SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 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 0-13163
Acxiom Corporation
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 71-0581897
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
P.O. Box 2000, 301 Industrial Boulevard,
Conway, Arkansas 72033-2000
(Address of Principal Executive Offices) (Zip Code)
(501) 336-1000
(Registrant's Telephone Number, Including Area Code)
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
The number of shares of common stock, $ 0.10 par value per share,
outstanding as of August 5, 1996, was 25,563,145.
<PAGE>
Form 10-Q
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Company for which report is filed:
ACXIOM CORPORATION
The consolidated financial statements included herein have been prepared by
Registrant, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. In the opinion of the Registrant's
management, however, all adjustments necessary for a fair statement of the
results for the periods included herein have been made and the disclosures
contained herein are adequate to make the information presented not misleading.
All such adjustments are of a normal recurring nature.
<PAGE>
Form 10-Q
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
June 30, March 31,
1996 1996
----------- -----------
Assets
Current assets:
Cash and cash equivalents $ 536,000 3,469,000
Trade accounts receivable, net 58,094,000 44,474,000
Refundable income taxes --- 1,537,000
Other current assets 6,813,000 4,534,000
----------- -----------
Total current assets 65,443,000 54,014,000
----------- -----------
Property and equipment 171,606,000 153,224,000
Less - Accumulated depreciation
and amortization 68,783,000 64,123,000
----------- -----------
Property and equipment, net 102,823,000 89,101,000
----------- -----------
Software, net of accumulated amortization 13,413,000 10,524,000
Excess of cost over fair value of net
assets acquired 41,191,000 13,982,000
Other assets 29,010,000 26,428,000
----------- -----------
$ 251,880,000 194,049,000
=========== ===========
Liabilities and Stockholders' Equity
Current liabilities:
Short-term notes payable 1,000,000 646,000
Current installments of long-term debt 4,053,000 3,866,000
Trade accounts payable 15,907,000 13,596,000
Accrued interest 352,000 435,000
Accrued payroll and related expenses 6,980,000 5,111,000
Other accrued expenses 10,502,000 7,189,000
Advances from customers 434,000 316,000
Income taxes 1,046,000 ---
----------- -----------
Total current liabilities 40,274,000 31,159,000
----------- -----------
Long-term debt, excluding current
installments 72,544,000 26,885,000
Deferred income taxes 10,933,000 10,933,000
Deferred revenue 1,472,000 2,331,000
Stockholders' equity:
Preferred stock --- ---
Common stock 2,613,000 2,435,000
Additional paid-in capital 58,519,000 54,514,000
Retained earnings 68,471,000 68,978,000
Foreign currency translation adjustment (638,000) (863,000)
Treasury stock, at cost (2,308,000) (2,323,000)
----------- -----------
Total stockholders' equity 126,657,000 122,741,000
----------- -----------
Commitments and contingencies
$ 251,880,000 194,049,000
=========== ===========
See accompanying condensed notes to consolidated financial statements.
<PAGE>
Form 10-Q
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
For the Three Months Ended
--------------------------
June 30,
--------------------------
1996 1995
----------- -----------
Revenue $ 93,953,000 59,182,000
Operating costs and expenses:
Salaries and benefits 35,532,000 22,785,000
Computer, communications and other equipment 12,821,000 8,121,000
Data costs 18,781,000 15,500,000
Other operating costs and expenses 17,608,000 7,259,000
----------- -----------
Total operating costs and expenses 84,742,000 53,665,000
----------- -----------
Income from operations 9,211,000 5,517,000
----------- -----------
Other income (expense):
Interest expense (818,000) (392,000)
Other, net (1,492,000) (67,000)
----------- -----------
(2,310,000) (459,000)
----------- -----------
Earnings before income taxes 6,901,000 5,058,000
Income taxes 2,656,000 1,922,000
----------- -----------
Net earnings $ 4,245,000 3,136,000
=========== ===========
Earnings per share $ 0.15 0.12
=========== ===========
Weighted average shares outstanding 29,253,000 25,822,000
=========== ===========
See accompanying condensed notes to consolidated financial statements.
<PAGE>
Form 10-Q
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Three Months Ended
--------------------------
June 30,
--------------------------
1996 1995
----------- -----------
Cash flows from operating activities:
Net earnings $ 4,245,000 3,136,000
Non-cash operating activities:
Depreciation and amortization 6,660,000 5,065,000
Loss on impairment of assets 1,000,000 ---
Other, net 1,256,000 153,000
Changes in assets and liabilities:
Accounts receivable (5,471,000) (167,000)
Other assets 231,000 (1,202,000)
Accounts payable and other liabilities (1,316,000) (455,000)
----------- -----------
Net cash provided by operating activities 6,605,000 6,530,000
----------- -----------
Cash flows from investing activities:
Sale of assets --- 131,000
Cash acquired in acquisition 21,000 1,624,000
Development of software (1,004,000) (250,000)
Capital expenditures (18,740,000) (10,481,000)
----------- -----------
Net cash used by investing activities (19,723,000) (8,976,000)
----------- -----------
Cash flows from financing activities:
Proceeds from debt 22,481,000 4,199,000
Payments of debt (13,516,000) (2,295,000)
Sale of common stock 1,220,000 636,000
Cash dividends paid by acquired company
prior to merger --- (468,000)
Acquisition and retirement of common stock
by acquired company prior to merger --- (1,010,000)
----------- -----------
Net cash provided by financing activities 10,185,000 1,062,000
----------- -----------
Effect of exchange rate changes on cash --- (24,000)
----------- -----------
Net decrease in cash and short-term cash
investments (2,933,000) (1,408,000)
Cash and short-term cash investments at
beginning of period 3,469,000 3,149,000
----------- -----------
Cash and short-term cash investments at end
of period $ 536,000 1,741,000
=========== ===========
Supplemental cash flow information:
Cash paid during the period for:
Interest $ 901,000 740,000
Income taxes 73,000 316,000
=========== ===========
See accompanying condensed notes to consolidated financial statements.
<PAGE>
Form 10-Q
ACXIOM CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. In April 1996, the Company purchased certain assets of Direct Media/DMI,
Inc. ("DMI") for $25,000,000 and the assumption of certain liabilities of
DMI. The $25,000,000 purchase price, payable in three (3) years, is
collaterized by a letter of credit, and may, at DMI's option, be paid in
one million shares of Acxiom common stock in lieu of cash plus accrued
interest. Headquartered in Greenwich, Connecticut, DMI provides list
brokerage, management, and consulting services to business-to-business and
consumer list owners and mailers. At April 1, 1996 the liabilities assumed
by the Company exceeded the fair value of the assets acquired from DMI by
$2,673,000 (unaudited). The resulting excess of purchase price over fair
value of net assets acquired of $27,673,000 is being amortized over its
estimated economic life of 20 years. The acquisition has been accounted for
as a purchase and the results of operations of DMI are included in the
consolidated results of operations from the date of acquisition. The
purchase price for DMI has been allocated as follows:
Trade accounts receivable $ 7,558,000
Property and equipment 2,010,000
Excess of cost over fair value
of net assets acquired 27,673,000
Other assets 1,340,000
Short-term payable to bank (11,594,000)
Accounts payable and other liabilities (1,700,000)
Long-term debt (287,000)
----------
$ 25,000,000
==========
The following consolidated pro forma financial information (which includes
adjustments to reflect the accounting bases recognized in recording the
purchase and to eliminate the effects of transactions between the Company
and DMI) shows the results of the Company's operations for the quarter
ended June 30, 1995 as if the purchase of DMI had occurred at the beginning
of the period:
Revenue $ 70,117,000
==========
Net earnings $ 4,118,000
==========
Earnings per share $ 0.15
==========
<PAGE>
2. On April 9, 1996, the Company issued approximately 1.7 million shares of
its common stock for all of the outstanding common stock and common stock
options of Pro CD, Inc. ("Pro CD"). Headquartered in Danvers,
Massachusetts, Pro CD is a publisher of reference software on CD-ROM. The
acquisition is accounted for as a pooling of interests.
