<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
_____________________
Commission File Number 0-23078
MAPINFO CORPORATION
(Exact name of registrant as specified in its charter)
NEW YORK 06-1166630
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE GLOBAL VIEW
TROY, NEW YORK 12180
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (518) 285-6000
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 outstanding of the registrant's common stock, $.002 par
value per share, as of April 28, 1997 was 5,843,386.
================================================================================
<PAGE>
MAPINFO CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1997
INDEX
<TABLE>
<CAPTION>
PAGE
----
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements:
<S> <C>
Income Statements
for the three and six months ended March 31, 1997 and 1996 1
Balance Sheets
as of March 31, 1997 and September 30, 1996 2
Cash Flows Statements
for the six months ended March 31, 1997 and 1996 3
Notes to Financial Statements 4
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6
PART II. OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security Holders 1
ITEM 6. Exhibits and Reports on Form 8-K 2
Signatures 3
</TABLE>
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
MAPINFO CORPORATION AND SUBSIDIARIES
INCOME STATEMENTS
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Three Months Six Months
Ended March 31, Ended March 31,
--------------------------------- ------------------------------
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net revenues $12,236 $10,660 $22,331 $20,312
Cost of revenues 2,412 2,500 4,564 4,436
------------ ------------ ------------ ------------
Gross profit 9,824 8,160 17,767 15,876
------------ ------------ ------------ ------------
Operating expenses:
Research and development 2,212 1,899 4,296 3,389
Selling and marketing 6,009 4,844 11,500 9,993
General and
administrative 1,728 1,472 3,342 2,728
------------ ------------ ------------ ------------
Total operating
expenses 9,948 8,215 19,138 16,110
------------ ------------ ------------ ------------
Operating (loss) (124) (55) (1,371) (234)
Other income(expense) - net 230 225 344 598
------------ ------------ ------------ ------------
Income (loss) before
income taxes 106 170 (1,027) 364
Income tax provision
(benefit) 22 20 (216) 78
------------ ------------ ------------ ------------
Net income (loss) $ 84 $ 150 $ (811) $ 286
============ ============ ============ ============
Earnings (loss) per share
Primary $ 0.01 $ 0.03 $ (0.14) $ 0.05
Fully diluted $ 0.01 $ 0.03 $ (0.14) $ 0.05
Weighted average shares
outstanding
Primary 5,867 5,809 5,885 5,831
Fully diluted 5,867 5,809 5,885 5,831
</TABLE>
See accompanying notes.
3
<PAGE>
MAPINFO CORPORATION AND SUBSIDIARIES
BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
March 31, September 30,
1997 1996
----------------- ------------------
ASSETS (unaudited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents $25,989 $27,104
Short-term investments, at cost 4,478 4,795
Accounts receivable, less allowance of
$1,574 and $1,249 at March 31, 1997 and September 30, 1996,
respectively 7,791 7,581
Inventories, net 1,021 1,021
Other current assets 1,379 844
Income taxes receivable 100 260
Deferred income taxes 1,025 845
------- -------
Total current assets 41,783 42,450
Property and equipment - net 4,285 4,685
Product development costs - net 2,165 1,115
Deferred income taxes 385 385
Intangibles and other assets 793 456
------- -------
Total assets $49,411 $49,091
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 1,104 $1,751
Accrued expenses 5,445 4,820
Deferred revenue 2,336 1,451
Income taxes payable 342 536
------- -------
Total current liabilities 9,227 8,558
Other non-current liabilities 285 138
------- -------
Total liabilities 9,512 8,696
------- -------
Stockholders' Equity:
Common stock, $0.002 par 12 12
Paid in capital 30,062 29,824
Retained earnings 9,736 10,547
Translation adjustment 90 13
------- -------
39,900 40,396
Less treasury stock, at cost, 2 shares 1 1
------- -------
Total stockholders' equity 39,899 40,395
------- -------
Total liabilities and
stockholders' equity $49,411 $49,091
======= =======
See accompanying notes.
</TABLE>
4
<PAGE>
MAPINFO CORPORATION AND SUBSIDIARIES
CASH FLOWS STATEMENTS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
Six months ended March 31,
1997 1996
------------ ---------
CASH FLOWS FROM OPERATIONS
<S> <C> <C>
Net income (loss) ($811) $ 286
Depreciation and amortization 2,031 1,343
Allowance for doubtful accounts, 406 570
sales returns and inventory
Provision for deferred income taxes (190)
Changes in operating assets and
liabilities:
Accounts receivable (505) 155
Inventories (27) (973)
Other current assets (795) (165)
Current liabilities (79) (752)
Deferred revenue 1,034 63
--------- --------
NET CASH FROM OPERATIONS 1,064 527
--------- --------
CASH FLOWS (USED FOR) INVESTMENTS
Additions to property and equipment (1,084) (2,173)
Acquisition of SpatialWare technology (1,439)
Capitalized product development costs (232) (656)
Short-term investments and other
assets 317 (2,269)
--------- --------
NET CASH (USED FOR)
INVESTMENTS (2,438) (5,098)
--------- --------
CASH FLOWS FROM (USED FOR) FINANCING
Payments on notes payable, long term
debt and capital leases (76) (70)
Proceeds from exercise of options and 238 318
--------- --------
ESPP stock purchases
NET CASH FROM (USED
FOR) FINANCING 162 248
--------- --------
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS 97 (17)
--------- --------
NET CHANGE IN CASH AND EQUIVALENTS (1,115) (4,340)
Cash and equivalents, beginning of
period 27,104 14,846
--------- --------
Cash and equivalents, end of period $25,989 $10,506
========= ========
</TABLE>
5
<PAGE>
MAPINFO CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
In the opinion of management, the accompanying interim balance sheets and
related statements of income and cash flows include all adjustments (consisting
only of normal recurring items) necessary for their fair presentation. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amount of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
2. EARNINGS PER SHARE
Earnings per share are computed using the weighted average number of common and
dilutive common equivalent shares outstanding during the period. Dilutive
common equivalent shares consist of stock options using the treasury stock
method.
3. NEW ACCOUNTING STANDARDS
Statement of Financial Accounting Standards No. 121 - "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of" is
effective for fiscal years beginning after December 15, 1995. The Company
adopted this Statement on October 1, 1996. The adoption of this Statement did
not affect the Company's financial condition or results of operations. Statement
of Financial Accounting Standards No. 123 -"Accounting for Stock-Based
Compensation" is effective for fiscal years beginning after December 15, 1995.
The Company has elected to continue to apply APB Opinion No. 25 in accounting
for its stock-based compensation arrangements. The information for pro-forma
disclosure is presently not known. Effective December 31, 1997, the Company will
be required to implement Financial Accounting Standard No.128 - "Earnings per
Share". This standard replaces the presentation of primary earnings per share
(EPS) with a presentation of basic EPS. It also requires dual presentation of
basic and diluted EPS on the face of the income statement and requires a
reconciliation of the numerator and denominator of the basic EPS computation to
the numerator and denominator of the diluted EPS computation. Management has not
yet made a determination of the impact, if any, that the adoption of this
standard would have on the consolidated financial statements.
4. COMMON STOCK REPURCHASE PROGRAM
The Board of Directors has authorized the Company to implement a Common Stock
repurchase program under which the Company is authorized to purchase a maximum
of $5,000,000 of Common Stock on the open market or in negotiated transactions
from time to time. The Program will remain in effect until September 30, 1997
unless discontinued earlier by the Board of Directors. The Company intends to
use the repurchased shares for issuance upon the exercise of employee stock
options, purchases under the Company's stock purchase plan, or other corporate
purposes.
6
<PAGE>
5. SUBSEQUENT EVENTS
On April 10, 1997, the Company exercised an option, granted pursuant to an
October 2, 1996 agreement, to purchase the underlying intellectual property and
certain fixed assets of SpatialWare Canada Ltd. from Unisys Corporation. The
Company paid $1.439 million on October 2, 1996 for the option, and a nominal
amount upon the exercise of the option, and will make contingent cash payments,
up to a maximum of $1.5 million, based on revenues from the sale of SpatialWare
products.
