|
Delaware
(State or other jurisdiction of
incorporation or organization) |
| |
7372
(Primary Standard Industrial
Classification Code Number) |
| |
95-3936623
(I.R.S. Employer
Identification Number) |
|
|
Copies to:
|
| ||||||
|
Richard A. Fenyes
Jonathan R. Ozner Simpson Thacher & Bartlett LLP 425 Lexington Avenue New York, NY 10017 (212) 455-2000 |
| |
Gregory S. Bentley
David J. Hollister 685 Stockton Drive Exton, PA 19341 (610) 458-5000 |
| |
Richard A. Kline
Sarah B. Axtell Goodwin Procter LLP 601 Marshall Street Redwood City, CA 94063 (650) 752-3100 |
|
| Large accelerated filer ☐ | | | Accelerated filer ☐ | | | Non-accelerated filer ☒ | | |
Smaller reporting company ☐
Emerging growth company ☒ |
|
| | ||||||||||||||||||||||||||||
Title of Each Class of
Securities to be Registered |
| | |
Amount to be Registered(1)
|
| | |
Proposed
Maximum Offering Price per Share(2) |
| | |
Proposed Maximum
Aggregate Offering Price(2) |
| | |
Amount of
Registration Fee(3) |
| ||||||||||||
Class B Common Stock, par value $0.01 per share
|
| | | | | 12,360,991 | | | | | | $ | 19.00 | | | | | | $ | 234,858,829 | | | | | | $ | 30,484.68 | | |
| | |
Per Share
|
| |
Total
|
| ||||||
Initial public offering price
|
| | | $ | | | | | $ | | | ||
Underwriting discount(1)
|
| | | $ | | | | | $ | | | ||
Proceeds to the selling stockholders(2)
|
| | | $ | | | | | $ | | |
| Goldman Sachs & Co. LLC | | |
BofA Securities
|
|
| Baird | | |
KeyBanc Capital Markets
|
| |
Mizuho Securities
|
|
| | | | | iii | | | |
| | | | | 1 | | | |
| | | | | 23 | | | |
| | | | | 54 | | | |
| | | | | 56 | | | |
| | | | | 57 | | | |
| | | | | 58 | | | |
| | | | | 59 | | | |
| | | | | 61 | | | |
| | | | | 72 | | | |
| | | | | 114 | | | |
| | | | | 131 | | | |
| | | | | 164 | | | |
| | | | | 169 | | | |
| | | | | 183 | | | |
| | | | | 187 | | | |
| | | | | 191 | | | |
| | | | | 197 | | | |
| | | | | 200 | | | |
| | | | | 204 | | | |
| | | | | 210 | | | |
| | | | | 210 | | | |
| | | | | 210 | | | |
| | | | | F-1 | | |
| | |
Shares of Class A
Common Stock |
| |
Shares of Class B
Common Stock |
| |
Total Economic Interests
|
| |
Combined Voting Power
|
| ||||||||||||||||||||||||
| | |
Shares
|
| |
%
|
| |
Votes
|
| |
%
|
| ||||||||||||||||||||||||
Bentley Control Group
|
| | | | 11,571,757 | | | | | | 58,831,619 | | | | | | 70,403,376 | | | | | | 26.9% | | | | | | 394,412,572 | | | | | | 67.3% | | |
Bentley Family
|
| | | | 11,263,492 | | | | | | 163,415,356 | | | | | | 174,678,848 | | | | | | 66.8% | | | | | | 490,056,624 | | | | | | 83.6% | | |
Colleagues and other existing
stockholders(1) |
| | | | 30,000 | | | | | | 75,679,426 | | | | | | 75,709,426 | | | | | | 29.0% | | | | | | 76,549,426 | | | | | | 13.1% | | |
Public stockholders
|
| | | | — | | | | | | 10,750,000 | | | | | | 10,750,000 | | | | | | 4.1% | | | | | | 10,750,000 | | | | | | 1.8% | | |
| | |
Year Ended December 31,
|
| |
Six Months Ended June 30,
|
| ||||||||||||||||||||||||||||||
| | |
2017
|
| |
2018
|
| |
2019
|
| |
2019
|
| |
2020
|
| |||||||||||||||||||||
| | |
Topic 605
|
| |
Topic 605(1)
|
| |
Topic 606
|
| |
Topic 606
|
| |
Topic 606
|
| |||||||||||||||||||||
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Subscriptions
|
| | | $ | 501,098 | | | | | $ | 557,421 | | | | | $ | 613,925 | | | | | $ | 608,300 | | | | | $ | 290,147 | | | | | $ | 327,837 | | |
Perpetual licenses
|
| | | | 61,661 | | | | | | 61,065 | | | | | | 52,519 | | | | | | 59,693 | | | | | | 24,468 | | | | | | 23,193 | | |
Subscriptions and licenses
|
| | | | 562,759 | | | | | | 618,486 | | | | | | 666,444 | | | | | | 667,993 | | | | | | 314,615 | | | | | | 351,030 | | |
Services
|
| | | | 66,164 | | | | | | 73,224 | | | | | | 68,405 | | | | | | 68,661 | | | | | | 32,529 | | | | | | 27,950 | | |
Total revenues
|
| | | | 628,923 | | | | | | 691,710 | | | | | | 734,849 | | | | | | 736,654 | | | | | | 347,144 | | | | | | 378,980 | | |
Cost of revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of subscriptions and
licenses |
| | | | 53,662 | | | | | | 55,113 | | | | | | 71,439 | | | | | | 71,578 | | | | | | 30,831 | | | | | | 43,128 | | |
Cost of services
|
| | | | 66,928 | | | | | | 76,211 | | | | | | 72,572 | | | | | | 72,572 | | | | | | 38,367 | | | | | | 30,836 | | |
Total cost of revenues
|
| | | | 120,590 | | | | | | 131,324 | | | | | | 144,011 | | | | | | 144,150 | | | | | | 69,198 | | | | | | 73,964 | | |
Gross profit
|
| | | | 508,333 | | | | | | 560,386 | | | | | | 590,838 | | | | | | 592,504 | | | | | | 277,946 | | | | | | 305,016 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Research and development
|
| | | | 151,194 | | | | | | 175,032 | | | | | | 183,552 | | | | | | 183,552 | | | | | | 91,861 | | | | | | 89,353 | | |
Selling and marketing
|
| | | | 139,259 | | | | | | 160,635 | | | | | | 155,274 | | | | | | 155,294 | | | | | | 75,168 | | | | | | 65,727 | | |
General and administrative
|
| | | | 87,467 | | | | | | 89,328 | | | | | | 97,580 | | | | | | 97,580 | | | | | | 46,307 | | | | | | 52,269 | | |
Amortization of purchased intangibles
|
| | | | 9,014 | | | | | | 14,000 | | | | | | 14,213 | | | | | | 14,213 | | | | | | 6,852 | | | | | | 7,115 | | |
Total operating expenses
|
| | | | 386,934 | | | | | | 438,995 | | | | | | 450,619 | | | | | | 450,639 | | | | | | 220,188 | | | | | | 214,464 | | |
Income from operations
|
| | | | 121,399 | | | | | | 121,391 | | | | | | 140,219 | | | | | | 141,865 | | | | | | 57,758 | | | | | | 90,552 | | |
Interest expense, net
|
| | | | (10,320) | | | | | | (8,765) | | | | | | (8,199) | | | | | | (8,199) | | | | | | (4,474) | | | | | | (2,516) | | |
Other income (expense), net
|
| | | | (5,773) | | | | | | 236 | | | | | | (5,557) | | | | | | (5,557) | | | | | | (1,747) | | | | | | (6,985) | | |
Income before income taxes
|
| | | | 105,306 | | | | | | 112,862 | | | | | | 126,463 | | | | | | 128,109 | | | | | | 51,537 | | | | | | 81,051 | | |
Provision for income taxes
|
| | | | 46,141 | | | | | | (29,250) | | | | | | 21,762 | | | | | | 23,738 | | | | | | 5,119 | | | | | | 11,440 | | |
| | |
Year Ended December 31,
|
| |
Six Months Ended June 30,
|
| ||||||||||||||||||||||||||||||
| | |
2017
|
| |
2018
|
| |
2019
|
| |
2019
|
| |
2020
|
| |||||||||||||||||||||
| | |
Topic 605
|
| |
Topic 605(1)
|
| |
Topic 606
|
| |
Topic 606
|
| |
Topic 606
|
| |||||||||||||||||||||
Equity in loss of joint venture, net of tax
|
| | | | — | | | | | | — | | | | | | 1,275 | | | | | | 1,275 | | | | | | — | | | | | | 866 | | |
Net income
|
| | | $ | 59,165 | | | | | | 142,112 | | | | | | 103,426 | | | | | | 103,096 | | | | | | 46,418 | | | | | | 68,745 | | |
Less: Net income attributable to participating securities
|
| | | | | | | | | | (4) | | | | | | (8) | | | | | | (8) | | | | | | (12) | | | | | | — | | |
Net income per share attributable to
Class A and Class B common shares |
| | | | | | | | | $ | 142,108 | | | | | $ | 103,418 | | | | | $ | 103,088 | | | | | $ | 46,406 | | | | | $ | 68,745 | | |
Net income per share: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic
|
| | | | | | | | | $ | 0.50 | | | | | $ | 0.36 | | | | | $ | 0.36 | | | | | $ | 0.16 | | | | | $ | 0.24 | | |
Diluted
|
| | | | | | | | | $ | 0.49 | | | | | $ | 0.35 | | | | | $ | 0.35 | | | | | $ | 0.16 | | | | | $ | 0.23 | | |
Weighted average shares outstanding, basic
|
| | | | | | | | | | 285,805,096 | | | | | | 284,625,642 | | | | | | 284,625,642 | | | | | | 285,529,476 | | | | | | 286,068,766 | | |
Weighted average shares outstanding, diluted
|
| | | | | | | | | | 292,624,496 | | | | | | 293,796,707 | | | | | | 293,796,707 | | | | | | 293,633,255 | | | | | | 295,595,234 | | |
|
| | |
Year Ended December 31,
|
| |||||||||||||||
| | |
2017
|
| |
2018
|
| |
2019
|
| |||||||||
Topic 605:(1) | | | | | | | | | | | | | | | | | | | |
Subscriptions
|
| | | $ | 501,098 | | | | | $ | 557,421 | | | | | $ | 613,925 | | |
Perpetual licenses
|
| | | | 61,661 | | | | | | 61,065 | | | | | | 52,519 | | |
Services
|
| | | | 66,164 | | | | | | 73,224 | | | | | | 68,405 | | |
Total revenues
|
| | | $ | 628,923 | | | | | $ | 691,710 | | | | | $ | 734,849 | | |
Topic 606:(2) | | | | | | | | | | | | | | | | | | | |
Subscriptions
|
| | | $ | 505,720 | | | | | $ | 560,485 | | | | | $ | 608,300 | | |
Perpetual licenses
|
| | | | 49,983 | | | | | | 57,353 | | | | | | 59,693 | | |
Services
|
| | | | 66,164 | | | | | | 73,224 | | | | | | 68,661 | | |
Total revenues
|
| | | $ | 621,867 | | | | | $ | 691,062 | | | | | $ | 736,654 | | |
|
| | |
Year Ended
December 31, |
| |
Twelve Months Ended
June 30, |
| ||||||||||||||||||||||||
| | |
2017
|
| |
2018
|
| |
2019
|
| |
2019
|
| |
2020
|
| |||||||||||||||
Last twelve-months recurring revenues (Topic 606)
|
| | | $ | 521,923 | | | | | $ | 586,466 | | | | | $ | 631,097 | | | | | $ | 606,411 | | | | | $ | 665,659 | | |
Last twelve-months recurring revenues (Topic 605)
|
| | | $ | 523,502 | | | | | $ | 582,402 | | | | | $ | 636,899 | | | | | $ | 604,043 | | | | | $ | 670,825 | | |
Constant Currency: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Annualized recurring revenues (“ARR”) growth rate
|
| | | | 9% | | | | | | 10% | | | | | | 12% | | | | | | 11% | | | | | | 11% | | |
Account retention rate
|
| | | | 98% | | | | | | 98% | | | | | | 98% | | | | | | 98% | | | | | | 98% | | |
Recurring revenues dollar-based net retention
rate |
| | | | 105% | | | | | | 107% | | | | | | 108% | | | | | | 106% | | | | | | 110% | | |
| | |
Year Ended December 31,
|
| |||||||||||||||
| | |
2017
|
| |
2018
|
| |
2019
|
| |||||||||
Topic 605:(1) | | | | | | | | | | | | | | | | | | | |
Adjusted EBITDA
|
| | | $ | 160,886 | | | | | $ | 171,768 | | | | | $ | 186,598 | | |
Adjusted Net Income
|
| | | $ | 115,389 | | | | | $ | 132,246 | | | | | $ | 135,471 | | |
Topic 606:(2) | | | | | | | | | | | | | | | | | | | |
Adjusted EBITDA
|
| | | $ | 153,830 | | | | | $ | 171,120 | | | | | $ | 188,129 | | |
Adjusted Net Income
|
| | | $ | 109,398 | | | | | $ | 131,697 | | | | | $ | 135,049 | | |
| | |
Six Months Ended June 30,
|
| |||||||||
| | |
2019
|
| |
2020
|
| ||||||
Topic 606: | | | | | | | | | | | | | |
Adjusted EBITDA
|
| | | $ | 79,384 | | | | | $ | 115,506 | | |
Adjusted Net Income
|
| | | $ | 59,978 | | | | | $ | 89,203 | | |
| | | | | | | | |
June 30, 2020
|
| |||||||||
| | |
Actual
|
| |
Pro forma
|
| |
Pro forma
as adjusted |
| |||||||||
Cash and cash equivalents(1)
|
| | | $ | 125,516 | | | | | $ | 125,516 | | | | | $ | 113,624 | | |
Working capital, excluding deferred revenues
|
| | | | 104,275 | | | | | | 102,831 | | | | | | 93,767 | | |
Total assets
|
| | | | 1,059,169 | | | | | | 1,059,169 | | | | | | 1,047,492 | | |
Deferred revenues, current and long-term
|
| | | | 186,456 | | | | | | 186,456 | | | | | | 186,456 | | |
Total debt
|
| | | | 207,000 | | | | | | 596,583 | | | | | | 598,075 | | |
Total stockholders’ equity (deficit)(1)
|
| | | | 379,744 | | | | | | (13,028) | | | | | | (21,039) | | |
| | |
As of June 30, 2020
|
| |||||||||||||||
(in thousands, except share and per share data)
|
| |
Actual
|
| |
Pro forma
|
| |
Pro forma
as adjusted |
| |||||||||
Cash and cash equivalents(1)
|
| | | $ | 125,516 | | | | | $ | 125,516 | | | | | $ | 113,624 | | |
Long-term debt
|
| | | $ | 207,000 | | | | | $ | 596,583 | | | | | $ | 598,075 | | |
Stockholders’ equity (deficit): | | | | | | | | | | | | | | | | | | | |
Class A common stock, $0.01 par value per share; 320,000,000 shares authorized, 11,601,757 shares issued and outstanding, actual and pro forma; 100,000,000 shares authorized, 11,601,757 shares issued and outstanding, pro forma as adjusted
|
| | | | 116 | | | | | | 116 | | | | | | 116 | | |
Class B common stock, $0.01 par value per share; 600,000,000
shares authorized, 247,607,598 shares issued and outstanding, actual and pro forma; 1,800,000,000 shares authorized, 249,632,970 shares issued and outstanding, pro forma as adjusted |
| | | | 2,476 | | | | | | 2,476 | | | | | | 2,496 | | |
Additional paid-in capital
|
| | | | 415,883 | | | | | | 415,883 | | | | | | 435,914 | | |
Accumulated other comprehensive loss
|
| | | | (28,404) | | | | | | (28,404) | | | | | | (28,404) | | |
| | |
As of June 30, 2020
|
| |||||||||||||||
(in thousands, except share and per share data)
|
| |
Actual
|
| |
Pro forma
|
| |
Pro forma
as adjusted |
| |||||||||
Accumulated deficit(1)
|
| | | | (10,327) | | | | | | (403,099) | | | | | | (431,161) | | |
Total stockholders’ equity (deficit)
|
| | | | 379,744 | | | | | | (13,028) | | | | | | (21,039) | | |
Total capitalization
|
| | | $ | 586,744 | | | | | $ | 583,555 | | | | | $ | 577,036 | | |
|
| | |
Year Ended December 31,
|
| |
Six Months Ended June 30,
|
| ||||||||||||||||||||||||||||||
| | |
2017
|
| |
2018
|
| |
2019
|
| |
2019
|
| |
2020
|
| |||||||||||||||||||||
| | |
Topic 605
|
| |
Topic 605(1)
|
| |
Topic 606
|
| |
Topic 606
|
| |
Topic 606
|
| |||||||||||||||||||||
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Subscriptions
|
| | | $ | 501,098 | | | | | $ | 557,421 | | | | | $ | 613,925 | | | | | $ | 608,300 | | | | | $ | 290,147 | | | | | $ | 327,837 | | |
Perpetual licenses
|
| | | | 61,661 | | | | | | 61,065 | | | | | | 52,519 | | | | | | 59,693 | | | | | | 24,468 | | | | | | 23,193 | | |
Subscriptions and licenses
|
| | | | 562,759 | | | | | | 618,486 | | | | | | 666,444 | | | | | | 667,993 | | | | | | 314,615 | | | | | | 351,030 | | |
Services
|
| | | | 66,164 | | | | | | 73,224 | | | | | | 68,405 | | | | | | 68,661 | | | | | | 32,529 | | | | | | 27,950 | | |
Total revenues
|
| | | | 628,923 | | | | | | 691,710 | | | | | | 734,849 | | | | | | 736,654 | | | | | | 347,144 | | | | | | 378,980 | | |
Cost of revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of subscriptions and licenses
|
| | | | 53,662 | | | | | | 55,113 | | | | | | 71,439 | | | | | | 71,578 | | | | | | 30,831 | | | | | | 43,128 | | |
Cost of services
|
| | | | 66,928 | | | | | | 76,211 | | | | | | 72,572 | | | | | | 72,572 | | | | | | 38,367 | | | | | | 30,836 | | |
Total cost of revenues
|
| | | | 120,590 | | | | | | 131,324 | | | | | | 144,011 | | | | | | 144,150 | | | | | | 69,198 | | | | | | 73,964 | | |
Gross profit
|
| | | | 508,333 | | | | | | 560,386 | | | | | | 590,838 | | | | | | 592,504 | | | | | | 277,946 | | | | | | 305,016 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Research and development
|
| | | | 151,194 | | | | | | 175,032 | | | | | | 183,552 | | | | | | 183,552 | | | | | | 91,861 | | | | | | 89,353 | | |
Selling and marketing
|
| | | | 139,259 | | | | | | 160,635 | | | | | | 155,274 | | | | | | 155,294 | | | | | | 75,168 | | | | | | 65,727 | | |
General and administrative
|
| | | | 87,467 | | | | | | 89,328 | | | | | | 97,580 | | | | | | 97,580 | | | | | | 46,307 | | | | | | 52,269 | | |
Amortization of purchased intangibles
|
| | | | 9,014 | | | | | | 14,000 | | | | | | 14,213 | | | | | | 14,213 | | | | | | 6,852 | | | | | | 7,115 | | |
Total operating expenses
|
| | | | 386,934 | | | | | | 438,995 | | | | | | 450,619 | | | | | | 450,639 | | | | | | 220,188 | | | | | | 214,464 | | |
Income from operations
|
| | | | 121,399 | | | | | | 121,391 | | | | | | 140,219 | | | | | | 141,865 | | | | | | 57,758 | | | | | | 90,552 | | |
Interest expense, net
|
| | | | (10,320) | | | | | | (8,765) | | | | | | (8,199) | | | | | | (8,199) | | | | | | (4,474) | | | | | | (2,516) | | |
Other income (expense), net
|
| | | | (5,773) | | | | | | 236 | | | | | | (5,557) | | | | | | (5,557) | | | | | | (1,747) | | | | | | (6,985) | | |
Income before income taxes
|
| | | | 105,306 | | | | | | 112,862 | | | | | | 126,463 | | | | | | 128,109 | | | | | | 51,537 | | | | | | 81,051 | | |
Provision for income taxes
|
| | | | 46,141 | | | | | | (29,250) | | | | | | 21,762 | | | | | | 23,738 | | | | | | 5,119 | | | | | | 11,440 | | |
Equity in loss of joint venture, net of tax
|
| | | | — | | | | | | — | | | | | | 1,275 | | | | | | 1,275 | | | | | | — | | | | | | 866 | | |
Net income
|
| | | $ | 59,165 | | | | | | 142,112 | | | | | | 103,426 | | | | | | 103,096 | | | | | | 46,418 | | | | | | 68,745 | | |
Less: Net income attributable to participating securities
|
| | | | | | | | | | (4) | | | | | | (8) | | | | | | (8) | | | | | | (12) | | | | | | — | | |
Net income per share attributable to Class A and Class B common shares
|
| | | | | | | | | $ | 142,108 | | | | | $ | 103,418 | | | | | $ | 103,088 | | | | | $ | 46,406 | | | | | $ | 68,745 | | |
Net income per share: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic
|
| | | | | | | | | $ | 0.50 | | | | | $ | 0.36 | | | | | $ | 0.36 | | | | | $ | 0.16 | | | | | $ | 0.24 | | |
Diluted
|
| | | | | | | | | $ | 0.49 | | | | | $ | 0.35 | | | | | $ | 0.35 | | | | | $ | 0.16 | | | | | $ | 0.23 | | |
Weighted average shares outstanding, basic
|
| | | | | | | | | | 285,805,096 | | | | | | 284,625,642 | | | | | | 284,625,642 | | | | | | 285,529,476 | | | | | | 286,068,766 | | |
Weighted average shares outstanding, diluted
|
| | | | | | | | | | 292,624,496 | | | | | | 293,796,707 | | | | | | 293,796,707 | | | | | | 293,633,255 | | | | | | 295,595,234 | | |
| | |
Year Ended December 31,
|
| |||||||||||||||
| | |
2017
|
| |
2018
|
| |
2019
|
| |||||||||
Topic 605:(1) | | | | | | | | | | | | | | | | | | | |
Subscriptions
|
| | | $ | 501,098 | | | | | $ | 557,421 | | | | | $ | 613,925 | | |
Perpetual licenses
|
| | | | 61,661 | | | | | | 61,065 | | | | | | 52,519 | | |
Services
|
| | | | 66,164 | | | | | | 73,224 | | | | | | 68,405 | | |
Total Revenues
|
| | | $ | 628,923 | | | | | $ | 691,710 | | | | | $ | 734,849 | | |
Topic 606:(2) | | | | | | | | | | | | | | | | | | | |
Subscriptions
|
| | | $ | 505,720 | | | | | $ | 560,485 | | | | | $ | 608,300 | | |
Perpetual licenses
|
| | | | 49,983 | | | | | | 57,353 | | | | | | 59,693 | | |
Services
|
| | | | 66,164 | | | | | | 73,224 | | | | | | 68,661 | | |
Total Revenues
|
| | | $ | 621,867 | | | | | $ | 691,062 | | | | | $ | 736,654 | | |
| | |
Year Ended December 31,
|
| |
Twelve Months Ended
June 30, |
| ||||||||||||||||||||||||
| | |
2017
|
| |
2018
|
| |
2019
|
| |
2019
|
| |
2020
|
| |||||||||||||||
Last twelve-months recurring revenues (Topic 606)
|
| | | $ | 521,923 | | | | | $ | 586,466 | | | | | $ | 631,097 | | | | | $ | 606,411 | | | | | $ | 665,659 | | |
Last twelve-months recurring revenues (Topic 605)
|
| | | $ | 523,502 | | | | | $ | 583,402 | | | | | $ | 636,899 | | | | | $ | 604,043 | | | | | $ | 670,825 | | |
Constant Currency: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
ARR growth rate
|
| | | | 9% | | | | | | 10% | | | | | | 12% | | | | | | 11% | | | | | | 11% | | |
Account retention rate
|
| | | | 98% | | | | | | 98% | | | | | | 98% | | | | | | 98% | | | | | | 98% | | |
Recurring revenues dollar-based net retention
rate |
| | | | 105% | | | | | | 107% | | | | | | 108% | | | | | | 106% | | | | | | 110% | | |
| | |
Year Ended December 31,
|
| |||||||||||||||
| | |
2017
|
| |
2018
|
| |
2019
|
| |||||||||
Topic 605:(1) | | | | | | | | | | | | | | | | | | | |
Adjusted EBITDA
|
| | | $ | 160,886 | | | | | $ | 171,768 | | | | | $ | 186,598 | | |
Adjusted Net Income
|
| | | $ | 115,389 | | | | | $ | 132,246 | | | | | $ | 135,471 | | |
Topic 606:(2) | | | | | | | | | | | | | | | | | | | |
Adjusted EBITDA
|
| | | $ | 153,830 | | | | | $ | 171,120 | | | | | $ | 188,129 | | |
Adjusted Net Income
|
| | | $ | 109,398 | | | | | $ | 131,697 | | | | | $ | 135,049 | | |
| | |
Six Months Ended June 30,
|
| |||||||||
| | |
2019
|
| |
2020
|
| ||||||
Topic 606: | | | | | | | | | | | | | |
Adjusted EBITDA
|
| | | $ | 79,384 | | | | | $ | 115,506 | | |
Adjusted Net Income
|
| | | $ | 59,978 | | | | | $ | 89,203 | | |
| | |
Year Ended December 31,
|
| |||||||||||||||
| | |
2017
|
| |
2018
|
| |
2019
|
| |||||||||
Net income(1)
|
| | | $ | 59,165 | | | | | $ | 142,112 | | | | | $ | 103,426 | | |
Interest expense, net
|
| | | | 10,320 | | | | | | 8,765 | | | | | | 8,199 | | |
Provision (benefit) for income taxes
|
| | | | 46,141 | | | | | | (29,250) | | | | | | 21,762 | | |
Depreciation and amortization(3)(a)
|
| | | | 26,544 | | | | | | 29,200 | | | | | | 32,160 | | |
Equity-based compensation(3)(c)
|
| | | | 4,985 | | | | | | 7,989 | | | | | | 8,091 | | |
Acquisition expenses(3)(d)
|
| | | | 3,020 | | | | | | 6,410 | | | | | | 6,712 | | |
Realignment expenses(3)(e)
|
| | | | 4,938 | | | | | | 6,778 | | | | | | (584) | | |
Other (income) expense, net(3)(f)
|
| | | | 5,773 | | | | | | (236) | | | | | | 5,557 | | |
Equity in loss of joint venture, net of tax
|
| | | | — | | | | | | — | | | | | | 1,275 | | |
Adjusted EBITDA
|
| | | $ | 160,886 | | | | | $ | 171,768 | | | | | $ | 186,598 | | |
|
| | |
Year Ended December 31,
|
| |||||||||||||||
| | |
2017
|
| |
2018
|
| |
2019
|
| |||||||||
Net income(1)
|
| | | $ | 59,165 | | | | | $ | 142,112 | | | | | $ | 103,426 | | |
Non-GAAP adjustments, prior to income taxes:
|
| | | | | | | | | | | | | | | | | | |
Amortization of purchased intangibles and developed technologies(3)(b)
|
| | | | 13,879 | | | | | | 17,215 | | | | | | 18,731 | | |
Equity-based compensation(3)(c)
|
| | | | 4,985 | | | | | | 7,989 | | | | | | 8,091 | | |
Acquisition expenses(3)(d)
|
| | | | 3,020 | | | | | | 6,410 | | | | | | 6,712 | | |
Realignment expenses(3)(e)
|
| | | | 4,938 | | | | | | 6,778 | | | | | | (584) | | |
Other (income) expense, net(3)(f)
|
| | | | 5,773 | | | | | | (236) | | | | | | 5,557 | | |
Total non-GAAP adjustments, prior to income taxes
|
| | | | 32,595 | | | | | | 38,156 | | | | | | 38,507 | | |
Income tax effect of non-GAAP adjustments
|
| | | | (6,644) | | | | | | (5,971) | | | | | | (7,737) | | |
Non-recurring income tax expense related to Tax Cuts and Jobs Act(3)(g)
|
| | | | 30,273 | | | | | | 4,318 | | | | | | — | | |
Non-recurring income tax benefit related to intercompany
transactions(3)(h) |
| | | | — | | | | | | (46,369) | | | | | | — | | |
Equity in loss of joint venture, net of tax
|
| | | | — | | | | | | — | | | | | | 1,275 | | |
Adjusted Net Income
|
| | | $ | 115,389 | | | | | $ | 132,246 | | | | | $ | 135,471 | | |
| | |
Year Ended December 31,
|
| |
Six Months Ended June 30,
|
| ||||||||||||||||||||||||
| | |
2017
|
| |
2018
|
| |
2019
|
| |
2019
|
| |
2020
|
| |||||||||||||||
Net income(2)
|
| | | $ | 53,174 | | | | | $ | 141,563 | | | | | $ | 103,096 | | | | | $ | 46,418 | | | | | $ | 68,745 | | |
Interest expense, net
|
| | | | 10,320 | | | | | | 8,765 | | | | | | 8,199 | | | | | | 4,474 | | | | | | 2,516 | | |
Provision (benefit) for income taxes
|
| | | | 45,076 | | | | | | (29,349) | | | | | | 23,738 | | | | | | 5,119 | | | | | | 11,440 | | |
Depreciation and amortization(3)(a)
|
| | | | 26,544 | | | | | | 29,200 | | | | | | 32,160 | | | | | | 15,366 | | | | | | 16,664 | | |
Equity-based compensation(3)(c)
|
| | | | 4,985 | | | | | | 7,989 | | | | | | 8,091 | | | | | | 4,025 | | | | | | 3,212 | | |
Acquisition expenses(3)(d)
|
| | | | 3,020 | | | | | | 6,410 | | | | | | 6,597 | | | | | | 2,678 | | | | | | 5,009 | | |
Realignment expenses(3)(e)
|
| | | | 4,938 | | | | | | 6,778 | | | | | | (584) | | | | | | (443) | | | | | | 69 | | |
Other (income) expense, net(3)(f)
|
| | | | 5,773 | | | | | | (236) | | | | | | 5,557 | | | | | | 1,747 | | | | | | 6,985 | | |
Equity in loss of joint venture, net of tax
|
| | | | — | | | | | | — | | | | | | 1,275 | | | | | | — | | | | | | 866 | | |
Adjusted EBITDA
|
| | | $ | 153,830 | | | | | $ | 171,120 | | | | | $ | 188,129 | | | | | $ | 79,384 | | | | | $ | 115,506 | | |
|
| | |
Year Ended December 31,
|
| |
Six Months Ended
June 30, |
| ||||||||||||||||||||||||
| | |
2017
|
| |
2018
|
| |
2019
|
| |
2019
|
| |
2020
|
| |||||||||||||||
Net income(2)
|
| | | $ | 53,174 | | | | | $ | 141,563 | | | | | $ | 103,096 | | | | | $ | 46,418 | | | | | $ | 68,745 | | |
Non-GAAP adjustments, prior to income taxes:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Amortization of purchased intangibles and developed technologies(3)(b)
|
| | | | 13,879 | | | | | | 17,215 | | | | | | 18,731 | | | | | | 9,061 | | | | | | 9,458 | | |
Equity-based compensation(3)(c)
|
| | | | 4,985 | | | | | | 7,989 | | | | | | 8,091 | | | | | | 4,025 | | | | | | 3,212 | | |
Acquisition expenses(3)(d)
|
| | | | 3,020 | | | | | | 6,410 | | | | | | 6,597 | | | | | | 2,678 | | | | | | 5,009 | | |
Realignment expenses(3)(e)
|
| | | | 4,938 | | | | | | 6,778 | | | | | | (584) | | | | | | (443) | | | | | | 69 | | |
Other (income) expense, net(3)(f)
|
| | | | 5,773 | | | | | | (236) | | | | | | 5,557 | | | | | | 1,747 | | | | | | 6,985 | | |
Total non-GAAP adjustments, prior to income taxes
|
| | | | 32,595 | | | | | | 38,156 | | | | | | 38,392 | | | | | | 17,068 | | | | | | 24,733 | | |
Income tax effect of non-GAAP adjustments
|
| | | | (6,644) | | | | | | (5,971) | | | | | | (7,714) | | | | | | (3,508) | | | | | | (5,141) | | |
Non-recurring income tax expense related to Tax Cuts and Jobs Act(3)(g)
|
| | | | 30,273 | | | | | | 4,318 | | | | | | — | | | | | | — | | | | | | — | | |
Non-recurring income tax benefit related to intercompany transactions(3)(h)
|
| | | | — | | | | | | (46,369) | | | | | | — | | | | | | — | | | | | | — | | |
Equity in loss of joint venture, net of tax
|
| | | | — | | | | | | — | | | | | | 1,275 | | | | | | — | | | | | | 866 | | |
Adjusted Net Income
|
| | | $ | 109,398 | | | | | $ | 131,697 | | | | | $ | 135,049 | | | | | $ | 59,978 | | | | | $ | 89,203 | | |
| | |
Year Ended December 31, 2017
|
| |||||||||||||||
| | |
As reported
Topic 605 |
| |
Adjustments
|
| |
Topic 606
|
| |||||||||
Subscriptions
|
| | | $ | 501,098 | | | | | $ | 4,622 | | | | | $ | 505,720 | | |
Perpetual licenses
|
| | | | 61,661 | | | | | | (11,678) | | | | | | 49,983 | | |
Provision for income taxes
|
| | | | 46,141 | | | | | | (1,065) | | | | | | 45,076 | | |
Net income
|
| | | | 59,165 | | | | | $ | (5,991) | | | | | | 53,174 | | |
|
| | |
Year Ended December 31, 2018
|
| |||||||||||||||
| | |
As reported
Topic 605 |
| |
Adjustments
|
| |
Topic 606
|
| |||||||||
Subscriptions
|
| | | $ | 557,421 | | | | | $ | 3,064 | | | | | $ | 560,485 | | |
Perpetual licenses
|
| | | | 61,065 | | | | | | (3,712) | | | | | | 57,353 | | |
Provision for income taxes
|
| | | | (29,250) | | | | | | (99) | | | | | | (29,349) | | |
Net income
|
| | | | 142,112 | | | | | $ | (549) | | | | | | 141,563 | | |
| | |
December 31,
2018 |
| |
December 31,
2019 |
| |
June 30,
2020 |
| |||||||||
Cash and cash equivalents
|
| | | $ | 81,183 | | | | | $ | 121,101 | | | | | $ | 125,516 | | |
Working capital, excluding deferred revenues
|
| | | | 135,163 | | | | | | 166,136 | | | | | | 104,275 | | |
Total assets
|
| | | | 923,596 | | | | | | 994,599 | | | | | | 1,059,169 | | |
Deferred revenues, current and long-term
|
| | | | 337,451 | | | | | | 213,145 | | | | | | 186,456 | | |
Total debt
|
| | | | 258,750 | | | | | | 233,750 | | | | | | 207,000 | | |
Total stockholders’ equity
|
| | | | 147,431 | | | | | | 334,619 | | | | | | 379,744 | | |
| | |
Year Ended
December 31, |
| |
Twelve Months Ended
June 30, |
| ||||||||||||||||||||||||
| | |
2017
|
| |
2018
|
| |
2019
|
| |
2019
|
| |
2020
|
| |||||||||||||||
Last twelve-months recurring revenues (Topic 606)
|
| | | $ | 521,923 | | | | | $ | 586,466 | | | | | $ | 631,097 | | | | | $ | 606,411 | | | | | $ | 665,659 | | |
Last twelve-months recurring revenues (Topic 605)
|
| | | $ | 523,502 | | | | | $ | 583,402 | | | | | $ | 636,899 | | | | | $ | 604,043 | | | | | $ | 670,825 | | |
Constant Currency: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
ARR growth rate
|
| | | | 9% | | | | | | 10% | | | | | | 12% | | | | | | 11% | | | | | | 11% | | |
Account retention rate
|
| | | | 98% | | | | | | 98% | | | | | | 98% | | | | | | 98% | | | | | | 98% | | |
Recurring revenues dollar-based net retention
rate |
| | | | 105% | | | | | | 107% | | | | | | 108% | | | | | | 106% | | | | | | 110% | | |
