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THIS PAPER DOCUMENT IS BEING SUBMITTED PURSUANT TO RULE 101(d) OF REGULATION
S-T.
As filed with the Securities and Exchange Commission on April 12, 1999
Registration Statement No. 333-72667
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
Amendment No. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------
MapQuest.com, Inc.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 7374 363949110
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer Identification No.)
of incorporation or organization) Classification Code Number)
</TABLE>
MapQuest.com, Inc. Michael J. Mulligan, Chief Executive Officer
3710 Hempland Road MapQuest.com, Inc.
Mountville, PA 17554 3710 Hempland Road
(717) 285-8500 Mountville, PA 17554
(717) 285-8500
(Address, including zip code, and (Name, address, including zip code,
telephone number, including area code, and telephone number, including area
of registrant's principal executive code, of agent for service)
offices)
-------------------
Copies to:
James B. Carlson, Esq. Alexander D. Lynch, Esq.
Mayer, Brown & Platt Alan P. Blaustein, Esq.
1675 Broadway Brobeck, Phleger & Harrison LLP
New York, NY 10019 1633 Broadway
(212) 506-2500 New York, NY 10019
(212) 581-1600
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after this registration statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Proposed Maximum
Title of Each Class of Aggregate Offering Amount of
Securities to be Registered Price(1)(2) Registration Fee
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<S> <C> <C>
Common Stock ($0.001 par value per
share)............................. $63,480,000 $17,648(3)
</TABLE>
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(1) The Company has granted to the Underwriters a 30-day option to purchase
additional shares of Common Stock solely to cover over-allotments, if any.
(2) Estimated solely for the purpose of computing the amount of the
registration fee pursuant to Rule 457(o) promulgated under the Securities
Act of 1933, as amended.
(3) $13,900 previously paid.
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933, as amended, or until this
registration statement shall become effective on such date as the Commission,
acting pursuant to said Section 8(a), may determine.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the +
+Securities and Exchange Commission is effective. This prospectus is not an +
+offer to sell securities, and we are not soliciting offers to buy these +
+securities, in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED APRIL 12, 1999
[LOGO] MAPQUEST.COM(TM)
4,600,000 Shares
Common Stock
We are offering 4,600,000 shares of our common stock. This is our initial
public offering, and no public market currently exists for our shares. We have
applied to have the shares we are offering approved for quotation on the Nasdaq
National Market under the symbol "MQST." We anticipate that the initial public
offering price will be between $10.00 and $12.00 per share.
Shares of common stock may be reserved for sale at the initial public
offering price to our employees, directors and other persons with relationships
with us. These employees, directors and other persons may purchase, in the
aggregate, not more than 10% of the common stock in this offering. See
"Underwriting."
--------------
Investing in our common stock involves risks.
See "Risk Factors" beginning on page 8.
--------------
<TABLE>
<CAPTION>
Per Share Total
--------- -----
<S> <C> <C>
Public Offering Price.......................................... $ $
Underwriting Discounts and Commissions......................... $ $
Proceeds to MapQuest........................................... $ $
</TABLE>
The Securities and Exchange Commission and state securities regulators have
not approved or disapproved these securities, or determined if this prospectus
is truthful or complete. Any representation to the contrary is a criminal
offense.
We have granted the underwriters a 30-day option to purchase up to an
additional 690,000 shares of common stock to cover over-allotments.
--------------
BancBoston Robertson Stephens
Thomas Weisel Partners LLC
U.S. Bancorp Piper Jaffray Volpe Brown Whelan & Company
The date of this prospectus is , 1999
<PAGE>
[Picture of the mapquest.com home page and logos of representative customers]
<PAGE>
[Sequential pictures illustrating MapQuest's Connect Services and logos of
representative customers]
<PAGE>
[Pictures of MapQuest maps on various web portals and third party websites and
logos of representative customers]
<PAGE>
You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. We are offering to sell, and seeking offers to
buy, shares of common stock only in jurisdictions where offers and sales are
permitted. The information contained in this prospectus is accurate only as of
the date of this prospectus, regardless of the time of delivery of this
prospectus or of any sale of our common stock.
Until , 1999, all dealers that buy, sell or trade our common stock,
whether or not participating in this offering, may be required to deliver a
prospectus. This requirement is in addition to the dealers' obligation to
deliver a prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.
---------------------
TABLE OF CONTENTS
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Page
----
<S> <C>
Prospectus Summary....................................................... 4
Risk Factors............................................................. 8
Forward-Looking Statements; Market Data.................................. 15
Use of Proceeds.......................................................... 16
Dividend Policy.......................................................... 16
Capitalization........................................................... 17
Dilution................................................................. 18
Selected Financial Data.................................................. 19
Management's Discussion and Analysis of Financial Condition and Results
of Operations.......................................................... 20
Business................................................................. 28
Management............................................................... 38
Certain Transactions..................................................... 47
Principal Stockholders................................................... 50
Description of Capital Stock............................................. 52
Shares Eligible for Future Sale.......................................... 54
Underwriting............................................................. 56
Legal Matters............................................................ 58
Experts.................................................................. 58
Where You Can Find More Information...................................... 58
Index to Financial Statements............................................ F-1
</TABLE>
---------------------
MapQuest and GeoSystems are registered trademarks and service marks of
MapQuest.com. This prospectus contains other trade names, trademarks and
service marks of MapQuest.com and of other companies.
3
<PAGE>
PROSPECTUS SUMMARY
You should read the following summary together with the more detailed
information regarding our company, the common stock being sold in this offering
and our financial statements and the notes relating to these financial
statements appearing elsewhere in this prospectus.
MapQuest
We are a leading online provider of mapping and destination information. By
effectively employing over 30 years of traditional and digital mapping
experience together with our proprietary integration and editing of geographic
databases, we provide comprehensive online mapping solutions to businesses and
customized maps, destination information and driving directions to consumers.
During February 1999, we delivered over 76.2 million maps and over 14.2 million
driving directions through our website and through third-party websites.
According to Media Metrix, Inc., in February 1999 mapquest.com had over 2.7
million unique visitors making it the number five travel/tourism Internet
property in terms of audience reach.
Our online products and services enable businesses to:
. Provide customized maps, destination information and driving
directions to potential customers;
. Expand the service offerings of their websites to attract and retain
users;
. Use outside sources to meet their map-generating and destination
information needs, thereby avoiding a significant portion of the
expenses normally associated with establishing and maintaining a map-
generating personnel and technology organization; and
. Provide potential customers with information regarding which of a
business' multiple locations is closest to the potential customer.
Our online products and services enable consumers to:
. Receive maps and destination information on a real-time basis based
on the specific location provided by the consumer;
. Generate detailed door-to-door driving directions at any time; and
. Create and retrieve customized maps based on the consumer's
preferences.
We are also a leading U.S. provider of traditional and digital mapping
products and services to the educational, reference, directory, travel and
governmental markets. In addition, companies that incorporate call centers, CD-
ROMs or driving direction kiosks into their information delivery strategy often
require non-Internet customized mapping solutions. We have developed our map-
generating software to provide mapping applications in these environments.
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Strategy
Our objective is to be the leading online provider of destination solutions
for businesses and consumers. Key elements of our strategy include:
. Building brand awareness by engaging in a number of advertising, public
relations and other marketing programs designed to promote our global
brand and build loyalty among our business and consumer customers;
. Expanding and enhancing our service by providing comprehensive, cost-
effective, accurate and easily accessible destination information and
value-added tools and features;
. Growing sales channels aggressively by building our direct field sales
force and developing strategic value-added reseller channel relationships
to target U.S. and international markets;
. Developing additional advertising opportunities by offering new methods
of targeted advertising based on a consumer's geographic information;
. Effectively employing our integrated geographic data in developing future
services and products; and
. Pursuing international opportunities to expand our access to additional
business customers seeking to improve the service offerings of their
websites and consumers seeking online map-related information.
The Offering
Common stock offered............
4,600,000 shares
Common stock to be outstanding
after this offering............
32,166,699 shares
Over-allotment option...........
690,000 shares
Use of proceeds.................
We intend to use approximately $8.6 million
of the net proceeds to redeem all outstanding
shares of our series B preferred stock. We
intend to use the remaining net proceeds for
expansion of sales and marketing
capabilities, product development, working
capital and other general corporate purposes.
Proposed Nasdaq National Market MQST
symbol.........................
Additional shares may be issued after this offering upon the exercise of
options and warrants.
You should be aware that we are permitted, and in some cases obligated, to
issue shares of common stock in addition to the common stock to be outstanding
after this offering. If and when we issue these shares, the percentage of
common stock you own may be diluted. The following is a summary of these
additional shares of common stock:
. 4,739,433 shares of common stock issuable upon exercise of outstanding
options, with a weighted average exercise price of $0.26 per share;
. 1,168,020 shares of common stock issuable upon exercise of outstanding
options, with an exercise price of the per share offering price of this
offering;
. 2,314,611 shares of common stock issuable upon exercise of outstanding
warrants, with a weighted average exercise price of $0.69;
5
<PAGE>
. 188,959 shares of common stock reserved for future issuance under
MapQuest's 1995 stock option plan;
. 3,645,000 shares of common stock that have been reserved for future
issuance under MapQuest's 1999 stock plan; and
. 1,755,000 shares of common stock that have been reserved for future
issuance under MapQuest's employee stock purchase plan.
Unless otherwise indicated, all information in this prospectus:
. reflects a 2.7-for-1 stock split of our common stock that will be
effected prior to the closing of this offering. This stock split of our
common stock will not impact the number of shares being offered and will
not have any impact on the purchasers of the shares in this offering;
. reflects the automatic conversion of all outstanding shares of our series
A preferred stock and series C preferred stock into 27,122,455 shares of
our common stock at the same time as the closing of this offering;
. reflects the redemption of all outstanding shares of our series B
preferred stock at the same time as the closing of this offering; and
. assumes that the underwriters do not exercise their option to purchase
additional shares after the closing of this offering.
--------------------
Our headquarters are located at 3710 Hempland Road, Mountville,
Pennsylvania 17554. Our telephone number at that location is (717) 285-8500.
Our website address is www.mapquest.com. The information contained on our
website is not part of this prospectus.
6
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Summary Financial Data
(in thousands, except per share data)
The following table sets forth our summary financial data. You should read
this information together with the financial statements and the notes to those
statements appearing elsewhere in this prospectus and the information under
"Selected Financial Data" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations." The pro forma as adjusted data
reflect the automatic conversion of all outstanding shares of our series A
preferred stock and series C preferred stock into 27,122,455 shares of our
common stock upon the closing of this offering. The pro forma as adjusted data
also reflect the sale of the common stock offered by this prospectus at an
assumed initial public offering price of $11.00 per share after deducting
underwriting discounts, estimated offering expenses payable by us, and the
redemption of all outstanding shares of our series B preferred stock. See the
financial statements and the notes to those statements appearing elsewhere in
this prospectus for the determination of shares used in computing basic and
diluted loss per share and pro forma basic and diluted loss per share.
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------
1996 1997 1998
------- -------- -------
<S> <C> <C> <C>
Statement of Operations Data:
Revenues
Business......................................... $ 7,020 $ 4,763 $ 6,536
Consumer......................................... 140 1,276 1,376
------- -------- -------
Total business and consumer revenues............ 7,160 6,039 7,912
Digital mapping.................................. 12,417 15,377 16,805
------- -------- -------
Total revenues................................. 19,577 21,416 24,717
Cost of revenues:
Business and consumer............................ 4,325 4,535 4,809
Digital mapping.................................. 7,995 10,767 12,837
------- -------- -------
Total costs of revenues........................ 12,320 15,302 17,646
------- -------- -------
Gross profit...................................... 7,257 6,114 7,071
Operating expenses:
Sales and marketing.............................. 4,455 7,257 5,243
Product development.............................. 2,619 5,048 2,955
General and administrative....................... 1,902 1,811 2,326
------- -------- -------
Total operating expenses....................... 8,976 14,116 10,524
------- -------- -------
Operating loss ................................... (1,719) (8,002) (3,453)
Interest income and expense, net.................. 199 136 54
Other income...................................... 244 267 244
------- -------- -------
Loss before provision for income taxes............ (1,276) (7,599) (3,155)
Provision for income taxes........................ -- -- --
------- -------- -------
Net loss.......................................... (1,276) (7,599) (3,155)
Less preferred stock dividends and accretion...... (525) (5,834) (667)
------- -------- -------
Net loss applicable to common stockholders........ $(1,801) $(13,433) $(3,822)
======= ======== =======
Basic and diluted loss per share.................. $ (8.84) $ (64.43) $(12.09)
Shares used to compute basic and diluted loss per
share........................................... 204 208 316
======= ======== =======
Pro forma basic and diluted loss per share........ $ (0.13)
=======
Shares used to compute pro forma basic and diluted
loss per share.................................. 27,439
=======
</TABLE>
<TABLE>
<CAPTION>
December 31, 1998
---------------------
Pro Forma
Actual As Adjusted
-------- -----------
<S> <C> <C>
Balance Sheet Data:
Cash and cash equivalents............................... $ 564 $37,990
Working capital......................................... 4,301 41,727
Total assets............................................ 11,450 48,876
Cumulative redeemable preferred stock................... 8,332 --
Convertible redeemable preferred stock.................. 17,854 --
Stockholders' equity (deficit).......................... (19,768) 43,844
</TABLE>
7
<PAGE>
RISK FACTORS
You should carefully consider the risks described below before making an
investment decision. The risks and uncertainties described below are not the
only ones facing our company. If any of the following risks actually occur, our
business, financial condition and results of operations would likely suffer. In
this case, the market price of our common stock could decline, and you may lose
all or part of the money you paid to buy our common stock.
We have a limited Internet-related operating history
We introduced our first Internet products and services in 1995 and launched
our website in February 1996. Accordingly, we have a limited Internet-related
operating history from which you can evaluate our business and prospects. As a
new entrant to the Internet business, we face risks and uncertainties relating
to our ability to successfully implement our business plan. If we are
unsuccessful in addressing these risks and uncertainties, our business, results
of operations and financial condition will be materially adversely affected.
We have a history of losses and we expect to continue to lose money in the
foreseeable future
We have not generated enough revenues to exceed the substantial amounts we
have spent to grow our business. We expect to continue to lose money for the
foreseeable future because we plan to continue to incur significant expenses.
Moreover, we base current and future expense levels on our operating plans and
our estimates of future revenues. If our revenues grow at a slower rate than we
anticipate, or if our spending levels exceed our expectations or cannot be
adjusted to reflect slower revenue growth, we may not generate sufficient
revenues to achieve profitability. If we do achieve profitability, we may be
unable to sustain or increase profitability on a quarterly or annual basis in
the future.
We are dependent on a limited number of third parties for a significant portion
of our primary geographic data
Our products and services rely on the availability and accuracy of primary
geographic data. We have licensed a significant portion of our primary
geographic data from a limited number of sources through non-exclusive, short-
term contractual arrangements. In particular, we license a substantial portion
of our data from Navigation Technologies Corporation ("NavTech") pursuant to a
short-term data license. Given the short terms of our primary geographic data
licenses, we will have to renegotiate our contracts in the foreseeable future
which may result in contractual terms that are not as favorable to us as the
existing data licenses. If we cannot maintain these data licenses or any other
third-party license arrangement on commercially reasonable terms, the accuracy
of our products and services would suffer. As a result, the marketability of
our products and services would be reduced.
The success of our business depends on the accuracy of our products and
services
The accuracy of our products and services is substantially dependent on the
accuracy of data we license from third parties. We plan to update our
geographic databases periodically. However, in view of the complexity of
updating several databases, revising software and the need to obtain geocoding
for address data from third parties, we may not be able to perform these
updates as planned. This would adversely affect the accuracy of our products
and services.
The development of our brand is essential to our future success
Establishing and maintaining our brand identity is critical to our efforts
to attract users to our website and to build market acceptance of our mapping
and destination information products and services. In order to build our brand
awareness, we must succeed in our brand marketing efforts, provide high-quality
services and increase user traffic on mapquest.com. These efforts have
required, and will continue to require, significant
8
<PAGE>
expenses. If we do not generate a corresponding increase in revenue as a result
of our branding efforts or otherwise fail to promote our brand successfully,
our business, results of operations and financial condition will be adversely
affected.
Fluctuations in our operating results may negatively impact our stock price
Our quarterly operating results may fluctuate significantly in the future
due to a variety of factors that could affect our revenues or our expenses in
any particular quarter. It is possible that in some future periods our results
of operations may be below the expectations of public market analysts and
investors. In this event, the price of our common stock is likely to fall.
You should not rely on quarter-to-quarter comparisons of our results of
operations as an indication of future performance. Factors that may affect our
quarterly results include:
. demand for our products and services from businesses and consumers;
. our relative mix of Internet and traditional and digital mapping
businesses;
. the timing and amount of license and service payments from our business
customers;
. traffic levels on mapquest.com;
. development of competitive websites and businesses;
. the relatively short terms of our advertising agreements;
. advertising budget decisions by our clients; and
. technical difficulties or system downtime affecting the Internet
generally or the operation of our website specifically.
Seasonal factors may affect our operating results
Seasonality of our traffic on mapquest.com and our advertising revenues may
cause our revenues to fluctuate. Traffic levels on websites are typically lower
during the summer and year-end vacation and holiday periods. We believe that
advertising sales in traditional media, such as television and radio, generally
are lower in the first and third calendar quarters of each year. Similar
seasonal or other patterns may develop in the Internet industry. Our limited
Internet-related operating history and the rapid growth of our Internet
products and services makes it difficult to assess the impact of seasonal
factors on the Internet and therefore whether our Internet products and
services are susceptible to cyclical or seasonal economic fluctuations.
We will not be able to execute our business plan if the market for our Internet
products and services does not develop
To date, sales of our traditional and digital mapping products and services
have accounted for a significant portion of our revenues. However, our business
plan assumes that our Internet products and services will account for a
significant and growing portion of our revenues in the foreseeable future.
Given that markets for our Internet products and services have only recently
begun to develop, are rapidly evolving and are characterized by a large number
of entrants, it is difficult to predict what pricing models, if any, for
Internet- related products and service will emerge as the industry standard.
The markets for our Internet products and services may not develop and demand
for our Internet products and services may not emerge or become economically
sustainable or customer turnover rates may be higher than expected.
Our Internet business is dependent on a small number of customers
In 1998, revenues from a limited number of business customers accounted for
a substantial portion of our Internet products and services revenues. The loss,
without replacement, of one or more of these customers could have a material
adverse effect on our revenues.
9
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We will not be able to execute our business plan if we cannot increase our
direct and indirect sales channels
In order to support our growth, we need to substantially increase our
direct and indirect sales channels. Our business would be harmed if we fail to
maintain an effective internal sales force. Our ability to increase our
internal sales force involves a number of risks, including:
. the competition we face in hiring and retaining qualified sales
personnel;
. the length of time it takes new sales personnel to become productive;
and
. our ability to integrate and motivate additional sales personnel and
sales support personnel.
In addition, we are seeking to develop relationships with partners such as
value-added resellers in order to leverage their sales organizations to
distribute our Internet products and services. Sales through these indirect
sales channels accounted for less than 0.4% of our revenues in 1998. We may be
unsuccessful in our efforts to develop increased indirect sales in the future.
We may be unable to protect our intellectual property rights and we may be
liable for infringing the intellectual property rights of others
If we fail to adequately protect our proprietary rights, third parties may
infringe or misappropriate our ownership of our intellectual property and this
could erode our market position and our operating results.
Currently we are a defendant in two pending litigations involving
allegations of infringements of third-party patents by our technologies. While
we intend to defend these actions vigorously, our efforts may not be
successful. In addition, in the ordinary course of business we have been, and
we expect to continue to be, subject to claims, including claims of alleged
infringement of patents, trademarks and other proprietary rights of third
parties. We expect that infringement claims in our markets will increase in
number as more participants enter the market. These claims and any resultant
litigation could subject us to significant liability for damages and could
result in the invalidation of our proprietary rights. In addition, even if we
prevail, litigation could be time-consuming and expensive to defend, and could
result in the diversion of our time and attention. Any claims from third
parties may also result in limitation on our ability to use the trademarks and
other intellectual property subject to claims unless we enter into agreements
with the third parties responsible for claims, which may be unavailable on
commercially reasonable terms. Please see "Business--Legal Proceedings."
We may not be able to compete successfully
Competition could result in reduced margins on our products and services,
loss of market share or less user traffic to our website. The markets for
MapQuest's products and services are highly competitive. We compete for
customers with companies offering online map-enabling technology, publishers
and distributors of traditional print media that use or license their content
for use on the Internet, commercial publishing companies, corporate materials
and information market companies, and governmental authorities. We expect
competition to continue to increase because these markets, particularly the
markets for Internet-related products and services, pose no substantial
barriers to entry. Competition may also increase as a result of industry
consolidation.
We will only be able to execute our business plan if use of the Internet grows
Our business would be adversely affected if Internet usage does not
continue to grow. Internet usage may be inhibited for any of the following
reasons:
. the Internet infrastructure may not be able to support the demands
placed on it or its performance and reliability may decline as usage
grows;
10
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. the ability of websites to provide security and authentication of
confidential information contained in transmissions over the Internet;
. the quality of Internet products and services may not continue to
generate user interest; and
. the ability of websites to respond to privacy concerns of potential
users, including concerns related to the placement by websites of
information on a user's hard drive without the user's knowledge or
consent.
The performance of mapquest.com is critical to our business and our reputation
Any system failure, including network, software or hardware failure, that
causes an interruption in the delivery of our products and services or a
decrease in responsiveness of our website service could result in reduced
revenue, and could impair our reputation and brand.
In May 1998, we entered into a one-year Internet hosting agreement with
Qwest to maintain all of our production servers at its Denver data center.
Qwest does not guarantee that our Internet access will be uninterrupted, error
free or secure. Any disruption in the Internet access provided by Qwest could
have a material adverse effect on our business, results of operations and
financial condition.
We have experienced system interruptions in the past and believe that these
interruptions will continue to occur from time to time in the future. Our
insurance may not adequately compensate us for any losses that may occur due to
any failures in our system or interruptions in our service. Our servers and
software must be able to accommodate a high volume of traffic and we have in
the past and may in the future experience slower response times for a variety
of reasons. Any substantial increase in demands on our servers will require us
to expand and adapt our network infrastructure. If we were unable to add
additional software and hardware to accommodate increased demand, this could
cause unanticipated system disruptions and result in slower response times. An
increase in the volume of consumers accessing mapquest.com or the websites of
our business customers could lead to systems failures or slower response times.
Business and consumer customers may become dissatisfied by any system failure
that interrupts our ability to provide our products and services to them or
results in slower response time.
Consumers visiting mapquest.com and other websites depend on Internet
service providers, online service providers and other website operators for
access to particular websites. Many of these providers have experienced
significant outages in the past, and could experience outages, delays and other
difficulties due to system failures unrelated to our systems.
We may not be able to hire and retain qualified employees
Our future success depends on our ability to attract, train, motivate and
retain highly skilled employees. Competition for employees in our industries is
intense. We may be unable to retain our key employees or attract, assimilate or
retain other highly qualified employees in the future. We have from time to
time in the past experienced, and we expect to continue to experience in the
future, difficulty in hiring and retaining highly skilled employees with
appropriate qualifications.
We may not be able to successfully manage our expansion
In order to execute our business plan, we must grow significantly. As of
January 31, 1996, we had a total of 167 employees and, as of January 31, 1999,
we had a total of 222 employees. We expect that the number of our employees
will continue to increase for the foreseeable future, in particular with
respect to our Internet-related business. This growth has placed, and our
anticipated future growth combined with the requirements we will face as a
public company will continue to place, a significant strain on our management
systems and resources. We expect that we will need to continue to improve our
financial and managerial controls and reporting systems and procedures. We will
also need to continue to expand and maintain close coordination among our
technical, accounting, finance and sales and marketing organizations. Our
inability to manage growth effectively could have a material adverse effect on
our business, financial condition and results of operations.
11
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We are dependent on our key management personnel for our future success
Our future success depends to a significant extent on the continued service
and coordination of our management team, particularly Michael Mulligan, our
Chief Executive Officer. The departure of any of our officers or key employees
could materially adversely affect our ability to implement our business plan.
In addition, certain members of our management team, including our Chief
Executive Officer, have joined us within the last year. These individuals have
not previously worked together and are becoming integrated into our management
team. They may not be able to work together effectively or successfully manage
our growth. We do not currently have employment agreements with members of
management other than our Chief Executive Officer and William Muenster, our
Senior Vice President of Development and Production.
We may not be able to execute our business plan if we are not able to expand
internationally
In order to execute our business plan, we must expand our business
internationally. To date, we have limited experience in marketing our products
and services internationally, and we cannot predict our success in these
international markets. Our plans to expand internationally are subject to
inherent risks, including:
. the impact of economic fluctuations in economies outside of the United
States;
. greater difficulty in accounts receivable collection and longer
collection periods;
. unexpected changes in regulatory requirements, tariffs and other trade
barriers;
. difficulties and costs of staffing and managing foreign operations;
. political instability;
. currency exchange fluctuations;
. potentially adverse tax consequences; and
. reduced protection for intellectual property rights outside the United
States.
We may not be able to successfully introduce new products and services
We expect to introduce new and enhanced products and services, and in
particular, Internet products and services in order to generate additional
revenues, attract more business customers to our products and services, attract
more consumers to our website and respond to competition. Any new product or
service we introduce that is not favorably received could damage our reputation
and the perception of our brand name. The failure of our new products and
services to achieve market acceptance and generate revenue could result in a
material adverse effect on our business, financial condition and results of
operations.
We may not be able to adapt as Internet technologies and customer demands
continue to evolve
To be successful, we must adapt to our rapidly changing market by
continually enhancing the technologies used in our Internet products and
services, and introducing new technology to address the changing needs of our
business and consumers. If we are unable, for technical, legal, financial or
other reasons, to adapt in a timely manner in response to changing market
conditions or business and consumer customer requirements, our business,
financial condition and results of operations could be materially adversely
affected.
We are susceptible to breaches of online commerce security
Online commerce on our website relies on encryption and authentication
technology licensed from third parties to provide the security and
authentication necessary to effect secure transmission of credit card numbers
and other proprietary information. The misappropriation of credit card numbers
or other proprietary personal information or the purchase of products through
the fraudulent use of credit cards could expose us to a risk of loss or
litigation and possible liability from the vendors of our products or from
cardholders themselves.
12
<PAGE>
We are susceptible to breaches of database security
A party who is able to circumvent our security measures could
misappropriate proprietary database information or cause interruptions in our
operations. As a result we may be required to expend significant capital and
other resources to protect against such security breaches or to alleviate
problems caused by such breaches, which could have a material adverse effect on
our business, financial condition and results of operations.
Regulatory and legal uncertainties could harm our business
Any new legislation or regulation, or the application or interpretation of
existing laws, may decrease the growth in the use of the Internet, which could
in turn decrease the demand for our products and services, increase our cost of
doing business or otherwise have a material adverse effect on our business,
financial condition and results of operations. There is an increasing number of
laws and regulations pertaining to the Internet. In addition, a number of
legislative and regulatory proposals are under consideration by federal, state,
local and foreign governments and agencies. Laws or regulations may be adopted
with respect to the Internet relating to liability for information retrieved
from or transmitted over the Internet, domain name registration, online content
regulation, user privacy, taxation and quality of products and services.
Moreover, the applicability to the Internet of existing laws governing issues
including intellectual property ownership and infringement, copyright, patent,
trademark, trade secret, obscenity, libel, employment and personal privacy is
uncertain and developing. Please see "Business--Government Regulation and Legal
Uncertainties."
We would lose revenues and incur significant costs if our systems or material
third-party systems are not Year 2000 compliant
The failure of our internal systems, or any material third-party systems,
to be Year 2000 compliant would have a material adverse effect on our business,
results of operations and financial condition. Although we believe that each of
our material systems is Year 2000 compliant, we do not yet know whether our
internal system, as a whole, is Year 2000 compliant. We are also contacting our
third-party vendors, licensors and providers of hardware, software and services
regarding their Year 2000 readiness. Their failure to be compliant would
adversely affect our ability to deliver our service. Please see "Management's
Discussion and Analysis of Financial Condition and Results of Operations--Year
2000."
We cannot predict our future capital needs and we may not be able to secure
additional financing
We may need to raise additional funds in the future in order to fund more
aggressive marketing programs or to acquire complementary businesses,
technologies or services. Any required additional financing may be unavailable
on terms favorable to us, or at all. If we raise additional funds by issuing
equity securities, you may experience significant dilution of your ownership
interest and such securities may have rights senior to those of the holders of
our common stock. If additional financing is not available when required or is
not available on acceptable terms, we may be unable to fund our expansion,
successfully promote our brand name, develop or enhance our products and
services, take advantage of business opportunities or respond to competitive
pressures, any of which could have a material adverse effect on our products
and business, financial condition and results of operations. We currently
anticipate that the net proceeds from this offering, together with available
funds, will be sufficient to meet our anticipated needs for at least the next
12 months.
We may not be able to successfully make acquisitions of or investments in other
companies
If we make an acquisition, we could have difficulty assimilating the
acquired company's operations and personnel. If we make other types of
acquisitions, we could have difficulty in assimilating any acquired products,
services, and technologies into our operations. These difficulties could
disrupt our ongoing business, distract our management and employees, increase
our expenses and materially adversely affect our business, financial condition
and results of operations due to increased operating expenses and charges, such
as amortization of goodwill. We have no present understanding or agreement
relating to any acquisition of or investment in another company or its
business.
13
<PAGE>
Future sales of our common stock may negatively affect our stock price
Following the offering, we will have a large number of shares of common
stock outstanding and available for resale beginning at various points in time
in the future. The market price of our common stock could decline as a result
of sales of a large number of shares of our common stock in the market
following this offering, or the perception that such sales could occur. These
sales also might make it more difficult for us to sell equity securities in the
future at a time and at a price that we deem appropriate. Please see "Shares
Eligible for Future Sale."
Our executive officers, directors and existing stockholders will have the
ability to exercise significant control over us
Our executive officers and directors and entities affiliated with them
will, in the aggregate, beneficially own approximately 82.0% of our common
stock following this offering. These stockholders will be able to exercise
control over all matters requiring approval by our stockholders, including the
election of directors and the approval of significant corporate transactions.
This concentration of ownership may also have the effect of delaying or
preventing a change in control of our company, which could negatively affect
our stock price. Please see "Principal Stockholders."
You will suffer immediate and substantial dilution
The initial public offering price per share will exceed the net tangible
book value per share. Accordingly, investors purchasing shares in this offering
will incur immediate and substantial dilution in their investments. To the
extent outstanding options or warrants to purchase common stock are exercised,
there will be further dilution. Please see "Dilution."
Our management will have broad discretion in use of proceeds
Our management will have broad discretion with respect to the expenditure
of proceeds. Investors will be relying on the judgment of our management
regarding the application of the proceeds of this offering.
14
<PAGE>
FORWARD-LOOKING STATEMENTS; MARKET DATA
Many statements made in this prospectus under the captions "Prospectus
Summary," "Risk Factors," "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business" and elsewhere are forward-
looking statements that are not based on historical facts. Because these
forward-looking statements involve risks and uncertainties, there are important
factors that could cause actual results to differ materially from those
expressed or implied by these forward-looking statements, including those
discussed under "Risk Factors."
This prospectus contains market data related to MapQuest and the Internet.
This market data includes projections that are based on a number of
assumptions. The assumptions include that:
. no catastrophic failure of the Internet will occur;
. currency exchange fluctuations;
. the number of people online and the total number of hours spent online
will increase significantly over the next five years;
. the value of online advertising dollars spent per online user hour will
increase;
. the download speed of content will increase dramatically; and
. Internet security and privacy concerns will be adequately addressed.
If any one or more of the foregoing assumptions turns out to be incorrect,
actual results may differ from the projections based on these assumptions. The
failure of these markets to grow at these projected rates may have a material
adverse effect on MapQuest's business, results of operations and financial
condition, and the market price of MapQuest's stock.
15
<PAGE>
USE OF PROCEEDS
The net proceeds to MapQuest from the sale of the shares offered by this
prospectus are estimated to be $45.8 million ($52.8 million if the over-
allotment option is exercised in full) at an assumed initial public offering
price of $11.00 per share and after deducting the underwriting discount and
estimated offering expenses payable by MapQuest. The principal purposes of this
offering are to obtain additional capital, to create a public market for the
common stock and to facilitate future access by MapQuest to public securities
markets.
MapQuest intends to use approximately $8.6 million of the net proceeds to
redeem the 1,398,835 outstanding shares of MapQuest's series B preferred stock.
MapQuest intends to use the remaining net proceeds to execute its business
plan. As part of this plan, MapQuest expects to increase its sales and
marketing efforts by hiring additional internal sales personnel and by
increasing its promotional and advertising spending. MapQuest estimates that
its capital expenditures will be approximately $4.0 million in 1999, which is
expected to be used for technical infrastructure improvements and for the
expansion of MapQuest's office space. A portion of the net proceeds also may be
used to acquire or invest in complementary businesses, products or services.
MapQuest has not yet determined the amount of net proceeds to be used
specifically for each of the preceding purposes. Accordingly, management will
have significant flexibility in applying the net proceeds of this offering.
Pending use of the net proceeds for the above purposes, MapQuest intends to
invest such funds in short-term, interest-bearing, investment-grade securities.
See "Description of Capital Stock-- Preferred Stock" and Note 5 to the
Financial Statements.
DIVIDEND POLICY
MapQuest has never declared or paid any cash dividends on its common stock.
MapQuest intends to retain any future earnings to support operations and to
finance the growth and development of MapQuest's business and does not
anticipate paying cash dividends for the foreseeable future.
16
<PAGE>
CAPITALIZATION
The following table sets forth, as of December 31, 1998, the capitalization
of MapQuest on an actual basis, and on a pro forma as adjusted basis to reflect
the automatic conversion of all outstanding shares of series A preferred stock
and series C preferred stock into 27,122,455 shares of common stock upon the
closing of this offering, the sale of 4,600,000 shares offered by this
prospectus at an assumed initial public offering price of $11.00 per share,
after deducting the underwriting discount and the estimated offering expenses
payable by MapQuest, and the redemption of the series B preferred stock. This
information should be read together with MapQuest's financial statements and
the notes relating to those statements appearing elsewhere in this prospectus.
<TABLE>
<CAPTION>
December 31, 1998
-------------------------
Pro Forma
Actual As Adjusted
-------- -----------
(In thousands)
<S> <C> <C> <C>
Cumulative Redeemable Preferred Stock
Series B Preferred Stock, par value $0.01 per share,
nonvoting, $6.15 per share redemption value,
aggregate liquidation preference of $8,332,036.
2,000,000 shares authorized; 1,354,802 shares
issued and outstanding, actual; no shares issued
and outstanding pro forma as adjusted............. $ 8,332 $ --
Convertible Redeemable Preferred Stock
Series A Preferred Stock, par value $0.01 per share
voting, $1.00 per share redemption value,
aggregate liquidation preference of $6,550,000.
6,550,000 shares authorized; 6,550,000 shares
issued and outstanding, actual; no shares issued
and outstanding pro forma as adjusted............. 6,550 --
Series C Preferred Stock, par value $0.01 per share
voting, $3.51 per share redemption value,
aggregate liquidation preference of $12,268,292.
3,800,000 shares authorized; 3,495,354 shares
issued and outstanding, actual; no shares issued
and outstanding pro forma as adjusted............. 11,595 --
Notes receivable for convertible preferred stock..... (291) --
Stockholders' Equity (Deficit) --
Preferred stock, par value $0.01 per share.
2,650,000 shares authorized, no shares issued and
outstanding, actual, pro forma as adjusted........ -- --
Common stock, par value $0.001 per share. 20,000,000
shares authorized, 336,028 shares issued and
outstanding, actual; 32,058,483 shares issued and
outstanding pro forma as adjusted................. -- 32
Notes receivable for common stock................... -- (291)
Additional paid-in capital.......................... 140 64,011
Retained deficit.................................... (19,908) (19,908)
-------- -------
Total stockholders' equity (deficit)................ (19,768) 43,844
-------- -------
Total capitalization.............................. $ 6,418 $43,844
======== =======
</TABLE>
17
<PAGE>
DILUTION
The pro forma net tangible book value of MapQuest as of December 31, 1998,
after giving effect to the conversion of preferred stock, was $6.2 million, or
$0.23 per share of common stock. "Pro forma net tangible book value per share"
is determined by dividing the number of outstanding shares of common stock into
the net tangible book value of MapQuest. Pro forma net tangible book value is
equal to total tangible assets less total liabilities. After giving effect to
the application of the estimated net proceeds from the sale of the shares of
common stock offered by this prospectus, based upon an assumed initial public
offering price of $11.00 per share, after deducting the underwriting discounts,
estimated offering expenses payable by MapQuest, and the redemption of the
series B preferred stock, the pro forma net tangible book value of MapQuest as
of December 31, 1998 would have been $43.7 million, or $1.36 per share. This
represents an immediate increase in net tangible book value of $1.13 per share
to existing stockholders and an immediate dilution of $9.64 per share to new
investors purchasing shares at the initial public offering price. The following
table illustrates the per share dilution:
<TABLE>
<S> <C> <C>
Assumed initial public offering price............................ $11.00
Pro forma net tangible book value as of December 31, 1998....... $.23
Pro forma increase in net tangible book value attributable to
new investors................................................. 1.13
----
Pro forma net tangible book value per share after this offering.. 1.36
------
Pro forma dilution per share to new investors.................... $ 9.64
======
</TABLE>
The following table summarizes on a pro forma basis, the total number of
shares of common stock purchased from MapQuest, the total consideration paid to
MapQuest and the average price per share paid by existing stockholders and by
new investors, based upon the number of shares of common stock outstanding as
of December 31, 1998 and assuming conversion of shares of preferred stock.
<TABLE>
<CAPTION>
Shares Purchased Total Consideration Average
------------------ ----------------------Price-Per
Number Percent Amount Percent Share
---------- ------- ------------ ------------------
% $ % $
<S> <C> <C> <C> <C> <C>
Existing stockholders........ 27,458,483 85.7 16,499,676 24.6 1.60
New Investors................ 4,600,000 14.3 50,600,000 75.4 11.00
---------- ----- ------------ ------- -----
Total...................... 32,058,483 100.0 67,099,676 100.0 2.09
========== ===== ============ ======= =====
</TABLE>
If the underwriters' over-allotment is exercised in full, the number of
shares held by new investors will increase to 5,290,000, or 16.2% of the total
shares of common stock to be outstanding after this offering.
18
<PAGE>
SELECTED FINANCIAL DATA
The following selected financial data set forth below should be read
together with the financial statements and the notes relating to those
statements and with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" appearing elsewhere in this prospectus.
The selected financial data set forth below for each of the years ended
December 31, 1996, 1997 and 1998 and at December 31, 1997 and 1998 are derived
from financial statements of MapQuest, audited by Ernst & Young LLP,
independent auditors, which are included elsewhere in this prospectus. The
selected financial data for the year ended December 31, 1995 and at December
31, 1994, 1995 and 1996 are derived from financial statements of MapQuest
audited by Ernst & Young LLP, which are not included in this prospectus. The
selected financial data for the year ended December 31, 1994 are derived from
the unaudited financial statements of MapQuest, which are not included in this
prospectus. For an explanation of the methods used to determine the number of
shares used to compute historical and pro forma basic and diluted loss per
share see Note 7 to the Financial Statements. Pro forma as adjusted data give
effect to the completion of this offering and the application of the net
proceeds from this offering. Basic and diluted earnings (loss) per share
amounts are not presented for 1994; MapQuest was not an independent entity
until October 31, 1994. In addition, there was no common stock outstanding from
October 31, 1994 to December 31, 1994.
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------------------------
1994 1995 1996 1997 1998
------- ------- ------- -------- --------
(In thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Revenues
Business.............. $ 4,226 $ 3,095 $ 7,020 $ 4,763 $ 6,536
Consumer.............. -- -- 140 1,276 1,376
Digital mapping....... 6,243 10,982 12,417 15,377 16,805
------- ------- ------- -------- --------
Total revenues...... 10,469 14,077 19,577 21,416 24,717
Costs of revenues....... 9,189 8,556 12,320 15,302 17,646
------- ------- ------- -------- --------
Gross profit............ 1,280 5,521 7,257 6,114 7,071
Operating expenses
Sales and marketing... 3,027 2,738 4,455 7,257 5,243
Product development... 642 1,395 2,619 5,048 2,955
General and
administrative...... 1,897 1,373 1,902 1,811 2,326
------- ------- ------- -------- --------
Total operating
expenses.......... 5,566 5,506 8,976 14,116 10,524
------- ------- ------- -------- --------
Operating income
(loss)................ (4,286) 15 (1,719) (8,002) (3,453)
Interest income and
expense, net.......... (72) 271 199 136 54
Other income............ 168 258 244 267 244
------- ------- ------- -------- --------
Income (loss) before
provision for income
taxes................. (4,190) 544 (1,276) (7,599) (3,155)
Provision for income
taxes................. -- 20 -- -- --
------- ------- ------- -------- --------
Net income (loss)....... (4,190) 524 (1,276) (7,599) (3,155)
Less preferred stock
dividends and
accretion............. (10) (458) (525) (5,834) (667)
------- ------- ------- -------- --------
Net income (loss)
applicable to common
stockholders.......... $(4,200) $ 66 $(1,801) $(13,433) $ (3,822)
======= ======= ======= ======== ========
Basic earnings (loss)
per share............. $ -- $ 0.79 $ (8.84) $ (64.43) $ (12.09)
Diluted earnings (loss)
per share............. $ -- $ 0.00 $ (8.84) $ (64.43) $ (12.09)
Shares used to compute
basic earnings (loss)
per share............. -- 84 204 208 316
Shares used to compute
diluted earnings
(loss) per share...... -- 19,313 204 208 316
Pro forma basic and
diluted loss per
share................. $ (0.13)
========
Shares used to compute
pro forma basic and
diluted loss per
share................. 27,439
========
<CAPTION>
December 31,
----------------------------------------------------------
Pro Forma
1994 1995 1996 1997 1998 as adjusted
------- ------- ------- -------- -------- -----------
(In thousands)
<S> <C> <C> <C> <C> <C> <C>
Balance Sheet Data:
Cash and cash
equivalents......... $ 4,646 $ 4,619 $ 1,904 $ 2,482 $ 564 $37,990
Working capital....... 5,687 6,066 4,085 7,460 4,301 41,727
Total assets.......... 9,169 9,601 9,526 13,221 11,450 48,876
Long-term obligations,
less current
portion............. -- -- -- 48 -- --
Redeemable preferred
stock............... 6,486 6,877 7,331 25,711 26,186 --
Stockholders' equity
(deficit)........... 89 213 (1,553) (16,237) (19,768) 43,844
</TABLE>
19
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
MapQuest is a leading online provider of mapping and destination
information. MapQuest provides comprehensive online mapping solutions to
businesses and provides customized maps, destination information and driving
directions to consumers. MapQuest has three lines of business: Internet
business products and services, Internet consumer products and services and
digital mapping products and services.
MapQuest was formed in 1967 as a business unit of R.R. Donnelley & Sons
Company. In 1994, R.R. Donnelley & Sons Company created a subsidiary into which
it transferred the MapQuest business unit. Also in 1994, MapQuest sold shares
to third parties. R.R. Donnelley & Sons Company sold all of its shares of
MapQuest to third parties in 1998. See "Certain Transactions."
Since 1967, MapQuest has provided traditional cartographic products and
services. In 1989, MapQuest began offering digital mapping products and
services. Beginning in 1991, MapQuest introduced map-generating products and
services which evolved into online mapping and routing applications. During the
first quarter of 1996, MapQuest launched mapquest.com and initiated sales and
marketing efforts to build brand awareness and to generate advertising revenues
from its website. In the third quarter of 1996, MapQuest began providing online
mapping and destination information products and services from its website to
companies with an Internet presence and to high-traffic websites offering users
a wide range of information and services on their websites, which are commonly
referred to as portal websites. In 1997, MapQuest increased its focus on its
Internet business and consumer lines of business by devoting significant
resources to mapquest.com and to its other Internet products and services.
During the fourth quarter of 1997 and the first quarter of 1998, MapQuest
decreased its Internet-related sales and marketing activities as it revised its
overall business strategy. During the remainder of 1997, MapQuest continued its
product development efforts and increased its sales and marketing efforts
across all of its lines of business. During the second quarter of 1998,
MapQuest introduced its MapQuest Enterprise Server. MapQuest's Enterprise
Server is designed to provide mapping and routing capability to high volume
websites. As part of its Internet strategy, MapQuest appointed a new chief
executive officer in the second half of 1998.
MapQuest derives its revenues from the following three lines of business:
Business Products and Services. MapQuest provides Internet products and
services to companies with an Internet presence and to portal websites. These
companies typically contract for MapQuest's services on an annual basis in
consideration for a service fee based on usage and an initial set-up fee.
MapQuest recognizes service fees ratably over the period of the service. In
addition, MapQuest recognizes revenues from the set-up fee upon completion of
the related installation services. Typically, MapQuest completes the
installation service in less than a month from the signing of a contract with a
customer. As part of MapQuest's Enterprise Server, MapQuest licenses its data
and sub-licenses third-party data to its business customers. Revenues for
software and data licenses relating to MapQuest Enterprise Server and other
licensed products are recognized upon delivery of the product. In addition,
MapQuest has entered into revenue sharing arrangements for advertising revenues
generated by a MapQuest business customer's website. Any revenues MapQuest
receives from these revenue sharing arrangements are recognized by MapQuest
upon notification by its business customers of advertising revenues on their
websites. However, revenues from these arrangements have not been material to
date. Further, under those agreements where MapQuest has a maintenance or
upgrade obligation, MapQuest recognizes revenue for these obligations over the
period of the obligation. Revenues from systems integration contracts,
typically long-term fixed-price contracts, are recognized on the percentage-of-
completion method. The percentage-of-completion method measures the number of
labor hours incurred to date as a percentage of estimated total labor hours for
each contract. MapQuest has also historically provided business products and
services for non-Internet applications by licensing software and data and by
providing professional services on a time and materials basis or a fixed fee
basis. Revenues from non-Internet applications as a percent of business
products and services revenues has declined over the last three years and, in
1998, they accounted for less than
20
<PAGE>
26.0% of revenues from the business products and services line of business.
Revenues from all other services provided are recognized when the services are
rendered or delivery of the product is made. Revenues from MapQuest's business
products and services line of business accounted for 26.4% of total revenues in
1998.
Consumer Products and Services. Through mapquest.com, MapQuest derives
revenues primarily from the sale of advertising and sponsorships. Advertising
rates vary depending on whether the advertisements are delivered to a general
audience or a targeted audience based on specific geographic location.
Advertising revenues are typically recognized ratably over the period in which
the advertisements are displayed, provided that no significant obligations
remain and the collection of the resulting receivable is likely. The average
term of MapQuest's advertising contracts is between one to two months. MapQuest
may guarantee its advertisers a pre-set level of impressions on mapquest.com.
Impression refers to a delivery of an advertisement to a user. If the
guaranteed impressions are not met, MapQuest defers recognition of the
corresponding revenue until the guaranteed impressions are achieved.
Sponsorship contracts may have longer terms and may allow sponsors to be
exclusive sponsors of portions of mapquest.com or particular advertising
categories. Barter transactions in which MapQuest received advertising or other
goods and services in exchange for content or advertising on mapquest.com
accounted for no more than 2.0% of total revenue in each of 1996, 1997 and
1998. Revenues from MapQuest's consumer products and services business line
accounted for 5.6% of total revenues in 1998.
Digital Mapping Products and Services. In its digital mapping business,
MapQuest derives substantially all of its revenues from providing digital
mapping services to businesses and from the sale of mapping products to
distributors, retailers and corporate customers. MapQuest typically receives
fees and payments on a time and materials basis or a fixed fee basis. Revenues
from these services are recognized when the services are rendered. In addition,
revenues from long-term contracts are recognized on the percentage-of-
completion method, measured by the number of labor hours incurred to date as a
percentage of estimated total labor hours for each contract. MapQuest also
licenses software and data for a license fee and/or royalties. License fees are
recognized upon delivery of the software and data. Royalty revenue is
recognized upon payment received. Revenues from all other services provided are
recognized when the services are rendered. With respect to the sale of mapping
products, MapQuest is paid negotiated amounts, depending on volume, from
retailers and distributors, subject to minimum sales and return arrangements.
Revenues from MapQuest's digital mapping line of business accounted for
approximately 68.0% of total revenues in 1998.
Year ended December 31, 1997 compared to year ended December 31, 1998
Revenues
Total revenues increased by $3.3 million from $21.4 million in 1997 to
$24.7 million in 1998. Revenue for the top 10 customers of MapQuest as a
percent of total revenue decreased from 44.5% in 1997 to 27.2% in 1998.
Business Revenues. Business revenues increased by $1.7 million from $4.8
million in 1997 to $6.5 million in 1998. This increase was primarily due to an
increase in the number of businesses using MapQuest's products and services and
the introduction of additional products and services. In addition, during 1998
MapQuest introduced its Enterprise Server products and services. MapQuest
expects its business products and services revenues to become a greater
percentage of its total revenue in the future. As a percent of total revenues,
business revenues increased from 22.2% in 1997 to 26.4% in 1998.
Consumer Revenues. Consumer revenues increased $0.1 million from $1.3
million in 1997 to $1.4 million in 1998. This increase was due to increased
advertising sales, including advertisements placed on its website and
sponsorship advertisements. During 1998, MapQuest changed its third-party
advertising sales representative organization. Consequently, MapQuest did not
recognize revenues from third-party advertising sales representative
organizations during this transition. MapQuest expects to continue to derive
revenue from selling advertisements on mapquest.com and also expects that
revenues from its consumer business will increase as a percentage of its total
revenue. As a percent of total revenues, consumer revenues decreased from 6.0%
in 1997 to 5.6% in 1998.
Digital Mapping Revenues. Digital mapping revenues increased by $1.4
million from $15.4 million in 1997 to $16.8 million in 1998. This increase was
primarily due to increased sales of printed products, including
21
<PAGE>
the National Geographic Road Atlas and the National Geographic American Road
Atlas. MapQuest expects digital mapping revenues will decrease as a percentage
of total revenue as MapQuest believes the growth in this business line to be
slower than that of the Internet consumer and business lines of business. As a
percent of total revenues, digital mapping revenues decreased from 71.8% in
1997 to 68.0% in 1998.
Cost of Revenues
Cost of revenues consists primarily of compensation for operations
personnel and related operations costs, including depreciation of operating
assets, third-party royalties, print and paper costs for printed products, and
subcontractor costs. Cost of revenues increased by $2.3 million from $15.3
million in 1997 to $17.6 million in 1998. This increase was primarily due to
the increased cost of printed products for distributors, retailers and
corporate customers, including National Geographic, and higher depreciation
costs associated with computer hardware purchases.
Operating Expenses
Sales and Marketing. Sales and marketing expenses consist primarily of
salaries, commissions, travel related expenses, sales promotion expenses,
public relations expenses and costs of marketing materials. Sales and marketing
expenses decreased by $2.1 million from $7.3 million in 1997 to $5.2 million in
1998. This decrease reflects lower promotional costs and personnel expenses as
MapQuest implemented expense reduction efforts in early 1998. These expense
reductions included a reduction in personnel, decreased travel expenses and
lower spending for sales promotions involving trade shows and public relations.
These expense reduction efforts were undertaken as MapQuest revised its
business strategy. MapQuest expects to incur significant increased sales and
marketing expenses on an absolute dollar basis and as a percentage of revenues
as it hires additional sales and marketing personnel and as it expands its
sales and marketing campaigns.
Product Development. Product development expenses are primarily the costs
of developing new products and services and modifying existing products and
services, including software and data. These expenses consist primarily of
salaries for product development personnel and related expenses, contract labor
expense, and consulting fees. Product development expenses decreased by $2.0
million from $5.0 million in 1997 to $3.0 million in 1998. The decrease from
1997 to 1998 was primarily due to decreases in personnel and related expenses
as MapQuest implemented the expense reduction efforts described in the
preceding paragraph in early 1998. MapQuest plans to increase product
development expenditures significantly for MapQuest's business and consumer
products and services in absolute dollars in future periods.
General and Administrative. General and administrative expenses consist
primarily of payroll and related expenses for MapQuest's executive, accounting
and administrative personnel, professional services and other general corporate
expenses. These expenses increased by $0.5 million from $1.8 million in 1997 to
$2.3 million in 1998. The increase from 1997 to 1998 was primarily due to costs
associated with the hiring of a new Chief Executive Officer and for additional
professional services. MapQuest anticipates hiring additional personnel and
incurring additional costs related to being a publicly held entity, including
directors' and officers' liability insurance, investor relations programs and
professional service fees.
Interest Income and Expense, Net
Interest income was $0.1 million in 1997 and 1998.
Other Income
Other income decreased $0.1 million from $0.3 million in 1997 to $0.2
million in 1998. This decrease was primarily due to lower equity in the
earnings of a joint venture that serves a number of automobile clubs with trip
routing services.
Income Taxes
MapQuest paid no income taxes in 1997 or 1998. MapQuest has incurred a net
loss for each period since incorporation, except for 1995. As of December 31,
1998, MapQuest had approximately $11.7 million of net
22
<PAGE>
operating loss carryforwards for federal income tax purposes, which expire
beginning in 2009. Due to the uncertainty of future profitability, a valuation
allowance equal to the deferred tax asset has been recorded. Changes in
ownership resulting from transactions among MapQuest's stockholders and sales
of common stock may limit the future annual realization of the tax net
operating loss carryforwards under Section 382 of the Internal Revenue Code of
1986.
Year ended December 31, 1996 compared to year ended December 31, 1997
Revenues
Total revenues increased $1.8 million from $19.6 million in 1996 to $21.4
million in 1997. Revenue for the top ten customers of MapQuest as a percent of
total revenue declined from 58.3% in 1996 to 44.5% in 1997.
Business Revenues. Business revenues decreased $2.2 million from $7.0
million in 1996 to $4.8 million in 1997 as MapQuest transitioned its focus from
non-Internet client/server based products and services to Internet products and
services.
Consumer Revenues. Consumer revenues increased $1.2 million from $0.1
million in 1996 to $1.3 million in 1997. This increase was primarily due to
increased advertising sales on mapquest.com.
Digital Mapping Revenues. Digital mapping revenues increased $3.0 million
from $12.4 million in 1996 to $15.4 million in 1997. The increase reflects
increased sales from printed products for retail, wholesale and corporate
customers, particularly the introduction of the National Geographic Road Atlas.
Cost of Revenues
Cost of revenues increased $3.0 million from $12.3 million in 1996 to $15.3
million in 1997. The increase was primarily due to the increased costs of
printed products for distributors, retailers and corporate customers and
increased costs for operational personnel and related costs.
Operating Expenses
Sales and Marketing. Sales and marketing expenses increased by $2.8 million
from $4.5 million in 1996 to $7.3 million in 1997. This increase was primarily
due to increased expenses for the hiring of additional personnel and for
increased promotional expenses.
Product Development. Product development expenses increased $2.4 million
from $2.6 million in 1996 to $5.0 million in 1997. This increase was primarily
the result of the development of the National Geographic Road Atlas and the
hiring of additional personnel for MapQuest Internet products and services.
General and Administrative. General and administrative expenses decreased
$0.1 million from $1.9 million in 1996 to $1.8 million in 1997. This decrease
was primarily due to lower personnel costs resulting from expense reduction
efforts as MapQuest revised its business strategy.
Interest Income and Expense, Net
Interest income decreased by $0.1 million from $0.2 million in 1996 to $0.1
million in 1997. The decrease from 1996 to 1997 was the result of changes in
average cash and cash equivalent balances.
Other Income
Other income remained relatively constant at $0.2 million in 1996 and in
1997.
Income Taxes
MapQuest paid no income taxes in 1997. Income taxes paid in 1996 were less
than $0.1 million.
23
<PAGE>
Selected Unaudited Quarterly
Results of Operations
The following table sets forth selected unaudited quarterly statement of
operations data for the eight quarters ended December 31, 1998. The selected
statement of operations data has been prepared substantially on the same basis
as the financial statements appearing elsewhere in this prospectus and, in the
opinion of management, includes all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the information set
forth in the data. The quarterly data should be read together with the
financial statements and the notes to those statements appearing elsewhere in
this prospectus. The results of operations for any quarter are not necessarily
indicative of results to be expected in any future period.
<TABLE>
<CAPTION>
Quarter Ended
-----------------------------------------------------------------------------
March 31, June 30, Sept. 30, Dec. 31, March 31, June 30, Sept. 30, Dec. 31,
1997 1997 1997 1997 1998 1998 1998 1998
--------- -------- --------- -------- --------- -------- --------- --------
(Unaudited, in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues
Business............... $1,192 $ 1,054 $ 1,251 $ 1,266 $1,720 $1,334 $1,834 $ 1,648
Consumer............... 117 180 465 514 292 259 245 580
Digital mapping........ 4,093 3,593 3,758 3,933 3,538 4,729 3,896 4,642
------ ------- ------- ------- ------ ------ ------ -------
Total revenues......... 5,402 4,827 5,474 5,713 5,550 6,322 5,975 6,870
Costs of revenues....... 3,479 3,574 3,994 4,255 3,654 4,618 4,283 5,091
------ ------- ------- ------- ------ ------ ------ -------
Gross profit............ 1,923 1,253 1,480 1,458 1,896 1,704 1,692 1,779
Operating expenses
Sales and marketing.... 1,351 1,718 1,990 2,198 1,483 1,067 1,163 1,530
Product development.... 1,143 1,633 1,138 1,134 877 813 728 537
General and
administrative....... 422 526 440 423 465 527 529 805
------ ------- ------- ------- ------ ------ ------ -------
Total operating
expenses............. 2,916 3,877 3,568 3,755 2,825 2,407 2,420 2,872
------ ------- ------- ------- ------ ------ ------ -------
Operating income loss... (993) (2,624) (2,088) (2,297) (929) (703) (728) (1,093)
Interest income and
expense, net.......... 17 6 61 52 23 14 8 9
Other income............ 49 118 74 26 47 70 117 10
------ ------- ------- ------- ------ ------ ------ -------
Net loss................ $ (927) $(2,500) $(1,953) $(2,219) $ (859) $ (619) $ (603) $(1,074)
====== ======= ======= ======= ====== ====== ====== =======
</TABLE>
MapQuest's total revenues fluctuated on a quarter-to-quarter basis during
the periods presented primarily due to changes in the mix of products and
services sold. During the quarter ended March 31, 1998, MapQuest recognized
business revenues of $0.4 million resulting from the license of its software
and data to a third-party. During the quarter ended March 31, 1998, revenues
from MapQuest's consumer line of business decreased as a result of difficulties
with its then third-party advertising sales organization. During the quarter
ended September 30, 1997, MapQuest began recognizing digital mapping revenues
attributable to an agreement entered into with National Geographic Holdings,
Inc. to develop and publish mapping products for retail distribution with the
National Geographic brand name. During the quarter ended June 30, 1998,
MapQuest began providing the American Road Atlas to National Geographic for
sale to its members. This resulted in increased digital mapping revenues
partially offset by increased cost of revenues relating to print and paper
costs for printed product.
During the quarters ended December 31, 1997 and March 31, 1998, MapQuest
temporarily reduced its sales and marketing and product development activities,
including reducing its number of employees, as it revised its overall business
strategy. As part of its revised Internet strategy, MapQuest reduced its non-
Internet product development activities in the quarter ended December 31, 1998.
During the same quarter, MapQuest incurred additional general and
administrative expenses in connection with hiring its Chief Executive Officer.
As a result of MapQuest's relatively recent focus on the Internet and the
emerging nature of the Internet markets in which it competes, MapQuest is
limited in its ability to accurately forecast its revenue. MapQuest's
24
<PAGE>
current and future expense levels are based largely on its estimates of future
revenue and are to a large extent fixed. Accordingly, MapQuest may be unable to
adjust spending in a timely manner to compensate for any unexpected revenue
shortfall, and a shortfall in revenue in relation to MapQuest's expectations
could have a material adverse effect on MapQuest's business, financial
condition and results of operations. In addition, MapQuest currently intends to
significantly increase its operating expenses to develop and enhance its
technology, to create, introduce and enhance its products and services
offerings, to fund increased sales and marketing expenses and to enter into new
strategic agreements. To the extent that these expenses precede or are not
subsequently followed by increased revenue, MapQuest's business, financial
condition and results of operations could be materially adversely affected.
MapQuest's quarterly and annual operating results are likely to fluctuate
significantly in the future due to a variety of factors, many of which are
outside MapQuest's control. See "Risk Factors--Fluctuations in our operating
results may negatively impact our stock price."
Liquidity and Capital Resources
MapQuest has financed its operations to date primarily through the private
placement of equity securities, funds from operations and bank borrowings. As
of December 31, 1998, MapQuest had $0.6 million of cash and cash equivalents.
Net cash used in operating activities was $9.5 million in 1997 and $0.8
million in 1998. In 1997, cash used by operating activities was primarily a
result of a net loss and increased working capital. In 1998, cash used by
operating activities was primarily a result of a net loss.
Net cash provided by financing activities was $11.4 million in 1997. In
1997, cash provided by financing activities was primarily attributable to net
proceeds from the issuance of convertible preferred stock.
Net cash used in investing activities was $1.5 million in 1996, $1.3
million in 1997 and $1.1 million in 1998. Cash used in investing activities in
each period was primarily related to purchases of property and equipment. In
addition, in 1996 MapQuest acquired the assets of a map specialty supplier.
MapQuest's material capital commitments consisted of obligations under
facilities and operating leases. Management anticipates that it will experience
an increase in its capital expenditures and lease commitments consistent with
its anticipated growth in operations, infrastructure and personnel and
additional resources devoted to building its brand name and building its
marketing and sales force. See Note 14 to Financial Statements.
MapQuest has a revolving demand credit facility with First Union Bank, N.A.
in the amount of $5.0 million which bears interest at First Union Bank's prime
rate or fixed rates as offered by First Union Bank or LIBOR plus 1.75%.
Borrowings are secured by MapQuest's accounts receivable and are limited to the
lesser of $5.0 million or 80% of the net amount of eligible accounts receivable
which are within 90 days of invoice. As of December 31, 1998, there were no
borrowings under this credit facility.
MapQuest believes that the net proceeds of this offering, together with its
existing cash and cash equivalents and available borrowings, will be sufficient
to meet its anticipated cash needs for working capital and capital expenditures
for at least the next twelve months. There can be no assurance that the
underlying assumed levels of revenues and expenses will prove to be accurate.
MapQuest may seek additional funding through public or private financings or
other arrangements prior to such time. Adequate funds may not be available when
needed or may not be available on terms favorable to MapQuest. If additional
funds are raised by issuing equity securities, dilution to existing
stockholders will result. If funding is insufficient at any time in the future,
MapQuest may be unable to develop or enhance its products or services, take
advantage of business opportunities or respond to competitive pressures, any of
which could have a material adverse effect on MapQuest's business, financial
condition and results of operations.
25
<PAGE>
Year 2000
The Year 2000 issue is the potential for system and processing failures of
date-related data as a result of computer-controlled systems using two digits
rather than four to define the applicable year. For example, computer programs
that have time-sensitive software may recognize a date using "00" as the year
1900 rather than the year 2000. This could result in system failure or
miscalculations causing disruptions of operations, including, among other
things, an inability to process transactions, send invoices or engage in
similar normal business activities. MapQuest may be affected by Year 2000
issues related to non-compliant information technology ("IT") systems or non-IT
systems operated by MapQuest or third parties. MapQuest's IT systems consist of
software and data developed either in-house or purchased from third parties,
and hardware purchased from vendors.
State of Readiness. MapQuest has completed a preliminary assessment of its
information technology systems, which includes but is not limited to, the
hardware and software necessary to provide and deliver mapquest.com. MapQuest
is continuing to perform assessments of its non-information technology systems,
which include many of the building and office equipment and systems. To date,
MapQuest's assessment has consisted of the following steps:
. establishing a Year 2000 Committee in the third quarter of 1998
consisting of managers from all relevant functional areas of the
company;
. identifying and evaluating all software and hardware upon which
MapQuest is dependent;
. contacting third-party vendors of hardware, software and services,
including database providers that MapQuest utilizes;
. contacting material non-information technology systems and service
providers;
. developing and formalizing procedures to implement necessary remedial
measures; and
. assessing the need for and developing a business contingency plan.
As of the end of the first quarter of 1999 MapQuest has performed the
following:
. the Committee has reviewed all functional areas of MapQuest and has
identified various systems and software programs that are not Year
2000 compliant;
. MapQuest has performed a Year 2000 simulation on a majority of its
proprietary systems, products and services to test system and product
readiness;
. based on the results of its Year 2000 simulation tests, MapQuest has
revised and continues to revise its code as necessary to improve the
Year 2000 compliance of its proprietary systems;
. MapQuest is continuing to upgrade and test all other hardware and
software used in its operations;
. MapQuest's hosting service provider, Qwest, has stated that it has
established a dedicated Year 2000 Program Office to address the
compliance functions of its affected systems and is actively preparing
its systems for the Year 2000;
. MapQuest has identified all vendors of material hardware and software
components of its IT systems, and has contacted its principal vendors
of hardware, software, and data providers;
. Management is continuing the process of working with its hardware and
software providers to assure that MapQuest is prepared for the Year
2000; and
. MapQuest is currently assessing its non-IT systems.
At this point in its assessment, MapQuest is not currently aware of any
Year 2000 problems relating to these systems which would have a material effect
on its business, financial condition or results of operations, without taking
into account its efforts to avoid such problems. MapQuest plans to complete its
Year 2000 assessment during the summer of 1999.
26
<PAGE>
Cost. To date, MapQuest has not incurred any material costs in connection
with identifying and evaluating Year 2000 compliance issues. Most of its
expenses have been related to, and are expected to continue to relate to, the
operating costs associated with time spent by employees in the evaluation
process and Year 2000 compliance matters generally. At this time, MapQuest does
not possess the information necessary to estimate the potential costs of the
replacement of third party software, hardware or services that are determined
not to be Year 2000 compliant. Although MapQuest does not anticipate those
amounts will be material, such expenses, if higher than anticipated, could have
a material adverse effect on MapQuest's business, financial condition and
operating results.
Risks. Although MapQuest's assessment may be finalized without identifying
any additional material non-compliant IT or systems operated by MapQuest or by
third parties, a systemic failure beyond the control of MapQuest, such as a
prolonged telecommunications or electrical failure is possible. This type of
failure could prevent MapQuest from operating its business, prevent users from
accessing its website, or change the behavior of advertising customers or
persons accessing its website. MapQuest believes that the primary business
risks, in the event of such systemic failure, would include but not be limited
to, lost advertising revenues, lost business revenues, increased operating
costs, loss of customers or persons accessing its website and servers, or other
business interruptions of a material nature, as well as claims of
mismanagement, misrepresentation, or breach of contract.
Contingency Plan. As discussed above, MapQuest is engaged in an ongoing
Year 2000 assessment. The results of MapQuest's further testing and the
responses received from third-party vendors, service providers and customers
will be taken into account in determining the nature and extent of any
contingency plans.
27
<PAGE>
BUSINESS
Overview
MapQuest is a leading online provider of mapping and destination
information. By effectively employing its over 30 years of traditional and
digital mapping experience together with its proprietary integration and
editing of geographic databases, MapQuest provides comprehensive online mapping
solutions to businesses and provides customized maps, destination information
and driving directions to consumers. During February 1999, MapQuest delivered
over 76.2 million maps and over 14.2 million driving directions through its own
website and through third-party websites. According to Media Metrix, Inc., in
February 1999 mapquest.com had over 2.7 million unique visitors, making it the
number five travel/tourism Internet property in terms of audience reach.
Industry Background
Growth of the Internet
The Internet is an increasingly significant global medium for distributing
and collecting information, conducting commerce and communicating.
International Data Corporation estimates that the number of Internet users
worldwide exceeded 69.0 million in 1997 and will grow to over 320.0 million by
2002, representing a compounded annual growth rate of over 35%. According to
Forrester Research, Inc., by 2002 approximately 50% of U.S. businesses will
have an online presence. The growth of the Internet is being driven by a number
of factors, including:
. increased use of personal computers and modems;
. improvements in network systems and infrastructure;
. more readily available and lower cost access to the Internet;
. increased awareness of the Internet among businesses and consumers;
. increased volume of information and services offered on the Internet;
. more compelling interactive content available on the Internet; and
. increased acceptance of conducting transactions online.
Convergence of the Traditional and Digital Mapping Industries and the
Internet
Geographically-relevant information has traditionally been provided through
a variety of reference materials, including road maps, atlases, travel guides,
telephone directories and textbooks. According to a 1998 International Map
Trade Associations' United States consumer survey, the annual market for
published map, atlas and travel guide products in the United States is
estimated to be in excess of $1.6 billion. The development of technology has
allowed companies to effectively employ their databases of information across a
greater number of platforms such as CD-ROMs, client/server systems and the
Internet. Further, with the development of the Internet, users are able to
easily and cost-effectively access information on a 24-hour basis. MapQuest
believes that the Internet presents a significant opportunity to provide users
with comprehensive and reliable geographically relevant information through the
delivery of highly customized maps, destination information and driving
directions on a real-time basis.
Online Destination Information for Businesses
Businesses must be able to cost-effectively communicate their existence and
physical locations to potential customers. This information has historically
been provided through traditional print media, such as newspapers and the
yellow pages, which generally target only narrow geographic audiences and have
a limited ability to provide updated destination information that is tailored
to the specific routing needs of a potential customer. MapQuest believes that
the Internet presents a significant opportunity for businesses to provide
potential customers with real-time physical location information and customized
driving directions to such locations.
28
<PAGE>
In addition, highly trafficked websites such as portals, which provide
users with a wide range of information and services at a single site, need to
continually enhance and expand their service offerings to promote and extend
usage among existing and new users. Many of these sites have expanded their
websites through the addition of a variety of features such as stock quotes,
news, yellow pages, and mapping and destination information. However, many of
these websites do not have the personnel or technical infrastructure necessary
to provide these expanded service offerings on a cost-effective basis. MapQuest
believes that businesses will increasingly seek to outsource products and
services to expand the service offerings of their websites.
Online Destination Information for Consumers
Consumers and travelers have traditionally located businesses and other
points of interest by using maps, telephone and general information inquiries.
As the availability of travel-related information on the Internet becomes more
available, consumers and travelers are increasingly obtaining location
information online. MapQuest believes there is a significant opportunity to
provide consumers and travelers with easily accessible, reliable and
comprehensive door-to-door driving directions available 24 hours a day.
Geographically Targeted Online Advertising
Forrester Research, Inc. estimates that online advertising revenues will
grow from approximately $1.0 billion in 1998 to approximately $8.1 billion in
2002. Advertisers on the Internet desire cost-effective means of targeting
their advertising and direct marketing efforts. MapQuest believes that specific
location information provided by a consumer on a real-time basis would improve
these efforts.
MapQuest believes there is a significant opportunity to provide accurate
and reliable products and services designed to meet the mapping and destination
information needs of businesses and consumers on the Internet. Businesses must
be able to accurately direct a potential customer to their physical
location(s). Further, to successfully attract and retain users, highly
trafficked websites need to continually and cost-effectively expand the service
offerings of their websites. In addition, consumers using the Internet need a
reliable source of real-time customized destination information available 24
hours a day.
The MapQuest.com Solution
MapQuest is a leading online provider of mapping and destination
information for businesses and consumers.
MapQuest's online products and services enable businesses to:
. Provide customized maps, destination information and driving directions
to potential customers;
. Expand the service offerings of their websites to attract and retain
users;
. Use outside sources to meet their map-generating and destination
information needs, thereby avoiding a significant portion of the
expenses normally associated with establishing and maintaining a map-
generating personnel and technology organization; and
. Provide potential customers with information regarding which of a
business' multiple locations is closest to the potential customer.
MapQuest's online products and services enable consumers to:
. Receive maps and destination information on a real-time basis based on
specific location parameters provided by the customer;
. Generate detailed door-to-door driving directions at anytime; and
. Create and retrieve customized maps based on the consumer's preferences.
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<PAGE>
MapQuest is also a leading U.S. provider of traditional and digital mapping
products and services to the educational, reference, directory, travel and
governmental markets. In addition, companies that incorporate call centers, CD-
ROMs or driving direction kiosks into their information delivery strategy
require non-Internet customized mapping solutions. MapQuest has developed its
map-generating software to promote the rapid development of mapping
applications in these environments.
Strategy
MapQuest's objective is to be the leading online provider of destination
solutions for businesses and consumers. Key elements of MapQuest's strategy
include:
Build Brand Awareness. MapQuest intends to further its position as an
industry leader for online destination information for businesses and consumers
by enhancing its brand name recognition. In addition to branding on its
website, MapQuest currently co-brands its products and services on each of its
business customer's websites. MapQuest intends to expand its use of
advertising, public relations and other marketing programs designed to promote
its global brand and build loyalty among its business and consumer customers.
In the future, MapQuest intends to expand both its online and offline marketing
programs.
Expand and Enhance the MapQuest Service. MapQuest intends to continue to
broaden and deepen its services by providing comprehensive, cost-effective,
accurate and easily accessible information and value-added tools and features.
MapQuest is developing product and service enhancements aimed at its business
customers, including enhancing their opportunity to offer geographically
targeted advertising programs on their websites. MapQuest's planned
enhancements to its consumer service include introducing greater
personalization features to mapquest.com.
Grow Sales Channels Aggressively. MapQuest intends to build its sales
capabilities in order to broaden penetration of its products and services and
generate increased revenues. MapQuest intends to build its direct field sales
force to target U.S. and international markets. MapQuest also seeks to develop
strategic relationships in the value-added-reseller ("VAR") channels. MapQuest
also intends to build its own advertising sales force in order to augment the
current third-party representative sales force it engages to sell
advertisements on mapquest.com.
Develop Additional Advertising Opportunities. MapQuest intends to increase
and expand its advertising revenue opportunities by offering new methods of
targeted advertising based on a consumer's geographic information. MapQuest
will use consumer-provided information to provide advertisers with the ability
to base their advertising and promotions on a consumer's geographic
information.
Use Existing Integrated Geographic Data as a Platform. MapQuest intends to
develop new products and services by effectively employing the comprehensive
integrated geographic databases it has been developing since 1967. MapQuest has
utilized proprietary editing software tools to create its geographic data from
multiple providers in a variety of data formats.
Pursue International Opportunities. MapQuest believes that significant
opportunities exist to expand MapQuest's products and services internationally.
As of December 1998, approximately 10.8% of the maps that MapQuest generates
from its own website represent international locations. MapQuest intends to
expand its international marketing efforts to gain access to additional
business customers seeking to improve the service offerings of their websites
and consumers seeking online map-related information.
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<PAGE>
MapQuest Products and Services
Internet Business
<TABLE>
<CAPTION>
Application
Name of and
Product/Service Data Host Description
--------------------- ----------------- -------------------------------------
<C> <C> <S>
MapQuest Connect MapQuest . Enables businesses to display user-
requested maps based on any
combination of city, state, street
address and ZIP code in the United
States.
MapQuest InterConnect MapQuest . Enhances MapQuest Connect.
. Enables consumers who visit a
business' website to find the
closest location to a user's point
of origin.
MapQuest Locator MapQuest . Enhances MapQuest InterConnect.
. Enables more advanced location
searching by integrating MapQuest
with specific geographic search
parameters contained in its
business customer's database, such
as "find closest gas station with a
car wash."
MapQuest TripConnect MapQuest . Enables businesses to provide
consumers with door-to-door driving
instructions, including a route-
highlighted map, trip mileage and
estimated driving time.
MapQuest Enterprise MapQuest . Provides mapping and routing
Service capability designed primarily for
high volume websites.
. Enables business customers to
integrate generated map pages into
their websites.
MapQuest Enterprise Business Customer . Provides mapping and routing
Server capability designed primarily for
high volume websites.
. Enables business customers to
integrate generated map pages into
websites.
MapQuest Server for Business Customer . Provides mapping and routing
Windows NT capability designed primarily for
low volume websites.
. Enables business customers to
customize their own mapping
solutions.
</TABLE>
Internet Consumer
The mapquest.com website offers several menu options for consumers:
. Maps--enables map generation either based on detailed supplied
information or a more general location request;
. Driving Directions--provides the most direct route from a point of
origin to a destination using a variety of options and formats,
including door-to-door, city-to-city, overview map with text, text only
or turn-by-turn;
. Travel Guide--provides access to lodging, dining, city and weather
information for most consumer-requested destinations, all of which can
be tailored by the consumer to fit his or her particular information
needs;
. Buy A Map--provides access to the MapStore to buy U.S. and international
maps, road atlases, travel guides and other map and travel-related
products; and
. Membership--by becoming a member, the consumer is able to save generated
maps, place his or her personalized icons on generated maps that can be
stored for future use, receive advance notice of new MapQuest features
and enhancements and become eligible for promotional offers.
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<PAGE>
Traditional and Digital Mapping Products and Services
MapQuest publishes or provides the relevant geographic data for printed
road maps, atlases, travel guides, hotel and telephone directories, maps used
in textbooks and reference books, and CD-ROMs. In addition, MapQuest's products
and services include software applications incorporating customized mapping
solutions for publishers and producers of CD-ROMs. MapQuest also provides
extensive cartography, geographic database development, comprehensive map data
maintenance, advanced mapping technology and consultation services to a wide
variety of customers on a fee for service basis. MapQuest's traditional and
digital mapping customers include National Geographic, Galileo International,
Ryder, Exxon, Best Western and the Alamo and National car rental units of
Republic Industries.
MapQuest's product development strategy is to enhance the technology and
features of its Internet, client/server network applications and traditional
and digital mapping applications and to further expand its core geographical
database assets. MapQuest has numerous development projects in process.
MapQuest expects to continue to devote substantial resources to its product
development activities.
Sales and Marketing
MapQuest sells its Internet business products and services in the United
States through a sales organization of 17 employees as of January 31, 1999.
This sales organization consists of 12 direct field salespeople based
throughout the United States and five telemarketers located at MapQuest's
Denver office. In addition, MapQuest sells its Internet products and services
through indirect sales channels, including value-added resellers such as Moore
Data, SABRE BTS and Three-X Communications.
Sales of advertisements on mapquest.com have been generated by third-party
advertising sales representatives and to a lesser extent by MapQuest's internal
advertising sales force, which consisted of two persons as of January 31, 1999.
MapQuest sells its traditional and digital mapping products through a
direct sales force consisting of 11 field salespersons and telemarketers.
MapQuest markets its products and services online by placing advertisements
on third-party websites. In addition, MapQuest advertises through traditional
offline media and utilizes public relations campaigns, trade shows and ongoing
customer communications programs.
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<PAGE>
Customers
As of January 31, 1999, MapQuest had licensed its products and services to
over 380 business customers. No one customer accounts for over 10% of
MapQuest's overall revenues. The following is a representative list of
customers as of December 31, 1998:
Telecommunications/Directories
Content Providers
Ameritech
Excite APIL Partnership (Don Tech)
Infoseek GTE
Lycos Pacific Bell
Ticketmaster-Citysearch Southwestern Bell
Yahoo! US West
Travel/Entertainment Retail/Services
American Automobile Association Blockbuster
American Express Border's Group
Avis Cybermeals
Bass Hotel and Resorts Home Depot
Best Western Kinko's
Budget Rent-A-Car Sears
Galileo International
Hertz Publishers/Advertising Agencies
Republic Industries
Ryder Transportation Services
Classical Atlas
Sabre Group (Travelocity) DDB Needham
Sierra On-Line Harte Hanks
McGraw-Hill
Media Modem Media . Poppe Tyson
R.R. Donnelley
Denver Post
Los Angeles Times Real Estate
National Geographic
Cendant
Other Moore Data
Citgo Petroleum
Exxon
Technology and Infrastructure
Geographic Data
MapQuest has licensed a significant portion of its primary geographic data
from a limited number of sources through non-exclusive, short-term contractual
arrangements. MapQuest currently relies on United States street level data
drawn from the U.S. government and through agreements with NavTech and
Geographical Data Technologies ("GDT"). Data covering Canada is supplied by
Desktop Mapping Technology, Inc. MapQuest obtains Western European street and
major road data from TeleAtlas, NavTech and AND Mapping NV. Major road data for
the rest of the world is obtained from AND Mapping NV. If MapQuest lost access
to these sources of third-party data or should the terms of these contractual
arrangements materially change, MapQuest would need to substitute alternative
sources of data or attempt to develop substitute sources of data internally,
and MapQuest's business, financial condition and results of operations could be
materially and adversely affected.
MapQuest's own proprietary data assets also support its online and
traditional and digital mapping products and services. MapQuest has spent
approximately six years developing a United States major road database.
MapQuest also maintains a graphical image database that contains over 190,000
archived files to serve as an internal reference library. In addition, MapQuest
has developed a suite of international city map data that includes over 300
metropolitan maps and over 500 downtown maps of most major international
tourist and business destinations.
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<PAGE>
Software and Editing Tools
MapQuest's proprietary software development toolkit, GeoLocate, employs
scalable object-oriented technology and comprises the core tools used to
perform high-speed mapping while maintaining high-quality cartographic display.
Designed with an open architecture, GeoLocate offers platform flexibility in
converting a variety of data formats. GeoLocate has been used in the
development of MapQuest's Internet technology, resulting in the creation of a
scalable platform that is designed to serve millions of maps and driving
directions on a daily basis. An easy-to-use consumer interface overlays
MapQuest's variety of integrated data formats and personalization tools,
enabling consumers to save and display customized maps and driving directions.
MapQuest has also developed numerous software tools and has customized existing
commercial applications to create and maintain its digital map databases.
System Architecture
Maps and driving directions delivered by MapQuest are generated utilizing a
UNIX operating system, Apache web server software and MapQuest's proprietary
mapping applications. User activity is distributed and load-balanced across
multiple servers via our proprietary software and third-party equipment, which
maintain replicated, local storage of underlying software and data, resulting
in minimal interdependencies among servers. Each server has its own local
storage, and all data and software are replicated across all servers. The
system's flexible architecture is designed to be scalable to meet anticipated
future demand. In addition to built-in redundancies, MapQuest operates
automated internal monitoring tools seven days a week/24 hours a day and
independent third parties continuously monitor MapQuest's website from at least
10 different cities on at least eight different national Internet backbone
providers.
MapQuest's network, hosting facilities, internal architecture and
monitoring are deployed to provide high availability, efficiency and
redundancy. MapQuest's Internet map and driving direction applications are
located in Denver, Colorado in a Qwest Communications Cyber Center hosting
facility tied to Qwest's nationwide, dedicated high speed OC-48 IP network.
mapquest.com is connected to Qwest's backbone via Cisco routers and
multiplexers. Qwest does not guarantee that our Internet access will be
uninterrupted, secure, or error free and MapQuest's operations are dependent on
Qwest's ability to protect its and MapQuest's systems against damage from fire,
power loss, water damage, telecommunications failure, vandalism, and other
malicious acts. Any disruption in the Internet access provided by Qwest could
have a material adverse effect on MapQuest's business, financial condition and
results of operations.
Competition
The markets for MapQuest's products and services are highly competitive.
MapQuest competes for customers with companies offering online map-enabling
technology and publishers and distributors of traditional print media that use
or license their content for use on the Internet, commercial publishing
companies, corporate materials and information market companies, and
governmental authorities.
MapQuest expects competition to continue to increase because these markets,
particularly the markets for Internet-related products and services, pose no
substantial barriers to entry. Competition may also increase as a result of
industry consolidation. In addition, MapQuest's licensees may develop products
and services that are equal or superior to MapQuest's or that achieve greater
market acceptance than those of MapQuest. Similarly there can be no assurance
that MapQuest's data suppliers will not develop products and services
competitive with those of MapQuest or will continue licensing data to MapQuest.
Increased competition could result in reduced markets, loss of market share or
less traffic to MapQuest's website, any of which could have a material adverse
effect on MapQuest's business, financial condition and results of operations.
MapQuest believes that its ability to compete depends upon many factors,
many of which are beyond its control. These factors include MapQuest's ability
to provide depth and accuracy of destination information, to
34
<PAGE>
increase its sales force and to implement its sales and marketing initiatives,
the introduction and acceptance of new and enhanced products and services
developed either by MapQuest or its competitors and the ease of use of products
and services developed either by MapQuest or its competitors.
Government Regulation
There is an increasing number of laws and regulations pertaining to the
Internet including laws or regulations relating to user privacy, liability for
information retrieved from or transmitted over the Internet, online content
regulation, user privacy, taxation and domain name registration. Moreover, the
applicability to the Internet of existing laws governing issues such as
intellectual property ownership and infringement, copyright, patent, trademark,
trade secret, obscenity, libel, employment and personal privacy is uncertain
and developing.
Privacy Concerns. Government agencies are considering adopting regulations
regarding the collection and use of personal identifying information obtained
from individuals when accessing websites. While MapQuest has implemented and
intends to implement additional programs, designed to enhance the protection of
the privacy of its users, these programs may not conform with any regulations
adopted by these agencies. In addition, these regulatory and enforcement
efforts may adversely affect the ability to collect demographic and personal
information from users, which could have an adverse effect on MapQuest's
ability to provide advertisers with geocentric information. The European Union
(the "EU") has adopted a directive that imposes restrictions on the collection
and use of personal data. The directive could impose restrictions that are more
stringent than current Internet privacy standards in the United States. The
directive may adversely affect the activities of entities such as MapQuest that
plan to engage in data collection from users in EU member countries.
Internet Taxation. A number of legislative proposals would impose
additional taxes on the sale of goods and services over the Internet which may
substantially impair the growth of commerce on the Internet and, as a result,
adversely affect MapQuest's opportunity to derive financial benefit from these
activities.
Domain Names. Domain names are the user's Internet "addresses." The current
system for registering, allocating and managing domain names has been the
subject of litigation and of proposed regulatory reform. Although MapQuest has
applied to register "mapquest.com" as a trademark, third parties may bring
claims for infringement against MapQuest for the use of this trademark. There
can be no assurance that MapQuest's domain name will not lose its value, or
that MapQuest will not have to obtain entirely new domain names in addition to
or in lieu of its current domain names if reform efforts result in a
restructuring in the current system.
Jurisdictions. Due to the global nature of the Internet, it is possible
that, although transmissions by MapQuest over the Internet originate primarily
in Denver, the governments of other states and foreign countries might attempt
to regulate MapQuest's business activities. In addition, as MapQuest's service
is available over the Internet in multiple states and foreign countries, these
jurisdictions may require MapQuest to qualify to do business as a foreign
corporation in each of these states or foreign countries, which could subject
MapQuest to taxes and other regulations.
Liability for Information Retrieved from mapquest.com and from the Internet
Content may be accessed on mapquest.com or on the websites of MapQuest's
business customers, and this content may be downloaded by users and
subsequently transmitted to others over the Internet which could result in
claims against MapQuest based on a variety of theories, including negligence,
copyright, patent or trademark infringement. It is also possible that if any
destination information provided on or through mapquest.com contains errors,
third parties could make claims against MapQuest for losses incurred in
reliance on such information. Any imposition of liability that is not covered
by insurance or is in excess of insurance coverage could have a material
adverse effect on MapQuest's business, financial condition and results of
operations.
35
<PAGE>
Intellectual Property
We rely upon a combination of patent, trademark, copyright law, trade
secret protection and contractual restrictions with employees, customers,
partners and others to protect our proprietary rights. We do not currently hold
any patents, but we have filed one patent application with the United States
Patent and Trademark Office, and intend to file a second patent application in
the near future. There can be no assurance that our patent applications will be
approved and, if approved, that they will not be successfully challenged by
others or invalidated through administrative process or litigation. Patent,
trademark, copyright and trade secret protection may not be available in every
country in which our products and services are distributed or made available.
If we fail to adequately protect our proprietary rights, our business,
financial condition and results of operations could be materially and adversely
affected.
Legal standards relating to the validity, enforceability and scope of
protection of certain proprietary rights in Internet-related industries are
uncertain and still evolving, and no assurance can be given as to the future
viability or value of any of our proprietary rights or those of other companies
within the industry. Despite our efforts to protect our proprietary rights,
third parties may infringe or misappropriate these rights, which could result
in a material adverse effect on our business, financial condition and results
of operation.
Currently we are a defendant in two pending litigations involving
allegations of infringements of third-party patents by our technologies. Both
litigations are in the early stages. While we intend to defend these actions
vigorously, our efforts may not be successful. In addition, in the ordinary
course of business we have been, and we expect to continue to be, subject to
claims, including claims of alleged infringement of the patents, trademarks and
other proprietary rights of third parties. We expect that infringement claims
in our markets will increase in number as more participants enter the market.
These claims and any resultant litigation could subject us to significant
liability for damages and could result in the invalidation of our proprietary
rights. In addition, even if we prevail, such litigation could be time-
consuming and expensive to defend, and could result in the diversion of our
time and attention, any of which could materially adversely affect our
business, financial condition and results of operations. Any claims from third
parties may also result in limitation on our ability to use the trademarks,
patents, copyrights and other intellectual property subject to such claims
unless we enter into agreements with the third parties responsible for such
claims, which may be unavailable on commercially reasonable terms.
Employees
As of January 31, 1999, MapQuest employed 222 persons, including 63
cartographers, 16 GIS/database analysts, 59 software/systems/Internet
engineers, 46 persons in sales, marketing and customer-support, and 38 persons
in general and administrative areas. None of MapQuest's employees is
represented by a labor union and MapQuest believes it has good employee
relations.
MapQuest believes that its future success will depend in part on its
continued ability to attract, integrate, retain and motivate highly qualified
sales, technical, and managerial personnel, and upon the continued service of
MapQuest's senior management and key sales and technical personnel. MapQuest
may not successfully attract, integrate, retain and motivate a sufficient
number of qualified personnel to conduct its business in the future. Please see
"Risk Factors--We may not be able to successfully manage our expansion."
Facilities
MapQuest's headquarters are located in Mountville, Pennsylvania, where
MapQuest currently leases approximately 62,000 square feet under a ten-year
lease expiring in March 2007. MapQuest also leases approximately 7,200 square
feet in Columbia, Maryland under a two-year lease expiring in June 2000,
approximately 11,000 square feet in Denver, Colorado under a three-year lease
expiring in October 1999, approximately 11,600 square feet in Mount Joy,
Pennsylvania under a three-year lease expiring December 2000, and approximately
4,200 square feet in New York, New York under a seven-year lease expiring
January 2006. MapQuest intends to expand its sales and marketing staff and
therefore may require additional facilities in the foreseeable future.
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<PAGE>
Legal Proceedings
On December 14, 1998, Mark Tornetta filed a lawsuit against Moore U.S.A.,
Inc. in the United States District Court for the Eastern District of
Pennsylvania. MapQuest is defending this matter pursuant to an indemnity
provision in its contract with Moore U.S.A., Inc. Mr. Tornetta's patent
describes a specific method for searching real estate properties, which Mr.
