===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
Form 10-Q
(Mark One)
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 1999
or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Commission File Number 0-19690
BARRA, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-2993326
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2100 Milvia Street
Berkeley, California 94704-1113
(Address, including zip code, of principal executive offices)
(510) 548-5442
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
The number of shares of the registrant's Common Stock outstanding as of
December 31, 1999 was 14,012,852.
<PAGE>
INDEX
PART I FINANCIAL INFORMATION
Item 1 Financial Statements:
Condensed Consolidated Balance Sheets as of December 31, 1999
(unaudited) and as of March 31, 1999
Unaudited Condensed Consolidated Statements of Income
for the Three and Nine Month Periods Ended December 31, 1999 and 1998
Unaudited Condensed Consolidated Statements of Cash Flows
for the Three and Nine Month Periods Ended December 31, 1999 and 1998
Notes to Condensed Consolidated Financial Statements
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations
Item 3 Quantitative and Qualitative Disclosures About Market Risk
PART II OTHER INFORMATION
Item 1 Legal Proceedings
Item 5 Other Information
Item 6 Exhibits and Reports on Form 8-K
Signatures
Exhibit Index
<PAGE>
PART I
ITEM 1. FINANCIAL STATEMENTS.
BARRA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 1999 (UNAUDITED) AND MARCH 31, 1999
(In thousands except for share and per share amounts)
<TABLE>
<CAPTION>
December 31, March 31,
1999 1999
------------- -------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents........................ $30,000 $31,343
Short-term investments........................... 24,460 17,229
Marketable securities - available for sale....... 9,351 6,498
Accounts receivable:
Subscription and other (Less allowance for
doubtful accounts of $772 and $526)........... 17,708 20,774
Asset Management............................... 28,383 9,059
Related parties................................ 5,403 4,326
Prepaid expenses................................. 2,276 2,361
------------- -------------
Total current assets........................... 117,581 91,590
------------- -------------
Investments in unconsolidated companies............ 1,775 2,602
Premises and equipment:
Computer and office equipment.................... 20,218 21,272
Furniture and fixtures........................... 6,014 5,872
Leasehold improvements........................... 8,743 8,647
------------- -------------
Total premises and equipment................... 34,975 35,791
Less accumulated depreciation and amortization..... (17,082) (17,312)
------------- -------------
17,893 18,479
Deferred tax assets................................ 3,036 3,036
Computer software (less accumulated amortization
of $1,300 and $1,015)............................ 2,180 958
Other assets....................................... 934 1,188
Goodwill and other intangibles (less accumulated
amortization of $6,686 and $4,691)............... 24,851 25,236
------------- -------------
Total.............................................. $168,250 $143,089
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable................................. $1,319 $2,288
Due to related party............................. -- 200
Accrued expenses payable:
Accrued compensation........................... 12,091 10,770
Accrued corporate income taxes................. 9,839 5,544
Accrued restructuring charges.................. 748 --
Other accrued expenses......................... 10,419 9,026
Unearned revenues................................ 23,477 23,790
------------- -------------
Total current liabilities...................... 57,893 51,618
------------- -------------
Deferred tax liabilities........................... 1,638 1,398
Minority interest in equity of subsidiary.......... 9,163 1,868
STOCKHOLDERS' EQUITY:
Preferred stock, no par; 10,000,000 shares
authorized; none issued and outstanding......... -- --
Common stock, $.0001 par value; 75,000,000
shares authorized; 13,904,606 and 14,012,852
shares issued and outstanding................... 1 1
Additional paid-in capital....................... 23,842 31,764
Retained earnings................................ 73,563 56,885
Accumulated other comprehensive income (loss):
Unrealized gain on securities available-for-
sale......................................... 1,948 --
Foreign currency translation gain (loss)....... 202 (445)
------------- -------------
Total stockholders' equity..................... 99,556 88,205
------------- -------------
Total.............................................. $168,250 $143,089
============= =============
</TABLE>
The accompanying notes are an integral part of the BARRA, Inc. Consolidated
Financial Statements
<PAGE>
BARRA INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE THREE AND NINE MONTH PERIODS ENDED DECEMBER 31, 1999 AND 1998
(In thousands except for share and per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
December 31, December 31,
------------------------- -------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Operating Revenues:
Subscription and consulting
fees....................... $30,404 $28,787 $87,779 $83,815
Electronic trading........... 4,821 3,906 13,725 12,192
Asset management............. 24,952 9,865 40,514 21,490
------------ ------------ ------------ ------------
Total operating revenues... 60,177 42,558 142,018 117,497
------------ ------------ ------------ ------------
Operating Expenses:
Cost of subscription products 2,343 2,197 6,248 7,156
Compensation and benefits.... 23,995 20,603 66,487 56,349
Occupancy ................... 1,791 1,893 5,469 5,516
Other operating expenses..... 7,115 7,490 18,920 20,140
Restructuring charges -- -- 5,561 --
------------ ------------ ------------ ------------
Total operating expenses... 35,244 32,183 102,685 89,161
------------ ------------ ------------ ------------
Interest Income & Other........ 340 308 1,095 1,111
------------ ------------ ------------ ------------
Income before Equity
in Net Income and Loss of
Investees, Minority Interest
and Income Taxes............. 25,273 10,683 40,428 29,447
Equity in Net Income and Loss
of Investees................. 21 28 (73) (339)
Minority Interest.............. (8,878) (3,256) (13,837) (6,567)
------------ ------------ ------------ ------------
Income before Income
Taxes........................ 16,416 7,455 26,518 22,541
Income Taxes................... (6,074) (2,908) (9,840) (8,792)
------------ ------------ ------------ ------------
Net Income .................... $10,342 $4,547 $16,678 $13,749
============ ============ ============ ============
Net Income Per Share:
Basic........................ $0.74 $0.33 $1.19 $0.99
============ ============ ============ ============
Diluted...................... $0.71 $0.31 $1.14 $0.94
============ ============ ============ ============
Weighted Average Common and
Common Equivalent Shares:
Basic........................ 13,984,222 13,929,488 14,053,707 13,830,675
============ ============ ============ ============
Diluted...................... 14,554,470 14,644,804 14,644,901 14,592,137
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of the BARRA, Inc. Consolidated
Financial Statements
<PAGE>
BARRA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1999 AND 1998
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
December 31,
----------------------------
1999 1998
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income ....................................... $16,678 $13,748
Adjustments to reconcile net income to net
cash provided by operating activities:
Equity in net income of investees... 73 339
Minority interest............................ 13,837 6,567
Depreciation and amortization................ 5,772 4,914
Amortization of computer software............ 358 584
Gains on marketable securities............... (72) (398)
Non-cash restructuring charges............... 748 --
Other........................................ 667 747
Changes in:
Accounts receivable - subscription and other. 3,066 (5,503)
Accounts receivable - asset management....... (19,324) (9,317)
Accounts receivable - related parties........ (1,077) (248)
Prepaid expenses............................. 85 (1,052)
Other assets................................. 254 434
Accounts payable, due to related party
and accrued expenses........................ 5,840 (1,223)
Unearned revenues............................ (313) 840
------------- -------------
Net cash provided by operating activities.. 26,592 10,432
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures.............................. (5,108) (6,443)
Short-term investments purchased - net............ (7,159) (7,973)
Purchase of investments in marketable securities -
available for sale.............................. (151) (182)
Acquisitions - cash paid.......................... (1,053) (5,356)
Investments in unconsolidated companies........... -- (622)
------------- -------------
Net cash used in investing activities (13,471) (20,576)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash payments to minority shareholders............ (6,542) (4,742)
Proceeds from sale of common stock................ 2,862 2,596
Repurchases of common stock....................... (10,784) (526)
------------- -------------
Net cash used in financing activities............. (14,464) (2,672)
------------- -------------
NET DECREASE IN CASH AND CASH EQUIVALENTS......... (1,343) (12,816)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD.. 31,343 33,673
------------- -------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD........ $30,000 $20,857
============= =============
SUPPLEMENTAL INFORMATION ABOUT NON-CASH INVESTING
ACTIVITIES:
Unrealized gain on exchange of Quote.com, Inc for
Lycos, Inc. stock - Note 6...................... $1,948 $0
OTHER CASH FLOW INFORMATION:
Cash paid during the period for:
Interest expense............................. $0 $13
Income taxes................................. $5,545 $7,029
</TABLE>
The accompanying notes are an integral part of the BARRA, Inc. Consolidated
Financial Statements
<PAGE>
BARRA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements
include the accounts of BARRA, Inc. (the Company, which may be
referred to as BARRA, we, us or our) and its wholly-owned
subsidiaries. All significant intercompany transactions and
balances have been eliminated. Certain reclassifications have
been made to prior period financial statements to conform to the
current period presentation.
In our opinion, the accompanying unaudited condensed consolidated
financial statements include all adjustments (consisting of normal
recurring entries) necessary to present fairly our financial
position as of December 31, 1999 and the results of our operations
and cash flows for the periods presented in conformity with
generally accepted accounting principles. The results of
operations for the interim periods are not necessarily indicative
of results of operations for a full year. The March 31, 1999
condensed consolidated balance sheet is derived from the audited
consolidated financial statements included in our Annual Report on
Form 10-K for the fiscal year ended March 31, 1999 (Form 10-K),
but does not include all disclosures required by generally
accepted accounting principles. We suggest that these condensed
consolidated financial statements be read in conjunction with the
audited consolidated financial statements and related notes
included in the Form 10-K and Management's Discussion and Analysis
of Financial Condition and Results of Operations included in this
Form 10-Q.
