SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. _______)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ACXIOM CORPORATION
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
ACXIOM CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held July 30, 1997
[GRAPH OMITTED]
To the Shareholders of Acxiom Corporation:
Notice is hereby given that the Annual Meeting of Shareholders of
Acxiom Corporation will be held at the Company's corporate offices at 301
Industrial Boulevard, Conway, Arkansas on Wednesday, July 30, 1997, at 10:00
a.m. for the following purposes:
1. To elect two directors of the Company.
2. To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
Only shareholders of record at the close of business on June 9, 1997,
will be entitled to notice of, and to vote at, the meeting.
You are cordially invited to the meeting. WE ASK THAT YOU SIGN AND
RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE. A POSTAGE PAID ENVELOPE
IS ENCLOSED FOR YOUR CONVENIENCE IN RETURNING YOUR PROXY.
By Order of the Board of Directors
Catherine L. Hughes
Secretary
Conway, Arkansas
June 16, 1997
YOUR VOTE IS IMPORTANT!
PLEASE SIGN AND RETURN THE ACCOMPANYING PROXY.
<PAGE>
ACXIOM CORPORATION
PROXY STATEMENT
For
ANNUAL MEETING OF SHAREHOLDERS
To Be Held July 30, 1997
This Proxy Statement is furnished in connection with the solicitation
of Proxies for use at the Annual Meeting of Shareholders to be held at the
Company's corporate offices at 301 Industrial Boulevard, Conway, Arkansas on
Wednesday, July 30, 1997, at 10:00 a.m., or any adjournment or adjournments
thereof, and is solicited on behalf of the Board of Directors of the Company.
The Company's address is P.O. Box 2000, 301 Industrial Boulevard, Conway,
Arkansas 72033-2000, and its telephone number is (501) 336-1000. This Proxy
material is first being mailed to shareholders on June 16, 1997. Only
shareholders of record at the close of business on June 9, 1997, are entitled to
notice of, and to vote at, the meeting.
Any shareholder giving a Proxy has the power to revoke it at any time
before its exercise. A Proxy may be revoked by filing with the Secretary of the
Company a written revocation or a duly executed Proxy bearing a later date.
Proxies solicited herein will be voted in accordance with any directions
contained therein, unless the Proxy is received in such form or at such time as
to render it ineligible to vote, or unless properly revoked. If no choice is
specified, the shares will be voted "FOR" each matter being acted upon.
If matters of business other than those described in the Proxy properly
come before the meeting, the persons named in the Proxy will vote in accordance
with their best judgment on such matters. The Proxies solicited herein shall not
confer any authority to vote at any meeting of shareholders other than the
meeting to be held on July 30, 1997, or any adjournment or adjournments thereof.
The cost of soliciting these Proxies will be borne by the Company. In
addition to solicitation by mail, the Company may make arrangements with
brokerage houses and other custodians, nominees and fiduciaries to forward
Proxies and Proxy material to their principals and may reimburse them for their
expenses in doing so.
OUTSTANDING STOCK, VOTING RIGHTS AND
VOTE REQUIRED FOR APPROVAL
The Company's Common Stock, $.10 par value per share ("Common Stock"),
issued and outstanding as of May 29, 1997, totaled 51,721,132 shares. Each
shareholder is entitled to one vote for each share of stock owned of record at
the close of business on June 9, 1997. The stock transfer books of the Company
will not be closed.
In order to be elected as a Director of the Company, each nominee must
receive the favorable vote of a majority of the votes cast at the meeting for
that position. Cumulative voting for directors is not permitted. Abstentions and
shares held by a broker that has indicated that it does not have discretionary
authority to vote on a particular matter will not be counted as votes cast.
<PAGE>
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of May 29, 1997, the only
shareholders known to the Company to own more than five percent (5%) of the
Company's Common Stock:
<TABLE>
<CAPTION>
Number of Shares
of Common Stock Percent of
Name and Address of Beneficial Owner Beneficially Owned Outstanding Shares
<S> <C> <C>
Trans Union Corporation . . . . . . . 7,535,459<F1> 13.6%
555 West Adams Street
Chicago, IL 60661
Charles D. Morgan . . . . . . . . . . 6,212,933<F2> 12.0%
P.O. Box 2000
Conway, AR 72033-2000
William Blair & Company . . . . . . . 2,763,090<F3> 5.3%
222 West Adams Street
Chicago, IL 60606
<FN>
<F1> Includes 1,920,000 shares acquired by Trans Union Corporation ("Trans
Union") on August 31, 1992; approximately 3,613,459 shares subject to a
currently exercisable warrant ("Warrant") issued to Trans Union on August
31, 1992; 2,000,000 shares acquired by Marmon Industrial Corporation
("MIC"), the indirect owner of all of Trans Union's common stock, on
November 22, 1994; and 2,000 shares transferred to Trans Union by Harry
C. Gambill, Chief Executive Officer and President of Trans Union. Under
the terms of the Warrant, Trans Union has the right to purchase up to
4,000,000 shares of Common Stock, at exercise prices ranging from $2.8125
to $3.5625 per share; however, the total number of actual shares held by
Trans Union (excluding the 2,000,000 shares held by MIC and any shares
acquired by Trans Union on the open market) may not exceed 10% of the
Company's then issued and outstanding shares. Including the shares which
may presently be acquired by Trans Union under the Warrant, but excluding
the shares transferred to Trans Union from Mr. Gambill, Trans Union
beneficially owns approximately 5,533,459 shares, which would be 10% of
the Company's then issued and outstanding Common Stock following issuance
of the Warrant shares. MIC beneficially owns 3.9% of the Company's
currently issued and outstanding Common Stock. See "Certain Transactions"
below.
