UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 8-K

 

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of report (Date of earliest event reported): May 16, 2007

 

ACXIOM CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

 

DELAWARE

(State or Other Jurisdiction of Incorporation)

 

 

 

501-342-1000

(Registrant’s Telephone Number, Including Area Code)

 

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

 

 

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

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Item 1.01      Entry into a Material Definitive Agreement.

The information reported pursuant to this item is incorporated by reference within Item 5.02(c) below.

On May 16, 2007, Acxiom Corporation (the “Company”) issued a press release announcing the results of its financial performance for the fourth quarter of fiscal year 2007. The Company will hold a conference call at 6:45 p.m. CDT today to discuss this information further. Interested parties are invited to listen to the call, which will be broadcast via the Internet at www.acxiom.com. The press release is furnished herewith as Exhibit 99.1 and incorporated by reference herein.

 

The Company’s press release and other communications from time to time include certain non-GAAP financial measures. A “non-GAAP financial measure” is defined as a numerical measure of a company’s financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP in the Company’s financial statements.

The attached press release utilizes a non-GAAP measure of free cash flow available to equity. Free cash flow available to equity is defined as operating cash flow less cash used by investing activities (excluding the impact of cash paid in acquisitions) less required payments of debt (total debt payments excluding payments on the line of credit and prepayments of debt). The Company’s management believes that this measure of free cash flow available to equity is superior to the previously reported free cash flow since it represents the amount of money available for the Company’s discretionary spending after funding all required obligations including scheduled debt payments, and it therefore provides a useful measure of liquidity for assessing the amount of cash available for general corporate and strategic purposes.

A reconciliation of free cash flow to equity to operating cash flow, the nearest comparable GAAP measure, is included as an attachment to the press release.

The press release also includes measures of earnings before income taxes, income taxes, net earnings, and diluted earnings per share for the quarter and fiscal year, all as adjusted for unusual charges during the fourth quarter. These charges are excluded because they do not represent continuing operations of the Company, and management believes it is appropriate to exclude these changes for comparison purposes. A reconciliation of these measures to the comparable GAAP measures is included as an attachment to the press release.

EBITDA is defined as earnings before interest, taxes, depreciation and amortization. EBITDA is not mentioned in the attached press release, but may be discussed during the conference call. EBITDA can be calculated directly from the financial statements by adding pre-tax income plus interest expense from the statement of operations plus depreciation and amortization from the cash flow statement. Management believes EBITDA is a useful measure of liquidity which may be used by investors to assess the Company’s ongoing operations and liquidity.

 

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The non-GAAP financial measures used by the Company in the attached press release may not be comparable to similarly titled measures used by other companies and should not be considered in isolation or as a substitute for measures of performance or liquidity prepared in accordance with GAAP.

 

The Company has hired Christopher W. Wolf, age 45, to become its chief financial officer. Mr. Wolf will begin his employment with the Company in late May or early June, 2007, and will be transitioning into the CFO role over the next few months. As CFO, he will be responsible for all aspects of the Company’s financial management and will be a member of the Company Leadership Team. A copy of Mr. Wolf’s offer letter is furnished herewith as Exhibit 99.2 and incorporated by reference herein. The Company has agreed to enter into an Executive Security Agreement with Mr. Wolf effective as of his date of hire, in the form furnished herewith as Exhibit 99.3 and incorporated by reference herein.

 

Rodger S. Kline, a director of the Company and its Chief Administrative Leader, has served as acting chief financial officer for the past 3 months and will continue to serve as such until Mr. Wolf has fully transitioned into the CFO role.

Mr. Wolf has over 19 years experience as a financial executive and consultant to companies in the marketing, retail, and technology sectors. He has most recently served as an independent consultant, providing consultation on financial reporting, Sarbanes-Oxley compliance, corporate governance, capital structure, mergers and acquisitions, and tax planning to a variety of public and private entities. From 2005 - 2006, Mr. Wolf served as CFO of NiuTech LLC, an internet marketing services company. In this role, Mr. Wolf was responsible for the accounting, financial planning and analysis, treasury, and risk management activities of the company. From 1996 - 2004, Mr. Wolf was employed in various finance and tax positions with Catalina Marketing Corporation, culminating in his service as chief financial officer from 2002 - 2004. He also served as executive vice president from 2003 - 2004; senior vice president from 2002 - 2003; vice president –finance and treasurer from 2000 - 2002; executive director of tax, treasury and international finance from 1998 - 2000; senior director of tax and international finance from 1997 - 1998; and senior director of tax from 1996 - 1997. As chief financial officer, Mr. Wolf had responsibility for strategic planning, development and leadership of the finance function of Catalina, a leader in behavior-based, targeted-marketing services and programs offered through a variety of distribution channels with revenues of over $450 million. These marketing services include discount coupons, loyalty marketing programs, newsletters, sampling, advertising, in-store instant-win games and other incentives that are delivered directly to shoppers by various methods. Mr. Wolf also had oversight responsibility in his role as chief financial officer for corporate governance, legal affairs, intellectual property, SEC reporting, investor relations, financial analysis and planning, capital budgeting, operating budgeting, forecasting and cash management.