Tornetta alleges is infringed by Moore U.S.A., Inc.'s online real estate
service. MapQuest believes that the claims of the patent are not infringed by
MapQuest, and/or the patent is invalid. While the litigation is in the early
stage, and its outcome cannot be predicted, MapQuest believes that this
litigation is without merit, and intends to defend this action vigorously.
On January 26, 1999, Civix-DDI, LLC filed a lawsuit in the United States
District Court for the District of Colorado against twenty different
defendants, including MapQuest. Seven of these defendants are licensees of
MapQuest technology and may have rights to indemnification under their
respective agreements or at law. The complaint alleges infringement by MapQuest
of two patents, by manufacture, use, sale, and offers to sell MapQuest
electronic yellow page services, systems and products. MapQuest believes that
the claims of the patents are not infringed by MapQuest, and/or the patents are
invalid. While the litigation is in the early stage, and its outcome cannot be
predicted, MapQuest believes that this litigation is without merit, and intends
to defend this action vigorously.
MapQuest is not party to any other material legal proceedings.
37
<PAGE>
MANAGEMENT
Executive Officers and Directors and Key Employees
The following table sets forth certain information with respect to the
executive officers, key employees and directors of MapQuest as of the date of
this prospectus.
<TABLE>
<CAPTION>
Name Age Position(s)
---- --- -----------
<C> <C> <S>
*Michael Mulligan................ 48 Chief Executive Officer and Chairman
*James Thomas.................... 48 Chief Operating Officer, Chief
Financial Officer and Treasurer
*William Muenster................ 46 Senior Vice President of Development
and Production
James Hilliard................... 47 Vice President of Digital Mapping
Services
James Killick.................... 36 Vice President of Product Management
Michael Nappi.................... 44 Vice President of Business Solutions
David Ingerman................... 36 Vice President of Marketing
Michael Crosson.................. 46 Vice President of Advertising Sales
Robert Binford................... 44 Corporate Controller, Assistant
Treasurer
Robert McCormack (1)............. 59 Director
John Moragne (2)................. 42 Director
Daniel Nova (2).................. 37 Director
Carlo von Schroeter (1).......... 35 Director
C. Richard Allen................. 44 Director
</TABLE>
- --------
* Denotes executive officer.
(1) Member of Audit Committee.
(2) Member of Compensation Committee.
Michael Mulligan has served as Chief Executive Officer and Chairman of
MapQuest since August 1998. From May 1995 to June 1998, Mr. Mulligan was Senior
Vice President and General Manager of Corporate Services Interactive at
American Express Travel Related Services, where he was responsible for
developing and implementing American Express' interactive travel strategy. Mr.
Mulligan was an independent consultant to various companies from October 1994
to April 1995. From September 1993 to October 1994, Mr. Mulligan served as
Chief Operating Officer of Official Airline Guide, an airline information
publishing company. Mr. Mulligan holds a B.A. from Wheeling College and an
M.B.A. from Harvard Business School.
James Thomas has served as Chief Financial Officer of MapQuest since July
1995 and as Chief Operating Officer of MapQuest since June 1997. From September
1994 to June 1995, Mr. Thomas was an independent consultant. From July 1993 to
August 1994, Mr. Thomas was President of the publishing division of Sierra On-
Line, Inc., a multimedia entertainment publisher and developer. Mr. Thomas
holds a B.S. from the Florida Institute of Technology and an M.B.A. from the
University of Virginia.
William Muenster has served as Senior Vice President of Development and
Production of MapQuest since September 1997. From February 1995 to August 1997,
Mr. Muenster served as Unit President of MapQuest's Mapping Products and
Services Group. From November 1993 to February 1995, Mr. Muenster served as
MapQuest's Vice President of Operations. Mr. Muenster holds a B.A. from the
University of Virginia and an M.I.M. from the American Graduate School.
James Hilliard has served as Vice President of Digital Mapping Services of
MapQuest since October 1998. From June 1996 to October 1998, Mr. Hilliard
served as MapQuest's Vice President of Sales and Marketing for Mapping Products
and Services. From July 1993 to June 1996, Mr. Hilliard served as MapQuest's
Director of Publisher Services. Mr. Hilliard holds a B.B.A. and an M.S. from
the University of Wisconsin.
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<PAGE>
James Killick has served as Vice President of Product Management of
MapQuest since January 1998. From January 1997 to January 1998, Mr. Killick was
MapQuest's Director of Product Management. From January 1996 to January 1997,
Mr. Killick served as MapQuest's Director of Data Products. From January 1995
to January 1996, Mr. Killick was Director of Product Marketing at Etak, Inc., a
mapping database company. From January 1994 to January 1995, Mr. Killick served
as Director of Map Data Products at Etak, Inc. Mr. Killick holds a B.Sc. from
the University of York, England.
Michael Nappi has served as Vice President of Business Solutions of
MapQuest since October 1997. From September 1995 to October 1997, Mr. Nappi
served as MapQuest's Director of Business Development. Mr. Nappi held various
sales positions with MapQuest from May 1992 to September 1995. Mr. Nappi holds
a B.A. and a B.S. from Kent State University.
David Ingerman has served as Vice President of Marketing of MapQuest since
January 1999. From June 1998 to December 1998, Mr. Ingerman was President of
Internet Marketing Associates Consulting, a consulting firm focusing on
applying direct marketing disciplines to the Internet. From August 1984 to May
1998, Mr. Ingerman held various marketing positions at American Express. Mr.
Ingerman holds a B.A. from the University of Pennsylvania and an M.B.A. from
Columbia Business School.
Michael Crosson has served as Vice President of Advertising Sales of
MapQuest since January 1999. From March 1998 to January 1999, Mr. Crosson
served as the Managing Director of Eastern Sales for NetRatings, a web audience
measurement company. From January 1993 to March 1998, Mr. Crosson operated his
own consulting business, developing strategic advertising and partnerships for
websites. From April 1992 to August 1996, Mr. Crosson served as Director of
Online Publishing at Scholastic, Inc., a publishing company. Mr. Crosson holds
a B.A. from the University of Arizona.
Robert Binford has served as Corporate Controller of MapQuest since January
1995. From February 1991 to January 1995, Mr. Binford served as a Financial
Manager of MapQuest. Mr. Binford holds a B.S. from the University of Kentucky.
Robert McCormack has served as a director of MapQuest since May 1998 and
previously served as a director of MapQuest from November 1994 to July 1997.
Since 1993, Mr. McCormack has been a managing director of Trident Capital,
Inc., the general partner of Trident Capital, L.P., a private equity investment
firm. Mr. McCormack serves on the boards of directors of Illinois Tool Works,
Inc. and DeVry, Inc. Mr. McCormack holds a B.A. from the University of North
Carolina and an M.B.A. from the University of Chicago. Mr. McCormack was
elected to the board of directors pursuant to a voting agreement between
MapQuest and some of MapQuest's stockholders which will be terminated upon the
closing of this offering.
John Moragne has served as a director of MapQuest since November 1994 and
was Chairman of the board of directors of MapQuest from November 1994 until
July 1997. Since 1993, Mr. Moragne has been a managing director of Trident
Capital, Inc., the general partner of Trident Capital, L.P., a private equity
investment firm. Mr. Moragne serves on the boards of directors of Daou Systems,
Inc. Mr. Moragne holds a B.A. from Dartmouth College, an M.S. from Stanford
University and an M.B.A. from Stanford Business School. Mr. Moragne was elected
to the board of directors pursuant to a voting agreement between MapQuest and
some of MapQuest's stockholders which will be terminated upon the closing of
this offering.
Daniel Nova has served as a director of MapQuest since July 1997. Since
August 1996, Mr. Nova has served as a general partner of Highland Capital
Partners, a venture capital firm. Previously, he was a general partner of
CMG@Ventures from January 1995 to August 1996 and a Senior Associate at Summit
Partners from June 1991 to January 1995. Mr. Nova is a director of eToys, an
online retailer of toys, Lycos, Inc., an online portal and several private
companies. Mr. Nova received a Bachelor of Science in Computer Science and
Marketing with honors from Boston College and a Masters in Business
Administration from Harvard Business School. Mr. Nova was elected to the board
of directors pursuant to a voting agreement between MapQuest and some of
MapQuest's stockholders which will be terminated upon the closing of this
offering.
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<PAGE>
Carlo von Schroeter has served as a director of MapQuest since July 1997.
Mr. von Schroeter is a General Partner of Weston Presidio Capital, a private
equity partnership with over $900 million under management. Prior to joining
Weston Presidio Capital at its inception in September 1992, Mr. von Schroeter
was a Vice President with Security Pacific Capital. Mr. von Schroeter serves on
the boards of directors of NOVA Pb, U.S. Netting, Star International Holdings,
and The Lion Brewery. Mr. von Schroeter holds a B.S. from Queen's University,
Canada and an M.B.A. from Harvard Business School. Mr. von Schroeter was
elected to the board of directors pursuant to a voting agreement between
MapQuest and some of MapQuest's stockholders which will be terminated upon the
closing of this offering.
C. Richard Allen has served as a director of MapQuest since May 1998. Since
December 1997, Mr. Allen has served as the President and Chief Executive
Officer of National Geographic Holdings, Inc. Mr. Allen is also the Chief
Executive Officer of National Geographic Ventures, a position he has held since
October 1997. From December 1995 to October 1997, Mr. Allen was a Senior Vice
President of Discovery Communications, Inc., and from February 1993 to December
1995, Mr. Allen was Deputy Assistant to the President of the United States. Mr.
Allen serves on the boards of directors of National Geographic Ventures,
National Geographic Television, National Geographic Holdings, Inc., National
Geographic Channel and Destination Cinema, Inc. Mr. Allen holds a B.A. from
Dartmouth College and a J.D. from the University of Chicago. Mr. Allen is the
nominee of the National Geographic Society to the board of directors pursuant
to an agreement between MapQuest and the National Geographic Society which will
be modified upon the closing of this offering so as to terminate the National
Geographic Society's right to nominate a director to the board of directors.
Please see "Certain Transactions--National Geographic Alliance" for a
description of this agreement.
Each officer serves at the discretion of MapQuest's board of directors.
Within 90 days following this offering, MapQuest expects to nominate and
elect an additional independent director.
Director Terms and Compensation
The members of the board of directors of MapQuest are divided into three
classes, each of whose members will serve for a staggered three-year term. Upon
the expiration of the term of a class of directors, directors in that class
will be elected for three-year terms at the annual meeting of stockholders in
the year in which their term expires. Independent, non-institutional investor
directors are paid an annual retainer and will be granted stock options
exercisable for shares of common stock. Directors who are also employees of
MapQuest or who are affiliated with institutional investors do not receive any
additional compensation for serving on the board of directors.
Compensation Committee Interlocks and Insider Participation
Pursuant to a voting agreement which will be terminated upon the closing of
this offering, MapQuest's compensation committee is comprised of one director
designated by Highland Capital Partners and Weston Presidio Capital, one
director designated by Trident Capital Partners Fund - I, L.P. and Trident
Capital Partners Fund - I, C.V. and one director designated by all of the
directors other than those nominated by members of management. MapQuest's
compensation committee currently has two members. In the past, compensation of
executive officers of MapQuest has been determined by directors of MapQuest who
were not officers of MapQuest. No interlocking relationship exists between
MapQuest's board of directors and the board of directors or compensation
committee of any other company, nor has any interlocking relationship existed
in the past.
40
<PAGE>
Limitation of Liability and Indemnification Matters
MapQuest's certificate of incorporation limits the liability of directors
to the maximum extent permitted by Delaware law. The Delaware General
Corporation Law provides that the personal liability of a director for monetary
damages for breach of his or her fiduciary duties as a director may be
eliminated, except for liability for:
. any failure to act in good faith in the best interests of the
corporation or its stockholders;
. acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
. unlawful payments of dividends or unlawful stock repurchases or
redemptions; or
. any transaction from which the director derives an improper personal
benefit.
MapQuest's bylaws provide that MapQuest will indemnify its directors and
officers and may indemnify its employees and agents to the fullest extent
permitted by Delaware law.
In addition to the indemnification provided for in its certificate of
incorporation and bylaws, MapQuest intends to enter into agreements to
indemnify its directors and officers. Under these agreements, MapQuest will be
obligated to indemnify its directors and officers for expenses, attorneys'
fees, judgments, fines and settlement amounts incurred by any director or
officer in any action or proceeding arising out of the director's or officer's
services as a director or officer of MapQuest, any subsidiary of MapQuest or
any other company or enterprise to which the person provides services at the
request of MapQuest. MapQuest believes that these provisions and agreements are
necessary to attract and retain qualified individuals to serve as directors and
officers.
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<PAGE>
Executive Compensation and Employment Agreements
The following table sets forth information concerning the compensation
received for services rendered to MapQuest by its current Chief Executive
Officer and each of the other four most highly-compensated executive officers
of MapQuest for the year ended December 31, 1998, whose total compensation in
1998 equaled or exceeded $100,000:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation
Compensation Awards
--------------- Securities
Salary Bonus Underlying All Other
Name and Principal Position ($) ($) Options Compensation
--------------------------- ------- ------- ------------ ------------
<S> <C> <C> <C> <C>
Michael Mulligan,
Chief Executive Officer (1).... 94,769 100,000 1,944,000 --
James Thomas, Chief Operating
Officer and Chief Financial
Officer........................ 150,000 -- -- --
William Muenster, Senior Vice
President of Development and
Production..................... 140,004 -- -- --
James Hilliard, Vice President of
Digital Mapping Services....... 115,008 28,177(2) 94,500 --
Michael Nappi, Vice President of
Business Solutions............. 107,508 69,814(3) 243,000 --
Barry Glick, Former Chief
Executive Officer (4).......... 131,256 -- -- 56,041(5)
</TABLE>
- --------
(1) Mr. Mulligan was appointed Chief Executive Officer and Chairman of MapQuest
on August 10, 1998. He received salary payments for the period August 10,
1998 through December 31, 1998.
(2) Consists of a $23,177 bonus accrued in 1997 and paid in 1998 and a $5,000
sales bonus earned and paid in 1998.
(3) Reflects sales commissions paid to Mr. Nappi.
(4) Mr. Glick served as MapQuest's Chief Executive Officer prior to Mr.
Mulligan's appointment and received salary payments for the period January
1, 1998 through September 30, 1998.
(5) Represents payments made in connection with Mr. Glick's voluntary
termination of employment. See "Certain Transactions--Other Transactions."
David Ingerman was hired by MapQuest on January 15, 1999 to serve as Vice
President of Marketing. His base salary is $130,008 and he may earn a bonus of
up to 50% of his base salary upon the attainment of performance goals set by
the board of directors. Mr. Ingerman also received options to purchase 270,000
shares of common stock at an exercise price of the per share price of this
offering. These options vest over four years and expire on January 15, 2009.
Michael Crosson was hired by MapQuest on January 20, 1999 to serve as Vice
President of Advertising. His base salary is $125,004 and he received a bonus
of $10,000 upon commencing his employment with MapQuest. Mr. Crosson is also
entitled to sales commissions equal to 5% of any recognized personal sales,
1.5% of any sales made for MapQuest through third-party advertising sales
representatives and 1.5% of any recognized sales made by Mr. Crosson's sales
staff. Mr. Crosson also received options to purchase 135,000 shares of common
stock at an exercise price of the per share price of this offering. These
options vest over four years and expire on January 20, 2009.
42
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information as to options granted to the
named executive officers during the year ended December 31, 1998. MapQuest has
not granted any stock appreciation rights.
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation for
Individual Grants Option Term (1)
------------------------------------------- -----------------------
Percent of
Total
Number of Options
Securities Granted to Exercise
Underlying Employees Price
Options in Fiscal Per Expiration
Name Granted Year (2) Share Date 5% 10%
---- ---------- ---------- -------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Michael Mulligan (3).... 1,944,000 67.9% $0.37 8/10/08 $452,351 $1,146,347
James Thomas............ -- -- -- -- -- --
William Muenster........ -- -- -- -- -- --
James Hilliard.......... 54,000 1.9 0.37 2/1/08 12,565 31,843
40,500 1.4 11.00(4) 12/30/08 280,173(4) 710,012(4)
Michael Nappi........... 81,000 2.8 0.37 2/1/08 18,848 47,764
162,000 5.7 11.00(4) 12/30/08 1,120,690 2,840,049
Barry Glick............. -- -- -- -- -- --
</TABLE>
- --------
(1) Potential realizable values are net of exercise price, but before the
payment of taxes associated with exercise. Amounts represent hypothetical
gains that could be achieved for the respective options if exercised at the
end of the option term. The 5% and 10% assumed annual rates of compounded
stock price appreciation are mandated by rules of the Securities and
Exchange Commission and do not represent MapQuest's estimate or projection
of MapQuest's future common stock prices. These amounts represent certain
assumed rates of appreciation in the value of the common stock from the
fair market value on the date of grant. Actual gains, if any, on stock
option exercises are dependent on the future performance of the common
stock and overall stock market conditions. The amounts reflected in the
table may not necessarily be achieved.
(2) Based on options to purchase an aggregate of 2,863,620 shares of common
stock granted to MapQuest employees during the year ended December 31,
1998.
(3) These options vest over four years as follows: 16.67% on August 10, 1998,
16.67% on the date of this offering, and 16.67% on each of August 10, 1999,
August 10, 2000, August 10, 2001 and August 10, 2002.
(4) The exercise price of these options will be the initial public offering
price in this offering. For purposes of calculating the potential
realizable value, the exercise price is assumed to be $11.00 per share.
43
<PAGE>
AGGREGATED STOCK OPTION EXERCISES IN FISCAL 1998
AND FISCAL YEAR-END OPTION VALUES
The following table sets forth information with respect to unexercised
options held by the named executive officers as of December 31, 1998. No
options were exercised by the named executive officers during 1998.
<TABLE>
<CAPTION>
Number of Securities
Underlying Value of Unexercised
Unexercised Options In-the-Money Options
at December 31, 1998 at December 31, 1998(1)
------------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Michael Mulligan............ 324,064 1,619,936 $3,444,680 $17,219,311
James Thomas................ 202,769 312,905 2,208,282 3,382,957
William Muenster............ 224,940 287,977 2,451,351 3,109,660
James Hilliard.............. 47,250 155,250 513,050 1,226,950
Michael Nappi............... 16,200 253,800 177,600 979,400
Barry Glick................. 508,914 -- 5,567,382 --
</TABLE>
- --------
(1) There was no public trading market for the common stock as of December 31,
1998. Accordingly, these values have been calculated on the basis of the
assumed initial public offering price of $11.00 per share, less the
applicable exercise price per share, multiplied by the number of shares
underlying such options.
Employment Agreements
William Muenster Employment Agreement. In October 1994, MapQuest entered
into an employment agreement with Mr. Muenster providing for (1) an initial
annual base salary of $82,500, subject to annual increases at the discretion of
MapQuest's board of directors, and (2) incentive compensation of an immediately
payable bonus of $10,000 and the right to participate in MapQuest's annual
bonus program. Mr. Muenster is entitled to (1) an annual bonus of 15% of his
base salary if MapQuest achieves its annual budget and (2) an additional bonus
of up to 15% of his base salary for any other target that the board of
directors establishes. If MapQuest terminates Mr. Muenster's employment without
cause or if he voluntarily terminates his employment, he is entitled to receive
severance benefits equal to (1) any salary and bonus earned through the date of
his termination, (2) base salary for the six-month period after the date of his
termination and (3) health plan benefits for one year following the date of his
termination. If Mr. Muenster is terminated by MapQuest for cause, he is
entitled to receive (1) his base compensation, (2) all earned and unpaid bonus
compensation through the termination date of his employment and (3) health plan
benefits for one year following the date of his termination. In addition, Mr.
Muenster has agreed to confidentiality, non-competition and non-solicitation
provisions.
Michael Mulligan Employment Agreement. On August 10, 1998, MapQuest entered
into an employment agreement with Mr. Mulligan providing for (1) an initial
annual base salary of $240,000, subject to annual increases at the discretion
of MapQuest's board of directors, and (2) incentive compensation of up to
$145,000 per year, based on objectives and according to a plan to be agreed to
by Mr. Mulligan and MapQuest's board of directors. If MapQuest terminates Mr.
Mulligan's employment without cause, he is entitled to receive severance
benefits equal to (1) any salary and bonus earned through the date of his
termination, and (2) health insurance benefits for one year after the date of
termination. If Mr. Mulligan is terminated by MapQuest for cause or if he
resigns following the first anniversary of his employment, he is entitled to
receive (1) his base salary and (2) all earned and unpaid bonus compensation
through his termination date. In addition, Mr. Mulligan has agreed to
confidentiality, non-competition and non-solicitation provisions.
In addition, MapQuest granted Mr. Mulligan options to purchase 1,944,000
shares of common stock at an exercise price of $0.37 per share. The options
granted under the employment agreement, subject to certain contingencies, vest
over four years as follows: 16.67% on August 10, 1998, 16.67% on the date of
this offering,
44
<PAGE>
16.67% on each of August 10, 1999, August 10, 2000, August 10, 2001 and August
10, 2002. All of Mr. Mulligan's options will vest immediately in the event of
the takeover of MapQuest by another person or corporation.
Employee Benefit Plans
1995 Stock Option Plan
An aggregate of 6,233,627 shares are reserved for issuance under the 1995
stock option plan. MapQuest may grant stock options under the 1995 stock option
plan to its employees and officers and consultants. The board of directors
selects the individuals to whom options are granted and specifies the terms of
the options. Stock options granted under the 1995 stock option plan may either
be incentive stock options within the meaning of Section 422 of the Internal
Revenue Code of 1986 or stock options that do not qualify as incentive stock
options. As of December 31, 1998, options to purchase an aggregate of 4,847,650
shares of common stock had been granted, at a weighted average exercise price
of $0.26 per share and options to purchase an aggregate of 645,570 shares of
common stock had been granted, at an exercise price equal to the price per
share in this offering. Since December 31, 1998, MapQuest has granted options
to purchase an aggregate of 522,450 shares of common stock at an exercise price
equal to the price per share of this offering. Options to purchase 1,484,954
shares of common stock will vest and become exercisable on the closing of this
offering.
Incentive stock options granted under the 1995 stock option plan may not be
exercised more than 10 years after the date of grant. If an optionee leaves
MapQuest, the optionee generally may exercise only those options vested as of
the date of termination of service. Unless otherwise specified in the option
agreement, if an optionee desires to exercise an option, the optionee must
exercise within 90 days of termination of service for any reason other than
death or disability, and within one year after termination due to death or
disability. The exercise price of incentive stock options granted under the
stock option plan cannot be less than the fair market value of the common stock
of MapQuest on the date of grant. The exercise price of nonqualified stock
options cannot be less than the lesser of $0.04 per share or the fair market
value of the common stock as of the date of the stock option grant. An optionee
may pay the exercise price in cash or in shares of MapQuest's common stock
having a total fair market value equal to the aggregate exercise price.
The 1995 stock option plan provides for adjustments if a recapitalization
or other change in the common stock of MapQuest which dilutes the rights of
stock option plan participants. If any person, directly or indirectly, acquires
securities of MapQuest representing 50% or more of the voting power of MapQuest
or other specified events constituting a change of control, each outstanding
option automatically vests and becomes fully exercisable.
Employee Stock Purchase Plan
Concurrently with this offering, MapQuest will establish an employee stock
purchase plan under which a total of 1,755,000 shares of common stock will be
made available for sale. The purchase plan, which is intended to qualify as an
employee stock purchase plan within the meaning of Section 423 of the Internal
Revenue Code of 1986 will be administered by the board of directors or by a
committee appointed by the Board. All employees of MapQuest or any present or
future subsidiary of MapQuest designated by the Board of Directors may
participate in the purchase plan. The purchase plan will permit eligible
employees to purchase common stock through payroll deductions, which may not
exceed 10% of an employee's compensation, subject to certain limitations. The
purchase plan will be implemented in a series of consecutive, overlapping
offering periods, each approximately six months in duration. The purchase price
of each share of common stock under the purchase plan will be equal to the
lesser of 85% of the closing price per share of the common stock on the NASDAQ
National Market System on the start date of that offering period or on the date
of termination of the offering period. Employees may modify or end their
participation in the purchase plan at any time prior to the termination date of
an offering period. An employee's participation ends on the employee's
termination of employment with MapQuest. The purchase plan will terminate in
2009 unless sooner terminated by MapQuest's Board of Directors.
45
<PAGE>
1999 Stock Plan
At the closing of this offering, the board of directors of MapQuest will
adopt a 1999 stock plan. MapQuest has reserved 3,645,000 shares of common stock
for the 1999 stock plan. Pursuant to the omnibus stock plan, MapQuest may grant
stock options, stock appreciation rights, restricted or unrestricted share
awards, phantom stock, performance awards or any combination of the foregoing
to employees, officers, directors of MapQuest and its subsidiaries. However,
incentive stock options may only be granted to employees of MapQuest. The plan
will be administered by a committee appointed by the board of directors. The
committee will select the Individuals to whom options are granted and will
specify the terms of the options.
. Incentive Stock Options. These options may not be exercised more than 10
years after the date of grant. The exercise price must be at least equal
to the fair market value of MapQuest's common stock on the date of grant.
The purchase price of the shares issued upon exercise of these options
may be paid in cash or shares of common stock having a total fair market
value equal to the aggregate purchase price.
. Non-Qualified Stock Options. These options may not be exercised more than
10 years after the date of grant. The exercise price will be determined
by the stock option plan committee. The purchase price of shares issued
upon exercise of these options may be paid in cash or shares of common
stock having a total fair market value equal to the aggregate purchase
price.
. Stock Appreciation Rights. These rights may be granted on a free-standing
or tandem basis. The term of exercise will be determined by the board of
directors, but in no event will be more than 10 years from the date of
grant. These rights entitle the holder to receive a payment having an
aggregate value equal to the product of the excess of the fair market
value over the exercise price per share specified in the grant multiplied
by the number of shares specified in the award. Payment by MapQuest of
the amount receivable in respect of the stock appreciation right may be
paid in any combination of cash and common stock.
. Phantom Stock, Restricted Shares and Performance Awards. These grants and
awards may be made at the discretion of the committee. The method of
payment of the exercise price will be determined by the committee and may
include a combination of cash and common stock having a fair market value
equal to the aggregate exercise price.
The 1999 stock plan will provide for adjustments if a recapitalization or
other change in the common stock of MapQuest which dilutes the rights of 1999
stock plan participants.
401(k) Plan
MapQuest has a tax-qualified employee savings plan which covers all of
MapQuest's full-time employees who are at least 21 years of age and who have
been employed with MapQuest for at least one month. Eligible employees may
defer up to 15% of their pre-tax earnings, subject to the Internal Revenue
Service's annual contribution limit. The MapQuest 401(k) plan permits
additional discretionary matching contributions by MapQuest on behalf of all
participants in the MapQuest 401(k) plan in an amount determined by MapQuest.
The MapQuest 401(k) plan is intended to qualify under Section 401 of the
Internal Revenue Code of 1986 so that contributions by employees or by MapQuest
to the MapQuest 401(k) plan, and income earned on plan contributions, are not
taxable to employees until withdrawn from the plan, and so that contributions
by MapQuest, if any, will be deductible by MapQuest when made.
46
<PAGE>
CERTAIN TRANSACTIONS
Equity Transactions
Equity Sale by R.R. Donnelley & Sons Company and 77 Capital Corporation
On May 8, 1998, R.R. Donnelley & Sons Company and 77 Capital Corporation
sold their respective equity positions in MapQuest to Highland Capital Partners
III Limited Partnership, Highland Entrepreneurs' Fund III Limited Partnership,
Weston Presidio Capital II, L.P., Trident Capital Partners Fund-I, L.P. and
Trident Capital Partners Fund-I, C.V. R.R. Donnelley & Sons Company sold
3,000,000 shares of series A preferred stock and 1,000,000 shares of series B
preferred stock. 77 Capital Corporation sold 220,798 shares of series C
preferred stock. The aggregate sale price for these transactions was $7
million.
Series C Preferred Stock. In July 1997, MapQuest sold an aggregate of
3,431,498 shares of series C preferred stock for an aggregate purchase price of
$12,044,558, or $3.51 per share, to various investors, including Highland
Capital Partners III Limited Partnership, Highland Entrepreneurs' Fund III
Limited Partnership, Weston Presidio Capital II, L.P., Trident Capital Partners
Fund-I, L.P., Trident Capital Partners Fund-I, C.V., The Roman Arch Fund, L.P.,
the Roman Arch Fund II, L.P., and Stet & Query, L.P.
Rights Agreement. Series A preferred stock investors and series C preferred
stock investors entered into a rights agreement concurrent with the sale of the
series C preferred stock. Pursuant to the rights agreement, holders of not less
than 35% of either the outstanding series A preferred stock or outstanding
series C preferred stock or any common stock issued or issuable upon conversion
of series A preferred stock or series C preferred stock may request that
MapQuest cause their shares of common stock to be registered under the
Securities Act. See "Description of Capital Stock--Registration Rights of
Certain Holders."
In November 1997, James Thomas, MapQuest's Chief Financial Officer, and
William Muenster, its Senior Vice President of Development and Production, each
purchased 31,928 shares of series C preferred stock from MapQuest for
$112,067.28, or $3.51 per share, paid in each case by delivery to MapQuest of a
non-recourse promissory note. Each promissory note bears interest at 7.0%
accruing as and from November 1, 1999. Payments under the promissory notes are
due beginning November 1, 2000 in an amount that is the lesser of one-fifth of
the principal balance together with any accrued interest or 50% of any bonus to
which such person is entitled while an employee of MapQuest. Each of these
promissory notes is payable in full on November 1, 2004. The promissory notes
are secured by the shares purchased, with shares released to the extent each
promissory note is paid. At December 31, 1998, $112,067.28 remained outstanding
on Mr. Thomas's promissory note and $112,067.28 remained outstanding on Mr.
Muenster's promissory note. Each of Mr. Thomas and Mr. Muenster have the right
to cause MapQuest to purchase their series C preferred stock at the fair market
value upon the earlier of each person's death or disability or November 1,
2007.
Other Transactions
Related Party Transactions. During 1998, MapQuest paid $16,597 to R.R.
Donnelley & Sons Company, a then stockholder. MapQuest recorded sales to
R.R. Donnelley & Sons Company of $513,626 during 1998. Also, MapQuest recorded
sales to an affiliate, the National Geographic Society, of $2,022,000 during
1998.
Evans 1996 Stock Purchase. In March 1996, pursuant to the terms of an
employment agreement dated October 31, 1994, MapQuest sold an aggregate of
35,000 shares of series A preferred stock at an aggregate purchase price of
$35,000, or $1.00 per share, to Perry Evans, MapQuest's then Vice President of
Sales and Marketing. The purchase price was paid as $3,500 in cash and $31,500
as a promissory note due October 31, 2000. The promissory note bears interest
at a rate of 7.5% per annum. The promissory note is secured by the shares
purchased with shares released to the extent the promissory note is paid. At
December 31, 1998, $31,500 in principal amount remained outstanding under this
promissory note.
47
<PAGE>
Evans Separation Agreement. In September 1997, upon the voluntary
termination of Mr. Evans' employment as Vice President of Sales and Marketing,
MapQuest agreed to engage Mr. Evans as an independent consultant and paid him a
separation fee of approximately $93,656, forgave him $27,000 in respect of
unearned bonus payments he had received and agreed to provide him with his then
current medical and certain other benefits until November 7, 1997.
Glick Separation Agreement. In June 1998, upon the voluntary termination of
Mr. Glick's employment as Chief Executive Officer and pursuant to a transition
agreement and general release, MapQuest agreed to pay Mr. Glick a total of
approximately $43,752, representing separation and salary payments for the
period between July 1, 1998 and September 30, 1998, inclusive.
National Geographic Alliance
MapQuest, the National Geographic Society, and a subsidiary of the National
Geographic Society, National Geographic Holdings, Inc. ("National Geographic"),
entered into a Cartographic Product Development, Publishing, Marketing and
Distribution Agreement in April 1997 (the "National Geographic Agreement")
which established a five-year alliance, commencing May 1997, to pursue
commercial opportunities involving mapping products and services using
trademarks and copyrighted materials of National Geographic. MapQuest is
authorized to be the primary, and in limited cases, exclusive, commercial
publisher of National Geographic mapping products and services, including
products such as maps, globes, road atlases, reference atlases, historical
atlases, and map guide products which are distributed other than by National
Geographic to its members or in promotion to prospective members. Pursuant to
its rights under the National Geographic Agreement, National Geographic has
designated C. Richard Allen to serve as its nominee director on MapQuest's
Board of Directors. As part of this arrangement, National Geographic Holdings,
Inc. received warrants to purchase 954,147 shares of common stock with an
exercise price of $1.04 per share. The warrants were valued at $0 on the date
of grant using the "Black Scholes" option pricing model.
Under the National Geographic Agreement, MapQuest has guaranteed minimum
annual royalty payments to National Geographic for each year of the initial
five-year term of the agreement. MapQuest must pay additional royalties on the
net revenues derived by MapQuest from the sale of National Geographic related
products and services. The National Geographic Agreement's initial five-year
term automatically extends provided that:
.MapQuest has not elected to terminate;
.MapQuest has not breached the National Geographic Agreement;
. National Geographic has received a minimum aggregate royalty payment of
$2.0 million from MapQuest in each of the last three years of the
initial term; and
.minimum royalties have been negotiated in accordance with the National
Geographic Agreement.
Warrants
As of December 31, 1998, warrants to purchase 2,314,611 shares of common
stock were outstanding at a weighted-average exercise price of $0.69 per share.
Generally, each warrant contains provisions for the adjustment of the exercise
price and the aggregate number of shares issuable upon the exercise of the
warrant in the event of stock dividends, stock splits, reorganizations,
reclassifications, consolidations and dilutive issuances of securities at
prices below the then existing warrant exercise price. Set forth below is a
summary of the outstanding warrants.
Prudential Warrant. In connection with the sale of the series C preferred
stock, MapQuest issued to Prudential Securities Incorporated a warrant for an
aggregate purchase price of $1,000 to purchase 406,709 shares of MapQuest's
common stock at an exercise price of $1.30 per share. The warrant is
exercisable prior to July 2002.
National Geographic Warrant. In April 1997, in connection with the National
Geographic Agreement, MapQuest issued National Geographic warrants (the
"National Geographic Warrants") to purchase 954,147 shares of common stock at
an exercise price of $1.04 per share. The warrants were valued at $0 on the
date of grant using the "Black Scholes" option pricing model. The National
Geographic Warrant expires on April 22, 2002, or earlier in the event of a
termination of the National Geographic Agreement without cause by
48
<PAGE>
National Geographic or termination by MapQuest for material breach by National
Geographic. If National Geographic has exercised the National Geographic
Warrant prior to MapQuest terminating the National Geographic Agreement due to
a breach of the agreement by National Geographic, MapQuest has the option to
purchase the shares of common stock issued upon exercise of the warrant for a
period of 60 days after the termination of the National Geographic Agreement at
a purchase price equal to the lesser of $1.77 or the then fair market value of
such shares.
Warrants to Series C Investors. In May 1998, MapQuest and some of the
series C preferred stock investors entered into an agreement to preserve these
investors' fully diluted ownership percentage in MapQuest as a result of the
increase in the number of options to purchase shares of common stock eligible
for award under the 1995 stock option plan and the appointment of Mr. Michael
Mulligan as Chief Executive Officer of MapQuest. Pursuant to this agreement,
the series C preferred stock investors were issued an aggregate of 522,231
warrants to purchase common stock at an exercise price of $0.004 per share. The
warrants are exercisable prior to April 30, 2008.
Executive Search Firm Warrants. Effective September 22, 1998, MapQuest
issued to Ramsey/Beirne Associates a warrant to purchase 41,266 shares of
MapQuest common stock in partial consideration for executive search firm
services Ramsey/Beirne Associates performed. The warrant is exercisable at any
time prior to September 22, 2003 at an exercise price of $1.30 per share.
49
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth information with respect to the beneficial
ownership of MapQuest's common stock as of December 31, 1998:
. each person or entity who is known by MapQuest to beneficially own five
percent or more of the outstanding shares of MapQuest's common stock;
. each director;
. each named executive officer; and
. all directors and executive officers of MapQuest as a group.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage ownership of that person,
shares of common stock subject to options and warrants held by that person that
are currently exercisable or exercisable within 60 days of April 7, 1999, are
treated as outstanding. These shares, however, are not treated as outstanding
for the purpose of computing the percentage ownership of any other person.
Except as indicated in the footnotes to this table the following individuals
have sole voting and investment power with respect to the shares they
beneficially own.
<TABLE>
<CAPTION>
Beneficially Owned Securities
-----------------------------------------------------------------------
Number of Shares Percentage of Shares
Beneficially Owned Includes Beneficially Owned
Total --------------------------- ------------------------
Number of Shares Securities Securities
Beneficially Underlying Underlying Before After
Name (1) Owned Warrants Options Offering Offering
- -------- ---------------- ------------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Trident Capital Partners
Fund - I, L.P.(1)..... 9,684,802 352,755 34.7% 29.8%
Trident Capital Partners
Fund - I, C.V.(1)..... 1,915,844 69,781 6.9 5.9
Robert
McCormack(2)(3)..... 11,600,646 422,536 41.4 35.6
John Moragne(2)(3).... 11,600,646 422,536 41.4 35.6
Rockwell Schnabel(3).. 11,600,646 422,536 41.4 35.6
Stephen Hall(3)....... 11,600,646 422,536 41.4 35.6
Donald Dixon(3)....... 11,600,646 422,536 41.4 35.6
Weston Presidio Capital
II, L.P.(4)........... 6,844,480 223,826 24.6 21.1
Carlo von
Schroeter(2)(5)..... 6,844,480 223,826 24.6 21.1
Michael Cronin(5)..... 6,844,480 223,826 24.6 21.1
Michael Lazarus(5).... 6,844,480 223,826 24.6 21.1
James McElwee(5)...... 6,844,480 223,826 24.6 21.1
Philip Halperin(5).... 6,844,480 223,826 24.6 21.1
Highland Capital
Partners III Limited
Partnership(5)........ 6,570,698 214,873 23.7 20.3
Highland Entrepreneurs'
Fund III, L.P.(5)..... 273,780 8,953 1.0 0.9
Daniel Nova(2)(7)..... 6,844,478 223,826 24.6 21.1
Robert Higgins(7)..... 6,844,478 223,826 24.6 21.1
Paul Maeder(7)........ 6,844,478 223,826 24.6 21.1
Wycliffe
Grousbeck(7)........ 6,844,478 223,826 24.6 21.1
Michael Mulligan ....... 958,608 648,064 3.4 2.9
James Thomas ........... 803,767 4,770 515,675 2.9 2.6
William Muenster ....... 806,393 4,770 512,915 2.9 2.6
James Hilliard ......... 162,000 162,000 0.6 0.5
Michael Nappi .......... 108,000 108,000 0.4 0.3
C. Richard Allen(2)(8).. 954,147 954,147 3.3 2.8
Barry Glick ............ 778,912 508,912 2.8 2.4
Directors & Executive
Officers as a group
(fifteen persons) .... 30,084,185 1,833,877 2,678,317 94.4 82.0
</TABLE>
50
<PAGE>
- --------
(1) The address of each of Trident Capital Partners Fund - I, L.P. and Trident
Capital Partners Fund - I, C.V. is 2480 Sand Hill Road, Suite 100, Menlo
Park, California 94025.
(2) Director of MapQuest.
(3) Includes 9,684,802 shares held by Trident Capital Partners and 1,915,844
shares held by Trident Capital Partners Fund--I, C. V. Messrs. McCormack,
Moragne, Schnabel, Hall and Dixon are officers of Trident Capital, Inc.,
the general partner of Trident Capital, L.P., which is the general partner
of Trident Capital Partners Fund-I, L.P. and the investment general partner
of Trident Capital Partners Fund-I, C.V., and therefore may be considered
to share beneficial ownership of the shares held by each of Trident Capital
Partner Fund-I, L.P. and Trident Capital Partners Fund-I, C.V. Messrs.
McCormack, Moragne, Schnabel, Hall and Dixon disclaim beneficial ownership
of shares held by Trident Capital, Inc. and its affiliates, except to the
extent of their pecuniary interests, if any.
(4) The address of Weston Presidio Capital II, L.P. is One Federal Street, 21st
Floor, Boston, Massachusetts 02110.
(5) Includes 6,844,480 shares held by Weston Presidio Capital II, L.P. Messrs.
Cronin, Lazarus, McElwee, von Schroeter and Halperin are the general
partners of Weston Presidio Capital Management II, L.P. the general partner
of Weston Presidio Capital II, L.P. and therefore may be considered to
share the beneficial ownership of the shares held by Weston Presidio
Capital II, L.P. Messrs. Cronin, Lazarus, McElwee, von Schroeter and
Halperin disclaim beneficial ownership of these shares, except to the
extent of their pecuniary interests, if any.
(6) The address of each of Highland Capital Partners III, L.P. and Highland
Entrepreneurs' Fund III, L.P. is Two International Place, Boston,
Massachusetts 02110.
(7) Includes 6,570,698 shares held by Highland Capital Partners III Limited
Partnership and 273,780 shares held by Highland Entrepreneur's Fund III,
L.P. Messrs. Higgins, Maeder, Nova and Grousbeck are the general partners
of Highland Management Partners III, L.P., the general partner of Highland
Capital Partners III Limited Partnership, and the members of HEF III,
L.L.C., the general partner of Highland Entrepreneurs' Fund III, L.P. and
therefore may be considered to share the beneficial ownership of the shares
held by each of Highland Capital Partners III, Limited Partnership and
Highland Entrepreneurs' Fund III, L.P. Messrs. Higgins, Maeder, Nova and
Grousbeck disclaim beneficial ownership of these shares, except to the
extent of their pecuniary interests if any.
(8) Includes 954,147 shares held by National Geographic Holdings, Inc., a
wholly-owned indirect subsidiary of National Geographic Society. Mr. Allen
disclaims beneficial ownership of these shares, except to the extent of his
pecuniary interest, if any. The address of National Geographic Holdings,
Inc. is 1145 17th Street, N.W., Washington, DC 20036.
51
<PAGE>
DESCRIPTION OF CAPITAL STOCK
Following this offering, MapQuest will have the authority to issue an
aggregate of 105,000,000 shares of capital stock, consisting of 100,000,000
shares of common stock, par value $0.001 per share, and 5,000,000 shares of
preferred stock, par value $0.01 per share.
Common Stock
Voting Rights. Each outstanding share of common stock is entitled to one
vote on all matters submitted to a vote of MapQuest's stockholders, including
the election of directors. There is no cumulative voting in the election of
directors.
Dividends. Holders of common stock are entitled to receive dividends if and
when declared by MapQuest's board of directors out of assets legally available
for the payment of dividends, subject to the preferential rights of shares of
preferred stock, if any.
Liquidation. In the event of any dissolution, liquidation, or winding up of
the affairs of MapQuest, whether voluntary or involuntary, after payment of the
debts and other liabilities of MapQuest and after making provision for the
holders of preferred stock, if any, the remaining assets of MapQuest will be
distributed ratably among the holders of the common stock.
Preferred Stock
Following this offering, the board of directors will have the authority,
without further action by the stockholders, to issue up to 5,000,000 shares of
preferred stock in one or more series and to fix the designations, powers,
preferences, privileges, and relative participating, options, or special rights
and the qualifications, limitations, or restrictions of the preferred stock,
including dividend rights, conversion rights, voting rights, terms of
redemption and liquidation preferences, any or all of which may be greater than
the rights of the common stock. Preferred stock could thus be issued with terms
that may delay or prevent a change in control of MapQuest or make removal of
management more difficult. Additionally, the issuance of preferred stock may
have the effect of decreasing the market price of the common stock. Upon the
completion of this offering, there will be no shares of preferred stock
outstanding and MapQuest has no current plans to issue any preferred stock.
Registration Rights
After this offering, the holders of approximately 27,122,455 shares of
common stock and the holders of 954,147 warrants to purchase shares of common
stock will be entitled to have their shares registered under the Securities Act
of 1933. If MapQuest proposes to register any of its securities under the
Securities Act, either for its own account or for the account of other
securities holders exercising registration rights, these holders are entitled
to notice of the registration and are entitled to include their shares as part
of that registration. Holders of registration rights may also require MapQuest
to file a registration statement under the Securities Act at MapQuest's expense
with respect to their shares of common stock. Further, holders may require
MapQuest to file registration statements on Form S-3 at MapQuest's expense when
MapQuest is eligible to use the form. All registration rights are subject to
conditions and limitations, including the right of the underwriters of an
offering to limit the number of shares to be included in the registration.
Delaware Anti-Takeover Law and Charter and Bylaw Provisions
MapQuest is subject to the provisions of Section 203 of the Delaware
General Corporation Law, an anti-takeover law. In general, the statute
prohibits a publicly-held Delaware corporation, which MapQuest will be after
the offering, from engaging in a business combination with an "interested
stockholder" for a period of three years after the date of the transaction in
which the person became an interested stockholder, unless the business
combination is approved in a prescribed manner. A "business combination"
includes a merger, asset
52
<PAGE>
sale or other transaction resulting in a financial benefit to the stockholder.
For purposes of Section 203, an "interested stockholder" is defined to include
any person that is:
. the owner of 15% or more of the outstanding voting stock of the
corporation;
. an affiliate or associate of the corporation and was the owner of 15% or
more of the voting stock outstanding of the corporation, at any time
within three years immediately prior to the relevant date; and
. an affiliate or associate of the persons described in the foregoing
bullet points.
Stockholders may, by adopting an amendment to the corporation's certificate of
incorporation or bylaws, elect for the corporation not to be governed by
Section 203, effective 12 months after adoption.
Annual meetings of stockholders will be held to elect the board of
directors of MapQuest and transact such other business as may be properly
brought before the meeting. Special meetings of stockholders may be called by
the Chairman or the Chief Executive Officer or by a majority of the board of
directors.
MapQuest's certificate of incorporation may be amended with the approval of
a majority of the board and the holders of a majority of MapQuest's outstanding
voting securities.
The number of directors is determined by the board of directors. The size
of the board of directors is currently six members and is divided into three
classes of directors serving staggered three-year terms. The directors will be
elected at the annual meeting of the stockholders, except for filling
vacancies. Directors may be removed with the approval of the holders of a
majority of MapQuest's voting power present and entitled to vote at a meeting
of stockholders. Vacancies and newly-created directorships resulting from any
increase in the number of directors may be filled by (1) a majority of the
directors then in office, (2) a sole remaining director, or (3) the holders of
a majority of the voting power present and entitled to vote at a meeting of
stockholders.
The presence, in person or by proxy, of the holders of a majority of the
votes entitled to be cast by the stockholders entitled to vote generally shall
constitute a quorum for stockholder action at any meeting.
Limitation of Liability and Indemnification Matters
MapQuest's certificate of incorporation contains provisions permitted under
the Delaware General Corporation Law relating to the liability of directors.
These provisions eliminate a director's personal liability for monetary damages
resulting from a breach of fiduciary duty, except for liability for:
. any failure to act in good faith in the best interests of MapQuest or
its stockholders;
. acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
. unlawful payments of dividends or unlawful stock repurchases or
redemptions; or
. any transaction from which the director derives an improper personal
benefit.
These provisions do not limit or eliminate the rights of MapQuest or any
stockholder to seek non- monetary relief, such as an injunction or rescission,
in the event of a breach of a director's fiduciary duty. These provisions will
not alter a director's liability under federal securities laws. MapQuest's
bylaws also contain provisions indemnifying the directors and officers of
MapQuest to the fullest extent permitted by the Delaware General Corporation
Law. MapQuest believes that these provisions are necessary to attract and
retain qualified individuals to serve as directors and officers.
Listing
Application has been made to have the common stock approved for quotation
on the Nasdaq National Market under the trading symbol "MQST."
Transfer Agent and Registrar
The transfer agent and registrar for the common stock will be American
Stock Transfer & Trust Company, New York, New York.
53
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE
Prior to this offering, there has not been any public market for the common
stock, and MapQuest cannot predict the effect, if any, that market sales of
shares of common stock or the availability of shares of common stock for sale
will have on the market price of the common stock prevailing from time to time.
Nevertheless, sales of substantial amounts of common stock in the public
market, or the perception that such sales could occur, could adversely affect
the market price of the common stock and could impair MapQuest's future ability
to raise capital through the sale of its equity securities.
Upon completion of this offering, MapQuest will have an aggregate of
32,166,699 shares of common stock outstanding, assuming no exercise of the
underwriters' over-allotment option and no exercise of outstanding options or
warrants. Of the outstanding shares, the 4,600,000 shares sold in this offering
will be freely tradeable, except that any shares held by "affiliates" of
MapQuest, as that term is defined in Rule 144 promulgated under the Securities
Act of 1933, may only be sold in compliance with the limitations described
below. The remaining 27,566,699 shares of common stock will be deemed
"restricted securities" as defined under Rule 144. Restricted securities may be
sold in the public market only if registered or if they qualify for an
exemption from registration under Rules 144, 144(k) or 701 promulgated under
the Securities Act, which rules are summarized below. Subject to the lock-up
agreements described below and the provisions of Rules 144, 144(k) and 701,
additional shares will be available for sale in the public market as follows:
<TABLE>
<CAPTION>
Number of
Shares Date
---------- ----
<S> <C>
902,097 After the date of this prospectus
129,924 After 90 days from the date of this prospectus
26,534,678 After 180 days from the date of this prospectus
(subject, in some cases, to volume limitations)
</TABLE>
In general, under Rule 144, as currently in effect, a person, including an
affiliate, who has beneficially owned shares for at least one year is entitled
to sell, within any three-month period commencing 90 days after the date of
this prospectus, a number of shares that does not exceed the greater of (1) 1%
of the then outstanding shares of common stock (approximately 321,667 shares
immediately after this offering) or (2) the average weekly trading volume in
the common stock during the four calendar weeks preceding the date on which
notice of such sale is filed, subject to certain restrictions. In addition, a
person who is not deemed to have been an affiliate of MapQuest at any time
during the 90 days preceding a sale and who has beneficially owned the shares
proposed to be sold for at least two years would be entitled to sell such
shares under Rule 144(k) without regard to the requirements described above. To
the extent that shares were acquired from an affiliate of MapQuest, that
person's holding period for the purpose of selling under Rule 144 commences on
the date of transfer from the affiliate. Notwithstanding the foregoing, to the
extent the shares were acquired through the cashless exercise of a stock option
or a warrant, that person's holding period for effecting a sale under Rule 144
commences on the date of the option or warrant grant. In general, under Rule
701 of the Securities Act as currently in effect, any employee, consultant or
advisor of MapQuest who purchased shares from MapQuest in connection with a
compensatory stock or option plan or other written agreement is eligible to
resell such shares after the effective date of this offering in reliance on
Rule 144, but without compliance with certain restrictions, including the
holding period, contained in Rule 144.
As of the date of this prospectus, options to purchase a total of 5,907,453
shares of common stock are outstanding, of which 3,443,438 are currently
exercisable (without regard to the 180-day lock up period). Not sooner than 180
days after the closing of this offering, MapQuest intends to file a
registration statement to register for resale all shares of common stock issued
or issuable under its 1995 stock option plan, the 1999 employee stock purchase
plan and not otherwise freely transferable. Accordingly, shares covered by that
registration statement will be eligible for sale in the public markets, unless
those options are subject to vesting restrictions. Upon the closing of this
offering, 2,314,611 shares of common stock will be issuable upon the exercise
of outstanding warrants.
54
<PAGE>
MapQuest's directors and officers and certain stockholders who hold
31,187,837 shares and options in the aggregate, and the holders of warrants to
purchase 2,314,611 shares of common stock, have agreed that they will not sell,
directly or indirectly, any shares of common stock (other than shares of common
stock purchased as part of the directed share program in connection with this
offering) without the prior written consent of BancBoston Robertson Stephens,
Inc. for a period of 180 days from the date of this prospectus. See
"Underwriting."
MapQuest has agreed not to sell or otherwise dispose of any shares of
common stock during the 180-day period following the date of the prospectus,
except MapQuest may issue, and grant options to purchase, shares of common
stock under its stock option plan.
Following this offering, under certain circumstances and subject to certain
conditions, holders of 27,122,455 shares of MapQuest's outstanding common stock
and the holders of 954,147 warrants to purchase shares of common stock will
have certain demand registration rights with respect to their shares of common
stock (subject, in certain cases, to the 180-day lock-up arrangement described
above) to require MapQuest to register their shares of common stock under the
Securities Act, and they will have certain rights to participate in any future
registration of securities by MapQuest. MapQuest is not required to effect more
than an aggregate of four demand registrations on behalf of such holders. See
"Description of Capital Stock--Registration Rights."
55
<PAGE>
UNDERWRITING
The underwriters named below, acting through their representatives,
BancBoston Robertson Stephens Inc., Thomas Weisel Partners LLC, U.S. Bancorp
Piper Jaffray Inc. and Volpe Brown Whelan & Company, LLC have severally agreed
with MapQuest, subject to the terms and conditions of the underwriting
agreement, to purchase from MapQuest the number of shares of common stock set
forth opposite their names below. The underwriters are committed to purchase
and pay for all of the shares if any are purchased.
<TABLE>
<CAPTION>
Number of
Underwriter Shares
----------- -----------
<S> <C>
BancBoston Robertson Stephens Inc. ..............................
Thomas Weisel Partners LLC.......................................
U.S. Bancorp Piper Jaffray Inc. .................................
Volpe Brown Whelan & Company, LLC................................
-----------
Total.......................................................... 4,600,000
===========
</TABLE>
The representatives have advised MapQuest that the underwriters propose to
offer the shares of common stock to the public at the initial public offering
price set forth on the cover page of this prospectus and to dealers at such
price less a concession of not in excess of $ per share, of which
$ may be reallowed to other dealers. After this offering, the public
offering price, concession, and reallowance to dealers may be reduced by the
representatives. No reduction shall change the amount of proceeds to be
received by MapQuest as set forth on the cover page of this prospectus. The
common stock is offered by the underwriters as stated in this prospectus,
subject to receipt and acceptance by them and subject to their right to reject
any order in whole or in part.
The underwriters do not intend to confirm sales to any accounts over which
they exercise discretionary authority.
Over-allotment Option
MapQuest has granted to the underwriters an option, exercisable during the
30-day period after the date of this prospectus, to purchase up to 690,000
additional shares of common stock at the same price per share as MapQuest will
receive for the 4,600,000 shares that the underwriters have agreed to purchase.
To the extent that the underwriters exercise this option, each of the
underwriters will have a firm commitment to purchase approximately the same
percentage of the additional shares that the number of shares of common stock
to be purchased by it shown in the above table represents as a percentage of
the 4,600,000 shares offered in this prospectus. If purchased, these additional
shares will be sold by the underwriters on the same terms as those on which the
4,600,000 shares are being sold. MapQuest will be obligated, pursuant to the
option, to sell shares to the extent the option is exercised. The underwriters
may exercise this option only to cover over-allotments made in connection with
the sale of the shares of common stock offered by this prospectus. If the
option is exercised in full, the total public offering price, underwriting
discounts and commissions and net proceeds to MapQuest will be approximately
$ million, $ million and $ million, respectively.
Directed Share Program
At the request of MapQuest, the underwriters have reserved up to 460,000
shares of common stock to be issued by MapQuest and offered by this prospectus
for sale, at the initial public offering price, to directors, officers,
employees, business associates and related persons of MapQuest. The number of
shares of common stock available for sale to the general public will be reduced
to the extent these individuals purchase such reserved shares. Any reserved
shares which are not so purchased will be offered by the underwriters to the
general public on the same basis as the other shares offered by this
prospectus.
56
<PAGE>
Thomas Weisel Partners LLC
Thomas Weisel Partners LLC, one of the representatives of the underwriters,
was organized and registered as a broker-dealer in December 1998. Since
December 1998, Thomas Weisel Partners has co-managed six public offerings of
equity securities and has acted as an underwriter in an additional seven public
offerings of equity securities. Thomas Weisel Partners does not have any
material relationship with MapQuest or any of MapQuest's officers, directors or
controlling persons, except with respect to its contractual relationship with
MapQuest pursuant to the underwriting agreement entered into in connection with
this offering.
Indemnity
The Underwriting Agreement contains covenants of indemnity among the
underwriters and MapQuest against civil liabilities, including liabilities
under the Securities Act and liabilities arising from breaches of
representations and warranties contained in the underwriting agreement.
Lock-Up Agreements
Each officer and director of MapQuest and substantially all other holders
of shares of common stock, including those issuable upon the exercise of
outstanding options or warrants, have agreed, during the period ending 180 days
after the date of this prospectus ("the lock-up period"), subject to limited
exceptions, not to engage in particular activities without the prior written
consent of BancBoston Robertson Stephens Inc. Specifically they have agreed not
to offer to sell, contract to sell, or otherwise sell, dispose of, loan, pledge
or grant any rights with respect to any shares of common stock, any options or
warrants to purchase any shares of common stock, or any securities convertible
into or exchangeable for shares of common stock owned as of the date of this
prospectus or acquired after the date of this prospectus directly by such
holders or with respect to which they have the power of disposition. However,
BancBoston Robertson Stephens Inc. may, in its sole discretion and at any time
without notice, release all or any portion of securities subject to the lock-up
agreement. There are no existing agreements between the representatives of the
underwriters and any of MapQuest's stockholders providing consent to the sale
of shares prior to the expiration of the lock-up period.
Future Sales. In addition, MapQuest has agreed that during the lock-up
period MapQuest will not, without the prior written consent of BancBoston
Robertson Stephens Inc., subject to limited exceptions, (1) consent to the
disposition of any shares held by stockholders or option holders subject to
lock-up agreements prior to the expiration of the lock-up period, (2) issue,
sell, contract to sell, or otherwise dispose of, any shares of common stock,
any options to purchase any shares of common stock or any securities
convertible into, exercisable for or exchangeable for shares of common stock
other than MapQuest's sale of shares in this offering, the issuance of common
stock upon the exercise of outstanding options, and the issuance of options
under existing stock option and incentive plans provided the options do not
vest prior to the expiration of the lock-up period or (3) file a Form S-8
registration statement. See "Shares Eligible for Future Sale."
No Prior Public Market. Prior to this offering, there has been no public
market for MapQuest's common stock. Consequently, the public offering price for
the common stock offered by this prospectus will be determined through
negotiations among MapQuest and the representatives of the underwriters. Among
the factors to be considered in such negotiations are prevailing market
conditions, financial information of MapQuest, market valuations of other
companies that MapQuest and the representatives believe to be comparable to
MapQuest, estimates of the business potential of MapQuest, the present state of
MapQuest's development and other factors deemed relevant.
Stabilization. The representatives of the underwriters have advised
MapQuest that, pursuant to Regulation M under the Securities Act of 1933,
particular persons participating in this offering may engage in transactions,
including stabilizing bids, syndicate covering transactions or the imposition
of penalty bids, that may have the effect of stabilizing or maintaining the
market price of the common stock at a level above that which might otherwise
prevail in the open market. A "stabilizing bid" is a bid for or the purchase of
common
57
<PAGE>
stock on behalf of the underwriters for the purpose of fixing or maintaining
the price of the common stock. A "syndicate covering transaction" is the bid
for or the purchase of common stock on behalf of the underwriters to reduce a
short position incurred by the underwriters in connection with this offering. A
"penalty bid" is an arrangement permitting the representatives to reclaim the
selling concession otherwise accruing to an underwriter or syndicate member in
connection with this offering if the common stock originally sold by such
underwriter or syndicate member is purchased by the representatives in a
syndicate covering transaction and has not been effectively placed by such
underwriter or syndicate member. The representatives have advised MapQuest that
these transactions may be effected on the Nasdaq National Market or otherwise
and, if commenced, may be discontinued at any time.
LEGAL MATTERS
The validity of the shares of common stock offered hereby will be passed
upon for MapQuest by Mayer, Brown & Platt, New York, New York, and for the
underwriters by Brobeck, Phleger & Harrison LLP, New York, New York. Certain
other legal matters will be passed up on behalf of the Company by Venable,
Baetjer & Howard, LLP.
EXPERTS
The financial statements of MapQuest.com, Inc. at December 31, 1997 and
1998, and for each of the three years in the period ended December 31, 1998,
appearing in this prospectus and Registration Statement of which it forms a
part, and the related financial statement schedule included elsewhere in this
Registration Statement have been audited by Ernst & Young LLP, independent
auditors, as set forth in their reports thereon appearing elsewhere herein, and
are included in reliance upon such reports given upon the authority of such
firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
MapQuest has filed with the Securities and Exchange Commission a
registration statement on Form S-1 under the Securities Act of 1933 with
respect to the shares of common stock offered by this prospectus. This
prospectus does not contain all of the information set forth in the
registration statement and its exhibits and schedules. Particular items are
omitted in accordance with the rules and regulations of the Securities and
Exchange Commission. For further information with respect to MapQuest and the
common stock offered by this prospectus, reference is made to the registration
statement and its exhibits and schedules. A copy of the registration statement,
and the exhibits and schedules to the registration statement, may be inspected
without charge at the public reference facilities maintained by the Securities
and Exchange Commission in Room 1024, 450 Fifth Street., N.W., Washington, D.C.
20549, and at the Securities and Exchange Commission's regional offices located
at the Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661 and Seven World Trade Center, 13th Floor, New York, New York 10048, and
copies of all or any part of the registration statement may be obtained from
such offices upon the payment of the fees prescribed by the Securities and
Exchange Commission. The Securities and Exchange Commission maintains a website
that contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Securities and Exchange
Commission. The address of the site is http://www.sec.gov.
This prospectus includes statistical data regarding Internet usage and the
advertising and marketing industry that were obtained from industry
publications, including reports generated by Forrester Research Inc.,
International Data Corporation and Media Metrix, Inc. These industry
publications generally indicate that they have obtained information from
sources believed to be reliable, but do not guarantee the accuracy and
completeness of their information. While MapQuest believes these industry
publications to be reliable, MapQuest has not independently verified their
data. MapQuest also has not sought the consent of any of these organizations to
refer to their reports in this prospectus.
58
<PAGE>
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<S> <C>
Report of Independent Auditors............................................. F-2
Balance sheets at December 31, 1997 and 1998............................... F-3
Statements of Operations for the Years ended December 31, 1996, 1997 and
1998..................................................................... F-4
Statements of Changes in Redeemable Preferred Stock, Common Stock, and
Other Stockholders' Equity (Deficit) for the Years ended December 31,
1996, 1997 and 1998...................................................... F-5
Statements of Cash Flows for the Years ended December 31, 1996, 1997 and
1998..................................................................... F-6
Notes to Financial Statements.............................................. F-7
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Board of Directors
MapQuest.com, Inc.
We have audited the accompanying balance sheets of MapQuest.com, Inc.
(formerly GeoSystems Global Corporation) as of December 31, 1997 and 1998, and
the related statements of operations, changes in redeemable preferred stock,
common stock, and other stockholders' equity (deficit), and cash flows for each
of the three years in the period ended December 31, 1998. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of MapQuest.com, Inc. at
December 31, 1997 and 1998, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1998, in
conformity with generally accepted accounting principles.
Ernst & Young LLP
Harrisburg, Pennsylvania
February 18, 1999, except for Note 15, as to which the date is April , 1999
---------------------
The foregoing report is in the form that will be signed upon the completion
of the restatement of the capital accounts described in Note 15 to the
financial statements.
Ernst & Young LLP
Harrisburg, Pennsylvania
April 9, 1999
F-2
<PAGE>
MAPQUEST.COM, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31 Pro Forma
-------------------------- December 31
1997 1998 1998
------------ ------------ ------------
(Unaudited)
(Note 15)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.......... $ 2,482,090 $ 564,087 $ 564,087
Accounts receivable, net of
allowance for doubtful accounts
(1997--$407,136; 1998--
$469,726)........................ 5,468,654 6,646,882 6,646,882
Accounts receivable--affiliates.... 57,500 127,989 127,989
Inventories........................ 1,686,117 1,364,608 1,364,608
Contract work in progress.......... 385,778 147,317 147,317
Prepaid expenses and other current
assets........................... 1,079,347 481,921 481,921
------------ ------------ ------------
Total current assets........... 11,159,486 9,332,804 9,332,804
Property and equipment, net of
accumulated depreciation (1997--
$2,420,561; 1998--$3,433,368)...... 1,830,324 1,844,324 1,844,324
Goodwill, net........................ 208,763 178,212 178,212
Other assets......................... 22,650 94,901 94,901
------------ ------------ ------------
Total assets................... $ 13,221,223 $ 11,450,241 $ 11,450,241
============ ============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable................... $ 1,332,656 $ 1,715,133 $ 1,715,133
Current portion of note payable.... 51,716 48,108 48,108
Accrued personnel costs............ 450,287 561,714 561,714
Advance billings on contracts...... 346,383 498,108 498,108
Deferred revenue................... 505,238 1,207,867 1,207,867
Other accrued liabilities.......... 1,012,809 1,000,940 1,000,940
------------ ------------ ------------
Total current liabilities...... 3,699,089 5,031,870 5,031,870
------------ ------------ ------------
Note payable, less current portion... 48,108 -- --
Payment to redeem Preferred Stock--
Series B........................... -- -- 8,332,036
Convertible Redeemable Preferred
Stock--Series A, voting, $1.00 per
share redemption value, aggregate
liquidation preference of
$6,550,000:
Issued and outstanding shares--
actual, 6,550,000 in 1997 and
1998; pro forma, none............ 6,550,000 6,550,000 --
Cumulative Redeemable Preferred
Stock--Series B, nonvoting, $6.15
per share redemption value,
aggregate liquidation preference of
$7,815,737 in 1997 and $8,332,036
in 1998:
Issued and outstanding shares--
actual, 1,270,851 in 1997 and
1,354,802 in 1998; pro forma,
none ............................ 7,815,737 8,332,036 --
Convertible Redeemable Preferred
Stock--Series C, voting, $3.51 per
share redemption value, aggregate
liquidation preference of
$12,268,292:
Issued and outstanding shares--
actual, 3,495,354 in 1997 and
1998; pro forma, none............ 11,636,252 11,595,176 --
Notes receivable arising from
issuance of preferred stock........ (290,835) (290,835) --
Stockholders' deficit:
Common Stock--$.001 par value:
Authorized shares--20,000,000
Issued and outstanding shares--
actual, 216,419 in 1997 and
336,028 in 1998; pro forma,
27,458,483 216 336 27,458
Notes receivable for common
stock............................ -- -- (290,835)
Additional paid-in capital......... -- 140,170 18,263,267
Retained deficit................... (16,237,344) (19,908,512) (19,913,555)
------------ ------------ ------------
Total stockholders' deficit.... (16,237,128) (19,768,006) (1,913,665)
------------ ------------ ------------
Total liabilities and
stockholders' deficit........ $ 13,221,223 $ 11,450,241 $ 11,450,241
============ ============ ============
</TABLE>
See accompanying notes.
F-3
<PAGE>
MAPQUEST.COM, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year ended December 31
--------------------------------------
1996 1997 1998
----------- ------------ -----------
<S> <C> <C> <C>
Revenues
Business............................ $ 7,019,461 $ 4,762,627 $ 6,536,153
Consumer............................ 140,200 1,275,900 1,375,900
----------- ------------ -----------
Total business and consumer
revenues.......................... 7,159,661 6,038,527 7,912,053
Digital mapping..................... 12,417,232 15,377,141 16,805,149
----------- ------------ -----------
Total revenues................... 19,576,893 21,415,668 24,717,202
Cost of Revenues
Business and consumer............... 4,325,166 4,535,153 4,808,764
Digital mapping..................... 7,994,347 10,767,256 12,837,036
----------- ------------ -----------
Total cost of revenues........... 12,319,513 15,302,409 17,645,800
----------- ------------ -----------
Gross profit.......................... 7,257,380 6,113,259 7,071,402
Operating expenses
Sales and marketing................. 4,454,791 7,256,519 5,243,377
Product development................. 2,619,443 5,047,744 2,954,510
General and administrative.......... 1,901,857 1,811,391 2,326,191
----------- ------------ -----------
Total operating expenses......... 8,976,091 14,115,654 10,524,078
Operating loss........................ (1,718,711) (8,002,395) (3,452,676)
Interest income and expense, net...... 198,632 135,888 53,916
Other income.......................... 243,900 267,384 243,891
----------- ------------ -----------
Loss before provision for income
taxes............................... (1,276,179) (7,599,123) (3,154,869)
Provision for income taxes............ -- -- --
----------- ------------ -----------
Net loss......................... (1,276,179) (7,599,123) (3,154,869)
Less preferred stock dividends and
accretion........................... (525,320) (5,833,651) (667,223)
----------- ------------ -----------
Net loss applicable to common
stockholders........................ $(1,801,499) $(13,432,774) $(3,822,092)
=========== ============ ===========
Basic and diluted loss per share...... $ (8.84) $ (64.43) $ (12.09)
===========
Shares used to compute basic and
diluted loss per share.............. 203,779 208,499 316,202
=========== ============ ===========
Pro forma basic and diluted loss per
share............................... $ (0.13)
===========
Shares used to compute pro forma basic
and diluted loss per share.......... 27,438,658
</TABLE>
See accompanying notes.
F-4
<PAGE>
MAPQUEST.COM, INC.
STATEMENTS OF CHANGES IN REDEEMABLE PREFERRED STOCK, COMMON STOCK,
AND OTHER STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
Notes
Convertible Cumulative Convertible Receivable
Redeemable Redeemable Redeemable Arising from Convertible
Preferred Preferred Preferred Issuance of Preferred Additional
Stock-- Stock-- Stock-- Preferred Stock-- Common Paid Retained
Series A Series B Series C Stock Series A Stock in Capital Deficit
----------- ----------- ------------ ------------ ----------- ------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31,
1995.................. $ -- $ 6,877,136 $ -- $ (87,500) $ 65,150 $ 199 $ 1,238,435 $ (1,003,071)
Net loss............... -- -- -- -- -- -- -- (1,276,179)
Payment on notes
receivable........... -- -- -- 31,168 -- -- -- --
Dividends.............. -- 454,295 -- -- -- -- -- (525,320)
Issuance of 35,000
shares convertible
preferred stock--
Series A............. -- -- -- (31,500) 350 -- 34,650 --
Exercise of 7,074
options.............. -- -- -- -- -- 7 255 --
----------- ----------- ------------ ---------- -------- ----- ----------- -------------
Balance at December 31,
1996.................. -- 7,331,431 -- (87,832) 65,500 206 1,273,340 (2,804,570)
Net loss............... -- -- -- -- -- -- -- (7,599,123)
Payment on notes
receivable........... -- -- -- 21,132 -- -- -- --
Dividends.............. -- 484,306 -- -- -- -- -- (560,025)
Exercise of 10,314
options.............. -- -- -- -- -- 10 775 --
Addition of redemption
feature to Series A
preferred stock...... 6,550,000 -- -- -- (65,500) -- (1,274,115) (5,210,383)
Issuance of 3,495,354
shares convertible
preferred stock--
Series C, net........ -- -- 11,573,009 (224,135) -- -- -- --
Accretion of redeemable
preferred stock to
redemption value..... -- -- 63,243 -- -- -- -- (63,243)
----------- ----------- ------------ ---------- -------- ----- ----------- -------------
Balance at December 31,
1997.................. $ 6,550,000 $ 7,815,737 $ 11,636,252 $ (290,835) $ -- $ 216 $ -- $ (16,237,344)
Net loss............... -- -- -- -- -- -- -- (3,154,869)
Dividends.............. -- 516,299 -- -- -- -- -- (516,299)
Exercise of 119,610
options.............. -- -- -- -- -- 120 7,444 --
Issuance of 522,234
warrants............. -- -- (192,000) -- -- -- 192,000 --
Issuance of 41,266
warrants for
services............. -- -- -- -- -- -- 53,650 --
Accretion of redeemable
preferred stock to
redemption value..... -- -- 150,924 -- -- -- (150,924) --
Compensation related to
stock options........ -- -- -- -- -- -- 38,000 --
----------- ----------- ------------ ---------- -------- ----- ----------- -------------
Balance at December 31,
1998.................. $ 6,550,000 $ 8,332,036 $ 11,595,176 $ (290,835) $ -- $ 336 $ 140,170 $ (19,908,512)
=========== =========== ============ ========== ======== ===== =========== =============
</TABLE>
See accompanying notes.
F-5
<PAGE>
MAPQUEST.COM, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year ended December 31
-------------------------------------
1996 1997 1998
----------- ----------- -----------
<S> <C> <C> <C>
Operating activities
Net loss................................ $(1,276,179) $(7,599,123) $(3,154,869)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation........................... 527,990 816,369 1,074,875
Amortization........................... 30,550 30,550 30,551
Provision for doubtful accounts........ 232,500 262,388 271,598
Issuance of warrants for services...... -- -- 53,650
Compensation expense related to
options.............................. -- -- 38,000
Equity in earnings of joint venture.... (282,461) (256,068) (291,558)
Dividends received from joint venture.. 285,273 288,556 285,976
Loss (gain) on disposal of property and
equipment............................ -- 59,758 (3,089)
Changes in operating assets and
liabilities, net of effects from
acquisition of a business:
Accounts receivable................... (1,505,806) (1,115,351) (1,449,823)
Accounts receivable--affiliates....... 10,154 72,400 (70,489)
Inventories........................... (20,778) (1,182,649) 321,509
Contract work in progress............. (151,563) (60,575) 238,461
Prepaid expenses...................... (231,318) (724,940) 597,426
Other assets.......................... (16,694) 14,659 (94,638)
Accounts payable...................... 448,974 448,374 382,447
Advance billings on contracts......... 471,473 (688,387) 151,726
Deferred revenue...................... -- 396,807 702,629
Accrued personnel costs and other
liabilities......................... 316,892 (257,500) 99,557
----------- ----------- -----------
Net cash used in operating activities... (1,160,993) (9,494,732) (816,061)
Investing activities
Property and equipment purchases........ (1,190,210) (1,354,690) (1,062,126)
Proceeds from disposal of property and
equipment............................. -- 32,264 4,340
Purchase of Interarts' assets........... (328,600) -- --
----------- ----------- -----------
Net cash used in investing activities... (1,518,810) (1,322,426) (1,057,786)
Financing activities
Proceeds from note payable.............. -- 131,468 --
Principal payments on debt.............. -- (32,499) (51,716)
Proceeds from issuance of Series A
convertible preferred stock........... 3,500 -- --
Net proceeds from issuance of Series C
convertible preferred stock........... -- 11,348,874 --
Exercise of common stock options........ 262 785 7,560
Principal payments received on notes
receivable arising from issuance of
preferred stock....................... 31,168 21,132 --
Cash dividends paid..................... (69,889) (74,506) --
----------- ----------- -----------
Net cash provided by (used in) financing
activities............................ (34,959) 11,395,254 (44,156)
----------- ----------- -----------
Net increase (decrease) in cash and cash
equivalents........................... (2,714,762) 578,096 (1,918,003)
Cash and cash equivalents at the
beginning of the year................. 4,618,756 1,903,994 2,482,090
----------- ----------- -----------
Cash and cash equivalents at the end of
the year.............................. $ 1,903,994 $ 2,482,090 $ 564,087
=========== =========== ===========
Supplemental cash flow information
Stock dividends paid on Preferred Stock
Series B.............................. $ 454,294 $ 484,306 $ 516,299
=========== =========== ===========
Dividends accrued on Preferred Stock
Series B.............................. $ 18,329 $ 19,540 $ --
=========== =========== ===========
Notes receivable received for stock..... $ 31,500 $ 224,135 $ --
=========== =========== ===========
</TABLE>
See accompanying notes.
F-6
<PAGE>
MAPQUEST.COM, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
1. Business and Accounting Policies
Business
In February 1999, GeoSystems Global Corporation changed its name to
MapQuest.com, Inc. MapQuest.com, Inc. ("MapQuest" or the "Company") is an
online provider of mapping and destination information through its Web site,
mapquest.com. MapQuest's proprietary integration and editing of geographic
databases enable it to provide comprehensive mapping solutions to businesses
and provide customized maps, destination information and driving directions to
consumers. Consumers can also purchase maps and cartography information from
MapQuest's MapStore located on mapquest.com.
MapQuest is also a United States provider of traditional digital mapping
products and services to the educational, reference, directory, travel and
governmental markets. In addition, companies that incorporate call centers, CD-
ROMs or stand-alone driving direction kiosks into their information delivery
strategy require non-Internet customized mapping solutions. MapQuest has
developed its map-enabling software to promote the rapid development of mapping
applications in these environments.
Revenue Recognition
Contracts with businesses for Internet products and services are generally
on an annual basis and consist of a one-time setup fee and annual service or
license fee. The one-time setup fee is based on costs incurred to initially
integrate the Web site connection and is recognized upon installation of the
connection. The remaining service or license fee is recognized ratably over the
contract period. Revenues recognized under this method are included in the
statements of operations as business revenues.
Royalty revenues are recognized when earned based on the revenues generated
by the sale of a licensed product or based on the minimum royalty provisions in
the related contract. Revenue from the sale of licenses to its customers for
the use of MapQuest's geographic systems or products are generally recognized
upon delivery of the licensed systems or products if no significant obligations
exist. If a maintenance or upgrade obligation exists, revenues are recognized
ratably over the obligation period. MapQuest's license agreements have terms
generally ranging from one to three years. Substantially all revenues
recognized under this method are included in the statements of operations as
business revenues.
Revenues from long-term fixed price contracts for the development of
customized geographic and cartographic data are recognized on the percentage of
completion method, measured by the percentage of labor hours incurred to date
to estimated total labor hours for each contract. Revenues recognized in excess
of amounts billed are classified as contract work in progress. Amounts billed
to clients for contracts in excess of revenues recognized to date are
classified as advance billings on contracts. Revenues recognized under this
method are included in the statements of operations as digital mapping
revenues.
Advertising revenue is recognized ratably over the period in which the
advertisements are displayed, provided that no significant obligations remain
and collection of the resulting receivable is probable. The average duration of
MapQuest's advertising arrangements is one to two months. MapQuest may
guarantee its advertisers a pre-set level of impressions during the contract
period. To the extent minimum guaranteed impression levels are not met ratably
over the contract period, MapQuest defers recognition of the corresponding pro-
rata portion of the revenues relating to such unfulfilled obligations until the
guaranteed impression levels are achieved. Revenues recognized under this
method are included in the statements of operations as consumer revenues.
Barter revenues are recognized in connection with agreements in which
MapQuest receives advertising or other goods and services in exchange for
content or advertising on mapquest.com. Barter transactions are
F-7
<PAGE>
MAPQUEST.COM, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
recorded at the lower of estimated fair value of the goods or services received
or the estimated fair value of the content or advertisements given. Barter
transactions accounted for approximately 0%, 1% and 2% of revenues during 1996,
1997 and 1998, respectively. Revenues recognized under this method are included
in the statements of operations as consumer revenues.
Revenues from all other services provided and products sold or licensed are
recognized when the services are rendered or delivery of the product is made
and no significant MapQuest obligations remain outstanding. Revenues recognized
under this method are included in the statements of operations as digital
mapping and business revenues.
Product Development
Product development expenses in the accompanying statements of operations
include the costs to develop new products and services and to modify existing
products and services, including software and data. These costs consist
primarily of salaries for product development personnel and related expenses,
contract labor expense, and consulting fees. Statement of Financial Accounting
Standards ("SFAS") No. 86, "Accounting for the Costs of Computer Software to be
Sold, Leased or Otherwise Marketed," requires capitalization of certain
software development costs subsequent to the establishment of technological
feasibility. Based upon MapQuest's product development process, technological
feasibility is established upon completion of a working model. Costs incurred
by MapQuest between completion of the working model and the point at which the
product is ready for general release have been insignificant. As a result,
MapQuest has expensed software development costs.
Statements of Cash Flows
For purposes of the statements of cash flows, MapQuest considers all cash
and highly liquid investments with a maturity of three months or less when
purchased to be cash equivalents.
Fair Values of Financial Instruments
The carrying amounts of cash and cash equivalents, notes receivable and
notes payable approximate fair value because of the short-term maturity of
these instruments.
Inventories
Inventories are carried at the lower of cost or market using the first-in,
first-out (FIFO) method.
Property and Equipment
Property and equipment consisting primarily of computer hardware are stated
at historical cost. Depreciation is computed principally using the straight-
line method over the estimated useful life of assets ranging from 3 to 5 years.
Goodwill
Goodwill, principally from the acquisition of Maryland Cartographics, Inc.
in July 1994, represents the excess of cost over fair value of net assets
acquired and is being amortized over 10 years using the straight-line method.
As of December 31, 1997 and 1998, accumulated amortization was $96,744 and
$127,295, respectively.
Accounting for Stock-Based Compensation
In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation". SFAS No. 123 prescribes accounting and reporting standards for
all stock-based compensation plans, including
F-8
<PAGE>
MAPQUEST.COM, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
employee stock options, restricted stock, employee stock purchase plans and
stock appreciation rights. SFAS No. 123 requires compensation expense to be
recorded (i) using the new fair value method or (ii) using existing accounting
rules prescribed by Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees", ("APB 25") and related interpretations with pro
forma disclosure of what net income and earnings per share would have been had
the Company adopted the fair value method. The Company accounts for its stock-
based compensation plans in accordance with the provisions of APB 25.
Advertising Costs
Advertising costs are expensed as incurred. Advertising costs for 1996,
1997 and 1998 amounted to $332,300, $779,000 and $741,600, respectively, and
include barter advertising costs for 1997 and 1998 of $148,000 and $538,000,
respectively.
Investment in Joint Venture
The Company's 50 percent-owned joint venture, Donnelly Spatial Data
Partnership, is accounted for by the equity method. The joint venture is
engaged in providing, among other things, highway trip routing products and
services.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
2. Inventories
Inventories are comprised of the following:
<TABLE>
<CAPTION>
December 31
---------------------
1997 1998
---------- ----------
<S> <C> <C>
Materials.............................................. $ 240,000 $ 96,006
Work-in-process........................................ 207,838 336,123
Finished goods......................................... 1,238,279 932,479
---------- ----------
$1,686,117 $1,364,608
========== ==========
</TABLE>
3. Asset Purchase--Interarts
Effective April 1, 1996, MapQuest acquired certain assets, primarily
inventory, of Interarts, Ltd. (Interarts) for $328,600. Interarts is an upscale
niche publisher of reference maps, atlases and products that use map images.
This transaction was accounted for in accordance with the purchase method of
accounting for business combinations. No goodwill has been recognized by
MapQuest in connection with this transaction. The operating results of
Interarts are included in MapQuest's results of operations from the effective
date of the acquisition. Pro forma information about operating results assuming
Interarts was acquired at the beginning of 1996 is not presented because it
would not differ materially from reported results.
4. Debt Arrangements
MapQuest has a $5,000,000 secured line of credit payable on demand with a
financial institution. Borrowings under the line of credit are limited to 80%
of MapQuest's qualified accounts receivable that are within 90 days of invoice.
Under the agreement, MapQuest may choose an interest rate based on the
following options: prime rate, a fixed rate as offered by the Bank from time to
time for varying periods up to 180 days or at the LIBOR Rate plus 1.75% for
periods of 30, 60, 90 or 180 days. No amount was drawn on the line at December
31, 1997 or 1998.
F-9
<PAGE>
MAPQUEST.COM, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
MapQuest entered into a promissory note during 1997. Terms of repayment
require thirty consecutive monthly payments of principal and interest. Interest
on the outstanding principal is fixed at a rate of 9%.
5. Preferred Stock and Stockholders' Equity
Restated Certificate of Incorporation
On July 17, 1997, MapQuest filed a Restated Certificate of Incorporation
with the State of Delaware in conjunction with the purchase and sale of Series
C Preferred Stock. The Restated Certificate of Incorporation authorizes
MapQuest to issue 35,000,000 shares, of which 20,000,000 shares are designated
Common Stock and 15,000,000 shares are designated Preferred Stock. Of the
Preferred Stock, 6,550,000 shares are designated Series A Preferred, 2,000,000
shares are designated Series B Preferred, 3,800,000 shares are designated
Series C Preferred and 2,650,000 shares are undesignated as to series.
Series A Preferred Stock
MapQuest is authorized to issue 6,550,000 shares (10,000,000 shares as of
December 31, 1996) of noncumulative, convertible, voting Series A Preferred
Stock. Effective July 17, 1997, a redemption feature was added and the issued
and outstanding shares were reclassified outside of stockholders' equity. At
the option of the Holder, each share of Series A Preferred Stock is convertible
into Common Stock at a conversion rate of 2.7 shares of Common Stock for each
share of Series A Preferred Stock. Each share of Series A Preferred Stock
automatically converts into shares of Common Stock, either (i) immediately
prior to the closing of MapQuest's initial underwritten public offering
pursuant to a Registration Statement filed with and declared effective by the
Securities and Exchange Commission under the Securities Act of 1993, as
amended, and having an aggregate offering to the public of not less than
$15,000,000 or (ii) upon the affirmative vote of the holders of at least two-
thirds of the then outstanding shares of Series A Preferred Stock, whichever is
earlier. The Series A Preferred Stock ranks senior to the Common Stock as to
dividend, liquidation, and redemption rights. The Series A Preferred Stock
ranks junior to the Series B Preferred Stock and the Series C Preferred Stock
as to dividend, liquidation and redemption rights. Each share of Series A
Preferred Stock issued and outstanding has a number of votes equal to the
number of shares into which such share of Series A Preferred Stock is then
convertible. Subject to the prior and superior rights of the holders of the
shares of Series B Preferred Stock and shares of Series C Preferred Stock, upon
written notice at least 120 days prior to December 31 of any calendar year
from, and including, the year 2002, by the holders of at least two-thirds of
the then outstanding shares of Series A Preferred Stock, MapQuest shall be
required to redeem all of the issued, outstanding and nonredeemed shares of
Series A Preferred Stock held by each holder of Series A Preferred Stock at a
redemption price per share of $1.00 plus an amount equal to all declared but
unpaid dividends on the Series A Preferred Stock. The redemption would be
payable in three annual installments. No dividends may be paid on the Series A
Preferred Stock unless MapQuest has fulfilled its dividend obligations on the
Series B Preferred Stock and Series C Preferred Stock. The Series A Preferred
Stock has an annual cash dividend rate of $.075 per share when and as declared
by the Board of Directors. MapQuest has reserved 17,685,000 shares of Common
Stock for issuance upon conversion of Series A Preferred Stock.
Pursuant to the terms of the stock purchase agreement dated October 31,
1994, MapQuest sold 215,000 shares of its Series A Preferred Stock at a
purchase price of $1 per share to MapQuest's then existing management. The
aggregate purchase price of $215,000 was paid $127,500 in cash and $87,500 in
notes due October 31, 1999. The notes bear interest at a rate of 7.5%
compounded annually. Payments are due annually in an amount that is the lesser
of one-fifth of the principal balance or 50% of any bonus to which each
employee is entitled. The notes are secured by the shares purchased, with
shares released to the extent each note is paid. At December 31, 1997 and 1998,
outstanding notes receivable in conjunction with this stock purchase was
$35,200.
F-10
<PAGE>
MAPQUEST.COM, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
On March 26, 1996, pursuant to the terms of an Employment Agreement dated
October 31, 1994, the Company sold 35,000 shares of its Series A Preferred
Stock at a purchase price of $1 per share to a member of MapQuest's then
existing management. The aggregate purchase price of $35,000 was paid $3,500 in
cash and $31,500 in a note due October 31, 2000. The note bears interest at a
rate of 7.5% compounded annually. The repayment terms were modified pursuant to
a severance agreement in 1997. The payment of the note, inclusive of interest,
is due on the earlier of September 30, 2000 or the date on which the severed
employee transfers all shares of the employee's Series A Preferred Stock. The
note is secured by the shares purchased with shares released to the extent the
note is paid. At December 31, 1997 and 1998, outstanding notes receivable in
conjunction with this stock purchase was $31,500.
Series B Preferred Stock
MapQuest is authorized to issue 2,000,000 shares of cumulative, redeemable,
nonvoting Series B Preferred Stock. Holders of shares of Series B Preferred
Stock are entitled to a cumulative dividend, payable semiannually, at the
annual rate of $.46125 per share with respect to dividends payable on or prior
to December 31, 1997 and $.39975 per share with respect to dividends payable
after December 31, 1997. The dividend may be paid in cash or a combination of
cash and additional shares of Series B Preferred Stock; however, at least
13.33% of the dividend payable in any period on or prior to December 31, 1997
shall be payable in cash. As of December 31, 1997 and 1998, there were no
dividends in arrears. Subject to the prior written consent of the holders of a
majority of the shares of Series C Preferred Stock then issued and outstanding,
the Series B Preferred Stock is redeemable at the option of MapQuest at any
time at a price of $6.15 per share, payable in cash or a combination of cash
and subordinated convertible debentures. Subject to the prior and superior
rights of holders of Series C Preferred Stock, the Series B Preferred Stock is
also redeemable at the option of the holders upon written notice at least 120
days prior to December 31 of any calendar year from and including the year
2002, by the holders of at least two-thirds of the then outstanding shares of
Series B Preferred Stock, at a price of $6.15 per share payable in cash, plus
an amount equal to all dividends accrued and unpaid thereon to the redemption
date. The redemption would be payable in three annual installments. The Series
B Preferred Stock ranks senior to the Series A Preferred Stock and the common
stock as to dividend, liquidation and redemption rights. The Series B Preferred
Stock ranks senior to the Series C Preferred Stock as to dividend rights and
junior to the Series C Preferred Stock as to liquidation and redemption rights.
During 1996, 1997 and 1998 MapQuest paid dividends totaling $524,183,
$558,812 and $516,299, respectively, on Series B Preferred Stock. These
dividends included cash dividends of $69,889, $74,506 and -0- and stock
dividends of $454,295, $484,306 and $516,299, during 1996, 1997 and 1998,
respectively. The stock dividends were based on the issuance of additional
shares of Series B Preferred Stock of 73,869, 78,749 and 83,951 shares during
1996, 1997 and 1998, respectively, using a value of $6.15 per share.