In April 1997, the Company and its wholly owned subsidiary, MapInfo Limited,
entered into a fifteen year non-cancellable lease of an 11,000 square foot
office building in Windsor, England. The facility will house the Company's
European operations. Following a one year rent free period the annual rent,
based on current exchange rates, will be $387,182. The lease provides that the
annual rent shall be adjusted to the then fair market rent of the property after
the fifth and tenth years of the lease. In addition to the rent, the Company is
responsible for maintenance costs and service charges.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
OVERVIEW
MapInfo Corporation develops, manufactures, markets, licenses and supports
business mapping software and data products on a worldwide basis. The Company's
products and services include software, application development tools,
geographic and demographic data products, consulting services, training and
technical support for personal computers, workstations, and servers. The
Company has organized its operations into three principal operating units: the
Americas (North, Central and South America), Europe and Asia Pacific.
REVENUES
Revenues of $12.2 million for the second quarter of fiscal 1997 increased 15%
over revenues of $10.7 million reported in the year earlier period. For the six
months ended March 31, 1997, revenues increased to $22.3 million, a 10% increase
over the corresponding prior year period. The increase in revenues in the
second quarter was primarily attributable to increased unit sales of the
Company's software and data products in the Americas and Europe. In the
Americas, the increase in revenues in the second quarter was primarily
attributable to increased productivity from the inside sales organization. The
sale of recently-introduced products, ProServer, SpatialWare and MapX,
contributed $600 thousand and $1.7 million in revenues for the second quarter
and fiscal year to date, respectively. The year to date increase in revenues is
primarily attributable to increased unit sales of the Company's software and
data products in Europe and from the sale of recently-introduced products.
Sales to one distributor represented 8% of Company revenues in the second
quarter of fiscal 1997 and 7% of revenues for the six months ended March 31,
1997. In February 1997, the Company renewed its distribution contract with this
distributor, on an exclusive basis, through December 31, 1998.
COST OF REVENUES, OPERATING EXPENSES, AND INCOME TAXES
Cost of revenues as a percentage of revenues decreased from 23.5% of revenues in
the second quarter of fiscal 1996 to 19.7% of revenues in the second quarter of
fiscal 1997. As a result, the gross profit margin increased from 76.5% in the
second quarter of fiscal 1996 to 80.3% in the second quarter of fiscal 1997.
For the six months ended March 31, 1997, the gross profit margin increased to
79.6% up from 78.2% in the corresponding prior year period. The improvement in
gross profit margin in the second quarter was primarily attributable to the
increased percentage of sales from volume license arrangements.
Research and development expenses increased 17% to $2.2 million or 18.1% of
revenues in the second quarter of fiscal 1997 from $1.9 million or 17.8% of
revenues in the corresponding prior year period. Fiscal year to date expenses
increased 27% to $4.3 million from $3.4 million in the prior period. These
increases are primarily due to new product development costs.
Selling and marketing expenses increased 24% to $6.0 million in the second
quarter of fiscal 1997 from $4.8 million in the corresponding quarter of fiscal
1996. As a percentage of revenues,
8
<PAGE>
selling and marketing expenses were 45.4% and 49.1% of revenues in the second
quarters of fiscal 1996 and 1997, respectively. For the six months ended March
31, 1996 and 1997, selling and marketing expenses increased 15% from $10 million
to $11.5 million. As a percentage of revenues, selling and marketing expenses
were 49.2% and 51.5% for the first half of fiscal 1996 and 1997. The increase in
selling and marketing expenses in the second quarter and first half of fiscal
1997 was primarily attributable to increases in headcount in Europe and the
Americas, increased sales and marketing activities in Europe, and the costs of
launching new products.
General and administrative expenses of $1.7 million were 14.1% of revenues in
the second quarter of fiscal 1997 compared to $1.5 million or 13.8% of revenues
in the second quarter of fiscal 1996. General and administrative expenses were
$3.3 million and $2.7 million for the first half of fiscal 1997 and 1996,
respectively, representing 14.9% and 13.4% of revenues in the respective period.
The increase in general and administrative expenses reflects increased
compensation costs, higher professional fees and increased MIS costs in the
Company's domestic and international operations.
The fiscal year to date decline in other income is primarily due to $146
thousand in foreign currency losses and decreased interest income resulting from
lower cash balances.
The effective income tax rate was 21% in the second quarter of fiscal 1997
compared to 12% in the second quarter of fiscal 1996. For the six months ended
March 31, 1997 and 1996, the effective income tax rate was 21%.
FINANCIAL CONDITION
The Company's cash and short-term investments totaled $30.4 million at March 31,
1997, compared to $31.9 million at September 30, 1996. The portfolio was
invested primarily in short-term, liquid, taxable and tax-exempt securities.
MapInfo has no material long-term debt. The Company has a $20 million credit
facility with a bank that expires in December 1997, and a $10 million credit
facility with a bank that expires in January 1998. There were no outstanding
borrowings under either facility at March 31, 1997.
Cash generated from operations was $1.1 million for the six months ended March
31, 1997, compared to cash generated from operations of $0.5 million for the
corresponding period in the prior year. Cash used for investments of $2.4
million included $1.4 million for the acquisition of SpatialWare from Unisys
Corporation and $1.1 million in purchases of computer and other equipment.
The Board of Directors has authorized the Company to implement a Common Stock
repurchase program under which the Company is authorized to purchase a maximum
of $5,000,000 of Common Stock on the open market or in negotiated transactions
from time to time. The Program will remain in effect until September 30, 1997
unless discontinued earlier by the Board of Directors. The Company intends to
use the repurchased shares for issuance upon the exercise of
9
<PAGE>
employee stock options, purchases under the Company's stock purchase plan, or
other corporate purposes.
Management believes existing cash and short-term investments together with funds
generated from operations should be sufficient to meet the Company's operating
requirements for the next twelve months.
CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS
This Quarterly Report on Form 10-Q contains forward-looking statements. For
this purpose, any statements contained herein that are not statements of
historical fact may be deemed to be forward-looking statements. Without
limiting the foregoing, the words "believes," "anticipates," "plans," "expects,"
and similar expressions are intended to identify forward-looking statements.
The following important factors, among others, could cause actual results to
differ materially from those indicated by forward-looking statements made in
this Quarterly Report on Form 10-Q and presented elsewhere by management from
time to time.
In addition to the other information in this Quarterly Report on Form 10-Q, the
following issues and risks, among others, should be considered in evaluating
MapInfo's outlook and future.
New products and technological change. The mapping software business is
characterized by extremely rapid technological change, evolving industry
standards, and frequent new product introductions. These conditions require
continuous expenditures on product research and development to enhance existing
products and to create new products. The Company believes that the timely
development of new products and continuing enhancements to existing products is
essential to maintain its competitive position in the marketplace. Between
September and December 1996, the Company introduced three new products,
ProServer, SpatialWare and MapX. The Company's future success depends, in part,
upon customer and market acceptance of these new products. Any failure to
achieve acceptance of these and other new product offerings could have a
material adverse effect on the Company's business and results of operations.
There can be no assurance that the Company will successfully complete the
development of new or enhanced products or successfully manage transitions from
one product release to the next.
Competition. The Company encounters significant competition in the market for
business mapping systems. Increased competition may lead to pricing pressures
that could adversely affect the Company's gross margins. Prices of software in
Europe and Asia are generally higher than in the Americas to cover localization
costs and higher costs of distribution. Such price uplifts could erode in the
future.
Reliance on third parties. The Company relies in part on strategic partners and
independent developers for the development of specialized data products that use
MapInfo software. Failure by such strategic partners or independent developers
to continue to develop such data products, or changes in the contractual
arrangements with such strategic partners or independent developers, could have
a material adverse effect on the Company's business and results of operations.
