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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number 0-21040
CAMBRIDGE TECHNOLOGY PARTNERS
(MASSACHUSETTS), INC.
(Exact name of registrant as specified in its charter)
DELAWARE 06-1320610
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
304 Vassar Street,
Cambridge, Massachusetts 02139
(Address of principal executive offices) (Zip Code)
(617) 374-9800
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date:
As of July 31, 1997, there were 49,863,200 shares of common stock
outstanding.
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CAMBRIDGE TECHNOLOGY PARTNERS (MASSACHUSETTS), INC.
TABLE OF CONTENTS
-----------------
PART I - FINANCIAL INFORMATION:
<TABLE>
<CAPTION>
Item 1: Financial Statements
<S> <C>
Consolidated Balance Sheets as of June 30, 1997 and
December 31, 1996 3
Consolidated Statements of Operations for the Three and
Six Months Ended June 30, 1997 and 1996 4
Consolidated Statements of Cash Flows for the Six
Months Ended June 30,1997 and 1996 5
Notes to Consolidated Financial Statements 6
Item 2: Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II - OTHER INFORMATION:
Item 4: Submission of Matters to a Vote of Security Holders 13
Item 6: Exhibits and Reports on Form 8-K 14
SIGNATURES 15
EXHIBIT INDEX 16
</TABLE>
2
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CAMBRIDGE TECHNOLOGY PARTNERS (MASSACHUSETTS), INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
<TABLE>
<CAPTION>
June 30, December 31,
---------- ------------
1997 1996
---------- ------------
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 36,071 $ 19,817
Investments held to maturity 14,470 12,727
Accounts receivable, less allowance of $1,285 and 1,085
at June 30, 1997 and December 31, 1996, respectively 76,475 55,540
Unbilled revenue on contracts 1,899 2,959
Deferred income taxes 161 161
Prepaid expenses and other current assets 17,406 14,195
-------- --------
Total current assets 146,482 105,399
Property and equipment, net 24,038 19,027
Other assets 5,147 3,462
Goodwill, net 2,113 2,512
-------- --------
Total assets $177,780 $130,400
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 15,157 $ 11,052
Accrued expenses 23,723 17,410
Deferred revenue 13,193 5,203
Income taxes payable 6,850 3,178
Obligations under capital leases, current 74 74
-------- --------
Total current liabilities 58,997 36,917
Obligations under capital leases 127 162
Deferred income taxes 471 471
Commitments and contingencies
Stockholders' equity:
Common stock, $.01 par value, authorized 120,000,000
shares; issued and outstanding 49,632,106 and 48,431,489
at June 30, 1997 and December 31, 1996, respectively 496 484
Additional paid-in capital 56,341 44,652
Retained earnings 63,123 47,970
Foreign currency translation adjustment (1,775) (256)
-------- --------
Total stockholders' equity 118,185 92,850
-------- --------
Total liabilities and stockholders' equity $177,780 $130,400
======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
3
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CAMBRIDGE TECHNOLOGY PARTNERS (MASSACHUSETTS), INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
----------------------------- -----------------------------
1997 1996 1997 1996
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Net revenues $ 83,292 $ 56,257 $154,410 $103,536
Costs and expenses:
Project personnel 37,916 26,152 69,754 48,548
General and administration 9,872 7,342 17,829 12,844
Sales and marketing 6,792 4,172 13,304 7,687
Other costs 15,891 10,685 29,107 19,054
-------- -------- -------- --------
Total operating expenses 70,471 48,351 129,994 88,133
-------- -------- -------- --------
Income from operations 12,821 7,906 24,416 15,403
Other income (expense):
Interest income 659 265 987 400
Interest expense (33) (17) (66) (34)
Foreign exchange (loss) (8) (4) (82) (16)
-------- -------- -------- --------
Income before income taxes 13,439 8,150 25,255 15,753
Provision for income taxes 5,376 3,285 10,102 6,301
-------- -------- -------- --------
Net income $ 8,063 $ 4,865 $ 15,153 $ 9,452
======== ======== ======== ========
Net income per share $ .15 $ .09 $ .28 $ .18
======== ======== ======== ========
Weighted average number of
common and common
equivalent shares outstanding 54,823 54,573 54,752 54,161
======== ======= ======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
4
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CAMBRIDGE TECHNOLOGY PARTNERS (MASSACHUSETTS), INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
-------------------------------
1997 1996
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 15,153 $ 9,452
Amounts that reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 3,440 2,572
Tax benefit from exercise of stock options 4,984 3,042
Provision for deferred income taxes - 315
Increase in accounts receivable (22,193) (9,452)
Decrease (increase) in unbilled revenue on contracts 885 (1,454)
Increase in prepaid expenses and other current assets (3,561) (4,397)
Increase in accounts payable 4,450 3,195
Increase in accrued expenses 6,935 1,525
Increase in deferred revenue 8,110 2,142
Increase (decrease) in income taxes payable 3,440 (141)
Other, net (1,671) (559)
-------- --------
Net cash provided by operating activities 19,972 6,240
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment (8,573) (5,891)
Purchase of investments held to maturity (9,255) (9,388)
Maturity of investments held to maturity 7,511 7,806
-------- --------
Net cash used for investing activities (10,317) (7,473)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net payments under credit arrangements - (325)
Obligations under capital leases (33) (118)
Dividend distribution - (15)
Proceeds from employee stock purchase plan 2,140 758
Proceeds from exercise of stock options 4,564 4,903
-------- --------
Net cash provided by financing activities 6,671 5,203
-------- --------
Effect of foreign exchange rate changes on cash (72) (221)
Net increase in cash and cash equivalents 16,254 3,749
Cash and cash equivalents at beginning of period 19,817 7,490
-------- --------
Cash and cash equivalents at end of period $ 36,071 $ 11,239
======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
5
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CAMBRIDGE TECHNOLOGY PARTNERS (MASSACHUSETTS), INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
A. Basis of Presentation
---------------------
The accompanying consolidated financial statements of Cambridge Technology
Partners (Massachusetts), Inc. (the "Company") include the accounts of the
Company and all of its wholly owned subsidiaries. All significant intercompany
transactions and balances have been eliminated in consolidation. In October and
November of 1996, the Company acquired all of the outstanding capital stock of
NatSoft S.A. (now Cambridge Switzerland) and Ramos & Associates, Inc. (now
Cambridge Enterprise Resource Solutions (ERS)). The acquisitions of Cambridge
Switzerland and ERS were accounted for using the pooling of interests method of
accounting. All prior period historical consolidated financial statements
presented herein have been restated to include the financial position, results
of operations, and cash flows of these acquired companies. Certain prior period
amounts have been reclassified to conform with current period presentation. In
the opinion of management, the consolidated financial statements reflect all
normal and recurring adjustments, which are necessary for a fair presentation of
the Company's financial position, results of operations, and cash flows as of
the dates and for the periods presented. The consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information. Consequently, these statements do not
include all the disclosures normally required by generally accepted accounting
principles for annual financial statements nor those normally made in the
Company's Annual Report on Form 10-K. Accordingly, reference should be made to
the Company's Annual Report on Form 10-K for additional disclosures, including a
summary of the Company's accounting policies, which have not changed. The
consolidated results of operations for the three and six months ended June 30,
1997, are not necessarily indicative of results for the full year.
B. Net Income Per Share
--------------------
Net income per share data is computed using the weighted average number of
common shares outstanding, the assumed exercise of stock options and warrants
(using the treasury stock method), and the assumed issuance of a stock dividend
at the beginning of each applicable period to effect a stock split. Net income
per share data also reflects, when applicable, the assumed issuance, at the
beginning of the period, of common stock of the Company and options to purchase
common stock of the Company relating to the acquisitions of Cambridge
Switzerland and ERS, which were accounted for using the pooling of interests
method of accounting. Primary and fully diluted income per share are the same
for each period presented.
C. Foreign Exchange Contracts
--------------------------
The Company maintains foreign exchange contracts to mitigate the risk of changes
in foreign exchange rates associated with intercompany balances. The contracts
relate primarily to European currencies and generally have maturities of one
month. The impact of exchange rate movements on contracts are recorded in other
income in the period in which the exchange rates change, generally consistent
with the term of the contract. As of June, 30, 1997, the Company held foreign
exchange forward contracts of approximately $2.4 million and there were no
related deferred gains and losses. The Company does not hold foreign exchange
contracts for trading purposes.
D. Accounting Pronouncements
-------------------------
In February 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 128, "Earnings Per Share"
(SFAS), which is effective for fiscal years ending after December 15, 1997,
including interim periods. SFAS 128 establishes standards for computing and
presenting earnings per share (EPS) and requires a dual presentation of basic
and dilutive EPS. The Company estimates that basic EPS would have been $.16
cents and $.31 cents for the three and six months ended June 30, 1997. Dilutive
EPS would not have been materially different from primary EPS presented in these
financial statements.
In July 1997, FASB issued SFAS 130 - Reporting Comprehensive Income. SFAS 130
establishes standards for reporting and displaying comprehensive income and its
components in a full set of general purpose financial statements. SFAS 130 is
effective for fiscal years beginning after
6
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December 15, 1997 with earlier application permitted. The Company is currently
assessing the impact of SFAS 130.
7
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CAMBRIDGE TECHNOLOGY PARTNERS (MASSACHUSETTS), INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Overview
Cambridge Technology Partners (Massachusetts), Inc. (the "Company") is an
international software consulting and integration firm which provides services
for the development and deployment of client/server distributed applications,
including Internet-based applications. Working primarily with a fixed
time/fixed fee price model, the Company's service offerings also include third-
party software implementation and management consulting services. The Company
continued to post strong operating results for the quarter ended June 30, 1997.
Net revenues for the second quarter of 1997 increased 48% to $83.3 million
compared to $56.3 million for the same period in 1996, reflecting increased
demand for the Company's services, in North America, Europe, and Latin America.
Net income for the quarter ended June 30, 1997, increased 66% to $8.1 million,
or $.15 per share compared to $4.9 million, or $.09 per share for the same
period in 1996.
The Company experienced increased demand for its services in both North America
and Europe for the second quarter of 1997, and it continued to focus on
developing and implementing integrated service offerings for the Company and its
1996 acquisitions of Ramos & Associates, Inc. (now Cambridge Enterprise Resource
Solutions (ERS)) and NatSoft S.A. (now Cambridge Switzerland). The Company
believes that the appropriate management and resources are in place and that
Cambridge Switzerland is strongly positioned for the third quarter of 1997 with
five major client engagements beginning this quarter. Total North American net
revenues grew 51% in the second quarter of 1997 compared to the same period in
1996. In order to support the increased demand for the Company's services,
total Company headcount increased to 2,263 at June 30, 1997, from 1,824 at
December 31, 1996. The Company continues to focus on hiring and assimilating
appropriate personnel to service its clients in the upcoming quarters and has
an aggregate of 177 new hires and prospective employee commitments in place for
the third quarter as of August 1, 1997.
During the second quarter of 1997, the Company continued to expand its business
in Latin America and Canada demonstrating increased acceptance of the Company's
service offerings in these markets. In addition, the Company opened an office
in Tokyo, and added additional offices in Reading and Manchester, England, and
East Brunswick, New Jersey expanding to 38 offices worldwide. In July, the
Company opened an office in Melbourne, Australia.
Results of Operations
Three Months Ended June 30, 1997, Compared to
Three Months Ended June 30, 1996
Net revenues increased 48% to $83.3 million in 1997 compared to $56.3 million in
1996 due principally to an increase in the volume of services delivered to new
clients, leveraging the existing client base by undertaking additional projects,
and increased demand for expanded service offerings, including strong growth in
the enterprise resource solutions service market. North American net revenues
remained strong, growing 51% to $65.9 million from $43.5 million in 1996.
International net revenues grew 37% to $17.4 million in 1997 from $12.7 million
in 1996. International net revenue results were negatively impacted by the
continuing strength of the U.S. dollar against international currencies, as
revenue growth increased by 48% to $18.8 million.
Project personnel costs consist principally of payroll and payroll related
expenses for personnel dedicated to client assignments and are directly related
to the level of client services being delivered. Project personnel costs were
$37.9 million and $26.2 million or 46% of net revenues for both periods.
