SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No.) Filed by the Registrant |X| Filed by a Party other than the Registrant |_| Check the appropriate box |_| Preliminary Proxy Statement |X| Definitive Proxy Statement |_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12 NIELSEN MEDIA RESEARCH, INC. - -------------------------------------------------------------------------------- (Name of Registrant as Specified in its Charter) - -------------------------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement, if other than 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: ________________________________________________________________________________ 2) Aggregate number of securities to which transaction applies: ________________________________________________________________________________ 3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11: ________________________________________________________________________________ 4) Proposed maximum aggregate value of transaction: ________________________________________________________________________________ 5) Total Fee Paid: ________________________________________________________________________________ |_| Fee paid previously with preliminary materials |_| 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:___________________________________________________ 2) Form, Schedule or Registration Statement No.______________________________ 3) Filing party:_____________________________________________________________ 4) Date Filed:_______________________________________________________________ NIELSEN MEDIA RESEARCH [LOGO] 299 Park Avenue New York, New York 10171 March 9, 1999 Dear Shareholder: You are cordially invited to attend the 1999 Annual Meeting of Shareholders of Nielsen Media Research, Inc. on Tuesday, April 13, 1999 at 9:30 a.m. at 1209 Orange Street, Wilmington, Delaware. The Notice of Annual Meeting and Proxy Statement accompanying this letter describe the business to be acted upon at the meeting. Please promptly vote, date, sign and return your proxy for the meeting even if you plan to attend. You may vote in person at that time if you wish. Sincerely, /s/ JOHN A. DIMLING ------------------------------------- JOHN A. DIMLING President and Chief Executive Officer NIELSEN MEDIA RESEARCH [LOGO] 299 Park Avenue New York, New York 10171 ------------------ NOTICE OF ANNUAL MEETING ------------------ The Annual Meeting of Shareholders of Nielsen Media Research, Inc. will be held on Tuesday, April 13, 1999 at 9:30 a.m. at 1209 Orange Street, Wilmington, Delaware, to take action on the following matters: 1. To re-elect three Class III directors for a three-year term and to elect a new Class II director for a two-year term. 2. To ratify the appointment of PricewaterhouseCoopers LLP as independent public accountants to audit the Company's consolidated financial statements for 1999. 3. To transact such other business as may properly come before the meeting or any adjournment. 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 26, 1999 as the record date for determination of Shareholders entitled to notice of, and to vote at, the meeting. By Order of the Board of Directors, /s/ STEPHEN J. BOATTI ----------------------------------- STEPHEN J. BOATTI Senior Vice President, Chief Legal Officer and Secretary Dated: March 9, 1999 --------------- PROXY STATEMENT --------------- PROXY VOTING QUESTIONS AND ANSWERS Why have I been sent this Proxy Nielsen Media Research, Inc. Statement? ("NMR") is sending you this Proxy Statement and NMR's Annual Report to Shareholders in connection with soliciting proxies for the Annual Meeting of Shareholders to be held on April 13, 1999. The Proxy Statement, proxy cards and Annual Report are being mailed on or about March 9, 1999. NMR's principal offices are at 299 Park Avenue, New York, New York 10171, and its telephone number is (212) 708-7500. What is a proxy? A proxy allows you as a Shareholder to vote on significant matters even if you cannot attend the Annual Meeting. By signing and sending in a proxy, you authorize a representative to vote as you instruct. What am I voting on? Re-election of three directors (William G. Jacobi, John A. Dimling and M. Bernard Puckett) and election of a new director (Ronald Townsend), and ratification of PricewaterhouseCoopers LLP as NMR's independent accountants. How do I vote? You must fill out, sign and mail your proxy card in the envelope provided. In addition, if your shares are held in a brokerage account, your broker may allow you to vote by telephone. Please follow the instructions sent by your broker. However, sending in a signed proxy will not prevent you from attending the meeting and voting in person. You have the right to revoke a proxy at any time before it is exercised by signing and returning a proxy bearing a later date, by giving written notice of revocation to the Secretary of NMR, 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 meeting. When does discretionary voting All properly signed proxies that apply? are not revoked will be voted at the meeting in accordance with your instructions. A proxy that you sign and return without instructions marked in the 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, all proxies will be voted in accordance with the judgment of the persons voting those proxies. Different rules apply to any NMR shares you hold in the Nielsen Media Research, Inc. Savings Plan or the IMS Health Incorporated Savings Plan (the "Savings Plans"). If you have Savings Plan contributions invested in NMR Common Stock, the proxy will serve as a voting instruction for the trustee of the respective Savings Plan. If a proxy covering shares in a Savings Plan has not been received prior to April 3, 1999 or if you sign and return it without instructions marked in the boxes, the trustee will vote those Savings Plan shares in the same proportion as the respective Savings Plan shares for which it has received instructions, except as otherwise required by law. Who is entitled to vote? Only holders of record of NMR Common Stock, par value $.01 per share, at the close of business on February 26, 1999 are eligible to vote at the meeting. As of the close of business on February 26, 1999, NMR had outstanding 56,748,953 shares of Common Stock. Each share of Common Stock is entitled to one vote per share. What constitutes a quorum? NMR's by-laws provide that a majority of the shares entitled to vote, present in person or represented by proxy, constitutes a quorum. There must be a quorum before voting can take place. Shares that abstain from voting are counted for purposes of establishing a quorum, as are shares that a broker holds in "street name" and votes on some matters but not others ("broker non-votes"). How many votes are required to Directors are elected by a pass each proposal? plurality of the voting power present in person or represented by proxy at the meeting and entitled to vote. If you are present at the meeting but do