Form 11-K: Acxiom Corporation
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[ X ] Annual Report pursuant to Section 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 2002.
OR
[ ] Transition Report pursuant to Section 15(d) of the Securities Exchange Act of 1934
For the transition period from_____________to_________________________
Commission File Number 0-16163
A. Full title of the plan and the address of the plan, if different from that of the issuer named
below:
Acxiom Corporation
Retirement Savings Plan
B. Name of issuer of the securities held pursuant to the plan and the address of its principal
executive office:
Acxiom Corporation
1 Information Way
Little Rock, AR 72202
ACXIOM CORPORATION
RETIREMENT SAVINGS PLAN
Financial Statements and Supplemental Schedules
December 31, 2002 and 2001
(With Independent Auditors' Report Thereon)
ACXIOM CORPORATION
RETIREMENT SAVINGS PLAN
Table of Contents
Page
Independent Auditors' Report 1
Statements of Net Assets Available for Benefits
December 31, 2002 and 2001 2
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2002 3
Notes to Financial Statements 4
Schedules
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2002 10
Schedule H, Line 4j - Schedule of Reportable Transactions
Year ended December 31, 2002 11
All other schedules required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974 are omitted as they are inapplicable or not required.
Independent Auditors' Report
The Plan Administrator
Acxiom Corporation Retirement Savings Plan:
We have audited the accompanying statements of net assets available for benefits of Acxiom Corporation Retirement Savings
Plan (the Plan) as of December 31, 2002 and 2001, and the related statement of changes in net assets available for
benefits for the year ended December 31, 2002. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets
available for benefits of Acxiom Corporation Retirement Savings Plan as of December 31, 2002 and 2001, and the changes in
net assets available for benefits for the year ended December 31, 2002, in conformity with accounting principles
generally accepted in the United States of America.
Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The
supplemental schedule of assets (held at end of year) and schedule of reportable transactions are presented for purposes
of additional analysis and are not a required part of the basic financial statements, but are supplementary information
required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan's management. The
supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial
statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements
taken as a whole.
KPMG LLP
Dallas, Texas
May 16, 2003
ACXIOM CORPORATION
RETIREMENT SAVINGS PLAN
Statements of Net Assets Available for Benefits
December 31, 2002 and 2001
2002 2001
-------------------- ---------------------
Assets:
Investments, at fair value:
Acxiom Corporation common stock (note 10) $ 58,768,334 68,661,909
Other common stock 94,518 133,802
Mutual funds 82,029,999 90,627,544
Common collective trust fund 15,185,250 14,513,103
Participant notes receivable 4,098,114 4,294,669
-------------------- ---------------------
Total investments 160,176,215 178,231,027
Cash 39,002 2,339
Escrow receivable (note 7) - 102,060
-------------------- ---------------------
Net assets available for benefits $ 160,215,217 178,335,426
==================== =====================
See accompanying notes to financial statements.
2
ACXIOM CORPORATION
RETIREMENT SAVINGS PLAN
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2002
Additions to net assets attributed to:
Investment income:
Dividends $ 2,293,652
Interest 360,258
------------------
2,653,910
------------------
Contributions:
Participants 13,487,894
Employer, net of $462,197 of forfeitures 4,469,668
Plan merger 517,245
------------------
18,474,807
------------------
Total additions 21,128,717
------------------
Deductions from net assets attributed to:
Net depreciation in fair value of investments (note 3) 22,939,923
Corrective distributions 11,241
Plan expenses 37,398
Distribution of benefits 16,260,364
------------------
Total deductions 39,248,926
------------------
Net decrease in net assets available for benefits (18,120,209)
Net assets available for benefits, beginning of year 178,335,426
------------------
Net assets available for benefits, end of year $ 160,215,217
==================
See accompanying notes to financial statements.
3
ACXIOM CORPORATION
RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2002 and 2001
(1) Plan Description
The following description of the Acxiom Corporation Retirement Savings Plan (the Plan) provides only general
information. Participants should refer to the plan agreement (the Agreement) for a more complete description of
the Plan's provisions.
(a) General
The Plan is a defined contribution plan covering substantially all employees of Acxiom Corporation and its
domestic subsidiaries (Acxiom, the Company, or the Employer). The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA), as amended.
(b) Contributions
The Plan includes a 401(k) provision whereby each non-highly compensated participant may defer up to 30% of
annual compensation (22% prior to May 1, 2001), not to exceed limits determined under Section 415(c) of the
Internal Revenue Code (IRC). Deferrals for highly compensated participants are limited to meet
nondiscrimination requirements of the IRC and are currently limited to 6% of annual compensation.
