UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K/A
(AMENDMENT NO. 1)
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 1998
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)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.10 Par Value
(Title of Class)
Preferred Stock Purchase Rights
(Title of Class)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No___
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [X]
The aggregate market value of the voting stock held by non-affiliates of
the registrant, based upon the closing sale price of the registrant's
Common Stock, $.10 par value per share, as of June 17, 1998 as reported on
the Nasdaq National Market, was approximately $875,422,220. (For purposes
of determination of the above stated amount only, all directors, officers
and 10% or more shareholders of the registrant are presumed to be
affiliates.)
The number of shares of Common Stock, $.10 par value per share, outstanding
as of June 17, 1998 was 52,479,289.
This Amendment No. 1 amends and supplements the Annual Report for the
fiscal year ended March 31, 1998 on Form 10-K, filed with the Securities
and Exchange Commission (the "Commission") on June 23, 1998 (the "Form
10-K"), of Acxiom Corporation, a Delaware corporation (the "Company").
Capitalized terms used herein shall have the definitions set forth in the
Form 10-K unless otherwise provided herein.
Part III of the Form 10-K is hereby amended and supplemented by
deleting it in its entirety and replacing it with the following:
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
CURRENT DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
The following table provides information as of March 31, 1998
with respect to each of the Company's directors, director nominees, and
executive officers.
DIRECTORS AND DIRECTOR NOMINEES
Served as
Officer or
Director of
the Company
Name Age Position since
NOMINEES FOR TERMS EXPIRING AT THE 2001 ANNUAL MEETING OF SHAREHOLDERS
Rodger S. Kline...... 55 Director, Operations Leader 1975
Robert A. Pritzker... 71 Director 1994
James T. Womble...... 55 Director, Division Leader 1975
TERMS EXPIRING AT THE 2000 ANNUAL MEETING OF SHAREHOLDERS
Dr. Ann H. Die....... 53 Director 1993
Charles D. Morgan.... 55 Chairman of the Board and Company 1975
Leader
TERMS EXPIRING AT THE 1999 ANNUAL MEETING OF SHAREHOLDERS
William T. Dillard II 53 Director 1988
Harry C. Gambill..... 52 Director 1993
Walter V. Smiley .... 60 Director 1983
OTHER EXECUTIVE OFFICERS
C. Alex Dietz........ 55 Division Leader 1979
Paul L. Zaffaroni.... 51 Division Leader 1990
Jerry C. D. Ellis.... 48 Division Leader 1991
Robert S. Bloom...... 42 Financial Leader 1992
Rodger S. Kline, 55, 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.
Robert A. Pritzker, 71, was appointed to fill a newly created
position on the Board of Directors in 1994 and was elected as a director in
1996. Since before 1992, Mr. Pritzker has been a director and the Chairman
of Trans Union Corporation, a company engaged in the business of providing
consumer credit reporting services ("TransUnion"), a director and the
President of each of Union Tank Car Company, a company principally engaged
in the 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 "Security Ownership of
Certain Beneficial Owners and Management" and "Certain Transactions."
James T. Womble, 55, 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.
Dr. Ann H. Die, 53, was elected as a director in 1993. She has
served as President of Hendrix College in Conway, Arkansas since 1992. She
is a member of the Board of Directors of the National Merit Scholarship
Corporation, the Pritzker Foundation for Independent Higher Education, and
the American Council on Education. She is Past Chair of the Board of
Directors of the National Association of Independent Colleges and
Universities. Prior to coming to Hendrix, she served as Dean of the H.
Sophie Newcomb Memorial College and Associate Provost at Tulane 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.
Charles D. Morgan, 55, joined the Company in 1972. He has been
Chairman of the Board of Directors since 1975, and serves as 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.
William T. Dillard II, 53, 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 270
retail outlets in 27 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, 52, was appointed to fill a vacancy on the
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 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 "Security
Ownership of "Certain Owners and Management" and Certain Transactions."
