Exhibit 10.14
ACNIELSEN XXXXXXXX.XXX
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STOCKHOLDERS AGREEMENT
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SEPTEMBER 22, 1999
ACNIELSEN XXXXXXXX.XXX
STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT is made as of the 22 day of September, 1999
by and among ACNielsen xXxxxxxx.xxx, a Delaware corporation (the "Company"),
ACNielsen Corporation, a Delaware corporation ("ACN") and NetRatings, Inc., a
Delaware corporation ("NetRatings"). (ACN and NetRatings are collectively
referred to as the "Stockholders").
WHEREAS, ACN has previously acquired shares of the Company's Class A
Preferred Stock, par value $.001 per share (the "Class A Preferred").
WHEREAS, NetRatings is purchasing on the date hereof shares of the
Company's Common Stock, par value $.001 per share ("Common Stock").
WHEREAS, the term Shares as used in this Agreement shall refer to any
shares of capital stock of the Company, including the Common Stock, Class A
Preferred and the any Series of Class B Preferred Stock, without par value
(collectively, the "Class B Preferred" and each Series individually a "Class B
Preferred Series"), now owned or subsequently acquired by the Stockholders. The
Class A Preferred and Class B Preferred are collectively referred to herein as
the "Preferred Stock")
WHEREAS, the Stockholders wish to provide for certain rights and
restrictions with respect to their shares of Common Stock, and have agreed to
enter into this Agreement.
WHEREAS, the Company and NetRatings are also entering into an Operating
Agreement (the "Operating Agreement"), a Software License Agreement (the
"License Agreement") and certain other agreements on the date hereof.
NOW, THEREFORE, in consideration of the premises, mutual covenants and
terms hereof, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:
ARTICLE I
RIGHT OF FIRST REFUSAL ON NETRATINGS TRANSFER
1.1 COMPANY RIGHT. If at any time NetRatings desires (or is required)
to sell or transfer in any manner any Shares (as hereinafter defined)
pursuant to the terms of a bona fide offer received from a third party (a
"Buyer"), NetRatings shall submit a written offer to sell such Shares (the
"Offered Shares") to the Company on terms and conditions, including price,
not less favorable to the Company than those on which such Stockholder
proposes to sell such Offered Shares to such third party (the "Offer"). The
Offer shall disclose the identity of the proposed purchaser or transferee,
the number of Offered Shares, the terms of the proposed sale or transfer and
any other material facts relating to the sale or transfer. Within ten (10)
days after receipt of the Offer, the Company shall give notice to NetRatings
of its intent to purchase all or some of the Offered Shares from NetRatings
on the terms and conditions set forth in the Offer.
1.2 ACN'S RIGHTS. If, for any reason whatsoever, the Company shall not
exercise its right to purchase all of the Offered Shares as provided herein,
the Company shall promptly provide to ACN written notice (the "Notice") of
same (which shall include a copy of the written offer provided to the Company
pursuant to Section 1.1 hereof), and then ACN shall have the right to
purchase, on the same terms and conditions set forth in the Offer, any or all
of that portion of the Offered Shares which the Company shall not have agreed
to purchase from NetRatings (all such remaining shares being referred to as
the "Remaining Offered Shares"). ACN shall act upon the Offer as soon as
practicable after receipt from the Company of the Notice and in all events
within fifteen (15) days after receipt thereof. ACN shall have the right to
accept the Offer as to all or part of the Remaining Offered Shares offered
thereby.
1.3 ALL OR NONE. If the Company and ACN, taken together, do not elect
to purchase all of the Offered Shares, then there shall be no right to
purchase shares pursuant to this Section.
1.4 FAILURE TO EXERCISE RIGHTS. In the event that the Company and ACN,
taken together, do not purchase all of the Offered Shares pursuant to and
within time periods set forth above, the Offered Shares may be sold or
transferred by NetRatings at any time within 90 days thereafter, subject to
the conditions set forth in Article II below. Any sale or transfer of Offered
Shares under this Article I shall be at not less than the price nor upon
other terms and conditions, if any, more favorable to the purchaser or
transferee than those specified in the Offer. Any Offered Shares not sold
within such 90-day period shall thereafter again be subject to the
requirements of this Article I. In the event that Shares are sold or
transferred to ACN pursuant to this subsection, said Offered Shares shall no
longer be subject to this Agreement.