| | |
Year Ended December 31,
|
| |
Six Months Ended June 30,
|
| ||||||||||||||||||||||||
| | |
2018
|
| |
2019
|
| |
2019
|
| |
2020
|
| ||||||||||||||||||
| | |
Topic 605
|
| |
Topic 605
|
| |
Topic 606
|
| |
Topic 606
|
| |
Topic 606
|
| |||||||||||||||
Adjusted EBITDA
|
| | | $ | 171,768 | | | | | $ | 186,598 | | | | | $ | 188,129 | | | | | $ | 79,384 | | | | | $ | 115,506 | | |
Adjusted Net Income
|
| | | $ | 132,246 | | | | | $ | 135,471 | | | | | $ | 135,049 | | | | | $ | 59,978 | | | | | $ | 89,203 | | |
| | |
Year Ended
December 31, |
| |
Six Months Ended
June 30, |
| ||||||||||||||||||
| | |
2018
|
| |
2019
|
| |
2019
|
| |
2020
|
| ||||||||||||
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | |
Subscriptions
|
| | | $ | 557,421 | | | | | $ | 608,300 | | | | | $ | 290,147 | | | | | $ | 327,837 | | |
Perpetual licenses
|
| | | | 61,065 | | | | | | 59,693 | | | | | | 24,468 | | | | | | 23,193 | | |
Subscriptions and licenses
|
| | | | 618,486 | | | | | | 667,993 | | | | | | 314,615 | | | | | | 351,030 | | |
Services
|
| | | | 73,224 | | | | | | 68,661 | | | | | | 32,529 | | | | | | 27,950 | | |
Total revenues
|
| | | | 691,710 | | | | | | 736,654 | | | | | | 347,144 | | | | | | 378,980 | | |
Cost of revenues: | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of subscriptions and licenses
|
| | | | 55,113 | | | | | | 71,578 | | | | | | 30,831 | | | | | | 43,128 | | |
Cost of services
|
| | | | 76,211 | | | | | | 72,572 | | | | | | 38,367 | | | | | | 30,836 | | |
Total cost of revenues
|
| | | | 131,324 | | | | | | 144,150 | | | | | | 69,198 | | | | | | 73,964 | | |
Gross profit
|
| | | | 560,386 | | | | | | 592,504 | | | | | | 277,946 | | | | | | 305,016 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | |
Research and development
|
| | | | 175,032 | | | | | | 183,552 | | | | | | 91,861 | | | | | | 89,353 | | |
Selling and marketing
|
| | | | 160,635 | | | | | | 155,294 | | | | | | 75,168 | | | | | | 65,727 | | |
General and administrative
|
| | | | 89,328 | | | | | | 97,580 | | | | | | 46,307 | | | | | | 52,269 | | |
Amortization of purchased intangibles
|
| | | | 14,000 | | | | | | 14,213 | | | | | | 6,852 | | | | | | 7,115 | | |
Total operating expenses
|
| | | | 438,995 | | | | | | 450,639 | | | | | | 220,188 | | | | | | 214,464 | | |
Income from operations
|
| | | | 121,391 | | | | | | 141,865 | | | | | | 57,758 | | | | | | 90,552 | | |
Interest expense, net
|
| | | | (8,765) | | | | | | (8,199) | | | | | | (4,474) | | | | | | (2,516) | | |
Other income (expense), net
|
| | | | 236 | | | | | | (5,557) | | | | | | (1,747) | | | | | | (6,985) | | |
Income before income taxes
|
| | | | 112,862 | | | | | | 128,109 | | | | | | 51,537 | | | | | | 81,051 | | |
Provision for income taxes
|
| | | | (29,250) | | | | | | 23,738 | | | | | | 5,119 | | | | | | 11,440 | | |
Equity in loss of joint venture, net of tax
|
| | | | — | | | | | | 1,275 | | | | | | — | | | | | | 866 | | |
Net income
|
| | | | 142,112 | | | | | | 103,096 | | | | | | 46,418 | | | | | | 68,745 | | |
Less: Net income attributable to participating securities
|
| | | | (4) | | | | | | (8) | | | | | | (12) | | | | | | — | | |
Net income per share attributable to Class A and Class B common
shares |
| | | $ | 142,108 | | | | | $ | 103,088 | | | | | $ | 46,406 | | | | | $ | 68,745 | | |
Net income per share: | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic
|
| | | $ | 0.50 | | | | | $ | 0.36 | | | | | $ | 0.16 | | | | | $ | 0.24 | | |
Diluted
|
| | | $ | 0.49 | | | | | $ | 0.35 | | | | | $ | 0.16 | | | | | $ | 0.23 | | |
Weighted average shares outstanding, basic
|
| | | | 285,805,096 | | | | | | 284,625,642 | | | | | | 285,529,476 | | | | | | 286,068,766 | | |
Weighted average shares outstanding, diluted
|
| | | | 292,624,496 | | | | | | 293,796,707 | | | | | | 293,633,255 | | | | | | 295,595,234 | | |
|
| | | | | | | | | | | | | | |
Comparison
|
| |||||||||||||||
| | |
Six Months Ended June 30,
|
| |
Amount
|
| |
%
|
| |
Constant
Currency % |
| ||||||||||||||||||
| | |
2019
|
| |
2020
|
| ||||||||||||||||||||||||
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Subscriptions
|
| | | $ | 290,147 | | | | | $ | 327,837 | | | | | $ | 37,690 | | | | | | 13.0% | | | | | | 14.3% | | |
Perpetual licenses
|
| | | | 24,468 | | | | | | 23,193 | | | | | | (1,275) | | | | | | (5.2)% | | | | | | (2.9)% | | |
Subscriptions and licenses
|
| | | | 314,615 | | | | | | 351,030 | | | | | | 36,415 | | | | | | 11.6% | | | | | | 13.0% | | |
Services
|
| | | | 32,529 | | | | | | 27,950 | | | | | | (4,579) | | | | | | (14.1)% | | | | | | (13.0)% | | |
Total revenues
|
| | | $ | 347,144 | | | | | $ | 378,980 | | | | | $ | 31,836 | | | | | | 9.2% | | | | | | 10.5% | | |
| | | | | | | | | | | | | | |
Comparison
|
| |||||||||||||||
| | |
Six Months Ended June 30,
|
| |
Amount
|
| |
%
|
| |
Constant
Currency % |
| ||||||||||||||||||
| | |
2019
|
| |
2020
|
| ||||||||||||||||||||||||
Revenues by Geographic Area | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Americas
|
| | | $ | 167,440 | | | | | $ | 185,838 | | | | | $ | 18,398 | | | | | | 11.0% | | | | | | 11.4% | | |
EMEA
|
| | | | 115,811 | | | | | | 121,578 | | | | | | 5,767 | | | | | | 5.0% | | | | | | 7.3% | | |
APAC
|
| | | | 63,893 | | | | | | 71,564 | | | | | | 7,671 | | | | | | 12.0% | | | | | | 14.1% | | |
Total revenues by geographic area
|
| | | $ | 347,144 | | | | | $ | 378,980 | | | | | $ | 31,836 | | | | | | 9.2% | | | | | | 10.5% | | |
| | | | | | | | | | | | | | |
Comparison
|
| |||||||||||||||
| | |
Six Months Ended June 30,
|
| |
Amount
|
| |
%
|
| |
Constant
Currency % |
| ||||||||||||||||||
| | |
2019
|
| |
2020
|
| ||||||||||||||||||||||||
Cost of subscriptions and licenses
|
| | | $ | 30,831 | | | | | $ | 43,128 | | | | | $ | 12,297 | | | | | | 39.9% | | | | | | 41.9% | | |
Cost of services
|
| | | | 38,367 | | | | | | 30,836 | | | | | | (7,531) | | | | | | (19.6)% | | | | | | (17.9)% | | |
Total cost of revenues
|
| | | $ | 69,198 | | | | | $ | 73,964 | | | | | $ | 4,766 | | | | | | 6.9% | | | | | | 8.7% | | |
| | | | | | | | | | | | | | |
Comparison
|
| |||||||||||||||
| | |
Six Months Ended June 30,
|
| |
Amount
|
| |
%
|
| |
Constant
Currency % |
| ||||||||||||||||||
| | |
2019
|
| |
2020
|
| ||||||||||||||||||||||||
Research and development
|
| | | $ | 91,861 | | | | | $ | 89,353 | | | | | $ | (2,508) | | | | | | (2.7)% | | | | | | (1.3)% | | |
Selling and marketing
|
| | | | 75,168 | | | | | | 65,727 | | | | | | (9,441) | | | | | | (12.6)% | | | | | | (10.6)% | | |
General and administrative
|
| | | | 46,307 | | | | | | 52,269 | | | | | | 5,962 | | | | | | 12.9% | | | | | | 13.7% | | |
Amortization of purchased intangibles
|
| | | | 6,852 | | | | | | 7,115 | | | | | | 263 | | | | | | 3.8% | | | | | | 5.3% | | |
Total operating expenses
|
| | | $ | 220,188 | | | | | $ | 214,464 | | | | | $ | (5,724) | | | | | | (2.6)% | | | | | | (1.1)% | | |
| | |
Six Months Ended June 30,
|
| |||||||||
| | |
2019
|
| |
2020
|
| ||||||
Interest expense
|
| | | $ | (5,021) | | | | | $ | (2,846) | | |
Interest income
|
| | | | 547 | | | | | | 330 | | |
Total interest expense, net
|
| | | $ | (4,474) | | | | | $ | (2,516) | | |
|
| | |
Six Months Ended June 30,
|
| |||||||||
| | |
2019
|
| |
2020
|
| ||||||
Bank credit facility
|
| | | $ | (4,600) | | | | | $ | (2,544) | | |
Amortization of deferred financing costs
|
| | | | (277) | | | | | | (277) | | |
Other, net
|
| | | | 403 | | | | | | 305 | | |
Total interest expense, net
|
| | | $ | (4,474) | | | | | $ | (2,516) | | |
| | |
Six Months Ended June 30,
|
| |||||||||
| | |
2019
|
| |
2020
|
| ||||||
Foreign exchange loss
|
| | | $ | (1,588) | | | | | $ | (4,263) | | |
Other income, net
|
| | | | (159) | | | | | | (2,722) | | |
Total other income (expense), net
|
| | | $ | (1,747) | | | | | $ | (6,985) | | |
| | |
Six Months Ended June 30,
|
| |||||||||
| | |
2019
|
| |
2020
|
| ||||||
Net income
|
| | | $ | 46,418 | | | | | $ | 68,745 | | |
| | |
Six Months Ended June 30,
|
| |||||||||
| | |
2019
|
| |
2020
|
| ||||||
Adjusted EBITDA
|
| | | $ | 79,384 | | | | | $ | 115,506 | | |
Adjusted Net Income
|
| | | $ | 59,978 | | | | | $ | 89,203 | | |
| | | | | | | | | | | | | | |
Comparison
|
| |||||||||||||||||||||||||||||||||
| | |
Year Ended December 31,
|
| |
Amount
|
| |
%
|
| |
Impact
from Adoption of Topic 606 |
| |
Remaining
Difference |
| |
%
|
| |
Constant
Currency % |
| |||||||||||||||||||||||||||
| | |
2018
|
| |
2019
|
| ||||||||||||||||||||||||||||||||||||||||||
| | |
As reported
Topic 605 |
| |
As reported
Topic 606 |
| ||||||||||||||||||||||||||||||||||||||||||
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Subscriptions
|
| | | $ | 557,421 | | | | | $ | 608,300 | | | | | $ | 50,879 | | | | | | 9.1% | | | | | $ | (5,625) | | | | | $ | 56,504 | | | | | | 10.1% | | | | | | 12.9% | | |
Perpetual licenses
|
| | | | 61,065 | | | | | | 59,693 | | | | | | (1,372) | | | | | | (2.2)% | | | | | | 7,174 | | | | | | (8,546) | | | | | | (14.0)% | | | | | | (11.1)% | | |
Subscriptions and licenses
|
| | | | 618,486 | | | | | | 667,993 | | | | | | 49,507 | | | | | | 8.0% | | | | | | 1,549 | | | | | | 47,958 | | | | | | 7.8% | | | | | | 10.5% | | |
Services
|
| | | | 73,224 | | | | | | 68,661 | | | | | | (4,563) | | | | | | (6.2)% | | | | | | 256 | | | | | | (4,819) | | | | | | (6.6)% | | | | | | (4.8)% | | |
Total revenues
|
| | | $ | 691,710 | | | | | $ | 736,654 | | | | | $ | 44,944 | | | | | | 6.5% | | | | | $ | 1,805 | | | | | $ | 43,139 | | | | | | 6.2% | | | | | | 8.9% | | |
| | | | | | | | | | | | | | |
Comparison
|
| |||||||||||||||||||||||||||||||||
| | |
Year Ended December 31,
|
| |
Amount
|
| |
%
|
| |
Impact
from Adoption of Topic 606 |
| |
Remaining
Difference |
| |
%
|
| |
Constant
Currency % |
| |||||||||||||||||||||||||||
| | |
2018
|
| |
2019
|
| ||||||||||||||||||||||||||||||||||||||||||
| | |
As reported
Topic 605 |
| |
As reported
Topic 606 |
| ||||||||||||||||||||||||||||||||||||||||||
Revenues by Geographic Area | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Americas
|
| | | $ | 328,749 | | | | | $ | 356,331 | | | | | $ | 27,582 | | | | | | 8.4% | | | | | $ | (4,603) | | | | | $ | 32,185 | | | | | | 9.8% | | | | | | 10.8% | | |
EMEA
|
| | | | 231,486 | | | | | | 236,602 | | | | | | 5,116 | | | | | | 2.2% | | | | | | 1,348 | | | | | | 3,768 | | | | | | 1.6% | | | | | | 6.0% | | |
APAC
|
| | | | 131,475 | | | | | | 143,721 | | | | | | 12,246 | | | | | | 9.3% | | | | | | 5,060 | | | | | | 7,186 | | | | | | 5.5% | | | | | | 9.1% | | |
Total revenues by geographic area
|
| | | $ | 691,710 | | | | | $ | 736,654 | | | | | $ | 44,944 | | | | | | 6.5% | | | | | $ | 1,805 | | | | | $ | 43,139 | | | | | | 6.2% | | | | | | 8.9% | | |
|
| | | | | | | | | | | | | | |
Comparison
|
| |||||||||||||||||||||||||||||||||
| | |
Year Ended December 31,
|
| |
Amount
|
| |
%
|
| |
Impact
from Adoption of Topic 606 |
| |
Remaining
Difference |
| |
%
|
| |
Constant
Currency % |
| |||||||||||||||||||||||||||
| | |
2018
|
| |
2019
|
| ||||||||||||||||||||||||||||||||||||||||||
| | |
As reported
Topic 605 |
| |
As reported
Topic 606 |
| ||||||||||||||||||||||||||||||||||||||||||
Cost of subscriptions and licenses
|
| | | $ | 55,113 | | | | | $ | 71,578 | | | | | $ | 16,465 | | | | | | 29.9% | | | | | $ | 139 | | | | | $ | 16,326 | | | | | | 29.6% | | | | | | 32.8% | | |
Cost of services
|
| | | | 76,211 | | | | | | 72,572 | | | | | | (3,639) | | | | | | (4.8)% | | | | | | — | | | | | | (3,639) | | | | | | (4.8)% | | | | | | (2.2)% | | |
Total cost of revenues
|
| | | $ | 131,324 | | | | | $ | 144,150 | | | | | $ | 12,826 | | | | | | 9.8% | | | | | $ | 139 | | | | | $ | 12,687 | | | | | | 9.7% | | | | | | 12.5% | | |
| | | | | | | | | | | | | | |
Comparison
|
| |||||||||||||||||||||||||||||||||
| | |
Year Ended December 31,
|
| |
Amount
|
| |
%
|
| |
Impact
from Adoption of Topic 606 |
| |
Remaining
Difference |
| |
%
|
| |
Constant
Currency % |
| |||||||||||||||||||||||||||
| | |
2018
|
| |
2019
|
| ||||||||||||||||||||||||||||||||||||||||||
| | |
As reported
Topic 605 |
| |
As reported
Topic 606 |
| ||||||||||||||||||||||||||||||||||||||||||
Research and development
|
| | | $ | 175,032 | | | | | $ | 183,552 | | | | | $ | 8,520 | | | | | | 4.9% | | | | | $ | — | | | | | $ | 8,520 | | | | | | 4.9% | | | | | | 7.2% | | |
Selling and marketing
|
| | | | 160,635 | | | | | | 155,294 | | | | | | (5,341) | | | | | | (3.3)% | | | | | | 20 | | | | | | (5,361) | | | | | | (3.3)% | | | | | | (1.0)% | | |
General and administrative
|
| | | | 89,328 | | | | | | 97,580 | | | | | | 8,252 | | | | | | 9.2% | | | | | | — | | | | | | 8,252 | | | | | | 9.2% | | | | | | 10.6% | | |
Amortization of purchased intangibles
|
| | | | 14,000 | | | | | | 14,213 | | | | | | 213 | | | | | | 1.5% | | | | | | — | | | | | | 213 | | | | | | 1.5% | | | | | | 4.4% | | |
Total operating expenses
|
| | | $ | 438,995 | | | | | $ | 450,639 | | | | | $ | 11,644 | | | | | | 2.7% | | | | | $ | 20 | | | | | $ | 11,624 | | | | | | 2.6% | | | | | | 4.8% | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2018
|
| |
2019
|
| ||||||
Interest expense
|
| | | $ | (9,607) | | | | | $ | (9,731) | | |
Interest income
|
| | | | 842 | | | | | | 1,532 | | |
Total interest expense, net
|
| | | $ | (8,765) | | | | | $ | (8,199) | | |
|
| | |
Year Ended
December 31, |
| |||||||||
| | |
2018
|
| |
2019
|
| ||||||
Bank credit facility
|
| | | $ | (8,800) | | | | | $ | (8,971) | | |
Amortization of deferred financing costs
|
| | | | (552) | | | | | | (553) | | |
Other, net
|
| | | | 587 | | | | | | 1,325 | | |
Total interest expense, net
|
| | | $ | (8,765) | | | | | $ | (8,199) | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2018
|
| |
2019
|
| ||||||
Foreign exchange loss
|
| | | $ | (418) | | | | | $ | (5,591) | | |
Other income, net
|
| | | | 654 | | | | | | 34 | | |
Total other income (expense), net
|
| | | $ | 236 | | | | | $ | (5,557) | | |
| | |
Year Ended December 31,
|
| |||||||||||||||
| | |
2018
|
| |
2019
|
| ||||||||||||
| | |
Topic 605
|
| |
Topic 605
|
| |
Topic 606
|
| |||||||||
Net income
|
| | | $ | 142,112 | | | | | $ | 103,426 | | | | | $ | 103,096 | | |
| | |
Year Ended December 31,
|
| |||||||||||||||
| | |
2018
|
| |
2019
|
| ||||||||||||
| | |
Topic 605
|
| |
Topic 605
|
| |
Topic 606
|
| |||||||||
Adjusted EBITDA
|
| | | $ | 171,768 | | | | | $ | 186,598 | | | | | $ | 188,129 | | |
Adjusted Net Income
|
| | | $ | 132,246 | | | | | $ | 135,471 | | | | | $ | 135,049 | | |
| | |
Q1 2018
|
| |
Q2 2018
|
| |
Q3 2018
|
| |
Q4 2018
|
| |
Q1 2019
|
| |
Q2 2019
|
| |
Q3 2019
|
| |
Q4 2019
|
| |
Q1 2020
|
| |
Q2 2020
|
| ||||||||||||||||||||||||||||||
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Subscriptions
|
| | | $ | 137,807 | | | | | $ | 139,013 | | | | | $ | 137,881 | | | | | $ | 142,720 | | | | | $ | 152,309 | | | | | $ | 137,838 | | | | | $ | 155,191 | | | | | $ | 162,962 | | | | | $ | 170,182 | | | | | $ | 157,655 | | |
Perpetual licenses
|
| | | | 14,860 | | | | | | 15,846 | | | | | | 15,443 | | | | | | 14,916 | | | | | | 9,409 | | | | | | 15,059 | | | | | | 13,787 | | | | | | 21,438 | | | | | | 10,814 | | | | | | 12,379 | | |
Subscriptions and licenses
|
| | | | 152,667 | | | | | | 154,859 | | | | | | 153,324 | | | | | | 157,636 | | | | | | 161,718 | | | | | | 152,897 | | | | | | 168,978 | | | | | | 184,400 | | | | | | 180,996 | | | | | | 170,034 | | |
Services
|
| | | | 16,750 | | | | | | 19,200 | | | | | | 18,160 | | | | | | 19,114 | | | | | | 15,821 | | | | | | 16,708 | | | | | | 17,610 | | | | | | 18,522 | | | | | | 13,694 | | | | | | 14,256 | | |
Total revenues
|
| | | | 169,417 | | | | | | 174,059 | | | | | | 171,484 | | | | | | 176,750 | | | | | | 177,539 | | | | | | 169,605 | | | | | | 186,588 | | | | | | 202,922 | | | | | | 194,690 | | | | | | 184,290 | | |
Cost of revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of subscriptions and licenses
|
| | | | 12,892 | | | | | | 12,454 | | | | | | 15,450 | | | | | | 14,317 | | | | | | 14,342 | | | | | | 16,489 | | | | | | 17,370 | | | | | | 23,377 | | | | | | 21,327 | | | | | | 21,801 | | |
Cost of services
|
| | | | 17,267 | | | | | | 22,432 | | | | | | 17,768 | | | | | | 18,744 | | | | | | 18,225 | | | | | | 20,142 | | | | | | 17,681 | | | | | | 16,524 | | | | | | 15,932 | | | | | | 14,904 | | |
Total cost of revenues
|
| | | | 30,159 | | | | | | 34,886 | | | | | | 33,218 | | | | | | 33,061 | | | | | | 32,567 | | | | | | 36,631 | | | | | | 35,051 | | | | | | 39,901 | | | | | | 37,259 | | | | | | 36,705 | | |
Gross profit
|
| | | | 139,258 | | | | | | 139,173 | | | | | | 138,266 | | | | | | 143,689 | | | | | | 144,972 | | | | | | 132,974 | | | | | | 151,537 | | | | | | 163,021 | | | | | | 157,431 | | | | | | 147,585 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Research and development
|
| | | | 40,983 | | | | | | 43,822 | | | | | | 42,793 | | | | | | 47,434 | | | | | | 44,477 | | | | | | 47,384 | | | | | | 44,756 | | | | | | 46,935 | | | | | | 45,135 | | | | | | 44,218 | | |
Selling and marketing
|
| | | | 35,886 | | | | | | 39,047 | | | | | | 38,235 | | | | | | 47,467 | | | | | | 35,982 | | | | | | 39,186 | | | | | | 36,721 | | | | | | 43,405 | | | | | | 36,095 | | | | | | 29,632 | | |
General and administrative
|
| | | | 20,906 | | | | | | 23,414 | | | | | | 22,171 | | | | | | 22,837 | | | | | | 22,804 | | | | | | 23,503 | | | | | | 25,108 | | | | | | 26,165 | | | | | | 26,804 | | | | | | 25,465 | | |
Amortization of purchased intangibles
|
| | | | 2,341 | | | | | | 3,662 | | | | | | 3,958 | | | | | | 4,039 | | | | | | 3,420 | | | | | | 3,432 | | | | | | 3,550 | | | | | | 3,811 | | | | | | 3,436 | | | | | | 3,679 | | |
Total operating expenses
|
| | | | 100,116 | | | | | | 109,945 | | | | | | 107,157 | | | | | | 121,777 | | | | | | 106,682 | | | | | | 113,506 | | | | | | 110,135 | | | | | | 120,316 | | | | | | 111,470 | | | | | | 102,994 | | |
Income from operations
|
| | | | 39,142 | | | | | | 29,228 | | | | | | 31,109 | | | | | | 21,912 | | | | | | 38,290 | | | | | | 19,468 | | | | | | 41,402 | | | | | | 42,705 | | | | | | 45,961 | | | | | | 44,591 | | |
Interest expense, net
|
| | | | (1,839) | | | | | | (2,248) | | | | | | (2,276) | | | | | | (2,402) | | | | | | (2,282) | | | | | | (2,192) | | | | | | (2,029) | | | | | | (1,696) | | | | | | (1,388) | | | | | | (1,128) | | |
Other income (expense), net
|
| | | | (1,244) | | | | | | (245) | | | | | | (477) | | | | | | 2,202 | | | | | | (5,253) | | | | | | 3,506 | | | | | | (12,306) | | | | | | 8,496 | | | | | | (7,390) | | | | | | 405 | | |
Income before income taxes
|
| | | | 36,059 | | | | | | 26,735 | | | | | | 28,356 | | | | | | 21,712 | | | | | | 30,755 | | | | | | 20,782 | | | | | | 27,067 | | | | | | 49,505 | | | | | | 37,183 | | | | | | 43,868 | | |
Provision for income taxes
|
| | | | 4,780 | | | | | | 1,543 | | | | | | 5,052 | | | | | | (40,625) | | | | | | 4,318 | | | | | | 801 | | | | | | 6,640 | | | | | | 11,979 | | | | | | 7,176 | | | | | | 4,264 | | |
Equity in loss of joint venture, net of tax
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,275 | | | | | | 338 | | | | | | 528 | | |
Net income
|
| | | $ | 31,279 | | | | | $ | 25,192 | | | | | $ | 23,304 | | | | | $ | 62,337 | | | | | $ | 26,437 | | | | | $ | 19,981 | | | | | $ | 20,427 | | | | | $ | 36,251 | | | | | $ | 29,669 | | | | | $ | 39,076 | | |
|
| | |
Q1 2018
|
| |
Q2 2018
|
| |
Q3 2018
|
| |
Q4 2018
|
| |
Q1 2019
|
| |
Q2 2019
|
| |
Q3 2019
|
| |
Q4 2019
|
| ||||||||||||||||||||||||
Revenues (Topic 605):(1) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Subscriptions
|
| | | $ | 137,807 | | | | | $ | 139,013 | | | | | $ | 137,881 | | | | | $ | 142,720 | | | | | $ | 146,372 | | | | | $ | 149,360 | | | | | $ | 154,225 | | | | | $ | 163,968 | | |
Perpetual licenses
|
| | | | 14,860 | | | | | | 15,846 | | | | | | 15,443 | | | | | | 14,916 | | | | | | 12,954 | | | | | | 12,857 | | | | | | 13,088 | | | | | | 13,620 | | |
Subscriptions and licenses
|
| | | | 152,667 | | | | | | 154,859 | | | | | | 153,324 | | | | | | 157,636 | | | | | | 159,326 | | | | | | 162,217 | | | | | | 167,313 | | | | | | 177,588 | | |
Services
|
| | | | 16,750 | | | | | | 19,200 | | | | | | 18,160 | | | | | | 19,114 | | | | | | 15,851 | | | | | | 16,963 | | | | | | 16,430 | | | | | | 19,161 | | |
Total revenues
|
| | | $ | 169,417 | | | | | $ | 174,059 | | | | | $ | 171,484 | | | | | $ | 176,750 | | | | | $ | 175,177 | | | | | $ | 179,180 | | | | | $ | 183,743 | | | | | $ | 196,749 | | |
Revenues (Topic 606):(2) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Subscriptions
|
| | | $ | 141,902 | | | | | $ | 133,141 | | | | | $ | 138,194 | | | | | $ | 147,248 | | | | | $ | 152,309 | | | | | $ | 137,838 | | | | | $ | 155,191 | | | | | $ | 162,962 | | |
Perpetual licenses
|
| | | | 12,639 | | | | | | 14,116 | | | | | | 11,682 | | | | | | 18,916 | | | | | | 9,409 | | | | | | 15,059 | | | | | | 13,787 | | | | | | 21,438 | | |
Subscriptions and licenses
|
| | | | 154,541 | | | | | | 147,257 | | | | | | 149,876 | | | | | | 166,164 | | | | | | 161,718 | | | | | | 152,897 | | | | | | 168,978 | | | | | | 184,400 | | |
Services
|
| | | | 16,750 | | | | | | 19,200 | | | | | | 18,160 | | | | | | 19,114 | | | | | | 15,821 | | | | | | 16,708 | | | | | | 17,610 | | | | | | 18,522 | | |
Total revenues
|
| | | $ | 171,291 | | | | | $ | 166,457 | | | | | $ | 168,036 | | | | | $ | 185,278 | | | | | $ | 177,539 | | | | | $ | 169,605 | | | | | $ | 186,588 | | | | | $ | 202,922 | | |
| | |
Three Months Ended March 31, 2018
|
| |||||||||||||||
| | |
As reported
Topic 605 |
| |
Adjustments
|
| |
Topic 606
|
| |||||||||
Subscriptions
|
| | | $ | 137,807 | | | | | $ | 4,095 | | | | | $ | 141,902 | | |
Perpetual licenses
|
| | | | 14,860 | | | | | | (2,221) | | | | | | 12,639 | | |
| | |
Three Months Ended June 30, 2018
|
| |||||||||||||||
| | |
As reported
Topic 605 |
| |
Adjustments
|
| |
Topic 606
|
| |||||||||
Subscriptions
|
| | | $ | 139,013 | | | | | $ | (5,872) | | | | | $ | 133,141 | | |
Perpetual licenses
|
| | | | 15,846 | | | | | | (1,730) | | | | | | 14,116 | | |
| | |
Three Months Ended September 30, 2018
|
| |||||||||||||||
| | |
As reported
Topic 605 |
| |
Adjustments
|
| |
Topic 606
|
| |||||||||
Subscriptions
|
| | | $ | 137,881 | | | | | $ | 313 | | | | | $ | 138,194 | | |
Perpetual licenses
|
| | | | 15,443 | | | | | | (3,761) | | | | | | 11,682 | | |
| | |
Three Months Ended December 31, 2018
|
| |||||||||||||||
| | |
As reported
Topic 605 |
| |
Adjustments
|
| |
Topic 606
|
| |||||||||
Subscriptions
|
| | | $ | 142,720 | | | | | $ | 4,528 | | | | | $ | 147,248 | | |
Perpetual licenses
|
| | | | 14,916 | | | | | | 4,000 | | | | | | 18,916 | | |
| | |
December 31,
|
| |
June 30,
2020 |
| ||||||||||||
| | |
2018
|
| |
2019
|
| ||||||||||||
Cash and cash equivalents: | | | | | | | | | | | | | | | | | | | |
Held domestically
|
| | | $ | 3,788 | | | | | $ | 2,291 | | | | | $ | 34,653 | | |
Held by foreign subsidiaries
|
| | | | 77,395 | | | | | | 118,810 | | | | | | 90,863 | | |
Total cash and cash equivalents
|
| | | $ | 81,183 | | | | | $ | 121,101 | | | | | $ | 125,516 | | |
| | |
Six Months Ended
June 30, |
| |||||||||
| | |
2019
|
| |
2020
|
| ||||||
Net Cash Provided By (Used In): | | | | | | | | | | | | | |
Operating activities
|
| | | $ | 82,758 | | | | | $ | 136,182 | | |
Investing activities
|
| | | $ | (18,157) | | | | | $ | (78,979) | | |
Financing activities
|
| | | $ | (42,004) | | | | | $ | (52,556) | | |
| | |
Year Ended December 31,
|
| |||||||||
| | |
2018
|
| |
2019
|
| ||||||
Net Cash Provided By (Used In): | | | | | | | | | | | | | |
Operating activities
|
| | | $ | 161,465 | | | | | $ | 170,773 | | |
Investing activities
|
| | | | (154,757) | | | | | | (53,693) | | |
Financing activities
|
| | | | (58,799) | | | | | | (77,048) | | |
| | |
Payments Due By Period
|
| |||||||||||||||||||||||||||
| | |
Total
|
| |
Within
1 Year |
| |
1 – 3 Years
|
| |
3 – 5 Years
|
| |
After
5 Years |
| |||||||||||||||
Long-term debt(1)
|
| | | $ | 233,750 | | | | | $ | — | | | | | $ | 233,750 | | | | | $ | — | | | | | $ | — | | |
Interest on long-term debt(1)
|
| | | | 24,066 | | | | | | 8,111 | | | | | | 15,955 | | | | | | — | | | | | | — | | |
Operating lease obligations(2)
|
| | | | 52,016 | | | | | | 15,886 | | | | | | 23,571 | | | | | | 9,788 | | | | | | 2,771 | | |
Deferred compensation obligations(3)
|
| | | | 2,544 | | | | | | 153 | | | | | | 358 | | | | | | 438 | | | | | | 1,595 | | |
Contingent obligations(4)
|
| | | | 6,599 | | | | | | 5,100 | | | | | | 1,499 | | | | | | — | | | | | | — | | |
Non-contingent obligations(5)
|
| | | | 900 | | | | | | 900 | | | | | | — | | | | | | — | | | | | | — | | |
Total contractual obligations
|
| | | $ | 319,875 | | | | | $ | 30,150 | | | | | $ | 275,133 | | | | | $ | 10,226 | | | | | $ | 4,366 | | |
Grant Date
|
| |
Number of Shares
Underlying Options |
| |
Exercise Price
|
| |
Fair Value per Share of
Common Stock |
| |||||||||
March 2018
|
| | | | 20,000 | | | | | $ | 6.805 | | | | | $ | 6.805 | | |
May 2018
|
| | | | 5,096,000 | | | | | | 6.805 | | | | | | 6.805 | | |
September 2018
|
| | | | 10,000 | | | | | | 8.670 | | | | | | 8.670 | | |
March 2019
|
| | | | 4,816,000 | | | | | | 7.240 | | | | | | 7.240 | | |
May 2019
|
| | | | 10,000 | | | | | | 7.240 | | | | | | 7.240 | | |
March 2020
|
| | | | 10,000 | | | | | | 10.840 | | | | | | 10.840 | | |
Sector
|
| |
Roads
|
| |
Electricity
|
| |
Rail
|
| |
Telecoms
|
| |
Water
|
| |
Airports
|
| |
Ports
|
| |||||||||||||||||||||
2016-2040 Spending as Approximate Proportion
of Global GDP |
| | | | 1.0% | | | | | | 1.0% | | | | | | 0.4% | | | | | | 0.3% | | | | | | 0.2% | | | | | | 0.1% | | | | | | 0.1% | | |
Name
|
| |
Age
|
| |
Position
|
|
Gregory S. Bentley | | |
65
|
| | Chairman, Chief Executive Officer and President | |
Keith A. Bentley | | |
62
|
| | Chief Technology Officer and Director | |
Barry J. Bentley, Ph.D.(1) | | |
64
|
| | Director | |
Raymond B. Bentley | | |
60
|
| | Executive Vice President and Director | |
Kirk B. Griswold(1) | | |
58
|
| | Director | |
Brian F. Hughes(1) | | |
61
|
| | Director | |
Janet B. Haugen(2) | | |
61
|
| | Director Nominee | |
David J. Hollister | | |
55
|
| |
Chief Financial Officer and Chief Operations Advancement Officer
|
|
David R. Shaman | | |
54
|
| | Chief Legal Officer and Secretary | |
Name and Principal Position
|
| |
Year
|
| |
Salary
($)(1) |
| |
Bonus
($) |
| |
Non-equity
Incentive Plan Compensation ($)(3) |
| |
All Other
Compensation ($)(4) |
| |
Total
($) |
| ||||||||||||||||||
Gregory S. Bentley
|
| | | | 2019 | | | | | | 200,000 | | | | | | — | | | | | | 12,130,273 | | | | | | 23,842 | | | | | | 12,354,115 | | |
Chairman, Chief Executive Officer and President
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Keith A. Bentley
|
| | | | 2019 | | | | | | 200,000 | | | | | | — | | | | | | 7,077,226 | | | | | | 21,972 | | | | | | 7,299,198 | | |
Chief Technology Officer and Director
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
David J. Hollister
|
| | | | 2019 | | | | | | 200,000 | | | | | | 1,000(2) | | | | | | 4,045,398 | | | | | | 46,180 | | | | | | 4,292,578 | | |
Chief Financial Officer and Chief Operations Advancement Officer
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name
|
| |
Outstanding
Phantom Shares |
| |||
Gregory S. Bentley
|
| | | | 3,240,932 | | |
Keith A. Bentley
|
| | | | 2,917,970 | | |
David J. Hollister
|
| | | | 3,542,184 | | |
Name
|
| |
Fees Earned
or Paid in Cash ($) |
| |
Stock
Awards ($)(2) |
| |
Option
Awards ($)(3) |
| |
Total
($) |
| ||||||||||||
Kirk Griswold
|
| | | | 15,000(1) | | | | | | 53,358 | | | | | | 16,500 | | | | | | 84,858 | | |
Name
|
| |
Outstanding
at Fiscal Year End(1) |
| |||
Kirk Griswold
|
| | | | 60,000 | | |
| | |
Common stock
