<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1996
--------------------------------------------
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
---------------------- ------------------
Commission file number 0-4781
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MARKET FACTS, INC.
- ----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 36-2061602
- --------------------------------------------- -----------------------
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
3040 West Salt Creek Lane, Arlington Heights, Illinois 60005
- ------------------------------------------------------ -------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 590-7000
--------------------------
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING
THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS
REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS.
YES [X] NO [_]
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE REGISTRANT'S CLASSES OF
COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE.
1,730,927 common shares as of October 15, 1996
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<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Market Facts, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
As of September 30, 1996 and December 31, 1995
Assets
------
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------- ------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 596,086 $ 3,530,157
Certificate of deposit 50,000 50,000
Accounts receivable:
Trade, less allowance for doubtful accounts of
$977,345 in 1996 and $838,203 in 1995 10,596,391 9,547,035
Other 35,951 6,200
Notes receivable 53,659 79,214
Revenue earned on contracts in progress
in excess of billings 3,798,553 2,889,027
Current portion of deferred income taxes 747,370 747,314
Prepaid expenses and other assets 278,037 309,954
- ---------------------------------------------------------------------------------------------------------
Total Current Assets $ 16,156,047 $17,158,901
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Other Assets:
Goodwill, net of accumulated amortization 526,205 557,568
Mail panel acquired, net of accumulated amortization 40,635 101,587
- ---------------------------------------------------------------------------------------------------------
Total Other Assets $ 566,840 $ 659,155
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Property, at cost 28,636,598 26,083,047
Less accumulated depreciation and amortization $(11,186,829) (9,524,466)
- ---------------------------------------------------------------------------------------------------------
Net Property $ 17,449,769 $16,558,581
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Total Assets $ 34,172,656 $34,376,637
=========================================================================================================
</TABLE>
Page 1
<PAGE>
Market Facts, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
As of September 30, 1996 and December 31, 1995
Liabilities and Stockholders' Equity
------------------------------------
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------- ------------
<S> <C> <C>
Current Liabilities:
Accrued expenses $ 7,507,753 $ 5,517,230
Billings in excess of revenues earned on contracts in progress 3,530,476 3,328,937
Short-term borrowings 1,200,000 --
Accounts payable 1,092,310 1,253,922
Income taxes 457,163 387,742
Note payable for acquisition of MFCL 339,126 339,126
Current portion of obligations under capital leases 222,816 225,903
Current portion of long-term debt 112,555 112,555
- ------------------------------------------------------------------------------------------------------------
Total Current Liabilities $ 14,462,199 $11,165,415
- ------------------------------------------------------------------------------------------------------------
Long-term Liabilities:
Long-term debt 10,336,239 10,419,628
Obligations under capital leases, noncurrent portion 490,200 536,242
Deferred income taxes 205,560 205,545
- ------------------------------------------------------------------------------------------------------------
Total Long-Term Liabilities $ 11,031,999 $11,161,415
- ------------------------------------------------------------------------------------------------------------
Total Liabilities $ 25,494,198 $22,326,830
- ------------------------------------------------------------------------------------------------------------
Stockholders' Equity:
Preferred stock, series A, no par value;
500,000 shares authorized; none issued $ -- $ --
Preferred stock, series B, no par value;
100 shares authorized and issued in 1996 100 --
Common stock, $1 par value; 5,000,000 shares authorized;
2,752,202 and 2,106,237 shares issued in 1996 and 1995, respectively 2,752,202 2,106,237
Capital in excess of par value 9,497,571 2,328,137
Cumulative foreign currency translation (66,702) (69,144)
Retained earnings 11,225,086 9,525,401
- ------------------------------------------------------------------------------------------------------------
$ 23,408,257 $13,890,631
- ------------------------------------------------------------------------------------------------------------
Less 1,021,275 and 167,468 shares of treasury stock,
at cost, in 1996 and 1995, respectively (13,891,966) (1,189,029)
Less other transactions involving common stock (837,833) (651,795)
- ------------------------------------------------------------------------------------------------------------
Total Stockholders' Equity $ 8,678,458 $12,049,807
- ------------------------------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity $ 34,172,656 $34,376,637
============================================================================================================
</TABLE>
Page 2
<PAGE>
Market Facts, Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings
For The Three Months Ended September 30, 1996 and 1995
<TABLE>
<CAPTION>
Three Months Ended September 30,
---------------------------------
1996 1995
------------ ------------
<S> <C> <C>
Revenue $20,478,142 $15,880,200
- -----------------------------------------------------------------------------------------------------------------
Direct Costs:
Payroll $ 3,975,104 $ 3,439,628
Other expenses 7,624,769 5,462,041
- -----------------------------------------------------------------------------------------------------------------
Total $11,599,873 $ 8,901,669
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Gross Margin $ 8,878,269 $ 6,978,531
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Operating Expenses:
Selling $ 620,551 $ 607,775
General and administrative 5,813,941 4,978,938
Contributions to profit sharing and employee stock ownership plans 272,945 114,478
- -----------------------------------------------------------------------------------------------------------------
Total $ 6,707,437 $ 5,701,191
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Income from operations $ 2,170,832 $ 1,277,340
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Other Income (Expense):
Interest expense $ (329,916) $ (281,866)
Interest income 20,268 22,370
Other income, net 11,074 11,740
- -----------------------------------------------------------------------------------------------------------------
Total $ (298,574) $ (247,756)
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Income Before Provision For Income Taxes $ 1,872,258 $ 1,029,584
Provision For Income Taxes 838,387 481,038
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Net Income $ 1,033,871 $ 548,546
=================================================================================================================
Earnings Per Share $ .58 $ .28
==================================================================================================================
Common and Common Equivalent Shares 1,775,901 1,984,258
==================================================================================================================
