<PAGE>
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, 1998
_____________________
Commission File Number 0-23078
MAPINFO CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 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 May 1, 1998 was 5,928,532.
<PAGE>
MAPINFO CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1998
INDEX
Page
----
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements:
Income Statements
for the three and six months ended March 31, 1998 and 1997 3
Balance Sheets
as of March 31, 1998 and September 30, 1997 4
Cash Flows Statements
for the six months ended March 31, 1998 and 1997 5
Notes to Financial Statements 6
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II. OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security Holders 14
ITEM 6. Exhibits and Reports on Form 8-K 15
Signatures 16
2
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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,
-------------------------------- ------------------------------
1998 1997 1998 1997
-------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Net revenues $14,897 $12,236 $28,042 $22,331
Cost of revenues 3,350 2,413 6,204 4,564
-------------- -------------- ------------- -------------
Gross profit 11,547 9,823 21,838 17,767
-------------- -------------- ------------- -------------
Operating expenses:
Research and development 2,676 2,211 5,107 4,296
Selling and marketing 6,150 6,010 12,222 11,500
General and administrative 1,941 1,727 3,627 3,342
-------------- -------------- ------------- -------------
Total operating expenses 10,767 9,948 20,956 19,138
-------------- -------------- ------------- -------------
Operating income (loss) 780 (125) 882 (1,371)
Other income - net 201 230 479 344
-------------- -------------- ------------- -------------
Income (loss) before provision for
income taxes 981 105 1,361 (1,027)
Provision for (benefit from) income taxes 217 22 293 (216)
-------------- -------------- ------------- -------------
Net income (loss) $ 764 $ 83 $ 1,068 $ (811)
============== ============== ============= =============
Earnings (loss) per share:
Basic $0.13 $0.01 $0.18 $(0.14)
Dilutive $0.13 $0.01 $0.18 $(0.14)
Weighted average shares outstanding:
Basic 5,856 5,788 5,877 5,782
Dilutive 5,991 5,867 5,986 5,782
</TABLE>
See accompanying notes.
3
<PAGE>
MAPINFO CORPORATION AND SUBSIDIARIES
BALANCE SHEETS
(in thousands, except per share data)
<TABLE>
<CAPTION>
March 31, September 30,
1998 1997
----------------- ------------------
(unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $16,146 $24,711
Short-term investments, at cost 14,735 6,500
Accounts receivable, less allowance of $1,233 and $1,158
at March 31, 1998 and September 30, 1997, respectively 10,939 9,291
Inventories 824 866
Other current assets 1,842 1,288
Income taxes receivable 86 188
Deferred income taxes 666 669
------------- ------------
Total current assets 45,238 43,513
Property and equipment - net 4,871 3,809
Product development costs - net 1,411 1,739
Deferred income taxes 1,146 1,146
Intangibles and other assets 4,149 835
------------- ------------
Total assets $56,815 $51,042
============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 1,652 $ 1,778
Accrued liabilities 9,264 5,603
Deferred revenue 3,072 2,380
Income taxes payable 843 575
------------- ------------
Total current liabilities 14,831 10,336
Other non-current liabilities 131 211
------------- ------------
Total liabilities 14,962 10,547
------------- ------------
Commitments and Contingencies
Stockholders' Equity:
Common stock, $.002 par value 12 12
Preferred stock, $.01 par value - -
Paid-in capital 31,151 30,795
Retained earnings 11,621 10,552
Translation adjustment 18 15
------------- ------------
42,802 41,374
------------- ------------
Less treasury stock, at cost 949 879
------------- ------------
Total stockholders' equity 41,853 40,495
------------- ------------
Total liabilities and stockholders' equity $56,815 $51,042
============= ============
</TABLE>
See accompanying notes.