Walter V. Smiley, 60, 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. and Computer Language Research. He holds a master's degree in
business administration and a bachelor's degree in industrial management
from the University of Arkansas. Mr. Smiley resigned as a Director of the
Company effective as of June 1, 1998; Mr. Smiley has not yet been replaced.
C. Alex Dietz, 55, joined the Company in 1970 and served as a
vice president until 1975. Between 1975 and 1979 he was an officer of a
commercial bank responsible for data processing matters. Following his
return to the Company in 1979, Mr. Dietz served as senior level officer of
the Company and is presently one of the Company's four division leaders.
Mr. Dietz holds a degree in electrical engineering from Tulane University.
Paul L. Zaffaroni, 51, joined the Company in 1990. He serves as
one of the Company's four division leaders. Prior to joining the Company,
he was employed by IBM Corporation for 21 years, most recently serving as
regional sales manager. Mr. Zaffaroni holds a degree in marketing from
Youngstown State University.
Jerry C. D. Ellis, 48, joined the Company in 1991 as managing
director of the Company's U.K. operations. He serves as one of the
Company's four division leaders. Prior to 1991, Mr. Ellis was employed for
22 years with IBM Corporation, serving most recently as assistant to the
CEO of IBM's U.K. operations. Prior to that, Mr. Ellis served as branch
manager of the IBM U.K. Public Sector division.
Robert S. Bloom, 42, joined the Company in 1992 as chief
financial officer. Prior to joining the Company, he was employed for six
years with Wilson Sporting Goods Co. as chief financial officer of its
international division. Prior to his employment with Wilson, Mr. Bloom was
employed by Arthur Andersen & Co. for nine years, serving most recently as
manager. Mr. Bloom, a Certified Public Accountant, holds a degree in
accounting from the University of Illinois.
BOARD OF DIRECTORS' MEETINGS AND COMMITTEES
The Board of Directors holds quarterly meetings to review
significant developments affecting the Company and to act on matters
requiring approval of the Board of Directors. The Board of Directors
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 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 senior leaders. 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 of Directors met four
times, the Audit Committee met one time and the Compensation Committee met
two times. Action pursuant to unanimous written consent in lieu of a
meeting was taken one time by the Board of Directors, two times by the
Compensation Committee and eleven 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. Gambill.
Walter V. Smiley, who served on the Audit Committee and the
Compensation Committee for the fiscal year ended March 31, 1998 resigned as
a director of the Company effective as of June 1, 1998, Mr. Smiley has not
yet been replaced.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires the Company's executive officers, 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 Commission and the National Association of Securities Dealers,
Inc. Such persons are required by Commission rules and regulations to
furnish the Company with copies of all Section 16(a) forms they file.
Additionally, Commission rules and 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, 1998,
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.
ITEM 11. EXECUTIVE COMPENSATION
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.
SUMMARY COMPENSATION TABLE
LONG TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
Name and Other Annual All Other
Principal Salary Compensation Options/ Compensation
Position Year ($) ($)(1) SARs(#) ($)(2)
Charles D. Morgan, 1998 375,000 267,857 0 14,813
Chairman of the 1997 325,000 63,476 33,545 8,239
Board and Company 1996 304,167 84,021 101,163 7,327
Leader
Rodger S. Kline 1998 250,000 178,571 0 9,869
Operations Leader 1997 213,000 41,601 21,985 2,817
1996 196,833 54,221 66,301 4,801
James T. Womble 1998 202,000 126,250 0 7,829
Division Leader 1997 183,500 35,340 18,900 5,329
1996 172,833 47,808 57,118 4,698
Paul L. Zaffaroni 1998 193,000 120,625 0 7,564
Division Leader 1997 172,300 33,652 17,784 2,563
1996 161,633 36,772 53,632 3,822
C. Alex Dietz 1998 191,000 119,375 0 7,328
Division Leader 1997 168,300 32,871 17,371 4,986
1996 158,467 43,831 52,387 4,562
- --------------------------
(1) This amount represents the named individuals' at-risk pay for
each fiscal year. See discussion of At-Risk Base Pay below under
"Report of Compensation Committee."