1.5 TRANSFER OF RIGHTS. ACN may assign, in whole or in part, its right
to purchase Offered Shares.
1.6 PROHIBITED TRANSFERS. NetRatings shall not sell, assign, transfer,
pledge, hypothecate, mortgage or dispose of, by gift or otherwise, or in any
way encumber, all or any part of the Shares owned by it during the term of
this Agreement other than in compliance with the terms of this Agreement.
1.7 PERMITTED TRANSFERS. The right of first refusal contained in this
Agreement shall not apply to: (a) any transfer to the Company pursuant
hereto; (b) any sale of Shares in a public offering pursuant to a
registration statement filed by the Company with the Securities and Exchange
Commission; or (c) any transfer of Shares by NetRatings to a wholly-owned
subsidiary of NetRatings.
ARTICLE II
CONDITIONS TO ALL PERMITTED TRANSFERS
2.1 PARTY TO THIS AGREEMENT. Prior to any transfer by a Stockholder,
the transferee must agree to be bound by this Agreement by delivering a duly
executed counterpart of this Agreement to the Company and each Stockholder
and by executing and delivering such other documents as may be reasonably
required by counsel for the Company. Each transferee shall obtain the rights,
benefits and obligations that then inure to transferor as though the
transferee
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were such transferor. The Stockholders hereby agree that, in connection with
any proposed merger or consolidation involving the Company, this Agreement
shall continue, without interruption, to apply to the securities held by such
Stockholders in the entity surviving such merger or consolidation, and such
Stockholders further agree to undertake any amendments to this Agreement as
may be deemed necessary by any Stockholder as a result of such merger or
consolidation.
2.2 COMPLIANCE WITH SECURITIES LAWS. In addition to the restrictions on
transfer of the Shares contained in this Agreement, no transfer of any Shares
shall be made by or on behalf of NetRatings unless the Shares are registered
under the Securities Act pursuant to an effective registration statement
which contemplates the proposed transfer and complies with the
then-applicable regulations, rules and administrative procedures and
practices of the Securities and Exchange Commission, and are registered or
qualified in accordance with any applicable state securities laws,
regulations, rules and administrative procedures and practices, or unless the
proposed transfer is exempt from registration under applicable securities
laws, in which case the Company may require a written legal opinion to such
effect satisfactory to its counsel from a proposed transferee prior to
permitting such transfer.
2.3 LEGEND.
2.3.1 As long as this Agreement is effective, each certificate
representing Shares now held or hereafter acquired by any Stockholder shall
bear on the back thereof conspicuous legends as follows (or such equivalent
legends as counsel for the Company may approve), in addition to any legend
imposed pursuant to any other agreement or required to comply with applicable
law:
"The securities represented by this certificate are restricted
by the terms of a Stockholders Agreement dated as of September
22, 1999 among the Company and its stockholders which contains
provisions affecting the rights and obligations of the holder
of the Shares and restrictions upon the transfer of the
Shares. A copy of the Agreement may be inspected at the
Company's principal office. Any transfer of the securities
represented by this certificate in violation of the Agreement
is null and void.
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or
applicable state securities laws and may not be sold,
assigned, transferred, pledged or otherwise disposed of except
in compliance with the requirements of such Act and state
laws."
2.3.2 In the event that any Shares cease to be subject to the
terms of this Agreement, the Company shall, upon written request of the
holder thereof, issue to such holder a new certificate representing such
Shares without the first paragraph of the legend required by Section 2.3.1
hereof. In the event that any Shares shall be registered under the Securities
Act in accordance with Section 2.2 hereof, then the Company shall, upon the
written request of the holder thereof, issue to such holder a new certificate
representing such Shares without the second
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paragraph of the legend required by Section 2.3.1. Notwithstanding Article
VII hereof, the second paragraph of the legend shall remain on certificates
representing shares except as set forth in the preceding sentence.
