SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
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ACNIELSEN CORPORATION
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ACNIELSEN LOGO 177 Broad Street, Stamford, CT 06901
March 12, 1999
Dear Shareholder:
You are invited to attend the 1999 Annual Meeting of Shareholders of
ACNielsen Corporation on Wednesday, April 14, 1999 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, 1998 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 voting your proxy.
Proxies can be voted by telephone, Internet or mail. Voting your proxy will not
limit your right to vote at the Annual Meeting if you 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 OF SHAREHOLDERS
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TIME .................... 9:00 A.M. on Wednesday, April 14, 1999
PLACE ................... 1209 Orange Street, Wilmington, Delaware
ITEMS OF BUSINESS ....... 1. To elect four Class III 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 1999.
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.
RECORD DATE ............. You can vote if you were a shareholder of record
at the close of business on February 19, 1999.
ANNUAL REPORT ........... Our 1998 Annual Report, which is not part of the
proxy soliciting material, is enclosed.
PROXY VOTING ............ It is important that your shares be represented
and voted at the Annual Meeting. Please vote in
one of these ways:
1. USE THE TELEPHONE NUMBER shown on the proxy
card (this call is toll free in the U.S.);
2. VISIT THE WEB SITE named on the proxy card to
vote via the Internet; OR
3. MARK, SIGN, DATE AND PROMPTLY RETURN the
enclosed proxy card in the return envelope.
Any proxy may be revoked at any time prior to its
exercise at the Annual Meeting.
/s/ ELLENORE O'HANRAHAN
--------------------------------
March 12, 1999 Ellenore O'Hanrahan
Secretary
PROXY STATEMENT
These proxy materials are delivered in connection with the solicitation by
the Board of Directors of ACNielsen Corporation ("ACNielsen" or the "Company")
of proxies to be voted at our 1999 Annual Meeting of Shareholders to be held on
April 14, 1999 and at any adjournment or postponement of that meeting. These
proxy materials are being mailed starting approximately March 12, 1999.
The principal executive offices of ACNielsen are located at 177 Broad
Street, Stamford, Connecticut 06901 and its telephone number is (203) 961-3000.
SHAREHOLDERS ENTITLED TO VOTE
Holders of record of ACNielsen common shares at the close of business on
February 19, 1999 are entitled to receive this notice and to vote their shares
at the Annual Meeting. As of that date, there were 57,586,860 common shares
outstanding and the Company had no other voting securities outstanding. Each
such share is entitled to one vote on each matter properly brought before the
Meeting.
VOTING -- IN GENERAL
Your vote is important and the Board of Directors urges you to exercise
your right to vote. Shareholders of record may vote their proxies by telephone,
Internet or mail. A telephone number and Web site address are included on your
proxy card. If you choose to vote by mail, a return envelope is provided.
If your shares are held in the name of a bank, broker or other holder of
record, you should receive instructions from the holder of record that you must
follow in order for your shares to be voted. Telephone and Internet voting also
will be offered to shareholders owning stock through certain banks and brokers.
VOTING BY TELEPHONE
You can vote by telephone by calling the telephone number on your proxy
card (at no cost to callers in the United States). Telephone voting is available
24 hours a day until 8:00 A.M. on April 14, 1999. Easy-to-use voice prompts
allow you to vote your shares and confirm that your instructions have been
properly recorded. Our telephone voting procedures are designed to authenticate
shareholders by using individual control numbers. Your individual control number
is printed on your proxy card. If you vote by telephone, you do not need to
return your proxy card. If you are located outside the U.S., see your proxy card
for additional instructions.
VOTING BY INTERNET
You can also choose to vote via the Internet. The Web site for Internet
voting is on your proxy card. Internet voting is available 24 hours a day until
5:00 P.M. on April 13, 1999. As with telephone voting, easy-to-use screen
prompts allow you to vote your shares and confirm that your instructions have
been properly recorded. For authentication purposes, Internet voting also
requires the use of the individual control number printed on your proxy card. If
you vote via the Internet, you do not need to return your proxy card.
