SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
ACNIELSEN CORPORATION
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11:*
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[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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ACNIELSEN LOGO 177 Broad Street, Stamford, CT 06901
March 13, 1998
Dear Shareholder:
You are invited to attend the 1998 Annual Meeting of Shareholders of
ACNielsen Corporation on Wednesday, April 15, 1998 at 9:00 A.M. at 1209 Orange
Street, Wilmington, Delaware.
The attached Notice of Annual Meeting and Proxy Statement describe the
business to be acted upon at the meeting. The Annual Report for the year ended
December 31, 1997 is also enclosed.
Your vote is important. Accordingly, whether or not you plan to attend the
meeting, please ensure that your shares are represented by completing and
returning the accompanying proxy card. Sending in a signed proxy will in no way
limit your right to vote at the Annual Meeting if you later decide to attend in
person.
Sincerely
/s/ NICHOLAS L. TRIVISONNO
------------------------------------
Nicholas L. Trivisonno
Chairman and Chief Executive Officer
ACNIELSEN LOGO 177 Broad Street, Stamford, CT 06901
NOTICE OF ANNUAL MEETING
The Annual Meeting of Shareholders of ACNielsen Corporation will be held on
Wednesday, April 15, 1998 at 9:00 A.M. at 1209 Orange Street, Wilmington,
Delaware, to take action on the following matters:
1. To elect four Class II directors for a three-year term.
2. To consider and vote upon the ratification of the selection of
independent public accountants to audit the Company's consolidated
financial statements for 1998.
3. To transact such other business as may properly come before the
meeting or any adjournment thereof. The Company knows of no other business
to be brought before the meeting.
The Board of Directors has fixed the close of business on February 19, 1998
as the record date for the determination of Shareholders entitled to notice of,
and to vote at, the meeting.
By Order of the Board of Directors,
/s/ ELLENORE O'HANRAHAN
-----------------------------------------
Ellenore O'Hanrahan, Secretary
Dated: March 13, 1998
PROXY STATEMENT
GENERAL
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of ACNielsen Corporation ("ACNielsen" or the "Company")
of proxies for the Annual Meeting of Shareholders to be held on April 15, 1998.
These proxy materials are being mailed to Shareholders commencing approximately
March 13, 1998.
The principal executive offices of ACNielsen are located at 177 Broad
Street, Stamford, Connecticut 06901 and its telephone number is (203) 961-3000.
SPIN-OFF FROM DUN & BRADSTREET
The Company began operating as an independent, publicly-held company on
November 1, 1996 as a result of its spin-off (the "Spin-Off") on that date from
The Dun & Bradstreet Corporation ("Dun & Bradstreet"). Prior to the Spin-Off,
the Company operated as a wholly-owned business of Dun & Bradstreet.
VOTING AND REVOCABILITY OF PROXIES
Your vote is important and the Board of Directors urges you to exercise
your right to vote.
Sending in a signed proxy will in no way limit your right to vote at the
Annual Meeting if you later decide to attend in person. Any Shareholder giving a
proxy has the right to revoke it at any time before it is exercised by executing
and returning a proxy bearing a later date, by giving written notice of
revocation to the Secretary of ACNielsen, or by attending the meeting and voting
in person. Proxies must be filed with the secretary of the meeting prior to or
at the commencement of the Annual Meeting. All properly executed proxies not
revoked will be voted at the meeting in accordance with the instructions
contained therein. A proxy which is signed and returned by a Shareholder of
record without specification marked in the instruction boxes will be voted, as
to proposals specified in the proxy, in accordance with the recommendations of
the Board of Directors as outlined in this Proxy Statement. If any other
proposals are brought before the meeting and submitted to a vote, all proxies
will be voted in accordance with the judgment of the persons voting the
respective proxies.
The preceding paragraph does not apply to shares held in a participant's
account in the ACNielsen Corporation Employee Stock Ownership Plan (the "ESOP")
and the ACNielsen Corporation Savings Plan (the "Savings Plan"). For
participants in those plans, each of which have contributions invested in
ACNielsen Common Stock, the trustee of those plans has agreed that the proxy
will serve as a voting instruction for the trustee. The proxy will also serve as
a proxy for any shares registered in the participant's own name. Proxies
covering shares in the plans must be received prior to April 8, 1998. If a proxy
covering shares in the ESOP or Savings Plan has not been received prior to April
8, 1998 or if it is signed and returned without specification marked in the
instruction boxes, the trustee will vote those plan shares in the same
proportion as the respective shares in such plan for which it has received
instructions, except as otherwise required by law.
RECORD DATE
The Board of Directors has fixed the close of business on February 19, 1998
as the record date (the "Record Date") for the determination of the Shareholders
entitled to receive notice of, and to vote at, the Annual Meeting. The only
outstanding equity or voting securities of ACNielsen are shares of Common Stock,
par value $0.01 per share. Only holders of record of shares of Common Stock as
of the Record Date will be entitled to vote at the meeting. As of the close of
business on February 19, 1998, ACNielsen had outstanding 57,223,470 shares of
Common Stock. Each such share will be entitled to one vote.
PROXY SOLICITATION
In connection with proxy soliciting material mailed to Shareholders,
employees of ACNielsen may communicate with Shareholders personally or by
telephone, facsimile or mail to solicit their proxies. ACNielsen has also
retained the firm of Innisfree M&A Incorporated to assist in the solicitation of
proxies for a fee estimated at
1
$10,000 plus expenses. ACNielsen will pay all expenses related to such
solicitations of proxies. ACNielsen and Innisfree M&A Incorporated will request
banks and brokers to solicit proxies from their customers where appropriate and
will reimburse them for reasonable out-of-pocket expenses.
QUORUM AND VOTING REQUIREMENTS
ACNielsen's by-laws provide that the holders of a majority in voting power
of the stock issued and outstanding and entitled to vote thereat, present in
person or represented by proxy, shall constitute a quorum at the Annual Meeting.
Abstentions and broker "non-votes" are counted as present and entitled to vote
for purposes of determining a quorum. A broker "non-vote" occurs when a nominee
holding shares for a beneficial owner does not vote on a particular proposal
because the nominee does not have discretionary voting power with respect to
that item and has not received instructions from the beneficial owner.
Directors shall be elected by the holders of a plurality of the voting
power present in person or represented by proxy and entitled to vote.
Abstentions and broker "non-votes" shall not be counted for purposes of the
election of directors.
SECURITY OWNERSHIP OF MANAGEMENT AND OTHERS
The following tables set forth (i) the number of shares of ACNielsen Common
Stock beneficially owned by each of the directors, each of the executive
officers named in the Summary Compensation Table below, and all present
directors and executive officers of ACNielsen as a group, at December 31, 1997
and (ii) the name and address of the only persons known to ACNielsen to be the
beneficial owners (the "Owners") of more than five percent of the outstanding
Common Stock and the number of shares so owned, to ACNielsen's knowledge, on
December 31, 1997 (or, in the case of Richard C. Blum & Associates, L.P.,
Richard C. Blum & Associates, Inc. and Richard C. Blum, January 30, 1998). Such
information is based upon information furnished by each such person or, in the
case of each Owner, based upon a Schedule 13G or 13D filed by such Owner with
the Securities and Exchange Commission ("SEC"). Unless otherwise stated, the
indicated persons have sole voting and investment power over the shares listed.
Percentages are based upon the number of shares of ACNielsen Common Stock
outstanding at December 31, 1997 plus, where applicable, the number of shares
that the indicated person and group had a right to acquire within 60 days of
such date.