ARTICLE III
PUT RIGHTS
3.1 In the event (a "Put Event") that the Company has not completed an
initial public offering of its common stock pursuant to a registration
statement which has become effective under the Securities Act of 1933
("Initial Public Offering"), on or prior to the fifth anniversary of the date
of this Agreement (the "Put Trigger Date") then at any time after the Put
Trigger Date NetRatings shall have the right to sell to the Company (the "Put
Option"), all, but not less than all, of the Shares owned by NetRatings or
its permitted transferees (such Shares to be put by NetRatings hereunder
being referred to as the "Put Shares") at a price per share to be determined
by the Board of Directors of the Company, which price shall reflect the Board
of Directors' good faith estimate of the current fair market value of the
Shares (without giving effect to any discount to reflect the fact that the
Shares represent a minority interest in the Company). If NetRatings elects to
exercise the Put Option, it shall do so by delivering written notice (the
"Put Notice") to the Company within thirty (30) business days following (i)
the Put Trigger Date, or (ii) any anniversary of the Put Trigger Date. The
Company shall notify ACN and NetRatings of the fair market value so
determined within twenty (20) business days after receipt of a Put Notice. If
NetRatings disputes the fair market value set by the Board of Directors by
giving written notice (a "Dispute Notice") to the Company within twenty (20)
business days (the "Dispute Period") after being informed of the fair market
value determination, the fair market value (without giving effect to any
discount to reflect the fact that the Shares represent a minority interest in
the Company) shall be determined by an investment banking firm of national
reputation which shall be selected by the Board of Directors not later than
thirty (20) business days following receipt of the Dispute Notice, with the
cost of such determination to be divided equally between the Company and
NetRatings, and which determination shall be final and binding upon the
parties. If the Board of Directors does not receive a Dispute Notice within
the Dispute Period, the decision of the Board of Directors as to fair market
value shall be final and binding on the parties.
3.2 The closing of any purchase of Put Shares shall take place at the
principal office of the Company within ten (10) business days after the final
determination of fair market value as provided in Section 3.1. At such
closing, NetRatings shall deliver to the Company, against payment for the Put
Securities in cash (by delivery of a certified check or wire transfer payable
to NetRatings) certificates representing, together with stock powers duly
endorsed with respect to, the Put Securities, free and clear of all claims,
liens and encumbrances (other than pursuant to securities laws or this
agreement).
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ARTICLE IV
BOARD REPRESENTATION
As long as NetRatings or any subsidiary of NetRatings holds at least
5% of the Company's issued and outstanding Common Stock, ACN agrees to vote
its Shares in favor of one (1) candidate for director nominated by NetRatings
or, if the required number of shares of Common Stock is held by a subsidiary
of NetRatings, such subsidiary. If the director nominated by NetRatings and
elected as provided above ("NRI Director") resigns after his or her election
to the Board of Directors, is removed or is otherwise unable to serve for any
reason prior to the expiration of his or her term as a director, NetRatings
(or its subsidiary if the subsidiary has acquired the shares owned by
NetRatings) shall notify the Board thereof and of the identity of its new
nominee. NetRatings (or its subsidiary if the subsidiary has acquired the
shares owned by NetRatings) shall have the right to designate the individual
who will fill the vacancy as the NRI Director. ACN will request that the
directors who were nominated by ACN promptly appoint such nominee to be a
member of the Board of Directors and use reasonable commercial efforts to
cause them to do so or will vote its Shares to vote to elect such nominee as
a member of the Board of Directors.
