SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(b)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File No. 0-21359
INDUSTRI-MATEMATIK INTERNATIONAL CORP.
(Exact name of registrant as specified in its charter)
DELAWARE 51-0374596
(State of Incorporation) (I.R.S. Employer Identification No.)
901 Market Street - Suite 475
Wilmington, Delaware 19801
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code: (302) 777-1608
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 (or for such shorter period than the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
YES [X] NO [ ]
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the close of the period covered by this
report.
Class: Outstanding January 31, 1999:
Common Stock ($.01 par value) 32,262,361 shares
<PAGE>
<PAGE>
<TABLE>
PART I. - FINANCIAL INFORMATION
INDUSTRI-MATEMATIK INTERNATIONAL CORP.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands, except per share figures)
<CAPTION>
01/31/99 4/30/98
----------- -----------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 51,770 $ 41,982
Short-term investments 19,916 69,416
Accounts receivable, less allowance
for doubtful accounts of $3,248
and $210 at January 31, 1999, and
April 30, 1998, respectively 22,001 24,289
Contract receivables 2,124 2,034
Prepaid expenses 2,557 2,824
Income taxes receivable 487 402
Other current assets 452 647
------ ------
Total current assets 99,307 141,594
------ ------
Non-current assets:
Property and equipment, net 7,239 5,011
Deferred income taxes 11,337 5
Goodwill 9,555 1,002
Other non-current assets 1,678 1,717
------ ------
Total non-current assets 29,809 7,735
------ ------
Total Assets $129,116 $149,329
======= =======
/TABLE
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS EQUITY
<S> <C> <C>
Current Liabilities:
Current portion of capital lease
obligations $ 85 $ 274
Current portion of notes payable 449 $ 486
Accounts payable 3,316 2,439
Accrued expenses and other
current liabilities 11,093 6,016
Accrued payroll and employee benefits 6,866 5,938
Deferred revenue 6,637 5,962
------ ------
Total current liabilities 28,446 21,115
------ ------
Long-term liabilities:
Capital lease obligations 67 281
Notes payable 514 840
Accrued pension liability 2,517 2,132
Other long-term liabilities 204 388
------ ------
Total long-term liabilities 3,302 3,641
------ ------
Total liabilities 31,748 24,756
Shareholders' equity:
Common Stock; voting, $.01 par value;
62,500,000 shares authorized;
32,262,361 and 32,917,552 shares
issued and outstanding at
January 31, 1999 and April 30,
1998, respectively 323 329
Additional paid-in capital 125,261 127,886
Retained Earnings (18,377) 5,287
Cumulative translation adjustment (2,946) (2,426)
Notes receivable from stockholders (6,893) (6,503)
------- -------
Total shareholders' equity 97,368 124,573
------- -------
Total Liabilities and Shareholders' equity $129,116 $149,329
======== =======
The accompanying notes are an integral part of the condensed consolidated
financial statements.
</TABLE>
PAGE
<PAGE>
<TABLE>
INDUSTRI-MATEMATIK INTERNATIONAL CORP.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share figures)
<CAPTION>
THREE MONTHS ENDED
1/31/99 1/31/98
--------------- ----------------
<S> <C> <C>
Revenues:
Licenses $ 4,128 $ 11,381
Services and maintenance 15,353 15,094
Other 588 477
------- -------
Total revenues 20,069 26,952
------- -------
Cost of revenues:
Licenses 910 135
Services and maintenance 15,336 10,613
Other 407 308
------- -------
Total cost of revenues 16,653 11,056
------- -------
Gross profit 3,416 15,896
------- -------
Operating expenses:
Product Development 5,033 4,037
Acquired in-process Research
and Development 2,500 0
Sales and marketing 7,068 5,740
General and administrative 2,905 1,595
------- -------
Total operating expenses 17,506 11,372
------- -------
Income (loss)from operations (14,090) 4,524
------- -------
Other income (expense):
Interest income 976 1,310
Interest expense (37) (44)
Miscellaneous income (expense) 0 (23)
------- -------
Income (loss)before income taxes (13,151) 5,767
Provision (benefit) for income taxes (4,225) 1,626
------- -------
Net Income (loss) (8,926) 4,141
======= =======
Net Income (loss) per share $ (0.28) $ 0.13
------- -------
Net Income (loss) per share
- assuming dilution $ (0.28) $ 0.13
======= =======
The accompanying notes are an integral part of the condensed consolidated
financial statements.
</TABLE>
PAGE
<PAGE>
<TABLE>
INDUSTRI-MATEMATIK INTERNATIONAL CORP.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share figures)
<CAPTION>
NINE MONTHS ENDED
1/31/99 1/31/98
--------------- ---------------
<S> <C> <C>
Revenues
Licenses $14,467 $27,208
Services and maintenance 51,178 37,903
Other 1,254 781
------- -------
Total revenues 66,899 65,892
------- -------
Cost of revenues:
Licenses 1,337 416
Services and maintenance 52,850 27,547
Other 637 482
------- -------
Total cost of revenues 54,824 28,445
------- -------
Gross profit 12,075 37,447
------- -------
Operating expenses:
Product Development 18,387 9,428
Acquired In-process
Research and Development 2,500 0
Sales and marketing 20,367 14,145
General and administrative 9,344 5,127
------- -------
Total operating expenses 50,598 28,700
------- -------
Income (loss)from operations (38,523) 8,747
------- -------
Other income (expense):
Interest income 3,721 1,817
Interest expense (112) (79)
Miscellaneous income (expense) 29 (122)
------- -------
Income(loss)before income taxes (34,885) 10,363
Provision (benefit) for income taxes (11,221) 2,402
------- -------
Net Income (loss) (23,664) 7,961
======= =======
Net Income (loss) per sha $ (0.73) $ 0.27
======= =======
Net Income (loss) per share
- assuming dilutio $ (0.73) $ 0.26
The accompanying notes are an integral part of the condensed consolidated
financial statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
INDUSTRI-MATEMATIK INTERNATIONAL CORP.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
<CAPTION>
NINE MONTHS ENDED
01/31/99 01/31/98
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $(23,664) $ 7,961
Adjustments to reconcile net income
(loss) to net cash provided by (used in)
operating activities:
Acquired in-process research
and development 2,500 0
Depreciation and amortization 2,351 1,356
Provision for doubtful accounts 2,978 117
Deferred income taxes (11,375) 2,213
Accrued interest on short-term
investments (170) 0
(Gain) loss on disposal of
property and equipment 10 7
Changes in operating assets
and liabilities:
Accounts receivable 643 (2,201)
Contract receivables and
prepaid expenses 489 495
Income taxes receivable (78) (353)
Other assets 280 (205)
Accounts payable 429 741
Accrued expenses and other
current liabilities 3,288 1,213
Accrued payroll, employee benefits
and deferred revenue 713 5,617
Accrued pension liability 406 393
------- -------
Net cash provided by (used in) operating
activities (21,200) 17,354
======== ========
Cash flows from investing activities:
Purchase of short-term investments (163,079) (174,840)
Proceeds from sale of short-term
investments 212,749 95,747
Additions to property and equipment (4,109) (2,647)
Payment for Ceratina (178) (1,025)
Payment for Abalon (9,500) 0
Proceeds from sale of property
and equipment 67 210
Proceeds from sale of other equity 1 0
Collection of notes receivable 0 521
------- -------
Net cash flows provided by (used in)
investing activities 35,951 (82,034)
======= ========
Cash flows from financing activities:
Repayments of lines of credit (828) 0
Proceeds from notes payable 0 1,539
Payments on notes payable (362) (99)
Principal payments on capital
lease obligations (395) (317)
Issuance of Common Stock 1,850 77,756
Repurchase of Common Stock (4,871) 0
Other (318) (203)
------- -------
Net cash flows provided by (used in)
financing activities (4,924) 78,676
======== ========
Translation differences on cash and
cash equivalents (39) (119)
------- -------
Net increase in cash and cash
equivalents $9,788 $13,877
======= =======
Cash and cash equivalents at beginning
of period $41,982 $9,023
Cash and cash equivalents at end ------- -------
of period $51,770 $22,900
------- -------
Supplemental disclosures of cash flow
information:
Cash paid during the period for:
Interest $ 177 $ 118
Income taxes $ 563 $ 361
The accompanying notes are an integral part of the condensed consolidated
financial statements.
</TABLE>
<PAGE>
INDUSTRI-MATEMATIK INTERNATIONAL CORP.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Interim Financial Statements
The unaudited condensed consolidated financial statements included
herein have been prepared by Industri-Matematik International Corp. and its
subsidiaries (collectively, "Company") pursuant to the rules and
regulations of the Securities and Exchange Commission. Accordingly, they
do not contain all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, the accompanying unaudited condensed consolidated
financial statements reflect all adjustments (consisting of normal
recurring adjustments) considered necessary for a fair presentation of the
Company's financial condition at April 30, 1998 (audited), and January 31,
1999 (unaudited), the results of operations for the three and nine months
ended January 31, 1998, and 1999, and the cash flows for the nine months
ended January 31, 1998, and 1999. These financial statements should be
read in conjunction with the audited consolidated financial statements of
the Company as presented in the Company's Annual Report on Form 10-K for
the fiscal year ended April 30, 1998. Results of operations and cash flows
for the periods ended January 31, 1999, are not necessarily representative
of the results that may be expected for the fiscal year ending April 30,
1999, or any other future period.
2. Revenue Recognition
In October 1997, the American Institution of Certified Public
Accountants issued Statement of Position 97-2 "Software Revenue
Recognition" ("SOP 97-2"), which provides guidance on when revenue should
be recognized and in what amounts for licensing, selling, leasing, or
otherwise marketing computer software. SOP 97-2 is effective for
transactions entered into in fiscal years beginning after December 15,
1997. The Company has adopted SOP 97-2 as of May 1, 1998, and the adoption
has not had an impact on its current revenue policies.
3. Comprehensive Income (Loss)
Effective May 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS 130").
SFAS 130 establishes standards for reporting and displaying comprehensive
income and its components. Total comprehensive income (loss) was
($9,345,000)and $3,952,000 for the three months ended January 31, 1999, and
January 31, 1998, respectively. Total comprehensive income (loss) was
($24,184,000) and $7,711,000 for the nine months ended January 31, 1999,
and January 31, 1998, respectively. Total comprehensive income (loss)
includes net income (loss) and currency translation adjustments.
4. Net Income (Loss) per Share
Net income (loss) per share has been computed in accordance with
Statement of Financial Accounting Standards No. 128, "Earnings per Share".
For each of the periods presented, net income (loss) per share was based on
the weighted average number of shares of Common Stock outstanding during
the period. Net income (loss) per share - assuming dilution was based on
the weighted average number of shares of Common Stock and potential shares
of Common Stock outstanding during the period. Potential shares of Common
Stock relates to stock options outstanding for which the dilutive effect is
calculated using the treasury stock method. The computation of net income
(loss) per share - assuming dilution for the three and nine month periods
ended January 31, 1999, does not assume the exercise of stock options since
the effect would be antidilutive as a result of the losses for those
periods.