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
AMOUNT AND NATURE PERCENT OF
NAME OF BENEFICIAL OWNERSHIP (1) CLASS
---- --------------------------- ----------
Robert H. Beeby ............................... 8,738 (2) **
Robert J. Chrenc .............................. 210,594 * **
Michael P. Connors ............................ 280,414 * **
Earl H. Doppelt ............................... 337,475 * **
Donald W. Griffin ............................. 7,738 **
Thomas C. Hays ................................ 9,738 **
Karen L. Hendricks ............................ 9,738 **
Robert M. Hendrickson ......................... 8,738 **
Robert Holland, Jr. ........................... 8,876 (3) **
Robert J Lievense ............................. 427,294 * **
John R. Meyer ................................. 8,870 (4) **
Brian B. Pemberton ............................ 8,738 (5) **
Robert N. Thurston ............................ 13,738 (6) **
Nicholas L. Trivisonno ........................ 491,286 * **
All Directors and Executive Officers
as a Group ................................... 1,831,975 3.1%
- --------------
* Includes purchases on the open market on November 4, 1996, the first day of
regular way trading in the Company's Common Stock, in the amount of 45,607
shares in the case of Mr. Trivisonno, 28,504 shares in the
2
case of Mr. Lievense, 28,504 shares in the case of Mr. Connors, 20,523
shares in the case of Mr. Doppelt and 20,523 shares in the case of Mr.
Chrenc. Also includes purchases on the open market during the week
commencing February 24, 1997 in the amount of 20,000 shares in the case of
Mr. Trivisonno and 7,500 shares in the case of Mr. Lievense.
** Less than 1%
(1) The share amounts indicated include the following:
(i) Shares which may be acquired by exercising stock options as of
December 31, 1997 or within 60 days thereafter: Mr. Beeby, 5,834
shares; Mr. Chrenc, 189,583 shares; Mr. Connors, 250,073 shares; Mr.
Doppelt, 315,277 shares; Mr. Griffin, 5,834 shares; Mr. Hays, 5,834
shares; Ms. Hendricks, 5,834 shares; Mr. Hendrickson, 5,834 shares;
Mr. Holland, 5,834 shares; Mr. Lievense, 389,714 shares; Mr. Meyer,
5,834 shares; Mr. Pemberton, 5,834 shares; Mr. Thurston, 5,834 shares;
Mr. Trivisonno, 424,238 shares.
(ii) Shares of restricted stock granted under the Non-Employee Directors'
Stock Incentive Plan: 1,904 shares for each of Messrs. Beeby, Griffin,
Hays, Hendrickson, Meyer, Pemberton and Thurston and Ms. Hendricks and
2,042 shares for Mr. Holland.
(iii) Shares held through the Employee Stock Ownership Plan: 488 shares for
Mr. Chrenc, 496 shares for each of Messrs. Connors and Doppelt, 530
shares for Mr. Lievense and 555 shares for Mr. Trivisonno.
As of December 31, 1997, the following directors also held stock units
under the Non-Employee Directors' Deferred Compensation Plan: Mr. Hays,
1,429 units; Mr. Holland, 2,303 units; Mr. Pemberton, 2,574 units; Mr.
Thurston, 3,439 units. Each stock unit entitles the holder to receive one
share of ACNielsen stock after termination of service as a director.
(2) Includes 1,000 shares held by spouse as to which Mr. Beeby has shared
voting power and shared investment power.
(3) Includes 1,000 shares owned jointly with spouse and as to which Mr. Holland
has shared voting power and shared investment power.
(4) Includes 832 shares owned jointly with spouse and as to which Mr. Meyer has
shared voting power and shared investment power.
(5) Includes 500 shares owned jointly with spouse and as to which Mr. Pemberton
has shared voting power and shared investment power.
(6) Includes 2,000 shares owned jointly with spouse and as to which Mr.
Thurston has shared voting power and shared investment power.
3
BENEFICIAL OWNERS OF MORE THAN FIVE PERCENT OF OUTSTANDING SHARES
AMOUNT AND NATURE OF
NAME AND ADDRESS BENEFICIAL OWNERSHIP PERCENT OF CLASS
---------------- -------------------- ----------------
Harris Associates L.P. and its sole
general partner, Harris Associates, Inc.,
Two North LaSalle Street
Suite 500
Chicago, IL 60602 .............................. 8,387,845 (1) 14.60%
FMR Corp., Edward C. Johnson 3d
and Abigail P. Johnson,
82 Devonshire Street
Boston, MA 02109 ............................... 4,921,044 (2) 8.56%
Mellon Bank Corporation
Boston Group Holdings, Inc.
The Boston Company, Inc.
c/o Mellon Bank Corporation
One Mellon Bank Center
Pittsburgh, PA 15258 ........................... 4,045,017 (3) 7.04%
Richard C. Blum & Associates, L.P.
Richard C. Blum & Associates, Inc.
Richard C. Blum
909 Montgomery Street
Suite 400
San Francisco, CA 94133 ........................ 2,949,600 (4) 5.13%
- ---------------------
(1) Harris Associates L. P. and its sole general partner, Harris Associates,
Inc., have jointly filed a Schedule 13G with the SEC reporting that they
had, as of December 31, 1997, shared voting power over 8,387,845 shares of
the Company's Common Stock, sole dispositive power over 2,117,379 shares
and shared dispositive power over 6,270,466 shares.
(2) FMR Corp., Edward C. Johnson 3d and Abigail P. Johnson have jointly filed a
Schedule 13G with the SEC reporting that they had, as of December 31, 1997,
sole dispositive power over 4,921,044 shares of the Company's Common Stock
and that FMR Corp. also had sole voting power over 220,848 shares.
(3) Mellon Bank Corporation ("Mellon") and its subsidiaries Boston Group
Holdings, Inc. ("BGH") and The Boston Company, Inc. ("BC") have jointly
filed a Schedule 13G with the SEC reporting that, as of December 31, 1997,
Mellon had (i) sole voting power over 3,071,990 shares of the Company's
Common Stock (including 2,512,605 shares beneficially owned by BC and its
parent BGH), (ii) shared voting power over 15,529 shares of the Company's
Common Stock (including 14,800 shares beneficially owned by BC and BGH),
(iii) sole dispositive power over 3,844,719 shares of the Company's Common
Stock (including 3,249,629 shares beneficially owned by BC and BGH) and
(iv) shared dispositive power over 184,684 shares of the Company's Common
Stock (including 179,905 shares beneficially owned by BC and BGH).
(4) Richard C. Blum & Associates, L.P., Richard C. Blum & Associates, Inc. and
Richard C. Blum have jointly filed a Schedule 13D with the SEC reporting
that, as of January 30, 1998, they might be deemed to be beneficial owners
with shared voting power and shared dispositive power with respect to all
of the shares set forth opposite their names in the table.
4
ELECTION OF DIRECTORS
The members of the Board of Directors of ACNielsen are classified into
three classes, one of which is elected at each Annual Meeting of Shareholders to
hold office for a three-year term and until successors of such class are elected
and have qualified.
The Board of Directors has nominated Messrs. Robert H. Beeby, Thomas C.
Hays, Robert J Lievense and John R. Meyer for election as Class II Directors at
the 1998 Annual Meeting for a three-year term expiring at the 2001 Annual
Meeting of Shareholders. All of the nominees were elected directors in 1996
prior to, and in anticipation of, the Spin-Off. The nominees comprise all
current Class II Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION AS DIRECTORS
---
OF THE NOMINEES LISTED ABOVE.
Except where otherwise instructed, proxies will be voted for election of
all the nominees, all of whom are now members of the Board. In the event, which
is not now anticipated, that any of such nominees should become unavailable to
serve for any reason, shares for which proxies have been received will be voted
for a substitute nominee unless the number of directors constituting the full
Board and Class II is reduced.