The stockholders' equity and operations of Pro CD are not material in
relation to those of the Company. As such, the Company has recorded the
combination by restating stockholders' equity as of April 1, 1996, without
restating prior year statements of earnings to reflect the pooling of
interests combination. For the year ended December 31, 1995, Pro CD had
revenues and a net loss of approximately $21,675,000 and $970,000,
respectively. At April 1, 1996, Pro CD's liabilities exceeded its assets by
approximately $1,775,000.
3. Effective March 31, 1994 the Company sold substantially all of the assets
of its former Acxiom Mailing Services operating unit ("AMS") to MorCom,
Inc. ("MorCom") in exchange for the assumption of certain liabilities,
$4,500,000 in cash, a mortgage note receivable, and $1,000,000 of preferred
stock issued by MorCom. Additionally, the Company sold MorCom a software
license to use certain applications of the Company's software. At June 30,
1996 the assets remaining on the Company's books related to this
transaction were as follows:
Mortgage note receivable (other assets) $ 3,912,000
Software license receivable (other assets) 640,000
Preferred stock (other assets) 1,000,000
Trade accounts receivable 491,000
---------
$ 6,043,000
In June 1996, MorCom ceased operations. The Company has established
valuation reserves for the full amount of the software license receivable,
preferred stock, and trade accounts receivable. The Company is currently
evaluating various alternatives related to the property. Management
believes that any further loss associated with this event will not be
material to the financial statements.
<PAGE>
4. Long term debt consists of the following:
June 30, March 31,
1996 1996
Unsecured revolving credit agreement $ 34,476,000 11,995,000
Convertible note, payable April 30,
1999 together with interest at
3.12%; collateralized by letter
of credit; convertible at maturity
into 1 million shares of common
stock 25,000,000 ---
9.75% Senior Notes, due May 1, 2000,
payable in annual installments of
$2,143,000 each May 1; Interest is
payable semiannually 8,571,000 10,714,000
8.94% note payable due in monthly
installments of principal and
interest of $50,000 with remaining
balance due June 30, 1997;
collateralized by real estate 4,208,000 4,264,000
Other notes and capital lease
obligations payable 4,342,000 3,778,000
---------- ----------
Total long term debt 76,597,000 30,751,000
Less current installments 4,053,000 3,866,000
---------- ----------
Long-term debt, excluding current
installments $ 72,544,000 $ 26,885,000
========== ==========
Subsequent to June 30, 1996 the unsecured credit agreement was increased to
provide for revolving loans up to $50,000,000 and now expires on July 30,
2001. The 8.94% note payable which is due June 30, 1997 continues to be
classified as long-term debt because the Company intends to use available
funding under the credit agreement to refinance the note on a long-term
basis.
<PAGE>
5. Earnings per share computations are based upon the weighted average number
of shares outstanding, including the dilutive effect of stock options and
warrants and the convertible debt issued for the purchase of DMI, all of
which are considered common stock equivalents. For purposes of calculating
earnings per share, the interest expense on the convertible note is
eliminated. The calculation of earnings per share for the periods presented
is as follows:
For the Three Months Ended
------------------------------
June 30, 1996 June 30, 1995
------------- -------------
Net earnings $ 4,245,000 $ 3,136,000
Interest expense (net of tax effect) 120,000 ---
---------- ----------
Adjusted net earnings $ 4,365,000 $ 3,136,000
========== ==========
Earnings per share $ .15 $ .12
==== ====
Weighted average shares outstanding 29,253,000 25,822,000
========== ==========
6. On July 25, 1995, a customer of the Company, Highlights for Children, Inc.
(Highlights"), filed a demand for arbitration with the American Arbitration
Association. The demand alleges, among other things, breaches of express
warranties in connection with a software license agreement for the
Company's GS/2000 software product. The demand seeks compensatory damages
of approximately $22,000,000 and punitive damages of $44,000,000 plus
attorneys' fees and costs.
The Company believes that the action is substantially without merit.
Highlights is and has been using the GS/2000 software in the daily
operation of its business for over three years. Highlights accepted the
software as operational as of September 1, 1993 and paid the final license
fee payment. Acxiom's software license fee and other related fees invoiced
to Highlights for the GS/2000 software totaled approximately $2,000,000.
The Company intends to vigorously defend the arbitration claim. Management
believes that the ultimate outcome of the arbitration case will result in a
final settlement which would not be material to the financial statements
and which would be substantially lower than the amount noted above.
The Company is involved in various other claims and legal actions in the
ordinary course of business. In the opinion of management, the ultimate
disposition of these matters will not have a material adverse effect on the
Company's consolidated financial position or its expected future
consolidated results of operations.
7. Trade accounts receivable are presented net of allowances for doubtful
accounts, returns, and credits of $4,489,000 and $1,880,000 at June 30,
1996 and March 31, 1996, respectively.
<PAGE>
Form 10-Q
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
Consolidated revenue was a record $93,953,000 for the quarter ended June 30,
1996, a 59% increase over revenue of $59,182,000 for the same quarter a year
ago. Excluding the effects of the Pro CD and DMI acquisitions which were
completed effective April 1, 1996, revenue was up 38% over the prior year. By
industry sector, the direct marketing industry revenue grew 168% including the
additional revenue from DMI, and information and communications revenue grew
118%, which includes the additional revenue from Pro CD. Financial services
revenue grew 13% and insurance revenue grew 19% while the media/publishing
industry sector was flat compared to the prior year.
Operating costs and expenses increased 58% compared to the same quarter a year
ago. Salaries and benefits increased 56%, but after adjusting for the effects of
the acquisitions noted above, the increase was only 28%, principally as a result
of new contracts with The Polk Company ("Polk") and Trans Union Marketing
Services. Computer, communications and other equipment costs were up 58%,
primarily attributable to the new contracts noted above. Data costs were up 21%,
reflecting increased revenue under the Allstate contract. Other operating costs
and expenses were up 143% or $10,349,000. After adjusting for the impact of the
acquisitions noted above, the increase is 52% or $3.8 million which principally
relates to higher facility costs on newly constructed facilities and
volume-related increases. Income from operations was 10% of revenue compared to
9% for the first quarter of the prior year.
Interest expense increased due to increased levels of debt during the quarter
when compared to the year earlier period. Other expense in the quarter included
a charge of $1,000,000 for the write-off of the preferred stock investment in
MorCom (see discussion below).
The Company's effective income tax rate was 38.5% for the quarter, compared to
38% for the first quarter in the prior year. The Company expects the actual
effective rate for the full fiscal year to remain in the 37-39% range.
Net earnings for the quarter increased 35% over the previous year. Earnings per
share increased 25% on a 13% increase in the weighted average number of shares
outstanding. The increase in the number of shares from the same period in the
prior year is primarily due to the acquisitions of Pro CD and DMI during the
first quarter of this year.
Capital Resources and Liquidity
Working capital at June 30, 1996 was $25,169,000 compared to $22,855,000 at
March 31, 1996. At June 30, 1996 the Company had arranged for a temporary
increase in its revolving credit agreement from $30,000,000 to $40,000,000,
giving the Company total available credit lines of $41,000,000 of which
$35,476,000 was outstanding. Subsequent to June 30, 1996 the Company has
completed the negotiation of a new $50,000,000 revolving credit agreement. As
the new revolving credit agreement has a 5-year life, the Company has continued
to classify the entire balance as long-term debt.
