<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended: Commission file number:
SEPTEMBER 30, 1999 0-23488
CIBER, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 38-2046833
(STATE OF INCORPORATION) (I.R.S. EMPLOYER
IDENTIFICATION NO.)
5251 DTC PARKWAY
SUITE 1400
ENGLEWOOD, CO 80111
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
Telephone Number: (303) 220-0100
-----------
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 and (2) has been subject to such filing requirements for
the past 90 days.
Yes __X__ No _____
As of September 30, 1999, there were 59,148,049 shares of the Registrant's
common stock ($0.01 par value) outstanding.
<PAGE>
CIBER, INC.
FORM 10-Q
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited):
Consolidated Statements of Operations
Three months ended September 30, 1999 and 1998 3
Consolidated Balance Sheets
September 30, 1999 and June 30, 1999 4
Consolidated Statements of Cash Flows
Three months ended September 30, 1999 and 1998 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures About Market Risk 11
PART II. OTHER INFORMATION 12
SIGNATURES 13
</TABLE>
2
<PAGE>
CIBER, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
--------------------------
IN THOUSANDS, EXCEPT PER SHARE DATA 1998 1999
-------- --------
<S> <C> <C>
Consulting services $147,601 $176,400
Other revenues 18,057 10,642
-------- --------
Total revenues 165,658 187,042
-------- --------
Cost of consulting services 94,496 119,398
Cost of other revenues 12,501 5,146
Selling, general and administrative expenses 37,284 43,075
Amortization of intangible assets 1,082 3,023
Merger costs 1,535 -
-------- --------
Operating income 18,760 16,400
Interest income 612 712
Other income - 777
-------- --------
Income before income taxes 19,372 17,889
Income tax expense 8,255 7,629
-------- --------
Net income $ 11,117 $ 10,260
======== ========
Earnings per share - basic $ 0.21 $ 0.18
Earnings per share - diluted $ 0.20 $ 0.18
Weighted average shares - basic 52,920 57,464
Weighted average shares - diluted 55,170 58,423
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
CIBER, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30, SEPTEMBER 30,
IN THOUSANDS, EXCEPT PER SHARE DATA 1999 1999
-------- ---------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 64,215 $ 51,567
Accounts receivable 150,976 155,033
Inventories 395 461
Prepaid expenses and other assets 2,943 3,520
Deferred income taxes 2,915 3,492
-------- ---------
Total current assets 221,444 214,073
-------- ---------
Property and equipment, at cost 47,997 50,912
Less accumulated depreciation and amortization (22,866) (24,566)
-------- ---------
Net property and equipment 25,131 26,346
-------- ---------
Intangible assets, net 157,012 153,989
Deferred income taxes 1,694 2,119
Other assets 3,351 4,461
-------- ---------
Total assets $408,632 $ 400,988
======== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Trade payables 13,502 13,725
Accrued compensation and payroll taxes 36,845 40,682
Deferred revenues 3,850 1,521
Other accrued expenses and liabilities 10,118 9,388
Income taxes payable 7,181 12,872
-------- ---------
Total current liabilities 71,496 78,188
-------- ---------
Commitments and contingencies
Shareholders' equity:
Preferred stock, $0.01 par value, 5,000,000 shares
authorized, no shares issued - -
Common stock, $0.01 par value, 80,000,000 shares authorized,
58,933,000 and 59,148,000 shares issued and outstanding 589 591
Additional paid-in capital 222,652 224,796
Retained earnings 122,607 132,752
Treasury stock, 500,000 and 2,097,000 shares at cost (8,712) (35,339)
-------- ---------
Total shareholders' equity 337,136 322,800
-------- ---------
Total liabilities and shareholders' equity $408,632 $ 400,988
======== =========
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
CIBER, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
---------------------------
IN THOUSANDS 1998 1999
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 11,117 $ 10,260
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 2,664 5,037
Deferred income taxes (1,183) (516)
Gain on sale of LogisticsPRO, net of tax - (466)
Other 10 96
Changes in operating assets and liabilities, net of the effects of
acquisitions:
Accounts receivable (10,488) (4,057)
Inventories 13 (66)
Other current and long-term assets (435) (1,683)
Trade payables 4,522 193
Accrued compensation and payroll taxes 3,896 3,837
Deferred revenues (797) (2,329)
Other accrued expenses and liabilities (389) 526
Income taxes payable 7,700 5,382
-------- --------
Net cash provided by operating activities 16,630 16,214
-------- --------
INVESTING ACTIVITIES:
Acquisitions, net of cash acquired (150) -
Purchases of property and equipment (2,096) (3,683)
-------- --------
Net cash used in investing activities (2,246) (3,683)
-------- --------
FINANCING ACTIVITIES:
Proceeds from sales of common stock, net 3,498 4,947
Purchases of treasury stock (532) (30,126)
-------- --------
Net cash provided by (used in) financing activities 2,966 (25,179)
-------- --------
Net increase (decrease) in cash and cash equivalents 17,350 (12,648)
Cash and cash equivalents, beginning of period 38,238 64,215
-------- --------
Cash and cash equivalents, end of period $ 55,588 $ 51,567
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
CIBER, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying consolidated financial statements of CIBER, Inc. and
subsidiaries ("CIBER" or the "Company") have been prepared without audit.
Certain information and note disclosures normally included in consolidated
financial statements prepared in accordance with generally accepted
accounting principles have been omitted. These consolidated financial
statements should be read in conjunction with the audited consolidated
financial statements and notes thereto included in CIBER's Annual Report on
Form 10-K for the fiscal year ended June 30, 1999. In the opinion of
management, these unaudited consolidated financial statements include all
adjustments necessary for a fair presentation of the financial position and
results of operations for the periods presented. Interim results of
operations for the three-month period ended September 30, 1999 are not
necessarily indicative of operating results for the full fiscal year.
EARNINGS PER SHARE. Basic EPS is computed by dividing income available to
common shareholders by the weighted average number of common shares
outstanding for the period. Diluted EPS includes the effects of the potential
dilution of CIBER's stock options, determined using the treasury stock
method. The computation of weighted average shares includes the shares and
options issued in connection with business combinations accounted for as
poolings of interests as if they had been outstanding for all periods prior
to the merger. The number of antidilutive stock options omitted from the
computation of weighted average shares was 164,638 and 3,241,549 for the
three months ended September 30, 1998 and 1999, respectively.
(2) SHAREHOLDERS' EQUITY
Changes in shareholders' equity during the three months ended September 30, 1999
were (in thousands):
<TABLE>
<CAPTION>
Common stock Additional Total
---------------- paid-in Retained Treasury shareholders'
Shares Amount capital earnings stock equity
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BALANCES AT JULY 1, 1999 58,933 $ 589 $222,652 $ 122,607 $ (8,712) $ 337,136
Employee stock purchases and options exercised 192 2 1,561 (115) 3,499 4,947
Tax benefit from exercise of stock options - - 487 - - 487
Compensation expense related to stock and stock options 23 - 96 - - 96
Purchases of treasury stock - - - - (30,126) (30,126)
Net income - - - 10,260 - 10,260
------- ----- -------- --------- ---------- ----------
BALANCES AT SEPTEMBER 30, 1999 59,148 $ 591 $224,796 $ 132,752 $ (35,339) $ 322,800
======= ===== ======== ========= ========== ==========
</TABLE>
(3) STOCK OPTION PLANS
From July 1, 1999 to September 30, 1999, CIBER granted options for 1,954,500
shares of common stock, at fair market value, to certain employees under the
Employees' Stock Option Plan at exercise prices ranging from $17.00 to $19.13
per share.
6
<PAGE>
CIBER, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(4) REVOLVING LINE OF CREDIT
CIBER had a $35 million unsecured revolving line of credit with a bank that
was renewed and increased to $50 million on November 1, 1999. There were no
outstanding borrowings under this bank line at September 30, 1999 and June
30, 1999. Any outstanding borrowings would bear interest at the London
Interbank Offered Rate ("LIBOR") plus 2%. The credit agreement requires a
commitment fee of .225% per annum on any unused portion of the line of credit
up to $25 million. On July 1, 2000, the amount available under the line of
credit will be reduced to $35 million and the maximum unused portion of the
line of credit on which the commitment fee will be paid will be reduced to
$20 million. The credit agreement expires on January 31, 2001.
(5) SALE OF LOGISTICSPRO
On September 30, 1999, CIBER sold its LogisticsPRO software business
resulting in a $777,000 gain that is included in other income. The after-tax
gain is $466,000 or $.01 per diluted share. As consideration, CIBER received
a $2.0 million interest bearing note, that is secured by CIBER common stock
owned by the buyers and is included in other assets. In addition, CIBER will
receive a percentage of certain future revenues, up to $3.5 million over the
next five years. The software business was sold to an entity owned by the
current management of the business as well as two non-executive officers of
CIBER.
(6) SUBSEQUENT EVENTS
Subsequent to September 30, 1999, CIBER completed the following two business
combinations:
THE ISADORE GROUP, INC. ("ISADORE") - On October 15, 1999, CIBER acquired
certain assets, liabilities and all of the business operations of Isadore for
approximately $18 million. Additionally, the terms of the purchase provide
for additional consideration of up to $10 million based on revenue earned
during the 12-month periods ending December 31, 2000, 2001 and 2002. This
acquisition will be accounted for as a purchase. Accordingly, CIBER's
consolidated financial statements will include the results of operations of
Isadore after the date of acquisition. CIBER will record initial goodwill of
approximately $17 million related to this acquisition, which will be
amortized over 20 years. Any additional consideration paid will be accounted
for as additional goodwill. Isadore, located in Phoenix, Arizona, provided
PeopleSoft higher education consulting services.
WATERSTONE CONSULTING, INC. ("WATERSTONE") - On October 29, 1999, CIBER
acquired certain assets, liabilities and all of the business operations of
Waterstone for approximately $26 million in cash and the issuance of 243,347
shares of its common stock. The aggregate purchase price was approximately
$31 million. CIBER used a portion of its line of credit to fund this
acquisition. This acquisition will be accounted for as a purchase.
Accordingly, CIBER's consolidated financial statements will include the
results of operations of Waterstone after the date of acquisition. CIBER will
record goodwill of approximately $30 million related to this acquisition,
which will be amortized over 20 years. Waterstone, located in Chicago,
Illinois, provided consulting services specializing in electronic commerce
supply chain and customer relationship management solutions.
At the Annual Meeting of Shareholders of CIBER, Inc, held on October 28,
1999, the shareholders voted upon and approved an amendment to the Company's
Certificate of Incorporation to increase the number of authorized shares of
common stock from 80,000,000 to 100,000,000 shares. In addition, it was voted
upon and approved to increase the number of shares of common stock reserved
for issuance pursuant to the Company's Equity Incentive Plan from 8,000,000
to 10,500,000 shares.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THE FOLLOWING DISCUSSION OF THE RESULTS OF OPERATIONS AND FINANCIAL CONDITION
SHOULD BE READ IN CONJUNCTION WITH THE COMPANY'S CONSOLIDATED FINANCIAL
STATEMENTS AND NOTES THERETO. WITH THE EXCEPTION OF HISTORICAL MATTERS AND
STATEMENTS OF CURRENT STATUS, CERTAIN MATTERS DISCUSSED BELOW ARE
FORWARD-LOOKING STATEMENTS THAT INVOLVE SUBSTANTIAL RISKS AND UNCERTAINTIES
THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM TARGETS OR
PROJECTED RESULTS. WITHOUT LIMITING THE FOREGOING, THE WORDS "BELIEVES,"
"ANTICIPATES," "PLANS," "EXPECTS" AND SIMILAR EXPRESSIONS ARE INTENDED TO
IDENTIFY FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE ACTUAL RESULTS
TO DIFFER MATERIALLY INCLUDE, AMONG OTHERS, YEAR 2000 EFFECTS, GROWTH THROUGH
BUSINESS COMBINATIONS AND INTERNAL EXPANSION, THE ABILITY TO ATTRACT AND
RETAIN QUALIFIED CONSULTANTS, DEPENDENCE ON SIGNIFICANT RELATIONSHIPS AND THE
ABSENCE OF LONG-TERM CONTRACTS, MANAGEMENT OF A LARGE AND RAPIDLY GROWING
BUSINESS, PROJECT RISKS, PRICING AND MARGIN PRESSURES, COMPETITION, POTENTIAL
FLUCTUATIONS IN QUARTERLY OPERATING RESULTS, PRICE VOLATILITY, AND
INTERNATIONAL EXPANSION. MANY OF THESE FACTORS ARE BEYOND THE COMPANY'S
ABILITY TO PREDICT OR CONTROL. PLEASE REFER TO A DISCUSSION OF THESE AND
OTHER FACTORS IN THE COMPANY'S ANNUAL REPORT ON FORM 10-K AND OTHER
SECURITIES AND EXCHANGE COMMISSION FILINGS. THE COMPANY DISCLAIMS ANY INTENT
OR OBLIGATION TO UPDATE PUBLICLY SUCH FORWARD-LOOKING STATEMENTS, WHETHER AS
A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE. IN ADDITION, AS A
RESULT OF THESE AND OTHER FACTORS, THE COMPANY'S PAST FINANCIAL PERFORMANCE
SHOULD NOT BE RELIED ON AS AN INDICATION OF FUTURE PERFORMANCE.
THREE MONTHS ENDED SEPTEMBER 30, 1999 AS COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1998
CIBER's revenues for the three months ended September 30, 1999 increased 13%
to $187.0 million from $165.7 million for the quarter ended September 30,
1998. This represents a 20% increase in consulting services revenues offset
by a planned decrease in other revenues, primarily sales of computer hardware
products. Other revenues decreased to $10.6 million for the three months
ended September 30, 1999 from $18.1 million for the same quarter last year.