beneficially owned before the offering |
| |
% of total
voting power before the offering(1) |
| |
Number
of shares offered |
| |
Common stock
beneficially owned after the offering |
| |
% of total
voting power after the offering(1) |
| |||||||||||||||||||||||||||||||||||||||||||||||||||
| | |
Class A
|
| |
Class B
|
| |
Class A
|
| |
Class B
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name of Beneficial Owner
|
| |
Number
|
| |
%
|
| |
Number
|
| |
%
|
| |
Number
|
| |
%
|
| |
Number
|
| |
%
|
| ||||||||||||||||||||||||||||||||||||||||||
Executive Officers, Directors and Director
Nominee: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Keith A. Bentley(2)(9)
|
| | | | 3,340,793 | | | | | | 28.8% | | | | | | 15,779,747 | | | | | | 6.4% | | | | | | 19.3% | | | | | | — | | | | | | 3,340,793 | | | | | | 28.8% | | | | | | 15,779,747 | | | | | | 6.3% | | | | | | 19.2% | | |
Barry J. Bentley(3)(9)
|
| | | | 3,340,793 | | | | | | 28.8% | | | | | | 13,575,643 | | | | | | 5.5% | | | | | | 18.9% | | | | | | — | | | | | | 3,340,793 | | | | | | 28.8% | | | | | | 13,575,643 | | | | | | 5.4% | | | | | | 18.8% | | |
Gregory S. Bentley(4)(9)
|
| | | | 1,926,509 | | | | | | 16.6% | | | | | | 6,480,738 | | | | | | 2.6% | | | | | | 10.7% | | | | | | — | | | | | | 1,926,509 | | | | | | 16.6% | | | | | | 6,480,738 | | | | | | 2.6% | | | | | | 10.6% | | |
Raymond B. Bentley(5)(9)
|
| | | | 1,655,397 | | | | | | 14.3% | | | | | | 18,811,889 | | | | | | 7.6% | | | | | | 11.4% | | | | | | — | | | | | | 1,655,397 | | | | | | 14.3% | | | | | | 18,811,889 | | | | | | 7.5% | | | | | | 11.4% | | |
Kirk B. Griswold(6)
|
| | | | — | | | | | | — | | | | | | 477,849 | | | | | | * | | | | | | * | | | | | | 21,225 | | | | | | — | | | | | | — | | | | | | 456,624 | | | | | | * | | | | | | * | | |
Brian F. Hughes
|
| | | | — | | | | | | — | | | | | | 11,531 | | | | | | * | | | | | | * | | | | | | — | | | | | | — | | | | | | — | | | | | | 11,531 | | | | | | * | | | | | | * | | |
Janet B. Haugen
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
David J. Hollister(7)
|
| | | | — | | | | | | — | | | | | | 1,491,112 | | | | | | * | | | | | | * | | | | | | 382,048 | | | | | | — | | | | | | — | | | | | | 1,109,064 | | | | | | * | | | | | | * | | |
All executive officers, directors and director nominee as a group (9 persons)(8)
|
| | | | 10,263,492 | | | | | | 88.5% | | | | | | 57,267,763 | | | | | | 23.1% | | | | | | 60.7% | | | | | | 403,273 | | | | | | 10,263,492 | | | | | | 88.5% | | | | | | 56,864,490 | | | | | | 22.9% | | | | | | 60.5% | | |
5% Stockholders: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Richard P. Bentley(9)
|
| | | | 1,000,000 | | | | | | 8.6% | | | | | | 3,000,000 | | | | | | 1.2% | | | | | | 5.5% | | | | | | 848,996 | | | | | | 1,000,000 | | | | | | 8.6% | | | | | | 2,151,004 | | | | | | * | | | | | | 5.3% | | |
Siemens International Holding B.V.(10)
|
| | | | — | | | | | | — | | | | | | 35,569,645 | | | | | | 14.4% | | | | | | 6.1% | | | | | | — | | | | | | — | | | | | | — | | | | | | 35,569,645 | | | | | | 14.2% | | | | | | 6.1% | | |
Selling Stockholders or Groups of Selling
Stockholders(11): |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Stockholders selling in excess of 100,000 shares of Class B common stock:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Jean-Baptiste Monnier(12)(15)
|
| | | | 22,500 | | | | | | * | | | | | | 1,874,097 | | | | | | * | | | | | | * | | | | | | 1,521,115 | | | | | | 22,500 | | | | | | * | | | | | | 352,982 | | | | | | * | | | | | | * | | |
Alton B. Cleveland, Jr.(13)
|
| | | | — | | | | | | — | | | | | | 756,138 | | | | | | * | | | | | | * | | | | | | 628,257 | | | | | | — | | | | | | — | | | | | | 127,881 | | | | | | * | | | | | | * | | |
The Sabina B. Singh M17 Trust
|
| | | | — | | | | | | — | | | | | | 552,958 | | | | | | * | | | | | | * | | | | | | 469,459 | | | | | | — | | | | | | — | | | | | | 83,499 | | | | | | * | | | | | | * | | |
The Sabina B. Singh 2020 GRAT
|
| | | | — | | | | | | — | | | | | | 380,000 | | | | | | * | | | | | | * | | | | | | 322,618 | | | | | | — | | | | | | — | | | | | | 57,382 | | | | | | * | | | | | | * | | |
The Singh 2019 Grantor Retained Annuity Trust
|
| | | | — | | | | | | — | | | | | | 656,720 | | | | | | * | | | | | | * | | | | | | 283,629 | | | | | | — | | | | | | — | | | | | | 373,091 | | | | | | * | | | | | | * | | |
Fidelity Investments Charitable Gift Fund
|
| | | | — | | | | | | — | | | | | | 292,340 | | | | | | * | | | | | | * | | | | | | 248,195 | | | | | | — | | | | | | — | | | | | | 44,145 | | | | | | * | | | | | | * | | |
Robert W. Mitchell Jr. Profit Sharing Plan
|
| | | | — | | | | | | — | | | | | | 238,372 | | | | | | * | | | | | | * | | | | | | 202,377 | | | | | | — | | | | | | — | | | | | | 35,995 | | | | | | * | | | | | | * | | |
Malcolm Walter(14)
|
| | | | — | | | | | | — | | | | | | 504,250 | | | | | | * | | | | | | * | | | | | | 232,687 | | | | | | — | | | | | | — | | | | | | 271,563 | | | | | | * | | | | | | * | | |
Stylianos Camateros
|
| | | | — | | | | | | — | | | | | | 245,971 | | | | | | * | | | | | | * | | | | | | 215,470 | | | | | | — | | | | | | — | | | | | | 30,501 | | | | | | * | | | | | | * | | |
Suzan E. Willcox(15)
|
| | | | 145,241 | | | | | | 1.3% | | | | | | 2,182,040 | | | | | | * | | | | | | 1.1% | | | | | | 192,912 | | | | | | 145,241 | | | | | | 1.3% | | | | | | 1,989,128 | | | | | | * | | | | | | 1.1% | | |
George J. Dulchinos(15)(16)
|
| | | | 25,000 | | | | | | * | | | | | | 355,364 | | | | | | * | | | | | | * | | | | | | 169,799 | | | | | | 25,000 | | | | | | * | | | | | | 185,565 | | | | | | * | | | | | | * | | |
William R. Whitesell(17)
|
| | | | — | | | | | | — | | | | | | 266,261 | | | | | | * | | | | | | * | | | | | | 166,770 | | | | | | — | | | | | | — | | | | | | 99,491 | | | | | | * | | | | | | * | | |
Alan P. Kiraly(18)
|
| | | | — | | | | | | — | | | | | | 192,016 | | | | | | * | | | | | | * | | | | | | 161,035 | | | | | | — | | | | | | — | | | | | | 30,981 | | | | | | * | | | | | | * | | |
John Riddle(19)
|
| | | | — | | | | | | — | | | | | | 196,678 | | | | | | * | | | | | | * | | | | | | 119,668 | | | | | | — | | | | | | — | | | | | | 77,010 | | | | | | * | | | | | | * | | |
The Bachow Family Trust dated
11/16/2012 |
| | | | — | | | | | | — | | | | | | 350,025 | | | | | | * | | | | | | * | | | | | | 106,124 | | | | | | — | | | | | | — | | | | | | 243,901 | | | | | | * | | | | | | * | | |
Stockholders selling fewer than 100,000
shares of Class B common stock, each of whom hold less than 0.3% of our Class B common stock: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. colleagues (198
stockholders)(11)(15)(20) |
| | | | 85,024 | | | | | | * | | | | | | 11,984,202 | | | | | | 4.8% | | | | | | 2.5% | | | | | | 2,382,874 | | | | | | 85,024 | | | | | | * | | | | | | 9,601,328 | | | | | | 3.3% | | | | | | 2.1% | | |
Non-U.S. colleagues (194 stockholders)(11)(15)(21)
|
| | | | 30,500 | | | | | | * | | | | | | 3,127,019 | | | | | | 1.3% | | | | | | * | | | | | | 1,130,386 | | | | | | 30,500 | | | | | | * | | | | | | 1,996,633 | | | | | | * | | | | | | * | | |
U.S. non-colleague selling stockholders (53 stockholders)(11)(22)
|
| | | | — | | | | | | — | | | | | | 4,383,144 | | | | | | 1.8% | | | | | | * | | | | | | 737,270 | | | | | | — | | | | | | — | | | | | | 3,645,874 | | | | | | 1.2% | | | | | | * | | |
Non-U.S. non-colleague selling stockholders (22 stockholders)
|
| | | | — | | | | | | — | | | | | | 1,652,651 | | | | | | * | | | | | | * | | | | | | 207,086 | | | | | | — | | | | | | — | | | | | | 1,445,565 | | | | | | * | | | | | | * | | |
Underwriters
|
| |
Number
of Shares |
|
Goldman Sachs & Co. LLC
|
| | | |
BofA Securities, Inc.
|
| | | |
RBC Capital Markets, LLC
|
| | | |
Robert W. Baird & Co. Incorporated
|
| | | |
KeyBanc Capital Markets Inc.
|
| | | |
Mizuho Securities USA LLC
|
| | | |
Total | | | | |
| | |
No Exercise
|
| |
Full Exercise
|
| ||||||
Per share
|
| | | $ | | | | | $ | | | ||
Total
|
| | | $ | | | | | $ | | |
Audited Financial Statements:
|
| |
Page No.
|
| |||
| | | | F-2 | | | |
| | | | F-3 | | | |
| | | | F-4 | | | |
| | | | F-5 | | | |
| | | | F-6 | | | |
| | | | F-7 | | | |
| | | | F-8 | | |
Unaudited Interim Financial Statements:
|
| |
Page No.
|
| |||
| | | | F-45 | | | |
| | | | F-46 | | | |
| | | | F-47 | | | |
| | | | F-49 | | | |
| | | | F-50 | | | |
| | | | F-51 | | |
| | |
December 31,
|
| |||||||||
| | |
2018
|
| |
2019
|
| ||||||
Assets
|
| | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 81,183 | | | | | $ | 121,101 | | |
Accounts receivable, net of allowances of $7,611 and $7,274, respectively
|
| | | | 184,565 | | | | | | 204,501 | | |
Prepaid income taxes
|
| | | | 5,085 | | | | | | 4,543 | | |
Prepaid and other current assets
|
| | | | 12,390 | | | | | | 23,413 | | |
Total current assets
|
| | | | 283,223 | | | | | | 353,558 | | |
Property and equipment, net
|
| | | | 29,393 | | | | | | 29,632 | | |
Intangible assets, net
|
| | | | 54,001 | | | | | | 46,313 | | |
Goodwill
|
| | | | 446,318 | | | | | | 480,065 | | |
Investment in joint venture
|
| | | | — | | | | | | 1,725 | | |
Deferred income taxes
|
| | | | 81,066 | | | | | | 51,068 | | |
Other assets
|
| | | | 29,595 | | | | | | 32,238 | | |
Total assets
|
| | | $ | 923,596 | | | | | $ | 994,599 | | |
Liabilities and Stockholders’ Equity
|
| | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 8,567 | | | | | $ | 17,669 | | |
Accruals and other current liabilities
|
| | | | 136,699 | | | | | | 167,517 | | |
Deferred revenues
|
| | | | 287,682 | | | | | | 204,991 | | |
Income taxes payable
|
| | | | 2,794 | | | | | | 2,236 | | |
Total current liabilities
|
| | | | 435,742 | | | | | | 392,413 | | |
Long-term debt
|
| | | | 258,750 | | | | | | 233,750 | | |
Deferred revenues
|
| | | | 49,769 | | | | | | 8,154 | | |
Deferred income taxes
|
| | | | 10,470 | | | | | | 8,260 | | |
Income taxes payable
|
| | | | 12,904 | | | | | | 8,140 | | |
Other liabilities
|
| | | | 8,530 | | | | | | 9,263 | | |
Total liabilities
|
| | | | 776,165 | | | | | | 659,980 | | |
Commitments and contingencies (Note 17) | | | | | | | | | | | | | |
Stockholders’ equity: | | | | | | | | | | | | | |
Class A Common Stock, $0.01 par value, authorized 320,000,000 shares; issued
11,601,757 shares as of December 31, 2018 and 2019 and Class B Common Stock, $0.01 par value, authorized 600,000,000 shares; issued 238,681,756 and 243,241,192 shares as of December 31, 2018 and 2019, respectively |
| | | | 2,502 | | | | | | 2,548 | | |
Additional paid-in capital
|
| | | | 392,896 | | | | | | 408,667 | | |
Accumulated other comprehensive loss
|
| | | | (29,414) | | | | | | (23,927) | | |
Accumulated deficit
|
| | | | (218,553) | | | | | | (52,669) | | |
Total stockholders’ equity
|
| | | | 147,431 | | | | | | 334,619 | | |
Total liabilities and stockholders’ equity
|
| | | $ | 923,596 | | | | | $ | 994,599 | | |
| | |
Year Ended December 31,
|
| |||||||||
| | |
2018
|
| |
2019
|
| ||||||
Revenues: | | | | | | | | | | | | | |
Subscriptions
|
| | | $ | 557,421 | | | | | $ | 608,300 | | |
Perpetual licenses
|
| | | | 61,065 | | | | | | 59,693 | | |
Subscriptions and licenses
|
| | | | 618,486 | | | | | | 667,993 | | |
Services
|
| | | | 73,224 | | | | | | 68,661 | | |
Total revenues
|
| | | | 691,710 | | | | | | 736,654 | | |
Cost of revenues: | | | | | | | | | | | | | |
Cost of subscriptions and licenses
|
| | | | 55,113 | | | | | | 71,578 | | |
Cost of services
|
| | | | 76,211 | | | | | | 72,572 | | |
Total cost of revenues
|
| | | | 131,324 | | | | | | 144,150 | | |
Gross profit
|
| | | | 560,386 | | | | | | 592,504 | | |
Operating expenses: | | | | | | | | | | | | | |
Research and development
|
| | | | 175,032 | | | | | | 183,552 | | |
Selling and marketing
|
| | | | 160,635 | | | | | | 155,294 | | |
General and administrative
|
| | | | 89,328 | | | | | | 97,580 | | |
Amortization of purchased intangibles
|
| | | | 14,000 | | | | | | 14,213 | | |
Total operating expenses
|
| | | | 438,995 | | | | | | 450,639 | | |
Income from operations
|
| | | | 121,391 | | | | | | 141,865 | | |
Interest expense, net
|
| | | | (8,765) | | | | | | (8,199) | | |
Other income (expense), net
|
| | | | 236 | | | | | | (5,557) | | |
Income before income taxes
|
| | | | 112,862 | | | | | | 128,109 | | |
Provision for income taxes
|
| | | | (29,250) | | | | | | 23,738 | | |
Equity in loss of joint venture, net of tax
|
| | | | — | | | | | | 1,275 | | |
Net income
|
| | | | 142,112 | | | | | | 103,096 | | |
Less: Net income attributable to participating securities
|
| | | | (4) | | | | | | (8) | | |
Net income attributable to Class A and Class B common stockholders
|
| | | $ | 142,108 | | | | | $ | 103,088 | | |
Per share information: | | | | | | | | | | | | | |
Net income per share, basic
|
| | | $ | 0.50 | | | | | $ | 0.36 | | |
Net income per share, diluted
|
| | | $ | 0.49 | | | | | $ | 0.35 | | |
Weighted average shares outstanding, basic
|
| | | | 285,805,096 | | | | | | 284,625,642 | | |
Weighted average shares outstanding, diluted
|
| | | | 292,624,496 | | | | | | 293,796,707 | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2018
|
| |
2019
|
| ||||||
Net income
|
| | | $ | 142,112 | | | | | $ | 103,096 | | |
Other comprehensive income (loss), net of taxes: | | | | | | | | | | | | | |
Foreign currency translation adjustments
|
| | | | (11,020) | | | | | | 5,959 | | |
Actuarial gain (loss) on retirement plan, net of tax effect of ($62) and $203
|
| | | | 146 | | | | | | (472) | | |
Total other comprehensive income (loss), net of taxes
|
| | | | (10,874) | | | | | | 5,487 | | |
Comprehensive income
|
| | | $ | 131,238 | | | | | $ | 108,583 | | |
| | |
Stockholders’ Equity
|
| |||||||||||||||||||||||||||||||||
| | |
Class A and Class B
Common Stock |
| |
Additional
paid-in capital |
| |
Accumulated
other comprehensive loss |
| |
Accumulated
deficit |
| |
Total
stockholders’ equity |
| |||||||||||||||||||||
| | |
Shares
|
| |
Par
value |
| ||||||||||||||||||||||||||||||
Balance as of December 31, 2017
|
| | | | 247,465,176 | | | | | $ | 2,474 | | | | | $ | 377,809 | | | | | $ | (18,540) | | | | | $ | (309,576) | | | | | $ | 52,167 | | |
Net income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 142,112 | | | | | | 142,112 | | |
Other comprehensive income (loss)
|
| | | | — | | | | | | — | | | | | | — | | | | | | (10,874) | | | | | | — | | | | | | (10,874) | | |
Dividends declared
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (20,005) | | | | | | (20,005) | | |
Profit sharing plan shares, net
|
| | | | (465,979) | | | | | | (5) | | | | | | — | | | | | | — | | | | | | (3,382) | | | | | | (3,387) | | |
Shares issued in connection with deferred compensation plan
|
| | | | 2,332,585 | | | | | | 23 | | | | | | — | | | | | | — | | | | | | (6,884) | | | | | | (6,861) | | |
Deferred compensation plan voluntary contributions and vesting of awards
|
| | | | — | | | | | | — | | | | | | 4,504 | | | | | | — | | | | | | — | | | | | | 4,504 | | |
Payment of shareholder Put and Call
rights |
| | | | (1,131,928) | | | | | | (11) | | | | | | — | | | | | | — | | | | | | (8,560) | | | | | | (8,571) | | |
Common Stock Purchase Agreement, net
|
| | | | (1,281,633) | | | | | | (13) | | | | | | 13 | | | | | | — | | | | | | (9,673) | | | | | | (9,673) | | |
Stock option exercises, net
|
| | | | 2,812,998 | | | | | | 28 | | | | | | 2,151 | | | | | | — | | | | | | (1,569) | | | | | | 610 | | |
Stock-based compensation expense
|
| | | | — | | | | | | — | | | | | | 7,882 | | | | | | — | | | | | | — | | | | | | 7,882 | | |
Shares related to restricted stock, net
|
| | | | 546,783 | | | | | | 6 | | | | | | 494 | | | | | | — | | | | | | (637) | | | | | | (137) | | |
Other
|
| | | | 5,511 | | | | | | — | | | | | | 43 | | | | | | — | | | | | | — | | | | | | 43 | | |
Cumulative effect adjustment on deferred tax expense
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (379) | | | | | | (379) | | |
Balance as of December 31, 2018
|
| | | | 250,283,513 | | | | | | 2,502 | | | | | | 392,896 | | | | | | (29,414) | | | | | | (218,553) | | | | | | 147,431 | | |
Cumulative effect of accounting changes
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 107,822 | | | | | | 107,822 | | |
Net income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 103,096 | | | | | | 103,096 | | |
Other comprehensive income (loss)
|
| | | | — | | | | | | — | | | | | | — | | | | | | 5,487 | | | | | | — | | | | | | 5,487 | | |
Dividends declared
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (25,390) | | | | | | (25,390) | | |
Profit sharing plan shares, net
|
| | | | (318,203) | | | | | | (3) | | | | | | — | | | | | | — | | | | | | (2,414) | | | | | | (2,417) | | |
Shares issued in connection with deferred compensation plan
|
| | | | 2,322,983 | | | | | | 23 | | | | | | — | | | | | | — | | | | | | (5,632) | | | | | | (5,609) | | |
Deferred compensation plan voluntary contributions and vesting of awards
|
| | | | — | | | | | | — | | | | | | 3,586 | | | | | | — | | | | | | — | | | | | | 3,586 | | |
Payment of shareholder Put and Call
rights |
| | | | (1,126,747) | | | | | | (11) | | | | | | — | | | | | | — | | | | | | (8,827) | | | | | | (8,838) | | |
Common Stock Purchase Agreement, net
|
| | | | 64,509 | | | | | | — | | | | | | 466 | | | | | | — | | | | | | (48) | | | | | | 418 | | |
Stock option exercises, net
|
| | | | 3,214,542 | | | | | | 33 | | | | | | 3,579 | | | | | | — | | | | | | (2,309) | | | | | | 1,303 | | |
Stock-based compensation expense
|
| | | | — | | | | | | — | | | | | | 8,091 | | | | | | — | | | | | | — | | | | | | 8,091 | | |
Shares related to restricted stock, net
|
| | | | 395,336 | | | | | | 4 | | | | | | (4) | | | | | | — | | | | | | (399) | | | | | | (399) | | |
Other
|
| | | | 7,016 | | | | | | — | | | | | | 53 | | | | | | — | | | | | | (15) | | | | | | 38 | | |
Balance as of December 31, 2019
|
| | | | 254,842,949 | | | | | $ | 2,548 | | | | | $ | 408,667 | | | | | $ | (23,927) | | | | | $ | (52,669) | | | | | $ | 334,619 | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2018
|
| |
2019
|
| ||||||
Cash flows from operating activities: | | | | | | | | | | | | | |
Net income
|
| | | $ | 142,112 | | | | | $ | 103,096 | | |
Adjustments to reconcile net income to net cash provided by operating activities:
|
| | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 29,200 | | | | | | 32,160 | | |
Provision for accounts receivable allowance
|
| | | | 2,393 | | | | | | 862 | | |
Deferred income taxes
|
| | | | (60,060) | | | | | | 732 | | |
Deferred compensation plan activity
|
| | | | 4,323 | | | | | | 3,994 | | |
Stock-based compensation expense
|
| | | | 7,882 | | | | | | 8,091 | | |
Amortization of deferred debt issuance costs
|
| | | | 552 | | | | | | 553 | | |
Decrease in fair value of call options
|
| | | | 487 | | | | | | 159 | | |
Change in fair value of contingent consideration
|
| | | | 272 | | | | | | 62 | | |
Foreign currency remeasurement loss (gain)
|
| | | | (1,645) | | | | | | 5,311 | | |
Equity in loss of joint venture, net of tax
|
| | | | — | | | | | | 1,275 | | |
Changes in assets and liabilities, net of effect from acquisitions:
|
| | | | | | | | | | | | |
Accounts receivable, net
|
| | | | (41,787) | | | | | | (21,152) | | |
Prepaid and other assets
|
| | | | 2,831 | | | | | | (668) | | |
Accounts payable, accruals and other liabilities
|
| | | | 37,249 | | | | | | 41,880 | | |
Deferred revenues
|
| | | | 21,247 | | | | | | (268) | | |
Income taxes payable
|
| | | | 16,409 | | | | | | (5,314) | | |
Net cash provided by operating activities
|
| | | | 161,465 | | | | | | 170,773 | | |
Cash flows from investing activities: | | | | | | | | | | | | | |
Purchases of property and equipment and investment in capitalized software
|
| | | | (18,616) | | | | | | (15,804) | | |
Capitalization of costs to translate software products into foreign languages
|
| | | | (877) | | | | | | (835) | | |
Acquisitions, net of cash acquired of $7,774 and $2,523, respectively
|
| | | | (135,264) | | | | | | (34,054) | | |
Investment in joint venture
|
| | | | — | | | | | | (3,000) | | |
Net cash used in investing activities
|
| | | | (154,757) | | | | | | (53,693) | | |
Cash flows from financing activities: | | | | | | | | | | | | | |
Proceeds from credit facilities
|
| | | | 148,250 | | | | | | 191,250 | | |
Payments of credit facilities
|
| | | | (159,500) | | | | | | (216,250) | | |
Payments of acquisition debt and other consideration
|
| | | | 9 | | | | | | (11,029) | | |
Payments of dividends
|
| | | | (20,059) | | | | | | (24,989) | | |
Payments for shares acquired including shares withheld for taxes
|
| | | | (46,451) | | | | | | (24,166) | | |
Proceeds from Common Stock Purchase Agreement
|
| | | | 16,220 | | | | | | 4,510 | | |
Net proceeds from exercise of common stock options and restricted stock
|
| | | | 2,732 | | | | | | 3,626 | | |
Net cash used in financing activities
|
| | | | (58,799) | | | | | | (77,048) | | |
Effect of exchange rate changes on cash and cash equivalents
|
| | | | (1,193) | | | | | | (114) | | |
Increase (decrease) in cash and cash equivalents
|
| | | | (53,284) | | | | | | 39,918 | | |
Cash and cash equivalents, beginning of year
|
| | | | 134,467 | | | | | | 81,183 | | |
Cash and cash equivalents, end of year
|
| | | $ | 81,183 | | | | | $ | 121,101 | | |
Supplemental information: | | | | | | | | | | | | | |
Cash paid for income taxes
|
| | | $ | 25,782 | | | | | $ | 27,907 | | |
Income tax refunds
|
| | | | 7,285 | | | | | | 1,752 | | |
Interest paid
|
| | | | 8,863 | | | | | | 9,221 | | |
Non-cash contingent acquisition consideration
|
| | | | 13,456 | | | | | | 4,498 | | |
Non-cash deferred acquisition consideration
|
| | | | 690 | | | | | | — | | |
| | |
Useful life
|
|
Building and improvements
|
| |
25 years
|
|
Computer equipment and software
|
| |
3 years
|
|
Furniture, fixtures, and equipment
|
| |
5 years
|
|
Aircraft
|
| |
6 years
|
|
Automobiles
|
| |
3 years
|
|
| | |
Year Ended
December 31, |
| |||||||||
| | |
2018
|
| |
2019
|
| ||||||
Balance, beginning of year
|
| | | $ | 5,669 | | | | | $ | 7,611 | | |
Allowances (recoveries) recorded
|
| | | | 1,620 | | | | | | (452) | | |
Foreign currency translation adjustments
|
| | | | 322 | | | | | | 115 | | |
Balance, end of year
|
| | | $ | 7,611 | | | | | $ | 7,274 | | |
| | |
As of December 31,
|
| |||||||||||||||||||||
| | |
2018
|
| |
2019
|
| ||||||||||||||||||
| | |
As reported
Topic 605 |
| |
As adjusted
Topic 605 |
| |
Impact from
the adoption of Topic 606 and Topic 340-40 |
| |
As reported
Topic 606 |
| ||||||||||||
Assets
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Current assets | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 81,183 | | | | | $ | 121,101 | | | | | $ | — | | | | | $ | 121,101 | | |
Accounts receivable, net
|
| | | | 184,565 | | | | | | 204,268 | | | | | | 233 | | | | | | 204,501 | | |
Prepaid income taxes
|
| | | | 5,085 | | | | | | 6,732 | | | | | | (2,189) | | | | | | 4,543 | | |
Prepaid and other current assets(1)
|
| | | | 12,390 | | | | | | 20,080 | | | | | | 3,333 | | | | | | 23,413 | | |
Total current assets
|
| | | | 283,223 | | | | | | 352,181 | | | | | | 1,377 | | | | | | 353,558 | | |
Property and equipment, net
|
| | | | 29,393 | | | | | | 29,632 | | | | | | — | | | | | | 29,632 | | |
Intangible assets, net
|
| | | | 54,001 | | | | | | 46,313 | | | | | | — | | | | | | 46,313 | | |
Goodwill
|
| | | | 446,318 | | | | | | 480,065 | | | | | | — | | | | | | 480,065 | | |
Investment in joint venture
|
| | | | — | | | | | | 1,725 | | | | | | — | | | | | | 1,725 | | |
Deferred income taxes
|
| | | | 81,066 | | | | | | 72,611 | | | | | | (21,543) | | | | | | 51,068 | | |
Other assets(1)
|
| | | | 29,595 | | | | | | 26,517 | | | | | | 5,721 | | | | | | 32,238 | | |
Total assets
|
| | | $ | 923,596 | | | | | $ | 1,009,044 | | | | | $ | (14,445) | | | | | $ | 994,599 | | |
Liabilities and Stockholders’ Equity
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Current liabilities | | | | | | | | | | | | | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 8,567 | | | | | $ | 17,669 | | | | | $ | — | | | | | $ | 17,669 | | |
Accruals and other current liabilities
|
| | | | 136,699 | | | | | | 167,225 | | | | | | 292 | | | | | | 167,517 | | |
| | |
As of December 31,
|
| |||||||||||||||||||||
| | |
2018
|
| |
2019
|
| ||||||||||||||||||
| | |
As reported
Topic 605 |
| |
As adjusted
Topic 605 |
| |
Impact from
the adoption of Topic 606 and Topic 340-40 |
| |
As reported
Topic 606 |
| ||||||||||||
Deferred revenues
|
| | | | 287,682 | | | | | | 282,070 | | | | | | (77,079) | | | | | | 204,991 | | |
Income taxes payable
|
| | | | 2,794 | | | | | | 1,030 | | | | | | 1,206 | | | | | | 2,236 | | |
Total current liabilities
|
| | | | 435,742 | | | | | | 467,994 | | | | | | (75,581) | | | | | | 392,413 | | |
Long-term debt
|
| | | | 258,750 | | | | | | 233,750 | | | | | | — | | | | | | 233,750 | | |
Deferred revenues
|
| | | | 49,769 | | | | | | 56,121 | | | | | | (47,967) | | | | | | 8,154 | | |
Deferred income taxes
|
| | | | 10,470 | | | | | | 7,627 | | | | | | 633 | | | | | | 8,260 | | |
Income taxes payable
|
| | | | 12,904 | | | | | | 6,321 | | | | | | 1,819 | | | | | | 8,140 | | |
Other liabilities
|
| | | | 8,530 | | | | | | 9,263 | | | | | | — | | | | | | 9,263 | | |
Total liabilities
|
| | | | 776,165 | | | | | | 781,076 | | | | | | (121,096) | | | | | | 659,980 | | |
Stockholders’ equity | | | | | | | | | | | | | | | | | | | | | | | | | |
Common stock
|
| | | | 2,502 | | | | | | 2,548 | | | | | | — | | | | | | 2,548 | | |
Additional paid-in capital
|
| | | | 392,896 | | | | | | 408,667 | | | | | | — | | | | | | 408,667 | | |
Accumulated other comprehensive loss
|
| | | | (29,414) | | | | | | (23,086) | | | | | | (841) | | | | | | (23,927) | | |
Accumulated deficit(2)
|
| | | | (218,553) | | | | | | (160,161) | | | | | | 107,492 | | | | | | (52,669) | | |
Total stockholders’ equity
|
| | | $ | 147,431 | | | | | $ | 227,968 | | | | | $ | 106,651 | | | | | $ | 334,619 | | |
Total liabilities and stockholders’ equity
|
| | | $ | 923,596 | | | | | $ | 1,009,044 | | | | | $ | (14,445) | | | | | $ | 994,599 | | |
|
| | |
Year Ended December 31,
|
| |||||||||||||||||||||
| | |
2018
|
| |
2019
|
| ||||||||||||||||||
| | |
As reported
Topic 605 |
| |
As adjusted
Topic 605 |
| |
Impact from
the adoption of Topics 606 and 340-40 |
| |
As reported
Topic 606 |
| ||||||||||||
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | |
Subscriptions
|
| | | $ | 557,421 | | | | | $ | 613,925 | | | | | $ | (5,625) | | | | | $ | 608,300 | | |
Perpetual licenses
|
| | | | 61,065 | | | | | | 52,519 | | | | | | 7,174 | | | | | | 59,693 | | |
Subscriptions and licenses
|
| | | | 618,486 | | | | | | 666,444 | | | | | | 1,549 | | | | | | 667,993 | | |
Services
|
| | | | 73,224 | | | | | | 68,405 | | | | | | 256 | | | | | | 68,661 | | |
Total revenues
|
| | | | 691,710 | | | | | | 734,849 | | | | | | 1,805 | | | | | | 736,654 | | |
Cost of revenues: | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of subscriptions and licenses
|
| | | | 55,113 | | | | | | 71,439 | | | | | | 139 | | | | | | 71,578 | | |
| | |
Year Ended December 31,
|
| |||||||||||||||||||||
| | |
2018
|
| |
2019
|
| ||||||||||||||||||
| | |
As reported
Topic 605 |
| |
As adjusted
Topic 605 |
| |
Impact from
the adoption of Topics 606 and 340-40 |
| |
As reported
Topic 606 |
| ||||||||||||
Cost of services
|
| | | | 76,211 | | | | | | 72,572 | | | | | | — | | | | | | 72,572 | | |
Total cost of revenues
|
| | | | 131,324 | | | | | | 144,011 | | | | | | 139 | | | | | | 144,150 | | |
Gross profit
|
| | | | 560,386 | | | | | | 590,838 | | | | | | 1,666 | | | | | | 592,504 | | |
Operating expenses:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Research and development
