ACXIOM CORPORATION
1 Information Way
Little Rock, Arkansas 72202
501.342.1000
www.acxiom.com
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held August 9, 2000
[ACXIOM LOGO]
Please join us for the 2000 Annual Meeting of Stockholders of Acxiom
Corporation. The meeting will be held on Wednesday, August 9, 2000, at 10:00
a.m., local time at the DoubleTree Hotel, 424 West Markham Street, Little Rock,
Arkansas.
We are holding this meeting to:
1. elect two directors to serve until the 2003 annual meeting of
stockholders;
2. consider and act upon a proposal to adopt a new stock option plan;
and
3. transact any other business that properly comes before the meeting.
To vote at the meeting, you must be a stockholder of record at the
close of business on June 13, 2000.
By Order of the Board of Directors
Catherine L. Hughes
Secretary
Little Rock, Arkansas
June 22, 2000
YOUR VOTE IS IMPORTANT!
PLEASE SIGN AND RETURN THE ACCOMPANYING PROXY OR VOTE BY TELEPHONE
OR THROUGH THE WEB SITE LISTED IN THE VOTING INSTRUCTIONS.
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PROXY STATEMENT
This Proxy Statement is being mailed beginning June 22, 2000, in
connection with the solicitation of proxies by the Board of Directors of Acxiom
Corporation, a Delaware corporation, for use at the 2000 Annual Meeting of
Stockholders. The Meeting will be held at the DoubleTree Hotel, 424 West Markham
Street, Little Rock, Arkansas on Wednesday, August 9, 2000, at 10:00 a.m., local
time.
TABLE OF CONTENTS
PAGE
Questions and Answers . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Proposals You May Vote On . . . . . . . . . . . . . . . . . . . . . . . . 4
Information About The Board of Directors . . . . . . . . . . . . . . . . . 5
Nominees For Director . . . . . . . . . . . . . . . . . . . . . . . . 5
Other Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Board Meetings and Committees . . . . . . . . . . . . . . . . . . . . 7
Information About The 2000 Associate Stock Option Plan . . . . . . . . . . 8
Stock Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Ownership of Major Stockholders . . . . . . . . . . . . . . . . . . . 12
Holdings of Officers and Directors . . . . . . . . . . . . . . . . . 13
Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . 14
Summary Compensation Table . . . . . . . . . . . . . . . . . . . . . 14
Option Grants For Last Fiscal Year . . . . . . . . . . . . . . . . . 15
Option Exercises and Fiscal Year End Option Values . . . . . . . . . . 16
Compensation of Directors . . . . . . . . . . . . . . . . . . . . . . 16
Compensation Committee Interlocks and Insider Participation . . . . . 16
Report of Compensation Committee . . . . . . . . . . . . . . . . . . . 16
Stock Performance Graph . . . . . . . . . . . . . . . . . . . . . . . . . 19
Certain Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 16(a) Reporting Delinquencies . . . . . . . . . . . . . . . . . . 21
Independent Public Accountants . . . . . . . . . . . . . . . . . . . . . . 21
Submission of Stockholder Proposals . . . . . . . . . . . . . . . . . . . 21
Expenses of Solicitation . . . . . . . . . . . . . . . . . . . . . . . . . 21
Additional Information Available . . . . . . . . . . . . . . . . . . . . . 22
Other Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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QUESTIONS AND ANSWERS
Q: Who can vote?
A: If you owned any shares of Acxiom at the close of business on June 13,
2000, you are entitled to vote.
Q: How many shares can vote?
A: Every stockholder is entitled to one vote for each share held. As of June
13, 2000, our record date, 88,127,425 shares of common stock were issued
and outstanding and are eligible to vote. A list of our stockholders will
be available for examination at our principal offices, 1 Information Way,
Little Rock, Arkansas 72202, for at least 10 days prior to the 2000 Annual
Meeting.
Q: What may I vote on?
A: The election of Dr. Ann H. Die and Charles D. Morgan to the Board of
Directors and to approve a new stock option plan.
Q: How does the Board recommend I vote on the proposals?
A: The Board recommends a vote FOR each of the proposals.
Q: How do I vote?
A: You can vote by proxy, which gives the proxy holder the right to vote your
shares on your behalf. There are three ways for you to send in your proxy:
o Sign and mail the proxy voting card in the enclosed return envelope;
o Call the 800 number listed in your proxy voting instructions to vote
by telephone; or
o Log on to the Internet at the web site listed in your proxy voting
instructions and follow the instructions at that site.
You may also vote in person at the Annual Meeting, even if you have already
sent in your proxy.
Q: Who will count the votes?
A: A representative of EquiServe, our transfer agent, will count the votes and
act as the inspector of election.
Q: What does it mean if I get more than one proxy card?
A: If your shares are registered differently and in more than one account, you
will receive more than one proxy card. Follow the voting instructions on
each proxy card to ensure that all of your shares are voted.
Q: What vote is required to pass an item of business?
A: A majority of the holders of our outstanding common stock must be present
in person or represented by proxy to hold the meeting. A majority of the
votes cast at the meeting is required to elect any director and to approve
the adoption of the new stock option plan.
Unless you indicate otherwise on your proxy card, the persons named as your
proxies will vote your share(s) for all of the nominees for director and
for the adoption of the new stock option plan.
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Q: Can I revoke my proxy?
A: Yes. There are three ways for you to revoke your proxy before your proxy
holder votes your shares:
o File a written revocation with Acxiom's Secretary before the meeting;
o Sign and deliver before the meeting a proxy bearing a later date; or
o Vote in person at the meeting.
PROPOSALS YOU MAY VOTE ON
1. Election of Directors
There are two nominees for election this year. Dr. Ann H. Die and Charles
D. Morgan currently are members of the Acxiom Board of Directors with terms
that expire at the meeting.
2. Adoption of New Stock Option Plan
The Board of Directors is proposing the adoption of the 2000 Associate
Stock Option Plan. The purpose of the plan is to align the Acxiom
associates' interests with the stockholders' and investors' interests;
motivate associates to achieve the highest level of performance; retain key
associates by linking executive compensation to Acxiom performance; and
attract the best candidates through competitive, growth-oriented plans.
Your Board unanimously recommends a vote for each of these proposals.
Detailed information on the Board of Directors, including the nominees for
election, and the proposed 2000 Associate Stock Option Plan is provided
below.
With respect to Proposal 1 - election of directors - the enclosed form of
proxy provides a method for you to (1) vote for both nominees together, (2) vote
only for one nominee while withholding authority to vote for the other nominee,
or (3) withhold authority for both nominees. Please read the voting instructions
contained in the attached proxy for information on how to withhold authority for
either or both nominees. If you withhold authority for a nominee, your vote will
be treated as an abstention and accordingly your shares will neither be voted
for nor against the nominee, but they will be counted for quorum purposes. A
majority of the votes cast at the meeting is required to elect any director.
With respect to Proposal 2 - adoption of a new stock option plan - the
enclosed form of proxy provides a method for you to (1) vote for the proposal,
(2) vote against the proposal, or (3) abstain from voting. By abstaining, your
shares will not be voted either for or against the proposal, but will be counted
for quorum purposes. While there may be instances in which you will wish to
abstain, the Board encourages you to vote your shares in your best judgment and
to participate in the voting process to the fullest extent possible. Provided a
quorum is present, a majority of the votes cast at the meeting is required to
approve the proposal to adopt the new stock option plan.
Brokers who hold shares in street name for customers who are beneficial
owners of such shares are prohibited from giving a proxy to vote such customers'
shares on non-routine matters in the absence of specific instructions from such
customers. This is commonly referred to as a "broker non-vote." Broker non-votes
will be treated in the same manner as abstentions for quorum and voting purposes
(i.e., counted for quorum purposes, but neither being voted for nor against the
proposals and, therefore, having no effect on the outcome of the votes).
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INFORMATION ABOUT THE BOARD OF DIRECTORS
Dr. Ann H. Die and Charles D. Morgan currently are members of the Acxiom
Board of Directors with terms that expire at the meeting. If elected, Dr. Die
and Mr. Morgan will serve with the other five Board members: Rodger S. Kline,
Stephen M. Patterson and James T. Womble, whose terms expire at the 2001 Annual
Meeting, and William T. Dillard II, Harry C. Gambill and Thomas F. (Mack)
McLarty, III, whose terms will expire at the 2002 Annual Meeting. Robert A.
Pritzker, formerly a board member, resigned in May 2000 due to other business
commitments. The Board has elected Stephen M. Patterson to fill the vacancy
created by Mr. Pritzker's resignation.
Your proxy holder will vote your shares for the nominees unless you
instruct otherwise. If a nominee is unable to serve as a director, your proxy
holder may vote for any substitute nominee proposed by the Board unless you
withhold this authority. In the event of any director's resignation, death,
disqualification or inability to serve, the Board will fill the vacancy.
Nominees For Director
The Board nominates the following candidates.
Director
Name Age Business Experience Since
Dr. Ann H. Die 55 Dr. Die has served as President of Hendrix 1993
College in Conway, Arkansas since 1992.
She is a member of the Board of Directors
of the National Merit Scholarship Corporation,
the Foundation for Independent Higher Education,
Educational and Institutional Insurance
Administrators, and the American Council on
Education. She is also Chair of the National
Collegiate Athletic Association (NCAA) Division
III Presidents Council and is a member of the
NCAA Executive Committee. She is a member of
the Board of Visitors for Air University of the
U.S. Air Force and the Board of Directors of
the Arkansas Repertory Theatre. 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 57 Mr. Morgan joined Acxiom in 1972. He has been 1975
Chairman of the Board of Directors since 1975,
and serves as Acxiom's President (Company
Leader). He is also a director and Chairman of
the Board-elect of the Direct Marketing
Association. In addition, he serves as Chairman
of the Board of Hendrix College. He was employed
by IBM Corporation prior to joining Acxiom. Mr.