8
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The dollar increase resulted from hiring of additional project personnel over
1996 staff levels to support the increased volume of services delivered to
clients and the related increase in payroll and payroll related expenses.
Worldwide project personnel headcount increased 46% to 1,921 employees at June
30, 1997, from 1,312 employees at June 30, 1996. The Company currently expects
to maintain project personnel costs as a percentage of net revenues at the same
level as fiscal year 1996 for the remainder of fiscal 1997, as new employees are
hired and assimilated to support its business growth. Additionally, the Company
currently does not anticipate significant increases in wage and benefit levels
for project personnel for the remainder of 1997.
General and administration expenses were $9.9 million or 12% of net revenues in
1997 compared to $7.3 million or 13% of net revenues in 1996. The percentage
decrease from 1996 is primarily due to the significant increase in net revenues
and the Company's continued focus on cost containment in this area. The dollar
increase reflects expenses associated with increased staff headcount to support
the Company's continued growth and geographic expansion in North America,
Europe, and Latin America. The Company currently expects to maintain general
and administration expenses as a percentage of net revenues at approximately the
current level for the remainder of 1997, while continuing to provide sufficient
support for the Company's global growth strategy.
Sales and marketing expenses were $6.8 million or 8% of net revenues in 1997
compared to $4.2 million or 7% in 1996. The dollar and percentage increase is
primarily attributable to an increase in payroll and payroll related expenses
associated with the increase in sales and marketing personnel from 89 at June
30, 1996, to 143 at June 30, 1997. This increased headcount enables the Company
to maximize potential client lead generation through its regional field
marketing staff with subsequent services coordinated by its sales personnel.
These increases also resulted from increased participation in trade shows and
marketing publications in order to provide existing and potential clients with
essential information about the Company and its existing and new service
offerings. The Company continued its investment in marketing initiatives and
educational and training programs that provide clients with opportunities to
learn about new technologies and client/server trends, such as seminars for
chief information officers, an Internet-based CIO information network, and
interactive management lab programs. The Company currently expects to maintain
sales and marketing expenses as a percentage of net revenues at approximately
the current level for the remainder of 1997.
Other costs consist of non-billable expenses directly incurred for client
projects and other associated business costs, including facilities costs and
related expenses, non-billable staff travel, and staff training. Other costs
were $15.9 million and $10.7 million or 19% of net revenues for both periods.
The dollar increase from 1996 resulted principally from increased facility,
travel, and employee training costs, including costs related to maintaining
newly opened and expanded offices in North America, Latin America, Asia, and
Europe as the Company continues to execute its global expansion strategy. As
the Company continues its headcount and facilities growth to support current and
anticipated increases in demand for its services, the Company currently expects
to maintain its other costs as a percentage of net revenues at approximately the
current level for the remainder of 1997.
Interest income increased to $659,000 in 1997 from $265,000 in 1996. This
increase reflects growth in cash and investment balances and higher average
interest rates obtained in 1997 compared to 1996. The Company's investments
consist primarily of tax exempt investment grade municipal bonds which mature
within one year from the date of purchase.
Foreign exchange loss of $8,000 in 1997 compared to $4,000 in 1996 related to
foreign currency exchange rate fluctuations associated with intercompany
balances. The dollar increase is primarily due to unfavorable fluctuations in
European currencies in the second quarter of 1997. The Company maintains monthly
foreign exchange forward contracts to hedge against the risk of changes in
foreign exchange rates associated with intercompany balances. This risk
coverage is dependent upon forecasted
9
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intercompany activities at the beginning of each month and the exchange rate
gains and losses are directly related to the accuracy of such forecasted
amounts. As of June 30, 1997, the Company held foreign exchange contracts of
approximately $2.4 million.
The Company's effective income tax rate in 1997 decreased to 40.0% from 40.3% in
1996. The Company's effective tax rate may vary from period to period based on
the Company's future expansion into areas of varying country, state, and local
statutory income tax rates.
Net income was $8.1 million or $.15 per share for the 1997 period as compared to
$4.9 million or $.09 per share for the same period in 1996. The Company
increased its net income per share despite a 1% increase in the number of common
and common equivalent shares outstanding, primarily due to stock options granted
to employees and shares issued under the employee stock purchase plan.
Six Months Ended June 30, 1997, Compared to
Six Months Ended June 30, 1996
Net revenues increased 49% to $154.4 million in 1997 compared to $103.5 million
in 1996 due principally to an increase in the volume of services delivered to
new clients, leveraging the existing client base by undertaking additional
projects, and increased demand for expanded service offerings, including strong
growth in the enterprise resource solutions service market. North American net
revenues remained strong, growing 56% to $122.4 million from $78.4 million in
1996. International net revenues grew 27% to $32.0 million in 1997 from $25.1
million in 1996. International net revenue results were negatively impacted by
the continuing strength of the U.S. dollar against international currencies, as
revenue growth increased by 38% to $34.5 million.
Project personnel costs consist principally of payroll and payroll related
expenses for personnel dedicated to client assignments and are directly related
to the level of client services being delivered. Project personnel costs were
$69.8 million or 45% of net revenues in 1997 compared to $48.5 million or 47% of
net revenues in 1996. The dollar increase resulted from hiring of additional
project personnel over 1996 staff levels to support the increased volume of
services delivered to clients and the related increase in payroll and payroll
related expenses. The decrease as a percentage of net revenues is primarily due
to improvements in project personnel costs in the Company's North American and
Latin American operations. The Company currently expects that its project
personnel costs will increase to approximately 46% of net revenues on a full
year basis.
General and administration expenses were $17.8 million and $12.8 million or 12%
of net revenues for both periods. The dollar increase reflects expenses
associated with increased staff headcount to support the Company's continued
growth and geographic expansion in North America, Europe, and Latin America.
Sales and marketing expenses were $13.3 million or 9% of net revenues in 1997
compared to $7.7 million or 7% in 1996. The dollar and percentage increase is
primarily attributable to an increase in payroll and payroll related expenses
associated with the increase in sales and marketing personnel from 89 at June
30, 1996, to 143 at June 30, 1997. This increased headcount enables the Company
to maximize potential client lead generation through its regional field
marketing staff with subsequent services coordinated by its sales personnel.
These increases also resulted from increased participation in trade shows and
marketing publications in order to provide existing and potential clients with
essential information about the Company and its existing and new service
offerings. The Company continued its investment in marketing initiatives and
educational and training programs that provide clients with opportunities to
learn about new technologies and client/server trends, such as seminars for
chief information officers, an Internet-based CIO information network, and
interactive management lab programs.
10
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Other costs consist of non-billable expenses directly incurred for client
projects and other associated business costs, including facilities costs and
related expenses, non-billable staff travel, and staff training. Other costs
were $29.1 million or 19% of net revenues in 1997 compared to $19.1 million or
18% of net revenues in 1996. The dollar and percentage increase from 1996
resulted principally from increased facility, travel, and employee training
costs, including costs related to maintaining newly opened and expanded offices
in North America, Latin America, Asia, and Europe as the Company continues to
execute its global expansion strategy.
Interest income increased to $987,000 in 1997 from $400,000 in 1996. This
increase is principally due to increased cash and investment balances and higher
average interest rates obtained in 1997 compared to 1996. The Company's
investments consist primarily of tax exempt investment grade municipal bonds
which mature within one year from the date of purchase.
Foreign exchange loss of $82,000 in 1997 compared to $16,000 in 1996 related to
foreign currency exchange rate fluctuations associated with intercompany
balances. The dollar increase is primarily due to unfavorable fluctuations in
European currencies in the first half of 1997 compared to the same period in
1996.
The Company's effective income tax rate in 1997 and 1996 was 40.0%. The
Company's effective tax rate may vary from period to period based on the
Company's future expansion into areas of varying country, state, and local
statutory income tax rates.
Net income was $15.2 million or $.28 per share for the 1997 period as compared
to $9.5 million or $.18 per share for the same period in 1996. The Company
increased its net income per share despite a 1% increase in the number of common
and common equivalent shares outstanding, primarily due to stock options granted
to employees and shares issued under the employee stock purchase plan.
Liquidity and Capital Resources
The Company continues to generate cash flow from operations to fund its business
growth and geographic expansion. In addition, the Company continues to operate
primarily debt-free and enhance its working capital position. Working capital
increased to $87.5 million at June 30, 1997, from $68.5 million at December 31,
1996. This increase was primarily due to increases in accounts receivable,
proceeds from the exercise of stock options, partially offset by cash used for
capital expenditures related to office expansions and computer equipment for new
employees. The Company's days sales in accounts receivable was 80 days during
the second quarter of 1997 compared to 79 days for the quarter ended December
31, 1996. The Company's treasury function, which is responsible for worldwide
collection and cash management efforts, continues to focus on its outstanding
receivables by involving its project management staff in the collection process.
Net cash provided by operating activities increased by $13.7 million to $20.0
million in 1997 from $6.2 million for the comparable period in 1996. The
significant increases in net income, tax benefit from the exercise of stock
options, and deferred revenue was partially offset by the increases in accounts
receivable and prepaid expenses and other current assets.
Capital expenditures of $8.6 million through June 30, 1997 were used principally
for computer equipment to support the Company's expansion activities, employee
workstations, and leasehold improvements related to the Company's growth of new
offices in North America, Latin America, Asia, and Europe. Capital expenditures
for 1997 are expected to approximate $20.0 million, principally for leasehold
improvements, personal computers, employee workstations, telecommunication and
video conferencing equipment, and other equipment to support both current and
anticipated levels of customer
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activities in North America, Latin America, Asia and Europe. In accordance with
the Company's strategic acquisition plans, the Company evaluates, on an ongoing
basis, potential acquisitions of companies or technologies that may complement
its business.
The Company maintains a $20.0 million uncollateralized revolving credit facility
(the "Facility") with Fleet National Bank ("Fleet Bank"). The Facility, which
expires on June 30, 1998, allows the Company to elect an interest rate of either
Fleet Bank's prime rate in effect from time to time or a eurodollar rate, as
defined, payable monthly in arrears commencing with the advance of funds. The
Facility requires, among other things, the Company to maintain certain financial
ratios including tangible net worth, debt to equity, and operating
profitability. At June 30, 1997 and December 31, 1996, the Company was in
compliance with these financial ratio requirements and no borrowings have been
made under the Facility.
The Company expects that cash flows from operations will provide the principal
source of future liquidity for the Company. However, the Company is currently
experiencing a period of growth which could place a strain on the Company's
financial resources. The Company currently anticipates that existing cash and
investment balances combined with cash generated from operations and amounts
available under the Facility will be sufficient, at least through 1998, to meet
the Company's short-term and long-term working capital requirements and to fund
the expansion of the Company's business. In order to meet client demand for the
Company's services in 1997, the Company expects to continue to increase its
professional staff and to open additional sales and operations offices in North
America, Latin America, Asia and Europe. Although the Company's plans to open
offices and hire personnel are driven in response to increased demand for the
Company's services, a portion of these expenses will be incurred in anticipation
of increased demand. Operating results and liquidity may be adversely affected
if market demand and revenues do not increase as anticipated. As the Company
expands its international operations, a number of factors, including market
acceptance of the Company's services, significant fluctuations in currency
exchange rates, and changes in general economic conditions could also adversely
affect future results and liquidity.
This Form 10-Q includes forward-looking statements which involve risks and
uncertainties, particularly as to net revenues and profits, capital
expenditures, future liquidity needs, working capital needs, and project
personnel costs, general and administrative expenses, sales and marketing
expenses, and other costs as a percentage of net revenues. The Company's actual
future results may differ significantly from those stated in any forward looking
statements. While it is impossible to identify each factor and event that could
affect the Company's results, variations in the Company's revenues and operating
results occur from time to time as a result of a number of factors, such as the
significance of client engagements commenced and completed during the period,
the number of working days in a period, employee hiring and utilization rates,
acceptance and profitability of the Company's services in new territories, and
integration of companies acquired. The timing of revenues is difficult to
forecast because the Company's sales cycle is relatively long in the case of new
clients and may depend on factors such as the size and scope of the assignments
and general economic conditions. Because a high percentage of the Company's
expenses are relatively fixed, a variation in the timing of the initiation or
the completion of client assignments, particularly at or near the end of any
quarter, can cause significant variations in operating results from quarter to
quarter.
