-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, F/7J1gxYEJDQfuVtMGoiwAmMACKFsU0DXroQR2/LtolCxgiMs++RBy6fQdLTE/P7 XiEIsziyk/JQqIuqNEc7VQ== 0000912057-99-005239.txt : 19991115 0000912057-99-005239.hdr.sgml : 19991115 ACCESSION NUMBER: 0000912057-99-005239 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991112 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CIBER INC CENTRAL INDEX KEY: 0000918581 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING SERVICES [7371] IRS NUMBER: 382046833 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-13103 FILM NUMBER: 99749138 BUSINESS ADDRESS: STREET 1: 5251 DTC PKYWAY STREET 2: STE 1400 CITY: ENGLEWOOD STATE: CO ZIP: 80111-2742 BUSINESS PHONE: 3032200100 MAIL ADDRESS: STREET 1: 5251 DTC PKWY STREET 2: STE 1400 CITY: ENGLEWOOD STATE: CO ZIP: 80111-2742 10-Q 1 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ----------- FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended: Commission file number: SEPTEMBER 30, 1999 0-23488 CIBER, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 38-2046833 (STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.) 5251 DTC PARKWAY SUITE 1400 ENGLEWOOD, CO 80111 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) Telephone Number: (303) 220-0100 ----------- Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes __X__ No _____ As of September 30, 1999, there were 59,148,049 shares of the Registrant's common stock ($0.01 par value) outstanding. CIBER, INC. FORM 10-Q TABLE OF CONTENTS
Page ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements (unaudited): Consolidated Statements of Operations Three months ended September 30, 1999 and 1998 3 Consolidated Balance Sheets September 30, 1999 and June 30, 1999 4 Consolidated Statements of Cash Flows Three months ended September 30, 1999 and 1998 5 Notes to Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 Item 3. Quantitative and Qualitative Disclosures About Market Risk 11 PART II. OTHER INFORMATION 12 SIGNATURES 13
2 CIBER, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30, -------------------------- IN THOUSANDS, EXCEPT PER SHARE DATA 1998 1999 -------- -------- Consulting services $147,601 $176,400 Other revenues 18,057 10,642 -------- -------- Total revenues 165,658 187,042 -------- -------- Cost of consulting services 94,496 119,398 Cost of other revenues 12,501 5,146 Selling, general and administrative expenses 37,284 43,075 Amortization of intangible assets 1,082 3,023 Merger costs 1,535 - -------- -------- Operating income 18,760 16,400 Interest income 612 712 Other income - 777 -------- -------- Income before income taxes 19,372 17,889 Income tax expense 8,255 7,629 -------- -------- Net income $ 11,117 $ 10,260 ======== ======== Earnings per share - basic $ 0.21 $ 0.18 Earnings per share - diluted $ 0.20 $ 0.18 Weighted average shares - basic 52,920 57,464 Weighted average shares - diluted 55,170 58,423
See accompanying notes to consolidated financial statements. 3 CIBER, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED)
JUNE 30, SEPTEMBER 30, IN THOUSANDS, EXCEPT PER SHARE DATA 1999 1999 -------- --------- ASSETS Current assets: Cash and cash equivalents $ 64,215 $ 51,567 Accounts receivable 150,976 155,033 Inventories 395 461 Prepaid expenses and other assets 2,943 3,520 Deferred income taxes 2,915 3,492 -------- --------- Total current assets 221,444 214,073 -------- --------- Property and equipment, at cost 47,997 50,912 Less accumulated depreciation and amortization (22,866) (24,566) -------- --------- Net property and equipment 25,131 26,346 -------- --------- Intangible assets, net 157,012 153,989 Deferred income taxes 1,694 2,119 Other assets 3,351 4,461 -------- --------- Total assets $408,632 $ 400,988 ======== ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Trade payables 13,502 13,725 Accrued compensation and payroll taxes 36,845 40,682 Deferred revenues 3,850 1,521 Other accrued expenses and liabilities 10,118 9,388 Income taxes payable 7,181 12,872 -------- --------- Total current liabilities 71,496 78,188 -------- --------- Commitments and contingencies Shareholders' equity: Preferred stock, $0.01 par value, 5,000,000 shares authorized, no shares issued - - Common stock, $0.01 par value, 80,000,000 shares authorized, 58,933,000 and 59,148,000 shares issued and outstanding 589 591 Additional paid-in capital 222,652 224,796 Retained earnings 122,607 132,752 Treasury stock, 500,000 and 2,097,000 shares at cost (8,712) (35,339) -------- --------- Total shareholders' equity 337,136 322,800 -------- --------- Total liabilities and shareholders' equity $408,632 $ 400,988 ======== =========
See accompanying notes to consolidated financial statements. 4 CIBER, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30, --------------------------- IN THOUSANDS 1998 1999 -------- -------- OPERATING ACTIVITIES: Net income $ 11,117 $ 10,260 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,664 5,037 Deferred income taxes (1,183) (516) Gain on sale of LogisticsPRO, net of tax - (466) Other 10 96 Changes in operating assets and liabilities, net of the effects of acquisitions: Accounts receivable (10,488) (4,057) Inventories 13 (66) Other current and long-term assets (435) (1,683) Trade payables 4,522 193 Accrued compensation and payroll taxes 3,896 3,837 Deferred revenues (797) (2,329) Other accrued expenses and liabilities (389) 526 Income taxes payable 7,700 5,382 -------- -------- Net cash provided by operating activities 16,630 16,214 -------- -------- INVESTING ACTIVITIES: Acquisitions, net of cash acquired (150) - Purchases of property and equipment (2,096) (3,683) -------- -------- Net cash used in investing activities (2,246) (3,683) -------- -------- FINANCING ACTIVITIES: Proceeds from sales of common stock, net 3,498 4,947 Purchases of treasury stock (532) (30,126) -------- -------- Net cash provided by (used in) financing activities 2,966 (25,179) -------- -------- Net increase (decrease) in cash and cash equivalents 17,350 (12,648) Cash and cash equivalents, beginning of period 38,238 64,215 -------- -------- Cash and cash equivalents, end of period $ 55,588 $ 51,567 ======== ========
See accompanying notes to consolidated financial statements. 5 CIBER, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying consolidated financial statements of CIBER, Inc. and subsidiaries ("CIBER" or the "Company") have been prepared without audit. Certain information and note disclosures normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles have been omitted. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in CIBER's Annual Report on Form 10-K for the fiscal year ended June 30, 1999. In the opinion of management, these unaudited consolidated financial statements include all adjustments necessary for a fair presentation of the financial position and results of operations for the periods presented. Interim results of operations for the three-month period ended September 30, 1999 are not necessarily indicative of operating results for the full fiscal year. EARNINGS PER SHARE. Basic EPS is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS includes the effects of the potential dilution of CIBER's stock options, determined using the treasury stock method. The computation of weighted average shares includes the shares and options issued in connection with business combinations accounted for as poolings of interests as if they had been outstanding for all periods prior to the merger. The number of antidilutive stock options omitted from the computation of weighted average shares was 164,638 and 3,241,549 for the three months ended September 30, 1998 and 1999, respectively. (2) SHAREHOLDERS' EQUITY Changes in shareholders' equity during the three months ended September 30, 1999 were (in thousands):
Common stock Additional Total ---------------- paid-in Retained Treasury shareholders' Shares Amount capital earnings stock equity ------------------------------------------------------------------- BALANCES AT JULY 1, 1999 58,933 $ 589 $222,652 $ 122,607 $ (8,712) $ 337,136 Employee stock purchases and options exercised 192 2 1,561 (115) 3,499 4,947 Tax benefit from exercise of stock options - - 487 - - 487 Compensation expense related to stock and stock options 23 - 96 - - 96 Purchases of treasury stock - - - - (30,126) (30,126) Net income - - - 10,260 - 10,260 ------- ----- -------- --------- ---------- ---------- BALANCES AT SEPTEMBER 30, 1999 59,148 $ 591 $224,796 $ 132,752 $ (35,339) $ 322,800 ======= ===== ======== ========= ========== ==========
(3) STOCK OPTION PLANS From July 1, 1999 to September 30, 1999, CIBER granted options for 1,954,500 shares of common stock, at fair market value, to certain employees under the Employees' Stock Option Plan at exercise prices ranging from $17.00 to $19.13 per share. 6 CIBER, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (4) REVOLVING LINE OF CREDIT CIBER had a $35 million unsecured revolving line of credit with a bank that was renewed and increased to $50 million on November 1, 1999. There were no outstanding borrowings under this bank line at September 30, 1999 and June 30, 1999. Any outstanding borrowings would bear interest at the London Interbank Offered Rate ("LIBOR") plus 2%. The credit agreement requires a commitment fee of .225% per annum on any unused portion of the line of credit up to $25 million. On July 1, 2000, the amount available under the line of credit will be reduced to $35 million and the maximum unused portion of the line of credit on which the commitment fee will be paid will be reduced to $20 million. The credit agreement expires on January 31, 2001. (5) SALE OF LOGISTICSPRO On September 30, 1999, CIBER sold its LogisticsPRO software business resulting in a $777,000 gain that is included in other income. The after-tax gain is $466,000 or $.01 per diluted share. As consideration, CIBER received a $2.0 million interest bearing note, that is secured by CIBER common stock owned by the buyers and is included in other assets. In addition, CIBER will receive a percentage of certain future revenues, up to $3.5 million over the next five years. The software business was sold to an entity owned by the current management of the business as well as two non-executive officers of CIBER. (6) SUBSEQUENT EVENTS Subsequent to September 30, 1999, CIBER completed the following two business combinations: THE ISADORE GROUP, INC. ("ISADORE") - On October 15, 1999, CIBER acquired certain assets, liabilities and all of the business operations of Isadore for approximately $18 million. Additionally, the terms of the purchase provide for additional consideration of up to $10 million based on revenue earned during the 12-month periods ending December 31, 2000, 2001 and 2002. This acquisition will be accounted for as a purchase. Accordingly, CIBER's consolidated financial statements will include the results of operations of Isadore after the date of acquisition. CIBER will record initial goodwill of approximately $17 million related to this acquisition, which will be amortized over 20 years. Any additional consideration paid will be accounted for as additional goodwill. Isadore, located in Phoenix, Arizona, provided PeopleSoft higher education consulting services. WATERSTONE CONSULTING, INC. ("WATERSTONE") - On October 29, 1999, CIBER acquired certain assets, liabilities and all of the business operations of Waterstone for approximately $26 million in cash and the issuance of 243,347 shares of its common stock. The aggregate purchase price was approximately $31 million. CIBER used a portion of its line of credit to fund this acquisition. This acquisition will be accounted for as a purchase. Accordingly, CIBER's consolidated financial statements will include the results of operations of Waterstone after the date of acquisition. CIBER will record goodwill of approximately $30 million related to this acquisition, which will be amortized over 20 years. Waterstone, located in Chicago, Illinois, provided consulting services specializing in electronic commerce supply chain and customer relationship management solutions. At the Annual Meeting of Shareholders of CIBER, Inc, held on October 28, 1999, the shareholders voted upon and approved an amendment to the Company's Certificate of Incorporation to increase the number of authorized shares of common stock from 80,000,000 to 100,000,000 shares. In addition, it was voted upon and approved to increase the number of shares of common stock reserved for issuance pursuant to the Company's Equity Incentive Plan from 8,000,000 to 10,500,000 shares. 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS THE FOLLOWING DISCUSSION OF THE RESULTS OF OPERATIONS AND FINANCIAL CONDITION SHOULD BE READ IN CONJUNCTION WITH THE COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS AND NOTES THERETO. WITH THE EXCEPTION OF HISTORICAL MATTERS AND STATEMENTS OF CURRENT STATUS, CERTAIN MATTERS DISCUSSED BELOW ARE FORWARD-LOOKING STATEMENTS THAT INVOLVE SUBSTANTIAL RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM TARGETS OR PROJECTED RESULTS. WITHOUT LIMITING THE FOREGOING, THE WORDS "BELIEVES," "ANTICIPATES," "PLANS," "EXPECTS" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY INCLUDE, AMONG OTHERS, YEAR 2000 EFFECTS, GROWTH THROUGH BUSINESS COMBINATIONS AND INTERNAL EXPANSION, THE ABILITY TO ATTRACT AND RETAIN QUALIFIED CONSULTANTS, DEPENDENCE ON SIGNIFICANT RELATIONSHIPS AND THE ABSENCE OF LONG-TERM CONTRACTS, MANAGEMENT OF A LARGE AND RAPIDLY GROWING BUSINESS, PROJECT RISKS, PRICING AND MARGIN PRESSURES, COMPETITION, POTENTIAL FLUCTUATIONS IN QUARTERLY OPERATING RESULTS, PRICE VOLATILITY, AND INTERNATIONAL EXPANSION. MANY OF THESE FACTORS ARE BEYOND THE COMPANY'S ABILITY TO PREDICT OR CONTROL. PLEASE REFER TO A DISCUSSION OF THESE AND OTHER FACTORS IN THE COMPANY'S ANNUAL REPORT ON FORM 10-K AND OTHER SECURITIES AND EXCHANGE COMMISSION FILINGS. THE COMPANY DISCLAIMS ANY INTENT OR OBLIGATION TO UPDATE PUBLICLY SUCH FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE. IN ADDITION, AS A RESULT OF THESE AND OTHER FACTORS, THE COMPANY'S PAST FINANCIAL PERFORMANCE SHOULD NOT BE RELIED ON AS AN INDICATION OF FUTURE PERFORMANCE. THREE MONTHS ENDED SEPTEMBER 30, 1999 AS COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 1998 CIBER's revenues for the three months ended September 30, 1999 increased 13% to $187.0 million from $165.7 million for the quarter ended September 30, 1998. This represents a 20% increase in consulting services revenues offset by a planned decrease in other revenues, primarily sales of computer hardware products. Other revenues decreased to $10.6 million for the three months ended September 30, 1999 from $18.1 million for the same quarter last year. Management expects that the decrease in other revenues will likely continue in the future. The increase in consulting services revenues is derived primarily from an increase in hours billed. Of the 20% increase in consulting services revenues, approximately 11% was due to revenues from acquired businesses or immaterial poolings of interests and approximately 9% was due to