<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a Party other than the Registrant /X/
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
CIBER, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
MERRILL CORPORATION
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
CIBER, Inc.
5251 DTC Parkway
Suite 1400
Englewood, Colorado 80111
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 29, 1996
TO THE SHAREHOLDERS OF CIBER, INC.:
NOTICE IS HEREBY GIVEN that the 1996 Annual Meeting of Shareholders (the
"Meeting") of CIBER, Inc., a Delaware corporation (the "Company"), will be held
on Tuesday, October 29, 1996 at 10:00 a.m. Mountain Time, at the Denver Marriott
Tech Center, 4900 South Syracuse Street, Denver, CO 80237, for the following
purposes:
(1) To elect two Class II Directors of the Company to serve for a term of
three years.
(2) To approve an amendment to the Company's Certificate of Incorporation
to increase the number of authorized shares of Common Stock from
20,000,000 to 40,000,000.
(3) To approve an increase in the number of shares of Common Stock
reserved for issuance pursuant to the Company's Equity Incentive Plan
from 1,000,000 to 2,000,000.
(4) To approve an increase in the number of shares of Common Stock
reserved for issuance pursuant to the Company's Employee Stock
Purchase Plan from 500,000 to 1,000,000.
(5) To ratify the appointment of KPMG Peat Marwick LLP as the Company's
independent public accountants for the fiscal year ending June 30,
1997.
(6) To transact such other business as may properly come before the
Meeting or any adjournment or postponements thereof.
The foregoing items of business are more fully described in the
accompanying Proxy Statement. The Board of Directors of the Company fixed the
close of business on September 23, 1996 as the record date for the determination
of shareholders entitled to notice of and to vote at the Meeting and at any
adjournment or postponement thereof. Consequently, only holders of the
Company's Common Stock at the close of business on September 23, 1996 will be
entitled to notice of and to vote at the Meeting. A complete list of
shareholders entitled to vote at the Meeting will be available for examination
during business hours by any shareholder, for purposes related to the Meeting,
for ten days prior to the Meeting at the Company's corporate offices at 5251 DTC
Parkway, Suite 1400, Englewood, Colorado 80111.
Whether or not you plan to attend the Meeting in person, please complete,
date and sign the accompanying proxy card and return it promptly in the enclosed
envelope to ensure your representation at the Meeting. You are cordially
invited to attend the Meeting and, if you do so, you may personally vote,
regardless of whether you have signed a proxy.
By order of the Board of Directors
Bobby G. Stevenson
Chief Executive Officer,
Chairman of the Board and Secretary
Englewood, Colorado
September 23, 1996
<PAGE>
CIBER, INC.
----------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
OCTOBER 29, 1996
----------
This Proxy Statement and the accompanying proxy card are being furnished in
connection with the solicitation of proxies by and on behalf of the Board of
Directors (the "Board") of CIBER, Inc., a Delaware corporation (the "Company"),
to be used at the 1996 Annual Meeting of Shareholders of the Company (the
"Meeting") to be held on Tuesday, October 29, 1996 at 10:00 a.m. Mountain Time,
at the Denver Marriott Tech Center, 4900 South Syracuse Street, Denver, CO
80237, and at any adjournment or postponement thereof. This Proxy Statement and
the accompanying proxy card are first being mailed to the holders of record of
the Company's common stock, $.01 par value per share (the "Common Stock"), on or
about September 27, 1995.
Shareholders of the Company represented at the Meeting will consider and
vote upon (i) the election of two Class II Directors to serve on the Board
until the 1999 Annual Meeting of Shareholders or until their successors have
been duly elected and qualified, (ii) an amendment to the Company's Certificate
of Incorporation to increase the number of authorized shares of Common Stock
from 20,000,000 to 40,000,000, (iii) an increase in the number of shares
reserved for issuance pursuant to the Company's Equity Incentive Plan from
1,000,000 to 2,000,000, (iv) an increase in the number of shares reserved for
issuance pursuant to the Company's Employee Stock Purchase Plan from 500,000 to
1,000,000, (v) the ratification of the appointment of KPMG Peat Marwick LLP as
the Company's independent public accountants for the fiscal year ending June 30,
1997, and (vi) such other business as may properly come before the Meeting of
any adjournment of adjournments thereof. The Company is not aware of any other
business to be presented for consideration at the Meeting.
VOTING AND SOLICITATION OF PROXIES
Only holders of record of the Common Stock at the close of business on
September 23, 1996 (the "Record Date") will be entitled to notice of and to vote
at the Meeting. As of the Record Date, 17,934,568 shares of Common Stock were
outstanding. Each shareholder is entitled to one vote for each share of Common
Stock held of record on the Record Date for each proposal submitted for
shareholder consideration at the Meeting. The presence, in person or by proxy,
of the holders of not less than one-third of the shares of Common Stock entitled
to vote at the Meeting is necessary to constitute a quorum for the conduct of
business at the Meeting. The act of the majority of such quorum will be the act
of the shareholders, except that, with respect to the amendment to the Company's
Certificate of Incorporation, the act of the holders of a majority of the
outstanding shares of Common Stock will be the act of the shareholders.
All shares represented by properly executed proxies will, unless such
proxies have previously been revoked, be voted at the Meeting in accordance with
the directions on the proxies. A proxy may be revoked at any time prior to
final tabulation of the votes. Shareholders may revoke proxies by written
notice to the Secretary of the Company, by delivery of a proxy bearing a later
date, or by personally appearing at the Meeting and casting a contrary vote. If
no direction is indicated, the shares will be voted in favor of the Board of
Directors' nominees for director, for the amendment to the Company's Certificate
of Incorporation to increase the number of authorized shares of the Company's
Common Stock, for the increase in the number of shares reserved for issuance
pursuant to the Company's
-1-
<PAGE>
Equity Incentive Plan, for the increase in the number of shares reserved for
issuance pursuant to the Company's Employee Stock Purchase Plan and for the
ratification of KPMG Peat Marwick LLP as independent auditors, as listed in
this Proxy Statement. The persons named in the proxies will have
discretionary authority to vote all proxies with respect to additional
matters that are properly presented for action at the Meeting.
The executive officers and directors of the Company as a group own or may
be deemed to control approximately 40.9% of the outstanding shares of Common
Stock of the Company. Each of the executive officers and directors has
indicated his intent to vote all shares of Common Stock owned or controlled by
him in favor of each item set forth herein.
The proxy solicitation is made by and on behalf of the Board of Directors.
