================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended April 30, 2001
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From _____ to ____
Commission File Number 0-15362
NAVTECH, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 11-2883366
- ------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2340 Garden Road, Monterey, California 93940
----------------------------------------------------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (519) 747-9883
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 issuer's common stock as of May 31, 2001
was 3,865,516 shares.
================================================================================
NAVTECH, INC.
FORM 10-QSB
For the Quarter Ended April 30, 2001
INDEX
Part I. Financial Information
Item 1. Financial Statements Page
----
a) Consolidated Statements of Operations
for the Six Months and Three Months Ended
April 30, 2001 and 2000................................ 1
b) Consolidated Balance Sheets
as of April 30, 2001 and October 31, 2000.............. 2
c) Consolidated Statements of Cash Flow
for the Six Months Ended April 30, 2001 and 2000....... 3
d) Notes to Consolidated Financial Statements............. 4
Item 2. Management's Discussion and Analysis
or Plan of Operation....................................... 8
Part II. Other Information
Item 2. Changes in Securities and Use of Proceeds.................. 12
Item 4. Submission of Matters to a Vote of Security Holders........ 12
Item 6. Exhibits and Reports on Form 8-K........................... 13
Signatures................................................................... 14
Part I. Financial Information
Item 1. Financial Statements
NAVTECH, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Six Months Ended Three Months Ended
April 30 April 30
2000 2001 2000 2001
- ---------------------------------------------------------------------------------------------------------------------
REVENUE
Service fees $ 2,857,659 $ 3,078,486 $ 1,491,962 $ 1,717,315
Software license fees 778,768 - 168,673 -
- ---------------------------------------------------------------------------------------------------------------------
Total revenue 3,636,427 3,078,486 1,660,635 1,717,315
- ---------------------------------------------------------------------------------------------------------------------
COSTS AND EXPENSES
Cost of services 1,685,719 1,905,628 758,547 991,187
Cost of software license fees 50,618 - 14,129 -
Research and development 145,605 168,415 128,449 73,068
Sales and marketing 225,745 694,142 135,245 426,941
General and administrative 990,578 981,276 409,121 482,346
Provision for bad debt - related party 18,921 - - -
Amortization of goodwill 5,652 17,791 2,826 14,991
- ---------------------------------------------------------------------------------------------------------------------
Total costs and expenses 3,122,838 3,767,252 1,448,317 1,988,533
- ---------------------------------------------------------------------------------------------------------------------
Income (loss) from operations 513,589 (688,766) 212,318 (271,218)
- ---------------------------------------------------------------------------------------------------------------------
Other income (expense)
Interest revenue 29,567 308 13,750 302
Interest expense (161,054) (75,854) (89,828) (41,034)
- ---------------------------------------------------------------------------------------------------------------------
(131,487) (75,546) (76,078) (40,732)
- ---------------------------------------------------------------------------------------------------------------------
Income (loss) before income taxes 382,102 (764,312) 136,240 (311,950)
Income taxes (recovery) 143,097 (162,011) 17,304 (45,617)
- ---------------------------------------------------------------------------------------------------------------------
Net earnings (loss) $ 239,005 $ (602,301) $ 118,936 $ (266,333)
- ---------------------------------------------------------------------------------------------------------------------
Net earnings (loss) per share
Basic $ 0.11 $ (0.17) $ 0.05 $ (0.07)
Diluted $ 0.07 $ (0.17) $ 0.03 $ (0.07)
- ---------------------------------------------------------------------------------------------------------------------
See accompanying notes.
1
NAVTECH, INC.
CONSOLIDATED BALANCE SHEETS
October 31, April 30,
2000 2001(1)
- --------------------------------------------------------------------------------- ---------------- -----------------
ASSETS
Current assets
Cash and cash equivalents $ 371,639 $ -
Accounts receivable (net of allowance for bad debts of $164,730; 904,336 1,052,811
2000 - $122,370)
Investment tax credits receivable 100,238 40,541
Prepaid expenses and other 79,681 154,667
- --------------------------------------------------------------------------------- ---------------- -----------------
1,455,894 1,248,019
Capital assets 663,802 490,425
Due from related party 36,809 -
Goodwill (net of accumulated amortization of $39,153; 2000 - $21,362) 109,638 550,354
- --------------------------------------------------------------------------------- ---------------- -----------------
$ 2,266,143 $ 2,288,789
- --------------------------------------------------------------------------------- ---------------- -----------------
LIABILITIES
Current liabilities
Bank indebtedness $ - $ 87,018
Accounts payable and accrued liabilities 732,488 1,153,163
Income taxes payable 184,209 8,431
Due to related parties - current portion 133,971 124,334
Long-term debt - current portion 173,626 181,042
Obligations under capital lease - current portion 2,525 2,714
Deferred lease inducements - current portion 14,196 14,100
- --------------------------------------------------------------------------------- ---------------- -----------------
1,241,015 1,570,802
Due to related parties 310,790 247,934
Long-term debt 175,578 99,669
Obligations under capital lease 5,801 4,351
Deferred lease inducements 70,980 63,448
- --------------------------------------------------------------------------------- ---------------- -----------------
1,804,164 1,986,204
- --------------------------------------------------------------------------------- ---------------- -----------------
Commitments and contingencies
STOCKHOLDERS' EQUITY
Share capital 3,917 4,309
Treasury stock (942,686) (942,686)
Additional paid-in capital 3,133,472 3,577,572
Accumulated other comprehensive income 45,766 44,181
Deficit (1,778,490) (2,380,791)
- --------------------------------------------------------------------------------- ---------------- -----------------
461,979 302,585
- --------------------------------------------------------------------------------- ---------------- -----------------
$ 2,266,143 $ 2,288,789
- --------------------------------------------------------------------------------- ---------------- -----------------
(1) Unaudited
See accompanying notes.
