As filed with the Securities and Exchange Commission on April 1, 1997
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM S-3
Registration Statement
Under
The Securities Act of 1933
NFO RESEARCH, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 06-1327424
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2 PICKWICK PLAZA, SUITE 400
GREENWICH, CONNECTICUT 06830
(203) 629-8888
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
WILLIAM E. LIPNER
CHAIRMAN OF THE BOARD
NFO RESEARCH, INC.
2 PICKWICK PLAZA, SUITE 400
GREENWICH, CONNECTICUT 06830
(203) 629-8888
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
WITH A COPY TO:
JAMES M. DUBIN
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019-6064
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box: [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering: [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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Proposed
Proposed maximum maximum
TITLE OF SECURITIES Amount to be offering price aggregate Amount of
TO BE REGISTERED registered per share(1) offering price registration fee
- ---------------------------- ------------------- ----------------- ------------------- ------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 1,875,000 shares(2) $17.125 $32,109,375 $9,730
============================ =================== ================= =================== ==================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) under the Securities Act of 1933, as amended,
based upon the average of the high and low prices reported on the Nasdaq
National Market on March 27, 1997.
(2) Represents 1,875,000 shares of Common Stock issuable pursuant to the NFO
Research, Inc. Stock Option Plan. This registration statement also relates
to such indeterminate number of additional shares of Common Stock of NFO
Research, Inc. as may be issuable as a result of stock splits, stock
dividends or additional similar transactions.
- --------------------------------------------------------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THE REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
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Page 1 of ___ Pages
Exhibit Index on Page ___
<PAGE>
SUBJECT TO COMPLETION, DATED APRIL 1, 1997
1,875,000 SHARES
NFO RESEARCH, INC.
COMMON STOCK
(PAR VALUE $.01 PER SHARE)
--------------
This prospectus relates to up to 1,875,000 shares of Common Stock, par
value $.01 per share ("Common Stock"), of NFO Research, Inc. (the "Company"),
which may be issued upon exercise of nonqualified stock options ("Stock
Options") granted to participants (each a "Participant" and, collectively, the
"Participants") under the NFO Research, Inc. Stock Option Plan (the "Plan"),
some or all of which may be transferred by a Participant to initially (i) a
member of a Participant's immediate family (defined as spouse, children,
stepchildren and grandchildren, including relations arising from legal
adoption), (ii) a trust established for the exclusive benefit of the Participant
or one or more members of his or her immediate family or (iii) a partnership or
limited liability company the partners or shareholders of which are limited to
the Participant and his or her immediate family (in each case, a "Stock Option
Transferee"), in each case, in accordance with the Plan and the grant documents
specifying the terms and conditions of such Stock Options. This prospectus also
relates to the offer and sale of Common Stock pursuant to such Stock Options to
the beneficiaries of immediate family members, or the executors, administrators
or beneficiaries of their estates, or other persons duly authorized by law to
administer the estate or assets of such persons.
--------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
--------------
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS
OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND IF GIVEN OR MADE SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THESE SECURITIES IN ANY JURISDICTION TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH
JURISDICTION.
--------------
THIS PROSPECTUS SHOULD BE RETAINED FOR FUTURE REFERENCE.
--------------
The date of this Prospectus is April 1, 1997
<PAGE>
THE COMPANY
NFO Research, Inc. and its subsidiaries (collectively, "NFO" or the
"Company") are leading providers of custom and syndicated marketing information
services using, among other things, a proprietary panel (the "NFO Panel") of
pre-recruited consumer households. NFO provides its marketing information
services, databases and market research services to a variety of nationally
recognized packaged goods manufacturers as well as telecommunications, financial
services and pharmaceutical companies. During 1996, the Company conducted over
4,300 research projects for more than 1,100 clients. The Company's five largest
clients in terms of revenues in 1996 were The Procter & Gamble Company, Pfizer,
Inc., Citibank Corp., Zeneca Pharmaceuticals Group and The Eastman Kodak
Company. The Company's top ten clients represented approximately 31% of its
consolidated revenues in 1996, and have been served by the Company for an
average of 21 consecutive years. The Company's clients use custom panel research
to make product or service introduction and reformulation decisions and to
develop, implement and monitor marketing and advertising programs. NFO also
conducts the consumer confidence survey for the Conference Board that is
recognized by the U.S. Department of Commerce as a leading economic indicator.
The NFO Panel consists of more than 525,000 households, including more
than 1.3 million people. The Company believes that the NFO Panel is the largest
pre-recruited consumer panel in the custom market research industry. The NFO
Panel is designed to match the general US population according to US Bureau of
Census statistics on several important geographic and demographic
characteristics. NFO develops and maintains extensive demographic profiles of
these households, including information with respect to size and composition of
household, household income, age of household members and education and
occupation of adult household members. The Company also maintains a variety of
information relating to ownership and usage of various products and services.
This information, which is continuously updated, is central to the Company's
ability to identify efficiently consumers with specific characteristics targeted
by each research project. The Company surveys targeted consumers in its NFO
Panel, primarily through mail questionnaires and telephone interviews, about
their beliefs, attitudes and behavior regarding consumer products and services.
The Company believes that in recent years there has been a trend among its
clients to focus on smaller market segments for product or service introductions
and marketing programs rather than on broad, mass markets and to focus on
segmenting existing product lines to provide products developed for targeted
consumers. The size of the NFO Panel and NFO's extensive demographic and
geographical profiles of the NFO Panel households facilitate the ability of NFO
to assist its clients with such "target" or "micro-marketing." The Company also
anticipates the demand for panel research may be favorably affected by the
impact of legislation proposed in many jurisdictions, and already enacted in
some states, that seeks to limit or prohibit unsolicited telemarketing, sales or
other calls, to redress the perceived invasion of privacy represented by these
calls. In addition, the Company believes its business will be favorably impacted
by the perceived movement toward conducting market research using interactive
methods, as NFO has established an interactive division for the purpose of
developing an interactive methodology for performing market research. The
Company has developed a consumer panel of on-line households (NFO//net.source)
that numbers approximately 70,000 households and over 175,000 individuals.
The Company's goal is to develop into a broader more far reaching
marketing information services business centered around the NFO Panel. The
Company intends to use its NFO Panel and expertise in custom panel research to
expand existing client relationships and to target new clients particularly in
the pharmaceutical and financial services industries in which the Company
perceives a growing need for custom panel research. The Company also intends to
develop new services or research concepts, including in the area of interactive
technology, that would distinguish it from other market research companies while
furthering its development as a marketing information services company. In
addition, the Company will seek strategic acquisitions and alliances both in the
United States and in international markets in which the Company perceives an
increasing demand for custom market research. To improve further the timing of
research studies and the accessibility of its research results and to lower its
operating costs, the Company intends to continue its investment in new
technologies and information systems.
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RISK FACTORS
PROSPECTIVE PURCHASERS SHOULD CAREFULLY CONSIDER THE RISK FACTORS SET
FORTH BELOW, AS WELL AS OTHER INFORMATION SET FORTH IN THIS PROSPECTUS, PRIOR TO
MAKING ANY INVESTMENT IN THE COMMON STOCK.
RELIANCE ON KEY CLIENTS
The Company's ten largest clients in 1996 generated approximately 31% of
the Company's consolidated revenues. The Company's success is dependent upon its
ability to maintain its existing clients and obtain new clients. No assurances
can be given that the Company will maintain its existing client base or that it
will be able to attract new clients. The loss of one or more of the Company's
large clients or a significant reduction in business from such clients could
have a material adverse effect on the Company. The Company does not have
long-term contracts with its clients.