Morgan holds a mechanical engineering degree
from the University of Arkansas.
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Other Directors
Director
Name Age Business Experience Since
William T. Dillard 55 Mr. Dillard has served since 1968 as a member 1988
II of the Dillard's, Inc. Board of Directors and
is Chief Executive Officer of Dillard's, Inc.
of Little Rock, Arkansas, a chain of
traditional department stores with 342 retail
outlets in 29 states. In addition to Dillard's,
Inc., Mr. Dillard is also a director of Barnes
& Noble, Inc. and Chase Bank of Texas, N.A. 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 54 Mr. Gambill is a director and has held the 1992
positions of Chief Executive Officer and
President of Trans Union LLC, 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.
Rodger S. Kline 57 Mr. Kline joined Acxiom in 1973 and serves as 1975
Acxiom's Treasurer and Chief Operating Officer
(Operations Leader). Prior to joining Acxiom,
Mr. Kline was employed by IBM Corporation. He
holds an electrical engineering degree from
the University of Arkansas.
Thomas F. (Mack) 54 Mr. McLarty is Chairman of McLarty Automotive 1999
McLarty, III Group, an Asbury Automotive partner, one of the
nation's leading automotive dealership groups.
He is also Vice-Chairman of Kissinger McLarty &
Associates in Washington, D.C. He is a board
member of Entergy Systems Companies, the
Financial Times Advisory Board of London,
England, the Americas Society of New York
City, the Inter-American Dialogue of Washington,
D.C., and the M.D. Anderson Cancer Center in
Houston. In 1983 he became chairman and chief
executive officer of Arkla, a Fortune 500
natural gas company. He was appointed by
President Bush to the National Petroleum
Council and the National Council on
Environmental Quality, and he was a member
of the St. Louis Federal Reserve Board from
1989 through 1992. Beginning in 1992, he served
President Clinton in several key positions:
Chief of Staff, Counselor to the President,
and Special Envoy for the Americas, with over
five years of service in the President's
Cabinet and on the National Economic Council.
He holds a degree in business administration
from the University of Arkansas.
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Stephen M. Patterson 49 Mr. Patterson is the former President, CEO, 2000
and major shareholder of Leisure Arts, a
publishing and direct mail company. Leisure
Arts was acquired by Time Warner in 1992.
Since 1994, Mr. Patterson has been President
of Patterson Enterprises. Mr. Patterson served
on the Board of Directors of Worthen Bank and
its successor, Bank of America - Arkansas,
for 12 years. He also serves on the advisory
board of Craft.com. He currently is serving as
Vice Chairman of the Board of Trustees of
Hendrix College. Mr. Patterson has a bachelor
of arts degree from Hendrix College, an
electrical engineering degree from Columbia
University, and a masters of business
administration degree, also from Columbia
University.
James T. Womble 57 Mr. Womble joined Acxiom in 1974 and serves as 1975
one of Acxiom's four Division Leaders. Mr.
Womble is also a director of Sedona Corporation.
Prior to joining Acxiom, he was employed by
IBM Corporation. He holds a degree in civil
engineering from the University of Arkansas.
Board Meetings and Committees
The Board holds quarterly meetings to review significant developments
affecting Acxiom and to act on matters requiring Board approval. The Board
currently has four standing committees to assist it in the discharge of its
responsibilities. The committees are:
Audit Committee
Reviews the reports of the auditors and the Acxiom financial statements,
and has the authority to investigate the financial and business affairs of
Acxiom.
During the past fiscal year, outside directors Die, Dillard, Gambill,
McLarty and Pritzker served on this Committee. The current members of this
Committee are directors Dillard, McLarty and Patterson.
Compensation Committee
Administers certain of Acxiom's employee benefit plans and stock option
plans, and approves the compensation paid to Acxiom's senior leaders.
The members are Messrs. Dillard and McLarty.
Executive Committee
Implements the policy decisions of the Board and handles routine matters
which have been delegated to the Executive Committee by the Board.
The members are Messrs. Kline, Morgan and Womble.
Nominating Committee
Makes recommendations to the Board regarding the selection of potential
candidates for open director positions.
The members are Messrs. Kline, McLarty and Morgan.
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During the past fiscal year, the Board met five times, the Audit Committee
met two times, and the Compensation Committee met four times. The Nominating
Committee was initially formed on May 24, 2000, and has had no meetings since
that date. Action pursuant to unanimous written consent in lieu of a meeting was
taken two times by the Board, five times by the Compensation Committee and forty
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 Dr. Die
and Mr. Pritzker.
INFORMATION ABOUT THE 2000 ASSOCIATE STOCK OPTION PLAN
Background
On May 24, 2000, the Board of Directors approved, subject to stockholder
approval, the 2000 Associate Stock Option Plan of Acxiom Corporation. The
purpose of the 2000 Option Plan is to further the growth and development of
Acxiom by offering certain associates options to purchase shares of common
stock. We believe that providing these individuals with a proprietary interest
in Acxiom's business and, therefore, a more direct stake in its continuing
welfare, will better align their interests with those of our stockholders.
We are seeking stockholder approval of the 2000 Option Plan in order to
comply with Nasdaq Stock Market requirements and to ensure that plan
compensation will not be subject to the deduction limits under Section 162(m) of
the Internal Revenue Code. Section 162(m) generally prevents public corporations
from deducting as a business expense that portion of the annual compensation
paid to executive officers named in the Summary Compensation Table that exceeds
$1,000,000. However, qualifying performance-based compensation will not be
subject to the deduction limit if certain requirements are met. In the case of
stock options, one such requirement is approval by stockholders. Acxiom intends
to administer the 2000 Option Plan in order to comply with the performance-based
exemption under Section 162(m).
Description of the Option Plan
The following summary is a brief but not comprehensive description of the
2000 Option Plan. A copy of the plan is attached to this Proxy Statement as
Appendix A, and stockholders should read the plan for the complete statement of
its provisions.
Grant of Stock Options. Under the 2000 Option Plan, Acxiom may grant
incentive stock options and stock options that do not qualify as incentive
options (non-qualified stock options). (See discussion below under "Federal
Income Tax Treatment of Options.") We will issue each option grant under a
separate grant document which will include the following terms:
o whether the option is an incentive option or a non-qualified option;
o the number of shares of stock which may be purchased upon exercise of
an option;
o the exercise price to be paid for the shares;
o the accepted form of payment for the shares purchased upon exercise;
o the required period of continuous service, if any, by the participant;
and
o any other conditions to be satisfied before the option will vest and
become exercisable.
Shares Reserved for Issuance. Acxiom has reserved 6,500,000 shares of its
common stock for issuance under the 2000 Option Plan. Any shares of Acxiom stock
subject to an option that are canceled or unexercised within the exercise period
will again be available for issuance under the Plan. In the event there is any
change in the number of shares of Acxiom stock subject to the 2000 Option Plan
resulting from a merger, consolidation, reorganization, recapitalization, stock
dividend, stock split or similar occurrence, then the number of shares reserved
for issuance, the number of shares for which options may be granted to any one
participant, and the number of shares and the price per share subject to
outstanding options will be proportionally adjusted.
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Acxiom currently has outstanding an Amended and Restated Key Associate
Stock Option Plan as well as a U.K. Share Option Scheme, both of which were
originally adopted in 1987. As of June 1, 2000, there were approximately 7,600
shares of common stock available for issuance under the U.S. Plan and no shares
under the U.K. Plan. Acxiom will continue to use the 1987 U.S. Plan for future
grants until all of the available shares are gone. Acxiom intends to use the
2000 Option Plan for all grants after that time.
Administration. The Acxiom Board of Directors or a committee of the Board
comprised solely of "outside" directors will administer the 2000 Option Plan.
The committee or the Board has full authority and discretion to administer the
2000 Option Plan, including the ability to determine:
o to whom (within the class of eligible persons), and when awards will
be granted;
o whether to grant incentive options, non-qualified options or stock
appreciation rights (described below);
o the number of shares of stock subject to each grant;
o the duration and exercise price of each grant, provided that the
exercise price is no less than the fair market value of the stock on
the date of grant;
o any restriction, limitation, procedure or deferral related to a grant;
o any other terms and conditions of the grants, including any
acceleration or forfeiture of the options upon the occurrence of
certain events; and
o the extent to which grants will be made and operate with other
benefits provided to associates.
The committee or the Board may establish any rules and regulations it considers
necessary to administer the 2000 Option Plan. All determinations of the
committee or the Board will be final and conclusive for all purposes.
Eligible Participants. Participation in the 2000 Option Plan is limited to
employees, officers, affiliates, independent contractors and consultants of
Acxiom or any subsidiary or affiliated company of Acxiom. Any Acxiom executive
officer named in the Summary Compensation Table of Acxiom's then current proxy
statement for any year is not eligible to receive more than 600,000 stock
options or stock appreciation rights in any three-year period.
Exercise Price. The committee or the Board will determine the exercise
price of all options granted under the 2000 Option Plan. The exercise price of
all options granted under the plan may not be less than 100% of the fair market
value of Acxiom common stock on the date of the grant. In the case of an
incentive option granted to a participant owning more than 10% of the total
combined voting power of all classes of Acxiom stock, the exercise price may not
be less than 110% of the fair market value of Acxiom common stock on the date of
the grant. The aggregate fair market value of Acxiom common stock with respect
to which incentive options are exercisable for the first time by a participant
during any calendar year (determined at the date of grant) may not exceed
$100,000.
