1
Exhibit (d)(iv)
ACNIELSEN CORPORATION
December 17, 2000
Xx. Xxxxxx X. Xxxxxx
c/o ACNielsen Corporation
000 Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Dear Xxxxxx:
As you are aware, VNU N.V. (the "Parent"), Artist Acquisition,
Inc. (the "Purchaser") and ACNielsen Corporation (the "Company") are
contemplating entering into an Agreement and Plan of Merger (the "Merger
Agreement") pursuant to which the Purchaser shall commence (within the meaning
of Rule 14d-2 under the U.S. Securities Exchange Act of 1934, as amended) an
offer to purchase all of the outstanding shares of the Company (the "Offer") and
the Purchaser will then merge with and into the Company (the "Merger"), with the
Company continuing as the surviving corporation in such Merger. As a result of
the Merger, any stock options granted to you under the Company's equity
incentive plans that are not exercisable prior to the effective time of the
Merger will accelerate and become fully vested, and you will receive a cash
payment for all of your stock options equal to the value of your stock options,
calculated on the basis of the Merger Consideration (as defined in the Merger
Agreement).
A significant inducement to VNU and the Purchaser entering
into the Merger Agreement is their expectation that you and certain other key
employees of the Company will refrain from engaging in competitive activities
and/or solicitation of the Company's customers or employees as set forth in this
letter agreement (the "Agreement"). In consideration of VNU and the Purchaser
entering into the Merger Agreement, and of the other covenants and agreements
contained herein, specifically including the noncompetition/nonsolicitation
provisions under Section 8, you hereby agree to the other provisions of this
Agreement.
Reference is made to your change in control letter agreement
dated November 1, 1996 between you and the Company (the "Change in Control
Agreement"). Capitalized terms used herein without definition have the
respective meanings specified in the Change in Control Agreement.
1. EFFECTIVENESS. This Agreement shall constitute a binding obligation of the
Company and you upon execution hereof; provided that, notwithstanding any other
provision of this Agreement, the terms hereof shall become effective only upon
the consummation of the Offer and in the event the Merger Agreement is
terminated for any reason or effectuated without the consummation of the Offer
having occurred, this Agreement shall be terminated without further obligation
or liability of either party and the Change in Control Agreement shall remain in
full force and effect.
2
2
2. SERP BENEFITS. If (i) you are an employee on the date which is 90 days
following the Change in Control or (ii) your employment terminates prior to such
date due to a Qualified Termination (as defined below), you shall be deemed
fully vested under the Company's Supplemental Executive Retirement Plan,
effective as of November 1, 1996 (the "Covered Top-Hat Plan"). The benefit to
which you shall be entitled under any Covered Top-Hat Plan shall be determined
using:
(a) the maximum credited service allowed to be taken into
account under the Covered Top-Hat Plan's benefit formula; and
(b) your base salary and bonus taken into account under
Section 3 hereof as your final average compensation.
3. PAYMENTS. Subject to your continued employment with the Company, on the date
which is 90 days after the Change in Control (the "Payment Date") you shall be
entitled to a lump sum payment (the "Payments") equal to the sum of:
(a) Three times the greater of (i) your annual base salary in
effect immediately prior to the Change in Control or (ii) your annual
base salary in effect on the Payment Date;
(b) Three times the greater of (i) your annual target bonus
for the year in which the Change in Control occurs or, if no such
target bonus has yet been determined for such year, your annual target
bonus for the immediately preceding year or (ii) the annual bonus
actually earned by you in the year immediately preceding the year in
which the Change in Control occurs;
(c) Your annual target bonus for the year in which the Change
in Control occurs, multiplied by a fraction, (i) the numerator of which
equals the number of full or partial days in such annual performance
period during which you were employed by the Company prior to the
Payment Date and (ii) the denominator of which is 365; provided,
however, that any annual bonus paid to you with respect to the 2001
worldwide annual incentive plan shall be offset by the payment under
this Section 3(c);
(d) The entire target bonus opportunity with respect to each
performance period in progress under all other bonus plans of the
Company in effect at the time of the Change in Control; provided,
however, that any bonus paid to you with respect to each such other
bonus plan of the Company shall be offset by the payment under this
Section 3(d) with respect to such other bonus plan; and
(e) A lump sum payment equal to the present value (as of the
Payment Date using the discount rate in the Covered Top-Hat Plan) of a
lump sum payment of your benefit under the Covered Top-Hat Plan using
the assumptions in the Covered Top-Hat Plan and assuming that you were
employed by the Company until age 55. For purposes of calculating your
Covered Top-Hat Plan benefit, you shall be deemed to have retired from
the Company at normal retirement age as if the Company had consented to
such retirement. Exhibit A to the Change in Control Agreement sets
forth an example of how the compensation and benefits provided under
this Section 3(e) shall be determined prior
3
3
to the present value of such compensation and benefits as of the
Payment Date. Receipt of such lump-sum payment by you shall constitute
full satisfaction of all of your retirement benefits under the Covered
Top-Hat Plan and upon payment to you, the Company shall have no further
obligations to you with respect to such retirement benefits under the
Covered Top-Hat Plan.