2
NAVTECH, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended April 30, 2000 2001
- ----------------------------------------------------------------------- ---------------- -----------------
OPERATING ACTIVITIES
Net earnings (loss) $ 239,005 $ (602,301)
Adjustments to reconcile net earnings (loss) to net
cash used in operating activities:
Depreciation 48,377 86,461
Amortization of goodwill 5,652 17,791
Loss on sale of capital assets - 818
Provision for uncollectible accounts (13,544) 44,579
Provision for bad debt - former parent company 18,921 -
Deferred lease inducements (7,444) (7,083)
Increase in operating assets - net (110,636) (63,211)
(Decrease) increase in operating liabilities - net (342,366) 227,366
- ----------------------------------------------------------------------- ---------------- -----------------
(162,035) (295,580)
- ----------------------------------------------------------------------- ---------------- -----------------
INVESTING ACTIVITIES
Advances to related party, net (9,401) -
Repayment from related party - 37,164
Purchase of capital assets (138,677) (53,487)
Proceeds from sale of capital assets - 819
Acquisition of Airware Solutions Inc. - (33,500)
- ----------------------------------------------------------------------- ---------------- -----------------
(148,078) (49,004)
- ----------------------------------------------------------------------- ---------------- -----------------
FINANCING ACTIVITIES
Advances from bank line of credit - 87,018
Issuance of common shares 593,750 133,046
Payment of long-term debt (150,519) (116,335)
Payment of notes (25,968) (125,083)
- ----------------------------------------------------------------------- ---------------- -----------------
417,263 (21,354)
- ----------------------------------------------------------------------- ---------------- -----------------
Effect of foreign exchange rates on cash 3,220 (5,701)
- ----------------------------------------------------------------------- ---------------- -----------------
Net cash flow 110,370 (371,639)
Cash and cash equivalents, beginning of period 4,504 371,639
- ----------------------------------------------------------------------- ---------------- -----------------
Cash and cash equivalents, end of period $ 114,874 $ -
- ----------------------------------------------------------------------- ---------------- -----------------
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ (140,391) $ (57,801)
Cash paid during the period for income taxes $ - $ -
- ----------------------------------------------------------------------- ---------------- -----------------
See accompanying notes.
3
NAVTECH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
DESCRIPTION OF BUSINESS AND ORGANIZATION
Navtech, Inc. ("Navtech-US") was originally incorporated in the State of New
York in 1981 and then reincorporated in the State of Delaware in 1987. Navtech
Systems Support Inc. ("Navtech-Canada"), a wholly-owned subsidiary of
Navtech-US, was incorporated in the Province of Ontario in 1987. Navtech (UK)
Limited ("Navtech-UK"), a wholly-owned subsidiary of Navtech-Canada, was
incorporated in the United Kingdom in 1994. Airware Solutions Inc. ("Airware"),
a wholly-owned subsidiary of Navtech-US, was incorporated in the Province of
Quebec in 1986. Navtech-US acquired all of the issued and outstanding shares of
common and preferred stock of Airware on February 1, 2001. When we refer to
Navtech, we are speaking of Navtech-US and its subsidiaries.
Our head office is located at 2340 Garden Road, Suite 102, Monterey, CA 93940.
We maintain a website at www.navtechinc.com. Our common stock is publicly traded
on the OTC Electronic Bulletin Board of the National Association of Securities
Dealers under the symbol "NAVH". Our Investor Relations Department can be
reached at (519) 747-9883.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The consolidated balance sheet as of April 30, 2001, the consolidated statements
of operations for the three and six months ended April 30, 2001 and 2000 and the
consolidated statements of cash flows for the six months ended April 30, 2001
and 2000 have been prepared by us without audit. In our opinion, all adjustments
(which include only normal recurring accrual adjustments) necessary to present
fairly the financial position, results of operations and cash flows at April 30,
2001, and for all periods presented, have been made.
The consolidated financial statements include the accounts of Navtech-US and its
wholly owned subsidiaries, Navtech-Canada, Navtech-UK and Airware. All material
intercompany balances and transactions have been eliminated. In accordance with
Statement of Financial Accounting Standards No. 52, "Foreign Currency
Translations," assets and liabilities of foreign operations are translated at
current rates of exchange, while results of operations are translated at average
rates in effect for that period. Unrealized translation gains or losses are
shown as a separate component of stockholders' equity.
For information concerning our significant accounting policies, reference is
made to our Annual Report on Form 10-KSB for the year ended October 31, 2000.
Results of operations for the six months ended April 30, 2001 are not
necessarily indicative of the operating results for the full year.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In December 1999, the Securities and Exchange Commission (the "SEC") issued
Staff Accounting Bulletin ("SAB") 101, "Revenue Recognition in Financial
Statements," which summarizes the SEC's views in applying generally accepted
accounting principles to revenue recognition. We record revenues in accordance
with the American Institute of Certified Public Accountants ("AICPA") Statement
of Position ("SOP") 97-2, which is in compliance with SAB 101. Therefore the
adoption of SAB 101 has had no material impact on our revenue recognition
policies.
The Financial Accounting Standards Board ("FASB") issued Statement of Financial
Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Financial
Instruments and Hedging Activities," in June 1998. SFAS No. 133 requires an
entity to recognize all derivatives and measure those instruments at fair value.
In June 1999, the FASB issued SFAS No. 137, "Accounting for Derivative
Instruments and Hedging Activities - Deferral of the Effective Date of FASB
Statement No. 133." In June 2000, the FASB issued SFAS No. 138, "Accounting for
Certain Derivative Instruments and Certain Hedging Activities," an amendment of
SFAS No. 133. Based on the revised effective date, we adopted SFAS No. 133, as
amended by SFAS No. 138, on November 1, 2000. The adoption of SFAS No. 133, as
amended, had no material effect on our results of operations or financial
position.
4
In March 2000, the FASB issued FASB Interpretation No. ("FIN") 44, "Accounting
for Certain Transactions Involving Stock Compensation - an Interpretation of APB
Opinion No. 25." FIN 44 clarifies the application of APB Opinion No. 25 to
certain issues including: the definition of an employee for purposes of applying
APB Opinion No. 25; the criteria for determining whether a plan qualifies as a
noncompensatory plan; the accounting consequence of various modifications to the
terms of previously fixed stock options or awards; and the accounting for the
exchange of stock compensation awards in a business combination. FIN 44 is
effective July 1, 2000, but certain conclusions in FIN 44 are applicable
retroactively to specific events occurring after either December 15, 1999 or
January 12, 2000. We have determined that the application of FIN 44 had no
material impact on our financial position or results of operations in this
fiscal quarter.