2. RESTRUCTURING CHARGE
On April 19, 1999, our management announced a restructuring plan
to reduce the cost of operating our U.S. fixed income business and
focus future development and sales efforts on global and
enterprise-wide fixed income products. The restructuring plan
discontinued certain U.S. fixed income products and eliminated
various sales, client and product support positions in the U.S.
Revenues from discontinued products ceased on April 30, 1999.
Customers who had prepaid subscriptions for periods after April
30, 1999 received refunds on or before August 31, 1999. Although
the decision to discontinue these products was made in April 1999,
certain support activities continued through December 31, 1999.
All termination notices and benefits were communicated to the
affected employees prior to June 30, 1999. Revenues from
discontinued products amounted to approximately $8 million in
fiscal 1999 or 5% of our total revenues. Revenues from
discontinued products included in the accompanying condensed
consolidated statements of income for the three month period ended
December 31, 1999 and 1998 amounted to zero and $1.9 million,
respectively. Revenues from discontinued products included in the
accompanying condensed consolidated statements of income for the
nine month periods ended December 31, 1999 and 1998 amounted to
$.6 million and $6.0 million, respectively.
We recorded two significant charges in connection with the
restructuring plan. The first charge of approximately $4 million
($.27 per diluted share) was recorded in the quarter ended March
31, 1999. It consisted of non-cash charges for the write-off of
goodwill and capitalized software development costs related to our
1997 acquisition of a company engaged in the development of
products for the U.S. fixed income market. The second charge of
approximately $5.6 million ($.23 per diluted share) was recorded
in the quarter ended June 30, 1999. This charge consisted of: (a)
$3.6 million in severance, termination benefits, and wages for
approximately 50 terminated employees (some of which were retained
for various periods up until December 31, 1999 to exclusively
support the discontinued products); (b) $1.3 million for non-
cancelable services directly related to the discontinued products
including certain costs associated with continuing to support the
products up until their final termination dates; and (c) $.4
million in excess facilities costs. At December 31, 1999,
approximately $.7 million of the $5.6 million in restructuring
charges remained accrued. The remaining accrued and unpaid amounts
consist principally of non-cancelable services for computer and
communication services which we expect to be paid out over the
remaining contract terms which end in February 2002. Activity in
the restructuring accrual for the nine months ended December 31,
1999 is summarized as follows (in thousands):
<TABLE>
<CAPTION>
Severance and Excess Other
Termination Facilities Restructuring Total
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Balance at March 31, 1999.... $0 $0 $0 $0
------------ ------------ ------------ ------------
Restructuring charges........ 3,555 357 1,649 5,561
Cash payments................ (3,376) (331) (1,106) (4,813)
------------ ------------ ------------ ------------
Balance at December 31, 1999 $179 $26 $543 $748
============ ============ ============ ============
</TABLE>
3. COMPREHENSIVE INCOME (LOSS)
Comprehensive income (loss) includes foreign currency translation
gains and losses and unrealized gain on marketable securities
available for sale. A summary of comprehensive income (loss)
follows (in thousands):
<TABLE>
<CAPTION>
Three Months Ended December 31,
-------------------------
1999 1998
------------ ------------
<S> <C> <C>
Net Income .................. $10,342 $4,547
Foreign currency translation
gain ...................... 1 714
Unrealized gain on
marketable securities
available-for-sale 1,948 --
------------ ------------
Comprehensive income ........ $12,291 $5,261
============ ============
Nine Months Ended December 31,
-------------------------
1999 1998
------------ ------------
<C> <C>
Net Income .................. $16,678 $13,749
Foreign currency translation
gain ...................... 647 713
Unrealized gain on
marketable securities
available-for-sale 1,948 --
------------ ------------
Comprehensive income ........ $19,273 $14,462
============ ============
</TABLE>
4. SEGMENT INFORMATION
In 1999, we adopted Statement of Financial Accounting Standards
No. 131, "Disclosures about Segments of an Enterprise and Related
Information." Operating segments are defined as components of an
enterprise about which separate financial information is available
that is evaluated regularly by the chief operating decision maker
when deciding how to allocate resources and when assessing
performance. BARRA's chief operating decision making group is the
Executive Committee, which is comprised of the Chief Executive
Officer and certain other Executive Officers. Effective in the
September 1999 quarter, BARRA was reorganized into two business
units, BARRA Core and BARRA Ventures. The Core business unit is
one segment and the Ventures unit has three segments, Symphony
Asset Management, the POSIT Joint Venture and all of the other
ventures are aggregated into the third segment.
Our business segments are organized on the basis of differences in
our related products and services. The Core business is the
subscription and consulting segment and consists of developing,
marketing and supporting investment analytics software, data
products, and related consulting services to portfolio fund
managers, pension sponsors and others engaged in the management of
financial assets.
BARRA Ventures are investments, joint ventures or significant
licensing arrangements that leverage the ideas and intellectual
property of the Core business. The POSIT Joint Venture licenses
institutional trading systems that allow institutional investors
to trade portfolios of securities directly with each other in a
confidential environment. The Symphony Asset Management venture
is a jointly owned subsidiary that provides money management
services. All other BARRA ventures are aggregated in this
presentation.
Segment income from operations is defined as segment revenues net
of segment expenses, restructuring charges, and equity in joint
venture gains and losses for the current year. Segment expenses
include costs for sales and client support activities, the cost of
delivering the product or service (including data and data
processing costs), and allocated amounts of depreciation and
amortization. Segment expenses also include allocated portions of
research and development and general and administrative expenses,
amortization of acquired intangibles, and interest income for the
current year. In prior fiscal years, these items of income and
expense were not allocated to segments. For all fiscal years
presented, segment expenses exclude income taxes.
There are no differences between the accounting policies used to
measure profit and loss for segments and those used on a
consolidated basis. Revenues are defined as revenues from external
customers and there are no inter-segment revenues or expenses.
Our management does not identify or allocate its assets, including
capital expenditures, by operating segment. Assets are not being
reported by segment because the information is not available by
segment and is not reviewed by our Executive Committee to make
decisions about resources to be allocated to the segments when
assessing their performance. Depreciation and amortization are
allocated to segments in order to determine segment profit or
loss.
The following tables present information about reported segments
for the three and nine month periods ended December 31, 1999 and
1998, respectively (in thousands):
<TABLE>
<CAPTION>
For the three months ended December 31, 1999:
------------- -------------------------------------------------------
CORE BARRA VENTURES
------------- ------------------------------------------------------- -------------
Subscription
and POSIT Symphony Asset Total Consolidated
Consulting Joint Venture Management Other Ventures Total
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Subscription revenues....... $24,714 $24,714
Consulting revenues......... 5,297 5,297
Venture revenues............. 4,821 24,718 627 30,166 30,166
------------- ------------- ------------- ------------- ------------- -------------
Total revenues 30,011 4,821 24,718 627 30,166 60,177
Segment expenses............ (26,426) (456) (7,263) (759) (8,478) (34,904)
Equity in joint venture
gains (losses) and minority
interest................... 53 (8,878) (32) (8,857) (8,857)
------------- ------------- ------------- ------------- ------------- -------------
Total segment expenses (26,426) (403) (16,141) (791) (17,335) (43,761)
------------- ------------- ------------- ------------- ------------- -------------
Segment income (loss) $3,585 $4,418 $8,577 ($164) $12,831 $16,416
============= ============= ============= ============= ============= =============
Depreciation and
amortization $1,784 $40 $75 $135 $250 $2,034
For the three months ended December 31, 1998:
---------------------------------------------------------------------
Subscription
and Electronic Asset
Consulting Trading Management Unallocated Total
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Revenues..................... $28,787 $3,906 $9,865 $42,558
Segment expenses............ (16,395) (511) (3,353) (20,259)
Minority interest............ (3,256) (3,256)
------------- ------------- ------------- ------------- -------------
$12,392 $3,395 $3,256 $19,043
============= ============= ============= ============= =============
Research and development..... (6,263) (6,263)
General and administrative... (4,982) (4,982)
Amortization of intangibles.. (679) (679)
Interest and other........... 308 308
Equity in joint venture
losses..................... 28 28
------------- ------------- ------------- ------------- -------------
Income (loss) before income
taxes...................... $12,392 $3,395 $3,256 ($11,588) $7,455
============= ============= ============= ============= =============
Depreciation and amortization $465 $25 $60 $390 $940
For the nine months ended December 31, 1999:
------------- -------------------------------------------------------
CORE BARRA VENTURES
------------- ------------------------------------------------------- -------------
Subscription
and POSIT Symphony Asset Total Consolidated
Consulting Joint Venture Management Other Ventures Total
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Subscription revenues....... $71,521 $71,521
Consulting revenues......... 15,191 15,191
Venture revenues............. 13,725 39,778 1,803 55,306 55,306
------------- ------------- ------------- ------------- ------------- -------------
Total revenues 86,712 13,725 39,778 1,803 55,306 142,018
Segment expenses............ (78,551) (1,669) (13,544) (2,265) (17,478) (96,029)
Restructuring charges....... (5,561) (5,561)
Equity in joint venture
gains (losses) and minority
interest................... 117 (13,837) (190) (13,910) (13,910)
------------- ------------- ------------- ------------- ------------- -------------
Total segment expenses (84,112) (1,552) (27,381) (2,455) (31,388) (115,500)
------------- ------------- ------------- ------------- ------------- -------------
Segment income (loss) $2,600 $12,173 $12,397 ($652) $23,918 $26,518
============= ============= ============= ============= ============= =============
Depreciation and
amortization $5,467 $110 $160 $393 $663 $6,130
For the nine months ended December 31, 1998:
---------------------------------------------------------------------
Subscription
and Electronic Asset
Consulting Trading Management Unallocated Total
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Revenues..................... $83,815 $12,192 $21,490 $117,497
Segment expenses............ (47,117) (1,026) (8,314) (56,457)
Minority interest............ (6,567) (6,567)
------------- ------------- ------------- ------------- -------------
$36,698 $11,166 $6,609 $54,473
============= ============= ============= ============= =============
Research and development..... (16,226) (16,226)
General and administrative... (14,590) (14,590)
Amortization of intangibles.. (1,888) (1,888)
Interest and other........... 1,111 1,111
Equity in joint venture
gains (losses)............. (339) (339)
------------- ------------- ------------- ------------- -------------
Income (loss) before income
taxes...................... $36,698 $11,166 $6,609 ($31,932) $22,541
============= ============= ============= ============= =============
Depreciation and amortization $1,256 $50 $110 $765 $2,181
</TABLE>
5. PER SHARE DATA
In accordance with Statement of Financial Accounting Standards
("SFAS") No. 128, "Earnings Per Share" ("SFAS 128"), basic
earnings per share is based on the weighted-average number of
common shares outstanding for the period. Diluted earnings per
share data is based on the weighted-average number of common and
dilutive potential common shares outstanding. Dilutive potential
common shares result from the assumed exercise of outstanding
stock options that have a dilutive effect when applying the
treasury stock method. For all periods presented, the only
difference between basic and diluted earnings per share for the
Company is the inclusion of dilutive stock options in the
denominator for purposes of calculating diluted earnings per
share.
