SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark one)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
--------------------- ----------------
Commission file number 001-12275
COGNIZANT CORPORATION
- - --------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 06-1450569
- - -------------------------------------- ----------------------------------
- - -------------------------------------- ----------------------------------
(State of Incorporation) (I.R.S. Employer Identification No.)
200 Nyala Farms, Westport, CT 06880
- - -------------------------------------- -----------------------------------
- - -------------------------------------- -----------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (203) 222-4200
--------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Shares Outstanding
Title of Class at March 31, 1997
Common Stock, 167,457,411
par value $.01 per share
COGNIZANT CORPORATION
INDEX TO FORM 10-Q
PART I. FINANCIAL INFORMATION PAGE(S)
Item 1. Financial Statements
Condensed Consolidated Statements of Income (Unaudited)
Three Months Ended March 31, 1997 and 1996 3
Condensed Consolidated Statements of Financial Position (Unaudited)
March 31, 1997 and December 31, 1996 4
Condensed Consolidated Statements of Cash Flows (Unaudited)
Three Months Ended March 31, 1997 and 1996 5
Notes to Condensed Consolidated Financial Statements (Unaudited) 6-8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9-11
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 13
-2-
PART I. FINANCIAL INFORMATION
Item I. FINANCIAL STATEMENTS
COGNIZANT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollar amounts in thousands, except per share data)
Three Months Ended
March 31,
-------------------------------------------
1997 1996
---------------- ----------------
Operating Revenue $ 434,701 $ 370,019
Operating Costs 193,116 160,544
Selling and Administrative Expenses 126,846 117,168
Depreciation and Amortization 37,492 33,329
---------------- ----------------
77,247 58,978
Interest Income 5,370 2,087
Interest Expense (450) (268)
Other Expense - Net (4,365) (1,373)
---------------- ----------------
Non-Operating Income - Net 555 446
Income Before Provision for Taxes 77,802 59,424
Provision for Income Taxes (24,897) (26,147)
--------------- ----------------
Net Income $ 52,905 $ 33,277
=============== ================
Earnings Per Share of Common Stock $.31 $.20
============= ================
Average Number of Shares Outstanding 169,770,000 169,669,000
============= ================
<FN>
See accompanying notes to the condensed consolidated financial statements
(unaudited)
</FN>
-3-
COGNIZANT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited)
(Dollar amounts in thousands)
March 31, December 31,
1997 1996
------------------- --------------------
Assets
Current Assets
Cash and Cash Equivalents $ 366,005 $ 428,520
Accounts Receivable-Net 457,699 453,791
Other Current Assets 119,119 112,151
------------- -----------------
Total Current Assets 942,823 994,462
------------- -----------------
Investments 121,400 117,706
------------- -----------------
Property, Plant and Equipment-Net 267,373 268,888
-------------- ----------------
Other Assets-Net
Computer Software 141,028 139,040
Goodwill 247,585 251,483
Other Assets 100,517 103,403
--------------- ----------------
Total Other Assets-Net 489,130 493,926
--------------- ----------------
Total Assets $ 1,820,726 $ 1,874,982
================ =================
Liabilities and Shareholders' Equity
Current Liabilities
Accounts and Notes Payable $ 63,890 $ 46,923
Accrued and Other Current Liabilities 237,111 276,682
Accrued Income Taxes 67,670 63,416
Deferred Revenues 339,371 292,970
-------------- --------------
Total Current Liabilities 708,042 679,991
Postretirement and Postemployment Benefits 52,958 50,519
Deferred Income Taxes 88,437 105,074
Other Liabilities and Minority Interests 180,002 166,785
--------------- --------------
Total Liabilities 1,029,439 1,002,369
--------------- -------------
Shareholders' Equity 791,287 872,613
--------------- -------------
Total Liabilities and Shareholders' Equity $ 1,820,726 $ 1,874,982
================ ===============
<FN>
See accompanying notes to the condensed consolidated financial statements
(unaudited).
</FN>
-4-
COGNIZANT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollar amounts in thousands)
Three Months Ended
March 31,
------------------------------
1997 1996
------------ --------------
Cash Flows from Operating Activities:
Net Income $ 52,905 $ 33,277
Reconciliation of Net Income to Net Cash
Provided by Operating Activities:
Depreciation and Amortization 37,492 33,329
Gains from Sale of Investments (5,436) -
Restructuring Payments - (8,663)
Postemployment Benefits Expense - 1,667
Postemployment Benefits Payments (3,157) (5,534)
Payments Related to 1995 Non-recurring Charge (2,180) -
Net (Increase) Decrease in Accounts Receivable (27,416) 41,404
Net Increase in Deferred Revenues 49,862 16,094
Gartner Minority Interest Expense 9,038 5,139
Deferred Income Taxes (12,975) 26,638
Net Increase (Decrease) in Accrued Income Taxes 3,095 (3,663)
Net (Increase) in Other Working Capital Items (12,297) (60,288)
- - -----------------------------------------------------------------------------------------
Net Cash Provided by Operating Activities 88,931 79,400
- - -----------------------------------------------------------------------------------------
Cash Flows from Investing Activities:
Proceeds from Maturities of Marketable Securities 6,355 10,454
Payments for Marketable Securities (9,734) (32,143)
Payments for Acquisitions of Businesses (4,762) -
Proceeds from Sale of Investment 7,004 -
Capital Expenditures (18,586) (14,909)
Additions to Computer Software (16,348) (10,415)
Additions to Deferred Charges (5,706) (11,033)
(Increase) Decrease in Investments (15,601) 1,367
Other 6,807 (2,544)
- - ----------------------------------------------------------------------------------------
Net Cash Used in Investing Activities (50,571) (59,223)
- - ----------------------------------------------------------------------------------------
Cash Flows from Financing Activities:
Payments for Purchase of Treasury Shares (95,069) -
Proceeds from Exercise of Stock Options 1,151 -
Payments of Dividends (5,117) -
Other Stock Transactions with Employees 5,728 8,853
Net Transfers to The Dun & Bradstreet Corporation - (25,591)
Other (324) (2,265)
- - ----------------------------------------------------------------------------------------
Net Cash Used in Financing Activities (93,631) (19,003)
- - ----------------------------------------------------------------------------------------
Effect of Exchange Rate Changes on Cash and Cash Equivalents (7,244) (607)
- - ----------------------------------------------------------------------------------------
(Decrease) Increase in Cash and Cash Equivalents (62,515) 567
Cash and Cash Equivalents, Beginning of Year 428,520 157,105
- - ----------------------------------------------------------------------------------------
Cash and Cash Equivalents, End of Period $ 366,005 $ 157,672
========================================================================================
<FN>
See accompanying notes to the condensed consolidated financial statements
(unaudited).