In September 2000, the FASB issued SFAS No. 140, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities - a Replacement
of FASB Statement No. 125." SFAS No. 140 revises the standards for accounting
for securitizations and other transfers of financial assets and collateral. The
accounting standards of SFAS No. 140 are effective for transfers and servicing
of financial assets and extinguishments of liabilities occurring after March 31,
2001. We are in the process of evaluating the impact, if any, on our reported
financial condition or results of operations from the adoption of SFAS No. 140.
COMPREHENSIVE INCOME (LOSS)
The components of our total comprehensive income (loss) were as follows:
Six Months Ended Three Months Ended
April 30 April 30
2000 2001 2000 2001
- ---------------------------------------------------------- ------------- ------------- ------------- --------------
Net earnings (loss) $ 239,005 $ (602,301) $ 118,936 $ (266,333)
Currency translation adjustments (238) (1,585) 3,796 (3,505)
- ---------------------------------------------------------- ------------- ------------- ------------- --------------
Comprehensive income (loss) $ 238,767 $ (603,886) $ 122,732 $ (269,838)
- ---------------------------------------------------------- ------------- ------------- ------------- --------------
5
EARNINGS (LOSS) PER SHARE
Basic and diluted earnings (loss) per share are calculated as follows:
Six Months ended Three Months ended
April 30, April 30,
2000 2001 2000 2001
- ----------------------------------------------------------------------------------------------------------------
Numerator:
Net earnings (loss) (A) $ 239,005 $ (602,301) $ 118,936 $(266,333)
- ----------------------------------------------------------------------------------------------------------------
Denominator:
Denominator for basic earnings (loss) per share -
weighted average
number of common shares outstanding (B) 2,210,313 3,604,603 2,418,647 3,768,769
Effect of dilutive securities:
Employee stock options and warrants 1,029,110 - 1,029,110 -
- ----------------------------------------------------------------------------------------------------------------
Denominator for diluted earnings (loss) per share -
adjusted weighted
average number of common shares outstanding (C) 3,239,423 3,604,603 3,447,757 3,768,769
- ----------------------------------------------------------------------------------------------------------------
Earnings (loss) per share - basic (A)/(B) $ 0.11 $ (0.17) $ 0.05 $ (0.07)
- ----------------------------------------------------------------------------------------------------------------
Earnings (loss) per share - diluted (A)/(C) $ 0.07 $ (0.17) $ 0.03 $ (0.07)
- ----------------------------------------------------------------------------------------------------------------
Dilutive securities consist of employee stock options and warrants. Specific
employee stock options and warrants are excluded if their effect is
antidilutive.
COMMITMENTS AND CONTINGENCIES
Legal Proceedings
On October 1, 1998, Southern Air Transport, Inc. filed a bankruptcy petition in
the United States Bankruptcy Court for the Southern District of Ohio. In
connection with such proceeding, we have received a demand for the return of
$88,850 in payments made by Southern Air to Navtech-Canada within 90 days prior
to Southern Air's filing of the bankruptcy petition. The demand alleges that the
payments made were preferential payments and must be returned. We believe that
the payments received were for contemporaneous consideration and need not be
returned; as such, there is no provision recorded in the financial statements
for April 30, 2001.
COMPARATIVE FIGURES
Certain accounts for the comparative period have been reclassified to conform
with the presentation adopted in the current year.
6
ACQUISITION OF AIRWARE SOLUTIONS INC.
On February 1, 2001, we acquired all of the issued and outstanding shares of
common and preferred stock of Airware Solutions Inc., a Canadian company.
Airware develops leading edge scheduling systems for the global airline
industry. The consideration we paid to the common stockholders of Airware
consisted of an aggregate of 133,560 shares of our common stock valued at $1.25
per share, the closing price of our common stock on February 1, 2001, and
warrants to acquire 56,000 shares of our common stock at an exercise price of
$1.25 per share. The warrants were valued at $49,091 as determined by their
estimated fair value as of February 1, 2001 using the Black-Scholes option
pricing model. We paid the preferred stockholders of Airware a cash payment of
$50,000 Canadian (approximately $33,500 US). Concurrently with the closing of
the acquisition, we settled certain obligations of Airware by issuing an
aggregate of 76,323 shares of our common stock and making cash payments totaling
$112,000 Canadian (approximately $75,000 US). We used working capital to satisfy
our cash requirements in connection with the acquisition.
The acquisition was accounted for as a purchase, and as such, the fair values of
the assets acquired and liabilities assumed have been recorded on the date of
acquisition. The excess of the consideration paid and the related costs of
acquisition over the estimated fair value of the net assets acquired, totaling
$458,497, has been recorded as goodwill and is being amortized on a
straight-line basis over ten years.
The historical operating results for the three and six months ended April 30,
2000 and the consolidated balance sheet at October 31, 2000 include only those
of Navtech, Navtech-Canada and Navtech UK. Airware's operating results have been
included from the effective date of the acquisition (February 1, 2001).
7
NAVTECH, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Item 2. Management's Discussion and Analysis or Plan of Operation
FORWARD-LOOKING STATEMENTS
This Quarterly Report contains forward-looking statements as that term is
defined in the federal securities laws. The events described in forward-looking
statements contained in this Quarterly Report may not occur. Generally these
statements relate to business plans or strategies, projected or anticipated
benefits or other consequences of our plans or strategies, projected or
anticipated benefits from acquisitions to be made by us, or projections
involving anticipated revenues, earnings or other aspects of our operating
results. The words "may," "will," "expect," "believe," "anticipate," "project,"
"plan," "intend," "estimate," and "continue," and their opposites and similar
expressions are intended to identify forward-looking statements. We caution you
that these statements are not guarantees of future performance or events and are
subject to a number of uncertainties, risks and other influences, many of which
are beyond our control, that may influence the accuracy of the statements and
the projections upon which the statements are based. Our actual results,
performance and achievements could differ materially from those expressed or
implied in these forward-looking statements. We undertake no obligation to
publically update or revise any forward-looking statements, whether from new
information, future events or otherwise. The following discussion should be read
in conjunction with the financial statements and notes found in Item 1 of Part I
of this Form 10-QSB. All financial information is based on our fiscal calendar.