6. SUBSEQUENT EVENT - SALE OF SECURITIES AVAILABLE FOR SALE
In January 2000, we sold 33,903 shares of Lycos, Inc. for a pre-
tax gain of approximately $1.6 million or $.07 per diluted share.
We received the Lycos, Inc. stock in exchange for our interest in
Quote.com as part of Lycos' acquisition of Quote.com in December
1999. At December 31, 1999 these securities were classified as
available for sale with the related unrealized gain reported as a
separate component of stockholders equity.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
This discussion and analysis and other parts of this Form 10-Q
contain forward looking statements that involve risks and
uncertainties. These forward-looking statements are made in
reliance on the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. For further information regarding
how to identify forward looking statements and the factors that
could cause actual results to differ, please refer to the
information under the heading "Cautionary Factors That May Affect
Future Results" below. Any or all of the forward-looking
statements that we make in this Form 10-Q or any other public
statements we issue may turn out to be wrong. It is also
important to remember that other factors besides those we mention
could also adversely affect us and our business, operating results
or financial condition.
A. GENERAL
Certain of the information required by this item has been
previously reported under the heading "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in the
Form 10-K.
Foreign Currency
As an international corporation, we generate revenue from clients
throughout the world, maintain sales and representative offices
worldwide and hold certain deposits and accounts in foreign
currencies. Our revenue is generated from both United States and
non-U.S. currencies. Prior to January 1, 1999 our subscriptions
in the United Kingdom and the European Community were priced in
British pounds sterling (pounds) and European Currency Units
(ECUs), respectively. Subsequent to December 31, 1998, European
Community subscriptions are priced in EMUs (Euro's).
Additionally, our consolidated subsidiary, BARRA International
(Japan), Ltd. (BARRA Japan), generates revenues, has expenses and
has assets and liabilities in Japanese yen (yen).
The following table presents a summary of revenue by geographic
region for the three months ended December 31, 1999 and 1998 (in
thousands):
<TABLE>
<CAPTION>
1999 1998
----------------------------- -----------------------------
% of Total % of Total
Revenues Revenues Revenues Revenues
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
North America:
United States............ $45,661 76% $29,236 69%
Other.................... 622 1 872 2
-------------- -------------- -------------- --------------
Total North America...... 46,283 77 30,108 71
============== ============== ============== ==============
Europe:
United Kingdom........... 5,342 9 4,992 12
France................... 1,388 2 1,190 3
Germany.................. 1,393 2 1,343 3
Other.................... 269 - 230 1
-------------- -------------- -------------- --------------
Total Europe............. 8,392 13 7,755 19
============== ============== ============== ==============
Asia and Australia:
Japan.................... 3,987 7 3,141 7
Other.................... 1,515 3 1,554 3
-------------- -------------- -------------- --------------
Total Asia and Australia. 5,502 10 4,695 10
============== ============== ============== ==============
-------------- -------------- -------------- --------------
TOTAL $60,177 100% $42,558 100%
============== ============== ============== ==============
</TABLE>
All other things being equal, weakening of the U.S. dollar has a
positive impact on profits, and strengthening of the U.S. dollar
has a negative impact. We have considered our exposure to foreign
currency fluctuations and to this point have decided not to engage
in hedging or managing exposures to foreign currency fluctuations
through contracts for the purchase, sale or swapping of
currencies. Accordingly, a strengthening of the U.S. dollar versus
non-U.S. currencies could have a material adverse impact on our
results of operations and financial condition.
For the three month period ended December 31, 1999, when compared
to the same period a year ago, the U.S. dollar strengthened
against the pound and Euro and significantly weakened against the
yen - all of which had the net effect of increasing net revenues
and net income by approximately $70,000 and $15,000, respectively,
compared to exchange rates in effect for the three month period
ended December 31, 1998.
Because the functional currency of BARRA Japan is the yen, the
translation gains and losses associated with the consolidation of
its balance sheets at points in time are reported as part of
stockholders' equity.
Under current operating arrangements in the countries in which we
do business, there are no significant restrictions upon the flow
of funds from our foreign subsidiaries to the parent company.
B. FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
The dollar and percentage increases or decreases set forth below
in this discussion and analysis of our consolidated financial
condition result from a comparison of BARRA's balance sheet at
December 31, 1999 (unaudited) to the balance sheet at March 31,
1999.
Financial Condition
Total assets increased $25.2 million or 18%.
Total current assets increased $26.0 million or 28%. This net
increase was primarily due to increases in accounts receivable for
asset management fees reflecting an increase in related revenues.
(Refer to the accompanying unaudited condensed consolidated
statement of cash flows for more information on cash flows.)
Premises and equipment, net, decreased $586,000. This net decrease
reflects capital expenditures of $3,528,000 reduced by
depreciation and other adjustments of $4,114,000. In addition,
approximately $4,334,000 in fully depreciated assets were written-
off during the September 1999 quarter in connection with the
Company's implementation of a new fixed asset system.
Computer software increased $1.2 million due to the purchase of a
new accounting and human resources system.
Total current liabilities increased $6.3 million or 12%. This net
increase primarily reflects increases in: a) accrued income taxes
due to higher taxable income and differences in the timing and
amount of estimated income tax payments; b) accrued compensation
associated with incentive plans that are tied to the performance
of our asset management business; and c) accrued expenses
associated with the restructuring plan announced in April 1999.
Minority interest in equity of subsidiary represents minority
equity interests in the net assets of Symphony LLC.
Liquidity and Capital Resources
Cash and cash equivalents, short-term investments and investments
in securities available-for-sale totaled $63.8 million at December
31, 1999.
We believe that our cash flow from operations (including prepaid
subscription fees), together with existing cash balances, will be
sufficient to meet cash requirements for capital expenditures and
other cash needs for ongoing business operations. Other than
commitments described in this discussion and analysis and in the
financial statements and notes, we have no present binding
understandings or commitments with respect to any significant
expenditures.
Principal Financial Commitments. Our principal financial
commitments consist of obligations under operating leases and
contracts for the use of computer and office facilities, possible
future royalties payable to RJM Ventures, Inc. (as successor to
Redpoint Software, Inc.), and severance and other related
compensation associated with the restructuring plan announced in
April 1999. Our Board of Directors has, on two separate occasions
following the September 1999 quarter authorized the repurchase of
up to $10,000,000 (including all previously authorized but unused
amounts) of our common stock and has authorized up to $17 million
in funds as "seed" investments for new asset management products
developed by Symphony or our Asset Services Group. Approximately
$2.0 million of the latter amount has not yet been disbursed.
C. RESULTS OF OPERATIONS
References to the dollar and percentage increases or decreases set
forth below in this discussion and analysis of our results of
operations are derived from comparisons of our condensed
consolidated statements of income for the three and nine month
periods ended December 31, 1999 and December 31, 1998.
Net Income. Net income for the three month period ended December
31, 1999 was $10,342,000 or $0.71 per share (diluted) compared to
net income of $4,547,000 or $0.31 per share (diluted) for the same
quarter a year ago. Net income for the nine month period ended
December 31, 1999 was $16,678,000 or $1.14 per share (diluted)
compared to net income of $13,749,000 or $0.94 per share (diluted)
for the same period a year ago. Results for the nine month period
ended December 31, 1999 included restructuring charges of
$5,561,000 ($.24 per diluted share).
Operating Revenues. Total operating revenues for the three and
nine month periods ended December 31, 1999 increased $17,619,000
or 41% and $24,521,000 or 21%, respectively, compared to the same
periods a year ago.