|
| | | | 175,032 | | | | | | 183,552 | | | | | | — | | | | | | 183,552 | | |
Selling and marketing
|
| | | | 160,635 | | | | | | 155,274 | | | | | | 20 | | | | | | 155,294 | | |
General and administrative
|
| | | | 89,328 | | | | | | 97,580 | | | | | | — | | | | | | 97,580 | | |
Amortization of purchased intangibles
|
| | | | 14,000 | | | | | | 14,213 | | | | | | — | | | | | | 14,213 | | |
Total operating expenses
|
| | | | 438,995 | | | | | | 450,619 | | | | | | 20 | | | | | | 450,639 | | |
Income from operations
|
| | | | 121,391 | | | | | | 140,219 | | | | | | 1,646 | | | | | | 141,865 | | |
Interest expense, net
|
| | | | (8,765) | | | | | | (8,199) | | | | | | — | | | | | | (8,199) | | |
Other income (expense), net
|
| | | | 236 | | | | | | (5,557) | | | | | | — | | | | | | (5,557) | | |
Income before income taxes
|
| | | | 112,862 | | | | | | 126,463 | | | | | | 1,646 | | | | | | 128,109 | | |
Provision for income taxes
|
| | | | (29,250) | | | | | | 21,762 | | | | | | 1,976 | | | | | | 23,738 | | |
Equity in loss of joint venture, net of tax
|
| | | | — | | | | | | 1,275 | | | | | | — | | | | | | 1,275 | | |
Net income
|
| | | $ | 142,112 | | | | | $ | 103,426 | | | | | $ | (330) | | | | | $ | 103,096 | | |
|
| | |
January 1,
2019 |
| |
December 31,
2019 |
| ||||||
Contract assets
|
| | | $ | 173 | | | | | $ | 644 | | |
Deferred revenues
|
| | | | 212,529 | | | | | | 213,145 | | |
| | |
Year Ended December 31,
|
| |||||||||||||||
| | |
2018
|
| |
2019
|
| ||||||||||||
| | |
Topic 605
|
| |
Topic 605
|
| |
Topic 606
|
| |||||||||
Revenues: | | | | | | | | | | | | | | | | | | | |
Subscriptions: | | | | | | | | | | | | | | | | | | | |
SELECT subscription revenues
|
| | | $ | 273,745 | | | | | $ | 267,340 | | | | | $ | 267,249 | | |
Enterprise license subscriptions
|
| | | | 182,816 | | | | | | 196,081 | | | | | | 184,833 | | |
Term license subscriptions
|
| | | | 100,860 | | | | | | 150,504 | | | | | | 156,218 | | |
Subscriptions
|
| | | | 557,421 | | | | | | 613,925 | | | | | | 608,300 | | |
| | |
Year Ended December 31,
|
| |||||||||||||||
| | |
2018
|
| |
2019
|
| ||||||||||||
| | |
Topic 605
|
| |
Topic 605
|
| |
Topic 606
|
| |||||||||
Perpetual licenses: | | | | | | | | | | | | | | | | | | | |
Perpetual licenses
|
| | | | 61,065 | | | | | | 52,519 | | | | | | 59,693 | | |
Subscriptions and licenses
|
| | | | 618,486 | | | | | | 666,444 | | | | | | 667,993 | | |
Services: | | | | | | | | | | | | | | | | | | | |
Professional services (recurring)
|
| | | | 25,981 | | | | | | 22,974 | | | | | | 22,797 | | |
Professional services (all other)
|
| | | | 47,243 | | | | | | 45,431 | | | | | | 45,864 | | |
Services
|
| | | | 73,224 | | | | | | 68,405 | | | | | | 68,661 | | |
Total revenues
|
| | | $ | 691,710 | | | | | $ | 734,849 | | | | | $ | 736,654 | | |
|
| | |
Year Ended December 31,
|
| |||||||||||||||
| | |
2018
|
| |
2019
|
| ||||||||||||
| | |
Topic 605
|
| |
Topic 605
|
| |
Topic 606
|
| |||||||||
Revenues: | | | | | | | | | | | | | | | | | | | |
Americas(1) | | | | $ | 328,749 | | | | | $ | 360,934 | | | | | $ | 356,331 | | |
Europe, the Middle East, and Africa(2)
|
| | | | 231,486 | | | | | | 235,254 | | | | | | 236,602 | | |
Asia Pacific
|
| | | | 131,475 | | | | | | 138,661 | | | | | | 143,721 | | |
Total Revenues
|
| | | $ | 691,710 | | | | | $ | 734,849 | | | | | $ | 736,654 | | |
| | |
Acquisitions Completed
in Year Ended December 31, |
| |||||||||
| | |
2018
|
| |
2019
|
| ||||||
Number of acquisitions
|
| | | | 7 | | | | | | 4 | | |
Cash paid at closing
|
| | | $ | 143,038 | | | | | $ | 36,577 | | |
Cash acquired
|
| | | | (7,774) | | | | | | (2,523) | | |
Net cash paid
|
| | | $ | 135,264 | | | | | $ | 34,054 | | |
| | |
Acquisitions Completed
in Year Ended December 31, |
| |||||||||
| | |
2018
|
| |
2019
|
| ||||||
Consideration: | | | | | | | | | | | | | |
Cash paid at closing
|
| | | $ | 143,038 | | | | | $ | 36,577 | | |
Contingent consideration
|
| | | | 13,456 | | | | | | 4,498 | | |
Deferred payment obligations to sellers
|
| | | | 690 | | | | | | — | | |
Total consideration
|
| | | $ | 157,184 | | | | | $ | 41,075 | | |
Assets acquired and liabilities assumed:
|
| | | | | | | | | | | | |
Cash
|
| | | $ | 7,774 | | | | | $ | 2,523 | | |
Prepaid and other current assets
|
| | | | 4,790 | | | | | | 1,782 | | |
Property and equipment
|
| | | | 340 | | | | | | 411 | | |
Other assets
|
| | | | — | | | | | | 84 | | |
Customer relationship asset (weighted average useful life of 5 and 7 years,
respectively) |
| | | | 27,294 | | | | | | 6,534 | | |
Software and technology (weighted average useful life of 3 years)
|
| | | | 9,332 | | | | | | 2,423 | | |
In-process research and development
|
| | | | 1,366 | | | | | | — | | |
Non-compete agreement (useful life of 5 years)
|
| | | | — | | | | | | 150 | | |
Trademarks (weighted average useful life of 7 and 5 years)
|
| | | | 2,090 | | | | | | 1,431 | | |
Total identifiable assets acquired excluding goodwill
|
| | | | 52,986 | | | | | | 15,338 | | |
Deferred tax liability
|
| | | | (8,917) | | | | | | (1,869) | | |
Other current liabilities
|
| | | | (3,848) | | | | | | (3,538) | | |
Deferred revenues
|
| | | | (6,181) | | | | | | (2,897) | | |
Total liabilities assumed
|
| | | | (18,946) | | | | | | (8,304) | | |
Net identifiable assets acquired excluding goodwill
|
| | | | 34,040 | | | | | | 7,034 | | |
Goodwill
|
| | | | 123,144 | | | | | | 34,041 | | |
Net assets acquired
|
| | | $ | 157,184 | | | | | $ | 41,075 | | |
|
| | |
As of December 31,
|
| |||||||||
| | |
2018
|
| |
2019
|
| ||||||
Land
|
| | | $ | 2,811 | | | | | $ | 2,811 | | |
Building and improvements
|
| | | | 30,585 | | | | | | 31,619 | | |
Computer equipment and software
|
| | | | 46,938 | | | | | | 47,472 | | |
Furniture, fixtures, and equipment
|
| | | | 11,595 | | | | | | 12,593 | | |
Aircraft
|
| | | | 3,910 | | | | | | 3,910 | | |
Other
|
| | | | 61 | | | | | | 79 | | |
Property and equipment, at cost
|
| | | | 95,900 | | | | | | 98,484 | | |
Less accumulated depreciation
|
| | | | (66,507) | | | | | | (68,852) | | |
Total property and equipment, net
|
| | | $ | 29,393 | | | | | $ | 29,632 | | |
|
Balance, December 31, 2017
|
| | | $ | 336,982 | | |
|
Acquisitions
|
| | | | 123,144 | | |
|
Foreign currency translation adjustments
|
| | | | (13,808) | | |
|
Balance, December 31, 2018
|
| | | | 446,318 | | |
|
Acquisitions
|
| | | | 34,041 | | |
|
Foreign currency translation adjustments
|
| | | | (321) | | |
|
Other adjustments
|
| | | | 27 | | |
|
Balance, December 31, 2019
|
| | | $ | 480,065 | | |
|
| | | | | |
As of December 31, 2018
|
| |
As of December 31, 2019
|
| ||||||||||||||||||||||||||||||
| | |
Estimated
Useful Life |
| |
Gross
Carrying Amount |
| |
Accumulated
Amortization |
| |
Net Book
Value |
| |
Gross
Carrying Amount |
| |
Accumulated
Amortization |
| |
Net Book
Value |
| ||||||||||||||||||
Intangible assets subject to amortization
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Software and technology
|
| |
3 years
|
| | | $ | 66,251 | | | | | $ | (57,937) | | | | | $ | 8,314 | | | | | $ | 66,063 | | | | | $ | (58,866) | | | | | $ | 7,197 | | |
Customer relationships
|
| |
3 – 10 years
|
| | | | 86,364 | | | | | | (52,753) | | | | | | 33,611 | | | | | | 88,904 | | | | | | (59,744) | | | | | | 29,160 | | |
Trademarks
|
| |
3 – 10 years
|
| | | | 20,799 | | | | | | (8,952) | | | | | | 11,847 | | | | | | 22,278 | | | | | | (12,461) | | | | | | 9,817 | | |
Non-compete agreements
|
| |
5 years
|
| | | | — | | | | | | — | | | | | | — | | | | | | 150 | | | | | | (11) | | | | | | 139 | | |
| | | | | | | | 173,414 | | | | | | (119,642) | | | | | | 53,772 | | | | | | 177,395 | | | | | | (131,082) | | | | | | 46,313 | | |
Intangible assets not subject to amortization
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
In-process research and development
|
| | | | | | | 229 | | | | | | — | | | | | | 229 | | | | | | — | | | | | | — | | | | | | — | | |
Total intangible assets
|
| | | | | | $ | 173,643 | | | | | $ | (119,642) | | | | | $ | 54,001 | | | | | $ | 177,395 | | | | | $ | (131,082) | | | | | $ | 46,313 | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2018
|
| |
2019
|
| ||||||
Cost of subscriptions and licenses
|
| | | $ | 2,840 | | | | | $ | 3,795 | | |
Amortization of purchased intangibles
|
| | | | 14,000 | | | | | | 14,213 | | |
Total amortization expense
|
| | | $ | 16,840 | | | | | $ | 18,008 | | |
|
2020
|
| | | $ | 17,422 | | |
|
2021
|
| | | | 11,963 | | |
|
2022
|
| | | | 8,543 | | |
|
2023
|
| | | | 3,798 | | |
|
2024
|
| | | | 2,058 | | |
|
Thereafter
|
| | | | 2,529 | | |
| | | | | $ | 46,313 | | |
| | |
As of December 31,
|
| |||||||||
| | |
2018
|
| |
2019
|
| ||||||
Cloud Services Subscription deposits
|
| | | $ | 25,541 | | | | | $ | 54,688 | | |
Accrued benefits
|
| | | | 25,863 | | | | | | 33,184 | | |
Accrued compensation
|
| | | | 30,484 | | | | | | 31,537 | | |
Due to customers
|
| | | | 8,467 | | | | | | 8,945 | | |
Contingent consideration from acquisitions
|
| | | | 2,390 | | | | | | 5,100 | | |
Sales taxes payable
|
| | | | 3,467 | | | | | | 5,287 | | |
Accrued professional fees
|
| | | | 2,347 | | | | | | 4,382 | | |
Accrued acquisition stay bonuses
|
| | | | 1,650 | | | | | | 4,143 | | |
Accrued hosting costs
|
| | | | 6,740 | | | | | | 2,215 | | |
Accrued facility costs
|
| | | | 2,269 | | | | | | 2,168 | | |
Accrued rent
|
| | | | 2,574 | | | | | | 1,909 | | |
Accrued severance and realignment costs
|
| | | | 6,555 | | | | | | 1,688 | | |
Non-contingent consideration from acquisitions
|
| | | | 8,629 | | | | | | 900 | | |
Other accrued and current liabilities
|
| | | | 9,723 | | | | | | 11,371 | | |
Total accruals and other current liabilities
|
| | | $ | 136,699 | | | | | $ | 167,517 | | |
| | |
As of December 31,
|
| |||||||||
| | |
2018
|
| |
2019
|
| ||||||
Bank credit facility: | | | | | | | | | | | | | |
Senior secured revolver
|
| | | $ | 258,750 | | | | | $ | 233,750 | | |
Total long-term debt
|
| | | $ | 258,750 | | | | | $ | 233,750 | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2018
|
| |
2019
|
| ||||||
DCP related compensation (income) expense
|
| | | $ | (75) | | | | | $ | 408 | | |
| | |
Dividend
Per Share |
| |
Amount
|
| ||||||
2018: | | | | | | | | | | | | | |
Fourth quarter
|
| | | $ | 0.020 | | | | | $ | 4,990 | | |
Third quarter
|
| | | | 0.020 | | | | | | 5,016 | | |
Second quarter
|
| | | | 0.020 | | | | | | 5,020 | | |
First quarter
|
| | | | 0.020 | | | | | | 4,979 | | |
Total
|
| | | $ | 0.080 | | | | | $ | 20,005 | | |
2019: | | | | | | | | | | | | | |
Fourth quarter
|
| | | $ | 0.025 | | | | | $ | 6,367 | | |
Third quarter
|
| | | | 0.025 | | | | | | 6,380 | | |
Second quarter
|
| | | | 0.025 | | | | | | 6,375 | | |
First quarter
|
| | | | 0.025 | | | | | | 6,268 | | |
Total
|
| | | $ | 0.100 | | | | | $ | 25,390 | | |
| | |
Foreign
Currency Translation |
| |
Actuarial (Loss)
Gain on Retirement Plan |
| |
Total
|
| |||||||||
Balance, December 31, 2017
|
| | | $ | (17,847) | | | | | $ | (693) | | | | | $ | (18,540) | | |
Other comprehensive income (loss), before taxes
|
| | | | (11,020) | | | | | | 208 | | | | | | (10,812) | | |
Tax expense
|
| | | | — | | | | | | (62) | | | | | | (62) | | |
Other comprehensive income (loss), net of taxes
|
| | | | (11,020) | | | | | | 146 | | | | | | (10,874) | | |
Balance, December 31, 2018
|
| | | | (28,867) | | | | | | (547) | | | | | | (29,414) | | |
Other comprehensive income (loss), before taxes
|
| | | | 5,959 | | | | | | (675) | | | | | | 5,284 | | |
Tax expense
|
| | | | — | | | | | | 203 | | | | | | 203 | | |
Other comprehensive income (loss), net of taxes
|
| | | | 5,959 | | | | | | (472) | | | | | | 5,487 | | |
Balance, December 31, 2019
|
| | | $ | (22,908) | | | | | $ | (1,019) | | | | | $ | (23,927) | | |
| | | | | | | | |
Exercise Price Per Share
|
| ||||||
| | |
Options
Outstanding |
| |
Range
|
| |
Weighted
Average |
| ||||||
Balance, December 31, 2017
|
| | | | 18,629,380 | | | |
$0.31 - $5.38
|
| | | $ | 3.72 | | |
Option activity:
|
| | | | | | | | | | | | | | | |
Granted
|
| | | | 5,126,000 | | | |
6.81 - 8.67
|
| | | | 6.81 | | |
Exercised
|
| | | | (3,738,182) | | | |
0.31 - 5.38
|
| | | | 1.89 | | |
Canceled
|
| | | | (502,750) | | | |
0.31 - 8.67
|
| | | | 5.04 | | |
Balance, December 31, 2018
|
| | | | 19,514,448 | | | |
$1.79 - $6.81
|
| | | $ | 4.85 | | |
Option activity:
|
| | | | | | | | | | | | | | | |
Granted
|
| | | | 4,826,000 | | | |
7.24
|
| | | | 7.24 | | |
Exercised
|
| | | | (4,731,158) | | | |
1.79 - 6.81
|
| | | | 2.68 | | |
Canceled
|
| | | | (917,623) | | | |
1.79 - 7.24
|
| | | | 5.82 | | |
Balance, December 31, 2019
|
| | | | 18,691,667 | | | |
$3.50 - $7.24
|
| | | $ | 5.97 | | |
Exercise Prices
|
| |
Number of
Options Outstanding |
| |
Weighted
Remaining Contractual Life (in years) |
| |
Exercisable
|
| |||||||||
$3.50 – $4.00
|
| | | | 1,978,256 | | | | | | 0.39 | | | | | | 1,978,256 | | |
4.01 – 6.00
|
| | | | 7,450,203 | | | | | | 1.78 | | | | | | 4,469,866 | | |
$6.01 – $7.24
|
| | | | 9,263,208 | | | | | | 3.82 | | | | | | 1,125,708 | | |
Total
|
| | | | 18,691,667 | | | | | | | | | | | | 7,573,830 | | |
| | |
Number of
Options |
| |
Weighted
Average Exercise Price |
| |
Aggregate
Intrinsic Value |
| |
Weighted
Remaining Contractual Life (in years) |
| ||||||||||||
Options as of December 31, 2019 | | | | | | | | | | | | | | | | | | | | | | | | | |
Outstanding
|
| | | | 18,691,667 | | | | | $ | 5.97 | | | | | $ | 91,028 | | | | | | 2.6 | | |
Exercisable
|
| | | | 7,573,830 | | | | | $ | 5.05 | | | | | $ | 43,852 | | | | | | 1.6 | | |
| | |
Year Ended December 31,
|
| ||||||
| | |
2018
|
| |
2019
|
| |||
Expected volatility
|
| |
26.32% – 27.18%
|
| | | | 29.57% | | |
Expected dividend yield
|
| |
1.18%
|
| | | | 1.38% | | |
Risk-free interest rate
|
| |
2.40%
|
| | | | 2.48% | | |
Expected term (in years)
|
| |
3.75
|
| | | | 3.75 | | |
Weighted average grant date fair value of options issued
|
| |
$1.46
|
| | | $ | 1.66 | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2018
|
| |
2019
|
| ||||||
Domestic
|
| | | $ | 56,426 | | | | | $ | 61,691 | | |
International
|
| | | | 56,436 | | | | | | 66,418 | | |
Income before income taxes
|
| | | $ | 112,862 | | | | | $ | 128,109 | | |
|
| | |
Year Ended
December 31, |
| |||||||||
| | |
2018
|
| |
2019
|
| ||||||
Current: | | | | | | | | | | | | | |
Federal
|
| | | $ | 18,634 | | | | | $ | 7,696 | | |
State
|
| | | | 873 | | | | | | 2,486 | | |
Foreign
|
| | | | 11,303 | | | | | | 12,824 | | |
| | | | | 30,810 | | | | | | 23,006 | | |
Deferred: | | | | | | | | | | | | | |
Federal
|
| | | | (7,655) | | | | | | 2,389 | | |
State
|
| | | | 508 | | | | | | 412 | | |
Foreign
|
| | | | (52,913) | | | | | | (2,069) | | |
| | | | | (60,060) | | | | | | 732 | | |
Provision for income taxes
|
| | | $ | (29,250) | | | | | $ | 23,738 | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2018
|
| |
2019
|
| ||||||
Federal statutory rate
|
| | | | 21.0% | | | | | | 21.0% | | |
State income taxes, net of federal benefit
|
| | | | 0.9 | | | | | | 2.0 | | |
Permanent book/tax differences
|
| | | | (0.2) | | | | | | 0.2 | | |
Stock-based compensation
|
| | | | (2.4) | | | | | | (2.3) | | |
Tax credits
|
| | | | (3.3) | | | | | | (3.6) | | |
Foreign tax rate differential
|
| | | | (4.2) | | | | | | (2.8) | | |
Income tax reserves
|
| | | | (0.2) | | | | | | 0.9 | | |
Intercompany sales of certain operating assets
|
| | | | (41.1) | | | | | | — | | |
Net tax on foreign earnings (GILTI and FDII)
|
| | | | — | | | | | | 6.1 | | |
Other
|
| | | | (0.2) | | | | | | (3.0) | | |
U.S. tax reform
|
| | | | 3.8 | | | | | | — | | |
Effective income tax rate
|
| | | | (25.9)% | | | | | | 18.5% | | |
| | |
As of December 31,
|
| |||||||||
| | |
2018
|
| |
2019
|
| ||||||
Deferred tax assets: | | | | | | | | | | | | | |
Compensation accruals and DCP
|
| | | $ | 37,816 | | | | | $ | 36,195 | | |
NOL and credit carryforwards
|
| | | | 10,013 | | | | | | 11,544 | | |
Intangible assets including goodwill
|
| | | | 15,199 | | | | | | 10,371 | | |
Expenses not currently deductible
|
| | | | 581 | | | | | | 960 | | |
Allowance for accounts receivable
|
| | | | 345 | | | | | | 472 | | |
Other comprehensive income
|
| | | | 195 | | | | | | 394 | | |
Deferred revenue
|
| | | | 8,185 | | | | | | — | | |
Valuation allowance
|
| | | | (2,082) | | | | | | (2,329) | | |
Other
|
| | | | 615 | | | | | | 40 | | |
| | | | | 70,867 | | | | | | 57,647 | | |
Deferred tax liabilities: | | | | | | | | | | | | | |
Deferred revenue
|
| | | | — | | | | | | 12,830 | | |
Depreciation
|
| | | | 240 | | | | | | 707 | | |
Other
|
| | | | 31 | | | | | | 1,302 | | |
| | | | | 271 | | | | | | 14,839 | | |
Net deferred tax assets
|
| | | $ | 70,596 | | | | | $ | 42,808 | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2018
|
| |
2019
|
| ||||||
Unrecognized tax benefit, beginning of year
|
| | | $ | 872 | | | | | $ | 638 | | |
Additions based on tax positions related to: | | | | | | | | | | | | | |
Prior years
|
| | | | 80 | | | | | | 1,222 | | |
Reductions for tax positions related to prior years
|
| | | | (39) | | | | | | (86) | | |
Lapse of statute of limitations
|
| | | | (275) | | | | | | (11) | | |
Unrecognized tax benefit, end of year
|
| | | $ | 638 | | | | | $ | 1,763 | | |
December 31, 2018
|
| |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Total
|
| ||||||||||||
Assets: | | | | | | | | | | | | | | | | | | | | | | | | | |
Money market funds(1)
|
| | | $ | 30,197 | | | | | $ | — | | | | | $ | — | | | | | $ | 30,197 | | |
Call options(2)
|
| | | | — | | | | | | 158 | | | | | | — | | | | | | 158 | | |
Total assets
|
| | | $ | 30,197 | | | | | $ | 158 | | | | | $ | — | | | | | $ | 30,355 | | |
Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | |
Acquisition contingent consideration(3)
|
| | | $ | — | | | | | $ | — | | | | | $ | 4,316 | | | | | $ | 4,316 | | |
Deferred compensation plan(4)
|
| | | | 2,275 | | | | | | — | | | | | | — | | | | | | 2,275 | | |
Total liabilities
|
| | | $ | 2,275 | | | | | $ | — | | | | | $ | 4,316 | | | | | $ | 6,591 | | |
|
December 31, 2019
|
| |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Total
|
| ||||||||||||
Assets: | | | | | | | | | | | | | | | | | | | | | | | | | |
Money market funds(1)
|
| | | $ | 70,000 | | | | | $ | — | | | | | $ | — | | | | | $ | 70,000 | | |
Total assets
|
| | | $ | 70,000 | | | | | $ | — | | | | | $ | — | | | | | $ | 70,000 | | |
Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | |
Acquisition contingent consideration(3)
|
| | | $ | — | | | | | $ | — | | | | | $ | 6,599 | | | | | $ | 6,599 | | |
Deferred compensation plan(4)
|
| | | | 2,544 | | | | | | — | | | | | | — | | | | | | 2,544 | | |
Total liabilities
|
| | | $ | 2,544 | | | | | $ | — | | | | | $ | 6,599 | | | | | $ | 9,143 | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2018
|
| |
2019
|
| ||||||
Balance, beginning of year
|
| | | $ | 241 | | | | | $ | 4,316 | | |
Payments
|
| | | | (9) | | | | | | (2,513) | | |
Addition
|
| | | | 13,206 | | | | | | 4,498 | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2018
|
| |
2019
|
| ||||||
Reclassification(1)
|
| | | | (8,516) | | | | | | 180 | | |
Change in fair value
|
| | | | 167 | | | | | | 62 | | |
Foreign currency translation adjustments
|
| | | | (773) | | | | | | 56 | | |
Balance, end of year
|
| | | $ | 4,316 | | | | | $ | 6,599 | | |
|
|
2020
|
| | | $ | 15,886 | | |
|
2021
|
| | | | 13,186 | | |
|
2022
|
| | | | 10,385 | | |
|
2023
|
| | | | 6,572 | | |
|
2024
|
| | | | 3,216 | | |
|
Thereafter
|
| | | | 2,771 | | |
| | | | | $ | 52,016 | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2018
|
| |
2019
|
| ||||||
Long-lived assets: | | | | | | | | | | | | | |
Americas(1)
|
| | | $ | 32,490 | | | | | $ | 34,758 | | |
Europe, the Middle East, and Africa
|
| | | | 43,933 | | | | | | 34,039 | | |
Asia/Pacific
|
| | | | 6,971 | | | | | | 7,148 | | |
Total long-lived assets
|
| | | $ | 83,394 | | | | | $ | 75,945 | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2018
|
| |
2019
|
| ||||||
Interest expense
|
| | | $ | (9,607) | | | | | $ | (9,731) | | |
Interest income
|
| | | | 842 | | | | | | 1,532 | | |
Total interest expense, net
|
| | | $ | (8,765) | | | | | $ | (8,199) | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2018
|
| |
2019
|
| ||||||
Foreign exchange loss(1)
|
| | | $ | (418) | | | | | $ | (5,591) | | |
Other income (expense), net(2)
|
| | | | 654 | | | | | | 34 | | |
Total other income (expense), net
|
| | | $ | 236 | | | | | $ | (5,557) | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2018
|
| |
2019
|
| ||||||
Balance, beginning of year
|
| | | $ | 1,458 | | | | | $ | 6,437 | | |
Realignment costs
|
| | | | 6,778 | | | | | | (584) | | |
Payments
|
| | | | (1,640) | | | | | | (5,326) | | |
Adjustments(1)
|
| | | | (159) | | | | | | (36) | | |
Balance, end of year
|
| | | $ | 6,437 | | | | | $ | 491 | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2018
|
| |
2019
|
| ||||||
Cost of revenues: | | | | | | | | | | | | | |
Cost of subscriptions and licenses
|
| | | $ | 256 | | | | | $ | (51) | | |
Cost of services
|
| | | | 845 | | | | | | (185) | | |
Total cost of revenues
|
| | | | 1,101 | | | | | | (236) | | |
Operating expenses: | | | | | | | | | | | | | |
Research and development
|
| | | | 3,380 | | | | | | (171) | | |
Selling and marketing
|
| | | | 2,252 | | | | | | (263) | | |
General and administrative
|
| | | | 45 | | | | | | 86 | | |
Total operating expenses
|
| | | | 5,677 | | | | | | (348) | | |
Total realignment costs
|
| | | $ | 6,778 | | | | | $ | (584) | | |
| | |
Year Ended December 31,
|
| |||||||||
| | |
2018
|
| |
2019
|
| ||||||
Numerator: | | | | | | | | | | | | | |
Net income
|
| | | $ | 142,112 | | | | | $ | 103,096 | | |
Less: Net income attributable to participating securities
|
| | | | (4) | | | | | | (8) | | |
Net income attributable to Class A and Class B common stockholders
|
| | | $ | 142,108 | | | | | $ | 103,088 | | |
Denominator: | | | | | | | | | | | | | |
Denominator for basic net income per share – weighted average
shares |
| | | | 285,805,096 | | | | | | 284,625,642 | | |
Effect of dilutive securities:
|
| | | | | | | | | | | | |
Stock options
|
| | | | 6,819,400 | | | | | | 9,171,065 | | |
Denominator for dilutive net income per share
|
| | | | 292,624,496 | | | | | | 293,796,707 | | |
Net income per share, basic
|
| | | $ | 0.50 | | | | | $ | 0.36 | | |
Net income per share, diluted
|
| | | $ | 0.49 | | | | | $ | 0.35 | | |
| | |
December 31,
2019 |
| |
June 30,
2020 |
| |
Pro Forma
June 30, 2020 |
| |||||||||
Assets
|
| | | | | | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 121,101 | | | | | $ | 125,516 | | | | | $ | 125,516 | | |
Accounts receivable
|
| | | | 211,775 | | | | | | 169,778 | | | | | | 169,778 | | |
Allowance for doubtful accounts
|
| | | | (7,274) | | | | | | (7,272) | | | | | | (7,272) | | |
Prepaid income taxes
|
| | | | 4,543 | | | | | | 6,501 | | | | | | 6,501 | | |
Prepaid and other current assets
|
| | | | 23,413 | | | | | | 23,560 | | | | | | 23,560 | | |
Total current assets
|
| | | | 353,558 | | | | | | 318,083 | | | | | | 318,083 | | |
Property and equipment, net
|
| | | | 29,632 | | | | | | 30,303 | | | | | | 30,303 | | |
Operating lease right-of-use assets
|
| | | | — | | | | | | 48,134 | | | | | | 48,134 | | |
Intangible assets, net
|
| | | | 46,313 | | | | | | 50,008 | | | | | | 50,008 | | |
Goodwill
|
| | | | 480,065 | | | | | | 529,759 | | | | | | 529,759 | | |
Investment in joint venture
|
| | | | 1,725 | | | | | | 859 | | | | | | 859 | | |
Deferred income taxes
|
| | | | 51,068 | | | | | | 45,218 | | | | | | 45,218 | | |
Other assets
|
| | | | 32,238 | | | | | | 36,805 | | | | | | 36,805 | | |
Total assets
|
| | | $ | 994,599 | | | | | $ | 1,059,169 | | | | | $ | 1,059,169 | | |
Liabilities and Stockholders’ Equity (Deficit)
|
| | | | | | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 17,669 | | | | | $ | 19,294 | | | | | $ | 19,294 | | |
Accruals and other current liabilities
|
| | | | 167,517 | | | | | | 174,889 | | | | | | 176,333 | | |
Deferred revenues
|
| | | | 204,991 | | | | | | 180,130 | | | | | | 180,130 | | |
Operating lease liabilities
|
| | | | — | | | | | | 15,959 | | | | | | 15,959 | | |
Income taxes payable
|
| | | | 2,236 | | | | | | 3,666 | | | | | | 3,666 | | |
Total current liabilities
|
| | | | 392,413 | | | | | | 393,938 | | | | | | 395,382 | | |
Long-term debt
|
| | | | 233,750 | | | | | | 207,000 | | | | | | 596,583 | | |
Long-term operating lease liabilities
|
| | | | — | | | | | | 34,182 | | | | | | 34,182 | | |
Deferred revenues
|
| | | | 8,154 | | | | | | 6,326 | | | | | | 6,326 | | |
Deferred income taxes
|
| | | | 8,260 | | | | | | 9,228 | | | | | | 9,228 | | |
Income taxes payable
|
| | | | 8,140 | | | | | | 8,140 | | | | | | 8,140 | | |
Other liabilities
|
| | | | 9,263 | | | | | | 20,611 | | | | | | 22,356 | | |
Total liabilities
|
| | | | 659,980 | | | | | | 679,425 | | | | | | 1,072,197 | | |
Commitments and contingencies (Note 18) | | | | | | | | | | | | | | | | | | | |
Stockholders’ equity (deficit): | | | | | | | | | | | | | | | | | | | |
Class A Common Stock, $0.01 par value, authorized 320,000,000
shares; issued 11,601,757 shares as of December 31, 2019 and June 30, 2020, actual and pro forma, and Class B Common Stock, $0.01 par value, authorized 600,000,000 shares; issued 243,241,192 and 247,607,598 shares as of December 31, 2019 and June 30, 2020, actual and pro forma, respectively |
| | | | 2,548 | | | | | | 2,592 | | | | | | 2,592 | | |
Additional paid-in capital
|
| | | | 408,667 | | | | | | 415,883 | | | | | | 415,883 | | |
Accumulated other comprehensive loss
|
| | | | (23,927) | | | | | | (28,404) | | | | | | (28,404) | | |
Accumulated deficit
|
| | | | (52,669) | | | | | | (10,327) | | | | | | (403,099) | | |
Total stockholders’ equity (deficit)
|
| | | | 334,619 | | | | | | 379,744 | | | | | | (13,028) | | |
Total liabilities and stockholders’ equity (deficit)
|
| | | $ | 994,599 | | | | | $ | 1,059,169 | | | | | $ | 1,059,169 | | |
| | |
Six Months Ended
June 30, |
| |||||||||
| | |
2019
|
| |
2020
|
| ||||||
Revenues: | | | | | | | | | | | | | |
Subscriptions
|
| | | $ | 290,147 | | | | | $ | 327,837 | | |
Perpetual licenses
|
| | | | 24,468 | | | | | | 23,193 | | |
Subscriptions and licenses
|
| | | | 314,615 | | | | | | 351,030 | | |
Services
|
| | | | 32,529 | | | | | | 27,950 | | |
Total revenues
|
| | | | 347,144 | | | | | | 378,980 | | |
Cost of revenues: | | | | | | | | | | | | | |
Cost of subscriptions and licenses
|
| | | | 30,831 | | | | | | 43,128 | | |
Cost of services
|
| | | | 38,367 | | | | | | 30,836 | | |
Total cost of revenues
|
| | | | 69,198 | | | | | | 73,964 | | |
Gross profit
|
| | | | 277,946 | | | | | | 305,016 | | |
Operating expenses: | | | | | | | | | | | | | |
Research and development
|
| | | | 91,861 | | | | | | 89,353 | | |
Selling and marketing
|
| | | | 75,168 | | | | | | 65,727 | | |
General and administrative
|
| | | | 46,307 | | | | | | 52,269 | | |
Amortization of purchased intangibles
|
| | | | 6,852 | | | | | | 7,115 | | |
Total operating expenses
|
| | | | 220,188 | | | | | | 214,464 | | |
Income from operations
|
| | | | 57,758 | | | | | | 90,552 | | |
Interest expense, net
|
| | | | (4,474) | | | | | | (2,516) | | |
Other income (expense), net
|
| | | | (1,747) | | | | | | (6,985) | | |
Income before income taxes
|
| | | | 51,537 | | | | | | 81,051 | | |
Provision for income taxes
|
| | | | 5,119 | | | | | | 11,440 | | |
Equity in loss of joint venture, net of tax
|
| | | | — | | | | | | 866 | | |
Net income
|
| | | | 46,418 | | | | | | 68,745 | | |
Less: Net income attributable to participating securities
|
| | | | (12) | | | | | | — | | |