<F2> Includes 236,905 shares subject to currently exercisable options, of
which 184,859 are in the money.
<F3> Based on information contained in a Schedule 13G filed with the
Securities and Exchange Commission.
</FN>
</TABLE>
<PAGE>
EQUITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information, as of May 29, 1997,
regarding the beneficial ownership of the Company's Common Stock by its
directors, nominees for election as directors, named individuals in the Summary
Compensation Table, and directors and "executive officers" (as defined in the
Rules of the Securities and Exchange Commission), as a group.
<TABLE>
<CAPTION>
Number of Shares
of Common Stock Percent of
Name of Beneficial Owner Beneficially Owned Outstanding Shares
<S> <C> <C>
Dr. Ann H. Die . . . . . . . 9,480 *
C. Alex Dietz . . . . . . . 419,791<F1> *
William T. Dillard II . . . 18,000 *
Harry C. Gambill . . . . . . 0<F2> *
Rodger S. Kline . . . . . . 1,832,860<F3> 3.5%
Charles D. Morgan . . . . . 6,212,933<F4> 12.0%
Robert A. Pritzker . . . . . 2,000<F5> *
Walter V. Smiley . . . . . . 132,000 *
James T. Womble . . . . . . 1,508,650<F6> 2.9%
Paul L. Zaffaroni . . . . . 269,450<F7> *
All directors, nominees and
executive officers, as a
group (12 persons) . . . . 10,525,926<F8> 20.4%
- -----------------------
<FN>
* Denotes less than 1%.
<F1> Includes 4,347 shares held by Mr. Dietz's wife and 214,197 shares subject
to currently exercisable options (24,343 of which are held by Mrs. Dietz),
of which 181,600 are in the money.
<F2> See footnote (1) to the table under the heading "Principal Shareholders"
regarding shares of the Company's Common Stock beneficially owned by Trans
Union and MIC. Mr. Gambill, who is an officer and director of Trans Union,
disclaims beneficial ownership of such shares.
<F3> Includes 191,103 shares subject to currently exercisable options, of which
156,811 are in the money.
<F4> Includes 236,905 shares subject to currently exercisable options, of
which 184,859 are in the money.
<F5> See footnote (1) to the table under the heading "Principal Shareholders"
regarding shares of the Company's Common Stock beneficially owned by Trans
Union and MIC. Mr. Pritzker, who is an officer and director of both
corporations, disclaims beneficial ownership of such shares. The 2,000
shares were issued to Mr. Pritzker as an annual retainer for serving on
the Company's Board of Directors (See "Compensation of Directors" below).
Of these, 1,000 shares are owned by Mr. Pritzker's wife; however, Mr.
Pritzker is deemed to beneficially own such shares.
<F6> Includes 138,401 shares subject to currently exercisable options, of
which 108,859 are in the money.
<F7> Includes 257,735 shares subject to currently exercisable options, of which
229,996 are in the money.
<F8> Includes 1,151,256 shares subject to currently exercisable options, of
which 949,466 are in the money.
</FN>
</TABLE>
<PAGE>
ELECTION OF DIRECTORS
Two persons have been nominated for election as directors at the Annual
Meeting. Dr. Ann H. Die and Charles D. Morgan currently are members of the Board
of Directors with terms that expire at the 1997 Annual Meeting. Dr. Die and Mr.
Morgan are nominated to serve for terms expiring at the 2000 Annual Meeting. If
elected, Dr. Die and Mr. Morgan will serve with the other six Board members:
Rodger S. Kline, Robert A. Pritzker and James T. Womble, whose terms expire at
the 1998 Annual Meeting, and William T. Dillard II, Harry C. Gambill and Walter
V. Smiley, whose terms expire at the 1999 Annual Meeting.
Unless authority is withheld, the persons named on the Proxy will vote
the shares represented thereby for the nominees. While it is not anticipated
that any of the nominees will be unable to serve, the persons named on the Proxy
may, unless authority is withheld, vote for any substitute nominee proposed by
the Board of Directors. In the event of any director's death, disqualification
or inability to serve, the vacancy so arising will be filled by the Board of
Directors.
Nominees and Current Directors
Dr. Ann H. Die, 52, was elected as a director in 1993. She has served as
President of Hendrix College in Conway, Arkansas since 1992. For four years
prior, she served as Dean of the H. Sophie Newcomb Memorial College and
Associate Provost at Tulane University and served as Chair of the Newcomb
Foundation Board of Trustees. Prior to joining Tulane, she was Assistant to the
Executive Vice President for Academic and Student Affairs at Lamar University.