ARTICLE V
FUNDING
5.1 INITIAL ROLL-OUT COSTS. Funding of Initial Roll-Out Costs (as such
term is defined in the License Agreement) shall be the responsibility solely
of ACN. ACN may fund Initial Roll-Out Costs by (i) making capital
contributions to the Company, for which ACN shall receive such number of
shares of Class A Preferred as shall have an aggregate Stated Value in an
amount equal to the amount of the capital contribution and with the terms set
forth in the Form of Certification of Designation which is annexed hereto as
Exhibit A; (ii) making loans to ACNSub, in such manner that Net Ratings shall
not (directly or indirectly) bear any principal, interest or other costs
arising from such loans and which are not secured by any of the assets of the
Company or a pledge of ACN's stock in the Company; or (iii) by arranging
third party loans which are not secured by any of the assets of the Company
or a pledge of ACN's stock in the Company. If any Initial Roll-Out Cost is
funded by third party loans, the principal and interest and all costs
associated with such loans ("Loan Obligations") will be contributed to the
Company by ACN and ACN shall in any event be responsible to contribute
sufficient funds to cause all such Loan Obligations to be repaid prior to the
consummation of any Initial Public Offering. If any Initial Roll-Out Cost is
funded by loans from ACN, the principal and interest and all costs associated
with such loans will be contributed to the Company as capital prior to the
consummation of any Initial Public Offering. The parties agree that the
failure to repay the third party loans or forgive the loans from ACN is a
material inducement for NetRatings to enter the Agreement and NetRatings
shall have the right to enforce such obligation against ACN.
5.2 SHARED FUNDING REQUIREMENTS. All funding requirements of the
Company which are not Initial Roll-Out Costs (the "Shared Funding") shall be
shared by NetRatings and ACN in proportion to their percentage ownership of
voting stock of the Company at the time the funding is made; PROVIDED, that
(i) for a period of two years from the date of this Agreement, unless
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NetRatings notifies ACN of its intention to begin funding its portion of the
Shared Funding prior to the expiration thereof (the "Initial Funding
Period"), ACN shall fund the Shared Funding Requirements by (A) making
capital contributions to the Company, for which ACN shall receive shares of
Class A Preferred with an aggregate Stated Value equal to the amount of the
capital contribution, and with the terms set forth in the Form of Certificate
of Designation attached as Exhibit A; (B) making loans to the Company which
are not secured by any of the assets of the Company or a pledge of ACN's
stock in the Company, which loans shall mature at the end of the Initial
Funding Period and accrue interest at a fixed rate based upon the prime rate
published in the Wall Street Journal as of the date the loan is made; or (C)
arranging third party loans which are not secured by any of the assets of the
Company or a pledge of ACN's stock in the Company; and (ii) NetRatings shall
reimburse ACN within twenty (20) Business Days after expiration of the
Initial Funding Period for NetRatings' proportionate share of any capital
contributions provided to the Company by ACN during the Initial Funding
Period, in an amount equal to (i) the amount of such capital contributions
plus (ii) accrued interest at a fixed rate based upon the prime rate
published by the Wall Street Journal as of the date the capital contribution
was made, and upon receipt of such reimbursement, ACN shall return to the
Company for cancellation Class A Preferred with an aggregate Stated Value
equal to the amount of the Capital Contribution so reimbursed, without ACN
receiving any consideration therefor.
5.3 FUNDING REQUIREMENTS AFTER INITIAL FUNDING PERIOD.
5.3.1 CAPITAL CALL. After the Initial Funding Period, the Company
may from time to time by notice to the Stockholders (a "Capital Call")
require capital contributions to be made to the Company in such amounts as
the Company's Board of Directors may determine. For any Capital Call made
after the Initial Funding Period, each Stockholder shall pay, or cause to be
paid, its respective capital contributions (the "Required Payments" and each
a "Required Payment") with respect to the Capital Call within thirty (30)
business days after the Capital Call is made or such other period, (but not
less than thirty (30) business days), as the Board of Directors may decide.
Capital contributions shall be made, or caused to be made, by the
Stockholders in proportion to their percentage ownership of voting stock of
the Company on the date the Board of Directors approves the Capital Call. If
both Stockholders make their Required Payments, the Company need not issue
any additional securities in exchange therefore.
