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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended December 31, 1999
---------------------
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 February 1, 2000 was 8,723,379.
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<PAGE>
MAPINFO CORPORATION
FORM 10-Q
For the Quarter Ended December 31, 1999
INDEX
Page
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PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements:
Income Statements
for the three months ended December 31, 1999 and 1998 1
Balance Sheets
as of December 31, 1999 and September 30, 1999 2
Cash Flows Statements
for the three months ended December 31, 1999 and 1998 3
Notes to Financial Statements 4
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk 12
PART II. OTHER INFORMATION
ITEM 5. Other Information 13
ITEM 6. Exhibits and Reports on Form 8-K 13
Signatures 14
<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
Ended December 31,
-------------------------
1999 1998
----------- ----------
<S> <C> <C>
Net revenues $ 21,019 $ 16,145
Cost of revenues 4,542 3,560
----------- ----------
Gross profit 16,477 12,585
----------- ----------
Operating expenses:
Research and development 3,258 2,688
Selling and marketing 8,957 7,118
General and administrative 2,945 2,169
----------- ----------
Total operating expenses 15,160 11,975
----------- ----------
Operating income 1,317 610
Other income - net 270 258
----------- ----------
Income before provision for income taxes 1,587 868
Provision for income taxes 585 260
----------- ----------
Net income $ 1,002 $ 608
=========== ==========
Earnings per share:(1)
Basic $ 0.12 $ 0.07
Diluted $ 0.11 $ 0.07
Weighted average shares outstanding:(1)
Basic 8,676 8,565
Diluted 9,447 8,853
</TABLE>
(1) Earnings per share amounts and weighted average shares outstanding have
been restated to reflect a three-for-two stock split in January 2000.
See accompanying notes.
1
<PAGE>
MAPINFO CORPORATION AND SUBSIDIARIES
BALANCE SHEETS
(in thousands, except per share data)
<TABLE>
<CAPTION>
December 31, September 30,
1999 1999
------------ ------------
<S> <C> <C>
ASSETS (unaudited)
Current Assets:
Cash and cash equivalents $ 8,017 $ 8,996
Short-term investments, at amortized cost 21,070 19,865
Accounts receivable, less allowance of $1,978 and $1,686
at December 31, 1999 and September 30, 1999, respectively 18,530 19,379
Inventories 446 506
Other current assets 2,755 2,814
Deferred income taxes 894 894
------------ ------------
Total current assets 51,712 52,454
Property and equipment - net 5,111 4,851
Product development costs - net 1,033 1,202
Deferred income taxes 1,155 1,157
Intangible assets - net 5,074 5,426
Investments and other assets 1,834 1,709
------------ ------------
Total assets $ 65,919 $ 66,799
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 1,537 $ 2,621
Accrued liabilities 10,548 11,102
Deferred revenue 4,991 4,915
Income taxes payable 1,312 1,996
------------ ------------
Total current liabilities 18,388 20,634
Deferred revenue, long term 338 361
------------ ------------
Total liabilities 18,726 20,995
------------ ------------
Commitments and Contingencies
Stockholders' Equity:
Common stock, $.002 par value 18 18
Preferred stock, $.01 par value - -
Paid-in capital 30,648 30,738
Retained earnings 19,239 18,237
Accumulated other comprehensive income (378) (178)
------------ ------------
49,527 48,815
Less treasury stock, at cost 2,334 3,011
------------ ------------
Total stockholders' equity 47,193 45,804
------------ ------------
Total liabilities and stockholders' equity $ 65,919 $ 66,799
============ ============
</TABLE>
See accompanying notes.
2
<PAGE>
MAPINFO CORPORATION AND SUBSIDIARIES
CASH FLOWS STATEMENTS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
Three Months
Ended December 31,
--------------------------
1999 1998
---------- -----------
<S> <C> <C>
CASH FLOWS FROM (USED FOR) OPERATING ACTIVITIES
Net income $ 1,002 $ 608
Depreciation and amortization 1,234 1,001
Allowance for doubtful accounts, sales returns and inventory 337 (193)
Changes in operating assets and liabilities, net of acquisition:
Accounts receivable 354 2,819
Inventories 32 122
Other assets 179 78
Accounts payable and accrued liabilities (1,603) (1,214)
Deferred revenue 91 (307)
Income taxes (688) 145
---------- -----------
NET CASH FROM OPERATING ACTIVITIES 938 3,059
---------- -----------
CASH FLOWS FROM (USED FOR) INVESTING ACTIVITIES
Additions to property and equipment (1,039) (773)
Capitalized product development costs (15) (192)
Acquisition of businesses and technology - (3,802)
Short-term investments, net (1,205) (3,757)
Other investments (250) (1,051)
---------- -----------
NET CASH USED FOR INVESTING ACTIVITIES (2,509) (9,575)
---------- -----------
CASH FLOWS FROM (USED FOR) FINANCING ACTIVITIES
Repurchase of common stock for treasury (144) -
Proceeds from exercise of options and ESPP stock purchases 541 32
Tax benefit from option exercises 189 15
---------- -----------
NET CASH FROM FINANCING ACTIVITIES 586 47
---------- -----------
Effect of exchange rate changes on cash and cash equivalents 6 2
---------- -----------
NET CHANGE IN CASH AND EQUIVALENTS (979) (6,467)
Cash and equivalents, beginning of period 8,996 15,886
---------- -----------
Cash and equivalents, end of period $ 8,017 $ 9,419
========== ===========
</TABLE>
See accompanying notes.
3
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MAPINFO CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
In the opinion of management, the accompanying balance sheets and related income
statements and statements of 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 results of operations for the
interim period are not necessarily indicative of the results of operations for
the full year.
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 to the fiscal 2000 presentation.
2. STOCK SPLIT
On January 10, 2000, the outstanding shares of MapInfo Corporation's (the
"Company") common stock were split three-for-two. All prior share and per
share amounts have been restated to reflect the stock split.
3. EARNINGS PER SHARE
The following table represents the reconciliation of the basic and diluted
earnings per share amounts for the three months ended December 31, 1999 and
1998.
