QUARTERLY REPORT ON FORM 10-Q
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
_________________________
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended June 27, 1999
or
[ ] 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: 1-12432
AMERICAN POWER CONVERSION CORPORATION
(Exact name of Registrant as specified in its charter)
MASSACHUSETTS 04-2722013
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
132 FAIRGROUNDS ROAD, WEST KINGSTON, RHODE ISLAND 02892
401-789-5735
(Address and telephone number of principal executive offices)
Indicate by check mark whether the Registrant (1) has filed all reports 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 [ ]
Registrant's Common Stock outstanding, $.01 par value, at August 5, 1999 -
192,180,000 shares
1
FORM 10-Q
June 27, 1999
AMERICAN POWER CONVERSION CORPORATION AND SUBSIDIARIES
INDEX
Page No.
Part I - Financial Information:
Item 1. ConsolidatedCondensed Financial Statements:
Consolidated Condensed Balance Sheets -
June 27, 1999 (Unaudited) and December 31, 1998 3 - 4
Consolidated Condensed Statements of Income -
Three Months and Six Months Ended
June 27, 1999 and June 28, 1998 (Unaudited) 5
Consolidated Condensed Statements of Cash Flows -
Three Months and Six Months Ended
June 27, 1999 and June 28, 1998 (Unaudited) 6
Notes to Consolidated Condensed Financial Statements
(Unaudited) 7 - 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9 - 14
Item 3. Quantitative and Qualitative Disclosures About Market Risk 14
Part II - Other Information:
Item 1. Legal Proceedings 14
Item 4. Submission of Matters to a Vote of Security Holders 15
Item 6. Exhibits and Reports on Form 8-K 15
Signatures 16
2
FORM 10-Q
June 27, 1999
PART I - CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
ITEM 1 - FINANCIAL STATEMENTS
AMERICAN POWER CONVERSION CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
ASSETS
June 27, December 31,
1999 1998
(Unaudited)
Current assets:
Cash and cash equivalents $271,819 $219,908
Accounts receivable,
less allowance for doubtful accounts of
$20,013 in 1999 and $15,471 in 1998 195,321 180,356
Inventories:
Raw materials 93,472 87,975
Work-in-process and finished goods 138,424 140,707
Total inventories 231,896 228,682
Prepaid expenses and other current assets 23,463 17,801
Deferred income taxes 30,594 28,498
Total current assets 753,093 675,245
Property, plant, and equipment:
Land, buildings and improvements 55,849 51,735
Machinery and equipment 127,112 125,274
Office equipment, furniture, and fixtures 50,092 44,955
Purchased software 15,177 11,505
248,230 233,469
Less accumulated depreciation and amortization 95,579 85,205
Net property, plant, and equipment 152,651 148,264
Goodwill and other intangibles 49,893 45,837
Other assets 2,240 2,637
Total assets $957,877 $871,983
See accompanying notes to consolidated condensed financial statements.
3
FORM 10-Q
June 27, 1999
AMERICAN POWER CONVERSION CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS (CONTINUED)
(In thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY
June 27, December 31,
1999 1998
(Unaudited)
Current liabilities:
Short term debt $ 1,008 $12,540
Accounts payable 82,596 75,190
Accrued expenses 40,594 28,560
Accrued compensation 24,175 22,130
Accrued sales and marketing programs 15,037 17,824
Accrued retirement contributions 3,884 2,469
Income taxes payable 24,619 22,753
Total current liabilities 191,913 181,466
Deferred tax liability 5,321 7,500
Total liabilities 197,234 188,966
Minority interest - 1,725
Shareholders' equity:
Common stock, $.01 par value;
authorized 200,000 shares; issued 192,343
shares in 1999 and 191,946 shares in 1998 1,923 960
Additional paid-in capital 69,565 67,080
Retained earnings 691,906 614,301
Treasury stock, 250 shares, at cost (1,551) (1,551)
Accumulated other comprehensive income (loss) (1,200) 502
Total shareholders' equity 760,643 681,292
Total liabilities and shareholders' equity $957,877 $871,983
See accompanying notes to consolidated condensed financial statements.
4
FORM 10-Q
June 27, 1999
AMERICAN POWER CONVERSION CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(In thousands except earnings per share)
Six months ended Three months ended
June 27, June 28, June 27, June 28,
1999 1998 1999 1998
(Unaudited)
Net sales $592,647 $479,528 $315,462 $260,661
Cost of goods sold 331,939 263,298 176,909 142,443
Gross profit 260,708 216,230 138,553 118,218
Operating expenses:
Marketing, selling, general and administrative 137,426 118,909 71,102 63,542
Research and development 17,775 16,696 8,823 8,972
Acquired research and development - 7,387 - 7,387
Total operating expenses 155,201 142,992 79,925 79,901
Operating income 105,507 73,238 58,628 38,317
Other income, net 4,571 6,979 2,100 3,445
Earnings before income taxes 110,078 80,217 60,728 41,762
Income taxes 32,473 26,719 17,914 14,990
Net income $77,605 $53,498 $42,814 $26,772
Basic earnings per share $ .40 $ .28 $ .22 $ .14
Basic weighted average shares outstanding 191,861 190,698 191,962 190,788
Diluted earnings per share $ .40 $ .28 $ .22 $ .14
Diluted weighted average shares outstanding 195,850 193,258 195,177 193,480
See accompanying notes to consolidated condensed financial statements.
5
FORM 10-Q
June 27, 1999
AMERICAN POWER CONVERSION CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
Six months ended Three months ended
June 27, June 28, June 27, June 28,
1999 1998 1999 1998
(Unaudited)
Cash flows from operating activities
Net income $77,605 $53,498 $42,814 $26,772
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 12,120 11,743 6,315 5,395
Provision for doubtful accounts 3,464 2,598 1,150 1,350
Deferred income taxes (4,275) (3,232) (5,200) 1,659
Acquired research and development - 7,387 - 7,387
Changes in operating assets and liabilities
excluding
effects of acquisition:
Accounts receivable (18,429) (35,329) 952 (14,926)
Inventories (3,214) (76,422) 11,626 (49,699)
Prepaid expenses and other current assets (5,662) (4,119) (5,127) (2,053)
Other assets 397 (315) 68 (394)
Accounts payable 7,406 49,930 7,147 20,257
Accrued expenses 12,707 (378) 2,330 (538)
Income taxes payable 1,866 2,403 775 (14,168)
Other, net (1,776) - (1,776) -
Net cash provided by (used in) operating activities 82,209 7,764 61,074 (18,958)
Cash flows from investing activities
Capital expenditures, net of capital grants (13,904) (24,174) (9,580) (14,458)
Acquisition (8,310) (52,529) (145) (52,529)
Net cash used in investing activities (22,214) (76,703) (9,725) (66,987)
Cash flows from financing activities
Repayment of short term debt (11,532) - (7,797) -
Proceeds from issuances of common stock 3,448 2,115 2,281 1,369
Net cash (used in) provided by financing activities (8,084) 2,115 (5,516) 1,369
Net change in cash and cash equivalents 51,911 (66,824) 45,833 (84,576)
Cash and cash equivalents at beginning of period 219,908 270,134 225,986 287,886
Cash and cash equivalents at end of period $271,819 $203,310 $271,819 $203,310
Supplemental cash flow disclosures
Cash paid during the period for income taxes
(net of refunds) $32,265 $24,162 $20,942 $24,162
Details of acquisition:
Fair value of assets $ 8,310 $104,544 $ 145 $104,544
Liabilities and minority interest - (50,055) - (50,055)
Cash paid 8,310 54,489 145 54,489
Cash acquired - (1,960) - (1,960)
Acquisition $ 8,310 $52,529 $ 145 $52,529
See accompanying notes to consolidated condensed financial statements.
6
FORM 10-Q
June 27, 1999
AMERICAN POWER CONVERSION CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. Management Representation
In the opinion of management, the accompanying
unaudited interim financial statements contain all
adjustments (consisting of only normal recurring
accruals) necessary to present fairly the financial
position and the results of operations for the interim
periods. The results of operations for the interim
periods are not necessarily indicative of results to be
expected for the full year.
2. Principles of Consolidation
The consolidated financial statements include the
financial statements of American Power Conversion
Corporation and its wholly-owned subsidiaries. All
intercompany accounts and transactions are eliminated
in consolidation.
3. Per Share Data
Basic earnings per share is computed by dividing net
income by the weighted average number of common shares
outstanding during the period. Diluted earnings per
share is computed by dividing net income by the
weighted average number of common shares and dilutive
potential common shares (i.e., stock options)
outstanding during the period. Under the treasury
stock method, unexercised options are assumed to be
exercised at the beginning of the period or at
issuance, if later. The assumed proceeds are then used
to purchase common shares at the average market price
during the period. Potential common shares for which
inclusion would have the effect of increasing diluted
earnings per share (i.e., antidilutive) are excluded
from the computation.
In thousands Six months ended Three months ended
June 27, June 28, June 27, June 28,
1999 1998 1999 1998
Basic weighted average shares outstanding 191,861 190,698 191,962 190,788
Net effect of dilutive potential common shares
outstanding based on the treasury stock
method using the average market price 3,989 2,560 3,215 2,692
Diluted weighted average shares outstanding 195,850 193,258 195,177 193,480
Antidilutive potential common shares excluded
from the computation above 310 3,428 315 3,428
Shares data reflect a two-for-one stock split effected May 28, 1999.
7
4. Shareholders' Equity
Stock Split
The Company effected a two-for-one stock split in the
form of a 100% stock dividend payable on May 28, 1999
to shareholders of record on May 7, 1999. All share
and per share amounts in the accompanying consolidated
financial statements have been restated to give effect
to this stock split.
After giving effect to the May 1999 stock split,
changes in paid-in capital for the periods presented
represent issuances of common stock resulting from the
exercise of employee stock options.
5. Comprehensive Income
The components of comprehensive income, net of tax, are
as follows:
In thousands Six months ended Three months ended
June 27, June 28, June 27, June 28,
1999 1998 1999 1998
Net income $77,605 $53,498 $42,814 $26,772
Other comprehensive income (loss), net of tax:
Change in foreign currency translation
adjustment (1,702) - (1,776) -
Other comprehensive income (loss) (1,702) - (1,776) -
Comprehensive income $75,903 $53,498 $41,038 $26,772
6. Operating Segment Information
Basis for presentation
The Company's operating businesses design, manufacture,
and market power protection equipment and related
software and accessories for computer and computer-
related equipment. The Company manages its businesses
based on the nature of products provided. These
businesses share similar economic characteristics and
have been aggregated into one reportable operating
segment. The Company evaluates the performance of its
businesses based on direct contribution margin. Direct
contribution margin includes research and development
("R&D"), marketing, and administrative expenses
directly attributable to the segment and excludes
certain expenses which are managed outside the
reportable segment. Costs excluded from segment profit
are indirect operating expenses, primarily consisting
of selling and corporate expenses, and income taxes.
Expenditures for additions to long-lived assets are not
reported to management by the operating businesses.
Summary operating segment information is as follows:
In thousands Six months ended Three months ended
June 27, June 28 June 27, June 28,
1999 1998 1999 1998
Net sales $592,647 $479,528 $315,462 $260,661
Segment direct contribution margin $240,042 $186,669 $130,385 $101,922
Indirect operating expenses 134,535 113,431 71,757 63,605
Other income, net 4,571 6,979 2,100 3,445
Earnings before incomes taxes $110,078 $80,217 $60,728 $41,762
8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS:
Revenues
Net sales were $315.5 million for the second quarter of
1999, an increase of 21.0% compared to $260.7 million
for the same period in 1998. Net sales for the first
half of 1999 were $592.6 million compared to $479.5
million in 1998, an increase of 23.6%. The increase
was attributable to strong demand for the Company's
products across all solution applications, combined
with $40 million in first half 1999 sales attributable
to Silcon A/S ("Silcon") (see "Acquisition" below).
Second quarter and first half 1999 net sales growth was
strong worldwide, led by increases in Asia and Europe.
The Asia Pacific region grew 46% and 51%, respectively,
EMEA (Europe, Middle East and Africa) grew 46% and 48%,
respectively, while the Americas (North and Latin
America) grew 8% and 10%, respectively. International
net sales (excluding Canada) comprised 41% and 37% of
total net sales in the second quarters of 1999 and
1998, respectively, and 42% and 37% of total net sales
in the first six month periods of 1999 and 1998,
respectively.
