Exhibit 99 (c)(1)
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AGREEMENT AND PLAN OF MERGER
among
VNU USA, INC.
NINER ACQUISITION, INC.
and
XXXXXXX MEDIA RESEARCH, INC.
Dated as of August 15, 1999
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TABLE OF CONTENTS
Page
ARTICLE I THE OFFER............................................................................2
Section 1.1 THE OFFER..............................................................2
Section 1.2 OFFER DOCUMENTS........................................................4
Section 1.3 COMPANY ACTIONS........................................................5
Section 1.4 DIRECTORS..............................................................7
ARTICLE II THE MERGER...........................................................................8
Section 2.1 THE MERGER.............................................................8
Section 2.2 CLOSING................................................................9
Section 2.3 EFFECTIVE TIME.........................................................9
Section 2.4 EFFECTS OF THE MERGER..................................................9
Section 2.5 CERTIFICATE OF INCORPORATION; BY-LAWS..................................9
Section 2.6 DIRECTORS; OFFICERS....................................................9
ARTICLE III EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS; EX
CHANGE OF CERTIFICATES..............................................................10
Section 3.1 EFFECT ON CAPITAL STOCK...............................................10
Section 3.2 OPTIONS; STOCK PLANS..................................................11
Section 3.3 PAYMENT FOR SHARES....................................................15
ARTICLE IV REPRESENTATIONS AND WARRANTIES......................................................17
Section 4.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY...........................17
Section 4.2 REPRESENTATIONS AND WARRANTIES OF PARENT AND
PURCHASER...............................................................36
ARTICLE V CONDUCT OF BUSINESS OF THE COMPANY..................................................39
Section 5.1 CONDUCT OF BUSINESS OF THE COMPANY....................................39
ARTICLE VI ADDITIONAL COVENANTS................................................................42
Section 6.1 THE COMPANY STOCKHOLDERS MEETING; PREPA
RATION OF THE PROXY STATEMENT; SHORT-FORM
MERGER................................................................42
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Section 6.2 ACCESS TO INFORMATION; NOTIFICATION OF CERTAIN MATTERS................43
Section 6.3 REASONABLE BEST EFFORTS...............................................44
Section 6.4 PUBLIC ANNOUNCEMENTS..................................................44
Section 6.5 NO SOLICITATION.......................................................45
Section 6.6 CONSENTS, APPROVALS AND FILINGS.......................................46
Section 6.7 EMPLOYEE BENEFIT PLANS................................................47
Section 6.8 INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE...................48
Section 6.9 AGREEMENTS WITH NETRATINGS, INC.......................................51
Section 6.10 CERTAIN TAX MATTERS...................................................51
ARTICLE VII CONDITIONS PRECEDENT................................................................51
Section 7.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER............51
ARTICLE VIII TERMINATION.........................................................................52
Section 8.1 TERMINATION...........................................................52
Section 8.2 EFFECT OF TERMINATION.................................................55
ARTICLE IX GENERAL PROVISIONS..................................................................57
Section 9.1 FEES AND EXPENSES.....................................................57
Section 9.2 CERTAIN DEFINITIONS...................................................58
Section 9.3 AMENDMENT AND MODIFICATION............................................59
Section 9.4 EXTENSION; WAIVER.....................................................59
Section 9.5 NOTICES...............................................................59
Section 9.6 INTERPRETATION........................................................61
Section 9.7 ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES........................61
Section 9.8 GOVERNING LAW.........................................................62
Section 9.9 ASSIGNMENT............................................................62
Section 9.10 ENFORCEMENT...........................................................62
Section 9.11 SEVERABILITY..........................................................63
Section 9.12 COUNTERPARTS..........................................................63
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of August 15, 1999, by and among
VNU USA, INC., a New York corporation ("Parent"), NINER ACQUISITION, INC., a
Delaware corporation and wholly owned subsidiary of Parent ("Purchaser"), and
XXXXXXX MEDIA RESEARCH, INC., a Delaware corporation (the "Company").
WHEREAS, the respective Boards of Directors of Parent, Purchaser and
the Company have determined that it would be advisable and in the best interests
of their respective stockholders for Parent to acquire the Company upon the
terms and subject to the conditions set forth in this Agreement;
WHEREAS, to effectuate the acquisition, it is proposed that Purchaser
commence a cash tender offer to purchase all of the issued and outstanding
shares of common stock, par value $.01 per share (the "Common Stock"), of the
Company, including the associated Preferred Stock Purchase Rights (the "Rights"
and, together with the Common Stock, the "Shares") issued pursuant to a Rights
Agreement, dated as of October 15, 1996, between the Company and First Chicago
Trust Company of New York (the "Rights Agreement"), on the terms and subject to
the conditions set forth in this Agreement and the Offer Documents (as defined
in Section 1.2 hereof);
WHEREAS, to effectuate the acquisition, it is further proposed that
following consummation of the Offer (as defined in Section 1.1 hereof),
Purchaser will be merged with and into the Company, with the Company continuing
as the surviving corporation in such merger (the "Merger");
WHEREAS, the Board of Directors of the Company has, by the unanimous
vote of all directors present (i) determined that the Offer and the Merger are
fair to and in the best interests of the Company and its stockholders; (ii)
approved this Agreement and the transactions contemplated hereby, including the
Offer and the Merger, in accordance with the General Corporation Law of the
State of Delaware (the "DGCL"), and (iii) declared the advisability of this
Agreement and resolved to recommend that the holders of the Shares accept the
Offer and adopt this Agreement; and
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and other terms contained in this
Agreement, the parties hereto, intending to be legally bound hereby, agree as
follows:
ARTICLE I
THE OFFER
Section 1.1 THE OFFER. (a) Provided that none of the events set forth
in Exhibit A hereto shall have occurred and be continuing, on the fifth business
day after the public announcement by Parent and the Company of the execution and
delivery of this Agreement (counting the business day on which such announcement
is made), Purchaser shall commence (within the meaning of Rule 14d-2 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")), an offer to
purchase any and all outstanding Shares, including the associated Rights, at a
price of $37.75 per share, net to the seller in cash (as paid pursuant to the
Offer, the "Offer Consideration"). The obligation of Parent and Purchaser to
commence the Offer, to consummate the Offer and to accept for payment and pay
for Shares validly tendered in the Offer and not withdrawn shall be subject to
the conditions set forth in Exhibit A hereto.
(b) On the terms and subject to the prior satisfaction or
waiver of the conditions of the Offer, Parent shall provide funds to Purchaser
and Purchaser shall accept for payment and pay for any and all Shares validly
tendered and not withdrawn pursuant to the Offer as soon as practicable after
the expiration date thereof.
(c) Without the prior written consent of the Company,
Purchaser shall not (i) change the form of consideration paid, decrease the
Offer Consideration or decrease the number of Shares sought pursuant to the
Offer, (ii) extend the expiration date of the Offer beyond the initial
expiration date of the Offer (which shall be the 20th business day after
commencement of the Offer), except (A) as required by applicable law, (B) that
if, immediately prior to the expiration date of the Offer (as it may be
extended), the Shares tendered and not withdrawn pursuant to the Offer
constitute at least 80% but less than 90% of the outstanding Shares, Purchaser
may, in its sole discretion, extend the Offer for one or more periods not to
exceed an aggregate of five business days, notwithstanding that all conditions
to the Offer are satisfied as of such expiration date of the Offer, (C) that if
any condition to the Offer has not been satisfied or waived, Purchaser may, in
its sole discretion, extend the expiration date of the Offer for one or more
periods (not in excess of 10 business days each) but in no event later than
December 22, 1999, (D) that if Parent reason ably and in good faith believes,
based on the written advice of counsel to Parent, that legislation, Treasury
regulations or any other authoritative pronouncement (in proposed
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form or otherwise) is about to be issued or enacted with a retroactive effective
date, and such legislation, regulations or pronouncement would have a Material
Adverse Effect on the Company as a result of the transactions contemplated by
this Agreement, Purchaser may, in its sole discretion, pending the issuance of
such legislation, regulations or pronouncement, extend the expiration date of
the Offer for one or more periods (not in excess of 10 business days each) until
the earlier of (x) the date Parent notifies the Company of its intent to proceed
with the Offer notwithstanding that such regulations or pronouncement have not
been issued, (y) five business days after the issuance of such regulations or
pronouncement, or (z) December 15, 1999, or (E) as provided in the following
sentences of this Section 1.1(c), (iii) waive the condition (the "Minimum
Condition") that there shall be validly tendered and not withdrawn prior to the
time the Offer expires a number of Shares which, together with the Shares then
owned by Parent, constitutes at least a majority of the Shares outstanding on a
fully-diluted basis on the date of purchase ("on a fully-diluted basis" meaning
the number of Shares outstanding, together with the Shares which the Company may
be required to issue pursuant to warrants, options or obligations outstanding at
that date under employee stock or similar benefit plans or otherwise whether or
not vested or then exercisable), (iv) waive the condition relating to the
expiration of the waiting period under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 0000 (xxx "XXX Xxx"), the condition relating to the opinion
of counsel to be delivered to the Company and IMS Health Incorporated or the
condition relating to the non-termination of this Agreement, (v) amend any term
or other condition of the Offer in any manner adverse to holders of Shares or
(vi) impose any additional condition to the Offer; provided, however, that,
except as set forth above and subject to applicable legal requirements,
Purchaser may waive any condition to the Offer in its sole discretion; and
provided, further, that the Offer may be extended in connection with an increase
in the consideration to be paid pursuant to the Offer so as to comply with
applicable rules and regulations of the United States Securities and Exchange
Commission (the "SEC"). If the Offer shall not have been consummated at the
scheduled expiration thereof due to the failure to satisfy (i) any of the
conditions to the Offer set forth in clause (vi)(a) or (vi)(d) of Exhibit A, or
(ii) the condition to the Offer relating to the expiration of the waiting period
under the HSR Act, Parent will, at the request of the Company, cause Purchaser
to extend the expiration date of the Offer for one or more periods (not in
excess of 10 business days each) but in no event later than December 22, 1999.
If the Offer shall not have been consummated at the scheduled expiration thereof
due to the failure to satisfy the condition relating to the Works' Council,
Parent will, at the request of the Company, cause Purchaser to extend the
expiration date of the Offer for one or more periods (not in excess of 10
business days each) but in no event later than April 7, 2000. If the Company
reasonably and in good faith believes,
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based on the written advice of counsel to the Company, that legislation,
Treasury regulations or any other authoritative pronouncement (in proposed form
or otherwise) is about to be issued or enacted with a retroactive effective
date, and such regulations or pronouncement would have a Material Adverse Effect
on the Company as a result of the transactions contemplated by this Agreement,
Parent will, at the request of the Company, cause Purchaser to extend the
expiration date of the Offer for one or more periods until the earlier of (i)
the date the Company notifies the Parent of the Company's intent to proceed with
the Offer notwithstanding that such regulations or pronouncement has not been
issued, or (ii) five business days after the issuance of such regulations or
pronouncement, but in no event shall the Company be entitled, pending the
issuance of such legislation, regulations or pronouncement, to request that
Parent cause Purchaser to extend the expiration date of the Offer beyond
December 15, 1999.
Section 1.2 OFFER DOCUMENTS. (a) As soon as practicable on the date of
commencement of the Offer, Parent and Purchaser shall file or cause to be filed
with the SEC a Tender Offer Statement on Schedule 14D-1 (the "Schedule 14D-1")
with respect to the Offer which shall contain the offer to purchase and related
letter of transmittal and other ancillary documents and instruments pursuant to
which the Offer will be made (collectively, and with any supplements or
amendments thereto, the "Offer Documents"). The Company will promptly supply to
Parent and Purchaser in writing, for inclusion in the Offer Documents, all
information concerning the Company required under the Exchange Act and the rules
and regulations thereunder to be included in the Offer Documents.
(b) The Offer Documents will comply in all material respects
with the provisions of applicable federal securities laws and, on the date filed
with the SEC and on the date first published, sent or given to the Company's
stockholders, shall not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading, except that no representation is made by Parent or
Purchaser with respect to information supplied by the Company in writing for
inclusion in the Offer Documents. Each of Parent and Purchaser further agrees to
take all steps necessary to cause the Offer Documents to be filed with the SEC
and to be disseminated to holders of Shares, in each case as and to the extent
required by applicable federal securities laws. Each of Parent, Purchaser and
the Company shall promptly correct any information provided by them for use in
the Offer Documents if and to the extent that such information shall be or have
become false or misleading in any material respect, and Parent and Purchaser
shall take all lawful action necessary to cause the Offer Documents as so
4
corrected to be filed promptly with the SEC and to be disseminated to holders of
Shares as and to the extent required by applicable law. The Company and its
counsel shall be given a reasonable opportunity to review and comment on the
Offer Documents and any amendments thereto prior to the filing thereof with the
SEC. Parent and Purchaser agree to provide the Company and its counsel any
comments Parent, Purchaser or their counsel may receive from the SEC or its
staff with respect to the Offer Documents promptly after the receipt of such
comments.
Section 1.3 COMPANY ACTIONS. (a) The Company hereby approves of and
consents to the Offer and represents and warrants that (i) its Board of
Directors (at a meeting duly called and held) has by the unanimous vote of all
directors present (A) determined that each of this Agreement, the Offer and the
Merger are fair to and in the best interests of the Company's stockholders, (B)
approved this Agreement and the transactions contemplated hereby, including the
Offer and the Merger, and such approval is sufficient to render the restrictions
on "business combinations" (as defined in Section 203 of the DGCL) set forth in
Section 203 of the DGCL inapplicable to this Agreement and the transactions
contemplated hereby, including the Offer and the Merger, and (C) declared the
advisability of this Agreement and resolved to recommend acceptance of the Offer
and adoption of this Agreement by the holders of Shares; provided, however, that
prior to the consummation of the Offer, the Board of Directors of the Company
may modify, withdraw or change such recommendation to the extent that the Board
of Directors concludes in good faith, based on the advice of outside counsel,
that such action is reasonably necessary in order for the Board of Directors to
act in a manner consistent with the Board's fiduciary duties under applicable
law, and (ii) Xxxxxx Xxxxxxx & Co., Incorporated has delivered to the Board of
Directors of the Company its opinion that the Offer Consideration to be received
by the holders of Shares in the Offer is fair, from a financial point of view,
to such holders.
(b) The Company shall file with the SEC, as soon as
practicable on the date of commencement of the Offer, a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with any
supplements or amendments thereto, the "Schedule 14D-9") containing the
recommendations of the Board of Directors of the Company in favor of the Offer
and the adoption of this Agreement and the transactions contemplated hereby,
including the Merger; provided, however, that prior to the consummation of the
Offer, the Board of Directors of the Company may modify, withdraw or change such
recommendation to the extent that the Board of Directors concludes in good
faith, based on the advice of outside counsel, that such action is reasonably
necessary in order for the
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Board of Directors to act in a manner consistent with the Board's fiduciary
duties under applicable law. Each of Parent and Purchaser will promptly supply
to the Company in writing, for inclusion in the Schedule 14D- 9, all information
concerning the Parent Designees (as defined in Section 1.4 hereof), as required
by Section 14(f) of the Exchange Act and Rule 14f-1 thereunder, and the Company
shall include such information in the Schedule 14D-9. Parent will promptly
supply to the Company in writing, for inclusion in the Schedule 14D-9, any
information concerning Parent or Purchaser required under the Exchange Act and
the rules and regulations thereunder to be included in the Schedule 14D-9. The
Schedule 14D-9 will comply in all material respects with the provisions of
applicable federal securities laws and, on the date filed with the SEC and on
the date first published, sent or given to the Company's stockholders, shall not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that no representation is made by the Company with respect to
information supplied by Parent or Purchaser in writing for inclusion in the
Schedule 14D-9. The Company further agrees to take all steps necessary to cause
the Schedule 14D-9 to be filed with the SEC and to be disseminated to holders
of Shares, in each case as and to the extent required by applicable federal
securities laws. Each of the Company, Parent and Purchaser shall promptly
correct any information provided by them for use in the Schedule 14D-9 if and to
the extent that such information shall be or have become false or misleading in
any material respect and the Company shall take all lawful action necessary to
cause the Schedule 14D-9 as so corrected to be filed promptly with the SEC and
disseminated to the holders of Shares as and to the extent required by
applicable law. Parent, Purchaser and their counsel shall be given a reasonable
opportunity to review and comment on the Schedule 14D-9 and any amendments
thereto prior to the filing thereof with the SEC. The Company agrees to provide
Parent and its counsel any comments the Company or its counsel receive from the
SEC or its staff with respect to the Schedule 14D-9 promptly after receipt of
such comments.
(c) In connection with the Offer, the Company shall promptly
furnish Parent and Purchaser with mailing labels, security position listings and
all available listings or computer files containing the names and addresses of
the record holders of Shares as of the latest practicable date and shall furnish
Parent and Purchaser with such information and assistance (including updated
lists of stockholders, mailing labels and lists of security positions) as
Parent and Purchaser or their agents may reasonably request in communicating the
Offer to the record and beneficial holders of Shares.
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Section 1.4 DIRECTORS. (a) Promptly after the purchase of and payment
for the Shares by Purchaser pursuant to the Offer, Parent shall be entitled to
designate such number of directors (the "Parent Designees"), rounded up to the
next whole number, on the Company's Board of Directors as is equal to the
product of the total number of directors on such Board (after giving effect to
any increase in the size of such Board pursuant to this Section 1.4) multiplied
by the percentage that the number of Shares beneficially owned by Purchaser at
such time (including Shares so accepted for payment) bears to the total number
of Shares then outstanding; provided that in no event shall the Parent Designees
constitute less than a majority of the entire Board of Directors. In furtherance
thereof, the Company shall, upon the request of Parent, use its reasonable best
efforts promptly either to increase the size of its Board of Directors or 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 or appointed to the
Company's Board of Directors, and the Company shall take all actions available
to the Company to cause the Parent Designees to be so elected or appointed. At
such time, the Company shall, if requested by Parent, also take all action
necessary to cause persons designated by Parent to constitute at least the same
percentage (rounded up to the next whole number) as is on the Company's Board of
Directors of (i) each committee of the Company's Board of Directors, (ii) each
board of directors (or similar body) of each Subsidiary (as defined in Section
9.3 hereof) of the Company and (iii) each committee (or similar body) of each
such board.