As described in the Report of Compensation Committee on page 16 of this
Proxy Statement, for the past seven years, Acxiom has routinely granted options
with exercise prices ranging from 25% to 100% above current fair market value as
part of its long term incentive compensation program. By granting options which
are significantly under water at the time of grant, the recipients are motivated
to increase shareholder value, and their interests are even more aligned with
those of all other shareholders.
Option Repricing. Without the further approval of the stockholders of
Acxiom, no outstanding stock option may be amended to reduce the exercise price
or canceled in consideration for an award having a lower exercise price. This
will not, however, prohibit adjustments related to stock splits, stock
dividends, recapitalizations and other changes in the corporate structure or
shares of Acxiom.
Vesting. Options granted under the 2000 Option Plan will vest and become
exercisable by a participant as determined by the committee or the Board, in its
sole discretion, as specified in each grant document.
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Exercise Period. The duration of options granted under the 2000 Option
Plan, including the duration of options following a participant's termination of
employment, death or disability, will be determined by the committee or the
Board in its sole discretion. Non-qualified options granted under the 2000
Option Plan may not be exercised more than fifteen years after the date of
grant, and incentive options may not be exercised more than ten years after the
date of the grant, although each may be granted for a lesser duration. Incentive
options granted to a participant owning more than 10% of the total combined
voting power of all classes of Acxiom stock may not be exercised more than five
years from the date of grant.
Payment for shares. At the time of exercise of an option, a participant
must pay the full exercise price of the option in cash, by check or electronic
funds transfer. Additionally, if approved by the Board or committee (or its
authorized designee), a participant may pay the exercise price by one of the
following additional forms of payment:
o via "broker's cashless exercise" (i.e., through the sale of shares, by
way of a broker, acquired upon exercise of the option having a fair
market value equal to the exercise price pursuant to procedures
approved by Acxiom);
o by delivering previously-owned shares of Acxiom common stock owned by
the participant for at least six months and having a fair market value
equal to the exercise price;
o by authorizing Acxiom to withhold a number of shares of Acxiom common
stock otherwise issuable to the participant upon exercise of an option
having a fair market value equal to the exercise price; or
o by any combination of the above.
Stock Appreciation Rights. Under the 2000 Option Plan, Acxiom may grant
stock appreciation rights to participants who have been granted, or who are
being granted options under the 2000 Option Plan or as a stand-alone award. When
exercised, a stock appreciation right entitles the participant to receive (in
cash or shares of Acxiom common stock as specified in the grant document) the
excess of (1) the fair market value of a share of Acxiom common stock on the
date of the exercise over (2) the price specified in the stock appreciation
right. If stock appreciation rights are identified with shares subject to a
stock option, then, unless otherwise stated in the grant document, the
participant's associated stock appreciation rights will become exercisable and
will terminate upon the same terms as the option. Stock appreciation rights not
identified with an option will become exercisable by a participant and will
terminate as determined by the committee or the Board, in its sole discretion,
as specified in each grant. The exercise price of any stock appreciation right
will equal (1) for any stock appreciation right identified with a stock option,
the exercise price of the option, or (2) for any other stock appreciation right,
any price determined by the committee or the Board in its sole discretion. The
provisions of the plan regarding administration of options, adjustments to
grants upon certain events (i.e. reorganization or merger), transferability,
conditions to exercise, and alteration, termination or waiver also apply to
stock appreciation rights.
Amendment and Termination. The Board of Directors may amend the 2000 Option
Plan at any time as it deems advisable, and the Board or committee may amend the
terms of outstanding grants; provided, however, that, any amendment that would
impair the rights of a participant may not be made without the participant's
consent. To the extent necessary to comply with applicable laws and regulations,
including federal tax laws and regulations of the Nasdaq Stock Market, certain
amendments to the Plan or any outstanding grant will require shareholder
approval. The 2000 Option Plan may be terminated at any time by the Board. No
termination, however, will adversely affect the terms of any outstanding
options.
Merger or Sale of Acxiom. In connection with a "change of control" of
Acxiom (as defined by the committee or Board in its discretion, but which may
include a merger or consolidation of Acxiom, a sale of all or substantially all
of its assets, the acquisition of a significant percentage of the voting power
of Acxiom, or a similar occurrence), the committee or Board may determine that:
(1) outstanding options are immediately exercisable, and/or (2) outstanding
options will terminate within a specified number of days after notice to the
participant, and the participant will receive an amount of cash equal to the
excess of the fair market value of the shares immediately prior to the
occurrence of the change of control over the exercise price of the option.
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Transferability. In general, options and stock appreciation rights granted
under the 2000 Option Plan will not be transferable by a participant other than
by will or the laws of descent and distribution. However, stock options (other
than incentive options) and stock appreciation rights may be transferred (1) by
gift or pursuant to a domestic relations order to members of the participant's
immediate family, and (2) to certain family-controlled entities. Grants made
under the 2000 Option Plan may provide that any shares of Acxiom common stock
issued or transferred as a result of the award will be subject to further
restrictions upon transfer.
Federal Income Tax Treatment. The following summary of certain federal
income tax consequences of the grant and exercise of options and stock
appreciation rights under the 2000 Option Plan is based on current U.S. laws and
regulations, all of which are subject to change. This summary does not attempt
to describe all of the possible tax consequences that could result from the
acquisition, holding, exercise or disposition of an option or stock appreciation
right, or any of the underlying shares of common stock.
Non-Qualified Stock Options. There will be no federal income tax
consequences to either the participant or Acxiom upon the grant of a
non-qualified option. Upon the exercise of a non-qualified option, the
participant will recognize ordinary compensation income in an amount equal to
the excess of the fair market value of each share on the date of exercise over
the option price, and Acxiom generally will be entitled to a federal income tax
deduction in the same amount.
Incentive Stock Options. There will be no federal income tax
consequences to either the participant or Acxiom upon the grant of an incentive
option. The participant will not have to recognize any income upon the exercise
of an incentive option, and Acxiom will not be allowed any deduction, as long as
the participant does not dispose of the shares within two years from the date
the incentive option was granted or within one year from the date the shares
were transferred to the participant. Upon the sale of the shares after the
holding period requirement is satisfied, the participant will recognize a
long-term capital gain (or loss) measured by the excess (or deficit) of the
amount realized from the sale over the exercise price of the shares, but no
deduction will be allowed to Acxiom. If a participant disposes of shares before
the holding period is satisfied, the participant will recognize ordinary income
in the year of the disposition, and Acxiom will be entitled to a corresponding
deduction, in an amount equal to the lesser of (1) the excess of the fair market
value of the shares on the date of exercise over the exercise price of the
shares, or (2) the excess of the amount realized from the disposition over the
exercise price of the shares. Where shares are sold before the holding period is
satisfied, the participant will also recognize a capital gain to the extent that
the amount realized from the disposition of the shares exceeded the fair market
value of the shares on the date of exercise.
Stock Appreciation Rights. Upon the grant of a stock appreciation
right, the participant recognizes no taxable income and Acxiom receives no
deduction. The participant recognizes ordinary income and Acxiom receives a
deduction at the time of exercise equal to the cash and fair market value of
Acxiom common stock payable upon exercise.
-11-
<PAGE>
STOCK OWNERSHIP
The following tables show the ownership of Acxiom common stock by major
stockholders, directors and executive officers.
Ownership of Major Stockholders
The following table lists the persons known by Acxiom to be the beneficial
owners of 5% or more of Acxiom common stock. The percentages of outstanding
shares listed below are calculated based upon 87,998,301 shares of Acxiom common
stock issued and outstanding as of May 1, 2000.
<TABLE>
<CAPTION>
Number of Shares
of Common Stock Percent of
Name and Address of Beneficial Owner Beneficially Owned Outstanding Shares
<S> <C> <C>
William Blair & Company . . . . . . . . . 6,493,291<F1> 7.4%
222 West Adams Street
Chicago, IL 60606
Waddell & Reed Financial Inc. . . . . . . 4,385,750<F1> 5.0%
Waddell & Reed Financial Services, Inc.
Waddell & Reed, Inc.
Waddell & Reed Investment Management Company
P.O. Box 29217
6300 Lamar Avenue
Overland Park, KS 66202-4200
<FN>
<F1> Based on information contained in a Schedule 13G filed with the Securities
and Exchange Commission.
</FN>
</TABLE>
-12-
<PAGE>
Holdings of Officers and Directors
This table shows the amount of Acxiom common stock held by each director
and the named executive officers on May 1, 2000. It also shows the common stock
held by all of Acxiom's directors and executive officers as a group on that
date.
<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 . . . . . . . . . . . . 12,655 *
C. Alex Dietz . . . . . . . . . . . . 492,106<F1> *
William T. Dillard II . . . . . . . . 21,000 *
Harry C. Gambill . . . . . . . . . . . 400 *
Rodger S. Kline . . . . . . . . . . . 1,988,700<F2> 2.3%
Thomas F. (Mack) McLarty, III . . . . . 2,000 *
Charles D. Morgan . . . . . . . . . . 3,878,745<F3> 4.4%
Stephen M. Patterson . . . . . . . . . 30,000 *
James T. Womble . . . . . . . . . . . 1,600,919<F4> 1.8%
Paul L. Zaffaroni . . . . . . . . . . 379,720<F5> *
All directors, nominees and executive
officers, as a group (13 persons) . . 8,659,573<F6> 9.8%
------------------------------------
* Denotes less than 1%.