For each of the periods presented, income available to common
shareholders (the numerator) used in the computation of net income (loss)
per share was the same as the numerator used in the computation of net
income (loss) per share - assuming dilution. A reconciliation of the
denominators used in the computations of net income (loss) per share and
net income (loss) per share - assuming dilution is as follows:
<TABLE>
<CAPTION>
Three months ended Nine months ended
January 31, January 31,
----------------------- ------------------------
1999 1998 1999 1998
--------- --------- ---------- ---------
<S> <C> <C> <C> <C>
Weighted average
shares outstanding 32,041,928 32,164,036 32,630,458 29,390,718
Effect of dilutive
stock options - 703,284 - 700,357
--------- --------- --------- ---------
Adjusted weighted
average shares
outstanding assuming
dilution 32,041,928 32,867,320 32,630,458 30,091,074
========== ========== ========== ==========
</TABLE>
5. Accrued Expenses and Other Current Liabilities
<TABLE>
<CAPTION>
January 31, 1999 April 30, 1998
---------------- --------------
(unaudited)
(in thousands)
<S> <C> <C>
Accrued purchases $5,175 $1,799
Accrued consultancy 560 2,133
Accrued pension taxes 500 451
Restructuring cost Abalon 1,019 -
Employee withholding taxes 977 601
Value-added tax 419 431
Income tax payable 179 115
Other 2,264 486
------ ------
$11,093 $6,016
====== ======
</TABLE>
Substantially all of the amount set forth under "Other" in the chart above
with respect to January 31, 1999, constitutes project reserves consisting
of charges to be incurred bringing projects to implementation, some of
which will not be billed and some of which will be billed at a discount.
6. Accrued Payroll and Employee Benefits
<TABLE>
<CAPTION>
January 31, 1999 April 30, 1998
---------------- --------------
(unaudited)
(in thousands)
<S> <C> <C>
Accrued commissions $ 559 $ 636
Accrued payroll taxes 1,666 1,030
Accrued vacation pay 2,060 1,528
Accrued salaries and bonus 1,945 1,708
Accrued pension expenses 435 365
Accrued expenses ESPP 201 671
------ ------
$6,866 $5,938
====== ======
</TABLE>
7. Income Taxes
For the three and nine month periods ended January 31, 1999, an
estimated deferred tax asset was recognized relating to the Company's net
operating loss for the periods. At January 31, 1999, the Company had
approximately $11.6 million of gross deferred tax assets.
8. Stock Option Plans
Under the Industri-Matematik International Corp. Stock Option Plans,
2,346,500 options were granted during the nine months ended January 31,
1999. (Of these options, 275,000 were issued in replacement of options
which had been granted in a prior period at a higher exercise price.) All
options were issued at an exercise price equal to or above the closing
market price on the date of grant. During the same period, 346,309 shares
were issued pursuant to the Employee Stock Purchase Plan and 65,000 shares
were sold pursuant to the Restricted Stock Program.
9. Acquisition of Abalon
On December 31, 1998, the Company acquired all of the outstanding
shares of Abalon AB ("Abalon"), a software provider of customer
relationship management solutions. The allocable purchase price amounted
to $10.9 million, of which $9.5 million was paid in cash to the seller and
$1.4 million related to acquisition costs and the incremental costs
relating to the integration of Abalon into the Company. The acquisition
was accounted for as a purchase and accordingly, the net assets acquired
were recorded at their estimated fair values at the effective date of the
acquisition. The following table presents the approximate allocation of
the purchase price, based on the most recent information prior to filing:
In-process Research and Development $ 2,500
Other intangibles 1,700
Goodwill 7,060
Net assets (360)
The $2.5 million related to acquired in-process research and
development, as determined by an third-party appraisal, was charged against
income in the quarter ended January 31, 1999, as the underlying research
and development projects had not yet reached technological feasibility. The
Company's consolidated financial statements include the results of Abalon
from January 1, 1999.
The following table presents the consolidated results of operations on an
unaudited pro forma basis as if the acquisition of Abalon had taken place
at the beginning of each fiscal year:
Nine months ended
January 31,
1999 1998
--------- --------
Revenues $ 71,155 $ 71,806
Income (loss) before income taxes (36,873) 9,855
Net income (loss) (25,037) 7,644
Pro forma net income (loss) per
share - assuming dilution - attributable
to Abalon (0.04) (0.01)
Consolidated pro forma net income (loss)
per share - assuming dilution (0.77) 0.25
The unaudited pro forma results of operations are for comparative purposes
only and do not necessarily reflect the results that would have occurred
had the acquisition occurred at the beginning of the periods presented or
the results which may occur in the future.
10. Subsequent Events.
In February, 1999, a class action lawsuit was commenced against the
Company, certain of its officers, directors, and controlling shareholders
who sold shares of Common Stock during the class period, and its
underwriters claiming violations of the Federal securities laws.
Management believes the suit is without merit, and the Company and other
defendants intend to defend themselves vigorously.
PAGE
<PAGE>
ITEM 2.
INDUSTRI-MATEMATIK INTERNATIONAL COPR.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended, that involve certain risks
and uncertainties. Discussions containing such forward-looking statements
may be found in the material set forth below as well as in this Report
generally. Without limiting the foregoing, the words "believes,"
"anticipates," "plans," "expects," and similar expressions are intended to
identify forward-looking statements. The Company's actual results could
differ materially from those anticipated in such forward-looking statements
as a result of certain factors including, but not limited to, uncertainties
regarding continued market acceptance of the Company's products, delays in
the introduction of new product enhancements, hiring, training, and
retaining a rapidly increasing level of employees, and risks associated
with managing the Company's rapid growth, as well as those set forth under
"Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal
year ended April 30, 1998, which are incorporated herein by reference.
These forward-looking statements are made as of the date of this Report and
the Company assumes no obligation to update such forward-looking statements
or to update the reasons why actual results could differ materially from
those anticipated in such forward-looking statements.
OVERVIEW
The Company develops, markets, and supports client/server application
software that enables manufacturers, distributors, wholesalers, and third-
party logistics companies to manage more effectively the supply chain.
Supply chain management encompasses the execution of multiple customer-
centric order fulfillment processes, including order management, pricing
and sourcing, warehouse management, transportation management, and demand
chain planning. The Company's principal product, System ESS(R), has been
designed specifically to meet complex or high-volume supply chain
management requirements of medium and large manufacturers, distributors,
wholesalers, and third-party logistics companies. System ESS allows
customers to leverage the value of their existing systems by integrating
with legacy and new client/server manufacturing, planning, and financial
management systems. The Company recently expanded its product suite with
the acquisition of the Abalon customer relationship management software
operations, formerly Abalon AB. Abalon Customer Management Solution (CMS)
software supports the complete customer management cycle, from identifying
prospects and winning business to maintaining ongoing customer
relationships that generate repeat business. Abalon CMS software is itself
a suite of integrated, modular applications that provides marketing
automation, technically assisted sales activities, and customer support,
including call center operations.
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, the
percentages that selected items in the unaudited Condensed Consolidated
Statements of Operations bear to total revenues. The period to period
comparisons of financial results are not necessarily indicative of future
results.
Nine Months Ended Three Months Ended
January 31, January 31,
1999 1998 1999 1998
Revenues:
Licenses 21.6 % 41.3 % 20.6 % 42.2 %
Services and maintenance 76.5 57.5 76.5 56.0
Other 1.9 1.2 2.9 1.8
------- ------- ------- -------
Total revenues 100.0 100.0 100.0 100.0
Cost of revenues:
Licenses 2.0 0.6 4.5 0.5
Services and maintenance 79.0 41.8 76.4 39.4
Other 1.0 0.7 2.1 1.1
------- ------ ------ ------
Total cost of revenue 82.0 43.1 83.0 41.0
------- ------ ------ ------
Gross profit 18.0 56.9 17.0 59.0
------- ------ ------ ------
Operating expenses:
Product Development 27.5 14.3 25.1 15.0
Acquired In-process
research and development 3.7 0.0 12.4 0.0
Sales and marketing 30.4 21.5 35.2 21.3
General and administrative 14.0 7.8 14.5 5.9
------- ------- ------ ------
Total operating
expenses 75.6 43.6 87.2 42.2
------- ------- ------ ------
Income (loss) from
operations (57.6) 13.3 (70.2) 16.8
------- ------- ------ ------
Other income (expense):
Interest income 5.6 2.7 4.9 4.9
Interest expense (0.2) (0.1) (0.2) (0.2)
Miscellaneous
income (expense) 0.0 (0.2) 0.0 (0.1)
------- ------- ------- -------
Income (loss) before
income taxes (52.2) 15.7 (65.5) 21.4
Provision (benefit)
for income taxes (16.8) 3.6 (21.1) 6.0
------- ------- ------- -------
Net income (loss) (35.4)% 12.1 % (44.4)% 15.4 %
======= ======= ======= =======
REVENUES
The Company's revenues consist of software license revenues, service
and maintenance revenues, and other revenues. Software license revenues
consist of sales of software licenses which are recognized upon execution
of a contract and shipment of the software, provided that no significant
vendor obligations remain outstanding and collection is considered probable
by management. Service revenues are derived from fees for consulting,
training, and client-specific development services and are recognized as
services are performed. Maintenance revenues are derived from customer
support agreements generally entered into in connection with the initial
license sales and subsequent renewals. Maintenance revenues are recognized
ratably over the term of the maintenance period. Payments for maintenance
fees are generally made in advance. Other revenues are primarily third-
party hardware sales necessary to help certain customers implement System
ESS.
Total revenues decreased 25.5% to $20.1 million in the quarter ended
January 31, 1999, from $27.0 million in the quarter ended January 31, 1998.
In the first nine months of fiscal 1999, total revenues increased 1.5% to
$66.9 million from $65.9 million in the first nine months of fiscal 1998.
The Company currently derives substantially all of its revenues from System
ESS licenses and related service and maintenance.
SOFTWARE LICENSE REVENUES. Revenues from software licenses decreased
63.7% to $4.1 million in the quarter ended January 31, 1999, from $11.4
million in the quarter ended January 31, 1998. In the first nine months of
fiscal 1999, revenues from software licenses decreased 46.8% to $14.5
million from $27.2 million in the first nine months of fiscal 1998. The
decrease in software license revenues was due primarily to sales delays
associated with the re-building and training the United States direct sales
force, which was completed in the first six months of fiscal 1999. In
addition, the Company has been affected by a lengthening of the sales cycle
as potential customers scrutinize their enterprise application purchases
due to concerns with issues such as Year 2000 problems and changes in
global economic conditions.
SERVICE AND MAINTENANCE REVENUES. Revenues from service and
maintenance increased 1.7% to $15.4 million in the quarter ended January
31, 1999, from $15.1 million in the quarter ended January 1, 1998. In the
first nine months of fiscal 1999, revenues from service and maintenance
increased 35.0% to $51.2 million from $37.9 million in the first nine
months of fiscal 1998. The increase in the absolute dollar amount of
service and maintenance revenues was related primarily to an increase in
the number of System ESS licenses sold during fiscal 1998 and the
additional revenue generated by the expansion of the Company's consulting
organization in the United States and Europe. Service and maintenance
revenues as a percentage of total revenues increased to 76.5% in the
quarter ended January 31, 1999, from 56.0% in the quarter ended January 31,
1998, and increased to 76.5% in the first nine months of fiscal 1999 from
57.5% in the first nine months of fiscal 1998, as a result of the increased
revenue from the continued build-up of the services organization and the
decrease in license revenues in these periods. Generally, service and
maintenance revenues tend to track software license transactions in prior
periods.
OTHER REVENUES. Other revenues are primarily third-party hardware
sales to the Company's Scandinavian customer base. Other revenues
increased 23.3% to $588,000 in the quarter ended January 31, 1999, from
$477,000 in the quarter ended January 31, 1998. In the first nine months
of fiscal 1999, other revenues increased 60.6% to $1,254,000 from $781,000
in the first nine months of fiscal 1998. Other revenues as a percentage of
total revenues increased to 2.9% in the quarter ended January 31, 1999,
from 1.8% in the quarter ended January 31, 1998, and increased to 1.9% in
the first nine months of fiscal 1999 from 1.2% in the first nine months of
fiscal 1998. Other revenues will vary over time as a percentage of total
revenues due to the size of specific hardware sales.