Subscription and Consulting fees consist of annual subscription
fees for our software and investment data products, revenues from
other sources related to the institutional analytics business and
consulting services to pension plan sponsors and investment
managers. A summary of the components and related changes is as
follows (amounts in $000's):
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
December 31, December 31,
-------------------------- --------------------------
1999 1998 %Change 1999 1998 %Change
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Analytics and data
subscriptions -
continuing products.... $23,692 $20,839 14 $68,555 $60,291 14
Analytics subscriptions -
discontinued fixed
income products........ -- 1,952 -- 595 6,070 (90)
Other analytics related.. 1,650 1,745 (5) 4,175 4,948 (16)
Consulting............... 5,062 4,251 19 14,454 12,506 16
-------- -------- -------- -------- -------- --------
TOTAL.................... $30,404 $28,787 6 $87,779 $83,815 5
======== ======== ======== ======== ======== ========
</TABLE>
Analytics Subscriptions are for our software and related updates.
We generally bill and collect fees on an annual basis, but
recognize the income 1/12th per month over each year of the
subscription period. The growth in annual subscription fees
continues to be generated from a combination of obtaining new
clients (including subscriptions from enterprise risk management
systems) and increasing revenues from existing customers through
the introduction of new products and services.
Revenue growth primarily came from equity models and related data
reflecting the continued success of the BARRA Aegis SystemTM.
Various new single country and global enhancements of this equity
analytics system have been introduced during the past year. Sales
of our BARRA COSMOS SystemTM, the international version of our
fixed income product also contributed to the revenue growth.
A substantial portion of the annual subscriptions for analytics
products renew at or near the beginning of each calendar year.
Therefore, even though overall renewal rates continue to be at
very high levels, a concentration of cancellations at this time of
year could have a disproportionately high impact on the March
quarter of each year.
Revenues from discontinued fixed income products for the nine
months ended December 31, 1999 only represent amounts earned on
these products during April 1999. As part of the restructuring,
we agreed to provide license and support services without charge
from May 1, 1999 until the product termination dates. The
termination dates ranged from October to December 1999.
Other Analytics Related revenues associated with other
institutional analytics business sources include consulting fees
associated with Enterprise Risk Management system installations,
timesharing revenues, seminar revenues and other recurring fees.
The net decrease in these revenues for both periods reflects
significant growth in consulting fees from Enterprise Risk
Management installations offset by lower seminar and timeshare
fees. Fluctuations in non-consulting revenue sources result
primarily from the number and timing of seminars and the amount of
timesharing billed to clients. Our Enterprise Risk Management
services generally involve the sale of software and services
including a one-time license fee, recurring subscription,
maintenance and support fees, as well as consulting services
related to implementation and software modification. Revenues from
licenses, subscriptions and maintenance are included in
subscription revenues. Enterprise Risk Management revenues related
to initial installations are subject to significant volatility as
a result of the uneven nature in which the various elements of the
services are earned and recognized for reporting purposes.
Consulting Fees consist of services delivered by our Investment
Consulting and Strategic Consulting business groups. Revenues from
consulting services increased over the same three and nine month
periods a year ago as a result of increases in project revenue
from the Strategic Consulting group combined with solid growth in
retainer and related fees from Investment Consulting.
Electronic Trading revenues consist of fees from licenses of the
Portfolio System for Institutional Trading (POSIT), which
increased $915,000 or 23% compared to the same quarter a year ago
and increased $1,533,000 or 13% compared to the same nine month
period a year ago. Our revenues from POSIT are derived from
commissions generated by the trading volume of the various
licensees. POSIT revenue fluctuations reflect changes in trading
volumes as compared to the same periods a year ago and new license
fees from EuroPOSIT, the joint venture established to operate the
POSIT system in certain European equity markets.
Asset Management revenues increased $15,087,000 or 153% compared
to the same quarter a year ago and increased $19,024,000 or 89%
compared to the same nine month period a year ago. Asset
management revenues consist of fees generated from active
management of investor accounts by Symphony and fees earned by our
Asset Services Group from management of customized multi-manager
programs.
Symphony's revenues consist primarily of asset management fees
which are a fixed percentage of asset value and performance fees
that are based on the performance over a benchmark for each
account. Symphony's total revenues for the three and nine month
periods ended December 31, 1999 were $24,718,000 and $39,778,000,
respectively, compared to $9,603,000 and $20,491,000,
respectively, for the same periods a year ago. These increases in
total revenues were the result of increases in both base and
performance fees due to growth in assets under management and
improved performance in some of Symphony's largest funds compared
to the prior year. As of December 31, 1999, Symphony had
approximately $4.1 billion under direct management. Of the funds
under direct management, approximately $2.4 billion are managed
under agreements that provide for performance fees in addition to
a base management fee. The $4.1 billion under direct management
includes approximately $550 million of leverage in addition to the
capital invested by Symphony's clients.
Base fees for assets under management for the three and nine month
periods ended December 31, 1999 were $4,814,000 and $12,759,000,
respectively, compared to $3,667,000 and $10,856,000 for the same
periods a year ago. Base fee increases for all periods reflect
growth in assets under management.
Performance fees included in total revenues were $19,903,000 and
$27,018,000, respectively, for the three and nine months ended
December 31, 1999 compared to $5,936,000 and $9,635,000 for the
same periods a year ago. Performance fees are recognized only at
the measurement date for determining performance of an account,
which typically is at the end of each year of the contract.
Symphony's performance fees for the December 2000 quarter were for
accounts representing approximately 50% of the current total of
assets subject to performance fees compared to approximately 66%
for the same quarter in the prior year. The increase in
performance fee revenue for the December 1999 quarter over the
same period a year ago was the result of an increase in the value
of investor account anniversaries and a significant increase in
the net returns for those investor accounts compared to the same
period a year ago. Assets under management subject to performance
fees have increased approximately $700 million or 43% from
December 31, 1998. The pattern of anniversaries can change from
quarter to quarter because of the addition, termination or re-
negotiation of account agreements. There is also no assurance that
Symphony's investment performance will continue at historical
levels. It is presently estimated that approximately 1% and 10% of
the performance-based funds under management will have performance
fee determination dates in the quarters ended March 31, 2000 and
June 30, 2000, respectively
Symphony's future revenues will depend on levels of assets under
management, the performance of the funds it manages and the timing
of anniversary fee determination dates for performance based
funds. Because of the comparatively low levels of assets under
management having anniversaries in the March and June 2000
quarters, we expect there to be very significant reductions in
performance fee revenues and earnings when compared to the
December 1999 quarter.
Operating Expenses. For the quarter ended December 31, 1999
compared to the same quarter a year ago, total operating expenses
increased $3,061,000 or 10%. For the nine months ended December
31, 1999 compared to the same period a year ago, total operating
expenses, including restructuring charges, increased $13,524,000
or 15%. Excluding restructuring charges, operating expenses
increased $7,963,000 or 9%.
Cost of Subscription Products consists of computer access and
communication charges, data and software acquisition expenses,
BARRA's computer leasing expenses, and seminar expenses. This
component of expense increased $146,000 or 7% compared to the same
quarter a year ago and decreased $908,000 or 13% compared to the
same nine-month period a year ago. The increase for the current
quarter is primarily the result of higher seminar costs due to
changes in the timing of certain annual client events. The
decrease for the nine-month periods is primarily the result of
lower computer access and data costs. Lower contract costs for
certain outside computer facilities and the write-off of certain
communication and data costs attributable to the discontinued
fixed income products account for the decrease in computer access
and data costs.
Compensation and Benefits increased $3,392,000 or 16% compared to
the same quarter a year ago and $10,137,000 or 18% compared to the
same nine-month period a year ago. The increases from the same
periods a year ago are primarily the result of higher incentive
compensation costs in our asset management business and increases
in company-wide employee benefit costs. Incentive compensation in
the Symphony subsidiary varies with pre-tax earnings and includes
for the first time in the December 1999 quarter a bonus program
for the Symphony principals.
External and other incremental costs associated with our Year 2000
project included in compensation and benefits were $.9 million and
$3.5 million for the three and nine month periods ended December
31, 1999 compared to $800,000 and $1.3 million, respectively, for
the same periods a year ago. Year 2000 project costs for the
current quarter consisted of external costs for contractors of
$600,000 and accruals for special incentive compensation of
$300,000. Costs associated with our Year 2000 project are expected
to be approximately $.2 million for the three month period ended
March 31, 2000 after which we expect no further Y2K related costs
to be incurred. (Refer to "Year 2000 Update" in Part I, Item 2,
Management's Discussion and Analysis.)
Occupancy Expense decreased $102,000 or 5% compared to the same
quarter a year ago and decreased $46,000 or 1% compared to the
same nine-month period a year ago. These decreases primarily
reflect excess facilities costs being charged to the restructuring
accrual.
Other Operating Expenses decreased $375,000 or 5% compared to the
same quarter a year ago and decreased $1,220,000 or 6% compared to
the same nine month period a year ago. Other operating expenses
include travel, office, maintenance, depreciation, amortization,
data and other expenses related to asset management operations,
marketing, advertising, outside legal and accounting services,
foreign currency translation gains and losses, and other corporate
expenses. Other operating expenses decreased from the same periods
a year ago as a result of: (a) significantly lower data costs
associated with asset management operations; (b) lower printing,
postage and other general office expenses due to both a reduction
in publishing costs for certain products as well as the timing of
various product releases; and (c) lower professional service fees.
Restructuring Charge - Refer to Note 2 in the accompanying notes
to the condensed consolidated financial statements for more
information on the restructuring charges.
Equity in net income (loss) of investees represents gains (losses)
from our equity investments in Data Downlink Corporation, Risk
Reporting Limited and Australian POSIT.