Cost of Goods Sold
Cost of goods sold was $176.9 million or 56.1% of net
sales in the second quarter of 1999 compared to $142.4
million or 54.7% in the second quarter of 1998. Cost
of goods sold was $331.9 million or 56.0% of net sales
in the first half of 1999 compared to $263.3 million or
54.9% in the first half of 1998. Second quarter 1999
gross margin was 43.9% of sales, approximately 150
basis points lower than the comparable period in 1998.
First half 1999 gross margin was 44.0% of sales,
approximately 110 basis points lower than the
comparable period in 1998. Substantially all of the
gross margin decrease was related to product mix as the
Company's high-power UPS business now accounts for a
larger percentage of revenue. Total inventory reserves
at June 27, 1999 were $15.2 million compared to $13.3
million at December 31, 1998. The Company's reserve
estimate methodology involves quantifying the total
inventory position having potential loss exposure,
reduced by an amount reasonably forecasted to be sold,
and adjusting its interim reserve provisioning to cover
the net loss exposure.
Operating Expenses
Operating expenses include marketing, selling, general
and administrative (SG&A), and R&D expenses.
SG&A expenses were $71.1 million or 22.5% of net sales
for the second quarter of 1999 compared to $63.5
million or 24.4% of net sales for the second quarter of
1998. SG&A expenses were $137.4 million or 23.2% of
net sales for the first half of 1999 compared to $118.9
million or 24.8% of net sales for the first half of
1998. The increases in total spending over last year
were due primarily to costs associated with increased
staffing and operating expenses of the Company's
administrative, marketing, and selling functions, as
well as increased advertising and promotional costs.
However, the decreases as a percentage of sales from
1998 to 1999 were attributable to certain fixed SG&A
expenses spread over a higher revenue base, as well as
the Company's focused efforts to manage spending. The
allowance for doubtful accounts at June 27, 1999 was
9.3% of accounts receivable, compared to 7.9% at
December 31, 1998. The Company continues to experience
strong collection performance. Accounts receivable
balances outstanding over 60 days represented 8.0% of
total receivables at June 27, 1999, down from 8.6% at
December 31, 1998. Write-offs of uncollectible
accounts have historically represented less than 1% of
total receivable balances. A majority of international
customer balances are covered by receivables insurance.
R&D expenses were $8.8 million or 2.8% of net sales and
$9.0 million or 3.4% of net sales for the second
quarters of 1999 and 1998, respectively, and $17.8
million or 3.0% of net sales and $16.7 million or 3.5%
of net sales for the first six month periods of 1999
and 1998, respectively, excluding a second quarter 1998
$7.4 million charge for acquired R&D (see "Acquisition"
below). The increase in total R&D spending during the
first half of 1999 over the comparable period in 1998
primarily reflects increased numbers of software and
hardware engineers and costs associated with new
9
product development and engineering support. The
decreases as a percentage of sales from 1998 to 1999
were attributable to certain fixed R&D expenses spread
over a higher revenue base.
Other Income, Net and Income Taxes
Other income is comprised principally of interest
income, which decreased from 1998 to 1999 due to lower
average cash balances available for investment during
1999, due largely to cash used late in the second half
of 1998 in the acquisition of Silcon (see "Acquisition"
below).
The Company's effective income tax rates were
approximately 29.5% and 30.5% for the quarters and six
month periods ended June 27, 1999 and June 28, 1998,
respectively. The decrease from last year is due to
the expected tax savings from an increasing portion of
taxable earnings being generated from the Company's
operations in Ireland, a jurisdiction which currently
has a lower income tax rate for manufacturing companies
than the present U.S. statutory income tax rate.
LIQUIDITY AND CAPITAL RESOURCES
Working capital at June 27, 1999 was $561.2 million
compared to $493.8 million at December 31, 1998. The
Company has been able to increase its working capital
position as the result of continued strong operating
results and despite internally financing the capital
investment required to expand its operations. The
Company's cash position increased to $271.8 million at
June 27, 1999 from $219.9 million at December 31, 1998.
Worldwide inventories were $231.9 million at June 27,
1999 compared to $228.7 million at December 31, 1998.
Inventory levels as a percentage of quarterly sales
were 74% in the second quarter of 1999 down from 88% in
the first quarter of 1999 and slightly up from 72% in
the fourth quarter of 1998.
At June 27, 1999, the Company had $50 million available
for future borrowings under an unsecured line of credit
agreement at a floating interest rate equal to the
bank's cost of funds rate plus .625% and an additional
$15 million under an unsecured line of credit agreement
with a second bank at a similar interest rate. No
borrowings were outstanding under these facilities at
June 27, 1999. In connection with the 1998 acquisition
of Silcon (see "Acquisition" below), the Company
acquired $24.8 million in bank indebtedness with
interest rates ranging from 4% to 8%. The Company
repaid $12.3 million of this indebtedness during the
second half of 1998 and $11.5 million during the first
half of 1999. The Company had no significant financial
commitments, other than those required in the normal
course of business, at June 27, 1999.
Capital investment for the first half of 1999 consisted
primarily of manufacturing and office equipment,
buildings and improvements, and purchased software
applications. The nature and level of capital spending
was made to improve manufacturing capabilities,
principally in the U.S. and the Far East, and to
support the increased marketing, selling, and
administrative efforts necessitated by the Company's
growth. Net capital expenditures were financed from
available operating cash. The Company had no material
capital commitments, other than those required in the
normal course of business, at June 27, 1999.
As part of the Company's ongoing efforts to capitalize
on its global manufacturing presence, in July 1999 the
Company announced plans to close its Fort Myers, FL
manufacturing facility during the third quarter of
1999. This closure is not expected to have a material
adverse effect on the Company's business, operating
results, or financial condition.
The Company has agreements with the Industrial
Development Authority of Ireland ("IDA") under which
the Company receives grant monies for costs incurred
for machinery, equipment, and building improvements for
its Galway and Castlebar facilities equal to 40% and
60%, respectively, of such costs up to a maximum of
$13.1 million and $1.3 million, respectively. Such
grant monies are subject to the Company meeting certain
employment goals and maintaining operations in Ireland
until termination of the respective agreements. The
total cumulative amounts of capital grant claims
submitted and received through June 27, 1999 for the
Galway facility were approximately $11.9 million and
$8.3 million, respectively. The total cumulative
amount of capital grant claims submitted through June
10
27, 1999 for the Castlebar facility was $1.1 million;
no capital grant claims had been received for the
Castlebar facility. Under separate agreements with the
IDA, the Company receives direct reimbursement of
training costs at its Galway and Castlebar facilities
for up to $3,000 and $12,500, respectively, per new
employee hired. The total cumulative amounts of
training grant claims submitted and received through
June 27, 1999 for the Galway facility were
approximately $1.2 million and $1.2 million,
respectively. The total cumulative amount of training
grant claims submitted through June 27, 1999 for the
Castlebar facility was approximately $1.0 million; no
training grant claims had been received for the
Castlebar facility.
Management believes that current internal cash flows
together with available cash, available credit
facilities or, if needed, the proceeds from the sale of
additional equity, will be sufficient to support
anticipated capital spending and other working capital
requirements for the foreseeable future.
Acquisition of Silcon A/S
Early in the second quarter of 1998, the Company
entered into a definitive agreement with the principal
management shareholders of Silcon to acquire stock of
Silcon, a Denmark-based manufacturer of three-phase
UPSs up to 480 kilo volt-amps ("kVA"), and the Company
commenced a tender offer for Silcon shares. In June
1998, the initial tender offer and purchase of stock
from principal management shareholders was completed
enabling the Company to operate Silcon as a majority-
owned subsidiary. During the second half of 1998, the
Company increased its ownership percentage to 89%. In
January 1999, the Company attained ownership of more
than 90% of the share capital of Silcon through open
market purchases financed from operating cash and
commenced a mandatory redemption of the remaining
Silcon shares. Through this mandatory share
redemption, the Company anticipates that it will
complete its acquisition of the remaining outstanding
shares of Silcon during the second half of 1999. In
connection with the mandatory redemption, the
Copenhagen Stock Exchange approved the de-listing of
Silcon's shares effective March 1, 1999. The Company's
cash outlays associated with the acquisition of $64.4
million during 1998 and $8.3 million during the first
half of 1999 were financed from operating cash.
The purchase price was allocated to the net tangible
and identifiable intangible assets acquired and to
acquired in-process R&D ("acquired R&D"). Acquired R&D
includes the value of products in the development stage
that are not considered to have reached technological
feasibility and that have no alternative future uses.
In accordance with applicable accounting rules,
acquired R&D is required to be expensed. Accordingly,
$7.6 million of the acquisition cost was expensed in
1998. The remaining purchase price exceeded the fair
value of the tangible net assets acquired by
approximately $53 million, consisting of identifiable
intangible assets and goodwill, which is being
amortized on a straight-line basis over 15 years. The
acquisition has been accounted for as a purchase and,
accordingly, Silcon's results of operations are
included in the Company's consolidated financial
statements from the date of acquisition.
Foreign Currency Activity
The Company invoices its customers in certain local
currencies. Realized and unrealized transaction gains
or losses are included in the results of operations and
are measured based upon the effect of changes in
exchange rates on the actual or expected amount of
functional currency cash flows. Transaction gains and
losses were not material to the results of operations
in the second quarters and first six month periods of
1999 and 1998.
At June 27, 1999 the Company's significant unhedged
foreign currency accounts receivable, by currency, were
as follows:
In thousands Foreign Currency US Dollars
German Marks 22,850 $12,090
Japanese Yen 1,178,154 9,657
European Euros 7,918 8,188
Swiss Francs 10,632 6,859
British Pounds 4,287 6,773
French Francs 39,715 6,254
11
The Company also had non-trade receivables of 4.3
million Irish Pounds (approximately US$5.7 million)
and short term debt and liabilities
denominated in various European currencies of US$43.3
million, as well as Yen denominated liabilities of
approximately US$2.9 million.
The Company periodically reviews its foreign exchange
exposure and considers various risk management
techniques, including the netting of foreign currency
receipts and disbursements, rate protection agreements
with customers/vendors and derivatives arrangements,
including foreign exchange contracts. The Company
presently does not utilize rate protection agreements
or derivative arrangements.
Recently Issued Accounting Standard
The Financial Accounting Standards Board recently
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,
including certain derivative instruments embedded in
other contracts (collectively referred to as
derivatives), and for hedging activities. This
Statement is effective for all fiscal quarters of
fiscal years beginning after June 15, 2000. The
adoption of this Statement is not expected to have a
material impact on the Company's consolidated financial
position or results of operations.
Year 2000 Readiness Disclosure Statement
Many computer systems were not designed to handle any
dates beyond the year 1999 and, therefore, many
companies will be required to modify their computer
hardware and software prior to the year 2000 in order
to remain fully operational. During 1998, the Company
commenced a year 2000 readiness program to assess the
impact of the year 2000 issue on the Company's
operations and address necessary remediation. A year
2000 program director reporting directly to senior
management has been assigned to this project.
Assessment of the Company's Products for Year 2000
Compliance
All of the Company's hardware products and accessories
are believed to be year 2000 compliant, meaning that
they have been tested to verify that where date fields
are processed, dates are calculated and displayed
accurately, and that there are no known defects related
to scheduled events such as shutdowns, self-tests, and
run-time calibrations and also the handling of
unscheduled events, such as power failures, which are
directly attributable to the millenium and century
change, provided that all other third party products
(e.g., software, firmware, operating systems, and
hardware) properly exchange date data with the
Company's products and provided also that the Company's
products are used in accordance with the product
documentation. The Company has also performed
extensive testing of all software products that it is
currently offering for licensing and has determined
that these products are substantially year 2000
compliant. Periodically updated information about the
Company's software products is available at the
Company's Year 2000 Readiness Disclosure Web site
(www.APCC.com). Information on this site is provided
to the Company's customers for the sole purpose of
assisting in planning for transition to the year 2000.
Such information is the most currently available
concerning the behavior of the Company's products in
the next century and is provided "as is" without
warranty of any kind. The Company's year 2000
compliant products recognize the year 2000 as a leap
year. To the extent the Company's hardware and
software products are combined with the hardware and
software products of other companies, there can be no
assurance that users of the Company's products will not
experience year 2000 problems as a result of the
combination of the Company's hardware and software
products with non-compliant products of other
companies. The Company currently does not anticipate
material expenditures to remedy any year 2000 issues
with respect to its products and services.