COST OF REVENUES
COST OF SOFTWARE LICENSE REVENUES. Cost of software license revenues
consists primarily of license fees paid with respect to embedded third-
party software included with the licenses of System ESS and, occasionally,
the cost of third-party complementary software that is licensed together
with System ESS without being embedded into System ESS. Cost of software
license revenues was $910,000 and $135,000 in the quarters ended January
31, 1999, and 1998, representing 22.0% and 1.2% of software license
revenues, respectively. Cost of software license revenues was $1,337,000
and $416,000 in the first nine months of fiscal 1999 and 1998, representing
9.2% and 1.5% of software license revenues, respectively. The increase in
cost of software license revenues both in absolute dollar amount and as a
percentage of software license revenues was primarily due to increased
sublicensing of complementary software in the quarter ended January 31,
1999.
COST OF SERVICE AND MAINTENANCE REVENUES. Cost of service and
maintenance revenues consists primarily of costs associated with
consulting, implementation, and training services and the use by the
Company of third-party consultants to perform implementation services for
the Company's customers. Cost of service and maintenance revenues also
includes the cost of providing software maintenance to customers, such as
telephone hotline support.
Cost of service and maintenance revenues was $15.3 million and $10.6
million in the quarters ended January 31, 1999, and 1998, representing
99.9% and 70.3% of service and maintenance revenues, respectively. Cost of
service and maintenance revenues was $52.8 million and $27.5 million in the
first nine months of fiscal 1999 and fiscal 1998, representing 103.3% and
72.7% of service and maintenance revenues, respectively. The increase in
the cost of service and maintenance revenues both in absolute dollar
amounts and as a percentage of service and maintenance revenues was due to
the extensive build-up of the consulting organization, to the extensive use
of subcontractors, and an intentional investment to expedite implementation
of licenses sold. Cost of service and maintenance revenues is expected to
decline beginning in fiscal 2000, both in absolute dollar amounts and as a
percentage of service and maintenance revenues, as the Company realigns
costs in order to restore long-term profitability.
COST OF OTHER REVENUES. Cost of other revenues consists primarily of
the cost of third-party hardware supplied to certain customers. Cost of
other revenues was $407,000 and $308,000 in the quarters ended January 31,
1999, and 1998, representing 69.2% and 64.6% of other revenues,
respectively. Cost of other revenues was $637,000 and $482,000 in the
first nine months of fiscal 1999 and fiscal 1998, representing 50.8% and
61.7% of other revenues, respectively.
PRODUCT DEVELOPMENT. Product development expenses were $5.0 million
and $4.0 million in the quarters ended January 31, 1999, and 1998,
representing 25.1% and 15.0% of total revenues, respectively. These same
expenses were $18.4 million and $9.4 million in the first nine months of
fiscal 1999 and 1998, representing 27.5% and 14.3% of total revenues,
respectively. The increase in product development expenses in absolute
dollar amount was due to an increase in the number of product development
personnel and other related costs related to expanding the Company's
product development department as well as the extensive use of
subcontractors in developing version 5.2 of System ESS, which was completed
in August 1998. In the first nine months of fiscal 1999, the Company also
incurred one-time costs for the expansion of System ESS functionality in
the consumer product sector. The Company expects that product development
expenses will decrease both in absolute dollar amount and as a percentage
of revenues beginning in fiscal 2000 as the Company adjusts its expenses to
restore profitability. The Company anticipates that subcontractors will be
used to a lesser extent in the future.
In accordance with Statement of Financial Accounting Standards No. 86,
software development expenses are expensed as incurred until technological
feasibility has been established, at which time such costs are capitalized
until the product is available for general release to customers. To date,
the establishment of technological feasibility of the Company's products
and general release of such software have substantially coincided. As a
result, software development costs qualifying for capitalization have been
insignificant, and, therefore, the Company has not capitalized any software
development costs.
ACQUIRED IN-PROCESS RESEARCH AND DEVELOPMENT. Acquired in-process
research and development consists of one-time charges from acquisitions
accounted for as a purchase. The Company had one acquisition in the quarter
ended January 31, 1999, resulting in the write-off of acquired in-process
research and development of $2.5 million. The $2.5 million related
in-process research and development, as determined by an independent
third-party appraisal, was charged against income in fiscal 1999 as the
underlying research and development projects had not reached technological
feasibility for Abalon's intended purpose and had no alternative future
uses for the Company. The Company did not have any related write-off of
acquired research and development in fiscal 1998.
SALES AND MARKETING. Sales and marketing expenses include personnel
costs, commissions, and related costs for sales and marketing personnel, as
well as the cost of office facilities, travel, promotional events, and
public relations programs. Sales and marketing expenses were $7.1 million
and $5.7 million in the quarters ended January 31, 1999, and 1998,
representing 35.2% and 21.3% of total revenues, respectively. These same
expenses were $20.4 million and $14.1 million in the first nine months of
fiscal 1999 and 1998, representing 30.4% and 21.5% of total revenues,
respectively. The increase in sales and marketing expenses in absolute
dollar amount and as a percentage of total revenues was primarily due to
increased staffing as the Company has expanded its direct sales force as
well as its partner and marketing organization. The Company expects over a
longer term to enhance aggressively its market presence in targeted
vertical markets, including a visible marketing campaign to create
awareness of the Company's supply chain management solution. At the same
time, the Company expects its sales and marketing expenses to decrease both
in absolute dollar amounts and as a percentage of total revenues in fiscal
2000 as the Company realigns its cost structure to restore profitability.
GENERAL AND ADMINISTRATIVE. Ongoing general and administrative
expenses consists primarily of salaries and costs of the Company's finance,
human resources, information systems, administrative, and executive staff
and the fees and expenses associated with legal, accounting, and other
requirements. General and administrative expenses were $2.9 million and
$1.6 million in the quarters ended January 31, 1999, and 1998, representing
14.5% and 5.9% of total revenues, respectively. These same expenses were
$9.3 million and $5.1 million in the first nine months of fiscal 1999 and
1998, representing 14.0% and 7.8% of total revenues, respectively. The
increase in absolute dollar amounts of general and administrative expenses
was primarily the result of increased staffing of human resources and
internal system administration associated with the growth of the Company's
business during fiscal 1999 and 1998. The Company expects general and
administrative expenses to decrease in future periods both in absolute
dollar amounts and as a percentage of total revenues.
OTHER INCOME (EXPENSE)
Other income comprises interest income, interest expenses, and
miscellaneous income and expenses. Interest income was $976,000 and $1.3
million in the quarters ended January 31, 1999, and 1998, representing
4.9% and 4.9% of total revenues, respectively. Interest income was $3.7
million and $1.8 million in the first nine months of fiscal 1999 and 1998,
representing 5.6% and 2.7% of total revenues, respectively. The increase
is due to the Company's investment of a portion of the proceeds of its
secondary public offering in short-term investments and interest-bearing
accounts. Interest expenses were $37,000 and $44,000 in the quarters ended
January 31, 1999, and 1998, representing 0.2% and 0.2% of total revenues,
respectively. These same expenses were $112,000 and $79,000 in the first
nine months of fiscal 1999 and 1998, representing 0.2% and 0.1% of total
revenues, respectively.
LIQUIDITY AND CAPITAL RESOURCES
As of January 31, 1999, the Company had $70.9 million of working
capital, including $51.8 million in cash and cash equivalents and $19.9
million in short-term investments, as compared to $120.5 million of working
capital as of April 30, 1998, including $42.0 million of cash and cash
equivalents and $69.4 in short-term investments. The decrease in working
capital was the result of the increase in accrued expenses and other
current liabilities, the operating loss for the period, and the payment of
$4.8 million to repurchase 1,077,500 shares of the Company's Common Stock
pursuant to the buy-back program announced in October 1998, and the payment
of $9.5 million in connection with the acquisition of Abalon. Accounts
receivable decreased to $22.0 million at January 31, 1999, from $24.3
million at April 30, 1998, and the average days' sales outstanding,
including contract receivables, was 101 days for the quarter ended January
31, 1999, as compared to 78 days for the year ended April 30, 1998. The
increase in average days' sales outstanding was due primarily to the late
payment of invoices for partner consulting services and other consulting
services as well as to certain license agreements being closed late in the
quarter or combined with payment plans. Accounts receivable also reflect
an increase in the reserve for doubtful accounts which was offset by a
related reduction in project reserves.
The Company believes that existing cash and cash equivalent balances,
short-term investments, available borrowings under the revolving credit
agreement, and potential cash flow from operations will satisfy the
Company's working capital and capital expenditure requirements for at least
the next 12 months.
Year 2000
The Company has devoted a substantial amount of time over the last
year to validate that the standard version of its principal product, System
ESS, is Year 2000 compliant. The Company will continue to validate such
compliance through the first half of 1999 and, if necessary, will issue
releases for all supported versions of standard System ESS to insure that
all standard System ESS systems can with retained functionality store,
process, and receive date and time data for periods before and after the
turn of the century if correct date and time data are inputted. The
Company also has assessed the Year 2000 readiness of the third-party
software vendors whose products are licensed in conjunction with or as part
of standard System ESS and is satisfied that all such products are or will
be Year 2000 compliant.
With respect to customized code developed for specific customers to
address specific customer needs and to interface with legacy and other
software applications, the Company has developed a toolset to assist such
customers in assessing and renovating Year 2000 issues with respect to such
code, and the Company can perform assessment and renovation for the
customer on a time and materials basis. While the Company does not warrant
the Year 2000 compliance of any such customized code, it cannot be sure
that it will not have a dispute with a customer over whether particular
code is standard or customized.
The Company has taken the steps required to make its internal
management and telecommunication systems Year 2000 compliant and
anticipates that such systems will become entirely Year 2000 compliant
during the first six months of calendar 1999. The entire cost of the
Company's internal Year 2000 compliance program is not material to the
Company, and the Company does not anticipate any material adverse affect
upon its business, operating results, or financial condition with respect
to a Year 2000 issue.
<PAGE>
<PAGE>
PART II. - OTHER INFORMATION
ITEM 1. Legal Proceedings.
On November 25, 1998, a licensee of System ESS (pursuant to a license
agreement with a Company partner) which is indebted to the Company for
integration services, initiated an arbitration proceeding before the
American Arbitration Association in New York, New York seeking cancellation
of its indebtedness, a refund of prepaid support fees and the license
revenue, as well as treble damages. Management believes that it will
collect its outstanding indebtedness and have no obligation to pay any
moneys to this licensee.
ITEM 6. Exhibits and Reports on Form 8-K.
a. Exhibits
Exhibit 3. By-laws of the Company as amended through
October 9, 1998.
Exhibit 10. Employment Agreement dated October 16, 1998,
between the Company and Philippe Beaurain.
Exhibit 27. Financial Data Schedule
b. Reports on Form 8-K
No reports have been filed on Form 8-K during the quarter
ended January 31, 1999.
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on it's behalf by the
undersigned thereunto duly authorized.
INDUSTRI-MATEMATIK INTERNATIONAL CORP.
BY: s/ Stig Durlow
---------------------------
Stig Durlow
Principal Executive Officer
BY: s/ Lars-Goran Peterson
---------------------------
Lars-Goran Peterson
Principal Financial Officer
DATE: March 12, 1999
Bylaws of Industri-Matematik International Corp. As Amended through October
9, 1998
Article I
CORPORATE OFFICES
1.1 Registered Office. The registered office of the corporation
shall be in the City of Wilmington, County of New Castle, State of Delaware.
1.2 Other Offices. The board of directors may at any time
establish other offices at any place or places where the corporation is
qualified to do business.