(b) The Company's obligation to appoint Parent Designees to
the Company's Board of Directors shall be subject to Section 14(f) of the
Exchange Act and Rule 14f-1 promulgated thereunder. The Company shall promptly
take all actions required pursuant to Section 14(f) of the Exchange Act and Rule
14f-1 promulgated thereunder in order to fulfill its obligations under Section
1.4(a), including mailing to stockholders the information required by such
Section 14(f) and Rule 14f-1 (or including such information in the Schedule
14D-9 initially filed with the SEC and distributed to the stockholders of the
Company) as is necessary to enable Parent Designees to be elected to the
Company's Board of Directors. Parent or Purchaser will supply to the Company in
writing and be solely responsible for any information with respect to Parent and
Purchaser and their nominees, officers, directors and affiliates to the extent
required by such Section 14(f) and Rule 14f-1. The provisions of this Section
1.4 are in addition to and shall not limit any rights which Purchaser, Parent or
any of their affiliates may have as a holder or beneficial owner of Shares as a
matter of applicable law with respect to the election of directors or
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otherwise.
(c) Notwithstanding the provisions of this Section 1.4, the
parties hereto shall use their respective best efforts to ensure that at least
two of the members of the Board shall, at all times prior to the Effective Time
(as defined in Section 2.3 hereof), be directors of the Company who were
directors of the Company on the date hereof (the "Continuing Directors"),
provided that, if there shall be in office less than two Continuing Directors
for any reason, the Board of Directors shall cause the person designated by the
remaining Continuing Director to fill such vacancy who shall be deemed to be a
Continuing Director for all purposes of this Agreement, or if no Continuing
Directors then remain, the other directors of the Company then in office shall
designate two persons to fill such vacancies who will not be officers or
employees or affiliates of the Company, Parent or VNU N.V. ("VNU" or the
"Guarantor") or any of their respective subsidiaries and such persons shall be
deemed to be Continuing Directors for all purposes of this Agreement. From and
after the time, if any, that the Parent Designees constitute a majority of the
Company's Board of Directors and prior to the Effective Time, subject to the
terms hereof, any amendment or modification of this Agreement, any amendment to
the Company's Certificate of Incorporation or By-Laws, any termination of this
Agreement by the Company, any extension of time for performance of any of the
obligations of Parent or Purchaser hereunder, any waiver of any condition to
the Company's obligations hereunder or any of the Company's rights hereunder or
other action by the Company hereunder which adversely affects the holders of
Shares other than Parent or Purchaser may be effected only if there are in
office one or more Continuing Directors and such action is approved by the
action of unanimous vote of the entire Board of Directors of the Company.
ARTICLE II
THE MERGER
Section 2.1 THE MERGER. On the terms and subject to the conditions set
forth in this Agreement, and in accordance with the DGCL, the Merger shall be
effected and Purchaser shall be merged with and into the Company at the
Effective Time. At the Effective Time, the separate existence of Purchaser shall
cease and the Company shall continue as the surviving corporation (as such, the
"Surviving Corporation") and shall continue to be governed by the laws of the
State of Delaware.
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Section 2.2 CLOSING. Unless this Agreement shall have been terminated
and the transactions contemplated hereby shall have been abandoned pursuant to
Article VIII, and subject to the satisfaction or waiver of all of the conditions
set forth in Article VII, the closing of the Merger (the "Closing") will take
place as soon as practicable, but in no event later than 10:00 a.m. on the
second business day (the "Closing Date") following satisfaction or waiver of all
of the conditions set forth in Article VII, other than those conditions that by
their nature are to be satisfied at the Closing, but subject to the fulfillment
or waiver of those conditions, at the offices of Skadden, Arps, Slate, Xxxxxxx &
Xxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, unless another date, time
or place is agreed to in writing by the parties hereto.
Section 2.3 EFFECTIVE TIME. On the Closing Date (or on such other date
as Parent and the Company may agree), the parties hereto shall file with the
Secretary of State of Delaware a certificate of merger or, if applicable, a
certificate of owner ship and merger and any other appropriate documents,
executed in accordance with the relevant provisions of the DGCL, and shall make
all other filings or recordings required under the DGCL and other applicable law
in connection with the Merger. The Merger shall become effective upon the filing
of the certificate of merger or, if applicable, the certificate of ownership and
merger, with the Delaware Secretary of State, or at such later time as is
mutually agreed by the parties and set forth therein (the "Effective Time").
Section 2.4 EFFECTS OF THE MERGER. The Merger shall have the effects
set forth in the applicable provisions of the DGCL. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time, all
property of the Company and Purchaser shall vest in the Surviving Corporation,
and all liabilities and obligations of the Company and Purchaser shall become
liabilities and obligations of the Surviving Corporation.
Section 2.5 CERTIFICATE OF INCORPORATION; BY-LAWS. (a) The certificate
of incorporation of the Company shall be the certificate of incorporation of the
Surviving Corporation until thereafter changed or amended in accordance with
the provisions thereof and applicable law and (b) the by-laws of the Company
shall be the by-laws of the Surviving Corporation until thereafter changed or
amended in accordance with the provisions thereof and applicable law.
Section 2.6 DIRECTORS; OFFICERS. From and after the Effective Time, (a)
the directors of Purchaser shall be the directors of the Surviving Corporation,
until the earlier of their resignation or removal or until their respective
successors are duly elected and
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qualified, as the case may be, and (b) the officers of the Company shall be the
officers of the Surviving Corporation, until the earlier of their resignation or
removal or until their respective successors are duly elected and qualified, as
the case may be.
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
Section 3.1 EFFECT ON CAPITAL STOCK. At the Effective Time, by virtue
of the Merger and without any action on the part of any holder of Shares or any
other shares of capital stock of the Company or Purchaser:
(a) COMMON STOCK OF PURCHASER. Each share of common stock, par
value $0.01 per share, of Purchaser issued and outstanding immediately prior to
the Effective Time shall be converted into and become one validly issued, fully
paid and nonassessable share of common stock, par value $0.01 per share, of the
Surviving Corporation.
(b) CANCELLATION OF TREASURY SHARES AND PARENT-OWNED SHARES.
Each Share issued and outstanding immediately prior to the Effective Time that
is owned by the Company or any Subsidiary of the Company or by Parent, Purchaser
or any other Subsidiary of Parent (other than shares in trust accounts, managed
accounts, custodial accounts and the like that are beneficially owned by third
parties) shall automatically be canceled and shall cease to exist, and no cash
or other consideration shall be delivered or deliverable in exchange therefor.
(c) CONVERSION OF SHARES. At the Effective Time, each Share
issued and outstanding immediately prior to the Effective Time (other than
Shares to be canceled in accordance with Section 3.1(b) and any Dissenting
Shares (as defined in Section 3.1(d)) shall be converted into the right to
receive the Offer Consideration, payable to the holder thereof, without any
interest thereon (the "Merger Consideration"), less any required withholding
taxes, upon surrender and exchange of a Certificate (as defined in Section 3.3).
(d) DISSENTING SHARES. Notwithstanding anything in this
Agreement to
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the contrary, Shares issued and outstanding immediately prior to the Effective
Time held by any person who has not voted such Shares in favor of the Merger and
who has the right to demand, and who properly demands, an appraisal of such
Shares ("Dissenting Shares") in accordance with Section 262 of the DGCL (or any
successor provision) shall not be converted into a right to receive the Merger
Consideration unless such holder fails to perfect or otherwise loses such
holder's right to such appraisal, if any. If, after the Effective Time, such
holder fails to perfect or loses any such right to appraisal, each such Share of
such holder shall be treated as a Share that had been converted as of the
Effective Time into the right to receive the Merger Consideration in accordance
with Section 3.1(c). At the Effective Time, any holder of Dissenting Shares
shall cease to have any rights with respect thereto, except the rights provided
in Section 262 of the DGCL (or any successor provision) and as provided in the
immediately preceding sentence. The Company shall give prompt notice to Parent
of any demands received by the Company for appraisal of Shares, and Parent shall
have the right to participate in and direct all negotiations and proceedings
with respect to such demands. The Company shall not, except with the prior
written consent of Parent, make any payment with respect to, or offer to settle,
any such demands.
Section 3.2 OPTIONS; STOCK PLANS.
(a) Immediately prior to the Effective Time, each then
outstanding option to purchase Shares which is vested and exercisable (in each
case, a "Vested Stock Option") shall be cancelled by the Company and in
consideration of such cancellation and except to the extent that Parent and the
holder of any such Vested Stock Option otherwise agree, the Company shall pay to
such holders of Vested Stock Options an amount in respect thereof equal to the
product of (A) the excess, if any, of (i) the Merger Consideration over (ii) the
exercise price per Share subject to such Vested Stock Option less any
consideration previously paid for such Vested Stock Option and (B) the number of
Shares subject to such Vested Stock Option immediately prior to its
cancellation. Such payment shall be less any required withholding taxes and
without interest.
(b) Each outstanding option to acquire Shares which,
immediately prior to the Effective Time, is not vested and exercisable (in each
case, an "Unvested Stock Option" and, together with the Vested Stock Options,
the "Stock Options") shall, immediately prior to the Effective Time but subject
to the Company's obtaining any necessary waivers, as to which it shall use its
reasonable best efforts, be cancel led by the Company, and in consideration of
such cancellation, holders of such Unvested Stock
11
Options shall have the right to receive, subject to the provisions of this
Section 3.2 and to the provisions of Section 3.2 of the Disclosure Letter (as
defined below), an amount of cash equal to the product of (A) the excess, if
any, of (i) the Merger Consideration, over (ii) the exercise price per Share
subject to such Unvested Stock Option (less any consideration previously paid by
such holder for such Unvested Stock Option (the "Pre-Paid Amount")) and (B) the
number of Shares subject to such Unvested Stock Option immediately prior to its
cancellation, such payment to be made, less any withholding taxes, on the
following date or dates, subject, however, to the provisions of paragraph (e) or
(f), as applicable:
(i) with respect to the Unvested Stock Options that
were granted under the Replacement Plan or under the Directors' Plan (as each
such term is defined in Section 4.1(d)), such payment to be made on the date and
in the manner set forth in Section 3.2(a) above;
(ii) with respect to the Unvested Stock Options that
relate to an option granted in November 1996 and that would otherwise have
become vested and exercisable in November 1999, such payment to be made in
November 1999 on the date that such portion of the Unvested Stock Options would
otherwise have become vested and exercisable;
(iii) with respect to the remaining Unvested Stock
Options (i.e., the Unvested Stock Options other than the Unvested Stock Options
described in clauses (i) and (ii) above), such payment to be made in four equal
installments on the date that is six months, 12 months, 18 months and 24 months,
respectively, following the Effective Time; and
(iv) with respect to all of the payments to be made
pursuant to clause (iii) above to those individuals listed in Section 3.2(b)(iv)
of the Disclosure Letter (each, an "Executive"), (A) immediately prior to the
Effective Time, the payments shall be placed in an escrow account which shall
provide for an institutional escrow agent and the terms of which shall be
designed to ensure that the assets thereof shall not be subject to the claims of
creditors of the Company and (B) the payments, when made, shall include interest
accumulated by reason of the investment and reinvestment of such payments in
6-month Treasury Bills.
(c) Immediately prior to the Effective Time, (i) each then
outstanding
12
Deferred Share Unit issued under the Directors' Deferred Compensation Plan (as
defined in Section 4.1(d)) shall be cancelled and in consideration of such
cancellation, the holder of such Deferred Share Unit shall receive a cash
payment equal to the number of Deferred Share Units then held by such holder,
multiplied by the Merger Consideration, (ii) each Deferred Cash account
established under the Directors' Deferred Compensation Plan shall be cancelled
and in consideration of such cancellation, the participant in whose name the
Deferred Cash account is established shall receive a cash payment equal to the
balance in such Deferred Cash account and (iii) each then outstanding share of
restricted stock issued under the Directors' Plan shall be cancelled and in
consideration of such cancellation, the holder of such shares of restricted
stock shall receive a cash payment equal to the number of shares of restricted
stock then held by such holder, multiplied by the Merger Consideration.
(d) Immediately prior to the Effective Time, each outstanding
share of restricted stock granted under the Key Employees' Stock Incentive Plan
(as defined in Section 4.1(d)) shall be cancelled and in consideration of such
cancellation, the holder of such shares of restricted stock shall receive a
cash payment equal to the number of shares of restricted stock then held by such
holder, multiplied by the Merger Consideration. Such payment shall be made on
the date or dates on which such shares of restricted stock would otherwise have
become vested.
(e) In the event that, prior to the date on which a payment to
an Executive pursuant to Section 3.2(b)(iii) or Section 3.2(d) hereof becomes
due and payable, the Executive's employment shall have been terminated (A) by
the Company, the Parent or the Surviving Corporation without Cause (as defined
in the Change in Control Agreement entered into between the Executive and the
Company (the "Change in Control Agreement")), (B) by the Executive for Good
Reason (as defined in the Change in Control Agreement) or (C) by reason of the
Executive's death or Disability (as defined in the Change in Control Agreement),
the Executive shall receive all of the remaining payments otherwise due and
payable pursuant to Section 3.2(b)(iii) or 3.2(d) as soon as practicable (but in
no event later than five business days) following such termination of
employment. In the event that, prior to the date on which a payment to an
Executive pursuant to Section 3.2(b)(iii) or 3.2(d) hereof becomes due and
payable, the Executive's employment shall have been terminated (A) by the
Company, the Parent or the Surviving Corporation for Cause or (B) by the
Executive without Good Reason, the Executive shall forfeit and shall no longer
be entitled to the remaining payments otherwise due and payable pursuant to
Section 3.2(b)(iii) or 3.2(d).
13
(f) In the event that, prior to the date on which a payment to
an individual other than an Executive (each such individual, a "Non-Executive
Employee") pursuant to Section 3.2(b)(iii) or 3.2(d) hereof becomes due and
payable, such Non-Executive Employee's employment shall have been terminated (i)
by the Company without Cause (as defined in the Xxxxxxx Media Research, Inc.,
Career Transition Plan (the "Transition Plan")), (ii) by any voluntary
termination that would constitute an Eligible Termination (as defined in the
Transition Plan) or (iii) by reason of death or Disability (as defined in the
Key Employees' Stock Incentive Plan), the Non-Executive Employee (or his or her
heirs or assigns) shall receive all of the remaining payments otherwise due and
payable pursuant to Section 3.2(b)(iii) or 3.2(d) as soon as practicable (but in
no event later than five days) following such termination of employment. In the
event that, prior to the date on which a payment to a Non-Executive Employee
pursuant to Section 3.2(b)(iii) or 3.2(d) hereof becomes due and payable, the
Non-Executive Employee's employment shall have been terminated for any reason
other as described in clauses (i), (ii) or (iii) above, the Non-Executive
Employee shall forfeit and shall no longer be entitled to the remaining
payments otherwise due and payable pursuant to Section 3.2(b)(iii) or 3.2(d).
(g) Notwithstanding the provisions of Section 3.2(e) and (f)
hereof, in the event an Executive's or a Non-Executive Employee's employment
shall terminate for any reason other than for Cause (as defined in the Key
Employees' Stock Incentive Plan), such Executive or Non-Executive Employee shall
receive, as soon as practicable (but in no event later than five business days)
following such termination of employment, any Pre-Paid Amount with respect to
any payments forfeited pursuant to Section 3.2(e) and (f).
(h) The Company shall ensure that following the Effective Time
no holder of a Stock Option or any participant in any employee incentive or
benefit plans or programs or arrangements or non-employee director plans
maintained by the Company shall have any right thereunder to acquire any capital
stock of the Company, Parent or the Surviving Corporation.
(i) Prior to the Effective Time, the Company shall, if
necessary, amend the terms of the applicable Company Stock Option Plans (as
defined in Section 4.1(d)) and the Directors' Deferred Compensation Plan to give
effect to the provisions of this Section 3.2.
14
Section 3.3 PAYMENT FOR SHARES.
(a) PAYMENT FUND. Concurrently with the Effective Time, Parent
shall deposit, or shall cause to be deposited, with or for the account of a bank
or trust company designated by Parent, which shall be reasonably satisfactory to
the Company (the "Paying Agent"), for the benefit of the holders of Shares,
cash in an amount sufficient to pay the aggregate Merger Consideration payable
upon the conversion of Shares pursuant to Section 3.1(c) (the "Payment Fund").
(b) LETTERS OF TRANSMITTAL; SURRENDER OF CERTIFICATES. As soon
as reasonably practicable after the Effective Time, Parent shall instruct the
Paying Agent to mail to each holder of record (other than the Company or any of
its Subsidiaries or Parent, Purchaser or any other Subsidiary of Parent) of a
certificate or certificates that, immediately prior to the Effective Time,
evidenced outstanding Shares (the "Certificates"), (i) a form of letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon proper delivery of the
Certificates to the Exchange Agent, and shall be in such form and have such
other provisions as Parent may reasonably specify) and (ii) instructions for use
in effecting the surrender of the Certificates in exchange for the Merger
Consideration. Upon surrender of a Certificate for cancellation to the Paying
Agent together with such letter of transmittal, duly executed, and such other
customary documents as may be required pursuant to such instructions, the
holder of such Certificate shall be entitled to receive in exchange therefor
cash in an amount equal to the product of (i) the number of Shares formerly
represented by such Certificate and (ii) the Merger Consideration, and the
Certificate so surrendered shall forthwith be canceled. No interest shall be
paid or accrued on any cash payable upon the surrender of any Certificate. If
payment is to be made to a person other than the person in whose name the
surrendered Certificate is registered, it shall be a condition of payment that
the Certificate so surrendered shall be properly endorsed or other wise in
proper form for transfer and that the person requesting such payment shall pay
any transfer or other taxes required by reason of the payment to a person other
than the registered holder of the surrendered Certificate or established to the
satisfaction of Parent and the Surviving Corporation that such taxes have been
paid or are not applicable.