<FN>
<F1> Includes 2,598 shares held by Mr. Dietz's wife and 291,817 shares subject
to currently exercisable options (40,857 of which are held by Mrs. Dietz),
of which 291,469 are in the money.
<F2> Includes 273,044 shares subject to currently exercisable options, of which
272,230 are in the money.
<F3> Includes 451,748 shares subject to currently exercisable options, of which
450,566 are in the money.
<F4> Includes 269,263 shares subject to currently exercisable options, of which
268,685 are in the money.
<F5> Includes 304,860 shares subject to currently exercisable options and all
are in the money.
<F6> Includes 1,786,232 shares subject to currently exercisable options, of
which 1,772,308 are in the money.
</FN>
</TABLE>
-13-
<PAGE>
EXECUTIVE COMPENSATION
This table shows the compensation during each of Acxiom's last three
fiscal years paid to Mr. Morgan (the Company Leader) and the four other most
highly compensated executive officers based on compensation earned during the
fiscal year ended March 31, 2000.
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
---------------------------- ----------
Securities
Name and Other Annual Underlying All Other
Principal Year Salary Bonus Compensation Options Compensation
Position ($) ($) ($)<F1> (#) ($)<F3>
------------------- ---- ------- ----- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Charles D. Morgan 2000 595,000 --- 0 208,500Z<F2> 19,699
Chairman of the 1999 485,000 --- 292,300 49,678 24,020
Board and Company 1998 375,000 --- 267,857 0 14,813
Leader
Rodger S. Kline 2000 394,000 --- 0 138,066<F2> 12,180
Operations Leader 1999 322,000 --- 194,063 33,483 15,956
1998 250,000 --- 178,571 0 9,869
James T. Womble 2000 326,000 --- 0 114,237<F2> 10,797
Division Leader 1999 264,000 --- 159,107 31,782 12,719
1998 202,000 --- 126,250 0 7,829
Paul L. Zaffaroni 2000 291,000 --- 0 101,972<F2> 9,542
Division Leader 1999 242,000 --- 127,617 7,415 11,468
1998 193,000 --- 120,625 0 7,564
C. Alex Dietz 2000 291,000 --- 0 101,972<F2> 7,997
Division Leader 1999 242,000 --- 70,898 1,483 11,445
1998 191,000 --- 119,375 0 7,328
--------------------------
<FN>
<F1> This amount represents the named individuals' at-risk pay for each fiscal
year. See discussion of "At-Risk Base Pay" below under "Report of
Compensation Committee." In October 1999, each of the executives named
below elected to receive stock options in lieu of cash at-risk payments for
the 2000 fiscal year. See "Option Grants For Last Fiscal Year," footnote 2,
below.
<F2> See footnotes to "Option Grants For Last Fiscal Year" below.
<F3> This amount represents Acxiom's contribution on behalf of each named
executive officer to Acxiom's 401(k) and supplemental executive retirement
plans.
</FN>
</TABLE>
-14-
<PAGE>
Option Grants For Last Fiscal Year
This table contains information concerning options to acquire shares of
Acxiom stock granted to the named executive officers.
Individual Grants
<TABLE>
<CAPTION>
Percent of
Total
Number of Options
Securities Granted
underlying to
Options Employees Exercise or Grant Date
Granted in Fiscal Base Price Expiration Present Value
Name (#) Year ($/Sh) Date ($)(3)
<S> <C> <C> <C> <C> <C>
Charles D. Morgan .. 63,134<F1> 1.82 26.08 5/25/14 1,020,245
34,623<F1> 1.00 32.60 5/25/14 509,997
37,719<F1> 1.09 39.12 5/25/14 509,961
73,024<F2> 2.10 17.93 10/12/14 425,000
Rodger S. Kline .... 41,807<F1> 1.20 26.08 5/25/14 675,601
22,927<F1> .66 32.60 5/25/14 337,715
24,977<F1> .72 39.12 5/25/14 337,689
48,355<F2> 1.39 17.93 10/12/14 281,426
James T. Womble .... 34,591<F1> 1.00 26.08 5/25/14 558,991
18,970<F1> .55 32.60 5/25/14 279,428
20,666<F1> .59 39.12 5/25/14 279,404
40,010<F2> 1.15 17.93 10/12/14 232,858
Paul L. Zaffaroni .. 30,878<F1> .89 26.08 5/25/14 498,988
16,933<F1> .49 32.60 5/25/14 249,423
18,447<F1> .53 39.12 5/25/14 249,403
35,714<F2> 1.03 17.93 10/12/14 207,855
C. Alex Dietz ...... 30,878<F1> .89 26.08 5/25/14 498,988
16,933<F1> .49 32.60 5/25/14 249,423
18,447<F1> .53 39.12 5/25/14 249,403
35,714<F2> 1.03 17.93 10/12/14 207,855
<FN>
<F1> On May 26, 1999, these long-term incentive options were granted. These
options vest incrementally over six years. One-half of these options were
granted at the then current market price, while one-fourth were granted at 25%
premium over market, and the other one-fourth were granted at a 50% premium over
market. See discussion of "Long-Term Incentive Compensation" below under "Report
of Compensation Committees." These options are transferable only under certain
limited circumstances to immediate family members and certain family controlled
entities. The named individuals will not be eligible for another long-term
incentive grant until 2002.
<F2> Options were granted on October 13, 1999 to the leadership team, including
the named individuals, in lieu of all of their fiscal 2000 at-risk compensation.
The exercise price was the fair market value of the Company's common stock on
the day of grant. These options became fully vested on May 18, 2000, with the
exception of a portion of the options granted to Mr. Zaffaroni: 77.50% of his
options were fully vested on May 18, 2000, and the remaining 22.50% will vest
incrementally over six years from the date of grant. Options granted under
Acxiom's U.S. stock option plan are transferable only under certain limited
circumstances to immediate family members and certain family controlled
entities. Options granted under Acxiom's U.K. stock option plan are not
transferable.
<F3>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 Acxiom's common stock of 40.75% to 51.17%, based upon the actual
monthly volatility as represented by the standard deviation in the stock price
variance for the two years prior to the grant date; a risk-free rate of return
of 5.52% to 5.76%, based 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
-15-
<PAGE>
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>
Option Exercises and Fiscal Year End Option Values
This table shows all stock options exercised by the named executives during
the fiscal year ended March 31, 2000, and the number and value of options they
held at fiscal year end.
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised in-the-Money
Shares Options Options
Acquired at Fiscal Year-End at Fiscal Year-End
on Value (#) ($)
Exercise Realized Exer- Unexer- Exer- Unexer-
Name (#) ($) cisable cisable cisable cisable
<S> <C> <C> <C> <C> <C> <C>
Charles D. Morgan 0 0 451,748 415,013 10,170,840 5,142,183
Rodger S. Kline 60,500 756,125 273,044 274,864 5,957,044 3,407,223
James T. Womble 0 0 269,263 232,604 6,037,009 2,958,098
Paul L. Zaffaroni 50,000 606,250 304,860 204,663 7,694,546 2,699,667
C. Alex Dietz 27,088 708,786 250,960 201,676 6,184,233 2,638,290
</TABLE>
Compensation of Directors
Each outside director receives 1,000 shares of unregistered common stock as
an annual retainer fee. In addition, each outside director receives a $2,000 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 Messrs. Dillard and McLarty.
No compensation committee interlocks exist with respect to the Board's
Compensation Committee, nor do any present or past officers of Acxiom serve on
the Compensation Committee.
Report of Compensation Committee
The Compensation Committee of the Board of Directors makes decisions on
the compensation of Acxiom's leadership team. The Compensation Committee members
are non-employee, 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 Thomas F. (Mack) McLarty, III, in
their capacity as members of the Board's Compensation Committee, addressing the
compensation policies for Acxiom's leadership team, for the individuals named in
the tables above, and for Mr. Morgan.
Compensation Policies
Compensation for Acxiom's leadership is based upon principles intended to
align leadership compensation with business strategy, Acxiom values and
management initiatives. The plan is designed to:
o align the leaders' interests with the stockholders' and investors'
interests;
o motivate the leaders to achieve the highest level of performance;
-16-
<PAGE>
o retain key leaders by linking executive compensation to Acxiom
performance; and 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
Acxiom 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 Acxiom, as well as upon individual performance. The Compensation Committee
uses its discretion to set the parameters of the leadership compensation plan
when external, internal and/or individual circumstances warrant. 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 stockholders' interests and the
enhancement of stockholder value. Thus, the Committee has also increasingly
utilized these elements in Acxiom's compensation program for its leadership
team.
Components of Compensation
Compensation paid to Acxiom's leaders in the last fiscal year, 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 compensation granted under
Acxiom's stock option plans. The compensation plan contains five possible
compensation levels with base pay being established based on the 75th percentile
of market for senior leaders and the 50th percentile for all other leaders. This
provides flexibility in establishing appropriate compensation packages for
Acxiom'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 long-term incentive compensation ("LTI"). The higher the
compensation level, the greater the overall percentage of at-risk and LTI. Under
the plan, the compensation for Acxiom'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%).
Not-At-Risk Base Pay - Base pay levels are largely determined through
market comparisons. Actual salaries are based on individual performance
contributions and the use of market surveys for comparable companies and
positions. Base salaries for Acxiom's senior leadership were targeted in the
last fiscal year 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.
At-Risk Base Pay - The at-risk base pay for all of Acxiom's leaders is
funded after Acxiom 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.) EVA
measures a Company's performance by taking its after-tax operating profit and
subtracting the cost of capital. In the past fiscal year, 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. Acxiom's
diluted earnings per share goal for the year was $1.00 per share, which was
achieved.