<PAGE>
In addition, the Company continues to classify as long-term debt the note
payable, totaling $4,208,000, which is due in full on June 30, 1997 because it
is the Company's intention to pay this loan with additional proceeds from the
revolving credit agreement.
The Company's debt-to-capital ratio (capital defined as long-term debt plus
stockholders' equity) was 36% at June 30, 1995 compared to 18% at March 31,
1996. The increase in the ratio is due to the issuance of a convertible note in
the amount of $25,000,000 for the purchase of DMI as well as additional funding
drawn on the revolving credit agreement during the quarter. Cash provided by
operating activities was $6,605,000 for the three months ended June 30, 1996
compared to $6,530,000 for the same period a year earlier. In the current
quarter, $19,723,000 was used by investing activities and $10,185,000 was
provided by financing activities. Investing activities included $18,740,000 in
capital expenditures compared to $10,481,000 in the prior year's quarter. A
significant amount of the first quarter capital expenditures related to the
acquisition of data center equipment for the Polk data center outsourcing
contract. Management expects capital expenditures to be substantially lower in
the second quarter of the fiscal year. Financing activities included paying off
short-term bank debt incurred when the Company acquired DMI and proceeds from
additional borrowings under the revolving credit agreement.
While the Company does not have any material contractual commitments for capital
expenditures, additional investments in facilities and computer equipment will
continue to be necessary to support the anticipated growth of the business. In
addition, new outsourcing or facilities management contracts frequently require
substantial up-front capital expenditures in order to acquire existing assets.
Management believes that the combination of existing working capital,
anticipated funds to be generated through future operations and the Company's
available credit lines is sufficient to meet the Company's current operating
needs as well as to fund the anticipated levels of capital expenditures. If
additional funds are required, the Company would use existing credit lines to
generate cash, followed by either additional borrowings to be secured by the
Company's assets or the issuance of additional equity securities in either
public or private offerings. Management believes that the Company has
significant unused capacity to raise capital which could be used to support
future growth.
Effective March 31, 1994 the Company sold substantially all of the assets of its
former Acxiom Mailing Services unit ("AMS") in exchange for the assumption of
certain liabilities, $4,500,000 in cash, a mortgage note receivable, and
$1,000,000 of preferred stock issued by the buyer, MorCom, Inc. Additionally the
Company sold MorCom a software license to use certain of the Company's software.
In June, 1996, MorCom ceased operations. The Company has established valuation
reserves for the full amount of the software license receivable, preferred
stock, and trade accounts receivable and is currently evaluating various
alternatives related to the property. Management believes that any further loss
associated with this event will not be material to the financial statements.
<PAGE>
Form 10-Q
ACXIOM CORPORATION
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Shareholders of the Company was held on July
24, 1996. The following matters were voted upon at the meeting:
(1) Shareholders approved the election of three
directors. Voting results for each individual nominee
were as follows: William T. Dillard II, 21,421,690
votes for and 185,218 withheld; Harry C. Gambill,
21,418,167 votes for and 188,741 withheld; and Walter
V. Smiley, 21,605,513 votes for and 1,395 withheld.
(2) Shareholders approved an amendment to the Company's
Certificate of Incorporation to increase the number
of authorized shares of common stock, $.10 par value
per share, from 60,000,000 to 200,000,000, with
18,708,820 votes for, 3,183,989 votes against,
478,931 votes withheld, and no broker non-votes.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
3(i) Amended and Restated Certificate of Incorporation
10 Amended and Restated Key Associate Stock Option Plan
of Acxiom Corporation
27 Financial Data Schedule
(b) Reports on Form 8-K filed during the first quarter:
A report was filed on May 14, 1996, as amended by a Form 8-K/A
filed on July 12, 1996, which reported the acquisition of
substantially all of the assets and assumption of certain
liabilities of Direct Media/DMI, Inc.
<PAGE>
Form 10-Q
ACXIOM CORPORATION AND SUBSIDIARIES
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Acxiom Corporation
Dated: August 13, 1996
By: /s/ Robert S. Bloom
----------------------------------
(Signature)
Robert S. Bloom
Chief Financial Officer
(Chief Accounting Officer)
<PAGE>
EXHIBIT INDEX
Exhibits to Form 10-Q
Exhibit Number Exhibit
3(i) Amended and Restated Certificate of Incorporation
10 Amended and Restated Key Associate Stock Option Plan
of Acxiom Corporation
27 Financial Data Schedule
EXHIBIT 3(i)
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
ACXIOM CORPORATION
Acxiom Corporation (the "Corporation), acting pursuant to Sections 245
and 242 of the General Corporation Law of the State of Delaware, hereby adopts
the following Amended and Restated Certificate of Incorporation. The following
Amended and Restated Certificate of Incorporation amends, restates, integrates,
and supersedes, in its entirety, the Amended and Restated Certificate of
Incorporation of Acxiom Corporation originally filed with the Delaware Secretary
of State on August 21, 1995. The original Certificate of Incorporation was
incorporated under the name of CCX NETWORK, INC. on September 28, 1983.
FIRST: NAME. The name of the Corporation is:
ACXIOM CORPORATION
SECOND: REGISTERED AGENT AND OFFICE. The address of the Corporation's
registered office in the State of Delaware is Corporation Trust Center, 1209
Orange Street, Wilmington, Delaware 19801, in the County of Newcastle. The
name of the Corporation's registered agent at such address is The Corporation
Trust Company.
THIRD: PURPOSES. The purpose or purposes for which the Corporation is
organized are:
(a) To own, operate, sell, lease and otherwise deal in goods and
services related to data processing, letter services, electronic computer
operations, business machines, forms and procedures; to buy, rent, sell, lease
and otherwise deal in computers.
(b) To borrow money in such amount, for such times and upon such terms
and conditions as is deemed wise and expedient; from time to time to draw, make,
accept, endorse, discount, execute and issue promissory notes, drafts, bills of
exchange, warrants, bonds, debentures and other negotiable and transferable
instruments, and evidences, as well as to secure the same by mortgages, pledge,
deed of trust, or otherwise.
(c) To have one or more offices, to carry on all or any of its
operations and business, and without restriction or limit as to amount to
purchase or otherwise acquire, hold, own, mortgage, sell, lease, convey or
otherwise dispose of real and personal property of every class and description.
(d) To enter into, make and perform contracts of any and every kind
with any person, firm, corporation, association, partnership or body politic.
<PAGE>
(e) To own, purchase, lease, or otherwise acquire lands and real
estate, and to sell and develop lands and real estate, and to equip and operate
buildings and structures of every kind and character for the manufacturing,
storing and protection of goods and properties of every character and kind.
(f) To conduct, promote or engage in any lawful act or activity for
which corporations may be organized under the General Corporation Law of the
State of Delaware.
FOURTH: AUTHORIZED SHARES. The total number of shares of stock which
the Corporation shall have authority to issue is:
Two hundred million (200,000,000) shares of Common Stock, ten
cents ($.10) Par Value per common share.
One million (1,000,000) shares of Preferred Stock, one dollar
($1.00) Par Value per preferred share. The Board of Directors
of the Corporation is authorized to provide for the issuance
of shares of Preferred Stock in series and to establish from
time to time the number of shares to be included in each such
series and to fix the designation, powers, preferences and
rights of the shares of each such series and the
qualifications, limitations and restrictions thereof.