5.3.2 If either Stockholder ("Defaulting Party") fails to make, or
cause to be made, its Required Payment with respect to a Capital Call as
required by Section 6.3.1, then whichever Stockholder is not the Defaulting
Party shall be issued shares of a Class B Preferred Series with an aggregate
Stated Value equal to the amount of such capital contribution. Such Class B
Preferred Series shall have the terms set forth in the form of Certificate of
Designation which is annexed hereto as Exhibit B.
5.4 FUNDING REQUESTS BY NETRATINGS.
5.4.1 Following the third anniversary of this Agreement,
NetRatings shall have the right to require the Company to make a Capital
Call, in the following manner. NetRatings shall request by written notice
(the "NetRatings Capital Call Notice") that the Company make a Capital Call.
The NetRatings Capital Call Notice shall specify the proposed use of the
capital that NetRatings proposes be raised by such Capital Call. The Company
shall not be required to
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make such Capital Call unless NetRatings shall demonstrate to the reasonable
satisfaction of the Board of Directors that the capital that NetRatings
requests be contributed is necessary in order for the Company to exploit
commercial opportunities that would be in the best interests of the Company
and the Stockholders and that the Company would not be able to exploit such
commercial opportunities effectively without the contribution of such
capital. In the event that the Board of Directors shall decline to make such
Capital Call, NetRatings shall have the right to dispute such determination,
through the dispute resolution procedures set forth in Section 8.2 of the
Operating Agreement. The Stockholders agree that the Company shall not be
required to make such Capital Call as a result of such dispute resolution
unless the standard set forth in the preceding sentence is satisfied.
5.4.2 In the event that a Capital Call shall be made as a result
of the procedures set forth in Section 5.4.1, the Stockholders shall each
pay, or cause to be paid, their respective capital contributions (the
"Required Payments" and each a "Required Payment") with respect to the
Capital Call within thirty (30) business days after the Capital Call is made
or such other period (but not less than thirty (30) business days), as the
Board of Directors may decide. Capital contributions shall be made, or caused
to be made, by the Stockholders in proportion to their percentage ownership
of voting stock of the Company on the date of the Capital Call. If both
Stockholders make their Required Payments, the Company need not issue any
additional securities in exchange therefore.
5.4.3 If either Stockholder ("Defaulting Party") fails to make, or
cause to be made, its Required Payment with respect to a Capital Call as
required by Section 5.4.2, then whichever Stockholder is not the Defaulting
Party shall be issued such number of shares of Class B Preferred as shall
have an aggregate Stated Value equal to the amount of such capital
contribution. Such Class B Preferred stock shall have the terms set forth in
the form of Certificate of Designation which is annexed hereto as Exhibit B.
Notwithstanding the foregoing, if ACN shall decline to participate in such
Capital Call and if the issuance of Class B Preferred to NetRatings would
result in the inability of ACN to include the Company in ACN's consolidated
tax returns for Federal income tax purposes during either of the two years
following the third anniversary of the date of this Agreement ACN shall have
the right to cause the Company to issue convertible debt to NetRatings in
lieu of such Class B Preferred, such debt to be (i) unsecured, (ii) have a
maturity of no more than two years, (iii) be convertible into Common Stock at
a conversion price based on the fair market value of the Common Stock on the
date on which the capital contribution was made as determined in accordance
with the procedures set forth in Section 3.1 hereof and (iv) shall bear
interest at a fixed rate based upon the prime rate published by the Wall
Street Journal as of the date the loan is made.
5.4.4 The Company shall issue a quarterly report to the
Stockholders within thirty (30) days of the end of any calendar quarter
setting forth what securities were issued during the prior quarter for any
monies received during the prior quarter, what loans were received from ACN
or a third party to fund the Initial Roll-Out Costs or the Shared Funding and
a statement setting forth any Initial Roll-Out Costs and other costs incurred
in the period covered by such report. Upon request of a Stockholder, the
Company will provide a copy of any document setting forth the sale of such
securities or the receipt of such loan.