Article II
MEETINGS OF STOCKHOLDERS
2.1 Place of Meetings. Meetings of stockholders shall be held at
any place, within or outside the State of Delaware, designated by the board
of directors. In the absence of any such designation, stockholders' meetings
shall be held at the registered office of the corporation.
2.2 Annual Meeting. The annual meeting of stockholders shall be
held each year on a date and at a time designated by the board of directors.
At the meeting, directors shall be elected and any other proper business may
be transacted.
2.3 Special Meeting. A special meeting of the stockholders may be
called at any time by the board of directors, by the chairman of the board,
by the president or by one or more holders holding shares representing in the
aggregate the right to cast not less than ten percent (10%) of the votes at
the meeting.
If a special meeting is called by any person or persons other than
the board of directors, the request shall be in writing, specifying the time
of such meeting and the general nature of the business proposed to be
transacted and shall be delivered personally or sent by registered mail or by
telegraphic or other facsimile transmission to the chairman of the board, the
president, the chief executive officer or the secretary of the corporation.
No business may be transacted at such special meeting otherwise than
specified in such notice. The officer receiving the request shall cause
notice to be given to the stockholders entitled to vote, in accordance with
the provisions of Sections 2.4 and 2.5, that a meeting will be held at the
time requested by the person or persons who called the meeting, not less than
thirty-five (35) nor more than sixty (60) days after the receipt of the
request. If the notice is not given within twenty (20) days after the
receipt of the request, the person or persons requesting the meeting may give
the notice. Nothing contained in this paragraph of this Section 2.3 shall be
construed as limiting, fixing, or affecting the time when a meeting of
stockholders called by action of the board of directors may be held.
2.4 Notice of Stockholders' Meetings. All notices of meetings
with stockholders shall be in writing and shall be sent or otherwise given in
accordance with Section 2.5 of these bylaws not less than ten (10) nor more
than sixty (60) days before the date of the meeting to each stockholder
entitled to vote at such meeting. The notice shall specify the place, date,
and hour of the meeting, and, in the case of a special meeting, the purpose
or purposes for which the meeting is called.
2.5 Manner of Giving Notice; Affidavit of Notice. Written notice
of any meeting of stockholders, if mailed, is given when deposited in the
United States mail, postage prepaid, directed to the stockholder at his
address as it appears on the records of the corporation. An affidavit of the
secretary or an assistant secretary or of the transfer agent of the
corporation that the notice has been given shall, in the absence of fraud, be
prima facie evidence of the facts stated therein.
2.6 Quorum. At any meeting of the stockholders, the holders of a
majority, present in person or by proxy, of all of the shares of the stock
entitled to vote at the meeting shall constitute a quorum for all purposes,
unless or except to the extent that the presence of a larger number may be
required by law. Where a separate vote by a class or classes is required, a
majority, present in person or by proxy, of the shares of such class or
classes entitled to take action with respect to that vote on that matter
shall constitute a quorum. If a quorum shall fail to attend any meeting, the
chairman of the meeting may adjourn the meeting to another place, date or
time.
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, those present at such
adjourned meeting shall constitute a quorum (but in no event shall a quorum
consist of less than one-third of the shares entitled to vote at the
meeting), and all matters shall be determined by a majority of the votes cast
at such meeting, except as otherwise required by law.
2.7 Adjourned Meeting; Notice. When a meeting is adjourned to
another time or place, unless these bylaws otherwise require, notice need not
be given of the adjourned meeting if the time and place thereof are announced
at the meeting at which the adjournment is taken. At the adjourned meeting
the corporation may transact any business that might have been transacted at
the original meeting. If the adjournment is for more than thirty (30) 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.
2.8 Voting. The stockholders entitled to vote at any meeting of
stockholders shall be determined in accordance with the provisions of Section
2.11 of these bylaws, subject to the provisions of Sections 217 and 218 of
the General Corporation Law of Delaware (relating to voting rights of
fiduciaries, pledgors and joint owners of stock and to voting trusts and
other voting agreements).
Except as provided in the last paragraph of this Section 2.8, or as
may be otherwise provided in the certificate of incorporation, each
stockholder shall be entitled to one vote for each share of capital stock
held by such stockholder.
2.9 Waiver of Notice. Whenever notice is required to be given
under any provision of the General Corporation Law of Delaware or of the
certificate of incorporation or these bylaws, a written waiver thereof,
signed by the person entitled to notice, whether before or after the time
stated therein, shall be deemed equivalent to notice. Attendance of a person
at a meeting shall constitute a waiver of notice of such meeting, except when
the person 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. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the
stockholders need be specified in any written waiver of notice unless so
required by the certificate of incorporation or these bylaws.
2.10 Stockholder Action by Written Consent Without a Meeting.
Unless otherwise provided in the certificate of incorporation, any action
required by this chapter to be taken at any annual or special meeting of
stockholders of a corporation, or any action that may be taken at any annual
or special meeting of such stockholders, may be taken without a meeting,
without prior notice, and without a vote if a consent in writing, setting
forth the action so taken, is signed by the holders of outstanding stock
having not less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voted.
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. If the action which is
consented to is such as would have required the filing of a certificate under
any section of the General Corporation Law of Delaware if such action had
been voted on by stockholders at a meeting thereof, then the certificate
filed under such section shall state, in lieu of any statement required by
such section concerning any vote of stockholders, that written notice and
written consent have been given as provided in Section 228 of the General
Corporation Law of Delaware.
2.11 Record Date for Stockholder Notice; Voting; Giving Consents.
In order that the corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment
thereof, or entitled to express consent to corporate action in writing
without a meeting, 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 shall not be more than sixty (60) nor less than ten (10)
days before the date of such meeting, nor more than sixty (60) days prior to
any other action.
If the board of directors does not so fix a record date:
(i) The record date for determining stockholders entitled to
notice of or to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given, or, if
notice is waived, at the close of business on the day next preceding the day
on which the meeting is held.
(ii) The record date for determining stockholders entitled to
express consent to corporate action in writing without a meeting, when no
prior action by the board of directors is necessary, shall be the day on
which the first written consent is expressed.
(iii) 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 thereto.
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.
2.12. Proxies. Each stockholder entitled to vote at a meeting
of stockholders or to express consent or dissent to corporate action in
writing without a meeting may authorize another person or persons to act for
him by a written proxy, signed by the stockholder and filed with the
secretary of the corporation, but no such proxy shall be voted or acted upon
after three (3) years from its date, unless the proxy provides for a longer
period. A proxy shall be deemed signed if the stockholder's name is placed
on the proxy (whether by manual signature, typewriting, telegraphic
transmission or otherwise) by the stockholder or the stockholder's attorney-
in-fact. The revocability of a proxy that states on its face that it is
irrevocable shall be governed by the provisions of Section 212(c) of the
General Corporation Law of Delaware.
2.13 List of Stockholders Entitled to Vote. The officer who has
charge of the stock ledger of a corporation shall prepare and make, at least
ten (10) 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 of each stockholder 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 (10) 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
also be produced and kept at the time and place of the meeting during the
whole time thereof, and may be inspected by any stockholder who is present.
Article III
DIRECTORS
3.1 Powers. Subject to the provisions of the General Corporation
Law of Delaware and any limitations in the certificate of incorporation or
these bylaws relating to action required to be approved by the stockholders
or by the outstanding shares, the business and affairs of the corporation
shall be managed and all corporate powers shall be exercised by or under the
direction of the board of directors.
3.2 Number of Directors. The number of directors of the
corporation shall be determined by resolution of the board of directors or by
the stockholders.
No reduction of the authorized number of directors shall have the
effect of removing any director before that director's term of office
expires.
3.3 Election, Qualification and Term of Office of Directors.
Except as provided in Section 3.4 of these bylaws, directors shall be elected
at each annual meeting of stockholders to hold office until the next annual
meeting. Directors need not be stockholders unless so required by the
certificate of incorporation or these bylaws, wherein other qualifications
for directors may be prescribed. Each director, including a director elected
to fill a vacancy, shall hold office until his successor is elected and
qualified or until his earlier resignation or removal.
Elections of directors need not be by written ballot.
3.4 Resignation and Vacancies. Any director may resign at any
time upon written notice to the corporation. When one or more directors so
resigns and the resignation is effective at a future date, a majority of the
directors then in office, including those who have so resigned, shall have
power to fill such vacancy or vacancies, the vote thereon to take effect when
such resignation or resignations shall become effective, and each director so
chosen shall hold office as provided in this section in the filling of other
vacancies.
Unless otherwise provided in the certificate of incorporation or
these bylaws:
(i) Vacancies and newly created directorships resulting from
any increase in the authorized number of directors elected by all of the
stockholders having the right to vote as a single class may be filled by a
majority of the directors then in office, although less than a quorum, or by
a sole remaining director.
(ii) Whenever the holders of any class or classes of stock or
series thereof are entitled to elect one or more directors by the provisions
of the certificate of incorporation, vacancies and newly created
directorships of such class or classes or series may be filled by a majority
of the directors elected by such class or classes or series thereof then in
office, or by a sole remaining director so elected.
If at any time, by reason of death or resignation or other cause,
the corporation should have no directors in office, then any officer or any
stockholder or an executor, administrator, trustee or guardian of a
stockholder, or other fiduciary entrusted with like responsibility for the
person or estate of a stockholder, may call a special meeting of stockholders
in accordance with the provisions of the certificate of incorporation or
these bylaws, or may apply to the Court of Chancery for a decree summarily
ordering an election as provided in Section 211 of the General Corporation
Law of Delaware.
If, at the time of filling any vacancy or any newly created
directorship, the directors then in office constitute less than a majority of
the whole board (as constituted immediately prior to any such increase), then
the Court of Chancery may, upon application of any stockholder or
stockholders holding at least ten (10) percent of the total number of the
shares at the time outstanding having the right to vote for such directors,
summarily order an election to be held to fill any such vacancies or newly
created directorships, or to replace the directors chosen by the directors
then in office as aforesaid, which election shall be governed by the
provisions of Section 211 of the General Corporation Law of Delaware as far
as applicable.
3.5 Place of Meetings; Meetings by Telephone. The board of
directors of the corporation may hold meetings, both regular and special,
either within or outside the State of Delaware.
Unless otherwise restricted by the certificate of incorporation or
these bylaws, members of the board of directors, or any committee designated
by the board of directors, may participate in a meeting of the board of
directors, or any 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 in a meeting shall
constitute presence in person at the meeting.
3.6 First Meetings. The first meeting of each newly elected board
of directors shall be held at such time and place as shall be fixed by the
vote of the stockholders at the annual meeting and no notice of such meeting
shall be necessary to the newly elected directors in order legally to
constitute the meeting, provided a quorum shall be present. In the event of
the failure of the stockholders to fix the time or place of such first
meeting of the newly elected board of directors, or in the event such meeting
is not held at the time and place so fixed by the stockholders, the meeting
may be held at such time and place as shall be specified in a notice given as
hereinafter provided for special meetings of the board of directors, or as
shall be specified in a written waiver signed by all of the directors.
3.7 Regular Meetings. Regular meetings of the board of directors
may be held without notice at such time and at such place as shall from time
to time be determined by the board.
3.8 Special Meetings; Notice. Special meetings of the board of
directors for any purpose or purposes may be called at any time by the
chairman of the board, the president, any vice president, the secretary or
any two (2) directors.
Notice of the time and place of special meetings of the board shall
be delivered personally or by telephone to each director or sent by first-
class mail, facsimile, electronic mail, or telegram (with charges prepaid)
transmitted or addressed to each director at the facsimile number or address
such director has supplied to the corporation. Notice by mail shall be
deposited in the United States mail at least four (4) days before the time
set for holding the meeting. Notice delivered personally or by telephone
shall be given, notice by facsimile or electronic mail shall be transmitted,
and notice by telegram shall be delivered to the telegraph company, at least
forty-eight (48) hours before the time set for holding the meeting. Any oral
notice given personally or by telephone may be communicated either to the
director or to a person at the home or an office of the director who the
person giving the notice has reason to believe will promptly communicate it
to the director.