Minority Interest primarily represents the share of profits from
Symphony Asset Management LLC that is due to other shareholders.
Year 2000 Update
As of February 1, 2000, we had not experienced any Year 2000
related failures that we expect would have a material adverse
effect on our business, operating results or financial condition.
We have not been required to utilize our contingency plans, and as
of February 1, 2000 no claims had been brought against BARRA based
on Year 2000 issues. A small number of our data vendors
experienced Year 2000 problems that resulted in BARRA's receipt of
delayed and/or inaccurate data, but such problems do not appear to
have materially affected either BARRA's operations or clients.
The total direct costs of our Year 2000 project include fees paid
to outside solution providers, the costs of repairing or replacing
hardware and the direct costs associated with our internal labor
expenses. Such costs through December 31, 1999 totaled
approximately $10 million, of which approximately $4.45 million
were costs for outside contractors. We estimate the remaining
costs of completing our Year 2000 efforts to be approximately
$500,000, of which approximately $200,000 are expected costs for
outside contractors with the remaining costs representing our
internal costs. Our remaining costs primarily relate to continued
monitoring of our data updates. We expect our Year 2000 costs to
cease after March 31, 2000.
We intend to continue to address the potential effects of any
Year 2000 problems as they arise. We believe that the likelihood
that our business will be materially adversely affected due to the
Year 2000 issue continues to diminish with time. We cannot
guarantee, however, that our computer systems or the systems of
other companies upon which our operations rely will not be
adversely affected by problems associated with the Year 2000
issue. For a detailed discussion of our Year 2000 state of
readiness, risks and contingency plans, please refer to our recent
SEC filings on Forms 10-Q and 10-K.
CAUTIONARY FACTORS THAT MAY AFFECT FUTURE RESULTS
Our disclosure and analysis in this Form 10-Q contain several
forward-looking statements. Forward-looking statements give our
current expectations or forecasts of future events. You can
identify these statements by the fact that they do not relate
strictly to historical or current facts. They use words such as
anticipate, estimate, expect, project, intend, plan, believe,
designed, future, forecast, perceive, possible, potential, target,
will, may, scheduled, would, could, should, forward, assure and
other words and terms of similar meaning in connection with any
discussion of future operating or financial performance. In
particular, these include statements relating to future actions,
events or results. From time to time we may also provide oral or
written forward-looking statements in other materials that we
release to the public.
Any or all of the forward-looking statements that we make in this
Form 10-Q or any other public statements we issue may turn out to
be wrong. They can be affected by inaccurate assumptions that we
might make or by known or unknown risks and uncertainties. Many
factors mentioned in this Form 10-Q will be important in
determining future results. Consequently, no forward looking
statement can be guaranteed. Actual future results may vary
materially.
We are under no obligation to publicly update any forward-looking
statements, whether as a result of new information, future events
or otherwise. We suggest, however, that you consult any further
disclosures we make on related subjects in our Form 10-Q, 8-K and
10-K filings with the SEC. Our Form 10-K filing for the 1999
fiscal year listed various important factors that could cause
actual results to differ materially from expected and historic
results. We note these factors for investors as permitted by the
Private Securities Litigation Reform Act of 1995. Readers can
find them in Part I of that filing under the heading "Risk
Factors." We incorporate that section of that Form 10-K in this
filing and investors should refer to it. Those are factors that
we think could cause our actual results to differ materially from
expected and historical results. Other factors besides those
listed in our Form 10-K or elsewhere in this Form 10-Q could also
adversely affect us or our business. You should understand that
it is not possible to predict or identify all such factors.
Consequently, you should not consider any such list to be a
complete set of all potential risks or uncertainties.
Item 3. Quantitative and Qualitative Disclosures About Market
Risk
Interest Rate Risk
Our exposure to market risk for changes in interest rates relates
primarily to the interest bearing portions of our direct
investment portfolio. We place our direct investments with high
quality credit issuers and, by policy, limit the amount of credit
exposure to any one issuer. Our first priority is to reduce the
risk of principal loss. Consequently, we seek to preserve our
invested funds by limiting default risk, market risk, and re-
investment risk. We attempt to mitigate default risk by investing
only in high quality credit securities that we believe to be low
risk and by positioning our portfolio to respond appropriately to
a significant reduction in credit rating of any investment issuer
or guarantor. The direct investment portfolio includes only
marketable securities with active secondary or resale markets to
ensure portfolio liquidity. We do not use derivative financial
instruments in our investment portfolio.
Our direct interest bearing investment portfolio primarily
consists of investments in short-term, high-credit quality money
market funds. These investments totaled approximately $37.3
million at December 31, 1999 with an average interest rate of
5.0%. At December 31, 1999, the portfolio also had approximately
$6.7 million of short-term, high credit quality municipal debt
securities with an average taxable equivalent interest rate of
7.0%. The short-term money market funds and the municipal debt
securities are not insured and because of the short-term nature of
the investments are subject to credit risk, but are not likely to
fluctuate significantly in market value.
At December 31, 1999, we also had approximately 33,900 shares of
Lycos, Inc. stock valued at approximately $2.7 million included in
securities available-for-sale. These securities were subsequently
sold in January 2000. Refer to Note 6 "Subsequent Event - Sale of
Securities Available-For-Sale" in the accompanying notes to the
condensed consolidated statements of income for more information.
From time to time, we provide the initial invested funds for the
startup of new investment products offered by Symphony and our
Asset Services Group. In these cases the primary considerations
are related to supporting a new business rather than making
investments that fall under the guidelines of our investment
policy.
Our investments in market-neutral programs, which amounted to
approximately $17.1 million at December 31, 1999, are non-interest
bearing and consist principally of long and short positions placed
directly (in the case of funds managed by Symphony) or indirectly
(in the case of funds managed by our Asset Services Group) through
other fund managers in U.S and non-U.S. equity securities of both
public and private issuers. Although the intent of the managers of
these funds is to structure portfolios that are hedged against
general market movements, these investments can be subject to
significant changes in market value and are not insured. In both
cases the managers may use derivative financial instruments in
connection with hedging activities. All investment decisions with
respect to these market neutral programs are made by professional
investment advisers and the performance of the funds is reviewed
periodically by our management and our Board of Directors.
Foreign Currency Risk
We invoice customers in Europe in both pounds and Euros. In
Japan, we bill our customers in yen. Excluding customers in these
locations, we generally bill for our services in U.S. dollars. We
have not engaged in foreign currency hedging activities. To the
extent we invoice our customers in local currency (Yen, Pound and
Euro), our international revenues are subject to currency exchange
fluctuation risk. To the extent that international revenues that
are invoiced in local currencies increase in the future, our
exposure to fluctuations in currency exchange rates will
correspondingly increase. Currency fluctuations may also
effectively increase the cost of our products and services in
countries in which customers are invoiced in U.S. dollars.
We have no foreign debt and non-U.S. dollar cash balances held
overseas are generally kept at levels necessary to meet current
operating and capitalization needs. The capitalization of BARRA
Japan includes approximately $3.3 million invested in a yen-
denominated investments.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
All information required by this item was reported under the
heading "Legal Proceedings" in our March 31, 1999 Form 10-K.
There have been no other material developments in our legal
proceedings since the date of our Form 10-K.
ITEM 5. OTHER INFORMATION.
On February 4, 2000 we modified the terms of our January 1999
acquisition of the Bond Express business. In summary, the parties
agreed to eliminate the contingent payment that otherwise would
have been payable based on Bond Express revenues during calendar
year 2000. In exchange for eliminating the contingent payment,
BARRA paid the seller $1,100,000.
As previously reported under Part II, Item 5 in our September 30,
1999 Form 10-Q, at its October 28, 1999 quarterly meeting, our
Board of Directors authorized our officers to use up to
$10,000,000 (including all previously authorized but unused
amounts) to repurchase additional shares of our Common Stock on
The Nasdaq Stock Market and in private transactions.
On November 3, 1999, we repurchased in separate transactions
34,100 shares of our own Common Stock for an aggregate price of
$775,775 and 80,300 shares of our Common Stock at an aggregate
price of $1,806,750.
On November 15, 1999, we repurchased 33,500 shares of our own
Common Stock for an aggregate price of $770,500.
On November 16, 1999, we repurchased 64,000 shares of our own
Common Stock for an aggregate price of $1,456,000.
On December 1, 1999, we repurchased 50,000 shares of our own
Common Stock for an aggregate price of $1,443,750.
On January 27, 2000, we repurchased 85,200 shares of our own
Common Stock for an aggregate price of $3,077,850.
On January 31, 2000, our Board of Directors authorized our
officers to use up to $10,000,000 (including all previously
authorized by unused amounts) to repurchase additional shares of
our Common Stock on The Nasdaq Stock Market and in private
transactions.
On February 4, 2000, we repurchased in a private transaction from
the Rudd Family Trust 15,000 shares of our Common Stock for an
aggregate price of $555,000. Andrew Rudd, the Chairman of our
Board of Directors and a principal stockholder of BARRA, is (along
with his wife, Virginia Rudd) a beneficiary and trustee of the
Rudd Family Trust.
Our bylaws provide that the Board of Directors have between 4 and
7 persons, with the exact number to be fixed by the Board of
Directors or stockholders. At its quarterly meeting on October
28, 2000, our Board of Directors amended Section 3.2 of our bylaws
to increase the fixed number of authorized directors from 6 to 7.
On November 12, 2000, Clyde W. Ostler was appointed a director.
