<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-2.
</TABLE>
The Dun & Bradstreet Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-12.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
[DUN & BRADSTREET LETTERHEAD]
One Diamond Hill Road
Murray Hill, New Jersey
07974-1218
March 6, 1998
Dear Shareholder:
You are cordially invited to attend the 1998 Annual Meeting of Shareholders
of The Dun & Bradstreet Corporation on Tuesday, April 14, 1998 at 9:30 A.M.
at 1209 Orange Street, Wilmington, Delaware.
The Notice of Annual Meeting and Proxy Statement accompanying this letter
describe the business to be acted upon at the meeting. The Annual Report for
the year ended December 31, 1997 is also enclosed.
Please promptly vote, date, sign and return your proxy for the meeting even
if you plan to attend. You may vote in person at that time if you so desire.
Sincerely,
/s/VOLNEY TAYLOR
VOLNEY TAYLOR
Chairman and Chief Executive Officer
<PAGE> 3
[DUN & BRADSTREET LETTERHEAD]
One Diamond Hill Road
Murray Hill, New Jersey
07974-1218
NOTICE OF ANNUAL MEETING
The Annual Meeting of Shareholders of The Dun & Bradstreet Corporation
will be held on Tuesday, April 14, 1998 at 9:30 A.M. at 1209 Orange Street,
Wilmington, Delaware, to take action on the following matters:
1. To elect three Class II directors for a three-year term.
2. To consider and vote upon the ratification of the selection of
independent accountants to audit the Company's consolidated financial
statements for 1998.
3. To consider and vote upon a Shareholder proposal regarding
implementation of the MacBride Principles in Northern Ireland.
4. To transact such other business as may properly come before the
meeting or any adjournment thereof. The Company knows of no other
business to be brought before the meeting.
The Board of Directors has fixed the close of business on February 20,
1998 as the record date for determination of Shareholders entitled to notice
of, and to vote at, the meeting.
By Order of the Board of Directors,
/s/ MITCHELL C. SUSSIS
MITCHELL C. SUSSIS
Secretary
Dated: March 6, 1998
<PAGE> 4
PROXY STATEMENT
---------------
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of The Dun & Bradstreet Corporation ("Dun & Bradstreet")
of proxies for the Annual Meeting of Shareholders to be held on April 14, 1998.
Dun & Bradstreet and its subsidiaries are referred to herein, in the Notice of
Annual Meeting and in the form of proxy/voting instruction card ("proxy") as the
"Company." These proxy materials are being mailed to Shareholders commencing
approximately March 6, 1998. The principal executive offices of Dun & Bradstreet
are located at One Diamond Hill Road, Murray Hill, New Jersey, 07974-1218 and
its main telephone number is (908) 665-5000.
Sending in a signed proxy will not affect a Shareholder's right to attend
the meeting and vote in person. Any Shareholder giving a proxy has the right to
revoke it at any time before it is exercised by executing and returning a proxy
bearing a later date, by giving written notice of revocation to the Secretary of
Dun & Bradstreet, or by attending the meeting and voting in person. All properly
executed proxies not revoked will be voted at the meeting in accordance with
their instructions. A proxy that is signed and returned by a Shareholder of
record without specification marked in the instruction boxes will be voted in
accordance with the recommendations of the Board of Directors as outlined in
this Proxy Statement. If any other proposals are brought before the meeting and
submitted to a vote, all proxies will be voted in accordance with the judgment
of the persons voting the proxies.
The preceding paragraph does not apply to shares held in a participant's
account in the Dun & Bradstreet Profit Participation Plan (the "PPP") or the
DonTech Profit Participation Plan (the "DPPP"). If a participant has
contributions in the PPP or DPPP invested in Dun & Bradstreet Common Stock, the
proxy will serve as a voting instruction for the trustee of the PPP and DPPP, as
well as a proxy for any shares registered in the participant's own name under
the Dun & Bradstreet Employee Stock Purchase Plan or otherwise. Fractional
shares held by a participant in the PPP and DPPP are not printed on the proxy
but will be voted by the trustee as if included thereon. If a proxy covering
shares in the PPP or DPPP has not been received prior to April 7, 1998, or if it
is signed and returned without specification marked in the instruction boxes,
the trustee will vote those PPP or DPPP shares in the same proportion as the
respective PPP or DPPP shares for which it has received instructions, except as
otherwise required by law.
In connection with proxy soliciting material mailed to Shareholders,
employees of Dun & Bradstreet may communicate with Shareholders personally or by
telephone, telegraph or mail to solicit their proxies. Dun & Bradstreet also has
retained the firm of Georgeson & Company Inc. to assist in the solicitation of
proxies for a fee estimated at $10,000 plus expenses. Dun & Bradstreet will pay
all expenses related to such solicitations of proxies. Dun & Bradstreet and
Georgeson & Company Inc. will request banks and brokers to solicit proxies from
their customers where appropriate and will reimburse them for reasonable
out-of-pocket expenses.
Shareholders of record at the close of business on February 20, 1998 are
eligible to vote at the meeting. As of the close of business on February 20,
1998, Dun & Bradstreet had outstanding 17,066,657 shares of Common Stock.
Dun & Bradstreet's by-laws provide that a majority of the shares entitled
to vote, whether present in person or represented by proxy, constitutes a quorum
at meetings of Shareholders. Shares that are present in person or represented by
proxy, but that abstain from voting, are counted for purposes of establishing a
quorum, as are shares where a broker holding stock in street name votes the
shares on some matters but not others.
With respect to the three matters to come before the Shareholders at the
Annual Meeting, (i) directors shall be elected by a plurality of the voting
power present in person or represented by proxy at the meeting and entitled to
vote, and (ii) the other two matters shall be determined by the affirmative vote
of the majority of the voting power present in person or represented by proxy at
the meeting and entitled to vote on the matter. With respect to the election of
directors, only shares that are voted in favor of a particular nominee will be
1
<PAGE> 5
counted towards such nominee's achievement of a plurality. Thus, shares present
at the meeting that are not voted for a particular nominee, shares present by
proxy where the Shareholder properly withholds authority to vote for such
nominee, and broker non-votes will not be counted towards such nominee's
achievement of a plurality. A "broker non-vote" occurs when a broker does not
have the authority to vote on a particular proposal. This happens because
brokers who hold shares in street name have the authority to vote only on
certain routine matters in the absence of instruction from the beneficial
owners. With respect to any of the other two matters to be voted upon, if the
Shareholder abstains from voting or directs the Shareholder's proxy to abstain
from voting, the shares are considered present at the meeting for such matter,
but since they are not affirmative votes for the matter, they will have the same
effect as votes against the matter. With respect to broker non-votes on any such
matter, the shares are not considered present at the meeting for such matter and
they are, therefore, not counted in respect of such matter. Such broker
non-votes do have the practical effect of reducing the number of affirmative
votes required to achieve a majority for such matter by reducing the total
number of shares from which the majority is calculated.
ELECTION OF DIRECTORS
The members of the Board of Directors of Dun & Bradstreet are classified
into three classes, one of which is elected at each Annual Meeting of
Shareholders to hold office for a three-year term and until successors of such
class are elected and have qualified.
The Board of Directors has nominated Mr. Clifford L. Alexander, Jr., Mrs.
Mary Johnston Evans and Dr. Henry A. McKinnell for election as Class II
Directors at the 1998 Annual Meeting for a three-year term expiring at the 2001
Annual Meeting of Shareholders. Mr. Alexander and Mrs. Evans were re-elected
directors at the 1995 Annual Meeting of Shareholders. Dr. McKinnell was elected
a director by the Board of Directors effective October 15, 1997.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION AS DIRECTORS OF
THE NOMINEES LISTED ABOVE.
Dun & Bradstreet has announced its intention to split into two public
companies in the summer of 1998 through the distribution to Shareholders of
shares of a subsidiary. While the directors of the newly public company have not
yet been selected, it is expected that many of the nominees named above and
other members of the Board of Directors will be selected as directors of the new
company and, if so, may resign as directors of Dun & Bradstreet at the time that
shares in the new company are distributed to Shareholders.
Dr. John R. Meyer and Mr. James R. Peterson, both of whom were re-elected
as Class II directors at the 1995 Annual Meeting of Shareholders, have each
reached age 70 and, in accordance with Board policy, will retire from the Board
on April 14, 1998, the date of the 1998 Annual Meeting of Shareholders.
Except where otherwise instructed, proxies will be voted for election of
all the nominees, all of whom are now members of the Board. Should any nominee
for the office of director be unwilling or unable to serve as a director, which
is not anticipated, it is intended that the persons acting under the proxy will
have discretionary authority to vote for the election of another person in such
nominee's stead in accordance with their judgment, unless the number of
directors constituting the full Board is reduced.
The following information as to principal occupations during the last five
years, and other directorships in companies with a class of securities
registered under Section 12 or subject to Section 15(d) of the Securities
Exchange Act of 1934 or registered as an investment company under the Investment
Company Act of 1940, is based upon information furnished by each person.
2
<PAGE> 6
NOMINEES FOR CLASS II DIRECTORS FOR TERMS EXPIRING AT THE 2001 ANNUAL MEETING:
<TABLE>
<CAPTION>
POSITIONS
WITH DUN & DIRECTOR PRINCIPAL OCCUPATION
NAME BRADSTREET SINCE DURING LAST FIVE YEARS AGE
---- ---------- -------- ---------------------- ---
<S> <C> <C> <C> <C>
Clifford L. Alexander, Jr. Director 1993 President, Alexander & Associates, 64
Inc., Washington, D.C. (consulting
firm specializing in work-force
inclusiveness) 1/1/81 to present.