VOTING BY MAIL
If you choose to vote by mail, simply mark your proxy card, date and sign
it and return it in the return envelope included with this mailing.
REVOKING PROXIES
You may revoke a proxy at any time before it is exercised by voting the
proxy again (either by telephone, Internet or mail) as of a later date, by
giving written notice of revocation to the Secretary of ACNielsen, or by
attending the meeting and voting in person.
VOTING OF PROXIES
Proxies must be received by the beginning of the Annual Meeting. All shares
for which proxies have been properly given and that are not revoked will be
voted at the Annual Meeting in accordance with your instructions. If
1
you sign your proxy card but do not indicate how your shares should be voted as
to any matter listed on the proxy card, your shares will be voted as to that
matter in accordance with the recommendations of the Board of Directors. If any
other matters are properly presented at the Annual Meeting for consideration,
the persons named in the proxy will have the discretion to vote on those matters
for you.
SHARES HELD IN THE ESOP OR SAVINGS PLAN
The above paragraph does not apply to shares held in the ACNielsen
Corporation Employee Stock Ownership Plan (the "ESOP") or the ACNielsen
Corporation Savings Plan (the "Savings Plan"). If you participate in those
plans, the trustee of the plans has agreed that the proxy will serve as your
voting instruction to the trustee with respect to the shares you hold through
such plans. The same proxy will also serve as voting instructions for shares
that you hold in your own name. Proxies covering shares in the plans must be
received prior to April 7, 1999. If we do not receive your proxy by that date or
if you sign the card but do not give voting instructions, the trustee of the
plans will vote your plan shares in the same proportion as the shares in such
plan for which it has received instructions, except as otherwise required by
law.
VOTING AT THE ANNUAL MEETING
The method by which you vote now will in no way limit your right to vote at
the Annual Meeting if you later decide to attend in person. If your shares are
held in the name of a bank, broker or other holder of record, you must obtain a
proxy, executed in your favor, from the holder of record to be able to vote at
the Meeting.
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, will 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 will 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" will not be counted for purposes of the election of
directors.
PROXY SOLICITATION
Employees of ACNielsen may communicate with Shareholders personally or by
telephone, facsimile or mail to solicit their proxies for the 1999 Annual
Meeting. ACNielsen has also retained the firm of Innisfree M&A Incorporated to
assist in the solicitation of proxies for a fee estimated at $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.
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.
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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, 1998
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, 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 13F
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, 1998 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 ...................... 9,572(2) **
Robert J. Chrenc ..................... 237,904* **
Michael P. Connors ................... 327,759* **
Earl H. Doppelt ...................... 409,620* **
Donald W. Griffin .................... 8,572 **
Thomas C. Hays ....................... 10,572 **
Karen L. Hendricks ................... 10,572 **
Robert M. Hendrickson ................ 9,572 **
Robert Holland, Jr. .................. 9,710(3) **
Robert J Lievense .................... 487,993* **
John R. Meyer ........................ 10,704(4) **
Brian B. Pemberton ................... 9,572(5) **
Robert N. Thurston ................... 16,572(6) **
Nicholas L. Trivisonno ............... 568,193* **
All Directors and Executive
Officers as a Group ................ 2,126,887* 3.6%
- ----------
* 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 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, 1998 or within 60 days thereafter: Messrs. Beeby,
Griffin, Hays, Hendrickson, Holland, Meyer, Pemberton and Thurston,
and Ms. Hendricks, 6,668 shares; Mr. Chrenc, 216,666 shares; Mr.
Connors, 296,986 shares; Mr. Doppelt, 387,195 shares; Mr. Lievense,
450,184 shares; and Mr. Trivisonno, 500,940 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: 715 shares for
Mr. Chrenc, 723 shares for each of Messrs. Connors and Doppelt, 759
shares for Mr. Lievense and 785 shares for Mr. Trivisonno.
3
As of December 31, 1998, the following directors also held stock units
under the Non-Employee Directors' Deferred Compensation Plan: Mr. Hays,
2,251 units; Mr. Holland, 3,778 units; Mr. Pemberton, 4,344 units; and Mr.
Thurston, 5,170 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 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 1,832 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.
