations 178.6 265.1 (115.7) (87.5) (68.9) (66.4)
Unrecognized Net (Gain) Loss 49.2 (33.3) 38.7 21.9 (.4) (.7)
Unrecognized Prior Service Cost 26.7 21.1 19.0 19.3 .8 1.0
Unrecognized Net Transition
(Asset) Obligation (108.2) (124.4) 2.9 3.3 -- --
Adjustment to Recognize
Minimum Liability -- -- (23.2) (11.1) (.2) (.1)
_______________________________________________________________________________________________
Prepaid (Accrued) Pension Cost $146.3 $128.5 $(78.3) $(54.1) $(68.7) (66.2)
<FN>
1)Represents supplemental plans for which grantor trusts (with assets
of $60 and $49 million at December 31, 1993 and 1992,
respectively) have been established to pay plan benefits.
</TABLE>
The weighted average expected long-term rate of return on pension plan
assets was 9.75% for 1993, 1992 and 1991. At December 31, 1993 and
1992, the projected benefit obligations were determined using weighted
average discount rates of 7.37% (7.25% for U.S. plans) and 8.59%,
respectively, and weighted average rates of increase in future
compensation levels of 5.7% and 6.0%, respectively. Plan assets are
invested in diversified portfolios that consist primarily of equity
and debt securities.
In the third quarter of 1993, the Company recognized a curtailment
event resulting from an announced work-force reduction. At the same
time, the Company remeasured its projected benefit obligation,
reducing the discount rate. As a result, net curtailment gains of
approximately $2 million were recognized in 1993.
In addition to providing pension benefits, the Company provides various
health-care and life-insurance benefits for retired associates.
Substantially all of the Company's associates in the United States become
eligible for these benefits if they reach normal retirement age while
working for the Company. Certain of the Company's subsidiaries outside
the United States have postretirement benefit plans, although most
participants are covered by government-sponsored or -administered programs.
The cost of company-sponsored postretirement benefit plans outside the U.S.
is not significant.
F-31
<PAGE>
Note 6. Postretirement Benefit Plans (Cont'd.)
The components of net periodic postretirement benefit cost other than
pensions are summarized as follows:
1993
___________________________________
Service Cost $ 6.0
Interest Cost 18.3
Net Amortization
and Deferral (1.0)
_____
Net Periodic Postretirement
Benefit Cost $23.3
_____
In 1992 and 1991, the costs of providing these postretirement
benefits were expensed as paid and were not material to the Company's
results of operations in those years.
The status of postretirement benefit plans other than pensions at
December 31, 1993 is as follows:
1993
______________________________________________________
Actuarial Present Value of Benefit Obligation:
Retirees and Dependents $(150.8)
Active Associates - Eligible (31.8)
Active Associates - Not Yet Eligible (45.5)
_______________________________________________________
Accumulated Postretirement
Benefit Obligation (228.1)
Unrecognized Net (Gain) Loss 30.0
Unrecognized Prior Service Cost (Credit) (45.0)
_______________________________________________________
Accrued Postretirement Benefit Obligation $(243.1)
Benefits are paid as incurred from general corporate assets.
The accumulated postretirement benefit obligation at December 31,
1993 was determined using a discount rate of 7.25%. The assumed rate
of future increases in per capita cost of covered health-care benefits
was 12% for 1993, and is 11.3% in 1994, decreasing gradually to 6.0%
for the year 2021 and remaining constant thereafter. Increasing the
assumed health-care cost trend rate by one percentage point in each
year would increase the accumulated postretirement benefit obligation
by $28.5 million and would increase annual aggregate service and
interest costs by $3.4 million.
In the third quarter of 1993, the Company recognized a curtailment
event resulting from an announced work-force reduction. At the same
time, the Company remeasured its accumulated postretirement benefit
obligation, reducing the discount rate from 8.5% to 7.25%. In the
fourth quarter of 1993, the Company amended its postretirement benefit
plan, reflecting increased retiree cost-sharing provisions and
providing limits on the Company's future obligation to absorb health-
care cost inflation. The aggregate effect of these items was to
reduce 1993 net periodic postretirement benefit cost by approximately
$2.3 million.
F-32
<PAGE>
<TABLE>
The Dun & Bradstreet Corporation and Subsidiaries
Notes to Consolidated Financial Statements continued
Dollar amounts in millions, except per share data
<CAPTION>
Note 7. Employee Stock Plans
The Company has granted options to certain associates, under its
Key Employees Stock Option Plans, to purchase shares of its common
stock at the market price on the date of the grant. Options
outstanding at December 31, 1993 were granted during the years 1984
through 1993 and are exercisable over periods ending not later than
2003. At December 31, 1993, 1992 and 1991, options for 3,556,944,
3,285,149 and 2,878,564 shares of common stock were exercisable and
3,467,164, 5,097,281 and 6,731,003 shares were available for future
grants under the plans.
Changes in stock options for the three years ended December 31, 1993
are summarized as follows:
Option Price
Shares Per Share ($) Total
<S> <C> <C> <C>
Options outstanding, January 1, 1991 4,948,698 7.57 to 67.00 $216.7
Granted 1,621,173 44.63 to 50.63 81.9
Exercised (358,064) 7.57 to 55.38 (11.8)
Surrendered or Expired (261,441) 32.38 to 62.50 (12.4)
_______________________________________________________________________________
Options outstanding, December 31, 1991 5,950,366 11.16 to 67.00 274.4
Granted 1,646,652 51.88 to 57.75 95.1
Exercised (575,960) 11.16 to 55.38 (23.5)
Surrendered or Expired (172,859) 41.50 to 67.00 (8.6)
_______________________________________________________________________________
Options outstanding, December 31, 1992 6,848,199 11.16 to 62.50 337.4
Granted 1,757,578 56.75 to 62.25 109.0
Exercised (951,936) 11.16 to 57.75 (42.7)
Surrendered or Expired (209,675) 41.50 to 62.50 (11.2)
______________________________________________________________________________
Options outstanding, December 31, 1993 7,444,166 11.16 to 62.50 $392.5
______________________________________________________________________________
Options which became exercisable during:
1991 814,462 41.50 to 67.00 $ 37.6
1992 1,047,869 41.50 to 58.38 $ 49.2
1993 1,231,406 41.50 to 58.38 $ 61.0
______________________________________________________________________________
</TABLE>
All proceeds from options exercised are credited to treasury stock.
Any tax benefit to the Company resulting from the exercise of options
is credited to capital in excess of par value. There have been no
charges to income with respect to any stock options.
The plans also provide for the granting of stock appreciation rights
and limited stock appreciation rights in tandem with stock options,
to certain key associates. At December 31, 1993, there were no stock
appreciation rights attached to stock options; however, 1,456,595
limited stock appreciation rights were outstanding, which are
exercisable only if, and to the extent that, the related option is
exercisable and only upon the occurrence of specified contingent
events.
In 1991, Dun & Bradstreet Software (DBS), a wholly owned subsidiary
of the Company, adopted a stock option plan which granted options for
5% of the authorized shares of DBS to its key associates. The options
are exercisable at the fair market value of DBS common stock at the
date of grant, and may be exercised only on the fourth anniversary
of the grant.
Under the 1989 Key Employees Restricted Stock Plan, key associates
may be granted restricted shares of the Company's stock. The plan
provides for the granting of up to 1,800,000 shares of the Company's
common stock prior to December 31, 1998. During 1993, 1992 and 1991,
102,540, 72,713 and 51,300 restricted shares, respectively, were
awarded under the plan. Forfeitures in 1993, 1992 and 1991 totaled
8,652, 829 and 11,204, respectively. The restrictions on the
majority of such shares lapse over a period of three years from the
date of the grant and compensation expense is charged to operations
over a service period of six years.
F-33
<PAGE>
Dollar amounts in millions
Note 8. Income Taxes
Income before provision for income taxes consisted of:
1993 1992 1991
________________________________________
U.S. $367.6 $548.1 $511.0
Non-U.S. 220.4 247.1 226.3
________________________________________
$588.0 $795.2 $737.3
The provision (benefit) for income taxes consisted of:
1993 1992 1991
_____________________________________________________________
Current tax provision:
U.S. Federal $208.9 $138.4 $38.9
State and Local 73.8 50.2 49.7
Non-U.S. 101.0 78.2 82.4
______________________________________________________________
383.7 266.8 171.0
Deferred tax (benefit) provision:
U.S. Federal (179.4) 18.2 52.0
State and Local (16.5) 4.8 15.9
Non-U.S. (28.5) (48.1) (8.1)
_______________________________________________________________
(224.4) (25.1) 59.8
_______________________________________________________________
$159.3 $241.7 $230.8
_______________________________________________________________
The following table summarizes the significant differences between the
U.S. Federal statutory tax rate and the Company's effective tax rate
for financial statement purposes.
1993 1992 1991
______________________________________________________________________
Statutory tax rate 35.0% 34.0% 34.0%
State and Local income taxes,
net of U.S. Federal tax benefit 6.4 4.6 5.9
Non-U.S. taxes (.9) (6.8) (.9)
Recognition of capital loss (15.2) (1.8) (1.9)
Other 1.8 .4 (5.8)
_______________________________________________________________________
Effective tax rate 27.1% 30.4% 31.3%
_______________________________________________________________________
Income taxes paid were approximately $236 million, $223 million and
$212 million in 1993, 1992 and 1991, respectively. Income taxes
refunded were approximately $10 million, $16 million and $117 million
in 1993, 1992 and 1991, respectively.
Deferred tax assets (liabilities) are comprised of the following at
December 31:
1993 1992
____________________________________________________________________
Deferred Tax Assets:
Postemployment Benefits $133.9 $ 0
Restructuring Costs 126.9 52.4
Postretirement Benefits 99.9 0
Tax Benefit of Operating Losses 75.6 81.0
Bad Debts 31.2 20.0
Intangibles 24.7 55.8
Other 11.7 9.7
____________________________________________________________________
503.9 218.9
Valuation Allowance (73.1) (72.7)
____________________________________________________________________
430.8 146.2
____________________________________________________________________
Deferred Tax Liabilities:
Intangibles (182.9) (159.4)
Depreciation (72.8) (40.1)
Revenue Recognition (62.9) (38.8)
Other (1.7) (5.6)
_____________________________________________________________________
(320.3) (243.9)
_____________________________________________________________________
Net Deferred Tax Asset (Liability) $110.5 $(97.7)
_____________________________________________________________________
Undistributed earnings of non-U.S. subsidiaries aggregated
approximately $732 million at December 31, 1993. Deferred tax
liabilities have not been recognized for these undistributed earnings
because it is management's intention to reinvest such undistributed
earnings outside the U.S. If all undistributed earnings were
remitted to the U.S., the amount of U.S. Federal income taxes payable
would not be material; however, withholding taxes, imposed by certain
non-U.S. countries, would total approximately $50 million.
During 1987 and 1988, the Company entered into tax-sharing agreements
with an Alaska Native Corporation (ANC), under which the Company
acquired income tax benefits related to certain net operating losses
(NOLs) of the ANC. The Company has included in accrued and other
current liabilities the estimated liabilities ($166.4 million)
related to the ANC transactions. The ANC obligation accrues interest,
and has been collateralized by a $131.4 million letter of credit.
During the three-year period ended December 31, 1983, the Company
invested $305 million in tax-leasing transactions, varying in length
from 4.5 to 25 years. These leases provided the Company with
significant benefits from tax deductions in excess of taxable income
for Federal income tax purposes.
F-34
<PAGE>
Note 8. Income Taxes (Continued)
At December 31, 1993 and 1992, tax-leasing benefits received to date
exceeded the original investment by $91 million and $106 million,
respectively. These amounts are included in other liabilities and
minority interests. In future years, taxable income will exceed
deductions, which will result in a decline in the balance in other
liabilities and minority interests.
F-35
<PAGE>
The Dun & Bradstreet Corporation and Subsidiaries
Notes to Consolidated Financial Statements continued
Dollar amounts in millions
Note 9. Notes Payable
Notes payable consisted of the following at December 31:
1993 1992
______________________________________________
Commercial Paper $82.9 $117.8
Bank Notes 6.2 10.5
Other 2.9 7.8
______________________________________________
$92.0 $136.1
______________________________________________
The Company has short-term borrowing agreements with several banks to
provide up to $500 million of borrowings, all of which support a
commercial paper program. At December 31, 1993, $417 million was
available to the Company under these agreements. The Company also had
other unused lines of credit of $79 million at December 31, 1993, all
of which were in the form of non-U.S. credit facilities. None of
these arrangements had material commitment fees or compensating
balance requirements.
F-36
<PAGE>
Note 10. Lease Commitments
Certain of the Company's operations are conducted from leased
facilities, which are under operating leases that expire over the
next two to 10 years. Rental expense under real estate operating
leases for the years 1993, 1992 and 1991 was $168.9 million, $176.6
million, and $171.5 million, respectively. The approximate minimum
annual rental expense for real estate operating leases that have
remaining noncancelable lease terms in excess of one year, net of
sublease rentals, at December 31, 1993, was (in millions): 1994 -
$146.4; 1995 - $121.1; 1996 - $96.6; 1997 - $73.0; 1998 - $63.6; and
an aggregate of $174.6 million thereafter.
The Company also leases certain computer and other equipment under
operating leases that expire over the next three to five years.
These leases are frequently renegotiated or otherwise changed as
advancements in computer technology produce opportunities to lower
costs and improve performance. Rental expense under computer and
other equipment leases was $96.8 million, $91.1 million and $88.2
million for 1993, 1992 and 1991, respectively. At December 31,
1993, the approximate minimum annual rental expense for computer and
other equipment under operating leases and related agreements that
have remaining noncancelable lease terms in excess of one year was
(in millions): 1994 - $69.5; 1995 - $43.8; 1996 - $27.0; 1997 -
$11.5; 1998- $4.9.
In connection with the Company's acceleration of its ongoing efforts
to achieve long-term productivity improvements, the Company intends
to terminate a significant number of computer equipment and real
estate leases (See Note 5 to the Consolidated Financial Statements).
The estimated costs to terminate such leases have been included in
accrued restructuring costs.
F-37
<PAGE>
Note 11. Capital Stock
In October 1993, the Board of Directors authorized the Company to
purchase up to 10 million shares of its common stock. During 1993,
8.3 million shares were repurchased under this share-repurchase
program.
In October 1988, the Company adopted a Shareowners' Rights Plan.
The plan is intended to protect the shareowners' interests in the
event of an unsolicited attempt to acquire the Company. The plan is
not intended to prevent a takeover of the Company on terms that are
favorable and fair to all shareowners and will not interfere with a
merger approved by the Board of Directors.
Under the plan, each share of the Company's common stock has a right
which trades with the stock until the right becomes exercisable.
Each right entitles the shareowners to buy 1/100 of a share of Series
A participating preferred stock at a purchase price of $230, subject
to adjustment. The rights will not be exercisable until a person or
group (Acquiring Person) acquires beneficial ownership of, or
commences a tender offer for, 20% or more of the Company's
outstanding common stock.
In the event the Company is acquired in a merger or other business
combination, or subject to other transactions, as described in the
Shareowners' Rights Plan, each right will entitle its holder (other
than the Acquiring Person) to receive upon exercise, stock with a
value of two times the exercise price in the form of the Company's
common stock or where appropriate, the Acquiring Person's common
stock. The Company may redeem the rights, which expire in October
1998, for $.01 per right, under certain circumstances.
The shareowners have authorized the issuance of 10 million shares of
$1 par value preferred stock. The preferred stock can be issued with
varying terms, as determined by the Board of Directors. Under
certain circumstances, the Company may not issue voting stock or
securities convertible into voting stock of the Company without
shareowner approval.
F-38
<PAGE>
Note 12. Litigation
The Company and its subsidiaries are involved in legal proceedings,
claims and litigation arising in the ordinary course of business.
In addition, in March and April 1989, five purported class actions
were commenced by certain shareowners (the "Shareowner Class
Actions")against the Company and up to three members of its Board
of Directors (two of whom are also officers) in various United
States District Courts, each alleging violations of the federal
securities laws and seeking unspecified damages arising out of an
asserted failure to make public disclosure of information relating
to allegedly improper practices (the "alleged practices") of the
Company's wholly owned subsidiary, Dun & Bradstreet, Inc., in
connection with the selling of commercial-credit information
services. The Shareowner Class Actions were later consolidated in
the United States District Court for the Southern District of New
York.
In February 1990, an amended consolidated Shareowner Class Action
complaint was served on the defendants, alleging additional
violations of the securities laws arising out of an asserted failure
to make public disclosure of the effect that the alleged practices
would have on the Company's future sales and income, and in September
1992, the District Judge granted a motion to permit this Action to be
maintained as a class action.
On April 16, 1993, attorneys for the defendants and attorneys for the
plaintiffs entered into a memorandum of intent to settle the
Shareowner Class Action for an amount between $15 million and $20
million. On January 14, 1994, a judgment was entered by the Court
approving the proposed settlement. The exact amount of the settlement
will depend on the monetary amount of claims filed by shareowners who
are part of the class.
As a result of contribution to the settlement by the Company's
insurance carrier and provisions previously recorded by the Company,
the amount of the settlement did not materially affect the Company's
earnings.
On June 9, 1993, American Credit Indemnity ("ACI"), a company of
which the Company owns 95 percent of the outstanding common stock,
received a summons and a consolidated amended class action complaint
(the "Amended Complaint") in a purported class action pending in the
United States District Court for the Southern District of New York
captioned "In re Towers Financial Corporation Noteholders
Litigation." The Amended Complaint names 17 defendants, including
Towers Financial Corporation ("Towers") and various subsidiaries and
controlling persons of Towers, as well as ACI, in addition to a
"Broker-Dealer Defendant Class," alleged to consist of more than 75
members. The Amended Complaint is brought by an alleged class of
persons who bought promissory notes issued by Towers between February
15, 1989 and February 9, 1993. It alleges that Towers, now operating
under Chapter 11 of the Bankruptcy Code, sold nearly $215 million of
such notes to more than 2,800 investors and seeks damages from all
the defendants in at least that amount, as well as punitive damages.
The claims against ACI assert negligent misrepresentation, negligence
and fraud under common law and violations of Section 10(b) (and Rule
10b-5 thereunder) of the Securities Exchange Act of 1934. The Amended
Complaint alleges that offering documents for the notes
mischaracterized insurance policies issued by ACI to Towers with
respect to accounts receivable securing or backing the notes. It
further alleges that ACI issued policies with limited scope of
coverage and for exorbitant premiums with knowledge that they would
be used by Towers to fraudulently market the notes. ACI has denied
the material allegations of the Amended Complaint and intends to
defend vigorously against it.
In the opinion of management, the outcome of all current proceedings,
claims and litigation could have a material effect on quarterly or annual
operating results when resolved in a future period. However, in the
opinion of management, these matters will not materially affect the
Company's consolidated financial position.
F-39
<PAGE>
The Dun & Bradstreet Corporation and Subsidiaries
Notes to Consolidated Financial Statements continued
Dollar amounts in millions
Note 13. Supplemental Financial Data
Accounts Receivable - Net:
1993 1992
________________________________________________
Trade $1,090.4 $1,105.2
Less: allowance for
doubtful accounts (79.2) (82.4)
________________________________________________
1,011.2 1,022.8
Other 67.7 87.4
________________________________________________
$1,078.9 $1,110.2
________________________________________________
Other Current Assets:
1993 1992
_____________________________________________
Unbilled expenditures $ 61.9 $117.8
Deferred taxes 196.4 54.0
Prepaid expenses 97.7 90.1
Inventories 18.9 18.8
_____________________________________________
$374.9 $280.7
_____________________________________________
Property, Plant and Equipment - Net, carried at cost,less
accumulated depreciation and amortization:
1993 1992
_____________________________________________
Buildings $409.4 $394.4
Machinery and Equipment 1,266.7 1,240.7
_____________________________________________
1,676.1 1,635.1
Less: accumulated
depreciation 923.8 884.1
_____________________________________________
752.3 751.0
Leasehold improvements,
less:
accumulated amortization
of $100.9 and $88.8 60.1 64.7
Land 48.7 49.1
_____________________________________________
$861.1 $864.8
_____________________________________________
Computer Software, Other Intangibles and Goodwill:
Computer Other Goodwill
Software Intangibles
_______________________________________________________
January 1,1992 $263.2 $183.2 $961.2
Additions at cost 91.2 69.4 0
Amortization (90.1) (24.4) (37.6)
Other deductions and
reclassifications (17.5) (.1) (90.2)
_____________________________________________________
December 31,1992 $246.8 $228.1 $833.4
Additions at cost 149.4 53.5 198.4
Amortization (92.2) (25.5) (38.8)
Other deductions and
reclassifications (9.5) (41.4) (50.6)
______________________________________________________
December 31,1993 $294.5 $214.7 942.4
______________________________________________________
Accounts and Notes Payable:
1993 1992
____________________________________________
Trade $77.1 $78.7
Customer advances 138.1 196.7
Taxes other than
income taxes 34.9 32.6
Notes 92.0 136.1
Other 29.7 29.6
____________________________________________
$371.8 $473.7
____________________________________________
Accrued and Other Current Liabilities:
1993 1992
____________________________________________
Salaries, wages, bonuses
and other compensation $237.2 $214.7
Profit-sharing 31.4 36.0
Deferred revenues on
uncompleted contracts 252.2 193.4
Postemployment benefits 200.0 0
Restructuring costs 187.1 127.0
Other 653.6 409.4
_____________________________________________
$1,561.5 $980.5
_____________________________________________
F-40
<PAGE>
<TABLE>
Dollar amounts in millions
Note 14. Operations by Business Segments
Financial information for each of the Company's
five segments is set forth below:
<CAPTION>
Risk Management(2)
and Business
Marketing(1) Marketing Directory Other
Information Information Software Information Business
Services Services Services Services Services Total
__________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Year Ended December 31, 1993
Operating Revenue $1,868.3 $1,564.2 $ 475.6 $ 450.7 $ 351.6 $4,710.4
Restructuring
(Expense) Income - Net(3) $ (53.0) $ (97.0) $ (68.3) $ (14.9) $ (3.2) $ (236.4)(4)
Segment Operating Income (Loss) $ 243.5 $ 307.6 $ (24.6) $ 170.3 $ 24.8 $ 721.6
General Corporate Expenses (169.1)(4)
Non-Operating Income - Net 35.5
__________________________________________________________________________________________________________________
Income Before Provision for Income
Taxes and Accounting Changes $ 588.0
Segment Depreciation
and Amortization(5) $ 153.3 $ 87.6 $ 76.7 $ 15.8 $ 29.2 $ 362.6
Segment Capital Expenditures $ 109.6 $ 60.3 $ 33.5 $ 9.6 $ 13.1 $ 226.1
Identifiable Assets at
December 31, 1993 $1,641.1 $1,393.5 $ 629.9 $ 500.6 $ 426.9 $4,592.0
__________________________________________________________________________________________________________________
Year Ended December 31, 1992
Operating Revenue $1,893.9 $1,520.6 $ 533.5 $ 419.4 $ 383.3 $4,750.7
Restructuring
(Expense) Income - Net(3) $ (45.5) $ (8.6) $ (37.9) $ (7.3) $ 99.4 $ .1(4)
Segment Operating Income (Loss) $ 257.2 $ 371.0 $ (19.2) $ 154.0 $ 149.8 $ 912.8
General Corporate Expenses (126.9)(4)
Non-Operating Income - Net 9.3
__________________________________________________________________________________________________________________
Income Before Provision for Income Taxes $ 795.2
Segment Depreciation
and Amortization(5) $ 150.6 $ 87.0 $ 81.2 $ 15.0 $ 33.3 $ 367.1
Segment Capital Expenditures $ 96.1 $ 49.4 $ 21.2 $ 6.4 $ 19.6 $ 192.7
Identifiable Assets at
December 31, 1992 $1,580.1 $1,159.2 $ 702.0 $ 473.6 $ 415.5 $4,330.4
__________________________________________________________________________________________________________________
Year Ended December 31, 1991
Operating Revenue $1,831.7 $1,397.2 $ 556.9 $ 463.1 $ 402.1 $4,651.0
Restructuring
Income (Expense) - Net(3) $ 77.0 $ (34.5) $ (13.6) $ (33.3) $ (.7) $ (5.1)(4)
Segment Operating Income $ 362.5 $ 250.4 $ 29.2 $ 175.6 $ 36.1 $ 853.8
General Corporate Expenses (109.5)(4)
Non-Operating Expense - Net (7.0)
Income Before Provision for Income Taxes $ 737.3
Segment Depreciation
and Amortization(5) $ 135.4 $ 81.0 $ 78.4 $ 13.2 $ 34.2 $ 342.2
Segment Capital Expenditures $ 78.7 $ 82.0 $ 25.7 $ 9.2 $ 25.1 $ 220.7
Identifiable Assets at
December 31, 1991 $1,399.5 $1,196.6 $ 784.0 $ 502.1 $ 562.3 $4,444.5
__________________________________________________________________________________________________________________
<FN>
(1) Nielsen Marketing Research's operating revenue was $1,051.8 in
1993, $1,123.8 in 1992 and $1,025.7 in 1991.
(2) Operating revenue from worldwide credit services was $907.5 in
1993, $853.9 in 1992 and $795.9 in 1991.
(3) See Note 5 to the Consolidated Financial Statements.
(4) General Corporate Expenses include $41.1, $.1 and $9.9 of
restructuring expense in 1993, 1992 and 1991, respectively.
(5) Includes depreciation and amortization of Property, Plant and
Equipment, Computer Software, Other Intangibles and Goodwill.
F-41
</TABLE>
<PAGE>
The Dun & Bradstreet Corporation and Subsidiaries
Note 14 continued
Note 14. Operations by Business Segments (continued)
Directory Information Services' operating revenue includes $110.2
million, $119.3 million and $133.1 million in 1993, 1992 and 1991,
respectively, relating to the Company's share of earnings of DonTech,
a partnership with Ameritech Advertising Services, Inc. As of
December 31, 1993, DonTech assets and liabilities were as follows:
current assets, $174.9 million; other assets, $32.8 million; current
liabilities, $13.7 million. DonTech's December 31, 1992 assets and
liabilities were as follows: current assets, $173.6 million; other
assets, $22.5 million; current liabilities, $10.6 million; other
liabilities, $8.9 million. In 1993, DonTech's revenues totaled
$382.8 million compared to $387.9 million and $394.6 million in 1992
and 1991, respectively. Pre-tax income was $175.0 million, $192.3
million and $208.4 million in 1993, 1992 and 1991, respectively.
At December 31, 1993 and 1992, the Company's investment in DonTech
was $194.0 million and $176.6 million, respectively.
Non-operating assets of $578.4 million, $584.5 million and $384.2
million at December 31, 1993, 1992 and 1991, respectively, included
primarily cash and cash equivalents, marketable securities, other
investments and deferred income taxes. These assets are not
identified with business segments and represent the reconciling
item between the identifiable assets shown and the Company's total
assets.
F-42
<PAGE>
<TABLE>
Dollar amounts in millions
Note 15. Operations by Geographic Area
Financial information by geographic area is summarized as follows.
Inter-area sales were not significant.
<CAPTION>
Other
United States Europe Non-U.S. Total
<S> <C> <C> <C> <C>
1993
Operating Revenue $2,938.9 $1,267.7 $503.8 $4,710.4
Restructuring
Income (Expense) - Net(1) $ (215.8) $ (45.7) $(16.0) $ (277.5)
Operating Income $ 368.0 $ 120.0 $ 64.5 $ 552.5
Identifiable Assets $2,754.9 $1,448.6 $388.5 $4,592.0
_______________________________________________________________________________
1992
Operating Revenue $2,845.8 $1,418.6 $486.3 $4,750.7
Restructuring
Income (Expense) - Net(1) $ 31.7 $ (29.2) $ (2.5) $ 0
Operating Income $ 560.4 $ 159.5 $ 66.0 $ 785.9
Identifiable Assets $2,691.8 $1,291.1 $347.5 $4,330.4
_________________________________________________________________________________
1991
Operating Revenue $2,806.8 $1,363.0 $481.2 $4,651.0
Restructuring
Income (Expense) - Net(1) $ 6.1 $ (17.6) $ (3.5) $ (15.0)
Operating Income $ 541.8 $ 140.7 $ 61.8 $ 744.3
Identifiable Assets $2,802.8 $1,266.0 $375.7 $4,444.5
_________________________________________________________________________________
<FN>
(1) See Note 5 to the Consolidated Financial Statements.
</TABLE>
F-43
<PAGE>
<TABLE>
Dollar amounts in millions, except per share data
Note 16. Quarterly Financial Data (Unaudited)
<CAPTION>
Three Months Ended
_______________________________________________________
March 31 June 30 September 30 December 31 Year
___________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
1993 Operating Revenue $1,071.4 $1,161.6 $1,158.0 $1,319.4 $4,710.4
Restructuring Expense - Net $ - $ - $ - $(277.5) $ (277.5)
Operating Income (Loss) $ 140.5 $ 191.6 $ 228.7 $ (8.3) $ 552.5
Income Before Cumulative
Effect of Accounting Changes,
Net of Income Taxes $ 105.2 $ 138.8 $ 158.5 $ 26.2 $ 428.7
Net (Loss) Income $ (285.4) $ 138.8 $ 158.5 $ 26.2 $ 38.1
Earnings Per Share Before
Cumulative Effect of
Accounting Changes (1) $.59 $.78 $.89 $.15 $2.42(2)
_____________________________________________________________________________________________
1992
Operating Revenue $1,108.4 $1,163.7 $1,190.4 $1,288.2 $4,750.7
Operating Income $ 143.4 $ 184.9 $ 216.0 $ 241.6 $ 785.9
Net Income $ 98.2 $ 128.8 $ 150.0 $ 176.5 $ 553.5
Earnings Per Share $.55 $.72 $.84 $.99 $3.10
(1) The sum of the quarterly earnings per share amounts in 1993
is not equal to the full year because the computations of the
weighted average number of shares outstanding for each quarter and
for the full year are made independently.