4
<PAGE>
MAPINFO CORPORATION AND SUBSIDIARIES
CASH FLOWS STATEMENTS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
Six months
Ended March 31,
-----------------------------------
1998 1997
-------------- --------------
<S> <C> <C>
CASH FLOWS FROM (USED FOR) OPERATING ACTIVITIES
Net income (loss) $ 1,068 $ (811)
Depreciation and amortization 2,089 2,031
Allowance for doubtful accounts and returns 89 406
Provision for deferred income taxes - (190)
Changes in operating assets and liabilities, net of effect from
acquisition:
Accounts receivable (1,158) (505)
Inventories 79 (27)
Other current assets (401) (795)
Accounts payable and accrued liabilities 1,458 (79)
Deferred revenue 596 1,034
-------------- --------------
NET CASH FROM OPERATING ACTIVITIES 3,820 1,064
-------------- --------------
CASH FLOWS FROM (USED FOR) INVESTING ACTIVITIES
Additions to property and equipment (1,810) (1,084)
Capitalized product development costs (152) (232)
Purchases of business, technology and other assets (2,088) (1,589)
Short-term investments (8,235) 467
-------------- --------------
NET CASH USED FOR INVESTING ACTIVITIES (12,285) (2,438)
-------------- --------------
CASH FLOWS FROM (USED FOR) FINANCING ACTIVITIES
Payments on notes payable, long term debt and capital leases - (76)
Purchase of common stock for treasury (828) -
Proceeds from exercise of options and ESPP stock purchases 693 238
-------------- --------------
NET CASH FROM (USED FOR) FINANCING ACTIVITIES (135) 162
-------------- --------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS 35 97
-------------- --------------
NET CHANGE IN CASH AND EQUIVALENTS (8,565) (1,115)
Cash and equivalents, beginning of period 24,711 27,104
-------------- --------------
Cash and equivalents, end of period $ 16,146 $25,989
============== ==============
</TABLE>
See accompanying notes.
5
<PAGE>
MAPINFO CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
In the opinion of management, the accompanying 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.
The year-end balance sheet data was derived from audited financial statements,
but does not include all disclosures required by generally accepted accounting
principles.
Certain reclassifications have been made to amounts previously reported to
conform with the 1998 presentation.
2. EARNINGS PER SHARE
The Company adopted Statement of Financial Accounting Standards (SFAS) No. 128 -
- - "Earnings Per Share" in fiscal year 1998. The following represents the
reconciliation of the basic and dilutive earnings per share amounts for the
three months and six months ended March 31, 1998 and 1997. Amounts presented
for 1997 have been restated to conform with the provisions of SFAS No. 128.
<TABLE>
<CAPTION>
Three months Six months
Ended March 31, Ended March 31,
------------------------------ --------------------------
1998 1997 1998 1997
------------- ------------ ----------- -----------
(Amounts in thousands, except per share data)
<S> <C> <C> <C> <C>
Net income (loss) $ 764 $ 83 $1,068 $ (811)
============= ============ =========== ===========
Weighted average shares for basic EPS 5,856 5,788 5,877 5,782
Effect of dilutive stock options 135 79 109 -
------------- ------------ ----------- -----------
Weighted average shares and assumed
exercise of stock options for dilutive EPS 5,991 5,867 5,986 5,782
============= ============ =========== ===========
Basic EPS $ 0.13 $ 0.01 $ 0.18 $(0.14)
Dilutive EPS $ 0.13 $ 0.01 $ 0.18 $(0.14)
</TABLE>
6
<PAGE>
MAPINFO CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
3. NEW ACCOUNTING STANDARDS
Statement of Financial Accounting Standards No. 130 "Reporting Comprehensive
Income" (SFAS No. 130) is effective for fiscal years beginning after December
15, 1997. This Statement establishes standards for reporting and disclosure of
comprehensive income and its components in a full set of general-purpose
financial statements. The Company will adopt SFAS No. 130 effective October 1,
1998. Statement of Financial Accounting Standards No. 131 "Disclosures About
Segments of an Enterprise and Related Information" (SFAS No. 131) is effective
for fiscal years beginning after December 15, 1997 and requires disclosures
about operating segments and enterprise-wide disclosures about products and
services, geographic areas and major customers. Effective October 1, 1998, the
Company will adopt SFAS No. 131. Statement of Position 97-2 "Software Revenue
Recognition" is effective for fiscal years beginning after December 15, 1997.
This statement provides guidance on recognizing revenue on software
transactions. The Company will adopt Statement of Position 97-2 effective
October 1, 1998.
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, 1998
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. During the six months period ended March 31, 1998, the Company
repurchased 66,000 shares at a cost of $828,000 under this program. To date
under this repurchase program, the Company has repurchased 146,000 shares at a
cost of $1,705,000, under which 67,662 shares have been reissued.
5. ACQUISITION
Pursuant to a Share Sale and Purchase Agreement dated December 2, 1997, the
Company acquired all of the issued share capital of The URPI Group Limited, an
English company trading as The Data Consultancy ("The Data Consultancy") and
engaged in the sale of market analysis solutions and information products in the
United Kingdom. The purchase price was approximately $4.2 million, consisting
of $3.8 million in cash and $400 thousand in stock. In addition, the Company is
obligated to make a contingent cash payment in October 1998, up to a maximum of
approximately $1.0 million, based on the financial performance of The Data
Consultancy in the year following the acquisition. The acquisition was
accounted for as a purchase and, accordingly, the Company has included The Data
Consultancy's results of operations in its financial statements from the date of
acquisition.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
OVERVIEW
MapInfo designs, 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 geographic operating units: the Americas,
Europe and Asia-Pacific (inclusive of Australia). Additionally, in 1997, the
Company established three business units, focused on customer requirements, that
encompass all of MapInfo's products. The business units are Desktop, Enterprise
and Information.
