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As filed with the Securities and Exchange Commission on May 15, 2002
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ACXIOM CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 71-0581897
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
P. O. Box 8180, 1 Information Way
Little Rock, Arkansas 72203-8180
(501) 342-1000
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
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Charles D. Morgan
Chairman of the Board and President
(Company Leader)
Acxiom Corporation
P. O. Box 8180, 1 Information Way
Little Rock, Arkansas 72203-8180
(501) 342-1000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Jeffrey J. Gearhart
Goodloe M. Partee
Kutak Rock LLP
425 West Capitol Avenue
Suite 1100
Little Rock, Arkansas 72201
(501) 975-3000
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Approximate date of commencement of proposed sale to the public:
From time to time after the registration statement becomes effective.
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please
check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the
following box. [X]
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933,
please check the following box and list the Securities Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act of 1933, check the following box
and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to rule 434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Proposed maximum Proposed maximum
Title of each class of Amount offering price aggregate
securities to be to be per unit offering price(1) Amount of
registered registered registration fee
3.75% Convertible
Subordinated Notes due 2009
$175,000,000 100% $190,093,750 $17,489
Common Stock,
$.10 Par Value(2) $9,589,042 (3) (3) (3)
(1) Such number is estimated pursuant to Rule 457(c) of the Securities Act solely for purposes of determining the
registration fee, based on the average bid and ask prices for the convertible notes in secondary market transactions executed by JP
Morgan Securities Inc. on May 10, 2002, as reported to us by JP Morgan Securities, Inc.
(2) Such number represents the number of shares of common stock that are currently issuable upon conversion of the
notes. Pursuant to Rule 416 of the Securities Act, we are also registering such indeterminate number of shares of common stock as
may be issuable from time to time upon conversion of the notes as a result of the antidilution provisions of the notes.
(3) No additional consideration will be received for the common stock, and, therefore, no registration fee is required
pursuant to Rule 457(i).
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE
DATE UNTIL THE REGISTRANT SHALL FILE AN AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME
EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
SUBJECT TO COMPLETION, DATED MAY 15, 2002
PROSPECTUS
$175,000,000
ACXIOM CORPORATION
3.75% Convertible Subordinated Notes Due 2009
9,589,042 shares of common stock issuable upon conversion of the notes
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This prospectus covers the sale by selling holders of:
* our 3.75% Convertible Subordinated Notes Due 2009; and
* our common stock into which the notes are convertible.
Holders may convert the notes into our common stock at any time before February 15, 2009, at a conversion price of $18.25 per share,
subject to adjustment in specified events. We will pay interest on the notes each February 15 and August 15. The first interest
payment will be made on August 15, 2002.
We may redeem some or all of the notes on or after February 17, 2005 at the redemption prices listed in this prospectus, plus
accrued interest. Holders of the notes may require us to repurchase all or any portion of the notes on February 15, 2007 for cash
at 100% of the principal amount of the notes, plus accrued and unpaid interest. Additionally, holders of the notes may require us
to repurchase all or any portion of the notes, plus accrued and unpaid interest, upon a "change of control" event, in cash or, at
our option, in our common stock.
Our common stock is listed on the Nasdaq National Market under the symbol "ACXM." On May __, 2002, the reported last sale price of
our common stock on the Nasdaq National Market was $_____ per share.
The notes registered by the registration statement of which this prospectus is a part were issued and sold on February 6, 2002, in
transactions exempt from the Securities Act of 1933, as amended, to J.P. Morgan Securities Inc. and other initial purchasers of the
notes, and resold by the initial purchasers to qualified institutional buyers (as defined in Rule 144A) in reliance on Rule 144A.
The notes and the common stock into which the notes are convertible may be offered and sold from time to time by the holders named
in this prospectus. The registration statement of which this prospectus is a part has been filed with the Securities and Exchange
Commission pursuant to a registration rights agreement dated February 6, 2002 between us and the initial purchasers.
See "Risk Factors" beginning on page 4 for a discussion of certain risks that you should consider in connection with an investment
in the notes.
The notes will not be listed on any national securities exchange. Currently, there is no public market for the notes. The notes are
eligible for trading in The PORTAL Market.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these
securities or passed upon the accuracy or adequacy of this Prospectus. Any representation to the contrary is a criminal offense.
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The date of this Prospectus is __________, 2002.
In making your investment decision, you should rely only on the information contained in this prospectus. We have not authorized any
person to provide you with any other information. If anyone provides you with different or inconsistent information, you should not
rely on it. You should assume that the information appearing in this prospectus is accurate as of the date on the front cover of
this prospectus. Our business, financial condition, results of operations and prospects may have changed since that date. Neither
the delivery of this prospectus nor any sale made hereunder shall under any circumstances imply that the information contained
herein is correct as of any date subsequent to the date on the cover of this prospectus.
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TABLE OF CONTENTS
Page Page
Cautionary Statements Relevant to Forward Description of Senior Indebtedness.......... 23
Looking Information............................. iii Description of Capital Stock................ 25
Incorporation of Certain Documents by Reference. iv Certain United States Federal Income
Where You Can Find More Information................ v Tax Consequences......................... 29
Prospectus Summary................................. 1 Selling Holders............................. 32
Risk Factors....................................... 4 Plan of Distribution........................ 33
Use of Proceeds.................................... 8 Legal Matters............................... 34
Ratio of Earnings to Fixed Charges................. 8 Independent Auditors........................ 35
Description of Notes............................... 9
...........
When used in this prospectus, unless otherwise indicated, the terms "we," "our" and "us" refer to Acxiom Corporation and our
subsidiaries. However, for the purposes of the section entitled "Description of Notes," whenever we refer to "Acxiom" or "us," or
use the terms "we" or "our," we are referring to Acxiom Corporation and not any of our subsidiaries.
Our fiscal year ends on March 31. All references to years in this prospectus when discussing our financial results relate to fiscal
years; all other references to years relate to calendar years. Therefore, references to the year 2002 in this prospectus shall mean
the fiscal year ended March 31, 2002.
Acxiom, AbiliTec, Acxiom Data Network, InfoBase, Opticx, and Solvitur are registered marks of Acxiom Corporation. Solvitur4 is a
service mark of Acxiom Corporation.
No one has been authorized to give you any information about this offering that is not contained in this prospectus. You should rely
only on the information contained in this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an
offer to buy in any jurisdiction in which it is unlawful to make such offer or solicitation.
CAUTIONARY STATEMENTS RELEVANT TO FORWARD LOOKING INFORMATION
This prospectus, the documents that we incorporate by reference, and other written reports and oral statements made from time to
time by us and our representatives contain forward-looking statements. These statements, which are not statements of historical
fact, may contain estimates, assumptions, projections and/or expectations regarding our financial position, results of operations,
market position, product development, growth opportunities, economic conditions, and other similar forecasts and statements of
expectation. We generally indicate these statements by words or phrases such as "anticipate," "estimate," "plan," "expect,"
"believe," "intend," "foresee," and similar words or phrases. These forward-looking statements are not guarantees of future
performance and are subject to a number of factors and uncertainties that could cause our actual results and experiences to differ
materially from the anticipated results and expectations expressed in such forward-looking statements.
The forward-looking statements contained in this prospectus and the documents we incorporate by reference include: statements on
Acxiom's future results of operations; statements concerning the length and future impact of our investment in customer and
information management solutions, including our Customer Data Integration products and delivery systems on our client base, future
revenue and margins; statements concerning the benefits of our products and services for our clients; statements concerning any
competitive lead or positioning; statements concerning the impact of implementation of AbiliTec and our products and services in
Customer Relationship Management applications; statements concerning the momentum of CRM applications and e-commerce initiatives;
statements concerning the future growth and size of the CRM market; statements regarding our ability to penetrate existing and new
client industries; statements concerning efficiency gains related to the implementation of our products and services; and statements
concerning potential growth of international markets.
The factors and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, the
forward-looking statements are identified in the "Risk Factors" section and elsewhere in this prospectus, and include but are not
limited to the following:
* the complexity and uncertainty regarding the development of new high technologies;
* the possible loss of market share through competition or the acceptance of our technological offerings on a less rapid
basis than expected;
* the possibility that economic or other conditions might lead to a reduction in demand for our products and services;
* the possibility that the current economic slowdown may worsen and/or persist for an unpredictable period of time;
* the possibility that economic conditions will not improve as rapidly as expected;
* the possibility that significant customers may experience extreme, severe economic difficulty;
* the possibility that sales cycles may lengthen;
* the continued ability to attract and retain qualified technical and leadership associates and the possible loss of
associates to other organizations;
* the ability to properly motivate our sales force and other associates;
* the ability to achieve cost reductions and avoid unanticipated costs;
* the continued availability of credit upon satisfactory terms and conditions;
* the introduction of competent, competitive products, technologies or services by other companies;
* changes in consumer or business information industries and markets;
* our ability to protect proprietary information and technology or to obtain necessary licenses on commercially reasonable
terms;
* the difficulties encountered when entering new markets or industries;
* changes in the legislative, accounting, regulatory and consumer environments affecting our business including but not
limited to litigation, legislation, regulations and customs relating to our ability to collect, manage, aggregate and
use data;
* the possibility that data suppliers might withdraw data from us, leading to our inability to provide certain products and
services;
* the effect of our short-term contracts on the predictability of our revenues or the possibility that customers may cancel
or modify their agreements with us;
* the possibility that the amount of ad hoc project work will not be as expected;
* the potential loss of data center capacity or interruption of telecommunication links or power sources;
* postal rate increases that could lead to reduced volumes of business;
* the potential disruption of the services of the United States Postal Service;
* the successful integration of acquired businesses and strategic alliances;
* with respect to the providing of products or services outside our primary base of operations in the United States, all of
the above factors and the difficulty of doing business in numerous sovereign jurisdictions due to differences in
culture, laws and regulations; and
* other competitive factors.
In light of these risks, uncertainties and assumptions, we caution readers not to place undue reliance on any forward-looking
statements. We undertake no obligation to publicly update or revise any forward-looking statements based on the occurrence of future
events, the receipt of new information or otherwise.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We are incorporating by reference in this prospectus certain documents Acxiom files with the SEC. This means that we are disclosing
important information to you by referring to those documents. The information incorporated by reference is an important part of this
prospectus, and information that we file later with the SEC will automatically update and supersede the information contained in
this prospectus. We incorporate by reference the following documents filed with the SEC:
* Acxiom's Annual Report on Form 10-K for fiscal year ended March 31, 2002.
All documents filed by us with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 from the
date of this prospectus and prior to the termination of this offering also shall be deemed to be incorporated herein by reference.
Any statement contained in a document incorporated by reference, or deemed to be incorporated by reference, in this prospectus shall
be deemed modified or superseded for purposes of this prospectus to the extent that a statement contained herein, or in any other
subsequently filed document also incorporated herein by reference, modifies or supersedes such statement. Any statement so modified
or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
As used in this prospectus, the term "prospectus" means this prospectus, including the documents incorporated by reference, as the
same may be amended, supplemented, or otherwise modified from time to time. Statements contained in this prospectus as to the
contents of any contract or other document referred to in this prospectus do not purport to be complete, and where reference is made
to the particular provisions of such contract or other document, such provisions are qualified in all respects by reference to all
of the provisions of such contract or other document. We will provide without charge to each person to whom a copy of this
prospectus has been delivered, on the written or oral request of such person, a copy of any or all of the documents which have been
or may be incorporated in this prospectus by reference (other than exhibits to such documents unless such exhibits are specifically
incorporated by reference in any such documents) and a copy of any or all other contracts or documents to which we refer in this
prospectus.
You may request a copy of these filings at no cost by writing to Robert S. Bloom, Company Financial Relations Leader and Treasurer,
Acxiom Corporation, #1 Information Way, Little Rock, Arkansas 72202.
WHERE YOU CAN FIND MORE INFORMATION
Acxiom files annual, quarterly and current reports, proxy statements and other information with the SEC. You can inspect and copy
these reports, proxy statements, and other information at the public reference facilities of the SEC, in room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549. You can also obtain copies of these materials from the public reference section of the SEC at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Please call the SEC at 1-800-SEC-0330 for further information
on its reference room. The SEC also maintains a web site that contains reports, proxy statements, and other information regarding
registrants that file electronically with the SEC (http://www.sec.gov).
In addition, we will provide you without charge a copy of the notes, the indenture governing the notes, the related registration
rights and other material agreements that we summarize in this prospectus. You may request copies of these documents by contacting
Robert S. Bloom, Company Financial Relations Leader and Treasurer, Acxiom Corporation, #1 Information Way, Little Rock, Arkansas
72202, telephone: 501-342-1000.
PROSPECTUS SUMMARY
This summary provides an overview of selected information and does not contain all the information you should consider. You should
read the entire prospectus, including the section entitled "Risk Factors," carefully before making an investment decision.
Acxiom Corporation integrates data, services and technology to create and deliver customer and information management solutions for
many of the largest, most respected companies in the world. The core components of Acxiom's innovative solutions are Customer Data
Integration (CDI) technology, data content, database services, IT outsourcing, consulting and analytics, and privacy leadership.
Our products and services enable our clients to use information to improve their business decision-making processes and to
effectively manage existing and prospective customer relationships, thereby positioning them to increase their profits.
We help our customers with:
o Customer acquisition through our prospect marketing solutions
o Customer growth and retention through our customer marketing solutions
o Multi-Channel integration through our real-time marketing solutions
o Creating a single-customer view through our customer recognition solutions
o Data quality through our Customer Data Integration solutions, including our AbiliTec®, Solvitur® and InfoBase®
offerings
o Large-scale data management through strategic IT infrastructure outsourcing
Our solutions are customized to meet the specific needs of our clients and the industries in which they operate. We believe that we
offer our clients the most technologically advanced, accurate and timely solutions available. We enable businesses to develop and
deepen customer relationships by creating a single, comprehensive customer view that is accessible, in real-time, throughout the
organization. We target organizations that view data as a strategic competitive advantage and an integral component of their
business decision-making process.
Our client base consists primarily of Fortune 1000 companies in the financial services, insurance, information services, direct
marketing, publishing, retail and telecommunications industries. Some of our major clients include Allstate, AT&T, BankOne,
Citigroup, Equifax Direct Marketing Solutions, General Electric Capital Corporation, IBM, J.P. Morgan Chase & Co., MBNA, Procter
& Gamble, R.L. Polk, Sears, Sprint, Trans Union and Wal-Mart.
Additional information about us, including our audited financial statements and a more detailed description of our business, is
contained in the documents incorporated by reference in this prospectus. See "Incorporation of Certain Documents by Reference."
We were founded in 1969 and are incorporated in the state of Delaware. Our principal executive offices are located at #1 Information
Way, Little Rock, Arkansas 72202 and our phone number is (501) 342-1000. We also have locations throughout the United States and in
the United Kingdom, France and Australia.
The Offering
Securities Offered.......................... The resale by selling holders of $175,000,000 aggregate principal
amount of 3.75% convertible subordinated notes due February 15,
2009 and the 9,589,042 shares of common stock into which they are
convertible.
Interest.................................... 3.75% per annum on the principal amount, payable semi-annually in
arrears in cash on February 15 and August 15 of each year,
commencing August 15, 2002. The first interest payment will
include interest from February 6, 2002.
Maturity.................................... The notes mature on February 15, 2009.
Conversion.................................. The notes are convertible into common stock of Acxiom at the
option of the holder at any time after the date of original
issuance of the notes and prior to redemption, repurchase or
maturity at a conversion price of $18.25 per share, subject to
adjustment in specified events. See "Description of
Notes--Conversion of the Notes."
Ranking..................................... The notes are subordinated to all existing and future senior
indebtedness and are effectively subordinated to all of the
indebtedness and other liabilities (including trade and other
payables) of our subsidiaries. As of March 31, 2002, we had
approximately $384.3 million of senior indebtedness, exclusive of
the notes. Additionally, our subsidiaries had approximately $35.5
million in other liabilities as of March 31, 2002. The indenture
governing the notes does not limit the amount of indebtedness,
including senior indebtedness, that we and our subsidiaries may
incur. See "Description of Notes--Subordination of the Notes" and
"Description of Senior Indebtedness."
Optional Redemption......................... At any time on or after February 17, 2005, we may redeem some or
all of the notes at the declining redemption prices listed herein,
plus accrued interest. See "Description of Notes--Optional
Redemption by Acxiom."
Repurchase at Holder's Option............... You may require us to repurchase all or a portion of your notes on
February 15, 2007 in cash at 100% of the principal amount of the
notes, plus accrued and unpaid interest. Additionally, you may
require us to repurchase all or a portion of the notes, plus
accrued and unpaid interest, upon the occurrence of a "change of
control" event, payable in cash or, at our option, in common
stock. See "Description of Notes--Repurchase at Option of the
Holder on Put Date" and "--Repurchase at Option of the Holder Upon
a Change of Control."
Sinking Fund................................ None.
Use of Proceeds............................. We will not receive any proceeds from the sale by selling holders
of the notes or the common stock into which the notes are
convertible.
Nasdaq NMS Symbol for Common
Stock.................................... ACXM
Risk Factors................................ You should read the "Risk Factors" section beginning on page 4 of
this prospectus to ensure that you understand the risks associated
with an investment in the notes.
RISK FACTORS
You should carefully consider these risk factors together with all of the information included or incorporated herein by reference
before you decide to purchase any notes.
Risks Related to Acxiom
We must continue to improve and gain market acceptance of our technology, particularly AbiliTec and related technology, in order to
remain competitive and grow.
The complexity and uncertainty regarding the development of new high technologies affects our business greatly, as does the loss of
market share through competition, or the extent and timing of market acceptance of innovative products such as AbiliTec and its
related technology. We are also potentially affected by:
o longer sales cycles for AbiliTec due to the nature of that technology as an enterprise-wide solution;
o the introduction of competent, competitive products or technologies by other companies;
o changes in the consumer and/or business information industries and markets;
o the ability to protect our proprietary information and technology or to obtain necessary licenses on commercially
reasonable terms; and
o the impact of changing legislative, judicial, accounting, regulatory, cultural and consumer environments in the geographies
where our products and services will be deployed.
Maintaining technological competitiveness in our data products, processing functionality, software systems and services is key to
our continued success. Our ability to continually improve our current processes and to develop and introduce new products and
services is essential in order to maintain our competitive position and meet the increasingly sophisticated requirements of our
clients. If we fail to do so, we could lose clients to current or future competitors, which could result in decreased revenues, net
income and earnings per share.
General economic conditions could continue to result in a reduced demand for our products and services.
As a result of the current economic climate, we have experienced a reduction in the demand for our products and services as our
clients have looked for ways to reduce their expenses. If we are unable to successfully control our own expenses, given that a
significant portion of our costs are fixed, we could suffer lower net income and earnings per share.
Changes in legislative, judicial, regulatory, cultural or consumer environments relating to consumer privacy or information
collection and use may affect our ability to collect and use data.
There could be a material adverse impact on our direct marketing, data sales, and AbiliTec business due to the enactment of
legislation or industry regulations, the issuance of judicial interpretations, or simply a change in customs, arising from public
concern over consumer privacy issues. Restrictions could be placed upon the collection, management, aggregation and use of
information that is currently legally available, in which case our cost of collecting some kinds of data might materially increase.
It is also possible that we could be prohibited from collecting or disseminating certain types of data, which could in turn
materially adversely affect our ability to meet our clients' requirements.
Data suppliers might withdraw data from us, leading to our inability to provide products and services.
Much of the data that we use is either purchased or licensed from third parties. We compile the remainder of the data that we use
from public record sources. We could suffer a material adverse effect if owners of the data we use were to withdraw the data from us.
Data providers could withdraw their data from us if there is a competitive reason to do so, or if legislation is passed restricting
the use of the data, or if judicial interpretations are issued restricting use of data. If a substantial number of data providers
were to withdraw their data, our ability to provide products and services to our clients could be materially adversely impacted,
which could result in decreased revenues, net income and earnings per share.
Failure to attract and retain qualified personnel could adversely affect our business.
Competition for qualified technical, sales and other personnel is often intense, and we periodically are required to pay premium
wages to attract and retain personnel. There can be no assurance that we will be able to continue to hire and retain sufficient
qualified management, technical, sales and other personnel necessary to conduct our operations successfully.
The nature of our customer contracts may affect the predictability of our revenues.
While approximately 80% of our total revenue is currently derived from client contracts with initial terms of two years or longer,
these contracts have been entered into at various times over the past several years and therefore some of them are in the latter
years of their term and are approaching their originally scheduled expiration date. Further, if renewed by the customer, the terms
of the renewal contract may not have a term as long as, or may otherwise be on terms less favorable than, the original contract.
With respect to the portion of our business that is not under long-term contract, revenues are less predictable, and we must engage
in continual sales efforts to maintain revenue stability and future growth. Additionally, even with respect to customers under
long-term contractual obligations, the revenues generated by such contracts may vary depending upon the usage and requirements of
the customer during any particular period.
Our operations outside the U.S. subject us to risks normally associated with international operations.
We conduct business outside of the United States. During the last fiscal year, we received approximately 5% of our revenues from
business outside the United States. As part of our growth strategy, we plan to continue to pursue opportunities outside the U.S.
Accordingly, our future operating results could be negatively affected by a variety of factors, some of which are beyond our
control. These factors include legislative, judicial, accounting, regulatory, political or economic conditions in a specific
country or region, trade protection measures, and other regulatory requirements. In order to successfully expand non-U.S. revenues
in future periods, we must continue to strengthen our foreign operations, hire additional personnel, and continue to identify and
execute beneficial strategic alliances. To the extent that we are unable to do these things in a timely manner, our growth, if any,
in non-U.S. revenues will be limited, and our operating results could be materially adversely affected. Although foreign currency
translation gains and losses are not currently material to our consolidated financial position, results of operations or cash flows,
an increase in our foreign revenues could subject us to foreign currency translation risks in the future. Additional risks inherent
in our non-U.S. business activities generally include, among others, potentially longer accounts receivable payment cycles, the
costs and difficulties of managing international operations, potentially adverse tax consequences, and greater difficulty enforcing
intellectual property rights.
Loss of data center capacity or interruption of telecommunication links could adversely affect our business.
Our ability to protect our data centers against damage from fire, power loss, telecommunications failure or other disasters is
critical to our future. The on-line services we provide are dependent on links to telecommunication providers. We believe we have
taken reasonable precautions to protect our data centers and telecommunication links from events that could interrupt our operations.
Any damage to our data centers or any failure of our telecommunications links that causes interruptions in our operations could
materially adversely affect our ability to meet our clients' requirements, which could result in decreased revenues, income, and
earnings per share.
Failure to favorably negotiate or effectively integrate acquisitions or alliances could adversely affect our business.
From time to time, our growth strategy has included growth through acquisitions and strategic alliances. While we believe we have
been relatively successful in implementing this strategy during previous years, there is no certainty that future acquisitions or
alliances will be consummated on acceptable terms or that any acquired assets, data or businesses will be successfully integrated
into our operations. Our failure to identify appropriate candidates, to negotiate favorable terms, or to successfully integrate
future acquisitions and alliances into our existing operations could result in decreased revenues, net income and earnings per
share.
Postal rate increases and disruptions in postal services could lead to reduced volume of business.
The direct marketing industry has been negatively impacted from time to time during past years by postal rate increases. In 2001,
first class rates, enhanced carrier route rates, and third class rates were increased, and another rate increase is expected for
2002. These increases will, in our opinion, be likely to force direct mailers to mail fewer pieces and to target their prospects
more carefully. Additionally, the amount of direct mailings could be reduced in response to disruptions in and concerns over, the
security of the U.S. mail system. These sorts of responses by direct mailers could negatively affect us by decreasing the amount of
processing services purchased from us, which could result in lower revenues, net income and earnings per share.
Risks Related to the Convertible Notes
The covenants in our senior secured debt facilities restrict our financial and operational flexibility, which could have an adverse
affect on our results of operations and on the value of your investment.