Set forth below is the principal occupation of, and certain other
information regarding, the nominees and other Directors whose terms of office
will continue after the Annual Meeting.
NOMINEES FOR CLASS II DIRECTORS FOR TERMS EXPIRING AT THE 2001 ANNUAL MEETING
POSITIONS WITH DIRECTOR PRINCIPAL OCCUPATION OTHER
NAME ACNIELSEN SINCE DURING LAST FIVE YEARS AGE DIRRECTORSHIPS
---- -------------- -------- ---------------------- --- -------------
Robert H. Beeby Director 1996 Retired CEO, Frito-Lay, Inc. 66 Church & Dwight
(snack food manufacturer), Company; The Columbia
1991 to present. Gas System, Inc.
Thomas C. Hays Director 1996 Chairman and Chief Executive 62 Fortune Brands, Inc.;
Officer, Fortune Brands, Gallaher Group Plc.
Inc. (consumer products),
1/95 to present; President
and Chief Operating Officer,
1/88 to 12/94.
Robert J Lievense President, Chief 1996 President and Chief 52
Operating Officer Operating Officer,
and Director ACNielsen, 5/96 to present;
Executive Vice President,
The Dun & Bradstreet
Corporation (business
information), 2/95 to
11/96; Senior Vice
President, 7/93 to 2/95;
Chairman, Dataquest
Incorporated (technology
information), 9/91 to 7/93;
President, NCH Promotional
Services, Inc. (coupon
processing), 8/90 to 7/93.
John R.Meyer Director 1996 Professor Emeritus, Harvard 70 The Dun & Bradstreet
University, 1/97 to present; Corporation; Union
Professor, Harvard Pacific Corporation;
University, 7/73 to 12/96. The Mutual Life
Insurance Company of
New York.
5
CLASS III DIRECTORS HOLDING OFFICE FOR TERMS EXPIRING AT THE 1999 ANNUAL MEETING
POSITIONS WITH DIRECTOR PRINCIPAL OCCUPATION OTHER
NAME ACNIELSEN SINCE DURING LAST FIVE YEARS AGE DIRECTORSHIPS
---- -------------- -------- ---------------------- --- -------------
Michael P. Connors Vice Chairman and 1996 Vice Chairman, ACNielsen, 42
Director 5/96 to present; Senior Vice
President, The Dun &
Bradstreet Corporation
(business information),
4/95 to 11/96; Senior Vice
President, American Express
Travel Related Services
(travel and financial
services), 9/89 to 3/95.
Karen L. Hendricks Director 1996 Chairman, President and 49 Baldwin Piano & Organ
Chief Executive Officer, Company;
Baldwin Piano & Organ The Columbia Gas
Company (manufacturer of System, Inc.
musical instruments), 1/97
to present; President and
Chief Executive Officer,
11/94 to 1/97; Executive
Vice President & General
Manager, Skin Care Division,
The Dial Corp (consumer
products), 5/92 to 9/94.
Robert Holland, Jr. Director 1996 President and Chief 57 Frontier Corporation;
Executive Officer, WorkPlace The Mutual Life
Integrators (office Insurance Company
furniture dealer), 6/97 to of New York;
present; President and Chief Olin Corporation;
Executive Officer, Ben & Tricon Global
Jerry's Homemade, Inc. (ice Restaurants, Inc.
cream and frozen desserts),
2/95 to 10/96; Chairman,
Rokher-J, Inc. (management
consulting), 10/91 to 2/95
and 10/96 to 6/97.
Robert N. Thurston Director 1996 Business consultant, 1985 to 65 Ag-Bag International
present; former Executive Ltd.; McDonald's
Vice President, The Quaker Corporation.
Oats Company.
6
CLASS I DIRECTORS HOLDING OFFICE FOR TERMS EXPIRING AT THE 2000 ANNUAL MEETING
POSITIONS WITH DIRECTOR PRINCIPAL OCCUPATION OTHER
NAME ACNIELSEN SINCE DURING LAST FIVE YEARS AGE DIRECTORSHIPS
---- -------------- -------- ---------------------- --- -------------
Donald W. Griffin Director 1996 Chairman, President and 61 Olin Corporation;
Chief Executive Officer, Rayonier Inc.;
Olin Corporation Rayonier Forest
(manufacturer of chemicals, Products Company.
metals and ammunition), 4/96
to present; President and
Chief Executive Officer,
1/96 to 4/96; President and
Chief Operating Officer,
2/94 to 12/95; Vice
Chairman-Operations,
1/93 to 2/94.
Robert M. Hendrickson Director 1996 President, Juno Capital 68
Partners, Ltd. (corporate
finance and investment
management consulting), 4/88
to present; Chairman, Juno
Land Investment Corporation
(residential real estate
development), 1/90 to
present; President, Juno
Land Development Corporation
(commercial real estate
development), 7/96 to
present.
Brian B. Director 1996 President and Chief 53 ROHN Industries, Inc.
Pemberton Executive Officer, ROHN
Industries, Inc.
(manufacturer of cellular
and PCS industry towers and
shelters), 4/97 to present;
business consultant, 1/97
to 4/97; President-SKYCELL
Services, American Mobile
Satellite Corporation
(mobile communications),
8/96 to 12/96; President
and Chief Executive
Officer, 4/95 to 8/96;
President, 4/90 to 4/95.
Nicholas L. Trivisonno Chairman, Chief 1996 Chairman and Chief Executive 50 Rayonier Inc.
Executive Officer Officer, ACNielsen, 5/96 to
and Director present; Executive Vice
President-Finance and Chief
Financial Officer, The Dun
& Bradstreet Corporation
(business information),
9/95 to 11/96; Executive
Vice President-Strategic
Planning and Group
President, GTE Corporation
(telecommunications), 10/93
to 7/95; Senior Vice
President-Finance, 1/89 to
10/93; director, 4/95 to
7/95.
7
MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors held seven meetings during 1997. In addition, eight
meetings of Board Committees were held. No director attended fewer than 75% of
the aggregate of all meetings of the Board of Directors and of the Board
Committees on which he or she served.
The Board of Directors has three standing Committees comprising (i) the
Audit and Finance Committee, (ii) the Compensation Committee and (iii) the
Nominating Committee.
The principal functions of the Audit and Finance Committee are to (i)
assure that the internal accounting controls of the Company are adequate to
ensure that the Company's financial statements are prepared in accordance with
generally accepted accounting principles, and (ii) review the key financial
aspects of the Company's business, develop recommendations and render reports
with respect thereto to the Board. The Audit and Finance Committee consists of
Messrs. Hendrickson (Chairman), Griffin, Holland, Meyer, Pemberton and Ms.
Hendricks. The Audit and Finance Committee held three meetings during 1997.
The principal functions of the Compensation Committee are to (i) review and
approve the annual compensation and benefits of senior executives, and (ii)
administer the compensation and benefit plans maintained by the Company. It also
has the authority to amend all compensation and benefit plans maintained by the
Company to the extent the delegation of such authority to the Compensation
Committee is permitted under such plans. In performing its responsibilities, the
Compensation Committee advises on, recommends and approves executive and
professional compensation policies, strategies and pay levels and assists the
Board in ensuring that the Company's officers, key executives and Board members
are compensated in accordance with the executive and professional compensation
policy established by the Board of Directors. The Compensation Committee
consists of Messrs. Thurston (Chairman), Beeby, Griffin, Hays and Pemberton. The
Compensation Committee held four meetings during 1997.
