Exhibit 19
NMR COMMISSIONS AGREEMENT
NMR COMMISSIONS AGREEMENT (as amended from time to time, the
"AGREEMENT"), dated as of May 7, 2002 (the "EFFECTIVE DATE"), with respect to
Operating Agreement (as amended from time to time, the "OPERATING AGREEMENT"),
dated August 15, 1999, between NetRatings, Inc., a Delaware corporation
("NETRATINGS"), and Xxxxxxx Media Research, Inc., a Delaware corporation
("NMR"). Defined terms used but not otherwise defined herein shall have the
respective meanings ascribed to them in the Operating Agreement.
Section 5.1 of the Operating Agreement provides that, except as
otherwise provided therein, all Net Customer Xxxxxxxx derived from the
marketing, sale and distribution of the Approved Internet Service shall be
allocated in the following percentages: (i) NMR - 35% (the "COMMISSION") and
(ii) NetRatings - 65%.
NetRatings has entered into an Agreement and Plan of
Reorganization dated as of May __, 2002 (the "MERGER AGREEMENT") with, among
others, ACNielsen Corporation and ACNielsen xXxxxxxx.xxx. Pursuant to Section
6.3 of the Merger Agreement, NetRatings and NMR will enter into this Agreement
simultaneously with their entering into the Merger Agreement.
NetRatings and NMR wish to modify Section 5.1 and certain other
provisions of the Operating Agreement as described below.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:
1. From the Effective Date until the termination of this Agreement:
(a) Subject to Section 1(c) below, no Commission shall be
payable to NMR following the Effective Date with respect to Net Customer
Xxxxxxxx derived from customer sales; and
(b) The second sentence of Section 2.2 of the Operating
Agreement shall be amended and restated in its entirety to read as
follows:
"Notwithstanding the foregoing, NMR shall have primary
responsibility for marketing products and services of the
Approved Internet Service which are marketed and sold using the
NMR Trademarks and the NRI Trademarks to customers in the
following categories, in each case, to the extent that such
customers are located in North America: (i) traditional media
customers, consisting of television, radio and other media
customers (including broadcast
networks, local TV stations, superstations, cable networks,
cable systems, syndicators and television program producers);
(ii) advertising agencies (including television advertising
customers of such agencies which are then current and active NMR
customers), interactive agencies and media buyers; (iii) the
technology companies, marketers, web sites and web-only agencies
listed on Exhibit E hereto and (iv) such other customers as may
be determined by the Operating Committee".
(c) As used in this Agreement, an "NMR CUSTOMER CONTRACT" means a
customer contract for Approved Internet Service procured by NMR on or prior to
the Effective Date. As used in this Agreement, the term "CONTRACT YEAR" means,
with respect to any NMR Customer Contract, any twelve month period during the
term of such contract that begins on the effective date of the NMR Customer
Contract or twelve-month anniversary of such effective date (as applicable), and
ends on the immediately following twelve-month anniversary of the effective date
of the NMR Customer Contract. Notwithstanding anything to the contrary in this
Agreement, following the Effective Date, NMR shall continue to be entitled to
receive a commission of 35% of all Net Customer Xxxxxxxx that are paid after the
Effective Date but which relate to a Contract Year which began prior to or on
the Effective Date. All such commissions shall be payable to NMR on the terms
and subject to the conditions associated with the payment of Commissions as in
effect immediately prior to the Effective Date under the Operating Agreement.
(d) Notwithstanding anything to the contrary herein, and for the
avoidance of doubt, the parties acknowledge and agree that NetRatings shall have
no obligation to pay any Commission amounts to NMR under any customer contracts
which NetRatings acquires through its acquisition of Jupiter Media Metrix, Inc.