Solicitation of proxies for use at the Meeting may be made in person or by mail,
telephone or telegram, by directors, officers and regular employees of the
Company. Such persons will receive no additional compensation for any
solicitation activities. Copies of solicitation materials will be furnished to
banks, brokerage houses, fiduciaries and custodians holding in their names
shares of Common Stock beneficially owned by others to forward to such
beneficial owners. The Company may reimburse persons representing beneficial
owners of Common Stock for their costs of forwarding solicitation materials to
such beneficial owners. The Company will bear the entire cost of solicitation
of proxies, including the preparation, assembly, printing and mailing of this
Proxy Statement, the proxy and any additional information furnished to
shareholders. An Annual Report to Shareholders containing financial statements
for the year ended June 30, 1996 is being mailed herewith to all shareholders
entitled to vote.
PROPOSAL 1 - ELECTION OF DIRECTORS
Directors constituting approximately one-third of the Board of Directors
are elected each year for a three-year term at the Company's Annual Meeting of
Shareholders and serve until their successors are duly elected by the
shareholders. The terms of Messrs. Mac J. Slingerlend and James A. Rutherford
expire in 1996 (the "Class II Director"); the term of Mr. Bobby G. Stevenson
expires in 1997 (the "Class III Director") and the terms of Messrs. James C.
Spira and Roy L. Burger expire in 1998 (the "Class I Directors"). The Board has
nominated Messrs. Mac J. Slingerlend and James A. Rutherford to serve for three-
year terms to expire at the 1999 Annual Meeting of Shareholders and until their
successors are elected and qualified. Vacancies on the Board may be filled by
the affirmative vote of a majority of the remaining directors then in office. A
director elected to fill a vacancy (including a vacancy created by an increase
in the Board of Directors) shall serve for the remainder of the full term of the
new directorship or of the class of directors in which the vacancy occurred.
Officers are elected by and serve at the discretion of the Board.
Shares represented by all proxies received by the Board and not marked so
as to withhold authority to vote for Messrs. Mac J. Slingerlend and James A.
Rutherford will be voted for the election of Messrs. Mac J. Slingerlend and
James A. Rutherford. If any of the nominees are unavailable or unwilling to
serve as director, persons named in the proxy intend to cast votes for which
they hold proxies in favor of the election of such other person or persons as
the Board of Directors may designate. The Board of Directors knows of no reason
why either of Messrs. Mac J. Slingerlend or James A. Rutherford should be unable
or unwilling to serve on the Board. See "Directors and Executive Officers"
below for biographical information for each person nominated as a director.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH NOMINEE
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<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the Company's directors and executive
officers, their ages, positions and offices currently held with the Company, the
year elected as director or appointment as officer and Class of directorship or
director nominee. For information about the ownership of the Company's voting
securities held by each director, director nominee or executive officer, see
"Security Ownership of Certain Beneficial Owners and Management."
<TABLE>
SERVED AS
OFFICER OR
DIRECTOR
NAME AGE POSITIONS SINCE CLASS
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Bobby G. Stevenson 54 Chairman, Chief Executive 1974 Class III
Officer, Secretary and Founder
Mac J. Slingerlend 49 President, Chief Operating Officer, 1989 Class II
Treasurer and Director
William E. Storrison 37 President/CIBER Information 1992 -
Services Division
John B. Maitland 53 Vice President; President of 1995 -
Business Information Technology,
Inc. ("BIT")
James A. Rutherford 50 Director 1994 Class II
James C. Spira 53 Director 1994 Class I
Roy L. Burger 41 Director 1995 Class I
</TABLE>
BOBBY G. STEVENSON. Mr. Stevenson is Chairman of the Board of Directors,
Chief Executive Officer, Secretary and one of the original three founders of the
Company. Mr. Stevenson was Vice President in charge of recruiting and
management of the technical staff from 1974 until November 1977 when he became
Chief Executive Officer. He has been responsible for all operations of the
Company since 1977.
MAC J. SLINGERLEND. Mr. Slingerlend joined the Company in January 1989 as
Executive Vice President/Chief Financial Officer, became Treasurer and a
director in 1994 and President and Chief Operating Officer in 1996. Prior to
joining the Company, Mr. Slingerlend spent 15 years in the banking industry,
primarily as a commercial lender, and five years in corporate financial
positions in the cable television and hospitality industries.
WILLIAM E. STORRISON. Mr. Storrison has been President/CIBER Information
Services Division since 1996. Mr. Storrison was Senior Vice
President/Operations of the Company from 1994 to 1996 and, from 1992 to 1994,
served as the Company's Vice President/Eastern Operations. Mr. Storrison has
been with the Company since 1987 and was previously Branch Manager and Regional
Vice President of several of the Company's eastern branch offices.
-3-
<PAGE>
JOHN B. MAITLAND. Mr. Maitland joined the Company in 1995 as Vice
President and as President of BIT when BIT merged with the Company. Mr.
Maitland is responsible for the strategic initiatives, organizational
development, business growth and overall profitability of BIT. From 1969 to
1981, Mr. Maitland held several positions in management and consulting, lastly
as Consulting Manager and Director of Consulting at Integral Systems, Inc., a
human resource management systems and financials software producer and
consulting firm. In 1981, Mr. Maitland co-founded BIT and became its Executive
Vice President and Chief Operating Officer. In 1987, he was promoted to
President and Chief Executive Officer of BIT.
JAMES A. RUTHERFORD. Mr. Rutherford has been a director of the Company
since February 1994. He is a managing director of Wingset Investments Ltd., a
private venture capital company located in New Albany, Ohio. Prior to forming
Wingset in 1995, Mr. Rutherford was one of the founders of Goal Systems
International Inc., serving in various executive positions and as a director
from its incorporation in 1977 until its sale in 1992. Mr. Rutherford is also a
director of Symix Systems, Inc., Columbus, Ohio, as well as several private
corporations.
JAMES C. SPIRA. Mr. Spira has been a director of the Company since
September 1994. Since 1995, he has been managing partner with Chicago, Illinois
based Diamond Technology Partners, Inc., a management consulting firm providing
program management services to design and deploy technology-enabled business
strategies. From 1991 to 1995, Mr. Spira was Group Vice President of The
Tranzonic Companies, a Cleveland-based holding company. From 1974 through 1991,
Mr. Spira was founder, President and Chief Executive Officer of Cleveland
Consulting Associates, an operations and systems management consulting firm
doing business with large multi-national companies.
ROY L. BURGER. Mr. Burger has been a director of the Company since
November 1995. Mr. Burger has approximately 20 years of experience in the
equipment leasing and finance industry and has arranged the financing of more
than $1.5 billion of equipment. Mr. Burger currently serves as Chairman and
Chief Executive Officer of Boulder Capital Group, a company that specializes in
equipment leasing and was founded by him in 1986.
BOARD COMMITTEES AND MEETINGS
The Board of Directors met four times during the Company's 1996 fiscal
year. Three of the directors participated in each of the board meetings and
committee meetings (of which such director was a member) held during fiscal
1996; two of the directors were unable to attend one meeting each. The Board
has an Audit Committee and a Compensation Committee, but does not have a
Nominating Committee or any committee performing a similar function.