Series C Preferred Stock
MapQuest is authorized to issue 3,800,000 shares (0 shares as of December
31, 1996) of noncumulative, redeemable, convertible, voting Series C Preferred
Stock. At the option of the holder, each share of Series C Preferred Stock is
convertible into Common Stock at a conversion rate of 2.7 shares of Common
Stock for each share of Series C Preferred Stock. Each share of Series C
Preferred Stock automatically converts into shares of Common Stock, immediately
prior to the closing of MapQuest's initial underwritten public offering
pursuant to a Registration Statement filed with and declared effective by the
Securities and Exchange Commission under the Securities Act of 1993, as
amended, in which the aggregate proceeds to MapQuest equal at least $15,000,000
and in which the price per share of Common Stock equals or exceeds $2.60 per
share (as adjusted for stock splits, stock dividends, recapitalizations and
similar events). Each share of Series C Preferred Stock
F-11
<PAGE>
MAPQUEST.COM, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
issued and outstanding has a number of votes equal to the number of shares into
which such share of Series C Preferred Stock is then convertible. The Series C
Preferred Stock ranks senior to the Common Stock, the Series A Preferred Stock
and the Series B Preferred Stock as to liquidation and redemption rights and
ranks senior to the Common Stock and the Series A Preferred Stock with respect
to the payment of dividends. The Series C Preferred Stock ranks junior to the
Series B Preferred Stock with respect to the payment of dividends. The Series C
Preferred Stock has an annual cash dividend rate of $.26325 per share when and
as declared by the Board of Directors. Upon written notice at least 120 days
prior to December 31 of any calendar year from, and including, the year 2002,
by the holders of at least two-thirds of the then outstanding shares of Series
C Preferred Stock, the Company shall be required to redeem all of the issued,
outstanding and nonredeemed shares of Series C Preferred Stock held by each
holder of Series C Preferred Stock at a redemption price per share of $3.51
plus an amount equal to all declared but unpaid dividends on the Series C
Preferred Stock. The redemption would be payable in three annual installments.
The Company has reserved 9,437,456 shares of Common Stock for issuance upon
conversion of Series C Preferred Stock.
Pursuant to the terms of the stock purchase agreement dated July 17, 1997,
MapQuest sold 3,431,498 shares of its Series C Preferred Stock at a purchase
price of $3.51 per share. The aggregate purchase price of $12,044,558 was paid
in cash. The difference between the aggregate purchase price net of the
warrants issued during 1998 is being accreted to the redemption value through
2002. Accretion totaled $63,243 and $150,924 during 1997 and 1998,
respectively.
On November 1, 1997, MapQuest sold 63,856 shares of its Series C Preferred
Stock at a purchase price of $3.51 per share to members of the Company's then
existing management. The aggregate purchase price of $224,135 was paid by
$224,135 in notes due November 1, 2004. The notes bear interest at a rate of
7.0% compounded annually. Payments are due annually, commencing in the year
2000, in an amount that is the lesser of one-fifth of the principal balance or
50% of any bonus to which each employee is entitled. The note is secured by the
shares purchased with shares released to the extent the note is paid. At
December 31, 1997 and 1998, outstanding notes receivable in connection with
this stock purchase were $224,135.
Common Stock
As of December 31, 1998, MapQuest has a total of 35,778,701 shares of
Common Stock reserved for future issuance.
6. Stock Options and Warrants
1995 Stock Option Plan
As of December 31, 1998, 6,233,627 shares of MapQuest's Common Stock were
reserved for issuance under the GeoSystems Global Corporation 1995 Stock Option
Plan (the Plan), under which the Company may grant stock options to key
employees and consultants. Each option entitles the holder to purchase from
MapQuest one share of Common Stock at an exercise price which shall not be less
than the fair market value of one share of stock on the date of grant. These
options vest generally over five years and expire ten years from the date of
grant.
F-12
<PAGE>
MAPQUEST.COM, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
Changes during the years ended December 31, 1996, 1997 and 1998 in options
outstanding were as follows:
<TABLE>
<CAPTION>
Number of Exercise Price
Options Per Option
--------- --------------
<S> <C> <C>
Balance at January 1, 1996......................... 1,375,515 $ 0.04
Granted during 1996................................ 1,071,179 $ 0.04
Granted during 1996................................ 365,310 $ 0.06
Granted during 1996................................ 429,300 $ 0.37
Exercised.......................................... (7,074) $ 0.04
Forfeited.......................................... (27,216) $ 0.04
--------- -----------
Outstanding at December 31, 1996................... 3,207,014 $ .04-$0.37
Granted during 1997................................ 933,678 $ 0.37
Exercised.......................................... (3,240) $ 0.04
Exercised.......................................... (6,210) $ 0.06
Exercised.......................................... (864) $ 0.37
Forfeited.......................................... (268,855) $ 0.04
Forfeited.......................................... (24,840) $ 0.06
Forfeited.......................................... (80,022) $ 0.37
--------- -----------
Outstanding at December 31, 1997................... 3,756,661 $ .04-$0.37
Granted during 1998................................ 2,218,050 $ 0.37
Exercised.......................................... (78,570) $ 0.04
Exercised.......................................... (33,750) $ 0.06
Exercised.......................................... (7,290) $ 0.37
Forfeited.......................................... (551,855) $ 0.04
Forfeited.......................................... (135,000) $ 0.06
Forfeited.......................................... (320,596) $ 0.37
--------- -----------
Outstanding at December 31, 1998................... 4,847,650 $0.04-$0.37
========= ===========
</TABLE>
During June, 1998 MapQuest accelerated the vesting and extended the
exercise period of options in connection with a severance agreement for the
former President and recorded compensation expense of $38,000.
Pro forma information regarding net loss and net loss per share is required
by SFAS 123, and has been determined as if MapQuest had accounted for its
employee stock options under the fair value method of that statement. As
permitted under the provisions of SFAS No. 123, and based on the historical
lack of a public market for MapQuest.com, Inc. options, no factor for
volatility has been reflected in the option pricing calculation. The fair value
of the options was estimated at date of grant using a Black-Scholes option
pricing model with the following weighted average assumptions:
<TABLE>
<CAPTION>
1996 1997 1998
------- ------- -------
<S> <C> <C> <C>
Assumptions
Volatility factor of the expected market price of
MapQuest's common stock........................... 0% 0% 0%
Average risk free interest rate.................... 6.1% 6.1% 5.24%
Dividend yield..................................... 0.0% 0.0% 0.0%
Average life....................................... 5 years 5 years 5 years
</TABLE>
F-13
<PAGE>
MAPQUEST.COM, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options which have no vesting restrictions
and are fully transferable. In addition, option valuation models require the
input of highly subjective assumptions including the expected stock price
volatility. Because MapQuest stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in
management's opinion, the existing models do not necessarily provide a
reliable single measure of the fair value of its stock options.
For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. MapQuest's
pro forma information is as follows:
<TABLE>
<CAPTION>
1996 1997 1998
----------- ------------ -----------
<S> <C> <C> <C>
Pro forma net loss applicable to
common stockholders.............. $(1,801,499) $(13,432,774) $(3,822,092)
Pro forma basic and diluted loss
per share........................ $ (8.84) $ (64.43) $ (12.09)
</TABLE>
Additional information with respect to outstanding options as of December
31, 1998 is as follows:
<TABLE>
<CAPTION>
Options
Options Outstanding Exercisable
----------------------- -----------
Weighted
Average
Remaining
Number of Contractual Number of
Exercise Prices Options Life Options
--------------- ---------- ----------- -----------
<S> <C> <C> <C>
$0.04.................................... 1,509,883 6.7 1,043,163
$0.06.................................... 165,510 7.5 89,640
$0.37.................................... 3,172,257 8.5 669,394
---------- ---------
$0.04 - $0.37............................ 4,847,650 1,802,197
========== =========
</TABLE>
The weighted average fair value of options granted during 1996, 1997 and
1998 was $0 in each year.
On December 31, 1998 MapQuest granted 645,570 options for which the
exercise price per share will be the initial public offering price determined
upon completion of the offering MapQuest intends to make (see Note 15). These
options are excluded from the disclosures in this Note 6.
Warrants
As of December 31, 1998, there were 390,258 warrants outstanding under
which each warrant entitles the holder to purchase one share of MapQuest's
Common Stock for $.04 per share. The warrants were issued for $.004 per
warrant in connection with the original Series A Preferred Stock Purchase
Agreement dated October 31, 1994. The warrants expire upon the earlier of
October 31, 2004 or the fifth anniversary of an initial public offering.
MapQuest has reserved 390,258 shares of common stock for issuance upon
exercise of the warrants.
As of December 31, 1998, there were 406,709 warrants outstanding under
which each warrant entitles the holder to purchase one share of MapQuest's
common stock for $1.30. The warrants were issued for $1,000 in connection with
the Purchase and Sale of Series C Preferred Stock Agreement. The warrants
expire on July 18, 2002. MapQuest has reserved 406,709 shares of common stock
for issuance upon exercise of the warrants.
F-14
<PAGE>
MAPQUEST.COM, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
As of December 31, 1998, there were 954,147 warrants outstanding under
which each warrant entitles the holder to purchase one share of MapQuest's
common stock for $1.04 per share. The warrants were issued in connection with a
distribution agreement MapQuest executed in 1997. These warrants were valued at
$0 on the date of grant using the "Black Scholes" option pricing model. The
warrants expire on the earlier of April 22, 2002 or upon termination of the
agreement. In the event that the holder shall have exercised the warrants prior
to the Company terminating the distribution agreement due to a breach of the
agreement by the holder, the Company shall have the option to purchase these
shares of common stock for a period of 60 days after the termination of the
distribution agreement at a purchase price which is the lesser of $1.77 or the
then fair market value of such shares. The Company has reserved 954,147 shares
of common stock for issuance upon exercise of the warrants.
As of December 31, 1998, there were 522,231 warrants outstanding under
which each warrant entitles the holder to purchase one share of MapQuest's
common stock for $.004 per share. The warrants were issued during May 1998 to
certain holders of Series C Preferred Stock in connection with the original
issuance of the Series C Preferred Stock. The warrants expire on April 30,
2008. MapQuest has reserved 522,231 shares of common stock for issuance upon
exercise of the warrants.
As of December 31, 1998, there were 41,266 warrants outstanding under which
each warrant entitles the holder to purchase one share of MapQuest's common
stock for $1.30. The warrants were issued for services rendered by an outside
party. The warrants expire in September 2003.
7. Loss Per Share
The following table sets forth the computation of basic and diluted loss
per share:
<TABLE>
<CAPTION>
1996 1997 1998
----------- ------------ -----------
<S> <C> <C> <C>
Numerator:
Net loss......................... $(1,276,179) $ (7,599,123) $(3,154,869)
Preferred stock dividends........ (525,320) (560,023) (516,299)
Accretion of redeemable preferred
stock........................... -- (63,243) (150,924)
Addition of redemption feature to
preferred stock................. -- (5,210,383) --
----------- ------------ -----------
Numerator for loss per share ap-
plicable to common stockhold-
ers............................. $(1,801,499) $(13,432,772) $(3,822,092)
=========== ============ ===========
Denominator:
Denominator for basic and diluted
loss per share--weighted-average
shares.......................... 203,779 208,499 316,202
Basic and diluted loss per common
share............................. $ (8.84) $ (64.43) $ (12.09)
=========== ============ ===========
</TABLE>
The following securities and number of shares have been excluded from the
diluted per share computation as they are antidilutive:
<TABLE>
<CAPTION>
1996 1997 1998
--------- --------- ---------
<S> <C> <C> <C>
Convertible redeemable preferred stock Se-
ries A..................................... -- 6,550,000 6,550,000
Convertible redeemable preferred stock Se-
ries C..................................... 3,495,354 3,495,354
Convertible preferred stock Series A........ 6,550,000 -- --
Stock options............................... 3,207,014 3,756,661 4,847,650
Stock warrants.............................. 390,258 1,751,114 2,314,611
</TABLE>
F-15
<PAGE>
MAPQUEST.COM, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
The following table sets forth the computation of pro forma basic and
diluted loss per share, assuming conversion of the shares of Series A Preferred
Stock and Series C Preferred Stock to shares of common stock and the redemption
of the shares of Series B Preferred Stock outstanding at December 31, 1998 at
the beginning of the year ended December 31, 1998. However, the issuance of
common shares for the redemption of the Series B Preferred Stock has not been
reflected in the following table since an assumed offering price has not been
included on a pro forma basis.
<TABLE>
<CAPTION>
1998
-----------
<S> <C>
Numerator:
Net loss applicable to common stockholders.................. $(3,822,092)
Redeemable preferred stock--Series C accretion.............. 150,924
Preferred stock dividends on cumulative preferred stock--Se-
ries B..................................................... --
-----------
Numerator for pro forma basic and diluted loss per share.... $(3,671,168)
Denominator:
Weighted average number of common shares.................... 316,202
Assumed conversion of preferred shares to common shares..... 27,122,456
Assumed issuance of common shares to redeem Series B Pre-
ferred Stock............................................... --
-----------
Denominator for pro forma basic and diluted loss per share.. 27,438,658
Pro forma basic and diluted loss per share.................. $ 0.13
</TABLE>
8. Income Taxes
No provision for income taxes has been recorded as MapQuest has incurred
net operating losses during 1996, 1997 and 1998.
The tax effects of temporary differences and net operating loss and credit
carryforwards that give rise to MapQuest's deferred tax assets and liabilities
are as follows:
<TABLE>
<CAPTION>
December 31
------------------------
1997 1998
----------- -----------
<S> <C> <C>
Deferred tax liabilities:
Depreciation................................... $ (385,093) $ (347,306)
Deferred tax assets:
Allowance for doubtful accounts................ 84,040 146,324
Other.......................................... 481,607 496,126
Net operating loss and credit carryforwards.... 3,486,589 4,746,255
----------- -----------
Total deferred tax assets........................ 4,052,236 5,388,705
----------- -----------
Net deferred tax assets.......................... 3,667,143 5,041,399
Valuation allowances for deferred tax assets..... (3,667,143) (5,041,399)
----------- -----------
Net deferred taxes............................. $ -- $ --
=========== ===========
</TABLE>
Due to the uncertainty of the realization of the assets, a valuation
allowance has been provided. The valuation allowance was increased by
$1,374,256, $2,618,565 and $1,239,780 for the years ended December 31, 1996,
1997 and 1998, respectively.
As of December 31, 1998, MapQuest has net operating loss carryforwards of
approximately $11,680,000, which expire between 2009 and 2018, and research and
development tax credit carryforwards of approximately $623,000, which expire
during 2010 and 2013. The utilization of approximately $10,035,000 of such net
operating loss carryforwards and $561,000 of such research and development tax
credit carryforwards is subject to an annual limitation of approximately
$1,300,000, pursuant to Section 382 of the Internal Revenue Code.
F-16
<PAGE>
MAPQUEST.COM, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
9. Segment Information
MapQuest has two reportable segments: MapQuest Business/Consumer and
Digital Mapping Services. The MapQuest Business/Consumer segment provides
products and services to address the web-based destination information needs of
both businesses and consumers. Business and Consumer revenues and costs are
combined for this segment because a significant portion of the costs, primarily
compensation for operations personnel and related operations costs, are common
to both Business and Consumer revenues and are not allocated. The Digital
Mapping Services segment provides non-internet mapping products and services to
the education, reference, directory, travel and governmental markets as well as
providing customized mapping solutions to various other customers. Revenues are
derived principally from the United States.
The accounting policies of the segments are the same as those described in
the summary of significant accounting policies. MapQuest evaluates performance
based on gross profit and does not allocate assets to the reportable segments
since management does not evaluate segment performance based on asset
information and common assets are used in the segments. Accordingly,
depreciation expense is not included in the information set forth below.
MapQuest's reportable segments are strategic business units that offer
different products and services. They are managed separately because each
business requires different technology and marketing strategies.
<TABLE>
<CAPTION>
Year ended December 31
-------------------------------
1996 1997 1998
--------- --------- ---------
In thousands
<S> <C> <C> <C>
Business segment revenues:
MapQuest consumer/business-trade......... $ 7,159.7 $ 6,038.6 $ 7,912.0
Digital mapping services-trade........... 12,417.2 15,377.1 16,805.1
--------- --------- ---------
Total...................................... $19,576.9 $21,415.7 $24,717.1
========= ========= =========
Business segment profit:
MapQuest consumer/business............... 2,834.5 1,503.4 3,103.2
Digital mapping services................. 4,422.9 4,609.9 3,968.1
--------- --------- ---------
Total segment profit....................... 7,257.4 6,113.3 7,071.3
Reconciling items:
Operating expenses....................... (8,976.1) (14,115.7) (10,524.1)
Other and interest income................ 442.5 403.3 297.9
--------- --------- ---------
Pre-tax loss............................... $(1,267.2) $(7,599.1) $(3,154.9)
========= ========= =========
</TABLE>
10. Leases
MapQuest leases certain office and warehouse space from one of its
stockholders under operating leases. MapQuest also leases other office space
and office equipment from unrelated parties under operating leases. Future
lease commitments are as follows:
<TABLE>
<S> <C>
1999........................................................... $1,039,000
2000........................................................... 848,000
2001........................................................... 754,000
2002........................................................... 758,000
2003........................................................... 762,000
Thereafter..................................................... 2,351,000
----------
$6,512,000
==========
</TABLE>
F-17
<PAGE>
MAPQUEST.COM, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
Rental expense for the years ended December 31, 1996, 1997 and 1998, was
$683,000, $1,131,000 and $1,033,000, respectively.
11. Retirement Savings Plan
MapQuest sponsors a defined contribution retirement savings plan for
substantially all of its employees. Employees may elect to defer up to 15% of
their salary. MapQuest has the option to match up to 100% of the employees'
contribution up to 2% of their salary. The expense incurred related to this
plan was $161,549, $209,235 and $189,512 during the years ended December 31,
1996, 1997 and 1998, respectively.
12. Related Party Transactions
MapQuest paid a management fee of $75,000 to a stockholder during 1996 and
1997, respectively. In connection with the Purchase and Sale of Series C
Preferred Stock Agreement, the $75,000 annual management fee arrangement was
terminated effective July 17, 1997. MapQuest incurred rent expense of $112,000,
$35,591 and $16,597 related to leases with one of its stockholders during 1996,
1997 and 1998, respectively. MapQuest recorded sales to its stockholders of
$475,000, $432,320 and $513,626 during 1996, 1997 and 1998, respectively. Also,
MapQuest recorded sales to other affiliates of $181,000, $1,290,900 and
$2,022,000 during 1996, 1997 and 1998, respectively. As of December 31, 1998,
MapQuest's accounts receivable - affiliates was $127,989.
13. Concentration of Credit Risk
For the years ended December 31, 1996, 1997 and 1998, sales to MapQuest's
top four customers represented 38%, 25% and 18% of total sales, respectively.
During 1996, one customer represented 16% of total sales.
14. Commitments and Contingencies
Minimum Annual Royalties
MapQuest has guaranteed payment of the following minimum annual royalties
under a distribution agreement for each of the following years:
<TABLE>
<CAPTION>
Minimum
Year ended December 31 Annual Royalty
---------------------- --------------
<S> <C>
1997...................................................... $ 166,667
1998...................................................... 345,833
1999...................................................... 462,500
2000...................................................... 500,000
2001...................................................... 500,000
2002...................................................... 125,000
----------
Total................................................... $2,100,000
==========
</TABLE>
Contingencies
On December 14, 1998, Mark Tornetta filed a lawsuit against Moore U.S.A.,
Inc. in the United States District Court for the Eastern District of
Pennsylvania. The Company is defending this matter pursuant to an indemnity
provision in its contract with Moore U.S.A., Inc. Mr. Tornetta's patent
describes a specific method for searching real estate properties, which Mr.
Tornetta alleges is infringed by Moore U.S.A., Inc.'s online real
F-18
<PAGE>
MAPQUEST.COM, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
estate service. The Company believes that the claims of the patent are not
infringed by MapQuest, and/or the patent is invalid. While the litigation is in
the early stage, and its outcome cannot be predicted, MapQuest believes that
this litigation is without merit, and intends to defend this action vigorously.
On January 26, 1999, Civix-DDI, LLC filed a lawsuit in the United States
District Court for the District of Colorado against twenty different
defendants, including MapQuest. Seven of these defendants are licensees of
MapQuest's technology and may have rights to indemnification under their
respective agreements or at law. The complaint alleges infringement by MapQuest
of two patents, by manufacture, use, sale, and offers to sell MapQuest's
electronic yellow page services, systems and products. MapQuest believes that
the claims of the patents are not infringed by MapQuest, and/or the patents are
invalid. While the litigation is in the early stage, and its outcome cannot be
predicted, MapQuest believes that this litigation is without merit, and intends
to defend this action vigorously.
MapQuest periodically receives notices of claims arising out of the normal
course of business. In the opinion of management, these matters will not have a
material effect on MapQuest's financial position, results of operations, or
liquidity.
15. Subsequent Events and Pro Forma Adjustments
During February 1999, the Board of Directors authorized MapQuest to file a
registration statement with the Securities and Exchange Commission for an
initial public offering of shares of its common stock. Prior to the closing of
the offering, MapQuest intends to effect a 2.7 for 1 common stock split.
Concurrently with the offering, MapQuest intends to establish an employee stock
purchase plan under which a total of 1,755,000 shares of common stock will be
made available for sale and intends to adopt the 1999 stock plan for which
3,645,000 shares of common stock will be reserved for future issuances.
In connection with the above, MapQuest intends to amend and restate its
Certificate of Incorporation such that it will have the authority to issue an
aggregate of 105,000,000 shares of capital stock, consisting of 100,000,000
shares of common stock, par value $0.001 per share, and 5,000,000 shares of
preferred stock, par value $0.01 per share. All references to common shares,
per common share and par value per common share, except for references to
authorized common shares, in the financial statements have been restated to
give effect to the common stock split and change in par value per common share.
MapQuest intends to use a portion of the proceeds of the offering to redeem the
outstanding shares of Series B Preferred Stock. Also, upon the completion of an
initial public offering in which the gross proceeds paid by the public are at
least $15,000,000 and, with respect to the Series C Preferred Stock at a per
share price to the public of not less than $2.60, all outstanding redeemable
preferred shares of Series A Preferred Stock and Series C Preferred Stock will
automatically be converted into shares of common stock in the manner described
in Note 5. The pro forma balance sheet at December 31, 1998 gives effect to
such conversion as if it occurred on that date. The pro forma loss per share
(Note 7) for the year ended December 31, 1998 gives effect to the conversion of
such shares as if it occurred at the beginning of 1998.
F-19
<PAGE>
[Back cover--Picture of various Digital Mapping Services products and logos of
representative customers.]
<PAGE>
[LOGO] MAPQUEST.COM(TM)
<PAGE>
PART II
INFORMATION NOT REQUIRED
IN THE PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
Expenses in connection with the issuance and distribution of the securities
being registered, other than underwriting discounts and commissions, are
estimated as follows:
<TABLE>
<S> <C>
SEC registration fee.......................................... $ 13,900
NASD filing fee............................................... 6,848
Printing and engraving expenses............................... 150,000
Legal fees and expenses....................................... 450,000
Accountants' fees and expenses................................ 550,000
Nasdaq listing fee............................................ 100,000
Transfer Agent's fees and expenses............................ 10,000
Miscellaneous costs........................................... 19,252
----------
Total....................................................... $1,300,000
==========
</TABLE>
Item 14. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law permits a corporation
to include in its charter documents, and in agreements between the corporation
and its directors and officers, provisions expanding the scope of
indemnification beyond that specifically provided by the current law.
The Registrant's Restated Certificate of Incorporation provides for the
indemnification of directors to the fullest extent permissible under Delaware
law.
The Registrant's Restated Bylaws provide for the indemnification of
officers, directors and third parties acting on behalf of the Registrant if the
person acted in good faith and in a manner reasonably believed to be in and not
opposed to the best interest of the Registrant, and, with respect to any
criminal action or proceeding, the indemnified party had no reason to believe
his conduct was unlawful.
The Registrant has entered into indemnification agreements with its
directors and executive officers, in addition to indemnification provided for
in the Registrant's Restated Bylaws, and intends to enter into indemnification
agreements with any new directors and executive officers in the future.
Item 15. Recent Sales of Unregistered Securities.
Since March 1996, the Registrant has issued and sold the following
unregistered securities:
(1) In March 1996, the Registrant sold an aggregate of 35,000 shares of
Series A Preferred Stock at an aggregate purchase price of $35,000, or
$1.00 per share, to Perry Evans, the Registrant's then Vice President of
Sales and Marketing.
(2) In June 1996, in addition to options issuable under the 1995 stock
option plan, the Registrant issued Barbara Petersen an option to purchase
108,000 shares of common stock at an exercise price of $.37 per share. The
option is exercisable at any time prior to June 11, 2006.
(3) In July 1997, the Registrant sold an aggregate of 3,431,498 shares
of Series C Preferred Stock for an aggregate purchase price of
$12,044,558, or $3.51 per share, to Highland Capital Partners III Limited
Partnership, Highland Entrepreneurs' Fund III Limited Partnership, Weston
Presidio Capital II, L.P., Trident Capital Partners Fund-I, L.P., Trident
Capital Partners Fund-I, C.V., The Roman Arch Fund, L.P., The Roman Arch
Fund II, L.P., Mr. Bart Faber and Stet & Query, L.P.
II-1
<PAGE>
(4) In November 1997, the Registrant sold 31,928 shares of Series C
Preferred Stock at a purchase price of $112,067.28, or $3.51 per share, to
James Thomas and sold 31,928 shares of Series C Preferred Stock at a
purchase price of $112,067.28, or $3.51 per share, to William Muenster.
(5) In April 1997 and in connection with a licensing and distribution
agreement, the Registrant issued National Geographic Holdings, Inc.
warrants to purchase 954,147 shares of the Registrant's common stock at an
exercise price of $1.04 per share. The warrants expire in April 22, 2002.
(6) In July 1997, the Registrant issued to Prudential Securities
Incorporated a warrant, for an aggregate purchase price of $1,000, to
purchase 406,709 shares of the Registrant's common stock at an exercise
price of $1.30 per share. The warrant expires in July 2002.
(7) In May 1998, the Registrant granted certain Series C Preferred Stock
investors warrants to purchase an aggregate of 522,231 shares of common
stock at an exercise price of $0.004 per share, without the payment of
additional amounts to the Registrant. The warrants expire in April 2008.
(8) In September, 1998 the Registrant issued Ramsey/Beirne Associates a
warrant to purchase 41,266 shares of the Registrant's common stock at an
exercise price of $1.30 per share in partial consideration for services
performed on behalf of the Registrant. The warrant expires in September
2003.
(9) Since March 1996, the Registrant has issued 137,214 shares of common
stock to its employees upon the exercising of options granted under its
1995 stock option plan at an exercise price of $0.04 per share.
The sales of the securities described in Item 15(9) were deemed to be
exempt from registration under the Securities Act in reliance on Rule 701
promulgated under Section 3(b) of the Securities Act as transactions pursuant
to compensatory benefit plans and contracts relating to compensation as
provided under such Rule 701. The sale of the securities described in Items
15(1) through 15(8) were deemed to be exempt from registration under the
Securities Act in reliance on Section 4(2) of the Securities Act, as
transactions by an issuer not involving a public offering, or Rule 506 under
Regulation D.
Item 16. Exhibits
(a)Exhibits
A list of exhibits filed herewith is contained on the Exhibit Index
immediately preceding such exhibits and is incorporated herein by reference.
(b) Financial Statement Schedules.
Report of Independent Auditors
Schedule II: Valuation and Qualifying Accounts
Item 17. Undertakings
The Registrant hereby undertakes to provide the Underwriters at the closing
specified in the Underwriting Agreement certificates in such denominations and
registered in such names as required by the Underwriters to permit prompt
delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described in Item 14 above, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933, and will be governed by the final adjudication of such
issue.
II-2
<PAGE>
The undersigned Registrant undertakes that: (1) for purposes of determining
any liability under the Securities Act of 1933, the information omitted from
the form of prospectus as filed as part of the registration statement in
reliance upon Rule 430A and contained in the form of prospectus filed by the
Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act
shall be deemed to be part of this registration statement as of the time it was
declared effective, and (2) for the purpose of determining any liability under
the Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and this offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant has duly caused this amended registration statement on Form S-1
to be signed on its behalf by the undersigned, thereunto duly authorized, in
the City of Mountville, State of Pennsylvania, on April 12, 1999.
MAPQUEST.COM, INC.
/s/ Michael J. Mulligan
By: _________________________________
Michael J. Mulligan Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this amended registration statement has been signed by the following persons
in the capacities and on April 12, 1999.
<TABLE>
<CAPTION>
Signatures Title
<S> <C>
Chief Executive Officer (Principal
* Executive Officer) and Chairman
- -------------------------------------
Michael J. Mulligan
* Chief Financial Officer and Vice
- ------------------------------------- President, Finance and
James Thomas Administration and Secretary
(Principal Financial Officer and
Principal Accounting Officer)
* Director
- -------------------------------------
Robert McCormack
* Director
- -------------------------------------
John Moragne
* Director
- -------------------------------------
Daniel Nova
* Director
- -------------------------------------
Carlo von Schroeter
* Director
- -------------------------------------
C. Richard Allen
/s/ Michael J. Mulligan
By: _________________________________
Michael J. Mulligan Attorney-in-Fact
</TABLE>
II-4
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Board of Directors
MapQuest.com, Inc.
We have audited the financial statements of MapQuest.com, Inc. as of
December 31, 1997 and 1998, and for each of the three years in the period ended
December 31, 1998, and have issued our report thereon dated February 18, 1999
except for Note 15 as to which the date is April , 1999 (included elsewhere in
this Registration Statement). Our audits also included the financial statement
schedule listed in Item 16(b) of this Registration Statement. This schedule is
the responsibility of the Company's management. Our responsibility is to
express an opinion based on our audits.
In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.
Ernst & Young LLP
Harrisburg, Pennsylvania
February 18, 1999
---------------------
The foregoing report is in the form that will be signed upon the completion
of the restatement of the capital accounts described in Note 15 to the
financial statements.
Ernst & Young LLP
Harrisburg, Pennsylvania
April 9, 1999
II-5
<PAGE>
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
MapQuest.com, Inc.
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D COL. E
------ ------------ --------------------------------- ------------ -----------------
Additions
---------------------------------
Balance at Charged to Other
Beginning of Charged to Costs Accounts-- Deductions-- Balance at End of
Description Period and Expenses Describe Describe Period
----------- ------------ ---------------- ---------------- ------------ -----------------
<S> <C> <C> <C> <C> <C>
Year Ended December 31,
1998:
Reserves and
allowances deducted
from asset
accounts:
Allowance for
uncollectible
accounts......... $407,136 $271,598 $209,008(1) $469,726
Year Ended December 31,
1997:
Reserves and
allowances deducted
from asset
accounts:
Allowance for
uncollectible
accounts......... $433,672 $262,388 $288,924(1) $407,136
Year Ended December 31,
1996:
Reserves and
allowances deducted
from asset
accounts:
Allowance for
uncollectible
accounts......... $263,171 $232,500 $ 61,999(1) $433,672
</TABLE>
- --------
(1) Uncollectible accounts written off, net of recoveries.
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description Page
------- ----------- ----
<C> <S> <C>
1.1 Form of Underwriting Agreement*
3.1 Restated Certificate of Incorporation, as currently in effect
3.2 Form of Amendment No. 2 to the Amended and Restated Certificate
of Incorporation of MapQuest, to be filed prior to consummation
of the offering
3.3 Form of Amended and Restated Certificate of Incorporation of
MapQuest, to be effective immediately prior to the consummation
of the offering
3.4 By-Laws of MapQuest
4.1 Specimen common stock certificate*
Form of Opinion of Mayer, Brown & Platt as to legality of the
5.1 securities being issued*
10.1 Cartographic Product Development, Publishing, Marketing and
Distribution Agreement, dated as of April 22, 1997, between
National Geographic Society, National Geographic Holdings,
Inc., and MapQuest.com, Inc.*
+10.2 Employment Agreement, dated as of August 10, 1998, between
Michael Mulligan and MapQuest.com, Inc.
+10.3 Employment Agreement, dated as of October 31, 1994, between
William Muenster and MapQuest.com, Inc.
+10.4 MapQuest.com, Inc. 1995 Stock Option Plan
10.5 Amendment No. 1 to 1995 Stock Option Plan of MapQuest.com,
Inc.*
+10.6 Amendment No. 2 to 1995 Stock Option Plan of MapQuest.com, Inc.
+10.7 Amendment No. 3 to 1995 Stock Option Plan of MapQuest.com, Inc.
10.8 Amendment No. 4 to 1995 Stock Option Plan of MapQuest.com, Inc.
10.9 MapQuest 1999 Employee Stock Purchase Plan
10.10 MapQuest 1999 Stock Plan
10.11 Form of Recapitalization Agreement among MapQuest and the
stockholders named therein
10.12 Agreement between MapQuest and Qwest Communications, dated May
18, 1998
10.13 Lease Agreement, dated December 9, 1996 between Donnerville
Associates and MapQuest in respect of the Mountville facility
21.1 Subsidiaries of MapQuest
23.1 Consent of Independent Auditors
23.4 Consent of counsel (included in Exhibits 5.1 and 5.2)*
+24.1 Power of Attorney
+27.1 Financial Data Schedule
</TABLE>
- --------
* To be filed by amendment.
+ Previously filed.
<PAGE>
EXHIBIT 3.1
RESTATED CERTIFICATE OF INCORPORATION
OF
GEOSYSTEMS GLOBAL CORPORATION
It is hereby certified that:
1. The present name of the corporation (hereinafter called the
"Corporation") is GEOSYSTEMS GLOBAL CORPORATION, which is the name under which
the Corporation was originally incorporated; the date of filing of the original
Certificate of Incorporation of the Corporation with the Secretary of State of
Delaware is March 28, 1994, and a Restated Certificate of Incorporation was
filed with the Secretary of State of Delaware on November 1, 1994.
2. This Restated Certificate of Incorporation restates and amends the
Certificate of Incorporation of the Corporation by amending said Certificate of
Incorporation of the Corporation in its entirety as set forth in Exhibit A
---------
attached hereto and made a part hereof.
3. The Restated Certificate of Incorporation herein certified was duly
adopted by the Board of Directors of the Corporation and by the stockholders of
the Corporation pursuant to Sections 242 and 245 of the General Corporation Law
of the State of Delaware, as amended.
4. IN WITNESS WHEREOF, said GEOSYSTEMS GLOBAL CORPORATION has caused this
certificate to be signed by James Thomas, its Executive Vice President and
Secretary, this 17/th/ day of July, 1997.
GEOSYSTEMS GLOBAL CORPORATION
By: /s/ James Thomas
------------------------------------------
Name: James Thomas
Title: Executive Vice President and Secretary
<PAGE>
RESTATED CERTIFICATE OF INCORPORATION
OF
GEOSYSTEMS GLOBAL CORPORATION
A DELAWARE CORPORATION
GeoSystems Global Corporation, a corporation organized and existing under
the laws of the State of Delaware, does hereby certify:
1. The name of the corporation is GeoSystems Global Corporation (the
"Corporation"). The original Certificate of Incorporation of the Corporation was
filed with the Secretary of State of the State of Delaware on March 28, 1994,
and a Restated Certificate of Incorporation was filed with the Secretary of
State of Delaware on November 1, 1994.
2. The restatement herein set forth has been duly approved by the Board
of Directors of the Corporation and by the stockholders of the Corporation
pursuant to Section 242 of the General Corporation Law of the State of Delaware
("Delaware Law").
3. The restatement herein set forth has been duly adopted pursuant to
Section 245 of the Delaware Law. This Restated Certificate of Incorporation
restates and integrates and further amends the provisions of the Corporation's
Certificate of Incorporation as heretofore restated and amended.
4. The text of the Certificate of Incorporation is hereby restated and
amended to read in its entirety as follows:
ARTICLE I
The name of the corporation is GeoSystems Global Corporation (the
"Corporation").
ARTICLE II
The address of the Corporation's registered office in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle. The name of its registered agent at such
address is The Corporation Trust Company.
<PAGE>
ARTICLE III
The Corporation shall have perpetual existence. The nature of the
business or purposes to be conducted or promoted is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of Delaware.
ARTICLE IV
This Corporation is authorized to issue two classes of stock to be
designated, respectively, "Common Stock" and "Preferred Stock." The total number
of shares which this corporation is authorized to issue is thirty-five million
(35,000,000) shares. Twenty million (20,000,000) shares shall be designated
Common Stock, par value $0.001 per share. Fifteen million (15,000,000) shares
shall be designated Preferred Stock, par value $0.01 per share, of which six
million five hundred and fifty thousand (6,550,000) shares shall be designated
Series A Preferred Stock (the "Series A Preferred"), two million (2,000,000)
shares shall be designated Series B Preferred Stock (the "Series B Preferred")
and three million eight hundred thousand (3,800,000) shares shall be designated
Series C Preferred Stock (the "Series C Preferred") and two million six hundred
and fifty thousand (2,650,000) shares shall be undesignated as to series.
Any Preferred Stock not previously designated as to series may be
issued from time to time in one or more series pursuant to a resolution or
resolutions providing for such issue duly adopted by the Board of Directors
(authority to do so being hereby expressly vested in the Board), and such
resolution or resolutions shall also set forth the voting powers, full or
limited or none, of each such series of Preferred Stock and shall fix the
designations, preferences and relative, participating, optional or other special
rights and qualifications, limitations or restrictions of each such series of
Preferred Stock. The Board of Directors is authorized to alter the designation,
rights, preferences, privileges and restrictions granted to or imposed upon any
wholly unissued series of Preferred Stock and, within the limits and
restrictions stated in any resolution or resolutions of the Board of Directors
originally fixing the number of shares constituting any series of Preferred
Stock, to increase or decrease (but not below the number of shares of any such
series then outstanding) the number of shares of any such series subsequent to
the issue of shares of that series.
Each share of Preferred Stock issued by the Corporation, if reacquired
by the Corporation (whether by redemption, repurchase, conversion to Common
Stock or other means), shall upon such reacquisition resume the status of
authorized and unissued shares of Preferred Stock, undesignated as to series
and available for designation and issuance by the Corporation in accordance
with the immediately preceding paragraph.
-2-
<PAGE>
ARTICLE V
The preferences and relative, optional and other special rights of the
shares of Series A Preferred, and the qualifications, limitations or
restrictions thereof, are as follows:
1. DESIGNATION OF SERIES: RANK. The number of shares of Series A
---------------------------
Preferred may be increased or decreased, at any time and from time to time, by
resolution of the Board of Directors: provided that no decrease shall reduce the
number of shares of Series A Preferred to a number less than that of the shares
of such series then outstanding. The Series A Preferred shall rank senior to the
Common Stock of the Corporation and junior to the Series B Preferred and Series
C Preferred with respect to the payment of dividends and as to (i) the
distribution of assets upon liquidation, dissolution or winding up, and (ii) the
distribution of assets upon the redemption of the Series A Preferred, Series B
Preferred and Series C Preferred. Subject to the protective provisions set forth
in Section 7(b) hereof, the Board of Directors may by resolution issue and
designate additional series or classes of Preferred Stock which may rank senior
to, junior to, or on parity with the Series A Preferred with respect to the
payment of dividends, the distribution of assets upon liquidation, dissolution
or winding up, redemption rights, and the other rights, preferences and
privileges of such preferred stock.
2. DIVIDENDS AND DISTRIBUTIONS.
---------------------------
(a) Subject to the prior and superior rights of the holders of any
shares of Series B Preferred, of shares of Series C Preferred or of shares of
any other series of Preferred Stock now existing or hereafter designated ranking
senior to the shares of Series A Preferred with respect to dividends, the
holders of shares of Series A preferred, in preference to the holders of Common
Stock and any series of Preferred Stock now existing or hereafter designated
which expressly provides by its terms that it is junior to the Series A
Preferred in dividend rights, shall be entitled to receive, when and as declared
by the Board of Directors out of funds legally available therefor, an annual
cash dividend in the amount of $0.075 per share. Such dividends shall not be
cumulative, and no right shall accrue to holders of Series A Preferred by reason
of the fact that dividends on such shares are not declared or paid in any year.
(b) Notwithstanding Section 2(a) hereof, the Board of Directors of the
Corporation may not declare, and the Corporation may not pay, any dividends on
the shares of Series A Preferred unless (i) the Corporation has paid in cash all
dividends or interest (as the case may be) accrued and payable on the shares of
Series B Preferred or Convertible Debt (as defined in Article VI, Section 4(a)
hereof) (as the case may be) as of the date of the proposed dividend on the
shares of Series A Preferred and (ii) the Corporation has paid in cash a
dividend on each share of Series C Preferred as of the date of the proposed
dividend on the shares of Series A Preferred in an amount equal to the original
purchase price of the Series C Preferred multiplied by a fraction, the numerator
of which is the amount of the dividend payable on the Series A Preferred, and
the denominator of which is the original purchase price of the Series A
Preferred
-3-
<PAGE>
(subject to appropriate adjustment for all stock splits, stock dividends,
combinations and recapitalizations of Series A and Series C Preferred).
(c) Notwithstanding Section 2(a) hereof, the Corporation may at any
time, out of funds legally available therefor, repurchase shares of Common Stock
of the corporation (i) issued to or held by employees, directors or consultants
of the Corporation or its subsidiaries upon termination of their employment of
services, pursuant to an agreement providing for such right of repurchase, or
(ii) issued to or held by any person subject to the Corporation's right of first
refusal to purchase such shares where the purchase is pursuant to the exercise
of such right of first refusal, in either case whether or not dividends on the
Series A Preferred shall have been declared and paid or funds set aside
therefor.
3. VOTING RIGHTS. Except as otherwise required by law, each share of
-------------
Series A Preferred issued and outstanding shall at any time have a number of
votes equal to the number of shares of Common Stock into which such share of
Series A Preferred is then convertible pursuant to Section 5 hereof. Subject to
the foregoing, the holders of Series A Preferred shall be entitled to vote with
the holders of Common Stock on all matters submitted to a vote of stockholders
(whether at a meeting or by written consent); provided that, subject to Section
1 hereof, the Series A Preferred shall be entitled to vote as a separate series
(the affirmative vote or consent of the holders of at least a majority of the
outstanding shares of such separate series being required) or as part of a class
(together with other series of Preferred Stock) on any matter with respect to
which a series vote by the Series A Preferred or a class vote of the Preferred
Stock, as the case may be, shall be expressly required by law, and any such
class or series vote may be given in person or by proxy, either in writing
without a meeting or by vote at any meeting called for the purpose.
4. LIQUIDATION. Subject to the prior and superior rights of the holders
-----------
of any shares of Series B Preferred, of shares of Series C Preferred and of
shares of any other series of Preferred Stock now existing or hereafter
designated ranking senior to the shares of Series A Preferred with respect to
liquidation preference, in the event of any voluntary or involuntary
dissolution, liquidation or winding up of the Corporation (for the purposes of
this Section 4, a "LIQUIDATION"), before any distribution of assets shall be
made to the holders of the Common Stock or the holders of any other stock now
existing or hereafter designated that by its express terms ranks junior to the
Series A Preferred in respect of distributions upon the Liquidation of the
Corporation, the holder of each share of Series A Preferred then outstanding
shall be entitled to be paid out of the assets of the Corporation available for
distribution to its stockholders an amount in cash equal to $1.00 per share plus
all dividends declared and unpaid on such share on the date fixed for the
distribution of assets of the Corporation in liquidation to the holders of
Series A Preferred.
If upon any Liquidation the aggregate assets available for distribution to
the holders of the Series A Preferred and any other stock of the Corporation now
existing or hereafter designated ranking on parity with the Series A Preferred
upon Liquidation and which shall then be
-4-
<PAGE>
outstanding (hereinafter in this paragraph called the "TOTAL AMOUNT AVAILABLE")
shall be insufficient to pay the holders of all outstanding shares of Series A
Preferred and all such other parity stock the full amounts (including all
dividends accrued and unpaid) to which they shall be entitled by reason of such
Liquidation of the Corporation, then there shall be paid to the holder of each
share of Series A Preferred in connection with such Liquidation an amount equal
to the product derived by multiplying the Total Amount Available times a
fraction, the numerator of which shall be the full amount to which such share of
Series A Preferred shall be entitled under the terms of the preceding paragraph
by reason of such Liquidation and the denominator of which shall be the total
amount which would have been distributed by reason of such Liquidation with
respect to all Series A Preferred and other stock ranking on a parity with the
Series A Preferred then outstanding upon a Liquidation had the Corporation
possessed sufficient assets to pay the maximum amount which the holders of all
such stock would be entitled to receive in connection with such Liquidation.
The voluntary sale, conveyance, lease, exchange or transfer of all or
substantially all the property or assets of the Corporation, or the merger or
consolidation of the Corporation into or with any other corporation, or the
merger of any other corporation into the Corporation, or any purchase or
redemption of some or all of the shares of any class or series of stock of the
Corporation, shall not be deemed to be a Liquidation of the Corporation for the
purposes of this Section 4.
The holder of any shares of Series A Preferred shall not be entitled to
receive any payment owed for such shares under this Section 4 until such holder
shall cause to be delivered to the Corporation (i) the certificate(s)
representing such shares and (ii) transfer instrument(s) satisfactory to the
Corporation and sufficient to surrender such shares to the Corporation free of
any adverse interest.
After payment of the full amount of the liquidating distribution to which
any holder of Series A Preferred is entitled, the holder of such share or shares
will not be entitled to any further participation in any distribution of assets
by the Corporation.
5. CONVERSION RIGHTS.
-----------------
(a) Optional Conversion into Common Stock. The holder of any share
-------------------------------------
of Series A Preferred shall have the right, at such holder's option, at any time
to convert such share into that number of shares of fully paid and nonassessable
whole shares of Common obtained by dividing $1.00 by the Series A Conversion
Price then in effect. The Series A Conversion Price shall initially be $1.00 per
share, and shall be subject to adjustment as set forth below.
(b) Automatic Conversion. Each share of Series A Preferred shall
--------------------
automatically convert into shares of fully paid and nonassessable Common Stock,
without any further action required on the part of the holder thereof, either
(i) immediately prior to the closing of the Corporation's initial underwritten
public offering pursuant to a Registration Statement filed with
-5-
<PAGE>
and declared effective by the Securities and Exchange Commission under the
Securities Act of 1933, as amended, and having an aggregate offering price to
the public of not less than $15,000,000 (a "Qualified Public Offering") or (ii)
upon the affirmative vote of the holders of at least two-thirds (2/3) of the
then outstanding shares of Series A Preferred, whichever is earlier. The number
of shares of Common Stock issuable upon such automatic conversion of any such
share shall be equal to the number obtained by dividing $1.00 by the Series A
Conversion Price then in effect.
(c) Procedure for Conversion. To exercise the conversion privilege set
------------------------
forth in Section 5(a) hereof, the holder of shares of Series A Preferred shall
surrender the shares to be converted, accompanied by instruments of transfer
satisfactory to the Corporation and sufficient to transfer the shares being
converted to the Corporation free of any adverse interest, at the principal
offices of the Corporation or any of the offices or agencies maintained for such
purpose by the Corporation ("Conversion Agent") and shall give written notice
(by registered or certified mail, overnight courier or hand delivery) to the
Corporation at such Conversion Agent that the holder elects to convert such
shares. Such notice shall state whether and to what extent the shares so
surrendered for conversion shall be converted into shares of Common Stock, and
shall also state the name or names, together with address or addresses, in which
the certificate or certificates for Common Stock issuable on such conversion
shall be issued. As promptly as practicable after the surrender of such shares
of Series A Preferred as aforesaid, the Corporation shall issue and deliver at
such Conversion Agent to such holder, or on such holder's written order, a
certificate or certificates for the number of full shares of Common Stock
issuable upon the conversion of such shares in accordance with the provisions
hereof. Certificates will be issued for the balance of the shares of Series A
Preferred in any case in which fewer than all of the shares of Series A
Preferred are converted.
Each conversion pursuant to Section 5(a) hereof shall be deemed to
have been effected immediately prior to the close of business on the date on
which the shares of Series A Preferred shall have been so surrendered and such
notice shall have been received by the Corporation as aforesaid. Each conversion
pursuant to Section 5(b) hereof shall be deemed to have been effected,
automatically and with no further required action on die part of the holder of
the shares as converted, immediately prior to (but contingent upon) the closing
of the sale of shares pursuant to the Qualified Public Offering. In each such
case, the person or persons in whose name or names any certificate or
certificates for shares of Common Stock shall be issuable upon such conversion
shall be deemed to have become the holder or holders of record of the Common
Stock represented thereby at the effective date of such conversion, unless the
stock transfer books of the Corporation shall be closed on such date, in which
event such conversion shall be deemed to have been effected immediately prior to
the open of business on the next succeeding day on which such stock transfer
books are open, and such person or persons shall be deemed to have become such
holder or holders of record of the Common Stock at the open of business on such
later day. In each such case, the conversion shall be at the Conversion Price in
effect on the effective date of the conversion as determined above. No payment
or adjustment shall be made on conversion for any dividends payable on the
Common Stock delivered on
-6-
<PAGE>
conversion. Effective as of any such conversion, the Corporation shall be
excused from paying any dividends on the shares converted, except for any
dividends accrued (whether or not earned or declared) and unpaid through the day
of conversion.
No fractional interest in a share of Common Stock shall be deliverable upon
the conversion of any share or shares of Series A Preferred, and the number of
shares of Common Stock issuable upon any such conversion shall be rounded down
to the nearest whole share. If more than one certificate representing shares of
Series A Preferred is to be converted at one time by the same holder into Common
Stock, the number of full shares of Common Stock issuable upon conversion
thereof shall be computed on the basis of the aggregate number of shares of
Series A Preferred represented by such certificates, or the specified portions
thereof to be converted.
(d) Adjustment of Conversion Price. The Conversion Price shall be
------------------------------
adjusted from time to time in respect of any of the following events occurring
on or after the date upon which a share of Series A Preferred is first issued
(the "ORIGINAL ISSUE DATE" of the Series A Preferred), as follows:
(i) Dividends and Distributions. In case the Corporation shall
---------------------------
pay or make a dividend or other distribution upon its Common Stock payable in
Common Stock, the Conversion Price in effect at the opening of business on the
day following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced by multiplying
such Conversion Price by a fraction, of which the numerator shall be the number
of shares of Common Stock outstanding at the close of business on the date fixed
for such determination and the denominator shall be the sum of such number of
shares and the total number of shares constituting such dividend or other
distribution, such reduction to become effective immediately after the opening
of business on the day following the date fixed for such determination. For the
purposes of this paragraph (i), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Corporation.
The Corporation will not pay any dividend or make any distribution on shares of
Common Stock held in the treasury of the Corporation.
(ii) Subdivisions and Combinations. In case the outstanding
-----------------------------
shares of Common Stock shall each be subdivided into a greater number of shares
of Common Stock (other than any such subdivision which is effected pursuant to a
dividend or distribution for which adjustment to the Conversion Price is made
under paragraph (i) above), the Conversion Price in effect at the opening of
business on the day following the day upon which such subdivision becomes
effective shall be proportionately reduced and, conversely, in case the
outstanding shares of Common Stock shall each be combined into a smaller number
of shares of Common Stock, the Conversion Price in effect at the opening of
business on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or increase, as the
case may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination becomes
effective.
-7-
<PAGE>
(iii) Distributions other than Cash Dividends. In case the
---------------------------------------
Corporation shall declare a cash dividend upon its Common Stock payable
otherwise than out of retained earnings or shall distribute to holders of its
Common Stock shares of its capital stock (other than Common Stock), stock or
other securities of other persons, evidences of indebtedness issued by the
Corporation or other persons, assets (excluding cash dividends out of retained
earnings) or options or rights (excluding options to purchase and rights to
subscribe for Common Stock or other securities of the Corporation convertible
into or exchangeable for Common Stock), then, in each such case, the holders of
shares of Series A Preferred shall, concurrently with the distribution to
holders of Common Stock, receive a like distribution based upon the number of
shares of Common Stock into which such shares of Series A Preferred shall then
be convertible.
(iv) Reclassifications. In case of any capital reorganization
-----------------
or reclassification of the stock of the Corporation (other than any transaction
described in paragraph (i), (ii) or (iii) hereof), of the consolidation or
merger of the Corporation with or into another person (other than a
consolidation or merger in which the Corporation is the continuing entity and
which does not result in any change in the Common Stock), the shares of the
Series A Preferred shall, after such reorganization, reclassification,
consolidation or merger, be convertible into the kind and number of shares of
stock or other securities or property of the Corporation or otherwise to which
the holder thereof would have been entitled if immediately prior to such
reorganization, reclassification, consolidation, or merger the holder had
converted the holder's shares of the Series A Preferred into Common Stock.
(v) Tax Adjustments. The Corporation may in its sole
---------------
discretion make such reductions in the Conversion Price, in addition to those
required by paragraphs (i), (ii), (iii) and (iv) above, as it considers to be
advisable in order that any event treated for Federal income tax purposes as a
dividend of stock or stock rights shall not be taxable to the recipient.
(vi) Reservation of Shares. the Corporation shall at all times
---------------------
reserve and keep available, free from preemptive fights, out of its authorized
but unissued Common Stock, for the purpose of issuance upon conversion of the
Series A Preferred, the maximum number of shares of Common Stock then
deliverable upon the conversion of all shares of Series A Preferred then
outstanding. All common Stock issued upon conversion of the Series A Preferred
shall be newly issued and, when issued, shall be duly authorized, validly
issued, fully paid and nonassessable, and free and clear of any liens or
encumbrances.
6. NOTICES OF RECORD DATE. In the event of any taking by the Corporation
----------------------
of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend (other
than a cash dividend) or other distribution, any right to subscribe for,
purchase or otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any other right, the Corporation shall
mail to each holder of Series A Preferred, at least fifteen (15) days prior to
the date specified therein, a notice specifying the date on which any such
record is to be taken for the purpose of such dividend, distribution or right,
and the amount and character of such dividend, distribution or right.
-8-
<PAGE>
7. PROTECTIVE PROVISIONS. So long as any shares of Series A Preferred
---------------------
are outstanding, this Corporation shall not, without first obtaining the
approval (by vote or written consent, as provided by law) of the holders of at
least a majority of the then outstanding shares of Series A Preferred voting
together as a class:
(a) amend or repeal any provision of, or add any provision to, this
Corporation's Restated Certificate of Incorporation if such action would
adversely alter or change the preferences, rights, privileges or powers of, or
the restrictions provided for the benefit of, the Series A Preferred; or
(b) authorize or issue shares of any class of stock (other than the
Series B Preferred issued as dividends as described in Article VI hereof) having
any preference or priority as to dividend, redemption or liquidation preferences
which is superior to any such preference or priority of the Series A Preferred.
8. REDEMPTION RIGHTS.
-----------------
(a) Holder Redemption. Subject to the prior and superior rights of
-----------------
the holders of the shares of Series B Preferred and shares of Series C
Preferred, upon written notice at least one hundred twenty (120) days prior to
December 31 of any calendar year from, and including, the year 2002, by the
holders of at least two-thirds (2/3) of the then outstanding shares of Series A
Preferred (a "Holder Election"), the Corporation shall be required to redeem all
of the issued, outstanding and nonredeemed shares of Series A Preferred held by
each holder of Series A Preferred (a "Holder Redemption"), at a redemption price
per share (the "Redemption Price") of $1.00 plus an amount equal to all declared
but unpaid dividends on the Series A Preferred. In the event of any such Holder
Election, the Corporation shall, out of and only to the extent of funds legally
available therefor, redeem (i) on the December 31 following such Holder
Election, one-third of the number of shares of Series A Preferred then issued
and outstanding; (ii) on the second December 31 following such Holder Election,
one-half of the number of shares of Series A Preferred then issued and
outstanding; and (iii) on the third December 31 following such Holder Election,
all of the shares of Series A Preferred then issues and outstanding. the
Redemption Price payable upon any Holder Redemption shall be paid in cash, to
the extent of funds legally available therefor.
(b) In the event that the Corporation does no have legally available
funds sufficient to pay in full the Redemption Price with respect to each share
of Series A Preferred being redeemed pursuant to this Section 8 ("REDEEMED
SHARES"), the corporation shall redeem the shares of Series A Preferred
otherwise scheduled for redemption pro rata among the holders of the Series A
Preferred then outstanding, based on the number of shares then held by each
holder of Series A Preferred.
(c) Payment of Redemption Price. In the case of any Holder
---------------------------
Redemption pursuant to Section 4(a), the Corporation shall pay the Redemption
Price in cash.
-9-
<PAGE>
(d) Mechanics of Redemption.
-----------------------
(i) Notice of any Holder Redemption of the Series A Preferred
shall be mailed at least thirty (30), but not more than sixty (60), calendar
days prior to each December 31 redemption date (each, a "Holder Redemption
Date"), to each holder of Series A Preferred to be redeemed at such holder's
address as it appears on the books of the Corporation. To facilitate the
redemption of the Series A Preferred, the Board of Directors may fix a record
date for the determination of the holders of shares of Series A Preferred to be
redeemed on each Holder Redemption Date, which date shall be not more than sixty
(60), nor less than ten (10) calendar days prior to the respective Holder
Redemption Date.
(ii) The holder of any shares of Series A Preferred redeemed
pursuant to this Section 8 shall not be entitled to receive payment of the
Redemption Price for such shares until such holder shall cause to be delivered
to the place specified in the Corporation's notice of redemption (i) the
certificates representing the shares of Series A Preferred to be redeemed and
(ii) appropriate endorsements and transfer documents sufficient to transfer such
shares of Series A Preferred to the Corporation free of any adverse interest.
In the event the redemption amount payable on any redeemed share of Series A
Preferred is not paid in full within fifteen (15) business days after the Holder
Redemption Date as provided herein, then the unpaid portion of the Redemption
Price of such share shall bear interest at a rate of 12% per annum, commencing
at the close of business on the Holder Redemption Date and continuing until the
redemption price on such share is paid in full. Interest shall be computed on
the basis of a three hundred sixty-five (365) day year and shall be payable on
demand.
(iii) In the event of any redemption, then upon the Holder
Redemption Date and if all funds necessary for such redemption shall have been
paid in cash or set aside by the Corporation separate and apart from its other
funds in trust for the pro rata benefit of the holders of the shares called for
redemption, so as to be and continue to be available therefor, then the shares
so called for redemption shall no longer be deemed outstanding, the rights to
receive dividends thereon shall cease to accrue from and after the applicable
Holder Redemption Date, and all rights of the holders of the shares of Series A
Preferred called for redemption shall cease and terminate, excepting only the
right to receive the Redemption Price therefor (including any accrued and unpaid
dividends, whether or not earned or declared, to the Holder Redemption Date if
such price has not already been paid, without interest except as provided in
Section 4(d)(ii) hereof.
(e) Conversion Rights. Nothing contained in this Section 8 shall in
-----------------
any way restrict or prohibit the holders of the Series A Preferred from
exercising their conversion rights pursuant to Section 5 hereof prior to the
redemption of any shares hereunder.
(f) Priority on Redemption. The redemption rights of the shares of
----------------------
Series A Preferred are subject to the prior and superior rights of the holders
of any shares of Series B Preferred and Series C Preferred. Accordingly, if on
any applicable Holder Redemption Date,
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<PAGE>
any shares of Series B Preferred or Series C Preferred remain outstanding, the
holders of the Series B Preferred and Series C Preferred shall be entitled to
have all of their shares redeemed prior to the redemption of any shares of
Series A Preferred. Upon its receipt of a Holder Election under this Section 8,
the Corporation shall promptly provide a copy of such Holder Election to the
holders of the Series B Preferred and Series C Preferred.
ARTICLE VI
The preferences and relative, optional and other special rights of the
shares of Series B Preferred, and the qualifications, limitations or
restrictions thereof, are as follows:
1. DESIGNATION OF SERIES: RANK. The number of shares of Series B
---------------------------
Preferred may be increased or decreased, at any time and from time to time, by
resolution of the Board of Directors; provided that no decrease shall reduce the
number of shares of Series B Preferred to a number less than that of the shares
of such series then outstanding. The Series B Preferred shall rank senior to the
Common Stock and the Series A Preferred with respect to the payment of dividends
and as to the distribution of assets upon liquidation, dissolution or winding
up. The Series B Preferred shall rank senior to the Series C Preferred as to the
payment of dividends and junior to the Series C Preferred as to (i) the
distribution of assets upon liquidation, dissolution or winding up, and (ii) the
distribution of assets upon the redemption of the Series B Preferred and Series
C Preferred. Subject to the protective provisions set forth in Section 7(b)
hereof, the Board of Directors may by resolution issue and designate additional
series or classes of Preferred Stock which may rank senior to, junior to, or on
parity with the Series B Preferred with respect to the payment of dividends, the
distribution of assets upon liquidation, dissolution or winding up, redemption
rights, and the other rights, preferences and privileges of such preferred
stock.
2. DIVIDENDS AND DISTRIBUTIONS.
---------------------------
(A) Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking senior to the shares of Series B
Preferred with respect to dividends, the holders of shares of Series B
Preferred, in preference to the holders of Common Stock, Series A Preferred,
Series C Preferred and any other series of Preferred Stock now existing or
hereafter designated which expressly provides by its terms that it is junior to
the Series B Preferred in dividend rights, shall be entitled to receive, when
and as declared by the Board of Directors out of funds legally available
therefor, semiannual dividends payable as hereinafter provided.
Dividends shall begin to accrue with respect to any share of Series B Preferred
commencing on the date that such share is first issued (the "Original Issue
Date") and shall accumulate (whether or not earned or declared) and be payable
on September 30 and March 31 of each year, beginning on March 31, 1995, or, if
any such day is not a business day of the Corporation, on the next succeeding
business day (each such payment date being referred to herein as a "Dividend
Payment date"), at an annual rate of $0.46125 per share of Series B Preferred
Stock until December 31, 1997 and, thereafter, at an annual rate of $0.39975 per
share of Series B preferred Stock, in each case, calculated on the basis of a
year of three hundred sixty-five (365)
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<PAGE>
days. The amount of dividends payable per share for each full semi-annual
dividend period shall be computed by dividing by two the applicable annual rate
of $0.46125 or $0.39975 (rounding the amount payable to any holder of Series B
Preferred, after aggregating amounts payable on all shares of Series B Preferred
held by such holder, to the nearest cent). If less than six (6) months shall
have elapsed from the Original Issue Date of any share or shares of Series B
Preferred to the first Dividend Payment Date after such issuance, the dividends
payable on such Dividend Payment Date shall be the amount payable on each
subsequent Dividend Payment Date multiplied by a fraction, the numerator of
which is the number of days from the Original Issue Date of such share or shares
of the Series B Preferred Stock to such first Dividend Payment Date and the
denominator of which is 182.5. Any dividend (whether or not earned or declared)
not paid in full within fifteen (15) days following the relevant Dividend
Payment Date shall bear interest at the rate of 7.5% per annum with respect to
dividends payable on or prior to December 31, 1997, and 6.5% per annum with
respect to dividends payable after December 31, 1997, calculated as provided
above, commencing at the close of business on such Dividend Payment Date and
continuing until such dividend is paid in full. Any such unpaid interest shall
be payable upon payment of the delinquent dividend or thirty (30) days following
any written demand from the holder for payment thereof. Dividends paid on shares
of Series B Preferred Stock in an amount less than the total amount of such
dividends at the time accumulated and payable on the Series B Preferred shall be
allocated pro rata on a share-by-share basis among all shares of Series B
Preferred at the time outstanding. The Board of Directors may fix a record date
for the determination of holders of shares of Series B Preferred entitled to
receive payment of a dividend or distribution declared thereon, which record
date shall be no more than sixty (60) nor less than ten (10) calendar days prior
to the respective Dividend Payment Date.
(b) Any dividend on shares of Series B Preferred shall be payable in
cash or a combination of cash and shares of Series B Preferred, such form of
payment to be determined at the Corporation's election and in its sole
discretion, provided that not less than 13.33% of the dividend payable in any
period on or prior to December 31, 1997 shall be payable in cash. The number of
shares of Series B Preferred so to be issued, if any, shall be computed by
dividing the dollar amount of the dividend to be paid in shares of Series B
Preferred (as determined above) by the amount of six dollars and fifteen cents
($6.15) per share. Any dividends on the Series B Preferred paid in Series B
Preferred shall be paid to any holder only in whole shares of Series B
Preferred, and any fraction shall be paid in cash. The respective portions of
any dividend payable in each of cash and shares of Series B Preferred shall be
distributed pro rata among all holders of Series B Preferred based on each
Holder's respective ownership of Series B Preferred.
(c) If a dividend (whether or not earned or declared) or any
redemption or repurchase payment upon any shares of Series B Preferred (or any
interest thereon), or any other outstanding Preferred Stock of the Corporation
ranking on a parity with the Series B Preferred as to dividends, is in arrears,
then no dividend or other distribution may be declared and no redemption or
repurchase payment may be made (and no interest thereon may be paid) on any such
shares (other than dividends or payments made in stock of the Corporation
ranking junior to the Series B Preferred as to dividends, upon liquidation,
dissolution and winding up and
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<PAGE>
redemption ("Junior Stock")) unless amounts are paid or distributed in respect
of all such arrearages pro rata, so that (i) the amounts so paid or distributed
per share of each such series bear to each other the same ratio that the amounts
in arrears per share of each such series (i.e., the Series B Preferred and any
other outstanding series of Preferred Stock of the Corporation ranking in parity
with the Series B Preferred) bear to each other and (ii) the percentage of each
such amount in arrears which is paid in cash per share of Series B Preferred is
no lower than the percentage of the amount in arrears which is paid or
distributed in cash per share of any such other series. So long as any shares of
Series B Preferred remain outstanding, no dividend shall be paid or declared and
no distribution made on any stock of the Corporation ranking junior to the
Series B Preferred as to dividends or upon liquidation, dissolution or winding
up (other than a dividend payable in Junior Stock), and no shares of stock of
the Corporation ranking junior to the Series B Preferred as to dividends or upon
liquidation, dissolution or winding up or upon redemption or repurchase shall be
purchased, redeemed or otherwise acquired for consideration by the Corporation,
directly or indirectly (other than as a result of a reclassification of Junior
Stock, or the exchange or conversion of one Junior Stock for or into another
Junior Stock, or other than through the use of the proceeds of a substantially
contemporaneous sale of other Junior Stock), unless in each case (i) all
dividends (whether or not earned or declared) on the Series B Preferred then
accrued and in arrears for all past dividend periods (and any interest thereon)
are first paid in full and the full dividend thereon for the then-current
dividend period is paid or declared and set apart for payment and (ii) the
Corporation first pays in full all amounts then due and payable in connection
with any matured redemption obligation on the Series B Preferred or, with
respect to amounts to be paid in cash, sets aside such payable amounts separate
and apart from its other funds, in trust for the pro rata benefit of the holders
of the shares subject to such redemption so as to continue to be available
therefor. Subject to the foregoing, and not otherwise, such dividends (payable
in cash, stock or otherwise) as may be determined by the Board of Directors may
be declared and paid on any Junior Stock, or shares of Junior Stock may be
purchased, redeemed or otherwise acquired for consideration by the Corporation,
from time to time out of any funds legally available therefor, and the Series B
Preferred shall not be entitled to participate in any such dividend, purchase,
redemption or other acquisition, whether payable in cash, stock or otherwise.
(d) Notwithstanding Section 2(c) hereof, the Corporation may at any
time, out of funds legally available therefor, (x) repurchase shares of Common
Stock of the Corporation (i) issued to or held by employees, directors or
consultants of the Corporation or its subsidiaries upon termination of their
employment of services, pursuant to an agreement providing for such right of
repurchase, or (ii) issued to or held by any person subject to the Corporation's
right of first refusal to purchase such shares where the purchase is pursuant to
the exercise of such right of first refusal, (y) repurchase the Series C
Preferred in accordance with Section 3.2(b) of the Series C Convertible
Preferred Stock Purchase Agreement dated as of July 17, 1997, and (z) redeem the
Series C Preferred in accordance with Section 8 of Article VIII of this
Certificate of Incorporation, in any case whether or not dividends on the Series
B Preferred shall have been declared and paid or funds set aside therefor.
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<PAGE>
3. VOTING RIGHTS. The holders of Series B Preferred shall have no right
-------------
by virtue of their ownership of such shares to vote in the election of directors
of the Corporation and shall have no other voting rights except as expressly
required by law. Any vote expressly required by law may be given in person or by
proxy, either in writing without a meeting or by vote at any meeting called for
the purpose.
4. REDEMPTION RIGHTS.
-----------------
(a) Optional Redemption. Subject to the prior written consent of the
-------------------
holders of a majority of the shares of Series C Preferred then issued and
outstanding, the Corporation may, at its sole option and election, redeem (an
"OPTIONAL REDEMPTION") the Series B Preferred, in whole or in part, at any time
and from time to time, at a redemption price per share (the "REDEMPTION PRICE")
of six dollars and fifteen cents ($6.15) plus an amount equal to all dividends
(whether or not earned or declared ) accrued and unpaid thereon to the
redemption date. The Redemption Price payable upon any Optional Redemption may
be paid in cash, the issue of convertible debentures on the terms provided
herein ("Convertible Debt") or any combination of cash and Convertible Debt, at
the election of the Corporation in its sole discretion, pursuant to Section 4(e)
hereof, provided that any such amounts payable in cash shall be paid only to the
extent of funds legally available therefor.
(b) Holder Redemption. Subject to the prior and superior rights of
-----------------
the holders of the shares of Series C Preferred, upon written notice at least
one hundred twenty (120) days prior to December 31 of any calendar year from,
and including the year 2002, by the holders of at least two-thirds (2/3) of the
then outstanding shares of Series B Preferred (a "Holder Election"), the
Corporation shall be required to redeem, to the extent that such shares have not
already been redeemed pursuant to paragraph (a) above, all of the issued,
outstanding and nonredeemed shares of Series B Preferred held by each holder of
Series B Preferred (a "Holder Redemption"), at a price per share equal to the
Redemption Price. In the event of any such Holder Election, the Corporation
shall, out of and only to the extent of funds legally available therefor, redeem
(i) on the December 31 following such Holder Election, one-third of the number
of shares of Series B Preferred then issued and outstanding; (ii) on the second
December 31 following such Holder Election, one-half of the number of shares of
Series B Preferred then issued and outstanding; and (iii) on the third December
31 following such Holder Election, all of the shares of Series B Preferred then
issued and outstanding. The Redemption Price payable upon any Holder Redemption
shall be paid in cash, to the extent of funds legally available therefor.
(c) Redemption to be Effected Pro Rata. If, in the case of an
----------------------------------
Optional Redemption pursuant to Section 4(a) hereof, less than all of the Series
B Preferred at the time outstanding is to be redeemed, then the shares so to be
redeemed shall be redeemed pro rata among the holders of the Series B Preferred
based on the total number of shares of Series B Preferred then held.
-14-
<PAGE>
(d) In the event that the Corporation does not have legally available
funds sufficient to pay in full the Redemption Price with respect to each share
of Series B Preferred being redeemed pursuant to this Section 4 ("REDEEMED
SHARES"), the Corporation shall redeem the shares of Series B Preferred
otherwise scheduled for redemption pro rata among the holders of Series B
Preferred then outstanding , based on the number of shares then held by each
holder of Series B Preferred.
(e) Payment of Redemption Price. In the case of any Optional
---------------------------
Redemption pursuant to Section 4(a), the Corporation may pay the Redemption
Price in cash, Convertible Debt, or any combination thereof, at the election of
the Corporation in its sole discretion. In the case of any Holder Redemption
pursuant to section 4(b), the Corporation shall pay the Redemption Price in
cash. If the Corporation elects to pay any part of the Redemption Price of an
Optional Redemption in some combination of cash and Convertible Debt, the
respective portions of such Redemption Price payable in each such form of
consideration shall be distributed pro ram among all holders of Series B
Preferred being redeemed based on each such Holder's respective ownership of the
Series B Preferred being redeemed. The aggregate face value of Convertible Debt
issuable upon such redemption shall be equal to the aggregate dollar amount of
the Redemption Price payable in Convertible Debt. Convertible Debt shall bear
interest at a rate of 7.5% per annum until December 31, 1997 and, thereafter, at
a rate of 6.5% per annum, shall be subordinate in right of payment to all debt
to financial institutions for money borrowed, shall be payable upon demand at
any time after September 30, 2002, and shall be evidenced by subordinated
debentures in substantially the form attached as Exhibit A to this Restated
Certificate of Incorporation (with such changes thereto as may be agreed by the
Company and holders of a majority of the shares of Series B Preferred then
outstanding).
(f) Mechanics of Redemption.
-----------------------
(i) Notice of any Optional Redemption of the Series B Preferred
shall be mailed at least thirty (30), but not more than sixty (60), calendar
days prior to the date fixed for redemption (the "Optional Redemption Date"), to
each holder of Series B Preferred to be redeemed at such holder's address as it
appears on the books of the Corporation. To facilitate the redemption of the
Series B Preferred, the Board of Directors may fix a record date for the
determination of holders of shares of Series B Preferred to be redeemed, which
date shall not be more than sixty (60) nor less than ten (10) calendar days
prior to the Optional Redemption Date.
(ii) Notice of any Holder Redemption of the Series B Preferred
shall be mailed at least thirty (30), but not more than sixty (60), calendar
days prior to each December 31 redemption date (each, a "Holder Redemption
Date"), to each holder of Series B Preferred to be redeemed at such holder's
address as it appears on the books of the Corporation. To facilitate the
redemption of the Series B Preferred, the Board of Directors may fix a record
date for the determination of the holders of shares of Series B preferred to be
redeemed on each Holder Redemption Date, which date shall be not more than sixty
(60), nor less than ten (10) calendar days prior to the respective Holder
Redemption Date.
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<PAGE>
(iii) The holder of any shares of Series B Preferred redeemed
pursuant to this Section 4 shall not be entitled to receive payment of the
Redemption Price for such shares until such holder shall cause to be delivered
to the place specified in the Corporation's notice of redemption (i) the
certificates representing the shares of Series B Preferred to be redeemed and
(ii) appropriate endorsements and transfer documents sufficient to transfer such
shares of Series B Preferred to the Corporation free of any adverse interest. In
the event the redemption amount payable on any redeemed share of Series B
Preferred is not paid in full within fifteen (15) business days after the
Optional Redemption Date or Holder Redemption Date (as applicable) as provided
herein, then the unpaid portion of the Redemption Price of such share shall bear
interest at a rate of 12% per annum, commencing at the close of business on the
Optional Redemption Date or Holder Redemption Date (as applicable) and
continuing until the redemption price on such share is paid in full. Interest
shall be computed on the basis of a three hundred sixty-five (365) day year and
shall be payable on demand.
(iv) In the event of any redemption, then upon the Optional
Redemption Date or Holder Redemption Date and if all funds necessary for such
redemption shall have been paid (either in cash, Convertible Debt (as
applicable), or some combination thereof (as applicable)) or set aside by the
Corporation separate and apart from its other funds in trust for the pro rata
benefit of the holders of the shares called for redemption, so as to be and
continue to be available therefor, then the shares so called for redemption
shall no longer be deemed outstanding, the rights to receive dividends thereon
shall cease to accrue from and after the applicable Optional Redemption Date or
Holder Redemption Date, and all rights of the holders of the shares of Series B
Preferred called for redemption shall cease and terminate, excepting only the
right to receive the Redemption Price therefor (including any accrued and unpaid
dividends, whether or not earned or declared, to the Optional Redemption Date or
Holder Redemption Date (as the case may be)) if such price has not already been
paid, without interest except as provided in Section 4(f)(iii) hereof.
(g) Priority on Redemption. The redemption rights of the shares of
----------------------
Series B Preferred are subject to the prior and superior rights of the holders
of any shares of Series C Preferred. Accordingly, if on any applicable Holder
Redemption Date, any shares of Series C Preferred remain outstanding, the
holders of the Series C Preferred shall be entitled to have all of their shares
redeemed prior to the redemption of any shares of Series B Preferred. Upon its
receipt of a Holder Election under this Section 4, the Corporation shall
promptly provide a copy of such Holder Election to the holders of the Series C
Preferred.
5. LIQUIDATION. Subject to the prior and superior rights of the holders
-----------
of any shares of Series C Preferred and of shares of any other series of
Preferred Stock now existing or hereafter designated ranking senior to the
shares of Series B Preferred with respect to liquidation preference, in the
event of any voluntary or involuntary dissolution, liquidation or winding up of
the Corporation (for the purposes of this Section 5, a "LIQUIDATION"), before
any distribution of assets shall be made to the holders of the Common Stock,
Series A Preferred Stock or any other series of Preferred Stock now existing or
hereafter designated that by its express terms ranks
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<PAGE>
junior to the Series B Preferred in respect of distributions upon the
Liquidation of the Corporation, the holder of each share of Series B Preferred
then outstanding shall be entitled to be paid out of the assets of the
Corporation available for distribution to its stockholders an amount in cash
equal to $6.15 per share plus all dividends (whether or not earned or
declared) accrued and unpaid on such share to the date fixed for the
distribution of assets of the Corporation in liquidation to the holders of
Series B Preferred.
If upon any Liquidation the aggregate assets available for distribution to
the holders of the Series B Preferred and any other stock of the Corporation now
existing or hereafter designated ranking on parity with the Series B Preferred
upon Liquidation and which shall then be outstanding (hereinafter in this
paragraph called the "TOTAL AMOUNT AVAILABLE") shall be insufficient to pay to
the holders of all outstanding shares of Series B Preferred and all such other
parity stock the full amounts (including all dividends accrued and unpaid) to
which they shall be entitled by reason of such Liquidation of the Corporation,
then there shall be paid to the holder of each share of Series B Preferred in
connection with such Liquidation an amount equal to the product derived by
multiplying the Total Amount Available times a fraction, the numerator of which
shall be the full amount to which such share of Series B Preferred shall be
entitled under the terms of the preceding paragraph by reason of such
Liquidation and the denominator of which shall be the total amount wich would
have been distributed by reason of such Liquidation with respect to all Series B
Preferred and other stock ranking on a parity with the Series B Preferred then
outstanding upon a Liquidation had the Corporation possessed sufficient assets
to pay the maximum amount which the holders of all such stock would be entitled
to receive in connection with such Liquidation.
The voluntary sale, conveyance, lease, exchange or transfer of all or
substantially all the property or assets of the Corporation, or the merger or
consolidation of the Corporation into or with any other corporation, or the
merger of any other corporation into the Corporation (other than any such sale,
conveyance, lease, exchange or transfer of all or substantially all the property
or assets of the Corporation, merger or consolidation, following which the
stockholders of the Corporation prior to the transaction retain a majority of
the voting securities of the surviving or successor corporation and the holders
of Series B Preferred receive in the transaction a security of the surviving or
successor corporation having rights, preferences, and privileges substantially
similar to the rights, preferences and privileges of the Series B Preferred),
shall, at the option of the holders of a majority of the outstanding shares of
Series B Preferred, be deemed to be a Liquidation of the Corporation for the
purposes of this Section 5.
The holder of any shares of Series B Preferred shall not be entitled to
receive any payment owed for such shares under this Section 5 until such holder
shall cause to be delivered to the Corporation (i) the certificate(s)
representing such shares and (i) transfer instrument(s) satisfactory to the
Corporation and sufficient to surrender such shares to the Corporation free of
any adverse interest.
-17-
<PAGE>
After payment of the full amount of the liquidating distribution to which
any holder of Series B Preferred is entitled, the holder of such share or shares
will not be entitled to any further participation in any distribution of assets
by the Corporation.
6. CONVERSION RIGHTS. The Series B Preferred shall have no conversion
-----------------
rights.
7. PROTECTIVE PROVISIONS. So long as any shares of Series B Preferred
---------------------
are outstanding, this Corporation shall not, without first obtaining the
approval (by vote or written consent, as provided by law) of the holders of at
least a majority of the then outstanding shares of Series B Preferred voting
together as a class:
(a) amend or repeal any provision of, or add any provision to this
Corporation's Restated Certificate of Incorporation if such action would
adversely alter or change the preferences, rights, privileges or powers of, or
the restrictions provided for the benefit of, the Series B Preferred;
(b) authorize or issue shares of any class of stock (other than the
Series B Preferred issued as dividends as described in this Article VI) having
any preference or priority as to dividend, redemption or liquidation preferences
which is superior or equal to any such preferences or priority of shares of
Series B Preferred; or
(c) repurchase any outstanding shares of Series A Preferred or Common
Stock, except pursuant to any repurchase agreements between the Company and any
employee, consultant or director which provide for the repurchase by the Company
of shares held by such person upon termination of services to the Corporation.
8. NOTICES OF RECORD DATE. In the event of any taking by the Corporation
----------------------
of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend (other
that a cash dividend) other distribution, any right to subscribe for, purchase
or otherwise acquire any shares of stock of any class or any other securities or
property, or to receive any other right, the Corporation shall mail to each
holder of Series B Preferred, at least fifteen (15) days prior to the date
specified therein, a notice specifying the date on which any such record is to
be taken for the purpose of such dividend, distribution or right, and the amount
and character of such dividend, distribution or right.
ARTICLE VII
The preferences and relative, optional and other special rights of the
shares of Series C Preferred, and the qualifications, limitations or
restrictions thereof, are as follows:
1. DESIGNATION OF SERIES: RANK. The number of shares of Series C
---------------------------
Preferred may be increased or decreased, at any time and from time to time, by
resolution of the Board of Directors; provided that no decrease shall reduce the
number of shares of Series C Preferred to
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<PAGE>
a number less than that of the shares of such series then outstanding. The
Series C Preferred shall rank senior to the Common Stock of the Corporation, the
Series A Preferred and Series B Preferred as to the distribution of assets upon
liquidation, dissolution or winding up and upon redemption and shall rank senior
to the Common Stock of the Corporation and the Series A Preferred with respect
to the payment of dividends. The Series C Preferred shall rank junior to the
Series B Preferred with respect to the payment of dividends. Subject to the
protective provisions set forth in Section 7(b) hereof, the Board of Directors
may by resolution issue and designate additional series or classes of Preferred
Stock which may rank senior to, junior to, or on parity with the Series C
Preferred with respect to the payment of dividends, the distribution of assets
upon liquidation, dissolution or winding up, redemption rights, and the other
rights, preferences and privileges of such preferred stock.
2. DIVIDENDS AND DISTRIBUTIONS.
---------------------------
(a) Subject to the prior and superior rights of the holders of Series
B Preferred and any shares of any other series of Preferred Stock ranking senior
to the shares of Series C Preferred with respect to dividends, the holders of
shares of Series C Preferred, in preference to the holders of Common Stock, the
Series A Preferred and any series of Preferred Stock now existing or hereafter
designated which expressly provides by its terms that it is junior to the Series
C Preferred in dividend rights, shall be entitled to receive, when and as
declared by the Board of Directors out of funds legally available therefor, an
annual cash dividend in the amount of $0.26325 per share. Such dividends shall
not be cumulative, and no right shall accrue to holders of Series C Preferred by
reason of the fact that dividends on such shares are not declared or paid in any
year.
(b) If a dividend (whether or not earned or declared) or any
redemption or repurchase payment upon any shares of Series C Preferred (or any
interest thereon), or any other outstanding Preferred Stock of the Corporation
ranking on a parity with the Series C Preferred as to dividends, is in arrears,
then no dividend or other distribution may be declared and no redemption or
repurchase payment may be made (and no interest thereon may be paid) on any such
shares (other than dividends or payments made in stock of the Corporation
ranking junior to the Series C Preferred as to dividends, upon liquidation,
dissolution and winding up and redemption ("Junior Stock")) unless amounts are
paid or distributed in respect of all such arrearages pro rata, so that (i) the
amounts so paid or distributed per share of each such series bear to each other
the same ratio that the amounts in arrears per share of each such series (i.e.,
the Series C Preferred and any other outstanding series of Preferred Stock of
the Corporation ranking in parity with the Series C Preferred) bear to each
other and (ii) the percentage of each such amount in arrears which is paid in
cash per share of Series C Preferred is no lower than the percentage of the
amount in arrears which is paid or distributed in cash per share of any such
other series. So long as any shares of Series C Preferred remain outstanding, no
dividend shall be paid or declared and no distribution made on any stock of the
Corporation ranking junior to the Series C Preferred as to dividends or upon
liquidation, dissolution or winding up (other than a dividend payable in Junior
Stock), and no shares of stock of the Corporation ranking junior to
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<PAGE>
the Series C Preferred as to dividends or upon liquidation, dissolution or
winding up or upon redemption or repurchase shall be purchased, redeemed or
otherwise acquired for consideration by the Corporation, directly or indirectly
(other than as a result of a reclassification of Junior Stock, or the exchange
or conversion of one Junior Stock for or into another Junior Stock, or other
than through the use of the proceeds of a substantially contemporaneous sale of
other Junior Stock), unless in each case (i) all dividends on the Series C
Preferred then declared and in arrears for all past dividend periods (and any
interest thereon) are first paid in full and the full dividend of $0.26325 for
the then-current dividend period is paid or declared and set apart for payment
and (ii) the Corporation first pays in full all amounts then due and payable in
connection with any matured repurchase or redemption obligation on the Series C
Preferred or, with respect to amounts to be paid in cash, sets aside such
payable amounts separate and apart from its other funds, in trust for the pro
rata benefit of the holders of the shares subject to such redemption so as to
continue to be available therefor. Subject to the foregoing, and not otherwise,
such dividends (payable in cash, stock or otherwise) as may be determined by the
Board of Directors may be declared and paid on any Junior Stock, or shares of
Junior Stock may be purchased, redeemed or otherwise acquired for consideration
by the Corporation, from time to time out of any funds legally available
therefor, and the Series C Preferred shall not be entitled to participate in any
such dividend, purchase, redemption or other acquisition, whether payable in
cash, stock or otherwise.
(c) Notwithstanding Section 2(b) hereof, the Corporation may at any
time, out of funds legally available therefor, repurchase shares of Common Stock
of the Corporation (i) issued to or held by employees, directors or consultants
of the Corporation or its subsidiaries upon termination of their employment of
services, pursuant to an agreement providing for such right of repurchase,
or (ii) issued to or held by any person subject to the Corporation's right of
first refusal to purchase such shares where the purchase is pursuant to the
exercise of such right of first refusal, in either case whether or not dividends
on the Series C Preferred shall have been declared and paid or funds set aside
therefor.
3. VOTING RIGHTS. Except as otherwise required by law, each share of
-------------
Series C Preferred issued and outstanding shall at any time have a number of
votes equal to the number of shares of Common Stock into which such share of
Series C Preferred is then convertible pursuant to Section 5 hereof. Subject to
the foregoing, the holders of Series C preferred shall be entitled to vote with
the holders of Common Stock on all matters submitted to a vote of stockholders
(whether at a meeting or by written consent); provided that, subject to section
1 hereof, the Series C Preferred shall be entitled to vote as a separate series
(the affirmative vote or consent of the holders of at least a majority of the
outstanding shares of such separate series being required) or as part of a class
(together with other series of Preferred Stock) on any matter with respect to
which a series vote by the Series C Preferred or a class vote of the Preferred
Stock, as the case may be, shall be expressly required by law, and any such
class or series vote may be given in person or by proxy, either in writing
without a meeting or by vote at any meeting called for the purpose.
-20-
<PAGE>
4. LIQUIDATION. Subject to the prior and superior rights of the holders
-----------
of any shares of any series of Preferred Stock ranking senior to the shares of
Series C Preferred with respect to liquidation preference, in the event of any
voluntary or involuntary dissolution, liquidation or winding up of the
Corporation (for the purposes of this Section 4, a "LIQUIDATION"), before any
distribution of assets shall be made to the holders of the Common Stock, Series
A Preferred, Series B Preferred or the holders of any stock now existing or
hereafter designated that by its express terms ranks junior to the Series C
Preferred in respect of distributions upon the Liquidation of the Corporation,
the holder of each share of Series C Preferred then outstanding shall be
entitled to be paid out of the assets of the Corporation available for
distribution to its stockholders an amount in cash equal to $3.51 per share plus
all dividends declared and unpaid on such share on the date fixed for the
distribution of assets of the Corporation in liquidation to the holders of
Series C Preferred.
If upon any Liquidation the aggregate assets available for distribution to
the holders of the Series C Preferred and any other stock of the Corporation now
existing or hereafter designated ranking on parity with the Series C Preferred
upon Liquidation and which shall then be outstanding (hereinafter in this
paragraph called the "TOTAL AMOUNT AVAILABLE") shall be insufficient to pay to
the holders of all outstanding shares of Series C Preferred and all such other
parity stock the full amounts (including all dividends accrued and unpaid) to
which they shall be entitled by reason of such Liquidation of the Corporation,
then there shall be paid to the holder of each share of Series C Preferred in
connection with such Liquidation an amount equal to the product derived by
multiplying the Total Amount Available times a fraction, the numerator of which
shall be the full amount to which such share of Series C Preferred shall be
entitled under the terms of the preceding paragraph by reason of such
Liquidation and the denominator of which shall be the total amount which would
have been distributed by reason of such Liquidation with respect to all Series C
Preferred and other stock ranking on a parity with the Series C Preferred then
outstanding upon a Liquidation had the Corporation possessed sufficient assets
to pay the maximum amount which the holders of all such stock would be entitled
to receive in connection with such Liquidation.
The voluntary sale, conveyance, lease, exchange or transfer of all or
substantially all the property or assets of the Corporation, or the merger or
consolidation of the Corporation into or with any other corporation, or the
merger of any other corporation into the Corporation (other than any such sale,
conveyance, lease, exchange or transfer of all or substantially all the property
or assets of the Corporation, merger or consolidation, following which the
stockholders of the Corporation prior to the transaction retain a majority of
the voting securities of the surviving or successor corporation and the holders
of Series C Preferred receive in the transaction a security of the surviving or
successor corporation having rights, preferences, and privileges substantially
similar to the rights, preferences and privileges of the Series C Preferred), or
the transfer of the voting control of the Corporation shall, at the option of
the holders of a majority of the outstanding shares of Series C Preferred, be
deemed to be a Liquidation of the Corporation for the purposes of this Section
4.
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<PAGE>
The holder of any shares of Series C Preferred shall not be entitled to
receive any payment owed for such shares under this Section 4 until such holder
shall cause to be delivered to the Corporation (i) the certificate(s)
representing such shares and (ii) transfer instrument(s) satisfactory to the
Corporation and sufficient to surrender such shares to the Corporation free of
any adverse interest.
After payment of the full amount of the liquidating distribution to which
any holder of Series C Preferred is entitled, the holder of such share or shares
will not be entitled to any further participation in any distribution of assets
by the Corporation.
5. CONVERSION RIGHTS.
-----------------
(a) Optional Conversion into Common Stock. The holder of any share of
-------------------------------------
Series C Preferred shall have the right, at such holder's option, at any time to
convert such share into that number of shares of fully paid and nonassessable
whole shares of Common obtained by dividing $3.51 by the Series C Conversion
Price then in effect. The Series C Conversion Price shall initially be $3.51 per
share, and shall be subject to adjustment as set forth below.
(b) Automatic Conversion. Each share of Series C Preferred shall
--------------------
automatically convert into shares of fully paid and nonassessable Common Stock,
without any further action required on the part of the holder thereof,
immediately prior to the closing of the Corporation's initial underwritten
public offering pursuant to a Registration Statement filed with and declared
effective by the Securities and Exchange Commission under the Securities Act of
1933, as amended, covering the offer and sale of Common Stock for the account of
the Corporation in which the aggregate proceeds to the Corporation equal at
least $15,000,000 and in which the price per share of Common Stock equals or
exceeds $7.02 per share (as adjusted for stock splits, stock dividends,
recapitalizations and similar events) (the "Qualified Public Offering"). The
number of shares of Common Stock issuable upon such automatic conversion of any
such share shall be equal to the number obtained by dividing $3.51 by the Series
C Conversion Price then in effect.