Prior to joining Catalina in 1996, Mr. Wolf served for a 10-year period as a tax manager and consultant for Arthur Andersen & Co. In addition to assisting clients in tax planning and compliance matters and representing clients before the Internal Revenue Service and state tax authorities with respect to income, sales, use and other taxes, Mr. Wolf consulted on tax issues with respect to mergers and acquisitions, initial public offerings, spin-offs, and other taxable and tax-free corporate finance transactions. Mr. Wolf is a certified public accountant. He holds a

 

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B.S. degree in accounting from Florida State University and a Master of Accounting degree from the University of North Carolina.

 

 

 

 

The following exhibits are furnished herewith:

 

 

 

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SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

ACXIOM CORPORATION

 

By:    /s/ Jerry C. Jones 

 

 

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EXHIBIT INDEX

 

 

 

 

Exhibit 99.1

 

For more information, contact:

Katharine Raymond

Investor Relations Coordinator

Acxiom Corporation

(501) 342-1321

 

Suellen Vann

Public Relations Leader

Acxiom Corporation

(501) 342-0263

EACXM

 

Acxiom^® Announces Fiscal 2007 Results

Company also moves to new three-division alignment

 

LITTLE ROCK, Ark. – May 16, 2007 – Acxiom^® Corporation (Nasdaq: ACXM) today reported full-year and fourth-quarter financial results for fiscal 2007 ended March 31, 2007, and also announced a new organizational alignment designed to increase focus on the company’s three core areas of business. The reported results, excluding unusual charges, met the Company’s expectations and consensus analysts’ estimates of $.20 earnings per share for the quarter.

 

Full 2007 fiscal-year results include revenue of $1.4 billion, income from operations of $158.8 million and diluted earnings per share of $.84. These results include the impact in the fourth quarter of unusual charges that reduced diluted EPS for the fourth quarter and full fiscal year by $.12.

 

Fourth-quarter results include revenue of $357.3 million, income from operations of $29.3 million, diluted earnings per share of $.08, operating cash flow of $76.5 million and free cash flow available to equity of $15.4 million.

 

Acxiom will hold a conference call at 6:45 p.m. CDT today to discuss this information further. Interested parties are invited to listen to the call, which will be broadcast via the Internet at www.acxiom.com.

 

Acxiom’s new organizational structure reflects the unique characteristics within each area of the business and will facilitate the execution of operational strategies designed to maximize financial performance in each division. The re-segmentation took effect April 1, 2007, the first day of the company’s fiscal year 2008.

 

“This change is all about bringing focus and dedicated management to each key area of our business,” Acxiom chairman and chief executive Charles D. Morgan said. “We believe this structure more closely aligns with our overall mission and therefore will lead to greater returns for our shareholders.”

 

Acxiom is composed of, and will report financial results by, three divisions under a single company umbrella. Those divisions, chief executives, and business characteristics include:

 

 

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global firms. This division is responsible for Acxiom’s marketing database solutions, customer data integration (CDI) offerings, e-mail and internet search marketing services, consulting and professional services,  and the Business Information Grid (BIG) non-hosted solutions that will be offered in fiscal 2008, utilizing a client-intimate engagement model characterized by long-term client relationships.

 

“At this point in Acxiom’s evolution, re-segmenting our company into three autonomous but very tightly connected divisions creates a business that can be more effectively and efficiently managed,” Morgan said. “We’ll be able to make better-targeted investment and operational decisions in each area, and the added transparency into our financial performance will provide more clarity – internally and externally.”

 

Acxiom also announced that it has hired Chris Wolf to become the company’s Chief Financial Officer. Wolf will begin working at Acxiom in a few weeks and will transition into the CFO role over the next few months. Wolf most recently has served as a senior advisor at Boulder Specialty Brands and previously was executive vice president and CFO at Catalina Marketing Corporation.

 

Acxiom’s fiscal 2007 highlights include:

 

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Acxiom’s fourth-quarter highlights include:

Fiscal 2007 Recognition

 

In fiscal 2007, Acxiom:

 

 

Outlook

 

Acxiom’s Board of Directors has approved a business plan for fiscal 2008 of $1.02 in earnings per share. The Company continues to focus on its initiatives to improve performance and is in the process of restructuring into the three new divisions previously explained.