COMPENSATION COMMITTEE. The principal responsibilities of the Compensation
Committee are the administration and grant of awards under the Employees' Plan
and the Stock Purchase Plan (each as defined below), as well as the
recommendation of annual salaries for senior management to the Company's Board
of Directors. The current members of the Compensation Committee are
Messrs. Rutherford, Spira and Burger. The Compensation Committee met once in
fiscal 1996.
-4-
<PAGE>
AUDIT COMMITTEE. The principal responsibilities of the Audit Committee are
to meet periodically with representatives of the Company's independent public
accountants to review the general scope of audit coverage, including
consideration of the Company's accounting practices and procedures and system of
internal accounting controls, and to review any transactions that may involve a
conflict of interest, and to report to the Board with respect thereto. The
Audit Committee also recommends to the Board of Directors the appointment of the
Company's independent public accountants. The current members of the Audit
Committee are Messrs. Stevenson, Rutherford, Spira and Burger. The Audit
Committee met once in the year ended June 30, 1996.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors, executive officers and
persons who beneficially own greater than 10% of a registered class of the
Company's equity securities to file initial reports of ownership and changes in
ownership of such securities with the Securities and Exchange Commission (the
"Commission"), Nasdaq National Market and the Company. Based solely upon its
review of copies of the Section 16(a) reports the Company has received and
written representations from certain reporting persons, the Company believes
that during its fiscal year ended June 30, 1996, all of its directors, executive
officers and greater than 10% beneficial owners were in compliance with their
filing requirements, with the exception of the following Form 5 filings for the
year ended June 30, 1996, which were filed late, on behalf of Bobby G.
Stevenson: which reported the sale of 10,000 shares of the Company's Common
Stock held in the Bobby G. Stevenson Revocable Trust; and on behalf of John B.
Maitland, Jr.: which reported the sale of 780 shares of the Company's Common
Stock.
-5-
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding beneficial ownership
of the Company's Common Stock at September 23, 1996, and stock options
exercisable for shares of Common Stock within sixty days of such date, held by
(i) each person or group of persons known by the Company to own beneficially
more than five percent (5%) of the outstanding Common Stock, (ii) each director
and nominee for director of the Company, (iii) each Named Executive Officer (as
defined below) and (iv) all executive officers and directors of the Company as a
group. All information is taken from or based upon ownership filings made by
such persons with the Commission or upon information provided by such persons to
the Company. Unless otherwise indicated, the shareholders listed below have
sole voting and investment power with respect to the shares reported as owned.
PERCENT
NAME OF AMOUNT AND NATURE OF OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
---------------------- -------------------- -------
Bobby G. Stevenson(1) 6,777,388 35.1
Mac J. Slingerlend(2) 454,831 2.4
John B. Maitland, Jr.(3) 345,962 1.8
William E. Storrison(4) 183,889 1.0
Prasong Suvarnasorn(5) 79,661 *
James A. Rutherford(6) 32,102 *
James C. Spira(6) 12,102 *
Roy L. Burger 102 *
All directors and executives
officers as a group
(8 persons)(7) 7,886,037 40.9
-------------
*less than 1%
(1)The address of Mr. Stevenson is c/o CIBER, Inc., 5251 DTC Parkway, Suite
1400, Englewood, CO 80111. Includes shares held by the Bobby G. Stevenson
Revocable Trust, of which Mr. Stevenson is the settlor, trustee and beneficiary
and options to purchase 40,000 shares of Common Stock that are fully vested.
Excludes 123,612 shares of Common Stock held in the Irrevocable First Stevenson
Charitable Remainder Unitrust, of which shares Mr. Stevenson disclaims
beneficial ownership.
(2)Includes options to purchase 451,666 shares of Common Stock that are fully
vested.
(3)Includes 345,962 of shares currently held by the John B. Maitland, Jr. Trust,
of which Mr. Maitland is the settlor, trustee and beneficiary.
(4)Includes options to purchase 181,664 shares of Common Stock that are fully
vested.
(5)Includes options to purchase 78,666 shares of Common Stock that are fully
vested.
(6)Includes options to purchase 12,000 shares of Common Stock that are fully
vested.
(7)Includes options to purchase 775,996 shares of Common Stock that are fully
vested.
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<PAGE>
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
COMPENSATION OF DIRECTORS
On August 6, 1996, the Board of Directors (with the non-employee directors
abstaining) resolved to issue bonus shares of Common Stock to each non-employee
director, the value of which shares would equal approximately $2,000 for each
meeting attended. All non-employee directors are reimbursed for their expenses
in attending board and committee meetings. These directors also receive stock
options under the Non-employee Directors' Stock Option Plan for serving on the
Board of Directors. Employee directors do not receive any compensation for
serving on the Board of Directors.
Under the terms of the Non-employee Directors' Stock Option Plan (the
"Director' Plan"), the Company may grant to non-employee directors awards of
stock options. The Directors' Plan provides for an initial authorization of
100,000 shares of Common Stock and is administered by the Board of Directors.
Each option granted under the Directors' Plan expires ten years from the date of
grant. The Director's Plan provides for an initial grant of options to purchase
10,000 shares of Common Stock to each non-employee director when such director
takes office, which options vest in equal annual installments over two years.
Additionally, after each year of service, each non-employee director receives a
grant of options to purchase 2,000 shares of Common Stock; such options vest one
year after the date of grant.
-7-
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth compensation information with respect to Mr.
Stevenson, the Company's Chief Executive Officer, and the Company's four most
highly paid executive officers with annual compensation in excess of $100,000
(the "Named Executive Officers"), for services rendered for the fiscal years
ended June 30, 1996, 1995 and 1994. See "Employment Agreements."
SUMMARY COMPENSATION TABLE
<TABLE>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------------- ------------
SECURITIES ALL OTHER
NAME AND FISCAL UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OPTIONS (#) ($)(2)
------------------ ------ ---------- --------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Bobby G. Stevenson 1996 315,000 34,134 -- 5,041
Chairman, Chief 1995 300,000 93,000 -- 5,987
Executive Officer, 1994 300,000 275,696 100,000 4,760
and Secretary(1)
Mac J. Slingerlend 1996 230,000 82,654 20,000 13,240
President/Chief 1995 200,000 73,500 -- 7,470
Operating Officer 1994 200,000 95,892 -- 6,200
and Treasurer(1)
John B. Maitland, Jr. 1996 225,000 53,004 50,000 6,075
President/Chief 1995 -- -- -- --
Operating Officer 1994 -- -- -- --
Business Information
Technology, Inc.