The principal functions of the Nominating Committee are to (i) recommend
criteria to the Board regarding qualifications for Board membership, (ii) review
the qualifications of candidates for Board membership and (iii) recommend
candidates to the Board for election as directors. Shareholders' recommendations
for nominees for membership on the Board of Directors will be considered by the
Nominating Committee. The Nominating Committee has not adopted formal procedures
for the submission of such recommendations. However, Shareholders may recommend
nominees to the Nominating Committee by submitting the names in writing to: John
R. Meyer, Chairman of the Nominating Committee, ACNielsen Corporation, 177 Broad
Street, Stamford, CT 06901. ACNielsen's by-laws specify certain time
limitations, notice requirements and other procedures applicable to the
submission of nominations to be brought before an Annual or Special Meeting of
the Company. The Nominating Committee consists of Messrs. Meyer (Chairman),
Beeby, Hays and Hendrickson. The Nominating Committee held one meeting during
1997.
8
RATIFICATION OF SELECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS
Upon the recommendation of the Audit and Finance Committee, the Board of
Directors of ACNielsen has selected Arthur Andersen LLP ("Arthur Andersen") as
independent public accountants to audit the consolidated financial statements of
the Company for the year 1998. In accordance with a resolution of the Board of
Directors, this selection is being presented to Shareholders for ratification at
the Annual Meeting.
Arthur Andersen was originally appointed by the Board as the Company's
independent public accountants, effective as of the Spin-Off, and after the
Board had consulted with, and received the approval of, those persons who were
to be appointed to the Board's Audit and Finance Committee when that Committee
was subsequently formed.
Arthur Andersen has acted as the Company's independent public accountants
since the Spin-Off. Coopers & Lybrand L.L.P. ("Coopers & Lybrand") had been
engaged by Dun & Bradstreet prior to the Spin-Off to audit the financial
statements of ACNielsen in connection with the Spin-Off.
In connection with the audits of the financial statements of ACNielsen as
of December 31, 1997 and 1996, and for each of the two years in the period ended
December 31, 1997, the report of Arthur Andersen contained no adverse opinion or
a disclaimer of opinion, or qualification or modification as to uncertainty,
audit scope, or accounting principles.
During ACNielsen's 1994 and 1995 fiscal years, and the ten-month period in
1996 prior to engaging Arthur Andersen, neither ACNielsen nor, to the best of
ACNielsen's knowledge, anyone acting on ACNielsen's behalf, consulted Arthur
Andersen regarding either (i) the application of accounting principles to a
specified transaction, either completed or proposed, the type of audit opinion
that might be rendered on ACNielsen's financial statements, or a written report
or oral advice provided to ACNielsen that Arthur Andersen concluded was an
important factor considered by ACNielsen in reaching a decision as to the
accounting, auditing or financial reporting issue or (ii) any matter that was
the subject of a disagreement (as defined in paragraph 304(a)(1)(iv) of
Regulation S-K) with the former accountant or a reportable event (as described
in paragraph 304(a)(1)(v) of Regulation S-K).
In connection with the audits of the financial statements of ACNielsen as
of December 31, 1995 and 1994, and for each of the two years in the period ended
December 31, 1995, and in the subsequent ten-month interim period in 1996, no
disagreements existed between ACNielsen and Coopers & Lybrand on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure that, if not resolved to the satisfaction of Coopers &
Lybrand, would have caused it to make reference to the subject matter of the
disagreement in connection with its report.
A representative of Arthur Andersen is expected to be present at the Annual
Meeting. Such representative will have the opportunity to make a statement if he
or she so desires and is expected to be available to respond to appropriate
questions.
If the proposal to ratify the selection of Arthur Andersen is not approved
by Shareholders, or if prior to the 1999 Annual Meeting, Arthur Andersen
declines to act or otherwise becomes incapable of acting, or if its employment
is discontinued by the Board of Directors, then the Board of Directors will
appoint other independent accountants whose employment for any period subsequent
to the 1999 Annual Meeting will be subject to ratification by the Shareholders
at that meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE
---
SELECTION OF ARTHUR ANDERSEN.
9
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
REPORT OF THE COMPENSATION COMMITTEE
BACKGROUND
This report to Shareholders reviews the decisions made and actions taken by
the Compensation Committee of the Board of Directors (the "Committee") as they
relate to the compensation of the Chairman and Chief Executive Officer and the
other executive officers, all of whom are named in the Summary Compensation
Table (the "named officers"), for the period from January 1, 1997 to December
31, 1997.
The Committee's oversight of the Company's executive compensation program
is directed by an overall philosophy intended to meet several important
criteria: (i) enable the Company to retain and attract the necessary strategic
leadership resources; (ii) directly link management compensation to the
Company's share price appreciation and, therefore, Shareholder value
appreciation; and (iii) tie pay to the Company's achievement of a financial
turnaround. In all of its executive compensation determinations, the Committee
considered the nature of the financial and operational challenges and
opportunities facing the Company.
EXECUTIVE COMPENSATION PROGRAM -- OVERVIEW AND ACTIONS
The executive compensation program for the named officers is comprised of
two principal elements: annual cash compensation (consisting of base salaries
and annual incentives) and long-term incentives (consisting of turnaround
incentives and stock option awards). These plans were each designed to further
the Shareholders' interests by facilitating the employment of talented
executives and motivating them to achieve superior levels of performance. An
overview of each of these elements and the specific actions taken is provided
below.
ANNUAL CASH COMPENSATION
Annual cash compensation for the named officers consists of base salary and
an annual at-risk incentive.
At the time of the Spin-Off from Dun & Bradstreet in November 1996, the
Committee reviewed competitive pay data, and set base salary levels and annual
incentive targets for the named officers for the period through December 31,
1998. In making its determinations at that time, the Committee examined pay data
provided by an independent executive compensation consultant for similar or
related positions in a 28-company sample of consumer packaged goods companies
and reviewed such data with the consultant. In addition, the Committee
considered compensation practices among professional service firms.
The Company considers these to be relevant competitive frames of reference
as the pay levels reflect compensation levels for the labor market within which
ACNielsen competes for executive talent. The Committee is aware that this
comparison group differs from that used for relative shareholder return
comparison purposes in this Proxy Statement's performance graph. The Committee
believes that the performance graph peer group does not reflect the labor market
within which the Company competes for executive resources.
The annual incentive links the award of each named officer to performance
measures most appropriate to his responsibilities. To focus efforts on overall
Company objectives, their awards were tied to corporate performance, as defined
by revenue, operating income and net income, employee satisfaction, and their
contributions toward the Company's achievements in 1997, including the
significant increase in the Company's market capitalization; development of the
Company's corporate direction; enhanced recognition of the Company among the
investment community; and significant improvement in client and retailer
satisfaction levels.
In accordance with the Committee's decision at the time of the Spin-Off to
set base salaries and annual incentive targets through December 31, 1998, no
adjustments to base salary or annual incentive targets were made during 1997 for
the named officers.
LONG-TERM INCENTIVE COMPENSATION
The Company provides the named officers with incentives linked to
longer-term corporate performance through the turnaround incentive described
below and through equity-based incentives. The combination of these two key
10
elements is intended to enable the named officers to benefit accordingly when
meaningful Shareholder wealth has been created, and directly link a significant
portion of total and at-risk compensation to the Company's long-term stock
performance.
Turnaround Incentive. ACNielsen's turnaround incentive, granted at the time
of the Spin-Off, heightens the focus for the named officers on the need to
dramatically improve the Company's financial results. The turnaround incentive
provides awards to the named officers based on the Company's cumulative revenue
growth, operating income and return on investment performance over a two-year
period. In connection with the Spin-Off, the Committee approved the adoption of
the turnaround incentive and specific incentive targets for the named officers
and performance objectives for the 1997-1998 performance period.