Management expects that the decrease in other revenues will likely continue
in the future. The increase in consulting services revenues is derived
primarily from an increase in hours billed. Of the 20% increase in consulting
services revenues, approximately 11% was due to revenues from acquired
businesses or immaterial poolings of interests and approximately 9% was due
to organic growth of existing operations. Organic growth for the quarter was
driven by growth in ERP implementation services and was lessened, to some
extent, due to declining direct Year 2000 service revenues. Despite the
period-to-period growth in consulting services revenues, CIBER expects to
continue to experience a moderation in consulting services revenues through
December 31, 1999 due to the reluctance of some customers to commence
significant new IT initiatives until Year 2000 failure risks have passed.
Gross margin percentage decreased to 33.4% of revenues for the three months
ended September 30, 1999 from 35.4% of revenues for the same quarter of last
year. This decrease is due to declining gross margins on consulting services
offset by improved gross margins on other revenues. Consulting services gross
margins declined primarily due to a decrease in the utilization levels of
professional staff.
Selling, general and administrative expenses were 23.0% of revenues for the
three months ended September 30, 1999 compared to 22.5% of revenues for the
same quarter last year. This increase is due primarily to additional costs
incurred for new programs implemented to position the Company for future
growth, including the addition of key senior and executive management team
members, a "One CIBER" branding and marketing initiative, and internal
systems development. As CIBER's focus continues to shift to more
solutions-oriented and project work, selling, general and administrative
expenses will tend to increase as a percentage of sales and partially offset
the generally higher gross margins on such work.
Amortization of intangible assets increased to $3.0 million for the three
months ended September 30, 1999 from $1.1 million for the same quarter last
year. This increase was due to the additional intangible assets resulting
from mergers and acquisitions during the past year.
8
<PAGE>
Merger costs, primarily transaction related broker and professional costs, of
$1.5 million were incurred during the three months ended September 30, 1998,
while no merger costs were incurred during the three months ended September
30, 1999.
Interest income increased to $712,000 for the three months ended September
30, 1999 from $612,000 for the same quarter last year due to increased
average cash balances available for investment. Other income for the three
months ended September 30, 1999 of $777,000 represents the gain on the sale
of the LogisticsPRO software business (see Note 5 of Notes to Consolidated
Financial Statements). Management believes the sale of this software business
will help to maintain CIBER's independence and avoid conflicts with
significant partners with whom LogisticsPRO might otherwise compete. The sale
allows CIBER to focus on its IT consulting services business rather than
selling proprietary products. In addition, management believes that CIBER's
profitability in the next 12 months will be favorably impacted as a result of
the sale due to decreased sales, marketing and software development costs. As
part of the sale, the purchaser assumed all agreements for software
maintenance causing a reduction in the balance of deferred revenues.
CIBER's effective tax rate for the three months ended September 30, 1999 and
1998 was 42.6%. CIBER's effective tax rate for the three months ended
September 30, 1999 has increased due to increased nondeductible amortization
resulting from nontaxable acquisitions, primarily during the second half of
fiscal 1999. CIBER's effective tax rate was higher than normal during the
three months ended September 30, 1998 due to nondeductible merger costs.
CIBER's net income decreased to $10.3 million for the three months ended
September 30, 1999 from $11.1 million for the same quarter last year.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1999, CIBER had $135.9 million of working capital, of which
$51.6 million was cash and cash equivalents, and had a current ratio of
2.7:1. CIBER believes that its cash and cash equivalents on hand, its
operating cash flow and its available line of credit will be sufficient to
finance working capital needs during the next twelve months.
In June 1999, CIBER's Board of Directors authorized the repurchase of up to
10% of CIBER's outstanding stock. At September 30, 1999, CIBER had purchased
2,305,000 shares for $38.8 million under this program and may, depending on
circumstances, purchase more. Furthermore, CIBER may use cash to purchase
businesses. As a result, CIBER may borrow to finance such activities. Future
borrowings may include bank, private or public debt. CIBER had a $35 million
revolving line of credit with a bank that was renewed and increased to $50
million on November 1, 1999. There were no outstanding borrowings under this
bank line at September 30, 1999 and June 30, 1999. The credit agreement
expires in January 2001.
Net cash provided by operating activities was $16.2 million and $16.6 million
for the three months ended September 30, 1999 and 1998, respectively.
Included in net cash provided by operating activities was $487,000 and $3.0
million for the three months ended September 30, 1999 and 1998, respectively,
related to the tax benefit from the exercise of stock options.
CIBER's accounts receivable totaled $155.0 million at September 30, 1999
compared to $151.0 million at June 30, 1999. This increase is primarily a
result of CIBER's increase in revenues and also the mix shift to more
solution-oriented engagements which tend to have more lengthy billing and
payment terms.
Net cash used in investing activities was $3.7 million and $2.2 million
during the three months ended September 30, 1999 and 1998, respectively.
CIBER used cash of $150,000 during the three months ended September 30, 1998
for acquisitions. CIBER purchased property and equipment of $3.7 million and
$2.1 million during the three months ended September 30, 1999 and 1998,
respectively.
Net cash (used in) provided by financing activities was ($25.2 million) and
$3.0 million during the three months ended September 30, 1999 and 1998,
respectively. CIBER obtained net cash proceeds from sales of common stock to
employees of $4.9 million and $3.5 million during the three months ended
9
<PAGE>
September 30, 1999 and 1998, respectively. This increase is primarily due to
increased participation in CIBER's Employee Stock Purchase Plan. During the
three months ended September 30, 1999, CIBER purchased 1,805,000 shares of
treasury stock for $30.1 million. Of these treasury shares, 208,150 were
reissued as sales of common stock under CIBER's Employee Stock Purchase Plan.
CIBER plans to recapitalize its Application Solutions Provider ("ASP")
subsidiary, CIBER Enterprise Outsourcing, Inc. during fiscal 2000. CIBER
expects this recapitalization to provide additional capital, from other
investors, to expand the ASP business faster. Given the uncertainties of
market conditions, among other things, there can be no assurances that CIBER
will be successful in it attempts to recapitalize this business.
YEAR 2000 COMPLIANCE
THE FOLLOWING STATEMENTS ARE "YEAR 2000 READINESS DISCLOSURES" IN CONFORMANCE
WITH THE YEAR 2000 INFORMATION AND READINESS DISCLOSURE ACT OF 1998.
The "Year 2000" issue is the result of computer programs using two digits
rather than four to define the applicable year. Computer software and
hardware and other devices with embedded technology that are date sensitive
may recognize a date using "00" as the year 1900 rather than the year 2000.
This could result in a system failure or miscalculations causing disruptions
of CIBER's operations.
CIBER has instituted various projects to address the Year 2000 issue. CIBER
believes its material internal information technology ("IT") systems,
including payroll, billing and accounting systems, are currently Year 2000
compliant. For significant third-party software applications, CIBER has
obtained confirmation that the software is Year 2000 compliant. CIBER has
completed testing and remediation, if necessary, of all internally developed
software.
CIBER is currently evaluating its non-IT systems, such as building security,
elevators, fire-safety systems, telephones, voice mail and other systems
containing embedded microprocessors as well as evaluating the Year 2000
readiness of its significant suppliers. CIBER relies on the services of the
landlords of its offices, telecommunications companies, banks, utilities,
commercial airlines, and insurance companies, among others. As of September
30, 1999, CIBER has received Year 2000 compliance status information from all
of its significant suppliers. Of these, 60% have indicated that they are
currently Year 2000 compliant. The remainder have indicated that they plan to
be Year 2000 compliant by December 31, 1999. If CIBER determines that a
significant supplier will not be Year 2000 compliant and such noncompliance
would materially affect CIBER's operations, CIBER will devise contingency
plans. There can be no assurance that any contingency plans developed by
CIBER will prevent such service interruption on the part of one or more of
CIBER's vendors from having a material adverse effect on CIBER.
CIBER's principal business is providing IT services. Some of CIBER's services
are directly or indirectly related to the Year 2000 issue, including Year
2000 remediation services. CIBER provides services to clients that assist the
client in their Year 2000 projects. In addition, CIBER provides services to
clients directly related to client systems that may or may not be Year 2000
compliant. Due to the potential significance of the Year 2000 issue upon
client operations and upon any failure of critical client systems to which
CIBER has provided services, CIBER may be subject to claims regardless of
whether the failure is related to the services provided by CIBER. If
asserted, the resolution of such claims, including defense costs, could have
a material adverse effect on CIBER. CIBER generally attempts to include
provisions in client contracts that, among other things, disclaim implied
warranties, limit the duration of any express warranties, limit CIBER's
maximum liability and disclaim any warranties for projects managed by the
client. There can be no assurance that CIBER will be able to obtain these
contractual protections in future client contracts, or that such provisions
will protect CIBER from, or limit the amount of, any liability arising from
claims against CIBER.
As a reseller of certain IT products, CIBER only passes to its customers the
applicable vendors' warranties. CIBER makes no warranties regarding Year 2000
compliance of any of the products it resells. CIBER has developed and
licensed certain warehousing and traffic software products that have
subsequently been modified to be Year 2000 compliant. Year 2000 compliant
versions have been tested both internally and by a
10
<PAGE>
third party. CIBER has offered the Year 2000 compliant software versions to
its prior and existing customers at no charge.
As described above, CIBER has identified various potential issues associated
with the Year 2000 issue. CIBER is devoting internal resources and is working
with its suppliers to help ensure that CIBER's business is not substantially
interrupted as a result of the Year 2000. CIBER believes that the total
amounts spent by it to date and that it expects to spend in fiscal 2000
addressing the Year 2000 issue will be less than $250,000. CIBER currently
does not have a contingency plan in the event of a particular system not
being Year 2000 compliant. Such a plan will be developed if it becomes clear
that CIBER is not going to achieve its compliance objectives. Although CIBER
expects to identify and resolve all Year 2000 problems that could materially
adversely affect its business operations, management believes that it is not
possible to determine with absolute certainty that all Year 2000 problems
affecting CIBER, its vendors, or its clients have been identified or
corrected. If CIBER is required to implement any contingency plan, it could
have a material adverse effect on CIBER's operations. In addition, the
business interruption, resulting from Year 2000 issues, of any of CIBER's
significant clients could have a material adverse effect on CIBER. This
discussion of CIBER's Year 2000 efforts, management's expectations relating
to Year 2000 compliance and the possible effects on CIBER are forward-looking
statements.
RECENT AND PROPOSED ACCOUNTING PRONOUNCEMENTS
CIBER believes that recent accounting pronouncements will not have a material
effect on its financial position or results of operations.
The Financial Accounting Standards Board (FASB) has proposed a new statement
that would, among other things, eliminate the pooling of interests method of
accounting for business combinations. The proposed statement would require
all business combinations to be recorded using the purchase method of
accounting and any resulting excess purchase price over the fair value of
acquired net assets ("goodwill") would be charged to earnings over a period
of not more than 20 years. The proposal would also allow the reporting of
earnings per share excluding amortization of goodwill. The proposed
accounting would be effective for business combinations after the effective
date. The actual pronouncement, when issued, will likely have changes from
the exposure draft. If issued, management believes this pronouncement would
increase the amount of goodwill recorded for subsequent business combinations
(as CIBER has historically completed a large percentage of business
combinations as poolings of interests) and also increase the amortization
charge against earnings. As a result, management believes its internal
operating metrics, excluding amortization of intangibles, should also be
considered when evaluating CIBER's performance. Management also expects
investors to place increasing emphasis on "Cash EPS. "
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
CIBER has no activities in derivative financial or commodity instruments.
CIBER's exposure to market risks, (i.e. interest rate risk, foreign currency
exchange rate risk, equity price risk) through other financial instruments,
including, among others, cash equivalents, accounts receivable, lines of
credit, is not material.
11
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Annual Meeting of Shareholders of CIBER, Inc. held on October
28, 1999, the following matters were voted upon with the results as
indicated below.
1) Election of Directors
<TABLE>
<CAPTION>
For Withhold
--- --------
<S> <C> <C>
Mac J. Slingerlend 42,416,640 1,957,302
James A. Rutherford 42,428,422 1,945,520
Paul E. Rudolph 42,508,127 1,865,815
</TABLE>
The terms of offices as a director of Bobby G. Stevenson, Richard A.
Montoni, Roy L. Burger, James G. Brocksmith, Jr. and Archibald J.
McGill continued after the meeting.
2) The amendment to the Company's Certificate of Incorporation to
increase the number of authorized shares of common stock from
80,000,000 to 100,000,000 shares.
<TABLE>
<CAPTION>
For Against Abstain
--- ------- -------
<S> <C> <C>
42,315,153 1,989,606 69,183
</TABLE>
3) The increase in the number of shares of common stock reserved for
issuance pursuant to the Company's Equity Incentive Plan from
8,000,000 to 10,500,000 shares.
<TABLE>
<CAPTION>
For Against Abstain
--- ------- -------
<S> <C> <C>
34,268,178 9,930,156 175,603
</TABLE>
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
<TABLE>
<S> <C>
Exhibit 3(i) Certificate of Amendment to Amended and Restated
Certificate of Incorporation of CIBER, Inc.
Exhibit 3(ii) Amended and Restated Bylaws of the Company as adopted
August 17, 1999
Exhibit 10.1 Unsecured Credit Agreement with UMB Bank Colorado
dated November 1, 1999
Exhibit 10.2 Promissory Note between the Company and Joseph A.
Mancuso
Exhibit 27.1 Financial Data Schedule for the three months ended
September 30, 1999
</TABLE>
12
<PAGE>
A Report on Form 8-K was filed on July 1, 1999 announcing that the
acquisition of Business Impact Systems, Inc. was to be considered a
significant acquisition. It provided selected consolidated and
supplemental quarterly financial information that was restated for
certain business combinations.
A Report on Form 8-K/A was filed on August 24, 1999 that provided the
required audited financial statements and pro forma financial
information of Business Impact Systems, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned there
unto duly authorized.
CIBER, INC.
(Registrant)
Date November 12, 1999 By /s/ Mac J. Slingerlend
--------------------------------
Mac J. Slingerlend
Chief Executive Officer and President
Date November 12, 1999 By /s/ Richard A. Montoni
--------------------------------
Richard A. Montoni
Chief Financial Officer and Executive
Vice President
13
<PAGE>
CERTIFICATE OF AMENDMENT TO
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
CIBER, INC.