The Plan requires the Company to make a matching contribution equal to 50% of the amount of each
participant's deferred compensation up to 6% of total compensation as defined (maximum matching contribution
is 3% of total compensation). The Plan also allows the Company to make a discretionary contribution as
determined by the board of directors of Acxiom.
Participant contributions to the Plan are invested as directed by participants into various investment
options. The Company's matching contributions are made with Acxiom common stock, and are recorded based on
the fair value of the common stock at the date contributed. During the years ended December 31, 2002 and
2001, the Company contributed 285,097 and 338,789 shares, respectively, of Acxiom common stock.
Certain fees for attorneys, accountants, and plan administration have been paid by the Company during the
year ended December 31, 2002. The Company may continue to pay these fees in the future, if it so chooses;
otherwise, fees will be paid out of the trust of the Plan. For the year ended December 31, 2002, $20,532 in
fees was paid out of the Plan's forfeiture account in addition to fees paid by the Company.
(c) Participant Accounts
Each participant's account is credited with the participant's contribution, the Company's matching
contribution, and discretionary contributions, if any, and is adjusted for investment income/losses.
Allocations of income/losses are made according to formulas specified in the Agreement based on participant
compensation or account balances. The benefit to which a participant is entitled is the benefit that can be
provided from the participant's vested account.
4 (Continued)
(d) Participant Notes Receivable
Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to the lesser of
$50,000 or 50% of their vested account balance. Loans are repayable through payroll deductions ranging up
to five years unless the loan is for the purchase of a primary residence, in which case the loan can be
repaid over ten years. The loans are secured by the balance in the participant's account and bear interest
at the prime rate in effect at the date of the loan plus 2% (6.25% and 6.75% at December 31, 2002 and 2001,
respectively). The interest rates on outstanding participant loans at December 31, 2002 range from 6.25% to
11.5%.
(e) Vesting
Participants are immediately vested in their voluntary contributions and the earnings thereon. Participants
are vested in the remainder of their accounts based on years of service, whereby partial vesting occurs in
20% increments beginning after two years of service until participants become fully vested after six years
of service. If applicable, nonvested portions of company contributions are forfeited as of an employee's
termination date and are used to reduce future company matching contributions or to pay Plan expenses.
At December 31, 2002 and 2001, forfeited nonvested accounts totaled $27,464 and $197,536, respectively.
These accounts will be used to reduce future employer contributions. During 2002, $322,260 of participants'
accounts were forfeited and employer contributions were reduced by $462,197 from forfeited nonvested
accounts. During 2002, the forfeiture account balance was also reduced by $20,532 in plan fees and a loss
of $9,603 on the fair market value of the investments held in the account.
(f) Investment Options
Upon enrollment in the Plan, a participant may direct employee contributions in any of 18 mutual funds and
one common collective trust fund currently offered by T. Rowe Price Investment Services, Inc. (T. Rowe
Price) (see note 4). In addition, beginning in 2001, participants have the option to open a self-directed
brokerage account with T. Rowe Price in order to invest in numerous other stocks, bonds, and mutual funds.
Effective, May 1, 2001, the Plan was amended to make Acxiom common stock an investment option for employee
contributions. For the years ended December 31, 2002 and 2001, employee contributions to the Acxiom common
stock fund were approximately $0 and $53,000, respectively.
The Plan's investment in the T. Rowe Price Stable Value Fund, a common trust fund, holds substantial
investments in Guaranteed Investment Contracts, Bank Investment Contracts, and Synthetic Investment
Contracts. The value of the fund reflects the value of the underlying contracts, which consist of changes
in principal value, reinvested dividends and capital gains distributions, and approximate fair market
value. The stated interest rates of the contracts vary and the average yield for the year ended
December 31, 2002 was 5.16% after expenses.
5 (Continued)
(g) Withdrawals and Payment of Benefits
Benefits paid upon retirement, death, or disability are made in the form of a lump-sum payment of cash or
common stock of the Company. If a participant receives benefits prior to retirement, death, or disability,
the benefits paid from the participant's employer contribution account shall not exceed the participant's
vested balance therein.
(2) Summary of Significant Accounting Policies
(a) Basis of Accounting
The financial statements of the Plan are prepared under the accrual method of accounting.
(b) Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of additions to and deductions from net assets during the
reporting period. Actual results could differ from those estimates.
(c) Investment Valuation and Income Recognition
The Plan's investments are stated at fair value, based upon quoted market prices, except for participant
notes receivable, which are stated at unpaid principal balance, which approximates fair value. Purchases
and sales of securities and related income are recorded on a trade-date basis.
The Plan provides for investment in investment securities that, in general, are exposed to various risks,
such as interest rate, credit, and overall market volatility. Due to the level of risk associated with
certain investment securities, changes can materially affect the amounts reported in the statements of net
assets available for benefits.