Stock Options. The equity-based incentive plans provide the named officers
with stock option-based incentives. The equity-based incentive plans are
generally designed to provide periodic grants of options to acquire the
Company's Common Stock.
In connection with the Spin-Off of the Company as an independent,
publicly-traded corporation, grants of new stock options ("Effective Date
Options") were made to the named officers in 1996. These Effective Date Options
were granted with an exercise price based on the average of the high and low
trading prices of ACNielsen Common Stock on the first day of regular way trading
as an independent company. These grants made to the named officers anticipated
no additional stock option grants to the named officers prior to November 1999.
The Effective Date Options granted to the named officers become exercisable
ratably over six years. In addition, these options have a performance-
accelerated vesting provision whereby one half of the unvested options become
exercisable if the Company's stock price reaches 150% of the exercise price for
five consecutive trading days and the remaining unvested options become
exercisable if the Company's stock price reaches 200% of the exercise price for
five consecutive trading days. In September 1997, the Company's stock price
achieved the first of these performance-accelerated vesting thresholds.
The Effective Date Option grants were approved as part of the launching of
the independent ACNielsen, were designed to maximize the incentive to increase
the value of ACNielsen to its Shareholders, and recognized both (i) the reduced
long-term cash compensation opportunity available to the named officers as
compared to the long-term cash compensation that had been available to them at
Dun & Bradstreet prior to the Spin-Off and (ii) that the executive compensation
program anticipates no additional stock option grants to the named officers
prior to November 1999.
A portion of the stock options granted in connection with the Spin-Off
reflected the substitution of ACNielsen options ("Substitute Options") for Dun &
Bradstreet stock options held by the named officers as of the Spin-Off. The
conversion method was agreed to as part of the Spin-Off agreements with Dun &
Bradstreet and was calculated by comparing Dun & Bradstreet's average stock
price over the five consecutive trading days immediately preceding the first
date on which Dun & Bradstreet Common Stock traded ex-dividend and ACNielsen's
average stock price for the first five consecutive trading days starting on the
first date on which ACNielsen Common Stock traded regular way. The conversion
resulted in an increased number of options, each with lower exercise prices to
preserve the economic value of the Dun & Bradstreet options, all of which Dun &
Bradstreet options initially had been granted at fair market value. Other
material provisions, including the normal vesting schedule and term, were not
changed.
No new grants of stock options were made to the named officers in 1997.
COMPENSATION FOR THE CHIEF EXECUTIVE OFFICER
In October 1996, the Committee reviewed the base salary and annual
incentive target for the Company's Chairman and Chief Executive Officer,
Nicholas L. Trivisonno. As set forth above, (i) no adjustments were made to Mr.
Trivisonno's base salary or annual incentive target during 1997 and (ii) no
additional stock option grants were made to Mr. Trivisonno in 1997.
11
The Committee awarded Mr. Trivisonno an annual incentive award of $800,000
for 1997 based on its assessment of the Company's financial performance as
having substantially met its revenue, and significantly exceeded its operating
income and net income performance targets, and in recognition of the Company
having made substantial progress in improving employee satisfaction.
Additionally, the Committee considered Mr. Trivisonno's important contributions
toward the Company's significant achievements in 1997, including the significant
increase in the Company's market capitalization; development of the Company's
corporate direction; enhanced recognition of the Company among the investment
community; and significant improvement in client and retailer satisfaction
levels.
$1 MILLION DEDUCTION LIMIT
Section 162(m) of the Internal Revenue Code (the "Code") limits
deductibility of certain compensation for the Chief Executive Officer and the
additional four executive officers who are highest paid and employed at year-end
to $1 million per year per executive. The $1 million limit on deductibility does
not apply to compensation that meets the requirements for qualified
performance-based compensation as further described under the Code.
The 1996 ACNielsen Corporation Senior Executive Incentive Plan and the 1996
ACNielsen Corporation Key Employees' Stock Incentive Plan, approved by
Shareholders last year, enable the Company to meet the conditions to allow
compensation under those plans to qualify for tax deductibility under the Code.
IN CONCLUSION
The Committee believes the executive compensation program described above,
through the Committee's administration of the elements of the program, will
facilitate the Company's ability to retain, motivate and attract the executive
resources required to maximize Shareholder returns. The emphasis on variable pay
and the direct link to both short- and long-term results, as well as financial
and stock performance, links pay to critical measures of Company performance.
THE COMPENSATION COMMITTEE
Robert N. Thurston, Chairman
Robert H. Beeby
Donald W. Griffin
Thomas C. Hays
Brian B. Pemberton
12
PERFORMANCE GRAPH
The following graph compares the cumulative total return to Shareholders of
ACNielsen Common Stock to the cumulative total return of the Standard & Poor's
500 Index and a peer group. Since there is no widely recognized standard
industry group or index comprising ACNielsen and peer companies, the
BusinessWeek magazine Other Services group of companies has been used as the
peer group. This is an independently compiled company grouping that includes
ACNielsen and 14 other companies. As ACNielsen only commenced regular way
trading on the New York Stock Exchange on November 4, 1996, the period covered
by the graph begins on that date and ends on December 31, 1997.
COMPARISON OF CUMULATIVE TOTAL RETURN
ACNIELSEN, S&P 500 & BUSINESSWEEK OTHER SERVICES GROUP
[GRAPHICAL REPRESENTATION OF PERFORMANCE GRAPH]
YEAR ENDING 1996 1997
------------------- ------- -------
ACNielsen .................. $ 97.57 $156.00
S&P 500 .................... $104.99 $140.02
BW Group ................... $ 97.80 $131.84
SOURCE: STANDARD & POOR'S
ASSUMES $100 INVESTED ON 11/4/96
ASSUMES DIVIDEND REINVESTMENT
THE PEER GROUP IS MADE UP OF COMPANIES IN THE BUSINESSWEEK MAGAZINE OTHER
SERVICES GROUP AS PUBLISHED ON DECEMBER 29, 1997. HOWEVER, THE PEER GROUP RETURN
FIGURES SHOWN IN THE GRAPH EXCLUDE ACNIELSEN AND ONE COMPANY THAT DOES NOT HAVE
A STOCK PRICE HISTORY FOR THE PERIOD SHOWN. THE GRAPH INCLUDES THE FOLLOWING
COMPANIES: ACCUSTAFF, INC., BORG-WARNER SECURITY CORPORATION, CDI CORPORATION,
COGNIZANT CORPORATION, CEDANT CORPORATION, HANDLEMAN COMPANY, INTERIM SERVICES
INC., KELLY SERVICES INC., MANPOWER INC., OLSTEN CORPORATION, SERVICE
CORPORATION INTERNATIONAL, SERVICEMASTER LIMITED PARTNERSHIP, AND UNITED AUTO
GROUP, INC. IN ACCORDANCE WITH SEC REQUIREMENTS, THE RETURN FOR EACH ISSUER IN
THE PEER GROUP HAS BEEN WEIGHTED ACCORDING TO ITS STOCK MARKET CAPITALIZATION AT
THE BEGINNING OF EACH PERIOD FOR WHICH A RETURN IS INDICATED.
13
SUMMARY COMPENSATION TABLE
With the exception of Robert J. Chrenc, the executive officers named in the
Summary Compensation Table below were employed by Dun & Bradstreet until the
Spin-Off. Accordingly, as reflected in the Summary Compensation Table, such
executive officers' compensation, both annual and long-term, for all periods up
to the November 1, 1996 Spin-Off was paid by Dun & Bradstreet based on their
responsibilities at Dun & Bradstreet and their compensation for the remainder of
1996 was paid by ACNielsen. All 1995 compensation was paid by Dun & Bradstreet.