Our senior secured debt facilities contain covenants that restrict, among other things, our ability to borrow money, grant
additional liens on our assets, make particular types of investments or other restricted payments, sell assets or merge or
consolidate. These facilities also require us to maintain specified financial ratios. If we fail to comply with these covenants or
fail to meet these financial ratios, the lenders under our senior secured debt facilities could declare a default and demand
immediate repayment. Unless we cure any such default, they could seek a judgment and attempt to seize our assets to satisfy the debt
owed to them. The security for our senior secured debt facilities consists of substantially all of our assets, including the stock
of all of our domestic subsidiaries and certain of our foreign subsidiaries. A default under any of these agreements could adversely
affect our rights under other commercial agreements.
The notes are subordinated and unsecured.
The notes are unsecured and subordinated in right of payment in full to all of our existing and future senior indebtedness and are
effectively subordinated to all of the indebtedness and other liabilities (including trade and other payables) of our subsidiaries.
As a result, in the event of our bankruptcy, winding-up, liquidation, reorganization, insolvency or similar proceedings, or upon
acceleration of the notes due to an event of default under the indenture, our assets will be available to pay obligations on the
notes only after all senior indebtedness and the indebtedness of our subsidiaries have been paid in full. After retiring our senior
indebtedness and the indebtedness of our subsidiaries, we may not have sufficient assets remaining to pay amounts due on any or all
of the notes then outstanding. See "Description of Notes--Subordination of the Notes" and "Description of Senior Indebtedness."
The notes are not protected by restrictive covenants.
The indenture governing the notes does not contain any financial or operating covenants or restrictions on the payments of dividends,
the incurrence of indebtedness or the issuance or repurchase of securities by us or any of our subsidiaries. The indenture contains
no covenants or other provisions to afford protection to holders of the notes in the event of a fundamental change involving Acxiom
except to the extent described under "Description of Notes--Repurchase at Option of Holders Upon a Change of Control."
If our subsidiaries do not make sufficient distributions to us, we may not be able to make payment on our debt, including the notes.
Because a significant portion of our operations are conducted by our subsidiaries, our cash flow and our ability to service
indebtedness, including our ability to pay the interest on and principal of the notes, are dependent to a large extent upon cash
dividends and distributions or other transfers from our subsidiaries. In addition, any payment of dividends, distributions, loans or
advances by our subsidiaries to us could be subject to restrictions on dividends imposed by the current and future debt instruments
of our subsidiaries. Such payments to us by our subsidiaries are contingent upon our subsidiaries' earnings. Our subsidiaries are
separate and distinct legal entities and have no obligation, contingent or otherwise, to pay any amounts due pursuant to the notes or
to make any funds available therefor, whether by dividends, loans, distributions or other payments, and do not guarantee the payment
of interest on, or principal of, the notes. Any right that we have to receive any assets of any of our subsidiaries upon the
liquidation or reorganization of any such subsidiary, and the consequent right of holders of notes to realize proceeds from the sale
of their assets, will be effectively subordinated to the claims of subsidiary creditors, including trade creditors and holders of
debt issued by the subsidiary.
We may be required to repurchase the notes upon certain events.
You may require us to repurchase all or any portion of your notes in cash on February 15, 2007. Additionally, we will be required to
repurchase the notes upon the occurrence of a "change of control" event in cash or, at our option, in common stock. We may not have
sufficient cash funds to repurchase the notes upon one of these repurchase events. Our existing debt agreements will mature prior to
the repurchase date, and our future debt agreements may prohibit us from repaying the repurchase price in cash. If we are prohibited
from repurchasing the notes, we could seek consent from the lenders under such debt agreements to repurchase the notes. If we were
unable to obtain their consent, we could attempt to refinance the notes. If we were unable to obtain a consent or refinance, we would
be prohibited from repurchasing the notes other than for common stock. If we were unable to repurchase the notes, it would result in
an event of default under the indenture. An event of default under the indenture could result in an event of default under our other
then-existing debt. In addition, a note holder's exercise of the repurchase right under the indenture may be an event of default
under our other debt. As a result, we would be prohibited from paying amounts due on the notes under the subordination provisions of
the indenture.
The convertible notes are a new issue of securities and there are no assurances as to their liquidity.
We cannot assure you that you will be able to sell your notes at any particular time or that the prices that you receive when you
sell will be favorable. In addition, any market making activity will be subject to limits imposed by the Securities Act and Exchange
Act and may cease at any time without notice. Although we have designated the notes for trading through The PORTAL Market, we cannot
assure you that an active trading market for the notes will develop or, if such market develops, how liquid it will be. If a trading
market does not develop or is not maintained, holders of the notes may experience difficulty in reselling, or an inability to sell,
the notes. Future trading prices of the notes will depend on many factors, including:
* our operating performance and financial condition;
* the interest of securities dealers in making a market for the notes;
* the market price of our common stock; and
* the market for similar securities.
Historically, the market for convertible debt has been subject to disruptions that have caused volatility in prices. It is possible
that the market for our notes will be subject to disruptions. Any disruptions may have a negative effect on the holders of the notes,
regardless of our prospects or financial performance.
The trading price of our securities could be subject to significant fluctuations.
The trading price of our common stock has been volatile, and the trading price for the notes and the common stock may be volatile in
the future. Factors such as announcements of fluctuations in our or our competitors' operating results, changes in our prospects and
market conditions for information technology stocks in general could have a significant impact on the future trading prices of our
common stock and the notes. In particular, the trading price of the common stock of many technology companies, including ours, has
experienced extreme price and volume fluctuations, which have at times been unrelated to the operating performance of such companies
whose stocks were affected. Some of the factors that may cause volatility in the price of our securities include:
* the possibility that economic or other conditions might lead to a reduction in demand for our products and services;
* the possibility that significant customers may experience extreme, severe economic difficulty;
* competitive market forces;
* uncertainties related to the effect of competitive products and pricing;
* customer acceptance of our products and services; and
* the continued availability of credit on satisfactory terms and conditions.
The price of our securities also may be affected by the estimates and projections of the investment community, general economic and
market conditions, and the cost of operations.
While we cannot predict the individual effect that these factors may have on the price of our securities, these factors, either
individually or in the aggregate, could result in significant variations in price during any given period of time. We cannot assure
you that these factors will not have an adverse effect on the trading prices of our common stock and the notes.
The market price of our common stock could be affected by the substantial number of shares that are eligible for future sale or
issuance.
As of March 31, 2002, we had 87,219,367 shares of common stock outstanding, no shares of preferred stock issued or outstanding and
options outstanding to purchase 19,907,697 shares of common stock. We cannot predict the effect, if any, that future sales of our
debt securities or shares of common stock, including common stock issuable upon conversion of the notes, or the availability of the
notes or shares of common stock for future sale, will have on the market price of common stock prevailing from time to time.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale by selling holders of the notes or the common stock into which the notes are
convertible.
RATIO OF EARNINGS TO FIXED CHARGES
The following table shows our consolidated ratio of earnings to fixed charges:
Fiscal Year
1998 1999 2000 2001 2002
Ratio of Earnings to Fixed Charges 5.96 - 5.95 2.59 -
In accordance with the rules and regulations of the SEC, for purposes of computing the ratios of earnings to fixed charges, earnings
represent income from operations before fixed charges and taxes, and fixed charges represent gross interest expense, including
capitalized interest, and a share of rental expense which is deemed to be representative of the interest factor. Earnings for the
fiscal years 2002 and 1999 were not sufficient to provide a coverage ratio of one-to-one by the amount of 50.5 million and $12.3
million, respectively, for such periods. The ratio was not sufficient due to net losses reported in those years, which in each case
included restructuring charges.
DESCRIPTION OF NOTES
We issued the notes under an indenture dated as of February 6, 2002 between Acxiom Corporation and U.S. Bank National Association,
as trustee. The following description is only a summary of the material provisions of the notes and the indenture and is not
complete. We urge you to read the indenture and the notes in their entirety because they, and not this description, define your
rights as a holder of the notes. A copy of the form of indenture and the form of certificate evidencing the notes is available to
you upon request. As used in this section, the words "we," "us," "our" or "Acxiom" refer to Acxiom Corporation and its successors
under the indenture and do not include any current or future subsidiary of Acxiom Corporation.
General
The notes are unsecured general obligations of Acxiom and are subordinate in right of payment as described under "--Subordination of
the Notes." The notes are convertible into common stock of Acxiom as described under "--Conversion of the Notes." The notes are
limited to $175,000,000 aggregate principal amount at maturity. The notes will be issued only in denominations of $1,000 or in
integral multiples of $1,000.
The notes bear interest at the annual rate shown on the cover page of this prospectus from February 6, 2002, or from the most recent
payment date to which interest has been paid or duly provided for. Interest is payable semi-annually in arrears on February 15 and
August 15, commencing on August 15, 2002, to holders of record at the close of business on the preceding February 1 and August 1,
respectively, except:
* that the interest payable upon redemption or repurchase, unless the date of redemption or repurchase is an interest payment
date, will be payable to the person to whom principal is payable; and
* as set forth in the next succeeding paragraph.
In the case of any note, or portion of any note, that is converted into common stock of Acxiom during the period from, but
excluding, a record date for any interest payment date to, but excluding, that interest payment date, either:
* if the note, or portion of the note, has been called for redemption on a redemption date that occurs during that period, or
is to be repurchased on a repurchase date, as defined below, that occurs during that period, then Acxiom will not be
required to pay interest on that interest payment date in respect of any note, or portion of any note, that is so
redeemed or repurchased; or
* if otherwise, any note or portion of any note that is not called for redemption that is submitted for conversion during
that period must be accompanied by funds equal to the interest payable on that interest payment date on the principal
amount so converted.
See "--Conversion of the Notes."
Interest will be paid, at Acxiom's option, either:
* by check mailed to the address of the person entitled to the interest as it appears in the note register; provided that a
holder of notes with an aggregate principal amount in excess of $10 million will, at the written election of the holder,
be paid by wire transfer in immediately available funds; or
* by transfer to an account maintained by that person located in the United States.
Payments to The Depository Trust Company, New York, New York, or DTC, will be made by wire transfer of immediately available funds
to the account of DTC or its nominee. Interest is computed on the basis of a 360-day year composed of twelve 30-day months.
The notes mature on February 15, 2009 unless earlier converted, redeemed or repurchased as described below. The indenture does not
contain any financial covenants or restrictions on the payment of dividends, the incurrence of indebtedness or the issuance or
repurchase of securities by Acxiom or any of its subsidiaries. The indenture contains no covenants or other provisions to protect
holders of the notes in the event of a highly leveraged transaction or a change in control of Acxiom except to the extent described
below under "--Repurchase at Option of Holders Upon a Change of Control."
The notes are not entitled to any sinking fund.
Conversion of the Notes
Any registered holder of notes may, at any time prior to close of business on the date that is one business day prior to the date of
repurchase, redemption or final maturity of the notes, as appropriate, convert the principal amount of any notes or portions
thereof, in denominations of $1,000 or integral multiples of $1,000, into common stock of Acxiom, at a conversion price of $18.25
per share, subject to adjustment as described below.
Except as described below, no payment or adjustment will be made on conversion of any notes for interest accrued thereon or for
dividends on any common stock issued upon conversion. If any notes not called for redemption or tendered for repurchase are
converted between a record date and the next interest payment date, those notes must be accompanied by funds equal to the interest
payable on the next interest payment date on the principal amount so converted. Acxiom is not required to issue fractional shares of
common stock upon conversion of the notes and, instead, will pay a cash adjustment based upon the market price of common stock on
the last trading day prior to the date of conversion. In the case of notes called for redemption or tendered for repurchase,
conversion rights will expire at the close of business on the business day preceding the day fixed for redemption or repurchase
unless Acxiom defaults in the payment of the redemption or repurchase price. A note that the holder has elected to be repurchased
may be converted only if the holder withdraws its election to have its notes repurchased in accordance with the terms of the
indenture.
The initial conversion price set forth on the cover page of this prospectus is subject to adjustment upon specified events,
including:
(a) the issuance of common stock of Acxiom as a dividend or distribution on the common stock;
(b) subject to certain exceptions, the issuance to all holders of common stock of rights or warrants to purchase common
stock;
(c) specified subdivisions and combinations of the common stock;
(d) the distribution to all holders of any class of capital stock, other than common stock, or evidences of indebtedness of
Acxiom or of assets, including securities, but excluding those rights, warrants, dividends and distributions referred to above or
paid exclusively in cash;
(e) a dividend or distribution consisting exclusively of cash to all holders of common stock if the aggregate amount of these
distributions combined together with (A) all other all-cash distributions made within the preceding 12 months in respect of which no
adjustment has been made plus (B) any cash and the fair market value of other consideration payable in any tender offers by Acxiom
or any of its subsidiaries for common stock concluded within the preceding 12 months in respect of which no adjustment has been
made, exceeds 10% of Acxiom's market capitalization; or
(f) the purchase of common stock pursuant to a tender offer made by Acxiom or any of its subsidiaries to the extent that the
same involves an aggregate consideration that, together with (A) any cash and the fair market value of any other consideration
payable in any other tender offer by Acxiom or any of its subsidiaries for common stock expiring within the 12 months preceding such
tender offer in respect of which no adjustment has been made plus (B) the aggregate amount of any such all-cash distributions
referred to in (e) above to all holders of common stock within the 12 months preceding the expiration of the tender offer for which
no adjustment has been made, exceeds 10% of Acxiom's market capitalization on the expiration of such tender offer.
If the rights provided for in our rights agreement dated as of January 28, 1998 have separated from our common stock in accordance
with the provisions of the rights agreement so that the holders of the notes would not be entitled to receive any rights in respect
of the common stock issuable upon conversion of the notes, the conversion rate will be adjusted as provided in clause (d) above
(with such separation deemed to be the distribution of such rights), subject to readjustment in the event of the expiration,
termination or redemption of the rights. In lieu of any such adjustment, we may amend our rights agreement to provide that upon
conversion of the notes the holders will receive, in addition to the common stock issuable upon such conversion, the rights which
would have attached to such shares of common stock if the rights had not become separated from the common stock under our rights
agreement. See "Description of Capital Stock--Anti-Takeover Provisions--Rights Agreement." To the extent that we adopt any future
rights plan, upon conversion of the notes into common stock, you will receive, in addition to the common stock, the rights under the
future rights plan whether or not the rights have separated from the common stock at the time of conversion and no adjustment to the
conversion rate shall be made in accordance with clause (d) above.
In the case of:
* any reclassification or change of the outstanding shares of the common stock; or
* a consolidation, merger or combination involving Acxiom; or
* a sale or conveyance to another person of the property and assets of Acxiom as an entirety or substantially as an entirety;
in such case as a result of which holders of common stock would be entitled to receive stock, other securities, other property or
assets, including cash, in respect of or in exchange for all shares of common stock, then the holders of the notes then outstanding
will generally be entitled thereafter to convert the notes into the same type of consideration that they would have owned or been
entitled to receive upon such event had the notes been converted into common stock immediately prior to that event, assuming that a
holder of notes would not have exercised any rights of election as to the consideration receivable in connection with that
transaction.
If Acxiom makes a taxable distribution to holders of common stock or in specified other circumstances requiring an adjustment to the
conversion price, the holders of notes may, in some circumstances, be deemed to have received a distribution subject to U.S. income
tax as a dividend. In some other circumstances, the absence of an adjustment to the conversion price may result in a taxable
dividend to the holders of common stock. See "Certain United States Federal Income Tax Consequences."
Acxiom may from time to time, to the extent permitted by law, reduce the conversion price by any amount for any period of at least
20 days, in which case Acxiom will give at least 15 days' notice of the reduction. Acxiom may, at its option, make reductions in the
conversion price, in addition to those described above, as Acxiom's Board of Directors deems advisable to avoid or diminish any
income tax to holders of common stock resulting from any dividend or distribution of stock, or rights to acquire stock, or from any
event treated as dividends or distributions of, or rights to acquire, stock for income tax purposes.
No adjustment in the conversion price will be required unless that adjustment would require an increase or decrease of at least 1%
in the conversion price then in effect; however, any adjustment that would otherwise be required to be made will be carried forward
and taken into account in any subsequent adjustment. Except as stated above, the conversion price will not be adjusted for the
issuance of common stock or any securities convertible into or exchangeable for common stock or carrying the right to purchase any
of the foregoing.
Optional Redemption by Acxiom
At any time on or after February 17, 2005, Acxiom may redeem the notes on at least 20 days' notice as a whole or, from time to time,
in part at the following prices, expressed as a percentage of the principal amount, together with accrued interest to, but
excluding, the date fixed for redemption:
Redemption Period ---- Price
- ----------------------------------------------------------------------------------------------------- 102.143%
Beginning February 17, 2005 and ending on February 14, 2006
Beginning February 15, 2006 and ending on February 14, 2007 101.607%
Beginning February 15, 2007 and ending on February 14, 2008 101.071%
Beginning February 15, 2008 and ending on February 14, 2009 100.536%
Any accrued interest becoming due on the date fixed for redemption will be payable to the holders of record on the relevant record
date of the notes being redeemed.
If less than all of the outstanding notes are to be redeemed, the trustee will select the notes to be redeemed in principal amounts
of $1,000 or integral multiples of $1,000 on a pro rata basis or by lot or such other method as the trustee shall deem fair and
equitable. If a portion of a holder's notes is selected for partial redemption and that holder converts a portion of that holder's
notes, the converted portion will be deemed to be of the portion selected for redemption.
Repurchase at Option of the Holder on Put Date
On the put date of February 15, 2007 you will have the right to require us to repurchase all or any portion of your notes that is
equal to $1,000 or a whole multiple of $1,000 for which you have delivered, and not withdrawn, a written purchase notice, subject to
certain additional conditions. You may submit your notes for repurchase to the paying agent at any time from the opening of business
on the date that is 30 days prior to the put date until the close of business on the date that is five business days prior to such
put date.
We shall repurchase the notes at a price equal to 100% of the principal amount to be repurchased plus accrued and unpaid interest
to, but excluding, the put date. We will pay interest on the put date to the record holder on the immediately preceding record date.
We will give notice on a date not less than 30 days prior to the put date to all record holders, stating among other things, the
procedures that you must follow to require us to repurchase your notes.
The repurchase notice given by you electing to require us to repurchase notes shall state:
* the certificate numbers of your notes to be delivered for repurchase;
* the portion of the principal amount at maturity of notes to be repurchased, which must be $1,000 or an integral multiple of
$1,000; and
* that the notes are to be repurchased by us pursuant to the applicable provisions of the notes and the indenture.
You may withdraw any repurchase notice by delivering a written notice of withdrawal to the trustee at any time up to, but excluding,
the third business day prior to the put date, which shall state the principal amount at maturity being withdrawn, the certificate
numbers of the notes being withdrawn, and the principal amount at maturity of the notes that remains subject to the repurchase
notice, if any.
We will comply with all applicable provisions of Rule 13e-4 and any other tender offer rules under the Securities Exchange Act of
1934 in connection with any repurchase offer.
Payment of the repurchase price for a note which you have delivered, and not validly withdrawn, a repurchase notice is conditioned
upon delivery of the note, together with necessary endorsements, to the trustee at any time after delivery of the repurchase notice.
We will promptly pay the repurchase price for the note following the later of the put date or the time of delivery of the note.
If the trustee holds money or securities sufficient to pay the repurchase price of the note on the business day following the put
date in accordance with the terms of the indenture, then, immediately after the put date, the note will cease to be outstanding and
interest on such note will cease to accrue, whether or not the note is delivered to the trustee. Thereafter, all other rights of the
holder shall terminate, other than the right to receive the repurchase price upon delivery of the note.
We may not repurchase notes at the option of holders if there has occurred and is continuing an event of default with respect to the
notes, other than a default in the payment of the repurchase price with respect to such notes.
Repurchase at Option of Holders Upon a Change of Control
You have the right, at your option, to require us to repurchase all or any portion of your notes 30 business days after the
occurrence of a repurchase event.
The repurchase price will be 100% of the principal amount of the notes submitted for repurchase, plus accrued and unpaid interest
to, but excluding, the repurchase date. If a repurchase date is an interest payment date, then the interest payable on that date
will be paid to the holder of record on the preceding record date.
At our option, instead of paying the repurchase price in cash, we may pay the repurchase price in common stock, valued at 95% of the
average of the closing prices for the five trading days immediately before and including the third trading day preceding the
repurchase date. The repurchase price may be paid in shares of common stock only if the following conditions are satisfied:
* such shares have been registered under the Securities Act or are freely transferable without such registration;
* the issuance of such common stock does not require registration with or approval of any governmental authority under any
state law or any other federal law, which registration or approval has not been made or obtained;
* such shares have been approved for quotation on the Nasdaq National Market or listing on a national securities exchange;
and
* such shares will be issued out of our authorized but unissued common stock and, upon issuance, will be duly and validly
issued and fully paid and non-assessable and free of any preemptive rights.
A repurchase event will be considered to have occurred if one of the following "change in control" events occurs:
(a) any person or group is or becomes the beneficial owner of more than 50% of the voting power of our outstanding
securities entitled to generally vote for directors;
(b) we consolidate with or merge into any other person or any other person merges into Acxiom or we convey, transfer or
lease all or substantially all of our assets to any person other than our subsidiaries and, as a result, our outstanding common
stock is changed or exchanged for other assets or securities, unless our shareholders immediately before the transaction own,
directly or indirectly, immediately following the transaction more than 50% of the combined voting power of the person resulting
from the transaction or the transferee person; or
(c) our liquidation or dissolution.
However, a change in control will not be deemed to have occurred if either:
* the last sale price of our common stock for any five trading days within:
(1) the period of ten consecutive trading days immediately after the later of the change in control or the
public announcement of the change in control, in the case of a change in control resulting solely from a change in control
under (a) above, or
(2) the period of ten consecutive trading days immediately preceding the change in control, in the case of a
change in control under (b) and (c) above,
is at least equal to 105% of the conversion price in effect on such day; or
* in the case of a merger or consolidation, all of the consideration excluding cash payments for fractional shares in the
merger or consolidation constituting the change in control consists of common stock traded on a United States national
securities exchange or quoted on the Nasdaq National Market (or which will be so traded or quoted when issued or
exchanged in connection with such change in control) and as a result of such transaction or transactions the notes
become convertible solely into such common stock.
We will be required to mail you a notice within 10 business days after the occurrence of a repurchase event. The notice must
describe, among other things, the repurchase event, your right to elect repurchase of the notes and the repurchase date. We must
deliver a copy of the notice to the trustee. You may exercise your repurchase rights by delivering written notice to us and the
trustee. The notice must be accompanied by the notes duly endorsed for
transfer to Acxiom. You must deliver the exercise notice on or before the close of business on the business day prior to the
repurchase date.
The interpretation of the phrase "all or substantially all" used in the definition of change in control would likely depend on the
facts and circumstances existing at such time. As a result, there may be uncertainty as to whether or not a sale or transfer of "all
or substantially all" assets has occurred. As a result, we cannot assure you how a court would interpret this phrase under
applicable law if you elect to exercise your rights following the occurrence of a transaction which you believe constitutes a
transfer of "all or substantially all" of our assets.
The change in control feature may not necessarily afford you protection in the event of a highly leveraged transaction, a change in
control or similar transactions involving Acxiom. We could, in the future, enter into transactions, including recapitalizations,
that would not constitute a change in control but that would increase the amount of our senior indebtedness or other debt. We are
not prohibited from incurring senior indebtedness or debt under the indenture. If we incur significant amounts of additional debt,
this could have an adverse effect on our ability to make payments on the notes. In addition, our management could undertake
leveraged transactions that could constitute a change in control. The Board of Directors does not have the right under the indenture
to limit or waive the repurchase right in the event of these types of leveraged transactions.
The requirement to repurchase notes upon a repurchase event could delay, defer or prevent a change of control. As a result, the
repurchase right may discourage:
* a merger, consolidation or tender offer;
* the assumption of control by a holder of a large block of our shares; and
* the removal of incumbent management.
The repurchase feature was a result of negotiations between Acxiom and the initial purchasers of the notes. The repurchase feature
is not the result of any specific effort to accumulate shares of common stock or to obtain control of Acxiom by means of a merger,
tender offer or solicitation, or part of a plan by Acxiom to adopt a series of anti-takeover provisions. We have no present
intention to engage in a transaction involving a change of control, although it is possible that we may decide to do so in the
future.