FIFTH: DURATION. The Corporation is to have perpetual existence.
SIXTH: DIRECTORS.
(a) Number, Election and Terms of Directors. The number of directors
shall be not less than three (3) nor more than fifteen (15) persons. The exact
number of directors of the Corporation shall be fixed from time to time by the
Board of Directors. The directors shall be classified with respect to the time
for which they severally hold office into three classes, as nearly equal in
number as possible, one class to hold office initially for a term expiring at
the annual meeting of stockholders to be held in 1991, another class to hold
office initially for a term expiring at the annual meeting of stockholders to be
held in 1992, and another class to hold office initially for a term expiring at
the annual meeting of stockholders to be held in 1993, with the members of each
class to hold office until their successors are elected and qualified. At each
annual meeting of the stockholders of the Corporation, the successors to the
class of directors whose term expires at that meeting shall be elected to hold
office for a term expiring at the annual meeting of stockholders held in the
third year following the year of their election. If the number of directors is
changed, any increase or decrease shall be apportioned among the classes so as
to maintain the number of directors in each class as nearly equal as possible,
but in no case shall a decrease in the number of directors shorten the term of
any incumbent director.
(b) Manner of Election. Elections of directors need not be by
written ballot unless the Bylaws of the Corporation shall so provide.
<PAGE>
(c) Stockholder Nomination of Director Candidates and Advance Notice of
Matters to Be Brought Before an Annual Meeting. Advance notice of nominations by
stockholders of persons for election to the Board of Directors and advance
notice of matters to be brought before an annual meeting by shareholders shall
be given in the manner provided in the Bylaws.
(d) Newly Created Directorships and Vacancies. Newly created
directorships resulting from any increase in the number of directors and any
vacancies in the Board of Directors resulting from death, resignation,
disqualification, removal or other cause shall be filled solely by the
affirmative vote of a majority of the remaining directors then in office, even
though less than a quorum of the Board of Directors. Any director elected in
accordance with the proceeding sentence shall hold office for the remainder of
the full term of the class of directors in which the new directorship was
created or the vacancy occurred and until such director's successor shall have
been elected and qualified. No decrease in the number of directors constituting
the Board of Directors shall shorten the term of any incumbent director.
(e) Removal of Directors. No director shall be removed from the Board
of Directors by action of the stockholders of the Corporation during his
appointed term other than for cause. For purposes hereof, cause shall mean final
conviction of a felony, unsound mind, adjudication of bankruptcy, nonacceptance
of office, or conduct prejudicial to the interest of the Corporation.
(f) Scope. The provisions of this Article shall apply only to the
holders of Common Stock. Accordingly, this Article shall in no way limit or
restrict the authority of the Board of Directors to fix the designation, power,
preferences and rights of shares of Preferred Stock and the qualifications,
limitations and restrictions thereof.
SEVENTH: MEETINGS OF HOLDERS OF COMMON STOCK AND ACTION BY HOLDERS OF
COMMON STOCK WITHOUT A MEETING.
(a) Place of Meetings. Meetings of holders of Common Stock may be
held within or without the State of Delaware, as the Bylaws may provide.
(b) Special Meetings. Special meetings of the holders of Common
Stock may be called by such person or persons as may be authorized by the
Bylaws.
(c) Stockholder Action. Any action required or permitted by the General
Corporation Law of the State of Delaware to be taken at a meeting of holders of
Common Stock may be taken without a meeting if one or more written consents,
setting forth the action so taken, shall be signed by all of the holders of
Common Stock entitled to vote with respect to the subject matter thereof. The
consents signed under this provision, taken together, shall have the same force
and effect as a unanimous vote of the holders of Common Stock.
EIGHTH: LOCATION OF BOOKS AND RECORDS. The books and records of the
Corporation may be kept (subject to any provision contained in the statutes)
outside the State of Delaware at such place or places as may be designated from
time to time by the Board of Directors in the Bylaws of the Corporation.
<PAGE>
NINTH: BYLAWS. The Board of Directors shall have power to make, alter,
amend and repeal the Bylaws, except so far as Bylaws adopted by the holders of
Common Stock shall otherwise provide. Notwithstanding the foregoing, Bylaw
provisions relating to informal action by holders of Common Stock without a
meeting, nomination of director candidates by holders of Common Stock, notice of
matters to be brought before an annual meeting by holders of Common Stock, the
number, election and terms of directors elected by holders of Common Stock, the
removal of directors elected by holders of Common Stock, the filling of
vacancies on the Board of Directors created by an increase in the number of
directors or by the death, resignation, removal or disqualification of directors
elected by the holders of Common Stock, and the manner of calling and persons
authorized to call special meetings of holders of Common Stock shall not be
altered, amended or repealed, and no provisions inconsistent therewith shall be
adopted, without (i) the approval of a majority of the Disinterested Directors,
as defined in Article ELEVENTH hereof, or (ii) the affirmative vote of the
holders of at least eighty percent (80%) of the votes entitled to be cast by the
holders of Common Stock.
TENTH: FAIR PRICE PROVISION.
(a) Vote Required for Certain Business Combinations.
1. Higher Vote for Certain Business Combinations. In
addition to any affirmative vote required by law or this Amended and
Restated Certificate of Incorporation, and except as otherwise
expressly provided in Section (b) of this Article,
(A) any merger or consolidation of the Corporation or
any Subsidiary (as hereinafter defined) with (i) any
Interested Stockholder (as hereinafter defined) or (ii) any
other person (whether or not itself an Interested Stockholder)
which is, or after such merger or consolidation would be, an
Affiliate (as hereinafter defined) of an Interested
Stockholder; or
(B) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction or a series
of transactions) to or with any Interested Stockholder or any
Affiliate of any Interested Stockholder of any assets of the
Corporation or any Subsidiary having an aggregate Fair Market
Value of $10,000,000 or more; or
(C) the issuance or transfer by the Corporation or
any Subsidiary (in one transaction or a series of
transactions) of any securities of the Corporation or any
Subsidiary to any Interested Stockholder or any Affiliate of
any Interested Stockholder in exchange for cash, securities or
other property (or a combination thereof) having an aggregate
Fair Market Value of $10,000,000 or more; or
<PAGE>
(D) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation proposed by or
on behalf of any Interested Stockholder or any Affiliate of
any Interested Stockholder; or
(E) the adoption of any plan of share exchange
between the Corporation or any Subsidiary with any Interested
Stockholder or any other person which is, or after such share
exchange would be, an Affiliate of any Interested Stockholder;
or
(F) any reclassification of securities (including any
reverse stock split), or recapitalization of the Corporation,
or any merger or consolidation of the Corporation with any of
its Subsidiaries or any other transaction (whether or not with
or into or otherwise involving an Interested Stockholder)
which has the effect, directly or indirectly, of increasing
the proportionate share of the outstanding shares of any class
of Equity Security (as hereinafter defined) of the Corporation
or any Subsidiary (as hereinafter defined) or the Corporation
or any Subsidiary which is directly or indirectly owned by any
Interested Stockholder or any Affiliate of any Interested
Stockholder;
shall require the affirmative vote of the holders of at least eighty percent
(80%) of the votes entitled to be cast by the holders of Common Stock. Such
affirmative vote shall be required notwithstanding the fact that no vote may be
required, or that a lesser percentage may be specified, by law or in any
agreement with any national securities exchange or otherwise.
2. Definition of "Business Combination". The term "Business
Combination" used in this Article shall mean any transaction which is
referred to in any one or more of clauses (A) through (F) of Paragraph
1 of this Section (a).