<TABLE>
<CAPTION>
Three Months Ended
December 31,
---------------------------
1999 1998
---------- ----------
(Amounts in thousands,
except per share data)
<S> <C> <C>
Net income $ 1,002 $ 608
========== ==========
Weighted average shares for basic EPS 8,676 8,565
Effect of dilutive stock options 771 288
---------- ----------
Weighted average shares and assumed exercise of
stock options for diluted EPS 9,447 8,853
========== ==========
Basic EPS $ 0.12 $ 0.07
Diluted EPS $ 0.11 $ 0.07
</TABLE>
4
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MAPINFO CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
4. COMPREHENSIVE INCOME
Comprehensive income is provided in accordance with Statement of Financial
Accounting Standards No. 130 - "Reporting Comprehensive Income" (SFAS No. 130).
This Statement establishes standards for reporting and disclosure of
comprehensive income and its components. This statement requires foreign
currency translation adjustments, which are reported as separate components of
stockholders' equity, to be included in comprehensive income.
Comprehensive income was as follows:
<TABLE>
<CAPTION>
Three Months Ended
December 31,
--------------------------
1999 1998
--------- ---------
(In thousands)
<S> <C> <C>
Net income $ 1,002 $ 608
Change in accumulated translation adjustments (200) (186)
--------- ---------
Total comprehensive income $ 802 $ 422
========= =========
</TABLE>
5. NEW ACCOUNTING STANDARDS
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which establishes accounting and reporting
standards for derivative instruments and hedging activities. It requires that an
entity recognizes all derivatives as either assets or liabilities in the balance
sheet and measures those instruments at fair value. Management does not believe
this will have a material effect on the Company's operations. SFAS No. 133 is
effective for fiscal years beginning after June 15, 2000. Accordingly, the
Company will adopt SFAS No. 133 effective October 1, 2000.
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MAPINFO CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
6. SEGMENT INFORMATION
The Company's operations involve the design, development, marketing, licensing
and supporting of software and data products, application development tools, and
industry-focused solutions, together with a range of consulting, training and
technical support services.
The Company conducts business globally and is managed geographically. The
Company's management relies on an internal management accounting system. This
system includes revenue and cost information by geographic location. Revenues
are attributed to a geographic location based on the origination of the order
from the customer. The Company's management makes financial decisions and
allocates resources based on the information it receives from this internal
system. Based on the criteria set forth in SFAS No. 131, the Company has three
reportable segments: the Americas, EAME (Europe, Africa and the Middle East) and
Asia-Pacific.
Summarized financial information by segment for the first quarter of fiscal
years 2000 and 1999, as taken from the internal management accounting system
discussed above, is as follows:
<TABLE>
<CAPTION>
Three Months Ended
December 31,
---------------------------
1999 1998
------------ ------------
<S> <C> <C>
Net revenues:
Americas $ 12,003 $ 8,066
EAME 6,107 5,774
Asia-Pacific 2,909 2,305
------------ ------------
Total net revenues $ 21,019 $16,145
============ ============
Operating income:
Americas $ 4,460 $ 2,695
EAME 1,424 1,277
Asia-Pacific 874 885
Corporate adjustments:
R&D (2,555) (2,209)
Marketing (1,747) (1,209)
G&A (1,139) (829)
------------ ------------
Total operating income $ 1,317 $ 610
============ ============
</TABLE>
The operating income by segment above differs from the amounts recognized under
generally accepted accounting principles because the Company does not allocate
certain corporate costs for marketing, research and development, and general and
administrative activities to the geographic locations. The table above
reconciles the operating income by segment to operating income as reported on
the Income Statements by including such adjustments.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
OVERVIEW
MapInfo Corporation ("MapInfo" or the "Company") designs, develops, markets,
licenses and supports software and data products, application development tools,
and industry-focused solutions, together with a range of consulting, training
and technical support services. These products are sold through multiple
distribution channels, including an indirect channel of value-added resellers
and distributors, a corporate account sales force, and a telemarketing sales
group. The Company's products are translated into 20 languages and sold in 58
countries throughout the world. MapInfo markets its products worldwide through
sales offices in North America, Europe and Australia, and throughout the rest of
Europe and the Asia-Pacific region through exclusive and non-exclusive
distribution relationships.
NET REVENUES
Revenues for the first quarter of fiscal 2000 increased 30% to $21.0 million
from $16.1 million in the same period a year ago. Approximately $3.5 million of
the increase was attributable to increased unit sales of data products and $1.5
million was attributable to increased unit sales of software products. The
strong growth in data revenues primarily resulted from increased demand for data
products in the Americas, including $2.1 million of revenues relating to an
order from a major telecommunications provider. The first quarter of fiscal 2000
also includes $0.9 million of data revenues from On Target Mapping, which was
acquired in December 1998. On a geographic basis, revenues increased
approximately 49% in the Americas, 26% in Asia-Pacific and 6% in EAME. The
increases in the Americas revenues were mainly attributable to the increased
sales of data products and On Target Mapping, discussed above. The increase in
Asia-Pacific revenues was mainly the result of a strong quarter in Australia
offset slightly by a decrease in royalties on product sales in China.
COST OF REVENUES, OPERATING EXPENSES AND INCOME TAXES
Cost of revenues as a percentage of revenues decreased to 21.6% in the first
quarter of 2000 from 22.1% for the same period in 1999. As a result, the gross
margin increased to 78.4% from 77.9%. The gross margin improvement was primarily
attributable to a shift in the mix of data products revenues from selling
third-party data products less royalties to selling MapInfo-owned products.
Research and development (R&D) expenses of $3.3 million in the first quarter of
fiscal 2000 increased 21% over the prior year period. The increase in R&D
expenses was primarily attributable to increased headcount resulting from the
acquisition of On Target Mapping and increased spending to support large
customer contracts. As a percentage of revenues, R&D expenses declined to 15.5%
in the first quarter of 2000 from 16.6% for the same period in 1999.
Selling and marketing expenses increased 26% to $9.0 million in the first
quarter of 2000 from $7.1 million for the same period in 1999. The increase was
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primarily attributable to a 13% increase in headcount in the Americas sales
organization and increased sales and marketing activity in the Asia-Pacific
region. As a percentage of revenues, selling and marketing expenses decreased to
42.6% in the first quarter of 2000 from 44.1% for the same period in 1999 due to
improved sales productivity.