Net income attributable to Class A and Class B common stockholders
|
| | | $ | 46,406 | | | | | $ | 68,745 | | |
Per share information: | | | | | | | | | | | | | |
Net income per share, basic
|
| | | $ | 0.16 | | | | | $ | 0.24 | | |
Net income per share, diluted
|
| | | $ | 0.16 | | | | | $ | 0.23 | | |
Weighted average shares outstanding, basic
|
| | | | 285,529,476 | | | | | | 286,068,766 | | |
Weighted average shares outstanding, diluted
|
| | | | 293,633,255 | | | | | | 295,595,234 | | |
| | |
Six Months Ended
June 30, |
| |||||||||
| | |
2019
|
| |
2020
|
| ||||||
Net income
|
| | | $ | 46,418 | | | | | $ | 68,745 | | |
Other comprehensive income (loss), net of taxes: | | | | | | | | | | | | | |
Foreign currency translation adjustments
|
| | | | 2,406 | | | | | | (4,503) | | |
Actuarial gain on retirement plan, net of tax effect of ($6) and ($15), respectively
|
| | | | 10 | | | | | | 26 | | |
Total other comprehensive income (loss), net of taxes
|
| | | | 2,416 | | | | | | (4,477) | | |
Comprehensive income
|
| | | $ | 48,834 | | | | | $ | 64,268 | | |
| | |
Stockholders’ Equity
|
| |||||||||||||||||||||||||||||||||
| | |
Class A and Class B
Common Stock |
| |
Additional
paid-in capital |
| |
Accumulated
other comprehensive loss |
| |
Accumulated
deficit |
| |
Total
stockholders’ equity |
| |||||||||||||||||||||
|
Shares
|
| |
Par value
|
| ||||||||||||||||||||||||||||||||
Balance as of December 31, 2018
|
| | | | 250,283,513 | | | | | $ | 2,502 | | | | | $ | 392,896 | | | | | $ | (29,414) | | | | | $ | (218,553) | | | | | $ | 147,431 | | |
Cumulative effect of accounting changes
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 107,822 | | | | | | 107,822 | | |
Net income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 46,418 | | | | | | 46,418 | | |
Other comprehensive income (loss)
|
| | | | — | | | | | | — | | | | | | — | | | | | | 2,416 | | | | | | — | | | | | | 2,416 | | |
Dividends declared
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (12,643) | | | | | | (12,643) | | |
Profit sharing plan shares, net
|
| | | | (160,963) | | | | | | (2) | | | | | | — | | | | | | — | | | | | | (1,211) | | | | | | (1,213) | | |
Shares issued in connection with deferred compensation plan, net
|
| | | | 2,230,430 | | | | | | 22 | | | | | | — | | | | | | — | | | | | | (4,975) | | | | | | (4,953) | | |
Deferred compensation plan voluntary contributions and vesting of awards
|
| | | | — | | | | | | — | | | | | | 1,876 | | | | | | — | | | | | | — | | | | | | 1,876 | | |
Payment of shareholder Put and Call rights
|
| | | | (401,352) | | | | | | (4) | | | | | | — | | | | | | — | | | | | | (3,145) | | | | | | (3,149) | | |
Common Stock Purchase Agreement, net
|
| | | | 64,509 | | | | | | 1 | | | | | | 466 | | | | | | — | | | | | | (47) | | | | | | 420 | | |
Stock option exercises, net
|
| | | | 2,657,027 | | | | | | 27 | | | | | | 2,154 | | | | | | — | | | | | | (2,150) | | | | | | 31 | | |
Stock-based compensation expense
|
| | | | — | | | | | | — | | | | | | 4,025 | | | | | | — | | | | | | — | | | | | | 4,025 | | |
Shares related to restricted stock, net
|
| | | | 409,665 | | | | | | 4 | | | | | | (4) | | | | | | — | | | | | | (169) | | | | | | (169) | | |
Other
|
| | | | 3,563 | | | | | | — | | | | | | 26 | | | | | | — | | | | | | (17) | | | | | | 9 | | |
Balance as of June 30, 2019
|
| | | | 255,086,392 | | | | | $ | 2,550 | | | | | $ | 401,439 | | | | | $ | (26,998) | | | | | $ | (88,670) | | | | | $ | 288,321 | | |
| | |
Stockholders’ Equity
|
| |||||||||||||||||||||||||||||||||
| | |
Class A and Class B
Common Stock |
| |
Additional
paid-in capital |
| |
Accumulated
other comprehensive loss |
| |
Accumulated
deficit |
| |
Total
stockholders’ equity |
| |||||||||||||||||||||
|
Shares
|
| |
Par value
|
| ||||||||||||||||||||||||||||||||
Balance as of December 31, 2019
|
| | | | 254,842,949 | | | | | $ | 2,548 | | | | | $ | 408,667 | | | | | $ | (23,927) | | | | | $ | (52,669) | | | | | $ | 334,619 | | |
Net income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 68,745 | | | | | | 68,745 | | |
Other comprehensive income (loss)
|
| | | | — | | | | | | — | | | | | | — | | | | | | (4,477) | | | | | | — | | | | | | (4,477) | | |
Dividends declared
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (15,437) | | | | | | (15,437) | | |
Profit sharing plan shares, net
|
| | | | (385,568) | | | | | | (4) | | | | | | — | | | | | | — | | | | | | (4,424) | | | | | | (4,428) | | |
Shares issued in connection with deferred compensation plan, net
|
| | | | 2,959,731 | | | | | | 30 | | | | | | — | | | | | | — | | | | | | (1,860) | | | | | | (1,830) | | |
Deferred compensation plan voluntary contributions
|
| | | | — | | | | | | — | | | | | | 1,798 | | | | | | — | | | | | | — | | | | | | 1,798 | | |
Payment of shareholder Put and Call rights
|
| | | | (128,176) | | | | | | (1) | | | | | | — | | | | | | — | | | | | | (1,453) | | | | | | (1,454) | | |
Common Stock Purchase Agreement, net
|
| | | | 169 | | | | | | — | | | | | | — | | | | | | — | | | | | | (57) | | | | | | (57) | | |
Stock option exercises, net
|
| | | | 2,184,628 | | | | | | 22 | | | | | | 2,203 | | | | | | — | | | | | | (3,052) | | | | | | (827) | | |
Shares issued for stock grants, net
|
| | | | 17,411 | | | | | | — | | | | | | 219 | | | | | | — | | | | | | — | | | | | | 219 | | |
Stock-based compensation expense
|
| | | | — | | | | | | — | | | | | | 2,993 | | | | | | — | | | | | | — | | | | | | 2,993 | | |
Shares related to restricted stock, net
|
| | | | (281,789) | | | | | | (3) | | | | | | 3 | | | | | | — | | | | | | (120) | | | | | | (120) | | |
Balance as of June 30, 2020
|
| | | | 259,209,355 | | | | | $ | 2,592 | | | | | $ | 415,883 | | | | | $ | (28,404) | | | | | $ | (10,327) | | | | | $ | 379,744 | | |
| | |
Six Months Ended June 30,
|
| |||||||||
| | |
2019
|
| |
2020
|
| ||||||
Cash flows from operating activities: | | | | | | | | | | | | | |
Net income
|
| | | $ | 46,418 | | | | | $ | 68,745 | | |
Adjustments to reconcile net income to net cash provided by operating activities:
|
| | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 15,366 | | | | | | 16,664 | | |
Provision for accounts receivable allowance
|
| | | | 1,088 | | | | | | 293 | | |
Deferred income taxes
|
| | | | (2,354) | | | | | | 5,284 | | |
Deferred compensation plan activity
|
| | | | 2,171 | | | | | | 1,633 | | |
Stock-based compensation expense
|
| | | | 4,025 | | | | | | 3,212 | | |
Amortization of deferred debt issuance costs
|
| | | | 277 | | | | | | 277 | | |
Change in fair value of derivative
|
| | | | 159 | | | | | | 4,174 | | |
Change in fair value of contingent consideration
|
| | | | 62 | | | | | | (1,390) | | |
Foreign currency remeasurement loss
|
| | | | 1,230 | | | | | | 3,538 | | |
Equity in loss of joint venture, net of tax
|
| | | | — | | | | | | 866 | | |
Changes in assets and liabilities, net of effect from acquisitions:
|
| | | ||||||||||
Accounts receivable, net
|
| | | | 39,856 | | | | | | 44,263 | | |
Prepaid and other assets
|
| | | | (7,497) | | | | | | 9,089 | | |
Accounts payable, accruals and other liabilities
|
| | | | 19,447 | | | | | | 11,208 | | |
Deferred revenues
|
| | | | (25,326) | | | | | | (29,500) | | |
Income taxes payable
|
| | | | (12,164) | | | | | | (2,174) | | |
Net cash provided by operating activities
|
| | | | 82,758 | | | | | | 136,182 | | |
Cash flows from investing activities: | | | | ||||||||||
Purchases of property and equipment and investment in capitalized software
|
| | | | (8,123) | | | | | | (9,419) | | |
Capitalization of costs to translate software products into foreign languages
|
| | | | (372) | | | | | | (551) | | |
Acquisitions, net of cash acquired of $980 and $2,064, respectively
|
| | | | (9,662) | | | | | | (67,595) | | |
Other investing activities
|
| | | | — | | | | | | (1,414) | | |
Net cash used in investing activities
|
| | | | (18,157) | | | | | | (78,979) | | |
Cash flows from financing activities: | | | | ||||||||||
Proceeds from credit facilities
|
| | | | 84,000 | | | | | | 164,375 | | |
Payments of credit facilities
|
| | | | (95,750) | | | | | | (191,125) | | |
Payments of financing leases
|
| | | | — | | | | | | (93) | | |
Payments of acquisition debt and other consideration
|
| | | | (8,273) | | | | | | (1,091) | | |
Payments of dividends
|
| | | | (12,641) | | | | | | (15,901) | | |
Payments for shares acquired including shares withheld for taxes
|
| | | | (16,027) | | | | | | (69,307) | | |
Proceeds from Common Stock Purchase Agreement
|
| | | | 4,510 | | | | | | 58,349 | | |
Net proceeds from exercise of common stock options and restricted stock
|
| | | | 2,177 | | | | | | 2,237 | | |
Net cash used in financing activities
|
| | | | (42,004) | | | | | | (52,556) | | |
Effect of exchange rate changes on cash and cash equivalents
|
| | | | (346) | | | | | | (232) | | |
Increase in cash and cash equivalents
|
| | | | 22,251 | | | | | | 4,415 | | |
Cash and cash equivalents, beginning of year
|
| | | | 81,183 | | | | | | 121,101 | | |
Cash and cash equivalents, end of period
|
| | | $ | 103,434 | | | | | $ | 125,516 | | |
Supplemental information: | | | | ||||||||||
Cash paid for income taxes
|
| | | $ | 21,931 | | | | | $ | 7,180 | | |
Income tax refunds
|
| | | | 1,000 | | | | | | 298 | | |
Interest paid
|
| | | | 4,909 | | | | | | 3,162 | | |
Non-cash contingent acquisition consideration
|
| | | | 50 | | | | | | 1,706 | | |
Non-cash deferred acquisition consideration
|
| | | | — | | | | | | 1,069 | | |
| | |
December 31,
2019 |
| |
June 30,
2020 |
| ||||||
Contract assets
|
| | | $ | 644 | | | | | $ | 344 | | |
Deferred revenues
|
| | | | 213,145 | | | | | | 186,456 | | |
| | |
Six Months Ended June 30,
|
| |||||||||
| | |
2019
|
| |
2020
|
| ||||||
Revenues: | | | | | | | | | | | | | |
Subscriptions: | | | | | | | | | | | | | |
SELECT subscriptions
|
| | | $ | 131,114 | | | | | $ | 132,339 | | |
Enterprise license subscriptions
|
| | | | 87,639 | | | | | | 109,290 | | |
Term license subscriptions
|
| | | | 71,394 | | | | | | 86,208 | | |
Subscriptions
|
| | | | 290,147 | | | | | | 327,837 | | |
Perpetual licenses: | | | | | | | | | | | | | |
Perpetual licenses
|
| | | | 24,468 | | | | | | 23,193 | | |
Subscriptions and licenses
|
| | | | 314,615 | | | | | | 351,030 | | |
Services: | | | | | | | | | | | | | |
Professional services (recurring)
|
| | | | 10,444 | | | | | | 7,316 | | |
Professional services (other)
|
| | | | 22,085 | | | | | | 20,634 | | |
Services
|
| | | | 32,529 | | | | | | 27,950 | | |
Total revenues
|
| | | $ | 347,144 | | | | | $ | 378,980 | | |
| | |
Six Months Ended June 30,
|
| |||||||||
| | |
2019
|
| |
2020
|
| ||||||
Revenues: | | | | | | | | | | | | | |
Americas(1) | | | | $ | 167,440 | | | | | $ | 185,838 | | |
Europe, the Middle East, and Africa(2)
|
| | | | 115,811 | | | | | | 121,578 | | |
Asia Pacific
|
| | | | 63,893 | | | | | | 71,564 | | |
Total Revenues
|
| | | $ | 347,144 | | | | | $ | 378,980 | | |
|
| | |
Acquisitions Completed in
|
| |||||||||
| | |
Year Ended
December 31, 2019 |
| |
Six Months Ended
June 30, 2020 |
| ||||||
Number of acquisitions
|
| | | | 4 | | | | | | 3 | | |
Cash paid at closing(1)
|
| | | $ | 36,577 | | | | | $ | 69,659 | | |
Cash acquired
|
| | | | (2,523) | | | | | | (2,064) | | |
Net cash paid
|
| | | $ | 34,054 | | | | | $ | 67,595 | | |
| | |
Acquisitions Completed in
|
| |||||||||
| | |
Year Ended
December 31, 2019 |
| |
Six Months Ended
June 30, 2020 |
| ||||||
Consideration: | | | | | | | | | | | | | |
Cash paid at closing
|
| | | $ | 36,577 | | | | | $ | 69,659 | | |
Contingent consideration
|
| | | | 4,498 | | | | | | 1,706 | | |
Deferred payment obligations to (from) sellers
|
| | | | — | | | | | | (1,069) | | |
Total consideration
|
| | | $ | 41,075 | | | | | $ | 70,296 | | |
Assets acquired and liabilities assumed:
|
| | | | | | | | | | | | |
Cash
|
| | | $ | 2,523 | | | | | $ | 2,064 | | |
Prepaid and other current assets
|
| | | | 1,782 | | | | | | 5,697 | | |
Right-of-use assets
|
| | | | — | | | | | | 1,668 | | |
Property and equipment
|
| | | | 411 | | | | | | 172 | | |
Other assets
|
| | | | 84 | | | | | | — | | |
Customer relationship asset (weighted average useful life of 7 years)
|
| | | | 6,534 | | | | | | 8,941 | | |
Software and technology (weighted average useful life of 3 years)
|
| | | | 2,423 | | | | | | 1,751 | | |
Non-compete agreement (useful life of 5 years)
|
| | | | 150 | | | | | | 200 | | |
| | |
Acquisitions Completed in
|
| |||||||||
| | |
Year Ended
December 31, 2019 |
| |
Six Months Ended
June 30, 2020 |
| ||||||
Trademarks (weighted average useful life of 5 and 9 years, respectively)
|
| | | | 1,431 | | | | | | 3,010 | | |
Total identifiable assets acquired excluding goodwill
|
| | | | 15,338 | | | | | | 23,503 | | |
Deferred revenues
|
| | | | (2,897) | | | | | | (4,274) | | |
Other current liabilities
|
| | | | (3,538) | | | | | | (2,504) | | |
Operating lease liabilities
|
| | | | — | | | | | | (1,668) | | |
Non-current liabilities
|
| | | | — | | | | | | (41) | | |
Deferred income taxes
|
| | | | (1,869) | | | | | | (978) | | |
Total liabilities assumed
|
| | | | (8,304) | | | | | | (9,465) | | |
Net identifiable assets acquired excluding goodwill
|
| | | | 7,034 | | | | | | 14,038 | | |
Goodwill
|
| | | | 34,041 | | | | | | 56,258 | | |
Net assets acquired
|
| | | $ | 41,075 | | | | | $ | 70,296 | | |
|
| | |
December 31,
2019 |
| |
June 30,
2020 |
| ||||||
Land
|
| | | $ | 2,811 | | | | | $ | 2,811 | | |
Building and improvements
|
| | | | 31,619 | | | | | | 32,435 | | |
Computer equipment and software
|
| | | | 47,472 | | | | | | 50,637 | | |
Furniture, fixtures, and equipment
|
| | | | 12,593 | | | | | | 12,730 | | |
Aircraft
|
| | | | 3,910 | | | | | | 4,075 | | |
Other
|
| | | | 79 | | | | | | 79 | | |
Property and equipment, at cost
|
| | | | 98,484 | | | | | | 102,767 | | |
Less accumulated depreciation
|
| | | | (68,852) | | | | | | (72,464) | | |
Total property and equipment, net
|
| | | $ | 29,632 | | | | | $ | 30,303 | | |
|
|
Balance, December 31, 2019
|
| | | $ | 480,065 | | |
|
Acquisitions
|
| | | | 56,258 | | |
|
Foreign currency translation adjustments
|
| | | | (6,712) | | |
|
Other adjustments
|
| | | | 148 | | |
|
Balance, June 30, 2020
|
| | | $ | 529,759 | | |
| | | | | |
As of December 31, 2019
|
| |
As of June 30, 2020
|
| ||||||||||||||||||||||||||||||
| | |
Estimated
Useful Life |
| |
Gross
Carrying Amount |
| |
Accumulated
Amortization |
| |
Net Book
Value |
| |
Gross
Carrying Amount |
| |
Accumulated
Amortization |
| |
Net Book
Value |
| ||||||||||||||||||
Intangible assets subject to amortization
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Software and technology
|
| |
3 years
|
| | | $ | 66,063 | | | | | $ | (58,866) | | | | | $ | 7,197 | | | | | $ | 67,222 | | | | | $ | (60,648) | | | | | $ | 6,574 | | |
Customer relationships
|
| |
3 – 10 years
|
| | | | 88,904 | | | | | | (59,744) | | | | | | 29,160 | | | | | | 96,801 | | | | | | (64,451) | | | | | | 32,350 | | |
Trademarks
|
| |
3 – 10 years
|
| | | | 22,278 | | | | | | (12,461) | | | | | | 9,817 | | | | | | 25,084 | | | | | | (14,317) | | | | | | 10,767 | | |
Non-compete agreements
|
| |
5 years
|
| | | | 150 | | | | | | (11) | | | | | | 139 | | | | | | 350 | | | | | | (33) | | | | | | 317 | | |
Total intangible assets
|
| | | | | | $ | 177,395 | | | | | $ | (131,082) | | | | | $ | 46,313 | | | | | $ | 189,457 | | | | | $ | (139,449) | | | | | $ | 50,008 | | |
| | |
Six Months Ended
June 30, |
| |||||||||
| | |
2019
|
| |
2020
|
| ||||||
Cost of subscriptions and licenses
|
| | | $ | 1,846 | | | | | $ | 2,161 | | |
Amortization of purchased intangibles
|
| | | | 6,851 | | | | | | 7,115 | | |
Total amortization expense
|
| | | $ | 8,697 | | | | | $ | 9,276 | | |
| | |
Six Months
Ended June 30, 2020 |
| |||
Operating lease cost(1)
|
| | | $ | 8,859 | | |
Variable lease cost
|
| | | | 1,882 | | |
Short-term lease cost
|
| | | | 7 | | |
Total operating lease cost
|
| | | $ | 10,748 | | |
| | |
Six Months
Ended June 30, 2020 |
| |||
Cash paid for amounts included in the measurement of lease liabilities: | | | | | | | |
Operating cash flows from operating leases
|
| | | $ | 9,003 | | |
Right-of-use assets obtained in exchange for new operating lease liabilities
|
| | | $ | 13,118 | | |
Weighted-average remaining lease term — operating leases (in years)
|
| | | | 3.83 | | |
Weighted-average discount rate — operating leases
|
| | | | 2.26% | | |
| | |
As of
June 30, 2020 |
| |||
Remainder of 2020
|
| | | $ | 9,094 | | |
2021
|
| | | | 15,875 | | |
2022
|
| | | | 12,215 | | |
2023
|
| | | | 7,886 | | |
2024
|
| | | | 4,115 | | |
Thereafter
|
| | | | 4,523 | | |
Total future lease payments
|
| | | | 53,708 | | |
Less: imputed interest
|
| | | | (3,567) | | |
Total operating lease liabilities
|
| | | $ | 50,141 | | |
| | |
As of
June 30, 2020 |
| |||
Property and equipment
|
| | | $ | 520 | | |
Accumulated depreciation
|
| | | | (108) | | |
Property and equipment, net
|
| | | $ | 412 | | |
Accruals and other current liabilities
|
| | | $ | 176 | | |
Other liabilities
|
| | | | 178 | | |
Total financing lease liabilities
|
| | | $ | 354 | | |
|
| | |
As of
December 31, 2019 |
| |||
2020
|
| | | $ | 15,886 | | |
2021
|
| | | | 13,186 | | |
2022
|
| | | | 10,385 | | |
2023
|
| | | | 6,572 | | |
2024
|
| | | | 3,216 | | |
Thereafter
|
| | | | 2,771 | | |
Total minimum lease payments
|
| | | $ | 52,016 | | |
| | |
December 31,
2019 |
| |
June 30,
2020 |
| ||||||
Cloud Services Subscription deposits
|
| | | $ | 54,688 | | | | | $ | 84,180 | | |
Accrued benefits
|
| | | | 33,184 | | | | | | 26,763 | | |
Accrued compensation
|
| | | | 31,537 | | | | | | 21,353 | | |
Due to customers
|
| | | | 8,945 | | | | | | 10,526 | | |
Accrued acquisition stay bonuses
|
| | | | 4,143 | | | | | | 5,058 | | |
Contingent consideration from acquisitions
|
| | | | 5,100 | | | | | | 4,223 | | |
Sales taxes payable
|
| | | | 5,287 | | | | | | 4,110 | | |
Accrued professional fees
|
| | | | 4,382 | | | | | | 2,591 | | |
Accrued hosting costs
|
| | | | 2,215 | | | | | | 2,121 | | |
Accrued facility costs
|
| | | | 2,168 | | | | | | 1,908 | | |
Accrued severance and realignment costs
|
| | | | 1,688 | | | | | | 825 | | |
Non-contingent consideration from acquisitions
|
| | | | 900 | | | | | | 731 | | |
Accrued rent
|
| | | | 1,909 | | | | | | — | | |
Other accrued and current liabilities
|
| | | | 11,371 | | | | | | 10,500 | | |
Total accruals and other current liabilities
|
| | | $ | 167,517 | | | | | $ | 174,889 | | |
| | |
December 31,
2019 |
| |
June 30,
2020 |
| ||||||
Bank credit facility: | | | | | | | | | | | | | |
Senior secured revolver
|
| | | $ | 233,750 | | | | | $ | 207,000 | | |
Total long-term debt
|
| | | $ | 233,750 | | | | | $ | 207,000 | | |
|
| | |
Six Months Ended
June 30, |
| |||||||||
| | |
2019
|
| |
2020
|
| ||||||
DCP related compensation (income) expense
|
| | | $ | 295 | | | | | $ | (165) | | |
| | |
Dividend
Per Share |
| |
Amount
|
| ||||||
2019: | | | | | | | | | | | | | |
Second quarter
|
| | | $ | 0.025 | | | | | $ | 6,375 | | |
First quarter
|
| | | | 0.025 | | | | | | 6,268 | | |
Total
|
| | | $ | 0.050 | | | | | $ | 12,643 | | |
2020: | | | | | | | | | | | | | |
Second quarter
|
| | | $ | 0.030 | | | | | $ | 7,771 | | |
First quarter
|
| | | | 0.030 | | | | | | 7,666 | | |
Total
|
| | | $ | 0.060 | | | | | $ | 15,437 | | |
| | |
Foreign
Currency Translation |
| |
Actuarial (Loss)
Gain on Retirement Plan |
| |
Total
|
| |||||||||
Balance, December 31, 2018
|
| | | $ | (28,867) | | | | | $ | (547) | | | | | $ | (29,414) | | |
Other comprehensive income (loss), before taxes
|
| | | | 2,406 | | | | | | 16 | | | | | | 2,422 | | |
Tax expense
|
| | | | — | | | | | | (6) | | | | | | (6) | | |
Other comprehensive income (loss), net of taxes
|
| | | | 2,406 | | | | | | 10 | | | | | | 2,416 | | |
Balance, June 30, 2019
|
| | | $ | (26,461) | | | | | $ | (537) | | | | | $ | (26,998) | | |
|
| | |
Foreign
Currency Translation |
| |
Actuarial (Loss)
Gain on Retirement Plan |
| |
Total
|
| |||||||||
Balance, December 31, 2019
|
| | | $ | (22,908) | | | | | $ | (1,019) | | | | | $ | (23,927) | | |
Other comprehensive income (loss), before taxes
|
| | | | (4,503) | | | | | | 41 | | | | | | (4,462) | | |
Tax expense
|
| | | | — | | | | | | (15) | | | | | | (15) | | |
Other comprehensive income (loss), net of taxes
|
| | | | (4,503) | | | | | | 26 | | | | | | (4,477) | | |
Balance, June 30, 2020
|
| | | $ | (27,411) | | | | | $ | (993) | | | | | $ | (28,404) | | |
| | | | | | | | |
Exercise Price Per Share
|
| ||||||
| | |
Options
Outstanding |
| |
Range
|
| |
Weighted
Average |
| ||||||
Balance, December 31, 2019
|
| | | | 18,691,667 | | | |
$3.50 – $7.24
|
| | | $ | 5.97 | | |
Option activity:
|
| | | | | | | | | | | | | | | |
Granted
|
| | | | 10,000 | | | |
10.84
|
| | | | 10.84 | | |
Exercised
|
| | | | (3,410,554) | | | |
3.50 – 7.24
|
| | | | 4.43 | | |
Canceled
|
| | | | (191,750) | | | |
3.50 – 7.24
|
| | | | 6.47 | | |
Balance, June 30, 2020
|
| | | | 15,099,363 | | | |
$5.23 – $10.84
|
| | | $ | 6.31 | | |
|
Exercise Prices
|
| |
Number of Options
Outstanding |
| |
Weighted Remaining
Contractual Life (in years) |
| |
Exercisable
|
| |||||||||
$5.23 – $6.00
|
| | | | 6,328,614 | | | | | | 1.30 | | | | | | 5,343,930 | | |
6.01 – 8.00
|
| | | | 8,760,749 | | | | | | 3.32 | | | | | | 3,068,999 | | |
8.01 – 10.84
|
| | | | 10,000 | | | | | | 4.70 | | | | | | — | | |
Total
|
| | | | 15,099,363 | | | | | | | | | | | | 8,412,929 | | |
| | |
Number of
Options |
| |
Weighted Average
Exercise Price |
| |
Aggregate
Intrinsic Value |
| |
Weighted Remaining
Contractual Life (in years) |
| ||||||||||||
Options as of June 30, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | |
Outstanding
|
| | | | 15,099,363 | | | | | $ | 6.31 | | | | | $ | 138,476 | | | | | | 2.5 | | |
Exercisable
|
| | | | 8,412,929 | | | | | $ | 5.90 | | | | | $ | 80,584 | | | | | | 1.9 | | |
| | |
Year Ended
December 31, 2019 |
| |
Six Months Ended
June 30, 2020 |
| ||||||
Expected volatility
|
| | | | 29.57% | | | | | | 31.04% | | |
Expected dividend yield
|
| | | | 1.38% | | | | | | 1.11% | | |
Risk-free interest rate
|
| | | | 2.48% | | | | | | 1.31% | | |
Expected term (in years)
|
| | | | 3.75 | | | | | | 3.75 | | |
Weighted average grant date fair value of options issued
|
| | | $ | 1.66 | | | | | $ | 2.49 | | |
December 31, 2019
|
| |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Total
|
| ||||||||||||
Assets: | | | | | | | | | | | | | | | | | | | | | | | | | |
Money market funds(1)
|
| | | $ | 70,000 | | | | | $ | — | | | | | $ | — | | | | | $ | 70,000 | | |
Total assets
|
| | | $ | 70,000 | | | | | $ | — | | | | | $ | — | | | | | $ | 70,000 | | |
Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | |
Acquisition contingent consideration(2)
|
| | | $ | — | | | | | $ | — | | | | | $ | 6,599 | | | | | $ | 6,599 | | |
Deferred compensation plan(3)
|
| | | | 2,544 | | | | | | — | | | | | | — | | | | | | 2,544 | | |
Total liabilities
|
| | | $ | 2,544 | | | | | $ | — | | | | | $ | 6,599 | | | | | $ | 9,143 | | |
|
June 30, 2020
|
| |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Total
|
| ||||||||||||
Assets: | | | | | | | | | | | | | | | | | | | | | | | | | |
Money market funds(1)
|
| | | $ | 61 | | | | | $ | — | | | | | $ | — | | | | | $ | 61 | | |
Total assets
|
| | | $ | 61 | | | | | $ | — | | | | | $ | — | | | | | $ | 61 | | |
Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | |
Acquisition contingent consideration(2)
|
| | | $ | — | | | | | $ | — | | | | | $ | 5,761 | | | | | $ | 5,761 | | |
Interest rate swap(4)
|
| | | | — | | | | | | 4,174 | | | | | | — | | | | | | 4,174 | | |
Deferred compensation plan(3)
|
| | | | 2,250 | | | | | | — | | | | | | — | | | | | | 2,250 | | |
Total liabilities
|
| | | $ | 2,250 | | | | | $ | 4,174 | | | | | $ | 5,761 | | | | | $ | 12,185 | | |
| | |
Year Ended
December 31, 2019 |
| |
Six Months
Ended June 30, 2020 |
| ||||||
Balance, beginning of year
|
| | | $ | 4,316 | | | | | $ | 6,599 | | |
Payments
|
| | | | (2,513) | | | | | | (1,091) | | |
Addition
|
| | | | 4,498 | | | | | | 1,706 | | |
Reclassification
|
| | | | 180 | | | | | | — | | |
Change in fair value
|
| | | | 62 | | | | | | (1,390) | | |
Foreign currency translation adjustments
|
| | | | 56 | | | | | | (63) | | |
Balance, end of period
|
| | | $ | 6,599 | | | | | $ | 5,761 | | |
| | |
As of
December 31, 2019 |
| |
As of
June 30, 2020 |
| ||||||
Long-lived assets: | | | | | | | | | | | | | |
Americas(1)
|
| | | $ | 34,758 | | | | | $ | 56,345 | | |
Europe, the Middle East, and Africa
|
| | | | 34,039 | | | | | | 56,889 | | |
Asia/Pacific
|
| | | | 7,148 | | | | | | 15,211 | | |
Total long-lived assets
|
| | | $ | 75,945 | | | | | $ | 128,445 | | |
| | |
Six Months Ended
June 30, |
| |||||||||
| | |
2019
|
| |
2020
|
| ||||||
Interest expense
|
| | | $ | (5,021) | | | | | $ | (2,846) | | |
Interest income
|
| | | | 547 | | | | | | 330 | | |
Total interest expense, net
|
| | | $ | (4,474) | | | | | $ | (2,516) | | |
| | |
Six Months Ended
June 30, |
| |||||||||
| | |
2019
|
| |
2020
|
| ||||||
Foreign exchange loss(1)
|
| | | $ | (1,588) | | | | | $ | (4,263) | | |
Other income (expense), net(2)
|
| | | | (159) | | | | | | (2,722) | | |
Total other income (expense), net
|
| | | $ | (1,747) | | | | | $ | (6,985) | | |
| | |
Six Months Ended June 30,
|
| |||||||||
| | |
2019
|
| |
2020
|
| ||||||
Numerator: | | | | | | | | | | | | | |
Net income
|
| | | $ | 46,418 | | | | | $ | 68,745 | | |
Less: Net income attributable to participating securities
|
| | | | (12) | | | | | | — | | |
Net income attributable to Class A and Class B common stockholders
|
| | | $ | 46,406 | | | | | $ | 68,745 | | |
Denominator: | | | | | | | | | | | | | |
Denominator for basic net income per share — weighted average shares
|
| | | | 285,529,476 | | | | | | 286,068,766 | | |
Effect of dilutive securities:
|
| | | | | | | | | | | | |
Stock options
|
| | | | 8,103,779 | | | | | | 9,526,468 | | |
Denominator for dilutive net income per share
|
| | | | 293,633,255 | | | | | | 295,595,234 | | |
Net income per share, basic
|
| | | $ | 0.16 | | | | | $ | 0.24 | | |
Net income per share, diluted
|
| | | $ | 0.16 | | | | | $ | 0.23 | | |
| | |
Amount
to be Paid |
| |||
SEC registration fee
|
| | | $ | 30,485 | | |
FINRA filing fee
|
| | | | 35,729 | | |
The Nasdaq Global Select Market initial listing fee
|
| | | | 295,000 | | |
Printing expenses
|
| | | | 350,000 | | |
Legal fees and expenses
|
| | | | 3,300,000 | | |
Accounting fees and expenses
|
| | | | 1,950,000 | | |
Custodian, transfer agent, and registrar fees
|
| | | | 85,000 | | |
Miscellaneous
|
| | | | 30,000 | | |
Total
|
| | | $ | 6,076,214 | | |
|
Signature
|
| |
Title
|
| |
Date
|
| |||
|
/s/ Gregory S. Bentley
Gregory S. Bentley
|
| | Chief Executive Officer and Director (Principal Executive Officer) | | |
September 15, 2020
|
| |||
|
/s/ David J. Hollister
David J. Hollister
|
| | Chief Financial Officer (Principal Financial Officer) | | |
September 15, 2020
|
| |||
|
/s/ Werner Andre
Werner Andre
|
| | Chief Accounting Officer (Principal Accounting Officer) | | |
September 15, 2020
|
| |||
|
*
Keith A. Bentley
|
| | Director | | |
September 15, 2020
|
| |||
|
*
Barry J. Bentley
|
| | Director | | |
September 15, 2020
|
| |||
|
*
Raymond B. Bentley
|
| | Director | | |
September 15, 2020
|
| |||
|
*
Kirk B. Griswold
|
| | Director | | |
September 15, 2020
|
| |||
|
*
Brian F. Hughes
|
| | Director | | |
September 15, 2020
|
| |||
|
*By:
|
| |
/s/ David J. Hollister
Name: David J. Hollister
Title: Attorney-in-Fact |
| | |
Exhibit 1.1
Bentley Systems, Incorporated
Class B Common Stock, par value $0.01 per share
Underwriting Agreement
[___], 2020
Goldman
Sachs & Co. LLC
BofA Securities, Inc.