not vote for a particular nominee, or if you have given a proxy and properly withhold authority to vote for a nominee, or if there are broker non-votes, the shares withheld or not voted will have no effect on the outcome of the vote. The ratification of the appointment of independent accountants is determined by the affirmative vote of the majority of the voting power present in person or represented by proxy at the meeting and entitled to vote on the matter. If you abstain from voting or direct your proxy to abstain from voting on this matter, your shares are considered present at the meeting for the matter but, since they are not votes in favor of the matter, they will have the same effect as votes against the matter. Broker non-votes are not considered present and they are, therefore, not counted in respect of this matter. Is my vote confidential? Yes. Only the inspector of election, CT Corporation System, and certain employees of NMR will have access to your proxy card. All comments will remain confidential, unless you allow your name to be disclosed. What are the proxy soliciting Employees of NMR may communicate expenses? with you and other Shareholders to solicit your proxies. NMR also has retained Georgeson & Company Inc. to assist in the solicitation of proxies for a fee estimated at $10,000, plus expenses. NMR will pay all expenses related to proxy solicitation. NMR and Georgeson & Company Inc. will request banks and brokers to solicit proxies from their customers where appropriate and will reimburse them for reasonable out-of-pocket expenses. 2 SECURITY OWNERSHIP OF MANAGEMENT AND OTHERS The following table shows the number of shares of NMR Common Stock, par value $.01 per share, beneficially owned by each director of NMR, each nominee for director, each executive officer named in the Summary Compensation Table below, all present directors and executive officers as a group and each person known to NMR to beneficially own more than 5% of the outstanding shares of Common Stock at December 31, 1998 (the "5% Owners"). Stock ownership information is based upon (i) information furnished by such directors and executive officers as of December 31, 1998, and (ii) a Schedule 13G filed by each 5% Owner with the Securities and Exchange Commission (the "SEC"). Please note that, in certain cases, shares required under rules of the SEC to be shown as beneficially owned are shares as to which the indicated person holds only rights to acquire within 60 days through exercise of stock options. Unless otherwise stated, the indicated persons have sole voting and investment power over the shares listed. No director or executive officer of NMR owned more than one percent of the Common Stock on December 31, 1998. The mailing address for each of the NMR directors and executive officers listed herein is 299 Park Avenue, New York, New York 10171. NAME OF BENEFICIAL OWNER POSITION NUMBER OF SHARES AND NATURE OF OWNERSHIP ---------------- -------- ---------------------------------------- Stephen J. Boatti ....... Senior Vice President, 288 Direct Chief Legal Officer 220,808 Right to Acquire within 60 Days by and Secretary ------- Exercise of Options 221,096 Barry P. Cook ........... Senior Vice President 236 Direct and Chief Research 62,241 Right to Acquire within 60 Days by Officer ------- Exercise of Options 62,477 James R. Craigie ........ Director 2,147 Restricted Stock Grant John A. Dimling ......... President and Chief 683 Direct Executive Officer; 184,522 Right to Acquire within 60 Days by Director ------- Exercise of Options 185,205 Stuart J. Goldshein ..... Vice President and 291 Direct Controller 63,158 Right to Acquire within 60 Days by ------- Exercise of Options 63,449 William G. Jacobi ....... Chairman; Director 2,247 Direct 2,147 Restricted Stock Grant ------- 4,394 Peter A. Lund ........... Director 500 Direct 2,147 Restricted Stock Grant ------- 2,647 Michael D. Moore ........ Director 2,147 Restricted Stock Grant M. Bernard Puckett ...... Director 1,200 Direct 2,406 Restricted Stock Grant ------- 3,606 Ronald Townsend ......... Nominee 0 Robert E. Weissman ...... Director 58,865 Direct 2,147 Restricted Stock Grant ------- 61,012 3 NAME OF BENEFICIAL OWNER POSITION NUMBER OF SHARES AND NATURE OF OWNERSHIP ---------------- -------- ---------------------------------------- Thomas W. Young ......... Executive Vice President 34,243 Right to Acquire within 60 Days by and Chief Financial Exercise of Options Officer All directors and executive officers as a group 857,675(1) Morgan Stanley Dean Witter & Co. 1585 Broadway New York, NY 10036 4,559,909(2) First Manhattan Co. 437 Madison Avenue New York, NY 10022 4,814,138(3) FMR Corp. 82 Devonshire Street Boston, MA 02109 8,343,895(4) Arnhold and S. Bleichroeder, Inc. 1345 Avenue of the Americas New York, NY 10105 3,517,332(5) - -------------- (1) Includes all shares beneficially owned regardless of nature of ownership, and all rights to acquire shares within 60 days. Represents 1.43% of the outstanding Common Stock as of December 31, 1998. (2) Morgan Stanley Dean Witter & Co. ("Morgan") and its wholly owned subsidiary Morgan Stanley Dean Witter Investment Management Inc. ("MSDW") jointly filed a Schedule 13G with the SEC on February 8, 1999. This Schedule 13G states that Morgan and MSDW, registered investment advisers, beneficially owned at December 31, 1998, 4,559,909 shares, representing approximately 8.15% of the Common Stock outstanding at that date. Morgan and MSDW have shared dispositive power over all of the shares owned by them and shared voting power over 3,765,580 of such shares. (3) First Manhattan Co. filed a Schedule 13G with the SEC on February 11, 1999. This Schedule 13G states that First Manhattan Co., a registered broker-dealer and investment adviser, beneficially owned at December 31, 1998, 4,814,138 shares of Common Stock, representing approximately 8.6% of the Common Stock outstanding at that date. This amount includes 137,032 shares owned by family members of general partners of First Manhattan Co. as to which First Manhattan Co. disclaims dispositive power over 10,516 shares and disclaims beneficial ownership of 126,516 shares. First Manhattan Co. has sole voting power over 65,515 shares, shared voting power over 4,305,043 shares, sole dispositive power over 65,515 shares and shared dispositive power over 4,748,623 shares. (4) FMR Corp. ("FMR"), Edward C. Johnson 3d ("E.C. Johnson") and Abigail P. Johnson ("A.P. Johnson") jointly filed a Schedule 13G with the SEC on February 12, 1999. This Schedule 13G states that FMR, E.C. Johnson and A.P. Johnson beneficially owned at December 31, 1998, 8,343,895 shares of Common Stock, representing approximately 14.9% of the Common Stock outstanding at that date. Of these shares, 7,187,406 shares are beneficially owned by FMR's wholly owned subsidiary Fidelity Management and Research Company ("Fidelity"), a registered investment adviser. E.C. Johnson, FMR and the registered investment companies advised by Fidelity (the "Fidelity Funds") each has the sole dispositive power over 7,186,606 of these shares, and the Fidelity Funds have the sole voting power over these shares. FMR, Fidelity International Limited ("FIL") and Fidelity American Special Situations Trust, a unitrust advised by a subsidiary of FIL, each has the sole voting and dispositive power over 1,400 of the 7,187,406 shares. Fidelity Management Trust Company, a wholly owned subsidiary of FMR and a bank, beneficially owns 1,108,924 shares, as to which E.C. Johnson and FMR each has sole dispositive power, and as to 1,056,782 shares of which each has sole voting power. FIL beneficially owns an additional 47,565 shares, over which it has the sole voting and dispositive power. FIL, formerly a subsidiary of FMR, was voluntarily included in FMR's Schedule 13G filing. 