12
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CAMBRIDGE TECHNOLOGY PARTNERS (MASSACHUSETTS), INC.
PART II - OTHER INFORMATION
ITEM 4 Submission of Matters to a Vote of Security Holders
- -----------------------------------------------------------
(a) The annual meeting of stockholders was held on May 14, 1997.
(b) Not applicable.
(c) A vote was proposed to (1) fix the number of directors at eight and to
elect a Board of Directors to serve for the ensuing year or until their
respective successors are duly elected and qualified; (2) consider and act
upon a proposal to approve an amendment to the Company's 1991 Stock Option
Plan (the "1991 Plan") to (A) increase the number of shares authorized
under such 1991 Plan to 19 million shares of common stock and (B) provide
for the transferability of stock options as authorized by the Management
Resource Committee of the Board of Directors; and (3) ratify the selection
of Coopers & Lybrand L.L.P. as independent accountants for the fiscal year
ending December 31, 1997.
The voting results were as follows:
<TABLE>
<CAPTION>
Votes Withheld Votes Broker
Votes for Against Authority Abstained Non-votes
---------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
(1) James K. Sims 44,201,062 N/A 141,667 N/A -
Warren V. Musser 44,236,748 N/A 105,981 N/A -
Jean C. Tempel 44,241,942 N/A 100,787 N/A -
Robert E. Keith, Jr. 44,251,222 N/A 91,507 N/A -
Jack L. Messman 44,250,472 N/A 92,257 N/A -
John W. Poduska, Sr., Ph.D. 44,243,942 N/A 98,787 N/A -
James I. Cash, Jr., Ph.D. 44,250,188 N/A 92,541 N/A -
James D. Robinson, III 44,247,797 N/A 94,932 N/A -
(2) 1991 Stock Option Plan 25,875,812 13,910,871 N/A 57,449 4,498,597
(3) Coopers & Lybrand L.L.P. 44,276,048 31,017 N/A 35,664 -
</TABLE>
(d) Not applicable
ITEM 6. Exhibits and Reports on Form 8-K
- -------------------------------------------
(a) Exhibits:
<TABLE>
<S> <C>
(10.1) Rights Agreement, dated as of June 23, 1997, by and between
Cambridge Technology Partners (Massachusetts), Inc. and
Chasemellon Shareholder Services, LLC, as Rights Agent
(incorporated herein by reference to
</TABLE>
13
<PAGE>
<TABLE>
<S> <C>
Exhibit 4.1 to the Company's Report on Form 8-K, dated June 23,
1997 and filed on July 1, 1997).
(10.2) Amended and Restated 1991 Stock Option Plan of the Company
(filed as part of this report).
(10.3) Form of Incentive Stock Option Agreement for Executive Officers
under the 1991 Stock Option Plan of the Company, as amended
(filed as part of this report).
(10.4) Form of Incentive Stock Option Agreement for Non-Executive
Officer Employees under the 1991 Stock Option Plan of the
Company, as amended (filed as part of this report).
(10.5) Form of Non-Qualified Stock Option Agreement for Executive
Officers, as amended (filed as part of this report).
(10.6) Form of Non-Qualified Stock Option Agreement for Non-Executive
Officer Employees, as amended (filed as part of this report).
(11.1) Statements Regarding Computation of Earnings Per Share (filed as
part of this report).
</TABLE>
(b) There were no reports on Form 8-K filed for the quarter ended June 30,
1997.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CAMBRIDGE TECHNOLOGY PARTNERS (MASSACHUSETTS), INC.
Date: August 13, 1997 By: /s/ Arthur M. Toscanini
-------------------------------
Arthur M. Toscanini
Executive Vice President and
Chief Financial Officer
15
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
10.1 Rights Agreement, dated as of June 23,
1997, by and between Cambridge Technology
Partners (Massachusetts), Inc. and
Chasemellon Shareholder Services, LLC, as
Rights Agent (incorporated herein by
reference to Exhibit 4.1 to the Company's
Report on Form 8-K dated June 23, 1997, and
filed on July 1, 1997).
10.2 Amended and Restated 1991 Stock Option Plan
of the Company (filed as part of this
report).
10.3 Form of Incentive Stock Option Agreement
for Executive Officers under the 1991 Stock
Option Plan of the Company, as amended
(filed as part of this report).
10.4 Form of Incentive Stock Option Agreement for
Non-Executive Officer Employees under the 1991
Stock Option Plan of the Company, as amended
(filed as part of this report).
10.5 Form of Non-Qualified Stock Option Agreement
for Executive Officers, as amended (filed as
part of this report).
10.6 Form of Non-Qualified Stock Option Agreement
for Non-Executive Officer Employees, as amended
(filed as part of this report).
11.1 Statements Regarding Computation of
Earnings Per Share (filed as part of this
report).
</TABLE>
- -----------------------------
16
<PAGE>
EXHIBIT 10.2
CAMBRIDGE TECHNOLOGY PARTNERS (MASSACHUSETTS), INC.
1991 STOCK OPTION PLAN
1. PURPOSE
The name of this plan is the Cambridge Technology Partners (Massachusetts),
Inc. 1991 Stock Option Plan (the "Plan"). The purpose of the Plan is to
promote the long-term success of Cambridge Technology Partners
(Massachusetts), Inc., a Delaware corporation (the "Company"), by providing
financial incentives to the officers, employees, directors and consultants of
the Company who are in positions to make significant contributions toward such
success. The Plan is designed to attract individuals of outstanding ability to
become or to continue as officers, employees, directors or consultants of the
Company, to enable such individuals to acquire or increase proprietary
interests in the Company through the ownership of shares of Common Stock of
the Company, and to render superior performance during their associations with
the Company. The Company intends that this purpose will be effected by the
granting pursuant to the Plan of options for shares of the Company's Common
Stock (hereinafter referred to as "Options") that either do meet the
definition of "incentive stock options" ("Incentive Options") in Section
422(b) of the Internal Revenue Code of 1986, as amended (the "Code"), or do
not meet such definition ("Nonqualified Options").
References herein to "the Company" shall include any successor corporation
to the Company and also any subsidiary of the Company (such that, if the
Company has one or more subsidiaries, individuals who are officers or key
employees thereof are eligible to be granted Options under the Plan).
2. OPTIONS TO BE GRANTED AND ADMINISTRATION
(a) Options granted under the Plan may be either Incentive Options or
Nonqualified Options. An Option shall not be considered to be an Incentive
Option unless designated as such at the time of grant or in the option
agreement relating to such option, and any option that is not so designated
(or even if so designated fails to meet the definition of "incentive stock
option" under Section 422(b) of the Code) shall be a Nonqualified Option.
Unless otherwise specified in a particular grant, Options granted under the
Plan are intended to qualify as performance-based compensation to the extent
required under Section 162(m) of the Code and the regulations thereunder.
(b) The Plan shall be administered by a committee (the "Option Committee")
of not less than two members of the Board of Directors of the Company selected
by and from the members of the Company's Board of Directors in accordance with
the provisions of the Company's By-Laws relating to the appointment of
Committees; provided, however, that the Plan shall be administered so that
Options granted under the Plan will qualify for the benefits provided by Rule
16b-3 (or any successor rule to the same effect) under the Securities Exchange
Act of 1934 and by Section 162(m) of the Code (or any successor provision to
the same effect) and the applicable regulations thereunder. Subject to the
provisions of this Plan, the Option Committee shall exercise all powers under
the Plan, unless and until other action is taken by the Company's Board of
Directors. Action by the Option Committee shall require the affirmative vote
of a majority of all its members, and a further vote of the Company's Board of
Directors shall be required for the approval of any and all grants of Options
recommended by the Option Committee.
<PAGE>
(c) Subject to the terms and conditions of the Plan, the Option Committee
shall have the power:
(i) To determine from time to time the Options to be granted to eligible
persons under the Plan, and to prescribe the terms and provisions (which
need not be identical) of each Option granted under the Plan to such
persons, and to recommend the grant of Options to the Board of Directors of
the Company for its approval;
(ii) To construe and interpret the Plan and Options granted thereunder
and to establish, amend, and revoke rules and regulations for
administration of the Plan. In this connection, the Option Committee may
correct any defect or supply any omission, or reconcile any inconsistency
in the Plan, or in any option agreement, in the manner and to the extent it
shall deem necessary or expedient to make the Plan fully effective. All
decisions and determinations by the Option Committee and, with respect to
the grant of Options, by the Board of Directors of the Company in the
exercise of this power shall be final and binding upon the Company and all
optionees; and
(iii) Generally, to exercise such powers and to perform such acts as are
deemed necessary or expedient to promote the best interests of the Company
with respect to the Plan.
3. STOCK SUBJECT TO THE PLAN
(a) The stock subject to the Options granted under the Plan shall be shares
of the Company's authorized but unissued common stock, par value $.01 per
share (the "Common Stock"), or previously issued shares of Common Stock that
have been reacquired and reserved by the Company's Board of Directors for
resale upon exercise of Options granted under the Plan. The total number of
shares of Common Stock that may be issued pursuant to Options granted under
the Plan shall not exceed an aggregate of 19,000,000 shares of Common Stock.
Such number shall be subject to adjustment as provided in Section 9 hereof.
(b) Whenever any outstanding Option under the Plan expires, is cancelled or
is otherwise terminated (other than by exercise), the shares of Common Stock
allocable to the unexercised portion of such Option may again be the subject
of Options under the Plan.
(c) No employee of the Company may be granted Options to acquire, in the
aggregate, more than 3,000,000 shares of Common Stock under the Plan. If any
Option granted under the Plan shall expire or terminate for any reason without
having been exercised in full or shall cease for any reason to be exercisable
in whole or in part, the unpurchased shares subject to such Option shall be
included in the determination of the aggregate number of shares of Common
Stock deemed to have been granted to such employee under the Plan.
4. STOCK OPTION GRANTS
(a) Incentive Options may be granted only to persons who are employees of
the Company, including members of the Board of Directors who are also
employees of the Company. Nonqualified Options may be granted to officers and
employees of the Company, to directors of the Company, whether or not they are
also employees of the Company, to consultants to the Company who are not
employees, and to such other persons as the Option Committee shall select from
time to time. The determination of the persons eligible to receive grants, the
number of shares of Common Stock for which Options are granted and the
determination of whether an Option shall be an Incentive Option or a
Nonqualified Option shall be made by the Option Committee, subject to the
approval of the Board of Directors of the Company.
<PAGE>
(b) No person shall be eligible to receive any Incentive Option under the
Plan if at the date of grant such person beneficially owns (or would own upon
the exercise of any Options held, or which upon such grant would be held, by
such person) in excess of ten percent (10%) of the outstanding shares of
Common Stock, unless (i) the exercise price is at least 110% of the fair
market value (determined as provided in Section 5(c) hereof at the time the
Incentive Option is granted) of the shares of Common Stock subject to the
Option and (ii) such Option by its terms is not exercisable after the
expiration of five (5) years from the date such Option is granted.
(c) The aggregate fair market value (determined as provided in Section 5(c)
hereof at the time the Incentive Option is granted) of shares of Common Stock
with respect to which any Incentive Option is exercisable for the first time
by the optionee during any calendar year (plus the value of any other such
shares of Common Stock first purchasable in such year under any other Option
under the Plan or any other plan of the Company or any parent or subsidiary
thereof intended to be an "incentive stock option" under Section 422 of the
Code) shall not exceed $100,000, and no person shall be eligible to receive an
Incentive Option for shares of Common Stock in excess of such limitation.
5. TERMS OF THE OPTION AGREEMENTS
Each option agreement for Options granted under the Plan shall contain such
provisions as the Option Committee shall from time to time deem appropriate.
Option agreements need not be identical, but each option agreement by
appropriate language, or by reference to this Section 5 of the Plan, shall
include the substance of all of the following provisions:
(a) Expiration. Each Option shall expire on the date specified in the option
agreement, which date shall not be later than the tenth anniversary of the
date on which the Option was granted. Each Incentive Option shall in any event
expire not later than three months after the optionee is for any reason no
longer employed by the Company, except (i) if such termination of employment
results from optionee's disability (within the meaning of Section 22(e)(3) of
the Code), an Option may be exercised within twelve months thereafter, whether
or not exercisable at the time of such termination, and (ii) if such
termination of employment results from the optionee's death, an Option may be
exercised by his executors or administrators within twenty-four months
thereafter, whether or not exercisable at the time of such termination.