Long-Term Incentive Compensation - The Committee's long-term incentive
compensation plan is composed of awards of stock options designed to align
long-range interests between Acxiom's leadership team and its stockholders and
to assist in the retention of key people. During the past fiscal year, 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. On May 26, 1999, 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 stockholders. One-half of the options awarded were priced at
the then current market value, one-fourth were priced at a 25% premium over the
then current market value, and the remaining one-fourth were priced at a 50%
premium over the then current market value. Senior leadership members will not
be eligible for new grants of LTI options until 2002.
-17-
<PAGE>
Under the Committee's current guidelines, the terms of long-term incentive
non-statutory options are 15 years, and the exercise prices are: one-half at the
fair market value on the date of grant, one-fourth at a 25% premium over market,
and one-fourth at a 50% premium over market. From 1993 - 1998, LTI options were
granted one-half at fair market value, one-fourth at a 50% premium over market,
and one-fourth at a 100% premium over market. The LTI vesting period for options
granted in and after 1999 was changed from nine to six years, with 20% of the
options becoming vested on each of the second through the sixth anniversaries.
These changes were made in order to make Acxiom more competitive with other
companies in the information technology industry.
Supplemental Executive Retirement Plan - All members of Acxiom's leadership
team are eligible to participate in the Supplemental Executive Retirement Plan
("SERP"), which was adopted in fiscal 1996, by contributing up to 100% of their
pretax income into the plan. Acxiom 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 Acxiom's 401K Retirement Plan. The Acxiom match is paid in
Acxiom common stock.
Other Compensation Plans - Acxiom 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 2000, Acxiom's revenue increased 28%, and net earnings increased
35%, excluding special charges from the prior year, a record year in both
revenue and earnings for Acxiom. Diluted earnings per share increased 28%,
excluding special charges from the prior year. The return on stockholders'
equity for fiscal 2000 was 19%. In the prior year, Acxiom's revenue and net
earnings, excluding special charges, increased 27% and 33%, respectively.
Because of Acxiom's performance and Mr. Morgan's performance in the prior
year, Mr. Morgan's fiscal 2000 base pay was increased by 23% over fiscal 1999.
His base pay for fiscal 2001 was increased 18.5% over fiscal 2000. This increase
was due in part to the success of Acxiom in fiscal 2000, and in part as the
third of four proposed annual increases designed to make the salaries of Mr.
Morgan (and other Acxiom 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 2000, 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. All of Mr. Morgan's fiscal 2000 at-risk payments were made in the
form of stock options. (See the "Option Grants For Last Fiscal Year" table
above.) These 73,024 options were granted on October 13, 1999, at an exercise
price of $17.93, the market value on the date of grant, and became fully vested
as of May 18, 2000.
On May 26, 1999, Mr. Morgan was granted 135,477 stock options as part
of his long term incentive compensation. One-half of the options awarded were
priced at the then current market value ($26.08), one-fourth were priced at a
25% premium over the then current market value ($32.60), and the remaining
one-fourth were priced at a 50% premium over the then current market value
($39.12). Mr. Morgan will not be eligible for another grant of LTI options until
2002.
All of the grants described above were intended to further encourage Mr.
Morgan's long-term performance while aligning his interests with those of
Acxiom's other stockholders with regard to the performance of Acxiom's common
stock.
-18-
<PAGE>
Section 162(m), "Limit on Deductibility of Compensation Expense"
Section 162(m) of the Omnibus Budget Reconciliation Act of 1993 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
stockholders. The Board has administered its compensation plans so as to comply
with Section 162(m) and thereby retain the deductibility of executive
compensation, and it is Acxiom's intention to continue to monitor its
compensation plans to comply with Section 162(m) in the future.
William T. Dillard II Thomas F. (Mack) McLarty, III
STOCK PERFORMANCE GRAPH
The graph below compares for each of the last five fiscal years the
cumulative total return on Acxiom'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 Acxiom's common stock assumes $100 invested on March
31, 1995 in Acxiom'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 1995 1996 1997 1998 1999 2000
<S> <C> <C> <C> <C> <C> <C>
Acxiom Corporation $100 $143 $172 $306 $316 $397
NASDAQ - US Index 100 136 151 229 309 575
NASDAQ - Computer & Data Processing 100 142 155 271 442 797
* $100 INVESTED ON 03/31/95 IN STOCK OR INDEX - INCLUDING REINVESTMENT OF
DIVIDENDS. FISCAL YEAR ENDING MARCH 31.
</TABLE>
-19-
<PAGE>
CERTAIN TRANSACTIONS
1. Acxiom entered into an agreement to be a corporate sponsor of RM
Promotions, LLC in the 2000 NASCAR truck racing series. Rob Morgan, an employee
and majority owner of RM Promotions, is the son of Company Leader Charles D.
Morgan, who has a minority interest in RM Promotions. Under the agreement, RM
Promotions will support Acxiom customers and promote Acxiom products and
services at the NASCAR events. RM Promotions will also assist Acxiom in
providing hospitality facilities for Acxiom customers at selected events. The
sponsorship fee by Acxiom to RM Promotions in the prior fiscal year was
$500,000, and the fee to be paid in the current fiscal year is $1,500,000.
2. Acxiom uses the temporary staffing services of the national staffing
firm, Norrell Staffing Services, Inc. for its strategic staffing and contingency
workforce needs. Susie P. Morgan, wife of Company Leader Charles D. Morgan, owns
the Little Rock, Arkansas franchise of Norrell. The total annual fees received
by Ms. Morgan's franchise from Norrell, based on payments to be made by Acxiom
to Norrell, were approximately $250,000 in fiscal 2000.
3. Acxiom leases an aircraft from MorAir, Inc., a corporation controlled by
Charles D. Morgan, Acxiom's Company Leader, for approximately $80,000 per month,
plus maintenance and insurance. The term of this aircraft lease expires in
August, 2006. 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.
4. In accordance with a data center management agreement dated July 27,
1992 between Acxiom and Trans Union LLC, Acxiom (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 expires in 2005. In the past fiscal year, Acxiom received
approximately $80 million in revenue from Trans Union.
As part of the 1992 agreement, Acxiom issued 1,920,000 shares of its common
stock to Trans Union. At the same time, Acxiom also issued a warrant to Trans
Union to purchase up to 4,000,000 additional shares prior to August 31, 2000, at
exercise prices ranging from $2.9125 per share to $3.5625 per share. In August
1998, Trans Union exercised the warrant and acquired the 4,000,000 shares for
$3.0625 per share. In June 1999, Trans Union sold 400,000 of these shares in the
open market.
In 1994, Acxiom and Trans Union's parent company, Marmon Industrial LLC,
entered into a stock purchase agreement under which Marmon Industrial bought
2,000,000 shares of Acxiom stock for $5.98 per share. In 1997, Trans Union
transferred its original 1,920,000 shares (together with an additional 1,000
shares it had previously acquired from Mr. Gambill) to the Pritzker Foundation,
a private foundation. At the same time, Marmon Industrial transferred its
2,000,000 shares to the Pritzker Foundation. In July 1999, the Pritzker
Foundation sold all of these shares in an underwritten public offering. In
December, Trans Union transferred the remaining 3,603,000 of its Acxiom shares
to Marmon Holdings, Inc. In March 2000, Harry C. Gambill transferred 1,000
shares of Acxiom stock, which represented his annual director's retainer, to
Marmon Holdings. On May 12, 2000, Marmon sold all of its 3,604,000 shares to
another investor in a private transaction. Consequently, neither Marmon nor
Trans Union currently own any Acxiom stock.
In a 1992 letter agreement, Acxiom agreed to use its best efforts to cause
one person designated by Trans Union to be elected to Acxiom'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 Stockholders to serve a three-year term. He was
elected to serve additional three-year terms at the 1996 and 1999 Annual
Meetings. Under a second letter agreement, executed in 1994 in connection with
an amendment to the 1992 agreement which continued the term through 2002, Acxiom
agreed to use its best efforts to cause two people designated by Trans Union to
be elected to Acxiom's Board of Directors. In addition to Mr. Gambill, Trans
Union designated Robert A. Pritzker, an executive officer of Marmon Industrial
Corporation, who was appointed to fill a newly created position on Acxiom'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. He was elected to
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<PAGE>
serve a second three-year term at the 1998 Annual Meeting. As noted above, Mr.
Pritzker resigned from the Board in May, 2000, to attend to other business
obligations. While these undertakings by Acxiom are in effect until 2005, Acxiom
has been notified that Trans Union will not designate another individual to
serve as director at the present time.
SECTION 16(a) REPORTING DELINQUENCIES
Section 16(a) of the Securities Exchange Act of 1934 requires Acxiom's
executive officers, directors, and persons who own more than ten percent (10%)
of Acxiom's stock to file reports of ownership and changes in ownership with the
Securities and Exchange Commission. These reports are also filed with the
National Association of Securities Dealers, Inc. A copy of each report is
furnished to Acxiom.
SEC regulations require Acxiom to identify anyone who filed a required
report late during the most recent fiscal year. Based solely on our review of
reports furnished to us and the written representations that no other reports
were required during the fiscal year ended March 31, 2000, we believe that all
Section 16(a) filing requirements were met.
INDEPENDENT PUBLIC ACCOUNTANTS
KPMG LLP has been selected as Acxiom's independent accountants and
auditors. KPMG LLP has held this position since Acxiom went public in 1983. They
will have the opportunity to make a statement at the 2000 Annual Meeting if they
desire to do so and to respond to appropriate questions.
SUBMISSION OF STOCKHOLDER PROPOSALS
If you want to present a proposal at the 2001 Annual Meeting, you should
send the proposal to Catherine L. Hughes, Acxiom Corporation, 1 Information Way,
Little Rock, Arkansas 72202.