Mr. Ostler is a group executive vice president for Wells Fargo
Bank, N.A. Our amended and restated bylaws are attached as
Exhibit 3.2.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) the following exhibits are required by Item 601 of the Regulation
S-K:
Exhibit
Number Exhibit Description
- ------ -------------------
3.2 Amended and Restated Bylaws of BARRA, Inc.
10.23 Amendment No. 2 to BARRA, Inc. Directors
Option Plan dated November 5, 1999
(incorporated by reference to Exhibit No.
10.3 to our registration statement on Form
S-8 filed November 12, 1999
(File No. 333-35381)
27.1 Financial Data Schedule
(electronic filing only)
(b) Reports on Form 8-K: None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
BARRA has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BARRA, Inc.
(Registrant)
Date: February 14, 2000 /s/ Kamal Duggirala
Kamal Duggirala, Chief
Executive Officer
Date: February 14, 2000 /s/ James D. Kirsner
James D. Kirsner, Chief
Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit
Number Exhibit Description
3.2 Amended and Restated Bylaws
of BARRA, Inc.
10.23 Amendment No. 2 to BARRA, Inc. Directors
Option Plan dated November 5, 1999
(incorporated by reference to Exhibit No.
10.3 to our registration statement on Form
S-8 filed November 12, 1999
(File No. 333-35381)
27.1 Financial Data Schedule
(electronic filing only)
AMENDED AND RESTATED BYLAWS OF BARRA, INC.
ARTICLE I - OFFICES
Section 1.1 Principal Office. The Board of Directors shall fix
the location of the principal executive office of the corporation at any
place within or outside the State of Delaware. If the principal
executive office is located outside this State, the Board of Directors
shall fix and designate a principal business office in the State of
Delaware.
Section 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 - STOCKHOLDERS
Section 2.1 Place of Meetings. Meetings of stockholders shall be
held at any place designated by the Board of Directors. In the absence
of designation, stockholders' meetings shall be held at the principal
executive office of the corporation.
Section 2.1A Chairman and Secretary of Stockholder Meetings.
The chairman of the board shall preside at each meeting of the
stockholders. In the absence or disability of the chairman of the
board, the meeting shall be chaired by an officer of the corporation in
the following order: president, executive vice president, senior vice
president and vice president. In the absence of all such officers, a
person chosen by the vote of a majority in interest of the stockholders
present in person or represented by proxy and entitled to vote thereat
shall act as chairman. The secretary or in his/her absence an assistant
secretary or in the absence of the secretary and all assistant
secretaries a person whom the chairman of the meeting shall appoint
shall act as secretary of the meeting and keep a record of the
proceedings thereof.
Section 2.1B Regulation and Conduct of Stockholder Meetings.
The Board of Directors of the corporation shall be entitled to make such
rules or regulations for the conduct of meetings of the stockholders as
it shall deem necessary, appropriate or convenient. Subject to such
rules and regulations of the Board of Directors, if any, the chairman of
the meeting shall have the right and authority to prescribe such rules,
regulations and procedures and to do all such acts as in the judgment of
such chairman, are necessary, appropriate or convenient for the proper
conduct of the meeting, including, without limitation, establishing an
agenda or order of business for the meeting, rules and procedures for
maintaining order at the meeting and for the safety of those present,
limitations on participation in such meeting to stockholders of record
of the corporation and their duly authorized and constituted proxies,
and such other persons as the chairman shall permit, restrictions on
entry into the meeting after the time fixed for commencement thereof,
limitations on the time allotted to questions or comments by
participants and regulation of the opening and closing of the polls for
balloting on matters which are to be voted on by ballot, unless, and to
the extent determined by the Board of Directors or the chairman of the
meeting, meetings of the stockholders shall not be required to be held
in accordance with the rules of parliamentary procedure.
Section 2.2 Annual Meeting. The annual meeting of stockholders
shall be held during the first week of August in each year at 2:00 p.m.
on such day during that week as shall be chosen by the Board of
Directors; provided, however, that if (a) the Board of Directors fails
to select a day during the first week of August, the annual meeting of
the stockholders shall be held on the first Tuesday of August; and if
(b) this day falls on a legal holiday, then the meeting shall be held at
the same time and place on the next succeeding business day. At the
annual meeting directors shall be elected and any other proper business
may be transacted.
Section 2.3 Special Meetings. Special meetings of the
stockholders may be called for any purpose at any time by the president,
the Board of Directors or the chairman of the board. If a special
meeting is called by any person or persons other than the Board of
Directors, a written request to notice the meeting, specifying the time
of the meeting and the general nature of the business to be transacted,
shall be delivered personally or sent by registered mail or by
telegraphic or other facsimile transmission to the corporation. The
officer receiving the request shall cause notice to be given promptly to
the stockholders entitled to vote, in accordance with the provisions of
Section 2.4, that a meeting will be held at the time requested by the
person or persons calling the meeting, not less than thirty-five (35)
nor more than sixty (60) days after the receipt of the request. If the
notice is not given within twenty (20) days after receipt of the
request, the person or persons requesting the meeting may give the
notice.
Section 2.4 Notice of Meetings. Notice of meetings of the
stockholders of the corporation shall be given in writing to each
stockholder entitled to vote, either personally or by first-class mail
or other means of written communication, addressed to the stockholder at
the stockholder's address appearing on the books of the corporation or
given by the stockholder to the corporation for the purpose of notice.
Such notice shall be sent not less than ten (10) nor more than sixty
(60) days before the meeting. Said notice shall state the place, date
and hour of the meeting and (a) in the case of special meetings, the
general nature of the business to be transacted, and no other business
may be transacted, or (b) in the case of annual meetings, those matters
which the Board of Directors, at the time of the mailing of the notice,
intends to present for action by the stockholders, and (c) in the case
of any meeting at which directors are to be elected, the names of the
nominees intended at the time of the mailing of the notice to be
presented by the board for election. 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.
Section 2.5 Waiver of Notice or Consent by Absent Stockholders.
The transactions of any meeting of stockholders, however called and
noticed, shall be as valid as though done at a meeting duly held after
regular call and notice, if a quorum is present either in person or by
proxy, and if, either before or after the meeting, each of the persons
entitled to vote at the meeting, not present in person or by proxy,
signs a written waiver of notice or a consent to the holding of the
meeting or an approval of the minutes thereof. All such waivers,
consents and approvals shall be filed with the corporate records or made
a part of the minutes of the meeting.
Section 2.6 Quorum. The presence in person or by proxy of the
holders of a majority of the shares of stock entitled to vote shall
constitute a quorum at a meeting of the stockholders for the transaction
of business. The stockholders present at a duly called or held meeting
at which a quorum is present may continue to transact business until
adjournment notwithstanding the withdrawal of enough stockholders to
leave less than a quorum, if any action taken (other than adjournment)
is approved by at least a majority of the shares of stock required to
constitute a quorum. Any stockholders' meeting, whether or not a quorum
is present, may be adjourned from time to time by the vote of a majority
of the shares represented in person or by proxy at that meeting, and in
the absence of a quorum no other business may be transacted at such
meeting, except as provided above. When any stockholders' meeting is
adjourned for thirty (30) days or more or, if after the adjournment, a
new record date is fixed for the adjourned meeting, notice of the
adjourned meeting shall be given to each stockholder entitled to vote at
the adjourned meeting in accordance with the provisions of Section 2.4.
Section 2.7 Voting.
(a) Procedures. The stockholders entitled to vote
at any meeting of stockholders shall be determined in accordance with
the provisions of Section 2.9, and subject to Sections 217 and 218 of
the General Corporation Law of the State of Delaware. The stockholders'
vote may be by voice vote or by ballot; provided, however, that any
election for directors must be by ballot if demanded by any stockholder
at the meeting and before the voting has begun. Except as provided in
Section 2.6 or in this Section 2.7, the affirmative vote of the majority
of the shares of stock represented and voting at a duly held meeting at
which a quorum is present (which shares of stock voting affirmatively
also constitute at least a majority of the required Quorum) shall be the
act of the stockholders. Stockholders may not cumulate their votes.
(b) Proxies. Every person entitled to vote shall
have the right to do so either in person or by written proxy signed by
such person and filed with the secretary of the corporation. A proxy
shall be deemed signed if the stockholder's name is placed on the proxy,
(whether by manual signature, typewriting, telegraphic transmission, or
otherwise) by the stockholder or the stockholder's attorney-in-fact. A
validly executed proxy which does not state that it is irrevocable shall
continue in full force and effect unless (i) revoked by the person
executing it prior to the vote pursuant to that proxy by a writing
delivered to the corporation stating that the proxy is revoked, or by a
subsequent proxy executed by, or attendance at the meeting and voting in
person by, the person executing the proxy; or (ii) written notice of the
death or incapacity of the maker of that proxy is received by the
corporation before the vote pursuant to that proxy is counted; provided,
however, that no proxy shall be valid after the expiration of three (3)
months from the date of the proxy unless otherwise provided in the
proxy.
Section 2.8 Action Without Meeting. No action required to be
taken or that may be taken at any annual or special meeting of the
stockholders of the corporation may be taken without a meeting, and the
power of stockholders to consent in writing, without a meeting, to the
taking of any action is specifically denied.
Section 2.9 Record Date.
(a) Established by the Board of Directors. In order
that the corporation may determine the stockholders entitled to notice
of, or to vote at, any meeting or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled
to exercise any rights in respect of any other lawful action, the Board
of Directors may fix, in advance, a record date, which shall not be more
than sixty (60) nor less than ten (10) days before the date of such
meeting, nor more than sixty (60) days prior to any other action.