LONG-TERM COMPENSATION
--------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------- -------------------- ----------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
SECURITIES
OTHER ANNUAL RESTRICTED UNDERLYING LONG-TERM ALL OTHER
COMPEN- STOCK OPTIONS/ INCENTIVE COMPEN-
SALARY BONUS SATION (1) AWARD(S)(2) SARS (3) PAYOUTS (4) SATION (5)
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#) ($) ($)
- --------------------------- ---- ------ ----- ----------- ---------- --------- ----------- ----------
Nicholas L. Trivisonno (6) 1997 ART 550,000 800,000 54,768 0 0 0 5,600 ART
Chairman and Chief =====================================================================================================
Executive Officer 1996 ART 91,667 86,000 -- 0 740,145 0 3,208 ART
D&B 375,000 691,667 -- 0 0 550,000 0 D&B
------- ------- --- ------- --------- ------
Total 466,667 777,667 -- 0 740,145 550,000 3,208 Total
=====================================================================================================
1995 D&B 146,591 175,000 -- 0 24,114 0 0 D&B
=====================================================================================================
Robert J Lievense 1997 ART 475,000 565,000 163,579 0 0 0 5,600 ART
President and Chief =====================================================================================================
Operating Officer 1996 ART 79,167 64,000 -- 0 606,522 0 2,771 ART
D&B 368,333 694,406 576 0 0 1,096,341 27,791 D&B
------- ------- --- ------- --------- ------
Total 447,500 758,406 576 0 606,522 1,096,341 30,562 Total
=====================================================================================================
1995 D&B 411,026 265,662 1,187 307,988 15,696 116,112 23,216 D&B
=====================================================================================================
Michael P. Connors (7) 1997 ART 375,000 525,000 -- 0 0 0 5,600 ART
Vice Chairman =====================================================================================================
1996 ART 62,500 56,000 -- 0 437,649 0 2,188 ART
D&B 263,333 622,500 551,914 0 0 392,800 8,001 D&B
------- ------- --- ------- --------- ------
Total 325,833 678,500 551,914 0 437,649 392,800 10,189 Total
=====================================================================================================
1995 D&B 225,000 439,180 -- 249,951 16,759 0 0 D&B
=====================================================================================================
Earl H. Doppelt 1997 ART 375,000 375,000 -- 0 0 0 5,600 ART
Executive Vice President =====================================================================================================
and General Counsel 1996 ART 62,500 43,000 -- 0 504,325 0 2,188 ART
D&B 295,833 791,666 -- 0 0 888,000 22,642 D&B
------- ------- --- ------- --------- ------
Total 358,333 834,666 -- 0 504,325 888,000 24,830 Total
=====================================================================================================
1995 D&B 340,000 446,960 -- 79,992 9,411 0 5,671 D&B
=====================================================================================================
Robert J. Chrenc (8) 1997 ART 350,000 375,000 -- 0 0 0 5,600 ART
Executive Vice President =====================================================================================================
and Chief Financial 1996 ART 204,167 175,000 -- 0 325,000 0 2,042 ART
Officer =====================================================================================================
1995 0 0 0 0 0 0 0
=====================================================================================================
- ------------
(1) Of the 1997 amount shown for Mr. Trivisonno, $42,486 represents
Company-paid transportation. Of the 1997 amount shown for Mr. Lievense, (i)
$130,808 represents commutation expenses comprised of reimbursement for
travel and lodging and Company-paid transportation, consistent with a prior
arrangement Mr. Lievense had with Dun & Bradstreet, and (ii) $23,271
represents reimbursement for related taxes. The 1995 and 1996 amounts shown
for Mr. Lievense represent reimbursement for taxes with respect to
Company-directed spousal travel. The 1996 amount shown for Mr. Connors
represents reimbursement for relocation expenses as follows: $303,250 for
relocation expenses incurred and $248,664 for taxes. There are no amounts
required to be reported for the other named officers.
14
(2) The 1995 amounts represent the dollar value on the date of grant of Dun &
Bradstreet restricted stock granted in that year. In connection with the
Spin-Off, all restrictions on outstanding Dun & Bradstreet restricted stock
terminated. There were no restricted stock holdings outstanding for the
named officers at December 31, 1997.
(3) Amounts shown represent the number of nonqualified stock options granted
each year. Amounts shown for 1996 include both Substitute Options granted
to replace Dun & Bradstreet options held by the named officers as of the
Spin-Off and Effective Date Options granted as part of the launching of
ACNielsen. The number of Substitute Options granted to the named officers
was as follows: Mr. Trivisonno--90,145; Mr. Lievense--181,522; Mr.
Connors--62,649; Mr. Doppelt--179,325; Mr. Chrenc--0. The number of
Effective Date Options granted was as follows: Mr. Trivisonno--650,000; Mr.
Lievense--425,000; Mr. Connors--375,000; Mr. Doppelt--325,000; and Mr.
Chrenc--325,000. Under the current executive compensation program approved
by the Committee, it is anticipated that the named officers will not
receive additional stock option grants prior to November 1999. The amounts
shown for 1995 represent Dun & Bradstreet options which were terminated
upon the Spin-Off and which were replaced by Substitute Options.
Accordingly, the total number of Substitute Options received by each of the
named officers in 1996 and listed above includes options to replace the
listed 1995 options. Limited SARs were granted in tandem with all listed
options. No new options were granted in 1997.
(4) The amounts shown represent payments made by Dun & Bradstreet under its
long-term incentive plans. The 1996 payments include accelerated payments
made under such plans as a result of the Spin-Off.
(5) The 1996 ACNielsen amount and 1997 amount represents Company contributions
for the account of the named officers under the ACNielsen Employee Stock
Ownership Plan. The 1995 and 1996 Dun & Bradstreet amounts represent
aggregate Dun & Bradstreet contributions for the account of the named
officers under the Dun & Bradstreet Profit Participation Plan and the Dun &
Bradstreet Profit Participation Benefit Equalization Plan.
(6) The 1995 salary and bonus for Mr. Trivisonno represent the amounts earned
from his date of employment, September 5, 1995.
(7) The 1995 salary and bonus for Mr. Connors represent the amounts earned from
his date of employment, April 3, 1995.
(8) The 1996 salary and bonus for Mr. Chrenc represent the amounts earned from
his date of employment, June 1, 1996.
15
OPTION/SAR GRANTS IN LAST FISCAL YEAR
None of the named executive officers were granted options or stock
appreciation rights in 1997.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
The following table provides information as to options exercised by each of
the named executive officers of ACNielsen during 1997, and the number of
securities underlying unexercised options and the value of unexercised
in-the-money options at fiscal year-end.
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS/SARS AT FISCAL IN-THE-MONEY OPTIONS/SARS
ACQUIRED VALUE YEAR-END (#)(1) AT FISCAL YEAR-END ($)(2)
ON EXERCISE REALIZED -------------------------- --------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------- ----------- -------- ----------- ------------- ----------- -------------
Nicholas L. Trivisonno .... 0 0 424,238 315,907 3,541,186 2,630,524
Robert J Lievense ......... 0 0 389,714 216,808 3,273,598 1,818,207
Michael P. Connors ........ 0 0 250,073 187,576 2,115,592 1,590,226
Earl H. Doppelt ........... 0 0 315,277 189,048 2,722,147 1,597,860
Robert J. Chrenc .......... 0 0 189,583 135,417 1,593,692 1,138,356
- --------
(1) No SARs were outstanding at December 31, 1997. However, all outstanding
options were granted in tandem with limited SARs which may be exercised,
in whole or in part, only during the 30-day period beginning on the first
day following the acquisition of at least 20% of all outstanding Common
Stock pursuant to any tender or exchange offer not made by the Company.
