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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: January 4, 2000
Commission file number 001-12275
NIELSEN MEDIA RESEARCH, INC.
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(Exact name of registrant as specified in its charter)
Delaware 06-1450569
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(State of Incorporation) (I.R.S. Employer Identification No.)
299 Park Avenue New York, New York 10171
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 708-7500
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Item 2. Acquisition or Disposition of Assets
As more fully described below, on December 21, 1999, pursuant to an
agreement between Nielsen Media Research, Inc. ("Nielsen Media Research" or the
"Company") and NetRatings, Inc. ("NetRatings") as detailed in the NetRatings
public filings with the Securities and Exchange Commission, Nielsen Media
Research purchased an aggregate of 17,188,349 shares of NetRatings Common Stock
(the "Common Stock"), through the exercise of warrants and purchase of shares
from NetRatings and several of its shareholders. The aggregate purchase price
was approximately $246 million, of which approximately $236 million was paid to
NetRatings and approximately $10 million was paid directly to several of its
shareholders. Nielsen Media Research is a subsidiary of VNU N.V. ("VNU"). VNU
and an affiliate of VNU borrowed the funds used to purchase the Common Stock
under a Revolving Credit Facility Agreement dated as of August 15, 1999 with
ABN-AMRO Bank ("ABN") and Merrill Lynch International as arrangers, ABN as agent
and the banks from time to time parties thereto. VNU and the affiliate of VNU
advanced such funds to Nielsen Media Research to fund the purchase of the Common
Stock by Nielsen Media Research.
Pursuant to Addendum No. 1 to Second Restated Rights Agreement dated as
of September 22, 1999 (which amended and restated Addendum No. 1 to Restated
Rights Agreement dated August 15, 1999) among NetRatings, Nielsen Media Research
and certain stockholders of NetRatings (the "Rights Addendum"), Nielsen Media
Research was granted the right (the "Top-Off Right"), for so long as it owns at
least 5.0% of the issued and outstanding Common Stock on a fully-diluted basis,
to purchase from NetRatings, concurrently with any initial public offering
("IPO") of its Common Stock, that number of additional shares of Common Stock as
may be necessary to cause the number of shares of Common Stock beneficially
owned by Nielsen Media Research (including all shares underlying previously
acquired Preferred Stock and Common Stock Purchase Warrants (the "Warrants")) to
increase to an amount which, after giving effect to such IPO, is equal to but
not greater than 54.0% of the issued and outstanding shares of Common Stock on a
fully-diluted basis upon the closing of such IPO at a price per share equal to
the initial public offering price. The Rights Addendum further provides that a
portion of the shares issuable in connection with the Top-Off Right could be
satisfied by the purchase by Nielsen Media Research of shares of Common Stock
owned by certain stockholders of NetRatings.
On October 26, 1999, Nielsen Media Research notified NetRatings that it
intended to exercise its Top-Off Right in connection with the IPO (the "Top-Off
Notice"). On November 9, 1999, NetRatings and Nielsen Media Research entered
into an Agreement (the "Top-Off Agreement") pursuant to which Nielsen Media
Research agreed to exercise the Warrants and the Top-Off Right in full in
accordance with their respective terms such that Nielsen Media Research would
own at least 52% of NetRatings's issued and outstanding shares of Common Stock
on a fully-diluted basis determined as of the closing date of the IPO, upon the
later to occur of (i) the closing of the IPO and (ii) the date on which all
filing requirements under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, had been satisfied (such date is referred to as the "Control
Date"). The IPO occurred on December 8, 1999. The Control
Date occurred on December 19, 1999 and Nielsen Media Research and NetRatings
agreed that the closing under the Top-Off Agreement should occur on December 21,
1999 (the "Closing Date").
Accordingly, on December 21, 1999, NetRatings and Nielsen Media
Research entered into a Closing Agreement to set forth the closing procedures
for the additional investment by Nielsen Media Research in NetRatings pursuant
to the Top-Off Notice, Nielsen Media Research's exercise of the Warrants and the
Top-Off Agreement (the "Closing Agreement"). The Closing Agreement specified
that the number of shares of Common Stock to be acquired by Nielsen Media
Research from other stockholders of NetRatings under the Top-Off Right would be
595,555 shares for an aggregate purchase price of $10,124,435. Thus, on the
Closing Date, Nielsen Media Research paid the aggregate amount of $245,981,999
to NetRatings, including $10,124,435 for the account of the selling stockholders
named in the Closing Agreement, and became the beneficial owner of an additional
17,188,349 shares of Common Stock, representing all shares issuable to Nielsen
Media Research under the Top-Off Right and the Warrants. As a result, on the
Closing Date, Nielsen Media Research became the beneficial owner of 18,832,727
shares of Common Stock in the aggregate, including the conversion of previously
acquired Preferred Stock into Common Stock.