 

About Acxiom

 

Acxiom Corporation (Nasdaq: ACXM) 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, database services, IT outsourcing, consulting and analytics, and privacy leadership. Founded in 1969, Acxiom is headquartered in Little Rock, Arkansas, with locations throughout the United States and Europe, and in Australia, China and Canada.

 

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For more information, visit www.acxiom.com.

This release and today’s conference call contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially. Such statements may include but are not necessarily limited to the following: that we expect that our emphasis on revenue growth will lead to increased rates of revenue growth, that we expect that continued focus on expense controls will lead to continued improvement in operating margins, that the projected revenue, operating margin, return on assets and return on invested capital, operating cash flow and free cash flow, borrowings, dividends and other metrics will be within the estimated ranges; that the estimations of revenue, earnings, cash flow, growth rates, restructuring charges and expense reductions will be within the estimated ranges; and that the business pipeline and our anticipated cost structure will allow us to continue to meet or exceed revenue, cash flow and other projections. The following are important factors, among others, that could cause actual results to differ materially from these forward-looking statements: The possibility that certain contracts may not be closed, or may not be closed within the anticipated time frames; the possibility that clients may attempt to reduce the amount of business they do with the Company; the possibility that in the event that a change of control of the Company was sought that certain of the clients of the Company would invoke certain provisions in their contracts resulting in a decline in the revenue and profit of the Company; the possibility that certain contracts may not generate the anticipated revenue or profitability; the possibility that negative changes in economic or other conditions might lead to a reduction in demand for our products and services; the possibility of an economic slowdown or that economic conditions in general will not be as expected; the possibility that the historical seasonality of our business may change; the possibility that significant customers may experience extreme, severe economic difficulty; the possibility that the integration of acquired businesses may not be as successful as planned; the possibility that the fair value of certain of our assets may not be equal to the carrying value of those assets now or in future time periods; the possibility that sales cycles may lengthen; the possibility that we may not be able to attract and retain qualified technical and leadership associates, or that we may lose key associates to other organizations; the possibility that we won’t be able to properly motivate our sales force or other associates; the possibility that we won’t be able to achieve cost reductions and avoid unanticipated costs; the possibility that we won’t be able to continue to receive credit upon satisfactory terms and conditions; the possibility that competent, competitive products, technologies or services will be introduced into the marketplace by other companies; the possibility that we may be subjected to pricing pressure due to market conditions and/or competitive products and services; the possibility that there will be changes in consumer or business information industries and markets that negatively impact the Company; the possibility that changes in accounting pronouncements may occur and may impact these projections; the possibility that we won’t be able to protect proprietary information and technology or to obtain necessary licenses on commercially reasonable terms; the possibility that we may encounter difficulties when entering new markets or industries; the possibility that there will be 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 possibility that we may enter into short-term contracts which would affect the predictability of our revenues; the possibility that the amount of ad hoc, volume-based and project work will not be as expected; the possibility that we may experience a loss of data center capacity or interruption of telecommunication links or power sources; the possibility that we may experience failures or breaches of our network and data security systems, leading to potential adverse publicity, negative customer reaction, or liability to third parties; the possibility that postal rates may increase, thereby leading to reduced volumes of business; the possibility that our clients may cancel or modify their agreements with us; the possibility that we will not successfully complete customer

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contract requirements on time or meet the service levels specified in the contracts, which may result in contract penalties or lost revenue; the possibility that we experience processing errors which result in credits to customers, re-performance of services or payment of damages to customers; the possibility that the services of the United States Postal Service, their global counterparts and other delivery systems may be disrupted; and the possibility that we may be affected by other competitive factors.

With respect to the board-approved business plan, all of the above factors apply, along with the following which were assumptions made in creating the board-approved business plan: that the U.S. and global economies will continue to improve at a moderate pace; that global growth will continue to be strong and that globalization trends will continue to grow at an increasing pace; that Acxiom’s computer, communications and other equipment expenses will continue to fall as a percentage of revenue; that the Customer Information Infrastructure (CII) grid-based environment will continue to be implemented successfully over the next 3-4 years and that the new CII infrastructure will continue to provide increasing operational efficiencies; that the acquisitions of companies operating primarily outside of the United States will be successfully integrated and that significant efficiencies will be realized from this integration; relating to operating cash flow and free cash flow, that sufficient operating and capital lease arrangements will continue to be available to the Company to provide for the financing of most of its computer equipment and that software suppliers will continue to provide financing arrangements for most of the software purchases; relating to revolving credit line balance, that free cash flow will meet expectations and that the Company will use free cash flow to pay down bank debt, buy back stock and fund dividends; relating to annual dividends, that the board of directors will continue to approve quarterly dividends and will vote to increase dividends over time; relating to diluted shares, that the Company will meet its cash flow expectations and that potential dilution created through the issuance of equity instruments will be mitigated by continued stock repurchases in accordance with the Company’s stock repurchase program. With respect to the provision of products or services outside our primary base of operations in the United States, all of the above factors apply, along with the difficulty of doing business in numerous sovereign jurisdictions due to differences in scale, competition, culture, laws and regulations.