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5.4.5 The Series A Preferred and the Series B Preferred shall be
issued solely for the purposes set forth in this Article V. ACN agrees not to
vote in favor of any amendment to the terms of the Series A Preferred or
Series B Preferred or Section 11 (regarding bankruptcy) and Section 12
(regarding acquisitions) of the Certificate of Incorporation without the
affirmative vote of each director holding office who was nominated at the
request of NetRatings, Inc. or its permitted transferees and each director
holding office who was nominated at the request of the holders of Preferred
Stock.
ARTICLE VI
STOCK OPTION PLAN
The Stockholders agree that the Company shall adopt, as soon as
practicable after execution of this Agreement, a 1999 Stock Option Plan in a
form reasonably acceptable to NetRatings and ACN, pursuant to which up to 10%
of the Company's outstanding Common Stock on a fully-diluted basis will be
reserved for issuance upon exercise of stock options granted pursuant to such
plan.
ARTICLE VII
TERMINATION
Except as provided in Section 2.3., this Agreement shall expire, and be
of no further force or effect, upon closing of an Initial Public Offering.
ARTICLE VIII
GENERAL PROVISIONS
8.1 GOVERNING LAW. This Agreement shall be governed by the General
Corporation Law of the State of Delaware without regard to choice of law
provisions thereof.
8.2 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
among the parties with respect to the subject matter hereof and supersedes
all prior oral or written agreements and understandings between them or any
of them as to such subject matter.
8.3 AMENDMENT. Except as otherwise expressly provided herein, this
Agreement may be amended only upon the written consent of the Stockholder
against whom this Agreement is sought to be enforced and the Company.
8.4 SUCCESSORS. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective heirs, executors,
legal representatives, successors, and permitted transferees, except as may
be expressly provided otherwise herein.
8.5 INVALIDITY OF PROVISIONS. In the case any one or more of the
provisions contained in this Agreement shall for any reason to be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provision of this
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Agreement and such invalid, illegal and unenforceable provision shall be
reformed and construed so that it will be valid, legal, and enforceable to
the maximum extent permitted by law.
8.6 NOTICE. All notices and other communications required or permitted
under this Agreement shall be mailed by registered or certified mail, postage
prepaid, or otherwise delivered by hand or by messenger, addressed (a) if to
a Stockholder, at such Stockholder's address as such Stockholder shall have
furnished to the Company in writing, or (b) if to the Company, one copy
should be sent to its offices and addressed to the attention of the
President, or at such other address as the Company shall have furnished to
the Investor.
Each such notice or other communication shall for all purposes of this
Agreement be treated as effective or having been given when delivered if
delivered personally, or, if sent by mail, at the earlier of its receipt or
72 hours after the same has been deposited in a regularly maintained
receptacle for the deposit of the United States mail, addressed and postage
prepaid as aforesaid.
8.7 NO WAIVER. Either party's failure to enforce any provision or
provisions of this Agreement shall not in any way be construed as a waiver of
any such provision or provisions, nor prevent that party thereafter from
enforcing each and every other provision of this Agreement. The rights
granted to the parties herein are cumulative and shall not constitute a
waiver of any party's right to assert all other legal remedies available to
it under the circumstances.
8.8 SPECIFIC PERFORMANCE. The rights of the parties under this
Agreement are unique and, accordingly, the parties shall, in addition to such
other remedies as may be available to any of them at law or in equity, have
the right to enforce their rights hereunder by actions for specific
performance to the extent permitted by law.
8.9 CONSIDERATION. The Stockholders agree upon request to execute any
further documents or instruments necessary or desirable to carry out the
purposes or intent of this Agreement.
8.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
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The foregoing Stockholders Agreement is hereby executed as of the day
and year first written above.
"COMPANY" ACNIELSEN XXXXXXXX.XXX
By:
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Name:
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Title:
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"STOCKHOLDERS" ACNIELSEN CORPORATION
By:
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Name:
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Title:
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NETRATINGS, INC.
By:
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Name:
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Title:
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SIGNATURE PAGE OF THE STOCKHOLDERS AGREEMENT
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