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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., its
general partner, Harris Associates, Inc.
and Harris Associates Investment Trust
Two North LaSalle Street
Suite 500
Chicago, IL 60602 .............................. 6,899,529 (1) 12.06%
FMR Corp., Edward C. Johnson 3d
and Abigail P. Johnson,
82 Devonshire Street
Boston, MA 02109 ............................... 5,790,180 (2) 10.14%
Richard C. Blum & Associates, L.P.
909 Montgomery Street
Suite 400
San Francisco, CA 94115 ........................ 3,368,100 (3) 5.87%
Mellon Bank Corporation,
Boston Group Holdings, Inc. and
The Boston Company, Inc.
c/o Mellon Bank Corporation
One Mellon Bank Center
Pittsburgh, PA 15258 ........................... 2,883,244 (4) 5.04%
- ----------
(1) Harris Associates L.P. ("Harris L.P.") and its general partner, Harris
Associates, Inc. ("General Partner"), have jointly filed, and Harris
Associates Investment Trust ("Trust") has separately filed, a Schedule 13G
with the SEC reporting that Harris L.P. and General Partner had, as of
December 31, 1998, shared voting power over 6,899,529 shares of the
Company's Common Stock (including 4,764,000 shares beneficially owned by
the Trust), sole dispositive power over 2,135,529 shares and shared
dispositive power over 4,764,000 shares (including 4,764,000 shares
beneficially owned by the Trust).
(2) FMR Corp., Edward C. Johnson 3rd and Abigail P. Johnson have jointly filed
a Schedule 13G with the SEC reporting that they had, as of December 31,
1998, sole dispositive power over 5,790,180 shares of the Company's Common
Stock and that FMR Corp. also had sole voting power over 215,883 shares.
(3) Richard C. Blum & Associates, L.P. has filed a Schedule 13F with the SEC
reporting that, as of December 31, 1998, it had sole voting power and sole
dispositive power with respect to all of the shares set forth opposite its
name in the table.
(4) 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, 1998,
Mellon had (i) sole voting power over 2,372,691 shares of the Company's
Common Stock (including 1,803,076 shares beneficially owned by BC and its
parent BGH), (ii) shared voting power over 3,272 shares of the Company's
Common Stock (including 0 shares beneficially owned by BC and BGH), (iii)
sole dispositive power over 2,759,287 shares of the Company's Common Stock
(including 2,194,639 shares beneficially owned by BC and BGH) and (iv)
shared dispositive power over 34,408 shares of the Company's Common Stock
(including 30,716 shares beneficially owned by BC and BGH).
5
ELECTION OF DIRECTORS
The members of the Board of Directors of ACNielsen are classified into
three classes. The members of one class are 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 Ms. Karen L. Hendricks and Messrs.
Michael P. Connors, Robert Holland, Jr. and Robert N. Thurston for election as
Class III Directors at the 1999 Annual Meeting for a three-year term expiring at
the 2002 Annual Meeting of Shareholders. All of the nominees, other than Mr.
Holland, were elected directors in 1996 prior to, and in anticipation of, the
Spin-Off. Mr. Holland was elected a director in December 1996. The nominees
comprise all current Class III 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 III 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 III DIRECTORS FOR TERMS EXPIRING AT THE 2002 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, 43
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 50 Baldwin Piano & Organ
Chief Executive Officer, Company;
Baldwin Piano & Organ Columbia Energy Group.
Company (manufacturer of
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 58 Frontier Corporation;
Executive Officer, Lexmark International
WorkPlace Integrators Group, Inc.; The MONY
(office furniture dealer), Group Inc.;
6/97 to present; President Olin Corporation;
and Chief Executive Tricon Global
Officer, Ben & Jerry's Restaurants, Inc.
Homemade, Inc. (ice 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 66 Ag-Bag International
to present; former Ltd.; McDonald's
Executive Vice President, Corporation.
The Quaker 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 62 Olin Corporation;
Chief Executive Officer, Rayonier Inc.
Olin Corporation
(manufacturer of chemicals,
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.