General and administrative (G&A) expenses increased 36% to $2.9 million in
the first quarter of fiscal 2000 from $2.2 million for the same period in 1999.
Included in the increase is $130 thousand of increased amortization of
intangibles associated with The Data Consultancy and On Target acquisitions. In
total, amortization of intangibles relating to acquisitions was $292 thousand
and $164 thousand, for the first quarter of 2000 and 1999, respectively. In
addition, $200 thousand related to increased headcount to support MIS
infrastructure and Y2K initiatives, and approximately $100 thousand was due to
professional fees relating to the development of the Asia-Pacific region. For
the first quarter of fiscal 2000, G&A expenses as a percentage of revenues
increased to 14.0% as compared to 13.4% for the same period in fiscal 1999.
The effective income tax rate for the quarter ended December 31, 1999 and 1998
was approximately 37% and 30%, respectively. The increase in the provision for
income taxes was primarily attributable to an increase in the current year
pre-tax income.
FINANCIAL CONDITION
The Company's cash and short-term investments totaled $29.1 million at December
31, 1999 compared to $28.9 million at September 30, 1999. At December 31, 1999,
the Company's investment portfolio consisted primarily of short-term marketable
securities.
MapInfo has no long-term debt. The Company has a $10 million credit facility
with a bank that expires in December 2000, and a $10 million credit facility
with a bank that expires in January 2001. There were no outstanding borrowings
under either facility at December 31, 1999.
Net cash generated from operating activities was $0.9 million for the quarter
ended December 31, 1999. The cash generated from operating activities in the
first quarter of 2000 was principally the result of net income. Net cash used
for investing activities in the first quarter of 2000 was $2.5 million
consisting primarily of approximately $1.0 million in purchases of property and
equipment; $1.2 million in purchases of short-term investments and $250 thousand
for an investment in NearMe Inc. discussed below.
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.
INVESTMENT IN NEARME INC.
In December 1999, the Company invested $250 thousand and licensed certain
technology to NearMe Inc., a new e-business company that uses MapInfo technology
to help web consumers find goods, services and events located near them. The
Company's investment is in the form of a Convertible Note with warrants
attached. The investment in NearMe Inc. has been accounted for using the cost
method.
8
<PAGE>
NEW ACCOUNTING STANDARDS
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which establishes accounting and reporting
standards for derivative instruments and hedging activities. It requires that an
entity recognizes all derivatives as either assets or liabilities in the balance
sheet and measures those instruments at fair value. Management does not believe
this will have a material effect on the Company's operations. SFAS No. 133 is
effective for fiscal years beginning after June 15, 2000.
YEAR 2000 COMPLIANCE
The Company's information technology systems and facilities successfully
completed the "roll-over" to the year 2000. The Company's transition to the year
2000 during the first weeks of business in January 2000 resulted in no adverse
or negative impacts associated with the use of date sensitive systems and
equipment. The Company believes that with its successful transition to the year
2000, the preponderance of the risk associated with the year 2000 problem has
been identified and eliminated. The Company recognizes the possibility that
latent year 2000 related issues may arise as information technology systems and
facilities are more fully utilized in the coming months. The Company will
continue to evaluate the year 2000 readiness of its business systems,
facilities, and significant vendors to ensure a complete transition through the
year 2000. The Company estimates the total cost of its year 2000 assessment and
remediation plan has amounted to approximately $700 thousand, which has been
funded through operating cash flows.
OUTLOOK: ISSUES AND RISKS
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, including
statements as to the sufficiency of funds to meet operating requirements for the
next 12 months. 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 recent years, the Company introduced a number of new products, including
SpatialWare(R), TargetPro(TM), dbPlanner(TM), MapXsite(R), MapXtreme(TM) and
MapInfo MapX(R). 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.
9
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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. Some of the Company's competition may have
significant name recognition, as well as substantially greater capital
resources, marketing experience, research and development staffs and production
facilities than the Company. 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.
RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS. Revenues outside the Americas
represented approximately 43% of total Company revenues in the first quarter of
fiscal 2000. 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 foreign languages, fluctuations in import/export duties and
quotas, and regulatory, economic, or political changes in international markets.
The Company's operating results are also affected by exchange rates.
Approximately 28% of the Company's revenues were denominated in foreign
currencies during the first quarter of fiscal 2000. Changes in international
business conditions 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. Any decrease could have a material adverse effect
on the Company's business and results of operations.
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,
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. Also, the laws of some foreign countries do not protect the
10
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Company's proprietary rights to the same extent as 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 affect cost of revenues as a percentage of net revenues
in the future.
EXPANSION TO ENTERPRISE MARKET. The Company has historically 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.
RISKS ASSOCIATED WITH DISTRIBUTION CHANNELS. The Company primarily markets and
distributes its products in North America, Europe and Australia through the
Company's telesales, outside sales force and through third-party resellers. In
the rest of the Asia-Pacific region, the Company's products are marketed and
distributed through exclusive and non-exclusive distribution relationships. The
Company has limited control over resellers and distributors that are not
employees of the Company. There can be no assurance that the Company will be
able to retain its current resellers and distributors, that the resellers and
distributors will perform to the Company's expectations, or that the Company
will be able to expand its distribution channels by entering into arrangements
with new resellers and distributors in the Company's current markets or in new
markets.
VARIABILITY OF QUARTERLY OPERATING RESULTS. The Company's quarterly operating
results may vary significantly from quarter to quarter, depending upon factors
such as the introduction and market acceptance of new products and new versions
of existing products, the ability to reduce expenses, and the activities of
competitors. Because a high percentage of the Company's expenses are relatively
fixed in the near term, minor variations in the timing of orders and shipments
can cause significant variations in quarterly operating results. The Company
operates with little or no backlog and has no long-term contracts, and
substantially all of its product revenues in each quarter result from software
licenses issued in that quarter. Accordingly, the Company's ability to
accurately forecast future revenues and income for any period is necessarily
limited.
POTENTIAL VOLATILITY OF STOCK PRICE. There has been, and will likely continue to
be, significant volatility in the market price of securities of technology
companies. Factors such as announcements of new products by the Company or its
11
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competitors, quarterly fluctuations in the Company's financial results or other
software companies' financial results, shortfalls in the Company's actual
financial results compared to results previously forecasted by stock market
analysts, and general conditions in the software industry and conditions in the
financial markets could cause the market price of the Common Stock to fluctuate
substantially. These market fluctuations may adversely affect the price of the
Company's Common Stock.