(b) Exercise. Unless the Option Committee shall otherwise determine at the
time an Option is granted, each Option shall become vested and exercisable
with respect to 25% of the shares of Common Stock subject to such Option as of
the first anniversary of the date of grant and, thereafter, with respect to an
additional 2.083% of the shares subject to such Option as of the same day (or
the immediately preceding day if a month does not have such day) of each
calendar month thereafter, so that such Option shall be exercisable in full as
of the fourth anniversary of the date of grant. Unless otherwise provided in
the vote of either the Option Committee or the Board of Directors of the
Company, for this purpose the date of the grant of an Option shall be the date
on which the Board of Directors approves the grant. To the extent not
exercised, vested installments shall accumulate and be exercisable in whole or
in part at any time after becoming exercisable, but not later than the date
the Option expires or terminates.
(c) Purchase Price. Unless the Option Committee shall otherwise determine at
the time the Option is granted, the purchase price per share of Common Stock
under each Option shall be not less than the fair market value of a share of
Common Stock on the date the Option is granted. For the purposes of the Plan,
the fair market value of the shares of Common Stock shall be determined by the
Option Committee with the approval of the Board of Directors of the Company.
<PAGE>
6. LIMITATION ON RIGHTS OF OPTIONEES
(a) Transferability of Options. Except as set forth below, (i) no Option
shall be transferable by any optionee other than by will or by the laws of
descent and distribution and (ii) Options may be exercised during the
optionee's lifetime only by the optionee (or, if the optionee is disabled and
so long as the Option remains exercisable, by the optionee's duly appointed
guardian or other legal representative). However, the Committee may, in its
discretion, permit an option recipient to transfer the option to family
members or other persons for estate planning purposes. In connection with
permitting transfers, the Committee may require that (i) no consideration
given or payment made for any such transfer, (ii) the stock option agreement
pursuant to which such options are granted must be approved by the Committee,
and must expressly provide for transferability at the date of grant in a
manner consistent with the 1991 Plan, and (iii) subsequent transfers of the
transferred option shall be prohibited except those in accordance with this
Section. Following any such transfer, any such options shall continue to be
subject to the same terms and conditions as were applicable immediately prior
to transfer, provided that for purposes of Sections 4, 5, 6(b) - (d), 7, 8, 9
and 12 hereof the term "optionee" shall be deemed to refer to the transferee.
The events of termination of employment set forth in an optionee's option
agreement shall continue to be applied with respect to the original optionee,
following which the options shall be exercisable by the transferee only to the
extent, and for the periods specified herein.
(b) No Shareholder Rights. No optionee shall be deemed for any purpose to be
the owner of any shares of Common Stock subject to any Option unless and until
(i) the Option shall have been exercised pursuant to the terms thereof, (ii)
the Company shall have issued and delivered the shares to the optionee, and
(iii) the optionee's name shall have been entered as a shareholder of record
on the books of the Company. Thereupon, the optionee shall have full voting,
dividend and other ownership rights with respect to such shares of Common
Stock.
(c) No Employment Rights. Neither the Plan nor the grant of any Option
thereunder shall be deemed to confer upon any optionee any rights of
employment with the Company, including without limitation any right to
continue in the employ of the Company, or affect the right of the Company to
terminate the employment of an optionee at any time, with or without cause.
(d) Authority of Company. The existence of the Options shall not affect: the
right or power of the Company or its shareholders to make adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business; any issue of bonds, debentures, preferred or prior
preference stock affecting the Common Stock or the rights thereof; the
dissolution or liquidation of the Company, or sale or transfer of any part of
its assets or business; or any other act, whether of a similar character or
otherwise.
7. METHOD OF EXERCISE; PAYMENT OF PURCHASE PRICE
(a) Notice of Exercise. Any Option granted under the Plan may be exercised
by the optionee by delivering to the Chief Financial Officer of the Company
(or such other representative of the Company as the Option Committee may
designate) on any business day a written notice specifying the number (which
shall be consistent with the provisions of Section 5(b) hereof) of shares of
Common Stock the optionee then desires to purchase (the "Notice").
(b) Payment. Payment for the shares of Common Stock purchased pursuant to
the exercise of an Option shall be made either (i) in cash or by check
representing good funds in an amount equal to the option price for the number
of shares of Common Stock specified in the Notice (the "Total Option Price"),
or (ii) if authorized by the applicable option agreement, by the valid and
properly completed transfer to the Company of a number of shares of Common
Stock having a fair market value, determined as provided in Section 5(c)
hereof, equal to or
<PAGE>
less than the Total Option Price, plus cash or check in an amount equal to the
excess, if any, of the Total Option Price over the fair market value of such
shares of Common Stock.
8. NOTICE OF DISPOSITION; WITHHOLDING; ESCROW
An optionee shall immediately notify the Company in writing of any sale,
transfer, assignment or other disposition (or action constituting a
disqualifying disposition within the meaning of Section 421 of the Code) of
any shares of Common Stock acquired through exercise of an Incentive Option,
within two (2) years after the grant of such Incentive Option or within one
(1) year after the acquisition of such shares of Common Stock, setting forth
the date and manner of disposition, the number of shares of Common Stock
disposed of and the price at which such shares of Common Stock were disposed
of. The Company shall be entitled to withhold from any compensation or other
payments then or thereafter due to the optionee such amounts as may be
necessary to satisfy any withholding requirements of federal or state law or
regulation and, further, to collect from the optionee any additional amounts
which may be required for such purpose as a condition of delivering the shares
of Common Stock acquired pursuant to an Option. The Option Committee may, in
its discretion, require shares of Common Stock acquired by an optionee upon
exercise of an Incentive Option to be held in an escrow arrangement for the
purpose of enabling compliance with this Section 8.
9. ADJUSTMENT UPON CHANGES IN CAPITALIZATION.
(a) Events for Adjusting Number and Price. If the shares of Common Stock as
a whole are changed into or exchanged for a different number or kind of shares
or securities of the Company, whether through reorganization,
recapitalization, reclassification, stock dividend or other distribution,
split, combination of interests, exchange of interests, change in corporate
structure or the like, an appropriate and proportionate adjustment shall be
made in the number and kind of shares of Common Stock subject to the Plan and
in the number, kind, and per share exercise price of shares of Common Stock
subject to unexercised Options or portions thereof granted prior to any such
change. In the event of any such adjustment in an outstanding Option, the
optionee thereafter shall have the right to purchase the number of shares of
Common Stock under such Option at the per share price, as so adjusted, which
the optionee could purchase at the total purchase price applicable to the
Option immediately prior to such adjustment.
(b) Option Committee and Board Action. Adjustments under this Section 9
shall be determined by the Option Committee and approved and ratified by the
Board of Directors of the Company, and such determinations shall be
conclusive. The Option Committee shall have the discretion, and power in any
such event to determine and to make effective provision for acceleration of
the time or times at which any Option or portion thereof shall become
exercisable. No fractional interests shall be issued under the Plan on account
of any adjustment specified above.
10. AMENDMENT OR TERMINATION OF PLAN.
The Board of Directors of the Company may modify, revise or terminate this
Plan at any time and from time to time, except that, other than as provided in
Section 9 hereof, no amendment shall be effective unless approved by the
stockholders of the Company in accordance with applicable law and regulations
at an annual or special meeting held within twelve (12) months before or after
the date of adoption of such amendment, where such amendment will:
(a) increase the number of shares of Common Stock as to which Options may
be granted under the Plan;
<PAGE>
(b) change in substance Section 4 hereof relating to eligibility to
participate in the Plan;
(c) change the minimum purchase price of Incentive Options to be granted
under the Plan;
(d) increase the maximum term of Options provided herein; or
(e) otherwise materially increase the benefits accruing to participants
under the Plan.
Except as provided in Section 9 hereof, rights and obligations under any
Option granted before any amendment of the Plan shall not be altered or
impaired by such amendment, except with the consent of the optionee.
11. EFFECTIVE DATE; NONEXCLUSIVITY
(a) Effective Date. This Plan will be deemed to have been adopted and to be
effective when approved by the stockholders of the Company in compliance with
Temporary Regulation (S)14a-422A-2 under the Code.
(b) Nonexclusivity. The adoption of the Plan shall not be construed as
creating any limitations on the power of the Board of Directors of the Company
to adopt such other incentive arrangements as it may deem desirable,
including, without limitation, the granting of options otherwise than under
the Plan, and such arrangements may be either applicable generally or only in
specific cases.
12. GOVERNMENT AND OTHER REGULATIONS; GOVERNING LAW
(a) Securities Laws. If in the opinion of legal counsel for the Company the
issuance or sale of any shares of Common Stock pursuant to the exercise of an
Option would not be lawful for any reason, including without limitation the
inability of the Company to obtain from any governmental authority or
regulatory body having jurisdiction the authority deemed by such counsel to be
necessary to such issuance or sale, the Company shall not be obligated to
issue or sell any shares of Common Stock pursuant to the exercise of an Option
to an Optionee or any other authorized person unless a registration statement
that complies with the provisions of the Securities Act of 1933, as amended,
(the "Act") in respect of such shares of Common Stock is in effect at the time
thereof, or other appropriate action has been taken under and pursuant to the
terms and provisions of the Act, or the Company receives evidence satisfactory
to such counsel that the issuance and sale of such shares of Common Stock, in
the absence of an effective registration statement or other appropriate
action, would not constitute a violation of the Act or any applicable state
securities law. The Company is in no event obligated to register any such
shares of Common Stock, to comply with any exemption from registration
requirements or to take any other action which may be required in order to
permit, or to remedy or remove any prohibition or limitation on, the issuance
or sale of such shares of Common Stock of any optionee or other authorized
person.
(b) Withholding Taxes. As a condition of exercise of an Option, the Company
may, in its sole discretion, withhold or require the optionee to pay or
reimburse the Company for any taxes which the Company determines are required
to be withheld in connection with the grant or any exercise of an Option.
(c) Governing Law. The Plan shall be interpreted such that all options
hereunder intended to be Incentive Options shall meet the requirements
therefor set forth in Section 422 of the Code (and any applicable regulations,
rulings or judicial decisions interpreting said Section). Otherwise, the Plan
shall be governed by and interpreted under the laws of the State of Delaware.
13. TERMINATION OF GRANTING OF OPTIONS UNDER THE PLAN
No Option may be granted under the Plan after the tenth anniversary of the
effective date of the Plan.
<PAGE>
EXHIBIT 10.3
Cambridge Technology Partners (Massachusetts), Inc.
1991 Stock Option Plan
Incentive Stock Option Agreement
Name of Optionee: [Executive Officer]
Number of Option Shares:
Option Exercise Price: $
Grant Date:
Vesting Start Date:
Pursuant to the Cambridge Technology Partners (Massachusetts), Inc. 1991
Stock Option Plan, as amended (the "Plan"), Cambridge Technology Partners
(Massachusetts), Inc., a Delaware corporation (the "Company"), hereby grants to
the Optionee named above an Option to purchase all or any part of the number of
shares of Common Stock, $.01 par value (the "Common Stock"), of the Company
specified above (the "Option Shares") at the Option Exercise Price per Option
Share specified above, subject to the terms and conditions set forth herein and
in the Plan. This Option is intended to qualify and shall be treated as an
"incentive stock option" under Section 422(b) of the Internal Revenue Code of
1986, as amended from time to time (the "Code").