organic growth of existing operations. Organic growth for the quarter was driven by growth in ERP implementation services and was lessened, to some extent, due to declining direct Year 2000 service revenues. Despite the period-to-period growth in consulting services revenues, CIBER expects to continue to experience a moderation in consulting services revenues through December 31, 1999 due to the reluctance of some customers to commence significant new IT initiatives until Year 2000 failure risks have passed. Gross margin percentage decreased to 33.4% of revenues for the three months ended September 30, 1999 from 35.4% of revenues for the same quarter of last year. This decrease is due to declining gross margins on consulting services offset by improved gross margins on other revenues. Consulting services gross margins declined primarily due to a decrease in the utilization levels of professional staff. Selling, general and administrative expenses were 23.0% of revenues for the three months ended September 30, 1999 compared to 22.5% of revenues for the same quarter last year. This increase is due primarily to additional costs incurred for new programs implemented to position the Company for future growth, including the addition of key senior and executive management team members, a "One CIBER" branding and marketing initiative, and internal systems development. As CIBER's focus continues to shift to more solutions-oriented and project work, selling, general and administrative expenses will tend to increase as a percentage of sales and partially offset the generally higher gross margins on such work. Amortization of intangible assets increased to $3.0 million for the three months ended September 30, 1999 from $1.1 million for the same quarter last year. This increase was due to the additional intangible assets resulting from mergers and acquisitions during the past year. 8 Merger costs, primarily transaction related broker and professional costs, of $1.5 million were incurred during the three months ended September 30, 1998, while no merger costs were incurred during the three months ended September 30, 1999. Interest income increased to $712,000 for the three months ended September 30, 1999 from $612,000 for the same quarter last year due to increased average cash balances available for investment. Other income for the three months ended September 30, 1999 of $777,000 represents the gain on the sale of the LogisticsPRO software business (see Note 5 of Notes to Consolidated Financial Statements). Management believes the sale of this software business will help to maintain CIBER's independence and avoid conflicts with significant partners with whom LogisticsPRO might otherwise compete. The sale allows CIBER to focus on its IT consulting services business rather than selling proprietary products. In addition, management believes that CIBER's profitability in the next 12 months will be favorably impacted as a result of the sale due to decreased sales, marketing and software development costs. As part of the sale, the purchaser assumed all agreements for software maintenance causing a reduction in the balance of deferred revenues. CIBER's effective tax rate for the three months ended September 30, 1999 and 1998 was 42.6%. CIBER's effective tax rate for the three months ended September 30, 1999 has increased due to increased nondeductible amortization resulting from nontaxable acquisitions, primarily during the second half of fiscal 1999. CIBER's effective tax rate was higher than normal during the three months ended September 30, 1998 due to nondeductible merger costs. CIBER's net income decreased to $10.3 million for the three months ended September 30, 1999 from $11.1 million for the same quarter last year. LIQUIDITY AND CAPITAL RESOURCES At September 30, 1999, CIBER had $135.9 million of working capital, of which $51.6 million was cash and cash equivalents, and had a current ratio of 2.7:1. CIBER believes that its cash and cash equivalents on hand, its operating cash flow and its available line of credit will be sufficient to finance working capital needs during the next twelve months. In June 1999, CIBER's Board of Directors authorized the repurchase of up to 10% of CIBER's outstanding stock. At September 30, 1999, CIBER had purchased 2,305,000 shares for $38.8 million under this program and may, depending on circumstances, purchase more. Furthermore, CIBER may use cash to purchase businesses. As a result, CIBER may borrow to finance such activities. Future borrowings may include bank, private or public debt. CIBER had a $35 million revolving line of credit with a bank that was renewed and increased to $50 million on November 1, 1999. There were no outstanding borrowings under this bank line at September 30, 1999 and June 30, 1999. The credit agreement expires in January 2001. Net cash provided by operating activities was $16.2 million and $16.6 million for the three months ended September 30, 1999 and 1998, respectively. Included in net cash provided by operating activities was $487,000 and $3.0 million for the three months ended September 30, 1999 and 1998, respectively, related to the tax benefit from the exercise of stock options. CIBER's accounts receivable totaled $155.0 million at September 30, 1999 compared to $151.0 million at June 30, 1999. This increase is primarily a result of CIBER's increase in revenues and also the mix shift to more solution-oriented engagements which tend to have more lengthy billing and payment terms. Net cash used in investing activities was $3.7 million and $2.2 million during the three months ended September 30, 1999 and 1998, respectively. CIBER used cash of $150,000 during the three months ended September 30, 1998 for acquisitions. CIBER purchased property and equipment of $3.7 million and $2.1 million during the three months ended September 30, 1999 and 1998, respectively. Net cash (used in) provided by financing activities was ($25.2 million) and $3.0 million during the three months ended September 30, 1999 and 1998, respectively. CIBER obtained net cash proceeds from sales of common stock to employees of $4.9 million and $3.5 million during the three months ended 9 September 30, 1999 and 1998, respectively. This increase is primarily due to increased participation in CIBER's Employee Stock Purchase Plan. During the three months ended September 30, 1999, CIBER purchased 1,805,000 shares of treasury stock for $30.1 million. Of these treasury shares, 208,150 were reissued as sales of common stock under CIBER's Employee Stock Purchase Plan. CIBER plans to recapitalize its Application Solutions Provider ("ASP") subsidiary, CIBER Enterprise Outsourcing, Inc. during fiscal 2000. CIBER expects this recapitalization to provide additional capital, from other investors, to expand the ASP business faster. Given the uncertainties of market conditions, among other things, there can be no assurances that CIBER will be successful in it attempts to recapitalize this business. YEAR 2000 COMPLIANCE THE FOLLOWING STATEMENTS ARE "YEAR 2000 READINESS DISCLOSURES" IN CONFORMANCE WITH THE YEAR 2000 INFORMATION AND READINESS DISCLOSURE ACT OF 1998. The "Year 2000" issue is the result of computer programs using two digits rather than four to define the applicable year. Computer software and hardware and other devices with embedded technology that are date sensitive may recognize a date using "00" as the year 1900 rather than the year 2000. This could result in a system failure or miscalculations causing disruptions of CIBER's operations. CIBER has instituted various projects to address the Year 2000 issue. CIBER believes its material internal information technology ("IT") systems, including payroll, billing and accounting systems, are currently Year 2000 compliant. For significant third-party software applications, CIBER has obtained confirmation that the software is Year 2000 compliant. CIBER has completed testing and remediation, if necessary, of all internally developed software. CIBER is currently evaluating its non-IT systems, such as building security, elevators, fire-safety systems, telephones, voice mail and other systems containing embedded microprocessors as well as evaluating the Year 2000 readiness of its significant suppliers. CIBER relies on the services of the landlords of its offices, telecommunications companies, banks, utilities, commercial airlines, and insurance companies, among others. As of September 30, 1999, CIBER has received Year 2000 compliance status information from all of its significant suppliers. Of these, 60% have indicated that they are currently Year 2000 compliant. The remainder have indicated that they plan to be Year 2000 compliant by December 31, 1999. If CIBER determines that a significant supplier will not be Year 2000 compliant and such noncompliance would materially affect CIBER's operations, CIBER will devise contingency plans. There can be no assurance that any contingency plans developed by CIBER will prevent such service interruption on the part of one or more of CIBER's vendors from having a material adverse effect on CIBER. CIBER's principal business is providing IT services. Some of CIBER's services are directly or indirectly related to the Year 2000 issue, including Year 2000 remediation services. CIBER provides services to clients that assist the client in their Year 2000 projects. In addition, CIBER provides services to clients directly related to client systems that may or may not be Year 2000 compliant. Due to the potential significance of the Year 2000 issue upon client operations and upon any failure of critical client systems to which CIBER has provided services, CIBER may be subject to claims regardless of whether the failure is related to the services provided by CIBER. If asserted, the resolution of such claims, including defense costs, could have a material adverse effect on CIBER. CIBER generally attempts to include provisions in client contracts that, among other things, disclaim implied warranties, limit the duration of any express warranties, limit CIBER's maximum liability and disclaim any warranties for projects managed by the client. There can be no assurance that CIBER will be able to obtain these contractual protections in future client contracts, or that such provisions will protect CIBER from, or limit the amount of, any liability arising from claims against CIBER. As a reseller of certain IT products, CIBER only passes to its customers the applicable vendors' warranties. CIBER makes no warranties regarding Year 2000 compliance of any of the products it resells. CIBER has developed and licensed certain warehousing and traffic software products that have subsequently been modified to be Year 2000 compliant. Year 2000 compliant versions have been tested both internally and by a 10 third party. CIBER has offered the Year 2000 compliant software versions to its prior and existing customers at no charge. As described above, CIBER has identified various potential issues associated with the Year 2000 issue. CIBER is devoting internal resources and is working with its suppliers to help ensure that CIBER's business is not substantially interrupted as a result of the Year 2000. CIBER believes that the total amounts spent by it to date and that it expects to spend in fiscal 2000 addressing the Year 2000 issue will be less than $250,000. CIBER currently does not have a contingency plan in the event of a particular system not being Year 2000 compliant. Such a plan will be developed if it becomes clear that CIBER is not going to achieve its compliance objectives. Although CIBER expects to identify and resolve all Year 2000 problems that could materially adversely affect its business operations, management believes that it is not possible to determine with absolute certainty that all Year 2000 problems affecting CIBER, its vendors, or its clients have been identified or corrected. If CIBER is required to implement any contingency plan, it could have a material adverse effect on CIBER's operations. In addition, the business interruption, resulting from Year 2000 issues, of any of CIBER's significant clients could have a material adverse effect on CIBER. This discussion of CIBER's Year 2000 efforts, management's expectations relating to Year 2000 compliance and the possible effects on CIBER are forward-looking statements. RECENT AND PROPOSED ACCOUNTING PRONOUNCEMENTS CIBER believes that recent accounting pronouncements will not have a material effect on its financial position or results of operations. The Financial Accounting Standards Board (FASB) has proposed a new statement that would, among other things, eliminate the pooling of interests method of accounting for business combinations. The proposed statement would require all business combinations to be recorded using the purchase method of accounting and any resulting excess purchase price over the fair value of acquired net assets ("goodwill") would be charged to earnings over a period of not more than 20 years. The proposal would also allow the reporting of earnings per share excluding amortization of goodwill. The proposed accounting would be effective for business combinations after the effective date. The actual pronouncement, when issued, will likely have changes from the exposure draft. If issued, management believes this pronouncement would increase the amount of goodwill recorded for subsequent business combinations (as CIBER has historically completed a large percentage of business combinations as poolings of interests) and also increase the amortization charge against earnings. As a result, management believes its internal operating metrics, excluding amortization of intangibles, should also be considered when evaluating CIBER's performance. Management also expects investors to place increasing emphasis on "Cash EPS. " QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK CIBER has no activities in derivative financial or commodity instruments. CIBER's exposure to market risks, (i.e. interest rate risk, foreign currency exchange rate risk, equity price risk) through other financial instruments, including, among others, cash equivalents, accounts receivable, lines of credit, is not material. 11 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS None ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS None ITEM 3. DEFAULTS UPON SENIOR SECURITIES Not applicable ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS At the Annual Meeting of Shareholders of CIBER, Inc. held on October 28, 1999, the following matters were voted upon with the results as indicated below. 1) Election of Directors
For Withhold --- -------- Mac J. Slingerlend 42,416,640 1,957,302 James A. Rutherford 42,428,422 1,945,520 Paul E. Rudolph 42,508,127 1,865,815
The terms of offices as a director of Bobby G. Stevenson, Richard A. Montoni, Roy L. Burger, James G. Brocksmith, Jr. and Archibald J. McGill continued after the meeting. 2) The amendment to the Company's Certificate of Incorporation to increase the number of authorized shares of common stock from 80,000,000 to 100,000,000 shares.