Mary Johnston Evans Director 1990 Former Vice Chairman of the Board, 68
Amtrak, Washington, D.C. (National
Railroad Passenger Corporation) 1975
to 1979.
Henry A. McKinnell Director 1997 Executive Vice President, Pfizer, 55
Inc., New York, NY (diversified
research-based health care company)
3/1/92 to present; President, Pfizer
Pharmaceuticals Group 1/1/97 to
present; President, Medical
Technology Group 1/1/92 to 12/31/96;
Chief Financial Officer and Vice
President, Finance 8/1/90 to 1/1/92.
<CAPTION>
OTHER
NAME DIRECTORSHIPS
---- -------------
<S> <C>
Clifford L. Alexander, Jr. American Home Products Corporation;
Cognizant Corporation; Dreyfus General
Family of Funds; Dreyfus Premier
Family of Funds; Dreyfus Third Century
Fund; MCI Communications Corporation;
Mutual of America Life Insurance
Company; TLC Beatrice International
Holdings, Inc.
Mary Johnston Evans Baxter International Inc.; Delta Air
Lines, Inc.; Household International,
Inc.; Scudder New Europe Fund; Sun
Company, Inc.
Henry A. McKinnell Pfizer, Inc.; Aviall, Inc.; John Wiley
& Sons.
</TABLE>
CLASS III DIRECTORS HOLDING OFFICE FOR TERMS EXPIRING AT THE 1999 ANNUAL
MEETING:
<TABLE>
<CAPTION>
POSITIONS
WITH DUN & DIRECTOR PRINCIPAL OCCUPATION
NAME BRADSTREET SINCE DURING LAST FIVE YEARS AGE
---- ---------- -------- ---------------------- ---
<S> <C> <C> <C> <C>
Robert J. Lanigan Director 1978 Chairman Emeritus, Owens-Illinois, 69
Inc., Toledo, OH (glass, paper,
plastics and other packaging
products) 1/24/92 to present;
Chairman of the Board 4/18/84 to
10/15/91; Chief Executive Officer
1/1/84 to 9/30/90.
Vernon R. Loucks Jr. Director 1978 Chairman of the Board, Chief 63
Executive Officer, Baxter
International Inc., Deerfield, IL
(medical care products and services)
9/16/87 to present; Chairman,
President, Chief Executive Officer
7/20/87 to 9/15/87; President, Chief
Executive Officer 5/3/80 to 7/19/87.
Volney Taylor Chairman, Chief 1984 Chairman, Chief Executive Officer, 58
Executive Officer, The Dun & Bradstreet Corporation,
Director Murray Hill, NJ 11/1/96 to present;
Executive Vice President, 2/1/82 to
10/31/96.
<CAPTION>
OTHER
NAME DIRECTORSHIPS
---- -------------
<S> <C>
Robert J. Lanigan Owens-Illnois, Inc.; Chrysler
Corporation; Cognizant Corporation;
The Coleman Company, Inc.; Sonat Inc.;
Transocean Offshore Inc.
Vernon R. Loucks Jr. Baxter International Inc.; Affymetrix
Inc.; Anheuser-Busch Companies, Inc.;
Coastcast Corporation; Emerson
Electric Co.; The Quaker Oats Company.
Volney Taylor
</TABLE>
CLASS I DIRECTORS HOLDING OFFICE FOR TERMS EXPIRING AT THE 2000 ANNUAL MEETING:
<TABLE>
<CAPTION>
POSITIONS
WITH DUN & DIRECTOR PRINCIPAL OCCUPATION
NAME BRADSTREET SINCE DURING LAST FIVE YEARS AGE
---- ---------- -------- ---------------------- ---
<S> <C> <C> <C> <C>
Hall Adams, Jr. Director 1992 Former Chairman of the Board, Chief 64
Executive Officer, Leo Burnett
Company, Inc., Chicago, IL
(advertising agency) 1/1/87 to
12/31/91.
Ronald L. Kuehn, Jr. Director 1996 Chairman, President and Chief 62
Executive Officer, Sonat Inc.,
Birmingham, AL (natural gas
transmission and marketing services,
oil and gas exploration and
production activities) 1986 to
present.
Michael R. Quinlan Director 1989 Chairman, Chief Executive Officer, 53
McDonald's Corporation, Oak Brook, IL
(global food service retailer)
3/31/90 to present; President, Chief
Executive Officer 3/1/87 to 3/30/90;
President, Chief Operating Officer
6/15/82 to 2/28/87.
<CAPTION>
OTHER
NAME DIRECTORSHIPS
---- -------------
<S> <C>
Hall Adams, Jr. McDonald's Corporation; Sears, Roebuck
and Co.
Ronald L. Kuehn, Jr. Sonat Inc.; AmSouth Bancorporation;
Praxair, Inc.; Protective Life
Corporation; Transocean Offshore Inc.;
Union Carbide Corporation.
Michael R. Quinlan McDonald's Corporation; The May
Department Stores Company.
</TABLE>
3
<PAGE> 7
COMMITTEES OF THE BOARD AND MEETINGS
The Audit Committee of the Board of Directors reviews the scope of the
audits of the Company's internal audit department, receives summaries of the
results of such audits and reviews the scope of the audit of the Company's
consolidated financial statements by independent accountants and their report on
such audit. The Audit Committee consists of Messrs. Lanigan (Chairman), Adams,
Loucks and Quinlan and Drs. McKinnell and Meyer (retiring April 14, 1998). The
Audit Committee held six meetings during 1997.
The Executive Compensation and Stock Option Committee of the Board of
Directors (the "Committee") establishes, changes and revises all compensation
arrangements for certain executives of the Company consistent with a statement
of executive compensation philosophy adopted by the Board of Directors and
subject to the Committee's own rules of procedure and such limitations as it may
adopt. The Committee has further authority, consistent with the provisions of
the Company's 1991 Key Employees Stock Option Plan, the Key Employees
Performance Unit Plan, the Corporate Management Incentive Plan and the 1989 Key
Employees Restricted Stock Plan, to select participants under the plans, to
determine the number of shares to be covered by options and the provisions of
performance units granted, and generally to conduct and administer the plans and
make all determinations in connection therewith as may be necessary or
advisable. The Committee consists of Messrs. Kuehn (Chairman), Lanigan, Loucks,
Peterson (retiring April 14, 1998) and Quinlan and Dr. McKinnell. The Committee
held five meetings during 1997.
The Nominating Committee of the Board of Directors screens candidates for
membership on the Board of Directors and makes recommendations to the Board of
Directors. Shareholders' recommendations for nominees for membership on the
Board of Directors will be considered by the Nominating Committee. Although the
Nominating Committee has not adopted formal procedures for the submission of
such recommendations, Shareholders may recommend nominees for membership on the
Board of Directors to the Nominating Committee by submitting the names in
writing to: Michael R. Quinlan, Chairman of the Nominating Committee, c/o The
Dun & Bradstreet Corporation, One Diamond Hill Road, Murray Hill, NJ 07974. The
Nominating Committee consists of Messrs. Quinlan (Chairman), Alexander, Lanigan
and Loucks and Mrs. Evans. The Nominating Committee held three meetings during
1997.
In addition to the foregoing, the Board of Directors has the following
committees: the Employee Benefits Committee, consisting of Mrs. Evans
(Chairman), Messrs. Adams, Alexander, Kuehn, Peterson and Taylor, and Drs.
McKinnell and Meyer; the Executive Committee, consisting of Mr. Taylor
(Chairman), Dr. Meyer and Mrs. Evans; the Finance Committee, consisting of
Messrs. Loucks (Chairman), Adams, Alexander, Kuehn, Peterson, Quinlan and
Taylor; and the Policy and Planning Committee, consisting of Dr. Meyer
(Chairman) and all directors. During 1997, the following numbers of meetings of
these committees were held: one meeting of the Employee Benefits Committee, no
meetings of the Executive Committee, one meeting of the Finance Committee, and
two meetings of the Policy and Planning Committee.
Eight regularly scheduled meetings and one special meeting of the Board of
Directors were held during 1997. No director attended fewer than 75% of the
aggregate of all meetings of the Board of Directors and of the committees of the
Board on which he or she served.
SECURITY OWNERSHIP OF MANAGEMENT AND OTHERS
The following table sets forth the number of shares of Dun & Bradstreet
Common Stock, par value $1 per share, the only outstanding equity security
(other than stock options) or voting security of Dun & Bradstreet, beneficially
owned by each of the directors, each of the executive officers named in the
Summary Compensation Table below, and all present directors and executive
officers of Dun & Bradstreet as a group, on December 31, 1997. The table also
sets forth the names and addresses of the only persons known to Dun & Bradstreet
to be the beneficial owners (the "Owners") of more than 5% of the outstanding
Common Stock and the number of shares so owned, to Dun & Bradstreet's knowledge,
on December 31, 1997. Such information is based upon information furnished by
each such person (or, in the case of the Owners, based upon a Schedule 13G filed
by such Owners with the SEC). It should be noted that in certain cases shares
required under rules of the SEC to be shown as beneficially owned are shares to
which the indicated person
4
<PAGE> 8
holds only rights to acquire within 60 days through exercise of stock options or
otherwise. Unless otherwise stated, the indicated persons have sole voting and
investment power over the shares listed. Percentages are based upon the number
of shares of Dun & Bradstreet Common Stock outstanding on December 31, 1997,
plus, where applicable, the number of shares that the indicated person or group
had a right to acquire within 60 days of such date.