10
<PAGE>
Expansion to enterprise market. The Company has previously marketed its
products primarily in the desktop mapping market. The Company has recently
expanded its product offerings beyond the desktop market to the enterprise and
Internet/intranet markets. Sales to the enterprise and Internet/intranet
markets are directed to different decision makers within customer organizations
and require different selling and marketing programs than are used in the
desktop market. The failure of these products to achieve market acceptance
could have a material adverse effect on the Company's business and results of
operations.
Prices. Future prices the Company is able to obtain for its products may
decrease from previous levels depending upon market or competitive pressures or
distribution channel factors.
Shift in distribution model. At the beginning of 1995, the Company implemented
a sales and marketing strategy in the Americas that placed increased emphasis on
third party distribution channels, principally using value added resellers, for
selling the Company's products and services in the Americas. This resulted in
an increasing percentage of the Americas revenues coming from value added
resellers and a decreasing percentage of revenues coming from direct sales
efforts. The average selling prices of the Company's products when sold to
value added resellers are typically lower than the average selling prices
realized by the Company when selling through direct sales channels. The
Company's future success will depend, in part, on its ability to grow revenues
in the Americas.
Intellectual property rights. The Company regards its software as proprietary
and attempts to protect it with a combination of copyright, trademark and trade
secret laws, employee and third party non-disclosure agreements, and other
methods of protection. Despite these precautions, it may be possible for
unauthorized third parties to copy certain portions of the Company's products or
reverse engineer or obtain and use information the Company regards as
proprietary. In addition, the Company's shrinkwrap licenses, under which the
Company licenses its products, may be unenforceable under the laws of certain
jurisdictions and the laws of some foreign countries do not protect the
Company's proprietary rights to the same extent as do the laws of the United
States. Any misappropriation of the Company's intellectual property could have
a material adverse effect on the Company's business and results of operations.
Furthermore, there can be no assurance that third parties will not assert
infringement claims against the Company in the future with respect to current or
future products. Any such assertion could require the Company to enter into
royalty arrangements or result in costly litigation.
Technology development and licensing fees. The Company derives a portion of its
product revenues from technology development and licensing fees from customers
that embed MapInfo technology into their own software applications. While the
Company continues to invest in research and development, there can be no
assurance that such technology development and licensing fees will continue in
the future.
Cost of revenues. Cost of revenues varies with the mix of technology
development and licensing fees, product revenues, and services revenues, as well
as with the distribution channel mix. Changes in the revenue mix, as well as
the distribution model, may continue to affect cost of revenues as a percentage
of net revenues in the future.
11
<PAGE>
Risks associated with international operations. Revenues outside the Americas
were 54% of revenues in the first half of fiscal 1996 and 50% of revenues in
the first half of fiscal 1997. The international portion of the Company's
business is subject to a number of inherent risks, including the difficulties in
building and managing international operations, difficulties in localizing
products and translating documentation into international languages,
fluctuations in the value of international currencies, fluctuating import/export
duties and quotas, and unexpected regulatory, economic, or political changes in
international markets. Changes in international business conditions could have
a material adverse effect on the Company's business and results of operations.
New accounting standards. Statement of Financial Accounting Standards No. 121 -
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of" is effective for fiscal years beginning after December 15, 1995.
The Company adopted this Statement on October 1, 1996. The adoption of this
Statement did not affect the Company's financial condition or results of
operations. Statement of Financial Accounting Standards No. 123 -"Accounting
for Stock-Based Compensation" is effective for fiscal years beginning after
December 15, 1995. The Company has elected to continue to apply APB Opinion No.
25 in accounting for its stock-based compensation arrangements. The information
for pro-forma disclosure is presently not known. Effective December 31, 1997,
the Company will be required to implement Financial Accounting Standard No.128 -
"Earnings per Share". This standard replaces the presentation of primary
earnings per share (EPS) with a presentation of basic EPS. It also requires
dual presentation of basic and diluted EPS on the face of the income statement
and requires a reconciliation of the numerator and denominator of the basic EPS
computation to the numerator and denominator of the diluted EPS computation.
Management has not yet made a determination of the impact, if any, that the
adoption of this standard would have on the consolidated financial statements.
12
<PAGE>
MAPINFO CORPORATION
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The annual meeting of the stockholders of the company was held on February 13,
1997 and was adjourned until March 20, 1997 with respect to the proposal
relating to an amendment to the 1993 Director Stock Option Plan. The following
matters were voted on at the stockholders meetings and the adjournment thereof.
<TABLE>
<CAPTION>
Broker
For Against Withheld Abstentions Non-Votes
--------- ------- -------- ----------- ---------
<S> <C> <C> <C> <C> <C>
ELECTION OF DIRECTORS:
- ----------------------------------------
Michael D. Marvin, Chairman 5,173,628 182,493
John C. Cavalier, President and 5,174,883 181,238
Chief Executive Officer
John F. Haller, Secretary 5,174,322 181,799
Laszlo C. Bardos 5,172,720 183,401
John F. Burton 4,663,702 692,419
George C. McNamee 4,873,781 482,340
Brian D. Owen 4,550,580 805,541
James A. Perakis 4,876,273 479,848
AMENDMENT TO THE 1993 STOCK INCENTIVE
PLAN
- ----------------------------------------
The shares authorized under the 1993
Stock Incentive Plan were
increased from 925,000 to 1,325,000
shares. 3,084,909 712,911 21,688 1,536,533
AMENDMENT TO THE 1993 DIRECTOR STOCK
OPTION PLAN
- ----------------------------------------
The annual option grant under the
Director Stock Option Plan
was amended from an option to purchase
3,000 shares of Common
Stock at an option exercise price
equal to the fair market value of
the Common Stock on the date of grant
to an option to purchase
5,000 shares of Common Stock at an option
exercise price equal to
the fair market value of the Common
Stock on the date of grant.
Additionally, the Plan was amended to
increase from 20,000 to
50,000 the number of shares of Common
Stock available for
issuance under the Plan. 3,046,364 901,989 26,707 1,467,320
AMENDMENT TO THE 1993 EMPLOYEE STOCK
PURCHASE PLAN
- ----------------------------------------
The number of shares of Common Stock
available for purchase by
employees under the 1993 Employee
Stock Purchase Plan was
increased from 100,000 to 200,000. 3,059,208 807,551 23,040 1,466,332
RATIFICATION OF COOPERS & LYBRAND
L.L.P. AS THE COMPANY'S
INDEPENDENT PUBLIC ACCOUNTANTS FOR THE
CURRENT FISCAL YEAR. 5,157,878 182,842 15,401
</TABLE>
13
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
The exhibits listed in the Exhibit Index filed as part of this report
are filed as part of this report or are included in this report.
(a) Reports on Form 8-K
No reports on Form 8-K were filed during the three months ended March 31,
1997.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MAPINFO CORPORATION
Date: April 30, 1997 By: /s/ D. Joseph Gersuk
--------------------------
D. Joseph Gersuk,
Executive Vice President
Finance and International
Operations, Chief Financial
Officer and Treasurer
(Principal Financial Officer)
15
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
- ------ ----------------------
10.3 1993 Stock Incentive Plan, as amended to date.
10.4 1993 Director Stock Option Plan, as amended to date.
11 Statement regarding computation of per share earnings
27 Financial Data Schedule
<PAGE>
EXHIBIT 10.3
MapInfo Corporation
1993 Stock Incentive Plan
-------------------------
Section 1. Purpose
-------
The purpose of this 1993 Stock Incentive Plan (the "Plan") is to advance
the interests of MapInfo Corporation by enhancing its ability to attract and
retain key employees, consultants and others who are in a position to contribute
to the Company's future growth and success.
Section 2. Definitions
-----------
"Award" means any Option, Stock Appreciation Right, Performance Share,
Restricted Stock or Unrestricted Stock awarded under the Plan.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Committee" means a committee of not less than two members of the Board
appointed by the Board to administer the Plan, provided that if and when the
Common Stock is registered under Section 12 of the Securities Exchange Act of
1934, each member of the Committee shall be a "disinterested person" within the
meaning of Rule 16b-3 under the Securities Exchange Act of 1934 ("Rule 16b-3").