3.9 Quorum. At all meetings of the board of directors, a majority
of the authorized number of directors shall constitute a quorum for the
transaction of business and the act
of a majority of the directors present at any meeting at which there is a
quorum shall be the act of the board of directors, except as may be otherwise
specifically provided by statute or by the certificate of incorporation. If
a quorum is not present at any meeting of the board of directors, then the
directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum is present.
3.10 Waiver of Notice. Whenever notice is required to be given
under any provision of the General Corporation Law of Delaware or of the
certificate of incorporation or these bylaws, a written waiver thereof,
signed by the person entitled to notice, whether before or after the time
stated therein, shall be deemed equivalent to notice. Attendance of a person
at a meeting shall constitute a waiver of notice of such meeting, except when
the person 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. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the
directors, or members of a committee of directors, need be specified in any
written waiver of notice unless so required by the certificate of
incorporation or these bylaws.
3.11 Adjourned Meeting; Notice. If a quorum is not present at any
meeting of the board of directors, then the directors present thereat may
adjourn the meeting from time to time, without notice other than announcement
at the meeting, until a quorum is present.
3.12 Board Action by Written Consent 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 of any committee thereof, may be taken without a meeting if all
members of the board or committee, as the case may be, consent thereto in
writing and the writing or writings are filed with the minutes of proceedings
of the board or committee.
3.13 Fees and Compensation of Directors. Unless otherwise
restricted by the certificate of incorporation or these bylaws, the board of
directors shall have the authority to fix the compensation of directors.
3.14 Approval of Loans to Officers. The corporation may lend money
to, or guarantee any obligation of, or otherwise assist any officer or other
employee of the corporation or of its subsidiary, including any officer or
employee who is a director of the corporation or its subsidiary, whenever, in
the judgment of the directors, such loan, guaranty or assistance may
reasonably be expected to benefit the corporation. The loan, guaranty or
other assistance may be with or without interest and may be unsecured, or
secured in such manner as the board of directors shall approve, including,
without limitation, a pledge of shares of stock of the corporation. Nothing
in this section contained shall be deemed to deny, limit or restrict the
powers of guaranty or warranty of the corporation at common law or under any
statute.
3.15 Removal of Directors. Unless otherwise restricted by statute,
by the certificate of incorporation or by these bylaws, any director or the
entire board of directors may be removed, with or without cause, by the
holders of a majority of the shares then entitled to vote at an election of
directors.
No reduction of the authorized number of directors shall have the
effect of removing any director prior to the expiration of such director's
term of office.
Article IV
COMMITTEES
4.1 Committees of Directors. The board of directors may, by
resolution passed by a majority of the whole board, designate one or more
committees, with each committee to consist of one or more of the directors of
the corporation. The board may designate one or more directors as alternate
members of any committee, who may replace any absent or disqualified member
at any meeting of the committee. 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 any such absent or disqualified member.
Any such committee, to the extent provided in the resolution of the board of
directors or in the bylaws of the corporation, shall have and may exercise
all the powers 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 that may require it; but no such
committee shall have the power or authority to (i) amend 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 as provided in Section 151(a) of the
General Corporation Law of Delaware, fix any of the preferences or rights of
such shares relating to dividends, redemption, dissolution, any distribution
of assets of the corporation or the conversion into, or the exchange of such
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), (ii) adopt
an agreement of merger or consolidation under Sections 251 or 252 of the
General Corporation Law of Delaware, (iii) recommend to the stockholders the
sale, lease or exchange of all or substantially all of the corporation's
property and assets, (iv) recommend to the stockholders a dissolution of the
corporation or a revocation of a dissolution, or (v) amend the bylaws of the
corporation; and, unless the board resolution establishing the committee, the
bylaws or the certificate of incorporation expressly so provide, no such
committee shall have the power or authority to declare a dividend, to
authorize the issuance of stock, or to adopt a certificate of ownership and
merger pursuant to Section 253 of the General Corporation Law of Delaware.
4.2 Committee Minutes. Each committee shall keep regular minutes
of its meetings and report the same to the board of directors when required.
4.3 Meetings and Action of Committees. Meetings and actions of
committees shall be governed by, and held and taken in accordance with, the
provisions of Article III of these bylaws, Section 3.5 (place of meetings and
meetings by telephone), Section 3.7 (regular meetings), Section 3.8 (special
meetings and notice), Section 3.9 (quorum), Section 3.10 (waiver of notice),
Section 3.11 (adjournment and notice of adjournment), and Section 3.12
(action without a meeting), with such changes in the context of those bylaws
as are necessary to substitute the committee and its members for the board of
directors and its members; provided, however, that the time of regular
meetings of committees may also be called by resolution of the board of
directors and that notice of special meetings of committees shall also be
given to all alternate members, who shall have the right to attend all
meetings of the committee. The board of directors may adopt rules for the
government of any committee not inconsistent with the provisions of these
bylaws.
Article V
OFFICERS
5.1 Officers. The officers of the corporation shall be a
president, one or more vice presidents, a secretary, and a treasurer. The
corporation may also have, at the discretion of the board of directors, a
chairman of the board, one or more assistant vice presidents, assistant
secretaries, assistant treasurers, and any such other officers as may be
appointed in accordance with the provisions of Section 5.3 of these bylaws.
Any number of offices may be held by the same person.
5.2 Election of Officers. The officers of the corporation, except
such officers as may be appointed in accordance with the provisions of
Sections 5.3 or 5.5 of these bylaws, shall be chosen by the board of
directors, subject to the rights, if any, of an officer under any contract of
employment.
5.3 Subordinate Officers. The board of directors may appoint, or
empower the president to appoint, such other officers and agents as the
business of the corporation may require, each of whom shall hold office for
such period, have such authority, and perform such duties as are provided in
these bylaws or as the board of directors may from time to time determine.
5.4 Removal and Resignation of Officers. Subject to the rights,
if any, of an officer under any contract of employment, any officer may be
removed, either with or without cause, by an affirmative vote of the majority
of the board of directors at any regular or special meeting of the board or,
except in the case of an officer chosen by the board of directors, by any
officer upon whom such power of removal may be conferred by the board of
directors.
Any officer may resign at any time by giving written notice to the
corporation. Any resignation shall take effect at the date of the receipt of
that notice or at any later time specified in that notice; and, unless
otherwise specified in that notice, the acceptance of the resignation shall
not be necessary to make it effective. Any resignation is without prejudice
to the rights, if any, of the corporation under any contract to which the
officer is a party.
5.5 Vacancies in Offices. Any vacancy occurring in any office of
the corporation shall be filled by the board of directors.
5.6 Chairman of the Board. The chairman of the board, if such an
officer be elected, shall, if present, preside at meetings of the board of
directors and exercise and perform such other powers and duties as may from
time to time be assigned to him by the board of directors or as may be
prescribed by these bylaws. If there is no president, then the chairman of
the board shall also be the chief executive officer of the corporation and
shall have the powers and duties prescribed in Section 5.7 of these bylaws.
5.7 President. Subject to such supervisory powers, if any, as may
be given by the board of directors to the chairman of the board, if there be
such an officer, the president shall be the chief executive officer of the
corporation and shall, subject to the control of the board of directors, have
general supervision, direction, and control of the business and the officers
of the corporation. He shall preside at all meetings of the shareholders
and, in the absence or nonexistence of a chairman of the board, at all
meetings of the board of directors. He shall have the general powers and
duties of management usually vested in the office of president of a
corporation and shall have such other powers and duties as may be prescribed
by the board of directors or these bylaws.
5.8 Vice President. In the absence or disability of the
president, the vice presidents, if any, in order of their rank as fixed by
the board of directors or, if not ranked, a vice president designated by the
board of directors, shall perform all the duties of the president and when so
acting shall have all the powers of, and be subject to all the restrictions
upon, the president. The vice presidents shall have such other powers and
perform such other duties as from time to time may be prescribed for them
respectively by the board of directors, these bylaws, the president or the
chairman of the board. If there is no treasurer, then one of the vice
presidents shall also be elected the chief financial officer of the
corporation and shall have the powers and duties prescribed in Section 5.10
of these bylaws.
5.9 Secretary. The secretary shall keep or cause to be kept, at
the principal executive office of the corporation or such other place as the
board of directors may direct, a book of minutes of all meetings and actions
of directors, committees of directors, and shareholders. The minutes shall
show the time and place of each meeting, whether regular or special (and, if
special, how authorized and the notice given), the names of those present at
directors' meetings or committee meetings, the number of shares present or
represented at shareholders' meetings, and the proceedings thereof.
The secretary shall keep, or cause to be kept, at the principal
executive office of the corporation or at the office of the corporation's
transfer agent or registrar, as determined by resolution of the board of
directors, a share register, or a duplicate share register, showing the names
of all shareholders and their addresses, the number and classes of shares
held by each, the number and date of certificates evidencing such shares, and
the number and date of cancellation of every certificate surrendered for
cancellation.
The secretary shall give, or cause to be given, notice of all
meetings of the shareholders and of the board of directors required to be
given by law or by these bylaws. He shall keep the seal of the corporation,
if one be adopted, in safe custody and shall have such other powers and
perform such other duties as may be prescribed by the board of directors or
by these bylaws.
5.1 Treasurer. The treasurer shall keep and maintain, or cause to
be kept and maintained, adequate and correct books and records of accounts of
the properties and business transactions of the corporation, including
accounts of its assets, liabilities, receipts, disbursements, gains, losses,
capital, retained earnings, and shares. The books of account shall at all
reasonable times be open to inspection by any director.
The treasurer shall deposit all money and other valuables in the
name and to the credit of the corporation with such depositaries as may be
designated by the board of directors. He shall disburse the funds of the
corporation as may be ordered by the board of directors, shall render to the
president and directors, whenever they request it, an account of all of his
transactions as treasurer and of the financial condition of the corporation,
and shall have such other powers and perform such other duties as may be
prescribed by the board of directors or these bylaws.
5.11 Assistant Secretary. The assistant secretary, or, if there is
more than one, the assistant secretaries in the order determined by the
stockholders or board of directors (or if there be no such determination,
then in the order of their election) shall, in the absence of the secretary
or in the event of his or her inability or refusal to act, perform the duties
and exercise the powers of the secretary and shall perform such other duties
and have such other powers as the board of directors or the stockholders may
from time to time prescribe.
5.12 Assistant Treasurer. The assistant treasurer, or, if there is
more than one, the assistant treasurers, in the order determined by the
stockholders or board of directors (or if there be no such determination,
then in the order of their election), shall, in the absence of the treasurer
or in the event of his or her inability or refusal to act, perform the duties
and exercise the powers of the treasurer and shall perform such other duties
and have such other powers as the board of directors or the stockholders may
from time to time prescribe.
5.13 Authority and Duties of Officers. In addition to the
foregoing authority and duties, all officers of the corporation shall
respectively have such authority and perform such duties in the management of
the business of the corporation as may be designated from time to time by the
board of directors or the stockholders.
Article VI
INDEMNITY
6.1 Indemnification of Directors and Officers. The corporation
shall, to the maximum extent and in the manner permitted by the General
Corporation Law of Delaware, indemnify each of its directors and officers
against expenses (including attorneys' fees), judgments, fines, settlements,
and other amounts actually and reasonably incurred in connection with any
proceeding, arising by reason of the fact that such person is or was an agent
of the corporation. For purposes of this Section 6.1, a "director" or
"officer" of the corporation includes any person (i) who is or was a director
or officer of the corporation, (ii) who is or was serving at the request of
the corporation as a director or officer of another corporation, partnership,
joint venture, trust or other enterprise, or (iii) who was a director or
officer of a corporation which was a predecessor corporation of the
corporation or of another enterprise at the request of such predecessor
corporation.