Cash Dividends Declared $ .10 $ .10
==================================================================================================================
</TABLE>
Page 3
<PAGE>
Market Facts, Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings
For The Nine Months Ended September 30, 1996 and 1995
<TABLE>
<CAPTION>
Nine Months Ended September 30,
---------------------------------
1996 1995
------------ ------------
<S> <C> <C>
Revenue $59,264,088 $47,545,204
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Direct Costs:
Payroll $11,913,164 $10,295,817
Other expenses 22,238,138 16,356,023
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Total $34,151,302 $26,651,840
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Gross Margin $25,112,786 $20,893,364
- -----------------------------------------------------------------------------------------------------------------
Operating Expenses:
Selling $ 1,897,192 $ 1,690,883
General and administrative 17,491,998 15,130,776
Contributions to profit sharing and employee stock ownership plans 848,880 540,866
- -----------------------------------------------------------------------------------------------------------------
Total $20,238,070 $17,362,525
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Income from operations $ 4,874,716 $ 3,530,839
- -----------------------------------------------------------------------------------------------------------------
Other Income (Expense):
Interest expense $ (917,733) $ (854,909)
Interest income 104,791 45,859
Other income, net 67,257 64,711
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Total $ (745,685) $ (744,339)
- -----------------------------------------------------------------------------------------------------------------
Income Before Provision For Income Taxes $ 4,129,031 $ 2,786,500
Provision For Income Taxes 1,863,499 1,306,294
- -----------------------------------------------------------------------------------------------------------------
Net Income $ 2,265,532 $ 1,480,206
=================================================================================================================
Earnings Per Share $ 1.19 $ .77
=================================================================================================================
Common and Common Equivalent Shares 1,905,591 1,929,073
=================================================================================================================
Cash Dividends Declared $ .30 $ .28
=================================================================================================================
</TABLE>
Page 4
<PAGE>
<TABLE>
<CAPTION>
MARKET FACTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
Nine months Ended September 30,
-------------------------------
1996 1995
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,265,532 $ 1,480,206
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:
Depreciation and amortization 1,838,623 1,683,605
Vesting of restricted stock and demand
notes receivable 41,576 41,574
Net gain on disposal of property (33,686) (28,650)
Change in assets and liabilities:
Accounts receivable (1,078,585) 165,344
Prepaid expenses and other assets 32,155 216,724
Billings in excess of revenues earned
on contracts in progress (706,400) (2,249,499)
Accounts payable and accrued expenses 1,853,118 893,450
Income taxes 69,655 (487,429)
- --------------------------------------------------------------------------------
Net cash provided by operating
activities $ 4,281,988 $ 1,715,325
- --------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property $ (2,664,769) $ (1,173,303)
Investment in notes receivable (246,200) (219,445)
Proceeds from the sale of property 37,617 45,157
Proceeds from notes receivable 44,141 99,849
- --------------------------------------------------------------------------------
Net cash used in investing activities $ (2,829,211) $ (1,247,742)
- --------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchases of treasury stock $ (12,348,327) $ ---
Proceeds from sale of convertible note 8,250,000 ---
Proceeds from short-term borrowings 7,100,000 2,000,000
Repayment of short-term borrowings (5,900,000) (2,000,000)
Payment of transaction costs (1,175,461) ---
Dividends paid (565,847) (527,908)
Proceeds from exercise of stock options 386,250 652,855
Reduction in obligations under capital leases
and long-term debt (133,250) (241,424)
Proceeds from issuance of preferred stock 100 ---
Proceeds from sale of treasury stock --- 139,857
- --------------------------------------------------------------------------------
Net cash provided by (used in)
financing activities $ (4,386,535) $ 23,380
- --------------------------------------------------------------------------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH $ (313) $ 23,810
- --------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS $ (2,934,071) $ 514,773
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD $ 3,530,157 $ 911,209
- --------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 596,086 $ 1,425,982
================================================================================
CASH PAID DURING THE PERIOD FOR:
Interest $ 896,232 $ 837,081
Income taxes $ 1,779,112 $ 1,793,723
================================================================================
SUPPLEMENTAL SCHEDULE OF NONCASH ACTIVITY:
Conversion of convertible note into common
stock $ 8,250,000 $ ---
Capital lease obligations incurred on lease
of equipment $ 109,209 $ 208,465
================================================================================
</TABLE>
Page 5
<PAGE>
Notes to Financial Statements
Note 1 - Basis of Presentation
- ------------------------------
The accompanying unaudited condensed consolidated financial statements of Market
Facts, Inc. and Subsidiaries ("Company") have been prepared in accordance with
instructions to Form 10-Q. The results of operations for interim periods are not
necessarily indicative of the results to be expected for the entire year. For
further information regarding the Company's most recent completed fiscal years,
refer to the consolidated financial statements included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1995.
Note 2 - Adjustments and Reclassifications
- ------------------------------------------
The information furnished herein includes all adjustments, consisting of normal
recurring adjustments, which are, in the opinion of management, necessary for a
fair presentation of the interim financial statements. Certain reclassifications
have been made to the 1995 financial statements to conform to the 1996
presentation.
Note 3 - Foreign Currency Translation
- -------------------------------------
Assets and liabilities of Market Facts of Canada, Ltd. ("MFCL"), the Company's
only foreign subsidiary, have been translated using the exchange rate in effect
at the balance sheet date. MFCL's results of operations are translated using the
average exchange rate prevailing throughout the period. Resulting translation
gains and losses are reported as a component of stockholders' equity.
Note 4 - Revenue Recognition
- ----------------------------
The Company recognizes revenue under the percentage of completion method of
accounting. Revenue on client projects is recognized as services are performed.
Losses expected to be incurred on jobs in progress are charged to income as soon
as such losses are known. Revenue earned on contracts in progress in excess of
billings is classified as a current asset. Amounts billed in excess of revenue
earned are classified as a current liability. Client projects are expected to be
completed within a twelve month period.
Page 6
<PAGE>
Note 5 - Tender Offer and Convertible Note
- ------------------------------------------
On June 11, 1996, the Company commenced its offering ("tender offer") to
purchase up to 900,000 shares of its common stock from its stockholders at a
cash price of $14.50 per share. The tender offer period expired on July 10,
1996.