The Securities Exchange Act of 1934 and the rules thereunder require the distribution of specific types of information to security
holders in the event of issuer tender offers. These rules may apply in the event of a repurchase. We will comply with these rules to
the extent applicable.
Ability to Pay Repurchase Price on Put Date or Change of Control
We may not have sufficient cash funds to repurchase the notes on a put date or upon a repurchase event. We may elect, subject to
certain conditions, to pay the repurchase price in common stock upon a repurchase event. Our then existing debt agreements may
prohibit us from paying the repurchase price in either cash or common stock. If we are prohibited from repurchasing the notes, we
could seek consent from our lenders to repurchase the notes. If we are unable to obtain their consent, we could attempt to refinance
the notes. If we were unable to obtain a consent or refinance, we would be prohibited from repurchasing the notes. If we were unable
to repurchase the notes on a put date or upon a repurchase event, it would result in an event of default under the indenture. An
event of default under the indenture could result in a further event of default under our other then-existing debt. In addition, the
occurrence of the repurchase event may be an event of default under our other debt. As a result, we could be prohibited from paying
amounts due on the notes under the subordination provisions of the indenture.
Subordination of the Notes
The indebtedness evidenced by the notes is subordinated to the extent provided in the indenture to the prior payment in full, in
cash or other payment satisfactory to holders of senior indebtedness, of all of our existing and future senior indebtedness. Upon
any distribution of our assets upon any dissolution, winding-up, liquidation or reorganization, or in bankruptcy, insolvency,
receivership or similar proceedings, payment of the principal, premium, if any, interest and all other obligations in respect of the
notes, including by way of redemption, acquisition or other purchase thereof, on the notes is to be subordinated in right of payment
to the prior payment in full, in cash or other payment satisfactory to holders of senior indebtedness, of all of our existing and
future senior indebtedness. In addition, the notes are also effectively subordinated to all indebtedness and other liabilities,
including trade payables and lease obligations and preferred stock, if any, of our subsidiaries. In the event we desire to redeem
the notes or satisfy, discharge or defease our obligations under the indenture, we will be required to seek the prior consent of the
holders of certain of our senior indebtedness.
In the event of any acceleration of the notes because of an event of default, the holders of any senior indebtedness then
outstanding would be entitled to payment in full, in cash or other payment satisfactory to holders of senior indebtedness, of all
obligations in respect to such senior indebtedness before the holders of notes are entitled to receive any payment or other
distribution. We are required to promptly notify holders of senior indebtedness if payment of the notes is accelerated because of an
event of default.
We also may not make any payment of principal, interest or other amounts upon, or redemption of, or purchase or otherwise acquire
the notes if:
* a default in the payment of principal, premium, if any, interest or other obligations in respect of designated senior
indebtedness occurs and is continuing beyond any applicable period of grace; or
* any other default occurs and is continuing with respect to designated senior indebtedness that permits holders of the
designated senior indebtedness to which such default relates to accelerate its maturity and the trustee receives a
notice of such default, which we refer to as a payment blockage notice, from any agent representing the holders of any
designated senior indebtedness or by any holder of the designated senior indebtedness who is not represented by an
agent.
Unless the holders of any senior indebtedness have accelerated its maturity, we may and shall resume making payments on the notes:
* in the case of a payment default, when the default is cured or waived or ceases to exist; and
* in the case of a nonpayment default, the earlier of when such nonpayment default is cured or waived or ceases to exist or
179 days after receipt of the payment blockage notice.
No new period of payment blockage may be commenced pursuant to a payment blockage notice unless and until 360 days have elapsed
since the initial effectiveness of the prior payment blockage notice.
No default that existed or was continuing on the date of delivery of any payment blockage notice to the trustee shall be the basis
for a subsequent payment blockage notice, unless the default has been cured or waived for a period of not less than 90 consecutive
days.
In the event of our bankruptcy, dissolution or reorganization, holders of senior indebtedness may receive more, ratably, and holders
of the notes may receive less, ratably, than our other creditors. Such subordination will not prevent the occurrence of any event of
default under the indenture.
A portion of our operations are conducted through our subsidiaries. As a result, our cash flow and or ability to service our debt,
including the notes, is dependent upon the earnings of our subsidiaries. In addition, we are dependent on the distribution of
earnings, loans or other payments by our subsidiaries to us. See "Risk Factors-- If our subsidiaries do not make sufficient
distributions to us, we will not be able to make payment on our debt, including the notes."
Our subsidiaries are separate and distinct legal entities. Our subsidiaries have no obligation to pay any amounts due on the notes
or to provide us with funds for our payment obligations, whether by dividends, distributions, loans or other payments. In addition,
any payment of dividends, distributions, loans or advances by our subsidiaries to us could be subject to statutory or contractual
restrictions. Payments to us by our subsidiaries will also be contingent upon our subsidiaries' earnings and business
considerations. There can be no assurance that we will receive adequate funds from our subsidiaries to pay interest due on the notes
or to repay the notes when redeemed or upon maturity.
Our right to receive any assets of any of our subsidiaries upon their liquidation or reorganization, and therefore the right of the
holders of the notes to participate in those assets, will be effectively subordinated to the claims of that subsidiary's creditors,
including trade creditors. In addition, even if we were a creditor of any of our subsidiaries, our rights as a creditor would be
subordinate to any security interest in the assets of our subsidiaries and any indebtedness of our subsidiaries senior to that held
by us.
As of March 31, 2002, we had approximately $384.3 million of senior indebtedness, exclusive of the notes. Additionally, our
subsidiaries had approximately $35.5 million in other liabilities as of March 31, 2002.
Neither we nor our subsidiaries are limited in or prohibited from incurring senior indebtedness or any other indebtedness or
liabilities under the indenture.
We are obligated to pay compensation to the trustee and to indemnify the trustee against certain losses, liabilities or expenses
incurred by it in connection with its duties relating to the notes. The trustee's claims for such payments will generally be senior
to those of the holders of the notes in respect to all funds collected and held by the trustee.
Certain Definitions
"Designated senior indebtedness" means (a) all indebtedness under the revolving credit facility, synthetic lease and term facility
and (b) after payment in full in cash of all senior indebtedness under the revolving credit facility, synthetic facility and term
facility and any particular senior indebtedness in which the instrument creating or evidencing the senior indebtedness or the
assumption of guarantee thereof (or related documents or agreements to which we are a party) expressly provides that such
indebtedness shall be "designated senior indebtedness" (provided that such instrument may place limitations and conditions on the
right of such senior indebtedness to exercise the rights of designated senior indebtedness), the aggregate principal amount of which
is equal to or greater than $25 million.
"Indebtedness" means:
(a) all of our indebtedness, obligations and other liabilities, contingent or otherwise, for borrowed money, including
obligations:
(i) in respect of overdrafts, foreign exchange contracts, currency exchange agreements, interest rate protection
agreements and any loans or advance from banks, whether or not evidenced by notes or similar instruments; or
(ii) evidenced by bonds, debentures, notes or similar instruments, whether or not the recourse of the lender is to all of
our assets or to only a portion thereof, other than any account payable or other secured current liability or obligation
incurred in the ordinary course of business in connection with the obtaining of materials or services;
(b) all of our reimbursement obligations and other liabilities, contingent or otherwise, with respect to letters of
credit, bank guarantees or bankers' acceptances;
(c) all of our obligations and liabilities, contingent or otherwise, in respect of leases required, in conformity with
generally accepted accounting principles, to be accounted for as capitalized lease obligations on our balance sheet;
(d) all of our obligations and other liabilities, contingent or otherwise, under any lease or related document, including a
purchase agreement, in connection with the lease of personal property or real property or improvements thereon (or any personal
property included as part of any such lease) which provides that we are contractually obligated to purchase or cause a third-party
to purchase the leased property and thereby guarantee a residual value of leased property to the lessor and all of our obligations
under such lease or related documents to purchase the leased property (whether or not such lease transaction is characterized as an
operating lease or a capitalized lease in accordance with generally accepted accounting principles);
(e) all of our obligations, contingent or otherwise, with respect to an interest rate, currency or other swap, cap, floor or
collar agreement, hedge agreement, forward contract, or other similar instrument or agreement or foreign currency hedge, exchange,
purchase or similar instrument or agreement;
(f) all obligations to pay the deferred purchase price of property or services (including computer software license
payments), except trade payables;
(g) all of our direct or indirect guarantees or similar agreements to purchase or otherwise acquire or otherwise assure a
creditor against loss in respect of indebtedness, obligations or liabilities of another person of the kind described in clauses (a)
through (f) above;
(h) any indebtedness or other obligations described in clauses (a) through (g) above secured by any mortgage, pledge, lien or
other encumbrance existing on property which owned or held by us, regardless of whether the indebtedness or other obligation secured
thereby has been assumed by us; and
(i) any and all deferrals, renewals, extensions and refundings of, or amendments, modifications supplements to, any
indebtedness, obligation or liability of the kind described in clauses (a) through (h) above.
"Obligations" means with respect to any indebtedness, all obligations (whether in existence on the date of the indenture or arising
afterwards, absolute or contingent, direct or indirect) for or in respect of principal (when due, upon acceleration, upon
redemption, upon mandatory repayment or repurchase pursuant to a mandatory offer to purchase, or otherwise), premium, interest,
penalties, fees, indemnification, reimbursement and other amounts payable and liabilities with respect to such indebtedness,
including, without limitation, all interest accrued or accruing after, or which would accrue but for, the commencement of any
bankruptcy, insolvency or reorganization or similar case or proceeding at the contract rate (including, without limitation, any
contract rate applicable upon default) specified in the relevant documentation, whether or not the claim for such interest is
allowed as a claim in such case or proceeding.
"Revolving credit facility" means the Credit Agreement dated as of December 29, 1999 and as amended as of August 14, 2001 and
September 14, 2001 among Acxiom Corporation, Chase Bank of Texas, National Association (now JPMorgan Chase Bank), Mercantile Bank,
N.A., Bank of America, N.A., ABN AMRO Bank N.V., the Bank of Nova Scotia, Bank One, NA, Wachovia Bank, N.A., and Suntrust Bank,
Nashville, N.A., as amended and restated as of January 28, 2002, as such agreement may be further amended, modified, supplemented,
extended, renewed, refinanced or replaced or substituted from time to time.
"Senior indebtedness" means all obligations with respect to indebtedness of Acxiom whether outstanding on the date of the indenture
or thereafter created, incurred, assumed, guaranteed, or in effect guaranteed, by Acxiom, including, without limitation, all
deferrals, renewals, extensions or refundings of, or amendments, modifications or supplements to, the foregoing, unless in the case
of any particular indebtedness the instrument creating or evidencing the same or the assumption or guarantee thereof expressly
provides that such indebtedness shall not be senior in right of payment to the notes or expressly provides that such indebtedness
ranks equally in right of payment or junior to the notes. Senior indebtedness does not include any indebtedness evidenced by the
notes, any indebtedness of Acxiom to any subsidiary of Acxiom, any obligation for federal, state, local or other taxes or any trade
accounts payable of Acxiom arising in the ordinary course of business.
"Synthetic lease" means the Participation Agreement and certain operative agreements related thereto, each dated as of October 24,
2000 and as amended as of August 14, 2001, September 14, 2001 and September 21, 2001 and as further amended as of January 28, 2002,
among Acxiom Corporation, as construction agent and lessee, certain guarantors, First Security Bank National Association, as the
owner trustee, the various holders and lenders who are or become a party thereto from time to time, and Bank of America, N.A., as
agent, which agreements relate to the tax retention operating lease facility of Acxiom Corporation, and as such agreements may be
further amended, modified, supplemented, extended, renewed, refinanced or replaced from time to time.
"Term facility" means the Term Credit Agreement dated as of September 21, 2001 between Acxiom Corporation and The Chase Manhattan
Bank (now JPMorgan Chase Bank), as amended as of January 28, 2002, as such agreement may be further amended, modified, supplemented,
extended, renewed, refinanced or replaced or substituted from time to time.
Satisfaction and Discharge
We may be discharged from our obligations on the notes if they mature within one year or will be redeemed within one year and we
deposit with the trustee enough cash and/or U.S. government obligations to pay all the principal, premium, if any, and interest due
to the stated maturity date or redemption date of the notes.
Defeasance
The indenture also contains a provision that permits us to elect:
(a) to be discharged from all of our obligations, subject to limited exceptions, with respect to the notes then outstanding;
and/or
(b) to be released from our obligations under the covenants relating to the required offer to repurchase on a put date or
upon a repurchase event, maintenance of our corporate existence and reports to holders.
To make either of the above elections, we must deposit in trust with the trustee enough money to pay in full the principal, premium,
if any, and interest on the notes. This amount may be made in cash and/or U.S. government obligations. As a condition to either of
the above elections, we must deliver to the trustee an opinion of counsel that the holders of the notes will not recognize income,
gain or loss for federal income tax purposes as a result of the action. If we elect to be discharged from all of our obligations as
outlined above in (a) in this section, the holders of the notes will not be entitled to the benefits of the indenture, except for
registration of transfer and exchange of notes and replacement of lost, stolen or mutilated notes.
Exchange and Transfer
Notes may be transferred or exchanged at the office of the security registrar. We will not impose a service charge for any transfer
or exchange, but we may require holders to pay any tax or other governmental charges associated with any transfer or exchange. In
the event of any potential redemption of the notes, we will not be required to:
(a) issue, authenticate or register the transfer of or exchange any note during a period beginning at the opening of business
10 business days before the mailing of a notice of redemption and ending at the close of business on the day of the mailing; or
(b) register the transfer of or exchange any note selected for redemption, in whole or in part, except the unredeemed portion
of notes being redeemed in part.
We have initially appointed the trustee as the security registrar, paying agent and conversion agent. We may designate additional
registrars, paying or conversion agents or change registrars, paying or conversion agents. However, we will be required to maintain
a paying agent in the place of payment for the notes.
Consolidation, Merger and Sale of Assets
We may not consolidate with or merge into any other person, in a transaction in which we are not the surviving corporation, or
convey, transfer or lease our properties and assets substantially as an entirety to, any person, unless:
(a) the successor, if any, is a U.S. or a District of Columbia corporation, limited liability company, partnership, trust or
other business entity;
(b) the successor assumes our obligations under the notes, the indenture and the registration rights agreement; and
(c) immediately after giving effect to the transaction, no default or event of default shall have occurred and be continuing,
and certain other conditions are met.
Events of Default
The indenture defines an event of default with respect to the notes as one or more of the following events:
(a) our failure to pay principal, any premium or the repurchase price in connection with the put date or a change in control
on the notes when due (whether or not prohibited by the subordination provisions of the indenture);
(b) our failure to pay any interest on the notes when due, if such failure continues for 30 days (whether or not prohibited
by the subordination provisions of the indenture);
(c) our failure to perform any other covenant in the indenture, if such failure continues for 60 days after the notice
required in the indenture;
(d) our bankruptcy, insolvency or reorganization; and
(e) default with respect to any other indebtedness, which default results in the acceleration of indebtedness in an amount in
excess of $15,000,000 and continuance of that default for a period of 30 days.
If an event of default, other than an event of default described in clause (d) above, occurs and continues, either the trustee or
the holders of at least 25% in aggregate principal amount of the outstanding notes may declare the
principal amount including any accrued and unpaid interest on the notes to be due and payable. If an event of default described in
clause (d) above occurs, the principal amount of all the notes will automatically become immediately due and payable. Any payment by
us on the notes following any acceleration will be subject to the subordination provisions described above under "--Subordination of
the Notes."
After acceleration but before a judgment or decree of the money due in respect of the notes has been obtained, the holders of a
majority in aggregate principal amount of the outstanding notes may rescind such acceleration and its consequences if all events of
default, other than the non-payment of accelerated principal, or other specified amount, have been cured or waived.
Other than the duty to act with the required care during an event of default, the trustee will not be obligated to exercise any of
its rights or powers at the request of the holders unless the holders offer the trustee reasonable indemnity. Generally, the holders
of a majority in aggregate principal amount of the notes will have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the trustee or exercising any trust or power conferred on the trustee.
A holder will have the right to begin a proceeding under the indenture, or for the appointment of a receiver or a trustee, or for
any other remedy under the indenture only if:
(a) the holder gives to the trustee written notice of a continuing event of default; (b) holders of at least 25% in aggregate
principal amount of notes then outstanding made a written request to the trustee to pursue the remedy; (c) such holder or holders
offer to the trustee indemnity satisfactory to the trustee against any loss, liability or expense; (d) the trustee does not comply
with the request within 60 days after receipt of the request and the offer of indemnity; and (e) during such 60-day period the
holders of a majority in aggregate principal amount of the notes then outstanding do not give the trustee a direction inconsistent
with the request. Holders may, however, sue to enforce the payment of principal, premium or interest on or after the due date or
their right to convert without following the procedures listed in (a) through (e) above.
We will furnish the trustee an annual statement by our officers as to whether or not, to the officer's knowledge, we are in default
in the performance of the indenture and, if so, specifying all known defaults.
Modification and Waiver
We may make modifications and amendments to the indenture with the consent of the holders of a majority in aggregate principal
amount of the outstanding notes affected by the modification or amendment. However, we may not make any modification or amendment
without the consent of the holder of each outstanding note affected by the modification or amendment if such modification or
amendment would:
* change the stated maturity of the notes;
* reduce the principal, premium, if any, or interest on the notes;
* change the place of payment from New York, New York or the currency in which the notes are payable, or waive a default in
payment of the principal of or interest on any note;
* make any change that adversely affects the right to require us to purchase a note, either on the put date or in connection
with a change in control;
* impair the right to sue for any payment after the stated maturity or redemption date;
* modify the subordination provisions in a materially adverse manner to the holders;
* adversely affect the right to convert the notes other than as provided in or under the indenture; or
* change the provisions in the indenture that relate to modifying or amending the indenture.
Holders of a majority in aggregate principal amount of the outstanding notes may waive, on behalf of the holders of all of the
notes, compliance by us with respect to certain restrictive provisions of the indenture.
Generally, the holders of not less than a majority of the aggregate principal amount of the outstanding notes may, on behalf of all
holders of the notes, waive any past default or event of default unless:
* we fail to pay principal, premium or interest on any note when due;
* we fail to convert any note into common stock; or
* we fail to comply with any of the provisions of the indenture that would require the consent of the holder of each
outstanding note affected.
An amendment may not effect any change that adversely affects the rights of any holder of senior indebtedness then outstanding under
the subordination provisions unless such holder of senior indebtedness, or a representative for such holder, consents to such
change.
Any notes held by us or by any persons directly or indirectly controlling or controlled by or under direct or indirect common
control with us shall be disregarded (from both the numerator and denominator) for purposes of determining whether the holders of a
majority in principal amount of the outstanding notes have consented to a modification, amendment or waiver of the terms of the
indenture.
Notices
Notices to holders will be given by mail to the addresses of the holders in the security register.
Governing Law
The indenture and the notes will be governed by, and construed under, the law of the State of New York, without regard to conflicts
of laws principles.
Regarding the Trustee
U.S. Bank National Association has agreed to serve as the trustee under the indenture. The trustee will be permitted to deal with us
and any affiliate of ours with the same rights as if it were not trustee. However, under the Trust Indenture Act, if the trustee
acquires any conflicting interest and there exists a default with respect to the notes, the trustee must eliminate such conflicts or
resign.
The holders of a majority in principal amount of all outstanding notes will have the right to direct the time, method and place of
conducting any proceeding for exercising any remedy or power available to the trustee. However, any such direction may not conflict
with any law or the indenture, may not be unduly prejudicial to the rights of another holder or the trustee and may not involve the
trustee in personal liability.
Book-Entry System
We issued the notes in the form of a global security issued in reliance on Rule 144A. Upon the issuance of a global security, DTC
(referred to as the depository) or its nominee credited the accounts of persons holding through it with the respective principal
amounts of the notes represented by such global security. Such accounts were designated by the initial purchasers with respect to
notes placed by the initial purchasers for us. The notes that are sold under this prospectus will be represented by a new
unrestricted global security. Upon issuance of this new global security, the depository or its nominee will credit the accounts of
persons holding through it with the respective principal amounts of the notes represented by the new unrestricted global security.
Ownership of beneficial interests in a global security is limited to persons that have accounts with the depository ("participants")
or persons that may hold interests through participants. Ownership of beneficial interests by participants in a global security is
shown on, and the transfer of that ownership interest will be effected only through, records maintained by the depository for such
global security. Ownership of beneficial interests in such global security by persons that hold through participants will be shown
on, and the transfer of those ownership interests through such participant will be effected only through, records maintained by such
participant. The foregoing may impair the ability to transfer beneficial interests in a global security.
We will make payment of principal, premium, if any, and interest on notes represented by any such global security to the depository
or its nominee, as the case may be, as the sole holder of the notes represented thereby for all purposes under the indenture. None
of Acxiom, the trustee, any agent of Acxiom, or the trustee or the initial purchasers will have any responsibility or liability for
any aspect of the depository's records relating to or payments made on account of beneficial ownership interests in global security
representing any notes or for maintaining, supervising or reviewing any of the depository's records relating to such beneficial
ownership interests. We have been advised by the depository that, upon receipt of any payment of principal, premium, if any, or
interest on any global security, the depository will immediately credit, on its book-entry registration and transfer system, the
accounts of participants with payments in amounts proportionate to their respective beneficial interests in the principal amount of
such global security as shown on the records of the depository. Payments by participants to owners of beneficial interests in a
global security held through such participants will be governed by standing instructions and customary practices as is now the case
with securities held for customer accounts registered in "street name," and will be the sole responsibility of such participants.
A global security may not be transferred except as a whole by the depository for such global security to a nominee of such
depository or by a nominee of such depository to such depository or another nominee of such depository or by such depository or any
such nominee to a successor of such depository or a nominee of such successor. If the depository is at any time unwilling or unable
to continue as depository and a successor depository is not appointed by us or the depository within 90 days, we will issue notes in
definitive form in exchange for the global security. In either instance, an owner of a beneficial interest in the global security
will be entitled to have notes equal in principal amount to such beneficial interest registered in its name and will be entitled to
physical delivery of such notes in definitive form. Notes so issued in definitive form will be issued in denominations of $1,000 and
integral multiples thereof and will be issued in registered form only, without coupons. We will pay principal, premium, if any, and
interest on the notes and the notes may be presented for registration of transfer or exchange, at the offices of the trustee.
So long as the depository for a global security, or its nominee, is the registered owner of such global security, such depository or
such nominee, as the case may be, will be considered the sole holder of the notes represented by such global security for the
purposes of receiving payment on the notes, receiving notices and for all other purposes under the indenture and the notes.
Beneficial interests in notes will be evidenced only by, and transfers thereof will be effected only through, records maintained by
the depository and its participants. The depository has nominated Cede & Co. as the nominee. Except as provided above, owners of
beneficial interests in a global security will not be entitled to have the notes represented by the global security registered in
their name, will not be entitled to receive physical delivery of certificated notes and will not be considered the holders thereof
for any purposes under the indenture. Accordingly any such person owning a beneficial interest in such a global security must rely
on the procedures of the depository, and, if any such person is not a participant, on the procedures the participant through which
such person owns its interest, to exercise any rights of a holder under the indenture. The indenture provides that the depository
may grant proxies and otherwise authorize participants to give or take any request, demand, authorization, direction, notice,
consent, waiver or other action which a holder is entitled to give or take under the indenture. We understand that under existing
industry practices, in the event that we request any action of holders or that an owner of a beneficial interest in such a global
security desires to give or take any action which a holder is entitled to give or take under the indenture, the depository would
authorize the participants holding the relevant beneficial interest to give or take such action and such participants would
authorize beneficial owners owning through such participants to give or take such action or would otherwise act upon the
instructions of beneficial owners owning through them.
The depository has advised us that the depository is a limited-purpose trust company organized under the laws of the State of New
York, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code,
and a "clearing agency" registered under the Exchange Act. The depository was created to hold the securities of its participants and
to facilitate the clearance and settlement of securities transactions among its participants in such securities through electronic
book-entry changes in accounts of the participants, thereby eliminating the need for physical movement of securities certificates.