Robert M. Hendrickson Director 1996 President, Juno Capital 69
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. Pemberton Director 1996 President and Chief 54 ROHN Industries, Inc.
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 51 Rayonier Inc.
Executive Officer Executive Officer,
and Director ACNielsen, 5/96 to 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; director,
4/95 to 7/95.
7
CLASS II DIRECTORS HOLDING OFFICE FOR TERMS EXPIRING AT THE 2001 ANNUAL MEETING
Positions with Director Principal Occupation Other
Name ACNielsen Since During Last Five Years Age Directorships
---- --------- ----- ---------------------- --- -------------
Robert H. Beeby Director 1996 Retired CEO, Frito-Lay, 67 Church & Dwight
Inc. (snack food Company; Columbia
manufacturer), 1991 to Energy Group.
present.
Thomas C. Hays Director 1996 Chairman and Chief 63 Fortune Brands, Inc.;
Executive Officer, Fortune Gallaher Group Plc.
Brands, 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 53
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.
John R. Meyer Director 1996 Professor Emeritus, Harvard 71 The MONY Group Inc.;
University, 1/97 to Union Pacific
present; Professor, Harvard Corporation; Union
University, 7/73 to 12/96. Pacific Railroad
Company.
8
MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors held eight meetings during 1998. In addition, nine
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 four meetings during 1998.
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 1998.
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
1998.
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 1999. 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 has acted as the Company's independent
public accountants since the Spin-Off.
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 2000 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 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 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, 1998 to December
31, 1998.
The Committee's oversight of the Company's executive compensation program
was 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
During 1998, the executive compensation program for the named officers was
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 options). 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 Committee considered these to be relevant competitive frames of
reference for the period commencing November 1, 1996 and ending December 31,
1998 as the pay levels reflected compensation levels for the labor market within
which ACNielsen competed 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 competed 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 1998 including the (i)
implementation of the corporate direction; (ii) continued enhancement of the
Company's reputation within the investment community; and (iii) launch of
several global initiatives intended to expand and improve existing products and
services and ensure consistency and excellence of the ACNielsen brand throughout
all operating regions.
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 were made to 1998 base salary or annual incentive targets during
1998 for the named officers.
LONG-TERM INCENTIVE COMPENSATION
The Company provided the named officers and other executives with
incentives linked to longer-term corporate performance through the turnaround
incentive described below and through equity-based incentives. The
10
combination of these two key elements was intended to enable the named officers
to benefit accordingly when meaningful Shareholder wealth was 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 heightened the focus
for the named officers on the need to dramatically improve the Company's
financial results. 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.
The turnaround incentive provided awards to the named officers based on the
Company's cumulative revenue growth, operating income and return on investment
targets over a two-year period. Other factors considered by the Committee
included the (i) substantial increase in the Company's market capitalization
over the two-year period; and (ii) successful completion and integration of a
number of acquisitions in furtherance of the Company's objective to pursue
profitable growth opportunities by expanding geographically and by offering a
wider array of products and services.
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 1998.
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 1998 base salary or annual incentive target during 1998 and (ii) no
additional stock option grants were made to Mr. Trivisonno in 1998.
The Committee awarded Mr. Trivisonno an annual incentive of $900,000 for
1998 based on its assessment of the Company's financial performance as having
substantially met its revenue and exceeded its operating income, net
11
income and employee satisfaction performance targets. Mr. Trivisonno was awarded
a turnaround incentive of $1,050,000 based on the Company's substantially
meeting its cumulative revenue growth target and exceeding its operating income
and return on investment targets over the relevant two-year period. As indicated
above, a number of other factors were considered by the Committee in granting
both the annual and turnaround incentives and Mr. Trivisonno made significant
contributions towards the Company's achievements with respect to each of the
factors described.
$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 at the 1997 annual meeting, 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
continue to 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 P. 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 21 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, 1998.