(2) Includes $277.5 million restructuring expense and $21.0 million
gain from Gartner Group's sale of stock (totaling $256.5 million
pre-tax and $166.7 million after-tax) which reduced earnings per
share by $.94.
F-44
<PAGE>
</TABLE>
<TABLE>
The Dun & Bradstreet Corporation and Subsidiaries
Ten-Year Selected Financial Data
<CAPTION>
All amounts except per share data, average number
of shares outstanding and percentages are shown
in millions of dollars 1993 1992 1991 1990 1989
_________________________________________________________ _______ _______ _______ _______
<S> <C> <C> <C> <C> <C>
Continuing Operations:
Operating Revenue 4,710.4 4,750.7 4,651.0 4,837.3 4,318.9
Costs and Expenses(1) 4,157.9 3,964.8 3,906.7 4,050.4 3,455.8
_________________________________________________________ _______ _______ _______ _______
Operating Income 552.5 785.9 744.3 786.9 863.1
Non-Operating Income(Expense) - Net 35.5 9.3 (7.0) (19.1) 49.0
_________________________________________________________ _______ _______ _______ _______
Income from Continuing Operations
Before Provision for Income Taxes 588.0 795.2 737.3 767.8 912.1
Provision for Income Taxes 159.3 241.7 230.8 261.1 327.9
_________________________________________________________ _______ _______ _______ _______
Income from Continuing Operations 428.7 553.5 506.5 506.7 584.2
Income from Discontinued Operations,
Net of Income Taxes 0 0 0 0 0
_________________________________________________________ _______ _______ _______ _______
Income from Operations, Net of Income Taxes(2) 428.7 553.5 506.5 506.7 584.2
_________________________________________________________ _______ _______ _______ _______
Cumulative Effect of Accounting Changes(3) (390.6) 0 0 0 (31.9)
_________________________________________________________ _______ _______ _______ _______
Net Income 38.1 553.5 506.5 506.7 552.3
_________________________________________________________ _______ _______ _______ _______
Dividends 423.0 401.3 383.9 379.1 361.9
_________________________________________________________ _______ _______ _______ _______
Earnings Per Share of Common Stock:
Continuing Operations 2.42(4) 3.10 2.84 2.79 3.13
Discontinued Operations .00 .00 .00 .00 .00
_________________________________________________________ _______ _______ _______ _______
Income from Operations(2) 2.42(4) 3.10 2.84 2.79 3.13
_________________________________________________________ _______ _______ _______ _______
Cumulative Effect of Accounting Changes(3) (2.19) .00 .00 .00 (.17)
_________________________________________________________ _______ _______ _______ _______
Total .23 3.10 2.84 2.79 2.96
_________________________________________________________ _______ _______ _______ _______
Dividends Per Share 2.40 2.25 2.15 2.09 1.935
_________________________________________________________ _______ _______ _______ _______
Average Number of Shares Outstanding(in millions) 177.2 178.3 178.6 181.6 186.9
_________________________________________________________ _______ _______ _______ _______
As a Percentage of Operating Revenue:
Operating Income 17.6(5) 16.5 16.0(1) 16.3 20.0
Income from Operations, Net of Income Taxes 12.6(6) 11.7 10.9 10.5 13.5
_________________________________________________________ _______ _______ _______ _______
Return on Average Shareowners' Equity % 34.6(6) 26.1 25.2(1) 24.7 28.1
_________________________________________________________ _______ _______ _______ _______
Shareowners' Equity 1,111.3 2,156.0 2,123.1 2,044.1 2,150.6
_________________________________________________________ _______ _______ _______ _______
Total Assets 5,170.4 4,914.9 4,828.7 4,810.3 5,264.5
_________________________________________________________ _______ _______ _______ _______
<FN>
(1)Includes impact of $277.5, $15.0, $32.1, $35.3 and $50.7 million of
restructuring expense - net in 1993, 1991, 1988, 1987 and 1986
respectively.
(2)Excludes net gains (losses) from disposals of discontinued operations
and the redeployment program of $12.5, ($.6), and $265.7 million, or
$.07, $.00 and $1.43 per share, in 1987, 1986 and 1984, respectively.
(3)Includes impact of $250.0 million or $1.40 per share for the
adoption of SFAS No. 112 and $140.6 million or $.79 per share
for the adoption of SFAS No. 106 in 1993. (See Note 2 to the
Consolidated Financial Statements.)
(4)$3.36 excluding $277.5 million restructuring expense and $21.0
million gain from Gartner Group's sales of stock (totaling $256.5
million pre-tax and $166.7 million after-tax).
(5)Excludes net restructuring expense of $277.5 million described in
Note 5.
(6)Excludes $277.5 million restructuring expense and $21.0 million gain
from Gartner Group's sale of stock (totaling $256.5 million pre-tax
and $166.7 million after-tax) described in Note 5 and the impact of
the cumulative effect of the accounting changes described in Note 2.
Including net restructuring expense of $166.7 million after-tax,
Return on Average Shareowner's Equity is 24.9%.
F-45
</TABLE>
<PAGE>
<TABLE>
Ten-Year Selected Financial Data
(CONTINUED)
<CAPTION>
All amounts except per share data, average number
of shares outstanding and percentages are shown
in millions of dollars 1988 1987 1986 1985 1984
_________________________________________________________ _______ _______ _______ _______
<S> <C> <C> <C> <C> <C>
Continuing Operations:
Operating Revenue 4,267.4 3,788.5 3,463.2 3,022.0 2,624.6
Costs and Expenses(1) 3,497.7 3,098.6 2,859.8 2,483.7 2,181.8
_________________________________________________________ _______ _______ _______ _______
Operating Income 769.7 689.9 603.4 538.3 442.8
Non-Operating Income(Expense) - Net 21.0 43.9 43.5 42.3 44.2
_________________________________________________________ _______ _______ _______ _______
Income from Continuing Operations
Before Provision for Income Taxes 790.7 733.8 646.9 580.6 487.0
Provision for Income Taxes 291.7 295.4 270.0 257.3 210.5
_________________________________________________________ _______ _______ _______ _______
Income from Continuing Operations 499.0 438.4 376.9 323.3 276.5
Income from Discontinued Operations,
Net of Income Taxes 0 .6 2.3 1.5 4.1
_________________________________________________________ _______ _______ _______ _______
Income from Operations, Net of Income Taxes(2) 499.0 439.0 379.2 324.8 280.6
_________________________________________________________ _______ _______ _______ _______
Cumulative Effect of Accounting Changes(3) 0 0 0 0 0
_________________________________________________________ _______ _______ _______ _______
Net Income 499.0 439.0 379.2 324.8 280.6
_________________________________________________________ _______ _______ _______ _______
Dividends 288.1 226.8 193.2 164.5 126.1
_________________________________________________________ _______ _______ _______ _______
Earnings Per Share of Common Stock:
Continuing Operations 2.67 2.36 2.03 1.74 1.49
Discontinued Operations .00 .00 .01 .01 .02
_________________________________________________________ _______ _______ _______ _______
Income from Operations(2) 2.67 2.36 2.04 1.75 1.51
_________________________________________________________ _______ _______ _______ _______
Cumulative Effect of Accounting Changes(3) .00 .00 .00 .00 .00
_________________________________________________________ _______ _______ _______ _______
Total 2.67 2.36 2.04 1.75 1.51
_________________________________________________________ _______ _______ _______ _______
Dividends Per Share 1.68 1.445 1.235 1.06 .905
_________________________________________________________ _______ _______ _______ _______
Average Number of Shares Outstanding(in millions) 187.1 186.1 185.9 185.7 185.5
_________________________________________________________ _______ _______ _______ _______
As a Percentage of Operating Revenue:
Operating Income 18.0(1) 18.2(1) 17.4(1) 17.8 16.9
Income from Operations, Net of Income Taxes 11.7 11.6 10.9 10.7 10.7
_________________________________________________________ _______ _______ _______ _______
Return on Average Shareowners' Equity % 25.2(1) 25.0(1) 24.4(1) 23.6 23.0
_________________________________________________________ _______ _______ _______ _______
Shareowners' Equity 2,093.2 1,899.3 1,650.9 1,474.0 1,311.8
_________________________________________________________ _______ _______ _______ _______
Total Assets 5,023.8 3,753.7 3,484.0 2,949.5 2,486.8
_________________________________________________________ _______ _______ _______ _______
F-45
</TABLE>
EXHIBIT E
BY-LAWS OF
THE DUN & BRADSTREET CORPORATION
December 15, 1993
THE DUN & BRADSTREET CORPORATION BY-LAWS
ARTICLE I.
STOCKHOLDERS.
Section 1. The annual meeting of the stockholders of the
corporation for the purpose of electing directors and for
the transaction of such other business as may properly be
brought before the meeting shall be held on such date, and
at such time and place within or without the State of
Delaware as may be designated from time to time by the Board
of Directors.
Section 2. Special meetings of the stockholders may be held
upon call of the Board of Directors, the Chairman of the
Board or the President (and shall be called by the Chairman
of the Board or the President at the request in writing of
stockholders owning a majority of the outstanding shares of
the corporation entitled to vote at the meeting) at such time
and at such place within or without the State of Delaware,
as may be fixed by the Board of Directors, the Chairman of
the Board or the President or by the stockholders owning a
majority of the outstanding shares of the corporation so
entitled to vote, as the case may be, and as may be stated
in the notice setting forth such call.
Section 3. Except as otherwise provided by law, notice of
the time, place and purpose or purposes of every meeting
of stockholders shall be delivered personally or mailed
not earlier than sixty, nor less than ten days previous
thereto, to each stockholder of record entitled to vote
at the meeting at such address as appears on the records
of the corporation. Notice of any meeting of stockholders
need not be given to any stockholder who shall waive
notice thereof, before or after such meeting, in writing,
or to any stockholder who shall attend such meeting,
except when the stockholder attends a meeting for the
express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the
meeting is not lawfully called or convened.
Section 4. A majority of the shares entitled to vote,
present in person or represented by proxy, shall constitute
a quorum at all meetings of the stockholders. If there be
no such quorum present in person or by proxy, the holders
of a majority of such shares so present or represented
may adjourn the meeting from time to time.
Section 5. Meetings of the stockholders shall be presided
over by the Chairman of the Board or, if such officer is
not present, by the President or a Vice President or, if
no such officer is present, by a chairman to be chosen at
the meeting. The Secretary of the corporation or, in
such officer's absence, an Assistant Secretary shall act
as secretary of the meeting. If neither the Secretary
nor an Assistant Secretary is present, the chairman shall
appoint a secretary.
Section 6. Each stockholder entitled to vote at any meeting
may vote in person or by proxy for each share of stock held
by such stockholder which has voting power upon the matter
in question at the time but no proxy shall be voted on after
one year from its date.
Section 7. All elections of directors shall be by written
ballot and shall be determined by a plurality of the voting
power present in person or represented by proxy and entitled
to vote. All other voting need not be by written ballot,
except upon demand therefor by the Board of Directors or
the officer of the corporation presiding at the meeting
of stockholders where the vote is to be taken. Except
as otherwise provided by law, in all matters other than
the election of directors, the affirmative vote of the
majority of the voting power present in person or
represented by proxy and entitled to vote shall be the
act of the stockholders. The chairman of each meeting at
which directors are to be elected shall appoint two
inspectors of election, unless such appointment shall
be unanimously waived by those stockholders present or
represented by proxy at the meeting and entitled to vote
at the election of directors. No director or candidate
for the office of director shall be appointed as such
inspector. The inspectors shall first take and subscribe
an oath or affirmation faithfully to execute the duties
of inspector at such meeting with strict impartiality
and according to the best of their ability, and shall
take charge of the polls and after the balloting shall
make a certificate of the result of the vote taken.
Section 8. In order that the corporation may determine
the stockholders entitled to notice of or to vote at any
meeting of stockholders or any adjournment thereof, or
entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled
to exercise any rights in respect of any change,
conversion or exchange of stock or for the purpose
of any other lawful action, the Board of Directors may
fix, in advance, a record date, which shall be not more
than sixty nor less than ten days before the date of
such meeting, nor more than sixty days prior to any other
action. If for any reason the Board of Directors shall
not have fixed a record date for any such purpose, the
record date for such purpose shall be determined as
provided by law. Only those stockholders of record
on the date so fixed or determined shall be entitled
to any of the foregoing rights, notwithstanding the transfer
of any such stock on the books of the corporation after any
such record date so fixed or determined.
ARTICLE II.
BOARD OF DIRECTORS.
Section 1. The Board of Directors of the corporation shall
consist of such number of directors, not less than three,
as shall from time to time be fixed by resolution of the
Board of Directors. The directors shall be divided into
three classes in the manner set forth in the Certificate
of Incorporation of the corporation, each class to be
elected for the term set forth therein. A majority of the
total number of directors shall constitute a quorum for
the transaction of business and, except as otherwise
provided by law or by the corporation's Certificate of
Incorporation, the act of a majority of the directors
present at any meeting at which there is a quorum shall
be the act of the Board of Directors. Directors need not
be stockholders.
Section 2. Vacancies in the Board of Directors shall be
filled by a majority of the remaining directors, though
less than a quorum; and in case of an increase in the number
of directors, the additional directors shall be elected by
a majority of the directors in office at the time of
increase, though less than a quorum; and the directors so
chosen shall hold office for a term as set forth in the
Certificate of Incorporation of the corporation.
Section 3. Meetings of the Board of Directors shall be held
at such place within or without the State of Delaware as may
from time to time be fixed by resolution of the Board or as
may be specified in the notice of call of any meeting.
Regular meetings of the Board of Directors shall be held at
such times as may from time to time be fixed by resolution
of the Board and special meetings may be held at any time
upon the call of the Chairman of the Board or the President,
by oral, telegraphic or written notice, duly served on or
sent or mailed to each director not less than one day before
the meeting. The notice of any meeting need not specify the
purposes thereof. A meeting of the Board may be held without
notice immediately after the annual meeting of stockholders
at the same place at which such meeting is held. Notice
need not be given of regular meetings of the Board held at
times fixed by resolution of the Board. Notice of any
meeting need not be given to any director who shall attend
such meeting in person or who shall waive notice thereof,
before or after such meeting, in writing.
Section 4. The Board of Directors may, by resolution or
resolutions, passed by a majority of the whole Board,
designate one or more committees, each committee to consist
of three or more of the Directors of the corporation which,
to the extent provided in said resolution or resolutions,
shall have and may exercise the powers of the Board of
Directors in the management of the business and affairs of
the corporation, and may authorize the seal of the
corporation to be affixed to all papers which may require
it. A majority of the members of a committee shall
constitute a quorum for the transaction of its business. In
the absence or disqualification of any member of any such
committee or committees, but not in the case of a vacancy
therein, the member or members thereof present at any
meeting and not disqualified from voting, whether or not
the member or members constitute a quorum, may unanimously
appoint another member of the Board of Directors, who is
not an officer of the corporation or any of its subsidiaries,
to act at the meeting for all purposes in the place of any
such absent or disqualified member. Such committee or
committees shall have such name or names as may be
determined from time to time by resolution adopted by the
Board of Directors.
ARTICLE III.
OFFICERS.
Section 1. The Board of Directors, as soon as may be after
each annual meeting of the stockholders, shall elect officers
of the corporation, including a Chairman of the Board, a
President, one or more Vice Presidents, a Secretary and a
Treasurer. The Board of Directors may also from time to time
appoint such other officers (including one or more Assistant
Vice Presidents, and one or more Assistant Secretaries and
one or more Assistant Treasurers) as it may deem proper or
may delegate to any elected officer of the corporation
the power so to appoint and remove any such other officers
and to prescribe their respective terms of office,
authorities and duties. Any Vice President may be
designated Executive, Senior or Corporate, or may be given
such other designation or combination of designations as
the Board of Directors may determine. Any two offices may
be held by the same person. The Chairman of the Board and
the President shall be chosen from among the Directors.
Section 2. All officers of the corporation elected or
appointed by the Board of Directors shall hold office
until their respective successors are chosen and qualified.
Any officer may be removed from office at any time either
with or without cause by the affirmative vote of a majority
of the members of the Board then in office, or, in the case
of appointed officers, by any elected officer upon whom
such power of removal shall have been conferred by the Board
of Directors.
Section 3. Each of the officers of the corporation elected
or appointed by the Board of Directors shall have the powers
and duties prescribed by law, by the By-Laws or by the Board
of Directors and, unless otherwise prescribed by the By-Laws
or by the Board of Directors, shall have such further powers
and duties as ordinarily pertain to that office. The
Chairman of the Board or the President, as determined by the
Board of Directors, shall be the Chief Executive Officer and
shall have the general direction of the affairs of the
corporation. Any officer, agent, or employee of the
corporation may be required to give bond for the faithful
discharge of such person's duties in such sum and with such
surety or sureties as the Board of Directors may from time to
time prescribe.
Section 4. There shall be a Controller who shall exercise
general supervision of and be responsible for the efficient
operation of the Accounting Department of the corporation.
The Controller shall be consulted in the preparation of the
annual budget of the corporation and shall render to the
Chief Executive Officer from time to time and to the Board
of Directors at each of the regular meetings of the Board
statements necessary to keep them informed of the earnings,
expenses and condition of the corporation, and shall bring
to their notice any and all matters which the Controller
may deem desirable to submit to their attention for the
successful conduct of the business.
ARTICLE IV.
CERTIFICATES OF STOCK.
Section 1. The interest of each stockholder of the
corporation shall be evidenced by a certificate or
certificates for shares of stock in such form as the
Board of Directors may from time to time prescribe. The
shares in the stock of the corporation shall be
transferable on the books of the corporation by the holder
thereof in person or by such holder's attorney, upon
surrender for cancellation of a certificate or certificates
for the same number of shares, with an assignment and power
of transfer endorsed thereon or attached thereto, duly
executed, and with such proof of the authenticity of the
signature as the corporation or its agents may reasonably
require.
Section 2. The certificates of stock shall be signed by such
officer or officers as may be permitted by law to sign
(except that where any such certificate is countersigned
by a transfer agent other than the corporation or its
employee, or by a registrar other than the corporation or
its employee, the signatures of any such officer or officers
may be facsimilies), and shall be countersigned and
registered in such manner, all as the Board of Directors
may by resolution prescribe. In case any officer or
officers who shall have signed, or whose facsimile
signature or signatures shall have been used on any such
certificate or certificates shall cease to be such officer
or officers of the corporation, whether because of death,
resignation or otherwise, before such certificate or
certificates shall have been issued by the corporation,
such certificate or certificates may nevertheless be issued
and delivered as though the person or persons who signed
such certificate or certificates, or whose facsimile
signature or signatures shall have been used thereon,
had not ceased to be such officer or officers of the
corporation.
Section 3. No certificate for shares of stock in the
corporation shall be issued in place of any certificate
alleged to have been lost, stolen or destroyed, except upon
production of such evidence of such loss, theft or
destruction and upon delivery to the corporation of a bond
of indemnity in such amount, upon such terms and secured by
such surety, as the Board of Directors in its discretion may
require.
Section 4. As used in these By-Laws, the word "alien" shall
be construed to include the following or their
representatives: any individual not a citizen of the
United States of America; a partnership unless a majority
of the partners are citizens of the United States of
America and have a majority interest in the partnership
profits; a foreign government, a corporation, joint stock
company or association organized under the laws of a
foreign country; and any other corporation, joint stock
company or association controlled directly or indirectly
by one or more of the above.
Not more than one-fourth of the aggregate number of shares
of stock of the corporation outstanding shall at any time
be owned of record or voted by or for the account of aliens.
If the corporation is at any time controlled directly or
indirectly by any other corporation of which any officer
or more than one-fourth of the directors are aliens, or of
which more than one-fourth of the capital stock is owned of
record or voted by or for the account of aliens, then such
other corporation shall, so long as such condition continues
to exist, have no voting, dividend, or other rights with
respect to the shares of this corporation which it owns,
except the right to transfer such shares in such manner
that such condition will cease to exist.
The ownership of record of shares of stock by or for the
account of aliens, and the citizenship of transferees,
thereof, shall be determined in conformity with regulations
prescribed by the Board of Directors. There shall be
maintained separate stock records, a domestic record
covering citizen stockholders and a foreign record covering
alien stockholders.
Every certificate representing stock issued or transferred
to an alien shall be marked "Foreign Share Certificate," but
under no circumstances shall certificates representing
more than one-fourth of the aggregate number of shares
outstanding at any one time be so marked, nor shall the
total amount of stock represented by Foreign Share
Certificates, plus the amount of stock owned by or for the
account of aliens and represented by certificates not so
marked, exceed one-fourth of the aggregate number of shares
outstanding.
Every certificate issued not marked "Foreign Share
Certificate" shall be marked "Domestic Share Certificate."
All stock represented by Foreign Share Certificates may be
transferred to aliens or to citizens.
If, and so long as, the stock records of the corporation
shall disclose one-fourth alien stock ownership, no transfers
of shares of domestic record to aliens shall be made. If,
and so long as, the stock records of the corporation shall
disclose one-fourth alien stock ownership and shall be
found by the corporation that stock of domestic record is,
in fact, held by or for the account of an alien, the holder
of such stock shall not be entitled to vote, to receive
dividends, or to any other rights, except the right to
transfer such stock to a citizen of the United States of
America.
The directors shall be authorized at any time and from
time to time to adopt such other provisions as the directors
may deem necessary or desirable to avoid violation of the
provisions of Section 310(a) of the Federal Communications
Act as now in effect or as it may hereafter from time to
time be amended, and to carry out the provisions of this
Article IV, Section 4, and of Article Fifth of the
Certificate of Incorporation of the corporation.
ARTICLE V.
CORPORATE BOOKS.
The books of the corporation may be kept outside of the
State of Delaware at such place or places as the Board of
Directors may from time to time determine.
ARTICLE VI.
CHECKS, NOTES, PROXIES, ETC.
All checks and drafts on the corporation's bank accounts
and all bills of exchange and promissory notes, and all
acceptances, obligations and other instruments for the
payment of money, shall be signed by such officer or
officers or agent or agents as shall be thereunto authorized
from time to time by the Board of Directors. Proxies to
vote and consents with respect to securities of other
corporations owned by or standing in the name of the
corporation may be executed and delivered from time to time
on behalf of the corporation by the Chairman of the Board,
the President, or by such officers as the Board of
Directors may from time to time determine.
ARTICLE VII.
FISCAL YEAR.
The fiscal year of the corporation shall begin on the
first day of January in each year and shall end on the
thirty-first day of December following.
ARTICLE VIII.
CORPORATE SEAL.
The corporate seal shall have inscribed thereon the name
of the corporation. In lieu of the corporate seal, when so
authorized by the Board of Directors or a duly empowered
committee thereof, a facsimile thereof may be impressed or
affixed or reproduced.
ARTICLE IX.
OFFICES.
The corporation and the stockholders and the directors may
have offices outside of the State of Delaware at such places
as shall be determined from time to time by the Board of
Directors.
ARTICLE X.
AMENDMENTS.
Subject to any limitations that may be imposed by the
stockholders, the Board of Directors may make by-laws and
from time to time may alter, amend or repeal any by-laws,
but any by-laws made by the Board of Directors or the
stockholders may be altered, amended or repealed by the
stockholders at any annual meeting or at any special meeting,
provided that notice of such proposed alteration, amendment
or repeal is included in the notice of such meeting.
E-1
EXHIBIT F
THE DUN & BRADSTREET CORPORATION
NONFUNDED DEFERRED COMPENSATION PLAN
FOR NON-EMPLOYEE DIRECTORS
(As Amended on April 21, 1993)
_______________________________
1. Directors who are not employees of The Dun & Bradstreet
Corporation (the "Company") or any of its
subsidiaries may elect on or before December 31 of any
year to have payment of all or a specified part of all
fees payable to them for their services as Directors
(including fees payable to them for services as
members of a committee of the Board) during the
calendar year following such election and succeeding
calendar years deferred until they cease to be
Directors of the Company. Any person, not an
employee, who shall become a Director during any
calendar year, and who was not a Director of the
Company on the preceding December 31, may elect,
before the term as a Director begins, to have payment
of all or a specified part of such fees for the
remainder of such calendar year and for succeeding
calendar years so deferred. Any such election shall
be made by written notice delivered to the Secretary
of the Company.
2. All deferred fees shall be held in the general
funds of the Company, shall be credited to the
Director's account and shall bear interest from the
date the deferred fee would otherwise have been paid
to the Director until it is actually paid at a rate
for each quarter equal to the higher of (a) the
effective annual rate of interest being earned, as
of January 1 of each year, in the Special Fixed
Income Fund (C) of the Investment Plan Addendum to
the Company's Profit Participation Plan, or (b)
the average rate during such quarter for the U.S.
Government Securities Fund (D) of such Investment
Plan Addendum, such interest to be credited to the
Director's account and compounded at the end of each
calendar quarter.
3. The aggregate amount of deferred fees,
together with interest accrued thereon, credited to
theaccount of any Director shall be paid to the Director
in five or ten annual installments or in a lump sum,
as the Director shall elect in the notice referred to
in paragraph 1 above. The first installment (or lump
sum payment if the Director so elects) shall be paid
on the tenth day of the calendar year immediately
following the calendar year in which the Director
ceases to be a Director of the Company, and
subsequent installments shall be made on the tenth
day of each succeeding calendar year until the entire
amount credited to the Director's account shall
have been paid. The amount of each installment shall
be determined by multiplying the balance credited to
the Director's account as of the December 31
immediately preceding the installment payment date
by a fraction, the numerator of which shall be one
and the denominator of which shall be the number of
installment payments over which payment of such amount
is to be made, less the number of installments
theretofore made. Thus, if payment is to be made in
ten installments, the fraction for the first
installment shall be 1/10th, for the second
installment 1/9th, and so on.
4. If a Director should die before full payment
of all amounts credited to the Director's account, the
full amount credited to the account as of December 31
of the year of the Director's death shall be paid on
the tenth day of the calendar year following the year
of death to the Director's estate or to such
beneficiary or beneficiaries as previously designated
by the Director in a written notice delivered to the
Secretary of the Company.
5. A Director's election to defer compensation
shall continue until a Director ceases to be a Director
or until the Director changes or terminates such
election by written notice delivered to the Secretary
of the Company. Any such notice of change or
termination shall become effective as of the end of
the calendar year in which such notice is given.
Amounts credited to the account of a Director prior to
the effective date of such change or termination shall
not be affected thereby and shall be paid to the
Director only in accordance with paragraph 3 (or
paragraph 4 in the event of death) above.
6. The right of a Director to any deferred fees
and/or the interest thereon shall not be subject to
assignment by the Director. If a Director does make
an assignment of any deferred fees and/or the interest
thereon, the Company may disregard such assignment
and discharge its obligation hereunder by making
payment as though no such assignment had been made.
7. If there is a "Change in Control" of the
Company,as defined in paragraph 8:
a) The total amount to the credit of each
Director's account under the Plan shall be
paid to the Director in a lump sum within 30
days from the date of such Change in Control;
provided, however, if such payment is not made
within such 30-day period, the amount to the
credit of the Director's account shall be
credited with interest from the date of such
Change in Control until the actual payment date
at an annual rate equal to the yield on 90-day
U.S. Treasury Bills plus one percentage point.
For this purpose the yield on U.S. Treasury
Bills shall be the rate published in The Wall
Street Journal on the first business day of the
calendar month in which the Change in Control
occurred.
b)The total amount credited to each Director's
account under the Plan from the date of the
Change in Control until the date the Director
ceases to be a Director shall be paid to the
Director in a lump sum within 30 days from
the date the Director ceases to be a Director.
c)If a Director elects to change or terminate
an election with respect to the deferral of
fees by written notice delivered to the
Secretary of the Company, and such notice
is given during the calendar year in which a
Change in Control occurs and on or before the
date of the Change in Control, the change or
termination of election shall become effective
as of the date of the Change in Control. If
such notice is given subsequent to the date of
the Change in Control, it shall become
effective as of the end of the calendar year
in which the notice is given.
8. A "Change in Control" of the Company shall mean
the occurrence of any of the following events:
(a)Any "person," as such term is used in
Section 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the
"Exchange Act") (other than the Company, any
trustee or other fiduciary holding securities
under an employee benefit plan of the Company,
or any corporation owned, directly or
indirectly, by the stockholders of the Company
in substantially the same proportions as their
ownership of stock of the Company), is or
becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company
representing 30% or more of the combined voting
power of the Company's then outstanding
securities;
(b)during any period of two consecutive years,
individuals who at the beginning of such
period constitute the Board, and any new
Director (other than a Director designated by
a person who has entered into an agreement
with the Company to effect a transaction
described in clause (a), (c) or (d) of this
Section) whose election by the Board or
nomination for election by the Company's
stockholders was approved by a vote of at
least two-thirds (2/3) of the Directors then
still in office who either were Directors at
the beginning of the period or whose election
or nomination for election was previously so
approved cease for any reason to constitute
at least a majority thereof;
(c) the stockholders of the Company approve a
merger or consolidation of the Company with
any other corporation, other than (1) a merger
or consolidation which would result in the
voting securities of the Company outstanding
immediately prior thereto continuing to
represent (either by remaining outstanding
or by being converted into voting securities
of the surviving entity) more than 50% of the
combined voting power of the voting securities
of the Company or such surviving entity
outstanding immediately after such merger or
consolidation or (2) a merger or consolidation
effected to implement a recapitalization of
the Company (or similar transaction) in which
no "person" (as hereinabove defined) acquires
more than 50% of the combined voting power of
the Company's then outstanding securities;
(d) the stockholders of the Company approve a
plan of complete liquidation of the Company or
an agreement for the sale or disposition by
the Company of all or substantially all of
the Company's assets.