Dr. Die graduated summa cum laude from Lamar University, earned a master's
degree from the University of Houston and a Ph.D. in Counseling Psychology from
Texas A&M University.
William T. Dillard II, 52, was elected as a director in 1988. He has served
since 1968 as a member of the Board of Directors and since 1977 as President and
Chief Operating Officer of Dillard's, Inc. of Little Rock, Arkansas, a regional
chain of traditional department stores with 250 retail outlets in 24 states in
the Southeast, Southwest and Midwest areas of the United States. In addition to
Dillard's, Inc., Mr. Dillard is also a director of Barnes & Noble, Inc. and
Simon Debartolo Group, Inc. He holds a master's degree in business
administration from Harvard University and a bachelor's degree in the same field
from the University of Arkansas.
Harry C. Gambill, 51, was appointed to fill a vacancy on the Company's Board of
Directors in 1992 and was elected as a director in 1993. He is a director and
has held the positions of Chief Executive Officer and President of Trans
Union Corporation, a company engaged in the business of providing consumer
credit reporting services, since April 1992. Mr. Gambill joined Trans Union in
1985 as Vice President/General Manager of the Chicago Division. In 1987 he was
named Central Region Vice President. In 1990 he was named President of
TransAction, and assumed the added title of President of TransMark in 1991. Mr.
Gambill is also a director of Associated Credit Bureaus and the International
Credit Association. He holds degrees in business administration and economics
from Arkansas State University. See "Principal Shareholders" and "Certain
transactions."
Rodger S. Kline, 54, joined the Company in 1973. He has been a director since
1975, and serves as the Company's Treasurer and Chief Operating Officer
(Operations Leader). Prior to joining the Company, Mr. Kline was employed by
IBM Corporation. Mr. Kline holds an electrical engineering degree from the
University of Arkansas.
Charles D. Morgan, 54, joined the Company in 1972. He has been Chairman of the
Board of Directors since 1975, and serves as the Company's President (Company
Leader). He was employed by IBM Corporation prior to joining the Company. Mr.
Morgan is also a director of Fairfield Communities, Inc. Mr. Morgan holds a
mechanical engineering degree from the University of Arkansas.
Robert A. Pritzker, 70, was appointed to fill a newly created position on the
Company's Board of Directors in 1994 and was elected a director in 1996. Since
before 1992, Mr. Pritzker has been a director and the Chairman of the Board of
Trans Union Corporation, a company engaged in the business of providing consumer
credit reporting services, a director and the President of each of Union Tank
Car Company, a company principally engaged in the
<PAGE>
leasing of railway tank cars and other railcars, and Marmon Holdings, Inc., a
holding company of diversified manufacturing and services businesses. Mr.
Pritzker is also a director of Hyatt Corporation, a company which owns and
operates domestic and international hotels, and a director of Southern Peru
Copper Corporation, a company which mines, smelts, refines and markets copper.
Mr. Pritzker holds an industrial engineering degree from the Illinois Institute
of Technology. See "Principal Shareholders" and "Certain Transactions."
Walter V. Smiley, 59, was elected as a director in 1983. He served from 1968
until 1989 as Chairman of the Board of Directors and from 1968 until 1985 as
Chief Executive Officer of Systematics, Inc., the predecessor of ALLTEL
Information Services, Inc., an Arkansas-based company which provides data
processing services to financial institutions throughout the United States and
abroad. Mr. Smiley currently owns and is President of Smiley Investment
Corporation, a consulting and venture capital firm. Mr. Smiley is also a
director of Southern Development Banc Corp. He holds a master's degree in
business administration and a bachelor's degree in industrial management from
the University of Arkansas.
James T. Womble, 54, joined the Company in 1974. He has been a director since
1975, and serves as one of the Company's four Division Leaders. Prior to joining
the Company, Mr. Womble was employed by IBM Corporation. Mr. Womble holds a
degree in civil engineering from the University of Arkansas.
Directors' Meetings and Committees
The Board of Directors holds quarterly meetings to review significant
developments affecting the Company and to act on matters requiring Board
approval. The Board currently has three standing committees to assist it in the
discharge of its responsibilities: an Audit Committee, a Compensation Committee
and an Executive Committee. The Audit Committee, composed of outside directors
Dr. Ann H. Die, William T. Dillard II, Harry C. Gambill, Robert A. Pritzker and
Walter V. Smiley, reviews the reports of the Company's auditors and has the
authority to investigate the financial and business affairs of the Company.
Messrs. Dillard and Smiley also serve on the Compensation Committee, which
administers certain of the Company's employee benefit plans and approves the
compensation paid to the Company's leadership. The Executive Committee is
responsible for implementing the policy decisions of the Board. Current members
of the Executive Committee are Messrs. Kline, Morgan and Womble.