Notwithstanding the foregoing, in the event that your
employment is terminated following the Change in Control (A) by the Company
without Cause, (B) due to your death or Disability or (C) by you with Good
Reason (other than Section 3(f)(iii)(A) of the Change in Control Agreement),
(each of (A), (B) or (C), a "Qualified Termination") prior to the Payment Date,
you shall be entitled to the Payments as soon as practicable (but in no event
later than five business days) following such termination, in which case such
earlier date shall be the Payment Date for all purposes hereunder.
4. ESCROW ACCOUNT. As soon as practicable (but in no event later than five
business days) following the Change in Control, an amount equal to the Payments
and any payments provided for under Section 6 hereof shall be placed in an
escrow account with The Chase Manhattan Bank, the terms of which shall be
designed to ensure that the assets thereof shall not be subject to the claims of
creditors of the Parent, the Purchaser or the Company. The Payments, when made,
shall include interest at the prime rate, as reported from time to time by The
Chase Manhattan Bank.
5. ADDITIONAL BENEFITS. Upon (i) your termination of employment with the Company
for any reason on or following the Payment Date or (ii) a Qualified Termination
prior to the Payment Date, you shall be entitled to the following benefits:
(a) Your full base salary through the date of termination at
the rate in effect at the time of your termination, no later than the
fifth day following your date of termination, and you shall receive all
other amounts to which you are entitled under any compensation or
benefit plan of the Company, at the time such payments are due;
(b) A cash allowance for outplacement and job search
activities (including, but not limited to, office and secretarial
expenses) in the amount of 20% of your annual base salary and annual
target bonus taken into account under Section 3 hereof, provided that
(A) such cash allowance shall not exceed $100,000 and (B) such cash
allowance shall apply only to those costs or obligations that are
incurred by you during the 36-month period following your termination
of employment;
(c) For a 36-month period following your termination of
employment, the Company shall arrange to provide you with life and
health insurance benefits no less favorable than those which you were
receiving immediately prior to the Change in Control. Notwithstanding
the foregoing, any benefit described in the preceding sentence shall
constitute secondary coverage with respect to any life and health
insurance benefits actually received by you in connection with any
subsequent employment (or self-employment) during the 36-month period
following your termination; and
4
4
(d) Starting at age 55, you shall receive retiree medical and
life benefits from the Company. Such benefits shall be no less
favorable than the benefits that you would have received had you, at
the time of the Change in Control, both (A) attained age 55 and (B)
retired from the Company. Notwithstanding the foregoing, any benefit
described in the preceding sentence shall constitute secondary coverage
with respect to retiree medical and life benefits actually received by
you in connection with any subsequent employment (or self-employment)
following your termination.