(d) Payment of Benefits
Benefits are recorded when paid.
6 (Continued)
(3) Investments
The fair value of the individual investments held by the Plan is as follows (investments that represent 5% or more
of the Plan's net assets are separately identified):
2002 2001
----------------------------- -----------------------------
Number of Number of
shares or shares or
units Fair value units Fair value
-------------- ------------- -------------- -------------
Acxiom common stock 3,821,088 $ 58,768,334* 3,930,275 $ 68,661,909*
Other common stock 94,518 133,802
Mutual funds:
**T. Rowe Price Equity Income Fund 744,019 14,724,145 655,292 15,497,655
**T. Rowe Price Balanced Fund 898,489 13,935,565 902,127 15,778,205
**T. Rowe Price Growth Stock Fund 717,317 13,327,753 652,194 15,770,063
**T. Rowe Price Mid-Cap Growth Fund 315,679 9,798,677 295,690 11,650,174
**Other funds 30,243,859 31,931,447
------------- -------------
Total mutual funds 82,029,999 90,627,544
------------- -------------
Common collective trust:
**T. Rowe Price Stable Value Fund 15,185,250 15,185,250 14,513,103 14,513,103
Participant notes receivable (6.25% - 11.5%) 4,098,114 4,294,669
------------- -------------
Total investments $160,176,215 $178,231,027
============= =============
* The employer matching portion of this investment is nonparticipant directed for 2001 and the first half of 2002. See note 10.
** All T. Rowe Price Funds are a party in interest. Other Funds consist of various investments including T. Rowe Price Funds
in the amount of $30,104,221 for 2002 and $31,638,192 for 2001.
During 2002, the Plan's investments (including investments bought, sold, and held during the year) depreciated in
value as follows:
Acxiom common stock * $ (7,871,173)
Other common stock (65,474)
Mutual funds (15,003,276)
--------------
$ (22,939,923)
==============
7 (Continued)
(4) Plan Administration
The Plan is administered by the Company. During 2002 and 2001, participant records and assets have been maintained
by T. Rowe Price Trust Company as recordkeeper and trustee (see note 6).
(5) Tax Status
The Internal Revenue Service has determined and informed the Company by a letter dated March 27, 1996 that the
Plan is designed in accordance with applicable sections of the IRC. The Plan has been amended since receiving the
determination letter, and the Company has requested an updated determination letter. The plan administrator and
the Plan's tax counsel believe that the Plan is currently designed and being operated in compliance with the
applicable requirements of the IRC.
(6) Parties in Interest
All investment transactions were executed with T. Rowe Price Trust Company, the Plan's trustee and recordkeeper.
Accordingly, all investment transactions during the respective years were with a party in interest.
(7) Escrow Receivable
The purchase price of Computer Graphics of Arizona, Inc. (CGA), which was acquired by the Company in 1999, has
been finalized. The contingent portion of the purchase price was being held in escrow. As of December 31, 2001,
5,842 shares of Acxiom common stock related to the Plan were in the escrow account. Upon satisfaction of purchase
contingencies, these shares were released from escrow. These shares resulted in escrow receivable with a fair
market value of $0 and $102,060 at December 31, 2002 and 2001, respectively.
(8) Plan Termination
Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its
contributions at any time and to terminate the Plan subject to the provisions of ERISA. Upon complete
discontinuance of contributions, termination, or partial termination of the Plan, participants will become 100%
vested in their accounts, in which event the value of such accounts shall be distributed as provided in the Plan.
(9) Reconciliation to Form 5500
As discussed in note 7, at December 31, 2002 and 2001, there was an escrow receivable in the amount of $0 and
$102,060, respectively, related to the 1999 acquisition of CGA. At December 31, 2001, this amount is reflected in
the statement of net assets available for benefits but is not reflected in the 2001 Form 5500.
Participant-directed brokerage accounts are reported in the aggregate on Form 5500 but are classified according to
investment type in the statement of net assets available for benefits. As of December 31, 2002 and 2001,
participant-directed brokerage accounts included $255,163 and $293,255 of mutual fund investments and $94,518 and
$133,802 of common stock investments, respectively.
8 (Continued)
(10) Plan Amendments
Effective on and after June 1, 2002, plan participants may instruct the trustee to sell all or a portion of the
Acxiom stock in their matching contribution account and to reinvest the proceeds in one or more of the other
investment options available under the Plan. The matching contribution will continue to be made in Acxiom stock.
Effective as of the first day of the plan year beginning after December 31, 2001, the Plan was amended to comply
with certain provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001.