9. Notwithstanding any provision herein to the
contrary, amounts payable under this Plan shall not be
funded and shall be made out of the general funds of
the Company; provided, however, that the Company
reserves the right to establish one or more trusts to
provide alternate sources of benefit payments under
this Plan, provided, further, however, that upon the
occurrence of a "Potential Change in Control" of the
Company, as defined below, the appropriate officers
of the Company are authorized to make transfers to
such a trust fund, established as an alternate source
of benefits payable under the Plan, as are necessary
to fund the lump sum payments to Directors required
pursuant to Paragraph 7 of this Plan in the event of
a Change in Control of the Company; provided, further,
however, that if payments are made from such trust
fund, such payments will satisfy the Company's
obligations under this Plan to the extent made from
such trust fund.
For the purposes of this Plan, "Potential Change in
Control" means:
(a)the Company enters into an agreement,
theconsummation of which would result in
the occurrence of a Change in Control of
the Company;
(b)any person (including the Company)
publicly announces an intention to take or
to consider taking actions which if
consummated would constitute a Change in
Control of the Company;
(c)any person, other than a trustee or other
fiduciary holding securities under an
employee benefit plan of the Company (or
a company owned, directly or indirectly, by
the stockholders of the Company in
substantially the same proportions as their
ownership of stock of the Company), who is
or becomes the beneficial owner, directly
or indirectly, of securities of the Company
representing 9.5% or more of the combined
voting power of the Company's then
outstanding securities, increases such
person's beneficial ownership of such
securities by 5% or more over the percentage
so owned by such person; or
(d)the Board of Directors of the Company
adopts a resolution to the effect that, for
purposes of this Plan, a Potential Change in
Control of the Company has occurred.
10. The Executive Compensation and Stock Option
Committee of the Board (the "Committee") shall be
responsible for the administration of the Plan and
may delegate to any management committee, employee,
Director or agent its responsibility to perform any
act hereunder, including without limitation those
matters involving the exercise of discretion,
provided that such delegation shall be subject to
revocation at any time at its discretion. The
Committee shall have full authority to interpret the
provisions of the Plan and construe all of its terms,
to adopt, amend, and rescind rules and regulations for
the administration of the Plan, and generally to
conduct and administer the Plan and to make all
determinations in connection with the Plan as may be
necessary or advisable, other than those
determinations delegated to management employees or
independent third parties by the Board. All of its
rules, interpretations and decisions shall be applied
in a uniform manner to all Directors similarly
situated and decisions of the Committee shall be
conclusive and binding on all persons.
11. The Plan may be modified, amended or revoked at
any time by the Board of Directors of the Company.
Adopted by Executive
Committee: December 23, 1975
Amended by Board of
Directors effective:
January 1, 1977
January 1, 1982
September 20, 1989
December 19, 1990
April 21, 1993
F-1
EXHIBIT G
RESTRICTED STOCK AGREEMENT
UNDER THE 1989 PLAN
This Agreement confirms the restricted stock award made
by THE DUN & BRADSTREET CORPORATION (the "Company") to:
________________________ (the "Employee")
of _____ shares of its Common Stock, par value $1 per share ("Restricted
Shares"). These Restricted Shares are awarded in accordance with and
are subject to all the terms and conditions of the 1989 Key Employees
Restricted Stock Plan for The Dun & Bradstreet Corporation and
Subsidiaries (the "1989 Plan").
Certificates issued in respect of the Restricted Shares shall be
registered in the name of the Employee and shall bear the following
legend, or any other similar legend as may be required by the Company:
"The transferability of this certificate and the shares of stock
represented hereby is subject to the terms and conditions (including
forfeiture) of the 1989 Key Employees Restricted Stock Plan for The Dun
& Bradstreet Corporation and Subsidiaries and an Agreement entered into
between the registered owner and The Dun & Bradstreet Corporation.
Copies of such Plan and the Agreement are on file in the offices of The
Dun & Bradstreet Corporation, 299 Park Avenue, New York, New York
10171."
Except as otherwise provided in this Agreement and the 1989 Plan, the
Employee shall have all the rights of a shareowner of the Company with
respect to the Restricted Shares, including the right to vote the shares
and receive dividends and other distributions. However, until the
Restricted Shares are released to the Employee as set forth below, the
Employee may not sell, transfer, pledge or otherwise dispose of the
Restricted Shares.
The stock certificates evidencing the Restricted Shares shall be held in
custody by a bank or other institution, or by the Company itself, until
such shares are forfeited in accordance with the 1989 Plan, or until
the restrictions thereon shall have lapsed as set forth below. The
Employee hereby agrees as a condition to the award of the Restricted
Shares to deliver to the Company, together with this Agreement, a stock
power endorsed in blank relating to the Restricted Shares covered by
this award, so that, in the event of a forfeiture of the award, the
Restricted Shares will be transferred to the Company.
Subject to earlier forfeiture of the Restricted Shares as provided in
the 1989 Plan, a maximum of _____ such shares will be released to the
Employee free of all restrictions, and delivered to the Employee on
__________, 1996 based on achievement of previously set performance
measures as outlined in the transmittal letter accompanying this
Agreement.
Subject to certain exceptions in the 1989 Plan, the Restricted Shares
will be forfeited upon the Employee's termination of employment prior to
release of the Restricted Shares to the Employee. Any Restricted Shares
not released to the Employee as provided above also will be forfeited.
The Employee hereby agrees to pay to the Company promptly upon request
an amount equal to any taxes the Company determines it is required to
withhold in respect of the grant of the Restricted Shares, and any
dividend payments or the lapse of the restrictions on the Restricted
Shares, and/or to authorize the Company to withhold shares having a
value equal to the amount of such taxes from any shares deliverable to
the Employee following the lapse of the restrictions.
IN WITNESS WHEREOF, The Dun & Bradstreet Corporation has caused this
Agreement to be executed in duplicate by its officer thereunto duly
authorized.
THE DUN & BRADSTREET CORPORATION
By
___________________________________
Assistant Treasurer
The undersigned hereby accepts and agrees to all the
terms and provisions of the foregoing Agreement and
acknowledges receipt of a copy of the 1989 Key
Employees Restricted Stock Plan for The Dun &
Bradstreet Corporation and Subsidiaries.
_______________________________________________________
Date Employee
G-1
<PAGE>
AGREEMENT OF LIMITED PARTNERSHIP
OF
D&B INVESTORS L.P.,
A DELAWARE LIMITED PARTNERSHIP
This AGREEMENT OF LIMITED PARTNERSHIP is entered into and shall be
effective as of the 14th day of October, 1993, by and among The Reuben H.
Donnelley Corporation ('RHDC'), a Delaware corporation, Dun & Bradstreet, Inc.
('DBI'), a Delaware corporation, and IMS America, Ltd. ('IMS'), a New Jersey
corporation, as the General Partners (with RHDC as the Managing General
Partner), and RBDB, LLC ('RBDB'), a Delaware limited liability company, as the
Limited Partner, pursuant to the provisions of the Delaware Revised Uniform
Limited Partnership Act, on the following terms and conditions:
THE PARTNERSHIP
1.1 Formation.
The Partners hereby agree to form the Partnership as a limited partnership
pursuant to the provisions of the Act and upon the terms and conditions set
forth in this Agreement.
1.2 Name.
The name of the Partnership shall be D&B Investors L.P., a Delaware limited
partnership, and all business of the Partnership shall be conducted in such
name.
1.3 Purpose.
The purpose of the Partnership is to acquire, subject to the terms of this
Agreement, certain stocks, bonds, notes, debentures, puts, calls, options,
warrants and other financial instruments or securities as further described and
limited in this Agreement, and to manage, protect, and conserve the assets of
the Partnership, and to engage in any and all activities related or incidental
thereto.
1.4 Principal Place of Business.
The principal place of business of the Partnership shall be c/o the
Managing General Partner. The General Partners may change the principal place of
business of the Partnership upon ten (10) Business Days' notice to the Limited
Partner.
1.5 Term.
The term of the Partnership shall commence on the date the certificate of
limited partnership described in Section 201 of the Act (the 'Certificate') is
filed in the office of the Secretary of State of Delaware in accordance with the
Act and shall continue until the winding up and liquidation of the Partnership
and its business is completed following a Liquidating Event, as provided in
Section 12 hereof.
1.6 Filings; Agent for Service of Process.
(a) The Managing General Partner shall execute and cause to be filed the
Certificate in the office of the Secretary of State of Delaware in accordance
with the provisions of the Act. The Managing General Partner shall take any and
all other actions reasonably necessary to perfect and maintain the status of the
Partnership as a limited partnership under the laws of Delaware, including
executing and filing amendments to the Certificate to be filed whenever required
by the Act.
(b) The Managing General Partner shall execute and cause to be filed
original or amended Certificates and shall take any and all other actions as may
be reasonably necessary to perfect and maintain the status of the Partnership as
a limited partnership or similar type of entity under the laws of any other
states or jurisdictions in which the Partnership engages in business.
(c) The registered agent for service of process on the Partnership shall be
CT Corporation System or any successor as appointed by the Managing General
Partner in accordance with the Act. The registered office of the Partnership in
the state of Delaware is located at 1209 Orange Street, City of Wilmington,
Delaware 19801.
<PAGE>
(d) Upon the dissolution of the Partnership, the Managing General Partner
or any other General Partner (or, in the event there is no remaining General
Partner, any Person elected pursuant to Section 12.2 hereof) shall promptly
execute and cause to be filed certificates of dissolution in accordance with the
Act and the laws of any other states or jurisdictions in which the Partnership
has filed certificates.
1.7 Independent Activities; Transactions with Affiliates; Title to
Property.
(a) The Managing General Partner and any of its Affiliates shall be
required to devote only such time to the affairs of the Partnership as the
Managing General Partner determines in its sole discretion may be necessary to
manage and operate the Partnership, and each such Person, to the extent not
otherwise directed by the Managing General Partner, shall be free to serve any
other Person or enterprise in any capacity that it may deem appropriate.
(b) To the extent permitted by applicable law and except as otherwise
provided in this Agreement, the General Partners (each acting on its own behalf)
and the Limited Partner (acting on its own behalf) and each of their Affiliates
may engage in whatever activities they choose, whether the same are competitive
with the Partnership or otherwise, without having or incurring any obligation to
offer any interest in such activities to the Partnership or any Partner, and
neither this Agreement nor any activity undertaken pursuant hereto shall prevent
any Partner or its Affiliates from engaging in such activities, or require any
Partner to permit the Partnership or any Partner or its Affiliates to
participate in any such activities, and as a material part of the consideration
for the execution of this Agreement by each Partner, each Partner hereby waives,
relinquishes, and renounces any such right or claim of participation.
(c) Except as otherwise provided in this Agreement, the Managing General
Partner, when acting on behalf of the Partnership, is hereby authorized to
purchase property from, sell property to, or otherwise deal with any Partner,
acting on its own behalf, or any Affiliate of any Partner, provided that any
such purchase, sale or other transaction shall be made on terms and conditions
which are no less favorable to the Partnership than if the sale, purchase or
other transaction had been entered into with an independent third party.
(d) All property owned by the Partnership shall be held in the name of the
Partnership.
1.8 Definitions.
Capitalized words and phrases used in this Agreement have the following
meanings:
'Act' means the Delaware Revised Uniform Limited Partnership Act, as set
forth in Del. Code Ann. tit. 6, SS SS 17-101 to 17-1109 (1990), as amended from
time to time (or any corresponding provisions of succeeding law).
'Adjusted Capital Account Deficit' means, with respect to any Partner, the
deficit balance, if any, in such Partner's Capital Account as of the end of the
relevant Fiscal Year, after giving effect to the following adjustments:
(i) Credit to such Capital Account any amounts which such Partner is
obligated to restore pursuant to any provision of this Agreement; and
(ii) Debit to such Capital Account the items described in Sections
1.704-l(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and
1.704-1(b)(2)(ii)(d)(6) of the Regulations.
The foregoing definition of Adjusted Capital Account Deficit is intended to
comply with the provisions of Section 1.704-1(b)(2)(ii)(d) of the Regulations
and shall be applied in a manner consistent with such intent.
'Affiliate' means, with respect to any Person, (i) any Person directly or
indirectly controlling, controlled by or under common control with such Person,
(ii) any Person owning or controlling 10% or more of the outstanding voting
interests of such Person, (iii) any officer, director or general partner of such
Person, or (iv) any Person who is an officer, director, general partner,
trustee, or holder of 10% or more of the voting interests of any Person
described in clauses (i) through (iii) of this sentence. For purposes of this
definition, the term 'control,' (including, with correlative meanings, the terms
'controlling,' 'controlled by' or 'under common control with') means the
possession, direct or
2
<PAGE>
indirect, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
'Bankruptcy' means, with respect to any Person, a 'Voluntary Bankruptcy' or
an 'Involuntary Bankruptcy.' A 'Voluntary Bankruptcy' means, with respect to any
Person, the inability of such Person generally to pay its debts as such debts
become due, or an admission in writing by such Person of its inability to pay
its debts generally or a general assignment by such Person for the benefit of
creditors; the filing of any petition or answer by such Person seeking to
adjudicate it a bankrupt or insolvent, or seeking for itself any liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief, or
composition of such Person or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking, consenting to, or
acquiescing in the entry of an order for relief or the appointment of a
receiver, trustee, custodian or other similar official for such Person or for
any substantial part of its property; or partnership or corporate action taken
by such Person to authorize any of the actions set forth above. An 'Involuntary
Bankruptcy' means, with respect to any Person, without the consent or
acquiescence of such Person, the entering of an order for relief or approving a
petition for relief or reorganization or any other petition seeking any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or other similar relief under any present or future bankruptcy, insolvency or
similar statute, law or regulation, or the filing of any such petition against
such Person which petition shall not be dismissed within thirty (30) days, or,
without the consent or acquiescence of such Person, the entering of an order
appointing a trustee, custodian, receiver or liquidator of such Person or of all
or any substantial part of the property of such Person which order shall not be
dismissed within thirty (30) days.
'Business Day' means any day except a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
close.
'Capital Account' means, with respect to any Partner, the Capital Account
maintained for such Partner in accordance with the rules of Section
1.704-1(b)(2)(iv) of the Regulations. Subject thereto:
(i) To each Partner's Capital Account there shall be credited such
Partner's Capital Contributions (net of liabilities which the Partnership is
considered to assume or to take subject to under Code Section 752) and such
Partner's distributive share of Profits and any items in the nature of income or
gain which are specially allocated pursuant to Section 3.3 or Section 3.4
hereof.
(ii) To each Partner's Capital Account there shall be debited the amount of
cash and the Gross Asset Value of any Property distributed to such Partner
pursuant to any provision of this Agreement (net of liabilities which such
Partner is considered to assume or to take subject to under Code Section 752)
and such Partner's distributive share of Losses and any items in the nature of
expenses or losses which are specially allocated pursuant to Section 3.3 or
Section 3.4 hereof.
(iii) In the event all or a portion of an Interest is transferred in
accordance with the terms of this Agreement, the transferee shall succeed to the
Capital Account of the transferor to the extent it relates to the transferred
Interest.
The provisions of this Agreement relating to the maintenance of
Capital Accounts are intended to comply with Section 1.704-1(b) of the
Regulations, and they shall be interpreted and applied in a manner consistent
with such Regulations.
'Capital Contribution' means, with respect to any Partner, the amount of
money and the initial Gross Asset Value of any property (other than money)
contributed to the Partnership with respect to the Interest held by such
Partner.
'Certificate' has the meaning set forth in Section 1.5 hereof.
'Code' means the Internal Revenue Code of 1986, as amended from time to
time (or any corresponding provisions of succeeding law).
'Currency Agreement' means, with respect to any Person, any foreign
exchange contract, currency swap agreement or other similar agreement or
arrangement designed to protect such Person against fluctuations in currency
values.
'Debt' means, with respect to any Person, (i) all obligations of such
Person for borrowed money, (ii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (iii) all obligations of
such Person in respect of letters of credit or other similar instruments
(including
3
<PAGE>
reimbursement obligations with respect thereto), (iv) all obligations of such
Person to pay the deferred purchase price of property or services, (v) all
obligations of such Person arising from any short sales, the writing of options,
forward contracts or similar transactions, (vi) all obligations of such Person
as lessee which would be capitalized in accordance with GAAP, (vii) all
obligations secured by any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind on any asset of such Person, whether or not any such
obligation is otherwise an obligation of such Person, (viii) to the extent not
otherwise included in the definition, obligations under Currency Agreements and
Interest Rate Agreements, and (ix) all obligations of others, of a type
described in (i) through (viii) above, that are directly or indirectly
guaranteed (whether contingently or otherwise) by such Person; provided that
Debt shall not include any indebtedness of such Person to a Parent incurred in
the ordinary course of business consistent with past practice resulting from the
cash management system maintained by such Parent.
'Fair Market Value' means as to any date (i) if a security is registered
under the Securities Exchange Act of 1934, as amended (or any corresponding
provisions of succeeding law) and listed on a national securities exchange or
included on the NASDAQ National Market Issues List ('NASDAQ'), the closing sales
price on such date (or in the event such date is not a Business Day, the
Business Day immediately preceding such date), and (ii) if a security is not
traded on a national securities exchange or listed on NASDAQ or the value
otherwise cannot be determined under clause (i), the average of the firm prices
bid for such date quoted by Morgan Stanley & Co. Incorporated, Salomon Brothers
Inc. and The First Boston Corporation, in each case for the full amount of the
specific security for which the Fair Market Value is being determined.
'Fiscal Quarter' means (i) the period commencing on the effective date of
this Agreement and ending on December 31, 1993, (ii) any subsequent three-month
period commencing on each of January 1, April 1, July 1, or October 1 and (iii)
any portion of a period described in clause (ii) that ends on the date the
Partnership is liquidated.
'Fiscal Year' means (i) the period commencing on the effective date of this
Agreement and ending on December 31, 1993, (ii) any subsequent twelve-month
period commencing on January 1 and ending on December 31 or (iii) any portion of
a period described in clause (ii) that is considered a short taxable year of the
Partnership under the Code and the Regulations.
'GAAP' means United States generally accepted accounting principles as in
effect from time to time, applied on a consistent basis.
'General Partner' means any Person who (i) is referred to as such in the
first paragraph of this Agreement or has become a General Partner pursuant to
the terms of this Agreement, and (ii) has not, at any given time, ceased to be a
General Partner pursuant to the terms of this Agreement. All references in this
Agreement to a majority or a specified percentage of the General Partners shall
mean General Partners holding more than fifty percent (50%) or holding such
specified percentage, respectively, of the then Percentage Interests of all
General Partners.
'Gross Asset Value' means, with respect to any asset, the asset's adjusted
basis for federal income tax purposes, except as follows:
(i) The initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of such
asset, as determined by the contributing Partner and the Managing General
Partner, provided that, if the contributing Partner is the Managing General
Partner, the determination of the fair market value of any contributed
asset shall require the consent of the Limited Partner;
(ii) The Gross Asset Values of all Partnership assets shall be
adjusted to equal their respective gross fair market values, as determined
by the Managing General Partner in accordance with Section 10.8(b)(ii)
hereof, as of the following times: (A) the acquisition of an additional
Interest by any new or existing Partner in exchange for more than a de
minimis Capital Contribution; (B) the distribution by the Partnership to a
Partner of more than a de minimis amount of Property as consideration for
an Interest; and (C) the liquidation of the Partnership within the meaning
of Section 1.704-1(b)(2)(ii)(g) of the Regulations;
4
<PAGE>
(iii) The Gross Asset Value of any Partnership asset distributed to
any Partner shall be adjusted to equal the gross fair market value of such
asset on the date of distribution as determined in accordance with Section
10.8(b)(ii) hereof; and
(iv) The Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such
assets pursuant to Code Section 732(d), Code Section 734(b) or Code Section
743(b), but only to the extent that (x) such adjustments are taken into
account in determining Capital Accounts pursuant to subparagraph (vi) of
the definition of 'Profits' or 'Losses' or Section 3.3(c) hereof and (y) an
adjustment pursuant to subparagraph (ii) is not required in connection with
the transaction.
'Insolvent' means, with respect to any Person at any time, the fair market
value of the assets and properties of such Person at such time being less than
the liabilities of such Person at such time.
'Interest' means an ownership interest in the Partnership, including any
and all rights that such Partner possesses under this Agreement, together with
all obligations of such Partner to comply with the terms of this Agreement. In
the event all or any portion of an Interest is transferred in accordance with
the terms of this Agreement, the transferee shall succeed to the Interest of the
transferor to the extent it relates to the transferred Interest.
'Interest Rate Agreement' means, with respect to any Person, any interest
rate protection agreement, interest rate future agreement, interest rate option
agreement, interest rate swap agreement, interest rate cap agreement, interest
rate collar agreement, interest rate hedge agreement or other similar agreement
or arrangement designed to protect such Person against fluctuations in interest
rates.
'Investment Principal' has the meaning set forth in Section 1 of the
Purchase Agreement.
'Investment Return' has the meaning set forth in Section 2.02(a) of the
Purchase Agreement.
'Limited Partner' means any Person who (i) is referred to as a Limited
Partner in the first paragraph of this Agreement or who has become a Limited
Partner pursuant to the terms of this Agreement, and (ii) has not ceased to be a
Limited Partner pursuant to the terms of this Agreement.
'Liquidating Event' has the meaning set forth in Section 12.1 hereof.
'Mandatory Retirement Event' has the meaning set forth in Section 6.01(a)
of the Purchase Agreement.
'Net Cash Flow' means the gross cash proceeds of the Partnership less the
portion thereof used to pay or establish reserves for all Partnership expenses,
debt payments, capital investments, replacements, and contingencies, all as
determined by the Managing General Partner in its sole discretion. 'Net Cash
Flow' shall not be reduced by depreciation, amortization, cost recovery
deductions, or similar allowances, but shall be increased by any reductions of
reserves previously established pursuant to the first sentence of this
definition.
'Parent' means in the case of RHDC, DBI and IMS, The Dun & Bradstreet
Corporation, and in the case of RBDB, the entity or entities that own the
outstanding equity interests therein.
'Partners' means all General Partners and the Limited Partner, where no
distinction is required by the context in which the term is used herein. All
references in this Agreement to a majority or a specified percentage of the
Partners shall mean Partners holding more than fifty percent (50%) or holding
such specified percentage, respectively, of the then Percentage Interests.
'Percentage Interest' means, with respect to any Partner, as of any date,
the ratio (expressed as a percentage) of such Partner's cumulative Capital
Contributions as of such date to the cumulative Capital Contributions of all
Partners on such date, such Capital Contributions to be determined after giving
effect to all contributions and all repayments of such contributions for all
periods ending on or prior to such date. The initial Percentage Interest of each
Partner is set forth in Sections 2.1 and 2.2 hereof. In the event all or any
portion of an Interest is transferred in accordance with the terms of this
Agreement, the transferee shall succeed to the Percentage Interest of the
transferor to the extent it relates to the transferred Interest.
'Permitted Investments' means (i) cash; (ii) direct obligations of the
United States of America for the payment of which its full faith and credit is
pledged; (iii) Federal Home Loan Mortgage Corporation
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<PAGE>
participation certificates; (iv) Federal National Mortgage Association mortgage
pass-through certificates; (v) Government National Mortgage Association mortgage
pass-through certificates; (vi) short-term commercial paper issued by any
corporation organized under the laws of the United States of America or any
state thereof, rated at least 'A-1' by S&P, provided that the aggregate Fair
Market Value of all commercial paper issued by any Person shall not exceed 10%
of the aggregate Fair Market Value of all property (other than cash) owned by
the Partnership; (vii) indebtedness of any Person organized under the laws of
the United States of America or any state thereof that is not an Affiliate of
the Parent of the General Partners, rated at least 'AA' by S&P, provided, that
the aggregate Fair Market Value of all such indebtedness issued by any Person
shall not exceed 10% of the aggregate Fair Market Value of all property (other
than cash) owned by the Partnership; (viii) unsubordinated debt issued by the
Parent of the General Partners or unsubordinated debt issued by an Affiliate of
such Parent if (and only if) such debt is unconditionally guaranteed by such
Parent on an unsubordinated basis, provided that such Parent has agreed to
register such debt under the Securities Act of 1933, as amended (or any
corresponding provisions of succeeding law) upon the request of the holder of
such debt and such agreement inures to the benefit of any subsequent holder of
such debt; (ix) common stock or preferred stock issued by the Parent of the
General Partners, provided that (A) the ownership of such stock (when taken
together with any other securities owned by the Partnership) would not require
the Partnership to file a Schedule 13D under the Securities Exchange Act of
1934, as amended (or any corresponding provisions of succeeding law) and (B)
such Parent has agreed to register such stock under the Securities Act of 1933,
as amended (or any corresponding provisions of succeeding law) upon the request
of the holder of such stock and such agreement inures to the benefit of any
subsequent holder of such stock; or (x) puts, calls, options or warrants to
purchase or sell common stock of the Parent of the General Partners, provided
that (A) such puts, calls, options or warrants do not, in the aggregate, at the
time of their acquisition, exceed 10% of the Fair Market Value of all property
then held by the Partnership and (B) the ownership of such puts, calls, options
or warrants (when taken together with any other securities owned by the
Partnership) would not require the Partnership to file a Schedule 13D under the
Securities Exchange Act of 1934, as amended (or any corresponding provisions of
succeeding law).
'Permitted Transfer' has the meaning set forth in Section 10.2 hereof.
'Person' means any individual, partnership, corporation, trust, limited
liability company, association or other entity or organization, including a
government or political subdivision or any agency or instrumentality thereof.
'Portfolio Certificate' means a written certificate of the Managing General
Partner signed by the chief financial officer of the Managing General Partner
familiar with the financial affairs of the Partnership delivered in accordance
with Section 8.2(d) hereof, following the close of each Fiscal Quarter
commencing with the Fiscal Quarter ending December 31, 1993 that (x) certifies
the aggregate Fair Market Value of all property held by the Partnership as of
the last day of such Fiscal Quarter and (y) notifies whether additional capital
contributions are required to be made by the General Partners pursuant to
Section 2.3 hereof and, if so, the amount thereof. In the event that a
Triggering Event occurs and is continuing, following the close of each calendar
month commencing after such Triggering Event, the Managing General Partner shall
provide a Portfolio Certificate as of the last day of each calendar month which
is consistent with the requirements set forth in the preceding sentence.
'Profits' and 'Losses' means, for each Fiscal Year, an amount equal to the
Partnership's taxable income or loss as reported on the Partnership's U.S.
Partnership Return of Income (Form 1065) for such Fiscal Year, determined in
accordance with Code Section 703(a) (for this purpose, all items of income,
gain, loss, or deduction required to be stated separately pursuant to Code
Section 703(a)(1) shall be included in taxable income or loss), with the
following adjustments:
(i) Any income of the Partnership that is exempt from federal income
tax and not otherwise taken into account in computing Profits or Losses
pursuant to this definition of 'Profits' and 'Losses' shall be added to
such taxable income or loss;
(ii) Any expenditures of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant
to Section 1.704-1(b)(2)(iv)(i) of the Regulations,
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<PAGE>
and not otherwise taken into account in computing Profits or Losses shall
be subtracted from such taxable income or loss;
(iii) In the event the Gross Asset Value of any Partnership asset is
adjusted pursuant to subparagraphs (ii) or (iii) of the definition of Gross
Asset Value, the amount of such adjustment shall be taken into account as
gain or loss from the disposition of such asset for purposes of computing
Profits or Losses;
(iv) Gain or loss resulting from any disposition of Partnership
property with respect to which gain or loss is recognized for federal
income tax purposes shall be computed by reference to the Gross Asset Value
of the property disposed of, notwithstanding that the adjusted tax basis of
such property differs from its Gross Asset Value;
(v) The depreciation, amortization, and other cost recovery deductions
taken into account in computing such taxable income or loss shall be taken
into account for such Fiscal Year in accordance with Section
1.704-1(b)(2)(iv)(g) of the Regulations;
(vi) To the extent an adjustment to the adjusted tax basis of any
Partnership asset pursuant to Code Section 734(b) is required, pursuant to
Section 1.704-1(b)(2)(iv)(m)(4) of the Regulations, to be taken into
account in determining Capital Accounts as a result of a distribution other
than in liquidation of a Partner's Interest, the amount of such adjustment
shall be treated as an item of gain (if the adjustment increases the basis
of the asset) or loss (if the adjustment decreases such basis) from the
disposition of such asset and shall be taken into account for purposes of
computing Profits or Losses; and
(vii) Notwithstanding any other provision of this definition, any
items which are specially allocated pursuant to Section 3.3 or Section 3.4
hereof shall not be taken into account in computing Profits or Losses. The
amounts of the items of Partnership income, gain, loss or deduction
available to be specially allocated pursuant to Sections 3.3 and 3.4 hereof
shall be determined by applying rules analogous to those set forth in
subparagraphs (i) through (vi) above.
'Purchase Agreement' means the Purchase Agreement among the Partnership,
the General Partners, and the Purchaser attached hereto as Exhibit A and
incorporated herein by this reference.
'Purchaser' has the meaning specified in the preamble to the Purchase
Agreement and includes such Purchaser's successors and assigns.
'Rating Category' means (i) with respect to short-term ratings, A-1+, A-1,
A-2, A-3, B, C and D (or equivalent successor categories) or (ii) with respect
to long-term ratings, AAA, AA, A, BBB, BB, B, CCC, CC, C and D (or equivalent
successor categories).
'Regulations' means the Income Tax Regulations, including Temporary
Regulations, promulgated under the Code, as such regulations may be amended from
time to time (including any corresponding provisions of succeeding regulations).
'Retirement Date' has the meaning set forth in Section 10.8(a) hereof.
'Retirement Notice' has the meaning set forth in Section 10.8(a) hereof.
'Retirement Percentage' has the meaning set forth in Section 10.8 hereof.
'S&P' means Standard & Poor's Corporation and its successors.