CIBER, Inc., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY:
FIRST: The board of directors of the Corporation adopted the
following resolution proposing and declaring advisable an amendment to the
Certificate of Incorporation of the Corporation at a regular meeting of the
board of directors held August 17, 1999:
RESOLVED, that Section 4.1 of Article 4 of the Amended and Restated
Certificate of Incorporation of the Corporation be amended by deleting said
Section 4.1 of Article 4 in its entirety, and substituting the following
therefor:
"Section 4.1 AUTHORIZED SHARES. The total number of shares that
the Corporation shall have the authority to issue is one hundred five million
(105,000,000), of which one hundred million (100,000,000) shall be common
stock, each with a par value of $.01, and five million (5,000,000) shares
shall be preferred stock, each with a par value of $.01."
SECOND: That the aforesaid amendment was duly adopted in
accordance with the applicable provisions of Section 242 of the General
Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to
be signed by Mac J. Slingerlend, President and Chief Executive Officer of the
Corporation this 29th day of October, 1999.
CIBER, INC.
a Delaware corporation
/s/ Mac J. Slingerlend
------------------------------------------
By: Mac J. Slingerlend
Title: President/Chief Executive Officer
<PAGE>
CIBER, INC.
AMENDED AND RESTATED BYLAWS
(Adopted August 17, 1999)
Article I
OFFICES
The registered office of CIBER, Inc. (the "Corporation") in the State of
Delaware shall be in the City of Wilmington, County of New Castle, State of
Delaware. The Corporation shall have offices at such other places as the
board of directors, in its discretion, may from time to time determine.
Article II
STOCKHOLDERS
Section 1. ANNUAL MEETINGS.
The annual meeting of stockholders for the election of directors and for
the transaction of such other business as may properly come before the
meeting shall be held on the third Tuesday of November in each year, or on
such date as the board of directors shall each year fix. Each such annual
meeting shall be held at such place, within or without the State of Delaware,
and hour as shall be determined by the board of directors. The day, place and
hour of each annual meeting shall be specified in the notice of such annual
meeting. Any annual meeting of stockholders may be adjourned from time to
time and place to place until its business is completed.
Section 2. BUSINESS CONDUCTED AT MEETINGS.
At an annual meeting of stockholders, only such business shall be
conducted as shall have been properly brought before the meeting. To be
properly brought before an annual meeting, business must be (a) specified in
the notice of meeting (or any supplement thereto) given by or at the
direction of the board of directors, (b) otherwise properly brought before
the meeting by or at the direction of the board of directors, or (c)
otherwise properly brought before the meeting by a stockholder. For business
to be properly brought before an annual meeting by a stockholder, the
stockholder must have given timely notice thereof in writing to the secretary
of the Corporation. To be timely, a stockholder's notice must be delivered to
or mailed and received at the principal executive offices of the Corporation,
not less than ninety days prior to the anniversary date of the immediately
preceding annual meeting. A stockholder's notice to the secretary shall set
forth as to each matter the stockholder proposes to bring before the annual
meeting (a) a brief description of the business desired to be brought before
the annual meeting, (b) the name and address, as they appear on the
Corporation's books, of the stockholder proposing such business, (c) the
class and number of shares of the Corporation which are beneficially owned
by the stockholder, and (d) any material interest of
<PAGE>
the stockholder in such business. Notwithstanding anything in the Bylaws to
the contrary, no business shall be conducted at an annual meeting except in
accordance with the procedures set forth in this Section 2. The presiding
officer at an annual meeting shall, if the facts warrant, determine and
declare to the meeting that business was not properly brought before the
meeting in accordance with the provisions of this Section 2, and if he should
so determine, he shall so declare to the meeting and any such business not
properly brought before the meeting shall not be transacted.
Section 3. SPECIAL MEETINGS.
Except as otherwise required by law or by the Certificate of
Incorporation and subject to the rights of the holders of any class or series
of stock having a preference over the common stock, special meetings of
stockholders may be called only by the chairman of the board, the chief
executive officer, the president, the executive vice president or the board
of directors pursuant to a resolution approved by a majority of the entire
board of directors. The term "entire board of directors," as used in these
Bylaws, means the total number of directors which the Corporation would have
if there were no vacancies.
Section 4. STOCKHOLDER ACTION: HOW TAKEN.
Any action required or permitted to be taken by the stockholders of the
Corporation must be effected at a duly called annual or special meeting of
such stockholders and may be effected without a meeting, without prior notice
and without a vote, if a consent in writing, setting forth the action so
taken, shall be signed by stockholders holding not less than two-thirds of
the voting power of the outstanding stock entitled to vote. Prompt notice of
the taking of the corporate action without a meeting by less than unanimous
written consent shall be given to those stockholders who have not consented
in writing.
Section 5. NOTICE OF MEETING.
Written notice stating the place, date and hour of the meeting and, in
case of a special meeting, the purpose or purposes for which the meeting is
called, shall be given not less than ten nor more than sixty days before the
date of the meeting, except as otherwise required by statute or the
Certificate of Incorporation, either personally or by mail, prepaid telegram,
telex, facsimile transmission, cablegram, or radiogram, to each stockholder
of record entitled to vote at such meeting. If mailed, such notice shall be
deemed to be given when deposited in the United States mail, postage prepaid,
addressed to the stockholder at his address as it appears on the stock
records of the Corporation. If given personally or otherwise than by mail,
such notice shall be deemed to be given when either handed to the stockholder
or delivered to the stockholder's address as it appears on the stock records
of the Corporation.
2
<PAGE>
Section 6. WAIVER.
Attendance of a stockholder of the Corporation, either in person or by
proxy, at any meeting, whether annual or special, shall constitute a waiver
of notice of such meeting, except where a stockholder attends a meeting for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. A written waiver of notice of any such meeting signed by a
stockholder or stockholders entitled to such notice, whether before, at or
after the time for notice or the time of the meeting, shall be equivalent to
notice. Neither the business to be transacted at, nor the purposes of, any
meeting need be specified in any written waiver of notice.
Section 7. VOTING LIST.
The secretary shall prepare and make available, at least ten days before
every meeting of stockholders, a complete list of the stockholders entitled
to vote at the meeting, arranged in alphabetical order and showing the
address and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder for any purpose
germane to the meeting, during ordinary business hours, for a period of at
least ten days prior to the meeting, either at a place within the city where
the meeting is to be held, which place shall be specified in the notice of
the meeting or, if not so specified, at the place where the meeting is to be
held. The list shall be produced and kept at the place of the meeting during
the whole time thereof and may be inspected by any stockholder who is present.
Section 8. QUORUM.
Except as otherwise required by law, the Certificate of Incorporation or
these Bylaws, the holders of not less than one-third of the shares entitled
to vote at any meeting of the stockholders, present in person or by proxy,
shall constitute a quorum, and the act of the majority of such quorum shall
be deemed the act of the stockholders. If a quorum shall fail to attend any
meeting, the chairman of the meeting may adjourn the meeting from time to
time, without notice if the time and place are announced at the meeting,
until a quorum shall be present. At such adjourned meeting at which a quorum
is present, any business may be transacted which might have been transacted
at the original meeting. If the adjournment is for more than thirty days or
if after the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each stockholder
of record entitled to vote at the meeting.
If a notice of any adjourned special meeting of stockholders is sent to
all stockholders entitled to vote thereat, stating that it will be held with
those present constituting a quorum, then, notwithstanding the prior
paragraph and except as otherwise required by law, those present at such
adjourned meeting shall constitute a quorum, and all matters shall be
determined by a majority of votes cast at such meeting.
3
<PAGE>
Section 9. RECORD DATE.
In order that the Corporation may determine the stockholders entitled to
notice of or to vote at any meeting, or at any adjournment of a meeting of
stockholders; or entitled to receive payment of any dividend or other
distribution or allotment of any rights; or entitled to exercise any rights
in respect of any change, conversion, or exchange of stock; or for the
purpose of any other lawful action; the board of directors may fix, in
advance, a record date, which record date shall not precede the date upon
which the resolution fixing the record date is adopted by the board of
directors. The record date for determining the stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournments
thereof shall not be more than sixty nor less than ten days before the date
of such meeting. The record date for any other action shall not be more
than sixty days prior to such action. If no record date is fixed, (i) the
record date for determining stockholders entitled to notice of or to vote at
any meeting shall be the close of business on the day next preceding the day
on which notice is given or, if notice is waived by all stockholders, at the
close of business on the day next preceding the day on which the meeting is
held; and (ii) the record date for determining stockholders for any other
purpose shall be at the close of business on the day on which the board of
directors adopts the resolution relating to such other purpose. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the board of directors may fix a new record date for
the adjourned meeting.
Section 10. PROCEDURE.
The order of business and all other matters of procedure at every
meeting of the stockholders may be determined by the presiding officer.
Article III
DIRECTORS
Section 1. NUMBER.
Except as otherwise fixed pursuant to the provisions of the Certificate
of Incorporation, including Article 4 relating to the rights of the holders
of any class or series of stock having a preference over the common stock,
the number of directors shall be fixed from time to time exclusively by
resolutions adopted by the board of directors; provided, however, that the
number of directors shall at no time be less than three nor greater than
eleven and further provided that no decrease in the number of directors
constituting the board of directors shall shorten the term of any incumbent
director.
4
<PAGE>
Section 2. ELECTION AND TERMS.
The directors shall be divided into three classes as determined by the
board of directors, designated as Class I, Class II and Class III. Each class
shall consist, as nearly as may be possible, of one-third of the total number
of directors constituting the entire board of directors. At the next annual
meeting of stockholders, Class I directors shall be elected for a one-year
term, Class II directors shall be elected for a two-year term and Class m
directors for a three-year term. At each succeeding annual meeting of
stockholders thereafter, successors to the class of directors whose terms
expire at that annual meeting shall be elected for a three-year term. If the
number of directors has changed, any increase or decrease shall be
apportioned among the classes so as to maintain the number of directors in
each class as nearly equal as possible, but in no case will a decrease in the
number of directors shorten the term of any incumbent director. A director
shall hold office until the annual meeting for the year in which his term
expires and until his successor shall be elected and qualified, subject,
however, to such director's prior death, resignation, retirement,
disqualification or removal from office.
Subject to the rights of holders of any class or series of stock having
a preference over the common stock, nominations for the election of directors
may be made by the board of directors or a committee appointed by the board
of directors or by any stockholder entitled to vote in the election of
directors generally. However, any stockholder entitled to vote in the
election of directors generally may nominate one or more persons for election
as directors at a meeting only if written notice of such stockholder's intent
to make such nomination or nominations has been given, either by personal
delivery or by United States mail, postage prepaid, to the secretary of the
Corporation no later than (i) with respect to an election to be held at an
annual meeting of stockholders, ninety days prior to the anniversary date of
the immediately preceding annual meeting, and (ii) with respect to an
election to be held at a special meeting of stockholders for the election of
directors, the close of business on the tenth day following the date on which
notice of such meeting is first given to stockholders. Each such notice shall
set forth: (a) the name and address of the stockholder who intends to make
the nomination and of the person or persons to be nominated; (b)
representation that the stockholder is a holder of record of stock of the
Corporation entitled to vote at such meeting and intends to appear in person
or by proxy at the meeting to nominate the person or persons specified in the
notice; (c) a description of all arrangements or understandings between the
stockholder and each nominee and any other person or persons (naming such
person or persons) pursuant to which the nomination or nominations are to be
made by the stockholder; (d) such other information regarding each nominee
proposed by such stockholder as would be required to be included in a proxy
statement filed pursuant to the proxy rules of the Securities and Exchange
Commission; and (e) the consent of each nominee to serve as a director of the
Corporation if so elected. The presiding officer of the meeting may refuse to
acknowledge the nomination of any person not made in compliance with the
foregoing procedure.
Section 3. NEWLY CREATED DIRECTORSHIPS AND VACANCIES.
Except as otherwise fixed pursuant to the provisions of Certificate of
Incorporation, including Article 4 relating to the rights of the holders of
any class or series of stock having a preference over
5
<PAGE>
the common stock, newly created directorships resulting from any increase in
the number of directors and any vacancies on the board of directors resulting
from death, resignation, disqualification, removal or other cause shall be
filled solely by the affirmative vote of a majority of the remaining
directors then in office or a sole remaining director, even though less than
a quorum of the board of directors. Any director elected in accordance with
the preceding sentence shall hold office for the remainder of the full term
of the new directorship which was created or in which the vacancy occurred
and until such director's successor shall have been elected and qualified.
Section 4. REGULAR MEETINGS.
The first meeting of each newly elected board of directors elected at
the annual meeting of stockholders shall be held immediately after and at the
same place as, the annual meeting of the stockholders, provided a quorum is
present, and no notice of such meeting shall be necessary in order to legally
constitute the meeting. Regular meetings of the board of directors shall be
held at such times and places as the board of directors may from time to time
determine.
Section 5. SPECIAL MEETINGS.
Special meetings of the board of directors may be called at any time, at
any place and for any purpose by the chairman of the executive committee, the
chairman of the board, the chief executive officer, or by any officer of the
Corporation upon the request of a majority of the entire board of directors.
Section 6. NOTICE OF MEETINGS.
Notice of regular meetings of the board of directors need not be given.
Notice of every special meeting of the board of directors shall be given
to each director at his usual place of business or at such other address as
shall have been furnished by him for such purpose. Such notice shall be
properly and timely given if it is (a) deposited in the United States mail
not later than the third calendar day preceding the date of the meeting or
(b) personally delivered, telegraphed, sent by facsimile transmission or
communicated by telephone at least twenty-four hours before the time of the
meeting. Such notice need not include a statement of the business to be
transacted at, or the purpose of, any such meeting.
Section 7. WAIVER.
Attendance of a director at a meeting of the board of directors shall
constitute a waiver of notice of such meeting, except where a director
attends a meeting for the express purpose of objecting, at the beginning of
the meeting, to the transaction of any business because the meeting is not
lawfully called or convened. A written waiver of notice signed by a director
or directors entitled to such notice, whether before, at, or after the time
for notice or the time of the meeting, shall be equivalent to the giving of
such notice.