For Against Abstain --- ------- ------- 42,315,153 1,989,606 69,183
3) The increase in the number of shares of common stock reserved for issuance pursuant to the Company's Equity Incentive Plan from 8,000,000 to 10,500,000 shares.
For Against Abstain --- ------- ------- 34,268,178 9,930,156 175,603
ITEM 5. OTHER INFORMATION None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K Exhibit 3(i) Certificate of Amendment to Amended and Restated Certificate of Incorporation of CIBER, Inc. Exhibit 3(ii) Amended and Restated Bylaws of the Company as adopted August 17, 1999 Exhibit 10.1 Unsecured Credit Agreement with UMB Bank Colorado dated November 1, 1999 Exhibit 10.2 Promissory Note between the Company and Joseph A. Mancuso Exhibit 27.1 Financial Data Schedule for the three months ended September 30, 1999
12 A Report on Form 8-K was filed on July 1, 1999 announcing that the acquisition of Business Impact Systems, Inc. was to be considered a significant acquisition. It provided selected consolidated and supplemental quarterly financial information that was restated for certain business combinations. A Report on Form 8-K/A was filed on August 24, 1999 that provided the required audited financial statements and pro forma financial information of Business Impact Systems, Inc. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned there unto duly authorized. CIBER, INC. (Registrant) Date November 12, 1999 By /s/ Mac J. Slingerlend -------------------------------- Mac J. Slingerlend Chief Executive Officer and President Date November 12, 1999 By /s/ Richard A. Montoni -------------------------------- Richard A. Montoni Chief Financial Officer and Executive Vice President 13 EX-3.(I) 2 EXHIBIT 3(I) CERTIFICATE OF AMENDMENT TO AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF CIBER, INC. CIBER, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the "Corporation"), DOES HEREBY CERTIFY: FIRST: The board of directors of the Corporation adopted the following resolution proposing and declaring advisable an amendment to the Certificate of Incorporation of the Corporation at a regular meeting of the board of directors held August 17, 1999: RESOLVED, that Section 4.1 of Article 4 of the Amended and Restated Certificate of Incorporation of the Corporation be amended by deleting said Section 4.1 of Article 4 in its entirety, and substituting the following therefor: "Section 4.1 AUTHORIZED SHARES. The total number of shares that the Corporation shall have the authority to issue is one hundred five million (105,000,000), of which one hundred million (100,000,000) shall be common stock, each with a par value of $.01, and five million (5,000,000) shares shall be preferred stock, each with a par value of $.01." SECOND: That the aforesaid amendment was duly adopted in accordance with the applicable provisions of Section 242 of the General Corporation Law of the State of Delaware. IN WITNESS WHEREOF, the Corporation has caused this Certificate to be signed by Mac J. Slingerlend, President and Chief Executive Officer of the Corporation this 29th day of October, 1999. CIBER, INC. a Delaware corporation /s/ Mac J. Slingerlend ------------------------------------------ By: Mac J. Slingerlend Title: President/Chief Executive Officer EX-3.(II) 3 EXHIBIT 3(II) CIBER, INC. AMENDED AND RESTATED BYLAWS (Adopted August 17, 1999) Article I OFFICES The registered office of CIBER, Inc. (the "Corporation") in the State of Delaware shall be in the City of Wilmington, County of New Castle, State of Delaware. The Corporation shall have offices at such other places as the board of directors, in its discretion, may from time to time determine. Article II STOCKHOLDERS Section 1. ANNUAL MEETINGS. The annual meeting of stockholders for the election of directors and for the transaction of such other business as may properly come before the meeting shall be held on the third Tuesday of November in each year, or on such date as the board of directors shall each year fix. Each such annual meeting shall be held at such place, within or without the State of Delaware, and hour as shall be determined by the board of directors. The day, place and hour of each annual meeting shall be specified in the notice of such annual meeting. Any annual meeting of stockholders may be adjourned from time to time and place to place until its business is completed. Section 2. BUSINESS CONDUCTED AT MEETINGS. At an annual meeting of stockholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business must be (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the board of directors, (b) otherwise properly brought before the meeting by or at the direction of the board of directors, or (c) otherwise properly brought before the meeting by a stockholder. For business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the secretary of the Corporation. To be timely, a stockholder's notice must be delivered to or mailed and received at the principal executive offices of the Corporation, not less than ninety days prior to the anniversary date of the immediately preceding annual meeting. A stockholder's notice to the secretary shall set forth as to each matter the stockholder proposes to bring before the annual meeting (a) a brief description of the business desired to be brought before the annual meeting, (b) the name and address, as they appear on the Corporation's books, of the stockholder proposing such business, (c) the class and number of shares of the Corporation which are beneficially owned by the stockholder, and (d) any material interest of the stockholder in such business. Notwithstanding anything in the Bylaws to the contrary, no business shall be conducted at an annual meeting except in accordance with the procedures set forth in this Section 2. The presiding officer at an annual meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this Section 2, and if he should so determine, he shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted. Section 3. SPECIAL MEETINGS. Except as otherwise required by law or by the Certificate of Incorporation and subject to the rights of the holders of any class or series of stock having a preference over the common stock, special meetings of stockholders may be called only by the chairman of the board, the chief executive officer, the president, the executive vice president or the board of directors pursuant to a resolution approved by a majority of the entire board of directors. The term "entire board of directors," as used in these Bylaws, means the total number of directors which the Corporation would have if there were no vacancies. Section 4. STOCKHOLDER ACTION: HOW TAKEN. Any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of such stockholders and may be effected without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by stockholders holding not less than two-thirds of the voting power of the outstanding stock entitled to vote. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. Section 5. NOTICE OF MEETING. Written notice stating the place, date and hour of the meeting and, in case of a special meeting, the purpose or purposes for which the meeting is called, shall be given not less than ten nor more than sixty days before the date of the meeting, except as otherwise required by statute or the Certificate of Incorporation, either personally or by mail, prepaid telegram, telex, facsimile transmission, cablegram, or radiogram, to each stockholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail, postage prepaid, addressed to the stockholder at his address as it appears on the stock records of the Corporation. If given personally or otherwise than by mail, such notice shall be deemed to be given when either handed to the stockholder or delivered to the stockholder's address as it appears on the stock records of the Corporation. 2 Section 6. WAIVER. Attendance of a stockholder of the Corporation, either in person or by proxy, at any meeting, whether annual or special, shall constitute a waiver of notice of such meeting, except where a stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. A written waiver of notice of any such meeting signed by a stockholder or stockholders entitled to such notice, whether before, at or after the time for notice or the time of the meeting, shall be equivalent to notice. Neither the business to be transacted at, nor the purposes of, any meeting need be specified in any written waiver of notice. Section 7. VOTING LIST. The secretary shall prepare and make available, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order and showing the address and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting or, if not so specified, at the place where the meeting is to be held. The list shall be produced and kept at the place of the meeting during the whole time thereof and may be inspected by any stockholder who is present. Section 8. QUORUM. Except as otherwise required by law, the Certificate of Incorporation or these Bylaws, the holders of not less than one-third of the shares entitled to vote at any meeting of the stockholders, present in person or by proxy, shall constitute a quorum, and the act of the majority of such quorum shall be deemed the act of the stockholders. If a quorum shall fail to attend any meeting, the chairman of the meeting may adjourn the meeting from time to time, without notice if the time and place are announced at the meeting, until a quorum shall be present. At such adjourned meeting at which a quorum is present, any business may be transacted which might have been transacted at the original meeting. If the adjournment is for more than thirty days or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If a notice of any adjourned special meeting of stockholders is sent to all stockholders entitled to vote thereat, stating that it will be held with those present constituting a quorum, then, notwithstanding the prior paragraph and except as otherwise required by law, those present at such adjourned meeting shall constitute a quorum, and all matters shall be determined by a majority of votes cast at such meeting. 3 Section 9. RECORD DATE. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting, or at any adjournment of a meeting of stockholders; or entitled to receive payment of any dividend or other distribution or allotment of any rights; or entitled to exercise any rights in respect of any change, conversion, or exchange of stock; or for the purpose of any other lawful action; the board of directors may fix, in advance, a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors. The record date for determining the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournments thereof shall not be more than sixty nor less than ten days before the date of such meeting. The record date for any other action shall not be more than sixty days prior to such action. If no record date is fixed, (i) the record date for determining stockholders entitled to notice of or to vote at any meeting shall be the close of business on the day next preceding the day on which notice is given or, if notice is waived by all stockholders, at the close of business on the day next preceding the day on which the meeting is held; and (ii) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the board of directors adopts the resolution relating to such other purpose. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting. Section 10. PROCEDURE. The order of business and all other matters of procedure at every meeting of the stockholders may be determined by the presiding officer. Article III DIRECTORS Section 1. NUMBER. Except as otherwise fixed pursuant to the provisions of the Certificate of Incorporation, including Article 4 relating to the rights of the holders of any class or series of stock having a preference over the common stock, the number of directors shall be fixed from time to time exclusively by resolutions adopted by the board of directors; provided, however, that the number of directors shall at no time be less than three nor greater than eleven and further provided that no decrease in the number of directors constituting the board of directors shall shorten the term of any incumbent director. 4 Section 2. ELECTION AND TERMS. The directors shall be divided into three classes as determined by the board of directors, designated as Class I, Class II and Class III. Each class shall consist, as nearly as may be possible, of one-third of the total number of directors constituting the entire board of directors. At the next annual meeting of stockholders, Class I directors shall be elected for a one-year term, Class II directors shall be elected for a two-year term and Class m directors for a three-year term. At each succeeding annual meeting of stockholders thereafter, successors to the class of directors whose terms expire at that annual meeting shall be elected for a three-year term. If the number of directors has changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible, but in no case will a decrease in the number of directors shorten the term of any incumbent director. A director shall hold office until the annual meeting for the year in which his term expires and until his successor shall be elected and qualified, subject, however, to such director's prior death, resignation, retirement, disqualification or removal from office. Subject to the rights of holders of any class or series of stock having a preference over the common stock, nominations for the election of directors may be made by the board of directors or a committee appointed by the board of directors or by any stockholder entitled to vote in the election of directors generally. However, any stockholder entitled to vote in the election of directors generally may nominate one or more persons for election as directors at a meeting only if written notice of such stockholder's intent to make such nomination or nominations has been given, either by personal delivery or by United States mail, postage prepaid, to the secretary of the Corporation no later than (i) with respect to an election to be held at an annual meeting of stockholders, ninety days prior to the anniversary date of the immediately preceding annual meeting, and (ii) with respect to an election to be held at a special meeting of stockholders for the election of directors, the close of business on the tenth day following the date on which notice of such meeting is first given to stockholders. Each such notice shall set forth: (a) the name and address of the stockholder who intends to make the nomination and of the person or persons to be nominated; (b) representation that the stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (c) a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder; (d) such other information regarding each nominee proposed by such stockholder as would be required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission; and (e) the consent of each nominee to serve as a director of the Corporation if so elected. The presiding officer of the meeting may refuse to acknowledge the nomination of any person not made in compliance with the foregoing procedure. Section 3. NEWLY CREATED DIRECTORSHIPS AND VACANCIES. Except as otherwise fixed pursuant to the provisions of Certificate of Incorporation, including Article 4 relating to the rights of the holders of any class or series of stock having a preference over 5 the common stock, newly created directorships resulting from any increase in the number of directors and any vacancies on the board of directors resulting from death, resignation, disqualification, removal or other cause shall be filled solely by the affirmative vote of a majority of the remaining directors then in office or a sole remaining director, even though less than a quorum of the board of directors. Any director elected in accordance with the preceding sentence shall hold office for the remainder of the full term of the new directorship which was created or in which the vacancy occurred and until such director's successor shall have been elected and qualified. Section 4. REGULAR MEETINGS. The first meeting of each newly elected board of directors elected at the annual meeting of stockholders shall be held immediately after and at the same place as, the annual meeting of the stockholders, provided a quorum is present, and no notice of such meeting shall be necessary in order to legally constitute the meeting. Regular meetings of the board of directors shall be held at such times and places as the board of directors may from time to time determine. Section 5. SPECIAL MEETINGS. Special meetings of the board of directors may be called at any time, at any place and for any purpose by the chairman of the executive committee, the chairman of the board, the chief executive officer, or by any officer of the Corporation upon the request of a majority of the entire board of directors. Section 6. NOTICE OF MEETINGS. Notice of regular meetings of the board of directors need not be given. Notice of every special meeting of the board of directors shall be given to each director at his usual place of business or at such other address as shall have been furnished by him for such purpose. Such notice shall be properly and timely given if it is (a) deposited in the United States mail not later than the third calendar day preceding the date of the meeting or (b) personally delivered, telegraphed, sent by facsimile transmission or communicated by telephone at least twenty-four hours before the time of the meeting. Such notice need not include a statement of the business to be transacted at, or the purpose of, any such meeting. Section 7. WAIVER. Attendance of a director at a meeting of the board of directors shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. A written waiver of notice signed by a director or directors entitled to such notice, whether before, at, or after the time for notice or the time of the meeting, shall be equivalent to the giving of such notice. 