Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
among
VNU USA, INC.
NINER ACQUISITION, INC.
and
XXXXXXX MEDIA RESEARCH, INC.
Dated as of August 15, 1999
TABLE OF CONTENTS
Page
ARTICLE I
THE OFFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1 The Offer . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Offer Documents . . . . . . . . . . . . . . . . . . 3
Section 1.3 Company Actions . . . . . . . . . . . . . . . . . . 4
Section 1.4 Directors . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE II
THE MERGER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.1 The Merger . . . . . . . . . . . . . . . . . . . . 7
Section 2.2 Closing . . . . . . . . . . . . . . . . . . . . . 7
Section 2.3 Effective Time . . . . . . . . . . . . . . . . . . 7
Section 2.4 Effects of the Merger . . . . . . . . . . . . . . 7
Section 2.5 Certificate of Incorporation; By-laws . . . . . . 7
Section 2.6 Directors; Officers . . . . . . . . . . . . . . . 8
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES . . . . . . . . . . . . 8
Section 3.1 Effect on Capital Stock . . . . . . . . . . . . . 8
Section 3.2 Options; Stock Plans . . . . . . . . . . . . . . . 9
Section 3.3 Payment for Shares . . . . . . . . . . . . . . . . 11
ARTICLE IV
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . 13
Section 4.1 Representations and Warranties of the
Company . . . . . . . . . . . . . . . . . . . . . 13
Section 4.2 Representations and Warranties of Parent and
Purchaser . . . . . . . . . . . . . . . . . . . . 28
ARTICLE V
CONDUCT OF BUSINESS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . 30
Section 5.1 Conduct of Business of the Company . . . . . . . . 30
ARTICLE VI
ADDITIONAL COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 6.1 The Company Stockholders Meeting; Preparation
of the Proxy Statement; Short-Form Merger . . . . 33
Section 6.2 Access to Information; Notification of
Certain Matters . . . . . . . . . . . . . . . . . 34
Section 6.3 Reasonable Best Efforts . . . . . . . . . . . . . . 34
Section 6.4 Public Announcements . . . . . . . . . . . . . . . 34
Section 6.5 No Solicitation . . . . . . . . . . . . . . . . . 35
Section 6.6 Consents, Approvals and Filings . . . . . . . . . 36
Section 6.7 Employee Benefit Plans . . . . . . . . . . . . . . 37
Section 6.8 Indemnification; Directors' and Officers'
Insurance . . . . . . . . . . . . . . . . . . . . 00
-x-
Xxxxxxx 6.9 Agreements with NetRatings, Inc. . . . . . . . . . 39
Section 6.10 Certain Tax Matters . . . . . . . . . . . . . . . . 39
ARTICLE VII
CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 7.1 Conditions to Each Party's Obligation to
Effect the Merger . . . . . . . . . . . . . . . . 40
ARTICLE VIII
TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 8.1 Termination . . . . . . . . . . . . . . . . . . . . 40
Section 8.2 Effect of Termination . . . . . . . . . . . . . . . 43
ARTICLE IX
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 9.1 Fees and Expenses . . . . . . . . . . . . . . . . . 44
Section 9.2 Certain Definitions . . . . . . . . . . . . . . . . 46
Section 9.3 Amendment and Modification . . . . . . . . . . . . 46
Section 9.4 Extension; Waiver . . . . . . . . . . . . . . . . . 46
Section 9.5 Notices . . . . . . . . . . . . . . . . . . . . . . 47
Section 9.6 Interpretation . . . . . . . . . . . . . . . . . . 48
Section 9.7 Entire Agreement; No Third-Party
Beneficiaries . . . . . . . . . . . . . . . . . . 48
Section 9.8 Governing Law . . . . . . . . . . . . . . . . . . . 48
Section 9.9 Assignment. . . . . . . . . . . . . . . . . . . . . 49
Section 9.10 Enforcement . . . . . . . . . . . . . . . . . . . . 49
Section 9.11 Severability. . . . . . . . . . . . . . . . . . . . 49
Section 9.12 Counterparts. . . . . . . . . . . . . . . . . . . . 49
-ii-
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 reasonably
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 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, 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 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 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.
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 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.
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 ownership 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 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 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 cancelled by the Company, and in
consideration of such cancellation, holders of such Unvested Stock 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 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).
(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.
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 otherwise
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 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.
(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 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 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 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, 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 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 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 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 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, 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.
(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 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 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:
(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.
(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 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;
(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
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 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 Stockholders 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 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) 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 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.
(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 outstanding 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 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 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 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;
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;
(xv) 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);
(xvi) 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
(xvii) 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 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 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.
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 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 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).
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 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 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 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 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 of Directors
of the Company in accordance with Section 1.4(c).
(b) 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) 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 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
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 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 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 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 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:
(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.
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.
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
with a copy (which all 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
considered disclosed for all purposes under Section 4.1 to the extent that
such matter on its face would reasonably 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 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.
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
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) there
shall not have been executed by appropriate officers of Parent and
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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) notwithstanding 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
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(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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