6
<PAGE>
Section 8. QUORUM.
Except as may be otherwise provided by law, in the Certificate of
Incorporation, or in these Bylaws, the presence of a majority of the entire
board of directors shall be necessary and sufficient to constitute a quorum
for the transaction of business at any meeting of the board of directors, and
the act of a majority of the directors present at a meeting at which a quorum
is present shall be deemed the act of the board of directors. Less than a
quorum may adjourn any meeting of the board of directors from time to time
without notice.
Section 9. PARTICIPATION IN MEETINGS BY TELEPHONE.
Members of the board of directors, or of any committee thereof, may
participate in a meeting of such board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other and such participation shall
constitute presence in person at such meeting.
Section 10. POWERS.
The business, property and affairs of the Corporation shall be managed
by or under the direction of its board of directors, which shall have and may
exercise all the powers of the Corporation to do all such lawful acts and
things as are not by law, by the Certificate of Incorporation, or by these
Bylaws, directed or required to be exercised or done by the stockholders.
Section 11. COMPENSATION OF DIRECTORS.
Directors shall receive such compensation for their services as shall be
determined by a majority of the entire board of directors, provided that
directors who are serving the Corporation as officers or employees and who
receive compensation for their services as such officers or employees shall
not receive any salary or other compensation for their services as directors.
Section 12. ACTION WITHOUT A MEETING.
Unless otherwise restricted by the Certificate of Incorporation or these
Bylaws, any action required or permitted to be taken at any meeting of the
board of directors or any committee thereof may be taken without a meeting if
written consent thereto is signed by all members of the board of directors or
of such committee, as the case may be, and such written consent is filed with
the minutes of proceedings of the board or committee. Any such consent may be
in counterparts and shall be effective on the date of the last signature
thereon unless otherwise provided therein.
7
<PAGE>
Article IV
COMMITTEES
Section 1. DESIGNATION OF COMMITTEES.
The board of directors may establish committees for the performance of
delegated or designated functions to the extent permitted by law, each
committee to consist of one or more directors of the Corporation. In the
absence or disqualification of a member of a committee, the member or members
thereof present at any meeting and not disqualified from voting, whether or
not he or they constitute a quorum, may unanimously appoint another member of
the board of directors to act at the meeting in the place of such absent or
disqualified member.
Section 2. COMMITTEE POWERS AND AUTHORITY.
The board of directors may provide, by resolution or by amendment to
these Bylaws, that a committee may exercise all the power and authority of
the board of directors in the management of the business and affairs of the
Corporation, and may authorize the seal of the Corporation to be affixed to
all papers which may require it; provided, however, that a committee may not
exercise the power or authority of the board of directors in reference to
amending the Certificate of Incorporation (except that a committee may, to
the extent authorized in the resolution or resolutions providing for the
issuance of shares of stock adopted by the board of directors, pursuant to
Article 4 of the Certificate of Incorporation, fix the designations and any
of the preferences or rights of shares of preferred stock relating to
dividends, redemption, dissolution, any distribution of property or assets of
the Corporation, or the conversion into, or the exchange of shares for,
shares of any other class or classes or any other series of the same or any
other class or classes of stock of the Corporation or fix the number of
shares of any series of stock or authorize the increase or decrease of the
shares of any series), adopting an agreement of merger or consolidation,
recommending to the stockholders the sale, lease, or exchange of all or
substantially all of the Corporation's property and assets, recommending to
the stockholders a dissolution of the Corporation or a revocation of a
dissolution, or amending these Bylaws; and, unless the resolution expressly
so provides, no such committee shall have the power or authority to declare a
dividend or to authorize the issuance of stock.
Section 3. COMMITTEE PROCEDURES.
To the extent the board of directors or the committee does not establish
other procedures for the committee, each committee shall be governed by the
procedures established in Article III, Section 4 (except as they relate to an
annual meeting of the board of directors) and Article III, Sections 5, 6, 7,
9, 10, and 12 of these Bylaws, as if the committee were the board of
directors.
8
<PAGE>
Article V
OFFICERS
Section 1. GENERAL.
The Corporation shall have as officers a chief executive officer, a
president, a chief operating officer, such number of executive vice
presidents as the board of directors may from time to time determine, a
secretary, and a chief financial officer/treasurer, who shall be appointed by
the board of directors. The board of directors may appoint as additional
officers a chairman and other officers of the board. The board of directors,
the chief executive officer, and such other subordinate officers as the board
of directors may authorize from time to time, acting singly, may appoint as
additional officers one or more vice presidents, assistant secretaries,
assistant treasurers, and such other subordinate officers as the board of
directors, the chief executive officer, or such other appointing officers
deem necessary or appropriate; provided, however, that the board of directors
may reject or modify any appointment made by the chief executive officer or
other appointing officers.
Section 2. TERM OF OFFICE, RESIGNATION.
All officers, agents and employees of the Corporation shall hold their
respective offices or positions at the pleasure of the board of directors and
may be removed at any time by the board of directors with or without cause.
Any officer appointed by the chief executive officer or other appointing
officer may also be removed at any time by the person appointing the officer
with or without cause. Any officer may resign at any time by giving written
notice of his resignation to the board of directors, the chief executive
officer, the secretary, or to the officer who appointed the officer, and
acceptance of such resignation shall not be necessary to make it effective
unless the notice so provides. Any vacancy occurring in any office appointed
by the board of directors shall be filled by the board of directors. Any
vacancy occurring in any office appointed by the chief executive officer or
other appointing officer shall be filled by the person appointing the officer.
Section 3. DUTIES.
The officers of the Corporation shall perform the duties and exercise
the powers as may be assigned to them from time to time by the board of
directors, the chief executive officer or, with respect to officers who are
appointed by other appointing officers, by the persons appointing them;
provided, however, that the board of directors may change the duties and
powers of any officer appointed by the chief executive officer or other
appointing officers. In the absence of such assignment, the officers shall
have the duties and powers described in Sections 5 through 10 of this Article
V.
9
<PAGE>
Section 4. CHAIRMAN OF THE BOARD.
The chairman of the board shall preside at all meetings of the
stockholders and directors at which the chairman may be present and shall
have such other duties, powers and authority as may be prescribed elsewhere
in these Bylaws. The board of directors may delegate such other authority and
assign such additional duties to the chairman of the board, other than those
conferred by law exclusively upon the chief executive officer, as it may from
time to time determine.
Section 5. CHIEF EXECUTIVE OFFICER.
The chief executive officer shall be the chief executive officer of the
Corporation and, subject to the direction and control of the board of
directors, shall manage the business of the Corporation. The chief executive
officer shall preside at all meetings of the stockholders and directors at
which such officer may be present unless the board of directors has appointed
a chairman, vice chairman, or other officer of the board to preside at such
meetings. The chief executive officer may execute contracts, deeds and other
instruments on behalf of the Corporation and shall have full authority on
behalf of the Corporation to attend any meeting, give any waiver, cast any
vote, grant any discretionary or directed proxy to any person, and exercise
any other rights of ownership with respect to any shares of capital stock or
other securities held by the Corporation and issued by any other corporation
or with respect to any partnership, trust or similar interest held by the
Corporation.
Section 6. PRESIDENT.
The president, if any, shall be the officer next in rank after the chief
executive officer. The president shall have such authority, power, and
duties as are prescribed by the board of directors or the chief executive
officer and shall report to the chief executive officer. Upon the death,
absence, or disability of the chief executive officer, the president, if any,
shall have the authority, power, and duties of the chief executive officer.
The president may execute contracts, deeds and other instruments on behalf of
the Corporation. In the absence of the chief executive officer or in the
event of his disability, inability or refusal to act, the president shall
perform the duties and exercise the power of the chief executive officer. The
president shall have full authority on behalf of the Corporation to attend
any meeting, give any waiver, cast any vote, grant any discretionary or
directed proxy to any person, and exercise any other rights of ownership with
respect to any shares of capital stock or other securities held by the
Corporation and issued by any other corporation or with respect to any
partnership, trust or similar interest held by the Corporation.
Section 7. CHIEF OPERATING OFFICER.
The chief operating officer shall have such authority, power, and duties
as are prescribed by the board of directors or the chief executive officer.
The chief operating officer shall be the chief operating officer of the
Corporation and shall report to the chief executive officer. The president
may execute contracts, deeds and other instruments on behalf of the
Corporation. The president shall have full authority on behalf of the
Corporation to attend any meeting, give any waiver, cast any vote,
10
<PAGE>
grant any discretionary or directed proxy to any person, and exercise any
other rights of ownership with respect to any shares of capital stock or
other securities held by the Corporation and issued by any other corporation
or with respect to any partnership, trust or similar interest held by the
Corporation.
Section 8. EXECUTIVE VICE PRESIDENT.
Each executive vice president, if any, shall perform such functions as
may be prescribed by the board of directors, the chairman of the board and
chief executive officer or the president and chief operating officer. Each
executive vice president may execute contracts, deeds and other instruments
on behalf of the Corporation. Each executive vice president shall have full
authority on behalf of the Corporation to attend any meeting, give any
waiver, cast any vote, grant any discretionary or directed proxy to any
person, and exercise any other rights of ownership with respect to any shares
of capital stock or other securities held by the Corporation and issued by
any other corporation or with respect to any partnership, trust or similar
interest held by the Corporation. Upon the death, disability or absence of
the chief operating officer, the executive vice president (or if more than
one holds office, the executive vice president among those present who has
held such office for the longest continuous period, unless another method of
selection has been established by resolution of the board of directors) shall
perform the duties and exercise the powers of the president and chief
executive officer. Each executive vice president shall perform such other
duties as the board, the chairman of the board and chief executive officer or
the president and chief operating officer may from time to time prescribe or
delegate to him.
Section 9. VICE PRESIDENT.
Each vice president, if any, shall perform such functions as may be
prescribed by the board of directors, the chairman of the board and the chief
executive officer, the president and chief operating officer, or any
executive vice president. Each vice president may execute contracts, deeds
and other instruments on behalf of the Corporation. The vice president shall
have full authority on behalf of the Corporation to attend any meeting, give
any waiver, cast any vote, grant any discretionary or directed proxy to any
person, and exercise any other rights of ownership with respect to any shares
of capital stock or other securities held by the Corporation and issued by
any other corporation or with respect to any partnership, trust or similar
interest held by the Corporation. Upon the death, disability or absence of
the executive vice president, the vice president (or if more than one holds
office, the vice president among those present who has held such office for
the longest continuous period, unless another method of selection has been
established by resolution of the board of directors) shall perform the duties
and exercise the powers of the executive vice president. Each vice president
shall perform such other duties as the board, the chairman of the board and
chief executive officer, the president and chief operating officer, or any
executive vice president may from time to time prescribe or delegate to him.
Section 10. SECRETARY.
11
<PAGE>
The secretary shall give, or cause to be given, notice of all meetings
of the stockholders and, upon the request of a person entitled to call a
special meeting of the board of directors, he shall give notice of any such
special meeting. He shall keep the minutes of all meetings of the
stockholders, the board of directors, or any committee established by the
board of directors. The secretary shall be responsible for the maintenance of
all records of the Corporation and may attest documents on behalf of the
Corporation. The secretary shall perform such other duties as the board, the
chairman of the board and chief executive officer, the president and chief
operating officer or any vice president may from time to time prescribe or
delegate to him.
Section 11. CHIEF FINANCIAL OFFICER AND TREASURER.
The chief financial officer shall also be the treasurer of the
Corporation and shall be responsible for the control of the funds of the
Corporation and the custody of all securities owned by the Corporation. The
treasurer shall perform such other duties as the board, the chairman of the
board and chief executive officer, the president and chief operating officer
may from time to time prescribe or delegate to him.
Section 12. COMPENSATION.
Officers shall receive such compensation, if any, for their services as
may be authorized or ratified by the board of directors. Election or
appointment as an officer shall not of itself create a right to compensation
for services performed as such officer.
Article VI
INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES
Section 1. DIRECTORS AND OFFICERS.
Subject to the Certificate of Incorporation and the other sections of
this Article VI, the Corporation shall indemnify, to the fullest extent
permitted by, and in the manner permissible under, the laws of the State of
Delaware in effect on the date hereof and as amended from time to time, any
person who was or is threatened to be made, a party to any threatened,
pending or completed action, suit, or proceeding, whether criminal, civil,
administrative, or investigative, by reason of the fact that he, is or was a
director or officer of the Corporation, or, is or was serving at the request
of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, association, or other
enterprise, against expenses (including attorneys' fees), judgments, fines,
ERISA excise taxes or penalties, and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or
proceeding, including any action, suit or proceeding by or in the right of
the Corporation (a "Proceeding"). The Corporation shall advance all
reasonable expenses incurred by or on behalf of any such person in connection
with any Proceeding within ten days after the receipt by the Corporation of a
statement or statements from such person requesting such advance or advances
from time to time, whether prior to or after final disposition of
12
<PAGE>
such Proceeding. Such statement or statements shall reasonably evidence the
expenses incurred by such person and, if such person is an officer or
director of the Corporation, shall include or be preceded or accompanied by
an undertaking by or on behalf of such person to repay any expenses advanced
if it shall ultimately be determined that such person is not entitled to be
indemnified against such expenses. Costs, charges or expenses of
investigating or defending Proceedings for which indemnity shall be sought
hereunder may be incurred without the Corporation's consent; provided that no
settlement of any such Proceeding may be made without the Corporation's
consent, which consent shall not be unreasonably withheld.
Section 2. DETERMINATION OF RIGHT TO INDEMNIFICATION.
(a) Any indemnification requested by any person under Section 1 of this
Article VI shall be made no later than forty-five (45) days after receipt of
the written request of such person, unless a determination is made within
said forty-five (45) day period (i) by a majority vote of directors who are
not parties to such Proceedings, or (ii) in the event a quorum of
non-involved directors is not obtainable, at the election of the Corporation,
by independent legal counsel in a written opinion, that such person is not
entitled to indemnification hereunder.