RISKS ASSOCIATED WITH ACQUISITIONS. The Company has made a number of
acquisitions and investments and will continue to review future acquisition
opportunities. No assurances can be given that acquisition candidates will
continue to be available on terms and conditions acceptable to the Company.
Acquisitions involve numerous risks, including, among other things, possible
dilution to existing shareholders, difficulties and expenses incurred in
connection with the acquisitions and the subsequent assimilation of the
operations and services or products of the acquired companies, the difficulty of
operating new businesses, the diversion of management's attention from other
business concerns and the potential loss of key employees of the acquired
company. In the event that the operations of an acquired business do not meet
expectations, the Company may be required to restructure the acquired business
or write-off the value of some or all of the assets of the acquired business.
There can be no assurance that any acquisition will be successfully integrated
into the Company's operations.
RELIANCE ON ATTRACTING AND RETAINING KEY EMPLOYEES. The Company's continued
success will depend in large part on its ability to attract and retain highly
qualified technical, managerial, sales and marketing and other personnel.
Competition for such personnel is intense. There can be no assurance that the
Company will be able to continue to attract or retain such personnel.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company exports products to diverse geographic locations. Most of the
Company's international revenues through subsidiaries are denominated in foreign
currencies. To date, foreign currency fluctuations have not had a material
effect on the Company's operating results. The Company's exposure is mitigated,
in part, by the fact that it incurs certain operating costs in the same foreign
currencies in which revenues are denominated.
12
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MAPINFO CORPORATION
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION.
On December 8, 1999, the Company announced that its Board of Directors approved
a three-for-two stock split of the Company's Common Stock. The record date for
determining stockholders entitled to receive the stock dividend was December 20,
1999. The split was effected through a stock dividend. The stock dividend
payment date was January 10, 2000. Fractional shares were paid in cash based
upon the last sale price of the Common Stock on the record date as reported on
the Nasdaq National Market.
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 December 31,
1999.
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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: February 12, 2000 By: /s/ D. Joseph Gersuk
--------------------------
D. Joseph Gersuk,
Executive Vice President,
Finance, Chief Financial
Officer and Treasurer
(Principal Financial Officer)
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Exhibit Index
Exhibit
Number Description of Exhibit
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3.2 Amended By-Laws of the Registrant
27 Financial Data Schedule
15
BY-LAWS
OF
MAPINFO CORPORATION
ARTICLE 1 - Stockholders
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1.1 PLACE OF MEETINGS. All meetings of stockholders shall be held at
such place within or without the State of Delaware as may be designated from
time to time by the Board of Directors or the President or, if not so
designated, at the registered office of the corporation.
1.2 ANNUAL MEETING. The annual meeting of stockholders for the election
of directors and for the transaction of such other business as may properly be
brought before the meeting shall be held within six months after the end of each
fiscal year of the corporation on a date to be fixed by the Board of Directors
or the President (which date shall not be a legal holiday in the place where the
meeting is to be held) at the time and place to be fixed by the Board of
Directors or the President and stated in the notice of the meeting. If no annual
meeting is held in accordance with the foregoing provisions, the Board of
Directors shall cause the meeting to be held as soon thereafter as convenient.
If no annual meeting is held in accordance with the foregoing provisions, a
special meeting may be held in lieu of the annual meeting, and any action taken
at that special meeting shall have the same effect as if it had been taken at
the annual meeting, and in such case all references in these By-Laws to the
annual meeting of the stockholders shall be deemed to refer to such special
meeting.
1.3 SPECIAL MEETINGS. Special meetings of stockholders may be called at
any time by the Chairman of the Board of Directors, the Chief Executive Officer
(or, if there is no Chief Executive Officer, the President) or the Board of
Directors. Business transacted at any special meeting of stockholders shall be
limited to matters relating to the purpose or purposes stated in the notice of
meeting.
1.4 NOTICE OF MEETINGS. Except as otherwise provided by law, written
notice of each meeting of stockholders, whether annual or special, shall be
given not less than 10 nor more than 60 days before the date of the meeting to
each stockholder entitled to vote at such meeting. The notices of all meetings
shall state the place, date and hour of the meeting. The notice of a special
meeting shall state, in addition, the purpose or purposes for which the meeting
is called. If mailed, notice is given when deposited in the United States mail,
postage prepaid, directed to the stockholder at his or her address as it appears
on the records of the corporation.
1.5 VOTING LIST. The officer who has charge of the stock ledger of the
corporation shall prepare, at least 10 days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
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stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
10 days prior to the meeting, at a place within the city where the meeting is to
be held. The list shall also be produced and kept at the time and place of the
meeting during the whole time of the meeting, and may be inspected by any
stockholder who is present.
1.6 QUORUM. Except as otherwise provided by law, the Certificate of
Incorporation or these By-Laws, the holders of a majority of the shares of the
capital stock of the corporation issued and outstanding and entitled to vote at
the meeting, present in person or represented by proxy, shall constitute a
quorum for the transaction of business.
1.7 ADJOURNMENTS. Any meeting of stockholders may be adjourned to any
other time and to any other place at which a meeting of stockholders may be held
under these By-Laws by the stockholders present or represented at the meeting
and entitled to vote, although less than a quorum, or, if no stockholder is
present, by any officer entitled to preside at or to act as Secretary of such
meeting. It shall not be necessary to notify any stockholder of any adjournment
of less than 30 days if the time and place of the adjourned meeting are
announced at the meeting at which adjournment is taken, unless after the
adjournment a new record date is fixed for the adjourned meeting. At the
adjourned meeting, the corporation may transact any business which might have
been transacted at the original meeting.
1.8 VOTING AND PROXIES. Each stockholder shall have one vote for each
share of stock entitled to vote held of record by such stockholder and a
proportionate vote for each fractional share so held, unless otherwise provided
by the General Corporation Law of the State of Delaware, the Certificate of
Incorporation or these By-Laws. Each stockholder of record entitled to vote at a
meeting of stockholders, or to express consent or dissent to corporate action in
writing without a meeting, may vote or express such consent or dissent in person
or in such other manner as may from time to time be permitted by law, or may
authorize another person or persons to vote or act for him or her by written
proxy executed by the stockholder or his or her authorized agent and delivered
to the Secretary of the corporation or in such other manner as may from time to
time be permitted by law. No such proxy shall be voted or acted upon after three
years from the date of its execution, unless the proxy expressly provides for a
longer period."