(b) When Higher Vote is Not Required. The provisions of Section (a) of
this Article shall not be applicable to any particular Business Combination, and
such Business Combination shall require only such affirmative vote as is
required by law and any other provision of this Amended and Restated Certificate
of Incorporation, if all of the conditions specified in either of the following
paragraphs 1 and 2 are met:
1. Approval by Disinterested Directors. The Business
Combination shall have been approved by a majority of the Disinterested
Directors (as hereinafter defined).
2. Price and Procedure Requirements. All of the
following conditions shall have been met:
(A) The aggregate amount of the cash and the Fair
Market Value (as hereinafter defined) as of the date of the
consummation of the Business Combination of consideration
other than cash to be received per
<PAGE>
share by holders of Common Stock in such Business Combination
shall be at least equal to the higher of the following:
(i) (if applicable) the highest per share
price (including any brokerage commissions, transfer
taxes and soliciting dealers' fees) paid by the
Interested Stockholder for any shares of Common Stock
acquired by it (a) within the two-year period
immediately prior to the first public announcement of
the terms of the proposed Business Combination (the
"Announcement Date") or (b) in the transaction in
which it became an Interested Stockholder, whichever
is higher; and
(ii) the Fair Market Value per share of Common
Stock on the Announcement Date or on the date on
which the Interested Stockholder became an Interested
Stockholder (such latter date is referred to in this
Article as the "Determination Date"), whichever is
higher.
(B) The aggregate amount of the cash and the Fair
Market Value as of the date of the consummation of the
Business Combination of consideration other than cash to be
received per share by holders of shares of any other class of
outstanding stock shall be at least equal to the highest of
the following (it being intended that the requirements of this
paragraph 2(B) shall be required to be met with respect to
every class of outstanding stock, whether or not the
Interested Stockholder has previously acquired any shares of a
particular class of stock):
(i) (if applicable) the highest per share
price (including any brokerage commissions, transfer
taxes and soliciting dealers' fees) paid by the
Interested Stockholder for any shares of such class
of stock acquired by it (a) within the two-year
period immediately prior to the Announcement Date or
(b) in the transaction in which it became an
Interested Stockholder, whichever is higher;
(ii) (if applicable) the highest
preferential amount per share to which the holders of
shares of such class of stock are entitled in the
event of any voluntary liquidation, dissolution or
winding up of the Corporation; and
(iii) the Fair Market Value per share of
such class of stock on the Announcement Date or on
the Determination Date, whichever is higher.
<PAGE>
(C) The consideration to be received by holders of a
particular class of outstanding stock (including Common Stock)
shall be in cash or in the same form as the Interested
Stockholder has previously paid for shares of such class of
stock. If the Interested Stockholder has paid for shares of
any class of stock with varying forms of consideration, the
form of consideration for such class of stock shall be either
cash or the form used to acquire the largest number of shares
of such class of stock previously acquired by it. The price
determined in accordance with paragraph 2(A) and 2(B) of this
Section (b) shall be subject to appropriate adjustment in the
event of any stock dividend, stock split, combination of
shares or similar event.
(D) After such Interested Stockholder has become an
Interested Stockholder and prior to the consummation of such
Business Combination: (i) except as approved by a majority of
the Disinterested Directors, there shall have been no failure
to declare and pay at the regular date therefor any full
quarterly dividends (whether or not cumulative) on any
outstanding stock having preference over the Common Stock as
to dividends or upon liquidation; (ii) there shall have been
(a) no reduction in the annual rate of dividends paid on the
Common Stock (except as necessary to reflect any subdivision
of the Common Stock), except as approved by a majority of the
Disinterested Directors, and (b) an increase in such annual
rate of dividends as necessary to reflect any reclassification
(including any reverse stock split), recapitalization,
reorganization or any similar transaction which has the effect
of reducing the number of outstanding shares of the Common
Stock, unless the failure so to increase such annual rate is
approved by a majority of the Disinterested Directors; and
(iii) such Interested Stockholder shall have not become the
beneficial owner of any additional shares of Common Stock
except as part of the transaction which results in such
Interested Stockholder becoming an Interested Stockholder.
(E) After such Interested Stockholder has become an
Interested Stockholder, such Interested Stockholder shall not
have received the benefit, directly or indirectly (except
proportionately as a stockholder), of any loans, advances,
guarantees, pledges or other financial assistance or any tax
credits or other tax advantages provided by the Corporation or
any Subsidiary whether in anticipation of or in connection
with such Business Combination or otherwise.
(F) A proxy or information statement describing the
proposed Business Combination and complying with the
requirements of the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder (or any
subsequent provisions replacing such Act, rules or
regulations) shall be mailed to public stockholders of the
<PAGE>
Corporation at least 30 days prior to the consummation of such
Business Combination (whether or not such proxy or information
statement is required to be mailed pursuant to such Act or
subsequent provisions).
(c) Certain Definitions. For the purpose of this Article:
1. A "person" shall mean any individual, firm,
corporation or other entity.
2. "Interested Stockholder" shall mean any person (other
than the Corporation or any Subsidiary) who or which:
(A) is the beneficial owner, directly or indirectly,
of 5% or more of the voting power of the outstanding Common
Stock; or
(B) is an Affiliate of the Corporation and at any
time within the two-year period immediately prior to the date
in question was the beneficial owner, directly or indirectly,
of 5% or more of the voting power of the then outstanding
Common Stock; or
(C) is an assignee of or has otherwise succeeded to
any shares of Common Stock which were at any time within the
two-year period immediately prior to the date in question
beneficially owned by any Interested Stockholder, if such
assignment or succession shall have occurred in the course of
a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933, as
amended.
3. A person shall be a "beneficial owner" of any Common
Stock:
(A) which such person or any of its Affiliates
or Associates (as hereinafter defined) beneficially owns
directly or indirectly; or
(B) which such person or any of its Affiliates or
Associates has (i) the right to acquire (whether such right is
exercisable immediately or only after the passage of time),
pursuant to any agreement, arrangement or understanding or
upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (ii) the right to vote
pursuant to any agreement, arrangement or understanding; or
(C) which are beneficially owned, directly or
indirectly, by any other person with which such person or any
of its Affiliates or Associates has any agreement, arrangement
or understanding for the purpose of acquiring, holding, voting
or disposing of any shares of Common Stock.
<PAGE>
4. For the purpose of determining whether a person is an
Interested Stockholder pursuant to paragraph 2 of this Section (c), the
number of shares of Common Stock deemed to be outstanding shall include
shares deemed owned through application of paragraph 3 of this Section
(c) but shall not include any other shares of Common Stock which may be
issuable pursuant to any agreement, arrangement or understanding, or
upon exercise of conversion rights, warrants or options, or otherwise.
5. "Affiliate" or "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as in effect on
January 1, 1990.
6. "Disinterested Director" means any member of the Board of
Directors who is unaffiliated with the Interested Stockholder and was a
member of the Board of Directors prior to the time that the Interested
Stockholder became an Interested Stockholder, and any successor of a
Disinterested Director who is unaffiliated with the Interested
Stockholder and is recommended to succeed a Disinterested Director by a
majority of Disinterested Directors then on the Board of Directors.
7. "Equity Security" shall have the meaning ascribed
to such term in Section 3(A)(11) of the Securities Exchange Act of
1934, as in effect on January 1, 1990.