The tender offer was made pursuant to an Investment Agreement dated June 6, 1996
among MFI Investors L.P., MFI Associates, Inc. and the Company ("Investment
Agreement"), whereby MFI Investors L.P. purchased from the Company a ten-year,
7% convertible subordinated note in the principal amount of $8,250,000
("Convertible Note"). Immediately prior to the purchase of the shares in the
tender offer, the Convertible Note automatically converted at a rate of $14.50
per share into a number of shares equal to the number of shares (up to 568,965)
purchased in the tender offer. A new class of Series B preferred shares was also
issued to MFI Investors L.P., granting it the right to elect 3 of the 11 Company
directors, subject to decrease as its ownership interest decreases.
As of July 18, 1996, the Company purchased 838,807 shares pursuant to the tender
offer at a cost of $12,162,701. The purchase was funded by the proceeds from the
Convertible Note and bank financing. Immediately prior to the purchase of these
shares, the Convertible Note converted into 568,965 shares of the Company's
common stock.
The Company incurred $1,175,461 in transaction costs relating to the tender
offer and Investment Agreement.
Note 6 - Stock Plan
- -------------------
On September 27, 1996, the Company established the 1996 Stock Plan whereby the
Company may issue to select officers, directors and key employees any or all of
the following: incentive stock options within the meaning of Section 442 of the
Internal Revenue Code of 1986, non-qualified stock options, stock appreciation
rights and restricted stock. The Company has reserved 250,000 shares for the
1996 Stock Plan.
Page 7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Liquidity and Capital Resources
- -------------------------------
The ratio of current assets to current liabilities was 1.1 to 1 as of September
30, 1996 versus 1.5 to 1 as of December 31, 1995. The decrease in the ratio is
primarily attributable to the repurchase of 838,807 shares of common stock in
the tender offer, as described in Note 5 to the financial statements. The ratio
was also affected by an increase in accrued expenses, partially offset by an
increase in accounts receivable, both due to growth in business.
Cash and cash equivalents decreased by $2,934,071 from December 31, 1995 to
September 30, 1996. This is primarily attributable to the repurchase of 838,807
shares of common stock in the tender offer, purchases of property and payment of
transaction costs, partially offset by proceeds from the sale of the Convertible
Note and short-term borrowings.
In June 1996, the Company established a revolving and term credit facility
("Credit Facility") with a bank in the amount of $7,000,000. No amounts were
outstanding under this agreement as of September 30, 1996. The Credit Facility
bears interest at either the lender's prime lending rate or a reserve adjusted
LIBOR rate, plus between .75% and 1.5% per annum, and expires on June 30, 1998.
At any time prior to June 30, 1998, the Company has a one-time right to convert
up to $4,800,000 of revolving debt into a five-year term loan. The Credit
Facility replaced a $4,000,000 existing line of credit. The Company maintains
other established bank lines of credit totaling $3,650,000 which are renewed
annually.
The Company believes that cash flow from future operations, its ability to
secure additional leases and borrowings available from its Credit Facility and
lines of credit will be adequate to fund both short-term and long-term investing
and financing activities and growth for the foreseeable future.
Results of Operations
- ---------------------
Comparison of Third Quarter 1996 to Third Quarter 1995
- ------------------------------------------------------
During the third quarter of 1996, the Company had revenue of $20,478,142, an
increase of 29.0% over the same period in 1995. The increase in revenue is
attributable to significant expansion of major program services for existing as
well as new clients.
Gross margin for the third quarter of 1996 was $8,878,269, an increase of 27.2%
over the same period in 1995. The increase in gross margin is due to the growth
in revenue. Gross margin as a percentage of revenue was 43.4% during the third
quarter of 1996 compared to 43.9% for the same period in 1995.
Operating expenses for the third quarter of 1996 increased by $1,006,246, an
increase of 17.6% compared to the same period in 1995. The increase is primarily
attributable to growth in business, higher overhead payroll expense and an
increase in contributions to profit sharing and employee stock ownership plans.
Operating expenses as a percentage of revenue decreased from 35.9% in 1995 to
32.8% in 1996, primarily attributable to the fact that the Company has
experienced growth in certain types of business which require only a minimal
increase in operating expenses.
Provision for income taxes for the third quarter of 1996 reflects an effective
income tax rate of 44.8% versus 46.7% in 1995.
Net income for the third quarter of 1996 was $1,033,871 or 5.0% of revenue
compared with $548,546 and 3.5% of revenue during the same period in 1995.
Page 8
<PAGE>
Comparison of First Nine Months of 1996 to First Nine Months of 1995
- --------------------------------------------------------------------
During the first nine months of 1996, the Company had revenue of $59,264,088, an
increase of 24.6% over the same period in 1995. The increase in revenue is
attributable to significant expansion of major program services for existing as
well as new clients.
Gross margin for the first nine months of 1996 was $25,112,786, an increase of
20.2% over the same period in 1995. The increase in gross margin is due to the
growth in revenue. Gross margin as a percentage of revenue was 42.4% during the
first nine months of 1996 compared to 43.9% for the same period in 1995. The
decline in the gross margin percentage is primarily attributable to the fact
that the Company has experienced growth in certain types of business which yield
lower gross margin percentages but which require only a minimal increase in
operating expenses.
Operating expenses for the first nine months of 1996 rose by $2,875,545, an
increase of 16.6% compared to the same period in 1995. This increase is due
primarily to growth in business, higher overhead payroll expense and an increase
in contributions to profit sharing and employee stock ownership plans. Operating
expenses as a percentage of revenue decreased from 36.5% in 1995 to 34.1% in
1996, primarily attributable to the fact that the Company has experienced growth
in certain types of business which require only a minimal increase in operating
expenses.
Provision for income taxes for the first nine months of 1996 reflects an
effective income tax rate of 45.1% versus 46.9% in 1995.
Net income for the first nine months of 1996 was $2,265,532 or 3.8% of revenue
compared with $1,480,206 and 3.1% of revenue during the same period in 1995.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
See Index to Exhibits immediately following the signature page.
(b) Reports on Form 8-K.