1.9 ACTION AT MEETING. When a quorum is present at any meeting, the
holders of a majority of the stock present or represented and voting on a matter
(or if there are two or more classes of stock entitled to vote as separate
classes, then in the case of each such class, the holders of a majority of the
stock of that class present or represented and voting on a matter) shall decide
any matter to be voted upon by the stockholders at such meeting, except when a
different vote is required by express provision of law, the Certificate of
Incorporation or these By-Laws. Any election by stockholders shall be determined
by a plurality of the votes cast by the stockholders entitled to vote at the
election.
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1.10 NOMINATION OF DIRECTORS. Only persons who are nominated in
accordance with the following procedures shall be eligible for election as
directors. Nomination for election to the Board of Directors of the corporation
at a meeting of stockholders may be made by the Board of Directors or by any
stockholder of the corporation entitled to vote for the election of directors at
such meeting who complies with the notice procedures set forth in this Section
1.10. Such nominations, other than those made by or on behalf of the Board of
Directors, shall be made by notice in writing delivered or mailed by first class
United States mail, postage prepaid, to the Secretary, and received not less
than 60 days nor more than 90 days prior to such meeting; provided, however,
that if less than 70 days' notice or prior public disclosure of the date of the
meeting is given to stockholders, such nomination shall have been mailed or
delivered to the Secretary not later than the close of business on the 10th day
following the date on which the notice of the meeting was mailed or such public
disclosure was made, whichever occurs first. Such notice shall set forth (a) as
to each proposed nominee (i) the name, age, business address and, if known,
residence address of each such nominee, (ii) the principal occupation or
employment of each such nominee, (iii) the number of shares of stock of the
corporation which are beneficially owned by each such nominee, and (iv) any
other information concerning the nominee that must be disclosed as to nominees
in proxy solicitations pursuant to Regulation 14A under the Securities Exchange
Act of 1934, as amended (including such person's written consent to be named as
a nominee and to serve as a director if elected); and (b) as to the stockholder
giving the notice (i) the name and address, as they appear on the corporation's
books, of such stockholder and (ii) the class and number of shares of the
corporation which are beneficially owned by such stockholder. The corporation
may require any proposed nominee to furnish such other information as may
reasonably be required by the corporation to determine the eligibility of such
proposed nominee to serve as a director of the corporation.
The chairman of the meeting may, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with the
foregoing procedure, and if he or she should so determine, he or she shall so
declare to the meeting and the defective nomination shall be disregarded.
1.11 NOTICE OF BUSINESS AT ANNUAL MEETINGS. At an annual meeting of the
stockholders, only such business shall be conducted as shall have been properly
brought before the meeting. To be properly brought before an annual meeting,
business must be (a) specified in the notice of meeting (or any supplement
thereto) given by or at the direction of the Board of Directors, (b) otherwise
properly brought before the meeting by or at the direction of the Board of
Directors, or (c) otherwise properly brought before an annual meeting by a
stockholder. For business to be properly brought before an annual meeting by a
stockholder, if such business relates to the election of directors of the
corporation, the procedures in Section 1.10 must be complied with. If such
business relates to any other matter, the stockholder must have given timely
notice thereof in writing to the Secretary. To be timely, a stockholder's notice
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must be delivered to or mailed and received at the principal executive offices
of the corporation not less than 60 days nor more than 90 days prior to the
meeting; provided, however, that in the event that less than 70 days' notice or
prior public disclosure of the date of the meeting is given or made to
stockholders, notice by the stockholder to be timely must be so received not
later than the close of business on the 10th day following the date on which
such notice of the date of the meeting was mailed or such public disclosure was
made, whichever occurs first. A stockholder's notice to the Secretary shall set
forth as to each matter the stockholder proposes to bring before the annual
meeting (a) a brief description of the business desired to be brought before the
annual meeting and the reasons for conducting such business at the annual
meeting, (b) the name and address, as they appear on the corporation's books, of
the stockholder proposing such business, (c) the class and number of shares of
the corporation which are beneficially owned by the stockholder, and (d) any
material interest of the stockholder in such business. Notwithstanding anything
in these By-Laws to the contrary, no business shall be conducted at any annual
meeting except in accordance with the procedures set forth in this Section 1.11
and except that any stockholder proposal which complies with Rule 14a-8 of the
proxy rules (or any successor provision) promulgated under the Securities
Exchange Act of 1934, as amended, and is to be included in the corporation's
proxy statement for an annual meeting of stockholders shall be deemed to comply
with the requirements of this Section 1.11.
The chairman of the meeting shall, if the facts warrant, determine and
declare to the meeting that business was not properly brought before the meeting
in accordance with the provisions of this Section 1.11, and if he or she should
so determine, the chairman shall so declare to the meeting that any such
business not properly brought before the meeting shall not be transacted.
1.12 ACTION WITHOUT MEETING. Any action required or permitted to be
taken at any meeting of shareholders may be taken without a meeting, if, prior
to such action, a written consent or consents thereto setting forth such action,
is signed by the holders of record of all of the shares of the stock of the
corporation issued and outstanding and entitled to vote.
1.13 ORGANIZATION. The Chairman of the Board, or in his or her absence
the Vice Chairman of the Board designated by the Chairman of the Board, or the
President, in the order named, shall call meetings of the stockholders to order,
and shall act as chairman of such meeting; provided, however, that the Board of
Directors may appoint any stockholder to act as chairman of any meeting in the
absence of the Chairman of the Board. The Secretary of the corporation shall act
as secretary at all meetings of the stockholders; but in the absence of the
Secretary at any meeting of the stockholders, the presiding officer may appoint
any person to act as secretary of the meeting.
ARTICLE 2 - Directors
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2.1 GENERAL POWERS. The business and affairs of the corporation shall
be managed by or under the direction of a Board of Directors, who may exercise
all of the powers of the corporation except as otherwise provided by law or the
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Certificate of Incorporation. In the event of a vacancy in the Board of
Directors, the remaining directors, except as otherwise provided by law, may
exercise the powers of the full Board until the vacancy is filled.