8. "Fair Market Value" means: (A) in the case of stock, the
highest closing sale price during the 30-day period immediately
preceding the date in question of a share of such stock on the
Composite Tape for New York Stock Exchange-Listed Stocks, or, if such
stock is not quoted on the Composite Tape, on the New York Stock
Exchange, or, if such stock is not listed on such Exchange, on the
principal United States securities exchange registered under the
Securities Exchange Act of 1934, as amended, on which such stock is
listed, or, if such stock is not listed on any such exchange, the
highest closing bid quotation with respect to a share of such stock
during the 30-day period preceding the date in question on the National
Association of Securities Dealers, Inc. Automated Quotations System or
any system then in use, or if no such quotations are available, the
fair market value on the date in question of a share of such stock as
determined by a majority of the Disinterested Directors in good faith;
and (B) in the case of property other than cash or stock, the fair
market value of such property on the date in question as determined by
a majority of the Disinterested Directors in good faith.
9. "Subsidiary" means any corporation of which a majority of
any class of Equity Security is owned, directly or indirectly, by the
Corporation; provided, however, that for the purposes of the definition
of Interested Stockholder set forth in paragraph 2 of this Section (c),
the term "Subsidiary"
<PAGE>
shall mean only a corporation of which a majority of each class of
Equity Security is owned, directly or indirectly, by the Corporation.
10. In the event of any Business Combination in which the
Corporation survives, the phrase "consideration other than cash to be
received" as used in paragraphs 2(A) and (B) of section (b) of this
Article EIGHTH shall include the shares of Common Stock and/or the
shares of any other class of outstanding stock retained by the holders
of such shares.
(d) Powers of the Board of Directors. A majority of the Directors shall
have the power and duty to determine for the purposes of this Article, on the
basis of information known to them after reasonable inquiry, (1) whether a
person is an Interested Stockholder, (2) the number of shares of Common Stock
beneficially owned by any person, (3) whether a person is an Affiliate or
Associate of another, (4) whether the assets which are the subject of any
Business Combination have, or the consideration to be received for the issuance
or transfer of securities by the Corporation or any Subsidiary in any Business
Combination has, an aggregate Fair Market Value of $10,000,000 or more. A
majority of the Directors shall have the further power to interpret all of the
terms and provisions of this Article.
(e) No Effect on Fiduciary Obligations of Interested Shareholders.
Nothing contained in this Article shall be construed to relieve any Interested
Stockholder from any fiduciary obligation imposed by law.
ELEVENTH: STOCKHOLDER VOTE ON EXTRAORDINARY MATTERS. Any merger or
consolidation of the Corporation with any other person, any sale, lease,
exchange, mortgage, pledge, transfer or other disposition by the Corporation of
its property or assets, and any dissolution or liquidation of the Corporation or
revocation thereof that the General Corporation Law of the State of Delaware
requires be approved by the holders of Common Stock must be approved by the
affirmative vote of the holders of at least sixty-six and two-thirds percent (66
2/3%) of the votes entitled to be cast by the holders of Common Stock.
TWELFTH: LIMITATION OF DIRECTOR LIABILITY.
(a) To the fullest extent permitted by the General Corporation Law of
the State of Delaware, as the same exists or may hereafter be amended, a
director of the Corporation shall not be liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director.
(b) Any repeal or modification of the foregoing paragraph by the
stockholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such repeal
or modification.
THIRTEENTH: INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES. Any
person who was or is a party or is threatened to be a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
<PAGE>
administrative or investigative (including any action or suit by or in the right
of the Corporation to procure a judgment in its favor) by reason of the fact
that he is or was a director, officer, employee or agent of the Corporation, or
is or was serving at the request of the Corporation as a director, officer,
employee or agent of another Corporation, partnership, joint venture, trust or
other enterprise, shall be indemnified by the corporation, if, as and to the
extent authorized by the laws of the State of Delaware, against expenses
(including the attorneys' fees), judgments, fines and amounts paid in
settlement, actually and reasonably incurred by him, in connection with the
defense or settlement of such action, suit, investigation or proceeding. The
indemnification expressly provided by statute in a specific case shall not be
deemed exclusive of any other rights to which any person indemnified may be
entitled under any lawful agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall continue as to a
person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators of such a
person.
FOURTEENTH: AMENDMENTS. From time to time any of the provisions
of this Amended and Restated Certificate of Incorporation may be amended,
altered or repealed, and other provisions authorized by the laws of the State of
Delaware at the time in force may be added or inserted by the affirmative vote
of the holders of at least a majority of the votes entitled to be cast by the
holders of the outstanding stock of the Corporation entitled to vote thereon;
provided, however, the affirmative vote of the holders of at least eighty
percent (80%) of the votes entitled to be cast by the holders of Common Stock
shall be required to alter, amend, repeal, or adopt any provision inconsistent
with Articles SIXTH, SEVENTH, NINTH, TENTH and FOURTEENTH hereof.
<PAGE>
The above Amended and Restated Certificate of Incorporation was adopted
and approved by the Board of Directors of the Corporation on the 29th day of
May, 1996 and by the stockholders of the Corporation, in the manner and by the
vote prescribed by Section 242 of the General Corporation Law of the State of
Delaware, this 24th day of July, 1996.
/s/ Charles D. Morgan, Jr.
------------------------------------
Charles D. Morgan, Jr.,
Chairman of the Board, CEO and President
ATTEST:
/s/ Catherine L. Hughes
- ---------------------------------
Catherine L. Hughes, Secretary
EXHIBIT 10
AMENDED AND RESTATED KEY ASSOCIATE STOCK OPTION PLAN
OF
ACXIOM CORPORATION
as of July 23, 1996
1. Establishment, Continuation, and Purpose. On November 9, 1983, the
Board of Directors (the "Board") and the shareholders of Acxiom Corporation
(formerly CCX Network, Inc.) (the "Company") approved the adoption of the CCX
Network, Inc. Incentive Stock Option Plan and the CCX Network, Inc. Nonstatutory
Stock Option Plan. Such plans were amended and restated effective as of April
22, 1987 so as to combine the two separate plans into one plan (the "Plan") and
to comply with certain provisions of the Tax Reform Act of 1986. Subsequent
amendments were adopted on July 20, 1988; January 30, 1991; May 26, 1993; May
24, 1995 and July 23, 1996. The purpose of the Plan is to further the growth and
development of the Company and any of its present or future subsidiary
corporations, as hereinafter defined, by granting to certain key associates of
the Company and any subsidiary corporation, as an incentive and encouragement to
stock ownership, options to purchase shares of common stock of the Company, $.10
par value ("Common Stock"), thereby offering such key associates a proprietary
interest in the Company's business and a more direct stake in its continuing
welfare, and aligning their interests with those of the Company's stockholders.
2. Administration. The Plan shall be administered by a committee (the
"Committee") of no less than two "disinterested" (as that term is defined in
Rule 16b-3 of the Securities Exchange Act of 1934, as amended (the "Act"))
members of the Company's Board of Directors. The Committee is authorized to
grant options on behalf of the Company as hereinafter provided, to interpret the
Plan and options granted pursuant to the Plan, and to make and amend such
regulations as it may deem appropriate.
3. Grant of Options. Options to purchase shares of Common Stock shall
be granted on behalf of the Company by the Committee from time to time and
within the limits of the Plan. The Committee shall determine the key associates
("Optionees" or "Participants") of the Company and of any subsidiary corporation
to whom options are to be granted, the number of shares to be granted to each,
the option price, the option period(s), and the number of shares that may be
exercised during such option period(s). Options granted under the Plan may be
either non-qualified stock options or incentive stock options, as defined by
Section 422A of the Internal Revenue Code of 1986, as amended (the "Code"). The
Committee, at the time each option is granted, shall designate such option as
either a non-qualified stock option or an incentive stock option. Any incentive
stock option granted under the Plan must be exerciseable within ten (10) years
of the date upon which it is granted. For incentive options granted after
December 31, 1986, the aggregate fair market value (as determined at the time
the option is granted) of the stock with respect to which incentive options
granted herein are exerciseable for the first time by any Optionee during any
calendar year (under all plans of the Company and its subsidiaries) shall not
exceed $100,000.