A report on Form 8-K dated June 5, 1996, commission file number 0-04781,
was filed on July 12, 1996, reporting under Item 5 thereof and amendment to
the Company's Rights Agreement dated as of July 26, 1989.
Page 9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Market Facts, Inc.
------------------------------------
(Registrant)
Date: October 22, 1996 Timothy J. Sullivan
---------------------------- ------------------------------------
Timothy J. Sullivan
Senior Vice President, Treasurer
and Assistant Secretary
(Principal Accounting Officer)
Date: October 22, 1996 Glenn W. Schmidt
---------------------------- ------------------------------------
Glenn W. Schmidt
Executive Vice President, Assistant
Secretary and Assistant Treasurer
(Principal Financial Officer)
Page 10
<PAGE>
<TABLE>
<CAPTION>
INDEX TO EXHIBITS
Exhibit Number Description
- -------------- -----------
<C> <S>
(3)(a) Restated Certificate of Incorporation. (7)
(3)(b) By-laws as Amended and Currently in Effect. (13)
(4)(a) Article Fourth of Restated Certificate of Incorporation is
included in Exhibit (3)(a) above. (7)
(4)(b) Rights Agreement as Amended and Currently in Effect. (4)
(4)(c) Certificate of Designation, Preferences and Rights of Series
B Preferred Stock. (12)
(10.1) Term Note dated February 23, 1995 between Market Facts, Inc.
and Verne Churchill. (6)
(10.2) Term Note dated February 23, 1995 between Market Facts, Inc.
and Lawrence Labash. (6)
(10.3) Term Note dated February 23, 1995 between Market Facts, Inc.
and Thomas Payne. (6)
(10.4) Term Note dated February 23, 1995 between Market Facts, Inc.
and Glenn Schmidt. (6)
(10.5) Term Note dated March 1, 1995 between Market Facts, Inc. and
Stephen J. Weber. (6)
(10.6) Promissory Note dated April 1, 1994 between Market Facts,
Inc. and Stephen J. Weber. (5)
(10.7) Employment Agreement by and among Market Facts of Canada,
Ltd., Market Facts, Inc. and John C. Robertson dated as of
April 14, 1994. (1)
(10.8) Demand Note and London Interbank Offered Rate Borrowing
Agreement dated April 24, 1996, between the Company and
American National Bank and Trust Company of Chicago. (13)
(10.9) Mortgage and Security Agreement dated April 11, 1990 between
American National Bank and Trust Company as Trustee under
Trust No. 110201-04 and The Manufacturers Life Insurance
Company together with Mortgage Note. (3)
(10.10) Credit Agreement dated June 7, 1996, between the Company and
Harris Trust and Savings Bank. (8)
(10.11) Employment Agreement with Verne B. Churchill. (2)
(10.12) Employment Agreement with Lawrence W. Labash. (2)
(10.13) Employment Agreement with Timothy Q. Rounds. (2)
(10.14) Employment Agreement with Glenn W. Schmidt. (2)
(10.15) Employment Agreement with Sanford M. Schwartz. (2)
</TABLE>
Page 11
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<TABLE>
<CAPTION>
Exhibit Number Description
- -------------- ----------
<C> <S>
(10.16) Indemnity Agreement with Jack R. Wentworth. (2)
Substantially identical agreements were also entered into
with the following individuals:
William W. Boyd John C. Robertson
Verne B. Churchill Timothy Q. Rounds
Lawrence W. Labash Glenn W. Schmidt
Thomas H. Payne Sanford M. Schwartz
Karen E. Predow-James Wesley S. Walton
(10.17) Term Note dated March 29, 1996 between Market Facts, Inc. and
Verne Churchill. (7)
(10.18) Term Note dated March 29, 1996 between Market Facts, Inc. and
Thomas Payne. (7)
(10.19) Term Note dated March 29, 1996 between Market Facts, Inc. and
Glenn Schmidt. (7)
(10.20) Term Note dated March 29, 1996 between Market Facts, Inc. and
Lawrence Labash. (7)
(10.21) Investment Agreement dated June 6, 1996 among the Company,
MFI Investors L.P. and MFI Associates, Inc. (9)
(10.22) Financial Advisory Agreement dated June 6, 1996 between the
Company and MFI Investors L.P. (10)
(10.23) Convertible Note dated June 6, 1996 in the principal amount
of $8,250,000 issued by the Company to MFI Investors L.P.
(11)
(10.24) Market Facts, Inc. 1996 Stock Plan.
(27) Financial Data Schedule.
</TABLE>
- -------------------
(1) Incorporated by reference to Registrant's Quarterly Report on Form 10-Q for
the quarterly period ended March 31, 1994.
(2) Incorporated by reference to Registrant's Quarterly Report on Form 10-Q for
the quarterly period ended September 30, 1994.
(3) Incorporated by reference to Registrant's Annual Report on Form 10-K for its
fiscal year ended December 31, 1992.
(4) Incorporated by reference to Registrant's Form 8-A dated July 3, 1996,
commission file number 0-04781.
(5) Incorporated by reference to Registrant's Quarterly Report on Form 10-Q/A-1
for the quarterly period ended June 30, 1994.
(6) Incorporated by reference to Registrant's Quarterly Report on Form 10-Q for
the quarterly period ended March 31, 1995.
(7) Incorporated by reference to Registrant's Quarterly Report on Form 10-Q for
the quarterly period ended March 31, 1996.
Page 12
<PAGE>
(8) Incorporated by reference to Exhibit No. (b) of Registrant's Schedule
13E-4 dated June 11, 1996, commission file number 5-20859.
(9) Incorporated by reference to Exhibit No. (c)(1) of Registrant's Schedule
13E-4 dated June 11, 1996, commission file number 5-20859.
(10) Incorporated by reference to Exhibit No. (c)(2) of Registrant's Schedule
13E-4 dated June 11, 1996, commission file number 5-20859.
(11) Incorporated by reference to Exhibit No. (c)(3) of Registrant's Schedule
13E-4 dated June 11, 1996, commission file number 5-20859.
(12) Incorporated by reference to Exhibit No. 99(c)(4) of Registrant's Schedule
13E-4 dated June 11, 1996, commission file number 5-20859.