Pursuant to Addendum No. 1 to Second Restated Stockholders Agreement
dated September 22, 1999 (which amended and restated Addendum No. 1 to Restated
Stockholders Agreement dated August 15, 1999), NetRatings agreed, effective as
of August 15, 1999, to increase the size of its board of directors (the "Board")
from four to five members, and Nielsen Media Research was granted the right to
nominate one representative to the Board. David H. Harkness, an Nielsen Media
Research designee, was appointed to the Board on September 21, 1999. Further,
immediately upon Nielsen Media Research's exercise in full of the Second
Warrant, NetRatings would have been obligated to increase the size of its Board
from five to six members, and Nielsen Media Research would have been entitled to
appoint an additional representative on the Board. However, in view of Nielsen
Media Research's exercise in full of the Top-Off Right and the Warrants,
NetRatings agreed, under the terms of the Top-Off Agreement, to increase the
Board from six to eleven members prior to effectiveness of the IPO and, upon the
closing of the exercise of the Top-Off Right and the Warrants on the Closing
Date, to cause six members of the Board to be the designees of Nielsen Media
Research. Accordingly, pursuant to these provisions, on December 20, 1999, the
Board resolved to increase the size of the Board to eleven members and to
appoint John A. Dimling, Thomas A. Mastrelli, Gerald S. Hobbs, Daniel O'Shea and
Charles E. Leonard as directors of NetRatings, in addition to Mr. Harkness
currently serving on the Board as a Nielsen Media Research designee, effective
as of the Closing Date.
Item 4. Changes in Registrant's Certifying Accountant
(a) Previous independent accountants
(i) On December 31,1999, Nielsen Media Research dismissed
PricewaterhouseCoopers LLP as its independent accountants. The
Company's Board of Directors participated in and approved the
decision to change independent accountants.
(ii) The reports of PricewaterhouseCoopers LLP on the financial
statements for the past two fiscal years contained no adverse
opinion or disclaimer of opinion and were not qualified or
modified as to uncertainty, audit scope or accounting principle.
(iii) In connection with its audits for the two most recent fiscal
years and through December 31 ,1999, there have been no
disagreements with PricewaterhouseCoopers LLP on any matter of
accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements
if not resolved to the satisfaction of PricewaterhouseCoopers LLP
would have caused them to make reference thereto in their report
on the financial statements for such years.
(iv) The Company has requested that PricewaterhouseCoopers LLP furnish
it with a letter addressed to the SEC stating whether or not it
agrees with the above statements. A copy of such letter, dated
January 4, 2000 is filed as Exhibit 16 to this Form 8-K.
(b) New independent accountants
(i) The Registrant engaged Ernst & Young LLP as its new independent
accountants as of December 31, 1999.
Item 7. Financial Statements and Exhibits
(a) Financial statements of businesses acquired
(i) It is impractical at this time to provide the financial
statements required by this item. They will be filed within 60
days of this report.
(b) Pro forma financial information
(i) It is impractical at this time to provide the financial
information required by this item. It will be filed within 60
days of this report.
(c) Exhibits
2.1. Second Restated Rights Agreement dated September 22, 1999;
2.2 Top-Off Agreement;
2.3 Closing Agreement;
2.4 Second Restated Stockholders Agreement dated September 22, 1999; and
2.5 Revolving Credit Facility Agreement, dated as of August 15, 1999
among VNU, VNU Ireland, ABN-AMRO Bank N.V., Merrill Lynch
International and Merrill Lynch Capital Corporation.
16 Letter from PricewaterhouseCoopers LLP dated January 4, 2000
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NIELSEN MEDIA RESEARCH, INC.
Date: January 4, 2000 By: /s/ THOMAS W. YOUNG
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Thomas W. Young
Executive Vice President &
Chief Financial Officer
/s/ STUART J. GOLDSHEIN
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Stuart J. Goldshein
Vice President and Controller
EXHIBIT INDEX
EXHIBIT NO. TITLE
2.1. Second Restated Rights Agreement dated September 22, 1999
(incorporated herein by reference to Exhibit 4.1 of NetRatings'
Registration Statement on Form S-1 No. 333-87717, dated
September 24, 1999)
2.2. Agreement between the Issuer and NMR dated November 9, 1999
(incorporated herein by reference to Exhibit 4.4 of NetRatings'
Registration Statement on Form S-1/A No. 333-87717, dated
November 15, 1999)
2.3. Closing Agreement between the Issuer and NMR dated December 21,
1999 (incorporated herein by reference to Exhibit 9 to the
Schedule 13D filed by Issuer on January 3, 2000 with respect to
NetRatings)
2.4. Second Restated Stockholders Agreement dated September 22, 1999
(incorporated herein by reference to Exhibit 4.2 of NetRatings'
Registration Statement on Form S-1 No. 333-87717, dated
September 24, 1999)
2.5. Revolving Credit Facility Agreement, dated as of August 15,
1999 among VNU, VNU Ireland, ABN-AMRO Bank N.V., Merrill Lynch
International and Merrill Lynch Capital Corporation
(incorporated herein by reference to Exhibit 99(b) to the
Schedule 14D-1 filed by Niner Acquisition, Inc., VNU USA, Inc.
and VNU N.V. on August 20, 1999 with respect to NMR (File No.
011-12275))
16. Letter from PricewaterhouseCoopers LLP dated January 4, 2000.