William E. Storrison 1996 150,000 41,780 20,000 12,249
President/CIBER 1995 125,000 90,000 30,000 5,255
Information Services(1) 1994 125,000 76,395 83,312 4,701
Prasong Suvarnasorn 1996 97,731 20,000 20,000 4,757
Senior Vice President/ 1995 95,288 6,000 12,000 3,330
Operations/CIBR2000 1994 73,923 10,000 38,750 2,926
</TABLE>
- ---------------------------------
(1) In January 1994, the Company entered into employment agreements with
Messrs. Stevenson and Slingerlend. For the remainder of fiscal 1994, these
executive officers were paid salaries pursuant to such employment
agreements at the following annual rates, plus the following fiscal-year
bonuses: Bobby G. Stevenson, salary $300,000 plus a bonus based on a
formula related to the Company's net income and Mac J. Slingerlend, salary
$200,000 plus a bonus based on a formula related to the Company's net
income. The Company entered into an employment agreement with Mr.
Storrison on July 1, 1992, which agreement provided for a salary of
$125,000 plus a bonus tied to the future performance of the CIBER
Information Services Division of the Company. Pursuant to new employment
agreements effective July 1, 1995, the base salaries of Messrs. Stevenson,
Slingerlend and Storrison were changed to $315,000, $230,000 and $150,000,
respectively.
(2) Consists of amounts contributed by the Company under the Company's 401(k)
Savings Plan and life insurance premiums paid by the Company. Savings Plan
contributions were $4,781, $5,237 and $4,615 for Mr. Stevenson; $5,538,
$5,470 and $4,268 for Mr. Slingerlend; $4,723, $5,080 and $4,701 for Mr.
Storrison; and $3,117, $2,672 and $2,268 for Mr. Suvarnasorn, for the years
ended June 30, 1996, 1995 and 1994, respectively. Savings Plan
contributions for Mr. Maitland were $6,075 in fiscal 1996. The remaining
amounts represent life insurance premiums.
-8-
<PAGE>
OPTION GRANTS IN THE LAST FISCAL YEAR
The following table sets forth information regarding options granted to the
Named Executive Officers during the fiscal year ended June 30, 1996.
<TABLE>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF STOCK
NUMBER OF PERCENT OF TOTAL PRICE APPRECIATION FOR
SECURITIES OPTIONS GRANTED EXERCISE OR OPTION TERM(1)
UNDERLYING OPTIONS TO EMPLOYEES IN BASE PRICE EXPIRATION ------------------------------
NAME GRANTED FISCAL YEAR ($/SHARE) DATE 5%($) 10%($)
- ------------------------ ------------------ ---------------- ----------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Bobby G. Stevenson -- -- -- -- -- --
Mac J. Slingerlend(2) 20,000 4% $8.88 7 / 2005 111,629 282,889
John B. Maitland, Jr.(3) 50,000 11% $8.88 7 / 2005 279,072 707,223
William E. Storrison(2) 20,000 4% $8.88 7 / 2005 111,629 282,889
Prasong Suvarnasorn (2) 20,000 4% $8.88 7 / 2005 111,629 282,889
</TABLE>
(1) Amounts reflect certain assumed rates of appreciation set forth in the
Commission's executive compensation disclosure rules. Actual gains, if
any, on stock option exercises will depend on future performance of the
Common Stock. No assurance can be made that the amounts reflected in these
columns will be achieved.
(2) Options were granted on July 1, 1995. The options vest and are exercisable
in equal installments over three years commencing July 1, 1996.
(3) Options were granted July 1, 1995. The options vest and are exercisable in
equal installments over five years commencing July 1, 1996.
OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
The following table sets forth information concerning outstanding options
held by the Named Executive Officers during the fiscal year ended June 30, 1996.
<TABLE>
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED IN-THE-
UNEXERCISED OPTIONS AT MONEY OPTIONS AT
SHARES ACQUIRED VALUE FISCAL YEAR END (#) FISCAL YEAR END ($)
NAME ON EXERCISE (#) REALIZED ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- --------------------- ---------------- ------------ ------------------------------- ---------------------------
<S> <C> <C> <C> <C>
Bobby G. Stevenson -- -- 40,000 / 60,000 704,000 / 1,056,000
Mac J. Slingerlend 40,000 483,645 450,000 / 20,000 9,690,968 / 262,500
John B. Maitland, Jr. -- -- -- / 50,000 -- / 656,250
William E. Storrison 35,000 358,564 174,998 / 40,000 3,643,079 / 615,000
Prasong Suvarnasorn 14,000 172,029 70,000 / 28,000 1,457,940 / 403,500
</TABLE>
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<PAGE>
EMPLOYMENT AGREEMENTS
The Company has employment agreements with each of its executive officers.
Except in the case of John Maitland, whose employment agreement was entered into
in conjunction with the merger with BIT, each employment agreement has a term of
one year and is annually renewable. In the case of Mr. Maitland, the initial
term is through June 30, 1998 and is annually renewable for one-year terms
thereafter, however, employment is not guaranteed for such three year period
ending June 1998. Each employment agreement provides that an officer's
compensation will include a base salary and a bonus. See footnote (1) to the
Summary Compensation Table above. In the event that any officer's employment is
terminated upon a change of control of the Company, upon death or disability of
the officer or without cause, such officer will be entitled to a severance
payment. In the event of termination upon a change of control of the Company or
other than for cause by the Company, the severance payment due the Chief
Executive Officer is equal to three times his base salary, with such amounts
payable in equal installments over a period of 36 months following termination.
In the event of death of the Chief Executive Officer, the severance payment is
equal to one-half of such officer's base salary, with such amount payable in
equal installments over a period of 24 months. The severance payment for each
other officer (other than Mr. Maitland) in the event of termination upon a
change in control of the Company, other than for cause by the Company or in the
event of death of such officer, is equal to one-half of such officer's base
salary, with such amounts payable in equal installments over a period of 24
months following termination (other than Messrs. Storrison and Suvarnasorn whose
severance payments in the event of death will be paid over a period of 12
months). With respect to Mr. Maitland, in the event of termination upon a
change of control of the Company or upon termination other than for cause, Mr.
Maitland is entitled to receive one-half of his base salary for an additional 24
months; PROVIDED, HOWEVER, that, in the event of termination for such reasons
prior to June 30, 1997, Mr. Maitland shall be paid at the rate of 100% of his
base salary for the period ended June 30, 1997, with any of the remaining
payments to be at the rate of one-half of base salary. The severance payment in
the event of death of Mr. Maitland is equal to one-half of his base salary. In
addition, in the event of termination upon a change of control of the Company,
other than for cause by the Company, voluntary termination, or termination for
disability, Mr. Maitland would be entitled to a lump sum payment of between
$25,000 and $75,000 if such termination occurred before June 30, 1998. In the
event of termination of an executive officer upon a change of control of the
Company, other than for cause by the Company or in the event of disability, the
Company will pay such officer's medical, life and disability premiums for the
first 12 months following termination.