"Common Stock" or "Stock" means the Common Stock, $.002 par value per
share, of the Company.
"Company" means MapInfo Corporation and, except where the content otherwise
requires, all present and future subsidiaries of the Company as defined in
Sections 424(f) of the Code.
"Designated Beneficiary" means the beneficiary designated by a Participant,
in a manner determined by the Board, to receive amounts due or exercise rights
of the Participant in the event of the Participant's death. In the absence of
an effective designation by a Participant, Designated Beneficiary shall mean the
Participant's estate.
<PAGE>
"Fair Market Value" means, with respect to Common Stock or any other
property, the fair market value of such property as determined by the Board in
good faith or in the manner established by the Board from time to time.
"Incentive Stock Option" means an option to purchase shares of Common Stock
awarded to a Participant under Section 6 which is intended to meet the
requirements of Section 422 of the Code or any successor provision.
"Nonstatutory Stock Option" means an option to purchase shares of Common
Stock awarded to a Participant under Section 6 which is not intended to be an
Incentive Stock Option.
"Option" means an Incentive Stock Option or a Nonstatutory Stock Option.
"Participant" means a person selected by the Board to receive an Award
under the Plan.
"Performance Shares" mean shares of Common Stock which may be earned by the
achievement of performance goals awarded to a Participant under Section 8.
"Reporting Person" means a person subject to Section 16 of the Securities
Exchange Act of 1934 or any successor provision.
"Restricted Period" means the period of time selected by the Board during
which shares subject to a Restricted Stock Award may be repurchased by or
forfeited to the Company.
"Restricted Stock" means shares of Common Stock awarded to a Participant
under Section 9.
"Stock Appreciation Right" or "SAR" means a right to receive any excess in
Fair Market Value of shares of Common Stock over the exercise price awarded to a
Participant under Section 7.
"Unrestricted Stock" means shares of Common Stock awarded to a Participant
under Section 9(c).
Section 3. Administration
--------------
The Plan will be administered by the Board. The Board shall have authority
to make Awards and to adopt, amend and repeal such administrative rules,
guidelines and practices relating to the Plan as it shall deem advisable from
time to time, and to interpret the provisions of the Plan. The Board's
decisions shall be final and binding. No member of the Board shall be liable for
any action or determination relating to
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<PAGE>
the Plan made in good faith. To the extent permitted by applicable law, the
Board may delegate to one or more executive officers of the Company the power to
make Awards to Participants who are not Reporting Persons and all determinations
under the Plan with respect thereto, provided that the Board shall fix the
maximum amount of such Awards to be made by such executive officers and a
maximum amount for any one Participant. To the extent permitted by applicable
law, the Board may appoint a Committee to administer the Plan and, in such
event, all references to the Board in the Plan shall mean such Committee or the
Board. All decisions by the Board or the Committee pursuant to the Plan shall be
final and binding on all persons having or claiming any interest in the Plan or
in any Award.
Section 4. Eligibility
-----------
All of the Company's employees, officers, directors, consultants and
advisors who are expected to contribute to the Company's future growth and
success, other than persons who have irrevocably elected not to be eligible, are
eligible to be Participants in the Plan. Incentive Stock Options may be awarded
only to persons eligible to receive Incentive Stock Options under the Code.
Section 5. Stock Available for Awards
--------------------------
(a) Subject to adjustment under subsection (b) below, Awards may be made
under the Plan for up to 400,000 shares of Common Stock. If any Award in
respect of shares of Common Stock expires or is terminated unexercised or is
forfeited for any reason or settled in a manner that results in fewer shares
outstanding than were initially awarded, the shares subject to such Award or so
surrendered, as the case may be, to the extent of such expiration, termination,
forfeiture or decrease, shall again be available for award under the Plan,
subject, however, in the case of Incentive Stock Options, to any limitation
required under the Code. Shares issued under the Plan may consist in whole or
in part of authorized but unissued shares or treasury shares.
(b) In the event that the Board, in its sole discretion, determines that
any stock dividend, extraordinary cash dividend, recapitalization,
reorganization, merger, consolidation, split-up, spin-off, combination or other
similar transaction affects the Common Stock such that an adjustment is required
in order to preserve the benefits or potential benefits intended to be made
available under the Plan, then the Board, subject, in the case of Incentive
Stock Options, to any limitation required under the Code, shall equitably adjust
any or all of (i) the number and kind of shares in respect of which Awards may
be made under the Plan, (ii) the number and kind of shares subject to
outstanding Awards, and (iii) the award, exercise or conversion price with
respect to any of the foregoing, and if considered appropriate, the Board may
make provision for a cash payment with respect to an outstanding Award, provided
that the number of shares subject to any Award shall always be a whole number.
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<PAGE>
(c) The Board may grant Awards under the Plan in substitution for stock and
stock based awards held by employees of another corporation who concurrently
become employees of the Company as a result of a merger or consolidation of the
employing corporation with the Company or a Subsidiary or the acquisition by the
Company or a subsidiary of property or stock of the employing corporation. The
substitute Awards shall be granted on such terms and conditions as the Board
considers appropriate in the circumstances. The shares which may be delivered
under such substitute Awards shall be in addition to the maximum number of
shares provided for in Section 5(a) only to the extent that the substitute
Awards are both (i) granted to persons whose relationship to the Company does
not make (and is not expected to make) them Reporting Persons; and (ii) granted
in substitution for awards issued under a plan approved, to the extent then
required under Rule 16b-3, by the stockholders of the entity which issued such
predecessor awards.
Section 6. Stock Options
-------------
(a) General.
-------
(i) Subject to the provisions of the Plan, the Board may award Incentive
Stock Options and Nonstatutory Stock Options, and determine the number of shares
to be covered by each Option, the option price therefor and the conditions and
limitations applicable to the exercise of the Option. The terms and conditions
of Incentive Stock Options shall be subject to and comply with Section 422 of
the Code, or any successor provision, and any regulations thereunder.
(ii) The Board shall establish the exercise price at the time each Option
is awarded. In the case of Incentive Stock Options, such price shall not be
less than 100% of the Fair Market Value of the Common Stock on the date of
award.
(iii) Each Option shall be exercisable at such times and subject to such
terms and conditions as the Board may specify in the applicable Award or
thereafter. The Board may impose such conditions with respect to the exercise of
Options, including conditions relating to applicable federal or state securities
laws, as it considers necessary or advisable.
(iv) Options granted under the Plan may provide for the payment of the
exercise price by delivery of cash or check in an amount equal to the exercise
price of such Options or, to the extent permitted by the Board at or after the
award of the Option, by (A) delivery of shares of Common Stock of the Company
owned by the optionee for at least six months (or such shorter period as is
approved by the Board), valued at their Fair Market Value, (B) delivery of a
promissory note of the optionee to the Company on terms determined by the Board,
(C) delivery of an irrevocable undertaking by a broker to deliver promptly to
the Company sufficient funds to pay the exercise price or delivery of
irrevocable instructions to a broker to
-4-
<PAGE>
deliver promptly to the Company cash or a check sufficient to pay the exercise
price, (D) payment of such other lawful consideration as the Board may
determine, or (E) any combination of the foregoing.
(v) The Board may provide for the automatic award of an Option upon the
delivery of shares to the Company in payment of the exercise price of an Option
for up to the number of shares so delivered.
(vi) The Board may at any time accelerate the time at which all or any part
of an Option may be exercised.
(b) Incentive Stock Options.
-----------------------
Options granted under the Plan which are intended to be Incentive Stock
Options shall be subject to the following additional terms and conditions:
(i) All Incentive Stock Options granted under the Plan shall, at the time
of grant, be specifically designated as such in the option agreement covering
such Incentive Stock Options. The Option exercise period shall not exceed ten
years from the date of grant.