4 (5) Arnhold and S. Bleichroeder, Inc. ("A&SB") filed a Schedule 13G with the SEC on February 16, 1999. This Schedule 13G states that A&SB, a registered investment adviser, beneficially owned at December 31, 1998, 3,517,332 shares of Common Stock, representing approximately 6.29% of the Common Stock outstanding at that date. A&SB has sole voting power over 3,515,832 shares, shared voting power over 1,500 shares, and sole dispositive power over all the shares owned by it. PROPOSAL NO. 1: ELECTION OF DIRECTORS The members of the Board of Directors of NMR are grouped 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 are elected and have qualified. The Board of Directors has nominated William G. Jacobi, John A. Dimling and M. Bernard Puckett for re-election as Class III Directors for a three-year term expiring at the 2002 Annual Meeting. Messrs. Jacobi, Dimling and Puckett have served as directors since July 1, 1998, the date NMR became an independent public company. Mr. Puckett was a director of NMR's predecessor company, Cognizant Corporation, since 1996. In addition, the Board of Directors has nominated Ronald Townsend for election as a Class II Director for a two-year term expiring at the 2001 Annual Meeting. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEES NAMED ABOVE AS DIRECTORS OF THE COMPANY. Unless you otherwise instruct, proxies will be voted for election of all the nominees, all of whom except Mr. Townsend are now members of the Board. If any nominee is unwilling or unable to serve as a director and the Board does not, in that event, choose to reduce the size of the Board and Class II or III, the persons voting the proxy will have discretion to vote for the election of another person in accordance with their judgment. The following tables provide, for each nominee for election, the nominee's name, position with NMR, principal occupations during the last five years, age and other directorships in public companies. NOMINEE FOR CLASS II DIRECTOR FOR A TERM EXPIRING AT THE 2001 ANNUAL MEETING: DIRECTOR PRINCIPAL OCCUPATIONS NAME POSITIONS WITH NMR SINCE DURING LAST FIVE YEARS AGE* OTHER DIRECTORSHIPS ---- ------------------ ------- ---------------------- --- ------------------- Ronald Townsend Nominee -- Consultant, 10/96 to 57 BankAmerica Corporation; present ALLTEL Corporation President, Gannett Television Group, Arlington, VA (broadcasting), 5/89 to 10/96 - ----------- * As of March 31, 1999. 5 Nominees for Class III Directors for term expiring at the 2002 Annual Meeting: Director Principal Occupations Name Positions with NMR Since During Last Five Years Age* Other Directorships ---- ------------------ ------- ---------------------- --- ------------------- William G. Jacobi Chairman; Director 1998 Chairman, Nielsen Media 55 R.H. Donnelley Research, Inc., 11/96 Corporation to present Chairman, IMS International, Westport, CT (health care information services), 2/95 to 12/97 Executive Vice President, Cognizant Corporation, Westport, CT (information services), 9/96 to 12/97 Executive Vice President, The Dun & Bradstreet Corporation, Wilton, CT (information services), 2/95 to 10/96 Senior Vice President, The Dun & Bradstreet Corporation, 7/93 to 2/95 John A. Dimling President and 1998 President and Chief 60 None Chief Executive Executive Officer, Officer; Nielsen Media Research, Director Inc., 7/98 to present President and Chief Operating Officer, Nielsen Media Research, Inc., 7/93 to 7/98 M. Bernard Puckett Director 1998 Private Investor, 1/96 to 54 P-Com, Inc.; R.R. present Donnelley & Sons Company; Oacis President and Chief Healthcare Holdings Executive Officer, Corp.; IMS Health Mobile Incorporated Telecommunication Technologies Corp., Jackson, MS (telecommunications), 5/95 to 1/96 President and Chief Operating Officer, Mobile Telecommunication Technologies Corp., 1/94 to 5/95 - -------------- * As of March 31, 1999. 6 The following tables provide, for each Class I and Class II Director continuing in office, the director's name, position with NMR, principal occupations during the last five years, age and other directorships in public companies. Class I Directors holding office for terms expiring at the 2000 Annual Meeting: Director Principal Occupations Name Positions with NMR Since During Last Five Years Age* Other Directorships ---- ------------------ ------- ---------------------- --- ------------------- James R. Craigie Director 1998 President and Chief Executive 45 None Officer, Spalding Sports Worldwide, Inc., Chicopee, MA (sporting goods), 12/98 to present Executive Vice President and President, Beverage and Desserts Division, Kraft Foods, Rye Brook, NY (food services), 10/97 to 12/98 Executive Vice President and General Manager, Beverage Division, Kraft Foods, 11/94 to 9/97 Executive Vice President and General Manager, Dinners and Enhancers Division, Kraft Foods, 2/94 to 10/94 Vice President and General Manager, Pollio Dairy Products, Mineola, NY (food services), 3/93 to 1/94 Peter A. Lund Director 1998 Private Investor, 6/97 to 58 None present President and Chief Executive Officer, CBS Television and Cable Group, New York, NY (broadcasting), 1/97 to 6/97 President and Chief Executive Officer, CBS Inc., New York, NY (broadcasting), 11/95 to 1/97 Executive Vice President, CBS Broadcast Group, and President, CBS Television Network, New York, NY (broadcasting), 10/90 to 11/95 - ------------ * As of March 31, 1999. 