During the past fiscal year, the Board met five times, the Audit
Committee met one time and the Compensation Committee met one time. Action
pursuant to unanimous written consent in lieu of a meeting was taken one time by
the Board, one time by the Compensation Committee and eight times by the
Executive Committee. All of the incumbent directors attended at least
three-fourths of the aggregate number of meetings of the Board and of the
committees on which they served during the past fiscal year except for Mr.
Dillard, Mr. Pritzker and Mr. Smiley.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE
ELECTION AS DIRECTORS OF THE TWO INDIVIDUALS NAMED ABOVE AS NOMINEES AT THIS
YEAR'S ANNUAL MEETING.
<PAGE>
COMPENSATION OF DIRECTORS AND COMPANY LEADERS
Cash and Other Compensation
The following table sets forth, for the fiscal years indicated, the cash and
other compensation provided by the Company and its subsidiaries to the Company
Leader and each of the four most highly compensated members of the Company's
leadership team (the "named individuals") in all capacities in which they
served.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term Compensation
------------------------
Annual Compensation Awards Payouts
---------------------- ---------------- -------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Securi-
ties
Other Re- Under- All
Annual stricted lying Other
Name and Comp- Stock Options/ LTIP Compen-
Principal Salary Bonus ensation Award(s) SARs Payouts sation
Position Year ($) ($) ($)<F1> ($)<F2> (#)<F3> ($) ($)<F4>
- ----------------- ---- ------- ----- -------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Charles D. Morgan 1997 325,000 --- 63,476 --- 33,545 --- 8,239
Chairman of the 1996 304,167 --- 84,021 --- 101,163 --- 7,327
Board and 1995 279,167 --- 83,203 --- 13,868 --- 3,527
Company Leader
Rodger S. Kline 1997 213,000 --- 41,601 --- 21,985 --- 2,817
Operations 1996 196,833 --- 54,221 --- 66,301 --- 4,801
Leader 1995 181,642 --- 54,512 --- 9,246 --- 3,575
James T. Womble 1997 183,500 --- 35,340 --- 18,900 --- 5,329
Division Leader 1996 172,833 --- 47,808 --- 57,118 --- 4,698
1995 161,367 --- 34,437 --- 7,122 --- 3,510
Paul L. Zaffaroni 1997 172,300 --- 33,652 --- 17,784 --- 2,563
Division Leader 1996 161,633 --- 36,772 --- 53,632 --- 3,822
1995 148,458 --- 46,972 --- 7,512 --- 3,655
C. Alex Dietz 1997 168,300 --- 32,871 --- 17,371 --- 4,986
Division Leader 1996 158,467 --- 43,831 --- 52,387 --- 4,562
1995 147,958 --- 44,043 --- 7,224 --- 3,634
- --------------------------
<FN>
<F1> This amount represents the named individuals' at-risk base pay paid for
the fiscal year. See discussion of "At-Risk Base Pay" below under "Report
of Compensation Committee."
<F2> No restricted stock grants were made to the named individuals during the
last three fiscal years.
<F3> See footnote (1) to "Options/SAR Grants For Last Fiscal Year" below.
<F4> This amount represents the Company's contribution on behalf of each named
individual to the Company's 401(k) and SERP Plans.
</FN>
</TABLE>
<PAGE>
Stock Option Grants
The following table sets forth information concerning stock options
granted under the Company's U.S. Stock Option Plan to the named individuals.
<TABLE>
OPTION/SAR GRANTS FOR LAST FISCAL YEAR
<CAPTION>
Individual Grants
(a) (b) (c) (d) (e) (h)
Percent of
Total
Options/
Number of SARs
Securities Granted
underlying to Grant Date
Options/SARs Employees Exercise or Present
Granted in Fiscal Base Price Expiration Value
Name (#)<F1> Year ($/Sh) Date ($)<F2>
<S> <C> <C> <C> <C> <C>
Charles D. Morgan ... 33,545 6.67% 15.70 5/28/12 139,648
Rodger S. Kline ..... 21,985 4.37% 15.70 5/28/12 91,954
James T. Womble ..... 18,900 3.77% 15.70 5/28/12 78,847
Paul L. Zaffaroni ... 17,784 3.54% 15.70 5/28/12 74,035
C. Alex Dietz ....... 17,371 3.45% 15.70 5/28/12 72,315
<FN>
<F1> On May 29, 1997, the Compensation Committee of the Company's Board of
Directors approved the grant of options to the Company's leadership team,
including the named individuals, in lieu of a portion of the at-risk base
pay which was to have been paid to them in cash for the fiscal year ended
March 31, 1997 as a part of their annual compensation. The exercise price
was the fair market value of the Company's stock on the day of grant. These
options are fully vested and became immediately exercisable upon the grant
date.
<F2> The grant date present value was based on the Black-Scholes Option
Valuation Model, a widely recognized method of valuing options. The
following underlying assumptions were used to derive the present value of
these options: expected volatility of the Company's stock of 14.71%, based
upon the actual monthly volatility for the two years prior to the grant
date; a risk-free rate of return of 6.83%, base on the yield of the two
year U.S. treasury notes as of the grant date; and exercise of the option
two years after the grant date. The actual value, if any, the named
individuals may realize will depend on the excess of the stock price over
the exercise price on the date the option is exercised; consequently, there
is no assurance the value realized by the named individuals will be at or
near the value estimated by the Black-Scholes Option Valuation Model.