RESULTS OF OPERATIONS
Revenue
Revenue from service fees was approximately $3.1 million for the six months
ended April 30, 2001, as compared to approximately $2.9 million for the six
months ended April 30, 2000, an increase of approximately 7%, or $221,000. This
increase is primarily due to an increase in fees from existing customers of
approximately $339,000 and an increase in fees from new customers of
approximately $400,000. These increases were offset by the loss of revenue of
approximately $167,000 from one-time customers in 2000 and the loss in fees of
approximately $351,000 from customers who ceased operations in prior quarters.
There was no revenue from software license fees in the six months ended April
30, 2001 as compared to approximately $779,000 in the six months ended April 30,
2000. Software license fees are expected to terminate as Navtech moves
completely to an Application Service Provider (ASP) marketing philosophy. This
model is expected to yield long-term benefits since monthly revenues will be
higher than those under a license sale philosophy. Further explanation regarding
our switch to an ASP marketing philosophy can be found in the "Plan of
Operation; Sales Initiatives" section.
Costs and expenses
Cost of services increased approximately 13%, or $220,000, from approximately
$1.7 million for the six months ended April 30, 2000 to approximately $1.9
million for the six months ended April 30, 2001. This change is primarily
attributable to an increase in salaries and benefits of approximately $122,000,
an increase in communications costs of approximately $30,000, as well as net
increases in other operating expenses of approximately $68,000. The increase in
salaries and benefits is due primarily to our commitment to investing in each of
our product groups with the addition of programmers, as well as the addition of
Airware staff pursuant to the acquisition. Airware accounted for approximately
$33,000 of the increase in salaries and benefits as well as approximately
$19,000 in other operating expenses.
8
Cost of software license fees, which were approximately $51,000 for the six
months ended April 30, 2000, were eliminated in the six months ended April 30,
2001. This change is consistent with our change to an ASP marketing philosophy.
Research and development expenditures increased approximately $23,000 during the
six months ended April 30, 2001 over the same period in fiscal 2000 due to our
investment in two major development projects.
Sales and marketing expenses increased approximately 207%, or approximately
$468,000, from approximately $226,000 for the six months ended April 30, 2000 to
approximately $694,000 for the six months ended April 30, 2001. This increase is
attributable to an increase in salaries and benefits of approximately $237,000,
an increase in travel costs of approximately $101,000 and an increase in
marketing expenses of approximately $130,000. These increased costs are
representative of our commitment to expand our sales and marketing initiatives
including an expanded sales force, increased exposure at various trade shows and
our annual User's Conference held in April 2001.
General and administrative expenses decreased approximately 1%, or $11,000, from
approximately $991,000 for the six months ended April 30, 2000 to approximately
$980,000 for the six months ended April 30, 2001. This decrease is attributable
to a decrease in professional fees of approximately $52,000, a decrease in
consulting expenses of $92,000 and a decrease in bad debt expense of
approximately $34,000. Offsetting these decreases were an increase in salaries
and benefits of approximately $72,000, an increase in travel costs of
approximately $51,000 and a net increase in other general and administrative
expenses of approximately $44,000.
Provision for Income Taxes
We recorded an estimated recovery of income taxes of approximately $162,000 for
the six months ended April 30, 2001. This recovery is a result of our ability to
carry back current period losses in Canada against profits from prior years. Our
effective tax rate of 22% varies from the statutory U.S. rate due to losses in
the U.S. and U.K. where tax benefits are currently not available to us.
Net earnings (loss)
The unaudited consolidated financial statements reflect a net loss of
approximately $602,000 for the six months ended April 30, 2001 as compared to
net earnings of approximately $239,000 for the six months ended April 30, 2000.
LIQUIDITY AND CAPITAL RESOURCES
As of April 30, 2001, we had a net indebtedness to our banks of $87,018. At
April 30, 2001, we had a working capital deficiency of $272,777 as compared to
working capital of $214,879 as at October 31, 2000.
Cash flows from operations accounted for a net outflow of $250,887 primarily
based on the net loss for the quarter, net of the depreciation adjustment, and a
net increase in operating assets of approximately $63,000. Offsetting these
outflows was a increase of approximately $273,000 in operating liabilities.
Cash flows from investing activities for the six months ended April 30, 2001
represent a net outflow of $93,697, primarily due to the acquisition of Airware
on February 1, 2001.
Cash flows from financing activities for the six months ended April 30, 2001
represent a net outflow of $108,372, due to repayment of existing loans and
related party notes and offset by the issuance of common shares.
As of April 30, 2001, we had no significant capital commitments.
9
PLAN OF OPERATION
We are targeting four specific areas to provide additional capital and to
improve earnings for this fiscal year.
Equity
We anticipate that we will need to raise additional equity over the next 6
months to fund our working capital needs, including our commitment for the
addition of programmers for our product groups, investment in our research and
development activities and the development of our sales and marketing
initiatives.
Line of Credit
Navtech-Canada currently has a demand line of credit of $100,000 Canadian. We
are currently renegotiating this operating facility. This facility will be used
in our daily operations. We anticipate that financing requirements specific to
acquisitions of complementary businesses, products or technologies would be
dealt with using debt specific to those transactions.
Sales Initiatives
With our product rebranding complete, we are now focusing our efforts on a new
marketing program designed to reintroduce our full product offering to the North
American, South American and European marketplaces.
We have historically marketed our products in two ways: (1) the licensing of our
software, or (2) acting as an Application Service Provider (ASP). Under the
license sales philosophy we received a one-time revenue for the license sale;
under the ASP philosophy we receive monthly recurring revenue. Our sales efforts
for our rebranded products are now focused on the ASP philosophy only. The ASP
model is expected to yield long-term benefits since monthly revenue will be
higher than under the license sale model. As an ASP, we manage and distribute
our software-based services and solutions to our customers across a network from
a central data center. We have successfully used the ASP philosophy for over six
years and have extensive experience in deploying and supporting software under
this approach.
In November 2000, we opened our Denver, Colorado sales office. Our Executive
Vice President - Sales and Marketing is based in this office and will coordinate
our corporate sales and marketing efforts from there using staff in all of our
locations. We have hired additional staff in both the U.S. and the U.K. in
anticipation of the increased efforts.