(ii) If any employee to whom an Incentive Stock Option is to be granted
under the Plan is, at the time of the grant of such option, the owner of stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company (after taking into account the attribution of stock
ownership rule of Section 424(b) and of the Code), then the following special
provisions shall be applicable to the Incentive Stock Option granted to such
individual:
(x) The purchase price per share of the Common Stock subject to such
Incentive Stock Option shall not be less than 110% of the Fair Market Value of
one share of Common Stock at the time of grant; and
(y) The option exercise period shall not exceed five years from the date of
grant.
(iii) For so long as the Code shall so provide, options granted to any
employee under the Plan (and any other incentive stock option plans of the
Company) which are intended to constitute Incentive Stock Options shall not
constitute Incentive Stock Options to the extent that such options, in the
aggregate, become exercisable for the first time in any one calendar year for
shares of Common Stock with an aggregate Fair Market Value (determined as of the
respective date or dates of grant) of more than $100,000.
-5-
<PAGE>
(iv) No Incentive Stock Option may be exercised unless, at the time of such
exercise, the Participant is, and has been continuously since the date of grant
of his or her Option, employed by the Company, except that:
(x) an Incentive Stock Option may be exercised within the period of three
months after the date the Participant ceases to be an employee of the Company
(or within such lesser period as may be specified in the applicable option
agreement), provided, that the agreement with respect to such Option may
--------
designate a longer exercise period and that the exercise after such three-month
period shall be treated as the exercise of a Nonstatutory Stock Option under the
Plan;
(y) if the Participant dies while in the employ of the Company, or within
three months after the Participant ceases to be such an employee, the Incentive
Stock Option may be exercised by the Participant's Designated Beneficiary within
the period of one year after the date of death (or within such lesser period as
may be specified in the applicable Option agreement); and
(z) if the Participant becomes disabled (within the meaning of Section
22(e)(3) of the Code or any successor provision thereto) while in the employ of
the Company, the Incentive Stock Option may be exercised within the period of
one year after the date of death (or within such lesser period as may be
specified in the Option agreement).
For all purposes of the Plan and any Option granted hereunder, "employment"
shall be defined in accordance with the provisions of Section 1.421-7(h) of the
Income Tax Regulations (or any successor regulations). Notwithstanding the
foregoing provisions, no Incentive Stock Option may be exercised after its
expiration date.
Section 7. Stock Appreciation Rights
-------------------------
(a) The Board may grant Stock Appreciation Rights entitling recipients on
exercise of the SAR to receive an amount, in cash or Stock or a combination
thereof (such form to be determined by the Board), determined in whole or in
part by reference to appreciation in the Fair Market Value of the Stock between
the date of the Award and the exercise of the Award. A Stock Appreciation Right
shall entitle the Participant to receive, with respect to each share of Stock as
to which the SAR is exercised, the excess of the share's Fair Market Value on
the date of exercise over its Fair Market Value on the date the SAR was granted.
The Board may also grant Stock Appreciation Rights that provide that, following
a change in control of the Company (as defined by the Board at the time of the
Award), the holder of such SAR will be entitled to receive, with respect to each
share of Stock subject to the SAR, an amount equal to the excess of a specified
value (which may include an average of values) for
-6-
<PAGE>
a share of Stock during a period preceding such change in control over the Fair
Market Value of a share of Stock on the date the SAR was granted.
(b) Stock Appreciation Rights may be granted in tandem with, or
independently of, Options granted under the Plan. A Stock Appreciation Right
granted in tandem with an Option which is not an Incentive Stock Option may be
granted either at or after the time the Option is granted. A Stock Appreciation
Right granted in tandem with an Incentive Stock Option may be granted only at
the time the Option is granted.
(c) When Stock Appreciation Rights are granted in tandem with Options, the
following provisions will apply:
(i) The Stock Appreciation Right will be exercisable only at such time or
times, and to the extent, that the related Option is exercisable and will be
exercisable in accordance with the procedure required for exercise of the
related Option.
(ii) The Stock Appreciation Right will terminate and no longer be
exercisable upon the termination or exercise of the related Option, except that
a Stock Appreciation Right granted with respect to less than the full number of
shares covered by an Option will not be reduced until the number of shares as to
which the related Option has been exercised or has terminated exceeds the number
of shares not covered by the Stock Appreciation Right.
(iii) The Option will terminate and no longer be exercisable upon the
exercise of the related Stock Appreciation Right.
(iv) The Stock Appreciation Right will be transferable only with the
related Option.
(v) A Stock Appreciation Right granted in tandem with an Incentive Stock
Option may be exercised only when the market price of the Stock subject to the
Option exceeds the exercise price of such option.
(d) A Stock Appreciation Right not granted in tandem with an Option will
become exercisable at such time or times, and on such conditions, as the Board
may specify.
(e) The Board may at any time accelerate the time at which all or any part
of the SAR may be exercised.
Section 8. Performance Shares
------------------
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<PAGE>
(a) The Board may make Performance Share Awards entitling recipients to
acquire shares of Stock upon the attainment of specified performance goals. The
Board may make Performance Share Awards independent of or in connection with the
granting of any other Award under the Plan. The Board in its sole discretion
shall determine the performance goals applicable under each such Award, the
periods during which performance is to be measured, and all other limitations
and conditions applicable to the awarded Performance Shares; provided, however,
that the Board may rely on the performance goals and other standards applicable
to other performance plans of the Company in setting the standards for
Performance Share Awards under the Plan.
(b) Performance Share Awards and all rights with respect to such Awards may
not be sold, assigned, transferred, pledged or otherwise encumbered.
(c) A Participant receiving a Performance Share Award shall have the rights
of a stockholder only as to shares actually received by the Participant under
the Plan and not with respect to shares subject to an Award but not actually
received by the Participant. A Participant shall be entitled to receive a stock
certificate evidencing the acquisition of shares of Stock under a Performance
Share Award only upon satisfaction of all conditions specified in the agreement
evidencing the Performance Share Award.
(d) The Board may at any time accelerate or waive any or all of the goals,
restrictions or conditions imposed under any Performance Share Award.
Section 9. Restricted and Unrestricted Stock
---------------------------------
(a) The Board may grant Restricted Stock Awards entitling recipients to
acquire shares of Stock, subject to the right of the Company to repurchase all
or part of such shares at their purchase price (or to require forfeiture of such
shares if purchased at no cost) from the recipient in the event that conditions
specified by the Board in the applicable Award are not satisfied prior to the
end of the applicable Restricted Period or Restricted Periods established by the
Board for such Award. Conditions for repurchase (or forfeiture) may be based on
continuing employment or service or achievement of pre-established performance
or other goals and objectives.
(b) Shares of Restricted Stock may not be sold, assigned, transferred,
pledged or otherwise encumbered, except as permitted by the Board, during the
applicable Restricted Period. Shares of Restricted Stock shall be evidenced in
such manner as the Board may determine. Any certificates issued in respect of
shares of Restricted Stock shall be registered in the name of the Participant
and, unless otherwise determined by the Board, deposited by the Participant,
together with a stock power endorsed in blank, with the Company (or its
designee). At the expiration of the Restricted Period, the Company (or such
designee) shall deliver such
-8-
<PAGE>
certificates to the Participant or if the Participant has died, to the
Participant's Designated Beneficiary.
(c) The Board may, in its sole discretion, grant (or sell at a purchase
price determined by the Board, which shall not be lower than 85% of Fair Market
Value on the date of sale) to Participants shares of Stock free of any
restrictions under the Plan ("Unrestricted Stock").
(d) The purchase price for each share of Restricted Stock and Unrestricted
Stock shall be determined by the Board of Directors and may not be less than the
par value of the Common Stock. Such purchase price may be paid in the form of
past services or such other lawful consideration as is determined by the Board.
(e) The Board may at any time accelerate the expiration of the Restricted
Period applicable to all, or any particular, outstanding shares of Restricted
Stock.
Section 10. General Provisions Applicable to Awards
---------------------------------------
(a) Applicability of Rule 16b-3. Those provisions of the Plan which make
---------------------------
an express reference to Rule 16b-3 shall apply to the Company only at such time
as the Company's Common Stock is registered under the Securities Exchange Act of
1934, or any successor provision, and then only to Reporting Persons.