1. Vesting Schedule. No portion of this Option may be exercised until the
----------------
date on which such portion shall have vested. Except as set forth herein, and
subject to the determination of the Company in its sole discretion to accelerate
the vesting schedule hereunder due to other circumstances and subject to a
reduction in the percentage of Option Shares vesting each month in the event
that the Optionee becomes employed on less than a full-time basis (such new
percentage shall be determined by the Company at the time the Optionee becomes
employed on less than a full time basis and shall be set forth in a replacement
non-qualified option agreement to be executed at that time; provided, however,
that in any event all Option Shares shall vest no later than 60 days prior to
the Expiration Date applicable to such Option Shares as set forth in Paragraph 3
herein), this Option shall be vested and exercisable with respect to the
following percentage of the total number of Option Shares on the following dates
determined with respect to the Vesting Start Date set forth above:
<TABLE>
<CAPTION>
Cumulative
Time After Percentage of Percentage of
Vesting Start Date Option Shares Shares Exercisable
------------------ ------------- ------------------
<S> <C> <C>
1 year 25.000% 25.000%
13 months 2.083% 27.083%
Each additional month
thereafter up to
and including
the 47th month 2.083%* 2.083%*
48th month 2.083% 100.000%
</TABLE>
- ---------------------
* Additional 2.083% per month.
<PAGE>
2. Exercise of Option.
------------------
(a) Optionee may exercise only vested portions of this Option and
only in the following manner. From time to time prior to the earlier to occur
of (i) the termination hereof in accordance with the provisions of this Option,
or (ii) the Expiration Date (as set forth in Paragraph 3 herein) with respect to
a given portion of this Option, Optionee may give written notice to the Company
of his or her election to purchase some or all of the Option Shares for which
this Option may be exercised at the time of such notice. Said notice shall
specify the number of Option Shares to be purchased and shall be accompanied (i)
by payment therefor in cash and (ii) by such agreement, statement or other
evidence as the Company may require in order to satisfy itself that the issuance
of the Option Shares being purchased pursuant to such exercise and any
subsequent resale thereof will be in compliance with applicable laws and
regulations, including without limitation all applicable federal and state
securities laws and regulations.
(b) Certificates for the Option Shares so purchased will be issued to
Optionee upon compliance to the satisfaction of the Company with all
requirements under applicable laws or regulations in connection with such
issuance, including without limitation, if said Option Shares have not been
registered under the Securities Act of 1933, as amended (the "Act"), receipt of
a representation from Optionee upon each exercise of this Option that Optionee
is purchasing the Option Shares for his or her own account and not with a view
to any resale or distribution thereof, the legending of any certificate
representing said Option Shares, and the imposition of a stop transfer order
with respect thereto, to prevent a resale or distribution in violation of
federal or state securities laws. Until Optionee shall have complied with the
requirements hereof and of the Plan, the Company shall be under no obligation to
issue the Option Shares subject to this Option, and the determination of the
Option Committee (as defined in the Plan) as to such compliance shall be final
and binding on Optionee. Optionee shall not be deemed for any purpose to be the
owner of any Option Shares subject to this Option until such Option Shares shall
have been issued in accordance with the foregoing provisions.
(c) Notwithstanding any other provision hereof or of the Plan, no
portion of this Option shall be exercisable (i) after its termination in
accordance with the provisions hereof, (ii) after the Expiration Date applicable
thereto (as set forth in Paragraph 3 herein), or (iii) at any time unless all
necessary regulatory or other approvals have been received.
(d) To the extent that this Option is exercised for a number of Option
Shares which is less than the full number of Option Shares for which this Option
is then exercisable, it shall be deemed to have been exercised first with
respect to the maximum number of First-Year Option Shares for which this Option
has not been previously exercised, then the maximum
<PAGE>
number of Second-Year Option Shares for which this Option has not been
previously exercised, then the maximum number of Third-Year Option Shares for
which this Option has not been previously exercised and then the maximum number
of Fourth-Year Option Shares for which this Option has not been previously
exercised, including for purposes of determining which Option Shares hereunder
have expired in accordance with Paragraph 3 herein.
3. Expiration Date of Option and Underlying Option Shares. For purposes of
------------------------------------------------------
this Option, "Expiration Date" shall mean:
(a) with respect to the portion of this Option (and the underlying
number of Option Shares with respect to such portion) which vests one year after
the Vesting Start Date (such Option Shares being herein referred to as the
"First-Year Option Shares"), the date which is the fifth anniversary of the
Vesting Start Date;
(b) with respect to the portion of this Option (and the underlying
number of Option Shares with respect to such portion, but specifically excluding
the First-Year Option Shares) which vests during the period beginning 13 months
after the Vesting Start Date and ending 24 months after the Vesting Start Date
(such Option Shares being herein referred to as the "Second-Year Option
Shares"), the date which is the sixth anniversary of the Vesting Start Date;
(c) with respect to the portion of this Option (and the underlying
number of Option Shares with respect to such portion, but specifically excluding
the First-Year Option Shares and the Second-Year Option Shares) which vests
during the period beginning 25 months after the Vesting Start Date and ending 36
months after the Vesting Start Date (such Option Shares being herein referred to
as the "Third-Year Option Shares"), the date which is the seventh anniversary of
the Vesting Start Date; and
(d) with respect to the portion of this Option (and the underlying
number of Option Shares with respect to such portion, but specifically excluding
the First-Year Option Shares, Second-Year Option Shares and Third-Year Option
Shares) which vests during the period beginning 37 months after the Vesting
Start Date and ending 48 months after the Vesting Start Date (such Option Shares
being herein referred to as the "Fourth-Year Option Shares"), the date which is
the eighth anniversary of the Vesting Start Date.
4. Termination of Employment. This Option, as to any unexercised portion
-------------------------
hereof, shall terminate on the date three (3) months after the date on which
Optionee is no longer employed by the Company or a subsidiary as defined in the
Code; provided, however, that (a) if such termination of employment results from
Optionee's permanent and total disability as defined in Section 22(e)(3) of the
Code, this Option may be exercised, whether or not exercisable at the time of
such termination, until the date twelve (12) months after such termination, or
until the Expiration Date (as set forth in Paragraph 3 herein), whichever first
occurs, and (b) if such termination of employment results from Optionee's death,
this Option may be exercised, whether or not exercisable at the time of such
termination, by the Optionee's executors or administrators within twenty-four
(24) months thereafter, or until the Expiration Date (as set forth in Paragraph
3 herein), whichever first occurs. No Option will confer upon Optionee any
right to continued
<PAGE>
employment by the Company or any subsidiary of the Company, nor will it
interfere in any way with Optionee's right or the Company's or any such
subsidiary's right to terminate, or otherwise modify the terms of, Optionee's
employment at any time.
5. Incorporation of Plan. Notwithstanding anything herein to the
---------------------
contrary, this Option shall be subject to and governed by all the terms and
conditions of the Plan.
6. Transferability. Except as otherwise permitted in the Plan, this
---------------
Agreement is personal to Optionee, is non-assignable and is not transferable in
any manner, by operation of law or otherwise, other than by will or by the laws
of descent and distribution, and is exercisable, during Optionee's lifetime,
only by Optionee.
7. Adjustment Upon Changes in Capitalization.
-----------------------------------------
(a) If the Common Stock as a whole is changed into or exchanged for a
different number or kind of interests or securities of the Company, whether
through reorganization, recapitalization, reclassification, stock dividend or
other distribution, split, combination or interests, exchange of interests,
change in corporate structure or the like, an appropriate and proportionate
adjustment shall be made in the number and kind of Option Shares subject to this
Option. In addition, upon such change, the exercise price of shares of Common
Stock or other securities subject to any unexercised portions of this Optionee
thereafter shall have the right to purchase the number and kind of Option Shares
(as so adjusted) under this Option at an Exercise Price (as so adjusted) which
Optionee could purchase for the total purchase price applicable to the
unexercised portion of this Option immediately prior to such adjustment,
provided that any fractional shares resulting from such calculation shall be
eliminated.
(b) Adjustments under this Paragraph 7 shall be made by the Option
Committee of the Company, whose determination shall be conclusive.
8. Effect of Certain Transactions. If (i) the Company is to be merged
------------------------------
into another entity, or if one or more entities is to be merged into the Company
or if there is to be a consolidation of the Company and one or more entities
and, in any such case, the shares of Common Stock are to be converted into cash,
securities or other property other than shares of Common Stock (an
"Acquisition"), or (ii) if the Company is to be liquidated, or is to sell or
otherwise dispose of substantially all of its assets to another entity while
unexercised Options remain outstanding under the Plan (a "Sale"), then: (a) the
time for exercise of any unexercised and unexpired portion of this Option,
including the then unvested portion of this Option, shall be accelerated to
immediately prior to the consummation of such Acquisition or Sale, and (b) this
Option shall terminate immediately after the effective date of such Acquisition
or Sale; provided, however, that the foregoing clauses (a) and (b) shall not
apply to any transaction in which the former stockholders of the Company
immediately after such transaction hold or receive by reason of their prior
ownership of shares of capital stock of the Company shares of capital stock of
the resulting or surviving corporation constituting a majority of the voting
power of all outstanding stock of such resulting or successor corporation.
<PAGE>
9. Tax Withholding. The Optionee shall, not later than the date as of
---------------
which the exercise of this Option or disposition of Option Shares becomes a
taxable event for Federal income tax purposes, pay to the Company or make
arrangements satisfactory to the Option Committee for payment of any Federal,
state, and local taxes required by law to be withheld on account of such taxable
event.
10. Notice to Company of Disqualifying Disposition. If this Option is
----------------------------------------------
intended to be an incentive stock option under the Plan as set forth on the
first page hereof, by its acceptance hereof, each Optionee agrees to notify the
Company in writing immediately after he makes a Disqualifying Disposition (as
described in Sections 421, 422 and 424 of the Code and regulations thereunder)
of any stock acquired pursuant to the exercise of incentive stock options
granted under the Plan. A Disqualifying Disposition is generally any
disposition occurring within two years of the date the incentive stock option
was granted or within one year of the date the incentive stock option was
exercised, whichever period ends later.
11. Representations. By acceptance of this Option, the Optionee agrees,
---------------
acknowledges and understands that a purchase of shares under this Option will
not be made with a view to their distribution, as that term is used in the Act
unless, in the opinion of counsel to the Company such distribution is in
compliance with or exempt from the registration and prospectus requirements of
the Act, and the Employee agrees to sign a certificate to such effect at the
time of exercising this option and agrees that the certificate for the shares so
purchased may be inscribed with a legend to ensure compliance with the Act.
12. Miscellaneous. Notice hereunder shall be mailed or delivered to the
-------------
Company at its principal place of business, and shall be delivered to Optionee
in person or mailed or delivered to Optionee at the address set forth below, or
in either case at such other address as one party may subsequently furnish to
the other party in writing.
Std. Exec. ISO Option Agrmt.
Rev. 1.1
8/97
<PAGE>
EXHIBIT 10.4
Cambridge Technology Partners (Massachusetts), Inc.
1991 Stock Option Plan
Incentive Stock Option Agreement
Name of Optionee: [Employee]
Number of Option Shares:
Option Exercise Price: $
Grant Date:
Vesting Start Date:
Pursuant to the Cambridge Technology Partners (Massachusetts), Inc. 1991
Stock Option Plan, as amended (the "Plan"), Cambridge Technology Partners
(Massachusetts), Inc., a Delaware corporation (the "Company"), hereby grants to
the Optionee named above an Option to purchase all or any part of the number of
shares of Common Stock, $.01 par value (the "Common Stock"), of the Company
specified above (the "Option Shares") at the Option Exercise Price per Option
Share specified above, subject to the terms and conditions set forth herein and
in the Plan. This Option is intended to qualify and shall be treated as an
"incentive stock option" under Section 422(b) of the Internal Revenue Code of
1986, as amended from time to time (the "Code").
1. Vesting Schedule. No portion of this Option may be exercised until the
----------------
date on which such portion shall have vested. Except as set forth herein, and
subject to the determination of the Company in its sole discretion to accelerate
the vesting schedule hereunder due to other circumstances and subject to a
reduction in the percentage of Option Shares vesting each month in the event
that the Optionee becomes employed on less than a full-time basis (such new
percentage shall be determined by the Company at the time the Optionee becomes
employed on less than a full time basis and shall be set forth in a replacement
non-qualified option agreement to be executed at that time; provided, however,
that in any event all Option Shares shall vest no later than 60 days prior to
the Expiration Date applicable to such Option Shares as set forth in Paragraph 3
herein), this Option shall be vested and exercisable with respect to the
following percentage of the total number of Option Shares on the following dates
determined with respect to the Vesting Start Date set forth above:
<TABLE>
<CAPTION>
Cumulative
Time After Percentage of Percentage of
Vesting Start Date Option Shares Shares Exercisable
------------------ ------------- ------------------
<S> <C> <C>
1 year 25.000% 25.000%
13 months 2.083% 27.083%
Each additional month
thereafter up to
and including
the 47th month 2.083%* 2.083%*
48th month 2.083% 100.000%
</TABLE>
- ---------------------
* Additional 2.083% per month.