(b) Established by Operation of Law. If no record
date is fixed:
(i) the record date for determining
stockholders entitled to notice of, or to vote at, a meeting of
stockholders shall be at the close of business on the business day next
preceding the day on which notice is given or, if the notice is waived,
at the close of business on the business day next preceding the day on
which the meeting is held;
(ii) the record date for determining
stockholders entitled to give consent to corporate action in writing
without a meeting, when no prior action by the Board of Directors has
been taken, shall be the day on which the first written consent is
given; and
(iii) the record date for any other purpose
shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto, or the sixtieth (60th)
day prior to the date of such other action, whichever is later.
(c) Effect of Determination of Record Date.
Stockholders of record at the close of business on the record date are
entitled to notice and to vote, or to receive the dividend, distribution
or allotment of rights, or to exercise the rights, as the case may be,
notwithstanding any transfer of any shares of stock on the books of the
corporation after the record date, except as otherwise provided by
agreement or in the General Corporation Law of the State of Delaware.
ARTICLE III - DIRECTORS
Section 3.1 Powers. Subject to the provisions of the General
Corporation Law of the State of Delaware and to any limitations in the
Certificate of Incorporation or these Bylaws requiring stockholder
authorization or approval of a particular action, 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.
The Board of Directors may delegate the management of day-to-day
operation of the business of the corporation to a management company or
other person; provided, however, that the business and affairs of the
corporation shall be managed, and all corporate powers shall be
exercised, under the ultimate direction of the Board of Directors.
Section 3.2 Number and Qualification of Directors. The authorized
number of directors of this corporation shall be not less than four (4)
persons and not more than seven (7), until changed by an amendment to
the Certificate of Incorporation, or by an amendment to this Section
3.2, adopted by approval of a majority of the outstanding shares
entitled to vote. The exact number of directors shall be fixed at seven
(7), until changed, within the limits specified above, by the amendment
to this Section 3.2 adopted by the Board of Directors or a majority of
the outstanding shares entitled to vote; provided, however, that an
amendment to the articles or this Section 3.2 reducing either the fixed
number or the minimum number of directors to a number less than five (5)
cannot be adopted if the votes cast against its adoption at a meeting or
the shares of stock not consenting in the case of an action by written
consent are equal to more than sixteen and two-thirds percent (16-2/3%)
of the outstanding shares of stock entitled to vote. The directors need
not be stockholders of this corporation.
Section 3.3 Nomination, Election and Term of Office.
(a) Nominations. Nominations for the election of
directors may be made by the Board of Directors or by any stockholder
entitled to vote for the election of directors. Any stockholder
entitled to vote for the election of directors at a meeting may nominate
persons for election as directors only if written notice of such
stockholder's intent is given, either by personal delivery or by United
States 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 the stockholders, 90 days in advance of such meeting, and
(ii) with respect to an election to be held at a special meeting of the
stockholders for the election of directors, the close of business on the
seventh day following the date on which notice of such meeting was first
given to stockholders. Each such notice shall set forth: (A) the name
and address of the stockholder who intends to make the nomination and of
the person or persons to be nominated, (B) a representation that such
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 such
stockholder and each nominee and any other person or persons (naming
such person or persons) pursuant to which the nomination or nominations
are to be made by such stockholder, (D) such other information regarding
each nominee proposed by such stockholder as would have been required to
be included in a proxy statement filed pursuant to the proxy rules of
the Securities and Exchange Commission had each nominee been nominated,
or intended to be nominated, by the Board of Directors, and (E) the
consent of each nominee to serve as a director of the corporation, if
elected. The chairman of a stockholders' meeting may refuse to
acknowledge the nomination of any person not made in compliance with the
foregoing procedure.
(b) Election and Term of Office. Pursuant to the
provisions of Section 2.7, the directors shall be elected at the annual
meeting of the stockholders and shall hold office until the next annual
meeting. Subject to the provisions of Sections 3.5 and 3.6, each
director shall hold office until the expiration of the term for which
elected and until a successor has been elected and qualified.
Section 3.4 Vacancies. Except for a vacancy created by the
removal of a director, vacancies in the Board of Directors may be filled
by a majority of the remaining directors, whether or not less than a
quorum, or by a sole remaining director, and each director so elected
shall hold office until the next annual meeting of the stockholders and
until a successor has been elected. The stockholders shall elect a
director or directors to fill any vacancy created by removal, and the
stockholders may elect a director or directors at any time to fill a
vacancy not filled by the directors.
Section 3.5 Resignation. Any director may resign effective upon
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 is
effective at a future time, a successor may be elected to take office
when the resignation becomes effective.
Section 3.6 Removal. The Board of Directors may declare vacant
the office of a director who has been declared of unsound mind by order
of court, or who has been convicted of a felony. Any or all of the
directors may be removed without cause by an affirmative vote of a
majority of the outstanding shares of stock entitled to vote at an
election of directors.
Section 3.7 Place of Meetings. Meetings of the Board of Directors
may be held at any place which has been designated in the notice of the
meeting, or, if not stated in the notice or there is no notice,
designated in the Bylaws or by resolution of the Board of Directors. In
the absence of designation, meetings shall be held at the principal
executive office of the corporation.
Section 3.8 Regular Meetings. Immediately following, and at the
same place as, each annual meeting of stockholders, the Board of
Directors shall hold without call or notice other than this bylaw a
regular meeting for the purposes of organization, election of officers
and the transaction of other business. Other regular meetings of the
Board of Directors shall be held without notice at such time as from
time to time may be fixed by the Board of Directors.
Section 3.9 Special Meetings; Notice. Special meetings of the
Board of Directors may be called at any time by the chairman of the
board or the president or any vice president or the secretary or any two
directors. Notice of the time and place of all special meetings shall
be given to each director by any of the following means:
(a) By personal delivery, or by telephone or
telegraph at least 48 hours prior to the time of the meeting; or
(b) By first-class mail, postage prepaid, at least
four days prior to the time of the meeting.
Section 3.10 Waiver of Notice. The transactions of any
meeting of the Board of Directors, however called and noticed and
wherever held, are as valid as though had at a meeting duly held after
regular call and notice, if a quorum is present and if, either before or
after the meeting, each of the directors not present signs a written
waiver of notice or a consent to holding the meeting or an approval of
the minutes thereof. All such waivers, consents and approvals shall be
filed with the corporate records or made a part of the minutes of the
meeting. Notice of a meeting shall also be deemed waived by any
director who attends the meeting without protesting before or at its
commencement the lack of notice.
Section 3.11 Participation by Telephone. Members of the
Board of Directors may participate in a meeting through use of
conference telephone or similar communications equipment, as long as all
members participating in such meeting can hear one another.
Participation in a meeting pursuant hereto constitutes presence in
person at such meeting.
Section 3.12 Quorum and Action at Meeting. A majority of the
authorized number of directors shall constitute a quorum for the
transaction of business. Subject to the provisions of the General
Corporation Law of the State of Delaware, every act or decision done or
made by a majority of the directors present at a meeting duly held at
which a quorum is present is the act of the Board of Directors. 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 the required quorum for that meeting.
Section 3.13 Action Without Meeting. Any action required or
permitted to be taken by the Board of Directors may be taken without a
meeting, if all members of the board individually or collectively
consent in writing to the action. Such written consent or consents
shall be filed with the minutes of the board. Actions by written
consent shall have the same force and effect as a unanimous vote of the
directors.
Section 3.14 Committees. 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 and each of which, to the extent provided in the resolution
and as limited by the General Corporation Law of the State of Delaware,
shall have all the authority of the Board of Directors. Further, the
board may designate one or more directors as alternate members of any
committee, who may replace any absent member at any meeting of the
committee. Each committee shall serve at the pleasure of the board.
Section 3.15 Meetings and Action of Committees. Meetings and
action of committees shall be governed by, and held and taken in
accordance with, the provisions of Article III of these Bylaws, with
such changes in the context of these Bylaws as are necessary to
substitute the committee and its members for the Board of Directors and
its members, except that the time for regular meetings of committees may
be determined either by resolution of the Board of Directors or by
resolution of the committee. Special meetings of committees may also be
called by resolution of the Board of Directors. 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. Minutes
shall be kept of each meeting of any committee and shall be filed with
the corporate records. The Board of Directors may adopt such other
rules for the governance of any committee as are not inconsistent with
the provisions of these Bylaws.
Section 3.16 Compensation and Expenses of Directors.
Directors and members of committees shall not receive compensation for
their services or reimbursement for their expenses except in amounts
fixed or determined by resolution of the Board of Directors. This
Section 3.16 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.
ARTICLE IV - OFFICERS
Section 4.1 Officers. The officers of the corporation shall be a
chief executive officer or a president, a chief financial officer or a
treasurer, and a secretary, all of whom shall be chosen by and serve at
the pleasure of the Board of Directors. The corporation may also have,
at the discretion of the Board of Directors, a chairman of the board, a
chief operating officer, one or more vice presidents and such other
officers as may be deemed expedient for the proper conduct of the
business of the corporation, each of whom shall have such authority and
shall perform such duties as the Board of Directors may from time to
time determine. One person may hold two or more offices.
Section 4.2 Removal and Resignation. Subject to the rights, if
any, of an officer under any contract of employment, any officer may be
removed at any time, with or without cause, by the Board of Directors.