</FN>
-5-
COGNIZANT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Dollar amounts in thousands - (Unaudited)
Note 1- Interim Consolidated Financial Statements
These interim consolidated financial statements have been prepared in accordance
with the instructions to Form 10-Q and should be read in conjunction with the
consolidated financial statements and related notes of Cognizant Corporation
(the "Company") in the 1996 Annual Report on Form 10-K. In the opinion of
management, all adjustments considered necessary for a fair presentation of
financial position, results of operations and cash flows for the periods
presented have been included.
Note 2 - Investment Partnership
Two of the Company's subsidiaries participate in a limited partnership, one of
which serves as general partner. The partnership, which is a separate and
distinct legal entity, is in the business of licensing database assets and
computer software. For financial reporting purposes, the assets, liabilities,
results of operations and cash flows of the partnership are included in the
Company's consolidated financial statements.
Note 3 - Litigation
The Company and its subsidiaries are involved in legal proceedings and
litigation arising in the ordinary course of business. In the opinion of
management, the outcome of such current legal proceedings, claims and
litigation, if decided adversely, could have a material effect on quarterly or
annual operating results or cash flows when resolved in a future period.
However, in the opinion of management, these matters will not materially affect
the Company's consolidated financial position.
In addition, on July 29, 1996, Information Resources, Inc. ("IRI") filed a
complaint in the United States District Court for the Southern District of New
York, naming as defendants the Dun & Bradstreet Corporation ("Dun & Bradstreet),
A.C. Nielsen Company and I.M.S. International, Inc. ("IMS"), a company that is
owned by the Company (the "IRI Action").
The complaint alleges various violations of the United States antitrust laws,
including alleged violations of Sections 1 and 2 of the Sherman Act. The
complaint also alleges a claim of tortious interference with a contract and a
claim of tortious interference with a prospective business relationship. These
claims relate to the acquisition by defendants of Survey Research Group Limited
("SRG"). IRI alleges that SRG violated an alleged agreement with IRI when it
agreed to be acquired by the defendants and that the defendants induced SRG to
breach that agreement.
IRI's complaint alleges damages in excess of $350,000, which amount IRI has
asked to be trebled under the antitrust laws. IRI also seeks punitive damages in
an unspecified amount.
On October 15, 1996, defendants moved for an order dismissing all claims in the
complaint. On May 6, 1997 the United States District Court for the Southern
District of New York issued a decision dismissing IRI's claim of attempted
monopolization in the United States, with leave to replead within sixty days.
The Court denied defendants' motion with respect to the remaining claims in the
complaint.
In connection with the IRI Action, Dun & Bradstreet, ACNielsen Corporation
("ACNielsen") (the parent company of A.C. Nielsen Company) and the Company have
entered into an Indemnity and Joint Defense Agreement (the "Indemnity and Joint
Defense Agreement") pursuant to which they have agreed (i) to certain
arrangements allocating potential liabilities ("IRI Liabilities") that may
-6-
Note 3 - Litigation (continued)
arise out of or in connection with the IRI Action and (ii) to conduct a joint
defense of such action. In particular, the Indemnity and Joint Defense Agreement
provides that ACNielsen will assume exclusive liability for IRI Liabilities up
to a maximum amount to be calculated at the time such liabilities, if any,
become payable (the "ACN Maximum Amount"), and that the Company and Dun &
Bradstreet will share liability equally for any amounts in excess of the ACN
Maximum Amount.
The ACN Maximum Amount will be determined by an investment banking firm as the
maximum amount which ACNielsen is able to pay after giving effect to (i) any
plan submitted by such investment bank which is designed to maximize the
claims-paying ability of ACNielsen without impairing the investment banking
firm's ability to deliver a viability opinion (but which will not require any
action requiring stockholder approval), and (ii) payment of related fees and
expenses. For these purposes, financial viability means the ability of
ACNielsen, after giving effect to such plan, the payment of related fees and
expenses and the payment of the ACN Maximum Amount, to pay its debts as they
become due and to finance the current and anticipated operating and capital
requirements of its business, as reconstituted by such plan, for two years from
the date any such plan is expected to be implemented.
Management of the Company is unable to predict at this time the final outcome of
this matter or whether the resolution of the matter could materially affect the
Company's results of operations, cash flows or financial position.
Note 4 - Financial Instruments with Off-Balance-Sheet Risk
IMS uses foreign exchange forward contracts which provide for the sale of
foreign currencies to hedge a portion of committed revenues. While these hedging
instruments are subject to fluctuations in value, such fluctuations are offset
by changes in the value of the underlying exposures being hedged. The principal
currencies hedged are the Japanese Yen, German Mark, Swiss Franc, Italian Lira
and Spanish Peseta. At February 28, 1997, the notional amount hedged was
$114,000. These forward contracts are valued at market quotes and have
expiration dates through April 1997. Gains and losses on forward contracts and
committed foreign currency revenues are deferred until such revenues are
recognized or such commitments are met.
In addition, foreign exchange forward contracts are entered into in the normal
course of business to hedge against foreign exchange movements on certain assets
and liabilities of subsidiaries that are denominated in currencies other than
the subsidiary's functional currency. At February 28, 1997, IMS had
approximately $92,000 in foreign exchange forward contracts outstanding with
various expiration dates through March 1997.
-7-
Note 5 - Adoption of Statements of Financial Accounting Standards
In February 1997, the Financial Accounting Standards Board issued SFAS No. 128,
"Earnings per Share" ("SFAS No. 128"), which simplifies existing computational
guidelines, revises disclosure requirements and increases the comparability of
earnings per share data on an international basis. The Company is currently
evaluating the new statement; however, the impact of adoption of SFAS No. 128 on
the Company's financial statements is not expected to be significant. This
statement is effective for financial statements for periods ending after
December 15, 1997 and requires restatement of all prior period earnings per
share data presented.
-8-
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
(Dollar amounts in thousands, except per share data)
Reported First Quarter Results
Revenue for the first quarter of 1997 increased 17.5% to $434,701 from $370,019
for the first quarter of the prior year. The increase reflected continued high
growth at Gartner Group, through strengthening of its product line and new
product offerings, strong revenue performance at IMS, and double-digit revenue
growth at Nielsen Media Research. The increase was partially offset by declining
revenues at Pilot Software. The impact of a stronger U.S. dollar in the first
quarter decreased revenue by approximately 1%.