The depository's participants include securities brokers and dealers (including the initial purchasers), banks, trust companies,
clearing corporations and certain other organizations, some of whom (and/or their representatives) own the depository. Access to the
depository's book-entry system is also available to others, such as banks, brokers, dealers and trust companies, that clear through
or maintain a custodial relationship with a participant, either directly or indirectly.
DESCRIPTION OF SENIOR INDEBTEDNESS
The following is a description of certain senior indebtedness of Acxiom and other liabilities of our subsidiaries which we expect to
be outstanding following the completion of this offering and the application of the net proceeds of the notes as described under
"Use of Proceeds."
Revolving Credit Facility
Simultaneously with the initial offering of the notes on February 6, 2002, we amended and restated our $265 million revolving credit
facility to a $175 million thirty-six month credit facility and extended the maturity of the facility from December 2002 to January
2005. The borrowings under the revolving credit facility currently bear interest at the annual rate of either LIBOR plus 2.25%, an
alternate base rate (which is defined as the greatest of (a) the prime rate, (b) a base CD rate derived from the secondary market
rate for three-month certificates of deposit, or (c) the federal funds rate, plus 0.5%) plus .75% or the federal funds rate plus
1.75%, depending on the type of borrowing. There were no borrowings outstanding under the revolving credit facility as of March 31,
2002.
The revolving credit facility contains negative covenants restricting and limiting our ability to engage in certain activities,
including, but not limited to:
* limitations on indebtedness, guarantee obligations and the incurrence of liens;
* restrictions on sale-leaseback transactions, consolidations, mergers, liquidations, dissolutions, leases, sale of assets,
transactions with affiliates and investments; and
* restrictions on issuance of preferred stock, dividends and distributions on capital stock and other similar distributions.
The revolving credit facility also requires us to maintain certain financial ratios, including a maximum debt/cash flow ratio, a
minimum fixed charge coverage ratio and a minimum tangible net worth ratio. The credit agreement includes customary events of
default, including cross default to other indebtedness and the occurrence of a "change of control" (as specifically defined
therein). Upon an event of default, the lenders under the credit facility may require us to repay in full the outstanding principal
amount of all loans under the credit facility, together with all accrued interest, fees and other expenses owed thereunder.
The borrowings under the revolving credit facility are secured by substantially all of our assets, including a pledge of the stock
of all of our domestic subsidiaries and certain of our foreign subsidiaries, and are guaranteed by each of our domestic subsidiaries.
Term Loan Facility
On September 21, 2001, we borrowed $64.2 million from a bank under a term loan agreement. The borrowings under the term loan bear
interest, payable semiannually, at LIBOR plus 3.75%, or an alternate base rate depending on the type of borrowing, which as of March
31, 2002 was approximately 5.61%. The entire principal amount outstanding under this term loan is due and payable on November 30,
2005. The term loan agreement contains financial and other negative covenants substantially identical to those contained in the
revolving credit agreement. The borrowings under the term loan facility are secured by substantially all of our assets, including
the stock of all of our domestic subsidiaries and certain of our foreign subsidiaries, and are guaranteed by each of our domestic
subsidiaries.
Synthetic Lease Facility
We have entered into a synthetic lease arrangement with respect to a facility under construction in Little Rock, Arkansas and land
in Phoenix, Arizona. Under the arrangement, we have agreed to lease each property for an initial term of five years and an option to
renew for an additional two years, subject to certain conditions. The lessors have committed to fund up to a maximum of $45.8
million (subject to reduction based on certain conditions in the lease) for the construction of the Little Rock building and
acquisition of the land at both sites, with the portion of the committed amount actually used determined by us. As of March 31,
2002, the remaining amount of the commitment available from the lessors was approximately $13.1 million. The Little Rock building is
expected to cost approximately $30.0 to $35.0 million including interest during construction, and construction is expected to last
until October 2002. At any time during the term of the lease, we may, at our option, purchase the land and the building for a price
approximately equal to the amount expended by the lessors to acquire the land and construct the building. If we elect not to
purchase the land and building at the end of the lease, we have guaranteed a residual value of approximately 87% of the land and
construction costs or approximately $40 million.
Our obligations under the lease are secured by (i) leasehold mortgages on the land and building and (ii) liens on substantially all
of our assets, including the stock of all of our domestic subsidiaries and certain of our foreign subsidiaries. The obligations are
guaranteed by each of our domestic subsidiaries.
Equipment Lease Facilities
We have entered into certain synthetic equipment lease facilities for the acquisition of computer equipment, furniture and an
aircraft. As of March 31, 2002, the total equipment acquired under these lease facilities was $177.5 million and the remaining
non-binding commitments for additional funding (for computer equipment and furniture only) was $76.0 million. Lease terms under the
computer equipment and furniture facility range from three to seven years, with Acxiom having the option at expiration of the
initial term to return, or purchase at a fixed price, or extend or renew the term with respect to all (but not less than all) of the
leased equipment. The lease term under the aircraft facility expires in January 2010, with Acxiom having the option at expiration to
either purchase the aircraft at a fixed price, renew the lease for an additional 12 month period (with a nominal purchase price
being paid at expiration of the renewal term) or return the aircraft in the condition and manner required by the lease.
Other Senior Indebtedness
We currently maintain other indebtedness in addition to the credit arrangements discussed above that will be senior in the right of
payment to the notes. At March 31, 2002, this other outstanding indebtedness (exclusive of indebtedness of our subsidiaries)
included the following:
* approximately $62.6 million of 5.25% convertible subordinated notes due 2003, which were retired on April 1, 2002 with
borrowings under the revolving credit facility;
* approximately $10.7 million in secured borrowings and advances under certain loan arrangements with commercial banks;
* capital lease obligations in the aggregate amount of $6.0 million;
* approximately $5.7 million in guarantees of secured indebtedness of certain general partnerships in which we are general
partners and other guarantees;
* indebtedness resulting from the licensing of certain software in the approximate aggregate amount of $88.4 million; and
* letters of credit in the approximate aggregate amount of $10.7 million.
Liabilities of Subsidiaries
At March 31, 2002, our subsidiaries had approximately $35.5 million in other liabilities, which include trade payables, capital
lease obligations, and deferred revenue and taxes. The notes will be effectively subordinated to these liabilities of our
subsidiaries.
DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of 200,000,000 shares of common stock, $.10 par value, and 1,000,000 shares of preferred
stock, par value $1.00 per share. As of March 31, 2002, there were:
* 87,219,367 shares of our common stock outstanding;
* no shares of preferred stock issued or outstanding; and
* options to purchase 19,907,697 shares of common stock.
Common Stock
The holders of common stock are entitled to one vote per share on all matters submitted to a vote of our stockholders. Subject to
preferences that may be applicable to any preferred stock outstanding at the time, the holders of outstanding shares of common stock
are entitled to receive ratably any dividends out of assets legally available therefor as our board of directors may from time to
time determine. Upon liquidation, dissolution or winding up of our company, holders of our common stock are entitled to share
ratably in all assets remaining after payment of liabilities and the liquidation preference of any then outstanding shares of
preferred stock. Holders of common stock have no preemptive or conversion rights or other subscription rights. There are no
redemption or sinking fund provisions applicable to the common stock. All outstanding shares of common stock are fully paid and
nonassessable.
Preferred Stock
Our certificate of incorporation provides that our board of directors has the authority, without further action by the stockholders,
to issue up to 1,000,000 shares of preferred stock in one or more series. The board is able to fix the rights, preferences,
privileges and restrictions of the preferred stock, including dividend rights, conversion rights, voting rights, terms of
redemption, liquidation preferences, sinking fund terms and the number of shares constituting any series or the designation of this
series. We have no present plan to issue any shares of preferred stock.
Anti-Takeover Provisions
Rights Agreement
Effective January 28, 1998, our board of directors adopted a stockholder rights plan under which we issued one right for each
outstanding share of common stock. Each right entitles its registered holder to purchase one one-thousandth of a share of preferred
stock for $100.00, subject to adjustment. The preferred stock is designed so that each one one-thousandth of a share of preferred
stock has economic and voting terms similar to those of one share of common stock. Generally, the rights become exercisable only if
a person or group of affiliated or associated persons (i) becomes an "Acquiring Person," which is defined as, subject to certain
exceptions, any person having Beneficial Ownership (as defined in the Rights Agreement) of 20% or more of the outstanding shares of
voting stock, or (ii) commences a tender or exchange offer that results in that person or group becoming an Acquiring Person.
Upon exercise, each holder of the rights will be entitled to pay the then current exercise price and receive in exchange that number
of shares of our common stock or preferred stock having an aggregate Market Price (as defined in the Rights Agreement) on the date
of the public announcement of an Acquiring Person's becoming such equal to twice the exercise price.
We will be able to redeem all rights, but not less than all, at $0.01 per right, subject to adjustment, at any time prior to the
close of business the day a person or group becomes an Acquiring Person. In addition, the Board of Directors of the Company may, at
its option, at any time after a public announcement that a person or group has become an Acquiring Person or prior to the time that
an Acquiring Person becomes the beneficial owner of more than 50% of the outstanding shares of voting stock, elect to exchange all
(but not less than all) the then outstanding rights (other than rights beneficially owned by the Acquiring Person or any affiliate
or associate thereof, which rights become void) for shares of common stock at an exchange ratio of one share of common stock per
right, appropriately adjusted. The plan is subject to a qualifying offer provision, which make the Rights Plan inapplicable to
certain kinds of offers to purchase all of our common stock.
The Rights have certain anti-takeover effects and can cause substantial dilution to a person or group that acquires 20% or more of
the common stock on terms not approved by our board of directors. The rights should not, however, interfere with any merger or other
business combination that our board finds to be in the best interests of the Company and its stockholders because the rights can be
redeemed by the board on or prior to the close of business the day a person or group becomes an Acquiring Person.
The rights, which cannot vote and cannot be transferred separately from the shares of common stock to which they are presently
attached, expire on February 9, 2008, unless extended prior thereto by the board, or earlier redeemed or exchanged by us.
General Corporation Law of the State of Delaware
We are subject to Section 203 of the Delaware General Corporation Law. In general, the statute prohibits a publicly held Delaware
corporation from engaging in any business combination with any interested stockholder for a period of three years following the date
that the stockholder became an interested stockholder unless:
* prior to the date, the board of directors of the corporation approved either the business combination or the transaction
that resulted in the stockholder becoming an interested stockholder;
* upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced,
excluding those shares owned by persons who are directors and also officers, and employee stock plans in which employee
participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered
in a tender or exchange offer; or
* on or subsequent to the date, the business combination is approved by the board of directors and authorized at an annual or
special meeting of stockholders, and not by written consent, by the affirmative vote of at least two-thirds of the
outstanding voting stock held by stockholders other than that interested stockholder.
Section 203 defines "business combination" to include:
* any merger or consolidation involving the corporation and the interested stockholder;
* any sale, transfer, pledge or other disposition involving the interested stockholder of 10% or more of the assets of the
corporation;
* subject to exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the
corporation to the interested stockholder; or
* the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial
benefits provided by or through the corporation.
In general, Section 203 defines an interested stockholder as any entity or person beneficially owning 15% or more of the outstanding
voting stock of the corporation and any entity or person affiliated with or controlling or controlled by the entity or person.
Our Certificate of Incorporation and Bylaws
Fair Price Provision
In addition to the approval requirements of business combinations under Delaware law, which may have the effect of deterring hostile
takeovers or delaying changes in control or our management, our certificate of incorporation includes what is typically referred to
as a "fair price provision." Generally, this provision of our certificate of incorporation provides that a business combination,
which is defined to include any of the following:
* any merger or consolidation of our company or any majority-owned subsidiary with (a) any interested stockholder or (b) any
other person (whether or not itself an interested stockholder) that is, or after such merger or consolidation would be,
an affiliate of an interested stockholder;
* any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions)
to or with any interested stockholder of any assets of our company or of any majority-owned subsidiary which have an
aggregate fair market value of $10 million or more;
* the issuance or transfer by us or by any majority-owned subsidiary (in one transaction or series of transactions) of any of
our securities or the securities of any majority-owned subsidiary to an interested stockholder in exchange for cash,
securities or other property (or a combination thereof) having an aggregate fair market value of $10 million or more;
* the adoption of any plan or proposal for the liquidation or dissolution of our company proposed by or on behalf of any
interested stockholder or any affiliate of any interested stockholder; or
* the adoption of any plan of share exchange between our company or any majority-owned subsidiary with any interested
stockholder or any other person which is, or after such share exchange would be, an affiliate of any interested
stockholder; or
* any reclassification of securities (including any reverse stock split) or recapitalization of our company or any merger or
consolidation of our company with any of our majority-owned subsidiaries or any other transaction (whether or not with
or into or otherwise involving an interested stockholder) which has the effect, directly or indirectly, of increasing
the proportionate share of the outstanding shares of any class of our or any majority-owned subsidiary's equity
securities that is directly or indirectly owned by any interested stockholder or any affiliate of any interested
stockholder;
requires approval by the affirmative vote of at least 80% of the voting power of the then outstanding shares of our capital stock
entitled to vote, unless:
* the business combination is approved by a majority of the disinterested directors; or
* certain specified minimum price criteria and procedural requirements that are intended to assure an adequate and fair price
under the circumstances are satisfied.
Under our certificate of incorporation, an interested stockholder essentially includes any person who is the beneficial owner of 5%
or more of our voting capital stock or is an affiliate of ours and at any time within the two-year period immediately prior to the
date in question was the beneficial owner of 5% or more of our voting capital stock. A disinterested director basically refers to a
director that is not affiliated with the interested stockholder and was a member of the board of directors prior to the time that
the interested stockholder became an interested stockholder.
Supermajority Stockholder Approval of Extraordinary Transactions
Our certificate of incorporation also provides that any merger or consolidation of our company with any other person, any sale,
lease, exchange, mortgage, pledge, transfer or other disposition by us of our property or assets, and any dissolution or liquidation
or revocation thereof that Delaware law requires be approved by the holders of common stock must be approved by the affirmative vote
of at least two-thirds of the holders of our common stock.
Directors--Classified Board, Vacancies, Nominations by Stockholders and Removal for Cause
Our certificate of incorporation and our bylaws provide for a classified board consisting of three classes of directors with each
class elected for a term of three years. The number of directors in each class may be fixed or changed from time to time by the
affirmative vote of the majority of directors then in office. If the number of directors is changed, any increase or decrease will
be apportioned among the classes as nearly as possible and any additional director of any class elected to fill a vacancy resulting
from an increase in such class shall hold office for a term coinciding with the remaining term of that class. Any director elected
to fill a vacancy not resulting from an increase in a class (including vacancies filled by removal, resignation, death or
disqualification of any director) may be filled by the affirmative vote of the majority of the remaining directors and any such
successor shall have the same remaining term as his or her predecessor.
Our bylaws provide that candidates for directors may be nominated only by the board of directors or by a stockholder who gives
written notice to us in accordance with our bylaws. For a stockholder to nominate a candidate for election to the board of directors
at an annual meeting of stockholders, a stockholder must give written notice not less than 120 days prior to the first anniversary
of the last annual meeting of stockholders. For a stockholder to nominate a candidate for election to the board of directors at a
special meeting of stockholders, a stockholder must give written notice no later than the tenth day following the date on which
public announcement is first made of the date of the special meeting.
No director may be removed from office by an action of stockholders other than for cause. Our certificate of incorporation defines
"cause" to mean final conviction of a felony, unsound mind, adjudication of bankruptcy, nonacceptance of office, or conduct
prejudicial to the interest of our company.
Issuance of Preferred Stock
Our certificate of incorporation grants our board of directors the authority to issue up to 1,000,000 shares of preferred stock and
to determine the price, rights, preferences and privileges and restrictions, including voting rights, of those shares without any
further vote or action by our stockholders. The rights of the holders of common stock will be subject to, and may be harmed by, the
rights of the holders of any shares of preferred stock that may be issued in the future. The issuance of preferred stock may delay,
defer or prevent a change in control, as the terms of the preferred stock that might be issued could potentially prohibit our
consummation of any merger, reorganization, sale of substantially all of our assets, liquidation or other extraordinary corporate
transaction without the approval of the holders of the outstanding shares of preferred stock.
Transfer Agent and Registrar
The transfer agent and registrar for our common shares is EquiServe. Its address is One North State Street, 11th Floor, Chicago,
Illinois 60602 and its telephone number at that location is (312) 499-7033.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the material United States federal income tax consequences of the ownership, disposition and
conversion of the notes and the ownership and disposition of our common stock into which the notes may be converted, by initial
purchasers that purchase the notes at their "issue price." The "issue price" of the notes will be the first price at which a
substantial portion of the notes is sold for cash to investors, not including sales to underwriters or placement agents. This
summary assumes that investors will hold the notes and common stock into which the notes may be converted as capital assets for
United States federal income tax purposes. This discussion does not address all aspects of United States federal income taxation
that may be important to particular holders in light of their individual tax circumstances, such as financial institutions,
insurance companies, regulated investment companies, real estate investment trusts, tax-exempt organizations, dealers in securities,
persons that hold the notes or common stock into which the notes may be converted as part of a straddle, hedge or synthetic security
transaction for United States federal income tax purposes and persons that have a functional currency other than the United States
dollar, all of which may be subject to tax rules that differ significantly from those discussed below. Further, it does not address
any United States federal estate or gift tax laws or any state, local or foreign tax laws. Prospective investors are urged to
consult their tax advisors regarding the United States federal, state, local and foreign income and other tax consequences of the
purchase, ownership and disposition of the notes and of our common stock into which the notes may be converted.
This summary is based upon laws, regulations, rulings and decisions currently in effect, all of which are subject to change,
possibly with retroactive effect. No ruling has been sought from the IRS with respect to the statements and conclusions in this
summary, and the IRS may not agree with the statements and conclusions expressed herein.
For purposes of this summary, "U.S. Holder" means a beneficial owner of a note or of common stock that is, for United States federal
income tax purposes: (i) a citizen or resident of the United States, (ii) a corporation or other entity subject to tax as a
corporation for United States federal income tax purposes that is created or organized under the laws of the United States or any
political subdivision thereof, (iii) an estate the income of which is subject to United States federal income taxation regardless of
its source, or (iv) a trust if a court within the United States is able to exercise primary supervision over its administration and
one or more United States persons have the authority to control all of its substantial decisions. The term "U.S. Holder" also
includes certain former citizens and residents of the United States. A "Non-U.S. Holder" means any individual, corporation, estate
or trust that is not a U.S. Holder.
U.S. Holders
Notes
Interest. The stated interest on a note will be taxable to a U.S. Holder as ordinary income either at the time it accrues or is
received in accordance with such holder's method of accounting for U.S. federal income tax purposes.
Sale, Exchange or Other Disposition of the Notes. Upon the sale, exchange, retirement or other disposition of a note (other than
a conversion or repurchase for our common stock), a U.S. Holder will generally recognize capital gain or loss equal to the
difference between (i) the amount of cash proceeds and the fair market value of any property received on the sale, exchange or
redemption (except to the extent such amount is attributable to accrued interest not previously included in income, which will be
taxable as ordinary income, or is attributable to accrued interest that was previously included in income, which amount may be
received without generating further income) and (ii) such holder's adjusted tax basis in the note. A U.S. Holder's adjusted tax
basis in a note will generally equal the cost of the note to such holder plus the amount, if any, included in income on an
adjustment to the conversion price of the notes, as described below. Such capital gain or loss will be long-term capital gain or
loss if the U.S. Holder's holding period in the note is more than one year at the time of sale, exchange or retirement. The
deductibility of capital losses is subject to certain limitations.
The United States federal income tax consequences of our repurchase of a note for our common stock upon a repurchase event should
generally be the same as those described below under "Conversion of the Notes," except that to the extent any of our common stock
received by a U.S. Holder is considered attributable to accrued interest not previously included in income, such stock will be
taxable as ordinary income to such holder. Further, such holder's tax basis in shares of our common stock received attributable to
accrued interest will generally equal the amount of such accrued interest included in income, and the holding period for such shares
will begin on the date following the date of repurchase.
Conversion of the Notes. A U.S. Holder generally will not recognize any income, gain or loss upon conversion of a note into our
common stock except with respect to cash received in lieu of a fractional share of our common stock. A U.S. Holder's tax basis in
our common stock received on a conversion of a note will be the same as such holder's adjusted tax basis in the note at the time of
conversion (reduced by any basis allocable to a fractional share interest). The holding period for common stock received on
conversion will generally include the holding period of the note converted. The receipt of cash in lieu of a fractional share of
common stock will result in taxable capital gain or loss equal to the difference between the cash received for the fractional share
and the holder's adjusted tax basis in the fractional share. The deductibility of capital losses is subject to certain limitations.
Adjustments to Conversion Price. The conversion price of the notes is subject to adjustment under certain circumstances. If such
adjustment (or the failure to make such adjustment) increases the proportionate interest of a holder of notes in our fully diluted
common stock (particularly an adjustment to reflect a taxable dividend to holders of common stock), a U.S. Holder would be treated
as having received a constructive distribution whether or not such holder ever exercises its conversion privilege. Such distribution
will be taxable as a dividend (as described below) to the extent of Acxiom's current and/or accumulated earnings and profits.
Common Stock
Distributions. Distributions paid or deemed paid in respect of our common stock (including deemed distribution on the notes as
described above under "Adjustments to Conversion Price"), other than certain pro rata distributions of common shares, will be
included in the income of a U.S. Holder as ordinary dividend income to the extent of our current or accumulated earnings and
profits. Distributions in excess of our current or accumulated earnings and profits will be treated as a return of capital to the
extent of the U.S. Holder's adjusted tax basis in its common stock and thereafter as capital gain. The amount of any distribution of
property other than cash will be the fair market value of such property on the date of distribution.
Sale, Exchange, or Other Disposition of Common Stock. Upon the sale, exchange or other disposition of our common stock, a U.S.
Holder will recognize capital gain or loss equal to the difference between (i) the amount of cash and the fair market value of any
property received upon the sale, exchange or other disposition and (ii) such U.S. Holder's adjusted tax basis in the common stock.
Such capital gain or loss will be long-term capital gain or loss if the U.S. Holder's holding period in the common stock is more
than one year at the time of the sale, exchange or other disposition. A U.S. Holder's tax basis and holding period in common stock
received upon conversion of a note or repurchase of a note for our common stock upon a repurchase event is determined as discussed
above under "Conversion of the Notes" and the preceding paragraph thereto.
Non-U.S. Holders
Payments on notes. Subject to the discussion below under "Information Reporting and Backup Withholding," a Non-U.S. Holder
generally will not be subject to United States federal withholding tax on payments of principal, interest and premium on the notes
if the Non-U.S. Holder: (i) does not actually or constructively own 10% or more of the total combined voting power of all classes of
our voting stock, (ii) is not a controlled foreign corporation related to us directly or indirectly through stock ownership and
(iii) satisfies certain certification requirements described below. If these requirements are not satisfied, a 30% withholding tax
will apply to interest payments on the notes, unless the interest is effectively connected with the conduct of a U.S. trade or
business by the Non-U.S. Holder, or an applicable treaty provides for a lower rate of, or exemption from, withholding tax.
Sale, Exchange or Disposition of a Note or Common Stock. Subject to the discussion below under "Information Reporting and Backup
Withholding," a Non-U.S. Holder will generally not be subject to United States federal income tax on gain recognized on the sale,
exchange or other disposition of a note or of our common stock, unless the gain is effectively connected with the conduct of a trade
or business within the United States by the Non-U.S. Holder.
Conversion of the Notes
A Non-U.S. Holder generally will not be subject to United States federal income tax on the conversion of a note into shares of our
common stock. However, to the extent a Non-U.S. Holder receives cash in lieu of fractional shares upon conversion, any gain upon the
receipt of cash would be subject to the rules described in the preceding paragraph regarding the sale or exchange of notes or common
stock.
Distributions on common stock. A Non-U.S. Holder of our common stock will generally be subject to United States federal
withholding tax at a 30% rate on distributions paid or deemed paid in respect of our common stock (including a deemed distribution
on the notes as described above under "Adjustments to Conversion Price") that are treated as dividends for United States federal
income tax purposes, unless a lower rate is provided by an applicable treaty or the distributions are effectively connected with the
conduct of a U.S. trade or business by the Non-U.S. Holder.