<TABLE>
<CAPTION>
NAME NUMBER OF SHARES AND NATURE OF OWNERSHIP PERCENT OF CLASS(1)
---- ---------------------------------------- -------------------
<S> <C> <C> <C>
Hall Adams, Jr. 1,400 Direct(2)
3,000 Rights to Acquire Within 60 Days(3)
----------
4,400 --
Clifford L. Alexander, Jr. 1,300 Direct(2)(4)
4,203 Rights to Acquire Within 60 Days(3)
----------
5,503 --
Mary Johnston Evans 1,900 Direct(2)
45,770 Indirect(5)
3,000 Rights to Acquire Within 60 Days(3)
----------
51,873 --
Chester J. Geveda, Jr. 16,241 Direct(4)
60,210 Rights to Acquire Within 60 Days(3)
----------
76,451 --
Elahe Hessamfar 10,000 Direct(6)
4,841 Rights to Acquire Within 60 Days(3)
----------
14,841 --
Ronald L. Kuehn, Jr. 1,318 Direct(7)
3,000 Rights to Acquire Within 60 Days(3)
----------
4,318 --
Robert J. Lanigan 7,100 Direct(2)(8)
4,203 Rights to Acquire Within 60 Days(3)
----------
10,100 --
Vernon R. Loucks Jr. 1,600 Direct(2)(9)
4,203 Rights to Acquire Within 60 Days(3)
----------
5,803 --
Henry A. McKinnell 884 Direct(7)
257 Rights to Acquire Within 60 Days(3)
----------
1,141 --
John R. Meyer 3,400 Direct(2)(4)
4,203 Rights to Acquire Within 60 Days(3)
----------
7,603 --
Frank R. Noonan 6,465 Direct
113,381 Rights to Acquire Within 60 Days(3)
----------
119,846 --
James R. Peterson 4,300 Direct(2)
3,000 Rights to Acquire Within 60 Days(3)
----------
7,300 --
Michael R. Quinlan 1,400 Direct(2)
3,000 Rights to Acquire Within 60 Days(3)
----------
4,400 --
</TABLE>
5
<PAGE> 9
<TABLE>
<CAPTION>
NAME NUMBER OF SHARES AND NATURE OF OWNERSHIP PERCENT OF CLASS(1)
---- ---------------------------------------- -------------------
<S> <C> <C> <C>
Frank S. Sowinski 2,920 Direct
74,210 Rights to Acquire Within 60 Days(3)
----------
77,130 --
Volney Taylor 104,845 Direct
428,557 Rights to Acquire Within 60 Days(3)
----------
533,402 --
All Directors and Executive 143,288 Direct
Officers as a Group 45,770 Indirect(5)
824,182 Rights to Acquire Within 60 Days(10)
----------
1,013,240 --
Harris Associates L.P. and its 14,903,640 (11) 8.72 %
general partner, Harris
Associates, Inc., Two North
LaSalle Street, Ste. 500,
Chicago, Illinois 60602-3790
AMVESCAP PLC and certain 12,048,320 (12) 7.05 %
of its subsidiaries, 11
Devonshire Square London
EC2M 4YR England
</TABLE>
- ---------------
1) Represents ownership of less than 1% of the outstanding Common Stock unless
otherwise indicated.
2) Includes 900 shares of restricted stock granted under The Dun & Bradstreet
Corporation Restricted Stock Plan for Non-Employee Directors, which shares
are scheduled to vest in 1999, 2000 and 2001.
3) Includes the following number of performance shares delivered under the 1996
The Dun & Bradstreet Corporation Non-Employee Directors' Stock Incentive
Plan (the "1996 Directors' Plan") (in the case of directors) and the Key
Employees Performance Unit Plan for The Dun & Bradstreet Corporation and
Subsidiaries (the "PUP") (in the case of executive officers) in February
1998 based upon performance goals for the 1997 fiscal year: 1,203 shares for
Messrs. Alexander, Lanigan and Loucks and Dr. Meyer; 257 shares for Dr.
McKinnell; 2,776 shares for Mr. Geveda; 4,841 shares for Ms. Hessamfar;
2,788 shares for Mr. Noonan; 5,187 shares for Mr. Sowinski; and 25,452
shares for Mr. Taylor. Messrs. Adams, Kuehn, Peterson and Quinlan and Mrs.
Evans have elected to defer receipt of their 1,203 performance shares until
after retirement. The balance of the indicated shares represents stock
options granted under a Company plan.
4) Includes the following number of shares as to which the indicated person has
shared voting and shared investment power: 400 shares for Mr. Alexander;
2,500 shares for Dr. Meyer; and 9,075 shares for Mr. Geveda.
5) Represents shares owned by Mrs. Evans' spouse, as to which Mrs. Evans
disclaims beneficial ownership.
6) Represents shares of restricted stock granted under the 1989 Key Employees
Restricted Stock Plan, which shares are scheduled to vest in 2000.
7) Represents shares of restricted stock granted to Mr. Kuehn and Dr. McKinnell
under the 1996 Directors' Plan, which shares are scheduled to vest in 2001
and 2002, respectively.
8) Includes shares held in two revocable trusts (one trust holding 5,000 shares
and the other 1,200 shares) for the benefit of Mr. Lanigan in which he is
the settlor and sole beneficial owner and over which he has sole investment
control.
9) Includes 300 shares held in a Keogh Plan for the benefit of Mr. Loucks.
6
<PAGE> 10
10) Includes 54,987 performance shares delivered under the 1996 Directors' Plan
(in the case of directors) and the PUP (in the case of executive officers)
in February 1998 based upon performance goals for the 1997 fiscal year. The
balance of the indicated shares represents stock options granted under a
Company plan.
11) Harris Associates L.P. ("Harris") and its sole general partner, Harris
Associates, Inc., jointly filed a Schedule 13G with the SEC on February 11,
1998. This Schedule 13G shows that Harris, a registered investment adviser,
had, as of December 31, 1997, shared voting power over 14,903,640 shares. Of
such shares, Harris had sole dispositive power over 5,171,140 shares and
shared dispositive power over 9,732,500 shares.
12) AMVESCAP PLC and its subsidiaries, AVZ, Inc. (a holding company), AIM
Management Group Inc. (a holding company), INVESCO, Inc. (a holding
company), INVESCO North American Holdings, Inc. (a holding company), INVESCO
Capital Management, Inc. (a registered investment adviser), INVESCO Funds
Group, Inc. (a registered investment adviser), INVESCO Management &
Research, Inc. (a registered investment adviser), and INVESCO Realty
Advisers, Inc. (a registered investment adviser), jointly filed a Schedule
13G with the SEC on February 11, 1998. This Schedule 13G shows that these
companies had, as of December 31, 1997, shared voting power and shared
dispositive power over 12,048,320 shares.
RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
Upon recommendation of the Audit Committee, the Board of Directors of Dun &
Bradstreet has selected Coopers & Lybrand L.L.P. ("Coopers & Lybrand") as
independent accountants to audit the consolidated financial statements of the
Company for the year 1998. In accordance with a resolution of the Board of
Directors, this selection is being presented to the Shareholders for
ratification at the 1998 Annual Meeting.
Coopers & Lybrand also acted as independent accountants for the year 1997.
In connection with its audit of the consolidated financial statements of the
Company, Coopers & Lybrand also audited the financial statements of various
benefit plans of the Company, reviewed certain filings with the Securities and
Exchange Commission ("SEC"), and performed certain non-audit services.
A representative of Coopers & Lybrand is expected to be present at the
meeting. Such representative will have the opportunity to make a statement, if
he or she so desires, and is expected to be available to respond to appropriate
questions.
If the proposal to ratify the selection of Coopers & Lybrand is not
approved by the Shareholders, or if prior to the 1999 Annual Meeting Coopers &
Lybrand ceases to act as the Company's independent accountants, or if the Board
of Directors removes Coopers & Lybrand as the Company's independent accountants,
then the Board will appoint other independent accountants whose engagement for
any period subsequent to the 1999 Annual Meeting will be subject to ratification
by the Shareholders at that meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE
APPOINTMENT OF COOPERS & LYBRAND.
SHAREHOLDER PROPOSAL ON IMPLEMENTATION
OF THE MACBRIDE PRINCIPLES
The New York City Employees Retirement System, c/o Comptroller of the City
of New York, 1 Centre Street, New York, New York 10007, the beneficial owner
("Owner") of 357,620 shares of Dun & Bradstreet Common Stock ("Shares") on
September 17, 1997; the New York City Teachers Retirement System, c/o
Comptroller of the City of New York, 1 Centre Street, New York, New York 10007,
Owner of 221,900 Shares on September 17, 1997; the New York City Fire Department
Pension Fund Art. 1B, c/o Comptroller of the City of New York, 1 Centre Street,
New York, New York 10007, Owner of 29,021 Shares on September 17, 1997; and the
New York City Police Pension Fund Art. 2, c/o Comptroller of the City of New
York, 1 Centre Street, New York, New York 10007, Owner of 111,519 Shares on
September 17, 1997, have advised the Company that they will introduce at the
meeting the following proposal and statement in support thereof. The Minnesota
State Board of Investment, Suite 105, MEA Building, 55 Sherburne Avenue, St.