Operating income for the first quarter increased 31.0% to $77,247 from $58,978
for the comparable period a year ago. Operating income growth outpaced revenue
growth primarily due to Gartner Group's ability to take advantage of economies
of scale and IMS's ability to leverage its resources. The impact of a stronger
U.S. dollar in the first quarter decreased operating income by approximately 3%.
Non-operating income-net for the first quarter was $555 compared with
non-operating income-net of $446 for the prior year.
The Company's effective tax rate was 32.0% for the first quarter of 1997,
compared with an effective tax rate of 44.0% for the first quarter of 1996. The
Company has initiated global tax planning strategies that have lowered its
effective tax rate.
The Company's net income for the first quarter increased 59.0% to $52,905 from
$33,277 in the comparable period of the prior year. Earnings per share for the
first quarter increased 55.0% to $.31 from $.20 in the prior year. Net income in
1997 includes an after-tax gain of $3,696, or $.02 per share, from the sale of
WEFA Group, Inc., a Cognizant Enterprises venture capital fund investment.
On February 18, 1997 the Company announced that its Board of Directors had
authorized a systematic stock repurchase program to buy up to 8.5 million shares
of the Company's outstanding common stock over a two-year period. Through March
31, 1997, 2.8 million shares have been acquired at a total cost of $95,069.
Stock repurchases are held in Treasury and reissued upon exercise of employee
stock options.
Results by Business Segment
The Marketing Information Services segment consists of IMS, Nielsen Media
Research, Pilot Software, Erisco, Cognizant Technology Solutions and Cognizant
Enterprises. Marketing Information Services revenue for the first quarter 1997
increased 10.6% to $315,576 from $285,272 in the comparable period of the prior
year, and up 11.8% excluding the impact of a stronger U.S. dollar. IMS had first
quarter revenue in 1997 of $209,822, up 9.8% from $191,080 in the first quarter
1996. Excluding the impact of a stronger U.S. dollar, IMS revenue increased
11.4%. IMS revenue growth benefited from a strong performance by the Sales
Technologies unit, market expansion and new product introductions in the first
quarter.
-9-
Results by Business Segment (continued)
Nielsen Media Research revenue for the first quarter 1997 increased 12.3% to
$86,271 from $76,821 in the comparable period of the prior year. The growth at
Nielsen Media Research was driven by the addition of a new metered market and
the continued impact of new broadcast and cable network subscribers. Growth in
the first quarter 1997 was adversely impacted by declining revenues at Pilot
Software.
Marketing Information Services operating income for the first quarter 1997
increased 5.4% to $54,787 from $52,007 in the comparable period of the prior
year, and up 8.9% excluding the impact of a stronger U.S. dollar. IMS, the
largest business within this segment, had first quarter operating income growth
in 1997 of 10.8%. Excluding the impact of a stronger U.S. dollar, IMS operating
income increased 16.5%. Nielsen Media Research operating income for the first
quarter 1997 increased 11.6%. Growth in the first quarter 1997 was partially
offset by a loss at Pilot Software.
The Information Technology Services segment consists of the Company's
majority-owned subsidiary, Gartner Group. Information Technology Services
revenue for the first quarter 1997 increased 40.6% to $119,125 from $84,747 in
the comparable period of the prior year. The growth reflected Gartner's
continued strengthening of its product line and the introduction of new product
offerings. Information Technology Services operating income for the first
quarter 1997 increased 69.1% to $29,360 from $17,367 in the comparable period of
the prior year.
Condensed Consolidated Statement of Cash Flows
Three Months Ended March 31, 1997 and 1996
Net cash provided by operating activities totaled $88,931 for the three
months ended March 31, 1997 compared with $79,400 for the comparable period in
1996. The increase of $9,531 principally reflects an increase in business
operating results ($19,628), an increase in deferred revenues ($33,768) at
Gartner Group, lower other working capital items ($47,991) primarily at IMS and
the absence of restructuring payments in 1997 ($8,663). These sources were
partially offset by an increase in accounts receivable in 1997 compared to a
decrease in 1996 ($68,820), primarily reflecting increased sales at IMS and
Gartner Group, and a change in deferred income taxes ($39,613).
Net cash used in investing activities totaled $50,571 for 1997 compared with
$59,223 for the comparable period in 1996. The decrease in cash used for
investing activities of $8,652 is principally due to lower payments for
marketable securities ($22,409) and proceeds from investments ($7,004),
partially offset by an increase in investments ($16,968).
Net cash used in financing activities totaled $93,631 for the three months ended
in 1997 compared with $19,003 for the comparable period in 1996. The increase in
cash usage of $74,628 is primarily due to payments for the purchase of treasury
shares ($95,069) and dividends paid ($5,117) in 1997 compared with net transfers
to The Dun & Bradstreet Corporation ($25,591) in 1996.
-10-
Changes in Financial Position at March 31, 1997 Compared to December 31, 1996
Cash and Cash Equivalents decreased to $366,005 at March 31, 1997, from $428,520
at December 31, 1996, primarily reflecting the purchase of treasury shares.
Deferred Revenues increased to $339,371 at March 31, 1997, from $292,970 at
December 31, 1996, primarily reflecting an increase in subscription sales at
Gartner Group.
Shareholders' Equity decreased to $791,287 at March 31, 1997, from $872,613 at
December 31, 1996, primarily reflecting the purchase of treasury shares and
change in cumulative translation adjustment, partially offset by net income.
-11-
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
10. Material Contracts
.22 Cognizant Corporation Retirement Excess Plan, as adopted
effective January 1, 1997 (replaces Retirement Excess Plan
draft filed as Exhibit 10.21 to Registrant's Annual Report
on Form 10-K for Year Ended December 31, 1996, filed March
28, 1997, file number 001-12275)*
.23 Cognizant Corporation Savings Equalization Plan, as adopted
effective November 1, 1996*
21. List of Active Subsidiaries as of January 31, 1997.
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed during the quarter ended
March 31, 1997.
- - -----------------------------------------
*Management contract or compensatory plan or arrangement.
-12-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COGNIZANT CORPORATION
Date: May 13, 1997 By: /s/JAMES C. MALONE
====================================
James C. Malone
Senior Vice President - Finance & Controller
-13-
EXHIBIT 1022
COGNIZANT
RETIREMENT EXCESS PLAN
Effective as of January 1, 1997
============================================================================
============================================================================
COGNIZANT CORPORATION
RETIREMENT EXCESS PLAN
Effective as of January 1, 1997
Introduction
Effective as of January 1, 1997, the Cognizant Corporation Retirement Excess
Plan (the "Plan") is established by Cognizant Corporation (the "Company") to
provide participating employees with retirement benefits in excess of those
permitted to be paid under the Cognizant Retirement Plan (the "Qualified Plan")
due to the limitations imposed by Sections 401(a)(17) and 415 of the Internal
Revenue Code of 1986, as amended (the "Code"). For purposes of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), this Plan is
intended to be unfunded and maintained primarily for the purpose of providing
deferred compensation for a select group of management or highly compensated
employees.