(2) The values shown equal the difference between the exercise price of
unexercised in-the-money options and the average of the high and low
trading prices of ACNielsen Common Stock on December 31, 1997. Options are
in-the-money if the fair market value of the Common Stock exceeds the
exercise price of the option.
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
No long-term awards were made to the named executive officers in 1997.
ACNIELSEN RETIREMENT BENEFITS
The following table sets forth the estimated average annual benefits
payable under the ACNielsen Corporation Supplemental Executive Retirement Plan
("SERP") to persons in specified average final compensation and credited service
classifications upon retirement at age 65. Amounts shown in the table also
include (i) U.S. Social Security benefits, (ii) benefits payable under the
ACNielsen Corporation Balance Account for Retirement Plan and the ACNielsen
Corporation Retirement Benefit Excess Plan (qualified and excess defined benefit
plans, respectively, the benefits of which are not determined with reference to
final average compensation), and (iii) benefits, if any, payable under
predecessor plans of Dun & Bradstreet, all of which would be deducted in
calculating benefits payable under the SERP.
16
SERP benefits, which vest after five years of credited service, are
calculated as 5% of average final compensation per year, for the first ten years
of credited service, and 2% per year for the next five years, up to a maximum of
60% of average final compensation after 15 years of credited service. Benefits
payable under the SERP are greater than benefits payable under ACNielsen's
qualified and excess defined benefit plans.
ESTIMATED AGGREGATE ANNUAL ACNIELSEN RETIREMENT
AVERAGE BENEFIT ASSUMING CREDITED SERVICE OF:
FINAL -----------------------------------------------------
COMPENSATION 5 YEARS 10 YEARS 15 YEARS 20 YEARS
- ------------ ---------- -------- -------- --------
$410,000 ................................. $102,500 $205,000 $246,000 $246,000
470,000 ................................. 117,500 235,000 282,000 282,000
510,000 ................................. 127,500 255,000 306,000 306,000
570,000 ................................. 142,500 285,000 342,000 342,000
610,000 ................................. 152,500 305,000 366,000 366,000
670,000 ................................. 167,500 335,000 402,000 402,000
710,000 ................................. 177,500 355,000 426,000 426,000
770,000 ................................. 192,500 385,000 462,000 462,000
The number of years of credited service for Messrs. Trivisonno, Lievense,
Connors, Doppelt and Chrenc are, respectively, two, eight, two, three and one.
Compensation for the purpose of determining SERP benefits consists of base
salary and regular annual cash bonuses. Severance pay, income derived from
equity-based awards and other forms of special remuneration are excluded
(including bonuses based on a performance period of longer than one year).
For 1997, pensionable earnings under the SERP do not include bonuses earned
in 1997 and paid in 1998 to the named executive officers, which were included in
the annual compensation column in the Summary Compensation Table. The following
amounts are deemed pensionable earnings under the SERP for 1997. They consist of
1997 base salary and 1996 bonuses paid in 1997: $636,000 for Mr. Trivisonno,
$539,000 for Mr. Lievense, $431,000 for Mr. Connors, $418,000 for Mr. Doppelt
and $525,000 for Mr. Chrenc.
Average final compensation is defined as the highest average annual
compensation during five consecutive twelve-month periods in the last ten
consecutive twelve-month periods of the member's credited service. The benefits
shown in the table above are calculated on a straight-life annuity basis.
CHANGE IN CONTROL SEVERANCE AGREEMENTS
The Company has entered into agreements with the executive officers named
in the Summary Compensation Table providing severance benefits in the event of a
termination of employment in the circumstances described below following a
"change in control" (as defined below) of the Company. The agreements were
effective as of November 1, 1996 and remain in effect through December 31, 1999.
On each January 1st thereafter, the agreement automatically extends for an
additional year unless notice is given to the contrary by the Company prior to
the preceding September 30th. Following the end of the month in which a change
in control occurs, the agreements will remain in effect for no more than an
additional 15 months (the "Protected Period").
Benefits become payable in the event the executive is terminated during the
Protected Period without "cause" (generally, the executive's willful and
continued failure to perform his duties or his engaging in conduct that is
materially injurious to the Company) or the executive terminates employment
during that period for "good reason" (generally, an unfavorable change in
employment status, reduction in compensation or benefits, required relocation or
the lapse of 12 months following the change in control). The benefits payable
under the agreements include (i) a lump sum amount equal to three times the sum
of the executive's annual base salary and annual bonus, (ii) full vesting under
the SERP and crediting of the maximum number of years of service for purposes of
determining the amount of retirement benefits, (iii) a pro-rated portion of the
executive's annual target bonus and a full target bonus payable with respect to
any performance period longer than one year, (iv) cash reimbursement up to 20%
of annual compensation (but no more than $100,000) for outplacement expenses,
(v) life and health insurance coverage for up to 36 months,
17
and (vi) retiree life and medical insurance beginning at age 55. In addition,
the executive is entitled to a gross-up payment from the Company to cover any
required excise taxes (and any income taxes on the gross-up amount) payable by
the executive as a result of the change in control.
A change in control will generally be deemed to have occurred under the
following circumstances: (i) an acquisition by any person of 20% of the combined
voting power of the Company's securities, (ii) during any period of twenty-four
months a majority of the Company's Board of Directors ceases to consist of (x)
directors in office at the beginning of such period or (y) directors whose
election was approved by two-thirds of the directors in office at the beginning
of the period or by directors whose election was so approved, (iii) the
Company's merger or consolidation with another entity (other than one in which
the Company's shares outstanding prior to the merger represent more than 66 2/3%
of the voting power of the surviving company and no shareholder holds 20% or
more of such voting power) or (iv) the liquidation or sale of substantially all
of the Company's assets.
EXECUTIVE TRANSITION PLAN
The ACNielsen Corporation Executive Transition Plan ("ETP") provides
severance benefits to the Chief Executive Officer of the Company and other
executives he designates including those named in the Summary Compensation
Table. The ETP generally provides for the payment of severance benefits if the
employment of a covered executive terminates by reason of a reduction in force,
job elimination, unsatisfactory job performance or a mutually acceptable
resignation. In the event of an eligible termination, the executive will be paid
104 weeks of salary continuation consisting of such executive's annual base
salary (paid at the same payroll intervals applicable to active employees) and
annual incentive opportunity for the year of termination (pro-rated to reflect
its payment at the same payroll intervals as salary). If, however, the executive
is terminated by reason of unsatisfactory performance, the annual incentive
opportunity will not be included in such executive's salary continuation
payments.
In addition, the ETP provides a covered executive with the following
benefits upon an eligible termination: (i) continued medical, dental and life
insurance coverage throughout the salary continuation period, (ii) unless
terminated for unsatisfactory performance, a pro-rated annual bonus will be paid
for the period of employment if the applicable performance target is met, (iii)
unless terminated for unsatisfactory performance, a pro-rated long-term bonus
will be paid for the period of employment if the applicable performance target
is met and the executive is employed for at least half the period of the
relevant performance cycle and (iv) in certain instances, outplacement services
and financial counseling. The ETP gives the Chief Executive Officer the
discretion to increase or decrease ETP benefits for executives other than the
Chief Executive Officer, subject to the review of any such decision with the
Compensation Committee. The Compensation Committee has this discretion with
respect to the Chief Executive Officer.
The ETP may not be amended during the one year period following a change in
control of the Company (as defined in the change in control agreements). Any
benefits payable under the ETP, however, will be offset by any other severance
payments made to a covered executive by the Company including, but not limited
to, amounts paid pursuant to the change in control agreements.