6.2 Indemnification of Others. The corporation shall have the
power, to the extent and in the manner permitted by the General Corporation
Law of Delaware, to indemnify each of its employees and agents (other than
directors and officers) against expenses (including attorneys' fees),
judgments, fines, settlements, and other amounts actually and reasonably
incurred in connection with any proceeding, arising by reason of the fact
that such person is or was an agent of the corporation. For purposes of this
Section 6.2, an "employee" or "agent" of the corporation (other than a
director or officer) includes any person (i) who is or was an employee or
agent of the corporation, (ii) who is or was serving at the request of the
corporation as an employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, or (iii) who was an employee or
agent of a corporation which was a predecessor corporation of the corporation
or of another enterprise at the request of such predecessor corporation.
6.3 Insurance. The corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent 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 or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising out
of his status as such, whether or not the corporation would have the power to
indemnify him against such liability under the provisions of the General
Corporation Law of Delaware.
Article VII
RECORDS AND REPORTS
7.1 Maintenance and Inspection of Records. The corporation shall,
either at its principal executive office or at such place or places as
designated by the board of directors, keep a record of its shareholders
listing their names and addresses and the number and class of shares held by
each shareholder, a copy of these bylaws as amended to date, accounting
books, and other records.
Any stockholder of record, in person or by attorney or other agent,
shall, upon written demand under oath stating the purpose thereof, have the
right during the usual hours for business to inspect for any proper purpose
the corporation's stock ledger, a list of its stockholders, and its other
books and records and to make copies or extracts therefrom. A proper purpose
shall mean a purpose reasonably related to such person's interest as a
stockholder. In every instance where an attorney or other agent is the person
who seeks the right to inspection, the demand under oath shall be accompanied
by a power of attorney or such other writing that authorizes the attorney or
other agent to so act on behalf of the stockholder. The demand under oath
shall be directed to the corporation at its registered office in Delaware or
at its principal place of business.
The officer who has charge of the stock ledger of a corporation
shall prepare and make, at least ten (10) 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 of each
stockholder 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 (10) 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 also be produced and kept at
the time and place of the meeting during the whole time thereof, and may be
inspected by any stockholder who is present.
7.2 Inspection by Directors. Any director shall have the right to
examine the corporation's stock ledger, a list of its stockholders, and its
other books and records for a purpose reasonably related to his position as
a director. The Court of Chancery is hereby vested with the exclusive
jurisdiction to determine whether a director is entitled to the inspection
sought. The Court may summarily order the corporation to permit the director
to inspect any and all books and records, the stock ledger, and the stock
list and to make copies or extracts therefrom. The Court may, in its
discretion, prescribe any limitations or conditions with reference to the
inspection, or award such other and further relief as the Court may deem just
and proper.
7.3 Annual Statement to Stockholders. The board of directors shall
present at each annual meeting, and at any special meeting of the
stockholders when called for by vote of the stockholders, a full and clear
statement of the business and condition of the corporation.
7.4 Representation of Shares of Other Corporations. The chairman
of the board, the president, any vice president, the treasurer, the secretary
or assistant secretary of this corporation, or any other person authorized by
the board of directors or the president or a vice president, is authorized to
vote, represent, and exercise on behalf of this corporation all rights
incident to any and all shares of any other corporation or corporations
standing in the name of this corporation. The authority granted herein may be
exercised either by such person directly or by any other person authorized to
do so by proxy or power of attorney duly executed by such person having the
authority.
Article VIII
GENERAL MATTERS
8.1 Checks. From time to time, the board of directors shall
determine by resolution which person or persons may sign or endorse all
checks, drafts, other orders for payment of money, notes or other evidences
of indebtedness that are issued in the name of or payable to the corporation,
and only the persons so authorized shall sign or endorse those instruments.
8.2 Execution of Corporate Contracts and Instruments. The board of
directors, except as otherwise provided in these bylaws, may authorize any
officer or officers, or agent or agents, to enter into any contract or
execute any instrument in the name of and on behalf of the corporation; such
authority may be general or confined to specific instances. Unless so
authorized or ratified by the board of directors or within the agency power
of an officer, no officer, agent or employee shall have any power or
authority to bind the corporation by any contract or engagement or to pledge
its credit or to render it liable for any purpose or for any amount.
8.3 Stock Certificates; Partly Paid Shares. The shares of a
corporation shall be represented by certificates, provided that the board of
directors of the corporation may provide by resolution or resolutions that
some or all of any or all classes or series of its stock shall be
uncertificated shares. Any such resolution shall not apply to shares
represented by a certificate until such certificate is surrendered to the
corporation. Notwithstanding the adoption of such a resolution by the board
of directors, every holder of stock represented by certificates and upon
request every holder of uncertificated shares shall be entitled to have a
certificate signed by, or in the name of the corporation by the chairman or
vice-chairman of the board of directors, or the president or vice-president,
and by the treasurer or an assistant treasurer, or the secretary or an
assistant secretary of such corporation representing the number of shares
registered in certificate form. Any or all of the signatures on the
certificate may be a facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate has 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 were such officer, transfer agent or registrar at the date of
issue.
The corporation may issue the whole or any part of its shares as
partly paid and subject to call for the remainder of the consideration to be
paid therefor. Upon the face or back of each stock certificate issued to
represent any such partly paid shares, upon the books and records of the
corporation in the case of uncertificated partly paid shares, the total
amount of the consideration to be paid therefor and the amount paid thereon
shall be stated. Upon the declaration of any dividend on fully paid shares,
the corporation shall declare a dividend upon partly paid shares of the same
class, but only upon the basis of the percentage of the consideration
actually paid thereon.
8.4 Special Designation on Certificates. If the corporation is
authorized to issue more than one class of stock or more than one series of
any class, then the powers, the designations, the preferences, and the
relative, participating, optional or other special rights of each class of
stock or series thereof and the qualifications, limitations or restrictions
of such preferences and/or rights shall be set forth in full or summarized on
the face or back of the certificate that the corporation shall issue to
represent such class or series of stock; provided, however, that, except as
otherwise provided in Section 202 of the General Corporation Law of Delaware,
in lieu of the foregoing requirements there may be set forth on the face or
back of the certificate that the corporation shall issue to represent such
class or series of stock a statement that the corporation will furnish
without charge to each stockholder who so requests the powers, the
designations, the preferences, and the relative, participating, optional or
other special rights of each class of stock or series thereof and the
qualifications, limitations or restrictions of such preferences and/or
rights.
8.5 Lost Certificates. Except as provided in this Section 8.5, no
new certificates for shares shall be issued to replace a previously issued
certificate unless the latter is surrendered to the corporation and canceled
at the same time. The corporation may issue a new certificate of stock or
uncertificated shares in the place of any certificate theretofore issued by
it, alleged to have been lost, stolen or destroyed, and the corporation may
require the owner of the lost, stolen or destroyed certificate, or his legal
representative, to give the corporation a bond sufficient to indemnify it
against any claim that may be made against it on account of the alleged loss,
theft or destruction of any such certificate or the issuance of such new
certificate or uncertificated shares.
8.6 Construction; Definitions. Unless the context requires
otherwise, the general provisions, rules of construction, and definitions in
the Delaware General Corporation Law shall govern the construction of these
bylaws. Without limiting the generality of this provision, the singular
number includes the plural, the plural number includes the singular, and the
term "person" includes both a corporation and a natural person.
8.7 Dividends. The directors of the corporation, subject to any
restrictions contained in the certificate of incorporation, may declare and
pay dividends upon the shares of its capital stock pursuant to the General
Corporation Law of Delaware. Dividends may be paid in cash, in property, or
in shares of the corporation's capital stock.
The directors of the corporation may set apart out of any of the
funds of the corporation available for dividends a reserve or reserves for
any proper purpose and may abolish any such reserve. Such purposes shall
include but not be limited to equalizing dividends, repairing or maintaining
any property of the corporation, and meeting contingencies.
8.8 Fiscal Year. The fiscal year of the corporation shall be fixed
by resolution of the board of directors and may be changed by the board of
directors.
8.9 Seal. The seal of the corporation shall be in such form as the
board of directors may from time to time prescribe. The seal may be used by
causing it or a facsimile thereof to be reproduced upon or impressed directly
on the instrument or writing to be sealed, or upon an adhesive substance to
be affixed thereto. The seal on any corporate obligation for the payment of
money may be a facsimile, engraved or printed.
8.10 Transfer of Stock. Upon surrender to the corporation or the
transfer agent of the corporation of a certificate for shares duly endorsed
or accompanied by proper evidence of succession, assignation or authority to
transfer, it shall be the duty of the corporation to issue a new certificate
to the person entitled thereto, cancel the old certificate, and record the
transaction in its books.
8.11 Stock Transfer Agreements. The corporation shall have power to
enter into and perform any agreement with any number of shareholders of any
one or more classes of stock of the corporation to restrict the transfer of
shares of stock of the corporation of any one or more classes owned by such
stockholders in any manner not prohibited by the General Corporation Law of
Delaware.
8.12 Registered Stockholders. The corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the
owner of shares to receive dividends and to vote as such owner, shall be
entitled to hold liable for calls and assessments the person registered on
its books as the owner of shares, and shall not be bound to recognize any
equitable or other claim to or interest in such share or shares on the part
of another person, whether or not it shall have express or other notice
thereof, except as otherwise provided by the laws of Delaware.
Article IX
AMENDMENTS
The original or other bylaws of the corporation may be adopted,
amended or repealed by the stockholders entitled to vote; provided, however,
that the corporation may, in its certificate of incorporation, confer the
power to adopt, amend or repeal bylaws upon the directors. The fact that such
power has been so conferred upon the directors shall not divest the
stockholders of the power, nor limit their power to adopt, amend or repeal
bylaws.
Article X
DISSOLUTION
If it should be deemed advisable in the judgment of the board of
directors of the corporation that the corporation should be dissolved, the
board, after the adoption of a resolution to that effect by a majority of the
whole board at any meeting called for that purpose, shall cause notice to be
mailed to each stockholder entitled to vote thereon of the adoption of the
resolution and of a meeting of stockholders to take action upon the
resolution.
At the meeting a vote shall be taken for and against the proposed
dissolution. If a majority of the outstanding stock of the corporation
entitled to vote thereon votes for the proposed dissolution, then a
certificate stating that the dissolution has been authorized in accordance
with the provisions of Section 275 of the General Corporation Law of Delaware
and setting forth the names and residences of the directors and officers
shall be executed, acknowledged, and filed and shall become effective in
accordance with Section 103 of the General Corporation Law of Delaware. Upon
such certificate becoming effective in accordance with Section 103 of the
General Corporation Law of Delaware, the corporation shall be dissolved.
Whenever all the stockholders entitled to vote on a dissolution
consent in writing, either in person or by duly authorized attorney, to a
dissolution, no meeting of directors or stockholders shall be necessary. The
consent shall be filed and shall become effective in accordance with Section
103 of the General Corporation Law of Delaware. Upon such consent becoming
effective in accordance with Section 103 of the General Corporation Law of
Delaware, the corporation shall be dissolved. If the consent is signed by an
attorney, then the original power of attorney or a photocopy thereof shall be
attached to and filed with the consent. The consent filed with the Secretary
of State shall have attached to it the affidavit of the secretary or some
other officer of the corporation stating that the consent has been signed by
or on behalf of all the stockholders entitled to vote on a dissolution; in
addition, there shall be attached to the consent a certification by the
secretary or some other officer of the corporation setting forth the names
and residences of the directors and officers of the corporation.
