-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LF0NmtLSzBf+5vIukOpzJKapD8p3uXDa+HbIFF05ZSeW6N/B5z/lFEzuMcuE5GJC 6u6/Z8ZjO4UhtxvtCRbDbA== 0001047469-03-024036.txt : 20030714 0001047469-03-024036.hdr.sgml : 20030714 20030714172723 ACCESSION NUMBER: 0001047469-03-024036 CONFORMED SUBMISSION TYPE: SC 14D9 PUBLIC DOCUMENT COUNT: 10 FILED AS OF DATE: 20030714 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: INFORMATION RESOURCES INC CENTRAL INDEX KEY: 0000714278 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ENGINEERING, ACCOUNTING, RESEARCH, MANAGEMENT [8700] IRS NUMBER: 521287752 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D9 SEC ACT: 1934 Act SEC FILE NUMBER: 005-35926 FILM NUMBER: 03785918 BUSINESS ADDRESS: STREET 1: 150 N CLINTON ST CITY: CHICAGO STATE: IL ZIP: 60661-1416 BUSINESS PHONE: 3127261221 MAIL ADDRESS: STREET 1: 150 N CLINTON ST CITY: CHICAGO STATE: IL ZIP: 60661-1416 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: INFORMATION RESOURCES INC CENTRAL INDEX KEY: 0000714278 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ENGINEERING, ACCOUNTING, RESEARCH, MANAGEMENT [8700] IRS NUMBER: 521287752 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D9 BUSINESS ADDRESS: STREET 1: 150 N CLINTON ST CITY: CHICAGO STATE: IL ZIP: 60661-1416 BUSINESS PHONE: 3127261221 MAIL ADDRESS: STREET 1: 150 N CLINTON ST CITY: CHICAGO STATE: IL ZIP: 60661-1416 SC 14D9 1 a2114556zsc14d9.htm SC 14D9
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SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549


SCHEDULE 14D-9

Solicitation/Recommendation Statement under Section 14(d)(4)
of the Securities Exchange Act of 1934

Information Resources, Inc.
(Name of Subject Company)

Information Resources, Inc.
(Name of Person Filing Statement)

Common Stock, par value $0.01 per share
(and Associated Preferred Share Purchase Rights)
(Title of Class of Securities)

456905108
(CUSIP Number of Class of Securities)


Monica M. Weed
Executive Vice President and General Counsel
Information Resources, Inc.
150 North Clinton Street
Chicago, Illinois 60661
(312) 726-1221
(Name, address and telephone number of person authorized to receive notices and communications on behalf of the person filing statement)

With a copy to:

Terrence R. Brady
Winston & Strawn
35 West Wacker Drive
Chicago, Illinois 60601
(312) 558-5600

o
Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.





Item 1. Subject Company Information.

Name and Address.

        The name of the subject company is Information Resources, Inc., a Delaware corporation (the "Company"). The address of the principal executive offices of the Company is 150 North Clinton Street, Chicago, Illinois 60661, and its telephone number is (312) 726-1221.

Securities.

        The title of the class of equity securities to which this Solicitation/Recommendation Statement on Schedule 14D-9 (this "Statement") relates is the common stock, par value $0.01 per share, of the Company (the "Company Common Stock"), together with the associated Preferred Share Purchase Rights (the "Company Rights") issued pursuant to the Rights Agreement, as amended and restated as of October 27, 1997, and as further amended as of June 29, 2003, between the Company and Harris Trust and Savings Bank, as Rights Agent. Unless the context requires otherwise, references in this Statement to the Company Common Stock shall include the Company Rights. As of July 11, 2003, there were 30,020,300 shares of the Company Common Stock issued and outstanding.


Item 2. Identity and Background of Filing Person.

Name and Address.

        The name, business address and business telephone number of the Company, which is the subject company and the filing person, are set forth in Item 1 above, which information is incorporated into this Item 2 by reference. The Company's website address is www.infores.com. The information contained on the Company's website is not, and should not be considered to be, a part of this Statement.

Tender Offer.

        This Statement relates to the tender offer by Gingko Acquisition Corp., a Delaware corporation ("Purchaser") and a wholly owned subsidiary of Gingko Corporation, a Delaware corporation ("Parent") formed by Symphony Technology II-A, L.P., a Delaware limited partnership ("Symphony"), and affiliates of Tennenbaum & Co., LLC, a Delaware limited liability company ("Tennenbaum"), to purchase all of the outstanding shares of the Company Common Stock at a purchase price per share of Company Common Stock of (i) one contingent value right ("CVR"), as more fully described below, and (ii) $3.30, net to the seller in cash, without interest (such cash per share price, or any greater amount paid per share of Company Common Stock pursuant to the Offer (as defined below), the "Cash Consideration"), on the terms and subject to the conditions set forth in the Offer to Purchase, dated July 14, 2003, of Purchaser (the "Offer to Purchase"), and in the related Letter of Transmittal (the "Letter of Transmittal," which, together with the Offer to Purchase, as each may be amended or supplemented from time to time, constitute the "Offer"), copies of which are filed as Exhibits (a)(1) and (a)(2) hereto, respectively, and are incorporated herein by reference in their entirety.

        Each CVR shall represent the contingent right to receive an amount of cash equal to the CVR Payment Amount (as defined in the Contingent Value Rights Agreement to be entered into by and among the Company, Parent, Purchaser and the Rights Agents (as defined therein) (the "CVR Agreement"), the form of which is filed as Exhibit (e)(2) hereto and is incorporated herein by reference in its entirety). The summary of the terms of the CVRs and of the CVR Agreement contained in the Offer to Purchase under "The Offer—Section 12—Purpose of the Offer; Plans for the Company; Stockholder Approval; Appraisal Rights; The Merger Agreement; the CVR Agreement" is incorporated herein by reference. Such summary is qualified in its entirety by reference to the CVR Agreement.

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        The Offer is described in a Tender Offer Statement on Schedule TO, dated July 14, 2003 (the "Schedule TO"), which was filed by Parent, Purchaser, Symphony and Tennenbaum with the Securities and Exchange Commission on July 14, 2003. Parent and Purchaser have represented to the Company that neither Parent nor any of its subsidiaries (including Purchaser) beneficially own any shares of the Company Common Stock.

        The Offer is being made pursuant to the Agreement and Plan of Merger, dated as of June 29, 2003 (the "Merger Agreement"), by and among Parent, Purchaser and the Company. Following the completion of the Offer and the satisfaction or waiver of the conditions of the Offer, it is proposed that Purchaser shall merge with and into the Company (the "Merger"), with the Company as the surviving corporation. Pursuant to the Merger, each outstanding share of the Company Common Stock (other than shares held by (i) the Company (as treasury stock), (ii) Parent, Purchaser or any of their respective subsidiaries and (iii) stockholders who are entitled to demand and who do in fact properly demand appraisal of such shares, pursuant to, and who comply in all respects with, the provisions of Section 262 of the Delaware General Corporation Law (the "DGCL")) shall be converted into the right to receive the per share Cash Consideration and one CVR (such per share Cash Consideration and CVR are referred to herein together as the "Merger Consideration") per share of Company Common Stock. A copy of the Merger Agreement is filed as Exhibit (e)(1) hereto and is incorporated herein by reference in its entirety.

        According to the Schedule TO, the principal executive offices of Parent, Purchaser and Symphony are located at 4015 Miranda Avenue, 2nd Floor, Palo Alto, California 94304, and the principal executive offices of Tennenbaum are located at 11100 Santa Monica Boulevard, Suite 210, Los Angeles, California 90025. All information in this Statement or incorporated by reference herein concerning Parent, Purchaser or any of their affiliates, or actions or events in respect of either of them, has been provided by Parent or Purchaser, and the Company assumes no responsibility for the accuracy or completeness of such information.


Item 3. Past Contacts, Transactions, Negotiations and Agreements.

        Except as described in this Statement or incorporated herein by reference, to the knowledge of the Company, as of the date of this Statement, there are no material agreements, arrangements or understandings, or any actual or potential conflicts of interest between the Company or its affiliates and (a) its executive officers, directors or affiliates or (b) Purchaser or any of its executive officers, directors or affiliates.

Arrangements Between the Company and its Executive Officers, Directors and Affiliates.

        Information concerning the actual or potential conflicts of interest involving the Company and its executive officers, directors and affiliates is set forth in the Company's definitive Proxy Statement for its Annual Meeting of Stockholders dated April 16, 2003 under the captions "Executive Compensation" and "Ownership of Securities." A copy of the relevant information from such Proxy Statement is filed as part of Annex B hereto and is incorporated herein by reference. The information so incorporated by reference from Annex B is considered to be a part of this Statement, except for any information that is superceded by information included directly in this Statement.

Certain Agreements with Company Officers.

        In addition to the employment agreements with the five executive officers of the Company (including the Company's Chief Executive Officer) described above in the information incorporated by reference from Annex B under "Arrangements Between the Company and its Executive Officers, Directors and Affiliates," the Company has entered into employment agreements with nine of its other

3



executive officers (the "Employment Agreements") and severance protection agreements with 19 of its key employees (the "Severance Protection Agreements").

        The Employment Agreements provide that if the Company terminates the employment of the executive for cause, the Company shall have no further liability to the executive except for accrued salary and other compensation owed to the executive at the time of termination. If the Company terminates the employment of the executive other than for cause or disability and except in the case of a Change in Control, the executive is entitled to receive: (i) his/her base salary for a period of 12 months following the termination date; (ii) a prorated bonus for the year in which the termination occurs based upon the executive's targeted bonus amount for that year; (iii) continuation of the medical, dental, hospitalization, prescription drug and life insurance coverage and benefits provided to the executive immediately prior to the date of termination for a 12-month period after the termination date; (iv) continued vesting of all unvested stock options during this 12-month period; and (v) reimbursement of executive outplacement services for up to one year, not to exceed $20,000.

        Under the Employment Agreements, if the executive's employment with the Company is terminated within 24 months following a Change in Control (as defined below) either by the Company without cause or by the executive for good reason (each, as defined in the agreement), the executive is entitled to receive: (i) all accrued compensation and a pro-rata bonus, (ii) as severance pay, and in lieu of any further compensation, an amount equal to two times the sum of (A) the executive's base salary (at the rate in effect on the date of termination or, if greater, at the rate in effect immediately prior to the Change in Control), and (B) the greater of the highest bonus amount paid or payable to the executive in any of the three full fiscal years of the Company immediately preceding the date of termination or the executive's targeted bonus amount for the year in which the date of termination occurs payable in 24 equal monthly installments commencing on the first day of the calendar month after the termination date; (iii) continuation of the medical, dental, hospitalization, prescription drug and life insurance coverage and benefits provided to the executive immediately prior to the Change in Control for a 24-month period after the termination of the executive's employment; (iv) immediate vesting of all unvested stock options and continued exercisability for all stock options during this 24-month period unless the options sooner expire by their terms; (v) reimbursement of executive outplacement services for up to one year, not to exceed $20,000; and (vi) within 10 days after the date of termination, an amount in a single cash payment equal to two times the amount of the Company matching contribution payable on the executive's behalf to the Company's 401(k) Retirement Savings Plan (or its U.K. equivalent for U.K. employees) in respect of the most recently completed plan year.

        The Severance Protection Agreements provide that if the executive's employment with the Company is terminated within 12 months following a Change in Control (as defined below) either by the Company without cause or by the executive for good reason (each, as defined in the agreements), the executive is entitled to receive: (i) all accrued compensation and a pro-rata bonus; (ii) as severance pay, and in lieu of any further compensation, an amount equal to the sum of (a) the executive's base salary (at the rate in effect on the date of termination or, if greater, at the rate in effect immediately prior to the Change in Control) and (b) the greater of the highest annual bonus amount paid or payable to the executive in any of the three full fiscal years of the Company immediately preceding the date of termination or the executive's targeted bonus amount for the year in which the date of termination occurs, payable in 12 equal monthly installments commencing on the first day of the calendar month after the termination date; (iii) continuation of the medical, dental, hospitalization, prescription drug and life insurance coverage and benefits provided to the executive immediately prior to the Change in Control for a 12-month period after the termination of the executive's employment; (iv) immediate vesting of all unvested stock options and continued exercisability for all stock options during this 12-month period unless the options sooner expire by their terms; (v) reimbursement of executive outplacement services for up to six months, not to exceed $12,000; and (vi) within 10 days after the date of termination, an amount in a single cash payment equal to the amount of the Company

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matching contribution made on the executive's behalf to the 401(k) Retirement Savings Plan (or its U.K. equivalent for U.K. employees) in respect of the most recently completed plan year.

        Under the terms of the Severance Protection Agreements and Employment Agreements, if (a) the Company terminates the employment of the executive without cause within six months prior to a Change of Control, or (b) at any time prior to a Change in Control, the Company terminates the employment of the executive and the executive demonstrates that such termination (1) was at the request of a third party who indicated an intention or has taken steps to effect a Change in Control or (2) otherwise arose in connection with or in anticipation of a threatened or proposed Change in Control, then such termination of the employment of the executive shall be deemed to have occurred after a Change in Control, provided the Change in Control actually occurred.

        "Change in Control" under the Severance Protection Agreements and Employment Agreements includes, among other transactions, the occurrence of the following events, subject to certain exceptions: (1) an acquisition of any voting securities of the Company by any person immediately after which such person is or becomes the beneficial owner (directly or indirectly) of securities representing 30% or more of the total voting power of the Company's then outstanding voting securities; or (2) the individuals who are members of the Board of Directors as of the date of the applicable agreement cease for any reason to constitute at least a majority of the Board of Directors, or following a merger that results in the Company being owned by a parent company, the board of directors of the ultimate parent company.

        In addition, under the Severance Protection Agreements and the Employment Agreements, as well as those agreements with the five executive officers of the Company described in the information incorporated by reference from Annex B, if any of the payments provided for under the agreements are subject to excise tax under Section 4999 of the Internal Revenue Code, the Company will provide the executive with a tax gross-up to compensate for any excise tax due on such amounts (provided that if the payments can be reduced by $50,000 or less and eliminate the excise tax, the payments will be so reduced and no gross-up will be provided). At its May 19, 2000 meeting, in connection with its adoption of the Severance Protection Agreements and Employment Agreements, the Board of Directors also adopted a resolution approving any necessary changes to the employment agreement with Joseph P. Durrett, the Company's Chairman, Chief Executive Officer and President, to conform the change of control protections contained in that contract with those set forth in the Employment Agreements. Thereafter it was discovered that Mr. Durrett's employment agreement did not in fact contain the tax gross up provision. However, the Company inadvertently failed to formalize its agreement to amend Mr. Durrett's employment agreement to reflect the tax gross up provision previously approved. Once this oversight was discovered, the Company and Mr. Durrett, with the Board of Directors' approval, agreed to amend Mr. Durrett's employment agreement. The amendment to Mr. Durrett's employment agreement is filed as exhibit (e)(8) to this Statement.

        Forms of the Severance Protection Agreement and the Employment Agreement are filed as Exhibits (e)(4) and (e)(5) hereto, respectively, and are incorporated herein by reference in its entirety. A copy of the amendment to Mr. Durrett's employment agreement is filed as Exhibit (e)(8) hereto and is incorporated herein by reference in its entirety.

Indemnification of Company Directors and Officers.

        The Company's Certificate of Incorporation, as amended (the "Charter"), provides that, to the fullest extent permitted under the DGCL, any director of the Company will not be personally liable to the Company or its stockholders for monetary damages for a breach of fiduciary duty as a director; except for liability (i) for any breach of the director's duty of loyalty to the Company or its stockholders; (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii) under Section 174 of the DGCL (relating to liability of directors for

5



certain unlawful dividend payments and stock repurchases); or (iv) for any transaction from which the director derived any improper personal benefit. The Company's Charter also provides that, to the fullest extent permitted under the DGCL, the Company will indemnify its directors and officers against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with any threatened, pending or completed action, suit or proceeding in which such person was or is party or is threatened to be made a party by reason of the fact that such person is or was a director or officer of the Company.

        The Company's By-Laws, as amended (the "Bylaws") provide that the Company will indemnify its directors and officers against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with any threatened, pending or completed action, suit or proceeding in which such person was or is a party or is threatened to be made a party by reason of the fact that such person is or was a director or officer of the Company if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company, and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The Bylaws also provide that the Company may advance expenses (including attorneys' fees) incurred by a director or officer of the Company in defending any action, suit or proceeding, subject to a repayment obligation of such director or officer in the event it is subsequently determined such person was not entitled to indemnification under the Bylaws. The Company maintains an insurance policy covering officers and directors to cover any claims made against them for wrongful acts that they may otherwise be required to pay or for which the Company is required to indemnify them, subject to certain exclusions.

        The Company has also entered into directorship and officership agreements with all of its directors and certain of its officers of the Company in addition to the indemnification provided for in the Charter and Bylaws. These agreements, among other things, provide for indemnification of the directors and officers for expenses, judgments, fines and settlement amounts incurred by any of these individuals in any action or proceeding arising out of his services as a director or officer or at the Company's request. The Company believes that these provisions and agreements are necessary to attract and retain qualified people as directors and officers. The forms of directorship and officership agreements are filed as Exhibits (e)(6) and (e)(7) hereto, respectively, and are incorporated herein by reference in their entirety.

The Merger Agreement.

        The summary of the Merger Agreement and the description of the conditions of the Offer contained in the Offer to Purchase under "The Offer—Section 12—Purpose of the Offer; Plans for the Company; Stockholder Approval; Appraisal Rights; The Merger Agreement; the CVR Agreement" and "Conditions of the Offer" are incorporated herein by reference. Such summary and description are qualified in their entirety by reference to the Merger Agreement, which has been filed as Exhibit (e)(1) hereto and is incorporated herein by reference.

Treatment of Stock Options and Restricted Stock under the Merger Agreement.

        The Merger Agreement provides that, at the effective time of the Merger, the holder of each outstanding and unexercised option to purchase shares of Company Common Stock granted under any of the Company's Amended and Restated 1992 Stock Option Plan, Amended and Restated 1992 Executive Stock Option Plan, 1984 Non-Qualified Stock Option Plan and Amended and Restated 1994 Employee Nonqualified Stock Option Plan (each, a "Company Option"), whether or not exercisable or vested, shall be entitled to receive, in full satisfaction of such Company Option, (i) cash in an amount equal to the product of (A) the excess, if any, of the Cash Consideration over the exercise price per share of the Company Option and (B) the number of shares of Company Common Stock subject to such Company Option and (ii) if cash is payable for such Company Option in accordance with the foregoing formula, one CVR per share of Company Common Stock subject to such Company Option.

        The Merger Agreement also provides that, at the effective time of the Merger, the holder of any restricted shares of Company Common Stock awarded pursuant to the Company's Nonqualified Defined Contribution Plan or any individual employment agreement which are outstanding immediately prior to the effective time (collectively, the "Restricted Shares") shall be entitled to the right to receive the Merger Consideration for each such Restricted Share.

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Item 4. The Solicitation or Recommendation.

Recommendation of the Company Board of Directors.

        During a telephonic meeting held on June 29, 2003, the Company's Board of Directors (the "Board of Directors") by unanimous vote approved the Merger Agreement and the CVR Agreement and the transactions contemplated thereby, including the Offer and the Merger, and determined that the transactions contemplated by the Merger Agreement and the CVR Agreement, including the Offer and the Merger, are advisable and in the best interests of the Company and its stockholders, and are fair to the Company's stockholders. THE BOARD OF DIRECTORS RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES OF COMPANY COMMON STOCK PURSUANT TO THE OFFER.

        A letter to the Company's stockholders communicating the Board of Directors' recommendation and a press release announcing the execution of the Merger Agreement are filed herewith as Exhibits (a)(3) and (a)(7), respectively, and are incorporated herein by reference.

Background of the Merger.

        In connection with reviewing and revising the Company's business plan, the Board of Directors has from time to time reviewed and considered certain strategic alternatives for the Company. On February 15, 2001, in response to an unsolicited indication of interest from a third party to acquire the Company and in light of market developments, including the proposed merger of The A.C. Nielsen Co. ("Nielsen") with VNU, N.V., the Board of Directors engaged a financial advisor to assist the Board of Directors in exploring the Company's strategic alternatives, including the possible sale of the Company. At the time of this engagement the Company Common Stock was trading at approximately $5.50 per share, near its then-historic lows.

        In the course of its engagement, the financial advisor and the Company's management and Board of Directors contacted approximately 15 parties. The ensuing discussions resulted in five signed confidentiality agreements, senior-level meetings with three parties and detailed discussions with one party that resulted in a preliminary indication of interest. In May 2001, the party providing the preliminary indication of interest proposed either to acquire the entire Company for $7 to $9 per share, or to acquire a minority stake in the Company for $8 to $10 per share. The Company Common Stock was trading at approximately $9 per share at this time. The party later revised its indication of interest to acquire a minority interest at an unspecified price. The Company decided to terminate discussions because the party was interested only in acquiring a minority interest at a discount to current market prices and the Board of Directors believed that having this party as a minority partner could limit other value maximizing opportunities in the future. By October 2001, the price of the Company Common Stock had risen to $10.34 per share, due in part to improved operating results. The Board of Directors determined that none of the alternatives explored with its financial advisor was preferable to maintaining operations on a stand-alone basis. Accordingly, the Board of Directors terminated the engagement with the financial advisor effective as of April 30, 2002.

        During the period from November 2001 to December 2002, the Company concentrated on executing its business plan. As a result of the impact of what the Company believes to have been anti-competitive behavior by Nielsen, the Company continues to face a number of challenges, including challenges to its ability to respond to trends in the consumer packaged goods industry and general economic conditions. Specifically, increasing customer consolidation among consumer packaged goods manufacturers has caused the overall market for retail tracking services to contract. In addition, retail tracking services offered by the Company and its competitors, particularly in the U.S., began to cover less of the total marketplace than in prior years as a result of the decision by Wal-Mart in May of 2001 to discontinue providing its point-of-sale data to third party data suppliers, including the Company and Nielsen, and the emergence and growth of new channels of trade that do not release point-of-sale data for inclusion in retail tracking services. During this period, the Company also experienced increased

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losses from its German operations as a result of difficulties experienced by the Company's German subsidiary in transitioning German production to the U.S. and transitioning its German customers to a new scan-based service. As a result of these events, the Company reported lower earnings in 2002 than in 2001. The per share price of the Company Common Stock decreased from $7.30 on November 1, 2001 to $3.16 on December 9, 2002.

        Following three years of cost reduction initiatives and in an effort to better align costs with revenues, on December 10, 2002 the Company announced further plans to eliminate approximately 5% of its total workforce in the U.S. and Europe. On December 13, 2002, the Company announced that it had been informed by Procter & Gamble that it decided not to renew its U.S. retail tracking business with the Company. The price per share of the Company Common Stock dropped from a closing price of $3.00 on December 12, 2002 to $1.55 the following week. The Board of Directors and the management of the Company engaged in a review of the retail tracking business to assure that the business could be carried forward effectively following the loss of this major customer, particularly in light of the high fixed-cost nature of the Company's business and ongoing capital requirements. At the same time, the Board of Directors considered it prudent to continue its ongoing review of the strategic alternatives that were open to the Company, including remaining independent and engaging in further restructuring activities, seeking additional funds in the capital markets or through private investment, selling some of the assets or businesses of the Company, or selling the entire enterprise.