COMPENSATION OF DIRECTORS
Cash Compensation. Each director not employed by the Company (a
"Non-Employee Director") is paid a retainer at an annual rate of $25,000 in
quarterly installments. In addition, each Non-Employee Director is paid a fee of
$1,000 for each Board or Committee meeting attended (or, in the case of a
meeting held over a two-day period, $2,000) and each Non-Employee Director who
is Chairman of a Board Committee is paid a Chairman's fee at an annual rate of
$3,000 in quarterly installments. Directors employed by the Company receive no
retainers or fees.
Deferred Compensation Plan. Non-Employee Directors may elect to defer all
or a specified part of the retainer and fees pursuant to the 1996 ACNielsen
Corporation Non-Employee Directors' Deferred Compensation Plan (the "Deferred
Compensation Plan"). Under this plan, these directors can defer compensation
into a cash account and/or a deferred stock account. Payment of deferred amounts
and applicable interest or dividends can be deferred until the first business
day of the calendar year immediately following the date on which a deferring
director terminates service as a director. Payments from a deferred cash account
are made in cash and payments from a deferred stock account are made in shares
of ACNielsen Common Stock.
18
Directors' Stock Incentive Plan. Under the terms of the 1996 ACNielsen
Corporation Non-Employee Directors' Stock Incentive Plan (the "Directors'
Incentive Plan"), the Compensation Committee may grant a Non-Employee Director
such number of stock options and/or such number of shares of ACNielsen
restricted stock as the Committee may, in its sole discretion, determine. No
stock options or restricted stock were granted under the Directors' Incentive
Plan in 1997.
Under the director compensation program approved by the Board of Directors,
a director is granted 10,000 stock options under the Directors' Incentive Plan
when he or she first commences service as a director, at an option exercise
price equal to the fair market value of a share of ACNielsen Common Stock on the
date of grant. The director compensation program anticipates that no additional
option grants would be made for two years from the date of the initial grant
and, thereafter, annual grants of 5,000 options would be made.
Change in Control. The Deferred Compensation Plan and the Directors'
Incentive Plan provide that, in the event of a "change in control" (as defined
under "Change in Control Severance Agreements" above) of ACNielsen, the
Compensation Committee may, in its sole discretion, take such actions, if any,
as it deems necessary or desirable with respect to any Awards (as hereinafter
defined) as of the date of the consummation of the change in control including,
without limitation, (i) the acceleration of an Award, (ii) the payment of a cash
amount in exchange for the cancellation of an Award and/or (iii) the issuance of
substitute Awards that will substantially preserve the value, rights and
benefits of any affected Awards previously granted under each such plan.
For purposes of the Deferred Compensation Plan, an Award means the shares
or cash deferred pursuant to such plan. For purposes of the Directors' Incentive
Plan, an Award means a stock option or share of restricted stock granted
pursuant to such plan.
The Company has no retirement plan for Non-Employee Directors.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of
the Company's Common Stock, to file reports of ownership and changes in
ownership with the SEC and New York Stock Exchange. Based on the Company's
records and certain written representations received by the Company, the Company
believes that during 1997 all such filing requirements applicable to its
directors, officers and ten percent stockholders were complied with except that,
due to his being out of the country, Mr. Pemberton filed one report covering one
transaction four days late.
SHAREHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Shareholder proposals intended to be presented at the ACNielsen Annual
Meeting of Shareholders in 1999 must be received, pursuant to SEC rules, by
ACNielsen no later than November 13, 1998. Shareholders should note that, in
addition to applicable SEC rules and regulations, ACNielsen's by-laws specify
certain time limitations, notice requirements and other procedures applicable to
the submission of nominations and other matters to be brought before an Annual
or Special Meeting of the Company.
March 13, 1998
19
ACNIELSEN CORPORATION
PROXY/VOTING INSTRUCTIONS FOR THE ANNUAL MEETING TO BE HELD APRIL 15, 1998
AT 9:00 A.M. AT 1209 ORANGE STREET, WILMINGTON, DELAWARE
NICHOLAS L. TRIVISONNO, ROBERT J. CHRENC and EARL H. DOPPELT, or any of
them, with full power of substitution, are hereby appointed proxies to vote all
the shares of Common Stock of ACNielsen Corporation ("Common Stock") which the
undersigned is entitled to vote at the Annual Meeting of Shareholders on April
15, 1998, and at any adjournment thereof. Participants in the benefit plans
listed in the "Notice to Participants in Certain Benefit Plans" on the back of
this card are referred to such notice for information on the voting of shares
held in such plans.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION OF ALL NOMINEES
IDENTIFIED IN ITEM (1) AND FOR ITEM (2).
(1) Election of four Class II Directors for a three-year term expiring at the
2001 Annual Meeting of Shareholders. Nominees: Robert H. Beeby, Thomas C.
Hays, Robert J Lievense and John R. Meyer.
[ ] FOR all nominees listed above, except [ ] WITHHOLD authority to
vote withheld from the following vote for all nominees
nominees (if any):
--------------------------------
(2) Ratification of the selection of Arthur Andersen LLP as independent public
accountants to audit the Company's consolidated financial statements for
1998. Mark only one.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(Please Turn Over and Sign)
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FOLD AND DETACH HERE
[AC NIELSEN LOGO]
ANNUAL MEETING OF SHAREHOLDERS
APRIL 15, 1998
9:00 A.M.
1209 ORANGE STREET
WILMINGTON, DELAWARE
TO ORDER ACNIELSEN FINANCIAL PUBLICATIONS, PLEASE CALL 1-888-530-2580
OR VISIT OUR WEBSITE AT HTTP://ACNIELSEN.COM.
[LOGO]
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS AND WILL BE VOTED AS
DIRECTED ON THE REVERSE SIDE OF THIS CARD. A PROXY WHICH IS SIGNED AND RETURNED
BY A SHAREHOLDER OF RECORD WITHOUT SPECIFICATION MARKED IN THE INSTRUCTION BOXES
WILL BE VOTED FOR ELECTION OF ALL NOMINEES IDENTIFIED IN ITEM (1) AND FOR ITEM
(2). IF ANY OTHER MATTER IS PROPERLY BROUGHT BEFORE THE MEETING AND SUBMITTED TO
A VOTE, A PROXY WILL BE VOTED IN ACCORDANCE WITH THE JUDGMENT OF THE PERSON(S)
VOTING THE PROXY.
NOTICE TO PARTICIPANTS IN CERTAIN BENEFIT PLANS.
- ------------------------------------------------
The trustee of the ACNielsen Corporation Employee Stock Ownership Plan (the
"ESOP"), and the ACNielsen Corporation Savings Plan (the "Savings Plan") has
agreed that this proxy will also serve as voting instructions from participants
in those plans who have plan contributions for their respective accounts
invested in Common Stock. Proxies covering shares in the plans must be received
prior to April 8, 1998. If a proxy covering shares in the ESOP or Savings Plan
has not been received prior to April 8, 1998 or if it is signed and returned
without specification marked in the instruction boxes, the trustee will vote
those plan shares in the same proportion as the respective shares in such plan
for which it has received instructions, except as otherwise required by law.
Date _____________________________ 1998
________________________________________
________________________________________
Signature(s)
Please sign exactly as name appears at
left. Joint owners should each sign.
Executors, administrators, trustees,
etc. should so indicate when signing and
sign as required by the authority held.
Proxy form begins on the reverse side.
Please vote, date, sign and return
immediately.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
IMPORTANT: PLEASE VOTE, DATE AND SIGN YOUR PROXY AND RETURN IT IN THE ENVELOPE
PROVIDED.