(13) Incorporated by reference to Registrant's Quarterly Report on Form 10-Q for
the quarterly period ended June 30, 1996.
Page 13
<PAGE>
Exhibit (10.24)
[LOGO]
MARKET FACTS, INC.
1996 STOCK PLAN
1. Preamble.
Market Facts, Inc., a Delaware corporation (the "Company"), hereby
establishes the Market Facts, Inc. 1996 Stock Plan (the "Plan") as a means
whereby the Company may, through awards of (i) incentive stock options ("ISOs")
within the meaning of Section 422 of the Code, (ii) non-qualified stock options
("NSOs"), (iii) stock appreciation rights ("SARs"), and (iv) restricted stock
("Restricted Stock"):
(a) provide officers, directors and key employees who have substantial
responsibility for the direction and management of the Company
with additional incentive to promote the success of the Company's
business;
(b) encourage such persons to remain in the service of the Company;
and
(c) enable such persons to acquire proprietary interests in the
Company.
The provisions of this Plan do not apply to or affect any option, stock,
stock appreciation right, restricted stock or phantom stock heretofore or
hereafter granted under any other stock plan of the Company, and all such
options, stock, stock appreciation rights, restricted stock or phantom stock
shall be governed by and subject to the applicable provisions of the plan under
which they were or will be granted.
2. Definitions and Rules of Construction.
2.01 "Award" means the grant of Options, SARs and/or Restricted Stock
to a Participant.
2.02 "Award Date" means the date upon which an Option, SAR or
Restricted Stock is awarded to a Participant under the Plan.
2.03 "Board" or "Board of Directors" means the board of directors of
the Company.
2.04 "Code" means the Internal Revenue Code of 1986, as amended from
time to time or any successor thereto.
2.05 "Committee" means two (2) or more directors elected by the Board
of Directors from time to time; provided, however, that in the absence of an
election by the Board, the Committee shall mean the Compensation Committee of
the Board of Directors.
2.06 "Common Stock" means the common stock of the Company, par value
$1.00 per share.
2.07 "Company" means Market Facts, Inc., a Delaware corporation, and
any successor thereto.
2.08 "Exchange Act" shall mean the Securities Exchange Act of 1934,
as it exists now or from time to time may hereafter be amended.
1
<PAGE>
2.09 "Fair Market Value" as of any date means the average closing
sale price for the Common Stock as of the close of business on the three most
recent trading days (including such date) on which actual sales occurred (as
reported by the Nasdaq Stock Market System or any securities exchange or
automated quotation system of a registered securities association on which the
Common Stock is then traded or quoted).
2.10 "ISO" means incentive stock options within the meaning of
Section 422 of the Code.
2.11 "NSO" means non-qualified stock options, which are not intended
to qualify under Section 422 of the Code.
2.12 "Option" means the right of a Participant, whether granted as
an ISO or an NSO, to purchase a specified number of shares of Common Stock,
subject to the terms and conditions of the Plan.
2.13 "Option Price" means the price per share of Common Stock at
which an Option may be exercised.
2.14 "Participant" means an individual to whom an Award has been
granted under the Plan.
2.15 "Plan" means the Market Facts, Inc. 1996 Stock Plan, as set
forth herein and from time to time amended.
2.16 "Restricted Stock" means the Common Stock awarded to a
Participant pursuant to Section 8 of this Plan.
2.17 "SAR" means a stock appreciation right issued to a Participant
pursuant to Section 9 of this Plan.
2.18 "Subsidiary" means any entity of which the Company owns or
controls more than 50 percent of (i) the outstanding capital stock, or (ii) the
combined voting power of all classes of stock.
2.19 Rules of Construction:
2.19.1 Governing Law. The construction and operation of this
Plan are governed by the laws of the State of Illinois.
2.19.2 Undefined Terms. Unless the context requires another
meaning, any term not specifically defined in this Plan is used in the
sense given to it by the Code.
2.19.3 Headings. All headings in this Plan are for reference
only and are not to be utilized in construing the Plan.
2.19.4 Conformity with Section 422. Any ISOs issued under this
Plan are intended to qualify as incentive stock options described in
Section 422 of the Code, and all provisions of the Plan relating to ISOs
shall be construed in conformity with this intention. Any NSOs issued under
this Plan are not intended to qualify as incentive stock options described
in Section 422 of the Code, and all provisions of the Plan relating to NSOs
shall be construed in conformity with this intention.
2.19.5 Gender. Unless clearly inappropriate, all nouns of
whatever gender refer indifferently to persons or objects of any gender.
2.19.6 Singular and Plural. Unless clearly inappropriate,
singular terms refer also to the plural and vice versa.
2
<PAGE>
2.19.7 Severability. If any provision of this Plan is determined
to be illegal or invalid for any reason, the remaining provisions are to
continue in full force and effect and to be construed and enforced as if
the illegal or invalid provision did not exist, unless the continuance of
the Plan in such circumstances is not consistent with its purposes.
3. Stock Subject to the Plan.
Except as otherwise provided in Section 12, the aggregate number of shares
of Common Stock that may be issued under Options or as Restricted Stock through
this Plan may not exceed Two Hundred Fifty Thousand (250,000) shares. Reserved
shares may be either authorized but unissued shares or treasury shares, in the
Board's discretion. If any Awards of Options and Restricted Stock hereunder
shall terminate or expire, as to any number of shares, new Options and
Restricted Stock may thereafter be awarded with respect to such shares.