(b) Notwithstanding a determination under Section 2(a) above that any
person is not entitled to indemnification with respect to a Proceeding, such
person shall have the right to apply to any court of competent jurisdiction
for the purpose of enforcing such person's right to indemnification pursuant
to these Bylaws. Neither the failure of the Corporation (including its board
of directors or independent legal counsel) to have made a determination prior
to the commencement of such action that such person is entitled to
indemnification hereunder, nor an actual determination by the Corporation
(including its board of directors or independent legal counsel) that such
person is not entitled to indemnification hereunder, shall be a defense to
the action or create any presumption that such person is not entitled to
indemnification hereunder.
(c) The Corporation shall indemnify any person against all expenses
incurred in connection with any hearing or Proceeding under this Section 2 if
such person prevails on the merits or otherwise in such Proceeding.
Section 3. SUBROGATION.
In the event of payment under these Bylaws, the indemnifying party or
parties shall be subrogated to the extent of such payment to all of the
rights of recovery of the indemnified person therefor, and such indemnified
person shall execute all papers required and shall do everything that may be
necessary to secure such rights, including the execution of such documents
necessary to enable the indemnifying party or parties to effectively bring
suit to enforce such rights.
Section 4. PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS.
13
<PAGE>
(a) In making a determination with respect to entitlement to
indemnification hereunder, the person or persons or entity making such
determination shall presume that such person is entitled to indemnification
under this Article, and the Corporation shall have the burden of proof to
overcome that presumption in connection with the making by any person,
persons or entity of any determination contrary to that presumption.
(b) The termination of any Proceeding or of any claim, issue or matter
therein, by judgment, order, settlement or conviction, or upon a plea of nolo
contendere or its equivalent, shall not (except as otherwise expressly
provided in these Bylaws) of itself adversely affect the right of any person
to indemnification or create a presumption that such person did not act in
good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Corporation or, with respect to any
criminal Proceeding, that such person had reasonable cause to believe that
his conduct was unlawful.
Section 5. EXCEPTION TO RIGHT OF INDEMNIFICATION OR ADVANCEMENT OF EXPENSES.
Notwithstanding any other provision of these Bylaws, no person shall be
entitled to indemnification or advancement of expenses under these Bylaws
with respect to any Proceeding brought by such person, unless the bringing of
such Proceeding or making of such claim shall have been approved by the board
of directors.
Section 6. CONTRACT.
The foregoing provisions of this Article VI shall be deemed to be a
contract between the Corporation and each director and officer who serves in
such capacity at any time while this bylaw is in effect, and any repeal or
modification thereof shall not affect any rights or obligations then existing
with respect to any state of facts then or theretofore existing or any
Proceeding theretofore or thereafter brought based in whole or in part upon
any such state of facts.
The foregoing rights of indemnification shall not be deemed exclusive of
any other rights to which any director or officer may be entitled apart from
the provisions of this Article VI.
Section 7. SURVIVING CORPORATION.
The board of directors may provide by resolution that references to "the
Corporation" in this Article VI shall include, in addition to this
Corporation, all constituent corporations absorbed in a merger with this
Corporation so that any person who was a director or officer of such a
constituent corporation or is or was serving at the request of such
constituent corporation as a director, employee, or agent of another
corporation, partnership, joint venture, trust, association, or other entity
shall stand in the same position under the provisions of this Article VI with
respect to this Corporation as he would if he had served this Corporation in
the same capacity or is or was so serving such other entity at the request of
this Corporation, as the case may be.
14
<PAGE>
Section 8. INUREMENT.
The indemnification and advancement of expenses provided by, or granted
pursuant to, this Article VI shall continue as to a person who has ceased to
be a director or officer and shall inure to the benefit of the heirs,
executors, and administrators of such person.
Section 9. EMPLOYEES AND AGENTS.
To the same extent as it may do for a director or officer, the
Corporation may indemnify and advance expenses to a person who is not and was
not a director or officer of the Corporation but who is or was an employee or
agent of the Corporation.
Article VII
CAPITAL STOCK
Section 1. CERTIFICATES.
Each stockholder of the Corporation shall be entitled to a certificate
or certificates signed by or in the name of the Corporation by the chairman
of the board and chief executive officer, the president or a vice president,
and by the treasurer, an assistant treasurer, the secretary or an assistant
secretary, certifying the number of shares of stock of the Corporation owned
by such stockholder. Any or all the signatures on the certificate may be a
facsimile.
Section 2. FACSIMILE SIGNATURES.
In case any officer, transfer agent or registrar who has signed or whose
facsimile signature has been placed upon a certificate shall have ceased to
be such officer, transfer agent or registrar before such certificate is
issued, it may be issued by the Corporation with the same effect as if he,
she or it was such officer, transfer agent or registrar at the date of issue.
Section 3. REGISTERED STOCKHOLDERS.
The Corporation shall be entitled to treat the holder of record of any
share or shares of stock of the Corporation as the holder in fact thereof
and, accordingly, shall not be bound to recognize any equitable or other
claim to or interest in such share or shares on the part of any other person,
whether or not it has actual or other notice thereof, except as provided by
law.
Section 4. CANCELLATION OF CERTIFICATES.
All certificates surrendered to the Corporation shall be cancelled and,
except in the case of lost, stolen or destroyed certificates, no new
certificates shall be issued until the former certificate or
15
<PAGE>
certificates for the same number of shares of the same class of stock have
been surrendered and cancelled.
Section 5. LOST, STOLEN OR DESTROYED CERTIFICATES.
The board of directors may direct a new certificate or certificates to
be issued in place of any certificate or certificates theretofore issued by
the Corporation alleged to have been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the person claiming the certificate or
certificates to be lost, stolen or destroyed. In its discretion, and as a
condition precedent to the issuance of any such new certificate or
certificates, the board of directors may require that the owner of such lost,
stolen or destroyed certificate or certificates, or such person's legal
representative, give the Corporation and its transfer agent or agents,
registrar or registrars a bond in such form and amount as the board of
directors may direct as indemnity against any claim that may be made against
the Corporation and its transfer agent or agents, registrar or registrars on
account of the alleged loss, theft or destruction of any such certificate or
the issuance of such new certificate.
Section 6. TRANSFER OF SHARES.
Shares of stock shall be transferable on the books of the Corporation by
the holder thereof, in person or by duly authorized attorney, upon the
surrender of the certificate or certificates representing the shares to be
transferred, properly endorsed, with such proof or guarantee of the
authenticity of the signature as the Corporation or its agents may reasonably
require.
Section 7. TRANSFER AGENTS AND REGISTRARS.
The Corporation may have one or more transfer agents and one or more
registrars of its stock, whose respective duties the board of directors may,
from time to time, define. No certificate of stock shall be valid until
countersigned by a transfer agent, if the Corporation shall have a transfer
agent, or until registered by the registrar, if the Corporation shall have a
registrar. The duties of transfer agent and registrar may be combined.
Article VIII
SEAL
The board of directors may adopt and provide a seal which shall be
circular in form and shall bear the name of the Corporation and the words
"Seal" and "Delaware," and which, when adopted shall constitute the corporate
seal of the Corporation.
Article IX
FISCAL YEAR
16
<PAGE>
The fiscal year for the Corporation shall close on the 30th of June of
each year.
Article X
AMENDMENTS
Subject to the provisions of the Certificate of Incorporation, these
Amended and Restated Bylaws may be altered, amended or repealed at any
regular meeting of the stockholders (or at any special meeting thereof duly
called for that purpose) by a majority vote of the shares represented and
entitled to vote at such meeting; provided that in the notice of such special
meeting, notice of such purpose shall be given. Subject to the laws of the
State of Delaware, the Certificate of Incorporation and these Amended and
Restated Bylaws, the board of directors may, by majority vote of those
present at any meeting at which a quorum is present, amend these Amended and
Restated Bylaws, or enact such other Bylaws as in their judgment may be
advisable for the regulation of the conduct of the affairs of the Corporation.
/s/ Mac J. Slingerlend
--------------------------------
Mac J. Slingerlend, Secretary
17
<PAGE>
UNSECURED CREDIT AGREEMENT
between
CIBER, INC.
and
UMB BANK COLORADO
Dated as of November 1, 1999
<PAGE>
UNSECURED CREDIT AGREEMENT
THIS AGREEMENT, dated as of the 1st day of November, 1999 is made by
and between CIBER, Inc., a Delaware corporation (the "Borrower") and UMB Bank
Colorado, a Colorado banking corporation ("UMB").
WHEREAS, the Borrower has requested an aggregate credit facility of up
to $50,000,000 through July 1, 2000, reducing to $35,000,000 through January
31, 2001, in revolving loans under this Unsecured Credit Agreement for
working capital purposes and acquisitions; and
WHEREAS, UMB is willing to extend such credit facility to the Borrower
on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein contained, the parties mutually agree as follows:
1. DEFINITIONS.
1.1 ACCOUNTING TERMS. All accounting and financial terms
used herein are used with the meanings such terms are given in accordance
with generally accepted accounting principles, except as may be otherwise
specifically provided in this Agreement.
1.2 DEFINED TERMS.
"AGREEMENT" means this Unsecured Credit Agreement, as
amended from time to time.
"AUTHORIZED OFFICER" means Mac J. Slingerlend, or such
other officer or employee of the Borrower whose authority to perform acts to
be performed only by an Authorized
<PAGE>
Officer under this Agreement is evidenced to UMB by a certified copy of an
appropriate resolution of the Board of Directors of the Borrower.
"BUSINESS DAY" means any day other than a Saturday or
Sunday on which UMB is not authorized or required to close.
"CONSOLIDATED NET OPERATING INCOME" means the net
operating income of the Borrower and its Subsidiaries as shown on its annual
audited consolidated financial statements or on its interim unaudited
consolidated financial statements, all as prepared on a consistent basis in
accordance with generally accepted accounting principles; provided that, for
purposes of calculating Consolidated Net Operating Income for any period, (I)
any Person which was not a Consolidated Subsidiary at the beginning of such
period but was a Consolidated Subsidiary at the end of such period shall be
deemed to have been a Consolidated Subsidiary for the entire period and (II)
any person which was a Consolidated Subsidiary at the beginning of such
period but was not a Consolidated Subsidiary at the end of such period shall
be deemed to have not been a Consolidated Subsidiary for the entire period.
"CONSOLIDATED SUBSIDIARY" means at any date any
Subsidiary or other entity the accounts of which would be consolidated with
those of the Borrower in its consolidated financial statements as of such
date.
"DEBT" of any Person means at any date, without
duplication, all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments
"DEBT SERVICE COVERAGE RATIO" means, as of the end of
each calendar quarter, the ratio of (i) Consolidated Net Operating Income
plus amortization allowances for the calendar
2
<PAGE>
quarter of the Borrower and its Subsidiaries then most recently ended
multiplied by four (4) to (ii) the total of all current maturities of
long-term Debt of the Borrower and its Subsidiaries.
"GOVERNMENTAL AUTHORITY" means any nation or government,
any state or other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
or pertaining to government, including, without limitation, any agency, body,
commission, court or department thereof, whether federal, state, local or
foreign.
"LIBOR RATE" means the 30, 60 or 90 day LIBOR as
published from time to time in the western edition of The Wall Street
Journal, if such rate is available.
"LIEN" means, with respect to any asset, any lien,
charge, mortgage, security interest, pledge or other encumbrance of any kind
in respect to such asset or any preferential arrangement with respect to such
asset, excluding the interest of a vendor or lessor under any conditional
sale agreement, purchase money security agreement, capital lease or other
title retention agreement relating to such asset.
"LOAN DOCUMENTS" means this Agreement, the Notes and any
other documents, instruments or writings now or hereafter executed and
delivered by or on behalf of the Borrower to UMB to further evidence or
govern the Loans.
"LOAN" and "LOANS" means advances pursuant to the
Revolving Credit.
"NOTES" OR "NOTES" means the Revolving Credit Notes, as
the context may require.
"PERSON" means and includes an individual, a
partnership, a joint venture, a corporation, a limited liability company, a
trust, an unincorporated organization and a Governmental Authority.
3
<PAGE>
"SUBSIDIARY" shall mean any corporation or other entity
of which capital stock or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other persons
performing similar functions is at the time directly or indirectly owned by
the Borrower. For purposes hereof, "control" means the possession, directly
or indirectly, of the power to direct or cause the direction of management
and policies of corporations, partnerships or other business entities in
which a direct or indirect ownership interest exists, whether through the
ownership of voting securities, by contract or otherwise.
1.3 SINGULAR AND PLURAL. The foregoing definitions shall be
equally applicable to both the singular and plural forms of the defined terms.
2. REVOLVING CREDIT.
2.1 THE REVOLVING CREDIT. Subject to all terms and
conditions hereof, UMB agrees to lend to the Borrower during the period of
time beginning on the date hereof and ending on December 1, 2000, such amount
or amounts as the Borrower may from time to time request to borrow up to an
aggregate outstanding principal amount owing to UMB of, but not exceeding at
any time, $50,000,000 through July 1, 2000, reducing to $35,000,000 through
January 31, 2001 (the "Revolving Credit"). The Borrower may prepay all or
any part of the outstanding obligations hereunder at any time on one (1)
business day's prior notice and without penalty on a FIFO basis. Any
prepayment of the outstanding amount of all Loans under the Revolving Credit
shall include accrued interest thereon. Upon any payment prior to January 31,
2001 of Loans under the Revolving Credit, UMB agrees to lend to the Borrower
from time to time during the period beginning upon the date of this Agreement
and ending on January 31, 2001, an aggregate principal amount not to exceed
the difference between (i) the then outstanding aggregate principal amount of
the Borrower's
4
<PAGE>
aggregate indebtedness under the Revolving Credit, and (ii) the amount of the
Revolving Credit; provided, however, that UMB shall have no obligation to
make any such Loan if an Event of Default has occurred and is then
continuing, regardless of whether any required notice has been given.
