The Company purchased 194,000 shares of its common stock from a director of the Company for $3.7 million in cash during the fiscal year ended August 31, 1998. Also during fiscal 1998, the Company purchased 57,094 shares of its common stock from a former officer of the Company for $1.1 million. The shares were purchased at the existing fair market value on the dates of the transactions. 

During fiscal 1998, the Company sold one of its consult- ing units to a group of former employees for $1.6 million. The amount is payable to the Company in six annual installments from September 1998 through 2003. The Company also granted certain employees the option to purchase another consulting unit of the Company for $1.2 million payable to the Company in equal annual installments over a ten-year period commencing January 2001. Such option becomes exerciseable upon the achievement of certain financial thresholds. As of August 31, 2000, the consulting unit had not yet reached planned financial thresholds and the Company does not expect that the option will be exercised. 

## 12. CAPITAL TRANSACTIONS 

## Preferred Stock 

During the fiscal year ended August 31 1999, the Company issued 750,000 shares of Series A Preferred Stock (the “Preferred Stock”) for $75.0 million in cash to a private investor. During fiscal 2000, and in connection with the initial issuance of Preferred Stock, the Company filed a registration statement with the SEC related to a subscription offering for up to an additional 750,000 shares of Preferred Stock. Common stock shareholders of record on November 8, 1999 received a non-transfer- able right to purchase one share of Preferred Stock for every 27 common shares owned, at a subscription price of $100 per share. The Preferred Stock shares offered to common shareholders were substantially identical to the Preferred Stock issued during fiscal 1999 to the private investor. The subscription offering closed on November 30, 1999 with 42,338 shares of Preferred Stock pur- chased under terms of the subscription offering. 

Preferred Stock dividends accrue at an annual rate of 10 percent and are payable quarterly in cash or additional shares of Preferred Stock until July 1, 2002. Subsequent to that date, Preferred Stock dividends must be paid in cash. Accordingly, the Company accrued $2.0 million and $1.9 million of Preferred Stock dividends at August 

31, 2000 and 1999, respectively. Subsequent to August 31, 2000, the Company paid the accrued Preferred Stock dividend with cash while the accrued dividend at August 31, 1999 was subsequently paid in additional shares of Preferred Stock. The Preferred Stock is convertible at any time into the Company’s common stock at a con- version price of $14.00 per share and ranks senior to the Company’s common stock. Preferred Stock shareholders generally have the same voting rights as common stock holders on an “as-converted” basis. 

## Treasury Stock 

The Company sold 153,614, 263,100, and 247,069 shares of its common stock held in treasury as a result of the exercise of incentive stock options and the purchase of shares under the Company’s employee stock purchase plan for the fiscal years ended August 31, 2000, 1999, and 1998, respectively. These shares were sold for a total of $1.0 million, $1.4 million, and $3.6 million and had a cost of approximately $2.9 million, $5.6 million, and $5.5 million for the fiscal years ended August 31, 2000, 1999, and 1998. Additionally, during fiscal 2000, the Company sold 650,000 shares of treasury stock to its management stock loan program (Note 20) for $5.1 million, which was the fair market value of the shares sold. As discussed in Note 11, the Company also sold 121,250 shares of treasury stock to a former CEO of the Company for $0.9 million. 

Through August 31, 2000, the Company’s Board of Directors had approved various plans for the purchase of up to 8,000,000 shares of the Company’s common stock. During fiscal years 2000, 1999, and 1998, the Company purchased 688,000 shares for $5.5 million, 2,126,000 shares for $32.7 million, and 2,687,000 shares for $57.0 million. The majority of the shares purchased during fiscal 2000 were subsequently sold to the Company’s management stock loan program (Note 20). At August 31, 2000, the Company had approximately 307,000 shares remaining under Board authorized purchase plans. 

## Tax Benefit from Exercise of Affiliate Stock Options 

During the fiscal years ended August 31, 2000, 1999, and 1998, certain employees exercised affiliate stock options (nonqualified stock options received from principal shareholders of the Company) which resulted in tax benefits to the Company of $0.6 million, $1.3 million, and $0.3 million, which were recorded as increases to additional paid-in capital. 