        In late July 2002 and in mid-September 2002, the Company and William Blair & Company, L.L.C. ("William Blair") met to discuss various financing alternatives. The Company and William Blair informally continued these discussions through the fall of 2002. In light of the developments in the Company's business described above and the risks that these developments posed to the Company's business, the Board of Directors authorized the Company to enter into a formal engagement letter with William Blair to assist the Company in exploring a broader range of strategic alternatives effective as of January 3, 2003.

        In early February 2003, William Chisholm from Symphony contacted the Company's Chief Financial Officer, Andrew Balbirer, to initiate discussions with respect to a potential transaction involving Symphony and the Company. On February 18, 2003, members of senior management from Symphony and the Company held a telephonic meeting during which they discussed a potential transaction involving the two entities. On February 19, 2003, Symphony signed a confidentiality agreement with the Company. Representatives from Symphony, the Company and William Blair met on March 4, 2003 to discuss a possible transaction. At the March 4, 2003 meeting, Symphony indicated a desire to explore a transaction with the Company on an exclusive basis. However, in light of the strategic alternatives review process underway, the Board of Directors and Company management rejected Symphony's request, but encouraged Symphony to proceed as part of the Company's strategic alternatives review process.

        The Company publicly announced the engagement of William Blair on February 26, 2003. In the course of its engagement, William Blair contacted, or was contacted by, 85 parties (including 40 strategic parties, 42 financial parties and three former industry executives), 46 of whom signed confidentiality agreements with the Company and received the Company's descriptive memorandum. The Company and William Blair asked the parties to submit written, non-binding indications of interest with respect to a possible transaction with the Company by April 10, 2003. In response, William Blair received non-binding preliminary indications of interest from 20 parties. The Board of Directors reviewed these initial indications of interest at a telephonic meeting held on April 15, 2003. Fifteen parties, with indications of interest ranging in value from $40 million to $210 million, proposed to acquire the whole Company prior to conducting a detailed due diligence investigation of the Company's business. None of the initial indications of interest for the entire Company contemplated any sharing with the Company's existing stockholders of the potential recovery from the lawsuit filed by the Company against The Dun & Bradstreet Corp., Nielsen and IMS International, Inc. (the "Defendants") in the United States District Court for the Southern District of New York entitled Information

8



Resources, Inc. v. The Dun & Bradstreet Corp., et al. No. 96 CIV. 5716 (the "Lawsuit") (as described in more detail below). Five parties, with indications of interest ranging in value from $40 million to $80 million, proposed to acquire the Company's Panel and Testing business line only.

        During the April 15, 2003 meeting, the Board of Directors also reviewed certain other strategic alternatives that were available to the Company. As of April 15, 2003, the Company's market capitalization was approximately $35 million. The Board of Directors determined that, given market conditions and the Company's existing market capitalization, capital structure and financial performance, obtaining additional funds in the capital markets or through private investment would be highly dilutive and as such was not in the best interests of the Company's stockholders. The Board of Directors further determined that, as a result of the potential complications in separating business divisions, a sale of the entire Company was preferable to a sale of individual business lines. Nevertheless, the Board of Directors decided to continue its dialogue with the highest bidder interested in acquiring only the Company's Panel and Testing business to keep the Company's options open and maintain its flexibility in the strategic alternatives review process.

        During its deliberations at the April 15, 2003 meeting, the Board of Directors also determined that, unless the purchase price included significant value for the Lawsuit, any transaction involving the sale of the Company would need to be structured so that the existing stockholders would retain a right to all or a portion of any proceeds from the Lawsuit. The Company's Board of Directors believed that, until the ultimate amount of the recovery in the Lawsuit was finally adjudicated, such recovery would likely be undervalued by third parties as a result of uncertainty as to amount and timing of a jury award, if any, the third parties' lack of knowledge of the full merits of the Company's claims and the inability of third parties to review much of the evidence in the Lawsuit due to applicable protective orders. In addition, the Board of Directors believed that, while neither the Company nor any purchaser could determine the value of any potential recovery, the Lawsuit nonetheless constituted a potentially valuable asset of the Company.

        On April 23, 2003, the Company reported its results for the first quarter ended March 31, 2003. The price per share of the Company Common Stock increased from $1.36 to $1.55 per share the following day. On April 29, 2003, the U.S. District Court issued two rulings related to the Lawsuit that were favorable to the Company. The price per share of the Company Common Stock increased from $1.56 on April 29, 2003 to $2.35 on April 30, 2003 following announcement of the favorable rulings.

        In response to the initial indications of interest described above, the Company and William Blair invited ten parties to meet individually with the Company's management and to participate in follow-up conference calls with management to clarify the information provided to them and ask additional questions. Two of the parties invited to these meetings, including the highest bidder at the initial stage, declined to participate. These meetings began on April 29, 2003 and concluded on May 8, 2003. During each of these meetings, the Company's management provided the parties with a detailed overview of its business and presented certain additional information on the Lawsuit consistent with applicable protective orders.

        In early May 2003, the Company's management and William Blair invited the parties to participate in follow-up diligence calls with respect to the Company's business. Four parties requested these follow-up conference calls, including Symphony. After this additional diligence, William Blair asked the eight parties that met with management to submit revised indications of interest by May 12, 2003. The revised indications of interest were required to include the following information: an indication of value for the Company including the Lawsuit, an indication of value ascribed specifically to the Lawsuit and a mark-up of the deal protection, conditions to closing and termination provisions included in a draft merger agreement furnished by the Company. William Blair informed the parties that the Board of Directors was very focused on maximizing the overall value of any transaction, including maximizing the participation by the existing Company stockholders in any recovery from the Lawsuit.

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        On May 13, 2003, the Board of Directors held a telephonic meeting with its legal and financial advisors and with the Company's trial counsel in the Lawsuit. The Board of Directors reviewed the history and status of the Lawsuit and the relative benefits of potential mechanisms for sharing Lawsuit proceeds.

        At meetings held on May 14 and May 15 and telephonically on May 20, 2003, the Board of Directors reviewed with its legal and financial advisors the status of the strategic alternatives review process, including the revised indications of interest received from eight parties. To varying degrees, the parties indicated a willingness to have the existing stockholders retain an interest in a portion of the Lawsuit proceeds. However, no party that proposed to acquire all of the Company would agree to allow the Company's existing stockholders to retain 100% of the Lawsuit proceeds or full control over prosecution of the Lawsuit. Seven indications of interest valued the entire Company (including the right to 100% of the Lawsuit) from $78 million to $130 million. Symphony's indication of interest proposed an aggregate cash purchase price of $110 million for the entire Company, including 100% of the Lawsuit, or a cash purchase price ranging from $88 million to $93.5 million and a 50% interest in proceeds from the Lawsuit. The party providing an expression of interest valuing the entire Company and 100% of the Lawsuit between $110 million to $130 million later revised its indication of interest to $80 million for the entire Company and at least a 51% interest in the Lawsuit (including a $10 million commitment to fund the Lawsuit). One party proposed to acquire only the Panel, Testing and Analytics business for $85 million to $100 million, provided that there was assurance that the Company's other business lines would continue to provide data to the divested line. Due to the expense and difficulties associated with separating the Company's business lines, the Board of Directors did not consider a stand-alone sale of the Panel, Testing and Analytics business to be a viable alternative. At these meetings, the Company's management and William Blair updated the Board of Directors regarding the results of their efforts to pursue other alternative transactions with potential strategic and technology partners, none of which resulted in a firm indication of interest.

        Based on the revised indications, the Board of Directors eliminated all but four parties, each of whom was interested in acquiring the Company as a whole. The eliminated parties had indications of interest valuing the entire Company (including the Lawsuit) from $78 million to $90 million. Of the four remaining indications of interest, the Board of Directors considered Symphony's indication of interest superior because:

    its cash offer price, together with the perceived value to the Company's stockholders of sharing in a substantial portion of the potential proceeds of the Lawsuit, reflected the highest overall value relative to the other indications of interest;

    it was based on more thorough diligence than the other indications of interest;

    the indication of interest included a full mark-up of the deal protection, conditions to closing and termination provisions proposed by the Company in its draft merger agreement; and

    Symphony indicated a desire to execute definitive agreements within two weeks.

        The Board of Directors directed management and William Blair to invite Symphony into the final round and to conduct further due diligence, but not to grant it exclusivity, as Symphony had again requested. The Board of Directors also instructed William Blair to continue discussions with the next three most attractive bidders in order to clarify elements of their indications of interest further. The Board of Directors decided that, if Symphony sufficiently improved its offer, the Company would grant it the opportunity for expedited additional due diligence. On May 16, 2003, Symphony orally submitted a revised indication of interest that would provide $105 million cash consideration to the stockholders, give the stockholders a 50% interest in proceeds from the Lawsuit and provide $10 million to fund the Lawsuit. Following further negotiations with the Board of Directors and Company management, Symphony subsequently increased the cash portion of its indication of interest to $107.5 million. However, it was unwilling to reduce its stake in the proceeds of the Lawsuit below 50%.

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        Upon consultation with the Company's legal advisors and management, the Board of Directors determined that a contingent value rights arrangement would be preferable to a liquidating trust arrangement, for the principal reason that a liquidating trust arrangement would likely require a valuation of the Lawsuit for federal tax purposes that would result in tax liability to the Company's stockholders at closing and that would likely differ from the final judicial determination of the Company's claims in the Lawsuit. The Board of Directors believed that an unregistered, non-transferable security was an appropriate mechanism because they were concerned that a trading market in the CVRs might materially harm the Company and its stockholders in the Lawsuit and because no party would consider proceeding with a transaction structure in which a registered security that was tied to the Lawsuit was issued.

        On May 19, 2003, the Company and Symphony agreed to negotiate on a non-exclusive basis for a two-week period. The Company agreed to reimburse Symphony for up to $750,000 of its out-of-pocket fees and expenses if the Company unilaterally terminated negotiations or failed to negotiate in good faith, or if the Company's management and Symphony reached agreement on the material terms of a transaction which the Company's Board of Directors did not approve.

        During this two-week period, Symphony conducted substantial due diligence and began negotiating the definitive Merger Agreement and related documents. During negotiations, Symphony and the Company agreed that the mechanism for sharing any potential recovery from the Lawsuit would be a contingent value rights arrangement. The parties agreed that the CVRs would not be transferable, except by will, upon death, or by operation of law, and would not be registered securities for which a public market would exist after consummation of the transaction. Management and William Blair also clarified with the respective third parties certain elements of the other three final indications of interest with respect to (i) their proposed value assuming the maximum amount of the Lawsuit proceeds they would be willing to share with the Company's stockholders, (ii) their willingness to proceed on a non-exclusive basis and (iii) their contemplated capital structure to finance the transaction. None of these parties indicated a willingness to issue any form of tradeable security as a vehicle for participation in a recovery of proceeds from the Lawsuit. During the process of clarifying the other three indications of interest, one party indicated a willingness to consider permitting the Company's existing stockholders to retain 100% of the Lawsuit proceeds. However, the Board of Directors determined that the cash component of the purchase price under this party's indication of interest was substantially inferior to the Symphony indication of interest.

        On May 21, 2003, the U.S. District Court set a trial date of September 20, 2004 for the Lawsuit. The price per share of the Company Common Stock increased from $2.80 on May 20, 2003 to $3.48 on May 22, 2003.

        On May 27, 2003, the Board of Directors again met to discuss, in general, the Company's strategic alternatives and, in particular, Symphony's revised indication of interest. On May 30, 2003, the Board of Directors met to discuss the current top four indications of interest. The Board of Directors directed management to continue its agreement with Symphony to negotiate on a non-exclusive basis until June 12, 2003. The Board of Directors also discussed in detail the remaining three indications of interest and instructed management and William Blair to pursue discussions with the next highest bidder (the "Second Party"). The Company then informed the Second Party that it had been selected to move into the final round of due diligence and negotiations, but that it would have to improve its offer if it wished to be competitive with the leading bidder. On June 4, 2003, another of the parties that had provided one of the top four indications of interest (the "Third Party") submitted a revised indication of interest for $102.5 million in cash (after providing $10 million to fund the Lawsuit) for the business and 50% of the proceeds from the Lawsuit. On June 5, 2003, the Company and the Second Party held a conference call to discuss the business and the Lawsuit. On June 9, 2003, the Second Party informed the Company that it was not willing to increase its offer.

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        Throughout June 2003, the Board of Directors met and reviewed updates with William Blair and management regarding the revised indications of interest. On June 11, 2003, following completion of its due diligence, Symphony submitted a revised indication of interest of $97.5 million cash consideration to the stockholders, 50% interest in proceeds from the Lawsuit and $10 million to fund the Lawsuit. On June 13 and 14, 2003, the Company, Symphony and their advisors continued to negotiate, resulting in a revised Symphony indication of interest to acquire the Company for $100 million in cash, a 60% participation by the Company's stockholders in the net proceeds of the Lawsuit and $10 million to fund the Lawsuit. The Board of Directors determined that the total value of Symphony's revised indication of interest was superior to that of the Second Party and the Third Party.

        On June 17, 2003, the Board of Directors and its advisors held a telephonic meeting to review the terms of the draft Symphony agreements. Representatives from William Blair reviewed with the Board of Directors the process pursued to find the most attractive strategic alternative for the Company's stockholders, the value of Symphony's most recent indication of interest, the Company Common Stock price and volume data and various analyses of the Company's historical and projected operating performance. At this meeting, representatives from Winston & Strawn, the Company's special outside legal counsel, also summarized for the Board of Directors the material provisions of the draft Merger Agreement and CVR Agreement as negotiated to that point. In addition, the Winston & Strawn representatives discussed the Board of Directors' fiduciary duties under Delaware law in the context of a change in control transaction.

        Negotiations and due diligence continued with Symphony during the next two weeks. Due to concerns that the Company might not successfully reach an acceptable definitive Merger Agreement and/or CVR Agreement with Symphony, the Board of Directors directed management and William Blair to invite the Third Party to the Company's offices for additional management meetings. The Third Party conducted additional due diligence on June 25-27. On June 27, the Board of Directors held a telephonic meeting at which representatives of William Blair and Winston & Strawn updated the Board of Directors on the course of negotiations regarding the proposed Symphony transaction. On June 29, 2003, the Board of Directors held a telephonic meeting at which it reviewed the final drafts of the Merger Agreement and CVR Agreement, reviewed William Blair's updated financial analyses with representatives of William Blair, asked questions and received answers from its legal and financial advisors, received the oral opinion of William Blair as to the fairness to the Company's stockholders, from a financial point of view, of the consideration to be received by such stockholders in the proposed transaction. The Board of Directors then unanimously approved the transaction with Symphony. In addition, on June 29, the Third Party informed William Blair that it was not going to be able to complete its due diligence in a timely manner.

Reasons for the Recommendation.

        In reaching its determination that the Company's stockholders accept the Offer and tender their shares of Company Common Stock pursuant to the Offer, the Board of Directors consulted with its executive officers and with its financial and legal advisors and considered the following factors:

    The evaluation by the Board of Directors of a wide range of strategic alternatives. The following paragraphs describe the factors evaluated by the Board of Directors with respect to each of these alternatives and the reasons for the Board of Directors' rejection of these alternatives.

    Continuing to follow the Company's business plan as a stand-alone public company.    In evaluating the merits of continuing to follow the Company's business plan, the Board of Directors considered the historical results of operations, financial condition, assets, liabilities, business strategy and prospects of the Company, the nature of the industry in which the Company competes, and the impact on the Company of the anti-competitive practices engaged in by the Company's principal competitor. The Board of Directors also considered the opportunities and risks associated with continuing as an independent

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        company, including operating risks and uncertainties relating to customer renewals and new customer engagements, the high fixed cost nature of the retail tracking business, the Company's ability to successfully implement its cost containment efforts, client acceptance of new products and services, potential loss or increased cost of ongoing supply of point-of-sale data from cooperating retailers, changes in client spending for the non-contractual services the Company offers, the success of technology alternatives currently being developed or implemented by the Company to provide access to Company data, future technology changes that could impact Company services, possible material changes in partnerships and strategic alliances, foreign currency exchange rates and possible adverse impacts on liquidity resulting from restrictive financial covenants in the Company's credit agreements. The Board of Directors also considered the effect on the Company's business of Procter & Gamble's decision not to renew its U.S. retail tracking business with the Company, including adverse client perception. The Board of Directors concluded that, from the perspective of the holders of the Company Common Stock, it was preferable to the stockholders that the Company enter into the Merger Agreement providing for a price of $3.30 per share in cash plus one CVR, rather than the stockholders continuing to own the Company Common Stock, the value of which would be subject to each of these risks.

          In evaluating the merits of continuing as a stand-alone entity, the Board of Directors also considered the Company's ability to differentiate itself competitively against a dominant competitor with significantly greater financial resources and a history of engaging in anti-competitive practices directed at the Company.

          In arriving at its recommendation, the Board of Directors also considered the Company's recent financial results and the prospects for meaningfully improving the Company's operating performance in light of the risks discussed above. It was observed that during the five years ending December 31, 2002, the Company's revenues had fluctuated from year to year and had grown at a relatively modest compound annual growth rate of 2.1%. While the Company generated an operating profit of $7.0 million in 1998, the Company incurred operating losses each year between 1999 and 2002, due in part to recurring special charges in each of these four years which averaged $17.2 million. During this period the operating profit margin was 1.4% in 1998 and the operating loss margin was - -6.0%, -2.3%, -0.9% and -1.6% in 1999 through 2002, respectively. During this period, the Company was able to offset the impact of operating losses on its cash flow with substantial reductions in net working capital. Between 1998 and 2002, the combination of these operating losses and the Company's investment in capital expenditures (which averaged $23.9 million during these five years), resulted in a reduction in net cash during this period. Between 1998 and 2002, cash and cash equivalents decreased from $11.1 million in 1998 to $9.0 million in 2002, and total debt increased from $4.6 million in 1998 to $8.1 million in 2002.

      Raising additional capital through a public or private offering of debt or equity securities.    In evaluating a possible financing transaction, the Board of Directors considered the risks of remaining independent, as described above, and in addition, the amount and pricing of financing that could be raised given market conditions and the Company's market capitalization, financial performance and current capital structure, the impact of the Lawsuit on a financing transaction, and the consequent dilutive effect a financing transaction would likely have on the Company's stockholders.

      A partnership, joint venture or minority investment.    In evaluating a transaction of this type, the Board of Directors considered both the risks of remaining independent, as described above, and the fact that discussions among the Company's management, its financial advisors and several third parties did not result in any firm indications of interest with respect to a partnership, joint venture or minority investment.

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      A sale of parts of the Company.    In evaluating a transaction of this type, the Board of Directors considered both the risks of remaining independent, as described above, and the fact that discussions among the Company's management, its financial advisors and several third parties did not result in any firm indications of interest for a sale of a portion of the Company that the Board found to be more attractive than a sale of the entire Company.

        For these reasons, the Board of Directors decided that a sale of the Company was a more attractive alternative than the other options considered by the Company and noted above.

    Extensive market checking process. In a publicly announced process, William Blair contacted, or was contacted by, 85 parties to determine or express their interest in pursuing a transaction with the Company.

    Opinion of William Blair. William Blair delivered an opinion to the Board of Directors, dated June 29, 2003, as to the fairness of the consideration to be received in the Offer and the Merger by the Company's stockholders from a financial point of view. The full text of the William Blair written opinion dated June 29, 2003, which sets forth the assumptions made, matters considered and limitations on the review undertaken by William Blair, is attached hereto as Annex A and is incorporated herein by reference. William Blair's opinion is directed only to the fairness, from a financial point of view, of the consideration to be received in the Offer and the Merger by the Company's stockholders and is not intended to constitute, and does not constitute, a recommendation as to whether any stockholder should tender shares of Company Common Stock in the Offer or as to any other matters relating to the Offer or the Merger. STOCKHOLDERS ARE URGED TO READ WILLIAM BLAIR'S OPINION CAREFULLY AND IN ITS ENTIRETY.

    Offer Reflects Substantial Premium. The Cash Consideration and CVR per share offered pursuant to the Offer and the Merger represented a substantial premium to the range of closing stock prices between December 13, 2002 (the date the Company announced that it had been informed that Procter & Gamble would not be renewing its U.S. retail tracking business with the Company) and April 29, 2003 (the date of the first announcement of favorable rulings related to the Lawsuit). During this period, the closing stock prices ranged between $1.14 per share and $2.15 per share and had an average closing stock price of $1.48 per share. The Offer price of $3.30 per share represents a 112% premium to the closing stock price on April 29, 2003 of $1.56 per share, a 53% premium to the high closing stock price of $2.15 per share during this period and a 123% premium to the average closing stock price during this period of $1.48 per share. Between April 29, 2003 and June 27, 2003 the Company's closing stock price increased from $1.56 per share to $2.98 per share and reached a high closing stock price of $3.60 per share on June 4, 2003. During this period the only material information disclosed by the Company as filed on Form 8-K related to two press releases involving favorable developments with respect to the Lawsuit. Through the CVR structure, the Company's stockholders are able to participate in a substantial portion of the benefit, if any, from a favorable outcome of the Lawsuit. The Board believed that the Offer represented both the highest cash price and the largest percentage of the Lawsuit that was available to the Company's stockholders.

    Terms and Conditions of the Merger Agreement. The Board of Directors considered in particular the termination provisions of the Merger Agreement, the "no solicitation" provisions of the Merger Agreement and the negotiated termination fee. As discussed below, the Merger Agreement contains provisions that would allow the Board of Directors to consider and, under certain circumstances, pursue an unsolicited alternative proposal from a third party. Also, the Merger Agreement permits the Company, subject to certain conditions, to terminate the Merger Agreement if a superior proposal is received from a third party and not matched by Parent;

14


    Financial Resources of Parent. The Board of Directors considered Parent's financial ability to complete the Offer and the Merger, including:

    Parent's representation that it will have sufficient cash on hand to consummate the Offer and to pay the Merger Consideration;

    The absence of any financing condition to the transactions; and

    The nature of Parent's funding commitments from Symphony and entities affiliated with Tennenbaum Capital Partners, LLC under the Commitment Letters (as defined in the Merger Agreement) and the Board of Directors' belief as to the strength of such commitments.

    Continued Participation in Lawsuit. Through the CVRs, the Company's stockholders will retain the opportunity to receive additional cash payments in the event that the Company's claims in the Lawsuit are successful. Moreover, Parent has committed to fund $10 million of costs associated with the prosecution of the Lawsuit; and

    Highest Overall Value. Symphony's cash offer price, together with the perceived value to the Company's stockholders of sharing in 60% of the potential proceeds of the Lawsuit, reflected the highest overall value relative to the other indications of interest.