(c) Procedure for Conversion. To exercise the conversion privilege
------------------------
set forth in Section 5(a) hereof, the holder of shares of Series C Preferred
shall surrender the shares to be converted, accompanied by instruments of
transfer satisfactory to the Corporation and sufficient to transfer the shares
being converted to the Corporation free of any adverse interest, at the
principal offices of the Corporation or any of the offices or agencies
maintained for such purpose by the Corporation ("Conversion Agent") and shall
give written notice (by registered or certified mail, overnight courier or hand
delivery) to the Corporation at such Conversion Agent that the holder elects to
convert such shares. Such notice shall state whether and to what extent the
shares so surrendered for conversion shall be converted into shares of Common
Stock, and shall also state the name or names, together with address or
addresses, in which the certificate or certificates for Common Stock issuable on
such conversion shall be issued. As promptly as practicable after the surrender
of such shares of Series C Preferred as aforesaid, the Corporation shall issue
and deliver at such Conversion Agent to such holder, or on such holder's written
order, a certificate
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<PAGE>
or certificates for the number of full shares of Common Stock issuable upon the
conversion of such shares in accordance with the provisions hereof. Certificates
will be issued for the balance of the shares of Series C Preferred in any case
in which fewer than all of the shares of Series C Preferred are converted.
Each conversion pursuant to Section 5(a) hereof shall be deemed to
have been effected immediately prior to the close of business on the date on
which the shares of Series C Preferred shall have been so surrendered and such
notice shall have been received by the Corporation as aforesaid. Each conversion
pursuant to Section 5(b) hereof shall be deemed to have been effected,
automatically and with no further required action on the part of the holder of
the shares as converted, immediately prior to (but contingent upon) the closing
of the sale of shares pursuant to the Qualified Public Offering. In each such
case, the person or persons in whose name or names any certificate or
certificates for shares of Common Stock shall be issuable upon such conversion
shall be deemed to have become the holder or holders of record of the Common
Stock represented thereby at the effective date of such conversion, unless the
stock transfer books of the Corporation shall be closed on such date, in which
event such conversion shall be deemed to have been effected immediately prior to
the open of business on the next succeeding day on which such stock transfer
books are open, and such person or persons shall be deemed to have become such
holder or holders of record of the Common Stock at the open of business on such
later day. In each such case, the conversion shall be at the Conversion Price in
effect on the effective date of the conversion as determined above. No payment
or adjustment shall be made on conversion for any dividends payable on the
Common Stock delivered on conversion. Effective as of any such conversion, the
Corporation shall be excused from paying any dividends on the shares converted,
except for any dividends accrued (whether or not earned or declared) and unpaid
through the day of conversion.
No fractional interest in a share of Common Stock shall be deliverable upon
the conversion of any share or shares of Series C Preferred, and the number of
shares of Common Stock issuable upon any such conversion shall be rounded down
to the nearest whole share. If more than one certificate representing shares of
Series C Preferred is to be converted at one time by the same holder into common
Stock, the number of full shares of Common Stock issuable upon conversion
thereof shall be computed on the basis of the aggregate number of shares of
Series C Preferred represented by such certificates, or the specified portions
thereof to be converted.
(d) Adjustment of Conversion Price. The Conversion Price shall be
------------------------------
adjusted from time to time in respect of any of the following events occurring
on or after the date upon which a share of Series C Preferred is first issued
(the "ORIGINAL ISSUE DATE" of the Series C Preferred), as follows:
(i) Dividends and Distributions. In case the Corporation shall
---------------------------
pay or make a dividend or other distribution upon its Common Stock payable in
Common Stock, the Conversion Price in effect at the opening of business on the
day following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be
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<PAGE>
reduced by multiplying such Conversion Price by a fraction, of which the
numerator shall be the number of shares of Common Stock outstanding at the close
of business on the date fixed for such determination and the denominator shall
be the sum of such number of shares and the total number of shares constituting
such dividend or other distribution, such reduction to become effective
immediately after the opening of business on the day following the date fixed
for such determination. For the purposes of this paragraph (i), the number of
shares of Common Stock at any time outstanding shall not include shares held in
the treasury of the Corporation. The Corporation will not pay any dividend or
make any distribution on shares of Common Stock held in the treasury of the
Corporation.
(ii) Subdivisions and Combinations. In case the outstanding
-----------------------------
shares of Common Stock shall each be subdivided into a greater number of shares
of Common Stock (other than any such subdivision which is effected pursuant to a
dividend or distribution for which adjustment to the Conversion Price is made
under paragraph (i) above), the Conversion Price in effect at the opening of
business on the day following the day upon which such subdivision becomes
effective shall be proportionately reduced and, conversely, in case the
outstanding shares of Common Stock shall each be combined into a smaller number
of shares of Common Stock, the Conversion Price in effect at the opening of
business on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or increase, as the
case may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination becomes
effective.
(iii) Distributions other than Cash Dividends. In case the
---------------------------------------
Corporation shall declare a cash dividend upon its Common Stock payable
otherwise than out of retained earnings or shall distribute to holders of its
Common Stock shares of its capital stock (other than Common Stock), stock or
other securities of other persons, evidences of indebtedness issued by the
Corporation or other persons, assets (excluding cash dividends out of retained
earnings) or options or rights (excluding options to purchase and rights to
subscribe for Common Stock or other securities of the Corporation convertible
into or exchangeable for Common Stock), then, in each such case, the holders of
shares of Series C Preferred shall, concurrently with the distribution to
holders of Common Stock, receive a like distribution based upon the number of
shares of Common Stock into which such shares of Series C Preferred shall then
be convertible.
(iv) Reclassifications. In case of any capital reorganization
-----------------
or reclassification of the stock of the Corporation (other than any transaction
described in paragraph (i), (ii) or (iii) hereof), or the consolidation or
merger of the Corporation with or into another person (other than a
consolidation or merger in which the Corporation is the continuing entity and
which does not result in any change in the Common Stock), the shares of the
Series C Preferred shall, after such reorganization, reclassification,
consolidation or merger, be convertible into the kind and number of shares of
stock or other securities or property of the Corporation or otherwise to which
the holder thereof would have been entitled if immediately prior to such
reorganization, reclassification, consolidation, or merger the holder had
converted the holder's shares of the Series C Preferred in Common Stock.
-24-
<PAGE>
(v) (A) Upon Sale of Common Stock. If the Corporation shall,
-------------------------
while there are any shares of Series C Preferred outstanding, issue or sell (or
in accordance with Section 5(d)(v)(B) below is deemed to have issued or sold)
shares of its Common Stock without consideration or at a price per share less
than the Conversion Price in effect immediately prior to such issuance or sale,
then in each such case such Conversion Price for the Series C Preferred, upon
each such issuance or sale, except as hereinafter provided, shall be lowered so
as to be equal to an amount determined by multiplying the Conversion Price by a
fraction:
(1) the numerator of which shall be (a) the number of shares of
Common Stock outstanding immediately prior to the issuance of such
additional shares of Common Stock, plus (b) the number of shares of Common
Stock which the net aggregate consideration, if any, received by the
Corporation for the total number of such additional shares of Common Stock
so issued would purchase at the Conversion Price in effect immediately
prior to such issuance, and
(2) the denominator of which shall be (a) the number of shares of
Common Stock outstanding immediately prior to the issuance of such
additional shares of Common Stock plus (b) the number of such additional
shares of Common Stock so issued;
provided that for the purpose of clauses (1) and (2) of this Subsection 5
(d)(v)(A), all shares of Common Stock issuable upon conversion of the
outstanding shares of Series A Preferred and Series C Preferred and all shares
of Common Stock issuable upon exercise of outstanding options and warrants shall
be deemed to be outstanding.
(B) Upon Issuance of Warrants, Options and Rights to Common
-------------------------------------------------------
Stock.
-----
(1) For the purposes of this Section 5(d)(v), the issuance of any
warrants, options, subscriptions, or purchase rights with respect to shares
of Common Stock and the issuance of any securities convertible into or
exchangeable for shares of Common Stock (or the issuance of any warrants,
options or any rights with respect to such convertible or exchangeable
securities) shall be deemed an issuance of such Common Stock at such time
if the Net Consideration Per Share (as hereinafter determined) which may be
received by the Corporation for such Common Stock shall be less than the
Conversion Price at the time of such issuance. Any obligation, agreement,
or undertaking to issue warrants, options, subscriptions, or purchase
rights at any time in the future shall be deemed to be an issuance at the
time such obligation, agreement or undertaking is made or arises. No
adjustment of the Conversion Price shall be made under this Section 5(d)(v)
upon the issuance of any shares of Common Stock which are issued pursuant
to the exercise of any warrants, options, subscriptions, or purchase rights
or pursuant to the exercise of any conversion or exchange rights in any
convertible securities if any adjustment shall previously have been made or
deemed not required hereunder, upon the issuance of any such warrants,
options, or subscription or purchase rights or upon the issuance of any
convertible securities (or upon the issuance of any warrants, options or
any rights therefor) as above provided.
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<PAGE>
Should the Net Consideration Per Share of any such warrants, options,
subscriptions, or purchase rights or convertible securities be decreased from
time to time (other than as a result of a stock split, stock dividend or other
similar event), then, upon the effectiveness of each such change, the Conversion
Price shall be adjusted to such Conversion Price as would have obtained (1) had
the adjustments made upon the issuance of such warrants, options, rights, or
convertible securities been made upon the basis of the decreased Net
Consideration per share of such securities, and (2) had adjustments made to the
Conversion Price since the date of issuance of such securities been made to the
Conversion Price as adjusted pursuant to (1) above. Any adjustment of the
Conversion Price with respect to this Section 5(d)(v)(B) which relates to
warrants, options, subscriptions, purchase rights or convertible securities with
respect to shares of Common Stock shall be disregarded if, as, when and to the
extent such warrants, options, subscriptions, purchase rights or convertible
securities expire or are canceled without being exercised or converted, so that
the Conversion Price effective immediately upon such cancellation or expiration
shall be equal to the Conversion Price in effect at the time of the issuance of
the expired or canceled warrants, options, subscriptions, purchase rights, or
convertible securities with such additional adjustments as would have been made
to that Conversion Price had the expired or canceled warrants, options,
subscriptions, purchase rights or convertible securities not been issued.
(2) For purposes of this paragraph, the "Net Consideration Per Share"
which may be received by the Corporation shall be determined as follows:
(a) The "Net Consideration Per Share" shall mean the amount equal to
the total amount of consideration, if any, received by the Corporation for
the issuance of all such warrants, options, subscriptions, or other
purchase rights or convertible or exchangeable securities, plus the minimum
amount of consideration, if any, payable to the Corporation upon exercise
or conversion thereof, divided by the aggregate number of shares of Common
Stock that would be issued if all such warrants, options, subscriptions, or
other purchase rights or convertible or exchangeable securities were
exercised, exchanged, or converted.
(b) The "Net Consideration Per Share" which may be received by the
Corporation shall be determined in each instance as of the date of issuance
of warrants, options, subscriptions, or other purchase rights or
convertible or exchangeable securities without giving effect to any
possible future upward price adjustments or rate adjustments which may be
applicable with respect to such warrants, options, subscriptions, or other
purchase rights or convertible or exchangeable securities.
(c) Stock Dividends. In the event the Corporation shall make or
---------------
issue a dividend or other distribution payable in Common Stock or securities of
the Corporation convertible into or otherwise exchangeable for the Common Stock
of the Corporation which
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<PAGE>
is not subject to Section 5(d)(i) above, then such Common Stock or other
securities issued in payment of such dividend shall be deemed to have been
issued without consideration (except for dividends payable in shares of
Common Stock payable pro rata to holders of Series C Preferred Stock and to
--------
holders of any other class of stock).
(D) Consideration Other than Cash. For purposes of this
-----------------------------
Section 5(d), if a part or all of the consideration received by the
Corporation in connection with the issuance of shares of the Common Stock
or the issuance of any of the securities described in this Section 5(d)(v)
consists of property other than cash, such consideration shall be deemed to
have a fair market value as is reasonably determined in good faith by the
Board of Directors of the Corporation.
(E) Exceptions. This Section 5(d)(v) shall not apply under any
----------
of the circumstances which are described in Sections 5(d)(i), (ii) i (iii)
or (iv) above. Further, the provisions of this Section 5(d)(v) shall not
apply to (i) shares issued upon conversion of the Series A Preferred or
Series C Preferred, (ii) options (and the shares issuable upon exercise
thereof) to purchase up to an aggregate of 1,841,375 shares of Common Stock
granted or to be granted to employees, directors and consultants of the
Corporation, (iii) shares issued upon conversion of warrants to purchase an
aggregate of 144,540 shares of Common Stock outstanding on the Original
Issue Date, (iv) shares issued upon conversion of warrants to purchase an
aggregate of 353,388 shares of Common Stock held by NGC, Inc., (v) shares
issued upon conversion of warrants to purchase an aggregate of 150,633
shares of Common Stock held by Prudential Securities Incorporated, (vi)
capital stock or warrants to purchase capital stock issued in connection
with bona fide equipment lease financings or bank credit facilities
approved by the Corporation's Board of Directors, (vii) capital stock or
warrants to purchase capital stock issued in connection with bona fide
acquisition transactions, the terms of which are approved by the
Corporation's Board of Directors, or (viii) shares of Common Stock issued
pursuant to a transaction described in Section 5(d)(i) or 5(d)(ii) hereof.
The number of shares in this Section (E) shall be proportionately adjusted
to reflect any stock dividend, stock split or other form of
recapitalization occurring after the date hereof.
(vi) Tax Adjustments. The Corporation may in its sole
---------------
discretion make such reductions in the Conversion Price, in addition to those
required by paragraphs (i), (ii), (iii) and (iv) above, as it considers to be
advisable in order that any event treated for Federal Income tax purposes as a
dividend of stock or stock rights shall not be taxable to the recipient.
(vii) Reservation of Shares. The Corporation shall at all times
---------------------
reserve and keep available, free from preemptive fights, out of its authorized
but unissued Common Stock, for the purpose of issuance upon conversion of the
Series C Preferred, the maximum number of shares of Common Stock then
deliverable upon the conversion of all shares of Series C Preferred then
outstanding. All Common Stock issued upon conversion of the Series C Preferred
shall be
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<PAGE>
newly issued and, when issued, shall be duly authorized, validly issued, fully
paid and nonassessable, and free and clear of any liens or encumbrances.
6. NOTICES OF RECORD DATE. In the event of any taking by the Corporation
----------------------
of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend (other
than a cash dividend) or other distribution, any right to subscribe for,
purchase or otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any other right, the Corporation shall
mail to each holder of Series C Preferred, at least fifteen (15) days prior to
the date specified therein, a notice specifying the date on which any such
record is to be taken for the purpose of such dividend, distribution or right,
and the amount and character of such dividend, distribution or right.
7. PROTECTIVE PROVISIONS. So long as any shares of Series C Preferred are
---------------------
outstanding, this Corporation shall not, without first obtaining the approval
(by vote or written consent, as provided by law), of the holders of at least a
majority of the then outstanding shares of Series C Preferred voting together as
a class:
(a) amend or repeal any provision of, or add any provision to, this
Corporation's Restated Certificate of Incorporation if such action would
adversely alter or change the preferences, rights, privileges or powers of, or
the restrictions provided for the benefit of, the Series C Preferred; or
(b) authorize or issue shares of any class of stock (other than the
Series B Preferred issued as dividends as described in Article VI hereof) having
any preference or priority as to dividend, redemption or liquidation
preferences which is superior to or on parity with any such preference or
priority of any series of Series C Preferred.
(c) Merge or consolidate with or into another entity or sell, lease
or otherwise dispose of a material portion of the assets of the Company or any
subsidiary or transfer voting control of the Company if the total consideration
to be received by the holders of the Series C Preferred Stock is less than the
lesser of (i) $7.02 per share of Series C Preferred (as adjusted for stock
splits, stock dividends, recapitalizations and similar events) and (ii) $4.74
per share of Series C Preferred (as adjusted for stock splits, stock dividends,
recapitalizations and similar events), with respect to transactions occurring on
or prior to the first anniversary of the Original Issue Date of the Series C
Preferred and thereafter an amount per share of Series C Preferred which would
result in the holder of a share of Series C Preferred realizing an annual
cumulative internal rate of return of 35% on the original purchase price paid
per share of Series C Preferred, which consent shall not be unreasonably
withheld;
8. REDEMPTION RIGHTS.
-----------------
(a) Holder Redemption. Upon written notice at least one hundred
-----------------
twenty (120) days prior to December 31 of any calendar year from, and including,
the year 2002, by the
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<PAGE>
holders of at least two-thirds (2/3) of the then outstanding shares of Series C
Preferred (a "Holder Election"), the Corporation shall be required to redeem all
of the issued, outstanding and nonredeemed shares of Series C Preferred held by
each holder of Series C Preferred (a "Holder Redemption"), at a redemption price
per share (the "Redemption Price") of $3.51 plus an amount equal to all declared
but unpaid dividends on the Series C Preferred. In the event of any such Holder
Election, the Corporation shall, out of and only to the extent of funds legally
available therefor, redeem (i) on the December 31 following such Holder
Election, one-third of the number of shares of Series C Preferred then issued
and outstanding; (ii) on the second December 31 following such Holder Election,
one-half of the number of shares of Series C Preferred then issued and
outstanding; and (iii) on the third December 31 following such Holder Election,
all of the shares of Series C Preferred then issued and outstanding. The
Redemption Price Payable upon any Holder Redemption shall be paid in cash, to
the extent of funds legally available therefor.
(b) In the event that the Corporation does not have legally available
funds sufficient to pay in full the Redemption Price with respect to each share
of Series C Preferred being redeemed pursuant to this Section 8 ("REDEEMED
SHARES"), the Corporation shall redeem the shares of Series C Preferred
otherwise scheduled for redemption pro rata among the holders of the Series C
Preferred then outstanding, based on the number of shares then held by each
holder of Series C Preferred.
(c) Payment of Redemption Price. In the case of any Holder Redemption
---------------------------
pursuant to Section 4(a), the Corporation shall pay the Redemption Price in
cash.
(d) Mechanics of Redemption.
-----------------------
(i) Notice of any Holder Redemption of the Series C Preferred
shall be mailed at least thirty (30), but not more than sixty (60), calendar
days prior to each December 31 redemption date (each, a "Holder Redemption
Date"), to each holder of Series C Preferred to be redeemed at such holder's
address as it appears on the books of the Corporation. To facilitate the
redemption of the Series C Preferred, the Board of Directors may fix a record
date for the determination of the holders of shares of Series C Preferred to be
redeemed on each Holder Redemption Date, which date shall be not more than sixty
(60), nor less than ten (10) calendar days prior to the respective Holder
Redemption Date.
(ii) The holder of any shares of Series C Preferred redeemed
pursuant to this Section 8 shall not be entitled to receive payment of the
Redemption Price for such shares until such holder shall cause to be delivered
to the place specified in the Corporation's notice of redemption (i) the
certificates representing the shares of Series C Preferred to be redeemed and
(ii) appropriate endorsements and transfer documents sufficient to transfer such
shares of Series C Preferred to the Corporation free of any adverse interest. In
the event the redemption amount payable on any redeemed share of Series C
Preferred is not paid in full within fifteen (15) business days after the Holder
Redemption Date as provided herein, then the unpaid portion of the Redemption
Price of such share shall bear interest at a rate of 12% per annum, commencing
at
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<PAGE>
the close of business on the Holder Redemption Date and continuing until the
redemption price on such share is paid in full. Interest shall be computed on
the basis of a three hundred sixty-five (365) day year and shall be payable on
demand.
(iii) In the event of any redemption, then upon the Holder
Redemption Date and if all funds necessary for such redemption shall have been
paid in cash or set aside by the Corporation separate and apart from its other
funds in trust for the pro rata benefit of the holders of the shares called for
redemption, so as to be and continue to be available therefor, then the shares
so called for redemption shall no longer be deemed outstanding, the rights to
receive dividends thereon shall cease to accrue from and after the applicable
Holder Redemption Date, and all rights of the holders of the shares of Series C
Preferred called for redemption shall cease and terminate, excepting only the
right to receive the Redemption Price therefor (including any accrued and unpaid
dividends, whether or not earned or declared, to the Holder Redemption Date if
such price has not already been paid, without interest except as provided in
Section 4(d)(ii) hereof.
(e) Conversion Rights. Nothing contained in this Section 8 shall in
-----------------
any way restrict or prohibit the holders of the Series C Preferred from
exercising their conversion rights pursuant to Section 5 hereof prior to the
redemption of any shares hereunder.
(f) Priority on Redemption. The redemption rights of the shares of
----------------------
Series C Preferred are senior to the redemption rights of the Series A Preferred
and Series B Preferred. Accordingly, the Corporation shall not redeem any shares
of Series A Preferred or Series B preferred unless and until the shares of
Series C Preferred have been redeemed in full.
ARTICLE VIII
In furtherance and not in limitation of the powers conferred by statute,
the Board of Directors of the Corporation is expressly authorized to make, alter
or repeal the by-laws of the Corporation.
ARTICLE IX
Meetings of stockholders may be held within or without the State of
Delaware, as the by-laws of the Corporation may provide. The books of the
Corporation may be kept outside the State of Delaware at such place or places as
may be designated from time to time by the Board of Directors or in the by-laws
of the Corporation. Election of directors need not be by written ballot unless
the by-laws of the Corporation so provide.
ARTICLE X
To the fullest extent permitted by the General Corporation Law of the State
of Delaware as the same exists or may hereafter be amended, a director of the
Corporation shall not be personally
-30-
<PAGE>
liable to the Corporation or its stockholders for monetary damages for a breach
of fiduciary duty as a director. Any repeal or modification of this Article X
shall not adversely affect any right or protection of a director of the
Corporation existing at the time of such repeal or modification.
ARTICLE XI
Each person who is or was director or officer of the Corporation, and each
person who serves or served at the request of the Corporation as a director or
officer of another enterprise, shall be indemnified by the Corporation in
accordance with, and to the fullest extent authorized by, the General
Corporation Law of the State of Delaware as it may be in effect from time to
time.
ARTICLE XII
The Corporation reserves the right to amend, alter, change or repeal any
provision contained in this Restated Certificate in the manner now or hereafter
prescribed herein and by the laws of the State of Delaware, and all rights
conferred upon stockholders herein are granted subject to this reservation."
-31-
<PAGE>
THE UNDERSIGNED, being the Executive Vice President of this Corporation,
does make this certificate, hereby declaring and certifying that this is his act
and deed and the facts herein stated are true, and accordingly, has hereunto set
his hand this 17th day of July, 1997.
GEOSYSTEMS GLOBAL CORPORATION
a Delaware corporation
By: /s/ James Thomas
-------------------------------
Name: James Thomas
Title: Executive Vice President
Attest:
/s/ Robert S. Binford
- ------------------------------
Title: Asst. Secretary
Robert S. Binford
-32-
<PAGE>
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 01/27/1999
991033810 - 2389679
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
GEOSYSTEMS GLOBAL CORPORATION
GeoSystems Global Corporation, a Delaware corporation (hereinafter
called "Corporation"), hereby certifies that:
FIRST: The Certificate of Incorporation of the Corporation, as
------
heretofore amended, is further amended by striking out Article FIRST of the
Certificate of Incorporation and inserting in lieu thereof the following.
"FIRST: The name of the Corporation (hereinafter called the
"Corporation") is MapQuest.com, Inc."
SECOND: The board of directors of the Corporation, by written consent
------
to such action by all the members thereof and filed with the minutes of
proceedings of the board, adopted a resolution in which was set forth the
foregoing proposed amendment of the Certificate of Incorporation of the
Corporation declaring that the said amendment of the Certificate of
Incorporation was advisable and directing that it be submitted for
action thereon by the stockholders of the Corporation by written consent of
the holders of a majority of the shares of stock of the Corporation
entitled to vote thereon. Such amendment of the Certificate of
Incorporation has been duly adopted in accordance with the provisions of
Section 242 of the General Corporation Law of the State of Delaware.
THIRD: A consent in writing in accordance with Section 228 of the
-----
General Corporation Law of the State of Delaware, setting forth approval of
the amendment of the Certificate of Incorporation of the Corporation
hereinabove set forth, was signed by the holders of majority of the shares
of stock of the Corporation entitled to vote thereon, and such consent is
filed with the records of the Corporation.
FOURTH: The amendment of the Certificate of Incorporation of the
------
Corporation as hereinabove set forth has been duly advised by the Board of
Directors and approved by the stockholders of the Corporation in the manner
and by the vote required by law.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment to be signed in its name and on its behalf by James Thomas,
COO/CFO of the Corporation, on the 16/th/ day of January, 1999.
GEOSYSTEMS GLOBAL CORPORATION
By /s/ James Thomas
-------------------------
James Thomas, COO/CFO
<PAGE>
EXHIBIT 3.2
AMENDMENT NO. 2
TO THE
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
MAPQUEST.COM, INC.
I, THE UNDERSIGNED, James Thomas, being the Secretary of MapQuest.com, Inc.
(the "Corporation"), hereby certify:
-----------
1. The Amended and Restated Certificate of Incorporation of the Corporation is
amended so that the second and third sentences of Article FOURTH are deleted and
replaced with the following:
"The total number of shares which this Corporation is authorized to
issue is one hundred five million (105,000,000) shares. One hundred
million (100,000,000) shares shall be designated Common Stock, par value
per share equal to $0.001 upon the effectiveness of the two and seven-
tenths-for-one stock split (the "Stock Split") to be effected by the
Corporation upon the effectiveness of the Registration Statement on Form S-
1 filed with the Securities and Exchange Commission relating to the initial
public offering of the Common Stock."
2. This amendment was authorized and duly adopted by the unanimous written
consent of the Board of Directors and by the stockholders of the Corporation in
accordance with Sections 242 and 245 of the General Corporation Law of the State
of Delaware, as amended.
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this certificate as of the
____ day of April, 1999, and hereby affirms under penalty of perjury that this
certificate is the act and deed of the Corporation and that the facts contained
herein are true.
By:______________________________
Name: James Thomas
Title: Secretary
<PAGE>
EXHIBIT 3.3
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
MAPQUEST.COM, INC.
a Delaware corporation
MapQuest.com, Inc., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware (the
"Corporation") does hereby certify as follows:
WHEREAS: The original Certificate of Incorporation of the Corporation was
filed under the name of "Geosystems Global Corporation" with the Secretary of
State of the State of Delaware on March 28, 1994.
WHEREAS: This Amended and Restated Certificate of Incorporation has been
duly adopted in accordance with the provisions of Sections 242 and 245 of the
General Corporation Law of the State of Delaware by the Board of Directors of
the Corporation.
WHEREAS: This Amended and Restated Certificate of Incorporation was
approved by written consent of the stockholders pursuant to Section 228 of the
General Corporation Law of the State of Delaware ("Delaware Law").
WHEREAS: Written notice of this Amended and Restated Certificate of
Incorporation was duly given to stockholders of this Corporation who did not
consent in writing to the foregoing resolutions.
THEREFORE BE IT RESOLVED: The Certificate of Incorporation of this
Corporation is amended and restated in its entirety to read as follows:
"FIRST: The name of this corporation is MapQuest.com, Inc.
SECOND: The address of the Corporation's registered office in the State of
Delaware is 1209 Orange Street, Wilmington, New Castle County, Delaware 19801.
The name of its registered agent at such address is The Corporation Trust
Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware.
FOURTH: The Corporation is authorized to issue two classes of stock to be
designated, respectively, "common stock" and "preferred stock." The total number
of shares which this
<PAGE>
Corporation is authorized to issue is one hundred and five million (105,000,000)
shares. One hundred million (100,000,000) shares shall be designated common
stock (the "Common Stock"), and five million (5,000,000) shares shall be
undesignated preferred stock (the "Preferred Stock"). Each share of Preferred
Stock shall have a par value of $0.01, and each share of Common Stock shall have
a par value of $0.001.
Any Preferred Stock not previously designated as to series may be issued
from time to time in one or more series pursuant to a resolution or resolutions
providing for such issue duly adopted by the Board of Directors (authority to do
so being hereby expressly vested in the Board), and such resolution or
resolutions shall also set forth the voting powers, full or limited or none, of
each such series of Preferred Stock and shall fix the designations, preferences
and relative, participating, optional or other special rights and
qualifications, limitations or restrictions of each such series of Preferred
Stock. The Board of Directors is authorized to alter the designation, rights,
preferences, privileges and restrictions granted to or imposed upon any wholly
unissued series of Preferred Stock and, within the limits and restrictions
stated in any resolution or resolutions of the Board of Directors originally
fixing the number of shares constituting any series of Preferred Stock, to
increase or decrease (but not below the number of shares of any such series then
outstanding) the number of shares of any such series subsequent to the issue of
shares of that series.
Each share of Preferred Stock issued by the Corporation, if reacquired by
the Corporation (whether by redemption, repurchase, conversion to Common Stock
or other means), shall upon such reacquisition resume the status of authorized
and unissued shares of Preferred Stock, undesignated as to series and available
for designation and issuance by the Corporation in accordance with the
immediately preceding paragraph.
FIFTH:
1. Dividends. The holders of Common Stock shall be entitled to receive, on
---------
a share-for-share basis, such dividends if and when declared from time to
time by the Board of Directors of the Corporation.
2. Voting. Except as otherwise required by law, each holder of Common Stock
------
shall be entitled to one (1) vote for each share of Common Stock held by
such holder.
SIXTH: Any action required or permitted to be taken at any annual or
special meeting of stockholders may be taken only upon the vote of stockholders
at an annual or special meeting duly noticed and called in accordance with
Delaware Law and may not be taken by written consent of stockholders without a
meeting.
SEVENTH: The management of the business and the conduct of the affairs of
the Corporation shall be vested in its Board of Directors. The number of
directors which shall constitute the whole Board of Directors shall be fixed
exclusively by one or more resolutions
<PAGE>
adopted from time to time by the Board of Directors.
EIGHTH:
- ------
A. CLASSIFIED DIRECTORS
The directors (subject to the last paragraph of this Article Eighth) shall
be divided into three classes, designated Class I, Class II and Class III. Each
class shall consist, as nearly as may be possible, of one-third of the total
number of directors constituting the entire Board of Directors. Each director
shall serve for a term ending on the date of the third annual meeting of
stockholders next following the annual meeting at which such director was
elected, provided that directors initially designated as Class I directors shall
--------
serve for a term ending on the date of the 2002 annual meeting, directors
initially designated as Class II directors shall serve for a term ending on the
2001 annual meeting, and directors initially designated as Class III directors
shall serve for a term ending on the date of the 2000 annual meeting.
Notwithstanding the foregoing, each director shall hold office until such
director's successor shall have been duly elected and qualified or until such
director's earlier death resignation or removal. In the event of any change in
the number of directors, the Board of Directors shall apportion any newly
created directorships among, or reduce the number of directorships in, such
class or classes as shall equalize, as nearly as possible, the number of
directors in each class. In no event will a decrease in the number of directors
shorten the term of any incumbent director. The names and mailing addresses of
the persons who are to serve initially as directors of each Class are:
Class I
Michael Mulligan
Rick Allen
Class II
Robert McCormack
Daniel Nova
Class III
Carlo von Schroeter
John Moragne
B. DIRECTORS
<PAGE>
3. No Written Ballot. Election of directors need not be by written ballot
-----------------
unless the bylaws of the Corporation so provide.
4. Vacancies. Vacancies on the Board of Directors resulting from death,
---------
resignation, removal or otherwise and newly created directorships resulting
from any increase in the number of directors may be filled solely by a
majority of the directors then in office (although less than a quorum) or
by the sole remaining director, and each director so elected shall hold
office for a term that shall coincide with the term of the class to which
such director shall have been elected.
5. Removal. No director may be removed from office by the stockholders
-------
except for cause with the affirmative vote of the holders of not less than
a majority of the outstanding shares of stock generally entitled to vote.
6. Preferred Stock Directors. Notwithstanding the foregoing, whenever the
-------------------------
holders of one or more classes or series of Preferred Stock shall have the
right, voting separately as a class or series, to elect directors, the
election, term of office, filing of vacancies, removal and other features
of such directorships shall be governed by the terms of the resolution or
resolutions adopted by the Board of Directors pursuant to ARTICLE FOURTH
applicable thereto, and each director so elected shall not be subject to
the provisions of this ARTICLE SIXTH unless otherwise provided therein.
NINTH: Subject to Article Thirteenth, The Board of Directors shall have the
-----
power to adopt, amend or repeal the By-laws of the Corporation.
TENTH: Any action required or permitted to be taken at any annual or
-----
special meeting of stockholders may be taken only upon the vote of stockholders
at an annual or special meeting duly noticed and called in accordance with the
Delaware Law, as amended from time to time, and may not be taken by written
consent of stockholders without a meeting, except with regard to election,
removed and filling of vacancies of directors by holders of Preferred Stock,
voting separately, as and if so provided by the terms of the resolution or
resolutions adopted by the Board of Directors pursuant to Article Fourth
applicable thereto. At all meetings of stockholders, each stockholder shall be
entitled to vote, in person or by proxy, the shares owned by such stockholders
of record on the record date for the meeting. When a quorum is present or
represented at any meeting, the vote of the holders of a majority of those of
the outstanding shares of stock generally entitled to vote and represented, in
person or proxy, at the meeting on any matter, question, or proposal properly
brought before such meeting shall decide such question, unless the question is
one upon which, by express provision of law, this Amended and Restated
Certificate of Incorporation or the By-Laws, a different vote is required, in
which case such express provision shall govern and control the decision of such
question.
NINTH: Meetings of the stockholders shall only be called by the Secretary
-----
of the Corporation upon written request signed by either (a) stockholders
holding at least 20% of those
<PAGE>
of the outstanding shares of stock generally entitled to vote or (b) by a
majority of the Board of Directors, or (c) the Chairman of the Board of
Directors, or (d) the President of the Corporation, and may not be called by any
other person. Notwithstanding the foregoing, whenever holders of one or more
classes or series of Preferred Stock shall have the right, voting separately as
a class or series, to elect directors, such holders may call, pursuant to the
terms of the resolution or resolutions adopted by the Board of Directors
pursuant to ARTICLE FOURTH hereto, special meetings of the holders of such
Preferred Stock. Any call for a special meetings of holders of such Preferred
Stock. Any call for a special meeting of the stockholders must specify the
matters to be acted upon at such meeting; only those matters set forth in such
notice may be considered or acted upon at the meeting, unless otherwise provided
by law.
NINTH: In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to make, alter, amend or
repeal the Bylaws of the Corporation.
TENTH: The directors of the Corporation need not be elected by written
ballot unless a stockholder or stockholders holding a majority of the voting
power of the outstanding capital stock entitled to vote demands election by
written ballot at the meeting and before voting.
ELEVENTH: Advance notice of stockholder nomination for the election of
directors and of business to be brought by stockholders before any meeting of
the stockholders of the Corporation shall be given in the manner provided in the
Bylaws of the Corporation.
TWELFTH: Special meetings of the stockholders of the Corporation may be
called, for any purpose or purposes, by (i) the Chairman of the Board of
Directors, (ii) the Chief Executive Officer or (iii) the Board of Directors.
THIRTEENTH:
1. To the fullest extent permitted by the Delaware Law as the same exists
or as may hereafter be amended, a director of the Corporation shall not be
personally liable to the Corporation or its stockholders for monetary
damages for a breach of fiduciary duty as a director.
2. The Corporation may indemnify to the fullest extent permitted by law any
person made or threatened to be made a party to an action or proceeding,
whether criminal, civil, administrative or investigative, by reason of the
fact that he, his testator or intestate is or was a director, officer or
employee of the Corporation or any predecessor of the Corporation or serves
or served at any other enterprise as a director, officer or employee at the
request of the Corporation or any predecessor to the Corporation. The Board
of Directors of the Corporation may, in its discretion, extend such
indemnification to former, current or future directors, employees and other
agents of the Corporation or any predecessor to the Corporation.
<PAGE>
3. Neither any amendment nor repeal of this Article THIRTEENTH, nor the
adoption of any provision of the Corporation's Certificate of Incorporation
inconsistent with this Article THIRTEENTH, shall eliminate or reduce the
effect of this Article THIRTEENTH, in respect of any matter occurring, or
any action or proceeding accruing or arising or that, but for this Article
TWELFTH, would accrue or arise, prior to such amendment, repeal or adoption
of an inconsistent provision.
FOURTEENTH: Meetings of stockholders may be held within or without the
State of Delaware, as the Bylaws may provide. The books of the Corporation may
be kept (subject to any provision contained under Delaware Law) outside of the
State of Delaware at such place or places as may be designated from time to time
by the Board of Directors or in the Bylaws of the Corporation.
FIFTEENTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Amended and Restated Certificate of
Incorporation in the manner now or hereafter prescribed herein and under
Delaware Law, except as otherwise provided in article THIRTEENTH, and all rights
conferred upon stockholders herein are granted subject to this reservation.
IN WITNESS WHEREOF, MapQuest.com, Inc. has caused this Amended and Restated
Certificate of Incorporation to be signed in its name and on its behalf by James
Thomas, Chief Financial Officer and Chief Operating Officer of the Corporation,
on the ___ day of _____, 1999.
By:
---------------------------
James Thomas
Chief Financial Officer and
Chief Operating Officer
Attest:
________________________
<PAGE>
EXHIBIT 3.4
AMENDED AND RESTATED BYLAWS
OF
MAPQUEST.COM, INC.
(A DELAWARE CORPORATION)
<PAGE>
BY LAWS OF
MAPQUEST.COM, INC.
(A DELAWARE CORPORATION)
TABLE OF CONTENTS
Page
----
ARTICLE I
CORPORATE OFFICES
1.1 REGISTERED OFFICE ..................................................... 1
1.2 OTHER OFFICES ......................................................... 1
ARTICLE II
MEETINGS OF STOCKHOLDERS
2.1 PLACE OF MEETINGS ..................................................... 1
2.2 ANNUAL MEETING ........................................................ 1
2.3 SPECIAL MEETING ....................................................... 2
2.4 NOTICE OF STOCKHOLDERS' MEETINGS ...................................... 2
2.5 ADVANCE NOTICE OF STOCKHOLDER NOMINEES AND STOCKHOLDER
BUSINESS .............................................................. 2
2.6 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE ......................... 2
2.7 QUORUM ................................................................ 3
2.8 ADJOURNED MEETING; NOTICE ............................................. 3
2.9 VOTING ................................................................ 3
2.10 STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING .............. 4
2.11 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING ............................ 4
2.12 PROXIES ............................................................... 5
2.13 ORGANIZATION .......................................................... 5
2.14 LIST OF STOCKHOLDERS ENTITLED TO VOTE ................................. 5
ARTICLE III
DIRECTORS
3.1 POWERS ................................................................. 6
3.2 NUMBER OF DIRECTORS .................................................... 6
3.3 ELECTION AND TERM OF OFFICE OF DIRECTORS ............................... 6
<PAGE>
3.4 RESIGNATION AND VACANCIES .............................................. 6
3.5 REMOVAL OF DIRECTORS ................................................... 7
3.6 PLACE OF MEETINGS; MEETINGS BY TELEPHONE ............................... 8
3.7 FIRST MEETINGS ......................................................... 8
3.8 REGULAR MEETINGS ....................................................... 8
3.9 SPECIAL MEETINGS; NOTICE ............................................... 9
3.10 QUORUM ................................................................ 9
3.11 WAIVER OF NOTICE ...................................................... 9
3.12 ADJOURNMENT ........................................................... 10
3.13 NOTICE OF ADJOURNMENT ................................................. 10
3.14 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING ..................... 10
3.15 FEES AND COMPENSATION OF DIRECTORS .................................... 10
3.16 APPROVAL OF LOANS TO OFFICERS ......................................... 10
3.17 SOLE DIRECTOR PROVIDED BY CERTIFICATE OF INCORPORATION ................ 11
3.18 NOMINATION OF DIRECTORS; STOCKHOLDER BUSINESS AT ANNUAL
MEETINGS .............................................................. 11
ARTICLE IV
COMMITTEES
4.1 COMMITTEES OF DIRECTORS ................................................ 13
4.2 MEETINGS AND ACTION OF COMMITTEES ...................................... 13
4.3 COMMITTEE MINUTES ...................................................... 14
ARTICLE V
OFFICERS
5.1 OFFICERS ............................................................. 14
5.2 ELECTION OF OFFICERS ................................................. 14
5.3 SUBORDINATE OFFICERS ................................................. 15
5.4 REMOVAL AND RESIGNATION OF OFFICERS .................................. 15
5.5 VACANCIES IN OFFICES ................................................. 15
5.6 CHAIRMAN OF THE BOARD ................................................ 15
5.7 PRESIDENT ............................................................ 16
5.8 VICE PRESIDENTS ...................................................... 16
5.9 SECRETARY ............................................................ 16
5.10 CHIEF FINANCIAL OFFICER .............................................. 17
5.11 ASSISTANT SECRETARY .................................................. 17
5.12 ADMINISTRATIVE OFFICERS .............................................. 17
5.13 AUTHORITY AND DUTIES OF OFFICERS ..................................... 18
-ii-
<PAGE>
ARTICLE VI
INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEESAND OTHER AGENTS
6.1 INDEMNIFICATION OF DIRECTORS AND OFFICERS .............................. 18
6.2 INDEMNIFICATION OF OTHERS .............................................. 19
6.3 INSURANCE .............................................................. 19
ARTICLE VII
RECORDS AND REPORTS
7.1 MAINTENANCE AND INSPECTION OF RECORDS ................................. 19
7.2 INSPECTION BY DIRECTORS ............................................... 20
7.3 REPRESENTATION OF SHARES OF OTHER CORPORATIONS ........................ 20
7.4 CERTIFICATION AND INSPECTION OF BYLAWS ................................ 20
ARTICLE VIII
GENERAL MATTERS
8.1 RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING .................. 20
8.2 CHECKS; DRAFTS; EVIDENCES OF INDEBTEDNESS .............................. 21
8.3 CORPORATE CONTRACTS AND INSTRUMENTS: HOW EXECUTED ...................... 21
8.4 STOCK CERTIFICATES; TRANSFER; PARTLY PAID SHARES ....................... 21
8.5 SPECIAL DESIGNATION ON CERTIFICATES .................................... 22
8.6 LOST CERTIFICATES ...................................................... 22
8.7 TRANSFER AGENTS AND REGISTRARS ......................................... 23
8.8 CONSTRUCTION; DEFINITIONS .............................................. 23
ARTICLE IX
AMENDMENTS
-iii-
<PAGE>
BYLAWS
OF
MAPQUEST.COM, INC.
(A DELAWARE CORPORATION)
ARTICLE I
CORPORATE OFFICES
1.1 REGISTERED OFFICE
The registered office of the corporation shall be fixed in the certificate
of incorporation of the corporation.
1.2 OTHER OFFICES
The board of directors may at any time establish branch or subordinate
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 principal
executive 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. In the absence of such
designation, the annual meeting of stockholders shall be held on the third
Friday in June in each year at 3:00 p.m. However, if such day falls on a legal
holiday, then the meeting shall be held at the same time and place on the next
succeeding full business day. At the meeting, directors shall be elected, and
any other proper business may be transacted.
-1-
<PAGE>
2.3 SPECIAL MEETING
A special meeting of the stockholders may be called at any time by the
board of directors, or by the chairman of the board, or by the president.
2.4 NOTICE OF STOCKHOLDERS' MEETINGS
All notices of meetings of stockholders 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. The notice shall specify the
place, date and hour of the meeting and (i) in the case of a special meeting,
the purpose or purposes for which the meeting is called (no business other than
that specified in the notice may be transacted) or (ii) in the case of the
annual meeting, those matters which the board of directors, at the time of
giving the notice, intends to present for action by the stockholders (but any
proper matter may be presented at the meeting for such action). The notice of
any meeting at which directors are to be elected shall include the name of any
nominee or nominees who, at the time of the notice, the board intends to present
for election.
2.5 ADVANCE NOTICE OF STOCKHOLDER NOMINEES AND STOCKHOLDER BUSINESS
To be properly brought before an annual meeting or special meeting,
nominations for the election of directors or other business must be (a)
specified in the notice of meeting (or any supplement thereto) given by or at
the direction of the board of directors, (b) otherwise properly brought before
the meeting by or at the direction of the board of directors or (c) otherwise
properly brought before the meeting by a stockholder. For such nominations or
other business to be considered properly brought before the meeting by a
stockholder, such stockholder must have given timely notice and in proper form
of his or her intent to bring such business before such meeting in accordance
with Section 3.18 of these bylaws.
2.6 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE
Written notice of any meeting of stockholders shall be given either
personally or by first-class mail or by telegraphic or other written
communication. Notices not personally delivered shall be sent charges prepaid
and shall be addressed to the stockholder at the address of that stockholder
appearing on the books of the corporation or given by the stockholder to the
corporation for the purpose of notice. Notice shall be deemed to have been
given at the time when delivered personally or deposited in the mail or sent by
telegram or other means of written communication.
An affidavit of the mailing or other means of giving any notice of any
stockholders' meeting, executed by the secretary, assistant secretary or any
transfer agent of the corporation giving the notice, shall be prima facie
evidence of the giving of such notice.
-2-
<PAGE>
2.7 QUORUM
The holders of a majority in voting power of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
certificate of incorporation. If, however, such quorum is not present or
represented at any meeting of the stockholders, then either (i) the chairman of
the meeting or (ii) the stockholders entitled to vote thereat, present in person
or represented by proxy, shall have power to adjourn the meeting in accordance
with Section 2.8 of these bylaws.
When a quorum is present at any meeting, the vote of the holders of a
majority of the stock having voting power present in person or represented by
proxy shall decide any question brought before such meeting, unless the question
is one upon which, by express provision of the laws of the State of Delaware or
of the certificate of incorporation or these bylaws, a different vote is
required, in which case such express provision shall govern and control the
decision of the question.
If a quorum be initially present, the stockholders may continue to transact
business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum, if any action taken is approved by a
majority of the stockholders initially constituting the quorum.
2.8 ADJOURNED MEETING; NOTICE
When a meeting is adjourned to another time and 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.
2.9 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, and to voting trusts and other voting agreements).
Except as may be otherwise provided in the certificate of incorporation or
these bylaws, each stockholder shall be entitled to one vote for each share of
capital stock held by such stockholder.
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2.10 STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING
Any action required or permitted to be taken at any annual or special
meeting of stockholders may be taken without a meeting, without prior notice and
without a vote, if a consent or consents in writing setting forth the action so
taken shall be 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. Such consents shall be delivered to the corporation by delivery to
its registered office in the state of Delaware, its principal place of business,
or an officer or agent of the corporation having custody of the book in which
proceedings of meetings of stockholders are recorded. Delivery made to a
corporation's registered office shall be by hand or by certified or registered
mail, return receipt requested. 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.
Effective upon the closing of a firm commitment underwritten initial public
offering of any of the corporation's securities pursuant to a registration
statement on Form S-1 filed under the Securities Act of 1933, as amended, the
stockholders of the corporation may not take action by written consent without a
meeting but must take any such actions at a duly called annual or special
meeting.
2.11 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING
For purposes of determining the stockholders entitled to notice of any
meeting or to vote thereat, the board of directors may fix, in advance, a record
date, which shall not precede the date upon which the resolution fixing the
record date is adopted by the board of directors and which shall not be more
than sixty (60) days nor less than ten (10) days before the date of any such
meeting, and in such event only stockholders of record on the date so fixed are
entitled to notice and to vote, notwithstanding any transfer of any shares on
the books of the corporation after the record date.
If the board of directors does not so fix a record date, 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 business day next
preceding the day on which notice is given, or, if notice is waived, at the
close of business on the business day next preceding the day on which the
meeting is held.
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
unless the board of directors fixes a new record date for the adjourned meeting,
but the board of directors shall fix a new record date if the meeting is
adjourned for more than thirty (30) days from the date set for the original
meeting.
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The record date for any other purpose shall be as provided in Section 8.1
of these bylaws.
2.12 PROXIES
Every person entitled to vote for directors, or on any other matter, shall
have the right to do so either in person or by one or more agents authorized by
a written proxy signed by the person 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, telefacsimile 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(e) of the General Corporation Law of
Delaware (relating to the irrevocability of proxies).
2.13 ORGANIZATION
The president, or in the absence of the president, the chairman of the
board, shall call the meeting of the stockholders to order, and shall act as
chairman of the meeting. In the absence of the president, the chairman of the
board, and all of the vice presidents, the stockholders shall appoint a chairman
for such meeting. The chairman of any meeting of stockholders shall determine
the order of business and the procedures at the meeting, including such matters
as the regulation of the manner of voting and the conduct of business. The
secretary of the corporation shall act as secretary of all meetings of the
stockholders, but in the absence of the secretary at any meeting of the
stockholders, the chairman of the meeting may appoint any person to act as
secretary of the meeting.
2.14 LIST OF STOCKHOLDERS ENTITLED TO VOTE
The officer who has charge of the stock ledger of the 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.
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ARTICLE III
DIRECTORS
3.1 POWERS
Subject to the provisions of the General Corporation Law of Delaware and to
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 not less than three (3)
nor more than nine (9). The exact number of directors shall be six (6) until
changed, within the limits specified above, by a bylaw amending this Section
3.2, duly adopted by the board of directors or by the stockholders. The
indefinite number of directors may be changed, or a definite number may be fixed
without provision for an indefinite number, by a duly adopted amendment to the
Certificate of Incorporation or by an amendment to this bylaw duly adopted by
the board of directors or by the stockholders.
3.3 ELECTION AND TERM OF OFFICE OF DIRECTORS
Except as provided in Section 3.4 of these bylaws, directors shall hold
office until the expiration of the term for which elected and until a successor
has been elected and qualified; except that if any such election shall not be so
held, such election shall take place at a stockholders' meeting called and held
in accordance with the Delaware General Corporation Law. The Directors shall be
classified and their successors elected in accordance with Article EIGHTH of the
Certificate of Incorporation. Subject to the requirement of the Certificate of
Incorporation that the classes be as nearly equal in number as possible, the
size of each class of Directors shall be as determined from time to time by
resolution adopted by a majority of the Board of Directors. Any reduction in
the size of any class of Directors shall not shorten the term of office of any
incumbent Director. Directors need not be stockholders of the corporation.
3.4 RESIGNATION AND VACANCIES
Any director may resign effective on giving written notice to the chairman
of the board, the president, the secretary or the board of directors, unless the
notice specifies a later time for that resignation to become effective. If the
resignation of a director is effective at a future time, the board of directors
may elect a successor to take office when the resignation becomes effective.
Each director so elected shall hold office until the expiration of the term of
office of the director whom he has replaced and until a successor has been
elected and qualified.
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Effective upon the closing of a firm commitment underwritten public
offering of any of the corporation's securities pursuant to a registration
statement on Form S-1 under the Securities Act of 1933, as amended, vacancies
occurring on the Board of Directors for any reason and newly created
directorships resulting from an increase in the authorized number of directors
may be filled only by vote of a majority of the remaining members of the Board
of Directors, although less than a quorum, at any meeting of the Board of
Directors. A person so elected by the Board of Directors to fill a vacancy or
newly created directorship shall hold office until the next election of the
Class for which such director shall have been chosen and until his or her
successor shall have been duly elected and qualified.
Unless otherwise provided in the certificate of incorporation or these
bylaws (including, without limitation, the certificate of incorporation and
bylaws as amended effective upon the closing of a firm commitment underwritten
public offering of any of the corporation's securities pursuant to a
registration statement on Form S-1 under the Securities Act of 1933, as
amended):
(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, 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
(relating to meetings of shareholders).
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
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Section 211 of the General Corporation Law of Delaware (relating to meeting of
shareholders) as far as applicable.
3.5 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; provided, however, that, if
stockholders of the corporation are entitled to cumulative voting, if less than
the entire board is to be removed, no director may be removed without cause if
the votes cast against his removal would be sufficient to elect him if then
cumulatively voted at election of the entire board of directors. Whenever the
holders of any class or series are entitled to elect one or more directors by
the certificate of incorporation, this Section 3.5 shall apply, in respect to
the removal without cause of a director or directors so elected, to the vote of
the holders of the outstanding shares of that class or series and not to the
vote of the outstanding shares as a whole.
Effective upon the closing of a firm commitment underwritten public
offering of any of the corporation's securities pursuant to a registration
statement on Form S-1 under the Securities Act of 1933, as amended, any director
may be removed from office by the stockholders of the corporation only for
cause.
3.6 PLACE OF MEETINGS; MEETINGS BY TELEPHONE
Regular meetings of the board of directors may be held at any place within
or outside the State of Delaware that has been designated from time to time by
resolution of the board. In the absence of such a designation, regular meetings
shall be held at the principal executive office of the corporation. Special
meetings of the board may be held at any place within or outside the State of
Delaware that has been designated in the notice of the meeting or, if not stated
in the notice or if there is no notice, at the principal executive office of the
corporation.
Any meeting of the board, regular or special, may be held by conference
telephone or similar communication equipment, so long as all directors
participating in the meeting can hear one another; and all such participating
directors shall be deemed to be present in person at the meeting.
3.7 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. 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
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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.
3.8 REGULAR MEETINGS
Regular meetings of the board of directors may be held without notice at
such time as shall from time to time be determined by the board of directors.
If any regular meeting day shall fall on a legal holiday, then the meeting shall
be held at the same time and place on the next succeeding full business day.
3.9 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 directors.
Notice of the time and place of special meetings shall be delivered
personally or by telephone to each director or sent by first-class mail,
telecopy or telegram, charges prepaid, addressed to each director at that
director's address as it is shown on the records of the corporation. If the
notice is mailed, it shall be deposited in the United States mail at least four
(4) days before the time of the holding of the meeting. If the notice is
delivered personally or by telephone, telecopy or telegram, it shall be
delivered personally or by telephone or to the telegraph company at least forty-
eight (48) hours before the time of the holding of the meeting. Any oral notice
given personally or by telephone may be communicated either to the director or
to a person at the office of the director who the person giving the notice has
reason to believe will promptly communicate it to the director. The notice need
not specify the purpose or the place of the meeting, if the meeting is to be
held at the principal executive office of the corporation.
3.10 QUORUM
A majority of the authorized number of directors shall constitute a quorum
for the transaction of business, except to adjourn as provided in Section 3.12
of these bylaws. Every act or decision done or made by a majority of the
directors present at a duly held meeting at which a quorum is present shall be
regarded as the act of the board of directors, subject to the provisions of the
certificate of incorporation and applicable law.
A meeting at which a quorum is initially present may continue to transact
business notwithstanding the withdrawal of directors, if any action taken is
approved by at least a majority of the quorum for that meeting.
3.11 WAIVER OF NOTICE
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Notice of a meeting need not be given to any director (i) who signs a
waiver of notice, whether before or after the meeting, or (ii) who attends the
meeting other than 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. All such waivers shall be filed with the corporate records
or made part of the minutes of the meeting. A waiver of notice need not specify
the purpose of any regular or special meeting of the board of directors.
3.12 ADJOURNMENT
A majority of the directors present, whether or not constituting a quorum,
may adjourn any meeting of the board to another time and place.
3.13 NOTICE OF ADJOURNMENT
Notice of the time and place of holding an adjourned meeting of the board
need not be given unless the meeting is adjourned for more than twenty-four (24)
hours. If the meeting is adjourned for more than twenty-four (24) hours, then
notice of the time and place of the adjourned meeting shall be given before the
adjourned meeting takes place, in the manner specified in Section 3.9 of these
bylaws, to the directors who were not present at the time of the adjournment.
3.14 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING
Any action required or permitted to be taken by the board of directors may
be taken without a meeting, provided that all members of the board individually
or collectively consent in writing to that action. Such action by written
consent shall have the same force and effect as a unanimous vote of the board of
directors. Such written consent and any counterparts thereof shall be filed
with the minutes of the proceedings of the board of directors.
3.15 FEES AND COMPENSATION OF DIRECTORS
Directors and members of committees may receive such compensation, if any,
for their services and such reimbursement of expenses as may be fixed or
determined by resolution of the board of directors. This Section 3.15 shall not
be construed to preclude any director from serving the corporation in any other
capacity as an officer, agent, employee or otherwise and receiving compensation
for those services.
3.16 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 any of its
subsidiaries, including any officer or employee who is a director of the
corporation or any of its subsidiaries, whenever, in the judgment of the
directors, such loan, guaranty or assistance may reasonably be expected to
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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 contained in this section shall be deemed to
deny, limit or restrict the powers of guaranty or warranty of the corporation at
common law or under any statute.
3.17 SOLE DIRECTOR PROVIDED BY CERTIFICATE OF INCORPORATION
In the event only one director is required by these bylaws or the
certificate of incorporation, then any reference herein to notices, waivers,
consents, meetings or other actions by a majority or quorum of the directors
shall be deemed to refer to such notice, waiver, etc., by such sole director,
who shall have all the rights and duties and shall be entitled to exercise all
of the powers and shall assume all the responsibilities otherwise herein
described as given to the board of directors.
3.18 NOMINATION OF DIRECTORS; STOCKHOLDER BUSINESS AT ANNUAL MEETINGS
Subject to the rights of holders of any class or series of stock having a
preference over the Common Stock as to dividends or upon liquidation,
nominations for the election of directors may be made by the board of directors
or any nominating committee appointed by the board of directors or by any
stockholder entitled to be in the election of directors generally. However, a
stockholder generally entitled to vote in the election of directors may nominate
one or more persons for election as directors at a meeting only if written
notice of such stockholder's intent to make such nomination or nominations has
been given, either by personal delivery or by U.S. mail, postage prepaid, to the
secretary of the corporation not later than (i) with respect to an election to
be held at an annual meeting of stockholders, 60 days in advance of such meeting
and (ii) with respect to an election to be held at a special meeting of
stockholders for the election of directors, the close of business on the seventh
day following the date on which notice of such meeting is first given to
stockholders. Each such notice shall set forth the following information: (a)
the name and address of the stockholder who intends to make the nomination and
of the person or persons to be nominated; (b) a representation that the
stockholder is a holder of record of stock of the corporation entitled to vote
at such meeting and intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the notice; (c) a description of all
arrangements or understandings between the stockholder, each nominee or any
other person or persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the stockholder; (d) such other
information regarding each nominee proposed by such stockholder as would be
required to be included in a proxy statement filed pursuant to the proxy rules
of the Securities and Exchange Commission, had the nominee been nominated, or
intended to be nominated, by the board of directors of the corporation; and (e)
the consent of each nominee to serve as a director of the corporation if so
elected. At the request of the board of directors, any person properly
nominated by the board of directors for election as a director shall furnish to
the secretary of the corporation that information required to be set forth in a
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stockholder's notice of nomination which pertains to the nominee. No person
shall be eligible for election as a director of the corporation unless nominated
in accordance with the procedures set forth herein. A majority of the board of
directors may reject any nomination by a stockholder not timely made or
otherwise not in accordance with the terms of this Section 3.18. If a majority
of the board of directors reasonably determines that the information provided in
a stockholder's notice does not satisfy the informational requirements of this
Section 3.18 in any material respect, the secretary of the corporation shall
promptly notify such stockholder of the deficiency in writing. The stockholder
shall have an opportunity within such period of time, not to exceed ten days
from the date such deficiency notice is given to the stockholder, as a majority
of the board of directors shall reasonably determine. If the deficiency is not
cured within such period, or if a majority of the board of directors reasonably
determines that the additional information provided by the stockholder, together
with the information previously provided, does not satisfy the requirements of
this Section 3.18 in any material respect, then a majority of the board of
directors may reject such stockholder's nomination. The secretary of the
corporation shall notify a stockholder in writing whether the stockholder's
nomination has been made in accordance with the time and information
requirements of this Section 3.18.
At an annual meeting of the stockholders, only such business shall be
conducted as shall have been brought before the meeting (i) by or at the
direction of the chairman of the meeting or (ii) by any stockholder of the
corporation who complies with the notice procedures set forth in this Section
3.18. For business to be properly brought before an annual meeting by a
stockholder, the stockholder must have given timely notice thereof in writing to
the secretary of the corporation. To be timely, a stockholder's notice must be
delivered to or mailed and received at the principal executive offices of the
corporation not less than 60 days prior to the meeting; provided, however, that
in the event that less than 70 days notice or prior public disclosure of the
date of the meeting is given or made to stockholders, notice by the stockholder
to be timely must be received not later than the close of business on the tenth
day following the earlier of the day on which such notice of the date of the
annual meeting was mailed or such public disclosure was made. A stockholder's
notice to the secretary shall set forth as to each matter the stockholder
proposes to bring before the annual meeting the following information: (a) a
brief description of the business desired to be brought before the annual
meeting and the reasons for conducting such business at the annual meeting, (b)
the name and address, as they appear on the corporation's books, of the
stockholder proposing such business, (c) the class and number of shares of the
corporation which are beneficially owned by the stockholder and (d) any material
direct or indirect interest, financial or otherwise of the stockholder or its
affiliates or associates in such business. The board of directors may reject
any stockholder proposal not timely made in accordance with this Section 3.18.
If the board of directors determines that the information provided in a
stockholder's notice does not satisfy the informational requirements hereof, the
secretary of the corporation shall promptly notify such stockholder of the
deficiency in the notice. The stockholder shall then have an opportunity to
cure the deficiency by providing additional information to the secretary within
such period of time, not to exceed ten days from the date such deficiency notice
is given to the stockholder, as the board of directors shall determine. If the
deficiency is not cured within such period, or if the board of directors
determines that the
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additional information provided by the stockholder, together with the
information previously provided, does not satisfy the requirements of this
Section 3.18, then the board of directors may reject such stockholder's
proposal. The secretary of the corporation shall notify a stockholder in writing
whether the stockholder's proposal has been made in accordance with the time and
information requirements hereof.
This provision shall not prevent the consideration and approval or
disapproval at an annual meeting of reports of officers, directors and
committees of the board of directors, but in connection therewith no new
business shall be acted upon at any such meeting unless stated, filed and
received as herein provided. Notwithstanding anything in these bylaws to the
contrary, no business brought before a meeting by a stockholder shall be
conducted at an annual meeting except in accordance with procedures set forth in
this Section 3.18.
ARTICLE IV
COMMITTEES
4.1 COMMITTEES OF DIRECTORS
The board of directors may, by resolution adopted by a majority of the
authorized number of directors, designate one or more committees, each
consisting of one or more directors, to serve at the pleasure of the board. 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. The appointment of members or alternate members of a committee
requires the vote of a majority of the authorized number of directors. Any
committee, to the extent provided in the resolution of the board, shall have and
may exercise all the powers and authority of the board, 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 the designations and 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 (relating to mergers and consolidations of domestic and foreign
corporations), (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
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adopt a certificate of ownership and merger pursuant to Section 253 of the
General Corporation Law of Delaware (relating to mergers of parent and
subsidiary corporations).
4.2 MEETINGS AND ACTION OF COMMITTEES
Meetings and actions of committees shall be governed by, and held and taken
in accordance with, the following provisions of Article III of these bylaws:
Section 3.6 (place of meetings; meetings by telephone), Section 3.8 (regular
meetings), Section 3.9 (special meetings; notice), Section 3.10 (quorum),
Section 3.11 (waiver of notice), Section 3.12 (adjournment), Section 3.13
(notice of adjournment) and Section 3.14 (board action by written consent
without 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 be determined either by resolution of the board of directors or
by resolution of the committee, that special 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.
4.3 COMMITTEE MINUTES
Each committee shall keep regular minutes of its meetings and report the
same to the board of directors when required.
ARTICLE V
OFFICERS
5.1 OFFICERS
The Corporate Officers of the corporation shall be a president, a secretary
and a chief financial officer. The corporation may also have, at the discretion
of the board of directors, a chairman of the board, one or more vice presidents
(however denominated), one or more assistant secretaries, one or more assistant
treasurers, and 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.
In addition to the Corporate Officers of the Company described above, there
may also be such Administrative Officers of the corporation as may be designated
and appointed from time to time by the president of the corporation in
accordance with the provisions of Section 5.12 of these bylaws.
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5.2 ELECTION OF OFFICERS
The Corporate Officers of the corporation, except such officers as may be
appointed in accordance with the provisions of Section 5.3 or Section 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, and shall hold their
respective offices for such terms as the board of directors may from time to
time determine.
5.3 SUBORDINATE OFFICERS
The board of directors may appoint, or may empower the president to
appoint, such other Corporate Officers as the business of the corporation may
require, each of whom shall hold office for such period, have such power and
authority, and perform such duties as are provided in these bylaws or as the
board of directors may from time to time determine.
The president may from time to time designate and appoint Administrative
Officers of the corporation in accordance with the provisions of Section 5.12 of
these bylaws.
5.4 REMOVAL AND RESIGNATION OF OFFICERS
Subject to the rights, if any, of a Corporate Officer under any contract of
employment, any Corporate Officer may be removed, either with or without cause,
by the board of directors at any regular or special meeting of the board or,
except in case of a Corporate Officer chosen by the board of directors, by any
Corporate Officer upon whom such power of removal may be conferred by the board
of directors.
Any Corporate 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 Corporate
Officer is a party.
Any Administrative Officer designated and appointed by the president may be
removed, either with or without cause, at any time by the president. Any
Administrative Officer may resign at any time by giving written notice to the
president or to the secretary of the corporation.
5.5 VACANCIES IN OFFICES
A vacancy in any office because of death, resignation, removal,
disqualification or any other cause shall be filled in the manner prescribed in
these bylaws for regular appointments to that office.
5.6 CHAIRMAN OF THE BOARD
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The chairman of the board, if such an officer be elected, shall, if
present, preside at meetings of the board of directors and exercise such other
powers and perform such other 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
or she shall preside at all meetings of the stockholders and, in the absence or
nonexistence of a chairman of the board, at all meetings of the board of
directors. He or she 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 perform such other duties as may be prescribed by the board of
directors or these bylaws.
5.8 VICE PRESIDENTS
In the absence or disability of the president, and if there is no chairman
of the board, 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.
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 the board of directors,
committees of directors and stockholders. 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
stockholders' 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 stockholders
and their addresses, the number and classes of shares held by each, the
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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 stockholders and of the board of directors required to be given by law or by
these bylaws. He or she 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.
5.10 CHIEF FINANCIAL OFFICER
The chief financial officer 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 for a purpose reasonably related to
his position as a director.
The chief financial officer 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 or she 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 or
her transactions as chief financial officer 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, if any, or, if there is more than one, the
assistant secretaries in the order determined by the 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
may from time to time prescribe.
5.12 ADMINISTRATIVE OFFICERS
In addition to the Corporate Officers of the corporation as provided in
Section 5.1 of these bylaws and such subordinate Corporate Officers as may be
appointed in accordance with Section 5.3 of these bylaws, there may also be such
Administrative Officers of the corporation as may be designated and appointed
from time to time by the president of the corporation. Administrative Officers
shall perform such duties and have such powers as from time to time may be
determined by the president or the board of directors in order to assist the
Corporate Officers in the furtherance of their duties. In the performance of
such duties and the exercise of such powers, however, such Administrative
Officers shall have limited authority to act on behalf
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of the corporation as the board of directors shall establish, including but not
limited to limitations on the dollar amount and on the scope of agreements or
commitments that may be made by such Administrative Officers on behalf of the
corporation, which limitations may not be exceeded by such individuals or
altered by the president without further approval by the board of directors.
5.13 AUTHORITY AND DUTIES OF OFFICERS
In addition to the foregoing powers, authority and duties, all officers of
the corporation shall respectively have such authority and powers 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.
ARTICLE VI
INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES
AND OTHER AGENTS
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 as the same now exists or may hereafter
be amended, indemnify any person against expenses (including attorneys' fees),
judgments, fines, and amounts paid in settlement actually and reasonably
incurred in connection with any threatened, pending or completed action, suit,
or proceeding in which such person was or is a party or is threatened to be made
a party by reason of the fact that such person is or was a director or officer
of the corporation. For purposes of this Section 6.1, a "director" or "officer"
of the corporation shall mean 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.
The corporation shall be required to indemnify a director or officer in
connection with an action, suit, or proceeding (or part thereof) initiated by
such director or officer only if the initiation of such action, suit, or
proceeding (or part thereof) by the director or officer was authorized by the
board of directors of the corporation.
The corporation shall pay the expenses (including attorneys' fees) incurred
by a director or officer of the corporation entitled to indemnification
hereunder in defending any action, suit or proceeding referred to in this
Section 6.1 in advance of its final disposition; provided, however, that payment
of expenses incurred by a director or officer of the corporation in advance of
the final disposition of such action, suit or proceeding shall be made only upon
receipt of an undertaking by the director or officer to repay all amounts
advanced if it should ultimately be
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determined that the director or officer is not entitled to be indemnified under
this Section 6.1 or otherwise.
The rights conferred on any person by this Article shall not be exclusive
of any other rights which such person may have or hereafter acquire under any
statute, provision of the corporation's Certificate of Incorporation, these
bylaws, agreement, vote of the stockholders or disinterested directors or
otherwise.
Any repeal or modification of the foregoing provisions of this Article
shall not adversely affect any right or protection hereunder of any person in
respect of any act or omission occurring prior to the time of such repeal or
modification.
6.2 INDEMNIFICATION OF OTHERS
The corporation shall have the power, to the maximum extent and in the
manner permitted by the General Corporation Law of Delaware as the same now
exists or may hereafter be amended, to indemnify any person (other than
directors and officers) against expenses (including attorneys' fees), judgments,
fines, and amounts paid in settlement actually and reasonably incurred in
connection with any threatened, pending or completed action, suit, or
proceeding, in which such person was or is a party or is threatened to be made a
party by reason of the fact that such person is or was an employee or agent of
the corporation. For purposes of this Section 6.2, an "employee" or "agent" of
the corporation (other than a director or officer) shall mean 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 or her and incurred
by him or her in any such capacity, or arising out of his or her status as such,
whether or not the corporation would have the power to indemnify him or her
against such liability under the provisions of the General Corporation Law of
Delaware.
ARTICLE VII
RECORDS AND REPORTS
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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
stockholders listing their names and addresses and the number and class of
shares held by each stockholder, a copy of these bylaws as amended to date,
accounting books and other records of its business and properties.
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.
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 or her position as a director.
7.3 REPRESENTATION OF SHARES OF OTHER CORPORATIONS
The chairman of the board, if any, the president, any vice president, the
chief financial officer, the secretary or any 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 the
stock of any other corporation or corporations standing in the name of this
corporation. The authority herein granted 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.
7.4 CERTIFICATION AND INSPECTION OF BYLAWS
The original or a copy of these bylaws, as amended or otherwise altered to
date, certified by the secretary, shall be kept at the corporation's principal
executive office and shall be open to inspection by the stockholders of the
corporation, at all reasonable times during office hours.
ARTICLE VII
GENERAL MATTERS
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8.1 RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING
For purposes of determining the stockholders entitled to receive payment of
any dividend or other distribution or allotment of any rights or the
stockholders 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
precede the date upon which the resolution fixing the record date is adopted and
which shall not be more than sixty (60) days before any such action. In that
case, only stockholders of record at the close of business on the date so fixed
are entitled to receive the dividend, distribution or allotment of rights, or to
exercise such rights, as the case may be, notwithstanding any transfer of any
shares on the books of the corporation after the record date so fixed, except as
otherwise provided by law.
If the board of directors does not so fix a record date, then the record
date for determining stockholders for any such purpose shall be at the close of
business on the day on which the board of directors adopts the applicable
resolution.
8.2 CHECKS; DRAFTS; EVIDENCES OF INDEBTEDNESS
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.
8.3 CORPORATE CONTRACTS AND INSTRUMENTS: HOW EXECUTED
The board of directors, except as otherwise provided in these bylaws, may
authorize and empower 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 power and 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.
8.4 STOCK CERTIFICATES; TRANSFER; PARTLY PAID SHARES
The shares of the 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
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vice-chairman of the board of directors, or the president or vice-president, and
by the chief financial officer 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 or
she were such officer, transfer agent or registrar at the date of issue.
Certificates for shares shall be of such form and device as the board of
directors may designate and shall state the name of the record holder of the
shares represented thereby; its number; date of issuance; the number of shares
for which it is issued; a summary statement or reference to the powers,
designations, preferences or other special rights of such stock and the
qualifications, limitations or restrictions of such preferences and/or rights,
if any; a statement or summary of liens, if any; a conspicuous notice of
restrictions upon transfer or registration of transfer, if any; a statement as
to any applicable voting trust agreement; and, if the shares be assessable, or,
if assessments are collectible by personal action, a plain statement of such
facts.
Upon surrender to the secretary or transfer agent of the corporation of a
certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignment 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 upon its books.
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, or 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.
8.5 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 (relating to transfers of stock, stock certificates and uncertificated
stock), 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
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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.
8.6 LOST CERTIFICATES
Except as provided in this Section 8.6, 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 board of
directors may, in case any share certificate or certificate for any other
security is lost, stolen or destroyed, authorize the issuance of replacement
certificates on such terms and conditions as the board may require; the board
may require indemnification of the corporation secured by a bond or other
adequate security sufficient to protect the corporation against any claim that
may be made against it, including any expense or liability, on account of the
alleged loss, theft or destruction of the certificate or the issuance of the
replacement certificate.
8.7 TRANSFER AGENTS AND REGISTRARS
The board of directors may appoint one or more transfer agents or transfer
clerks, and one or more registrars, each of which shall be an incorporated bank
or trust company -- either domestic or foreign, who shall be appointed at such
times and places as the requirements of the corporation may necessitate and the
board of directors may designate.
8.8 CONSTRUCTION; DEFINITIONS
Unless the context requires otherwise, the general provisions, rules of
construction and definitions in the General Corporation Law of Delaware shall
govern the construction of these bylaws. Without limiting the generality of
this provision, as used in these bylaws, the singular number includes the
plural, the plural number includes the singular, and the term "person" includes
both an entity and a natural person.
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. Whenever an amendment or
new bylaw is adopted, it shall be copied in the book of bylaws with the original
bylaws, in the
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appropriate place. If any bylaw is repealed, the fact of repeal with the date of
the meeting at which the repeal was enacted or the filing of the operative
written consent(s) shall be stated in said book.
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EXHIBIT 10.8
GEOSYSTEMS GLOBAL CORPORATION
1995 STOCK OPTION PLAN
AMENDMENT NO. 4
--------------------------
I. Purpose. Reference is made to that certain 1995 Stock Option Plan (the
-------
"Option Plan") of GeoSystems Global Corporation (the "Company"). To the extent
not otherwise defined herein, capitalized terms shall have the meaning accorded
to them in the Option Plan. The Board of the Company has determined it to be in
the best interest of the Company to amend certain provisions of the Option Plan,
and in accordance with applicable law, have adopted resolutions authorizing the
amendment set forth below. To the extent not expressly amended hereby, the
Option Plan shall remain in full force and effect, in accordance with its terms.
II. Amendment of Plan. The Option Plan is amended as follows:
-----------------
(i) Effective immediately the Option Plan is amended to:
(a) Change the name "GeoSystems Global Corporation" to "MapQuest.com,
Inc." each place it appears therein;
(b) Change the term "Internal Revenue Code of 1954" in Article I,
Section 1 to "Internal Revenue Code of 1986";
(c) Delete the third sentence of Article I, Section 2 which
describes the makeup of the Committee which administers the Option Plan
and substitute the following:
The Committee shall consist of not less than two (2) members of the
Board, each of whom shall be an "outside director" within the meaning of
Code Section 162(m) and "non-employee director" within the meaning
<PAGE>
of Rule 16b-3 (or any successor rule or regulation) promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act");
(d) Add the following as the third paragraph of Article I, Section 2:
If the Board does not appoint a Stock Option Committee as provided
above, the Board itself shall administer the Plan and the term "Committee"
shall be deemed to refer to the Board;
(e) Add the following as the second paragraph of Article II, Section
2:
The maximum number of shares of Common Stock subject to Options that
may be granted during any one calendar year to any one individual shall be
limited to One Hundred Fifty Thousand (150,000). To the extent required by
Section 162(m) of the Code and so long as Section 162(m) of the Code is
applicable to persons eligible to participate in the Plan, shares of Common
Stock subject to the foregoing limit with respect to which the related
Option is terminated, surrendered or canceled shall not again be available
for grant under this limit; and
(f) Delete all of the words prior to the colon in the second paragraph
in Article IV, Section 8 regarding the definition of "Change of Control"
and substitute "A Change in Control shall be deemed to have occurred if."
(ii) Effective upon the date the Corporation is required to file reports
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 the
Option Plan is amended
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to delete Article II, Section 4, paragraph (i) which included a repurchase
right by the Corporation with respect to shares issued upon option exercise.
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<PAGE>
EXHIBIT 10.9
MAPQUEST.COM, INC.
EMPLOYEE STOCK PURCHASE PLAN
ARTICLE I
---------
PURPOSE
-------
1.01. PURPOSE. The MAPQUEST.COM, INC. EMPLOYEE STOCK PURCHASE PLAN is
---- -------
intended to provide a method whereby employees of MapQuest.com, Inc. (the
"Company") and its subsidiary corporations will have an opportunity to acquire a
proprietary interest in the Company through the purchase of shares of the Common
Stock of the Company. It is the intention of the Company to have the Plan
qualify as an "employee stock purchase plan" under (S)423 of the Internal
Revenue Code of 1986, as amended (the "Code"). The provisions of the Plan shall
be construed so as to extend and limit participation in a manner consistent with
the requirements of that section of the Code.
ARTICLE II
----------
DEFINITIONS
-----------
2.01 BASE PAY. "Base Pay" means regular straight-time earnings excluding
---- --------
payments for overtime, shift premium, bonuses and other special payments,
commissions and other marketing incentive payments.
2.02 BOARD. "Board of Directors" or "Board" means the Board of Directors
---- -----
of the Company.
2.03 COMMITTEE. "Committee" means the individuals described in Article
---- ---------
XI.
2.04 COMMON STOCK. "Common Stock" means the common stock of the Company.
---- ------------
2.05 DESIGNATED SUBSIDIARY CORPORATION. "Designated Subsidiary
---- ---------------------------------
Corporation" means a Subsidiary Corporation which is designated by the Company's
Board of Directors to participate in the Plan.
2.06 EMPLOYEE. "Employee" means any person who is employed by the Company
---- --------
or a Designated Subsidiary Corporation.
2.07 OFFERINGS AND OFFERING PERIODS. The Plan will be implemented by
---- -------------------------------
"Offerings" of the right to purchase Company Stock through payroll deduction in
consecutive "Offering Periods", each constituting a six month period. Such
Offering
<PAGE>
Periods shall commence as provided in Section 4.01 and shall continue until the
termination of the Plan in accordance with Section 12.05.
2.08 OFFERING COMMENCEMENT DATE. The "Offering Commencement Date" is the
---- --------------------------
first day of an Offering Period during which the NASDAQ system is open for
trading.
2.09 OFFERING TERMINATION DATE. The "Offering Termination Date" is the
---- -------------------------
last day of an Offering Period during which the NASDAQ system is open for
trading.
2.10 SUBSIDIARY CORPORATION. "Subsidiary Corporation" means any present
---- ----------------------
or future corporation which would be a "subsidiary corporation" of the Company
as that term is defined in (S)424 of the Code.
ARTICLE III
-----------
ELIGIBILITY AND PARTICIPATION
-----------------------------
3.01 INITIAL ELIGIBILITY. All Employees are eligible to participate
---- -------------------
hereunder, commencing on any Offering Commencement Date.
3.02 COMMENCEMENT OF PARTICIPATION. An eligible Employee may become a
---- -----------------------------
participant by completing an authorization for a payroll deduction on the form
provided by the Company and filing it with the office of the Human Resources
Director of the Company on or before the date set therefor by the Committee,
which date shall be prior to the Offering Commencement Date for the Offering
Period. Payroll deductions for a participant shall commence on the applicable
Offering Commencement Date when his authorization for a payroll deduction
becomes effective and shall end on the Offering Termination Date of the Offering
to which such authorization is applicable unless sooner terminated by the
participant as provided in Article VIII.
3.03 RESTRICTIONS ON PARTICIPATION. Notwithstanding any provision of the
---- -----------------------------
Plan to the contrary, no Employee shall be granted an option to participate in
the Plan:
(a) if, immediately after the grant, such Employee would own stock,
and/or hold outstanding options to purchase stock, possessing 5% or more of the
total combined voting power or value of all classes of stock of the Company or
any Subsidiary Corporation. (For purposes of this paragraph, the rules of
(S)424(d) of the Code shall apply in determining stock ownership of any
Employee); or
(b) which permits his rights to purchase stock under all employee
stock purchase plans of the Company and its Subsidiary Corporations to accrue at
a rate which exceeds $25,000 in fair market value of the stock (determined at
the time such option is granted) for each calendar year in which such option is
outstanding.
2
<PAGE>
3.04 LEAVE OF ABSENCE. For purposes of participation in the Plan, a
---- ----------------
person on leave of absence shall be deemed to be an Employee for the first 90
days of such leave of absence and such Employee's employment shall be deemed to
have terminated at the close of business on the 90th day of such leave of
absence unless such Employee shall have returned to regular full-time or part-
time employment (as the case may be) prior to the close of business on such 90th
day. Termination by the Company of any Employee's leave of absence, other than
termination of such leave of absence on return to full time or part time
employment, shall terminate an Employee's employment for all purposes of the
Plan and shall terminate such Employee's participation in the Plan and right to
exercise any option.
ARTICLE IV
----------
OFFERINGS
---------
4.01 SEMI-ANNUAL OFFERING PERIODS. The first Offering Period shall be the
---- ----------------------------
six month period beginning on July 1, 1999 and ending on December 31, 1999.
(Provided, however, that the first Offering Period will not begin before the
effective date of the registration statement filed by the Company for the Plan
with the Securities and Exchange Commission.) Subsequent Offering Periods will
begin on January 1 and July 1 of each year.
4.02 REVISED OFFERING PERIODS. In the discretion of the Committee, semi-
---- ------------------------
annual Offering Periods may be divided into quarterly Offering Periods or
combined into annual Offering Periods. The maximum number of shares available
during an Offering Period under Section 10.01 shall be adjusted appropriately.
ARTICLE V
---------
PAYROLL DEDUCTIONS
------------------
5.01 AMOUNT OF DEDUCTION. At the time a participant files his
---- -------------------
authorization for payroll deduction, he shall elect to have deductions made from
his pay on each payday during the Offering Period at the rate of 1, 2, 3, 4, 5,
6, 7, 8, 9 or 10% of his base pay in effect at any such payday.
5.02 PARTICIPANT'S ACCOUNT. All payroll deductions made for a participant
---- ---------------------
shall be credited to his account under the Plan. A participant may not make any
separate cash payment into such account except when on leave of absence and then
only as provided in (S)5.04.
5.03 CHANGES IN PAYROLL DEDUCTIONS. A participant may discontinue his
---- -----------------------------
participation in the Plan as provided in Article VIII, but no other change can
be made during an Offering and, specifically, a participant may not alter the
amount of his payroll deductions for that Offering. The payroll deduction form
may provide that it shall
3
<PAGE>
continue from Offering Period to Offering Period unless changed by a participant
before the beginning of a subsequent Offering Period.
5.04 LEAVE OF ABSENCE. If a participant goes on a leave of absence, such
---- ----------------
participant shall have the right to elect: (a) to withdraw the balance in his
or her account pursuant to (S)7.02, (b) to discontinue contributions to the Plan
but remain a participant in the Plan, or (c) remain a participant in the Plan
during such leave of absence (provided the individual was eligible to
participate at the Offering Commencement Date), authorizing deductions to be
made from payments by the Company or its Designated Subsidiary Corporations to
the participant during such leave of absence and undertaking to make cash
payments to the Plan at the end of each payroll period to the extent that
amounts payable by the Company and its Designated Subsidiary Corporations to
such participant are insufficient to meet such participant's authorized Plan
deductions.
ARTICLE VI
----------
GRANTING OF OPTION
------------------
6.01 NUMBER OF OPTION SHARES. On the Offering Commencement Date of each
---- -----------------------
Offering, a participating Employee shall be deemed to have been granted a
qualified option to purchase on the Offering Termination Date of such Offering
Period (at the Option Price in Section 6.02) the number of shares of the
Company's Common Stock determined by dividing such Employee's payroll deductions
accumulated during such Offering Period and retained in the participant's
account as of the Offering Termination Date by the applicable Option Price.
6.02 OPTION PRICE. The Option Price of Common Stock purchased with
---- ------------
payroll deductions made during an Offering Period for a participant therein
shall be the lower of:
(a) 85% of the closing price of the stock on the Offering
Commencement Date, or (in the event the stock was not traded on such date) the
nearest prior business day on which trading of the Company's Common Stock
occurred, on the NASDAQ National Market System; or
(b) 85% of the closing price of the stock on the Offering Termination
Date, or (in the event the stock was not traded on such date) the nearest prior
business day on which trading of the Company's Common Stock occurred, on the
NASDAQ National Market System. If the Company's Common Stock is not admitted to
trading on the NASDAQ National Market System on any of the aforesaid dates for
which closing prices of the stock are to be determined, then reference shall be
made to the fair market value of the stock on that date, as determined on such
basis as shall be established or specified for the purpose by the Committee.
4
<PAGE>
ARTICLE VII
-----------
EXERCISE OF OPTION
------------------
7.01 AUTOMATIC EXERCISE. Unless a participant gives written notice to the
---- ------------------
Company as hereinafter provided, his option for the purchase of stock with
payroll deductions made during any Offering will be deemed to have been
exercised automatically on the Offering Termination Date applicable to such
Offering, for the purchase of the number of full shares of Common Stock which
the accumulated payroll deductions in his account at that time will purchase at
the applicable Option Price, subject to the maximum stated in Section 10.01.
Except as provided in Section 7.03, any excess in his account at that time will
be refunded to him.
7.02 WITHDRAWAL OF ACCOUNT. By written notice to the Human Resources
---- ---------------------
Director of the Company, at any time prior to the Offering Termination Date
applicable to any Offering, a participant may elect to withdraw all of the
accumulated payroll deductions in his account at such time.
7.03 FRACTIONAL SHARES. Fractional shares will not be issued under the
---- -----------------
Plan. Any accumulated payroll deductions which would have been used to purchase
fractional shares will be carried over and applied to purchase shares in the
succeeding Offering Period, if the Employee elects to participate in such
Offering Period. If not, such excess payroll deductions will be promptly
returned to the Employee.
7.04 TRANSFERABILITY OF OPTION. During a participant's lifetime, options
---- -------------------------
held by such participant shall be exercisable only by that participant.
7.05 DELIVERY OF STOCK. As promptly as practicable after the Offering
---- -----------------
Termination Date of each Offering, the Company will deliver to each participant,
as appropriate, the stock purchased upon exercise of his option.
ARTICLE VIII
------------
WITHDRAWAL
----------
8.01 IN GENERAL. As indicated in (S)7.02, a participant may withdraw
---- ----------
payroll deductions credited to his account under the Plan at any time prior to
an Offering Termination Date by giving written notice to the Human Resources
Director of the Company. All of the participant's payroll deductions credited
to his account will be paid to him promptly after receipt of his notice of
withdrawal, and no further payroll deductions will be made from his pay during
such Offering. The Company may, at its option, treat any attempt to borrow by
an Employee on the security of his accumulated payroll deductions as an
election, under (S)7.02, to withdraw such deductions.
5
<PAGE>
8.02 EFFECT ON SUBSEQUENT PARTICIPATION. A participant's withdrawal from
---- ----------------------------------
any Offering will not have any effect upon his eligibility to participate in any
succeeding Offering or in any similar plan which may hereafter be adopted by the
Company.
8.03 TERMINATION OF EMPLOYMENT. Upon termination of the participant's
---- -------------------------
employment for any reason, including retirement or death (but excluding
continuation of a leave of absence for a period beyond 90 days), the payroll
deductions credited to his account will be returned to him, or, in the case of
his death, to the person or persons entitled thereto under (S)12.01.
ARTICLE IX
----------
INTEREST
--------
9.01 NO PAYMENT OF INTEREST. No interest will be paid or allowed on any
---- ----------------------
money paid into the Plan or credited to the account of any participating
Employee.
ARTICLE X
---------
STOCK
-----
10.01 SHARES SUBJECT TO PLAN. The stock subject to the Plan shall be
----- ----------------------
shares of the Company's Common Stock, which may be (i) authorized but unissued
shares, (ii) treasury shares and/or (iii) shares purchased on the open market by
a broker designated by the Company. The maximum number of shares of Common Stock
which shall be issued under the Plan, subject to adjustment upon changes in
capitalization of the Company as provided in (S)12.04, shall be Four Hundred
Thirty Eight Thousand, Seven Hundred and Fifty (438,750) shares in each Offering
plus in each Offering all unissued shares from prior Offerings, whether offered
or not, not to exceed One Million Seven Hundred Fifty Five Thousand (1,755,000)
shares for all Offerings. No participant may purchase more than One Thousand
Five Hundred (1,500) shares in any one Offering Period. If the total number of
shares for which options are exercised on any Offering Termination Date in
accordance with Article VI exceeds the maximum number of shares for the
applicable offering, the Company shall make a pro rata allocation of the shares
available for delivery and distribution in as nearly a uniform manner as shall
be practicable and as it shall determine to be equitable, and the balance of
payroll deductions credited to the account of each participant under the Plan
shall be returned to him as promptly as possible.
10.02 PARTICIPANT'S INTEREST IN OPTION STOCK. The participant will have
----- --------------------------------------
no interest in stock covered by his option until such option has been exercised.
10.03 ISSUANCE OF STOCK. Stock purchased under the Plan will be issued in
----- -----------------
the name of the participant, or, if the participant so directs by written notice
to the Human Resources Director of the Company prior to the Offering Termination
Date applicable thereto, in the names of the participant and one such other
person as may be designated
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<PAGE>
by the participant, as joint tenants with rights of survivorship or as tenants
by the entireties, to the extent permitted by applicable law.
10.04 RESTRICTIONS ON EXERCISE. The Board of Directors may, in its
----- ------------------------
discretion, require as conditions to the exercise of any option that the shares
of Common Stock reserved for issuance upon the exercise of the option shall have
been duly listed, upon official notice of issuance, upon a stock exchange, and
that either:
(a) a registration statement under the Securities Act of 1933, as
amended, with respect to said shares shall be effective, or
(b) the participant shall have represented at the time of purchase,
in form and substance satisfactory to the Company, that it is his intention to
purchase the shares for investment and not for resale or distribution.
ARTICLE XI
----------
ADMINISTRATION
--------------
11.01 APPOINTMENT OF COMMITTEE. The Board of Directors shall appoint a
----- ------------------------
committee (the "Committee") to administer the Plan, which shall consist of
either (a) the full Board of Directors or (b) no fewer than two members of the
Board of Directors.