Acxiom's bylaws contain an advance notice provision which provides that any
matter may not be brought by a stockholder before Acxiom's annual meeting unless
the proposal is delivered in writing to the Secretary of Acxiom no later than
120 days prior to the anniversary date of the immediately preceding annual
meeting. Accordingly, for any stockholder proposal to be considered at the 2000
Annual Meeting it must be submitted no later than April 12, 2001.
Additionally, for a stockholder proposal to be included in the Acxiom proxy
statement and form of proxy for the 2001 Annual Meeting, the proposal must be
received on or before February 21, 2001 and must otherwise comply with Rule
14a-8 of the Securities Exchange Act of 1934.
EXPENSES OF SOLICITATION
Acxiom will bear the expense of preparing and mailing the proxy materials
and may use regular employees and associates, without additional compensation,
to request, by telephone or otherwise, the return of proxies or attendance at
the Annual Meeting. Arrangements will also be made with brokerage firms and
other custodians, nominees and fiduciaries to forward solicitation materials to
the beneficial owners of shares of common stock, and Acxiom will provide
reimbursement for reasonable out-of-pocket expenses incurred by them in
connection with the forwarding of such materials. In the event the management of
Acxiom deems it advisable, Acxiom may also engage the services of an independent
proxy solicitation firm to aid in the solicitation of proxies. The fees paid by
Acxiom, in the event of such an engagement, likely would not exceed $25,000.
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ADDITIONAL INFORMATION AVAILABLE
Acxiom will furnish, without charge, a copy of our most recent Annual
Report on Form 10-K, as filed with the United States Securities and Exchange
Commission, including any financial statements and schedules. Your written
request should be sent to Catherine L. Hughes, Acxiom Corporation, 1 Information
Way, Little Rock, Arkansas 72202.
OTHER MATTERS
The Board does not intend to present any items of business other than those
stated in the Notice of Annual Meeting of Stockholders. If other matters are
properly brought before the meeting, the persons named in the accompanying proxy
will vote the shares represented by it in accordance with their best judgment.
Discretionary authority to vote on other matters is included in the Proxy.
By Order of the Board of Directors
Catherine L. Hughes
Secretary
Little Rock, Arkansas
June 22, 2000
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Appendix A
2000 ASSOCIATE STOCK OPTION PLAN
OF
ACXIOM CORPORATION
1. Establishment and Purpose. The purpose of the 2000 Associate Stock
Option Plan of Acxiom Corporation (the "Plan") is to further the growth and
development of Acxiom Corporation (the "Company") and any of its present or
future Subsidiaries and Affiliated Companies (as defined below) by granting to
certain Associates (as defined below) of the Company and any Subsidiary or
Affiliated Company options to purchase shares of Common Stock (as defined below)
of the Company, thereby offering such 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 shareholders. This Plan is
also intended to assist the Company in attracting and retaining talented
Associates, who are vital to the continued development and success of the
Company.
2. Definitions. The following capitalized terms, when used in the Plan,
will have the following meanings:
(a) "Act" means the Securities Exchange Act of 1934, as amended and in
effect from time to time.
(b) "Affiliated Company" means any corporation, limited liability
company, partnership, limited liability partnership, joint venture or other
entity in which the Company or any of its Subsidiaries has an ownership
interest.
(c) "Associate" means any employee, officer (whether or not also a
director), affiliate, independent contractor or consultant of the Company,
a Subsidiary or an Affiliated Company who renders those types of services
which tend to contribute to the success of the Company, its Subsidiaries or
its Affiliated Companies, or which may reasonably be anticipated to
contribute to the future success of the Company, its Subsidiaries or its
Affiliated Companies.
(d) "Board" shall mean the Board of Directors of the Company.
(e) "Code" means the Internal Revenue Code of 1986, as amended and in
effect from time to time.
(f) "Common Stock" means the common stock, par value $.10 per share,
of the Company or any security into which such common stock may be changed
by reason of any transaction or event of the type described in Section 18
of the Plan.
(g) "Committee" means a committee of the Board whose members are
appointed by the Board from time to time. All of the members of the
Committee, which may not be less than two, are intended at all times to
qualify as "outside directors" within the meaning of Section 162(m) of the
Code and "Non-Employee Directors" within the meaning of Rule 16b-3;
provided, however, that the failure of a member of such Committee to so
qualify shall not be deemed to invalidate any Stock Option granted by such
Committee.
(h) "Date of Grant" means the date specified by the Committee or the
Board, as applicable, on which a grant of Stock Options or Stock
Appreciation Rights will become effective.
(i) "Exercise Price" means the purchase price per share payable upon
exercise of a Stock Option.
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(j) "Fair Market Value" means, as of any applicable determination date
or for any applicable determination period, the fair market value of the
Common Stock as determined by the Committee or Board.
(k) "Grant Documents" means any written agreement, memorandum or other
document or instrument, authorized by the Committee or Board, evidencing
the terms and conditions of a Stock Option or Stock Appreciation Right
grant under the Plan.
(l) "Incentive Stock Option" means a Stock Option intended to be and
designated as an "Incentive Stock Option" within the meaning of Section 422
of the Code.
(m) "Legal Requirements" mean any laws, or any rules or regulations
issued or promulgated by the Internal Revenue Service (including Section
422 of the Code), the Securities and Exchange Commission, the National
Association of Securities Dealers, Inc., The Nasdaq, Inc.'s National Market
(or any other stock exchange upon which the Common Stock is listed for
trading), or any other governmental or quasi-governmental agency having
jurisdiction over the Company, the Common Stock or the Plan.
(n) "Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
(o) "Participant" means a person who is selected by the Committee or
the Board, as applicable, to receive Stock Option or Stock Appreciation
Right grants under the Plan and who is at that time an Associate.
(p) "Rule 16b-3" means Rule 16b-3 under Section 16 of the Act, as such
Rule is in effect from time to time.
(q) "Stock Appreciation Right" means the right pursuant to an award
granted under Section 12 of the Plan, to surrender to the Company all (or a
portion) of such right and, if applicable, a related Stock Option, and
receive cash or shares of Common Stock in accordance with the provisions of
Section 12.
(r) "Stock Option" means the right to purchase a share of Common Stock
upon exercise of an option granted pursuant to Section 4 of the Plan.
(s) "Strike Price" shall have the meaning set forth for such term in
Section 12(b) of the Plan.
(t) "Subsidiary" means any corporation, limited liability company,
partnership, limited liability partnership, joint venture or other entity
in which the Company owns or controls, directly or indirectly, not less
than 50% of the total combined voting power or equity interests represented
by all classes of stock issued by such corporation, limited liability
company, partnership, limited liability partnership, joint venture or other
entity.
3. Administration. The Plan shall be administered by the Committee and
the Board. Each of the Committee or the Board has the full authority and
discretion to administer the Plan, and to take any action that is necessary or
advisable in connection with the administration of the Plan including, without
limitation, the authority and discretion to:
(a) select the Associates eligible to become Participants under the
Plan;
(b) determine whether and to what extent Incentive Stock Options,
Non-Qualified Stock Options or Stock Appreciation Rights are to be granted
hereunder to one or more Associates;
(c) determine the number of shares of Common Stock to be covered by
each such grant;
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(d) determine the terms and conditions, not inconsistent with the
terms of the Plan, of any grant hereunder (including, but not limited to,
the Exercise Price or Strike Price and any restriction, limitation,
procedure, or deferral related thereto, or any vesting acceleration or
waiver of forfeiture restrictions regarding any Stock Option, or the shares
of stock relating thereto, or any Stock Appreciation Right, based in each
case on such guidelines and factors as the Committee or Board shall
determine from time to time in its sole discretion); and
(e) determine whether, to what extent and under what circumstances
grants under the Plan are to be made and operate, whether on a tandem basis
or otherwise, with other grants or awards (whether equity or cash based)
made by the Company under or outside of the Plan.
Each of the Committee and the Board shall have the authority to adopt,
alter and repeal such rules, guidelines and practices governing the Plan as it
shall from time to time deem advisable; to interpret the terms and provision of
the Plan and any Stock Option or Stock Appreciation Right grant issued under the
Plan (and any Grant Documents relating thereto); and to otherwise supervise the
administration of the Plan.
Each of the Committee and the Board shall also have the authority to
provide, in its discretion, for the recision, forfeiture, cancellation or other
restriction of any Stock Option or Stock Appreciation Right granted under the
Plan, or for the forfeiture, recision or repayment to the Company by an
Associate or former Associate of any profits or gains related to the exercise of
any Stock Option or Stock Appreciation Right granted hereunder, or other
limitations, upon the occurrence of such prescribed events and under such
circumstances as the Committee or the Board shall deem necessary and reasonable
for the benefit of the Company.
All decisions made by the Committee and the Board pursuant to the
provisions of the Plan shall be made in the Committee's or Board's sole
discretion and shall be final and binding on all persons including the Company
and any Participant. No member of the Committee or Board will be liable for any
such action or determination made in good faith.
Notwithstanding any provision of the Plan to the contrary, the Committee
will have the exclusive authority and discretion to administer or otherwise take
any action required or permitted to be taken under the provisions of Sections 4,
6, 7, 8, 10, 11, 12, 17 or 18 hereof with respect to Stock Options or Stock
Appreciation Rights granted under the Plan that are intended to comply with the
requirements of Section 162(m) of the Code.