</FN>
</TABLE>
<PAGE>
Stock Option Exercises and Holdings
The following table sets forth information concerning stock options
exercised during the last fiscal year and stock options held as of the end of
the last fiscal year by the named individuals.
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FY-END OPTION/SAR VALUES
<CAPTION>
(a) (b) (c) (d) (e)
Number of
Securities Value of
Underlying Unexercised
Unexercised in-the-Money
Options/SARs Options/SARs
Shares at Fiscal Year-End at Fiscal Year-End
Acquired (#) ($)
Name on Value Exer- Unexer- Exer- Unexer-
Exercise Realized cisable cisable cisable cisable
(#) ($)
<S> <C> <C> <C> <C> <C> <C>
Charles D. Morgan 0 0 203,360 371,678 1,661,357 1,816,847
Rodger S. Kline 0 0 169,118 245,756 1,540,524 1,210,571
James T. Womble 0 0 119,461 217,447 980,821 1,095,444
Paul L. Zaffaroni 0 0 239,951 222,401 2,498,394 1,259,772
C. Alex Dietz 36,000 724,875 172,483 210,415 1,696,192 1,160,708
</TABLE>
Compensation of Directors
In January 1997, each outside director received 1,000 shares of
unregistered Common Stock as an annual retainer fee. In addition, each outside
director receives a $1,500 fee for each meeting he or she attends. Inside
directors do not receive any additional compensation for their service as
directors.
Compensation Committee Interlocks and Insider Participation
The members of the Compensation Committee are William T. Dillard II and
Walter V. Smiley. No compensation committee interlocks exist with respect to the
Board's Compensation Committee, nor do any present or past officers of the
Company serve on the Compensation Committee.
Report of Compensation Committee
Decisions on compensation of the Company's leadership are made by the
Compensation Committee of the Board of Directors. The members of the
Compensation Committee are non-employee and outside directors pursuant to
Securities and Exchange Commission rules and applicable Treasury regulations.
Set forth below is a report submitted by William T. Dillard II and Walter V.
Smiley, in their capacity as the Board's Compensation Committee, addressing the
compensation policies for the Company's leadership team, for the individuals
named in the tables above, and for Mr. Morgan.
Compensation Policies
Compensation for the Company's leadership is based upon beliefs and
guiding principles designed to align leadership compensation with business
strategy, Company values and management initiatives. The plan:
* Aligns the leaders' interests with the shareholders' and investors'
interests.
* Motivates the leaders to achieve the highest level of performance.
* Retains key leaders by linking executive compensation to Company
performance.
* Attracts the best candidates through competitive, growth-oriented
plans.
The resulting compensation strategy is targeted to provide an overall
level of compensation opportunity that is competitive within the markets in
which the Company competes, as well as within a broader group of companies of
comparable size and complexity. Actual compensation levels may eventually be
greater than or less
<PAGE>
than the average competitive market levels, based upon the achievement of the
Company, as well as upon individual performance. The Compensation Committee
uses its discretion to set the parameters of the leadership compensation plan
when, in its judgment, external, internal and/or individual circumstances
warrant it. Increased orientation of leadership compensation policies toward
long-term performance has been accompanied by increased utilization of objective
performance criteria. See "Components of Compensation" below.
The Compensation Committee also endorses the position that stock
ownership by management and stock-based performance compensation arrangements
are beneficial in aligning management's and shareholders' interests and the
enhancement of shareholder value. Thus, the Committee has also increasingly
utilized these elements in the Company's compensation program for its leadership
team.
Components of Compensation
Compensation paid to the Company's leaders in fiscal 1997, the separate
elements of which are discussed below, consisted of the following: not-at-risk
base pay, at-risk base pay, and long-term incentive ("LTI") compensation granted
under the Company's stock option plans. The Compensation Committee's increasing
emphasis on tying pay to long-term performance criteria is reflected in a recent
change to the Company's leadership compensation plan, effective for fiscal 1998,
whereby the compensation for the Company's senior leadership is as follows:
not-at-risk base pay (35%); at-risk base pay (25%); and LTI compensation (40%).
The new plan is more heavily weighted towards LTI compensation than the past
fiscal year's plan, which provided for the following breakdown of compensation:
not-at-risk base pay (40%); at-risk base pay (25%); and LTI compensation (35%).
Not-At-Risk Base Pay - Base pay levels are largely determined through
market comparisons. Actual salaries are based on individual performance
contributions within a salary range that has been established through job
evaluation and the use of market surveys for comparable companies and positions.
Base salaries for the Company's senior leadership were targeted in fiscal 1997
to represent 40% of total compensation, which includes the annual at-risk base
pay and LTI compensation. For other corporate and business unit leaders, base
salaries were targeted at 50-60% of total compensation.