(b) Reporting Person Limitations. Notwithstanding any other provision of
----------------------------
the Plan, to the extent required to qualify for the exemption provided by Rule
16b-3, (i) any Option, SAR, Performance Share Award or other similar right
related to an equity security issued under the Plan to a Reporting Person shall
not be transferable other than by will or the laws of descent and distribution
or pursuant to a qualified domestic relations order as defined by the Code or
Title I of the Employee Retirement Income Security Act ("ERISA"), or the rules
thereunder, and shall be exercisable during the Participant's lifetime only by
the Participant or the Participant's guardian or legal representative, and (ii)
the selection of a Reporting Person as a Participant and the terms of his or her
Award shall be determined only in accordance with the applicable provisions of
Rule 16b-3.
(c) Documentation. Each Award under the Plan shall be evidenced by an
-------------
instrument delivered to the Participant specifying the terms and conditions
thereof and containing such other terms and conditions not inconsistent with the
provisions of the Plan as the Board considers necessary or advisable. Such
instruments may be in the form of agreements to be executed by both the Company
and the Participant, or certificates, letters or similar documents, acceptance
of which will evidence agreement to the terms thereof and of this Plan.
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<PAGE>
(d) Board Discretion. Each type of Award may be made alone, in addition to
----------------
or in relation to any other type of Award. The terms of each type of Award need
not be identical, and the Board need not treat Participants uniformly. Except
as otherwise provided by the Plan or a particular Award, any determination with
respect to an Award may be made by the Board at the time of award or at any time
thereafter.
(e) Termination of Status. Subject to the provisions of Section 6(b)(iv),
---------------------
the Committee shall determine the effect on an Award of the disability, death,
retirement, authorized leave of absence or other termination of employment or
other status of a Participant and the extent to which, and the period during
which, the Participant's legal representative, guardian or Designated
Beneficiary may exercise rights under such Award.
(f) Mergers, Etc. In the event of a consolidation, merger or other
------------
reorganization in which all of the outstanding shares of Common Stock are
exchanged for securities, cash or other property of any other corporation or
business entity (as "Acquisition") or in the event of a liquidation of the
Company, the Board of Directors of the Company, or the board of directors of any
corporation assuming the obligations of the Company, may, in its discretion,
take any one or more of the following actions as to outstanding Awards: (i)
provide that such Awards shall be assumed, or substantially equivalent Awards
shall be substituted, by the acquiring or succeeding corporation (or an
affiliate thereof) on such terms as the Board determines to be appropriate, (ii)
upon written notice to Participants, provide that all unexercised Options or
SARs will terminate immediately prior to the consummation of such transaction
unless exercised by the Participant within a specified period following the date
of such notice, (iii) in the event of an Acquisition under the terms of which
holders of the Common Stock of the Company will receive upon consummation
thereof a cash payment for each share surrendered in the Acquisition (the
"Acquisition Price"), make or provide for a cash payment to Participants equal
to the amount by which (A) the Acquisition Price times the number of shares of
Common Stock subject to outstanding Options or SARs (to the extent such Options
or SARs are then exercisable or would become exercisable on the date 18 months
after the effective date of such Acquisition) exceeds (B) the aggregate exercise
price of all such outstanding Options or SARs, in exchange for the termination
of such Options and SARs, and (iv) provide that all or any outstanding Awards
shall become exercisable or realizable in full prior to the effective date of
such Acquisition.
(g) Withholding. The Participant shall pay to the Company, or make
-----------
provision satisfactory to the Board for payment of, any taxes required by law to
be withheld in respect of Awards under the Plan no later than the date of the
event creating the tax liability. In the Board's discretion, and subject to
such conditions as the Board may establish, such tax obligations may be paid in
whole or in part in shares of Common Stock, including shares retained from the
Award creating the tax
-10-
<PAGE>
obligation, valued at their Fair Market Value. The Company may, to the extent
permitted by law, deduct any such tax obligations from any payment of any kind
otherwise due to the Participant.
(h) Foreign Nationals. Awards may be made to Participants who are foreign
-----------------
nationals or employed outside the United States on such terms and conditions
different from those specified in the Plan as the Board considers necessary or
advisable to achieve the purposes of the Plan or comply with applicable laws.
(i) Amendment of Award. The Board may amend, modify or terminate any
------------------
outstanding Award, including substituting therefor another Award of the same or
a different type, changing the date of exercise or realization and converting an
Incentive Stock Option to a Nonstatutory Stock Option, provided that the
Participant's consent to such action shall be required unless the Board
determines that the action, taking into account any related action, would not
materially and adversely affect the Participant.
(j) Cancellation and New Grant of Options. The Board of Directors shall
-------------------------------------
have the authority to effect, at any time and from time to time, with the
consent of the affected optionees, (i) the cancellation of any or all
outstanding Options under the Plan and the grant in substitution therefor of new
Options under the Plan covering the same or different numbers of shares of
Common Stock and having an option exercise price per share which may be lower or
higher than the exercise price per share of the cancelled Options or (ii) the
amendment of the terms of any and all outstanding Options under the Plan to
provide an option exercise price per share which is higher or lower than the
then current exercise price per share of such outstanding Options.
(k) Conditions on Delivery of Stock. The Company will not be obligated to
-------------------------------
deliver any shares of Stock pursuant to the Plan or to remove restrictions from
shares previously delivered under the Plan (i) until all conditions of the Award
have been satisfied or removed, (ii) until, in the opinion of the Company's
counsel, all applicable federal and state laws and regulations have been
complied with, (iii) if the outstanding Stock is at the time listed on any stock
exchange, until the shares to be delivered have been listed or authorized to be
listed on such exchange upon official notice of notice of issuance, and (iv)
until all other legal matters in connection with the issuance and delivery of
such shares have been approved by the Company's counsel. If the sale of Stock
has not been registered under the Securities Act of 1933, as amended, the
Company may require, as a condition to exercise of the Award, such
representations or agreements as the Company may consider appropriate to avoid
violation of such Act and may require that the certificates evidencing such
Stock bear an appropriate legend restricting transfer.
Section 11. Miscellaneous
-------------
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<PAGE>
(a) No Right To Employment or Other Status. No person shall have any claim
--------------------------------------
or right to be granted an Award, and the grant of an Award shall not be
construed as giving a Participant the right to continued employment or service
for the Company. The Company expressly reserves the right at any time to
dismiss a Participant free from any liability or claim under the Plan, except as
expressly provided in the applicable Award.
(b) No Rights As Stockholder. Subject to the provisions of the applicable
------------------------
Award, no Participant or Designated Beneficiary shall have any rights as a
stockholder with respect to any shares of Common Stock to be distributed under
the Plan until he or she becomes the record holder thereof.
(c) Exclusion from Benefit Computations. No amounts payable upon exercise
-----------------------------------
of Awards granted under the Plan shall be considered salary, wages or
compensation to Participants for purposes of determining the amount or nature of
benefits that Participants are entitled to under any insurance, retirement or
other benefit plans or programs of the Company.
(d) Effective Date and Term. Subject to the approval of the stockholders
-----------------------
of the Company, the Plan shall be effective on November 23, 1993. Prior to such
approval, Awards may be made under the Plan expressly subject to such approval.
No Award may be made under the Plan after November 23, 2003, but Awards
previously granted may extend beyond that date.
(e) Amendment of Plan. The Board may amend, suspend or terminate the Plan
-----------------
or any portion thereof at any time, provided that no amendment shall be made
without stockholder approval if such approval is necessary to comply with any
applicable tax or regulatory requirement, including any requirements for
compliance with Rule 16b-3. Prior to any such approval, Awards may be made
under the Plan expressly subject to such approval.
(f) Governing Law. The provisions of the Plan shall be governed by and
-------------
interpreted in accordance with the laws of the State of New York.