4. Administration.
The Committee shall administer the Plan. All determinations of the
Committee are made by a majority vote of its members. The Committee's
determinations are final and binding on all Participants. In addition to any
other powers set forth in this Plan, the Committee has the following powers:
(a) to construe and interpret the Plan;
(b) to establish, amend and rescind appropriate rules and regulations
relating to the Plan;
(c) subject to the terms of the Plan, to select the individuals who
will receive Awards, the times when they will receive them, the
number of Options, Restricted Stock and/or SARs to be subject to
each Award, the Option Price, the vesting schedule (including any
performance targets to be achieved in connection with the vesting
of any Award), the expiration date applicable to each Award and
other terms and provisions and restrictions of the Awards (which
need not be identical) and to amend or modify any of the terms of
outstanding Awards;
(d) to contest on behalf of the Company or Participants, at the
expense of the Company, any ruling or decision on any matter
relating to the Plan or to any Awards;
(e) generally, to administer the Plan, and to take all such steps and
make all such determinations in connection with the Plan and the
Awards granted thereunder as it may deem necessary or advisable;
and
(f) to determine the form in which tax withholding under Section 15 of
this Plan will be made (i.e., cash, Common Stock or a combination
thereof).
5. Eligible Participants.
Present and future directors, officers and key employees of the Company
shall be eligible to participate in the Plan. The Committee from time to time
shall select those officers, directors and key employees of the Company and any
Subsidiary or affiliate of the Company who shall be designated as Participants
and shall designate in accordance with the terms of the Plan the number, if any,
of ISOs, NSOs, SARs and shares of Restricted Stock or any combination thereof,
to be awarded to each Participant.
6. Terms and Conditions of Non-Qualified Stock Options.
Subject to the terms of the Plan, the Committee, in its discretion, may
award an NSO to any Participant. Each NSO shall be evidenced by an agreement, in
such form as is approved by the Committee, and except as otherwise provided by
the Committee in such agreement, each NSO shall be subject to the following
express terms and conditions, and to such other terms and conditions, not
inconsistent with the Plan, as the Committee may deem appropriate:
3
<PAGE>
6.01 Option Period. Each NSO will expire as of the earliest of:
(i) the date on which it is forfeited under the provisions of
Section 11.1;
(ii) ten (10) years from the Award Date;
(iii) three (3) months after the Participant's termination of
employment with the Company and its parent and Subsidiaries
or service on the Board for any reason other than for cause
or death or total and permanent disability;
(iv) immediately upon the Participant's termination of
employment with the Company and its parent and Subsidiaries
or service on the Board for cause;
(v) twelve (12) months after the Participant's death or total
and permanent disability; or
(vi) any other date specified by the Committee when the NSO is
granted.
6.02 Option Price. At the time granted, the Committee shall determine
the Option Price of any NSO, and in the absence of such determination, the
Option Price shall be One Hundred percent (100%) of the Fair Market Value of the
Common Stock subject to the NSO on the Award Date.
6.03 Vesting. Unless otherwise determined by the Committee and set
forth in the Award agreement, NSO Awards shall vest in accordance with Section
11.1; provided, that in no event shall an NSO granted to a Participant who is
subject to Section 16 of the Exchange Act be exercisable earlier than six (6)
months from the Award Date.
6.04 Other Option Provisions. The form of NSO authorized by the Plan
may contain such other provisions as the Committee may from time to time
determine.
7. Terms and Conditions of Incentive Stock Options
Subject to the terms of the Plan, the Committee, in its discretion, may
award an ISO to any employee Participant. Each ISO shall be evidenced by an
agreement, in such form as is approved by the Committee, and except as otherwise
provided by the Committee, each ISO shall be subject to the following express
terms and conditions and to such other terms and conditions, not inconsistent
with the Plan, as the Committee may deem appropriate:
7.01 Option Period. Each ISO will expire as of the earliest of:
(i) the date on which it is forfeited under the provisions of
Section 11.1;
(ii) ten (10) years from the Award Date, except as set forth in
Section 7.02 below;
(iii) immediately upon the Participant's termination of
employment with the Company and any parent and Subsidiary
of the Company for cause;
(iv) three (3) months after the Participant's termination of
employment with the Company and any parent and Subsidiary
of the Company for any reason other than for cause or
death or total and permanent disability;
(v) twelve (12) months after the Participant's death or total
and permanent disability; or
(vi) any other date (within the limits of the Code) specified
by the Committee when the ISO is granted.
4
<PAGE>
Notwithstanding the foregoing provisions granting discretion to the Committee to
determine the terms and conditions of ISOs, such terms and conditions shall meet
the requirements set forth in Section 422 of the Code or any successor thereto.
7.02 Option Price and Expiration. The Option Price of any ISO shall
be determined by the Committee at the time an ISO is granted, and shall be no
less than one hundred percent (100%) of the Fair Market Value of the Common
Stock subject to the ISO on the Award Date; provided, however, that if an ISO is
granted to a Participant who, immediately before the grant of the ISO,
beneficially owns stock representing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or its parent or
subsidiary corporations, the Option Price shall be at least one hundred ten
percent (110%) of the Fair Market Value of the Common Stock subject to the ISO
on the Award Date and in such cases, the exercise period specified in the Option
agreement shall not exceed five (5) years from the Award Date.
7.03 Vesting. Unless otherwise determined by the Committee and set
forth in the Award agreement, ISO Awards shall vest in accordance with Section
11.1; provided that in no event shall an ISO granted to a Participant who is
subject to Section 16 of the Exchange Act be exercisable earlier than six (6)
months from the Award Date.
7.04 Other Option Provisions. The form of ISO authorized by the Plan
may contain such other provisions as the Committee may, from time to time,
determine; provided, however, that such other provisions may not be inconsistent
with any requirements imposed on incentive stock options under Code Section 422
and related Treasury regulations.
8. Terms and Conditions of Restricted Stock Awards.
Subject to the terms of the Plan, the Committee, in its discretion, may
award Restricted Stock to any Participant at no additional cost to the
Participant. Each Restricted Stock Award shall be evidenced by an agreement, in
such form as is approved by the Committee, and all shares of Common Stock
awarded to Participants under the Plan as Restricted Stock shall be subject to
the following express terms and conditions and to such other terms and
conditions, not inconsistent with the Plan, as the Committee shall deem
appropriate:
(a) Restricted Period. Shares of Restricted Stock awarded under this
Section 8 may not be sold, assigned, transferred, pledged or
otherwise encumbered before they vest.
(b) Vesting. Restricted Stock Awards under this Section 8 shall vest
in accordance with Section 11.2.