Certification Requirement
In the case of a registered note, interest will not be exempt from withholding unless the beneficial owner of that note certifies on
Internal Revenue Service Form W-8BEN, under penalties of perjury, that it is not a United States person. If a Non-U.S. Holder of a
note or our common stock is engaged in a trade or business in the United States, and the income and/or gain in respect of the
ownership and/or disposition of the note and/or common stock is effectively connected with such trade or business, then such
Non-U.S. Holder will generally be taxed in the same manner as a U.S. Holder, except that such Non-U.S. Holder will be required to
provide to us a properly executed Internal Revenue Service Form W-8ECI in order to claim any exemption from withholding tax. Such
Non-U.S. Holder should consult with its own tax advisors with respect to other U.S. tax consequences of the ownership, conversion
and disposition of the note and/or our common stock, including the possible imposition of a 30% branch profits tax.
Information Reporting and Backup Withholding
Payments of interest or dividends by us on, or the proceeds of the sale or other disposition of, the notes or our common stock may
be subject to information reporting and United States federal backup withholding if the recipient of the payment fails to supply an
accurate taxpayer identification number or otherwise fails to comply with certification procedures to establish that the recipient
is not a United States person. The certification required to claim the exemption from withholding tax described above under
"Certification Requirement" will satisfy the certification requirements necessary to avoid the backup withholding as well. Any
amount withheld from a payment to a U.S. Holder under the backup withholding rules is allowable as a credit against the payee's
United States federal income tax liability, provided that the required information is provided to the Internal Revenue Service.
Certain persons, including corporations and financial institutions are exempt from backup withholding. Both U.S. and Non-U.S.
Holders of notes and our common stock should consult their tax advisors as to their qualification for an exemption from backup
withholding and the procedure for obtaining such an exemption.
The preceding discussion of certain United States federal income tax consequences is for general information and is not legal advice.
Accordingly, holders of the notes should consult their own tax advisors as to the particular consequences to them of purchasing,
holding and disposing of the notes and of our common stock.
SELLING HOLDERS
The notes were originally issued by us and sold by JP Morgan Securities Inc. and other initial purchasers, in a transaction exempt
from the registration requirements of the Securities Act, to persons reasonably believed by the initial purchasers to be "qualified
institutional buyers" (as defined in Rule 144A under the Securities Act). The selling holders (which term includes their pledges or
donees or their successors) may from time to time offer and sell any or all of the notes and common stock issued upon conversion of
the notes.
The following table sets forth information, as of May 14, 2002, with respect to the selling holders and the respective principal
amounts of notes and amounts of common stock they beneficially own that may be offered pursuant to this prospectus. The information
is based on information provided by or on behalf of the selling holders.
The selling holders may offer all, some or none of the notes or the common stock issuable upon conversion of the notes. Therefore,
we cannot estimate the amount of the notes or the common stock that will be held by the selling holders upon termination of any
sales. In addition, the selling holders identified below may have sold, transferred or otherwise disposed of all or a portion of
their notes since the date on which they provided the information regarding their notes in transactions exempt from the registration
requirements of the Securities Act. With the exception of the initial purchasers, none of the selling holders has had any material
relationship with us within the past three years.
Number of Shares of
Principal Amount of Notes Common Stock Issuable
Beneficially Owned upon Conversion of
Name of Selling Security Holders and Offered Notes
Alexandra Global Investment Fund 1, Ltd. 8,000,000 438,356
American Samoa Government 19,000 1,041
Aristeia International Limited 3,800,000 208,219
Aristeia Trading LP 1,200,000 65,753
Associated Electric & Gas Insurance Services Limited 300,000 16,438
BP Amoco PLC Master Trust 693,000 37,972
CALAMOS® Convertible Growth and Income Fund - 3,000,000 164,383
CALAMOS® Investment Trust
The Estate of James Campbell 117,000 6,410
Canyon Capital Arbitrage Master Fund, Ltd. 1,500,000 82,191
Canyon Value Realization Fund (Cayman), Ltd. 2,050,000 112,328
Canyon Value Realization Fund, L.P. 1,100,000 60,273
Canyon Mac 18 Ltd. (RMF) 350,000 19,178
Chrysler Corporation Master Retirement Trust 2,465,000 135,068
Clinton Multistrategy Master Fund, Ltd. 7,250,000 397,260
Clinton Riverside Convertible Portfolio Limited 7,250,000 397,260
Cobra Fund U.S.A., L.P. 180,000 9,863
Cobra Master Fund, Ltd. 820,000 44,931
Credit Lyonnais Securities USA Inc. 2,000,000 109,589
Delta Air Lines Master Trust 645,000 35,342
Delta Pilots D & S Trust 315,000 17,260
Deutsche Banc Alex Brown Inc. 370,000 20,273
Global Bermuda Limited Partnership 600,000 32,876
Hotel Union and Hotel Industry of Hawaii Pension Plan 197,000 10,794
Jeffries & Company Inc. 5,000 273
ries & Company, Inc. 20,000 1,095
Lakeshore International Ltd. 3,400,000 186,301
Microsoft Corporation 1,320,000 72,328
Motion Picture Industry Health Plan - Active Member Fund 185,000 10,136
Motion Picture Industry Health Plan - Retiree Member Fund 90,000 4,931
MSD TCB, L.P. 17,250,000 945,205
Nomura Securities International Inc. 4,500,000 246,575
OCM Convertible Trust 1,375,000 75,342
Partner Reinsurance Company Ltd. 395,000 21,643
Qwest Occupational Health Trust 155,000 8,493
Ram Trading Ltd. 2,500,000 136,986
Siemens/Convertibles Global Markets 1,250,000 68,493
State Employees' Retirement Fund of the State of Delaware 930,000 50,958
State of Connecticut Combined Investment Funds 1,930,000 105,753
TD Securities (USA) Inc. 1,000,000 54,794
Teachers Insurance and Annuity Association 4,250,000 232,876
UBS Warburg LLC 8,521,000 466,904
Vanguard Convertible Securities, Inc. 3,695,000 202,465
Viacom Inc. Pension Plan Master Trust 20,000 1,095
Zurich Institutional Benchmarks Master Fund Ltd. 949,000 52,000
All other holder of notes and future transferees,
pledges, donees, assignees and successors of any of those
holders (1) 77,039,000 4,221,338
----------- ---------
Total 175,000,000 9,589,042
=========== =========
(1) Information about other selling holders will be set forth in prospectus supplements, if required.
Information concerning the selling holders may change from time to time and any changed information will be set forth in supplements
to this prospectus if and when necessary. In addition, the per share conversion price, and therefore the number of shares of class
A common stock issuable upon conversion of the notes, is subject to adjustment. As a result, the aggregate principal amount of
notes and the number of shares of common stock issuable upon conversion thereof may increase or decrease.
PLAN OF DISTRIBUTION
The selling holders and their pledges, donees and successors may sell the notes and common stock offered into which the
notes are convertible directly to purchasers or through underwriters, broker-dealers or agents, who may receive compensation in the
form of discounts, concessions or commissions from the selling holders or the purchasers. These discounts, concessions or
commissions as to any particular underwriter, broker-dealer or agent may be in excess of those customary in the types of
transactions involved.
The notes and common stock may be sold from time to time in one or more transactions at fixed prices, at prevailing market
prices at the time of sale, at varying prices determined at the time of sale, or at negotiated prices. Such sales may be effected
in transactions (which may involve crosses or block transactions):
(i) on any national securities exchange or quotation service on which the Transfer Restricted Securities may be listed
or quoted at the time of sale;
(ii) in the over-the-counter market;
(iii) in transactions otherwise than on such exchanges or services or in the over-the-counter market; or
(iv) through the writing of options.
In connection with the sale of the notes and common stock, the selling holders may enter into hedging transactions with
broker-dealers, which may in turn engage in short sales of the notes or common stock or deliver notes or common stock to close out
such short positions, or loan or pledge notes or common stock to broker-dealers that in turn may sell such securities.
The aggregate proceeds to the selling holders from the sale of the notes or common stock offered by them will be the purchase price
of the notes or common stock less discounts and commissions, if any. Each of the selling holders reserves the right to accept and,
together with their agents from time to time, to reject, in whole or in part, any proposed purchase of notes or common stock to be
made directly or through agents. We will not receive any of the proceeds from this offering.
Our common stock is listed for trading on the Nasdaq National Market. The notes are currently eligible for trading on the PORTAL
System of the Nasdaq Stock Market.
The selling holders and any underwriters, broker-dealers or agents that participate in the distribution of notes and common stock
may be deemed to be "underwriters" within the meaning of Section 2(11) of the Securities Act, and any discounts, commissions,
concessions or profit received by them from any resale of notes or class A common stock may be deemed to be underwriting discounts
and commissions under the Securities Act.
The selling holders have acknowledged that they understand their obligations to comply with the provisions of the Exchange Act and
the rules thereunder, particularly Regulation M.
Any initial purchaser who is also a selling holder may be, depending on facts and circumstances, a statutory underwriter and must
acknowledge in writing prior to resale that it will deliver a prospectus in connection with any resale of the notes or underlying
class A common stock. By so acknowledging and delivering a prospectus, an initial purchaser who is also a selling holder, will not
be deemed to admit that it is an underwriter with the meaning of the Securities Act.
Any securities covered by this prospectus which qualify for sale pursuant to Rule 144, Rule 144A or Regulation S under the
Securities Act may be sold pursuant to Rule 144, Rule 144A or Regulation S rather than pursuant to this prospectus.
To the extent required, the specific notes or shares of our common stock to be sold, the names of selling holders, the respective
purchase prices and public offering prices, the names of any agent, dealer or underwriter, and any applicable commissions or
discounts with respect to a particular offer will be set forth in an accompanying prospectus supplement or, if appropriate, a
post-effective amendment to the registration statement of which this prospectus is a part.
We entered into a registration rights agreement for the benefit of the holders of the notes to register their notes and our common
stock under applicable federal and state securities laws under specific circumstances and at specific times. The registration
rights agreement provides for cross-indemnification of the selling holders and us and our respective directors, officers and
controlling persons against specific liabilities in connection with the offer and sale of the notes and our common stock, including
liabilities under the Securities Act. We will pay substantially all of the expenses incurred by the selling holders incident to the
offering and sale of the notes and common stock.
LEGAL MATTERS
Kutak Rock LLP, Little Rock, Arkansas will pass upon legal matters regarding the issuance of the notes and the validity of the
shares of our common stock being issued upon conversion of the notes.
INDEPENDENT AUDITORS
Our consolidated financial statements as of March 31, 2002 and 2001 and for the years then ended included in our annual report on
Form 10-K for the year ended March 31, 2002 and incorporated by reference into this prospectus have been audited by Arthur Andersen
LLP, independent certified public accountants, to the extent and for the periods indicated in their report thereon. Such financial
statements have been incorporated herein by reference in reliance upon the report of Arthur Andersen LLP.
Our consolidated financial statements as of March 31, 2000 and for the year then ended included in our annual report on Form 10-K
for the year ended March 31, 2002 and incorporated by reference into this prospectus have been audited by KPMG LLP, independent
certified public accountants, to the extent and for the periods indicated in their report thereon. Such financial statements have
been incorporated herein by reference in reliance upon the report of KPMG LLP.
10-33342.05
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the estimated expenses payable by Acxiom in connection with the offering described in this
registration statement.
Securities and Exchange
Commission registration fee $17,489
Legal fees 45,000
Accountants' fees 20,000
Printing expenses 25,000
Miscellaneous expenses 25,000
=======
TOTAL $132,489
=======
Item 15. Indemnification of Directors and Officers.
Exculpation. Section 102(b)(7) of the Delaware General Corporation Law permits a corporation to include in its certificate
of incorporation a provision eliminating or limiting the personal liability of a director to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, provided that such provision may not eliminate or limit the liability
of a director for any breach of the director's duty of loyalty to the corporation or its stockholders, for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of law, for any unlawful payment of dividends or unlawful
stock purchase or redemption, or for any transaction from which the director derived an improper personal benefit.
The Acxiom Charter provides that, to the fullest extent permitted by Delaware corporate law, a director shall not be liable
to Acxiom and its stockholders for monetary damages for a breach of fiduciary duty as a director.
Indemnification. Section 145 of the Delaware corporate law permits a corporation to indemnify any of its directors or
officers who was or is a party or is threatened to be made a party to any third party proceeding by reason of the fact that such
person is or was a director or officer of the corporation, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, if
such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe that such person's conduct
was unlawful. In a derivative action, i.e., one by or in the right of a corporation, the corporation is permitted to indemnify any
of its directors or officers against expenses (including attorneys' fees) actually and reasonably incurred by such person in
connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of the corporation, and except that no indemnification shall be
made for any claim as to which such person shall have been adjudged liable to the corporation, unless and only to the extent that
the court in which such action or suit was brought shall determine upon application that such person is fairly and reasonably
entitled to indemnification for such expenses despite such adjudication of liability. Section 145 also provides that, to the extent
that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to above, or in defense of any claim, issue or matter therein, such person shall be indemnified
against expenses (including attorneys' fees) actually incurred.
The Acxiom Charter provides for indemnification of directors and officers of Acxiom against liability they may incur in
their capacities as and to the extent authorized by Delaware corporate law.
Insurance. Acxiom has in effect directors' and officers' liability insurance and fiduciary liability insurance. The
fiduciary liability insurance covers actions of directors and officers as well as other employees with fiduciary responsibilities
under ERISA.
Item 16. Exhibits.
Number Description
4.1 Indenture, dated as of February 6, 2002 between Acxiom Corporation and U.S. Bank National Association,
as trustee, relating to the notes (previously filed as Exhibit 4 to Acxiom's Quarterly Report on Form
10-Q for the quarter ended December 31, 2001, Commission File No. 0-13163, and incorporated herein by
reference).
4.2 Registration Rights Agreement, dated as of February 6, 2002 among Acxiom Corporation, JP Morgan
Securities Inc. and the initial purchasers thereto (filed herewith).
4.3 Specimen Common Stock Certificate (previously filed as Exhibit 4.1 to the Registrant's Registration
Statement on Form S-4 (No. 333-61639) filed August 17, 1998 and incorporated herein by reference).
4.4 Rights Agreement dated January 28, 1998 between Acxiom and First Chicago Trust Company of New York, as
Rights Agent, including the forms of Rights Certificate and of Election to Exercise, included in ExhibitA
A to the Rights Agreement and the form of Certificate of Designation and Terms of Participating Preferred
Stock of Acxiom, included in Exhibit B to the Rights Agreement (previously filed as Exhibit 4.1 to
Acxiom's Current Report on Form 8-K dated February 10, 1998, Commission File No. 0-13163, and
incorporated herein by reference).
4.5 Amendment No. 1, dated as of May 26, 1998, to the Rights Agreement (previously filed as Exhibit 4 to the
Registrant's Current Report on Form 8-K dated June 4, 1998, Commission File No. 0-13163, and incorporated
herein by reference).
5.1 Opinion of Kutak Rock LLP (filed herewith).
8.1 Tax opinion of Kutak Rock LLP (filed herewith).
12.1 Statement of computation of ratio of earnings to fixed charges (filed herewith).
23.1 Consent of Arthur Andersen LLP (filed herewith).
23.2 Consent of KPMG LLP (filed herewith).
24.1 Power of Attorney (filed herewith).
25.1 Statement of Eligibility and Qualification on Form T-1 of Trustee under Trust Indenture Act of 1939, as
amended (filed herewith).
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made of the securities registered hereby, a
post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended
(the "Securities Act");
(ii) to reflect in the prospectus any facts or events arising after the effective date of this
registration statement (or the most recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in this registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value
of securities offered would not exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant
to Rule 424 (b), if in the aggregate, the changes in volume and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective
registration statement; and
(iii) to include any material information with respect to the plan of distribution not previously
disclosed in this registration statement or any material change to such information in this registration
statement;
provided; however, that the undertakings set forth in paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply if the information
required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished
to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") that are incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective
amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
(and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the
Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(c) The undersigned registrant hereby undertakes to deliver or cause to be delivered with the prospectus, to each
person to whom the prospectus is sent or given, the latest annual report to security holders that is incorporated
by reference in the prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3
under the Securities Exchange Act of 1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or cause to be delivered to each
person to whom the prospectus is sent or given, the latest quarterly report that is specifically incorporated by
reference in the prospectus to provide such interim financial information.
(d) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors,
officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Acxiom certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Little Rock, State of Arkansas, on May 15, 2002.
ACXIOM CORPORATION
By: /s/ Rodger S. Kline
----------------------------------
Rodger S. Kline
Company Operations Leader
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the
following persons in the capacities indicated and as of the dates indicated:
Signature
/s/ General Wesley K. Clark* Director May 15, 2002
- --------------------------------
General Wesley K. Clark
/s/ Dr. Ann Hayes Die* Director May 15, 2002
- --------------------------------
Dr. Ann Hayes Die
/s/ William T. Dillard II* Director May 15, 2002
- --------------------------------
William T. Dillard II
/s/ Harry C. Gambill* Director May 15, 2002
- --------------------------------
Harry C. Gambill
/s/ William J. Henderson* Director May 15, 2002
- --------------------------------
William J. Henderson
/s/ Rodger S. Kline Company Operations Leader May 15, 2002
- -------------------------------- and Director
Rodger S. Kline
/s/ Thomas F. McLarty, III* Director May 15, 2002
- --------------------------------
Thomas F. McLarty, III
/s/ Charles D. Morgan* Chairman of the Board and May 15, 2002
- -------------------------------- Company Leader
Charles D. Morgan (Principal executive officer)
/s/ Stephen M. Patterson* Director May 15, 2002
- --------------------------------
Stephen M. Patterson
/s/ Caroline Rook* Company Financial Compliance Leader May 15, 2002
- -------------------------------- (Principal finance and accounting officer)
Caroline Rook
/s/ James T. Womble* Client Services Leader and Director May 15, 2002
- --------------------------------
James T. Womble
*By: /s/ Rodger S. Kline
Roger S. Kline
Attorney-in-Fact
INDEX TO EXHIBITS
Number Exhibit
4.1 Indenture, dated as of February 6, 2002 between Acxiom Corporation and U.S. Bank National Association,
as trustee, relating to the notes (previously filed as Exhibit 4 to Acxiom's Quarterly Report on Form
10-Q for the quarter ended December 31, 2001, Commission File No. 0-13163, and incorporated herein by
reference).
4.2 Registration Rights Agreement, dated as of February 6, 2002 among Acxiom Corporation, JP Morgan
Securities Inc. and the initial purchasers thereto (filed herewith).
4.3 Specimen Common Stock Certificate (previously filed as Exhibit 4.1 to the Registrant's Registration
Statement on Form S-4 (No. 333-61639) filed August 17, 1998 and incorporated herein by reference).
4.4 Rights Agreement dated January 28, 1998 between Acxiom and First Chicago Trust Company of New York, as
Rights Agent, including the forms of Rights Certificate and of Election to Exercise, included in Exhibit
A to the Rights Agreement and the form of Certificate of Designation and Terms of Participating Preferred
Stock of Acxiom, included in Exhibit B to the Rights Agreement (previously filed as Exhibit 4.1 to
Acxiom's Current Report on Form 8-K dated February 10, 1998, Commission File No. 0-13163, and
incorporated herein by reference).
4.5 Amendment No. 1, dated as of May 26, 1998, to the Rights Agreement (previously filed as Exhibit 4 to the
Registrant's Current Report on Form 8-K dated June 4, 1998, Commission File No. 0-13163, and incorporated
herein by reference).
5.1 Opinion of Kutak Rock LLP (filed herewith).
8.1 Tax opinion of Kutak Rock LLP (filed herewith).
12.1 Statement of computation of ratio of earnings to fixed charges (filed herewith).
23.1 Consent of Arthur Andersen LLP (filed herewith).
23.2 Consent of KPMG LLP (filed herewith).
24.1 Power of Attorney (filed herewith).
25.1 Statement of Eligibility and Qualification on Form T-1 of Trustee under Trust Indenture Act of 1939, as
amended (filed herewith).
Exhibit 4.2
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of February 6, 2002, among Acxiom
Corporation, a Delaware corporation (the "Company"), and J.P. Morgan Securities Inc., and the initial purchasers
listed on Schedule I hereto (collectively, the "Initial Purchasers").
This Agreement is entered into in connection with the Purchase Agreement, dated January 31, 2002 (the
"Purchase Agreement"), by and among the Company and the Initial Purchasers, which provides for the sale by the
Company to the Initial Purchasers of $160,000,000 aggregate principal amount of the Company's 3.75% Convertible
Subordinated Notes Due 2009 (the "Firm Notes"), which are convertible into Common Stock of the Company, par value
$.10 per share (the "Underlying Shares"), plus up to an additional $15,000,000 aggregate principal amount of the
same that the Initial Purchasers may subsequently elect to purchase pursuant to the terms of the Purchase
Agreement (the "Additional Notes" and, together with the Firm Notes, the "Convertible Notes"). The Convertible
Notes are being issued pursuant to an indenture dated as of the date hereof (the "Indenture") between the Company
and U.S. Bank National Association, as Trustee.
As an inducement to the Initial Purchasers to enter into the Purchase Agreement, the Company agrees with
the Initial Purchasers for the benefit of the Initial Purchasers and any subsequent holder or holders from time
to time of the Convertible Notes or Underlying Stock as follows:
Section 1. Certain DefinitionsSection 1. Certain Definitions.
For purposes of this Agreement, the following terms shall have the following respective meanings:
"Amount of Registrable Securities" shall mean (a) with respect to Convertible Notes constituting
Registrable Securities, the aggregate principal amount of all such Convertible Notes outstanding, (b) with
respect to Underlying Shares constituting Registrable Securities, the aggregate number of such Underlying Shares
outstanding multiplied by the Conversion Price (as defined in the Indenture relating to the Convertible Notes
upon the conversion of which such Underlying Shares were issued) in effect at the time of computing the Amount of
Registrable Securities or, if no such Convertible Notes are then outstanding, the last Conversion Price that was
in effect under such Indenture when any such Convertible Notes were last outstanding, and (c) with respect to
combinations thereof, the sum of (a) and (b) for the relevant Registrable Securities.
"Business Day" shall mean any day that is not a Saturday, Sunday or a day on which banking institutions
in New York are authorized or required by law to be closed.
"Closing Date" shall mean the date of the closing of the issuance and sale of the Convertible Notes
pursuant to the Purchase Agreement.
"Commission" shall mean the Securities and Exchange Commission, or any other federal agency at the time
administering the Exchange Act or the Securities Act, whichever is the relevant statute for the particular
purpose.
"Company" shall have the meaning assigned thereto in the first introductory paragraph hereof (together
with any successor).
"Convertible Notes" shall have the meaning assigned thereto in the second introductory paragraph hereof.
"Damages Payment Date" shall have the meaning assigned thereto in Section 3(c) hereof.
"Depositary" shall mean The Depository Trust Company until a successor is appointed by the Company.
"Effectiveness Date" shall mean the 210th day after the Closing Date.
"Effectiveness Period" shall have the meaning assigned thereto in Section 2 hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations
of the SEC promulgated thereunder.
"Filing Date" shall mean the 120th day after the Closing Date.
"Holder" shall mean any holder of Registrable Securities.
"Indemnified Holder" shall have the meaning assigned thereto in Section 6 hereof.
"Indemnified Person" shall have the meaning assigned thereto in Section 6 hereof.
"Indemnifying Person" shall have the meaning assigned thereto in Section 6 hereof.
"Indenture" shall have the meaning assigned thereto in the second introductory paragraph hereto.
"Initial Purchasers" shall have the meaning assigned thereto in the first introductory paragraph hereto.
"Initial Shelf Registration" shall have the meaning assigned thereto in Section 2(a) hereof.
"Inspectors" shall have the meaning assigned thereto in Section 4(n) hereof.
"Liquidated Damages" shall have the meaning assigned thereto in Section 3(a) hereof.
"NASD" shall have the meaning assigned thereto in Section 4(q), hereof.
The term "person" shall mean any individual, corporation, partnership, joint venture, limited liability
company, joint stock company, trust, unincorporated organization, government or any agency or political
subdivision thereof.