2. From the Effective Date until the termination of this Agreement, the
provisions of this Section 2 shall be effective:
(a) On the terms and subject to the conditions set forth in this
Section 2, NMR shall cause the services of the individuals listed on
Exhibit A hereto (the "DEDICATED EMPLOYEES"), if they continue to be
employed by NMR on the Effective Date, to be made available to fulfill
NMR's obligations under Section 2.2 of the Operating Agreement (as
amended and restated herein) on a full-time basis, except as otherwise
provided in this Section 2. On the terms and subject to the conditions
of this Section 2, NMR shall cause the services of the individuals
listed on Exhibit B hereto (the "SHARED EMPLOYEES"), if they continue to
be employed by NMR on the Effective Date, to be made available to
fulfill NMR's obligations under Section 2.2 of the Operating Agreement
(as amended and restated herein) on a part-time basis (substantially
consistent with the amount of time dedicated by such individuals to such
activities on the Effective Date). The Dedicated Employees and the
Shared Employees currently provide services relating to the marketing,
sale and distribution of the Approved Internet Service. The parties
acknowledge and agree that NMR shall be deemed to satisfy in full its
obligations under Section 2.2 of the Operating Agreement (as amended and
restated herein) by performing NMR's obligations under this Section 2
and
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otherwise under this Agreement. The parties shall amend Exhibit A and
Exhibit B following the date of this Agreement to the extent necessary
to (i) add thereto any New Dedicated Employee (as defined below), (ii)
remove therefrom any person who ceases to be a Dedicated Employee or
Shared Employee covered by this Agreement after the date hereof and
(iii) reclassify as a Shared Employee any Dedicated Employee who becomes
a Shared Employee as permitted by this Agreement.
(b) Notwithstanding anything to the contrary herein, the parties
understand and agree that NMR shall be entitled to cause the Dedicated
Employees to devote a portion of their working time and the Shared
Employees to dedicate an incremental additional portion of their working
time, in each case, determined by NMR in good faith after consultation
with NetRatings to be appropriate, to the provision of services to NMR
with respect to (i) Xxxxxxxxxxx.xxx, Inc. and its products and services,
or (ii) in connection with any other convergence products ("ALTERNATIVE
USES"). If and to the extent any Dedicated Employee provides services to
NMR relating to Alternative Uses as contemplated by this Section 2(b) or
otherwise, such Dedicated Employee shall thereafter be deemed a Shared
Employee for the purposes of this Agreement (including, without
limitation, for the purposes of NetRatings' payment obligations under
Section 2(c) below). In addition to any express provisions of this
Section 2(b), the Operating Committee and NMR may from time to time
mutually agree (i) to reduce the amount of working time devoted to the
provisions of services hereunder by any Shared Employee or Dedicated
Employee and/or (ii) to increase the amount of working time devoted to
the provision of services hereunder by any Shared Employee.
(c) NetRatings shall pay to NMR (i) 100% of the Direct Costs (as
defined below) of each Dedicated Employee and (ii) a portion of the
Direct Costs of each Shared Employee equal to the percentage of such
Shared Employee's total working time that is actually devoted to
providing services under this Agreement, as determined in good faith by
NMR. As used in this Agreement, "DIRECT COSTS" means with respect to any
Dedicated Employee or Shared Employee, the amounts actually paid by NMR
in respect of the salary, benefits, perquisites and other compensation
(including reimbursed expenses) of such individual (including an
allocable portion of NMR's overhead charges, including an appropriate
allocation for office space (the amount described in this parenthetical
being referred to as the "OVERHEAD CHARGE")).
NetRatings shall have the right, at its sole cost and expense,
during reasonable business hours and upon reasonable advance notice, to
review the computer printouts and reports and other books and records of
NMR to the extent that the same relate to amounts to be paid by
NetRatings to NMR with respect to Dedicated Employees and Shared
Employees hereunder; provided, that such right shall not be exercised by
NetRatings more frequently than once per calendar quarter.
(d) Subject to (i) applicable laws, (ii) the written employment
policies of NMR as in effect from time to time and (iii) any contract or
agreement in effect on the Effective Date or thereafter entered into
with the consent of the Operating Committee governing a Dedicated
Employee's or Shared Employee's employment with NMR, NMR shall not,
other
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than with the consent of the Operating Committee, terminate a Dedicated
Employee's or Shared Employee's employment with NMR.
(e) NMR shall not, without the consent of the Operating
Committee, materially modify any Dedicated Employee's or Shared
Employee's salary, benefits, perquisites or other compensation as in
effect on the Effective Date other than (i) as required by any
applicable contract or agreement in effect on the Effective Date or
entered into thereafter with the consent of the Operating Committee,
(ii) in the ordinary course of business consistent with past practice,
(iii) in connection with changes to benefits plans and arrangements
maintained by NMR and in which such Dedicated Employee or Shared
Employee participates, which changes affect such Dedicated Employee or
Shared Employee and other employees of NMR generally or (iv) in
accordance with applicable laws and regulations.