At-Risk Base Pay - The at-risk base pay for senior leadership members
is funded after the Company achieves its earnings per share target. Attainment
of targeted at-risk base pay is largely determined by the EVA (Economic Value
Added) model created by the Company. In fiscal 1997, at-risk base pay was
targeted to represent 25% of total compensation for the senior leadership team
and 20-25% for other corporate and business unit leaders. For fiscal 1997, the
Company's earnings per share goal was $.47 per share, which was achieved.
Long-Term Incentive Compensation - The Committee's LTI compensation
plan is composed of awards of non-statutory stock options designed to align
long-term interests between the Company's leadership team and its shareholders
and to assist in the retention of key people. During fiscal 1997, the long-term
incentives were targeted to represent 35% of total compensation for senior
leadership and 20-25% for other corporate and business unit leaders. Previously,
in fiscal 1996, senior leadership members were awarded the equivalent of three
years worth of stock options to induce them to adopt the long-term view of
stockholders. One-fourth of the options awarded were priced at the then current
market value, one-fourth were priced at a 50% premium over the then current
market value, and the remaining one-half were priced at a 100% premium over the
then current market value. The full value of the options cannot be realized
until the price of the Company's stock more than doubles from the fair market
value on the date of grant. Senior leadership members will not be eligible for
new grants of LTI options until fiscal 1999. The fiscal 1996 stock options vest
incrementally over a nine-year period.
Under the recently adopted leadership compensation plan effective for
fiscal 1998, the LTI portion of the senior leadership's overall compensation
will be 40% instead of 35%. The terms of all LTI options will be 15 years
(instead of ten), and the exercise prices will be one-half at the fair market
value on the date of grant, one-fourth at a 50% premium over market, and
one-fourth at a 100% premium over market. Options will continue to vest
incrementally over nine years from the date of grant.
<PAGE>
Supplemental Executive Retirement Plan - All members of the Company's
leadership team are eligible to participate in the Supplemental Executive
Retirement Plan ("SERP"), which was adopted in fiscal 1996, by contributing up
to 15% of their pretax income into the plan. The Company matches at a rate of
$.50 on the dollar up to the first 6% of the leadership team members' combined
contributions under both the SERP and the Company's 401K Retirement Plan. The
Company match is paid in Common Stock.
Other Compensation Plans - The Company maintains certain broad-based
employee benefit plans in which leadership team members are permitted to
participate on the same terms as non-leadership team associates who meet
applicable eligibility criteria, subject to any legal limitations on the amounts
that may be contributed or the benefits that may be payable under the plans.
Mr. Morgan's Compensation
In fiscal 1997, the Company's revenue and earnings increased 49% and
51%, respectively, a record year in both revenue and earnings for the Company.
Additionally, the Company's return on stockholders' equity increased from 16.5%
in fiscal 1996 to 20.3% in fiscal 1997, and the Company's stock price increased
20% over the prior year, compared to an 11% increase in the Nasdaq Stock Market
- - U.S. Index and a 10% increase in the Nasdaq Stock Market Computer and Data
Processing Index over the same period. In the prior year, the Company's revenue
and earnings increased 33% and 47%, respectively, stockholders' equity increased
from 15.3% to 16.5%, and the stock price rose 43%, compared to a 36% increase in
the Nasdaq Stock Market - U.S. Index and a 42% increase in the Nasdaq Stock
Market - Computer and Data Processing Index over the same period. Because of the
Company's performance and Mr. Morgan's performance in fiscal 1996, Mr. Morgan's
fiscal 1997 base pay was increased by 8.33% over fiscal 1996. In light of the
Company's fiscal 1997 performance, Mr. Morgan's base pay for fiscal 1998 will be
increased 15.4% over fiscal 1997.
In fiscal 1997, the Company's earnings per share results and the
Company's EVA attained were the primary basis for determining the at-risk base
pay earned by Mr. Morgan. A portion of Mr. Morgan's at-risk payments were made
in cash. (See "Summary Compensation Table - Other Annual Compensation" above.)
On May 29, 1997, the Compensation Committee of the Company's Board of Directors
granted 33,545 non-statutory stock options to Mr. Morgan in lieu of the
remaining portion of his at-risk compensation. The options were granted at an
exercise price of $15.70, the current market value on the date of grant, and
were fully vested as of the date of grant. The actual value, if any, Mr. Morgan
may realize will depend on the excess of the stock price over the exercise price
on the date the options are exercised. Until the price of the Company's stock
reaches $17.23, Mr. Morgan will be unable to realize the full value of this
portion of his at-risk pay.
In the prior fiscal year ending March 31, 1996, Mr. Morgan received
non-statutory stock options under the Company's LTI plan described above which
consisted of a three-year grant of non-statutory stock options, with exercise
prices as follows: one-fourth at the then current market price, one-fourth at a
50% premium over market, and the remaining one-half at a 100% premium over
market. The purpose of the fiscal 1996 grant was to further encourage Mr.
Morgan's long-term performance while aligning his interests with those of the
Company's other shareholders with regard to the performance of the Company's
Common Stock. Mr. Morgan will not be eligible for another LTI grant until fiscal
1999.