Assessment of the Company's Information Technology
("IT") and Non-IT Systems for Year 2000 Compliance
The Company's Oracle manufacturing and financial
information systems were implemented during 1998. The
Company has evaluated the year 2000 compliance of these
systems in accordance with Oracle's recommendations.
At December 31, 1998, the Company had completed its
initial installation and testing of software patches
available from Oracle. During the second quarter of
1999, final installation and testing of additional
software patches completed efforts to bring these
systems into compliance. The Company does not consider
the cost of the new hardware and software for the
Oracle implementations to be related to year 2000
readiness as these system replacements were already
planned to satisfy the demands of expansion of its
worldwide operations and were not accelerated due to
12
year 2000 issues. The Company is currently in the
process of evaluating its non-IT systems for
compliance, including those related to its
manufacturing facilities, distribution centers, and
production and engineering equipment. Additionally,
the Company utilizes other third party software and
equipment to distribute its products as well as to
operate other aspects of its business. The Company is
reviewing such software and equipment. The Company's
evaluation and review process of its non-IT systems and
third party software and equipment is expected to be
completed before the beginning of the fourth quarter of
1999. There can be no assurance that such software and
equipment is year 2000 compliant, that non-compliant
software and equipment will be made compliant on a
timely basis, or that any such non-compliant software
and equipment would not have a material adverse effect
on the Company's systems and operations.
Evaluation of Third Parties with which the Company has
a Material Relationship, including Key Suppliers,
Service Providers, and Strategic Partners
The Company's year 2000 readiness program includes
identifying these third parties and determining, based
on receipt of written verification, review of publicly
available financial statement disclosures, and other
means, that such third parties are either in compliance
or expect to be in compliance prior to January 1, 2000.
The Company has identified its material third party
relationships and is currently in the process of
communicating with its significant vendors, service
providers, and certain strategic partners. Such
communications include on-site visitations and
education, as well as completion of written
questionnaires. The Company's communication and
related contingency efforts are expected to be
completed before the beginning of the fourth quarter of
1999. Many enterprises, including the Company's
present and potential customers, may be devoting a
substantial portion of their information systems
spending to resolving year 2000 issues, which may
result in their spending being diverted from
applications such as the Company's products, over the
next two years.
Development of Contingency Plans
As the Company's year 2000 readiness program nears
completion, management currently believes that its
material IT and non-IT systems and equipment will be
compliant by the year 2000 and that the cost to address
year 2000 issues will not be material. Nevertheless,
the Company has identified worst case scenarios
involving the interruption of critical vendors as a
result of infrastructure failures or third party vendor
failures. The Company is currently creating
contingency plans which include but are not limited to
maintaining appropriate inventory levels, as well as
requiring critical vendors to maintain certain
inventory levels. The Company expects to complete its
contingency planning early in the fourth quarter of
1999.
It is the Company's policy to expense as incurred all
costs associated with year 2000 readiness. The Company
has developed a separate budget for operating and
capital expenditures relating to year 2000 issues. No
IT projects have been deferred due to year 2000
efforts. Based on its efforts to date, the Company
does not believe that the costs of year 2000 issues
will have a material adverse effect on the Company's
business, operating results, or financial condition.
Although the Company is taking measures to address the
impact, if any, of year 2000 issues, it cannot predict
the outcome or success of its year 2000 readiness
program, or whether the failure of third party systems
or equipment to operate properly in the year 2000 will
have a material adverse effect upon the Company's
business, operating results, or financial condition, or
require the Company to incur unanticipated material
expenses to remedy any year 2000 issue.
The foregoing discussion regarding the Company's year
2000 readiness program's implementation, effectiveness,
and cost, contains forward-looking statements which are
based on management's expectations, determined
utilizing certain assumptions of future events,
including third party compliance and other factors.
However, there can be no guarantee that these
expectations will be realized, and actual results could
differ materially from management's expectations.
Specific factors that might cause such material
differences include, but are not limited to, the
availability and cost of personnel trained in this area
and other similar uncertainties, and the remediation
success of the Company's suppliers, service providers,
and strategic partners.
Factors That May Affect Future Performance
Statements contained in this document which are not
historical facts may constitute forward-looking
statements as that term is defined under the provisions
of the "safe harbor" section of the Private Securities
Litigation Reform Act of 1995. All forward-looking
13
statements are subject to risks and uncertainties which
could cause actual results to differ from those
projected. The factors that could cause actual results
to differ materially include the following: a variance
in the actual versus estimated charge associated with
organizational changes; APC's ability to successfully
integrate Silcon's operations; the timely development
and acceptance of new products; ramp up, expansion, and
rationalization of global manufacturing capacity;
general worldwide economic conditions; growth rates in
the power protection industry and related industries,
including but not limited to the PC, server,
networking, and enterprise hardware industries;
competitive factors and pricing pressures; changes in
product mix; changes in the seasonality of demand
patterns; inventory risks due to shifts in market
demand; the effects of any other possible acquisitions;
component constraints and shortages; risk of nonpayment
of accounts receivable; changes in customer order
patterns and product demand related to year 2000
purchasing issues; impact on the Company's business due
to internal systems or systems of suppliers and other
third parties adversely affected by year 2000 problems;
the uncertainty of the litigation process including
risk of an unexpected, unfavorable result of current or
future litigation; and the risks described from time to
time in the Company's filings with the Securities and
Exchange Commission.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
The Company, in the normal course of business, is
exposed to market risks relating to fluctuations in
foreign currency exchange rates. The information
required under this section related to such risks is
included in the Foreign Currency Activity section of
Management's Discussion and Analysis of Financial
Condition and Results of Operations in Item 2 of this
Report and is incorporated herein by reference.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On or about November 6, 1998, General Signal Power
Systems, Inc. ("GSPS") filed suit against the Company
in Waukesha County Circuit Court in Wisconsin. GSPS
alleged interference with a contractual relationship
with respect to a distribution agreement between the
Best Power division of GSPS and Silcon Power
Electronics A/S, a wholly-owned subsidiary of Silcon
A/S. GSPS sought unspecified damages, costs, fees, and
injunctive relief. On or about November 17, 1998, the
Company removed the case from the Waukesha County
Circuit Court to the United States District Court for
the Eastern District of Wisconsin. On June 28, 1999,
GSPS agreed to dismiss the suit with prejudice. The
disposition of this matter does not have a material
adverse effect on the Company's consolidated financial
position or results of operations or liquidity.
On or about January 27, 1999, the Company was served
with a lawsuit filed by an individual in the United
States District Court for the Central District of
California alleging patent infringement. The
plaintiff, Anthony F. Coppola, claims sole ownership of
the patent referenced in the lawsuit. Coppola seeks
unspecified damages, costs, fees, and injunctive
relief. On or about April 14, 1999, the Company
removed the case from the United States District Court
for the Central District of California to the United
States District Court for the District of
Massachusetts. The Company intends to vigorously
defend against the suit and believes the ultimate
disposition of this matter will not have a material
adverse effect on the Company's consolidated financial
position or results of operations or liquidity. No
provision for any liability that may result from this
action has been recognized in the Company's
consolidated financial statements.
14
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
The Annual Meeting of Shareholders was held on May 7,
1999 at which the shareholders of the Company approved
the following:
(i) by a vote of 80,046,449 shares in favor, 1,625,058
opposed, and 158,488 abstaining, the number of
directors was fixed at five.
(ii) the following persons (with vote results) were
elected to serve another term as Directors of the
Company:
For Against
Rodger B. Dowdell, Jr. 79,871,009 1,958,986
James D. Gerson 79,878,556 1,951,439
Emanuel E. Landsman 79,866,648 1,963,347
Ervin F. Lyon 79,878,936 1,951,059
Neil E. Rasmussen 79,866,392 1,963,603
(iii) by a vote of 79,287,742 shares in favor,
2,231,484 opposed, and 310,769 abstaining,
approved an amendment of the Company's Articles of
Organization to increase the number of authorized
shares of common stock from 200 million shares to
450 million shares.
(iv) by a vote of 41,082,928 shares in favor,
27,492,878 opposed, and 469,897 abstaining,
approved an amendment to the Company's 1997 Stock
Option Plan (the "Plan") that increases the
aggregate number of shares of common stock
authorized for issuance under the Plan from 6
million shares to 12 million shares.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits
Exhibit No. 3.01 - Articles of Organization of the
Registrant, as amended
Exhibit No. 27 - Financial Data Schedule
(B) Reports on Form 8-K
No reports on Form 8-K were filed by American Power
Conversion Corporation during the quarter ended June
27, 1999.
15
FORM 10-Q
June 27, 1999
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.
AMERICAN POWER CONVERSION CORPORATION
Date: August 11, 1999
/s/ Donald M. Muir
Donald M. Muir
Chief Financial Officer
(Principal Accounting And Financial Officer)
16
Exhibit 3.01
The Commonwealth of Massachusetts
MICHAEL JOSEPH CONNOLLY
Secretary of State
ONE ASHBURTON PLACE, BOSTON, MASS. 02108
ARTICLES OF ORGANIZATION
(Under G. L. Ch. 156B)
Incorporators
NAME POST OFFICE ADDRESS
Include given name in full in case of natural
persons; in case of a corporation, give state of
incorporation
William B. Simmons, Jr. Testa, Hurwitz & Thibeault, LLP
60 State Street
Boston, Massachusetts 02109
The above-named incorporator does hereby
associate with the intention of forming a corporation
under the provisions of General Laws, Chapter 156B
and hereby state(s):
1. The name by which the corporation is formed
shall be known is:
American Power Conversion Corporation
2. The purpose for which the corporation is
formed is as follows:
To develop, manufacture and market
electronic equipment for the control and conditioning
of electrical power, and to do any and all acts and
things permitted to be done by business corporations
under the provisions of Chapter 156B, as amended, of
the General Laws of Massachusetts.
Note: If the space provided under any article or item
on this form is insufficient, additions shall be set
forth on one side only of separate 8 1/2 x 11 sheets
of paper with a left margin of at least 1 inch.
Additions to more than one article may be made on a
single sheet so long as each article requiring each
addition is clearly indicated.
17
3. The total number of shares and the par value, if
any, of each class of stock within the corporation is
authorized as follows:
CLASS OF STOCK WITH PAR VALUE STOCKS
WITHOUT PAR NUMBER OF PAR AMOUNT
VALUE SHARES VALUE
NUMBER OF SHARES
Preferred none none $
Common none 250,000 $.01 $2,500.00
*4. If more than one class is authorized, a
description of each of the different classes of stock
with, if any, the preferences, voting powers,
qualifications, special or relative rights or
privileges as to each class thereof and any series now
established:
None
*5. The restrictions, if any, imposed by the Articles
of Organization upon the transfer of shares of stock of
any class are as follows:
None
*6. Other lawful provisions, if any, for the conduct
and regulation of business and affairs of the
corporation, for its voluntary dissolution, or for
limiting, defining, or regulating the powers of the
corporation, or of its directors or stockholders, or of
any class of stockholders: Meetings of stockholders may
be held anywhere in the United States. The directors
may make, amend or repeal the bylaws in whole or in
part, except with respect to any provision thereof
which by law or the by-laws requires action by the
stockholders. The whole or any part of the authorized
but unissued shares of common stock may be issued at
any time or from time to time by the Board of Directors
without further action by the stockholders. The
corporation may become a partner in any business.
*If there are no provisions state "None".
7. By-laws of the corporation have been duly adopted
and the initial directors, president, treasurer and
clerk, whose names are set out below, have been duly
elected.
8. The effective date of organization of the
corporation shall be the date of filing with the
Secretary of the Commonwealth or if later date is
desired, specify date, (not more than 30 days after the
date of filing.)