NET REVENUES
Revenues for the second quarter of fiscal 1998 increased 22% to $14.9 million
from $12.2 million in the same period in fiscal 1997. For the six months ending
March 31, 1998, revenues increased 26% to $28.0 million from $22.3 million in
the same period in fiscal 1997. The increase in revenues for the quarter and
year-to-date was primarily attributable to increased unit sales of the Company's
core software and data products in the Americas and Europe, and to the effect of
the acquisition of The Data Consultancy. In the Americas, revenues increased
12% and 25% for the three and six-month periods ended March 31, 1998,
respectively, due generally to improved execution throughout the sales and
marketing organization, especially in the VAR channel. In Europe, revenues
increased by 65% and 36% for the quarter and year-to-date, respectively, due
primarily to additional revenues resulting from The Data Consultancy acquisition
and strong sales of core software products. Asia-Pacific revenues declined by
7% for the quarter, primarily due to unfavorable exchange rates for the
Australian dollar in comparison to 1997. On a year-to-date basis, Asia-Pacific
revenues increased by 13% due to strong software and data sales in Australia
following the release of the CDATA 96 product.
COST OF REVENUES, OPERATING EXPENSES, AND INCOME TAXES
Cost of revenues as a percentage of revenues increased to 22.5% in the second
quarter of 1998 from 19.7% in 1997. As a result, the gross margin decreased
year-on-year to 77.5% from 80.3%. For the six months ending March 31, 1998,
gross margin decreased to 77.9% from 79.6% during the same period in 1997. The
gross margin decline was primarily attributable to an increase in revenue from
data products as a percentage of total revenues and lower margins on services
revenues.
Research and development (R&D) expenses increased 21% to $2.7 million in the
second quarter of fiscal 1998 from $2.2 million in the corresponding prior year
period. For the six months ending March 31, 1998, R&D expenses increased 19% to
$5.1 million from $4.3 million in the same period in fiscal 1997. The increase
in R&D expenses was primarily attributed to increased headcount resulting from
the acquisitions of SpatialWare Canada, Inc. and The Data Consultancy, partially
offset by lower costs in the Troy, New York, development operations. As
8
<PAGE>
a percentage of revenues, R&D expenses were 18.2% and 19.2% for the six months
ending March 31, 1998 and 1997, respectively.
Selling and marketing expenses increased 2% to $6.2 million in the second
quarter of fiscal 1998 from $6.0 million in 1997. For the six months ending
March 31, 1998, selling and marketing expenses increased 6% to $12.2 million
from $11.5 million in the same period in fiscal 1997. The increase in selling
and marketing expenses in the second quarter and year-to-date was primarily
attributable to increased headcount associated with the acquisition of The Data
Consultancy as well as the implementation of the business unit strategy and the
vertical industry focus in the Americas. The increase in expenses was partially
offset by reduced selling costs in the Asia Pacific, including the closing of
the Company's support office in Tokyo in 1997. As a percentage of revenues,
selling and marketing expenses declined to 43.5% for the first half of 1998 from
51.5% for the same period in 1997, due to improved expense leveraging.
General and administrative expenses increased 12% to $1.9 million in the second
quarter of fiscal 1998 from $1.7 million in 1997. For the six months ending
March 31, 1998, general and administrative expenses increased 9% to $3.6 million
from $3.3 million in the same period in fiscal 1997. The increase in G&A
expenses for the quarter and year-to-date was primarily due to The Data
Consultancy acquisition and associated amortization of goodwill as well as an
increase in European general and administrative expenses to support growing
operations. For the six months ending March 31, 1998, general and
administrative expenses as a percentage of revenues declined to 12.9% as
compared to 15.0% for the same period in 1997.
Other income decreased by $29,000 in the second quarter of 1998. For the six
months ending March 31, 1998, other income increased by $135,000 relative to the
corresponding period last year as a result of increased interest income
associated with moving a substantial amount of the Company's short-term
investments from tax-exempt to taxable securities.
The effective income tax rate for the three and six months ended March 31, 1998
and 1997 was approximately 22% and 21%, respectively.