As representatives (the “Representatives”) of the several Underwriters named in Schedule I hereto
c/o Goldman Sachs & Co. LLC
200 West Street
New York, New York 10282
c/o BofA Securities, Inc.
One Bryant Park
New York, New York 10036
Ladies and Gentlemen:
The stockholders named in Schedule II hereto (the “Selling Stockholders”) of Bentley Systems, Incorporated, a Delaware corporation (the “Company”), propose, subject to the terms and conditions stated in this agreement (this “Agreement”), to sell to the Underwriters named in Schedule I hereto (the “Underwriters”) an aggregate of [____] shares (the “Firm Shares”) and, at the election of the Underwriters, up to [____] additional shares (the “Optional Shares”) of Class B common stock, par value $0.01 per share, (the “Stock”) of the Company. The Firm Shares and the Optional Shares that the Underwriters elect to purchase pursuant to Section 2 hereof are herein collectively called the “Shares”.
1. (a) The Company represents and warrants to, and agrees with, each of the Underwriters that:
(i) A registration statement on Form S–1 (File No. 333- 248246) (the “Initial Registration Statement”) in respect of the Shares has been filed with the Securities and Exchange Commission (the “Commission”); the Initial Registration Statement and any post-effective amendment thereto, each in the form heretofore delivered to you, have been declared effective by the Commission in such form; other than a registration statement, if any, increasing the size of the offering (a “Rule 462(b) Registration Statement”), filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the “Act”), which became effective upon filing, no other document with respect to the Initial Registration Statement has been filed with the Commission; and no stop order suspending the effectiveness of the Initial Registration Statement, any post-effective amendment thereto or the Rule 462(b) Registration Statement, if any, has been issued and no proceeding for that purpose has been initiated or, to the Company’s knowledge, threatened by the Commission (any preliminary prospectus included in the Initial Registration Statement or filed with the Commission pursuant to Rule 424(a) under the Act is hereinafter called a “Preliminary Prospectus”; the various parts of the Initial Registration Statement and the Rule 462(b) Registration Statement, if any, including all exhibits thereto and including the information contained in the form of final prospectus filed with the Commission pursuant to Rule 424(b) under the Act in accordance with Section 5(a) hereof and deemed by virtue of Rule 430A under the Act to be part of the Initial Registration Statement at the time it was declared effective, each as amended at the time such part of the Initial Registration Statement became effective or such part of the Rule 462(b) Registration Statement, if any, became or hereafter becomes effective, are hereinafter collectively called the “Registration Statement”; the Preliminary Prospectus relating to the Shares that was included in the Registration Statement immediately prior to the Applicable Time (as defined in Section 1(a)(iii) hereof) is hereinafter called the “Pricing Prospectus”; such final prospectus, in the form first filed pursuant to Rule 424(b) under the Act, is hereinafter called the “Prospectus”; any oral or written communication with potential investors undertaken in reliance on Section 5(d) of the Act is hereinafter called a “Testing-the-Waters Communication”; and any Testing-the-Waters Communication that is a written communication within the meaning of Rule 405 under the Act is hereinafter called a “Written Testing-the-Waters Communication”; and any “issuer free writing prospectus” as defined in Rule 433 under the Act relating to the Shares is hereinafter called an “Issuer Free Writing Prospectus”);
(ii) (A) No order preventing or suspending the use of any Preliminary Prospectus or any Issuer Free Writing Prospectus has been issued by the Commission, and (B) each Preliminary Prospectus, at the time of filing thereof, conformed in all material respects to the requirements of the Act and the rules and regulations of the Commission thereunder, and did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with the Underwriter Information (as defined in Section 9(c) of this Agreement);
(iii) For the purposes of this Agreement, the “Applicable Time” is [___:___] p.m. (Eastern time) on the date of this Agreement; the Pricing Prospectus, as supplemented by the information listed on Schedule III(c) hereto, taken together (collectively, the “Pricing Disclosure Package”), as of the Applicable Time, did not, and as of each Time of Delivery (as defined in Section 4(a) of this Agreement) will not, include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and each Issuer Free Writing Prospectus and each Written Testing-the-Waters Communication does not conflict with the information contained in the Registration Statement, the Pricing Prospectus or the Prospectus, and each Issuer Free Writing Prospectus and each Written Testing-the-Waters Communication, as supplemented by and taken together with the Pricing Disclosure Package, as of the Applicable Time, did not, and as of each Time of Delivery, will not, include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to statements or omissions made in reliance upon and in conformity with the Underwriter Information;
(iv) No documents were filed with the Commission since the Commission’s close of business on the business day immediately prior to the date of this Agreement and prior to the execution of this Agreement, except as set forth on Schedule III(b) hereto;
2
(v) The Registration Statement conforms, and the Prospectus and any further amendments or supplements to the Registration Statement and the Prospectus will conform, in all material respects to the requirements of the Act and the rules and regulations of the Commission thereunder and do not and will not, as of the applicable effective date as to each part of the Registration Statement, as of the applicable filing date as to the Prospectus and any amendment or supplement thereto, and as of each Time of Delivery, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with the Underwriter Information
(vi) Neither the Company nor any of its subsidiaries, taken as a whole, has, since the date of the latest financial statements included in the Pricing Prospectus, (A) sustained any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree or (B) entered into any transaction or agreement (whether or not in the ordinary course of business) that is material to the Company and its subsidiaries taken as a whole or incurred any liability or obligation, direct or contingent, that is material to the Company and its subsidiaries taken as a whole, in each case otherwise than as set forth or contemplated in the Pricing Prospectus; and, since the respective dates as of which information is given in the Registration Statement and the Pricing Prospectus, there has not been (x) any change in the capital stock (other than as a result of (i) the exercise, if any, of stock options or the award, if any, of stock options or restricted stock in the ordinary course of business pursuant to the Company’s equity plans that are described in the Pricing Prospectus and the Prospectus or (ii) the issuance, if any, of stock upon conversion of Company securities as described in the Pricing Prospectus and the Prospectus) or long-term debt of the Company or any of its subsidiaries or (y) any Material Adverse Effect (as defined below); as used in this Agreement, “Material Adverse Effect” shall mean any material adverse change or effect, or any development that would reasonably be expected to result in a material adverse change or effect, in or affecting (i) the business, management, financial position, stockholders’ equity or results of operations of the Company and its subsidiaries, taken as a whole, except as set forth or contemplated in the Pricing Prospectus, or (ii) the ability of the Company to perform its obligations under this Agreement or to consummate the transactions contemplated in the Pricing Prospectus and the Prospectus;
(vii) The Company and its subsidiaries have good and marketable title in fee simple to all real property and good and marketable title to all personal property owned by them, in each case free and clear of all liens, encumbrances and defects except such as are described in the Pricing Prospectus or such as do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company and its subsidiaries, taken as a whole; and any real property and buildings held under lease by the Company and its subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as would not, individually or in the aggregate, have a Material Adverse Effect;
(viii) Each of the Company and each of its subsidiaries has been (A) duly organized and is validly existing and in good standing under the laws of its jurisdiction of organization, with power and authority (corporate and other) to own its properties and conduct its business as described in the Pricing Prospectus, and (B) duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, except, in the case of the foregoing clause (B), where the failure to be so qualified or in good standing would not, individually or in the aggregate, have a Material Adverse Effect;
3
(ix) The Company has an authorized capitalization as set forth in the Pricing Prospectus and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable and conform, in all material respects, to the description of the Stock contained in the Pricing Disclosure Package and the Prospectus; and all of the issued shares of capital stock of each subsidiary of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and (except, in the case of any foreign subsidiary, for directors’ qualifying shares) are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims, except for such liens or encumbrances described in the Pricing Prospectus and the Prospectus;
(x) The compliance by the Company with this Agreement and the consummation of the transactions contemplated in this Agreement and the Pricing Prospectus will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, (A) any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, except, in the case of this clause (A) for such defaults, breaches, or violations that would not, individually or in the aggregate, have a Material Adverse Effect or impair the ability of the Company to perform its obligations under this Agreement or to consummate the transactions contemplated in the Pricing Prospectus and the Prospectus, (B) the certificate of incorporation or by-laws (or other applicable organizational document) of the Company or any of its subsidiaries, or (C) any statute or any judgment, order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their properties, except in the case of this clause (C), as would not, individually or in the aggregate, have a Material Adverse Effect or impair the ability of the Company to perform its obligations under this Agreement or to consummate the transactions contemplated in the Pricing Prospectus and the Prospectus; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the sale of the Shares or the consummation by the Company of the transactions contemplated by this Agreement, except such as have been obtained under the Act, the approval by the Financial Industry Regulatory Authority (“FINRA”) of the underwriting terms and arrangements and such consents, approvals, authorizations, orders, registrations or qualifications as may be required under applicable state securities or Blue Sky laws in connection with the purchase and distribution of the Shares by the Underwriters;
(xi) Neither the Company nor any of its subsidiaries is (A) in violation of its certificate of incorporation or by-laws (or other applicable organization document), (B) in violation of any applicable statute or any judgment, order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their properties, or (C) in default in the performance or observance of any obligation, agreement, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it or any of its properties is bound, except, in the case of the foregoing clauses (B) and (C), for such defaults as would not, individually or in the aggregate, have a Material Adverse Effect;
(xii) The statements set forth in the Pricing Prospectus and the Prospectus under the caption “Description of Capital Stock”, insofar as they purport to constitute a summary of the terms of the Stock, and under the captions “Material U.S. Federal Income Tax Consequences to Non-U.S. Holders” and “Underwriting”, insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate, complete and fair in all material respects;
4
(xiii) Other than as set forth in the Pricing Prospectus, there are no legal or governmental proceedings pending or, to the knowledge of the Company, threatened or contemplated, to which the Company or any of its subsidiaries or, to the Company’s knowledge, any officer or director of the Company is a party or of which any property or assets of the Company or any of its subsidiaries or, to the Company’s knowledge, any officer or director of the Company is the subject which, if determined adversely to the Company or any of its subsidiaries (or such officer or director), would individually or in the aggregate have a Material Adverse Effect;
(xiv) The Company is not an “investment company”, as such term is defined in the Investment Company Act of 1940, as amended (the “Investment Company Act”);
(xv) At the time of filing the Initial Registration Statement and any post-effective amendment thereto, at the earliest time thereafter that the Company or any offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the Act) of the Shares, and at the date hereof, the Company was not and is not an “ineligible issuer,” as defined in Rule 405 under the Act;
(xvi) KPMG LLP, who have certified certain financial statements of the Company and its subsidiaries, is an independent registered public accounting firm as required by the Act and the rules and regulations of the Commission thereunder;
(xvii) The Company maintains a system of internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that (A) complies with the requirements of the Exchange Act, (B) has been designed by the Company’s principal executive officer and principal financial officer, or under their supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles (“GAAP”) and (C) is sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorization, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets, (iii) access to assets is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences; and the Company’s internal control over financial reporting is effective and the Company is not aware of any material weaknesses in its internal control over financial reporting (it being understood that this subsection shall not require the Company to comply with Section 404(b) of the Sarbanes-Oxley Act (as defined in Section 1(xli) as of an earlier date than it would otherwise be required to so comply under applicable law);
(xviii) Since the date of the latest audited financial statements included in the Pricing Prospectus, there has been no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting;
(xix) The Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) that comply with the requirements of the Exchange Act applicable to the Company; such disclosure controls and procedures are designed to ensure that material information relating to the Company and its subsidiaries is made known to the Company’s principal executive officer and principal financial officer by others within those entities; and such disclosure controls and procedures are effective;
5
(xx) This Agreement has been duly authorized, executed and delivered by the Company;
(xxi) None of the Company or any of its subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee, controlled affiliate or other person associated with or acting on behalf of the Company or any of its subsidiaries has (A) made, offered, promised or authorized any unlawful contribution, gift, entertainment or other unlawful expense (or taken any act in furtherance thereof); (B) made, offered, promised or authorized any direct or indirect unlawful payment or benefit to any foreign or domestic government official or employee, including of any government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office (or taken any act in furtherance thereof); (C) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, the Bribery Act 2010 of the United Kingdom, any applicable law or regulation implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions or any other applicable anti-bribery or anti-corruption law; or (D) made, offered, agreed, requested or taken an act in furtherance of any unlawful bribe or other unlawful benefit, including, without limitation, any rebate, payoff, influence payment, kickback or other unlawful or improper payment or benefit; and the Company and its subsidiaries and controlled affiliates have conducted their businesses in compliance with applicable anti-corruption laws and have instituted and maintained and continue to maintain policies and procedures designed to promote and achieve compliance with such laws and with the representations and warranties contained herein;
(xxii) The operations of the Company and its subsidiaries are and have been conducted at all times in compliance with the requirements of applicable anti-money laundering laws, including, but not limited to, the Bank Secrecy Act of 1970, as amended by the USA PATRIOT ACT of 2001, and the rules and regulations promulgated thereunder, and the anti-money laundering laws of the various jurisdictions in which the Company and its subsidiaries conduct business (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened;
(xxiii) (A) None of the Company or any of its subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee or controlled affiliate of the Company or any of its subsidiaries (i) is currently the subject or the target of any sanctions administered or enforced by the U.S. Government, including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury, or the U.S. Department of State and including, without limitation, the designation as a “specially designated national” or “blocked person,” the European Union, Her Majesty’s Treasury or the United Nations Security Council (collectively, “Sanctions”) nor is the Company or any of its subsidiaries located, organized, or resident in a country or territory that is the subject or target of Sanctions (at the time of this agreement, Crimea, Cuba, Iran, North Korea and Syria), (ii) does any business with or involving the government of, or any person or project located in, any country targeted by any Sanctions (at the time of this agreement, Crimea, Cuba, Iran, North Korea and Syria); or (iii) supports or facilitates any such business or project, in each case of the foregoing clauses (i), (ii) and (iii), other than as permitted under such Sanctions; (B) the Company is not controlled (within the meaning of the executive orders or regulations promulgated Sanctions) by any government or person that is the subject or target of Sanctions; (C) the Company will not directly or knowingly indirectly use the proceeds of the offering of the Shares hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity (i) for the purpose of funding or facilitating any activities of or business with any person, or in any country or territory, that, at the time of such funding, is the subject or the target of Sanctions or (ii) in any other manner that will result in a violation by any person (including any person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions; and (D) the Company has implemented and maintains adequate internal controls and procedures designed to promote and ensure compliance with all applicable Sanctions;
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(xxiv) The Company and its subsidiaries are, and for the past five (5) years have been, in compliance with all applicable Sanctions laws, regulations, statutes, and orders, and in compliance in all material respects with all applicable export control laws, regulations, statutes, and orders. For the past five (5) years, neither Company nor any of its subsidiaries has received any written notice of or been charged with the violation of any such laws.
(xxv) The financial statements included in the Registration Statement, the Pricing Prospectus and the Prospectus, together with the related schedules and notes, present fairly, in all material respects, the financial position of the Company and its subsidiaries at the dates indicated and the statement of operations, stockholders’ equity and cash flows of the Company and its subsidiaries for the periods specified; said financial statements have been prepared in conformity with GAAP applied on a consistent basis throughout the periods involved. The supporting schedules, if any, present fairly, in all material respects and in accordance with GAAP the information required to be stated therein. The selected financial data and the summary financial information included in the Registration Statement, the Pricing Prospectus and the Prospectus present fairly, in all material respects, the information shown therein and, other than non-GAAP financial measures, have been compiled on a basis consistent with that of the audited financial statements included therein. Except as included therein, no historical or pro forma financial statements or supporting schedules are required to be included in the Registration Statement, the Pricing Prospectus or the Prospectus under the Act or the rules and regulations promulgated thereunder. All disclosures contained in the Registration Statement, the Pricing Prospectus and the Prospectus regarding “non-GAAP financial measures” (as such term is defined by the rules and regulations of the Commission) comply with Regulation G of the Exchange Act and Item 10 of Regulation S-K of the Act, to the extent applicable;
(xxvi) There are no persons with registration rights or other similar rights to have any securities registered pursuant to the Registration Statement or otherwise registered by the Company under the Act, except as have been validly waived or complied with;
(xxvii) The Company and its subsidiaries own or possess, or can acquire on reasonable terms, adequate rights to use all patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names or other technology or intellectual property rights (collectively, “Intellectual Property”) used in or necessary to carry on the business now operated by them and as described in the Pricing Prospectus and the Prospectus to be operated by them (the “Company Intellectual Property”), except as would not, individually or in the aggregate, have a Material Adverse Effect. Other than as set forth in the Pricing Prospectus and the Prospectus, neither the Company nor any of its subsidiaries has received any notice of any claim of infringement or misappropriation of, or conflict with, asserted rights of others with respect to any Intellectual Property that would render any Intellectual Property invalid or inadequate to protect the interest of the Company and any of its subsidiaries therein, except as would not individually or in the aggregate have a Material Adverse Effect. Except as described in the Pricing Prospectus and the Prospectus, there is no pending (or to the Company’s knowledge, threatened) action, suit, proceeding or claim by others challenging the Company’s rights or any of the subsidiaries’ rights in or to any Company Intellectual Property or challenging the validity, enforceability or scope of any Company Intellectual Property except where the outcome of which would not reasonably be expected to have a Material Adverse Effect. The Company and its subsidiaries have taken all reasonable steps necessary to secure interests in the Company Intellectual Property from their employees, consultants, agents and contractors, except as would not, individually or in the aggregate, have a Material Adverse Effect. Neither the Company nor any of its subsidiaries has used or distributed any software and other materials distributed under a “free,” “open source,” or similar licensing model (including but not limited to the GNU General Public License, GNU Lesser General Public License and GNU Affero General Public License) in a manner that requires or has required (i) the Company or any of its subsidiaries to permit reverse-engineering of any products or services of the Company or any of its subsidiaries, or any software code or other technology owned by the Company or any of its subsidiaries; or (ii) any products or services of the Company or any of its subsidiaries, or any software code or other technology owned by the Company or any of its subsidiaries, to be (A) disclosed or distributed in source code form, (B) licensed for the purpose of making derivative works or (C) redistributable at no charge, except, in the case of each of the preceding (i) and (ii), such as would not be reasonably expected to have a Material Adverse Effect;
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(xxviii) To the Company’s knowledge, the information technology systems, equipment and software used by the Company or any of its subsidiaries in their respective businesses (the “IT Assets”) (A) operate and perform in all material respects in accordance with their documentation and functional specifications and otherwise as required by the Company’s and its subsidiaries’ respective businesses as currently conducted, (B) have not materially malfunctioned or failed in the last two (2) years and (C) are free of any viruses, “back doors,” “Trojan horses,” “time bombs,” “worms,” “drop dead devices” or other software or hardware components that are designed to interrupt use of, permit unauthorized access to, or disable, damage or erase, any software material to the business of the Company or any of its subsidiaries. The Company and its subsidiaries have implemented commercially reasonable backup and disaster recovery technology processes. To the Company’s knowledge, no person has gained unauthorized access to any material IT Asset in the last three (3) years;
(xxix) Except as would not, individually or in the aggregate, have a Material Adverse Effect, the Company and its subsidiaries (A) operate their respective businesses in a manner compliant with all privacy, data security and data protection laws and regulations applicable to the Company’s and its subsidiaries’ receipt, collection, handling, processing, sharing, transfer, usage, disclosure or storage of all user data and all other information, including personally identifiable information, financial data, IP addresses, mobile device identifiers and website usage activity (“Personal and Device Data”), all public-facing policies and statements of the Company and its subsidiaries and all contractual obligations entered into by the Company and its subsidiaries, (B) have implemented, maintain and are in compliance with policies and procedures designed to ensure the privacy, integrity, security and confidentiality of all Personal and Device Data handled, processed, collected, shared, transferred, used, disclosed and/or stored by the Company or its subsidiaries in connection with the Company’s and its subsidiaries’ operation of their respective businesses, (C) have and are in compliance with policies and procedures designed to ensure privacy and data protection laws are complied with, and (D) have not experienced any security incident that has compromised the privacy and/or security of any Personal and Device Data;
(xxx) Any statistical, industry-related and market-related data included in the Pricing Prospectus and the Prospectus are based on or derived from sources that the Company believes, after reasonable inquiry, to be reliable and accurate and, to the extent required, the Company has obtained the written consent to the use of such data from such sources;
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(xxxi) The Company and its subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the business in which it is engaged; the Company and its subsidiaries have not been refused any insurance coverage sought or applied for; and neither the Company nor its subsidiaries has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not individually or in the aggregate have a Material Adverse Effect on the current or future consolidated financial position, stockholders’ equity or results of operations of the Company and its subsidiaries;
(xxxii) The Company and its subsidiaries have no off-balance sheet arrangements (as defined in Regulation S-K Item 303(a)(4)(ii)) that may have a material current or future effect on the Company’s financial condition, changes in financial condition, results of operations, liquidity, capital expenditures or capital resources;
(xxxiii) Except as would not individually or in the aggregate have a Material Adverse Effect, (A) each Plan (as defined below) has been sponsored, maintained and contributed to in compliance with its terms and the requirements of any applicable laws, statutes, orders, rules and regulations, including but not limited to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and the Internal Revenue Code of 1986, as amended (the “Code”); (B) no non-exempt prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any Plan; (C) for each Plan, no failure to satisfy the minimum funding standards (within the meaning of Section 412 of the Code or Section 302 of ERISA), whether or not waived, has occurred or is reasonably expected to occur; (D) no “reportable event” (within the meaning of Section 4043(c) of ERISA, other than those events as to which notice is waived) has occurred or is reasonably expected to occur; (E) neither the Company nor any member of its “Controlled Group” (defined as any organization which is a member of a controlled group of corporations within the meaning of Section 414 of the Code) has incurred, nor is reasonably expected to incur, any liability under Title IV of ERISA (other than contributions to any Plan or any Multiemployer Plan or premiums to the PBGC, in the ordinary course and without default) in respect of a Plan or a Multiemployer Plan; and (F) there is no pending audit or investigation by the U.S. Internal Revenue Service, the U.S. Department of Labor, the Pension Benefit Guaranty Corporation or any other governmental agency or any foreign regulatory agency with respect to any Plan. Each Plan that is intended to be qualified under Section 401(a) of the Code has received a favorable determination or opinion letter from the U.S. Internal Revenue Service or has time remaining to do so and, to the knowledge of the Company, nothing has occurred, whether by action or by failure to act, which would reasonably be expected to cause the loss of such qualification. None of the following events has occurred or is reasonably likely to occur: (x) a material increase in the aggregate amount of contributions required to be made to all Plans by the Company or its subsidiaries in the current fiscal year of the Company and its subsidiaries compared to the amount of such contributions made in the Company’s and its subsidiaries’ most recently completed fiscal year; or (y) a material increase in the Company’s and its subsidiaries’ “accumulated post-retirement benefit obligations” (within the meaning of FASB Accounting Standards Codification Topic 715) compared to the amount of such obligations in the Company’s and its subsidiaries’ most recently completed fiscal year. For purposes of this paragraph, (1) the term “Plan” means an employee benefit plan, within the meaning of Section 3(3) of ERISA, subject to Title IV of ERISA, but excluding any Multiemployer Plan, for which the Company or any member of its “Controlled Group” (defined as any organization which is a member of a controlled group of corporations within the meaning of Section 414(b), (c), (m) or (o) of the Code) has any liability and (2) the term “Multiemployer Plan” means a multiemployer plan within the meaning of Section 4001(a)(3) of ERISA;
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(xxxiv) No labor disturbance by or dispute with employees of the Company or any of its subsidiaries exists or, to the knowledge of the Company, is contemplated or threatened, and the Company is not aware of any existing or imminent labor disturbance by, or dispute with, the employees of any of its or its subsidiaries’ principal suppliers, contractors or customers, except as would not have a Material Adverse Effect;
(xxxv) The Company and each of its subsidiaries have filed all material tax returns required to be filed through the date hereof, subject to permitted extensions, and have paid all material taxes (whether or not shown as due on any tax return), except, in each case, for any taxes being contested in good faith by appropriate proceedings and for which adequate reserves have been provided in accordance with GAAP. No material tax deficiency has been determined or proposed to be determined adversely to the Company or any of its subsidiaries and the Company does not have any knowledge of any such tax deficiencies;
(xxxvi) From the time of initial confidential submission of a registration statement relating to the Shares with the Commission (or, if earlier, the first date on which a Testing-the-Waters Communication was made) through the date hereof, the Company has been and is an “emerging growth company” as defined in Section 2(a)(19) of the Act (an “Emerging Growth Company”);
(xxxvii) The Company and its subsidiaries possess all licenses, sub-licenses, certificates, permits and other authorizations issued by, and have made all declarations and filings with, the appropriate federal, state, local or foreign governmental or regulatory authorities that are necessary for the ownership or lease of their respective properties or the conduct of their respective businesses as described in each of the Registration Statement, the Pricing Prospectus and the Prospectus, except where the failure to possess or make the same would not, individually or in the aggregate, have a Material Adverse Effect; and except as described in each of the Registration Statement, the Pricing Prospectus Package and the Prospectus, neither the Company nor any of its subsidiaries has received notice of any revocation or modification of any such license, sub-license, certificate, permit or authorization, except where such revocation or modification would not, individually or in the aggregate, have a Material Adverse Effect;
(xxxviii) (A) The Company and its subsidiaries (x) are in compliance with all, and have not violated any, applicable federal, state, local and foreign laws (including common law), rules, regulations, requirements, decisions, judgments, decrees, orders and other legally enforceable requirements relating to pollution or the protection of human health or safety, the environment, natural resources, hazardous or toxic substances or wastes, pollutants or contaminants (collectively, “Environmental Laws”); (y) have received and are in compliance with all, and have not violated any, permits, licenses, certificates or other authorizations or approvals required of them under any Environmental Laws to conduct their respective businesses; and (z) have not received notice of any actual or potential liability or obligation under or relating to, or any actual or potential violation of, any Environmental Laws, including for the investigation or remediation of any disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants, and have no knowledge of any event or condition that would reasonably be expected to result in any such notice, and (B) there are no costs or liabilities associated with Environmental Laws of or relating to the Company or its subsidiaries, except in the case of each of (A) and (B) above, for any such matter as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and (C)(x) there is no proceeding that is pending, or that is known to be contemplated, against the Company or any of its subsidiaries under any Environmental Laws in which a governmental entity is also a party, regarding which it is reasonably believed that monetary sanctions of $100,000 or more will be imposed, (y) the Company and its subsidiaries are not aware of any facts or issues regarding compliance with Environmental Laws, or liabilities or other obligations under Environmental Laws or concerning hazardous or toxic substances or wastes, pollutants or contaminants, that would reasonably be expected to have a material effect on the capital expenditures, earnings or competitive position of the Company and its subsidiaries, and (z) none of the Company or its subsidiaries anticipates material capital expenditures relating to any Environmental Laws.
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(xxxix) Neither the Company nor any of its subsidiaries or affiliates has taken, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Shares (it being understood that the Company makes no representation with respect to any action taken by any Underwriter or their affiliates);
(xl) Neither the Company nor any of its subsidiaries is a party to any contract, agreement or understanding with any person (other than this Agreement) that would give rise to a valid claim against any of them or any Underwriter for a brokerage commission, finder’s fee or like payment in connection with the offering and sale of the Shares.
(xli) There is and has been no failure on the part of the Company or any of the Company’s directors or officers, in their capacities as such, to comply with any provision of the Sarbanes-Oxley Act of 2002, as amended and the rules and regulations promulgated in connection therewith (the “Sarbanes-Oxley Act”), including Section 402 related to loans;
(xlii) There are (and prior to each Time of Delivery, will be) no debt securities, convertible securities or preferred stock issued or guaranteed by the Company or any of its subsidiaries that are rated by a “nationally recognized statistical rating organization”, as such term is defined in Section 3(a)(62) under the Exchange Act;
(xliii) No relationship, direct or indirect, exists between or among the Company or any of its subsidiaries, on the one hand, and the directors, officers, stockholders, customers, suppliers or other affiliates of the Company or any of its subsidiaries, on the other, that is required by the Securities Act to be described in each of the Registration Statement and the Prospectus and that is not so described in such documents and in the Pricing Prospectus. As of the date of the initial filing of the Registration Statement, there were no outstanding personal loans made, directly or indirectly, by the Company to any director or executive officer of the Company, except for such extensions of credit as are expressly permitted by Section 13(k) of the Exchange Act; and
(xliv) No subsidiary of the Company is currently prohibited, directly or indirectly, under any agreement or other instrument to which it is a party or is subject, from paying any dividends to the Company, from making any other distribution on such subsidiary’s capital stock or similar ownership interest, from repaying to the Company any loans or advances to such subsidiary from the Company or from transferring any of such subsidiary’s properties or assets to the Company or any other subsidiary of the Company.
(b) Each of the Selling Stockholders, severally and not jointly, represents and warrants to, and agrees with, each of the Underwriters and the Company that:
(i) All consents, approvals, authorizations and orders necessary for the execution and delivery by such Selling Stockholder of this Agreement and the Power of Attorney and the Custody Agreement referred to below, and for the sale and delivery of the Shares to be sold by such Selling Stockholder hereunder, have been obtained except for the registration under the Act of the Shares and such consents, approvals, authorizations and orders as may be required under state securities or Blue Sky laws, the rules and regulations of FINRA or the approval for listing on the Exchange or such other approvals as have been or will be made or obtained on or prior to the First Time of Delivery (as defined in Section 4 hereof); and such Selling Stockholder has full right, power and authority to enter into this Agreement, the Power-of-Attorney and the Custody Agreement and to sell, assign, transfer and deliver the Shares to be sold by such Selling Stockholder hereunder;
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(ii) The sale of the Shares to be sold by such Selling Stockholder hereunder and the compliance by such Selling Stockholder with this Agreement, the Power of Attorney and the Custody Agreement and the consummation of the transactions herein and therein contemplated will not (A) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any statute, indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which such Selling Stockholder is a party or by which such Selling Stockholder is bound or to which any of the property or assets of such Selling Stockholder is subject, (B) nor will such action result in any violation of (1) the provisions of the Certificate of Incorporation or By-laws of such Selling Stockholder if such Selling Stockholder is a corporation, the Partnership Agreement of such Selling Stockholder if such Selling Stockholder is a partnership (or similar applicable organizational document) or (2) any statute or any judgment, order, rule or regulation of any court or governmental agency or body having jurisdiction over such Selling Stockholder or any of its subsidiaries or any property or assets of such Selling Stockholder, except, in the case of clauses (A) and (B)(2) above, for any such conflict, breach or violation that would not, individually or in the aggregate, impair the ability of such Selling Stockholder to consummate the transactions contemplated by this Agreement; and no consent, approval, authorization or order of, or registration or qualification with any such court or governmental body or agency having jurisdiction over such Selling Stockholder is required for the performance by such Selling Stockholder of its obligations under this Agreement, the Power of Attorney and the Custody Agreement and the consummation by such Selling Stockholder of the transactions contemplated by this Agreement, the Power of Attorney and the Custody Agreement in connection with the Shares to be sold by such Selling Stockholder hereunder, except the registration under the Act of the Shares and such consents, approvals, authorizations, orders, registrations or qualifications as may be required by FINRA, the Exchange or applicable state securities or Blue Sky laws in connection with the purchase and distribution of the Shares by the Underwriters or as have already been obtained;
(iii) Such Selling Stockholder has, and immediately prior to each Time of Delivery (as defined in Section 4 hereof) such Selling Stockholder will have, good and valid title to, or a valid “security entitlement” within the meaning of Section 8-501 of the New York Uniform Commercial Code in respect of, the Shares to be sold by such Selling Stockholder hereunder at such Time of Delivery, free and clear of all liens, encumbrances, equities or claims, other than those under the Custody Agreement; and, upon delivery of such Shares and payment therefor pursuant hereto, good and valid title to such Shares, free and clear of all liens, encumbrances, equities or claims, will pass to the several Underwriters;
(iv) On or prior to the date of the Pricing Prospectus, such Selling Stockholder has executed and delivered to the Underwriters an agreement substantially in the form of Annex II hereto.