10
Other
We are currently in the process of carrying out a detailed review of our
operations in order to identify areas for cost reduction or elimination. We have
identified areas of cost reduction in our fiscal 2001 budgeting process and we
anticipate further cost reductions to be implemented.
We have recently completed a shareholder oddlot repurchase program and are
currently running escheatment program for unexchanged shares designed to reduce
costs in connection with shareholder communications.
It is also our intention to evaluate and pursue any opportunities that may be
available to maximize shareholder value.
11
Part II. Other Information
Item 2. Changes in Securities and Use of Proceeds
On February 1, 2001 we issued to the shareholders of Airware Solutions, Inc., in
conjunction with our acquisition of that company, 133,560 shares of common stock
and presently exercisable one year warrants for the purchase of 56,000 shares of
common stock at an exercise price of $1.25 per share. Concurrently with the
closing of the acquisition, we settled certain obligations of Airware by issuing
an aggregate of 76,323 shares of our common stock. The offering of securities
was exempt from the registration requirements of the Securities Act of 1933
pursuant to Regulation S promulgated thereunder. We determined that the offering
and sale of the securities occurred outside of the United States.
On March 2, 2001 we issued an aggregate of 100,000 shares of common stock, for a
total purchase price of $100,000, pursuant to private transactions with the
following persons:
o Mr. Barry Glick purchased 50,000 shares of common stock for a purchase price
of $50,000. o Mr. Andrew Snyder purchased 40,000 shares of common stock for a
purchase price of $40,000. o Mr. Michael Jakobowski purchased 10,000 shares of
common stock for a purchase price of $10,000.
On April 30, 2001 we entered into a subscription agreement with Mr. Robert N.
Snyder issuing 50,000 shares of common stock for a total purchase price of
$50,000.
The above mentioned offerings of shares on March 2, 2001 and April 30, 2001were
private transactions not involving any public offering and were exempt from the
registration requirements of the Securities Act pursuant to Section 4(2)
thereof. We determined that these investors were either "accredited investors,"
or were otherwise sophisticated investors.
In all of the above mentioned transactions, the certificates representing the
shares of common stock and warrants bear restrictive legends permitting transfer
only upon the registration of the securities or pursuant to an exemption under
the Securities Act.
Item 4. Submission of Matters to a Vote of Security Holders
Our Annual Meeting of Shareholders was held on March 29, 2001. The following
proposals were adopted by the margins indicated:
1. Election of Board of Directors.
Number of Shares
For Withheld
Duncan Macdonald 2,416,256 2,341
Thomas D. Beynon 2,398,618 19,979
Prashant Gupta 2,416,256 2,341
Martin J. Hamrogue 2,415,925 2,672
James P. McGinty 2,416,256 2,341
Denis L. Metherell 2,415,241 2,356
12
2. Increase in the number of common shares authorized to be issued pursuant to
the 1999 Stock Option Plan from 1,500,000 to 3,000,000.
For 2,150,451
Against 28,859
Abstain 32,789
Broker non-vote 206,498
3. Amendment to our Certificate of Incorporation to increase the number of
authorized common shares from 10,000,000 to 20,000,000.
For 2,358,124
Against 27,990
Abstain 32,474
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits
2 Shares Purchase Agreement dated February 1, 2001 among Navtech, Inc.,
Jose Gomide, Mario Guzzi, Daniel Vatne, Karin Vatne, James J. Rowan
and Les Enterprises Ligeti Inc. (1)
3(A) Certificate of Amendment of the Certificate of Incorporation filed in
the State of Delaware on April 10, 2001.
3(B) Certificate of Incorporation, as amended
3(C) By-Laws, as amended (2)
(b) Reports on Form 8-K
We filed the following reports on Form 8-K during the quarter ended April
30, 2001:
o On February 6, 2001 we filed a Form 8-K (Item 5) reporting a change in
position for an executive officer.
o On February 16, 2001 we filed a Form 8-K (Items 2 and 7) reporting our
acquisition of Airware Solutions, Inc.
o On April 16, 2001 we amended the Form 8-K regarding the acquisition of
Airware to include historical and pro forma financial statements (Item
7).
Items 1, 3 and 5 are not applicable and have been omitted.
(1) We hereby incorporate the footnoted exhibit by reference in accordance with
Rule 12b-32, as such exhibit was originally filed as an exhibit in our
Current Report on Form 8-K for an event dated February 1, 2001.
(2) We hereby incorporate the footnoted exhibit by reference in accordance with
Rule 12b-32, as such exhibit was originally filed as an exhibit in our
Annual Report on Form 10-KSB for the fiscal year ended October 31, 1999.
13
Signatures
Pursuant to the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned thereunto duly authorized.
NAVTECH, INC.
Date: June 12, 2001 By: /s/ Duncan Macdonald
--------------------------
Duncan Macdonald
Chairman of the Board and
Chief Executive Officer
By: /s/ David Strucke
--------------------------
David Strucke
Chief Financial Officer
(Principal Financial and
Accounting Officer)
14
Exhibit 3(A)
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
NAVTECH, INC.
(Pursuant to Section 242 of the
General Corporation Law of Delaware)
Navtech, Inc., a corporation organized and existing under the Delaware
General Corporation Law (the "Corporation"), DOES HEREBY CERTIFY:
FIRST: The Certificate of Incorporation of the Corporation is
hereby amended to increase the number of Common Shares that the Corporation
shall be authorized to issue.
SECOND: Paragraph 1 of Article FOURTH of the Certificate of
Incorporation of the Corporation is hereby amended to read as follows:
"FOURTH: 1. The aggregate number of shares of capital stock
which the corporation shall have the authority to issue is TWENTY-TWO
MILLION (22,000,000) shares, of which TWENTY MILLION (20,000,000)
shares shall be Common Stock with a par value of $.001 per share and
TWO MILLION (2,000,000) shares shall be Preferred Stock with a par
value of $.01 per share."
THIRD: The foregoing amendment was duly adopted in accordance with the
provisions of Section 242 of the General Law of the State of Delaware.