Any officer may resign at any time by giving written notice to the
corporation without prejudice to the rights, if any, of the corporation
under any contract to which the officer is a party. Any resignation
shall take effect at the date of the receipt of the notice or at any
later time specified in the notice, and unless otherwise specified in
the notice, the acceptance of the resignation shall not be necessary to
make it effective.
Section 4.3 Chairman of the Board. The Board of Directors may
elect a chairman, who shall preside, if present, at all board meetings
and, pursuant to the provisions of Section 2.1A of Article II of these
Bylaws, all stockholder meetings and shall exercise and perform such
other powers and duties as may be assigned from time to time by the
Board of Directors.
Section 4.3A Chief Executive Officer. The corporation's
chief executive officer, subject to the control of the Board of
Directors, shall have the general supervision, direction, and control
over the corporation's business and its officers. In addition to the
general powers and duties of the chief executive officer, such officer
shall have all such other powers and duties as prescribed by the Board
of Directors and the Bylaws. In the event that the corporation does not
elect a president, the chief executive officer shall exercise the powers
and duties of the president enumerated in Section 4.4 of the Bylaws.
Section 4.4 President. Except to the extent that these
Bylaws or the Board of Directors assign specific powers and duties to
the chairman of the board or the chief executive officer, the president
shall be the corporation's acting manager and, subject to the control of
the Board of Directors, shall be responsible for the quotidian
supervision, direction, and control of the corporation's business. In
the absence or disability of the chairman of the board and chief
executive officer, the chairman of the board and chief executive
officer's duties and responsibilities shall be carried out by the
president. In addition to the general powers and duties of the
president, such officer shall have all such other powers and duties as
prescribed by the Board of Directors and the Bylaws.
Section 4.4A Chief Operating Officer. Subject to the control
of the Board of Directors, the chairman of the board, the chief
executive officer and the president, the chief operating officer shall
be the corporation's acting operations manager and shall be responsible
for the quotidian operation of the corporation's business. In addition
to the general powers and duties of the chief operating officer, such
officer shall have all such other powers and duties as prescribed by the
Board of Directors and the Bylaws.
Section 4.5 Vice-Presidents. In the absence or disability of the
president, the vice-presidents, if any, in order of their rank as fixed
by the Board of Directors or, if not ranged, 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, the chairman of the board or the president.
Section 4.6 Secretary. The secretary shall keep a book of minutes
of all meetings and actions of directors, committees of directors and
stockholders. The minutes of each meeting shall state the time and
place that it was held and such other information as shall be necessary
to determine the actions taken thereat and whether the meeting was held
in accordance with the law and these Bylaws. The secretary shall keep
at the corporation's principal executive office, or at the office of its
transfer agent or registrar, a stock register showing the names and
addresses of all stockholders and the number and class of shares of
stock held by each. The secretary shall give notice of all meetings of
stockholders, directors and committees required to be given by these
Bylaws. The secretary shall keep the seal of the corporation in safe
custody and shall have such other powers and perform such other duties
as may be prescribed by the Board of Directors, the chairman of the
board or the president.
Section 4.7 Chief Financial Officer. The chief financial officer
shall have the custody of all moneys and securities of the corporation
and shall keep regular books of account. The chief financial officer
shall disburse the funds of the corporation in payment of the just
demands against the corporation or as may be ordered by the Board of
Directors, taking proper vouchers for such disbursements, and shall
render to the Board of Directors from time to time as may be required by
the Board of Directors, an account of all transactions as chief
financial officer and of the financial condition of the corporation.
The chief financial officer shall perform all duties incident to the
office or which are properly required by the Board of Directors, the
chairman of the board or the president.
Section 4.8 Salaries. The salaries of the officers may be fixed
from time to time by the Board of Directors, and no officer shall be
prevented from receiving such salary by reason of the fact that the
officer is also a director of the corporation.
ARTICLE V - MISCELLANEOUS
Section 5.1 Records and Inspection Rights. The corporation shall
keep such records (including stockholders' lists, accounting books,
minutes of meetings and other records) as are required by the General
Corporation Law of the State of Delaware, and these records shall be
open to inspection by the directors and stockholders of the corporation
to the extent permitted by the General Corporation Law of the State of
Delaware.
Section 5.2 Checks, Drafts, Evidences of Indebtedness. All
checks, drafts or other orders for payment of money, notes or other
evidences of indebtedness, issued in the name of, or payable to, the
corporation, shall be signed or endorsed by such person or persons and
in such manner as, from time to time, shall be determined by resolution
of the Board of Directors.
Section 5.3 Execution of Corporate Contracts and Instruments.
Subject to restrictions on contracts and transactions involving
directors and officers, as provided by Section 144 of the General
Corporation Law of the State of Delaware, the Board of Directors may
authorize any officer or officers or agent or agents, or appoint an
attorney or attorneys-in-fact, to enter into any contract or execute any
instrument in the name of, and on behalf of, the corporation, and this
authority may be general or confined to specific instances; and unless
so authorized or appointed, or unless afterwards ratified by the Board
of Directors, 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.
Section 5.4 Certificates for Shares. Every holder of shares of
stock in the corporation shall be entitled to have a certificate signed
in the name of the corporation by the chairman of the board or the
president or a vice-president and by the chief financial officer or the
secretary or an assistant secretary, certifying the number of shares of
stock and the class or series of shares of stock owned by the
stockholder. Any or all of the signatures on the certificate may be
facsimile. In case any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before
such certificate is issued, it may be issued by the corporation with the
same effect as if such person were an officer, transfer agent or
registrar at the date of issue.
Section 5.5 Lost, Stolen or Destroyed Certificates. The
corporation may issue a new stock certificate or a new certificate for
any other security in the place of any certificate theretofore issued by
it, alleged to have been lost, stolen or destroyed, and the corporation
may require the owner of the lost, stolen or destroyed certificate or
the owner's legal representative to give the corporation a bond (or
other adequate security) sufficient to indemnify it against any claim
that may be made against it (including any expense or liability) on
account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate.
Section 5.6 Corporate Seal. The corporation may have a corporate
seal in such form as shall be prescribed and adopted by the Board of
Directors.
Section 5.7 Indemnification of Corporate Agents. The corporation
shall indemnify each of its agents against expenses, judgments, fines,
settlements and other amounts, actually and reasonably incurred by such
person by reason of such person's having been made or having been
threatened to be made a party to a proceeding to the fullest extent
permissible by the provisions of Section 145 of the General Corporation
Law of the State of Delaware, and the corporation shall advance the
expenses reasonably expected to be incurred by such agent in defending
any such proceeding upon receipt of the undertaking required by
subdivision (f) of such Section. The terms "agent", "proceeding" and
"expenses" used in this Section 5.7 shall have the same contextual
meaning as such terms in said Section 145. The corporation may purchase
and maintain insurance on behalf of any agent of the corporation against
any liability asserted against, or incurred by, the agent in such
capacity or arising out of the agent's status as such, whether or not
the corporation would have the power to indemnify the agent against that
liability under the provisions of Section 145 of the General Corporation
Law of the State of Delaware.
ARTICLE VI - AMENDMENTS
Section 6.1 Amendment by Stockholders. New bylaws may be adopted
or these Bylaws may be amended or repealed by the affirmative vote of a
majority of the outstanding shares of stock entitled to vote, except as
otherwise provided by law or by the Certificate of Incorporation.
Section 6.2 Amendment by Directors. Subject to the right of
stockholders as provided in Section 6.1, bylaws other than a bylaw or
amendment thereof changing the maximum or minimum number of authorized
directors or changing from a variable to a fixed number of directors or
vice versa may be adopted, amended or repealed by the Board of
Directors.
CERTIFICATE OF SECRETARY
I, the undersigned, certify that I am the presently elected and
acting Secretary of BARRA, Inc., a Delaware corporation (the
"Corporation"), and that the above bylaws, consisting of nine (9) pages
including this page, are the Amended and Restated Bylaws of the
Corporation, as amended and adopted by resolution of the Board of
Directors of the Corporation on October 28, 1998.
Dated: October 28, 1999 /s/ Maria Hekker
Executed: Berkeley, California Maria Hekker, Secretary
41
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM CONDENSED CONSOLIDATED BALANCE SHEETS, CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-START> APR-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 30,000
<SECURITIES> 33,811
<RECEIVABLES> 52,220
<ALLOWANCES> 726
<INVENTORY> 0
<CURRENT-ASSETS> 117,581
<PP&E> 34,975
<DEPRECIATION> 17,082
<TOTAL-ASSETS> 168,250
<CURRENT-LIABILITIES> 57,893
<BONDS> 0
0
0
<COMMON> 1
<OTHER-SE> 99,555
<TOTAL-LIABILITY-AND-EQUITY> 168,250
<SALES> 142,018
<TOTAL-REVENUES> 142,018
<CGS> 6,248
<TOTAL-COSTS> 96,437 <F3>
<OTHER-EXPENSES> 13,910 <F1>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (1,095)<F2>
<INCOME-PRETAX> 26,518
<INCOME-TAX> 9,840
<INCOME-CONTINUING> 16,678
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,678
<EPS-BASIC> 1.19
<EPS-DILUTED> 1.14
<FN>
<F1>MINORITY INTEREST SHARE OF NET INCOME AND LOSS ON EQUITY JOINT VENTURES
<F2>REPRESENTS NET INTEREST INCOME
<F3>INCLUDES RESTRUCTURING CHARGES OF 5,561,000 (.23 PER DILUTED SHARE)
</FN>
</TABLE>