Other factors are detailed from time to time in our periodic reports and registration statements filed with the United States Securities and Exchange Commission. We believe that we have the product and technology offerings, facilities, associates and competitive and financial resources for continued business success, but future revenues, costs, margins and profits are all influenced by a number of factors, including those discussed above, all of which are inherently difficult to forecast.

We undertake no obligation to update the information contained in this press release or any other forward-looking statement.

Acxiom, InfoBase and Personicx are registered trademarks of Acxiom Corporation.

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Exhibit 99.2

 

 

May 9, 2007

 

Christopher (Chris) Wolf

536 18th. Avenue N.E.

St. Petersburg, Fl. 33704

 

Dear Chris:

 

I am very happy to confirm Acxiom’s offer of a full-time position in the role of Chief Financial Officer (CFO) reporting directly to me. Your primary place of employment will be Dallas, TX; however, you will be expected to travel to Little Rock and other Acxiom and/or client locations from time to time. It is currently anticipated that your starting date of employment will be May 23, 2007; however, if you see that this date needs to change, we can be flexible in that regard.

 

The specific components of your compensation package are outlined below:

 

 

 

The following represents a breakdown of your compensation package:

 

 

 

 

 

 

 

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Chris Wolf

Page 2 of 3

May 9, 2007

 

 

 

 

 

 

 

Chris, I am really looking forward to your being a part of the Acxiom team. Please feel free to contact me at 501-342-1302 if you have any questions.

 

Sincerely,

 

 

Charles D. Morgan

Acxiom Corporation

 

Leadership Relocation Guidelines

 

Tim McKenna (CWY0303-4)

 

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Chris Wolf

Page 3 of 3

May 9, 2007

 

NOTES: We assume that your employment with Acxiom would not cause you to violate any contract or agreement that you have with any current or prior employer. If these assumptions are incorrect, please notify Acxiom immediately. Your employment with Acxiom is not intended to and should not induce or require you to rely on, use, or disclose any confidential information or trade secrets of any current or prior employer. If you do not believe this to be accurate, you must also notify Acxiom immediately.

 

This letter is not intended to be and should not be considered an employment agreement or a guarantee of future compensation of any amount.

 

 

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Attachment A

Relocation at a Glance

Chris Wolf

May 7, 2007

 

 

Acxiom Corporation is willing to pay the relocation benefits described in this guideline because it is our hope that the new position we are offering you will be beneficial to you and to us. If, however, you terminate your employment with Acxiom Corporation within twenty-four (24) months following your employment at the new location, you agree to reimburse Acxiom Corporation for the amount of any and all relocation benefits provided to you under the terms of this guideline.

 

Pre-Move

 

 

 

Move

 

 

 

 

 

 

 

 

 

Post-Move

 

 

 

 

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Chris Wolf

Page 2 of 2

May 7, 2007

 

 

 

 

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Attachment B

 

AGREEMENT TO PAY RELOCATION EXPENSES

 

This Agreement ("Agreement") is entered into this 8^th day of May 2007, by and between Acxiom Corporation ("Acxiom"), 301 E. Dave Ward Drive, Conway, Arkansas 72032 and Chris Wolf, 536 – 18th Avenue NE, St. Petersburg, Florida, 33704

 

 

 

 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day first set forth above.

 

 

 

 

Exhibit 99.3

EXECUTIVE SECURITY AGREEMENT

 

This Executive Security Agreement is made and entered into effective as of the ___ day of ______, 2007 (“Effective Date”), by and between Christopher W. Wolf (“Executive”), an individual, and Acxiom Corporation, a Delaware corporation having its principal place of business at 1 Information Way, Little Rock, Arkansas 72202, and its successors and assigns (“Company”).