6 Section 8. QUORUM. Except as may be otherwise provided by law, in the Certificate of Incorporation, or in these Bylaws, the presence of a majority of the entire board of directors shall be necessary and sufficient to constitute a quorum for the transaction of business at any meeting of the board of directors, and the act of a majority of the directors present at a meeting at which a quorum is present shall be deemed the act of the board of directors. Less than a quorum may adjourn any meeting of the board of directors from time to time without notice. Section 9. PARTICIPATION IN MEETINGS BY TELEPHONE. Members of the board of directors, or of any committee thereof, may participate in a meeting of such board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other and such participation shall constitute presence in person at such meeting. Section 10. POWERS. The business, property and affairs of the Corporation shall be managed by or under the direction of its board of directors, which shall have and may exercise all the powers of the Corporation to do all such lawful acts and things as are not by law, by the Certificate of Incorporation, or by these Bylaws, directed or required to be exercised or done by the stockholders. Section 11. COMPENSATION OF DIRECTORS. Directors shall receive such compensation for their services as shall be determined by a majority of the entire board of directors, provided that directors who are serving the Corporation as officers or employees and who receive compensation for their services as such officers or employees shall not receive any salary or other compensation for their services as directors. Section 12. ACTION WITHOUT A MEETING. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the board of directors or any committee thereof may be taken without a meeting if written consent thereto is signed by all members of the board of directors or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the board or committee. Any such consent may be in counterparts and shall be effective on the date of the last signature thereon unless otherwise provided therein. 7 Article IV COMMITTEES Section 1. DESIGNATION OF COMMITTEES. The board of directors may establish committees for the performance of delegated or designated functions to the extent permitted by law, each committee to consist of one or more directors of the Corporation. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of such absent or disqualified member. Section 2. COMMITTEE POWERS AND AUTHORITY. The board of directors may provide, by resolution or by amendment to these Bylaws, that a committee may exercise all the power and authority of the board of directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; provided, however, that a committee may not exercise the power or authority of the board of directors in reference to amending the Certificate of Incorporation (except that a committee may, to the extent authorized in the resolution or resolutions providing for the issuance of shares of stock adopted by the board of directors, pursuant to Article 4 of the Certificate of Incorporation, fix the designations and any of the preferences or rights of shares of preferred stock relating to dividends, redemption, dissolution, any distribution of property or assets of the Corporation, or the conversion into, or the exchange of shares for, shares of any other class or classes or any other series of the same or any other class or classes of stock of the Corporation or fix the number of shares of any series of stock or authorize the increase or decrease of the shares of any series), adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease, or exchange of all or substantially all of the Corporation's property and assets, recommending to the stockholders a dissolution of the Corporation or a revocation of a dissolution, or amending these Bylaws; and, unless the resolution expressly so provides, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock. Section 3. COMMITTEE PROCEDURES. To the extent the board of directors or the committee does not establish other procedures for the committee, each committee shall be governed by the procedures established in Article III, Section 4 (except as they relate to an annual meeting of the board of directors) and Article III, Sections 5, 6, 7, 9, 10, and 12 of these Bylaws, as if the committee were the board of directors. 8 Article V OFFICERS Section 1. GENERAL. The Corporation shall have as officers a chief executive officer, a president, a chief operating officer, such number of executive vice presidents as the board of directors may from time to time determine, a secretary, and a chief financial officer/treasurer, who shall be appointed by the board of directors. The board of directors may appoint as additional officers a chairman and other officers of the board. The board of directors, the chief executive officer, and such other subordinate officers as the board of directors may authorize from time to time, acting singly, may appoint as additional officers one or more vice presidents, assistant secretaries, assistant treasurers, and such other subordinate officers as the board of directors, the chief executive officer, or such other appointing officers deem necessary or appropriate; provided, however, that the board of directors may reject or modify any appointment made by the chief executive officer or other appointing officers. Section 2. TERM OF OFFICE, RESIGNATION. All officers, agents and employees of the Corporation shall hold their respective offices or positions at the pleasure of the board of directors and may be removed at any time by the board of directors with or without cause. Any officer appointed by the chief executive officer or other appointing officer may also be removed at any time by the person appointing the officer with or without cause. Any officer may resign at any time by giving written notice of his resignation to the board of directors, the chief executive officer, the secretary, or to the officer who appointed the officer, and acceptance of such resignation shall not be necessary to make it effective unless the notice so provides. Any vacancy occurring in any office appointed by the board of directors shall be filled by the board of directors. Any vacancy occurring in any office appointed by the chief executive officer or other appointing officer shall be filled by the person appointing the officer. Section 3. DUTIES. The officers of the Corporation shall perform the duties and exercise the powers as may be assigned to them from time to time by the board of directors, the chief executive officer or, with respect to officers who are appointed by other appointing officers, by the persons appointing them; provided, however, that the board of directors may change the duties and powers of any officer appointed by the chief executive officer or other appointing officers. In the absence of such assignment, the officers shall have the duties and powers described in Sections 5 through 10 of this Article V. 9 Section 4. CHAIRMAN OF THE BOARD. The chairman of the board shall preside at all meetings of the stockholders and directors at which the chairman may be present and shall have such other duties, powers and authority as may be prescribed elsewhere in these Bylaws. The board of directors may delegate such other authority and assign such additional duties to the chairman of the board, other than those conferred by law exclusively upon the chief executive officer, as it may from time to time determine. Section 5. CHIEF EXECUTIVE OFFICER. The chief executive officer shall be the chief executive officer of the Corporation and, subject to the direction and control of the board of directors, shall manage the business of the Corporation. The chief executive officer shall preside at all meetings of the stockholders and directors at which such officer may be present unless the board of directors has appointed a chairman, vice chairman, or other officer of the board to preside at such meetings. The chief executive officer may execute contracts, deeds and other instruments on behalf of the Corporation and shall have full authority on behalf of the Corporation to attend any meeting, give any waiver, cast any vote, grant any discretionary or directed proxy to any person, and exercise any other rights of ownership with respect to any shares of capital stock or other securities held by the Corporation and issued by any other corporation or with respect to any partnership, trust or similar interest held by the Corporation. Section 6. PRESIDENT. The president, if any, shall be the officer next in rank after the chief executive officer. The president shall have such authority, power, and duties as are prescribed by the board of directors or the chief executive officer and shall report to the chief executive officer. Upon the death, absence, or disability of the chief executive officer, the president, if any, shall have the authority, power, and duties of the chief executive officer. The president may execute contracts, deeds and other instruments on behalf of the Corporation. In the absence of the chief executive officer or in the event of his disability, inability or refusal to act, the president shall perform the duties and exercise the power of the chief executive officer. The president shall have full authority on behalf of the Corporation to attend any meeting, give any waiver, cast any vote, grant any discretionary or directed proxy to any person, and exercise any other rights of ownership with respect to any shares of capital stock or other securities held by the Corporation and issued by any other corporation or with respect to any partnership, trust or similar interest held by the Corporation. Section 7. CHIEF OPERATING OFFICER. The chief operating officer shall have such authority, power, and duties as are prescribed by the board of directors or the chief executive officer. The chief operating officer shall be the chief operating officer of the Corporation and shall report to the chief executive officer. The president may execute contracts, deeds and other instruments on behalf of the Corporation. The president shall have full authority on behalf of the Corporation to attend any meeting, give any waiver, cast any vote, 10 grant any discretionary or directed proxy to any person, and exercise any other rights of ownership with respect to any shares of capital stock or other securities held by the Corporation and issued by any other corporation or with respect to any partnership, trust or similar interest held by the Corporation. Section 8. EXECUTIVE VICE PRESIDENT. Each executive vice president, if any, shall perform such functions as may be prescribed by the board of directors, the chairman of the board and chief executive officer or the president and chief operating officer. Each executive vice president may execute contracts, deeds and other instruments on behalf of the Corporation. Each executive vice president shall have full authority on behalf of the Corporation to attend any meeting, give any waiver, cast any vote, grant any discretionary or directed proxy to any person, and exercise any other rights of ownership with respect to any shares of capital stock or other securities held by the Corporation and issued by any other corporation or with respect to any partnership, trust or similar interest held by the Corporation. Upon the death, disability or absence of the chief operating officer, the executive vice president (or if more than one holds office, the executive vice president among those present who has held such office for the longest continuous period, unless another method of selection has been established by resolution of the board of directors) shall perform the duties and exercise the powers of the president and chief executive officer. Each executive vice president shall perform such other duties as the board, the chairman of the board and chief executive officer or the president and chief operating officer may from time to time prescribe or delegate to him. Section 9. VICE PRESIDENT. Each vice president, if any, shall perform such functions as may be prescribed by the board of directors, the chairman of the board and the chief executive officer, the president and chief operating officer, or any executive vice president. Each vice president may execute contracts, deeds and other instruments on behalf of the Corporation. The vice president shall have full authority on behalf of the Corporation to attend any meeting, give any waiver, cast any vote, grant any discretionary or directed proxy to any person, and exercise any other rights of ownership with respect to any shares of capital stock or other securities held by the Corporation and issued by any other corporation or with respect to any partnership, trust or similar interest held by the Corporation. Upon the death, disability or absence of the executive vice president, the vice president (or if more than one holds office, the vice president among those present who has held such office for the longest continuous period, unless another method of selection has been established by resolution of the board of directors) shall perform the duties and exercise the powers of the executive vice president. Each vice president shall perform such other duties as the board, the chairman of the board and chief executive officer, the president and chief operating officer, or any executive vice president may from time to time prescribe or delegate to him. Section 10. SECRETARY. 