'Transfer' means, as a noun, any voluntary or involuntary transfer, sale,
pledge, hypothecation, withdrawal or other disposition and, as a verb,
voluntarily or involuntarily to transfer, sell, pledge, hypothecate, withdraw or
otherwise dispose of.
'Triggering Event' means either (i) the occurrence of a decrease of the
short-term rating of the Parent of the General Partners by S&P by one or more
rating gradations; provided, that, in the event such Parent shall at any time
not have a short-term rating, Triggering Event shall mean the occurrence of a
decrease of the long-term rating of the Parent by S&P by one or more rating
gradations or (ii) such Parent's not at any time having either a short-term or a
long-term rating. In determining whether the rating has decreased by one or more
gradations, gradations within Rating Categories (e.g., + and - for S&P
long-term ratings) shall be taken into account (e.g., a decline in a rating from
AA+ to AA, as well as from AA- to A+, will constitute a decrease of one
gradation).
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'Wholly Owned Affiliate' of any Person means (i) an Affiliate of such
Person, 100% of the voting stock or beneficial ownership of which is owned
directly by such Person, or by any other Person who, directly or indirectly,
owns 100% of the voting stock or beneficial ownership of such Person, (ii) an
Affiliate of such Person who, directly or indirectly, owns 100% of the voting
stock or beneficial ownership of such Person, and (iii) any Wholly Owned
Affiliate of any Affiliate described in clauses (i) or (ii) of this definition.
SECTION 2.
PARTNERS' CAPITAL CONTRIBUTIONS
2.1 General Partners.
The name, address, original Capital Contribution and initial Percentage
Interest of each of the General Partners is as follows:
<TABLE>
<CAPTION>
ORIGINAL
CAPITAL PERCENTAGE
NAME AND ADDRESS CONTRIBUTION INTEREST
- ---------------------------------------------------------------------------- ------------ ----------
<S> <C> <C>
RHDC $47,500,000 95%
287 Bowman Avenue
Purchase, New York 10577
DBI $ 1,000,000 2%
One Diamond Hill Road
Murray Hill, New Jersey 07974
IMS $ 1,000,000 2%
100 Campus Road
Totowa, New Jersey 07512
</TABLE>
2.2 Limited Partner.
The name, address, original Capital Contribution, and initial Percentage
Interest of the Limited Partner is as follows:
<TABLE>
<CAPTION>
ORIGINAL
CAPITAL PERCENTAGE
NAME AND ADDRESS CONTRIBUTION INTEREST
- ----------------------------------------------------------------------------- ------------ ----------
<S> <C> <C>
RBDB $500,000 1%
245 Park Avenue, 36th Floor
New York, New York 10167
</TABLE>
2.3 Additional Mandatory Capital Contributions.
If the Fair Market Value of property held by the Partnership as reflected
in a Portfolio Certificate is less than either (I) if there is no Triggering
Event, the sum of (i) the then outstanding Investment Principal and (ii) any
accrued but unpaid Investment Return, or (II) after the occurrence of Triggering
Event which is continuing, the sum of (i) the then outstanding Investment
Principal, (ii) any accrued but unpaid Investment Return, and (iii) $50,000,000,
then the General Partners shall contribute to the capital of the Partnership in
cash in immediately available funds within five (5) Business Days after the date
such Portfolio Certificate is required to be delivered pursuant to Section 8.2
hereof an amount at least equal to such deficit under (I) or (II) above,
whichever is applicable. The obligation of the General Partners to contribute
additional capital pursuant to this Section 2.3 shall be joint and several. A
General Partner's obligation to contribute to the capital of the Partnership
pursuant to this Section 2.3 shall be subordinate in right of payment to the
unsecured claims of the general creditors of such General Partner, and a General
Partner shall not be required to contribute funds to the Partnership pursuant to
this Section 2.3 to the extent that, after giving effect to such contribution,
such General Partner would be Insolvent.
2.4 Other Matters.
(a) The original Capital Contributions shall be made to the Partnership in
cash in immediately available funds within three (3) days following the
commencement of the Partnership term.
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<PAGE>
(b) The Limited Partner shall not be liable for the debts, liabilities,
contracts or any other obligations of the Partnership. The Limited Partner shall
be liable only to make the original Capital Contributions set forth in Section
2.2 hereof and shall not be required to lend any funds to the Partnership or,
after its original Capital Contributions have been made, to make any further
Capital Contributions to the Partnership.
(c) No General Partner shall have any personal liability for the repayment
of any Capital Contributions of the Limited Partner.
(d) Except as otherwise provided in this Agreement, no Partner shall demand
or receive a return of its Capital Contributions or withdraw from the
Partnership without the consent of all Partners. Under circumstances requiring a
return of any Capital Contributions, no Partner shall have the right to receive
property other than cash except as may be specifically provided herein.
(e) Except as otherwise provided in this Agreement, no Partner shall
receive any interest, salary or drawing with respect to its Capital
Contributions or its Capital Account, for services rendered on behalf of the
Partnership, or otherwise in its capacity as a Partner.
SECTION 3.
ALLOCATIONS
3.1 Profits.
After giving effect to the special allocations set forth in Sections 3.3
and 3.4 hereof, Profits for any Fiscal Year shall be allocated in the following
order and priority:
(a) First, 100% to the General Partners, in proportion to and to the extent
of an amount equal to the excess, if any, of (i) the cumulative Losses allocated
to each such General Partner pursuant to Section 3.2(c) hereof for all prior
Fiscal Years, over (ii) the cumulative Profits allocated to such General Partner
pursuant to this Section 3.1(a) for all prior Fiscal Years;
(b) Second, to the Partners, in proportion to and to the extent of an
amount equal to the excess, if any, of (i) the cumulative Losses allocated to
each such Partner pursuant to Section 3.2(b) hereof for all prior Fiscal Years,
over (ii) the cumulative Profits allocated to such Partner pursuant to this
Section 3.1(b) for all prior Fiscal Years; and
(c) The balance, if any, to the Partners, in proportion to their Percentage
Interests.
3.2 Losses.
After giving effect to the special allocations set forth in Sections 3.3
and 3.4 hereof, Losses for any Fiscal Year shall be allocated in the following
order and priority:
(a) First, to the Partners, in proportion to and to the extent of an amount
equal to the excess, if any, of (i) the cumulative Profits allocated to each
such Partner pursuant to Section 3.1(c) hereof for all prior Fiscal Years, over
(ii) the cumulative Losses allocated to such Partner pursuant to this Section
3.2(a) for all prior Fiscal Years, subject to Section 3.5 hereof;
(b) Second, to the Partners, in proportion to their Percentage Interests,
in an amount equal to the excess, if any, of (i) the cumulative Profits
allocated to the Partners pursuant to Section 3.1(b) hereof for all prior Fiscal
Years, over (ii) the cumulative Losses allocated to the Partners pursuant to
this Section 3.2(b) for all prior Fiscal Years, subject to Section 3.5 hereof;
and
(c) The balance, if any, 100% to the General Partners, in proportion to
their Percentage Interests.
3.3 Special Allocations.
The following special allocations shall be made in the following order:
(a) Qualified Income Offset. In the event any Partner unexpectedly receives
any adjustments, allocations, or distributions described in Sections
1.704-1(b)(2)(ii)(d)(4), l.704-1(b)(2)(ii)(d)(5) or 1.704-l(b)(2)(ii)(d)(6) of
the Regulations, items of Partnership income and gain shall be specially
allocated to such Partner in an amount and manner sufficient to eliminate, to
the extent required by the Regulations, the Adjusted Capital Account Deficit, if
any, of such Partner as quickly as possible, provided that an allocation
pursuant to this Section 3.3(a) shall be made only if and to the extent that
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<PAGE>
such Partner would have an Adjusted Capital Account Deficit after all other
allocations provided for in this Section 3 have been tentatively made as if this
Section 3.3(a) were not in the Agreement.
(b) Gross Income Allocation. In the event the Limited Partner has a deficit
Capital Account at the end of any Fiscal Year which is in excess of the sum of
(i) the amount the Limited Partner is obligated to restore pursuant to any
provision of this Agreement, and (ii) the amount the Limited Partner is deemed
to be obligated to restore pursuant to Section 1.704-1(b)(2)(ii)(c) of the
Regulations, the Limited Partner shall be specially allocated items of
partnership income and gain in the amount of such excess as quickly as possible,
provided that an allocation pursuant to this Section 3.3(b) shall be made only
if and to the extent that the Limited Partner would have a deficit Capital
Account in excess of such sum after all other allocations provided for in this
Section 3 have been made as if Section 3.3(a) hereof and this Section 3.3(b)
were not in the Agreement.
(c) Section 754 Adjustments. To the extent an adjustment to the adjusted
tax basis of any Partnership asset is required pursuant to Code Section 732(d),
Code Section 734(b) or Code Section 743(b), the Capital Accounts of the Partners
shall be adjusted pursuant to Section l.704-1(b)(2)(iv)(m) of the Regulations.
3.4 Curative Allocations.
The allocations set forth in Sections 3.3 and 3.5 hereof (the 'Regulatory
Allocations') are intended to comply with certain requirements of the
Regulations. It is the intent of the Partners that, to the extent possible, all
Regulatory Allocations shall be offset either with other Regulatory Allocations
or with special allocations of other items of Partnership income, gain, loss or
deduction pursuant to this Section 3.4. Therefore, notwithstanding any other
provision of this Section 3 (other than the Regulatory Allocations), the
Managing General Partner shall make such offsetting special allocations of
Partnership income, gain, loss or deduction in whatever manner it determines
appropriate so that, after such offsetting allocations are made, each Partner's
Capital Account balance is, to the extent possible, equal to the Capital Account
balance such Partner would have had if the Regulatory Allocations were not part
of the Agreement and all Partnership items were allocated pursuant to Sections
3.1 and 3.2.
3.5 Loss Limitation.
The Losses allocated pursuant to Section 3.2(a) and (b) hereof shall not
exceed the maximum amount of Losses that can be so allocated without causing the
Limited Partner to have an Adjusted Capital Account Deficit at the end of any
Fiscal Year. All Losses in excess of the limitations set forth in this Section
3.5 shall be allocated to the General Partners in proportion to their Percentage
Interests, as provided for in Section 3.2(c) hereof.
3.6 Tax Allocations: Code Section 704(c).
In accordance with Code Section 704(c) and the Regulations thereunder,
income, gain, loss, and deduction with respect to any property contributed to
the capital of the Partnership shall, solely for tax purposes, be allocated
among the Partners so as to take account of any variation between the adjusted
basis of such property to the Partnership for federal income tax purposes and
its initial Gross Asset Value (computed in accordance with the definition of
Gross Asset Value in Section 1.8).
In the event the Gross Asset Value of any Partnership asset is adjusted
pursuant to subparagraph (iv) of the definition of Gross Asset Value in Section
1.8, subsequent allocations of income, gain, loss, and deduction with respect to
such asset shall take account of any variation between the adjusted basis of
such asset for federal income tax purposes and its Gross Asset Value in the same
manner as under Code Section 704(c) and the Regulations thereunder.
Any elections or other decisions relating to such allocations (including,
if proposed Section 1.704-3 of the Treasury regulations is finalized, which
method or methods under such proposed Treasury regulation to apply) shall be
made by the Managing General Partner in any manner that reasonably reflects the
purpose and intention of this Agreement.
SECTION 4.
DISTRIBUTIONS
4.1 Net Cash Flow.
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<PAGE>
Except as otherwise provided in Sections 10.8, 10.9, 11.2 and 12.2 hereof,
Net Cash Flow, if any, shall be distributed annually to the Partners in
proportion to and to the extent of an amount equal to the excess, if any, of (i)
the cumulative Profits allocated to the Partners for all prior Fiscal Years,
over (ii) the sum of (A) the cumulative Losses allocated to the Partners for all
prior Fiscal Years plus (B) the Net Cash Flow previously distributed to the
Partners pursuant to this Section 4.1; provided, however, that the Partnership
shall not make any distribution prior to the repayment of the Investment
Principal, any accrued but unpaid Investment Return and any payment required by
Section 6.02 of the Purchase Agreement, except to the extent permitted under the
Purchase Agreement.
4.2 Amounts Withheld.
All amounts withheld pursuant to the Code or any provision of any state,
local or foreign tax law with respect to any payment, distribution or allocation
to the Partnership or the Partners shall be treated as amounts distributed to
the Partners pursuant to this Section 4 for all purposes under this Agreement.
The Managing General Partner is authorized to withhold from distributions, or
with respect to allocations of Profits, Losses, or other items of income, gain,
loss or deduction, made to the Partners and to pay over to any federal, state,
local or foreign government any amounts required to be so withheld pursuant to
the Code or any provisions of any other federal, state, local or foreign law,
and shall allocate any such amounts to the Partners with respect to which such
amount was withheld.
SECTION 5.
MANAGEMENT
5.1 Authority of the Managing General Partner.
Subject to the limitations and restrictions set forth in this Agreement,
the Managing General Partner shall conduct the business and affairs of the
Partnership and in so doing shall have all of the rights and powers which may be
possessed by general partners under the Act, including, without limitation, the
right, power and authority to:
(a) Acquire, own, maintain, sell, convey, and assign any property which may
be necessary, related, or incidental to the accomplishment of the purposes of
the Partnership;
(b) Execute any and all agreements, contracts, documents, certifications,
and instruments necessary or convenient in connection with the acquisition,
maintenance, and conveyance of the Partnership property, or in connection with
managing the affairs of the Partnership;
(c) Enter into the Purchase Agreement and comply with all terms and
requirements thereof;
(d) Subject to the restriction in Section 5.3(h) hereof, borrow money and
issue evidences of indebtedness, and secure the same by mortgage, pledge, or
other lien on any property;
(e) Care for and distribute funds to the Partners by way of cash, income,
return of capital, or otherwise, all in accordance with the provisions of this
Agreement;
(f) Arrange for or contract on behalf of the Partnership for the employment
and services of employees and/or independent contractors, such as lawyers,
accountants and appraisers, and delegate to such Persons the duty to manage or
supervise any of the assets or operations of the Partnership;
(g) Engage in any kind of activity and perform and carry out contracts of
any kind (including contracts of insurance covering risks to property and
General Partner liability) necessary or incidental to, or in connection with,
the accomplishment of the purposes of the Partnership, as may be lawfully
carried on or performed by a partnership under the laws of each state in which
the Partnership is then formed or qualified;
(h) Make any and all elections for federal, state, local and foreign tax
purposes including, without limitation, any election, if permitted by applicable
law: (i) to adjust the basis of Partnership property pursuant to Code Sections
754, 734(b) and 743(b), or comparable provisions of state, local or foreign law,
in connection with Transfers of Interests and Partnership distributions; (ii) to
extend the statute of limitations for assessment of tax deficiencies against the
Partners with respect to adjustments to the Partnership's federal, state, local
or foreign tax returns; and (iii) to the extent provided in Code Sections 6221
through 6231 (or related Code sections regarding partnership audits and judicial
proceedings), to
11
<PAGE>
represent the Partnership and the Partners before taxing authorities or courts
of competent jurisdiction in tax matters affecting the Partnership and the
Partners in their capacities as Partners, and to file any tax returns and
execute any agreements or other documents relating to or affecting such tax
matters, including agreements or other documents that bind the Partners with
respect to such tax matters or otherwise affect the rights of the Partnership
and the Partners. It is contemplated that the Managing General Partner will not
make an election under Code Section 754 but may, in its sole discretion, make
such election upon ten (10) Business Days notice to the other Partners. The
Managing General Partner is specifically authorized to act as the 'Tax Matters
Partner,' after reasonable consultation with the other Partners, under the Code
and in any similar capacity under state, local or foreign law;
(i) Take, or refrain from taking, all actions, not expressly proscribed or
limited by this Agreement, as may be necessary or appropriate to accomplish the
purposes of the Partnership; and
(j) Subject to Section 5.3(d) hereof, institute, prosecute, defend, settle,
compromise, and dismiss lawsuits or other judicial or administrative proceedings
brought on or in behalf of, or against, the Partnership or the Partners in
connection with activities arising out of, connected with, or incidental to this
Agreement, and to engage counsel or others in connection therewith.
In the event (i) either there is no Managing General Partner or of the
Bankruptcy of the Managing General Partner and (ii) if there is one General
Partner, such General Partner shall exercise the rights and powers of the
Managing General Partner hereunder, or if there are two or more General
Partners, the rights and powers of the Managing General Partner hereunder shall
be exercised by such General Partners in such manner as they may agree, and
absent an agreement among such General Partners, no such General Partner shall
exercise any of such rights and powers without the unanimous consent of all such
General Partners.
5.2 Right to Rely on the Managing General Partner.
(a) Any Person dealing with the Partnership may rely (without duty of
further inquiry) upon a certificate signed by the Managing General Partner as
to:
(i) The identity of any General Partner or any Limited Partner;
(ii) The existence or nonexistence of any fact or facts which
constitute a condition precedent to acts by the Managing General Partner or
which are in any other manner germane to the affairs of the Partnership;
(iii) The Persons who are authorized to execute and deliver any
instrument or document of the Partnership; or
(iv) Any act or failure to act by the Partnership or any other matter
whatsoever involving the Partnership or any Partner.
(b) The signature of the Managing General Partner shall be necessary and
sufficient to convey title to any real property owned by the Partnership or to
execute any promissory notes, trust deeds, mortgages, or other instruments of
hypothecation, and all of the Partners agree that a copy of this Agreement may
be shown to the appropriate parties in order to confirm the same, and further
agree that the signature of the Managing General Partner shall be sufficient to
execute any 'statement of partnership' or other documents necessary to
effectuate this or any other provision of this Agreement. All of the Partners do
hereby appoint the Managing General Partner as their attorney-in-fact for the
execution of any or all of the documents described in this Section 5.2(b).
5.3 Restrictions on Authority of the General Partners.
The General Partners shall not have the authority to, and each covenants
and agrees that it shall not, do any of the following acts without the consent
of the Limited Partner:
(a) Cause or permit the Partnership to engage in any activity that is not
consistent with the purposes of the Partnership as set forth in Section 1.3
hereof;
(b) Knowingly do any act in contravention of this Agreement;
(c) Knowingly do any act which would make it impossible to carry on the
ordinary business of the Partnership, except as otherwise provided in this
Agreement;
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<PAGE>
(d) Confess a judgment against the Partnership in an amount in excess of
$25,000,000;
(e) Cause the Partnership to possess property, or to assign rights in
specific property, for other than a Partnership purpose;
(f) Knowingly perform any act that would subject the Limited Partner to
liability as a general partner in any jurisdiction;
(g) Cause the Partnership to voluntarily take any action that would cause a
Bankruptcy of the Partnership;
(h) Cause the Partnership to incur any Debt prior to the repayment of the
Investment Principal, any accrued but unpaid Investment Return and any payment
required by Section 6.02 of the Purchase Agreement, except as otherwise
permitted under the Purchase Agreement or under Section 5.6 hereof;
(i) Cause the Partnership to admit any additional Partners other than
pursuant to Section 10.6 hereof;
(j) Cause the Partnership to acquire any stock, puts, calls, options or
warrants issued by any Person, other than Permitted Investments;
(k) Cause the Partnership to acquire any commercial paper issued by any
Person or any term indebtedness issued by any Person, other than, in each case,
Permitted Investments; or
(l) Cause the Partnership to acquire any financial instruments, other than
Permitted Investments.
5.4 Duties and Obligations of the Managing General Partner.
(a) The Managing General Partner shall cause the Partnership to conduct its
business and operations separate and apart from that of the Managing General
Partner or any of its Affiliates.
(b) The Managing General Partner shall take all actions which may be
necessary or appropriate (i) for the continuation of the Partnership's valid
existence as a limited partnership under the laws of the State of Delaware (and
of each other jurisdiction in which such existence is necessary to protect the
limited liability of the Limited Partner or to enable the Partnership to conduct
the business in which it is engaged) and (ii) for the accomplishment of the
Partnership's purposes.
(c) The Managing General Partner shall notify the Partners of the
occurrence of any Liquidating Event described in Section 12.1 hereof (other than
the twentieth anniversary of the formation of the Partnership), and the action
which the Managing General Partner has taken or proposes to take with respect
thereto, promptly but no later than thirty (30) Business Days after any
responsible officer of the Managing General Partner has actual knowledge of such
occurrence.
5.5 Indemnification of the Partners.
(a) The Partnership, its receiver or its trustee shall indemnify, save
harmless, and pay all judgments and claims against a General Partner or any
officers or directors of such General Partner relating to any liability or
damage incurred by reason of any act performed or omitted to be performed by
such General Partner, or any officer or director of such General Partner, in
connection with the business of the Partnership, including attorneys' fees
incurred by such General Partner, officer or director in connection with the
defense of any action based on any such act or omission, which attorneys' fees
may be paid as incurred, including all such liabilities under federal and state
securities laws as permitted by law.
(b) In the event of any action by the Limited Partner against a General
Partner, including a Partnership derivative suit, the Partnership shall
indemnify, save harmless, and pay all expenses of such General Partner,
including attorneys' fees, incurred in the defense of such action, if such
General Partner is successful in such action.
(c) Notwithstanding Sections 5.5(a) and 5.5(b) above, no such
indemnification and payment shall be made until such time as the Partnership has
repaid the Investment Principal, any accrued but unpaid Investment Return and
any payment required by Section 6.02 of the Purchase Agreement.
(d) Notwithstanding anything to the contrary in any of Sections 5.5(a) and
5.5(b) above, no Partner shall be indemnified from any liability for fraud,
willful misconduct, breach of fiduciary responsibility, bad faith, or gross
negligence.
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(e) Notwithstanding anything to the contrary in any of Sections 5.5(a) and
5.5(b) above, in the event that any provision in any of such Sections is
determined to be invalid in whole or in part, such Section shall be enforced to
the maximum extent permitted by law.
5.6 Compensation, Expenses and Loans.
(a) Compensation and Expenses. A General Partner may charge the
Partnership, and shall be reimbursed, for any reasonable, direct, out-of-pocket
expenses incurred in connection with the Partnership's business, provided,
however, no such reimbursement shall be made until such time as the Partnership
has repaid the Investment Principal, any accrued but unpaid Investment Return
and any payment required by Section 6.02 of the Purchase Agreement, other than
of expenses of the Partnership in an aggregate amount not in excess of $100,000
in any Fiscal Year. No Partner otherwise shall receive any salary, fee, or draw
for services rendered to or on behalf of the Partnership, nor shall any Partner
be reimbursed for any expenses incurred by such Partner on behalf of the
Partnership.
(b) Loans. If the funds of the Partnership (including any amounts required
to be contributed pursuant to Section 2.3 hereof) are insufficient to pay, or
the Partnership fails or is otherwise unable to pay, in full the Investment
Principal, the Investment Return and/or any payment required by Section 6.02 of
the Purchase Agreement when due, the General Partners shall advance funds to the
Partnership (or shall cause the Partnership to borrow funds from other sources)
in an amount sufficient and at the time needed to allow the Partnership to pay
timely all such amounts in full. The obligation of the General Partners pursuant
to the preceding sentence shall be joint and several. Such obligation of a
General Partner shall be subordinate in right of payment to the unsecured claims
of all creditors of such General Partner, and a General Partner shall not be
required to advance funds to the extent that, after giving effect to such
advance, such General Partner would be Insolvent. A General Partner also may
lend or advance additional money to the Partnership. If a General Partner shall
make any loan or loans to the Partnership or advance money on its behalf, the
amount of any such loan or advance shall not be treated as a Capital
Contribution but shall be a debt due from the Partnership, which, however, shall
be subordinate in right of payment to the payment of the Investment Principal,
any accrued but unpaid Investment Return, and any payment required by Section
6.02 of the Purchase Agreement. The amount of any loan or advance by a General
Partner shall be repayable out of the Partnership's cash and shall bear interest
at a rate determined by the Managing General Partner, taking into consideration,
without limitation, prevailing interest rates and the interest rates such
General Partner is required to pay in the event such General Partner has itself
borrowed funds to loan or advance to the Partnership, and the terms and
conditions of such loan, including the rate of interest, shall be substantially
comparable to those the Partnership could have obtained if the lender had been
an independent third party, provided, however, that the Partnership shall not
repay any loan or advance made by a General Partner, or interest on either,
until such time as the Partnership has repaid in full the Investment Principal,
any accrued but unpaid Investment Return, and any payment required by Section
6.02 of the Purchase Agreement. Except as otherwise provided in this Section
5.6(b), no Partner shall be obligated to make any loan or advance to the
Partnership.
5.7. Indemnification of the Limited Partner.
The Partnership and each of the General Partners, jointly and severally,
covenant and agree, unconditionally, absolutely and irrevocably, to indemnify
and hold harmless the Limited Partner from and against any and all claims,
damages, losses, and reasonable expenses (including, without limitation,
reasonable fees and disbursements of counsel) arising out of or in connection
with or by reason of any Person's assertion that the liabilities, debts or other
obligations of the Partnership are liabilities, debts or other obligations of
the Limited Partner; provided, however, that no such indemnification shall be
required hereunder for any such claims, damages, losses, and expenses resulting
from (i) the gross negligence or willful misconduct of the Limited Partner or
(ii) any action taken by the Limited Partner which exposes the Limited Partner
to liability as a general partner under Delaware law. No payment shall be made
by the Partnership to the Limited Partner pursuant to this Section 5.7 until
such time as the Partnership has repaid the Investment Principal, any accrued
but unpaid Investment Return and any payment required by Section 6.02 of the
Purchase Agreement.
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SECTION 6.
ROLE OF LIMITED PARTNER
6.1 Rights or Powers.
The Limited Partner shall not have any right or power to take part in the
management or control of the Partnership or its business and affairs or to act
for or bind the Partnership in any way.
6.2 Voting Rights.
The Limited Partner shall have the right to vote only on the matters
specifically reserved for its vote or approval which are set forth in this
Agreement.
6.3 Procedure for Consent.
In any circumstances requiring the approval or consent of the Limited
Partner as specified in this Agreement, such approval or consent shall, except
as expressly provided to the contrary in this Agreement, be given or withheld in
the sole and absolute discretion of the Limited Partner and conveyed in writing
to the Managing General Partner not later than fifteen (15) Business Days after
such approval or consent was requested by the Managing General Partner. If the
Managing General Partner receives the necessary approval or consent of the
Limited Partner to such action, the Managing General Partner shall be authorized
and empowered to implement such action without further authorization by the
Limited Partner.
SECTION 7.
REPRESENTATIONS AND WARRANTIES
7.1 In General.
As of the date hereof, each of the Partners hereby makes each of the
representations and warranties applicable to such Partner, as set forth in
Section 7.2 hereof, and such warranties and representations shall survive the
execution of this Agreement.
7.2 Representations and Warranties.
Each of the Partners hereby represents and warrants that:
(a) Due Incorporation or Formation; Authorization of Agreement. Such
Partner is a corporation or limited liability company duly organized, or a
partnership duly formed, validly existing and in good standing under the laws of
the jurisdiction of its incorporation or formation and has the corporate,
company or partnership power and authority to own its property and carry on its
business as owned and carried on at the date hereof and as contemplated hereby.
Such Partner is duly licensed or qualified to do business and in good standing
in each of the jurisdictions in which the failure to be so licensed or qualified
would have a material adverse effect on its financial condition or its ability
to perform its obligations hereunder. Such Partner has the corporate, company or
partnership power and authority to execute and deliver this Agreement and to
perform its obligations hereunder and the execution, delivery and performance of
this Agreement has been duly authorized by all necessary corporate, company or
partnership action. This Agreement constitutes the legal, valid and binding
obligation of such Partner.
(b) No Conflict with Restrictions; No Default. Neither the execution,
delivery and performance of this Agreement nor the consummation by such Partner
of the transactions contemplated hereby (i) will conflict with, violate or
result in a breach of any of the terms, conditions or provisions of any law,
regulation, order, writ, injunction, decree, determination or award of any
court, any governmental department, board, agency or instrumentality, domestic
or foreign, or any arbitrator, applicable to such Partner, (ii) will conflict
with, violate, result in a breach of or constitute a default under any of the
terms, conditions or provisions of the articles of incorporation, bylaws,
limited liability company agreement or partnership agreement of such Partner or
of any material agreement or instrument to which such Partner is a party or by
which such Partner is or may be bound or to which any of its material properties
or assets is subject, (iii) will conflict with, violate, result in a breach of,
constitute a default under (whether with notice or lapse of time or both),
accelerate or permit the acceleration of the performance required by, give to
others any material interests or rights or require any consent,
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authorization or approval under any indenture, mortgage, lease agreement or
instrument to which such Partner is a party or by which such Partner is or may
be bound, or (iv) will result in the creation or imposition of any lien upon any
of the material properties or assets of such Partner, in each of the foregoing
clauses (i) through (iv), the violation, breach or conflict of which could
reasonably have a material adverse effect on such General Partner's financial
condition or its ability to perform its obligations hereunder.
(c) Governmental Authorizations. Any registration, declaration or filing
with, or consent, approval, license, permit or other authorization or order by,
any governmental or regulatory authority, domestic or foreign, that is required
in connection with the valid execution, delivery, acceptance and performance by
such Partner under this Agreement or the consummation by such Partner of any
transaction contemplated hereby has been completed, made or obtained on or
before the effective date of this Agreement.
(d) Litigation. There are no actions, suits, proceedings or investigations
pending or, to the knowledge of such Partner, threatened against or affecting
such Partner or any of such Partner's properties, assets or businesses in any
court or before or by any governmental department, board, agency or
instrumentality, domestic or foreign, or any arbitrator which could, if
adversely determined (or, in the case of an investigation could lead to any
action, suit or proceeding, which if adversely determined could) reasonably be
expected to materially impair such Partner's ability to perform its obligations
under this Agreement or to have a material adverse effect on the consolidated
financial condition of such Partner; and such Partner has not received any
currently effective notice of any default, and such Partner is not in default,
under any applicable order, writ, injunction, decree, permit, determination or
award of any court, any governmental department, board, agency or
instrumentality, domestic or foreign, or any arbitrator which could reasonably
be expected to materially impair such Partner's ability to perform its
obligations under this Agreement or to have a material adverse effect on the
consolidated financial condition of such Partner.