Paul, Minnesota
7
<PAGE> 11
55155, Owner of at least 94,126 Shares on November 6, 1997; Sisters of Charity
of the Incarnate Word Retirement Trust, 2600 North Loop West, Houston, Texas
77092, Owner of 27,050 Shares on November 4, 1997; Congregation of the Sisters
of Charity of the Incarnate Word, P.O. Box 230969, 6510 Lawndale, Houston, Texas
77223, Owner of at least 3,400 Shares on October 27, 1997; Christian Brothers
Investment Services, Inc., 675 Third Avenue, 31st Floor, New York, New York
10017, Owner of 2,900 Shares on October 9, 1997; The New York State Common
Retirement Fund, c/o Comptroller of the State of New York, A.E. Smith State
Office Building, Albany, New York 12236, Owner of 637,500 Shares on September
30, 1997; Missionary Oblates of Mary Immaculate, 8818 Cameron Street, Silver
Spring, Maryland 20910, Owner of 1,000 Shares on October 8, 1997; Adrian
Dominican Sisters Shareholder Activity Account, c/o Adrian Dominican Sisters,
1257 East Siena Heights Drive, Adrian, Michigan 49221, Owner of 100 Shares on
October 15, 1997; Adrian Dominican Sisters Benefit Trust -- T. Rowe Price
Advisory Account, c/o Adrian Dominican Sisters, 1257 East Siena Heights Drive,
Adrian, Michigan 49221, Owner of 30,000 Shares on October 15, 1997; and Sisters
of St. Dominic of Caldwell, New Jersey, 52 Old Swartswood Station Road, Newton,
New Jersey 07860-9337, Owner of 100 Shares on October 8, 1997, have advised the
Company that they intend to co-sponsor such proposal.
SHAREHOLDER PROPOSAL
WHEREAS, Dun and Bradstreet operates a wholly-owned subsidiary in Northern
Ireland, Dun and Bradstreet Ltd.;
WHEREAS, the on-going peace process in Northern Ireland encourages us to
search for non-violent means for establishing justice and equality;
WHEREAS, employment discrimination in Northern Ireland has been cited by
the International Commission of Jurists as one of the major causes of the
conflict in that country;
WHEREAS, Dr. Sean MacBride, founder of Amnesty International and Nobel
Peace Laureate, has proposed several equal opportunity employment principles to
serve as guidelines for corporations in Northern Ireland. These include:
1. Increasing the representation of individuals from underrepresented
religious groups in the workforce, including managerial, supervisory,
administrative, clerical and technical jobs.
2. Adequate security for the protection of minority employees both at
the workplace and while traveling to and from work.
3. The banning of provocative religious or political emblems from the
workplace.
4. All job openings should be publicly advertised and special
recruitment efforts should be made to attract applicants from
underrepresented religious groups.
5. Layoff, recall, and termination procedures should not, in practice,
favor particular religious groupings.
6. The abolition of job reservations, apprenticeship restrictions, and
differential employment criteria, which discriminate on the basis of
religion or ethnic origin.
7. The development of training programs that will prepare substantial
numbers of current minority employees for skilled jobs, including the
expansion of existing programs and the creation of new programs to train,
upgrade, and improve the skills of minority employees.
8. The establishment of procedures to assess, identify and actively
recruit minority employees with potential for further advancement.
9. The appointment of a senior management staff member to oversee the
company's affirmative action efforts and the setting up of timetables to
carry out affirmative action principles.
8
<PAGE> 12
RESOLVED, Shareholders request the Board of Directors to:
1. Make all possible lawful efforts to implement and/or increase
activity on each of the nine MacBride Principles.
SUPPORTING STATEMENT
Continued discrimination and worsening employment opportunities have been
cited as contributing to support for a violent solution to Northern Ireland's
problems.
In May 1986, a United States District Court ruled on the legality of the
MacBride Principles under the Fair Employment (Northern Ireland) Act of 1976,
and granted a preliminary injunction requiring that American Brands include a
MacBride Principles shareholder proposal in its proxy materials, stating that
"all nine of the MacBride Principles could be legally implemented by management
in its Northern Ireland facility." NYCERS v. American Brands, 634 F. Supp. 1382
(S.D.N.Y., May 12, 1986). The Employment (Northern Ireland) Act was amended in
1989.
An endorsement of the MacBride Principles by Dun & Bradstreet will
demonstrate the company's concern for human rights and equality of opportunity
in its international operations.
Please vote your proxy FOR these concerns.
OPPOSING STATEMENT OF THE BOARD OF DIRECTORS
In its statements opposing the adoption of identical Shareholder proposals
presented at the 1989, 1990, 1991, 1992, 1993, 1994, 1995, 1996 and 1997 Annual
Meetings of Shareholders, your Board of Directors confirmed the Company's
long-standing commitment to equal opportunity in employment and pointed to the
Company's firm policy that employment opportunities be extended to applicants
and employees on an equal basis, regardless of an individual's race, creed,
color, national origin, religion, age, sex or handicap. We confirm that this
commitment and policy have not changed over the past year and that they are
strongly supported by your Board of Directors.
The Company's presence in Northern Ireland is limited to a small branch
office of Dun & Bradstreet Limited (Irl.) ("D&B Ireland"), which is located in
Bangor, Co. Down and employs 17 people. This office adheres to the standards of
the Fair Employment (Northern Ireland) Act of 1989 (the "Act") and to the
Company's own policy of equal employment opportunity. In April 1992, D&B Ireland
registered with the Fair Employment Commission as required by the Act. None of
the Company, D&B Ireland, or, to the Company's knowledge, the appropriate
governmental agencies in Northern Ireland has ever received any complaint of
religious or political discrimination with respect to the operations of D&B
Ireland, and the Company is satisfied that the employment practices adopted by
the Bangor office are fair and non-discriminatory.
The objective of both the MacBride Principles and the Act is to eliminate
employment discrimination in Northern Ireland. The Company wholeheartedly
supports this objective. However, by adopting the MacBride Principles, the
Company would be accountable to two sets of similar, but not identical, fair
employment guidelines. This would be neither necessary nor desirable,
particularly in view of the Company's own internal policies and practices with
respect to the promotion of fair and equal employment opportunities.
ACCORDINGLY, YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST APPROVAL OF
THIS PROPOSAL.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
REPORT OF THE EXECUTIVE COMPENSATION AND STOCK OPTION COMMITTEE
OVERVIEW OF EXECUTIVE COMPENSATION PHILOSOPHY AND PROGRAM
The Executive Compensation and Stock Option Committee establishes the base
salaries and other compensation of the key executives of the Company, including
its Chairman and Chief Executive Officer. The
9
<PAGE> 13
Committee consists entirely of independent non-employee directors and meets
regularly during the year to review and administer the executive compensation
program of the Company.
As developed by the Committee and adopted by the Board of Directors, the
Company's executive compensation program is designed to:
- attract, motivate and retain key executive talent in support of the
Company's mission to be the premier global provider of business data and
value-added information for business decision makers and investors;
- strengthen the relationship between pay and Company performance and the
alignment of executive rewards with Shareholder returns; and
- provide a balanced total compensation opportunity (including base salary,
annual cash incentive and longer term incentives) that is competitive with other
top-ranking global companies and reflective of the Company's attainment of its
business goals.
The executive compensation program, modified by the Committee in 1997 to
reflect the business challenges of the reorganized Company, consists of the
following three components:
- Base Salaries. Following the reorganization, the Company established a
new compensation comparison group that better reflects the size, competencies
and technological and marketing capabilities with which the business units of
The Dun & Bradstreet Corporation compete for executive talent. Base salaries
will be, in the aggregate, targeted over time at or below the median level of
the Company's compensation comparison group, reflecting a shift in positioning
from the Company's former objective of targeting base salaries above the median
and up to the 65(th) percentile.
- Annual Cash Incentives. Annual cash incentive opportunities are targeted
at greater than the median levels of the compensation comparison group and are
set so that total cash opportunities (base salary plus annual cash incentive
opportunity) are expected to be fully competitive with the median levels of the
compensation comparison group. A greater than normal portion of total cash is at
risk and is delivered only if Company performance exceeds target levels of
performance.
The annual cash incentive offers executives the opportunity to earn cash
awards based on the achievement of pre-determined annual goals. For 1997, these
included cash flow, earnings, improvement in the employee satisfaction index and
other key measures of performance, where appropriate. Fewer goals are set than
in prior programs, with an increased emphasis on the achievement of business
unit results.
- Longer Term Incentives. Longer term incentive opportunities are set
above the median levels of the compensation comparison group. There are two
components of the Company's longer term incentive plan: performance shares and
stock options.
-- Performance Shares. Each year executives have the opportunity to
earn shares of Dun & Bradstreet stock based on the achievement of two-year
revenue growth goals or other key operating objectives, where appropriate.
At the end of the performance period, Company performance at target yields
the targeted award of shares, while Company performance above or below
target yields larger or smaller awards, respectively. Further, Company
performance below threshold yields no share award at all.
-- Stock Options. Annual grants of stock options continue to be an
important part of the executive compensation program. To underscore the
importance of returns to Shareholders, a greater proportion of the
executive's longer term incentive opportunity is now delivered through
stock options.
The total value resulting from longer term incentives changed in two
important respects in 1997: (1) the proportion of value delivered to executives
through stock options has increased; and (2) all longer term incentive awards
are made through equity-based vehicles (performance shares and stock options),
not cash.
EVALUATION OF EXECUTIVE PERFORMANCE
In linking executive pay to performance, the Committee believes that the
most important measure of Company performance is the increase in long-term
Shareholder value, attained through improvements in
10
<PAGE> 14
earnings per share, operating income, revenue and cash flow. The Committee also
considers qualitative corporate, operating unit and individual measures that it
believes are critical in increasing the longer term value of the Company to its
Shareholders.