LONG-TERM DEFERRED COMPENSATION PLAN
The Company has agreed to make certain post-employment payments to Mr.
Slingerlend, or his beneficiary. The payments will be made for 15 years after
Mr. Slingerlend's termination of employment with the Company and will range from
$40,000 to $100,000 annually, based on Mr. Slingerlend's age at the time of
termination of employment.
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1989 STOCK OPTION PLAN
The Company adopted a non-qualified stock option plan in 1989 (the "1989
Plan") to provide long-term incentives to certain of its employees, consultants
and directors. Thirteen individuals were granted options under the 1989 Plan.
At June 30, 1996, there were 1,271,322 options outstanding under the 1989 Plan,
all of which are exercisable. The exercise prices of the options range from
$.46 to $1.29 per share, with a weighted average of approximately $.65 per
share. Options totaling 403,990 shares were exercised in fiscal 1996. No
options were granted subsequent to July 1, 1993. The 1989 Plan was discontinued
in calendar 1993. Options under the 1989 Plan remain outstanding pursuant to
their terms and expire at various times through 2013.
EMPLOYEE'S EQUITY INCENTIVE PLAN
In January 1994, the Company adopted an employees' Equity Incentive Plan
(the "Employees' Plan"). The purpose of the Employees' Plan is to provide long-
term incentives to the Company's officers, employees and consultants. The
Employees' Plan initially reserved 1,000,000 shares of Common Stock for issuance
thereunder. Under the Employees' Plan, the Company may grant to officers,
employees and consultants awards of restricted stock, stock options and
performance bonuses or any combination thereof. The Employees' Plan terminates
after January 2004. Incentive stock options ("ISOs") may not be granted at an
exercise price of less than the fair market value of the Common Stock on the
date of grant. The exercise price of non-qualified stock options granted under
the Employees' Plan may be granted at less than the fair market value of the
Common Stock on the date of grant. The exercise price of ISOs granted to
holders of more than 10% of the aggregate amount of outstanding Common Stock
must be at least 110% of the fair market value of the Common Stock on the date
of grant and the term of these options cannot exceed five years. As of June 30,
1996, options to purchase 732,894 shares of Common Stock were outstanding under
the Employees' Plan at an average exercise price of $7.71 per share. Options
for 42,000 shares were exercised in fiscal 1996, while options for 1,000 shares
were forfeited. Subsequent to June 30, 1996, the Company granted an additional
350,000 options exercisable at $22.00 and 40,000 at $19.40, the fair market
value at the date of issuance.
EMPLOYEE STOCK PURCHASE PLAN
Under the Employee Stock Purchase Plan (the "Stock Purchase Plan"), which
was approved by the Company's shareholders in October 1994, employees who have
been employed by the Company for at least six months can elect to purchase,
through payroll deductions, shares of Common Stock at 85% of the fair market
value on the first or last date of an offering period. Presently, 500,000
shares of Common Stock are reserved for issuance under the Stock Purchase Plan.
The Stock Purchase Plan provides for one offering during each three-month
period, commencing January 1, 1995. Employees are permitted to deduct at least
1% but not more than 5% of their compensation, or such other rates as determined
from time to time by the Board of Directors. Notwithstanding the foregoing, no
employee is permitted to subscribe for shares under the Stock Purchase Plan if,
after the purchase of the shares, the employee would own 5% or more of the total
voting power or value of all classes of stock of the Company or if the purchase
would permit the employee to buy, pursuant to the Stock Purchase Plan, more than
$6,250 worth of stock for any three-month offering period.
As of June 30, 1996, 540 employees were participating in the Stock Purchase
Plan. Employees purchased 90,268 shares at a weighted average price per share
of $9.33 during fiscal 1996.
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THE COMPENSATION COMMITTEE REPORT
COMPENSATION POLICIES
The Compensation Committee (the "Committee") of the Board of Directors
consists of its independent directors. The purpose of the Committee is to
develop policies and make specific recommendations with respect to the
compensation of the Company's executive officers, with the objective that a fair
relationship exists between executive pay and the creation of shareholder value.
The Committee, among other things, considers the performance of the
Company's operations, compensation of executive officers of competitors, salary
surveys of industry related positions, the salary history of the particular
officer and other compensation in place, including stock option awards. There
is no singular objective formula by which compensation is determined and the
decisions are ultimately subjective.
FISCAL 1996 COMPENSATION
With respect to the Company's chief executive officer and the other Named
Executive Officers, the Committee focused principally upon establishing
appropriate base salary and incentive compensation. The chief executive officer
and each of the other Named Executive Officers are parties to employment
agreements with the Company that provide for base salary increases and bonuses
at stipulated performance levels for Messrs. Stevenson, Slingerlend, Maitland
and Storrison, and as the Company may decide with respect to Mr. Suvarnasorn.
The base salary and bonuses granted the chief executive officer and the other
named executive officers with respect to fiscal 1996 are consistent with the
Committee's objectives.
The Company has periodically granted stock options in order to provide
certain of its executives with a competitive total compensation package and
reward them for their contribution to the Company's long-term performance, as
well as to align a portion of their compensation with the market value of the
Common Stock. Mr. Stevenson has a substantial share holding interest in the
Company and was granted options in fiscal 1994. During fiscal 1996, stock
options were granted to Messrs. Slingerlend, Maitland, Storrison and Suvarnasorn
and to other members of management based upon their actual and potential
contributions to the Company.
Compensation Committee
James A. Rutherford
James C. Spira
Roy L. Burger
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PERFORMANCE GRAPH
The following graph provides a comparison of the cumulative total return*
for the Nasdaq U.S. Stock Market Index, the Nasdaq Computer and Data Processing
Stocks Index and the Company since the Company's initial public offering on
March 17, 1994.
* $100 invested March 17, 1994 in the Company's Common Stock or in the index
indicated, including reinvestment of dividends.
Corresponding index value and Common Stock price values are given below:
<TABLE>
3/17/94 3/31/94 6/30/94 9/30/94 12/31/94 3/31/95 6/30/95 9/30/95 12/31/95 3/31/96 6/30/96
------- ------- ------- ------- -------- ------- ------- ------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CIBER, Inc. $100 96 104 104 119 176 212 290 279 391 525
Nasdaq Stock Market-US Index 100 92 88 95 94 103 118 132 133 140 150
Nasdaq Computer & Data
Processing Index 100 91 89 100 109 123 146 160 167 175 194
CIBER, Inc. Closing
Stock Price $4.188 4.000 4.375 4.375 5.000 7.375 8.875 12.125 11.688 16.375 22.000
</TABLE>
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company's largest shareholder, President, Chief Executive Officer
and Chairman (Mr. Stevenson), Messrs. Slingerlend and Suvarnasorn, directly
and through their children, own 85% of CIBER Network Services, Inc. ("CNSI"),
which commenced operations in July 1992. CNSI is engaged in the computer
network integration business, which business includes the procurement of
computer hardware and the installation of local and wide area computer
networks and related services.