IN WITNESS WHEREOF, the Chief Financial Officer of the Corporation has
hereunto set his hand to this Certificate this 29th day of March 2001.
NAVTECH, INC.
By: /s/ David Strucke
----------------------
David Strucke
Chief Financial Officer
Exhibit 3(B)
CERTIFICATE OF INCORPORATION
OF
NAVTECH, INC.
The undersigned, a natural person, for the purpose of organizing a corporation
for conducting the business and promoting the purposes hereinafter stated, under
the provisions and subject to the requirements of the laws of the State of
Delaware (particularly Chapter 1, Title 8 of the Delaware Code and the acts
amendatory thereof and supplemental thereto, and known, identified, and referred
to as the "General Corporation Law of the State of Delaware"), hereby certifies
that:
FIRST: The name of the corporation (hereinafter called the
"corporation") is NAVTECH, INC.
SECOND: The address, including street, number, city, and
county, of the registered office of the corporation in the State of Delaware is
15 East North Street, City of Dover, County of Kent, 19901; and the name of the
registered agent of the corporation in the State of Delaware at such address is
United Corporate Services, Inc.
THIRD: The nature of the business and the purposes to be
conducted and promoted by the corporation, which shall be in addition to the
authority of the corporation to conduct any lawful business, to promote any
lawful purpose, and to engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law of the State of
Delaware, are as follows:
To purchase, receive, take by grant, gift, devise, bequest,
or otherwise, lease, or otherwise acquire, own, hold, improve,
employ, use, and otherwise deal in and with real or personal
property, or any interest therein, wherever situated, and to sell,
convey, lease, exchange, transfer, or otherwise dispose of, or
mortgage or pledge, all or any of its property and assets, or any
interest therein, wherever situated.
To engage generally in the real estate business as
principal, agent, broker, and in any lawful capacity, and generally
to take, lease, purchase, or otherwise acquire, and to own, use,
hold, sell, convey, exchange, lease, mortgage, work, clear, improve,
develop, divide, and otherwise handle, manage, operate, deal in, and
dispose of real estate, real property, lands, multiple-dwelling
structures, houses, buildings, and other works, and any interest or
right therein; to take, lease, purchase, or otherwise acquire, and to
own, use, hold, sell, convey, exchange, hire, lease, pledge,
mortgage, and otherwise handle, and deal in and dispose of, as
principal, agent, broker, and in any lawful capacity, such personal
property, chattels, chattels real, rights, easements, privileges,
choses in action, notes, bonds, mortgages, and securities as may
lawfully be acquired, held, or disposed of; and to acquire, purchase,
sell, assign, transfer, dispose of, and generally deal in and with as
principal, agent, broker, and in any lawful capacity, mortgages and
other interests in real, personal, and mixed properties; to carry on
a general construction, contracting, building, and realty management
business as principal, agent, representative, contractor,
subcontractor, and in any other lawful capacity.
To carry on a general mercantile, industrial, investing, and
trading business in all its branches; to devise, invent, manufacture,
fabricate, assemble, install, service, maintain, alter, buy, sell,
import, export, license as licensor or licensee, lease as lessor or
lessee, distribute, job, enter into, negotiate, execute, acquire, and
assign contracts in respect of, acquire, receive, grant, and assign
licensing arrangements, options, franchises, and other rights in
respect of, and generally deal in and with, at wholesale and retail,
as principal, and as sales, business, special, or general agent,
representative, broker, factor, merchant, distributor, jobber,
advisor, and in any other lawful capacity, goods, wares, merchandise,
commodities, and unimproved, improved, finished, processed, and other
real, personal, and mixed property of any and all kinds, together
with the components, resultants, and by-products thereof.
To apply for, register, obtain, purchase, lease, take
licenses in respect of or otherwise acquire, and to hold, own, use,
operate, develop, enjoy, turn to account, grant licenses and
immunities in respect of, manufacture under and to introduce, sell,
assign, mortgage, pledge, or otherwise dispose of, and, in any manner
deal with and contract with reference to:
(a) inventions, devices, formulae, processes, and any
improvements and modifications thereof;
(b) letters patent, patent rights, patented processes,
copyrights, designs, and similar rights, trade-marks, trade
names, trade symbols, and other indications of origin and
ownership granted by or recognized under the laws of the
United States of America, the District of Columbia, any state
or subdivision thereof, and any commonwealth, territory,
possession, dependency, colony, agency or instrumentality of
the United States of America and of any foreign country, and
all rights connected therewith or appertaining thereunto;
(c) franchises, licenses, grants, and concessions.
To guarantee, purchase, take, receive, subscribe for, and
otherwise acquire, own, hold, use, and otherwise employ, sell, lease,
exchange, transfer, and otherwise dispose of, mortgage, lend, pledge,
and otherwise deal in and with, securities (which term, for the
purpose of this Article THIRD, includes, without limitation of the
generality thereof, any shares of stock, bonds, debentures, notes,
mortgages, other obligations, and any certificates, receipts, or
other instruments representing rights to receive, purchase, or
subscribe for the same, or representing any other rights or interests
therein or in any property or assets) of any persons, domestic and
foreign firms, associations, and corporations, and of any government
or agency or instrumentality thereof; to make payment therefor in any
lawful manner; and, while owner of any such securities, to exercise
any and all rights, powers, and privileges in respect thereof,
including the right to vote.
To make, enter into, perform, and carry out contracts of
every kind and description with any person, firm, association,
corporation, or government or agency or instrumentality thereof.
To acquire by purchase, exchange, or otherwise, all, or any
part of, or any interest in, the properties, assets, business, and
good will of any one or more persons, firms, associations, or
corporations heretofore or hereafter engaged in any business for
which a corporation may now or hereafter be organized under the laws
of the State of Delaware; to pay for the same in cash, property, or
its own or other securities; to hold, operate, reorganize, liquidate,
sell, or in any manner dispose of the whole or any part thereof; and
in connection therewith, to assume or guarantee performance of any
liabilities, obligations, or contracts of such persons, firms,
associations, or corporations, and to conduct the whole or any part
of any business thus acquired.
To lend money in furtherance of its corporate purposes and
to invest and reinvest its funds from time to time to such extent, to
such persons, firms, associations, corporations, governments or
agencies or instrumentalities thereof, and on such terms and on such
security, if any, as the Board of Directors of the corporation may
determine.