11 The secretary shall give, or cause to be given, notice of all meetings of the stockholders and, upon the request of a person entitled to call a special meeting of the board of directors, he shall give notice of any such special meeting. He shall keep the minutes of all meetings of the stockholders, the board of directors, or any committee established by the board of directors. The secretary shall be responsible for the maintenance of all records of the Corporation and may attest documents on behalf of the Corporation. The secretary shall perform such other duties as the board, the chairman of the board and chief executive officer, the president and chief operating officer or any vice president may from time to time prescribe or delegate to him. Section 11. CHIEF FINANCIAL OFFICER AND TREASURER. The chief financial officer shall also be the treasurer of the Corporation and shall be responsible for the control of the funds of the Corporation and the custody of all securities owned by the Corporation. The treasurer shall perform such other duties as the board, the chairman of the board and chief executive officer, the president and chief operating officer may from time to time prescribe or delegate to him. Section 12. COMPENSATION. Officers shall receive such compensation, if any, for their services as may be authorized or ratified by the board of directors. Election or appointment as an officer shall not of itself create a right to compensation for services performed as such officer. Article VI INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES Section 1. DIRECTORS AND OFFICERS. Subject to the Certificate of Incorporation and the other sections of this Article VI, the Corporation shall indemnify, to the fullest extent permitted by, and in the manner permissible under, the laws of the State of Delaware in effect on the date hereof and as amended from time to time, any person who was or is threatened to be made, a party to any threatened, pending or completed action, suit, or proceeding, whether criminal, civil, administrative, or investigative, by reason of the fact that he, is or was a director or officer of the Corporation, or, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, association, or other enterprise, against expenses (including attorneys' fees), judgments, fines, ERISA excise taxes or penalties, and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding, including any action, suit or proceeding by or in the right of the Corporation (a "Proceeding"). The Corporation shall advance all reasonable expenses incurred by or on behalf of any such person in connection with any Proceeding within ten days after the receipt by the Corporation of a statement or statements from such person requesting such advance or advances from time to time, whether prior to or after final disposition of 12 such Proceeding. Such statement or statements shall reasonably evidence the expenses incurred by such person and, if such person is an officer or director of the Corporation, shall include or be preceded or accompanied by an undertaking by or on behalf of such person to repay any expenses advanced if it shall ultimately be determined that such person is not entitled to be indemnified against such expenses. Costs, charges or expenses of investigating or defending Proceedings for which indemnity shall be sought hereunder may be incurred without the Corporation's consent; provided that no settlement of any such Proceeding may be made without the Corporation's consent, which consent shall not be unreasonably withheld. Section 2. DETERMINATION OF RIGHT TO INDEMNIFICATION. (a) Any indemnification requested by any person under Section 1 of this Article VI shall be made no later than forty-five (45) days after receipt of the written request of such person, unless a determination is made within said forty-five (45) day period (i) by a majority vote of directors who are not parties to such Proceedings, or (ii) in the event a quorum of non-involved directors is not obtainable, at the election of the Corporation, by independent legal counsel in a written opinion, that such person is not entitled to indemnification hereunder. (b) Notwithstanding a determination under Section 2(a) above that any person is not entitled to indemnification with respect to a Proceeding, such person shall have the right to apply to any court of competent jurisdiction for the purpose of enforcing such person's right to indemnification pursuant to these Bylaws. Neither the failure of the Corporation (including its board of directors or independent legal counsel) to have made a determination prior to the commencement of such action that such person is entitled to indemnification hereunder, nor an actual determination by the Corporation (including its board of directors or independent legal counsel) that such person is not entitled to indemnification hereunder, shall be a defense to the action or create any presumption that such person is not entitled to indemnification hereunder. (c) The Corporation shall indemnify any person against all expenses incurred in connection with any hearing or Proceeding under this Section 2 if such person prevails on the merits or otherwise in such Proceeding. Section 3. SUBROGATION. In the event of payment under these Bylaws, the indemnifying party or parties shall be subrogated to the extent of such payment to all of the rights of recovery of the indemnified person therefor, and such indemnified person shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the indemnifying party or parties to effectively bring suit to enforce such rights. Section 4. PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS. 13 (a) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that such person is entitled to indemnification under this Article, and the Corporation shall have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. (b) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in these Bylaws) of itself adversely affect the right of any person to indemnification or create a presumption that such person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation or, with respect to any criminal Proceeding, that such person had reasonable cause to believe that his conduct was unlawful. Section 5. EXCEPTION TO RIGHT OF INDEMNIFICATION OR ADVANCEMENT OF EXPENSES. Notwithstanding any other provision of these Bylaws, no person shall be entitled to indemnification or advancement of expenses under these Bylaws with respect to any Proceeding brought by such person, unless the bringing of such Proceeding or making of such claim shall have been approved by the board of directors. Section 6. CONTRACT. The foregoing provisions of this Article VI shall be deemed to be a contract between the Corporation and each director and officer who serves in such capacity at any time while this bylaw is in effect, and any repeal or modification thereof shall not affect any rights or obligations then existing with respect to any state of facts then or theretofore existing or any Proceeding theretofore or thereafter brought based in whole or in part upon any such state of facts. The foregoing rights of indemnification shall not be deemed exclusive of any other rights to which any director or officer may be entitled apart from the provisions of this Article VI. Section 7. SURVIVING CORPORATION. The board of directors may provide by resolution that references to "the Corporation" in this Article VI shall include, in addition to this Corporation, all constituent corporations absorbed in a merger with this Corporation so that any person who was a director or officer of such a constituent corporation or is or was serving at the request of such constituent corporation as a director, employee, or agent of another corporation, partnership, joint venture, trust, association, or other entity shall stand in the same position under the provisions of this Article VI with respect to this Corporation as he would if he had served this Corporation in the same capacity or is or was so serving such other entity at the request of this Corporation, as the case may be. 14 Section 8. INUREMENT. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VI shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors, and administrators of such person. Section 9. EMPLOYEES AND AGENTS. To the same extent as it may do for a director or officer, the Corporation may indemnify and advance expenses to a person who is not and was not a director or officer of the Corporation but who is or was an employee or agent of the Corporation. Article VII CAPITAL STOCK Section 1. CERTIFICATES. Each stockholder of the Corporation shall be entitled to a certificate or certificates signed by or in the name of the Corporation by the chairman of the board and chief executive officer, the president or a vice president, and by the treasurer, an assistant treasurer, the secretary or an assistant secretary, certifying the number of shares of stock of the Corporation owned by such stockholder. Any or all the signatures on the certificate may be a facsimile. Section 2. FACSIMILE SIGNATURES. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he, she or it was such officer, transfer agent or registrar at the date of issue. Section 3. REGISTERED STOCKHOLDERS. The Corporation shall be entitled to treat the holder of record of any share or shares of stock of the Corporation as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it has actual or other notice thereof, except as provided by law. Section 4. CANCELLATION OF CERTIFICATES. All certificates surrendered to the Corporation shall be cancelled and, except in the case of lost, stolen or destroyed certificates, no new certificates shall be issued until the former certificate or 15 certificates for the same number of shares of the same class of stock have been surrendered and cancelled. Section 5. LOST, STOLEN OR DESTROYED CERTIFICATES. The board of directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate or certificates to be lost, stolen or destroyed. In its discretion, and as a condition precedent to the issuance of any such new certificate or certificates, the board of directors may require that the owner of such lost, stolen or destroyed certificate or certificates, or such person's legal representative, give the Corporation and its transfer agent or agents, registrar or registrars a bond in such form and amount as the board of directors may direct as indemnity against any claim that may be made against the Corporation and its transfer agent or agents, registrar or registrars on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate. Section 6. TRANSFER OF SHARES. Shares of stock shall be transferable on the books of the Corporation by the holder thereof, in person or by duly authorized attorney, upon the surrender of the certificate or certificates representing the shares to be transferred, properly endorsed, with such proof or guarantee of the authenticity of the signature as the Corporation or its agents may reasonably require. Section 7. TRANSFER AGENTS AND REGISTRARS. The Corporation may have one or more transfer agents and one or more registrars of its stock, whose respective duties the board of directors may, from time to time, define. No certificate of stock shall be valid until countersigned by a transfer agent, if the Corporation shall have a transfer agent, or until registered by the registrar, if the Corporation shall have a registrar. The duties of transfer agent and registrar may be combined. Article VIII SEAL The board of directors may adopt and provide a seal which shall be circular in form and shall bear the name of the Corporation and the words "Seal" and "Delaware," and which, when adopted shall constitute the corporate seal of the Corporation. Article IX FISCAL YEAR 16 The fiscal year for the Corporation shall close on the 30th of June of each year. Article X AMENDMENTS Subject to the provisions of the Certificate of Incorporation, these Amended and Restated Bylaws may be altered, amended or repealed at any regular meeting of the stockholders (or at any special meeting thereof duly called for that purpose) by a majority vote of the shares represented and entitled to vote at such meeting; provided that in the notice of such special meeting, notice of such purpose shall be given. Subject to the laws of the State of Delaware, the Certificate of Incorporation and these Amended and Restated Bylaws, the board of directors may, by majority vote of those present at any meeting at which a quorum is present, amend these Amended and Restated Bylaws, or enact such other Bylaws as in their judgment may be advisable for the regulation of the conduct of the affairs of the Corporation. /s/ Mac J. Slingerlend -------------------------------- Mac J. Slingerlend, Secretary 17 EX-10.1 4 EXHIBIT 10.1 UNSECURED CREDIT AGREEMENT between CIBER, INC. and UMB BANK COLORADO Dated as of November 1, 1999 UNSECURED CREDIT AGREEMENT THIS AGREEMENT, dated as of the 1st day of November, 1999 is made by and between CIBER, Inc., a Delaware corporation (the "Borrower") and UMB Bank Colorado, a Colorado banking corporation ("UMB"). WHEREAS, the Borrower has requested an aggregate credit facility of up to $50,000,000 through July 1, 2000, reducing to $35,000,000 through January 31, 2001, in revolving loans under this Unsecured Credit Agreement for working capital purposes and acquisitions; and WHEREAS, UMB is willing to extend such credit facility to the Borrower on the terms and conditions hereinafter set forth. NOW, THEREFORE, in consideration of the premises and the mutual promises herein contained, the parties mutually agree as follows: 1. DEFINITIONS. 1.1 ACCOUNTING TERMS. All accounting and financial terms used herein are used with the meanings such terms are given in accordance with generally accepted accounting principles, except as may be otherwise specifically provided in this Agreement. 1.2 DEFINED TERMS. "AGREEMENT" means this Unsecured Credit Agreement, as amended from time to time. "AUTHORIZED OFFICER" means Mac J. Slingerlend, or such other officer or employee of the Borrower whose authority to perform acts to be performed only by an Authorized Officer under this Agreement is evidenced to UMB by a certified copy of an appropriate resolution of the Board of Directors of the Borrower. "BUSINESS DAY" means any day other than a Saturday or Sunday on which UMB is not authorized or required to close. "CONSOLIDATED NET OPERATING INCOME" means the net operating income of the Borrower and its Subsidiaries as shown on its annual audited consolidated financial statements or on its interim unaudited consolidated financial statements, all as prepared on a consistent basis in accordance with generally accepted accounting principles; provided that, for purposes of calculating Consolidated Net Operating Income for any period, (I) any Person which was not a Consolidated Subsidiary at the beginning of such period but was a Consolidated Subsidiary at the end of such period shall be deemed to have been a Consolidated Subsidiary for the entire period and (II) any person which was a Consolidated Subsidiary at the beginning of such period but was not a Consolidated Subsidiary at the end of such period shall be deemed to have not been a Consolidated Subsidiary for the entire period. "CONSOLIDATED SUBSIDIARY" means at any date any Subsidiary or other entity the accounts of which would be consolidated with those of the Borrower in its consolidated financial statements as of such date. "DEBT" of any Person means at any date, without duplication, all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments "DEBT SERVICE COVERAGE RATIO" means, as of the end of each calendar quarter, the ratio of (i) Consolidated Net Operating Income plus amortization allowances for the calendar 2 quarter of the Borrower and its Subsidiaries then most recently ended multiplied by four (4) to (ii) the total of all current maturities of long-term Debt of the Borrower and its Subsidiaries. "GOVERNMENTAL AUTHORITY" means any nation or government, any state or other political subdivision thereof, and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including, without limitation, any agency, body, commission, court or department thereof, whether federal, state, local or foreign. "LIBOR RATE" means the 30, 60 or 90 day LIBOR as published from time to time in the western edition of The Wall Street Journal, if such rate is available. "LIEN" means, with respect to any asset, any lien, charge, mortgage, security interest, pledge or other encumbrance of any kind in respect to such asset or any preferential arrangement with respect to such asset, excluding the interest of a vendor or lessor under any conditional sale agreement, purchase money security agreement, capital lease or other title retention agreement relating to such asset. "LOAN DOCUMENTS" means this Agreement, the Notes and any other documents, instruments or writings now or hereafter executed and delivered by or on behalf of the Borrower to UMB to further evidence or govern the Loans. "LOAN" and "LOANS" means advances pursuant to the Revolving Credit. "NOTES" OR "NOTES" means the Revolving Credit Notes, as the context may require. "PERSON" means and includes an individual, a partnership, a joint venture, a corporation, a limited liability company, a trust, an unincorporated organization and a Governmental Authority. 