11.02 AUTHORITY OF COMMITTEE. Subject to the express provisions of the
----- ----------------------
Plan, the Committee shall have plenary authority in its discretion to interpret
and construe any and all provisions of the Plan, to adopt rules and regulations
for administering the Plan, and to make all other determinations deemed
necessary or advisable for administering the Plan. The Committee's
determination on the foregoing matters shall be conclusive.
11.03 RULES GOVERNING THE ADMINISTRATION OF THE COMMITTEE. The Board of
----- ---------------------------------------------------
Directors may from time to time appoint members of the Committee in substitution
for or in addition to members previously appointed and may fill vacancies,
however caused, in the Committee. The Committee may select one of its members
as its Chairman and shall hold its meetings at such times and places as it shall
deem advisable and may hold telephonic meetings. A majority of its members
shall constitute a quorum. All determinations of the Committee shall be made by
a majority of its members. The Committee may correct any defect or omission or
reconcile any inconsistency in the Plan, in the manner and to the extent it
shall deem desirable. Any decision or determination reduced to writing and
signed by a majority of the members of the Committee shall be as fully effective
as if it had been made by a majority vote at a meeting duly called and held.
The Committee may appoint a secretary and shall make such rules and regulations
for the conduct of its business as it shall deem advisable.
11.04 LIMITED LIABILITY; INDEMNIFICATION. To the maximum extent permitted
----- ----------------------------------
by Delaware law, neither the Company, Board or Committee nor any of its members
shall be
7
<PAGE>
liable for any action or determination made in good faith with respect to this
Plan. In addition to such other rights of indemnification that they may have,
the members of the Board and Committee shall be indemnified by the Company to
the maximum extent permitted by Delaware law against any and all liabilities and
expenses incurred in connection with their service in connection with the Plan
in such capacity.
ARTICLE XII
-----------
MISCELLANEOUS
-------------
12.01 DESIGNATION OF BENEFICIARY. A participant may file a written
----- --------------------------
designation of a beneficiary who is to receive any Common Stock which has not
been issued or cash which is in the participant's account at the time of the
participant's death. Such designation of beneficiary may be changed by the
participant at any time by written notice to the Human Resources Director of the
Company. Upon the death of a participant and upon receipt by the Company of
proof of identity and existence at the participant's death of a beneficiary
validly designated by him under the Plan, the Company shall deliver such stock
and/or cash to such beneficiary. In the event of the death of a participant and
in the absence of a beneficiary validly designated under the Plan who is living
at the time of such participant's death, the Company shall deliver such stock
and/or cash to the executor or administrator of the estate of the participant,
or if no such executor or administrator has been appointed (to the knowledge of
the Company), the Company, in its discretion, may deliver such stock and/or cash
to the spouse or to any one or more dependents of the participant as the Company
may designate. No beneficiary shall, prior to the death of the participant by
whom he has been designated, acquire any interest in the stock or cash credited
to the participant under the Plan.
12.02 TRANSFERABILITY. Neither payroll deductions credited to a
----- ---------------
participant's account nor any rights with regard to the exercise of an option or
to receive stock under the Plan may be assigned, transferred, pledged, or
otherwise disposed of in any way by the participant other than by will or the
laws of descent and distribution. Any such attempted assignment, transfer,
pledge or other disposition shall be without effect, except that the Company may
treat such act as an election to withdraw funds in accordance with (S)7.02.
12.03 USE OF FUNDS. All payroll deductions received or held by the
----- ------------
Company under this Plan may be used by the Company for any corporate purpose and
the Company shall not be obligated to segregate such payroll deductions.
12.04 ADJUSTMENT UPON CHANGES IN CAPITALIZATION.
----- -----------------------------------------
(a) If, while any options are outstanding, the outstanding shares of
Common Stock of the Company have increased, decreased, changed into, or been
exchanged for a different number or kind of shares or securities of the Company
through reorganization, merger, recapitalization, reclassification, stock split,
reverse stock split or
8
<PAGE>
similar transaction, appropriate and proportionate adjustments may be made by
the Committee in the number and/or kind of shares which are subject to purchase
under outstanding options and on the option exercise price or prices applicable
to such outstanding options. In addition, in any such event, the maximum number
and/or kind of shares which may be offered in the Offerings described in
Articles IV and Section 10.01 hereof shall also be proportionately adjusted. No
adjustments shall be made for stock dividends. For the purposes of this
Paragraph, any distribution of shares to shareholders in an amount aggregating
20% or more of the outstanding shares shall be deemed a stock split and any
distributions of shares aggregating less than 20% of the outstanding shares
shall be deemed a stock dividend.
(b) Upon the dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation of the Company with one or more
corporations as a result of which the Company is not the surviving corporation,
or upon a sale of substantially all of the property or stock of the Company to
another corporation, the Committee shall take such action as it deems
appropriate and equitable, which action may include, without limitation, one of
the following: (i) refund of payroll deductions for such Offering Period; (ii)
shortening of the Offering Period or (iii) providing that the holder of each
option then outstanding under the Plan will thereafter be entitled to receive at
the next Offering Termination Date upon the exercise of such option for each
share as to which such option shall be exercised, as nearly as reasonably may be
determined, the cash, securities and/or property which a holder of one share of
the Common Stock was entitled to receive upon and at the time of such
transaction. In the event the Plan is continued after such event, the Board of
Directors shall take such steps in connection with such transactions as the
Board shall deem necessary to assure that the provisions of this (S)12.04 shall
thereafter be applicable, as nearly as reasonably may be determined, in relation
to the said cash, securities and/or property as to which such holder of such
option might thereafter be entitled to receive.
12.05 AMENDMENT AND TERMINATION.
----- -------------------------
(a) Action by Board. The Board of Directors shall have complete
power and authority to terminate or amend the Plan; provided, however, that the
Board of Directors shall not, without the approval of the stockholders of the
Company (i) increase the maximum number of shares which may be issued under the
Plan or under any Offering (except pursuant to (S)(S)4.02 and 12.04); or (ii)
amend the requirements as to the class of employees eligible to purchase stock
under the Plan. Upon termination of the Plan during an Offering Period, at the
discretion of the Committee, cash balances in participants accounts may be
refunded or the Offering Termination Date may be accelerated. No termination,
modification, or amendment of the Plan may otherwise, without the consent of an
Employee then having an option under the Plan to purchase stock, adversely
affect the rights of such Employee under such option.
(b) Automatic Termination. The Plan shall automatically terminate on
the earlier of the day prior to the tenth anniversary of the adoption of the
Plan, or the
9
<PAGE>
issuance of the maximum number of shares available under the Plan pursuant to
Section 10.01.
12.06 TAX WITHHOLDING. At the time an option is exercised or at the time
----- ---------------
some or all of the Company's Common Stock issued under the Plan is disposed of,
the participant must make adequate provision for the Company's federal, state,
or other tax withholding obligations, if any, which arise upon the exercise of
the option or the disposition of the Common Stock. At the request of the
Company, the participant will advance cash in an amount sufficient to discharge
any such tax withholding obligations. At any time, the Company may, but shall
not be obligated to, withhold from the participant's compensation the amount
necessary for the Company to meet applicable withholding obligations.
12.07 DISQUALIFYING DISPOSITION. The Committee may require that a
----- -------------------------
participant notify the Company of any disposition of shares of Common Stock
purchased under the Plan within a period of two (2) years subsequent to the
respective Offering Commencement Date or one (1) year from the Offering
Termination Date.
12.08 EFFECTIVE DATE. The Plan shall become effective as of the date it
----- --------------
is adopted by the Board of Directors, subject to approval by the shareholders of
the Company within twelve months before or after such date. If the Plan is not
so approved, the Plan shall be discontinued, any options which had been issued
shall be considered nonqualified options and any payroll deductions then held by
the Company shall be refunded to the respective Employees.
12.09 NO EMPLOYMENT RIGHTS. The Plan does not, directly or indirectly,
----- --------------------
create in any Employee or class of Employees any right with respect to
continuation of employment by the Company, and it shall not be deemed to
interfere in any way with the Company's right to terminate, or otherwise modify,
an Employee's employment at any time.
12.10 EXCLUSION FROM RETIREMENT AND FRINGE BENEFIT COMPUTATION. No
----- ---------------------------------------------
portion of the award of options under this Plan, or the proceeds from the sale
of stock purchased under the Plan, shall be taken into account as "wages,"
"salary" or "compensation" for any purpose, whether in determining eligibility,
benefits or otherwise, under (i) any pension, retirement, profit sharing or
other qualified or non-qualified plan of deferred compensation, (ii) any
employee welfare or fringe benefit plan including, but not limited to, group
insurance, hospitalization, medical, and disability, or (iii) any form of
extraordinary pay including, but not limited to, bonuses, sick pay and vacation
pay.
12.11 EFFECT OF PLAN. The provisions of the Plan shall, in accordance
----- --------------
with its terms, be binding upon, and inure to the benefit of, all successors of
each Employee participating in the Plan, including, without limitation, such
Employee's estate and the
10
<PAGE>
executors, administrators or trustees thereof, heirs and legatees, and any
receiver, trustee in bankruptcy or representative of creditors of such Employee.
12.12 EXPENSES. Expenses of administering the Plan shall be borne by the
----- --------
Company except that brokerage expenses incurred in connection with the purchase
of shares shall be included as part of the cost of the shares to participating
Employees.
12.13 GOVERNING LAW. The law of the State of Delaware will govern all
----- -------------
matters relating to this Plan except to the extent it is superseded by the laws
of the United States.
11
<PAGE>
EXHIBIT 10.10
MAPQUEST.COM, INC.
1999 STOCK PLAN
1. ESTABLISHMENT, PURPOSE AND TYPES OF AWARDS
MapQuest.com, Inc. hereby establishes the MAPQUEST.COM, INC. 1999 STOCK
PLAN (the "Plan"). The purpose of the Plan is to promote the long-term growth
and profitability of MapQuest.com, Inc. (the "Corporation") by (i) providing key
people with incentives to improve stockholder value and to contribute to the
growth and financial success of the Corporation, and (ii) enabling the
Corporation to attract, retain and reward the best available persons for
positions of substantial responsibility.
The Plan permits the granting of stock options (including nonqualified
stock options and incentive stock options qualifying under Section 422 of the
Code), stock appreciation rights (including free-standing, tandem and limited
stock appreciation rights), restricted or unrestricted share awards, phantom
stock, performance awards, or any combination of the foregoing (collectively,
"Awards").
The Plan is a compensatory benefit plan within the meaning of Rule 701
under the Securities Act of 1933 (the "Securities Act"). Except to the extent
any other exemption from the Securities Act is expressly relied upon in
connection with any agreement entered into pursuant to the Plan or the
securities issuable hereunder are registered under the Securities Act, the
issuance of Common Stock pursuant to the Plan is intended to qualify for the
exemption from registration under the Securities Act provided by Rule 701. To
the extent that an exemption from registration under the Securities Act provided
by Rule 701 is unavailable, all unregistered offers and sales of Awards and
shares of Common Stock issuable upon exercise of an Award are intended to be
exempt from registration under the Securities Act in reliance upon the private
offering exemption contained in Section 4(2) of the Securities Act, or other
available exemption, and the Plan shall be so administered.
2. DEFINITIONS
Under this Plan, except where the context otherwise indicates, the
following definitions apply:
(a) "Award" shall mean any stock option, stock appreciation right, stock
award, phantom stock award, or performance award.
(b) "Board" shall mean the Board of Directors of the Corporation.
(c) "Change in Control" shall mean (i) any sale, exchange or other
disposition of substantially all of the Corporation's assets; or (ii) any
merger, share exchange, consolidation or other reorganization or business
combination in which the Corporation is not the surviving or continuing
corporation, or in which the Corporation's stockholders become entitled to
receive cash, securities of the Corporation other than voting common stock, or
securities of another issuer.
<PAGE>
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended, and
any regulations issued thereunder.
(e) Committee" shall mean the compensation committee of the Board;
provided, however, that in the event all the members of such compensation
committee do not constitute both "Non-Employee Directors" within the meaning of
Rule 16b-3 and "outside directors" within the meaning of Section 162(m) of the
Code, than the term "Committee" shall mean such other committee of two or more
Board members appointed by the Board to administer the Plan whose members do
constitute both "Non-Employee Directors" within the meaning of Rule 16b-3 and,
to the extent that Section 162(m) of the Code is applicable to Awards granted
under the Plan, "outside directors" within the meaning of Section 162(m) of the
Code.
(f) "Common Stock" shall mean shares of the Corporation's common stock, par
value of $0.001 per share.
(g) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(h) "Fair Market Value" of a share of the Corporation's Common Stock for
any purpose on a particular date shall be determined in a manner such as the
Committee shall in good faith determine to be appropriate; provided, however,
that if the Common Stock is publicly traded, then Fair Market Value shall mean
the last reported sale price per share of Common Stock, regular way, or, in case
no such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on a national securities exchange or included for quotation on the
Nasdaq-National Market, or if the Common Stock is not so listed or admitted to
trading or included for quotation, the last quoted price, or if the Common Stock
is not so quoted, the average of the high bid and low asked prices, regular way,
in the over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System or, if such system is no
longer in use, the principal other automated quotations system that may then be
in use or, if the Common Stock is not quoted by any such organization, the
average of the closing bid and asked prices, regular way, as furnished by a
professional market maker making a market in the Common Stock as selected in
good faith by the Committee or by such other source or sources as shall be
selected in good faith by the Committee; and provided further, that in the case
of incentive stock options, the determination of Fair Market Value shall be made
by the Committee in good faith in conformance with the Treasury Regulations
under Section 422 of the Code. If, as the case may be, the relevant date is not
a trading day, the determination shall be made as of the next preceding trading
day. As used herein, the term "trading day" shall mean a day on which public
trading of securities occurs and is reported in the principal consolidated
reporting system referred to above, or if the Common Stock is not listed or
admitted to trading on a national securities exchange or included for quotation
on the Nasdaq-National Market, any day other than a Saturday, a Sunday or a day
in which banking institutions in the State of New York are closed.
(i) "Grant Agreement" shall mean a written agreement between the
Corporation and a grantee memorializing the terms and conditions of an Award
granted pursuant to the Plan.
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<PAGE>
(j) "Grant Date" shall mean the date on which the Committee formally acts
to grant an Award to a grantee or such other date as the Committee shall so
designate at the time of taking such formal action.
(k) "Parent" shall mean a corporation, whether now or hereafter existing,
within the meaning of the definition of "parent corporation" provided in Section
424(e) of the Code, or any successor thereto of similar import.
(l) "Rule 16b-3" shall mean Rule 16b-3 as in effect under the Exchange Act
on the effective date of the Plan, or any successor provision prescribing
conditions necessary to exempt the issuance of securities under the Plan (and
further transactions in such securities) from Section 16(b) of the Exchange Act.
(m) "Subsidiary" and "subsidiaries" shall mean only a corporation or
corporations, whether now or hereafter existing, within the meaning of the
definition of "subsidiary corporation" provided in Section 424(f) of the Code,
or any successor thereto of similar import.
3. ADMINISTRATION
(a) Procedure. The Plan shall be administered by a Committee appointed by
the Board consisting of not less than two (2) members of the Board to administer
the Plan on behalf of the Board, subject to such terms and conditions as the
Board may prescribe. Once appointed, the Committee shall continue to serve until
otherwise directed by the Board. From time to time, the Board may increase the
size of the Committee and appoint additional members thereof, remove members
(with or without cause) and appoint new members in substitution therefor, fill
vacancies, however caused, and remove all members of the Committee and,
thereafter, directly administer the Plan. In the event that the Board is the
administrator of the Plan in lieu of a Committee, the term "Committee" as used
herein shall be deemed to mean the Board.
Members of the Committee who are either eligible for Awards or have been
granted Awards may vote on any matters affecting the administration of the Plan
or the grant of Awards pursuant to the Plan, except that no such member shall
act upon the granting of an Award to himself or herself, but any such member may
be counted in determining the existence of a quorum at any meeting of the
Committee during which action is taken with respect to the granting of an Award
to him or her.
The Committee shall meet at such times and places and upon such notice as
it may determine. A majority of the Committee shall constitute a quorum. Any
acts by the Committee may be taken at any meeting at which a quorum is present
and shall be by majority vote of those members entitled to vote. Additionally,
any acts reduced to writing or approved in writing by all of the members of the
Committee shall be valid acts of the Committee.
(b) Procedure After Registration of Common Stock. Notwithstanding the
provisions of subsection (a) above, unless the Board itself is deemed to be the
Committee, in the event that the Common Stock or any other capital stock of the
Corporation becomes registered under Section 12 of the Exchange Act, the members
of the Committee shall be both "Non-Employee Directors" within the meaning of
Rule 16b-3, and "outside directors" within the meaning of Section 162(m) of the
Code. Upon and after the point in time that the Common
-3-
<PAGE>
Stock or any other capital stock of the Corporation becomes registered under
Section 12 of the Exchange Act, the Board shall take all action necessary to
cause the Plan to be administered in accordance with the then effective
provisions of Rule 16b-3, provided that any amendment to the Plan required for
compliance with such provisions shall be made in accordance with Section 13 of
the Plan.
(c) Powers of the Committee. The Committee shall have all the powers
vested in it by the terms of the Plan, such powers to include authority, in its
sole and absolute discretion, to grant Awards under the Plan, prescribe Grant
Agreements evidencing such Awards and establish programs for granting Awards.
The Committee shall have full power and authority to take all other actions
necessary to carry out the purpose and intent of the Plan, including, but not
limited to, the authority to:
(i) determine the eligible persons to whom, and the time or times at
which Awards shall be granted,
(ii) determine the types of Awards to be granted,
(iii) determine the number of shares to be covered by or used for
reference purposes for each Award,
(iv) impose such terms, limitations, restrictions and conditions upon
any such Award as the Committee shall deem appropriate,
(v) modify, extend or renew outstanding Awards, accept the surrender of
outstanding Awards and substitute new Awards, provided that no such action
shall be taken with respect to any outstanding Award which would adversely
affect the grantee without the grantee's consent,
(vi) accelerate or otherwise change the time in which an Award may be
exercised or becomes payable and to waive or accelerate the lapse, in whole
or in part, of any restriction or condition with respect to such Award,
including, but not limited to, any restriction or condition with respect to
the vesting or exercisability of an Award following termination of any
grantee's employment, and
(vii) to establish objectives and conditions, if any, for earning Awards
and determining whether Awards will be paid after the end of a performance
period.
The Committee shall have full power and authority to administer and interpret
the Plan and to adopt such rules, regulations, agreements, guidelines and
instruments for the administration of the Plan and for the conduct of its
business as the Committee deems necessary or advisable and to interpret same,
all within the Committee's sole and absolute discretion.
(d) Limited Liability. To the maximum extent permitted by law, no member
of the Board or Committee shall be liable for any action taken or decision made
in good faith relating to the Plan or any Award thereunder.
-4-
<PAGE>
(e) Indemnification. To the maximum extent permitted by law, the members
of the Board and Committee shall be indemnified by the Corporation in respect of
all their activities under the Plan.
(f) Effect of Committee's Decision. All actions taken and decisions and
determinations made by the Committee on all matters relating to the Plan
pursuant to the powers vested in it hereunder shall be in the Committee's sole
and absolute discretion and shall be conclusive and binding on all parties
concerned, including the Corporation, its stockholders, any participants in the
Plan and any other employee of the Corporation, and their respective successors
in interest.
4. SHARES AVAILABLE FOR THE PLAN; MAXIMUM AWARDS
Subject to adjustments as provided in Section 12 of the Plan, the shares of
Common Stock that may be delivered or purchased or used for reference purposes
(with respect to stock appreciation rights, phantom stock units or performance
awards payable in cash) with respect to Awards granted under the Plan, including
with respect to incentive stock options intended to qualify under Section 422 of
the Code, shall not exceed an aggregate of Three Million Six Hundred and Forty-
Five Thousand (3,645,000) shares of Common Stock of the Corporation. The
Corporation shall reserve said number of shares for Awards under the Plan,
subject to adjustments as provided in Section 12 of the Plan. If any Award, or
portion of an Award, under the Plan expires or terminates unexercised, becomes
unexercisable or is forfeited or otherwise terminated, surrendered or canceled
as to any shares without the delivery of shares of Common Stock or other
consideration, the shares subject to such Award shall thereafter be available
for further Awards under the Plan unless such shares would not be deemed
available for future grants pursuant to Rule 16b-3 of the General Rules and
Regulations under the Exchange Act, or any successor rule or regulation ("Rule
16b-3").
The maximum number of shares of Common Stock subject to Awards of any
combination that may be granted during any one calendar year to any one
individual shall be limited to Nine Hundred and Eleven Thousand Two Hundred and
Fifty (911,250). To the extent required by Section 162(m) of the Code and so
long as Section 162(m) of the Code is applicable to persons eligible to
participate in the Plan, shares of Common Stock subject to the foregoing limit
with respect to which the related Award is terminated, surrendered or canceled
shall not again be available for grant under this limit.
5. PARTICIPATION
Participation in the Plan shall be open to all employees, officers,
directors and consultants of the Corporation, or of any Parent or Subsidiary of
the Corporation, as may be selected by the Committee from time to time.
Notwithstanding the foregoing, participation in the Plan with respect to Awards
of incentive stock options shall be limited to employees of the Corporation or
of any Parent or Subsidiary of the Corporation.
Awards may be granted to such eligible persons and for or with respect to
such number of shares of Common Stock as the Committee shall determine, subject
to the limitations in Section 4 of the Plan. A grant of any type of Award made
in any one year to an eligible person shall neither guarantee nor preclude a
further grant of that or any other type of Award to such person in that year or
subsequent years.
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6. STOCK OPTIONS
Subject to the other applicable provisions of the Plan, the Committee may
from time to time grant to eligible participants Awards of nonqualified stock
options or incentive stock options as that term is defined in Section 422 of the
Code. The stock option Awards granted shall be subject to the following terms
and conditions.
(a) Grant of Option. The grant of a stock option shall be evidenced by a
Grant Agreement, executed by the Corporation and the grantee, stating the number
of shares of Common Stock subject to the stock option evidenced thereby and the
terms and conditions of such stock option, in such form as the Committee may
from time to time determine.
(b) Price. The price per share payable upon the exercise of each stock
option ("exercise price") shall be determined by the Committee; provided,
however, that in the case of incentive stock options, the exercise price shall
not be less than 100% of the Fair Market Value of the shares on the date the
stock option is granted.
(c) Payment. Stock options may be exercised in whole or in part by payment
of the exercise price of the shares to be acquired in accordance with the
provisions of the Grant Agreement, and/or such rules and regulations as the
Committee may have prescribed, and/or such determinations, orders, or decisions
as the Committee may have made. Payment may be made in cash (or cash equivalents
acceptable to the Committee) or, if allowed by the Committee in its sole
discretion, in shares of Common Stock or a combination of cash and shares of
Common Stock, or by such other means as the Committee may prescribe. The Fair
Market Value of shares of Common Stock delivered on exercise of stock options
shall be determined as of the date of exercise. Shares of Common Stock delivered
in payment of the exercise price may be previously owned shares or, if approved
by the Committee, shares acquired upon exercise of the stock option. Any
fractional share will be paid in cash. The Corporation may make or guarantee
loans to grantees to assist grantees in exercising stock options and satisfying
any related withholding tax obligations.
If the Common Stock is registered under Section 12(b) or 12(g) of the
Exchange Act, the Committee, subject to such limitations as it may determine,
may authorize payment of the exercise price, in whole or in part, by delivery of
a properly executed exercise notice, together with irrevocable instructions, to:
(i) a brokerage firm designated by the Corporation to deliver promptly to the
Corporation the aggregate amount of sale or loan proceeds to pay the exercise
price and any withholding tax obligations that may arise in connection with the
exercise, and (ii) the Corporation to deliver the certificates for such
purchased shares directly to such brokerage firm.
(d) Terms of Options. The term during which each stock option may be
exercised shall be determined by the Committee. In no event shall a stock option
be exercisable more than ten years from the date it is granted. Prior to the
exercise of the stock option and delivery of the shares certificates represented
thereby, the grantee shall have none of the rights of a stockholder with respect
to any shares represented by an outstanding stock option.
(e) Reload Options. The terms of a stock option may provide for the
automatic grant of a new stock option Award when the exercise price of the stock
option and/or any related tax withholding obligation is paid by tendering shares
of Common Stock, provided that such automatic replenishment feature shall be
limited to any extent required by rules,
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regulations, or interpretations under the Exchange Act with respect to any
particular grant of an Award in the case of a grantee who is or becomes subject
to Section 16 of the Exchange Act. Any stock option Award which would
automatically be granted pursuant to this Section 6(e) without any further
Committee action may be exercisable for not more than the number of shares
tendered to exercise the initial stock option and/or to pay any tax withholding
obligation related to such exercise, shall have an exercise price set at the
then Fair Market Value of such shares, and shall have a term that does not
extend beyond the term of the initial stock option. The Committee may include
such a reload feature in a stock option Award at the time of the initial grant
of the Award or may add such a reload feature to an outstanding stock option
Award as the Committee deems desirable; provided, however, that a reload feature
shall not be added to any outstanding incentive stock option Award without the
consent of the grantee.
(f) Restrictions on Incentive Stock Options. Incentive stock option Awards
granted under the Plan shall comply in all respects with Code Section 422 and,
as such, shall meet the following additional requirements:
(i) Grant Date. An incentive stock option must be granted within 10
years of the earlier of the Plan's adoption by the Board of Directors or
approval by the Corporation's shareholders.
(ii) Exercise Price and Term. The exercise price of an incentive stock
option shall not be less than 100% of the Fair Market Value of the shares
on the date the stock option is granted and the term of an incentive stock
option may not be greater than 10 years. Also, the exercise price of any
incentive stock option granted to a grantee who owns (within the meaning of
Section 422(b)(6) of the Code, after the application of the attribution
rules in Section 424(d) of the Code) more than 10% of the total combined
voting power of all classes of shares of the Corporation or its Parent or
Subsidiary corporations (within the meaning of Sections 422 and 424 of the
Code) shall be not less than 110% of the Fair Market Value of the Common
Stock on the grant date and the term of such stock option shall not exceed
five years.
(iii) Maximum Grant. The aggregate Fair Market Value (determined as of
the Grant Date) of shares of Common Stock with respect to which all
incentive stock options first become exercisable by any grantee in any
calendar year under this or any other plan of the Corporation and its
Parent and Subsidiary corporations may not exceed $100,000 or such other
amount as may be permitted from time to time under Section 422 of the Code.
To the extent that such aggregate Fair Market Value shall exceed $100,000,
or other applicable amount, such stock options shall be treated as
nonqualified stock options. In such case, the Corporation may designate the
shares of Common Stock that are to be treated as stock acquired pursuant to
the exercise of an incentive stock option by issuing a separate certificate
for such shares and identifying the certificate as incentive stock option
shares in the stock transfer records of the Corporation.
(iv) Grantee. Incentive stock options shall only be issued to
employees of the Corporation, or of a Parent or Subsidiary of the
Corporation.
(v) Designation. No stock option shall be an incentive stock option
unless so designated by the Committee at the time of grant or in the Grant
Agreement evidencing such stock option.
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(g) Other Terms and Conditions. Stock options may contain such other
provisions, not inconsistent with the provisions of the Plan, as the Committee
shall determine appropriate from time to time.
7. STOCK APPRECIATION RIGHTS
(a) Award of Stock Appreciation Rights. Subject to the other applicable
provisions of the Plan, the Committee may at any time and from time to time
grant stock appreciation rights ("SARs") to eligible participants, either on a
free-standing basis (without regard to or in addition to the grant of a stock
option) or on a tandem basis (related to the grant of an underlying stock
option), as it determines. SARs granted in tandem with or in addition to a stock
option may be granted either at the same time as the stock option or at a later
time; provided, however, that a tandem SAR shall not be granted with respect to
any outstanding incentive stock option Award without the consent of the grantee.
SARs shall be evidenced by Grant Agreements, executed by the Corporation and the
grantee, stating the number of shares of Common Stock subject to the SAR
evidenced thereby and the terms and conditions of such SAR, in such form as the
Committee may from time to time determine. The term during which each SAR may be
exercised shall be determined by the Committee. In no event shall a SAR be
exercisable more than ten years from the date it is granted. The grantee shall
have none of the rights of a stockholder with respect to any shares of Common
Stock represented by an SAR.
(b) Restrictions of Tandem SARs. No incentive stock option may be
surrendered in connection with the exercise of a tandem SAR unless the Fair
Market Value of the Common Stock subject to the incentive stock option is
greater than the exercise price for such incentive stock option. SARs granted in
tandem with stock options shall be exercisable only to the same extent and
subject to the same conditions as the stock options related thereto are
exercisable. The Committee may, in its discretion, prescribe additional
conditions to the exercise of any such tandem SAR.
(c) Amount of Payment Upon Exercise of SARs. An SAR shall entitle the
grantee to receive, subject to the provisions of the Plan and the Grant
Agreement, a payment having an aggregate value equal to the product of (i) the
excess of (A) the Fair Market Value on the exercise date of one share of Common
Stock over (B) the base price per share specified in the Grant Agreement (which
shall be determined by the Committee but which shall not be less than 100% of
the Fair Market Value of one share of Common Stock on the date of grant of the
SAR), times (ii) the number of shares specified by the SAR, or portion thereof,
which is exercised. In the case of exercise of a tandem SAR, such payment shall
be made in exchange for the surrender of the unexercised related stock option
(or any portion or portions thereof which the grantee from time to time
determines to surrender for this purpose).
(d) Form of Payment Upon Exercise of SARs. Payment by the Corporation of
the amount receivable upon any exercise of an SAR may be made by the delivery of
Common Stock or cash, or any combination of Common Stock and cash, as determined
in the sole discretion of the Committee from time to time. If upon settlement of
the exercise of an SAR a grantee is to receive a portion of such payment in
shares of Common Stock, the number of shares shall be determined by dividing
such portion by the Fair Market Value of a share of Common Stock on the exercise
date. No fractional shares shall be used for such payment and the Committee
shall determine whether cash shall be given in lieu of such fractional shares or
whether such fractional shares shall be eliminated.
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8. STOCK AWARDS (INCLUDING RESTRICTED AND UNRESTRICTED SHARES AND PHANTOM
STOCK)
(a) Stock Awards, In General. Subject to the other applicable provisions of
the Plan, the Committee may at any time and from time to time grant stock Awards
to eligible participants in such amounts and for such consideration, including
no consideration or such minimum consideration as may be required by law, as it
determines. A stock Award may be denominated in shares of Common Stock or stock-
equivalent units ("phantom stock"), and may be paid in Common Stock, in cash, or
in a combination of Common Stock and cash, as determined in the sole discretion
of the Committee from time to time.
(b) Restricted Shares. Each stock Award shall specify the applicable
restrictions, if any, on such shares of Common Stock, the duration of such
restrictions, and the time or times at which such restrictions shall lapse with
respect to all or a specified number of shares of Common Stock that are part of
the Award. Notwithstanding the foregoing, the Committee may reduce or shorten
the duration of any restriction applicable to any shares of Common Stock awarded
to any grantee under the Plan. Share certificates with respect to restricted
shares of Common Stock granted pursuant to a stock Award may be issued at the
time of grant of the stock Award, subject to forfeiture if the restrictions do
not lapse, or upon lapse of the restrictions. If share certificates are issued
at the time of grant of the stock Award, the certificates shall bear an
appropriate legend with respect to the restrictions applicable to such stock
Award or, alternatively, the grantee may be required to deposit the certificates
with the Corporation during the period of any restriction thereon and to execute
a blank stock power or other instrument of transfer therefor. Except as
otherwise provided by the Committee, during such period of restriction following
issuance of share certificates, the grantee shall have all of the rights of a
holder of Common Stock, including but not limited to the rights to receive
dividends (or amounts equivalent to dividends) and to vote with respect to the
restricted shares. If share certificates are issued upon lapse of restrictions
on a stock Award, the Committee may provide that the grantee will be entitled to
receive any amounts per share pursuant to any dividend or distribution paid by
the Corporation on its Common Stock to stockholders of record after grant of the
stock Award and prior to the issuance of the share certificates.
(c) Phantom Stock. The grant of phantom stock units shall be evidenced by a
Grant Agreement, executed by the Corporation and the grantee, that incorporates
the terms of the Plan and states the number of phantom stock units evidenced
thereby and the terms and conditions of such phantom stock units in such form as
the Committee may from time to time determine. Phantom stock units granted to a
participant shall be credited to a bookkeeping reserve account solely for
accounting purposes and shall not require a segregation of any of the
Corporation's assets. Phantom stock units may be exercised in whole or in part
by delivery of an appropriate exercise notice to the Committee in accordance
with the provisions of the Grant Agreement, and/or such rules and regulations as
the Committee may prescribe, and/or such determinations, orders, or decisions as
the Committee may make. Except as otherwise provided in the applicable Grant
Agreement, the grantee shall have none of the rights of a stockholder with
respect to any shares of Common Stock represented by a phantom stock unit as a
result of the grant of a phantom stock unit to the grantee. Phantom stock units
may contain such other provisions, not inconsistent with the provisions of the
Plan, as the Committee shall determine appropriate from time to time.
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9. PERFORMANCE AWARDS
The Committee may in its discretion grant performance Awards which become
payable on account of attainment of one or more performance goals established by
the Committee. Performance Awards may be paid by the delivery of Common Stock
or cash, or any combination of Common Stock and cash, as determined in the sole
discretion of the Committee from time to time. Performance goals established by
the Committee may be based on the Corporation's operating income or one or more
other business criteria selected by the Committee that apply to an individual or
group of individuals, a business unit, or the Corporation as a whole, over such
performance period as the Committee may designate. The Committee in its
discretion may recommend to the Board of Directors of the Corporation that the
material terms of any Performance Award or program with respect to some or all
eligible participants be submitted for approval by the stockholders.
10. WITHHOLDING OF TAXES
The Corporation may require, as a condition to the grant of any Award under
the Plan or exercise pursuant to such Award or to the delivery of certificates
for shares issued or payments of cash to a grantee pursuant to the Plan or a
Grant Agreement (hereinafter collectively referred to as a "taxable event"),
that the grantee pay to the Corporation, in cash or, unless otherwise determined
by the Corporation, in shares of Common Stock, including shares acquired upon
grant of the Award or exercise of the Award, valued at Fair Market Value on the
date as of which the withholding tax liability is determined, any federal, state
or local taxes of any kind required by law to be withheld with respect to any
taxable event under the Plan. The Corporation, to the extent permitted or
required by law, shall have the right to deduct from any payment of any kind
(including salary or bonus) otherwise due to a grantee any federal, state or
local taxes of any kind required by law to be withheld with respect to any
taxable event under the Plan, or to retain or sell without notice a sufficient
number of the shares to be issued to such grantee to cover any such taxes.
11. TRANSFERABILITY
Unless determined otherwise by the Committee and in any event in the case
of an incentive stock option or a stock appreciation right granted with respect
to an incentive stock option, no Award granted under the Plan shall be
transferable by a grantee otherwise than by will or the laws of descent and
distribution. Unless otherwise determined by the Committee in accord with the
provisions of the immediately preceding sentence, an Award may be exercised
during the lifetime of the grantee, only by the grantee or, during the period
the grantee is under a legal disability, by the grantee's guardian or legal
representative.
12. ADJUSTMENTS; BUSINESS COMBINATIONS
In the event of a reclassification, recapitalization, stock split, stock
dividend, combination of shares, or other similar event, the maximum number and
kind of shares reserved for issuance or with respect to which Awards may be
granted under the Plan as provided in Section 4 shall be adjusted to reflect
such event, and the Committee shall make such adjustments as it deems
appropriate and equitable in the number, kind and price of shares covered by
outstanding Awards made under the Plan, and in any other matters which relate to
Awards and which are affected by the changes in the Common Stock referred to
above.
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In the event of any proposed Change in Control, the Committee shall take
such action as it deems appropriate and equitable to effectuate the purposes of
this Plan and to protect the grantees of Awards, which action may include, but
without limitation, any one or more of the following: (i) acceleration or
change of the exercise dates of any Award; (ii) arrangements with grantees for
the payment of appropriate consideration to them for the cancellation and
surrender of any Award; and (iii) in any case where equity securities other than
Common Stock of the Corporation are proposed to be delivered in exchange for or
with respect to Common Stock of the Corporation, arrangements providing that any
Award shall become one or more Awards with respect to such other equity
securities.
The Committee is authorized to make adjustments in the terms and conditions
of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, the events described in the
preceding two paragraphs of this Section 12) affecting the Corporation, or the
financial statements of the Corporation or any Subsidiary, or of changes in
applicable laws, regulations, or accounting principles, whenever the Committee
determines that such adjustments are appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan.
In the event the Corporation dissolves and liquidates (other than pursuant
to a plan of merger or reorganization), then notwithstanding any restrictions on
exercise set forth in this Plan or any Grant Agreement, or other agreement
evidencing a stock option, stock appreciation right or restricted stock Award:
(i) each grantee shall have the right to exercise his stock option or stock
appreciation right, or to require delivery of share certificates representing
any such restricted stock Award, at any time up to ten (10) days prior to the
effective date of such liquidation and dissolution; and (ii) the Committee may
make arrangements with the grantees for the payment of appropriate consideration
to them for the cancellation and surrender of any stock option, stock
appreciation right or restricted stock Award that is so canceled or surrendered
at any time up to ten (10) days prior to the effective date of such liquidation
and dissolution. The Committee may establish a different period (and different
conditions) for such exercise, delivery, cancellation, or surrender to avoid
subjecting the grantee to liability under Section 16(b) of the Exchange Act.
Any stock option or stock appreciation right not so exercised, canceled, or
surrendered shall terminate on the last day for exercise prior to such effective
date; and any restricted stock as to which there has not been such delivery of
share certificates or that has not been so canceled or surrendered, shall be
forfeited on the last day prior to such effective date. The Committee shall
give to each grantee written notice of the commencement of any proceedings for
such liquidation and dissolution of the Corporation and the grantee's rights
with respect to his outstanding Award.
13. TERMINATION AND MODIFICATION OF THE PLAN
The Board, without further approval of the stockholders, may modify or
terminate the Plan or any portion thereof at any time, except that no
modification shall become effective without prior approval of the stockholders
of the Corporation if stockholder approval is necessary to comply with any tax
or regulatory requirement or rule of any exchange or Nasdaq System upon which
the Common Stock is listed or quoted; including for this purpose stockholder
approval that is required for continued compliance with Rule 16b-3 or
stockholder approval that is required to enable the Committee to grant incentive
stock options pursuant to the Plan.
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The Committee shall be authorized to make minor or administrative
modifications to the Plan as well as modifications to the Plan that may be
dictated by requirements of federal or state laws applicable to the Corporation
or that may be authorized or made desirable by such laws. The Committee may
amend or modify the grant of any outstanding Award in any manner to the extent
that the Committee would have had the authority to make such Award as so
modified or amended.
14. NON-GUARANTEE OF EMPLOYMENT
Nothing in the Plan or in any Grant Agreement thereunder shall confer any
right on an employee to continue in the employ of the Corporation or shall
interfere in any way with the right of the Corporation to terminate an employee
at any time.
15. Termination of Employment
For purposes of maintaining a grantee's continuous status as an employee
and accrual of rights under any Award, transfer of an employee among the
Corporation and the Corporation's Parent or Subsidiaries shall not be considered
a termination of employment. Nor shall it be considered a termination of
employment for such purposes if an employee is placed on military or sick leave
or such other leave of absence which is considered as continuing intact the
employment relationship; in such a case, the employment relationship shall be
continued until the date when an employee's right to reemployment shall no
longer be guaranteed either by law or contract.
16. WRITTEN AGREEMENT
Each Grant Agreement entered into between the Corporation and a grantee
with respect to an Award granted under the Plan shall incorporate the terms of
this Plan and shall contain such provisions, consistent with the provisions of
the Plan, as may be established by the Committee.
17. NON-UNIFORM DETERMINATIONS
The Committee's determinations under the Plan (including without limitation
determinations of the persons to receive Awards, the form, amount and timing of
such Awards, the terms and provisions of such Awards and the agreements
evidencing same) need not be uniform and may be made by it selectively among
persons who receive, or are eligible to receive, Awards under the Plan, whether
or not such persons are similarly situated.
18. LIMITATION ON BENEFITS
With respect to persons subject to Section 16 of the Exchange Act,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3. To the extent any provision of the Plan or action by
the Committee fails to so comply, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by the Committee.
19. LISTING AND REGISTRATION
If the Corporation determines that the listing, registration or
qualification upon any securities exchange or upon any listing or quotation
system established by the National
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Association of Securities Dealers, Inc. ("Nasdaq System") or under any law, of
shares subject to any Award is necessary or desirable as a condition of, or in
connection with, the granting of same or the issue or purchase of shares
thereunder, no such Award may be exercised in whole or in part and no
restrictions on such Award shall lapse, unless such listing, registration or
qualification is effected free of any conditions not acceptable to the
Corporation.
20. COMPLIANCE WITH SECURITIES LAW
The Corporation may require that a grantee, as a condition to exercise of
an Award, and as a condition to the delivery of any share certificate, provide
to the Corporation, at the time of each such exercise and each such delivery, a
written representation that the shares of Common Stock being acquired shall be
acquired by the grantee solely for investment and will not be sold or
transferred without registration or the availability of an exemption from
registration under the Securities Act and applicable state securities laws. The
Corporation may also require that a grantee submit other written representations
which will permit the Corporation to comply with federal and applicable state
securities laws in connection with the issuance of the Common Stock, including
representations as to the knowledge and experience in financial and business
matters of the grantee and the grantee's ability to bear the economic risk of
the grantee's investment. The Corporation may require that the grantee obtain a
"purchaser representative" as that term is defined in applicable federal and
state securities laws. The stock certificates for any shares of Common Stock
issued pursuant to this Plan may bear a legend restricting transferability of
the shares of Common Stock unless such shares are registered or an exemption
from registration is available under the Securities Act and applicable state
securities laws. The Corporation may notify its transfer agent to stop any
transfer of shares of Common Stock not made in compliance with these
restrictions. Common Stock shall not be issued with respect to an Award granted
under the Plan unless the exercise of such Award and the issuance and delivery
of share certificates for such Common Stock pursuant thereto shall comply with
all relevant provisions of law, including, without limitation, the Securities
Act, the Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any national securities exchange or Nasdaq System upon which the
Common Stock may then be listed or quoted, and shall be further subject to the
approval of counsel for the Corporation with respect to such compliance to the
extent such approval is sought by the Committee.
21. NO LIMIT ON OTHER COMPENSATION ARRANGEMENTS
Nothing contained in the Plan shall prevent the Corporation or its Parent
or Subsidiary corporations from adopting or continuing in effect other
compensation arrangements (whether such arrangements be generally applicable or
applicable only in specific cases) as the Committee in its discretion determines
desirable, including without limitation the granting of stock options, stock
awards, stock appreciation rights or phantom stock units otherwise than under
the Plan.
22. NO TRUST OR FUND CREATED
Neither the Plan nor any Award shall create or be construed to create a
trust or separate fund of any kind or a fiduciary relationship between the
Corporation and a grantee or any other person. To the extent that any grantee
or other person acquires a right to receive payments from the Corporation
pursuant to an Award, such right shall be no greater than the right of any
unsecured general creditor of the Corporation.
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23. GOVERNING LAW
The validity, construction and effect of the Plan, of Grant Agreements
entered into pursuant to the Plan, and of any rules, regulations, determinations
or decisions made by the Board or Committee relating to the Plan or such Grant
Agreements, and the rights of any and all persons having or claiming to have any
interest therein or thereunder, shall be determined exclusively in accordance
with applicable federal laws and the laws of the State of Delaware, without
regard to its conflict of laws rules and principles.
24. PLAN SUBJECT TO CHARTER AND BY-LAWS
This Plan is subject to the Charter and By-Laws of the Corporation, as they
may be amended from time to time.
25. EFFECTIVE DATE; TERMINATION DATE
The Plan is effective as of the date on which the Plan was adopted by the
Board, subject to approval of the stockholders within twelve months before or
after such date. No Award shall be granted under the Plan after the close of
business on the day immediately preceding the tenth anniversary of the effective
date of the Plan. Subject to other applicable provisions of the Plan, all
Awards made under the Plan prior to such termination of the Plan shall remain in
effect until such Awards have been satisfied or terminated in accordance with
the Plan and the terms of such Awards.
Date Approved by the Board: ________________________
Date Approved by the Shareholders: ___________________
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EXHIBIT 10.11
================================================================================
RECAPITALIZATION AGREEMENT
by and among
MAPQUEST.COM, INC.
and
THE OTHER SECURITY HOLDERS PARTY HERETO
-------------------------------
Dated as of April ____, 1999
-------------------------------
================================================================================
<PAGE>
Table of Contents
-----------------
ARTICLE I
Section 1.1. DEFINITIONS
ARTICLE IIREPRESENTATIONS AND WARRANTIES OF THE COMPANY
Page
Section 2.1. Due Authorization......................................... 5
Section 2.2. Authority; No Conflicts................................... 5
Section 2.3. Capital Stock............................................. 6
Section 2.4. Other Representations..................................... 6
ARTICLE IIIREPRESENTATIONS AND WARRANTIES OF THE OTHER PARTIES
Section 3.1. Due Authorization......................................... 7
Section 3.2. Authority; No Conflicts................................... 7
Section 3.3. Capital Stock............................................. 7
Section 3.4. Purchase of Shares........................................ 8
Section 3.5. Disclosure of Information................................. 8
Section 3.6. Investment Experience; Accredited Investor Status......... 8
Section 3.7. Accuracy of Registration Statement Disclosure............. 8
ARTICLE IVTHE CLOSING; EFFECTIVENESS
Section 4.1. Closing................................................... 8
Section 4.2. Effectiveness of this Agreement........................... 8
ARTICLE VTHE RECAPITALIZATION
Section 5.1. General................................................... 9
Section 5.2. Preferred Stock........................................... 9
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Section 5.3. Amended Charter Documents................................. 10
Section 5.4. Stock Split............................................... 10
Section 5.5. Amendment, Waiver and Release of Series C Preferred Stock
Purchase Agreement....................................... 10
Section 5.6. Waivers of Registration Rights and Piggy-Back
Registration Rights...................................... 10
Section 5.7. Termination of Rights of First Offer and Co-Sale.......... 11
Section 5.8. Termination of Affirmative Covenants...................... 11
Section 5.9. Termination of Voting Agreement for Board of Directors.... 11
Section 5.10. Option Plans............................................. 11
Section 5.11. Board of Directors and Committees........................ 11
Section 5.12. Directors Compensation................................... 12
Section 5.13. D & O Insurance and Indemnities.......................... 12
Section 5.14. Lock-Ups and Waivers..................................... 12
Section 5.15. Stockholder Consents..................................... 12
Section 5.16. Insider Trading Policy................................... 13
Section 5.17. National Geographic Acknowledgment and Agreement......... 13
ARTICLE VICONDITIONS OF THE PARTIES(OTHER THAN THE COMPANY) OBLIGATIONS
Section 6.1. Conditions of the Securityholders' Obligations............ 13
Section 6.2. Delivery of closing documents; acknowledgement............ 14
ARTICLE VIICONDITIONS OF THE COMPANY'S OBLIGATIONS
Section 7.1. Conditions of the Company's Obligations................... 14
ARTICLE VIIIMISCELLANEOUS
Section 8.1. Notices................................................... 15
Section 8.2. Consent to Amendments and Waivers......................... 15
Section 8.3. Successors and Assigns.................................... 15
Section 8.4. Survival.................................................. 16
Section 8.5. Attorneys' Fees........................................... 16
Section 8.6. Ratification of Prior Acts of Board of Directors
of Company............................................... 16
Section 8.7. LITIGATION; SPECIFIC PERFORMANCE.......................... 16
Section 8.8. WAIVER OF JURY TRIAL; ARBITRATION......................... 16
Section 8.9. Counterparts.............................................. 17
-ii-
<PAGE>
SCHEDULES
---------
1. Stockholder Chart
2. Lock-Up Parties
EXHIBITS
--------
A-1 First 1999 Amendment to Charter
A-2 Second 1999 Amendment to Charter
B Amended Company By-Laws
C Directors Fee Policy
D Director Indemnification Agreements
E-1 1999 Stock Option Plan
E-2 1999 Stock Option Plan Option Issuances
F Employee Stock Purchase Plan
G Amendment No. 4 to 1995 Stock Option Plan
H-1 Directors
H-2 Audit Committee Members
H-3 Compensation Committee Members
H-4 Pricing Committee Members
I Stockholder Written Consent in Lieu of a Meeting
J Insider Trading Policy
-iii-
<PAGE>
RECAPITALIZATION AGREEMENT
RECAPITALIZATION AGREEMENT, dated as of April _____, 1999, by and among
MapQuest.com, Inc., a Delaware corporation and formerly known as GeoSystems
Global Corporation (the "Company"), and the other stockholders, optionholders
-------
and warrantholders of the Company named on the signature pages hereto (such
other stockholders, optionholders and warrantholders, are collectively referred
to as the "Securityholders", and the Securityholders, together with the Company,
---------------
are referred to as the "Parties").
-------
R E C I T A L S
- - - - - - - -
The Parties desire to recapitalize the Company, and in connection
therewith, the Company have filed a Registration Statement on Form S-1 (No. 333-
72667) (as amended or supplemented, and including all financial statements and
exhibits thereto, the "Registration Statement") relating to the proposed Common
----------------------
Stock Offering (this and other capitalized terms used and not defined in these
recitals shall have the meaning given such terms in Article I) by the Company.
More specifically, the recapitalization ("Recapitalization") includes the
----------------
following primary components: (a) the Common Stock Offering by the Company; (b)
the Company's redemption of 1,354,802 of shares of Series B Preferred Stock of
the Company, par value $0.01 per share held by the Series B Preferred Stock
Investors (the "Series B Preferred Stock"); (c) the conversion of (i) 6,550,000
------------------------
shares of the Company's Series A Preferred Stock, par value $0.01 per share (the
"Series A Preferred Stock"), and (ii) 3,495,354 shares of the Company's Series C
------------------------
Preferred Stock, par value $0.01 per share (the "Series C Preferred Stock"),
------------------------
into 10,045,354 shares (prior to the stock split referred to in class (e)) of
Common Stock in the aggregate (the "Preferred Exchange"); (d) the 2.7 for one
------------------
stock split (the "Stock Split") of the Company's Common Stock, par value $0.001
-----------
per share, (e) the termination of the Rights Agreement (including the covenants
and other agreements therein) to the extent provided herein, (f) all other
related transactions, agreements and instruments contemplated by this Agreement
and/or described, and based upon the assumptions described, in the Registration
Statement.
It is a condition to the engagement of the Underwriters in the Common Stock
Offering that this Agreement is executed and delivered prior to the distribution
of the Company's preliminary prospectus in respect of the Common Stock Offering.
In order to implement the Recapitalization, the parties hereto agree as
follows:
ARTICLE I
Section 1.1 DEFINITIONS
<PAGE>
As used in this Agreement, the following terms shall have the meanings
specified below:
"Amended Company Charter" means the Company's Restated Certificate of
-----------------------
Incorporation, as amended by the First 1999 Amendment to Charter and the Second
1999 Amendment to Charter.
"Amended By-Laws" means the Company's By-laws substantially in the form of
---------------
Exhibit B hereto.
- ---------
"Amendment No. 4 to 1995 Stock Option Plan" means Amendment No. 4 to the
-----------------------------------------
1995 Stock Option Plan substantially in the form of Exhibit G hereto.
---------
"Anti-Dilution Warrants" means the 522,230 warrants granted to certain
----------------------
Series C Preferred Stock Investors to purchase shares of Common Stock at an
exercise price of $.004 per share pursuant to the Agreement, dated as of May 9,
1998, among the Company and the Series C Preferred Stock Investors named
therein.
"Closing" has the meaning specified in Section 4.1.
------- -----------
"Closing Time" has the meaning specified in Section 4.1.
------------ -----------
"Common Stock" has the meaning specified in the recitals to this Agreement.
------------
"Common Stock Offering" shall mean the initial public offering of 4,600,000
---------------------
shares (and 690,000 additional shares pursuant to over-allotment options) of
Common Stock by the Underwriters pursuant to the Registration Statement.
"Company" has the meaning specified in the preamble to this Agreement.
-------
"Consultant Warrant" means the warrant granted to Ramsey/Beirne Associates,
------------------
Inc. to purchase 41,265 shares of Common Stock at an exercise price of $1.30 per
share pursuant to the warrant agreement, effective as of September 22 1998.
"Director Indemnification Agreements" means the Director Indemnification
-----------------------------------
Agreements substantially in the form of Exhibit D hereto.
---------
"Director's Fee Policy" means the Company's Director Fee Policy
---------------------
substantially in the form of Exhibit C hereto.
---------
"Employee Stock Purchase Plan" means the Employee Stock Purchase Plan of
----------------------------
the Company substantially in the form of Exhibit F hereto.
-2-
<PAGE>
"Equity Securities" of the Company means the Series A Preferred Stock,
-----------------
Series B Preferred Stock, Series C Preferred Stock, Common Stock, options under
the 1995 Stock Plan and the 1999 Stock Plan, the Warrants, and capital stock of
the Company issuable upon conversion, exchange or exercise thereof or as
dividends thereon.
"First 1999 Amendment to Charter" means the amendment to the Restated
-------------------------------
Certificate of Incorporation of the Company substantially in the form of Exhibit
A-1 hereto.
"Liens" means any security interest, lien, charge, restriction, encumbrance
-----
or other interest of another Person.
"Material Adverse Effect" means any circumstances or event that (i) has, or
-----------------------
may be reasonably expected to have, any materially adverse effect upon the
validity or enforceability of this Agreement or any of the other
Recapitalization Documents, or (ii) is, or may be reasonably expected to be,
materially adverse to the condition (financial or otherwise), business,
operations or property of the Company and its subsidiaries, taken as a whole.
"National Geographic Warrant" means the warrants to purchase 954,147 shares
---------------------------
of common stock with an exercise price of $1.04 per share pursuant to the NG
Agreement.
"NG Agreement" means the Carthographic Product Development Publishing,
------------
Marketing and Distribution Agreement, dated as of April 22, 1997, between the
Company, NGE Inc. d/b/a National Geographic Maps and the National Geographic
Society.
"1995 Stock Option Plan" means the Company's 1995 Stock Option Plan, as
----------------------
amended by Amendments Numbers 1 through 4 thereto.
"1999 Stock Plan" means the 1999 Stock Plan of the Company substantially in
---------------
the form of Exhibit E hereto.
---------
"Parties" has the meaning specified in the preamble to this Agreement.
------- --------
"Person" means any individual, corporation, partnership, joint venture,
------
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof or any other entity.
"Preferred Exchange" has the meaning specified in the recitals to this
------------------
Agreement.
"Preferred Stock" means the Company's Preferred Stock, par value $.01 per
---------------
share, the terms of which are described in the Amended Company Charter.
-3-
<PAGE>
"Prudential Warrant" means the Common Stock Purchase Warrant, dated July,
------------------
1997, granted by the Company to Prudential Securities Incorporated to purchase
406,709 shares of Common Stock at an exercise price of $1.30 per share.
"Recapitalization" has the meaning specified in the recitals to this
----------------
Agreement.
"Recapitalization Documents" means this Agreement (including all Schedules
--------------------------
and Exhibits hereto) and each of the agreements, actions, instruments, consents
and documents referred to in Sections 5.2 through 5.16, the Registration
------------ ----
Statement, and the Underwriting Agreement.
"Registrable Securities" has the meaning given such term in the Rights
----------------------
Agreement.
"Registration Statement" has the meaning specified in the recitals to this
----------------------
Agreement.
"Rights Agreement" means the Amended and Restated Rights Agreement, dated
----------------
as of July 17, 1997, among the Company and the Stockholders named therein.
"Second 1999 Amendment to Charter" means the amendment to the Restated
--------------------------------
Certificate of Incorporation of the Company substantially in the form of Exhibit
A-2 hereto.
"Series A Preferred Stock" has the meaning specified in the recitals to
------------------------
this Agreement.
"Series B Preferred Stock" has the meaning specified in the Recitals to
------------------------
this Agreement.
"Series C Preferred Stock" has the meaning specified in the recitals to
------------------------
this Agreement.
"Series C Preferred Stock Investors" means the holders of the Series C
----------------------------------
Preferred Stock, as of the date hereof.
"Series C Preferred Stock Purchase Agreement" means the Series C
-------------------------------------------
Convertible Preferred Stock Purchase Agreement, dated as of July 17, 1997, among
the Company and the Series C Preferred Stock Investors.
"Stockholder Chart" means the stockholder chart described in Section 2.3
----------------- -----------
and set forth as Schedule 1 hereto.
----------
"Stock Split" has the meaning specified in the recitals to this Agreement.
-----------
"Stockholders" means the holders, as of the date hereof, of Series A
------------
Preferred Stock, the Series B Preferred Stock, the Series C Preferred Stock and
Common Stock.
"Trident Warrants" means the Common Stock Purchase Warrants granted by the
----------------
Company (i) to Trident Partners Capital Fund-I, L.P. to purchase 325,805 shares
of Common
-4-
<PAGE>
Stock at an exercise price of $0.004 per share and (ii) to Trident Partners
Capital Fund-I, C.V. to purchase 64,451 shares of Common Stock at an exercise
price of $0.004 per share, in each case dated November 2, 1994.
"Underwriters" means BancBoston Robertson Stephens, Inc., US Bancorp Piper
------------
Jaffray Inc., Thomas Weisel Partners LLC and Volpe Brown Whelan & Company, LLC.
"Underwriting Agreement" means the Common Stock Offering Underwriting
----------------------
Agreement, to be entered into, among the Company and the Underwriters.
"Warrants" means the National Geographic Warrant, the Prudential Warrant,
--------
the Trident Warrants, the Consultant Warrant and the Anti-Dilution Warrants.
Section 1.2 Construction. References to agreements are to such agreements
------------
as amended from time to time. Unless otherwise specified, references to numbers
of Equity Securities are to such Equity Securities, as adjusted by the Stock
Split.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to each of the other Parties to this
Agreement, as of the Closing Date, as follows:
Section 2.1 Due Authorization. The Company is duly organized, validly
-----------------
existing corporation under the laws of the State of Delaware. Each of this
Agreement and the other Recapitalization Documents have been duly authorized,
executed and delivered by the Company, as required, and each of this Agreement
and such other Recapitalization Documents is a legal, valid and binding
obligation of the Company, enforceable against the Company, in accordance with
its terms, except as enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting the enforceability of creditors' rights generally and by general
principles of equity (whether arising under a proceeding at law or in equity).
The Amended Company Charter will have been duly filed with the Secretary of
State of the State of Delaware prior to the Common Stock Offering.
Section 2.2 Authority; No Conflicts. The Company has the corporate power
-----------------------
and authority and the legal right to make, deliver and perform, and has taken
all necessary corporate action to authorize the transactions contemplated by,
this Agreement and the other Recapitalization Documents and to conduct their
respective businesses as described in the Registration Statement. Neither the
execution and delivery of this Agreement or the other Recapitalization Documents
nor the consummation of any of the transactions contemplated herein or therein
nor compliance with the terms and provisions hereof or thereof (a) violates or
-5-
<PAGE>
will violate any law or regulation or any order or decree of any court or
government instrumentality applicable to the Company or any of their respective
subsidiaries or properties, except such violations as would not, in the
aggregate, have a Material Adverse Effect, or (b) conflicts with or would result
in the breach of, or constitutes a default under, any contract, lease,
indenture, loan agreement, mortgage, deed of trust or other agreement or
instrument to which the Company or any of its subsidiaries, is a party or by
which any of them or any of their respective assets may be bound, except such
conflicts, breaches or defaults as have been waived or consents therefor have
been obtained or such conflicts, breaches or defaults as would not, in the
aggregate, have a Material Adverse Effect. No consent, approval, authorization
or order is presently required in connection with the execution and delivery of
this Agreement or the Recapitalization Documents by the Company or the
consummation of the transactions contemplated hereby or thereby that has not
been obtained, except for such consents, approvals, authorizations or orders as
would not, in the aggregate, have a Material Adverse Effect.
Section 2.3 Capital Stock.
-------------
(a) At the Closing Time and upon the Recapitalization (including the
Stock Split), the Company's authorized capital stock shall consist of
100,000,000 shares of Common Stock (of which 32,166,699 shares are
outstanding), 5,000,000 shares of Preferred Stock (of which zero shares are
outstanding). At the Closing Time, the Company will have reserved for
issuance 5,907,453 shares of common stock issuable upon exercise of
outstanding options, 2,314,612 shares of common stock issuable upon
exercise of outstanding warrants, 188,959 shares of common stock reserved
for future issuance under the 1995 Stock Option Plan; 3,645,000 shares of
common stock that have been reserved for future issuance under the 1999
Stock Plan; and 1,755,000 shares of common stock that have been reserved
for future issuance under the Employee Stock Purchase Plan.
(b) Set forth on Schedule 1 hereto (the "Stockholder Chart") is a
---------- -----------------
true, complete and correct chart showing, among other things, (a) the
record ownership of the Company's Equity Securities prior to the
Recapitalization, and (b) the record ownership of the Company's Equity
Securities after giving pro forma effect to the Recapitalization, including
the Common Stock Offering and the redemption of the Series B Redeemable
Preferred Stock, the conversion into Common Stock on a one for one share
basis of the Series A Convertible Preferred Stock and the Series C
Convertible Preferred Stock, and the issuance of options under the 1999
Stock Plan as contemplated by this Agreement.
Section 2.4 Other Representations. The representations and warranties of
---------------------
the Company set forth in the Underwriting Agreement, taken as a whole, are true
and correct in all material respects, except to the extent of any waivers,
modifications or supplements thereunder.
-6-
<PAGE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE OTHER PARTIES
Each of the Parties to this Agreement (other than the Company) represent
and warrant, severally as to themselves and not jointly, to each of the other
Parties to this Agreement, as of the Closing Date, as follows:
Section 3.1 Due Authorization. Each of this Agreement and the other
-----------------
Recapitalization Documents to which such Party is a party have been duly
authorized, executed and delivered by such Party, as required, and each of this
Agreement and such other Recapitalization Documents is a legal, valid and
binding obligation of such Party, enforceable against such Party, in accordance
with its terms, except as enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting the enforceability of creditors' rights generally and by general
principles of equity (whether arising under a proceeding at law or in equity).
Section 3.2 Authority; No Conflicts. Such Party has the power and
-----------------------
authority and the legal right to make, deliver and perform, and has taken all
necessary corporate action to authorize the transactions contemplated by, this
Agreement and the other Recapitalization Documents to which such Party is a
party. Neither the execution and delivery of this Agreement or such
Recapitalization Documents nor the consummation of any of the transactions
contemplated herein or therein nor compliance with the terms and provisions
hereof or thereof (a) violates or will violate any law or regulation or any
order or decree of any court or government instrumentality applicable to such
Party, except such violations as would not, in the aggregate, have a Material
Adverse Effect, or (b) conflicts with or would result in the breach of, or
constitutes a default under, any contract, lease, indenture, loan agreement,
mortgage, deed of trust or other agreement or instrument to which such Party is
a party or by which they or any of their respective assets may be bound, except
such conflicts, breaches or defaults as have been waived or obtained or consents
therefor have been obtained or such conflicts, breaches or defaults as would
not, in the aggregate, have a Material Adverse Effect. No consent, approval,
authorization or order of any governmental authority is presently required in
connection with the execution and delivery of this Agreement or the
Recapitalization Documents by such Party or the consummation of the transactions
contemplated hereby or thereby that has not been obtained.
Section 3.3 Capital Stock. Such Party, if a Stockholder, is the record
-------------
and beneficial owner of the Company's Equity Securities ascribed to such Party,
as set forth in the Stockholder Chart, free and clear of any Liens, other than
those arising under applicable securities laws, this Agreement and the Lock-Up
Agreements.
-7-
<PAGE>
Section 3.4 Purchase of Shares. Such Party, if a Stockholder, has
-------------------
acquired its Equity Securities for its own account and not with a view to or for
sale in connection with any distribution thereof.
Section 3.5 Disclosure of Information. Each Party acknowledges that it
-------------------------
(i) has reviewed such information about the Company as it considers necessary or
appropriate as the time it purchased its Equity Securities and (ii) had an
opportunity to ask questions and receive answers from the Company regarding its
investment in its Equity Securities.
Section 3.6 Investment Experience; Accredited Investor Status. Such Party
-------------------------------------------------
acknowledges that (i) it can bear the economic risk of its investment in the
Common Stock, (ii) has such knowledge and experience in financial or business
matters that it is, and at the time it purchased its Equity Securities it was,
capable of evaluating the merits and risks of an investment in the Common Stock,
(iii) that it is, and at the time it purchased its Equity Securities it was, an
"accredited investor" as defined in Rule 501(a) of Regulation D under the
Securities Act of 1933, as amended, or (iv) purchased its Equity Securities in
reliance on Section 4(2) of the Securities Act.
Section 3.7 Accuracy of Registration Statement Disclosure. Such Party
---------------------------------------------
(i) has received a copy of Amendment No. 1 to the Company's registration
statement on Form S-1 which was filed with the Securities and Exchange
Commission on April 12, 1999 (together with the financial statements contained
therein and all exhibits to the Registration Statement, "Amendment No. 1 to the
----------------------
Registration Statement"), (ii) has read carefully Amendment No 1 to the
- ----------------------
Registration Statement, and (iii) represents and warrants that the information
concerning such Party, its affiliates, partners, employees, directors and
officers and its ownership interest in the Company does not contain any untrue
statement of a material fact or to state any material fact necessary in order to
make the such information not misleading.
ARTICLE IV
THE CLOSING; EFFECTIVENESS
Section 4.1 Closing. Upon satisfaction of the conditions set forth
-------
herein, the transactions contemplated by this Agreement shall be consummated at
the closing (the "Closing") thereof, which shall occur on the closing date of
-------
the Common Stock Offering (the "Closing Time") at the offices of Mayer, Brown &
------------
Platt, New York, New York, or at such other place as shall be agreed upon by the
Securityholders and the Company.
Section 4.2 Effectiveness of this Agreement. This Agreement shall be
-------------------------------
effective as of the date the Registration Statement is declared effective by the
Securities and Exchange Commission; provided, that, if the Underwriting
--------
Agreement is executed by the Company and the Underwriters and the Common Stock
Offering is not consummated within 15 days
-8-
<PAGE>
thereafter, none of the Parties hereto shall have any obligations under Article
-------
V or otherwise under this Agreement, and this Agreement will automatically
- -
terminate and have no further effect. All of the transactions contemplated by
this Agreement shall be deemed to have been consummated simultaneously and none
of such transactions shall be deemed consummated unless all of such transactions
are consummated.
ARTICLE V
THE RECAPITALIZATION
Section 5.1 General. Each of the Parties (in whatever capacity,
-------
including as Securityholders) will take all actions, including executing and
delivering all of the Recapitalization Documents to which it is a party,
necessary or reasonably requested by the Company, to authorize, adopt, approve,
implement, consummate and close the Recapitalization Documents and the
Recapitalization generally, provided that, with regard to Parties that are
directors of the Company, the foregoing will be subject to their fiduciary
duties as directors.
Section 5.2 Preferred Stock.
---------------
(a) At the Closing, the holders of all of the outstanding shares of
Series A Preferred Stock and Series C Preferred Stock will exchange and
convert their shares of Series A Convertible and Series C Preferred Stock
for shares of Common Stock on a one-for-one share basis as described in the
Registration Statement, the Stockholder Chart and the terms and conditions
of such preferred stock, pursuant to the Preferred Exchange, irrespective
of any limitations on conversion set forth in the terms and conditions of
such Preferred Stock, and such conversion shall be effective as of the
Closing Time. At the Closing, such holders will deliver to the Company
their certificates evidencing such shares of Preferred Stock for exchange
and conversion, together with written instructions to complete such
exchange and conversion. Upon such exchange and conversion, such shares of
preferred stock will be surrendered to the Company and will be canceled by
the Company.
(b) At the Closing, the Company will redeem the Series B Preferred
Stock from the holders thereof as described in the Registration Statement
and the Stockholder Chart, irrespective of any limitations on redemption
set forth in the terms of such preferred stock, and such redemption will be
effective as of the Closing Time. At the Closing, such holders will deliver
to the Company their certificates evidencing their shares of Series B
Preferred Stock for redemption, together with written instructions to
complete such redemption. Upon such redemption, such shares of Series B
Preferred Stock will be surrendered to the Company and will be canceled by
the Company.
Section 5.3 Amended Charter Documents.
-------------------------
-9-
<PAGE>
(a) At or prior to the Closing, the Amended Company Charter will be
duly approved and adopted as the Charter of the Company, and, as of the
Closing, will be filed by the Company with the Secretary of State of the
State of Delaware. Each Securityholder adopts and approves the Amended
Company Charter and consents to its filing with the Secretary of State of
the State of Delaware.
(b) At or prior to the Closing, the Amended Company By-Laws will be
duly approved and adopted as the By-Laws of the Company. Each
Securityholder adopts and approves the Amended Company By-laws.
Section 5.4 Stock Split. (a) At or prior to the Closing the Stock Split
-----------
will be duly approved and adopted, and (b) As of the Closing, all outstanding
shares of Common Stock and all of the outstanding Equity Securities of the
Company will be adjusted to reflect the Stock Split as described in the
Stockholder Chart.
Section 5.5 Amendment, Waiver and Release of Series C Preferred Stock
---------------------------------------------------------
Purchase Agreement.
- ------------------
Each Series C Preferred Stock Investor agrees as follows:
(a) Articles III [Affirmative Covenants of the Company] and IV
[Negative Covenants of the Company] of the Series C Preferred Stock
Purchase Agreement are hereby terminated and shall be of no further effect.
Each Series C Preferred Stock Investor releases and discharges the Company,
its officers, directors, employees, agents, affiliates, parents,
subsidiaries, divisions, predecessors, purchasers, assigns,
representatives, successors, successors-in-interest, and customers from any
and all grievances, claims, demands, debts, defenses, actions or causes of
action, obligations, contracts, promises, damages, judgments, expenses, and
liabilities, known or unknown, whatsoever, in any way arising from or
relating to any act, occurrence, or transaction before the date of this
Agreement, from any arising under each of Article III and Article IV of the
Series C Preferred Stock Purchase Agreement.
(b) Subject to and upon the Closing Time, the Rights Agreement (other
than Sections 5.1, 5.2, 5.5, 5,6 and 5.7 thereof) will automatically
terminate and expire.
Section 5.6 Waivers of Registration Rights and Piggy-Back Registration
----------------------------------------------------------
Rights.
- ------
(a) Each holder of Registrable Securities agrees not to assert its
rights under Section 5.2 [Company Registration] in connection with the
Common Stock Offering.
(b) Each holder of Registrable Securities agrees that, pursuant to
Section 5.11 of the Rights Agreement [Standoff Agreement], it shall not
sell, make any short sale of,
-10-
<PAGE>
loan, grant any option for the purchase of, or otherwise dispose of any
Registrable Securities effective as of the date of this Agreement.
Section 5.7 Termination of Rights of First Offer and Co-Sale.
------------------------------------------------
Each party hereto hereby agrees to the termination in full of Section 6
[Rights of First Offer and Co-Sale] of the Rights Agreement, effective as of the
date of this Agreement and agrees not to assert any right thereunder in respect
of Common Stock issued under the Common Stock Offering.
Section 5.8 Termination of Affirmative Covenants.
------------------------------------
Each party hereto hereby agrees to the termination in full of Section 7
[Affirmative Covenants of the Company] of the Rights Agreement, effective as of
the date of this Agreement.
Section 5.9 Termination of Voting Agreement for Board of Directors.
------------------------------------------------------
Each party hereto hereby agrees to the termination in full of Section 8
[Voting Agreement for Board of Directors] of the Rights Agreement, effective as
of the date of this Agreement.
Section 5.10 Option Plans.
------------
(a) The Company will duly approve and adopt, at or prior to Closing,
the 1999 Stock Option Plan and the Employee Stock Purchase Plan.
(b) At or prior to the Closing, the Company will issue stock options
under the 1999 Stock Option Plan to director participants and employee
participants in the amounts and to the persons as determined by the Board
of Directors or any duly authorized committee thereof.
Section 5.11 Board of Directors and Committees.
---------------------------------
(a) At the Closing, the Board of Directors of the Company will
consist of the persons set forth in Exhibit H-1 hereto.
(b) At the Closing, the Audit Committee of the Company will consist
of those persons set forth in Exhibit H-2 hereto.
(c) At the Closing, the Compensation Committee of the Company will
consist of those persons set forth in Exhibit H-3 hereto. The Compensation
Committee will be delegated authority by the Board of Directors to duly
consider the recommendations of
-11-
<PAGE>
the Chief Executive Officer concerning the issuance of options under the
1995 Stock Option Plan, the 1999 Stock Option Plan and Employee Stock
Purchase Plan and to make compensation decisions regarding the Company's
executive officers.
(d) At the Closing, the Pricing Committee of the Company for purposes
of the Common Stock Offering will consist of those persons set forth in
Exhibit H-4 hereto, who will be fully and irrevocably authorized to make
decisions on behalf of the Company and the Board of Directors thereof in
respect of the Common Stock Offering, including without limitation,
negotiating, entering into and executing agreements binding on the Company,
determining and approving stock splits in respect of Equity Securities, and
determining the price per share of the Common Stock Offering. Upon the
decision of the Pricing Committee, the Company will make such adjustments
and modifications as are necessary to reflect and implement such decision
in the Recapitalization Documents and the Recapitalization generally, and
such adjustments and modifications will not require the Parties' consent,
and will not affect the Parties' obligations hereunder or thereunder, as so
adjusted or modified.
Section 5.12 Directors Compensation. At the Closing, the Company will
----------------------
duly approve and adopt the Director's Fee Policy.
Section 5.13 D & O Insurance and Indemnities.
-------------------------------
(a) By the Closing, the Company will have obtained a customary and
standard Directors and Officers insurance policy providing coverage for
their directors and officers of at least $10.0 million (with a sublimit of
at least $5.0 million for the Common Stock Offering), which coverage,
subject to the foregoing, will apply to the Common Stock Offering.
(b) By the Closing, the Company will have entered into the Director
Indemnification Agreements with its directors.
Section 5.14 Lock-Ups and Waivers. Each Party listed on Schedule 2 will
--------------------
have executed and delivered to the Company and the Underwriters in connection
with the Common Stock Offering and under the Underwriting Agreement, a standard
and customary "lock-up" agreement under which they agree not to register offer,
sell or contract to sell any of the Company's Equity Securities for 180 days
following the date of the final prospectus relating to the Common Stock
Offering, subject to waiver by the representatives of the Underwriters.
Section 5.15 Stockholder Consents. The Parties will execute and deliver
--------------------
stockholder consents substantially in the form of Exhibit I hereto, as
---------
stockholders of the Company, with regard to (a) the Amended Company Charter and
Amended Company By-Laws, (b) Amendment No. 4 to the 1995 Stock Option Plan, the
1999 Stock Option Plan, and the Employee Stock Purchase Plan, (c) the election
of directors of the Company, (d) the approval
-12-
<PAGE>
of such Recapitalization Documents, (f) the listing of the Company on the Nasdaq
National Market System, (e) the filing of the Registration Statement with the
Securities and Exchange Commission, (f) the ratifying of all acts of the
directors and the officers of the Company (whether current or former) prior to
the Common Stock Offering other than acts of wilful misconduct, and (g) any
other transactions contemplated by clauses (a) through (f) as are reasonably
requested by the Company.
Section 5.16 Insider Trading Policy. At the Closing, the Company will
----------------------
adopt the Insider Trading Policy substantially in the form of Exhibit J hereto,
---------
and each of the Parties agrees to observe and comply with the Insider Trading
Policy
Section 5.17 National Geographic Acknowledgment and Agreement. National
------------------------------------------------
Geographic agrees that, effective as of the date of this Agreement, it shall
have no further right to appoint, and forfeits the right to appoint, a director
to the Board of Directors of the Company in accordance with Section 5 of the NG
Agreement.
ARTICLE VI
CONDITIONS OF THE PARTIES
(OTHER THAN THE COMPANY) OBLIGATIONS
Section 6.1 Conditions of the Securityholders' Obligations. The
----------------------------------------------
obligation of each of the Parties (other than the Company) on the Closing Time
to consummate the transactions contemplated by Article V of this Agreement will
---------
be subject to the prior or concurrent satisfaction on the Closing Time of the
following conditions:
(a) Representations and Warranties; Agreements; No Default. The
------------------------------------------------------
representations and warranties of the Company set forth in this Agreement
will be true in all material respects at and as if repeated on and as of
the Closing Time after giving effect to the transactions contemplated
hereby; and the Company will have executed, delivered and consummated all
Recapitalization Documents on their part to be performed pursuant to this
Agreement on or prior to the Closing Time.
(b) Certificate as to Representations, Etc. The Parties (other than
--------------------------------------
the Company) will each have received an Officer's Certificate signed by the
Chief Financial Officer of the Company, addressed to the Parties (other
than the Company) and dated as of the Closing Date, to the effect set forth
in clause (a) above.
(c) Recapitalization and Recapitalization Documents. Subject to the
-----------------------------------------------
proviso at the end of Section 4.1, (a) each of the other Parties to the
-----------
Recapitalization Documents will have executed, delivered and consummated
the Recapitalization Documents to which they are parties, (b) the Common
Stock Offering will result in at least
-13-
<PAGE>
$40,000,000 gross proceeds to the Company, (c) the Recapitalization will
have been consummated.
(d) Closing Papers. The Parties will have received copies of the
--------------
following:
(i) copies of the resolutions adopted by the Board of Directors
and Stockholders authorizing the execution, delivery and performance
of this Agreement and each of the Recapitalization Documents and the
other transactions contemplated hereby;
(ii) copies of each of the Recapitalization Documents; and
(iii) an incumbency certificate in respect of officers of the
Company executing the Recapitalization Documents, a standard good
standing certificate from the Secretary of the State of Delaware in
respect of the Company dated as of a recent date of the Closing, and
such other customary and standard documents reasonably requested by
any of the Parties.
Section 6.2 Delivery of closing documents; acknowledgement. Each party
----------------------------------------------
hereto (other than the Company) acknowledges that any obligation of the Company
to deliver documents or certificates to such Party under Section 6.1 shall be
satisfied in full by the Company making such document or certificate available
for inspection by such Party and copying at the Company's address set forth in
Section 8.1 upon notice to the Company
ARTICLE VII
CONDITIONS OF THE COMPANY'S OBLIGATIONS
Section 7.1 Conditions of the Company's Obligations. The obligation of
---------------------------------------
the Company on the Closing Time to consummate the transactions contemplated by
this Agreement will be subject to the prior or concurrent satisfaction on the
Closing Time of the following conditions:
(a) Representations and Warranties. The representations and
------------------------------
warranties of the other Parties set forth in this Agreement shall be true
in all material respects at and as if repeated on and as of the Closing
Time after giving effect to the transactions contemplated hereby and the
other Parties will have performed all agreements on their part to be
performed pursuant to this Agreement on or prior to the Closing Time.
(b) Recapitalization and Recapitalization Documents. Subject to
-----------------------------------------------
Section 4.2, (a) each of the other Parties to the Recapitalization
-----------
Documents will have executed, delivered and consummated the
Recapitalization Documents to which they are parties,
-14-
<PAGE>
(b) the Common Stock Offering will have been consummated, and (c) the
Recapitalization will generally have been consummated.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Notices. All notices and other communications pertaining to
-------
this Agreement shall be in writing and shall be delivered in person with receipt
acknowledged, or telecopied and confirmed immediately in writing by a copy
mailed by registered or certified mail, return receipt requested, postage
prepaid, addressed as hereafter set forth, or mailed by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:
(i) If to the Company:
MapQuest.com, Inc.
3710 Hempland Road
Mountville, PA 17554-1542
Attention: James Thomas, Chief Financial Officer
Telecopy No.: (717) 285-8577
with copies to:
Mayer, Brown & Platt
1675 Broadway
New York, New York 10019
Attention: James B. Carlson, Esq.
Telecopy No.: (212) 262-1910
or to such other person or address as shall be furnished to the other party in
compliance with this Section.
Section 8.2 Consent to Amendments and Waivers. The provisions of this
---------------------------------
Agreement may be amended only if the Company has obtained the written consent of
each of the Parties, provided that (a) determinations by the Pricing Committee
and any resulting adjustments to the Recapitalization Documents and the
Recapitalization generally will not be considered amendments, and (b) waivers,
supplements and modifications with regard to the representations and warranties
in the Underwriting Agreement will not be considered amendments.
Section 8.3 Successors and Assigns. Whenever in this Agreement any of
----------------------
the parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party; and all covenants and agreements of the
Company contained herein shall
-15-
<PAGE>
bind their respective successors and assigns. The Company may not assign or
transfer any of its rights or obligations hereunder (by operation of law or
otherwise) without the prior written consent of each of the Parties.
Section 8.4 Survival. All representations, warranties, covenants and
--------
agreements herein will survive the Closing.
Section 8.5 Attorneys' Fees. In any action or proceeding brought to
---------------
enforce any provision of this Agreement, or where any provision hereof is
validly asserted as a defense, the successful party shall be entitled to recover
reasonable attorneys' fees in addition to any other valuable remedy.
Section 8.6 Ratification of Prior Acts of Board of Directors of Company.
-----------------------------------------------------------
Each of the Stockholders hereby adopts, ratifies and confirms all of the actions
heretofore taken by the Board of Directors in all respects.
Section 8.7 LITIGATION; SPECIFIC PERFORMANCE. THIS AGREEMENT SHALL BE
--------------------------------
GOVERNED BY, CONSTRUED, APPLIED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. EACH OF THE PARTIES HERETO ACKNOWLEDGES AND AGREES THAT IN
THE EVENT OF ANY BREACH OF THIS AGREEMENT, THE NON-BREACHING PARTY WOULD BE
IRREPARABLY HARMED AND COULD NOT BE MADE WHOLE BY MONETARY DAMAGES, AND THAT, IN
ADDITION TO ANY OTHER REMEDY TO WHICH THEY MAY BE ENTITLED AT LAW OR IN EQUITY,
THE PARTIES SHALL BE ENTITLED TO SUCH EQUITABLE OR INJUNCTIVE RELIEF AS MAY BE
APPROPRIATE. EACH PARTY AGREES THAT JURISDICTION AND VENUE WILL BE PROPER IN
THE SOUTHERN DISTRICT OF NEW YORK AND WAIVES ANY OBJECTIONS BASED UPON FORUM NON
CONVENIENS. EACH PARTY WAIVES PERSONAL SERVICE OF PROCESS AND AGREES THAT A
SUMMONS AND COMPLAINT COMMENCING AN ACTION OR PROCEEDING SHALL BE PROPERLY
SERVED AND SHALL CONFER PERSONAL JURISDICTION IF SERVED BY REGISTERED OR
CERTIFIED MAIL TO THE PARTY AT THE ADDRESS SET FORTH IN THIS AGREEMENT, OR AS
OTHERWISE PROVIDED BY THE LAWS OF THE STATE OF NEW YORK OR THE UNITED STATES.
THE CHOICE OF FORUM SET FORTH IN THIS SECTION 8.7 SHALL NOT BE DEEMED TO
PRECLUDE THE ENFORCEMENT OF ANY JUDGMENT OBTAINED IN ANY OTHER FORUM OR THE
TAKING OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE SAME IN ANY OTHER
APPROPRIATE JURISDICTION.
Section 8.8 WAIVER OF JURY TRIAL; ARBITRATION. THE STOCKHOLDERS AFTER
---------------------------------
CONSULTING WITH COUNSEL WAIVE THEIR RIGHTS, IF ANY, TO JURY TRIAL IN RESPECT TO
ANY DISPUTE OR CLAIMS BETWEEN OR AMONG THE PARTIES TO THIS AGREEMENT RELATING TO
OR IN RESPECT OF THIS AGREEMENT, ITS NEGOTIATION, EXECUTION, PERFORMANCE,
SUBJECT
-16-
<PAGE>
MATTER, OR ANY COURSE OF CONDUCT OR DEALING OR ACTIONS UNDER OR IN RESPECT OF
THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION ANY CLAIM UNDER THE SECURITIES
ACT, THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, ANY OTHER STATE OR FEDERAL
LAW RELATING TO SECURITIES OR FRAUD OR BOTH, THE RACKETEER INFLUENCED AND
CORRUPT ORGANIZATIONS ACT, AS AMENDED, OR FEDERAL OR STATE COMMON LAW, AND ANY
SUCH DISPUTE OR CLAIMS SHALL BE SUBMITTED TO, AND RESOLVED EXCLUSIVELY PURSUANT
TO, ARBITRATION IN ACCORDANCE WITH THE COMMERCIAL ARBITRATION RULES OF THE
AMERICAN ARBITRATION ASSOCIATION. SUCH ARBITRATION SHALL TAKE PLACE IN NEW YORK,
NEW YORK, AND SHALL BE SUBJECT TO THE SUBSTANTIVE LAW OF THE STATE OF NEW YORK.
DECISIONS AS TO FINDINGS OF FACT AND CONCLUSIONS OF LAW PURSUANT TO SUCH
ARBITRATION SHALL BE FINAL, CONCLUSIVE AND BINDING ON THE PARTIES, SUBJECT TO
CONFIRMATION, MODIFICATION OR CHALLENGE PURSUANT TO 9 U.S.C. (S)(S) 1 ET SEQ.
ANY FINAL AWARD SHALL BE ENFORCEABLE AS A JUDGMENT OF A COURT OF RECORD.
Section 8.9 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
-17-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first above written.
MAPQUEST.COM, INC.
By: _______________________________
Title:
<PAGE>
SCHEDULE 1
----------
STOCKHOLDER CHART
<PAGE>
SCHEDULE 2
----------
LOCK-UP PARTIES
C. Richard Allen
Robert Binford
Michael Crosson
Scott Edmonds
Barton Faber
Highland Capital Partners III Limited Partnership
Highland Entrepreneurs' Fund III Limited Partnership
James Hilliard
David Ingerman
James Killick
Robert McCormack
John Moragne
Michael Mulligan
William Muenster
Michael Nappi
National Geographic Holdings, Inc.
Dan Nova
John Radziszewski
The Roman Arch Fund L.P.
The Roman Arch Fund II L.P.
Carlo von Schroeter
Stet & Query, L.P.
Victoria Taylor
James Thomas
Trident Capital Partners Fund - I, L.P.
Trident Capital Partners Fund - I, C.V.
Weston Presidio Capital II, L.P.
<PAGE>
EXHIBIT A.1
AMENDMENT NO. 2
TO THE
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
MAPQUEST.COM, INC.
I, THE UNDERSIGNED, James Thomas, being the Secretary of MapQuest.com, Inc.
(the "Corporation"), hereby certify:
-----------
1. The Amended and Restated Certificate of Incorporation of the Corporation is
amended so that the second and third sentences of Article FOURTH are deleted and
replaced with the following:
"The total number of shares which this Corporation is authorized to
issue is one hundred five million (105,000,000) shares. One hundred
million (100,000,000) shares shall be designated Common Stock, par value
per share equal to $0.001 upon the effectiveness of the two and seven-
tenths-for-one stock split (the "Stock Split") to be effected by the
Corporation upon the effectiveness of the Registration Statement on Form S-
1 filed with the Securities and Exchange Commission relating to the initial
public offering of the Common Stock."
2. This amendment was authorized and duly adopted by the unanimous written
consent of the Board of Directors and by the stockholders of the Corporation in
accordance with Sections 242 and 245 of the General Corporation Law of the State
of Delaware, as amended.
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this certificate as of the
____ day of April, 1999, and hereby affirms under penalty of perjury that this
certificate is the act and deed of the Corporation and that the facts contained
herein are true.
By:______________________________
Name: James Thomas
Title: Secretary
<PAGE>
EXHIBIT A2
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
MAPQUEST.COM, INC.
a Delaware corporation
MapQuest.com, Inc., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware (the
"Corporation") does hereby certify as follows:
WHEREAS: The original Certificate of Incorporation of the Corporation was
filed under the name of "Geosystems Global Corporation" with the Secretary of
State of the State of Delaware on March 28, 1994.
WHEREAS: This Amended and Restated Certificate of Incorporation has been
duly adopted in accordance with the provisions of Sections 242 and 245 of the
General Corporation Law of the State of Delaware by the Board of Directors of
the Corporation.
WHEREAS: This Amended and Restated Certificate of Incorporation was
approved by written consent of the stockholders pursuant to Section 228 of the
General Corporation Law of the State of Delaware ("Delaware Law").
WHEREAS: Written notice of this Amended and Restated Certificate of
Incorporation was duly given to stockholders of this Corporation who did not
consent in writing to the foregoing resolutions.
THEREFORE BE IT RESOLVED: The Certificate of Incorporation of this
Corporation is amended and restated in its entirety to read as follows:
"FIRST: The name of this corporation is MapQuest.com, Inc.
SECOND: The address of the Corporation's registered office in the State of
Delaware is 1209 Orange Street, Wilmington, New Castle County, Delaware 19801.
The name of its registered agent at such address is The Corporation Trust
Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware.
FOURTH: The Corporation is authorized to issue two classes of stock to be
designated, respectively, "common stock" and "preferred stock." The total number
of shares which this
<PAGE>
Corporation is authorized to issue is one hundred and five million (105,000,000)
shares. One hundred million (100,000,000) shares shall be designated common
stock (the "Common Stock"), and five million (5,000,000) shares shall be
undesignated preferred stock (the "Preferred Stock"). Each share of Preferred
Stock shall have a par value of $0.01, and each share of Common Stock shall have
a par value of $0.001.
Any Preferred Stock not previously designated as to series may be issued
from time to time in one or more series pursuant to a resolution or resolutions
providing for such issue duly adopted by the Board of Directors (authority to do
so being hereby expressly vested in the Board), and such resolution or
resolutions shall also set forth the voting powers, full or limited or none, of
each such series of Preferred Stock and shall fix the designations, preferences
and relative, participating, optional or other special rights and
qualifications, limitations or restrictions of each such series of Preferred
Stock. The Board of Directors is authorized to alter the designation, rights,
preferences, privileges and restrictions granted to or imposed upon any wholly
unissued series of Preferred Stock and, within the limits and restrictions
stated in any resolution or resolutions of the Board of Directors originally
fixing the number of shares constituting any series of Preferred Stock, to
increase or decrease (but not below the number of shares of any such series then
outstanding) the number of shares of any such series subsequent to the issue of
shares of that series.
Each share of Preferred Stock issued by the Corporation, if reacquired by
the Corporation (whether by redemption, repurchase, conversion to Common Stock
or other means), shall upon such reacquisition resume the status of authorized
and unissued shares of Preferred Stock, undesignated as to series and available
for designation and issuance by the Corporation in accordance with the
immediately preceding paragraph.