FINANCIAL CONDITION
The Company's cash and short-term investments totaled $30.9 million at March 31,
1998, compared to $31.2 million at September 30, 1997. At March 31, 1998, the
Company's investment portfolio consisted primarily of short-term, liquid,
taxable securities.
MapInfo has no material long-term debt. The Company has a $20 million credit
facility with a bank that expires in December 1999, and a $10 million credit
facility with a bank that expires in January 1999. There were no outstanding
borrowings under either facility at March 31, 1998.
Net cash generated from operating activities was $3.8 million for the six months
ended March 31, 1998, compared to $1.1 million for the corresponding period in
the prior year. Net cash used for investing activities of $12.3 million
included $2.1 million for the acquisition of The Data Consultancy and $8.2
million in purchases of short-term investments.
9
<PAGE>
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, 1998
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. During the six months period ended March 31, 1998, the Company
repurchased 66,000 shares at a cost of $828,000 under this program. To date
under this repurchase program, the Company has repurchased 146,000 shares at a
cost of $1,705,000, under which 67,662 shares have been reissued.
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.
ACQUISITION OF THE DATA CONSULTANCY
Pursuant to a Share Sale and Purchase Agreement dated December 2, 1997, the
Company acquired all of the issued share capital of The URPI Group Limited, an
English company trading as The Data Consultancy ("The Data Consultancy") and
engaged in the sale of market analysis solutions and information products in the
United Kingdom. The purchase price was approximately $4.2 million, consisting
of $3.8 million in cash and $400 thousand in stock. In addition, the Company is
obligated to make a contingent cash payment in October 1998, up to a maximum of
approximately $1.0 million in cash, based on the financial performance of The
Data Consultancy in the year following the acquisition. The acquisition has
been accounted for as a purchase and, accordingly, the Company has included The
Data Consultancy's results of operations in its financial statements from the
date of acquisition.
INVESTMENT IN OBJECT/FX CORPORATION
Pursuant to a Purchase Agreement dated April 3, 1998, the Company invested $1.1
million in the form of convertible debt and a minority equity interest in
Object/FX Corporation, a Minnesota company engaged in the development and sale
of Java mapping technology. As part of the investment, the Company also
received a warrant to acquire additional shares and options from existing
stockholders to acquire a majority interest in Object/FX Corporation in three
years. In addition, MapInfo and Object/FX Corporation entered into a non-
exclusive worldwide marketing agreement, under which the Company will enhance
and sell Object/FX Java-based products.
ACCOUNTING STANDARDS
Statement of Financial Accounting Standards No. 130 "Reporting Comprehensive
Income" (SFAS No. 130) is effective for fiscal years beginning after December
15, 1997. This Statement establishes standards for reporting and disclosure of
comprehensive income and its components in a full set of general-purpose
financial statements. The Company will adopt SFAS No. 130 effective October 1,
1998. Statement of Financial Accounting Standards No. 131 "Disclosures About
Segments of an Enterprise and Related Information" (SFAS No. 131) is effective
for fiscal years beginning after December 15, 1997 and requires disclosures
about operating segments and enterprise-wide disclosures about products and
services, geographic areas and major customers.
10
<PAGE>
Effective October 1, 1998, the Company will adopt SFAS No. 131. Statement of
Position 97-2 "Software Revenue Recognition" is effective for fiscal years
beginning after December 15, 1997. This statement provides guidance on
recognizing revenue on software transactions. The Company will adopt Statement
of Position 97-2 effective October 1, 1998.
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 and information
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.
During fiscal 1997, the Company introduced a number of new products, including
ProServer and SpatialWare. The Company's future success depends, in part, upon
customer and market acceptance of these new products. The Company's future
success will also depend in part on its ability to integrate the operations of
The Data Consultancy. 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 worldwide. 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.
11
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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.
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 shrink-wrap 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.
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.
RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS. Revenues outside the Americas
were 51% and 50% of total Company revenues for the six months ending March 31,
1998 and March 31, 1997, respectively. 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, reliance on
financial commitments from certain international distributors, difficulties in
localizing products and translating documentation into international languages,
fluctuations in the value of international currencies, fluctuations in
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.
YEAR 2000 COMPLIANCE. The Company's salable products rely on software
applications. The Company also relies on systems of other parties in regard to
its business, accounting and operational software. The Company believes that
its salable products, as well as its significant business, accounting and
operations software are year 2000 compliant. However, there can be no
12
<PAGE>
assurance that the Company will not experience difficulties with the conversion
of these systems. The Company's business, financial condition or results of
operations could be materially adversely affected by the failure of its salable
products, systems and applications or those operated by other parties to
properly manage dates beyond 1999.