7 Class II Directors holding office for terms expiring at the 2001 Annual Meeting: Director Principal Occupations Name Positions with NMR Since During Last Five Years Age* Other Directorships ---- ------------------ -------- ----------------------- ---- ------------------- Michael D. Moore Director 1998 Media Consultant, 1/99 61 None to present Executive Vice President and Director of Media Development, The MacManus Group, Inc., New York, NY (communications holding company, with D'Arcy Masius Benton & Bowles, Inc. a major holding), 1/98 to 12/98 Executive Vice President and Worldwide Media Director, D'Arcy Masius Benton & Bowles, Inc., New York, NY (advertising agency), 1993 to 12/97 Robert E. Weissman Director 1998 Chairman and Chief 58 State Street Executive Officer, Corporation; Gartner IMS Health Group, Inc.; IMS Health Incorporated, Incorporated Westport, CT (health care information services), 6/98 to present Chairman and Chief Executive Officer, Cognizant Corporation, Westport, CT (information services), 9/96 to 6/98 Chairman and Chief Executive Officer, The Dun & Bradstreet Corporation, Wilton, CT (information services), 4/95 to 10/96 President and Chief Executive Officer, The Dun & Bradstreet Corporation, 1/94 to 3/95 - ----------------- * As of March 31, 1999. Committees of the Board and Meetings The Audit Committee of the Board of Directors reviews the scope of the internal audit activities of NMR's independent public accountants and the auditors' evaluation of internal controls and receives an annual summary of the results of such audits. It also reviews the scope of the audit of NMR's consolidated financial statements by the independent public accountants and their report on the audit. The Committee also recommends the appointment of NMR's independent public accountants to the full Board. The Committee consists of Messrs. Lund (Chairman), Craigie and Moore. The Audit Committee held one meeting during 1998. 8 The Compensation and Benefits Committee of the Board of Directors establishes and revises all compensation arrangements for certain executives of NMR consistent with the executive compensation philosophy adopted by the Board of Directors. The Committee also has authority to administer NMR's executive benefit plans and to establish and review the policies regarding executive and all other benefit programs. The Committee consists of Messrs. Puckett (Chairman), Craigie and Moore. The Compensation and Benefits Committee held two meetings during 1998. While the Board has no nominating committee, Shareholders' recommendations for nominees will be considered by the full Board. You may recommend nominees by submitting the names in writing to: Stephen J. Boatti, Senior Vice President, Chief Legal Officer and Secretary, Nielsen Media Research, Inc., 299 Park Avenue, New York, New York 10171. NMR's By-laws specify certain time limitations, notice requirements and other procedures applicable to the submission of nominations before an Annual or Special Meeting. Three meetings of the Board of Directors were held during 1998. No Director attended fewer than 75% of the total number of meetings of the Board of Directors and of the Committees of the Board on which the Director serves, except for Mr. Craigie, who attended 2 of 6 Board and Committee meetings. PROPOSAL NO. 2: APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS Upon recommendation of the Audit Committee, the Board of Directors has appointed PricewaterhouseCoopers LLP ("PwC") as independent public accountants to audit the consolidated financial statements of NMR for 1999. This appointment is subject to ratification by the Shareholders at the Annual Meeting. PwC acted as NMR's independent public accountants for 1998. In connection with its audit of the consolidated financial statements, PwC also reviewed certain filings with the SEC and performed certain internal audit and non-audit services. A representative of PwC is expected to be available to answer questions at the Annual Meeting and is free to make statements during the meeting. If the appointment of PwC is not approved by the Shareholders, or PwC ceases to act as NMR's independent accountants, or the Board of Directors removes PwC as NMR's independent accountants, the Board will appoint other independent accountants. Any engagement of new accountants for periods following the 2000 Annual Meeting will be subject to ratification by the Shareholders at that meeting. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF PwC. COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS Report of the Compensation and Benefits Committee on Executive Compensation This report provides an explanation of the philosophy underlying NMR's Executive Compensation Program and also describes how decisions were implemented regarding the compensation paid by NMR to John Dimling, President and Chief Executive Officer. The Compensation and Benefits Committee (the "Committee") of the Board of Directors reviews and approves compensation for senior executives of NMR, including the Chief Executive Officer and the other executives whose compensation is described in this Proxy Statement. The Committee is composed entirely of outside directors and has been advised by independent experts experienced in the design and implementation of executive compensation arrangements. Prior to July 1, 1998, NMR was a subsidiary of Cognizant Corporation and compensation decisions were based on Cognizant's executive compensation philosophy. This report describes the compensation philosophy implemented by NMR since it became an independent public company on July 1, 1998. Executive Compensation Philosophy The Committee and the Board of Directors of NMR believe that a key to building Shareholder value is to closely align the financial interests of NMR's executives and employees with those of Shareholders and potential investors. 9 Moreover, we believe that top caliber executives and employees who can develop and deliver high-quality, innovative and accurate products and services, and deliver customer satisfaction, will ultimately drive increased Shareholder value. NMR has developed compensation and benefits programs for executives and employees within a total compensation framework. Total compensation opportunities are weighted heavily towards short-term cash incentives and long-term stock option incentives. These incentives place a major portion of senior executives' compensation at risk, to assure a sharp and continuing focus on building Shareholder value. Annual cash incentives are variable and are tied to corporate financial performance. Stock options focus on creating and sustaining Shareholder value long-term and serve as the primary source of future compensation growth opportunity for executives. Executives will be expected to hold stock, and NMR's stock option program is intended to help accomplish that objective. Total compensation opportunities for NMR executives are established based on practices of companies that are likely to compete for the services of our executives. This enables NMR to attract and retain high-quality executives, who are critical to the future success of the business, in an increasingly competitive market. The Committee's judgments about the appropriate levels of compensation opportunities and payments to executives are considered in the context of competitive practices among a comparison group of companies. The companies used for compensation comparison purposes are primarily media companies and, for the CEO, a comparison is also done against a broad cross section of non-manufacturing companies. The non-manufacturing comparison group includes most of NMR's peer group competitors shown in the Total Shareholder Return graph