FIFTH:
1. Dividends. The holders of Common Stock shall be entitled to receive, on
---------
a share-for-share basis, such dividends if and when declared from time to
time by the Board of Directors of the Corporation.
2. Voting. Except as otherwise required by law, each holder of Common Stock
------
shall be entitled to one (1) vote for each share of Common Stock held by
such holder.
SIXTH: Any action required or permitted to be taken at any annual or
special meeting of stockholders may be taken only upon the vote of stockholders
at an annual or special meeting duly noticed and called in accordance with
Delaware Law and may not be taken by written consent of stockholders without a
meeting.
SEVENTH: The management of the business and the conduct of the affairs of
the Corporation shall be vested in its Board of Directors. The number of
directors which shall constitute the whole Board of Directors shall be fixed
exclusively by one or more resolutions
<PAGE>
adopted from time to time by the Board of Directors.
EIGHTH:
- ------
A. CLASSIFIED DIRECTORS
The directors (subject to the last paragraph of this Article Eighth) shall
be divided into three classes, designated Class I, Class II and Class III. Each
class shall consist, as nearly as may be possible, of one-third of the total
number of directors constituting the entire Board of Directors. Each director
shall serve for a term ending on the date of the third annual meeting of
stockholders next following the annual meeting at which such director was
elected, provided that directors initially designated as Class I directors shall
--------
serve for a term ending on the date of the 2002 annual meeting, directors
initially designated as Class II directors shall serve for a term ending on the
2001 annual meeting, and directors initially designated as Class III directors
shall serve for a term ending on the date of the 2000 annual meeting.
Notwithstanding the foregoing, each director shall hold office until such
director's successor shall have been duly elected and qualified or until such
director's earlier death resignation or removal. In the event of any change in
the number of directors, the Board of Directors shall apportion any newly
created directorships among, or reduce the number of directorships in, such
class or classes as shall equalize, as nearly as possible, the number of
directors in each class. In no event will a decrease in the number of directors
shorten the term of any incumbent director. The names and mailing addresses of
the persons who are to serve initially as directors of each Class are:
Class I
Michael Mulligan
Rick Allen
Class II
Robert McCormack
Daniel Nova
Class III
Carlo von Schroeter
John Moragne
B. DIRECTORS
<PAGE>
3. No Written Ballot. Election of directors need not be by written ballot
-----------------
unless the bylaws of the Corporation so provide.
4. Vacancies. Vacancies on the Board of Directors resulting from death,
---------
resignation, removal or otherwise and newly created directorships resulting
from any increase in the number of directors may be filled solely by a
majority of the directors then in office (although less than a quorum) or
by the sole remaining director, and each director so elected shall hold
office for a term that shall coincide with the term of the class to which
such director shall have been elected.
5. Removal. No director may be removed from office by the stockholders
-------
except for cause with the affirmative vote of the holders of not less than
a majority of the outstanding shares of stock generally entitled to vote.
6. Preferred Stock Directors. Notwithstanding the foregoing, whenever the
-------------------------
holders of one or more classes or series of Preferred Stock shall have the
right, voting separately as a class or series, to elect directors, the
election, term of office, filing of vacancies, removal and other features
of such directorships shall be governed by the terms of the resolution or
resolutions adopted by the Board of Directors pursuant to ARTICLE FOURTH
applicable thereto, and each director so elected shall not be subject to
the provisions of this ARTICLE SIXTH unless otherwise provided therein.
NINTH: Subject to Article Thirteenth, The Board of Directors shall have the
-----
power to adopt, amend or repeal the By-laws of the Corporation.
TENTH: Any action required or permitted to be taken at any annual or
-----
special meeting of stockholders may be taken only upon the vote of stockholders
at an annual or special meeting duly noticed and called in accordance with the
Delaware Law, as amended from time to time, and may not be taken by written
consent of stockholders without a meeting, except with regard to election,
removed and filling of vacancies of directors by holders of Preferred Stock,
voting separately, as and if so provided by the terms of the resolution or
resolutions adopted by the Board of Directors pursuant to Article Fourth
applicable thereto. At all meetings of stockholders, each stockholder shall be
entitled to vote, in person or by proxy, the shares owned by such stockholders
of record on the record date for the meeting. When a quorum is present or
represented at any meeting, the vote of the holders of a majority of those of
the outstanding shares of stock generally entitled to vote and represented, in
person or proxy, at the meeting on any matter, question, or proposal properly
brought before such meeting shall decide such question, unless the question is
one upon which, by express provision of law, this Amended and Restated
Certificate of Incorporation or the By-Laws, a different vote is required, in
which case such express provision shall govern and control the decision of such
question.
NINTH: Meetings of the stockholders shall only be called by the Secretary
-----
of the Corporation upon written request signed by either (a) stockholders
holding at least 20% of those of the outstanding shares of stock generally
entitled to vote or (b) by a majority of the Board of Directors, or (c) the
Chairman of the Board of Directors, or (d) the President of the Corporation, and
may not be called by any other person. Notwithstanding the foregoing, whenever
holders of one or more classes or series of Preferred Stock shall have the
right, voting separately as a class or series, to elect directors, such holders
may call, pursuant to the terms of the resolution or resolutions adopted by the
Board of Directors pursuant to ARTICLE FOURTH hereto, special meetings of the
holders of such Preferred Stock. Any call for a special meetings of holders of
such Preferred Stock. Any call for a special meeting of the stockholders must
specify the matters to be acted upon at such meeting; only those matters set
forth in such notice may be considered or acted upon at the meeting, unless
otherwise provided by law.
NINTH: In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to make, alter, amend or
repeal the Bylaws of the Corporation.
TENTH: The directors of the Corporation need not be elected by written
ballot unless a stockholder or stockholders holding a majority of the voting
power of the outstanding capital stock entitled to vote demands election by
written ballot at the meeting and before voting.
ELEVENTH: Advance notice of stockholder nomination for the election of
directors and of business to be brought by stockholders before any meeting of
the stockholders of the Corporation shall be given in the manner provided in the
Bylaws of the Corporation.
TWELFTH: Special meetings of the stockholders of the Corporation may be
called, for any purpose or purposes, by (i) the Chairman of the Board of
Directors, (ii) the Chief Executive Officer or (iii) the Board of Directors.
THIRTEENTH:
1. To the fullest extent permitted by the Delaware Law as the same exists
or as may hereafter be amended, a director of the Corporation shall not be
personally liable to the Corporation or its stockholders for monetary
damages for a breach of fiduciary duty as a director.
2. The Corporation may indemnify to the fullest extent permitted by law any
person made or threatened to be made a party to an action or proceeding,
whether criminal, civil, administrative or investigative, by reason of the
fact that he, his testator or intestate is or was a director, officer or
employee of the Corporation or any predecessor of the Corporation or serves
or served at any other enterprise as a director, officer or employee at the
request of the Corporation or any predecessor to the Corporation. The Board
of Directors of the Corporation may, in its discretion, extend such
indemnification to former, current or future directors, employees and other
agents of the Corporation or any predecessor to the Corporation.
3. Neither any amendment nor repeal of this Article THIRTEENTH, nor the
adoption of any provision of the Corporation's Certificate of Incorporation
inconsistent with this Article THIRTEENTH, shall eliminate or reduce the
effect of this Article THIRTEENTH, in respect of any matter occurring, or
any action or proceeding accruing or arising or that, but for this Article
TWELFTH, would accrue or arise, prior to such amendment, repeal or adoption
of an inconsistent provision.
FOURTEENTH: Meetings of stockholders may be held within or without the
State of Delaware, as the Bylaws may provide. The books of the Corporation may
be kept (subject to any provision contained under Delaware Law) outside of the
State of Delaware at such place or places as may be designated from time to time
by the Board of Directors or in the Bylaws of the Corporation.
FIFTEENTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Amended and Restated Certificate of
Incorporation in the manner now or hereafter prescribed herein and under
Delaware Law, except as otherwise provided in article THIRTEENTH, and all rights
conferred upon stockholders herein are granted subject to this reservation.
IN WITNESS WHEREOF, MapQuest.com, Inc. has caused this Amended and Restated
Certificate of Incorporation to be signed in its name and on its behalf by James
Thomas, Chief Financial Officer and Chief Operating Officer of the Corporation,
on the ___ day of _____, 1999.
By:
---------------------------
James Thomas
Chief Financial Officer and
Chief Operating Officer
Attest:
________________________
<PAGE>
EXHIBIT B
AMENDED AND RESTATED BYLAWS
OF
MAPQUEST.COM, INC.
(A DELAWARE CORPORATION)
<PAGE>
BY LAWS OF
MAPQUEST.COM, INC.
(A DELAWARE CORPORATION)
TABLE OF CONTENTS
Page
----
ARTICLE I
CORPORATE OFFICES
1.1 REGISTERED OFFICE ..................................................... 1
1.2 OTHER OFFICES ......................................................... 1
ARTICLE II
MEETINGS OF STOCKHOLDERS
2.1 PLACE OF MEETINGS ..................................................... 1
2.2 ANNUAL MEETING ........................................................ 1
2.3 SPECIAL MEETING ....................................................... 2
2.4 NOTICE OF STOCKHOLDERS' MEETINGS ...................................... 2
2.5 ADVANCE NOTICE OF STOCKHOLDER NOMINEES AND STOCKHOLDER
BUSINESS .............................................................. 2
2.6 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE ......................... 2
2.7 QUORUM ................................................................ 3
2.8 ADJOURNED MEETING; NOTICE ............................................. 3
2.9 VOTING ................................................................ 3
2.10 STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING .............. 4
2.11 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING ............................ 4
2.12 PROXIES ............................................................... 5
2.13 ORGANIZATION .......................................................... 5
2.14 LIST OF STOCKHOLDERS ENTITLED TO VOTE ................................. 5
ARTICLE III
DIRECTORS
3.1 POWERS ................................................................. 6
3.2 NUMBER OF DIRECTORS .................................................... 6
3.3 ELECTION AND TERM OF OFFICE OF DIRECTORS ............................... 6
<PAGE>
3.4 RESIGNATION AND VACANCIES .............................................. 6
3.5 REMOVAL OF DIRECTORS ................................................... 7
3.6 PLACE OF MEETINGS; MEETINGS BY TELEPHONE ............................... 8
3.7 FIRST MEETINGS ......................................................... 8
3.8 REGULAR MEETINGS ....................................................... 8
3.9 SPECIAL MEETINGS; NOTICE ............................................... 9
3.10 QUORUM ................................................................ 9
3.11 WAIVER OF NOTICE ...................................................... 9
3.12 ADJOURNMENT ........................................................... 10
3.13 NOTICE OF ADJOURNMENT ................................................. 10
3.14 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING ..................... 10
3.15 FEES AND COMPENSATION OF DIRECTORS .................................... 10
3.16 APPROVAL OF LOANS TO OFFICERS ......................................... 10
3.17 SOLE DIRECTOR PROVIDED BY CERTIFICATE OF INCORPORATION ................ 11
3.18 NOMINATION OF DIRECTORS; STOCKHOLDER BUSINESS AT ANNUAL
MEETINGS .............................................................. 11
ARTICLE IV
COMMITTEES
4.1 COMMITTEES OF DIRECTORS ................................................ 13
4.2 MEETINGS AND ACTION OF COMMITTEES ...................................... 13
4.3 COMMITTEE MINUTES ...................................................... 14
ARTICLE V
OFFICERS
5.1 OFFICERS ............................................................. 14
5.2 ELECTION OF OFFICERS ................................................. 14
5.3 SUBORDINATE OFFICERS ................................................. 15
5.4 REMOVAL AND RESIGNATION OF OFFICERS .................................. 15
5.5 VACANCIES IN OFFICES ................................................. 15
5.6 CHAIRMAN OF THE BOARD ................................................ 15
5.7 PRESIDENT ............................................................ 16
5.8 VICE PRESIDENTS ...................................................... 16
5.9 SECRETARY ............................................................ 16
5.10 CHIEF FINANCIAL OFFICER .............................................. 17
5.11 ASSISTANT SECRETARY .................................................. 17
5.12 ADMINISTRATIVE OFFICERS .............................................. 17
5.13 AUTHORITY AND DUTIES OF OFFICERS ..................................... 18
-ii-
<PAGE>
ARTICLE VI
INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEESAND OTHER AGENTS
6.1 INDEMNIFICATION OF DIRECTORS AND OFFICERS .............................. 18
6.2 INDEMNIFICATION OF OTHERS .............................................. 19
6.3 INSURANCE .............................................................. 19
ARTICLE VII
RECORDS AND REPORTS
7.1 MAINTENANCE AND INSPECTION OF RECORDS ................................. 19
7.2 INSPECTION BY DIRECTORS ............................................... 20
7.3 REPRESENTATION OF SHARES OF OTHER CORPORATIONS ........................ 20
7.4 CERTIFICATION AND INSPECTION OF BYLAWS ................................ 20
ARTICLE VIII
GENERAL MATTERS
8.1 RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING .................. 20
8.2 CHECKS; DRAFTS; EVIDENCES OF INDEBTEDNESS .............................. 21
8.3 CORPORATE CONTRACTS AND INSTRUMENTS: HOW EXECUTED ...................... 21
8.4 STOCK CERTIFICATES; TRANSFER; PARTLY PAID SHARES ....................... 21
8.5 SPECIAL DESIGNATION ON CERTIFICATES .................................... 22
8.6 LOST CERTIFICATES ...................................................... 22
8.7 TRANSFER AGENTS AND REGISTRARS ......................................... 23
8.8 CONSTRUCTION; DEFINITIONS .............................................. 23
ARTICLE IX
AMENDMENTS
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BYLAWS
OF
MAPQUEST.COM, INC.
(A DELAWARE CORPORATION)
ARTICLE I
CORPORATE OFFICES
1.1 REGISTERED OFFICE
The registered office of the corporation shall be fixed in the certificate
of incorporation of the corporation.
1.2 OTHER OFFICES
The board of directors may at any time establish branch or subordinate
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 principal
executive 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. In the absence of such
designation, the annual meeting of stockholders shall be held on the third
Friday in June in each year at 3:00 p.m. However, if such day falls on a legal
holiday, then the meeting shall be held at the same time and place on the next
succeeding full business day. At the meeting, directors shall be elected, and
any other proper business may be transacted.
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2.3 SPECIAL MEETING
A special meeting of the stockholders may be called at any time by the
board of directors, or by the chairman of the board, or by the president.
2.4 NOTICE OF STOCKHOLDERS' MEETINGS
All notices of meetings of stockholders 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. The notice shall specify the
place, date and hour of the meeting and (i) in the case of a special meeting,
the purpose or purposes for which the meeting is called (no business other than
that specified in the notice may be transacted) or (ii) in the case of the
annual meeting, those matters which the board of directors, at the time of
giving the notice, intends to present for action by the stockholders (but any
proper matter may be presented at the meeting for such action). The notice of
any meeting at which directors are to be elected shall include the name of any
nominee or nominees who, at the time of the notice, the board intends to present
for election.
2.5 ADVANCE NOTICE OF STOCKHOLDER NOMINEES AND STOCKHOLDER BUSINESS
To be properly brought before an annual meeting or special meeting,
nominations for the election of directors or other business must be (a)
specified in the notice of meeting (or any supplement thereto) given by or at
the direction of the board of directors, (b) otherwise properly brought before
the meeting by or at the direction of the board of directors or (c) otherwise
properly brought before the meeting by a stockholder. For such nominations or
other business to be considered properly brought before the meeting by a
stockholder, such stockholder must have given timely notice and in proper form
of his or her intent to bring such business before such meeting in accordance
with Section 3.18 of these bylaws.
2.6 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE
Written notice of any meeting of stockholders shall be given either
personally or by first-class mail or by telegraphic or other written
communication. Notices not personally delivered shall be sent charges prepaid
and shall be addressed to the stockholder at the address of that stockholder
appearing on the books of the corporation or given by the stockholder to the
corporation for the purpose of notice. Notice shall be deemed to have been
given at the time when delivered personally or deposited in the mail or sent by
telegram or other means of written communication.
An affidavit of the mailing or other means of giving any notice of any
stockholders' meeting, executed by the secretary, assistant secretary or any
transfer agent of the corporation giving the notice, shall be prima facie
evidence of the giving of such notice.
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2.7 QUORUM
The holders of a majority in voting power of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
certificate of incorporation. If, however, such quorum is not present or
represented at any meeting of the stockholders, then either (i) the chairman of
the meeting or (ii) the stockholders entitled to vote thereat, present in person
or represented by proxy, shall have power to adjourn the meeting in accordance
with Section 2.8 of these bylaws.
When a quorum is present at any meeting, the vote of the holders of a
majority of the stock having voting power present in person or represented by
proxy shall decide any question brought before such meeting, unless the question
is one upon which, by express provision of the laws of the State of Delaware or
of the certificate of incorporation or these bylaws, a different vote is
required, in which case such express provision shall govern and control the
decision of the question.
If a quorum be initially present, the stockholders may continue to transact
business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum, if any action taken is approved by a
majority of the stockholders initially constituting the quorum.
2.8 ADJOURNED MEETING; NOTICE
When a meeting is adjourned to another time and 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.
2.9 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, and to voting trusts and other voting agreements).
Except as may be otherwise provided in the certificate of incorporation or
these bylaws, each stockholder shall be entitled to one vote for each share of
capital stock held by such stockholder.
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2.10 STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING
Any action required or permitted to be taken at any annual or special
meeting of stockholders may be taken without a meeting, without prior notice and
without a vote, if a consent or consents in writing setting forth the action so
taken shall be 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. Such consents shall be delivered to the corporation by delivery to
its registered office in the state of Delaware, its principal place of business,
or an officer or agent of the corporation having custody of the book in which
proceedings of meetings of stockholders are recorded. Delivery made to a
corporation's registered office shall be by hand or by certified or registered
mail, return receipt requested. 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.
Effective upon the closing of a firm commitment underwritten initial public
offering of any of the corporation's securities pursuant to a registration
statement on Form S-1 filed under the Securities Act of 1933, as amended, the
stockholders of the corporation may not take action by written consent without a
meeting but must take any such actions at a duly called annual or special
meeting.
2.11 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING
For purposes of determining the stockholders entitled to notice of any
meeting or to vote thereat, the board of directors may fix, in advance, a record
date, which shall not precede the date upon which the resolution fixing the
record date is adopted by the board of directors and which shall not be more
than sixty (60) days nor less than ten (10) days before the date of any such
meeting, and in such event only stockholders of record on the date so fixed are
entitled to notice and to vote, notwithstanding any transfer of any shares on
the books of the corporation after the record date.
If the board of directors does not so fix a record date, 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 business day next
preceding the day on which notice is given, or, if notice is waived, at the
close of business on the business day next preceding the day on which the
meeting is held.
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
unless the board of directors fixes a new record date for the adjourned meeting,
but the board of directors shall fix a new record date if the meeting is
adjourned for more than thirty (30) days from the date set for the original
meeting.
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The record date for any other purpose shall be as provided in Section 8.1
of these bylaws.
2.12 PROXIES
Every person entitled to vote for directors, or on any other matter, shall
have the right to do so either in person or by one or more agents authorized by
a written proxy signed by the person 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, telefacsimile 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(e) of the General Corporation Law of
Delaware (relating to the irrevocability of proxies).
2.13 ORGANIZATION
The president, or in the absence of the president, the chairman of the
board, shall call the meeting of the stockholders to order, and shall act as
chairman of the meeting. In the absence of the president, the chairman of the
board, and all of the vice presidents, the stockholders shall appoint a chairman
for such meeting. The chairman of any meeting of stockholders shall determine
the order of business and the procedures at the meeting, including such matters
as the regulation of the manner of voting and the conduct of business. The
secretary of the corporation shall act as secretary of all meetings of the
stockholders, but in the absence of the secretary at any meeting of the
stockholders, the chairman of the meeting may appoint any person to act as
secretary of the meeting.
2.14 LIST OF STOCKHOLDERS ENTITLED TO VOTE
The officer who has charge of the stock ledger of the 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.
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ARTICLE III
DIRECTORS
3.1 POWERS
Subject to the provisions of the General Corporation Law of Delaware and to
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 not less than three (3)
nor more than nine (9). The exact number of directors shall be six (6) until
changed, within the limits specified above, by a bylaw amending this Section
3.2, duly adopted by the board of directors or by the stockholders. The
indefinite number of directors may be changed, or a definite number may be fixed
without provision for an indefinite number, by a duly adopted amendment to the
Certificate of Incorporation or by an amendment to this bylaw duly adopted by
the board of directors or by the stockholders.
3.3 ELECTION AND TERM OF OFFICE OF DIRECTORS
Except as provided in Section 3.4 of these bylaws, directors shall hold
office until the expiration of the term for which elected and until a successor
has been elected and qualified; except that if any such election shall not be so
held, such election shall take place at a stockholders' meeting called and held
in accordance with the Delaware General Corporation Law. The Directors shall be
classified and their successors elected in accordance with Article EIGHTH of the
Certificate of Incorporation. Subject to the requirement of the Certificate of
Incorporation that the classes be as nearly equal in number as possible, the
size of each class of Directors shall be as determined from time to time by
resolution adopted by a majority of the Board of Directors. Any reduction in
the size of any class of Directors shall not shorten the term of office of any
incumbent Director. Directors need not be stockholders of the corporation.
3.4 RESIGNATION AND VACANCIES
Any director may resign effective on giving written notice to the chairman
of the board, the president, the secretary or the board of directors, unless the
notice specifies a later time for that resignation to become effective. If the
resignation of a director is effective at a future time, the board of directors
may elect a successor to take office when the resignation becomes effective.
Each director so elected shall hold office until the expiration of the term of
office of the director whom he has replaced and until a successor has been
elected and qualified.
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Effective upon the closing of a firm commitment underwritten public
offering of any of the corporation's securities pursuant to a registration
statement on Form S-1 under the Securities Act of 1933, as amended, vacancies
occurring on the Board of Directors for any reason and newly created
directorships resulting from an increase in the authorized number of directors
may be filled only by vote of a majority of the remaining members of the Board
of Directors, although less than a quorum, at any meeting of the Board of
Directors. A person so elected by the Board of Directors to fill a vacancy or
newly created directorship shall hold office until the next election of the
Class for which such director shall have been chosen and until his or her
successor shall have been duly elected and qualified.
Unless otherwise provided in the certificate of incorporation or these
bylaws (including, without limitation, the certificate of incorporation and
bylaws as amended effective upon the closing of a firm commitment underwritten
public offering of any of the corporation's securities pursuant to a
registration statement on Form S-1 under the Securities Act of 1933, as
amended):
(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, 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
(relating to meetings of shareholders).
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
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Section 211 of the General Corporation Law of Delaware (relating to meeting of
shareholders) as far as applicable.
3.5 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; provided, however, that, if
stockholders of the corporation are entitled to cumulative voting, if less than
the entire board is to be removed, no director may be removed without cause if
the votes cast against his removal would be sufficient to elect him if then
cumulatively voted at election of the entire board of directors. Whenever the
holders of any class or series are entitled to elect one or more directors by
the certificate of incorporation, this Section 3.5 shall apply, in respect to
the removal without cause of a director or directors so elected, to the vote of
the holders of the outstanding shares of that class or series and not to the
vote of the outstanding shares as a whole.
Effective upon the closing of a firm commitment underwritten public
offering of any of the corporation's securities pursuant to a registration
statement on Form S-1 under the Securities Act of 1933, as amended, any director
may be removed from office by the stockholders of the corporation only for
cause.
3.6 PLACE OF MEETINGS; MEETINGS BY TELEPHONE
Regular meetings of the board of directors may be held at any place within
or outside the State of Delaware that has been designated from time to time by
resolution of the board. In the absence of such a designation, regular meetings
shall be held at the principal executive office of the corporation. Special
meetings of the board may be held at any place within or outside the State of
Delaware that has been designated in the notice of the meeting or, if not stated
in the notice or if there is no notice, at the principal executive office of the
corporation.
Any meeting of the board, regular or special, may be held by conference
telephone or similar communication equipment, so long as all directors
participating in the meeting can hear one another; and all such participating
directors shall be deemed to be present in person at the meeting.
3.7 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. 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
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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.
3.8 REGULAR MEETINGS
Regular meetings of the board of directors may be held without notice at
such time as shall from time to time be determined by the board of directors.
If any regular meeting day shall fall on a legal holiday, then the meeting shall
be held at the same time and place on the next succeeding full business day.
3.9 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 directors.
Notice of the time and place of special meetings shall be delivered
personally or by telephone to each director or sent by first-class mail,
telecopy or telegram, charges prepaid, addressed to each director at that
director's address as it is shown on the records of the corporation. If the
notice is mailed, it shall be deposited in the United States mail at least four
(4) days before the time of the holding of the meeting. If the notice is
delivered personally or by telephone, telecopy or telegram, it shall be
delivered personally or by telephone or to the telegraph company at least forty-
eight (48) hours before the time of the holding of the meeting. Any oral notice
given personally or by telephone may be communicated either to the director or
to a person at the office of the director who the person giving the notice has
reason to believe will promptly communicate it to the director. The notice need
not specify the purpose or the place of the meeting, if the meeting is to be
held at the principal executive office of the corporation.
3.10 QUORUM
A majority of the authorized number of directors shall constitute a quorum
for the transaction of business, except to adjourn as provided in Section 3.12
of these bylaws. Every act or decision done or made by a majority of the
directors present at a duly held meeting at which a quorum is present shall be
regarded as the act of the board of directors, subject to the provisions of the
certificate of incorporation and applicable law.
A meeting at which a quorum is initially present may continue to transact
business notwithstanding the withdrawal of directors, if any action taken is
approved by at least a majority of the quorum for that meeting.
3.11 WAIVER OF NOTICE
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Notice of a meeting need not be given to any director (i) who signs a
waiver of notice, whether before or after the meeting, or (ii) who attends the
meeting other than 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. All such waivers shall be filed with the corporate records
or made part of the minutes of the meeting. A waiver of notice need not specify
the purpose of any regular or special meeting of the board of directors.
3.12 ADJOURNMENT
A majority of the directors present, whether or not constituting a quorum,
may adjourn any meeting of the board to another time and place.
3.13 NOTICE OF ADJOURNMENT
Notice of the time and place of holding an adjourned meeting of the board
need not be given unless the meeting is adjourned for more than twenty-four (24)
hours. If the meeting is adjourned for more than twenty-four (24) hours, then
notice of the time and place of the adjourned meeting shall be given before the
adjourned meeting takes place, in the manner specified in Section 3.9 of these
bylaws, to the directors who were not present at the time of the adjournment.
3.14 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING
Any action required or permitted to be taken by the board of directors may
be taken without a meeting, provided that all members of the board individually
or collectively consent in writing to that action. Such action by written
consent shall have the same force and effect as a unanimous vote of the board of
directors. Such written consent and any counterparts thereof shall be filed
with the minutes of the proceedings of the board of directors.
3.15 FEES AND COMPENSATION OF DIRECTORS
Directors and members of committees may receive such compensation, if any,
for their services and such reimbursement of expenses as may be fixed or
determined by resolution of the board of directors. This Section 3.15 shall not
be construed to preclude any director from serving the corporation in any other
capacity as an officer, agent, employee or otherwise and receiving compensation
for those services.
3.16 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 any of its
subsidiaries, including any officer or employee who is a director of the
corporation or any of its subsidiaries, whenever, in the judgment of the
directors, such loan, guaranty or assistance may reasonably be expected to
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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 contained in this section shall be deemed to
deny, limit or restrict the powers of guaranty or warranty of the corporation at
common law or under any statute.
3.17 SOLE DIRECTOR PROVIDED BY CERTIFICATE OF INCORPORATION
In the event only one director is required by these bylaws or the
certificate of incorporation, then any reference herein to notices, waivers,
consents, meetings or other actions by a majority or quorum of the directors
shall be deemed to refer to such notice, waiver, etc., by such sole director,
who shall have all the rights and duties and shall be entitled to exercise all
of the powers and shall assume all the responsibilities otherwise herein
described as given to the board of directors.
3.18 NOMINATION OF DIRECTORS; STOCKHOLDER BUSINESS AT ANNUAL MEETINGS
Subject to the rights of holders of any class or series of stock having a
preference over the Common Stock as to dividends or upon liquidation,
nominations for the election of directors may be made by the board of directors
or any nominating committee appointed by the board of directors or by any
stockholder entitled to be in the election of directors generally. However, a
stockholder generally entitled to vote in the election of directors may nominate
one or more persons for election as directors at a meeting only if written
notice of such stockholder's intent to make such nomination or nominations has
been given, either by personal delivery or by U.S. mail, postage prepaid, to the
secretary of the corporation not later than (i) with respect to an election to
be held at an annual meeting of stockholders, 60 days in advance of such meeting
and (ii) with respect to an election to be held at a special meeting of
stockholders for the election of directors, the close of business on the seventh
day following the date on which notice of such meeting is first given to
stockholders. Each such notice shall set forth the following information: (a)
the name and address of the stockholder who intends to make the nomination and
of the person or persons to be nominated; (b) a representation that the
stockholder is a holder of record of stock of the corporation entitled to vote
at such meeting and intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the notice; (c) a description of all
arrangements or understandings between the stockholder, each nominee or any
other person or persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the stockholder; (d) such other
information regarding each nominee proposed by such stockholder as would be
required to be included in a proxy statement filed pursuant to the proxy rules
of the Securities and Exchange Commission, had the nominee been nominated, or
intended to be nominated, by the board of directors of the corporation; and (e)
the consent of each nominee to serve as a director of the corporation if so
elected. At the request of the board of directors, any person properly
nominated by the board of directors for election as a director shall furnish to
the secretary of the corporation that information required to be set forth in a
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stockholder's notice of nomination which pertains to the nominee. No person
shall be eligible for election as a director of the corporation unless nominated
in accordance with the procedures set forth herein. A majority of the board of
directors may reject any nomination by a stockholder not timely made or
otherwise not in accordance with the terms of this Section 3.18. If a majority
of the board of directors reasonably determines that the information provided in
a stockholder's notice does not satisfy the informational requirements of this
Section 3.18 in any material respect, the secretary of the corporation shall
promptly notify such stockholder of the deficiency in writing. The stockholder
shall have an opportunity within such period of time, not to exceed ten days
from the date such deficiency notice is given to the stockholder, as a majority
of the board of directors shall reasonably determine. If the deficiency is not
cured within such period, or if a majority of the board of directors reasonably
determines that the additional information provided by the stockholder, together
with the information previously provided, does not satisfy the requirements of
this Section 3.18 in any material respect, then a majority of the board of
directors may reject such stockholder's nomination. The secretary of the
corporation shall notify a stockholder in writing whether the stockholder's
nomination has been made in accordance with the time and information
requirements of this Section 3.18.
At an annual meeting of the stockholders, only such business shall be
conducted as shall have been brought before the meeting (i) by or at the
direction of the chairman of the meeting or (ii) by any stockholder of the
corporation who complies with the notice procedures set forth in this Section
3.18. For business to be properly brought before an annual meeting by a
stockholder, the stockholder must have given timely notice thereof in writing to
the secretary of the corporation. To be timely, a stockholder's notice must be
delivered to or mailed and received at the principal executive offices of the
corporation not less than 60 days prior to the meeting; provided, however, that
in the event that less than 70 days notice or prior public disclosure of the
date of the meeting is given or made to stockholders, notice by the stockholder
to be timely must be received not later than the close of business on the tenth
day following the earlier of the day on which such notice of the date of the
annual meeting was mailed or such public disclosure was made. A stockholder's
notice to the secretary shall set forth as to each matter the stockholder
proposes to bring before the annual meeting the following information: (a) a
brief description of the business desired to be brought before the annual
meeting and the reasons for conducting such business at the annual meeting, (b)
the name and address, as they appear on the corporation's books, of the
stockholder proposing such business, (c) the class and number of shares of the
corporation which are beneficially owned by the stockholder and (d) any material
direct or indirect interest, financial or otherwise of the stockholder or its
affiliates or associates in such business. The board of directors may reject
any stockholder proposal not timely made in accordance with this Section 3.18.
If the board of directors determines that the information provided in a
stockholder's notice does not satisfy the informational requirements hereof, the
secretary of the corporation shall promptly notify such stockholder of the
deficiency in the notice. The stockholder shall then have an opportunity to
cure the deficiency by providing additional information to the secretary within
such period of time, not to exceed ten days from the date such deficiency notice
is given to the stockholder, as the board of directors shall determine. If the
deficiency is not cured within such period, or if the board of directors
determines that the
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additional information provided by the stockholder, together with the
information previously provided, does not satisfy the requirements of this
Section 3.18, then the board of directors may reject such stockholder's
proposal. The secretary of the corporation shall notify a stockholder in writing
whether the stockholder's proposal has been made in accordance with the time and
information requirements hereof.
This provision shall not prevent the consideration and approval or
disapproval at an annual meeting of reports of officers, directors and
committees of the board of directors, but in connection therewith no new
business shall be acted upon at any such meeting unless stated, filed and
received as herein provided. Notwithstanding anything in these bylaws to the
contrary, no business brought before a meeting by a stockholder shall be
conducted at an annual meeting except in accordance with procedures set forth in
this Section 3.18.
ARTICLE IV
COMMITTEES
4.1 COMMITTEES OF DIRECTORS
The board of directors may, by resolution adopted by a majority of the
authorized number of directors, designate one or more committees, each
consisting of one or more directors, to serve at the pleasure of the board. 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. The appointment of members or alternate members of a committee
requires the vote of a majority of the authorized number of directors. Any
committee, to the extent provided in the resolution of the board, shall have and
may exercise all the powers and authority of the board, 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 the designations and 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 (relating to mergers and consolidations of domestic and foreign
corporations), (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
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adopt a certificate of ownership and merger pursuant to Section 253 of the
General Corporation Law of Delaware (relating to mergers of parent and
subsidiary corporations).
4.2 MEETINGS AND ACTION OF COMMITTEES
Meetings and actions of committees shall be governed by, and held and taken
in accordance with, the following provisions of Article III of these bylaws:
Section 3.6 (place of meetings; meetings by telephone), Section 3.8 (regular
meetings), Section 3.9 (special meetings; notice), Section 3.10 (quorum),
Section 3.11 (waiver of notice), Section 3.12 (adjournment), Section 3.13
(notice of adjournment) and Section 3.14 (board action by written consent
without 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 be determined either by resolution of the board of directors or
by resolution of the committee, that special 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.
4.3 COMMITTEE MINUTES
Each committee shall keep regular minutes of its meetings and report the
same to the board of directors when required.
ARTICLE V
OFFICERS
5.1 OFFICERS
The Corporate Officers of the corporation shall be a president, a secretary
and a chief financial officer. The corporation may also have, at the discretion
of the board of directors, a chairman of the board, one or more vice presidents
(however denominated), one or more assistant secretaries, one or more assistant
treasurers, and 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.
In addition to the Corporate Officers of the Company described above, there
may also be such Administrative Officers of the corporation as may be designated
and appointed from time to time by the president of the corporation in
accordance with the provisions of Section 5.12 of these bylaws.
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5.2 ELECTION OF OFFICERS
The Corporate Officers of the corporation, except such officers as may be
appointed in accordance with the provisions of Section 5.3 or Section 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, and shall hold their
respective offices for such terms as the board of directors may from time to
time determine.
5.3 SUBORDINATE OFFICERS
The board of directors may appoint, or may empower the president to
appoint, such other Corporate Officers as the business of the corporation may
require, each of whom shall hold office for such period, have such power and
authority, and perform such duties as are provided in these bylaws or as the
board of directors may from time to time determine.
The president may from time to time designate and appoint Administrative
Officers of the corporation in accordance with the provisions of Section 5.12 of
these bylaws.
5.4 REMOVAL AND RESIGNATION OF OFFICERS
Subject to the rights, if any, of a Corporate Officer under any contract of
employment, any Corporate Officer may be removed, either with or without cause,
by the board of directors at any regular or special meeting of the board or,
except in case of a Corporate Officer chosen by the board of directors, by any
Corporate Officer upon whom such power of removal may be conferred by the board
of directors.
Any Corporate 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 Corporate
Officer is a party.
Any Administrative Officer designated and appointed by the president may be
removed, either with or without cause, at any time by the president. Any
Administrative Officer may resign at any time by giving written notice to the
president or to the secretary of the corporation.
5.5 VACANCIES IN OFFICES
A vacancy in any office because of death, resignation, removal,
disqualification or any other cause shall be filled in the manner prescribed in
these bylaws for regular appointments to that office.
5.6 CHAIRMAN OF THE BOARD
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The chairman of the board, if such an officer be elected, shall, if
present, preside at meetings of the board of directors and exercise such other
powers and perform such other 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
or she shall preside at all meetings of the stockholders and, in the absence or
nonexistence of a chairman of the board, at all meetings of the board of
directors. He or she 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 perform such other duties as may be prescribed by the board of
directors or these bylaws.
5.8 VICE PRESIDENTS
In the absence or disability of the president, and if there is no chairman
of the board, 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.
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 the board of directors,
committees of directors and stockholders. 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
stockholders' 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 stockholders
and their addresses, the number and classes of shares held by each, the
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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 stockholders and of the board of directors required to be given by law or by
these bylaws. He or she 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.
5.10 CHIEF FINANCIAL OFFICER
The chief financial officer 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 for a purpose reasonably related to
his position as a director.
The chief financial officer 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 or she 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 or
her transactions as chief financial officer 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, if any, or, if there is more than one, the
assistant secretaries in the order determined by the 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
may from time to time prescribe.
5.12 ADMINISTRATIVE OFFICERS
In addition to the Corporate Officers of the corporation as provided in
Section 5.1 of these bylaws and such subordinate Corporate Officers as may be
appointed in accordance with Section 5.3 of these bylaws, there may also be such
Administrative Officers of the corporation as may be designated and appointed
from time to time by the president of the corporation. Administrative Officers
shall perform such duties and have such powers as from time to time may be
determined by the president or the board of directors in order to assist the
Corporate Officers in the furtherance of their duties. In the performance of
such duties and the exercise of such powers, however, such Administrative
Officers shall have limited authority to act on behalf
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of the corporation as the board of directors shall establish, including but not
limited to limitations on the dollar amount and on the scope of agreements or
commitments that may be made by such Administrative Officers on behalf of the
corporation, which limitations may not be exceeded by such individuals or
altered by the president without further approval by the board of directors.
5.13 AUTHORITY AND DUTIES OF OFFICERS
In addition to the foregoing powers, authority and duties, all officers of
the corporation shall respectively have such authority and powers 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.
ARTICLE VI
INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES
AND OTHER AGENTS
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 as the same now exists or may hereafter
be amended, indemnify any person against expenses (including attorneys' fees),
judgments, fines, and amounts paid in settlement actually and reasonably
incurred in connection with any threatened, pending or completed action, suit,
or proceeding in which such person was or is a party or is threatened to be made
a party by reason of the fact that such person is or was a director or officer
of the corporation. For purposes of this Section 6.1, a "director" or "officer"
of the corporation shall mean 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.
The corporation shall be required to indemnify a director or officer in
connection with an action, suit, or proceeding (or part thereof) initiated by
such director or officer only if the initiation of such action, suit, or
proceeding (or part thereof) by the director or officer was authorized by the
board of directors of the corporation.
The corporation shall pay the expenses (including attorneys' fees) incurred
by a director or officer of the corporation entitled to indemnification
hereunder in defending any action, suit or proceeding referred to in this
Section 6.1 in advance of its final disposition; provided, however, that payment
of expenses incurred by a director or officer of the corporation in advance of
the final disposition of such action, suit or proceeding shall be made only upon
receipt of an undertaking by the director or officer to repay all amounts
advanced if it should ultimately be
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determined that the director or officer is not entitled to be indemnified under
this Section 6.1 or otherwise.
The rights conferred on any person by this Article shall not be exclusive
of any other rights which such person may have or hereafter acquire under any
statute, provision of the corporation's Certificate of Incorporation, these
bylaws, agreement, vote of the stockholders or disinterested directors or
otherwise.
Any repeal or modification of the foregoing provisions of this Article
shall not adversely affect any right or protection hereunder of any person in
respect of any act or omission occurring prior to the time of such repeal or
modification.
6.2 INDEMNIFICATION OF OTHERS
The corporation shall have the power, to the maximum extent and in the
manner permitted by the General Corporation Law of Delaware as the same now
exists or may hereafter be amended, to indemnify any person (other than
directors and officers) against expenses (including attorneys' fees), judgments,
fines, and amounts paid in settlement actually and reasonably incurred in
connection with any threatened, pending or completed action, suit, or
proceeding, in which such person was or is a party or is threatened to be made a
party by reason of the fact that such person is or was an employee or agent of
the corporation. For purposes of this Section 6.2, an "employee" or "agent" of
the corporation (other than a director or officer) shall mean 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 or her and incurred
by him or her in any such capacity, or arising out of his or her status as such,
whether or not the corporation would have the power to indemnify him or her
against such liability under the provisions of the General Corporation Law of
Delaware.
ARTICLE VII
RECORDS AND REPORTS
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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
stockholders listing their names and addresses and the number and class of
shares held by each stockholder, a copy of these bylaws as amended to date,
accounting books and other records of its business and properties.
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.
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 or her position as a director.
7.3 REPRESENTATION OF SHARES OF OTHER CORPORATIONS
The chairman of the board, if any, the president, any vice president, the
chief financial officer, the secretary or any 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 the
stock of any other corporation or corporations standing in the name of this
corporation. The authority herein granted 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.
7.4 CERTIFICATION AND INSPECTION OF BYLAWS
The original or a copy of these bylaws, as amended or otherwise altered to
date, certified by the secretary, shall be kept at the corporation's principal
executive office and shall be open to inspection by the stockholders of the
corporation, at all reasonable times during office hours.
ARTICLE VII
GENERAL MATTERS
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8.1 RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING
For purposes of determining the stockholders entitled to receive payment of
any dividend or other distribution or allotment of any rights or the
stockholders 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
precede the date upon which the resolution fixing the record date is adopted and
which shall not be more than sixty (60) days before any such action. In that
case, only stockholders of record at the close of business on the date so fixed
are entitled to receive the dividend, distribution or allotment of rights, or to
exercise such rights, as the case may be, notwithstanding any transfer of any
shares on the books of the corporation after the record date so fixed, except as
otherwise provided by law.
If the board of directors does not so fix a record date, then the record
date for determining stockholders for any such purpose shall be at the close of
business on the day on which the board of directors adopts the applicable
resolution.
8.2 CHECKS; DRAFTS; EVIDENCES OF INDEBTEDNESS
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.
8.3 CORPORATE CONTRACTS AND INSTRUMENTS: HOW EXECUTED
The board of directors, except as otherwise provided in these bylaws, may
authorize and empower 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 power and 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.
8.4 STOCK CERTIFICATES; TRANSFER; PARTLY PAID SHARES
The shares of the 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
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vice-chairman of the board of directors, or the president or vice-president, and
by the chief financial officer 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 or
she were such officer, transfer agent or registrar at the date of issue.
Certificates for shares shall be of such form and device as the board of
directors may designate and shall state the name of the record holder of the
shares represented thereby; its number; date of issuance; the number of shares
for which it is issued; a summary statement or reference to the powers,
designations, preferences or other special rights of such stock and the
qualifications, limitations or restrictions of such preferences and/or rights,
if any; a statement or summary of liens, if any; a conspicuous notice of
restrictions upon transfer or registration of transfer, if any; a statement as
to any applicable voting trust agreement; and, if the shares be assessable, or,
if assessments are collectible by personal action, a plain statement of such
facts.
Upon surrender to the secretary or transfer agent of the corporation of a
certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignment 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 upon its books.
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, or 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.
8.5 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 (relating to transfers of stock, stock certificates and uncertificated
stock), 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
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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.
8.6 LOST CERTIFICATES
Except as provided in this Section 8.6, 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 board of
directors may, in case any share certificate or certificate for any other
security is lost, stolen or destroyed, authorize the issuance of replacement
certificates on such terms and conditions as the board may require; the board
may require indemnification of the corporation secured by a bond or other
adequate security sufficient to protect the corporation against any claim that
may be made against it, including any expense or liability, on account of the
alleged loss, theft or destruction of the certificate or the issuance of the
replacement certificate.
8.7 TRANSFER AGENTS AND REGISTRARS
The board of directors may appoint one or more transfer agents or transfer
clerks, and one or more registrars, each of which shall be an incorporated bank
or trust company -- either domestic or foreign, who shall be appointed at such
times and places as the requirements of the corporation may necessitate and the
board of directors may designate.
8.8 CONSTRUCTION; DEFINITIONS
Unless the context requires otherwise, the general provisions, rules of
construction and definitions in the General Corporation Law of Delaware shall
govern the construction of these bylaws. Without limiting the generality of
this provision, as used in these bylaws, the singular number includes the
plural, the plural number includes the singular, and the term "person" includes
both an entity and a natural person.
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. Whenever an amendment or
new bylaw is adopted, it shall be copied in the book of bylaws with the original
bylaws, in the
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appropriate place. If any bylaw is repealed, the fact of repeal with the date of
the meeting at which the repeal was enacted or the filing of the operative
written consent(s) shall be stated in said book.
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EXHIBIT C
MapQuest.com, Inc.
Independent Directors Fee Policy
--------------------------------
(April, 1999)
"Independent Directors" refers to directors who are not (a) executives or
employees of MapQuest.com, Inc., (the "Company") or (b) nominees, partners,
directors, executives or employees of any institutional investor.
Until further modified by the Board of Directors, Independent Directors of
the Company will be paid fees, according to whether they are Chairmen of
Committees, and based on the number of meetings of the Board of Directors and
Committees thereof that they attend.
Independent Directors of the Company, for service as directors of the
Company, will be paid (a) $10,000 per annum.
If, for any reason, any Independent Director is prohibited or restricted
from personally receiving the foregoing fees by his employer or otherwise, or
otherwise notifies either company that such Independent Director waives such
fees, then such fees will not be paid to such director.
All Directors will be reimbursed for their reasonable and documented out-
of-pocket expenses incurred by them in connection, in connection with attending
such meetings, including travel, meals and lodging.
<PAGE>
EXHIBIT D
DIRECTORS INDEMNIFICATION AGREEMENT
-----------------------------------
This Indemnification Agreement ("Agreement") is effective as of, April __,
by and between MapQuest.com, Inc., a Delaware corporation (the "Company"), and
each of the persons listed on Schedule 1 hereto as a director of the Company
----------
(each an "Indemnitee").
WHEREAS, the Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, to serve the Company and its related
entities;
WHEREAS, in order to induce Indemnitee to continue to provide services to
the Company, the Company wishes to provide for the indemnification of, and the
advancement of expenses to, Indemnitee to the maximum extent permitted by law;
WHEREAS, the Company and Indemnitee recognize the continued difficulty in
obtaining liability insurance for the Company's directors, officers, employees,
agents and fiduciaries, the significant increases in the cost of such insurance
and the general reductions in the coverage of such insurance;
WHEREAS, the Company and Indemnitee further recognize the substantial
increase in corporate litigation in general, subjecting directors, officers,
employees, agents and fiduciaries to expensive litigation risks at the same time
as the availability and coverage of liability insurance has been severely
limited; and
WHEREAS, in view of the considerations set forth above, the Company desires
that Indemnitee shall be indemnified and advanced expenses by the Company as set
forth herein;
NOW, THEREFORE, the Company and Indemnitee hereby agree as set forth below.
1. CERTAIN DEFINITIONS.
-------------------
a. "Change in Control" shall mean, and shall be deemed to have occurred
-----------------
if, on or after the date of this Agreement, (i) any "person" (as such term
is used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended), other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company acting in such
capacity or a corporation owned directly or indirectly by the stockholders
of the Company in substantially the same proportions as their ownership of
stock of the Company, becomes the "beneficial owner" (as defined in Rule
13d-3 under said Act), directly or indirectly, of securities of the
Company representing more than 50% of the total voting power represented
by the Company's then outstanding Voting Securities (as defined below),
(ii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of the Company
and any new director whose election by the Board of Directors or
nomination for election by the Company's stockholders was approved by a
vote of at
<PAGE>
least two thirds (2/3) of the directors then still in office who
either were directors at the beginning of the period or whose election
or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof, or (iii) the stockholders of
the Company approve a merger or consolidation of the Company with any
other corporation other than a merger or consolidation which would
result in the Voting Securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding
or by being converted into Voting Securities of the surviving entity)
at least 80% of the total voting power represented by the Voting
Securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or the stockholders of
the Company approve a plan of complete liquidation of the Company or
an agreement for the sale or disposition by the Company of (in one
transaction or a series of related transactions) all or substantially
all of the Company's assets.
b. "Claim" shall mean with respect to a Covered Event (as defined
-----
below): any threatened, pending or completed action, suit, proceeding
or alternative dispute resolution mechanism, or any hearing, inquiry
or investigation that Indemnitee in good faith believes might lead to
the institution of any such action, suit, proceeding or alternative
dispute resolution mechanism, whether civil, criminal, administrative,
investigative or other.
c. References to the "Company" shall include, in addition to
-------
MapQuest.com, Inc., any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or merger to
which MapQuest.com, Inc. (or any of its wholly owned subsidiaries) is
a party which, if its separate existence had continued, would have had
power and authority to indemnify its directors, officers, employees,
agents or fiduciaries, so that if Indemnitee is or was a director,
officer, employee, agent or fiduciary of such constituent corporation,
or is or was serving at the request of such constituent corporation as
a director, officer, employee, agent or fiduciary of another
corporation, partnership, joint venture, employee benefit plan, trust
or other enterprise, Indemnitee shall stand in the same position under
the provisions of this Agreement with respect to the resulting or
surviving corporation as Indemnitee would have with respect to such
constituent corporation if its separate existence had continued.
d. "Covered Event" shall mean any event or occurrence (whether arising
-------------
prior to or subsequent to this Agreement) related to the fact that
Indemnitee is or was a director, officer, employee, agent or fiduciary
of the Company, or any subsidiary of the Company, or is or was serving
at the request of the Company as a director, officer, employee, agent
or fiduciary of another corporation, partnership, joint venture, trust
or other enterprise, or by reason of any action or inaction on the
part of Indemnitee while serving in such capacity and shall include,
without limitation, (i) the declaration of dividends to stockholders
in the absence of a surplus, (ii) the approval of the issuance of
securities and the failure to register such securities under relevant
<PAGE>
securities laws, including the Securities Act of 1933, as amended, in
the absence of a qualified exemption from such registration
requirements, and (iii) the approval of amendments to stock option
plans without obtaining the necessary consent of then option holders
prior to such amendment.
e. "Expenses" shall mean any and all expenses (including attorneys'
--------
fees and all other costs, expenses and obligations incurred in
connection with investigating, defending, being a witness in or
participating in (including on appeal), or preparing to defend, to be
a witness in or to participate in, any action, suit, proceeding,
alternative dispute resolution mechanism, hearing, inquiry or
investigation), judgments, fines, penalties and amounts paid in
settlement (if such settlement is approved in advance by the Company,
which approval shall not be unreasonably withheld), actually and
reasonably incurred, of any Claim and any federal, state, local or
foreign taxes imposed on the Indemnitee as a result of the actual or
deemed receipt of any payments under this Agreement.
f. "Expense Advance" shall mean a payment to Indemnitee pursuant to
---------------
Section 3 of Expenses in advance of the settlement of or final
judgement in any action, suit, proceeding or alternative dispute
resolution mechanism, hearing, inquiry or investigation which
constitutes a Claim.
g. "Independent Legal Counsel" shall mean an attorney or firm of
-------------------------
attorneys, selected in accordance with the provisions of Section 2(d)
hereof, who shall not have otherwise performed services for the
Company or Indemnitee within the last three years (other than with
respect to matters concerning the rights of Indemnitee under this
Agreement, or of other indemnitees under similar indemnity
agreements).
h. References to "Other Enterprises" shall include employee benefit
-----------------
plans; references to "Fines" shall include any excise taxes assessed
on Indemnitee with respect to an employee benefit plan; and references
to "Serving at the Request of the Company" shall include any service
as a director, officer, employee, agent or fiduciary of the Company
which imposes duties on, or involves services by, such director,
officer, employee, agent or fiduciary with respect to an employee
benefit plan, its participants or its beneficiaries; and if Indemnitee
acted in good faith and in a manner Indemnitee reasonably believed to
be in the interest of the participants and beneficiaries of an
employee benefit plan, Indemnitee shall be deemed to have acted in a
manner "Not Opposed to the Best Interests of the Company" as referred
to in this Agreement.
i. "Reviewing Party" shall mean, subject to the provisions of Section
---------------
2(d), any person or body appointed by the Board of Directors in
accordance with applicable law to review the Company's obligations
hereunder and under applicable law, which may include a member or
members of the Company's Board of Directors, Independent Legal Counsel
or any other person or body not a party to the particular
<PAGE>
Claim for which Indemnitee is seeking indemnification.
j. "Section" refers to a section of this Agreement unless otherwise
-------
indicated.
k. "Voting Securities" shall mean any securities of the Company that
-----------------
vote generally in the election of directors.
2. INDEMNIFICATION.
---------------
a. Indemnification of Expenses. Subject to the provisions of Section
---------------------------
2(b) below, the Company shall indemnify Indemnitee for Expenses to the
fullest extent permitted by law if Indemnitee was or is or becomes a
party to or witness or other participant in, or is threatened to be
made a party to or witness or other participant in, any Claim (whether
by reason of or arising in part out of a Covered Event), including all
interest, assessments and other charges paid or payable in connection
with or in respect of such Expenses.
b. Review of Indemnification Obligations. Notwithstanding the
-------------------------------------
foregoing, in the event any Reviewing Party shall have determined (in
a written opinion, in any case in which Independent Legal Counsel is
the Reviewing Party) that Indemnitee is not entitled to be indemnified
hereunder under applicable law, (i) the Company shall have no further
obligation under Section 2(a) to make any payments to Indemnitee not
made prior to such determination by such Reviewing Party, and (ii) the
Company shall be entitled to be reimbursed by Indemnitee (who hereby
agrees to reimburse the Company) for all Expenses theretofore paid in
indemnifying Indemnitee; provided, however, that if Indemnitee has
-------- -------
commenced or thereafter commences legal proceedings in a court of
competent jurisdiction to secure a determination that Indemnitee is
entitled to be indemnified hereunder under applicable law, any
determination made by any Reviewing Party that Indemnitee is not
entitled to be indemnified hereunder under applicable law shall not be
binding and Indemnitee shall not be required to reimburse the Company
for any Expenses theretofore paid in indemnifying Indemnitee until a
final judicial determination is made with respect thereto (as to which
all rights of appeal therefrom have been exhausted or lapsed).
Indemnitee's obligation to reimburse the Company for any Expenses
shall be unsecured and no interest shall be charged thereon.
c. Indemnitee Rights on Unfavorable Determination; Binding Effect. If
--------------------------------------------------------------
any Reviewing Party determines that Indemnitee substantively is not
entitled to be indemnified hereunder in whole or in part under
applicable law, Indemnitee shall have the right to commence litigation
seeking an initial determination by the court or challenging any such
determination by such Reviewing Party or any aspect thereof, including
the legal or factual bases therefor, and, subject to the provisions of
Section 15, the Company hereby consents to service of process and to
appear in any such proceeding. Absent such litigation, any
determination by any Reviewing Party shall
<PAGE>
be conclusive and binding on the Company and Indemnitee.
d. Selection of Reviewing Party; Change in Control. If there has not
-----------------------------------------------
been a Change in Control, any Reviewing Party shall be selected by the
Board of Directors, and if there has been such a Change in Control
(other than a Change in Control which has been approved by a majority
of the Company's Board of Directors who were directors immediately
prior to such Change in Control), any Reviewing Party with respect to
all matters thereafter arising concerning the rights of Indemnitee to
indemnification of Expenses under this Agreement or any other
agreement or under the Company's certificate of incorporation or
bylaws as now or hereafter in effect, or under any other applicable
law, if desired by Indemnitee, shall be Independent Legal Counsel
selected by Indemnitee and approved by the Company (which approval
shall not be unreasonably withheld). Such counsel, among other
things, shall render its written opinion to the Company and Indemnitee
as to whether and to what extent Indemnitee would be entitled to be
indemnified hereunder under applicable law and the Company agrees to
abide by such opinion. The Company agrees to pay the reasonable fees
of the Independent Legal Counsel referred to above and to indemnify
fully such counsel against any and all expenses (including attorneys'
fees), claims, liabilities and damages arising out of or relating to
this Agreement or its engagement pursuant hereto. Notwithstanding any
other provision of this Agreement, the Company shall not be required
to pay Expenses of more than one Independent Legal Counsel in
connection with all matters concerning a single Indemnitee, and such
Independent Legal Counsel shall be the Independent Legal Counsel for
any or all other Indemnitees unless (i) the Company otherwise
determines or (ii) any Indemnitee shall provide a written statement
setting forth in detail a reasonable objection to such Independent
Legal Counsel representing other Indemnitees.
e. Mandatory Payment of Expenses. Notwithstanding any other provision
-----------------------------
of this Agreement other than Section 10 hereof, to the extent that
Indemnitee has been successful on the merits or otherwise, including,
without limitation, the dismissal of an action without prejudice, in
defense of any Claim, Indemnitee shall be indemnified against all
Expenses incurred by Indemnitee in connection therewith.
3. EXPENSE ADVANCES.
----------------
a. Obligation to Make Expense Advances. The Company shall make Expense
-----------------------------------
Advances to Indemnitee upon receipt of a written undertaking by or on
behalf of the Indemnitee to repay such amounts if it shall ultimately
be determined that the Indemnitee is not entitled to be indemnified
therefor by the Company.
b. Form of Undertaking. Any written undertaking by the Indemnitee to
-------------------
repay any Expense Advances hereunder shall be unsecured and no
interest shall be charged thereon.
<PAGE>
c. Determination of Reasonable Expense Advances. The parties agree
--------------------------------------------
that for the purposes of any Expense Advance for which Indemnitee has
made written demand to the Company in accordance with this Agreement,
all Expenses included in such Expense Advance that are certified by
affidavit of Indemnitee's counsel as being reasonable shall be
presumed conclusively to be reasonable.
4. PROCEDURES FOR INDEMNIFICATION AND EXPENSE ADVANCES.
---------------------------------------------------
a. Timing of Payments. All payments of Expenses (including without
------------------
limitation Expense Advances) by the Company to the Indemnitee pursuant
to this Agreement shall be made to the fullest extent permitted by law
as soon as practicable after written demand by Indemnitee therefor is
presented to the Company, but in no event later than forty-five (45)
business days after such written demand by Indemnitee is presented to
the Company, except in the case of Expense Advances, which shall be
made no later than twenty (20) business days after such written demand
by Indemnitee is presented to the Company.
b. Notice/Cooperation by Indemnitee. Indemnitee shall, as a condition
--------------------------------
precedent to Indemnitee's right to be indemnified or Indemnitee's
right to receive Expense Advances under this Agreement, give the
Company notice in writing as soon as practicable of any Claim made
against Indemnitee for which indemnification will or could be sought
under this Agreement. Notice to the Company shall be directed to the
Chief Executive officer of the Company at the address shown on the
signature page of this Agreement (or such other address as the Company
shall designate in writing to Indemnitee). In addition, Indemnitee
shall give the Company such information and cooperation as it may
reasonably require and as shall be within Indemnitee's power.
c. No Presumptions; Burden of Proof. For purposes of this Agreement,
--------------------------------
the termination of any Claim by judgment, order, settlement (whether
with or without court approval) or conviction, or upon a plea of nolo
contendere, or its equivalent, shall not create a presumption that
Indemnitee did not meet any particular standard of conduct or have any
particular belief or that a court has determined that indemnification
is not permitted by this Agreement or applicable law. In addition,
neither the failure of any Reviewing Party to have made a
determination as to whether Indemnitee has met any particular standard
of conduct or had any particular belief, nor an actual determination
by any Reviewing Party that Indemnitee has not met such standard of
conduct or did not have such belief, prior to the commencement of
legal proceedings by Indemnitee to secure a judicial determination
that Indemnitee should be indemnified under this Agreement or
applicable law, shall be a defense to Indemnitee's claim or create a
presumption that Indemnitee has not met any particular standard of
conduct or did not have any particular belief. In connection with any
determination by any Reviewing Party or otherwise as to whether the
Indemnitee is entitled to be indemnified hereunder, the burden of
proof shall be on
<PAGE>
the Company to establish that Indemnitee is not so entitled.
d. Notice to Insurers. If, at the time of the receipt by the Company
------------------
of a notice of a Claim pursuant to Section 4(b) hereof, the Company
has liability insurance in effect which may cover such Claim, the
Company shall give prompt notice of the commencement of such Claim to
the insurers in accordance with the procedures set forth in the
respective policies. The Company shall thereafter take all necessary
or desirable action to cause such insurers to pay, on behalf of the
Indemnitee, all amounts payable as a result of such Claim in
accordance with the terms of such policies.
e. Selection of Counsel. In the event the Company shall be obligated
--------------------
hereunder to provide indemnification for or make any Expense Advances
with respect to the Expenses of any Claim, the Company, if
appropriate, shall be entitled to assume the defense of such Claim
with counsel approved by Indemnitee (which approval shall not be
unreasonably withheld) upon the delivery to Indemnitee of written
notice of the Company's election to do so. After delivery of such
notice, approval of such counsel by Indemnitee and the retention of
such counsel by the Company, the Company will not be liable to
Indemnitee under this Agreement for any fees or expenses of separate
counsel subsequently employed by or on behalf of Indemnitee with
respect to the same Claim; provided, however, that (i) Indemnitee
-------- -------
shall have the right to employ Indemnitee's separate counsel in any
such Claim at Indemnitee's expense and (ii) if (A) the employment of
separate counsel by Indemnitee has been previously authorized by the
Company, (B) Indemnitee shall have reasonably concluded that there may
be a conflict of interest between the Company and Indemnitee in the
conduct of any such defense, or (C) the Company shall not continue to
retain such counsel to defend such Claim, then the fees and expenses
of Indemnitee's separate counsel shall be Expenses for which
Indemnitee may receive indemnification or Expense Advances hereunder.
5. ADDITIONAL INDEMNIFICATION RIGHTS; NONEXCLUSIVITY.
-------------------------------------------------
a. Scope. The Company hereby agrees to indemnify the Indemnitee to the
-----
fullest extent permitted by law, notwithstanding that such
indemnification is not specifically authorized by the other provisions
of this Agreement, the Company's certificate of incorporation, the
Company's bylaws or by statute. In the event of any change after the
date of this Agreement in any applicable law, statute or rule which
expands the right of a Delaware corporation to indemnify a member of
its board of directors or an officer, employee, agent or fiduciary, it
is the intent of the parties hereto that Indemnitee shall enjoy by
this Agreement the greater benefits afforded by such change. In the
event of any change in any applicable law, statute or rule which
narrows the right of a Delaware corporation to indemnify a member of
its board of directors or an officer, employee, agent or fiduciary,
such change, to the extent not otherwise required by such law, statute
or rule to be applied to this Agreement, shall
<PAGE>
have no effect on this Agreement or the parties, rights and
obligations hereunder except as set forth in Section 10(a) hereof.
b. Nonexclusivity. The indemnification and the payment of Expense
--------------
Advances provided by this Agreement shall be in addition to any rights
to which Indemnitee may be entitled under the Company's certificate of
incorporation, its bylaws, any other agreement, any vote of
stockholders or disinterested directors, the General Corporation Law
of the State of Delaware, or otherwise. The indemnification and the
payment of Expense Advances provided under this Agreement shall
continue as to Indemnitee for any action taken or not taken while
serving in an indemnified capacity even though subsequent thereto
Indemnitee may have ceased to serve in such capacity.
6. NO DUPLICATION OF PAYMENTS. The Company shall not be liable under this
--------------------------
Agreement to make any payment in connection with any Claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy, provision of the Company's certificate of
incorporation, bylaws or otherwise) of the amounts otherwise payable
hereunder.
7. PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any
-----------------------
provision of this Agreement to indemnification by the Company for some or a
portion of Expenses incurred in connection with any Claim, but not,
however, for all of the total amount thereof, the Company shall
nevertheless indemnify Indemnitee for the portion of such Expenses to which
Indemnitee is entitled.
8. MUTUAL ACKNOWLEDGMENT. Both the Company and Indemnitee acknowledge
---------------------
that in certain instance, federal law or applicable public policy may
prohibit the Company from indemnifying its directors, officers, employees,
agents or fiduciaries under this Agreement or otherwise. Indemnitee
understand and acknowledges that the Company has undertaken or may be
required in the future to undertake with the Securities and Exchange
Commission to submit the question of indemnification to a court in certain
circumstances for a determination of the Company's right under public
policy to indemnify Indemnitee.
9. LIABILITY INSURANCE. To the extent the Company maintains liability
-------------------
insurance applicable to directors, officers, employees, agents or
fiduciaries, Indemnitee shall be covered by such policies in such a manner
as to provide Indemnitee the same rights and benefits as are provided to
the most favorably insured of the Company's directors, if Indemnitee is a
director; or of the Company's officers, if Indemnitee is not a director of
the Company but is an officer; or of the Company's key employees, agents or
fiduciaries, if Indemnitee is not an officer or director but is a key
employee, agent or fiduciary.
10. EXCEPTIONS. Notwithstanding any other provision of this Agreement, the
----------
Company shall not be obligated pursuant to the terms of this Agreement:
<PAGE>
a. Excluded Action or Omissions. To indemnify Indemnitee for
----------------------------
Expenses resulting from acts, omissions or transactions for which
Indemnitee is prohibited from receiving indemnification under this
Agreement or applicable law; provided, however, that notwithstanding
-------- -------
any limitation set forth in this Section 10(a) regarding the Company's
obligation to provide indemnification, Indemnitee shall be entitled
under Section 3 to receive Expense Advances hereunder with respect to
any such Claim unless and until a court having jurisdiction over the
Claim shall have made a final judicial determination (as to which all
rights of appeal therefrom have been exhausted or lapsed) that
Indemnitee has engaged in acts, omissions or transactions for which
Indemnitee is prohibited from receiving indemnification under this
Agreement or applicable law.
b. Claims Initiated by Indemnitee. To indemnify or make Expense
------------------------------
Advances to Indemnitee with respect to Claims initiated or brought
voluntarily by Indemnitee and not by way of defense, counterclaim or
crossclaim, except (i) with respect to actions or proceedings brought
to establish or enforce a right to indemnification under this
Agreement or any other agreement or insurance policy or under the
Company's certificate of incorporation or bylaws now or hereafter in
effect relating to Claims for Covered Events, (ii) in specific cases
if the Board of Directors has approved the initiation or bringing of
such Claim, or (iii) as otherwise required under Section 145 of the
Delaware General Corporation Law (relating to indemnification of
officers, directors, employees and agents; and insurance), regardless
of whether Indemnitee ultimately is determined to be entitled to such
indemnification or insurance recovery, as the case may be.
c. Lack of Good Faith. To indemnify Indemnitee for any Expenses
------------------
incurred by the Indemnitee with respect to any action instituted (i)
by Indemnitee to enforce or interpret this Agreement, if a court
having jurisdiction over such action determines as provided in Section
13 that each of the material assertions made by the Indemnitee as a
basis for such action was not made in good faith or was frivolous, or
(ii) by or in the name of the Company to enforce or interpret this
Agreement, if a court having jurisdiction over such action determines
as provided in Section 13 that each of the material defenses asserted
by Indemnitee in such action was made in bad faith or was frivolous.
d. Claims under Section 16(b). To indemnify Indemnitee for expenses
--------------------------
and the payment of profits arising from the purchase and sale by
Indemnitee of securities in violation of Section 16(b) of the
Securities Exchange Act of 1934, as amended, or any similar successor
statute; provided, however, that notwithstanding any limitation set
-------- -------
forth in this Section 10(d) regarding the Company's obligation to
provide indemnification, Indemnitee shall be entitled under Section 3
to receive Expense Advances hereunder with respect to any such Claim
unless and until a court having jurisdiction over the Claim shall have
made a final judicial determination (as to
<PAGE>
which all rights of appeal therefrom have been exhausted or lapsed)
that Indemnitee has violated said statute.
11. COUNTERPARTS. This Agreement may be executed in two or more
------------
counterparts, each of which shall constitute an original and all of which
taken together shall constitute one and the same instrument.
12. BINDING EFFECT; SUCCESSORS AND ASSIGNS. This Agreement shall be
--------------------------------------
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors, assigns (including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all
or substantially all of the business or assets of the Company), spouses,
heirs and personal and legal representatives. The Company shall require and
cause any successor (whether direct or indirect, and whether by purchase,
merger, consolidation or otherwise) to all, substantially all, or a
substantial part, of the business or assets of the Company, by written
agreement in form and substance satisfactory to Indemnitee, expressly to
assume and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform if no such
succession had taken place. This Agreement shall continue in effect
regardless of whether Indemnitee continues to serve as a director, officer,
employee, agent or fiduciary (as applicable) of the Company or of any other
enterprise at the Company's request.
13. EXPENSES INCURRED IN ACTION RELATING TO ENFORCEMENT OR INTERPRETATION.
---------------------------------------------------------------------
In the event that any action is instituted by Indemnitee under this
Agreement or under any liability insurance policies maintained by the
Company to enforce or interpret any of the terms hereof or thereof,
Indemnitee shall be entitled to be indemnified for all Expenses incurred by
Indemnitee with respect to such action (including without limitation
attorneys, fees), regardless of whether Indemnitee is ultimately successful
in such action, unless as a part of such action a court having jurisdiction
over such action makes a final judicial determination (as to which all
rights of appeal therefrom have been exhausted or lapsed) that each of the
material assertions made by Indemnitee as a basis for such action was not
made in good faith or was frivolous; provided, however, that until such
-------- -------
final judicial determination is made, Indemnitee shall be entitled under
Section 3 to receive payment of Expense Advances hereunder with respect to
such action. In the event of an action instituted by or in the name of the
Company under this Agreement to enforce or interpret any of the terms of
this Agreement, Indemnitee shall be entitled to be indemnified for all
Expenses incurred by Indemnitee in defense of such action (including
without limitation costs and expenses incurred with respect to Indemnitee's
counterclaims and cross-claims made in such action), unless as a part of
such action a court having jurisdiction over such action makes a final
judicial determination (as to which all rights of appeal therefrom have
been exhausted or lapsed) that each of the material defenses asserted by
Indemnitee in such action was made in bad faith or was frivolous; PROVIDED,
HOWEVER, that until such final judicial determination is made, Indemnitee
shall be entitled under Section 3 to
<PAGE>
receive payment of Expense Advances hereunder with respect to such action.
14. NOTICE. All notices, requests, demands and other communications under
------
this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and signed for by the party addressed, on the date of
such delivery, or (ii) if mailed by domestic certified or registered mail
with postage prepaid, on the third business day after the date postmarked.
Addresses for notice to either party are as shown on the signature page of
this Agreement or as subsequently modified by written notice.
15. CONSENT TO JURISDICTION. The Company and Indemnitee each hereby
-----------------------
irrevocably consent to the jurisdiction of the courts of the State of New
York for all purposes in connection with any action or proceeding which
arises out of or relates to this Agreement and agree that any action
instituted under this Agreement shall be commenced, prosecuted and
continued only in the State of New York in and for New York County, which
shall be the exclusive and only proper forum for adjudicating such a claim.
16. SEVERABILITY. The provisions of this Agreement shall be severable in
------------
the event that any of the provisions hereof (including any provision within
a single section, paragraph or sentence) are held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the
remaining provisions shall remain enforceable to the fullest extent
permitted by law. Furthermore, to the fullest extent possible, the
provisions of this Agreement (including without limitation each portion of
this Agreement containing any provision held to be invalid, void or
otherwise unenforceable, that is not itself invalid, void or unenforceable)
shall be construed so as to give effect to the intent manifested by the
provision held invalid, illegal or unenforceable.
17. CHOICE OF LAW. This Agreement, and all rights, remedies, liabilities,
-------------
powers and duties of the parties to this Agreement, shall be governed by
and construed in accordance with the laws of the State of Delaware without
regard to principles of conflicts of laws.
18. SUBROGATION. In the event of payment under this Agreement, the
-----------
Company shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee, who shall execute all documents required
and shall do all acts that may be necessary to secure such rights and to
enable the Company effectively to bring suit to enforce such rights.
19. AMENDMENT AND TERMINATION. No amendment, modification, termination or
-------------------------
cancellation of this Agreement shall be effective unless it is in writing
signed by both the parties hereto. No waiver of any of the provisions of
this Agreement shall be deemed to be or shall constitute a waiver of any
other provisions hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver.
<PAGE>
20. INTEGRATION AND ENTIRE AGREEMENT. This Agreement sets forth the
--------------------------------
entire understanding between the parties hereto and supersedes and merges
all previous written and oral negotiations, commitments, understandings and
agreements relating to the subject matter hereof between the parties
hereto.
21. NO CONSTRUCTION AS EMPLOYMENT AGREEMENT. Nothing contained in this
---------------------------------------
Agreement shall be construed as giving Indemnitee any right to be retained
in the employ of the Company or any of its subsidiaries or affiliated
entities.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Indemnification
Agreement as of the date first above written.
MAPQUEST.COM, INC.
By:_______________________
Name:
Title:
Address: MapQuest.com, Inc.
3710 Hempland Road
Mountville, PA 17554
AGREED TO AND ACCEPTED BY:
INDEMNITEE
_______________________________
Michael J. Mulligan
<PAGE>
AGREED TO AND ACCEPTED BY:
INDEMNITEE
_______________________________
C. Richard Allen
<PAGE>
AGREED TO AND ACCEPTED BY:
INDEMNITEE
_______________________________
Robert McCormack
<PAGE>
AGREED TO AND ACCEPTED BY:
INDEMNITEE
_______________________________
John Moragne
<PAGE>
AGREED TO AND ACCEPTED BY:
INDEMNITEE
_______________________________
Daniel Nova
<PAGE>
AGREED TO AND ACCEPTED BY:
INDEMNITEE
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Carlo von Schroeter
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SCHEDULE I
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Michael J. Mulligan
C. Richard Allen
Robert McCormack
John Moragne
Daniel Nova
Carlo von Schroeter
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EXHIBIT E
MAPQUEST.COM, INC.
1999 STOCK PLAN
1. ESTABLISHMENT, PURPOSE AND TYPES OF AWARDS
MapQuest.com, Inc. hereby establishes the MAPQUEST.COM, INC. 1999 STOCK
PLAN (the "Plan"). The purpose of the Plan is to promote the long-term growth
and profitability of MapQuest.com, Inc. (the "Corporation") by (i) providing key
people with incentives to improve stockholder value and to contribute to the
growth and financial success of the Corporation, and (ii) enabling the
Corporation to attract, retain and reward the best available persons for
positions of substantial responsibility.
The Plan permits the granting of stock options (including nonqualified
stock options and incentive stock options qualifying under Section 422 of the
Code), stock appreciation rights (including free-standing, tandem and limited
stock appreciation rights), restricted or unrestricted share awards, phantom
stock, performance awards, or any combination of the foregoing (collectively,
"Awards").
The Plan is a compensatory benefit plan within the meaning of Rule 701
under the Securities Act of 1933 (the "Securities Act"). Except to the extent
any other exemption from the Securities Act is expressly relied upon in
connection with any agreement entered into pursuant to the Plan or the
securities issuable hereunder are registered under the Securities Act, the
issuance of Common Stock pursuant to the Plan is intended to qualify for the
exemption from registration under the Securities Act provided by Rule 701. To
the extent that an exemption from registration under the Securities Act provided
by Rule 701 is unavailable, all unregistered offers and sales of Awards and
shares of Common Stock issuable upon exercise of an Award are intended to be
exempt from registration under the Securities Act in reliance upon the private
offering exemption contained in Section 4(2) of the Securities Act, or other
available exemption, and the Plan shall be so administered.
2. DEFINITIONS
Under this Plan, except where the context otherwise indicates, the
following definitions apply:
(a) "Award" shall mean any stock option, stock appreciation right, stock
award, phantom stock award, or performance award.
(b) "Board" shall mean the Board of Directors of the Corporation.
(c) "Change in Control" shall mean (i) any sale, exchange or other
disposition of substantially all of the Corporation's assets; or (ii) any
merger, share exchange, consolidation or other reorganization or business
combination in which the Corporation is not the surviving or continuing
corporation, or in which the Corporation's stockholders become entitled to
receive cash, securities of the Corporation other than voting common stock, or
securities of another issuer.
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(d) "Code" shall mean the Internal Revenue Code of 1986, as amended, and
any regulations issued thereunder.
(e) Committee" shall mean the compensation committee of the Board;
provided, however, that in the event all the members of such compensation
committee do not constitute both "Non-Employee Directors" within the meaning of
Rule 16b-3 and "outside directors" within the meaning of Section 162(m) of the
Code, than the term "Committee" shall mean such other committee of two or more
Board members appointed by the Board to administer the Plan whose members do
constitute both "Non-Employee Directors" within the meaning of Rule 16b-3 and,
to the extent that Section 162(m) of the Code is applicable to Awards granted
under the Plan, "outside directors" within the meaning of Section 162(m) of the
Code.
(f) "Common Stock" shall mean shares of the Corporation's common stock, par
value of $0.001 per share.
(g) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(h) "Fair Market Value" of a share of the Corporation's Common Stock for
any purpose on a particular date shall be determined in a manner such as the
Committee shall in good faith determine to be appropriate; provided, however,
that if the Common Stock is publicly traded, then Fair Market Value shall mean
the last reported sale price per share of Common Stock, regular way, or, in case
no such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on a national securities exchange or included for quotation on the
Nasdaq-National Market, or if the Common Stock is not so listed or admitted to
trading or included for quotation, the last quoted price, or if the Common Stock
is not so quoted, the average of the high bid and low asked prices, regular way,
in the over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System or, if such system is no
longer in use, the principal other automated quotations system that may then be
in use or, if the Common Stock is not quoted by any such organization, the
average of the closing bid and asked prices, regular way, as furnished by a
professional market maker making a market in the Common Stock as selected in
good faith by the Committee or by such other source or sources as shall be
selected in good faith by the Committee; and provided further, that in the case
of incentive stock options, the determination of Fair Market Value shall be made
by the Committee in good faith in conformance with the Treasury Regulations
under Section 422 of the Code. If, as the case may be, the relevant date is not
a trading day, the determination shall be made as of the next preceding trading
day. As used herein, the term "trading day" shall mean a day on which public
trading of securities occurs and is reported in the principal consolidated
reporting system referred to above, or if the Common Stock is not listed or
admitted to trading on a national securities exchange or included for quotation
on the Nasdaq-National Market, any day other than a Saturday, a Sunday or a day
in which banking institutions in the State of New York are closed.
(i) "Grant Agreement" shall mean a written agreement between the
Corporation and a grantee memorializing the terms and conditions of an Award
granted pursuant to the Plan.
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(j) "Grant Date" shall mean the date on which the Committee formally acts
to grant an Award to a grantee or such other date as the Committee shall so
designate at the time of taking such formal action.
(k) "Parent" shall mean a corporation, whether now or hereafter existing,
within the meaning of the definition of "parent corporation" provided in Section
424(e) of the Code, or any successor thereto of similar import.
(l) "Rule 16b-3" shall mean Rule 16b-3 as in effect under the Exchange Act
on the effective date of the Plan, or any successor provision prescribing
conditions necessary to exempt the issuance of securities under the Plan (and
further transactions in such securities) from Section 16(b) of the Exchange Act.
(m) "Subsidiary" and "subsidiaries" shall mean only a corporation or
corporations, whether now or hereafter existing, within the meaning of the
definition of "subsidiary corporation" provided in Section 424(f) of the Code,
or any successor thereto of similar import.
3. ADMINISTRATION
(a) Procedure. The Plan shall be administered by a Committee appointed by
the Board consisting of not less than two (2) members of the Board to administer
the Plan on behalf of the Board, subject to such terms and conditions as the
Board may prescribe. Once appointed, the Committee shall continue to serve until
otherwise directed by the Board. From time to time, the Board may increase the
size of the Committee and appoint additional members thereof, remove members
(with or without cause) and appoint new members in substitution therefor, fill
vacancies, however caused, and remove all members of the Committee and,
thereafter, directly administer the Plan. In the event that the Board is the
administrator of the Plan in lieu of a Committee, the term "Committee" as used
herein shall be deemed to mean the Board.
Members of the Committee who are either eligible for Awards or have been
granted Awards may vote on any matters affecting the administration of the Plan
or the grant of Awards pursuant to the Plan, except that no such member shall
act upon the granting of an Award to himself or herself, but any such member may
be counted in determining the existence of a quorum at any meeting of the
Committee during which action is taken with respect to the granting of an Award
to him or her.
The Committee shall meet at such times and places and upon such notice as
it may determine. A majority of the Committee shall constitute a quorum. Any
acts by the Committee may be taken at any meeting at which a quorum is present
and shall be by majority vote of those members entitled to vote. Additionally,
any acts reduced to writing or approved in writing by all of the members of the
Committee shall be valid acts of the Committee.
(b) Procedure After Registration of Common Stock. Notwithstanding the
provisions of subsection (a) above, unless the Board itself is deemed to be the
Committee, in the event that the Common Stock or any other capital stock of the
Corporation becomes registered under Section 12 of the Exchange Act, the members
of the Committee shall be both "Non-Employee Directors" within the meaning of
Rule 16b-3, and "outside directors" within the meaning of Section 162(m) of the
Code. Upon and after the point in time that the Common
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Stock or any other capital stock of the Corporation becomes registered under
Section 12 of the Exchange Act, the Board shall take all action necessary to
cause the Plan to be administered in accordance with the then effective
provisions of Rule 16b-3, provided that any amendment to the Plan required for
compliance with such provisions shall be made in accordance with Section 13 of
the Plan.
(c) Powers of the Committee. The Committee shall have all the powers
vested in it by the terms of the Plan, such powers to include authority, in its
sole and absolute discretion, to grant Awards under the Plan, prescribe Grant
Agreements evidencing such Awards and establish programs for granting Awards.
The Committee shall have full power and authority to take all other actions
necessary to carry out the purpose and intent of the Plan, including, but not
limited to, the authority to:
(i) determine the eligible persons to whom, and the time or times at
which Awards shall be granted,
(ii) determine the types of Awards to be granted,
(iii) determine the number of shares to be covered by or used for
reference purposes for each Award,
(iv) impose such terms, limitations, restrictions and conditions upon
any such Award as the Committee shall deem appropriate,
(v) modify, extend or renew outstanding Awards, accept the surrender of
outstanding Awards and substitute new Awards, provided that no such action
shall be taken with respect to any outstanding Award which would adversely
affect the grantee without the grantee's consent,
(vi) accelerate or otherwise change the time in which an Award may be
exercised or becomes payable and to waive or accelerate the lapse, in whole
or in part, of any restriction or condition with respect to such Award,
including, but not limited to, any restriction or condition with respect to
the vesting or exercisability of an Award following termination of any
grantee's employment, and
(vii) to establish objectives and conditions, if any, for earning Awards
and determining whether Awards will be paid after the end of a performance
period.
The Committee shall have full power and authority to administer and interpret
the Plan and to adopt such rules, regulations, agreements, guidelines and
instruments for the administration of the Plan and for the conduct of its
business as the Committee deems necessary or advisable and to interpret same,
all within the Committee's sole and absolute discretion.
(d) Limited Liability. To the maximum extent permitted by law, no member
of the Board or Committee shall be liable for any action taken or decision made
in good faith relating to the Plan or any Award thereunder.
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(e) Indemnification. To the maximum extent permitted by law, the members
of the Board and Committee shall be indemnified by the Corporation in respect of
all their activities under the Plan.
(f) Effect of Committee's Decision. All actions taken and decisions and
determinations made by the Committee on all matters relating to the Plan
pursuant to the powers vested in it hereunder shall be in the Committee's sole
and absolute discretion and shall be conclusive and binding on all parties
concerned, including the Corporation, its stockholders, any participants in the
Plan and any other employee of the Corporation, and their respective successors
in interest.
4. SHARES AVAILABLE FOR THE PLAN; MAXIMUM AWARDS
Subject to adjustments as provided in Section 12 of the Plan, the shares of
Common Stock that may be delivered or purchased or used for reference purposes
(with respect to stock appreciation rights, phantom stock units or performance
awards payable in cash) with respect to Awards granted under the Plan, including
with respect to incentive stock options intended to qualify under Section 422 of
the Code, shall not exceed an aggregate of Three Million Six Hundred and Forty-
Five Thousand (3,645,000) shares of Common Stock of the Corporation. The
Corporation shall reserve said number of shares for Awards under the Plan,
subject to adjustments as provided in Section 12 of the Plan. If any Award, or
portion of an Award, under the Plan expires or terminates unexercised, becomes
unexercisable or is forfeited or otherwise terminated, surrendered or canceled
as to any shares without the delivery of shares of Common Stock or other
consideration, the shares subject to such Award shall thereafter be available
for further Awards under the Plan unless such shares would not be deemed
available for future grants pursuant to Rule 16b-3 of the General Rules and
Regulations under the Exchange Act, or any successor rule or regulation ("Rule
16b-3").
The maximum number of shares of Common Stock subject to Awards of any
combination that may be granted during any one calendar year to any one
individual shall be limited to Nine Hundred and Eleven Thousand Two Hundred and
Fifty (911,250). To the extent required by Section 162(m) of the Code and so
long as Section 162(m) of the Code is applicable to persons eligible to
participate in the Plan, shares of Common Stock subject to the foregoing limit
with respect to which the related Award is terminated, surrendered or canceled
shall not again be available for grant under this limit.
5. PARTICIPATION
Participation in the Plan shall be open to all employees, officers,
directors and consultants of the Corporation, or of any Parent or Subsidiary of
the Corporation, as may be selected by the Committee from time to time.
Notwithstanding the foregoing, participation in the Plan with respect to Awards
of incentive stock options shall be limited to employees of the Corporation or
of any Parent or Subsidiary of the Corporation.
Awards may be granted to such eligible persons and for or with respect to
such number of shares of Common Stock as the Committee shall determine, subject
to the limitations in Section 4 of the Plan. A grant of any type of Award made
in any one year to an eligible person shall neither guarantee nor preclude a
further grant of that or any other type of Award to such person in that year or
subsequent years.
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6. STOCK OPTIONS
Subject to the other applicable provisions of the Plan, the Committee may
from time to time grant to eligible participants Awards of nonqualified stock
options or incentive stock options as that term is defined in Section 422 of the
Code. The stock option Awards granted shall be subject to the following terms
and conditions.
(a) Grant of Option. The grant of a stock option shall be evidenced by a
Grant Agreement, executed by the Corporation and the grantee, stating the number
of shares of Common Stock subject to the stock option evidenced thereby and the
terms and conditions of such stock option, in such form as the Committee may
from time to time determine.
(b) Price. The price per share payable upon the exercise of each stock
option ("exercise price") shall be determined by the Committee; provided,
however, that in the case of incentive stock options, the exercise price shall
not be less than 100% of the Fair Market Value of the shares on the date the
stock option is granted.
(c) Payment. Stock options may be exercised in whole or in part by payment
of the exercise price of the shares to be acquired in accordance with the
provisions of the Grant Agreement, and/or such rules and regulations as the
Committee may have prescribed, and/or such determinations, orders, or decisions
as the Committee may have made. Payment may be made in cash (or cash equivalents
acceptable to the Committee) or, if allowed by the Committee in its sole
discretion, in shares of Common Stock or a combination of cash and shares of
Common Stock, or by such other means as the Committee may prescribe. The Fair
Market Value of shares of Common Stock delivered on exercise of stock options
shall be determined as of the date of exercise. Shares of Common Stock delivered
in payment of the exercise price may be previously owned shares or, if approved
by the Committee, shares acquired upon exercise of the stock option. Any
fractional share will be paid in cash. The Corporation may make or guarantee
loans to grantees to assist grantees in exercising stock options and satisfying
any related withholding tax obligations.
If the Common Stock is registered under Section 12(b) or 12(g) of the
Exchange Act, the Committee, subject to such limitations as it may determine,
may authorize payment of the exercise price, in whole or in part, by delivery of
a properly executed exercise notice, together with irrevocable instructions, to:
(i) a brokerage firm designated by the Corporation to deliver promptly to the
Corporation the aggregate amount of sale or loan proceeds to pay the exercise
price and any withholding tax obligations that may arise in connection with the
exercise, and (ii) the Corporation to deliver the certificates for such
purchased shares directly to such brokerage firm.
(d) Terms of Options. The term during which each stock option may be
exercised shall be determined by the Committee. In no event shall a stock option
be exercisable more than ten years from the date it is granted. Prior to the
exercise of the stock option and delivery of the shares certificates represented
thereby, the grantee shall have none of the rights of a stockholder with respect
to any shares represented by an outstanding stock option.
(e) Reload Options. The terms of a stock option may provide for the
automatic grant of a new stock option Award when the exercise price of the stock
option and/or any related tax withholding obligation is paid by tendering shares
of Common Stock, provided that such automatic replenishment feature shall be
limited to any extent required by rules,
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regulations, or interpretations under the Exchange Act with respect to any
particular grant of an Award in the case of a grantee who is or becomes subject
to Section 16 of the Exchange Act. Any stock option Award which would
automatically be granted pursuant to this Section 6(e) without any further
Committee action may be exercisable for not more than the number of shares
tendered to exercise the initial stock option and/or to pay any tax withholding
obligation related to such exercise, shall have an exercise price set at the
then Fair Market Value of such shares, and shall have a term that does not
extend beyond the term of the initial stock option. The Committee may include
such a reload feature in a stock option Award at the time of the initial grant
of the Award or may add such a reload feature to an outstanding stock option
Award as the Committee deems desirable; provided, however, that a reload feature
shall not be added to any outstanding incentive stock option Award without the
consent of the grantee.
(f) Restrictions on Incentive Stock Options. Incentive stock option Awards
granted under the Plan shall comply in all respects with Code Section 422 and,
as such, shall meet the following additional requirements:
(i) Grant Date. An incentive stock option must be granted within 10
years of the earlier of the Plan's adoption by the Board of Directors or
approval by the Corporation's shareholders.
(ii) Exercise Price and Term. The exercise price of an incentive stock
option shall not be less than 100% of the Fair Market Value of the shares
on the date the stock option is granted and the term of an incentive stock
option may not be greater than 10 years. Also, the exercise price of any
incentive stock option granted to a grantee who owns (within the meaning of
Section 422(b)(6) of the Code, after the application of the attribution
rules in Section 424(d) of the Code) more than 10% of the total combined
voting power of all classes of shares of the Corporation or its Parent or
Subsidiary corporations (within the meaning of Sections 422 and 424 of the
Code) shall be not less than 110% of the Fair Market Value of the Common
Stock on the grant date and the term of such stock option shall not exceed
five years.
(iii) Maximum Grant. The aggregate Fair Market Value (determined as of
the Grant Date) of shares of Common Stock with respect to which all
incentive stock options first become exercisable by any grantee in any
calendar year under this or any other plan of the Corporation and its
Parent and Subsidiary corporations may not exceed $100,000 or such other
amount as may be permitted from time to time under Section 422 of the Code.