==============================================================================
Section I -- Participation in the Plan
==============================================================================
All participants in the Qualified Plan shall participate in this Plan whenever
their benefits under the Qualified Plan as from time to time in effect would
have exceeded the limitations on benefits imposed by Sections 401(a)(17) and 415
of the Code if such benefits were determined as though no provision were
contained in the Qualified Plan incorporating such limitations.
===============================================================================
Section II -- Benefits
===============================================================================
The Corporation shall pay to each participant in the Qualified Plan (or his or
her beneficiaries designated to receive benefits from the Qualified Plan) a
benefit equal to the excess of (a) over (b), where:
(a) equals the amount that would be payable to the participant (or his or
her beneficiaries) under the Qualified Plan in the absence of any
provision reducing benefits due to the benefit limitations imposed by
Sections 401(a)(17) and 415 of the Code; and
(b) equals the sum of (i) the actual benefits payable to the participant
(or his or her beneficiaries) from the Qualified Plan and (ii) the
benefits payable to the participant (or his or her beneficiaries) from
the Pension Benefit Equalization Plan of The Dun & Bradstreet
Corporation (as in effect on October 31, 1996), as determined by the
Company in accordance with the methods and assumptions specified in
Appendix A of this Plan.
===============================================================================
Notwithstanding the foregoing, no benefits shall be payable hereunder unless the
participant has a nonforfeitable right to benefits under the Qualified Plan.
Benefits hereunder shall be payable at the same time and in the same form as the
participant's (or his or her beneficiaries') benefits under the Qualified Plan;
provided, however, if an Election (as defined in Section IV of this Plan) has
been made and becomes effective prior to the date when benefits under this Plan
would otherwise be payable to the participant, the form of payment of benefits
under this Plan shall be in the form so elected pursuant to such Election. If an
Election becomes effective prior to the date when benefits would be payable and
the participant dies prior to the date when benefits would be payable, his or
her beneficiaries designated to receive benefits from the Qualified Plan shall
receive benefits in the form so elected pursuant to such Election. If the
participant has not designated a beneficiary under the Qualified Plan, or if no
such beneficiary is living at the time of the participant's death, the amount,
if any, payable hereunder upon his or her death shall be distributed to the
person or persons who would otherwise be entitled to receive a distribution of
the participant's Qualified Plan benefits.
===============================================================================
Notwithstanding any Election, if the lump sum value, determined in the same
manner as provided under Section IV below, of the benefits payable to the
participant (or his or her beneficiaries) under this Plan is $10,000 or less at
the time such benefits are payable under this Plan, such benefits shall be
payable as a lump sum.
Any portion of the benefits payable under this Plan as a lump sum shall be paid
commencing at the same time as benefits payable in any other form hereunder
would otherwise be paid.
===============================================================================
Section III -- Unfunded Status
===============================================================================
Participants hereunder shall have the status of general unsecured creditors of
the Company and this Plan constitutes a mere promise by the Company to make
benefit payments at the time or times required hereunder. It is the intention of
the Company that this Plan be unfunded for tax purposes and for purposes of
Title I of ERISA, and any trust created by the Company and any assets held by
such trust to assist the Company in meeting its obligations under the Plan shall
meet the requirements necessary to retain such unfunded status.
============================================================================
Section IV -- Election of Form of Payment
============================================================================
(a) A participant under this Plan may elect to receive all, none, or a
specified portion, as provided below, of his benefits hereunder as
a lump sum and to receive any balance of such benefits in the
form of an annuity (an "Election"); provided that any such Election
shall be effective for purposes of this Plan only if (i) such
participant remains in the employment of the Company or an Affiliate,
as the case may be, for a period not less than the full 12 calendar
months immediately following the Election Date of such Election
except in the case of such participant's death or disability as
provided below), and (ii) such participant complies with the
administrative procedures set forth by the Committee with respect
to the making of an Election. "Affiliate" shall mean the Company and
any other employer which is a member of a "controlled group of
corporations," a group under "common control," or an "affiliated
service group,"all as determined under Code Sections 414(b), (c),
(m), (o).
(b) Any portion of the benefit payable to the participant (or his or her
beneficiaries) in the form of an annuity shall be paid at the same time
and in the same form as his or her benefits under the Qualified Plan.
Any portion of the benefit payable to the participant (or his or her
beneficiaries) in the form of a lump sum shall be paid in full at the
same time as the benefits commence under the Qualified Plan, and no
subsequent lump sum benefits will be paid.
(c) A participant may elect a payment form different than the payment form
previously elected by him or her by filing a revised election form;
provided that any such new Election shall be effective only if the
conditions in clauses (i) and (ii) of Section IV(a) above are satisfied
with respect to such new Election. Any prior Election made by a
participant that has satisfied such conditions remains effective for
purposes of this Plan until such participant has made a new Election
satisfying such conditions.
(d) A participant making an election under this Section IV may specify the
portion of his benefits under this Plan to be received in a lump sum as
follows: 0 percent, 25 percent, 50 percent, 75 percent or 100 percent.
==============================================================================
(e) In the event a participant who has made an Election dies or becomes
disabled within the meaning of the Company's long-term disability plan
while employed by the Company or an affiliate and such death or
disability occurs during the 12-calendar-month period immediately
following the Election Date of such Election, the condition that such
participant remain employed with the Company or an affiliate for such
12-month period shall be deemed to be satisfied and such Election shall
be effective with respect to benefits payable to such participant or
participant's beneficiaries under this Plan.
==============================================================================
(f) The amount of any portion of the benefits payable as a lump sum under
this Section IV will equal the present value of such portion of such
benefits, and the present value shall be determined (i) based on a
discount rate equal to the average of 85% of the 15-year non-callable
U.S. Treasury bond yields as of the close of business on the last
business day of each of the three months immediately preceding the date
the annuity value is determined and (ii) using the 1983 Group Annuity
Mortality Table.
(g) "Election Date" for purposes of this Plan means the date that a
properly completed election form with respect to an Election is
received by the Company.