<PAGE>
2. Exercise of Option.
------------------
(a) Optionee may exercise only vested portions of this Option and
only in the following manner. From time to time prior to the earlier to occur
of (i) the termination hereof in accordance with the provisions of this Option,
or (ii) the Expiration Date (as set forth in Paragraph 3 herein) with respect to
a given portion of this Option, Optionee may give written notice to the Company
of his or her election to purchase some or all of the Option Shares for which
this Option may be exercised at the time of such notice. Said notice shall
specify the number of Option Shares to be purchased and shall be accompanied (i)
by payment therefor in cash and (ii) by such agreement, statement or other
evidence as the Company may require in order to satisfy itself that the issuance
of the Option Shares being purchased pursuant to such exercise and any
subsequent resale thereof will be in compliance with applicable laws and
regulations, including without limitation all applicable federal and state
securities laws and regulations.
(b) Certificates for the Option Shares so purchased will be issued to
Optionee upon compliance to the satisfaction of the Company with all
requirements under applicable laws or regulations in connection with such
issuance, including without limitation, if said Option Shares have not been
registered under the Securities Act of 1933, as amended (the "Act"), receipt of
a representation from Optionee upon each exercise of this Option that Optionee
is purchasing the Option Shares for his or her own account and not with a view
to any resale or distribution thereof, the legending of any certificate
representing said Option Shares, and the imposition of a stop transfer order
with respect thereto, to prevent a resale or distribution in violation of
federal or state securities laws. Until Optionee shall have complied with the
requirements hereof and of the Plan, the Company shall be under no obligation to
issue the Option Shares subject to this Option, and the determination of the
Option Committee (as defined in the Plan) as to such compliance shall be final
and binding on Optionee. Optionee shall not be deemed for any purpose to be the
owner of any Option Shares subject to this Option until such Option Shares shall
have been issued in accordance with the foregoing provisions.
(c) Notwithstanding any other provision hereof or of the Plan, no
portion of this Option shall be exercisable (i) after its termination in
accordance with the provisions hereof, (ii) after the Expiration Date applicable
thereto (as set forth in Paragraph 3 herein), or (iii) at any time unless all
necessary regulatory or other approvals have been received.
(d) To the extent that this Option is exercised for a number of Option
Shares which is less than the full number of Option Shares for which this Option
is then exercisable, it shall be deemed to have been exercised first with
respect to the maximum number of First-Year Option Shares for which this Option
has not been previously exercised, then the maximum
<PAGE>
number of Second-Year Option Shares for which this Option has not been
previously exercised, then the maximum number of Third-Year Option Shares for
which this Option has not been previously exercised and then the maximum number
of Fourth-Year Option Shares for which this Option has not been previously
exercised, including for purposes of determining which Option Shares hereunder
have expired in accordance with Paragraph 3 herein.
3. Expiration Date of Option and Underlying Option Shares. For purposes of
------------------------------------------------------
this Option, "Expiration Date" shall mean:
(a) with respect to the portion of this Option (and the underlying
number of Option Shares with respect to such portion) which vests one year after
the Vesting Start Date (such Option Shares being herein referred to as the
"First-Year Option Shares"), the date which is the fifth anniversary of the
Vesting Start Date;
(b) with respect to the portion of this Option (and the underlying
number of Option Shares with respect to such portion, but specifically excluding
the First-Year Option Shares) which vests during the period beginning 13 months
after the Vesting Start Date and ending 24 months after the Vesting Start Date
(such Option Shares being herein referred to as the "Second-Year Option
Shares"), the date which is the sixth anniversary of the Vesting Start Date;
(c) with respect to the portion of this Option (and the underlying
number of Option Shares with respect to such portion, but specifically excluding
the First-Year Option Shares and the Second-Year Option Shares) which vests
during the period beginning 25 months after the Vesting Start Date and ending 36
months after the Vesting Start Date (such Option Shares being herein referred to
as the "Third-Year Option Shares"), the date which is the seventh anniversary of
the Vesting Start Date; and
(d) with respect to the portion of this Option (and the underlying
number of Option Shares with respect to such portion, but specifically excluding
the First-Year Option Shares, Second-Year Option Shares and Third-Year Option
Shares) which vests during the period beginning 37 months after the Vesting
Start Date and ending 48 months after the Vesting Start Date (such Option Shares
being herein referred to as the "Fourth-Year Option Shares"), the date which is
the eighth anniversary of the Vesting Start Date.
4. Termination of Employment. This Option, as to any unexercised portion
-------------------------
hereof, shall terminate on the date three (3) months after the date on which
Optionee is no longer employed by the Company or a subsidiary as defined in the
Code; provided, however, that (a) if such termination of employment results from
Optionee's permanent and total disability as defined in Section 22(e)(3) of the
Code, this Option may be exercised, whether or not exercisable at the time of
such termination, until the date twelve (12) months after such termination, or
until the Expiration Date (as set forth in Paragraph 3 herein), whichever first
occurs, and (b) if such termination of employment results from Optionee's death,
this Option may be exercised, whether or not exercisable at the time of such
termination, by the Optionee's executors or administrators within twenty-four
(24) months thereafter, or until the Expiration Date (as set forth in Paragraph
3 herein), whichever first occurs. No Option will confer upon Optionee any
right to continued
<PAGE>
employment by the Company or any subsidiary of the Company, nor will it
interfere in any way with Optionee's right or the Company's or any such
subsidiary's right to terminate, or otherwise modify the terms of, Optionee's
employment at any time.
5. Incorporation of Plan. Notwithstanding anything herein to the
---------------------
contrary, this Option shall be subject to and governed by all the terms and
conditions of the Plan.
6. Transferability. Except as otherwise permitted in the Plan, this
---------------
Agreement is personal to Optionee, is non-assignable and is not transferable in
any manner, by operation of law or otherwise, other than by will or by the laws
of descent and distribution, and is exercisable, during Optionee's lifetime,
only by Optionee.
7. Adjustment Upon Changes in Capitalization.
-----------------------------------------
(a) If the Common Stock as a whole is changed into or exchanged for a
different number or kind of interests or securities of the Company, whether
through reorganization, recapitalization, reclassification, stock dividend or
other distribution, split, combination or interests, exchange of interests,
change in corporate structure or the like, an appropriate and proportionate
adjustment shall be made in the number and kind of Option Shares subject to this
Option. In addition, upon such change, the exercise price of shares of Common
Stock or other securities subject to any unexercised portions of this Optionee
thereafter shall have the right to purchase the number and kind of Option Shares
(as so adjusted) under this Option at an Exercise Price (as so adjusted) which
Optionee could purchase for the total purchase price applicable to the
unexercised portion of this Option immediately prior to such adjustment,
provided that any fractional shares resulting from such calculation shall be
eliminated.
(b) Adjustments under this Paragraph 7 shall be made by the Option
Committee of the Company, whose determination shall be conclusive.
8. Effect of Certain Transactions. If the Company is merged into another
------------------------------
entity, or if one or more entities is merged into the Company or there is a
consolidation of the Company and one or more entities and, in any such case, the
shares of Common Stock are converted into cash, securities or other property
other than shares of Common Stock, or if the Company is liquidated, or sells or
otherwise disposes of substantially all its assets to another entity while
unexercised Options remain outstanding under the Plan, then: (i) subject to the
provisions of clause (iii) below, this Option will terminate as of the effective
date of any such merger, consolidation, liquidation or sale, provided that (x)
notice of such termination shall be given to Optionee and (y) Optionee shall
have the right to exercise this Option to the extent that it is then
exercisable, during the 15-day period preceding the effective date of such
merger, consolidation, liquidation or sale, contingent upon the consummation of
such merger, consolidation, liquidation or sale, provided, however, that in no
event shall this Option be exercisable after the Expiration Date; (ii) the
Option Committee, with the approval of the Board of Directors of the Company,
may in its discretion accelerate the time for exercise of any unexercised and
unexpired portion of this Option, including the then unvested portion of this
Option, to and after a date prior to the effective date of such merger,
consolidation, liquidation or sale specified by the Option Committee, and (iii)
the Option Committee, with the approval of the Board of Directors of the
Company, may provide that after the effective date of such merger, consolidation
or sale this Option shall survive and Optionee shall be entitled, upon exercise
of this Option, to receive, in lieu of shares of Common Stock, shares of stock
or other securities as the holders of shares of Common Stock received pursuant
to the terms of the merger, consolidation or sale.
<PAGE>
9. Tax Withholding. The Optionee shall, not later than the date as of
---------------
which the exercise of this Option or disposition of Option Shares becomes a
taxable event for Federal income tax purposes, pay to the Company or make
arrangements satisfactory to the Option Committee for payment of any Federal,
state, and local taxes required by law to be withheld on account of such taxable
event.
10. Notice to Company of Disqualifying Disposition. If this Option is
----------------------------------------------
intended to be an incentive stock option under the Plan as set forth on the
first page hereof, by its acceptance hereof, each Optionee agrees to notify the
Company in writing immediately after he makes a Disqualifying Disposition (as
described in Sections 421, 422 and 424 of the Code and regulations thereunder)
of any stock acquired pursuant to the exercise of incentive stock options
granted under the Plan. A Disqualifying Disposition is generally any
disposition occurring within two years of the date the incentive stock option
was granted or within one year of the date the incentive stock option was
exercised, whichever period ends later.
11. Representations. By acceptance of this Option, the Optionee agrees,
---------------
acknowledges and understands that a purchase of shares under this Option will
not be made with a view to their distribution, as that term is used in the Act
unless, in the opinion of counsel to the Company such distribution is in
compliance with or exempt from the registration and prospectus requirements of
the Act, and the Employee agrees to sign a certificate to such effect at the
time of exercising this option and agrees that the certificate for the shares so
purchased may be inscribed with a legend to ensure compliance with the Act.
12. Miscellaneous. Notice hereunder shall be mailed or delivered to the
-------------
Company at its principal place of business, and shall be delivered to Optionee
in person or mailed or delivered to Optionee at the address set forth below, or
in either case at such other address as one party may subsequently furnish to
the other party in writing.
Std. ISO Option Agrmt.
Rev. 1.1
8/97
<PAGE>
EXHIBIT 10.5
Cambridge Technology Partners (Massachusetts), Inc.
1991 Stock Option Plan
Non-Qualified Option Agreement
Name of Optionee: [Executive Officer]
Number of Option Shares:
Option Exercise Price: $
Grant Date:
Vesting Start Date:
Pursuant to the Cambridge Technology Partners (Massachusetts), Inc. 1991
Stock Option Plan, as amended (the "Plan"), Cambridge Technology Partners
(Massachusetts), Inc., a Delaware corporation (the "Company"), hereby grants to
the Optionee named above an Option to purchase all or any part of the number of
shares of Common Stock, $.01 par value (the "Common Stock"), of the Company
specified above (the "Option Shares") at the Option Exercise Price per Option
Share specified above, subject to the terms and conditions set forth herein and
in the Plan. This Option is not intended to qualify and shall not be treated as
an "incentive stock option" under Section 422(b) of the Internal Revenue Code of
1986, as amended from time to time (the "Code").
1. Vesting Schedule. No portion of this Option may be exercised until the
----------------
date on which such portion shall have vested. Except as set forth herein, and
subject to the determination of the Company in its sole discretion to accelerate
the vesting schedule hereunder due to other circumstances and subject to a
reduction in the percentage of Option Shares vesting each month in the event
that the Optionee becomes employed on less than a full-time basis (such new
percentage shall be determined by the Company at the time the Optionee becomes
employed on less than a full time basis and shall be set forth in a replacement
non-qualified option agreement to be executed at that time; provided, however,
that in any event all Option Shares shall vest no later than 60 days prior to
the Expiration Date applicable to such Option Shares as set forth in Paragraph 3
herein), this Option shall be vested and exercisable with respect to the
following percentage of the total number of Option Shares on the following dates
determined with respect to the Vesting Start Date set forth above:
<TABLE>
<CAPTION>
Cumulative
Time After Percentage of Percentage of
Vesting Start Date Option Shares Shares Exercisable
------------------ ------------- ------------------
<S> <C> <C>
1 year 25.000% 25.000%
13 months 2.083% 27.083%
Each additional month
thereafter up to
and including
the 47th month 2.083%* 2.083%*
48th month 2.083% 100.000%
</TABLE>
- ---------------------
* Additional 2.083% per month.