To the extent that such aggregate Fair Market Value shall exceed $100,000,
or other applicable amount, such stock options shall be treated as
nonqualified stock options. In such case, the Corporation may designate the
shares of Common Stock that are to be treated as stock acquired pursuant to
the exercise of an incentive stock option by issuing a separate certificate
for such shares and identifying the certificate as incentive stock option
shares in the stock transfer records of the Corporation.
(iv) Grantee. Incentive stock options shall only be issued to
employees of the Corporation, or of a Parent or Subsidiary of the
Corporation.
(v) Designation. No stock option shall be an incentive stock option
unless so designated by the Committee at the time of grant or in the Grant
Agreement evidencing such stock option.
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(g) Other Terms and Conditions. Stock options may contain such other
provisions, not inconsistent with the provisions of the Plan, as the Committee
shall determine appropriate from time to time.
7. STOCK APPRECIATION RIGHTS
(a) Award of Stock Appreciation Rights. Subject to the other applicable
provisions of the Plan, the Committee may at any time and from time to time
grant stock appreciation rights ("SARs") to eligible participants, either on a
free-standing basis (without regard to or in addition to the grant of a stock
option) or on a tandem basis (related to the grant of an underlying stock
option), as it determines. SARs granted in tandem with or in addition to a stock
option may be granted either at the same time as the stock option or at a later
time; provided, however, that a tandem SAR shall not be granted with respect to
any outstanding incentive stock option Award without the consent of the grantee.
SARs shall be evidenced by Grant Agreements, executed by the Corporation and the
grantee, stating the number of shares of Common Stock subject to the SAR
evidenced thereby and the terms and conditions of such SAR, in such form as the
Committee may from time to time determine. The term during which each SAR may be
exercised shall be determined by the Committee. In no event shall a SAR be
exercisable more than ten years from the date it is granted. The grantee shall
have none of the rights of a stockholder with respect to any shares of Common
Stock represented by an SAR.
(b) Restrictions of Tandem SARs. No incentive stock option may be
surrendered in connection with the exercise of a tandem SAR unless the Fair
Market Value of the Common Stock subject to the incentive stock option is
greater than the exercise price for such incentive stock option. SARs granted in
tandem with stock options shall be exercisable only to the same extent and
subject to the same conditions as the stock options related thereto are
exercisable. The Committee may, in its discretion, prescribe additional
conditions to the exercise of any such tandem SAR.
(c) Amount of Payment Upon Exercise of SARs. An SAR shall entitle the
grantee to receive, subject to the provisions of the Plan and the Grant
Agreement, a payment having an aggregate value equal to the product of (i) the
excess of (A) the Fair Market Value on the exercise date of one share of Common
Stock over (B) the base price per share specified in the Grant Agreement (which
shall be determined by the Committee but which shall not be less than 100% of
the Fair Market Value of one share of Common Stock on the date of grant of the
SAR), times (ii) the number of shares specified by the SAR, or portion thereof,
which is exercised. In the case of exercise of a tandem SAR, such payment shall
be made in exchange for the surrender of the unexercised related stock option
(or any portion or portions thereof which the grantee from time to time
determines to surrender for this purpose).
(d) Form of Payment Upon Exercise of SARs. Payment by the Corporation of
the amount receivable upon any exercise of an SAR may be made by the delivery of
Common Stock or cash, or any combination of Common Stock and cash, as determined
in the sole discretion of the Committee from time to time. If upon settlement of
the exercise of an SAR a grantee is to receive a portion of such payment in
shares of Common Stock, the number of shares shall be determined by dividing
such portion by the Fair Market Value of a share of Common Stock on the exercise
date. No fractional shares shall be used for such payment and the Committee
shall determine whether cash shall be given in lieu of such fractional shares or
whether such fractional shares shall be eliminated.
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8. STOCK AWARDS (INCLUDING RESTRICTED AND UNRESTRICTED SHARES AND PHANTOM
STOCK)
(a) Stock Awards, In General. Subject to the other applicable provisions of
the Plan, the Committee may at any time and from time to time grant stock Awards
to eligible participants in such amounts and for such consideration, including
no consideration or such minimum consideration as may be required by law, as it
determines. A stock Award may be denominated in shares of Common Stock or stock-
equivalent units ("phantom stock"), and may be paid in Common Stock, in cash, or
in a combination of Common Stock and cash, as determined in the sole discretion
of the Committee from time to time.
(b) Restricted Shares. Each stock Award shall specify the applicable
restrictions, if any, on such shares of Common Stock, the duration of such
restrictions, and the time or times at which such restrictions shall lapse with
respect to all or a specified number of shares of Common Stock that are part of
the Award. Notwithstanding the foregoing, the Committee may reduce or shorten
the duration of any restriction applicable to any shares of Common Stock awarded
to any grantee under the Plan. Share certificates with respect to restricted
shares of Common Stock granted pursuant to a stock Award may be issued at the
time of grant of the stock Award, subject to forfeiture if the restrictions do
not lapse, or upon lapse of the restrictions. If share certificates are issued
at the time of grant of the stock Award, the certificates shall bear an
appropriate legend with respect to the restrictions applicable to such stock
Award or, alternatively, the grantee may be required to deposit the certificates
with the Corporation during the period of any restriction thereon and to execute
a blank stock power or other instrument of transfer therefor. Except as
otherwise provided by the Committee, during such period of restriction following
issuance of share certificates, the grantee shall have all of the rights of a
holder of Common Stock, including but not limited to the rights to receive
dividends (or amounts equivalent to dividends) and to vote with respect to the
restricted shares. If share certificates are issued upon lapse of restrictions
on a stock Award, the Committee may provide that the grantee will be entitled to
receive any amounts per share pursuant to any dividend or distribution paid by
the Corporation on its Common Stock to stockholders of record after grant of the
stock Award and prior to the issuance of the share certificates.
(c) Phantom Stock. The grant of phantom stock units shall be evidenced by a
Grant Agreement, executed by the Corporation and the grantee, that incorporates
the terms of the Plan and states the number of phantom stock units evidenced
thereby and the terms and conditions of such phantom stock units in such form as
the Committee may from time to time determine. Phantom stock units granted to a
participant shall be credited to a bookkeeping reserve account solely for
accounting purposes and shall not require a segregation of any of the
Corporation's assets. Phantom stock units may be exercised in whole or in part
by delivery of an appropriate exercise notice to the Committee in accordance
with the provisions of the Grant Agreement, and/or such rules and regulations as
the Committee may prescribe, and/or such determinations, orders, or decisions as
the Committee may make. Except as otherwise provided in the applicable Grant
Agreement, the grantee shall have none of the rights of a stockholder with
respect to any shares of Common Stock represented by a phantom stock unit as a
result of the grant of a phantom stock unit to the grantee. Phantom stock units
may contain such other provisions, not inconsistent with the provisions of the
Plan, as the Committee shall determine appropriate from time to time.
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9. PERFORMANCE AWARDS
The Committee may in its discretion grant performance Awards which become
payable on account of attainment of one or more performance goals established by
the Committee. Performance Awards may be paid by the delivery of Common Stock
or cash, or any combination of Common Stock and cash, as determined in the sole
discretion of the Committee from time to time. Performance goals established by
the Committee may be based on the Corporation's operating income or one or more
other business criteria selected by the Committee that apply to an individual or
group of individuals, a business unit, or the Corporation as a whole, over such
performance period as the Committee may designate. The Committee in its
discretion may recommend to the Board of Directors of the Corporation that the
material terms of any Performance Award or program with respect to some or all
eligible participants be submitted for approval by the stockholders.
10. WITHHOLDING OF TAXES
The Corporation may require, as a condition to the grant of any Award under
the Plan or exercise pursuant to such Award or to the delivery of certificates
for shares issued or payments of cash to a grantee pursuant to the Plan or a
Grant Agreement (hereinafter collectively referred to as a "taxable event"),
that the grantee pay to the Corporation, in cash or, unless otherwise determined
by the Corporation, in shares of Common Stock, including shares acquired upon
grant of the Award or exercise of the Award, valued at Fair Market Value on the
date as of which the withholding tax liability is determined, any federal, state
or local taxes of any kind required by law to be withheld with respect to any
taxable event under the Plan. The Corporation, to the extent permitted or
required by law, shall have the right to deduct from any payment of any kind
(including salary or bonus) otherwise due to a grantee any federal, state or
local taxes of any kind required by law to be withheld with respect to any
taxable event under the Plan, or to retain or sell without notice a sufficient
number of the shares to be issued to such grantee to cover any such taxes.
11. TRANSFERABILITY
Unless determined otherwise by the Committee and in any event in the case
of an incentive stock option or a stock appreciation right granted with respect
to an incentive stock option, no Award granted under the Plan shall be
transferable by a grantee otherwise than by will or the laws of descent and
distribution. Unless otherwise determined by the Committee in accord with the
provisions of the immediately preceding sentence, an Award may be exercised
during the lifetime of the grantee, only by the grantee or, during the period
the grantee is under a legal disability, by the grantee's guardian or legal
representative.
12. ADJUSTMENTS; BUSINESS COMBINATIONS
In the event of a reclassification, recapitalization, stock split, stock
dividend, combination of shares, or other similar event, the maximum number and
kind of shares reserved for issuance or with respect to which Awards may be
granted under the Plan as provided in Section 4 shall be adjusted to reflect
such event, and the Committee shall make such adjustments as it deems
appropriate and equitable in the number, kind and price of shares covered by
outstanding Awards made under the Plan, and in any other matters which relate to
Awards and which are affected by the changes in the Common Stock referred to
above.
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In the event of any proposed Change in Control, the Committee shall take
such action as it deems appropriate and equitable to effectuate the purposes of
this Plan and to protect the grantees of Awards, which action may include, but
without limitation, any one or more of the following: (i) acceleration or
change of the exercise dates of any Award; (ii) arrangements with grantees for
the payment of appropriate consideration to them for the cancellation and
surrender of any Award; and (iii) in any case where equity securities other than
Common Stock of the Corporation are proposed to be delivered in exchange for or
with respect to Common Stock of the Corporation, arrangements providing that any
Award shall become one or more Awards with respect to such other equity
securities.
The Committee is authorized to make adjustments in the terms and conditions
of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, the events described in the
preceding two paragraphs of this Section 12) affecting the Corporation, or the
financial statements of the Corporation or any Subsidiary, or of changes in
applicable laws, regulations, or accounting principles, whenever the Committee
determines that such adjustments are appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan.
In the event the Corporation dissolves and liquidates (other than pursuant
to a plan of merger or reorganization), then notwithstanding any restrictions on
exercise set forth in this Plan or any Grant Agreement, or other agreement
evidencing a stock option, stock appreciation right or restricted stock Award:
(i) each grantee shall have the right to exercise his stock option or stock
appreciation right, or to require delivery of share certificates representing
any such restricted stock Award, at any time up to ten (10) days prior to the
effective date of such liquidation and dissolution; and (ii) the Committee may
make arrangements with the grantees for the payment of appropriate consideration
to them for the cancellation and surrender of any stock option, stock
appreciation right or restricted stock Award that is so canceled or surrendered
at any time up to ten (10) days prior to the effective date of such liquidation
and dissolution. The Committee may establish a different period (and different
conditions) for such exercise, delivery, cancellation, or surrender to avoid
subjecting the grantee to liability under Section 16(b) of the Exchange Act.
Any stock option or stock appreciation right not so exercised, canceled, or
surrendered shall terminate on the last day for exercise prior to such effective
date; and any restricted stock as to which there has not been such delivery of
share certificates or that has not been so canceled or surrendered, shall be
forfeited on the last day prior to such effective date. The Committee shall
give to each grantee written notice of the commencement of any proceedings for
such liquidation and dissolution of the Corporation and the grantee's rights
with respect to his outstanding Award.
13. TERMINATION AND MODIFICATION OF THE PLAN
The Board, without further approval of the stockholders, may modify or
terminate the Plan or any portion thereof at any time, except that no
modification shall become effective without prior approval of the stockholders
of the Corporation if stockholder approval is necessary to comply with any tax
or regulatory requirement or rule of any exchange or Nasdaq System upon which
the Common Stock is listed or quoted; including for this purpose stockholder
approval that is required for continued compliance with Rule 16b-3 or
stockholder approval that is required to enable the Committee to grant incentive
stock options pursuant to the Plan.
-11-
<PAGE>
The Committee shall be authorized to make minor or administrative
modifications to the Plan as well as modifications to the Plan that may be
dictated by requirements of federal or state laws applicable to the Corporation
or that may be authorized or made desirable by such laws. The Committee may
amend or modify the grant of any outstanding Award in any manner to the extent
that the Committee would have had the authority to make such Award as so
modified or amended.
14. NON-GUARANTEE OF EMPLOYMENT
Nothing in the Plan or in any Grant Agreement thereunder shall confer any
right on an employee to continue in the employ of the Corporation or shall
interfere in any way with the right of the Corporation to terminate an employee
at any time.
15. Termination of Employment
For purposes of maintaining a grantee's continuous status as an employee
and accrual of rights under any Award, transfer of an employee among the
Corporation and the Corporation's Parent or Subsidiaries shall not be considered
a termination of employment. Nor shall it be considered a termination of
employment for such purposes if an employee is placed on military or sick leave
or such other leave of absence which is considered as continuing intact the
employment relationship; in such a case, the employment relationship shall be
continued until the date when an employee's right to reemployment shall no
longer be guaranteed either by law or contract.
16. WRITTEN AGREEMENT
Each Grant Agreement entered into between the Corporation and a grantee
with respect to an Award granted under the Plan shall incorporate the terms of
this Plan and shall contain such provisions, consistent with the provisions of
the Plan, as may be established by the Committee.
17. NON-UNIFORM DETERMINATIONS
The Committee's determinations under the Plan (including without limitation
determinations of the persons to receive Awards, the form, amount and timing of
such Awards, the terms and provisions of such Awards and the agreements
evidencing same) need not be uniform and may be made by it selectively among
persons who receive, or are eligible to receive, Awards under the Plan, whether
or not such persons are similarly situated.
18. LIMITATION ON BENEFITS
With respect to persons subject to Section 16 of the Exchange Act,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3. To the extent any provision of the Plan or action by
the Committee fails to so comply, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by the Committee.
19. LISTING AND REGISTRATION
If the Corporation determines that the listing, registration or
qualification upon any securities exchange or upon any listing or quotation
system established by the National
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<PAGE>
Association of Securities Dealers, Inc. ("Nasdaq System") or under any law, of
shares subject to any Award is necessary or desirable as a condition of, or in
connection with, the granting of same or the issue or purchase of shares
thereunder, no such Award may be exercised in whole or in part and no
restrictions on such Award shall lapse, unless such listing, registration or
qualification is effected free of any conditions not acceptable to the
Corporation.
20. COMPLIANCE WITH SECURITIES LAW
The Corporation may require that a grantee, as a condition to exercise of
an Award, and as a condition to the delivery of any share certificate, provide
to the Corporation, at the time of each such exercise and each such delivery, a
written representation that the shares of Common Stock being acquired shall be
acquired by the grantee solely for investment and will not be sold or
transferred without registration or the availability of an exemption from
registration under the Securities Act and applicable state securities laws. The
Corporation may also require that a grantee submit other written representations
which will permit the Corporation to comply with federal and applicable state
securities laws in connection with the issuance of the Common Stock, including
representations as to the knowledge and experience in financial and business
matters of the grantee and the grantee's ability to bear the economic risk of
the grantee's investment. The Corporation may require that the grantee obtain a
"purchaser representative" as that term is defined in applicable federal and
state securities laws. The stock certificates for any shares of Common Stock
issued pursuant to this Plan may bear a legend restricting transferability of
the shares of Common Stock unless such shares are registered or an exemption
from registration is available under the Securities Act and applicable state
securities laws. The Corporation may notify its transfer agent to stop any
transfer of shares of Common Stock not made in compliance with these
restrictions. Common Stock shall not be issued with respect to an Award granted
under the Plan unless the exercise of such Award and the issuance and delivery
of share certificates for such Common Stock pursuant thereto shall comply with
all relevant provisions of law, including, without limitation, the Securities
Act, the Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any national securities exchange or Nasdaq System upon which the
Common Stock may then be listed or quoted, and shall be further subject to the
approval of counsel for the Corporation with respect to such compliance to the
extent such approval is sought by the Committee.
21. NO LIMIT ON OTHER COMPENSATION ARRANGEMENTS
Nothing contained in the Plan shall prevent the Corporation or its Parent
or Subsidiary corporations from adopting or continuing in effect other
compensation arrangements (whether such arrangements be generally applicable or
applicable only in specific cases) as the Committee in its discretion determines
desirable, including without limitation the granting of stock options, stock
awards, stock appreciation rights or phantom stock units otherwise than under
the Plan.
22. NO TRUST OR FUND CREATED
Neither the Plan nor any Award shall create or be construed to create a
trust or separate fund of any kind or a fiduciary relationship between the
Corporation and a grantee or any other person. To the extent that any grantee
or other person acquires a right to receive payments from the Corporation
pursuant to an Award, such right shall be no greater than the right of any
unsecured general creditor of the Corporation.
-13-
<PAGE>
23. GOVERNING LAW
The validity, construction and effect of the Plan, of Grant Agreements
entered into pursuant to the Plan, and of any rules, regulations, determinations
or decisions made by the Board or Committee relating to the Plan or such Grant
Agreements, and the rights of any and all persons having or claiming to have any
interest therein or thereunder, shall be determined exclusively in accordance
with applicable federal laws and the laws of the State of Delaware, without
regard to its conflict of laws rules and principles.
24. PLAN SUBJECT TO CHARTER AND BY-LAWS
This Plan is subject to the Charter and By-Laws of the Corporation, as they
may be amended from time to time.
25. EFFECTIVE DATE; TERMINATION DATE
The Plan is effective as of the date on which the Plan was adopted by the
Board, subject to approval of the stockholders within twelve months before or
after such date. No Award shall be granted under the Plan after the close of
business on the day immediately preceding the tenth anniversary of the effective
date of the Plan. Subject to other applicable provisions of the Plan, all
Awards made under the Plan prior to such termination of the Plan shall remain in
effect until such Awards have been satisfied or terminated in accordance with
the Plan and the terms of such Awards.
Date Approved by the Board: ________________________
Date Approved by the Shareholders: ___________________
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<PAGE>
EXHIBIT F
MAPQUEST.COM, INC.
EMPLOYEE STOCK PURCHASE PLAN
ARTICLE I
---------
PURPOSE
-------
1.01. PURPOSE. The MAPQUEST.COM, INC. EMPLOYEE STOCK PURCHASE PLAN is
---- -------
intended to provide a method whereby employees of MapQuest.com, Inc. (the
"Company") and its subsidiary corporations will have an opportunity to acquire a
proprietary interest in the Company through the purchase of shares of the Common
Stock of the Company. It is the intention of the Company to have the Plan
qualify as an "employee stock purchase plan" under (S)423 of the Internal
Revenue Code of 1986, as amended (the "Code"). The provisions of the Plan shall
be construed so as to extend and limit participation in a manner consistent with
the requirements of that section of the Code.
ARTICLE II
----------
DEFINITIONS
-----------
2.01 BASE PAY. "Base Pay" means regular straight-time earnings excluding
---- --------
payments for overtime, shift premium, bonuses and other special payments,
commissions and other marketing incentive payments.
2.02 BOARD. "Board of Directors" or "Board" means the Board of Directors
---- -----
of the Company.
2.03 COMMITTEE. "Committee" means the individuals described in Article
---- ---------
XI.
2.04 COMMON STOCK. "Common Stock" means the common stock of the Company.
---- ------------
2.05 DESIGNATED SUBSIDIARY CORPORATION. "Designated Subsidiary
---- ---------------------------------
Corporation" means a Subsidiary Corporation which is designated by the Company's
Board of Directors to participate in the Plan.
2.06 EMPLOYEE. "Employee" means any person who is employed by the Company
---- --------
or a Designated Subsidiary Corporation.
2.07 OFFERINGS AND OFFERING PERIODS. The Plan will be implemented by
---- -------------------------------
"Offerings" of the right to purchase Company Stock through payroll deduction in
consecutive "Offering Periods", each constituting a six month period. Such
Offering
<PAGE>
Periods shall commence as provided in Section 4.01 and shall continue until the
termination of the Plan in accordance with Section 12.05.
2.08 OFFERING COMMENCEMENT DATE. The "Offering Commencement Date" is the
---- --------------------------
first day of an Offering Period during which the NASDAQ system is open for
trading.
2.09 OFFERING TERMINATION DATE. The "Offering Termination Date" is the
---- -------------------------
last day of an Offering Period during which the NASDAQ system is open for
trading.
2.10 SUBSIDIARY CORPORATION. "Subsidiary Corporation" means any present
---- ----------------------
or future corporation which would be a "subsidiary corporation" of the Company
as that term is defined in (S)424 of the Code.
ARTICLE III
-----------
ELIGIBILITY AND PARTICIPATION
-----------------------------
3.01 INITIAL ELIGIBILITY. All Employees are eligible to participate
---- -------------------
hereunder, commencing on any Offering Commencement Date.
3.02 COMMENCEMENT OF PARTICIPATION. An eligible Employee may become a
---- -----------------------------
participant by completing an authorization for a payroll deduction on the form
provided by the Company and filing it with the office of the Human Resources
Director of the Company on or before the date set therefor by the Committee,
which date shall be prior to the Offering Commencement Date for the Offering
Period. Payroll deductions for a participant shall commence on the applicable
Offering Commencement Date when his authorization for a payroll deduction
becomes effective and shall end on the Offering Termination Date of the Offering
to which such authorization is applicable unless sooner terminated by the
participant as provided in Article VIII.
3.03 RESTRICTIONS ON PARTICIPATION. Notwithstanding any provision of the
---- -----------------------------
Plan to the contrary, no Employee shall be granted an option to participate in
the Plan:
(a) if, immediately after the grant, such Employee would own stock,
and/or hold outstanding options to purchase stock, possessing 5% or more of the
total combined voting power or value of all classes of stock of the Company or
any Subsidiary Corporation. (For purposes of this paragraph, the rules of
(S)424(d) of the Code shall apply in determining stock ownership of any
Employee); or
(b) which permits his rights to purchase stock under all employee
stock purchase plans of the Company and its Subsidiary Corporations to accrue at
a rate which exceeds $25,000 in fair market value of the stock (determined at
the time such option is granted) for each calendar year in which such option is
outstanding.
2
<PAGE>
3.04 LEAVE OF ABSENCE. For purposes of participation in the Plan, a
---- ----------------
person on leave of absence shall be deemed to be an Employee for the first 90
days of such leave of absence and such Employee's employment shall be deemed to
have terminated at the close of business on the 90th day of such leave of
absence unless such Employee shall have returned to regular full-time or part-
time employment (as the case may be) prior to the close of business on such 90th
day. Termination by the Company of any Employee's leave of absence, other than
termination of such leave of absence on return to full time or part time
employment, shall terminate an Employee's employment for all purposes of the
Plan and shall terminate such Employee's participation in the Plan and right to
exercise any option.
ARTICLE IV
----------
OFFERINGS
---------
4.01 SEMI-ANNUAL OFFERING PERIODS. The first Offering Period shall be the
---- ----------------------------
six month period beginning on July 1, 1999 and ending on December 31, 1999.
(Provided, however, that the first Offering Period will not begin before the
effective date of the registration statement filed by the Company for the Plan
with the Securities and Exchange Commission.) Subsequent Offering Periods will
begin on January 1 and July 1 of each year.
4.02 REVISED OFFERING PERIODS. In the discretion of the Committee, semi-
---- ------------------------
annual Offering Periods may be divided into quarterly Offering Periods or
combined into annual Offering Periods. The maximum number of shares available
during an Offering Period under Section 10.01 shall be adjusted appropriately.
ARTICLE V
---------
PAYROLL DEDUCTIONS
------------------
5.01 AMOUNT OF DEDUCTION. At the time a participant files his
---- -------------------
authorization for payroll deduction, he shall elect to have deductions made from
his pay on each payday during the Offering Period at the rate of 1, 2, 3, 4, 5,
6, 7, 8, 9 or 10% of his base pay in effect at any such payday.
5.02 PARTICIPANT'S ACCOUNT. All payroll deductions made for a participant
---- ---------------------
shall be credited to his account under the Plan. A participant may not make any
separate cash payment into such account except when on leave of absence and then
only as provided in (S)5.04.
5.03 CHANGES IN PAYROLL DEDUCTIONS. A participant may discontinue his
---- -----------------------------
participation in the Plan as provided in Article VIII, but no other change can
be made during an Offering and, specifically, a participant may not alter the
amount of his payroll deductions for that Offering. The payroll deduction form
may provide that it shall
3
<PAGE>
continue from Offering Period to Offering Period unless changed by a participant
before the beginning of a subsequent Offering Period.
5.04 LEAVE OF ABSENCE. If a participant goes on a leave of absence, such
---- ----------------
participant shall have the right to elect: (a) to withdraw the balance in his
or her account pursuant to (S)7.02, (b) to discontinue contributions to the Plan
but remain a participant in the Plan, or (c) remain a participant in the Plan
during such leave of absence (provided the individual was eligible to
participate at the Offering Commencement Date), authorizing deductions to be
made from payments by the Company or its Designated Subsidiary Corporations to
the participant during such leave of absence and undertaking to make cash
payments to the Plan at the end of each payroll period to the extent that
amounts payable by the Company and its Designated Subsidiary Corporations to
such participant are insufficient to meet such participant's authorized Plan
deductions.
ARTICLE VI
----------
GRANTING OF OPTION
------------------
6.01 NUMBER OF OPTION SHARES. On the Offering Commencement Date of each
---- -----------------------
Offering, a participating Employee shall be deemed to have been granted a
qualified option to purchase on the Offering Termination Date of such Offering
Period (at the Option Price in Section 6.02) the number of shares of the
Company's Common Stock determined by dividing such Employee's payroll deductions
accumulated during such Offering Period and retained in the participant's
account as of the Offering Termination Date by the applicable Option Price.
6.02 OPTION PRICE. The Option Price of Common Stock purchased with
---- ------------
payroll deductions made during an Offering Period for a participant therein
shall be the lower of:
(a) 85% of the closing price of the stock on the Offering
Commencement Date, or (in the event the stock was not traded on such date) the
nearest prior business day on which trading of the Company's Common Stock
occurred, on the NASDAQ National Market System; or
(b) 85% of the closing price of the stock on the Offering Termination
Date, or (in the event the stock was not traded on such date) the nearest prior
business day on which trading of the Company's Common Stock occurred, on the
NASDAQ National Market System. If the Company's Common Stock is not admitted to
trading on the NASDAQ National Market System on any of the aforesaid dates for
which closing prices of the stock are to be determined, then reference shall be
made to the fair market value of the stock on that date, as determined on such
basis as shall be established or specified for the purpose by the Committee.
4
<PAGE>
ARTICLE VII
-----------
EXERCISE OF OPTION
------------------
7.01 AUTOMATIC EXERCISE. Unless a participant gives written notice to the
---- ------------------
Company as hereinafter provided, his option for the purchase of stock with
payroll deductions made during any Offering will be deemed to have been
exercised automatically on the Offering Termination Date applicable to such
Offering, for the purchase of the number of full shares of Common Stock which
the accumulated payroll deductions in his account at that time will purchase at
the applicable Option Price, subject to the maximum stated in Section 10.01.
Except as provided in Section 7.03, any excess in his account at that time will
be refunded to him.
7.02 WITHDRAWAL OF ACCOUNT. By written notice to the Human Resources
---- ---------------------
Director of the Company, at any time prior to the Offering Termination Date
applicable to any Offering, a participant may elect to withdraw all of the
accumulated payroll deductions in his account at such time.
7.03 FRACTIONAL SHARES. Fractional shares will not be issued under the
---- -----------------
Plan. Any accumulated payroll deductions which would have been used to purchase
fractional shares will be carried over and applied to purchase shares in the
succeeding Offering Period, if the Employee elects to participate in such
Offering Period. If not, such excess payroll deductions will be promptly
returned to the Employee.
7.04 TRANSFERABILITY OF OPTION. During a participant's lifetime, options
---- -------------------------
held by such participant shall be exercisable only by that participant.
7.05 DELIVERY OF STOCK. As promptly as practicable after the Offering
---- -----------------
Termination Date of each Offering, the Company will deliver to each participant,
as appropriate, the stock purchased upon exercise of his option.
ARTICLE VIII
------------
WITHDRAWAL
----------
8.01 IN GENERAL. As indicated in (S)7.02, a participant may withdraw
---- ----------
payroll deductions credited to his account under the Plan at any time prior to
an Offering Termination Date by giving written notice to the Human Resources
Director of the Company. All of the participant's payroll deductions credited
to his account will be paid to him promptly after receipt of his notice of
withdrawal, and no further payroll deductions will be made from his pay during
such Offering. The Company may, at its option, treat any attempt to borrow by
an Employee on the security of his accumulated payroll deductions as an
election, under (S)7.02, to withdraw such deductions.
5
<PAGE>
8.02 EFFECT ON SUBSEQUENT PARTICIPATION. A participant's withdrawal from
---- ----------------------------------
any Offering will not have any effect upon his eligibility to participate in any
succeeding Offering or in any similar plan which may hereafter be adopted by the
Company.
8.03 TERMINATION OF EMPLOYMENT. Upon termination of the participant's
---- -------------------------
employment for any reason, including retirement or death (but excluding
continuation of a leave of absence for a period beyond 90 days), the payroll
deductions credited to his account will be returned to him, or, in the case of
his death, to the person or persons entitled thereto under (S)12.01.
ARTICLE IX
----------
INTEREST
--------
9.01 NO PAYMENT OF INTEREST. No interest will be paid or allowed on any
---- ----------------------
money paid into the Plan or credited to the account of any participating
Employee.
ARTICLE X
---------
STOCK
-----
10.01 SHARES SUBJECT TO PLAN. The stock subject to the Plan shall be
----- ----------------------
shares of the Company's Common Stock, which may be (i) authorized but unissued
shares, (ii) treasury shares and/or (iii) shares purchased on the open market by
a broker designated by the Company. The maximum number of shares of Common Stock
which shall be issued under the Plan, subject to adjustment upon changes in
capitalization of the Company as provided in (S)12.04, shall be Four Hundred
Thirty Eight Thousand, Seven Hundred and Fifty (438,750) shares in each Offering
plus in each Offering all unissued shares from prior Offerings, whether offered
or not, not to exceed One Million Seven Hundred Fifty Five Thousand (1,755,000)
shares for all Offerings. No participant may purchase more than One Thousand
Five Hundred (1,500) shares in any one Offering Period. If the total number of
shares for which options are exercised on any Offering Termination Date in
accordance with Article VI exceeds the maximum number of shares for the
applicable offering, the Company shall make a pro rata allocation of the shares
available for delivery and distribution in as nearly a uniform manner as shall
be practicable and as it shall determine to be equitable, and the balance of
payroll deductions credited to the account of each participant under the Plan
shall be returned to him as promptly as possible.
10.02 PARTICIPANT'S INTEREST IN OPTION STOCK. The participant will have
----- --------------------------------------
no interest in stock covered by his option until such option has been exercised.
10.03 ISSUANCE OF STOCK. Stock purchased under the Plan will be issued in
----- -----------------
the name of the participant, or, if the participant so directs by written notice
to the Human Resources Director of the Company prior to the Offering Termination
Date applicable thereto, in the names of the participant and one such other
person as may be designated
6
<PAGE>
by the participant, as joint tenants with rights of survivorship or as tenants
by the entireties, to the extent permitted by applicable law.
10.04 RESTRICTIONS ON EXERCISE. The Board of Directors may, in its
----- ------------------------
discretion, require as conditions to the exercise of any option that the shares
of Common Stock reserved for issuance upon the exercise of the option shall have
been duly listed, upon official notice of issuance, upon a stock exchange, and
that either:
(a) a registration statement under the Securities Act of 1933, as
amended, with respect to said shares shall be effective, or
(b) the participant shall have represented at the time of purchase,
in form and substance satisfactory to the Company, that it is his intention to
purchase the shares for investment and not for resale or distribution.
ARTICLE XI
----------
ADMINISTRATION
--------------
11.01 APPOINTMENT OF COMMITTEE. The Board of Directors shall appoint a
----- ------------------------
committee (the "Committee") to administer the Plan, which shall consist of
either (a) the full Board of Directors or (b) no fewer than two members of the
Board of Directors.
11.02 AUTHORITY OF COMMITTEE. Subject to the express provisions of the
----- ----------------------
Plan, the Committee shall have plenary authority in its discretion to interpret
and construe any and all provisions of the Plan, to adopt rules and regulations
for administering the Plan, and to make all other determinations deemed
necessary or advisable for administering the Plan. The Committee's
determination on the foregoing matters shall be conclusive.
11.03 RULES GOVERNING THE ADMINISTRATION OF THE COMMITTEE. The Board of
----- ---------------------------------------------------
Directors may from time to time appoint members of the Committee in substitution
for or in addition to members previously appointed and may fill vacancies,
however caused, in the Committee. The Committee may select one of its members
as its Chairman and shall hold its meetings at such times and places as it shall
deem advisable and may hold telephonic meetings. A majority of its members
shall constitute a quorum. All determinations of the Committee shall be made by
a majority of its members. The Committee may correct any defect or omission or
reconcile any inconsistency in the Plan, in the manner and to the extent it
shall deem desirable. Any decision or determination reduced to writing and
signed by a majority of the members of the Committee shall be as fully effective
as if it had been made by a majority vote at a meeting duly called and held.
The Committee may appoint a secretary and shall make such rules and regulations
for the conduct of its business as it shall deem advisable.
11.04 LIMITED LIABILITY; INDEMNIFICATION. To the maximum extent permitted
----- ----------------------------------
by Delaware law, neither the Company, Board or Committee nor any of its members
shall be
7
<PAGE>
liable for any action or determination made in good faith with respect to this
Plan. In addition to such other rights of indemnification that they may have,
the members of the Board and Committee shall be indemnified by the Company to
the maximum extent permitted by Delaware law against any and all liabilities and
expenses incurred in connection with their service in connection with the Plan
in such capacity.
ARTICLE XII
-----------
MISCELLANEOUS
-------------
12.01 DESIGNATION OF BENEFICIARY. A participant may file a written
----- --------------------------
designation of a beneficiary who is to receive any Common Stock which has not
been issued or cash which is in the participant's account at the time of the
participant's death. Such designation of beneficiary may be changed by the
participant at any time by written notice to the Human Resources Director of the
Company. Upon the death of a participant and upon receipt by the Company of
proof of identity and existence at the participant's death of a beneficiary
validly designated by him under the Plan, the Company shall deliver such stock
and/or cash to such beneficiary. In the event of the death of a participant and
in the absence of a beneficiary validly designated under the Plan who is living
at the time of such participant's death, the Company shall deliver such stock
and/or cash to the executor or administrator of the estate of the participant,
or if no such executor or administrator has been appointed (to the knowledge of
the Company), the Company, in its discretion, may deliver such stock and/or cash
to the spouse or to any one or more dependents of the participant as the Company
may designate. No beneficiary shall, prior to the death of the participant by
whom he has been designated, acquire any interest in the stock or cash credited
to the participant under the Plan.
12.02 TRANSFERABILITY. Neither payroll deductions credited to a
----- ---------------
participant's account nor any rights with regard to the exercise of an option or
to receive stock under the Plan may be assigned, transferred, pledged, or
otherwise disposed of in any way by the participant other than by will or the
laws of descent and distribution. Any such attempted assignment, transfer,
pledge or other disposition shall be without effect, except that the Company may
treat such act as an election to withdraw funds in accordance with (S)7.02.
12.03 USE OF FUNDS. All payroll deductions received or held by the
----- ------------
Company under this Plan may be used by the Company for any corporate purpose and
the Company shall not be obligated to segregate such payroll deductions.
12.04 ADJUSTMENT UPON CHANGES IN CAPITALIZATION.
----- -----------------------------------------
(a) If, while any options are outstanding, the outstanding shares of
Common Stock of the Company have increased, decreased, changed into, or been
exchanged for a different number or kind of shares or securities of the Company
through reorganization, merger, recapitalization, reclassification, stock split,
reverse stock split or
8
<PAGE>
similar transaction, appropriate and proportionate adjustments may be made by
the Committee in the number and/or kind of shares which are subject to purchase
under outstanding options and on the option exercise price or prices applicable
to such outstanding options. In addition, in any such event, the maximum number
and/or kind of shares which may be offered in the Offerings described in
Articles IV and Section 10.01 hereof shall also be proportionately adjusted. No
adjustments shall be made for stock dividends. For the purposes of this
Paragraph, any distribution of shares to shareholders in an amount aggregating
20% or more of the outstanding shares shall be deemed a stock split and any
distributions of shares aggregating less than 20% of the outstanding shares
shall be deemed a stock dividend.
(b) Upon the dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation of the Company with one or more
corporations as a result of which the Company is not the surviving corporation,
or upon a sale of substantially all of the property or stock of the Company to
another corporation, the Committee shall take such action as it deems
appropriate and equitable, which action may include, without limitation, one of
the following: (i) refund of payroll deductions for such Offering Period; (ii)
shortening of the Offering Period or (iii) providing that the holder of each
option then outstanding under the Plan will thereafter be entitled to receive at
the next Offering Termination Date upon the exercise of such option for each
share as to which such option shall be exercised, as nearly as reasonably may be
determined, the cash, securities and/or property which a holder of one share of
the Common Stock was entitled to receive upon and at the time of such
transaction. In the event the Plan is continued after such event, the Board of
Directors shall take such steps in connection with such transactions as the
Board shall deem necessary to assure that the provisions of this (S)12.04 shall
thereafter be applicable, as nearly as reasonably may be determined, in relation
to the said cash, securities and/or property as to which such holder of such
option might thereafter be entitled to receive.
12.05 AMENDMENT AND TERMINATION.
----- -------------------------
(a) Action by Board. The Board of Directors shall have complete
power and authority to terminate or amend the Plan; provided, however, that the
Board of Directors shall not, without the approval of the stockholders of the
Company (i) increase the maximum number of shares which may be issued under the
Plan or under any Offering (except pursuant to (S)(S)4.02 and 12.04); or (ii)
amend the requirements as to the class of employees eligible to purchase stock
under the Plan. Upon termination of the Plan during an Offering Period, at the
discretion of the Committee, cash balances in participants accounts may be
refunded or the Offering Termination Date may be accelerated. No termination,
modification, or amendment of the Plan may otherwise, without the consent of an
Employee then having an option under the Plan to purchase stock, adversely
affect the rights of such Employee under such option.
(b) Automatic Termination. The Plan shall automatically terminate on
the earlier of the day prior to the tenth anniversary of the adoption of the
Plan, or the
9
<PAGE>
issuance of the maximum number of shares available under the Plan pursuant to
Section 10.01.
12.06 TAX WITHHOLDING. At the time an option is exercised or at the time
----- ---------------
some or all of the Company's Common Stock issued under the Plan is disposed of,
the participant must make adequate provision for the Company's federal, state,
or other tax withholding obligations, if any, which arise upon the exercise of
the option or the disposition of the Common Stock. At the request of the
Company, the participant will advance cash in an amount sufficient to discharge
any such tax withholding obligations. At any time, the Company may, but shall
not be obligated to, withhold from the participant's compensation the amount
necessary for the Company to meet applicable withholding obligations.
12.07 DISQUALIFYING DISPOSITION. The Committee may require that a
----- -------------------------
participant notify the Company of any disposition of shares of Common Stock
purchased under the Plan within a period of two (2) years subsequent to the
respective Offering Commencement Date or one (1) year from the Offering
Termination Date.
12.08 EFFECTIVE DATE. The Plan shall become effective as of the date it
----- --------------
is adopted by the Board of Directors, subject to approval by the shareholders of
the Company within twelve months before or after such date. If the Plan is not
so approved, the Plan shall be discontinued, any options which had been issued
shall be considered nonqualified options and any payroll deductions then held by
the Company shall be refunded to the respective Employees.
12.09 NO EMPLOYMENT RIGHTS. The Plan does not, directly or indirectly,
----- --------------------
create in any Employee or class of Employees any right with respect to
continuation of employment by the Company, and it shall not be deemed to
interfere in any way with the Company's right to terminate, or otherwise modify,
an Employee's employment at any time.
12.10 EXCLUSION FROM RETIREMENT AND FRINGE BENEFIT COMPUTATION. No
----- ---------------------------------------------
portion of the award of options under this Plan, or the proceeds from the sale
of stock purchased under the Plan, shall be taken into account as "wages,"
"salary" or "compensation" for any purpose, whether in determining eligibility,
benefits or otherwise, under (i) any pension, retirement, profit sharing or
other qualified or non-qualified plan of deferred compensation, (ii) any
employee welfare or fringe benefit plan including, but not limited to, group
insurance, hospitalization, medical, and disability, or (iii) any form of
extraordinary pay including, but not limited to, bonuses, sick pay and vacation
pay.
12.11 EFFECT OF PLAN. The provisions of the Plan shall, in accordance
----- --------------
with its terms, be binding upon, and inure to the benefit of, all successors of
each Employee participating in the Plan, including, without limitation, such
Employee's estate and the
10
<PAGE>
executors, administrators or trustees thereof, heirs and legatees, and any
receiver, trustee in bankruptcy or representative of creditors of such Employee.
12.12 EXPENSES. Expenses of administering the Plan shall be borne by the
----- --------
Company except that brokerage expenses incurred in connection with the purchase
of shares shall be included as part of the cost of the shares to participating
Employees.
12.13 GOVERNING LAW. The law of the State of Delaware will govern all
----- -------------
matters relating to this Plan except to the extent it is superseded by the laws
of the United States.
11
<PAGE>
EXHIBIT G
GEOSYSTEMS GLOBAL CORPORATION
1995 STOCK OPTION PLAN
AMENDMENT NO. 4
--------------------------
I. Purpose. Reference is made to that certain 1995 Stock Option Plan (the
-------
"Option Plan") of GeoSystems Global Corporation (the "Company"). To the extent
not otherwise defined herein, capitalized terms shall have the meaning accorded
to them in the Option Plan. The Board of the Company has determined it to be in
the best interest of the Company to amend certain provisions of the Option Plan,
and in accordance with applicable law, have adopted resolutions authorizing the
amendment set forth below. To the extent not expressly amended hereby, the
Option Plan shall remain in full force and effect, in accordance with its terms.
II. Amendment of Plan. The Option Plan is amended as follows:
-----------------
(i) Effective immediately the Option Plan is amended to:
(a) Change the name "GeoSystems Global Corporation" to "MapQuest.com,
Inc." each place it appears therein;
(b) Change the term "Internal Revenue Code of 1954" in Article I,
Section 1 to "Internal Revenue Code of 1986";
(c) Delete the third sentence of Article I, Section 2 which
describes the makeup of the Committee which administers the Option Plan
and substitute the following:
The Committee shall consist of not less than two (2) members of the
Board, each of whom shall be an "outside director" within the meaning of
Code Section 162(m) and "non-employee director" within the meaning
<PAGE>
of Rule 16b-3 (or any successor rule or regulation) promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act");
(d) Add the following as the third paragraph of Article I, Section 2:
If the Board does not appoint a Stock Option Committee as provided
above, the Board itself shall administer the Plan and the term "Committee"
shall be deemed to refer to the Board;
(e) Add the following as the second paragraph of Article II, Section
2:
The maximum number of shares of Common Stock subject to Options that
may be granted during any one calendar year to any one individual shall be
limited to One Hundred Fifty Thousand (150,000). To the extent required by
Section 162(m) of the Code and so long as Section 162(m) of the Code is
applicable to persons eligible to participate in the Plan, shares of Common
Stock subject to the foregoing limit with respect to which the related
Option is terminated, surrendered or canceled shall not again be available
for grant under this limit; and
(f) Delete all of the words prior to the colon in the second paragraph
in Article IV, Section 8 regarding the definition of "Change of Control"
and substitute "A Change in Control shall be deemed to have occurred if."
(ii) Effective upon the date the Corporation is required to file reports
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 the
Option Plan is amended
-2-
<PAGE>
to delete Article II, Section 4, paragraph (i) which included a repurchase
right by the Corporation with respect to shares issued upon option exercise.
-3-
<PAGE>
EXHIBIT H-1
-----------
DIRECTORS
Michael Mulligan
Robert McCormack
John Moragne
Dan Nova
Carlo von Schroeter
C. Richard Allen
<PAGE>
EXHIBIT H-2
-----------
AUDIT COMMITTEE MEMBERS
Robert McCormack
Carlo von Schroeter
<PAGE>
EXHIBIT H-3
-----------
COMPENSATION COMMITTEE MEMBERS
John Moragne
Dan Nova
<PAGE>
EXHIBIT H-4
-----------
PRICING COMMITTEE MEMBERS
Michael Mulligan
Robert McCormack
John Moragne
Dan Nova
Carlo von Schroeter
<PAGE>
EXHIBIT I
MAPQUEST.COM, INC.
ACTION BY WRITTEN CONSENT OF THE STOCKHOLDERS
THE UNDERSIGNED STOCKHOLDERS of MapQuest.com, Inc., a Delaware corporation
(the "Company"), waiving all call and notice of the time, place and purpose of a
meeting of the stockholders, do hereby consent to and adopt the following
resolutions pursuant to Section 228 of the Delaware General Corporation Law:
WHEREAS, the undersigned stockholders of the Company (the "Stockholders")
own more than fifty percent of the Company's outstanding Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock and Common Stock
voting as a single class entitled to vote on matters herein set forth as if the
same had been submitted at a meeting of the stockholders; and
WHEREAS, the Company desires to further amend and restate its Restated
Certificate of Incorporation and amend and restate its By-laws; and
WHEREAS, the Board of Directors believes it is in the best interest of the
Company to effect a recapitalization (the "Recapitalization") of the Company as
more fully described in the Recapitalization Agreement (including the exhibits
and schedules thereto) in the form presented to this meeting, terms not
otherwise defined herein having the meanings given to them in the
Recapitalization Agreement; and
WHEREAS, the Board of Directors has previously approved the adoption of
Amendment No. 4 to the 1995 Stock Option Plan, the 1999 Stock Plan and the
Employee Stock Purchase Plan (together, the "Plans"); and
WHEREAS, the Company has previously filed a Registration Statement on Form
S-1 (No. 333-72667) with the Securities and Exchange Commission (the "SEC") (the
"Registration Statement") under which the Company proposes to offer and sell
shares of the Company's common stock which provide gross proceeds to the Company
of approximately $40,000,000 (the "Common Stock Offering"); and
WHEREAS, the Board of Directors believes it is in the best interest of the
Company to list the Common Stock on the Nasdaq National Market System
("Nasdaq"); and
WHEREAS, under rules adopted by the SEC, grants of options and securities
under employee benefit plans, such as the Plans, that have been approved by the
Company's
<PAGE>
Stockholders are, provided certain additional conditions are met, exempt from
the prohibitions of Section 16(b) of the Exchange Act of 1934 (the "Exchange
Act"); and
WHEREAS, the Board of Directors believes that it would be beneficial to the
Company to obtain the vote of the Stockholders approving the Plans in order to
qualify the Plans under the SEC rules and qualify for an exemption from Section
16(b); and
WHEREAS, in connection with the Recapitalization and Common Stock Offering,
the Stockholders wish to approve the Plans, the Recapitalization and the Common
Stock Offering, and the execution, delivery and performance of all documents and
transactions contemplated thereby;
NOW, THEREFORE, the Stockholders do hereby adopt the following resolutions
and authorize the following actions:
1. APPROVAL OF AMENDED COMPANY CHARTER
-----------------------------------
RESOLVED, that the Stockholders hereby determine that it is advisable that
the Company's amended and restated certificate of incorporation (the
"Certificate of Incorporation") be further amended in the form submitted to the
Stockholders and attached hereto as Exhibit A-1 (the "Amendment No. 2 to the
-----------
Certificate of Incorporation"); and
FURTHER RESOLVED, that the Stockholders hereby determine that it is
advisable that the Certificate of Incorporation be amended and restated in the
form submitted to the Stockholders and attached hereto as Exhibit A-2 (the
-----------
"Amended and Restated Certificate of Incorporation" and together with Amendment
No. 2 to the Certificate of Incorporation, the "Amended Company Charter"); and
FURTHER RESOLVED, that the Amended and Restated Certificate of
Incorporation is hereby adopted and approved.
2. AMENDMENT OF BY-LAWS.
--------------------
FURTHER RESOLVED, that the By-laws of the Company are hereby amended and
restated, and adopted in the form attached hereto as Exhibit B presented to this
---------
meeting as the By-laws of the Company and that the amended and restated By-laws
of the Company provide for the staggered election of the Board of Directors of
the Company through the appointment of directors in three separate classes
(Classes, I, II and III), with the term of class I to expire in 2002, the term
of class II to expire in 2001 and the term of class III to expire in 2000.
3. STOCK SPLIT.
-----------
<PAGE>
FURTHER RESOLVED, the Company cause each share of its Common Stock, par
value $0.001 per share (the "Original Common Stock"), to split on a two and
seven-tenths-for-one basis ("Stock Split"), and each certificate representing
shares of Original Common Stock now outstanding shall hereby be canceled and
shall only represent the right to receive a new certificate or certificates
representing the appropriate number of shares of Common Stock;
FURTHER RESOLVED, that the Authorized Officers of, and counsel for, the
Company, or any of them, be, and each of them hereby is, authorized and directed
to take all further steps and to execute all documents necessary or desirable to
procure the Stock Split;
4. BOARD OF DIRECTORS.
------------------
FURTHER RESOLVED, that the persons listed on Exhibit C are hereby elected
---------
to serve as directors of the Company. Each of Michael Mulligan and Richard
Allen are hereby initially appointed as Class I directors; each of Robert
McCormack and Daniel Nova are hereby initially appointed as Class II directors;
and each of Carlo von Schroeter and John Moragne are hereby initially appointed
as Class III directors.
5. APPROVAL OF STOCK PLANS.
-----------------------
(a) 1999 Stock Plan
---------------
FURTHER RESOLVED, that it is in the best interests of the Company that it
offer an omnibus stock plan in order to attract and retain persons of ability as
employees, officers, directors and consultants of the Company or of any present
or future subsidiary; and
FURTHER RESOLVED, that the MapQuest.com, Inc. 1999 Stock Plan, in
substantially the form attached hereto as Exhibit D (the "1999 Stock Plan"), be
---------
and hereby is approved and adopted by the Stockholders to take effect upon the
satisfaction of (a) the effectiveness of the Company's Registration Statement in
connection with the Common Stock Offering, and (b) the absence of any further
resolution by the Board of Directors to abandon such Common Stock Offering or
related matters (the conditions referred to in clauses (a) and (b) are referred
to as the "Pre-Conditions"). The Pre-Conditions will be considered satisfied in
all aspects if so certified by James W. Thomas to the Board of Directors; and
FURTHER RESOLVED, that awards may be granted pursuant to the 1999 Stock
Plan for a total of 3,645,000 shares (following the Stock Split) of the
Company's Common Stock, par value $0.001 per share, which shall be available to
grant incentive stock options (as defined in Section 422 of the Internal Revenue
Code), nonqualified stock options, stock appreciation rights, restricted stock
and such other awards as described in the 1999 Stock Plan; and
FURTHER RESOLVED, that the 1999 Stock Plan shall be administered by, and
awards thereunder shall be granted by, the Compensation Committee whose members,
upon the
-3-
<PAGE>
consummation of the Common Stock Offering (as hereinafter defined), shall
constitute nonemployee directors as defined under Rule 16b-3 of the Exchange Act
and outside directors as defined under Internal Revenue Code Section 162(m); and
FURTHER RESOLVED, that the Stockholders hereby ratify and approve the
adoption of the 1999 Stock Plan and authorize the Board to direct that 1,350,000
authorized but unissued shares (subject to adjustment) of the Company's Common
Stock be set aside for awards under the 1999 Stock Plan.
(b) Employee Stock Purchase Plan
----------------------------
FURTHER RESOLVED, that it is in the best interests of the Company that it
offer an employee stock purchase plan in order to attract and retain persons of
ability as employees of the Company or of any present or future subsidiary; and
FURTHER RESOLVED, that the MapQuest.com, Inc. Employee Stock Purchase Plan,
in substantially the form attached hereto as Exhibit E (the "Employee Stock
---------
Purchase Plan"), be and hereby is approved and adopted by the Stockholders to
take effect only upon the satisfaction of the Pre-Conditions; and
FURTHER RESOLVED, that awards may be granted pursuant to the Employee Stock
Purchase Plan for a total of 1,755,000 shares (following the Stock Split) of the
Company's common stock, par value $0.001 per share, which shall be available for
purchase by eligible employees by payroll deduction as described in the Employee
Stock Purchase Plan; and
FURTHER RESOLVED, that all subsidiaries of the Company within the meaning
of Internal Revenue Code Section 424(f), or a successor provision, shall be
considered Designated Subsidiaries whose employees will be eligible for
participation in the Employee Stock Purchase Plan, along with the Company's
employees, in accordance with its terms; and
FURTHER RESOLVED, that the effective date of the Employee Stock Purchase
Plan shall be the effective date of a registration statement filed by the
Company for the plan on Form S-8 (the "S-8 Registration Statement") (or such
other appropriate form) with the Securities Exchange Commission ("SEC")
following the Common Stock Offering; provided, however, that the Employee Stock
Purchase Plan shall become effective only if the conditions stated above are
met; and
FURTHER RESOLVED, that the Employee Stock Purchase Plan shall be
administered by the Compensation Committee which shall consist solely of the
individuals whose members, upon the consummation of the Common Stock Offering,
shall constitute nonemployee directors as defined under Rule 16b-3 of the
Exchange Act and outside directors as defined under Internal Revenue Code
Section 162(m); and
-4-
<PAGE>
FURTHER RESOLVED, that the Stockholders hereby ratify and approve the
adoption of the Employee Stock Purchase Plan and authorize the Board to direct
that 650,000 authorized but unissued shares (subject to adjustment) of the
Company's common stock be set aside for options under the Employee Stock
Purchase Plan.
(c) Amendment No. 4 to 1995 Stock Option Plan
-----------------------------------------
FURTHER RESOLVED, that the GeoSystems Global Company 1995 Stock Option Plan
(the 1995 "Option Plan") is hereby amended effective as provided below by
Amendment No. 4 substantially in the form attached hereto as Exhibit F which
---------
provides as follows:
(i) Effective immediately the 1995 Option Plan is amended to:
(A) Change the name "GeoSystems Global Company" to
"MapQuest.com, Inc." each place it appears therein;
(B) Change the term "Internal Revenue Code of 1954" in Article
I, Section I to "Internal Revenue Code of 1986";
(C) Delete the third sentence of Article 1, Section 2 which
describes the makeup of the Committee which administers the Option
Plan and substitute the following:
The Committee shall consist of not less than two (2) members
of the Board, each of whom shall be an "outside director" within
the meaning of Code Section 162(m) and "non-employee director"
within the meaning of Rule l6b-3 (or any successor rule or
regulation) promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act");
(D) Add the following as the third paragraph of Article I,
Section 2:
If the Board does not appoint a Stock Option Committee as
provided above, the Board itself shall administer the Plan and
the term "Committee" shall be deemed to refer to the Board;
(E) Add the following as the second paragraph to Article II,
Section 2:
The maximum number of shares of Common Stock subject to
Options that may be granted during any one calendar year to
anyone individual shall be limited to 188,959 options. To the
extent required by Section 162(m) of the Code and so long as
Section 162(m) of the Code is applicable to persons eligible to
-5-
<PAGE>
participate in the Plan, shares of Common Stock subject to the
foregoing limit with respect to which the related Option is
terminated, surrendered or canceled shall not again be available
for grant under this limit; and
(F) Delete all of the words prior to the colon in the second
paragraph in Article IV, Section 8 regarding the definition of "Change
of Control" and substitute "A Change in Control shall be deemed to
have occurred if".
(ii) Effective upon the date the Company is required to file reports
pursuant to Section 13 or 15(d) of the Exchange Act the Option Plan is
amended to delete Article II, Section 4, paragraph (i) which included a
repurchase right by the Company with respect to shares issued upon option
exercise.
6. APPROVAL OF RECAPITALIZATION DOCUMENTS
--------------------------------------
FURTHER RESOLVED, that the Authorized Officers, or any of them, be, and
each of them hereby is, authorized and directed, in the name and on behalf of
the Company, to execute and deliver the Recapitalization Agreement (including
all Schedules and Exhibits thereto) and each of the agreements, instruments,
certificates and other documents contemplated thereby or required in connection
therewith including, without limitation, those set forth in Exhibit G attached
---------
hereto (together the "Recapitalization Documents") and take any and all such
--------------------------
action and do any and all such things in connection with the execution and
performance of the Recapitalization Agreement as the Authorized Officers, or any
of them, may deem necessary or appropriate, subject to the provisions of these
resolutions.
7. APPROVAL OF THE COMMON STOCK OFFERING
-------------------------------------
FURTHER RESOLVED, that the Company shall cause the Common Stock to be
registered with the SEC under the Securities Act of 1933, as amended (the
"Act"); and the Authorized Officers, or any of them, be, and each of them hereby
is, authorized and directed, in the name and on behalf of the Company, to
execute and file the Registration Statement in substantially the form heretofore
submitted to and considered by the Stockholders, with such changes therein as
the Authorized Officers, or any of them, may approve, such approval to be
conclusively evidenced by the execution thereof by them or any of them; and
FURTHER RESOLVED, that the Company shall cause the Common Stock to be
registered with the SEC under the Exchange Act, as amended, and the Authorized
Officers, or any of them, be, and each of them hereby is, authorized and
directed, in the name and on behalf of the Company, to execute and file a
registration statement on Form 8-A (the "8-A Registration Statement") relating
to registration of the Common Stock in substantially the form heretofore
submitted to and considered by the Stockholders, with such changes therein as
the Authorized
-6-
<PAGE>
Officers, or any of them, may approve, such approval to be conclusively
evidenced by the execution thereof by them or any of them; and
FURTHER RESOLVED, that the Authorized Officers, or any of them, be, and
each of them hereby is, authorized, in the name and on behalf of the Company, to
prepare, deliver, file, issue and circulate a preliminary prospectus in
substantially the form heretofore submitted to and considered by the
Stockholders, with such changes therein as the Authorized Officers, or any of
them, may approve; and
FURTHER RESOLVED, that the Authorized Officers, or any of them, be, and
each of them hereby is, authorized and directed, in the name and on behalf of
the Company, to prepare, execute and file any amendments or supplements to the
Registration Statement or the prospectus contained therein or to the 8-A
Registration Statement, to prepare, execute and file such exhibits thereto and
take any and all such action and do any and all such things in connection with
the issuance and sale of the Common Stock as the Authorized Officers, or any of
them, may deem necessary or appropriate, subject to the provisions of these
resolutions; and
FURTHER RESOLVED, that the Board of Directors or the majority of members of
any Pricing Committee thereof shall be irrevocably authorized to determine the
price per share at which the Common Stock Offering shall take place and that the
Board of Directors or the majority of members of any Pricing Committee thereof
shall be irrevocably authorized to adjust the Stock Split and to execute any
documents and to enter into any agreements, which shall be binding on the
Company, in connection therewith.
FURTHER RESOLVED, that the Authorized Officers, or any of them, be, and
each of them hereby is, authorized and directed, in the name and on behalf of
the Company, to take, or cause to be taken, all actions necessary or appropriate
to effect the listing of the Company's Common Stock, outstanding and to be
issued, on Nasdaq, including the preparation, execution and filing of any
listing application and all other necessary or appropriate applications,
documents, forms and agreements with Nasdaq and the SEC, and the payment by the
Company of filing, listing and application fees; and to take all other steps and
do all other things necessary or appropriate to effect the listing of the
Company's Common Stock on Nasdaq;.
8. MISCELLANEOUS
-------------
FURTHER RESOLVED, that any and all action prior to the Common Stock
Offering taken by any officer or director (whether current or former), other
than acts of wilful misconduct, be and hereby is, ratified and confirmed as the
act and deed of the Company; and
FURTHER RESOLVED, that the directors and officers of the Company are
authorized to do or cause to be done any and all such acts and things and
execute and deliver any and all documents and papers as they may deem necessary
or appropriate to carry out the purposes of the foregoing resolutions.
-7-
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Action By Written
Consent as of the first above written
TRIDENT CAPITAL PARTNERS FUND-I, L.P.
By: Trident Capital, L.P.,
its General Partner
By: Trident Capital, Inc.,
its General Partner
By:
-----------------------------------
Its:
TRIDENT CAPITAL PARTNERS FUND-I, C.V.
By: Trident Capital, L.P.,
its Investment General Partner
By: Trident Capital, Inc.,
its Investment General Partner
By:
-----------------------------------
Its:
-8-
<PAGE>
HIGHLAND CAPITAL PARTNERS III LIMITED
PARTNERSHIP
By: Highland Management Partners III Limited
Partnership, its General Partner
By:
----------------------------------
General Partner
HIGHLAND ENTREPRENEURS' FUND III
LIMITED PARTNERSHIP
By: HEP III, LLC, its General Partner
By:
----------------------------------
Member
-9-
<PAGE>
WESTON PRESIDIO CAPITAL II, L.P.
By:
----------------------------------
General Partner
-10-
<PAGE>
NATIONAL GEOGRAPHIC SOCIETY
By:
----------------------------------
-11-
<PAGE>
NGE MAPS, D/B/A/ NATIONAL GEOGRAPHIC MAPS
----------------------------------
By:
-12-
<PAGE>
----------------------------------
Michael J. Mulligan
-13-
<PAGE>
EXHIBIT A-1
-----------
Amendment No. 2 to the Certificate of Incorporation
---------------------------------------------------
-14-
<PAGE>
EXHIBIT A-2
-----------
Amended and Restated Certificate of Incorporation
-------------------------------------------------
-15-
<PAGE>
EXHIBIT B
---------
By-laws
-------
-16-
<PAGE>
EXHIBIT C
---------
Directors
---------
Michael Mulligan
Robert McCormack
John Moragne
Dan Nova
Carlo von Schroeter
C. Richard Allen
-17-
<PAGE>
EXHIBIT D
---------
1999 Stock Plan
---------------
-18-
<PAGE>
EXHIBIT E
---------
Employee Stock Purchase Plan
----------------------------
-19-
<PAGE>
EXHIBIT F
---------
Amendment No. 4 to 1995 Stock Option Plan
-----------------------------------------
-20-
<PAGE>
EXHIBIT G
---------
Recapitalization Documents
--------------------------
Recapitalization Agreement
Registration Statement
Underwriting Agreement
Director's Fee Policy
Directors and Officers insurance policy
Director Indemnity Agreements
Insider Trading Policy
-21-
<PAGE>
EXHIBIT J
MAPQUEST.COM, INC.
STATEMENT OF POLICY
CONCERNING
TRADING POLICIES
AND
CONFLICTS OF INTEREST
DATED
APRIL , 1999
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
I. SUMMARY OF THE COMPANY POLICY CONCERNINGTRADING POLICIES
AND CONFLICTS OF INTEREST............................................ 2
A. Compliance with Laws......................................... 2
B. Avoidance of Conflicts of Interest........................... 2
II. THE USE OF INSIDE INFORMATION IN CONNECTION WITH TRADING IN
SECURITIES............................................................ 3
A. General Rule................................................. 3
B. Who Does the Policy Apply To?................................ 4
C. Other Companies' Stocks...................................... 5
D. Trading in Options........................................... 5
E. Margin Accounts.............................................. 6
F. Guidelines................................................... 6
1. Nondisclosure............................................ 6
2. Trading in the Company's Securities...................... 6
3. Avoid Speculation........................................ 7
4. Trading in Other Securities.............................. 7
5. Restrictions on the Window Group......................... 7
[6. Trading within the 401(k) Plan.......................... 8
G. Insider Trading Compliance Officer........................... 9
H. Procedures for Approving Trades by Section 16 Individuals,
Key Employees and Hardship Cases............................. 10
1. Section 16 Individual/Key Employee Trades................ 10
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C>
2. Hardship Trades.......................................... 11
3. No Obligation to Approve Trades.......................... 11
III. OTHER LIMITATIONS ON SECURITIES TRANSACTIONS......................... 11
A. Public Resales - Rule 144.................................... 11
B. Private Resales.............................................. 12
C. Underwriter Lock-Up Agreements............................... 13
D. Restrictions on Purchases of Company Securities.............. 13
E. Disgorgement of Profits on Short-Swing
Transactions -- Section 16(b)................................ 13
F. Prohibition of Short Sales................................... 14
G. Filing Requirements.......................................... 14
1. Forms 3, 4 and 5......................................... 14
2. Schedule 13D and 13G..................................... 16
3. Form 144................................................. 16
IV. CONFLICTS OF INTEREST................................................ 16
</TABLE>
-ii-
<PAGE>
Page
----
Exhibits
Exhibit A Section 16 Individuals
Exhibit B Key Employees
Exhibit C Forms 3,4 and 5
Exhibit D Schedule 13D and 13G
Exhibit E Rule 144 Notice
-iii-
<PAGE>
I.
SUMMARY OF THE COMPANY POLICY CONCERNING
TRADING POLICIES AND CONFLICTS OF INTEREST
This Statement covers two fundamental principles which each employee and
director must follow:
A. Compliance with Laws.
It is the Company's policy that it will without exception comply with all
applicable laws and regulations in conducting its business. Each employee and
each director is expected to abide by this policy. When carrying out Company
business, employees and directors must avoid any activity that violates
applicable laws or regulations.
B. Avoidance of Conflicts of Interest.
Each employee and each director must avoid any activity or interest which
conflicts with, or even appears to conflict with, the best interests of the
Company. In other words, each employee and each director has a duty of utmost
loyalty to the Company.
The foregoing principles are described in more detail below. A description
of certain applicable laws and related policies is set forth in Sections II and
III of the Statement and conflicts of interest and general policies for avoiding
them are discussed in Section IV. The Statement does not describe every law or
regulation which will affect the Company and its business, but attempts to
familiarize employees and directors with the laws which they must pay particular
attention to in an effort to assure the Company's compliance. Of course,
employees and directors are expected to comply with all applicable laws.
In meeting the standards set out in this Statement, it is essential that
each employee and director conduct the Company's business with honesty and
integrity. Each employee and each director contributes to the Company's overall
reputation. Therefore, each employee and each director must accept individual
responsibility for ensuring that these standards are implemented.
II.
THE USE OF INSIDE INFORMATION IN CONNECTION
WITH TRADING IN SECURITIES
A. General Rule.
<PAGE>
The U.S. securities laws regulate the sale and purchase of securities in
the interest of protecting the investing public. U.S. securities laws give
MapQuest.com, Inc. (the "Company"), its officers and directors, and other
employees the responsibility to ensure that information about the Company is not
used unlawfully in the purchase and sale of securities.
All employees and directors should pay particularly close attention to the
laws against trading on "inside" information. These laws are based upon the
belief that all persons trading in a company's securities should have equal
access to all "material" information about that company. For example, if an
employee or a director of a company knows material non-public financial
information, that employee or director is prohibited from buying or selling
stock in the company until the information has been disclosed to the public:
This is because the employee or director knows information that will probably
cause the stock price to change, and it would be unfair for the employee or
director to have an advantage (knowledge that the stock price will change) that
the rest of the investing public does not have. In fact, it is more than
unfair. It is considered to be fraudulent and illegal. Civil and criminal
penalties for this kind of activity are severe.
The general rule can be stated as follows: It is a violation of the
----------------
federal securities laws for any person to buy or sell securities if he or she is
in possession of material inside information. Information is material if it
could affect a person's decision whether to buy, sell or hold the securities.
It is inside information if it has not been publicly disclosed. Furthermore, it
------
is illegal for any person in possession of material inside information to
provide other people with such information or to recommend that they buy or sell
the securities. (This is called "tipping".) In that case, they may both be
held liable. While it is not possible to identify all information that would be
deemed "material," the following types of information ordinarily would be
considered material:
- Financial performance, especially quarterly and year-end results
of operations, and significant changes in financial performance,
conditions or liquidity.
- Company projections and strategic plans.
- Potential mergers and acquisitions or the sale of Company assets
or subsidiaries.
- New major contracts, collaborations, orders, suppliers,
customers, or finance sources, or the loss thereof.
- Significant changes or developments in products or product lines.
- Significant changes or developments in supplies or inventory,
including significant product defects, recalls or product
returns. Significant pricing changes.
-3-
<PAGE>
- Stock splits, public or private securities/debt offerings, or
changes in Company dividend policies or amounts.
- Significant changes in senior management. Significant labor
disputes or negotiations.
- Actual or threatened major litigation, or the resolution of such
litigation.
The rule applies to any and all transactions in the Company's securities,
including its common stock and options and warrants to purchase common stock
(other than the exercise of employee stock options or warrants), and any other
type of securities that the Company may issue, such as preferred stock,
convertible debentures, warrants and exchange-traded options or other derivative
securities.
The Securities and Exchange Commission (the "SEC"), the stock exchanges and
plaintiffs' lawyers focus on uncovering insider trading. A breach of the
insider trading laws could expose the insider to criminal fines up to three
times the profits earned or loss avoided and imprisonment of up to ten years, in
addition to civil penalties (up to three times the profits earned), and
injunctive actions. In addition, punitive damages may be imposed under
applicable state laws. Securities laws also subject controlling persons to
civil penalties or illegal insider trading by employees, including employees
located outside the United States. Controlling persons include directors,
officers, and supervisors. These persons may be subject to fines up to the
greater of $1,000,000 or three times the profit or loss avoided by the insider
trader. Inside information does not belong to the individual directors,
officers or other employees who may handle it or otherwise become knowledgeable
about it. It is an asset of the Company. For any person to use such
information for personal benefit or to disclose it to others outside the Company
violates the Company's interests. More particularly, in connection with trading
in the Company securities, it is a fraud against members of the investing public
and against the Company.
B. Who Does the Policy Apply To?
The prohibition against trading on inside information applies to directors,
officers and all other employees, and to other people who gain access to that
information. Because of their access to confidential information on a regular
basis, Company policy subjects its directors and certain employees (the "Window
Group" as defined below) to additional restrictions on trading in the Company
securities. The restrictions for the Window Group are discussed in Section F
below. In addition, directors and certain employees with inside knowledge of
material information may be subject to ad hoc restrictions on trading from time
to time.
Additionally, the Company has designated those persons listed on Exhibit A
---------
attached hereto ("Section 16 Individuals") as the directors and officers who are
subject to the reporting provisions and trading restrictions of Section 16 of
the Exchange Act of 1934 (the "Exchange Act"). Section 16 Individuals must
obtain prior approval of all trades in Company securities from the Compliance
Officer in accordance with the procedures set forth in Section H below.
-4-
<PAGE>
The Company will amend Exhibit A from time to time as necessary to reflect the
---------
addition, resignation or departure of Section 16 Individuals.
The Company has designated those persons listed on Exhibit B attached
---------
hereto as Key Employees who, because of their position with the Company and/or
their access to material nonpublic information, must obtain the prior approval
of all trades in Company securities from the Compliance Officer in accordance
with the procedures set forth in Section H below. The Company will amend Exhibit
-------
B from time to time as necessary to reflect the addition, resignation or
- -
departure of Key Employees.
C. Other Companies' Stocks.
The same rules apply to other companies' stocks. Employees and directors
who learn material information about suppliers, customers, or competitors
through their work at the Company should keep it confidential and not buy or
sell stock in such companies until the information becomes public. Employees
and directors should not give tips about such stocks.
D. Trading in Options.
The insider trading prohibition also applies to trading in exchange traded
options, such as put and call options. Options trading is highly speculative
and very risky. People who buy options are betting that the stock price will
move rapidly. For that reason, when a person trades in options in his or her
employer's stock, it will arouse suspicion in the eyes of the SEC that the
person was trading on the basis of inside information, particularly where the
trading occurs before a Company announcement or major event. It is difficult
for an employee or director to prove that he or she did know about the
announcement or event.
If the SEC or Nasdaq were to notice active options trading by one or more
employees or directors of the Company prior to an announcement, they would
investigate. Such an investigation could be embarrassing to the Company (as
well as expensive), and could result in severe penalties and expense for the
persons involved. For all of these reasons, the Company prohibits its employees
and directors from trading in options on the Company stock. This policy does
not pertain to the exercise of stock options or warrants granted by the Company
to its employees, which cannot be traded.
E. Margin Accounts.
Securities held in a margin account may be sold by the broker without the
customer's consent if the customer fails to meet a margin call. Because such a
sale may occur at a time when an employee or a director had material inside
information or is otherwise not permitted to trade in Company securities, the
Company prohibits employees and directors from purchasing Company securities on
margin or holding Company securities in a margin account.
F. Guidelines.
-5-
<PAGE>
The following guidelines should be followed in order to ensure compliance
with applicable antifraud laws and with the Company's policies:
1. Nondisclosure. Material inside information must not be disclosed
-------------
to anyone, except to persons within the Company whose positions require
them to know it. No one may "tip" or disclose material nonpublic
information concerning the Company to any outside person (including, but
not limited to family members, analysts, individual investors, and members
of the investment community and news media), unless required as part of
that person's regular duties for the Company and authorized by the
Compliance Officer and/or the Board of Directors. In any instance in which
such information is disclosed to outsiders, the Company will take such
steps as are necessary to preserve the confidentiality of the information,
including requiring the outsider to agree in writing to comply with the
terms of this policy and/or to sign a confidentiality agreement. All
inquiries from outsiders regarding material nonpublic information about the
Company must be forwarded to the Compliance Officer.
In addition, care should be taken so that material, non-public
information is secure. For example, files containing material, non-public
information should be sealed and access to computer files containing such
information should be restricted.
No one may give trading advice of any kind about the Company to anyone
while possessing material nonpublic information about the Company, except
to advise others not to trade if doing so might violate the law or this
policy. The Company strongly discourages all directors and officers from
giving trading advice concerning the Company to third parties even when the
director or officer does not possess material nonpublic information about
the Company.
2. Trading in the Company's Securities. No employee or director
-----------------------------------
should place a purchase or sale order, or recommend that another person
place a purchase or sale order in the Company's securities, when he or she
has knowledge of material, non-public information concerning the Company.
This includes orders for purchases and sales of stock and convertible
securities. The exercise of employee stock options and warrants is not
subject to this policy. However, stock that was acquired upon exercise of
a stock option or warrant will be treated like any other stock, and may not
be sold by an employee who is in possession of material inside information.
Employees or directors who possess material inside information should wait
until the start of the third business day after the information has been
publicly released before trading.
3. Avoid Speculation. Investing in the Company's Common Stock
-----------------
provides an opportunity to share in the future growth of the Company. But
investment in the Company and sharing in the growth of the Company does not
mean short range speculation based on fluctuations in the market. Such
activities put the personal gain of the employee or director in conflict
with the best interests of the Company and its stockholders. Although this
policy does not mean that employees or directors may never sell shares, the
Company encourages employees and directors to avoid frequent
-6-
<PAGE>
trading in Company stock. Speculating in Company stock is not part of the
Company culture.
4. Trading in Other Securities. No employee or director should
---------------------------
place a purchase or sale order, or recommend that another person place a
purchase or sale order, in the securities of another corporation, if the
employee or director learns in the course of his or her employment
confidential information about the other corporation that is likely to
affect the value of those securities. For example, it would be a violation
of the securities laws if an employee or director learned through Company
sources that the Company intended to purchase assets from a company, and
then bought or sold stock in that other company because of the likely
increase or decrease in the value of its securities.
5. Restrictions on the Window Group. The Window Group consists of
--------------------------------
(i) directors and executive officers of the Company and their secretaries,
(ii) officers of the Company with the title Vice President or above and
their secretaries and (iii) such other persons as may be designated from
time to time and informed of such status by the Company's Chief Financial
Officer. The Window Group is subject to the following restrictions on
trading in Company securities:
- trading is permitted from the close of the fifth business day
following the filing by the Company of a Form 10Q or 10K with the
SEC until the close of trading on the day which is 10 days prior
to the date which is the earlier of (a) the date on which any
such filing is required to be made or (b) is in fact made (the
"Window"), subject to the restrictions below;
- all trades are subject to prior review;
- clearance for all trades should be obtained from the Company's
Chief Financial Officer;
- no trading in Company securities even during applicable trading
Windows while in the possession of material inside information.
Persons possessing such information may trade during a trading
Window only after the close of trading on the second full trading
day following the Company's widespread public release of such
material inside information;
- no trading in Company securities outside of the applicable
trading windows or during any special blackout periods that the
Compliance Officer may designate. No one may disclose to any
outside third party that a special blackout period has been
designated; and
- the Compliance Officer may, on a case-by-case basis, authorize
trading in Company securities outside of the applicable trading
Windows (but
-7-
<PAGE>
not during special blackout periods) due to financial hardship or
other hardships.
[6. Trading within the 401(k) Plan. Most transactions under the
------------------------------
401(k) Plan (the "Plan") are not subject to the Section 16(b) short-swing
profits rule (described at III.E. below) or the Section 16(a) reporting
requirements (described at III.G below). An example of an exempt, non-
reportable transaction would be a contribution to the Plan, such as, any
employee pre-tax or after-tax contributions and any Company match or profit
sharing contributions, even if the participant for whose benefit the
contributions are made has the right to direct that some or all of the
contributions will be invested in the Plan's Company stock fund.
Similarly, cash distributions from the Plan's Company stock fund to a
participant by reason of the participant's retirement or other termination
of employment would be an exempt, non-reportable transaction.
In contrast, discretionary transactions by a participant in the Plan
who is a Section 16 Individual are subject to the Section 16(a) reporting
---
requirements. Discretionary transactions include (1) a participant's
election to transfer part or all of the participant's Plan balance into (or
out of) the Company stock fund (after such monies are originally
contributed to the Plan and invested, when contributed, in the Company
stock fund) and (2) any voluntary request by a participant for a cash
withdrawal from the Company's stock fund on an occasion other than the
participant's retirement or other termination of employment (e.g., a
hardship withdrawal request).
Discretionary transactions by a Plan participant who is a Section 16
Individual will be exempt from the Section 16(b) short-swing profits rule
only if the participant's election to effect the transaction (e.g., the
election to move out of the Company stock fund or the request for a
hardship withdrawal) occurs at least six months after the participant's
most recent discretionary "opposite-way" purchase or sale election under
the Plan. The election by a Plan participant who is a Section 16
Individual to effect a discretionary transaction under the Plan less than
six months before or after an opposite-way discretionary transaction under
the Plan will be subject to Section 16(b). For instance, if a participant
elected to move some of his Plan account balance into the Company stock
fund in October after he had elected to move some of his Plan account out
of the Company stock fund in August, the transaction would be subject to
the Section 16(b) short-swing profits rule as well as to the Section 16(a)
reporting requirements. Plan participants who are Section 16 Individuals
are urged to consult with the Company's Compliance Officer, prior to
engaging in any Plan transaction that would be treated as a discretionary
transaction.
The general prohibition against trading based on inside information
(described at II.F.2. above) is equally applicable to Plan transactions.
Therefore, discretionary transactions, including changes by a participant
in the amount invested in the Company stock fund, while the participant is
in possession of material inside information are prohibited. Additionally,
Window Group members are prohibited from making changes in Plan
designations outside of the applicable trading windows or during any
-8-
<PAGE>
other blackout period, even if the participant is not in possession of
material inside information. Plan participants who are Window Group members
are urged to consult with the Company's Compliance Officer, prior to making
any changes in Plan designations outside of the applicable trading
windows.] [Does MapQuest have a Company stock fund?]
G. Insider Trading Compliance Officer.
The Company has designated James Thomas, Chief Financial Officer and
Secretary as its insider trading Compliance Officer (the "Compliance Officer").
The Compliance Officer will review and either approve or prohibit all proposed
trades by Section 16 Individuals and Key Employees in accordance with the
procedures set forth in Section H below.
In addition to the trading approval duties described in Section H below,
the duties of the Compliance Officer will include the following:
1. Administering this policy and monitoring and enforcing compliance
with all policy provisions and procedures.
2. Responding to all inquiries relating to this policy and its
procedures.
3. Designating and announcing special trading blackout periods during
which no Window Group members may trade in Company securities.
4. Providing copies of this policy and other appropriate materials to
all current and new directors, officers and employees, and such other
persons who the Compliance Officer determines have access to material
nonpublic information concerning the Company.
5. Administering, monitoring and enforcing compliance with all
federal and state insider trading laws and regulations, including without
limitation Sections 10(b), 16, 20A and 21A of the Exchange Act and the
rules and regulations promulgated thereunder, and Rule 144 under the
Securities Act of 1933 (the "Securities Act"); and assisting in the
preparation and filing of all required SEC reports relating to insider
trading in Company securities, including without limitation Forms 3, 4, 5
and 144 and Schedules 13D and 13G.
6. Revising the policy as necessary to reflect changes in federal or
state insider trading laws and regulations.
7. Maintaining as Company records originals or copies of all
documents required by the provisions of this policy or the procedures set
forth herein, and copies of all required SEC reports relating to insider
trading, including without limitation Forms 3, 4, 5 and 144 and Schedules
13D and 13G.
-9-
<PAGE>
8. Maintaining the accuracy of the list of Section 16 Individuals and
Key Employees as attached on Exhibits A and B, and updating them
---------- -
periodically as necessary to reflect additions to or deletions from each
category of individuals.
The Compliance Officer may designate one or more individuals, which may
include outside counsel, who may perform the Compliance Officer's duties.
H. Procedures for Approving Trades by Section 16 Individuals, Key Employees
and Hardship Cases.
1. Section 16 Individual/Key Employee Trades. No Section 16
-----------------------------------------
Individual or Key Employee may trade in Company securities until
(1) the person trading has notified the Compliance Officer in
writing of the amount and nature of the proposed trade(s),
(2) the person trading has certified to the Compliance Officer
that (i) he or she is not in possession of material
nonpublic information concerning the Company and (ii) the
proposed trade(s) do not violate the trading restrictions of
Section 16 of the Exchange Act or Rule 144 of the Securities
Act, and
(3) the Compliance Officer has approved the trade(s), and has
certified the approval in writing.
2. Hardship Trades. The Compliance Officer may, on a case-by-case
---------------
basis, authorize trading in Company securities outside of the applicable
trading windows due to financial hardship or other hardships only after
(1) the person trading has notified the Compliance Officer in
writing of the circumstances of the hardship and the amount
and nature of the proposed trade(s),
(2) the person trading has certified to the Compliance Officer
in writing no earlier than two business days prior to the
proposed trades(s) that he or she is not in possession of
material nonpublic information concerning the Company, and
(3) the Compliance Officer has approved the trade(s) and has
certified the approval in writing. Only the Compliance
Officer's approval is necessary for hardship trades by
insiders who are not Section 16 Individuals or Key
Employees.
3. No Obligation to Approve Trades. The existence of the foregoing
-------------------------------
approval procedures does not in any way obligate the Compliance Officer to
approve any trades
-10-
<PAGE>
requested by Section 16 Individuals, Key Employees or hardship applicants.
The Compliance Officer may reject any trading requests at his/her sole
discretion.
III
OTHER LIMITATIONS ON SECURITIES TRANSACTIONS
A. Public Resales - Rule 144.
The Securities Act requires every person who offers or sells a security to
register such transaction with the SEC unless an exemption from registration is
available. Rule 144 under the Securities Act is the exemption typically relied
upon (i) for public resales by any person of "restricted securities" (i.e.,
securities acquired in a private offering) and (ii) for public resales by
officers, directors and other control persons of a company (known as
"affiliates") of any of the Company's securities, whether restricted or
unrestricted. All outstanding shares of the Company's Common Stock, other than
those sold to the public in the Company's initial public offering in [April]
1999, are "restricted securities."
Rule 144 contains five conditions, although the applicability of some of
these conditions will depend on the circumstances of the sale:
(1) Current Public Information. Current information about the
--------------------------
Company must be publicly available at the time of sale. The Company's
periodic reports filed with the SEC ordinarily satisfy this requirement.
(2) Holding Period. Restricted securities must be held and fully
--------------
paid for by the seller for a period of one year prior to the sale. The
holding period requirement, however, does not apply to securities held by
affiliates that were acquired either in the open market or in a public
offering of securities registered under the Securities Act. If the seller
acquired the securities from someone other than the Company or an affiliate
of the Company, the holding period of the person from whom the seller
acquired such securities can be "tacked" to the seller's holding period in
determining if the two-year requirement has been satisfied. In the case of
options you have received under the Company's 1995 Stock Option Plan or
Omnibus Stock Option Plan more than one year prior to the sale of the
underlying common stock, the holding period will have been satisfied.
(3) Volume Limitations. The amount of securities which can be sold
------------------
during any three month period cannot exceed the greater of (i) one percent
of the outstanding shares of the class or (ii) the average weekly reported
trading volume for shares of the class during the four calendar weeks
preceding the filing of the notice of sale referred to below.
-11-
<PAGE>
(4) Manner of Sale. The securities must be sold in unsolicited
--------------
brokers' transactions or directly to a market-maker.
(5) Notice of Sale. The seller must file a notice of the proposed
--------------
sale with the SEC at the time the order to sell is placed with the broker,
unless the amount to be sold neither exceeds 500 shares nor involves sale
proceeds greater than $10,000. See "Filing Requirements."
The foregoing conditions do not have to be complied with by holders of
restricted securities who have held (and fully paid for in cash) their
restricted shares for at least two years and who were not affiliates during the
three months preceding the sale under the rule.
Bona fide gifts are not deemed to involve sales of stock for purposes of
Rule 144, so they can be made at any time without limitation on the amount of
the gift. Donors who receive restricted securities from an affiliate generally
will be subject to the same restrictions under Rule 144 that would have applied
to the donor for a period of up to one year following the gift, depending on the
circumstances.
B. Private Resales.
Directors and officers also may sell securities in a private transaction
without registration. Although there is no statutory provision or SEC rule
expressly dealing with private sales, the general view is that such sales can
safely be made by affiliates if the party acquiring the securities understands
he is acquiring restricted securities that must be held for at least two years
before the securities will be eligible for resale to the public under Rule 144.
Private resales raise certain documentation and other issues and must be
reviewed in advance by the Company's Compliance Officer.
C. Underwriter Lock-Up Agreements.
Certain holders of the Company's Common Stock outstanding immediately prior
to the Company's initial public offering in [April] 1999 have agreed not to
offer, sell, contract to sell or otherwise dispose of any shares of Common Stock
or any securities convertible into or exercisable or exchangeable for Common
Stock for a period of 180 days from the date of the initial public offering
without the prior written consent of the Underwriters. The foregoing limitation
is also quite broad and would prohibit gifts of Common Stock or pledging Common
Stock as collateral for a loan. In addition, the Lock-up Agreements restrict
the disposition of any shares of Common Stock whether or not acquired after the
Company's initial public offering.
D. Restrictions on Purchases of Company Securities.
In order to prevent market manipulation, the SEC has adopted Rules 10b-6
and 10b-18 under the Exchange Act. Rule 10b-6 generally prohibits the Company
or any of its affiliates from buying Company stock in the open market during
certain periods while a public offering
-12-
<PAGE>
is taking place. Rule 10b-18 sets forth guidelines for purchases of Company
stock by the Company or its affiliates while a stock buyback program is
occurring. While the guidelines are optional, compliance with them provides
immunity from a stock manipulation charge. You should consult with the Company's
Compliance Officer, if you desire to make purchases of Company stock during any
period that the Company is making a public offering or buying stock from the
public.
E. Disgorgement of Profits on Short-Swing
Transactions -- Section 16(b).
Section 16 of the Exchange Act applies to directors and officers of the
Company and to any person owning more than ten percent of any registered class
of the Company's equity securities. The section is intended to deter such
persons (collectively referred to below as "insiders") from misusing
confidential information about their companies for personal trading gain.
Section 16(a) requires insiders to publicly disclose any changes in their
beneficial ownership of the Company's equity securities (see "Filing
Requirements," below). Section 16(b) requires insiders to disgorge to the
Company any "profit" resulting from "short-swing" trades, as discussed more
fully below. Section 16(c) effectively prohibits insiders from engaging in
short sales (see "Prohibition of Short Sales," below).
Under Section 16(b), any profit realized by an insider on a "short-swing"
transaction (i.e., a purchase and sale, or sale and purchase, of the Company's
equity securities within a period of less than six months) must be disgorged to
the Company upon demand by the Company or a stockholder acting on its behalf.
By law, the Company cannot waive or release any claim it may have under Section
16(b), or enter into an enforceable agreement to provide indemnification for
amounts recovered under the section.
Liability under Section 16(b) is imposed in a mechanical fashion without
regard to whether the insider intended to violate the section. Good faith,
therefore, is not a defense. All that is necessary for a successful claim is to
show that the insider realized "profits" on a short-swing transaction; however,
profit, for this purpose, is calculated as the difference between the sale price
and the purchase price in the matching transactions, and may be unrelated to the
actual gain on the shares sold. When computing recoverable profits on multiple
purchases and sales within a six month period, the courts maximize the recovery
by matching the lowest purchase price with the highest sale price, the next
lowest purchase price with the next highest sale price, and so on. The use of
this method makes it possible for an insider to sustain a net loss on a series
of transactions while having recoverable profits. The terms "purchase" and
"sale" are construed under Section 16(b) to cover a broad range of transactions,
including acquisitions and dispositions in tender offers and certain corporate
reorganizations. Moreover, purchases and sales by an insider may be matched
with transactions by any person (such as certain family members) whose
securities are deemed to be beneficially owned by the insider.
The Section 16 rules are complicated and present ample opportunity for
inadvertent error. To avoid unnecessary costs and potential embarrassment for
insiders and the Company, officers and directors are strongly urged to consult
with the Company's Compliance Officer,
-13-
<PAGE>
prior to engaging in any transaction or other transfer of Company equity
securities regarding the potential applicability of Section 16(b).
F. Prohibition of Short Sales.
Under Section 16(c), insiders are prohibited from effecting "short sales"
of the Company's equity securities. A "short sale" is one involving securities
which the seller does not own at the time of sale, or, if owned, are not
delivered within 20 days after the sale or deposited in the mail or other usual
channels of transportation within five days after the sale. Wholly apart from
Section 16(c), the Company prohibits directors and employees from selling the
Company's stock short. This type of activity is inherently speculative in
nature and it will arouse suspicion in the eyes of the SEC that the person was
trading on the basis of inside information, particularly when the trading occurs
before a major Company announcement or event.