COMPARISON OF CUMULATIVE TOTAL RETURN
ACNIELSEN, S&P 500 & BUSINESSWEEK OTHER SERVICES GROUP
[GRAPHICAL REPRESENTATION OF PERFORMANCE GRAPH]
YEAR ENDING 1996 1997 1998
------------------- ------- ------- -------
ACNielsen .................. $ 97.57 $156.00 $180.80
S&P 500 .................... $104.99 $140.02 $180.03
BW Group ................... $ 97.80 $123.00 $ 97.65
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 28, 1998. However, the peer group return
figures shown in the graph exclude ACNielsen and two companies that began
trading publicly during 1998. The graph includes the following companies: ABM
Industries Inc., Administaff, Inc. (included in 1998 return only; began trading
publicly during 1997), Borg-Warner Security Corporation, CDI Corporation,
Cendant Corporation, Cintas Corporation, Interim Services Inc., Kelly Services
Inc., Manpower Inc., Modis Professional Services, Inc., Norrell Corporation,
Novacare Employee Services, Inc. (included in 1998 return only; began trading
publicly during 1997), Novacare, Inc., Olsten Corporation, Republic Industries,
Inc., Robert Half International Inc., Service Corporation International,
ServiceMaster Company, Staff Leasing, Inc. (included in 1998 return only; began
trading publicly during 1997) 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.
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) SARS (2) PAYOUTS (3) SATION (4)
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#) ($) ($)
- --------------------------- ---- ------ ----- ------------ ---------- --------- ----------- ---------
Nicholas L. Trivisonno 1998 ART 550,000 900,000 86,842 0 0 1,050,000 5,600 ART
Chairman and Chief =====================================================================================================
Executive Officer 1997 ART 550,000 800,000 54,768 0 0 0 5,600 ART
=====================================================================================================
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
=====================================================================================================
Robert J Lievense 1998 ART 475,000 600,000 289,210 0 0 770,000 5,600 ART
President and Chief =====================================================================================================
Operating Officer 1997 ART 475,000 565,000 163,579 0 0 0 5,600 ART
=====================================================================================================
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
=====================================================================================================
Michael P. Connors 1998 ART 375,000 575,000 -- 0 0 700,000 5,600 ART
Vice Chairman =====================================================================================================
1997 ART 375,000 525,000 -- 0 0 0 5,600 ART
=====================================================================================================
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
=====================================================================================================
Earl H. Doppelt 1998 ART 375,000 400,000 -- 0 0 560,000 5,600 ART
Executive Vice President =====================================================================================================
and General Counsel 1997 ART 375,000 375,000 -- 0 0 0 5,600 ART
=====================================================================================================
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
=====================================================================================================
Robert J. Chrenc (5) 1998 ART 350,000 400,000 -- 0 0 560,000 5,600 ART
Executive Vice President =====================================================================================================
and Chief Financial 1997 ART 350,000 375,000 -- 0 0 0 5,600 ART
Officer =====================================================================================================
1996 ART 204,167 175,000 -- 0 325,000 0 2,042 ART
=====================================================================================================
- ----------
(1) Of the 1998 amount shown for Mr. Trivisonno, $76,561 represents
Company-paid transportation. Of the 1998 amount shown for Mr. Lievense, (i)
$244,274 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) $33,824
represents reimbursement for related taxes. 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 1996 amount shown for Mr. Lievense represents reimbursement for
taxes with respect to Company-directed spousal travel. The 1996 amount
shown for Mr. Connors
14
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.
(2) 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. Limited SARs
were granted in tandem with all listed options. No new options were granted
in 1997 or 1998.
(3) The amounts shown in 1996 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.
(4) The 1996 ACNielsen amount and 1997 and 1998 amounts represent Company
contributions for the account of the named officers under the ACNielsen
Employee Stock Ownership Plan. The 1996 Dun & Bradstreet amount represents
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.
(5) 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 1998.
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 1998, 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 (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------- ----------- -------- ----------- ------------- ----------- -------------
Nicholas L. Trivisonno .... 0 0 500,940 239,205 5,973,652 2,857,917
Robert J Lievense ......... 0 0 450,184 156,338 5,404,357 1,867,106
Michael P. Connors ........ 0 0 296,986 140,663 3,583,936 1,694,660
Earl H. Doppelt ........... 0 0 387,195 117,130 4,738,303 1,394,097
Robert J. Chrenc .......... 0 0 216,666 108,334 2,599,992 1,300,008
- ----------
(1) No SARs were outstanding at December 31, 1998. However, all outstanding
options were granted in tandem with limited SARs which may be exercised, in
whole or in part, only during the 30-day period beginning on the first day
following the acquisition of at least 20% of all outstanding Common Stock
pursuant to any tender or exchange offer not made by the Company.