(c) Certificate Legend. Each certificate issued in respect of shares
of Restricted Stock awarded under this Section 8 shall be
registered in the name of the Participant and shall bear the
following (or a similar) legend until such shares have vested:
"The transferability of this certificate and the shares of
stock represented hereby are subject to the terms and
conditions (including forfeiture) relating to Restricted
Stock contained in Section 8 of the Market Facts, Inc. 1996
Stock Plan and an Agreement entered into between the
registered owner and Market Facts, Inc. Copies of such Plan
and Agreement are on file at the principal office of Market
Facts, Inc."
5
<PAGE>
9. Terms and Conditions of Stock Appreciation Rights.
The Committee may, in its discretion, grant an SAR to any Participant under
the Plan. Each SAR shall be evidenced by an agreement between the Company and
the Participant, and may relate to and be associated with all or any part of a
specific ISO or NSO. An SAR shall entitle the Participant to whom it is granted
the right, so long as such SAR is exercisable and subject to such limitations as
the Committee shall have imposed, to surrender any then exercisable portion of
his SAR and, if applicable, the related ISO or NSO, in whole or in part, and
receive from the Company in exchange, without any payment of cash (except for
applicable employee withholding taxes), that number of shares of Common Stock
having an aggregate Fair Market Value on the date of surrender equal to the
product of (i) the excess of the Fair Market Value of a share of Common Stock on
the date of surrender over the Fair Market Value of the Common Stock on the date
the SARs were issued, or, if the SARs are related to an ISO or an NSO, the per
share Option Price under such ISO or NSO on the Award Date, and (ii) the number
of shares of Common Stock subject to such SAR, and, if applicable, the related
ISO or NSO or portion thereof which is surrendered.
An SAR granted in conjunction with an ISO or NSO shall terminate on the
same date as the related ISO or NSO and shall be exercisable only if the Fair
Market Value of a share of Common Stock exceeds the Option Price for the related
ISO or NSO, and then shall be exercisable to the extent, and only to the extent,
that the related ISO or NSO is exercisable. The Committee may at the time of
granting any SAR add such additional conditions and limitations to the SAR as it
shall deem advisable, including, but not limited to, limitations on the period
or periods within which the SAR shall be exercisable and the maximum amount of
appreciation to be recognized with regard to such SAR. If a Participant is
subject to Section 16(a) and Section 16(b) of the Exchange Act, the Committee
may at any time add such additional conditions and limitations to such SAR
which, in its discretion, the Committee deems necessary or desirable to comply
with such Section 16(a) or Section 16(b) and the rules and regulations issued
thereunder, or to obtain any exemption therefrom. Any ISO or NSO or portion
thereof which is surrendered with an SAR shall no longer be exercisable. An SAR
that is not granted in conjunction with an ISO or NSO shall terminate on such
date as is specified by the Committee in the SAR agreement and shall vest in
accordance with Section 11.2. The Committee, in its sole discretion, may allow
the Company to settle all or part of the Company's obligation arising out of the
exercise of an SAR by the payment of cash equal to the aggregate Fair Market
Value of the shares of Common Stock which the Company would otherwise be
obligated to deliver.
10. Manner of Exercise of Options.
To exercise an Option in whole or in part, a Participant (or, after his
death, his executor or administrator) must give written notice to the Committee,
stating the number of shares with respect to which he intends to exercise the
Option. The Company will issue the shares with respect to which the Option is
exercised upon payment in full of the Option Price. The Committee may permit the
Option Price to be paid in cash or shares of Common Stock held by the
Participant having an aggregate Fair Market Value, as determined on the date of
delivery, equal to the Option Price. The Committee may also permit the Option
Price to be paid by any other method permitted by law, including by delivery to
the Committee from the Participant of an election directing the Company to
withhold the number of shares of Common Stock from the Common Stock otherwise
due upon exercise of the Option having an aggregate Fair Market Value on that
date equal to the Option Price. If a Participant pays the Option Price with
shares of Common Stock which were received by the Participant upon exercise of
one or more ISOs, and such Common Stock has not been held by the Participant for
at least the greater of:
(a) two (2) years from the date the ISOs were granted; or
(b) one (1) year after the transfer of the shares of Common Stock to
the Participant;
the use of the shares shall constitute a disqualifying disposition and the ISO
underlying the shares used to pay the Option Price shall no longer satisfy all
of the requirements of Code Section 422.
6
<PAGE>
11. Vesting.
11.1 Options. A Participant may not exercise an Option until it has
become vested. The portion of an Award of Options that is vested depends upon
the period that has elapsed since the Award Date. The following schedule applies
to any Award of Options under this Plan unless the Committee establishes a
different vesting schedule on the Award Date:
-----------------------------------------------------------
Number of Years Since Award Date Vested Percentage
-----------------------------------------------------------
Fewer than one None
-----------------------------------------------------------
One but fewer than two 20%
-----------------------------------------------------------
Two but fewer than three 40%
-----------------------------------------------------------
Three but fewer than four 60%
-----------------------------------------------------------
Four but fewer than five 80%
-----------------------------------------------------------
Five or more 100%
-----------------------------------------------------------
If a Participant's employment with the Company or service on the Board is
terminated due to: i) retirement on or after his sixty-fifth (65th) birthday;
(ii) retirement on or after his fifty-fifth (55th) birthday with consent of the
Company; (iii) retirement at any age on account of total and permanent
disability as determined by the Company; (iv) death; or (v) a change in control
of the Company (as determined by the Committee), the Committee may, in its
discretion, accelerate vesting. Unless the Committee otherwise provides in the
Award agreement, if a Participant's employment with or service to the Company
terminates for any other reason, any Awards that are not yet vested are
forfeited. A transfer from the Company to a Subsidiary or affiliate, or vice
versa, is not a termination of employment for purposes of this Plan.
11.2 Restricted Stock and SARs. The Committee shall establish the
vesting schedule to apply to any Award of Restricted Stock or SAR that is not
associated with an ISO or NSO granted under the Plan to a Participant, and in
the absence of such a vesting schedule, such Award shall vest according to the
vesting schedule set forth in Section 11.1. In no event, however, will a SAR or
Restricted Stock Award granted to a Participant who is subject to Section 16 of
the Exchange Act be exercisable until at least six (6) months from its Award
Date.