18
9. The following information shall not for any purpose
be treated as a permanent part of the Articles of
Organization of the corporation.
a. The post office address of the initial
principal office of the corporation of Massachusetts
is:
25 Heritage Drive, Lexington, MA 02173
b. The name, residence, and post office address
of each of the initial directors and following officers
of the corporation are as follows:
NAME RESIDENCE POST OFFICE ADDRESS
President: Ervin F. Lyon 25 Heritage Drive 25 Heritage Drive
Lexington, MA 02173 Lexington, MA 02173
Treasurer: Ervin F. Lyon Same as above Same as above
Clerk: Emanuel E. Landsman 3 Brookwood Road 25 Heritage Drive
Lexington, MA 02173 Lexington, MA 02173
Directors: Emanuel E. Landsman Same as above Same as above
Ervin F. Lyon Same as above Same as above
Neil E. Rasmussen 80 Winsor Road 25 Heritage Drive
Sudbury, MA 01776 Lexington, MA 02173
c. The date initially adopted on which the
corporation's fiscal year ends is:
February 28
d. The date initially fixed in the by-laws for
the annual meeting of stockholders of the corporation
is:
the fourth Tuesday in June
e. The name and business address of the resident
agent, if any, of the corporation is:
Not applicable
IN WITNESS WHEREOF and under the penalties of perjury
the INCORPORATOR(S) sign(s) these Articles of
Organization this 11th day of March 1981
William B. Simmons, Jr. Sole Incorporator
19
The signature of each incorporator which is not a
natural person must be an individual who shall show the
capacity in which he acts and by signing shall
represent under the penalties of perjury that he is
duly authorized on its behalf to sign these Articles of
Organization.
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF ORGANIZATION
GENERAL LAWS, CHAPTER 156B, SECTION 12
I hereby certify that, upon an
examination of the within-written
articles of organization, duly
submitted to me, it appears that
the provisions of the General Laws
relative to the organization of
corporations have been complied
with, and I hereby approve said
articles; and the filing fee in the
amount of $125 having been paid,
said articles are deemed to have
been filed with me this 11th day of
March 1981.
Effective date:
/s/ Michael Joseph Connolly
MICHAEL JOSEPH CONNOLLY
Secretary of State
PHOTO COPY OF ARTICLES OF ORGANIZATION TO BE SENT
TO BE FILLED IN BY CORPORATION
TO: William B. Simmons, Jr.
Testa, Hurwitz & Thibeault, LLP
High Street Tower
60 State Street
Boston, MA 02110
Telephone (617) 367-7500
FILING FEE: 1/20 of 1% of the total amount of the
authorized capital stock with par value, and
one cent a share for all authorized shares
without par value, but not less than $125.
General Laws, Chapter 156B. Shares of stock
with a par value less than one dollar shall
be deemed to have par value of one dollar per
share.
Copy Mailed
20
FEDERAL IDENTIFICATION
NO. 04-2722013
The Commonwealth of Massachusetts
OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE
MICHAEL JOSEPH CONNOLLY, Secretary
ONE ASHBURTON PLACE, BOSTON, MASSACHUSETTS 02108
ARTICLES OF AMENDMENT
(General Laws, Chapter 156B, Section 72)
This certificate must be submitted to the
Secretary of the Commonwealth within sixty days after
the date of the vote of stockholders adopting the
amendment. The fee for filing this certificate is
prescribed by General Laws, Chapter 156B, Section
114. Make check payable to the Commonwealth of
Massachusetts
We Roger B. Dowdell,* President
and Emanuel E. Landsman, * Clerk
of American Power Conversion Corporation,
(Name of Corporation)
located at: 89 Cambridge Street, Burlington, Massachusetts 01803,
do hereby certify that the following amendment to the
articles of organization of the corporation was duly
adopted March 24, 1986, by unanimous written consent
of the holders of all shares of common stock, $.01
par value, outstanding.
shares of of shares outstanding,
(Class of Stock)
shares of of shares outstanding, and
(Class of Stock)
shares of shares outstanding.
(Class of Stock)
1**being at least a majority of each class
outstanding and entitled to vote thereon
* Delete the inapplicable words.
** Delete the inapplicable clause.
1For amendments adopted pursuant to Chapter 156B,
Section 70.
2For amendments adopted pursuant to Chapter 156B,
Section 71.
Note: If the space provided under any article or item
on this form is insufficient, additions shall be set
forth on one side only of separate 8 1/2 x 11 sheets
of paper with a left margin of at least 1 inch.
Additions to more than one article may be made on a
single sheet so long as each article requiring each
addition is clearly indicated.
21
TO CHANGE the number of shares and the par value, if
any, of each class of stock within the corporation fill
in the following:
The total presently authorized is:
KIND OF STOCK NO PAR VALUE WITH PAR VALUE PAR VALUE
NUMBER OF NUMBER OF SHARES
SHARES
COMMON None 250,000 $.01
PREFERRED None None
CHANGE the total to:
KIND OF STOCK NO PAR VALUE WITH PAR VALUE PAR VALUE
NUMBER OF NUMBER OF SHARES
SHARES
COMMON None 500,000 $.01
PREFERRED None None
22
The foregoing amendment will become effective when
these articles of amendment are filed in accordance
with Chapter 156B, Section 6 of The General Laws unless
these articles specify, in accordance with the vote
adopting the amendment, a later effective date not more
than thirty days after such filing, in which event the
amendment will become effective on such later date.
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY,
we have hereto signed our names this 12th day of May,
in the year 1986
/s/ Roger B. Dowdell, *President
/s/ Emanuel E. Landsman, *Clerk
23
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
(General Laws, Chapter 156B, Section 72)
I hereby approve the within
articles of amendment and, the
filing fee in the amount of $125.00
having been paid, said articles are
deemed to have been filed with me
this 14th day of May, 1986.
/s/ Michael Joseph Connolly
MICHAEL JOSEPH CONNOLLY
Secretary of State
TO BE FILLED IN BY CORPORATION
Photocopy of amendment to be sent to:
William B. Simmons, Jr.
Testa, Hurwitz & Thibeault, LLP
53 State Street
Boston, MA 02109
Telephone (617) 367-7500
24
FEDERAL IDENTIFICATION
NO. 04-2722013
The Commonwealth of Massachusetts
OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE
MICHAEL JOSEPH CONNOLLY, Secretary
ONE ASHBURTON PLACE, BOSTON, MASSACHUSETTS 02108
ARTICLES OF AMENDMENT
(General Laws, Chapter 156B, Section 72)
This certificate must be submitted to the
Secretary of the Commonwealth within sixty days after
the date of the vote of stockholders adopting the
amendment. The fee for filing this certificate is
prescribed by General Laws, Chapter 156B, Section
114. Make check payable to the Commonwealth of
Massachusetts
We Roger B. Dowdell,* President
and Emanuel E. Landsman, * Clerk
of American Power Conversion Corporation,
(Name of Corporation)
located at: 89 Cambridge Street, Burlington, Massachusetts 01803,
do hereby certify that the following amendment to the
articles of organization of the corporation was duly
adopted December 26, 1986, by unanimous written
consent of the holders of all shares of common stock,
$.01 par value, outstanding.
shares of of shares outstanding,
(Class of Stock)
shares of of shares outstanding, and
(Class of Stock)
shares of of shares outstanding.
(Class of Stock)
1**being at least two-thirds of each class
outstanding and entitled to vote thereon and of each
class or series of stock whose rights are adversely
affected thereby.
That the Corporation adopt Exhibit A attached
hereto as Article 4 of its Articles of Organization
See Continuation Sheet attached Continuation
Sheets 4A through 4H
*Delete the inapplicable words.
**Delete the inapplicable clause.
1For amendments adopted pursuant to Chapter 156B,
Section 70.
2For amendments adopted pursuant to Chapter 156B,
Section 71.
Note: If the space provided under any article or item
on this form is insufficient, additions shall be set
forth on one side only of separate 8 1/2 x 11 sheets
of paper with a left margin of at least 1 inch.
Additions to more than one article may be made on a
single sheet so long as each article requiring each
addition is clearly indicated.
25
TO CHANGE the number of shares and the par value, if
any, of each class of stock within the corporation fill
in the following:
The total presently authorized is:
KIND OF STOCK NO PAR VALUE WITH PAR VALUE PAR VALUE
NUMBER OF NUMBER OF SHARES
SHARES
COMMON none 500,000 $.01
PREFERRED none none
CHANGE the total to:
KIND OF STOCK NO PAR VALUE WITH PAR VALUE PAR VALUE
NUMBER OF NUMBER OF SHARES
SHARES
COMMON none 500,000 $.01
Class A Common none 250,000 $.01
PREFERRED none none
26
AMERICAN POWER CONVERSION CORPORATION
Continuation Sheet 4A
Designation. The class of Class A Common Stock,
par value $.01 per share, authorized under the Articles
of Organization of American Power Conversion
Corporation (the "Corporation") shall be designated the
"Class A Stock", and the class of Common Stock, par
value $.01 per share, authorized under the Articles of
Organization of the Corporation shall be designated the
"Common Stock." The Class A Stock and the Common Stock
shall have the relative rights and privileges as
follows:
A. CLASS A STOCK
1. Dividends. No dividends shall be declared
and set aside for any shares of the Class A Stock;
provided, however, that in the event the Board of
Directors of the Corporation shall declare a dividend,
out of assets legally available for that purpose,
payable upon the outstanding shares of the Common
Stock, the holder of each share of Class A Stock shall
be entitled to the amount of dividends as would be
payable on the number of full shares of Common Stock
into which each share of Class A Stock could then be
converted pursuant to Section 4.
The declaration of dividends shall be within
the sole discretion of the Board of Directors.
Dividends may be payable in cash, stock or otherwise.
All dividends declared upon the Class A Stock shall be
declared pro rata per share. All payments due under
this Section 1 to any stockholders shall be made to the
nearest cent.
2. Liquidation Preference. The holders of
shares of the Class A Stock shall be entitled to
participate in any liquidations, dissolution or winding
up of this Corporation on a preferred basis.
(a) In the event of any liquidation,
dissolution or winding up of this Corporation, either
voluntary or involuntary, the holders of Class A Stock
shall be entitled to receive, prior and in preference
to any distribution of any of the assets of this
Corporation to the holders of Common Stock by reason of
their ownership thereof, an amount equal to $1.50 per
share plus any declared but unpaid dividends on each
such share (the "Preferential Amount"). If upon the
occurrence of such event, the assets and funds thus
distributed among the holders of the Class A Stock
shall be insufficient to permit the payment to such
holders of the full Preferential Amount, then the
entire assets and funds of the Corporation legally
available for distribution shall be distributed ratably
among the holders of the Class A Stock in the same
proportion as the number of total shares of Class A
Stock owned by each such holder bears to the total
number of outstanding shares of Class A Stock.
(b) After the distributions described in
subsection (a) above have been paid, the remaining
assets of the Corporation available for distribution to
shareholders shall be distributed among the holders of
Common Stock.
27
(c) A merger or consolidation of this
Corporation with or into any other corporation or other
entity or person, or a sale, conveyance or disposition
of all or substantially all of the assets of this
Corporation, or the effectuation by the Corporation of
a transaction in which more than 50% of the voting
power of the Corporation is disposed of, or any other
corporate reorganization in which the Corporation shall
not be the continuing or surviving entity of such
consolidation, merger, or reorganization, shall not be
deemed to be a liquidation, dissolution or winding up
within the meaning of this Section 2.
3. Voting Power. The holder of each share of
Class A Stock shall have the right to one vote for each
whole share of Common Stock into which such Class A
Stock could then be converted. In addition to any
rights provided by law or in the Corporation's by-laws,
the holder of each share of Class A Stock shall be
entitled to vote on all matters as to which holders of
Common Stock shall be entitled to vote, in the same
manner and with the same effect as such holders of
Common Stock. Except as otherwise provided herein or
as required by law, the holders of shares of the Class
A Stock and the Common Stock shall vote together as a
single class on all matters.
The holder of each share of Class A Stock
shall be entitled to notice of any shareholders'
meeting in accordance with the by-laws of this
Corporation.
4. Conversion. The holder of shares of Class A
Stock shall have the conversion rights set forth
hereinafter.
4.01. Right to Convert. Each share of
Class A Stock shall be convertible, at the option of
the holder thereof, at any time after the date of
issuance of such share, at the office of the
Corporation or any transfer agent for the Class A Stock
or Common Stock, into fully paid and nonassessable
shares of Common Stock. The number of shares of Common
Stock to which a holder of Class A Stock shall be
entitled upon conversion shall be the product obtained
by multiplying the Conversion Rate (as hereinafter
defined and determined as provided in Section 4.03(a))
by the number of shares of Class A Stock being
converted.