(c) CANCELLATION OF SHARES; NO FURTHER RIGHTS. As of the
Effective Time, all Shares (other than Shares to be canceled in accordance with
Section 3.1(b)) issued and outstanding immediately prior to the Effective Time
shall cease to be outstanding and shall automatically be canceled and shall
cease to exist, and each holder of any such Shares
15
shall cease to have any rights with respect thereto or arising therefrom
(including without limitation the right to vote), except the right to receive
the Merger Consideration, without interest, upon surrender of such Certificate
in accordance with Section 3.3(b), and until so surrendered, each such
Certificate shall represent for all purposes only the right to receive the
Merger Consideration (without interest), other than in the case of Dissenting
Shares. The Merger Consideration paid upon the surrender for exchange of
Certificates in accordance with the terms of this Section 3.3 shall be deemed to
have been paid in full satisfaction of all rights pertaining to the Shares
formerly represented by such Certificates.
(d) INVESTMENT OF PAYMENT FUND. The Paying Agent shall invest
the Payment Fund, as directed by Parent, in (i) direct obligations of the United
States of America, (ii) obligations for which the full faith and credit of the
United States of America is pledged to provide for the payment of principal and
interest, (iii) commercial paper rated the highest quality by either Xxxxx'x
Investors Services, Inc. or Standard & Poor's Corporation, or (iv) certificates
of deposit, bank repurchase agreements or bankers' acceptances of commercial
banks with capital exceeding $500 million. Any net earnings with respect to the
Payment Fund shall be the property of and paid over to Parent as and when
requested by Parent.
(e) TERMINATION OF PAYMENT FUND. Any portion of the Payment
Fund which remains undistributed to the holders of Certificates for 180 days
after the Effective Time shall be delivered to Parent, upon demand, and any
holders of Certificates that have not theretofore complied with this Section 3.3
shall thereafter look only to Parent, and only as general creditors thereof, for
payment of their claim for any Merger Consideration.
(f) NO LIABILITY. None of Parent, Purchaser, the Surviving
Corporation or the Paying Agent shall be liable to any person in respect of any
payments or distributions payable from the Payment Fund delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
Subject to applicable law and public policy, if any Certificates shall not have
been surrendered prior to three years after the Effective Time (or immediately
prior to such earlier date on which any Merger Consideration in respect of such
Certificate would otherwise escheat to or become the property of any
Governmental Entity (as defined in Section 4.1(c)), any amounts payable in
respect of such Certificate shall, to the extent permitted by applicable law and
public policy, become the property of the Surviving Corporation, free and clear
of all claims or interest of any person previously entitled thereto.
16
(g) WITHHOLDING RIGHTS. Parent and Purchaser shall be entitled
to deduct and withhold, or cause to be deducted or withheld, from the
consideration otherwise payable pursuant to this Agreement to any holder of
Shares, Stock Options or Certificates such amounts as are required to be
deducted and withheld with respect to the making of such payment under the
Internal Revenue Code of 1986, as amended (the "Code"), or any provision of
applicable state, local or foreign tax law. To the extent that amounts are so
deducted and withheld, such deducted and withheld amounts shall be treated for
all purposes of this Agreement as having been paid to such holders in respect of
which such deduction and withholding was made.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as
set forth in the corresponding sections or subsections of the disclosure letter
delivered by the Company to Parent and Purchaser upon or prior to entering into
this Agreement (the "Disclosure Letter"), the Company represents and warrants to
Parent and Purchaser as follows:
(a) ORGANIZATION, STANDING AND CORPORATE POWER. Each of the
Company and its Subsidiaries is duly incorporated (or if not a corporation, duly
organized), validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated and has the requisite corporate or
other power and authority to carry on its business as now being conducted. Each
of the Company and its Subsidiaries is duly qualified to do business and is in
good standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification necessary, other
than in such jurisdictions where the failure to be so qualified would not,
individually or in the aggregate, have a Material Adverse Effect on the Company.
For purposes of this Agreement, a "Material Adverse Effect" with respect to any
person means a material adverse effect on (i) the ability of such person to
perform its obligations under this Agreement or to consummate the transactions
contemplated hereby or (ii) the financial condition, business or results of
operations of such person and its Subsidiaries taken as a whole, other than any
change, circumstance or effect relating to (i) the economy or securities markets
in general, (ii) the industries in which such person operates and not
specifically relating to such person, (iii) the performance of this Agreement or
the
17
transactions contemplated hereby in accordance with the terms of this Agreement
or (iv) the failure of any stockholder of NetRatings, Inc. ("NetRatings") to
execute Addendum No. 1 to the Restated Stockholders Agreement or Addendum No. 1
to the Restated Rights Agreement to the extent the rights of the Company or
NetRatings are dependent on such stockholder executing such agreements. The
Company has delivered or made available to Parent true, complete and correct
copies of the certificate of incorporation and by-laws or comparable governing
documents of the Company and each Subsidiary of the Company, in each case as
amended to the date of this Agreement. Exhibit 21 to the Company's Annual
Report on Form 10-K for the year ended December 31, 1998 sets forth a true,
correct and complete list of all Subsidiaries of the Company required to be so
reported. Except as set forth in such Exhibit 21, all Subsidiaries of the
Company are wholly owned directly or indirectly by the Company. Except as set
forth in Section 4.1(a) of the Disclosure Letter, the Company does not own,
directly or indirectly, any capital stock or other equity interest in any person
other than the Subsidiaries other than such capital stock and other equity
interests with a carrying value, in the aggregate, not in excess of $1,000,000.
(b) CORPORATE AUTHORIZATION. The Company has the requisite
corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by the Company and the consummation by the Company of the transactions
contemplated hereby have been duly authorized, and this Agreement has been
approved, by the Board of Directors of the Company, and no other corporate
proceeding, other than the approval of the Company's stockholders, is necessary
to authorize the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby. This Agreement has been duly executed
and delivered by the Company and, assuming that this Agreement constitutes a
valid and binding obligation of Parent and Purchaser, constitutes a valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms. Subject to the applicability of Section 253 of the DGCL, the
affirmative vote of the holders of a majority of the outstanding Shares is the
only vote required to approve the Merger and adopt this Agreement.
(c) CONSENTS AND APPROVALS; NO VIOLATIONS. (i) Except as set
forth in Section 4.1(c) of the Disclosure Letter, the execution and delivery by
the Company of this Agreement do not, and the consummation by the Company of
the transactions contemplated hereby and compliance by the Company with the
provisions hereof will not, (x) violate any of the provisions of the
certificate of incorporation or by-laws of the
18
Company or the comparable governing documents of any Subsidiary of the Company,
in each case as amended to the date of this Agreement, (y) subject to the
governmental filings and other matters referred to in Section 4.1(c)(ii),
violate or result in a breach of or default (with or without notice or lapse of
time, or both) under, or give rise to a material obligation, right of
termination, cancellation or acceleration of any obligation or loss of a
material benefit under, or require the consent of any person under, any
indenture or other agreement, permit, concession, franchise, license or other
instrument or undertaking to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries or any of their
respective assets is bound or affected (other than the Credit Agreements (as
defined in Section 4.1(d)) or (z) subject to the governmental filings and other
matters referred to in Section 4.1(c)(ii), violate any domestic or foreign law,
rule or regulation applicable to the Company or any order, writ, judgment,
injunction, decree, determination or award applicable to the Company currently
in effect, which, in the case of clauses (y) and (z) above, would reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company.
(ii) No consent, approval, order or authorization of, or
declaration, registration or filing with, or notice to, any domestic or foreign
court, arbitral tribunal, administrative agency or commission or other
governmental agency or regulatory authority (a "Governmental Entity"), which has
not been received or made is required by or with respect to the Company or any
of its Subsidiaries in connection with the execution and delivery of this
Agreement by the Company or the consummation by the Company of the transactions
contemplated hereby, except for (i) the filing of premerger notification and
report forms under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), (ii) the filing with the SEC of (A) the Schedule 14D-9
and, if required by applicable law, the Proxy Statement (as defined in Section
6.1(b)), (B) such reports under the Exchange Act as may be required in
connection with this Agreement and the transactions contemplated hereby, (iii)
the filing of the certificate of merger or the certificate of ownership and
merger, as the case may be, with the Delaware Secretary of State and appropriate
documents with the relevant authorities of other states in which the Company is
qualified to do business, (iv) those filings required under the Investment
Canada Act, (v) as required under the rules and regulations of the New York
Stock Exchange and (vi) any other consents, approvals, authorizations, filings
or notices the failure to make or obtain which would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company.
(d) CAPITAL STRUCTURE. As of the date of this Agreement, the
authorized
19
capital stock of the Company consists solely of (A) 400,000,000 shares of Common
Stock, (B) 10,000,000 shares of series common stock, par value $0.01 per share
(the "Series Common Stock"), of which no shares were outstanding, and (C)
10,000,000 shares of preferred stock, par value $0.01 per share ("Preferred
Stock"), of which no shares were outstanding but of which 400,000 shares have
been designated as Series A Junior Participating Preferred Stock and reserved
for issuance upon exercise of the Rights distributed to the holders of Common
Stock pursuant to the Rights Agreement. At the close of business on June 30,
1999, 57,577,469 shares of Common Stock were outstanding, and no shares of
capital stock of the Company were held in the treasury of the Company. There
were outstanding as of June 30, 1999 no options, warrants or other rights to
acquire capital stock from the Company other than (w) the Rights, (x) options
representing in the aggregate the right to purchase up to 12,713,797 shares of
Common Stock (collectively, the "Company Stock Options") under the 1996 Xxxxxxx
Media Research, Inc. Key Employees' Stock Incentive Plan (the "Key Employees'
Stock Incentive Plan"), the 1996 Xxxxxxx Media Research, Inc. Replacement Plan
for Certain Employees Holding The Dun & Bradstreet Corporation Equity Based
Awards (the "Replacement Plan") and the 1996 Xxxxxxx Media Research, Inc.
Non-Employee Directors' Stock Incentive Plan (the "Directors' Plan")
(collectively, the "Company Stock Option Plans"), (y) stock units representing
in the aggregate the right to receive no more than 10,000 shares of Common Stock
under the 1996 Xxxxxxx Media Research, Inc. Non-Employee Directors' Deferred
Compensation Plan (the "Directors' Deferred Compensation Plan") and (z) rights
to purchase shares of Common Stock under the 1997 Xxxxxxx Media Research, Inc.
Employee Stock Purchase Plan (the "Employee Stock Purchase Plan"). Other than
(i) the shares of Common Stock (including restricted stock), Rights, options,
stock units and other rights described above, (ii) options, stock units or other
rights to acquire no more than 50,000 shares of Common Stock (and accompanying
Rights) in the aggregate pursuant to the Company Stock Option Plans, the
Directors' Deferred Compensation Plan and the Employee Stock Purchase Plan and
(iii) shares of Common Stock (and associated Rights) issued since June 30, 1999
upon the exercise of the options referred to in clauses (i) or (ii), no shares,
options or warrants or other rights to acquire capital stock from the Company
remain outstanding as of the date of this Agreement. All outstanding shares of
capital stock of the Company and its Subsidiaries are duly authorized, validly
issued, fully paid and nonassessable and not subject to preemptive or similar
rights, and, in the case of the Subsidiaries, are owned by the Company, by one
or more Subsidiaries of the Company or by the Company and one or more such
Subsidiaries (except as disclosed in Section 4.1(a)), free and clear of all
pledges, claims, liens, charges, mortgages, conditional sale or title retention
agreements,
20
hypothecations, collateral assignments, security interests, easements and other
encumbrances of any kind or nature whatsoever (collectively, "Liens"), except
for Liens under (A) the Three-Year Credit Agreement, dated as of June 15, 1998,
among the Company, The Chase Manhattan Bank and the lenders named therein and
(B) the Amended and Restated 200-Day Credit Agreement, dated as of June 14,
1999, among the Company, The Chase Manhattan Bank and the lenders named therein
(the "Credit Agreements") and except for Liens under the partnership agreement
relating to NMR Licensing Associates, L.P., dated as of July 7, 1999 (the
"Licensing Partnership Agreement"). Except as described above, neither the
Company nor any Subsidiary of the Company has or is subject to or bound by or,
at or after the Effective Time will have or be subject to or bound by, any
outstanding option, warrant, call, subscription or other right (including any
preemptive or similar right), agreement or commitment which (i) obligates the
Company or any Subsidiary of the Company to issue, sell or transfer, or
repurchase, redeem or otherwise acquire, any shares of the capital stock of the
Company or any Subsidiary of the Company, (ii) restricts the transfer of any
shares of capital stock of the Company or any of its Subsidiaries, or (iii)
relates to the holding, voting or disposition of any shares of capital stock of
the Company or any of its Subsidiaries except, in the case of clause (ii) or
(iii), as provided in the Credit Agreements and the Licensing Partnership
Agreement. No bonds, debentures, notes or other indebtedness of the Company or
any Subsidiary of the Company having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any matters on which
the stockholders of the Company or any Subsidiary of the Company may vote are
issued or outstanding. Section 4.1(d) of the Disclosure Letter accurately sets
forth information as of July 31, 1999 regarding the exercise price, date of
grant and number of granted Stock Options for each holder of Stock Options
pursuant to any stock option plan. Except as described above, there are no other
stock appreciation, phantom stock or other equity-based awards outstanding under
any employee incentive or benefit plan or program or arrangement or non-employee
director plan maintained by the Company.
(e) SEC DOCUMENTS. The Company has filed all required reports,
schedules, forms, statements and other documents with the SEC relating to
periods commencing on or after June 30, 1998 (such reports, schedules, forms,
statements and other documents being hereinafter referred to as the "SEC
Documents"). As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the Securities Act of 1933, as
amended (the "Securities Act"), or the Exchange Act, as the case may be, and the
rules and regulations of the SEC promulgated thereunder applicable to such SEC
Documents, and none of the SEC Documents as of
21
such dates contained any untrue statements of a material fact or omitted
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. The consolidated financial statements of the Company
included in the SEC Documents comply as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto, have been prepared in accordance with U.S.
generally accepted accounting principles ("GAAP") (except, in the case of
unaudited consolidated quarterly statements, as permitted by Form 10-Q of the
SEC) applied on a consistent basis during the periods involved (except as may
otherwise be indicated in the notes thereto) and fairly present the consolidated
financial position of the Company and its consolidated Subsidiaries as of the
dates thereof and the consolidated results of their operations and cash flows
for the periods then ended (subject, in the case of unaudited quarterly
statements, to normal year-end audit adjustments).
(f) ABSENCE OF CERTAIN CHANGES OR EVENTS.
(i) Except as set forth in Section 4.1(f) of the
Disclosure Letter, since June 30, 1999, the Company and its Subsidiaries have
conducted their businesses only in the ordinary course consistent with past
practice, and there has not been: (A) any event, change, occurrence, or
development of a state of facts or circumstances having, or which would
reasonably be expected to have, a Material Adverse Effect on the Company; (B)
any declaration, setting aside or payment of any dividend or other distribution
in respect of shares of the Company's capital stock, or any redemption or other
acquisition by the Company of any shares of its capital stock; (C) any (i) grant
of any severance or termination pay to (or amendment to any such existing
arrangement with) any director, officer or employee of the Company or any of its
Subsidiaries (other than any such officer or employee who receives less than
$200,000 in total annual cash compensation from the Company or any of its
Subsidiaries), (ii) entering into of any employment, deferred compensation or
other similar arrangement (or any amendment to any such existing agreement) with
any director, officer or employee of the Company or any of its Subsidiaries
(other than any such officer or employee who receives less than $200,000 in
total annual cash compensation from the Company or any of its Subsidiaries),
(iii) any increase in benefits payable under any existing severance or
termination pay policies or employment agreements with respect to any director,
officer or employee of the Company or any of its Subsidiaries (other than any
such officer or employee who receives less than $200,000 in total annual cash
compensation from the Company or any of its Subsidiaries), (iv) increase in (or
amendments to the terms of) compensation, bonus or other benefits
22
payable to directors, officers or employees of the Company or any of its
Subsidiaries (other than any such officer or employee who receives less than
$200,000 in total annual cash compensation from the Company or any of its
Subsidiaries), other than in the ordinary course of business consistent with
past practice, or (v) any adoption or agreement to adopt any collective
bargaining agreement or any Company Plan; (D) any change by the Company or any
of its Subsidiaries in accounting methods, principles or practices, except as
required by generally accepted accounting principles; or (E) any agreement or
commitment by the Company or any of its Subsidiaries to do any of the things
described in the preceding clauses (A) through (D) otherwise than as expressly
provided for herein.
(g) NO UNDISCLOSED LIABILITIES. Except to the extent accrued
or reserved in the Company's financial statements (including the notes thereto)
included in the SEC Documents filed and publicly available prior to the date of
this Agreement (the "Filed SEC Documents"), and unless incurred in the ordinary
course of business since the date of the most recent financial statements
included in the Filed SEC Documents, neither the Company nor any of its
Subsidiaries has any liabilities or obligations of any nature, whether accrued,
contingent, absolute or otherwise, except for those that would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect on
the Company.