In 1997, management of the Company effectively implemented The "new" Dun &
Bradstreet Corporation's immediate and longer term strategies, as evidenced by:
- earnings per share growth in line with the Company's goal and analysts'
expectations;
- strong cash flow performance, enabling a reduction in the Company's debt
and significant investment in the business;
- double-digit revenue growth in important, new value-added products and
services;
- announcement and initiation of the Company's intention to separate in
1998 into two independent public companies; and
- strong total shareholder return performance versus that of the companies
that comprise the Standard & Poor's-500 Composite Stock Index (the "S&P 500").
Based on these and other factors, the Committee deemed the 1997
compensation awards to the Chairman and Chief Executive Officer and other
executives of the Company to be appropriate.
TOTAL COMPENSATION
As indicated, a major factor in the Committee's compensation decisions is
the competitive marketplace for executives. The Committee uses the services of
outside compensation consultants to secure data on competitive compensation
levels and trends. In setting competitive compensation levels, the Company
compares itself with a self-selected group of companies of comparable size,
market capitalization, technological and marketing capabilities, performance and
global presence with which the Company competes for executives. Since the
Company's most direct competitors for executive talent are not the same
companies used for a comparison of Shareholder return, the compensation
comparison group is not the same as the performance peer group used for the
Five-Year Cumulative Total Return graph following this Report.
In determining the 1997 total compensation opportunity for Mr. Taylor and
certain executives, the Committee's goal was to set base salaries, annual cash
incentive opportunities and longer term incentive opportunities in line with the
philosophy and pay positioning of the Company's executive compensation program.
In total, base salary increases provided to executives in the Company's
executive compensation program were less than the average of the compensation
comparison group. Increases in annual cash incentive opportunity and long-term
incentives were greater to shift the compensation mix towards more pay "at
risk."
BASE SALARIES
In December of each year, the Committee sets the annual salaries and annual
cash incentive opportunities of executives, including those named in the Summary
Compensation Table below. Salaries and bonus opportunities are normally
effective January 1 of the upcoming year.
On November 1, 1996, Mr. Taylor was appointed Chairman and Chief Executive
Officer of The Dun & Bradstreet Corporation, assuming responsibility for a
reorganized company incorporating three principal businesses: Dun & Bradstreet,
Moody's Investors Service and Reuben H. Donnelley. In consideration of this
change and upon review of competitive compensation data provided by outside
compensation consultants, the Committee increased Mr. Taylor's salary, effective
November 1, 1996, by 24.8% from $505,000 to $630,000; the Committee also
increased Mr. Taylor's annual cash incentive opportunity, effective November 1,
1996, by 31.3% from $400,000 to $525,000. Mr. Taylor's November 1, 1996 change
in salary and target annual cash incentive opportunity remained in effect
throughout 1997 with no further increase.
11
<PAGE> 15
ANNUAL CASH INCENTIVES
Under the Company's Corporate Management Incentive Plan (the "CMIP"), the
Committee set the performance measures for the annual cash incentive opportunity
early in the year after a detailed review by the Board of Directors of the
Company's annual operating budget. No bonus is earned for a performance measure
unless a minimum level of performance is exceeded. The full bonus is earned for
a measure if the target is achieved. Achievement below target results in a lower
bonus for that measure; achievement above target yields a larger bonus, up to a
specified limit.
In determining performance results against targets, the effects of certain
extraordinary events such as major acquisitions and divestitures, significant
one-time charges, and changes in accounting principles required by the Financial
Accounting Standards Board are taken into consideration by the Committee.
The performance measures for the 1997 annual cash incentive opportunity
were apportioned into two key categories: 80% was apportioned to goals such as
earnings per share (EPS) and Company cash flow or, for certain executives,
business unit operating income and cash flow; and 20% was apportioned to
improvement in the employee satisfaction index as measured by the Company's
Business Effectiveness Survey. With respect to Mr. Taylor, the annual cash
incentive opportunity was apportioned 50% to EPS, 30% to Company cash flow, and
20% to stated improvement in the employee satisfaction index.
For 1997 results, Mr. Taylor was awarded a bonus of $702,188 versus a
target annual cash incentive opportunity of $525,000. Mr. Taylor's bonus for
1997 reflects an award above the target annual cash incentive opportunity for
achievement of EPS and Company cash flow results above stated goals; Mr.
Taylor's award for improvement in the employee satisfaction index was below the
target annual cash incentive opportunity for that measure.
LONGER TERM INCENTIVES
The Committee sets the size of longer term incentives (grants of
performance shares and stock options) after considering the practices of the
compensation comparison group. In line with the philosophy and pay positioning
of the Company's executive compensation program (i.e., a greater emphasis on "at
risk" pay), the Committee's goal was to set longer term incentive grants above
the median level of the compensation comparison group. The Committee also
reviews an analysis of the executive's past compensation and, where applicable,
prospective compensation values based on various assumptions of corporate
performance.
PERFORMANCE SHARES
Under the Company's intermediate-term Key Employees Performance Unit Plan
(the "PUP"), executives are granted performance shares which represent the
opportunity to earn shares of Dun & Bradstreet stock at the end of a two-year
period following the date of grant. Awards are based upon the degree to which
previously established performance goals for the period are met. The goals for
each award period include floor, target, and maximum Company or, where
applicable, operating unit performance measures.
Year-end 1996, the Committee approved a target grant of performance shares
for Mr. Taylor and other named executive officers for the performance period
covering the years 1997 and 1998. Mr. Taylor's target grant was 46,151
performance shares contingent on performance. Revenue growth was selected as the
performance measure for this grant to emphasize its importance at The "new" Dun
& Bradstreet Corporation.
Due to the reorganization of the Company on November 1, 1996, no previous
grants under the PUP continued after that date. However, in order to ensure that
an intermediate-term award was in place for 1997, the 1997-1998 performance
share grant was split so that one-half of the grant was based on 1997 revenue
growth, and the award, adjusted by performance, was payable in Company stock at
the conclusion of 1997. The other one-half of the performance share grant is
based on cumulative 1997-1998 revenue growth, and the award, adjusted by
performance, will be payable in Company stock at the conclusion of 1998.
Mr. Taylor's performance share award for the first one-half of the
1997-1998 grant was based 100% on the Company's 1997 revenue growth goal. Due to
performance above the Company's 1997 revenue growth
12
<PAGE> 16
goal, Mr. Taylor received an award of 25,452 performance shares versus the
23,075 one-half target grant. In the Summary Compensation Table below, the award
in shares of Company stock made to Mr. Taylor against his performance share
opportunity is combined with his 1997 bonus and displayed under "Bonus" since it
reflects payment for a period of one year or less.
STOCK OPTIONS
The long-term component of the Company's executive compensation program
consists of stock option grants. The options permit the option holder to buy the
number of shares of Dun & Bradstreet common stock covered by the option at a
price equal to the market price of the stock at the time of grant. Thus, the
options gain value only to the extent that the stock price exceeds the option
exercise price during the life of the option. The options may not be exercised
for at least one year after grant. Generally, they may then be exercised in
installments of 25% of the grant amount each year until they are 100% vested.
Options expire 10 years after the grant date. The table labeled "Option/SAR
Grants in Last Fiscal Year" lists the present values associated with 1997 option
grants to Mr. Taylor and the other named executive officers based on the
Black-Scholes valuation model, which is one of the option valuation methods
permitted by the Securities and Exchange Commission.
TAX DEDUCTIBILITY
Beginning in 1994, Section 162(m) of the U.S. Internal Revenue Code of 1986
limits the deductibility of compensation in excess of $1 million paid to the
Company's Chairman and Chief Executive Officer or to any of the Company's four
highest-paid other executive officers to the extent that this compensation is
not "performance-based." In 1995, the Shareholders approved changes in the
Company's incentive plans to enable certain incentive compensation to certain
executive officers to qualify as "performance-based" compensation under Section
162(m) with respect to grants applicable to 1996 and later years. In 1997 the
Shareholders approved an amendment to the CMIP to provide the Committee with the
flexibility to use priority objectives and other important qualitative measures
(such as employee and/or customer satisfaction) as performance measures for
certain executive officers, even if compensation based on such measures would
not qualify as "performance-based." The Committee approved allocating 20% of the
1997 annual cash incentive opportunity for the Company's Chairman and Chief
Executive Officer, and for certain other executive officers, to stated
improvements in the employee satisfaction index as measured by the Company's
Business Effectiveness Survey. Although this 20% of each officer's 1997 annual
cash incentive opportunity did not qualify as "performance-based" compensation,
the Company did not lose any deductions under Section 162(m) since none of its
officers received total 1997 non-performance-based compensation in excess of $1
million.
EXECUTIVE COMPENSATION AND STOCK OPTION COMMITTEE
Ronald L. Kuehn, Jr., Chairman
Robert J. Lanigan
Vernon R. Loucks Jr.