"Prospectus" shall mean the prospectus included in any Registration Statement (including, without
limitation, any prospectus subject to completion and a prospectus that includes any information previously
omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, and all other
amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
"Purchase Agreement" shall mean the Purchase Agreement, dated as of January 31, 2002, among the Company
and the Initial Purchasers relating to the Convertible Notes, as the same shall be amended from time to time.
"Registrable Securities" shall mean all Convertible Notes and all Underlying Shares upon original
issuance thereof and at all times subsequent thereto until the earliest to occur of (i) a Registration Statement
covering such Convertible Notes and Underlying Shares having been declared effective by the Commission and such
Convertible Notes or Underlying Shares have been disposed of in accordance with such effective Registration
Statement; (ii) such Convertible Notes or Underlying Shares having been sold pursuant to Rule 144 under
circumstances in which any legend borne by such Security relating to restrictions on transferability thereof,
under the Securities Act or otherwise, is removed by the Company or pursuant to the Indenture; or (iii) such
Convertible Notes or Underlying Shares cease to be outstanding.
"Registration Default" shall have the meaning assigned thereto in Section 3(a) hereof.
"Registration Statement" shall mean any registration statement of the Company filed with the Commission
pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits and all material incorporated by
reference or deemed to be incorporated by reference in such registration statement.
"Rule 144," "Rule 405" and "Rule 415" shall mean, in each case, such rule promulgated under the
Securities Act (or any successor provision), as the same shall be amended from time to time.
"Securities Act" shall mean the Securities Act of 1933, or any successor thereto, as the same shall be
amended from time to time.
"Shelf Registration" shall have the meaning assigned thereto in Section 2(b) hereof.
"Shelf Registration Statement" shall have the meaning assigned thereto in Section 2(b) hereof.
"Subsequent Shelf Registration" shall have the meaning assigned thereto in Section 2(b) hereof.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, or any successor thereto, and the
rules, regulations and forms promulgated thereunder, all as the same shall be amended from time to time.
"Trustee" shall mean U.S. Bank National Association, a national banking association (together with any
successor).
"Underlying Shares" shall have the meaning assigned thereto in the second introductory paragraph hereto.
"Underwritten registration or underwritten offering" shall mean a registration in which securities of
the Company are sold to an underwriter for reoffering to the public.
Unless the context otherwise requires, any reference herein to a "Section" or "clause" refers to a
Section or clause, as the case may be, of this Registration Rights Agreement, and the words "herein," "hereof"
and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular
Section or other subdivision.
Section 2. Registration Under the Securities ActSection 2. Registration Under the Securities Act.
(a) The Company shall file a "shelf" registration statement providing for the registration of, and
the sale on a continuous or delayed basis by the holders of, all of the Registrable Securities, pursuant to Rule
415 or any similar rule that may be adopted by the Commission (the "Initial Registration Statement") on or prior
to the Filing Date. The Initial Shelf Registration shall be on Form S-3 or another appropriate form permitting
registration of such Registrable Securities for resale by Holders in the manner or manners designated by them
(including, without limitation, one or more underwritten offerings). The Company shall not permit any securities
other than the Registrable Securities to be included in the Initial Shelf Registration or any Subsequent Shelf
Registration (as defined below).
The Company agrees to use its reasonable best efforts to cause the Initial Registration Statement to
become or be declared effective under the Securities Act on or prior to the Effectiveness Date, and to keep such
Initial Registration Statement continuously effective until two years from the Closing Date (as it may be
shortened pursuant to clause (i) or clause (ii) immediately following, the "Effectiveness Period"), or such
shorter period ending when (i) all Registrable Securities covered by the Initial Shelf Registration are disposed
of in accordance therewith, (ii) the date on which all the Registrable Securities (x) held by Persons who are not
affiliates of the Company may be resold pursuant to Rule 144(k) under the Securities Act or (y) cease to be
outstanding or (iii) a Subsequent Shelf Registration covering all of the Registrable Securities has been declared
effective under the Securities Act.
(b) If the Initial Shelf Registration or any Subsequent Shelf Registration ceases to be effective for
any reason at any time during the Effectiveness Period (other than because of the sale of all of the securities
registered thereunder), the Company shall use its reasonable best efforts to obtain the prompt withdrawal of any
order suspending the effectiveness thereof, and in any event shall within 30 days of such cessation of
effectiveness amend the Initial Shelf Registration or any Subsequent Shelf Registration, as the case may be, in a
manner to obtain the withdrawal of the order suspending the effectiveness thereof, or file an additional "shelf"
Registration Statement pursuant to Rule 415 covering all of the Registrable Securities (a "Subsequent Shelf
Registration"). If a Subsequent Shelf Registration is filed, the Company shall use its reasonable best efforts to
cause the Subsequent Shelf Registration to be declared effective under the Securities Act as soon as practicable
after such filing and to keep such Registration Statement continuously effective for a period equal to the number
of days in the Effectiveness Period less the aggregate number of days during which the Initial Shelf Registration
or any Subsequent Shelf Registration was previously continuously effective. As used herein the term "Shelf
Registration" means the Initial Shelf Registration and any Subsequent Shelf Registration and the term "Shelf
Registration Statement" means any Registration Statement filed in connection with a Shelf Registration.
(c) The Company further agrees to supplement or make amendments promptly to the Shelf Registration
Statement, as and when required by the rules, regulations or instructions applicable to the registration form
used by the Company for such Shelf Registration, if required by the Securities Act or if reasonably requested by
the Holders of the majority in Amount of Registrable Securities covered by such Registration Statement or by any
underwriter of such Registrable Securities; provided, however, the Company shall have no obligation to include in
any Shelf Registration Statement any information relating to the Company not previously disclosed in any filing
made with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act.
(d) No Holder of Registrable Securities may include any of its Registrable Securities in the Shelf
Registration Statement pursuant to this Agreement unless such Holder furnishes to the Company in writing, prior
to or on the 25th Business Day after receipt of a request therefor (the "Questionnaire Deadline"), such
information as the Company may reasonably request for use in connection with the Shelf Registration Statement or
Prospectus or preliminary Prospectus included therein and in any application to be filed with or under state
securities laws. In connection with all such requests for information from Holders of Registrable Securities, the
Company shall notify such Holders of the requirements set forth in the preceding sentence. No Holder of
Registrable Securities shall be entitled to Liquidated Damages pursuant to Section 3 hereof unless such Holder
shall have provided all such reasonably requested information prior to or on the Questionnaire Deadline. Each
Holder as to which the Shelf Registration Statement is being effected agrees to furnish promptly to the Company
all information required to be disclosed in order to make information previously furnished to the Company by such
Holder not materially misleading.
Section 3. Liquidated Damages.
(a) The Company and the Initial Purchasers agree that the Holders of Registrable Securities will
suffer damages if the Company fails to fulfill its obligations under Section 2 hereof and that it would not be
feasible to ascertain the extent of such damages with precision. Accordingly, the Company agrees to pay
liquidated damages on the Registrable Securities ("Liquidated Damages") under the circumstances and to the extent
set forth below (each of which shall be given independent effect; each a "Registration Default"):
(i) if the Initial Shelf Registration is not filed with the Commission on or prior to the
Filing Date, then commencing on the day after the Filing Date, Liquidated Damages shall accrue on the
Registrable Securities at a rate of 0.25% per annum on the Amount of Registrable Securities for the
first 90 days immediately following the Filing Date, such Liquidated Damages increasing by an additional
0.25% per annum at the beginning of each subsequent 90-day period;
(ii) if the Initial Shelf Registration is not declared effective by the Commission on or prior
to the Effectiveness Date, then commencing on day after the Effectiveness Date, Liquidated Damages shall
accrue on the Registrable Securities at a rate of 0.25% per annum on the Amount of Registrable
Securities for the first 90 days immediately following the day after such Effectiveness Date, such
Liquidated Damages increasing by an additional 0.25% per annum at the beginning of each subsequent
90-day period; and
(iii) if a Shelf Registration has been declared effective and such Shelf Registration ceases to
be effective at any time during the Effectiveness Period (other than as permitted under Section 3(b)),
Liquidated Damages shall accrue on the Registrable Securities at a rate of 0.25% per annum on the Amount
of Registrable Securities for the first 90 days commencing on the day such Shelf Registration ceases to
be effective, such Liquidated Damages increasing by an additional 0.25% per annum at the beginning of
each such subsequent 90-day period;
provided, however, that Liquidated Damages on the Registrable Securities may not accrue under more than one of
the foregoing clauses (i), (ii) or (iii) at any one time and at no time shall the aggregate amount of Liquidated
Damages accruing exceed in the aggregate .50% per annum of the Amount of Registrable Securities; provided,
further, however, that (1) upon the filing of the Shelf Registration as required hereunder (in the case of clause
(a)(i) of this Section 3), (2) upon the effectiveness of the Shelf Registration as required hereunder (in the
case of clause (a)(ii) of this Section 3) or (3) upon the effectiveness of a Shelf Registration which had ceased
to remain effective (in the case of (a)(iii) of this Section 3), Liquidated Damages on the Registrable Securities
as a result of such clause (or the relevant subclause thereof), as the case may be, shall cease to accrue. It is
understood and agreed that, notwithstanding any provision to the contrary so long as any Registrable Security is
then covered by an effective Shelf Registration Statement, no Liquidated Damages shall accrue on such Registrable
Security.
(b) Notwithstanding paragraph (a) of this Section 3, the Company shall be permitted to suspend the
effectiveness of a Shelf Registration for up to 30 consecutive days in any 90-day period, for a total of not more
than 90 days in any 365-day period, without paying Liquidated Damages.
(c) So long as Convertible Notes remain outstanding, the Company shall notify the Trustee within two
Business Days after each and every date on which an event occurs in respect of which Liquidated Damages is
required to be paid. Any amounts of Liquidated Damages due pursuant to (a)(i), (a)(ii) or (a)(iii) of this
Section 3 will be payable in cash semi-annually on each February 15 and August 15 (each a "Damages Payment
Date"), commencing with the first such date occurring after any such Liquidated Damages commences to accrue, to
Holders to whom regular interest is payable on such Damages Payment Date with respect to Convertible Notes that
are Registrable Securities and to Persons that are registered Holders 15 days prior to such Damages Payment Date
with respect to Underlying Shares that are Registrable Securities. The amount of Liquidated Damages for
Registrable Securities will be determined by multiplying the applicable rate of Liquidated Damages by the Amount
of Registrable Securities outstanding on the Damages Payment Date following such Registration Default in the case
of the first such payment of Liquidated Damages with respect to a Registration Default (and thereafter at the
next succeeding Damages Payment Date until the cure of such Registration Default), multiplied by a fraction, the
numerator of which is the number of days such Liquidated Damages rate was applicable during such period
(determined on the basis of a 360-day year comprised of twelve 30-day months and, in the case of a partial month,
the actual number of days elapsed), and the denominator of which is 360.
(d) Any reference herein to a registration statement as of any time shall be deemed to include any
document incorporated, or deemed to be incorporated, therein by reference as of such time, and any reference
herein to any amendment to a registration statement as of any time shall be deemed to include any document
incorporated, or deemed to be incorporated, therein by reference as of such time.
Section 4. Registration ProceduresSection 4. Registration Procedures.
If the Company files a registration statement pursuant to Section 2, the Company shall effect such
registrations to permit the resale of the securities covered thereby in accordance with the intended method or
methods of disposition thereof, and pursuant thereto and in connection with any Registration Statement filed by
the Company hereunder the Company shall:
(a) prepare and file with the Commission, prior to the Filing Date, a Registration Statement or
Registration Statements to be effected as contemplated by Section 2, and use its reasonable efforts to cause such
Registration Statement to become effective and remain effective as provided herein; provided, however, that
before filing any Registration Statement or Prospectus or any amendments or supplements thereto, the Company
shall furnish to and afford the Holders of the Registrable Securities covered by such Registration Statement, a
single counsel to such Holders (chosen in accordance with Section 5(b)) and the managing underwriters, if any, a
reasonable opportunity to review copies of all such documents proposed to be filed (in each case, where possible,
at least four Business Days prior to such filing, or such date as is reasonable under the circumstances). The
Company shall not file any Registration Statement or Prospectus or any amendments or supplements thereto if the
Holders of a majority in Amount of Registrable Securities covered by such Registration Statement, their counsel
or the managing underwriters, if any, shall reasonably object based on a violation or alleged violation of the
Securities Act or the Exchange Act or the respective rules promulgated thereunder;
(b) prepare and file with the Commission such amendments and post-effective amendments to each Shelf
Registration and the prospectus included therein as may be necessary to effect and maintain the continuous
effectiveness of such Registration Statement for the Effectiveness Period; cause the related Prospectus to be
supplemented by any Prospectus Supplement required by applicable law, and as so supplemented to be filed pursuant
to Rule 424 (or any similar provisions then in force) promulgated under the Securities Act; and use all
reasonable best efforts to comply with the provisions of the Securities Act and the Exchange Act applicable to it
with respect to the disposition of all securities covered by such Registration Statement as so amended or in such
Prospectus as so supplemented. The Company shall be deemed not to have used its reasonable best efforts to keep a
Registration Statement effective during the Effectiveness Period if it voluntarily takes any action that would
result in selling Holders of the Registrable Securities covered thereby not being able to sell such Registrable
Securities during that period unless such action is required by applicable law or unless the Company complies
with this Agreement, including, without limitation, the provisions of Sections 3(b) and 4(k) hereof;
(c) notify the selling Holders of Registrable Securities, a single counsel to such Holders (chosen in
accordance with Section 5(b)) and the managing underwriters, if any, promptly (but in any event within two
Business Days) and, confirm such advice in writing, (i) when a Prospectus or any prospectus supplement or
post-effective amendment has been filed, and, with respect to a Registration Statement or any post-effective
amendment, when the same has become effective under the Securities Act (including in such notice a written
statement that any Holder may, upon request, obtain, at the sole expense of the Company, one conformed copy of
such Registration Statement or post-effective amendment including financial statements and schedules, documents
incorporated or deemed to be incorporated by reference and exhibits), (ii) of the issuance by the Commission of
any stop order suspending the effectiveness of a Registration Statement or the initiation or threatening of any
proceedings for that purpose, (iii) of the happening of any event, the existence of any condition or any
information becoming known that makes any statement made in such Registration Statement or related Prospectus or
any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or
that requires the making of any changes in or amendments or supplements to such Registration Statement,
Prospectus or documents so that, in the case of the Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and that in the case of the Prospectus, it will not contain any
untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which they were made, not misleading and
(iv) of the Company's determination that a post-effective amendment to a Registration Statement would be
appropriate;
(d) use its reasonable efforts to prevent the issuance of any order suspending the effectiveness of a
Registration Statement or of any order preventing or suspending the use of a Prospectus, and if any such order is
issued, to use reasonable best efforts to obtain the withdrawal of any such order at the earliest practicable
date;
(e) if requested by any managing underwriter or underwriters, if any, or the Holders of a majority in
Amount of Registrable Securities being sold in connection with an underwritten offering, (i) promptly
incorporate in a prospectus supplement or post-effective amendment such information as is required by the
applicable rules and regulations of the Commission and as such managing underwriter or underwriters, if any, such
Holder or counsel for any of them reasonably determine is necessary to be included therein, (ii) make all
required filings of such prospectus supplement or amendment promptly after notification of the matters to be
incorporated in such prospectus supplement or post-effective amendment; and (iii) supplement or make amendment to
such Registration Statement;
(f) furnish to each selling Holder of Registrable Securities, a single counsel to such Holders
(chosen in accordance with Section 5(b)) and each managing underwriter, if any, one conformed copy of the
Registration Statement, or Registration Statements and each post-effective amendment thereto (in each case
including all exhibits, financial statements but excluding schedules thereto, and documents incorporated or
deemed incorporated by reference therein) (unless specifically so requested in writing by such Holder of
Registrable Securities or managing underwriter, as the case may be);
(g) deliver to each selling Holder of Registrable Securities, a single counsel to such Holders
(chosen in accordance with Section 5(b)) and the underwriters, if any, at the sole expense of the Company, as
many copies of the Prospectus (including each form of preliminary prospectus) and each amendment or supplement
thereto and any documents incorporated by reference therein as such Persons may reasonably request; and, subject
to the second paragraph of Section 4(s) hereof, the Company hereby consents to the use of such Prospectus and
each amendment or supplement thereto by each of the selling Holders of Registrable Securities and the
underwriters or agents, if any, and dealers (if any), in connection with the offering and sale of the Registrable
Securities covered by such Prospectus and any amendment or supplement thereto;
(h) prior to any public offering of Registrable Securities, to use its reasonable best efforts to
register or qualify, to the extent required by applicable law, and to cooperate with the selling Holders of
Registrable Securities, the managing underwriter or underwriters, if any, and their respective counsel in
connection with the registration or qualification (or exemption from such registration or qualification) of such
Registrable Securities or offer and sale under the securities or Blue Sky laws of such jurisdictions within the
United States as any selling Holder, or the managing underwriter or underwriters, if any, reasonably request;
provided, however, that where Registrable Securities are offered other than through an underwritten offering, the
Company agrees to cause the Company's counsel to perform Blue Sky investigations and file registrations and
qualifications required to be filed pursuant to this Section 4(h); keep each such registration or qualification
(or exemption therefrom) effective during the period such Registration Statement is required to be kept effective
and do any and all other acts or things reasonably necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Securities covered by the applicable Registration Statement; provided, however,
that the Company shall not be required to (i) qualify generally to do business in any jurisdiction where it is
not then so qualified, (ii) take any action that would subject it to general service of process in any such where
it is not then so subject or (iii) subject itself to taxation in excess of a nominal dollar amount in any such
jurisdiction where it is not then so subject;
(i) cooperate with the selling Holders of Registrable Securities and the managing underwriter or
underwriters, if any, to facilitate the timely preparation and delivery of certificates representing shares of
Registrable Securities to be sold, which certificates shall not bear any restrictive legends and shall be in a
form eligible for deposit with The Depository Trust Company; and enable such shares of Registrable Securities to
be in such denominations and registered in such names as the managing underwriter or underwriters, if any, or
Holders may reasonably request;
(j) use all reasonable efforts to obtain the consent or approval of each federal, state or local
governmental agency or authority which may be required to effect the Resale Registration or the offering or sale
in connection therewith or to enable the selling holder or holders to offer, or to consummate the disposition of,
their Registrable Securities, except as may be required solely as a consequence of the nature of such selling
Holder's business, in which case the Company will cooperate in all reasonable respects with the filing of such
Registration Statement and the granting of such approvals;
(k) upon the occurrence of any event contemplated by paragraph 4(c)(ii), 4(c)(iii) or 4(c)(iv)
hereof, as promptly as practicable prepare and (subject to Section 4(a) hereof) file with the SEC, at the sole
expense of the Company, a supplement or post-effective amendment to the Registration Statement or a supplement to
the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, or file
any other required document so that, as thereafter delivered to the purchasers of the Registrable Securities
being sold thereunder, any such Prospectus will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
(l) provide (i) the Trustee with certificates for Registrable Securities in a form eligible for
deposit with the Depositary Trust Company and (ii) a CUSIP number for all Registrable Securities, not later than
the applicable Effective Time;
(m) in connection with any underwritten offering of Registrable Securities pursuant to a Shelf
Registration, enter into one or more underwriting agreements as is customary in underwritten offerings of such
securities similar to the Registrable Securities and take such other actions in connection therewith as are
reasonably requested by the managing underwriter in order to expedite or facilitate the disposition of such
Registrable Securities and, in such connection, (i) make such representations and warranties to, and covenants
with, the underwriters with respect to the business of the Company and its subsidiaries (including any acquired
business, properties or entity, if applicable) and the Registration Statement, Prospectus and documents, if any,
incorporated or deemed to be incorporated by reference therein, in each case, as are customarily made by issuers
to underwriters in underwritten offerings of securities similar to the Registrable Securities and confirm the
same in writing if and when requested; (ii) obtain the written opinion of counsel to the Company and written
updates thereof in form, scope and substance reasonably satisfactory to the managing underwriter or underwriters,
addressed to the underwriters covering the matters customarily covered in opinions requested in underwritten
offerings of securities similar to the Registrable Securities and such other matters as may be reasonably
requested by the managing underwriter or underwriters; and (iii) obtain "cold comfort" letters and updates
thereof in form, scope and substance reasonably satisfactory to the managing underwriter or underwriters from the
independent certified public accountants of the Company (and, if necessary, any other independent certified
public accountants of any subsidiary of the Company or of any business acquired by the Company for which
financial statements and financial data are, or are required to be, included or incorporated by reference in the
Registration Statement), addressed to each of the underwriters, such letters to be in customary form and covering
matters of the type customarily covered in "cold comfort" letters in connection with underwritten offerings of
securities similar to the Registrable Securities and such other matters as reasonably requested by the managing
underwriter or underwriters as permitted by the Statement on Auditing Standards No. 72. The above shall be done
as and to the extent required by such underwriting agreement;
(n) make available for inspection by any selling Holder of such Registrable Securities being sold,
any underwriter participating in any such disposition of Registrable Securities, if any, and any attorney,
accountant or other agent retained by any such selling Holder, or underwriter (collectively, the "Inspectors"),
at the offices where normally kept, during reasonable business hours at such time or times as shall be mutually
convenient for the company and the Inspectors as a group, all financial and other records, pertinent corporate
documents and instruments of the Company and its subsidiaries (collectively, the "Records") as shall be
reasonably necessary to enable them to exercise any applicable due diligence responsibilities, and cause the
officers, directors and employees of the Company and its subsidiaries to supply all information reasonably
requested by any such Inspector in connection with such Registration Statement. Records that the Company
determines, in good faith, to be confidential and any Records that it notifies the Inspectors are confidential
shall not be disclosed by any Inspector unless (i) the disclosure of such Records is necessary to avoid or
correct a material misstatement or material omission in such Registration Statement, (ii) the release of such
Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction, (iii) disclosure
of such information is, in the opinion of counsel for any Inspector, necessary or advisable in connection with
any action, claim, suit or proceeding directly involving or potentially involving such Inspector and arising out
of, based upon, relating to, or involving this Agreement or any transactions contemplated hereby or arising
hereunder, (iv) the information in such Records has been made generally available to the public other than
through the acts of such Inspector; provided, however, that prior notice shall be provided as soon as practicable
to the Company of the potential disclosure of any information by such Inspector pursuant to clause (ii) or (iii)
of this sentence to permit the Company to obtain a protective order (or waive the provisions of this paragraph
(n)) and that such Inspector shall take such actions as are reasonably necessary to protect the confidentiality
of such information (if practicable) to the extent such action is otherwise not inconsistent with, an impairment
of or in derogation of the rights and interests of any Holder or Inspector or (v) the information in such Records
has been made generally available to the public other than as a result of a breach of this Agreement;
(o) provide (i) the Holders of the Registrable Securities to be included in such Registration
Statement and not more than one counsel for all the Holders of such Registrable Securities, (ii) the underwriters
(which term, for purposes of this Registration Rights Agreement, shall include a Person deemed to be an
underwriter within the meaning of Section 2(11) of the Securities Act), if any, thereof, (iii) the sales or
placement agent, if any, thereof, and (iv) one counsel for such underwriters or agents, reasonable opportunity to
participate in the preparation of such Registration Statement, each prospectus included therein or filed with the
Commission, and each amendment or supplement thereto;
(p) comply with all applicable rules and regulations of the Commission and make generally available
to its securityholders earning statements satisfying the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder (or any similar rule promulgated under the Securities Act) no later than 45 days after the
end of any 12-month period (or 90 days after the end of any 12-month period if such period is a fiscal year) (i)
commencing at the end of any fiscal quarter in which Registrable Securities are sold to underwriters in a firm
commitment or best efforts underwritten offering and (ii) if not sold to underwriters in such an offering,
commencing on the first day of the first fiscal quarter of the Company after the effective date of a Registration
Statement, which statements shall cover said 12-month periods;
(q) cooperate with each seller of Registrable Securities covered by any Registration Statement and
each underwriter, if any, participating in the disposition of such Registrable Securities and their respective
counsel in connection with any filings required to be made with the National Association of Securities Dealers,
Inc. (the "NASD"), including, if the Conduct Rules of the NASD or any successor thereto as amended from time to
time so require, engaging a "qualified independent underwriter" ("QIU") as contemplated therein and making
Records available to such QIU as though it were a participating underwriter for the purposes of Section 4(n) and
otherwise applying the provisions of this Agreement to such QIU (including indemnification) as though it were a
participating underwriter;
(r) cause the Indenture to be qualified under the Trust Indenture Act not later than the effective
date of the first Registration Statement relating to the Registrable Securities; and in connection therewith,
cooperate with the Trustee and the Holders of the Registrable Securities to effect such changes to the Indenture
as may be required for the Indenture to be so qualified in accordance with the terms of the Trust Indenture Act;
and execute, and use its reasonable best efforts to cause the Trustee to execute, all documents as may be
required to effect such changes and all other forms and documents required to be filed with the Commission to
enable the Indenture to be so qualified in a timely manner; and
(s) use its reasonable best efforts to take all other steps necessary or advisable to effect the
registration of the Registrable Securities covered by a Registration Statement contemplated hereby.