(h) CERTAIN INFORMATION. The Schedule 14D-9 and the Proxy
Statement will contain all information which is required to be included therein
in accordance with the Exchange Act and the rules and regulations thereunder and
any other applicable law and will conform in all material respects with the
requirements of the Exchange Act and any other applicable law, and neither the
Schedule 14D-9 nor the Proxy Statement will, at the respective times they are
filed with the SEC or published, sent or given to the Company's stockholders,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading; provided, however, that no representation or warranty is hereby made
by the Company with respect to any information supplied by Parent or Purchaser
in writing for inclusion in, or with respect to Parent or Purchaser information
derived from Parent's public SEC filings which is included or incorporated by
reference in, the Schedule 14D-9 or the Proxy Statement. None of the information
supplied or to be supplied by the Company in writing for inclusion or
incorporation by reference in, or which may be deemed to be incorporated by
reference in, any of the Offer Documents will, at the respective times the Offer
Documents are filed with the SEC or published, sent or given to the Company's
stockholders, contain any
23
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they are made, not misleading. If at any time
prior to the Effective Time any event with respect to the Company, or with
respect to any information supplied by the Company in writing for inclusion in
any of the Offer Documents, shall occur which is required to be described in an
amendment of, or a supplement to, any of the Offer Documents, the Company shall
so describe the event to Parent.
(i) REAL PROPERTY. (i) Section 4.1(i) of the Disclosure Letter
sets forth all of the real property owned by the Company and its Subsidiaries
and all property leased by the Company and its Subsidiaries in the State of New
Jersey (the "Real Property").
(ii) The Company or one of its Subsidiaries has good
and marketable title to each parcel of Real Property owned by the Company or its
Subsidiaries and a valid leasehold interest in all Real Property leased by the
Company and its Subsidiaries free and clear of all Liens except (A) those
reflected or reserved against in the latest balance sheet of the Company
included in the Filed SEC Documents, (B) taxes and general and special
assessments not in default and payable without penalty and interest, and (C)
other Liens that individually or in the aggregate would not reasonably be
expected to have a Material Adverse Effect on the Company.
(iii)The Company has heretofore made available to
Parent true, correct and complete copies of all leases, subleases and other
agreements requiring annual payments of $1,000,000 or more (the "Real Property
Leases"), under which the Company or any of its Subsidiaries uses or occupies or
has the right to use or occupy, now or in the future, any real property or
facility (the "Leased Real Property"), including all modifications, amendments
and supplements thereto. Except in each case where the failure would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company: (A) all rent and other sums and charges payable
by the Company or its Subsidiaries as tenants under the Real Property Leases are
current in all material respects, and (B) no termination event or condition or
uncured default of a material nature on the part of the Company or any such
Subsidiary or, to the Company's knowledge, the landlord, exists under any Real
Property Lease.
(j) INTELLECTUAL PROPERTY.
(i) The status of the Company's rights in and to the NIELSEN
name is
24
set forth in the TAM Master Agreement between the Company and ACNielsen
Corporation ("ACN"), the CZT/ACN Trademarks, L.L.C. Limited Liability Company
Agreement between the Company and ACN, and the Intellectual Property Agreement
among The Dun & Bradstreet Corporation, the Company and ACN, all dated as of
October 28, 1996, and those certain Contribution Agreements, dated as of April
29, 1998 and July 7, 1999, and the Second Lease Agreement, the Third Amended and
Restated Lease Agreement, and the Fourth Amended and Restated Agreement of
Limited Partnership, all dated as of July 7, 1999, between the Company and NMR
Licensing Associates, L.P., (and also with NMR Investing I, Inc. and RBNMR, Inc.
in the case of the Fourth Amended and Restated Agreement), set forth the status
of the Company's rights in and to the Software and Software Assets (as defined
therein)(collectively, the "IP Contracts") and copies of the IP Contracts have
been provided or made available to Parent.
(ii) Except in each case where the failure would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company, (A) the Company owns or has rights to use and,
except for Intellectual Property licensed to the Company to the extent the terms
of the applicable licenses restrict transfer, transfer all Intellectual Property
that is reasonably necessary to conduct the Company's business as it is
conducted on the date hereof, in each case free and clear of all Liens, and (B)
to the best of the Company's knowledge, the conduct of the Company's and its
Subsidiaries' business does not (x) infringe on any patent, trademark, copyright
or other intellectual property right of any other person, or (y) constitute a
misuse or misappropriation of any trade secret, know-how, process, proprietary
information or other similar right of any other person. For purposes of this
Agreement, "Intellectual Property" shall mean all intellectual property material
to the operation or the conduct of business of the Company or its Subsidiaries,
including copyrights, trademarks, trade names, service marks, domain names,
trade dress, letters patent (including registrations or applications for
registration in any jurisdiction, and any renewals or extensions thereof), the
goodwill associated with the foregoing; confidential or proprietary technical
and business information, know-how and trade secrets, in any jurisdiction, and
any claims or causes of action arising out of or relating to any infringement or
misappropriation of any of the foregoing.
(k) CERTAIN CONTRACTS AND ARRANGEMENTS. Except as disclosed in
Section 4.1(k) of the Disclosure Letter or in the Filed SEC Documents, neither
the Company nor any of its Subsidiaries is a party to or bound by any contracts,
agreements,
25
instruments or understandings ("contracts") of the following nature
(collectively, the "Material Contracts"): (i) contracts with any current or
former officer or director of the Company (other than any such officer who
receives or received (during his or her last year of employment with the Company
or any of its Subsidiaries) less than $200,000 in total annual cash compensation
from the Company or any of its Subsidiaries); (ii) contracts pursuant to which
the Company or any of its Subsidiaries licenses other persons to use any
material Intellectual Property (other than contracts entered into for the
licensing of data or software in the ordinary course of business); (iii)
contracts other than contracts entered into in the ordinary course of business
(A) for the sale of any material amount of the assets of the Company or any of
its Subsidiaries, or (B) for the grant to any person of any preferential rights
to purchase any material amount of its assets; (iv) contracts which materially
restrict the Company or any of its affiliates from competing in any material
line of business or with any person in any geographical area or which materially
restrict any other person from competing with the Company or any of its
affiliates in any material line of business or in any geographical area; (v)
contracts which are material to the Company and which restrict the Company or
any of its Subsidiaries from disclosing any information concerning or obtained
from any other person or which restrict any other person from disclosing any
information concerning or obtained from the Company or any of its Subsidiaries
(other than contracts entered into in the ordinary course of business consistent
with past practice); (vi) any confidentiality, nondisclosure or similar contract
which contains any "standstill" provisions or similar restrictions on
Acquisition Proposals (as defined in Section 6.5) by any third party (other than
Parent or its affiliates); (vii) contracts involving (A) the acquisition, merger
or purchase of all or substantially all of the assets or business of a third
party involving aggregate consideration of $500,000 or more or (B) the purchase
or sale of assets, or a series of purchases and sales of assets, involving
aggregate consideration of $2,000,000 or more; (viii) contracts with any
affiliate that would be required to be disclosed under Item 404 of Regulation
S-K under the Securities Act; (ix) contracts which are material to the Company
and contain a "change in control" or similar provision; (x) contracts, including
mortgages or other grants of security interests, guarantees and notes, relating
to the borrowing of money in an aggregate amount in excess of $1,000,000 in the
aggregate; (xi) contracts relating to any material joint venture, partnership,
strategic alliance or similar arrangement; and (xii) contracts existing on the
date hereof involving revenues in excess of $1,000,000 per year. Except as set
forth in Section 4.1(k) of the Disclosure Letter and except as would not
reasonably be expected to have a Material Adverse Effect on the Company, neither
the Company nor any of its Subsidiaries is in breach or default under any
Material Contract nor, to the knowledge of the Company, is any other party to
any Material Contract in breach or default thereunder.
26
(l) LITIGATION; COMPLIANCE WITH LAWS. (i) Except as set forth
in Section 4.1(l) of the Disclosure Letter or in the Filed SEC Documents, (A)
there is no suit, claim, action, proceeding (at law or in equity) or
investigation pending or, to the knowledge of the Company, threatened against or
affecting the Company or any of its Subsidiaries or any of their respective
properties before any arbitrator, court or other Governmental Entity, and (ii)
neither the Company nor any of its Subsidiaries is subject to any outstanding
order, writ, judgment, injunction, decree or arbitration order or award that, in
any such case described in clauses (i) and (ii), has had or would reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company. As of the date hereof, there are no suits, claims, actions,
proceedings or investigations pending or, to the knowledge of the Company,
threatened, seeking to prevent, hinder, modify or challenge the transactions
contemplated by this Agreement.
(ii) Except as would not reasonably be expected to have a
Material Adverse Effect on the Company, the Company and its Subsidiaries are in
compliance with all applicable statutes, laws, ordinances, rules, orders and
regulations of any Governmental Entity and have not received notification of any
asserted present or past failure to so comply. All federal, state, local and
foreign governmental approvals, authorizations, certificates, filings,
franchises, licenses, notices, permits and rights ("Permits") necessary for each
of the Company and its Subsidiaries to own, lease or operate its properties and
assets and to carry on its business as now conducted have been obtained or
made, and there has occurred no default under any such Permit, except for the
lack of Permits and for defaults under Permits which lack or default would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company.
(m) ENVIRONMENTAL LAWS. (i) Except as set forth in Section
4.1(m) of the Disclosure Letter:
(A) The Company and each of its Subsidiaries is in
compliance with all applicable Environmental Laws (which compliance includes,
but is not limited to, the possession by the Company and each of its
Subsidiaries of all permits and other governmental authorizations required under
applicable Environmental Laws, and compliance with the terms and conditions
thereof), except where failure to be in compliance would not reasonably be
expected to have a Material Adverse Effect on the Company. Neither the Company
nor any of its Subsidiaries has received any written communication from a
Governmental Entity alleging that the Company or any of its Subsidiaries is not
in such
27
compliance, other than such events of non-compliance as would not reasonably be
expected to have a Material Adverse Effect.
(B) There is no Environmental Claim pending or, to
the knowledge of the Company, threatened against the Company or any of its
Subsidiaries or, to the knowledge of the Company, against any person or entity
whose liability for any Environmental Claim the Company or any of its
Subsidiaries has or may have retained or assumed either contractually or by
operation of law which would reasonably be expected to have a Material Adverse
Effect on the Company.
(C) There are no past or present actions, activities,
circumstances, conditions, events or incidents, including, without limitation,
the Release or presence of any Hazardous Materials, which would reasonably be
expected to form the basis of any Environmental Claim against the Company or any
of its Subsidiaries or, to the knowledge of the Company, against any person or
entity whose liability for any Environmental Claim the Company or any of its
Subsidiaries has or would reasonably be expected to have retained or assumed
either contractually or by operation of law which, in any case, would reasonably
be expected to have a Material Adverse Effect on the Company.
(D) The Company and each of its Subsidiaries has
delivered or otherwise made available for inspection to the Parent true,
complete and correct copies and results of any material reports, studies,
analyses, tests or monitoring prepared since June 30, 1998 possessed or
controlled by the Company and each of its Subsidiaries pertaining to Hazardous
Materials in, on, beneath or adjacent to any property currently or formerly
owned, operated or leased by the Company or any of its Subsidiaries, or
regarding the Company's and each of its Subsidiaries' compliance with applicable
Environmental Laws.
(ii) Definitions.
(A) "Environmental Claim" means any claim, action,
cause of action, investigation or written notice by any person or entity
alleging potential liability (including, without limitation, potential liability
for investigatory costs, Cleanup costs, governmental response costs, natural
resources damages, property damages, personal injuries, or penalties) arising
out of, based on or resulting from (I) the presence, or Release of any Hazardous
Materials at any location, whether or not owned or operated by the Company and
each of its Subsidiaries, or (II) circumstances forming the basis of any
violation, or
28
alleged violation, of any Environmental Law.
(B) "Environmental Laws" means all federal, state,
local and foreign laws and regulations relating to pollution or protection of
the environment or human health as affected by the environment including without
limitation, laws relating to Releases or threatened Releases of Hazardous
Materials or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, Release, disposal, transport or handling of Hazardous
Materials and all laws and regulations with regard to record keeping,
notification, disclosure and reporting requirements respecting Hazardous
Materials.
(C) "Hazardous Materials" means all substances
defined as Hazardous Substances, Oils, Pollutants or Contaminants in the
National Oil and Hazardous Substances Pollution Contingency Plan, 40 C.F.R.
Section 300.5, or defined as such by, or regulated as such under, any
Environmental Law.
(D) "Release" means any release, spill, emission,
discharge, leaking, pumping, injection, deposit, disposal, dispersal, leaching
or migration of Hazardous Materials into the indoor or outdoor environment
(including, without limitation, ambient air, surface water, groundwater and
surface or subsurface strata) or into or out of any property, including the
movement of Hazardous Materials through or in the air, soil, surface water,
groundwater or property.
(n) TAXES.
(i) Except as disclosed in the Filed SEC Reports and
except as set forth in Section 4.1(n) of the Disclosure Letter, as of the date
hereof and as of the Effective Time:
29
(ii) Except for Returns (I) for Taxes (a) for which IMS
Health Incorporated has preparation and filing responsibility under the Tax
Allocation Agreement, dated as of June 30, 1998, between the Company and IMS
Health Incorporated (the "1998 Tax Allocation Agreement"), (b) to the extent
items on such Returns are covered by an indemnification obligation of IMS Health
Incorporated pursuant to the 1998 Tax Allocation Agreement or (c) to the extent
items on such Return are covered by an indemnification obligation of The Dun &
Bradstreet Corporation under the Tax Allocation Agreement dated as of October
29, 1996 among The Dun & Bradstreet Corporation, the Company and XX Xxxxxxx
Corporation (the "1996 Tax Allocation Agreement") or (II) where the failure to
do so would not, individually or in the aggregate, have a Material Adverse
Effect on the Company, each of the Company and each Subsidiary of the Company
(and any affiliated or unitary group of which any such person was a member) has
(A) timely filed all federal, state, local and foreign returns, declarations,
reports, estimates, information returns and statements, including combined
unitary or consolidated returns for any group of entities (the "Returns")
required to be filed by or for it in respect of any Taxes (as hereinafter
defined) and has caused such Returns as so filed to be true, correct and
complete, (B) established reserves that are reflected in the Company's most
recent financial statements included in the Filed SEC Documents and that as so
reflected are adequate for the payment of all Taxes not yet due and payable with
respect to the results of operations of the Company and its Subsidiaries through
the date hereof and (C) timely withheld and paid over to the proper taxing
authorities all Taxes and other amounts required to be so withheld and paid
over. Each of the Company and each Subsidiary of the Company (and any affiliated
or unitary group of which any such person was a member) has timely paid all
Taxes currently due and payable with respect to taxable periods or portions
thereof beginning after June 30, 1998, except for those contested in good faith
and for which adequate reserves have been provided for in the Company's
financial statements.
(iii) Neither the Company nor any of its Subsidiaries
has made an election under Section 341(f) of the Code or agreed to have Section
341(f)(2) of the Code apply to any disposition of a subsection (f) asset (as
such term is defined in Section 341(f)(4) of the Code) owned by the Company or
any of its Subsidiaries.
(iv) Except for the 1996 Tax Allocation Agreement and
the 1998 Tax Allocation Agreement, neither the Company nor any of its
Subsidiaries is a party to, is bound by or has any obligation under any tax
sharing agreement or similar agreement or arrangement.
30
(v) Since July 1, 1998, neither the Company nor any
of its Subsidiaries has agreed to make, nor is required to make, any material
adjustment under Section 481(a) of the Code by reason of a change in accounting
method or otherwise and, to the knowledge of the Company, the IRS has not
proposed any adjustment or change in an accounting method of the Company or any
of its Subsidiaries.
(vi) Neither the Company nor any of its Subsidiaries
is, or has been, a United States Real Property Holding Corporation within the
meaning of Section 897(c)(2) of the Code during the applicable period set forth
in Section 897(c)(1)(A)(ii) of the Code.
(vii) Except as would not have a Material Adverse
Effect, there are no Tax liens upon any asset of the Company or any of its
Subsidiaries except liens for Taxes not yet due.
(viii) Since July 1, 1998, neither the Company nor
any of its Subsidiaries has made a disclosure on a Return pursuant to Section
6662 of the Code.
For purposes of this Agreement, "Taxes" shall mean all
federal, state, local and foreign income, property, sales, excise, employment,
payroll, franchise, withholding and other taxes, tariffs, charges, fees, levies,
imposts, duties, licenses or other assessments of every kind and description,
together with any interest and any penalties, additions to tax or additional
amounts imposed by any taxing authority.