(2) This amount represents the Company's contribution on behalf of
each named executive officer to the Company's 401(k) and SERP Plans.
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>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FY-END OPTION/SAR VALUES
NUMBER OF SECURITIES
UNDERLYING VALUE OF
UNEXERCISED UNEXERCISED IN-THE-
OPTIONS/SARS AT MONEY OPTIONS/SARS
FY-END AT FY-END
-------------------- --------------------
Shares
Acquired
on Value
Name Exercise Realized EXERCISABLE UNEXERCISABE EXERCISABLE UNEXERCISABLE
(#) ($) (#) ($)
- ------------------ --------- ------- ----------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Charles D. Morgan 0 0 297,654 310,929 4,994,892 3,803,473
RODGER S. KLINE 0 0 231,349 205,510 4,137,276 2,528,097
James T. Womble 0 0 174,215 181,633 2,946,118 2,271,617
Paul L. Zaffaroni 5,000 76,250 295,597 179,539 5,882,284 2,353,187
C. Alex Dietz 0 0 227,643 172,626 4,326,648 2,242,842
</TABLE>
Compensation of Directors. In January 1998, each outside
director received 1,000 shares of unregistered common stock, $.10 par
value, of the Company ("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 of Directors' Compensation Committee, nor do any present or past
officers of the Company serve on the Compensation Committee. Walter V.
Smiley, who served on the Compensation Committee for the fiscal year ended
March 31, 1998 resigned as a director of the Company effective as of June
1, 1998, Mr. Smiley has not yet been replaced.
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 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
of Directors' 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, the Company's values and
management initiatives. The plan is designed to:
o Align the leaders' interests with the shareholders' and investors'
interests.
o Motivate the leaders to achieve the highest level of performance.
o Retain key leaders by linking executive compensation to the Company's
performance.
o Attract 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 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 "Executive Compensation--Report of Compensation
Committee--Components of Compensation."
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 Compensation
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 1998, 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. The plan
contains five possible compensation levels with overlapping ranges for base
salaries, which provides flexibility in establishing appropriate
compensation packages for the Company's leadership. The plan provides for
increasingly large percentages of total compensation being weighted towards
at-risk pay and, to an even greater degree, toward LTI compensation. The
higher the compensation level, the greater the overall percentage of
at-risk and LTI. Under the plan, the compensation for the Company's senior
leaders, who participate in the top two levels of the plan, is as follows:
not-at-risk base pay (35-40%); at-risk base pay (25%); and LTI compensation
(35-40%). Under the previous plan, the maximum percentage of total compensation
assignable to LTI was 35%.
(i) 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 1998 to represent 35-40% of
total compensation, which includes the annual at-risk base pay and
LTI compensation. For other corporate, group and business unit level
leaders, base salaries were targeted at 40-70% of total compensation.
(ii) At-Risk Base Pay. The at-risk base pay for all of the
Company's leaders is funded after the Company achieves its earnings
per share target. Attainment of targeted at-risk base pay is largely
determined by using the EVA(R) (Economic Value Added) model. (EVA is
a registered trademark of Stern Stewart & Co.) In fiscal 1998,
at-risk base pay was targeted to represent 25% of total compensation
for the senior leadership team and 15-25% for other corporate, group
and business unit leaders. For fiscal 1998, the Company's diluted
earnings per share goal was $.59 per share, which was exceeded by
$.01.
(iii) Long-Term Incentive Compensation. The Committee's LTI
compensation plan is composed of awards of 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 1998, the long-term incentives were targeted to represent
35-40% of total compensation for senior leadership and 15-35% for
other corporate, group and business unit leaders. Previously, in
1996, senior leadership members were awarded the equivalent of three
years' worth of non-statutory stock options to induce them to adopt
the long-term view of shareholders. 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 Common 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 1999. The
1996 stock options vest incrementally over a nine-year period.
The terms of all non-statutory LTI options granted on or after
January 29, 1997 are 15 years (instead of ten, which was the standard
term for both incentive and non-statutory options prior to January
29, 1997), and the exercise prices for all options granted on or
after January 29, 1997 are: 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.