The Company is a guarantor on a $2.0 million inventory purchase line of
credit with AT&T Capital Corporation to CNSI. As of June 30, 1996, the
outstanding amount for the line of credit was $1.8 million. The highest
amount outstanding under the line of credit was $1.9 million during the year
ended June 30, 1995 and $2.0 million during the year ended June 30, 1996.
Certain officers of the Company have also guaranteed this line of credit and
have indemnified the Company against losses that might be incurred as a
result of its guaranty.
During the years ended June 30, 1994, 1995 and 1996, CIBER purchased
from CNSI, several local area networks and various computer equipment and
software for approximately $160,000, $268,000 and $923,000, respectively. In
January 1994, the Company and CNSI entered into a month-to-month management
services agreement which provides that the Company will supply accounting and
other administrative services to CNSI at a monthly cost of $2,500.
PROPOSAL 2 - AMENDMENT TO CERTIFICATE OF INCORPORATION TO
INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
GENERAL
On August 6, 1996, the Board of Directors adopted a resolution proposing
that the Company's Certificate of Incorporation be amended to increase the
total number of shares of Common Stock that the Company is authorized to
issue from 20,000,000 to 40,000,000 shares.
PURPOSES
The additional authorized shares will benefit the Company by providing
flexibility to the Board of Directors without further action or authorization
by shareholders (except as required by law), in responding to business needs
and opportunities as they arise, and for other corporate purposes. These
corporate purposes might include the obtaining of capital funds through
public and private offerings of shares of Common Stock or of securities
convertible into shares of Common stock or the acquisition of businesses,
technologies or other assets. In addition, the Board of Directors may deem
it appropriate to issue shares of Common Stock for distribution to the
Company's shareholders in the event of a stock dividend or stock split, or
for distributions pursuant to employee benefit plans. If such additional
authorized shares of Common Stock are subsequently issued to other than
existing shareholders, the percentage interest of existing shareholders in
the Company will be reduced. The issuance of any additional shares will be
on terms deemed by the Board of Directors to be in the best interests of the
Company and its shareholders.
In addition, the Company may seek to raise additional capital from time
to time and the Board of Directors believes that it is prudent to have
additional shares of Common Stock available for such purpose and for general
corporate purposes, including acquisitions, grants of stock options and
recapitalizations, which transactions can be consummated expediently only if
the proposal to amend the Company's Certificate of Incorporation to increase
the number of authorized shares of Common Stock of
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the Company is approved by holders of a majority of the issued and
outstanding shares of Common Stock. The Board of Directors will determine
whether, when and on what terms the issuance of shares of Common Stock may be
warranted in connection with any of the foregoing purposes.
The Board of Directors believes that the proposed increase in the number
of authorized shares of Common Stock will give the Company greater
flexibility by allowing shares of Common Stock to be issued by the Board of
Directors without the delay and expense of a special meeting of shareholders.
As of September 23, 1996, the Company had (1)17,934,568 shares of Common
Stock outstanding and (2) 2,208,230 shares of Common Stock issuable under
options that have been or may be granted under all of the Company's stock
option plans, of which options to purchase approximately 2,311,124 shares
were outstanding, of which options to purchase approximately 1,360,000 shares
of Common Stock were currently exercisable. Approval of Proposal 3 at the
Annual Meeting of Shareholders on October 29, 1996 will increase the number
of shares reserved for issuance under the Company's Equity Incentive Plan by
1,000,000 shares.
IMPLEMENTATION
If the proposed Amendment is adopted by the shareholders, it will become
effective upon the filing and recording of a Certificate of Amendment as
required by the General Corporation Law of the State of Delaware.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE AMENDMENT
TO THE CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER
OF AUTHORIZED SHARES OF COMMON STOCK
PROPOSAL 3 - AMENDMENT TO THE EQUITY INCENTIVE PLAN
To ensure the continued availability of the Company's Equity Incentive
Plan (the "Employees' Plan") to attract, motivate and retain employees, on
August 6, 1996, the Board of Directors approved an amendment to the
Employees' Plan to increase the number of shares reserved for issuance
thereunder from 1,000,000 shares to 2,000,000 shares, subject to the approval
by the Company's shareholders at the Meeting. The affirmative vote of a
majority of the shares of the Company's Common Stock represented at the
Meeting will be required to approve the amendment to the Employees' Plan.
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<PAGE>
EMPLOYEES' EQUITY INCENTIVE PLAN
The Employees' Plan was adopted by the Board of Directors and
shareholders of the Company in January 1994. A total of 1,000,000 shares of
Common Stock have been reserved for issuance under the Employees' Plan. The
purpose of the Employees' Plan is to provide long-term incentives to the
Company's officers, employees and consultants and to encourage and enable
such participants who are in a position to make significant contributions to
the success of the Company to acquire a closer identification of their
interests with those of the Company.
The Employees' Plan is administered by a committee which is comprised of
disinterested members of the Board of Directors (the "Committee"). Subject
to the terms of the Employees' Plan, the Committee determines the persons to
whom awards are granted, the type of award granted, the number of shares
granted, the vesting schedule, the type of consideration to be paid to the
Company upon exercise of options and the term of any option (which cannot
exceed ten years). Under the Employees' Plan, the Committee may grant awards
of restricted stock, stock options and supplemental bonuses or any
combination thereof.
Under the Employees' Plan, the Committee may grant both incentive stock
options ("ISOs") intended to qualify under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), and options which are not
qualified as incentive stock options ("NSOs"). ISOs may be granted to
persons who are consultants to the Company. ISOs may not be granted under
the Employees' Plan at an exercise price of less than the fair market value
of the Common Stock on the date of grant. The exercise price of an ISO
granted to holders of more than 10% of the Common Stock must be at least 110%
of the fair market value of the Common Stock on the date of grant, and the
term of these options cannot exceed five years. The exercise price of NSOs
may, at the discretion of the Committee, be granted at less than the fair
market value of the Common Stock on the date of grant. Options under the
Employees' Plan may not be granted after January 2004.
Under the performance award component of the Employees' Plan,
participants may be granted an award denominated in shares of Common stock or
in dollars. Achievement of the performance targets, or multiple performance
target, established by the Committee relating to corporate, group, unit or
individual performance, based upon standards set by the Committee, will
entitle the participant to payment of the full amount specified with respect
to the award, subject to adjustment at the discretion of the Committee in the
event of performance exceeding the minimum performance target, but below the
maximum performance target applicable to such award. Payment may be made in
cash, Common Stock or any combination thereof, as determined by the
Committee, and will be adjusted in the event the participant ceases to be an
employee of the Company before the end of a performance cycle by reason of
death, disability or retirement.