        The Board of Directors also considered a variety of risks and other potentially negative factors concerning the Merger. These factors included the following:

    The consideration to be received by the Company's stockholders will be taxable to them;

    The final value, if any, of the CVRs will not be known for some time;

    The CVRs represent a contingent contractual payment obligation of Parent and the Company and are subject to Parent's and the Company's continued creditworthiness and viability as a going concern;

    The $10 million provided in the transaction to fund the Lawsuit may not be sufficient to adjudicate the claims in the Lawsuit fully, and Parent is under no obligation to provide additional amounts in prosecution of the Lawsuit;

    Following the Merger, the Company's stockholders will cease to participate in any future earnings growth of the Company or benefit from any increase in the value of the Company; and

    The CVRs are not transferable, except by will, upon death, or by operation of law, and they will not be registered securities for which a public market would exist after consummation of the Offer and the Merger.

        When considering that the CVRs would not be transferable, the Board of Directors took into account the following additional factors:

    The Board of Directors' concern that permitting a trading market in the CVRs might harm the Company and its stockholders in the Lawsuit, particularly in light of the fact that applicable securities laws would likely require frequent information disclosures that could interfere with the Company's conduct of the Lawsuit;

    The fact that no prospective bidder indicated a willingness to proceed with a transaction in which a registered security tied to the Lawsuit was issued; and

    The Board of Directors' concern that Nielsen could acquire CVRs if they were tradeable.

        In considering the fairness of the Merger, the Board of Directors did not consider the Company's net book value given that more than 80% of the Company's net book value is represented by intangible assets, primarily in the form of deferred data costs. The Board of Directors also did not consider liquidation value because they believed liquidation value was not a meaningful indicator of the Company's value as a going concern.

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        The foregoing discussion includes all of the material factors considered by the Board of Directors in reaching its conclusions and recommendations, but is not meant to be exhaustive. In view of the variety of factors considered in reaching its determination, the Board of Directors did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its conclusions and recommendations. In addition, individual members of the Board of Directors may have given different weights to different factors.

Intent to Tender.

        To the knowledge of the Company, as of the date of this Statement, each executive officer and director of the Company currently intends to tender in the Offer all Company Common Stock that he or she owns of record or beneficially.

Concerning the Lawsuit.

        On July 29, 1996, the Company filed the Lawsuit. In the Lawsuit, the Company alleges that Defendants violated Sections 1 and 2 of the Sherman Act, 15 U.S.C. Sections 1 and 2, and the common law by engaging in a series of unlawful practices through which the Company claims that Defendants attempted to regain monopoly power in the U.S. market for retail tracking services and exclude competition from 30 markets outside the U.S., where Nielsen dominated. Through the Lawsuit, the Company seeks to enjoin such practices and to recover damages in excess of $350 million, prior to trebling. The Company demanded a trial by jury; the case has been assigned to the Honorable Louis L. Stanton.

        It is the Company's position that it continues to suffer damages to this day as a result of the Defendants' unlawful practices which were aimed at undermining competition by financially crippling the Company.

    Defendants' Practices

        The Company asserts that for over 60 years, Nielsen had dominated the markets for retail tracking services, both within and outside the U.S., through its manual, audit-based services. In 1986, the Company revolutionized the U.S. market with the introduction of its retail tracking service known as "InfoScan"—the world's first national retail tracking service based on scanner data. Due to the success of its innovative InfoScan service, by 1992, the Company alleges that it gained a significant share of the U.S. market. At the same time, the Company began to undertake efforts to expand and export its services to new geographic markets in Western Europe and Canada, where, the Company asserts, Nielsen continued to exercise monopoly power.

        Faced with a threat to Nielsen's foreign monopolies and the loss of market share in the U.S., the Company claims that Defendants developed and implemented a plan to undermine the Company's ability to compete both within the U.S. and abroad. To accomplish this objective, the Company alleges that Defendants engaged in the following coordinated anticompetitive practices, among others: 1) unlawfully tying/bundling services in markets in which Defendants had monopoly power with services in markets in which Nielsen competed with the Company; 2) entering into exclusionary contracts with retailers in several countries in order to deny the Company's access to the sales data necessary to provide retail tracking services or to artificially raise the cost of that data; 3) predatory pricing; 4) acquiring foreign market competitors with the intent of impeding the Company's efforts at geographic expansion; 5) tortiously interfering with the Company's contracts and relationship with clients, joint venture partners and other market research companies; 6) disparaging the Company to financial analysts and clients; and 7) denying the Company access to the capital markets necessary for it to compete.

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    The Government Investigations

        When Defendants refused to end these practices, the Company alerted antitrust regulatory authorities in Canada, the U.S. and Europe. First, the Company complained to the Canadian Director of Investigation and Research (the "Canadian Director") concerning exclusive data contracts with retailers and long-term contracts with manufacturers that Nielsen had executed in Canada. The Company claimed that such contracts prevented the Company's entry into the Canadian market. The Canadian Director conducted an investigation and on April 5, 1994, filed an application against Nielsen's practices before the Canadian Competition Tribunal (the "Tribunal"). On August 30, 1995, the Tribunal issued an order concluding that Nielsen, the sole supplier of retail tracking services in Canada, had unlawfully excluded the Company from the market. The Tribunal ordered that Nielsen could not enforce any of its anticompetitive contracts with retailers or manufacturers.

        The Company also complained to the United States Department of Justice—Antitrust Division (the "DOJ") in July 1994 and to the European Commission—Directorate General IV (the "EC") in September 1994, concerning Defendants' bundling practices with multi-national manufacturers and exclusionary data contracts with retailers in Europe. The DOJ and the EC entered into a cooperation agreement, with the EC ultimately taking primary responsibility for the investigation.

        On May 7, 1996, following an 18-month investigation, the EC initiated formal proceedings against Nielsen, the dominant provider of retail tracking services in Europe, and adopted a Statement of Objections (the "SOO"). The EC found that Nielsen had engaged in abusive practices to exclude the Company from European markets for retail tracking services. On November 28, 1996, Nielsen entered into a formal Undertaking with the EC in which it agreed to abandon all the abusive practices found by the Commission. Because Nielsen entered into the Undertaking, the DOJ closed its investigation.

    U.S. Legal Proceedings

        On July 27, 1996, the Company filed its complaint, which asserts the following claims: Sherman Act Section 1 Violation—Per Se Tying (Count I); Sherman Act Section 1 Violation—Unreasonable Restraints of Trade (Count II); Sherman Act Section 2 Violation—Monopolization of the Export Markets (Count III); Sherman Act Section 2 Violation—Attempt to Monopolize the Export Markets (Count IV); Sherman Act Section 2 Violation—Attempt to Monopolize the United States Market (Count V); Sherman Act Section 2 Violation—Monopoly Leveraging (Count VI); Tortious Interference with Contract (Count VII); Tortious Interference with Prospective Business Relationship (Count VIII).

        During the course of the proceedings, the Court has made the following non-discovery related rulings, among others:

    On May 6, 1997, the Court denied Defendants' motion to dismiss the complaint, with the exception of the Company's claim for attempted monopolization of the U.S. market. With leave from the Court, the Company filed an amended complaint on July 7, 1997, re-pleading this claim. On December 1, 1997, the Court denied Defendants' motion to dismiss the Company's amended claim for attempted monopolization of the U.S. market.

    On December 7, 1998, the Court ruled that Defendants were collaterally estopped from denying the findings and conclusions of the Canadian Tribunal. The Court also ruled that the SOO set forth factual findings resulting from an investigation made pursuant to authority granted by law and, as a result, would be received in evidence pursuant to Federal Rule of Evidence 803(8)(c).

    On July 12, 2000, the Court granted Defendants' motion for partial summary judgment and dismissed the Company's claims of injury suffered from Defendants' activities in foreign markets where the Company operates through subsidiaries or companies owned by joint ventures, or "relationships' with local companies for lack of standing (the "July 12 Order").

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    On February 6, 2001, the Court denied the Company's motion to substitute its subsidiaries as plaintiffs for those claims dismissed by the July 12 Order, on the ground that the Court lacked subject matter jurisdiction over the subsidiaries' claims (the "February 6 Order"). The Court also clarified that its July 12 Order prohibited the Company from suing to recover damages for weakening of its competitive position in the United States because of reduced revenue from its foreign subsidiaries. The Court also clarified that the July 12 Order did not dismiss the Company's claims in markets that the Company was prepared to or attempted to enter, but from which it claimed it was excluded. The Company alleged that it was completely excluded and never operated a service either directly or through a subsidiary in 22 of the 30 foreign markets identified by the Company in its Amended Complaint.

    On April 28, 2003, the Court ruled that the Company had standing to assert its claims for injury in the U.S. as a result of Defendants' foreign conduct that drained the Company of U.S. resources necessary to compete in the domestic market, as set forth in the Company's letters to the Court dated November 15 and December 19, 2002 (the "April 28 Order"). The Court also denied Defendants' motion for summary judgment seeking to dismiss the Company's claims of injury in the 22 foreign markets not covered by the July 12 and February 6 Orders.

    On May 21, 2003, the Court entered an order setting a trial date of September 20, 2004.

    Damages/Fees

        The Company currently seeks damages in excess of $350 million for its injury in the U.S. market alone. During the period January 1, 2001 through December 31, 2002, the Company's fees and costs in connection with the matter averaged approximately $3.0 million per year. The Company currently has a partial contingency fee arrangement with one of the law firms representing it in the Lawsuit, under which the Company has agreed, among other things, to pay such firm 5% of the value of what the Company recovers from Defendants as a result of a judgment rendered against Defendants or as a result of a settlement following the commencement of trial.

        The Company does not make any representation as to the amount of any potential recovery from the Lawsuit or when any such recovery may be obtained.


Item 5.
Person/Assets, Retained, Employed, Compensated or Used.

        Neither the Company nor any person acting on its behalf has employed, retained or compensated, or currently intends to employ, retain or compensate, any person to make solicitations or recommendations to the stockholders of the Company on its behalf with respect to the Offer or the Merger.

        The Company retained William Blair as its financial advisor in connection with the Offer and the Merger. Pursuant to the terms of William Blair's engagement, the Company has agreed to pay William Blair for its financial advisory services customary fees upon consummation of the Offer and the Merger based on the total consideration paid by Parent and Purchaser in the Offer and the Merger. Under the terms of its engagement, William Blair will be entitled to receive, in addition to its other fees, an amount equal to 0.84375% of any amount payable to the stockholders of the Company under the CVR Agreement. The Company has also agreed to reimburse William Blair for certain out-of-pocket expenses, including fees and expenses of counsel, it incurs in connection with its engagement and to indemnify William Blair against certain liabilities in connection with its engagement, including liabilities under U.S. federal securities laws.

        William Blair is a nationally recognized firm and is regularly engaged in the valuation of businesses and securities in connection with merger transactions and other types of strategic combinations and acquisitions. In the ordinary course of its business, William Blair and its affiliates may actively trade

18



securities of the Company for their own account and for the accounts of their customers and, accordingly, may hold a long or short position in such securities.


Item 6. Interest in Securities of the Subject Company.

        Except for the transactions described in this Item 6 and for regular purchases made pursuant to the Company's 401(k) Retirement Savings Plan and the Company's 2000 Employee Stock Purchase Plan, no transactions in shares of the Company Common Stock have been effected by the Company or, to the Company's knowledge, by any executive officer, director, affiliate or subsidiary of the Company during the last 60 days.

        Under the terms of the Company's 1996 Stock Plan for Non-Employee Directors in Lieu of Cash Retainer, each non-employee director of the Company is paid quarterly in shares of Company Common Stock in lieu of 75% of the annual cash retainer payable for his or her services on the Board of Directors. Each quarterly payment is equal to $3,937.50 and is based on the closing price of the Company Common Stock on May 1, August 1 and November 1 of the applicable year and February 1 of the following year. On June 19, 2003, an aggregate of 13,288 shares of Company Common Stock were issued by the Company to the non-employee members of the Board of Directors based on the closing price of $2.37 per share of Company Common Stock on May 1, 2003 (rounded down from $2.375 per share and calculated in accordance with the terms of the Plan) for the first quarterly payment of 2003.

        Under the terms of the Merger Agreement, the Company is required to allocate all unallocated shares of Company Common Stock in the Company's Defined Contribution Plan. Consistent with this requirement, on July 2, 2003, the Board of Directors allocated 14,750 previously unallocated shares of Company Common Stock in the Company's Defined Contribution Plan to an account in the name of the Company's Executive Vice President, General Counsel and Corporate Secretary, Monica M. Weed, under the Defined Contribution Plan.


Item 7. Purposes of the Transaction and Plans or Proposals.

        Except as described or referred to in this Statement, to the Company's knowledge, no negotiation is being undertaken or engaged in by the Company in response to the Offer which relates to or would result in (i) a tender offer or other acquisition of the shares of the Company Common Stock by the Company, any of its subsidiaries, or any other person; (ii) an extraordinary transaction, such as a merger, reorganization or liquidation, involving the Company or any of its subsidiaries; (iii) a purchase, sale or transfer of a material amount of assets of the Company or any of its subsidiaries; or (iv) any material change in the present dividend rate or policy, or indebtedness or capitalization of the Company. Additionally, the information set forth in "The Offer—Section 12—Purpose of the Offer; Plans for the Company; Stockholder Approval; Appraisal Rights; The Merger Agreement; the CVR Agreement" in the Offer to Purchase is incorporated herein by reference.

        Except as described or referred to in this Statement, to the Company's knowledge, there are no transactions, resolutions of the Board of Directors, agreements in principle or signed contracts entered into in response to the Offer that would relate to one or more of the matters referred to above in this Item 7.


Item 8. Additional Information.

        The Information Statement pursuant to Rule 14f-1 attached hereto as Annex B is being furnished to the stockholders of the Company in connection with the possible designation by Parent, pursuant to the Merger Agreement, of certain persons to be appointed to the Board of Directors other than at a meeting of the Company's stockholders, and such information is incorporated herein by reference.

        In addition, the information contained in the Offer to Purchase is incorporated herein by reference.

19



Item 9. Exhibits.

Exhibit No.

  Description
(a)(1)*+   Offer to Purchase, dated July 14, 2003.
(a)(2)*+   Letter of Transmittal.
(a)(3)+   Letter from the Chairman, Chief Executive Officer and President of Information Resources, Inc. to the stockholders of Information Resources, Inc.
(a)(4)*   Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.
(a)(5)*   Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.
(a)(6)*   Summary Advertisement dated July 14, 2003.
(a)(7)   Text of press release issued by Information Resources, Inc., Symphony Technology II-A, L.P. and Tennenbaum Capital Partners, LLC dated June 29, 2003 (incorporated by reference to the Schedule 14D-9-C of Information Resources, Inc. filed with the Securities and Exchange Commission of June 30, 2003).
(a)(8)+   Opinion of William Blair & Company, L.L.C. dated June 29, 2003 (attached hereto as Annex A).
(e)(1)*   Agreement and Plan of Merger, dated as of June 29, 2003, by and among Gingko Corporation, Gingko Acquisition Corp. and the Company.
(e)(2)*   Form of Contingent Value Rights Agreement by and among Information Resources, Inc., Gingko Corporation, Gingko Acquisition Corp. and the Rights Agents (as defined therein).
(e)(3)+   Information Statement of Information Resources, Inc. dated July 14, 2003 (attached hereto as Annex B).
(e)(4)   Form of Information Resources, Inc. Severance Protection Agreement.
(e)(5)   Form of Employment Agreement (incorporated by reference to Exhibit 10.1 to the Information Resources, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2000).
(e)(6)   Form of Information Resources, Inc. Directorship Agreement (incorporated by reference to Exhibit 10(ww) to the Information Resources, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2002).
(e)(7)   Form of Information Resources, Inc. Officership Agreement.
(e)(8)   Amendment Two to Employment Agreement dated June 29, 2003 between Information Resources, Inc. and Joseph P. Durrett, effective as of May 19, 2000.

*
Incorporated by reference to the Schedule TO filed with the Securities and Exchange Commission by Gingko Corporation, Gingko Acquisition Corp., Symphony Technology II-A, L.P. and Tennenbaum & Co., LLC on July 14, 2003.

+
Included in copies mailed to holders of Company Common Stock.

20



SIGNATURE

        After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

    INFORMATION RESOURCES, INC.

Dated: July 14, 2003

 

By:

/s/ JOSEPH P. DURRETT

    Name: Joseph P. Durrett
Title: Chairman, Chief Executive Officer and President

21



Annex A

LOGO

June 29, 2003

Board of Directors
Information Resources, Inc.
150 North Clinton Street
Chicago, IL 60661

Lady and Gentlemen:

You have requested our opinion as to the fairness, from a financial point of view, to the holders of the outstanding shares of common stock (collectively the "Stockholders") of Information Resources, Inc. (the "Company") of the consideration (the "Merger Consideration") proposed to be paid to the Stockholders pursuant to the Agreement and Plan of Merger (the "Merger Agreement") to be entered into by and among Gingko Corporation ("Parent"), Gingko Acquisition Corp., a wholly owned subsidiary of Parent ("Merger Sub"), and the Company. The Merger Consideration is $3.30 per share in cash and one CVR per share as defined in the Contingent Value Rights Agreement (the "CVR Agreement"). Pursuant to the terms of and subject to the conditions set forth in the Merger Agreement, Merger Sub will be merged with and into the Company (the "Merger"), and each share of common stock of the Company, $0.01 par value per share, will be converted into the right to receive the Merger Consideration upon consummation of the Merger.

In connection with our review of the proposed Merger and the preparation of our opinion herein, we have examined: (a) a draft of the Merger Agreement dated June 28, 2003; (b) a draft of the CVR Agreement dated June 28, 2003; (c) certain audited historical financial statements of the Company for each of the three years ended December 31, 2000, 2001 and 2002; (d) the unaudited financial statements of the Company for the three months ended March 31, 2003; (e) certain internal business, operating and financial information and forecasts of the Company (the "Forecasts"), prepared by the senior management of the Company; (f) information regarding publicly available financial terms of certain other business combinations we deemed relevant; (g) the financial position and operating results of the Company compared with those of certain other publicly traded companies we deemed relevant; (h) current and historical market prices and trading volumes of the common stock of the Company; (i) certain other publicly available information on the Company; and (j) information regarding the background and status of antitrust litigation filed by the Company against A.C. Nielsen Co. (now owned by VNU, N.V.), The Dun & Bradstreet Corp. and IMS International, Inc. (the "ACN Litigation"). We have also held discussions with members of the senior management of the Company and Parent and its affiliates, respectively, to discuss the foregoing, have considered other matters that we have deemed relevant to our inquiry and have taken into account such accepted financial and investment banking procedures and considerations as we have deemed relevant. In connection with our engagement, we were requested to approach, and we have held discussions with, various third parties regarding their interest in a possible acquisition of the Company.

In rendering our opinion, we have assumed and relied, without independent verification, upon the accuracy and completeness of all the information examined by or otherwise reviewed or discussed with us for purposes of this opinion including, without limitation, the Forecasts provided by senior management. We have not made or obtained an independent valuation or appraisal of the assets,

   

LOGO

A-1


liabilities or solvency of the Company or Parent. We have been advised by the senior management of the Company that the Forecasts examined by us have been reasonably prepared on good faith bases reflecting the best currently available estimates and judgments of the senior management of the Company. In that regard, we have assumed, with your consent, that (i) the Forecasts will be achieved in the amounts and at the times contemplated thereby and (ii) all material assets and liabilities (contingent or otherwise) of the Company are as set forth in the Company's financial statements or other information made available to us. We express no opinion with respect to the Forecasts or the estimates and judgments on which they are based. We have not been requested, and we have not undertaken, to make any valuation of the ACN Litigation to the Company, and we express no opinion with respect thereto.

Our opinion herein is based upon economic, market, financial and other conditions existing on, and other information disclosed to us as of, the date of this opinion. It should be understood that, although subsequent developments may affect this opinion, we do not have any obligation to update, revise or reaffirm this opinion. We have further assumed that the Merger will have the tax consequences described in the Merger Agreement. We have relied as to all legal matters on advice of counsel to the Company, and have assumed, with your consent, that the Merger will be consummated on the terms described in the Merger Agreement, without any waiver of any material terms or conditions by the Company. In addition, we have assumed, with your consent, that the definitive Merger Agreement and the definitive CVR Agreement will not materially vary from the drafts thereof reviewed by us.

William Blair & Company has been engaged in the investment banking business since 1935. We continually undertake the valuation of investment securities in connection with public offerings, private placements, business combinations, estate and gift tax valuations and similar transactions. In the ordinary course of our business, we may from time to time trade the securities of the Company for our own account and for the accounts of customers, and accordingly may at any time hold a long or short position in such securities. We have acted as the investment banker to the Company in connection with the Merger and will receive a fee from the Company for our services, a significant portion of which is contingent upon consummation of the Merger. In addition, the Company has agreed to indemnify us against certain liabilities arising out of our engagement.

We are expressing no opinion herein as to the price at which the common stock of the Company will trade at any future time or as to the effect of the Merger on the trading price of the common stock of the Company. Such trading price may be affected by a number of factors, including but not limited to (i) the occurrence of positive or adverse developments with respect to the ACN Litigation, (ii) changes in prevailing interest rates and other factors which generally influence the price of securities, (iii) adverse changes in the current capital markets, (iv) the occurrence of adverse changes in the financial condition, business, assets, results of operations or prospects of the Company or of Parent or in their product market, (v) any necessary actions by, or restrictions of, federal, state or other governmental agencies or regulatory authorities, and (vi) the timely completion of the Merger on terms and conditions that are acceptable to all parties at interest.

Our investment banking services and our opinion were provided for the use and benefit of the Board of Directors of the Company in connection with its consideration of the transaction contemplated by the Merger Agreement. Our opinion is limited to the fairness, from a financial point of view, to the Stockholders of the Merger Consideration in connection with the Merger, and we do not address the merits of the underlying decision by the Company to engage in the Merger or any stockholder to tender his or her shares in the Tender Offer contemplated by the Merger Agreement. This opinion does not constitute a recommendation to any stockholder as to whether to tender his or her shares in such Tender Offer or as to how such stockholder should vote with respect to the proposed Merger. It is understood that this letter may not be disclosed or otherwise referred to without prior written consent, except that the opinion may be included in its entirety in a proxy statement mailed to the stockholders by the Company with respect to the Merger.

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Based upon and subject to the foregoing, it is our opinion as investment bankers that, as of the date hereof, the Merger Consideration is fair, from a financial point of view, to the Stockholders.

  Very truly yours,

 

/s/  
WILLIAM BLAIR & COMPANY, L.L.C.      
WILLIAM BLAIR & COMPANY, L.L.C.

A-3


Exhibit (e)(3)

Annex B

INFORMATION RESOURCES, INC.
150 North Clinton Street
Chicago, Illinois 60661

INFORMATION STATEMENT PURSUANT TO
SECTION 14(F) OF THE SECURITIES EXCHANGE ACT
OF 1934 AND RULE 14f-1 THEREUNDER

        This Information Statement is being mailed on or about July 14, 2003 as part of the Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9") of Information Resources, Inc. (the "Company") that has been filed with the Securities and Exchange Commission (the "SEC") on July 14, 2003. You are receiving this Information Statement in connection with the possible appointment of persons designated by Gingko Corporation, a Delaware corporation ("Parent"), to at least a majority of the seats on the Company's board of directors (the "Board of Directors" or "Board").