Henry A. McKinnell
James R. Peterson
Michael R. Quinlan
13
<PAGE> 17
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
DUN & BRADSTREET, S&P 500, OLD PEER GROUP AND NEW PEER GROUP
<TABLE>
<CAPTION>
MEASUREMENT PERIOD DUN & OLD PEER NEW PEER
(FISCAL YEAR COVERED) BRADSTREET S&P 500 GROUP GROUP
<S> <C> <C> <C> <C>
12/31|1992 100.00 100.00 100.00 100.00
12/31|1993 111.03 110.08 119.91 119.20
12/31|1994 103.61 111.53 110.52 123.36
12/31|1995 127.81 153.45 129.84 163.58
12/31|1996 126.58 188.68 143.29 200.63
12/31|1997 170.41 251.63 219.33 218.96
</TABLE>
THE ABOVE GRAPH COMPARES THE COMPANY'S CUMULATIVE TOTAL SHAREHOLDER RETURN FROM
DECEMBER 31, 1992 TO DECEMBER 31, 1997 AGAINST THE CUMULATIVE TOTAL RETURN OF
THE STANDARD & POOR'S 500 INDEX AND AN INDEX OF PERFORMANCE PEER GROUP
COMPANIES. THE PERFORMANCE PEER GROUP CONSISTS OF AMERICAN BUSINESS INFORMATION,
INC., EQUIFAX INC., DOW JONES & COMPANY, INC., THE MCGRAW HILL COMPANIES,
TIMES-MIRROR COMPANY, FIRST DATA CORPORATION, CERIDIAN CORPORATION, REUTERS
HOLDINGS PLC, THE DIALOG CORPORATION AND THE NEW YORK TIMES COMPANY, WHICH
COMPANIES ARE BELIEVED BY THE COMPANY TO BE REPRESENTATIVE OF ITS COMPETITORS IN
THE INDUSTRIES IN WHICH THE COMPANY COMPETES. FOR COMPARATIVE PURPOSES, THE
ABOVE GRAPH ALSO ILLUSTRATES THE CUMULATIVE TOTAL SHAREHOLDER RETURN OF THE
COMPANIES COMPRISING BUSINESSWEEK'S PUBLISHING GROUP AS PUBLISHED ON AUGUST 25,
1997. ALTHOUGH THE COMPANY USED BUSINESSWEEK'S PUBLISHING GROUP AS ITS PEER
GROUP FOR PURPOSES OF THE PERFORMANCE GRAPH INCLUDED IN LAST YEAR'S PROXY
STATEMENT, BUSINESSWEEK DROPPED THE COMPANY FROM ITS PUBLISHING GROUP DURING
1997, AND THE COMPANY BELIEVES THAT THE PUBLISHING GROUP IS NO LONGER
REPRESENTATIVE OF ITS COMPETITORS IN THE INDUSTRIES IN WHICH THE COMPANY
COMPETES. ON NOVEMBER 1, 1996, THE COMPANY DISTRIBUTED TO SHAREHOLDERS ITS
INTEREST IN COGNIZANT CORPORATION AND ACNIELSEN CORPORATION. ACCORDINGLY, OF THE
FIVE YEARS SHOWN IN THE ABOVE GRAPH, THREE YEARS AND TEN MONTHS REPRESENT THE
PERFORMANCE OF DUN & BRADSTREET PRIOR TO THE DISTRIBUTION, AND ONLY ONE YEAR AND
TWO MONTHS REPRESENT PERFORMANCE POST-DISTRIBUTION. THE GRAPH ACCOUNTS FOR THIS
DISTRIBUTION AS THOUGH IT WERE PAID IN CASH AND REINVESTED IN COMMON SHARES OF
THE COMPANY.
14
<PAGE> 18
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-----------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
---------------------------------- ----------------------- ---------
(A) (B) (C) (D) (G) (H) (I)
(E) (F) SECURITIES LONG-
OTHER RESTRICTED UNDERLYING TERM
ANNUAL STOCK OPTIONS/ INCENTIVE ALL OTHER
NAME AND SALARY BONUS COMPENSATION AWARD(S) SAR'S PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR ($) (1)($) (2)($) (3)($) (4)(#) (5)($) (6)($)
------------------ ---- ------- --------- ------------ ---------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Volney Taylor............. 1997 630,000 1,517,449 231 0 120,540 0 20,449
Chairman and Chief 1996 525,833 921,875 15,445 0 202,467 2,100,019 34,883
Executive Officer 1995 495,000 303,615 0 202,556 42,220 405,120 29,821
Frank S. Sowinski......... 1997 320,000 381,746 36 0 30,130 0 10,177
Senior Vice President & 1996 252,000 235,338 0 0 38,704 409,663 12,898
Chief Financial Officer 1995 228,800 92,307 0 22,473 10,428 45,010 10,009
Frank R. Noonan........... 1997 347,000 346,913 11,630 0 33,480 0 11,863
Senior Vice President 1996 338,000 406,875 7,417 0 48,334 793,815 22,754
1995 320,570 245,479 7,346 111,151 20,566 222,340 22,110
Elahe Hessamfar(7)........ 1997 168,750 375,064 20,731 280,625 57,941 0 4,516
Chief Information
Officer 1996 0 0 0 0 0 0 0
1995 0 0 0 0 0 0 0
Chester J. Geveda, Jr..... 1997 257,500 246,711 35 0 16,070 0 8,059
Vice President & 1996 237,541 233,906 0 0 50,639 275,429 12,668
Controller 1995 208,409 76,953 0 23,281 8,145 46,601 9,428
</TABLE>
- ---------------
(1) The 1997 bonus amounts shown were earned with respect to that year and paid
in 1998. Included in the 1997 amounts is one-half of the 1997 performance
share grant made under the PUP and earned with respect to 1997. The
remaining one-half of the 1997 performance share grant is payable after two
years based on cumulative 1997 -- 1998 performance goals and will be
reflected as long-term incentive payouts in the 1999 Summary Compensation
Table. The performance shares are paid in unrestricted shares of the
Company's common stock. The 1996 bonus amounts shown were earned in 1996;
amounts earned prior to the November 1, 1996 reorganization of the Company
into three independent public companies were paid in 1996 and the balance
paid in 1997. The 1995 bonus amounts shown were earned with respect to that
year and paid in 1996.
(2) Amounts shown represent reimbursement for taxes paid by the named executive
officers with respect to Company-directed spousal travel and personal use of
automobiles and/or reimbursement for certain other expenses.
(3) Amounts shown represent the dollar value of restricted stock on the date of
grant. The number and value of the aggregate restricted stock holdings of
the named executive officers at December 31, 1997 were: Messrs. Taylor,
Sowinski, Noonan and Geveda -- none; Ms. Hessamfar -- 10,000 shares
($309,375). Ms. Hessamfar's 10,000 shares of restricted stock are scheduled
to vest in full in September 2000. Dividends are paid at the rate
established from time to time for Dun & Bradstreet Common Stock.
(4) Amounts shown represent the number of non-qualified stock options granted
each year. Messrs. Taylor, Sowinski, Noonan and Geveda's 1996 grants were
made after the reorganization of the Company into three independent public
companies, and their 1995 stock option grants have been adjusted to reflect
the change in the Company's stock price as a result of said reorganization.
(5) No payments were made to any of the named executive officers in 1997.
Amounts shown represent payments made in each year under the PUP. The
amounts shown for 1996 represent a cash payout of the cash and restricted
stock components of the 1993, 1994 and 1995 PUP awards, as required by the
November 1, 1996 reorganization pursuant to the terms of the PUP.
(6) Amounts shown represent aggregate annual Company contributions for the
account of each named executive officer under the Dun & Bradstreet Profit
Participation Plan ("PPP") and the Profit Participation Benefit Equalization
Plan ("PPBEP"), which plans are open to employees of the Company and certain
subsidiaries. The PPP is a tax-qualified defined contribution plan and the
PPBEP is a non-
15
<PAGE> 19
qualified plan that provides benefits to participants in the PPP equal to
the amount of Company contributions that would have been made to the
participant's PPP account but for certain Federal tax laws.
(7) Hired effective August 18, 1997. Salary shown represents actual amount paid
for the portion of the year employed. In accordance with her employment
offer, Ms. Hessamfar was guaranteed a full-year bonus for 1997.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- ------------------------------------------------------------------------------------
(A) (B) (C) (D) (E) (F)
NUMBER OF
SECURITIES
UNDERLYING % OF TOTAL
OPTIONS/ OPTIONS/SAR'S EXERCISE
SAR'S GRANTED TO OR BASE GRANT DATE
GRANTED(1) EMPLOYEES IN PRICE EXPIRATION PRESENT VALUE(2)
NAME (#) FISCAL YEAR ($/SHARE) DATE ($)
- ---------------------------- ---------- ------------- --------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
Volney Taylor............... 120,540 3.82% 30.2188 12/22/07 672,613
Frank S. Sowinski........... 30,130 0.96% 30.2188 12/22/07 168,125
Frank R. Noonan............. 33,480 1.06% 30.2188 12/22/07 186,818
Elahe Hessamfar............. 27,700 0.88% 30.2188 12/22/07 154,566
30,241 0.96% 27.5938 08/18/07 158,463
Chester J. Geveda, Jr....... 16,070 0.51% 30.2188 12/22/07 89,671
</TABLE>
- ---------------
(1) Amounts shown represent the number of non-qualified stock options, without
tandem stock appreciation rights ("SAR's"), granted in 1997. Options may not
be exercised for at least one year after grant and may then be exercised in
installments of 25% of the grant amount each year until they are 100%
vested. Payment for all options must be made in full upon exercise in cash
or Common Stock. The option holder may elect to have shares of Common Stock
issuable upon exercise withheld by the Company to pay withholding taxes due.
The options shown include Limited SAR's in tandem with the options. Limited
SAR's are exercisable only if and to the extent that the related option is
exercisable and are exercisable only during the 30-day period following the
acquisition of at least 20% of the outstanding Common Stock pursuant to a
tender or exchange offer not made by the Company. Each Limited SAR permits
the holder to receive cash equal to the excess over the related option
exercise price of the highest price paid pursuant to a tender or exchange
offer for Common Stock which is in effect at any time during the 60 days
preceding the date upon which the Limited SAR is exercised. Limited SAR's
can be exercised regardless of whether the Company supports or opposes the
offer.