(e) Investment Company Act. Neither such Partner nor the Partnership will,
as a result of such Partner holding an Interest, be subject to regulation under
the Investment Company Act of 1940, as amended.
(f) Investigation. Such Partner is acquiring its Interest based upon its
own investigation, and the exercise by such Partner of its rights and the
performance of its obligations under this Agreement will be based upon its own
investigation, analysis and expertise. Such Partner's acquisition of its
Interest is being made for its own account for investment, and not with a view
to the sale or distribution thereof. Such Partner is a sophisticated investor
possessing an expertise in analyzing the benefits and risks associated with
acquiring investments that are similar to the acquisition of its Interest.
(g) Confidentiality. Except as contemplated hereby or required by law, each
Partner shall keep confidential and shall not disclose to others and shall use
its reasonable efforts to prevent its Affiliates and any of its, or its
Affiliates', present or former employees, agents, and representatives from
disclosing to others without the prior written consent of all Partners any
information which (i) pertains to this Agreement, any negotiations pertaining
thereto, any of the transactions contemplated hereby or the business of the
Partnership, or (ii) pertains to confidential or proprietary information of any
Partner or the Partnership or which any Partner has labeled in writing as
confidential or proprietary; provided that any Partner may disclose to its
Parent and its Parent's employees, agents, and representatives any information
made available to such Partner. No Partner shall use, and each Partner shall use
its best efforts to prevent any Affiliate of such Partner from using, any
information which (i) pertains to this Agreement, any negotiations pertaining
hereto, any of the transactions contemplated hereby or the business of the
Partnership, or (ii) pertains to the confidential or proprietary information of
any Partner or the Partnership or which any Partner has labeled in writing as
confidential or proprietary, except in connection with the transactions
contemplated hereby.
SECTION 8.
ACCOUNTING, BOOKS AND RECORDS
8.1 Accounting, Books and Records.
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The Partnership shall maintain at its principal place of business separate
books of account for the Partnership which shall show a true and accurate record
of all costs and expenses incurred, all charges made, all credits made and
received, and all income derived in connection with the conduct of the
Partnership and the operation of its business in accordance with GAAP and, to
the extent inconsistent therewith, in accordance with this Agreement. The
Partnership shall use the accrual method of accounting in preparation of its
annual reports and for tax purposes and shall keep its books and records
accordingly and, for purposes of federal income tax reporting, shall use the
Fiscal Year. Except as otherwise provided in this Agreement, any Partner or its
designated representative shall have the right, at any reasonable time, to have
access to and inspect and copy the contents of such books or records.
8.2 Reports.
(a) In General. The Managing General Partner shall be responsible for the
preparation of financial reports of the Partnership and the coordination of
financial matters of the Partnership with the Partnership's accountants.
(b) Annual Reports. Within ninety (90) days after the end of each Fiscal
Year, commencing with the first Fiscal Year ending after the date of this
Agreement, and at such time as distributions are made to the Partners pursuant
to Section 12.2 hereof following the occurrence of a Liquidating Event, the
Managing General Partner shall cause to be prepared and each Partner to be
furnished with the following:
(i) Financial statements accompanied by a certificate of the chief
financial officer of the Managing General Partner certifying that such
statements have been prepared and fairly stated in all material respects in
accordance with GAAP, including the following:
(A) A balance sheet, statement of income or loss, and statement of
cash flow of the Partnership as of the last day of such Fiscal Year; and
(B) A statement of the Partners' Capital Accounts and changes
therein for such Fiscal Year; and
(ii) Written certification of the chief financial officer of the
Managing General Partner that no Liquidating Event (other than the
twentieth anniversary of the formation of the Partnership) has occurred and
is continuing, or if any such event has occurred and is continuing, the
action the Managing General Partner has taken or proposes to take with
respect thereto.
(c) Quarterly Reports. Within sixty (60) days after the close of each
Fiscal Quarter commencing with the Fiscal Quarter ending March 31, 1994 (other
than the last Fiscal Quarter of a Fiscal Year), the Managing General Partner
shall cause to be prepared and each Partner furnished with each of the
following:
(i) Financial statements accompanied by a certificate of the chief
financial officer of the Managing General Partner certifying that such
statements have been prepared and fairly stated in all material respects in
accordance with GAAP, including the following:
(A) A balance sheet of the Partnership as of the last day of such
Fiscal Quarter, statement of income and loss and statement of cash flow
for such Fiscal Quarter; and
(B) A statement of the Partners' Capital Accounts and changes
therein for such Fiscal Quarter; and
(ii) Written certification of the chief financial officer of the
Managing General Partner with respect to the matters described in Section
8.2(b)(ii) hereof.
(d) Portfolio Certificates. Within fifteen (15) days following the close of
each Fiscal Quarter of the Partnership commencing with the Fiscal Quarter ending
December 31, 1993, the Managing General Partner shall cause to be prepared and
each Partner furnished with a Portfolio Certificate as of the last day of such
Fiscal Quarter. In the event that a Triggering Event occurs and is continuing,
within five (5) days following each calendar month, the Managing General Partner
shall cause to be prepared and each Partner furnished with a Portfolio
Certificate as of the last day of such calendar month.
8.3 Tax Information.
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(a) All necessary tax information shall be delivered to each Partner within
ninety (90) days after the end of each Fiscal Year. Each Partner agrees that it
will report all Partnership taxable income, gain, loss, deduction and credit for
each Fiscal Year in the manner reflected on the Partnership's U.S. Partnership
Return of Income (Form 1065) and related Schedule K-1 furnished to such Partner
for such year.
(b) The Managing General Partner shall give prompt notice to each Partner
upon the receipt of (i) written notice that the Internal Revenue Service or any
state or local taxing authority intends to examine the Partnership's income tax
returns for any year; (ii) written notice of commencement of an administrative
proceeding at the Partnership level related to the Partnership under Section
6223 of the Code; (iii) written notice or any final partnership administrative
adjustment relating to the Partnership pursuant to a proceeding under Section
6223 of the Code; (iv) any request from the Internal Revenue Service or any
comparable state or local agency for waiver of any applicable statute of
limitation with respect to the filing of any tax return by the Partnership; and
(v) any Form 5701 or comparable state or local audit adjustment notices as soon
as received, with copies of such notices provided to each Partner. In addition,
each Partner will be notified of and allowed to attend any opening and closing
conferences regarding any administrative proceeding at the Partnership level
relating to the Partnership under Section 6223 of the Code, and the Managing
General Partner will provide copies to each Partner of any correspondence with
the Internal Revenue Service or comparable state or local agency regarding legal
positions taken on audit issues by the Managing General Partner. Within ninety
(90) days after receipt of notice of a final partnership administrative
adjustment, the Managing General Partner shall notify each Partner if it does
not intend to file for judicial review with respect to such adjustment.
SECTION 9.
AMENDMENTS; MEETINGS
9.1 Amendments.
Amendments to this Agreement may be proposed by any Partner. Following such
proposal, the Managing General Partner shall submit to the Partners any such
proposed amendment, provided that counsel for the Partnership shall have
approved of the same in writing as to form, and the Managing General Partner
shall include in any such submission a recommendation as to the proposed
amendment. The Managing General Partner shall seek the written vote of the
Partners on the proposed amendment or shall call a meeting to vote thereon and
to transact any other business that it may deem appropriate. A proposed
amendment shall be adopted and be effective as an amendment hereto if it
receives the affirmative vote of a majority of the General Partners, except
that, if such proposed amendment adversely affects the Limited Partner, it also
must receive the affirmative vote of the Limited Partner.
9.2 Meetings of the Partners.
(a) Meetings of the Partners may be called by the Managing General Partner
and shall be called upon the written request of any Partner. The call shall
state the nature of the business to be transacted. Notice of any such meeting
shall be given to all Partners not less than ten (10) Business Days or more than
thirty (30) days prior to the date of such meeting. Partners may vote in person
or by proxy at such meeting. Whenever the vote or consent of Partners is
permitted or required under this Agreement, such vote or consent may be given at
a meeting of Partners or in such other manner that may be determined by the
Managing General Partner. Except as otherwise expressly provided in this
Agreement, the vote of a majority of the Partners shall control.
(b) For the purpose of determining the Partners entitled to vote on, or to
vote at, any meeting of the Partners or any adjournment thereof, the Managing
General Partner or the Partner requesting such meeting may fix, in advance, a
date as the record date for any such determination. Such date shall not be more
than thirty (30) days or less than ten (10) Business Days before any such
meeting.
(c) Each Partner may authorize any Person or Persons to act for it by proxy
on all matters in which a Partner is entitled to participate, including waiving
notice of any meeting, or voting or participating at a meeting. Every proxy must
be signed by the Partner or its attorney-in-fact. No proxy shall be valid after
the expiration of eleven (11) months from the date thereof unless otherwise
provided in the proxy. Every proxy shall be revocable at the pleasure of the
Partner executing it.
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SECTION 10.
TRANSFERS, RETIREMENTS
AND WITHDRAWALS
10.1 Restriction on Transfers.
Except as provided in Section 10 or 11 hereof, no Partner shall Transfer
all or any portion of its Interest. Any purported Transfer of an Interest that
is not a Permitted Transfer shall be null and void and of no force or effect
whatsoever. Each Partner hereby acknowledges the reasonableness of the
restrictions on Transfer imposed by this Agreement in view of the Partnership
purposes and the relationship of the Partners. Accordingly, the restrictions on
Transfer contained herein shall be specifically enforceable.
10.2 Permitted Transfers.
Subject to the conditions and restrictions set forth in Section 10.3
hereof, the Limited Partner may at any time Transfer all or any portion of its
Interest to (a) any other Partner or Wholly Owned Affiliate of another Partner,
(b) any Wholly Owned Affiliate of the transferor, (c) the transferor's
administrator or trustee to whom such interest is transferred involuntarily by
operation of law, (d) any Person exercising the purchase option described in
Section 10.10 hereof, or (e) any Person approved by all of the Partners (any
such Transfer under this Section 10.2 being referred to in this Agreement as a
'Permitted Transfer').
10.3 Conditions to Permitted Transfers.
A Transfer shall not be treated as a Permitted Transfer under Section 10.2
hereof unless and until the following conditions are satisfied:
(a) Except in the case of a Transfer involuntarily by operation of law, the
transferor and transferee shall execute and deliver to the Partnership (i) such
documents and instruments of conveyance as may be necessary or appropriate in
the opinion of counsel to the Partnership to effect such Transfer and to confirm
the agreement of the transferee to be bound by the provisions of this Agreement,
and (ii) a confidentiality agreement in a form acceptable to the Managing
General Partner. In the case of a Transfer of Interests involuntarily by
operation of law, the Transfer shall be confirmed by presentation to the
Partnership of legal evidence of such Transfer, in form and substance
satisfactory to counsel to the Partnership. In all cases, the Partnership shall
be reimbursed by the transferor and/or transferee for all costs and expenses
that it reasonably incurs in connection with such Transfer.
(b) Except in the case of a Transfer involuntarily by operation of law, the
transferor shall furnish to the Partnership an opinion of counsel, which counsel
and opinion shall be reasonably satisfactory to the Managing General Partner,
that the Transfer will not cause the Partnership to terminate for federal income
tax purposes under Code Section 708.
(c) The transferor and transferee shall furnish the Partnership with the
transferee's taxpayer identification number, sufficient information to determine
the transferee's initial tax basis in the Interest transferred, and any other
information reasonably necessary to permit the Partnership to file all required
federal and state tax returns and other legally required information statements
or returns. Without limiting the generality of the foregoing, the Partnership
shall not be required to make any distribution otherwise provided for in this
Agreement with respect to any transferred Interest until it has received such
information.
(d) Except in the case of a Transfer involuntarily by operation of law, the
transferor shall provide an opinion of counsel, which opinion and counsel shall
be reasonably satisfactory to the Managing General Partner, that such Transfer
will not violate any applicable laws regulating the Transfer of securities.
(e) Except in the case of a Transfer involuntarily by operation of law, the
transferor shall provide an opinion of counsel, which opinion and counsel shall
be reasonably satisfactory to the Managing General Partner, that such Transfer
will not cause the Partnership to be subject to regulation under the Investment
Company Act of 1940.
10.4 Prohibited Transfers.
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If the Partnership is required to recognize a Transfer that is not a
Permitted Transfer (or if the partnership, in its sole discretion, elects to
recognize a Transfer that is not a Permitted Transfer), the Interest Transferred
shall be strictly limited to the transferor's rights to allocations and
distributions as provided by this Agreement with respect to the transferred
Interest, which allocations and distributions may be applied (without limiting
any other legal or equitable rights of the Partnership) to satisfy any debts,
obligations, or liabilities for damages that the transferor or transferee of
such Interest may have to the Partnership.
In the case of a Transfer or
attempted Transfer of an Interest that is not a Permitted Transfer, the parties
engaging or attempting to engage in such Transfer shall be liable to indemnify
and hold harmless the Partnership and the other Partners from all cost,
liability, and damage that any of such indemnified Partners may incur
(including, without limitation, tax liabilities, attorneys fees and expenses) as
a result of such Transfer or attempted Transfer and efforts to enforce the
indemnity granted hereby.
10.5 Rights of Unadmitted Assignees.
A Person who acquires an Interest but who is not admitted as a substituted
Partner pursuant to Section 10.6 hereof shall be entitled only to allocations
and distributions with respect to such Interest in accordance with this
Agreement, and shall have no right to any information or accounting of the
affairs of the Partnership, shall not be entitled to inspect the books or
records of the Partnership, and shall not have any of the rights of a Partner
under the Act or this Agreement.
10.6 Admission of Substituted Partners.
Subject to the other provisions of this Section 10, a transferee of an
Interest may be admitted to the Partnership as a substituted Partner only upon
satisfaction of the conditions set forth in this Section 10.6:
(a) The Managing General Partner consents to such admission, which consent
may be given or withheld in the sole and absolute discretion of the Managing
General Partner;
(b) The Interest with respect to which the transferee is being admitted was
acquired by means of a Permitted Transfer;
(c) The transferee becomes a party to this Agreement as a Partner and
executes such documents and instruments as the Managing General Partner may
reasonably request (including, without limitation, amendments to the
Certificate) as may be necessary or appropriate to confirm such transferee as a
Partner in the Partnership and such transferee's agreement to be bound by the
terms and conditions hereof;
(d) The transferee pays or reimburses the Partnership for all reasonable
legal, filing, and publication costs that the Partnership incurs in connection
with the admission of the transferee as a Partner with respect to the
Transferred Interest;
(e) If the transferee is a partnership, limited liability company or
corporation, the transferee provides the Partnership with evidence satisfactory
to counsel for the Partnership that such transferee has made each of the
representations and undertaken each of the warranties described in Section 7
hereof; and
(f) In the event that the transferee of an Interest from the Managing
General Partner is admitted as the Managing General Partner hereunder, such
transferee shall be deemed admitted to the Partnership as the Managing General
Partner immediately prior to the Transfer, and such transferee shall continue
the business of the Partnership without dissolution.
10.7 Representations Regarding Transfers.
Each Partner hereby represents and warrants to the Partnership and the
Managing General Partner that such Partner's acquisition of Interests hereunder
is made as principal for such Partner's own account and not for resale or
distribution of such Interests.
10.8 Partial Retirement of Limited Partner's Interest in the Partnership.
(a) In General. After October 31, 1994, the Managing General Partner may
cause the Partnership to retire a portion (but not all) of the Limited Partner's
Interest in the Partnership in accordance with this Section 10.8 by giving
written notice of such retirement to the Limited Partner (a 'Retirement
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Notice') and copies of such Retirement Notice to all other Partners. The
Retirement Notice shall state (A) the percentage of the Interest of the Limited
Partner that is to be retired (the 'Retirement Percentage'), and (B) the date on
which the portion of the Limited Partner's Interest is to be retired (the
'Retirement Date'), which date shall not be less than five (5) Business Days or
more than sixty (60) Business Days after the date on which the Retirement Notice
was given. The Managing General Partner may cause the retirement of a portion of
the Limited Partner's Interest in accordance with this Section 10.8(a) only to
the extent that the aggregate Interest of the Limited Partner in the capital and
Profits of the Partnership is after such retirement not less than one percent
(1%).
(b) Retirement Adjustments and Procedures. (i) In the event that a portion
of the Limited Partner's Interest in the Partnership is retired pursuant to this
Section 10.8, (x) the value of the Partnership's assets shall be determined in
accordance with Section 10.8(b)(ii) hereof and the Gross Asset Values of all
Partnership assets shall be adjusted pursuant to subparagraph (ii) of the
definition of Gross Asset Value in Section 1.8 hereof as of the day preceding
the Retirement Date, and (y) Profits, Losses and other items of Partnership
income, gain, loss or deduction for the period beginning on the first day of the
Fiscal Year during which the Retirement Date occurs and ending on the day
preceding the Retirement Date shall be allocated among the Partners pursuant to
Section 3 hereof as if the day preceding the Retirement Date were the end of
such Fiscal Year. On the applicable Retirement Date, the Partnership shall
distribute to the Limited Partner an amount of cash and/or Gross Asset Value of
other property (other than property described in clause (ix) of the definition
of Permitted Investments in Section 1.8 hereof) (the mix of cash and/or property
to be determined by the Managing General Partner in its sole discretion) which
equals the product of the Retirement Percentage and the balance in the Limited
Partner's Capital Account (taking into account the adjustments and allocations
required by the first sentence of this Section 10.8(b)(i)).
(ii) For purposes of determining the amount of any adjustment to the Gross
Asset Values of Partnership assets pursuant to subparagraph (ii) or (iii) of the
definition of Gross Asset Value in Section 1.8 hereof, the fair market value of
any stocks, securities or other financial instruments held by the Partnership
shall be determined by the Managing General Partner using principles consistent
with any prior valuation of such stocks, securities or other financial
instruments and based, to the extent possible, on publicly available
information. In the absence of publicly available information, such
determination shall be based on market prices as quoted by a reputable
securities dealer selected by the Managing General Partner.
(iii) In the event that a portion of the Limited Partner's Interest in the
Partnership is retired pursuant to this Section 10.8, distributions shall be
made to the Limited Partner, and the Limited Partner's Interest (or such portion
thereof) in the Partnership shall be retired, at 10:00 a.m. on the Retirement
Date.
(c) Treatment as Partnership Distribution. The Partnership and the General
Partners agree to (1) structure the retirement of the Limited Partner's Interest
under this Section 10.8 as a distribution under Section 731 of the Code for
federal income tax purposes, (2) treat such retirement as distributions under
Section 731 of the Code for federal income tax purposes, and (3) not treat such
retirement as a purchase and sale under Sections 741 and 1001 of the Code.
10.9 Requested Withdrawal and Complete Retirement.
(a) Withdrawal Request. At any time after the commencement of the
Partnership term, the Limited Partner may request to withdraw entirely from the
Partnership by giving written notice of such election to the Managing General
Partner (a 'Limited Partner Withdrawal Notice') and copies of such Limited
Partner Withdrawal Notice to all other Partners, which notice shall state the
date on which the Limited Partner is to withdraw (the 'Limited Partner
Withdrawal Date'). Upon such request, the Managing General Partner, in its sole
discretion, shall decide whether to permit such withdrawal and shall, within
thirty (30) Business Days of receipt of the Limited Partner Withdrawal Notice,
notify all Partners of its decision; provided, however, that if any request to
withdraw from the Partnership that is made after January 31, 1997 is denied by
the Managing General Partner, the Partnership shall be dissolved, wound up and
liquidated in accordance with Section 12.2 hereof.
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(b) Complete Retirement. After April 30, 1997, the Managing General Partner
may cause the Partnership to retire all of the Limited Partner's Interest in the
Partnership in accordance with this Section 10.9(b) by giving written notice of
such retirement to the Limited Partner (a 'Complete Retirement Notice') and
copies of such Complete Retirement Notice to all other Partners. The Complete
Retirement Notice shall state the date on which the Limited Partner's Interest
is to be retired (the 'Complete Retirement Date'), which date shall not be less
than thirty (30) Business Days or more than sixty (60) Business Days after the
date on which the Complete Retirement Notice was given. Upon the receipt of a
Complete Retirement Notice, the Limited Partner shall have the right to give a
Limited Partner Withdrawal Notice to the Managing General Partner no later than
ten (10) Business Days prior to the Complete Retirement Date for the purpose of
designating the property it wishes to receive upon a complete retirement.
(c) Distributions Upon Withdrawal or Complete Retirement. (i) In the event
that the Limited Partner's request to withdraw from the Partnership is approved
by the Managing General Partner or that the Limited Partner receives a Complete
Retirement Notice, (x) the value of the Partnership's assets shall be determined
in accordance with Section 10.8(b)(ii) hereof and the Gross Asset Values of all
Partnership assets shall be adjusted pursuant to subparagraph (ii) of the
definition of Gross Asset Value in Section 1.8 hereof as of the day preceding
the Limited Partner Withdrawal Date or the Complete Retirement Date, and (y)
Profits, Losses and other items of Partnership income, gain, loss or deduction
for the period beginning on the first day of the Fiscal Year during which the
Limited Partner Withdrawal Date or the Complete Retirement Date occurs and
ending on the day preceding the Limited Partner Withdrawal Date or the Complete
Retirement Date shall be allocated pursuant to Section 3 hereof as if the day
preceding the Limited Partner Withdrawal Date or the Complete Retirement Date
were the end of such Fiscal Year. On the applicable Limited Partner Withdrawal
Date or the Complete Retirement Date, the Partnership shall distribute to such
Partner an amount of cash and/or Gross Asset Value of other property (other than
property described in clause (ix) of the definition of Permitted Investments in
Section 1.8 hereof) (the mix of cash and/or property to be determined in
accordance with Section 10.9(d) hereof) which equals the Limited Partner's
Capital Account (taking into account the adjustments and allocations required by
the first sentence of this Section 10.9(c)(i)).
(ii) In the event that a Limited Partner withdraws entirely or is
completely retired from the Partnership pursuant to this Section 10.9,
distributions shall be made to such Limited Partner, and such Limited Partner's
Interest in the Partnership shall be retired, at 10:00 a.m. on the Limited
Partner Withdrawal Date or the Complete Retirement Date.
(d) Property Distributed Upon Withdrawal or Complete Retirement. The
Limited Partner may designate in its Limited Partner Withdrawal Notice to the
Managing General Partner which property it wishes to receive upon withdrawal or
complete retirement from the Partnership. If the Limited Partner fails to so
designate, the Managing General Partner shall determine, in its sole discretion,
the property (excluding property described in clause (ix) of the definition of
Permitted Investments in Section 1.8 hereof) to be distributed to the Limited
Partner. If the Managing General Partner receives such designation notice from
the Limited Partner and does not reject such designation in writing within five
(5) Business Days after receiving notice thereof, such designation shall
control. If the Managing General Partner rejects such designation in a timely
fashion, such rejection shall contain an alternate designation of property (but
excluding property described in clause (ix) of the definition of Permitted
Investments in Section 1.8 hereof). If the Limited Partner rejects such
alternate designation within five (5) Business Days of receiving notice thereof
then, except to the extent the Managing General Partner accepts the Limited
Partner's original designation, or the Partners (including the Limited Partner)
unanimously agree otherwise, the Partnership shall be dissolved, wound up and
liquidated in accordance with Section 12.2 hereof.
10.10 Distributions and Allocations in Respect of Transferred and Retired
Interests.
(a) Transferred Interests. If all or any portion of an Interest is
Transferred during any Fiscal Year in compliance with the provisions of this
Section 10, Profits, Losses, each item of either, and all other items for such
Fiscal Year attributable to the Transferred Interest shall be allocated between
the transferor and the transferee by taking into account their varying
Percentage Interests during the Fiscal Year in
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accordance with Code Section 706(d), using any conventions permitted by law and
selected by the Managing General Partner. All distributions on or before the
date of such Transfer shall be made to the transferor, and all distributions
thereafter shall be made to the transferee. Solely for purposes of making such
allocations and distributions, the Partnership shall recognize such Transfer not
later than the end of the calendar month during which it is given notice of such
Transfer, provided that, if the Partnership is given notice of a Transfer at
least ten (10) Business Days prior to the Transfer, the Partnership shall
recognize such Transfer as of the day preceding the date of such Transfer, and
provided further that if the Partnership does not receive a notice stating the
date such Interest was transferred and such other information as the Managing
General Partner may reasonably require within thirty (30) days after the end of
the Fiscal Year during which the Transfer occurs, then all such items shall be
allocated, and all distributions shall be made, to the Person who, according to
the books and records of the Partnership, was the owner of the Interest on the
last day of such Fiscal Year.
(b) Retired Interests. If all or any portion of any Interest is retired
during any Fiscal Year in accordance with the provisions of this Section 10 or
Section 11 hereof, (i) allocations of Profits, Losses, each item of either, and
all other items for such Fiscal Year, as provided in Section 3 hereof, shall be
modified in accordance with Code Section 706(d) in such manner as the Managing
General Partner deems appropriate to reflect the revised Percentage Interests of
the Partners following such retirement and (ii) distributions of Net Cash Flow,
as provided in Section 4.1 hereof, shall be modified in such manner as the
Managing General Partner deems appropriate to reflect such retirement.
(c) No Liability. Neither the Partnership nor any General Partner shall
incur any liability for making allocations and distributions in accordance with
the provisions of this Section 10.10, whether or not any General Partner or the
Partnership has knowledge of any Transfer or retirement of ownership of any
Interest.
SECTION 11.
GENERAL PARTNER WITHDRAWAL, TERMINATION, AND ELECTION
11.1 Covenant Not to Withdraw, Transfer, or Dissolve.
Except as otherwise permitted by this Agreement, each General Partner
hereby covenants and agrees not to (a) take any action to file a certificate of
dissolution or its equivalent with respect to itself, (b) withdraw or attempt to
withdraw from the Partnership, (c) exercise any power under the Act to dissolve
the Partnership, (d) Transfer all or any portion of its Interest as a General
Partner, or (e) petition for judicial dissolution of the Partnership. Further,
each General Partner hereby covenants and agrees to continue to carry out the
duties of a General Partner hereunder until the Partnership is dissolved and
liquidated pursuant to Section 12 hereof.
11.2. Permitted Withdrawal.
(a) General Partner Election. A General Partner (but no more than two of
the General Partners set forth in Section 2.1 may withdraw pursuant to this
Section 11.2) may elect to withdraw from the Partnership and require the
Partnership to retire its entire Interest by giving written notice of such
election to all other Partners (a 'General Partner Withdrawal Notice'), which
notice shall state the date on which such General Partner is to withdraw (the
'General Partner Withdrawal Date').
(b) Distributions Upon Withdrawal. In the event that a General Partner
elects to withdraw from the Partnership, (x) the value of the Partnership's
property shall be determined in accordance with Section 10.8(b)(ii) hereof and
the Gross Asset Values of the property shall be adjusted pursuant to
subparagraph (ii) of the definition of Gross Asset Value in Section 1.8 hereof
as of the day preceding the General Partner Withdrawal Date, and (y) Profits,
Losses and other items of Partnership income, gain, loss or deduction for the
period beginning on the first day of the Fiscal Year during which the General
Partner Withdrawal Date occurs and ending on the day preceding the General
Partner Withdrawal Date shall be allocated pursuant to Section 3 as if the day
preceding the General Partner Withdrawal Date were the end of such Fiscal Year.
On the applicable General Partner Withdrawal Date or as shortly thereafter as
practicable, the Partnership shall distribute to such General Partner an amount
of cash and/or Gross Asset Value of other property (the mix of cash and/or
property to be determined by the Managing General Partner in its sole
discretion) which equals the balance in the
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withdrawing General Partner's Capital Account (taking into account the
adjustments and allocations required by this Section 11.2(b)). Distributions
shall be made to such General Partner, and its Interest in the Partnership shall
be retired, at 10:00 a.m. on the General Partner Withdrawal Date.
(c) Admission of New General Partner. In the event that a General Partner
elects to withdraw from the Partnership and there is no other General Partner at
such time, the withdrawing General Partner shall, prior to the General Partner
Withdrawal Date, cause a substitute General Partner to be admitted to the
Partnership.
11.3 Termination of Status as General Partner.
A General Partner shall cease to be a General Partner upon the first to
occur of (i) the Bankruptcy of such Partner, (ii) the involuntary Transfer by
operation of law of such General Partner's entire Interest in the Partnership,
(iii) the Transfer of such Partner's entire Interest as a General Partner, or
(iv) the vote of a majority of the other Partners to remove such General Partner
after such General Partner has attempted to make a Transfer of its Interest,
committed a material breach of this Agreement or its representations and
warranties hereunder, or committed any other act or suffered any other condition
that would justify a decree of dissolution of the Partnership under the laws of
the State of Delaware. In the event a Person ceases to be a General Partner
without having Transferred its entire Interest as a General Partner, such Person
shall be treated as an unadmitted transferee of an Interest as a result of a
Permitted Transfer of an Interest pursuant to Section 10.5 hereof.
If a Person ceases to be a General Partner for any reason hereunder, such
Person shall continue to be liable as a General Partner to the extent provided
by Delaware law for all debts and obligations of the Partnership existing at the
time such Person ceases to be a General Partner, regardless of whether, at such
time, such debts or liabilities were known or unknown, actual or contingent. A
Person shall not be liable as a General Partner for Partnership debts and
obligations arising after such Person ceases to be a General Partner. Any debts,
obligations, or liabilities in damages to the Partnership of any Person who
ceases to be a General Partner shall be collectible by any legal means and the
Partnership is authorized, in addition to any other remedies at law or in
equity, to apply any amounts otherwise distributable or payable by the
Partnership to such Person to satisfy such debts, obligations, or liabilities.