 

WHEREAS, Executive is a senior leader or key executive of the Company and has made and is expected to continue to make significant contributions to the short and long term success of the Company;

 

WHEREAS, the Company considers the establishment and maintenance of a sound and vital management to be essential to protecting and enhancing the best interests of the Company and its shareholders;

 

WHEREAS, the Company recognizes that, as is the case for most publicly held companies, the possibility of a Change of Control (as defined herein) exists, and that possibility, together with the uncertainty and questions that it may raise among management, may result in the departure or distraction of the Company’s leadership to the detriment of the Company and its shareholders;

 

WHEREAS, the Board of Directors of the Company has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of certain members of the Company's leadership to their assigned duties without distraction in the face of potentially disturbing circumstances arising from the possibility of a Change of Control of the Company;

 

WHEREAS, the Company desires to assure itself and its stockholders of both the present and future continuity of its management and desires to establish certain minimum severance benefits for its officers and other key executives, including Executive, applicable in the event of a Change in Control; and

 

WHEREAS, the Company desires to provide additional inducement for Executive to continue to remain in the employ of the Company.

 

NOW, THEREFORE, the Company and Executive agree as follows:

 

1.        Defined Terms. For purposes of this Agreement, the following terms shall have the meanings indicated below:

 

(a)          “Cause.” Termination by the Company of Executive’s employment for "Cause" means termination upon (i) Executive’s willful and continued failure to substantially perform his or her duties with the Company (other than any failure resulting from Executive’s incapacity due to physical or mental illness), after a written demand for

 

 

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substantial performance is delivered to Executive by the Company Leader or other person filling the role of Chief Executive Officer of the Company (or if Executive is the Company Leader, then by the Chairman of the Compensation Committee of the Board of Directors) that specifically identifies the manner in which the Company believes that Executive has not substantially performed his or her duties; or (ii) Executive’s willfully engaging in misconduct that is materially injurious to the Company, monetarily or otherwise. For purposes of this Section 1(a), no act, or failure to act, on Executive’s part will be considered "willful" unless done, or omitted to be done, by Executive not in good faith and without reasonable belief that Executive’s action or omission was in the best interest of the Company. Notwithstanding the above, Executive will not be deemed to have been terminated for Cause unless and until Executive has been given a copy of a Notice of Termination from the Company Leader or other person filling the role of Chief Executive Officer of the Company (or if Executive is the Company Leader, then by the Chairman of the Compensation Committee of the Board of Directors), after reasonable notice to Executive and an opportunity for Executive, together with Executive’s counsel, to be heard before (x) the Company Leader or other person filling the role of Chief Executive Officer, or (y) if Executive is an elected officer of the Company, the Board of Directors of the Company, finding that in the good faith opinion of the Company Leader or other person filling the role of Chief Executive Officer, or, in the case of an elected officer, finding that in the good faith opinion of two-thirds of the Board of Directors, Executive committed the conduct set forth above in clauses (i) or (ii) of this Section 1(a), and specifying the particulars of that finding in detail.

 

(b)          “Change of Control.” A “Change of Control” shall mean the occurrence of any of the following events during the period in which this Agreement remains in effect:

 

(i)           the acquisition by any person, entity or “group,” within the meaning of Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than the Company, any of its subsidiaries or other entities controlled by the Company, or any employee benefit plan maintained by the Company or by any of its subsidiaries or other entities controlled by the Company, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of (A) 20% or more, but less than 50%, of the total voting power represented by the then outstanding Voting Securities (as defined below), unless prior thereto, the Incumbent Board (as defined below) approves the transaction that results in the person becoming the beneficial owner of 20% or more, but less than 50%, of the outstanding Voting Securities of the Company, or (B) 50% or more of the total voting power represented by the then outstanding Voting Securities, regardless of whether the transaction or event by which the foregoing 50% level is exceeded is approved by the Incumbent Board; or

 

(ii)          the Company files a report with the Securities and Exchange Commission disclosing in response to a Current Report on Form 8-K or Schedule 14A (or successor form, report or schedule) that a change in control (as defined by such forms, reports or schedules) has occurred; or

 

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(iii)        individuals who, as of the date hereof, constitute the Board of Directors of the Company (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors of the Company, provided  (a) that any person becoming a member of the Board of Directors of the Company subsequent to the date hereof whose election (or nomination for election by the Company’s stockholders) was approved by a vote of at least a majority of the members then comprising the Incumbent Board shall be, for purposes of this Agreement, considered as though such person were a member of the Incumbent Board, or (b) that any member of the Board of Directors of the Company who is nominated in any definitive proxy statement furnished to stockholders of the Company in connection with the solicitation of proxies on behalf of the Board of Directors of the Company shall be, for purposes of this Agreement, considered as a member of the Incumbent Board; provided however, that any individual who has been elected a member of the Company’s Board of Directors in opposition to a solicitation of proxies by or on behalf of the members of the Incumbent Board, or a committee thereof, shall not be deemed a member of the Incumbent Board; or

 

(iv)         the Company is merged, combined, consolidated or reorganized with or into another corporation or other legal person (“Acquiring Person”), or the Company sells or otherwise transfers all or substantially all of its assets to an Acquiring Person, and, as a result of such merger, combination, consolidation or reorganization or sale or transfer of assets, less than a majority of the combined voting power of the then outstanding securities of the Acquiring Person are held in the aggregate by holders of Voting Securities (as that term is defined) immediately prior to such transaction; or

 

 

(c)          “Disability.” “Disability” shall mean that at the time Executive’s employment is terminated he or she shall have been unable to perform the duties of his or her position for a period of at least six (6) consecutive months as the result of total and permanent incapability due to physical or mental illness or injury.