To make contracts of guaranty and suretyship of all kinds
and endorse or guarantee the payment of principal, interest, or
dividends upon, and to guarantee the performance of sinking fund or
other obligations of, any securities, and to guarantee in any way
permitted by law the performance of any of the contracts or other
undertakings in which the corporation may otherwise be or become
interested, of any person, firm, association, corporation, government
or agency or instrumentality thereof, or of any other combination,
organization, or entity whatsoever.
To borrow money without limit as to amount and at such rates
of interest as it may determine; from time to time to issue and sell
its own securities, including its shares of stock, notes, bonds,
debentures, and other obligations, in such amounts, on such terms and
conditions, for such purposes and for such prices, now or hereafter
permitted by the laws of the State of Delaware and by this
certificate of incorporation, as the Board of Directors of the
corporation may determine; and to secure any of its obligations by
mortgage, pledge, or other encumbrance of all or any of its property,
franchises, and income.
To be a promoter or manager of other corporations of any
type or kind; and to participate with others in any corporation,
partnership, limited partnership, joint venture, or other association
of any kind, or in any transaction, undertaking, or arrangement which
the corporation would have power to conduct by itself, whether or not
such participation involves sharing or delegation of control with or
to others.
To draw, make, accept, endorse, discount, execute, and issue
promissory notes, drafts, bills of exchange, warrants, bonds,
debentures, and other negotiable or transferable instruments and
evidences of indebtedness whether secured by mortgage or otherwise,
as well as to secure the same by mortgage or otherwise, so far as may
be permitted by the laws of the State of Delaware.
To purchase, receive, take, reacquire, or otherwise acquire,
own and hold, sell, lend, exchange, reissue, transfer, or otherwise
dispose of, pledge, use, cancel, and otherwise deal in and with its
own shares and its other securities from time to time to such an
extent and in such manner and upon such terms as the Board of
Directors of the corporation shall determine; provided that the
corporation shall not use its funds or property for the purchase of
its own shares of capital stock when its capital is impaired or when
such use would cause any impairment of its capital, except to the
extent permitted by law.
To organize, as an incorporator, or cause to be organized
under the laws of the State of Delaware, or of any other State of the
United States of America, or of the District of Columbia, or of any
commonwealth, territory, dependency, colony, possession, agency, or
instrumentality of the United States of America, or of any foreign
country, a corporation or corporations for the purpose of conducting
and promoting any business or purpose for which corporations may be
organized, and to dissolve, wind up, liquidate, merge, or consolidate
any such corporation or corporations or to cause the same to be
dissolved, wound up, liquidated, merged, or consolidated.
To conduct its business, promote its purposes, and carry on
its operations in any and all of its branches and maintain offices
both within and without the State of Delaware, in any and all States
of the United States of America, in the District of Columbia, and in
any or all commonwealths, territories, dependencies, colonies,
possessions, agencies, or instrumentalities of the United States of
America and of foreign governments.
To promote and exercise all or any part of the foregoing
purposes and powers in any and all parts of the world, and to conduct
its business in all or any of its branches as principal, agent,
broker, factor, contractor, and in any other lawful capacity, either
alone or through or in conjunction with any corporations,
associations, partnerships, firms, trustees, syndicates, individuals,
organizations, and other entities in any part of the world, and, in
conducting its business and promoting any of its purposes, to
maintain offices, branches, and agencies in any part of the world, to
make and perform any contracts and to do any acts and things, and to
carry on any business, and to exercise any powers and privileges
suitable, convenient, or proper for the conduct, promotion, and
attainment of any of the business and purposes herein specified or
which at any time may be incidental thereto or may appear conducive
to or expedient for the accomplishment of any of such business and
purposes and which might be engaged in or carried on by a corporation
incorporated or organized under the General Corporation Law of the
State of Delaware, and to have and exercise all of the powers
conferred by the laws of the State of Delaware upon corporations
incorporated or organized under the General Corporation Law of the
State of Delaware.
The foregoing provisions of this Article THIRD shall be
construed both as purposes and powers and each as an independent
purpose and power. The foregoing enumeration of specific purposes and
powers shall not be held to limit or restrict in any manner the
purposes and powers of the corporation, and the purposes and powers
herein specified shall, except when otherwise provided in this
Article THIRD, be in no wise limited or restricted by reference to,
or inference from, the terms of any provision of this or any other
Article of this certificate of incorporation; provided, that the
corporation shall not conduct any business, promote any purpose, or
exercise any power or privilege within or without the State of
Delaware which, under the laws thereof, the corporation may not
lawfully conduct, promote, or exercise.
FOURTH:
1. The aggregate number of shares which the corporation shall
have the authority to issue is TWENTY-TWO MILLION
(22,000,000), of which TWENTY MILLION (20,000,000) shares
shall be common stock with a par value of $.001 per share
and TWO MILLION (2,000,000) shall be Preferred Stock with
a par value of $.01 per share.
2. The 2,000,000 shares of Preferred Stock may be issued in
series. The Board of Directors is vested with the
authority to establish and designate series, to fix the
number of shares therein, and to fix the variations in the
relative rights, preferences and limitations as between
series.
3. [Deleted]
4. Each outstanding share of Common Stock shall be entitled
to one vote on each matter submitted to a vote at a
meeting of stockholders.
5. Each forty (40) shares of the Common Stock, $.001 par
value per share, of the Corporation (the "Old Common
Stock") issued and outstanding or held in treasury as of
5:00 P.M. N.Y. time on April 24, 1990 (the "Effective
Time") shall be reclassified as and changed into one (l)
new share of Common Stock, $.001 par value per share, of
the Corporation (the "New Common Stock"), without any
action by the holder thereof. Stockholders who,
immediately prior to the Effective Time, own a number of
shares of Old Common Stock which is not evenly divisible
by forty (40) shall, with respect to such fractional
interest, be entitled to receive from the Corporation, in
lieu of fractions of shares of New Common Stock, an amount
in cash equal to the product obtained by multiplying the
market price of a share of Old Common Stock as of the
Effective Time by the number of shares of Old Common Stock
held by such stockholder immediately prior to the
Effective Time which is not evenly divisible by forty(40).