<PAGE>
2. Exercise of Option.
------------------
(a) Optionee may exercise only vested portions of this Option and
only in the following manner. From time to time prior to the earlier to occur
of (i) the termination hereof in accordance with the provisions of this Option,
or (ii) the Expiration Date (as set forth in Paragraph 3 herein) with respect to
a given portion of this Option, Optionee may give written notice to the Company
of his or her election to purchase some or all of the Option Shares for which
this Option may be exercised at the time of such notice. Said notice shall
specify the number of Option Shares to be purchased and shall be accompanied (i)
by payment therefor in cash and (ii) by such agreement, statement or other
evidence as the Company may require in order to satisfy itself that the issuance
of the Option Shares being purchased pursuant to such exercise and any
subsequent resale thereof will be in compliance with applicable laws and
regulations, including without limitation all applicable federal and state
securities laws and regulations.
(b) Certificates for the Option Shares so purchased will be issued to
Optionee upon compliance to the satisfaction of the Company with all
requirements under applicable laws or regulations in connection with such
issuance, including without limitation, if said Option Shares have not been
registered under the Securities Act of 1933, as amended (the "Act"), receipt of
a representation from Optionee upon each exercise of this Option that Optionee
is purchasing the Option Shares for his or her own account and not with a view
to any resale or distribution thereof, the legending of any certificate
representing said Option Shares, and the imposition of a stop transfer order
with respect thereto, to prevent a resale or distribution in violation of
federal or state securities laws. Until Optionee shall have complied with the
requirements hereof and of the Plan, the Company shall be under no obligation to
issue the Option Shares subject to this Option, and the determination of the
Option Committee (as defined in the Plan) as to such compliance shall be final
and binding on Optionee. Optionee shall not be deemed for any purpose to be the
owner of any Option Shares subject to this Option until such Option Shares shall
have been issued in accordance with the foregoing provisions.
(c) Notwithstanding any other provision hereof or of the Plan, no
portion of this Option shall be exercisable (i) after its termination in
accordance with the provisions hereof, (ii) after the Expiration Date applicable
thereto (as set forth in Paragraph 3 herein), or (iii) at any time unless all
necessary regulatory or other approvals have been received.
(d) To the extent that this Option is exercised for a number of Option
Shares which is less than the full number of Option Shares for which this Option
is then exercisable, it shall be deemed to have been exercised first with
respect to the maximum number of First-Year Option Shares for which this Option
has not been previously exercised, then the maximum
<PAGE>
number of Second-Year Option Shares for which this Option has not been
previously exercised, then the maximum number of Third-Year Option Shares for
which this Option has not been previously exercised and then the maximum number
of Fourth-Year Option Shares for which this Option has not been previously
exercised, including for purposes of determining which Option Shares hereunder
have expired in accordance with Paragraph 3 herein.
3. Expiration Date of Option and Underlying Option Shares. For purposes of
------------------------------------------------------
this Option, "Expiration Date" shall mean:
(a) with respect to the portion of this Option (and the underlying
number of Option Shares with respect to such portion) which vests one year after
the Vesting Start Date (such Option Shares being herein referred to as the
"First-Year Option Shares"), the date which is the fifth anniversary of the
Vesting Start Date;
(b) with respect to the portion of this Option (and the underlying
number of Option Shares with respect to such portion, but specifically excluding
the First-Year Option Shares) which vests during the period beginning 13 months
after the Vesting Start Date and ending 24 months after the Vesting Start Date
(such Option Shares being herein referred to as the "Second-Year Option
Shares"), the date which is the sixth anniversary of the Vesting Start Date;
(c) with respect to the portion of this Option (and the underlying
number of Option Shares with respect to such portion, but specifically excluding
the First-Year Option Shares and the Second-Year Option Shares) which vests
during the period beginning 25 months after the Vesting Start Date and ending 36
months after the Vesting Start Date (such Option Shares being herein referred to
as the "Third-Year Option Shares"), the date which is the seventh anniversary of
the Vesting Start Date; and
(d) with respect to the portion of this Option (and the underlying
number of Option Shares with respect to such portion, but specifically excluding
the First-Year Option Shares, Second-Year Option Shares and Third-Year Option
Shares) which vests during the period beginning 37 months after the Vesting
Start Date and ending 48 months after the Vesting Start Date (such Option Shares
being herein referred to as the "Fourth-Year Option Shares"), the date which is
the eighth anniversary of the Vesting Start Date.
4. Termination of Employment. This Option, as to any unexercised portion
-------------------------
hereof, shall terminate on the date three (3) months after the date on which
Optionee is no longer employed by the Company or a subsidiary as defined in the
Code; provided, however, that (a) if such termination of employment results from
Optionee's permanent and total disability as defined in Section 22(e)(3) of the
Code, this Option may be exercised, whether or not exercisable at the time of
such termination, until the date twelve (12) months after such termination, or
until the Expiration Date (as set forth in Paragraph 3 herein), whichever first
occurs, and (b) if such termination of employment results from Optionee's death,
this Option may be exercised, whether or not exercisable at the time of such
termination, by the Optionee's executors or administrators within twenty-four
(24) months thereafter, or until the Expiration Date (as set forth in Paragraph
3 herein), whichever first occurs. No Option will confer upon Optionee any
right to continued
<PAGE>
employment by the Company or any subsidiary of the Company, nor will it
interfere in any way with Optionee's right or the Company's or any such
subsidiary's right to terminate, or otherwise modify the terms of, Optionee's
employment at any time.
5. Incorporation of Plan. Notwithstanding anything herein to the
---------------------
contrary, this Option shall be subject to and governed by all the terms and
conditions of the Plan.
6. Transferability. Except as otherwise permitted in the Plan, this
---------------
Agreement is personal to Optionee, is non-assignable and is not transferable in
any manner, by operation of law or otherwise, other than by will or by the laws
of descent and distribution, and is exercisable, during Optionee's lifetime,
only by Optionee.
7. Adjustment Upon Changes in Capitalization.
-----------------------------------------
(a) If the Common Stock as a whole is changed into or exchanged for a
different number or kind of interests or securities of the Company, whether
through reorganization, recapitalization, reclassification, stock dividend or
other distribution, split, combination or interests, exchange of interests,
change in corporate structure or the like, an appropriate and proportionate
adjustment shall be made in the number and kind of Option Shares subject to this
Option. In addition, upon such change, the exercise price of shares of Common
Stock or other securities subject to any unexercised portions of this Optionee
thereafter shall have the right to purchase the number and kind of Option Shares
(as so adjusted) under this Option at an Exercise Price (as so adjusted) which
Optionee could purchase for the total purchase price applicable to the
unexercised portion of this Option immediately prior to such adjustment,
provided that any fractional shares resulting from such calculation shall be
eliminated.
(b) Adjustments under this Paragraph 7 shall be made by the Option
Committee of the Company, whose determination shall be conclusive.
8. Effect of Certain Transactions. If (i) the Company is to be merged
------------------------------
into another entity, or if one or more entities is to be merged into the Company
or if there is to be a consolidation of the Company and one or more entities
and, in any such case, the shares of Common Stock are to be converted into cash,
securities or other property other than shares of Common Stock (an
"Acquisition"), or (ii) if the Company is to be liquidated, or is to sell or
otherwise dispose of substantially all of its assets to another entity while
unexercised Options remain outstanding under the Plan (a "Sale"), then: (a) the
time for exercise of any unexercised and unexpired portion of this Option,
including the then unvested portion of this Option, shall be accelerated to
immediately prior to the consummation of such Acquisition or Sale, and (b) this
Option shall terminate immediately after the effective date of such Acquisition
or Sale; provided, however, that the foregoing clauses (a) and (b) shall not
apply to any transaction in which the former stockholders of the Company
immediately after such transaction hold or receive by reason of their prior
ownership of shares of capital stock of the Company shares of capital stock of
the resulting or surviving corporation constituting a majority of the voting
power of all outstanding stock of such resulting or successor corporation.
<PAGE>
9. Tax Withholding. The Optionee shall, not later than the date as of
---------------
which the exercise of this Option or disposition of Option Shares becomes a
taxable event for Federal income tax purposes, pay to the Company or make
arrangements satisfactory to the Option Committee for payment of any Federal,
state, and local taxes required by law to be withheld on account of such taxable
event.
10. Notice to Company of Disqualifying Disposition. If this Option is
----------------------------------------------
intended to be an incentive stock option under the Plan as set forth on the
first page hereof, by its acceptance hereof, each Optionee agrees to notify the
Company in writing immediately after he makes a Disqualifying Disposition (as
described in Sections 421, 422 and 424 of the Code and regulations thereunder)
of any stock acquired pursuant to the exercise of incentive stock options
granted under the Plan. A Disqualifying Disposition is generally any
disposition occurring within two years of the date the incentive stock option
was granted or within one year of the date the incentive stock option was
exercised, whichever period ends later.
11. Representations. By acceptance of this Option, the Optionee agrees,
---------------
acknowledges and understands that a purchase of shares under this Option will
not be made with a view to their distribution, as that term is used in the Act
unless, in the opinion of counsel to the Company such distribution is in
compliance with or exempt from the registration and prospectus requirements of
the Act, and the Employee agrees to sign a certificate to such effect at the
time of exercising this option and agrees that the certificate for the shares so
purchased may be inscribed with a legend to ensure compliance with the Act.
12. Miscellaneous. Notice hereunder shall be mailed or delivered to the
-------------
Company at its principal place of business, and shall be delivered to Optionee
in person or mailed or delivered to Optionee at the address set forth below, or
in either case at such other address as one party may subsequently furnish to
the other party in writing.
Std. Exec. Option Agrmt.
Rev. 1.1
8/97
<PAGE>
EXHIBIT 10.6
Cambridge Technology Partners (Massachusetts), Inc.
1991 Stock Option Plan
Non-Qualified Option Agreement
Name of Optionee: [Employee]
Number of Option Shares:
Option Exercise Price: $
Grant Date:
Vesting Start Date:
Pursuant to the Cambridge Technology Partners (Massachusetts), Inc. 1991
Stock Option Plan, as amended (the "Plan"), Cambridge Technology Partners
(Massachusetts), Inc., a Delaware corporation (the "Company"), hereby grants to
the Optionee named above an Option to purchase all or any part of the number of
shares of Common Stock, $.01 par value (the "Common Stock"), of the Company
specified above (the "Option Shares") at the Option Exercise Price per Option
Share specified above, subject to the terms and conditions set forth herein and
in the Plan. This Option is not intended to qualify and shall not be treated as
an "incentive stock option" under Section 422(b) of the Internal Revenue Code of
1986, as amended from time to time (the "Code").
1. Vesting Schedule. No portion of this Option may be exercised until the
----------------
date on which such portion shall have vested. Except as set forth herein, and
subject to the determination of the Company in its sole discretion to accelerate
the vesting schedule hereunder due to other circumstances and subject to a
reduction in the percentage of Option Shares vesting each month in the event
that the Optionee becomes employed on less than a full-time basis (such new
percentage shall be determined by the Company at the time the Optionee becomes
employed on less than a full time basis and shall be set forth in a replacement
non-qualified option agreement to be executed at that time; provided, however,
that in any event all Option Shares shall vest no later than 60 days prior to
the Expiration Date applicable to such Option Shares as set forth in Paragraph 3
herein), this Option shall be vested and exercisable with respect to the
following percentage of the total number of Option Shares on the following dates
determined with respect to the Vesting Start Date set forth above:
<TABLE>
<CAPTION>
Cumulative
Time After Percentage of Percentage of
Vesting Start Date Option Shares Shares Exercisable
------------------ ------------- ------------------
<S> <C> <C>
1 year 25.000% 25.000%
13 months 2.083% 27.083%
Each additional month
thereafter up to
and including
the 47th month 2.083%* 2.083%*
48th month 2.083% 100.000%
</TABLE>
- ---------------------
* Additional 2.083% per month.