 

(d)          “Good Reason.” Termination for "Good Reason" means termination by Executive of his or her employment based on:

 

(i)           The assignment to Executive of duties inconsistent with his or her position and status with the Company as they existed immediately prior to a Change of Control, or a substantial change in title, offices or authority, or in the nature of Executive’s responsibilities, as they existed immediately prior to a Change of Control, except in connection with the termination of Executive’s employment for Cause or Disability or as a result of Executive’s death or by Executive other than for Good Reason; or

 

 

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(ii)          A reduction by the Company in Executive’s base salary as in effect immediately prior to the Change of Control; or

 

(iii)        The Company's requiring Executive to be based more than forty-five (45) miles from the location where he or she is based immediately prior to a Change of Control, except for required travel on the Company's business to an extent substantially consistent with Executive’s business travel obligations prior to the Change in Control, or if Executive consents to that relocation, the failure by the Company to pay (or reimburse Executive for) all reasonable moving expenses incurred by Executive or to indemnify Executive against any loss realized in the sale of Executive’s principal residence in connection with that relocation; or

 

(iv)         The failure by the Company to continue the Company's incentive compensation plan(s), as they may be modified from time to time, substantially in the form in effect immediately prior to a Change of Control (the "Plans"), or a failure by the Company to continue Executive as a participant in the Plans on at least the same basis of his or her participation immediately prior to a Change of Control or to pay Executive the amounts that he or she would be entitled to receive in accordance with the Plans; or

 

(v)          The failure by the Company to continue in effect any retirement or compensation plan, performance share plan, stock option plan, life insurance plan, health and accident plan, disability plan or another benefit plan in which Executive is participating immediately prior to a Change of Control (or provide plans providing Executive with substantially similar benefits), the taking of any action by the Company that would adversely affect Executive’s participation or materially reduce his or her benefits under any of those plans or deprive him or her of any material fringe benefit enjoyed immediately prior to a Change of Control, or the failure by the Company to provide Executive with the number of paid days off to which Executive is then entitled in accordance with the Company's normal leave practices in effect immediately prior to a Change of Control; or

 

(vi)         The failure by the Company to obtain the assumption of the Company’s obligations under this Agreement by any successor, as contemplated in Section 7.

 

(e)         “Voting Securities.” “Voting Securities” shall mean all outstanding classes of voting capital stock of the Company entitled to vote generally in the election of directors of the Company.

 

2.            Term. Subject to the provisions of Sections 3 and 4 hereof, this Agreement shall expire upon Executive’s seventieth (70th) birthday.

 

3.            Payments following Change of Control and Termination of Employment. In the event a Change of Control of the Company occurs during the term of this

 

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Agreement, and if at any time Executive’s employment with the Company is terminated by the Company or the Acquiring Person, or if Executive resigns for Good Reason within three years after such Change of Control, the Company shall, within ten calendar days of the date of any such termination of employment (“Termination Date”), make a single, lump sum cash severance payment to Executive equal to: (i) if the Termination Date occurs within one year of the Change of Control, 2.99 times Executive’s annualized includible compensation for the base period consisting of the most recent five taxable years ending before the date on which the Change of Control occurs; (ii) if the Termination Date occurs between one and two years of the Change of Control, 2 times Executive’s annualized includible compensation for the base period consisting of the most recent five taxable years ending before the date on which the Change of Control occurs; or (iii) if the Termination Date occurs between two and three years of the Change of Control, 1 times Executive’s annualized includible compensation for the base period consisting of the most recent five taxable years ending before the date on which the Change of Control occurs. For purposes of this Section 3, the phrases “annualized includible compensation” and “base period,” and any terms relating to such phrases shall have the meanings set forth in Section 280G of the Internal Revenue Code of 1986 (the “Code”), as amended, or any subsequent provision, and the Treasury regulations promulgated thereunder. In the event Executive has been employed with the Company for less than five taxable years prior to a Change of Control, the base period for calculating the payments called for in this Section 3 shall be determined in accordance with Section 280G of the Code and the Treasury regulations promulgated thereunder. Notwithstanding the foregoing, the Company shall have no obligation to make any payment to Executive under this Agreement if Executive’s employment is terminated for Cause, due to Executive’s death or Disability, or as a result of Executive’s retirement or resignation other than for Good Reason.