Omnibus Budget Reconciliation Act of 1993
The Omnibus Budget Reconciliation Act of 1993 ("OBRA") generally
prevents public corporations from deducting as a business expense that portion
of the compensation paid to the named individuals in the Summary Compensation
Table that exceeds $1,000,000. However, this deduction limit does not apply to
"performance-based compensation" paid pursuant to plans approved by
shareholders. The Board has modified its compensation plans so as to comply with
OBRA and thereby retain the deductibility of executive compensation, and it is
the Company's intention to continue to monitor its compensation plans to comply
with OBRA in the future.
William T. Dillard II Walter V. Smiley
<PAGE>
Company Performance
The graph below compares for each of the last five fiscal years the
cumulative total return on the Company's Common Stock, the Nasdaq Stock Market -
U.S. Index, and the Nasdaq Stock Market - Computer and Data Processing Index.
The cumulative total return on the Company's Common Stock assumes $100 invested
on March 31, 1992 in the Company's Common Stock.
The following table is submitted in lieu of the required graph:
<TABLE>
<CAPTION>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG ACXIOM CORPORATION, THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE NASDAQ COMPUTER & DATA PROCESSING INDEX
YEAR 1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C>
Acxiom Corporation $100 $222 $263 $425 $606 $730
NASDAQ - US Index 100 115 124 138 187 208
NASDAQ - Computer & Data Processing 100 112 114 154 219 240
* $100 INVESTED ON 03/31/92 IN STOCK OR INDEX -
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING MARCH 31.
</TABLE>
<PAGE>
CERTAIN TRANSACTIONS
1. On January 5, 1996, the Company leased an aircraft from MorAir,
Inc., a corporation controlled by Charles D. Morgan, the Company's Chairman and
Company Leader, and Jane Dills Morgan, for $66,385 per month, plus maintenance
and insurance. The term of this aircraft lease expires January 4, 2001. The
terms of the lease have been found by the Board to be as good or better than
those which could have been obtained from an unrelated third party.
2. In accordance with that certain Data Center Management Agreement
dated July 27, 1992 (the "Agreement") between the Company and Trans Union
Corporation ("Trans Union") which became effective on August 31, 1992, the
Company (through its subsidiary, Acxiom CDC, Inc.) acquired all of Trans Union's
interest in its Chicago data center and agreed to provide Trans Union with
various data center management services. The term of the Agreement, as amended,
expires in 2005.
In connection with the Agreement, on August 31, 1992 the Company issued
to Trans Union 1,920,000 shares (the "Initial Shares") of Common Stock, subject
to certain "put" and "call" provisions. Pursuant to a subsequent amendment,
Trans Union relinquished its right to cause the Company to repurchase such
shares, and the Company relinquished its right to call the shares. On August 31,
1992 the Company issued a warrant ("Warrant") to Trans Union to purchase up to
4,000,000 additional shares prior to August 31, 2000, at exercise prices ranging
from $2.813 per share to $3.563 per share.
Trans Union presently owns the 1,920,000 Initial Shares and the 2,000
shares transferred to Trans Union by Mr. Gambill, or 3.7% of the currently
issued and outstanding shares of the Company's Common Stock. Upon acquisition of
the 4,000,000 shares which could currently be purchased under the Warrant, Trans
Union would beneficially own 5,922,000 shares, or 10.6% of the Company's then
issued and outstanding shares. However, the amount of stock which may be
purchased by Trans Union under the Warrant is limited so that Trans Union's
total holdings under the Warrant and the Agreement may not exceed 10% of the
Company's then issued and outstanding shares. Based upon the number of shares
currently issued and outstanding, Trans Union would be able to obtain
approximately 3,613,459 of the 4,000,000 Warrant shares. Trans Union retains the
right, however, to acquire additional shares of Common Stock on the open market.
In addition, pursuant to the Agreement, Trans Union has preemptive rights
whereby it may, under certain circumstances, purchase additional shares of
Common Stock in the event the Company issues additional shares. Such preemptive
rights provide Trans Union with the ability to maintain its percentage ownership
of Common Stock acquired pursuant to the Agreement.
In addition, effective October 26, 1994, the Company and Trans Union's
parent company, Marmon Industrial Corporation ("MIC"), entered into a Stock
Purchase Agreement wherein the Company agreed to sell, and MIC agreed to buy,
2,000,000 shares of newly issued Common Stock of the Company (the "Additional
Shares") for $5.98 per share. The purchase price of the Additional Shares was
established on August 31, 1994 pursuant to a letter agreement between the
Company and Trans Union and, for purposes of the Warrant, the Additional Shares
do not count towards the number of shares owned by Trans Union. Taking into
account the shares owned by Trans Union and the currently exercisable Warrant
shares beneficially owned by Trans Union, Trans Union and MIC would jointly
beneficially own approximately 7,535,459 shares, or 13.6% of the Company's then
issued and outstanding shares. (See "Principal Shareholders" above.)
Pursuant to a letter agreement dated July 27, 1992, which was executed
in connection with the Agreement, the Company agreed to use its best efforts to
cause one person designated by Trans Union to be elected to the Company's Board
of Directors. Trans Union designated its CEO and President, Harry C. Gambill,
who was appointed to fill a vacancy on the Board in November 1992 and was
elected at the 1993 Annual Meeting of Shareholders to serve a three-year term.