4. Grant of Stock Options. The Committee or the Board may from time to time
authorize grants of Stock Options to any Participant upon such terms and
conditions as the Committee or Board may determine in accordance with the
provisions set forth in this Plan. Each grant will specify, among other things,
the number of shares of Common Stock to which it pertains; the Exercise Price,
the form of payment to be made by the Participant for the shares purchased upon
exercise of the Stock Option and the required period or periods (if any) of
continuous service by the Participant with the Company, a Subsidiary or an
Affiliated Company and/or any other conditions to be satisfied before the Stock
Options or installments thereof will vest and become exercisable. Stock Options
granted under the Plan may be either Non-Qualified Stock Options or Incentive
Stock Options. The Committee or Board, at the time each Stock Option is granted,
shall designate such option as either a Non-Qualified Stock Option or an
Incentive Stock Option.
Notwithstanding any provision of the Plan to the contrary, the aggregate
Fair Market Value (as determined on the Date of Grant) of the Common Stock with
respect to which Incentive Stock Options granted are exercisable for the first
time by any Participant during any calendar year (under all plans of the Company
and its Subsidiaries) shall not exceed the maximum amount specified by Section
422 of the Code, as amended from time to time (currently $100,000).
Each Stock Option granted under this Plan will be evidenced by Grant
Documents delivered to the Participant containing such further terms and
provisions, consistent with the Plan, as the Committee or Board may approve in
its discretion.
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5. Shares Subject to the Plan. The total number of shares of Common Stock
which may be issued pursuant to the Plan shall not exceed in the aggregate
6,500,000 shares. Such shares may consist, in whole or in part, of authorized
and unissued shares or treasury shares, as determined in the discretion of the
Committee or Board. Any shares of Common Stock which are subject to Stock
Options that are terminated unexercised, forfeited or surrendered or that expire
for any reason will again be available for issuance under the Plan. The shares
of Common Stock available for issuance under the Plan will be subject to
adjustment as provided in Section 18 below.
6. Eligible Participants. All Associates shall be eligible to receive Stock
Options and thereby become Participants in the Plan, regardless of such
Associate's prior participation in the Plan or any other benefit plan of the
Company. 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
600,000 Stock Options or Stock Appreciation Rights in any three-year period.
7. Exercise Price.
(a) The Exercise Price for each share of Common Stock purchasable
under any Stock Option shall be not less than 100% of the Fair Market Value
per share on the Date of Grant as the Committee or Board shall specify. All
such Exercise Prices shall be subject to adjustment as provided for in
Section 18 hereof.
(b) If any Participant to whom an Incentive Stock 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 or Affiliated Companies, then the following
special provisions shall be applicable to any Incentive Stock Options
granted to such individual:
(i) The Exercise Price per share of Common Stock subject to such
Incentive Stock 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 Incentive Stock Option shall not have a term in excess
of five (5) years from the Date of Grant.
8. Exercise Period. Subject to Section 18 hereof, the period during which a
Stock Option shall vest and become exercisable by a Participant (or his or her
representative(s) or transferee(s)) whether during or after employment or
following death, retirement or disability (the "Exercise Period") shall be such
period of time as may be designated by the Committee or Board as set forth in
the applicable Grant Documents executed in connection with such Stock Option. If
the Committee or Board provides, in its sole discretion, that any Stock Option
is exercisable only in installments, the Committee or Board may waive or
accelerate such installment exercise provisions at any time at or after grant in
whole or in part, based upon such factors as the Committee or Board shall
determine, in its sole discretion.
The maximum duration of any Incentive Stock Option granted under the Plan
shall be ten (10) years from the Date of Grant (and no such Incentive Stock
Option shall be exercisable after the expiration of such (10) year period),
although such options may be granted for a lesser duration. The duration of
Non-Qualified Stock Options shall be for such period as determined by the
Committee or Board in its sole discretion.
9. Exercise of Option. Subject to Section 18 hereof, a Stock Option may be
exercised by a Participant at any time and from time to time during the Exercise
Period by giving written notice of such exercise to the Company specifying the
number of shares of Common Stock to be purchased by Participant. Such notice
shall be accompanied by payment of the Exercise Price in accordance with Section
10 below.
10. Payment for Shares. Full payment of the Exercise Price for shares
purchased upon exercise of a Stock Option, together with the amount of any tax
or excise due in respect of the sale and issue thereof, may be made in one of
the following forms of payment:
(a) Cash, by check or electronic funds transfer;
(b) Pursuant to procedures approved by the Company, through the sale
(or margin) of shares of Common Stock acquired upon exercise of the Stock
Option through a broker-dealer to whom the Participant has submitted an
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irrevocable notice of exercise and irrevocable instructions to deliver
promptly to the Company the amount of sale (or if applicable margin loan)
proceeds sufficient to pay for the Exercise Price, together with, if
requested by the Company, the amount of federal, state, local or foreign
withholding taxes payable by reason of such exercise;
(c) By delivering previously-owned shares of the Company's Common
Stock owned by the Participant for a period of at least six months having a
Fair Market Value on the date upon which the Participant exercises his or
her Stock Option equal to the Exercise Price, or by delivering a
combination of cash and shares of Common Stock equal to the aggregate
Exercise Price;
(d) By authorizing the Company to withhold a number of shares of
Common Stock otherwise issuable to the Participant upon exercise of a Stock
Option having an aggregate Fair Market Value on the date upon which the
Participant exercises his or her Stock Option equal to the aggregate
Exercise Price; or
(e) By any combination of the foregoing;
provided however, that the payment methods described in clauses (c), (d) or (e)
immediately above shall not be available to a Participant (i) without the prior
consent of either the Committee or Board, or its authorized designee(s) and (ii)
if at any time that the Company is prohibited from purchasing or acquiring
shares of Common Stock under applicable law. The Committee may permit a
Participant to defer the issuance of any shares, subject to such rules and
procedures as it may establish.
The Company will issue no certificates for shares until full payment of the
Exercise Price 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; provided however, that for purposes of this Section 10, full payment shall
be deemed to be received by the Company upon evidence of delivery to a
broker-dealer of the irrevocable instructions contemplated by clause (b)
immediately above.
11. Withholding Taxes. The Company may require a Participant exercising a
Non-Qualified Stock Option or Stock Appreciation Right granted hereunder to
reimburse the Company (or the entity 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. Such withholding
requirements may be satisfied by any one of the following methods:
(a) A Participant may deliver cash in an amount which would satisfy
the withholding requirement;
(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; or
(c) With the prior consent of either the Committee or Board, or its
authorized designee, a Participant may request that the Company (or the
entity which employs such Participant) withhold from the number of shares
otherwise issuable to the Participant upon exercise of a Stock Option such
number of shares (based upon the Fair Market Value of the Common Stock on
the date of exercise) as is necessary to satisfy the withholding
requirement.
12. Stock Appreciation Rights.
(a) When granted, Stock Appreciation Rights may, but need not be
identified with a specific Stock Option (including any Stock Option granted
on or before the Date of Grant of the Stock Appreciation Rights) in a
number equal to or different from the number of Stock Appreciation Rights
so granted. If Stock Appreciation Rights are identified with shares subject
to a Stock Option, then, unless otherwise provided in the applicable Grant
Document, the Participant's associated Stock Appreciation Rights shall
terminate upon the expiration, termination, forfeiture or cancellation of
such Stock Option or the exercise of such Stock Option.
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(b) The "Strike Price" of any Stock Appreciation Right shall (i) for
any Stock Appreciation Right that is identified with a Stock Option, equal
the Exercise Price of such Stock Option, or (ii) for any other Stock
Appreciation Right, be not less than 100% of the Fair Market Value of a
share of Common Stock on the Date of Grant as the Committee or Board shall
specify.
(c) Subject to Section 18 hereof, (i) each Stock Appreciation Right
which is identified with any Stock Option grant shall vest and become
exercisable by a Participant as and to extent that the related Stock Option
which respect to which such Stock Appreciation Right is identified may be
exercised and (ii) each other Stock Appreciation Right shall vest and
become exercisable by a Participant, whether during or after employment or
following death, retirement or disability, at such time or times as may be
designated by the Committee or Board as set forth in the applicable Grant
Documents executed in connection with such Stock Appreciation Right.
(d) Subject to Section 18 hereof, Stock Appreciation Rights may be
exercised by a Participant by delivery to the Company of written notice of
intent to exercise a specific number of Stock Appreciation Rights. Unless
otherwise provided in the applicable Grant Documents, the exercise of Stock
Appreciation Rights which are identified with shares of Common Stock
subject to a Stock Option shall result in the cancellation or forfeiture of
such Stock Option to the extent of such exercise of such Stock Appreciation
Right.
(e) The benefit to the Participant for each Stock Appreciation Right
exercised shall be equal to (i) the Fair Market Value of a share of Common
Stock on the date of such exercise, minus (ii) the Strike Price of such
Stock Appreciation Right. Such benefit shall be payable in cash, except
that the Committee or Board may provide in the Grant Documents that
benefits may be paid wholly or partly in shares of Common Stock.
13. Loans or Guarantee of Loans. The Committee or Board, or its authorized
designee(s), may authorize the extension of a loan to a Participant by the
Company (or the guarantee by the Company of a loan obtained by a Participant
from a third party) in order to assist a Participant to exercise a Stock 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 or Board, or its authorized designee(s). Loans and guarantees may be
granted without security, the maximum credit available being the Exercise Price
of the Stock Option sought to be exercised plus any federal and state income tax
liability incurred upon exercise of the Stock Option.
14. Transferability.
(a) Incentive Stock Options granted under this Plan shall not be
transferred by a Participant, except by will or by the laws of descent and
distribution.