Article XI
CUSTODIAN
11.1 Appointment of a Custodian in Certain Cases. The Court of
Chancery, upon application of any stockholder, may appoint one or more
persons to be custodians and, if the corporation is insolvent, to be
receivers, of and for the corporation when:
(i) at any meeting held for the election of directors the
stockholders are so divided that they have failed to elect successors to
directors whose terms have expired or would have expired upon qualification
of their successors; or
(ii) the business of the corporation is suffering or is
threatened with irreparable injury because the directors are so divided
respecting the management of the affairs of the corporation that the required
vote for action by the board of directors cannot be obtained and the
stockholders are unable to terminate this division; or
(iii) the corporation has abandoned its business and has
failed within a reasonable time to take steps to dissolve, liquidate or
distribute its assets.
11.2 Duties of Custodian. The custodian shall have all the powers
and title of a receiver appointed under Section 291 of the General
Corporation Law of Delaware, but the authority of the custodian shall be to
continue the business of the corporation and not to liquidate its affairs and
distribute its assets, except when the Court of Chancery otherwise orders and
except in cases arising under Sections 226(a)(3) or 352(a)(2) of the General
Corporation Law of Delaware.
EMPLOYMENT AGREEMENT dated as at October 16, 1998 ("Agreement"),
between Industri-Matematik American Operations, Inc. ("Company")
and Philippe Beaurain ("Employee").
BACKGROUND.
A. The Employee will be employed by the Company as of October
19, 1998.
B. The Company desires to have the benefit of Employee's
knowledge and experience in the business of the Company, the
Company's parent, Industri-Matematik International Corp. ("IMIC"),
and IMIC's other subsidiaries (Company, IMIC, and the IMIC
subsidiaries collectively, "IMIC Group").
C. The Employee desires to be employed by the Company upon the
terms and conditions set forth in this Agreement.
IT IS AGREED:
1. Employment.
1.1. Duties and Responsibilities. The Company hereby offers
employment to the Employee, and Employee hereby accepts employment
with the Company. During the Employment Term, Employee shall
serve as a Vice President of Americas Services of the Company, and
Employee shall perform all duties and accept all responsibilities
incidental to such position or as may be assigned to Employee by
the Company's President, the Chief Executive Officer, and/or
Employee's Manager of IMIC and Employee shall cooperate fully with
other Executive Officers of IMIC.
1.2. Extent of Service. During the Employment Term,
Employee shall (a) use his best efforts in the business of the
IMIC Group, (ii) devote his full business time and substantially
all of his attention and energy to the business of the IMIC Group
and to the performance of Employee's services and the discharge of
Employee's duties and responsibilities pursuant to this Agreement,
(iii) faithfully and diligently perform his duties and
responsibilities pursuant to this Agreement, and (iv) conduct
himself in a competent and professional manner which reflects
positively upon the IMIC Group. Subject to the provisions of
Section 4.2.b, the foregoing shall not be construed to prevent
Employee from making investments in other businesses or
enterprises, provided that Employee agrees not to become engaged
in any other activity that may interfere with Employee's ability
to discharge Employee's duties and responsibilities pursuant to
this Agreement. In addition to the restrictions set forth in
Section 4.2, Employee further agrees that he may not work either
on a part time or independent contractor basis or in any other
capacity during the Employment Term without the prior written
approval of the Company's President and/or IMIC's Chief Executive
Officer. The location at which Employee shall be obligated to
perform his duties shall require him to move his personal
residence and acknowledge that business travel is an integral part
of the performance of his duties.
1.3. Employment Term. The term of employment under this
Agreement ("Employment Term") shall commence on October 19, 1998,
and shall continue unless terminated earlier in accordance with
Section 3.
1.4. Company Policies. Employee shall comply with all
employment policies and practices of the Company and/or the IMIC
Group announced in writing from time to time, including, without
limitation, all policies and practices related to the receipt of
confidential information, the purchase and sale of IMIC Common
Stock, and other policies related to general business ethics.
1.5. Employee Representation and Warranty. Employee hereby
represents to the Company that the execution and delivery of this
Agreement by him and the performance of his obligations pursuant
to this Agreement are not in violation of, and do not conflict
with or constitute a default under any agreement by which he is
bound (including any agreement pertaining to his prior employment
with another entity) or any order, decree, or judgment to which he
is subject, that this Agreement constitutes the valid and binding
obligation of Employee, and that he is not a party to or bound by
any agreement, understanding, or arrangement which would prevent
him from carrying out the terms of this Agreement or subject the
Company to liability for employing the Employee.
2. Compensation.
2.1. Salary and Variable Compensation. For all of the
services rendered during the Employment Term by Employee, the
Company shall:
2.1.a. pay Employee a base salary at the rate of
$200,000 per year ("Salary") in accordance with the Company's
normal payroll practices, which Salary may be increased from time
to time during the Employment Term in the sole discretion of the
Company;
2.1.b. pay Employee variable compensation as set
forth in the separate variable compensation agreement executed by
Employee and the Company applicable to that fiscal year.
2.1.c. Relocation Reimbursement. The Company does
require the Employee to relocate; the Company shall reimburse the
Employee for all expenses reasonably relating to the Employee
relocating to Marlton, NJ area between June 1999 and September
1999. Such expenses shall include all moving and storage expenses
and the like. The reimbursement shall be paid upon presentation of
paid receipts. You will also receive a one-time moving allowance
of $15,000 based on actual receipts. If you exceed $15,000, in
moving expenses, IMI will pay up to one half of the next $15,000
in expenses based on actual receipts.
2.2. Stock Options. On a date within 45 days of the date of
this Agreement as determined by the Compensation Committee of the
Board of Directors of IMIC Employee will be granted options to
purchase 75,000 shares of IMIC Common Stock at an exercise price
equal to the closing market price on the date of grant, pursuant
to the terms of the IMIC Stock Option Plan ("Plan"). All options
referred to in this Section 2.2 shall be designated as incentive
stock options to the maximum extent permitted by the Plan.
2.3. Automobile Allowance. Employee shall be paid an
automobile allowance of $450 per month.
2.4. Vacation. Employee shall be entitled to 20 days of
vacation per calendar year. The timing of vacation shall be
reviewed by the Employee's Manager and take place according to the
Company's business situation. Vacation days should be taken within
each calendar year, circumstances permitting. The Company's
President will consider, in his sole discretion, whether or not to
pay Employee for any accrued but unused vacation.
2.5. Fringe Benefits. Employee shall be entitled to such
fringe benefits, including but not limited to sick leave, medical
and dental benefits, and life insurance as are generally provided
by the Company to its other executives employees, subject to the
terms of the applicable plans and programs as such plans or
programs may be in effect from time to time; it being expressly
understood that the Company, in its sole and absolute discretion,
may determine to amend, revise, replace, or terminate any such
plans or programs at any time and/or in accordance with applicable
law, provided that no such amendment, revision, replacement, or
termination may affect Employee's vested rights.
2.6. Business Expenses. The Company shall reimburse
Employee for all ordinary and necessary out-of-pocket business
expenses incurred by Employee in connection with the discharge of
Employee's duties and responsibilities pursuant to this Agreement
during the Employment Term in accordance with the Company's
expense approval procedures in effect from time to time and upon
presentation to the Company of an itemized account and written
proof of such expenses. If the Company shall provide Employee
with any corporate credit cards or other similar instruments,
Employee shall use such cards or instruments solely for purposes
of performing his duties and responsibilities pursuant to this
Agreement and not for personal use, and shall return to the
Company all such cards and instruments immediately upon the
request of the Company.
3. Termination.
3.1. Disability. If the Company's President, Chief
Executive Officer, or Employee's Manager of IMIC has determined
that the Employee has become unable to perform Employee's duties
and responsibilities pursuant to this Agreement by reason of
physical, psychological, or emotional reasons, and if such
inability continues for more than 60 consecutive days or a total
of 90 days in any 180 day period, during which time the Company
shall continue to compensate Employee under this Agreement (with
such compensation to be reduced by the amount of any disability
payment or similar payment received by Employee for this time
period under any plan paid for by the IMIC Group or through
workers' compensation), the Employment Term may be terminated by
the Company, in which event Company shall have no further
liability or obligation to Employee except for payment of earned
but unpaid Salary, unpaid Variable Compensation if and as set
forth in a Variable Compensation Agreement, accrued but unpaid
automobile allowance, and incurred but unreimbursed business
expenses at the date of Employee's termination, and any additional
disability, severance, or other benefits otherwise payable to
Employee under any applicable policy or plan which covers Employee
at the time of Employee's termination and is in effect at that
time. If requested by the Company, Employee agrees to submit to a
physical examination by a licensed physician selected and paid for
by the Company.
3.2. Death. The Employment Term shall terminate on the
death of the Employee and the Company shall pay to Employee's
distributees, personal representatives, executors, or
administrators, as appropriate, an amount equal to any unpaid
balance of Employee's Salary payable for the month in which
Employee dies, unpaid Variable Compensation if and as set forth in
a Variable Compensation Agreement, accrued but unpaid automobile
allowance, and incurred but unreimbursed business expenses at the
date of death. The Company shall not have no further liability or
obligation under this Agreement to Employee's distributees,
personal representatives, executors, or administrators except as
may be defined by any of Company's existing employee benefit plans
which covered the Employee at the time of Employee's death.
3.3. Termination for Cause. The Company shall have the
right to terminate the Employment Term at any time for "cause"
upon notice to Employee. For purposes of this Agreement, "cause"
shall mean dishonesty, disloyalty, variable commission of a felony
or other crime involving moral turpitude, misappropriation of
funds, habitual insobriety, substance abuse, willful misconduct or
gross negligence in the performance of Employee's duties and
responsibilities under this Agreement, material breach by the
Employee of the terms of this Agreement, Employee's repeated
failure to follow the reasonable directives of the Company's
President, Chief Executive Officer, or Employee's Manager of IMIC
as to the time, place, and manner of performance of the Employees
duties and responsibilities under this Agreement, or any other
action on the part of Employee that is damaging or detrimental to
the IMIC Group. In the event Employee is terminated for "cause,"
all of the Company's compensation obligations pursuant to Section
2 will cease upon the effective date of the notice of termination
except for the payment of earned but unpaid Salary, accrued but
unpaid automobile allowances, and incurred but unreimbursed
business expenses at the effective date of termination.
3.4. Termination of Employee. The Company may terminate
this Agreement for any reason upon notice to Employee, and if the
Company terminates this Agreement for any reason other than
pursuant to Section 3.1, 3.2, or 3.3, the Company shall continue
to compensate Employee pursuant to and in accordance with all the
provisions of Section 2 for a one-year period following the date
of termination, plus any earned but unpaid Salary, earned but
unpaid Variable Compensation if and as set forth in a Variable
Compensation Agreement, accrued but unpaid automobile allowances,
and incurred but unreimbursed business expenses at the effective
date of termination.
3.5. Termination by Employee. Nothing in this Agreement
shall be construed to prevent the termination of the Employment
Term by Employee upon 180 days written notice. Upon written
notice of termination by Employee, the Company reserves the right
to waive the notice period and accept notice effective
immediately. In the event that Employee terminates the Agreement,
all of the Company's compensation obligations pursuant to Section
2, including any compensation to which Employee may become
entitled after giving notice, will cease upon the termination
date, except for the payment of earned but unpaid Salary, unpaid
Variable Compensation if and as set forth in a Variable
Compensation Agreement, accrued but unpaid automobile allowances,
and incurred but unreimbursed business expenses at the effective
date of termination.