FLUCTUATIONS IN DEMAND FOR MARKET RESEARCH
Demand for the Company's panel research services can be affected by a
number of factors outside the Company's control. For example, a client's market
research activities are dependent on the timing of its new product introductions
and reformulations. Marketing budgets, industry and economic conditions and
changes in management or ownership of a client are also factors that can affect
the client's demand for the Company's panel research services. As a result of
such factors, the amount of market research conducted by the Company for each of
its clients is likely to vary from year to year, and these variations can
contribute to fluctuations in the Company's operating results from period to
period.
RELIANCE ON KEY PERSONNEL
The Company is heavily dependent on the efforts of certain of its officers
and other management personnel, principally William E. Lipner, Richard A.
Spitzer, Patrick G. Healy, Lawrence D. White and Charles B. Hamlin. The loss of
the services of one or more of these individuals could have a material adverse
effect on the Company. The Company maintains key man life insurance on all five
individuals.
COMPETITION
The custom market research industry is highly competitive and is
characterized by a large number of competitors, ranging from relatively small
organizations to companies with substantial resources. The Company is also
subject to competition from marketing and research departments of various
companies, advertising agencies and business consulting firms. The Company
believes that it competes principally on the basis of the quality of the design
of a market research project; the ability to perform, analyze and report on a
research project in a short period of time; price and consistency of service.
USE OF PROCEEDS
The Company intends to use the net proceeds from the sale of the Common
Stock offered hereby for general corporate purposes.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 65,000,000 shares,
consisting of 60,000,000 shares of Common Stock, par value $.01 per share, and
5,000,000 shares of Preferred Stock, par value $.01 per share. The holders of
shares of Common Stock are entitled to one vote for each share held and each
share of Common Stock is entitled to participate equally in dividends out of
funds legally available therefore, as and when declared by the Board of
Directors, and in the distribution of assets in the event of liquidation. The
shares of Common Stock have no preemptive or conversion rights, redemption
provisions or sinking fund
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<PAGE>
provisions. The outstanding shares of Common Stock are, and the shares offered
hereby will be, duly and validly issued, fully paid and nonassessable.
DESCRIPTION OF THE PLAN AND THE STOCK OPTIONS
THE PLAN
A copy of the Plan is filed as an exhibit to the Registration Statement of
which this Prospectus forms a part. The following summary of certain provisions
of the Plan does not purport to be complete and is subject to, and qualified in
its entirety by reference to, all of the provisions of the Plan, including the
definitions therein of certain terms.
The Plan was adopted by the Board of Directors of the Company on February
23, 1993 and was approved by the stockholders of the Company on March 15, 1993.
The Plan provides for the grant of "nonqualified" options to purchase shares of
Common Stock, that is, options that do not satisfy the requirements of Section
422 of the Internal Revenue Code of 1986, as amended (the "Code"). On April 5,
1994, the Board of Directors of the Company declared a three-for-two stock
split, available to the holders of record of shares of Common Stock at the close
of business on March 15, 1994 and thus approved an increase, to 450,000, in the
number of shares authorized to be distributed under the Plan. On May 18, 1994,
the stockholders of the Company approved an increase, to 750,000, in the number
of shares authorized to be distributed under the Plan. On February 5, 1996, the
Board of Directors of the Company declared another three-for-two stock split,
available to the holders of record of shares of Common Stock at the close of
business on January 22, 1996 and thus approved an increase, to 1,125,000, in the
number of shares authorized to be distributed under the Plan. On May 9, 1996,
stockholders of the Company approved an increase to 1,875,000, in the number of
shares authorized to be distributed under the Plan. As of March 31, 1997,
568,245 shares were available for distribution under the Plan (net of shares
reserved for issuance upon the exercise of outstanding Stock Options), and
unexercised Stock Options to purchase 1,127,955 shares of Common Stock were
outstanding under the Plan.
Stock Options are granted under the Plan for the purpose of attracting and
motivating key employees of the Company. The Plan may be administered by the
Compensation Committee of the Board of Directors of the Company or another
committee consisting of two or more directors appointed by the Board (the
"Committee"). The Plan is currently administered by the Stock Option Committee.
The Committee members are appointed by and serve at the pleasure of the Board of
Directors of the Company. The individuals eligible to participate in the Plan
are the key employees of the Company or its subsidiaries, as determined and
designated by the Committee from time to time ("Participants"). The Committee
determines which individuals will be granted Stock Options, the number of shares
to be subject to Stock Options, and, subject to the terms of the Plan, other
terms and conditions applicable to the grants. During any calendar year, no
Participant shall be granted Stock Options to purchase more than 150,000 shares
of Common Stock (subject to adjustment as provided in the Plan). As of March 31,
1997, 90 individuals hold Stock Options granted under the Plan.
The exercise price of Stock Options granted under the Plan may not be less
than the fair market value (as defined in the Plan) of the Common Stock on the
date of grant. The Plan provides that, at the time of a grant of a Stock Option,
the Committee may require a Participant to enter into an agreement with the
Company in a form specified by the Committee agreeing to the terms and
conditions of the Plan and to such additional terms and conditions as the
Committee may in its sole discretion prescribe, provided that such terms and
conditions are not inconsistent with the Plan. Stock Options that have been
granted under the Plan generally become cumulatively exercisable with respect to
one-third of the shares subject thereto on the first three anniversaries of the
January 1st next following the date of grant. The expiration date of a Stock
Option is determined by the Committee at the time of the grant, and shall be no
later than the tenth anniversary date of the date on which such Stock Options is
granted. If an option holder dies, the person to whom his Stock Options pass by
will or by the laws of descent and distribution has three months to exercise
such Participant's Stock Options that were exercisable immediately before his
death. If he ceases to be an employee for any
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<PAGE>
other reason other than death, his Stock Options may not be exercised after his
termination of employment unless the Committee permits exercise, but in any case
no later than the Stock Option's expiration date.
Under the Plan, an option holder may exercise a Stock Option by giving
written notice thereof to the Company prior to the Stock Option's expiration
date. Upon delivery of such notice, the full exercise price, plus applicable
state or federal withholding taxes, shall be paid either in cash, by tender of
stock certificates for shares of Common Stock held by the option holder for at
least six months, by any combination of the foregoing or with any other form of
consideration permitted by the Committee (which may include a cashless exercise
program).
A Participant may make a written election to have shares of Common Stock
withheld by the Company from the shares otherwise to be received to satisfy
applicable tax withholding requirements, subject to guidelines established by
the Committee.
In the event of any change in the outstanding shares of Common Stock by
reason of any stock dividend, stock split, recapitalization, merger,
consolidation, combination, exchange of shares or other similar corporate
change, an appropriate and proportionate adjustment shall be made in (i) the
number of shares of Common Stock subject to Stock Options outstanding or to be
granted under the Plan and (ii) the annual limitation on the number of Stock
Options that may be granted to any Participant. Any such adjustment in any
outstanding Stock Option shall be made without change in the aggregate purchase
price applicable to the unexercised portion of such Stock Option but with a
corresponding adjustment in the price for each share of Common Stock covered by
such Stock Option as well as the adjustment in the number and kind of shares of
Common Stock issuable on exercise. The Committee's determinations as to what
adjustments shall be made and the extent thereof, shall be final, binding and
conclusive.