(f) NMR shall invoice NetRatings for the amounts contemplated by
this Section 2 quarterly in arrears. Upon request, NMR will provide
commercially reasonable detail, to the extent the same is reasonably
available, to support the charges included in an invoice. Invoices shall
be payable by NetRatings within forty-five (45) days of receipt (the
"PAYMENT PERIOD"). Disputed amounts shall not affect payment of
non-disputed amounts. NetRatings shall pay any applicable tariff, duty,
tax, or like charge, however designated, imposed with respect to the
services provided to NetRatings by NMR's personnel hereunder. The
parties acknowledge and agree that NetRatings may defer payment of any
portion of any Overhead Charge included in an invoice if NetRatings in
good faith disputes its obligation to pay the same; provided, that any
undisputed portion of such Overhead Charge shall be paid as provided
during the Payment Period.
If NetRatings in good faith disputes its obligation to pay any
portion of any Overhead Charge included in an invoice, it shall promptly
(but in no event more than thirty (30) days) following receipt of the
relevant invoice, give written notice of such dispute (a "DISPUTE
NOTICE") to NMR specifying the amount of Overhead Charges in dispute and
identifying the basis of the dispute in reasonable detail. NMR and
NetRatings shall negotiate in good faith for a period of at least ten
(10) days after the date on which NetRatings delivers a Dispute Notice
to resolve all disputes set forth therein. If NetRatings and NMR are not
able to resolve all such disputes within such ten (10) day period, then
(i) promptly (but in no event more than five (5) days)
after the expiration of such ten (10) day period, all remaining
disputes shall be submitted by NMR and NetRatings to the
Operating Committee for determination in the manner contemplated
by Section 3.1(e) of the Operating Agreement (as modified
hereby); and
(ii) NMR and NetRatings shall use their respective
reasonable good faith efforts to cause the Operating Committee,
promptly following the date of such submission, to meet in the
manner contemplated by Section 3.1(c) of the Operating Agreement
to determine such remaining disputes.
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NMR and NetRatings shall instruct the Operating Committee to issue its
determination as to such submitted disputes no more than thirty (30)
days following the date on which they are submitted to the Operating
Committee for determination hereunder (the "DETERMINATION PERIOD"). The
determination of the Operating Committee as to any such disputes
submitted to it shall be conclusive, final and binding upon NMR and
NetRatings. Notwithstanding anything to the contrary in Section 3 of the
Operating Agreement, if all disputes as to Overhead Charges submitted to
the Operating Committee for determination hereunder are not finally
determined by the Operating Committee within the Determination Period
(whether or not during the Determination Period any deadlock has been
submitted to the chief executive officers of NetRatings and NMR for
resolution as provided by Section 3.1(f) of the Operating Agreement and,
if any deadlock is so submitted, notwithstanding that such deadlock may
not have been resolved during the Determination Period by such chief
executive officers), then immediately following the expiration of the
Determination Period, NMR shall be entitled to pursue any such other
remedies as may be available to it with respect to any remaining unpaid
Overhead Charges, including, without limitation, the arbitration
procedures set forth in Article IX of the Operating Agreement. For
avoidance of doubt, the parties acknowledge and agree that a dispute
with regard to Overhead Charges shall not be deemed to have been
"finally determined by the Operating Committee" for the purposes hereof
in the case of a deadlock as to such dispute that has not been resolved
by the chief executive officers of NetRatings and NMR during the
Determination Period as provided under Section 3.1(f) of the Operating
Agreement. In the event of a conflict or inconsistency between this
Section 2(f) and Section 3 of the Operating Agreement with respect to
the manner in which disputes as to Overhead Charges are to be determined
by the Operating Committee, the provisions of this Section 2(f) shall
govern and control.