2.2 NUMBER; ELECTION AND QUALIFICATION. The number of directors which
shall constitute the whole Board of Directors shall be determined by resolution
of the Board of Directors, but in no event shall be less than one. The number of
directors may be increased or decreased at any time and from time to time by a
majority of the directors then in office, provided, however, that any such
decrease shall only eliminate vacancies existing by reason of the death,
resignation, removal or expiration of the term of one or more directors. The
directors shall be elected at the annual meeting of stockholders by such
stockholders as have the right to vote on such election. Directors need not be
stockholders of the corporation.
2.3 TENURE. Each director shall hold office until the next annual
meeting and until his or her successor is elected and qualified, or until his or
her earlier death, resignation or removal.
2.4 VACANCIES. Unless and until filled by the stockholders, any vacancy
in the Board of Directors, however occurring, including a vacancy resulting from
an enlargement of the Board, may be filled by vote of a majority of the
directors then in office, although less than a quorum, or by a sole remaining
director. A director elected to fill a vacancy shall be elected for the
unexpired term of his or her predecessor in office, and a director chosen to
fill a position resulting from an increase in the number of directors shall hold
office until the next annual meeting of stockholders and until his or her
successor is elected and qualified, or until the earlier death, resignation or
removal of such director.
2.5 RESIGNATION. Any director may resign by delivering a written
resignation to the corporation at its principal office or to the President or
Secretary. Such resignation shall be effective upon receipt unless it is
specified to be effective at some other time or upon the happening of some other
event.
2.6 REGULAR MEETINGS. Regular meetings of the Board of Directors may be
held without notice at such time and place, either within or without the State
of Delaware, as shall be determined from time to time by the Board of Directors;
provided that any director who is absent when such a determination is made shall
be given notice of the determination. A regular meeting of the Board of
Directors may be held without notice immediately after and at the same place as
the annual meeting of stockholders.
2.7 SPECIAL MEETINGS. Special meetings of the Board of Directors may be
held at any time and place, within or without the State of Delaware, designated
in a call by the Chairman of the Board, President, two or more directors, or by
one director in the event that there is only a single director in office.
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2.8 NOTICE OF SPECIAL MEETINGS. Notice of any special meeting of
directors shall be given to each director by the Secretary or by the officer or
one of the directors calling the meeting. Notice shall be duly given to each
director (i) by giving notice to such director in person or by telephone at
least 24 hours in advance of the meeting, (ii) by sending written notice via
facsimile, or delivering written notice by hand or by overnight courier, to his
or her last known business or home address at least 24 hours in advance of the
meeting, or (iii) by mailing written notice to his or her last known business or
home address at least 72 hours in advance of the meeting. A notice or waiver of
notice of a meeting of the Board of Directors need not specify the purposes of
the meeting.
2.9 MEETINGS BY TELEPHONE CONFERENCE CALLS. Directors or any members of
any committee designated by the directors may participate in a meeting of the
Board of Directors or such committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation by such means shall constitute
presence in person at such meeting.
2.10 QUORUM. A majority of the total number of the whole Board of
Directors shall constitute a quorum at all meetings of the Board of Directors.
In the event one or more of the directors shall be disqualified to vote at any
meeting, then the required quorum shall be reduced by one for each such director
so disqualified; provided, however, that in no case shall less than one-third
(1/3) of the number so fixed constitute a quorum. In the absence of a quorum at
any such meeting, a majority of the directors present may adjourn the meeting
from time to time without further notice other than announcement at the meeting,
until a quorum shall be present.
2.11 ACTION AT MEETING. At any meeting of the Board of Directors at
which a quorum is present, the vote of a majority of those present shall be
sufficient to take any action, unless a different vote is specified by law, the
Certificate of Incorporation or these By-Laws.
2.12 ACTION BY CONSENT. Any action required or permitted to be taken at
any meeting of the Board of Directors or of any committee of the Board of
Directors may be taken without a meeting, if all members of the Board or
committee, as the case may be, consent to the action in writing, and the written
consents are filed with the minutes of proceedings of the Board or committee.
2.13 REMOVAL. Except as otherwise provided by the General Corporation
Law of Delaware, any one or more or all of the directors may be removed, with or
without cause, by the holders of a majority of the shares then entitled to vote
at an election of directors, except that the directors elected by the holders of
a particular class or series of stock may be removed without cause only by vote
of the holders of a majority of the outstanding shares of such class or series.
2.14 COMMITTEES. The Board of Directors may designate one or more
committees, each committee to consist of one or more of the directors of the
corporation. The Board may designate one or more directors as alternate members
of any committee, who may replace any absent or disqualified member at any
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meeting of the committee. In the absence or disqualification of a member of a
committee, the member or members of the committee present at any meeting and not
disqualified from voting, whether or not he or she or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member. Any such
committee, to the extent provided in the resolution of the Board of Directors
and subject to the provisions of the General Corporation Law of the State of
Delaware, shall have and may exercise all the powers and authority of the Board
of Directors in the management of the business and affairs of the corporation
and may authorize the seal of the corporation to be affixed to all papers which
may require it. Each such committee shall keep minutes and make such reports as
the Board of Directors may from time to time request. Except as the Board of
Directors may otherwise determine, any committee may make rules for the conduct
of its business, but unless otherwise provided by the directors or in such
rules, its business shall be conducted as nearly as possible in the same manner
as is provided in these By-laws for the Board of Directors.
2.15 COMPENSATION OF DIRECTORS. Directors may be paid such compensation
for their services and such reimbursement for expenses of attendance at meetings
as the Board of Directors may from time to time determine. No such payment shall
preclude any director from serving the corporation or any of its parent or
subsidiary corporations in any other capacity and receiving compensation for
such service.
ARTICLE 3 - Officers
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3.1 ENUMERATION. The officers of the corporation shall consist of a
President, a Secretary, a Treasurer and such other officers with such other
titles as the Board of Directors shall determine, including a Chairman of the
Board, a Vice-Chairman of the Board, and one or more Vice Presidents, Assistant
Treasurers, and Assistant Secretaries. The Board of Directors may appoint such
other officers as it may deem appropriate.