11.4 Election of New General Partners.
Provided the Partnership has one General Partner, any Partner may nominate
one or more Persons for election as additional General Partners. The election of
an additional General Partner shall require an affirmative vote of all of the
Partners.
SECTION 12.
DISSOLUTION AND WINDING UP
12.1 Liquidating Events.
The Partners hereby agree that the Partnership shall dissolve and commence
winding up and liquidating upon the first to occur of any of the following
('Liquidating Events'):
(a) The twentieth (20th) anniversary of the formation of the Partnership;
(b) The sale of all of the Partnership property;
(c) The unanimous vote of the Partners to dissolve, wind up, and liquidate
the Partnership;
(d) The happening of any other event that, in the sole opinion of the
Managing General Partner, makes it unlawful, impossible, or impractical to carry
on the business of the Partnership;
(e) The happening of any event that causes there to be no general partner
under the Act;
(f) The Bankruptcy of any General Partner;
(g) The failure of the Partnership to repay the Purchaser the Investment
Principal (along with any accrued but unpaid Investment Return and any payment
required by Section 6.02 of the Purchase Agreement) upon the occurrence of a
Mandatory Retirement Event in accordance with Section 6.01 of
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the Purchase Agreement and the instructions by the Purchaser pursuant to Section
6.01(b) of the Purchase Agreement to liquidate the property of the Partnership;
(h) The denial by the Managing General Partner of the Limited Partner's
request to withdraw from the Partnership after January 31, 1997 as provided in
Section 10.9(a) hereof; or
(i) The failure of the Managing General Partner to timely accept the
Limited Partner's original designation after the Limited Partner has rejected
the Managing General Partner's alternate designation (and the Partners' failure
to unanimously agree otherwise), as provided in Section 10.9(d) hereof.
The Partnership shall not be dissolved or required to be wound up if (x)
upon the occurrence of any event set forth in Section 12.1(e) hereof, there is
at least one remaining General Partner and that General Partner carries on the
business of the Partnership (any such remaining General Partner being hereby
authorized to carry on the business of the Partnership), or (y) upon the
occurrence of any event set forth in Section 12.1(e) or (f) hereof, within
ninety (90) days after such event all remaining Partners agree in writing to
continue the business of the Partnership and to the appointment, effective as of
the date of such event, of one or more additional General Partners.
12.2 Winding Up.
Upon the occurrence of a Liquidating Event, the Partnership shall continue
solely for the purposes of winding up its affairs in an orderly manner,
liquidating its assets, and satisfying the claims of its creditors and Partners
and no Partner shall take any action that is inconsistent with, or not necessary
to or appropriate for, the winding up of the Partnership's business and affairs.
To the extent not inconsistent with the foregoing, all covenants and obligations
in this Agreement shall continue in full force and effect until such time as the
Partnership property has been distributed pursuant to this Section 12.2 and the
Certificate has been cancelled in accordance with the Act. The Managing General
Partner or, in the event there is no Managing General Partner or of a Bankruptcy
of the Managing General Partner, a General Partner (or, in the event there is no
remaining General Partner or in the event of a Bankruptcy of the remaining
General Partner, any Person elected by the Limited Partner) shall be responsible
for overseeing the winding up and dissolution of the Partnership, shall take
full account of the Partnership's liabilities and property, shall cause the
Partnership property to be liquidated as promptly as is consistent with
obtaining the fair market value thereof and shall cause the Partnership property
or the proceeds therefrom, to the extent sufficient therefor, to be applied and
distributed in the following order:
(a) First, to the payment and discharge of all of the Partnership's debts,
obligations and liabilities (including under the Purchase Agreement) other than
those owing the Partners;
(b) Second, to the payment and discharge of all of the Partnership's debts
and liabilities to the Partners; and
(c) The balance, if any, to the Partners in accordance with their positive
Capital Accounts, after giving effect to all contributions, distributions, and
allocations for all periods.
No Partner shall receive any additional compensation for any services
performed pursuant to this Section 12. Each General Partner understands and
agrees that by accepting the provisions of this Section 12.2 setting forth the
priority of the distribution of the assets of the Partnership to be made upon
its liquidation, such General Partner expressly waives any right which it, as a
creditor of the Partnership, might otherwise have under the Act to receive
distributions of assets pari passu with the other creditors of the Partnership
in connection with a distribution of assets of the Partnership in satisfaction
of any liability of the Partnership, and hereby subordinates to said creditors
any such right.
12.3 Compliance With Certain Requirements of Regulations Concerning Deficit
Capital Accounts.
In the event the Partnership is 'liquidated' within the meaning of Section
1.704-1(b)(2)(ii)(g) of the Regulations, (a) distributions shall be made
pursuant to this Section 12 to the Partners who have positive Capital Accounts
in compliance with Section 1.704-1(b)(2)(ii)(b)(2) of the Regulations, and (b)
if any General Partner's Capital Account has a deficit balance (after giving
effect to all contributions, distributions, and allocations for all taxable
years, including the year during which such liquidation occurs), such General
Partner shall contribute to the capital of the Partnership the amount necessary
to restore such deficit balance to zero in compliance with Section
1.704-l(b)(2)(ii)(b)(3) of the Regulations.
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Such obligation of a General Partner to contribute shall be subordinate in right
of payment to the unsecured claims of all creditors of such General Partner, and
a General Partner shall not be required to contribute funds to the Partnership
pursuant to this Section 12.3 to the extent that, after giving effect to such
contribution, such General Partner would be Insolvent. In the discretion of the
Managing General Partner, a pro rata portion of the distributions that would
otherwise be made to the Partners pursuant to Section 12.2(c) hereof may be
withheld to provide a reasonable reserve for Partnership liabilities (contingent
or otherwise) and to reflect the unrealized portion of any installment
obligations owed to the Partnership, provided that such withheld amounts shall
be distributed to the Partners as soon as practicable.
12.4 Deemed Distribution and Recontribution.
Notwithstanding any other provision of this Section 12, in the event the
Partnership is liquidated within the meaning of Section 1.704-1(b)(2)(ii)(g) of
the Regulations but no Liquidating Event has occurred, the Partnership property
shall not be liquidated, the Partnership's liabilities shall not be paid or
discharged, and the Partnership's affairs shall not be wound up. Instead, solely
for federal income tax purposes, the Partnership shall be deemed to have
distributed the Partnership property in kind to the Partners (on a pro rata
basis), who shall be deemed to have assumed and taken subject to all Partnership
liabilities, all in accordance with their respective Capital Accounts and, if
any General Partner's Capital Account has a deficit balance (after giving effect
to all contributions, distributions, and allocations for all Fiscal Years,
including the Fiscal Year during which such liquidation occurs), such General
Partner shall contribute to the capital of the Partnership the amount necessary
to restore such deficit balance to zero in compliance with Section
1.704-1(b)(2)(ii)(b)(3) of the Regulations. Such obligation of a General Partner
to contribute shall be subordinate in right of payment to the unsecured claims
of all creditors of such General Partner, and a General Partner shall not be
required to contribute funds to the Partnership pursuant to this Section 12.4 to
the extent that, after giving effect to such contribution, such General Partner
would be Insolvent. Immediately thereafter, the Partners shall be deemed to have
recontributed the Property in kind to the Partnership, which shall be deemed to
have assumed and taken subject to all such liabilities.
12.5 Rights of Partners.
Except as otherwise provided in this Agreement, (a) each Partner shall look
solely to the assets of the Partnership for the return of its Capital
Contribution and shall have no right or power to demand or receive property
other than cash from the Partnership, and (b) no Partner shall have priority
over any other Partner as to the return of its Capital Contributions. In the
event the Limited Partner believes that the Managing General Partner is unduly
delaying the winding up and liquidation of the Partnership following the
occurrence of a Liquidating Event, the Limited Partner may compel such
liquidation using any appropriate means, including seeking a court order or
other judicial relief with respect thereto.
12.6 Notice of Dissolution.
In the event a Liquidating Event occurs or an event occurs that results in
a dissolution of the Partnership, the Managing General Partner shall, within
thirty (30) days thereafter, provide written notice thereof to each of the
Partners and to all other parties with whom the Partnership regularly conducts
business (as determined in the discretion of the Managing General Partner).
12.7 Form of Liquidating Distributions.
For purposes of making distributions required by Section 12.2 hereof, the
Managing General Partner may determine whether to distribute all or any portion
of the Partnership property in-kind or to sell all or any portion of the
Partnership property to any Person, including the Managing General Partner and
its Affiliates, and distribute the proceeds therefrom.
SECTION 13.
POWER OF ATTORNEY
13.1 Managing General Partner as Attorney-In-Fact.
Each Partner hereby makes, constitutes, and appoints the Managing General
Partner and each successor Managing General Partner, with full power of
substitution and resubstitution, its true and
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lawful attorney-in-fact for it and in its name, place, and stead and for its use
and benefit, to sign, execute, certify, acknowledge, swear to, file, and record
(a) all certificates of limited partnership, amended name or similar
certificates, and other certificates and instruments (including counterparts of
this Agreement) which the Managing General Partner may deem necessary or
appropriate to be filed by the Partnership under the laws of the State of
Delaware or any other state or jurisdiction in which the Partnership is doing or
intends to do business; (b) all certificates of cancellation and other
instruments which the Managing General Partner may deem necessary or appropriate
to effect the dissolution and termination of the Partnership pursuant to the
terms of this Agreement; and (c) any other instrument which is now or may
hereafter be required by law to be filed on behalf of the Partnership or is
deemed necessary or appropriate by the Managing General Partner to carry out
fully the provisions of this Agreement in accordance with its terms. Each
Partner authorizes each such attorney-in-fact to take any further action which
such attorney-in-fact shall consider necessary or advisable in connection with
any of the foregoing, hereby giving each such attorney-in-fact full power and
authority to do and perform each and every act or thing whatsoever requisite or
advisable to be done in connection with the foregoing as fully as such Partner
might or could do personally, and hereby ratifying and confirming all that any
such attorney-in-fact shall lawfully do or cause to be done by virtue thereof or
hereof.
13.2 Nature as Special Power.
The power of attorney granted pursuant to this Section 13:
(a) Is a special power of attorney coupled with an interest and is
irrevocable;
(b) May be exercised by any such attorney-in-fact by listing the Partners
executing any agreement, certificate, instrument, or other document with the
single signature of any such attorney-in-fact acting as attorney-in-fact for
such Partners; and
(c) Shall survive the Bankruptcy, insolvency, dissolution, or cessation of
existence of a Partner and shall survive the delivery of an assignment by a
Partner of the whole or a portion of its Interest, except that where the
assignment is of such Partner's entire Interest and the assignee, with the
consent of the Managing General Partner, is admitted as a substituted Partner,
the power of attorney shall survive the delivery of such assignment for the sole
purpose of enabling any such attorney-in-fact to effect such substitution.
SECTION 14.
MISCELLANEOUS
14.1 Notices.
Any notice, payment, demand, or communication required or permitted to be
given by any provision of this Agreement shall be in writing and sent by
overnight courier, or by telephone or facsimile, if such telephone conversation
or facsimile is followed by a hard copy of the telephone conversation or
facsimiled communication sent by overnight courier, charges prepaid and
addressed as follows, or to such other address as such Person may from time to
time specify by notice to the Partners:
(a) If to the Partnership, to the Partnership at the address set forth in
Section 1.4 hereof.
(b) If to RHDC, to the address set forth in Section 2.1 hereof.
(c) If to DBI, to the address set forth in Section 2.1 hereof.
(d) If to IMS, to the address set forth in Section 2.1 hereof.
(e) If to RBDB, to the address set forth in Section 2.2 hereof. Any such
notice shall be deemed to be delivered, given, and received for all purposes as
of the date so delivered. Any Person may from time to time specify a different
address by notice to the Partnership and the Partners.
14.2 Binding Effect.
Except as otherwise provided in this Agreement, every covenant, term, and
provision of this Agreement shall be binding upon and inure to the benefit of
the Partners and their respective successors, transferees, and assigns.
14.3 Construction.
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Every covenant, term, and provision of this Agreement shall be construed
according to its fair meaning and not strictly for or against any Partner. The
terms of this Agreement are intended to embody the economic relationship among
the Partners and shall not be subject to modification by, or be conformed with,
any actions by the Internal Revenue Service except as this Agreement may be
explicitly so amended.
14.4 Time.
Time is of the essence with respect to this Agreement.
14.5 Headings.
Section and other headings contained in this Agreement are for reference
purposes only and are not intended to describe, interpret, define, or limit the
scope, extent, or intent of this Agreement or any provision hereof.
14.6 Severability.
Every provision of this Agreement is intended to be severable. If any term
or provision hereof is illegal or invalid for any reason whatsoever, such
illegality or invalidity shall not affect the validity or legality of the
remainder of this Agreement.
14.7 Incorporation by Reference.
Every exhibit, schedule, and other appendix attached to this Agreement and
referred to herein is incorporated in this Agreement by reference unless this
Agreement expressly otherwise provides.
14.8 Further Action.
Each Partner, upon the request of the General Partner, agrees to perform
all further acts and execute, acknowledge, and to deliver any documents which
may be reasonably necessary, appropriate, or desirable to carry out the
provisions of this Agreement.
14.9 Variation of Pronouns.
All pronouns and any variations thereof shall be deemed to refer to
masculine, feminine, or neuter, singular or plural, as the identity of the
Person or Persons may require.
14.10 Governing Law.
The laws of the State of Delaware shall govern the validity of this
Agreement, the construction of its terms, and the interpretation of the rights
and duties of the Partners.
14.11 Waiver of Action for Partition; No Bill For Partnership Accounting.
Each Partner irrevocably waives any right that it may have to maintain any
action for partition with respect to any of the Partnership property. To the
fullest extent permitted by law, each Partner covenants that it will not (except
with the consent of the Managing General Partner) file a bill for Partnership
accounting.
14.12 Counterpart Execution.
This Agreement may be executed in any number of counterparts with the same
effect as if all the Partners had signed the same document. All counterparts
shall be construed together and shall constitute one agreement.
14.13 Sole and Absolute Discretion.
Except as otherwise provided in this Agreement, all actions which the
Managing Partner may take and all determinations which the Managing General
Partner may make pursuant to this Agreement may be taken and made at the sole
and absolute discretion of the Managing General Partner.
14.14 No Third-Party Rights.
This Agreement will not confer or be construed as conferring (directly,
indirectly, contingently or otherwise), any rights or benefits in any Person,
including any third-party beneficiary rights, other than rights conferred upon
(i) a Partner of the Partnership and (ii) a transferee in connection with a
Permitted Transfer.
14.15 Entire Agreement.
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This Agreement, together with all Exhibits hereto, contains the entire
agreement between the parties hereto relative to the operations of the
Partnership.
14.16 Specific Performance.
Each Partner agrees with the other Partners that the other Partners would
be irreparably damaged if any of the provisions of this Agreement are not
performed in accordance with their specific terms and that monetary damages
would not provide an adequate remedy in such event. Accordingly, it is agreed
that, in addition to any other remedy to which the nonbreaching Partners may be
entitled, at law or in equity, the nonbreaching Partners shall be entitled to
injunctive relief to prevent breaches of the provisions of this Agreement and
specifically to enforce the terms and provisions hereof in any action instituted
in any court of the United States or any state thereof having subject matter
jurisdiction thereof.
IN WITNESS WHEREOF, the parties have entered into this Agreement of Limited
Partnership as of the day first above set forth.
[signatures follow on separate pages]
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GENERAL PARTNERS:
THE REUBEN H. DONNELLY CORPORATION
By: /s/ WILLIAM H. BUCHANAN, JR.
................................
Title: Senior Vice President
DUN & BRADSTREET, INC.
By: /s/ ALAN J. KLUTCH
................................
Title: Vice President
IMS AMERICA, LTD.
By: /s/ ALAN J. KLUTCH
................................
Title: Vice President
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THIS IS A SIGNATURE PAGE TO THE AGREEMENT OF LIMITED PARTNERSHIP OF D&B
INVESTORS L.P.
LIMITED PARTNER:
RBDB, LLC
By: /s/ D. G. ZIENGS
................................
Title: President
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THIS IS A SIGNATURE PAGE TO THE AGREEMENT OF LIMITED PARTNERSHIP OF D&B
INVESTORS L.P.
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CONFORMED COPY INCORPORATING
AMENDMENT DATED AS OF 10/14/93
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this 'Agreement') is made and entered into this
14th day of October 1993 by and among Merrill Lynch Capital Services Inc., a
Delaware corporation (the 'Purchaser'), D&B Investors L.P., a limited
partnership organized under the laws of Delaware (the 'Partnership'), The Reuben
H. Donnelley Corporation, a Delaware corporation ('RHDC'), Dun & Bradstreet,
Inc., a Delaware corporation ('DBI'), and IMS America, Ltd., a New Jersey
corporation ('IMS'; and together with RHDC and DBI the 'Initial General
Partners').
PRELIMINARY STATEMENT
The Partnership has been formed to acquire certain stocks, bonds, notes,
debentures, puts, calls, options, warrants and other financial instruments or
securities as described in the Partnership Agreement, and to manage, protect and
conserve the assets of the Partnership, and to engage in any and all activities
related or incidental thereto. The Purchaser has agreed to advance funds to the
Partnership totalling up to U.S.$500 million to be used in connection with these
purposes.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto agree as follows:
SECTION 1.
DEFINITIONS
Capitalized words and phrases used in this Agreement have the following
meanings:
'Affiliate' means, with respect to any Person, (i) any Person directly or
indirectly controlling, controlled by or under common control with such Person,
(ii) any Person owning or controlling 10% or more of the outstanding voting
interests of such Person, (iii) any officer, director or general partner of such
Person, or (iv) any Person who is an officer, director, general partner,
trustee, or holder of 10% or more of the voting interests of any Person
described in clauses (i) through (iii) of this sentence. For purposes of this
definition, the term 'control,' (including, with correlative meanings, the terms
'controlling,' 'controlled by' and 'under common control with') means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
'Agreement' means this Purchase Agreement made and entered into on October
14, 1993 among the Purchaser, the Partnership and the Initial General Partners.
'Applicable LIBOR Rate' means, with respect to any Reference Period, (i) a
rate per annum (expressed as a decimal and rounded upwards, if necessary, to the
nearest one-hundredth of a percentage point) equal to the amount obtained by
dividing (a) the sum of the offered rate per annum for six-month deposits in
United States dollars in a principal amount of not less than $5,000,000 which
appears on the display designated as 'Page 3750' on the Telerate Service (or
such other page as may replace 'Page 3750' on that service for the purpose of
displaying London interbank offered rates of major banks) for each Wednesday
(or, if such Wednesday is not a London Banking Day, the first London Banking Day
thereafter) during such Reference Period divided by (b) the number of Wednesdays
during such Reference Period, or (ii) if a rate cannot be determined under
clause (i) above, a rate per annum equal to the amount obtained by dividing (a)
the sum of the average (rounded upwards, if necessary, to the nearest
one-hundredth of a percentage point) rate per annum offered for six-month
deposits in United States dollars, as set forth on the display designated as
page 'LIBO' on the Reuter Monitor Money Rates Service (or such other page as may
replace the LIBO page on the service for the purpose of displaying London
interbank offered rates of major banks) as of 11:00 A.M. (London Time) for a
principal amount of not less than $5,000,000 for each Wednesday (or, if such
Wednesday is not a London Banking Day, the first London Banking Day thereafter)
during such Reference Period divided by (b) the number of Wednesdays during such
Reference Period, or (iii) if a rate cannot be determined under clause (i) or
(ii) above, a rate per annum equal to the amount
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obtained by dividing (a) the sum of the average (rounded upwards, if necessary,
to the nearest one-hundredth of a percentage point) of the rates per annum at
which six-month deposits in amounts of not less than U.S. $5,000,000 are offered
by three London banks mutually agreeable between the Purchaser and the Company
for each Wednesday (or, if such Wednesday is not a London Banking Day, the first
London Banking Day thereafter) during such Reference Period by (b) the number of
Wednesdays during such Reference Period.
'Bankruptcy' means, with respect to any Person, a Voluntary Bankruptcy or
an Involuntary Bankruptcy.
'Business Day' means any day except a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
close.
'Capital Stock' means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person, whether now outstanding or issued after
the date of this Agreement, including, without limitation, all common stock and
preferred stock.
'Code' means the Internal Revenue Code of 1986, as amended from time to
time (or any corresponding provisions of succeeding law).
'Compliance Certificate' has the meaning specified in Section 7.02(b)
hereof.
'Cure Period' has the meaning specified in Section 6.01(a) hereof.
'Currency Agreement' means, with respect to any Person, any foreign
exchange contract, currency swap agreement or other similar agreement or
arrangement designed to protect such Person against fluctuations in currency
values.
'Debt' means, with respect to any Person, (i) all obligations of such
Person for borrowed money, (ii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (iii) all obligations of
such Person in respect of letters of credit or other similar instruments
(including reimbursement obligations with respect thereto), (iv) all obligations
of such Person to pay the deferred purchase price of property or services, (v)
all obligations of such Person arising from any short sales, the writing of
options, forward contracts or similar transactions, (vi) all obligations of such
Person as lessee which would be capitalized in accordance with GAAP, (vii) all
obligations secured by any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind on any asset of such Person, whether or not any such
obligation is otherwise an obligation of such Person, (viii) to the extent not
otherwise included in the definition, obligations under Currency Agreements and
Interest Rate Agreements, and (ix) all obligations of others, of a type
described in (i) through (viii) above, that are directly or indirectly
guaranteed (whether contingently or otherwise) by such Person; provided that
Debt shall not include Trade Payables of such Person or any indebtedness of such
Person to Parent incurred in the ordinary course of business consistent with
past practice resulting from the cash management system maintained by Parent.
'ERISA' means the Employee Retirement Income Security Act of 1974, as
amended (and any corresponding provisions of succeeding law).
'Exchange Act' means the Securities Exchange Act of 1934, as amended (or
any corresponding provisions of succeeding law).
'Fair Market Value' means as to any date (i) if a security is registered
under the Exchange Act and listed on a national securities exchange or included
on the National Association of Securities Dealers Automated Quotation System,
National Market ('NASDAQ'), the closing sales price on such date (or in the
event such date is not a Business Day, the Business Day immediately preceding
such date), and (ii) if a security is not traded on a national securities
exchange or listed on NASDAQ or the value otherwise cannot be determined under
clause (i), the average of the firm prices bid for such date quoted by Morgan
Stanley & Co. Incorporated, Salomon Brothers Inc. and The First Boston
Corporation, in each case for the full amount of the specific security for which
the Fair Market Value is being determined.
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'Fiscal Quarter' means (i) the period commencing on the effective date of
this Agreement and ending on December 31, 1993 and (ii) any subsequent
three-month period commencing on each of January 1, April 1, July 1, or October
1.
'Fiscal Year' means (i) the period commencing on the effective date of this
Agreement and ending on December 31, 1993, (ii) any subsequent twelve-month
period commencing on January 1 and ending on December 31, or (iii) any portion
of the period described in clause (ii) that is considered a short taxable year
of the Partnership under the Code and the Regulations.
'GAAP' means United States generally accepted accounting principles as in
effect from time to time, applied on a consistent basis.
'General Partners' means collectively the Initial General Partners and any
Person who hereafter becomes a general partner in the Partnership.
'Initial General Partners' has the meaning specified in the preamble to
this Agreement.
'Insolvent' means, with respect to any Person at any time, the fair market
value of the assets and properties of such Person at such time being less than
the liabilities of such Person at such time.
'Interest Rate Agreement' means, with respect to any Person, any interest
rate protection agreement, interest rate future agreement, interest rate option
agreement, interest rate swap agreement, interest rate cap agreement, interest
rate collar agreement, interest rate hedge agreement or other similar agreement
or arrangement designed to protect such Person against fluctuations in interest
rates.
'Investment' means any direct or indirect advance, loan or other extension
of credit (other than (i) advances to customers in the ordinary course of
business that would be recorded as accounts receivable on the balance sheet, in
accordance with GAAP, of a General Partner or any of its subsidiaries or (ii)
advances, loans or other extensions of credit resulting from the cash management
system maintained by Parent, provided such advances, loans and other extensions
of credit constitute unsubordinated indebtedness of Parent) or capital
contribution to (by means of any transfer of cash or other property to others or
any payment for property or services for the account or use of others), or any
purchase or acquisition of capital stock, bonds, notes, debentures or other
similar instruments issued by any other Person (other than bonds, notes,
debentures or other similar instruments issued by Parent or by an Affiliate of
Parent if such debt is unconditionally guaranteed by Parent on an unsubordinated
basis).
'Investment Advance' means an advance by the Purchaser to the Partnership
pursuant to Section 2.01(b) hereof.
'Investment Principal' means the aggregate amount of all Investment
Advances.
'Investment Rate' means, with respect to any Reference Period, the sum of
(i) 1.42% per annum plus (ii) the Applicable LIBOR Rate for such Reference
Period.
'Investment Return' has the meaning specified in Section 2.02(a) hereof.
'Involuntary Bankruptcy' means, with respect to any Person, without the
consent or acquiescence of such Person, the entering of an order for relief or
approving a petition for relief or reorganization or any other petition seeking
any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or other similar relief under any present or future bankruptcy,
insolvency or similar statute, law or regulation, or the filing of any such
petition against such Person which petition shall not be dismissed within thirty
(30) days, or, without the consent or acquiescence of such Person, the entering
of an order appointing a trustee, custodian, receiver or liquidator of such
Person or of all or any substantial part of the property of such Person which
order shall not be dismissed within thirty (30) days.
'Lien' means any lien, mortgage, pledge, charge, security interest,
security agreement, conditional sale or trust receipt or other encumbrance of
any kind.
'London Banking Day' means a day of the year on which dealings are carried
on in the London interbank market.
'Liquidating Event' has the meaning specified in Section 12.1 of the
Partnership Agreement.
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'Managing General Partner' means RHDC, or in the event RHDC shall no longer
be the managing general partner under the Partnership Agreement, such Person who
is the managing general partner under the Partnership Agreement.
'Mandatory Retirement Event' has the meaning specified in Section 6.01(a)
hereof.
'Net Cash Flow' means the gross cash proceeds of the Partnership less
the portion thereof used to pay or establish reserves for all Partnership
expenses, debt payments, capital investments, replacements, and contingencies,
all as determined by the Managing General Partner in its sole discretion. 'Net
Cash Flow' shall not be reduced by depreciation, amortization, cost recovery
deductions, or similar allowances, but shall be increased by any reductions of
reserves previously established pursuant to the first sentence of this
definition.
'Parent' means The Dun & Bradstreet Corporation.
'Parent Agreement' means the agreement dated the date of this Agreement
between Parent and the Purchaser.
'Parent Debt' has the meaning specified in Section 6.01(c) hereof.
'Parent Stock' has the meaning specified in Section 6.01(c) hereof.
'Partners' means the Initial General Partners and RBDB, LLC, a limited
partner in the Partnership and any Person who hereafter acquires a general or
limited partnership interest in the Partnership.
'Partnership' has the meaning specified in the preamble to this Agreement.
'Partnership Agreement' means the Agreement of Limited Partnership of D&B
Investors L.P., dated October 14, 1993, among RHDC, DBI and IMS, as general
partners and RBDB, LLC, a Delaware limited liability company, as in effect on
the date of this Agreement.
'Permitted Investments' means any of the following:
(i) cash;
(ii) direct obligations of the United States of America for the
payment of which its full faith and credit is pledged, Federal Home Loan
Mortgage Corporation participation certificates, Federal National Mortgage
Association mortgage pass-through certificates or Government National
Mortgage Association mortgage pass-through certificates;
(iii) short-term commercial paper issued by any corporation organized
under the laws of the United States of America or any state thereof, rated
at least 'A-1' by S&P; provided that the aggregate Fair Market Value of all
commercial paper issued by any Person shall not exceed 10% of the aggregate
Fair Market Value of all Property (other than cash) owned by the
Partnership;
(iv) indebtedness of any Person organized under the laws of the United
States of America or any state thereof that is not an Affiliate of Parent,
rated at least 'AA' by S&P; provided, that the aggregate Fair Market Value
of all such indebtedness issued by any Person shall not exceed 10% of the
aggregate Fair Market Value of all Property (other than cash) owned by the
Partnership;
(v) unsubordinated debt issued by Parent or unsubordinated debt issued
by an Affiliate of Parent if (and only if) such debt is unconditionally
guaranteed by Parent on an unsubordinated basis; provided, that Parent has
agreed to register such debt under the Securities Act upon the request of
the holder of such debt and such agreement inures to the benefit of any
subsequent holder of such debt;
(vi) common stock or preferred stock issued by Parent; provided (A)
the ownership of such stock (when taken together with any other securities
owned by the Partnership) would not require the Partnership to file a
Schedule 13D under the Exchange Act and (B) Parent has agreed to register
such stock under the Securities Act upon the request of the holder of such
stock and such agreement inures to the benefit of any subsequent holder of
such stock; or
(vii) puts, calls, options or warrants to purchase or sell
common stock of Parent; provided that (A) such puts, calls, options or
warrants do not, in the aggregate, at the time of their acquisition, exceed
10% of the Fair Market Value of all Property then held by the Partnership
and (B) the ownership of such puts, calls, options or warrants (when taken
together with any other securities owned by the Partnership) would not
require the Partnership to file a Schedule 13D under the Exchange Act.