(2) Grant date present value is based on the Black-Scholes option valuation
model, which makes the following material assumptions for the August 18,
1997 grants and the December 22, 1997 grants: an expected stock-price
volatility factor of 20.0%, a risk-free rate of return of 6.02% and 5.71%
respectively, a dividend yield of 3.3% and a weighted average exercise date
of 4.5 years from date of grant. These assumptions may or may not be
fulfilled. The amounts shown cannot be considered predictions of future
value. In addition, the options will gain value only to the extent the stock
price exceeds the option exercise price during the life of the option.
16
<PAGE> 20
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
<TABLE>
<CAPTION>
(A) (B) (C) (D) (E)
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS/SAR'S AT FISCAL In-the-Money Options/SAR's
ACQUIRED VALUE YEAR-END(#) AT FISCAL YEAR-END(2)($)
ON EXERCISE REALIZED(1) --------------------------- ---------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Volney Taylor.......... 22,817 170,799 403,105 316,836 4,302,261 1,649,054
Frank S. Sowinski...... 3,662 20,388 69,023 69,025 722,342 333,499
Frank R. Noonan........ 0 0 110,593 87,423 1,148,481 455,428
Elahe Hessamfar........ 0 0 0 57,941 0 121,025
Chester J. Geveda,
Jr................... 4,266 36,333 57,434 68,310 622,792 404,484
</TABLE>
- ---------------
(1) Amounts shown represent the value realized upon the exercise of stock
options during 1997, which equals the difference between the exercise price
of the options and the average of the high and low market price of the
underlying Common Stock on the exercise date.
(2) The values shown equal the difference between the exercise price of
unexercised in-the-money options and the closing market price of the
underlying Common Stock at December 31, 1997. Options are in-the-money if
the fair market value of the Common Stock exceeds the exercise price of the
option.
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
(A) (B) (F)
(C) (D) (E)
PERFORMANCE ESTIMATED FUTURE PAYOUTS
NO. OF OR OTHER UNDER NON-STOCK PRICE-BASED PLANS(2)
SHARES, UNITS PERIOD UNTIL ---------------------------------------
OR OTHER MATURATION THRESHOLD(#) TARGET(#) MAXIMUM(#)
NAME RIGHTS(1)(#) OR PAYOUT (0%) (100%) (200%)
- ------------------------------ ------------- ------------ ------------ --------- ----------
<S> <C> <C> <C> <C> <C>
Volney Taylor................. 40,310 Two Years 0 40,310 80,620
Frank S. Sowinski............. 10,080 Two Years 0 10,080 20,160
Frank R. Noonan(3)............ 11,200 Two Years 0 11,200 22,400
Elahe Hessamfar............... 9,260 Two Years 0 9,260 18,520
Chester J. Geveda, Jr......... 5,370 Two Years 0 5,370 10,740
</TABLE>
- ---------------
(1) Amounts shown represent the performance shares granted under the Dun &
Bradstreet Performance Unit Plan. The granting of these performance shares
is described in the Report of the Executive Compensation and Stock Option
Committee above. The performance shares will be payable in February 2000
based on cumulative 1998 -- 1999 performance goals. Earned awards will be
paid in unrestricted shares of the Company's common stock.
(2) Awards may range from 0 to 200% of the targeted number of Performance Shares
based on achievements within a range of performance goals.
(3) Dun & Bradstreet has announced its intention to split into two public
companies later in 1998. At the time such transaction is completed, Mr.
Noonan will receive a pro rata payment of performance shares based on
achievement of performance goals through the date of such transaction.
RETIREMENT BENEFITS
The following table sets forth the estimated aggregate annual benefits
payable under Dun & Bradstreet's Retirement Account Plan, Pension Benefit
Equalization Plan ("PBEP") and Supplemental Executive Benefit Plan ("SEBP") as
in effect during 1997 to persons in specified average final compensation and
credited service classifications upon retirement at age 65. Amounts shown in the
table include U.S. Social Security benefits which would be deducted in
calculating benefits payable under these plans. These aggregate annual
retirement benefits do not increase as a result of additional credited service
after 20 years.
17
<PAGE> 21
<TABLE>
<CAPTION>
ESTIMATED AGGREGATE ANNUAL RETIREMENT BENEFIT
AVERAGE ASSUMING CREDITED SERVICE OF:
FINAL ---------------------------------------------------------------
COMPENSATION 15 YEARS 20 YEARS 25 YEARS
------------ ------------------- ------------------- -------------------
<S> <C> <C> <C>
$ 550,000................. $275,000 $ 330,000 $ 330,000
700,000................. 350,000 420,000 420,000
850,000................. 425,000 510,000 510,000
1,000,000................ 500,000 600,000 600,000
1,300,000................ 650,000 780,000 780,000
1,600,000................ 800,000 960,000 960,000
1,900,000................ 950,000 1,140,000 1,140,000
<CAPTION>
ESTIMATED AGGREGATE ANNUAL RETIREMENT BENEFIT
AVERAGE ASSUMING CREDITED SERVICE OF:
FINAL -----------------------------------------
COMPENSATION 30 YEARS 35 YEARS
------------ ------------------- -------------------
<S> <C> <C>
$ 550,000................. $ 330,000 $ 330,000
700,000................. 420,000 420,000
850,000................. 510,000 510,000
1,000,000................ 600,000 600,000
1,300,000................ 780,000 780,000
1,600,000................ 960,000 960,000
1,900,000................ 1,140,000 1,140,000
</TABLE>
The number of years of credited service under the plans for Messrs. Taylor,
Sowinski, Noonan and Geveda and Ms. Hessamfar are 26, 13, 8, 21 and 0,
respectively.
Compensation, for the purpose of determining retirement benefits, consists
of salary, wages, regular cash bonuses, commissions and overtime pay. Severance
pay, contingent payments and other forms of special remuneration are excluded.
Bonuses included in the Summary Compensation Table are normally not paid until
the year following the year in which they are accrued and expensed; therefore,
compensation for purposes of determining retirement benefits varies from the
Summary Compensation Table amounts in that bonuses expensed in the previous
year, but paid in the current year, are part of retirement compensation in the
current year, and current year's bonuses accrued and included in the Summary
Compensation Table are not. For 1997, compensation for purposes of determining
retirement benefits also varies from the Summary Compensation Table in that the
amounts shown in the "Bonus" column include performance share payouts under the
PUP, which are not creditable compensation under the retirement plans.
For the reasons discussed above, compensation for determining retirement
benefits for the named executive officers differed by more than 10% from the
amounts shown in the Summary Compensation Table. 1997 compensation for purposes
of determining retirement benefits for Messrs. Taylor, Sowinski, Noonan and
Geveda and Ms. Hessamfar was $651,875, $329,000, $382,000, $264,011 and
$168,750, respectively.
Average final compensation is defined as the highest average annual
compensation during five consecutive twelve-month periods in the last ten
consecutive twelve-month periods of the member's credited service. Members vest
in their accrued retirement benefit upon completion of five years of service.
The benefits shown in the table above are calculated on a straight-life annuity
basis.
The Retirement Account Plan, together with the PBEP, provides retirement
income based on a percentage of annual compensation. The percentage of
compensation allocated annually ranges from 3% to 12.5%, based on age and
credited service. Amounts allocated also receive interest credits based on
30-year Treasuries with a minimum interest credit rate of 3%. Executives close
to or eligible to retire as of January 1, 1997 will receive the higher of
benefits provided by the final pay formula in effect prior to 1997 or the
Retirement Account formula.
The SEBP provides retirement benefits in addition to the benefits provided
under the Retirement Account Plan and the PBEP. The SEBP has the effect of
increasing the retirement benefits under the Retirement Account Plan and the
PBEP to the amounts depicted in the preceding table. The SEBP provides maximum
benefits after 20 years. Executives close to or eligible for retirement, as
approved by the Chairman and CEO, will receive maximum benefits after 15 years.
CHANGE-IN-CONTROL SEVERANCE AGREEMENTS
Beginning in 1989, the Company entered into agreements with the executive
officers named in the Summary Compensation Table above (as well as other
officers and key employees of Dun & Bradstreet and its domestic subsidiaries)
providing for certain benefits upon actual or constructive termination of
employment in the event of a Change in Control (as defined below) of the
Company. With respect to Mr. Taylor, if, following a Change in Control, his
employment is terminated other than for cause or by reason of death, disability
or normal retirement, or he terminates employment for "good reason" (generally,
an unfavorable change in
18
<PAGE> 22
employment status, compensation or benefits or a required relocation), he shall
be entitled to receive (i) a lump sum payment equal to three times salary plus
guideline bonus opportunity, (ii) continuation of welfare benefits and certain
perquisites for three years, (iii) retiree medical and life insurance benefits
starting at age 55, (iv) outplacement consulting in the amount of 20% of salary
plus guideline bonus opportunity, but not to exceed a maximum of $100,000, (v)
immediate vesting of all deferred compensation and benefit plan entitlements,
(vi) a prorated annual target bonus for the year in which the Change in Control
occurs and a full target bonus for all other bonus plans in effect at the time
of termination, and (vii) payment of any excise taxes due in respect of the
foregoing benefits. The term of his original agreement continued until December
31, 1992, after which it was extended for additional one-year terms until the
agreement was amended on July 17, 1997. The term of the current agreement will
continue through December 31, 1999, after which it will be automatically
extended for additional one-year terms subject to termination by the Company.