13
<PAGE>
MAPINFO CORPORATION
Part II. Other Information
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The annual meeting of stockholders of the Company was held on February 25, 1998.
The following matters were voted on at the stockholders' meeting.
<TABLE>
<CAPTION>
Broker
For Against Withheld Abstentions Non-Votes
--------- ------- -------- ----------- ---------
Election of Directors:
- ----------------------------------------
<S> <C> <C> <C> <C> <C>
Laszlo C. Bardos 5,196,427 40,851
John F. Burton 5,195,427 41,851
John C. Cavalier 5,196,186 41,092
John F. Haller 5,196,427 40,851
Michael D. Marvin 5,194,986 42,292
George C. McNamee 5,193,519 43,759
James A. Perakis 5,196,202 41,076
AMENDMENT TO THE 1993 STOCK INCENTIVE PLAN:
- ------------------------------------------
The shares authorized under the 1993 Stock
Incentive Plan were increased from 1,325,000
to 1,625,000 shares. 2,668,779 602,179 31,649 1,934,671
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 200,000 to 300,000. 2,900,461 380,627 32,429 1,923,761
RATIFICATION OF COOPERS & LYBRAND L.L.P. AS THE
COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS FOR THE
CURRENT FISCAL YEAR. 5,226,835 5,657 4,786
</TABLE>
14
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MAPINFO CORPORATION
Part II. Other Information
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.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the three months ended March 31,
1998.
15
<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: May 14, 1998 By: /s/ D. Joseph Gersuk
---------------------
D. Joseph Gersuk,
Executive Vice President,
Finance and International
Operations, Chief Financial
Officer and Treasurer
16
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
- ------ ----------------------
10.1 1993 Stock Incentive Plan, as amended to date
10.2 1993 Director Stock Option Plan, as amended to date
27 Financial Data Schedule.
17
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EXHIBIT 10.1
MapInfo Corporation
1993 Stock Incentive Plan
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Section 1. Purpose
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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
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"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.
"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.
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"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 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
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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
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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.
(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.
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(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 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.
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(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.
(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.
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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
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
------------------
(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
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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 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.
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(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.
(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 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.
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(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
-------------
(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.
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(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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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
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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
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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 of the Company
on February 13, 1997
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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
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AMENDMENT NO. 5 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 1,625,000 shares of Common Stock."
Adopted by the Board of Directors on
November 14, 1997
Approved by the Stockholders of the
Company on February 25, 1998
AMENDMENT NO. 6 TO THE 1993 STOCK INCENTIVE PLAN
OF MAPINFO CORPORATION
Subsection 11(f) of the 1993 Stock Incentive Plan (the "Plan") of MapInfo
Corporation is hereby amended and restated in its entirety to provide as
follows:
"(f) Governing Law. The provisions of the Plan shall be governed by and
-------------
interpreted in accordance with the laws of the State of Delaware."
Adopted by the Board of
Directors on February 11, 1998
31
<PAGE>
EXHIBIT 10.2
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
-------------------------------------
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").
32
<PAGE>
(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 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.
33
<PAGE>
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 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
34
<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
35
<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
36
<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
37
<PAGE>
November 12, 1996
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
38
<PAGE>
AMENDMENT NO. 5 TO THE 1993 DIRECTOR STOCK OPTION PLAN
OF MAPINFO CORPORATION
Section 11 of the 1993 Director Stock Option Plan (the "Plan") of MapInfo
Corporation is hereby amended and restated in its entirety to provide as
follows:
"11. Governing Law
-------------
The Plan and all determinations made and actions taken pursuant hereto
shall be governed by the laws of the State of Delaware."
Adopted by the Board of
Directors on February 11, 1998
39
<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-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> MAR-31-1998
<CASH> 16,146
<SECURITIES> 14,735
<RECEIVABLES> 12,172
<ALLOWANCES> 1,233
<INVENTORY> 824
<CURRENT-ASSETS> 45,238
<PP&E> 11,616
<DEPRECIATION> 6,745
<TOTAL-ASSETS> 56,815
<CURRENT-LIABILITIES> 14,831
<BONDS> 0
0
0
<COMMON> 12
<OTHER-SE> 41,841
<TOTAL-LIABILITY-AND-EQUITY> 56,815
<SALES> 28,042
<TOTAL-REVENUES> 28,042
<CGS> 6,204
<TOTAL-COSTS> 6,204
<OTHER-EXPENSES> 20,956
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,361
<INCOME-TAX> 293
<INCOME-CONTINUING> 1,068
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,068
<EPS-PRIMARY> 0.18
<EPS-DILUTED> 0.18
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