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'Permitted Liens' means with respect to any Person (i) Liens for taxes,
assessments, governmental charges or claims that are not yet due and payable or
that are being contested in good faith by appropriate legal proceedings promptly
instituted and diligently conducted and for which a reserve or other appropriate
provision, if any, as would be required in conformity with GAAP shall have been
made; (ii) statutory Liens of landlords and carriers, warehousemen, mechanics,
suppliers, materialmen, repairmen or other similar Liens arising in the ordinary
course of business and with respect to amounts not yet delinquent or being
contested in good faith by appropriate legal proceedings promptly instituted and
diligently conducted and for which a reserve or other appropriate provision, if
any, as would be required in conformity with GAAP shall have been made; (iii)
Liens incurred or deposits made in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other types of social
security; (iv) Liens incurred or deposits made to secure the performance of
tenders, bids, leases, statutory or regulatory obligations, bankers'
acceptances, surety and appeal bonds, government contracts, performance and
return-of-money bonds and other obligations of a similar nature incurred in the
ordinary course of business of such Person (exclusive of obligations for the
payment of borrowed money); (v) easements, rights-of-way, municipal and zoning
ordinances and similar charges, encumbrances, title defects or other
irregularities that do not materially interfere with the ordinary course of
business of such Person; (vi) Liens (including extensions and renewals thereof)
upon real or personal property acquired by such Person after the date of this
Agreement; provided that (a) such Lien is created solely for the purpose of
securing Debt incurred (1) to finance the cost (including the cost of
improvement or construction) of the item of property or assets subject thereto
and such Lien is created prior to, at the time of or within six months after the
later of the acquisition, the completion of construction or the commencement of
full operation of such property or (2) to refinance any Debt previously so
secured, (b) the principal amount of the Debt secured by such Lien does not
exceed 100% of such cost and (c) any such Lien shall not extend to or cover any
property or assets other than such item of property or assets and any
improvements on such item; (vii) leases or subleases granted to others that do
not materially interfere with the ordinary course of business of such Person;
(viii) any interest or title of a lessor in the property subject to any
capitalized lease or operating lease; and (ix) Liens arising from filing Uniform
Commercial Code financing statements regarding leases.
'Person' means any individual, partnership, corporation, trust, limited
liability company, association or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
'Portfolio Certificate' means a written certificate of the Managing General
Partner signed by the chief financial officer of the Managing General Partner
delivered in accordance with Section 7.02 hereof, that certifies the aggregate
Fair Market Value of the Property held by the Partnership as of a given date.
'Property' means all property acquired by the Partnership, and shall
include both tangible and intangible Property.
'Purchaser' has the meaning specified in the preamble to this Agreement and
its successors and assigns.
'Rating Category' means (i) with respect to short-term ratings, A-1+, A-1,
A-2, A-3, B, C and D (or equivalent successor categories) or (ii) with respect
to long-term ratings, AAA, AA, A, BBB, BB, B, CCC, CC, C and D (or equivalent
successor categories).
'Redeemable Stock' means any class or series of Capital Stock of any Person
that by its terms or otherwise is (i) required to be redeemed, (ii) redeemable
at the option of the holder of such class or series of Capital Stock at any time
or (iii) convertible into or exchangeable for capital stock referred to in
clause (i) or (ii) above or Debt.
'Reference Period' means the six month period beginning on the date of this
Agreement and each successive six month period thereafter; provided that in the
event a Mandatory Retirement Event occurs during any Reference Period, the last
day of such Reference Period shall be the date the Partnership shall repay the
Investment Principal pursuant to Section 6.01(b) hereof.
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'Regulations' means the Income Tax Regulations, including Temporary
Regulations, promulgated under the Code, as such regulations may be amended from
time to time (including any corresponding provisions of succeeding regulations).
'Securities Act' means the Securities Act of 1933, as amended (or any
corresponding provisions of succeeding law).
'S&P' means Standard & Poor's Corporation and its successors.
'Trade Payables' of any Person means indebtedness owed by such Person to
trade creditors incurred in the ordinary course of business in connection with
the acquisition of goods or services by such Person and paid on ordinary
commercial terms; provided that Trade Payables shall not include any payment
made by the Partnership in reimbursement of reasonable, direct, out-of-pocket
expenses incurred by a General Partner in connection with the Partnership's
business in an aggregate amount not to exceed $100,000 per fiscal year.
'Triggering Event' means either (i) the occurrence of a decrease of the
short-term rating of the Parent by S&P by one or more rating gradations;
provided, that, in the event Parent shall at any time not have a short-term
rating, Triggering Event shall mean the occurrence of a decrease of the
long-term rating of the Parent by S&P by one or more rating gradations or (ii)
Parent not at any time having either a short-term or a long-term rating. In
determining whether the rating has decreased by one or more gradations,
gradations within Rating Categories (e.g., + and - for S&P long-term ratings),
shall be taken into account (e.g., a decline in a rating from AA+ to AA, as well
as from AA to A+, will constitute a decrease of one gradation).
'Voluntary Bankruptcy' means, with respect to any Person, the inability of
such Person generally to pay its debts as such debts become due, or an admission
in writing by such Person of its inability to pay its debts generally or a
general assignment by such Person for the benefit of creditors; the filing of
any petition or answer by such Person seeking to adjudicate it a bankrupt or
insolvent, or seeking for itself any liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of such Person or
its debts under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking, consenting to, or acquiescing in the entry of an
order for relief or the appointment of a receiver, trustee, custodian or other
similar official for such Person or for any substantial part of its property; or
partnership or corporate action taken by such Person to authorize any of the
actions set forth above.
'Weighted Average Investment Principal Amount' means, for any Reference
Period, the amount obtained by dividing (i) the sum of the amount of Investment
Principal outstanding at the opening of business on each day in such Reference
Period by (ii) the number of days in such Reference Period.
SECTION 2.
INVESTMENT PRINCIPAL AND INVESTMENT RETURN
2.01. The Investment Principal.
(a) Maximum Investment Principal Amount. The Purchaser shall, on the terms
and conditions hereinafter set forth, transfer to the Partnership, at the
address specified in Section 7.01 hereof, up to an aggregate amount of U.S.$500
million.
(b) Investment Advances. Each Investment Advance shall be made on notice,
given not later than the third Business Day prior to the requested date of a
proposed Investment Advance (or such shorter period of time acceptable to the
Purchaser), by the Partnership to the Purchaser specifying therein the Business
Day on which such Investment Advance is to be made and the amount of such
Investment Advance; provided, that each Investment Advance shall be in an amount
at least equal to $50 million or an integral multiple of $1 million in excess
thereof. If the Partnership shall request in such notice an Investment Advance
which the Purchaser determines is available hereunder, the Purchaser shall,
before 11:00 a.m. (New York City time) on the date of each such Investment
Advance and upon fulfillment of the conditions in this Agreement, transfer to
the Partnership at the address specified in Section 7.01, the amount of such
Investment Advance in immediately available funds.
2.02. Investment Return.
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(a) Determination of Investment Return. The return on the Investment
Principal for each Reference Period (the 'Investment Return') shall equal the
product obtained by multiplying (i) the Investment Rate for such Reference
Period by (ii) the Weighted Average Investment Principal Amount and by (iii) a
fraction the numerator of which is the number of days in such Reference Period
and the denominator of which is 360.
(b) Payment of Investment Return. The Partnership shall pay the Investment
Return for each Reference Period to the Purchaser on the last day of such
Reference Period; provided that, in the event the last day of any Reference
Period is not a Business Day, the last day of such Reference Period shall be
extended to occur on the next succeeding Business Day; provided further that if
such extension would cause the last day of such Reference Period to occur in the
next following calendar month, the last day of such Reference Period shall occur
on the next preceding Business Day. Payment shall be made to the Purchaser in
immediately available funds at its address specified in Section 7.01 hereof.
(c) Insufficient Partnership Funds. To the extent the Partnership fails or
is otherwise unable to pay the Investment Return with respect to any Reference
Period when due, each of the General Partners jointly and severally agrees to
advance funds to the Partnership in an amount sufficient to permit the
Partnership to pay the Investment Return (but only to the extent the Investment
Return accrued while such General Partner was a general partner of the
Partnership) in accordance with Section 2.02(b), and shall cause the Partnership
to make such payment; provided, however, that the Partnership's obligation to
repay any such advances shall be subordinate in right of payment to the
repayment of the Investment Principal, any accrued and unpaid Investment Return
and any payment required pursuant to Section 6.02 hereof and no such advance or
any interest thereon may be repaid prior to the repayment of the Investment
Principal, any accrued and unpaid Investment Return and any payment required
pursuant to Section 6.02 hereof; provided further, however, that (i) the
obligations of each General Partner under this Section 2.02(c) shall be
subordinate in right of payment to the unsecured claims of all creditors of such
General Partner and (ii) no General Partner shall be required to advance funds
to the Partnership under this Section 2.02(c) to the extent that, after giving
effect to such advance, such General Partner would be Insolvent.
2.03. Withholding.
Notwithstanding anything to the contrary in this Agreement, unless the
Partnership has received from the Purchaser an Internal Revenue Service Form
4224 or other applicable form, certificate or document prescribed from time to
time by the Internal Revenue Service of the United States certifying that
payments hereunder to the Purchaser are not subject to or are exempt from United
States withholding tax, the Partnership (i) shall withhold the applicable taxes
from payments made to the Purchaser prior to such receipt at the applicable
statutory rate, and (ii) shall treat all amounts so withheld as a payment to the
Purchaser under this Agreement.
SECTION 3
CONDITIONS TO INVESTMENT ADVANCES
3.01. Condition Precedent to Initial Investment Advance.
The obligation of the Purchaser to make its initial Investment Advance is
subject to the condition precedent that the Purchaser shall have received on or
before the date of the initial Investment Advance the following, each dated such
day, in form and substance satisfactory to the Purchaser:
(a) An executed copy of this Agreement.
(b) Certified copies of the resolutions of the Board of Directors of
each of the Initial General Partners approving this Agreement, and of all
documents evidencing other necessary corporate action and governmental
approvals, if any, with respect to this Agreement.
(c) A certificate of the Secretary or an Assistant Secretary of each
of the Initial General Partners certifying the names and true signatures of
the officers of such Initial General Partner authorized to sign this
Agreement and the other documents to be delivered hereunder.
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(d) A certificate of the Secretary or an Assistant Secretary of the
Managing General Partner certifying that the representations and warranties
of the Partnership contained in Section 4.01 hereof are true and correct on
such date.
(e) A certificate of the Secretary or an Assistant Secretary of each
of the Initial General Partnerscertifying that the representations and
warranties of such Initial General Partner contained in Section 4.03 hereof
are true and correct on such date.
(f) A certified copy of the Partnership Agreement and evidence that
the Original Capital Contributions (as defined in the Partnership
Agreement) have been made.
(g) An executed copy of the Parent Agreement.
(h) Certified copies of the resolutions of the Board of Directors of
Parent approving the Parent Agreement, and of all documents evidencing
other necessary corporate action and governmental approvals, if any, with
respect to the Parent Agreement.
(i) A certificate of the Secretary or an Assistant Secretary of Parent
certifying the names and true signatures of the officers of Parent
authorized to sign the Parent Agreement and the other documents to be
delivered thereunder.
(j) A request for the initial Investment Advance in accordance with
Section 2.01(b) hereof.
(k) a favorable opinion of Skadden, Arps, Slate, Meagher & Flom, in
form and substance reasonably satisfactory to the Purchaser.
(l) a favorable opinion of Stephen J. Boatti, in form and substance
reasonably satisfactory to the Purchaser.
(m) such other approvals, opinions or documents as the Purchaser may
reasonably request.
3.02. Conditions Precedent to Each Investment Advance.
The obligation of the Purchaser to make each Investment Advance (including
the initial Investment Advance) shall be subject to the further conditions
precedent that on the date of such Investment Advance (a) the following
statements shall be true (and each of (i) the giving of the applicable notice by
the Partnership to the Purchaser requesting such Investment Advance and (ii) the
acceptance by the Partnership of the proceeds of such Investment Advance, shall
constitute a representation and warranty by the Partnership and each of the
General Partners that on the date of such Investment Advance such statements are
true):
(i) The representations and warranties contained in Section 4.01 (with
respect to the Partnership) and Section 4.03 (with respect to the General
Partners) are correct on and as of the date of such Investment Advance,
before and after giving effect to such Investment Advance and to the
application of the proceeds therefrom, as though made on and as of such
date; and
(ii) No event has occurred and is continuing, or would result
from such Investment Advance or from the application of the proceeds
therefrom, which constitutes a Mandatory Retirement Event or would
constitute a Mandatory Retirement Event but for the requirement that notice
be given or time elapse or both;
and (b) the Purchaser shall have received such other approvals, opinions or
documents as the Purchaser may reasonably request.
SECTION 4.
REPRESENTATIONS AND WARRANTIES
4.01. Representations and Warranties of the Partnership.
The Partnership represents and warrants as follows:
(a) Due Authorization. It is a partnership duly formed, validly existing
and in good standing under the laws of the jurisdiction of its formation and has
the power and authority to own its property and carry on its business as owned
and carried on at the date hereof and as contemplated hereby. The Partnership is
duly licensed or qualified to do business and in good standing in each of the
jurisdictions in which the failure to be so licensed or qualified would have a
material adverse effect on its financial
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condition or its ability to perform its obligations hereunder. It has the power
and authority to execute and deliver this Agreement and to perform its
obligations hereunder and the execution, delivery and performance of this
Agreement has been duly authorized by all necessary partnership action. This
Agreement constitutes the legal, valid and binding obligation of the Partnership
enforceable against it in accordance with its terms, except to the extent that
the enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws generally affecting creditors' rights
and by equitable principles (regardless of whether enforcement is sought in
equity or at law).
(b) No Conflict with Restrictions; No Default. Neither the execution,
delivery and performance of this Agreement nor the consummation by the
Partnership of the transactions contemplated hereby (i) will conflict with,
violate or result in a breach of any of the terms, conditions or provisions of
any law, regulation, order, writ, injunction, decree, determination or award of
any court, any governmental department, board, agency or instrumentality,
domestic or foreign, or any arbitrator, applicable to the Partnership, (ii) will
conflict with, violate, result in a breach of or constitute a default under any
of the terms, conditions or provisions of the Partnership Agreement or of any
agreement or instrument to which the Partnership is a party or by which the
Partnership is bound or to which any of its properties or assets is subject,
(iii) will conflict with, violate, result in a breach of, constitute a default
under (whether with notice or lapse of time or both), accelerate or permit the
acceleration of the performance required by, or require any consent,
authorization or approval under any indenture, mortgage, lease agreement or
instrument to which the Partnership is a party or by which the Partnership is
bound, or (iv) will result in the creation or imposition of any lien upon any of
the properties or assets of the Partnership, in each of the foregoing clauses
(i) through (iv), the violation, breach or conflict of which could reasonably
have a material adverse effect on the Partnership's financial condition or its
ability to perform its obligations hereunder.
(c) Governmental Authorizations. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except as have been obtained or made) or exemption by, any court, governmental
or public body or authority, or any subdivision thereof, is required to
authorize the execution, delivery or performance of this Agreement or as a
condition to the legality, validity, binding effect or enforceability of this
Agreement.
(d) Litigation. There is no action, suit, proceeding or investigation
pending or, to the knowledge of the Partnership, threatened against or affecting
the Partnership or any of its properties, assets or businesses in any court or
before or by any governmental department, board, agency or instrumentality,
domestic or foreign, or any arbitrator which could, if adversely determined (or,
in the case of an investigation could lead to any action, suit or proceeding,
which if adversely determined could) reasonably be expected to materially impair
its ability to perform its obligations under this Agreement or to have a
material adverse effect on the financial condition of the Partnership; and the
Partnership has not received any currently effective notice of any default, and
the Partnership is not in default, under any applicable order, writ, injunction,
decree, permit, determination or award of any court, governmental department,
board, agency or instrumentality, domestic or foreign, or any arbitrator which
could reasonably be expected to materially impair the Partnership's ability to
perform its obligations under this Agreement or to have a material adverse
effect on the financial condition of the Partnership.
(e) Investment Company Act. The Partnership is not an 'investment company'
or an 'affiliated person' of, or 'promoter' or 'principal underwriter' for an
'investment company,' as defined in, or subject to regulation under, the
Investment Company Act of 1940, as amended.
(f) Margin Regulations. Neither the execution and delivery of this
Agreement nor the use of the proceeds by the Partnership will violate or be
inconsistent with the provisions of Regulation G, T, U or X.
4.02. Representations and Warranties of the Purchaser.
The Purchaser represents and warrants as follows:
(a) Due Authorization. It is a corporation duly incorporated, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, and has the power and authority to own its
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property and carry on its business as owned and carried on at the date hereof.
The Purchaser is duly licensed to or qualified to do business and in good
standing in each of the jurisdictions in which the failure to be so licensed or
qualified would have a material adverse effect on its financial condition or its
ability to perform its obligations hereunder. It has the power and authority to
execute and deliver this Agreement and to perform its obligations hereunder.
This Agreement has been duly authorized, executed and delivered by the Purchaser
and constitutes the legal, valid and binding obligation of the Purchaser
enforceable against it in accordance with its terms, except to the extent that
the enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws generally affecting creditors' rights
and by equitable principles (regardless of whether enforcement is sought in
equity or at law).
(b) Litigation. There is no action, suit, proceeding or investigation
pending or, to the knowledge of the Purchaser, threatened against or affecting
the Purchaser which seeks to question, delay or prevent the consummation of the
transactions contemplated hereby.
(c) No Conflict with Restrictions; No Default. Neither the execution,
delivery and performance of this Agreement nor the consummation by the Purchaser
of the transactions contemplated hereby (i) will conflict with, violate or
result in a breach of any of the terms, conditions or provisions of any law,
regulation, order, writ, injunction, decree, determination or award of any
court, any governmental department, board, agency or instrumentality, domestic
or foreign, or any arbitrator, applicable to the Purchaser, (ii) will conflict
with, violate, result in a breach of or constitute a default under any of the
terms, conditions or provisions of the certificate of incorporation or bylaws of
the Purchaser or of any agreement or instrument to which the Purchaser is a
party or by which the Purchaser is bound or to which any of its properties or
assets is subject or (iii) will conflict with, violate, result in a breach of,
constitute a default under (whether with notice or lapse of time or both),
accelerate or permit the acceleration of the performance required by, or require
any consent, authorization or approval under any indenture, mortgage, lease
agreement or instrument to which the Purchaser is a party or by which the
Purchaser is bound, in each of the foregoing clauses (i) through (iii), the
violation, breach or conflict of which could reasonably have a material adverse
effect on the Purchaser's ability to perform its obligations hereunder.
(d) Governmental Authorizations. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except as have been obtained or made) or exemption by, any court, governmental
or public body or authority, or any subdivision thereof, is required to
authorize the execution, delivery or performance of this Agreement or as a
condition to the legality, validity, binding effect or enforceability of this
Agreement.
(e) Availability of Funds. Purchaser has or will have all funds necessary
to consummate the transactions contemplated by this Agreement. No part of such
funds constitutes assets allocated to any qualified trust which contains the
assets of any employee pension benefit plan with respect to which the Purchaser
or its subsidiaries or any corporation considered an affiliate of any of them is
a party in interest or disqualified person. For purposes of this Section
4.02(e), the terms 'employee pension benefit plan' and 'party in interest' shall
have the meanings assigned to such terms in Section 3 of ERISA, the term
'disqualified person' shall have the meaning assigned to such term in Section
4975 of the Code and the term 'qualified trust' shall mean any trust qualified
under Section 401(a) of the Code in which is held the assets of any employee
pension benefit plan and the term 'affiliate' shall have the meaning assigned to
it in Section 407(d)(7) of ERISA.
(f) QIB. Purchaser is a 'qualified institutional buyer' within the meaning
of Rule 144A under the Securities Act and acknowledges that it has received such
information regarding the Partnership and the General Partners as it has
requested pursuant to Rule 144A or has determined not to request such
information.
(g) Non Broker Dealer. Purchaser is not a broker or dealer as defined in
Section 3(a)(4) and 3(a)(5) of the Exchange Act, a member of a national
securities exchange or a person associated with a broker or dealer (as defined
in section 3(a)(18) of the Exchange Act), except for business entities
controlling or under common control with the Purchaser.
4.03. Representations and Warranties of the General Partners.
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Each of the General Partners hereby represents and warrants that:
(a) Due Authorization. It is a corporation duly incorporated, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or formation and has the corporate power and authority to own its
property and carry on its business as owned and carried on at the date hereof
and as contemplated hereby. It is duly licensed or qualified to do business and
in good standing in each of the jurisdictions in which the failure to be so
licensed or qualified would have a material adverse effect on its financial
condition or its ability to perform its obligations hereunder. It has the
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder and the execution, delivery and performance of
this Agreement has been duly authorized by all necessary corporate action. This
Agreement constitutes the legal, valid and binding obligation of such General
Partner enforceable against it in accordance with its terms, except to the
extent that the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws generally affecting
creditors' rights and by equitable principles (regardless of whether enforcement
is sought in equity or at law).
(b) No Conflict with Restrictions; No Default. Neither the execution,
delivery and performance of this Agreement nor the consummation by such General
Partner of the transactions contemplated hereby (i) will conflict with, violate
or result in a breach of any of the terms, conditions or provisions of any law,
regulation, order, writ, injunction, decree, determination or award of any
court, any governmental department, board, agency or instrumentality, domestic
or foreign, or any arbitrator, applicable to such General Partner, (ii) will
conflict with, violate, result in a breach of or constitute a default under any
of the terms, conditions or provisions of the articles of incorporation or
bylaws of such General Partner, or of any agreement or instrument to which such
General Partner is a party or by which such General Partner is bound or to which
any of its properties or assets is subject, (iii) will conflict with, violate,
result in a breach of, constitute a default under (whether with notice or lapse
of time or both), accelerate or permit the acceleration of the performance
required by, or require any consent, authorization or approval under any
indenture, mortgage, lease agreement or instrument to which such General Partner
is a party or by which such General Partner is bound, or (iv) will result in the
creation or imposition of any lien upon any of the properties or assets of such
General Partner, in each of the foregoing clauses (i) through (iv), the
violation, breach or conflict of which could reasonably have a material adverse
effect on such General Partner's financial condition or its ability to perform
its obligations hereunder.
(c) Governmental Authorizations. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except as have been obtained or made) or exemption by, any court, governmental
or public body or authority, or any subdivision thereof, is required to
authorize the execution, delivery or performance of this Agreement or as a
condition to the legality, validity, binding effect or enforceability of this
Agreement.
(d) Litigation. There is no action, suit, proceeding or investigation
pending or, to the knowledge of such General Partner, threatened against or
affecting such General Partner or any of its properties, assets or businesses in
any court or before or by any governmental department, board, agency or
instrumentality, domestic or foreign, or any arbitrator which could, if
adversely determined (or, in the case of an investigation could lead to any
action, suit or proceeding, which if adversely determined could) reasonably be
expected to materially impair its ability to perform its obligations under this
Agreement or to have a material adverse effect on the financial condition of
such General Partner; and such General Partner has not received any currently
effective notice of any default, and such General Partner is not in default,
under any applicable order, writ, injunction, decree, permit, determination or
award of any court, any governmental department, board, agency or
instrumentality, domestic or foreign, or any arbitrator which could reasonably
be expected to materially impair such General Partner's ability to perform its
obligations under this Agreement or to have a material adverse effect on the
financial condition of such General Partner.
(e) Investment Company Act. Neither such General Partner nor any of its
subsidiaries is an 'investment company' or an 'affiliated person' of, or
'promoter' or 'principal underwriter' for, an 'investment company', as defined
in, or is subject to regulation under, the Investment Company Act of 1940, as
amended.
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(f) Ownership of Property; Liens. Such General Partner has good and valid
title to all of its properties and assets free and clear of Liens, except for
Permitted Liens or to the extent the lack of good and valid title or the
existence of any such Lien reasonably could not have a material adverse effect
on the ability of such General Partner to run its business as conducted on the
date of this Agreement. The General Partner is not a party to or subject to any
agreement, contract or commitment which could reasonably be expected to
materially impair such General Partner's ability to perform its obligations
under this Agreement or have a material adverse effect on the financial
condition of such General Partner.
(g) Financial Information. The balance sheets of RHDC and DBI dated
December 31, 1992 and June 30, 1993 and the related statements of income and
cash flow for the 12-month and 6-month periods then ended and the balance sheets
of IMS dated November 30, 1993 and May 31, 1993 and the related statements of
income and cash flow for the 12-month and 6-month periods then ended
(collectively, the 'Partners' Statements'), copies of which will be delivered to
the Purchaser by October 22, 1993 have been prepared from each Initial General
Partner's books and records, on a basis consistent with their presentation in
the Parent's consolidated financial statements. Such Partners' Statements fairly
present in all material respects the financial position of each of the Initial
General Partners as of such date and its results of operations and cash flow for
such period. As of the date hereof, none of the Initial General Partners has
outstanding Debt in excess of $10 million in the aggregate (not including Debt
owed by an Initial General Partner to Parent or to a wholly owned subsidiary of
Parent). Since June 30, 1993 (with respect to RHDC and DBI), and May 31, 1993
(with respect to IMS), there has been no material adverse change in the
business, financial position or results of operations of such Initial General
Partner.
(h) Ownership by Parent. All of the outstanding Capital Stock of such
General Partner is owned directly by Parent or a wholly owned subsidiary of
Parent.
(i) Margin Regulations. Neither the execution and delivery of this
Agreement nor the use of the proceeds by the Partnership will violate or be
inconsistent with the provisions of Regulation G, T, U or X.
SECTION 5.
COVENANTS
5.01. Covenants of the Partnership.
For so long as the Investment Principal and any accrued Investment Return
shall remain unpaid, the Partnership agrees as follows:
(a) Debt Limitations. The Partnership shall not, directly or indirectly,
create, authorize, issue, incur, assume or otherwise become liable for or with
respect to, or become responsible for any Debt (other than Debt incurred
pursuant to and in accordance with Section 2.02(c) and Section 6.01(d) of this
Agreement) or Trade Payables.
(b) No Liens. The Partnership shall not create, incur, or suffer to exist,
or agree to create, incur or suffer to exist, or consent to cause or permit in
the future (upon the happening of a contingency or otherwise) the creation,
incurrence or existence of, any Lien upon any of its Property.
(c) Separate Affairs. The Partnership shall at all times (1) maintain and
keep its assets separate and apart from any Affiliate of the Partnership, and
under separate registration, and (2) maintain its books and records separate and
apart from those of any Affiliate of the Partnership.
(d) No Distributions. The Partnership shall not make any distributions to
the Partners, except to the extent provided in Sections 10.8, 10.9 and 11.2 of
the Partnership Agreement; provided that the Partnership shall not make a
distribution pursuant to Sections 10.8, 10.9 or 11.2 at a time when any accrued
Investment Return remains unpaid unless the Partnership reserves for payment to
the Purchaser the amount of any accrued but unpaid Investment Return; provided
further that in no event may the Partnership make any distribution if after
giving effect thereto the Fair Market Value of the Property held by the
Partnership at such time would be less than the outstanding amount of the
Investment Principal plus any accrued and unpaid Investment Return and, if a
Triggering Event has occurred, plus $50 million.
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(e) Property. The Partnership shall not make any loan or advance to any
Person, purchase or acquire any capital stock, warrants, rights, options,
obligations or other securities of any Person or any other investment in any
Person, or acquire or hold any assets, other than Permitted Investments.
(f) Additional General Partners. The Partnership shall cause any Person who
becomes a general partner in the Partnership after the date of this Agreement to
expressly assume, by a supplemental agreement executed and delivered to the
Purchaser, all of the obligations of a General Partner under this Agreement.
5.02. Covenants of the General Partners.
For so long as the Investment Principal and any accrued Investment Return
shall remain unpaid, each of the General Partners agrees as follows:
(a) Transactions with Affiliates. No General Partner shall, and no General
Partner shall permit the Partnership or any subsidiary of a General Partner to,
directly or indirectly, enter into, renew or extend any transaction with Parent
or any other Affiliates except upon fair and reasonable terms no less favorable
to such General Partner, the Partnership or such subsidiary, as the case may be,
than could be obtained at the time of such transaction or at the time of the
execution of the agreement providing therefor, in a comparable arm's-length
transaction with a Person that is not such an Affiliate; provided that the
foregoing limitation shall not apply to transactions in the ordinary course of
business consistent with past practice.
(b) Debt Limitations. Except as otherwise provided in this Agreement, no
General Partner shall, and no General Partner shall permit any of its
subsidiaries to, directly or indirectly, create, authorize, issue, incur, assume
or otherwise become liable for any Debt (other than Debt owing to another
General Partner or to its wholly owned subsidiary); provided that
notwithstanding the foregoing a General Partner may, and may permit its
subsidiaries to, incur each of the following: (i) Debt owing to Parent, provided
that the aggregate Debt owing to Parent of all General Partners at any time that
is not subordinate to the General Partners' obligations hereunder may not exceed
$100 million, (ii) Debt in respect of overdrafts of zero balance bank accounts,
(iii) Debt to the extent such Debt is secured by a purchase money lien that is a
Permitted Lien, (iv) obligations to pay rent or other amounts under a lease that
would be required to be capitalized for financial reporting purposes in
accordance with GAAP, incurred in the ordinary course of business consistent
with past practice, (v) Debt incurred as the result of the acquisition of assets
or the stock of any Person in an aggregate amount outstanding at any time not in
excess of $75 million for all General Partners, provided that the value of the
assets or stock acquired exceeds the amount of such Debt, and (vi) Debt
outstanding at any time that does not exceed $10 million in the aggregate.
(c) No Liens. No General Partner shall, and no General Partner shall permit
its subsidiaries to, create, incur, or suffer to exist, or agree to create,
incur or suffer to exist, or consent to cause or permit in the future (upon the
happening of a contingency or otherwise) the creation, incurrence or existence
of, any Lien upon any of its assets or properties other than Permitted Liens,
except to the extent the existence of any such Lien could not reasonably have a
material adverse effect on the ability of such General Partner to run its
business as conducted on the date of this Agreement.
(d) Separate Affairs. Each General Partner shall at all times maintain such
General Partner's books and records separate and apart from those of any
Affiliate of such General Partner. The Board of Directors of each General
Partner shall hold appropriate meetings, or act by written consent, to authorize
such General Partner's corporate actions, and records of all such meetings and
written consents shall be maintained.