4. Trade Secrets, Non-Competition, Non-Solicitation, Non-
Interference, Non-Disparagement, and Return of Materials.
4.1. Employee Acknowledgment. Employee acknowledge that:
(a) his employment by the Company will bring him into close
contact with many confidential affairs of the IMIC Group, (b) the
business of the IMIC Group is conducted throughout the world and
competes with similar businesses of other organizations, (c) the
IMIC Group carries on substantial promotional, marketing, and/or
sales activities throughout the world, and (d) the covenants
contained in Sections 4.2, 4.3, 4.4, and 4.5 of this Agreement are
specific inducements by Employee to the Company in connection with
the execution of this Agreement.
4.2. Trade Secrets, Non-Competition, and Non-Solicitation.
In recognition of the provisions of Section 4.1 and as
consideration for Employees' employment by the Company, the
payment by the Company to Employee of compensation, and the
Company providing Employee with benefits, Employee agrees that:
4.2.a. During the Employment Term and at all times
thereafter, Employee shall not disclose, communicate, or divulge
to any person (other than to officers, directors, or employees of
the IMIC Group whose duties require such knowledge) or use for
Employee's personal benefit or for the benefit of anyone other
than the IMIC Group any trade secrets, specifications, sales
plans, programs, research, software or applications development
plans, or other confidential information employed in or proposed
to be employed in the business of the IMIC Group which comes to or
came to Employee's knowledge in the course of or by reason of his
employment by the Company or his performance under this Agreement.
4.2.b. During the Employment Term, during any
period of time the Employee is performing services for any member
of the IMIC Group, and for a period of one year thereafter,
Employee shall not directly or indirectly anywhere in the world
enter into or in any manner take part as an employee, agent,
independent contractor, consultant, owner, sole proprietor,
partner, joint venturer, member, manager, officer, director, or
shareholder or take part in any other capacity in, for, or with
any person, firm, corporation, association, or business enter-
prise, or in any manner render any assistance to any business or
endeavor, whose business activities are the same or similar to,
the business which is conducted by the IMIC Group during the
course of Employee's employment by the Company, provided that the
provisions of this Section 4.2.b shall not preclude Employee from
ownership, as an investor, of less than 5% of the stock of a
publicly owned company which engages in such business activities.
4.3. Non-Interference. During the Employment Term, during
any period of time the Employee is performing services for the
IMIC Group, and for a period of one year thereafter, neither
Employee nor any person, firm, corporation, association, or
business enterprise with which Employee is affiliated as an
employee, agent, independent contractor, consultant, owner, sole
proprietor, partner, joint venturer, member, manager, officer,
director, or shareholder shall (a) directly or indirectly induce
or attempt to induce any employee of the IMIC Group to terminate
or alter his employment relationship with the IMIC Group, (b)
directly or indirectly hire any person who is or had been employed
by the IMIC Group, or (c) directly or indirectly interfere or
intervene in any way with the relationship between any member of
the IMIC Group and any of its licensees, customers,
subcontractors, suppliers, vendors, or partners.
4.4. Non-Disparagement. During the Employment Term and at
all times thereafter (a) Employee shall not directly or indirectly
disparage the name, reputation, products, or services of any
member of the IMIC Group and (b) the Company shall not, directly
or indirectly, disparage Employee's name or reputation.
4.5 Return of Materials. Employee agrees that all
memoranda, notes, records, papers, or other documents, all
software developed by or for the IMIC Group, including without
limitation System ESS Software, and all copies thereof relating to
the IMIC Group's operations or business, and all objects
associated therewith in any way obtained by Employee during the
course of his employment by the Company shall be the IMIC Group's
sole and exclusive property. Employee shall not, except for the
IMIC Group's use, copy, or duplicate any of the aforementioned
documents or objects, nor use any information concerning them
except for the IMIC Group's benefit, either during his employment
by the Company or thereafter. Employee agrees that he will
deliver all of the aforementioned documents, software, and objects
that may be in his possession to the IMIC Group on termination of
his employment, or any other time upon the Company's request,
together with his written certification of compliance with the
provisions of this Section 4.5.
4.6. Additional Provisions.
4.6.a. In the event that the provisions of
Sections 4.2, 4.3, 4.4, or 4.5 should be deemed unenforceable, in-
valid, or overbroad in whole or in part for any reason, any court
of competent jurisdiction, or the Arbitrator appointed in
accordance with the provisions of Section 5.1, whichever forum is
designated by the injured party, is hereby authorized, requested,
and instructed to reform such sections consistent with the intent
of Sections 4.2, 4.3, 4.4, or 4.5 to provide for the maximum
restraints upon (i) Employee's activities (including, but not
limited to, time, geographic area, customer solicitation,
relationship interference, employee solicitation, and
disparagement) and (ii) with respect to Section 4.4, the Company's
activities, which may then be legal and valid.
4.6.b. The Company and Employee agree that
violation by Employee of the provisions of Sections 4.2, 4.3, 4.4,
or 4.5 or by the Company of the provisions of Section 4.4 will
cause irreparable injury to the other for which any remedy at law
would be inadequate, and that the injured party shall be entitled
in any court of law or equity or in any arbitration proceeding in
accordance with Section 5.1, whichever forum is designated by the
injured party, to temporary, preliminary, permanent, and other
injunctive relief against any breach of the provisions contained
in such sections, and such punitive and compensatory damages as
shall be awarded. Further, in the event of a violation of the
provisions of Sections 4.2, 4.3, or 4.4, the period of non-
competition, non-solicitation, employee noninterference, or non-
disparagement referred to therein shall be extended for a period
of time equal to that period beginning on the date when such
violation commenced and ending when the activities constituting
that violation shall be finally terminated.
5. Arbitration and Jurisdiction.
5.1. Arbitration. Except for a determination to be made in
the discretion of the Company such as a determination of the
quota, and except as otherwise alternatively provided in Section
4.6, any controversy or claim arising out of or relating to this
Agreement, or the breach of this Agreement, shall be settled by
arbitration by one Arbitrator in New York, New York, in accordance
with the Rules of the American Arbitration Association, and
judgment upon the award rendered by the Arbitrator may be entered
in any court having jurisdiction thereof, provided that in the
event the IMIC Group commences a litigation pursuant to the
provisions of Section 4.6, all claims between the Company and
Employee shall be litigated and not arbitrated.
5.2. Jurisdiction. Each of the Company and Employee hereby
consents to the jurisdiction of the Supreme Court of the State of
New York for the County of New York and the United States District
Court for the Southern District of New York for all purposes in
connection with (a) the arbitration referred to in Section 5.1 and
(b) this Agreement, and further consents that any process or
notice of motion in connection therewith may be served by certi-
fied or registered mail or by personal service in accordance with
the provisions of Section 6, within or without the State of New
York, provided a reasonable time for appearance is allowed.
6. Notices. All notices provided for in this Agreement shall
be in writing and shall be given to the addresses set forth below
by registered or certified mail, return receipt requested, and by
regular mail, both with postage prepaid, or personally delivered,
or sent by facsimile transmission (provided the transmitting
device provides a record of transmission) or by prepaid express
mail or other overnight delivery service of any nationally
recognized private carrier guaranteeing overnight delivery. Any
such notice shall be deemed given (i) when so delivered personally
or sent by facsimile transmission if received at the receiving
location during business hours, (ii) on the next business day if
sent by facsimile transmission and received at the receiving
location after business hours, (iii) on the date of delivery if
sent by express or such private carrier guaranteeing overnight
delivery if delivered during business hours at the receiving
location, (iv) on the next business if sent by express mail or
such private carrier guaranteeing overnight delivery if delivered
at the receiving location at any time other than during business
hours, or (v) if mailed, five business days after the date of
deposit in the United States mail.
The addresses referred to above are:
Employee's address:1208 Tynsfield Road
Oakmont, PA 15139
With a copy to: _____________________
_____________________
_____________________
Attn: _______________
Company address:5 Greentree Centre, Suite 201
Marlton, NJ 08053
Attn: Therese Julo,
Director of Human Resources
With a copy to: Tannenbaum Dubin & Robinson, LLP
1140 Avenue of the Americas
New York, New York 10036
Attn: Marvin S. Robinson, Esq.
Either the Company or Employee at any time may give notice
of another address for it, him, or for copies in accordance with
the provisions of this Section 6.
7. Miscellaneous.
7.1. This Agreement (a) shall be governed by and construed
in accordance with the laws of the State of New York as if it were
an agreement made and to be performed entirely within such State,
(b) may not be modified or amended except by a writing signed by
each of the Company or its successors and Employee, (c) shall be
binding upon each of the Company and its successors and Employee
and his distributees, personal representatives, executors, and
administrators, and (d) contains the entire agreement and under-
standing between the Company and Employee with respect to the
subject matter of this Agreement and supersedes all prior
agreements, arrangements, and understandings, written or oral,
between the Company and Employee with respect to the subject
matter of this Agreement.
7.2. This Agreement may not be assigned by Employee. This
Agreement may be assigned by the Company to any other member of
the IMIC Group. This Agreement may not otherwise be assigned by
the Company or the IMIC Group without Employee's written consent
which shall not be unreasonably withheld or delayed.
7.3. The headings in this Agreement are inserted for
convenience of reference only and shall not in any manner affect
the construction or meaning of anything herein contained or govern
the rights or liabilities of the parties to this Agreement. All
pronouns used shall be adjusted to the appropriate number and
gender as required by the context and circumstances.
7.4. To the extent that this Agreement requires Employee to
comply with obligations for the benefit of any member of the IMIC
Group, each such entity shall be a third-party beneficiary of this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement.
INDUSTRI-MATEMATIK AMERIRICAN OPERATIONS, INC.
By:___________________________________
Carl Joelsson
Senior Vice President, World Wide Services
______________________________________
Philippe Beaurain
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND BALANCE SHEETS OF
INDUSTRI-MATEMATIK INTERNATIONAL CORP. AND SUBSIDIARIES ANNEXED HERETO AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0001016243
<NAME> INDUSTRI-MATEMATIK INTERNATIONAL CORP.
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> APR-30-1999 APR-30-1999
<PERIOD-START> NOV-1-1998 MAY-1-1998
<PERIOD-END> JAN-31-1999 JAN-31-1999
<CASH> 51,770,000 51,770,000
<SECURITIES> 19,916,000 19,916,000
<RECEIVABLES> 25,249,000 25,249,000
<ALLOWANCES> 3,248,000 3,248,000
<INVENTORY> 0 0
<CURRENT-ASSETS> 99,307,000 99,307,000
<PP&E> 15,490,000 15,490,000
<DEPRECIATION> 8,251,000 8,251,000
<TOTAL-ASSETS> 129,116,000 129,116,000
<CURRENT-LIABILITIES> 28,446,000 28,446,000
<BONDS> 0 0
<COMMON> 323,000 323,000
0 0
0 0
<OTHER-SE> 97,045,000 97,045,000
<TOTAL-LIABILITY-AND-EQUITY> 129,116,000 129,116,000
<SALES> 19,481,000 65,645,000
<TOTAL-REVENUES> 20,069,000 66,899,000
<CGS> 16,246,000 54,187,000
<TOTAL-COSTS> 16,653,000 54,824,000
<OTHER-EXPENSES> 17,506,000 50,598,000
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 37,000 112,000
<INCOME-PRETAX> (13,151,000) (34,885,000)
<INCOME-TAX> (4,225,000) (11,221,000)
<INCOME-CONTINUING> (8,926,000) (23,664,000)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (8,926,000) (23,664,000)
<EPS-PRIMARY> (0.28) (0.73)
<EPS-DILUTED> (0.28) (0.73)
</TABLE>