At the time of execution hereof, an Authorized Officer of the Borrower
shall execute promissory note in the form of Exhibit A attached hereto and
incorporated herein by reference (the "Revolving Credit Note" which shall
include all extensions and renewals thereof and replacements therefor, if
any). The Revolving Credit Note shall be due and payable to UMB in full on
January 31, 2001. As the Borrower desires to obtain Loans pursuant to the
Revolving Credit hereunder, it shall verbally give UMB notice of the
Borrower's intention to borrow pursuant to the Revolving Credit as early as
possible on or before the proposed date of borrowing. UMB may conclusively
rely on any such verbal request which shall have been received by it in good
faith from a Person reasonably believed to be an Authorized Officer. Upon
compliance with all conditions of lending stated in this Agreement applicable
to the Revolving Credit, UMB shall disburse the amount of the requested Loan
to the Borrower by causing the same to be deposited in the Borrower's main
operating account at UMB, and the Borrower hereby authorizes the disbursement
of borrowings under the Revolving Credit in such manner. All borrowings and
payments by the Borrower under the Revolving Credit shall be recorded by UMB
on its books and records and the principal amount outstanding from time to
time, plus interest payable thereon, shall be determined by reference to the
books and records of UMB. Such books and records shall be rebuttably
presumed to be correct as to such matters. In the event of any conflict
between the terms of the Revolving Credit Note executed hereunder and the
terms of this Agreement, the terms of the Revolving Credit Note shall
control. All Loans of the Borrower under the Revolving Credit shall be
reduced to zero by January 31, 2001.
5
<PAGE>
2.2 MANDATORY PREPAYMENT OF REVOLVING CREDIT. In the event
that the maximum principal amount of Loans which is outstanding under the
Revolving Credit is at any time greater than the maximum amount which is then
authorized to be outstanding thereunder, the Borrower will immediately, upon
written notice from UMB, pay to UMB the difference between the outstanding
principal amount and the principal amount then authorized to be outstanding
thereunder plus all accrued interest thereon.
3. INTEREST/FEES.
3.1 INTEREST RATE. Each Loan under the Revolving Credit and
shall bear interest, on the outstanding principal amount thereof, for each
day from the date such Loan is made until it becomes due, at a rate equal to
the 30, 60 or 90 day LIBOR, at the Company's request at the time the advance
is made, plus 200 basis points. The LIBOR shall be initially determined for
all Loans under the Revolving Credit, as of the Business Day immediately
preceding the initial Loan under the Revolving Credit, as the case may be,
and thereafter for all loans under the Revolving Credit, such rate so
determined to be fixed for the 30, 60 of 90 day period. Interest on the
Revolving Credit Note shall be payable monthly on the first (1st) business
day of each calendar month.
3.2 CALCULATION OF INTEREST. Interest shall be computed on
the basis of days elapsed and assuming a 360-day year.
3.3 CREDIT COMMITMENT FEE. The Borrower shall pay to UMB
commencing on December 31, 1999, and continuing on the last day of each
March, June, September and December thereafter, so long as the Revolving
Credit is available, a commitment fee equal to .225%, on an annualized basis,
of the average daily unused portion of the first Twenty-Five Million and
no/100 Dollars ($25,000,000), reducing back to the first Twenty Million and
no/100 Dollars ($20,000,000)
6
<PAGE>
on July 1, 2000, or at which time the Revolving Credit reduces back to Thirty
Five Million and no/100 Dollars ($35,000,000), of the Revolving Credit during
the immediately preceding three (3) month period ending March 31, June 30,
September 30 or December 31 or any shorter period in the case of the first
period or in the event of the full termination of the Revolving Credit (the
"Commitment Fee Periods"). Effective as of the relevant payment date, the
obligation to pay the commitment fee shall be an absolute obligation of the
Borrower, not subject to cancellation or reduction for any reason, including,
without limitation, termination, in whole or in part, of the Revolving
Credit, and, once paid, the commitment fee shall be non-refundable; provided,
however, to the extent the Revolving Credit is reduced or terminated, then
the fee payable by the Borrower for the next succeeding Commitment Fee
Periods shall be accordingly reduced. UMB is hereby authorized by the
Borrower to automatically debit any of the Borrower's accounts with UMB for
the payment of any commitment fee due and payable hereunder. UMB shall give
notice of any such debit to the Borrower when any such debit is made. The
Revolving Credit commitment fee shall be computed on the basis of days
elapsed and assuming a 360-day year.
3.4 BUSINESS DAY. If any installment of principal or
interest on any Loan becomes due and payable on a day other than a Business
Day, the maturity of the installment of principal or interest shall be
extended to the next succeeding Business Day, and interest shall be payable
during such extension of maturity.
4. CONDITIONS TO MAKING LOANS. UMB's obligation to make any Loan
pursuant to this Agreement shall be subject to compliance by the Borrower
with all of its obligations hereunder and to the following specific
conditions being met by the Borrower at the time of the making of each
borrowing hereunder:
7
<PAGE>
4.1 NO ADVERSE CHANGE IN BUSINESS. The Borrower shall not
have experienced any material adverse change in the conduct of its business,
operations, financial condition or otherwise since the date of this Agreement.
4.2 REPRESENTATIONS. The covenants, representations and
warranties made in Sections 5, 6 and 7 shall be true and correct as of the
date of each borrowing made hereunder, and an Authorized Officer of the
Borrower shall certify in writing to the same; provided, however, the
representations and warranties made with respect to financial statements
shall be deemed to refer to the most recent financial statements furnished to
UMB pursuant to Section 5.1 hereof.
4.3 REQUIRED CONSENTS AND APPROVALS. All approvals required
from the Board of Directors of the Borrower for the execution of this
Agreement, the borrowings contemplated hereunder and the execution of all
documents to be executed hereunder have been obtained and shall be in full
force and effect.
4.4 NO DEFAULTS.
(1) The Borrower shall be in compliance with all of the terms
and conditions hereof, and no Event of Default shall have occurred and be
continuing, regardless of whether any required notice has been given; and
(2) After giving effect to the requested borrowing and to each
borrowing that has been made and is then unpaid, the aggregate principal
amount of all outstanding Loans shall not exceed the sum of the Revolving
Credit then in effect.
4.5 APPLICATION CONSTITUTES REPRESENTATION. Each verbal
application by the Borrower for any borrowing shall be and constitute a
representation that the representations set forth in Sections 4.1 through 4.4
hereof are true and correct.
8
<PAGE>
5. AFFIRMATIVE COVENANTS. The Borrower covenants and agrees from
the date hereof and until payment in full of all obligations incurred
pursuant to this Agreement, that it shall comply with each of the following
provisions:
5.1 FINANCIAL AND BUSINESS INFORMATION. The Borrower will
furnish to UMB as soon as reasonably available after the end of each fiscal
year, but in no event later than 120 days following the end of its fiscal
year, its audited consolidated financial statements without qualification
including, at a minimum, a balance sheet, statements of income and
stockholders' equity and a statement of cash flows for such fiscal year, all
of which shall have been reported by independent certified public accountants
and which shall be in conformity with generally accepted accounting
principles consistently applied. The Borrower will furnish to UMB for each
calendar month as soon as reasonably available, its consolidated financial
statements for the immediately preceding calendar month, all such financial
statements to be certified by the Chief Financial Officer or Chief Accounting
Officer of the Borrower. Such monthly financial statements shall include a
balance sheet and statements of income. Notwithstanding the foregoing, in the
event applicable regulations of the Securities and Exchange Commission
prohibit the disclosure of monthly financial statements the Borrower shall
provide UMB with quarterly financial statements in the same form as would
otherwise be required for monthly financial statements no later than 45 days
following the end of each calendar quarter of the Borrower. The Borrower
further agrees to at all times keep accurate and complete records of its
financial condition and of its assets, and it agrees that it will furnish to
UMB, at the Borrower's expense, from time to time such other and further
information regarding its and its Subsidiaries' financial condition as UMB
may reasonably request, including upon such request by UMB, an opportunity or
opportunities for employees or representatives of UMB to inspect, audit,
9
<PAGE>
check, examine and copy books and records of the Borrower and its
Subsidiaries and meet with representatives of the Borrower to discuss the
business and financial condition of the Borrower and its Subsidiaries.
Within 30 days after he end of each calendar month, the Borrower will furnish
to UMB a certificate of the Chief Financial Officer or the Chief Accounting
Officer of the Borrower in the form of Exhibit B attached hereto (i) setting
forth in reasonable detail the calculations required to establish whether the
Borrower was in compliance with the requirements of Sections 5.5, 5.6 and 5.7
on the date of such financial statements and (ii) stating, to the best of his
or her knowledge and belief after due inquiry and review of the Borrower's
books and records, whether there exists on the date of such certificate any
Event of Default, regardless of whether any required notice has been given,
and, if any Event of Default exists, setting forth the details thereof and
the action which the Borrower is taking or proposes to take with respect
thereto.
5.2 CORPORATE EXISTENCE AND MAINTENANCE OF PROPERTY.
Subject to the terms of Section 6.1 of this Agreement, the Borrower will, and
will cause its Subsidiaries to, do or cause to be done all things necessary
or appropriate to preserve and keep in full force and effect and in good
standing its and their corporate existence, its and their authority to
continue to do business and conduct its and their operations and its and
their rights and franchises now or hereafter possessed. Subject to the terms
of Section 6.1 of this Agreement, the Borrower will, and will cause its
Subsidiaries to, preserve and maintain its and their property and assets used
or useful in the conduct of its and their business and cause the same to be
kept in good repair, working order and condition.
5.3 TAXES, CHARGES AND CLAIMS. The Borrower will, and will
cause its Subsidiaries to, pay and discharge all taxes, assessments,
governmental charges or levies invoked upon it or them or its or their income
or profits or its or their property or assets and all indebtedness payable by
it or
10
<PAGE>
them before the same shall be deemed in default, as well as all lawful claims
for labor, materials and supplies which, if unpaid, might become a lien or
charge upon such property or assets or any part thereof, provided, however,
that the Borrower and its Subsidiaries shall not be required to pay and
discharge any such tax, assessment, charge, levy, claim or indebtedness so
long as the validity thereof shall be contested in good faith by an
appropriate proceeding, and the Borrower or any of its Subsidiaries, as the
case may be, shall have set aside on its books adequate reserves to cover the
contested item.
5.4 LOCATION OF RECORDS. The location of the Borrower's
books and records and the books and records of each of its Subsidiaries shall
not be changed by the Borrower or any of its Subsidiaries without giving
written notice of the address of the new location to UMB at least 30 days
prior to such a change.
5.5 LEVERAGE RATIO. At all times while any Loans are
outstanding under the Revolving Credit and/or the Term Credit hereunder, at
all times prior to January 31, 2001, and until all obligations of the
Borrower hereunder are paid in full the Borrower will maintain a ratio of
total consolidated liabilities to consolidated net worth of not more than 1.5
to 1.
5.6 NET WORTH. At all times while any Loans are outstanding
under the Revolving Credit hereunder, at all times prior to January 31, 2001,
and until all obligations of the Borrower hereunder are paid in full the
Borrower will maintain a consolidated net worth of not less than $90,000,000.
5.7 DEBT SERVICE COVERAGE RATIO. At all times while any
Loans are outstanding under the Revolving Credit hereunder, at all times
prior to January 31, 2001, and until all obligations
11
<PAGE>
of the Borrower hereunder are paid in full, the Borrower will maintain a debt
service coverage ratio of at least 1.5 to 1.0.
5.8 BANKING ACCOUNTS. The Borrower shall maintain all of
its primary deposit accounts with UMB or any of its affiliates. UMB or its
affiliates, as the case may be, will in accordance with its or their Account
Analysis procedures give credit to the Borrower and its Subsidiaries for
their account balances, to the extent thereof, against charges for banking
services provided to the Borrower and its Subsidiaries; provided, however, to
the extent such account balances are insufficient to generate sufficient
credits during any calendar quarter to offset all charges for banking
services provided during such quarter the Borrower agrees to pay to UMB or
its affiliates, as the case may be, upon notice thereof the difference
between the total charges for banking services during such quarter and the
amount of account balance credits applied thereto.
6. NEGATIVE COVENANTS. The Borrower covenants and agrees from the
date hereof until payment in full of all obligations incurred pursuant to
this Agreement, that the Borrower shall comply with each of the following
provisions:
6.1 CONSOLIDATIONS, MERGERS AND SALES OF ASSETS. The
Borrower will not (i) consolidate or merge with or into any other Person
unless the Borrower is the surviving corporation and immediately after and
giving effect thereto no Event of Default, regardless of whether any required
notice has been given, shall have occurred and be continuing or (ii) sell,
lease or otherwise transfer all or substantially all of its Properties to any
other Person. The Borrower will not permit any Subsidiary to consolidate
with, merge with or into or transfer all or substantially all of its
Properties to any Person other than the Borrower or a wholly-owned
Consolidated Subsidiary. The Borrower will not, and will not permit any
Subsidiary to, sell, lease or otherwise transfer any
12
<PAGE>
substantial part of its Properties to any other Person (except, in the case
of a Subsidiary, to the Borrower or a wholly-owned Consolidated Subsidiary)
except for cash in an amount not less than the fair market value thereof.
6.2 LIMITATION ON DIVIDENDS. So long as no Event of Default
or a Default has occurred and is then continuing, regardless of whether any
required notice has been given, the Borrower may declare and pay dividends on
shares of its outstanding common stock.
6.3 LOANS AND GUARANTEES. The Borrower will not make any
loans or advances to any Person other than its Subsidiaries and Joint
Ventures which in the aggregate at any time exceed $500,000. The Borrower
will not, nor will it permit any of its Subsidiaries to, guarantee the
obligations of or otherwise be or become responsible for the obligations of
any other Person other than a Subsidiary to the extent the aggregate
outstanding amount of all such guarantees or responsibilities at any time
exceeds $500,000 without the prior written consent of UMB.
6.4 NO QUARTERLY LOSSES. The Borrower shall not incur a
consolidated net loss in any calendar quarter.