4.02. Automatic Conversion. Each share
of Class A Stock outstanding shall automatically be
converted into the number of shares of Common Stock
into which each such share of Class A Stock is
convertible immediately upon the earlier of:
(a) the closing of an underwritten public offering of
securities by the Corporation pursuant to an effective
registration statement under the Securities Act of
1933, as amended, or (b) the consummation of a merger
or consolidation of the Corporation with or into
another corporation or other entity or person, or the
sale of all or substantially all of the Corporation's
properties and assets to any other person, or any
transaction or series of related transactions by the
Corporation in which more than 50% of the Corporation's
voting power is transferred, or any other corporate
reorganization in which the Corporation should not be
the continuing or surviving entity of such merger,
consolidation or reorganization (either of such events
being referred to herein as the "Closing"). When such
Closing occurs, the outstanding shares of Class A Stock
shall be deemed to be converted automatically without
any further action by the holders of such shares and
whether or not the certificates representing such
shares are surrendered to the Corporation or its
transfer agent. The date of the Closing shall be the
effective date of conversion.
28
Upon the occurrence of the automatic
conversion of all of the outstanding Class A Stock, the
holders of the Class A Stock shall surrender the
certificates representing such shares at the office of
the Corporation or of any transfer agent for the Common
Stock. Thereupon, there shall be issued and delivered
to such holder, promptly at such office and in his name
as shown or such surrendered certificate or
certificates, a certificate or certificates for the
number of shares of Common Stock (or securities
issuable in exchange for such Common Stock) into which
the shares of the Class A Stock surrendered were
convertible on the date on which such automatic
conversion occurred. The Corporation shall not be
obligated to issue certificates evidencing the shares
of Common Stock (or securities issuable in exchange for
such Common Stock) issuable upon such automatic
conversion unless certificates evidencing such shares
of the Class A Stock being converted are either
delivered to the Corporation or any transfer agent, as
hereinafter provided, or the holder notifies the
Corporation or any transfer agent, as hereinafter
provided, that such certificates have been lost, stolen
or destroyed and executes an agreement satisfactory to
the Corporation to indemnify the Corporation from any
loss incurred by it in connection therewith.
The number of shares of Common Stock to
which a holder of Class A Stock shall be entitled to
upon automatic conversion shall be the product obtained
by multiplying the Conversion Rate (as defined and
determined as provided in Section 4.03(a)) by the
number of shares of Class A Stock then held by such
holder.
4.03. Conversion Rate. The Conversion
Rate for the Class A Stock (the "Conversion Rate")
initially shall be the quotient obtained by dividing
(i) $1.50 by (ii) the Conversion Price per share
calculated as provided below.
The Conversion Price for the Class A
Stock (the "Conversion Price") shall be $1.50, except
that such amount shall be adjusted from time to time as
hereinafter provided.
4.04. Mechanics of Conversion. The
mechanics of the conversion of the Class A Stock shall
be as follows (except as otherwise provided in Section
4.02, in the case of automatic conversion):
(a) Exchange of Share Certificates. To
exercise his conversion privilege, a holder of Class A
Stock shall surrender the certificate or certificates
therefor, duly endorsed, at the office of the
Corporation or of any transfer agent for shares of
Class A Stock or Common Stock, accompanied by a written
notice of his election to convert the same and of the
number of shares of Class A Stock to be so converted.
As promptly as practicable after receipt of such
certificates and notice, the Corporation shall
forthwith issue and deliver at such office to such
holder of Class A Stock a certificate or certificates
for the number of shares of Common Stock to which he
shall be entitled pursuant to Section 4.01 hereof.
(b) Effective Date of Conversion. Each
conversion shall be deemed to have been made
immediately prior to the close of business of the
Corporation on the date of the surrender to the
Corporation of the shares of Class A Stock to be
converted, and the person or persons entitled to
receive the shares of Common Stock issuable upon such
conversion shall be treated for all purposes as the
record holder or holders of such shares of Common Stock
on such date.
29
(c) Partial Conversion. In the event
some but not all of the shares of Class A Stock
represented by a certificate or certificates
surrendered by a holder are converted, the Corporation
shall execute and deliver to or on the order of the
holder, at the expense of the Corporation, a new
certificate representing the number of shares of Class
A Stock which were not converted.
4.05. Adjustment of Stock Splits and
Combinations. If the Corporation shall at any time or
from time to time after the sale of the Class A Stock
effect a subdivision of the outstanding Common Stock,
the Conversion Price in effect immediately prior to
such subdivision shall be proportionately decreased by
multiplying (i) such Conversion Price by (ii) a
fraction, (A) the numerator of which shall be equal to
the total number of shares of Common Stock issued and
outstanding immediately prior to such subdivision, and
(B) the denominator of which shall be the total number
of shares of Common Stock issued and outstanding
immediately after such subdivision. If the Corporation
shall at any time or from time to time after the sale
of the Class A Stock effect any combination of the
outstanding shares of Common Stock, the Conversion
Price in effect immediately prior to such combination
shall be proportionately increased by multiplying (iii)
such Conversion Price by (iv) a fraction, (A) the
numerator of which shall be equal to the total number
of shares of Common Stock issued and outstanding
immediately prior to such combination, and (B) the
denominator of which shall be the total number of
shares of Common Stock issued and outstanding
immediately after such combination. Any adjustment
under this Section 4.05 shall be effective at the close
of business on the date on which such subdivision or
combination becomes effective.
4.06. Adjustment for Certain Dividends
and Distributions. In the event the Corporation at any
time or from time to time after the sale of the Class A
stock shall make or issue or fix a record date for the
determination of holders of Common Stock entitled to
receive a dividend or other distribution payable in
additional shares of Common Stock, then and in each
such event the Conversion Price then in effect shall be
decreased as of the time of such issuance or, in the
event such a record date shall have been fixed, as of
the close of business on such record date, by
multiplying (i) the Conversion Price then in effect by
(ii) a fraction:
(A) the numerator of which shall be equal
to the total number of shares of Common Stock issued
and outstanding immediately prior to the time of issuance
or the close of business on such record date, and
(B) the denominator of which shall be
equal to the sum of (i) the total number of shares
of Common Stock issued and outstanding immediately
prior to the time of such issuance or the close of
business on such record date, plus (ii) the number
of shares of Common Stock issuable in payment of
such dividend or distribution;
provided, however, that if such record date shall have
been fixed and such dividend is not fully paid or if
such distribution is not fully made on the date fixed
therefor, the Conversion Price shall be recomputed
accordingly as of the close of business on such record
date; and thereafter the Conversion Price shall be
adjusted pursuant to this Section 4.06 as of the time
of actual payment of such dividends or distributions.
In the event that any holder of shares of Class A Stock
elects to convert any of such shares into Common Stock
after any record date for determining holders of
30
Common Stock entitled to receive a dividend or other
distribution payable in shares of Common Stock but
prior to the date on which such dividend is paid, the
Corporation may defer, until such dividend is paid, the
issue to such holder of those additional shares of
Common Stock issuable to
such holder upon such conversion solely by reason of
the adjustment made to the Conversion Price pursuant to
this Section 4.06 on the record date for such dividend;
provided, however, that the Corporation shall, upon the
request of such holder, issue to such holder a written
instrument evidencing such holder's right to receive
such additional shares.
4.07. Adjustment for Other Dividends and
Distributions. In the event the Corporation at any
time or from time to time after the sale of the Class A
Stock shall make or issue or fix a record date for the
determination of holders of shares of Common Stock
entitled to receive a dividend or other distribution
payable in securities of the Corporation other than
shares of Common Stock, then and in each such event
provisions shall be made so that the holder of shares
of Class A Stock shall receive, upon conversion
thereof, in addition to the number of shares of Common
Stock receivable thereupon, the amount of securities of
the Corporation which they would have received had
their Class A Stock been converted into Common Stock on
the date of such event and had thereafter, during the
period from the date of such event to and including the
conversion date, retained such securities receivable by
them as aforesaid during such period, giving
application to all adjustments called for during such
period with respect to the rights of the holders of
shares of Class A Stock.
4.08. Adjustment for Reclassification;
Exchange and Substitution. If the shares of Common
Stock issuable upon the conversion of the shares of
Class A Stock shall be changed into the same or
different number of shares of any class or classes of
stock, whether by capital reorganization,
reclassification or otherwise (other than a subdivision
or combination of shares or stock dividend provided for
above, or a reorganization, merger, consolidation or
sale of assets provided for elsewhere in Section 4.02
hereof) then and in each such event the holder of each
share of Class A Stock shall have the right thereafter
to convert such share of Class A Stock into the kind
and amount of shares of reorganization,
reclassification or other change by holders of the
number of shares of Common Stock into which such share
of Class A Stock might have been converted immediately
prior to such reorganization, reclassification or
change, all subject to further adjustment as provided
herein.
4.09 Notice of Record Date. In the event of
(i) any taking by the Corporation of a record of the
holders of any class of securities for the purpose of
determining the holders thereof who are entitled to
receive any dividend or other distribution, or (ii) any
capital reorganization of the corporation, any
reclassification or recapitalization of the capital
stock of the Corporation, any merger or consolidation
of the Corporation, and any transfer or sale of all or
substantially all of the assets of the Corporation to
any other corporation, or any transaction by the
Corporation in which more than 50% of the voting power
is transferred or any other entity or person, or any
voluntary or involuntary dissolution, liquidation or
winding up of the Corporation, the Corporation shall
mail to each holder of Class A Stock at least 10 days
prior to the record date specified therein, a notice
specifying (A) the date on which any such record is to
be taken for the purpose of such dividend or
distribution and a description of such dividend or
distribution, (B) the date on which any such
reorganization, reclassification, recapitalization,
transfer, sale, merger, consolidation, transaction,
31
dissolution, liquidation or winding up is expected to
become effective, and (C) the time, if any, that is to
be fixed, as to when the holders of record of Common
Stock (or other securities) shall be entitled to
exchange their shares of Common Stock (or other
securities) for securities or other property
deliverable upon such reorganization, reclassification,
recapitalization, transfer, sale, merger,
consolidation, transaction, dissolution, liquidation or
winding up.
4.10. Fractional Shares. No fractional
shares of Common Stock shall be issued upon conversion
of shares of Class A Stock. In lieu of any fractional
shares to which any holder of shares of Class A Stock
would otherwise be entitled, the Corporation shall pay
cash equal to the product of such fraction multiplied
by the fair market value of one share of the
Corporation's Common Stock on the date of conversion,
as determined in good faith by the Board of Directors
of the Corporation.
4.11. Reservation of Stock Issuable Upon
Conversion. The Corporation shall at times reserve and
keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of
effecting the conversion of the shares of Class A
Stock, such number of its shares of Common Stock as
shall from time to time be sufficient to effect the
conversion of all outstanding shares of Class A Stock,
and, if at any time the number of authorized but
unissued shares of Common Stock shall not be sufficient
to effect the conversion of all then outstanding shares
of Class A Stock, the Corporation will forthwith take
such corporate action as may be necessary or
appropriate to increase its authorized but unissued
shares of Common Stock to such number of shares as
shall be sufficient for such purpose.
B. COMMON STOCK
1. Voting Rights. Except as otherwise required
by law or these Articles of Organization, each holder
of Common Stock shall have one vote in respect of each
share of Common Stock held by him of record on the
books of the Corporation for the election of directors
and on all matters submitted to a vote of stockholders
of the Corporation. Except as otherwise provided
herein or as provided by law, the holders of shares of
the Class A Stock and the Common Stock shall vote
together as a single class on all matters.
2. Dividends. The holders of shares of Common
Stock shall be entitled to receive, when and if
declared by the board of directors, out of assets of
the Corporation which are by law available therefor,
dividends payable in cash, in property or in shares of
capital stock.
The foregoing amendment will become effective when
these articles of amendment are filed in accordance
with Chapter 156B, Section 6 of The General Laws unless
these articles specify, in accordance with the vote
adopting the amendment, a later effective date not more
than thirty days after such filing, in which event the
amendment will become effective on such later date.
32
The foregoing amendment will become effective when
these articles of amendment are filed in accordance
with Chapter 156B, Section 6 of The General Laws unless
these articles specify, in accordance with the vote
adopting the amendment, a later effective date not more
than thirty days after such filing, in which event the
amendment will become effective on such later date.
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY,
we have hereto signed our names this 29thth day of
December, in the year 1986
/s/ Roger B. Dowdell, *President
/s/ Emanuel E. Landsman, *Clerk
33
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
(General Laws, Chapter 156B, Section 72)
I hereby approve the within
articles of amendment and, the
filing fee in the amount of $125.00
having been paid, said articles are
deemed to have been filed with me
this 31st day of December, 1986.