(2) The values shown equal the difference between the exercise price of
unexercised in-the-money options and the average of the high and low
trading prices of ACNielsen Common Stock on December 31, 1998. Options are
in-the-money if the fair market value of the Common Stock exceeds the
exercise price of the option.
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
The following table shows the target award opportunities set during 1998
for the 1999-2000 performance period under the ACNielsen Corporation Senior
Executive Incentive Plan.
(a) (b) (c) (d) (e) (f)
PERFORMANCE
NUMBER OF OR OTHER ESTIMATED FUTURE PAYOUTS (2)
SHARES, UNITS PERIOD UNTIL ---------------------------------------
OR OTHER MATURATION THRESHOLD ($) TARGET ($) MAXIMUM ($)
NAME RIGHTS($)(1) OR PAYOUT (0%) (100%) (300%)
---- ------------- ------------ ------------- ---------- -----------
Nicholas L. Trivisonno ................. 750,000 Two Years 0 750,000 2,250,000
Robert J Lievense ...................... 550,000 Two Years 0 550,000 1,650,000
Michael P. Connors ..................... 550,000 Two Years 0 550,000 1,650,000
Earl H. Doppelt ........................ 400,000 Two Years 0 400,000 1,200,000
Robert J. Chrenc ....................... 400,000 Two Years 0 400,000 1,200,000
- ----------
(1) Future payouts are based on the Company's cumulative diluted earnings per
share, average annual return on investment and change in share price for
the 1999-2000 performance period. Eligibility for awards are conditioned
upon the execution of a noncompete agreement.
(2) Awards may range from 0-300% of the target value based on achievements
within a range of performance.
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
16
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.
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
BENEFIT ASSUMING CREDITED SERVICE OF:
AVERAGE FINAL --------------------------------------------------
COMPENSATION 5 YEARS 10 YEARS 15 YEARS 20 YEARS
------------- -------- -------- -------- --------
$ 725,000 ....................... $181,250 $362,500 $435,000 $435,000
825,000 ....................... 206,250 412,500 495,000 495,000
925,000 ....................... 231,250 462,500 555,000 555,000
1,025,000 ....................... 256,250 512,500 615,000 615,000
1,125,000 ....................... 281,250 562,500 675,000 675,000
1,225,000 ....................... 306,250 612,500 735,000 735,000
1,325,000 ....................... 331,250 662,500 795,000 795,000
1,425,000 ....................... 356,250 712,500 855,000 855,000
1,525,000 ....................... 381,250 762,500 915,000 915,000
1,625,000 ....................... 406,250 812,500 975,000 975,000
The number of years of credited service for Messrs. Trivisonno, Lievense,
Connors, Doppelt and Chrenc are, respectively, three, nine, three, four and two.
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 1998, pensionable earnings under the SERP do not include bonuses earned
in 1998 and paid in 1999 to the named executive officers, which were included in
the annual compensation column in the Summary Compensation Table. Instead,
pensionable earnings under the SERP for 1998 consist of 1998 base salary and
1997 bonuses paid in 1998.
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").
17
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, 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 and each Non-Employee Director who is Chairman of a
18
Board Committee is also paid a Chairman's fee at an annual rate of $3,000 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 for each meeting of Non-Employee
Directors only. 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.
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.
Under the director compensation program approved by the Board of Directors
in 1996, a Non-Employee 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. In 1998 and pursuant to such director compensation program, each
Non-Employee Director was granted 5,000 stock options under the Directors'
Incentive Plan with an exercise price equal to the fair market value of a share
of ACNielsen Common Stock on the date of grant (the "Grant Date"). One-fourth of
such options become exercisable each year beginning one year after the Grant
Date and the options expire on the tenth anniversary of the Grant Date.