6.5 LIMITATION ON LIENS. The Borrower will not, nor will it
permit, any Subsidiary to create, assume or suffer to exist any Lien on any
property now owned or hereafter acquired by it or any Subsidiary, except for:
(1) Liens in favor of UMB;
(2) Liens for taxes, assessments or other governmental
charges not delinquent or which the Borrower or any Subsidiary, as the
case may be, is contesting, in good faith and by appropriate proceedings,
and as to which it has established adequate reserves;
(3) Liens to secure obligations under workman's
compensation or under Social Security or similar laws or under
unemployment insurance;
13
<PAGE>
(4) Mechanics', workmen's, materialmen's,
warehousemen's, carriers and other like Liens, arising in the ordinary
course of business with respect to obligations (i) which are not due or
(ii) which it is contesting in good faith and by appropriate proceedings,
and as to which it has established adequate reserves;
(5) Liens arising pursuant to any order of attachment,
distraint or similar legal process arising in connection with court
proceedings, so long as the execution or other enforcement thereof is
effectively stayed and the claims secured thereby are being contested in
good faith by appropriate proceedings.
(6) Liens with respect to any asset arising pursuant to
the interest of a vendor or lessor under any conditional sale agreement,
purchase money security agreement, capital lease or other title retention
agreement relating to such asset.
7. REPRESENTATIONS AND WARRANTIES. In order to induce UMB to
extend credit to the Borrower hereunder, the Borrower hereby represents and
warrants to UMB as of the date hereof and at all times hereafter while any
obligations are outstanding under this Agreement that:
7.1 CORPORATE EXISTENCE AND AUTHORITY. The Borrower is duly
incorporated and existing in good standing under the laws of the State of
Delaware and is qualified to do business as a foreign corporation in every
jurisdiction where the ownership of its Property or the nature of its
business requires qualification. Each Subsidiary of the Borrower is duly
incorporated in its respective state of incorporation and is existing in good
standing under the laws of such state and is qualified to do business as a
foreign corporation in every jurisdiction where the ownership of its
respective Property or the nature of its respective business requires
qualification. All ownership interests of the Borrower in such Subsidiaries
are held free and clear of all liens and encumbrances. The Borrower is duly
authorized to execute and deliver this Agreement, to borrow monies hereunder
and to execute and deliver Notes evidencing borrowings under this Agreement.
The execution and delivery of this Agreement and of all Notes evidencing
borrowings under this Agreement does not conflict with any
14
<PAGE>
provision of law, any order of any court or Government Authority, the
Articles of Incorporation or By-laws of the Borrower or any agreement binding
upon it.
7.2 TAX RETURNS. The Borrower has filed all tax returns
which are required to be filed and has paid, or made adequate provision for
the payment of, all taxes which have or may become due pursuant to said
returns or to assessments received by the Borrower. The Borrower knows of no
material additional assessments for which adequate reserves determined in
accordance with generally accepted accounting principles have not been
established. The Borrower has made adequate provision for the payment of all
current taxes.
7.3 FINANCIAL AND OTHER INFORMATION. All balance sheets and
statements of income and financial condition of the Borrower furnished by the
Borrower to UMB are materially correct and complete.
7.4 INSURANCE. The Borrower shall maintain, with
financially sound and reputable insurance companies, insurance against
liability for hazards and risks and liability to persons and property to the
extent and in the manner customary for companies in similar businesses
similarly situated. All policies of insurance maintained by the Borrower may
contain reasonable deductibles in amounts generally acceptable for companies
similarly situated in the Borrower's industry and the Borrower may self
insure as to those risks for which self insuring is reasonably acceptable for
companies similarly situated in the Borrower's industry.
15
<PAGE>
EVENTS OF DEFAULT. "Event of Default" shall mean any one or more of
the following:
8.1 Failure of the Borrower to cure, within 5 business days
after receipt of written notice of the same, any default in the payment of
principal or of interest or any other amount payable under this Agreement on
any obligations of the Borrower incurred pursuant to the terms and conditions
of this Agreement when and as the same shall become due and payable, whether
at the maturity date stated on any Note evidencing such obligations or at a
date fixed for prepayment or by acceleration or otherwise.
8.2 Material breach by the Borrower of any covenant,
obligation or requirement contained herein or in any document required to be
executed pursuant hereto or failure of the Borrower, within 30 days after
receipt of written notice specifying the same, to materially perform any
covenant, obligation or requirement contained in this Agreement or in the
other Loan Documents.
8.3 Any representation or warranty made by the Borrower
hereunder being untrue in any material respect now or hereafter; or any
schedule, statement, report, notice, information or writing furnished by the
Borrower to UMB being untrue in any material respect as of the date the facts
set forth therein are stated or certified.
8.4 Failure of any of the Borrower or any Subsidiary to
cure, within 5 business days after receipt of written notice of the same, any
default in the payment of principal or of interest on any Debt of the
Borrower or any Subsidiary payable to UMB other than indebtedness incurred
hereunder or payable to any person or entity other than UMB in the amount of
$10,000,000 or more when and as the same shall become due and payable,
whether at the maturity date stated on any note evidencing such Debt or at a
date fixed for prepayment or by acceleration or otherwise.
16
<PAGE>
8.5 The Borrower or any Subsidiary shall admit in writing
their inability to pay their debts as they mature; or the Borrower or any
Subsidiary shall make a general assignment for the benefit of creditors or
the Borrower or any Subsidiary, consents to, applies for or acquiesces in the
appointment of a trustee or receiver for any of them or for substantially all
of the Property of any of them; or the Borrower or any Subsidiary shall
suffer proceedings under any law relating to bankruptcy, insolvency or
reorganization or the release of debtors to be instituted by or against it,
and if contested, not dismissed or stayed within 60 days; the Borrower or any
Subsidiary shall suffer any writ of attachment or execution or any similar
process to be issued or levied against any material portion of its Property
which is not released, stayed, bonded or vacated within 60 days after its
issue or levy.
9. ACCELERATION. In the event of the occurrence of any one or
more Events of Default which are defined in paragraph 8 of this Agreement,
and if such Event of Default is not cured within the allowed grace period and
shall be continuing, UMB may declare the entire principal amount of all Notes
executed hereunder, together with accrued interest thereon, to be immediately
due and payable, and in the event of the occurrence of any one or more such
Events of Default and if such Event of Default is continuing, UMB may
terminate the Revolving Credit, all without further notice of any kind to the
Borrower. Upon the occurrence of an Event of Default, UMB may proceed to
enforce payment of all obligations of the Borrower to UMB under this
Agreement and may exercise any and all rights and remedies possessed by it.
10. GENERAL.
10.1 NOTICES. All notices hereunder shall be deemed to be
received 3 days after being deposited in the U.S. Mail addressed to either
party hereto at the following addresses or such
17
<PAGE>
other address as, from time to time, either party identifies in a written
notice to the other given pursuant to this Section 10.1 at least thirty (30)
days prior to the effective date of such new address:
If to UMB:
UMB Bank Colorado
1670 Broadway
Denver, Colorado 80202-4838
Attention: Ned C. Voth
If to the Borrower:
CIBER, Inc.
5251 DTC Parkway, Suite 1400
Englewood, Colorado 801112-0029
Attention: Mac J. Slingerlend.
10.2 NO WAIVERS. No failure or delay by UMB in exercising
any right, power or privilege hereunder shall operate as a waiver thereof;
nor shall any single or partial modification or waiver of any provision of
this Agreement or of any Note executed hereunder or a single or partial
exercise of any such right, power or privilege preclude any other or further
exercise of such or of any other right, power or privilege.
10.3 OFFSETS. The Borrower specifically agrees that upon the
occurrence of an Event of Default regardless of whether any required notice
has been given, and if such Event of Default is continuing, UMB shall be
entitled to exercise a right of setoff at any time, irrespective of the
stated maturity of all Notes executed hereunder evidencing the obligations of
the Borrower to UMB, and irrespective of the fact that UMB has not given any
notice of such setoff.
10.4 COLORADO LAW. This Agreement and all Notes issued
hereunder shall be deemed to be contracts made under and shall be construed
in accordance with the laws of the state of Colorado.
18
<PAGE>
10.5 SEVERABILITY. In the event any one or more of the
provisions of this Agreement or of any Note executed and delivered hereunder
shall be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
10.6 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original but when taken
together shall constitute but one agreement.
10.7 TITLES AND HEADINGS. All titles and headings which are
used in this Agreement are used solely for the convenience of the parties
hereto and are not part of the agreement of the parties.
10.8 ASSIGNMENT. This Agreement and all provisions hereof
shall be binding upon and shall inure to the benefit of the parties hereto
and their respective successors and assigns; provided, however, that the
Borrower may not assign any rights hereunder without the prior written
consent of UMB; and provided further that the Borrower acknowledges and
agrees that UMB may, without notice, assign all or any part of their rights
and obligations hereunder to any other bank or lender, at their sole
discretion, or may grant one or more participation interests in any of the
obligations of the Borrower hereunder to any other lender.
10.9 EXPENSES. The Borrower agrees to pay all out of pocket
expenses, including reasonable attorneys fees, incurred by UMB in connection
with the preparation and amendment of this Agreement and, to the extent allow
by law, the enforcement of the rights of UMB in connection with this
Agreement and all Notes executed and delivered pursuant hereto and in
connection with any amendment, extension or renewal thereof, or waivers
thereunder.
19
<PAGE>
10.10 WAIVER OF JURY TRIAL. IN THE EVENT OF ANY DISPUTE
BETWEEN THE BORROWER AND UMB RELATED IN ANY WAY TO THIS AGREEMENT WHICH
BECOMES THE SUBJECT OF ANY JUDICIAL PROCEEDING IN ANY COURT OF LAW, THE
BORROWER AND UMB HEREBY EACH WAIVE ANY RIGHT WHICH THEY MAY RESPECTIVELY HAVE
TO A TRIAL BY JURY.
10.11 INCORPORATION BY REFERENCE. Each of the Revolving
Credit Notes and the other Loan Documents are hereby made subject to all of
the terms, covenants, conditions, obligations, stipulations and agreements
contained in this Agreement to the same extent and effect as if fully set
forth therein, and this Agreement is hereby made subject to all of the terms,
covenants, conditions, obligations, stipulations and agreements contained in
the Revolving Credit Notes and the other Loan Documents to the same extent
and effect as if fully set forth herein. All Exhibits hereto are
incorporated herein by reference. All representations and warranties of the
Borrower contained herein in Section 7 have been or will be relied upon by
UMB notwithstanding any investigation made by or on behalf of them.
10.12 INTEREST RATE LIMITATION. Notwithstanding any
provisions of this Agreement or any of the Revolving Credit Notes or the Loan
Documents, in no event shall the amount of interest paid or agreed to be paid
by the Borrower exceed an amount computed at the highest rate of interest
permissible under applicable law. If, from any circumstances whatsoever,
fulfillment of any provision of this Agreement, the Revolving Credit Notes or
any Loan Document at the time performance of such provision shall be due,
shall involve exceeding the interest rate limitation validly prescribed by
law which a court of competent jurisdiction may deem applicable hereto, then,
the obligations to be fulfilled shall be reduced to an amount computed at the
highest rate of interest permissible under applicable law, and if for any
reason whatsoever UMB shall ever receive as interest an amount which
20
<PAGE>
would be deemed unlawful under such applicable law, such interest shall be
automatically applied to the payment of principal of the amounts outstanding
hereunder (whether or not then due and payable) and not to the payment of
interest, or shall be refunded to the Borrower if such principal and all
other obligations of the Borrower to UMB have been paid in full.
11. PRIOR AGREEMENTS SUPERSEDED/COMPLETE AGREEMENT. This Agreement
and all documents referred to herein contain the entire agreement of the
parties hereto with respect to the subject matter hereof and supersede the
terms and conditions of all prior agreements of the parties pertaining to the
subject matter hereof, specifically including but not limited to that certain
Credit Agreement between the parties dated as of December 1, 1998 and all
documents referred to therein; provided, however, this Agreement shall not
supersede any agreements of the Borrower set forth in any promissory notes
outstanding as of the date hereof which have been executed by the Borrower
and are not paid in full by use of the proceeds of any borrowing hereunder or
other funds available to the Borrower and in the event such promissory notes
are not so paid within thirty (30) days of the date hereof, all terms of such
promissory notes modified hereby shall be deemed to be in full force and
effect as if this Agreement had not been executed.
- -------------------------------------------------------------------------------
IN WITNESS WHEREOF, the parties hereto have executed and made this
Agreement effective as of the day and year first stated above.
CIBER, INC. UMB BANK COLORADO
By /s/ Mac J. Slingerlend By /s/ Ned C. Voth
------------------------------ ------------------------------
Mac J. Slingerlend Ned C. Voth
President, Chief Executive Chairman and Chief
Officer and Secretary Executive Officer
21
<PAGE>
EXHIBIT "B" TO
UNSECURED CREDIT
AGREEMENT
BORROWER'S CERTIFICATE
Date: ____________
To: UMB Bank Colorado
From: CIBER, Inc. (for itself and its Subsidiaries)
Pursuant to the Unsecured Credit Agreement dated as of November 1, 1999
between CIBER, Inc. ("Borrower") and UMB Bank Colorado (the "Bank") and all
amendments therein, if any (the "Agreement"), Borrower hereby certifies to
the following as of the date first stated above:
<TABLE>
<CAPTION>
FINANCIAL COVENANTS COMPLIANCE
- --------------------------------------------------------------------------------
ACTUAL YES NO
------ --- --
<S> <C> <C> <C>
1. Consolidated Net Worth must
exceed $90,000,000 at all times. ------ --- --
2. Leverage Ratio must not exceed 1.5:1.0
at all times. ------ --- --
3. Debt Service Coverage Ratio (as of the end
of the most recent calendar quarter) must
be at least 1.5:1.0. ------ --- --
</TABLE>
As used herein, all terms have the same meaning as that stated in the
Agreement and Notes executed pursuant thereto.