=============================================================================
Section V -- Cessation of Benefits
=============================================================================
(a) Notwithstanding any other provision of the Plan (except as provided
below in this Section V), no benefits or no further benefits, as the
case may be, shall be paid to a participant (or his or her beneficiary)
if the participant has:
(i) become a stockholder (unless such stock is listed on a
national securities exchange or traded on a daily basis in the
over-the-counter market and the participant's ownership interest
is not in excess of 2% of the company of which the shares are being
purchased), employee, officer, director or consultant of or to a
Company, or a member or an employee of or a consultant to a
partnership or any other business or firm, which competes with
any of the businesses owned or operated by the Company, or if the
participant becomes associated with a company, partnership or
individual which company, partnership or individual acts as a
consultant to businesses in competition with the Company, such
participant provided services to such competing businesses,
whether or not, in any of the foregoing cases, such participant
accepts any form of compensation from such competing entity or
consultant; or
(ii) been discharged from employment with the Company or any
affiliate for "cause." "Cause" means (1) willful malfeasance or
willful misconduct by the participant in connection with his or
her employment, (2) continuing failure to perform such duties as
are requested by any employee to whom the participant reports or
the board of directors of the Company, or (3) the commission by
a participant of (I) any felony or (II) any misdemeanor
involving moral turpitude.
(b) In any case described in this Section V, the participant (or his or her
beneficiary) shall be given prior written notice that no benefits or no
further benefits, as the case may be, will be paid to such participant
(or his or her beneficiary). Such written notice shall specify the
particular act(s), or failures to act, on the basis of which the
decision to cease paying his or her benefits has been made.
=============================================================================
(c) Notwithstanding any other provision of the Plan, a participant who
receives in a lump sum any portion of his or her benefits hereunder
shall receive such lump sum portion of such benefits subject to the
condition that if such participant engages in any of the acts
described in this Section V, then such participant shall within 60
days after written notice by the Company repay to the Company the
amount described in the immediately succeeding sentence. The amount
described in this sentence shall equal the amount of the participant's
lump sum benefit under this Plan to which such participant would not
have been entitled, if such lump sum benefit had instead been payable
in the form of an annuity under this Plan and such annuity payments
were subject to the provisions of this Section V.
============================================================================
(d) Notwithstanding anything to the contrary contained herein, the
provisions of this Section V shall be of no further force or effect
from and after a "Change in Control" with respect to participants then
employed by the Company or its Affiliates. For this purpose, a "Change
in Control" shall mean:
(i) any "Person," as such term is used for purposes of Section 13(d) or
14(d)of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")(other than the Company, any trustee or other fiduciary
holding securities under an employee benefit plan of the Company,
or any company owned, directly or indirectly, by the stockholders
of the Company in substantially the same proportions as their
ownership of stock of the Company), becomes the "Beneficial Owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 20% or
more of the combined voting power of the Company's then-outstanding
securities;
===============================================================================
(ii) during any period of 24 months (not including any period prior to the
effective date of this Plan), individuals who at the beginning of such period
constitute the board of directors of the Company (the "Board"), and any new
director (other than (a) a director nominated by a Person who has entered into
an agreement with the Company to effect a transaction described in paragraphs
(i), (iii) or (iv) of this Section V(d), (b) a director nominated by any Person
(including the Company) who publicly announces an intention to take or to
consider taking actions (including, but not limited to, an actual or threatened
proxy contest) which if consummated would constitute a Change in Control or (c)
a director nominated by any Person who is the Beneficial Owner, directly or
indirectly, of securities of the Company representing 10% or more of the
combined voting power of the Company's securities) whose election by the Board
or nomination for election by the Company's stockholders was approved in advance
by a vote of at least two-thirds of the directors then still in office who
either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute at least a majority thereof;
===============================================================================
(iii) the stockholders of the Company approve any transaction or series of
transactions under which the Company is merged or consolidated with any other
company, other than a merger or consolidation (1) which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 66% of the combined
voting powers of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation and (2) after which
no Person holds 20% or more of the combined voting power of the then-outstanding
securities of the Company or such surviving entity; or
(iv) the stockholders of the Company approve a plan of complete liquidation
of the Company or an agreement for the sale or disposition by the Company of all
or substantially all of the Company's assets.
===========================================================================
Section VI -- Funding
===========================================================================
Benefits payable under this Plan shall not be funded and shall be made out of
the general funds of the Company; provided, however, that the Company reserves
the right to establish one or more trusts to provide alternate sources of
benefit payments under this Plan, provided, further, however, that upon the
occurrence of a "Potential Change in Control" of the Company, as defined below,
the appropriate officers of the Company are required to make contributions to
such a trust fund, established as an alternate source of benefits payable under
the Plan, as are necessary to fund the lump sum payments to Plan participants
required pursuant to Section V of this Plan in the event of a Change in Control
of the Company; provided, further, however, that if payments are made from such
trust fund, such payments will satisfy the Company's obligations under this Plan
to the extent made from such trust fund.
In determining the amount of the necessary contribution to the trust fund in the
event of a Potential Change in Control, the following actuarial assumptions
shall be used: (i) the interest rate used shall be the interest rate used by the
Pension Benefit Guaranty Corporation for determining the value of immediate
annuities as of January 1st of the year of the occurrence of the Potential
Change in Control, (ii) the 1983 Group Annuity Mortality Table shall be used;
and (iii) it shall be assumed that all participants will retire or terminate
employment with the Company as soon as practicable after the occurrence of the
Potential Change in Control.
For the purpose of this Plan, "Potential Change in Control" means:
(a) the Company enters into an agreement, the consumption of which would
result in the occurrence of a Change in Control of the Company;
(b) any person (including the Company) publicly announces its intention to
take or to consider taking actions which if consummated would
constitute a Change in Control of the Company;
===============================================================================
(c) any person, other than a trustee or other fiduciary holding securities
under an employee benefit plan of the Company (or a corporation owned,
directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the
Company), who is or becomes the beneficial owner, directly or
indirectly, of securities of the Company representing 9.5% or more of
the combined voting power of the Company's then outstanding securities,
increases his or her beneficial ownership of such securities by 5% or
more over the percentage so owned by such person; or
===============================================================================
(d) The Board of Directors of the Company adopts a resolution to the effect
that, for purposes of this Plan, a Potential Change in Control of the
Company has occurred.