        On June 29, 2003, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") by and among Parent, Gingko Acquisition Corp. ("Purchaser"), and the Company, pursuant to which, among other things, Parent and Purchaser will commence a tender offer to purchase all of the outstanding shares of the Company's common stock, par value $0.01 per share, of the Company, together with the associated Preferred Share Purchase Rights (as defined in the Schedule 14D-9 to which this Annex B is attached) (collectively, the "Company Common Stock"), at a purchase price of one contingent value right per share of Company Common Stock ("CVR"), which shall represent the contingent right to receive an amount of cash equal to the CVR Payment Amount (as defined in the Contingent Value Rights Agreement to be entered into immediately prior to the expiration of the Offer) and $3.30 per share of Company Common Stock, net to each seller in cash, without interest (such price, or any greater amount paid per share of Company Common Stock pursuant to the Offer (as defined below), together with the CVR, the "Offer Price"), on the terms and subject to the conditions set forth in the Offer to Purchase, dated July 14, 2003, of Purchaser (the "Offer to Purchase"), and in the related Letter of Transmittal (the "Letter of Transmittal," which, together with the Offer to Purchase, as each may be amended or supplemented from time to time, collectively constitute the "Offer"). Copies of the Offer to Purchase and the Letter of Transmittal have been mailed to stockholders of the Company and are filed as Exhibits (a)(1) and (a)(2), respectively, to the Tender Offer Statement on Schedule TO filed by the Parent, Purchaser, Symphony Technology II-A, L.P., a Delaware limited partnership ("Symphony"), and Tennenbaum & Co., LLC, a Delaware limited liability company ("Tennenbaum"), (the "Schedule TO") with the SEC on July 14, 2003.

        The Merger Agreement provides, among other things that on the terms and subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, following consummation of the Offer, and in accordance with the Delaware General Corporation Law, as amended (the "DGCL"), Merger Sub shall be merged with and into the Company (the "Merger"). Following the time at which the Merger becomes effective (the "Effective Time"), the Company shall continue as the surviving corporation and a wholly-owned subsidiary of Parent. At the Effective Time, each issued and outstanding share of Company Common Stock (other than shares held by (i) the Company (as treasury stock), (ii) Parent, Purchaser or any of their respective subsidiaries and (iii) stockholders who are entitled to demand and properly demand appraisal of such shares pursuant to, and who comply in all respects with, the provisions of Section 262 of the DGCL) will be converted into the right to receive the Offer Price, without interest. The Offer, the Merger, the Merger Agreement and the Contingent Value Rights Agreement are more fully described in the Schedule 14D-9 to which this Information Statement is attached as Annex B, which was filed by the Company with the SEC on July 14, 2003 and which is being mailed to stockholders of the Company along with this Information Statement.

B-1



        This Information Statement is being mailed to you in accordance with Section 14(f) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rule 14f-1 promulgated thereunder. The information contained herein supplements certain information contained in the Schedule 14D-9. Information herein related to Parent, Purchaser and the Parent designees identified herein has been provided by the Parent, and the Company assumes no responsibility for the accuracy or completeness of such information.

        You are urged to read this Information Statement carefully. You are not, however, required to take any action in connection with the matters set forth herein. Capitalized terms used herein and not otherwise defined shall have the meaning set forth in the Schedule 14D-9.

        Pursuant to the Merger Agreement, Parent and Purchaser commenced the Offer on July 14, 2003. The Offer is currently scheduled to expire at 12:00 Midnight, New York City Time, on August 8, 2003, unless the Offer is extended in accordance with its terms.

Right to Designate Directors and Parent Designees

        The Merger Agreement provides that upon the first acceptance for payment of, and payment by Purchaser for, any shares of Company Common Stock tendered pursuant to the Offer (the "Acceptance Date), Parent shall be entitled to designate such number of directors, rounded up to the next whole number, on the Board of Directors of the Company as is equal to the product obtained by multiplying the total number of directors on such Board (giving effect to the directors designated by Parent pursuant to this sentence) by the percentage that the number of shares of Company Common Stock purchased and paid for by Parent or Purchaser pursuant to the Offer, plus any shares beneficially owned by Parent or its affiliates on the date of such purchase and payment, bears to the total number of shares of Company Common Stock then outstanding. On the expiration of any subsequent offering period (as provided by Rule 14d-11 under the Exchange Act), Parent shall be entitled to designate such number of directors, rounded up to the next whole number, on the Board of Directors of the Company as is equal to the product obtained by multiplying the total number of directors on such Board (giving effect to the directors designated by Parent pursuant to this and the immediately preceding sentence) by the percentage that the number of shares of Company Common Stock purchased and paid for by Parent or Purchaser pursuant to the Offer (including, but not limited to, the number of shares purchased in any subsequent offering period), plus any shares beneficially owned by Parent or its Affiliates on the date of such purchase and payment in the subsequent offering period, bears to the total number of shares of Company Common Stock then outstanding. In furtherance of the rights and obligations set forth in the immediately foregoing two sentences, the Company shall, upon request of Parent, promptly increase the size of its Board of Directors, or it shall use its reasonable best efforts to secure the resignations of such number of directors, or both, as is necessary to enable Parent's designees to be so elected to the Company's Board and, subject to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, shall cause Parent's designees to be so elected. At such time, the Company shall, if requested by Parent, also cause directors designated by Parent to constitute at least the same percentage (rounded up to the next whole number) as is on the Company's Board of Directors of each committee of the Company's Board of Directors. Notwithstanding the foregoing, if shares of Company Common Stock are purchased pursuant to the Offer, there shall be until the Effective Time at least two members of the Company's Board of Directors who are directors on the date hereof and are not employees of the Company.

        Parent has informed the Company that it will choose the Parent designees from the persons listed below. If necessary, Parent may choose additional or alternative Parent designees, subject to the requirements of Rule 14f-1. Parent had informed the Company that each of the Parent designees has consented to act as a director, if so designated. Unless otherwise indicated below, the business address of each Parent designee is 4015 Miranda Avenue, 2nd Floor, Palo Alto, CA 94304. The name, current principal occupation or employment and material occupations, positions, offices or employment for the

B-2



past five years, of each of the Parent designees are set forth below. Where no date is shown, the individual has occupied the position indicated for the past five years. None of the Parent designees listed below has, during the past five years, (i) been convicted in a criminal proceeding or (ii) been a party to any judicial or administrative proceeding that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, U.S. federal or state securities laws, or a finding of any violation of U.S. federal or state securities laws. All directors and officers listed below are citizens of the United States.

Name

  Age
  Current Principal Occupation or Employment and
Five-Year Employment History

Bryan M. Taylor   33   Director and President of Parent and Purchaser. Managing Director of Symphony Technology Group. Member of The Valent Group, LLC (January 2000-January 2002). Manager of Bain & Company Inc. (August 1992-January 2000).

William F. Chisholm

 

34

 

Director and Executive Vice President of Parent and Purchaser. Partner of Symphony Technology Group. Member of The Valent Group, LLC (January 2000-January 2002). Manager of Bain & Company Inc. (August 1996-January 2000).

Steven Chang

 

30

 

Director of Parent and Purchaser. Principal of Tennenbaum Capital Partners, LLC. Principal of Barnard & Co., LLC (November 1997-December 2002). Mr. Chang's business address is 11100 Santa Monica Boulevard, Suite 210, Los Angeles, CA 90025.

Howard M. Levkowitz

 

36

 

Director of Parent and Purchaser. Managing Partner and Portfolio Manager of Tennenbaum Capital Partners, LLC. Mr. Levkowitz's business address is 11100 Santa Monica Boulevard, Suite 210, Los Angeles, CA 90025.

        Parent has advised the Company that none of the Parent designees or any of their affiliates beneficially owns any equity securities of the Company (or any right to acquire any such equity securities) nor has any such Parent designee been involved in any transaction with the Company or any of its directors, officers or affiliates that is required to be disclosed pursuant to the rules and regulations of the SEC, other than with respect to transactions between Parent and the Company that have been described in the Schedule TO or the Schedule 14D-9. In addition, Parent has advised the Company that none of the Parent designees (i) is currently a director of, or holds any position with, the Company or (ii) has a familial relationship with any director or officer of the Company or with any other Parent designee.

        It is expected that the Parent designees will assume office following consummation of the Offer, which cannot be earlier than August 8, 2003.

Certain Information Concerning the Company

        The common stock, $.01 par value per share ("Company Common Stock"), is the only class of equity securities of the Company outstanding that is entitled to vote at a meeting of the stockholders of the Company. Each share of Company Common Stock is entitled to one vote. On July 11, 2003, there were 30,020,300 shares of Company Common Stock issued and outstanding. Parent and Purchaser own no shares of Company Common Stock as of the date hereof.

B-3



INFORMATION CONCERNING DIRECTORS AND
EXECUTIVE OFFICERS OF THE COMPANY

Directors and Executive Officers

        The By-laws of the Company provide that the number of directors of the Company shall not be less than five nor more than fifteen and will be determined from time to time by resolution of the Board of Directors. The number of directors is currently set at nine. The Certificate of Incorporation of the Company provides for a classified Board of Directors consisting of three classes (as nearly equal in number as possible) and that the directors will be elected to hold office for terms of three years or until their successors are elected and qualified. By resolution, all non-employee directors elected or appointed to the Board of Directors after May 20, 1999 shall be limited to a maximum number of four three-year terms (a total of 12 years). Those directors are identified below.

Name

  Age
  Positions with Company, Business Experience and
Other Positions

James G. Andress   64   Director since November 1989; Current Chairman of the Executive Committee and current member of the Compensation Committee; President and Chief Operating Officer of the Company from March 1994 to September 1995; Chief Executive Officer from May 1990 to September 1995; Vice Chairman from July 1993 until March 1994; Chairman, Director and Chief Executive Officer of Warner-Chilcott PLC from November 1996 to November 2000; Director of Sepracor, Inc., Option Care, Inc., Xoma Corporation, Allstate Corporation and Dade-Behring, Inc.

William B. Connell

 

63

 

Director since August 1999; Current Chairman of the Compensation Committee and current member of the Audit Committee; Chairman of EDB Holdings, Inc. since 1994; Director of The Remington Products Company and Aurora Foods.

Joseph P. Durrett

 

57

 

Chairman of the Board of Directors, Chief Executive Officer and President of the Company since April 1999; Current member of the Executive and Nominating Committees; President and Chief Executive Officer of Broderbund Software Inc. from October 1996 to December 1998; Chief Operating Officer of Advo, Inc. from September 1992 to July 1996.

Bruce A. Gescheider

 

56

 

Director since August 1999; Current Chairman of the Nominating Committee and current member of the Compensation Committee; President of Moana Nursery since January 2002; President and CEO of ACCO World Corporation from 1997 to 2000; President and CEO of ACCO North America from 1991 to 1997.
         

B-4



Eileen A. Kamerick

 

44

 

Director since May 2002; Current member of the Audit Committee; Executive Vice President and Chief Financial Officer of Bcom3, a subsidiary of Publicis Groupe, since September 2001; Executive Vice President and Chief Financial Officer of United Stationers, Inc. from October 2000 to September 2001; Vice President and Chief Financial Officer of BP Amoco America (following merger of British Petroleum p.l.c. and Amoco Corporation) from December 1998 to September 2000; Vice President and Treasurer of Amoco Corporation from June 1998 to December 1998; Vice President and General Counsel of GE Capital—Auto Financial Services from 1996 to May 1998.

John D.C. Little, Ph.D

 

75

 

Director since 1985; Current member of the Compensation Committee; Institute Professor, Massachusetts Institute of Technology since 1989 (professor since 1962); Co-Founder and Chairman of Management Decision Systems, Inc. from 1967 to 1985; Co-Founder and Director of InSite Marketing Technology from 1997 to 1999.

Leonard M. Lodish, Ph.D

 

59

 

Director since 1985; Current member of the Executive Committee; Samuel R. Harrell Professor since 1986, Vice Dean, Wharton West since 2001, and Chairman of the Global Consulting Practicum since 1978, all at the Wharton School of Business, University of Pennsylvania; Director of Franklin Electronic Publishers, Inc. and J&J Snack Foods Corp.

Raymond H. Van Wagener, Jr

 

51

 

Director since August 1999; Current Chairman of the Audit Committee; Chief Executive Officer of dbDoctor, Inc. since January 2001; Independent Consultant for Internet and consumer technology services from February 1999 to December 2000; Chief Executive Officer of Infobeat, Inc. from January 1997 to January 1999; Vice President and General Manager of Procter & Gamble (Asia) from 1992 to 1998.

Thomas W. Wilson, Jr

 

71

 

Director since August 1991; Current member of the Executive Committee; Chief Executive Officer of the Company from November 1998 to April 30, 1999; Chairman of the Board of Directors of the Company from April 1995 to April 30, 1999; Senior Partner of McKinsey & Company, management consultants, from 1973 until 1990 (retired); Director of Park City Group, Inc.

Committees of the Board of Directors, Meetings and Compensation of Directors

        During 2002, the Board of Directors met on five occasions. All members attended at least 75% of the Board of Directors' meetings and their respective Committee meetings. The Board of Directors also met telephonically on an informal basis on numerous occasions throughout 2002. The Board of Directors maintains an Executive Committee, Audit Committee, Compensation Committee and Nominating Committee.

B-5



        The Executive Committee is empowered to exercise the authority of the Board of Directors in the management of the business and affairs of the Company between the meetings of the Board, except as provided by the By-laws or limited by the provisions of the Delaware General Corporation Law. The Executive Committee did not meet during 2002.

        The Audit Committee recommends to the Board of Directors the appointment of the independent auditors for the following year and reviews the scope of the audit, the independent auditors' report and the auditors' comments relative to the adequacy of the Company's system of internal controls and accounting policies. The Audit Committee met during 2002 on four occasions. Each member of the Audit Committee satisfies the independence requirements established by Rule 4200 (a)(15) of the NASD listing standards.

        The Compensation Committee is responsible for reviewing and approving salaries and other compensation for the Company's executive officers. The Compensation Committee met during 2002 on two occasions.

        The Nominating Committee is responsible for identifying potential candidates to serve on the Board of Directors, considering the appropriateness of nominations made by others and making recommendations to the Board of Directors regarding potential candidates. The Nominating Committee met during 2002 on one occasion.

        Directors of the Company who are also employees do not receive any fee or remuneration for services as members of the Board of Directors or of any Committee of the Board of Directors. Pursuant to the Company's 1996 Stock Plan for Independent Directors, non-employee Directors are issued shares of Company Common Stock in lieu of 75 percent of the cash retainer otherwise payable for his or her services on the Board. Pursuant to this plan, each non-employee Director who served for all of 2002 received 2,841 shares of Company Common Stock for services rendered in 2002 and an annual cash retainer fee of $5,250. Each non-employee director also receives a $1,000 cash attendance fee for each board meeting attended in person. Each non-employee Director who serves on a committee (excluding the Chairperson) receives an additional annual cash fee of $2,500 for each committee on which he/she serves. Chairpersons of such committees each receive an annual cash fee of $5,000 for each committee on which he/she serves as Chairperson. Each non-employee committee member also receives a $500 cash attendance fee for each committee meeting attended in person or telephonically. Total cash fees for committee membership, attendance fees and the cash portion of the annual retainer paid during 2002 to non-employee Directors were as follows: James G. Andress—$15,518; William B. Connell—$18,518; Bruce A. Gescheider—$18,018; Eileen A. Kamerick—$6,880; John D. C. Little, Ph.D.—$15,018; Leonard M. Lodish, Ph.D.—$14,018; Raymond H. Van Wagener, Jr.—$14,768; and Thomas W. Wilson, Jr.—$15,268.

        Each non-employee Director also receives an annual grant of 2,500 stock options. During 2002, the Company granted options to purchase 5,000 shares of Company Common Stock to each of the non-employee Directors for their service in 2002 and 2003. The exercise price of these options was $10.00, the market value of Company Common Stock on the date of grant.

        In 2000, the Company adopted the Information Resources, Inc. Directors Deferred Compensation Plan, pursuant to which directors were provided the opportunity to defer the cash and/or stock portions of their director fees. In August 2002, the Board of Directors elected to terminate the Directors Deferred Compensation Plan effective January 15, 2003. All cash and stock deferred under this plan were paid to participating directors in a lump sum in cash in early 2003.

B-6


EXECUTIVE COMPENSATION

        The following information regarding compensation is given with respect to (i) the Company's Chief Executive Officer during 2002, and (ii) the four other highest paid executive officers of the Company who served as executive officers at year end 2002.

Report on Executive Compensation

        The Compensation Committee (the "Committee") is responsible for reviewing and approving the annual salary, bonus and other compensation of the Company's executive officers. The Committee also makes recommendations with respect to stock option grants to the Company's executive officers. The Committee is composed entirely of outside directors.

        The goals of the Company's compensation programs are to align executive compensation with the Company's performance and to attract, retain and reward executive officers who contribute to the Company's success within a highly competitive information and technology industry. The programs are intended to support the goal of increasing stockholder value by achieving specific financial and strategic objectives.

        The Committee has considered the potential impact of Section 162(m) of the Internal Revenue Code on executive compensation in future years. Section 162(m) disallows a tax deduction by any publicly held corporation for individual compensation exceeding $1 million in any taxable year for a Named Executive Officer, unless compensation is performance based. The Committee has determined that, while Section 162(m) should be given consideration in compensating executive officers, the Committee's compensation philosophy should not be arbitrarily altered in order to limit or maintain executive compensation within the Section 162(m) deduction limit. The Committee has, however, determined that it will make every reasonable effort, consistent with sound executive compensation principles and the needs of the Company, to permit all amounts paid to the Named Executive Officers to be deductible by the Company.

    Compensation of Executive Officers Generally

        The Company's fundamental compensation philosophy is to relate the total compensation package for an executive officer directly to his or her contribution to the Company's performance objectives. Each executive's incentive, or "at risk," compensation is typically directly tied to the achievement of both Company and individual objectives, including both quantitative and qualitative objectives. The performance objectives of each executive officer differ depending upon individual roles and responsibilities within the management group and typically include performance objectives for both the Company and a business unit or function for which the executive officer has direct involvement. Certain elements of compensation for individual executive officers are also dictated by employment agreements that are in place.

        In 2002, the Committee emphasized financial, strategic and growth oriented objectives. It generally based its determination of executive performance upon the achievement of the following pre-established objectives: (i) improvement of the Company's earnings per share; and (ii) development and execution of additional growth initiatives.

        For the year ended December 31, 2002, the Company reported a net loss of $13.0 million or $.44 per share for 2002 compared to a net loss of $3.9 million or $.13 per share for 2001. The Company's 2002 net loss included a $7.1 million or $.24 per share charge for the cumulative effect of a change in accounting for goodwill. Revenue of $554.8 million was down slightly from prior year. Revenue from the Company's U.S. business declined 2% for the year compared to 2001 while International revenue was up 6% over 2001 in U.S. dollars and 1% in local currencies.

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        The Company's executive compensation package consists of three principal components: (i) base salary; (ii) potential for an annual cash bonus; and (iii) the opportunity to earn stock option grants and/or allocations of stock under the Company's Nonqualified Defined Contribution Plan. The Company generally seeks to position its compensation package for each executive position at a level which, for outstanding performance, is at or somewhat above industry average. In addition, the Company strives to make as much of the total compensation mix as possible variable, based on performance.

        Salary.    The Committee reviews each executive officer's salary annually. In determining appropriate salary levels, the Committee considers the level and scope of responsibility, experience, and Company and individual performance compared to the preceding year, contractual provisions in employment and other agreements, as well as competitive market data on salary levels. On November 1, 2002, five of the six executive officers received salary increases based on their 2001 performance. All executive officers voluntarily delayed their merit increases on May 1, 2002 by six months and, therefore had not received increases during the prior 18 months. Specifically, on November 1, 2002, three executive officers received a three percent increase, one executive officer received a three and a half percent increase and one executive officer received a four percent increase. Further, one executive officer received a one time lump sum payment of $10,000 for assuming additional responsibilities. On March 3, 2003, the Committee decided that no merit increases would be granted in 2003 based on 2002 business results to any executive officers, division presidents or other employees who report directly to the CEO.

        In 1999, the Company adopted the Information Resources, Inc. Executive Deferred Compensation Plan to provide certain employees of the Company with an opportunity to accumulate additional financial security by deferring compensation amounts in excess of the amount which may be deferred under the Company's 401(k) Retirement Savings Plan. Participation in the Executive Deferred Compensation Plan was limited to executives of the Company at the Senior Vice-President level and above or any other executive of the Company approved by the committee charged with administering the plan. The Company adopted the plan to aid in attracting and retaining executives of exceptional ability. Five of the six executive officers of the Company participated in the Executive Deferred Compensation Plan in 2002. In August 2002, the Board of Directors elected to terminate the Executive Deferred Compensation Plan, effective January 15, 2003. All amounts deferred under this Plan were paid to participants in a lump sum in cash on January 31, 2003.

        Cash Bonuses.    During fiscal year 2002, each executive officer of the Company was eligible for a target annual incentive bonus calculated by the Committee as a percentage of the officer's base salary. Target bonus is defined as the payment earned if an officer achieves 100% of his/her objectives including Company and individual objectives. The Company's bonus plan allows for the payment of adjusted (i.e. lower or higher) amounts based on the comparison of results against objectives. For 2002, bonus targets ranged from 28% to 60% of an executive officer's salary. In determining the cash bonuses, the Committee considered Company financial performance as the sole measure of performance. For 2002, one executive officer received a special discretionary cash bonus equal to 29% of the officer's target bonus in consideration for special performance, while the remaining five executive officers received no cash bonus for 2002 performance.

        Option Grants.    The Compensation Committee is responsible for determining the executive officers to whom stock option grants should be made, the timing of the grants, the exercise price per share and the number of shares subject to each option. The Compensation Committee has final approval of option grants made to executive officers. Stock options granted to executive officers generally vest over a four-year period and are typically granted with an exercise price equal to the fair market value of Company Common Stock as of the date of grant. The ultimate value of stock options is directly tied to change in the value of a share of Company Common Stock. The Committee also

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considers the amount and terms of options already held by a particular officer, the role of each executive in accomplishing the Company's performance objectives and the highly competitive nature of the Company's industry. In March 2002, the Company awarded stock options to six executive officers for 2001 performance. The strike price on these awards was $8.25. In 2003 no executive officer will receive any stock option awards for 2002 performance.

        Stock Allocations Pursuant to Nonqualified Defined Contribution Plan.    In the fourth quarter of 1999, the Company adopted the Information Resources, Inc. Nonqualified Defined Contribution Plan (the "Defined Contribution Plan") in order to better align the interests of employees of the Company and its affiliates with the interests of the Company's stockholders. No Company stock was allocated to executive officers under the Defined Contribution Plan in 2002.