Under the restricted stock component of the Employees' Plan, the
Committee may, in selected cases, issue to a participant a given number of
shares of restricted stock. Restricted stock under the Employees' Plan is
Common Stock restricted as to sale pending fulfillment of such vesting
schedule and employment requirements as the Committee determines. Prior to
the fulfilling of the restrictions, the participant will nevertheless be
entitled to receive distributions in liquidation and dividends on, and to
vote the shares of, the restricted stock. The Employees' Plan provides for
forfeiture of restricted stock for breach of conditions of grant. No
restricted stock or performance awards have been granted under the Employees'
Plan.
The Board may amend or terminate the Employees' Plan at any time without
approval of the shareholders. However, shareholder approval is required for
any amendment to the Employees' Plan
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<PAGE>
that increases the number of shares for which options may be granted, changes
the designation of the class of persons eligible to participate or changes in
any material respect the limitations or provisions of the options subject to
the Plan. However, no action by the Board or shareholders may alter or
impair any award previously granted without the consent of the award holder.
As of September 23, 1996, options to purchase up to an aggregate of
1,183,894 have been granted, of which options to purchase 57,500 shares of
Common Stock have been exercised and options for 19,000 shares have been
canceled. Options to purchase shares of Common Stock issued under the
Employees' Plan to all current executive officers as a group during fiscal
years 1994, 1995 and 1996 were as follows for the years indicated: 1994 -
100,000 shares; 1995 - 42,000 shares; and 1996 - 110,000 shares.
FEDERAL INCOME TAX CONSEQUENCES OF THE EMPLOYEES' PLAN
The following is a general summary of the federal income tax
consequences that may apply to recipients of options, restricted stock,
performance shares and performance units under the Employees' Plan. Because
the application of the tax laws may vary according to individual
circumstances, a participant should seek professional tax advice concerning
the tax consequences to him or her of participation in the Employees' Plan,
including the potential application and effect of state, local and foreign
tax laws and estate and gift tax considerations.
INCENTIVE STOCK OPTIONS. A participant who is granted an ISO recognizes
no taxable income when the ISO is granted. Generally, no taxable income is
recognized upon exercise of an ISO unless the alternative minimum tax applies
(see below). However, a participant who exercises an ISO recognizes taxable
gain or loss when he sells his shares. Any gain or loss recognized on the
sale of shares acquired upon exercise of an ISO is taxed as capital gain or
loss if the shares have been held for at least one year after the option was
exercised and for at least two years after the option was granted. In this
event, the Company receives no deduction with respect to the ISO shares. If
the participant disposes of the shares before the required holding periods
have elapsed (a "disqualifying disposition"), he is taxed as though he had
exercised an NSO (see below), except that the compensation income on exercise
of the option is recognized in the year of the disqualifying disposition, and
the compensation income may not exceed the excess of the amount realized in
the sale of the stock over the option price.
EFFECT OF ALTERNATIVE MINIMUM TAX. Certain taxpayers who have
significant tax preferences (and other items allowed favorable treatment for
regular tax purposes) may be subject to the alternative minimum tax ("AMT").
For purposes of the AMT, an ISO is treated as if it were an NSO (see below).
However, regular tax treatment (see above) will apply for AMT purposes if a
disqualifying disposition occurs in the same taxable year that options are
exercised.
NON-STATUTORY STOCK OPTIONS. The tax treatment of NSOs differs
significantly from the tax treatment of ISOs. No taxable income is
recognized when an NSO is granted, but upon the exercise of an NSO, the
difference between the fair market value of the shares on the date of
exercise and the option price is taxable as ordinary income to the recipient.
RESTRICTED STOCK. In general, a participant would not recognize taxable
income upon the receipt of restricted stock, assuming such stock would be
subject to restrictions which constitute a "substantial risk of forfeiture"
within the meaning of Section 83 of the Code (including, for this purpose,
any restriction under Section 16(b) of the Exchange Act). Rather, the
participant may recognize taxable income at such time as the restrictions no
longer apply, in an amount equal to the fair market of the stock at that time
over the amount, if any, paid therefor. However, a participant could elect
to be taxed currently
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<PAGE>
upon receipt of the stock (without regard to such restrictions) by making an
election under Section 83(b) of the Code within 30 days of the receipt. In this
event, if the shares were later forfeited, the participant would not be entitled
to any loss (except for any amount actually paid for the stock). The amount of
compensation income to the participant generally is deductible by the Company.
Any dividends paid to the participant on restricted stock before the stock is
taken into income would be ordinary compensation income to the participant and
generally would be deductible by the Company.
PERFORMANCE SHARES. A participant will recognize taxable income upon the
receipt of stock in payment of performance shares in an amount equal to the fair
market value of the stock at such time. The amount of income to the participant
is deductible by the Company.
PERFORMANCE UNITS. A participant will recognized ordinary compensation
income on the receipt of cash in payment of performance units. This amount
generally is deductible by the Company.
WITHHOLDING. The Company may withhold any taxes required by any law or
regulation of any governmental authority, whether federal, state or local, in
connection with any stock option or other award under the Employees' Plan,
including, but not limited to withholding of any portion of any payment or
withholding from other compensation payable to the participant, unless such
person reimburses the Company for such amount.
IMPLEMENTATION. If the proposed amendment to the Employees' Plan is
adopted by the shareholders, it will become effective immediately and be
reflected in the amended Employees' Plan, which plan will be filed in the
Company's minutes book.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL
OF THE AMENDMENT TO THE EMPLOYEES' PLAN
PROPOSAL 4 - AMENDMENT TO THE EMPLOYEE STOCK PURCHASE PLAN
The Employee Stock Purchase Plan (the "Stock Purchase Plan") was adopted by
the Board of Directors in September 1994 and approved by the shareholders in
October 1994. A total of 500,000 shares of Common Stock have been reserved
under the Stock Purchase Plan. In August 1996, the Board of Directors approved
an amendment to the Stock Purchase Plan to increase the number of shares
reserved for issuance thereunder by an additional 500,000 shares, subject to
approval of the Company's shareholders at the Meeting.
The purpose of the Stock Purchase Plan is to provide employees of the
Company with an opportunity to purchase Common Stock of the Company through
payroll deductions. The Stock Purchase Plan provides for one offering during
each three-month period and the purchase price per share is the lower of 85% of
the fair market value of a share of Common Stock (the closing price on the
Nasdaq National Market) on the first date of an offering period or on the last
date of the offering period. The three-month offering periods commence on
January 1, April 1, July 1 and October 1 of each year. The first offering
period commenced on January 1, 1995. The Board of Directors has the power to
alter the offering periods without shareholder approval.