on page 12, as well as other companies that are engaged in the media industry and information research business. Using this comparison data, the Committee generally positions executive pay opportunities halfway between the median and 75th percentile of the media industry, which is NMR's primary source for talent and retention. The CEO is benchmarked against the media industry and non-manufacturing company medians, since the CEO labor market is broader than the media industry. Components of the Compensation Program The compensation package for executives comprises base salary, annual cash incentives, and long-term incentives in the form of stock options. Base Salary. The base salaries of executives compensate for ongoing performance of assigned responsibilities. In determining whether to adjust the base salary of an executive, including the Chief Executive Officer, the Committee takes into account salaries paid for comparable positions at the other compensation comparator companies, changes in the executive's responsibilities, the individual performance of the executive, and NMR's compensation philosophy. Annual Incentives. The Annual Incentive Plan rewards the executives listed in the Summary Compensation Table for the financial results achieved for the year. Incentive payouts are dependent on the level of achievement of financial targets set at the beginning of the plan year. Financial targets for 1998 were based on NMR's revenue, operating earnings and cash flow. Prospectively, qualitative goals such as customers' satisfaction or new product delivery may be included as measures of executive performance. No award is earned with respect to a performance measure unless a performance "floor" for that measure is exceeded; the award opportunity with respect to a measure is earned if the performance target is achieved; achievement between the floor and the target results in a lower award with respect to that performance measure. An amount larger than the award opportunity for each performance measure can be earned, up to a specified limit, for exceeding the target for that measure. In 1998, NMR's overall performance exceeded financial targets; accordingly, incentive awards paid in early 1999 exceeded target award opportunities. Stock Options. Stock options serve to reward executives in the same manner as our Shareholders benefit, because options only have value to executives when NMR's stock price increases. In 1998, executives were granted options with a life of ten years that vest proportionately over three years, and have an exercise price equal to the fair market value of the Common Stock on the grant date. The number of options granted in 1998 was determined based primarily on the competitive practices of our compensation comparator companies but also reflected individual performance and expected future contributions. 10 CEO Compensation. Mr. Dimling participates in the executive compensation program described in this Report of the Compensation and Benefits Committee. In 1998, Mr. Dimling's base salary was increased to reflect his new position as the Chief Executive Officer of a publicly-traded company and the higher competitive salary levels for positions comparable to his new position paid in our compensation comparator companies. Mr. Dimling's financial targets for earning his annual incentive, as determined by the Committee, were based on the same three measures as for the other senior executives with overall corporate responsibility--NMR's consolidated revenue, operating income and cash flow for 1998. The Committee gave different weights to each measure in determining the bonus to be earned, based on how it viewed their relative importance in rewarding improvement in annual results. Because Nielsen Media Research's results for 1998 were above the annual incentive targets established at the beginning of the year, the incentive payment to Mr. Dimling shown in the Summary Compensation Table was higher than his target award opportunity. Mr. Dimling and the other senior corporate executives also received a payment in addition to the incentive opportunity based on NMR's achievement of an earnings-per-share target established at the beginning of 1998. Mr. Dimling received a grant of 75,000 stock options in 1998. The Committee believes Mr. Dimling's current compensation is fully consistent with our philosophy on executive compensation, and appropriate in view of our performance as indicated in the Total Shareholder Return graph on page 12. The graph compares NMR's cumulative total return, since NMR shares began trading independently in June of 1998, to a performance peer group of five information and service providers and to the Standard & Poor's Midcap 400 Index. Tax Deductibility. Under Section 162(m) of the Internal Revenue Code (the "Code"), NMR may not deduct certain forms of compensation in excess of $1,000,000 paid to its Chief Executive Officer and the other four most highly compensated senior executives. For 1998 and 1999, none of the compensation paid to these executives is expected to exceed the Code limitations. The Committee intends to maximize the deductibility of executive compensation, but also to compensate executive officers in a manner commensurate with performance and the competitive environment for executive and creative talent. As a result, some portion of compensation paid to an executive officer whose compensation is subject to the deduction limits described above may not be deductible by the Company in the future. Compensation and Benefits Committee M. Bernard Puckett, Chairman James R. Craigie Michael D. Moore 11 COMPARISON OF TOTAL SHAREHOLDER RETURN OF NMR, S&P MIDCAP 400 INDEX AND NMR PEER GROUP [GRAPHICAL REPRESENTATION OF CHART] 6/23/98 6/30/98 7/31/98 8/31/98 9/30/98 10/31/98 11/30/98 12/31/98 ------- ------- ------- ------- ------- -------- -------- -------- Nielsen Media Research, Inc. ... 100 101.36 90.40 65.75 74.88 103.65 109.58 131.49 S&P Midcap 400 Index ........... 100 95.13 91.44 74.42 81.37 88.64 93.06 104.30 Peer Group ..................... 100 102.99 89.70 72.18 79.48 80.94 85.76 88.57 This graph compares the total shareholder return of NMR, the Standard & Poor's Midcap 400 Index and a group of NMR peer companies from June 23, 1998, the first day of when-issued trading in NMR Common Stock, until December 31, 1998. The calculation assumes $100 was invested on June 23, 1998 and that any dividends were reinvested. Since there is no widely recognized standard industry group comprising NMR and peer companies, a group of companies representing a range of proprietary data providers was used. The performance peer group consists of ACNielsen Corporation, The Dun & Bradstreet Corporation, Gartner Group, Inc., Information Resources, Inc. and Primark Corporation. 