(iv) 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's match is paid in Common Stock. On May 20, 1998, the Board
of Directors approved an amendment to the SERP which will allow
participants to contribute up to 100% of their pretax income into the
plan.
(v) 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 1998, the Company's
revenue and earnings increased 16% and 29% respectively, a record year in
both revenue and earnings for the Company. Additionally, the return on
shareholders' equity for fiscal 1998 was 20.4%, in line with the Company's
goal of achieving a 20% return. The Company's stock price increased 78%
over the prior year, compared to a 52% increase in the NASDAQ National
Market - U.S. Index and a 75% 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 49% and 51% respectively,
return on shareholders' equity increased from 16.5% to 20.3%, and the stock
price rose 20%, compared to an 11% increase in the NASDAQ National Market -
U.S. Index and a 10% increase in the NASDAQ National Market - Computer and
Data Processing Index over the same period.
Because of the Company's performance and Mr. Morgan's
performance in fiscal 1997, Mr. Morgan's fiscal 1998 base pay was increased
by 15% over fiscal 1997. His base pay for fiscal 1999 was increased 29%
over fiscal 1998. This increase was due in part to the success of the
Company in fiscal 1998, and in part as the first of four proposed annual
increases designed to make the salaries of Mr. Morgan (and other Company
leaders) competitive with comparable market compensation (i.e., within the
75th percentile of competitive companies) by the end of the four-year
adjustment period.
In fiscal 1998, the Company's earnings per share results and
the Company's EVA attained were the primary criteria for determining the
at-risk base pay earned by Mr. Morgan. All of Mr. Morgan's at-risk payments
were made in cash. See "Executive Compensation--Cash and Other
Compensation" for discussion of Other Annual Compensation for Mr. Morgan.
In 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 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 Common Stock. Mr. Morgan
will not be eligible for another LTI grant until 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 above 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 of Directors 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.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information as to the
shares of Common Stock beneficially owned as of May 11, 1998, by (a) each
person who, as far as the Company has been able to ascertain, beneficially
owned more than five percent of the Common Stock, (b) each director, (c)
each of the five most highly compensated executive officers of the Company,
and (d) all directors and executive officers of the Company as a group.
NUMBER OF
SHARES OF PERCENT OF
COMMON STOCK COMMON STOCK
NAME OF BENEFICIAL OWNER OR IDENTITY OWNED OUTSTANDING
OF GROUP BENEFICIALLY
- ------------------------------------------ ---------------- ---------------
William Blair & Company................... 5,310,950(1) 10.1%
222 West Adams Street
Chicago, IL 60606
Charles D. Morgan......................... 4,112,419(2) 7.8%
P.O. Box 2000
Conway, AR 72033-2000
Trans Union Corporation................... 4,002,000(3) 7.6%
555 West Adams Street
Chicago, IL 60661
The Pritzker Foundation................... 3,921,000(4) 7.5%
200 W. Madison Street
Suite 3800
Chicago, IL 60606
Brown Capital Management, Inc............. 3,800,000(5) 7.2%
809 Cathedral Street
Baltimore, MD 21201
T. Rowe Price Associates, Inc............. 3,644,220(1) 6.9%
P.O. Box 89000
Baltimore, MD 21289
Dr. Ann H. Die............................ 10,655 *
C. Alex Dietz............................. 434,488(6) *
William T. Dillard II..................... 19,000 *
Harry C. Gambill.......................... 0(7) *
Rodger S. Kline........................... 1,870,598(8) 3.6%
Robert A Pritzker......................... 3,000(9) *
Walter V. Smiley.......................... 124,000 *
James T. Womble........................... 1,544,877(10) 2.9%
Paul Zaffaroni............................ 308,466(11) *
All directors, nominees and executive
officers, 8,583,086(12) 16.4%
as a group (12 persons)................
* Denotes less than 1%.
(1) Based on information contained in a Form 13G filed with the
Commission on February 17, 1994.
(2) Includes 297,654 shares subject to currently exercisable options, of
which 270,246 are in the money.