/s/ Michael Joseph Connolly
MICHAEL JOSEPH CONNOLLY
Secretary of State
TO BE FILLED IN BY CORPORATION
Photocopy of amendment to be sent to:
William B. Simmons, Jr.
Testa, Hurwitz & Thibeault, LLP
53 State Street
Boston, MA 02109
Telephone (617) 367-7500
34
FEDERAL IDENTIFICATION
NO. 04-2722013
The Commonwealth of Massachusetts
OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE
MICHAEL JOSEPH CONNOLLY, Secretary
ONE ASHBURTON PLACE, BOSTON, MASSACHUSETTS 02108
ARTICLES OF AMENDMENT
(General Laws, Chapter 156B, Section 72)
This certificate must be submitted to the
Secretary of the Commonwealth within sixty days after
the date of the vote of stockholders adopting the
amendment. The fee for filing this certificate is
prescribed by General Laws, Chapter 156B, Section
114. Make check payable to the Commonwealth of
Massachusetts
We Roger B. Dowdell,* President
and Emanuel E. Landsman, * Clerk
of American Power Conversion Corporation,
(Name of Corporation)
located at: 8 Blanchard Road, Burlington, Massachusetts 01803
do hereby certify that the following amendment to the
articles of organization of the corporation was duly
adopted June 16, 1988, by vote of
190,697 shares of Common Stock out of 200,697 shares outstanding,
(Class of Stock)
204,859 shares of Class A Common Stock out of 210,414 shares outstanding, and
(Class of Stock)
shares of out of shares outstanding.
(Class of Stock)
1**being at least two-thirds of each class
outstanding and entitled to vote thereon and of each
class or series of stock whose rights are adversely
affected thereby
Voted: That Article Six of the Corporation's Articles of Organization be
amended by adding the following provisions:
SEE ATTACHED CONTINUATION SHEET 6
*Delete the inapplicable words.
**Delete the inapplicable clause.
1For amendments adopted pursuant to Chapter 156B,
Section 70.
2For amendments adopted pursuant to Chapter 156B,
Section 71.
Note: If the space provided under any article or item
on this form is insufficient, additions shall be set
forth on one side only of separate 8 1/2 x 11 sheets
of paper with a left margin of at least 1 inch.
Additions to more than one article may be made on a
single sheet so long as each article requiring each
addition is clearly indicated.
35
TO CHANGE the number of shares and the par value, if
any, of each class of stock within the corporation fill
in the following:
The total presently authorized is:
KIND OF STOCK NO PAR VALUE WITH PAR VALUE PAR VALUE
NUMBER OF NUMBER OF SHARES
SHARES
COMMON None 500,000 $.01
CLASS A COMMON None 250,000 $.01
PREFERRED None None
CHANGE the total to:
KIND OF STOCK NO PAR VALUE WITH PAR VALUE PAR VALUE
NUMBER OF NUMBER OF SHARES
SHARES
COMMON None 5,000,000 $.01
CLASS A COMMON None 250,000
PREFERRED
36
CONTINUATION SHEET 6
That Corporation eliminates the personal liability
of each director to the Corporation or its stockholders
for monetary damages for a breach of fiduciary duty as
a director notwithstanding any statutory provision or
other law imposing such liability; provided, that
nothing in this paragraph shall eliminate or limit the
liability of a director (i) for any breach of the
director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a
knowing violation of law, (iii) under sections Sixty-
One or Sixty-Two of Chapter 156B of the Massachusetts
General Laws, or (iv) for any transaction from which
the director derived an improper personal benefit.
37
The foregoing amendment will become effective when
these articles of amendment are filed in accordance
with Chapter 156B, Section 6 of The General Laws unless
these articles specify, in accordance with the vote
adopting the amendment, a later effective date not more
than thirty days after such filing, in which event the
amendment will become effective on such later date.
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY,
we have hereto signed our names this 20th day of June,
in the year 1988
/s/ Roger B. Dowdell, *President
/s/ Emanuel E. Landsman, *Clerk
38
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
(General Laws, Chapter 156B, Section 72)
I hereby approve the within
articles of amendment and, the
filing fee in the amount of
$2,325.00 having been paid, said
articles are deemed to have been
filed with me this 21st day of
June, 1988.
/s/ Michael Joseph Connolly
MICHAEL JOSEPH CONNOLLY
Secretary of State
TO BE FILLED IN BY CORPORATION
Photocopy of amendment to be sent to:
William B. Simmons, Jr.
Testa, Hurwitz & Thibeault, LLP
53 State Street
Boston, MA 02109
Telephone (617) 367-7500
39
FEDERAL IDENTIFICATION
NO. 04-2722013
The Commonwealth of Massachusetts
OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE
MICHAEL JOSEPH CONNOLLY, Secretary
ONE ASHBURTON PLACE, BOSTON, MASSACHUSETTS 02108
ARTICLES OF AMENDMENT
(General Laws, Chapter 156B, Section 72)
This certificate must be submitted to the
Secretary of the Commonwealth within sixty days after
the date of the vote of stockholders adopting the
amendment. The fee for filing this certificate is
prescribed by General Laws, Chapter 156B, Section
114. Make check payable to the Commonwealth of
Massachusetts
We Roger B. Dowdell,* President
and Emanuel E. Landsman, * Clerk
of American Power Conversion Corporation,
(Name of Corporation)
located at: 267 Boston Road #2, Billerica, Massachusetts 01862
do hereby certify that these ARTICLES OF AMENDMENT
affecting Articles NUMBERED: 6 of the Articles of
Organization were duly adopted at a meeting held on
May 16, 1990, by vote of:
2,318,302 shares of Common Stock out of 3,471,406 shares outstanding,
type, class & series, (if any)
_______ shares of Class A Common Stock out of shares outstanding, and
type, class & series, (if any)
_______ shares of Class A Common Stock out of shares outstanding, and
type, class & series, (if any)
1**being at least two-thirds of each class
outstanding and entitled to vote thereon
Voted: That Article Six of the Corporation's Articles of Organization
be amended by adding the following provisions:
SEE ATTACHED CONTINUATION SHEETS 6.1 TO 6.8
*Delete the inapplicable words.
**Delete the inapplicable clause.
1For amendments adopted pursuant to Chapter 156B,
Section 70.
2For amendments adopted pursuant to Chapter 156B,
Section 71.
Note: If the space provided under any article or item
on this form is insufficient, additions shall be set
forth on one side only of separate 8 1/2 x 11 sheets
of paper with a left margin of at least 1 inch.
Additions to more than one article may be made on a
single sheet so long as each article requiring each
addition is clearly indicated.
40
TO CHANGE the number of shares and the par value, if
any, class or series of stock which the corporation is
authorized to issue, fill in the following:
The total presently authorized is:
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
TYPE NUMBER OF TYPE NUMBER OF PAR VALUE
SHARES SHARES
COMMON COMMON
PREFERRED PREFERRED
CHANGE the total authorized to:
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
TYPE NUMBER OF TYPE NUMBER OF PAR VALUE
SHARES SHARES
COMMON COMMON
PREFERRED PREFERRED
41
6.1-6.8
American Power Conversion Corporation
Articles of Amendment
PART A
FAIR PRICE AMENDMENT
I. In addition to any affirmative vote required by
law or any other provision of these Articles of
organization or the By-Laws of the Company, the
affirmative vote of the holders of not less than
80% of the Voting Stock shall be required for the
approval or authorization of any Business
Transaction with, or proposed by or on behalf of,
a Related Person, or any Business Transaction in
which a Related Person has an interest (except
proportionately as a shareholder of the Company),
or any Business Transaction of the type described
in clause (f) of the definition of "Business
Transaction" set forth in Paragraph IID below;
provided, however, that the 80% voting requirement
shall not be applicable if (i) Continuing
Directors at the time constitute at least majority
of the entire Board of Directors of the Company
and have expressly approved the Business
Transaction, either specifically or as a
transaction within an approved category of
transactions, by at least a majority vote of such
Continuing Directors, or (ii) all of the following
conditions are satisfied:
A. The Business Transaction is a merger or
consolidation, or liquidation or dissolution, or sale,
lease, exchange, transfer or other disposition of
substantially all of the assets of the Company, and (i)
the cash or fair market value (at the date of
consummation of such Business Transaction) of the
property, securities or other consideration to be
received per share by holders of Common Stock of the
Company (other than such Related Person) in connection
with such Business Transaction is at least equal in
value to such Related Person's Highest Purchase Price
and such per share consideration is in cash or the same
form as such Related Person has previously paid to
acquire any shares of Common Stock of the Company
acquired by such Related Person prior to such Business
Transaction; and (ii) the cash or fair market value (at
the date of consummation of such Business Transaction)
of the property, securities or other consideration to
be received per share by holders of any class of Voting
Stock other than Common Stock in connection with such
Business Transaction is at least equal in value to the
higher of such Related Person's Highest Purchase Price
for such other class of stock or the highest
preferential amount per share to which the holders of
such class of Voting Stock are entitled in the event of
any voluntary or involuntary liquidation, dissolution
or winding up of the Company.
B. After such Related Person has become the
Beneficial Owner of not less than 15% of the
Voting Stock and prior to the consummation of
such Business Transaction, such Related
Person shall not have become the Beneficial
owner of any additional shares of Voting
Stock, except (i) as a part of the
transaction which resulted in such Related
Person becoming a Related Person or (ii) as a
result of a pro rata stock dividend or stock
split.
42
C. Prior to the consummation of such Business
Transaction, such Related Person shall not
have, directly or indirectly, (i) received
the benefit (except proportionately as a
shareholder of the Company) of any loans,
advances, guarantees, pledges or other
financial assistance or tax credits or other
tax advantages provided by the Company or any
of its subsidiaries, or (ii) caused any
material change in the Company's business,
capital structure, including, without
limitation, the issuance of shares of capital
stock of the Company to any third party or
Common Stock dividend rate or policy (except
as approved by a majority of the Continuing
Directors).
D. A proxy or information statement describing
the proposed Business Transaction and
complying with the requirements of the
Securities Exchange Act of 1934 and the rules
and regulations thereunder (the "Act") (or
any subsequent provisions replacing such Act,
rules or regulations) shall have been mailed
to all shareholders of the Company at least
30 days prior to the consummation of such
Business Transaction (whether or not such
proxy or information statement is required to
be mailed pursuant to such Act or subsequent
provisions). The proxy or information
statement shall contain on the first page
thereof, in a prominent place, any statement
as to the advisability (or inadvisability) of
the Business Transaction that the Continuing
Directors, or any of them, may choose to make
and, if deemed advisable by a .majority of
the Continuing Directors, the opinion of an
investment banking firm selected by a
majority of the Continuing Directors as to
the fairness (or not) of the terms of the
Business Transaction from a financial point
of view to the holders of the outstanding
shares of Voting Stock other than the Related
Person, such investment banking firm to be
paid a reasonable fee for its services, by
the Company.
II. For the purposes of this Part A:
A. The term "Affiliate", as used to indicate a
relationship to a specified person, shall
mean a person that directly, or indirectly
through one or more intermediaries, controls,
or is controlled by, or is under common
control with, such specified person.
B. The term "Associate", as used to indicate a
relationship with a specified person, shall
mean (a) any corporation, partnership or
other organization of which such specified
person is an officer or partner or is,
directly or indirectly, the Beneficial owner
of 10% or more of any class of equity
securities, (b) any trust or other estate in
which such person has a substantial
beneficial interest or as to which such
specified person serves as trustee or in a
similar fiduciary capacity, (c) any relative
or spouse of such specified person, or any
relative of such spouse, who has the same
home as such specified person or who is a
director or officer of the Company or any of
its parents or subsidiaries and (d) any
person who is a director or officer of such
specified person or any of its parents or
subsidiaries (other than the Company or any
wholly-owned subsidiary of the Company).