        The Committee believes that stock based incentives for executive officers are an important feature of the Company's executive compensation package. The Committee believes that stock based incentives directly motivate an executive to maximize long-term stockholder value and provide the executive officer with the opportunity to share in the appreciation of the value of the stock of the Company.

        Compensation of the Chief Executive Officer.    During 2002, the office of Chief Executive was served by Mr. Joseph P. Durrett, who also holds the title of Chairman and President. During 2002, the Company compensated Mr. Durrett utilizing the same philosophy and general criteria used for other executive officers as described above. Mr. Durrett's principal quantitative performance objectives included specific earnings per share targets, as well as other strategic objectives including new business initiatives.

        During 2002, Mr. Durrett received $540,750 of salary and no cash bonus based on his achievement of Company financial and personal objectives in 2002. Mr. Durrett received a three percent salary increase in November of 2002 based on 2001 performance. Mr. Durrett's 2002 salary increase for 2001 performance was delayed six months from May 1, 2002 to November 1, 2002, and he therefore received no merit increase for 18 months. In 2003, Mr. Durrett will receive no merit increase based on 2002 Company financial performance. In March 2002, Mr. Durrett received 125,000 stock options at a strike price of $8.25 based on his 2001 performance. Mr. Durrett will not receive any stock options in 2003 based on 2002 performance.

        The foregoing report has been approved by the current members of the Compensation Committee.

    The Compensation Committee

 

 

William B. Connell, Chairman
James G. Andress
Bruce A. Gescheider
John D.C. Little

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Summary Compensation Table

        The following table sets forth all compensation to the Named Executive Officers for services rendered to the Company for the Company's last three fiscal years:

 
   
   
   
  Long Term Compensation
Awards

   
 
 
   
  Annual Compensation
   
 
Name and Principal Position

   
  Restricted
Stock
Award(s)

  Securities
Underlying
Options/SARs

  All Other
Compensation(1)

 
  Year
  Salary
  Bonus
 
Joseph P. Durrett
Chief Executive Officer, President and Chairman of the Board
  2002
2001
2000
  $

527,181
525,000
525,000
  $

44,000
179,000
148,160
(2)
(3)
(4)
0
0
0
  125,000
75,000
225,000
(5)
(5)
$

61,335
59,138
4,725
(6)
(7)

Andrew G. Balbirer
Chief Financial Officer

 

2002
2001
2000

 

 

339,404
333,450
276,250


(8)

 

0
53,352
70,000



(9)

0
0
0

 

70,000
55,000
175,000



(10)

 

4,950
4,725
344,729



(11)

Timothy S. Bowles(12)
Group President, International Services

 

2002
2001
2000

 

 

290,626
274,949
277,259

 

 

0
26,300
58,300

 

0
0
0

 

25,000
25,000
50,000

 

 

46,087
43,522
45,587

(13)
(14)
(15)

Edward C. Kuehnle
Group President, North American Services

 

2002
2001
2000

 

 

325,336
321,324
312,977

 

 

0
100,000
44,000

 

0
0
0

 

35,000
50,000
15,000

 

 

13,720
22,560
74,459

(16)
(17)
(18)

Monica M. Weed
Executive Vice President, General Counsel and Corporate Secretary

 

2002
2001
2000

 

 

200,492
196,335
183,545

 

 

0
24,000
20,000

 

0
0
0

 

20,000
35,000
20,000

 

 

4,950
52,161
4,842


(19)
(20)

(1)
Except as otherwise noted, represents contributions made by the Company to the Information Resources, Inc. 401 (k) Retirement Savings Plan.

(2)
This amount represents a guaranteed payment under Mr. Durrett's employment agreement.

(3)
$44,000 of this amount represents a guaranteed payment under Mr. Durrett's employment agreement. The balance, $135,000, represents bonus paid to Mr. Durrett for 2001 performance.

(4)
$44,000 of this amount represents a guaranteed payment under Mr. Durrett's employment agreement. The balance, $104,160, represents bonus paid to Mr. Durrett for his 2000 performance.

(5)
Options granted pursuant to terms of employment agreement.

(6)
Mr. Durrett received perquisites valued at $56,385 in 2002 for reimbursement of living expenses.

(7)
Mr. Durrett received perquisites valued at $54,413 in 2001 for reimbursement of living expenses.

(8)
Mr. Balbirer joined the Company and the executive management team in February 2000; therefore his salary for 2000 is prorated for the period of time he was actually employed by the Company.

(9)
Minimum of $70,000 bonus guaranteed as part of employment contract.

(10)
Options granted February 18, 2000 pursuant to terms of employment agreement.

(11)
In 2000, 50,000 shares of Company stock were allocated to a stock account maintained for the benefit of Mr. Balbirer pursuant to the Company's Nonqualified Defined Contribution Plan. The

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    value of such shares, $343,750, is based upon the fair market value of the Company's stock,$6.875, on February 18, 2000, the date of grant.

(12)
Mr. Bowles is compensated in British Pounds. Salary and All Other Compensation amounts represent translation into U.S. Dollars as of December 31, 2002 based on an average exchange rate for the year.

(13)
Mr. Bowles received perquisites valued at $46,087 in 2002, consisting of contributions to a pension fund on behalf of Mr. Bowles ($29,063) and a company car and reimbursement of related car expenses ($17,024).

(14)
Mr. Bowles received perquisites valued at $43,522 in 2001, consisting of contributions to a pension fund on behalf of Mr. Bowles ($27,316) and a company car and reimbursement of related car expenses ($16,206).

(15)
Mr. Bowles received perquisites valued at $45,587 in 2000, consisting of contributions to a pension fund on behalf of Mr. Bowles ($27,725) and a company car and reimbursement of related car expenses ($17,862).

(16)
Mr. Kuehnle received perquisites valued at $8,770 in 2002 for reimbursement of relocation expenses.

(17)
Mr. Kuehnle received perquisites valued at $17,835 in 2001 for reimbursement of relocation expenses.

(18)
Mr. Kuehnle received perquisites valued at $69,734 in 2000 for reimbursement of relocation expenses.

(19)
Ms. Weed received perquisites valued at $40,491 in 2001 for reimbursement of educational expenses incurred in 2000 and 2001.

(20)
Ms. Weed received perquisites valued at $10,117 in 2000 for reimbursement of educational expenses incurred in 1999.

Stock Option/SAR Grants in Last Fiscal Year

        The following table sets forth certain information regarding stock options and stock appreciation rights (SARs) granted in 2002 for each of the Named Executive Officers:

 
  Individual Grants
   
   
 
  Number of
Securities
Underlying
Options/SARs
Granted(1)

   
   
   
  Potential Realizable Value at
Assumed Annual Rates of Stock
Price Appreciation for Option Term(3)

 
  Percent of Total Options/SARs
Granted to
Employees in
Fiscal Year

   
   
Name

  Exercise
Price(2)

  Expiration
Date

  5%
  10%
Joseph P. Durrett   125,000   9.82   8.25   03/14/2012   $ 648,548   $ 1,643,547
Andrew G. Balbirer   70,000   5.50   8.25   03/14/2012     363,187     920,386
Timothy S. Bowles   25,000   1.96   8.25   03/14/2012     129,710     328,709
Edward C. Kuehnle   35,000   2.75   8.25   03/14/2012     181,593     460,193
Monica M. Weed   20,000   1.57   8.25   03/14/2012     103,768     262,968

(1)
Unless indicated otherwise, represents stock options.

(2)
Represents the fair market value of Company Common Stock on the date of grant.

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(3)
The amounts shown under these columns are the result of calculations at the 5% and 10% rates required by the Securities and Exchange Commission and are not intended to forecast future appreciation of the price of Company Common Stock.

Aggregated Options/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values

        The following table sets forth certain information regarding stock options and SARs exercised during 2002 for each of the Named Executive Officers:

 
   
   
  Number of securities underlying unexercised options/SARs at fiscal year end
  Value of unexercised in-the-money options/SARs at fiscal year end(1)
Name

  Shares Acquired on Exercise
  Value Realized
  Exercisable
  Unexercisable
  Exercisable
  Unexercisable
Joseph P. Durrett   0   0   714,000   311,000   0   0
Andrew G. Balbirer   0   0   72,084   227,916   0   0
Timothy Bowles   0   0   116,250   73,750   0   0
Edward C. Kuehnle   0   0   110,000   90,000   0   0
Monica M. Weed   0   0   39,886   56,250   0   0

(1)
The value of "in-the-money options" represents the difference between the exercise price of such option and the stock price, which was $1.60 per share at the close of business on December 31, 2002.

Security Ownership of Certain Beneficial Owners and Management

        The following table sets forth information relating to the Company's equity compensation plans and individual compensation arrangements as of December 31, 2002:

Plan Category

  Number of securities to be
issued upon exercise of
outstanding options, warrants
and rights

  Weighted-average
exercise price of
outstanding options,
warrants and rights

  Number of securities
remaining available for
future issuance under
equity compensation plans(1)

Equity compensation plans approved by security holders   8,913,012   $ 8.16   1,328,277
Equity compensation plans not approved by security holders        
Total   8,913,012   $ 8.16   1,328,277

(1)
Includes 355,001 shares authorized for issuance under the Company's 2000 Employee Stock Purchase Plan. The Company may either issue such shares or may acquire such shares on the open market or in privately negotiated transactions, depending upon market conditions and other factors.

B-12


Stock Performance Graph

        The following graph compares cumulative total stockholder return on Company Common Stock over the past five fiscal years with the cumulative total return of (i) the Standard & Poors 500 Composite Index, and (ii) the Peer Group Index.

Comparison of 5 Year Cumulative Total Return
Assumes Initial Investment of $100
December 2002

         CHART

Employment Agreements

        The Company has employment agreements with all five Named Executive Officers.

        Mr. Durrett's agreement provides for: (i) a minimum base salary of $525,000 per year; (ii) bonus, other incentive compensation and general benefits available to other senior officers; (iii) three equal annual supplemental bonuses of $44,000 each payable in 2000, 2001 and 2002 as long as Mr. Durrett is employed by the Company on the date of payout; (iv) supplemental executive retirement plan ("Durrett SERP") benefit in the amount of $1,614,000 payable on an annual basis over 18 years, provided Mr. Durrett meets the vesting and age requirements of the Durrett SERP; (v) stock option grants as follows, as long as Mr. Durrett is employed by the Company on the date of grant: 250,000 stock options at fair market value on April 30, 1999; 350,000 stock options on May 20, 1999 at an exercise price equal to $8.375; 225,000 stock options on or before May 20, 2000 at an exercise price equal to $12.00 per share; and 75,000 stock options at fair market value on January 30, 2001; and (vi) 310,000 shares of Company Common Stock, subject to certain restrictions as to vesting. Mr. Durrett's agreement also contains restrictive covenants for the benefit of the Company for a period of three years following termination.

        While Mr. Durrett was originally entitled to receive a grant of 300,000 options on or before May 20, 2000, the Company determined that it did not have an adequate number of options available at that time to provide Mr. Durrett with this full grant. As a result, Mr. Durrett's agreement was amended to provide for the grant of 225,000 stock options in May 2000 with an exercise price of $12.00 and 75,000 stock options on January 30, 2001 at an exercise price of $4.2813, the then current fair market value.

        If Mr. Durrett's agreement is terminated by the Company without Cause or by Mr. Durrett for Good Reason, Mr. Durrett is entitled to receive his base salary for a period of three years following

B-13



the termination date, certain pro rated bonus payments, and the right to continue to participate in certain benefit plans for three years following termination. Similarly, if Mr. Durrett's employment is terminated within six months after a Change of Control, other than for Cause, he is entitled to receive such severance benefits for three years.

        If a Change of Control occurs after the second anniversary of Mr. Durrett's employment and Mr. Durrett's employment terminates for any reason other than Cause within six months after the Change in Control, all vested and unvested options held by Mr. Durrett will immediately vest and remain exercisable for a period of two years after termination of his employment. Mr. Durrett has been employed with the Company since 1999. If Mr. Durrett's employment is terminated due to his death or disability, all unvested options will immediately vest and be exercisable by Mr. Durrett or his estate for 24 months after his death or termination of employment. If Mr. Durrett terminates his employment for Good Reason, all stock options then held by him continue to vest and remain exercisable in accordance with their original vesting schedule. If the Company terminates Mr. Durrett's employment without Cause, all vested options held by Mr. Durrett on the date of termination will remain exercisable for a period of 24 months after such termination. If the Company terminates Mr. Durrett's employment for Cause, all vested options shall remain exercisable for 30 days after such termination.

        Mr. Durrett will be entitled to receive the full benefits specified in the Durrett SERP upon the termination of his employment provided (a) his employment has not been terminated for Cause; (b) he has not breached the restrictive covenants in his employment agreement; and (c) he has met all of the vesting and age requirements specified in the Durrett SERP as of the date of his employment termination. Upon Mr. Durrett's termination of employment following a Change of Control (other than a termination for Cause), Mr. Durrett will be entitled to receive a lump sum payment equal to the present value of the Durrett SERP benefit regardless of whether he has met the vesting and age requirements specified in the Durrett SERP as long as he has not breached the restrictive covenants specified in his employment agreement.

        Mr. Balbirer's agreement provides for: (i) a minimum base salary of $325,000 per year; (ii) participation in the Company's bonus plan; and (iii) the right to participate in all benefit plans applicable to similarly situated executives of the Company and to receive all other benefits or perquisites generally provided to other executives of the Company. Mr. Balbirer is also a participant in a supplemental executive retirement plan ("Key Executive SERP"), pursuant to which he is entitled to receive a lump sum payment of $1,000,000 upon the termination of his employment provided (a) his employment has not been terminated for Cause; (b) he has not breached the restrictive covenants in his employment agreement; and (c) as of the date of his employment termination, he has met all of the vesting and age requirements specified in the Key Executive SERP, including the requirement for five years of additional service from November 1, 2002. Upon Mr. Balbirer's termination of employment following a Change of Control (other than a termination for Cause), Mr. Balbirer will be entitled to receive a lump sum payment equal to the present value of the Key Executive SERP benefit, regardless of whether he has met the vesting and age requirements specified in the Key Executive SERP, as long as he has not breached the restrictive covenants specified in his employment agreement.

        Mr. Kuehnle's agreement provides for: (i) a minimum base salary of $317,200 per year; (ii) participation in the Company's bonus plan; and (iii) the right to participate in all benefit plans applicable to similarly situated executives of the Company and to receive all other benefits or perquisites generally provided to other executives of the Company. Mr. Kuehnle is also a participant in the Key Executive SERP on the same terms as are applicable to Mr. Balbirer as set forth above.

        As part of Mr. Kuehnle's agreement to relocate to the Company's Chicago headquarters in 2000, the following terms apply: (a) Mr. Kuehnle is entitled to receive reimbursement of his mortgage differential for a period of three years; and (b) if Mr. Kuehnle's employment with the Company is terminated by IRI without Cause, his responsibilities are significantly reduced without Cause or he

B-14



ceases to report directly to the Chief Executive Officer of the Company without Cause (in any case other than in the event of a Change in Control), the Company will reimburse Mr. Kuehnle, in an amount not to exceed $100,000, for his relocation to another location in the U.S. within 1 year after termination of his employment.

        Ms. Weed's agreement provides for: (i) a minimum base salary of $190,155 per year; (ii) participation in the Company's bonus plan; and (iii) the right to participate in all benefit plans applicable to similarly situated executives of the Company and to receive all other benefits or perquisites generally provided to other executives of the Company.

        The following severance terms are contained in the employment agreements for each of Mr. Balbirer, Mr. Kuehnle and Ms. Weed (each referred to below as the "Executive"):

        If the Company terminates the agreement for Cause, the Company shall have no further liability to the Executive except for accrued salary and other compensation owed to the Executive at the time of termination. If the Company terminates the agreement other than for Cause or Disability and except in the case of a Change in Control, the Executive is entitled to receive: (i) his/her base salary for a period of 12 months following the termination date; (ii) a prorated bonus for the year in which the termination occurs based upon the Executive's targeted bonus amount for that year; (iii) continuation of the medical, dental, hospitalization, prescription drug and life insurance coverage and benefits provided to the Executive immediately prior to the date of termination for a 12-month period after the termination date; (iv) continued vesting of all unvested stock options during this 12-month period; and (v) reimbursement of executive outplacement services for up to one year, not to exceed $20,000.

        Mr. Bowles' employment agreement was amended and restated as of May of 2000 to reflect that Mr. Bowles is employed by the Company's majority-owned subsidiary, IRI InfoScan Ltd. ("IRI InfoScan") rather than the Company and to amend the provisions related to Change in Control (as defined in the agreement) to mirror the provisions regarding Change in Control contained in the employment agreements of the Company's other executive officers (see below). Mr. Bowles' agreement provides for: (i) a minimum base salary of £154,650 (British Pounds) per year; (ii) participation in IRI InfoScan's bonus plan; (iii) an annual pension contribution equal to 10% of Mr. Bowles' base salary; and (iv) the right to participate in all benefit plans applicable to senior officers of IRI InfoScan. Mr. Bowles' status as an Executive Officer was terminated when he resigned from his position as Group President, International Operations, effective as of January 8, 2003, although he remains a full-time employee of IRI InfoScan.

        If Mr. Bowles' agreement is terminated without Cause other than following a Change in Control, all unvested options held by Mr. Bowles shall immediately vest as of the date of termination and shall be exercisable by Mr. Bowles or his estate for a period of 13 months following termination. If Mr. Bowles terminates his agreement for Good Reason other than following a Change in Control, Mr. Bowles is entitled to receive: (i) his base salary for a period of 12 months following the termination date; (ii) the right to continue to participate, during the 12-month period following termination, in those employee benefit plans in which Mr. Bowles was participating immediately prior to his termination; and (iii) all unvested options shall continue to vest during this 12-month period. If IRI InfoScan terminates Mr. Bowles' employment for Cause, IRI InfoScan shall have no further liability to Mr. Bowles except for accrued salary and other compensation owed to Mr. Bowles at the time of termination. If Mr. Bowles' employment with IRI InfoScan is terminated within 24 months following a Change in Control either by IRI InfoScan without Cause or by Mr. Bowles for Good Reason, the Change in Control terms set forth below shall apply.

B-15



        The following terms regarding termination of employment following a Change in Control are contained in the employment agreements for each of Mr. Balbirer, Mr. Bowles, Mr. Kuehnle and Ms. Weed (each referred to below as the "Executive"):

        If the Executive's employment with the Company (or IRI InfoScan, in the case of Mr. Bowles) is terminated within 24 months following a Change in Control either by the Company (or IRI InfoScan, in the case of Mr. Bowles) without Cause or by the Executive for Good Reason, the Executive is entitled to receive: (i) an amount equal to two times the sum of (A) the executive's base salary (at the rate in effect on the date of termination or, if greater, at the rate in effect immediately prior to the Change in Control), and (B) the greater of the highest bonus amount paid or payable to Executive in any of the three full fiscal years of the Company (or IRI InfoScan, in the case of Mr. Bowles) immediately preceding the date of termination or the Executive's targeted bonus amount for the year in which the date of termination occurs; (ii) continuation of the medical, dental, hospitalization, prescription drug and life insurance coverage and benefits provided to the Executive immediately prior to the Change in Control for a 24-month period after the termination of Executive's employment; (iv) immediate vesting of all unvested stock options and continued exercisability for all stock options during this 24-month period unless the options sooner expire by their terms; (v) reimbursement of executive outplacement services for up to one year, not to exceed $20,000; and (vi) within 10 days after the date of termination, an amount in a single cash payment equal to two times the amount of the Company matching contribution payable on the Executive's behalf to the Company's 401(k) Plan or, in Mr. Bowles' case, a single cash payment equal to two times the amount of IRI InfoScan's annual contribution payable on Mr. Bowles' behalf to IRI InfoScan's Group Pension Scheme.

        The employment agreements for each of Mr. Balbirer, Mr. Bowles, Mr. Kuehnle and Ms. Weed contain restrictive covenants for the benefit of the Company (or IRI InfoScan, in the case of Mr. Bowles) for a period of two years following termination of employment with the Company (or IRI InfoScan, in the case of Mr. Bowles).

B-16


REPORT OF THE AUDIT COMMITTEE

        The Audit Committee oversees the Company's financial reporting process on behalf of the Board of Directors. Management has the primary responsibility for the financial statements and the reporting process including the systems of internal controls. In fulfilling its oversight responsibilities, the Committee reviewed the audited financial statements in the Annual Report with management including a discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements.

        The Committee reviewed with the independent auditors, who are responsible for expressing an opinion on the conformity of those audited financial statements with generally accepted accounting principles, their judgments as to the quality, not just the acceptability, of the Company's accounting principles and such other matters as are required to be discussed with the Committee under generally accepted auditing standards. In addition, the Committee has discussed with the independent auditors the auditors' independence from management and the Company including the matters in the written disclosures required by the Independence Standards Board and considered the compatibility of non-audit services with the auditor's independence.

        The Committee discussed with the Company's internal and independent auditors the overall scope and plans for their respective audits. The Committee meets with the internal and independent auditors, with and without management present, to discuss the results of their examinations, their evaluations of the Company's internal controls, and the overall quality of the Company's financial reporting. The Committee held four meetings during fiscal year 2002.

        In reliance on the reviews and discussions referred to above, the Committee recommended to the Board of Directors (and the Board has approved) that the audited financial statements be included in the Annual Report on Form 10-K for the year ended December 31, 2002 for filing with the Securities and Exchange Commission. The Committee and the Board have also recommended the selection of the Company's independent auditors.

        The foregoing report has been approved by the current members of the Audit Committee.

    The Audit Committee

 

 

Raymond H. Van Wagener, Jr., Chairman
James G. Andress
William B. Connell
Eileen A. Kamerick

B-17


OWNERSHIP OF SECURITIES

        The following table shows the total number and percentage of shares of Company Common Stock beneficially owned as of June 30, 2003, by each person who is known to be the beneficial owner of more than 5% of Company Common Stock:

Name of Beneficial Owner

  Amount and Nature of
Beneficial Ownership

  Percent of Class(1)
Joseph L. Harrosh
40900 Grimmer Blvd.
Fremont, CA 94538
  2,950,150 (2) 9.83

Benson Associates, LLC
111 Southwest Fifth Avenue, Suite 2130
Portland, OR 97204

 

2,587,075

(3)

8.62

Dimensional Fund Advisors Inc.
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401

 

1,999,892

(4)

6.66

        The following table shows the total number and percentage of shares of Company Common Stock beneficially owned as of June 30, 2003 by (i) each director of the Company, (ii) each executive officer named in the Summary Compensation Table (the "Named Executive Officers"), and (iii) all current directors and current executive officers as a group. The address for the directors and Named Executive Officers is the principal office of the Company.