3 "SUBSIDIARY" shall mean any corporation or other entity of which capital stock or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions is at the time directly or indirectly owned by the Borrower. For purposes hereof, "control" means the possession, directly or indirectly, of the power to direct or cause the direction of management and policies of corporations, partnerships or other business entities in which a direct or indirect ownership interest exists, whether through the ownership of voting securities, by contract or otherwise. 1.3 SINGULAR AND PLURAL. The foregoing definitions shall be equally applicable to both the singular and plural forms of the defined terms. 2. REVOLVING CREDIT. 2.1 THE REVOLVING CREDIT. Subject to all terms and conditions hereof, UMB agrees to lend to the Borrower during the period of time beginning on the date hereof and ending on December 1, 2000, such amount or amounts as the Borrower may from time to time request to borrow up to an aggregate outstanding principal amount owing to UMB of, but not exceeding at any time, $50,000,000 through July 1, 2000, reducing to $35,000,000 through January 31, 2001 (the "Revolving Credit"). The Borrower may prepay all or any part of the outstanding obligations hereunder at any time on one (1) business day's prior notice and without penalty on a FIFO basis. Any prepayment of the outstanding amount of all Loans under the Revolving Credit shall include accrued interest thereon. Upon any payment prior to January 31, 2001 of Loans under the Revolving Credit, UMB agrees to lend to the Borrower from time to time during the period beginning upon the date of this Agreement and ending on January 31, 2001, an aggregate principal amount not to exceed the difference between (i) the then outstanding aggregate principal amount of the Borrower's 4 aggregate indebtedness under the Revolving Credit, and (ii) the amount of the Revolving Credit; provided, however, that UMB shall have no obligation to make any such Loan if an Event of Default has occurred and is then continuing, regardless of whether any required notice has been given. At the time of execution hereof, an Authorized Officer of the Borrower shall execute promissory note in the form of Exhibit A attached hereto and incorporated herein by reference (the "Revolving Credit Note" which shall include all extensions and renewals thereof and replacements therefor, if any). The Revolving Credit Note shall be due and payable to UMB in full on January 31, 2001. As the Borrower desires to obtain Loans pursuant to the Revolving Credit hereunder, it shall verbally give UMB notice of the Borrower's intention to borrow pursuant to the Revolving Credit as early as possible on or before the proposed date of borrowing. UMB may conclusively rely on any such verbal request which shall have been received by it in good faith from a Person reasonably believed to be an Authorized Officer. Upon compliance with all conditions of lending stated in this Agreement applicable to the Revolving Credit, UMB shall disburse the amount of the requested Loan to the Borrower by causing the same to be deposited in the Borrower's main operating account at UMB, and the Borrower hereby authorizes the disbursement of borrowings under the Revolving Credit in such manner. All borrowings and payments by the Borrower under the Revolving Credit shall be recorded by UMB on its books and records and the principal amount outstanding from time to time, plus interest payable thereon, shall be determined by reference to the books and records of UMB. Such books and records shall be rebuttably presumed to be correct as to such matters. In the event of any conflict between the terms of the Revolving Credit Note executed hereunder and the terms of this Agreement, the terms of the Revolving Credit Note shall control. All Loans of the Borrower under the Revolving Credit shall be reduced to zero by January 31, 2001. 5 2.2 MANDATORY PREPAYMENT OF REVOLVING CREDIT. In the event that the maximum principal amount of Loans which is outstanding under the Revolving Credit is at any time greater than the maximum amount which is then authorized to be outstanding thereunder, the Borrower will immediately, upon written notice from UMB, pay to UMB the difference between the outstanding principal amount and the principal amount then authorized to be outstanding thereunder plus all accrued interest thereon. 3. INTEREST/FEES. 3.1 INTEREST RATE. Each Loan under the Revolving Credit and shall bear interest, on the outstanding principal amount thereof, for each day from the date such Loan is made until it becomes due, at a rate equal to the 30, 60 or 90 day LIBOR, at the Company's request at the time the advance is made, plus 200 basis points. The LIBOR shall be initially determined for all Loans under the Revolving Credit, as of the Business Day immediately preceding the initial Loan under the Revolving Credit, as the case may be, and thereafter for all loans under the Revolving Credit, such rate so determined to be fixed for the 30, 60 of 90 day period. Interest on the Revolving Credit Note shall be payable monthly on the first (1st) business day of each calendar month. 3.2 CALCULATION OF INTEREST. Interest shall be computed on the basis of days elapsed and assuming a 360-day year. 3.3 CREDIT COMMITMENT FEE. The Borrower shall pay to UMB commencing on December 31, 1999, and continuing on the last day of each March, June, September and December thereafter, so long as the Revolving Credit is available, a commitment fee equal to .225%, on an annualized basis, of the average daily unused portion of the first Twenty-Five Million and no/100 Dollars ($25,000,000), reducing back to the first Twenty Million and no/100 Dollars ($20,000,000) 6 on July 1, 2000, or at which time the Revolving Credit reduces back to Thirty Five Million and no/100 Dollars ($35,000,000), of the Revolving Credit during the immediately preceding three (3) month period ending March 31, June 30, September 30 or December 31 or any shorter period in the case of the first period or in the event of the full termination of the Revolving Credit (the "Commitment Fee Periods"). Effective as of the relevant payment date, the obligation to pay the commitment fee shall be an absolute obligation of the Borrower, not subject to cancellation or reduction for any reason, including, without limitation, termination, in whole or in part, of the Revolving Credit, and, once paid, the commitment fee shall be non-refundable; provided, however, to the extent the Revolving Credit is reduced or terminated, then the fee payable by the Borrower for the next succeeding Commitment Fee Periods shall be accordingly reduced. UMB is hereby authorized by the Borrower to automatically debit any of the Borrower's accounts with UMB for the payment of any commitment fee due and payable hereunder. UMB shall give notice of any such debit to the Borrower when any such debit is made. The Revolving Credit commitment fee shall be computed on the basis of days elapsed and assuming a 360-day year. 3.4 BUSINESS DAY. If any installment of principal or interest on any Loan becomes due and payable on a day other than a Business Day, the maturity of the installment of principal or interest shall be extended to the next succeeding Business Day, and interest shall be payable during such extension of maturity. 4. CONDITIONS TO MAKING LOANS. UMB's obligation to make any Loan pursuant to this Agreement shall be subject to compliance by the Borrower with all of its obligations hereunder and to the following specific conditions being met by the Borrower at the time of the making of each borrowing hereunder: 7 4.1 NO ADVERSE CHANGE IN BUSINESS. The Borrower shall not have experienced any material adverse change in the conduct of its business, operations, financial condition or otherwise since the date of this Agreement. 4.2 REPRESENTATIONS. The covenants, representations and warranties made in Sections 5, 6 and 7 shall be true and correct as of the date of each borrowing made hereunder, and an Authorized Officer of the Borrower shall certify in writing to the same; provided, however, the representations and warranties made with respect to financial statements shall be deemed to refer to the most recent financial statements furnished to UMB pursuant to Section 5.1 hereof. 4.3 REQUIRED CONSENTS AND APPROVALS. All approvals required from the Board of Directors of the Borrower for the execution of this Agreement, the borrowings contemplated hereunder and the execution of all documents to be executed hereunder have been obtained and shall be in full force and effect. 4.4 NO DEFAULTS. (1) The Borrower shall be in compliance with all of the terms and conditions hereof, and no Event of Default shall have occurred and be continuing, regardless of whether any required notice has been given; and (2) After giving effect to the requested borrowing and to each borrowing that has been made and is then unpaid, the aggregate principal amount of all outstanding Loans shall not exceed the sum of the Revolving Credit then in effect. 4.5 APPLICATION CONSTITUTES REPRESENTATION. Each verbal application by the Borrower for any borrowing shall be and constitute a representation that the representations set forth in Sections 4.1 through 4.4 hereof are true and correct. 8 5. AFFIRMATIVE COVENANTS. The Borrower covenants and agrees from the date hereof and until payment in full of all obligations incurred pursuant to this Agreement, that it shall comply with each of the following provisions: 5.1 FINANCIAL AND BUSINESS INFORMATION. The Borrower will furnish to UMB as soon as reasonably available after the end of each fiscal year, but in no event later than 120 days following the end of its fiscal year, its audited consolidated financial statements without qualification including, at a minimum, a balance sheet, statements of income and stockholders' equity and a statement of cash flows for such fiscal year, all of which shall have been reported by independent certified public accountants and which shall be in conformity with generally accepted accounting principles consistently applied. The Borrower will furnish to UMB for each calendar month as soon as reasonably available, its consolidated financial statements for the immediately preceding calendar month, all such financial statements to be certified by the Chief Financial Officer or Chief Accounting Officer of the Borrower. Such monthly financial statements shall include a balance sheet and statements of income. Notwithstanding the foregoing, in the event applicable regulations of the Securities and Exchange Commission prohibit the disclosure of monthly financial statements the Borrower shall provide UMB with quarterly financial statements in the same form as would otherwise be required for monthly financial statements no later than 45 days following the end of each calendar quarter of the Borrower. The Borrower further agrees to at all times keep accurate and complete records of its financial condition and of its assets, and it agrees that it will furnish to UMB, at the Borrower's expense, from time to time such other and further information regarding its and its Subsidiaries' financial condition as UMB may reasonably request, including upon such request by UMB, an opportunity or opportunities for employees or representatives of UMB to inspect, audit, 9 check, examine and copy books and records of the Borrower and its Subsidiaries and meet with representatives of the Borrower to discuss the business and financial condition of the Borrower and its Subsidiaries. Within 30 days after he end of each calendar month, the Borrower will furnish to UMB a certificate of the Chief Financial Officer or the Chief Accounting Officer of the Borrower in the form of Exhibit B attached hereto (i) setting forth in reasonable detail the calculations required to establish whether the Borrower was in compliance with the requirements of Sections 5.5, 5.6 and 5.7 on the date of such financial statements and (ii) stating, to the best of his or her knowledge and belief after due inquiry and review of the Borrower's books and records, whether there exists on the date of such certificate any Event of Default, regardless of whether any required notice has been given, and, if any Event of Default exists, setting forth the details thereof and the action which the Borrower is taking or proposes to take with respect thereto. 5.2 CORPORATE EXISTENCE AND MAINTENANCE OF PROPERTY. Subject to the terms of Section 6.1 of this Agreement, the Borrower will, and will cause its Subsidiaries to, do or cause to be done all things necessary or appropriate to preserve and keep in full force and effect and in good standing its and their corporate existence, its and their authority to continue to do business and conduct its and their operations and its and their rights and franchises now or hereafter possessed. Subject to the terms of Section 6.1 of this Agreement, the Borrower will, and will cause its Subsidiaries to, preserve and maintain its and their property and assets used or useful in the conduct of its and their business and cause the same to be kept in good repair, working order and condition. 5.3 TAXES, CHARGES AND CLAIMS. The Borrower will, and will cause its Subsidiaries to, pay and discharge all taxes, assessments, governmental charges or levies invoked upon it or them or its or their income or profits or its or their property or assets and all indebtedness payable by it or 10 them before the same shall be deemed in default, as well as all lawful claims for labor, materials and supplies which, if unpaid, might become a lien or charge upon such property or assets or any part thereof, provided, however, that the Borrower and its Subsidiaries shall not be required to pay and discharge any such tax, assessment, charge, levy, claim or indebtedness so long as the validity thereof shall be contested in good faith by an appropriate proceeding, and the Borrower or any of its Subsidiaries, as the case may be, shall have set aside on its books adequate reserves to cover the contested item. 5.4 LOCATION OF RECORDS. The location of the Borrower's books and records and the books and records of each of its Subsidiaries shall not be changed by the Borrower or any of its Subsidiaries without giving written notice of the address of the new location to UMB at least 30 days prior to such a change. 5.5 LEVERAGE RATIO. At all times while any Loans are outstanding under the Revolving Credit and/or the Term Credit hereunder, at all times prior to January 31, 2001, and until all obligations of the Borrower hereunder are paid in full the Borrower will maintain a ratio of total consolidated liabilities to consolidated net worth of not more than 1.5 to 1. 5.6 NET WORTH. At all times while any Loans are outstanding under the Revolving Credit hereunder, at all times prior to January 31, 2001, and until all obligations of the Borrower hereunder are paid in full the Borrower will maintain a consolidated net worth of not less than $90,000,000. 5.7 DEBT SERVICE COVERAGE RATIO. At all times while any Loans are outstanding under the Revolving Credit hereunder, at all times prior to January 31, 2001, and until all obligations 11 of the Borrower hereunder are paid in full, the Borrower will maintain a debt service coverage ratio of at least 1.5 to 1.0. 5.8 BANKING ACCOUNTS. The Borrower shall maintain all of its primary deposit accounts with UMB or any of its affiliates. UMB or its affiliates, as the case may be, will in accordance with its or their Account Analysis procedures give credit to the Borrower and its Subsidiaries for their account balances, to the extent thereof, against charges for banking services provided to the Borrower and its Subsidiaries; provided, however, to the extent such account balances are insufficient to generate sufficient credits during any calendar quarter to offset all charges for banking services provided during such quarter the Borrower agrees to pay to UMB or its affiliates, as the case may be, upon notice thereof the difference between the total charges for banking services during such quarter and the amount of account balance credits applied thereto. 