There is an automatic 24-month extension following any Change in Control. The
benefits described in clauses (iii) and (vi) above were added as enhancements to
the agreement in the 1997 amendments. A Change in Control generally is deemed to
occur if: (i) any person becomes the owner of 20% of Dun & Bradstreet's voting
securities; (ii) during any twenty-four month period the majority of the
membership of the Board of Directors changes without approval of two-thirds of
the directors who either were directors at the beginning of the period or whose
election was previously so approved; (iii) the Shareholders approve a merger or
consolidation with another company after which either (x) Dun & Bradstreet's
voting securities do not continue to represent at least 50% of the surviving
entity or (y) any person holds 20% or more of Dun & Bradstreet's voting
securities; or (iv) the Shareholders approve a liquidation, sale or disposition
of all or substantially all of the Company's assets. The agreements for Messrs.
Sowinski and Noonan and Ms. Hessamfar are substantially the same as that for Mr.
Taylor. The agreement for Mr. Geveda is also substantially the same as that for
Mr. Taylor, except that (1) the lump sum payment is equal to two times salary
plus bonus opportunity, (2) welfare benefits and certain perquisites will
continue for two years and (3) outplacement consulting will be in the amount of
15% of salary plus bonus opportunity, but not to exceed a maximum of $50,000.
COMPENSATION OF DIRECTORS
Cash Compensation. In 1997, each director not employed by the Company was
paid a retainer at an annual rate of $25,000 in quarterly installments, and each
such director who was Chairman of a Committee of the Board of Directors was paid
an additional retainer at an annual rate of $4,000 in quarterly installments. In
addition, each such director was paid a fee of $1,000 for each Board or
Committee meeting attended in 1997. If a Board or Committee meeting lasted more
than half a day or if such meeting was held other than on a date regularly
scheduled for a Board meeting, the regular $1,000 fee was doubled for such
meeting. Directors who were employed by the Company received no retainers or
fees.
Each director not employed by the Company may elect on or before December
31 of any year to have all or a specified part of the retainer and fees during
the subsequent calendar year or years deferred until such director ceases to be
a director. New directors may similarly so elect at the beginning of their
terms. Such deferred amounts are held for the account of directors and receive
the rate earned by one or more investment options in the PPP as selected by the
director. Deferred amounts and earnings thereon are paid in accordance with a
director's election in a lump sum or five or ten annual installments commencing
on the tenth day of the calendar year following the year in which such person
ceases to be a director of Dun & Bradstreet, except that the balance of a
director's account is paid in a lump sum on the tenth day of the calendar year
following the director's death to the director's estate or to such beneficiary
as was previously designated by the director. A director may change or terminate
an election to defer retainers and fees, effective as of the end of the calendar
year in which notice of such change or termination is given to Dun & Bradstreet.
Upon the occurrence of a Change in Control of the Company, (i) a lump sum
payment shall be made to each director of the amount credited to the director's
deferred account on the date of the Change in Control and (ii) the total amount
credited to each director's deferred account from the date of the Change in
Control until the date such director ceases to be a director shall be paid in a
lump sum at that time. In addition, any notice by a director to change or
terminate an election to defer retainers and fees given on or before the date of
19
<PAGE> 23
the Change in Control shall be effective as of the date of the Change in Control
rather than the end of the calendar year.
1996 Directors' Plan. Effective December 18, 1996, the Company adopted the
1996 The Dun & Bradstreet Corporation Non-Employee Directors' Stock Incentive
Plan (the "1996 Directors' Plan"). Pursuant to the 1996 Directors' Plan, the
Directors' Restricted Stock Plan was frozen as of November 1, 1996 and
non-employee Directors commencing service on or after November 1, 1996 receive a
one-time grant of such number of shares of restricted stock as equals the
average of the high and low prices of the Company's Common Stock on the date
such person is elected a director divided into the annual directors' retainer
fee in effect on such date. The shares will vest in accordance with the vesting
provisions of the Directors' Restricted Stock Plan. Dr. McKinnell was elected a
director on October 15, 1997 and was granted 884 shares of restricted stock.
The 1996 Directors' Plan terminated the annual retirement benefits under
the Directors' Retirement Plan. In lieu of accrued benefits under the Director's
Retirement Plan, each non-employee director received a number of phantom units
of Company stock. The number of phantom stock units granted to each of Messrs.
Adams, Alexander, Lanigan, Loucks, Peterson and Quinlan, Dr. Meyer and Mrs.
Evans were, respectively, 6,896, 6,820, 9,983, 6,357, 10,371, 10,232, 3,434 and
8,538.
Additional phantom stock units will be credited to each director having a
value equal to the amount of dividends paid on the number of shares of Common
Stock represented by the phantom stock units credited to each director. After
retirement, each director will receive a cash distribution in accordance with a
previously made election as to the form and manner of distribution.
Pursuant to the 1996 Directors' Plan, non-employee directors receive
performance shares based on the degree to which the Company's total shareholder
return is equal to, greater than or less than the total shareholder return of
the Standard & Poor's 500 Index (the "S&P 500"). The Board has established the
target number of performance shares for 1998 at 1,000 shares and has established
the target percentile of the total shareholder return of the S&P 500 for 1998 to
earn 100% of the target number of performance shares at the 50th percentile. A
maximum of 125% of the target number of performance shares can be earned on a
prorated basis for Company shareholder return between the 50th and 60th
percentile, and 75% of the target number of performance shares will be earned
for Company shareholder return below the 50th percentile. Directors who have
served less than a full performance year on the Board will be awarded
performance shares based on their prorated Board service and actual total
shareholder return results. The Board may adjust target award levels in December
of each year to reflect changes in stock prices and/or competitive pay levels.
Directors may elect to defer receipt of their performance share awards until
after the termination of their Board service.
Under the 1996 Directors' Plan, the Board grants at its December Board
meeting in each year stock options with a nominal grant value based on
competitive pay levels to each non-employee Director who will serve on the Board
for the forthcoming year. The exercise price of the options is the average of
the high and low prices of the Company's Common Stock on the date of grant. The
options expire on the tenth anniversary of the date of grant, and the options
become fully exercisable after one year. In December 1997, 3,000 options were
granted to each non-employee Director.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Mr. William F. Doescher inadvertently filed a Form 4, covering one
transaction, late during 1997.
OTHER MATTERS
Dun & Bradstreet knows of no matters, other than those referred to herein,
which will be presented at the meeting. If, however, any other appropriate
business should properly be presented at the meeting, the persons named in the
enclosed form of proxy will vote the proxies in accordance with their best
judgment.
20
<PAGE> 24
SHAREHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Shareholder proposals intended to be presented at the Dun & Bradstreet
Annual Meeting of Shareholders in 1999 must be received by Dun & Bradstreet no
later than November 25, 1998.
March 6, 1998
21
<PAGE> 25
THE DUN & BRADSTREET CORPORATION
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS. A PROXY WHICH IS SIGNED
AND RETURNED BY A SHAREHOLDER OF RECORD WITHOUT SPECIFICATION MARKED IN THE
INSTRUCTION BOXES WILL BE VOTED FOR ELECTION OF ALL NOMINEES IDENTIFIED IN ITEM
(1), FOR ITEM (2), AND AGAINST ITEM (3). WITH RESPECT TO EACH OF ITEMS (1), (2)
AND (3), THE TRUSTEE OF THE PPP AND DPPP WILL VOTE THE SHARES OF COMMON STOCK
HELD IN THE PPP AND DPPP FOR WHICH VOTING INSTRUCTIONS HAVE NOT BEEN RECEIVED
PRIOR TO APRIL 7, 1998 WITH RESPECT TO SUCH ITEM, IN THE SAME PROPORTION AS
THOSE PPP AND DPPP SHARES FOR WHICH IT HAS RECEIVED INSTRUCTIONS ON SUCH ITEM.
Date______________________________, 1998
________________________________________
________________________________________
Signature(s)
Please sign exactly as name appears at
left. Joint owners should each sign.
Executors, administrators, trustees etc.
should so indicate when signing and sign
as required by the authority held.
Proxy form begins on the reverse side.
PLEASE VOTE, DATE, SIGN AND RETURN
IMMEDIATELY.
<PAGE> 26
THE DUN & BRADSTREET CORPORATION
PROXY/VOTING INSTRUCTIONS FOR THE ANNUAL MEETING TO BE HELD APRIL 14, 1998
AT 9:30 A.M. AT 1209 ORANGE STREET, WILMINGTON, DELAWARE
VOLNEY TAYLOR, FRANK S. SOWINSKI and MITCHELL C. SUSSIS, or any of them,
with full power of substitution, and/or Bankers Trust Company (or its successor)
as Trustee of the Dun & Bradstreet Profit Participation Plan (the "PPP") and the
DonTech Profit Participation Plan (the "DPPP"), are hereby authorized and/or
instructed to represent and/or vote all the shares of Common Stock of The Dun &
Bradstreet Corporation which the undersigned is entitled to vote at the Annual
Meeting of Shareholders on April 14, 1998, and at any adjournment thereof:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION OF ALL NOMINEES IDENTIFIED
IN ITEM (1) AND FOR ITEM (2).
(1) Election of Class II Directors for a three-year term expiring at the 2001
Annual Meeting of Shareholders. Nominees: Clifford L. Alexander, Jr.,
Mary Johnston Evans and Henry A. McKinnell.
/ / FOR all nominees listed, / / WITHHOLD authority to
except vote withheld from the vote for all nominees
following nominees (if any):
(2) Ratification of the selection of Coopers & Lybrand L.L.P. as independent
accountants to audit the Company's consolidated financial statements for
1998. Mark only one.
/ / FOR / / AGAINST / / ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST ITEM (3).
(3) Approval of a Shareholder proposal regarding implementation of the
MacBride Principles in Northern Ireland. Mark only one.
/ / FOR / / AGAINST / / ABSTAIN
(Please Turn Over and Sign)