Name of Beneficial Owner

  Amount and Nature of Beneficial Ownership(5)(6)(7)
  Percent of Class(1)
James G. Andress   54,366   *
Andrew G. Balbirer   213,812   *
Mark A. Tims   93,000   *
William B. Connell   15,833   *
Joseph P. Durrett   1,146,110   3.82
Bruce A. Gescheider   9,519   *
Eileen A. Kamerick   4,891   *
Edward C. Kuehnle   179,935   *
John D.C. Little, Ph.D   219,050   *
Leonard M. Lodish, Ph.D   76,375   *
Raymond H. Van Wagener, Jr   8,519   *
Monica M. Weed   87,222   *
Thomas W. Wilson, Jr   143,992   *
All current directors and current executive officers as a group (14 persons)   2,252,624   7.50

*
Less than 1%.

(1)
Based on 30,018,050 shares outstanding on June 30, 2003.

(2)
Number of shares is based upon information set forth in a Schedule 13G/A filed by Joseph L. Harrosh with the SEC on February 5, 2003.

(3)
Number of shares is based upon information set forth in a Schedule 13F-HR filed by Benson Associates, LLC with the SEC on July 2, 2003.

B-18


(4)
Number of shares is based upon information set forth in a Schedule 13F-HR/A filed by Dimensional Fund Advisors Inc. with the SEC on April 15, 2003.

(5)
Unless otherwise indicated, each person has sole voting and investment power with respect to all such shares. The number of shares disclosed for the following individuals includes stock options which are exercisable within 60 days of March 20, 2003 in the following amounts: (i) James G. Andress—44,375 options; (ii) Andrew G. Balbirer—152,917 options; (iii) Mark A. Tims—73,000 options; (iv) William B. Connell—4,375 options; (v) Joseph P. Durrett—819,500 options; (vi) Bruce A. Gescheider—4,375 options; (vii) Eileen A. Kamerick—1,250 options; (viii) Edward C. Kuehnle—121,250 options; (ix) John D.C. Little, Ph.D.—29,928 options; (x) Leonard M. Lodish, Ph.D.—52,033 options; (xi) Raymond H. Van Wagener, Jr.—4,375 options; (xii) Monica M. Weed—49,605 options; (xiii) Thomas W. Wilson, Jr.—129,375 options; and (xiv) all current directors and current officers as a group—1,451,108 options.

(6)
Amounts include stock held for the benefit of the named individual in the Company's 401(k) Retirement Savings Plan as of March 20, 2003 in the following amounts: (i) Andrew G. Balbirer—954 shares; (ii) Joseph P. Durrett—1,861shares; (iii) Edward C. Kuehnle—1,016 shares; (iv) Monica M. Weed—1,117 shares; and (vi) all current directors and current officers as a group—5,747 shares. Amounts also include grants made to the named individual pursuant to the Company's Nonqualified Defined Contribution Plan as of March 20, 2003 in the following amounts: (i) Andrew G. Balbirer—50,000 shares; (ii) Mark A. Tims—20,000 shares; (iii) Edward C. Kuehnle—50,000 shares; (iv)Monica M. Weed—20,000 shares; and (v) all current directors and current officers as a group—155,000 shares.

(7)
Amounts include stock purchased by the named individual pursuant to the Company's Employee Stock Purchase Plan as of March 20, 2003 in the following amounts: (i) Andrew G. Balbirer—7,581 shares; (ii) Joseph P. Durrett—7,162shares; (iii) Edward C. Kuehnle—5,132 shares; (iv) Monica M. Weed—1,736 shares; and (vi) all current directors and current officers as a group—21,611 shares.

B-19


SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) Beneficial Ownership Reporting Compliance

        Section 16(a) of the Securities Exchange Act of 1934 ("Section 16") sets forth certain filing requirements relating to securities ownership by directors, executive officers and ten percent stockholders of a publicly-held company. To the Company's knowledge, the Company's directors and executive officers satisfied all filing requirements in 2002 except that the Company filed the Form 3, Initial Statement of Beneficial Ownership, one day late for Director Eileen Kamerick and the Form 5, Annual Statement of Changes in Beneficial Ownership, eleven days late for each of the Company's directors and executive officers. In making the foregoing disclosure, the Company has relied solely on written representations of its directors and executive officers and copies of the Section 16 reports that they have filed with the SEC.

B-20





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SIGNATURE
EX-99.(A)(3) 3 a2114556zex-99_a3.htm EXHIBIT (A)(3)
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Exhibit 99.(a)(3)

         GRAPHIC

July 14, 2003

Dear Information Resources, Inc. Stockholders:

        I am pleased to inform you that on June 29, 2003, Information Resources, Inc. ("IRI") entered into a definitive merger agreement with Gingko Corporation, and its wholly-owned subsidiary, Gingko Acquisition Corp. (together with Gingko Corporation, "Gingko"). Gingko Corporation was formed by Symphony Technology II-A, L.P. and Tennenbaum Capital Partners, LLC. Pursuant to the merger agreement, Gingko has today commenced a tender offer to purchase all of the outstanding shares of IRI's common stock, together with the associated preferred share purchase rights, for $3.30 per share, net to the seller in cash, without interest, and one contingent value right per share. Each contingent value right represents the contractual right to receive an amount equal to a portion of the proceeds, if any, of IRI's antitrust lawsuit against The Dun & Bradstreet Corp., A.C. Nielsen Co. (now owned by VNU, N.V.), and IMS International, Inc.

        The tender offer is conditioned upon, among other things, a number of IRI shares being validly tendered and not withdrawn prior to the expiration date of the tender offer that, together with all other shares owned by Gingko, represents a majority of IRI's outstanding shares, on a fully diluted basis. The tender offer will be followed by a merger of Gingko Acquisition Corp. with and into IRI, whereby all shares of IRI's common stock not purchased in the tender offer (other than those shares for which appraisal rights are validly exercised under Delaware law) will be converted into the right to receive $3.30 per share in cash, without interest, and one contingent value right per share.

        Your Board of Directors, by unanimous vote, (i) has determined that the transactions contemplated by the merger agreement, including the tender offer and the merger, are advisable and in the best interests of IRI and its stockholders, and are fair to IRI's stockholders, and (ii) recommends that you accept Gingko's tender offer and tender your shares pursuant to the tender offer. If the merger requires stockholder approval, the Board also recommends that IRI's stockholders vote to approve and adopt the merger agreement and the merger.

        In arriving at its recommendation, the Board carefully considered a number of factors, as described in the enclosed Solicitation/Recommendation Statement on Schedule 14D-9, including the oral opinion, subsequently confirmed in writing, of the Board's financial advisor, William Blair & Company, L.L.C., dated June 29, 2003, to the effect that, as of the date of the opinion, and subject to the qualifications and limitations as set forth therein, the consideration to be received by holders of IRI common stock pursuant to the merger agreement is fair, from a financial point of view, to IRI's stockholders. A copy of William Blair's written opinion, which sets forth the assumptions made, matters considered and limitations on the review undertaken by William Blair, can be found in Annex A to the Schedule 14D-9. You should read the opinion carefully and in its entirety.

        Enclosed for your consideration are copies of Gingko's tender offer materials and IRI's Solicitation/Recommendation Statement on Schedule 14D-9, which are being filed today with the Securities and Exchange Commission. We urge you to read both the Schedule 14D-9 and the related tender offer documents carefully before making a decision with respect to the tender offer.

    Sincerely,
    SIGNATURE
    Joseph P. Durrett
Chairman, Chief Executive Officer and President



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EX-99.(E)(4) 4 a2114556zex-99_e4.htm EXHIBIT (E)(4)
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Exhibit (e)(4)

SEVERANCE PROTECTION AGREEMENT

        THIS SEVERANCE PROTECTION AGREEMENT, dated as of [            ] (this "Agreement"), is entered into by and between Information Resources, Inc., a Delaware corporation (the "Company"), and [                        ] (the "Executive").

        WHEREAS, the Board of Directors of the Company (the "Board") has determined that it is essential and in the best interest of the Company for the Company to retain the services of the Executive in the event of a threat or occurrence of a Change in Control and to ensure the Executive's continued dedication and efforts in such event without undue concern for the Executive's personal financial and employment security; and

        WHEREAS, in order to induce the Executive to remain in the employ of the Company, particularly in the event of a threat or the occurrence of a Change in Control, the Company desires to enter into this Agreement with the Executive to provide the Executive with certain benefits in the event the Executive's employment is terminated as a result of, or in connection with, a Change in Control.

        NOW, THEREFORE, in consideration of the respective agreements of the parties contained herein, it is agreed as follows:

        1.    Term of Agreement.    

            (a)   The "Term" shall commence as of the date hereof (the "Effective Date"), and shall expire on the third (3rd) anniversary of the Effective Date, unless earlier terminated as provided herein; provided, however, that on each anniversary of the Effective Date, the Term shall automatically be extended for one (1) year unless either the Company or the Executive shall have given written notice to the other at least ninety (90) days prior thereto that the Term shall not be so extended; provided further, however, that following the occurrence of a Change in Control, the Term shall not expire prior to the expiration of twelve (12) months after such occurrence.

            (b)   In the event Executive and the Company agree to change Executive's position within the Company to a position which, according to the Company's policy, is not eligible for coverage by a Severance Protection Agreement, the Company shall have the right to terminate this Agreement, effective as of the date of such change in position, as long as such change in position is not made within the 12-month period after a Change in Control or under circumstances that would constitute Good Reason. If such change in position is made within the 12-month period after a Change in Control or under circumstances that would constitute Good Reason, this Agreement shall remain in full force and effect. The Company shall terminate this Agreement under this Section 1(b) by providing written notice of such termination to Executive. Termination of this Agreement under the terms of this subparagraph 1(b) shall not serve to terminate Executive's employment with the Company.

        2.    Certain Terminations of Employment Within Twelve (12) Months Following a Change in Control.    

            (a)   If, during the Term, the Executive's employment with the Company and its Affiliates shall be terminated within twelve (12) months following a Change in Control either by the Company without Cause or by the Executive for Good Reason, the Executive shall be entitled to the following compensation:

              (1)   within ten (10) days of the Termination Date, the Company shall pay the Executive all Accrued Compensation and a Pro Rata Bonus;

              (2)   the Company shall pay the Executive as severance pay and in lieu of any further compensation for periods subsequent to the Termination Date, an amount equal to the sum of (A) the Executive's annual base salary (at the rate in effect on the Termination Date or, if greater, at the rate in effect immediately prior to the Change in Control) (the "Base Salary"), and (B) the Executive's Bonus Amount. The amount provided for in this Section 2(a)(2) shall be paid in twelve (12) equal monthly installments commencing on the first day of the calendar



      month following the Termination Date, with each subsequent payment due on the first day of each calendar month thereafter;

              (3)   during the twelve (12) months following the Termination Date (the "Continuation Period"), the Company shall continue on behalf of the Executive and his dependents and beneficiaries the medical, dental, hospitalization, prescription drug, and life insurance coverages and benefits provided to the Executive immediately prior to the Change in Control, assuming the Company continues to provide these benefits generally or, if greater, the coverages and benefits generally provided to similarly situated executives of the Company at any time thereafter. The coverages and benefits (including deductibles and costs) provided in this Section 2(a)(3) during the Continuation Period shall be no less favorable to the Executive and his dependents and beneficiaries than the most favorable of such coverages and benefits referred to above. The Company's obligation hereunder with respect to the foregoing coverages and benefits shall be reduced to the extent that the Executive obtains any such coverages and benefits pursuant to a subsequent employer's benefit plans, in which case the Company may reduce any of the coverages or benefits it is required to provide the Executive hereunder so long as the aggregate coverages and benefits of the combined benefit plans is no less favorable to the Executive than the coverages and benefits required to be provided hereunder. This Section 2(a)(3) shall not be interpreted so as to limit any benefits to which the Executive, his dependents or beneficiaries may be entitled under any of the Company's employee benefit plans, programs or practices following the Executive's termination of employment, including without limitation, retiree medical and life insurance benefits;

              (4)   all nonqualified stock options held by the Executive which are outstanding on the Termination Date shall become fully vested on the Termination Date and, consistent with the Company's historic and current severance policy and practices, all nonqualified stock options held by the Executive which are outstanding on the Termination Date shall remain outstanding through the last day of the Continuation Period unless such options sooner expire by their terms, notwithstanding any contrary provisions contained in the applicable stock option agreements or option plan;

              (5)   the Company shall pay or reimburse the Executive for the costs, fees and expenses (not in excess of $12,000) of executive outplacement assistance services, to be provided during the six (6) months following the Termination Date by any outplacement agency selected by the Executive; and

              (6)   within ten (10) days after the Termination Date, the Company shall pay in a single payment an amount in cash equal to the amount of the annual Company matching contribution made or payable on the Executive's behalf to the Information Resources, Inc. Amended and Restated 401(k) Retirement Savings Plan in respect of the most recently completed plan year of such plan.

            (b)   The Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise and no such payment shall be offset or reduced by the amount of any compensation or benefits provided to the Executive in any subsequent employment except as provided in Section 2(a)(3).

            (c)   The severance pay and benefits provided for in this Section 2 shall be in lieu of any other severance pay to which the Executive may be entitled under any other plan, policy, agreement or arrangement of the Company or any of its Affiliates.

            (d)   If the Executive's employment is terminated by the Company without Cause (x) within six (6) months prior to a Change in Control or (y) at any time prior to a Change in Control which the Executive reasonably demonstrates (A) was at the request of a third party who has indicated an

2



    intention or taken steps reasonably calculated to effect a Change in Control (a "Third Party"), or (B) otherwise arose in connection with, or in anticipation of a Change in Control which has been threatened or proposed, shall be deemed to have occurred after a Change in Control, provided a Change in Control shall actually have occurred.

            (e)   The Executive hereby acknowledges and agrees that the severance pay and benefits provided for in this Section 2 to which the Executive may become entitled are conditioned upon the execution of a general release substantially in the form attached hereto as Exhibit A.

        3.    Effect of Section 280G of the Internal Revenue Code.    (a) Except as provided in Section 3(b), in the event it shall be determined that any payment (other than the payment provided for in this Section 3) or distribution of any type to or for the benefit of the Executive, by the Company, any Affiliate of the Company, any Person who acquires ownership or effective control of the Company or ownership of a substantial portion of the Company's assets (within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), and the regulations thereunder) or any Affiliate of such Person, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the "Payments"), is or will be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are collectively referred to as the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including any income tax, employment tax or Excise Tax, imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

            (b)   Notwithstanding Section 3(a) or any other provision of this Agreement to the contrary, in the event that the Payments (other than the payment provided for in this Section 3) exceed by less than fifty-thousand dollars ($50,000) an amount at which no Payment to be made or benefit to be provided to the Executive would be subject to an Excise Tax, the Executive will not be entitled to a Gross-Up Payment and the Payments shall be reduced (but not below zero) to the extent necessary so that no Payment to be made or benefit to be provided to the Executive shall be subject to the Excise Tax. Unless the Executive shall have given prior written notice to the Company specifying a different order to effectuate the foregoing, the Company shall reduce or eliminate the Payments, first by reducing or eliminating the portion of the Payments (other than Payments as to which the Internal Revenue Service (the "IRS") Proposed Regulations §1.280G-1 Q/A-24(c) applies ("Q/A-24(c) Payments")) which are not payable in cash, second by reducing or eliminating cash payments, and third by reducing Q/A 24(c) Payments, in each case in reverse order beginning with payments or benefits which are to be paid the farthest in time from the "Determination" (as defined below). Any notice given by the Executive pursuant to the preceding sentence shall take precedence over the provisions of any other plan, arrangement or agreement governing the Executive's rights and entitlements to any benefits or compensation.

            (c)   The determination of whether the Payments shall be reduced pursuant to this Agreement and the amount of such reduction, all mathematical determinations, and all determinations as to whether any of the Payments are "parachute payments" (within the meaning of Section 280G of the Code), that are required to be made under this Section 3, including determinations as to whether a Gross-Up Payment is required, the amount of such Gross-Up Payment and amounts referred to in this Section 3(c), shall be made by an independent accounting firm selected by the Executive from among the five (5) largest accounting firms in the United States (the "Accounting Firm"), which shall provide its determination (the "Determination"), together with detailed supporting calculations regarding the amount of any Gross-Up Payment and any other relevant matter, both to the Company and the Executive by no later than ten (10) days following the Termination Date, if applicable, or such earlier time as is requested by the Company or the

3



    Executive (if the Executive reasonably believes that any of the Payments may be subject to the Excise Tax). If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall furnish the Executive and the Company with an opinion reasonably acceptable to the Executive and the Company that no Excise Tax is payable (including the reasons therefor) and that the Executive has substantial authority not to report any Excise Tax on his federal income tax return. If a Gross-Up Payment is determined to be payable, it shall be paid to the Executive within twenty (20) days after the Determination (and all accompanying calculations and other material supporting the Determination) is delivered to the Company by the Accounting Firm. Any determination by the Accounting Firm shall be binding upon the Company and the Executive, absent manifest error. As a result of uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments not made by the Company should have been made ("Underpayment"), or that Gross-Up Payments will have been made by the Company which should not have been made ("Overpayments"). In either such event, the Accounting Firm shall determine the amount of the Underpayment or Overpayment that has occurred. In the case of an Underpayment, the amount of such Underpayment (together with any interest and penalties payable by the Executive as a result of such Underpayment) shall be promptly paid by the Company to or for the benefit of the Executive. The Executive and the Company shall, at the direction and expense of the Company, take such steps as are reasonably necessary (including defending of any claim or assessment by the IRS and the filing of claims for refund), follow reasonable instructions from, and procedures established by, the Company, and otherwise reasonably cooperate with the Company to correct any Overpayment or Underpayment, provided, however, that (i) the Executive shall not in any event be obligated to return to the Company an amount greater than the net after-tax portion of any Overpayment that he has retained or has recovered as a refund from the applicable taxing authorities; (ii) if, in connection with any claim by the IRS that may result in the payment of an additional amount pursuant to this Section 3, the Company requests that the Executive pay to the IRS any amount claimed by the IRS to be due and to file a claim for a refund, the Company shall advance to the Executive the amount of such payment; and (iii) this provision shall be interpreted in a manner consistent with an intent to make the Executive whole, on an after-tax basis, from the application of the Excise Tax, it being understood that the correction of an Overpayment may result in the Executive repaying to the Company an amount which is less than the Overpayment. The cost of all determinations made pursuant to this Section 3 shall be paid by the Company.

        4.    Notice of Termination.    Any intended termination of the Executive's employment by the Company shall be communicated by a Notice of Termination from the Company to the Executive, and any intended termination of the Executive's employment by the Executive with Good Reason shall be communicated by a Notice of Termination from the Executive to the Company.

        5.    Executive Covenants.    

            (a)   Unauthorized Disclosure.    The Executive agrees and understands that in the Executive's position with the Company, the Executive will be exposed to and will receive information relating to the confidential affairs of the Company and its Affiliates, including but not limited to technical information, intellectual property, business and marketing plans, strategies, customer information, other information concerning the products, promotions, development, financing, expansion plans, business policies and practices of the Company and its Affiliates, computer programs and systems, test designs, analytical models, client lists, employee confidential information (i.e. salary, medical and performance reviews), financial data, and other forms of information considered by the Company to be confidential and in the nature of trade secrets ("Confidential Information"). The Executive agrees that during the Term and thereafter, the Executive will not disclose or use for any purpose other than Company business such Confidential Information (other than information which has become publicly available other than by disclosure by the Executive in violation of this Section 5(a)) either directly or indirectly, to any third person or entity without the prior written

4


    consent of the Company. This confidentiality covenant has no temporal, geographical or territorial restriction. Upon termination of the Term, the Executive will promptly return to the Company, and will not retain or copy or reproduce in any manner, all property, keys, notes, memoranda, writings, lists, files, reports, customer lists, correspondence, tapes, disks, cards, surveys, maps, logs, machines, technical data or any other tangible product or document which has been produced by, received by or otherwise submitted to the Executive during or prior to the Term.

            (b)   Work Made for Hire.

              (1)   The Executive recognizes and understands that his duties include or may include the preparation of works, including but not limited to computer software and computer programs and other written or graphic materials, and that each such work has been or will be prepared by the Executive as an employee within the scope of the Executive's employment, and constitutes a "work made for hire" as that phrase is used in 17 U.S.C. § 101 et seq. The Executive understands that the Company is considered the author of each "work made for hire" and exclusively owns all of the rights to such work. The Executive understands that as owner of each copyright, the Company has the exclusive rights to use, reproduce, distribute and publicly display the work. Without limiting the foregoing, to the extent necessary, the Executive assigns and agrees to assign all intellectual property rights in all such works, including but not limited to computer software and computer programs and other written or graphic materials, and agrees to execute all documents necessary to effectuate such assignments.

              (2)   The Executive will promptly disclose to his immediate supervisor or to any persons designated by the Company all inventions, discoveries, improvements, works of authorship, computer programs, machines, methods of analysis, concepts, formulas, compositions, ideas, designs, processes, techniques, know-how and data, or other intellectual property reduced to any tangible form, whether or not patentable (collectively "Inventions") made or conceived or reduced to practice or developed by the Executive, either alone or jointly with others, during the term of the Executive's employment. The Executive will also disclose to the Company Inventions conceived, reduced to practice, or developed by him within six months of the termination of his employment with the Company; such disclosures shall be received by the Company in confidence (to the extent they are not assigned under this Agreement) and do not extend the assignment made in this Agreement. The Executive agrees to keep and maintain adequate and current written records of all Inventions made by the Executive (in the form of notes, sketches, drawings and other records as may be specified by the Company), which records shall be available to and remain the sole property of the Company at all times.

              (3)   The Executive agrees to perform, during and after his employment, all acts deemed necessary or desirable by the Company to permit and assist the Company, at the Company's sole expense, in evidencing, perfecting, obtaining, maintaining, defending and enforcing the Company's rights and/or the Executive's assignment with respect to such Inventions in any and all countries.

              (4)   The Executive understands that any Invention which he develops entirely on his own time not using any of the Company's equipment, supplies, facilities, or trade secret information ("Personal Invention") is excluded from this Agreement provided such Personal Invention (i) does not relate at the time of conception or reduction to practice to the Company's business, or research or development of the Company; and (ii) does not result from any work performed by the Executive for the Company. It is understood that all Personal Inventions made by the Executive prior to his employment by the Company are excluded from this Agreement. The Executive agrees to notify the Company in writing before making any disclosure or performing work on behalf of the Company which appears to

5



      threaten or conflict with proprietary rights the Executive claims in any Personal Invention. In the event of the Executive's failure to give such notice, the Executive agrees that he will make no claim against the Company with respect to any such Personal Invention.

              (c)   Non-competition.    By and in consideration of the Company's entering into this Agreement and the payments to be made and benefits to be provided by the Company hereunder, and further in consideration of the Executive's exposure to the Confidential Information of the Company, the Executive agrees that the Executive will not, during the Term, and thereafter during the "Non-competition Period" (as defined below), without the prior written consent of the Company, directly or indirectly, for himself or for others, individually, jointly as a partner, stockholder (except as a holder of not more than five percent (5%) of the outstanding shares of a publicly-held corporation), officer, director, employee, agent or consultant, accept employment with or serve as a consultant, advisor or in any other capacity to any of the following named competitors of the Company (or any parent, subsidiary, affiliate, successor or assign of any such competitor): Efficient Market Services (EMS), the A.C. Nielsen Company, Intactix, or Spectra Marketing. Following termination of the Executive's employment, upon request of the Company, the Executive shall notify the Company of the Executive's then current employment status. For purposes of this Agreement, the "Non-competition Period" shall mean the period beginning on the Termination Date and ending on the second (2nd) anniversary of such date. Any material breach of the terms of this Section 5(c) shall constitute Cause.