 

4.            Termination of Agreement. This Agreement and/or the employment of Executive hereunder may be unilaterally terminated by the Company, without incurring any obligation under Section 3 above, at any time for any reason whatsoever prior to the occurrence or pendency of a Change of Control. Notwithstanding the foregoing, any termination of this Agreement and/or the employment of Executive by the Company, and any resignation by Executive following the commencement of discussions with a third person that ultimately results in a Change of Control shall be deemed to be a termination of this Agreement and/or Executive’s employment after a Change of Control for purposes of this Agreement, and any attempt by the Company to terminate this Agreement shall be rendered null and void.

 

5.            Additional Payments by the Company. In the event that all or any portion of any payment or benefit paid to Executive under the terms of Section 3 or otherwise paid or payable or distributed to Executive in connection with, or arising out of, his or her employment with the Company or a Change of Control or effective control of the Company (collectively the “Payments”) would be subject to the excise tax imposed by Section 4999 of the Code, or any successor provision, by reason of being considered an “excess parachute payment” as defined in Section 280G of the Code, or any successor provision, or to any similar tax imposed by state or local law, or any interest or penalties

 

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with respect to such tax (such tax or taxes, together with any such interest and penalties, being collectively referred to as the “Excise Tax”), then Executive shall be entitled to receive from the Company an additional payment or payments (collectively, the “Gross-Up Payment”), such that the net amount retained by Executive, after deduction and/or payment of any Excise Tax on the Payments and the Gross-Up Payment and any federal, state and local income tax on the Gross-Up Payment, including penalties and interest, shall be equal to the Payments. The intent of the parties is that Executive shall receive no more or no less than what Executive would have received had the Payments not been subject to the Excise Tax.

 

All determinations required to be made under this Section 5, including whether an Excise Tax is payable by Executive and the amount of such Excise Tax, and whether a Gross-Up Payment is required to be paid by the Company to Executive and the amount of such Gross-Up Payment, if any, shall be made by the accounting firm that is the Company’s independent auditor as of the date immediately prior to the Change of Control, or such other nationally recognized accounting firm mutually agreeable to the Company and Executive (the “Accounting Firm”). The Accounting Firm shall submit its determination and detailed supporting calculations to both the Company and Executive within thirty (30) calendar days after the Termination Date of Executive’s service with the Company. If the Accounting Firm determines that any Excise Tax is payable by Executive, the Company shall pay the required Gross-Up Payment to Executive within five (5) business days after receipt of such determination and calculations with respect to any Payment to Executive. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall, at the same time as it makes such determination, furnish the Company and Executive an opinion that Executive has substantial authority not to report any Excise Tax on his or her federal, state or local income or other tax return. As a result of the uncertainty in the application of Section 4999 of the Code (or any successor provision thereto) and the possibility of similar uncertainty regarding applicable state or local tax laws at the time of any determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should in fact have been made (an “Underpayment”), consistent with the calculations required to be made hereunder. In the event that Executive thereafter is ever required to make a payment of any Excise Tax, Executive shall direct the Accounting Firm to determine the amount of the Underpayment that has occurred and to submit its determination and detailed supporting calculations to both the Company and Executive as promptly as possible. Any such Underpayment shall be promptly paid by the Company to, or for the benefit of, Executive within five (5) business days after receipt of such determination and calculations. The Company shall be solely responsible for paying any fees charged by the Accounting Firm for its services in connection herewith.

 

6.            Costs of Enforcement. If the Company breaches this Agreement, or if within three (3) years following a Change of Control, (a) Executive’s employment is terminated by the Company other than for Cause or Disability, or (b) Executive terminates his or her employment for Good Reason, the Company will reimburse Executive for all legal, accounting and other fees and expenses reasonably incurred by him or her as a result of that termination (including all those fees and expenses, if any,

 

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incurred in contesting or disputing the termination or in seeking to obtain or enforce any right or benefit provided by this Agreement).

 

 

(a)          The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets of the Company, by agreement in form and substance satisfactory to Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent the Company would be required to perform if no such succession had taken place. Failure of the Company to obtain that agreement prior to the effectiveness of any succession will be a breach of this Agreement and will entitle Executive to compensation from the Company in the same amount and on the same terms as he or she would be entitled under this Agreement if he or she terminated employment for Good Reason within three (3) years following a Change of Control, except that for purposes of implementing the foregoing, the date on which that succession becomes effective will be deemed the Termination Date. This Agreement will be binding upon and inure to the benefit of the Company and any successor acquiring, directly or indirectly, all or substantially all of the business assets of the Company whether by purchase, merger, consolidation, reorganization or otherwise, but this Agreement will not otherwise be assignable, transferable or delegable by the Company.