BORROWER IS NOT IN DEFAULT OR IN BREACH OF ANY OF ITS OBLIGATIONS UNDER THE
AGREEMENT, ANY NOTES EXECUTED PURSUANT THERETO OR ON ANY OTHER LIABILITY TO
BANK.
CIBER, INC.
By:
------------------------------
Title:
---------------------------
Date:
----------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE:
<S> <C>
1. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.1 Accounting Terms. . . . . . . . . . . . . . . . . . . . . .1
1.2 Defined Terms . . . . . . . . . . . . . . . . . . . . . . .1
1.3 Singular and Plural . . . . . . . . . . . . . . . . . . . .4
2. The Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
2.1 The Revolving Credit. . . . . . . . . . . . . . . . . . . .4
2.2 Mandatory Prepayment of Revolving Credit. . . . . . . . . .6
3. Interest/Fees. . . . . . . . . . . . . . . . . . . . . . . . . . .6
3.1 Interest Rate . . . . . . . . . . . . . . . . . . . . . . .6
3.2 Calculation of Interest . . . . . . . . . . . . . . . . . .6
3.3 Credit Commitment Fee . . . . . . . . . . . . . . . . . . .6
3.4 Business Day. . . . . . . . . . . . . . . . . . . . . . . .7
4. Conditions to Making Loans . . . . . . . . . . . . . . . . . . . .7
4.1 No Adverse Change in Business . . . . . . . . . . . . . . .8
4.2 Representations . . . . . . . . . . . . . . . . . . . . . .8
4.3 Required Consents and Approvals . . . . . . . . . . . . . .8
4.4 No Defaults . . . . . . . . . . . . . . . . . . . . . . . .8
4.5 Application Constitutes Representation. . . . . . . . . . .9
5. Affirmative Covenants. . . . . . . . . . . . . . . . . . . . . . .9
5.1 Financial and Business Information. . . . . . . . . . . . .9
5.2 Corporate Existence and Maintenance of Property . . . . . 10
5.3 Taxes, Charges and Claims . . . . . . . . . . . . . . . . 11
5.4 Location of Records and Property. . . . . . . . . . . . . 11
5.5 Leverage Ratio. . . . . . . . . . . . . . . . . . . . . . 11
5.6 Net Worth . . . . . . . . . . . . . . . . . . . . . . . . 11
5.7 Debt Service Coverage Ration . . . . . . . . . . . . . . 12
5.8 Banking Accounts. . . . . . . . . . . . . . . . . . . . . 12
6. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . 12
6.1 Consolidations, Mergers and Sales of Assets . . . . . . . 12
6.2 Limitation On Dividends . . . . . . . . . . . . . . . . . 13
6.3 Loans and Guarantees. . . . . . . . . . . . . . . . . . . 13
6.4 No Quarterly Losses . . . . . . . . . . . . . . . . . . . 13
6.5 Limitations on Liens. . . . . . . . . . . . . . . . . . . 13
<PAGE>
7. Representations and Warranties . . . . . . . . . . . . . . . . . 14
7.1 Corporate Existence and Authority . . . . . . . . . . . . 14
7.2 Tax Returns . . . . . . . . . . . . . . . . . . . . . . . 15
7.3 Financial and Other Information . . . . . . . . . . . . . 15
7.4 Insurance . . . . . . . . . . . . . . . . . . . . . . . . 15
8. Events of Default. . . . . . . . . . . . . . . . . . . . . . . . 16
9. Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . 17
10. General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
10.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 17
10.2 No Waivers. . . . . . . . . . . . . . . . . . . . . . . . 18
10.3 Offsets . . . . . . . . . . . . . . . . . . . . . . . . . 18
10.4 Colorado Law. . . . . . . . . . . . . . . . . . . . . . . 18
10.5 Severability. . . . . . . . . . . . . . . . . . . . . . . 19
10.6 Counterparts. . . . . . . . . . . . . . . . . . . . . . . 19
10.7 Titles and Headings . . . . . . . . . . . . . . . . . . . 19
10.8 Assignment. . . . . . . . . . . . . . . . . . . . . . . . 19
10.9 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . 19
10.10 Waiver of Jury Trial. . . . . . . . . . . . . . . . . . . 20
10.11 Incorporation by Reference. . . . . . . . . . . . . . . . 20
10.12 Interest Rate Limitation. . . . . . . . . . . . . . . . . 20
11. Prior Agreements Superseded/Complete Agreement . . . . . . . . . 21
Exhibits
A Note
B Borrower's Certificate
</TABLE>
<PAGE>
PROMISSORY NOTE
Englewood, Colorado
$300,000 July 26, 1999
FOR VALUE RECEIVED, the undersigned (referred to as "Makers") hereby
promise to pay to the order of CIBER, INC., a Delaware corporation (referred
to, together with any subsequent holder of this Note, as "Holder"), at 5251
DTC Parkway, Suite 1400, Englewood, Colorado 80111, or at such other place or
places as any Holder may designate from time to time, the principal amount of
the loan made by Holder to Makers hereunder. This Note shall not bear
interest except in the event of default as described below. All payments
hereunder shall be made in lawful money of the United States of America.
Principal shall be payable in accordance with the following terms:
1. Makers shall apply 75% of any bonuses (net of withholding taxes)
payable to Joseph A. Mancuso by CIBER, Inc. or its affiliates
("CIBER") after September 15, 1999 towards payment of the outstanding
balance due under the Note. As long as CIBER is the Holder of this
Note, CIBER shall have the right to offset the Note balance with75% of
any bonuses (net of withholding taxes) due to Joseph A. Mancuso. If
the amount applied towards payment of the Note pursuant to the
preceding provisions is less than $30,000 during the period from
September 16, 1999 until September 15, 2000 and, thereafter, during
the period from September 16 through September 15 of each successive
year, then Makers shall pay Holder the difference between $30,000 and
the amount applied to the Note (the "Deficiency") on or before
September 15.
2. In the event of a Termination for Cause (as defined in the Employment
Agreement as hereinafter defined), this Note shall be repayable in
full on the date the Property (as defined herein) is sold, or the
first anniversary of the termination date, whichever is earlier.
3. In the event of a Termination Other than for Cause (as defined in the
Employment Agreement), this Note shall be repayable in full on the
date the Property is sold or the second anniversary of the termination
date, whichever is earlier.
4. In the event of a Termination by Reason of Disability (as defined in
the Employment Agreement), this Note shall be repayable in full on the
date the Property is sold or the second anniversary of the termination
date, whichever is earlier.
5. In the event of Joseph A. Mancuso's death, this Note shall be
repayable in full upon the date the Property is sold or the second
anniversary of the date of death, whichever is earlier.
6. In the event of a Voluntary Termination (as defined in the Employment
Agreement), this Note shall be repayable in full on the date the
Property is sold or the first anniversary of the termination date,
whichever is earlier.
<PAGE>
7. In the event of a Termination Upon a Change in Control (as defined in
the Employment Agreement), this Note shall be repayable in full on the
date the Property is sold or the second anniversary of the termination
date.
Reference is made to the Employment Agreement between CIBER and Joseph
A. Mancuso, dated July 1, 1999 (the "Employment Agreement"), for definitions
of the termination provisions described above. The entire principal balance
outstanding, together with all accrued and unpaid interest, and together with
any other amounts due under this Note or under the Deed of Trust (as
hereinafter defined) or other instruments securing or executed in connection
with this Note, are due and payable in full on the date which is five years
from the date hereof.
All payments received hereunder shall be applied as follows: (i) first,
to any late charges, costs, attorneys' fees and other charges under this
Note, or under the Deed of Trust or any other instrument securing or executed
in connection with this Note, other than principal and interest; (ii) second,
to accrued interest; and (iii) third, to principal.
The payment of indebtedness evidenced by this Note is initially
unsecured; however, the Makers intend to utilize the proceeds of the Note to
purchase and improve real property. Within sixty (60) days of acquisition of
the real property, Makers will execute a Deed of Trust (the "Deed of Trust")
encumbering the acquired property which will be described in the Deed of
Trust (the "Property"). Reference is made to the Deed of Trust for a
description of the property subject thereto, and the rights and obligations
thereunder.
At the option of Holder and subject to any applicable grace period, the
entire balance of principal, accrued interest and other sums owing under this
Note shall become at once due and payable in full, without notice or demand,
upon the occurrence of any one of the following specified events: (1) any
failure to make any payment when due hereunder; (2) any default in the
observance or performance of any other covenant, term or provision to be
performed under this Note; (3) the failure or inability of either Maker to
pay its debts generally as they become due; (4) the concealment, removal or
transfer of any assets and properties of either Maker in violation or evasion
of any bankruptcy, fraudulent conveyance or similar law; (5) the making of a
general assignment for the benefit of creditors; (6) the appointment of a
receiver for either Maker's assets and properties; (7) the filing of any
petition or the commencement of any proceeding by or against either Maker for
any relief under bankruptcy or insolvency laws or any laws relating to the
relief of debtors, readjustment of debts, reorganization, dissolution or
liquidation, which proceeding is not dismissed within thirty (30) days; or
(8) the falsity, when made, of any warranty or representation made by either
Maker to Holder. Reference is made to the Deed of Trust and any other
instrument securing or executed in connection with this Note for additional
rights of acceleration. The balance of principal, interest and other sums
due upon the maturity of this Note, by acceleration or otherwise, shall bear
interest from the time of maturity until paid at a rate of eighteen percent
(18%) per year (the "Default Rate"). In addition, if any Deficiency is not
paid when due, the unpaid Deficiency amount shall bear interest from the date
due until paid at the Default Rate.
Makers and all parties now or hereafter liable for payment of this Note,
primarily or secondarily, directly or indirectly, and whether as endorser,
guarantor, surety or otherwise, hereby jointly and severally:
2
<PAGE>
(a) waive presentment, demand, protest, notice of protest, notice of
dishonor and all other notices and demands whatever, other than any notice
which may be required pursuant to any provision of any document executed in
connection with this Note;
(b) consent to impairment or release of collateral, any and all
renewals, extensions or modifications of the terms hereof, including time for
payment, and acceptance of late or partial payments before, at or after
maturity;
(c) agree that Holder's acceptance of one or more partial payments
after acceleration of the maturity of this Note will not constitute a waiver
of such acceleration, regardless of any contrary notice or statement of
condition which may accompany any such partial payment;
(d) agree to pay all costs and expenses, including attorneys' fees,
which may be incurred by Holder in collecting this Note or in enforcing and
realizing upon any security for this Note.
In the event of default under this Note, or under the Deed of Trust or
any other instrument securing or executed in connection with this Note,
Holder may, at its option, undertake proceedings to foreclose the Deed of
Trust or exercise any other right or remedy available under this Note, under
the Deed of Trust, or under any other instrument given as security for this
Note, or otherwise available at law or in equity, in any sequence or
combination. Proceeding with any one right or remedy or any combination
thereof shall not be an election against or waiver of any other right or
remedy.
The provisions of this Note and of all agreements now or hereafter
existing between Makers and Holder are hereby expressly limited so that in no
contingency or event whatever shall the amount paid or agreed to be paid to
Holder for the use, forbearance or detention of the sums evidenced by this
Note exceed the maximum amount permissible under applicable law. If from any
circumstance whatever the performance or fulfillment of any provision of this
Note, or of any other agreement between Makers and Holder, should involve or
purport to require any payment in excess of the limit prescribed by law, then
the obligation to be performed or fulfilled is hereby reduced to the limit of
such validity, and if from any circumstance whatever Holder should ever
receive as interest an amount which would exceed the highest lawful rate,
then the amount which would be excessive interest shall be applied to the
reduction of principal (or, at Holder's option, be paid over to Makers) and
shall not be counted as interest.
Makers understand and agree that their obligations hereunder, including
the obligation to make payments in accordance with the terms hereof, are
unconditional and that all payments shall be made without any offset or
deduction whatsoever.
The indebtedness evidenced by this Note and the Deed of Trust may be
subordinated to one deed of trust on the Property for the benefit of a
primary institutional lender (or home development company).
If any provision of this Note or of any other instrument securing or
executed in connection with this Note is, for any reason and to any extent,
invalid and unenforceable, then neither the
3
<PAGE>
remainder of the document in which such provision is contained, nor the
application of the provision to other persons, entities or circumstances, nor
any other document referred to in this Note, shall be affected by such
invalidity or unenforceability, and there shall be deemed substituted for the
invalid or unenforceable provision the most similar provision which would be
valid and enforceable under applicable law.
Makers hereby covenant and agree that the state and federal courts of
the State of Colorado shall have personal jurisdiction and proper venue over
any dispute between Holder and Makers; provided that the foregoing consent to
jurisdiction and venue shall not deprive Holder of the right in its
discretion to commence or participate in any action, suit or proceeding in
any other court having jurisdiction and venue over Makers. In any action or
proceeding brought under this Note, each of the Makers and Holder waives
trial by jury. Makers further agree that this Note shall be deemed to have
been made under and shall be governed by the laws of the State of Colorado in
all respects.
ss/ Joseph A. Mancuso
-------------------------------------------
Joseph A. Mancuso
ss/ Susan Mancuso
-------------------------------------------
Susan Mancuso
4
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> JUL-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 51,567
<SECURITIES> 0
<RECEIVABLES> 155,033
<ALLOWANCES> 0
<INVENTORY> 461
<CURRENT-ASSETS> 214,073
<PP&E> 50,912
<DEPRECIATION> 24,566
<TOTAL-ASSETS> 400,988
<CURRENT-LIABILITIES> 78,188
<BONDS> 0
0
0
<COMMON> 591
<OTHER-SE> 322,209
<TOTAL-LIABILITY-AND-EQUITY> 400,988
<SALES> 0
<TOTAL-REVENUES> 187,042
<CGS> 0
<TOTAL-COSTS> 124,544
<OTHER-EXPENSES> 46,098
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 17,889
<INCOME-TAX> 7,629
<INCOME-CONTINUING> 10,260
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,260
<EPS-BASIC> .18
<EPS-DILUTED> .18
</TABLE>