              (d)   Non-solicitation.    The Executive further agrees that, during the Term, and thereafter, during the Non-competition Period, without the prior written consent of the Company, he will not, directly or indirectly, for himself or for others, individually, jointly as a partner, stockholder, officer, director, employee, agent or consultant, cause any other person to, induce, attempt to induce, participate in or facilitate, by referral to another individual or otherwise, the inducing of or attempt to induce, of any employee, consultant, sales representative or other personnel of the Company, who is then, or at any time during the preceding year was employed by the Company, to terminate or alter his relationship with the Company or to breach his agreements with the Company, or to perform work or services for the Executive, a competitor of the Company, or any other company or entity which the Executive serves, creates, acts as a consultant for, or with which the Executive obtains employment.

              (e)   Remedies.    The Executive agrees that any breach of the terms of this Section 5 would result in irreparable injury and damage to the Company or any of its Affiliates, for which the Company or any of its Affiliates would have no adequate remedy at law; the Executive therefore also agrees that in the event of said breach or any threat of breach, the Company or any of its Affiliates, as applicable, shall be entitled to an immediate injunction and restraining order to prevent such breach and/or threatened breach and/or continued breach by the Executive and/or any and all persons and/or entities acting for and/or with the Executive, without having to prove damages, in addition to any other remedies to which the Company or any of its Affiliates may be entitled at law or in equity. The terms of this Section 5(e) shall not prevent the Company or any of its Affiliates from pursuing any other available remedies for any breach or threatened breach hereof, including but not limited to the recovery of damages from the Executive. The Executive and the Company further agree that the provisions of the covenants contained in this Section 5 are reasonable and necessary to protect the businesses of the Company or any of its Affiliates because of the Executive's access to Confidential Information and his material participation in the operation of such businesses. The Executive hereby acknowledges that due to the global aspects of the Company's and its Affiliates' businesses and competitors it would not be appropriate to include any geographic limitation

6



      on this Section 5. Should a court or arbitrator determine, however, that any provision of the covenants contained in this Section 5 is not reasonable or valid, either in period of time, geographical area, or otherwise, the parties hereto agree that such covenants should be interpreted and enforced to the maximum extent which such court or arbitrator deems reasonable or valid. The Executive agrees to pay all of the Company's attorney fees and costs associated with the Company's efforts to enforce the covenants contained in this Agreement.

        6.    Fees and Expenses.    The Company shall pay all arbitration fees and reasonable legal fees and related expenses not in excess of $6,000 (including the costs of experts, evidence and counsel) incurred in good faith by the Executive as they become due as a result of (a) the Executive's termination of employment (including all such fees and expenses, if any, incurred in contesting or disputing any such termination of employment), (b) the Executive's seeking to obtain or enforce any right or benefit provided by this Agreement or by any other plan or arrangement maintained by the Company under which the Executive is or may be entitled to receive benefits, or (c) the Executive's hearing before the Board as contemplated in Section 19(d) of this Agreement; provided, however, that the obligation of the Company to pay any fees and expenses pursuant to either of clauses (a) or (b) of this Section 6 shall apply only if the circumstances giving rise to the claim occurred on or after a Change in Control.

        7.    Non-exclusivity of Rights.    Except as provided in Section 2(c), nothing in this Agreement shall prevent or limit the Executive's continuing or future participation in any benefit, bonus, incentive or other plan or program provided by the Company or any of its Affiliates for which the Executive may qualify, nor shall anything herein limit or reduce such rights as the Executive may have under any other agreements with the Company or any of its Affiliates. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan or program of the Company or any of its Affiliates shall be payable in accordance with such plan or program, except as explicitly modified by this Agreement.

        8.    Settlement of Claims.    The Company's obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, defense, recoupment, or other right which the Company may have against the Executive or others.

        9.    Miscellaneous.    No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreement or representation, oral or otherwise, express or implied, with respect to the subject matter hereof has been made by either party which is not expressly set forth in this Agreement.

        10.    Non-Waiver of Rights.    The failure to enforce at any time the provisions of this Agreement or to require at any time performance by any other party of any of the provisions hereof shall in no way be construed to be a waiver of such provisions or to affect either the validity of this Agreement or any part hereof, or the right of any party to enforce each and every provision in accordance with its terms.

        11.    Notice.    For the purposes of this Agreement, notices and all other communications provided for in the Agreement (including the Notice of Termination) shall be in writing and shall be delivered in person, by telecopier (with confirmation of receipt) or by United States mail, postage prepaid, certified or registered, addressed to the Company at its principal office to the attention of the General Counsel, or to the Executive either at his residence address shown on the employment records of the Company or in care of the principal office of the Company. All notices and communications shall be deemed to have been received on the date of delivery thereof or on the third business day after the mailing thereof, except that notice of change of address shall be effective only upon receipt.

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        12.    Successors and Assigns.    (a) This Agreement shall be binding upon and shall inure to the benefit of the Company and its Successors and Assigns, and the Company shall require any Successor or Assign to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no succession or assignment had taken place. The term "Company" as used herein shall include such Successors and Assigns.

            (b)   Neither this Agreement nor any right or interest hereunder shall be assignable or transferable by the Executive, his beneficiaries or his legal representatives, except by will or by the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal personal representative.

        13.    Entire Agreement.    This Agreement constitutes the entire agreement between the parties hereto and supersedes all prior agreements, understandings and arrangements, oral or written, between the parties hereto with respect to the subject matter hereof, including, without limitation, any provisions contained in an employment agreement, letter agreement or any other agreement between the Company and Executive that pertain to severance and other benefits to which Executive might be entitled in the event of termination following a change in control

        14.    Severability.    If any provision of this Agreement, or any application thereof to any circumstances, is invalid, in whole or in part, such provision or application shall to that extent be severable and shall not affect other provisions or applications of this Agreement.

        15.    Arbitration.    The Executive and the Company hereby agree that any dispute arising under this Agreement or any claim for breach or violation of any provision of this Agreement will be submitted for arbitration in accordance with the rules of the American Arbitration Association (the "AAA") to a single arbitrator selected by mutual agreement between the Executive and the Company (or, if the Executive and the Company cannot mutually agree on an arbitrator, in accordance with the rules of the AAA). All determinations of the arbitrator will be final and binding upon the Executive and the Company. The venue for all proceedings in arbitration under this Section 15, and for any judicial proceedings related to the arbitration, will be in Chicago, Illinois.

        16.    Governing Law.    This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Illinois without giving effect to the conflict of law principles thereof.

        17.    Headings.    The headings contained herein are solely for purposes of reference, are not part of this Agreement and shall not in any way affect the meaning or interpretation of this Agreement.

        18.    Counterparts.    This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.

        19.    Definitions.    As used in this Agreement, the following terms shall have the following meanings:

            (a)   "Accrued Compensation" shall mean the following amounts of compensation for services rendered to the Company or any of its Affiliates that have been earned through the Termination Date but that have not been paid as of the Termination Date: (1) Base Salary; (2) reimbursement for reasonable and necessary business expenses incurred by the Executive on behalf of the Company or any of its Affiliates during the period ending on the Termination Date; (3) vacation pay; and (4) bonuses and incentive compensation.

            (b)   "Affiliate" shall mean any entity, directly or indirectly, controlled by, controlling or under common control with the Company.

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            (c)   "Bonus Amount" shall mean, as of the Termination Date, the greater of (x) the highest annual bonus paid or payable in respect of any of the three (3) full fiscal years of the Company immediately preceding the Termination Date, and (y) the Executive's targeted bonus amount for the year in which the Termination Date occurs under the Company's Management Incentive Plan (the "MIP"), if in place, or any other annual incentive compensation plan of the Company which may succeed or replace the MIP.

            (d)   "Cause" shall mean:

              (1)   the continued failure of the Executive to substantially perform the Executive's duties with the Company or one of its Affiliates (other than any such failure resulting from incapacity due to physical or mental illness or from the assignment to the Executive of duties that would constitute Good Reason), after a written demand for substantial performance is delivered to the Executive by the Board or the Chief Executive Officer of the Company which specifically identifies the manner in which the Board or Chief Executive Officer believes that the Executive has not substantially performed the Executive's duties, or

              (2)   the willful engaging by the Executive in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Company, or

              (3)   the conviction of a felony, or entry of a guilty or nolo contendere plea by the Executive with respect thereto.

            For purposes of this Section 19(d), no act or failure to act, on the part of the Executive, shall be considered "willful" unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive's action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or upon the instructions of the Chief Executive Officer or a senior executive officer of the Company or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company.

            (e)   "Change in Control" shall mean the occurrence of any of the following:

              (1)   An acquisition (other than directly from the Company) of any voting securities of the Company (the "Voting Securities") by any "Person" (as the term person is used for purposes of Section 13(d) or 14(d) of the Exchange Act), immediately after which such Person has "Beneficial Ownership" (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of thirty percent (30%) or more of the then outstanding common stock, par value $.01 per share, of the Company ("Common Stock") or other Voting Securities, or the combined voting power of the Company's then outstanding Voting Securities; provided, however, that in determining whether a Change in Control has occurred pursuant to this Section 19(e), shares of Common Stock or Voting Securities which are acquired in a "Non-Control Acquisition" (as hereinafter defined) shall not constitute an acquisition which would cause a Change in Control. A "Non-Control Acquisition" shall mean an acquisition by (i) an employee benefit plan (or a trust forming a part thereof) maintained by (A) the Company or (B) any Company or other Person of which a majority of its voting power or its voting equity securities or equity interest is owned, directly or indirectly, by the Company (for purposes of this definition, a "Related Entity"), (ii) the Company or any Related Entity, or (iii) any Person in connection with a "Non-Control Transaction" (as hereinafter defined);

              (2)   The individuals who, as of the date of this Agreement are members of the Board (the "Incumbent Board"), cease for any reason to constitute at least a majority of the members of the Board or, following a Merger which results in a Parent Company (as defined in paragraph (3)(i)(A) below), the board of directors of the ultimate Parent Company;

9



      provided, however, that if the election, or nomination for election by the Company's common stockholders, of any new director was approved by a vote of a majority of the Incumbent Board, such new director shall, for purposes of this Agreement, be considered as a member of the Incumbent Board; provided further, however, that no individual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of either an actual or threatened "Election Contest" (as described in Rule 14a-11 promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board (a "Proxy Contest") including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest; or

              (3)   The consummation of:

                  (i)  A merger, consolidation or reorganization with or into the Company or in which securities of the Company are issued (a "Merger"), unless such Merger is a "Non-Control Transaction." A "Non-Control Transaction" shall mean a Merger in which:

                  (A)  the stockholders of the Company immediately before such Merger own directly or indirectly immediately following such Merger at least fifty percent (50%) of the combined voting power of the outstanding voting securities of (x) the Company resulting from such Merger (the "Surviving Company") if fifty percent (50%) or more of the combined voting power of the then outstanding voting securities of the Surviving Company is not Beneficially Owned, directly or indirectly by another Person (a "Parent Company"), or (y) if there is one or more Parent Companies, the ultimate Parent Company; and

                  (B)  the individuals who were members of the Incumbent Board immediately prior to the execution of the agreement providing for such Merger constitute at least a majority of the members of the board of directors of (x) the Surviving Company, if there is no Parent Company, or (y) if there is one or more Parent Companies, the ultimate Parent Company; and

                  (C)  no Person other than (1) the Company, (2) any Related Entity, (3) any employee benefit plan (or any trust forming a part thereof) that, immediately prior to such Merger was maintained by the Company or any Related Entity, or (4) any Person who, immediately prior to such Merger had Beneficial Ownership of thirty percent (30%) or more of the then outstanding Common Stock or Voting Securities, has Beneficial Ownership of thirty percent (30%) or more of the combined voting power of the outstanding voting securities or common stock of (x) the Surviving Company if there is no Parent Company, or (y) if there is one or more Parent Companies, the ultimate Parent Company.

                 (ii)  A complete liquidation or dissolution of the Company; or

                (iii)  The sale or other disposition of all or substantially all of the assets of the Company to any Person (other than (A) a transfer to a Related Entity or under conditions that would constitute a Non-Control Transaction with the disposition of assets being regarded as a Merger for this purpose or (B) the distribution to the Company's stockholders of the stock of a Related Entity or any other assets).

            Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because any Person (the "Subject Person") acquired Beneficial Ownership of more than the permitted amount of the then outstanding Common Stock or Voting Securities as a result of the acquisition of Common Stock or Voting Securities by the Company which, by reducing the number of Common Stock or Voting Securities then outstanding, increases the proportional number of shares Beneficially Owned by the Subject Persons, provided that if a Change in Control would

10


    occur (but for the operation of this sentence) as a result of the acquisition of Common Stock or Voting Securities by the Company, and after such share acquisition by the Company, the Subject Person becomes the Beneficial Owner of any additional Common Stock or Voting Securities which increases the percentage of the then outstanding Common Stock or Voting Securities Beneficially Owned by the Subject Person, then a Change in Control shall occur.

            (f)    "Disability" shall mean a physical or mental infirmity that constitutes a disability entitling the Executive to long-term disability benefits under the applicable Company long-term disability plan, or in the absence of such a plan, shall mean the inability of the Executive to perform his duties, services and responsibilities hereunder by reason of a physical or mental infirmity, as reasonably determined by the Board, for a total of 180 calendar days in any twelve-month period during the Term.

            (g)   "Good Reason" shall mean the occurrence after a Change in Control of any of the following events or conditions, provided that the Executive provides a Notice of Termination within sixty (60) days after the occurrence of such event or condition:

              (1)   a change in the Executive's status, title, position or responsibilities (including reporting responsibilities) which represents an adverse change from his status, title, position or responsibilities as in effect immediately prior thereto; the assignment to the Executive of any duties or responsibilities which are inconsistent with his status, title or position as in effect immediately prior thereto; or any removal of the Executive from or failure to reappoint or reelect him to any of such positions, except in connection with the termination of his employment for Disability, Cause, as a result of his death or by the Executive other than for Good Reason;

              (2)   a reduction in the Executive's annual Base Salary as in effect on the date of the Change in Control or as it may be increased thereafter;

              (3)   the relocation of the offices of the Company at which the Executive is principally employed to a location more than forty (40) miles farther from the Executive's principal residence than the location of such offices immediately prior to the Change in Control, or the requirement that the Executive be based anywhere other than such offices, except to the extent the Executive was not previously assigned to a principal location and except for required travel on the business of the Company to an extent substantially consistent with the Executive's business travel obligations at the time of the Change in Control;

              (4)   the failure by the Company to pay to the Executive any portion of the Executive's current compensation or to pay to the Executive any portion of an installment of deferred compensation under any deferred compensation program of the Company in which the Executive participated, within seven (7) days of the date such compensation is due;

              (5)   the failure by the Company or any Affiliate to (i) continue in effect (without reduction in benefit level and/or reward opportunities) any material compensation, employee benefit or fringe benefit plan program or practice in which the Executive was participating immediately prior to the Change in Control, unless a substitute or replacement plan has been implemented which provides substantially identical compensation or benefits to the Executive or (ii) provide the Executive with compensation and benefits, in the aggregate, at least equal (in terms of benefit levels and/or reward opportunities) to those provided for under each other compensation, employee benefit or fringe benefit plan, program or practice in which the Executive was participating immediately prior to the Change in Control;

              (6)   the failure of the Company to obtain from its Successors and Assigns the express assumption of this Agreement; or

11



              (7)   any purported termination of the Executive's employment by the Company which is not effected pursuant to a Notice of Termination, and in the event of a purported termination for Cause, the failure of the Company to follow the procedure set forth in Section 19(d).

        Any event or condition described in Section 19(g)(1) through (7) or any purported termination of this Agreement pursuant to Section 1(b) which occurs (x) within six (6) months prior to a Change in Control or (y) at any time prior to a Change in Control but which the Executive reasonably demonstrates (A) was at the request of a Third Party, or (B) otherwise arose in connection with, or in anticipation of a Change in Control which has been threatened or proposed, shall constitute Good Reason for purposes of this Agreement notwithstanding that it occurred prior to the Change in Control, provided a Change in Control shall actually have occurred.

            (h)   "Notice of Termination" shall mean a written notice of termination of the Executive's employment, signed by the Executive if to the Company or by a duly authorized officer of the Company if to the Executive, which indicates the specific termination provision in this Agreement, if any, relied upon and which sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated. Any purported termination by the Company or by the Executive shall be communicated by written Notice of Termination to the other. For purposes of this Agreement, no such purported termination of employment shall be effective without such Notice of Termination.

            (i)    "Pro Rata Bonus" shall mean the Bonus Amount multiplied by a fraction, the numerator of which is the number of days in the year in which the Termination Date occurs through the Termination Date, and the denominator of which is three hundred and sixty-five (365).

            (j)    "Successors and Assigns" shall mean a corporation or other entity with which the Company may be merged or consolidated or which acquires all or substantially all the assets and business of the Company, whether by operation of law or otherwise.

            (k)   "Termination Date" shall mean the date specified in the Notice of Termination (which, in the case of a termination for Cause shall not be less than thirty (30) days and, in the case of a termination for Good Reason shall not be more than sixty (60) days, from the date such Notice of Termination is given).

        IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by authority of its Board of Directors, and the Executive has hereunto set his hand, on the day and year first above written.

    INFORMATION RESOURCES, INC.

 

 

By:

 
     
Name:  
Title:      

 

 

[                                                           ]

 

 

 

 
     

12


Exhibit A

General Release

        For good and valuable consideration, the receipt and sufficiency of which is acknowledged hereby, the Executive, with the intention of binding himself and his heirs, executors, administrators and assigns, does hereby release, remise, acquit and forever discharge Information Resources, Inc., a Delaware corporation (the "Company"), and its present and former officers, directors, executives, agents, attorneys, employees, affiliated companies, divisions, subsidiaries, successors, predecessors and assigns (collectively the "Released Parties"), of and from any and all claims, actions, causes of action, demands, rights, damages, debts, sums of money, accounts, financial obligations, suits, expenses, attorneys' fees and liabilities of whatever kind or nature in law, equity or otherwise, whether now known or unknown, suspected or unsuspected, which the Executive, individually or as a member of a class, now has, owns or holds, or has at any time heretofore had, owned or held, against any Released Party arising out of or in any way connected with the Executive's employment relationship with the Company, its subsidiaries, predecessors or affiliated entities, or the termination thereof, including without limitation, any claims for severance or vacation benefits, unpaid wages, salary or incentive payment, breach of contract, wrongful discharge, impairment of economic opportunity, intentional infliction of emotional harm or other tort, or employment discrimination under any applicable federal, state or local statute, provision, order or regulation including, but not limited to, any claim under Title VII of the Civil Rights Act ("Title VII"), the Federal Age Discrimination in Employment Act ("ADEA") and any similar or analogous state statute excepting only:

        A.    those obligations of the Company under that certain Severance Protection Agreement between the Company and the Executive dated as of May 19, 2000 (the "Agreement"), pursuant to which this General Release is being executed and delivered;

        B.    any rights to indemnification the Executive may have under applicable corporate law, the by-laws or certificate of incorporation of any Released Party or as an insured under any Director's and Officer's liability insurance policy now or previously in force; and

        C.    any claims for benefits under any employee benefit plan of the Company (within the meaning of Section 3(3) of the Employee Income Security Act of 1974, as amended).

        The Executive acknowledges and agrees that neither the Agreement nor this General Release is to be construed in any way as an admission of any liability whatsoever by any Released Party under Title VII, ADEA or any other federal or state statute or the principals of common law, any such liability having been expressly denied.

        The Executive acknowledges and agrees that he has not, with respect to any transaction or state of facts existing prior to the date of execution of this General Release, filed any complaints, charges or lawsuits against any of the Released Parties with any governmental agency or any court or tribunal.

        The Executive further declares and represents that he has carefully read and fully understands the terms of this General Release and the Agreement, that he has been given not less than twenty-one (21) days to consider this General Release, that he has been advised to seek, and has had the opportunity to seek, the advice and assistance of counsel with regard to this General Release and the Agreement, and that he knowingly and voluntarily, of his own free will, without any duress, being fully informed and after due deliberate thought and action, accepts the terms of and signs the same as his own free act.

        The Executive acknowledges and understands that he may revoke this General Release within seven (7) days of signing it by sending a written notice of revocation to                         . The Executive understands that for this revocation to be effective, written notice must be received by            at the

13



above address no later than 5:00 p.m. on the seventh (7th) day after the day the Executive signs the General Release. The Executive further understands that if he revokes this Release, it shall not be effective or enforceable and he will not receive any payments provided for in the Agreement that have not then been paid. This General Release shall be final and binding on the eighth (8th) day after it has been executed and delivered to the Company.


 

 

 

 

 

 

 


Executive

STATE OF



 

)

 

 

 

 
      )   SS.    
COUNTY OF
  )        

        On this    day of                        , 2000, before me personally appeared                        , to me known to be the person described in and who executed the General Release and acknowledged that he executed the same as his free act and deed.

        IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal in the County and State aforesaid, the day and year first above written.


 

 


Notary Public

My Commission Expires:

 

 

14




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EX-99.(E)(7) 5 a2114556zex-99_e7.htm EXHIBIT (E)(7)
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Exhibit (e)(7)

INFORMATION RESOURCES, INC.
OFFICERSHIP AGREEMENT

        This Agreement is made as of [insert date], 2003, by and between Information Resources, Inc., a Delaware corporation (the "Corporation"), and the individual whose name and signature appears on the last page hereof under the heading "Officer," an Officer of the Corporation (the "Officer").

        WHEREAS, it is essential to the Corporation that it attract and retain as officers the most capable persons available and persons who have significant experience in business, corporate and financial matters; and

        WHEREAS, the Corporation has identified the Officer as a person possessing the background and abilities desired by the Corporation and desires the Officer to serve as an Officer of the Corporation; and

        WHEREAS, the substantial increase in corporate litigation may, from time to time, subject Officers to burdensome litigation, the risks of which frequently far outweigh the advantages of serving in such capacity; and

        WHEREAS, the cost and availability of directors' and officers' liability insurance has not only fluctuated widely over time, but such insurance frequently contains express or implied limitations on coverage of specific risks and may involve protracted claims procedures that prevent the timely payment or reimbursement of losses incurred by directors and officers in their own defense, or by the Company on their behalf; and

        WHEREAS, the Corporation and the Officer recognize that serving as an Officer of a corporation at times calls for subjective evaluations and judgments upon which reasonable persons may differ and that, in that context, it is anticipated and expected that Officers of corporations will and do from time to time commit actual or alleged errors or omissions in the good faith exercise of their duties and responsibilities; and

        WHEREAS, it is now and has always been the express policy of the Corporation to indemnify its Officers to the fullest extent permitted by law; and

        WHEREAS, the Corporation and the Officer desire to articulate clearly in contractual form, their respective rights and obligations with regard to the Officer's service on behalf of the Corporation and with regard to claims for loss, liability, expense or damage which, directly or indirectly, may arise out of or relate to such service,

        NOW, THEREFORE, the Corporation and the Officer agree as follows:

        1.    Agreement to Serve

        The Officer shall serve as an Officer of the Corporation for as long as the Officer is duly elected or appointed or until said Officer tenders a resignation in writing.