9
ACXIOM CORPORATION
RETIREMENT SAVINGS PLAN
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2002
Identity of issuer, borrower,
lessor, or similar party Description Shares Cost Current value
------------------------------- ------------------ ---------- ------------ -------------
* Acxiom Corporation Common stock 3,821,088 $ 65,912,120 $ 58,768,334
-------------
Applied Micro Other common stock ** 754
Atmel Corp Other common stock ** 1,110
Cisco Systems Inc Other common stock ** 3,927
Citrix Systems Inc Other common stock ** 2,476
Coeur D Alene Mines Other common stock ** 55
Concurrent Computer Other common stock ** 8,526
Emc Corp (Mass) Com Other common stock ** 1,228
Engage Inc Com Other common stock ** 390
Ericsson L M Tel Cd Other common stock ** 404
Extreme Networks Inc Other common stock ** 981
Fair Isaac and Co Other common stock ** 8,839
Flextronics Intl Ltd Other common stock ** 1,638
General Electric Co Other common stock ** 1,631
Global Crossing Ltd Other common stock ** 7
Honeywell Intl Inc Other common stock ** 1,752
J P Morgan Chase Other common stock ** 1,296
Metromedia Fiber Other common stock ** 3
Mim Corp Com Other common stock ** 580
Nasdaq 100 shares Other common stock ** 37,774
Newmont Mining Other common stock ** (233)
Nokia Corp Other common stock ** 1,550
PNC Sierra Inc Com Other common stock ** 2,220
Qlogic Corp Other common stock ** 6,900
Riverstone Networks Other common stock ** 1,060
SBC Communications Other common stock ** 1,437
Schering-Plough Corp Other common stock ** 4,440
Sun Microsystems Other common stock ** 620
Syscandre Networks Other common stock ** 1,445
Tycd Intl Ltd New Other common stock ** 1,708
-------------
Total other common stock 94,518
-------------
* T. Rowe Price Mutual funds:
Franklin Small-Mid Cap Growth 925 ** 93,419
American Growth Fund of America 19,598 ** 661,487
Strong Common Stock Fund 5,552 ** 483,293
BGI Lifepath Income 26,761 ** 117,684
BGI Lifepath 2010 3,454 ** 99,084
BGI Lifepath 2020 3,511 ** 100,567
BGI Lifepath 2030 3,443 ** 137,777
BGI Lifepath 2040 2,198 ** 37,089
International Stock Fund 355,947 ** 3,356,077
Growth Stock Fund 652,194 ** 13,327,753
New Horizons Fund 250,317 ** 4,316,078
Small-Cap Value Fund 315,836 ** 7,714,202
Equity Index 500 Fund 95,464 ** 2,736,753
Mid-Cap Growth Fund 295,690 ** 9,798,677
Balanced Fund 902,127 ** 13,935,565
Equity Income Fund 655,292 ** 14,724,145
Spectrum Income Fund 597,062 ** 6,163,239
Spectrum Growth Fund 324,902 ** 3,971,947
Open-end mutual funds ** 17,234
Open-end mutual funds ** 97,582
Open-end mutual funds ** 709
Meridian Growth Open-end mutual funds ** 61,243
Dodge & Cox Stock Open-end mutual funds ** 45,367
U.S. Treasury Money Open-end mutual funds ** 33,028
--------------
Total mutual funds 82,029,999
* T. Rowe Price Common collective trust fund 15,185,250 ** 15,185,250
* Participant notes receivable, loans to participants,
interest rates range from 6.25% - 11.5% ** 4,098,114
-------------
Total investments $ 160,176,215
=============
* Indicates a party in interest.
** Not applicable - cost is excluded as investments are participant directed.
See accompanying independent auditors' report.
10
ACXIOM CORPORATION
RETIREMENT SAVINGS PLAN
Schedule H, Line 4j - Schedule of Reportable Transactions
Year ended December 31, 2002
(h)
(a) (b) (c) (d) (g) Current
Identity of Description Purchase Selling Cost of value of (i)
party involved of assets price price asset asset Net gain
-------------- ------------- ----------- ----------- ----------- ----------- ---------
Acxiom Company stock $ 4,917,726 - 4,917,726 4,917,726 -
Acxiom Company stock - (7,000,707) (2,901,587) (7,000,707) 4,099,120
See accompanying independent auditors' report.
11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Acxiom Corporation has duly caused this annual
report to be signed on its behalf by the undersigned thereunto duly authorized.
Acxiom Corporation
As Sponsor and Administrator of the
Acxiom Corporation Retirement Savings Plan
Date: June 25, 2003 By: /s/ Jefferson D. Stalnaker
------------------------------------------------
Jefferson D. Stalnaker
Company Financial Operations Leader
EXHIBIT INDEX
Exhibit 23.1 Consent of KPMG LLP