3.2 ELECTION. The President, Treasurer and Secretary shall be elected
annually by the Board of Directors at its first meeting following the annual
meeting of stockholders. Other officers may be appointed by the Board of
Directors at such meeting or at any other meeting.
3.3 QUALIFICATION. No officer need be a stockholder. Any two or more
offices may be held by the same person.
3.4 TENURE. Except as otherwise provided by law, by the Certificate of
Incorporation or by these By-Laws, each officer shall hold office until his or
her successor is elected and qualified, unless a different term is specified in
the vote choosing or appointing him, or until his or her earlier death,
resignation or removal.
3.5 RESIGNATION AND REMOVAL. Any officer may resign by delivering his
or her written resignation to the corporation at its principal office or to the
President or Secretary. Such resignation shall be effective upon receipt unless
it is specified to be effective at some other time or upon the happening of some
other event.
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Any officer may be removed at any time, with or without cause, by vote
of a majority of the entire number of directors then in office.
Except as the Board of Directors may otherwise determine, no officer
who resigns or is removed shall have any right to any compensation as an officer
for any period following his or her resignation or removal, or any right to
damages on account of such removal, whether his or her compensation be by the
month or by the year or otherwise, unless such compensation is expressly
provided in a duly authorized written agreement with the corporation.
3.6 VACANCIES. The Board of Directors may fill any vacancy occurring in
any office for any reason and may, in its discretion, leave unfilled for such
period as it may determine any offices other than those of President, Treasurer
and Secretary. Each such successor shall hold office for the unexpired term of
his or her predecessor and until his or her successor is elected and qualified,
or until his or her earlier death, resignation or removal.
3.7 CHAIRMAN OF THE BOARD AND VICE CHAIRMAN OF THE BOARD. The Board of
Directors may appoint a Chairman of the Board. If the Board of Directors
appoints a Chairman of the Board, he or she shall perform such duties and
possess such powers as are assigned to him or her by the Board of Directors.
Unless otherwise provided by the Board of Directors, he or she shall preside at
all meetings of the stockholders and at all meetings of the Board of Directors.
If the Board of Directors appoints a Vice Chairman of the Board, he or she
shall, in the absence or disability of the Chairman of the Board, perform the
duties and exercise the powers of the Chairman of the Board and shall perform
such other duties and possess such other powers as may from time to time be
vested in him or her by the Board of Directors.
3.8 PRESIDENT. The President shall, subject to the direction of the
Board of Directors, have general charge and supervision of the business of the
corporation. Unless the Board of Directors has designated the Chairman of the
Board or another officer as Chief Executive Officer, the President shall be the
Chief Executive Officer of the corporation. The President shall perform such
other duties and shall have such other powers as the Board of Directors may from
time to time prescribe.
3.9 VICE PRESIDENTS. Any Vice President shall perform such duties and
possess such powers as the Board of Directors or the President may from time to
time prescribe. In the event of the absence, inability or refusal to act of the
President, the Vice President (or if there shall be more than one, the Vice
Presidents in the order determined by the Board of Directors) shall perform the
duties of the President and when so performing shall have all the powers of and
be subject to all the restrictions upon the President. The Board of Directors
may assign to any Vice President the title of Executive Vice President, Senior
Vice President or any other title selected by the Board of Directors.
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3.10 SECRETARY AND ASSISTANT SECRETARIES. The Secretary shall perform
such duties and shall have such powers as the Board of Directors or the
President may from time to time prescribe. In addition, the Secretary shall
perform such duties and have such powers as are incident to the office of the
secretary, including without limitation the duty and power to give notices of
all meetings of stockholders and special meetings of the Board of Directors, to
attend all meetings of stockholders and the Board of Directors and keep a record
of the proceedings, to maintain a stock ledger and prepare lists of stockholders
and their addresses as required, to be custodian of corporate records and the
corporate seal and to affix and attest to the same on documents.
Any Assistant Secretary shall perform such duties and possess such
powers as the Board of Directors, the President or the Secretary may from time
to time prescribe. In the event of the absence, inability or refusal to act of
the Secretary, the Assistant Secretary (or if there shall be more than one, the
Assistant Secretaries in the order determined by the Board of Directors) shall
perform the duties and exercise the powers of the Secretary.
In the absence of the Secretary or any Assistant Secretary at any
meeting of stockholders or directors, the person presiding at the meeting shall
designate a temporary secretary to keep a record of the meeting.
3.11 TREASURER AND ASSISTANT TREASURERS. The Treasurer shall perform
such duties and shall have such powers as may from time to time be assigned to
him or her by the Board of Directors or the President. In addition, the
Treasurer shall perform such duties and have such powers as are incident to the
office of treasurer, including without limitation the duty and power to keep and
be responsible for all funds and securities of the corporation, to deposit funds
of the corporation in properly selected depositories, to properly disburse such
funds, to make proper accounts of such funds, and to render as required by the
Board of Directors statements of all such transactions and of the financial
condition of the corporation.
The Assistant Treasurers shall perform such duties and possess such
powers as the Board of Directors, the President or the Treasurer may from time
to time prescribe. In the event of the absence, inability or refusal to act of
the Treasurer, the Assistant Treasurer (or if there shall be more than one, the
Assistant Treasurers in the order determined by the Board of Directors) shall
perform the duties and exercise the powers of the Treasurer.
3.12 SALARIES. Officers of the corporation shall be entitled to such
salaries, compensation or reimbursement as shall be fixed or allowed from time
to time by the Board of Directors.
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ARTICLE 4 - Capital Stock
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4.1 ISSUANCE OF STOCK. Unless otherwise voted by the stockholders and
subject to the provisions of the Certificate of Incorporation, the whole or any
part of any unissued balance of the authorized capital stock of the corporation
or the whole or any part of any balance of the authorized capital stock of the
corporation held in its treasury may be issued, sold, transferred or otherwise
disposed of by vote of the Board of Directors in such manner, for such
consideration and on such terms as the Board of Directors may determine.
4.2 CERTIFICATES OF STOCK. Every holder of stock of the corporation
shall be entitled to have a certificate, in such form as may be prescribed by
law and by the Board of Directors, certifying the number and class of shares
owned by him or her in the corporation. Each such certificate shall be signed
by, or in the name of the corporation by, the Chairman or Vice Chairman, if any,
of the Board of Directors, or the President or a Vice President, and the
Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary
of the corporation. Any or all of the signatures on the certificate may be a
facsimile.