(o) BENEFIT PLANS. Section 4.1(o) of the Disclosure Letter
sets forth a true, correct and complete list of all the material "employee
benefit plans" (as that phrase is defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) in each case, that
is sponsored, maintained or contributed to or required to be contributed to by
the Company or by any trade or business, whether or not incorporated (an "ERISA
Affiliate"), that together with the Company would be deemed a "single employer"
within the meaning of Section 4001(b) of ERISA, or to which the Company or an
ERISA Affiliate is party, whether written or oral, for the benefit of any
current or former employee, officer or director of the Company or any of its
Subsidiaries (the "Company ERISA Plans") and any other material benefit or
compensation plan, program or arrangement, in each case, that is sponsored,
maintained or contributed to or required to be contributed to by the Company or
an ERISA Affiliate, whether written or
31
oral, for the benefit of any current or former employee, officer or director of
the Company or any of its Subsidiaries in the United States (the Company ERISA
Plans and such other plans being referred to as the "Company Plans"). The
Company has furnished or made available to Parent and its representatives a
true, correct and complete copy of every document pursuant to which each Company
Plan is established or operated (including any summary plan descriptions), a
written description of any Company Plan for which there is no written document,
and the most recent annual reports, financial statements and actuarial
valuations with respect to each Company Plan. Except as set forth in Section
4.1(o) of the Disclosure Letter and except where the failure to comply would not
reasonably be expected to have a Material Adverse Effect:
(i) none of the Company ERISA Plans is a
"multiemployer plan" within the meaning of ERISA;
(ii) none of the Company Plans promises or provides
retiree health benefits or retiree life insurance benefits to any person;
(iii) none of the Company Plans provides for payment
of a benefit, the increase of a benefit amount, the payment of a contingent
benefit or the acceleration of the payment or vesting of a benefit determined or
occasioned, in whole or in part, by reason of the execution of this Agreement or
the consummation of the transactions contemplated by this Agreement;
(iv) neither the Company nor any of its Subsidiaries
has an obligation to adopt, or is considering the adoption of, any new benefit
or compensation plan, program or arrangement or, except as required by law, the
amendment of an existing Company Plan;
(v) each Company ERISA Plan intended to be qualified
under Section 401(a) of the Code has received a favorable determination
notification, advisory and/or opinion letter, as applicable, from the Internal
Revenue Service that it is so qualified or still has remaining a period of time
under applicable Treasury Regulations or Internal Revenue Service pronouncements
in which to apply for such a letter and to make any amendments necessary to
obtain a favorable determination and nothing has occurred since the date of such
letter that would reasonably be expected to affect the qualified status of such
Company ERISA Plan;
32
(vi) each Company Plan has been operated in
accordance with its terms and the requirements of all applicable law, and no
prohibited transaction described in Section 406 of ERISA or Section 4975 of the
Code has occurred with respect to any the Company ERISA Plan;
(vii) neither the Company nor any of its Subsidiaries
or members of their "controlled group" has incurred any direct or indirect
liability under ERISA or the Code in connection with the termination of,
withdrawal from or failure to fund, any Company ERISA Plan or other retirement
plan or arrangement, and no fact or event exists that would reasonably be
expected to give rise to any such liability;
(viii) the aggregate accumulated benefit obligations
of each Company ERISA Plan subject to Title IV of ERISA (as of the date of the
most recent actuarial valuation prepared for such Company ERISA Plan and based
on the discount rate and other actuarial assumptions used in such valuation) do
not exceed the fair market value of the assets of such Company ERISA Plan (as of
the date of such valuation);
(ix) the Company is not aware of any claims relating
to the Company Plans, other than routine claims for benefits;
(x) none of the Company Plans provides for benefits
or other participation therein, and the Company has received no claims or
demands for participation in or benefits under any Company Plan, by any
individual classified or treated by the Company as an independent contractor;
and
(xi) neither the Company nor any Subsidiary is a
party to any agreement, contract, arrangement or plan that has resulted, or
would result, separately or in the aggregate, in the payment of any "excess
parachute payments" within the meaning of Section 280G of the Code as a result
of any transaction or event contemplated by this Agreement.
(p) LABOR MATTERS. Neither the Company nor any of its
Subsidiaries is a party to any labor or collective bargaining agreement which
pertain to employees of the Company or any of its Subsidiaries. Except as set
forth in Section 4.1(p) of the Disclosure Letter and except as would not
reasonably be expected to have a Material Adverse Effect on the Company, (i) no
employees of the Company or any of its Subsidiaries are represented by any labor
organization and, to the knowledge of the Company, no labor
33
organization or group of employees of the Company or any of its Subsidiaries
has made a pending demand for recognition or certification, (ii) there are no
representation or certification proceedings or petitions seeking a
representation proceeding presently pending or, to the knowledge of the
Company, threatened in writing to be brought or filed with the National Labor
Relations Board or any other labor relations tribunal or authority, (iii) to
the knowledge of the Company, there are no organizing activities involving
the Company or any of its Subsidiaries pending with any labor organization or
group of employees of the Company or any of its Subsidiaries, and (iv) there
are no (A) unfair labor practice charges, grievances or complaints pending
or, to the knowledge of the Company, threatened in writing by or on behalf of
any employee or group of employees of the Company or any of its Subsidiaries,
or (B) complaints, charges or claims against the Company or any of its
Subsidiaries pending, or, to the knowledge of the Company, threatened in
writing to be brought or filed, with any Governmental Entity or arbitrator
based on, arising out of, in connection with, or otherwise relating to the
employment or termination of employment of any individual by the Company or
any of its Subsidiaries.
(q) YEAR 2000 COMPLIANCE. The Company has taken reasonable
actions to ensure that all material software and hardware systems, including but
not limited to embedded systems ("Computer Systems"), currently utilized by the
Company and its Subsidiaries in the conduct of their respective businesses and
in the operation of their respective facilities will, or are being adapted or
replaced to, on or before December 31, 1999, accurately recognize, sort,
compare, sequence, calculate, store and retrieve, distinguish between, process
and correctly display data from, into and between the twentieth and twenty-first
centuries, and the years 1999 and 2000 and related leap years in a format that
allows entry or processing of a four-digit year date in which the first two
digits designate the century and are contiguous with the second two digits which
designate the year within the century (I.E., 1999, 2000, etc.) and accurately
display such data in standard date and time formats. The Company reasonably
expects that the cost of the remediation, adaption or replacement of all such
Computer Systems, whether or not material, will not exceed the amount set forth
in the Filed SEC Documents.
(r) OPINION OF FINANCIAL ADVISOR. The Company has received the
written opinion of Xxxxxx Xxxxxxx & Co., Incorporated, dated August 15, 1999 (a
true, correct and complete copy of which will be promptly delivered to Parent by
the Company), to the effect that, based upon and subject to the matters set
forth therein and as of the date thereof, the Offer Consideration and the Merger
Consideration to be received by the holders of Shares (other than Parent and
Purchaser) in the Offer and the
34
Merger, respectively, is fair, from a financial point of view, to such holders,
and such opinion has not been withdrawn or modified.
(s) VOTING REQUIREMENTS. In the event that Section 253 of the
DGCL is inapplicable and unavailable to effectuate the Merger, the affirmative
vote of the holders of a majority of the outstanding Shares entitled to vote at
the Stock holders Meeting (as defined in Section 6.1(a)) with respect to the
adoption of this Agreement is the only vote of the holders of any class or
series of the Company's capital stock or other securities required in connection
with the consummation by the Company of the Merger and the other transactions
contemplated hereby to be consummated by the Company. The Board of Directors has
taken all necessary actions so that the restrictions on "business combinations"
(as defined in Section 203 of the DGCL) set forth in Section 203 of the DGCL are
not applicable to this Agreement and the transactions contemplated hereby,
including the Offer and the Merger. No other state takeover statute or similar
statute applies or purports to apply to the Offer, the Merger or the other
transactions contemplated hereby.
(t) RIGHTS AGREEMENT. The Company has amended its Rights
Agreement (the "Rights Amendment") to ensure that (a) neither a "Distribution
Date" nor a "Stock Acquisition Date" (in each case as defined in the Rights
Agreement) will occur, and none of Parent or Purchaser or any of their
"Affiliates" or "Associates" will be deemed to be an "Acquiring Person" (in
each case as defined in the Rights Agreement), by reason of the execution and
delivery of this Agreement or the consummation of the transactions to be
effected pursuant to this Agreement, and (b) the Rights will expire immediately
prior to the consummation of the Offer. The Rights Amendment is sufficient to
render the Rights inoperative with respect to (i) the acquisition of Shares by
Parent, Purchaser or their affiliates pursuant to this Agreement and the Offer
and (ii) the Merger. A true and correct copy of the Rights Amendment has been
delivered or made available to Parent.
(u) BROKERS. No broker, investment banker, financial advisor
or other person, other than Xxxxxx Xxxxxxx & Co., Incorporated, the fees and
expenses of which will be paid by the Company, is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission in connection
with the transactions contemplated hereby based upon arrangements made by or on
behalf of the Company or any of its Subsidiaries. A complete and accurate copy
of Xxxxxx Xxxxxxx & Co., Incorporated's engagement letter has been provided or
made available to Parent and will not be amended, without the consent of Parent,
to (i) increase the fees payable thereunder or (ii) extend the period for
35
which services are to be performed beyond the Effective Time.
(v) DISTRIBUTION AGREEMENT. Notwithstanding anything to the
contrary contained in this Agreement, the Company makes no representation nor
warranty with respect to any matter which is covered by an indemnification
obligation of IMS Health Incorporated pursuant to Section 3.2 of the
Distribution Agreement, dated as of June 30, 1998, between the Company and IMS
Health Incorporated.
Section 4.2 REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER.
Parent and Purchaser represent and warrant to the Company as follows:
(a) ORGANIZATION, STANDING AND CORPORATE POWER. Each of Parent
and Purchaser is a corporation duly incorporated, validly existing and in good
standing under the laws of the jurisdiction in which it is incorporated and has
all requisite corporate power and authority to carry on its business as now
being conducted and is duly qualified to do business and is in good standing in
each jurisdiction in which the nature of its business or the ownership or
leasing of its properties makes such qualification necessary other than in such
jurisdictions where the failure to be so qualified would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect on
Parent or Purchaser, taken as a whole. Parent has delivered or made available to
the Company complete and correct copies of the Certificate of Incorporation and
By-laws of Parent and Purchaser, in each case as in effect on the date hereof.
(b) AUTHORIZATION. Each of Parent and Purchaser have the
requisite corporate power and authority to enter into this Agreement. The
execution and delivery of this Agreement by Parent and Purchaser and the
consummation by Parent and Purchaser of the transactions contemplated hereby
have been duly authorized by the sole stockholder of each of Parent and
Purchaser, and no other corporate proceedings on the part of Parent or Purchaser
are necessary to authorize this Agreement, or to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by each
of Parent and Purchaser and, assuming this Agreement constitutes a valid and
binding obligation of the Company, constitutes a valid and binding obligation of
each of Parent and Purchaser, enforceable against each such party in accordance
with its terms.
(c) CONSENTS AND APPROVALS; NO VIOLATIONS. (i) The execution
and delivery of this Agreement by Parent and Purchaser do not, and the
consummation of the transactions contemplated hereby and compliance with the
provisions hereof will not (x)
36
violate any of the provisions of the certificate of incorporation or by-laws of
Parent, Purchaser or any of their respective Subsidiaries, in each case as
amended to the date of this Agreement, (y) subject to the governmental filings
and other matters referred to in Section 4.2(c)(ii), violate, result in a breach
of or default (with or without notice or lapse of time, or both) under, or give
rise to a material obligation, a right of termination, cancellation or
acceleration of any obligation or loss of a material benefit under, or require
the consent of any person under, any indenture, or other agreement, permit,
concession, franchise, license or other instrument or undertaking to which
Parent, Purchaser or any of their respective Subsidiaries is a party or by which
Parent, Purchaser or any of their respective Subsidiaries or any of their
respective assets is bound or affected, or (z) subject to the governmental
filings and other matters referred to in Section 4.2(c)(ii), violate any law,
rule or regulation applicable to Parent and Purchaser, or any order, writ,
judgment, injunction, decree, determination or award applicable to Parent and
Purchaser currently in effect, which, in the case of clauses (y) and (z) above,
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on Parent or Purchaser taken as a whole.
(ii) No consent, approval, order or authorization of, or
declaration, registration or filing with, or notice to, any Governmental Entity
which has not been received or made is required by or with respect to Parent or
Purchaser or any of their respective Subsidiaries in connection with the
execution and delivery of this Agreement by Parent or Purchaser or the
consummation by Parent, Purchaser of any of the transactions contemplated
hereby, except for (i) the filing of premerger notification and report forms
under the HSR Act, (ii) those filings required under the Investment Canada Act,
(iii) the filing with the SEC of (A) the Schedule 14D-1 and (B) such reports
under the Exchange Act as may be required in connection with this Agreement and
the transactions contemplated hereby, (iv) the filing of the certificate of
merger or the certificate of ownership and merger, as the case may be, with the
Secretary of State of the State of Delaware and appropriate documents with the
relevant authorities of other states in which the Company is qualified to do
business, and (v) any other consents, approvals, authorizations, filings or
notices the failure to make or obtain which would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on Parent or
Purchaser, taken as a whole.
(d) CERTAIN INFORMATION. Subject to the Company's fulfillment
of its obligations hereunder with respect thereto, the Offer Documents will
contain (or will be amended in a timely manner so as to contain) all information
which is required to be
37
included therein in accordance with the Exchange Act and the rules and
regulations thereunder and any other applicable law and will conform in all
material respects with the requirements of the Exchange Act and any other
applicable law, and the Offer Documents will not, at the respective times they
are filed with the SEC or published, sent or given to the Company's
stockholders, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they are made,
not misleading; provided, however, that no representation or warranty is hereby
made by Parent or Purchaser with respect to any information supplied by the
Company in writing for inclusion in, or with respect to the Company information
derived from the Company's public SEC filings which is included or incorporated
by reference in the Offer Documents. None of the information supplied or to be
supplied by Parent or Purchaser for inclusion or incorporation by reference in,
or which may be deemed to be incorporated by reference in, the Schedule 14D-9 or
the Proxy Statement will, at the respective times the Schedule 14D-9 and the
Proxy Statement are filed with the SEC or published, sent or given to the
Company's stockholders, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they are made,
not misleading. If at any time prior to the Effective Time any event with
respect to Parent or Purchaser, or with respect to any information supplied by
Parent or Purchaser for inclusion in the Schedule 14D-9 or the Proxy Statement,
shall occur which is required to be described in an amendment of, or a
supplement to, such document, Parent or Purchaser shall so describe the event to
the Company.
(e) VOTE REQUIRED. No vote of the holders of any class or
series of capital stock of Parent is necessary to approve this Agreement, the
Merger, the Offer or the other transactions contemplated hereby.
(f) NO BUSINESS ACTIVITIES. Purchaser has not conducted any
activities other than in connection with its organization, the negotiation and
execution of this Agreement and the consummation of the transactions
contemplated hereby.
(g) NO COMPANY CAPITAL STOCK. Neither the Guarantor nor any of
its Subsidiaries owns or holds, directly or indirectly, any Shares or any other
capital stock of the Company, or any options, warrants or other rights to
acquire any Shares or any other capital stock of the Company, or in each case,
any interests therein.
38
(h) SUFFICIENT FUNDS. At the Closing, Purchaser will have
sufficient funds to enable Purchaser to pay in full (i) the Offer
Consideration, (ii) the Merger Consideration, (iii) any existing indebtedness
that is required to be repaid as a result of the transactions contemplated
hereby, including the financing thereof, and (iv) all fees and expenses payable
by Parent and Purchaser in connection with this Agreement and the transactions
contemplated hereby. Guarantor has entered into a binding revolving credit
facility agreement under which such funds will be available at the Closing.