        2.    Definitions

        As used in this Agreement:

            (a)   The term "Proceeding" includes, without limitation, any threatened, pending or completed action, suit or proceeding, whether brought in the right of the Corporation or otherwise and whether of a civil, criminal, administrative or investigative nature, in which the Officer may be, may become, or may have been involved as a party, witness or otherwise, by reason of the fact that the Officer is or was an Officer of the Corporation, or is or was serving at the request of the

1


    Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, whether or not serving in such capacity at the time any liability or expense is incurred for which exculpation, indemnification or reimbursement can be provided under this Agreement.

            (b)   The term "Expenses" includes, without limitation, expenses of investigations, judicial or administrative proceedings or appeals, attorney, accountant and other professional fees and disbursements and any expenses of establishing a right to indemnification under Section 12 of this Agreement, but shall not include amounts paid in settlement by the Officer or the amount of judgments or fines against the Officer.

            (c)   References to "other enterprise" include, without limitation, employee benefit plans; references to "fines" include, without limitation, any excise tax assessed with respect to any employee benefit plan; references to "serving at the request of the Corporation" include, without limitation, any service as a director, officer, employee or agent which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants, or its beneficiaries; and a person who acted in good faith and in a manner reasonably believed to be in the interest of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the Corporation" as referred to in this Agreement.

        3.    Limitation of Liability

            (a)   To the fullest extent permitted by law, the Officer shall have no monetary liability of any kind or nature with respect to the Officer's conduct in serving the Corporation or any of its subsidiaries, their respective stockholders or any other enterprise at the request of the Corporation, except that this Section 3(a) shall not affect liability of the Officer for:

        (i)
        any breach of the Officer's duty of loyalty to the Corporation, such subsidiaries, stockholders or enterprises;

        (ii)
        any act or omission not in good faith or which involved intentional misconduct or a knowing violation of law;

        (iii)
        any transaction from which the Officer derived an improper personal benefit; or

        (iv)
        any unlawful payment of dividends.

            (b)   Without limiting the generality of (a) above and to the fullest extent permitted by law, the Officer shall have no personal liability to the Corporation or any of its subsidiaries, their respective stockholders or any other person claiming derivatively through the Corporation or a subsidiary of the Corporation, regardless of the theory or principle under which such liability may be asserted, for:

        (i)
        punitive, exemplary or consequential damages;

        (ii)
        treble or other damages computed based upon any multiple of damages actually and directly proved to have been sustained;

        (iii)
        fees of attorneys, accountants, expert witnesses or professional consultants; or

        (iv)
        civil fines or penalties of any kind or nature whatsoever.

        4.    Indemnity in Third Party Proceedings

        The Corporation shall indemnify the Officer in accordance with the provisions of this Section 4, if the Officer is made a party to any Proceeding (other than a Proceeding by or in the right of the Corporation to procure a judgment in its favor), against all Expenses, judgments, fines and amounts paid in settlement, actually and reasonably incurred by the Officer in connection with such Proceeding

2



if the conduct of the Officer was in good faith and the Officer reasonably believed that the Officer's conduct was in, or not opposed to, the best interests of the Corporation, and, in the case of a criminal proceeding, the Officer, in addition, had no reasonable cause to believe that the Officer's conduct was unlawful. However, the Officer shall not be entitled to indemnification under this Section 4 in connection with any Proceeding charging improper personal benefit to the Officer in which the Officer was adjudged liable on the basis that personal benefit was improperly received by the Officer unless and only to the extent that the court conducting such Proceeding or any other court of competent jurisdiction determines, upon application, that despite the adjudication of liability, the Officer is fairly and reasonably entitled to indemnification in view of all the relevant circumstances.

        5.    Indemnity in Proceedings by or in the Right of the Corporation

        The Corporation shall indemnify the Officer in accordance with the provisions of this Section 5, if the Officer is made a party to any Proceeding by or in the right of the Corporation to procure a judgment in its favor, against all Expenses actually and reasonably incurred by the Officer in connection with such Proceeding if the conduct of the Officer was in good faith and the Officer reasonably believed that the Officer's conduct was in the best interests of the Corporation, or at least, not opposed to its best interests. However, the Officer shall not be entitled to indemnification under this Section 5 in connection with any issue, claim or matter in a Proceeding to the extent that the Officer has been adjudged liable to the Corporation with respect to such issue, claim or matter, unless and only to the extent that the court conducting such Proceeding or any other court of competent jurisdiction determines upon application, that, despite the adjudication of liability, the Officer is fairly and reasonably entitled to indemnification in view of all the relevant circumstances.

        6.    Indemnification of Expenses of Successful Party

        Notwithstanding any other provisions of this Agreement, to the extent that the Officer has been successful, on the merits or otherwise, in defense of any Proceeding or in defense of any claim, issue or matter therein, the Corporation shall indemnify the Officer against all Expenses incurred in connection therewith.

        7.    Additional Indemnification

            (a)   Notwithstanding any limitation in Sections 4, 5 or 6, the Corporation shall indemnify the Officer to the fullest extent permitted by law, with respect to any Proceeding (including a Proceeding by or in the right of the Corporation to procure a judgment in its favor), against all Expenses, judgment, fines and amounts paid in settlement, actually and reasonably incurred by the Officer in connection with such Proceeding, except that the Officer shall not be entitled to indemnification under this Section 7(a) on account of liability for:

        (i)
        any breach of the Officer's duty of loyalty to the Corporation or any of its subsidiaries, their respective stockholders, or any other enterprise that the Officer was serving at the request of the Corporation at the time of such breach;

        (ii)
        any act or omission not in good faith or which involved intentional misconduct or a knowing violation of law; or

        (iii)
        any transaction from which the Officer derived an improper personal benefit.

            (b)   Notwithstanding any limitation in Sections 4, 5, 6 or 7(a), the Corporation shall indemnify the Officer to the fullest extent permitted by law with respect to any Proceeding (including a Proceeding by or in the right of the Corporation to procure a judgment in its favor) against all Expenses, judgment, fines and amounts paid in settlement, actually and reasonably incurred by the Officer in connection with such Proceeding.

3


        8.    Exclusions

        Notwithstanding any provision in this Agreement, the Corporation shall not be obligated under this Agreement to make any indemnification in connection with any claim made against the Officer:

            (a)   to the extent to which any payment has been made to or on behalf of the Officer under any insurance policy or indemnity arrangement, except with respect to any excess amount to which the Officer is entitled under this Agreement beyond the amount of payment under such insurance policy or arrangement;

            (b)   if a court having jurisdiction in the matter finally determines that such indemnification is not lawful under any applicable statute or public policy (and, in this respect, both the Corporation and the Officer have been advised that in the opinion of the Securities and Exchange Commission indemnification for liabilities arising under the Securities Act of 1933 is against public policy and is, therefore, unenforceable and that claims for such indemnification should be submitted to appropriate courts for adjudication unless, in the opinion of counsel, the matter has been settled by controlling precedent); or

            (c)   in connection with any Proceeding (or part of any Proceeding) initiated by the Officer, or any Proceeding by the Officer against the Corporation or its directors, officers, employees or other persons entitled to be indemnified by the Corporation, unless (i) the Corporation is expressly required by law to make the indemnification, (ii) the Proceeding was authorized by the Board of Directors of the Corporation, or (iii) the Officer initiated the Proceeding pursuant to Section 12 of this Agreement and the Officer is successful in whole or in part in the Proceeding.

        9.    Advances of Expenses

        The Corporation shall pay the Expenses incurred by the Officer in any Proceeding in advance of the final disposition of the Proceeding at the written request of the Officer, if the Officer:

            (a)   furnishes the Corporation a written affirmation of the Officer's good faith belief that the Officer is entitled to be indemnified under this Agreement; and

            (b)   furnishes the Corporation a written undertaking to repay the advance to the extent that it is ultimately determined that the Officer is not entitled to be indemnified by the Corporation. Such undertaking shall be an unlimited general obligation of the Officer but need not be secured, except as otherwise provided herein.

        Advances pursuant to this Section 9 shall be made no later than ten days after receipt by the Corporation of the affirmation and undertaking described in Sections 9(a) and 9(b) above, and, except as provided in Section 11, shall be made without regard to the Officer's ability to repay the amount advanced and without regard to the Officer's ultimate entitlement to indemnification under this Agreement. The Corporation may establish a trust, escrow account or other secured funding source for the payment of advances made and to be made pursuant to this Section 9 or of other liability incurred by the Officer in connection with any Proceeding.

        10.    Nonexclusivity and Continuity of Rights

        The indemnification, advancement of Expenses and exculpation from liability provided by this Agreement shall not be deemed exclusive of any other rights to which the Officer may be entitled under any other agreement, any articles of incorporation, bylaws or vote of shareholders or directors, or otherwise, both as to action in the Officer's official capacity and as to action in another capacity while holding such office. The indemnification under this Agreement shall cover the Officer's service as an officer and all of his acts in such capacity, whether prior to or on or after the date of this Agreement, and such indemnification shall continue as to the Officer even though the Officer may have ceased to be Officer of the Corporation or a director, officer, employee or agent of an enterprise

4


related to the Corporation and shall inure to the benefit of the heirs, executors, administrators and personal representatives of the Officer.

        11.    Procedure Upon Application for Indemnification

        Any indemnification under Sections 4, 5, 6 or 7 shall be made no later than 45 days after receipt of the written request of the said Officer, unless a determination is made within such 45 day period by (a) the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to the applicable Proceeding, even though less than a quorum; (b) a committee of such directors designated by a majority vote of such directors, even though less than a quorum; (c) independent legal counsel in a written opinion or (d) a majority vote of the shareholders that, on the basis of facts then known, the said Officer is not entitled to indemnification under this Agreement. In the event that the Board of Directors, committee, independent counsel or shareholders, as the case may be, determine that they cannot reasonably determine entitlement to indemnification within the 45 day period, the Officer shall be entitled to an advancement of the amount of the indemnification requested, subject to such security for repayment as the board of directors may require.

        12.    Enforcement

        The Officer may enforce any right to indemnification or advances provided by this Agreement in any court of competent jurisdiction if (a) the Corporation denies the claim for indemnification or advances, in whole or in part, or (b) the Corporation does not dispose of such claim within the time period required by this Agreement. It shall be a defense to any such enforcement action (other than an action brought to enforce a claim for advancement of Expenses pursuant to, and in compliance with, Section 9 of this Agreement) that the Officer is not entitled to indemnification under this Agreement. However, except as provided in Section 13 of this Agreement, the Corporation shall have no defense to an action brought to enforce a claim for advancement of Expenses pursuant to Section 9 of this Agreement if the Officer has tendered to the Corporation the affirmation and undertaking required thereunder. The burden of proving by clear and convincing evidence that indemnification is not appropriate shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors or independent legal counsel) to have made a determination prior to the commencement of such action that indemnification or advancement of Expenses is proper in the circumstances because the Officer has met the applicable standard of conduct nor an actual determination by the Corporation (including its Board of Directors or independent legal counsel) that indemnification is improper because the said Officer has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the Officer is not entitled to indemnification under this Agreement or otherwise. The Officer's Expenses incurred in connection with successfully establishing the Officer's right to indemnification, advances or exculpation, in whole or in part, in any Proceeding shall also be indemnified by the Corporation.

        The termination of any Proceeding by judgment, order of court, settlement, conviction or upon a plea of nolo contendere, or its equivalent, shall not, of itself, create a presumption that (a) the Officer is not entitled to indemnification under Sections 4, 5 or 7 of this Agreement, or (b) the Officer is not entitled to exculpation under Section 3 of this Agreement.

        13.    Notification and Defense of Claim

        Not later than 90 days after receipt by the Officer of notice of the commencement of any Proceeding, the Officer shall, if a claim in respect of the Proceeding is to be made against the Corporation under this Agreement, notify the Corporation of the commencement of the Proceeding. The omission to notify the Corporation will not relieve the Corporation from any liability which it may have to the Officer otherwise than under this Agreement. With respect to any Proceeding as to which the Officer notifies the Corporation of the commencement:

            (a)   The Corporation shall be entitled to participate in the Proceeding at its own expense.

5


            (b)   Except as otherwise provided below, the Corporation may, at its option and jointly with any other indemnifying party similarly notified and electing to assume such defense, assume the defense of the Proceeding, with legal counsel reasonably satisfactory to the Officer. The Officer shall have the right to use separate legal counsel in the Proceeding, but the Corporation shall not be liable to the Officer under this Agreement, including Section 9 above, for the fees and expenses of separate legal counsel incurred after notice from the Corporation of its assumption of the defense, unless (i) the Officer reasonably concludes that there may be a conflict of interest between the Corporation and the Officer in the conduct of the defense of the Proceeding, or (ii) the Corporation does not use legal counsel to assume the defense of such Proceeding. The Corporation shall not be entitled to assume the defense of any Proceeding brought by or on behalf of the Corporation or as to which the Officer has made the conclusion provided for in (i) above.

            (c)   If two or more persons who may be entitled to indemnification from the Corporation, including the Officer, are parties to any Proceeding, the Corporation may require the Officer to use the same legal counsel as the other parties. The Officer shall have the right to use separate legal counsel in the Proceeding, but the Corporation shall not be liable to the Officer under this Agreement, including Section 9 above, for the fees and expenses of separate legal counsel incurred after notice from the Corporation of the requirement to use the same legal counsel as the other parties, unless the Officer reasonably concludes that there may be a conflict of interest between the Officer and any of the other parties required by the Corporation to be represented by the same legal counsel.

            (d)   Notwithstanding any other provision of this agreement, the Corporation shall not be liable to indemnify the Officer under this Agreement for any amounts paid in settlement of any Proceeding effected without its written consent, which shall not be unreasonably withheld. The Officer shall permit the Corporation to settle any Proceeding that the Corporation assumes the defense of, except that the Corporation shall not settle any action or claim in any manner that would impose any penalty or limitation on the Officer without the Officer's written consent, which may be given or withheld in the said Officer's sole discretion.

        14.    Partial Indemnification

        If the Officer is entitled under any provisions of this Agreement to indemnification by the Corporation for some or a portion of the Expenses, judgments, fines or amounts paid in settlement, actually and reasonably incurred by the Officer in connection with such Proceeding, but not, however, for the total amount thereof, the Corporation shall nevertheless indemnify the Officer, and advance Expenses, for the portion of such Expenses, judgments, fines or amounts paid in settlement to which the Officer is entitled.

        15.    Severability

        If this Agreement or any portion thereof shall be invalidated on any ground by any court of competent jurisdiction, then the remainder of this Agreement shall continue to be valid and the Corporation shall nevertheless indemnify the Officer as to Expenses, judgments, fines and amounts paid in settlement, with respect to any Proceeding, to the fullest extent permitted by any applicable portion of this Agreement that shall not have been invalidated or by any other applicable law.

        16.    Subrogation

        In the event of payment under this Agreement, the Corporation shall be subrogated to the extent of such payment to all of the rights of recovery of the Officer. The Officer shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Corporation effectively to bring suit to enforce such rights.

6



        17.    Notices

        All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given (a) upon delivery by hand to the party to whom the notice or other communication shall have been directed, or (b) on the third business day after the date on which it is mailed by certified or registered mail with postage prepaid, addressed as follows:

(i)   If to the Officer, to the address indicated on the signature page of this Agreement, below said Officer's signature.

(ii)

 

If to the Corporation, to:

 

Information Resources, Inc.
150 North Clinton Street
Chicago, Illinois 60661
Attention: General Counsel

                or to any other address as either party may designate to the other in writing.

        18.    Counterparts

        This Agreement may be executed in any number of counterparts, each of which shall constitute the original.

        19.    Applicable Law

        This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware without regard to the principles of conflict of laws.

        20.    Successors and Assigns

        This Agreement shall be binding upon the Corporation and its successors and assigns.

        IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be duly executed and signed as of the day and year first above written.

      CORPORATION:

 

 

 

INFORMATION RESOURCES, INC.,
a Delaware corporation

Attest:

 

 

By:

 
 
   
  Secretary     Chief Executive Officer

 

 

 

OFFICER:

 

 

 


[ADD OFFICER NAME HERE]

 

 

 

Address:

 

 

 

[ADD OFFICER'S HOME ADDRESS HERE]

7




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EX-99.(E)(8) 6 a2114556zex-99_e8.htm EXHIBIT (E)(8)
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Exhibit (e)(8)

AMENDMENT TWO TO
EMPLOYMENT AGREEMENT

        THIS AMENDMENT TWO TO EMPLOYMENT AGREEMENT ("Amendment") is formally entered into as of the 29th day of June, 2003 by and between Information Resources, Inc., a Delaware corporation (the "Company"), and Joseph P. Durrett ("Executive"), but shall be deemed to have been effective as of May 19, 2000.

W I T N E S S E T H:

        WHEREAS, the Company and Executive have entered into an Employment Agreement, dated as of April 30, 1999 (the "Employment Agreement"), pursuant to which the Company employs the Executive as President and Chief Executive Officer of the Company;

        WHEREAS, the Company and Executive desire to commit to writing a previously agreed amendment to the Employment Agreement in accordance with Section 8.4 of the Employment Agreement, which amendment gives effect to a Board resolution passed on May 19, 2000;

        NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Company and Executive, the parties agree as follows:

        1.0    Effective as of May 19, 2000, the following shall be inserted into the Employment Agreement as Section 5.8:

            "5.8.    Effect of Section 280G of the Internal Revenue Code.    (a) Except as provided in Section 5.8(b), in the event it shall be determined that any payment (other than the payment provided for in this Section 5.8) or distribution of any type to or for the benefit of the Executive, by the Company, any affiliate of the Company, any person who acquires ownership or effective control of the Company or ownership of a substantial portion of the Company's assets (within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code'), and the regulations thereunder) or any affiliate of such person, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the "Payments'), is or will be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are collectively referred to as the "Excise Tax'), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment') in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including any income tax, employment tax or Excise Tax, imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

            (b)    Notwithstanding Section 5.8(a) or any other provision of this Agreement to the contrary, in the event that the Payments (other than the payment provided for in this Section 5.8) exceed by less than fifty-thousand dollars ($50,000) an amount at which no Payment to be made or benefit to be provided to the Executive would be subject to an Excise Tax, the Executive will not be entitled to a Gross-Up Payment and the Payments shall be reduced (but not below zero) to the extent necessary so that no Payment to be made or benefit to be provided to the Executive shall be subject to the Excise Tax. Unless the Executive shall have given prior written notice to the Company specifying a different order to effectuate the foregoing, the Company shall reduce or eliminate the Payments, first by reducing or eliminating the portion of the Payments (other than Payments as to which the Internal Revenue Service (the "IRS') Proposed Regulations §1.280G-1 Q/A-24(c) applies ("Q/A-24(c) Payments')) which are not payable in cash, second by reducing or eliminating cash payments, and third by reducing Q/A 24(c) Payments, in each case in reverse



    order beginning with payments or benefits which are to be paid the farthest in time from the "Determination' (as defined below). Any notice given by the Executive pursuant to the preceding sentence shall take precedence over the provisions of any other plan, arrangement or agreement governing the Executive's rights and entitlements to any benefits or compensation.

            (c)    The determination of whether the Payments shall be reduced pursuant to this Agreement and the amount of such reduction, all mathematical determinations, and all determinations as to whether any of the Payments are "parachute payments' (within the meaning of Section 280G of the Code), that are required to be made under this Section 5.8, including determinations as to whether a Gross-Up Payment is required, the amount of such Gross-Up Payment and amounts referred to in this Section 5.8(c), shall be made by an independent accounting firm selected by the Executive from among the five (5) largest accounting firms in the United States (the "Accounting Firm'), which shall provide its determination (the "Determination'), together with detailed supporting calculations regarding the amount of any Gross-Up Payment and any other relevant matter, both to the Company and the Executive by no later than ten (10) days following the Termination Date, if applicable, or such earlier time as is requested by the Company or the Executive (if the Executive reasonably believes that any of the Payments may be subject to the Excise Tax). If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall furnish the Executive and the Company with an opinion reasonably acceptable to the Executive and the Company that no Excise Tax is payable (including the reasons therefor) and that the Executive has substantial authority not to report any Excise Tax on his federal income tax return. If a Gross-Up Payment is determined to be payable, it shall be paid to the Executive within twenty (20) days after the Determination (and all accompanying calculations and other material supporting the Determination) is delivered to the Company by the Accounting Firm. Any determination by the Accounting Firm shall be binding upon the Company and the Executive, absent manifest error. As a result of uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments not made by the Company should have been made ("Underpayment'), or that Gross-Up Payments will have been made by the Company which should not have been made ("Overpayments'). In either such event, the Accounting Firm shall determine the amount of the Underpayment or Overpayment that has occurred. In the case of an Underpayment, the amount of such Underpayment (together with any interest and penalties payable by the Executive as a result of such Underpayment) shall be promptly paid by the Company to or for the benefit of the Executive. The Executive and the Company shall, at the direction and expense of the Company, take such steps as are reasonably necessary (including defending of any claim or assessment by the IRS and the filing of claims for refund), follow reasonable instructions from, and procedures established by, the Company, and otherwise reasonably cooperate with the Company to correct any Overpayment or Underpayment, provided, however, that (i) the Executive shall not in any event be obligated to return to the Company an amount greater than the net after-tax portion of any Overpayment that he has retained or has recovered as a refund from the applicable taxing authorities; (ii) if, in connection with any claim by the IRS that may result in the payment of an additional amount pursuant to this Section 5.8, the Company requests that the Executive pay to the IRS any amount claimed by the IRS to be due and to file a claim for a refund, the Company shall advance to the Executive the amount of such payment; and (iii) this provision shall be interpreted in a manner consistent with an intent to make the Executive whole, on an after-tax basis, from the application of the Excise Tax, it being understood that the correction of an Overpayment may result in the Executive repaying to the Company an amount which is less than the Overpayment. The cost of all determinations made pursuant to this Section 5.8 shall be paid by the Company."

        2.0    Except as expressly modified herein, the terms and conditions of the Employment Agreement shall remain in full force and effect.

2


        IN WITNESS WHEREOF, the Company and Executive have caused this Amendment Two to Employment Agreement to be duly executed as of the date first written above.

    INFORMATION RESOURCES, INC.

ATTEST

 

By:

/s/  
ANDREW BALBIRER      
Andrew G. Balbirer
Chief Financial Officer

/s/  
ROBIN BERGMAN      
Robin Bergman
Assistant Secretary

 

/s/  
JOSEPH P. DURRETT      
Joseph P. Durrett

3




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-----END PRIVACY-ENHANCED MESSAGE-----