C. The term "Beneficial owner" shall be defined
by reference to Rule 13d-3 under the
Securities Exchange Act of 1934, as in effect
on April 4, 1990; provided, however, that any
individual, corporation, partnership, group,
association or other person or
43
entity which has the right to acquire or vote
any Voting Stock at any time in the future,
whether such right is contingent or absolute,
pursuant to any agreement, arrangement or
understanding or upon exercise of conversion
rights, warrants or options, or otherwise,
shall be deemed the Beneficial Owner of such
Voting Stock for purposes of determining
whether such Beneficial Owner is a Related
Person. For the purposes of determining
whether a person is a Related Person pursuant
to Paragraph G below, the number of shares of
Voting Stock deemed to be outstanding shall
include shares deemed beneficially owned by
such person through application of this
Paragraph C, but shall not include any other
shares of Voting Stock that may be issuable
pursuant to any agreement, arrangement or
understanding, or upon exercise of conversion
rights, warrants or options, or otherwise.
D. The term "Business Transaction" shall mean
(a) any merger or consolidation involving the
Company or a subsidiary of the Company, (b)
whether in one transaction or a series of
transactions, any sale, lease, exchange,
transfer or other disposition including,
without limitation, a mortgage or any other
security device, of all or any Substantial
Part of the assets either of the Company or
of a subsidiary of the Company, whether in
one transaction or a series of transactions,
(c) any sale, lease, exchange, transfer,
mortgage, pledge or other disposition of all
or any part of the assets of an entity to the
Company or a subsidiary of the Company if
such assets would constitute a Substantial
Part of the assets of the Company or such
subsidiary immediately following consummation
of such transaction, (d) the issuance, sale,
exchange, transfer or other disposition by
the Company or a subsidiary of the Company of
any securities of the Company or any
subsidiary of the Company, except
proportionately to the shareholders of the
Company or of such subsidiary, (e) any
recapitalization or reclassification of the
securities of the Company (including, without
limitation, any reverse stock split) or other
transaction that would have the effect of
increasing the proportionate voting power of
a Related Person, (f) any liquidation, spin-
off, split-up or dissolution of the Company,
or any amendment to the Company's By-Laws,
and (g) any agreement, contract or other
arrangement providing for any of the
transactions, described in this definition of
Business Transaction.
E. The term "Continuing Director" shall mean a
director who either was a member of the Board
of Directors of the Company prior to the time
the Related Person in question, including its
Affiliates and Associates, first became a
Related Person or who subsequently became a
director of the Company and whose election,
or nomination for election by the Company's
shareholders, was approved by a vote of at
least a majority of the Continuing Directors
then on the Board; provided, however, that in
no event shall a director be considered a
"Continuing Director" if such director is a
Related Person (or an agent or other
representative of a Related Person) and the
Business Transaction to be voted upon is
with, or proposed by or on behalf of, such
Related Person or is one in which such
Related Person otherwise has an interest
(except proportionately as a shareholder of
the Company).
44
F. The term "Highest Purchase Price" shall mean
the higher of (i) the highest amount of
consideration paid by such Related Person for
a share of Common Stock of the Company
(including any brokerage commissions,
transfer taxes and soliciting dealers' fees)
at any time on, or within two years prior to,
the date such Related Person, including its
Affiliates and Associates, first become a
Related Person and during any time while such
Related Person was a Related Person or (ii)
the fair market value per share of Common
Stock on the date the Business Transaction is
first publicly announced; provided, however,
that the Highest Purchase Price shall be
determined after appropriate adjustment to
reflect the occurrence of any
reclassification, recapitalization, stock
split, reverse stock split or other
readjustment in the number of outstanding
shares of Common Stock of the Company, or the
payment of a stock dividend thereon.
G. The term "Related Person" shall mean and
include (a) any individual, corporation,
partnership, group (within the meaning of
Rule 13d5 under the Securities Exchange Act
of 1934, as in effect on March 22, 1987),
association or other person or entity which,
together with its Affiliates and Associates,
(i) is or has announced or publicly disclosed
a plan or intention to become the Beneficial
owner of not less than 5% of the Voting Stock
or (ii) was the Beneficial owner of not less
than 5% of the Voting Stock (x) at the time
(or within one year prior to the time) the
definitive agreement providing for the
Business Transaction (including any amendment
thereof) was entered into, (y) at the time
(or within one year prior to the time) a
resolution approving the Business Transaction
was adopted by the Board of Directors of this
Company or (z) as of the record date of this
Company (or within one year prior to such
record date) for the determination of
shareholders entitled to notice of the right
to vote on, or consent to, the Business
Transaction, and (b) any Affiliate or
Associate of any such individual,
corporation, partnership, group, association
or other person or entity; provided, however,
and notwithstanding anything in the foregoing
to the contrary, the term "Related Person"
shall not include this Company, a wholly-
owned subsidiary of this Company, any
employee stock ownership or other employee
benefit plan of this Company or of any wholly-
owned subsidiary of this Company, or any
trustee of, or fiduciary with respect to, any
such plan when acting in such capacity.
H. The term "Substantial Part" shall mean more
than 10% of the book value of the total
assets of the entity in question, as
reflected on the most recent fiscal yearend
consolidated balance sheet of such entity
existing at the time a resolution approving
the Business Transaction involving the assets
constituting any such Substantial Part was
adopted by the Board of Directors of the
Company.
I. The term "Voting Stock" shall at any time
mean all outstanding shares of capital stock
of the Company then entitled to vote
generally in the election of directors,
considered for the purpose of Part A of this
Article 6 as one class; provided, however,
that if the Company has shares of voting
Stock entitled to more or less than one vote
for any such share, for purposes of
determining the number of outstanding shares
of Voting Stock, each such share shall be
deemed to be that number of shares
45
of Voting Stock equal to the number of votes
entitled to be cast by the holder thereof in
respect of such shares.
J. In the event of a merger in which the Company
is the surviving corporation, or in the event
of a sale, lease, exchange, transfer or other
disposition or substantially all of the
assets of the Company, the phrase "property,
securities or other consideration to be
received" shall include, without limitation,
common and other capital stock of the Company
retained by its shareholders (other than such
Related Person).
III.
A. For the purpose of this Part A of Article 6,
if the Continuing Directors constitute at
least a majority of the entire Board of
Directors of the Company, then a majority of
such Continuing Directors shall have the
power to make a good faith determination
(which determination shall be final), on the
basis of information known to them, of all
questions arising under this Part A of
Article 6, including, without limitation, (i)
the number of shares of Voting Stock of which
any person is the Beneficial owner, (ii)
whether a person is an Affiliate or Associate
of another, (iii) whether a person has an
agreement, arrangement or understanding with
another as to the matters referred to in the
definition of Beneficial Owner herein, (iv)
whether the assets subject to any Business
Transaction constitute a Substantial Part,
(v) whether any Business Transaction is one
in which a Related Person has an interest
(except proportionately as a shareholder of
the Company), (vi) whether a Related Person
has, directly or indirectly, received the
benefits of or caused any of the changes
referred to in subparagraph IC of this Part A
of Article 6, (vii) whether the cash and/or
the fair market value of the consideration
other than cash to be received per share by
holders of Common Stock of the Company in
connection with a Business Transaction
described in Subparagraph IA of this Part A
of Article 6 is at least equal in value to
the Related Person's Highest Purchase Price,
and (viii) such other matters with respect to
which a determination is required under this
Part A of Article 6.
B. The fact that any Business Transaction is one
to which the 80% voting requirement of this
Part A of Article 6 is not applicable shall
not be construed to impose any fiduciary
duty, obligation or responsibility on the
Board of Directors, or any member thereof, to
approve such Business Transaction or
recommend its adoption or approval to the
shareholders of the Company, nor shall such
compliance limit, prohibit or otherwise
restrict in any manner the Board of
Directors, or any member thereof, with
respect to evaluations of or actions and
responses taken with respect to such Business
Transaction.
C. For the purposes of this Part A of Article 6
a Business Transaction or any proposal to
amend, repeal or adopt any provision of the
Articles of Organization inconsistent with
this Part A of Article 6 (collectively,
"Proposed Action") is presumed to have been
proposed by, or on behalf of, a Related
Person if (i) after the Related Person became
such, the Proposed Action is proposed
following the election of any director of the
Company who with respect to such Related
Person, would not qualify to serve
46
as a Continuing Director or (ii) such Related
Person votes for or consents to the adoption
of any such Proposed Action, unless as to
such Related Person a majority of the
Continuing Directors makes a good faith
determination that such Proposed Action is
not proposed by or on behalf of such Related
Person, based on information known to them
after reasonable inquiry.
IV. Any unissued capital stock from time to time
authorized under the Articles of Organization may
be issued by vote of the holders of 80% or more of
the voting power of the Voting Stock, or by the
Board of Directors. The affirmative vote of the
holders of 80% or more of the voting power of the
Voting Stock shall be required to eliminate or
otherwise modify in any respect the power of the
Directors to issue authorized but unissued capital
stock of the Company in accordance with, and as
permitted by, the Articles of Organization or the
By-Laws of the Company.
V. Notwithstanding any other provisions of these
Articles of Organization or the By-Laws of the
Company (and notwithstanding that a lesser
percentage may be specified by law, these Articles
of Organization or the By-Laws of the Company),
the provisions of this Part A of Article 6 may not
be altered, repealed or amended in any respect,
nor may any provision of these Articles of
Organization or By-Laws be adopted inconsistent
with this Part A of Article 6, unless such action
is approved by the affirmative vote of the holders
of not less than 80% of the voting power of the
Voting Stock; provided, however, that this
paragraph shall not apply, and such 80% vote shall
not be required for, any amendment, repeal,
alteration or adoption unanimously recommended by
the Board of Directors if all of such Directors
are persons who would be eligible to serve as
Continuing Directors.
47
The foregoing amendment will become effective when
these articles of amendment are filed in accordance
with Chapter 156B, Section 6 of The General Laws unless
these articles specify, in accordance with the vote
adopting the amendment, a later effective date not more
than thirty days after such filing, in which event the
amendment will become effective on such later date.
EFFECTIVE DATE: N/A
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY,
we have hereto signed our names this 26th day of June,
in the year 1990
/s/ Roger B. Dowdell, *President
/s/ Emanuel E. Landsman, *Clerk
48
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
(General Laws, Chapter 156B, Section 72)
I hereby approve the within
articles of amendment and, the
filing fee in the amount of $100
having been paid, said articles are
deemed to have been filed with me
this 6th day of July, 1990.
/s/ Michael Joseph Connolly
MICHAEL JOSEPH CONNOLLY
Secretary of State
TO BE FILLED IN BY CORPORATION
PHOTOCOPY OF ARTICLES OF AMENDMENT TO BE SENT TO:
Mela Lew, Esq.
Testa, Hurwitz & Thibeault, LLP
53 State Street
Boston, MA 02109
Telephone (617) 367-7500
49
FEDERAL IDENTIFICATION
NO. 04-2722013
The Commonwealth of Massachusetts
OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE
MICHAEL J. CONNOLLY, Secretary
ONE ASHBURTON PLACE, BOSTON, MASSACHUSETTS 02108
ARTICLES OF AMENDMENT
(General Laws, Chapter 156B, Section 72)
We Roger B. Dowdell,* President
and William B. Simmons, * Assistant Clerk of
American Power Conversion Corporation,
(EXACT Name of Corporation)
located at: 267 Boston Road #2, Billerica,
Massachusetts 01862
(MASSACHUSETTS Address of Corporation)
do hereby certify that these ARTICLES OF AMENDMENT
affecting Articles NUMBERED: 3 of the Articles of
Organization were duly adopted at a meeting held on
September 14, 1990, by vote of:
2,815,799 shares of Common Stock out of 3,499,157 shares outstanding,
type, class & series, (if any)
_______ shares of Class A Common Stock out of shares outstanding, and
type, class & series, (if any)
_______ shares of Class A Common Stock out of shares outstanding, and
type, class & series, (if any)
1**being at least a majority of each type, class or
series outstanding and entitled to vote thereon
Voted: to increase the Common Stock of the Company as set forth below:
*Delete the inapplicable words.
**Delete the inapplicable clause.
1For amendments adopted pursuant to Chapter 156B,
Section 70.
2For amendments adopted pursuant to Chapter 156B,
Section 71.
Note: If the space provided under any article or item
on this form is insufficient, additions shall be set
forth on one side only of separate 8 1/2 x 11 sheets
of paper with a left margin of at least 1 inch.
Additions to more than one article may be made on a
single sheet so long as each article requiring each
addition is clearly indicated.