ARTICLE V
CONDUCT OF BUSINESS OF THE COMPANY
Section 5.1 CONDUCT OF BUSINESS OF THE COMPANY. Except as expressly
provided for herein, during the period from the date of this Agreement to the
Effective Time, the Company shall, and shall cause each of its Subsidiaries to,
act and carry on its business in the ordinary course of business consistent with
past practice and, to the extent consistent therewith, use its reasonable best
efforts to preserve intact its current business organizations, keep available
the services of its current key officers and employees and preserve the goodwill
of those engaged in material business relationships with the Company. Without
limiting the generality of the foregoing, except as expressly provided herein,
the Company shall not, and shall not permit any of its Subsidiaries to, without
the prior consent of Parent:
(i) (A) declare, set aside or pay any dividends on,
or make any other distributions (whether in cash, securities or other property)
in respect of, any of its outstanding capital stock (other than, with respect to
a Subsidiary of the Company, to its corporate parent), (B) split, combine or
reclassify any of its out standing capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in substitution
for shares of its outstanding capital stock, or (C) purchase, redeem or
otherwise acquire any shares of outstanding capital stock or any rights,
warrants or options to acquire any such shares, except, in the case of this
clause (C), for the acquisition of Shares from holders of Options in full or
partial payment of the exercise price payable by such holder upon exercise of
Options to the extent required under the terms of such Options as in effect on
the date hereof;
(ii) issue, sell, grant, pledge or otherwise encumber
any shares
39
of its capital stock, any other voting securities or any securities convertible
into or exchangeable for, or any rights, warrants or options to acquire, any
such shares, voting securities or convertible or exchangeable securities, other
than (A) upon the exercise of vested Options outstanding on the date of this
Agreement and (B) the sale of up to 60,000 shares of Common Stock (and
accompanying Rights) in accordance with the terms of the Employee Stock Purchase
Plan consistent with past practice but only to the extent such shares are sold
pursuant to elections made on or before June 30, 1999;
(iii) amend its certificate of incorporation, by-laws
or other comparable charter or organizational documents;
(iv) except to the extent contemplated by the
agreements referred to in Section 5.1(iv) of the Disclosure Letter, directly or
indirectly acquire, make any investment (other than investments not exceeding
$1,000,000 in the aggregate) in, or make any capital contributions to, any
person (other than a Subsidiary of the Company) other than in the ordinary
course of business;
(v) make any new capital expenditure or expenditures
in excess of $1,000,000 in the aggregate, other than as set forth in the
Company's budget for capital expenditures made available to Parent or the
specific capital expenditures disclosed and set forth on Schedule 5.1 of the
Disclosure Letter;
(vi) enter into, amend or terminate any Material
Contract involving expenses of at least $1,000,000 per year other than in the
ordinary course of business consistent with past practice;
(vii) directly or indirectly sell, pledge or
otherwise dispose of or encumber any of its properties or assets that are
material to its business, except for sales, pledges or other dispositions or
encumbrances in the ordinary course of business consistent with past practice;
(viii) (A) other than in connection with any action
permitted by Section 5.1(iv), incur any indebtedness for borrowed money or
guarantee any such indebtedness of another person, other than indebtedness owing
to or guarantees of indebtedness owing to the Company or any direct or indirect
wholly owned Subsidiary of the Company or (B) make any loans or advances to any
other person, other than to the Company or to any direct or indirect wholly
owned Subsidiary of the Company and other
40
than routine advances to employees consistent with past practice, except, in the
case of clause (A), for borrowings under the Credit Agreements (without
increases in existing limits) in the ordinary course of business;
(ix) grant or agree to grant to any director, officer
or employee (other than officers and employees who receive less than $200,000 in
total annual cash compensation from the Company or any of its Subsidiaries), any
increase in wages or bonus, severance, profit sharing, retirement, deferred
compensation, insurance or other compensation or benefits to such officers and
employees, or establish any new compensation or benefit plans or arrangements,
or amend or agree to amend any existing Company Plans, except as may be required
under this Agreement, existing agreements or by law;
(x) except as set forth in this Agreement and except
as required under the existing Company Plans, accelerate the payment, right to
payment or vesting of any bonus, severance, profit sharing, retirement, deferred
compensation, stock option, insurance or other compensation or benefits;
(xi) enter into or amend any employment, severance or
similar agreement with any existing officers or employees (other than officers
and employees who receive less than $200,000 in total annual cash compensation
from the Company or any of its Subsidiaries), except for severance agreements
entered into to the extent required pursuant to severance plans existing on the
date hereof;
(xii) make or rescind any tax election or settle or
compromise any income tax liability of the Company or of any of its Subsidiaries
with any Governmental Entity or settle any action, suit, claim, investigation or
proceeding with any Government Entity (legal, administrative or arbitrative) in
an amount in excess of $500,000;
(xiii) pay, discharge or satisfy any claims,
liabilities or obligations, other than the payment, discharge or satisfaction
(x) of any such claims, liabilities or obligations in the ordinary course of
business or (y) of claims, liabilities or obligations reflected or reserved
against in, or contemplated by, the consolidated financial statements (or the
notes thereto) of the Company and its consolidated Subsidiaries or (z) other
than settlements which involve solely the payment of money that would not result
in an uninsured or underinsured payment by or liability of the Company in excess
of $2,000,000 in the aggregate above reserves established therefor on the books
of the
41
Company;
(xiv) except as disclosed in the Filed SEC Documents
or required by a Governmental Entity, make any change in any method of
accounting or accounting practice or policy, except as required by generally
accepted accounting principles;
(xv) enter into any agreement, understanding or
commitment that materially restrains, limits or impedes the Company's ability to
compete with or conduct any material line of business, including, but not
limited to, geographic limitations on the Company's activities;
(xvi) plan, announce, implement or effect any
reduction in force, lay-off, early retirement program, severance program or
other program or effort concerning the termination of employment of employees of
the Company or its Subsidiaries, provided, however, that routine employee
terminations shall not be considered subject to this clause (xvi);
(xvii) amend or modify in any material respect, waive
any rights under or terminate any agreements existing on the date hereof between
the Company and NetRatings; or
(xviii) authorize any of, or commit or agree to take
any of, the foregoing actions in respect of which it is restricted by the
provisions of this Section 5.1 except to the extent such action is otherwise
expressly contemplated by this Agreement.
ARTICLE VI
ADDITIONAL COVENANTS
Section 6.1 THE COMPANY STOCKHOLDERS MEETING; PREPARATION OF THE PROXY
STATEMENT; SHORT-FORM MERGER.
(a) As soon as practicable following the acceptance for
payment of and payment for Shares by Purchaser in the Offer, if required by law
to consummate the Merger, the Company shall with the cooperation of Parent take
all action necessary, in
42
accordance with the DGCL, the Exchange Act and other applicable law and its
certificate of incorporation and by-laws to convene and hold a special
meeting of the stockholders of the Company (the "Stockholders Meeting") for
the purpose of considering and voting upon the adoption of this Agreement and
to solicit proxies pursuant to the Proxy Statement in connection therewith.
The Board of Directors of the Company shall recommend that the holders of
Shares vote in favor of the adoption of this Agreement at the Stockholders
Meeting and shall cause such recommendation to be included in the Proxy
Statement. At the Stockholders Meeting, Parent and Purchaser shall cause all
of the Shares owned by them to be voted in favor of the adoption of this
Agreement.
(b) The Company, if requested by Parent, shall promptly
prepare and file with the SEC a proxy statement or information statement
(together with any supplement or amendment thereto, the "Proxy Statement")
relating to the Stockholders Meeting in accordance with the Exchange Act and
the rules and regulations thereunder. Parent, Purchaser and the Company will
cooperate with each other in the preparation of the Proxy Statement. Without
limiting the generality or effect of the foregoing, the Company shall use its
best efforts to respond to all SEC comments with respect to the Proxy Statement
and, subject to compliance with SEC rules and regulations, to cause the Proxy
Statement to be mailed to the Company's stockholders at the earliest
practicable date. Each of Parent and Purchaser shall promptly supply to the
Company in writing, for inclusion in the Proxy Statement, all information
concerning Parent and Purchaser required under the Exchange Act and the rules
and regulations thereunder to be included in the Proxy Statement.
(c) Notwithstanding the foregoing clauses (a) and (b), in the
event that Purchaser shall acquire at least 90% of the outstanding Shares in the
Offer, Purchaser and Parent shall take all necessary actions to cause the Merger
to become effective, as soon as practicable after the expiration of the Offer,
without a meeting of stockholders of the Company, in accordance with Section 253
of the DGCL.
Section 6.2 ACCESS TO INFORMATION; NOTIFICATION OF CERTAIN MATTERS. (a)
Subject to the provisions of any confidentiality agreement by which the Company
is bound (provided that the Company shall advise Parent that information is not
being provided as a result thereof and whether such information, in the good
faith belief of the Company, has had or would reasonably be expected to have a
Material Adverse Effect on the Company), the Company shall, and shall cause each
of its Subsidiaries to, afford to Parent and its officers, employees, counsel,
financial advisors and other representatives prompt, reasonable access during
the period prior to the Effective Time to all of the Company's and its
43
Subsidiaries' properties, books, contracts, commitments, Returns, personnel and
records and, during such period, the Company shall, and shall cause each of its
Subsidiaries to, furnish as promptly as practicable to Parent such information
concerning the Company's and its Subsidiaries' businesses, properties, financial
condition, operations and personnel as Parent may from time to time reasonably
request. Any such investigation by Parent shall not affect the representations
or warranties of the Company contained in this Agreement. Parent will hold any
information provided under this Section 6.2 that is non-public in confidence to
the extent required by, and in accordance with, the provisions of the letter
dated July 28, 1999 (the "Letter Agreement"), between the Company and Guarantor.
(b) The Company shall give prompt notice to Parent of (i) the
occurrence or non-occurrence of any event which would cause any representation
or warranty contained in this Agreement to be untrue or inaccurate in any
material respect at or prior to the Effective Time and (ii) any material failure
of the Company to comply with or satisfy any covenant, condition or agreement to
be complied with or satisfied by it hereunder, in either case which would
reasonably be expected to cause any of the conditions set forth in clause
(vi)(b), (vi)(c) or (vi)(e) of Exhibit A hereto to fail to be satisfied;
provided, however, that the delivery of any notice pursuant to this Section
6.2(b) shall not limit or otherwise affect the rights or remedies available
hereunder to Parent; provided further that this Section 6.2(b) shall not
constitute a covenant or agreement for the purpose of Section 8.1(e)(v) or
clause (vi)(c) of Exhibit A hereto.
Section 6.3 REASONABLE BEST EFFORTS. On the terms and subject to the
conditions set forth in this Agreement, including, without limitation, Section
6.5 hereof, each of the parties shall use its reasonable best efforts to take,
or cause to be taken, all actions, and do, or cause to be done, and assist and
cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the Offer, the Merger and the other transactions contemplated
hereby, including the satisfaction of the respective conditions set forth in
Article VII.
44
Section 6.4 PUBLIC ANNOUNCEMENTS. Parent and Purchaser, on the one
hand, and the Company, on the other hand, shall attempt in good faith to consult
with each other before issuing, and provide each other the opportunity to review
and comment upon, any press release, SEC filing (including without limitation
the Offer Documents, the Schedule 14D-9 and the Proxy Statement) or other public
statements with respect to the transactions contemplated hereby, including the
Offer and Merger, and shall not issue any such press release or make any such
public statement prior to such consultation, except as may be required by
applicable law, by court process or by obligations pursuant to any listing
agreement with any securities exchange.
Section 6.5 NO SOLICITATION. From the date hereof, the Company shall
not (whether directly or indirectly through advisors, agents or other
intermediaries), and the Company shall use its reasonable best efforts to cause
its respective officers, directors, advisors, representatives and other agents
of the Company not to, directly or indirectly, (a) solicit, initiate or
knowingly encourage any inquiries relating to, or the submission of, any
Acquisition Proposal (as hereinafter defined), (b) participate in any
discussions or negotiations regarding any Acquisition Proposal, or, in
connection with any Acquisition Proposal, furnish to any person any information
or data with respect to or access to the properties of the Company or any of its
Subsidiaries, or take any other action to facilitate the making of any proposal
that constitutes or may reasonably be expected to lead to, any Acquisition
Proposal or (c) enter into any agreement with respect to any Acquisition
Proposal or approve or resolve to approve any Acquisition Proposal; provided
that if the Board of Directors of the Company has concluded in good faith, based
on the advice of outside counsel, that such action is reasonably necessary for
the Board of Directors to act in a manner consistent with its fiduciary duties
under applicable law, then the Company may furnish information with respect to
the Company and its Subsidiaries and participate in discussions or negotiations
regarding such Acquisition Proposal, in which case the Company will not disclose
any information to such person without entering into a confidentiality agreement
substantially identical to the Letter Agreement (it being understood that the
Company may enter into a confidentiality agreement without a standstill or with
a standstill provision less favorable to the Company if it waives or similarly
modifies the standstill provision in the Letter Agreement). The Company shall
promptly (but in no case later than 24 hours after receipt) provide Parent with
a copy of any written Acquisition Proposal received and a written statement with
respect to any non-written Acquisition Proposal received, which statement shall
include the identity of the parties making the Acquisition Proposal and the
material terms thereof. The Company shall keep Parent informed on a current
basis of the status and content of any discussions regarding
45
any Acquisition Proposal with a third party. For purposes of this Agreement,
"Acquisition Proposal" means any offer or proposal for a merger, consolidation,
share exchange, recapitalization, liquidation or other business combination
involving the Company or any of its Subsidiaries or the acquisition or purchase
of 20% or more of any class of equity securities of the Company or any of its
Subsidiaries, or any tender offer (including self-tenders) or exchange offer
that if consummated would result in any person beneficially owning 20% or more
of any class of equity securities of the Company or any of its Subsidiaries, or
a substantial portion of the assets of, the Company or any of its Subsidiaries,
other than the transactions contemplated by this Agreement. As used herein, a
"Superior Proposal" shall mean an Acquisition Proposal which the Board of
Directors determines, in good faith after consultation with an independent,
nationally recognized investment banking firm, (i) if consummated would result
in a transaction more favorable to the Company's stockholders, from a financial
point of view, than the transactions contemplated by this Agreement and (ii) is
reasonably capable of being financed by the person making such Acquisition
Proposal. Nothing contained in this Section 6.5 shall prohibit the Company or
the Company's Board of Directors from taking and disclosing to the Company's
stockholders a position contemplated by Rules 14d-9 and 14e-2(a) promulgated
under the Exchange Act (or any similar communications in connection with the
making or amendment of a tender offer or exchange offer) or from making any
disclosure required by applicable law or, prior to the consummation of the
Offer, from taking any action contemplated by Section 8.1(d)(i), including
having the Board of Directors take such actions as are necessary to approve or
resolve to approve the intention to enter into an agreement with respect to a
Superior Proposal (or any announcement in connection therewith) or enter into an
agreement with respect to a Superior Proposal concurrently with termination
pursuant to Section 8.1(d)(i).
Section 6.6 CONSENTS, APPROVALS AND FILINGS. (a) Upon the terms and
subject to the conditions hereof, each of the parties hereto shall (i) make
promptly its respective filings, and thereafter make any other required
submissions, under the HSR Act, the Exchange Act and any other relevant statute,
rule or regulation, with respect to the Offer, the Merger and the other
transactions contemplated hereby and (ii) use reasonable best efforts (or, in
connection with obtaining antitrust approval from any Governmental Entity, best
efforts) to take, or cause to be taken, all appropriate action, and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the Offer, the Merger and
the other transactions contemplated hereby, including without limitation using
reasonable best efforts (or, in connection with obtaining antitrust approval
from any Governmental Entity, best
46
efforts) to obtain all licenses, permits, consents, approvals, authorizations,
qualifications and orders of Governmental Entities and cooperate to obtain all
consents, approvals and authorizations (without out-of-pocket expense to the
Company) of parties to contracts with the Company and its Subsidiaries as are
necessary for the consummation of the Offer, the Merger and the other
transactions contemplated hereby and to fulfill the conditions to the Offer and
the Merger. In case at any time after the Effective Time any further action is
necessary or desirable to carry out the purposes of this Agreement, the proper
officers and directors of each party to this Agreement shall use their
reasonable best efforts to take all such action.
(b) Notwithstanding anything to the contrary herein, Parent
agrees to, and to cause its affiliates to, promptly take all steps necessary to
secure government antitrust clearance for the consummation of the transactions
contemplated hereby as soon as practicable but by no later than December 22,
1999. Parent agrees to give the Company reasonable notice of any meetings prior
to the Closing Date with any Governmental Entity regarding the transactions
contemplated hereby and the Company at its option may have representatives at
such meetings.
(c) Notwithstanding anything to the contrary herein, Parent
agrees to use its best efforts to take, or cause to be taken, all necessary
action and to do, or cause to be done, all things necessary to satisfy the
condition to the Offer set forth in clause (iv) of Exhibit A; provided that
nothing in this Agreement shall require Guarantor or any of its Subsidiaries to
take, or cause to be taken, or do or cause to be done, any action which would
result in a material detriment to Guarantor and its Subsidiaries or would result
in a material restriction on the business activities thereof.
(d) Upon receiving written advice from the Works' Council of
VNU that is not Positive Advice or Acceptable Conditional Advice (as such terms
are defined in Exhibit A hereto), Parent shall cause VNU to, as promptly as
practicable and in any event within five days thereof, notify the Works' Council
in writing, as required by the Netherlands Works Council Act, as to its
intention to enter into the Facility (as defined in Exhibit A hereto) and issue
the Facility Guarantee (as defined in Exhibit A hereto).
47
Section 6.7 EMPLOYEE BENEFIT PLANS.
(a) Parent agrees that those individuals who are employed by
the Company or any of its Subsidiaries immediately prior to the Effective Time
shall continue to be employees of the Surviving Entity as of the Effective Time
(each such employee, "Affected Employee"); PROVIDED, HOWEVER, that this Section
6.7 shall not be construed to limit the ability of the applicable employer to
terminate the employment of any Affected Employee at any time.
(b) For a period of 12 months following the Effective Time,
Parent shall, or shall cause the Surviving Corporation to, provide each Affected
Employee with employee benefits that are no less favorable in the aggregate than
those provided to each such Affected Employee immediately prior to the Effective
Time, provided that Parent shall not be required to provide equity-based
compensation to any Affected Employees. Parent shall, for a period of 12 months
following the Effective Time, maintain (or cause its Subsidiaries to maintain) a
severance pay practice, program or arrangement for the benefit of each Affected
Employee that is no less favorable than such practice, program or arrangement in
effect immediately prior to the Effective Time with respect to such Affected
Employee.
(c) Parent shall, or shall cause the Surviving Entity to, give
Affected Employees full credit for purposes of eligibility, vesting and benefit
accrual (except for benefit accruals under any defined benefit pension plan)
under such employee benefit plans or arrangements maintained by the Parent or
the Surviving Corporation in which such Affected Employees participate for such
Affected Employees' service with the Company or any Subsidiary of the Company to
the same extent recognized by the Company or such Subsidiary immediately prior
to the Effective Time.
(d) Parent shall, or shall cause the Surviving Entity to, (i)
waive all limitations as to preexisting conditions exclusions and waiting
periods with respect to participation and coverage requirements applicable to
the Affected Employees under any welfare benefit plans in which such Affected
Employees may be eligible to participate after the Effective Time, other than
limitations or waiting periods that are already in effect with respect to such
Affected Employees and that have not been satisfied as of the Effective Time
under any welfare plan maintained for the Affected Employees immediately prior
to the Effective Time, and (ii) provide each Affected Employee with credit for
any co-payments and deductibles paid prior to the Effective Time in satisfying
any applicable
48
deductible or out-of-pocket requirements under any welfare plans that such
Affected Employees are eligible to participate in after the Effective Time.
Section 6.8 INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE.
(a) For a period of six years after the Effective Time, the
provisions with respect to indemnification, exculpation and advancement of
expenses set forth in the certificate of incorporation and by-laws of the
Company as in effect on the date of this Agreement (true, correct and complete
copies of which have been made available to Parent) shall not be amended,
repealed or otherwise modified in any manner that would adversely affect the
rights thereunder of individuals who at any time prior to the Effective Time
were directors or officers of the Company in respect of actions or omissions
occurring at or prior to the Effective Time (including without limitation the
transactions contemplated by this Agreement), unless such modification is
required by law.