 

(b)          This Agreement will inure to the benefit of and be enforceable by Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees and legatees.

 

(c)          This Agreement is personal in nature and neither of the parties hereto shall, without the consent of the other, assign, transfer or delegate this Agreement or any rights or obligations hereunder except as expressly provided herein. Without limiting the generality or effect of the foregoing, Executive’s right to receive payments hereunder will not be assignable, transferable or delegable, whether by pledge, creation of a security interest, or otherwise, other than by a transfer by Executive’s will or by the laws of descent and distribution and, in the event of any attempted assignment or transfer contrary to this Section 7(c), the Company shall have no liability to pay any amount so attempted to be assigned, transferred or delegated.

 

8.            Employment At Will. Notwithstanding anything to the contrary contained herein, Executive’s employment with the Company is not for any specified term and may be terminated by Executive or by the Company at any time, for any reason, with or without cause, without liability except with respect to the payments provided hereunder or as required by law or any other contract or benefit plan.

 

9.            Modification or Waiver. No amendment, modification or waiver of this Agreement shall be binding or effective for any purpose unless it is made in writing and signed by the party against whom enforcement of such amendment, modification or waiver is sought. No course of dealing between the parties to this Agreement shall be

 

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deemed to affect or to modify, amend or discharge any provision or term of this Agreement. No delay on the part of the Company or Executive in the exercise of any of their respective rights or remedies shall operate as a waiver thereof, and no single or partial exercise by the Company or Executive of any such right or remedy shall preclude other or further exercise thereof. A waiver of right or remedy on any one occasion shall not be construed as a bar to or waiver of any such right or remedy on any other occasion.

 

10.          Severability. Whenever possible each provision and term of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision or term of this Agreement shall be held to be prohibited by or invalid under such applicable law, then such provision or term shall be ineffective only to the extent of such prohibition or invalidity, without invalidating or affecting in any manner whatsoever the remainder of such provision or term or the remaining provisions or terms of this Agreement.

 

11.          Entire Agreement. This Agreement constitutes the entire agreement of the parties hereto with respect to this transaction, may be modified only by a written agreement signed by both parties, and supersedes any prior agreements and representations pertaining to the subject matter hereof. This Agreement is not intended, however, to supercede or modify any other existing written employment agreement between Executive and the Company.

 

12.          Governing Law. Except as may otherwise be specifically provided in any related agreements referenced herein or explicitly required by law, this Agreement shall be governed by the laws of the State of Delaware.

 

13.          Counterparts. This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same instrument.

 

14.          Captions. The caption headings are used in this Agreement only as a matter of convenience and for reference, and the parties hereto agree that the caption headings do not define, limit, or describe the scope of this Agreement nor determine the intent of any provision.

 

15.          Notices. Any notice given with respect to this Agreement shall be in writing and shall be given by personal delivery or by deposit in the United States Mail or FedEx, addressed to the respective addresses of the parties as set forth herein or at such other addresses as may be provided by any party to the other in writing in the manner herein stated, and, if to the Company, addressed to the attention of the Company’s Secretary. All notices shall be effective only upon receipt by the addressee.

 

16.          Good Faith. In all matters in connection herewith, the parties agree that each shall act in good faith in providing information to or dealing with another party hereunder, and in complying with the requirements of this Agreement and otherwise consummating the transactions herein contemplated.

 

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17.          Employment by a Related Entity. Either the Company or a subsidiary or other entity ultimately controlled by the Company may be Executive’s legal employer. For purposes of this Agreement, any reference to Executive’s termination of employment with the Company means termination of employment with the Company and all subsidiaries or other entities ultimately controlled by the Company, and does not include a transfer of employment between any of them. The actions referred to under the definition of "Good Reason" in Section 1(d) include the actions of the Company or Executive’s employing entity, as applicable. The obligations created under this Agreement are obligations of the Company. A change in control of a subsidiary or other entity which employs Executive will not constitute a Change in Control for purposes of this Agreement unless there is also a contemporaneous Change in Control of the Company.

 

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have executed this Agreement effective as of the date first above written.

 

 

ACXIOM CORPORATION

 

                                                                                                                            

 

 

 

 

 

 

EXECUTIVE

 

 

 

Address:

 

                                                                                                                            

 

(please print address)

 

 

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