6. EXCISE TAX. In the event you become entitled to any amounts payable hereunder
or any other amounts in connection with a change in control (whether or not such
amounts are payable pursuant to this Agreement) (the "Severance Payments"), if
any of such Severance Payments are subject to the tax (the "Excise Tax") imposed
by Section 4999 of the Code (or any similar federal, state or local tax that may
hereafter be imposed), the Company shall pay to you at the time specified in
Section 7 hereof an additional amount (the "Gross-Up Payment") such that the net
amount retained by you, after deduction of any Excise Tax on the Total Payments
(as hereinafter defined) and any federal, state and local income tax and Excise
Tax upon the payment provided for by this Section 6, shall be equal to the Total
Payments. For purposes of determining whether any of the Severance Payments will
be subject to the Excise Tax and the amount of such Excise Tax: (i) any other
payments or benefits received or to be received by you in connection with a
Change in Control or your termination of employment (whether pursuant to the
terms of this Agreement or any other plan, arrangement or agreement with the
Company, any Person whose actions result in a Change in Control or any Person
affiliated with the Company or such Person) (which, together with the Severance
Payments, constitute the "Total Payments") shall be treated as "parachute
payments" within the meaning of Section 280G(b)(2) of the Code, and all "excess
parachute payments" within the meaning of Section 280G(b)(1) of the Code shall
be treated as subject to the Excise Tax, unless in the opinion of
nationally-recognized tax counsel selected by you such other payments or
benefits (in whole or in part) do not constitute parachute payments, or such
excess parachute payments (in whole or in part) represent reasonable
compensation for services actually rendered within the meaning of Section
280G(b)(4) of the Code in excess of the base amount within the meaning of
Section 280G(b)(3) of the Code, or are otherwise not subject to the Excise Tax;
(ii) the amount of the Total Payments which shall be treated as subject to the
Excise Tax shall be equal to the lesser of (A) the total amount of the Total
Payments and (B) the amount of excess parachute payments within the meaning of
Section 280G(b)(1) of the Code (after applying Section 6(i) hereof); and (iii)
the value of any non-cash benefits or any deferred payments or benefit shall be
determined by a nationally-recognized accounting firm selected by you in
accordance with the principles of Sections 280G(d)(3) and (4) of the Code. For
purposes of determining the amount of the Gross-Up Payment, you shall be deemed
to pay federal income taxes at the highest marginal rate of federal income
taxation in the calendar year in which the Gross-Up Payment is to be made and
state and local income taxes at the highest marginal rate of taxation in the
state and locality of your residence, net of the maximum reduction in federal
income taxes which could be obtained from deduction of such state and local
taxes. In the event that the Excise Tax is subsequently determined to be less
than the amount taken into account hereunder, you shall repay to the Company
within ten days after the time that the amount of such reduction in Excise Tax
is finally determined the portion of the Gross-Up Payment attributable to such
reduction (plus the portion of the Gross-Up Payment attributable to the Excise
Tax and federal and state and local income tax imposed on the Gross-Up Payment
being repaid by you if such repayment results in a
5
5
reduction in Excise Tax and/or federal and state and local income tax deduction)
plus interest on the amount of such repayment at the rate provided in Section
1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to
exceed the amount taken into account hereunder (including by reason of any
payment the existence or amount of which cannot be determined at the time of the
Gross-Up Payment), the Company shall make an additional gross-up payment in
respect of such excess) within ten days after the time that the amount of such
excess is finally determined.
7. TIME OF PAYMENT. The payments provided for in Section 6 hereof shall be made
on the Payment Date; provided, however, that if the amount of such payments
cannot be finally determined on or before such day, the Company shall pay to you
on such day an estimate, as determined in good faith by the Company, of the
minimum amount of such payments and shall pay the remainder of such payments
(together with interest at the rate provided in Section 1274(b)(2)(B) of the
Code) as soon as the amount thereof can be determined but in no event later than
the thirtieth day after the Payment Date. In the event that the amount of the
estimated payments exceeds the amount subsequently determined to have been due,
such excess shall constitute a loan by the Company to you, payable on the fifth
day after the demand by the Company (together with interest at the rate provided
in Section 1274(b)(2)(B) of the Code). The payments provided for in Section 5(b)
hereof shall be made not later than the fifth day following the submission of
each receipt to the Company evidencing costs or obligations incurred by you in
connection with outplacement counseling and job search activities.
8. NONCOMPETITION/NONSOLICITATION. In consideration of the matters set forth in
the recitals contained herein and of the payments and benefits made pursuant to
this Agreement you hereby agree that:
(a) From the Change in Control until the date that is eighteen
months following the Change in Control (the "Restricted Period"), you
will not (i) become a stockholder (unless (A) such stock is listed on a
national securities exchange or traded on a daily basis in the
over-the-counter market and (B) your ownership interest is not in
excess of 2% of the company whose shares are being purchased),
employee, officer, director or consultant of or to any of the entities
listed on Exhibit A hereto (each a "Named Entity") or (ii) establish,
either on your own or with any one or more of the Executive Officers
listed on Exhibit A hereto, a business that competes with the Company.
These restrictions will apply whether or not you accept any form of
compensation from any such Named Entity.
(b) During the Restricted Period, on behalf of any Named
Entity you will not recruit or solicit any (i) customer of the Company,
including any of its affiliates or subsidiaries or (ii) any employee of
the Company.
9. REMEDIES. Without limiting any other remedy available to the Company, you
acknowledge that a breach of any of the covenants contained in this Agreement
may result in material irreparable injury to the Company and VNU for which there
is no adequate remedy at law, that it will not be possible to measure damages
for such injuries precisely and that, in the event of such a breach or threat
thereof, the Company and VNU shall be entitled to seek a temporary restraining
order or a preliminary or permanent injunction restraining you from
6
6
engaging in activities prohibited by this Agreement or such other relief as may
be required to enforce, or appropriate in light of the breach of, any of the
covenants in this Agreement.