<PAGE>
2. Exercise of Option.
------------------
(a) Optionee may exercise only vested portions of this Option and
only in the following manner. From time to time prior to the earlier to occur
of (i) the termination hereof in accordance with the provisions of this Option,
or (ii) the Expiration Date (as set forth in Paragraph 3 herein) with respect to
a given portion of this Option, Optionee may give written notice to the Company
of his or her election to purchase some or all of the Option Shares for which
this Option may be exercised at the time of such notice. Said notice shall
specify the number of Option Shares to be purchased and shall be accompanied (i)
by payment therefor in cash and (ii) by such agreement, statement or other
evidence as the Company may require in order to satisfy itself that the issuance
of the Option Shares being purchased pursuant to such exercise and any
subsequent resale thereof will be in compliance with applicable laws and
regulations, including without limitation all applicable federal and state
securities laws and regulations.
(b) Certificates for the Option Shares so purchased will be issued to
Optionee upon compliance to the satisfaction of the Company with all
requirements under applicable laws or regulations in connection with such
issuance, including without limitation, if said Option Shares have not been
registered under the Securities Act of 1933, as amended (the "Act"), receipt of
a representation from Optionee upon each exercise of this Option that Optionee
is purchasing the Option Shares for his or her own account and not with a view
to any resale or distribution thereof, the legending of any certificate
representing said Option Shares, and the imposition of a stop transfer order
with respect thereto, to prevent a resale or distribution in violation of
federal or state securities laws. Until Optionee shall have complied with the
requirements hereof and of the Plan, the Company shall be under no obligation to
issue the Option Shares subject to this Option, and the determination of the
Option Committee (as defined in the Plan) as to such compliance shall be final
and binding on Optionee. Optionee shall not be deemed for any purpose to be the
owner of any Option Shares subject to this Option until such Option Shares shall
have been issued in accordance with the foregoing provisions.
(c) Notwithstanding any other provision hereof or of the Plan, no
portion of this Option shall be exercisable (i) after its termination in
accordance with the provisions hereof, (ii) after the Expiration Date applicable
thereto (as set forth in Paragraph 3 herein), or (iii) at any time unless all
necessary regulatory or other approvals have been received.
(d) To the extent that this Option is exercised for a number of Option
Shares which is less than the full number of Option Shares for which this Option
is then exercisable, it shall be deemed to have been exercised first with
respect to the maximum number of First-Year Option Shares for which this Option
has not been previously exercised, then the maximum
<PAGE>
number of Second-Year Option Shares for which this Option has not been
previously exercised, then the maximum number of Third-Year Option Shares for
which this Option has not been previously exercised and then the maximum number
of Fourth-Year Option Shares for which this Option has not been previously
exercised, including for purposes of determining which Option Shares hereunder
have expired in accordance with Paragraph 3 herein.
3. Expiration Date of Option and Underlying Option Shares. For purposes of
------------------------------------------------------
this Option, "Expiration Date" shall mean:
(a) with respect to the portion of this Option (and the underlying
number of Option Shares with respect to such portion) which vests one year after
the Vesting Start Date (such Option Shares being herein referred to as the
"First-Year Option Shares"), the date which is the fifth anniversary of the
Vesting Start Date;
(b) with respect to the portion of this Option (and the underlying
number of Option Shares with respect to such portion, but specifically excluding
the First-Year Option Shares) which vests during the period beginning 13 months
after the Vesting Start Date and ending 24 months after the Vesting Start Date
(such Option Shares being herein referred to as the "Second-Year Option
Shares"), the date which is the sixth anniversary of the Vesting Start Date;
(c) with respect to the portion of this Option (and the underlying
number of Option Shares with respect to such portion, but specifically excluding
the First-Year Option Shares and the Second-Year Option Shares) which vests
during the period beginning 25 months after the Vesting Start Date and ending 36
months after the Vesting Start Date (such Option Shares being herein referred to
as the "Third-Year Option Shares"), the date which is the seventh anniversary of
the Vesting Start Date; and
(d) with respect to the portion of this Option (and the underlying
number of Option Shares with respect to such portion, but specifically excluding
the First-Year Option Shares, Second-Year Option Shares and Third-Year Option
Shares) which vests during the period beginning 37 months after the Vesting
Start Date and ending 48 months after the Vesting Start Date (such Option Shares
being herein referred to as the "Fourth-Year Option Shares"), the date which is
the eighth anniversary of the Vesting Start Date.
4. Termination of Employment. This Option, as to any unexercised portion
-------------------------
hereof, shall terminate on the date three (3) months after the date on which
Optionee is no longer employed by the Company or a subsidiary as defined in the
Code; provided, however, that (a) if such termination of employment results from
Optionee's permanent and total disability as defined in Section 22(e)(3) of the
Code, this Option may be exercised, whether or not exercisable at the time of
such termination, until the date twelve (12) months after such termination, or
until the Expiration Date (as set forth in Paragraph 3 herein), whichever first
occurs, and (b) if such termination of employment results from Optionee's death,
this Option may be exercised, whether or not exercisable at the time of such
termination, by the Optionee's executors or administrators within twenty-four
(24) months thereafter, or until the Expiration Date (as set forth in Paragraph
3 herein), whichever first occurs. No Option will confer upon Optionee any
right to continued
<PAGE>
employment by the Company or any subsidiary of the Company, nor will it
interfere in any way with Optionee's right or the Company's or any such
subsidiary's right to terminate, or otherwise modify the terms of, Optionee's
employment at any time.
5. Incorporation of Plan. Notwithstanding anything herein to the
---------------------
contrary, this Option shall be subject to and governed by all the terms and
conditions of the Plan.
6. Transferability. Except as otherwise permitted in the Plan, this
---------------
Agreement is personal to Optionee, is non-assignable and is not transferable in
any manner, by operation of law or otherwise, other than by will or by the laws
of descent and distribution, and is exercisable, during Optionee's lifetime,
only by Optionee.
7. Adjustment Upon Changes in Capitalization.
-----------------------------------------
(a) If the Common Stock as a whole is changed into or exchanged for a
different number or kind of interests or securities of the Company, whether
through reorganization, recapitalization, reclassification, stock dividend or
other distribution, split, combination or interests, exchange of interests,
change in corporate structure or the like, an appropriate and proportionate
adjustment shall be made in the number and kind of Option Shares subject to this
Option. In addition, upon such change, the exercise price of shares of Common
Stock or other securities subject to any unexercised portions of this Optionee
thereafter shall have the right to purchase the number and kind of Option Shares
(as so adjusted) under this Option at an Exercise Price (as so adjusted) which
Optionee could purchase for the total purchase price applicable to the
unexercised portion of this Option immediately prior to such adjustment,
provided that any fractional shares resulting from such calculation shall be
eliminated.
(b) Adjustments under this Paragraph 7 shall be made by the Option
Committee of the Company, whose determination shall be conclusive.
8. Effect of Certain Transactions. If the Company is merged into another
------------------------------
entity, or if one or more entities is merged into the Company or there is a
consolidation of the Company and one or more entities and, in any such case, the
shares of Common Stock are converted into cash, securities or other property
other than shares of Common Stock, or if the Company is liquidated, or sells or
otherwise disposes of substantially all its assets to another entity while
unexercised Options remain outstanding under the Plan, then: (i) subject to the
provisions of clause (iii) below, this Option will terminate as of the effective
date of any such merger, consolidation, liquidation or sale, provided that (x)
notice of such termination shall be given to Optionee and (y) Optionee shall
have the right to exercise this Option to the extent that it is then
exercisable, during the 15-day period preceding the effective date of such
merger, consolidation, liquidation or sale, contingent upon the consummation of
such merger, consolidation, liquidation or sale, provided, however, that in no
event shall this Option be exercisable after the Expiration Date; (ii) the
Option Committee, with the approval of the Board of Directors of the Company,
may in its discretion accelerate the time for exercise of any unexercised and
unexpired portion of this Option, including the then unvested portion of this
Option, to
<PAGE>
and after a date prior to the effective date of such merger, consolidation,
liquidation or sale specified by the Option Committee, and (iii) the Option
Committee, with the approval of the Board of Directors of the Company, may
provide that after the effective date of such merger, consolidation or sale this
Option shall survive and Optionee shall be entitled, upon exercise of this
Option, to receive, in lieu of shares of Common Stock, shares of stock or other
securities as the holders of shares of Common Stock received pursuant to the
terms of the merger, consolidation or sale.
9. Tax Withholding. The Optionee shall, not later than the date as of
---------------
which the exercise of this Option or disposition of Option Shares becomes a
taxable event for Federal income tax purposes, pay to the Company or make
arrangements satisfactory to the Option Committee for payment of any Federal,
state, and local taxes required by law to be withheld on account of such taxable
event.
10. Notice to Company of Disqualifying Disposition. If this Option is
----------------------------------------------
intended to be an incentive stock option under the Plan as set forth on the
first page hereof, by its acceptance hereof, each Optionee agrees to notify the
Company in writing immediately after he makes a Disqualifying Disposition (as
described in Sections 421, 422 and 424 of the Code and regulations thereunder)
of any stock acquired pursuant to the exercise of incentive stock options
granted under the Plan. A Disqualifying Disposition is generally any
disposition occurring within two years of the date the incentive stock option
was granted or within one year of the date the incentive stock option was
exercised, whichever period ends later.
11. Representations. By acceptance of this Option, the Optionee agrees,
---------------
acknowledges and understands that a purchase of shares under this Option will
not be made with a view to their distribution, as that term is used in the Act
unless, in the opinion of counsel to the Company such distribution is in
compliance with or exempt from the registration and prospectus requirements of
the Act, and the Employee agrees to sign a certificate to such effect at the
time of exercising this option and agrees that the certificate for the shares so
purchased may be inscribed with a legend to ensure compliance with the Act.
12. Miscellaneous. Notice hereunder shall be mailed or delivered to the
-------------
Company at its principal place of business, and shall be delivered to Optionee
in person or mailed or delivered to Optionee at the address set forth below, or
in either case at such other address as one party may subsequently furnish to
the other party in writing.
Std. Option Agrmt.
Rev. 1.1
8/97
<PAGE>
Exhibit 11.1
CAMBRIDGE TECHNOLOGY PARTNERS (MASSACHUSETTS), INC.
STATEMENTS REGARDING COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, Ended June 30,
---------------------------- -----------------------------
1997 1996 1997 1996
----------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
Net income $ 8,063 $ 4,865 $ 15,153 $ 9,452
======== ======== ======== ========
Weighted average number of
common shares outstanding 49,288 46,950 49,019 46,806
Dilutive effect of common
equivalent shares of stock
options and warrants 5,535 7,623 5,733 7,355
-------- -------- -------- --------
Weighted average number of
common and common equivalent
shares outstanding 54,823 54,573 54,752 54,161
======== ======== ======== ========
Net income per share (1) $ .15 $ .09 $ .28 $ .18
======== ======== ======== ========
</TABLE>
(1) Primary and fully diluted income per share are the same for each
periods presented.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 36,071
<SECURITIES> 14,470
<RECEIVABLES> 77,760
<ALLOWANCES> 1,285
<INVENTORY> 0
<CURRENT-ASSETS> 146,482
<PP&E> 38,240
<DEPRECIATION> 14,202
<TOTAL-ASSETS> 177,780
<CURRENT-LIABILITIES> 58,997
<BONDS> 0
0
0
<COMMON> 496
<OTHER-SE> 118,185
<TOTAL-LIABILITY-AND-EQUITY> 177,780
<SALES> 0
<TOTAL-REVENUES> 154,410
<CGS> 0
<TOTAL-COSTS> 129,994
<OTHER-EXPENSES> (905)
<LOSS-PROVISION> 200
<INTEREST-EXPENSE> 66
<INCOME-PRETAX> 25,225
<INCOME-TAX> 10,102
<INCOME-CONTINUING> 15,153
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15,153
<EPS-PRIMARY> 0.28
<EPS-DILUTED> 0.28
</TABLE>