=============================================================================
Section VII -- Miscellaneous
=============================================================================
(a) The Compensation and Benefits Committee of the board of directors of
the company shall be responsible for the administration of the Plan
and may delegate to any management committee, employee, director or
agent its responsibility to perform any act hereunder, including
without limitation those matters involving the exercise of discretion,
provided that such delegation shall be subject to revocation at any
time at the Committee's discretion. The Committee shall have the
authority to determine all questions arising in connection with the
Plan, to interpret the provisions of the Plan and construe all of its
terms, to adopt, amend, and rescind rules and regulations for the
administration of the Plan, and generally to conduct and administer
the Plan and to make all determinations in connection with the Plan
as may be necessary or advisable. All such actions of the Committee
shall be conclusive and binding upon all participants and
beneficiaries.
(b) The Committee may, in its sole discretion, terminate, suspend or amend
this Plan at any time or from time to time, in whole or in part;
provided, however, that in the event of termination, the rights of
participants to their accrued benefits hereunder shall become
nonforfeitable. No termination, suspension or amendment of the Plan may
adversely affect a participant's or beneficiary's benefit to which he
or she is entitled under the Plan as in effect on the date immediately
preceding the date of such termination, suspension or amendment.
(c) Nothing contained herein will confer upon any participant the right to
be retained in the service of the Company or any affiliate, nor will it
interfere with the right of the Company or any affiliate to discharge
or otherwise deal with participants with respect to matters of
employment.
(d) A participant's right to benefit payments under the Plan shall not be
subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment or garnishment by creditors
of such participant or his or her beneficiary.
============================================================================
(e) The Company may withhold from any benefit under the Plan an amount
sufficient to satisfy its tax withholding obligations.
=============================================================================
(f) The Plan shall be governed by and construed in accordance with the laws
of the State of New York applicable to contracts made and to be
performed in such state to the extent not preempted by federal law.
==============================================================================
APPENDIX A
==============================================================================
The benefits payable from the Pension Benefit Equalization Plan of The Dun &
Bradstreet Corporation (the "PBEP") to participants of this Plan shall be
determined as amounts payable monthly in the form of a single life annuity
commencing on the first day of the month coincident with or next following the
date the participant attains age 65 (the "Normal Retirement Date").
In the event a participant's benefit from this Plan is paid in a form other than
a single life annuity, however, the benefits payable from the PBEP shall be
adjusted to equal the actuarial equivalent value of the single life annuity
amount computed on the basis of mortality rates shown in Appendix B of this Plan
and 6.75% interest. In the event a participant's benefit from this Plan
commences prior to the participant's Normal Retirement Date, and the participant
terminated employment with the Company on or after he or she attained age 55,
the benefits payable from the PBEP commencing on the first day of the month
coincident with or next following the participant's Normal Retirement Date shall
be reduced by 3/12% for each month prior to the Normal Retirement Date (or age
60 if the participant has 35 years of service on his or her Early Retirement
Date) that benefits commence. In the event a participant's benefit from this
Plan commences prior to the participant's Normal Retirement Date, and the
participant terminated employment with the Company before he or she attained age
55, the benefits payable from the PBEP as determined in accordance with the
provisions set forth above shall be adjusted to equal the actuarial equivalent
value of such amount computed on the basis of mortality rates shown in Appendix
B of this Plan and 6.75% interest.
=============================================================================
APPENDIX B
=============================================================================
MORTALITY RATES
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
Age Participant Beneficiary Age Participant Beneficiary
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
25 .000581 .000470 68 .024559 .018359
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
26 .000610 .000497 69 .026871 .020335
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
27 .000644 .000526 70 .029559 .022766
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
28 .000681 .000557 71 .032952 .025919
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
29 .000720 .000591 72 .036762 .029529
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
30 .000763 .000629 73 .040907 .033496
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
31 .000811 .000669 74 .045427 .037808
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
32 .000866 .000714 75 .050298 .042428
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
33 .000923 .000762 76 .055809 .047551
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
34 .000988 .000814 77 .062080 .053217
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
35 .001059 .000873 78 .069068 .059419
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
36 .001136 .000936 79 .076746 .066152
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
37 .001223 .001077 80 .084955 .073330
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
38 .001318 .001084 81 .093582 .080901
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
39 .001423 .001168 82 .102603 .088868
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
40 .001539 .001261 83 .111984 .097236
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
41 .001682 .001369 84 .121754 .106074
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
42 .001869 .001497 85 .131910 .115436
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
43 .002097 .001647 86 .142522 .125403
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
44 .002364 .001815 87 .153693 .136075
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
45 .002670 .002005 88 .165518 .147557
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
46 .003011 .002216 89 .178093 .159954
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
47 .003388 .002449 90 .191529 .173397
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
48 .003797 .002705 91 .203702 .185997
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
49 .004241 .002983 92 .216646 .199614
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
50 .004717 .003289 93 .230478 .214387
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
51 .005216 .003594 94 .245331 .230463
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
52 .005746 .003926 95 .261353 .248008
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
53 .006310 .004288 96 .278704 .267202
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
54 .006907 .004683 97 .297562 .288242
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
55 .007538 .005112 98 .318124 .311344
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
56 .008206 .005588 99 .340598 .336741
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
57 .008916 .006123 100 .365204 .364688
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
58 .009679 .006729 101 .392179 .395460
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
59 .010510 .007415 102 .421772 .429358
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
60 .011426 .008190 103 .455805 .467222
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
61 .012449 .009063 104 .496440 .510917
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
62 .013608 .010042 105 .545840 .562310
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
63 .014928 .011131 106 .606167 .623265
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
64 .016449 .012338 107 .679585 .695646
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
65 .018207 .013671 108 .768255 .781319
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
66 .020245 .015129 109 .874340 .882150
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
67 .022388 .016662 110 .999999 .999999
- - --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
Table of Contents Page
Introduction............................................................1
Section I -- Participation in the Plan..................................2
Section II -- Benefits..................................................3
Section III -- Unfunded Status..........................................5
Section IV -- Election of Form of Payment...............................6
Section V -- Cessation of Benefits......................................8
Section VI -- Funding..................................................11
Section VII -- Miscellaneous...........................................13
EXHIBIT 1023
COGNIZANT CORPORATION SAVINGS
EQUALIZATION PLAN
I. Purpose of the Plan
The purpose of the Cognizant Corporation Savings Equalization
Plan (the "Plan") is to provide a means of equalizing the benefits of those
employees participating in the Cognizant Corporation Savings Plan (the "401(k)
Plan") whose matching contributions under the 401(k) Plan are or will be limited
by the application of sections 401(a)(17) or 415 of the Internal Revenue Code of
1986, as amended (the "Code"). The Plan is intended to be an "excess benefit
plan" as that term is defined in section 3(36) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") with respect to those participants
whose benefits under the 401(k) Plan have been limited by Section 415 of the
Code, and a plan which is unfunded and is maintained by an employer primarily
for the purposes of providing deferred compensation for a select group of
management or highly compensated employees for purposes of ERISA.