10. BANK LOAN. On or prior to the Payment Date, you shall repay amounts owed
under the loan agreement between you and Northern Trust Company.
11. ENTIRE AGREEMENT/AMENDMENTS. This Agreement contains the entire
understanding of the parties with respect to your benefits under the Change in
Control Agreement and, except with respect to Exhibit A of the Change in Control
Agreement (as modified pursuant to Section 3(e))or any references to such Change
in Control Agreement contained herein, expressly supersedes the Change in
Control Agreement. There are no restrictions, agreements, promises, warranties,
covenants or undertakings between the parties with respect to the subject matter
herein other than those expressly set forth herein. This Agreement may not be
altered, modified, or amended except by written instrument signed by the parties
hereto. No waiver by either party hereto at any time of any breach by the other
party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the time or at any prior or
subsequent time. Notwithstanding anything to the contrary in this Agreement, the
procedural provisions of this Agreement shall apply to all benefits payable as a
result of a Change in Control (or other change in control) under any employee
benefit plan, agreement, program, policy or arrangement of the Company.
12. MITIGATION. Except as provided in Section 5(c) or (d) hereof, you shall not
be required to mitigate the amount of any payment provided for under this
Agreement by seeking other employment or otherwise, nor shall the amount of
payment or benefit provided for under this Agreement be reduced by any
compensation earned by you as the result of employment by another employer, by
retirement benefits, by offset against any amount claimed to be owed by you to
the Company, or otherwise.
13. NOTICE. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to:
If to the Company:
ACNielsen Corporation
000 Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: General Counsel
If to you:
To the most recent residential address maintained in the
personnel records of the Company.
7
7
14. COSTS OF PROCEEDINGS. The Company shall pay all costs and expenses,
including all attorneys' fees and disbursements, of the Company and, at least
monthly, you in connection with any legal proceedings, whether or not instituted
by the Company or you, relating to the interpretation or enforcement of any
provision of this Agreement; provided that if you instituted the proceeding and
a finding (no longer subject to appeal) is entered that you instituted the
proceeding in bad faith, you shall pay all of your costs and expenses, including
attorneys' fees and disbursements. The Company shall pay prejudgment interest on
any money judgment obtained by you as a result of such proceeding, calculated at
the prime rate of The Chase Manhattan Bank as in effect from time to time from
the date that payment should have been made to you under this Agreement.
15. SUCCESSORS; BINDING AGREEMENT.
(a) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to
expressly assume and agree to perform this Agreement in the same manner
and to the same extent that the Company would be required to perform it
if no such succession had taken place. As used in this Agreement,
"Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and
agrees to perform this Agreement by operation of law, or otherwise.
(b) This Agreement shall inure to the benefit of and be
enforceable by you and your personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees
and legatees. In the event of your death, all amounts otherwise payable
to you hereunder shall, unless otherwise provided herein, be paid in
accordance with the terms of this Agreement to your devisee, legatee or
other designee or, if there is no such designee, to your estate.
16. WITHHOLDING TAXES. The Company may withhold from any amounts payable under
this Agreement such federal, state and local taxes as may be required to be
withheld pursuant to any applicable law or regulation.
17. GOVERNING LAW. This Agreement will be governed, construed and interpreted
under the laws of the State of New York, without regard to the conflicts of laws
provisions thereof. You hereby consent to in personam jurisdiction in the
federal or state courts within the State of New York.
18. ADEQUATE CONSIDERATION. You hereby acknowledge and confirm that you have
received good and sufficient consideration in connection with this Agreement.
19. COUNTERPARTS. This Agreement may be signed in counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
8
Please sign the enclosed copy of this Agreement confirming
your agreement to the above.
Yours sincerely,
/s/ Xxxx X. Xxxxxxx
----------------------------
Xxxx X. Xxxxxxx
Agreed and Accepted
/s/ Xxxxxx X. Xxxxxx
-----------------------------
Xxxxxx X. Xxxxxx
December 17, 2000
9
EXHIBIT A
NAMED ENTITIES (INCLUDES EACH OF THEIR SUBSIDIARIES AND OTHER AFFILIATES):
AGB Italia
GfK
IBOPE
IHA
IMS Health Incorporated
IPSOS-ASI
Information Resources, Inc.
NFO Worldwide, Inc.
NPD
Opinion Research Corp.
Xxxxxx Xxxxxx Sofres
WPP Group.
Jupiter MediaMetrix
EXECUTIVE OFFICERS:
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
Xxxxxxxx X. Xxxxxxxxxx