(v) Such Selling Stockholder has not taken and will not take, directly or indirectly, any action that is designed to or that has constituted or could reasonably be expected to cause or result in stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares;
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(vi) To the extent that any statements or omissions made in the Registration Statement, any Preliminary Prospectus, the Prospectus or any amendment or supplement thereto are made in reliance upon and in conformity with information furnished in writing to the Company by such Selling Stockholder expressly for use therein (it being understood and agreed upon that the only such information furnished by any Selling Stockholder consists of the following in-formation furnished on behalf of such Selling Stockholder: its name, its address and the number of shares of Stock owned by such Selling Stockholder before and after the offering contemplated hereby and the other information with respect to such Selling Stockholder (other than percentages) that appears in the table and corresponding footnotes under the caption “Principal and Selling Stockholders” in the Registration Statement, any Preliminary Prospectus, the Prospectus or any amendment or supplement thereto (such information, the “Selling Stockholder Information”), such Registration Statement and Preliminary Prospectus, and the Prospectus and any further amendments or supplements to the Registration Statement and the Prospectus will, when they become effective or are filed with the Commission, as the case may be, did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading;
(vii) In order to document the Underwriters’ compliance with the reporting and withholding provisions of the Tax Equity and Fiscal Responsibility Act of 1982 with respect to the transactions herein contemplated, such Selling Stockholder will deliver to you prior to or at the First Time of Delivery a properly completed and executed United States Treasury Department Form W-9 or applicable W-8 (or other applicable form or statement specified by Treasury Department regulations in lieu thereof);
(viii) Certificates in negotiable form or book-entry securities entitlements representing all of the Shares to be sold by such Selling Stockholder hereunder have been placed in custody under a Custody Agreement, in the form heretofore furnished to you (the “Custody Agreement”), duly executed and delivered by such Selling Stockholder to Computershare Inc., as custodian (the “Custodian”), and such Selling Stockholder has duly executed and delivered a Power of Attorney, in the form heretofore furnished to you (the “Power of Attorney”), appointing the persons indicated in Schedule II hereto, and each of them, as such Selling Stockholder’s attorneys-in-fact (the “Attorneys-in-Fact”) with authority to execute and deliver this Agreement on behalf of such Selling Stockholder, to determine the purchase price to be paid by the Underwriters to the Selling Stockholders as provided in Section 2 hereof, to authorize the delivery of the Shares to be sold by such Selling Stockholder hereunder and otherwise to act on behalf of such Selling Stockholder in connection with the transactions contemplated by this Agreement and the Custody Agreement;
(ix) The Shares held in custody for such Selling Stockholder under the Custody Agreement are subject to the interests of the Underwriters hereunder; the arrangements made by such Selling Stockholder for such custody, and the appointment by such Selling Stockholder of the Attorneys-in-Fact by the Power of Attorney, are to that extent irrevocable; the obligations of the Selling Stockholders hereunder shall not be terminated by operation of law, whether by the death or incapacity of any individual Selling Stockholder or, in the case of an estate or trust, by the death or incapacity of any executor or trustee or the termination of such estate or trust, or in the case of a partnership or corporation, by the dissolution of such partnership, limited liability company or corporation, or by the occurrence of any other event; if any individual Selling Stockholder or any such executor or trustee should die or become incapacitated, or if any such estate or trust should be terminated, or if any such partnership, limited liability company or corporation should be dissolved, or if any other such event should occur, before the delivery of the Shares to be sold by such Selling Stockholder hereunder, certificates or book-entry securities representing the Shares to be sold by such Selling Stockholder hereunder shall be delivered by or on behalf of such Selling Stockholder in accordance with the terms and conditions of this Agreement and of the Custody Agreements; and actions taken by the Attorneys-in-Fact pursuant to the Powers of Attorney shall be as valid as if such death, incapacity, termination, dissolution or other event had not occurred, regardless of whether or not the Custodian, the Attorneys-in-Fact, or any of them, shall have received notice of such death, incapacity, termination, dissolution or other event; and
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(x) Such Selling Stockholder will not directly or indirectly use the proceeds of the offering of the Shares hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, (i) to fund or facilitate any activities of or business with any per-son, or in any country or territory, that, at the time of such funding, is the subject or the target of Sanctions, or in any other manner that will result in a violation by any person (including any person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions, or (ii) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any person in violation of any Money Laundering Laws or any applicable anti-bribery or anti-corruption laws; and such Selling Stockholder has implemented and maintains adequate internal controls and procedures to monitor and audit transactions that are reasonably designed to detect and prevent any use of the proceeds from the offering contemplated hereby that is inconsistent with its representations and obligations under this paragraph.
2. Subject to the terms and conditions herein set forth, (a) each of the Selling Stockholders agrees, severally and not jointly, to sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from each of the Selling Stockholders, at a purchase price per share of $[___], the number of Firm Shares (to be adjusted by you so as to eliminate fractional shares) determined by multiplying the aggregate number of Firm Shares to be sold by each of the Selling Stockholders as set forth opposite their respective names in Schedule II hereto by a fraction, the numerator of which is the aggregate number of Firm Shares to be purchased by such Underwriter as set forth opposite the name of such Underwriter in Schedule I hereto and the denominator of which is the aggregate number of Firm Shares to be purchased by all of the Underwriters from all of the Selling Stockholders hereunder and (b) in the event and to the extent that the Underwriters shall exercise the election to purchase Optional Shares as provided below, each of the Selling Stockholders agrees, severally and not jointly, to sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from each of the Selling Stockholders, at the purchase price per share set forth in clause (a) of this Section 2 (provided that the purchase price per Optional Share shall be reduced by an amount per share equal to any dividends or distributions declared by the Company and payable on the Firm Shares but not payable on the Optional Shares), that portion of the number of Optional Shares as to which such election shall have been exercised (to be adjusted by you so as to eliminate fractional shares) determined by multiplying such number of Optional Shares by a fraction the numerator of which is the maximum number of Optional Shares which such Underwriter is entitled to purchase as set forth opposite the name of such Underwriter in Schedule I (or such number increased as set forth in Section 10 hereto) hereto and the denominator of which is the maximum number of Optional Shares that all of the Underwriters are entitled to purchase hereunder.
The Selling Stockholders, as and to the extent indicated in Schedule II hereto, hereby grant, severally and not jointly, to the Underwriters the right to purchase at their election up to [____] Optional Shares, at the purchase price per share set forth in the paragraph above, for the sole purpose of covering sales of shares in excess of the number of Firm Shares (provided that the purchase price per Optional Share shall be reduced by an amount per share equal to any dividends or distributions declared by the Company and payable on the Firm Shares but not payable on the Optional Shares). Any such election to purchase Optional Shares shall be made in proportion to the number of Optional Shares to be sold by each Selling Stockholder. Any such election to purchase Optional Shares may be exercised only by written notice from you to the Company and the Attorneys-in-Fact, given within a period of 30 calendar days after the date of this Agreement and setting forth the aggregate number of Optional Shares to be purchased and the date on which such Optional Shares are to be delivered, as determined by you but in no event earlier than the First Time of Delivery or, unless you and the Company and the Attorneys-in-Fact otherwise agree in writing, earlier than two or later than ten business days after the date of such notice.
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3. Upon the authorization by you of the release of the Firm Shares, the several Underwriters propose to offer the Firm Shares for sale upon the terms and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder, in definitive or book-entry form, and in such authorized denominations and registered in such names as the Representatives may request upon at least forty-eight hours’ prior notice to the Company and the Selling Stockholders shall be delivered by or on behalf of the Selling Stockholders to the Representatives, through the facilities of the Depository Trust Company (“DTC”), for the account of such Underwriter, against payment by or on behalf of such Underwriter of the purchase price therefor by wire transfer of Federal (same-day) funds to the account specified by the Custodian to the Representatives at least forty-eight hours in advance. The Company and the Selling Stockholders will cause the certificates, if any, representing the Shares to be made available for checking and packaging at least twenty-four hours prior to the Time of Delivery (as defined below) with respect thereto at the office of DTC or its designated custodian (the “Designated Office”). The time and date of such delivery and payment shall be, with respect to the Firm Shares, 9:30 a.m., New York time, on [____], 2020 or such other time and date as the Representatives, the Company and the Attorneys-in-Fact may agree upon in writing, and, with respect to the Optional Shares, 9:30 a.m., New York time, on the date specified by the Representatives in each written notice given by the Representatives of the Underwriters’ election to purchase such Optional Shares, or such other time and date as the Representatives, and the Company and the Attorneys-in-Fact may agree upon in writing. Such time and date for delivery of the Firm Shares is herein called the “First Time of Delivery”, each such time and date for delivery of the Optional Shares, if not the First Time of Delivery, is herein called the “Second Time of Delivery”, and each such time and date for delivery is herein called a “Time of Delivery”.
(b) The documents to be delivered at each Time of Delivery by or on behalf of the parties hereto pursuant to Section 8 hereof, including the cross receipt for the Shares will be delivered at the offices of Goodwin Procter LLP, 601 Marshall Street, Redwood City, California 94063 (the “Closing Location”), and the Shares will be delivered at the Designated Office, all at such Time of Delivery. A meeting will be held at the Closing Location at [5] p.m., New York City time, on the New York Business Day next preceding such Time of Delivery, at which meeting the final drafts of the documents to be delivered pursuant to the preceding sentence will be available for review by the parties hereto. For the purposes of this Section 4, “New York Business Day” shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in New York are generally authorized or obligated by law or executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file such Prospectus pursuant to Rule 424(b) under the Act not later than the Commission’s close of business on the second business day following the execution and delivery of this Agreement, or, if applicable, such earlier time as may be required by Rule 430A(a)(3) under the Act; to make no further amendment or any supplement to the Registration Statement or the Prospectus prior to the last Time of Delivery to which, following reasonable notice thereof, you reasonably object by written notice to the Company in a timely manner; to advise you, promptly after the Company receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any amendment or supplement to the Prospectus has been filed and to furnish you with copies thereof; to file promptly all material required to be filed by the Company with the Commission pursuant to Rule 433(d) under the Act; to advise you, promptly after the Company receives notice thereof, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or other prospectus in respect of the Shares, of the suspension of the qualification of the Shares for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or the Prospectus or for additional information; and, in the event of the issuance of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or other prospectus or suspending any such qualification, to promptly use its best efforts to obtain the withdrawal of such order;
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(b) To take such action as you may reasonably request to qualify the Shares for offering and sale under the securities laws of such jurisdictions as you may reasonably request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of the Shares, provided that in connection therewith in no event shall the Company be obligated to qualify to do business in any jurisdiction where it is not now so qualified or to take any action that would reasonably be expected to subject it to service of process in suits, other than those arising out of the offering or sale of the Shares, in any jurisdiction where it is not now so subject or to subject itself to taxation in excess of a nominal amount in respect of doing business in any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the second New York Business Day next succeeding the date of this Agreement and from time to time, to furnish the Underwriters with written and electronic copies of the Prospectus in New York City in such quantities as you may reasonably request, and, if the delivery of a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) is required at any time prior to the expiration of nine months after the time of issue of the Prospectus in connection with the offering or sale of the Shares and if at such time any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) is delivered, not misleading, or, if for any other reason it shall be necessary during such same period to amend or supplement the Prospectus in order to comply with the Act, to notify you and upon your request to prepare and furnish without charge to each Underwriter and to any dealer in securities as many written and electronic copies as you may from time to time reasonably request of an amended Prospectus or a supplement to the Prospectus which will correct such statement or omission or effect such compliance; and in case any Underwriter is required to deliver a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) in connection with sales of any of the Shares at any time nine months or more after the time of issue of the Prospectus, upon your request but at the expense of such Underwriter, to prepare and deliver to such Underwriter as many written and electronic copies as you may request of an amended or supplemented Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as practicable, but in any event not later than sixteen months after the effective date of the Registration Statement (as defined in Rule 158(c) under the Act) (which may be satisfied by filing with the Commission’s Electronic Data Gathering, Analysis and Retrieval (“EDGAR”) system), an earnings statement of the Company and its subsidiaries (which need not be audited) complying with Section 11(a) of the Act and the rules and regulations of the Commission thereunder (including, at the option of the Company, Rule 158);
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(e) (i) During the period beginning from the date hereof and continuing to and including the date 180 days after the date of the Prospectus, not to (i) offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise transfer or dispose of, directly or indirectly, or publicly file with the Commission a registration statement under the Act relating to, any Stock or any securities convertible into or exercisable or exchangeable for Stock, or publicly disclose the intention to make any offer, sale, pledge, disposition, filing or confidential submission or (ii) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Stock or any such other securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Stock or such other securities, in cash or otherwise, without the prior written consent of Goldman Sachs & Co. LLC, other than (A) the Shares to be sold hereunder by the Selling Stockholders, (B) upon the conversion or exchange of convertible or exchangeable securities outstanding as of the date of this Agreement (C) any options or other awards (including without limitation, restricted stock or restricted stock units), or the shares of Stock issued with respect to, or upon the exercise or settlement of, such options and other awards, granted under the Company’s equity plans disclosed in the Registration Statement, (D) the filing of a registration statement on Form S-8, and the issuance of securities registered thereunder, relating to any benefit plans or arrangements disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, (E) the issuance of shares of Stock in connection with the acquisition of the assets of, or a majority of controlling portion of the equity of, or a business combination or a joint venture with, another entity in connection with such business combination or such acquisition by the Company or any of its subsidiaries of such entity, (F) any issuance of shares of Stock (including without limitation, restricted stock or restricted stock awards) in connection with joint ventures, commercial relationships or other strategic transactions, provided that the aggregate number of shares issued or issuable pursuant to clauses (E) and (F) does not exceed 10% of the number of shares of Stock outstanding immediately after the offering of the Shares pursuant to this Agreement and prior to such issuance, each recipient of any such securities shall execute and deliver to the Representatives an agreement substantially in the form of Annex II hereto, (G) the issuance and sale of shares of Stock to Siemens AG pursuant to the Common Stock Purchase Agreement, dated as of September 23, 2016, among the Company, Siemens AG and the stockholders party thereto (as amended) and (H) on and after December 1, 2020, the issuance and sale of shares of Stock by the Company and/or stockholders of the Company in connection with one or more primary or combined primary and secondary follow-on offerings in an aggregate amount equal to up to 20% of the Company’s total Stock outstanding at such time, provided that the Representatives shall have a right of first refusal to participate as the lead underwriters in the first offering pursuant to this subsection (H);
(ii) If Goldman Sachs & Co. LLC, in its sole discretion, agrees to release or waive the restrictions in lock-up letters pursuant to Section 1(b)(iv) or Section 8(i) hereof, in each case for an officer or director of the Company, and provides the Company with notice of the impending release or waiver at least three business days before the effective date of the release or waiver, the Company agrees to announce the impending release or waiver by (X) a press release substantially in the form of Annex I hereto through a major news service or (Y) any other method that satisfies the obligations described in FINRA Rule 5131(d)(2) at least two business days before the effective date of the release or waiver;
(f) To use its reasonable best efforts to list for trading the Shares on The Nasdaq Global Select Market (the “Exchange”);
(g) To file with the Commission such information on Form 10-Q or Form 10-K as may be required by Rule 463 under the Act;
(h) If the Company elects to rely upon Rule 462(b), the Company shall file a Rule 462(b) Registration Statement with the Commission in compliance with Rule 462(b) by 10:00 p.m., Washington, D.C. time, on the date of this Agreement, and the Company shall at the time of filing either pay to the Commission the filing fee for the Rule 462(b) Registration Statement or give irrevocable instructions for the payment of such fee pursuant to Rule 3a(c) of the Commission’s Informal and Other Procedures (17 CFR 202.3a); and
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(i) To promptly notify you if the Company ceases to be an Emerging Growth Company at any time prior to the later of (i) completion of the distribution of the Shares within the meaning of the Act and (ii) the last Time of Delivery.
6. (a) The Company represents and agrees that, without the prior consent of the Representatives, it has not made and will not make any offer relating to the Shares that would constitute a “free writing prospectus” as defined in Rule 405 under the Act; each Selling Stockholder represents and agrees that, without the prior consent of the Company and the Representatives, it has not made and will not make any offer relating to the Shares that would constitute a free writing prospectus; and each Underwriter represents and agrees that, without the prior consent of the Company and the Representatives, it has not made and will not make any offer relating to the Shares that would constitute a “free writing prospectus” as defined in Rule 405 under the Act required to be filed with the Commission; any such free writing prospectus the use of which has been consented to by the Company and the Representatives is listed on Schedule III(a) hereto;
(b) The Company has complied and will comply with the requirements of Rule 433 under the Act applicable to any Issuer Free Writing Prospectus, including timely filing with the Commission or retention where required and legending; and the Company represents that it has satisfied and agrees that it will satisfy the conditions under Rule 433 under the Act to avoid a requirement to file with the Commission any electronic road show;
(c) The Company agrees that if at any time following issuance of an Issuer Free Writing Prospectus or Written Testing-the-Waters Communication and prior to the Time of Delivery any event occurred or occurs as a result of which such Issuer Free Writing Prospectus or Written Testing-the-Waters Communication would conflict with the information in the Registration Statement, the Pricing Prospectus or the Prospectus or would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances then prevailing, not misleading, the Company will give prompt notice thereof to the Representatives and, if requested by the Representatives, will prepare and furnish without charge to each Underwriter an Issuer Free Writing Prospectus, Written Testing-the-Waters Communication or other document which will correct such conflict, statement or omission; provided, however, that this covenant shall not apply to any statements or omissions in an Issuer Free Writing Prospectus or Written Testing-the-Waters Communication made in reliance upon and in conformity with the Underwriter Information;
(d) The Company represents and agrees that (i) it has not engaged in, or authorized any other person to engage in, any Testing-the-Waters Communications, other than Testing-the-Waters Communications with the prior consent of the Representatives with entities that the Company reasonably believes are qualified institutional buyers as defined in Rule 144A under the Act or institutions that are accredited investors as defined in Rule 501(a) under the Act; and (ii) it has not distributed, or authorized any other person to distribute, any Written Testing-the-Waters Communications, other than those distributed with the prior consent of the Representatives that are listed on Schedule III(d) hereto; and the Company reconfirms that the Underwriters have been authorized to act on its behalf in engaging in Testing-the-Waters Communications; and
(e) Each Underwriter represents and agrees that any Testing-the-Waters Communications undertaken by it were with entities that such Underwriter reasonably believes are qualified institutional buyers as defined in Rule 144A under the Act or institutions that are accredited investors as defined in Rule 501(a) under the Act.
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7. The Company and each of the Selling Stockholders covenant and agree with one another and with the several Underwriters that (a) the Company will pay or cause to be paid the following: (i) the fees, disbursements and expenses of the Company’s counsel and accountants and any fees and expenses of counsel for such Selling Stockholders in connection with the registration of the Shares under the Act and all other expenses in connection with the preparation, printing, reproduction and filing of the Registration Statement, any Preliminary Prospectus, any Written Testing-the-Waters Communication, any Issuer Free Writing Prospectus and the Prospectus and amendments and supplements thereto and the mailing and delivering of copies thereof to the Underwriters and dealers; (ii) the cost of printing or producing any Agreement among Underwriters, this Agreement, the Blue Sky Memorandum, closing documents (including any compilations thereof) and any other documents in connection with the offering, purchase, sale and delivery of the Shares; (iii) all expenses in connection with the qualification of the Shares for offering and sale under state securities laws as provided in Section 5(b) hereof, including the reasonable and documented fees and disbursements of counsel for the Underwriters in connection with such qualification and in connection with the Blue Sky survey in an amount not to exceed $5,000; (iv) all fees and expenses in connection with listing the Shares on the Exchange; (v) the filing fees incident to, and the fees and disbursements of counsel for the Underwriters in connection with, any required review by FINRA of the terms of the sale of the Shares in an amount not to exceed $40,000 for such fees and disbursement of counsel only; (vi) the cost of preparing stock certificates; if applicable (vii) the cost and charges of any transfer agent or registrar, and (viii) all other costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section; and (b) such Selling Stockholder will pay or cause to be paid all costs and expenses incident to the performance of such Selling Stockholder’s obligations hereunder with respect to (i) fees and expenses of any tax or other advisor to such Selling Stockholder, and (ii) all taxes incident to the sale and delivery of the Shares to be sold by such Selling Stockholder to the Underwriters hereunder. In connection with clause (b)(ii) of the preceding sentence, the Representatives agree to pay New York State stock transfer tax, and the Selling Stockholder agrees to reimburse the Representatives for associated carrying costs if such tax payment is not rebated on the day of payment and for any portion of such tax payment not rebated. It is understood, however, that the Company shall bear, and the Selling Stockholders shall not be required to pay or to reimburse the Company for, the cost of any other matters not directly relating to the sale and purchase of the Shares pursuant to this Agreement, and that, except as provided in this Section, and Sections 9 and 12 hereof, the Underwriters will pay all of their own costs and expenses, including the fees of their counsel, stock transfer taxes on resale of any of the Shares by them, and any advertising expenses connected with any offers they may make.
8. The obligations of the Underwriters hereunder, as to the Shares to be delivered at each Time of Delivery, shall be subject, in their discretion, to the condition that all representations and warranties and other statements of the Company and the Selling Stockholders herein are, at and as of the Applicable Time and such Time of Delivery, true and correct, the condition that the Company and the Selling Stockholders shall have performed all of its and their obligations hereunder theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant to Rule 424(b) under the Act within the applicable time period prescribed for such filing by the rules and regulations under the Act and in accordance with Section 5(a) hereof; all material required to be filed by the Company pursuant to Rule 433(d) under the Act shall have been filed with the Commission within the applicable time period prescribed for such filing by Rule 433; if the Company has elected to rely upon Rule 462(b) under the Act, the Rule 462(b) Registration Statement shall have become effective by 10:00 p.m., Washington, D.C. time, on the date of this Agreement; no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission, and no stop order suspending or preventing the use of the Pricing Prospectus, Prospectus or any Issuer Free Writing Prospectus shall have been initiated or threatened by the Commission; and all requests for additional information on the part of the Commission shall have been complied with to your reasonable satisfaction;
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(b) Goodwin Procter LLP, counsel for the Underwriters, shall have furnished to you such written opinion or opinions, dated such Time of Delivery, in form and substance satisfactory to you, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters;
(c) Simpson Thacher & Bartlett LLP, counsel for the Company, shall have furnished to you their written opinion, dated such Time of Delivery, in form and substance satisfactory to you;
(d) Whalen LLP, counsel for each of the Selling Stockholders, shall have furnished to you their written opinion with respect to each of the Selling Stockholders, dated such Time of Delivery, in form and substance satisfactory to you;
(e) On the date of the Prospectus at a time prior to the execution of this Agreement, at 9:30 a.m., New York City time, on the effective date of any post-effective amendment to the Registration Statement filed subsequent to the date of this Agreement and also at each Time of Delivery, KPMG LLP shall have furnished to you a letter or letters, dated the respective dates of delivery thereof, in form and substance satisfactory to you;
(f) Since the respective dates as of which information is given in the Pricing Prospectus there shall not have been any change in the capital stock or long-term debt of the Company (other than as set forth or contemplated in the Pricing Prospectus) or any of its subsidiaries or any change or effect, or any development involving a prospective change or effect, in or affecting (x) the business, management, financial position, stockholders’ equity or results of operations of the Company and its subsidiaries, taken as a whole, except as set forth or contemplated in the Pricing Prospectus and the Prospectus, or (y) the ability of the Company to perform its obligations under this Agreement or to consummate the transactions contemplated in the Pricing Prospectus and the Prospectus, the effect of which, in any such case described in clause (i) or (ii), is in your judgment so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Shares being delivered at such Time of Delivery on the terms and in the manner contemplated in the Pricing Prospectus and the Prospectus;
(g) On or after the Applicable Time there shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities generally on the Nasdaq Stock Market or the New York Stock Exchange; (ii) a suspension or material limitation in trading in the Company’s securities on the Exchange; (iii) a general moratorium on commercial banking activities declared by either Federal or New York State authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States; (iv) the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war or (v) the occurrence of any other calamity or crisis or any change in financial, political or economic conditions in the United States or elsewhere, if the effect of any such event specified in clause (iv) or (v) in your judgment makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Shares being delivered at such Time of Delivery on the terms and in the manner contemplated in the Pricing Prospectus and the Prospectus;
(h) The Shares to be sold at such Time of Delivery shall have been duly listed on the Exchange;
(i) The Company shall have obtained and delivered to the Underwriters executed copies of an agreement from each stockholder of the Company listed on Schedule IV hereto, substantially to the effect set forth in Annex II hereto;
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(j) The Company shall have complied with the provisions of Section 5(c) hereof with respect to the furnishing of prospectuses on the New York Business Day next succeeding the date of this Agreement;
(k) The Company and the Selling Stockholders shall have furnished or caused to be furnished to you at such Time of Delivery certificates of officers of the Company and of the Selling Stockholders, respectively, reasonably satisfactory to you (i) confirming that the representations and warranties of the Company and the Selling Stockholders, respectively, herein at and as of such Time of Delivery are true and correct, and that the performance by the Company and the Selling Stockholders have complied with their respective obligations hereunder to be performed at or prior to such Time of Delivery, and (ii) as to the matters set forth in subsections (a) and (f) of this Section 8 and as to such other matters as you may reasonably request; and
(l) The Company and the Selling Stockholders shall have furnished or caused to be furnished to the Representatives a certification of beneficial ownership and such other required documentation as the Representatives may reasonably request in order to satisfy their obligations to the Financial Crimes Enforcement Network.
9. (a) The Company will indemnify and hold harmless each Underwriter against any losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) (i) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, any “roadshow” as defined in Rule 433(h) under the Act (a “roadshow”), any “issuer information” filed or required to be filed pursuant to Rule 433(d) under the Act or any Written Testing-the-Waters Communication or (ii) arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Underwriter for any legal or other expenses reasonably incurred and documented by such Underwriter in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus or any Written Testing-the-Waters Communication, in reliance upon and in conformity with the Underwriter Information.
(b) Each of the Selling Stockholders, severally and not jointly, will indemnify and hold harmless (i) the Company, (ii) each person, if any, who controls (within the meaning of either the Act or the Exchange Act) the Company, (iii) each of the directors, (iv) each of the officers of the Company who signs the Registration Statement and (v) each Underwriter (clauses (i) through (v) together, the “Selling Stockholder Indemnified Parties”) against any losses, claims, damages or liabilities, joint or several, to which such Selling Stockholder Indemnified Party may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, any Issuer Free Writing Prospectus, any roadshow or any Written Testing-the-Waters Communication, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto or any Issuer Free Writing Prospectus, any roadshow or any Written Testing-the-Waters Communication, in reliance upon and in conformity with written information furnished to the Company by such Selling Stockholder expressly for use therein that constitutes Selling Stockholder Information; and will reimburse each Selling Stockholder Indemnified Party for any legal or other expenses reasonably incurred by such Selling Stockholder Indemnified Party in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that such Selling Stockholder shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus or any amendment or supplement thereto or any Issuer Free Writing Prospectus in reliance upon and in conformity with the Underwriter Information; provided, further, that the liability of a Selling Stockholder pursuant to this subsection 9(b) shall not exceed the product of (i) the number of Shares sold by such Selling Stockholder, including any Optional Shares and (ii) the proceeds to such selling stockholders of the Shares as set forth on the first page of the Prospect (in relation to each such Selling Stockholder, the “Selling Stockholder Proceeds”).
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(c) The Company will indemnify and hold harmless each Selling Stockholder against any losses, claims, damages or liabilities, joint or several, to which such Selling Stockholder may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, any Issuer Free Writing Prospectus, any roadshow, any “issuer information” filed or required to be filed pursuant to Rule 433(d) under the Act, or any Written Testing-the-Waters Communication, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Selling Stockholder for any legal or other expenses reasonably incurred by such Selling Stockholder in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus or any Testing-the-Waters Communication, in reliance upon and in conformity with (i) the Underwriter Information or (ii) the Selling Stockholder Information.
(d) Each Underwriter, severally and not jointly, will indemnify and hold harmless (i) the Company and (ii) each person, if any, who controls (within the meaning of either the Act or the Exchange Act) the Company, (iii) each of the directors, (iv) each of the officers of the Company who signs the Registration Statement and (v) each Selling Stockholder against any losses, claims, damages or liabilities to which the Company or such Selling Stockholder may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, any roadshow, or any Written Testing-the-Waters Communication, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, or any roadshow, or any Written Testing-the-Waters Communication, in reliance upon and in conformity with the Underwriter Information; and will reimburse the Company and each Selling Stockholder for any legal or other expenses reasonably incurred by the Company or such Selling Stockholder in connection with investigating or defending any such action or claim as such expenses are incurred. As used in this Agreement with respect to an Underwriter and an applicable document, “Underwriter Information” shall mean the written information furnished to the Company by or on behalf of such Underwriter through the Representatives expressly for use therein; it being understood and agreed upon that the only such information furnished by or on behalf of any Underwriter consists of the following information in the Prospectus furnished on behalf of each Underwriter: the concession and reallowance figures appearing in the fifth paragraph under the caption “Underwriting”, and the information contained in the eighth paragraph under the caption “Underwriting”.
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(e) Promptly after receipt by an indemnified party under subsection (a), (b), (c) or (d) of this Section 9 of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; provided that the failure to notify the indemnifying party shall not relieve it from any liability that it may have under the preceding paragraphs of this Section 9 except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided further that the failure to notify the indemnifying party shall not relieve it from any liability that it may have to an indemnified party otherwise than under the preceding paragraphs of this Section 9. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party.
(f) If the indemnification provided for in this Section 9 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a), (b), (c) or (d) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Selling Stockholders on the one hand and the Underwriters on the other from the offering of the Shares and with the proportion among the Company and the Selling Stockholders to reflect the relative fault of the Company and the Selling Stockholders. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company and the Selling Stockholders on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations and with the proportion among the Company and the Selling Stockholders to reflect the relative fault of the Company and the Selling Stockholders. The relative benefits received by the Company and the Selling Stockholders on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (after deducting underwriter discounts and commissions but before deducting expenses) received by the Company and the Selling Stockholders bear to the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Selling Stockholders on the one hand or the Underwriters on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company, each of the Selling Stockholders and the Underwriters agree that it would not be just and equitable if contribution pursuant to this subsection (f) were determined by pro rata allocation (even if the Selling Stockholders or the Underwriters, respectively, were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (f). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (f) shall be deemed to include any legal or other expenses reasonably incurred and documented by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (f), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Shares underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay under this Section 9 by reason of such untrue or alleged untrue statement or omission or alleged omission and no Selling Stockholder shall be required to contribute any amount in excess of the amount by which the Selling Stockholder Proceeds received by the Selling Stockholder exceeds any damages which such Selling Stockholder has otherwise been required to pay by reason of subsection (b). No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations in this subsection (f) to contribute are several in proportion to their respective underwriting obligations and not joint; and the Selling Stockholders’ obligations in this subsection (f) to contribute are several in proportion to their respective Selling Stockholder Proceeds.
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(g) The obligations of the Company and the Selling Stockholders under this Section 9 shall be in addition to any liability which the Company and the Selling Stockholders may otherwise have and shall extend, upon the same terms and conditions, to each employee, officer and director of each Underwriter and each person, if any, who controls any Underwriter within the meaning of the Act and each broker-dealer or other affiliate of any Underwriter; and the obligations of the Underwriters under this Section 9 shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company (including any person who, with his or her consent, is named in the Registration Statement as about to become a director of the Company) and to each person, if any, who controls the Company or any Selling Stockholder within the meaning of the Act and the Exchange Act.
10. (a) If any Underwriter shall default in its obligation to purchase the Shares that it has agreed to purchase hereunder at a Time of Delivery, you may in your discretion arrange for you or another party or other parties satisfactory to the Company to purchase such Shares on the terms contained herein. If within thirty-six hours after such default by any Underwriter you do not arrange for the purchase of such Shares, then the Company and the Selling Stockholders shall be entitled to a further period of thirty-six hours within which to procure another party or other parties satisfactory to you to purchase such Shares on such terms. In the event that, within the respective prescribed periods, you notify the Company and the Selling Stockholders that you have so arranged for the purchase of such Shares, or the Company or a Selling Stockholder notifies you that it has so arranged for the purchase of such Shares, you or the Company or the Selling Stockholders shall have the right to postpone such Time of Delivery for a period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the Registration Statement or the Prospectus, or in any other documents or arrangements, and the Company agrees to file promptly any amendments or supplements to the Registration Statement or the Prospectus which in the opinion for counsel for the Underwriters may thereby be made necessary. The term “Underwriter” as used in this Agreement shall include any person substituted under this Section with like effect as if such person had originally been a party to this Agreement with respect to such Shares.
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(b) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting Underwriter or Underwriters by you, the Company and the Selling Stockholders as provided in subsection (a) above, the aggregate number of such Shares which remains unpurchased does not exceed one-eleventh of the aggregate number of all the Shares to be purchased at such Time of Delivery, then the Company and the Selling Stockholders shall have the right to require each non-defaulting Underwriter to purchase the number of Shares which such Underwriter agreed to purchase hereunder at such Time of Delivery and, in addition, to require each non-defaulting Underwriter to purchase its pro rata share (based on the number of Shares which such Underwriter agreed to purchase hereunder) of the Shares of such defaulting Underwriter or Underwriters for which such arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting Underwriter or Underwriters by you, the Company and the Selling Stockholders as provided in subsection (a) above, the aggregate number of such Shares which remains unpurchased exceeds one-eleventh of the aggregate number of all of the Shares to be purchased at such Time of Delivery, or if the Selling Stockholders shall not exercise the right described in subsection (b) above to require non-defaulting Underwriters to purchase Shares of a defaulting Underwriter or Underwriters, then this Agreement (or, with respect to a Second Time of Delivery, the obligations of the Underwriters to purchase and of the Selling Stockholders to sell the Optional Shares) shall thereupon terminate, without liability on the part of any non-defaulting Underwriter, the Company or the Selling Stockholders, except for the expenses to be borne by the Company, the Selling Stockholders and the Underwriters as provided in Section 7 hereof and the indemnity and contribution agreements in Section 9 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default.