Each certificate that theretofore represented shares of
Old Common Stock shall thereafter represent that number of
shares of New Common Stock into which the shares of Old
Common Stock represented by such certificate shall have
been reclassified; provided, however, that each person
holding of record a stock certificate or certificates that
represented shares of Old Common Stock shall receive, upon
surrender of such certificate or certificates, a new
certificate or certificates evidencing and representing
the number of shares of New Common Stock to which such
person is entitled.
6. Each four (4) shares of the Common Stock, $.001 par value
per share, of the Corporation (the "Old Common Stock")
issued and outstanding or held in treasury as of 5:00 P.M.
NY Time on the date on which this Certificate of Amendment
is filed by the Secretary of State of the State of
Delaware April 18, 1993 (the "Effective Time") shall be
reclassified as and changed into one (1) new share of
Common Stock, $.001 par value per share, of the
Corporation (the "New Common Stock"), without any action
by the holder thereof. Stockholders who, immediately
prior to the Effective Time, own a number of shares of Old
Common Stock which is not evenly divisible by four (4)
shall, with respect to such fractional interest, be
entitled to receive from the Corporation, in lieu of
fractions of shares of New Common Stock, an amount in cash
equal to the product obtained by multiplying the market
price of a share of Old Common Stock as of the Effective
Time by the number of shares of Old Common Stock held by
such stockholder immediately prior to the Effective Time
which is not evenly divisible by four (4).
FIFTH: The name and the mailing address of the incorporator
are as follows:
NAME MAILING ADDRESS
Monica Ferguson..............................1 Gulf & Western Plaza
New York, N.Y. 10023-7773
SIXTH: The corporation is to have perpetual existence.
SEVENTH: Whenever a compromise or arrangement is proposed
between this corporation and its creditors or any class of them and/or between
this corporation and its stockholders or any class of them, any court of
equitable jurisdiction within the State of Delaware may, on the application in a
summary way of this corporation or of any creditor or stockholder thereof or on
the application of any receiver or receivers appointed for this corporation
under 291 of Title 8 of the Delaware Code or on the application of trustees in
dissolution or of any receiver or receivers appointed for this corporation under
279 of Title 8 of the Delaware Code order a meeting of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case may be, to be summoned in such manner as the said court
directs. If a majority in number representing three fourths in value of the
creditors or class of creditors, and/or of the stockholders or class of
stockholders of this corporation, as the case may be, agree to any compromise or
arrangement and to any reorganization of this corporation as consequence of such
compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said application
has been made, be binding on all the creditors or class of creditors, and/or on
all the stockholders or class of stockholders, of this corporation, as the case
may be, and also on this corporation.
EIGHTH: For the management of the business and for the conduct
of the affairs of the corporation, and in further definition, limitation, and
regulation of the powers of the corporation and of its directors and of its
stockholders or any class thereof, as the case may be, it is further provided:
1. The management of the business and the conduct of the affairs of
the corporation shall be vested in its Board of Directors. The
number of directors which shall constitute the whole Board of
Directors shall be fixed by, or in the manner provided in, the
Bylaws. The phrase "whole Board" and the phrase "total number of
directors" shall be deemed to have the same meaning, to wit, the
total number of directors which the corporation would have if
there were no vacancies. No election of directors need be by
written ballot.
2. After the original or other Bylaws of the corporation have been
adopted, amended, or repealed, as the case may be, in accordance
with the provisions of 109 of the General Corporation Law of the
State of Delaware, and, after the corporation has received any
payment for any of its stock, the power to adopt, amend, or
repeal the Bylaws of the corporation may be exercised by the
Board of Directors of the corporation; provided, however, that
any provision for the classification of directors of the
corporation for staggered terms pursuant to the provisions of
subsection (d) of 141 of the General Corporation Law of the
State of Delaware shall be set forth in an initial Bylaw or in a
Bylaw adopted by the stockholders entitled to vote of the
corporation unless provisions for such classification shall be
set forth in this certificate of incorporation.
3. Whenever the corporation shall be authorized to issue only one
class of stock, each outstanding share shall entitle the holder
thereof to notice of, and the right to vote at, any meeting of
stockholders. Whenever the corporation shall be authorized to
issue more than one class of stock, no outstanding share of any
class of stock which is denied voting power under the provisions
of the certificate of incorporation shall entitle the holder
thereof to the right to vote at any meeting of stockholders
except as the provisions of paragraph (2) of subsection (b) of
242 of the General Corporation Law of the State of Delaware
shall otherwise require; provided, that no share of any such
class which is otherwise denied voting power shall entitle the
holder thereof to vote upon the increase or decrease in the
number of authorized shares of said class.
NINTH: The personal liability of the directors of the
corporation is hereby eliminated to the fullest extent permitted by paragraph
(7) of subsection (b) of Section 102 of the General Corporation Law of the State
of Delaware, as the same may be amended and supplemented.
TENTH: The corporation shall, to the fullest extent permitted
by Section 145 of the General Corporation Law of the State of Delaware, as the
same may be amended and supplemented, indemnify any and all persons whom it
shall have power to indemnify under said section from and against any and all of
the expenses, liabilities, or other matters referred to in or covered by said
section, and the indemnification provided for herein shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any Bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee, or agent and shall inure to
the benefit of the heirs, executors, and administrators of such a person.
ELEVENTH: From time to time any of the provisions of this
certificate of incorporation may be amended, altered, or repealed, and other
provisions authorized by the laws of the State of Delaware at the time in force
may be added or inserted in the manner and at the time prescribed by said laws,
and all rights at any time conferred upon the stockholders of the corporation by
this certificate of incorporation are granted subject to the provisions of this
Article ELEVENTH.
TWELFTH: If action is to be taken by the stockholders of the
corporation without a meeting, then the written consent of the holders of all of
the shares of capital stock entitled to vote on such action shall be required to
take such action, unless the action has been authorized by the Board of
Directors of the corporation, in which case the written consent of the holders
of not less than a majority of the shares of capital stock entitled to vote on
such action shall be required to take such action.
Originally signed on March 16, 1987.
/s/ Monica Ferguson
Incorporator