12 Executive Compensation Tables In addition to the annual compensation of NMR's five most highly compensated executive officers, the following tables show six months of 1998 and full-year 1997 compensation for certain executives who resigned from Cognizant Corporation, the former name of NMR, upon Cognizant's spin-off of certain businesses on July 1, 1998 (the "Spin-Off"), in accordance with rules of the Securities and Exchange Commission. Summary Compensation Table Long-Term Compensation ----------------------------------- Annual Compensation Awards Payouts ---------------------------- -------------------- ---------- (a) (b) (c) (d) (e) (f) (g) (h) (i) Other Securities Annual Restricted Underlying Long-Term All Other Compen- Stock Options/ Incentive Compensation Name and Salary Bonus (1) sation (2) Award(s) (3) SARs (4) Payouts (5) Principal Position Year ($) ($) ($) ($) (#) ($) ($) - ---------------------- ------ -------- -------- ---------- ------------ ---------- ---------- ----------- John A. Dimling 1998 336,800 254,102 0 0 75,000 0 10,537 President and Chief 1997 303,000 181,662 0 0 0 0 19,682 Executive Officer Thomas W. Young (6) 1998 256,667 165,462 0 0 30,000 0 3,750 Executive Vice 1997 0 0 0 0 0 0 0 President and Chief Financial Officer Barry P. Cook 1998 231,750 125,633 0 0 30,000 0 7,163 Senior Vice President 1997 212,167 109,165 0 0 0 0 11,454 and Chief Research Officer Stuart J. Goldshein 1998 216,800 96,323 0 0 15,000 0 7,116 Vice President and 1997 211,500 105,746 0 0 0 0 10,508 Controller Stephen J. Boatti 1998 199,700 101,641 0 0 20,000 0 6,314 Senior Vice President, 1997 188,100 98,226 0 0 0 0 9,585 Chief Legal Officer and Secretary The following officers resigned from NMR's predecessor, Cognizant, in connection with the Spin-Off on July 1, 1998. The 1998 amounts shown are for compensation through June 30, 1998. Robert E. Weissman 1998 387,500 561,715 0 0 0 0 28,534 Former Chairman and 1997 750,000 1,007,100 1,006 0 0 0 72,568 Chief Executive Officer Victoria R. Fash 1998 300,000 250,446 75,700 0 0 0 13,513 Former Executive Vice 1997 375,000 349,128 0 268,938 0 0 19,655 President and Chief Financial Officer Alan J. Klutch 1998 162,500 177,888 0 0 0 0 11,538 Former Senior Vice 1997 325,000 303,473 0 0 0 0 22,637 President--Finance - -------------- (1) The bonus (annual incentive) awards were earned in the year indicated and paid in the following year. (2) The value of certain personal benefits is not included since it does not exceed $50,000 for any named executive officer. The amount shown for Ms. Fash represents an allowance for incidentals associated with an international assignment. 13 (3) The amount shown for Ms. Fash represents the dollar value of restricted stock on the date of the grant. This grant was a special one-time award made by Cognizant and was forfeited upon Ms. Fash's resignation. (4) All the options in this table are without tandem stock appreciation rights. (5) Amounts shown represent aggregate annual company contributions for the account of each named executive officer under the Nielsen Media Research, Inc. Savings Plan (the "Savings Plan") and Savings Benefit Equalization Plan (the "SBEP"), plans that are open to employees of NMR and certain subsidiaries. The Savings Plan is a tax-qualified defined contribution plan and the SBEP is a non-qualified plan that provides a benefit to participants in the Savings Plan equal to the amount of company contributions that would have been made to the participant's Savings Plan accounts but for certain Federal tax laws. (6) Mr. Young joined NMR in February 1998. Option/SAR Grants in Last Fiscal Year (a) (b) (c) (d) (e) (f) Number of Securities % of Total Underlying Options/SARs Grant Date Options/SARs Granted to Exercise or Present Granted (1) Employees in Base Price Expiration Value (2) Name (#) Fiscal Year ($/Share) Date ($) - -------------------- ------------ -------------- ----------- ---------- ----------- John A. Dimling 75,000 6.29 16.4375 12/15/08 291,650 Thomas W. Young 30,000 2.52 16.4375 12/15/08 27,099 Barry P. Cook 30,000 2.52 16.4375 12/15/08 27,099 Stuart J. Goldshein 15,000 1.26 16.4375 12/15/08 13,549 Stephen J. Boatti 20,000 1.68 16.4375 12/15/08 18,066 The following officers resigned from NMR's predecessor, Cognizant, in connection with the Spin-Off on July 1, 1998. Amounts shown are for grants through June 30, 1998. Robert E. Weissman 0 N/A N/A N/A N/A Victoria R. Fash 0 N/A N/A N/A N/A Alan J. Klutch 0 N/A N/A N/A N/A - ---------- (1) Amount shown represents the number of non-qualified stock options, without tandem stock appreciation rights ("SARs"), granted in 1998. The options may not be exercised for at least one year after grant and may then be exercised in installments of one-third of the grant amount each year until they are 100% vested. Payment must be made in full upon exercise in cash or Common Stock. The option holder may elect to have shares of Common Stock issuable upon exercise withheld by NMR to pay withholding taxes due. (2) Grant date present value is based on the Black-Scholes option valuation model, which makes the following material assumptions for the December 16, 1998 grant: an expected stock-price volatility factor of 30%, a risk-free rate of return of 4.63%, an annual dividend yield of 0%, an assumed time of exercise of three years from grant date, and a reduction of approximately 9.7% to reflect the probability of forfeiture due to termination prior to vesting. These assumptions may or may not be fulfilled. The amounts shown cannot be considered predictions of future value. In addition, the option will gain value only to the extent the stock price exceeds the option exercise price during the life of the option. 14 AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES The following table provides information as to option exercises by each of the named executive officers during 1998 and the value of unexercised in-the-money stock options at year-end. (A) (B) (C) (D) (E) NUMBER OF SECURITIES SHARES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED ` ACQUIRED VALUE OPTIONS/SARS AT FISCAL IN-THE-MONEY OPTIONS/SARS ON EXERCISE REALIZED YEAR-END (1) (#) AT FISCAL YEAR-END (2)($) --------------------------- ---------------------------- NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE - ------------- ----------- -------- ----------- ------------- ----------- ------------- John A. Dimling 244,672 $922,644 184,522 706,643 $1,819,823 $6,353,236 Thomas W. Young 0 0 0 235,458 0 $1,307,606 Barry P. Cook 124,564 $676,076 62,241 252,576 $ 616,590 $2,243,823 Stuart J. Goldshein 107,607 $446,137 63,158 223,447 $ 626,851 $2,079,734 Stephen J. Boatti 9,060 $ 48,287 220,808 212,008 $2,335,463 $1,925,165 The following officers resigned from NMR's predecessor, Cognizant, in connection with the Spin-Off on July 1, 1998. Amounts shown are for exercises through June 30, 1998. Robert E. Weissman (3) 796,602 $5,640,886 0 6,666 0 $ 26,871 Victoria R. Fash 0 0 0 0 0 0 Alan J. Klutch 0 0 0 0 0 0 - ------------- (1) No SARs were outstanding at December 31, 1998. (2) The values shown equal the difference between the exercise price of unexercised in-the-money options and the fair market