(b) From and after the Effective Time, Parent shall cause the
Surviving Corporation and its successors to, indemnify, defend and hold harmless
each person who is now, or has been at any time prior to the date hereof or who
becomes prior to the Effective Time, an officer or director of the Company (the
"Covered Parties") against all losses, claims, damages, costs, expenses
(including reasonable attorneys' fees and expenses), liabilities or judgments or
amounts that are paid in settlement with the approval of the indemnifying party
(which approval shall not be unreasonably withheld or delayed) incurred in
connection with any threatened or actual action, suit or proceeding based in
whole or in part on or arising in whole or in part out of the fact that such
person is or was a director or officer of the Company ("Indemnified
Liabilities"), including all Indemnified Liabilities based in whole or in part
on, or arising in whole or in part out of, this Agreement or the transactions
contemplated hereby, in each case, to the full extent that a corporation is
permitted under the DGCL to indemnify its own directors or officers, as the case
may be. In the event any such claim, action, suit, proceeding or investigation
is brought against any Covered Party, the indemnifying party shall assume and
direct all aspects of the defense thereof, including settlement, and the Covered
Party shall cooperate in the vigorous defense of any such matter. The Covered
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. Notwithstanding the
right of the indemnifying party to assume and control the defense of such
litigation, claim or proceeding, such Covered Party shall have the right to
employ separate counsel and to participate in the defense of such litigation,
claim or proceeding, and the indemnifying party shall bear the fees, costs and
expenses of such
49
separate counsel and shall pay such fees, costs and expenses promptly after
receipt of an invoice from such Covered Party if (i) the use of counsel chosen
by the indemnifying party to represent such Covered Party would present such
counsel with a conflict of interest, (ii) the defendants in, or targets of, any
such litigation, claim or proceeding shall have been advised by counsel that
there may be legal defenses available to it or to other Covered Parties which
are different from or in addition to those available to the indemnifying party,
or (iii) the indemnifying party shall not have employed counsel satisfactory to
such Covered Party, in the exercise of the Covered Party's reasonable judgment,
to represent such Covered Party within a reasonable time after notice of the
institution of such litigation, claim or proceeding. The indemnifying party
shall not settle any such matter unless (i) the Covered Party gives prior
written consent, which shall not be unreasonably withheld or delayed, or (ii)
the terms of the settlement provide that the Covered Party shall have no
responsibility for the discharge of any settlement amount and impose no other
obligations or duties on the Covered Party and the settlement discharges all
rights against Covered Party with respect to such matter. In no event shall the
indemnifying party be liable for any settlement effected without its prior
written consent. Any Covered Party wishing to claim indemnification under this
Section 6.8(b), upon learning of any such claim, action, suit, proceeding or
investigation, shall promptly notify Parent 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 Section 6.8(b) except to the extent such
failure materially prejudices such indemnifying party), and shall deliver to
Parent and the Surviving Corporation the undertaking contemplated by Section
145(e) of the DGCL. The Covered Parties as a group will be represented by a
single law firm (plus no more than one local counsel in any jurisdiction) with
respect to each such matter unless there is, under applicable standards of
professional conduct, a conflict on any significant issue between the positions
of any two or more Covered Parties. The rights to indemnification under this
Section 6.8(b) shall continue in full force and effect for a period of six years
from the Effective Time; provided, however, that all rights to indemnification
in respect of any Indemnified Liabilities asserted or made within such period
shall continue until the disposition of such Indemnified Liabilities.
(c) For a period of six years after the Effective Time, Parent
shall cause to be maintained in effect policies of directors' and officers'
liability insurance, for the benefit of those persons who are covered by the
Company's directors' and officers' liability insurance policies at the Effective
Time, providing coverage with respect to matters occurring prior to the
Effective Time that is at least equal to the coverage provided under the
Company's current directors' and officers' liability insurance policies, to the
extent that
50
such liability insurance can be maintained at an annual cost to Parent not
greater than 200 percent of the premium for the current Company directors' and
officers' liability insurance; provided that if such insurance cannot be so
maintained at such cost, Parent shall maintain as much of such insurance as can
be so maintained at a cost equal to 200 percent of the current annual premiums
of the Company for such insurance.
(d) In the event that Parent or the Surviving Corporation or
any of its successors or assigns (i) consolidates with or merges into any other
person and shall not be the continuing or surviving corporation or entity of
such consolidation or merger or (ii) transfers or conveys all or substantially
all of its properties and assets to any person, then, and in each such case,
proper provision shall be made so that the successors or assigns of Parent or
the Surviving Corporation shall succeed to the obligations set forth in Section
6.7 and this Section 6.8.
Section 6.9 AGREEMENTS WITH NETRATINGS, INC.. From and after the date
hereof, the Company shall not, without the prior written consent of Parent,
amend, modify or terminate any of its agreements with NetRatings or enter into
any agreements or arrangements in respect of NetRatings other than agreements
and arrangements in the ordinary course of business which are reasonably
necessary to give effect to the operation of the arrangements with NetRatings on
the date hereof.
Section 6.10 CERTAIN TAX MATTERS. Each of Parent and the Company will
act in good faith and use its reasonable best efforts (i) to obtain the opinion
of counsel to the Company referred to in clause (iii) of Exhibit A, and (ii) to
cause the appropriate officers of VNU and the Company, respectively, to deliver
the representation letters addressed to counsel to Parent and counsel to the
Company in the form agreed upon by Parent and the Company on or prior to the
date hereof in connection with such opinion. The Company will request in good
faith that Xxxxxx Xxxxxxxx deliver the representation letter addressed to
counsel to the Company and counsel to Parent in the form agreed upon by Parent
and the Company on or prior to the date hereof in connection with such opinion.
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER.
The
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respective obligation of each party to effect the Merger shall be subject to the
satisfaction or written waiver on or prior to the Closing Date of the following
conditions:
(a) COMPLETION OF THE OFFER. Purchaser shall have accepted for
payment and paid for all Shares validly tendered in the Offer and not withdrawn;
provided, however, that neither Parent nor Purchaser may invoke this condition
if Purchaser shall have failed to purchase Shares so tendered and not withdrawn
in violation of the terms of this Agreement or the Offer.
(b) STOCKHOLDER APPROVAL. This Agreement shall have been
adopted by the affirmative vote of the holders of the requisite number of shares
of capital stock of the Company if such vote is required pursuant to the
Company's certificate of incorporation, the DGCL or other applicable law.
(c) NO INJUNCTIONS OR RESTRAINTS. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger shall be in effect; provided, however, that prior to
invoking this condition, the party so invoking this condition shall have
complied with its obligations under Section 6.3 and Section 6.6 and the parties
hereto shall have used their best efforts to lift or remove such order,
injunction, restraint or prohibition.
(d) HSR ACT. All necessary waiting periods under the HSR Act
applicable to the Merger shall have expired or been earlier terminated.
ARTICLE VIII
TERMINATION
Section 8.1 TERMINATION. This Agreement may be terminated and the
Merger contemplated herein may be abandoned at any time prior to the Effective
Time, whether before or after approval of matters presented in connection with
the Merger by the stockholders of Purchaser or, subject to the terms hereof, of
the Company:
(a) By the mutual written consent of Parent and the Company;
PROVIDED, HOWEVER, that if Parent shall have nominated a majority of the
directors pursuant to Section 1.4, such consent of the Company may only be given
if approved by the Board
52
of Directors of the Company in accordance with Section 1.4(c).
(b) By either of Parent or the Company if (i) a statute, rule
or executive order shall have been enacted, entered or promulgated prohibiting
the transactions contemplated hereby on the terms contemplated by this Agreement
or (ii) any Governmental Entity shall have issued an order, decree or ruling or
taken any other action (which order, decree, ruling or other action the parties
hereto shall use their reasonable best efforts (or, in connection with obtaining
antitrust approval from any Governmental Entity, best efforts) to lift), in each
case permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated hereby and such order, decree, ruling or other action
shall have become final and non-appealable.
(c) By either of Parent or the Company if the consummation of
the Offer shall not have occurred on or before December 22, 1999 (the
"Termination Date"); PROVIDED, HOWEVER, that the party seeking to terminate this
Agreement pursuant to this Section 8.1(c) shall not have breached in any
material respect its obligations under this Agreement; and PROVIDED, FURTHER,
that the Termination Date shall be extended to such later date (but in no event
later than April 7, 2000) as the Offer shall have been extended by Purchaser at
the request of the Company pursuant to the third sentence of Section 1.1(c)
hereof, unless a condition to consummation of the Offer (other than the
condition referred to in clause (iv) of Exhibit A) shall not have been satisfied
and either (x) Parent can reasonably demonstrate that such failure to be
satisfied resulted from a reason other than the failure of the condition set
forth in such clause (iv) to be satisfied or (y) such condition failed to be
satisfied as a result of a material breach by the Company of its obligations
hereunder.
(d) By the Company:
(i) if, prior to the purchase of the Shares pursuant
to the Offer, (A) the Board of Directors of the Company directs the Company to
notify Parent in writing that it intends to enter into an agreement with respect
to a Superior Proposal, attaching the most current version of such agreement (or
a description of all material terms and conditions thereof) to such notice, (B)
Parent does not make, within four business days of receipt of the Company's
written notification of its intention to enter into a binding agreement for a
Superior Proposal, an offer that the Board of Directors of the Company
determines, in good faith after consultation with its financial advisors, is at
least as favorable to the stockholders of the Company as such Superior Proposal,
it being understood that
53
the Company shall not enter into any such binding agreement during such four-day
period and (C) the Company prior to such termination pursuant to this clause
(d)(i) pays to Parent in immediately available funds the Termination Fee (as
such term is defined in Section 9.1). The Company agrees to notify Parent
promptly if its intention to enter into a written agreement referred to in its
notification shall change at any time after giving effect to such notification;
or
(ii) if Parent or Purchaser shall have terminated the
Offer or the Offer expires without Parent or Purchaser, as the case may be,
purchasing any Shares pursuant thereto; provided that the Company may not
terminate this Agreement pursuant to this Section 8.1(d)(ii) if the Company is
in material breach of this Agreement; or
(iii) prior to the consummation of the Offer, if (i)
there shall be a breach of any representation or warranty of Parent or Purchaser
in this Agreement that is qualified as to Material Adverse Effect, (ii) there
shall be a breach in any material respect of any representation or warranty of
Parent or Purchaser in this Agreement that is not so qualified, other than any
such breaches which, in the aggregate, have not had or would not reasonably be
likely to have a Material Adverse Effect on Parent and Purchaser, taken as a
whole, or (iii) there shall be a material breach by Parent or Purchaser of any
of its covenants or agreements contained in this Agreement, which breach, in the
case of clause (i), (ii) or (iii), either is not reason ably capable of being
cured or, if it is reasonably capable of being cured, has not been cured within
the earlier of (x) 10 days after giving of notice to Parent of such breach and
(y) the expiration of the Offer, provided that the Company may not terminate
this Agreement pursuant to this Section 8.1(d)(iii) if the Company is in
material breach of this Agreement.
(e) By Parent or Purchaser:
(i) if, prior to the purchase of the Shares pursuant
to the Offer, the Board of Directors of the Company shall have withdrawn, or
modified or changed in a manner adverse to Parent or Purchaser, its approval or
recommendation of the Offer, this Agreement or the Merger or shall have
recommended or approved an Acquisition Proposal, it being understood and agreed
that neither the delivery of notice pursuant to Section 8.1(d)(i) and any
subsequent public announcement of such notice nor any communication by the Board
of Directors of the Company to the stockholders of the Company pursuant to Rule
14d-9(e)(3) under the Exchange Act (or any similar communication to the
stockholders of the Company in connection with the making or
54
amendment of a tender offer or exchange offer) shall entitle Parent to terminate
this Agreement pursuant to this Section 8.1(e)(i), unless the Company enters
into a definitive agreement with respect to an Acquisition Proposal; or
(ii) if there shall have been a material breach by
the Company of any provision of Section 6.5; or
(iii) if the Offer has expired or terminated without
Parent or Purchaser purchasing any Shares thereunder and, pursuant to Exhibit A
and Article I hereof, Purchaser is neither required to accept and pay for the
Shares tendered in the Offer nor extend the expiration date of the Offer,
PROVIDED that Parent or Purchaser may not terminate this Agreement pursuant to
this Section 8.1(e)(iii) if Parent or Purchaser is in material breach of this
Agreement; or
(iv) if the Company shall have (i) exempted for
purposes of Section 203 of the DGCL any acquisition of Shares by any person or
"group" (as defined in Section 13(d)(3) of the Exchange Act), other than Parent,
Purchaser or their affiliates, or (ii) amended (or agreed to amend) its Rights
Agreement or redeemed (or agreed to redeem) its outstanding Rights thereunder
for the purpose of exempting an acquisition of Shares from such Rights Agreement
and Rights; or
(v) prior to the consummation of the Offer if (i)
there shall be a breach of any representation or warranty of the Company in this
Agreement that is qualified as to Material Adverse Effect, (ii) there shall be a
breach in any material respect of any representation or warranty of the Company
in this Agreement that is not so qualified other than any such breaches which,
in the aggregate, have not had or would not reasonably be likely to have a
Material Adverse Effect on the Company, or (iii) there shall be a material
breach by the Company of any of its covenants or agreements contained in this
Agreement, which breach, in the case of clause (i), (ii) or (iii), either is not
reasonably capable of being cured or, if it is reasonably capable of being
cured, has not been cured within the earlier of (x) 10 days after giving of
written notice to the Company of such breach and (y) the expiration of the
Offer; PROVIDED, FURTHER, that Parent or Purchaser may not terminate this
Agreement pursuant to this Section 8.1(e)(v) if Parent or Purchaser is in
material breach of this Agreement.
Section 8.2 EFFECT OF TERMINATION. (a) In the event of termination of
this Agreement by either the Company or Parent or Purchaser as provided in
Section 8.1, this
55
Agreement shall forthwith become void and have no effect, without any liability
or obligation on the part of Parent, Purchaser or the Company, other than the
provisions of Section 6.2(a), this Section 8.2 and Article IX and except to the
extent that such termination results from the material breach by a party of any
of its representations, warranties, covenants or agreements set forth in this
Agreement.
(b) Notwithstanding the foregoing, if
(i) the only condition(s) to the consummation of the
Offer that were not satisfied prior to the termination of this Agreement were
the condition set forth in clause (iii) of Exhibit A and those conditions that
either (A) the Company can reasonably demonstrate were not satisfied due to the
failure of the condition set forth in such clause (iii) to be satisfied or (B)
were not satisfied as a result of a material breach by Parent or Purchaser of
its obligations hereunder; and
(ii) the condition set forth in clause (iii) of
Exhibit A is not satisfied solely because of the failure of the appropriate
officer of VNU to execute the representation letter of VNU to counsel to the
Company and counsel to Parent in form and substance not materially different
from the form of representation letter agreed upon by Parent and the Company on
or prior to the date of this Agreement,
then the Company shall be entitled to receive from Parent, as liquidated
damages, an amount (not to exceed $10 million) equal to the Company's actual
out-of-pocket expenses incurred by it in connection with the Offer, the Merger,
this Agreement and the consummation of the transactions contemplated hereby.
(c) Notwithstanding the foregoing, if
(i) the only condition(s) to the consummation of the
Offer that were not satisfied prior to the termination of this Agreement were
the condition set forth in clause (iii) of Exhibit A and those conditions that
either (A) Parent can reasonably demonstrate were not satisfied due to the
failure of the condition set forth in such clause (iii) to be satisfied or (B)
were not satisfied as a result of a material breach by the Company of its
obligations hereunder; and
(ii) the condition set forth in clause (iii) of
Exhibit A is not satisfied solely because of the failure of the appropriate
officer of the Company to execute the
56
representation letter of the Company to counsel to Parent and counsel to the
Company in form and substance not materially different from the form of
representation letter agreed upon by the Company and Parent on or prior to the
date of this Agreement;
then Parent shall be entitled to receive from the Company, as liquidated
damages, an amount (not to exceed $10 million) equal to VNU's, Parent's and
Purchaser's actual out-of-pocket expenses incurred by it in connection with the
Offer, the Merger, this Agreement and the consummation of the transactions
contemplated hereby (including the proposed financing thereof).
(d) The parties agree that there shall be no other remedy
arising out of (i) the failure of appropriate officers of VNU to execute the
representation letter contemplated herein, provided that Parent shall not have
wilfully breached its obligations pursuant to clause (ii) of the first sentence
of Section 6.10, or (ii) the failure of appropriate officers of the Company to
execute the representation letter contemplated herein, provided that the Company
shall not have wilfully breached its obligations pursuant to clause (ii) of the
first sentence, or the second sentence, of Section 6.10.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 FEES AND EXPENSES. (a) Except as provided in Section 9.1(b)
and Section 9.1(c) below, all fees and expenses incurred in connection with the
Offer, the Merger, this Agreement and the transactions contemplated hereby shall
be paid by the party incurring such fees or expenses, whether or not the Offer
or the Merger is consummated.
(b) If (x) Parent or Purchaser terminates this Agreement
pursuant to Section 8.1(e)(i) or (iv), or (y) the Company terminates this
Agreement pursuant to Section 8.1(d)(i), then in each case, the Company shall
pay, or cause to be paid, to Parent, at or prior to the time of termination in
the case of a termination pursuant to Section 8.1(d)(i) or as promptly as is
reasonably practicable (but in no event later than two business days) in the
case of a termination pursuant to Section 8.1(e)(i) or (iv), an amount (the
"Termination Fee") equal to $70 million less any amount paid by or due from the
Company pursuant to Section 8.2(c). In addition, if:
57
(i) this Agreement is terminated pursuant to Section
8.1(e)(ii), 8.1(e)(iii) or 8.1(d)(ii) (provided, however, that this clause (i)
shall not be deemed satisfied if (A) the only conditions to the Offer that were
not satisfied were the condition set forth in clause (iii) of Exhibit A and
those conditions that either (x) the Company can reasonably demonstrate were not
satisfied due to the failure of the condition set forth in such clause (iii) to
be satisfied or (y) were not satisfied as a result of a material breach by
Parent or Purchaser of its obligations hereunder and (B) the condition set forth
in clause (iii) of Exhibit A was not satisfied solely because of the occurrence
of an event set forth in clause (x) thereof and/or the failure of Parent to
deliver the representation letter referred to in clause (y) thereof);
(ii) on the date of such termination no condition to
the Offer has failed to be satisfied as a result of a material breach of this
Agreement by Parent or Purchaser and prior thereto there shall have been
publicly announced, and not withdrawn in good faith, an Acquisition Proposal;
and
(iii) within 15 months after such termination, the
Company shall enter into an agreement with respect to any Acquisition Proposal,
then the Company shall pay the Termination Fee concurrently with entering into
any such agreement.