50
TO CHANGE the number of shares and the par value, if
any, of any type, class or series of stock which the
corporation is authorized to issue, fill in the
following:
The total presently authorized is:
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
TYPE NUMBER OF TYPE NUMBER OF PAR VALUE
SHARES SHARES
COMMON COMMON 5,000,000 $.01
N/A N/A Common Class A 250,000 $.01
PREFERRED PREFERRED
N/A N/A N/A N/A
51
CHANGE the total authorized to:
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
TYPE NUMBER OF TYPE NUMBER OF PAR VALUE
SHARES SHARES
COMMON COMMON 25,000,000 $.01
N/A N/A Common Class A 250,000 $.01
PREFERRED PREFERRED
N/A N/A N/A N/A
52
The foregoing amendment will become effective when
these articles of amendment are filed in accordance
with Chapter 156B, Section 6 of The General Laws unless
these articles specify, in accordance with the vote
adopting the amendment, a later effective date not more
than thirty days after such filing, in which event the
amendment will become effective on such later date.
EFFECTIVE DATE:
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY,
we have hereto signed our names this 14th day of
September, in the year 1990
/s/ Roger B. Dowdell, *President
/s/ William B. Simmons, Jr., *Clerk
53
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
GENERAL LAWS, CHAPTER 156B, SECTION 72
I hereby approve the within
articles of amendment and, the
filing fee in the amount of $20,000
having been paid, said articles are
deemed to have been filed with me
this 14th day of September, 1990.
/s/ Michael Joseph Connolly
MICHAEL JOSEPH CONNOLLY
Secretary of State
TO BE FILLED IN BY CORPORATION
PHOTOCOPY OF ARTICLES OF AMENDMENT TO BE SENT TO:
Mela Lew, Esq.
Testa, Hurwitz & Thibeault, LLP
53 State Street
Boston, MA 02109
Telephone (617) 367-7500
54
FEDERAL IDENTIFICATION
NO. 04-2722013
The Commonwealth of Massachusetts
OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE
MICHAEL J. CONNOLLY, Secretary
ONE ASHBURTON PLACE, BOSTON, MASSACHUSETTS 02108
ARTICLES OF AMENDMENT
(General Laws, Chapter 156B, Section 72)
We Roger B. Dowdell,* President
and William B. Simmons, * Assistant Clerk of
American Power Conversion Corporation,
(EXACT Name of Corporation)
located at: 267 Boston Road #2, Billerica, Massachusetts 01862
(MASSACHUSETTS Address of Corporation)
do hereby certify that these ARTICLES OF AMENDMENT
affecting Articles NUMBERED: 3 of the Articles of
Organization were duly adopted at a meeting held on
May 29, 1992, by vote of:
15,864,455 shares of Common Stock out of 21,573,144 shares outstanding,
type, class & series, (if any)
_______ shares of Class A Common Stock out of shares outstanding, and
type, class & series, (if any)
_______ shares of Class A Common Stock out of shares outstanding, and
type, class & series, (if any)
1**being at least a majority of each type, class or
series outstanding and entitled to vote thereon
Voted: to increase the Common Stock of the Company as set forth below:
*Delete the inapplicable words.
**Delete the inapplicable clause.
1For amendments adopted pursuant to Chapter 156B,
Section 70.
2For amendments adopted pursuant to Chapter 156B,
Section 71.
Note: If the space provided under any article or item
on this form is insufficient, additions shall be set
forth on one side only of separate 8 1/2 x 11 sheets
of paper with a left margin of at least 1 inch.
Additions to more than one article may be made on a
single sheet so long as each article requiring each
addition is clearly indicated.
55
TO CHANGE the number of shares and the par value, if
any, of any type, class or series of stock which the
corporation is authorized to issue, fill in the
following:
The total presently authorized is:
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
TYPE NUMBER OF TYPE NUMBER OF PAR VALUE
SHARES SHARES
COMMON COMMON 25,000,000 $.01
N/A N/A Common Class A 250,000 $.01
PREFERRED PREFERRED
N/A N/A N/A N/A
56
CHANGE the total authorized to:
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
TYPE NUMBER OF TYPE NUMBER OF PAR VALUE
SHARES SHARES
COMMON COMMON 100,000,000 $.01
N/A N/A Common Class A 250,000 $.01
PREFERRED PREFERRED
N/A N/A N/A N/A
57
The foregoing amendment will become effective when
these articles of amendment are filed in accordance
with Chapter 156B, Section 6 of The General Laws unless
these articles specify, in accordance with the vote
adopting the amendment, a later effective date not more
than thirty days after such filing, in which event the
amendment will become effective on such later date.
EFFECTIVE DATE:
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY,
we have hereto signed our names this 27th day of July,
in the year 1992
/s/ Roger B. Dowdell, *President
/s/ William B. Simmons, Jr., *Assistant Clerk
58
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
GENERAL LAWS, CHAPTER 156B, SECTION 72
I hereby approve the within
articles of amendment and, the
filing fee in the amount of $75,000
having been paid, said articles are
deemed to have been filed with me
this 27th day of July, 1992.
/s/ Michael Joseph Connolly
MICHAEL JOSEPH CONNOLLY
Secretary of State
TO BE FILLED IN BY CORPORATION
PHOTOCOPY OF ARTICLES OF AMENDMENT TO BE SENT TO:
Lynn M. Magnani
c/o Testa, Hurwitz & Thibeault, LLP
53 State Street
Boston, MA 02109
Telephone (617) 248-7000
59
FEDERAL IDENTIFICATION
NO. 04-2722013
The Commonwealth of Massachusetts
OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE
MICHAEL J. CONNOLLY, Secretary
ONE ASHBURTON PLACE, BOSTON, MASSACHUSETTS 02108
ARTICLES OF AMENDMENT
(General Laws, Chapter 156B, Section 72)
We Roger B. Dowdell, Jr.,* President
and William B. Simmons, Jr., * Assistant Clerk of
American Power Conversion Corporation,
(EXACT Name of Corporation)
located at: 9 Executive Park Drive, North Billerica, MA 01862
(MASSACHUSETTS Address of Corporation)
do hereby certify that these ARTICLES OF AMENDMENT
affecting Articles NUMBERED: 3 of the Articles of
Organization were duly adopted at a meeting held on
June 7, 1994, by vote of:
75,332,325 shares of Common Stock out of 91,358,015 shares outstanding,
type, class & series, (if any)
_______ shares of Class A Common Stock out of shares outstanding, and
type, class & series, (if any)
_______ shares of Class A Common Stock out of shares outstanding, and
type, class & series, (if any)
1**being at least a majority of each type, class or
series outstanding and entitled to vote thereon
Voted: to increase the number of authorized shares of Common Stock of
the Company as set forth below:
*Delete the inapplicable words.
**Delete the inapplicable clause.
1For amendments adopted pursuant to Chapter 156B,
Section 70.
2For amendments adopted pursuant to Chapter 156B,
Section 71.
Note: If the space provided under any article or item
on this form is insufficient, additions shall be set
forth on one side only of separate 8 1/2 x 11 sheets
of paper with a left margin of at least 1 inch.
Additions to more than one article may be made on a
single sheet so long as each article requiring each
addition is clearly indicated.
60
TO CHANGE the number of shares and the par value, if
any, of any type, class or series of stock which the
corporation is authorized to issue, fill in the
following:
The total presently authorized is:
WITHOUT PAR VALUE STOCKS
TYPE NUMBER OF TYPE NUMBER OF PAR VALUE
SHARES SHARES
COMMON COMMON 100,000,000 $.01
N/A N/A Common Class A 250,000 $.01
PREFERRED PREFERRED
N/A N/A N/A N/A N/A
61
CHANGE the total authorized to:
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
TYPE NUMBER OF TYPE NUMBER OF PAR VALUE
SHARES SHARES
COMMON COMMON 200,000,000 $.01
N/A N/A Common Class A 250,000 $.01
PREFERRED PREFERRED
N/A N/A N/A N/A N/A
62
The foregoing amendment will become effective when
these articles of amendment are filed in accordance
with Chapter 156B, Section 6 of The General Laws unless
these articles specify, in accordance with the vote
adopting the amendment, a later effective date not more
than thirty days after such filing, in which event the
amendment will become effective on such later date.
EFFECTIVE DATE:
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY,
we have hereto signed our names this 7th day of June,
in the year 1994
/s/ Roger B. Dowdell, *President
/s/ William B. Simmons, Jr., *Assistant Clerk
63
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
GENERAL LAWS, CHAPTER 156B, SECTION 72
I hereby approve the within
articles of amendment and, the
filing fee in the amount of
$100,000 having been paid, said
articles are deemed to have been
filed with me this 7th day of July,
1994.
/s/ Michael Joseph Connolly
MICHAEL JOSEPH CONNOLLY
Secretary of State
TO BE FILLED IN BY CORPORATION
PHOTOCOPY OF ARTICLES OF AMENDMENT TO BE SENT TO:
Lynn M. Magnani
c/o Testa, Hurwitz & Thibeault, LLP
53 State Street
Boston, MA 02109
Telephone (617) 248-7000
64
FEDERAL IDENTIFICATION
NO. 04-2722013
The Commonwealth of Massachusetts
OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE
WILLIAM FRANCIS GALVIN
Secretary of the Commonwealth
ONE ASHBURTON PLACE, BOSTON, MASSACHUSETTS 02108
ARTICLES OF AMENDMENT
(General Laws, Chapter 156B, Section 72)
We Donald M. Muir,* Vice President
and Jeffrey J. Giguere, * Assistant Clerk of
American Power Conversion Corporation,
(EXACT Name of Corporation)
located at: 755 Middlesex Tpke., Billerica, Mass. 01821
(MASSACHUSETTS Address of Corporation)
certify that these Articles of Amendment affecting
articles numbered: 3 of the Articles of Organization
were duly adopted at a meeting held on May 7, 1999,
by a vote of:
79,287,742 shares of Common Stock out of 95,990,002 shares outstanding,
type, class & series, (if any)
_______ shares of Class A Common Stock out of shares outstanding, and
type, class & series, (if any)
_______ shares of Class A Common Stock out of shares outstanding, and
type, class & series, (if any)
1**being at least a majority of each type, class or
series outstanding and entitled to vote thereon
Voted: To increase the number of authorized shares of Common Stock of
the Company from 200,000,000 shares to 450,000,000 shares
*Delete the inapplicable words.
**Delete the inapplicable clause.
1For amendments adopted pursuant to Chapter 156B,
Section 70.
2For amendments adopted pursuant to Chapter 156B,
Section 71.
Note: If the space provided under any article or item
on this form is insufficient, additions shall be set
forth on one side only of separate 8 1/2 x 11 sheets
of paper with a left margin of at least 1 inch.
Additions to more than one article may be made on a
single sheet so long as each article requiring each
addition is clearly indicated.
65
TO change the number of shares and the par value, if
any, of any type, class or series of stock which the
corporation is authorized to issue, fill in the
following:
The total presently authorized is:
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
TYPE NUMBER OF TYPE NUMBER OF PAR VALUE
SHARES SHARES
COMMON COMMON 200,000,000 $.01
N/A N/A Common Class A 250,000 $.01
PREFERRED PREFERRED
N/A N/A N/A N/A
66
CHANGE the total authorized to:
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
TYPE NUMBER OF TYPE NUMBER OF PAR VALUE
SHARES SHARES
COMMON COMMON 450,000,000 $.01
N/A N/A Common Class A 250,000 $.01
PREFERRED PREFERRED
N/A N/A N/A N/A
67
The foregoing amendment will become effective when
these articles of amendment are filed in accordance
with Chapter 156B, Section 6 of The General Laws unless
these articles specify, in accordance with the vote
adopting the amendment, a later effective date not more
than thirty days after such filing, in which event the
amendment will become effective on such later date.
EFFECTIVE DATE:
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY,
we have hereto signed our names this 7th day of March,
in the year 1995
Donald M. Muir, *Vice President
Jeffrey J. Giguere., *Assistant Clerk
68
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
GENERAL LAWS, CHAPTER 156B, SECTION 72
I hereby approve the within
articles of amendment and, the
filing fee in the amount of
$250,000 having been paid, said
articles are deemed to have been
filed with me this 7th day of May,
1999.
/s/ William Francis Galvin
WILLIAM FRANCIS GALVIN
Secretary of the Commonwealth
TO BE FILLED IN BY CORPORATION
PHOTOCOPY OF ARTICLES OF AMENDMENT TO BE SENT TO:
Robert V. Housley
Testa, Hurwitz & Thibeault, LLP
125 High Street
Boston, MA 02110
Telephone (617) 248-7000