Subject to any approval of the stockholders of the Company which may be
required by law, the Board of Directors may at any time amend, suspend or
terminate the Plan. No amendment, suspension or termination of the Plan shall
alter or impair any rights under any Stock Option previously granted without the
consent of the holder thereof.
The Plan provides that Stock Options are generally not transferrable by a
Participant except by will or the laws of descent and distribution and are
exercisable during the Participant's lifetime only by the Participant.
Notwithstanding the foregoing, the Committee may grant Stock Options that may be
transferred (or amend outstanding Stock Options to permit transfer) by the
Participant to a Stock Option Transferee (as defined on the cover of this
Prospectus) without consideration.
This Prospectus relates to up to 1,875,000 shares of Common Stock of the
Company which may be offered and sold to Stock Option Transferees pursuant to
Stock Options that may be transferred to Stock Option Transferees. This
Prospectus also relates to the offer and sale of Common Stock pursuant to such
Stock Options by the executors, administrators or beneficiaries of the estates
of Stock Option Transferees, or other persons duly authorized by law to
administer the estate or assets of such Stock Option Transferees. As used
herein, "Participant Transferor" refers to the Participant who transferred Stock
Options held by a particular Stock Option Transferee.
Generally, upon transfer to a Stock Option Transferee, a Stock Option
continues to be governed by and subject to the terms and limitations of the Plan
and the relevant grant, and the Stock Option Transferee is entitled to the same
rights, and is subject to the same restrictions and obligations, as the
Participant Transferor thereunder, as if no transfer had taken place.
Accordingly, the rights of the Stock Option Transferee are subject to the terms
and limitations of the original grant to the Participant Transferor, including
provisions relating to Stock Option expiration date, exercisability, exercise
price, termination and forfeiture. For information regarding the terms of a
particular Stock Option grant, Stock Option Transferees may contact NFO
Research, Inc., 2 Pickwick Plaza, Suite 400, Greenwich, Connecticut 06830
(telephone no: (203) 629- 8888).
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Once a Stock Option has been transferred to a Stock Option Transferee, it
may not be subsequently transferred by the Stock Option Transferee except by
will or the laws of descent and distribution. A Stock Option Transferee that is
an immediate family member (as defined below) may, if permitted in the original
stock option agreement, designate in writing to the Company before his or her
death one or more beneficiaries to receive, in the event of his or her death,
any rights to which such Stock Option Transferee would be entitled under the
Plan. A beneficiary designation may be changed or revoked in writing by a Stock
Option Transferee at any time. An immediate family member of a Participant
includes the Participant's spouse, children or grandchildren (including adopted
and stepchildren and grandchildren). Changes in beneficiary designation should
be mailed (return receipt requested) to the attention of the Secretary, NFO
Research, Inc., 2 Pickwick Plaza, Suite 400, Greenwich, Connecticut 06830.
THE STOCK OPTIONS
GENERAL
As stated above, the Plan provides for the grant of nonqualified Stock
Options to purchase shares of Common Stock. At the time of grant, the Committee
establishes the exercise price (which may not be less than the fair market value
(as defined in the Plan) of the underlying Common Stock on the date of grant),
the expiration date (which may not be more than 10 years from the date of
grant), and the times and installments in which the Stock Options may be
exercised.
As of the date of this Prospectus, most Stock Options granted under the
Plan have had expiration dates ten years from the date of grant and an exercise
price equal to the fair market value of the Common Stock on the date of grant.
Such grants generally have provided that the Stock Options become cumulatively
exercisable with respect to one-third of the shares subject thereto on each of
the first three anniversaries of the 1st of January after the date of grant.
If any change shall occur in or affect shares of Common Stock or Stock
Options on account of a merger, reorganization, stock dividend, stock split or
similar changes, the Committee shall make adjustments in, among other things,
(i) the maximum number of shares of Common Stock available for distribution
under the Plan; (ii) the number of shares reserved for outstanding Stock Option
grants; and (iii) any other terms or provisions of outstanding grants (other
than aggregate purchase price), in order to preserve the full benefits of such
grants.
EXERCISE OF STOCK OPTIONS BY STOCK OPTION TRANSFEREES
A Stock Option may be exercised by a Stock Option Transferee at any time
from the time first set by the Committee in the original grant to the
Participant Transferor until the close of business on the date on which the
Stock Option expires or terminates pursuant to its terms. Stock Options
generally become cumulatively exercisable with respect to one-third of the
shares subject thereto on each of the first three anniversaries of the January 1
next following the date of grant.
The full exercise price, plus applicable state or federal withholding
taxes, of the shares as to which Stock Options are exercised generally shall be
paid to the Company at the time of exercise either in cash, by tender of stock
certificates for shares of Common Stock held for at least 6 months, or by any
combination of the foregoing.
Upon exercise of a Stock Option by a Stock Option Transferee, any federal,
state or local withholding taxes arising from the exercise generally are the
legal obligation of the Participant Transferor.
A Stock Option will be deemed exercised on the date the Company's chief
executive officer has received written notice thereof (by mail or facsimile
transmission), completed in all respects and signed by the Stock Option
Transferee (accompanied by full payment of the exercise price and any required
withholding).
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Once the exercise is completed as described above, stock certificates for
the appropriate number of shares of Common Stock will be delivered to the Stock
Option Transferee or his or her estate or beneficiaries or otherwise delivered
in such manner as the person(s) entitled thereto may direct.
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EFFECT OF TERMINATION OF EMPLOYMENT
Because Stock Options transferred to Stock Option Transferees continue to
be governed by the terms of the Plan and the original grant, their
exercisability continues to be affected by the Participant Transferor's
employment status.
If a Participant Transferor terminates employment with the Company for any
reason other than death, all outstanding unexercised Stock Options granted to
such Participant Transferor, including those held by a Stock Option Transferee
that were exercisable immediately prior to the Participant's death, expire on
the date of termination of employment, unless the Committee determines that an
extended exercise period is warranted.
If a Participant Transferor dies, all unexercised and unexpired Stock
Options granted to such Participant Transferor that were exercisable immediately
prior to the Participant's death, including exercisable options held by a Stock
Option Transferee, shall be exercisable for a period of three months following
such death, but in no event after the expiration dates of such Stock Options
(and except as just described, the remaining portion of any unexpired tock
options shall terminate immediately).
FEDERAL INCOME TAX CONSEQUENCES OF STOCK OPTION PLAN
The following summary generally describes the principal federal (but not
state or local) income tax consequences of Stock Options granted under the Plan.
It is general in nature and is not intended to cover all tax consequences that
may apply to a particular option holder or the Company. The provisions of the
Internal Revenue Code of 1986, as amended (the "Code") and the regulations
thereunder relating to these matters are complicated and their impact in any one
case may depend upon the particular circumstances. In particular, the rules
relating to the various tax consequences associated with the transfer of Stock
Options and the exercise of transferred Stock Options have not been definitively
established and the described tax treatment is not free from doubt in all cases.
This discussion is based on the Code as currently in effect. The discussion
below assumes that any transfer of a Stock Option during a Participant's
lifetime is made while the Stock Option is exercisable, by way of gift and for
no consideration. The tax consequences of the transfer of an unexercisable Stock
Option are unclear.
Each option holder should consult his or her own accountant, legal counsel
or other financial advisor regarding the tax consequences of participation in
the Plan.
The Plan is not intended to be qualified under Section 401(a) of the Code.
Stock Options awarded under the Plan will be nonqualified stock options governed
by the rules of Code section 83 and will not qualify for special tax treatment
under Code section 422. Generally, no income will be recognized at the time the
Stock Option is granted or transferred to a Stock Option Transferee and the
Company shall not be entitled to a deduction at either time. On exercise of a
Stock Option by a Participant, however, the amount by which the fair market
value of the shares of the Common Stock on the date of exercise exceeds the
purchase price of such shares generally will be taxable to the Participant as
ordinary income and will be deductible for tax purposes by the Company or its
affiliates in the year in which the Participant recognizes such ordinary income.
If the Stock Option has been transferred and the Stock Option is exercised while
the Participant is alive, such ordinary income at exercise is generally
recognized by the Participant. If the Participant dies before the Stock Option
is exercised by the transferee, such ordinary income at exercise may have to be
recognized by the Participant's estate (rather than the transferee), although
the rules applicable in such a case have not been definitively established.
The disposition of shares acquired upon exercise of a Stock Option
generally will result in long-term or short-term capital gain or loss (depending
on the applicable holding period) in an amount equal to the difference between
the amount realized on such disposition and the sum of the purchase price and
the amount of ordinary income recognized in connection with the exercise of the
Stock Option. Thus, it appears that a Stock Option Transferee includes in tax
basis the ordinary income recognized by the Participant at exercise. If the
option exercise price is paid by the Participant's delivery of shares of Common
Stock previously owned by the Participant, such exercise generally will not be
considered a taxable disposition of the previously-owned shares and, thus, no
gain or loss will be recognized with respect to such previously-owned shares
upon such exercise. The amount of any built-in gain on such previously-owned
shares generally will not be recognized until the new shares acquired on the
option exercise are disposed of in a sale or other taxable transaction. If the
exercise
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price is paid by a transferee with previously-owned shares of Common Stock, the
transferee should consult with tax counsel concerning the tax consequences of
such a transaction.
If, in any year after 1993, an affected Participant's total taxable
compensation from the Company (including compensation related to Stock Options)
exceeds $1 million, such compensation in excess of $1 million may not be tax
deductible by the Company under Code section 162(m). Affected Participants are
generally the Company's chief executive officer and the Company's four most
highly compensated employees (other than the chief executive officer) during the
Company's taxable year. Excluded from that calculation of total compensation for
this purpose is compensation that is "performance-based" within the meaning of
Code section 162(m). It is expected that compensation realized upon the exercise
of a Stock Option will be regarded as "performance-based" and, therefore, that
such compensation will be deductible without regard to the limits of Code
section 162(m).
Pursuant to the currently applicable rules under section 16(b) of the
Exchange Act, the grant of an option (and not its exercise) to a person who is
subject to the reporting and short-swing profit provisions under section 16 of
the Exchange Act ("a Section 16 Person") begins the six-month period of
potential short-swing liability. The taxable event for the exercise of an option
that has been outstanding at least six months ordinarily will be the date of
exercise. If an option is exercised by a Section 16 Person within six months
after the date of grant, however, taxation ordinarily will be deferred until the
date which is six months after the date of grant, unless the person has filed a
timely election pursuant to Code section 83(b) to be taxed on the date of
exercise. Pursuant to a recent amendment to the rules under section 16(b) of the
Exchange Act, the six month period of potential short-swing liability may be
eliminated if the option grant (i) is approved in advance by the Company's Board
(or a committee composed solely of two or more non-employee directors) or (ii)
approved in advance, or subsequently ratified, by the Company's shareholders no
later than the next annual meeting of shareholders. Consequently, the taxable
event for the exercise of an option that satisfies either of the conditions
described in clauses (i) or (ii) above will be the date of exercise.
If any payments under the Plan are "contingent on a change of control"
within the meaning of Code section 280G (which could include, for example and
without limitation, the accelerated vesting of stock options upon a change of
control), then the Company may be denied an income tax deduction for all or a
portion of such payments, and the recipient thereof may be subject to a 20%
exercise tax in addition to income tax otherwise imposed. It is not clear if the
excise tax provisions of Code section 280G would apply to a transferee of a
Stock Option.
Each Section 16 Person granted an award under the Plan should consult with
counsel regarding the consequences under section 16(b) of the Exchange Act of
participation in the Plan.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for
the Company by Paul, Weiss, Rifkind, Wharton & Garrison, New York, New York. In
addition, Paul, Weiss, Rifkind, Wharton & Garrison has advised the Company
concerning certain Federal income tax consequences relating to Stock Options
under the Plan and the transfer and exercise thereof.
EXPERTS
The consolidated financial statements and financial statement schedule, as
of December 31, 1996 and for each of the three years in the period ended
December 31, 1996, included in the Company's Annual Report on Form 10-K for the
year ended December 31, 1996, incorporated by reference in this Prospectus, to
the extent and for the periods indicated in their reports, have been audited by
Arthur Andersen L.L.P. and Deloitte & Touche LLP, independent public
accountants, and are included herein in reliance upon the authority of said
firms as experts in accounting and auditing in giving said reports.
9
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange
Act and in accordance therewith files reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information filed by the Company can be
inspected and copied at the public reference facilities maintained by the
Commission at its office at Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549, and at the Commission's regional offices located at 7 World Trade Center,
Suite 1300, New York, New York 10048 and Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of this material can
also be obtained from the Commission's web site at "http://www.sec.gov" and at
prescribed rates from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549. The Company's Common Stock is quoted
on the Nasdaq National Market. Reports, proxy statements and other information
concerning the Company can be inspected at the National Association of
Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act with respect to the shares of Common Stock offered
hereby. This Prospectus does not contain all the information set forth in the
Registration Statement and the exhibits and schedules thereto. For further
information with respect to the Company and the shares of Common Stock offered
hereby, reference is made to the Registration Statement, exhibits and schedules.
10
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
A copy of the Plan is attached as Appendix A, which Appendix constitutes
part of this Prospectus and is incorporated herein by reference.
The following documents heretofore filed by the Company with the
Commission pursuant to the Exchange Act are incorporated by reference in this
Prospectus:
(1) Annual Report on Form 10-K for the fiscal year ended December 31,
1996;
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the Common Stock hereunder shall be deemed
to be incorporated by reference herein and to be a part hereof from the date of
the filing of such reports and documents. The Company will provide a copy of any
or all of such documents (exclusive of exhibits unless such exhibits are
specifically incorporated by reference therein), without charge, to each person
to whom this Prospectus is delivered, including any beneficial owner, upon
written or oral request to: NFO Research, Inc., 2 Pickwick Plaza, Suite 400,
Greenwich, Connecticut 06830, Attention:
Secretary (telephone (203) 629-8888).
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for the purposes of this Prospectus to the extent that a statement contained
herein or in any other subsequently filed document which also is or is deemed to
be incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
11
<PAGE>
APPENDIX A
----------
NFO RESEARCH, INC. STOCK OPTION PLAN
------------------------------------
1. Purpose. The NFO Research, Inc. Stock Option Plan (the "Plan") has been
-------
established by NFO Research, Inc., a Delaware corporation (the "Company"), to
secure for the Company and its stockholders the benefits arising from capital
ownership by those key employees of the Company and its Subsidiaries (as defined
below) who will be responsible for its future growth and continued success. The
Plan will provide a means whereby such individuals may purchase shares of the
Common Stock of the Company pursuant to options that are not intended to qualify
as incentive stock options under section 422 of the Internal Revenue Code of
1986, as amended (the "Code"). The term "Subsidiary" means each corporation of
which the Company owns directly or indirectly at least 50% of the total combined
voting power of all classes of stock entitled to vote.
2. Administration. The authority to manage and control the operation and
--------------
administration of the Plan shall be vested in a Committee (the "Committee")
consisting of 2 or more members of the Board of Directors of the Company, who
shall be appointed by, and may be removed by, such Board. In the absence of any
such appointment or removal, the Committee shall consist of the Compensation
Committee of the Board of Directors. Any interpretation of the Plan by the
Committee and any decision made by the Committee on any other matter within its
discretion is final and binding on all persons. No member of the Committee shall
be liable for any action or determination made with respect to the Plan.
3. Participation. Subject to the terms and provisions of the Plan, the
-------------
Committee shall determine and designate, from time to time, the key employees of
the Company and its Subsidiaries to whom options are to be granted (the
"Participants") and the number of shares to be optioned to each Participant.
4. Shares Subject to the Plan. The shares of stock that may be subject to
--------------------------
options under the Plan shall be shares of the Common Stock of the Company
("Shares"). Subject to the provisions of paragraph 12, the aggregate number of
Shares for which options may be granted under the Plan shall not exceed
1,875,000 Shares. If, as to any number of Shares, any option granted pursuant to
the Plan shall expire or terminate for any reason, such number of Shares shall
again be available for grant under the Plan.
5. Option Price. The price at which a Share may be purchased pursuant to
------------
the exercise of an option under the Plan shall be fixed by the Committee on the
date the option is granted; provided, however, that the purchase price of a
Share subject to an option shall not be less than the Fair Market Value (as
defined below) of a Share on that date. Subject to the provisions of paragraph
12, for all purposes of the Plan the "Fair Market Value" of a Share as at any
date means the fair value of such Share determined in accordance with procedures
established by the Committee.
6. Option Expiration Date. The "Expiration Date" with respect to an option
----------------------
or any portion thereof granted to a Participant under the Plan means the date
established by the Committee at the time of the grant, but in no event later
than the date which is ten years after the date on which the option is granted,
and shall be subject to earlier termination as provided therein. All rights to
purchase Shares pursuant to an option shall cease as of the option's Expiration
Date. If the employment of a Participant who is an employee of the Company or of
any of its Subsidiaries terminates for any reason, his option may not be
exercised after the date of such cessation of employment, except to the extent
the Committee permits exercise after such date, but in any case no later than
the Expiration Date.
7. Exercise of Options. Each option shall be exercisable at such time or
-------------------
times as shall be determined by the Committee at the time the option is granted
or at such earlier times as the Committee shall
12
<PAGE>
subsequently determine. A Participant may exercise an option by giving written
notice thereof prior to the option's Expiration Date to the Chief Executive
Officer of the Company at the Company's corporate headquarters.
Contemporaneously with the delivery of such notice, the full purchase price of
the Shares purchased pursuant to the exercise of a stock option, together with
any required state or federal withholding taxes, shall be paid in cash, by
tender of stock certificates in proper form for transfer to the Company
representing Shares valued at the Fair Market Value of the stock on the
preceding day, by any combination of the foregoing, or with any other
consideration (including payment with a cashless exercise program under which,
if so instructed by the Participant, Shares may be issued directly to the
Participant's broker or dealer upon receipt of the option price in cash from the
broker or dealer), provided that upon the exercise of an option requiring tax
withholding, a Participant may make a written election to have Shares withheld
by the Company from the Shares otherwise to be received. The number of Shares so
withheld shall have an aggregate Fair Market Value sufficient to satisfy the
applicable withholding taxes. The acceptance of any such election by a
Participant shall be subject to guidelines established by the Committee.
8. Compliance with Applicable Laws. Notwithstanding any other provision in
-------------------------------
the Plan, the Company shall have no liability to issue any shares under the Plan
unless such issuance would comply with all applicable laws and applicable
requirements of any securities exchange or similar entity. Prior to the issuance
of any Shares under the Plan, the Company may require a written statement that
the recipient is acquiring the Shares for investment and not for the intention
of distributing the Shares.
9. Death of Participant. In the event of the death of a Participant, any
--------------------
options which the Participant was entitled to exercise on the date immediately
preceding his death shall be exercisable by the person or persons to whom that
right passes by will or by the laws of descent and distribution for a period of
three months after the date of death. Any such exercise shall be by written
notice thereof filed with the Chief Executive Officer of the Company at the
Company's corporate headquarters prior to the option's Expiration Date.
10. Transferability. Options under the Plan are not transferable except by
----------------
will or by the laws of descent and distribution or, to the extent not
inconsistent with the applicable provisions of the Code, pursuant to a qualified
domestic relations order (as that term is defined in the Code). Options may be
exercised during the lifetime of the Participant only by the Participant, and
after the death of the Participant, only as provided in paragraph 9.
Notwithstanding the foregoing, the Committee may in the applicable award
agreement evidencing an option granted under the Plan or at any time thereafter
provide that options granted hereunder may be transferred without consideration
by the Participant, subject to such rules as the Committee may adopt to preserve
the purposes of the Plan, to one or more of:
(i) the Participant's spouse, children or grandchildren (including
adopted and stepchildren and grandchildren) (collectively, the
"Immediate Family");
(ii) a trust solely for the benefit of the Participant and/or his
or her Immediate Family; or
(iii) a partnership or limited liability company the partners or
shareholders of which are limited to the Participant and his
or her Immediate Family members;
(each transferee described in clauses (i), (ii) and (iii) above is
hereinafter referred to as a "Permitted Transferee"); provided that the
Participant gives the Committee advance written notice describing the
terms and conditions of the proposed transfer and the Committee notifies
the Participant in writing that such a transfer would comply with the
requirements of the Plan and any applicable award agreement evidencing the
option.
The terms of any option transferred in accordance with the immediately
preceding sentence shall apply to the Permitted Transferee, except that (a)
Permitted Transferees shall not be entitled to transfer any options, other than
by will or the laws of descent and distribution; and (b) Permitted Transferees
shall not be entitled to exercise any transferred options unless there shall be
in effect a registration statement on an appropriate
13
<PAGE>
form covering the shares to be acquired pursuant to the exercise of such option
if the Committee determines that such a registration statement is necessary or
appropriate.
11. Employment and Stockholder Status. The Plan does not constitute a
----------------------------------
contract of employment, and selection as a Participant will not give any
employee the right to be retained in the employ of the Company or any
Subsidiary. The grant of an option under the Plan shall not confer upon the
holder thereof any right as a stockholder of the Company. No person entitled to
exercise any option granted under the Plan shall have any of the rights or
privileges of a stockholder of record with respect to any Shares issuable upon
exercise of such option until certificates representing such Shares have been
issued and delivered. If the redistribution of Shares is restricted pursuant to
paragraph 8, certificates representing such Shares may bear a legend referring
to such restrictions.
12. Adjustments to Number of Shares Subject to the Plan and to Option
-----------------------------------------------------------------
Terms. Subject to the following provisions of this paragraph 12, in the event of
- -----
any change in the outstanding Shares by reason of any stock dividend, stock
split, recapitalization, merger, consolidation, combination, exchange of shares
or other similar corporate change, an appropriate and proportionate adjustment
shall be made (i) in the number and kind of Shares subject to options
outstanding or to be granted under the Plan, and (ii) in the annual limitation
on options granted per Participant pursuant to paragraph 13. Any adjustment in
any outstanding option shall be made without change in the aggregate purchase
price applicable to the unexercised portion of such option but with a
corresponding adjustment in the price for each Share covered by such option as
well as the adjustment in the number and kind of Shares mentioned above.
Adjustments under this paragraph 12 shall be made by the Committee, whose
determination as to what adjustments shall be made, and the extent thereof,
shall be final, binding and conclusive. In no event shall the purchase price for
a Share be adjusted below the par value of such Share, nor shall any fraction of
a Share be issued upon the exercise of an option.
13. Annual Limitation on Options Granted Per Participant. During any
----------------------------------------------------
calendar year, no Participant shall be granted an option or options to purchase
more than 150,000 Shares, subject to the adjustment provisions of paragraph 12.
14. Agreement with Company. At the time of a grant of an option, the
----------------------
Committee may require a Participant to enter into an agreement with the Company
in a form specified by the Committee agreeing to the terms and conditions of the
Plan and to such additional terms and conditions, not inconsistent with the
Plan, as the Committee may, in its sole discretion, prescribe.
15. Term of Plan. Subject to the approval of the stockholders of the
------------
Company, the Plan shall be effective February 23, 1993. No options may be
granted under the Plan after February 1, 2003.
16. Amendment and Termination of Plan. Subject to any approval of the
---------------------------------
stockholders of the Company which may be required by law, the Board of Directors
of the Company may at any time amend, suspend or terminate the Plan. No
amendment, suspension or termination of the Plan shall alter or impair any
option previously granted under the Plan without the consent of the holder
thereof.
AS AMENDED THROUGH APRIL 1, 1997
14
<PAGE>
================================================================================
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, and, if given or
made, such information or representations must not be relied upon as having been
authorized. This Prospectus does not constitute an offer to sell or the
solicitation of an offer to buy any securities other than the securities to
which it relates or an offer to sell or the solicitation of an offer to buy such
securities in any circumstance in which such offer or solicitation is unlawful.
Neither the delivery of this Prospectus nor any sale made hereunder shall, under
any circumstances, create any implication that there has been no change in the
affairs of the Company since the date hereof or that the information contained
herein is correct at any time subsequent to its date.
---------------
TABLE OF CONTENTS
Page
----
The Company ........................................................... 2
Risk Factors .......................................................... 3
Use of Proceeds ....................................................... 3
Description of Capital Stock .......................................... 3
Description of the Plan and
the Stock Options ................................................... 4
Legal Matters ......................................................... 8
Experts ............................................................... 8
Available Information ................................................. 8
Documents Incorporated by Reference ................................... 10
================================================================================
1,875,000 SHARES
NFO RESEARCH, INC.
Common Stock
(par value $.01 per share)
================================================================================
<PAGE>
PART II
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses in connection with the
offering described in this Registration Statement. The Company has agreed to pay
all of the costs and expenses of this offering.
SEC Registration Fee....................................... $ 9,730
Legal Fees and Expenses.................................... 10,000*
Accounting Fees and Expenses............................... 6,000*
Miscellaneous.............................................. 1,000
---------
Total ................................................. $26,730*
========
-------------------
*Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Reference is made to Article 9 of the Certificate of Incorporation of
the Company, Article VI of the By-Laws of the Company and Section 145 of the
Delaware General Corporation Law which, among other things, and subject to
certain conditions, authorize the Company to indemnify its directors and
officers against certain liabilities and expenses incurred by such persons in
connection with the claims made by reason of their being such a director or
officer.
ITEM 16. EXHIBITS.
A list of the exhibits included as part of this Registration Statement
is set forth in the Exhibit Index which immediately precedes such exhibits and
is hereby incorporated by reference herein.
4.1 Restated Certificate of Incorporation of the Company (incorporated by
reference to Exhibit 3 of the Company's Report on Form 10-Q for the
quarterly period ended June 30, 1995)
4.2 Amended and Restated By-laws of the Company (incorporated by reference
to Exhibit 4.2 of the Company's Registration Statement on Form S-8 (File
No. 33-73516)
4.3 Specimen Common Stock Certificate (incorporated by reference to Exhibit
4.1 of the Company's Registration Statement on Forms S-1 (File No.
33-58748)
5.1 Opinion of Paul, Weiss, Rifkind, Wharton & Garrison re: legality
8.1 Opinion of Paul, Weiss, Rifkind, Wharton & Garrison re: tax matters
23.1 Consent of Paul, Weiss, Rifkind, Wharton & Garrison (contained in
Exhibits 5.1 and 8.1).
23.2 Consent of Arthur Andersen L.L.P.
23.3 Consent of Deloitte & Touche LLP
99 NFO Research, Inc. Stock Option Plan, as amended through April 1, 1997
II-1
<PAGE>
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(a)(1)To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3 and the information required to be
included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE offering
thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(b) That, for purposes of determining any liability under the Securities Act,
each filing of the registrant's annual report pursuant to Section 13(a) or 15(d)
of the Exchange Act that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial BONA FIDE offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Greenwich and State of Connecticut on the 1st day of
April, 1997.
NFO RESEARCH, INC.
By: /s/ Patrick G. Healy
------------------------------------------
Name: Patrick G. Healy
Title: Executive Vice President - Finance
and Chief Financial Officer
POWER OF ATTORNEY
We, the undersigned officers and directors of NFO Research, Inc.,
hereby severally constitute William E. Lipner and Patrick G. Healy our true and
lawful attorneys with full power to sign for us and in our names in the
capacities indicated below, any and all amendments, including post-effective
amendments, to this registration statement, and generally do all such things in
our name and behalf in such capacities to enable NFO Research, Inc. to comply
with the applicable provisions of the Securities Act of 1933, as amended, and
all requirements of the Securities and Exchange Commission, and we hereby ratify
and confirm our signatures as they may be signed by our said attorneys to any
and all such amendments.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES INDICATED ON APRIL 1, 1997.
Signatures Title
---------- -----
Chairman of the Board, President, Chief
Executive Officer and Director (principal
/s/ William E. Lipner executive officer)
- --------------------------------
William E. Lipner
/s/ Steven J. Gilbert Vice Chairman of the Board, Secretary
- -------------------------------- and Director
Steven J. Gilbert
/s/ Walter A. Forbes Director
- --------------------------------
Walter A. Forbes
II-3
<PAGE>
Signatures Title
---------- -----
/s/ Edmund A. Hajim
- --------------------------------
Edmund A. Hajim Director
/s/ John Sculley Director
- --------------------------------
John Sculley
/s/ Patrick G. Healy Executive Vice President-Finance and
- -------------------------------- Chief Financial Officer (principal
Patrick G. Healy financial officer and principal
accounting officer)
II-4
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit Page
- ----------- ------- ----
4.1 Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3 of the Company's
Report on Form 10-Q for quarterly period ended June 30, 1995)
4.2 Amended and Restated By-laws of the Company (incorporated by
reference to Exhibit 4.2 of the Company's Registration
Statement on Form S-8 (File No. 33-73516)
4.3 Specimen Common Stock Certificate (incorporated by reference
to Exhibit 4.1 of the Company's Registration Statement on
Form S-1 (File No. 33- 58748)
5.1 Opinion of Paul, Weiss, Rifkind, Wharton & Garrison re:
legality
8.1 Opinion of Paul, Weiss, Rifkind, Wharton & Garrison re: tax
matters
23.1 Consent of Paul, Weiss, Rifkind, Wharton & Garrison
(contained in Exhibits 5.1 and 8.1).
23.2 Consent of Arthur Andersen L.L.P.
23.3 Consent of Deloitte & Touche LLP
99 NFO Research, Inc. Stock Option Plan, as amended through
April 1, 1997.
EXHIBIT 5.1
April 1, 1997
NFO Research, Inc.
2 Pickwick Plaza
Suite 400
Greenwich, Connecticut 06830-5530
NFO Research, Inc.
Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
In connection with the above-referenced Registration Statement on
Form S-3 (the "Registration Statement") filed by NFO Research, Inc., a Delaware
corporation (the "Company"), with the Securities and Exchange Commission
pursuant to the Securities Act of 1933, as amended (the "Act"), and the rules
and regulations promulgated thereunder (the "Rules"), we have been requested to
render our opinion as to the legality of the shares of Common Stock, par value
$.01 per share (the "Common Stock"), of the Company to be registered thereunder.
The Common Stock is being registered for offering and sale from time to time
pursuant to Rule 415 under the Act, and may be offered and sold to immediate
family members of certain participants in the NFO Research, Inc. Stock Option
Plan, as amended (the "Plan").
In connection with this opinion, we have examined (i) an original,
photocopy or conformed copy of the Registration Statement (including the
exhibits thereto), (ii) an original, photocopy or conformed copy of the Plan,
(iii) the Restated Certificate of Incorporation and Amended and Restated By-laws
of the Company, each as amended to date, and (iv) records of certain of the
Company's corporate proceedings relating, among other things, to the proposed
issuance and sale of the Common Stock. In addition, we have made such other
examinations of law and fact as we have considered necessary in order to form a
basis for the opinion hereinafter expressed. In our examination of documents, we
have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as photostatic, reproduced or conformed copies,
the authenticity of all such latter documents and the legal capacity of all
individuals who have executed any of the documents. As to certain matters of
fact, we have relied on representations, statements or certificates of officers
of the Company.
<PAGE>
Based on the foregoing, we are of the opinion that the Common Stock
have been duly authorized, and when issued and delivered by the Company and paid
for as contemplated by the Registration Statement, the Common Stock will be
validly issued, fully paid and non-assessable.
The foregoing opinion is limited to the federal laws of the United
States and the General Corporation Law of the State of Delaware. Our opinion is
rendered only with respect to the laws, and the rules, regulations and orders
thereunder, which are currently in effect. Please be advised that no member of
this firm is admitted to practice law in the State of Delaware.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the heading "Legal
Matters" in the Prospectus. In giving such consent, we do not thereby admit that
we are in the category of persons whose consent is required by the Act or the
Rules.
Very truly yours,
/s/ Paul, Weiss, Rifkind, Wharton & Garrison
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
EXHIBIT 8.1
April 1, 1997
NFO Research, Inc.
2 Pickwick Plaza
Suite 400
Greenwich, Connecticut 06830-5530
NFO Research, Inc.
Registration Statement on Form S-3
----------------------------------
Dear Sirs:
In connection with the above-referenced Registration Statement on
Form S-3 (the "Registration Statement") filed by NFO Research, Inc. (the
"Company") with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, as amended (the "Act"), and the rules and regulations
promulgated thereunder (the "Rules"), we have been requested to render our
opinion as to the matters hereinafter set forth.
In this regard, we have reviewed copies of the Registration
Statement (including the exhibits and amendments thereto) and the prospectus
(the "Prospectus") relating to the offering of the Company's Common Stock, par
value $.01 per share (the "Common Stock"). We have also made such other
investigations of fact and law and have examined the originals, or copies
authenticated to our satisfaction, of such documents, records, certificates or
other instruments as in our judgment are necessary or appropriate to render the
opinion expressed below.
Based on the foregoing, we are of the opinion that the section
entitled "DESCRIPTION OF THE PLAN AND THE STOCK OPTIONS -- THE STOCK OPTIONS --
Federal Income Tax Consequences of Stock Option Plan" in the Prospectus contains
an accurate general summary, under currently applicable law, of the material
United States Federal income tax consequences related to stock options under the
Plan and the transfer and exercise thereof.
<PAGE>
We are members of the Bar of the State of New York and we do not
purport to be experts in the laws of any jurisdiction other than the laws of the
State of New York and the Federal laws of the United States.
We consent to the use of this opinion as an exhibit to the
Registration Statement, and to the reference to our name under the caption
"Legal Matters" in the Prospectus included in the Registration Statement. In
giving this consent we do not thereby admit that we are in the category of
persons whose consent is required by the Act or the Rules.
Very truly yours,
/s/ Paul, Weiss, Rifkind, Wharton & Garrison
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of NFO Research, Inc. on Form S-3,
dated April 1, 1997, of our report dated February 18, 1997, except for Note 19,
as to which the date is March 20, 1997, included in NFO Research, Inc.'s annual
report on Form 10-K for the year ended December 31, 1996, and to all references
to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
New York, New York,
April 1, 1997
EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
To the Board of Directors and Stockholders
NFO Research, Inc.
Greenwich, Connecticut
We consent to the incorporation by reference in this Registration Statement of
NFO Research, Inc. on Form S-3 of our report dated February 17, 1995, appearing
in this Annual Report on Form 10-K of NFO Research, Inc. for the year ended
December 31, 1996.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Ann Arbor, Michigan
March 28, 1997
EXHIBIT 99
NFO RESEARCH, INC. STOCK OPTION PLAN
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1. Purpose. The NFO Research, Inc. Stock Option Plan (the "Plan") has been
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established by NFO Research, Inc., a Delaware corporation (the "Company"), to
secure for the Company and its stockholders the benefits arising from capital
ownership by those key employees of the Company and its Subsidiaries (as defined
below) who will be responsible for its future growth and continued success. The
Plan will provide a means whereby such individuals may purchase shares of the
Common Stock of the Company pursuant to options that are not intended to qualify
as incentive stock options under section 422 of the Internal Revenue Code of
1986, as amended (the "Code"). The term "Subsidiary" means each corporation of
which the Company owns directly or indirectly at least 50% of the total combined
voting power of all classes of stock entitled to vote.
2. Administration. The authority to manage and control the operation and
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administration of the Plan shall be vested in a Committee (the "Committee")
consisting of 2 or more members of the Board of Directors of the Company, who
shall be appointed by, and may be removed by, such Board. In the absence of any
such appointment or removal, the Committee shall consist of the Compensation
Committee of the Board of Directors. Any interpretation of the Plan by the
Committee and any decision made by the Committee on any other matter within its
discretion is final and binding on all persons. No member of the Committee shall
be liable for any action or determination made with respect to the Plan.
3. Participation. Subject to the terms and provisions of the Plan, the
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Committee shall determine and designate, from time to time, the key employees of
the Company and its Subsidiaries to whom options are to be granted (the
"Participants") and the number of shares to be optioned to each Participant.
4. Shares Subject to the Plan. The shares of stock that may be subject to
--------------------------
options under the Plan shall be shares of the Common Stock of the Company
("Shares"). Subject to the provisions of paragraph 12, the aggregate number of
Shares for which options may be granted under the Plan shall not exceed
1,875,000 Shares. If, as to any number of Shares, any option granted pursuant to
the Plan shall expire or terminate for any reason, such number of Shares shall
again be available for grant under the Plan.
5. Option Price. The price at which a Share may be purchased pursuant to
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the exercise of an option under the Plan shall be fixed by the Committee on the
date the option is granted; provided, however, that the purchase price of a
Share subject to an option shall not be less than the Fair Market Value (as
defined below) of a Share on that date. Subject to the provisions of paragraph
12, for all purposes of the Plan the "Fair Market Value" of a Share as at any
date means the fair value of such Share determined in accordance with procedures
established by the Committee.
6. Option Expiration Date. The "Expiration Date" with respect to an option
----------------------
or any portion thereof granted to a Participant under the Plan means the date
established by the Committee at the time of the grant, but in no event later
than the date which is ten years after the date on which the option is granted,
and shall be subject to earlier termination as provided therein. All rights to
purchase Shares pursuant to an option shall cease as of the option's Expiration
Date. If the employment of a Participant who is an employee of the Company or of
any of its Subsidiaries terminates for any reason, his option may not be
exercised after the date of such cessation of
<PAGE>
employment, except to the extent the Committee permits exercise after such date,
but in any case no later than the Expiration Date.
7. Exercise of Options. Each option shall be exercisable at such time or
-------------------
times as shall be determined by the Committee at the time the option is granted
or at such earlier times as the Committee shall subsequently determine. A
Participant may exercise an option by giving written notice thereof prior to the
option's Expiration Date to the Chief Executive Officer of the Company at the
Company's corporate headquarters. Contemporaneously with the delivery of such
notice, the full purchase price of the Shares purchased pursuant to the exercise
of a stock option, together with any required state or federal withholding
taxes, shall be paid in cash, by tender of stock certificates in proper form for
transfer to the Company representing Shares valued at the Fair Market Value of
the stock on the preceding day, by any combination of the foregoing, or with any
other consideration (including payment with a cashless exercise program under
which, if so instructed by the Participant, Shares may be issued directly to the
Participant's broker or dealer upon receipt of the option price in cash from the
broker or dealer), provided that upon the exercise of an option requiring tax
withholding, a Participant may make a written election to have Shares withheld
by the Company from the Shares otherwise to be received. The number of Shares so
withheld shall have an aggregate Fair Market Value sufficient to satisfy the
applicable withholding taxes. The acceptance of any such election by a
Participant shall be subject to guidelines established by the Committee.
8. Compliance with Applicable Laws. Notwithstanding any other provision in
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the Plan, the Company shall have no liability to issue any shares under the Plan
unless such issuance would comply with all applicable laws and applicable
requirements of any securities exchange or similar entity. Prior to the issuance
of any Shares under the Plan, the Company may require a written statement that
the recipient is acquiring the Shares for investment and not for the intention
of distributing the Shares.
9. Death of Participant. In the event of the death of a Participant, any
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options which the Participant was entitled to exercise on the date immediately
preceding his death shall be exercisable by the person or persons to whom that
right passes by will or by the laws of descent and distribution for a period of
three months after the date of death. Any such exercise shall be by written
notice thereof filed with the Chief Executive Officer of the Company at the
Company's corporate headquarters prior to the option's Expiration Date.
10. Transferability. Options under the Plan are not transferable except by
----------------
will or by the laws of descent and distribution or, to the extent not
inconsistent with the applicable provisions of the Code, pursuant to a qualified
domestic relations order (as that term is defined in the Code). Options may be
exercised during the lifetime of the Participant only by the Participant, and
after the death of the Participant, only as provided in paragraph 9.
Notwithstanding the foregoing, the Committee may in the applicable award
agreement evidencing an option granted under the Plan or at any time thereafter
provide that options granted hereunder may be transferred without consideration
by the Participant, subject to such rules as the Committee may adopt to preserve
the purposes of the Plan, to one or more of:
(i) the Participant's spouse, children or grandchildren (including
adopted and stepchildren and grandchildren) (collectively, the
"Immediate Family");
(ii) a trust solely for the benefit of the Participant and/or his
or her Immediate Family; or
(iii) a partnership or limited liability company the partners or
shareholders of which are limited to the Participant and his
or her Immediate Family members;
<PAGE>
(each transferee described in clauses (i), (ii) and (iii) above is
hereinafter referred to as a "Permitted Transferee"); provided that the
Participant gives the Committee advance written notice describing the
terms and conditions of the proposed transfer and the Committee notifies
the Participant in writing that such a transfer would comply with the
requirements of the Plan and any applicable award agreement evidencing the
option.
The terms of any option transferred in accordance with the immediately
preceding sentence shall apply to the Permitted Transferee, except that (a)
Permitted Transferees shall not be entitled to transfer any options, other than
by will or the laws of descent and distribution; and (b) Permitted Transferees
shall not be entitled to exercise any transferred options unless there shall be
in effect a registration statement on an appropriate form covering the shares to
be acquired pursuant to the exercise of such option if the Committee determines
that such a registration statement is necessary or appropriate.
11. Employment and Stockholder Status. The Plan does not constitute a
---------------------------------
contract of employment, and selection as a Participant will not give any
employee the right to be retained in the employ of the Company or any
Subsidiary. The grant of an option under the Plan shall not confer upon the
holder thereof any right as a stockholder of the Company. No person entitled to
exercise any option granted under the Plan shall have any of the rights or
privileges of a stockholder of record with respect to any Shares issuable upon
exercise of such option until certificates representing such Shares have been
issued and delivered. If the redistribution of Shares is restricted pursuant to
paragraph 8, certificates representing such Shares may bear a legend referring
to such restrictions.
12. Adjustments to Number of Shares Subject to the Plan and to Option
-----------------------------------------------------------------
Terms. Subject to the following provisions of this paragraph 12, in the event of
- -----
any change in the outstanding Shares by reason of any stock dividend, stock
split, recapitalization, merger, consolidation, combination, exchange of shares
or other similar corporate change, an appropriate and proportionate adjustment
shall be made (i) in the number and kind of Shares subject to options
outstanding or to be granted under the Plan, and (ii) in the annual limitation
on options granted per Participant pursuant to paragraph 13. Any adjustment in
any outstanding option shall be made without change in the aggregate purchase
price applicable to the unexercised portion of such option but with a
corresponding adjustment in the price for each Share covered by such option as
well as the adjustment in the number and kind of Shares mentioned above.
Adjustments under this paragraph 12 shall be made by the Committee, whose
determination as to what adjustments shall be made, and the extent thereof,
shall be final, binding and conclusive. In no event shall the purchase price for
a Share be adjusted below the par value of such Share, nor shall any fraction of
a Share be issued upon the exercise of an option.
13. Annual Limitation on Options Granted Per Participant. During any
----------------------------------------------------
calendar year, no Participant shall be granted an option or options to purchase
more than 150,000 Shares, subject to the adjustment provisions of paragraph 12.
14. Agreement with Company. At the time of a grant of an option, the
----------------------
Committee may require a Participant to enter into an agreement with the Company
in a form specified by the Committee agreeing to the terms and conditions of the
Plan and to such additional terms and conditions, not inconsistent with the
Plan, as the Committee may, in its sole discretion, prescribe.
15. Term of Plan. Subject to the approval of the stockholders of the
------------
Company, the Plan shall be effective February 23, 1993. No options may be
granted under the Plan after February 1, 2003.
16. Amendment and Termination of Plan. Subject to any approval of the
---------------------------------
stockholders of the Company which may be required by law, the Board of Directors
of the Company may at any time amend, suspend or terminate the Plan. No
amendment, suspension or termination of the Plan shall
<PAGE>
alter or impair any option previously granted under the Plan without the consent
of the holder thereof.
AS AMENDED THROUGH APRIL 1, 1997