(3) Includes 4,000,000 shares of Common Stock subject to warrant (the
"Warrant") held by Trans Union and 2,000 shares of Common Stock
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 of
Common Stock acquired by Trans Union (excluding the shares of Common
Stock acquired from Mr. Gambill and shares of Common Stock acquired
by Trans Union on the open market) may not exceed 10% of the
Company's then issued and outstanding Common Stock. Including the
shares of Common Stock which may presently be acquired by Trans
Union under the Warrant, but excluding the shares of Common Stock
transferred to Trans Union from Mr. Gambill, Trans Union
beneficially owns approximately 4,000,000 shares of Common Stock,
which would be 7.6% of the Company's then issued and outstanding
Common Stock following issuance of the Warrant shares. See "Certain
Transactions."
(4) Includes 1,921,000 shares of Common Stock acquired by the Pritzker
Foundation, an Illinois not for profit corporation, from Trans
Union, and 2,000,000 shares of Common Stock acquired by the Pritzker
Foundation from Marmon Industrial Corporation, the owner of all of
Trans Union's common stock. Each of the acquisitions was made by the
Pritzker Foundation on May 30, 1997.
(5) Based on information provided by a representative of Brown Capital
Management, Inc.
(6) Includes 1,990 shares of Common Stock held by Mr. Dietz's wife and
257,123 shares of Common Stock subject to currently exercisable
options (29,480 of which are held by Mrs. Dietz), of which 241,847
are in the money.
(7) See footnote (3) above regarding shares of the Common Stock
beneficially owned by Trans Union. Mr. Gambill, who is an officer
and director of Trans Union, disclaims beneficial ownership of such
shares of Common Stock.
(8) Includes 231,349 shares subject to currently exercisable options, of
which 213,386 are in the money.
(9) See footnote (3) above regarding shares of Common Stock beneficially
owned by Trans Union. Mr. Pritzker, who is an officer and director
of Trans Union, disclaims beneficial ownership of such shares of
Common Stock. The 3,000 shares of Common Stock were issued to Mr.
Pritzker as an annual retainer for serving on the Board of
Directors. See "Executive Compensation--Compensation of Directors."
Of these, 1,000 shares of Common Stock are owned by Mr. Pritzker's
wife; however, Mr. Pritzker is deemed to beneficially own such shares
of Common Stock.
(10) Includes 174,215 shares of Common Stock subject to currently
exercisable options, of which 158,740 are in the money.
(11) Includes 295,597 shares of Common Stock subject to currently
exercisable options, of which 281,067 are in the money.
(12) Includes 1,393,409 shares of Common Stock subject to currently
exercisable options, of which 1,291,795 are in the money.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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, 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 of Directors to be as good or better
than those which could have been obtained from an unrelated third party.
In March 1998, the Company began using the temporary staffing
services of the national staffing firm, Norrell Staffing Services, Inc.
("Norrell"), for its strategic staffing and contingency workforce needs.
Susie P. Morgan, wife of Charles D. Morgan, Chairman of the Board and
Company Leader of the Company, owns the Little Rock, Arkansas franchise
(the "Franchise") of Norrell. It is anticipated that the total annual fees
to be received by the Franchise from Norrell, based on payments to be made
by the Company to Norrell, will be approximately $150,000. The majority of
such fees will be used to offset the expenses of the Franchise.
In accordance with the Data Center Management Agreement dated
July 27, 1992 (the "DCM Agreement") between the Company and 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 DCM Agreement, as amended,
expires in 2005.