Each Holder who intends to be named as a selling Holder in the Shelf Registration Statement shall
furnish to the Company in writing, within 25 Business Days after receipt of a request therefor as set forth in a
questionnaire in the form attached hereto as Annex A, such information regarding such Holder and the proposed
distribution by such Holder of its Registrable Securities as the Company may reasonably request for use in
connection with the Shelf Registration Statement or Prospectus or preliminary Prospectus included therein. Each
Holder who has been named as a selling Holder in the Shelf Registration Statement must notify the Company not
later than three Business Days prior to any proposed sale pursuant to the Shelf Registration Statement, and such
notice shall be effective for five Business Days. Holders that do not complete the questionnaire and deliver it
to the Company shall not be named as selling securityholders in the Prospectus or preliminary Prospectus included
in the Shelf Registration Statement and therefore shall not be permitted to sell any Registrable Securities
pursuant to the Shelf Registration Statement. Each Holder who intends to be named as a selling Holder in the
Shelf Registration Statement shall promptly furnish to the Company in writing such other information as the
Issuer may from time to time reasonably request in writing. Each seller as to which any Shelf Registration is
being effected agrees to furnish promptly to the Company all information required to be disclosed so that the
information previously furnished to the Company by such seller is not materially misleading and does not omit to
state any material fact required to be stated therein or necessary to make the statements therein not misleading
in the light of the circumstances under which they were made.
Each Holder of Registrable Securities agrees by acquisition of such Registrable Securities that, upon
actual receipt of any notice from the Company of the happening of any event of the kind described in Section
4(c)(ii), 4(c)(iii) or 4(c)(iv) hereof, such Holder will forthwith discontinue disposition of such Registrable
Securities covered by such Registration Statement or Prospectus until such Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 4(k) hereof, or until it is advised in writing by the
Company that the use of the applicable Prospectus may be resumed, and has received copies of any amendments or
supplements thereto.
Section 5. Registration ExpensesSection 5. Registration Expenses.
(a) The Company agrees to bear and to pay or cause to be paid promptly all expenses incident to the
Company's performance of or compliance with this Agreement, including (i) all Commission and any NASD
registration, filing and review fees and expenses including reasonable fees and disbursements of counsel for the
underwriters in connection with such registration, filing and review, (ii) all fees and expenses in connection
with the qualification of the Securities for offering and sale under the State securities and blue sky laws and
determination of their eligibility for investment under the laws of such jurisdictions as any managing
underwriters may reasonably designate, including any reasonable fees and disbursements of counsel for the in
connection with such qualification and determination, (iii) all expenses relating to the preparation, printing,
production, distribution and reproduction of each registration statement required to be filed hereunder, each
prospectus included therein or prepared for distribution pursuant hereto, each amendment or supplement to the
foregoing, the expenses of preparing the Securities for delivery and the expenses of printing or producing any
underwriting agreements, agreements among underwriters, selling agreements and blue sky or legal investment
memoranda and all other documents in connection with the offering, sale or delivery of Securities to be disposed
of (including certificates representing the Securities), (iv) messenger, telephone and delivery expenses relating
to the offering, sale or delivery of Securities and the preparation of documents referred in clause (iii) above,
(v) fees and expenses of the Trustee under the Indenture, any agent of the Trustee and any counsel for the
Trustee, (vi) internal expenses (including all salaries and expenses of the Company's officers and employees
performing legal or accounting duties), (vii) reasonable fees, disbursements and expenses of counsel and
independent certified public accountants of the Company (including the expenses of any opinions or "cold comfort"
letters required by or incident to such performance and compliance), (viii) reasonable fees, disbursements and
expenses of any "qualified independent underwriter" engaged pursuant to Section 4(q) hereof, (ix) fees,
disbursements and expenses of one counsel for the sellers of Registrable Securities (subject to the provisions of
Section 5(a)(ii) hereof), (x) the fees and expenses incurred in connection with the listing of the securities to
be registered on any securities exchange, if applicable, and (xi) any fees charged by securities rating services
for rating the Securities as required by the Indenture (collectively, the "Registration Expenses"). To the
extent that any Registration Expenses are incurred, assumed or paid by any holder of Registrable Securities or
any placement or sales agent therefor or underwriter thereof, the Company shall reimburse such person for the
full amount of the Registration Expenses so incurred, assumed or paid promptly after receipt of a request
therefor (accompanied by receipts, invoices or other documentary evidence, as appropriate). Notwithstanding the
foregoing, each Holder shall pay all underwriting discounts and commissions attributable to the sale of such
Registrable Securities sold by it.
(b) The Company shall reimburse the Holders of the Registrable Securities being registered in a Shelf
Registration for the reasonable fees and disbursements of not more than one counsel chosen by the Holders of a
majority in Amount of Registrable Securities to be included in such Registration Statement.
Section 6. IndemnificationSection 6. Indemnification.
(a) The Company agrees to indemnify and hold harmless (i) each Initial Purchaser, (ii) each Holder,
(iii) each Person, if any, who controls (within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act) any of the foregoing (any of the Persons referred to in this clause (iii) being
hereinafter referred to as a "controlling person"), (iv) the respective officers, directors, partners, employees,
representatives and agents of the Initial Purchasers, the Holders (including predecessor Holders) or any
controlling person (any person referred to in clause (i), (ii), (iii) or (iv) may hereinafter be referred to as
an "Indemnified Holder"), from and against any and all losses, claims, damages, liabilities and judgments
(including, without limitation, reasonable legal fees and other expenses incurred in connection with any suit,
action or proceeding or any claim asserted) caused by any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement or Prospectus, or any amendment or supplement thereto or
any related preliminary prospectus, or caused by any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with information relating to any Holder furnished
to the Company in writing by such Holder expressly for use in therein; provided, however, that the Company shall
not be liable to any Indemnified Holder under the indemnity agreement of this paragraph with respect to any
preliminary prospectus to the extent that any such loss, claim, damage, liability, judgment or expense of such
Indemnified Holder results from the fact that such Indemnified Holder sold Registrable securities under a
Registration Statement to a Person as to whom it shall be established that there was not sent or given, at or
prior to the written confirmation of such sale, a copy of the Prospectus (or of the preliminary prospectus as
then amended or supplemented if the Company shall have furnished such Indemnified Holder with such amendment or
supplement thereto on a timely basis) and the loss, claim, damage, liability or expense of such Indemnified
Holder results from an untrue statement or omission of a material fact contained in the preliminary prospectus
which was corrected in the Prospectus (or in the preliminary prospectus as then amended or supplemented if the
Company shall have furnished such Indemnified Holder with such amendment or supplement thereto, as the case may
be, on a timely basis). The Company shall notify such Indemnified Holder promptly of the institution, threat or
assertion of any claim, proceeding (including any governmental investigation) or litigation in connection with
the matters addressed by this Agreement which involves the Company or such Indemnified Holder.
(b) Each Holder agrees, severally and not jointly, to indemnify and hold harmless the Company, its
directors, officers and each Person who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Company
to each Holder, but only with reference to such losses, claims, damages or liabilities which are caused by any
untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with
information relating to a Holder furnished to the Company in writing by such Holder expressly for use in any
Registration Statement or Prospectus, or any amendment or supplement thereto or any related preliminary
prospectus.
(c) If any suit, action, proceeding (including any governmental or regulatory investigation), claim
or demand shall be brought or asserted against any Person in respect of which indemnity may be sought pursuant to
either of the two preceding paragraphs, such Person (the "Indemnified Person") shall promptly notify the Person
or Persons against whom such indemnity may be sought (each an "Indemnifying Person") in writing, and such
Indemnifying Person, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others entitled to indemnification pursuant to
this Section 6 that the Indemnifying Person may designate in such proceeding and shall pay the fees and expenses
of such counsel related to such proceeding. In any such proceeding, any Indemnified Person shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified
Person unless (i) such Indemnifying Person and the Indemnified Person shall have mutually agreed to the contrary,
(ii) such Indemnifying Person has failed within a reasonable time to retain counsel reasonably satisfactory to
such Indemnified Person or (iii) the named parties in any such proceeding (including any impleaded parties)
include an Indemnifying Person and an Indemnified Person and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between them. It is understood that an
Indemnifying Person shall not, in connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all
Indemnified Persons, and that all such fees and expenses shall be reimbursed as they are incurred. Any such
separate firm for the Indemnified Holders shall be designated in writing by the Holders of the majority in Amount
of Registrable Securities, and any such separate firm for the Company, its directors, respective officers and
such control Persons of the Company shall be designated in writing by the Company. The Indemnifying Person shall
not be liable for any settlement of any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, such Indemnifying Person agrees to indemnify any
Indemnified Person from and against any loss or liability by reason of such settlement or judgment. No
Indemnifying Person shall, without the prior written consent of the Indemnified Person, effect any settlement of
any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Person, unless such settlement (i) includes an
unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such
proceeding and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act
by or on behalf of any Indemnified Person.
(d) If for any reason the indemnification provisions contemplated by Section 6(a) or Section 6(b) are
unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to reflect the relative fault of the
indemnifying party and the indemnified party in connection with the statements or omissions that resulted in such
losses, claims, damages or liability, as well as any other relevant equitable considerations. The relative fault
of such indemnifying party and indemnified party shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by such indemnifying party or by such indemnified party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or prevent such statement or
omission. The parties hereto agree that it would not be just and equitable if contributions pursuant to this
Section 6(d) were determined by pro rata allocation (even if the holders or any agents or underwriters or all of
them were treated as one entity for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in this Section 6(d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, or liabilities (or actions in respect thereof)
referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 6(d), no holder shall be required to contribute any amount in excess of the amount by
which the dollar amount of the proceeds received by such holder from the sale of any Registrable Securities
(after deducting any fees, discounts and commissions applicable thereto) exceeds the amount of any damages which
such holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission, and no underwriter shall be required to contribute any amount in excess of the amount by
which the total price at which the Registrable Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent misrepresentation. The holders' and any
underwriters' obligations in this Section 6(d) to contribute shall be several in proportion to the principal
amount of Registrable Securities registered or underwritten, as the case may be, by them and not joint.
(e) The obligations of the Company under this Section 6 shall be in addition to any liability which
the Company may otherwise have and shall extend, upon the same terms and conditions, to each officer, director
and partner of each holder, agent and underwriter and each person, if any, who controls any holder, agent or
underwriter within the meaning of the Securities Act; and the obligations of the holders and any agents or
underwriters contemplated by this Section 6 shall be in addition to any liability which the respective holder,
agent or underwriter may otherwise have and shall extend, upon the same terms and conditions, to each officer and
director of the Company (including any person who, with his consent, is named in any registration statement as
about to become a director of the Company) and to each person, if any, who controls the Company within the
meaning of the Securities Act.
Section 7. Underwritten OfferingsSection 7. Underwritten Offerings.
(a) If any of the Registrable Securities covered by the Resale Registration are to be sold pursuant
to an underwritten offering, the managing underwriter or underwriters thereof shall be designated by the Holders
of the majority in Amount of Registrable Securities to be included in such offering and will be reasonably
acceptable to the Company.
(b) Each Holder of Registrable Securities hereby agrees with each other such Holder that no such
Holder may participate in any underwritten offering hereunder unless such holder (i) agrees to sell such Holder's
Registrable Securities on the basis provided in any underwriting arrangements approved by the persons entitled
hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting
arrangements.
Section 8. Rule 144Section 8. Rule 144.
The Company covenants to the holders of Registrable Securities that to the extent they shall be required
to do so under the Exchange Act, the Company shall timely file the reports required to be filed by it under the
Exchange Act or the Securities Act (including the reports under Section 13 and 15(d) of the Exchange Act referred
to in subparagraph (c)(1) of Rule 144 adopted by the Commission under the Securities Act) and the rules and
regulations adopted by the Commission thereunder, and shall take such further action as any holder of Registrable
Securities may reasonably request, all to the extent required from time to time to enable such holder to sell
Registrable Securities without registration under the Securities Act within the limitations of the exemption
provided by Rule 144 under the Securities Act, as such Rule may be amended from time to time, or any similar or
successor rule or regulation hereafter adopted by the Commission. Upon the request of any holder of Registrable
Securities in connection with that holder's sale pursuant to Rule 144, the Company shall deliver to such holder a
written statement as to whether it has complied with such requirements. The Company shall not be required to
comply with this Section 8 after all Registrable Securities have been disposed of in accordance with an effective
Registration Statement or sold pursuant to Rule 144.
Section 9. MiscellaneousSection 9. Miscellaneous.
(a) No Inconsistent Agreements. The Company represents, warrants, covenants and agrees that it has
not granted, and shall not grant, registration rights with respect to Registrable Securities or any other
securities which would be inconsistent with the terms contained in this Agreement.
(b) Specific Performance. The parties hereto acknowledge that there would be no adequate remedy at
law if the Company failed to perform any of its obligations hereunder and that the Initial Purchasers and the
holders from time to time of the Registrable Securities may be irreparably harmed by any such failure, and
accordingly agree that the Initial Purchasers and such holders, in addition to any other remedy to which they may
be entitled at law or in equity, shall be entitled, to the extent permitted by applicable law, to compel specific
performance of the obligations of the Company under this Agreement in accordance with the terms and conditions of
this Agreement, in any court of the United States or any State thereof having jurisdiction.
(c Notices. All notices, requests, claims, demands, waivers and other communications hereunder
shall be in writing and shall be deemed to have been duly given when (i) delivered by hand, if delivered
personally or by courier, (ii transmitted by any standard form of telecommunication upon receipt of a signal
confirming receipt or (iii) three days after being deposited in the mail (registered or certified mail, postage
prepaid, return receipt requested) as follows: If to the Company, to #1 Information Way, P.O. Box 8180, Little
Rock, Arkansas 72202-8180 (telefax: (501) 342-3913), Attention: Treasurer, with a copy to Kutak Rock LLP, 425
West Capitol, Suite 1100, Little Rock, Arkansas 72201-3409 (telefax: (501) 975-3001), Attention: Jeffrey J.
Gearhart, Esq. and if to a holder, to the address of such holder set forth in the security register or other
records of the Company, or to such other address as the Company, or any such holder may have furnished to the
other in writing in accordance herewith, except that notices of change of address shall be effective only upon
receipt.
(d Parties in Interest. All the terms and provisions of this Agreement shall be binding upon, shall
inure to the benefit of and shall be enforceable by, the parties hereto and the holders from time to time of the
Registrable Securities and the respective successors and assigns of the parties hereto and such holders. In the
event that any transferee of any holder of Registrable Securities shall acquire Registrable Securities, in any
manner, whether by gift, bequest, purchase, operation of law or otherwise, such transferee shall, without any
further writing or action of any kind, be deemed a beneficiary hereof for all purposes and such Registrable
Securities shall be held subject to all of the terms of this Agreement, and by taking and holding such
Registrable Securities such transferee shall be entitled to receive the benefits of, and be conclusively deemed
to have agreed to be bound by, all of the applicable terms and provisions of this Agreement. If the Company
shall so request, any such successor, assign or transferee shall agree in writing to acquire and hold the
Registrable Securities subject to all of the applicable terms hereof.
(e Survival. The respective indemnities, agreements, representations, warranties and each other
provision set forth in this Agreement or made pursuant hereto shall remain in full force and effect regardless of
any investigation (or statement as to the results thereof) made by or on behalf of any holder of Registrable
Securities, any director, officer or partner of such holder, any agent or underwriter or any director, officer or
partner thereof, or any controlling person of any of the foregoing, and shall survive delivery of and payment for
the Registrable Securities pursuant to the Purchase Agreement and the transfer and registration of Registrable
Securities by such Holder.
(f GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF
THE STATE OF NEW YORK.
(g Jurisdiction, Venue and Service of Process. Each of the parties hereto hereby submits to the
jurisdiction of any Federal or State court in the City, County and State of New York, or to the courts of its own
corporate domicile, in respect of actions brought against it as a defendant, in any legal suit, action or
proceeding based on or arising under this Agreement and agrees that all claims in respect of such suit or
proceeding may be determined in any such court. The Company waives, to the extent permitted by law, the defense
of an inconvenient forum or objections to personal jurisdiction with respect to the maintenance of such legal
suit, action or proceeding.
(h Securities Held by the Company or its Affiliates. Whenever the consent or approval of Holders of
a specified percentage in Amount of Registrable Securities is required hereunder, Registrable Securities held by
the Company or its affiliates (as such term is defined in Rule 405 under the Securities Act) shall not be counted
in determining whether such consent or approval was given by the Holders of such required percentage.
(i Headings. The descriptive headings of the several Sections and paragraphs of this Agreement are
inserted for convenience only, do not constitute a part of this Agreement and shall not affect in any way the
meaning or interpretation of this Agreement.
(j Entire Agreement; Amendments. This Agreement and the other writings referred to herein
(including the Indenture and the form of Securities) or delivered pursuant hereto which form a part hereof
contain the entire understanding of the parties with respect to its subject matter. This Agreement supersedes
all prior agreements and understandings between the parties with respect to its subject matter. This Agreement
may be amended, modified or supplemented and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or prospectively) only by a written instrument
duly executed by the Company and the holders of at least a majority amount of Registrable Securities; provided
that Section 6 and this Section 9(j) may not be amended, modified or supplemented unless the prior written
consent of the Company and each Holder (including, in the case of an amendment, modification or supplement of
Section 6, any person who was a Holder of Registrable Securities disposed of pursuant to a Registration
Statement). Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect
to a matter that relates exclusively to the rights of Holders of Registrable Securities whose securities are
being sold pursuant to a Registration Statement and that does not directly or indirectly affect the rights of
other Holders of Registrable Securities may be given by Holders of at least a majority in Amount of Registrable
Securities being sold by such Holders pursuant to such Registration Statement; provided, that the provisions of
this sentence may not be amended, modified, or supplemented except in accordance with the provisions of the
immediately preceding sentence. Each holder of any Registrable Securities at the time or thereafter outstanding
shall be bound by any amendment or waiver effected pursuant to this Section 9(j), whether or not any notice,
writing or marking indicating such amendment or waiver appears on such Registrable Securities or is delivered to
such holder.
(k Counterparts. This agreement may be executed by the parties in counterparts, each of which shall
be deemed to be an original, but all such respective counterparts shall together constitute one and the same
instrument.
Agreed to and accepted as of the date referred to above.
ACXIOM CORPORATION.
By: /s/ Jerry C. Jones
-----------------------------------------------------------
Name: Jerry C. Jones
Title:Company Business Development Leader
and Legal Leader
J.P. MORGAN SECURITIES INC.
BANC OF AMERICA SECURITIES LLC
ABN AMRO ROTHSCHILD LLC
FIRST UNION SECURITIES, INC.
SCOTIA CAPITAL (USA) INC.
SUNTRUST CAPITAL MARKETS, INC.
U.S. BANCORP PIPER JAFFRAY, INC.
STEPHENS INC.
By: J.P. Morgan Securities Inc.,
Acting on behalf of itself and as the Representative
of the Initial Purchasers
By: /s/ J. Andrew Sanford
----------------------------------------------------------
Name: J. Andrew Sanford
Title: Managing Director
SCHEDULE I
Initial Purchasers
J.P. Morgan Securities Inc.
ABN AMRO Rothschild LLC
Banc of America Securities LLC
First Union Securities, Inc.
Stephens Inc.
U.S. Bancorp Piper Jaffray, Inc.
Scotia Capital (USA) Inc.
SunTrust Capital Markets, Inc.
Exhibit A
ACXIOM CORPORATION
(the "Company")
INSTRUCTION TO DTC PARTICIPANTS
(Date of Mailing)
URGENT - IMMEDIATE ATTENTION REQUESTED
DEADLINE FOR RESPONSE: [DATE]1
The Depository Trust Company ("DTC") has identified you as a DTC Participant through which beneficial
interests in the Company's 3.75% Convertible Notes due 2009 (the "Securities") are held.
The Company is in the process of registering the Securities under the Securities Act of 1933 for resale
by the beneficial owners thereof. In order to have their Securities included in the registration statement,
beneficial owners must complete and return the enclosed Notice of Registration Statement and Selling
Securityholder Questionnaire.
It is important that beneficial owners of the Securities receive a copy of the enclosed materials as
soon as possible as their rights to have the Securities included in the registration statement as of the date and
time such registration statement becomes or is declared effective by the Securities and Exchange Commission
depend upon their returning the Notice and Questionnaire by [DEADLINE FOR RESPONSE]. Please forward a copy of
the enclosed documents to each beneficial owner that holds interests in the Securities through you. If you
require more copies of the enclosed materials or have any questions pertaining to this matter, please contact
Acxiom Corporation, #1 Information Way, P.O. Box 8180, Little Rock, Arkansas 72202-8180, Attention: Treasurer.
- -------------------
1 Not less than 30 calendar days from date of mailing.
ACXIOM CORPORATION
(the "Company")
Notice of Registration Statement
and
Selling Securityholder Questionnaire
Reference is hereby made to the Registration Rights Agreement (the "Registration Rights Agreement")
among the Company and the Initial Purchasers named therein. Pursuant to the Registration Rights Agreement, the
Company has filed with the United States Securities and Exchange Commission (the "Commission") a registration
statement on Form S-3 (the "Shelf Registration Statement") for the registration and resale under Rule 415 of the
Securities Act of 1933, as amended (the "Securities Act"), of the Company's 3.75% Convertible Subordinated Notes
due 2009 (the "Securities"). A copy of the Registration Rights Agreement is attached hereto. All capitalized
terms not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement.
Each beneficial owner of Registrable Securities is entitled to have the Registrable Securities
beneficially owned by it included in the Shelf Registration Statement. In order to have Registrable Securities
included in the Shelf Registration Statement as of its Effective Time, this Notice of Registration Statement and
Selling Securityholder Questionnaire ("Notice and Questionnaire") must be completed, executed and delivered to
the Company's counsel at the address set forth herein for receipt ON OR BEFORE [DEADLINE FOR RESPONSE]. Any
beneficial owner of Registrable Securities who does not complete, execute and return this Notice and
Questionnaire by such date (i) will not be named as a selling securityholder in the Shelf Registration Statement
and (ii) may not use the Prospectus forming a part thereof for resales of Registrable Securities; provided,
however, that if any such beneficial owner delivers this Notice and Questionnaire to the Company after such date,
the Company shall take any action reasonably necessary to cause such beneficial owner to be named as a selling
securityholder in the Shelf Registration Statement and to enable such beneficial owner to use the prospectus
forming a part thereof for resales of Registrable Securities, in each case, as soon as reasonably practicable
after the Effective Time.
Certain legal consequences arise from being named as a selling securityholder in the Shelf Registration
Statement and related Prospectus. Accordingly, holders and beneficial owners of Registrable Securities are
advised to consult their own securities law counsel regarding the consequences of being named or not being named
as a selling securityholder in the Shelf Registration Statement and related Prospectus.