(g) At any time and from time to time, the Operating Committee
may give a written notice (a "WAIVER NOTICE") to NMR informing NMR that
the Operating Committee has determined that the services of one or more
Dedicated Employees or Shared Employees are no longer required to be
provided hereunder. During the thirty (30)-day period following the
delivery by the Operating Committee of a Waiver Notice or to terminate
the employment with NMR of any such individual (the "DECISION PERIOD"),
NMR shall determine whether it desires to retain as an NMR employee the
Dedicated Employee(s) and/or Shared Employee(s) who are the subject of
the Waiver Notice. If NMR determines to terminate the employment with
NMR of any Dedicated Employee or Shared Employee covered by a Waiver
Notice, then NMR shall (i) deliver written notice (a "TERMINATION
NOTICE") to that effect to NetRatings during the Decision Period and
(ii) during the Decision Period in good faith begin and thereafter
pursue all appropriate proceedings and actions (including the observance
of any relevant notice periods and other formalities) under applicable,
contracts, policies, agreements, statutes, laws and regulations to
effect the termination of each such employee in accordance therewith.
(h) If NMR does not deliver a timely Termination Notice relating
to any Dedicated Employee or Shared Employee covered by a Waiver Notice,
then NetRatings shall, following the expiration of the related Decision
Period, not be obligated to make any further payments under this
Agreement relating to such Dedicated Employee or Shared
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Employee. If NMR does deliver a timely Termination Notice relating to
any Dedicated Employee or Shared Employee covered by a Waiver Notice,
then:
(A) NetRatings shall be obligated to continue to pay the
Direct Costs of such Dedicated Employee or Shared Employee as
contemplated by Section 2(c) above, through the date of his or
her termination of employment; and
(B) NetRatings shall reimburse NMR and its directors,
officers, employees, shareholders and agents (and each of the
heirs, executors and successors and assigns of any of them) for,
and shall indemnify such persons and hold them harmless from (i)
any and all Indemnified Severance Costs (as defined below) of
any such Dedicated Employee and (ii) a portion of the
Indemnified Severance Costs of any such Shared Employee that is
equal to the percentage of such Shared Employee's total working
time that was actually devoted to providing services
contemplated by this Agreement at the time of delivery of the
Waiver Notice, as determined in good faith by NMR. In the event
that (i) NetRatings actually pays any Indemnified Severance
Costs to NMR hereunder in connection with the termination of any
Dedicated Employee's or Shared Employee's employment with NMR,
and (ii) such Dedicated Employee or Shared Employee is rehired
by NMR within one year following the date on which such
Dedicated Employee's or Shared Employee's employment with NMR
was terminated, then NMR shall reimburse NetRatings for all such
Indemnified Severance Costs actually paid to NMR thereby.
(C) As used herein, "INDEMNIFIED SEVERANCE COSTS" means
any and all liabilities, damages, proceedings, claims, fines,
costs and expenses (including, without limitation, severance
payments), including, without limitation, reasonable attorneys'
fees, arising out of or in connection with, directly or
indirectly, the cessation of the employment with NMR of a
Dedicated Employee or Shared Employee unless such cessation of
employment is effected by NMR in a manner that constitutes a
willful or grossly negligent violation of applicable laws and
regulations. Notwithstanding anything to the contrary herein,
Indemnified Severance Costs shall not include any portion of any
severance payment or similar benefit that is payable to a
Designated Employee or Shared Employee in respect of years or
months of service with NMR prior to the time such Designated
Employee or Shared Employee began performing services for
Nielsen//NetRatings.
3. If any Dedicated Employee or Shared Employee named on Exhibit A or
Exhibit B shall cease to be employed by NMR from time to time during the
effectiveness of this Agreement, other than due to a breach by NMR of its
agreement under Section 2(d), then the Operating Committee shall be entitled to
issue a written notice (a "REPLACEMENT NOTICE") to NMR requesting NMR to replace
such named Dedicated Employee or Shared Employee hereunder by either (as
determined by NMR in its sole discretion), hiring a new NMR employee of NMR's
choosing or reassigning a then-existing NMR employee (in either case, a
"REPLACEMENT EMPLOYEE"), in either case, to be a Shared Employee or Dedicated
Employee (as applicable) hereunder and to have substantially similar duties and
position (including with regard to the amount of his or her working
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time that will be devoted to performing the services contemplated hereby) and to
receive substantially equivalent salary, benefits, perquisites and other
compensation, as did the Dedicated Employee or Shared Employee whose employment
with NMR has ceased and who is being replaced by the Replacement Employee. If
the Operating Committee delivers a Replacement Notice to NMR, NMR shall use its
reasonable good faith efforts to comply with the request of the Operating
Committee reflected therein and to hire a Replacement Employee as contemplated
thereby. If the Operating Committee delivers a Replacement Notice to NMR, then
any and all costs and expenses reasonably incurred by NMR in connection with
identifying, negotiating with and employing or reassigning any Replacement
Employee shall be reimbursed to NMR by NetRatings.