4. Shares Subject to the Plan. The shares which may be granted
pursuant to the Plan shall be authorized and unissued shares of Common Stock not
exceeding in the aggregate 7,600,000 shares.
5. Eligible Participants. All key associates of the Company and any
subsidiary corporation of the Company shall be eligible to receive options and
thereby become Participants in the Plan. In granting options, the Board may
include or exclude previous Participants in the Plan. As used herein, the terms
"subsidiary corporation" and "parent corporation" shall mean a "subsidiary
corporation" or "parent corporation" as defined in Section 425 of the Code.
<PAGE>
For purposes of this Plan, a "key associate" shall mean employees of
the Company or its affiliates, directors, officers (whether or not they are
directors), independent contractors and consultants who render those types of
services which tend to contribute materially to the success of the Company or an
affiliate or which reasonably may be anticipated to contribute materially to the
future success of the Company or an affiliate.
No executive officer named in the Summary Compensation Table of the Company's
then current Proxy Statement shall be eligible to receive in excess of 300,000
options in any three-year period.
6. Option Price. (a) The price for each share of Common Stock
purchasable under any incentive option shall be not less than one hundred
percent (100%) of the fair market value per share on the date of grant. The
price for each share of Common Stock purchasable under any non-qualified option
shall be any price determined by the Committee in its sole discretion. All such
prices shall be subject to adjustment as provided for in paragraph 17 hereof.
For purposes of determining the fair market value of the Common Stock, the
following rules shall apply:
(i) If the Common Stock is at the time listed or admitted to
trading on any stock exchange, then the fair market value shall be
either (a) the closing sales price of the Common Stock on the date in
question on the principal exchange on which the Common Stock is then
listed or admitted to trading, or (b) the average bid and ask price for
the ten (10) trading days preceding the week during which the Committee
grants options. With respect to (a), if no reported sale of the Common
Stock takes place on the date in question on the principal exchange,
then the fair market value shall be determined as of the closest
preceding date on which such principal exchange shall be have been open
for business and shares of the Common Stock were traded.
(ii) If the Common Stock is not at the time listed or admitted
to trading on a stock exchange, the fair market value shall be the mean
between the closing bid and asked quotations for the Common Stock on
the date in question in the over-the-counter market, as such prices are
reported in a publication of general circulation selected by the
Company and regularly reporting the market price of the Common Stock in
such market. If there are no bid and asked quotations for the Common
Stock on such date, the fair market value shall be deemed to be the
mean between the closing bid and asked quotations in the
over-the-counter market for the Common Stock on the closest date
preceding the date in question for which such quotations are available.
(b) If any Optionee to whom an incentive option is to be granted under
the Plan is on the date of grant the owner of stock (as determined under Section
425(d) of the Code) possessing more than 10% of the total combined voting power
of all classes of stock of the Company or any one of its subsidiaries, then the
following special provisions shall be applicable to any options granted to such
individual:
(i) The option price per share of Common Stock
subject to such option shall not be less than 110% of the fair
market value of one share of Common Stock on the date of
grant; and
(ii) The option shall not have a term in excess of
five (5) years from the date of grant.
<PAGE>
7. Exercise Period. Subject to paragraph 18, the period for
exercising an option (the "Exercise Period") shall be such period of time as may
be designated by the Committee at the time of grant, except that:
(a) If a Participant retires during the Exercise Period, such
option shall be exerciseable only during the three months following the
effective date of retirement, but in no event after the expiration of
the Exercise Period, unless the Committee in its discretion provides
otherwise.
(b) If a Participant terminates his or her employment by
reason of disability, such option shall be exerciseable only during the
six months following such termination, but in no event after the
expiration of the Exercise Period, unless the Committee in its
discretion provides otherwise.
(c) If a Participant dies during the Exercise Period, such
option shall be exerciseable by the executors, administrators, legatees
or distributees of the Participant's estate only during the twelve
months following the date of death, but in no event after the
expiration of the Exercise Period, unless the Committee in its
discretion provides otherwise.
(d) If a Participant ceases to be an associate of the Company
for any cause other than retirement, disability or death, such option
shall be exerciseable only during the three months following such
termination, but in no event after the expiration of the Exercise
Period, unless the Committee in its discretion provides otherwise.
The maximum duration of any incentive stock option granted under the
Plan shall be ten (10) years from the date of grant, although such options may
be granted for a lesser duration. The Committee shall have the right to
accelerate, in whole or in part, from time to time, conditionally or
unconditionally, a Participant's rights to exercise any option granted
hereunder.
8. Exercise of Option. Subject to paragraphs 7(a), 7(b), 7(c), 7(d) and
18, an option may be exercised at any time and from time to time during the
Exercise Period. If one of the events referred to in paragraphs 7(a), 7(b), 7(c)
or 7(d) occurs, the option shall be exerciseable (subject to paragraph 18) under
this paragraph 8 during the three months following retirement, during the six
months following termination by reason of disability, during the twelve months
following death, or during the three months following termination for any other
reason, only as to the number of shares, if any, as to which the option was
exerciseable immediately prior to said retirement, disability, death or other
termination, unless the Committee in its discretion provides otherwise.
Notwithstanding the foregoing, with respect to any incentive stock
option granted under the Plan prior to January 1, 1987, no such incentive stock
option shall be exerciseable by a Participant while there is outstanding any
other incentive stock option which was previously granted to the Participant to
purchase shares in the Company or in a corporation which (at the time of the
granting of such option) is a parent or subsidiary corporation of the Company,
or is a predecessor corporation of any such corporation. This provision shall
not apply to any options granted after December 31, 1986. For purposes of this
paragraph 8, any incentive stock option shall be treated as outstanding until
such option is exercised in full or expires by reason of lapse of time.
9. Payment for Shares. Full payment for shares purchased, together with
the amount of any tax or excise due in respect of the sale and issue thereof,
shall be made in such form of property (whether cash, securities or other
consideration) as may be acceptable to the
<PAGE>
Committee. The Company will issue no certificates for shares until full payment
therefor has been made, and a Participant shall have none of the rights of a
shareholder until certificates for the shares purchased are issued to him
or her. In lieu of cash, a Participant may pay for the shares purchased with
shares of the Company's Common Stock having a fair market value on the date
upon which the Participant exercises his or her option equal to the option
price, or with a combination of cash and shares of Common Stock equal to the
aggregate option price. For purposes of determining fair market value, the
rules set forth in paragraph 6 shall apply.
10. Withholding Taxes. The Company may require a Participant exercising
a non-qualified option granted hereunder to reimburse the Company (or the
subsidiary which employs such Participant) for taxes required by any government
to be withheld or otherwise deducted and paid by such corporation in respect of
the issuance of the shares. For purposes of determining fair market value, the
rules set forth in Paragraph 6 shall apply. A Participant may elect to satisfy
such withholding requirements by any one of the following methods:
(a) A Participant may request that the Company (or the
subsidiary which employs such Participant) withhold from the number of
shares which would otherwise be issued to the Participant that number
of shares (based upon the fair market value of the Common Stock on the
date of exercise) which would satisfy the withholding requirement. If
such an election is made, the Participant must notify the Company that
he or she is so electing either (i) six months prior to the date the
option exercise becomes taxable (which will either be the date of
exercise or, if an election under Section 83(b) of the Code is made,
six months before the date of exercise), or (ii) during any period
beginning on the third business day following the date upon which any
quarterly or annual sales and earnings statement is released by the
Company and ending on the thirtieth day following the release of any
such statement, such notice provisions being applicable only to those
Participants who are "executive officers," as defined in the Act, or
directors of the Company.