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.
SHAREHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
Shareholder proposals for inclusion in the proxy materials related to the
Annual Meeting of Shareholders in 2000 must be received by ACNielsen no later
than November 15, 1999.
Under ACNielsen's by-laws, a shareholder proposal not intended to be
included in the proxy materials for the Annual Meeting of Shareholders in 2000
must be received by ACNielsen no later than February 4, 2000. Any such proposal
must also comply with the other provisions contained in ACNielsen's by-laws
relating to shareholder proposals.
March 12, 1999
19
[x] PLEASE MARK YOUR 9035
VOTES AS IN THIS -----
EXAMPLE.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS AND WILL BE VOTED AS
DIRECTED BELOW. 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.
================================================================================
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION OF ALL NOMINEES
IDENTIFIED IN ITEM (1) AND FOR ITEM (2).
- --------------------------------------------------------------------------------
FOR ALL WITHHOLD
NOMINEES AUTHORITY
1. Election of [ ] [ ] Election of four Class III Directors for
four Class III a three year term expiring at the 2002
Directors Annual Meeting of Shareholders. Nominees:
(1) Michael P. Connors, (2) Karen L.
Hendricks, (3) Robert Holland, Jr. and
(4) Robert N. Thurston.
For, except vote withheld from the following nominee(s):
2. Ratification of the selection of Arthur Andersen,LLP FOR AGAINST ABSTAIN
as independent public accountants to audit the [ ] [ ] [ ]
Company's consolidated financial statements for 1998.
Mark only one.
================================================================================
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.
________________________________________
________________________________________
SIGNATURE(S) DATE
- --------------------------------------------------------------------------------
o FOLD AND DETACH HERE IF YOU ARE RETURNING YOUR VOTED PROXY CARD BY MAIL o
[ACNIELSEN LOGO]
Dear Shareholder:
ACNielsen Corporation encourages you to take advantage of new and
convenient ways by which you can vote your shares. You can vote your shares
electronically through the Internet or the telephone. This eliminates the need
to return the proxy card.
To vote your shares electronically you must use the control number printed
in the box above, just below the perforation. The series of numbers that appear
in the box above must be used to access the system.
1. To vote over the Internet:
o Log on to the Internet and go to the Web site
http://www.vote-by-net.com. Internet voting will be available until
5:00 P.M. on April 13, 1999.
2. To vote over the telephone:
o On a touch-tone telephone, call 1-800-OK2-VOTE (1-800-652-8683) 24
hours a day, seven days a week. Telephone voting will be available
until 8:00 A.M. on April 14, 1999.
o Non-U.S. shareholders should call 1-201-324-0377.
Your electronic vote authorizes the named proxies in the same manner as if
you marked, signed, dated and returned the proxy card. If you choose to vote
your shares electronically, there is no need to mail back your proxy card.
YOUR VOTE IS IMPORTANT. THANK YOU FOR VOTING.
p
R ACNIELSEN CORPORATION
O
X PROXY/VOTING INSTRUCTIONS FOR THE ANNUAL MEETING TO BE HELD ON
Y APRIL 14, 1999 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
14, 1999, and at any adjournment thereof. Participants in the benefit plans
listed in the "Notice to Participants in Certain Benefit Plans" below are
referred to such notice for information on the voting of shares held in such
plans.
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 7, 1999. If a proxy covering shares in the ESOP or Savings Plan
has not been received prior to April 7, 1999 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.
===========
SEE REVERSE
SIDE
===========
------------------------------------------------------------------------------
o FOLD AND DETACH HERE IF YOU ARE RETURNING YOUR VOTED PROXY CARD BY MAIL o
[ACNIELSEN LOGO]
ANNUAL MEETING OF SHAREHOLDERS
APRIL 14, 1999
9:00 A.M.
1209 ORANGE STREET
WILMINGTON, DELAWARE
TO ORDER ACNIELSEN FINANCIAL PUBLICATIONS, PLEASE CALL 1-888-530-2580
OR VISIT OUR WEB SITE AT HTTP://WWW.ACNIELSEN.COM.
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