value of the underlying NMR Common Stock at December 31, 1998. Options are in-the-money if the fair market value of the NMR Common Stock exceeds the exercise price of the option. (3) The amount of unexercised options shown for Mr. Weissman represents options granted to him after the Spin-Off as a director of NMR. RETIREMENT BENEFITS Retirement benefits for the named executive officers are determined under the NMR Retirement Plan and the NMR Retirement Excess Plan. Under these plans, NMR contributes 6% of the participant's compensation monthly to the participant's cash balance in the plan. The cash balance earns monthly investment credits based on the yield on 30-year Treasury bonds from time to time. Compensation, for the purpose of determining retirement benefits, consists of base salary, annual bonuses, commissions and overtime pay. Severance pay, income derived from equity-based awards, contingent payments and other forms of special remuneration are excluded. Bonuses included in the Summary Compensation Table above are normally not paid until the year following the year in which they are accrued and expensed; therefore, compensation for purposes of determining retirement benefits varies from the Summary Compensation Table amounts in that bonuses expensed in the previous year but paid in the current year are part of retirement compensation in the current year and current year's bonuses accrued and included in the Summary Compensation Table are not. For 1998, compensation for purposes of determining retirement benefits for the named executive officers differed by less than 10% from the amounts shown in the Summary Compensation Table. These plans also include a minimum monthly benefit for certain employees who had attained age 50 and had earned five years of service as of October 31, 1996, including Messrs. Dimling and Cook. The minimum benefit is equal to the excess of (i) 1.7% of final average compensation multiplied by years of credited service not in excess of 25, plus 1.0% of average final compensation multiplied by years of credited service in excess of 25, over (ii) 1.7% of the primary Social Security insurance benefits multiplied by years of credited service not in excess of 25, plus 0.5% of the primary Social Security insurance benefits multiplied by years of credited service in excess of 25. Final average compensation is defined as the highest average annual compensation during five consecutive twelve-month periods in the last 10 consecutive twelve-month periods of the member's credited service. Members vest in their accrued retirement benefit upon completion of five years of service. 15 The estimated annual benefits upon retirement at age 65 for Messrs. Dimling, Cook, Goldshein and Boatti are $96,185, $34,361, $41,151 and $29,122, respectively. These amounts include benefits payable under predecessor qualified plans of The Dun & Bradstreet Corporation that would be deducted from the amount payable under these plans. The estimated annual retirement benefits payable at age 65 are based on 1998 recognized earnings, assuming no future increases in such earnings. For Messrs. Boatti and Goldshein, the assumed investment credit on cash balances is 5.5417% per annum, and the assumed annuity conversion rate at age 65 is 5.15%. The actual investment credit and annuity conversion rate may vary from these rates. In 1998, Mr. Young was not eligible to participate in the NMR Retirement Plan or the NMR Retirement Excess Plan. CHANGE-IN-CONTROL AGREEMENTS NMR has entered into agreements with the executive officers named in the Summary Compensation Table above (as well as with other officers and key employees of NMR and its subsidiaries), providing for certain benefits upon termination of employment in the event of a Change in Control (as defined below) of NMR. If, following a Change in Control, the employment of a named executive officer is terminated without cause or he or she terminates employment for "good reason" (generally, an adverse change in employment status, compensation or benefits, a required relocation or the lapse of 12 months following the Change in Control), the officer will receive a lump sum payment equal to three times (for Mr. Dimling and Mr. Young), two times (for Mr. Cook and Mr. Boatti) and one and one-half times (for Mr. Goldshein) base salary and annual target bonus, reimbursement for outplacement expenses, life and health insurance coverage for 36 months (for Mr. Dimling and Mr. Young), 24 months (for Mr. Cook and Mr. Boatti) and 18 months (for Mr. Goldshein) after termination, retiree medical coverage, the accelerated vesting of stock options and the accelerated payment of prorated annual and other bonuses. A Change in Control will generally have occurred under the following circumstances: (i) an acquisition by any person of 20% of the combined voting power of NMR's securities, (ii) during any period of twenty-four months a majority of the Board 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) NMR's merger or consolidation with another entity (other than one in which NMR's shares outstanding prior to the merger represent 66-2/3% of the voting power of the surviving company and no shareholder holds 20% or more of such remaining voting power) or (iv) the liquidation or sale of substantially all of NMR's assets. SEVERANCE ARRANGEMENTS The NMR Career Transition Plan and Executive Transition Plan provide severance benefits to employees of NMR (including the executive officers named in the Summary Compensation Table above) and certain of its subsidiaries. These plans generally provide for the payment of severance benefits if the employment of a covered employee 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, executives with a base salary between $150,000 and $200,000 will be paid three-quarters of a week of salary continuation for each four weeks of service with NMR, up to a maximum of 20 weeks, except that certain executives who had service with The Dun & Bradstreet Corporation (a predecessor of NMR) receive benefits of 39 weeks. Executives with a base salary of more than $200,000 will be paid one week of salary continuation for each two weeks of service, up to a maximum of 52 weeks. The Chief Executive Officer will be paid 104 weeks of salary and annual bonus continuation. Lower amounts are paid in the event of termination for unsatisfactory performance. In addition, unless termination occurs for unsatisfactory performance, the executive will receive a portion of his or her cash bonus opportunity for the year of termination, prorated based on the number of months worked during that year. In addition, the plans provide to eligible terminated executives continued medical, dental and life insurance coverage throughout the salary continuation period, and in certain instances, outplacement services and financial counseling. The Chief Executive Officer may increase or decrease benefits for executives other than the Chief Executive Officer, provided such decision is