G. Filing Requirements.
1. Forms 3, 4 and 5. Under Section 16(a) of the Exchange Act,
----------------
insiders must file with the SEC and any stock exchange on which the
Company's equity securities are quoted (i.e., the Nasdaq National Market
System) public reports disclosing their holdings of and transactions
involving, the Company's equity securities. Copies of these reports must
also be submitted to the Company. An initial report on Form 3 must be
filed by every insider within 10 days after election or appointment
disclosing all equity securities of the Company beneficially owned by the
reporting person on the date he became an insider. Even if no securities
were owned on that date, the insider must file a report. Any subsequent
change in the nature or amount of beneficial ownership by the insider must
be reported on Form 4 and filed within ten days after the close of the
month in which the change occurred. Certain exempt transactions may be
reported on Form 5 within 45 days after the end of the fiscal year. The
fact that an insider's transactions during the month resulted in no net
change, or the fact that no securities were owned after the transactions
were completed, does not provide a basis for failing to report. All
changes in the amount or the form (i.e., direct or indirect) of beneficial
ownership (not just purchases and sales) must be reported. Thus, such
transactions as gifts and stock dividends ordinarily are reportable.
Moreover, an officer or director who has ceased to be an officer or
director must report any transactions after termination which occurred
within six months of a transaction that occurred while the person was an
insider. Attached hereto as Exhibit C are Forms 3, 4 and 5 respectively.
---------
The reports under Section 16(a) are intended to cover all securities
beneficially owned either directly by the insider or indirectly through
others. An insider is considered the direct owner of all Company equity
securities held in his or her own name or held jointly with others. An
insider is considered the indirect owner of any securities from which he
obtains benefits substantially equivalent to those of ownership. Thus,
equity securities of the Company beneficially owned through partnerships,
corporations, trusts, estates, and by family members generally are subject
to reporting.
-14-
<PAGE>
Absent countervailing facts, an insider is presumed to be the beneficial
owner of securities held by his or her spouse and other family members
sharing the same home. But an insider is free to disclaim beneficial
ownership of these or any other securities being reported if the insider
believes there is a reasonable basis for doing so.
It is important that reports under Section 16(a) be prepared properly
and filed on a timely basis. The reports must be received at the SEC by
the filing deadline. There is no provision for an extension of the filing
deadlines, and the SEC can take enforcement action against insiders who do
not comply fully with the filing requirements. In addition, the Company is
required to disclose in its annual proxy statement the names of insiders
who failed to file Section 16(a) reports properly during the fiscal year,
along with the particulars of such instances of noncompliance. Accordingly,
the Company strongly urges all directors and officers to notify the
Company's Compliance Officer, prior to any transactions or changes in their
or their family members' beneficial ownership involving Company stock and
to avail themselves of the assistance available from Mayer, Brown & Platt
in satisfying the reporting requirements.
2. Schedule 13D and 13G. Section 13(d) of the Exchange Act requires
--------------------
the filing of a statement on Schedule 13G by any person or group which
acquires beneficial ownership of more than five percent of a class of
equity securities registered under the Exchange Act. The threshold for
reporting is met if the stock owned, when coupled with the amount of stock
subject to options exercisable within 60 days, exceeds the five percent
limit.
Reports on Schedule 13D and 13G are required to be filed with the SEC
and submitted to the Company within ten days after the reporting threshold
is reached. If a material change occurs in the facts set forth in the
Schedule 13D or 13G, such as an increase or decrease of one percent or more
in the percentage of stock beneficially owned, an amendment disclosing the
change must be filed promptly. A decrease in beneficial ownership to less
than five percent or twenty percent is per se material and must be
--- --
reported.
A person is deemed the beneficial owner of securities for purposes of
Section 13(d) if such person has or shares voting power (i.e., the power to
vote or direct the voting of the securities) or dispositive power (i.e.,
the power to sell or direct the sale of the securities). As is true under
Section 16(a) of the Exchange Act, a person filing a Schedule 13D or 13G
may disclaim beneficial ownership of any securities attributed to him or
her if he or she believes there is a reasonable basis for doing so.
Attached hereto as Exhibit D are forms of Schedule 13D and 13G,
---------
respectively.
3. Form 144. As described above under the discussion of Rule 144, a
--------
seller relying on Rule 144 must file a notice of proposed sale with the SEC
at the time the order to sell is placed with the broker unless (x) the
amount to be sold neither exceeds 500 shares nor involves sale proceeds
greater than $10,000 or (y) the seller is not at the
-15-
<PAGE>
time of the sale, and has not been for the three months preceding such
date, an affiliate of the Company and, if the securities to be sold are
restricted securities, such restricted securities have been held (and fully
paid for) for at least two years. Attached hereto as Exhibit E is a form of
---------
notice of proposed sale under Rule 144.
IV.
CONFLICTS OF INTEREST
The Company relies on the integrity and undivided loyalty of its employees
to maintain the highest level of objectivity in performing their duties. Each
employee is expected to avoid engaging in activities that conflict with, or have
the appearance of conflicting with, the best interests of the Company and its
stockholders. Any personal activities or interests of an employee that could
negatively influence, or which could have the appearance of negatively
influencing, his or her judgment, decisions or actions must be disclosed to the
Company's Compliance Officer, who will determine if there is a conflict and, if
so, how to resolve it without compromising the Company's interests. Prompt and
----------
full disclosure is always the correct first step towards identifying and
- ------------------------------------------------------------------------
resolving any potential conflict of interest or problem.
- -------------------------------------------------------
This policy applies not only to each employee but also to members of the
employee's immediate family, any trust in which an employee (or a member of the
employee's immediate family) has a beneficial interest, and any person with whom
the employee (or a member of the employee's immediate family) has a substantial
business relationship. Immediate family includes any relatives of the employee
or the employee's spouse who live in the same household as the employee.
This policy applies to officers and directors to the same extent as
employees. Conflicts involving officers will be reviewed by the Audit Committee
of the Board. Conflicts involving the Chief Executive Officer and directors will
be reviewed by the Board.
In certain limited cases, activities giving rise to potential conflicts of
interest may be permitted if they are determined not to be harmful to the
Company. That determination will be made by the Board in the case of the Chief
Executive Officer or directors, by the Audit Committee in the case of other
officers, and by the Company's Compliance Officer, in the case of other
employees.
The following discussion sets out some of the more common conflicts that an
employee may confront and is intended to serve as a guide to the standards to
which all employees are expected to adhere. The list is unavoidably incomplete.
It is the special responsibility of each employee to use his or her best
judgement to assess objectively whether a conflict or the appearance of a
conflict exists and to engage in open and candid communication with the Company
about the conflict. In addition, an employee should be prudent in his or her
personal investments and other activities to ensure that they do not put the
employee in a position --
-16-
<PAGE>
financial or otherwise -- which might influence or give the appearance of
influencing his or her actions as a Company employee.
No employee may have any direct or indirect financial interest in, or any
business relationship with, a private company, partnership, or other privately-
held entity that currently is or becomes a supplier of materials to the Company,
a provider of services to the Company or a competitor of the Company. A
financial interest includes any ownership or creditor interest. This policy
does apply to either an employee's arms-length purchases of goods and services
for personal or familial use or an employee's normal arms-length dealings with
companies, banks, insurance companies and utilities that have a relationship
with the Company that is merely incidental to the Company's operations. Any
employee or director that has a direct or indirect material financial interest
--------
in, or business relationship with, a public company that currently is or becomes
a supplier of materials to the Company, a provider of services to the Company or
a competitor of the Company must disclose such interest to the Company's
Compliance Officer, who will determine if there is a conflict and, if so, how to
resolve it without compromising the Company's interests. A financial interest
includes any ownership or creditor interest. This policy does not apply to
either an employee's arms-length purchases of goods and services for personal or
familial use or an employee's normal arms-length dealings with companies, banks,
insurance companies and utilities that have a relationship with the Company that
is merely incidental to the Company's operations.
No employee should accept gifts, credits, payments, services, excessive
entertainment or anything else of value from an actual or potential competitor,
supplier or customer unless such gift is of insubstantial value and a refusal to
accept it would be discourteous or otherwise harmful to the Company. In
addition, receiving advertising novelties such as calendars does not violate
this policy. Permitting a supplier's or customer's employee to pick up the
check at a meal is not inappropriate so long as business was discussed at arms-
length and there is no suggestion of undue or unfair influence. If a gift or
other service or object of value is offered to an employee, he or she should
immediately report the offer to a responsible Company manager so that an
appropriate response can be made to the offeror. Please remember, however, that
local, state and federal laws often impose special rules on relations with
government customers and suppliers which may differ from commercial relations.
Payments for expenses of government representatives should be reviewed by the
Company's Compliance Officer, prior to making the payment.
No employee may use Company information for personal gain (i) if it
would harm the Company's interests or (ii) if the information has not been
previously disclosed to the public. For example, if the employee is aware that
the Company intends to purchase or is considering the purchase of a specific
parcel of land, it would be a breach of the employee's duty of loyalty to the
Company to purchase that property or inform others of the Company's intent. Any
confidential or proprietary information concerning the Company belongs to the
Company and should not be disclosed or used by the employee. Any unauthorized
disclosure of such information would be a breach of the employee's duty of
loyalty. See Section II of this Statement for a discussion of federal
securities laws prohibiting the trading in securities based on non-public
Company information.
-17-
<PAGE>
Exhibit A
---------
Exhibit A to Statement of Policy Concerning Trading Policies and Conflicts
of Interest.
Individuals subject to reporting provisions and trading restrictions of
Section 16 of the Securities and Exchange Act of 1934, as amended.
Directors
- ---------
Officers
- --------
-18-
<PAGE>
Exhibit B
---------
Exhibit B to Statement of Policy Concerning Trading Policies and Conflicts
of Interest.
Individuals subject to reporting provisions and trading restrictions of
Section 16 of the Securities and Exchange Act of 1934, as amended.
Key Employees of the Company
- ----------------------------
-19-
<PAGE>
Exhibit C
---------
Exhibit C to Statement of Policy Concerning Trading Policies and Conflicts
of Interest.
Sample Forms 3, 4 and 5
- -----------------------
-20-
<PAGE>
Exhibit D
---------
Exhibit D to Statement of Policy Concerning Trading Policies and Conflicts
of Interest.
Sample Schedule 13D and 13G
- ---------------------------
-21-
<PAGE>
Exhibit E
---------
Exhibit E to Statement of Policy Concerning Trading Policies and Conflicts
of Interest.
Sample Rule 144 Notice
- ----------------------
-22-
<PAGE>
EXHIBIT 10.12
[QWEST LOGO]
Qwest CoLocation Service Agreement
Qwest Communications Inc. and Mapquest, A Business Unit of Geosystems Global
----------------------------------------------
Corporation. (herein after referred to as "Subscriber") enter into this
- ------------
Subscription Agreement ("Agreement") this day of May 18, 1998 and agree as
------------
follows:
1. Qwest shall allow Subscriber to connect computing facilities at
Subscriber's site (identified in Paragraph 4 below) to the Qwest Network
(the "Network") and transmit data over the Network in accordance with
the terms of this Agreement and the Qwest Communications Inc. Statement
of Policies and Procedures attached hereto as Exhibit A and incorporated
herein by this reference (the "Policies and Procedures").
2. Subscriber service: Co-Location Service. The monthly fees for a
--------------------
12 Month term membership, connection to and use of the Network are as
--------
follows:
A. Rack Space
1. Install - $1,000
------
2. Monthly Reoccurring Charge (MRC) - $6,392 ($64,700 annually)
-------------------------
B. 100MB Network Uplink
1. Install - Waived With Term
----------------
2. MRC - Waived With Term
----------------
C. Bandwidth
1. MRC Local Loop $274
2. MRC (9.0-10.5Mbps)-$8,333
3. MRC (10.5-12Mbps)-$9,833
4. MRC (12-13.5Mbps)-$11,333
5. MRC (13.5-15Mbps)-$14,250
6. MRC (15-16.5Mbps)-$17,166
7. MRC (16.5-18Mbps)-$20,083
8. MRC (18-19.5Mbps)-$23,000
9. MRC (19.5-21Mbps)-$26,000
The first such fee plus the installation fee (if applicable) shall be due within
30 days after connection to the Network. Renewal fees shall be invoiced on the
first day of the calendar month immediately preceding the anniversary date of
this Agreement and shall be paid within 30 days of the invoice date. In addition
to annual subscription fees, Subscriber must pay the telecommunications costs
from its facilities to the nearest network node and the costs of
hardware/software required to connect Subscriber's site to the nearest Qwest
node for TCP/IP inferfacing. Qwest will provide the interface port at its site.
Telecommunications service may be purchased directly from common carriers.
Qwest technical advisors will provide the necessary specifications for the
required hardwire data link.
<PAGE>
3. Miscellaneous costs as described in the Policies and Procedures shall be
due 30 days after billing by Qwest.
4. Subscriber shall be entitled to physically connect 8 Racks located within the
Machine Room at 960 17th St., Ste. 1900 to the Network with a 100BaseT Uplink.
5. Neither party shall have the right to use the other's name, trademarks or
trade name without the prior written consent of the other party.
6. Qwest, any and all participating Qwest contractors and grantees, and Qwest's
directors, officers and employees are not authorized to make any affirmation of
fact or warranty with respect to the software or hardware supplied under this
Agreement. QWEST HEREBY EXPRESSLY DISCLAIMS ALL EXPRESSED AND IMPLIED
WARRANTIES, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT, AND SHALL NOT BE LIABLE
TO SUBSCRIBER FOR DIRECT, INCIDENTAL, SPECIAL, OR CONSEQUENTIAL DAMAGES OF ANY
KIND WHATSOEVER ARISING OUT OF OR RELATED TO THE USE OR INABILITY TO USE THE
QWEST HARDWARE OR SOFTWARE.
7. Subscriber shall indemnify and hold Qwest, its directors, officers, employees
and agents harmless from and against any and all damages, liabilities, losses,
costs and expenses, including reasonable attorney's fees caused by, arising out
of or related to Subscriber's use of the Network or Subscriber's breach of the
terms and conditions of this Agreement or the Policies and Procedures.
8. This Agreement may be terminated by either party immediately upon written
notice to the other party; provided, however, that the provisions of Paragraphs
6, 7 and Exhibit A shall survive any such termination.
9. This Agreement, including the Policies and Procedures, is the sole Agreement
between the parties respecting the subject matter hereof. By signing this
Agreement, Subscriber acknowledges it has received and read the Policies and
Procedures and fully understands the terms thereof. This Agreement supersedes
all prior agreements and understandings, whether oral or written. This Agreement
may be amended only in writing, and signed by both parties to this Agreement.
10. No information exchanged between the parties shall be considered
confidential unless it is the subject of a separate, written non-disclosure
agreement.
11. This Agreement and the legal relationships between the parties shall be
governed by and construed in accordance with the laws of the State of Colorado.
Qwest Communications, Inc. Subscriber
- -------------------------- ----------
Signed: /s/ N. Weiner Signed: /s/ Marc B. Haverland
------------------ ------------------------
Rep Name: N. Weiner Name: Marc B. Haverland
--------------- -------------------------
Rep Title: Major Acct Exec Title: Dir, Internet Engineering
--------------- -------------------------
Date: 5/18/98 Date: 5-18-98
--------------- -------------------------
<PAGE>
Exhibit A: Qwest Communications Inc. Statement of Policies and Procedures
Use of Network
1. Subscriber will be subject to the Network usage rules as promulgated and
modified from time to time by Qwest. Failure to comply with these Policies and
Procedures and Network usage rules may result in the termination of
Subscriber's access to or use of the Network.
2. Subscriber is responsible for appointing a primary and secondary
Administrative Liaison, who will implement these policies within the
organization. The Administrative Liaisons will report violations of these
Policies and Procedures and Network usage rules, and stops being taken to
prevent future violations.
3. The Network is not a secure network. Confidential or sensitive data,
proprietary software, and other secret information should not be transmitted
over the Network. Qwest assumes no responsibility for loss, damage, or theft of
information transmitted over the Network.
4. Subscriber and its affiliates are expected to comply with all applicable
State and Federal laws, including laws governing technology and software.
Connections to the Network
1. Qwest will provide the following hardware/software and hardware/software
support. a) Interface port at a Network host site. b) Testing of all relevant
hardware required prior to connection. c) Installation of relevant hardware at
Subscriber and Network sites. d) Assistance in application for IP address(es)
and Domain name. e) Network monitoring and management.
2. Subscriber will provide the following hardware/software and technical
support.
a) TCP/IP compatibility.
b) Data communication circuit between Subscriber site and Network host site.
c) DSU/CSUs or modems at Subscriber end of circuit.
d) All cables at Subscriber site.
e) Appropriate router or other connection hardware as agreed upon with Qwest.
f) Designated liaison to Network.
If Subscriber chooses non-recommended hardware, it is subject to Time and
Materials charges if Qwest is involved in related installation effort.
Disconnection From the Network
If, for any reason, Subscriber's connection causes technical disturbances on the
Network, Subscriber and Qwest will work jointly to correct the disturbances. If
the problem is insurmountable or too costly to correct, Qwest reserves the right
to disconnect Subscriber from the Network and refund any payments not already
spent.
5. In addition to annual subscription fees, Subscriber must pay the
telecommunications costs from its facilities to the nearest network node and
the costs of hardware/software required to connect Subscriber's site to the
nearest Qwest node for TCP/IP interfacing. Qwest will provide the interface
port at its site. Telecommunications service may be purchased directly from
common carriers. Qwest technical advisors will provide the necessary
specifications for the required hardwire data link.
Remittance Address
Please send all Purchase Orders, payments and billing inquiries to:
Qwest Communications Inc.
950 17th Street
Suite 1900
Denver, Colorado 80202
<PAGE>
Cancellation of Subscription
1. The customer shall have 90 days from the install date in which to notify
Qwest, in writing, of any service problems. If Qwest cannot resolve the
problem(s) within ten days of receipt of written request for service,
then the Customer has the option to cancel this Agreement. If this
Agreement is cancelled within 90 days, the Customer will not be held
responsible for the Monthly Reoccurring Charges following the effective
date of such cancellation, but maybe responsible for any Qwest provided
access, including installation fees. If the customer otherwise
discontinues service prior to the end of the agreement term, the
Customer may be responsible for an amount equal to 25% of the Monthly
Reoccurring Charges for Internet Service for each month remaining on the
term. The customer may switch to any other Qwest service with an equal
or greater volume and term commitment, at any time during the term of
the Agreement.
2. Qwest reserves the right to cancel the subscription of Subscriber for
misuse of the Network as outlined herein. A Subscriber who has had its
subscription cancelled will not be entitled to a refund of any of its
subscription fee.
Miscellaneous Matters
A. Neither Qwest nor Subscriber shall acquire any rights in the data
transmitted over the Network by virtue of the Subscription Agreement or
their use of the Network.
B. Qwest shall not have the right to gain access to or to make use of
Subscriber's computing facilities by virtue of the Subscription
Agreement.
C. Qwest shall not mediate agreements between Subscriber and other
subscribers on the Network.
D. Mail Exchange - Qwest will provide mail exchange services to its
customers at no extra charge.
E. NNTP - An NNTP news feed will be provided for free so long as the
customer has their own NNTP server and at least a T1 dedicated Internet
connection or above. As a prerequisite to News Feed Service, the
customer must install a news server at their premises; news reading
software should also be installed on the customer's desktop PCs and/or
workstations as appropriate. Once the server is in place and the service
is established, Qwest feeds (downloads) customer-selected news
information from Qwest's central news server to the customer's server
via NNTP (Network News Transfer Protocol), where it is then available to
be read by all authorized users on the customer's internal network.
Note that network news articles are never directly accessed by
clients' news reading software from Qwest's central news server, but
rather all news must be read from the customer's news server.
F. Domain Name Service (DNS): Up to 5 domains and 50 kilobytes of
associated zone file data are included. This package is comprised of
three components: domain name registration, secondary DNS
administration, and primary DNS administration. Included in the service
is registration and administration of up to 3 domain names. Customers
may purchase additional DNS service in units of 5 domains. The charge
for additional DNS service will be $50 setup and $50 per month.
G. For those Internet Service customers who are designated as Gateway
Customers (GCs), whereby they resell Internet access services to
customers of their own via their Internet connection, Qwest will only
provide domain name registration and primary and secondary DNS
administration for the GC's own domain names, not for those of the GC's
customers. Qwest will provide secondary DNS administration for domain
names registered to customers of the GC only in those cases where the
primary DNS administration for those domain names is being provided
directly by the GC.
<PAGE>
Exhibit 10.13
MOUNTVILLE PENNSYLVANIA
Part I
MADE and executed this 9th day of December, 1996.
By and between DONNERVILLE ASSOCIATES, a Pennsylvania limited partnership
having its principal place of business at 2350 Springwood Road, York,
Pennsylvania 17402, herein called "Landlord"; and GEOSYSTEMS GLOBAL CORPORATION,
a Delaware corporation, having its principal place of business at 227 Granite
Run Drive, Lancaster, Pennsylvania 17601, herein called "Tenant."
Landlord does hereby Lease unto Tenant the "Premises" at the "Rent" for the
"Term" for the "Permitted Use" upon and under the Terms and Conditions set forth
in this Part I and Part II of the Lease Agreement (collectively, the "Lease")
all as follows. In case of conflict in definitions or other provisions of Part I
and of Part II, Part II shall control.
1. Premises.
1.1 Location: 3700-3750 Electronics Way, Township of West Hempfield,
County of Lancaster, Lancaster, Pennsylvania 17601.
1.2 Tenant's Rentable Square Footage: 62,000 Square Feet.
1.3 Building Rentable Square Footage: 62,000 Square Feet, comprising
2 buildings connected by a corridor. See Exhibit A.
1.4 Tenant's Pro-Rate Share of Building: 100 Percent (100.00%).
1.5 The garage located on the Premises, comprising approximately 400
square feet, is included within the Leased Premises at no cost.
1.6 All unimproved area covered by legal description attached as
Exhibit A.
2. Improvements:
2.1 ( ) Premises Leased with existing improvements.
2.2 (X) Repairs/Improvements by Landlord to be completed for
Occupancy by April 1, 1997, excepting landscaping and
parking lot repairs which will be
<PAGE>
completed as weather permits, but no later than June 15,
1997. (As per Exhibit B and Section 2 of Part II attached,
which includes provision for a tenant improvement allowance
of $275,000). No later than December 20, 1996, Tenant will
provide Landlord with a complete Tenant's Scope of Work
which shall delineate those items which Tenant intends to
contract with Harold H. Hogg, Inc. to perform and which must
be completed prior to occupancy. Tenant will respond to
requests for information by Landlord's Contractor, Harold H.
Hogg, Inc., within five (5) business days of any such
request. Every day of delay past the five (5) days allowed
will be considered one (1) day of Tenant Delay as set forth
in Section 2.1 of Part II.
3. Term:
3.1 Number of Years: Ten (10) Years.
3.2 Term Begins: April 1, 1997, subject to adjustment pursuant to
Section 3.1 of Part II attached.
3.3 Term Ends: March 31, 2007, subject to adjustment pursuant to
Section 3.1 of Part II attached.
3.4 Purchase Option as per attached Rider.
3.5 Option to Renew as per Section 3.2 of Part II.
4. Rent:
4.1 Base Rent for Entire Term: $6,198,262.65
4.2 Monthly Installments (subject to adjustment pursuant to
Section 3.1 of Part II attached):
April 1, 1997 through July 31, 1997 - $22,604.17
August 1, 1997 through October 31, 1997 - $33,906.25
November 1, 1997 through March 31, 1999 -$45,208.33
April 1, 1999 through March 31, 2000 - $49,083.33
April 1, 2000 through March 31, 2001 - $50,555.83
April 1, 2001 through March 31, 2002 - $52,072.50
April 1, 2002 through March 31, 2003 - $53,634.68
April 1, 2003 through March 31, 2004 - $55,243.72
April 1, 2004 through March 31, 2005 - $56,901.03
April 1, 2005 through March 31, 2006 - $58,608.06
- 2 -
<PAGE>
April 1, 2006 through March 31, 2007 - $60,366.30
4.3 Intentionally Deleted.
4.4 Last Month's Rent: $32,604.17 paid by Tenant at signing of Lease
shall be credited toward the last month's rent. This payment
shall earn interest at a three percent (3%) annual rate
compounded monthly which also shall be credited towards the
Tenant's last month's rent.
4.5 Pre-Commencement Operating Expenses: Tenant's obligation to pay
Operating Expenses attributable to the Premises shall commence
February 1, 1997, however, Landlord agrees that the cost to the
Tenant for electrical service to the Premises will not exceed
$3,000 per month from February 1 through April 1 or the
completion of construction, whichever occurs last, any such
excess to be paid by Landlord. The only other exception shall be
the obligation to maintain and pay for liability and fire
insurance, which shall be the responsibility of the Landlord
until March 30, 1997.
5. Permitted Use: Office, R&D, light assembly, warehouse, wholesale sales
and storage.
6. First Right of Refusal: Tenant shall have the First Right of Refusal
to purchase the Building, exerciseable by Tenant within thirty (30)
days of Tenant's receipt of a copy of the bona fide offer received by
Landlord from another party on the same terms and conditions as the
offer. This right shall not apply to the sale or transfer of the
property to an entity in which Harold H. Hogg or Springwood Group,
Limited or their successors as general partner of Landlord (such
entity being and "Approved Entity") owns a controlling interest
provided that the sale or transfer of the property to the Approved
Entity is not done for the purpose of defeating Tenant's First Right
of Refusal.
- 3 -
<PAGE>
IN WITNESS WHEREOF, intending to be legally bound, the Landlord and Tenant
have caused this Part I presents to be signed by their duly authorized officers
or agents and their appropriate seals to be hereunto affixed, the day and year
first above written.
WITNESS: DONNERVILLE ASSOCIATES, "Landlord"
By: /s/ [ILLEGIBLE]
-------------------------------
Name: /s/ [ILLEGIBLE]
-------------------------------
Title: General Partner
/s/ [ILLEGIBLE]
____________________ By:
------------------------------
Name:
------------------------------
Title: General Partner
____________________ By:
-------------------------------
Name:
-------------------------------
Title: General Partner
WITNESS/ATTEST: GEOSYSTEMS GLOBAL CORPORATION
"Tenant"
/s/ [ILLEGIBLE]
____________________ By: /s/ BARRY J. GLICK
-------------------------------
Name: Barry J. Glick
-------------------------------
Title: President & CEO
- 4 -
<PAGE>
PART II
OF
LEASE DATED December 9,1996
between
DONNERVILLE ASSOCIATES, "Landlord" and
GEOSYSTEMS GLOBAL CORPORATION, "Tenant"
1. PREMISES.
The Landlord does hereby Lease unto the Tenant and the Tenant does hereby
lease from the Landlord the Premises with the improvements erected or to be
erected thereon, which is outlined in red on Exhibit "A", attached hereto and
made a part hereof, on the terms and conditions set forth in Parts I and II. The
rentable areas of the Building have been calculated on the basis of the
following definitions and it is hereby stipulated, absent manifest error, that
for all purposes of this Lease that the rentable areas are as set forth in Part
I of this Lease, whether the same be in fact more or less as a result of minor
variations resulting from actual construction and completion of the leased
premises for occupancy so long as such work is done in accordance with the terms
and provisions hereof.
In the event the Premises are part of a warehouse, flex building, business
center, or retail strip center, defined herein as a building where Tenants are
provided with their own private entrances, private restrooms and without any
interior common areas shared by Tenants, the "rentable area" shall refer to all
floor area measured from the outside surface of any exterior walls to the middle
of any demising walls.
2. IMPROVEMENTS
2.1 Tenant and Landlord agree that at the signing of this Lease, Tenant has
provided Landlord with all information necessary to prepare a Landlord's Scope
of Work for all build-out to be done by Landlord at Landlord's expense, and the
Landlord's Scope of Work is set forth in Exhibit B attached hereto. Landlord's
Scope of Work as described in Exhibit B (the "Landlord's Work") shall be
completed by or at the direction of Landlord, on or before April 1, 1997,
subject only to completion of "punch list" items agreed to in writing by
Landlord and Tenant, which items are not necessary for Tenant's reasonable use
and occupancy of the Premises ("Substantial Completion"). In the event the
Landlord's Work or Tenant's Scope of Work to the extent Tenant contracted with
Harold H. Hogg, Inc. to perform the same (the "Hogg Work") is not substantially
completed in a manner which would allow Tenant to occupy the Premises for its
intended use as aforesaid by April 1, 1997, Landlord will pay Tenant, except in
the case of Tenant caused delay (a "Tenant Delay"), the sum of $350 for each
business day completion of the Premises is delayed beyond May 1, 1997 (the "Per
Diem Damages"), such payment shall be tendered within
<PAGE>
thirty (30) days of occupancy of the Premises by Tenant. In the event Landlord's
Work or Hogg Work is not completed on or before May 1, 1997, Tenant shall have
the option of (a) completing Landlord's Work and the Hogg Work at the cost and
expense of Tenant, by using contractors and/or laborers of Tenant's choosing,
whereby any such reasonable expenses so incurred by Tenant and not repaid to
Tenant by Landlord within thirty (30) days of Tenant's delivery to Landlord of
an invoice therefor, shall be credited as an offset against Tenant's obligation
to pay rent hereunder, or (b) allowing Landlord to complete Landlord's Work and
accepting the Per Diem Damages. It is agreed that "reasonable expenses" shall
mean the actual cost to the Tenant of materials, labor, fringe benefits,
payments to subcontractors, and any sales taxeS or permit fees on same incurred
by Tenant in connection with performing Landlord's Work or Hogg Work.
"Reasonable expenses" does not include charges for management personnel of
Tenant who administer the work, the cost of utilities, any general allocations,
or any costs not directly related to the completion of Landlord's Work or Hogg
Work. Landlord's obligation to repay Tenant shall not arise until Tenant has
supplied Landlord with reasonable substantiation for all such charges. Should
the parties disagree on whether Tenant has supplied reasonable substantiation,
Tenant shall have the right of offset as set forth above pending the outcome of
mediation of the matter.
Landlord hereby indemnifies Tenant against any and all liability, claims,
actions or damages arising from the performance of Landlord's Work by Landlord,
its contractors or agents. Landlord shall procure and file a stipulation against
liens and all releases and waivers from mechanics liens prior to commencement of
Landlord's Work. Notwithstanding Tenant's agreement to assume the payment of
defined Operating Expenses effective February 1, 1997, such obligation shall not
extend to the payment of expenses attributable to Landlord's Work and Landlord's
activities within the Premises.
2.2 Landlord agrees to provide Tenant with a $275,000 construction
allowance to be used any way that Tenant desires. Such funds must be used within
the first three years of occupancy. Any funds not utilized by Tenant will be
applied to the monthly rent as directed by Tenant in writing and within thirty
(30) days of receipt of such direction by Tenant. Upon Tenant's presentation to
Landlord of paid receipts or invoices for work completed within or on the
Premises, Landlord shall reimburse Tenant for those expenses up to the maximum
construction allowance of $275,000.
The parties have agreed that the Tenant improvement allowance of $275,000
is to be spent on the following improvements: (1) complete carpet replacement;
(2) demolition, renovation, and/or build-out of the bottom-half of the Annex;
and (3) to the extent Tenant elects to do so, upon of the work described by the
"Tenant's Scope of Work" as outlined in Exhibits B-1 through B-5, as can be
performed and Tenant elects to cover with the $275,000 allowance. Landlord
hereby grants its consent to Tenant's Scope of Work. At Tenant's election,
Tenant may contract with Harold H. Hogg, Inc. to perform any of the work set
forth on Tenant's Scope of Work on a lump sum basis, as specified by Tenant as
set forth in Section 2.2 of Part I above. An itemized listing of the potential
work is listed in Exhibit B-1 through B-5.
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3. TERM.
Tenant shall have and hold the Premises for a ten (10) year term commencing
on the later to occur of April 1, 1997, or that date on which Landlord (or
Tenant, as the case may be) substantially completes construction of the
Landlord's Work and/or Hogg Work (less punch list items) as provided in Section
2 of Part II hereof (the "Commencement Date"). Notwithstanding the foregoing, in
the event Substantial Completion is delayed as a result of a Tenant Delay or a
delay associated with Tenant's unreasonable actions or inactions following
Tenant's take-over of Landlord's Work or the Hogg Work, the Commencement Date
shall not be delayed by that number of days attributable to such delays. If the
delay was due to the actions (or inactions) of both Landlord and Tenant, the
parties shall apportion the number of day delays between them by mutual
agreement. Should the parties be unable to agree, the matter shall be settled
through mediation.
In the event the Commencement Date is a day other than April 1, 1997, the
dates governing the monthly installments of rental due as set forth in Section
4.2 of Part I shall be adjusted accordingly, provided, however, that in the
event the Commencement Date falls on a day other than the first day of the
month, rental shall be apportioned for that first partial month at a per diem
rate so that the date designations as set forth in Section 4.2 shall always
reflect the first and last day of a month.
So long as Tenant is not in default of this Lease, Tenant shall have one
option to renew this Lease for an additional renewal term of three (3) years,
exerciseable by delivery of written notice to Landlord not later than the last
day of the ninth (9th) year of the Lease term. All terms and conditions of this
Lease shall apply to such renewal term except rent, which shall be established
prior to the first day of the renewal term at the then current fair market rent
for the area in which the Premises is located as determined by the mutual
agreement of the parties. This option expires and terminates on the last day of
the 9th year of the Lease Term. For purposes of this Lease, use of the word
"term" shall be deemed to include both the original ten (10) year term as well
as the three (3) year renewal term, to the extent applicable.
4. RENT.
4.1 Minimum Rent: The parties agree that the Minimum Rent (the "Rent") for
the Premises shall be as set forth in Section 4.1 of Part I, and so long as
Tenant is not in default Tenant shall pay such rent in the equal monthly
installments as set forth in Section 4.2 of Part I, in advance, on the first day
of each calendar month during the Term. In addition, Tenant shall pay Landlord,
without notice, demand, deduction or set-off, except as specifically set forth
herein, the Additional Rent (as hereinafter set forth) regardless of other
accommodations granted by Landlord to Tenant regarding the payment of minimum
annual rent. Landlord will promptly forward sewer bills to Tenant for payment.
4.2. Additional Rent: Tenant shall pay as additional rent, all Operating
Expenses (as hereinafter defined in 4.3 of Part II) related to the operation and
maintenance of or with respect to the Premises.
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4.3 Operating Expenses: Tenant agrees to pay as additional rent, in
addition to the base rental set forth in this Lease, the following expenses
(collectively, "Operating Expenses") which are necessary to effectively operate
and maintain the Premises: All Real Estate taxes, fees or assessments (excluding
any taxes, fees or assessments related to the future extension of Hempland
Road); all Fire, Casualty Liability, and Boiler Insurance Premiums attributable
specifically to the Premises and required to be maintained pursuant to Section
6.4 and 7 of this Lease; snow removal and lawn maintenance (as required pursuant
to Section 5.6); costs of water, sewer, gas, fuel, electricity and all other
utilities utilized by Tenant, janitorial service and trash removal (as required
pursuant to Section 5.5), including trash recycling as required by government
regulation, lighting costs and security as Tenant may from time to time deem
necessary, as well as the cost incurred by Tenant in connection with Tenant
performing the repairs and maintenance obligations imposed upon Tenant as set
forth in section 5.2 below.
5. UTILITIES AND SERVICES.
5.1 Utilities: Tenant shall be responsible for the payment of all
electricity, heating and air conditioning and water service utilized for the
normal use and occupancy of the Premises. Landlord reserves the right, without
any liability to Tenant, and without being in breach of any covenant of this
Lease, with as much prior notice to Tenant as is possible under the
circumstances, to interrupt or suspend service of any of the heating,
ventilating, air-conditioning, electric, sanitary, or other systems serving the
Premises, or the rendition of any of the other services required by Landlord
under this Lease, whenever and for so long as may be necessary by reason of
accident, emergencies, strikes or by reason of any other cause beyond Landlord's
reasonable control, excluding, however, difficulties resulting from failure to
pay the cost of such items, including without limitation mechanical failure and
governmental restrictions on the use of materials or the use of any of the
Building systems. With respect to the interruption or suspension of any required
service in connection with the making of repairs or changes which Landlord is
required by this Lease or by law to make or in good faith deems advisable,
Landlord agrees wherever possible to schedule such work outside of normal
business hours and in all cases to take such actions as are necessary to
minimize interference with Tenant's operations.
In each instance, however, Landlord shall exercise reasonable diligence to
eliminate the cause of interruption and to effect restoration of service as soon
as possible, and shall give Tenant reasonable notice under the circumstances,
and in all non-emergency situations at least 72 hours in advance of the
commencement and anticipated duration of such interruption. Except as
specifically set forth in Section 18.4(b) of this Part II, Tenant shall not be
entitled to any diminution or abatement of rent or other compensation or damages
nor shall this Lease or any of the obligations of the Tenant be affected or
reduced by reason of the interruption, stoppage or suspension of any of the
Building systems or services arising out of the causes set forth in this
paragraph so long as Landlord observes the terms of this section.
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5.2 Repairs: The Tenant shall at its sole cost and expense maintain in good
repair the Premises and every part thereof, including waste disposal systems,
and doors, excluding only the following which Landlord shall maintain in good
repair and to the extent necessary, replace, at Landlord's sole cost and
expense: heating, ventilating and air-conditioning systems ("HVAC"), roof,
skylights, foundation, exterior walls, downspouts and gutters, and damage
resulting from Landlord's failure to maintain the foregoing, provided, however,
that Tenant shall be required to make repairs to the HVAC, roof, foundation,
exterior walls, downspouts and gutters within thirty (30) days of written notice
by Landlord, if such repairs are occasioned by the negligence of Tenant, its
officers, employees, agents, customers or invitees, ordinary wear and tear
excepted. If Tenant requests that Landlord make the repairs on Tenant's behalf
or Landlord requires Tenant to perform repairs or maintenance which under the
terms of this Lease are Tenant's responsibility, Tenant shall pay the costs
associated with such repairs and maintenance, and they shall be considered as
additional rent. Tenant shall return the Premises in good condition and repair,
ordinary wear and tear excepted, and in a broom-clean condition upon expiration
of this Lease. In the event that Tenant fails to comply with any terms of this
paragraph then Landlord, following written notice to Tenant, shall undertake
such repairs and cleaning with Tenant being liable for all reasonable costs
thereof, including any expenses incurred by Landlord to enforce this provision,
whether they be court costs, reasonable attorneys' fees or any other cost of
collection and enforcement, and these costs shall be considered as Additional
Rent.
5.3 Heating Ventilation and Air Conditioning Maintenance and Repair.
(a) The Landlord shall perform at its sole cost and expense all preventive
and routine maintenance, repair and replacement of the heating, ventilation and
air conditioning equipment for the Premises during the entire term of Lease. The
Landlord shall procure and keep in effect at Landlord's sole cost a standard
preventive maintenance contract (see Exhibit "D"), on all heating, ventilating
and air conditioning equipment.
(b) Within thirty (30) days following the Commencement Date, Landlord, at
its expense, shall perform an air quality test on the HVAC system and deliver
the results of such test to Tenant. In the event the results of such test are
not reasonably satisfactory to Tenant, Landlord shall, at its sole cost and
expense, make the repairs or replacements necessary to provide air quality test
results which are satisfactory within thirty (30) days of the issuance of the
test results and Landlord shall then conduct a follow-up test confirming
satisfactory conditions within sixty (60) days of the date of the issuance of
the initial test results, which test results shall be delivered to Tenant.
5.4 Clean Condition: The Tenant shall keep the Premises in a clean,
sanitary and safe condition in accordance with the laws, ordinances and
regulations of the Federal Government, Commonwealth of Pennsylvania, and of the
Township in which the Premises is situated, provided, however, that such
obligation shall not impose upon Tenant any responsibility or liability to
perform those maintenance, repair and replacement obligations otherwise imposed
upon Landlord under the terms of this Lease. Tenant shall comply with all
requirements of law, ordinances and regulations, including those relating to
occupational safety and health, in connection with Tenant's business operations
within the
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Premises. Except for dumpsters, neither trash nor any other material or thing
shall be stored outside the Premises and storage in, or use of, above-ground
storage tanks is prohibited. Tenant may maintain storage trailers and other
similar storage facilities (excluding tanks) on the Premises provided such
facilities comply with all applicable laws. In the event the Tenant fails to
comply with any terms of this paragraph within thirty (30) days written notice
of said violation(s), then Landlord shall, following telephonic notice to
Tenant, undertake such steps which are necessary to rectify the violation(s)
with Tenant being liable for all cost thereof, including any penalty or fine(s)
associated with said violation(s) and any expenses incurred by Landlord to
enforce this provision, whether court costs, attorneys' fees or any other cost
of collection and enforcement. Tenant shall not be responsible for correcting
conditions on the Premises necessary to comply with the Americans With
Disabilities Act ("ADA") or laws relating to health, safety or the environment
if such conditions existed as of the Commencement Date of the Lease and were
then not in compliance with ADA or laws relating to health, safety or the
environment; rather, Landlord shall correct such conditions and be obligated to
bring the Premises into compliance with such laws at its sole cost and expense.
If the conditions did not exist as of the Commencement Date of the Lease or
did exist, but were then in compliance with laws relating to health, safety or
the environment (excluding ADA), Landlord shall nevertheless correct such
conditions and be obligated to bring the Premises into compliance with such laws
at its sole cost and expense, but may treat such expenses as "Operating
Expenses," to be passed through to Tenant, provided however, that the cost of
correction of such conditions shall be amortized over the useful life thereof,
together with interest at the actual interest rate incurred by Landlord in
connection with such cost of correction, and only that portion attributable to
any one Lease year shall be chargeable to Tenant as an Operating Expense in that
Lease year, and payable by Tenant within thirty (30) days of receiving an
invoice therefor.
5.5 Janitorial Service: Tenant shall contract for and pay for janitorial
services and the prompt removal of all trash from the Premises.
5.6 Snow Removal and Lawn Maintenance: Tenant shall mow lawns, trim
shrubbery, used where appropriate and remove snow from walkways, roadways and
parking areas in accordance with the minimum requirements set forth in Exhibit
6.
6. INSURANCE.
6.1 Fire Insurance. Tenant will not conduct or permit to be conducted, any
activity or place any equipment in or about the Premises, which will, in any
way, increase the rate of fire insurance or other insurance on the Premises;
provided, however, if any increase in the rate of fire insurance or other
insurance is stated by any insurance company or by the applicable Insurance
Rating Bureau to be due to any activity or equipment of, in or about the
Premises controlled by Tenant, such statement shall be conclusive evidence that
the increase in such rate is due to such activity or equipment of result
thereof, Tenant shall be liable for such increase in the cost of fire insurance,
or other
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insurance, which increase shall be considered additional rent payable hereunder,
and Tenant shall be responsible for the payment thereof
6.2 Indemnity: The Tenant covenants with the Landlord that Landlord shall
not be liable for any damage or liability of any kind or for any injury to or
death of persons or damage to property of Tenant or any other person during the
term of this Lease, by reason of the use, occupancy and enjoyment of the
Premises by the Tenant or any person thereon or holding under said Tenant,
absent Landlord's, its designated agents', servants' or employees' negligence or
willful misconduct. Tenant will indemnify and save harmless the Landlord from
all liability, on account of any such real or claimed damage or injury and from
all liens, claims and demands arising out of the Tenant's, its agents employees,
contractors, licensees, invitees and others on the Premises for or on behalf of
Tenant, use of the Premises and its facilities, or any repairs or alterations
which the Tenant may make upon said Premises, but the Tenant shall not be liable
for damage or injury occasioned by the negligence or willful misconduct of the
Landlord and its designated agents, servants or employees or latent defects on
the Premises of which Tenant has no knowledge. This obligation to indemnify
shall include reasonable attorney's fees and required investigation costs and
all other reasonable costs, expenses and liabilities from the first notice that
any claim or demand is to be made or any be made.
6.3 Waiver of Subrogation: Intentionally Deleted.
6.4 Tenant Insurance: Tenant further covenants and agrees that from and
after the delivery of the Premises from Landlord to Tenant, Tenant will carry
and maintain, at its sole cost and expense, in addition to fire insurance under
Section 7 below, the following types of insurance, the amounts specified and in
the form hereinafter provided for:
6.4.1 Public Liability and Property Damage: Public liability and
property damage insurance with a combined single limit of One Million
dollars ($1,000,000.00) insuring against any and all liability of the
insured with respect to said Premises or arising out of the maintenance,
use or occupancy thereof All such bodily injury liability insurance and
property damage liability insurance shall specifically insure the
performance by Tenant of the indemnity provisions as to liability for
injury to or death of persons and injury or, damage to property in this
Section 6 contained.
6.4.2 Tenant Improvements: Insurance covering all of the following
items, all leasehold improvements, trade fixtures, merchandise and personal
property from time to time in, on or upon the Premises, and personal
property, of others in Tenant's possession, in an amount not less than the
full replacement costs without deduction for depreciation from time to time
during the term of the Lease, providing protection against any peril
included within the classification "Fire and Extended Coverage," together
with insurance against sprinkler damage, vandalism and malicious mischief
Any policy proceeds shall be used for the repair or replacement of the
property damaged or destroyed as Tenant may elect.
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6.4.3 Policy Form: All policies of insurance provided for herein shall
be issued by insurance companies with general policyholders' rating of not
less than A and a financial rating of AAA as rated in the most current
available "Best's Insurance Reports," and qualified to do business in the
State of Pennsylvania, and shall be issued in the name of Tenant. Such
policies shall include Landlord and such other persons or firms as Landlord
specifies as an additional insured and as a certificate holder, and
executed copies of such policies of insurance or certificates hereof shall
be delivered to the Landlord no later than ten (10) days before delivery of
possession of the Premises to Tenant and thereafter no less than thirty
(30) days prior to the expiration of the term of such policy. In respect of
all public liability and property damage policies Landlord and such other
persons or firms as Landlord specifies from time to time, shall be entitled
to recovery under said policies for any loss occasioned to it, its
servants, agents and employees by reason of the negligence of the Tenant as
an additional insured and certificate holder. As often as any such policy
shall expire or terminate, renewal or additional policies shall be procured
and maintained by the Tenant in like manner and to like extent. All
policies of insurance delivered to the Landlord must contain a provision
that the company writing said policy will give to the Landlord twenty (20)
days' notice in writing in advance of any cancellation or lapse or the
effective date of any reduction in the amounts of insurance. All public
liability, property damage and other casualty policies shall be written as
primary policies, not contributing with and not in excess of coverage which
the Landlord may carry.
6.4.4 Failure of Tenant to Obtain: In the event that Tenant fails to
procure and/or maintain any insurance required by this Section, or fails to
carry insurance required by law or governmental regulation, Landlord may
(but without obligation to do so) at any time or from time to time, and
without notice (provided however, that notice and an opportunity to obtain
such insurance shall be given if the insurance is required by law, but not
specifically required by the terms of this Lease), procure such insurance
in which event Tenant shall repay the Landlord all sums so paid by
Landlord, together with interest thereon as provided in Section 20 hereof,
and any incidental costs or expenses incurred by Landlord in connection
therewith, within ten (10) days following Landlord's written demand to
Tenant for such payment. In case Landlord procures insurance under this
section, it will notify Tenant of its doing so within thirty (30) days, but
its failure to give' notice will not affect Tenant's obligation to insure
under this Lease.
6.5 Blanket Policy: Notwithstanding anything to the contrary contained
within this Section 6, the Tenant's obligations to carry the insurance provided
for herein may be brought within the coverage of a so called blanket policy or
policies of insurance carried and maintained by the Tenant; provided, however,
that the Landlord and others hereinabove mentioned shall be named as an
additional insured thereunder as their interests may appear and that the
coverage afforded the Landlord will be not reduced or diminished by reason of
the use of such blanket policy of insurance, and provided further that the
requirements set forth herein are otherwise satisfied. The Tenant agrees to
permit the Landlord at all reasonable times to inspect the policies of insurance
of the Tenant covering risks upon the Premises for which policies or copies
thereof are not required to be delivered to the Landlord.
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7. FIRE INSURANCE.
Landlord shall procure and maintain in full force and effect until March
30, 1997, non-assessable fire and extended coverage insurance policies.
Commencing on March 30, 1997, and throughout the entire Term, Tenant shall
procure and maintain in full force and effect, standard fire and extended
coverage insurance insuring the Premises for the full replacement value thereof,
but in no event less than $3,500,000 against all risks of direct physical loss
and which insurance shall include protection against those occurrences covered
by standard "extended coverage" clause. Such policies shall name Landlord as the
insured, as well as Landlord's mortgagee, if so requested by Landlord. In the
event of loss, insurance proceeds shall be held in escrow by Landlord's
mortgagee, if any, and otherwise by an escrow agent selected by Landlord pending
repair of the damages by Landlord, and upon completion of the repairs by
Landlord, the proceeds shall be paid to Landlord or paid to Landlord's mortgagee
if required by it. In the event Landlord or Tenant elects to terminate the Lease
on account of fire or other casualty as hereinafter provided, insurance proceeds
shall be paid immediately to Landlord or its mortgagee if required by it.
Without affecting Tenant's obligations under this Lease to carry insurance,
Landlord agrees to maintain liability insurance covering Landlord in an amount
and with companies which meet the requirements of Section 6.4.1 and 6.4.3 of
this Part II.
8. USE OF BUILDING.
The parties hereto agree that the Premises will be used only for the
permitted /use set forth in SectionS of Part land uses incidental thereto.
Tenant shall not permit the Premises to become vacant unless and until Tenant
provides for biweekly security checks, at Tenant's sole cost and expense, for
the duration of such vacancy.
9. ALTERATIONS.
Tenant shall not make any alterations, additions or improvements to the
Premises without the prior obtained written consent of Landlord, which consent
will not be unreasonably withheld or delayed. Landlord hereby grants its consent
to the alterations set forth on Exhibit B. In no event shall any such
alteration, addition, or improvement weaken the structure of or impair any
Building on the Property. Any alteration, addition, or improvement to the said
Premises shall be done in accordance with the applicable City or Township,
County and State laws and ordinances, and building and zoning rules and
regulations. Tenant hereby expressly assumes full responsibility for all damages
and injuries which may result to any person or property by reason of or
resulting from alterations, additions, or improvements made by it to the
Premises, and shall hold Landlord harmless with respect thereto. Tenant shall
procure and file a stipulation against liens and all releases and waivers from
Mechanics Liens prior to commencement of any construction at the Property, and
copies of said stipulations, releases and waivers shall be delivered to Landlord
not later than forty-eight (48) hours prior to commencement. All alterations,
shall remain on the Premises at the termination of the Lease and shall become
the property of the Landlord, unless at the time the consent for the alteration
was given by Landlord, the Landlord directed the alterations be removed at the
termination of the Lease in which event they shall be
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removed and the Premises shall be returned, at the expense of Tenant, to its
condition prior to the alteration. All machines, equipment, and supplies to be
placed upon the Premises by the Tenant and not included on the plans and
specifications for the Building shall remain the property of the Tenant and
shall be removed by Tenant at the termination of the Lease; but the Tenant
agrees to repair any damage to the Premises caused by the removal of such
machines, equipment, or supplies. Notwithstanding anything contained in this
section to the contrary, prior written consent of Landlord shall not be required
for any alteration or course of alterations made within any one (1) calendar
year that have an aggregate value of less than $10,000.
10. SIGNS AND EXTERIOR ATTACHMENTS.
10.1 Signs: Tenant, at its cost, will obtain and maintain in good repair
any exterior signage Tenant installs on the Premises. All signage will comply
with all applicable laws, ordinances, codes and regulations.
10.2 Exterior: Intentionally Deleted.
10.3 Interior: Tenant shall have the right, at its sole cost and expense,
to erect and maintain within the interior of the Premises all signs and
advertising matter customary or appropriate in the conduct of Tenant's business.
10.4 Windows: Tenant shall at all times maintain all windows on the
Premises in a neat, clean and orderly condition.
10.5 General Appearance. Tenant acknowledges the appearance of the Premises
affects the value of other nearby real estate and that Landlord has a direct
economic interest in the appearance of the Premises. Accordingly, Tenant shall
keep the exterior of the Premises in a neat and orderly condition in accordance
with Tenant's obligations under the terms of this Lease.
11. FIRE OR CASUALTY.
In case of damage to the Premises by a risk insured against under Paragraph
7 of this Part II, Landlord, unless the Lease is terminated as hereinafter
provided, shall repair or cause to be repaired such damages with reasonable
dispatch after receiving from the Tenant written notice of the damage. If the
damage is such as to render the Premises untenantable, the rent shall be abated
to an extent corresponding with the period during which and the extent to which
the Premises have become untenantable; provided, however, if such damage is
caused by the negligence or willful misconduct of Tenant or of a subtenant, or
the agents, employees, visitors, invitees or licensees of Tenant or of a
subtenant, then notwithstanding such damage and untenantability, Tenant shall be
liable for rent without abatement. In the event of damage to the Premises to the
extent that more than fifty (50%) percent of the value of such Premises, Tenant
shall give Landlord written notice of the damage, (but failure to give notice
shall not be binding upon Landlord) after which Tenant may determine with
reasonable dispatch whether the Lease shall be terminated, and, if
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terminated, all rent shall abate and the Lease terminate as of the date of the
occurrences of the event causing such damage. Notwithstanding anything contained
herein to the contrary, Landlord shall have no obligation to rebuild the
Premises in case of damage to the Premises occurring in the tenth year of the
Lease term, which damage would reasonably take more than six (6) months to
restore, or if following a reasonable period of time for restoration, would
leave less than four (4) months remaining in the unexpired Term of this Lease.
Should Landlord elect not to rebuild under such circumstance, and Tenant elect
to terminate this Lease, this Lease shall terminate as of the date of the
casualty except that Tenant shall have a reasonable time thereafter to remove
its equipment, personal property and the like from the Premises.
12. EMINENT DOMAIN.
The Tenant may at its option terminate this Lease if any portion of the
Premises is condemned by any governmental body or by any other body or
organization possessing the power of condemnation provided such condemnation
substantially impairs the use or enjoyment by Tenant of the Premises. In case of
the taking through eminent domain of all, or any portion, of the Premises, the
Landlord shall notify the Tenant in writing of such taking. Within sixty (60)
days after receipt of such written notice, the Tenant shall notify the Landlord,
in writing, whether such taking through eminent domain, in the opinion of the
Tenant substantially impairs its use or enjoyment of the Premises. If Tenant's
use or enjoyment is substantially impaired, then Tenant shall given written
notice to Landlord of its intent to vacate the Premises, which notice shall
include the time when it desires to terminate /the Lease, which time shall not
be later than the date on which title vests in the condemning authority. The
failure of the Tenant to give notice set forth above as required and within the
time limit set forth above, shall be conclusively construed as a decision on the
Tenant's part that such taking does not substantially impair its use or
enjoyment of the Premises, unless the taking is a total taking. On the other
hand, the giving of such notice by the Tenant does not bind the Landlord as to
the correctness of the Tenant's decision that its use or enjoyment of the
Premises is substantially impaired by the taking, and Landlord may object to
same and demand a decision be made by mediation. In the event Tenant does not
terminate this Lease as aforesaid, Landlord shall promptly restore the balance
of the Premises remaining after the taking. Tenant shall not be entitled to
receive any part of any award or awards that may be made to or received by
Landlord, relating to the fair market value of the real estate taken or
severance damage to the remaining real estate of Landlord. Tenant at its expense
may take independent proceedings against the public authority exercising the
power of eminent domain to prove and establish any damage Tenant may have
sustained relating to Tenant's business and relocation expenses.
13. TOXIC WASTES, ETC.
13.1 Tenant shall not place, locate on, or use any portion of the Premises
for the production, storage, deposit or disposal of toxic, dangerous or
hazardous substances or pollutants, including, but not limited to, nuclear fuel
or wastes in violation of any applicable law or governmental regulation, which
substances or pollutants, if found upon the Premises or if found elsewhere, in a
form which violated applicable law, and determined to
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have come from the Premises in violation of any applicable law or governmental
regulation, would subject Landlord to any damages, penalties or liabilities
under any applicable federal, state or local law, or under any civil action.
13.2 Tenant shall not bury or place any underground storage tanks on the
Premises whether or not such storage tanks would be subject to the jurisdiction
of the Environmental Protection Agency under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 and the Resource Conservation
and Recovery Act, as amended.
13.3 Tenant shall not place on or within the Premises in violation of any
applicable law or governmental regulation, any hazardous material including, but
not limited to, ureformaldehyde foam insulation, polychlorinated biphenyls and
asbestos.
13.4 Tenant shall indemnify, defend and hold harmless Landlord, its
successors and assigns from and against any and all claims, legal or equitable,
damages, liability or loss (including reasonable attorneys' fees) arising out of
or in any way connected to any condition caused or created by the Tenant's
failure to comply with Sections 13.1, 13.2 and 13.3 during any portion of the
Lease term as set forth in Sections 3.2 and 3.3 of Part I, including, but not
limited to, damage liability or loss under all federal, state and local
environmental laws, strict liability and common law.
13.5 Landlord shall indemnify, defend and hold harmless Tenant, its
successors and assigns, from and against any and all claims, legal or equitable
damages, liability, or loss (including reasonable attorneys' fees) under
federal, state or local environmental laws, where Tenant's liability thereunder
is solely due to Tenant's Lease of the Premises, arising from (a) any condition
existing on the Premises prior to the date of Tenant's occupancy of the
Premises, or (b) Landlord's failure prior to the date of Tenant's occupancy of
the Premises to perform its obligations under federal, state or local
environmental laws in respect of the Premises.
14. NON-LIABILITY OF LANDLORD.
(a) The Landlord shall not be liable to the Tenant, any officer, employee,
agent, invitee, licensee or visitor of the Tenant, or any other person, for
damage or injury to any person or property caused in whole or in part, by any
act, omission or neglect of the Tenant, its contractor, employees or agents,
invitee, licensee, or visitor, or any happening in any manner on the Premises
and Tenant shall indemnify, defend and hold harmless Landlord from claim, loss
or liability therefor provided, however, Landlord shall be liable for its, and
its designated agents, servants and employees own negligence or willful
misconduct.
(b) All property kept, stored or maintained on the Premises shall be so
kept, stored or maintained at the risk of the Tenant only, and the Landlord
shall not be liable for any loss or damage to the Tenant or his property.
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(c) Landlord's liability to Tenant or anyone claiming through Tenant shall
be limited to Landlord's interest in the Premises. The foregoing shall be
absolute and without exception whatsoever.
15. SUBLEASE.
15.1 The Tenant shall not have the right to sell, assign, transfer,
mortgage or pledge the Premises without the Landlord's prior written consent,
which consent shall not be unreasonably withheld or delayed. In the event the
Tenant proposes to sublease or sublet the Premises or any portion thereof,
Tenant shall give to Landlord its written notice, which notice shall set forth
(i) the identity, business and financial condition of the proposed sub-tenant,
(ii) the terms and conditions of the proposed sublease, and (iii) and any other
relevant information reasonably requested by Landlord. Unless Landlord shall
expressly agree in writing to the contrary, no assignment or sublease shall
modify or limit any right or power of Landlord hereunder or affect or reduce any
obligation of Tenant hereunder. In the event that the proposed sublease is of a
portion of the Premises, and Landlord consents to the sublease, the rent in this
lease shall be prorated between the portion proposed to be subleased and the
balance of the Premises on a square foot basis. Tenant shall pay any costs
associated with or resulting from any proposed sublease of the Premises.
Landlord and Tenant hereby agree that the requirement that Tenant obtain
Landlord's consent prior to mortgaging the Premises does not limit Tenant's
right to, or require Tenant to obtain the consent of Landlord in the event
/Tenant elects to finance Tenant's personal property, equipment, trade fixtures,
accounts receivable or other property.
15.2 Tenant shall pay all of Landlord's reasonable cost and expenses
(including attorneys' fees) in connection with Landlord's review of any proposed
subletting or assignment.
15.3 Notwithstanding the provisions of Section 15.1 as they apply to
subleasing, Tenant hereby agrees to assume the reasonable costs associated with
obtaining the local government's consent to a requested subleasing, including
the cost of any related development requirements, should such consent or
development requirements be required, provided however, that Tenant may withdraw
its request to sublease, in the exercise of its sole discretion, if the
estimated cost of obtaining such consent and the related development
requirements is not acceptable to Tenant. To the extent Tenant agrees to assume
such costs or a waiver of any applicable land development plan, processing is
granted by the local government with respect to such sublease, Landlord may not
withhold its consent to such subleasing. In the event such government approvals
are required, Landlord agrees to cooperate with Tenant in connection with
obtaining such approvals.
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16. VOLUNTARY OR INVOLUNTARY ASSIGNMENT.
(a) Neither this Lease nor any interest therein shall be assignable or
otherwise transferable by operation of law or by voluntary assignment to or for
the benefit of creditors without the written consent of the Landlord, and such
inhibition against voluntary assignment includes and comprehends any and every
assignment which might otherwise be affected or accomplished by bankruptcy,
receivership, attachment, execution or other judicial process or proceeding. If
any assignment for the benefit of its creditors should be made by the Tenant, or
if a voluntary or involuntary petition in bankruptcy, or for reorganization, or
for an arrangement should be filed by or against the Tenant, or if the Tenant
should be adjudicated a bankrupt or insolvent, or if a receiver is appointed of
or for the Tenant, or for all or substantially all of its assets, or if any such
assignment or transfer by operation of law should occur, then and in any such
event, the Landlord may at its option, terminate this Lease by notice to the
Tenant if any such involuntary petition or assignment is not discussed with
sixty (60) days. The provisions of this paragraph shall not apply to any of the
rights, titles and interest of the Landlord in, to or under this Lease.
(b) So long as Tenant is not in default of this Lease, notwithstanding
anything contained in this Lease to the contrary, Tenant shall, without the
prior written consent of Landlord, have the right to assign this Lease to any
parent, subsidiary or affiliate of Tenant, or any other entity which acquires
all, or substantially all, of Tenant's business by sale, merger or otherwise,
except as may be specifically prohibited in Section 16 hereof, and provided
further, such entity acquiring all or substantially all of Tenant's business
possesses equal or greater creditworthiness than Tenant in the exercise of
Landlord's reasonable judgment and Tenant provides reasonable written evidence
of such creditworthiness to Landlord.
17. SURRENDER AT LEASE TERMINATION.
The Tenant shall, upon the termination of the Term of this Lease, surrender
to the Landlord the Premises, ordinary wear and tear excepted, and all building
apparatus, machinery, equipment and fixtures situated thereon except items which
may be removed under Section 9 of Part II. All alterations, improvements, and
other additions made or installed by either party to, in, upon, or about the
Premises shall either be removed by Tenant under Section 9 of Part II or become
the property of the Landlord pursuant to Section 9, and if Landlord elected to
keep the same they shall be surrendered to the Landlord by the Tenant in good
condition or repair, ordinary wear and tear excepted, otherwise Tenant shall
repair any damage caused by removal. The Tenant waives notice to quit at the end
of the Term or at the termination of the Lease for any cause, except as may be
specifically set forth herein.
18. DEFAULT OF TENANT.
18.1 Events of Default: If Tenant shall (i) fail to pay any monthly
installment of rent (as required by Section 4 hereof) or shall fail to timely
make any other payment required by the terms and provisions hereof and shall
continue in default of such payment for a period often (10) days after written
notice thereof is given by Landlord, or
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(ii) violate or fail to perform any other terms, conditions, covenants or
agreements herein made by Tenant and shall continue in default of such term,
condition, covenant or agreement for a period of thirty (30) days after written
notice thereof is given by Landlord, or if Tenant commences a cure and is
diligently proceeding to complete such cure, the aforesaid thirty (30) day
period will be extended as reasonably required to complete such cure, or (iii)
abandon or vacate the Premises and fail to provide the security checks required
by Section 8 hereof, or (iv) make or consent to an assignment for the benefit of
creditors or a common law composition of creditors, or a receiver of Tenant's
assets is appointed, or Tenant files a voluntary petition in any bankruptcy or
insolvency proceeding, or an involuntary petition in any bankruptcy or
insolvency proceeding is filed against Tenant and not discharged by Tenant
within sixty (60) days, or adjudicated a bankrupt, then Tenant shall be deemed
to have committed an Event of Default, and not withstanding any other remedies
allowable by law, and in any of said events, this Lease shall, at the option of
Landlord, cease and terminate and the provisions of this Section 18 shall
automatically operate as a notice to quit (any notice to quit, or of Landlord's
intention to re-enter, being expressly waived) and Landlord may proceed to
recover possession under and by virtue of the provisions of the Laws of the
Commonwealth of Pennsylvania or by such other proceedings, including reentry and
possession, as may be applicable.
Should this Lease be terminated before the expiration of the term of this
Lease by reason of Tenant's default as hereinabove provided, the Premises may be
relet by Landlord for such rent and upon such terms as are not unreasonable
under the circumstances and, if the full rental hereinabove provided and any of
the costs, expenses, or damages indicated below, shall not be realized by
Landlord, Tenant shall be liable for all damages sustained by Landlord,
including without limitation, deficiency in rent, reasonable attorneys' fees,
brokerage fees, and reasonable expenses of placing the Premises in first class
rentable condition, normal wear and tear excepted.
Any damage or loss of rent sustained by Landlord may be recovered by
Landlord, at Landlord's option, at the time of the reletting, or in separate
actions, from time to time, as said damage shall have been made more easily
ascertainable by successive relettings, or, at Landlord's option may be deferred
until the expiration of the term of this Lease, in which event Tenant hereby
agrees that the cause of action shall not be deemed to have accrued until the
date of expiration of said term.
18.2 Landlord's Remedies:
(a) Upon the occurrence of an Event of Default hereunder, Landlord, at
Landlord's sole option, shall have the right to exercise any or all of the
remedies set forth herein, all of which shall be cumulative and in addition to
any and all rights and remedies now or at any time hereafter provided at law or
in equity. The exercise of any one or more remedies provided herein shall not
act as a waiver of or preclude exercise of any other right or remedy of
Landlord.
(b) Upon the occurrence of an Event of Default hereunder, Landlord may
declare the entire rent for the balance of the term immediately due and
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payable. Said rent shall be discounted back to present value using the five (5)
year U.S. Treasury Bond rate in effect at the date of default.
(c) Upon the occurrence of an Event of Default hereunder, Landlord shall
have the right immediately and without notice to Tenant to terminate the term of
this Lease whereupon the estate hereby granted shall expire and terminate on the
date of such Event of Default or such later date as Landlord shall, in its sole
discretion determine, as fully and completely and with the same effect as if
such date were the date herein fixed for the expiration of the term of this
Lease, and all rights of Tenant hereunder shall expire and terminate, but Tenant
shall remain liable for all amounts due to Landlord hereunder, including but not
limited to the entire amount of rent including additional rent for the unexpired
balance of the Term discounted back to present value in accordance with
subsection (b) above.
(d) Upon the occurrence of an Event of Default hereunder, Landlord shall
have the immediate right to reenter and repossess the Premises by summary
proceedings, ejectment or in any manner Landlord determines to be necessary or
desirable and Landlord shall have the right to remove all persons and property
therefrom. Landlord shall be under no liability by reason of any such re-entry,
repossession or removal. No such reentry or repossession of the Premises shall
be construed as an election by Landlord to terminate the term of this Lease
unless a written notice of such intention is given to Tenant pursuant to this
paragraph, or unless such termination is decreed by a court of competent
jurisdiction.
(e) For the purpose of obtaining possession of the Premises in the event of
any Event of Default hereunder, Tenant hereby authorizes and empowers, sixty
(60) days after the expiration of the notice and cure period given to Tenant for
Tenant's default, any attorney or the Prothonotary or clerk of any court of
record in the Commonwealth of Pennsylvania or elsewhere, as attorney for Tenant,
to sign an agreement for entering in any competent court an amicable action or
actions in ejectment for possession of the Premises and to appear for and
confess judgment against Tenant, and against all persons claiming under or
through Tenant, in favor of Landlord, for recover of possession thereof, for
which this Lease, or a copy thereof verified by affidavit, shall be a sufficient
warrant; and thereupon a writ of possession may immediately issue for possession
of the Premises, without any prior writ of proceeding whatsoever and without any
stay of execution. If for any reason after such action has been commenced it
shall be discontinued, or possession of the Premises shall remain in or be
restored to Tenant, Landlord shall have the right for the same default or any
subsequent default to bring one or more further amicable actions as above
provided to recover possession.
(f) Tenant hereby irrevocably authorizes and empowers, sixty (60) days the
expiration of the notice and cure period given to Tenant for Tenant's default,
any attorney or the Prothonotary or clerk of any court of the Commonwealth of
Pennsylvania, or elsewhere, to appear as attorney for Tenant in any action
brought against Tenant on this Lease at the suit of Landlord to confess or enter
judgment against Tenant for all rent, additional rent and other amounts due from
Tenant to Landlord pursuant to the terms
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of this Lease, together with costs of suit and attorneys' commission of five
percent (5%) for collection (provided the amount collected shall not be in
excess of actual attorneys fees incurred), and for so doing this Lease or a copy
hereof verified by affidavit shall be of sufficient warrant. The authority
granted herein to confess judgment shall not be exhausted by any exercise
thereof and shall continue from time to time and at all times until payment in
full of all amounts due to Landlord hereunder, including but not limited to all
rent and additional rent hereunder.
(g) At any time or from time to time after the reentry or repossession of
the Premises, whether or not the term of this Lease shall have been terminated,
Landlord may (but shall be under no obligation to) relet the Premises for the
account of Tenant, in the name of Tenant or Landlord or otherwise, without
notice to Tenant, for such term or terms and on such conditions and for such
uses as Landlord, in its reasonable discretion may determine. Landlord may
collect and receive any rents payable by reason of such reletting. Landlord
shall not be liable for any failure to relet the Premises or for any failure to
collect any rent due upon any such reletting.
(h) No expiration or termination of the term of this Lease by reason of the
occurrence of an Event of Default and no reentry or repossession of the Premises
by reason of an Event of Default shall relieve Tenant of its obligations and
liabilities hereunder, all of which shall survive such expiration, termination,
reentry or reletting.
18.3 Waiver: No waiver by Landlord of any breach of any covenant, condition
or agreement herein contained shall operate as a wavier of any subsequent breach
thereof No payment by Tenant or receipt by Landlord of a lesser amount than the
monthly installment of rent herein stipulated shall be deemed to be other than
on account of rent, nor shall any endorsement or statement on any check or
letter accompanying a check for payment of rent be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice to
landlord's right to recover the balance of such rent or to pursue any other
remedy provided in this Lease. Payment received by Landlord when Tenant is in
arrears shall be applied to amounts owed by Tenant as Landlord determines. No
re-entry by Landlord, and no acceptance by landlord of keys from Tenant, shall
be considered an acceptance of a surrender of the Lease.
18.4 Right of Each Party to Cure the Other Party's Default:
(a) If Tenant defaults in the making of any payment or in the doing of any
act herein required to be made or done by Tenant beyond any applicable notice
and cure period, then Landlord may, but shall not be required to, make such
payment or do such act, and charge the amount of the expense thereof, if made or
done by Landlord, with interest thereon at the rate defined in Section 20 from
the date paid by Landlord to the date of payment thereof by Tenant and such
charge or expense and interest thereon shall be Additional Rent hereunder;
provided, however, that nothing herein contained shall be construed or
implemented in such a manner to allow Landlord to charge or receive interest in
excess of the maximum legal rate then allowed by law. Such payment and interest
shall
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constitute additional rent hereunder due and payable with the next monthly
installment of rent, but the making of such payment or the taking of such action
by Landlord shall operate to cure such default unless Tenant is otherwise in
default of the Lease.
(b) If Landlord defaults in the doing of any act herein required to be done
by Landlord pursuant to the terms of Sections 5.1, 5.2, 5.3 or 5.4 of this Part
II for more than ten (10) days beyond delivery of written notice of such default
to Landlord by Tenant, and Landlord's default is of such a nature that (i) it
materially interferes with Tenant's ability to conduct its business in the
Premises, or (ii) failure to immediately correct such default or take such
curative action would lead to material interference with Tenant's ability to
conduct its business in the Premises, Tenant shall have the right, but not the
obligation to do such act at Tenant's expense, whereby any reasonable expenses
so incurred by Tenant and not repaid to Tenant by Landlord within thirty (30)
days of Tenant's delivery to Landlord of reasonable substantiation therefor,
shall be credited as an offset against the rent otherwise due by Tenant.
Notwithstanding the foregoing, Tenant shall have no such limited cure and offset
right if within such ten (10) day period, Landlord commences and diligently
performs to completion the requested act as required by the terms of this Lease.
For purposes of this Section, "reasonable expenses" shall be defined as set
forth in Section 2.1(a) of Part II and any disagreement between Landlord and
Tenant as to whether the expenses so incurred are "reasonable expenses" shall be
handled pursuant to the procedure set forth in Section 2.1(a) of Part II.
18.5 Late Payments: If Tenant fails to pay any installment of rent (in
accordance with Section 4) by the tenth (10th) day of the calendar month, or ten
(10) days after such installment has become due and payable, Tenant shall pay to
Landlord a late charge of five percent (5%) of the amount of such installment,
and, in addition, such unpaid installment shall bear interest at the rate
defined in Section 20, from the date such installment becomes due and payable to
the date of payment thereof by Tenant; provided, however, that nothing herein
contained shall be construed or implemented in such a manner as to allow
Landlord to charge or receive interest in excess of the maximum legal rate then
allowed by law. Such late charge and interest shall constitute additional rent
hereunder due and payable with the next monthly installment of rent.
19. HOLDING OVER.
In the event that Tenant shall not immediately surrender the Premises on
the date of expiration of the term hereof, Tenant shall, by virtue of the
provisions hereof, become a tenant by the month at 125% of the monthly rent for
the immediately preceding month, including all additional rent in effect during
the last month of the term of this Lease, which said monthly tenancy shall
commence with the first day next after the expiration of the term of this Lease.
Tenant, as a monthly tenant, shall be subject to all of the terms, conditions,
covenants and agreements of this Lease. Tenant shall give to Landlord at least
thirty (30) days written notice of any intention to quit the Premises, and
Tenant shall be entitled to thirty (30) days written notice to quit the
Premises, unless Tenant is in default hereunder, in which event, Tenant shall
not be entitled to any notice to quit, the usual thirty (30) days notice to quit
being hereby expressly waived. In the event that Tenant shall hold over after
the
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expiration of the possession of the Premises promptly at the expiration of the
term of this Lease, then at any time prior to Landlord's acceptance of rent from
Tenant as a monthly tenant hereunder, Landlord, at its option, may forthwith
re-enter and take possession of the Premises without process, or by any legal
process in force in the State of Pennsylvania.
20. INTEREST AND COLLECTION EXPENSES.
Interest shall accrue on any monies due from Tenant to Landlord from the
date the same are due (including rent and money advanced by Landlord to others
on account of the failure of Tenant to perform hereunder) at the rate of one
percent (1%) per month until the same is paid and Tenant shall pay the interest
upon demand. If Landlord consults any attorney for the collection of any sums
due from Tenant or otherwise in connection with Tenant's performance hereunder,
Tenant shall, whether or not proceedings are instituted, reimburse Landlord the
reasonable attorney fees and court costs, if any.
21. NON-DISTURBANCE.
21.1 Estoppel Certificate. Within ten (10) days after request therefore by
Landlord, or in the event that upon any sale, assignment, mortgage or
encumbrance of the Premises and/or the land thereunder by Landlord, an estoppel
certificate shall be required from Tenant; Tenant agrees to deliver in
recordable form a certificate to any proposed mortgagee or purchaser, or to
Landlord, certifying (if such be the case) that this Lease is in full force and
effect and that there are no defenses or offsets thereto, or stating those
claimed by Tenant.
21.2 Attornment. Tenant shall, at the request of any first mortgagee or
purchaser of the Premises attorn to such mortgagee or purchaser, provided Tenant
has been granted a non-disturbance agreement by the mortgagee.
21.3 Subordination. Tenant's rights, including without limitation any
option to purchase the Premises hereunder are subordinate to the lien of any
mortgage or mortgages, or the lien resulting from any other method of financing
or refinancing, now or hereafter in force against the land and/or buildings of
the Premises or any part thereof, and to all advances made or hereunder to be
made upon the security thereof, provided, however, and on the condition that
Tenant is granted in all such cases a non-disturbance agreement from any such
mortgagee or lienholder which recognizes Tenant and its rights under this Lease.
Regardless of the self operating provision of this Paragraph, if a prospective
mortgagee requests the Tenant to sign a subordination agreement, the Tenant
shall do so promptly subject to the terms set forth herein.
21.4 Limited Attorney-in-Fact. In the event Tenant fails to execute such
instruments or certificates to carry out the intent of Paragraphs 21.1, 21.2 and
21.3 referenced above within (a) fifteen (15) days of Landlord's first written
request to execute such instruments or certificates and (b) five (5) days after
Landlord's second written request to execute such instruments or certificates,
then Tenant hereby irrevocably appoints
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Landlord as Attorney-in-Fact for Tenant with full power and authority to execute
and deliver in the name of the Tenant any such instruments or certificates.
21.5 Submissions Requested by Landlord's Mortgagee. Tenant agrees to
promptly provide periodic financial statements, and such other financial
information as may be reasonably requested by any mortgagee of the Premises, no
more frequently than annually.
22. ADDITIONAL INSTRUMENTS.
Tenant shall, at the request of Landlord, execute such additional
instruments Landlord's mortgagee may request from time to time or as may be
required or convenient hereunder not inconsistent herewith. To the extent Tenant
signs a Memorandum of Lease, the recording of such Memorandum shall be at the
sole cost and expense of Landlord.
23. LANDLORD'S COVENANT OF TITLE AND QUIET ENJOYMENT.
Landlord covenants and warrants that upon the term of the Lease commencing,
it shall have full right and lawful authority to enter into this Lease for the
full Term hereof, and that Landlord will be lawfully seized of the entire
Premises and will have good title thereto and that at all times when Tenant is
not in default under the Terms and during the Term of this Lease, Tenant's quiet
and peaceable enjoyment of the Premises shall not be disturbed or interfered
with by anyone. Landlord, in person or by agent, shall be permitted to enter
upon the Premises at reasonable times to examine the same or to make such
repairs as are required hereunder with 24 hour telephonic notice and accompanied
by an employee of Tenant, unless in the case of an emergency.
24. WAIVER OF TRIAL BY JURY.
It is mutually agreed by and between Landlord and Tenant that the
respective parties hereto shall and they hereby do waive trial by jury in any
action, proceeding or counterclaim brought by either of the parties hereto
against the other on any matter whatsoever arising out of or in any way
connected with this Lease, the relationship of Landlord and Tenant, Tenant's use
of or occupancy of the Premises and/or any claim of injury or damage and any
emergency or any other statutory remedy. It is further mutually agreed that in
the event Landlord commences any summary proceeding for non-payment of rent,
Tenant will not interpose any counterclaim of whatever nature or description in
any such proceeding.
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25. LANDLORD RIGHT OF ENTRY.
Landlord shall have the right, during the last twelve (12) months of the
term herein provided, to place on any portion of the Premises signs or
bill-boards indicating that the Premises are "For Sale" or "For Rent," but such
signs shall be of such size and so placed as not to materially interfere with
Tenant's occupancy. During said period, interested persons shall be admitted at
reasonable business hours of the day to view the Premises.
26. CHANGE IN OWNERSHIP.
Tenant agrees that in the event that the Premises or any part thereof is
sold, or in the event of any change of legal title or equitable ownership, that
all obligations herein undertaken by Landlord, including but not limited to, the
obligation for the return of any advance rent payment paid hereunder, shall be
transferred to such purchaser or assignee, and in such event all of Landlord's
obligations shall terminate and Landlord shall be released and relieved from all
liability and responsibility to Tenant hereunder and Tenant shall look solely to
such purchaser or assignee for the performance of said obligations or for the
enforcement thereof Each purchaser or assignee shall in turn have like
privileges of sale, assignment and release.
27. SUCCESSORS AND ASSIGNS.
This Lease shall inure to the benefit of and shall bind the heirs,
successors and assigns of the parties to the extent that the parties' rights
hereunder may succeed and be assigned according to the terms hereof
28. DESCRIPTIVE HEADINGS.
The descriptive headings of the several paragraphs hereof are inserted for
convenience only and shall not control or affect the meaning or construction of
any of its provisions.
29. SERVICE OF NOTICE.
If at any time after the execution of this Lease it shall become necessary
or convenient for one of the parties hereto to serve any notice, demand or
communication upon the other party, such notice, demand or communication shall
be in writing signed by the parties serving the same, sent by United States
mail, or private carrier, to the respective addresses set forth in the preamble
of Part I, or at such other address as either party may have furnished to the
other in writing as a place for the service of notice. Any notice so mailed
shall be deemed to have been given as of the time it is deposited in the United
States mail, or if a private carrier is used, when the notice is accepted or
rejected by the addressee upon attempted delivery.
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30. CONSOLIDATION.
This Part II and the accompanying Part I constitute one agreement and may
be signed in any number of counter parts and shall be construed under the laws
of the Commonwealth of Pennsylvania. Unless specifically set forth to the
contrary in this Part II, all section cross references shall be deemed to refer
to sections within this Part II.
31. RADON ABATEMENT.
Landlord acknowledges and agrees that as a result of radon testing
conducted at the Premises by U.S. Toxic Substance Testing Bureau, radon in
concentrations greater than the EPA 4.0 pCi/L guidelines was detected within the
Buildings. Landlord hereby agrees at its sole cost and expense, to take all
actions necessary to bring the Buildings within compliance with EPA radon
guidelines on or before April 1, 1997.
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IN WITNESS WHEREOF, intending to be legally bound, the Landlord and Tenant
have caused this Part II presents to be signed by their duly authorized officers
or agents and their appropriate seals to be hereunto affixed, the day and year
first above written.
WITNESS: DONNERVILLE ASSOCIATES, "Landlord"
By: /s/ [ILLEGIBLE]
-------------------------------
Name: /s/ [ILLEGIBLE]
-------------------------------
Title: General Partner
/s/ [ILLEGIBLE]
____________________ By:
------------------------------
Name:
------------------------------
Title: General Partner
____________________ By:
-------------------------------
Name:
-------------------------------
Title: General Partner
WITNESS/ATTEST: GEOSYSTEMS GLOBAL CORPORATION
"Tenant"
/s/ [ILLEGIBLE]
____________________ By: /s/ BARRY J. GLICK
-------------------------------
Name: Barry J. Glick
-------------------------------
Title: PRESIDENT & CEO
<PAGE>
RIDER
PURCHASE OPTION
Option to Purchase
Tenant shall have the option to purchase the Premises, located at 3700-3750
Electronics Way, Lancaster, Pennsylvania, so long as Tenant is not in default of
this Lease, on terms as follows:
A. This purchase option may be exercised during the 7th, 8th, 9th or 10th year
of the Lease term by Tenant giving not less than four (4) months prior written
notice to Landlord provided, however, if the exercise is made in the 10th year
of the Lease term it shall be made prior to July 1, 2006. The notice of exercise
shall specify a proposed settlement date accompanied by a down payment of
$100,000. The down payment will be placed in an interest bearing escrow account
and at the Closing the interest shall be payable to Buyer. At the settlement,
upon payment of the balance of the purchase price, Landlord shall execute,
acknowledge and deliver to Tenant a special warranty deed with good and
insurable title.
The cost of the preparation of the deed shall be borne by Tenant. Special
assessments not otherwise payable by Tenant pursuant to the terms of the Lease
shall be apportioned to the date of closing and thereafter paid by Tenant.
Transfer taxes and documentary stamps, if any, to be borne by Tenant. Pending
settlement, the rent shall continue without abatement.
A-l Tenant's notice to Landlord that it intends to exercise this option may
include, at Tenant's option, the proposed purchase price, which Landlord shall
either accept or reject, by issuance of written notice to Tenant within fifteen
(15) days of receipt of Tenant's notice. If Landlord rejects the purchase price,
the appraisal provisions of Paragraph B below shall apply, however, if the
appraisal process outlined in Paragraph B results in a purchase price which is
equal to or less than the purchase price initially offered by Tenant, the cost
of the appraisal(s) shall be paid by Landlord.
B. If Landlord rejects Tenant's proposed purchase price or if Tenant's notice of
exercise does not include a proposed purchase price, the purchase price shall be
the greater of $4,000,000 or Fair Market Value determined as follows:
The Tenant and Landlord shall each select a Pennsylvania State Certified
appraiser, experienced in the valuation of real estate in the vicinity of the
Premises within ten (10) days of the exercise of the Option to Purchase. The
Appraisers shall appraise the Premises within thirty (30) days of their
appointment. If the two appraisals are within ten percent (10%) of one another,
fair market value shall be the average of the two. If the two appraisals are not
within ten percent (10%) of one another, then the two Appraisers shall select a
third Appraiser to appraise the Option Property within thirty (30) days of its
appointment. If the valuation of the third Appraiser is between the value of the
first two Appraisers, then the determination of the third Appraiser shall be the
Fair Market Value. If
<PAGE>
the third Appraiser's valuation is higher than the higher of the original two or
lower than the lowest of the original two appraisals, then the valuation of the
original two which is closest to the third appraisal shall be Fair Market Value.
Subject to the terms of Paragraph A-1, the Tenant shall be responsible for
the costs associated with obtaining all appraisals. Landlord agrees to
reasonably cooperate with Tenant to obtain said appraisals as quickly as
possible.
C. Settlement of Purchase of Premises Under Option
(a) Once the purchase price is determined, Landlord shall either accept
Tenant's proposed settlement date set forth in its original notice or the
parties will mutually agree upon a date for settlement, or absent agreement,
settlement will take place on the later to occur of one hundred eighty (180)
days following the determination of the purchase price or the anniversary date
of the Lease commencement; settlement will be held in York, Pennsylvania, unless
the parties mutually agree in writing upon another place.
(b) Pending the settlement, the Lease will continue in full force and
effect.
(c) In the event that Tenant obtains or procures a report of title or title
insurance binder and such report of title or title insurance binder discloses
any defects in title (other than such usual exceptions contained in owner's
policies and the matter to which the sale hereunder is to be subject by the
terms hereof), Landlord shall have a period of ninety (90) days from the date of
written notice by Tenant of such defects and receipt of a copy of such title
insurance binder within which to cure such defects without being in default
hereunder. If Landlord is unable to cure such defects within such time period,
Tenant may, by issuance of written notice to Landlord, (i) terminate its
exercise of the option or (ii) waive the defect and proceed to closing.
(d) Immediately upon the exercise of the option, endorsements shall be
placed upon all policies of insurance which then insure Landlord's interest, so
as to cover the interest of Tenant as a contract purchaser. Any expense in
connection therewith shall be paid by Tenant. Risk of loss pending settlement
shall be on the Landlord.
(e) Prior to or simultaneously with the payment of the purchase price,
Landlord agrees to pay in full and discharge any mortgage indebtedness or other
monetary Liens encumbering the property. Once the purchase price is agreed upon
following Tenant's exercise of the Option, Landlord will not encumber the
Premises without first obtaining the written consent of Tenant.
(f) Possession shall be delivered to Tenant at settlement. At the
settlement, Tenant shall pay in full to Landlord all amounts due to landlord
under the Lease as of the date of settlement, the Rent prorated to the date of
settlement and the Lease shall be terminated.
- 2 -
<PAGE>
Lease as of the date of settlement, the Rent prorated to the date of settlement
and the Lease shall be terminated.
(g) The last month's rent, prepared by Tenant shall be credited against
rental otherwise due in the last month (or months) preceding the settlement.
WITNESS: DONNERVILLE ASSOCIATES, "Landlord"
By: /s/ [ILLEGIBLE]
-------------------------------
Name: /s/ [ILLEGIBLE]
-------------------------------
Title: General Partner
/s/ [ILLEGIBLE]
____________________ By:
------------------------------
Name:
------------------------------
Title: General Partner
____________________ By:
-------------------------------
Name:
-------------------------------
Title: PRESIDENT & CEO
WITNESS/ATTEST: GEOSYSTEMS GLOBAL CORPORATION
"Tenant"
/s/ [ILLEGIBLE]
____________________ By: /s/ BARRY J. GLICK
-------------------------------
Name: Barry J. Glick
-------------------------------
Title: General Partner
<PAGE>
EXHIBIT A
All property commonly known as 3 700-3750 Electronics Way, Township of West
Hempfield, County of Lancaster, Pennsylvania, 17601
<PAGE>
[MAP DESCRIBING LEASE AREA]
<PAGE>
EXHIBIT B
Items to be Completed at Landlord's Expense
("Landlord Work")
1. Landlord will paint all corridors in those areas where Tenant Improvements
are not being made. Otherwise, Landlord will only patch the walls and touch
up the paint on walls that exhibit mold, stains or need repair. Landlord
will replace stained or damaged ceiling tiles in all areas. All this work
will be completed prior to April 1, 1997 ("Occupancy").
2. Landlord will hire a contractor to clean the HVAC duct work and replace the
filters once prior to Occupancy. Certification of the cleaning will be
provided to Tenant upon completion of the work.
3. Landlord will hire a contractor to exterminate and fumigate the entire
building once prior to Occupancy. Certification of the extermination and
fumigation will be provided to the Tenant upon completion of the work.
4. Landlord will change the hardware on all four main entrance/exit doors to
be special light weight (12# or so) ball bearing hinges that make opening
the doors easier for physically-challenged persons. This is the only ADA
requested change the Landlord will complete prior to Occupancy: any other
changes will be made either through the agreed upon Tenant allowance as
outlined below, or at Tenant's cost.
5. Landlord agrees to make repairs and maintenance/service items that are
mutually determined to be reasonably required as a result of the
electrical, plumbing, HVAC, appliances, fire extinguisher, halon, and
sprinkler system inspections performed in October and November, 1996, prior
to Occupancy so that all such systems are in working order and condition as
of Occupancy. Landlord agrees to replace the existing roof
6. Landlord agrees to clean the building once, including dry-cleaning drapes
prior to Tenant occupying 50% of the building; Tenant must assume
responsibility from then on.
7. Landlord agrees to repair and seal the macadam parking lots, repaint lines
and repair and/or erect existing exterior light poles. Landlord also agrees
to add handicapped parking space stencils on the macadam when re-striping
the lines. There is no need to re-stencil numbers on the parking spaces.
Tenant agrees to provide handicapped signage at appropriate parking spaces.
This work will be done once prior to Occupancy, weather permitting, and in
no event later than June 15, 1997.
8. Landlord agrees to complete weeding, mulching, or landscaping work
(including removal of existing plant material) as much as possible before
Tenant Occupancy,
<PAGE>
Exibit 21.1
Subsidiaries of MapQuest.com, Inc.
None
<PAGE>
EXHIBIT 23.1
Consent of Independent Auditors
We consent to the reference to our firm under the captions "Selected Financial
Data" and "Experts" and to the use of our report dated February 18, 1999
except for Note 15, as to which the date is April , 1999, in Amendment No. 1 to
the Registration Statement (Form S-1 No. 33-72667) and related Prospectus of
MapQuest.com, Inc.
Ernst & Young LLP
Harrisburg, Pennsylvania
April , 1999
The foregoing consent is in the form that will be signed upon the completion of
the restatement of the capital accounts described in Note 15 to the financial
statements.
/s/ Ernst & Young LLP
Harrisburg, Pennsylvania
April 9, 1999