Adopted by the Board of Directors
on November 23, 1993
Approved by the Stockholders
on December 8, 1993
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<PAGE>
AMENDMENT NO. 1 TO THE 1993 STOCK INCENTIVE PLAN
OF MAPINFO CORPORATION
The first sentence of Subsection 5(a) of the 1993 Stock Incentive Plan (the
"Plan") of MapInfo Corporation is hereby amended and restated in its entirety to
provide as follows:
"Subject to adjustment under subsection (b) below, Awards may be made under
the Plan for up to 675,000 shares of Common Stock."
Subsection 8(e) of the Plan is hereby added to the Plan to provide as
follows:
"(e) Subject to adjustment as provided in Subsection 5(b) above, the
maximum number of shares with respect to which Options may be granted to any
employee under the Plan shall not exceed 200,000 shares of Common Stock during
any one calendar year. For purposes of calculating such maximum number, (a) an
Option shall continue to be treated as outstanding notwithstanding its
repricing, cancellation or expiration and (b) the repricing of an outstanding
Option or the issuance of a new Option in substitution for a cancelled Option
shall be deemed to constitute the grant of a new additional Option separate from
the original grant of the Option that is repriced or cancelled."
Adopted by the Board of Directors on
December 9, 1994
Approved by the Stockholders
on January 20, 1995
<PAGE>
AMENDMENT NO. 2 TO THE 1993 STOCK INCENTIVE PLAN
OF MAPINFO CORPORATION
The first sentence of Subsection 5(a) of the 1993 Stock Incentive Plan (the
"Plan") of MapInfo Corporation is hereby amended and restated in its entirety,
subject to stockholder approval, to provide as follows:
"Subject to adjustment under subsection (b) below, Awards may be made under
the Plan for up to 925,000 shares of Common Stock."
Adopted by the Board of Directors on
October 20, 1995
Approved by the Stockholders on
February 2, 1996
<PAGE>
AMENDMENT NO. 3 TO THE 1993 STOCK INCENTIVE PLAN
OF MAPINFO CORPORATION
The first sentence of Subsection 5(a) of the 1993 Stock Incentive Plan (the
"Plan") of MapInfo Corporation is hereby amended and restated in its entirety,
subject to stockholder approval, to provide as follows:
"Subject to adjustment under subsection (b) below, Awards may be made under
the Plan for up to 1,325,000 shares of Common Stock."
Adopted by the Board of Directors on
November 12, 1996
Approved by the Stockholders on
February 13, 1997
<PAGE>
AMENDMENT NO. 4 TO THE 1993 STOCK INCENTIVE PLAN
OF MAPINFO CORPORATION
The definition of "Committee" contained in Section 2 of the 1993 Stock
Incentive Plan (the "Plan") of MapInfo Corporation is hereby amended and
restated in its entirety, to provide as follows:
"'Committee' means a committee of not less than two members of the Board
appointed by the Board to administer the Plan, provided that if and when the
Common Stock is registered under Section 12 of the Securities Exchange Act of
1934, each member of the Committee shall be a "Non-Employee Director", as such
term is defined in Rule 16b-3 under the Securities Exchange Act of 1934, as
amended ("Rule 16b-3"), and an "Outside Director", as such term is defined in
the Code."
Adopted by the Board of Directors
on December 9, 1996
<PAGE>
EXHIBIT 10.4
MapInfo Corporation
1993 Director Stock Option Plan
-------------------------------
1. Purpose
-------
The purpose of this 1993 Director Stock Option Plan (the "Plan") of MapInfo
Corporation (the "Company") is to encourage ownership in the Company by outside
directors of the Company whose continued services are considered essential to
the Company's future progress and to provide them with a further incentive to
remain as directors of the Company.
2. Administration
--------------
The Board of Directors shall supervise and administer the Plan. Grants of
stock options under the Plan and the amount and nature of the awards to be
granted shall be automatic in accordance with Section 5. However, all questions
of interpretation of the Plan or of any options issued under it shall be
determined by the Board of Directors and such determination shall be final and
binding upon all persons having an interest in the Plan.
3. Participation in the Plan
-------------------------
Directors of the Company who are not employees of the Company or any
subsidiary of the Company shall be eligible to participate in the Plan.
4. Stock Subject to the Plan
-------------------------
(a) The maximum number of shares which may be issued under the Plan shall
be 20,000 shares of the Company's Common Stock, par value $.002 per share
("Common Stock"), subject to adjustment as provided in Section 9 of the Plan.
(b) If any outstanding option under the Plan for any reason expires or is
terminated without having been exercised in full, the shares allocable to the
unexercised portion of such option shall again become available for grant
pursuant to the Plan.
(c) All options granted under the Plan shall be
non-statutory options not entitled to special tax treatment under Section 422 of
the Internal Revenue Code of 1986, as amended to date and as it may be amended
from time to time (the "Code").
5. Terms, Conditions and Form of Options
-------------------------------------
<PAGE>
Each option granted under the Plan shall be evidenced by a written
agreement in such form as the Board of Directors shall from time to time
approve, which agreements shall comply with and be subject to the following
terms and conditions:
(a) Option Grants. On the date of each annual meeting of stockholders of
-------------
the Company, the Company shall grant to each eligible director an option for
such number of shares of Common Stock equal to $20,000 divided by the option
exercise price per share for each such option (the "Annual Option").
(b) Option Exercise Price. The option exercise price per share for each
---------------------
option granted under the Plan shall equal (i) the last reported sales price per
share of the Company's Common Stock on the NASDAQ National Market System (or, if
the Company is traded on a nationally recognized securities exchange on the date
of grant, the reported closing sales price per share of the Company's Common
Stock by such exchange) on the date of grant (or if no such price is reported on
such date such price as reported on the nearest preceding day) or (ii) if the
Common Stock is not traded on NASDAQ or an exchange, the fair market value per
share on the date of grant as most recently determined by the Board of
Directors.
(c) Options Non-Transferable. Each option granted under the Plan by its
------------------------
terms shall not be transferable by the optionee otherwise than by will, or by
the laws of descent and distribution, and shall be exercised during the lifetime
of the optionee only by him. No option or interest therein may be transferred,
assigned, pledged or hypothecated by the optionee during his lifetime, whether
by operation of law or otherwise, or be made subject to execution, attachment or
similar process.
(d) Exercise Period. Each Annual Option shall become exercisable at the
---------------
end of nine years and nine months after the date of grant, provided that such
--------
option shall become exercisable one year after the date of grant if the director
has attended during such year at least 75% of the aggregate of the number of
meetings of the Board of Directors and the number of meetings held by all
committees on which he then served. In the event an optionee ceases to serve as
a director, each such option may be exercised by the optionee (or, in the event
of his death, by his administrator, executor or heirs), at any time within 12
months after the optionee ceases to serve as a director, to the extent such
option was exercisable at the time of such cessation of service.
Notwithstanding the foregoing, no option shall be exercisable after the
expiration of ten years from the date of grant.
(e) Exercise Procedure. Options may be exercised only by written notice to
------------------
the Company at its principal office accompanied by (i) payment in cash of the
full consideration for the shares as to which they are exercised or (ii) an
irrevocable undertaking by a broker to deliver promptly to the Company
sufficient
-2-
<PAGE>
funds to pay the exercise price or delivery of irrevocable instructions to a
broker to deliver promptly to the Company cash or a check sufficient to pay the
exercise price.
6. Assignments
-----------
The rights and benefits of participants under the Plan may not be assigned,
whether voluntarily or by operation of law, except as provided in Section 5(d).
7. Effective Date
--------------
The Plan shall become effective immediately upon its adoption by the Board
of Directors, but all grants of options shall be conditional upon the approval
of the Plan by the stockholders of the Company within 12 months after adoption
of the Plan by the Board of Directors.
8. Limitation of Rights
--------------------
(a) No Right to Continue as a Director. Neither the Plan, nor the granting
----------------------------------
of an option nor any other action taken pursuant to the Plan, shall constitute
or be evidence of any agreement or understanding, express or implied, that the
Company will retain a director for any period of time.