(e) Management of Partnership Assets. Each General Partner shall cause the
Managing General Partner to use its best efforts to manage the Partnership's
assets so as to produce Net Cash Flow sufficient to pay the Investment Return in
accordance with Section 2.02 hereof.
(f) Portfolio Certificates. Each General Partner shall cause the Managing
General Partner to deliver to the Purchaser the Portfolio Certificates required
pursuant to Section 7.02 hereof and in the event the Fair Market Value of the
Property held by the Partnership as reflected in any such Portfolio Certificate
is less than (I) in the event a Triggering Event has not occurred, the amount of
(x) Investment Principal plus (y) all accrued but unpaid Investment Return or
(II) in the event a Triggering
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Event has occurred, the amount of (x) Investment Principal plus (y) all accrued
but unpaid Investment Return plus (z) $50 million, each General Partner jointly
and severally agrees for so long as such General Partner is a general partner in
the Partnership, within five (5) Business Days following the date such Portfolio
Certificate is required to be delivered pursuant to Section 7.02, to make a
capital contribution in cash to the Partnership in an amount at least equal to
such deficit; provided, that (i) the obligations of each of the General Partners
under this Section 5.02(f) shall be subordinate in right of payment to the
unsecured claims of all general creditors of such General Partner and (ii) no
General Partner shall be required to make a capital contribution under this
Section 5.02(f) to the extent that, after giving effect to such contribution,
such General Partner would be Insolvent.
(g) Issuance of Redeemable Stock. No General Partner shall, and no General
Partner shall permit any of its subsidiaries to, directly or indirectly, issue
or sell any shares of its Redeemable Stock (including options, warrants or other
rights to purchase shares of such Redeemable Stock).
(h) Restricted Payments. No General Partner shall, and no General Partner
shall permit any of its subsidiaries to, directly or indirectly (i) declare or
pay any dividend or make any distribution on its capital stock (other than (x)
dividends by a General Partner not in excess of such General Partner's earnings
and profits (excluding capital gains and extraordinary items) from June 30, 1993
for RHDC and DBI and from May 31, 1993 for IMS and (y) dividends by a subsidiary
of a General Partner on capital stock held by the General Partner or another
wholly owned subsidiary of such General Partner), (ii) purchase, redeem, retire
or otherwise acquire for value any shares of its Capital Stock (including
options, warrants or other rights to acquire such shares of Capital Stock) held
by Persons other than the General Partner or a wholly owned subsidiary of the
General Partner, provided that a General Partner may, and may permit its
subsidiaries to (x) purchase, redeem, retire or otherwise acquire for value
shares of Capital Stock of foreign subsidiaries which were required to be issued
to foreign nationals or directors under applicable law and (y) purchase, redeem,
retire or otherwise acquire for value any interest in a joint venture to which
such General Partner or its subsidiary is a party if such interest is owned by a
Person who is not an Affiliate of Parent and if such interest is acquired on
terms which the General Partner in good faith determines is fair and reasonable
or (iii) make any Investment in Parent or any of its other Affiliates (other
than Permitted Investments and Investments of a General Partner in wholly owned
subsidiaries of such General Partner).
(i) Deficiency Payments. Each of the General Partners jointly and severally
agrees to make the advances to the Partnership required pursuant to Sections
2.02(c) and 6.01(d) hereof; provided, however, that (i) the obligations of each
of the General Partners under this Section 5.02(i) shall be subordinate in right
of payment to the unsecured claims of all general creditors of such General
Partner and (ii) no General Partner shall be required to advance funds to the
Partnership under this Section 5.02(i) to the extent that, after giving effect
to such advance, such General Partner would be Insolvent.
(j) Merger, Consolidation, Etc. No General Partner shall consolidate with,
merge with or into, or sell, convey, transfer, lease or otherwise dispose of all
or substantially all of its property and assets (as an entirety or substantially
an entirety in one transaction or a series of related transactions) to, any
Person; provided, that a General Partner may sell all or substantially all of
its assets if the proceeds of such sale are held by such General Partner or
loaned to Parent on an unsubordinated basis.
(k) Existence. Each General Partner will do or cause to be done all things
necessary to preserve and keep in full force and effect its existence and the
existence of the Partnership and each of its other subsidiaries in accordance
with the respective organizational documents of such General Partner, the
Partnership and each such other subsidiary and the rights (whether pursuant to
charter, partnership certificate, agreement, statute or otherwise), material
licenses and franchises of such General Partner, the Partnership and each such
other subsidiary; provided that no General Partner shall be required to preserve
any such right, license or franchise, or the existence of any subsidiary (other
than the Partnership), if the maintenance or preservation thereof is no longer
desirable in the conduct of the business of such General Partner and its
subsidiaries taken as a whole.
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SECTION 6.
RETIREMENT EVENTS
6.01. Mandatory Retirement.
(a) Mandatory Retirement Events. Each of the following events shall
constitute a 'Mandatory Retirement Event':
(i) the failure of the Managing General Partner to deliver a Portfolio
Certificate or the failure of the Managing General Partner or any other
General Partner to deliver any other report or certificate to the Purchaser
as required under Section 7.02 hereof (and, if a Triggering Event has not
occurred, such failure continues for a period of fifteen (15) days);
(ii) the failure of the Partnership to pay any accrued Investment
Return to the Purchaser in accordance with Section 2.02(b) hereof (and such
failure continues for a period of fifteen (15) days);
(iii) the failure of the General Partners to make a capital
contribution to the Partnership in accordance with Section 5.02(f) hereof;
(iv) any default on any securities held by the Partnership if the Fair
Market Value of such securities (and any other securities held by the
Partnership that were issued by the issuer of the securities on which there
has been a default), in the aggregate, is more than ten percent (10%) of
the Fair Market Value of all of the Property then held by the Partnership;
(v) the Bankruptcy of (1) the Partnership, (2) any General Partner or
(3) any issuer or guarantor of any securities held by the Partnership if
the Fair Market Value of such securities (and any other securities held by
the Partnership that were issued or guaranteed by such bankrupt issuer or
bankrupt guarantor), in the aggregate, is more than ten percent (10%) of
the Fair Market Value of all of the Property then held by the Partnership;
(vi) the failure by the Partnership or the General Partners to observe
or perform any covenant or agreement contained in this Agreement (other
than those covered by clause (i), (ii) or (iii) above) (and such failure
continues for a period of thirty (30) days);
(vii) the occurrence of any Liquidating Event; and
(viii) the occurrence of October 15, 1996;
provided, that if, within five (5) Business Days of the Partnership's discovery
of a Mandatory Retirement Event (other than a Mandatory Retirement Event
specified in clauses (ii) or (viii) above, which shall have a Cure Period of 0
Business Days) (the 'Cure Period'), the Partnership or the General Partners, as
the case may be, cures the failure, breach or default which constituted the
Mandatory Retirement Event, such failure, breach or default shall not be
considered a Mandatory Retirement Event. In no event shall the date of the
Partnership's discovery of a Mandatory Retirement Event be later than the date
it receives notice of the Mandatory Retirement Event from the Purchaser.
(b) Repayment by Partnership. In the event a Mandatory Retirement Event
occurs and is not cured by the end of the Cure Period, the Partnership shall (i)
notify the Purchaser, on the day immediately following the Cure Period, of the
occurrence of such Mandatory Retirement Event and (ii) within five (5) Business
Days after the Cure Period, repay to the Purchaser the Investment Principal and
any accrued but unpaid Investment Return through the date of repayment. In
addition, in the event the Investment Principal is not repaid within such time,
the Purchaser may instruct the Managing General Partner (or such other Person
who is responsible for overseeing the winding up and dissolution of the
Partnership pursuant to Section 12.2 of the Partnership Agreement) to, and if so
instructed the Managing General Partner (or such other Person) shall, liquidate
the Partnership's assets and properties.
(c) Assets Used for Repayment. The payment to the Purchaser under Section
6.01(b) hereof shall be made in cash; provided that, at the election of the
Managing General Partner, all or a portion of such cash payment may be made by
the delivery of publicly traded common stock or preferred stock of Parent
('Parent Stock') or unsubordinated debt of Parent ('Parent Debt') held by the
Partnership which has a delivery date value (as determined under this Section
6.01(c)) equal to the cash not being paid; provided that Parent has agreed to
cause such Parent Stock or Parent Debt to be registered under the Securities Act
upon the request of the holder thereof pursuant to an agreement satisfactory to
the
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Purchaser. For purposes of this Section 6.01(c), the 'delivery date value' of
the Parent Stock or Parent Debt used for such repayment shall be equal to the
firm price bid for the date of delivery by the Partnership quoted by a reputable
securities dealer mutually agreeable to the Purchaser and the Partnership for
the full amount of the specific Parent Stock and/or the full amount of the
specific Parent Debt to be delivered by the Partnership pursuant to this Section
6.01(c); provided, however, that in the event the Purchaser and the Partnership
can not agree on a reputable securities dealer, the 'delivery date value' of the
Parent Stock or Parent Debt used for such repayment shall be equal to the
highest of the firm prices bid for the date of delivery by the Partnership
quoted by Morgan Stanley & Co. Incorporated, Salomon Brothers Inc. and The First
Boston Corporation, in each case, for the full amount of the specific Parent
Stock and/or the full amount of the specific Parent Debt to be delivered by the
Partnership pursuant to this Section 6.01(c).
(d) Insufficient Partnership Funds. To the extent the Partnership fails or
is otherwise unable to repay the amounts required by Section 6.01(b) and Section
6.02 hereof, each of the General Partners jointly and severally agrees to
advance funds to the Partnership (or cause the Partnership to borrow funds from
other sources) in an amount sufficient to permit the Partnership to repay the
amounts required by Section 6.01(b) hereof (and with respect to a General
Partner who was a general partner in the Partnership at the time the Retirement
Event occurred, any amount due under Section 6.02 hereof), and shall cause the
Partnership to make such repayment; provided, however, that the Partnership's
obligation to repay any such advance shall be subordinate to the repayment of
the Investment Principal, any accrued but unpaid Investment Return and any
payment required by Section 6.02 hereof; provided further, however, that (i) the
obligations of each General Partner under this Section 6.01(d) shall be
subordinate in right of payment to the unsecured claims of all creditors of such
General Partner and (ii) no General Partner shall be required to advance funds
to the Partnership under this Section 6.01(d) to the extent that, after giving
effect to such advance, such General Partner would be Insolvent.
(e) Enforcement of Performance. In the event the Partnership fails to
comply with its obligations under Section 2.02(b) or Sections 6.01(b) and 6.02
hereof or the General Partners fail to comply with their obligations under
Section 2.02(c) or Section 6.01(d) hereof, the Purchaser may use any legal or
equitable remedy to enforce such obligations, including maintaining a cause of
action against the Partnership or any General Partner (whether or not the
General Partner is a partner in the Partnership at the time of such failure or
at the time such cause of action is commenced) for specific performance and/or
money damages, or other appropriate judicial relief.
6.02. Additional Payment on Mandatory Retirement Event.
If the Investment Principal is retired or is required to be retired by the
Partnership pursuant to Section 6.01 hereof before October 15, 1996, the
Partnership shall, in addition to the amounts payable pursuant to Section
6.01(b) hereof, pay the Purchaser an amount equal to the product obtained by
multiplying (I) 0.95% per annum by (II) the aggregate amount of Investment
Principal to be retired by (III) a fraction, the numerator of which is the
number of days from the retirement date to October 15, 1996 and the denominator
of which is 360, and dividing the result by (IV) (1+R)D. For purposes of the
preceding clause (IV), 'D' equals a fraction, the numerator of which is the
number of days from the retirement date to October 15, 1996 and the denominator
of which is 365; and 'R' equals the midmarket fixed swap rate for LIBOR based
swaps of equivalent maturity.
SECTION 7.
MISCELLANEOUS
7.01. Notices, Etc.
All notices and other communications provided for hereunder shall be in
writing (including facsimile, telegraphic, telex or cable communication) and
mailed, telecopied, telegraphed, telexed, cabled or delivered as follows:
If to the Partnership:
c/o The Dun & Bradstreet Corporation
200 Nyala Farms Road
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Westport, CT 06880
Attention: Vice President -- Financial Planning
If to the Purchaser:
Merrill Lynch Capital Services Inc.
World Financial Center
North Tower
New York, NY 10281
Attention: Macauley R. Taylor
If to RHDC, DBI or IMS:
c/o The Dun & Bradstreet Corporation
200 Nyala Farms Road
Westport, CT 06880
Attention: Vice President -- Financial Planning
or at such other address as shall be designated by any such party in a written
notice to the other parties given in accordance with this Section 7.01. Except
as otherwise specified in this Agreement, all such notices and communications
shall, when sent by registered or certified mail, telecopied, telegraphed,
telexed, cabled or sent by overnight courier, be effective when deposited in the
mails, transmitted by telecopier (followed by delivery of the original of such
notice or communication), delivered to the telegraph company, confirmed by telex
answerback, delivered to the cable company or delivered to the courier company,
respectively.
7.02. Reports.
(a) Annual and Quarterly Reports. Within the periods specified in this
Section 7.02, the Partnership and each of the General Partners shall provide the
Purchaser with the following reports:
(i) Partnership Annual Reports. Within ninety (90) days after the end
of each Fiscal Year commencing with the Fiscal Year ending December 31,
1993 and at such time as distributions are made to the Partners pursuant to
Section 12.2 of the Partnership Agreement following the occurrence of a
Liquidating Event, the Managing General Partner shall cause to be prepared
and furnished to the Purchaser each of the following:
(1) financial statements accompanied by a certificate of the chief
financial officer of the Managing General Partner certifying that such
statements have been prepared and are fairly stated in all material
respects in accordance with GAAP, including: a balance sheet, statement
of income or loss, and statement of cash flow of the Partnership as of
the last day of such Fiscal Year prepared in accordance with GAAP; and
(2) a certificate of the chief financial officer of the Managing
General Partner certifying that no Liquidating Event has occurred
and is continuing, or if any such event has occurred and is continuing,
the action the Managing General Partner has taken or proposes to take
with respect thereto.
(ii) General Partner Annual Reports. Within ninety (90) days after the
end of its fiscal year commencing with the first fiscal year ending after
the date of this Agreement, each General Partner shall cause to be prepared
and furnished to the Purchaser consolidated financial statements (including
a balance sheet as of the last day of such fiscal year, and a statement of
income or loss, and statement of cash flow for such fiscal year)
accompanied by a certificate of the chief financial officer of such General
Partner certifying that such statements have been prepared from such
General Partner's books and records on a basis consistent with their
presentation in the Parent's consolidated financial statements and that
such financial statements fairly present in all material respects the
financial position of such General Partner as of such date and its results
of operations and cash flow for such period.
(iii) Partnership Quarterly Reports. Within sixty (60) days after the
close of each Fiscal Quarter commencing with the Fiscal Quarter ending
March 31, 1994 (other than the last Fiscal Quarter of a Fiscal Year), the
Managing General Partner shall cause to be prepared and furnished to the
Purchaser each of the following:
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(1) a balance sheet of the Partnership as of the last day of such
Fiscal Quarter and statements of income and loss and cash flow for such
Fiscal Quarter, together with a certificate of the chief financial
officer of the Managing General Partner certifying that such statements
have been prepared in accordance with GAAP; and
(2) a certificate of the chief financial officer of the Managing
General Partner with respect to the matters described in Section 7.02(a)
(i)(2) hereof.
(iv) General Partner Quarterly Reports. Within sixty (60) days after
the close of each of its fiscal quarters commencing with the first fiscal
quarter ending after the date of this Agreement (other than the last fiscal
quarter of a fiscal year), each General Partner shall cause to be prepared
and furnished to the Purchaser consolidated financial statements (including
a balance sheet as of the last day of such fiscal quarter, and a statement
of income or loss, and statement of cash flow for such fiscal quarter)
accompanied by a certificate of the chief financial officer of such General
Partner certifying that such statements have been prepared from such
General Partner's books and records on a basis consistent with their
presentation in the Parent's consolidated financial statements and that
such financial statements fairly present the financial position of such
General Partner as of such date and its results of operations and cash flow
for such period.
(b) Quarterly Certificates. Within fifteen (15) days following the close of
each Fiscal Quarter of the Partnership commencing with the Fiscal Quarter ending
December 31, 1993, the Managing General Partner shall furnish the Purchaser with
(i) a certificate (a 'Compliance Certificate') prepared by the chief financial
officer of the Managing General Partner certifying whether or not the General
Partners have complied with their obligations under Section 5.02 hereof and
attaching the arithmetic computations or financial statements to demonstrate
compliance therewith and (ii) a Portfolio Certificate as of the last day of such
Fiscal Quarter.
(c) Monthly Certificates. In the event a Triggering Event occurs and is
continuing, within five (5) days following each calendar month, the Managing
General Partner shall furnish the Purchaser with (i) a Compliance Certificate
certifying whether or not the General Partners have complied with their
obligations under Section 5.02 hereof and attaching the arithmetic computations
or financial statements to demonstrate compliance therewith and (ii) a Portfolio
Certificate as of the last day of such month.
7.03. Transfers and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
(b) The Purchaser may assign all or a portion of its rights and obligations
under this Agreement, upon not less than three (3) Business Days' notice to the
Partnership (which notice shall specify the name and address of the assignee and
the amount of Investment Principal assigned); provided that the amount of
Investment Principal being assigned pursuant to any such assignment shall in no
event be less than $25 million (unless such assignment is an assignment of all
of the Purchaser's remaining rights and obligations under this Agreement) and
shall be an integral multiple of $1 million; provided further that any such
assignee expressly assumes, by a supplemental agreement executed and delivered
to the Partnership, the obligations of the Purchaser under this Agreement that
are the subject of such assignment; provided further, that the Purchaser may not
assign its rights and obligations under this Agreement without the consent of
the Partnership (which consent shall not be unreasonably withheld) unless the
assignee makes representations and warranties in substantially the form of
Exhibit A hereto. In the event the Purchaser assigns all or any portion of its
rights and obligations under this Agreement, any notice or communication to the
Purchaser hereunder shall also be made to each of the Purchaser's assignees;
provided, that no notices or communications need be made to any Person who has
assigned all of its rights and obligations under this Agreement.
(c) The Purchaser has entered into this Agreement with the expectation of
assigning all of its rights and obligations hereunder to one or more customers
and not for the purpose of earning the Investment Return or profiting from a
possible increase in the value of the rights under this Agreement. Any
communication of information by the Purchaser to a prospective transferee in
connection with a sale, pledge or other transfer (or an attempted sale, pledge
or other transfer) of the Investment Principal or a portion thereof pursuant to
this Section 7.03 shall not be considered a violation of Section 7.07 hereof
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provided the prospective transferee executed a confidentiality agreement in
substantially the form of Section 7.07(b).
(d) Neither the Partnership nor any General Partner shall have the right to
assign its rights or obligations hereunder without the prior written consent of
the Purchaser; provided, that one (and only one) of the Initial General Partners
may terminate its obligations under this Agreement if (and only if) Parent (or a
wholly owned subsidiary of Parent that is acceptable to the Purchaser in the
Purchaser's sole discretion) executes an agreement reasonably acceptable to
Purchaser whereby Parent (or such acceptable subsidiary) agrees on an
unsubordinated basis to pay Purchaser any Investment Return or Investment
Principal or any other payment required to be paid hereunder in the event the
Partnership fails or is otherwise unable to make such payment.
7.04. No Waiver; Remedies.
No failure on the part of the Purchaser or the Partnership to exercise, and
no delay in exercising, any right hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
7.05. Status of Purchaser.
The parties intend the Investment Principal to be classified as debt and
the Investment Return and payments pursuant to Section 6.02 to be classified as
interest for U.S. federal, state and local income and franchise and all other
tax purposes, and each party agrees to file its income and franchise tax returns
in a manner consistent therewith and to not take a contrary position with any
tax authority. The parties intend that the Purchaser have no interest in
Partnership profits, losses or distributions. In all events, the Purchaser shall
possess no voting, management, inspection or other rights possessed by the
Partners of the Partnership except as otherwise expressly provided for herein.
7.06. Indemnification of Purchaser.
(a) The Partnership and each of the General Partners, jointly and
severally, covenant and agree, unconditionally, absolutely and irrevocably, to
indemnify and hold harmless the Purchaser from and against any and all claims,
damages, losses, and reasonable expenses (including, without limitation,
reasonable fees and disbursements of counsel) arising out of or in connection
with or by reason of any Person's assertion that the liabilities, debts or other
obligations of the Partnership are liabilities, debts or other obligations of
the Purchaser; provided, however, that no such indemnification shall be required
hereunder for any such claims, damages, losses, and expenses resulting from the
gross negligence or willful misconduct of the Purchaser.
(b) The Partnership and each of the General Partners jointly and severally
agrees to indemnify the Purchaser's assignees and their respective directors,
officers, employees, agents and controlling persons (each such person being an
'Indemnified Party') from and against any and all losses, claims, damages and
liabilities, joint or several, to which such Indemnified Party may become
subject under any applicable federal or state law, or otherwise, and related to
or arising out of the transactions contemplated by this Agreement (excluding any
such losses, claims, damages and liabilities under the Code or any applicable
state, local, foreign or other tax laws related to or arising out of the
transactions contemplated by this Agreement; provided, however, that no such
exclusion shall apply to any such losses, claims, damages and liabilities
resulting from the gross negligence or willful misconduct of the Partnership or
General Partner) and will reimburse any Indemnified Party for all expenses
(including counsel fees and expenses) as they are incurred in connection with
the investigation of, preparation for or defense of any pending or threatened
claim or any action or proceeding arising therefrom, whether or not such
Indemnified Party is a party and whether or not such claim, action or proceeding
is initiated or brought by or on behalf of the Partnership or such General
Partner. Neither the Partnership nor any General Partner will be liable under
the foregoing indemnification provision to the extent that any loss, claim,
damage, liability or expense is found in a final judgment by a court to have
resulted from such assignee's gross negligence or willful misconduct.
7.07. Confidentiality.
Until October 31, 1995:
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(a) Except as contemplated hereby or required by law, the Partnership and
the General Partners shall keep confidential and shall not disclose to any
Person (other than Parent or employees, agents and representatives to the extent
required to consummate the transactions contemplated hereby and who agree to be
bound by the terms of this Section 7.07(a)) without the prior written consent of
the Purchaser any information which pertains to this Agreement or the
Partnership Agreement, any negotiations pertaining thereto or any of the
transactions contemplated hereby. Neither the Partnership, the General Partners
nor any of their Affiliates shall use any information which pertains to this
Agreement or the Partnership Agreement, any negotiations pertaining hereto or
any of the transactions contemplated hereby, except in connection with the
transactions contemplated hereby.
(b) Subject to Section 7.03(b), the Purchaser agrees that, (i) except as
contemplated hereby or required by law, the Purchaser shall keep confidential
and shall not disclose to any Person (other than employees, agents and
representatives to the extent required to consummate the transactions
contemplated hereby and who agree to be bound by the terms of this Section
7.07(b)) without the prior written consent of the Partnership any information
which (x) pertains to this Agreement or the Partnership Agreement, any
negotiations pertaining thereto, any of the transactions contemplated hereby or
the business of the Partnership, or (y) pertains to confidential or proprietary
information of the Partnership and (ii) neither the Purchaser nor any of its
Affiliates shall use, any information which (x) pertains to this Agreement or
the Partnership Agreement, any negotiations pertaining hereto, any of the
transactions contemplated hereby or the business of the Partnership, or (y)
pertains to the confidential or proprietary information of the Partnership,
except in connection with the transactions contemplated hereby.
7.08. Amendments; Actions.
(a) No amendment or waiver of any provision of this Agreement, nor any
consent to any departure by the Partnership or any General Partner therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Purchaser, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given. Notwithstanding
the foregoing, in the event the Purchaser assigns all or any portion of its
rights and obligations under this Agreement, the Partnership and the General
Partners may amend this Agreement with the written consent of the Persons
entitled to a majority of the Investment Principal amount hereunder and the
Persons entitled to a majority of the Investment Principal amount hereunder may,
by written notice to each other Person entitled to any Investment Principal
hereunder, waive compliance by the Partnership or any General Partner with any
provision of this Agreement; provided that without the consent of each Person
entitled to any Investment Principal hereunder affected, an amendment or waiver
may not: (i) amend, modify, supplement, alter or waive any provision of Section
2, Section 5.01 or Sections 6 or (ii) reduce the percentage in Investment
Principal amount the consent of whose holders is required for any amendment or
waiver under this Section 7.08.
(b) Actions by Purchaser. In the event the Purchaser assigns all or any
portion of its rights and obligations under this Agreement, any decision or
action required to be made by the Purchaser under this Agreement shall be made
by the Persons entitled to a majority of the Investment Principal amount
hereunder.
7.09. Binding Effect; Governing Law.
This Agreement shall become effective when it shall have been executed by
the Partnership, the General Partners and the Purchaser and thereafter shall be
binding upon and inure to the benefit of the Partnership, the General Partners
and the Purchasers. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York applicable to contracts and
instruments executed and to be performed entirely in such state.
7.10. Submission to Jurisdiction; Venue.
Any and all suits, legal actions or proceedings against any party hereto
arising out of this Agreement shall be brought in the United States District
Court for the Southern District of New York or, if such court shall not have
jurisdiction, the court of appropriate jurisdiction sitting in New York County,
New York, and each party hereby submits to and accepts the exclusive
jurisdiction of such courts for the purpose of such suits, legal action or
proceedings. Each party hereto hereby irrevocably
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waives any objection which it may now or hereafter have to the laying of venue
of any such suit, legal action or proceeding in any such court and hereby
further waives right for a jury trial, and any claim that any suit, legal action
or proceeding brought in any such court has been brought in an inconvenient
forum.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
MERRILL LYNCH CAPITAL SERVICES INC.
By /s/ MACAULEY R. TAYLOR
...................................
Authorized Signatory
D&B INVESTORS L.P.
By THE REUBEN H. DONNELLEY
CORPORATION,
its managing general partner
By /s/ WILLIAM H. BUCHANAN JR.
...................................
Sr. Vice President and Secretary
THE REUBEN H. DONNELLEY CORPORATION
By /s/ WILLIAM H. BUCHANAN JR.
...................................
Sr. Vice President and Secretary
IMS AMERICA, LTD.
By /s/ ALAN J. KLUTCH
...................................
Vice President
DUN & BRADSTREET, INC.
By /s/ ALAN J. KLUTCH
...................................
Vice President
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EXHIBIT A
Pursuant to Section 7.03(b) of the Purchase Agreement dated October 14,
1993 (the 'Purchase Agreement', terms used herein as therein defined) among D&B
Investors L.P., Merrill Lynch Capital Services Inc., The Reuben H. Donnelley
Corporation, Dun & Bradstreet, Inc. and IMS America, Ltd., the undersigned (the
'Assignee') hereby represents and warrants to [name of assignor] and D&B
Investors L.P. that each of the following statements is true and correct as of
the date hereof:
(i) Assignee was not formed and is not being utilized primarily for
the purpose of making an investment in the Partnership and either (x) the
value of all securities owned by the Assignee of all issuers which would be
investment companies (as defined under the Investment Company Act of 1940,
as amended), but for the fact that the outstanding securities (other than
short-term paper) of such companies are beneficially owned by not more than
one hundred persons and were not issued in a public offering, does not
exceed ten percent of the value of the Assignee's total assets or (y) in
the event the Assignee cannot satisfy clause (x) above and the aggregate
amount of Investment Principal being assigned to Assignee equals or exceeds
$25 million, the aggregate number of securityholders of Assignee is less
than 4 and each holder of more than 10% of the voting securities of
Assignee can satisfy clause (x) above.
(ii) Assignee does not rely on the 'private investment company'
exclusion provided by Section 3(c)(1) of the Investment Company Act of 1940
to avoid registration and regulation under such Act.
(iii) The assignment of the rights and obligations under the Purchase
Agreement to Assignee is (x) pursuant to a registration statement under the
Securities Act, (y) pursuant to an exemption from the registration
requirements of the Securities Act, or (z) if such act does not apply.
[Name of Assignee]
By: .................................
Name:
Title:
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PURCHASE AGREEMENT AMENDMENT
PURCHASE AGREEMENT AMENDMENT, dated as of October 14, 1993, by and among
D&B Investors L.P. (the 'Partnership'), Dun & Bradstreet, Inc., IMS America,
Ltd., The Reuben H. Donnelley Corporation (collectively, the 'General Partners')
and Merrill Lynch Capital Services Inc. ('MLCS').
WHEREAS, the parties hereto are also the parties to a Purchase Agreement
dated October 14, 1993 (the 'Purchase Agreement'),
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto agree as follows:
1. Section 6.01(c) of the Purchase Agreement is, effective as of the
date hereof, hereby amended by deleting the word 'average' as it appears in
the proviso to the second sentence thereof and substituting therefor the
word 'highest'.
2. On and after the date hereof, each reference in the Purchase
Agreement to 'this Agreement', 'hereunder', 'hereof' or words of like
import referring to the Purchase Agreement shall mean and be a reference to
the Purchase Agreement as amended hereby. The Purchase Agreement, as
amended hereby, is and shall continue to be in full force and effect and is
hereby in all respects ratified and confirmed.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
D&B INVESTORS L.P.
by THE REUBEN H. DONNELLEY
CORPORATION,
its managing general partner
By /s/ WILLIAM H. BUCHANAN, JR.
..................................
Title: Senior Vice President
THE REUBEN H. DONNELLEY CORPORATION
By /s/ WILLIAM H. BUCHANAN, JR.
..................................
Title:
IMS AMERICA, LTD.
By /s/ ALAN J. KLUTCH
..................................
Title: Vice President
DUN & BRADSTREET, INC.
By /s/ ALAN J. KLUTCH
..................................
Title: Vice President
MERRILL LYNCH CAPITAL SERVICES INC.
By /s/ MACAULEY R. TAYLOR
..................................
Title:
