DUFF & PHELPS CREDIT RATING CO, SC 14D9, 2000-03-15

DUFF & PHELPS CREDIT RATING CO
SC 14D9, 2000-03-15
CONSUMER CREDIT REPORTING, COLLECTION AGENCIES

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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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SCHEDULE 14D-9

SOLICITATION/RECOMMENDATION STATEMENT UNDER
SECTION 14(D)(4) OF THE SECURITIES EXCHANGE ACT OF 1934

DUFF & PHELPS CREDIT RATING CO.

(Name of Subject Company)

DUFF & PHELPS CREDIT RATING CO.

(Names of Person(s) Filing Statement)

COMMON STOCK, NO PAR VALUE

(Title of Class of Securities)

26432F109

(Cusip Number of Class of Securities)

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PAUL J. MCCARTHY
CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
17 STATE STREET
12(TH) FLOOR
NEW YORK, NEW YORK 10004

(212) 908-0200

(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of the Person(s) Filing Statement)

WITH A COPY TO:

KURT W. FLORIAN, JR., ESQ.
KATTEN MUCHIN ZAVIS
525 WEST MONROE STREET
SUITE 1600
CHICAGO, ILLINOIS 60661-3693
(312) 902-5200

/ / Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.

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ITEM 1. SUBJECT COMPANY INFORMATION.

Duff & Phelps Credit Rating Co., an Illinois corporation (the "Company"), is
the subject company. The principal executive offices of the Company are located
at 55 East Monroe Street, Chicago, Illinois 60603. The telephone number of the
principal executive offices of the Company is (312) 368-3100. The title of the
class of equity securities to which this Statement relates is the common stock,
no par value (the "Common Stock"), of the Company. As of March 3, 2000, there
were 4,644,121 shares of Common Stock outstanding. References herein to the
"Shares" mean shares of the Common Stock.

ITEM 2. IDENTITY AND BACKGROUND OF FILING PERSON.

(a) The name, business address and business telephone number of the
Company, which is the person filing this Statement, are set forth in Item 1
above, and incorporated herein by reference.

(b) This Statement relates to a tender offer by FSA Acquisition Corp., a
Delaware corporation ("Purchaser"), which is an indirect wholly owned subsidiary
of Fimalac, S.A., a French SOCIETE ANONYME ("Parent"), to purchase all of the
outstanding Shares at a purchase price of $100.00 per Share, net to the seller
in cash (the "Offer Price"), upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated March 15, 2000 (the "Offer to Purchase"),
and the related Letter of Transmittal (which together with the Offer to Purchase
and any amendments or supplements thereto constitute the "Offer"). The Offer is
disclosed in the Tender Offer Statement on Schedule TO, dated March 15, 2000
(the "Schedule TO"), as filed by Parent and Purchaser with the Securities and
Exchange Commission (the "SEC"). The Schedule TO indicates that the principal
offices of Parent are located at 97, rue de Lille, 75007 Paris, France and that
the principal offices of Purchaser are located at One State Street Plaza, New
York, New York 10004.

The Offer is being made pursuant to an Agreement and Plan of Merger among
Purchaser, Parent, Fimalac, Inc., a Delaware corporation ("Parent-U.S."), and
the Company, dated as of March 6, 2000 (the "Merger Agreement"). A copy of the
Merger Agreement is filed as Exhibit (e)(3) to this Solicitation/ Recommendation
Statement on Schedule 14D-9 (this "Schedule 14D-9") filed with the SEC by the
Company and is incorporated herein by reference in its entirety. Pursuant to the
Merger Agreement, following the consummation of the Offer, upon the satisfaction
or waiver of certain conditions, and in accordance with the Illinois Business
Corporation Act of 1983, as amended (the "Illinois law"), and the Delaware
General Corporation Law (the "Delaware law"), either (1) Purchaser will be
merged with and into the Company with the Company surviving the Merger (as
hereinafter defined) or (2) the Company will be merged with and into Purchaser
(in either case, the "Merger" and, together with the Offer, the "Transaction")
with Purchaser surviving the Merger (the surviving corporation after the Merger
is sometimes referred to as the "Surviving Corporation"). In the Merger, the
holders of Shares as of the Effective Time (as defined in the Merger Agreement)
of the Merger (other than Purchaser) will receive an amount in cash equal to the
Offer Price.

ITEM 3. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.

Except as described or referred to in the Information Statement attached as
Annex A hereto or as set forth below, to the knowledge of the Company, there are
no material contracts, agreements, arrangements or understandings and no actual
or potential conflicts of interests between the Company and its affiliates and
(i) the Company, its executive officers, directors or affiliates or (ii) Parent
or Purchaser or any of their respective executive officers, directors or
affiliates.

CONFIDENTIALITY AGREEMENT. On January 25, 2000, Parent and the Company
entered into a confidentiality agreement (the "Confidentiality Agreement").
Pursuant to the Confidentiality Agreement, Parent agreed to use the Proprietary
Information (as defined in the Confidentiality Agreement) furnished to it by the
Company solely for the purpose of evaluating a possible negotiated transaction
between Parent and the

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Company and further agreed to keep such material confidential. In addition,
Parent agreed in the Confidentiality Agreement that, for a period of one year,
it would refrain from acquiring any voting securities of the Company, from
engaging in the solicitation of proxies for any voting securities of the Company
and from otherwise seeking control of the management or Board of Directors of
the Company. Parent and the Company also agreed in the Confidentiality Agreement
that, for a period of six months, they would not solicit for employment or
employ any person who was employed by the other party. The Confidentiality
Agreement, a copy of which has been filed as Exhibit (e)(1) hereto, is
incorporated herein by reference.

EXCLUSIVITY LETTER. On February 29, 2000, the Company provided Parent with
an exclusivity letter (the "Exclusivity Letter"). In the Exclusivity Letter, the
Company stated that it intended to engage in good faith negotiations with Parent
with respect to a definitive agreement relating to the Transaction and that it
was not engaged in any negotiations with respect to a possible business
combination with any other third party. Pursuant to the Exclusivity Letter, the
Company agreed that prior to March 7, 2000, the Company would not take any
further steps to solicit proposals with respect to a business combination from
another third party while negotiating the proposed transaction with Parent and
that in the event that the Company was contacted by a third party with respect
to a business combination, the Company would promptly advise Parent of any such
proposal. The Exclusivity Letter, a copy of which has been filed as
Exhibit (e)(2) hereto, is incorporated herein by reference.

MERGER AGREEMENT. Parent, Parent-U.S., Purchaser and the Company have
entered into the Merger Agreement, a copy of which has been filed as
Exhibit (e)(3) hereto and is incorporated herein by reference. The description
of the terms of the Merger Agreement contained in the Offer to Purchase under
the headings "The Merger Agreement," "Purpose of the Offer and the Merger; Plans
for the Company,"and "Certain Conditions of the Offer" is incorporated herein by
reference. Such description should be read in its entirety for a summary of the
terms and provisions of the Merger Agreement. In addition, the information set
forth below summarizes certain arrangements arising out of the Transaction
between the Company, Parent and/or the Company's executive officers and
directors. The summary of the Merger Agreement contained in the Offer to
Purchase and the summary set forth below are qualified in their entirety by
reference to the Merger Agreement.

SEVERANCE PROTECTION AGREEMENTS. The Company entered into Severance
Protection Agreements with each of the executive officers of the Company in 1994
(1999 in the case of Paul G. Taylor) providing them with severance compensation
equal to 2.9 times their annual salary and bonus in the event their employment
is terminated for specified reasons within 36 months following a change in
control of the Company or in the event the executive officer terminates his
employment for any reason during the 60-day period commencing on the first
anniversary of a change in control of the Company. The specified reasons for
termination which will result in the obligation to pay severance compensation
include (a) any termination of the executive officer's employment without Cause
(as defined in the Severance Protection Agreement); (b) a change in the
executive officer's status, title, position or responsibilities which represents
an adverse change from his status, title, position or responsibilities as in
effect at any time within 90 days preceding the date of a change in control or
at any time thereafter; the assignment to the executive officer of any duties or
responsibilities which are inconsistent with his status, title, position or
responsibilities as in effect at any time within 90 days preceding the date of a
change in control or at any time thereafter; or any removal of the executive
officer from or failure to reappoint or reelect him to any of such offices or
positions; (c) a reduction in the executive officer's base salary or any failure
to pay the executive officer any compensation or benefits to which he is
entitled within 5 days of the date due; (d) requiring the executive officer to
be based at any place outside a 30-mile radius from the city in which he is
employed; (e) the failure by the Company to (A) continue in effect any material
compensation or employee benefit plan in which the executive officer was
participating at any time within 90 days preceding the date of a change in
control or at any time thereafter or (B) provide the executive officer with
compensation and benefits, in the aggregate, at least equal to those provided
for under each other

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employee benefit plan, program and practice in which the executive officer was
participating at any time within 90 days preceding the date of a change in
control or at any time thereafter; (f) the insolvency or the filing of a
petition for bankruptcy of the Company, which petition is not dismissed within
60 days; (g) any material breach by the Company of any provision of the
Severance Protection Agreement; (h) any purported termination of the executive
officer's employment for cause which does not comply with the terms of the
Severance Protection Agreement; and (i) the failure of the Company to obtain an
agreement, satisfactory to the executive officer, from any successors and
assigns to assume and agree to perform the Severance Protection Agreement.

Under the Severance Protection Agreements, a "change in control" includes
(a) an acquisition of any voting securities of the Company by any person
immediately after which such person has beneficial ownership of 20% or more of
the combined voting power of the Company's then outstanding voting securities;
(b) the cessation for any reason of the individuals who are presently members of
the Board (the "Incumbent Board") to constitute at least two-thirds of the
Board; provided, however, that if the election, or nomination for election, of
any new director was approved by a vote of at least two-thirds of the Incumbent
Board, such new director shall be considered a member of the Incumbent Board;
and (c) approval by shareholders of the Company of (1) a merger, consolidation
or reorganization involving the Company, unless (i) the shareholders of the
Company, immediately before such merger, consolidation or reorganization, own,
directly or indirectly immediately following such merger, consolidation or
reorganization, at least 85% of the combined voting power of the outstanding
voting securities of the corporation resulting from such merger or consolidation
or reorganization (the "Surviving Corporation") in substantially the same
proportion as their ownership of the voting securities immediately before such
merger, consolidation or reorganization; (ii) the individuals who were members
of the Incumbent Board immediately prior to the execution of the agreement
providing for such merger, consolidation or reorganization constitute at least
two-thirds of the members of the Board of Directors of the Surviving
Corporation; and (iii) no person has beneficial ownership of 15% or more of the
combined voting power of the Surviving Corporation's then outstanding voting
securities; (2) a complete liquidation or dissolution of the Company; or (3) an
agreement for the sale or other disposition of all or substantially all of the
assets of the Company to any person. Consummation of the Offer will constitute a
"change in control" under the Severance Protection Agreements. The Severance
Protection Agreements, a copy of a form of which has been filed as
Exhibit (e)(4) hereto, are incorporated herein by reference.

TREATMENT OF STOCK OPTIONS. All of the outstanding options to purchase
Shares (a "Stock Option") granted by the Company under the Company's 1994
Long-Term Stock Incentive Plan (the "Company Stock Option Plan") immediately
vest and become exercisable upon a "change in control." Pursuant to the Company
Stock Option Plan, as a result of the consummation of the Offer, the Stock
Options covered by the Company Stock Option Plan will immediately vest and
become exercisable. The Company Stock Option Plan, a copy of which has been
filed as Exhibit (e)(5) hereto, is incorporated herein by reference.

The Merger Agreement provides that on the date Purchaser purchases Shares
pursuant to the Offer, each Stock Option, whether or not then exercisable, shall
become exercisable, subject to the terms of the Company Stock Option Plan. If
and to the extent that a Stock Option shall not have been exercised at the
Effective Time of the Merger, such Stock Option shall be automatically canceled.
Each holder of a canceled Stock Option shall be entitled to receive as soon as
practicable from the Company in consideration for such cancellation an amount in
cash (less applicable withholding taxes) equal to the product of (i) the number
of Shares of Common Stock previously subject to such Stock Option multiplied by
(ii) the excess, if any, of the Offer Price over the exercise price per share of
Common Stock previously subject to such Stock Option upon surrender of such
Stock Option to the Company or an affidavit of loss in the form requested by
Parent, together with such additional documentation as may be reasonably
required by Parent or the Company.

INDEMNIFICATION. The Merger Agreement provides that the articles of
incorporation and by-laws of the Surviving Corporation shall contain provisions
with respect to indemnification and exculpation at least

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as protective to any officer or director as those set forth in the articles of
incorporation and by-laws of the Company, which provisions shall not be amended,
repealed or otherwise modified for a period of six years from the Effective Time
in any manner that would adversely affect the rights thereunder of individuals
who at or prior to the Effective Time were directors, officers, employees or
agents of the Company, unless such modification is required by law.

The Merger Agreement provides that the Company shall, to the fullest extent
permitted under applicable law or under the Company's articles of incorporation
or by-laws and regardless of whether the Merger becomes effective, indemnify and
hold harmless, and, after the Effective Time, Parent-U.S. and the Surviving
Corporation shall, to the fullest extent permitted under applicable law or under
the Surviving Corporation's articles of incorporation or by-laws, indemnify and
hold harmless, each present and former director, officer or employee of the
Company or any of its subsidiaries (collectively, the "Indemnified Parties")
against any costs or expenses (including attorneys' fees), judgments, fines,
losses, claims, damages and liabilities incurred in connection with, and amounts
paid in settlement of, any claim, action, suit, proceeding or investigation,
whether civil, criminal, administrative or investigative and wherever asserted,
brought or filed, (x) arising out of or pertaining to the transactions
contemplated by the Merger Agreement or (y) otherwise with respect to any acts
or omissions or alleged acts or omissions occurring at or prior to the Effective
Time, to the same extent as provided in the respective articles of incorporation
or by-laws of the Company or the subsidiaries or any applicable contract or
agreement as in effect on the date of the Merger Agreement, in each case for a
period of six years after the date of the Merger Agreement. In the event of any
such claim, action, suit, proceeding or investigation (whether arising before or
after the Effective Time) in which there exists no conflict between the
interests of the indemnifying party and the Indemnified Party, the indemnifying
party shall have a right to assume and direct all aspects of the defense
thereof, including settlement, and the Indemnified Party shall cooperate in the
defense of any such matter. The Indemnified Party shall have a right to
participate in (but not control) the defense of any such matter with its own
counsel and at its own expense. The indemnifying party shall not settle any such
matter unless (i) the Indemnified Party gives prior written consent, which shall
not be unreasonably withheld, or (ii) the terms of the settlement provide that
the Indemnified Party shall have no responsibility for the discharge of any
settlement amount and impose no other obligations or duties on the Indemnified
Party and the settlement provides the Indemnified Party with a full release and
discharges all rights against the Indemnified Party with respect to such matter.
In no event shall the indemnifying party be liable for any settlement effected
without its prior written consent; provided, that, if such indemnifying party
elected not to assume and direct the defense of such action, such indemnifying
party's consent to such settlement shall not be unreasonably withheld or
delayed. Any Indemnified Party wishing to claim indemnification, upon learning
of any such claim, action, suit, proceeding or investigation, shall notify
Parent-U.S. and the Surviving Corporation (but the failure so to notify shall
not relieve the indemnifying party from any liability which it may have under
this provision except to the extent of any damages caused by such failure to the
indemnifying party), and shall deliver to Parent-U.S. and the Surviving
Corporation the undertaking contemplated by Section 8.75(e) of the Illinois law.
If the indemnifying party does not assume the defense of any such action, the
Indemnified Parties as a group may retain only one law firm in each jurisdiction
to represent them with respect to any single action unless there is, under
applicable standards of professional conduct, a conflict on any significant
issue between the positions of any two or more Indemnified Parties. The
indemnity agreements of Parent-U.S. and the Surviving Corporation shall extend,
on the same terms to, and shall inure to the benefit of and shall be enforceable
by, each person or entity who controls, or in the past controlled, any present
or former director, officer or employee of the Company or any of its
subsidiaries.

The Merger Agreement provides that the indemnification provisions survive
the consummation of the Merger at the Effective Time, are intended to benefit
the Company, the Surviving Corporation and the Indemnified Parties, shall be
binding on all successors and assigns of Parent-U.S. and the Surviving
Corporation and shall be enforceable by the Indemnified Parties. In the event
that Parent-U.S. or the Surviving Corporation or any of their successors or
assigns (i) consolidates or merges into any other person

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or entity and shall not be the continuing or surviving corporation or entity in
such consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any person or entity, then and in such case, proper
provisions shall be made so that the successors and assigns of Parent-U.S. or
the Surviving Corporation (as the case may be) assume the obligations of
Parent-U.S. and the Surviving Corporation set forth above.

ITEM 4. THE SOLICITATION OR RECOMMENDATION.

(A) RECOMMENDATION

THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE MERGER
AGREEMENT, THE OFFER AND THE MERGER AND DETERMINED THAT THE OFFER AND THE MERGER
ARE FAIR TO AND IN THE BEST INTERESTS OF THE STOCKHOLDERS OF THE COMPANY. The
Board of Directors recommends that all holders of Shares accept the Offer and
immediately tender their Shares pursuant to the Offer. A letter to stockholders
communicating the Board of Director's recommendation has been filed as Exhibit
(a)(4) hereto and is incorporated herein by reference.

(B) (I) BACKGROUND

In the Fall of 1997, the Board of Directors of the Company determined to
explore strategic alternatives to maximize stockholder value. In connection with
that determination, in December 1997, the Company retained Peter J. Solomon
Company Limited (the "Financial Advisor") to prepare a confidential information
memorandum describing the Company and to assist the Company in identifying
parties that might be interested in a possible transaction with the Company.
Between December 1997 and May 1998, the Company authorized the Financial Advisor
to contact approximately 20 selected companies to discern their level of
interest in pursuing a transaction with the Company. Nine of the selected
companies entered into confidentiality agreements and were provided with the
confidential information memorandum prepared by the Financial Advisor. For a
variety of reasons, including conflicts of interest, lack of synergies and
insufficient valuation, none of the companies that were provided with the
confidential information memorandum expressed further interest regarding a
possible transaction with the Company. Accordingly, the engagement of the
Financial Advisor was terminated. The Company did not authorize the Financial
Advisor to contact Parent because Parent had recently completed its acquisition
of Fitch Investors Service, L.P. ("Fitch") and was believed to be too occupied
by the combination of Fitch and IBCA Inc. to have any interest in the Company.

Prior to June 1999, the executive officers of the Company were familiar with
the business and operations of Parent through the activities in the credit
rating business of its wholly owned subsidiary Fitch IBCA, Inc. ("Fitch IBCA").

In June 1999, Robin Monro-Davies, Chief Executive Officer of Fitch IBCA,
called Paul J. McCarthy, Chairman and Chief Executive Officer of the Company, to
ask whether Mr. McCarthy might be interested in meeting to explore the
possibility of a business combination between the Company and Fitch IBCA. On
September 17, 1999, Mr. Monro-Davies met with Mr. McCarthy in New York City to
discuss the possibility of a combination between the companies.

At the regular quarterly meeting of the Board of Directors of the Company on
August 17, 1999, at which all of the directors were present, Mr. McCarthy
advised the Board of the preliminary contact received by the Company from Parent
regarding the possibility of a business combination.

On October 11, 1999, Mr. McCarthy was contacted by another third party which
expressed an interest in discussing a possible business combination with the
Company. Later in October 1999, Mr. McCarthy met with the executive vice
president of such third party to generally discuss the possibility of a business
combination with the Company.

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At the regular quarterly meeting of the Board of Directors of the Company on
November 11, 1999, at which all of the directors were present, Mr. McCarthy
advised the Board of the meetings he had had with Mr. Monro-Davies and the
executive vice president of the other third party, and the Board discussed the
possibility of a business combination between the Company and either Fitch IBCA
or the other third party.

In December 1999, Mr. McCarthy and Philip T. Maffei, President of the
Company, met with the executive vice president of the other third party to
further explore on a preliminary basis the possibility of a business combination
between the Company and the other third party.

In December 1999, Mr. Monro-Davies again contacted Mr. McCarthy and
indicated that Parent was interested in proceeding further with discussions
regarding a possible business combination between the Company and Fitch IBCA.
Mr. Monro-Davies and Mr. McCarthy then scheduled a meeting in January 2000 with
Marc de Lacharriere, President of Parent. On January 18, 2000, Messrs. McCarthy
and Maffei met in New York City with Mr. de Lacharriere, Veronique Morali,
Managing Director of Parent, Mr. Monro-Davies and Steven Joynt, President of
Fitch IBCA, to discuss the possibility of a business combination between the
Company and Fitch IBCA. The parties acknowledged that Parent would be a unique
buyer and that the synergies between the Company and Fitch IBCA would permit the
combined companies to better compete with the two major credit rating agencies.
The parties noted that the strengths of Fitch IBCA in U.S. securitization
markets, global banking, European rating activities and U.S. public finance
would complement the Company's expanded corporate rating capability and broader
coverage of the insurance sector, in addition to the Company's strong structured
finance group and international network. The parties also discussed the possible
structures of a combination between the Company and Fitch IBCA.

Following the January meeting with representatives of Parent, counsel for
the Company delivered to counsel for Parent a draft confidentiality agreement
and the parties began to negotiate the terms thereof. In response to the initial
draft, Parent requested that the Company agree to negotiate exclusively with
Parent regarding a potential business combination, but the Company declined to
accept pending evolution of discussions. On January 25, 2000, the Company and
Parent entered into a confidentiality agreement in which Parent agreed, among
other things, to keep information it obtained from the Company confidential, to
refrain from soliciting employees of the Company, and not to make an unsolicited
offer to acquire the Company.

Following the execution of the confidentiality agreement, the Company
transmitted to Parent certain preliminary commercial and legal information with
respect to the Company. On February 11, 2000, Parent requested through its
counsel additional information regarding the Company, but the Company declined
to provide such additional information pending the outcome of further
discussions.

On February 2, 2000, Messrs. McCarthy and Maffei again met with the
executive vice president of the other third party to continue preliminary
discussions regarding a possible business combination with the Company.

During the regular quarterly meeting of the Board of Directors of the
Company on February 18, 2000, Mr. McCarthy updated all the members of the Board
on the status of the business combination discussions between the Company and
each of Parent and the other third party. The members of the Board then
discussed the benefits and disadvantages of the possible business combinations.

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On February 24, 2000, Mr. de Lacharriere, Ms. Morali and Mr. Joynt met again
with Messrs. McCarthy and Maffei in New York City. Mr. de Lacharriere,
Ms. Morali and Mr. Joynt expressed Parent's continued interest in pursuing a
business transaction with the Company and indicated that Parent was prepared to
make a cash offer for the outstanding Shares at a price of $95.00 per Share. The
representatives of Parent also stated that Parent had available to it funding
necessary to complete the Transaction so that there would be no financing
contingency in the definitive agreement. The parties engaged in further
negotiations and at the end of the meeting, Mr. de Lacharriere stated that
Parent was prepared to make a cash offer of $100.00 per Share, subject to the
satisfaction of a number of conditions, including agreement on the structure of
the transaction, the satisfactory completion of due diligence and the
negotiation of a definitive agreement. Parent also requested that the Company
commit to negotiate exclusively with Parent for a limited period of time, but
the Company stated that it was not prepared to provide exclusivity and reserved
the right to communicate with the other third party with which it had had prior
discussions.

Following the meeting with the representatives of Parent, on February 24,
2000, Mr. McCarthy contacted the members of the Board of Directors by telephone
to advise them of the offer made by Parent. On February 24, 2000, the Company
again engaged the Financial Advisor to review the terms of the proposed
transaction from a financial point of view and to perform such other financial
advisory services as requested by the Company.

After the meeting between representatives of the Company and Parent through
the execution of the Merger Agreement, Parent and its advisors conducted more
intensive due diligence with respect to the Company and were in regular contact
with the Company and its advisors relating thereto.

On February 25, 2000, Mr. McCarthy was contacted by the executive vice
president of the other third party that had previously expressed an interest in
a possible business combination with the Company. Mr. McCarthy advised the other
third party that the Company had received a cash offer for a business
combination at a significant premium to its current market valuation and that
Parent was beginning to prepare appropriate documentation. No business
combination proposal was ever received from such other third party.

On February 28, 2000, Mr. McCarthy received a letter from Ms. Morali stating
Parent's continued interest in acquiring the Company and requesting that the
Company enter into a 14 day exclusive period during which the Company would not
discuss or negotiate any other potential business combination. The Company
advised Parent that the Company would not enter into such an exclusivity
agreement with respect to discussions and negotiations regarding potential
business combinations. In response to repeated requests from Parent and its
counsel for assurances that the Company was negotiating in good faith, however,
on February 29, 2000, the Company provided a letter to Parent stating that the
Company intended to engage in good faith negotiations with Parent with respect
to a business combination and that it was not engaged in negotiations with
respect to a possible combination with any other third party. Furthermore, the
Company agreed that prior to March 7, 2000, it would not take any further steps
to solicit proposals with respect to any other potential business combinations
while negotiating with Parent and that in the event that the Company was
contacted by a third party with respect to a business combination, the Company
would promptly advise Parent of any such proposal.

On February 29, 2000, Parent's counsel provided the Company with an initial
draft of an agreement and plan of merger. During the next week, representatives
of the Company and Parent and their counsel and financial advisors negotiated
the terms of the Merger Agreement, while Parent continued its due diligence
review of the Company. On March 2, 2000, each of the directors of the Company
was provided with a notice of meeting of the Board of Directors of the Company
called for March 6, 2000, an agenda of the meeting, material relating to the
fiduciary duties of the Board of Directors in connection with a potential
business combination transaction, and a copy of the draft agreement and plan of
merger, which had been marked to reflect the revisions proposed by the Company,
its counsel and financial advisors.

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On March 5 and 6, 2000, representatives of the Company and counsel and
financial advisors for the Company met with representatives of Parent and
counsel and financial advisors for Parent in New York City to continue
negotiating the terms and conditions of the agreement and plan of merger.

On March 6, 2000, the Board of Directors of the Company met in New York City
to discuss Parent's offer. Mr. McCarthy reviewed the background of the Company's
relationship with Parent and discussed the terms of the proposed transaction.
The directors discussed the reasons for engaging in a combination with Parent.
The Company's counsel reviewed the terms of the Merger Agreement and the
conditions to Parent's obligation to complete the Transaction. Counsel to the
Company also reviewed with the members of the Board their fiduciary obligations
in considering a potential business combination transaction. The representatives
of the Financial Advisor then made a financial presentation to the Board
supporting the Financial Advisor's opinion as to the fairness, from a financial
point of view, of the $100.00 per Share cash consideration to be received in the
Offer and the Merger by holders of Shares. The Board then asked senior
management and the advisors a number of questions regarding the terms,
conditions and timing of the proposed transaction. At 5:30 p.m., the Board
adjourned while final revisions to the agreement and plan of merger were being
made.

The Board reconvened at 9:30 p.m. on March 6, 2000 and reviewed the
definitive agreement and plan of merger. After further discussion of the
proposed transaction, the Board of Directors, by unanimous vote of those
present, approved, among other things, the Merger Agreement and the transactions
contemplated thereby, determined that the Offer and the Merger are fair to and
in the best interests of the Company and its stockholders and resolved to
recommend to the stockholders of the Company that they accept the Offer, tender
their Shares pursuant to the Offer and approve and adopt the Merger Agreement
and the Merger.

The Merger Agreement was then executed late in the evening on March 6, 2000
by Parent, Parent-U.S., Purchaser and the Company. On March 7, 2000, Parent and
the Company publicly announced the execution of the Merger Agreement in a joint
press release, a copy of which has been filed as Exhibit (a)(3) hereto.

Jonathan Ingham, a member of the Board, was unable to attend the board
meeting on March 6, 2000. However, on March 8, 2000, after discussing the
proposed transaction with Mr. McCarthy and the Company's counsel and having been
provided with copies of all relevant documents, Mr. Ingham ratified and approved
the Merger Agreement, the transactions contemplated thereby and the other
actions taken by the Board at its March 6, 2000 meeting.

On March 15, 2000, Parent and Purchaser commenced the Offer.

(B) (II) REASONS FOR THE RECOMMENDATIONS

In making the determinations and recommendations set forth in Item 4(a)
above, the Board of Directors of the Company considered a number of factors
including, without limitation, the following:

(A) The consideration to be paid in the Offer and the Merger, and, in
particular, the fact that the $100.00 per Share to be received by the
Company's stockholders in the Offer and the Merger represents an
approximate 27% premium over the closing stock price per Share on
March 6, 2000, the day the Board of Directors approved the sale to
Parent;

(B) The Company's financial condition, results of operations, assets,
liabilities, liquidity, business and prospects and industry, economic
and market conditions, including the inherent risks and uncertainties in
the Company's business in each case on a historical, current and
prospective basis. The Board of Directors determined that in its view,
the acquisition of the Company by Parent presented the best means of
achieving the greatest value for holders of its Shares;

(C) The strategic fit of the Company with Fitch IBCA. Fitch IBCA's key
strengths have been in U.S. securitization markets, global banking,
European rating activities and U.S. public finance. The

9
<PAGE>
Company brings to Fitch IBCA an expanded corporate rating capability and
broader coverage of the insurance sector, in addition to a strong
structured finance group and international network;

(D) Analysis of the future prospects of the Company on a stand alone basis;

(E) The historical and recent market prices for the Shares and potential
future share prices;

(F) The opinion of Peter J. Solomon Company Limited, dated March 6, 2000, to
the effect that, as of such date and based upon and subject to certain
matters stated in such opinion, the $100.00 per Share cash consideration
to be received in the Offer and the Merger by holders of Shares (other
than Parent and its affiliates) was fair, from a financial point of
view, to such holders. The full text of Peter J. Solomon Company
Limited's written opinion, dated March 6, 2000, which sets forth the
assumptions made, matters considered and limitations on the review
undertaken by Peter J. Solomon Company Limited, is attached hereto as
Annex B, and is incorporated herein by reference. This opinion is
directed only to the fairness, from a financial point of view, of the
$100.00 per Share cash consideration to be received in the Offer and the
Merger by holders of Shares (other than Parent and its affiliates) and
is not intended to constitute, and does not constitute, a recommendation
as to whether any shareholder should tender Shares pursuant to the
Offer. HOLDERS OF SHARES ARE URGED TO READ THIS OPINION CAREFULLY IN ITS
ENTIRETY;

(G) The availability of appraisal rights under Section 11.65 of the Illinois
law;

(H) The terms and conditions of the Merger Agreement, including provisions
that (a) although prohibiting the Company and its representatives from
soliciting or initiating any inquiries or proposals regarding an
Acquisition Proposal (as defined in the Merger Agreement), permit the
Company and its representatives to furnish information or data
(including, without limitation, confidential information or data)
relating to the Company or its subsidiaries to, and participate in
negotiations with, any third party making an unsolicited bona fide
written Acquisition Proposal, to the extent the Board reasonably believes
that such Acquisition Proposal may constitute a Superior Proposal (as
defined in the Merger Agreement) and (b) permit the Company to terminate
the Merger Agreement to accept a Superior Proposal, subject to (i) the
Company entering into a definitive agreement providing for the
transactions contemplated by such Acquisition Proposal immediately
following such termination, (ii) the Board having given Parent at least
two business days prior written notice of its determination to terminate
the Merger Agreement and having afforded Parent a reasonable opportunity
within such two business day period to amend its Offer and (iii) payment
of a termination fee of $16,000,000 plus actual out-of-pocket expenses of
Parent and Purchaser not to exceed $2,000,000;

(I) The proposed structure of the Offer and the Merger involving an
immediate cash tender offer followed by a merger for the same
consideration and the fact that there is no financing or due diligence
contingency to the Offer. In this connection, the Board also considered
the likelihood that the proposed acquisition would be consummated,
including the likelihood of satisfaction of the conditions to the Offer
and the Merger contained in the Merger Agreement, and the risks to the
Company if the acquisition was not consummated; and

(J) The recommendation of the Company's management with respect to the
proposed transaction.

The Board evaluated the factors listed above in light of the directors'
knowledge of the business and operations of the Company and in their business
judgment. In view of the variety of factors considered by the Board in
connection with its evaluation of the Merger Agreement and the Transaction, the
Board did not find it practicable to and did not quantify or otherwise assign
relative weight to the specific factors considered in reaching its
determination. In addition, individual members of the Board may have given
different weights to different factors in making their individual
determinations.

10
<PAGE>
(C) INTENT TO TENDER

To the best of the Company's knowledge, all of its executive officers and
directors who own Shares intend to tender pursuant to the Offer all Shares which
are owned beneficially or of record by such persons.

ITEM 5. PERSONS/ASSETS RETAINED, EMPLOYED, COMPENSATED OR USED.

The Company has retained Peter J. Solomon Company Limited (the "Financial
Advisor") to act as its financial advisor in connection with the Offer and the
Merger. Pursuant to the terms of the Financial Advisor's engagement, the Company
has agreed to pay the Financial Advisor the following amounts: (i) a retention
fee of $100,000, (ii) $200,000 for rendering an opinion as to the fairness, from
a financial point of view, of the consideration to be received in the Offer and
the Merger by the holders of Shares and (iii) $700,000 upon consummation of the
Transaction. The Company also has agreed to reimburse the Financial Advisor for
reasonable out-of-pocket expenses, including the reasonable fees, disbursements
and other charges of its legal counsel, and to indemnify the Financial Advisor
and related parties against certain liabilities, including liabilities under the
federal securities laws, arising out of the Financial Advisor's engagement.

Neither the Company nor any person acting on its behalf has employed,
retained or compensated any other person to make solicitations or
recommendations to the stockholders of the Company on its behalf concerning the
Offer and the Merger.

ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.

To the best of the Company's knowledge, no transactions in Shares have been
effected during the past 60 days by the Company or by an executive officer,
director, affiliate or subsidiary of the Company.

ITEM 7. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.

(a) Except as described under Items 3 and 4 above, the Company is not
presently engaged in any negotiations in response to the Offer which relates to
or would result in: (i) an extraordinary transaction such as a merger,
reorganization or liquidation, involving the Company or any subsidiary of the
Company; (ii) a purchase, sale or transfer of a material amount of assets by the
Company or any subsidiary of the Company; (iii) a tender offer for or other
acquisition of securities by or of the Company, any of its subsidiaries or any
other person; or (iv) any material change in the present dividend rate or policy
or indebtedness or capitalization of the Company.

(b) Except as described in Items 3 and 4 above, there are no transactions,
board resolutions, agreements in principle or signed contracts in response to
the Offer which relate to or would result in one or more of the matters referred
to in paragraph (a) of this Item 7.

ITEM 8. ADDITIONAL INFORMATION.

Reference is hereby made to the Offer to Purchase and the related Letter of
Transmittal, which have been filed as Exhibits (a)(1) and (a)(2) hereto,
respectively, and are incorporated herein by reference in their entirety.

11
<PAGE>
ITEM 9. EXHIBITS.

The following Exhibits are filed herewith:

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- ---------------------------------------------------------------------------------------
<S> <C>
(a)(1) Offer to Purchase, incorporated by reference to Exhibit (a)(1)(A) to Purchaser's Tender
Offer Statement on Schedule TO.

(a)(2) Letter of Transmittal, incorporated by reference to Exhibit (a)(1)(B) to Purchaser's
Tender Offer Statement on Schedule TO.

(a)(3) Joint Press Release of Fimalac, S.A. and Duff & Phelps Credit Rating Co. issued March
7, 2000, incorporated by reference to Exhibit (a)(1)(H) to Purchaser's Tender Offer
Statement on Schedule TO.

(a)(4) Letter to Stockholders of Duff & Phelps Credit Rating Co., dated March 15, 2000.

(a)(5) Form of Summary Advertisement, incorporated by reference to Exhibit (a)(1)(G) to
Purchaser's Tender Offer Statement on Schedule TO.

(a)(6) Fairness Opinion of Peter J. Solomon Company Limited, dated March 6, 2000, attached
hereto as Annex B.

(e)(1) Confidentiality Agreement, dated January 25, 2000, between Fimalac, S.A. and Duff &
Phelps Credit Rating Co.

(e)(2) Exclusivity Letter, dated February 29, 2000, from Duff & Phelps Credit Rating Co.

(e)(3) Agreement and Plan of Merger dated as of March 6, 2000 among Fimalac, S.A., Fimalac,
Inc., FSA Acquisition Corp. and Duff & Phelps Credit Rating Co., incorporated by
reference to Exhibit (d)(1) to Purchaser's Tender Offer Statement on Schedule TO.

(e)(4) Form of Severance Protection Agreement between Duff & Phelps Credit Rating Co. and its
executive officers, incorporated by reference to Exhibit 10.8 to Duff & Phelps Credit
Rating Co.'s registration statement on Form 10, as amended.

(e)(5) Duff & Phelps Credit Rating Co. 1994 Long-Term Stock Incentive Plan, incorporated by
reference to Exhibit 10.1 to Duff & Phelps Credit Rating Co.'s registration statement
on Form 10, as amended.

(g) None.
</TABLE>

12
<PAGE>
SIGNATURE

AFTER DUE INQUIRY AND TO THE BEST OF MY KNOWLEDGE AND BELIEF, I CERTIFY THAT
THE INFORMATION SET FORTH IN THIS STATEMENT IS TRUE, COMPLETE AND CORRECT.

<TABLE>
<S> <C> <C>
DUFF & PHELPS CREDIT RATING CO.

By: /s/ PAUL J. MCCARTHY
-----------------------------------------
Paul J. McCarthy
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
</TABLE>

Dated: March 15, 2000

13
<PAGE>
ANNEX A
INFORMATION STATEMENT PURSUANT TO SECTION 14(F)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND RULE 14F-1 THEREUNDER

GENERAL

This Information Statement is being mailed on or about March 15, 2000 as
part of the Solicitation/ Recommendation Statement on Schedule 14D-9 (the
"Schedule 14D-9") of Duff & Phelps Credit Rating Co. (the "Company").
Capitalized terms used herein and not otherwise defined shall have the meaning
set forth in the Schedule 14D-9. You are receiving this Information Statement in
connection with the possible election of persons designated by Fimalac, S.A.
(the "Parent Designees") to the Company's Board of Directors (the "Board"). The
Merger Agreement requires the Company, following Purchaser's purchase of Shares
pursuant to the Offer and upon request of Purchaser, to take certain action to
cause the Parent Designees to be elected to the Board. This Information
Statement is required by Section 14(f) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and Rule 14f-1 promulgated thereunder. You are
urged to read this Information Statement carefully. You are not, however,
required to take any action in connection with this Information Statement.

The Offer commenced on March 15, 2000 and is schedule to expire at 12:00
midnight New York City time, on April 11, 2000, unless extended upon the terms
set forth in the Offer to Purchase.

The information contained in this Information Statement concerning Parent
and Purchaser has been furnished to the Company by Parent. The Company assumes
no responsibility for the accuracy or completeness of such information. To the
best knowledge of the Company, none of the Parent Designees beneficially owns
any equity securities in the Company.

DESIGNATION OF DIRECTORS

The Merger Agreement provides that, promptly following the purchase of any
Company Common Stock by Purchaser which satisfies the Minimum Condition (as
defined in the Merger Agreement), Parent will be entitled to designate such
number of Parent Designees on the Board as is equal to the product of the total
number of directors on the Board (giving effect to the directors designated by
Parent) multiplied by the percentage that the aggregate number of Shares
beneficially owned by Purchaser or any affiliate of Purchaser bears to the total
number of Shares then outstanding. The Company has agreed, upon the request of
Parent, to increase the size of the Board or use its reasonable best efforts to
secure the resignations of such number of its incumbent directors, or both, as
is necessary to enable the Parent Designees to be so elected to the Board and
shall cause the Parent Designees to be so elected; provided, that, at all times
prior to the Effective Time, the Company's Board shall consist of at least two
members who are not Parent Designees. The Company has also agreed upon request
of Parent to use its reasonable best efforts to cause directors designated by
Parent to constitute the same percentage as such directors represent on the
Board on each committee of the Board, each board of directors of each subsidiary
of the Company and each committee of each such subsidiary board of directors.

It is expected that the Parent Designees will assume office promptly
following the purchase by Parent of outstanding Shares which satisfy the Minimum
Condition, which purchase cannot be earlier than April 11, 2000, and that, upon
assuming office, the Parent Designees together with the continuing directors of
the Company will thereafter constitute the entire Board.

A-1
<PAGE>
PARENT DESIGNEES

As of the date of this Information Statement, Parent (as defined below) has
not determined who will be its designees (the "Designees"). However, the
Designees will be selected from among the following persons.

The following tables set forth the name, business address, present principal
occupation and material positions held within the past five years of each
director and executive officer of Fimalac, S.A. ("Parent") and FSA Acquisition
Corp. ("Purchaser").

PARENT

Unless otherwise specified, each person listed below is a citizen of France
and has his or her principal business address at 97, rue de Lille, 75007 Paris,
France; Telephone: 33-1-47-53-61-71.

<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT, MATERIAL POSITIONS HELD
NAME AND BUSINESS ADDRESS DURING THE PAST FIVE YEARS AND CITIZENSHIP
- - ------------------------- -------------------------------------------------------------------
<S> <C>
Marc Ladreit de Lacharriere President of Parent since 1991. Business Manager of Banque de Suez
et de l'Union des Mines (now Credit Agricole Indosuez) (1970-1976).
Finance Director, then Vice President in charge of Administration
and Finance Manager, then Group Executive Vice President of L'Oreal
(1976-1991). Director of L'Oreal, Canal +, Groupe Flo, Euris and
Groupe Andre.

Pierre Castres Saint-Martin Director of Parent since 1998. Manager, Finance and Legal Affairs
of L'Oreal Group (1979), Vice President in charge of Administration
and Finance of L'Oreal since January 1991. Group Executive Vice
President at L'Oreal (1997-1999). Director of L'Oreal
(1994-present).

Georges Charpak Director of Parent since 1997. Physicist, member of the French
Academy of Sciences since 1985. Nobel Prize for Physics (1992).
Head of research of the French national scientific research center
(CNRS) (1948-1959), then of the European Organization for Nuclear
Research (CERN) in Geneva (1959-present). Director of Cogema and
Biospace.

Alain Gomez Director and member of the Executive Committee of Parent since
1996. Finance Director of Saint-Gobain, Director of the Packaging
Department then the Containers Division of Saint-Gobain
Pont-a-Mousson (1970-1982). CEO of Thomson-CSF and Thomson S.A.
(1982-1996).

Bernard Mirat Director of Parent since 1993. Chairman of Fitch IBCA France.
Deputy Secretary General of the Compagnie des Agents de Change
(1961-1987). Deputy General Manager then Vice-President-CEO of
Societe des Bourses Francaises (1987-1992). Member of the
Supervisory Board of Lagardere s.c.a.
</TABLE>

A-2
<PAGE>

<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT, MATERIAL POSITIONS HELD
NAME AND BUSINESS ADDRESS DURING THE PAST FIVE YEARS AND CITIZENSHIP
- - ------------------------- -------------------------------------------------------------------
<S> <C>
Robin Monro-Davies Director of Parent since 1998. Chief Executive Officer of Fitch
IBCA since 1997. Former Royal Navy pilot in the Royal Navy, then
financial analyst on Wall Street. Since 1976, President of IBCA, a
credit rating agency based in London acquired by Parent in 1997.
Mr. Monro-Davies is a British citizen.

Bernard Pierre Director of Parent since 1997. Member of the Executive Committee of
Parent since 1996. Chairman and Chief Executive Officer of
Engelhard-CLAL since 1997. Manager of the cable division at Alcatel
(1961-1996). Deputy Managing Director of Alcatel-Alsthom
(1986-1992), Chairman and CEO of Saft (1992-1994), Deputy
Chairman-CEO then Chairman and CEO of Alcatel Cable (1994-1996).

Gerard Mestrallet Director (as permanent representative of Auxilex) of Parent since
1996. President of the Management Board of Suez-Lyonnaise des Eaux.
Deputy Managing Director then Chairman of Compagnie de Suez
(1984-1997). Director of Compagnie de Saint-Gobain and SAGEM.
Member of the Supervisory Boards of Credit Agricole Indosuez, AXA,
Casino and Societe du Louvre.

Veronique Morali Director (as permanent representative of Fimalac & Cie.) of Parent
since 1994. Member of the Executive Committee of Parent since 1996.
Director and General Manager in charge of administration and
finance at Parent since 1994.

Pierre Blayau Director (as permanent representative of Fimalac Participations) of
Parent since 1996. President of the Management Board of Moulinex.
Strategic Planning Director of Compagnie de Saint-Gobain, Finance
Manager, Managing Director then Chairman of Pont-a-Mousson
(1982-1993). President of the Management Board of
Pinault-Printemps-Redoute (1993-1995). Director of Suez Industrie.

Robert Gimenez Finance Manager of Parent since 1991.

Patrice Pailleret General Counsel of Parent since 1995.

Daniel Gerbi Chief Treasury Officer of Parent since 1999. Director of the
finance department of Strafor Facom (1987-1999).
</TABLE>

A-3
<PAGE>
PURCHASER

Unless otherwise specified, each person listed below is a citizen of the
United States of America and has his or her principal business address at One
State Street Plaza, New York, New York, 10004, USA; Telephone: (212) 908-0500.

<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT, MATERIAL POSITIONS HELD
NAME AND BUSINESS ADDRESS DURING THE PAST FIVE YEARS AND CITIZENSHIP
- - ------------------------- -------------------------------------------------------------------
<S> <C>
Steven Joynt President and Assistant Treasurer of Purchaser. President and Chief
Operating Officer of Fitch IBCA since 1995 (formerly Fitch
Investors Service). Member of the team that acquired and
restructured Fitch Investors in 1989.

David Kennedy Vice President and Treasurer of Purchaser. Executive Vice
President, Chief Financial Officer and Treasurer of Fitch IBCA
(formerly Fitch Investors Service) since 1989.

Charles Brown Secretary and Assistant Treasurer of Purchaser. Managing Director
and General Counsel of Fitch IBCA since 1998. Formerly Vice
President and Assistant General Counsel and Chairman of the
strategic planning counsel of Beneficial Corp. (1994-1998).
</TABLE>

A-4
<PAGE>
CERTAIN INFORMATION CONCERNING THE COMPANY

The shares of Common Stock constitute the only class of voting securities of
the Company. As of the close of business on March 3, 2000, there were 4,644,121
shares of Common Stock outstanding. Each share of Common Stock entitles its
record holder to one vote. Stockholders of the Company do not have cumulative
voting rights.

THE CURRENT MEMBERS OF THE BOARD AND
EXECUTIVE OFFICERS OF THE COMPANY

<TABLE>
<CAPTION>
SERVED AS
NAME AGE POSITION DIRECTOR SINCE
- - ---- -------- ------------------------------------ --------------
<S> <C> <C> <C>
Paul J. McCarthy.................... 61 Chairman of the Board, Chief 1991
Executive Officer, Chief Financial
Officer and Director
Philip T. Maffei.................... 56 President, Chief Operating Officer 1991
and Director
Milton L. Meigs..................... 67 Director 1991
Jonathan Ingham..................... 58 Director 1994
Robert N. Westerlund................ 68 Director 1999
Ernest T. Elsner.................... 59 Executive Vice President and General
Counsel
Peter J. Stahl...................... 50 Executive Vice President
Paul G. Taylor...................... 37 Executive Vice President
</TABLE>

The directors of the Company are elected annually to hold office until the
next annual meeting of shareholders and until their successors are duly elected
and qualified. The executive officers of the Company are elected annually and
serve at the discretion of the Board of Directors of the Company.

Mr. McCarthy has been Chairman of the Board of the Company since
December 1995 and Chief Executive Officer of the Company since February 1991. He
has also been Chief Financial Officer of the Company since November 1994.
Mr. McCarthy was also President of the Company from February 1991 to
December 1995.

Mr. Maffei has been President of the Company since December 1995 and Chief
Operating Officer of the Company since October 1994. From February 1991 to
December 1995, Mr. Maffei was an Executive Vice President of the Company.

Mr. Meigs is presently retired. Mr. Meigs was an Executive Vice President of
the Company from February 1991 to December 31, 1994.

Mr. Ingham has been President and Chief Executive Officer of Ingham
Industries Inc. (DBA Auth Chimes), a manufacturer of door chimes, since
August 1989.

Mr. Westerlund is presently retired. Mr. Westerlund was a partner of Fowler
Rosenau & Geary LLC, a New York Stock Exchange Specialist, from 1990 to 1997 and
a partner of Ziebarth Geary Co. from 1969 to 1990, when it was merged with
Fowler Rosenau & Geary LLC.

Mr. Elsner has been General Counsel of the Company since July 1995 and an
Executive Vice President of the Company since February 1991.

Mr. Stahl has been an Executive Vice President of the Company since
July 1994. From January 1992 to July 1994, Mr. Stahl was a Senior Vice President
of the Company.

Mr. Taylor has been an Executive Vice President of the Company since
January 1999. Mr. Taylor was a Senior Vice President, Managing Director of the
Company from July 1994 to January 1999.

A-5
<PAGE>
DIRECTORS' COMPENSATION

Directors who are employees of the Company do not receive any compensation
for serving as directors of the Company. Other directors receive an annual
retainer of $25,000 and an additional $2,000 payable to any such director who
serves as a chairman of a committee of the Board of Directors, plus an
attendance fee for each such director of $1,000 per regular meeting and $500 per
committee meeting. Under the Company's 1994 Long-Term Stock Incentive Plan,
non-employee directors ("Outside Directors") are automatically granted on the
date of their initial election an option to purchase 5,000 shares of the
Company's Common Stock at an exercise price per share equal to the fair market
value per share of Common Stock on the date of grant. Such options become
exercisable one year after the date of grant and expire ten years after the date
of grant. Outside Directors may also elect to receive options to purchase shares
of Common Stock in lieu of being paid their annual retainer. On May 11, 1999,
Mr. Westerlund was granted an option to purchase 5,000 shares of Common Stock of
the Company at an exercise price equal to $59.875 per share in connection with
his election as a director of the Company. Such option becomes exercisable on
May 11, 2000 and expires on May 11, 2009. On November 11, 1999, Messrs. Ingham,
Meigs and Westerlund were each granted an option to purchase 2,116 shares of the
Company's Common Stock at an exercise price equal to $66.9375 per share in lieu
of being paid their annual retainer for 1999. Such options become exercisable on
the date of the 2000 annual meeting of shareholders and expire on November 11,
2009. Additionally, all Outside Directors are reimbursed for expenses incurred
in attending board meetings.

MEETINGS

During the year ended December 31, 1999, the Board of Directors held four
meetings. Each of the Company's current directors attended or participated in
100% of the aggregate of the total number of meetings held during 1999 by the
Board and the total number of meetings held during 1999 by Committees on which
he served.

COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors has three standing committees, the Executive
Committee, the Audit Committee and the Compensation Committee.

The Executive Committee is empowered to exercise the authority of the Board
of Directors in the management of the business and affairs of the Company
between meetings of the Board of Directors, except as such authority may be
limited by the provisions of the Illinois Business Corporation Act. The
Executive Committee, which presently is composed of Messrs. McCarthy (Chairman)
and Maffei, meets informally from time to time.

The Audit Committee recommends to the Board of Directors the appointment of
the independent public accountants for the following year. The Audit Committee
also reviews the scope of the annual audit, the annual financial statements of
the Company and the auditor's report thereon and the auditor's comments relative
to the adequacy of the Company's system of internal controls and accounting
systems. The Audit Committee, which is presently composed of Messrs. Westerlund
(Chairman), Ingham and Meigs, met one time during 1999.

The Compensation Committee reviews management compensation levels and
provides recommendations regarding salaries and other compensation for the
Company's officers, including bonuses, grants of stock options and other
incentive programs. The Compensation Committee serves as the committee that
administers the Company's 1994 Long-Term Stock Incentive Plan. The Compensation
Committee, which is presently composed of Messrs. Ingham (Chairman), Meigs and
Westerlund, met two times and acted by written consent one time during 1999.

A-6
<PAGE>
The Company does not have a standing nominating committee of the Board of
Directors. This function is performed by the Board of Directors. The Company's
Bylaws establish procedures, including advance notice procedures, with regard to
the nomination, other than by or at the direction of the Board of Directors, of
candidates for election as directors. In general, notice must be received by the
Company at its principal executive offices not less than 60 days nor more than
90 days prior to meetings of shareholders of the Company. Such notice must set
forth all information with respect to each such nominee as required by the
federal proxy rules. Such notice must be accompanied by a signed statement of
such nominee consenting to be a nominee and a director, if elected.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Board of Directors maintains a Compensation Committee, which is
presently composed of Messrs. Ingham (Chairman), Meigs and Westerlund.
Mr. Meigs was an Executive Vice President of the Company until December 31,
1994. None of the other members of the Compensation Committee is presently or
was formerly an officer or employee of the Company.

REPORT OF THE COMPENSATION COMMITTEE ON
EXECUTIVE COMPENSATION

GENERAL

The Compensation Committee of the Board of Directors is responsible for
establishing, administering and evaluating the Company's policies regarding the
compensation of its executive officers. The Company's compensation policies are
intended to align executive compensation with the business objectives and
performance of the Company. Additionally, the Company's compensation policies
are designed to permit the Company to attract, retain and motivate executive
officers to ensure the long-term success of the Company.

The compensation of executive officers is composed of three components:
salary, annual incentive compensation and long-term incentive compensation. The
Compensation Committee considers the total compensation of each executive
officer in establishing each element of his or her compensation. The
compensation of the Company's Chief Executive Officer is subject to the same
policies that are applicable to all executive officers of the Company.

SALARY

In establishing the annual salaries of each of the Company's executive
officers, the Compensation Committee considers the responsibilities, abilities
and industriousness of the executive officer and the Company's performance. The
salaries of the Company's executive officers are reviewed annually.

ANNUAL INCENTIVE COMPENSATION

The Company maintained two annual incentive compensation plans in 1999: the
Incentive Compensation Plan and the Executive Management Incentive Compensation
Plan. Incentive compensation under both plans was variable and closely tied to
corporate and individual performance in a manner that encouraged a continuous
focus on providing top-quality service to clients, increasing productivity and
obtaining new business opportunities in order to increase profitability and
shareholder value.

INCENTIVE COMPENSATION PLAN. The Company has maintained the Incentive
Compensation Plan for several years. Pursuant to the Incentive Compensation
Plan, cash bonuses have been awarded annually to officers and a limited number
of other key employees of the Company, including executive officers, based on
operating income (before depreciation, amortization, incentive compensation and
name use fees) and a performance assessment of the participant. All officers of
the Company and certain professional staff participated in the Incentive
Compensation Plan during 1999. The Compensation Committee reviewed

A-7
<PAGE>
awards under the Incentive Compensation Plan, subject to approval of such awards
by the Board of Directors.

At the beginning of 1999, a target incentive fund was established based on
an operating income goal (before depreciation, amortization, incentive
compensation and name use fees) for the Company. After the results of operations
for the year were known, the incentive fund was adjusted by a percentage of the
variance of the actual operating income (before depreciation, amortization,
incentive compensation and name use fees) from the operating income goal (before
depreciation, amortization, incentive compensation and name use fees)
established at the beginning of the year.

The persons entitled to receive a bonus under the Incentive Compensation
Plan and the amounts awarded were determined as a result of a process involving
a recommendation by the Executive Committee, based on a formalized performance
assessment, and review and final approval by the Compensation Committee of the
Board of Directors.

EXECUTIVE MANAGEMENT INCENTIVE COMPENSATION PLAN. Under the Executive
Management Incentive Compensation Plan, cash bonuses have been awarded annually
to the executive officers of the Company based on the operating income (before
depreciation, amortization, incentive compensation and name use fees) of the
Company. The plan and awards have been reviewed and approved annually by the
Compensation Committee of the Board of Directors.

At the beginning of 1999, a target bonus was established based on the
operating income goal (before depreciation, amortization, incentive compensation
and name use fees) for the Company. Adjustments to the target bonus were also
specified based on variances of the actual operating income (before
depreciation, amortization, incentive compensation and name use fees) from the
established operating income goal (before depreciation, amortization, incentive
compensation and name use fees).

LONG-TERM INCENTIVE COMPENSATION

Pursuant to the Company's 1994 Long-Term Stock Incentive Plan, key employees
of the Company, including executive officers, are eligible to receive long-term
incentives in a variety of forms, including stock options, stock appreciation
rights, restricted stock, phantom stock and other stock based awards. The
purpose of the Company Stock Option Plan is to enable the Company to attract and
retain the best available executive personnel and other key employees, to
provide for the Company's long-term growth and business success and to provide
an incentive for such employees to exert their best efforts on behalf of the
Company and its shareholders. The Compensation Committee believes that the grant
of awards, the value of which is related to the value of the Company's Common
Stock, aligns the interests of shareholders and employees who receive awards.
The Company Stock Option Plan is administered by the Compensation Committee.

The Compensation Committee determines the individuals to whom awards are
granted, the type and amount of awards to be granted, the time of all such
grants and the terms, conditions and provisions of such awards and the
restrictions related thereto. In making awards under the Stock Incentive Plan,
the Compensation Committee considers the recommendations of the Executive
Committee, the responsibilities of each grantee, his past performance and his
anticipated future contribution to the Company.

During 1999, only stock options were granted under the Company Stock Option
Plan. The Compensation Committee believes that the grant of stock options
provides a strong incentive for employees to increase shareholder value over the
long term because the full benefit of such awards cannot be realized unless the
value of the Company's Common Stock appreciates over a specified number of
years. Officers of the Company, Vice Presidents and above, received options in
1999. The exercise price of options granted in 1999 was equal to the fair market
value per share of Common Stock on the date of grant. One-third of each option
grant vests on the first, second and third anniversaries of the date of grant
and such options expire ten years after the date of grant.

A-8
<PAGE>
Amendments adopted in 1993 to the Internal Revenue Code limit the
deductibility for federal income tax purposes of certain compensation payable to
top executive officers of publicly held corporations. Certain types of
compensation are excluded from the limitations. The Company believes that the
limitations are not applicable to stock options granted under the Company Stock
Option Plan or to awards under the Incentive Compensation Plan or the Executive
Management Incentive Compensation Plan.

The salary, annual incentive compensation and long-term incentive
compensation paid by the Company in 1999 to the Chief Executive Officer and the
other four people serving as executive officers of the Company at December 31,
1999 is set forth in the tables that follow this Report. The Compensation
Committee believes that the executive officers of the Company are dedicated to
increasing profitability and shareholder value and that the compensation
policies that the Compensation Committee has established and administered
contribute to this focus.

THE COMPENSATION COMMITTEE
Jonathan Ingham (Chairman)
Milton L. Meigs
Robert N. Westerlund

The foregoing Report of the Compensation Committee on Executive Compensation
shall not be deemed to be incorporated by reference into any filing of the
Company under the Securities Act of 1933 or the Securities Exchange Act of 1934,
except to the extent that the Company specifically incorporates such information
by reference.

A-9
<PAGE>
EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION TABLE

The following table sets forth certain information regarding the
compensation paid or accrued by the Company to or for the account of the Chief
Executive Officer and each of the other four people serving as executive
officers of the Company at December 31, 1999 for services rendered in all
capacities during each of the Company's fiscal years ended December 31, 1999,
1998 and 1997:

<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
-------------
NAME AND ANNUAL COMPENSATION SECURITIES
PRINCIPAL ------------------- UNDERLYING ALL OTHER
POSITION YEAR SALARY BONUS(1) OPTIONS(#)(2) COMPENSATION(3)
- - --------------------------------------- -------- -------- -------- ------------- ---------------
<S> <C> <C> <C> <C> <C>
Paul J. McCarthy, Chairman of the Board 1999 $400,000 $982,210 10,000 $10,668
and Chief Executive Officer 1998 390,000 981,334 12,000 9,875
1997 380,000 890,521 12,000 9,251
Philip T. Maffei, President and Chief 1999 285,000 857,210 9,000 7,800
Operating Officer 1998 273,000 856,334 10,000 7,458
1997 260,000 750,521 10,000 7,103
Ernest T. Elsner, Executive Vice 1999 216,000 342,903 6,000 8,825
President 1998 208,000 360,031 6,600 8,386
1997 198,000 330,434 6,600 7,957
Peter J. Stahl, Executive Vice 1999 208,000 206,873 6,000 6,482
President 1998 200,000 281,334 6,600 6,299
1997 190,000 354,100 6,600 6,066
Paul G. Taylor, Executive Vice 1999 228,150 407,870 6,000 290
President(4)
</TABLE>

- - ------------------------

(1) The Company maintains an Incentive Compensation Plan pursuant to which cash
bonuses are awarded annually to officers and other key employees of the
Company based on operating income (before depreciation, amortization,
incentive compensation and name use fees) and a performance assessment of
the participant. The Company also maintains an Executive Management
Incentive Compensation Plan pursuant to which cash bonuses are awarded
annually to the executive officers of the Company based on operating income
(before depreciation, amortization, incentive compensation and name use
fees) of the Company.

(2) Number of shares of Common Stock subject to options granted during 1999,
1998 and 1997 under the Company's 1994 Long-Term Stock Incentive Plan.

(3) Consists of matching contributions made by the Company pursuant to the
Company's Savings Plan and life insurance premiums paid by the Company on
behalf of each executive officer. For 1999, life insurance premiums in the
following amounts were paid by the Company: Mr. McCarthy, $5,868;
Mr. Maffei, $3,000; Mr. Elsner, $4,025; Mr. Stahl, $1,682; and Mr. Taylor,
$290.

(4) Mr. Taylor became an executive officer of the Company in January 1999.

A-10
<PAGE>
EMPLOYEE STOCK OPTIONS

OPTION GRANTS. The following table sets forth certain information regarding
options to purchase shares of Common Stock granted as incentive compensation to
the executive officers of the Company named in the Executive Compensation Table
during the Company's 1999 fiscal year:

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS GRANTED
OPTIONS GRANTED TO EMPLOYEES IN EXERCISE PRICE GRANT DATE PRESENT
NAME (#)(1) FISCAL YEAR ($/SH)(2) EXPIRATION DATE VALUE ($)(3)
- - ---- --------------- --------------- -------------- ----------------- ------------------
<S> <C> <C> <C> <C> <C>
Paul J. McCarthy..... 10,000 4.3% $78.75 November 11, 2009 $390,596
Philip T. Maffei..... 9,000 3.9 78.75 November 11, 2009 351,545
Ernest T. Elsner..... 6,000 2.6 78.75 November 11, 2009 234,379
Peter J. Stahl....... 6,000 2.6 78.75 November 11, 2009 234,379
Paul G. Taylor....... 6,000 2.6 78.75 November 11, 2009 234,379
</TABLE>

- - --------------------------

(1) All options were granted on November 11, 1999 under the Company's 1994
Long-Term Stock Incentive Plan. All options are non-qualified stock options.
Beginning November 11, 2000, annually, upon the anniversary of the date of
grant of the options, one-third of the options granted become vested and
exercisable, until the third anniversary of the date of grant, whereupon all
of the options granted are vested and exercisable.

(2) The option exercise price is equal to the fair market value per share of
Common Stock on the date of grant.

(3) Calculated pursuant to the Black-Scholes option pricing model. Assumes
expected volatility of 19.47%, risk-free rate of return of 6.7%, dividend
yield of .13%, time of exercise of 10 years and no risk of forfeiture.

OPTION EXERCISES. The following table sets forth certain information
regarding options to purchase shares of Common Stock exercised during the
Company's 1999 fiscal year and the number and value of unexercised options to
purchase shares of Common Stock held at the end of the Company's 1999 fiscal
year by the executive officers of the Company named in the Executive
Compensation Table:

<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL AT FISCAL
NUMBER OF YEAR END (#) YEAR END ($)(2)
SHARES ACQUIRED ON EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) VALUE REALIZED ($)(1) UNEXERCISABLE UNEXERCISABLE
- - ---- ------------------ --------------------- ---------------------- --------------------
<S> <C> <C> <C> <C>
Paul J. McCarthy..... 85,603 $5,628,354 48,000/22,000 $3,111,250/628,125
Philip T. Maffei..... 76,167 3,881,201 15,000/19,000 811,146/530,229
Ernest T. Elsner..... 9,315 526,117 63,350/12,600 4,632,478/350,563
Peter J. Stahl....... 37,183 1,709,138 26,600/12,600 1,725,275/350,563
Paul G. Taylor....... 0 0 34,600/12,600 2,451,525/350,563
</TABLE>

- - ------------------------

(1) Value realized is equal to the difference between the fair market value per
share of Common Stock on the date of exercise and the option exercise price
per share multiplied by the number of shares acquired upon exercise of an
option.

(2) Value of unexercised in-the-money options is equal to the difference between
the fair market value per share of Common Stock at December 31, 1999 and the
option exercise price per share multiplied by the number of shares subject
to options.

SEVERANCE PROTECTION AGREEMENTS

The Company entered into Severance Protection Agreements with each of the
executive officers of the Company in 1994 (1999 in the case of Mr. Taylor)
providing them with severance compensation equal to 2.9 times their annual
salary and bonus in the event their employment is terminated for specified
reasons within 36 months following a change in control of the Company or in the
event the executive

A-11
<PAGE>
officer terminates his employment for any reason during the 60-day period
commencing on the first anniversary of a change in control of the Company. The
specified reasons for termination which will result in the obligation to pay
severance compensation include (a) any termination of the executive officer's
employment without Cause (as defined in the Severance Protection Agreement);
(b) a change in the executive officer's status, title, position or
responsibilities which represents an adverse change from his status, title,
position or responsibilities as in effect at any time within 90 days preceding
the date of a change in control or at any time thereafter; the assignment to the
executive officer of any duties or responsibilities which are inconsistent with
his status, title, position or responsibilities as in effect at any time within
90 days preceding the date of a change in control or at any time thereafter; or
any removal of the executive officer from or failure to reappoint or reelect him
to any of such offices or positions; (c) a reduction in the executive officer's
base salary or any failure to pay the executive officer any compensation or
benefits to which he is entitled within 5 days of the date due; (d) requiring
the executive officer to be based at any place outside a 30-mile radius from the
city in which he is employed; (e) the failure by the Company to (A) continue in
effect any material compensation or employee benefit plan in which the executive
officer was participating at any time within 90 days preceding the date of a
change in control or at any time thereafter or (B) provide the executive officer
with compensation and benefits, in the aggregate, at least equal to those
provided for under each other employee benefit plan, program and practice in
which the executive officer was participating at any time within 90 days
preceding the date of a change in control or at any time thereafter; (f) the
insolvency or the filing of a petition for bankruptcy of the Company, which
petition is not dismissed within 60 days; (g) any material breach by the Company
of any provision of the Severance Protection Agreement; (h) any purported
termination of the executive officer's employment for cause which does not
comply with the terms of the Severance Protection Agreement; and (i) the failure
of the Company to obtain an agreement, satisfactory to the executive officer,
from any successors and assigns to assume and agree to perform the Severance
Protection Agreement.

A-12
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT

The following table shows with respect to each person who is known to be the
beneficial owner of more than 5% of the Common Stock of the Company: (i) the
total number of shares of Common Stock beneficially owned as of March 3, 2000;
and (ii) the percent of the Common Stock so owned as of that date:

<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME AND ADDRESS OF OF BENEFICIAL PERCENT OF
BENEFICIAL OWNER OWNERSHIP(1) COMMON STOCK
- - ------------------- ----------------- ------------
<S> <C> <C>
Bear Stearns & Co. Inc...................................... 455,050(2) 9.8%
115 South Jefferson Road
Whippany, New Jersey 07981
Mellon Bank Corporation..................................... 303,980(3) 6.6
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
</TABLE>

The following table shows with respect to each director of the Company, the
executive officers of the Company named in the Executive Compensation Table, and
all directors and executive officers as a group, 8 in number: (i) the total
number of shares of Common Stock beneficially owned as of March 3, 2000; and
(ii) the percent of the Common Stock so owned as of that date:

<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL PERCENT OF
NAME OF BENEFICIAL OWNER OWNERSHIP(1) COMMON STOCK
- - ------------------------ ----------------- ------------
<S> <C> <C>
Paul J. McCarthy(4)......................................... 114,667 2.4%
Philip T. Maffei(4)......................................... 16,098 *
Milton L. Meigs (4)(5)...................................... 62,217 1.3
Jonathan Ingham(4).......................................... 24,872 *
Robert N. Westerlund(4)..................................... 7,616 *
Ernest T. Elsner(4)......................................... 79,495 1.7
Peter J. Stahl(4)........................................... 59,133 1.3
Paul G. Taylor(4)........................................... 34,600 *
All directors and executive officers as a group (8
persons)(4)............................................... 398,698 8.1%
</TABLE>

- - ------------------------

* Less than one percent.

(1) Calculated pursuant to Rule 13d-3(d) of the Securities Exchange Act of 1934.
Unless otherwise stated below, each such person has sole voting and
investment power with respect to all such shares. Under Rule 13d-3(d),
shares not outstanding which are subject to options, warrants, rights or
conversion privileges exercisable within 60 days are deemed outstanding for
the purpose of calculating the number and percentage owned by such person,
but are not deemed outstanding for the purpose of calculating the percentage
owned by each other person listed.

(2) Number of shares reported in the most recent Form 13F filed by Bear
Stearns & Co. Inc. with the Securities and Exchange Commission.

(3) Number of shares reported in the most recent Schedule 13G filed by Mellon
Bank Corporation ("Mellon") with the Securities and Exchange Commission.
Includes 301,080 shares as to which Mellon has sole voting power and 303,980
shares as to which Mellon has sole dispositive power.

(4) Includes shares of Common Stock which could be acquired through the exercise
of stock options as follows: Mr. McCarthy, 48,000 shares; Mr. Maffei, 15,000
shares; Mr. Meigs, 34,192 shares;

A-13
<PAGE>
Mr. Ingham, 24,872 shares; Mr. Westerlund, 7,116 shares; Mr. Elsner, 63,350
shares; Mr. Stahl, 26,600 shares; Mr. Taylor, 34,600 shares; and all
directors and executive officers as a group, 253,730 shares.

(5) Includes 80 shares owned by Mr. Meigs' wife. Mr. Meigs disclaims beneficial
ownership of such shares.

PERFORMANCE GRAPH

The following graph compares the cumulative total return on the Company's
Common Stock with the cumulative total return of the Standard & Poor's
500 Stock Index and the common stock of a peer group selected by the Company for
the period beginning on December 31, 1994 through December 31, 1999.

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
31-DEC-94 31-DEC-95 31-DEC-96 31-DEC-97 31-DEC-98 31-DEC-99
<S> <C> <C> <C> <C> <C> <C>
Credit Rating Co. 100.00 146.91 248.08 419.30 567.16 921.80
Peer Group 100.00 136.14 157.33 233.34 273.73 297.79
S&P 500 100.00 137.58 169.17 225.61 290.09 351.12
</TABLE>

Assumes $100 invested on December 31, 1994 in the Company's Common Stock,
the Standard & Poor's 500 Stock Index and the common stock of the peer group
members. All indices assume dividend reinvestment. Peer group index members are
McGraw-Hill, Inc., Dun & Bradstreet Corp., Equifax Inc., Dow Jones & Co. Inc.,
and MBIA Inc. The peer group index is market capitalization-weighted.

The foregoing table shall not be deemed to be incorporated by reference into
any filing of the Company under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent that the Company specifically
incorporates such information by reference.

A-14
<PAGE>
ANNEX B

[LOGO]

March 6, 2000

The Board of Directors
Duff & Phelps Credit Rating Co.
55 East Monroe Street
Chicago, IL 60603

Ladies and Gentlemen:

You have asked us to advise you as to the fairness from a financial point of
view to the holders of Common Stock, no par value ("Company Common Stock") of
Duff & Phelps Credit Rating Co. (the "Company") of the consideration of $100 per
share of Company Common Stock proposed to be paid by Fimalac, S.A., a French
SOCIETE ANONYME ("Parent") pursuant to the terms of the Agreement and Plan of
Merger, dated as of March 6, 2000 (the "Agreement"), between Parent, Fimalac,
Inc. ("Frank-U.S."), a wholly owned subsidiary of Parent, FSA Acquisition Corp.
("Acquisition Sub"), a wholly owned subsidiary of Frank-U.S., and the Company.
The Agreement provides for a tender offer (the "Offer") by Acquisition Sub to
acquire all outstanding shares of the Company Common Stock pursuant to which
Acquisition Sub will pay $100 for each share of Company Common Stock accepted
for payment in the Offer. The Agreement further provides that following
completion of the Offer, Acquisition Sub will be merged (the "Merger" and,
together with the Offer, the "Acquisition") with and into the Company and each
outstanding share of Company Common Stock will be converted in the Merger into
the right to receive $100 in cash.

For purposes of the opinion set forth herein, we have:

(i) reviewed the Annual Reports to Stockholders and Annual Reports on
Form 10-K of the Company for the three years ended December 31, 1998,
and certain interim reports to stockholders and Quarterly Reports on
Form 10-Q of the Company, and certain other public communications from
the Company to its stockholders;

(ii) reviewed certain internal financial analyses and forecasts of the
Company prepared by the management of the Company;

(iii) discussed the past and current operations, financial condition and
prospects of the Company with senior management of the Company;

(iv) reviewed the reported prices and trading activity of the Company Common
Stock;

(v) compared the financial performance and condition of the Company and the
reported prices and trading activity of the Company Common Stock with
that of certain other comparable publicly traded companies;

(vi) reviewed publicly available information regarding the financial terms
of certain recent business combination transactions in the financial
services industry specifically and other industries generally which
were comparable, in whole or in part, to the Acquisition;

(vii) participated in certain discussions among representatives of each of
the Parent and the Company;

(viii) reviewed the Agreement; and

B-1
<PAGE>
(ix) performed such other analyses as we have deemed appropriate.

We have assumed and relied upon the accuracy and completeness of the
information reviewed by us for the purposes of this opinion and we have not
assumed any responsibility for independent verification of such information.
With respect to the financial projections, we have assumed that the financial
projections were reasonably prepared on bases reflecting the best currently
available estimates and judgments of the future financial performance of the
Company. We have not made an independent evaluation or appraisal of the assets
or liabilities of the Company, nor have we been furnished with any such
evaluation or appraisal. Our opinion is necessarily based on economic, market
and other conditions as in effect on, and the information made available to us
as of, the date hereof.

We were retained by the Company solely to render an opinion as to the
fairness from a financial point of view of the consideration to be received by
the holders of Company Common Stock from Parent in the Acquisition. We were not
engaged to solicit, and did not solicit, interest from any party with respect to
a merger or other business combination transaction involving the Company. We
will receive a fee for our services, a portion of which is payable upon the
delivery of this opinion. In the past, we have provided other financial advisory
services to the Company and have received fees for rendering these services.

This letter is provided solely for the information of the Board of Directors
of the Company in connection with its consideration of the Acquisition and is
not on behalf of and is not intended to confer rights or remedies upon any other
entity or persons, and may not be used for any other purposes without our prior
written consent. This letter does not constitute a recommendation to any holder
of Company Common Stock as to whether or not such holder should tender any
shares of Company Common Stock in the Offer or how any such holder should vote
on the Merger.

Based on, and subject to, the foregoing and other matters as we consider
relevant, we are of the opinion that on the date hereof, the consideration to be
received by the holders of Company Common Stock in connection with the
Acquisition is fair from a financial point of view to the holders of Company
Common Stock.

Very truly yours,

PETER J. SOLOMON COMPANY LIMITED

[LOGO]

B-2
<PAGE>
EXHIBIT INDEX

(a)(2) Letter of Transmittal, incorporated by reference to Exhibit (a)(1)(B) to Purchaser's
Tender Offer Statement on Schedule TO.

(a)(4) Letter to Stockholders of Duff & Phelps Credit Rating Co., dated March 15, 2000.

(a)(5) Form of Summary Advertisement, incorporated by reference to Exhibit (a)(1)(G) to
Purchaser's Tender Offer Statement on Schedule TO.

(a)(6) Fairness Opinion of Peter J. Solomon Company Limited, dated March 6, 2000, attached
hereto as Annex B.

(e)(1) Confidentiality Agreement, dated January 25, 2000, between Fimalac, S.A. and Duff &
Phelps Credit Rating Co.

(e)(2) Exclusivity Letter, dated February 29, 2000, from Duff & Phelps Credit Rating Co.

(g) None.
</TABLE>

<PAGE>
EXHIBIT(a)(4)

[LOGO]

March 15, 2000

Dear Fellow Stockholder:

I am pleased to report that on March 6, 2000, our Company entered into an
agreement to be acquired by Fimalac, S.A. ("Fimalac"). The consideration to be
received is $100.00 cash per share of common stock. This offer represents
approximately a 27% premium to the Company's closing stock price on March 6,
2000, the day the Board approved the sale to Fimalac.

Our board of directors carefully considered many factors when it decided to
recommend Fimalac's offer. These factors are more fully described in the
enclosed Schedule 14D-9. AFTER SUCH CONSIDERATION, OUR BOARD OF DIRECTORS
UNANIMOUSLY RECOMMENDS THAT YOU ACCEPT FIMALAC'S OFFER AND IMMEDIATELY TENDER
YOUR DCR SHARES TO FIMALAC.

Accompanying this letter is:

1. a copy of our Solicitation/Recommendation Statement on Schedule 14D-9.

2. Fimalac's Offer to Purchase and related materials, including a Letter of
Transmittal for use in tendering shares.

WE URGE YOU TO READ THE ENCLOSED MATERIALS CAREFULLY.

Our management and directors thank you for the support you have given the
Company.

On behalf of the Board of Directors,

Sincerely,

[LOGO]

Paul J. McCarthy
Chairman and
Chief Executive Officer

<PAGE>

Exhibit (e)(1)

DCR
- - ------------------------------------------------------------------------------
DUFF & PHELPS CREDIT RATING CO.

55 EAST MONROE STREET
CHICAGO, ILLINOIS 60603
(312) 368-3100
FAX (312) 422-4121

January 25, 2000

FIMALAC
97, rue de Lille
Paris France 75007

Attention: Veronique Morali
Managing Director

Ladies and Gentlemen:

In order to allow you to evaluate a possible transaction with Duff & Phelps
Credit Rating Co. (the "Company") involving an investment in or acquisition of
all or a part of the Company (the "Transaction"), representatives of the
Company will deliver to you, upon your execution and delivery to the Company
of this letter agreement, certain information about the properties and
operations of the Company. All information about the Company furnished by the
Company or its affiliates, directors, officers, employees, agents or
controlling persons (such affiliates and other persons collectively referred
to herein as "Representatives") after the date hereof, is referred to in this
letter agreement as "Proprietary Information." Proprietary Information does
not include, however, information which (a) is or becomes generally available
to the public other than as a result of disclosure by you or your
Representatives, (b) was available to you on a nonconfidential basis prior to
its disclosure by the Company, or (c) becomes available to you on a
nonconfidential basis from a person other than the Company who is not
otherwise known to you to be bound by a confidentiality agreement with the
Company or its Representatives, or is not otherwise known to you to be
prohibited from transmitting the information to you. As used in this letter,
the term "person" shall refer to any individual, corporation, company,
partnership, trust, limited liability company or other entity.

Unless otherwise agreed to in writing by the Company, you agree (a)
except as required by applicable law, regulation or legal process, to keep
all Proprietary Information confidential and (except as described in the next
paragraph) not to disclose or reveal any Proprietary Information to any other
person, including any of your Representatives, except that you may disclose
the Proprietary Information to those of your Representatives who are
specifically involved in, and who need to know such information for the
purpose of, evaluating the Transaction (the "Access Employees"), provided
that you cause those persons to observe the terms of this letter agreement,
and (b) not to use Proprietary Information for any purposes other than in
connection with the

<PAGE>

DCR
- - -------------------------------------------------------------------------------
DUFF & PHELPS CREDIT RATING CO.

FIMALAC 55 EAST MONROE STREET
JANUARY 25, 2000 CHICAGO, ILLINOIS 60603
PAGE 2 (312) 368-3100
FAX (312) 422-4121

evaluation and consummation of the Transaction. You will be responsible for
any breach of the terms hereunder by you or your Representatives and for the
compliance with the terms of this letter by the Access Employees. Proprietary
Information may not be photocopied, reproduced or distributed to persons
other than Access Employees at any time, in whole or in part, without the
prior written consent of the Company.

If you or any of your Representatives are requested pursuant to, or
required by, applicable law or regulation or by legal process to disclose
any Proprietary Information, we are informing you that the Company may wish
to seek an appropriate protective order. You agree in the event of any such
request or requirement that you will provide the Company, as promptly as the
circumstances reasonably permit, with notice of such request or requirement
and, unless a protective order or other appropriate relief is previously
obtained, the Proprietary Information, subject to such request, may be
disclosed pursuant to and in accordance with the terms of such request or
requirement, provided that you shall use your reasonable best efforts to
limit any such disclosure to the terms of such request or requirement.

Unless otherwise required by applicable law, regulation or legal process,
neither you nor any of your Representatives will, without the prior written
consent of the Company, disclose to any person (other than Access
Employees) any information about the Transaction, or the terms, conditions or
other facts relating thereto, including, but not limited to, the fact that
discussions are taking place with respect thereto, or the status thereof, or
the fact that the Proprietary Information has been made available to you.

You agree that all inquiries, requests for information and other
communications with the Company shall be made through Paul McCarthy or Phil
Maffei, unless previously authorized by the Company in writing.

At any time, upon the request of the Company, you will promptly destroy
or deliver to the Company all of the Proprietary Information delivered to
you by the Company and any copies and reproductions thereof. All summaries,
analyses or extracts thereof or based thereon in your possession or in the
possession of any of the Access Employees will be destroyed.

Although the Proprietary Information contains information which the
Company believes to be relevant for the purpose of your evaluation of the
Transaction, none of the Company and its Representatives make any
representation or warranty as to the accuracy or completeness of the
Proprietary Information. Neither the Company, its affiliates or
Representatives, nor any of their respective officers, directors, employees,
agents or controlling persons shall have any liability to you or any of your
Representatives relating to or arising from the use of the Proprietary

<PAGE>

DCR
- - -------------------------------------------------------------------------------
DUFF & PHELPS CREDIT RATING CO.

FIMALAC 55 EAST MONROE STREET
JANUARY 25, 2000 CHICAGO, ILLINOIS 60603
PAGE 3 (312) 368-3100
FAX (312) 422-4121

Information. You shall be entitled to rely solely on the representations and
warranties made to you in a definitive agreement, when, as and if executed
and subject to limitations and restrictions as may be specified in such
agreement.

Without prejudice to the rights and remedies otherwise available to the
Company, the Company shall, in addition to all other remedies available at
law or in equity, be entitled to equitable relief by way of injunction if you
or any of your Representatives breach or threaten to breach any of the
provisions of this letter agreement.

It is further understood and agreed that no failure or delay by the
Company in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any right,
power or privilege hereunder.

You agree that without prior written consent of the Company, you will
not for a period of one year from the date hereof (i) acquire, or agree to
acquire, directly or indirectly, by purchase or otherwise, any voting
securities of the Company, or direct or indirect rights or options to acquire
any voting securities of the Company, (ii) make, or in any way participate
directly or indirectly, in any "solicitation" of any "proxy" to vote (as such
terms are used in the proxy rules of the Securities and Exchange Commission)
or seek to advise or influence any person or entity with respect to the
voting of any voting securities of the Company, (iii) form, join or in any
way participate, directly or indirectly, in a "group" within the meaning of
Section 13(d) (3) of the Securities Exchange Act of 1934, as amended, with
respect to any voting securities of the Company, or (iv) otherwise act, alone
or in concert with others, directly or indirectly, to seek control of the
management, board of directors, or policies of the Company; PROVIDED that, in
the event that, after the date hereof, we waive any of our rights pursuant to
this paragraph for any other party who has executed or hereafter executes a
similar letter agreement in connection with a Transaction, we will promptly
inform you of such waiver and give you the option of a waiver to the same
extent and on the same terms that we have given to such other party and,
PROVIDED, FURTHER, that if the Board of Directors of the Company approves a
Transaction with any person, then you shall be permitted to (x) seek, (y)
offer to negotiate with or (z) make a statement or proposal to the Company or
Company representatives, in each case, to acquire more than 50% of the
outstanding Common Stock of the Company or all or substantially all of the
assets of the Company, provided that the offer is at a price and on terms
that are financially superior to the price and terms of the transaction
proposed by such other person.

The Company and you agree that, without the prior written consent of the
other party hereto, neither the Company nor you will for a period of six
months from the date hereof directly

<PAGE>

DCR
- - -------------------------------------------------------------------------------
DUFF & PHELPS CREDIT RATING CO.

FIMALAC 55 EAST MONROE STREET
JANUARY 25, 2000 CHICAGO, ILLINOIS 60603
PAGE 4 (312) 368-3100
FAX (312) 422-4121

or indirectly solicit for employment or employ any person who is now employed
by the other party hereto and who is identified by the Company or you as a
result of the evaluation or otherwise in connection with the Transaction
provided, however, that neither the Company nor you shall be prohibited from
employing any such person who contacts the Company or you on his or her own
initiative and without any direct or indirect solicitation by the Company or
you.

You agree that unless and until a definitive agreement between the
Company and you with respect to the transaction has been executed and
delivered, neither the Company nor you will be under any legal obligation of
any kind whatsoever with respect to such a transaction by virtue of this or
any written or oral expression or communication by any of the Company's, or
your directors, officers, employees, agents, controlling persons or any other
Representatives or advisors thereof, except, in the case of this letter, for
the matters specifically agreed to herein. The agreement set forth in this
paragraph may be modified or waived only by a separate writing by the Company
and you expressly modifying such agreement.

You agree that the Company reserves the right, in its sole and absolute
discretion, to reject any or all proposals, to decline to furnish further
Proprietary Information and to terminate discussions and negotiations with
you at any time. The exercise by the Company of these rights shall not affect
the enforceability of any provision of this agreement.

* * *
<PAGE>

FIMALAC
JANUARY 25, 2000
PAGE 5

This letter agreement shall be governed by and interpreted in accordance
with the internal laws of the State of New York. If you agree in accord with
the foregoing, please have this letter agreement executed on your behalf and
return the duplicate copy to the undersigned.

Very truly yours,

DUFF & PHELPS CREDIT RATING CO.

By: /s/ Paul McCarthy
------------------------------------
Name: Paul McCarthy
Title: Chairman and Chief Executive Officer

Accepted and Agreed
As of the date
first written above:

FIMALAC

By: /s/ Veronique Morali
------------------------------------
Name: Veronique Morali
Title: Managing Director

<PAGE>

Exhibit (e)(2)

DCR
- - -------------------------------------------------------------------------------
DUFF & PHELPS CREDIT RATING CO.

ERNEST T. ELSNER 55 EAST MONROE STREET
EXECUTIVE VICE PRESIDENT CHICAGO, ILLINOIS 60603
GENERAL-COUNSEL (312) 368-3100
(312) 368-3175 FAX (312) 368-3334

February 29, 2000

Ms. Veronique Morali
FIMALAC
97, rue de Lille
Paris France 75007

Dear Ms. Morali:

In consideration of the efforts of FIMILAC S.A. ("FIMILAC") to move
forward with negotiations with Duff & Phelps Credit Rating Co. ("DCR")
regarding a possible transaction involving a possible acquisition of control
of DCR by FIMILAC ("the Proposed Transaction"), please be advised that DCR
intends to engage in good faith negotiations with FIMILAC with respect to a
definitive agreement relating to the Proposed Transaction. Furthermore, DCR
is not presently engaged in any negotiations with respect to any possible
acquisition of control of DCR by a third party other than FIMILAC ("Other
Business Combination") and, while we have (as you know) previously had
discussions with others with respect to Other Business Combinations, prior to
March 7, 2000, we will not take any further steps to solicit proposals with
respect to an Other Business Combination while we are negotiating the
Proposed Transaction with FIMILAC. In the event that DCR is contacted by a
third party with respect to an Other Business Combination, DCR shall promptly
advise FIMILAC of any such proposal.

Very truly yours,

DUFF & PHELPS CREDIT RATING CO.

By: /s/ Ernest T. Elsner
------------------------------------
Name: Ernest T. Elsner
----------------------------------
Title: Executive Vice President
---------------------------------