(b) No Stockholders' Rights for Options. An optionee shall have no rights
-----------------------------------
as a stockholder with respect to the shares covered by his options until the
date of the issuance to him of a stock certificate therefor, and no adjustment
will be made for dividends or other rights (except as provided in Section 9) for
which the record date is prior to the date such certificate is issued.
9. Changes in Common Stock
-----------------------
(a) If the outstanding shares of Common Stock are increased, decreased or
exchanged for a different number or kind of shares or other securities, or if
additional shares or new or different shares or other securities are distributed
with respect to such shares of Common Stock or other securities, through merger,
consolidation, sale of all or substantially all of the assets of the Company,
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split or other distribution with respect to such shares of Common
Stock, or other securities, an appropriate and proportionate adjustment will be
made in (i) the maximum number and kind of shares reserved for issuance under
the Plan, (ii) the number and kind of shares or other securities subject to then
outstanding options under the Plan and (iii) the price for each share subject to
any then outstanding options under the Plan, without changing the aggregate
purchase price as to which
-3-
<PAGE>
such options remain exercisable. No fractional shares will be issued under the
Plan on account of any such adjustments.
(b) In the event that the Company is merged or consolidated into or with
another corporation (in which consolidation or merger the stockholders of the
Company receive distributions of cash or securities of another issuer as a
result thereof), or in the event that all or substantially all of the assets of
the Company are acquired by any other person or entity, or in the event of a
reorganization or liquidation of the Company, the Board of Directors of the
Company, or the board of directors of any corporation assuming the obligations
of the Company, shall, as to outstanding options, either (i) provide that such
options shall be assumed, or equivalent options shall be substituted, by the
acquiring or successor corporation (or an affiliate thereof), or (ii) upon
written notice to the optionees, provide that all unexercised options will
terminate immediately prior to the consummation of such merger, consolidation,
acquisition, reorganization or liquidations unless exercised by the optionee
within a specified number of days following the date of such notice.
10. Amendment of the Plan
---------------------
The Board of Directors may suspend or discontinue the Plan or review or
amend it in any respect whatsoever; provided, however, that without approval of
the stockholders of the Company no revision or amendment shall change the number
of shares subject to the Plan (except as provided in Section 9), change the
designation of the class of directors eligible to receive options, or materially
increase the benefits accruing to participants under the Plan. The Plan may not
be amended more than once in any six-month period.
11. Governing Law
-------------
The Plan and all determinations made and actions taken pursuant hereto
shall be governed by the laws of the State of New York.
Adopted by the Board of Directors
on November 23, 1993
Approved by the stockholders
on December 8, 1993
-4-
<PAGE>
AMENDMENT NO. 1 TO THE 1993 DIRECTOR STOCK OPTION PLAN
OF MAPINFO CORPORATION
The first sentence of Subsection 5(a) of the 1993 Director Stock Option
Plan (the "Plan") of MapInfo Corporation is hereby amended and restated in its
entirety to provide as follows:
"(a) Option Grants. On the date of each annual meeting of stockholders of
-------------
the Company, the Company shall grant to each eligible director an option for
such number of shares of Common Stock equal to $40,000 divided by the option
exercise price per share for each stock option (the "Annual Option")."
Adopted by the Board of Directors on
December 9, 1994
Approved by the Stockholders
on January 20, 1995
<PAGE>
AMENDMENT NO. 2 TO THE 1993 DIRECTOR STOCK OPTION PLAN
OF MAPINFO CORPORATION
The first sentence of Subsection 5(a) of the 1993 Director Stock Option
Plan (the "Plan") of MapInfo Corporation is hereby amended and restated in its
entirety, subject to stockholder approval, to provide as follows:
"(a) Option Grants. On the date of each annual meeting of stockholders of
-------------
the Company, the Company shall grant to each eligible director an option for
3,000 shares of Common Stock (the "Annual Option")."
Adopted by the Board of Directors on
December 19, 1995
Approved by the Stockholders on
February 2, 1996
<PAGE>
AMENDMENT NO. 3 TO THE 1993 DIRECTOR STOCK OPTION PLAN
OF MAPINFO CORPORATION
Subsection 4(a) of the 1993 Director Stock Option Plan (the "Plan") of
MapInfo Corporation is hereby amended and restated in its entirety, subject to
stockholder approval, to provide as follows:
"(a) The maximum number of shares which may be issued under the Plan shall
be 50,000 shares of the Company's Common Stock, par value $.002 per share
("Common Stock"), subject to adjustment as provided in Section 9 of the Plan."
The first sentence of Subsection 5(a) of the Plan is hereby amended and
restated in its entirety, subject to stockholder approval, to provide as
follows:
"(a) Option Grants. On the date of each annual meeting of stockholders of
-------------
the Company, the Company shall grant to each eligible director an option for
5,000 shares of Common Stock (the "Annual Option")."
Adopted by the Board of Directors on
November 12, 1996
Approved by the Stockholders on
March 20, 1997
<PAGE>
AMENDMENT NO. 4 TO THE 1993 DIRECTOR STOCK OPTION PLAN
OF MAPINFO CORPORATION
Section 5(c) of the 1993 Director Stock Option Plan (the "Plan") of MapInfo
Corporation is hereby amended and restated in its entirety to provide as
follows:
"(c) Options Non-Transferable. Except as otherwise provided in the option
------------------------
agreement evidencing the option grant, each option granted under the Plan shall
not be transferable by the optionee otherwise than by will, or by the laws of
descent and distribution, and shall be exercised during the lifetime of the
optionee only by him."
Section 10 of the Plan is hereby amended and restated in its entirety to
read as follows:
"10. Amendment of the Plan. The Board of Directors may at any time, and
----------------------
from time, modify, terminate or amend the Plan in any respect, except that if at
any time the approval of the stockholders of the Company is required as to such
modification or amendment under any applicable tax or regulatory requirement,
the Board of Directors may not effect such modification or amendment without
such approval."
Adopted by the Board of Directors on
December 9, 1996
<PAGE>
EXHIBIT 11
MAPINFO CORPORATION AND SUBSIDIARIES
EXHIBIT 11 STATEMENT REGARDING COMPUTATION OF PER SHARE
EARNINGS
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Three Months Six Months
Ended March 31, Ended March 31,
----------------- ----------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
PRIMARY
Average shares outstanding 5,788 5,664 5,782 5,657
Net effect of dilutive stock
options - based on the
treasury stock method using
average market price 79 145 103 174
------ ------ ------ ------
Total 5,867 5,809 5,885 5,831
====== ====== ====== ======
Net income (loss) $ 84 $ 150 $ (811) $ 286
====== ====== ====== ======
Earnings (loss) per share $ 0.01 $ 0.03 $(0.14) $ 0.05
====== ====== ====== ======
FULLY DILUTED
Average shares outstanding 5,788 5,664 5,782 5,657
Net effect of dilutive stock
options - based on the
treasury stock method using the
year-end market
price, if higher than the
average market price 79 145 103 174
------ ------ ------ ------
Total 5,867 5,809 5,885 5,831
====== ====== ====== ======
Net income (loss) $ 84 $ 150 $ (811) $ 286
====== ====== ====== ======
Earnings (loss) per share $ 0.01 $ 0.03 $(0.14) $ 0.05
====== ====== ====== ======
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM INCOME
STATEMENT AND BALANCE SHEET AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 25,989
<SECURITIES> 4,478
<RECEIVABLES> 7,791
<ALLOWANCES> 1,574
<INVENTORY> 1,021
<CURRENT-ASSETS> 41,783
<PP&E> 4,285
<DEPRECIATION> 761
<TOTAL-ASSETS> 49,411
<CURRENT-LIABILITIES> 9,227
<BONDS> 0
0
0
<COMMON> 12
<OTHER-SE> 39,887
<TOTAL-LIABILITY-AND-EQUITY> 49,411
<SALES> 12,236
<TOTAL-REVENUES> 12,236
<CGS> 2,412
<TOTAL-COSTS> 9,948
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 106
<INCOME-TAX> 22
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 84
<EPS-PRIMARY> 0.01
<EPS-DILUTED> 0.01
</TABLE>