4. In the event that the Operating Committee determines from time to
time during the effectiveness of this Agreement that an increase in the
requirements for services of the nature provided by the Dedicated Employees and
Shared Employees under this Agreement requires additional Dedicated Employees to
be made available by NMR under this Agreement, the Operating Committee may
deliver a notice (a "STAFF INCREASE NOTICE") which shall (i) request NMR to hire
a specified number of new employees of NMR's choosing (each, a "NEW DEDICATED
EMPLOYEE") to be Dedicated Employees hereunder, (ii) identify the position,
duties and general responsibilities which the Operating Committee has determined
should be applicable to each such New Dedicated Employee and (iii) set forth in
reasonable detail the levels of salary, benefits, perquisites and other
compensation (the "APPROVED COMPENSATION LEVELS") that the Operating Committee
believes are appropriate for each such New Dedicated Employee. If the Operating
Committee delivers a Staff Increase Notice, NMR shall use its reasonable good
faith efforts to comply with the Operating Committee's request set forth therein
and to hire the New Dedicated Employees contemplated thereby. If the Operating
Committee delivers a Staff Increase Notice to NMR, then any and all costs and
expenses reasonably incurred by NMR in connection with identifying, negotiating
with and employing any New Dedicated Employee requested by the Operating
Committee shall be reimbursed to NMR by NetRatings. NMR shall not grant to any
New Dedicated Employee in connection with his or her hiring by NMR, salary,
benefits, perquisites and other compensation that differ materially from the
Approved Compensation Levels.
5. This Agreement shall terminate automatically upon the termination of
the Operating Agreement for any reason whatsoever. Also, this Agreement may be
terminated at any time (i) by the mutual written consent of NMR and NetRatings
or (ii) by NMR or NetRatings upon a material breach by the other, which remains
uncured for ninety (90) days after written notice thereof. If this Agreement
shall be terminated for any reason, NetRatings shall be deemed to have delivered
a Waiver Notice with respect to all Dedicated Employees and Shared Employees at
the time of termination, and the provisions of Section 2(g) and Section 2(h)
shall thereafter apply accordingly, mutatis mutandi. Notwithstanding any
termination of this Agreement, NetRatings shall remain liable for any payment
and other obligations incurred by it prior to termination, and the provisions of
Section 2(g), Section 2(h), Section 6, Section 7, Section 8, Section 9, Section
10 and Section 11 shall survive.
6. Except as expressly modified by this Agreement, on the Effective
Date, the Operating Agreement shall continue in full force in effect as in
effect immediately prior to the Effective Date.
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7. This Agreement, together with the Operating Agreement, constitutes
the entire agreement and understanding of the parties with respect to its
subject matter, supersedes any and all prior oral or written agreements,
negotiations, contracts and understandings between the parties with respect to
such subject matter, and can be amended, supplemented or otherwise modified only
by a written agreement executed by NMR and NetRatings. This Agreement may be
executed in any number of counterparts, each of which shall be effective against
the parties actually executing such counterparts, and all of which together
shall constitute one and the same instrument.
8. Any and all disputes between NMR and NetRatings under this Agreement
shall be settled as contemplated by Article VIII of the Operating Agreement.
9. Any and all notices and other communications hereunder shall be given
in the manner contemplated by Section 10.4 of the Operating Agreement and shall
be deemed to be effective or to have been given at the times specified in such
Section 10.4.
10. The headings in this Agreement are included for the purposes of
convenience only, and are not to have any bearing on the construction or
interpretation of this Agreement.
11. The failure of any party to exercise any of its rights under this
Agreement or its failure to insist upon strict adherence to any term of this
Agreement on any one occasion shall not be construed as a waiver or deprive that
party of the right thereafter to insist upon strict adherence to the terms and
conditions of this Agreement at a later date.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives as of the date first written
above.
NETRATINGS, INC.
By: /s/ Xxxx Xxxxx
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Title: CFO
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Date: May 7, 2002
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XXXXXXX MEDIA RESEARCH, INC.
By: /s/ Xxxxx Xxxxxxxx
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Title: Senior Vice President
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Date: May 7, 2002
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EXHIBIT B
Shared Employees
None.
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