(c) If the condition set forth in clause (iv) of Exhibit A is
not satisfied and this Agreement is terminated pursuant to Section 8.1(c),
unless a condition to consummation of the Offer (other than the condition
referred to clause (iv) of Exhibit A) shall not have been satisfied and either
(x) Parent can reasonably demonstrate that such failure to be satisfied resulted
from a reason other than the failure of the condition set forth in such clause
(iv) to be satisfied or (y) such condition failed to be satisfied as a result of
a material breach by the Company of its obligations hereunder, then Parent shall
pay, or cause to be paid, to the Company an amount equal to $70,000,000 less any
amount paid by or due from Parent pursuant to Section 8.2(b), which shall be
paid (x) at or prior to such termination by Parent and as a condition to such
termination or (y) not later than two business days following such termination
by the Company.
(d) Any payments required to be made pursuant to this Section
9.1 shall be made by wire transfer of same day funds to an account designated by
the recipient.
58
Section 9.2 CERTAIN DEFINITIONS. For purposes of this Agreement:
(a) an "affiliate" of any person means another person that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such first person;
(b) "business day" means any day other than Saturday, Sunday
or any other day on which banks in the City of New York are required or
permitted to close;
(c) "counsel to Parent" means Skadden, Arps, Slate, Xxxxxxx &
Xxxx LLP;
(d) "including" means including without limitation;
(e) "knowledge" means the knowledge of any officer of the
Company identified on Section 9.2 of the Disclosure Letter, as the case may be;
(f) a "person" means an individual, corporation, partnership,
joint venture, association, trust, unincorporated organization or other entity;
and
(g) a "Subsidiary" of any person means any other person of
which (i) such person or any Subsidiary thereof is a general partner, (ii) such
person and/or one or more of its Subsidiaries holds voting power to elect a
majority of the board of directors or others performing similar functions, or
(iii) such person, directly or indirectly, owns or controls more than 50% of the
equity interests of such other person; provided that neither CZT/ACN Trademarks,
L.L.C., NetRatings nor any of their Subsidiaries shall be a Subsidiary of the
Company.
Section 9.3 AMENDMENT AND MODIFICATION. This Agreement may be amended,
modified and supplemented in any and all respects, whether before or after any
vote of Purchaser or the stockholders of the Company contemplated hereby, by
written agreement of the parties hereto (which in the case of the Company shall
include approvals as contemplated in Section 1.4(c)), at any time prior to the
Closing Date with respect to any of the terms contained herein; provided,
however, that after any such stockholder approvals shall have been obtained, no
amendment shall be made which, under applicable law, requires the further
approval of such stockholders without such approval.
59
Section 9.4 EXTENSION; WAIVER. Subject to Section 1.4 hereof, at any
time prior to the Effective Time, the parties may (a) extend the time for the
performance of any of the obligations or other acts of the other parties, (b)
waive any inaccuracies in the representations and warranties of the other
parties contained in this Agreement or in any document delivered pursuant to
this Agreement, or (c) subject to applicable law, waive compliance with any of
the agreements or conditions of the other parties contained in this Agreement.
Any agreement on the part of a party to any such extension or waiver shall be
valid only if set forth in a written instrument executed and delivered by a duly
authorized officer on behalf of such party. The failure of any party to this
Agreement to assert any of its rights under this Agreement or otherwise shall
not constitute a waiver of such rights.
Section 9.5 NOTICES. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally or sent by overnight courier (providing proof of
delivery) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice) on the date of delivery, or if
by facsimile, upon confirmation of receipt:
(i) if to Parent or to Purchaser, to:
VNU NV
Xxxxxxxxxxx 0-00, 0000 XX Xxxxxxx
X.X. Xxx 0, 0000 XX Xxxxxxx
Xxx Xxxxxxxxxxx
Attention: Chairman of the Board of
Executive Directors
Telecopy: 011 31 23 5463938
and
VNU USA, Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxx
Telecopy: (000) 000-0000
60
with a copy (which shall not constitute
notice) to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx
Xxxxxxx X. Xxxxxx
Telecopy: (000) 000-0000
(ii) if to the Company, to:
Xxxxxxx Media Research, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Executive Officer
Telecopy: (000) 000-0000
with a copy (which shall not constitute
notice) to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxx
Xxxx X. Xxxxxx
Telecopy: (000) 000-0000
Section 9.6 INTERPRETATION. When a reference is made in this Agreement
to a Section, such reference shall be to a Section of this Agreement unless
otherwise indicated. The table of contents and headings contained in this
Agreement are for convenience of reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement. Whenever the words
"include", "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation." The inclusion of any
matter in the Company's Disclosure Letter in connection with any
representation, warranty, covenant or agreement that is qualified as to
materiality or "Material Adverse Effect" shall not be an admission by the
Company that such matter is material or would have a Material Adverse Effect.
Matters disclosed in any section of the Company's Disclosure Letter or in any
subsection of Section 4.1 hereof shall be
61
considered disclosed for all purposes under Section 4.1 to the extent that such
matter on its face would reason ably be expected to be pertinent in light of the
disclosure made.
Section 9.7 ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES. This
Agreement (together with the Guarantee dated the date hereof and delivered by
Guarantor to the Company and the Letter Agreement, dated the date hereof,
between Guarantor and the Company) constitutes the entire agreement, and
supersedes all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter of this Agreement (except for the
letter agreement referenced in the last sentence of Section 6.2(a)). Other than
the provisions of Sections 3.2 and 6.8, this Agreement is not intended to confer
upon any person (including, without limitation, any current or former employees
of the Company), other than the parties hereto, any rights or remedies; provided
that, the persons (other than the parties hereto) referred to in the provisions
of Section 3.2 or 6.8 shall be third party beneficiaries of such provisions and,
in addition, the persons (other than the parties hereto) referred to in the
provisions in Section 3.2 or 6.8 shall be entitled to receive from Parent their
reasonable costs and expenses arising out of any breach by Parent or the
Surviving Corporation of such provisions.
Section 9.8 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
Section 9.9 ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement may be assigned or delegated, in
whole or in part, by operation of law or otherwise by any of the parties without
the prior written consent of the other parties, and any such assignment without
such prior written consent shall be null and void, except that Parent and/or
Purchaser may assign this Agreement to any direct or indirect wholly owned
Subsidiary of Parent without the prior consent of the Company; provided that
Parent and/or Purchaser, as the case may be, shall remain liable for all of its
obligations under this Agreement. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of, and be enforceable by,
the parties and their respective successors and assigns.
Section 9.10 ENFORCEMENT. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
Accordingly, the parties shall be entitled to an injunction or injunctions to
prevent breaches of this Agreement and
62
to enforce specifically the terms and provisions of this Agreement in the Court
of Chancery in and for New Castle County in the State of Delaware (or, if such
court lacks subject matter jurisdiction, any appropriate state or federal court
in New Castle County in the State of Delaware), this being in addition to any
other remedy to which they are entitled at law or in equity. Each of the parties
hereto (i) shall submit itself to the personal jurisdiction of the Court of
Chancery in and for New Castle County in the State of Delaware (or, if such
court lacks subject matter jurisdiction, any appropriate state or federal court
in New Castle County in the State of Delaware) with respect to any dispute that
arises out of this Agreement or any of the transactions contemplated hereby,
(ii) shall not attempt to deny or defeat such personal jurisdiction by motion or
other request for leave from any such court, and (iii) shall not bring any
action relating to this Agreement or any of the transactions contemplated hereby
in any court other than the Court of Chancery in and for New Castle County in
the State of Delaware (or, if such court lacks subject matter jurisdiction, any
appropriate state or federal court in New Castle County in the State of
Delaware). By execution and delivery of this Agreement, Parent appoints The
Corporation Trust Company at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 as
its agent upon which process may be served in any such legal action or
proceeding.
Section 9.11 SEVERABILITY. Whenever possible, each provision or portion
of any provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision or portion of
any provision of this Agreement is held to be invalid, illegal or unenforceable
in any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
Section 9.12 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same instrument
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other parties.
63
IN WITNESS WHEREOF, Parent, Purchaser and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the date first written above.
VNU USA, INC.
By: /s/ XXXXXX XXXXX
--------------------------
Name: Xxxxxx Xxxxx
Title: President and CEO
NINER ACQUISITION, INC.
By: /s/ XXXXXX X. XXXXXXXXX
--------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Chief Operating Officer
XXXXXXX MEDIA RESEARCH, INC.
By: /s/ XXXX X. XXXXXXX
--------------------------
Name: Xxxx X. Xxxxxxx
Title: President and CEO
64
EXHIBIT A
CONDITIONS TO THE OFFER
Capitalized terms used but not defined herein shall have the meanings
set forth in the Agreement and Plan of Merger (the "Agreement") of which this
Exhibit A is a part. Notwithstanding any other provision of the Offer and
subject to the terms of the Merger Agreement, Purchaser shall not be required to
accept for payment or, subject to any applicable rules and regulations of the
SEC, including Rule 14e-1(c) under the Exchange Act (relating to Purchaser's
obligation to pay for or return tendered Shares promptly after termination or
withdrawal of the Offer), pay for, and may delay the acceptance for payment of
or, subject to the restriction referred to above, the payment for, any tendered
Shares, and may amend the Offer consistent with the terms of the Agreement or
terminate the Offer and not accept for payment any tendered Shares, if
(i) there shall not have been validly tendered and not withdrawn prior
to the expiration of the Offer such number of Shares which would constitute at
least a majority of the Shares outstanding on a fully diluted basis on the date
of purchase ("on a fully-diluted basis" meaning the number of Shares
outstanding, together with the Shares which the Company may be required to issue
pursuant to warrants, options or obligations outstanding at that date under
employee stock or similar benefit plans or otherwise whether or not vested or
then exercisable) (the "Minimum Condition"),
(ii) any applicable waiting period under the HSR Act shall not have
expired or been terminated,
(iii) there shall not have been delivered to the Company and IMS Health
Incorporated ("IMS") an opinion of counsel to the Company to the effect that the
transactions contemplated by this Agreement will not result in (A) the June 30,
1998 spin-off of IMS (the "Spinoff") failing to qualify under Section 355(a) of
the Internal Revenue Code (the "Code") or (B) the shares of common stock of IMS
failing to qualify as qualified property for purposes of Section 355(c)(2) of
the Code by reason of Section 355(e) of the Code; provided, however, that this
condition (iii) shall not be deemed satisfied if (1) prior to the expiration of
the Offer, either (x) there shall have been issued, in proposed form or
otherwise, legislation, Treasury regulations or any other published
pronouncement with an effective date that would apply to the consummation of the
Offer and which would apply to the Spinoff as a result of the transactions
contemplated by the Agreement or (y)
A-1
there shall not have been executed by appropriate officers of Parent and the
Company and Xxxxxx Xxxxxxxx, Chairman of IMS, representation letters addressed
to counsel to Parent and the Company and dated immediately prior to the
expiration of the Offer, in form and substance not materially different from the
form of representation letters agreed upon by Parent and the Company on or prior
to the date of the Agreement, and (2) not withstanding that counsel to the
Company has delivered (or is prepared to deliver) an opinion to the effect
contemplated by the foregoing clauses (A) and (B), counsel to Parent advises
Parent and the Company in writing (which includes the specific reasons therefor)
that, based solely on any material change (proposed or otherwise) in
legislation, regulations or published pronouncement (if clause (x) is
applicable) and/or any material change in the executed representation letters
dated immediately prior to the expiration of the Offer from the form of
representation letters agreed upon by Parent and the Company on or prior to the
date of the Agreement (if clause (y) is applicable), such counsel would be
unable to render an opinion (after consultation with VNU and its other tax
advisors), which is in all material respects the same as the opinion of counsel
to the Company contemplated by the foregoing clauses (A) and (B).
(iv) None of the following conditions shall have been satisfied: (A)
VNU shall have received the unconditional positive advice of the Central Works'
Council of VNU (the "Works' Council") regarding the bank facility to be entered
into by VNU in connection with the financing of the Offer (the "Facility") and
the issuance of the guarantee of VNU related thereto (the "Facility Guarantee")
(any such unconditional positive advice referred to herein as "Positive
Advice"); or (B) VNU shall have received conditional positive advice of the
Works' Council with respect to the Financing and the Financing Guarantee and the
fulfillment of the conditions specified therein would not result in material
detriment to VNU and its Subsidiaries, or result in material restrictions on the
business activities thereof (any such conditional positive advice referred to
herein as "Acceptable Conditional Advice"); or (C) VNU shall have received
advice from the Works' Council that is not Positive Advice or Acceptable
Conditional Advice regarding the Facility to be entered into and the Facility
Guarantee to be issued and either (i) 35 days shall have elapsed from the date
that VNU has received written advice from the Works' Council that is not
Positive Advice or Acceptable Conditional Advice, provided that the Works'
Council shall not have commenced any appeal or other legal proceeding in respect
of the Facility or the Facility Guarantee or (ii) the Works' Council shall have
notified VNU in writing or publicly announced that it will disclaim its right to
appeal or take any other legal action in connection with the Facility to be
entered into or the Facility Guarantee to be issued.
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(v) the Agreement shall have been terminated in accordance with its
terms, or
(vi) at any time on or after the date of the Agreement and prior to the
Expiration Date, any of the following events shall occur and be continuing and
shall not have resulted from the breach by Parent or Purchaser of any of their
obligations under the Agreement:
(a) there shall be any statute, rule, regulation, judgment,
order or injunction enacted, entered, enforced, promulgated or deemed applicable
to the Offer or the Merger, other than the application to the Offer or the
Merger of applicable waiting periods under the HSR Act, that shall (i) prohibit
or impose any material limitations on Parent's or Purchaser's ownership or
operation (or that of any of their respective Subsidiaries or affiliates) of all
or a material portion of their or the Company's businesses or assets, (ii)
challenge the acquisition by Parent or Purchaser of any Shares pursuant to the
Offer, (iii) prohibit the making or consummation of the Offer or the Merger or
the performance of any of the transactions contemplated by the Agreement, or
(iv) impose material limitations on the ability of Purchaser, or render
Purchaser unable, to accept for payment, pay for or purchase some or all of the
Shares pursuant to the Offer and the Merger, or effectively to exercise full
rights of ownership of the Shares, including, without limitation, the right to
vote the Shares purchased by Purchaser or Parent on all matters properly
presented to the Company's stockholders; or
(b) (i) any representation or warranty of the Company
contained in the Agreement that is qualified as to Material Adverse Effect shall
not be true and correct; or (ii) any representation or warranty of the Company
in the Agreement that is not so qualified shall not be true and correct in all
material respects, in each case as of the date of consummation of the Offer as
though made on or as of such date (other than representations and warranties
that by their terms address matters only as of another specified date, which
shall be true and correct only as of such other specified date), except where
(x) the failure of such representations and warranties (other than those
relating to the number of shares and/or options, warrants or other rights to
acquire capital stock set forth in Section 4.1(d) thereof) referred to in clause
(ii) to be so true and correct, in the aggregate, have not had and would not
reasonably be expected to have a Material Adverse Effect on the Company or (y)
where the failure of such representations and warranties relating to the number
of shares and/or options, warrants or other rights to acquire capital stock set
forth in Section 4.1(d) of the Agreement to be so true and correct would not, in
the aggregate, relate to an inaccuracy in excess of 150,000 shares and/or
options, warrants or other rights to acquire capital stock; or
A-3
(c) the Company shall have breached or failed in any material
respect to perform any material obligation or to comply with any material
agreement or covenant of the Company to be performed by or complied with by it
under the Agreement; or
(d) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on the New York Stock
Exchange or in the Nasdaq National Market System, for a period in excess of
three hours (excluding suspensions or limitations resulting solely from physical
damage or interference with such exchanges not related to market conditions),
(ii) a declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States or outside the United States (whether or
not mandatory), (iii) any limitation (whether or not mandatory) by any United
States or foreign governmental authority on the extension of credit by banks or
other financial institutions or (iv) in the case of any of the foregoing
existing at the time of the commencement of the Offer, a material acceleration
or worsening thereof; or
(e) except as disclosed in the Filed SEC Documents or in
Section 4.1(f) of the Disclosure Letter, there shall have occurred an event,
change, occurrence, or development of a state of facts or circumstances having,
or which would reasonably be expected to have, a Material Adverse Effect on the
Company;
which in the reasonable judgment of Parent or Purchaser, in any such case, and
regardless of the circumstances (including any action or inaction by Parent or
Purchaser) giving rise to such condition makes it inadvisable to proceed with
the Offer and/or with such acceptance for payment of, or payment for, Shares.
Subject to the terms of the Agreement, the foregoing
conditions are for the sole benefit of Parent and Purchaser and may be waived by
Parent or Purchaser, in whole or in part, at any time and from time to time, in
the sole discretion of Parent or Purchaser. The failure by Parent or Purchaser
at any time to exercise any of the foregoing rights shall not be deemed a waiver
of any right and each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time.
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