PARTICIPATION. Any person who, on the commencement date of each offering
period, is employed by the Company for at least six months is eligible to
participate in the Stock Purchase Plan and can elect to participate by
delivering to the Company an enrollment form (including a purchase agreement
authorizing payroll deductions) prior to the applicable offering date. The
purchase price of the shares is accumulated by payroll deductions over the
offering period. The deductions cannot exceed five percent
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<PAGE>
(5%) or be less than one percent (1%), or such other rates as determined from
time to time by the Board of Directors, of a participant's compensation. A
participant may, once and only once at any time during the offering period,
discontinue participation or decrease the rate of payroll deductions in the
Purchase Plan, but cannot increase the rate of payroll deductions. Unless an
employee's participation is discontinued by delivery of a notice of
withdrawal prior to the end of an applicable offering period, the purchase of
shares occurs automatically at the end of the offering period at the
applicable price. A participant's withdrawal from an offering does not have
any effect upon such participant's eligibility to participate in subsequent
offerings under the Stock Purchase Plan.
Notwithstanding the foregoing, no employee is permitted to subscribe for
shares under the Stock Purchase Plan if, immediately after the grant of the
right to purchase shares, the employee would own five percent (5%) or more of
the total voting power or value of all classes of stock of the Company
(including under all options), or if the grant of such right would permit the
employee to buy pursuant to the Stock Purchase Plan more than $25,000 worth of
stock for any calendar year.
TERMINATION OF EMPLOYMENT. Termination of a participant's employment for
any reason, including retirement or death, cancels the individual's
participation in the Stock Purchase Plan immediately. In that event, the
employee or his personal representative may either receive a stock certificate
for the number of shares paid for pursuant to payroll deductions made during the
offering period up to the day prior to the date of the employee's cessation of
employment or receive a cash refund previously collected during the offering
period. This election is exercisable for a 30-day period following cessation of
employment. If no election is made on a timely basis, the Company will issue a
cash refund of all sums contributed during the current period as well as any
amount carried forward from the previous period. The refund will be made after
the end of the last purchase period of active employment.
NON-ASSIGNABILITY. No rights or accumulated payroll deductions of an
employee under the Stock Purchase Plan may be assigned or transferred for any
reason other than by will or by the laws of descent and distribution.
The Board of Directors has authority to amend or terminate the Stock
Purchase Plan without shareholder approval; provides, however, that no amendment
may be made to the Stock Purchase Plan without the approval of the shareholders
of the Company if such amendment would increase the number of shares reserved
under the Stock Purchase Plan, materially modify the eligibility requirements,
or materially increase the benefits which may accrue to participants under the
Stock Purchase Plan.
TAX INFORMATION. The Stock Purchase Plan, and the right of the participant
to make purchases thereunder, is intended to qualify under the provisions of
Section 423 of the Code. Under these provisions, no income is taxable to a
participant at the time of grant of the option (i.e., the right) to purchase
shares or upon the purchase of shares. Upon the participant's death or
disposition of the shares, the participant generally is subject to tax. If the
shares are held by the participant for more than two years after the date of
option grant (i.e., the commencement of the relevant pay period) and for more
than one year from the date of issuance, the lesser of (a) the excess of the
fair market value of the shares at the time of disposition or death over the
option price, or (b) the excess of the fair market value of the shares at the
time the option was granted (i.e., the commencement of the relevant pay period)
over the option price (i.e., the price paid for the shares) will be treated as
ordinary income to the participant and any further gain in the case of a
disposition will be treated as capital gain. If the shares are disposed of
before the expiration of these holding periods, the excess of the fair market
value of the shares on the exercise date over such option price is treated as
ordinary income, and any further gain or any loss on such disposition is a
capital gain or loss. The Company will only be entitled to a deduction to the
extent of ordinary income reported by a participant upon disposition of shares
before the expiration of the required holding period.
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The foregoing is only a summary of the effect of federal income taxation
upon the participant and the Company with respect to the shares purchased under
the Stock Purchase Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE
AMENDMENT TO THE EMPLOYEE STOCK PURCHASE PLAN
PROPOSAL 5 - RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The firm of KPMG Peat Marwick LLP served as independent public accountants
of the Company for the year ended June 30, 1996 and, upon recommendation of the
Audit Committee, the Board of Directors has appointed KPMG Peat Marwick LLP to
serve for the current fiscal year ending June 30, 1997. The Board of Directors
is requesting ratification by the shareholders of the appointment of KPMG Peat
Marwick LLP. Representatives of KPMG Peat Marwick LLP are expected to attend
the Meeting. The representatives will have an opportunity to make a statement
and will be available to respond to appropriate questions.
In the event this proposal is defeated, the vote will be considered as a
direction to the Board of Directors to select other auditors for the next fiscal
year. However, because of the difficulty and expense of making any substitution
of auditors after the beginning of a fiscal year, KPMG Peat Marwick LLP's
appointment for the 1997 fiscal year will be permitted to stand unless the Board
of Directors finds other reasons for making a change.
Services to be performed by KPMG Peat Marwick LLP for the 1997 fiscal year
will include, among other things, audit of annual financial statements, and
consultation in connection with various financial reporting, accounting and tax
matters. Ratification of KPMG Peat Marwick LLP's appointment requires the
affirmative vote of the holders of a majority of the shares of Common Stock
present at the Meeting, in person or by proxy, and entitled to vote.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION
OF KPMG PEAT MARWICK LLP AS INDEPENDENT PUBLIC ACCOUNTANTS
SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Shareholders may submit proposals on matters appropriate for shareholder
action at the Company's annual shareholder meetings. Such proposals must be
received by the Company not later than August 1, 1997 to be considered for
inclusion in the proxy statement and proxy relating to the 1997 Annual Meeting
of Shareholders. Any such proposals should be addressed to: Corporate
Secretary, CIBER, Inc., 5251 DTC Parkway, Suite 1400, Englewood, Colorado 80111.
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ANNUAL REPORT TO SHAREHOLDERS
The 1996 Annual Report of the Company, as filed with the Commission, is
being mailed to the shareholders with this Proxy Statement. The Annual Report
is not to be considered part of the soliciting material.
OTHER MATTERS
The Board of Directors is not aware of any business to be presented at the
Meeting except the matters set forth in the Notice and described in this Proxy
Statement. If any other matters properly come before the Meeting, the persons
designated as agents in the enclosed proxy will vote on such matters in
accordance with their best judgment.
By order of the Board of Directors
Bobby G. Stevenson
Chief Executive Officer,
Chairman of the Board and Secretary
Englewood, Colorado
September 23, 1996
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