6. NEGATIVE COVENANTS. The Borrower covenants and agrees from the date hereof until payment in full of all obligations incurred pursuant to this Agreement, that the Borrower shall comply with each of the following provisions: 6.1 CONSOLIDATIONS, MERGERS AND SALES OF ASSETS. The Borrower will not (i) consolidate or merge with or into any other Person unless the Borrower is the surviving corporation and immediately after and giving effect thereto no Event of Default, regardless of whether any required notice has been given, shall have occurred and be continuing or (ii) sell, lease or otherwise transfer all or substantially all of its Properties to any other Person. The Borrower will not permit any Subsidiary to consolidate with, merge with or into or transfer all or substantially all of its Properties to any Person other than the Borrower or a wholly-owned Consolidated Subsidiary. The Borrower will not, and will not permit any Subsidiary to, sell, lease or otherwise transfer any 12 substantial part of its Properties to any other Person (except, in the case of a Subsidiary, to the Borrower or a wholly-owned Consolidated Subsidiary) except for cash in an amount not less than the fair market value thereof. 6.2 LIMITATION ON DIVIDENDS. So long as no Event of Default or a Default has occurred and is then continuing, regardless of whether any required notice has been given, the Borrower may declare and pay dividends on shares of its outstanding common stock. 6.3 LOANS AND GUARANTEES. The Borrower will not make any loans or advances to any Person other than its Subsidiaries and Joint Ventures which in the aggregate at any time exceed $500,000. The Borrower will not, nor will it permit any of its Subsidiaries to, guarantee the obligations of or otherwise be or become responsible for the obligations of any other Person other than a Subsidiary to the extent the aggregate outstanding amount of all such guarantees or responsibilities at any time exceeds $500,000 without the prior written consent of UMB. 6.4 NO QUARTERLY LOSSES. The Borrower shall not incur a consolidated net loss in any calendar quarter. 6.5 LIMITATION ON LIENS. The Borrower will not, nor will it permit, any Subsidiary to create, assume or suffer to exist any Lien on any property now owned or hereafter acquired by it or any Subsidiary, except for: (1) Liens in favor of UMB; (2) Liens for taxes, assessments or other governmental charges not delinquent or which the Borrower or any Subsidiary, as the case may be, is contesting, in good faith and by appropriate proceedings, and as to which it has established adequate reserves; (3) Liens to secure obligations under workman's compensation or under Social Security or similar laws or under unemployment insurance; 13 (4) Mechanics', workmen's, materialmen's, warehousemen's, carriers and other like Liens, arising in the ordinary course of business with respect to obligations (i) which are not due or (ii) which it is contesting in good faith and by appropriate proceedings, and as to which it has established adequate reserves; (5) Liens arising pursuant to any order of attachment, distraint or similar legal process arising in connection with court proceedings, so long as the execution or other enforcement thereof is effectively stayed and the claims secured thereby are being contested in good faith by appropriate proceedings. (6) Liens with respect to any asset arising pursuant to the interest of a vendor or lessor under any conditional sale agreement, purchase money security agreement, capital lease or other title retention agreement relating to such asset. 7. REPRESENTATIONS AND WARRANTIES. In order to induce UMB to extend credit to the Borrower hereunder, the Borrower hereby represents and warrants to UMB as of the date hereof and at all times hereafter while any obligations are outstanding under this Agreement that: 7.1 CORPORATE EXISTENCE AND AUTHORITY. The Borrower is duly incorporated and existing in good standing under the laws of the State of Delaware and is qualified to do business as a foreign corporation in every jurisdiction where the ownership of its Property or the nature of its business requires qualification. Each Subsidiary of the Borrower is duly incorporated in its respective state of incorporation and is existing in good standing under the laws of such state and is qualified to do business as a foreign corporation in every jurisdiction where the ownership of its respective Property or the nature of its respective business requires qualification. All ownership interests of the Borrower in such Subsidiaries are held free and clear of all liens and encumbrances. The Borrower is duly authorized to execute and deliver this Agreement, to borrow monies hereunder and to execute and deliver Notes evidencing borrowings under this Agreement. The execution and delivery of this Agreement and of all Notes evidencing borrowings under this Agreement does not conflict with any 14 provision of law, any order of any court or Government Authority, the Articles of Incorporation or By-laws of the Borrower or any agreement binding upon it. 7.2 TAX RETURNS. The Borrower has filed all tax returns which are required to be filed and has paid, or made adequate provision for the payment of, all taxes which have or may become due pursuant to said returns or to assessments received by the Borrower. The Borrower knows of no material additional assessments for which adequate reserves determined in accordance with generally accepted accounting principles have not been established. The Borrower has made adequate provision for the payment of all current taxes. 7.3 FINANCIAL AND OTHER INFORMATION. All balance sheets and statements of income and financial condition of the Borrower furnished by the Borrower to UMB are materially correct and complete. 7.4 INSURANCE. The Borrower shall maintain, with financially sound and reputable insurance companies, insurance against liability for hazards and risks and liability to persons and property to the extent and in the manner customary for companies in similar businesses similarly situated. All policies of insurance maintained by the Borrower may contain reasonable deductibles in amounts generally acceptable for companies similarly situated in the Borrower's industry and the Borrower may self insure as to those risks for which self insuring is reasonably acceptable for companies similarly situated in the Borrower's industry. 15 EVENTS OF DEFAULT. "Event of Default" shall mean any one or more of the following: 8.1 Failure of the Borrower to cure, within 5 business days after receipt of written notice of the same, any default in the payment of principal or of interest or any other amount payable under this Agreement on any obligations of the Borrower incurred pursuant to the terms and conditions of this Agreement when and as the same shall become due and payable, whether at the maturity date stated on any Note evidencing such obligations or at a date fixed for prepayment or by acceleration or otherwise. 8.2 Material breach by the Borrower of any covenant, obligation or requirement contained herein or in any document required to be executed pursuant hereto or failure of the Borrower, within 30 days after receipt of written notice specifying the same, to materially perform any covenant, obligation or requirement contained in this Agreement or in the other Loan Documents. 8.3 Any representation or warranty made by the Borrower hereunder being untrue in any material respect now or hereafter; or any schedule, statement, report, notice, information or writing furnished by the Borrower to UMB being untrue in any material respect as of the date the facts set forth therein are stated or certified. 8.4 Failure of any of the Borrower or any Subsidiary to cure, within 5 business days after receipt of written notice of the same, any default in the payment of principal or of interest on any Debt of the Borrower or any Subsidiary payable to UMB other than indebtedness incurred hereunder or payable to any person or entity other than UMB in the amount of $10,000,000 or more when and as the same shall become due and payable, whether at the maturity date stated on any note evidencing such Debt or at a date fixed for prepayment or by acceleration or otherwise. 16 8.5 The Borrower or any Subsidiary shall admit in writing their inability to pay their debts as they mature; or the Borrower or any Subsidiary shall make a general assignment for the benefit of creditors or the Borrower or any Subsidiary, consents to, applies for or acquiesces in the appointment of a trustee or receiver for any of them or for substantially all of the Property of any of them; or the Borrower or any Subsidiary shall suffer proceedings under any law relating to bankruptcy, insolvency or reorganization or the release of debtors to be instituted by or against it, and if contested, not dismissed or stayed within 60 days; the Borrower or any Subsidiary shall suffer any writ of attachment or execution or any similar process to be issued or levied against any material portion of its Property which is not released, stayed, bonded or vacated within 60 days after its issue or levy. 9. ACCELERATION. In the event of the occurrence of any one or more Events of Default which are defined in paragraph 8 of this Agreement, and if such Event of Default is not cured within the allowed grace period and shall be continuing, UMB may declare the entire principal amount of all Notes executed hereunder, together with accrued interest thereon, to be immediately due and payable, and in the event of the occurrence of any one or more such Events of Default and if such Event of Default is continuing, UMB may terminate the Revolving Credit, all without further notice of any kind to the Borrower. Upon the occurrence of an Event of Default, UMB may proceed to enforce payment of all obligations of the Borrower to UMB under this Agreement and may exercise any and all rights and remedies possessed by it. 10. GENERAL. 10.1 NOTICES. All notices hereunder shall be deemed to be received 3 days after being deposited in the U.S. Mail addressed to either party hereto at the following addresses or such 17 other address as, from time to time, either party identifies in a written notice to the other given pursuant to this Section 10.1 at least thirty (30) days prior to the effective date of such new address: If to UMB: UMB Bank Colorado 1670 Broadway Denver, Colorado 80202-4838 Attention: Ned C. Voth If to the Borrower: CIBER, Inc. 5251 DTC Parkway, Suite 1400 Englewood, Colorado 801112-0029 Attention: Mac J. Slingerlend. 10.2 NO WAIVERS. No failure or delay by UMB in exercising any right, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial modification or waiver of any provision of this Agreement or of any Note executed hereunder or a single or partial exercise of any such right, power or privilege preclude any other or further exercise of such or of any other right, power or privilege. 10.3 OFFSETS. The Borrower specifically agrees that upon the occurrence of an Event of Default regardless of whether any required notice has been given, and if such Event of Default is continuing, UMB shall be entitled to exercise a right of setoff at any time, irrespective of the stated maturity of all Notes executed hereunder evidencing the obligations of the Borrower to UMB, and irrespective of the fact that UMB has not given any notice of such setoff. 10.4 COLORADO LAW. This Agreement and all Notes issued hereunder shall be deemed to be contracts made under and shall be construed in accordance with the laws of the state of Colorado. 18 10.5 SEVERABILITY. In the event any one or more of the provisions of this Agreement or of any Note executed and delivered hereunder shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 10.6 COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall constitute an original but when taken together shall constitute but one agreement. 10.7 TITLES AND HEADINGS. All titles and headings which are used in this Agreement are used solely for the convenience of the parties hereto and are not part of the agreement of the parties. 10.8 ASSIGNMENT. This Agreement and all provisions hereof shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns; provided, however, that the Borrower may not assign any rights hereunder without the prior written consent of UMB; and provided further that the Borrower acknowledges and agrees that UMB may, without notice, assign all or any part of their rights and obligations hereunder to any other bank or lender, at their sole discretion, or may grant one or more participation interests in any of the obligations of the Borrower hereunder to any other lender. 10.9 EXPENSES. The Borrower agrees to pay all out of pocket expenses, including reasonable attorneys fees, incurred by UMB in connection with the preparation and amendment of this Agreement and, to the extent allow by law, the enforcement of the rights of UMB in connection with this Agreement and all Notes executed and delivered pursuant hereto and in connection with any amendment, extension or renewal thereof, or waivers thereunder. 19 10.10 WAIVER OF JURY TRIAL. IN THE EVENT OF ANY DISPUTE BETWEEN THE BORROWER AND UMB RELATED IN ANY WAY TO THIS AGREEMENT WHICH BECOMES THE SUBJECT OF ANY JUDICIAL PROCEEDING IN ANY COURT OF LAW, THE BORROWER AND UMB HEREBY EACH WAIVE ANY RIGHT WHICH THEY MAY RESPECTIVELY HAVE TO A TRIAL BY JURY. 10.11 INCORPORATION BY REFERENCE. Each of the Revolving Credit Notes and the other Loan Documents are hereby made subject to all of the terms, covenants, conditions, obligations, stipulations and agreements contained in this Agreement to the same extent and effect as if fully set forth therein, and this Agreement is hereby made subject to all of the terms, covenants, conditions, obligations, stipulations and agreements contained in the Revolving Credit Notes and the other Loan Documents to the same extent and effect as if fully set forth herein. All Exhibits hereto are incorporated herein by reference. All representations and warranties of the Borrower contained herein in Section 7 have been or will be relied upon by UMB notwithstanding any investigation made by or on behalf of them. 10.12 INTEREST RATE LIMITATION. Notwithstanding any provisions of this Agreement or any of the Revolving Credit Notes or the Loan Documents, in no event shall the amount of interest paid or agreed to be paid by the Borrower exceed an amount computed at the highest rate of interest permissible under applicable law. If, from any circumstances whatsoever, fulfillment of any provision of this Agreement, the Revolving Credit Notes or any Loan Document at the time performance of such provision shall be due, shall involve exceeding the interest rate limitation validly prescribed by law which a court of competent jurisdiction may deem applicable hereto, then, the obligations to be fulfilled shall be reduced to an amount computed at the highest rate of interest permissible under applicable law, and if for any reason whatsoever UMB shall ever receive as interest an amount which 20 would be deemed unlawful under such applicable law, such interest shall be automatically applied to the payment of principal of the amounts outstanding hereunder (whether or not then due and payable) and not to the payment of interest, or shall be refunded to the Borrower if such principal and all other obligations of the Borrower to UMB have been paid in full. 11. PRIOR AGREEMENTS SUPERSEDED/COMPLETE AGREEMENT. This Agreement and all documents referred to herein contain the entire agreement of the parties hereto with respect to the subject matter hereof and supersede the terms and conditions of all prior agreements of the parties pertaining to the subject matter hereof, specifically including but not limited to that certain Credit Agreement between the parties dated as of December 1, 1998 and all documents referred to therein; provided, however, this Agreement shall not supersede any agreements of the Borrower set forth in any promissory notes outstanding as of the date hereof which have been executed by the Borrower and are not paid in full by use of the proceeds of any borrowing hereunder or other funds available to the Borrower and in the event such promissory notes are not so paid within thirty (30) days of the date hereof, all terms of such promissory notes modified hereby shall be deemed to be in full force and effect as if this Agreement had not been executed. - ------------------------------------------------------------------------------- IN WITNESS WHEREOF, the parties hereto have executed and made this Agreement effective as of the day and year first stated above. CIBER, INC. UMB BANK COLORADO By /s/ Mac J. Slingerlend By /s/ Ned C. Voth ------------------------------ ------------------------------ Mac J. Slingerlend Ned C. Voth President, Chief Executive Chairman and Chief Officer and Secretary Executive Officer 21 EXHIBIT "B" TO UNSECURED CREDIT AGREEMENT BORROWER'S CERTIFICATE Date: ____________ To: UMB Bank Colorado From: CIBER, Inc. (for itself and its Subsidiaries) Pursuant to the Unsecured Credit Agreement dated as of November 1, 1999 between CIBER, Inc. ("Borrower") and UMB Bank Colorado (the "Bank") and all amendments therein, if any (the "Agreement"), Borrower hereby certifies to the following as of the date first stated above:
FINANCIAL COVENANTS COMPLIANCE - -------------------------------------------------------------------------------- ACTUAL YES NO ------ --- -- 1. Consolidated Net Worth must exceed $90,000,000 at all times. ------ --- -- 2. Leverage Ratio must not exceed 1.5:1.0 at all times. ------ --- -- 3. Debt Service Coverage Ratio (as of the end of the most recent calendar quarter) must be at least 1.5:1.0. ------ --- --
As used herein, all terms have the same meaning as that stated in the Agreement and Notes executed pursuant thereto. BORROWER IS NOT IN DEFAULT OR IN BREACH OF ANY OF ITS OBLIGATIONS UNDER THE AGREEMENT, ANY NOTES EXECUTED PURSUANT THERETO OR ON ANY OTHER LIABILITY TO BANK. CIBER, INC. By: ------------------------------ Title: --------------------------- Date: ---------------------------- TABLE OF CONTENTS
PAGE: 1. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . .1 1.1 Accounting Terms. . . . . . . . . . . . . . . . . . . . . .1 1.2 Defined Terms . . . . . . . . . . . . . . . . . . . . . . .1 1.3 Singular and Plural . . . . . . . . . . . . . . . . . . . .4 2. The Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . .4 2.1 The Revolving Credit. . . . . . . . . . . . . . . . . . . .4 2.2 Mandatory Prepayment of Revolving Credit. . . . . . . . . .6 3. Interest/Fees. . . . . . . . . . . . . . . . . . . . . . . . . . .6 3.1 Interest Rate . . . . . . . . . . . . . . . . . . . . . . .6 3.2 Calculation of Interest . . . . . . . . . . . . . . . . . .6 3.3 Credit Commitment Fee . . . . . . . . . . . . . . . . . . .6 3.4 Business Day. . . . . . . . . . . . . . . . . . . . . . . .7 4. Conditions to Making Loans . . . . . . . . . . . . . . . . . . . .7 4.1 No Adverse Change in Business . . . . . . . . . . . . . . .8 4.2 Representations . . . . . . . . . . . . . . . . . . . . . .8 4.3 Required Consents and Approvals . . . . . . . . . . . . . .8 4.4 No Defaults . . . . . . . . . . . . . . . . . . . . . . . .8 4.5 Application Constitutes Representation. . . . . . . . . . .9 5. Affirmative Covenants. . . . . . . . . . . . . . . . . . . . . . .9 5.1 Financial and Business Information. . . . . . . . . . . . .9 5.2 Corporate Existence and Maintenance of Property . . . . . 10 5.3 Taxes, Charges and Claims . . . . . . . . . . . . . . . . 11 5.4 Location of Records and Property. . . . . . . . . . . . . 11 5.5 Leverage Ratio. . . . . . . . . . . . . . . . . . . . . . 11 5.6 Net Worth . . . . . . . . . . . . . . . . . . . . . . . . 11 5.7 Debt Service Coverage Ration . . . . . . . . . . . . . . 12 5.8 Banking Accounts. . . . . . . . . . . . . . . . . . . . . 12 6. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . 12 6.1 Consolidations, Mergers and Sales of Assets . . . . . . . 12 6.2 Limitation On Dividends . . . . . . . . . . . . . . . . . 13 6.3 Loans and Guarantees. . . . . . . . . . . . . . . . . . . 13 6.4 No Quarterly Losses . . . . . . . . . . . . . . . . . . . 13 6.5 Limitations on Liens. . . . . . . . . . . . . . . . . . . 13 7. Representations and Warranties . . . . . . . . . . . . . . . . . 14 7.1 Corporate Existence and Authority . . . . . . . . . . . . 14 7.2 Tax Returns . . . . . . . . . . . . . . . . . . . . . . . 15 7.3 Financial and Other Information . . . . . . . . . . . . . 15 7.4 Insurance . . . . . . . . . . . . . . . . . . . . . . . . 15 8. Events of Default. . . . . . . . . . . . . . . . . . . . . . . . 16 9. Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . 17 10. General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 10.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 17 10.2 No Waivers. . . . . . . . . . . . . . . . . . . . . . . . 18 10.3 Offsets . . . . . . . . . . . . . . . . . . . . . . . . . 18 10.4 Colorado Law. . . . . . . . . . . . . . . . . . . . . . . 18 10.5 Severability. . . . . . . . . . . . . . . . . . . . . . . 19 10.6 Counterparts. . . . . . . . . . . . . . . . . . . . . . . 19 10.7 Titles and Headings . . . . . . . . . . . . . . . . . . . 19 10.8 Assignment. . . . . . . . . . . . . . . . . . . . . . . . 19 10.9 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . 19 10.10 Waiver of Jury Trial. . . . . . . . . . . . . . . . . . . 20 10.11 Incorporation by Reference. . . . . . . . . . . . . . . . 20 10.12 Interest Rate Limitation. . . . . . . . . . . . . . . . . 20 11. Prior Agreements Superseded/Complete Agreement . . . . . . . . . 21 Exhibits A Note B Borrower's Certificate
EX-10.2 5 EXHIBIT 10.2 PROMISSORY NOTE Englewood, Colorado $300,000 July 26, 1999 FOR VALUE RECEIVED, the undersigned (referred to as "Makers") hereby promise to pay to the order of CIBER, INC., a Delaware corporation (referred to, together with any subsequent holder of this Note, as "Holder"), at 5251 DTC Parkway, Suite 1400, Englewood, Colorado 80111, or at such other place or places as any Holder may designate from time to time, the principal amount of the loan made by Holder to Makers hereunder. This Note shall not bear interest except in the event of default as described below. All payments hereunder shall be made in lawful money of the United States of America. Principal shall be payable in accordance with the following terms: 1. Makers shall apply 75% of any bonuses (net of withholding taxes) payable to Joseph A. Mancuso by CIBER, Inc. or its affiliates ("CIBER") after September 15, 1999 towards payment of the outstanding balance due under the Note. As long as CIBER is the Holder of this Note, CIBER shall have the right to offset the Note balance with75% of any bonuses (net of withholding taxes) due to Joseph A. Mancuso. If the amount applied towards payment of the Note pursuant to the preceding provisions is less than $30,000 during the period from September 16, 1999 until September 15, 2000 and, thereafter, during the period from September 16 through September 15 of each successive year, then Makers shall pay Holder the difference between $30,000 and the amount applied to the Note (the "Deficiency") on or before September 15. 2. In the event of a Termination for Cause (as defined in the Employment Agreement as hereinafter defined), this Note shall be repayable in full on the date the Property (as defined herein) is sold, or the first anniversary of the termination date, whichever is earlier. 3. In the event of a Termination Other than for Cause (as defined in the Employment Agreement), this Note shall be repayable in full on the date the Property is sold or the second anniversary of the termination date, whichever is earlier. 4. In the event of a Termination by Reason of Disability (as defined in the Employment Agreement), this Note shall be repayable in full on the date the Property is sold or the second anniversary of the termination date, whichever is earlier. 5. In the event of Joseph A. Mancuso's death, this Note shall be repayable in full upon the date the Property is sold or the second anniversary of the date of death, whichever is earlier. 6. In the event of a Voluntary Termination (as defined in the Employment Agreement), this Note shall be repayable in full on the date the Property is sold or the first anniversary of the termination date, whichever is earlier. 7. In the event of a Termination Upon a Change in Control (as defined in the Employment Agreement), this Note shall be repayable in full on the date the Property is sold or the second anniversary of the termination date. Reference is made to the Employment Agreement between CIBER and Joseph A. Mancuso, dated July 1, 1999 (the "Employment Agreement"), for definitions of the termination provisions described above. The entire principal balance outstanding, together with all accrued and unpaid interest, and together with any other amounts due under this Note or under the Deed of Trust (as hereinafter defined) or other instruments securing or executed in connection with this Note, are due and payable in full on the date which is five years from the date hereof. All payments received hereunder shall be applied as follows: (i) first, to any late charges, costs, attorneys' fees and other charges under this Note, or under the Deed of Trust or any other instrument securing or executed in connection with this Note, other than principal and interest; (ii) second, to accrued interest; and (iii) third, to principal. The payment of indebtedness evidenced by this Note is initially unsecured; however, the Makers intend to utilize the proceeds of the Note to purchase and improve real property. Within sixty (60) days of acquisition of the real property, Makers will execute a Deed of Trust (the "Deed of Trust") encumbering the acquired property which will be described in the Deed of Trust (the "Property"). Reference is made to the Deed of Trust for a description of the property subject thereto, and the rights and obligations thereunder. At the option of Holder and subject to any applicable grace period, the entire balance of principal, accrued interest and other sums owing under this Note shall become at once due and payable in full, without notice or demand, upon the occurrence of any one of the following specified events: (1) any failure to make any payment when due hereunder; (2) any default in the observance or performance of any other covenant, term or provision to be performed under this Note; (3) the failure or inability of either Maker to pay its debts generally as they become due; (4) the concealment, removal or transfer of any assets and properties of either Maker in violation or evasion of any bankruptcy, fraudulent conveyance or similar law; (5) the making of a general assignment for the benefit of creditors; (6) the appointment of a receiver for either Maker's assets and properties; (7) the filing of any petition or the commencement of any proceeding by or against either Maker for any relief under bankruptcy or insolvency laws or any laws relating to the relief of debtors, readjustment of debts, reorganization, dissolution or liquidation, which proceeding is not dismissed within thirty (30) days; or (8) the falsity, when made, of any warranty or representation made by either Maker to Holder. Reference is made to the Deed of Trust and any other instrument securing or executed in connection with this Note for additional rights of acceleration. The balance of principal, interest and other sums due upon the maturity of this Note, by acceleration or otherwise, shall bear interest from the time of maturity until paid at a rate of eighteen percent (18%) per year (the "Default Rate"). In addition, if any Deficiency is not paid when due, the unpaid Deficiency amount shall bear interest from the date due until paid at the Default Rate. Makers and all parties now or hereafter liable for payment of this Note, primarily or secondarily, directly or indirectly, and whether as endorser, guarantor, surety or otherwise, hereby jointly and severally: 2 (a) waive presentment, demand, protest, notice of protest, notice of dishonor and all other notices and demands whatever, other than any notice which may be required pursuant to any provision of any document executed in connection with this Note; (b) consent to impairment or release of collateral, any and all renewals, extensions or modifications of the terms hereof, including time for payment, and acceptance of late or partial payments before, at or after maturity; (c) agree that Holder's acceptance of one or more partial payments after acceleration of the maturity of this Note will not constitute a waiver of such acceleration, regardless of any contrary notice or statement of condition which may accompany any such partial payment; (d) agree to pay all costs and expenses, including attorneys' fees, which may be incurred by Holder in collecting this Note or in enforcing and realizing upon any security for this Note. In the event of default under this Note, or under the Deed of Trust or any other instrument securing or executed in connection with this Note, Holder may, at its option, undertake proceedings to foreclose the Deed of Trust or exercise any other right or remedy available under this Note, under the Deed of Trust, or under any other instrument given as security for this Note, or otherwise available at law or in equity, in any sequence or combination. Proceeding with any one right or remedy or any combination thereof shall not be an election against or waiver of any other right or remedy. The provisions of this Note and of all agreements now or hereafter existing between Makers and Holder are hereby expressly limited so that in no contingency or event whatever shall the amount paid or agreed to be paid to Holder for the use, forbearance or detention of the sums evidenced by this Note exceed the maximum amount permissible under applicable law. If from any circumstance whatever the performance or fulfillment of any provision of this Note, or of any other agreement between Makers and Holder, should involve or purport to require any payment in excess of the limit prescribed by law, then the obligation to be performed or fulfilled is hereby reduced to the limit of such validity, and if from any circumstance whatever Holder should ever receive as interest an amount which would exceed the highest lawful rate, then the amount which would be excessive interest shall be applied to the reduction of principal (or, at Holder's option, be paid over to Makers) and shall not be counted as interest. Makers understand and agree that their obligations hereunder, including the obligation to make payments in accordance with the terms hereof, are unconditional and that all payments shall be made without any offset or deduction whatsoever. The indebtedness evidenced by this Note and the Deed of Trust may be subordinated to one deed of trust on the Property for the benefit of a primary institutional lender (or home development company). If any provision of this Note or of any other instrument securing or executed in connection with this Note is, for any reason and to any extent, invalid and unenforceable, then neither the 3 remainder of the document in which such provision is contained, nor the application of the provision to other persons, entities or circumstances, nor any other document referred to in this Note, shall be affected by such invalidity or unenforceability, and there shall be deemed substituted for the invalid or unenforceable provision the most similar provision which would be valid and enforceable under applicable law. Makers hereby covenant and agree that the state and federal courts of the State of Colorado shall have personal jurisdiction and proper venue over any dispute between Holder and Makers; provided that the foregoing consent to jurisdiction and venue shall not deprive Holder of the right in its discretion to commence or participate in any action, suit or proceeding in any other court having jurisdiction and venue over Makers. In any action or proceeding brought under this Note, each of the Makers and Holder waives trial by jury. Makers further agree that this Note shall be deemed to have been made under and shall be governed by the laws of the State of Colorado in all respects. ss/ Joseph A. Mancuso ------------------------------------------- Joseph A. Mancuso ss/ Susan Mancuso ------------------------------------------- Susan Mancuso 4 EX-27.1 6 EXHIBIT 27.1
5 1,000 3-MOS JUN-30-2000 JUL-01-1999 SEP-30-1999 51,567 0 155,033 0 461 214,073 50,912 24,566 400,988 78,188 0 0 0 591 322,209 400,988 0 187,042 0 124,544 46,098 0 0 17,889 7,629 10,260 0 0 0 10,260 .18 .18
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