ELECTION
The undersigned holder (the "Selling Securityholder") of Registrable Securities hereby elects to include
in the Shelf Registration Statement the Registrable Securities beneficially owned by it and listed below in
Item (3). The undersigned, by signing and returning this Notice and Questionnaire, agrees to be bound with
respect to such Registrable Securities by the terms and conditions of this Notice and Questionnaire and the
Registration Rights Agreement, including Section 6 of the Registration Rights Agreement, as if the undersigned
Selling Securityholder were an original party thereto.
Upon any sale of Registrable Securities pursuant to the Shelf Registration Statement, the Selling
Securityholder will be required to deliver to the Company and Trustee the Notice of Transfer set forth as Exhibit
B to the Registration Rights Agreement.
The Selling Securityholder hereby provides the following information to the Company and represents and
warrants that such information is accurate and complete:
QUESTIONNAIRE
(1) (a) Full Legal Name of Selling Securityholder:
(b) Full Legal Name of Registered Holder (if not the same as in (a)
above) of Registrable Securities Listed in Item (3) below:
(c) Full Legal Name of DTC Participant (if applicable and if not (b)
the same as above) Through Which Registrable Securities Listed
in Item (3) below are Held:
(2) Address for Notices to Selling Securityholder:
Telephone:___________________________.
Fax:________________________________.
Contact Person:_______________________.
(3) Beneficial Ownership of Securities:
Except as set forth below in this Item (3), the undersigned does not
beneficially own any Securities.
(a) Principal amount of Registrable Securities beneficially owned:
CUSIP No(s). of such Registrable Securities:
(b) Principal amount of Securities other than Registrable
Securities beneficially owned:
CUSIP No(s). of such other Securities:
(c) Principal amount of Registrable Securities which the
undersigned wishes to be included in the Shelf Registration Statement:
CUSIP No(s). of such Registrable Securities to be included in the Shelf Registration Statement:
(4) Relationships with the Company:
Except as set forth below, neither the Selling Securityholder nor any of its
affiliates, officers, directors or principal equity holders (5% or more) has held any position
or office or has had any other material relationship with the Company (or any of its
predecessors or affiliates) during the past three years.
State any exceptions here:
(5) Plan of Distribution:
Except as set forth below, the undersigned Selling Securityholder intends to
distribute the Registrable Securities listed above in Item (3) only as follows (if at all):
Such Registrable Securities may be sold from time to time directly by the undersigned Selling
Securityholder or, alternatively, through underwriters, broker-dealers or agents. Such
Registrable Securities may be sold in one or more transactions at fixed prices, at prevailing
market prices at the time of sale, at varying prices determined at the time of sale, or at
negotiated prices. Such sales may be effected in transactions (which may involve crosses or
block transactions) (i) on any national securities exchange or quotation service on which the
Registered Securities may be listed or quoted at the time of sale, (ii) in the over-the-counter
market, (iii) in transactions otherwise than on such exchanges or services or in the
over-the-counter market, or (iv) through the writing of options. In connection with sales of
the Registrable Securities or otherwise, the Selling Securityholder may enter into hedging
transactions with broker-dealers, which may in turn engage in short sales of the Registrable
Securities in the course of hedging the positions they assume. The Selling Securityholder may
also sell Registrable Securities short and deliver Registrable Securities to close out such
short positions, or loan or pledge Registrable Securities to broker-dealers that in turn may
sell such securities.
State any exceptions here:
(6) Whether you are a corporation or not, the following three questions should be
answered. If you are a corporation these questions should also be answered with respect to
your officers, directors and holders of 5% or more of your equity securities; if you are a
partnership such questions should also be answered with respect to your general partners.
(a) Except as set forth below in this Item (6)(a), neither the undersigned nor any of
its affiliates2 is a member3 of the National Association of Securities Dealers, Inc. (the
"NASD") or a person associated with a member2 of the NASD.
State any exceptions here:
(b) Except as set forth below in this Item (6)(b), the undersigned does not own stock or other
securities of any NASD member not purchased in the open market.
State any exceptions here:
- --------
2 NASD Rule 2720 defines the term "affiliate" to mean a company which controls, is controlled by or is under
common control with a member. The term affiliate is presumed to include the following:
(i) a company will be presumed to control a member if the company beneficially owns 10 percent
or more of the outstanding voting securities of a member which is a corporation, or beneficially owns a
partnership interest in 10 percent or more of the distributable profits or losses of a member which is a
partnership;
(ii) a member will be presumed to control a company if the member and persons associated with
the member beneficially own 10 percent or more of the outstanding voting securities of a company which
is a corporation, or beneficially own a partnership interest in 10 percent or more of the distributable
profits or losses of a company which is a partnership;
(iii) a company will be presumed to be under common control with a member if:
(1) the same natural person or company controls both the member and company by
beneficially owning 10 percent or more of the outstanding voting securities of a member or
company which is a corporation, or by beneficially owning a partnership interest in 10 percent
or more of the distributable profits or losses of a member or company which is a partnership; or
(2) a person having the power to direct or cause the direction of the management or
policies of the member or the company also has the power to direct or cause the direction of
the management or policies of the other entity in question.
3 Article I of the NASD's By-Laws defines the term "member" to mean any broker or dealer admitted to membership
in the NASD and defines the term "person associated with a member" to mean every sole proprietor, partner,
officer, director or branch manager of any member, or any natural person occupying a similar status or performing
similar functions, or any natural person engaged in the investment banking or securities business who is directly
or indirectly controlling or controlled by such member (for example, any employee), whether or not such person is
registered or exempt from registration with the NASD.
(c) Except as set forth below in this Item (6)(c), the undersigned has not made any
outstanding subordinated loans to any NASD member.
State any exceptions here:
By signing below, the Selling Securityholder acknowledges that it understands its obligation to comply,
and agrees that it will comply, with the provisions of the Exchange Act and the rules and regulations thereunder,
particularly Regulation M (which governs manipulation, stabilization and trading activity during a distribution
of securities).
In the event that the Selling Securityholder transfers all or any portion of the Registrable Securities
listed in Item (3) above after the date on which such information is provided to the Company, the Selling
Securityholder agrees to notify the transferee(s) at the time of the transfer of its rights and obligations under
this Notice and Questionnaire and the Registration Rights Agreement.
By signing below, the Selling Securityholder consents to the disclosure of the information contained
herein in its answers to Items (1) through (6) above and the inclusion of such information in the Shelf
Registration Statement and related Prospectus. The Selling Securityholder understands that such information will
be relied upon by the Company and any underwriters in an underwritten offering of such Selling Securityholder's
Registrable Securities listed in Item(3) above, in connection with the preparation of the Shelf Registration
Statement and related Prospectus.
In accordance with the Selling Securityholder's obligation under Sections 3(d) and (f) of the
Registration Rights Agreement to provide such information as may be required by law for inclusion in the Resale
Registration Statement, the Selling Securityholder agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein which may occur subsequent to the date hereof at any time while the
Shelf Registration Statement remains in effect. All notices hereunder and pursuant to the Registration Rights
Agreement shall be made in writing, by hand-delivery, first-class mail, or air courier guaranteeing overnight
delivery as follows:
(i To the Company:
Acxiom Corporation#1 Information WayP.O. Box 8180Little Rock, Arkansas
72202-8180Attention: Treasurer
(ii With a copy to:
Kutak Rock LLP425 West Capitol, Suite 1100Little Rock, Arkansas 72201-3409Attention:
Jeffrey J. Gearhart
Once this Notice and Questionnaire is executed by the Selling Securityholder and received by the
Company's counsel, the terms of this Notice and Questionnaire, and the representations and warranties contained
herein, shall be binding on, shall inure to the benefit of and shall be enforceable by the respective successors,
heirs, personal representatives, and assigns of the Company and the Selling Securityholder (with respect to the
Registrable Securities beneficially owned by such Selling Securityholder and listed in Item (3) above). This
Agreement shall be governed in all respects by the laws of the State of New York.
IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this Notice and Questionnaire
to be executed and delivered either in person or by its duly authorized agent.
Dated: ________________
Selling Securityholder(Print/type full legal name of beneficialowner of Registrable Securities)
By:_____________________________.
Name:
Title:
PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON OR BEFORE [DEADLINE FOR
RESPONSE] TO THE COMPANY'S COUNSEL AT:
Kutak Rock LLP425 West Capitol, Suite 1100Little Rock, Arkansas 72201-3409Attention: Jeffrey J.
Gearhart
(501) 975-3000
Exhibit B
NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT
Attention: Trust Officer
Re: Acxiom Corporation (the "Company") 3.75% Convertible
Subordinated Notes due 2009
Dear Sirs:
Please be advised that _____________________ has transferred $___________ aggregate principal amount of
the above-referenced Notes pursuant to an effective Registration Statement on Form S-3 (File No. 333-____) filed
by the Company.
We hereby certify that the above-named beneficial owner of the Notes is named as a "Selling Holder" in
the Prospectus dated ___________, 200_ or in supplements thereto, and that the aggregate principal amount of the
Notes transferred are the Notes listed in such Prospectus opposite such owner's name.
Dated:
Very truly yours,
(Name)
By:
(Authorized Signature)
CROSS-REFERENCE TARGET LIST
NOTE: Due to the number of targets some target names may not appear in the target pull-down list.
(This list is for the use of the wordprocessor only, is not a part of this document and may be discarded.)
ARTICLE/SECTION TARGET NAME ARTICLE/SECTION TARGET NAME ARTICLE/SECTION TARGET NAME
ARTICLE/SECTION TARGET NAME
2.............................032
2(a)..........................001
2(b)..........................037
3.............................038
3(a)..........................034
3(b)..........................039
3(c)..........................035
4......................reg.proced
4(a)..........................047
4(c)(ii)......................044
4(c)(iii).....................045
4(c)(iv)......................046
4(h)..........................043
4(k)..........................041
4(m)..........................014
4(n)..........................036
4(q)..........................016
4(s)..........................042
5.............................018
5(a)(iii)..............cost.print
5(b)..........................040
6.............................021
6(a)..........................022
6(b)..........................023
6(d)..........................025
6(e)..........................026
8.............................027
9(b)..........................028
9(c)..........................029
9(h)..........................030
9(j)..........................031
[Letterhead of Kutak Rock LLP]
May 15, 2002
Acxiom Corporation
P. O. Box 8180, 1 Information Way
Little Rock, Arkansas 72203
Ladies and Gentlemen:
We are delivering this opinion in connection with the Registration Statement on Form S-3 (the
"Registration Statement") initially filed by Acxiom Corporation (the "Company") on May 15, 2002, with the
Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Act"), with respect to (i)
$175,000,000 aggregate principal amount at maturity of convertible subordinate notes due 2009 issued by the
Company on February 6, 2002 (collectively, the "Notes"), and (ii) shares of the Company's common stock, $0.10 par
value per share (the "Shares"), issuable upon conversion of the Notes. The Notes have been issued pursuant to an
Indenture, dated as of February 6, 2002, between the Company and U.S. Bank National Association, as trustee (the
"Indenture"). The Notes and the Shares are to be offered and sold by certain selling securityholders of the
Company from time to time as set forth in the Registration Statement and any amendments or supplements thereto.
We have examined and are familiar with originals or copies, certified or otherwise identified to our
satisfaction, of such corporate records, certificates of public officials and such other documents relating to
the incorporation of the Company and to the authorization and issuance of the Notes and the Shares, including the
Indenture and Registration Statement, and have made such investigations of law, as we have deemed necessary and
advisable. In such examination, we have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals and the conformity to authentic originals of all documents submitted to us
as copies. In rendering the opinions expressed below, as to questions of fact material to such opinions, we have
relied upon certificates of public officials.
Our opinions expressed below are subject to the qualifications that we express no opinion as to the
applicability of, compliance with, or effect of (i) any bankruptcy, insolvency, reorganization, fraudulent
transfer, fraudulent conveyance, moratorium or other similar law affecting the enforcement of creditors' rights
generally, (ii) general principles of equity (regardless of whether enforcement is considered in a proceeding in
equity or at law), (iii) public policy considerations which may limit the rights of parties to obtain certain
remedies and (iv) any laws except the laws of the State of New York, the corporate laws of the State of Delaware
and the Delaware case law decided thereunder and the federal laws of the United States of America.
Based upon the foregoing and subject to the qualifications and limitations stated herein, we are of the
opinion that:
1. The Notes have been duly authorized and are valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms; and
2. The Shares issuable upon conversion of the Notes have been duly authorized and reserved and,
when delivered upon such conversion in accordance with the terms of the Notes and the Indenture, will be validly
issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement referred to
above and to the reference to our firm under the caption "Legal Matters" in the prospectus included in the
Registration Statement. We do not admit by giving this consent that we are in the category of persons whose
consent is required under Section 7 of the Act.
Very truly yours,
/s/ Kutak Rock LLP
Exhibit 8.1
[Letterhead of Kutak Rock LLP]
May 15, 2002
Acxiom Corporation
P.O. Box 8180, 1 Information Way
Little Rock, Arkansas 72203
Ladies and Gentlemen:
We are delivering this opinion in connection with the Registration Statement on Form S-3 (the "Registration
Statement") initially filed by Acxiom Corporation (the "Company"), on May 15, 2002, with the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the "Act"), with respect to (i) $175,000,000
aggregate principal amount at maturity of convertible subordinate notes due 2009 issued by the Company on
February 6, 2002 (collectively, the "Notes"), and (ii) shares of the Company's common stock, $0.10 par value per
share (the "Shares"), issuable upon conversion of the Notes. The Notes have been issued pursuant to an
Indenture, dated as of February 6, 2002, between the Company and U.S. Bank National Association, as trustee (the
"Indenture"). The Notes and the Shares are to be offered and sold by certain selling securityholders of the
Company from time to time as set forth in the Registration Statement, and any amendments or supplements thereto.
We have examined and are familiar with originals or copies, certified or otherwise identified to our
satisfaction, of such documents, corporate records and other instruments relating to the incorporation of the
Company and to the authorization and issuance of the Notes and the Shares, including the Indenture and
Registration Statement, and have made such investigations of law, as we have deemed necessary and advisable. In
such examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted
to us as originals and the conformity to authentic originals of all documents submitted to us as copies.
This opinion is based on relevant provisions of the Internal Revenue Code of 1986, as amended, the Treasury
Regulations issued thereunder, court decisions, and administrative determinations as currently in effect, all of
which are subject to change, prospectively or retroactively, at any time. This opinion is rendered as of the
date hereof and we undertake no obligation to update or supplement this opinion to reflect any changes in laws
that may occur after the date hereof.
Based upon the foregoing and subject to the qualifications and limitations stated herein, we are of the opinion
that the statements under the caption "Certain United States Federal Income Tax Consequences" in the prospectus
included in the Registration Statement, insofar as such statements constitute a summary of the United States
federal tax laws referred to therein, are accurate and fairly summarize in all material respects the United
States federal tax laws referred to therein.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement referred to above and
to the reference to our firm under the caption "Certain United States Federal Income Tax Consequences" in the
prospectus included in the Registration Statement. We do not admit by giving this consent that we are in the
category of persons whose consent is required under Section 7 of the Act.
The foregoing opinion is limited to the U.S. federal tax matters addressed herein, and no other opinions are
rendered with respect to other federal tax or other matters or to any issues arising under the tax laws of any
other country, or any state or locality.
Very truly yours,
/s/ Kutak Rock LLP
ACXIOM CORPORATION
Calculation of Ratio of Earnings to Fixed Charges
2002 2001 2000 1999 1998
----------- ----------- ---------- ---------- ----------
Net income for the period (31,964) 6,379 90,363 (15,142) 47,155
Add extraordinary item 1,271
Add cumulative effect of acctg change 37,488
---------- -----------
Net income before cumulative effect (30,693) 43,867 90,363 (15,142) 47,155
Add income tax expense (19,833) 27,465 54,214 2,843 28,065
----------- ----------- ---------- ---------- ----------
Pretax income (50,526) 71,332 144,577 (12,299) 75,220
Add fixed charges 58,065 44,957 29,198 25,626 15,157
----------- ----------- ---------- ---------- ----------
Income before tax and fixed chgs 7,539 116,289 173,775 13,327 90,377
=========== =========== ========== ========== ==========
Fixed Charges:
Interest 28,532 26,513 23,532 17,393 10,091
Computed rentals 29,533 18,444 5,666 8,233 5,066
----------- ----------- ---------- ---------- ----------
Total fixed charges 58,065 44,957 29,198 25,626 15,157
=========== =========== ========== ========== ==========
Ratio of earnings to fixed charges 0.130 2.587 5.952 0.520 5.963
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors
of Acxiom Corporation:
As independent public accountants, we hereby consent to the incorporation by reference in this registration
statement of our report dated May 6, 2002 included in Acxiom Corporation's Form 10-K for the year ended March 31,
2002 and to all references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
Little Rock, Arkansas,
May 14, 2002.
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Acxiom Corporation:
We consent to the incorporation by reference of our report on the consolidated statements of operations,
stockholders' equity and cash flows of Acxiom Corporation and subsidiaries for the year ended March 31, 2000,
which is incorporated by reference in the March 31, 2002 annual report on Form 10-K of Acxiom Corporation, and to the
reference to our firm under the heading "Independent Auditors" in the reistration statement.
May 14, 2002
/s/ KPMG LLP
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and appoints Charles D. Morgan and
Rodger S. Kline, or either of them, his or her true and lawful attorney in fact and agent with full powers of
substitution and resubstitution for him or her and in his or her name, place and stead, in any and all
capacities, to sign a registration statement on Form S-3, and any or all amendments or supplements thereto
(including any registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as
amended), to be filed by Acxiom Corporation (the "Company") with respect to the shelf registration of up to
$175,000,000 of convertible debt securities and shares of the Company's common stock, $.10 par value, and rights
to acquire such common stock pursuant to the Rights Agreement dated January 28, 1998, issuable upon conversion of
such convertible debt securities (and such additional amount of all such securities as may be registered pursuant
to Rule 462(b)), and to file same with all exhibits thereto, and other documents in connection therewith, with
the Securities and Exchange Commission, granting unto said attorney in fact and agent full powers and authority
to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as
fully for all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all
that said attorney in fact and agent or his substitute(s), may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand as of this 6th day of February, 2002.
Signed: /s/ Caroline Rook
-----------------------------------
Name: CAROLINE ROOK
Signed: /s/ General Wesley Clark
-----------------------------------
Name: GENERAL WESLEY CLARK
Signed: /s/ Dr. Ann H. Die
-----------------------------------
Name: DR. ANN H. DIE
Signed: /s/ William T. Dillard II
-----------------------------------
Name: WILLIAM T. DILLARD II
Signed: /s/ Harry C. Gambill
-----------------------------------
Name HARRY C. GAMBILL
Signed: /s/ William J. Henderson
-----------------------------------
Name: WILLIAM J. HENDERSON
Signed: /s/ Rodger S. Kline
-----------------------------------
Name: RODGER S. KLINE
Signed: /s/ Thomas F. (Mack) McLarty, III
-----------------------------------
Name: THOMAS F. (MACK) McLARTY, III
Signed: /s/ Charles D. Morgan
-----------------------------------
Name: CHARLES D. MORGAN
Signed: /s/ Stephen M. Patterson
-----------------------------------
Name: STEPHEN M. PATTERSON
Signed: /s/James T. Womble
-----------------------------------
Name: JAMES T. WOMBLE
Exhibit 25.1
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securities and exchange commission
Washington, D.C. 20549
--------------------------
FORM T-1
Statement of Eligibility Under
The Trust Indenture Act of 1939 of a
Corporation Designated to Act as Trustee
Check if an Application to Determine Eligibility of
a Trustee Pursuant to Section 305(b)(2)
-------------------------------------------------------
U.S. BANK NATIONAL ASSOCIATION
(Exact name of Trustee as specified in its charter)
31-0841368
I.R.S. Employer Identification No.
180 East Fifth Street
St. Paul, Minnesota 55101
(Address of principal executive offices) (Zip Code)
Richard H. Prokosch
U.S. Bank National Association
180 East Fifth Street
St. Paul, MN 55101
(651) 244-0721
(Name, address and telephone number of agent for service)
ACXIOM CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 71-0581897
(State or other jurisdiction of incorporation or (I.R.S. Employer Identification No.)
organization)
P.O. Box 8180, 1 Information Way
Little Rock, Arkansas 72203-8180
(Address of Principal Executive Offices) (Zip Code)
3.75% Convertible Subordinated Notes due 2009
(Title of the Indenture Securities)
------------------------------------------------------------------------------
Item 1. GENERAL INFORMATION. Furnish the following information as to the Trustee.
a) Name and address of each examining or supervising authority to which it is subject.
Comptroller of the Currency
Washington, D.C.
b) Whether it is authorized to exercise corporate trust powers.
Yes
Item 2. AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the Trustee, describe each such
affiliation.
None
Items 3-15 Items 3-15 are not applicable because to the best of the Trustee's knowledge, the obligor is
not in default under any Indenture for which the Trustee acts as Trustee.
Item 16. LIST OF EXHIBITS: List below all exhibits filed as a part of this statement of eligibility and
qualification.
1. A copy of the Articles of Association of the Trustee.*
2. A copy of the certificate of authority of the Trustee to commence business.*
3. A copy of the certificate of authority of the Trustee to exercise corporate trust powers.*
4. A copy of the existing bylaws of the Trustee.*
5. A copy of each Indenture referred to in Item 4. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Trust Indenture Act of 1939,
attached as Exhibit 6.
7. Report of Condition of the Trustee as of December 31, 2001, published pursuant to law or the
requirements of its supervising or examining authority, attached as Exhibit 7.
* Incorporated by reference to Registration Number 333-67188.
NOTE
The answers to this statement insofar as such answers relate to what persons have been underwriters for
any securities of the obligors within three years prior to the date of filing this statement, or what persons are
owners of 10% or more of the voting securities of the obligors, or affiliates, are based upon information
furnished to the Trustee by the obligors. While the Trustee has no reason to doubt the accuracy of any such
information, it cannot accept any responsibility therefor.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the Trustee, U.S. BANK
NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States
of America, has duly caused this statement of eligibility and qualification to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of St. Paul, State of Minnesota on the 10th day of May,
2002.
U.S. BANK NATIONAL ASSOCIATION
By: /s/ Richard H. Prokosch
-----------------------------------------
Richard H. Prokosch
Vice President
By: /s/ Lori-Anne Rosenberg
------------------------------------
Lori-Anne Rosenberg
Assistant Vice President
Exhibit 6
CONSENT
In accordance with Section 321(b) of the Trust Indenture Act of 1939, the undersigned, U.S. BANK
NATIONAL ASSOCIATION hereby consents that reports of examination of the undersigned by Federal, State,
Territorial or District authorities may be furnished by such authorities to the Securities and Exchange
Commission upon its request therefor.
Dated: May 10, 2002
U.S. BANK NATIONAL ASSOCIATION
By: /s/ Richard H. Prokosch
-------------------------------------------------------
Richard H. Prokosch
Vice President
By: /s/ Lori-Anne Rosenberg
----------------------------------
Lori-Anne Rosenberg
Assistant Vice President
Exhibit 7
U.S. Bank National Association
Statement of Financial Condition
As of 12/31/2001
($000's)
Assets
Cash and Due From Depository Institutions $9,775,116
Federal Reserve Stock 0
Securities 26,316,516
Federal Funds 1,261,731
Loans & Lease Financing Receivables 109,012,892
Fixed Assets 1,414,464
Intangible Assets 8,158,687
Other Assets 6,637,699
-----------
Total Assets $162,577,105
Liabilities
Deposits $104,077,584
Fed Funds 4,365,180
Treasury Demand Notes 0
Trading Liabilities 313,719
Other Borrowed Money 25,030,765
Acceptances 201,492
Subordinated Notes and Debentures 5,348,437
Other Liabilities 3,894,231
-----------
Total Liabilities $143,231,408
Equity
Minority Interest in Subsidiaries $981,870
Common and Preferred Stock 18,200
Surplus 12,068,893
Undivided Profits 6,276,734
----------
Total Equity Capital $19,345,697
Total Liabilities and Equity Capital $162,577,105
To the best of the undersigned's determination, as of the date hereof, the above financial information is true
and correct.
U.S. Bank National Association
By: /s/ Richard H. Prokosch
----------------------------------------
Richard H. Prokosch
Vice President
Date: May 10, 2002