If a Participant's employment with the Company or service on the Board
is terminated due to: (i) retirement on or after his sixty-fifth (65th)
birthday; (ii) retirement on or after his fifty-fifth (55th) birthday with
consent of the Company; (iii) retirement at any age on account of total and
permanent disability as determined by the Company; (iv) death; or (v) a change
in control of the Company (as determined by the Committee), the Committee may,
in its discretion, accelerate vesting. Unless the Committee otherwise provides
in the Award agreement, if a Participant's employment with or service to the
Company is terminated for any other reason, any Awards that are not yet vested
are forfeited. A transfer from the Company to a Subsidiary or affiliate, or vice
versa, is not a termination of employment for purposes of this Plan.
12. Adjustments to Reflect Changes in Capital Structure.
If there is any change in the corporate structure or shares of the Company,
the Committee may make any adjustments necessary to prevent accretion, or to
protect against dilution, in the number and kind of shares authorized by the
Plan and, with respect to outstanding Awards, in the number and kind of shares
covered thereby and in the applicable Option Price. For the purpose of this
Section 12, a change in the corporate structure or shares of the Company
includes, without limitation, any change resulting from a recapitalization,
stock split, stock dividend, consolidation, rights offering, separation,
reorganization, or liquidation and any transaction in which shares of Common
Stock are changed into or exchanged for a different number or kind of shares of
stock or other securities of the Company or another corporation.
7
<PAGE>
13. Nontransferability of Awards.
ISOs are not transferable, voluntarily or involuntarily, other than by
will or by the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined by the Code. During a Participant's
lifetime, his ISOs may be exercised only by him. All other Awards granted
pursuant to this Plan are transferable by will or by the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined by
the Code, or in the Committee's discretion after vesting.
14. Rights as Stockholder.
No Common Stock may be delivered upon the exercise of any Option until full
payment has been made. A Participant has no rights whatsoever as a stockholder
with respect to any shares covered by an Option until the date of the issuance
of a stock certificate for the shares.
15. Withholding Tax.
The Committee may, in its discretion and subject to such rules as it may
adopt, permit or require a Participant to pay all or a portion of the federal,
state and local taxes, including FICA and Medicare withholding tax, arising in
connection with any Awards by (i) having the Company withhold shares of Common
Stock, (ii) tendering back shares of Common Stock received in connection with
such Award or (iii) delivering other previously acquired shares of Common Stock
having a Fair Market Value approximately equal to the amount to be withheld.
16. No Right to Employment.
Participation in the Plan will not give any Participant a right to be
retained as an employee or director of the Company or its parent or
Subsidiaries, or any right or claim to any benefit under the Plan, unless the
right or claim has specifically accrued under the Plan.
17. Amendment of the Plan.
The Board of Directors may from time to time amend or revise the terms of
this Plan in whole or in part and may, without limitation, adopt any amendment
deemed necessary; provided, however, that no change in any Award previously
granted to a Participant may be made that would impair the rights of the
Participant without the Participant's consent.
18. Stockholder Approval.
Operation of the Plan shall be subject to approval by the stockholders of
the Company within twelve months before or after the date the Plan is adopted by
the Board of Directors. If such stockholder approval is obtained at a duly held
stockholders' meeting, it may be obtained by the affirmative vote of the holders
of a majority of the shares of the Company present at the meeting or represented
and entitled to vote thereon. The approval of such stockholders of the Company
shall be solicited substantially in accordance with Section 14(a) of the
Exchange Act and the rules and regulations promulgated thereunder.
19. Conditions Upon Issuance of Shares.
An Option shall not be exercisable and a share of Common Stock shall not be
issued pursuant to the exercise of an Option, and Restricted Stock shall not be
awarded until such time as the Plan has been approved by the stockholders of the
Company and unless the award of Restricted Stock, exercise of such Option and
the issuance and delivery of such share pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange or national securities
association upon which the shares of Common Stock may then be listed or quoted,
and shall be further subject to the approval of counsel for the Company with
respect to such compliance.
8
<PAGE>
As a condition to the exercise of an Option, the Company may require the
person exercising such Option to represent and warrant at the time of any such
exercise that the shares of Common Stock are being purchased only for investment
and without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.
20. Effective Date and Termination of Plan.
20.01 Effective Date. This Plan is effective as of the date of its
adoption by the Board of Directors; provided, however, that the Plan and any
Awards granted hereunder shall be null and void if shareholder approval is not
obtained within twelve months of the date of such adoption.
20.02 Termination of the Plan. The Plan will terminate ten (10)
years after the date it is approved by the Board of Directors; provided,
however, that the Board of Directors may terminate the Plan at any time prior
thereto with respect to any shares that are not then subject to Awards.
Termination of the Plan will not affect the rights and obligations of any
Participant with respect to Awards granted before termination.
9
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 596,086
<SECURITIES> 50,000
<RECEIVABLES> 11,663,346
<ALLOWANCES> 977,345
<INVENTORY> 0
<CURRENT-ASSETS> 16,156,047
<PP&E> 28,636,598
<DEPRECIATION> 11,186,829
<TOTAL-ASSETS> 34,172,656
<CURRENT-LIABILITIES> 14,462,199
<BONDS> 0
<COMMON> 2,752,202
0
0
<OTHER-SE> 5,926,256
<TOTAL-LIABILITY-AND-EQUITY> 34,172,656
<SALES> 59,264,088
<TOTAL-REVENUES> 59,264,088
<CGS> 34,151,302
<TOTAL-COSTS> 34,151,302
<OTHER-EXPENSES> 20,238,070
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 917,733
<INCOME-PRETAX> 4,129,031
<INCOME-TAX> 1,863,499
<INCOME-CONTINUING> 2,265,532
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,265,532
<EPS-PRIMARY> 1.19
<EPS-DILUTED> 1.19
</TABLE>