(b) Non-Qualified Stock Options and Stock Appreciation Rights (subject
to the limitations in paragraph (c) below) granted under the Plan may be
transferred by a Participant to: (i) the Participant's family members
(whether related by blood, marriage, or adoption and including a former
spouse); (ii) trust(s) in which the Participant's family members have a
greater than 50% beneficial interest; and (iii) family partnerships and/or
family limited liability companies which are controlled by the Participant
or the Participant's family members, such transfers being permitted to
occur by gift or pursuant to a domestic relation order, or, only in the
case of transfers to the entities described in clauses (i) and (ii)
immediately above, for value. The Committee or Board, or its authorized
designee(s) may, in its sole discretion, permit transfers of Non-Qualified
Stock Options or Stock Appreciation Rights to other persons or entities
upon the request of a Participant. Subsequent transfers of previously
transferred Non-Qualified Stock Options or Stock Appreciation Rights may
only be made to one of the permitted transferees named above, unless the
subsequent transfer has been approved by the Committee or the Board, or its
authorized designee(s). Otherwise, such transferred options may be
transferred only by will or the laws of descent and distribution.
(c) Notwithstanding the foregoing, if at the time any Stock Option is
transferred as permitted under this Section 14, a corresponding Stock
Appreciation Right has been identified as being granted in tandem with such
Stock Option, then the transfer of such Stock Option shall also constitute
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a transfer of the corresponding Stock Appreciation Right, and such Stock
Appreciation Right shall not be transferable other than as part of the
transfer of the Stock Option to which it relates.
(d) Concurrently with any transfer, the transferor shall give written
notice to the Plan's then current Stock Option administrator of the name
and address of the transferee, the number of shares being transferred, the
Date of Grant of the Stock Options or Stock Appreciation Rights being
transferred, and such other information as may reasonably be required by
the administrator. Following transfer, any such Stock Options or Stock
Appreciation Rights shall continue to be subject to the same terms and
conditions as were applicable immediately prior to transfer. The provisions
of the Plan and applicable Grant Documents shall continue to be applied
with respect to the original Participant, and such Stock Options or Stock
Appreciation Rights shall be exercisable by the transferee only to the
extent that they could have been exercised by the Participant under the
terms of such Grant Documents. The Company disclaims any obligation to
provide notice to a transferee of any termination or expiration of a
transferred Stock Option or Stock Appreciation Right.
15. Conditions to Exercise of Options. The Committee or Board may, in its
discretion, require as conditions to the exercise of Stock Options or Stock
Appreciation Rights and the issuance of shares thereunder either (a) that a
registration statement under the Securities Act of 1933, as amended, with
respect to the Stock Options or Stock Appreciation Rights 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 or his or her
transferee(s) (i) shall have represented, warranted and agreed, in form and
substance satisfactory to the Company, both that he or she is acquiring the
Stock Option or Stock Appreciation Right and, at the time of exercising the
Stock Option or Stock Appreciation Right, 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.
16. Conditions to Effectiveness of the Plan. No Stock Option of Stock
Appreciation Right shall be granted or exercised if the grant of the Stock
Option or Stock Appreciation Right, or the exercise and the issuance of shares
or other consideration pursuant thereto, would be contrary to law or the
regulations of any duly constituted authority having jurisdiction.
17. Alteration, Termination, Discontinuance, Suspension, or Amendment.
(a) Subject to the requirements of paragraph (c) below, the Committee
or Board may, without the consent of the Participant, amend any Grant
Documents evidencing a Stock Option or Stock Appreciation Right granted
under the Plan, or otherwise take action, to accelerate the time or times
at which the Stock Option or Stock Appreciation Right may be exercised, to
extend the expiration date of the Stock Option or Stock Appreciation Right,
to waive any other condition or restriction applicable to such Stock Option
or Stock Appreciation Right or to the exercise of such Stock Option or
Stock Appreciation Right, to reduce the Exercise Price or Strike Price, as
applicable, of such Stock Option or Stock Appreciation Right, to amend the
definition of a change in control of the Company (if such a definition is
contained in such Grant Documents) to expand the events that would result
in a change in control of the Company and to add a change in control
provision to such Grant Documents (if such provision is not contained in
such Grant Documents) and may amend any such Grant Documents in any other
respect with the consent of the Participant.
(b) Subject to the requirements of paragraph (c) below, the Plan may
be amended from time to time by the Board or any duly authorized committee
thereof.
(c) If required by any Legal Requirement, any amendment to the Plan or
any Grant Document will also be submitted to and approved by the requisite
vote of the shareholders of the Company. If any Legal Requirement requires
the Plan to be amended, or in the event any Legal Requirement is amended or
supplemented (e.g., by addition of alternative rules) to permit the Company
to remove or lessen any restrictions on or with respect to Stock Options or
Stock Appreciation Rights, the Board and the Committee each reserves the
right to amend the Plan or any Grant Documents evidencing a Stock Option or
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Stock Appreciation Right to the extent of any such requirement, amendment
or supplement, and all Stock Options or Stock Appreciation Rights then
outstanding will be subject to such amendment.
(d) Notwithstanding any provision of the Plan to the contrary, the
Committee or the Board may not, without prior approval of the shareholders
of the Company, reprice any outstanding Stock Option by either lowering the
Exercise Price thereof or canceling such outstanding Stock Option in
consideration of a grant having a lower Exercise Price. This paragraph
17(d) is intended to prohibit the repricing of "underwater" Stock Options
without prior shareholder approval and shall not be construed to prohibit
the adjustments provided for in Section 18 hereof.
(e) The Plan may be terminated at any time by action of the Board. The
termination of the Plan will not adversely affect the terms of any
outstanding Stock Option or Stock Appreciation Right.
(f) The Plan will not confer upon any Participant any right with
respect to continuance of employment or other service with the Company or
any Subsidiary or Affiliated Company, nor will it interfere in any way with
any right the Company or any Subsidiary or Affiliated Company would
otherwise have to terminate a Participant's employment or other service at
any time.
18. Adjustment of Shares; Effect of Certain Transactions. Notwithstanding
any other provision of the Plan to the contrary, in the event of any change in
the shares of Common Stock subject to the Plan or to any Stock Option or Stock
Appreciation Right granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, stock split, split-up,
split-off, spin-off, combination of shares, exchange of shares, issuance of
rights to subscribe, or change in capital structure), appropriate adjustments or
substitutions shall be made by the Committee or Board as to the (i) maximum
number of shares of Common Stock subject to the Plan, (ii) maximum number of
shares of Common Stock for which Stock Options or Stock Appreciation Rights may
be granted to any one employee, and (iii) the number of shares of Common Stock
and price per share subject to outstanding Stock Options or Stock Appreciation
Rights as shall be equitable to prevent dilution or enlargement of rights under
previously granted Stock Options or Stock Appreciation Rights. The determination
of the Committee or Board as to these matters shall be conclusive; provided,
however, that (i) any such adjustment with respect to an Incentive Stock Option
and any related Stock Appreciation Right shall comply with the rules of Section
424(a) of the Code, and (ii) in no event shall any adjustment be made which
would disqualify any Incentive Stock Option granted hereunder as an Incentive
Stock Option for purposes of Section 422 of the Code.
The Committee or Board may determine, in its discretion, that Stock Options
and Stock Appreciation Rights may become immediately exercisable upon the
occurrence of a transaction involving a "change in control" of the Company,
which transactions shall be as defined in the Grant Documents pursuant to which
Stock Options or Stock Appreciation Rights are granted. A "change in control"
transaction may include a merger or consolidation of the Company, a sale of all
or substantially all of its assets, or the acquisition of a significant
percentage of the voting power of the Company, or such other form of transaction
as the Committee or Board determines to constitute a change in control.
The Committee or Board, in its discretion, may also determine that, upon
the occurrence of such a "change in control" transaction, each Stock Option or
Stock Appreciation Right outstanding hereunder shall terminate within a
specified number of days after notice to the holder, and such holder shall
receive, with respect to each share of Common Stock subject to such Stock Option
or Stock Appreciation Right, an amount equal to the excess of the fair market
value of the shares immediately prior to the occurrence of such transaction
(which shall be no less than the value being paid for such shares pursuant to
such transaction) over the Exercise Price or Strike Price, as applicable, of
such Stock Option or Stock Appreciation Right; such amount shall be payable in
cash, in one or more of the kinds of property payable in such transaction, or in
a combination thereof, as the Committee or Board in its discretion shall
determine.
19. Use of Proceeds. Proceeds realized from the sale of Common Stock
pursuant to Stock Options granted hereunder shall constitute general funds of
the Company.
-8-
<PAGE>
(Side 1)
PROXY PROXY
ACXIOM CORPORATION
This Proxy Is Solicited on Behalf of The Board of Directors
for the Annual Meeting of Stockholders
to be Held on August 9, 2000
The undersigned hereby appoints Catherine L. Hughes and Robert S. Bloom 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 13, 2000, at the Annual Meeting of Stockholders to be held at the
DoubleTree Hotel, 424 West Markham Street, Little Rock, Arkansas on August 9,
2000, or any postponement 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 all proposals
FOR all nominees WITHHOLD
listed at right AUTHORITY
1. Election of [ ] [ ] (INSTRUCTION: To withhold
Directors authority to vote for an
individual nominee, strike a
line through the nominee's name
in the list below.)
Nominees: Dr. Ann H. Die
Charles D. Morgan
2. Adoption of new FOR AGAINST ABSTAIN
Stock Option Plan [ ] [ ] [ ]
3. In their discretion, the proxies are authorized to consider and vote upon
such other business that may come before the meeting or any postponement or
adjournment thereof.
SIGNATURE(S)_________________________ DATED:_____________________, 2000
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.