In connection with the DCM Agreement, on August 31, 1992, the
Company issued 1,920,000 shares of Common Stock to Trans Union (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 the Initial Shares of Common
Stock, and the Company relinquished its right to call the shares of Common
Stock. On August 31, 1992, the Company also issued a warrant (the "Warrant")
to Trans Union to purchase up to 4,000,000 additional shares of Common
Stock prior to August 31, 2000, at exercise prices ranging from $2.9125 per
share to $3.5625 per share. In addition, effective October 26, 1994, the
Company and Trans Union's parent company, Marmon Industrial Corporation
("MIC"), entered into a stock purchase agreement pursuant to which the
Company agreed to sell, and MIC agreed to buy, 2,000,000 shares of Common
Stock from the Company (the "Additional Shares of Common Stock") for $5.98
per share. The purchase price of the Additional Shares of Common Stock was
established on August 31, 1994 pursuant to a letter agreement between the
Company and Trans Union. On May 30, 1997, Trans Union transferred the
Initial Shares of Common Stock (together with an additional 1,000 shares of
Common Stock it had previously acquired from Mr. Gambill) to the Pritzker
Foundation, an Illinois not for profit corporation. Also on that date, MIC
transferred the Additional Shares of Common Stock to the Pritzker
Foundation. As a result of such transfers, the Pritzker Foundation owns an
aggregate of 3,921,000 shares of Common Stock, or approximately 7.5% of the
Company's issued and outstanding shares of Common Stock.
Upon acquisition of the 4,000,000 shares of Common Stock which
could currently be purchased under the Warrant, Trans Union would
beneficially own approximately 7.6% of the Company's issued and outstanding
shares of Common Stock. The amount of stock which may be purchased by Trans
Union under the Warrant is limited so that the total shares of Common Stock
acquired under the Warrant and the DCM Agreement may not exceed 10% of the
Company's then issued and outstanding Common Stock. Based upon the number
of shares of Common Stock currently issued and outstanding, Trans Union
would be able to purchase approximately 3,700,000 shares of Common Stock
under the Warrant. Trans Union retains the right, however, to acquire
additional shares of Common Stock on the open market, which do not count
towards the 10% limit under the Warrant. In addition, pursuant to the DCM
Agreement, Trans Union has preemptive rights whereby it may, under certain
circumstances, purchase shares of Common Stock in the event the Company
issues additional shares of Common Stock. Such preemptive rights provide
Trans Union with the ability to maintain its percentage ownership of Common
Stock acquired pursuant to the DCM Agreement. Trans Union does not have any
preemptive rights with respect to the issuance by the Company of shares of
Common Stock pursuant to the May & Speh merger.
Pursuant to a letter agreement dated July 27, 1992, which was
executed in connection with the DCM Agreement, the Company agreed to use
its best efforts to cause one person designated by Trans Union to be
elected to the 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 DCM 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 to the 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 Board of Directors on
October 26, 1994. Mr. Pritzker was elected to serve a three-year term at
the 1995 Annual Meeting of Shareholders and has been nominated for
re-election to the Board of Directors at the 1998 Annual Meeting of
Shareholders. These undertakings by the Company are in effect until the
later of the tenth anniversary of August 31, 1992 or the termination of the
DCM Agreement, the term of which has been extended to 2005.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
ACXIOM CORPORATION
Date: July 29, 1998 By: /s/ Catherine L. Hughes
--------------------------
Catherine L. Hughes
Secretary
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf
of the registrant and in the capacities and as of the dates indicated.
Signature Title Date
/s/ Robert S. Bloom* Chief Financial Officer July 29, 1998
Robert S. Bloom (Principal accounting officer)
/s/ Dr. Ann H. Die* Director
Dr. Ann H. Die July 29, 1998
/s/ William T. Dillard II* Director
William T. Dillard II July 29, 1998
/s/ Harry C. Gambill* Director
Harry C. Gambill July 29, 1998
/s/ Rodger S. Kline* Chief Operating Officer, July 29, 1998
Rodger S. Kline Treasurer and Director
(Principal financial officer)
/s/ Charles D. Morgan* Chairman of the Board an July 29, 1998
Charles D. Morgan President (Company Leader)
(Principal executive officer)
/s/ Robert A. Pritzker* Director
Robert A. Pritzker July 29, 1998
/s/ Walter V. Smiley* Director
Walter V. Smiley July 29, 1998
/s/ James T. Womble* Division Leader and Director July 29, 1998
James T. Womble
*By: /s/ Catherine L. Hughes
Catherine L. Hughes
Attorney-in-Fact