II. Administration of the Plan
The Compensation Committee of the Board of Directors (the
"Committee") of Cognizant Corporation (the "Corporation" or the "Company") shall
administer the Plan and may delegate to any committee, employee, director or
agent its responsibility to perform any act hereunder, including without
limitation those matters involving the exercise of discretion, provided that
such delegation shall be subject to revocation at any time at its discretion.
The Committee shall have full authority to determine all questions arising in
connection with the Plan, other than those determinations delegated to employees
or independent third parties by the Board of Directors, including interpreting
its provisions and construing all of its terms; may adopt procedural rules; and
may employ and rely on such legal counsel, such actuaries, such accountants and
such agents as it may deem advisable to assist in the administration of the
Plan. All of its rules, interpretations and decisions shall be applied in a
uniform manner to all participants similarly situated and decisions of the
Committee shall be conclusive and binding on all persons.
III. Participation in the Plan
All members of the 401(k) Plan shall be eligible to
participate in this Plan whenever their benefits under the 401(k) Plan as from
time to time in effect would exceed the limitations on benefits and
contributions imposed by sections 401(a)(17) or 415 of the Code. For purposes of
this Plan, benefits of a participant in this Plan shall be determined as though
no provision were contained in the 401(k) Plan incorporating limitations imposed
by Sections 401(a)(17) or 415 of the Code.
IV. Equalized Benefits
If member participating contributions or Company contributions
to the 401(k) Plan are suspended during any calendar year because any such
contributions would cause the participant's account under such plan to exceed
the benefit limitations related to such plan as described in Section III of this
Plan, the Corporation shall pay the participant, on or about March 1st of the
following year, an amount equal to:
(1) the Company matching contributions that otherwise would
have been credited to such participant's account under the
401(k) Plan for the balance of the year in which such
suspension occurs, as if no provision were set forth therein
incorporating limitations imposed by section 401(a)(17) or 415
of the Code, and the participant had continued his elective
deferrals to the 401(k) Plan at the rate in effect at the time
such contributions were suspended for the balance of the year
in which such suspension occurs, plus
(2) an interest factor equal to one-half of the annual return
which would have been received by the participant had such
payment been invested eighty percent (80%) in the Special
Fixed Income Fund (Fund C) of the 401(k) Plan and twenty
percent (20%) in the BZW Equity Index Fund (Fund A) of the
401(k) plan during the year which such suspension occurs, less
(3) any applicable withholding taxes.
V. Miscellaneous
This Plan may be terminated at any time by the Board of
Directors of the Corporation, in which event the rights of participants to their
accrued benefits shall become nonforfeitable. This Plan may also be amended at
any time by the Board of Directors of the Corporation, except that no such
amendment shall deprive any participant of benefits accrued at the time of such
amendment.
Benefits payable under this Plan shall not be funded and shall
be made out of the general funds of the Corporation; provided, however, that the
Corporation reserves the right to establish a trust fund as an alternate source
of benefits payable under the Plan and to the extent payments are made from such
trust, such payments will satisfy the Corporation's obligations under this Plan.
No right to payment or any other interest under this Plan may
be alienated, sold, transferred, pledged, assigned, or made subject to
attachment, execution, or levy of any kind.
Nothing in this Plan shall be construed as giving any employee
the right to be retained in the employ of the Corporation. The Corporation
expressly reserves the right to dismiss any employee at any time without regard
to the effect which such dismissal might have upon him under the Plan.
This Plan shall be construed, administered and enforced
according to the laws of the State of Connecticut unless preempted by federal
law.
VI. Effective Date
This Plan shall be effective as of the date on which shares of
common stock of the Company and ACNielsen Corporation that are owned by The Dun
& Bradstreet Corporation ("D&B") are distributed to the holders of record of
shares of D&B.
EXHIBIT 21B
Cognizant Corporation
Active Subsidiaries as of January 31, 1997
State of Other %Ownership
Jurisdiction 100%except
Name Incorporation as noted
- - ---------------------------------------------------------------------------------------------
COGNIZANT ENTERPRISES, INC. Delaware
COGNIZANT HOLDING CORPORATION Delaware
COGNIZANT INDIA HOLDING CORPORATION Delaware
CZT India Corporation Delaware
COGNIZANT JAPAN K.K. Japan
SSJ K.K. Japan
IMS Japan Ltd. KK Japan
Nippon Computer Services, Inc. Japan
COGNIZANT SOFTWARE SOLUTIONS CORPORATION Delaware
Cognizant Technology Solutions Corporation Delaware
Cognizant Technology Solutions Canada, Inc. Canada
Dun & Bradstreet-Satyam Software Private Limited India 76.0
CSS Investment Corporation Delaware
Dun & Bradstreet India Private Limited India 99.0
Dun & Bradstreet Marketing Research Private Limited India 70.0
COGNIZANT TRANSPORTATION SERVICES CORPORATION Delaware
CZT/ACN TRADEMARKS, L.L.C. Delaware 50.0
DBHC, INC. Delaware
LexHealth, Inc. Illinois
ERISCO, INC. New York
GARTNER GROUP, INC. Delaware 52.3
Gartner Group Pacific Pty Limited Australia
Gartner Group Scandinavia, A/S Denmark
Gartner Group UK Ltd. United Kingdom