reported to the Compensation and Benefits Committee of the Board, and that Committee may increase or decrease benefits for the Chief Executive Officer. COMPENSATION OF DIRECTORS CASH COMPENSATION. Beginning July 1, 1998, each director not employed by NMR (other than Mr. Jacobi) was paid a retainer at an annual rate of $25,000 in quarterly installments and each non-employee director who was 16 Chairman of a committee of the Board of Directors was paid an additional retainer at an annual rate of $3,000 in quarterly installments. In addition, each such non-employee director was paid a fee of $1,000 for each Board or committee meeting attended in 1998. Directors who were employed by NMR received no retainers or fees. Each non-employee director may elect to have all or a specified part of the retainer and fees deferred until he or she ceases to be a director. Deferred amounts may be credited to the account of directors as deferred cash, which bears interest at prescribed rates, or as deferred share units in an amount equal to the amount of deferred compensation divided by the fair market value of a share of Common Stock on the date the compensation would otherwise have been paid. Deferred share units are credited with dividend equivalents, if any. Fair market value is the average of the high and low trading prices of the Common Stock on the date of determination. Deferred amounts and accrued interest and dividend equivalents are paid in the form of cash or stock, as appropriate, on the first business day of the calendar year following the date of the director's termination of service on NMR's Board. Upon the occurrence of a Change in Control (as defined above under "Change-in-Control Agreements") of NMR, the Compensation and Benefits Committee may take such action as it deems necessary or desirable with respect to deferred amounts. Mr. Jacobi received no retainer or fees for 1998. Beginning March 1, 1999, he will be paid a retainer for his services as Chairman at an annual rate of $300,000, payable monthly. NON-EMPLOYEE DIRECTORS' STOCK INCENTIVE PLAN. This plan provides for the granting of stock options and restricted stock to non-employee directors of NMR on such terms as are determined by the Compensation and Benefits Committee of the Board of Directors. On July 8, 1998 the Committee granted each non-employee director 2,147 shares of restricted Common Stock with a fair market value on that date of $13.97, and a stock option to purchase 6,666 shares of Common Stock at an exercise price of $13.97 per share. The restricted shares vest five years after the date of grant. Until the shares vest, the director is not able to sell or dispose of them but is entitled to vote them and receive dividends. These restrictions lapse if the director dies or becomes disabled or, at the Committee's discretion, if the director's service terminates in other circumstances. The stock option expires 10 years after the grant date and vests in six equal installments beginning one year after the grant date. The plan provides for the accelerated vesting of options upon termination of service due to death, disability or retirement. Upon the occurrence of a Change in Control (as defined above under "Change-in-Control Agreements") of NMR, the Compensation and Benefits Committee may take such action as it deems necessary or desirable with respect to directors' awards, including acceleration of an award, payment of cash in exchange for cancellation of an award, and/or issuing substitute awards that substantially preserve the value, rights and benefits of previously granted awards. SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE NMR knows of no person who did not file on a timely basis reports required by Section 16(a) of the Securities Exchange Act of 1934 during 1998. OTHER MATTERS NMR knows of no matters, other than those referred to herein, that will be presented at the Annual Meeting. If, however, any other appropriate business should properly be presented at the meeting, the persons named in the enclosed form of proxy will vote the proxies in accordance with their best judgment. SHAREHOLDER PROPOSALS FOR 2000 ANNUAL MEETING Shareholder proposals intended to be presented at the NMR Annual Meeting of Shareholders in 2000 must be received by NMR no later than November 12, 1999. March 9, 1999 17 - -------------------------------------------------------------------------------- NIELSEN MEDIA RESEARCH, INC. PROXY/VOTING INSTRUCTIONS FOR THE SPECIAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 13, 1999 AT 9:30 A.M. AT 1209 ORANGE STREET, WILMINGTON, DELAWARE JOHN A. DIMLING, THOMAS W. YOUNG and STEPHEN J. BOATTI, or any of them, with full power of substitution are hereby authorized and/or instructed to represent and/or vote all the shares of Common Stock of Nielsen Media Research, Inc. that the undersigned is entitled to vote at the Annual Meeting of Shareholders on April 13, 1999, and at any adjournment thereof: THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION OF ALL NOMINEES IDENTIFIED IN ITEM (1) AND FOR ITEM (2). (1) Election of Class III Directors for a three-year term expiring at the 2002 Annual Meeting of Shareholders--Nominees: William G. Jacobi, John A. Dimling and M. Bernard Puckett; and Election of a Class II Director for a two-year term expiring at the 2001 Annual Meeting--Nominee: Ronald Townsend. [ ] 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 appointment of PricewaterhouseCoopers LLP as independent public accountants to audit the Company's consolidated financial statements for 1999. Mark only one. FOR [ ] AGAINST [ ] ABSTAIN [ ] (Please Turn Over and Sign) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NIELSEN MEDIA RESEARCH, INC. THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS. A PROXY THAT 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). Notice to Participants in Certain Savings Plans. - ------------------------------------------------ The trustee of the Nielsen Media Research, Inc. Savings Plan and the IMS Health Incorporated Savings Plan has agreed that this proxy will also serve as voting instructions from participants in the plans who have plan contributions for their accounts invested in Common Stock. Proxies covering shares in these plans must be received prior to April 3, 1999. If a proxy covering shares in the plans has not been received prior to April 3, 1999 or if it is signed and returned without specification marked in the instruction boxes, the trustee of these plans will vote the respective plan shares in the same proportion as the respective shares in such plan for which it has received instructions. Please indicate whether you expect to attend the Annual Meeting: Date__________________ , 1999 _____ Yes ____ No _____________________________ _____________________________ Signature(s) Please sign exactly as your 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. - --------------------------------------------------------------------------------