He was elected to serve a second three-year term at the 1996 Annual Meeting.
Pursuant to a second letter agreement dated August 31, 1994, which was executed
in connection with an amendment to the Agreement which continued the term
through 2002, the Company agreed to amend the letter agreement dated July 27,
1992 and use its best efforts to cause two persons designated by Trans Union to
be elected
<PAGE>
to the Company's Board of Directors. In addition to Mr. Gambill, Trans Union
designated Robert A. Pritzker, an executive officer of MIC, who was appointed to
fill a newly created position on the Company's Board of Directors on October 26,
1994. Mr. Pritzker was elected to serve a three-year term at the 1995 Annual
Meeting of Shareholders. These undertakings by the Company are in effect until
the latter of the tenth anniversary of August 31, 1992 or termination of the
Agreement, the term of which was extended to 2005 during the past fiscal year.
SECTION 16(a) REPORTING DELINQUENCIES
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's "executive officers" (as defined in the Rules of the Securities and
Exchange Commission), directors, and persons who own more than ten percent (10%)
of a registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
and the National Association of Securities Dealers, Inc. Such persons are
required by SEC regulations to furnish the Company with copies of all Section
16(a) forms they file.
Additionally, SEC regulations require that the Company identify any
individuals for whom one of the referenced reports was not filed on a timely
basis during the most recent fiscal year or prior fiscal years. To the Company's
knowledge, based solely on its review of the copies of such forms received by
it, or written representations from certain reporting persons that no other
forms were required for those persons during and with respect to the fiscal year
ended March 31, 1997, the Company believes that during the past fiscal year, all
filing requirements applicable to its officers, directors, and greater than ten
percent (10%) beneficial owners were met, except as follows: one report,
covering two transactions, was filed late by James E. Bryant, Jr.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected KPMG Peat Marwick LLP as the
Company's independent public accountants and auditors, a position that firm has
held since the Company's initial offering of securities to the public in 1983.
Representatives of KPMG Peat Marwick LLP are expected to be present at the
Annual Meeting with the opportunity to make a statement if they desire to do so
and to respond to appropriate questions.
SUBMISSION OF SHAREHOLDER PROPOSALS
Any shareholder proposal to be presented at the 1998 Annual Meeting
should be directed to the Secretary of the Company, P.O. Box 2000, 301
Industrial Boulevard, Conway, Arkansas 72033-2000, and must be received by the
Company on or before February 13, 1998. Any such proposal must comply with the
requirements of Rule 14a-8 under the Securities Exchange Act of 1934.
ADDITIONAL INFORMATION AVAILABLE
Upon written request, the Company will furnish, without charge, a copy
of the Company's most recent Annual Report on Form 10-K, as filed with the
United States Securities and Exchange Commission, including the financial
statements and schedules thereto. The written request should be sent to
Catherine L. Hughes, Secretary of the Company, P.O. Box 2000, 301 Industrial
Boulevard, Conway, Arkansas 72033-2000.
<PAGE>
OTHER MATTERS
The Board of Directors does not intend to present and does not have any
reason to believe that others will present any items of business at the Annual
Meeting other than as stated in the Notice of Annual Meeting of Shareholders.
If, however, other matters are properly brought before the meeting, it is the
intention of the persons named in the accompanying Proxy to vote the shares
represented thereby in accordance with their best judgment, and discretionary
authority to do so is included in the Proxy.
By Order of the Board of Directors
Catherine L. Hughes
Secretary
Conway, Arkansas
June 16, 1997
<PAGE>
PROXY CARD
(Side 1)
P
R ACXIOM CORPORATION
O This Proxy Is Solicited on Behalf of The Board of Directors
X for the Annual Meeting of Shareholders
Y to be Held on July 30, 1997
The undersigned hereby appoints Catherine L. Hughes and Shayne D. Smith as
Proxies, or either of them, with the power to appoint their substitutes, and
hereby authorizes them to represent and vote, as designated below, all of the
shares of Common Stock of Acxiom Corporation held of record by the undersigned
on June 9, 1997, at the Annual Meeting of Shareholders to be held at 301
Industrial Boulevard, Conway, Arkansas 72033-2000 on July 30, 1997, or any
adjournment or adjournments thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THE PROXY WILL BE VOTED
FOR ALL PROPOSALS.
Please mark, sign, date and return the proxy card promptly using the enclosed
envelope.
SEE REVERSE
SIDE
(Side 2)
[X] Please mark your
votes as in this
example.
The Board of Directors recommends a vote FOR the proposal.
FOR all nominees WITHHOLD
listed at right AUTHORITY
1. Election of [ ] [ ] Nominees:
Directors Dr. Ann H. Die
Charles D. Morgan
(For, except vote withheld for the following nominee(s):)
- ---------------------------------------------
SIGNATURE(S)----------------------------------- DATED:------------------, 1997
NOTE: Please sign exactly as name appears hereon. When shares are held by
joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