(b) A Participant may deliver previously-owned shares of
Common Stock (based upon the fair market value of the Common Stock on
the date of exercise) in an amount which would satisfy the withholding
requirement.
(c) A Participant may deliver cash in an amount which would
satisfy the withholding requirement.
11. Stock Appreciation Rights. The Committee may, under such terms and
conditions as it deems appropriate, authorize the surrender by an Optionee of
all or part of an unexercised option and authorize a payment in consideration
therefor of an amount equal to the difference obtained by subtracting the option
price of the shares then subject to exercise under such option from the fair
market value of the Common Stock represented by such shares on the date of
surrender, provided that the Committee determines that such settlement is
consistent with the purpose of the Plan. Such payment may be made in shares of
Common Stock valued at their fair market value on the date of surrender of such
option or in cash, or partly in shares and partly in cash. Acceptance of such a
surrender and the manner of payment shall be in the discretion of the Committee,
subject to the limitations contained in Section 422A of the Code and Section
16b(3) of the Act. For purposes of determining fair market value, the rules set
forth in Paragraph 6 shall apply. If an option is surrendered pursuant to this
Paragraph 11, the shares covered by the surrendered option will not thereafter
be available for grant under the Plan.
12. Loans or Guarantee of Loans. The Committee may authorize the
extension of a loan to an Optionee by the Company (or the guarantee by the
Company of a loan obtained by an
<PAGE>
Optionee from a third party) in order to assist an Optionee to exercise an
option granted under the Plan. The terms of any loans or guarantees, including
the interest rate and terms of repayment, will be subject to the discretion of
the Committee. Loans and guarantees may be granted without security, the maximum
credit available being the exercise price of the option sought to be executed
plus any federal and state income tax liability incurred upon exercise of the
option.
13. Nonassignability. Each option by its terms shall not be
transferable otherwise than by will or the laws of descent and distribution, and
shall be exerciseable during a Participant's lifetime only by him.
14. Conditions to Exercise of Options. The Committee may, in its
discretion, require as conditions to the exercise of options and the issuance of
shares thereunder either (a) that a registration statement under the Securities
Act of 1933, as amended, with respect to the options and the shares to be issued
upon the exercise thereof, containing such current information as is required by
the Rules and Regulations under said Act, shall have become, and continue to be,
effective; or (b) that the Participant (i) shall have represented, warranted and
agreed, in form and substance satisfactory to the Company, both that he or she
is acquiring the option and, at the time of exercising the option, that he or
she is acquiring the shares for his/her own account, for investment and not with
a view to or in connection with any distribution; (ii) shall have agreed to
restrictions on transfer, in form and substance satisfactory to the Company; and
(iii) shall have agreed to an endorsement which makes appropriate reference to
such representations, warranties, agreements and restrictions both on the option
and on the certificate representing the shares.
15. Conditions to Effectiveness of the Plan. No option shall be granted
or exercised if the grant of the option, or the exercise and the issuance of
shares pursuant thereto, would be contrary to law or the regulations of any duly
constituted authority having jurisdiction.
16. Alteration, Termination, Discontinuance, Suspension, or Amendment.
The Board, in its discretion, may alter, terminate, discontinue, suspend or
amend the Plan at any time. The Board may not, however, without shareholder
approval (except as provided below in paragraph 17), (i) materially increase the
maximum number of shares subject to the Plan, (ii) materially increase the
benefits accruing to Participants under the Plan, or (iii) materially modify the
requirements as to eligibility for participation in the Plan or, without the
consent of the affected Participant, change, alter or impair any option
previously granted to him under the Plan (except as provided below in paragraph
18). The Committee shall be authorized to amend the Plan and the options granted
thereunder to permit the options to qualify as incentive stock options under
Section 422A of the Code and the regulations promulgated thereunder. The rights
and obligations under any option granted before amendment of the Plan or any
unexercised portion of such option shall not be adversely affected by amendment
of the Plan or the option without the consent of the holder of the option.
17. Effect of Changes in Common Stock. If the Company shall combine,
subdivide or reclassify the shares of Common Stock which have been or may be
subject to the Plan, or shall declare thereon any dividend payable in shares of
Common Stock, or shall reclassify or take any other action of a similar nature
affecting the Common Stock, then the number and class of shares of Common Stock
which may thereafter become subject to options (in the aggregate and to any
Participant) shall be adjusted accordingly, and, in the case of each option
outstanding at the time of any such action, the number and class of shares which
may thereafter be purchased pursuant to such option and the option price per
share shall be adjusted to such extent as may be determined by the Committee to
be necessary to preserve unimpaired the rights of the Participants, and each and
every such determination shall be conclusive and binding upon such Participants.
<PAGE>
18. Reorganization. In case of any one or more reclassifications,
changes or exchanges of outstanding shares of Common Stock or other stock (other
than as provided in paragraph 17), or consolidations of the Company with, or
mergers of the Company into other corporations, or other recapitalizations or
reorganizations (other than transactions in which the Company continues to exist
and which do not result in any reclassification change or exchange of
outstanding shares of the Company), or in case of any one or more sales or
conveyances to another corporation of the property of the Company as an
entirety, or substantially an entirety (any and all of which are referred to in
this paragraph 18 as "Reorganization(s)"), the holder of each option then or
thereafter outstanding shall have the right, upon any subsequent exercise
thereof, to acquire the same kind and amount of securities and property which
such holder would then hold if such holder had exercised the option immediately
before the first of any such Reorganization, and continued to hold all
securities and property which came to such holder as a result of that and any
subsequent Reorganization, less all securities and property surrendered or
canceled pursuant to any of same, the adjustment rights in paragraph 17 and this
paragraph 18 being continuing and cumulative; provided, that notwithstanding any
provisions of paragraph 7 to the contrary, the Committee shall have the right in
connection with any such Reorganization, upon not less than thirty (30) days,
written notice to the holders of outstanding options, to terminate the Exercise
Period, and in such event all outstanding options (other than options as to
which one of the events referred to in paragraph 7 has occurred) may be
exercised only to the extent thereby permitted, in each case only at a time
prior to such Reorganization. A liquidation shall be deemed a Reorganization for
the foregoing purpose.
19. Use of Proceeds. Proceeds realized from the sale of Common
Stock pursuant to options granted hereunder shall constitute general funds of
the Company.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF EARNINGS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> JUN-30-1996
<CASH> 536
<SECURITIES> 0
<RECEIVABLES> 58,094
<ALLOWANCES> 4,489
<INVENTORY> 0
<CURRENT-ASSETS> 65,443
<PP&E> 171,606
<DEPRECIATION> 68,783
<TOTAL-ASSETS> 251,880
<CURRENT-LIABILITIES> 40,274
<BONDS> 72,544
0
0
<COMMON> 2,613
<OTHER-SE> 124,044
<TOTAL-LIABILITY-AND-EQUITY> 251,880
<SALES> 0
<TOTAL-REVENUES> 93,953
<CGS> 0
<TOTAL-COSTS> 84,742
<OTHER-EXPENSES> 1,492
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 818
<INCOME-PRETAX> 6,901
<INCOME-TAX> 2,656
<INCOME-CONTINUING> 4,245
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,245
<EPS-PRIMARY> .15
<EPS-DILUTED> .15
</TABLE>