Gartner Group France S.A.R.L. France
Gartner Group, GmbH Germany
Gartner Group Italia S.r.l. Italy
Nomos Ricerca Services S.r.l. Italy
Nomos Ricerca S.r.l Italy
Nomos Ricerca Telecomunicazioni S.r.l. Italy
Gartner Group Japan KK Japan
Gartner Group Nederland B.V. Netherlands
Gartner Group Europe Holding B.V. Netherlands
Gartner Group Norge, A/S Norway
Gartner Group Sverige AB Sweden
Gartner Group Asia, Inc. Delaware
Gartner Credit Corporation Delaware
Gartner Group Europe, Inc. Delaware
Gartner Group Sales, Inc. Delaware
GARTNER GROUP, INC. (Continued)
GG Hong Kong, Inc. Delaware
G.G. Investment Management, Inc. Delaware
G.G. West Corporation Delaware
Gartner Enterprises, Ltd Delaware
Decision Drivers, Inc. Delaware 81.3
New Science Associates, Ltd. United Kingdom
New Science Limited United Kingdom
Dataquest Incorporated California
Dataquest Asia Pacific Limited Hong Kong
DQ Research Pte. Ltd Singapore
Dataquest Taiwan Limited Taiwan
Dataquest Research (Thailand) Limited Thailand
Dataquest Japan Limited Japan
Dataquest (Korea) Inc. Delaware
Gartner Group FSC, Inc. Virgin Islands
Gartner Group Learning, Inc. Minnesota
J3 Learning Limited United Kingdom
Mindware Training Technologies, Ltd. Ireland
IMS HOLDINGS (U.K.) LIMITED United Kingdom
Intercontinental Medical Statistics Ltd. United Kingdom
Imsworld Publications Ltd. United Kingdom
IMS Sold Out Limited United Kingdom
Medical Direct Mail Organisation Ltd. United Kingdom
PMS International Limited United Kingdom
Pharma Strategy Group Limited United Kingdom
ST Europe Ltd. United Kingdom
S.T. S.A.R.L. France
I.M.S. INTERNATIONAL, INC. Delaware
IMS Australia Pty. Ltd. Australia
Amfac Pty. Limited Australia
Chemdata Pty. Limited Australia
Data Design Hisoft Pty. Limited Australia 50.0
Medrecord Australia Pty. Limited Australia
Permail Pty. Limited Australia
Healthnet Pty. Limited Australia
IMS of Canada Limited Canada
IMS Pacific Limited Hong Kong
IMS Korea Ltd. Korea
IMS (NZ) Limited New Zealand
I.M.S. Portugal-Consultores Internacionais
de Marketung Farmaceutico, Lda. Portugal
IMS International (South Africa)(Pty.)Ltd. South Africa
I.M.S. Financial, Inc. Delaware
Dun & Bradstreet Germany Holding GmbH Germany
IMS-MIDOC Medizinische Informations, Doku-
mentations und Consultinggesellschaft mbH Germany
I.M.S. INTERNATIONAL, INC. (Continued)
IMS Holding Deutschland GmbH Germany
IFNS Marktforschung Gmb Germany
IMS GmbH Institut fur
Medizinische Statistik Germany
IMS Data GmbH Germany
IMS Hellas Ltd. Greece 50.0
GPI Krankenhausforschung Germany 60.0
Gesellschaft Fur Pharma-
Informationssysteme m.b.H.
MedVantage GmbH Integriertes Germany 60.0
Datenmanagement im Health
Care-Markt
Data Coordination (Israel) Ltd. Israel
IMS Asia (1989) Pte. Ltd. Singapore
IMS Pharminform Holding AG Switzerland 99.85
Duns Licensing Associates, L.P. Delaware 42.77
Spartan Leasing Corporation Delaware
Corinthian Leasing Corporation Delaware
Pharmadat Marktforschungs-Gesellschaft m.b.H. Austria
Pharmacall Statistik Ges. m.b.H. Austria
Informations Medicales Et Statistiques S.A. Belgium
Pharma Data Boliviana S.R.L Bolivia
IMS Servicos Ltda. Brazil 96.83
Intercomunicaciones Y Servicio de Datos S.A.
[a/k Interdata S.A.] Colombia 94.96
IMS Medinform A.S. Czech Republic
IMS Republica Dominicana S.A. Dominican Republic
Datandina Ecuador S.A. Ecuador
IMS Egypt Limited Egypt 99.99
Institute for Medical Statistics Oy Finland
Asserta Centroamerica Medicion de Mercados, S.A. Guatemala
IMS Medinform Hungaria Market Research Services Ltd. Hungary
IMS Data (M) Sdn. Bhd. Malaysia
Interdata S.A. de C.V. Mexico
Informations Medicales & Statistiques S.A.R.L. Morocco
I.M.S. (Nederland) B.V. Netherlands
IMS Denmark ApS Denmark
Informations Medicales Et Statistiques SA France 75.00
I.M.S. Finance (Nederland) B.V. Netherlands
Institute for Medical Statistics Norge A/S Norway
Pharma Data Paraguaya S.R.L. Paraguay
Datandina S.A. Peru
Intercontinental Marketing Services Iberica, S.A. Spain
Mercados Y Analisis, S.A. [a/k MASA] Spain
Data Coordination AG Switzerland
PMA Sociedad Anonima Argentina
IMS AG Switzerland
IMS Information Medical Statistics AG Switzerland
IMS Poland Limited Sp. z.o.o. Poland
I.M.S. INTERNATIONAL, INC. (Continued)
IMS Sweden AB Sweden
RCI Research Consultants AG Switzerland
Marketing Y Datos Limitada[a/k Markdata Ltda.] Chile 99.99
Interstatistik AG Switzerland
IMS Ges m.b.H. Austria
Datec Industria e Comercio,
Distribuidora Grafica Brazil 99.99
e Mala Direta Ltda.
IMS Tunisia Tunisia
IMS Tibbi Istatistik Ticaret ve Musavirlik
Ltd Sirketi [a/k IMS Turkiye Ltd.] Turkey
Pharma Data Uruguaya S.A. Uruguay
PMV De Venezuela, C.A. Venezuela
Medicare Audit Limited United Kingdom 50.00
Clark-O'Neill, Inc. New Jersey
IMS America, Ltd. New Jersey
Coordinated Management Systems, Inc. Delaware
IMS Software Services, Ltd. Delaware
Intercontinental Medical Statistics International, Ltd. Delaware
Intercontinental Medical Statistics International, Ltd. New York
Media Management Systems, Inc. Delaware
PJH Technology Solutions, Ltd. Delaware
Decision Surveys International (Pty.) Ltd. South Africa
IMSA (Pty.) Ltd. South Africa
IPRA (Pty.) Ltd. South Africa
PMSA (Pty.) Ltd. South Africa
IMS SERVICES NEDERLAND B.V. Netherlands
IMS ITALIA S.p.A. Italy 55.08%
IMS Holding (Belgium) S.A. Belgium
PILOT SOFTWARE, INC. Delaware
PES (Amsterdam) Holding en Finance B.V. Netherlands
Pilot Software Pty. Ltd. Australia
Pilot Software Ltd. United Kingdom
Thorn EMI Computer Software Ltd. United Kingdom
Pilot Software S.A.R.L. France
Pilot Software GmbH Germany
Pilot Software S.R.L. Italy
Pilot Software B.V. Netherlands
Pilot Software Pte. Ltd. Singapore
Pilot Software AB Sweden
NIELSEN MEDIA RESEARCH, INC. Delaware
Media Licensing Associates, Inc. Delaware
NIELSEN MEDIA RESEARCH LTD. Canada
SALES TECHNOLOGIES, INC. Georgia
Aurum Software, Inc. California