Each certificate for shares of stock which are subject to any
restriction on transfer pursuant to the Certificate of Incorporation, the
By-Laws, applicable securities laws or any agreement among any number of
stockholders or among such holders and the corporation shall have conspicuously
noted on the face or back of the certificate either the full text of the
restriction or a statement of the existence of such restriction.
4.3 TRANSFERS. Except as otherwise established by rules and regulations
adopted by the Board of Directors, and subject to applicable law, shares of
stock may be transferred on the books of the corporation by the surrender to the
corporation or its transfer agent of the certificate representing such shares
properly endorsed or accompanied by a written assignment or power of attorney
properly executed, and with such proof of authority or the authenticity of
signature as the corporation or its transfer agent may reasonably require.
Except as may be otherwise required by law, by the Certificate of Incorporation
or by these By-Laws, the corporation shall be entitled to treat the record
holder of stock as shown on its books as the owner of such stock for all
purposes, including the payment of dividends and the right to vote with respect
to such stock, regardless of any transfer, pledge or other disposition of such
stock until the shares have been transferred on the books of the corporation in
accordance with the requirements of these By-Laws.
4.4 LOST, STOLEN OR DESTROYED CERTIFICATES. The corporation may issue a
new certificate of stock in place of any previously issued certificate alleged
to have been lost, stolen, or destroyed, upon such terms and conditions as the
Board of Directors may prescribe, including the presentation of reasonable
evidence of such loss, theft or destruction and the giving of such indemnity as
the Board of Directors may require for the protection of the corporation or any
transfer agent or registrar.
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4.5 RECORD DATE. The Board of Directors may fix in advance a date as a
record date for the determination of the stockholders entitled to notice of or
to vote at any meeting of stockholders, or entitled to receive payment of any
dividend or other distribution or allotment of any rights in respect of any
change, conversion or exchange of stock, or for the purpose of any other lawful
action. Such record date shall not be more than 60 nor less than 10 days before
the date of such meeting, nor more than 60 days prior to any other action to
which such record date relates.
If no record date is fixed, the record date for determining
stockholders entitled to notice of or to vote at a meeting of stockholders shall
be at the close of business on the day before the day on which notice is given,
or, if notice is waived, at the close of business on the day before the day on
which the meeting is held. The record date for determining stockholders for any
other purpose shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating to such purpose.
A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
ARTICLE 5 - General Provisions
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5.1 FISCAL YEAR. Except as from time to time otherwise designated by
the Board of Directors, the fiscal year of the corporation shall begin on the
first day of October in each year and end on the last day of September in each
year.
5.2 CORPORATE SEAL. The corporate seal shall be in such form as shall
be approved by the Board of Directors.
5.3 WAIVER OF NOTICE. Whenever any notice whatsoever is required to be
given by law, by the Certificate of Incorporation or by these By-Laws, a waiver
of such notice either in writing signed by the person entitled to such notice or
such person's duly authorized attorney, or by telegraph, cable or any other
available method, whether before, at or after the time stated in such waiver, or
the appearance of such person or persons at such meeting in person or by proxy,
shall be deemed equivalent to such notice.
5.4 VOTING OF SECURITIES. Except as the directors may otherwise
designate, the President or Treasurer may waive notice of, and act as, or
appoint any person or persons to act as, proxy or attorney-in-fact for this
corporation (with or without power of substitution) at, any meeting of
stockholders or shareholders of any other corporation or organization, the
securities of which may be held by this corporation.
5.5 EVIDENCE OF AUTHORITY. A certificate by the Secretary, or an
Assistant Secretary, or a temporary Secretary, as to any action taken by the
stockholders, directors, a committee or any officer or representative of the
corporation shall as to all persons who rely on the certificate in good faith be
conclusive evidence of such action.
11
<PAGE>
5.6 CERTIFICATE OF INCORPORATION. All references in these By-Laws to
the Certificate of Incorporation shall be deemed to refer to the Certificate of
Incorporation of the corporation, as amended and in effect from time to time.
5.7 TRANSACTIONS WITH INTERESTED PARTIES. No contract or transaction
between the corporation and one or more of the directors or officers, or between
the corporation and any other corporation, partnership, association, or other
organization in which one or more of the directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the Board of Directors or a committee of the
Board of Directors which authorizes the contract or transaction or solely
because his or her or their votes are counted for such purpose, if:
(1) The material facts as to his or her relationship or
interest and as to the contract or transaction are disclosed or are
known to the Board of Directors or the committee, and the Board or
committee in good faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested directors, even
though the disinterested directors be less than a quorum;
(2) The material facts as to his or her relationship or
interest and as to the contract or transaction are disclosed or are
known to the stockholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the
stockholders; or
(3) The contract or transaction is fair as to the corporation
as of the time it is authorized, approved or ratified, by the Board of
Directors, a committee of the Board of Directors, or the stockholders.
Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or of a committee
which authorizes the contract or transaction.
5.8 SEVERABILITY. Any determination that any provision of these By-Laws
is for any reason inapplicable, illegal or ineffective shall not affect or
invalidate any other provision of these By-Laws.
5.9 PRONOUNS. All pronouns used in these By-Laws shall be deemed to
refer to the masculine, feminine or neuter, singular or plural, as the identity
of the person or persons may require.
ARTICLE 6 - Amendments
----------------------
6.1 BY THE BOARD OF DIRECTORS. These By-Laws may be altered, amended or
repealed or new by-laws may be adopted by the affirmative vote of a majority of
the directors present at any regular or special meeting of the Board of
Directors at which a quorum is present.
12
<PAGE>
6.2 BY THE STOCKHOLDERS. These By-Laws may be altered, amended or
repealed or new by-laws may be adopted by the affirmative vote of the holders of
a majority of the shares of the capital stock of the corporation issued and
outstanding and entitled to vote at any regular or special meeting of
stockholders, provided notice of such alteration, amendment, repeal or adoption
of new by-laws shall have been stated in the notice of such regular or special
meeting.
By-laws Adopted by Sole Incorporator July 2, 1997
section 1.8 amended 12/16/99 to permit electronic voting
13
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