11. The respective indemnities, agreements, representations, warranties and other statements of the Company, the Selling Stockholders and the several Underwriters, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Underwriter or any controlling person of any Underwriter, or the Company, or any of the Selling Stockholders, or any officer or director or controlling person of the Company, or any controlling person of any Selling Stockholder, and shall survive delivery of and payment for the Shares.
12. If this Agreement shall be terminated pursuant to Section 10 hereof, neither the Company nor the Selling Stockholders shall then be under any liability to any Underwriter except as provided in Sections 7 and 9 hereof; but, if for any other reason any Shares are not delivered by or on behalf of the Selling Stockholders as provided herein, the Company will reimburse the Underwriters for all out-of-pocket expenses approved in writing by you, including fees and disbursements of counsel, reasonably incurred and documented by the Underwriters in making preparations for the purchase, sale and delivery of the Shares not so delivered, but the Company and the Selling Stockholders shall then be under no further liability to any Underwriter except as provided in Sections 7 and 9 hereof.
13. In all dealings hereunder, the Representatives shall act jointly on behalf of each of the Underwriters, and the parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by you jointly as the Representatives; and in all dealings with any Selling Stockholder hereunder, you and the Company shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of such Selling Stockholder made or given by any or all of the Attorneys-in-Fact for such Selling Stockholder.
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In accordance with the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Underwriters are required to obtain, verify and record information that identifies their respective clients, including the Company and the Selling Stockholders, which information may include the name and address of their respective clients, as well as other information that will allow the Underwriters to properly identify their respective clients.
All statements, requests, notices and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered or sent by mail, telex or facsimile transmission to the Representatives c/o Goldman Sachs & Co. LLC, 200 West Street, New York, New York 10282, Attention: Registration Department, and c/o BofA Securities, Inc., One Bryant Park, New York, New York 10036, Attention: ECM Legal; if to any Selling Stockholder shall be delivered or sent by mail, telex or facsimile transmission to each of the Attorneys-in Fact named in the Power of Attorney, c/o the Company at the address set forth on the cover of the Registration Statement, Attention: General Counsel with a copy to Whalen LLP, 1601 Dove Street, Suite 270, Newport Beach, California 92660; if to the Company shall be delivered or sent by mail, telex or facsimile transmission to the address of the Company set forth on the cover of the Registration Statement, Attention: Secretary with a copy to Simpson Thacher & Bartlett LLP, 425 Lexington Avenue, New York, New York 10017, Attention: Richard A. Fenyes and Jonathan R. Ozner; and if to any stockholder that has delivered a lock-up letter described in Section 8(i) hereof shall be delivered or sent by mail to his or her respective address provided in Schedule IV hereto or such other address as such stockholder provides in writing to the Company; provided, however, that any notice to an Underwriter pursuant to Section 9(d) hereof shall be delivered or sent by mail, telex or facsimile transmission to such Underwriter at its address set forth in its Underwriters’ Questionnaire or telex constituting such Questionnaire, which address will be supplied to the Company or the Selling Stockholders by you on request; provided further that notices under subsection 5(e) shall be in writing, and if to the Underwriters shall be delivered or sent by mail, telex or facsimile transmission to Goldman Sachs & Co. LLC, 200 West Street, New York, New York 10282, Attention: Control Room. Any such statements, requests, notices or agreements shall take effect upon receipt thereof.
14. This Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters, the Company and the Selling Stockholders and, to the extent provided in Sections 9 and 11 hereof, the officers and directors of the Company and each person who controls the Company, any Selling Stockholder or any Underwriter, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. No purchaser of any of the Shares from any Underwriter shall be deemed a successor or assign by reason merely of such purchase.
15. Time shall be of the essence of this Agreement. As used herein, the term “business day” shall mean any day when the Commission’s office in Washington, D.C. is open for business.
16. The Company and the Selling Stockholders acknowledge and agree that (i) the purchase and sale of the Shares pursuant to this Agreement is an arm’s-length commercial transaction between the Company and the Selling Stockholders, on the one hand, and the several Underwriters, on the other, and does not constitute a recommendation, investment advice, or solicitation of any action by the Underwriters, (ii) in connection therewith and with the process leading to such transaction each Underwriter is acting solely as a principal and not the agent or fiduciary of the Company or any Selling Stockholder, (iii) no Underwriter has assumed an advisory or fiduciary responsibility in favor of the Company or any Selling Stockholder with respect to the offering contemplated hereby or the process leading thereto (irrespective of whether such Underwriter has advised or is currently advising the Company or any Selling Stockholder on other matters) or any other obligation to the Company or any Selling Stockholder except the obligations expressly set forth in this Agreement, (iv) the Underwriters have not provided any legal, accounting, regulatory, investment or tax advice with respect to the offering of the Shares and the Company and each Selling Stockholder has consulted its own legal and financial advisors to the extent it deemed appropriate and (v) none of the activities of or communications by the Underwriters in connection with the transactions contemplated herein constitutes a recommendation, investment advice or solicitation of any action by the Underwriters to or for any Selling Stockholder. The Company and each Selling Stockholder agrees that it will not claim that the Underwriters, or any of them, has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to the Company or any Selling Stockholder, in connection with such transaction or the process leading thereto.
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17. This Agreement supersedes all prior agreements and understandings (whether written or oral) among the Company, the Selling Stockholders and the Underwriters, or any of them, with respect to the subject matter hereof.
18. This Agreement and any transaction contemplated by this Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflict of laws that would result in the application of any other law than the laws of the State of New York. The Company and each Selling Stockholder agree that any suit or proceeding arising in respect of this Agreement or any transaction contemplated by this Agreement will be tried exclusively in the U.S. District Court for the Southern District of New York or, if that court does not have subject matter jurisdiction, in any state court located in The City and County of New York and the Company and each Selling Stockholder agree to submit to the jurisdiction of, and to venue in, such courts.
19. The Company, each Selling Stockholder and each of the Underwriters hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
20. This Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this Agreement or any document to be signed in connection with this Agreement shall be deemed to include electronic signatures, deliveries or the keeping of records in electronic form. Counterparts may be delivered via facsimile, electronic mail (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, and the parties hereto consent to conduct the transactions contemplated hereunder by electronic means.
21. Notwithstanding anything herein to the contrary, the Company and the Selling Stockholders are authorized to disclose to any persons the U.S. federal and state income tax treatment and tax structure of the potential transaction and all materials of any kind (including tax opinions and other tax analyses) provided to the Company and the Selling Stockholders relating to that treatment and structure, without the Underwriters imposing any limitation of any kind. However, any information relating to the tax treatment and tax structure shall remain confidential (and the foregoing sentence shall not apply) to the extent necessary to enable any person to comply with securities laws. For this purpose, “tax structure” is limited to any facts that may be relevant to that treatment.
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22. Recognition of the U.S. Special Resolution Regimes.
(a) In the event that any Underwriter that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such Underwriter of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.
(b) In the event that any Underwriter that is a Covered Entity or a BHC Act Affiliate of such Underwriter becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.
(c) As used in this section:
“BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).
“Covered Entity” means any of the following:
(i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);
(ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or
(iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
“U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
If the foregoing is in accordance with your understanding, please sign and return counterparts hereof, and upon the acceptance hereof by you, on behalf of each of the Underwriters, this letter and such acceptance hereof shall constitute a binding agreement among each of the Underwriters, the Company and each of the Selling Stockholders. It is understood that your acceptance of this letter on behalf of each of the Underwriters is pursuant to the authority set forth in a form of Agreement among Underwriters, the form of which shall be submitted to the Company and the Selling Stockholders for examination, upon request, but without warranty on your part as to the authority of the signers thereof.
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Any person executing and delivering this Agreement as Attorney-in-Fact for a Selling Stockholder represents by so doing that he has been duly appointed as Attorney-in-Fact by such Selling Stockholder pursuant to a validly existing and binding Power-of-Attorney that authorizes such Attorney-in-Fact to take such action.
Very truly yours, | ||
Bentley Systems, Incorporated | ||
By: | ||
Name: | ||
Title: | ||
The Selling Stockholders named in Schedule II hereto, acting severally | ||
By: | ||
Name: | ||
Title: Attorney-in-Fact |
Accepted as of the date hereof | ||
Goldman Sachs & Co. LLC | ||
By: | ||
Name: | ||
Title: | ||
BofA Securities, Inc. | ||
By: | ||
Name: | ||
Title: | ||
On behalf of each of the Underwriters |
SCHEDULE I
Number of Optional | ||||||||
Shares to be | ||||||||
Total Number of | Purchased if | |||||||
Firm Shares | Maximum Option | |||||||
Underwriter | to be Purchased | Exercised | ||||||
Goldman Sachs & Co. LLC | [__] | [__] | ||||||
BofA Securities, Inc. | [__] | [__] | ||||||
RBC Capital Markets, LLC | [__] | [__] | ||||||
Robert W. Baird & Co. Incorporated | [__] | [__] | ||||||
KeyBanc Capital Markets Inc. | [__] | [__] | ||||||
Mizuho Securities USA LLC | [__] | [__] | ||||||
Total | [____] | [____] |
SCHEDULE II
Number of Optional | ||||||||
Shares to be | ||||||||
Total Number of | Sold if | |||||||
Firm Shares | Maximum Option | |||||||
to be Sold | Exercised | |||||||
The Selling Stockholders set forth in the attached Schedule II (a): | [____] | [____] |
(a) All Selling Stockholders are represented by Whalen LLP and have appointed Gregory S. Bentley, David J. Hollister, David R. Shaman, and Michael T. Fischette, and each of them, as the Attorneys-in-Fact for such Selling Stockholder.
SCHEDULE III
(a) Issuer Free Writing Prospectuses not included in the Pricing Disclosure Package
Electronic Roadshow dated [____], 2020
(b) Additional documents incorporated by reference
[None.]
(c) Information other than the Pricing Prospectus that comprise the Pricing Disclosure Package
The initial public offering price per share for the Shares is $[__].
The number of Shares purchased by the Underwriters is [____].
[Add any other pricing disclosure.]
(d) Written Testing-the-Waters Communications
[___]
SCHEDULE IV
Name of Stockholder | Address |
ANNEX I
FORM OF PRESS RELEASE
Bentley Systems, Incorporated
[Date]
Bentley Systems, Incorporated (the “Company”) announced today that Goldman Sachs & Co. LLC, the lead book-running manager in the recent public sale of [__] shares of the Company’s Class B common stock, is [waiving][releasing] a lock-up restriction with respect to [__] shares of the Company’s Class B common stock held by [certain officers or directors][an officer or director] of the Company. The [waiver][release] will take effect on [__], 2020, and the shares may be sold on or after such date.
This press release is not an offer for sale of the securities in the United States or in any other jurisdiction where such offer is prohibited, and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the United States Securities Act of 1933, as amended.
ANNEX II
FORM OF LOCK-UP AGREEMENT
Bentley Systems, Incorporated
Lock-Up Agreement
_______________, 2020
Goldman Sachs & Co. LLC
200 West Street
New York, NY 10282-2198
Re: Bentley Systems, Incorporated - Lock-Up Agreement
Ladies and Gentlemen:
The undersigned understands that Goldman Sachs & Co. LLC and BofA Securities, Inc., as the representatives, propose to enter into an underwriting agreement (the “Underwriting Agreement”) on behalf of the several Underwriters named in Schedule I to such agreement (collectively, the “Underwriters”), with Bentley Systems, Incorporated, a Delaware corporation (the “Company”), and the Selling Stockholders listed in Schedule II to the Underwriting Agreement, providing for a public offering (the “Public Offering”) of the Class B Common Stock, $0.01 par value per share (the “Common Stock”), of the Company (the “Shares”) pursuant to a Registration Statement on Form S-1 to be filed with the Securities and Exchange Commission.
In consideration of the agreement by the Underwriters to offer and sell the Shares, and of other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the undersigned agrees that, during the period beginning from the date of this Lock-Up Agreement and continuing to and including the date 180 days after the date set forth on the final prospectus used to sell the Shares (the “Lock-Up Period”), the undersigned shall not, and shall not cause or direct any of its direct or indirect affiliates to, (i) offer, sell, contract to sell, pledge, grant any option to purchase, lend or otherwise dispose of any shares of Common Stock of the Company, or any options or warrants to purchase any shares of Common Stock of the Company, or any securities convertible into, exchangeable for or that represent the right to receive shares of Common Stock of the Company (such options, warrants or other securities, collectively, “Derivative Instruments”), including without limitation any such shares or Derivative Instruments now owned or hereafter acquired by the undersigned, (ii) engage in any hedging or other transaction or arrangement (including, without limitation, any short sale or the purchase or sale of, or entry into, any put or call option, or combination thereof, forward, swap or any other derivative transaction or instrument, however described or defined) which is designed to or which reasonably could be expected to lead to or result in a sale, loan, pledge or other disposition (whether by the undersigned or someone other than the undersigned), or transfer of any of the economic consequences of ownership, in whole or in part, directly or indirectly, of any shares of Common Stock of the Company or Derivative Instruments, whether any such transaction or arrangement (or instrument provided for thereunder) would be settled by delivery of Common Stock or other securities, in cash or otherwise (any such sale, loan, pledge or other disposition, or transfer of economic consequences, a “Transfer”) or (iii) otherwise publicly announce any intention to engage in or cause any action or activity described in clause (i) above or transaction or arrangement described in clause (ii) above.
[If the undersigned is an officer or director of the Company, (i) Goldman Sachs & Co. LLC agrees that, at least three business days before the effective date of any release or waiver of the foregoing restrictions in connection with a transfer of shares of Common Stock, Goldman Sachs & Co. LLC will notify the Company of the impending release or waiver, and (ii) the Company has agreed in the Underwriting Agreement to announce the impending release or waiver by press release through a major news service at least two business days before the effective date of the release or waiver. Any release or waiver granted by Goldman Sachs & Co. LLC hereunder to any such officer or director shall only be effective two business days after the publication date of such press release. The provisions of this paragraph will not apply if (a) the release or waiver is effected solely to permit a transfer not for consideration and (b) the transferee has agreed in writing to be bound by the same terms described in this Lock-up Agreement to the extent and for the duration that such terms remain in effect at the time of the transfer.]1
Notwithstanding the foregoing, the undersigned may transfer the undersigned’s shares of Common Stock or Derivative Instruments of the Company:
(i) | as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound in writing by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value; |
(ii) | by will or other testamentary document, or intestacy to the legal representative, heir, beneficiary or a member of the immediate family (as defined below) of the undersigned, provided that the transferee agrees to be bound in writing by the restrictions set forth herein; |
(iii) | to any immediate family member, other dependent or any investment fund or other entity controlled or managed by the undersigned (for purposes of this Lock-Up Agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin), provided that the transferee agrees to be bound in writing by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value; |
(iv) | to any trust, partnership, limited liability company or other entity for the direct or indirect benefit of the undersigned or the immediate family of the undersigned, provided that the transferee agrees to be bound in writing by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value; |
(v) | if the undersigned is a trust, to the grantor or beneficiary of such trust, provided that the transferee agrees to be bound in writing by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value; |
(vi) | to a nominee or custodian of a person or entity to whom a disposition or transfer would be permissible under clauses (i) through (v) above, provided that the transferee agrees to be bound in writing by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value; |
(vii) | to the Company or its subsidiaries (a) upon the exercise, vesting or settlement of outstanding options, warrants, restricted stock, restricted stock units or other equity interests, including transfers deemed to occur upon the “net” or “cashless” exercise of options or (b) for the sole purpose of paying the exercise price of such options, warrants, or other equity interests or for paying taxes (including estimated taxes) due as a result of the exercise or vesting of such options, warrants, restricted stock, restricted stock units or other equity interests pursuant to employee benefit plans disclosed in the final prospectus relating to the Public Offering, provided that any such shares of Common Stock received upon such exercise or vesting shall be subject to the terms of this Lock-Up Agreement (including, for the avoidance of doubt, in connection with the Company’s Nonqualified Deferred Compensation Plans described in the final prospectus relating to the Public Offering), and provided further that if the undersigned is required to file a report under Section 16(a) of the Exchange Act during the Lock-Up Period, the undersigned shall include a statement in any such report to the effect that such transfer was solely pursuant to the circumstances described in this clause (vii); |
1 Include for directors and officers only.
(viii) | to the Company or its subsidiaries upon or following death, disability or termination of employment of the undersigned; |
(ix) | acquired in the open market following the date of the commencement of the Public Offering; provided that no filing under Section 16(a) of the Exchange Act shall be made unless required during the Lock-Up Period in connection with subsequent sales of Shares acquired in such open market transactions; and provided further that if the undersigned is required to file a report under Section 16(a) of the Exchange Act during the Lock-Up Period, the undersigned shall include a statement in any such report to the effect that such transfer was solely pursuant to the circumstances described in this clause (ix); |
(x) | in connection with the Public Offering contemplated by the Underwriting Agreement pursuant to the terms of the Underwriting Agreement; |
(xi) | pursuant to tenders, sales or other transfers pursuant to a bona fide third-party tender offer, merger, consolidation or other similar transaction made to all holders of shares of Common Stock involving a “change of control” (as defined below) of the Company (provided that if such transaction is not consummated, the undersigned’s shares of Common Stock shall remain subject to the restrictions set forth herein). For purposes of this clause (xi), “change of control” means the consummation of any bona fide third party tender offer, merger, consolidation or other similar transaction the result of which is that any “person” (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), or group of persons, other than the Company, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 of the Exchange Act) of more than 50% of total voting power of the voting stock of the Company occurring after the consummation of the Public Offering and that has been approved by the board of directors of the Company; |
(xii) | to establish or modify a written plan meeting the requirements of Rule 10b5-1 of the Exchange Act that does not provide for the sale or transfer of shares of Common Stock during the Lock-Up Period, and provided that to the extent a public announcement or filing under the Exchange Act, if any, is required of or voluntarily made by or on behalf of the undersigned regarding the establishment of such plan, such announcement or filing shall include a statement to the effect that no transfer of shares of Common Stock may be made under such plan during the Lock-Up Period; |
(xiii) | pursuant to an order of a court or regulatory agency (for purposes of this Lock-Up Agreement, a “court or regulatory agency” means any domestic or foreign, federal, state or local government, including any political subdivision thereof, any governmental or quasi-governmental authority, department, agency or official, any court or administrative body, and any national securities exchange or similar self-regulatory body or organization, in each case of competent jurisdiction), by operation of law as a result of a divorce or to comply with, or as must be permitted to comply with, any regulations related to ownership by the undersigned of the undersigned’s Shares; |
(xiv) | [pledges of Common Stock, Derivative Instruments or other Company securities as collateral in accordance with and subject to the terms and conditions of a loan agreement and any related pledge and security agreements, and any subsequent transfer upon foreclosure on such collateral shares pledged in accordance with and subject to the terms and conditions of such loan agreement and any related pledge and security agreements; provided that each applicable lender party that forecloses on such collateral shares shall agree to be bound in writing by the restrictions set forth herein; provided, however, that (a) the undersigned and its affiliates shall not pledge shares of Common Stock of the Company or Derivative Instruments resulting in an initial loan to value in excess of 50%; and (b) the undersigned or the Company, as the case may be, shall provide Goldman Sachs & Co. LLC prior written notice informing them of any public filing, report or announcement made by or on behalf of the undersigned or the Company with respect thereto, and provided further that if the undersigned is required to file a report under Section 16(a) of the Exchange Act during the Lock-Up Period, the undersigned shall include a statement in any such report to the effect that such transfer is in connection with the foreclosure on such pledge;]2 or |
(xv) | with the prior written consent of Goldman Sachs & Co. LLC on behalf of the Underwriters, |
provided, that (A) in the case of (i)-(vi), and (xiii) above, no filing under Section 16(a) of the Exchange Act or other public filing, report or announcement reporting a reduction in beneficial ownership of shares of Common Stock or Derivatives Instruments shall be made during the Lock-Up Period unless required, and (B) in the case of (viii) and (xiii) above, if the undersigned is required to file a report under Section 16(a) of the Exchange Act during the Lock-Up Period, the undersigned shall include a statement in such report to the effect that such transfer is to the Company in connection with the repurchase of the undersigned’s Shares or pursuant to a qualified domestic order or in connection with a regulations related to ownership of the undersigned’s Shares, as the case may be.
In addition, notwithstanding the foregoing, if the undersigned is a corporation, partnership, limited liability company, trust or other business entity, the undersigned may transfer the capital stock of the Company to (a) another corporation, partnership, limited liability company, trust or other business entity that is an affiliate (as defined in Rule 405 promulgated under the Securities Act of 1933, as amended) of the undersigned or (b) as distributions of the undersigned’s shares of Common Stock or any security convertible into or exercisable for shares of Common Stock to limited partners, limited liability company members, stockholders or subsidiaries (or their equivalents under the jurisdiction of organization of the undersigned) of the undersigned; provided, however, that in any such case, it shall be a condition to the transfer that the transferee execute an agreement stating that the transferee is receiving and holding such capital stock subject to the provisions of this Lock-up Agreement and there shall be no further transfer of such capital stock except in accordance with this Lock-up Agreement, and provided further that any such transfer shall not involve a disposition for value. Except as contemplated by clauses (i)-(xv) above and as will be disclosed in the final prospectus, the undersigned now has, and, for the duration of this Lock-Up Agreement will have, good and marketable title to the undersigned’s shares of Common Stock of the Company, free and clear of all liens, encumbrances, and claims whatsoever.
The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the undersigned’s shares of Common Stock of the Company except in compliance with the foregoing restrictions.
2 Only include for those with pledges.
The undersigned acknowledges and agrees that the Underwriters have not provided any recommendation or investment advice nor have the Underwriters solicited any action from the undersigned with respect to the offering of the securities and the undersigned has consulted its own legal, accounting, financial, regulatory and tax advisors to the extent deemed appropriate.
The undersigned understands that, if (i) the Underwriting Agreement does not become effective by December 31, 2020, (ii) either the representatives or the Company advises the other party in writing, prior to the execution of the Underwriting Agreement, that it has determined to not proceed with the Public Offering of the Common Stock, (iii) the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Common Stock to be sold thereunder, or (iv) the Company files an application to withdraw, and the Securities and Exchange Commission consents to the withdrawal of, the registration statement with respect to the Public Offering of the Common Stock, the undersigned shall be released from all obligations under this Lock-Up Agreement.
This Lock-Up Agreement and any claim, controversy or dispute arising under or related to this Lock-Up Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to the conflict of laws principles thereof.
The undersigned understands that the Company and the Underwriters are relying upon this Lock-Up Agreement in proceeding toward consummation of the Public Offering. The undersigned further understands that this Lock-Up Agreement is irrevocable and shall be binding upon the undersigned’s heirs, legal representatives, successors, and assigns. This Lock-up Agreement may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com or www.echosign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
Very truly yours, | ||
IF AN ENTITY: | ||
(please print complete name of entity) | ||
By: | ||
(duly authorized signature) |
Name: | ||
(please print full name) |
Title: | ||
(please print full title) |
IF AN INDIVIDUAL: | ||
By: | ||
(duly authorized signature) |
Name: | ||
(please print full name) |
Exhibit 3.1
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
BENTLEY SYSTEMS, INCORPORATED
Bentley Systems, Incorporated (the “Corporation”), a corporation organized and existing under the laws of the State of Delaware, hereby certifies as follows:
1. | The Corporation’s original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on March 6, 1987. |
2. | This Amended and Restated Certificate of Incorporation of Bentley Systems, Incorporated (the “Amended and Restated Certificate”) has been duly adopted in accordance with Sections 228, 242 and 245 of the General Corporation Law of the State of Delaware (as the same exists or may hereafter be amended from time to time, the “DGCL”). |
3. | The Amended and Restated Certificate amends and restates the provisions of the Corporation’s Certificate of Incorporation as heretofore amended. |
4. | The Amended and Restated Certificate is hereby restated in its entirety as follows: |
Article First: The name of the corporation is Bentley Systems, Incorporated.
Article Second: The address of the Corporation’s registered office in the State of Delaware is 1209 Orange Street, Wilmington, New Castle County 19801. The name of the Corporation’s registered agent at such address is The Corporation Trust Company.
Article Third: The purpose for which the Corporation is organized is to engage in any lawful act or activity for which corporations may be organized under the DGCL.
Article Fourth: The total number of shares of capital stock that the Corporation shall have authority to issue is two billion (2,000,000,000), consisting of one hundred million (100,000,000) shares of Class A Common Stock, par value $0.01 per share (the “Class A Common Stock”), and one billion eight hundred million (1,800,000,000) shares of Class B Common Stock, par value $0.01 per share (the “Class B Common Stock”), (collectively, the “Common Stock”) and one hundred million (100,000,000) shares of Preferred Stock, par value $0.01 per share (the “Preferred Stock”).
A. Class A Common Stock and Class B Common Stock.
1. Identical Rights and Privileges. Except as otherwise expressly provided herein or as required by law, all outstanding shares of Class A Common Stock and Class B Common Stock shall be identical and shall entitle the holders thereof to the same rights and privileges.
2. Voting Rights.
(a) General.
(i) Except as otherwise provided herein or by applicable law, the holders of outstanding shares of Class A Common Stock and Class B Common Stock shall at all times vote on (or, as provided by law, take action by consent with respect to) all matters (including the election of directors) submitted to a vote or for the consent of the stockholders of the Corporation together as one class. Except as otherwise required by law, holders of Class A Common Stock and Class B Common Stock shall not be entitled to vote on any amendment to this Amended and Restated Certificate of Incorporation (including any certificate of designation relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Amended and Restated Certificate of Incorporation (including any certificate of designation relating to any series of Preferred Stock) or pursuant to the DGCL.
(ii) Each holder of outstanding shares of Class A Common Stock shall be entitled to twenty-nine (29) votes for each share of Class A Common Stock held as of the applicable date on any matter that is submitted to a vote or for the consent of the stockholders of the Corporation; provided, however, that at such time, and thereafter, as (x) no Founder is an executive officer of the Corporation and (y) no Founder is a director of the Corporation, each holder of outstanding shares of Class A Common Stock shall be entitled to eleven (11) votes for each share of Class A Common Stock held as of the applicable date on any matter that is submitted to a vote or for the consent of the stockholders of the Corporation.
(iii) Each holder of outstanding shares of Class B Common Stock shall be entitled to one (1) vote for each share of Class B Common Stock held as of the applicable date on any matter that is submitted to a vote or for the consent of the stockholders of the Corporation.
3. Conversion.
(a) As used herein, the following terms shall have the following meanings:
(i) “Class A Stockholder” shall mean (a) the registered holder of a share of Class A Common Stock on [filing date of this charter], 2020 (the “Effective Time”) and (b) each Permitted Transferee of such registered holder, and (c) the initial registered holder of any shares of Class A Common Stock that were originally issued by the Corporation after the Effective Time.
(ii) “Conversion Event” shall mean:
a. The affirmative vote or written consent of the holders of at least ninety percent (90%) of the then outstanding shares of Class A Common Stock that each share of Class A Common Stock convert into one (1) fully paid and nonassessable share of Class B Common Stock; or
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b. Such time that the Founders and their respective Permitted Transferees beneficially own, in the aggregate, less than twenty percent (20%) of the issued and outstanding shares of Class B Common Stock (on a fully diluted basis and assuming the conversion of all issued and outstanding shares of Class A Common Stock) as shown on reports filed under Section 13 or Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or the books and records of the Corporation.
(iii) “Founder” shall mean any of Gregory Bentley, Barry Bentley, Keith Bentley, Raymond Bentley or Richard Bentley, each as a natural living person, and “Founders” shall mean all of them.
(iv) “Permitted Transferee” shall mean, with respect to any individual Class A Stockholder, any individual or entity specified in Section A.3(d)(iii) of this Article Fourth.
(v) “Transfer” of a share of Class A Common Stock shall mean any sale, assignment, transfer, conveyance, hypothecation or other transfer or disposition of such share or any legal or beneficial interest in such share, whether or not for value and whether voluntary or involuntary or by operation of law. A “Transfer” shall also include, without limitation, a transfer of a share of Class A Common Stock to a broker or other nominee (regardless of whether there is a corresponding change in beneficial ownership), and the transfer of, or entering into a binding agreement with respect to, Voting Control over a share of Class A Common Stock by proxy or otherwise; provided, however, that the following shall not be considered a “Transfer” within the meaning of this Section A.3(a)(v) of this Article Fourth:
a. the granting of a proxy to officers or directors of the Corporation at the request of the Board of Directors of the Corporation in connection with actions to be taken at an annual or special meeting of stockholders;
b. entering into a voting trust, agreement or arrangement (with or without granting a proxy) with stockholders who are Class A Stockholders, that (A) is disclosed either in a Schedule 13D filed with the Securities and Exchange Commission or in writing to the Secretary of the Corporation and (B) does not involve any payment of cash, securities, property or other consideration to the Class A Stockholder other than the mutual promise to vote shares in a designated manner; or
c. the pledge of shares of Class A Common Stock by a Class A Stockholder that creates a mere security interest in such shares pursuant to a bona fide loan or indebtedness transaction so long as the Class A Stockholder continues to exercise Voting Control over such pledged shares; provided, however, that a foreclosure on such shares of Class A Common Stock or other similar action by the pledgee shall constitute a “Transfer.”
(vi) “Voting Control” with respect to a share of Class A Common Stock shall mean the power (whether exclusive or shared) to vote or direct the voting of such share of Class A Common Stock by proxy, voting agreement or otherwise.
(b) Optional Conversion. Each share of Class A Common Stock shall be convertible into one (1) fully paid and nonassessable share of Class B Common Stock at the option of the holder thereof at any time upon written notice to the transfer agent of the Corporation.
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(c) Automatic Conversion upon a Conversion Event. Each share of Class A Common Stock shall automatically, without any further action, convert into one (1) fully paid and nonassessable share of Class B Common Stock upon a Conversion Event.
(d) Automatic Conversion upon Transfer. A share of Class A Common Stock shall automatically, without any further action, convert into one (1) fully paid and nonassessable share of Class B Common Stock upon a Transfer of such share, other than a Transfer:
(i) from a Founder, or such Founder’s Permitted Transferees, to another Founder, or such Founder’s Permitted Transferees;
(ii) by operation of law pursuant to a qualified domestic order or in connection with a divorce settlement; or
(iii) by a Class A Stockholder who is a natural person to any of the following Permitted Transferees, and from any of the following Permitted Transferees back to such Class A Stockholder and/or any other Permitted Transferee of such Class A Stockholder:
a. such Class A Stockholder’s lineal descendants;
b. such Class A Stockholder’s parents, spouse, siblings or lineal descendants of any thereof;
c. any family limited partnership, limited liability company, trust or other fiduciary or other entity either controlled by or primarily for the benefit of (i) such Class A Stockholder, (ii) such Class A Stockholder’s lineal descendants, or (iii) such Class A Stockholder’s parents, spouse, siblings, or lineal descendants of any thereto; or
d. any party taking a security interest in shares of Class A Common Stock to secure a bona fide loan or indebtedness of such Class A Stockholder so long as such Class A Stockholder continues to exercise Voting Control over such pledged shares; provided, however, that following a foreclosure on such shares of Class A Common Stock or other similar action by the pledgee, such pledgee shall no longer be considered a Permitted Transferee;
(e) Mechanics of Conversion. Before any holder of the Class A Common Stock converts the same into shares of Class B Common Stock in accordance with the foregoing provisions of this Section, such holder shall surrender the certificate or certificates therefor, duly endorsed, at the office of the Corporation or of any transfer agent for the Class A Common Stock and shall give written notice to the Corporation at its principal corporate office, of the election to convert the same and shall state therein the name or names in which the certificate or certificates for shares of Class B Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder of Class A Common Stock or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Class B Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares of the Class A Common Stock to be converted, and the person or persons entitled to receive the shares of Class B Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares as of such date.
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(f) No Impairment. The Corporation will not, by amendment of its Certificate of Incorporation or through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Corporation, but will at all times in good faith assist in the carrying out of all the provisions of this Section A.3 of this Article Fourth and in the taking of all such action as may be necessary or appropriate in order to protect the conversion rights of the holders of the Class A Common Stock against impairment.
(g) No Fractional Shares. No fractional shares shall be issued upon the conversion of any share or shares of the Class A Common Stock and the number of shares of Class B Common Stock to be issued shall be rounded to the nearest whole share. Whether fractional shares are issuable upon such conversion shall be determined on the basis of the total number of shares of Class A Common Stock the holder is at the time converting into Class B Common Stock and the number of shares of such Class B Common Stock issuable upon such aggregate conversion.
4. Notices. Any notice required by the provisions of this Section A of this Article Fourth to be given to the holders of shares of the Class A Common Stock and Class B Common Stock shall be deemed given if deposited in the U.S. mail, postage prepaid, or if sent by electronic transmission and addressed to each holder of record at his address appearing on the books of the Corporation.
5. Reservation of Stock Issuable Upon Conversion. The Corporation shall at all times use its best efforts to reserve and keep available out of its authorized but unissued shares of Class B Common Stock solely for the purpose of effecting the conversion of the shares of the Class A Common Stock such number of its shares of Class B Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of the Class A Common Stock and if at any time the number of authorized but unissued shares of Class B Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of the Class A Common Stock, in addition to such other remedies as shall be available to the holder of such Class A Common Stock, the Corporation shall take action to increase its authorized but unissued shares of Class B Common Stock to such number of shares as shall be sufficient for such purposes, including, without limitation engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to this Amended and Restated Certificate.
6. Additional Rights.
(a) Subdivision and Combinations of Shares. If the Corporation in any manner subdivides or combines the outstanding shares of any class of Common Stock, the outstanding shares of the other classes of Common Stock will be proportionately subdivided or combined.
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(b) Merger, etc. In connection with any merger, consolidation, change of control or recapitalization in which holders of Class A Common Stock or Class B Common Stock generally receive, or are given the opportunity to receive, consideration for their shares (a) all holders of Class A Common Stock shall be given the opportunity to receive the same form of consideration for their shares as is received by holders of Class B Common Stock and (b) holders of Class A Common Stock shall be entitled to receive the same amount of consideration per share as received by holders of Class B Common Stock.
(c) Subject to applicable law and the rights, if any, of the holders of any outstanding series of Preferred Stock or any class or series of stock having a preference over or the right to participate with the Class A Common Stock and the Class B Common Stock with respect to the payment of dividends, dividends may be declared and paid ratably on the Class A Common Stock and the Class B Common Stock out of the assets of the Corporation which are legally available for this purpose at such times and in such amounts as the Board of Directors in its discretion shall determine.
(d) Upon the dissolution, liquidation or winding up of the Corporation, after payment or provision for payment of the debts and other liabilities of the Corporation and subject to the rights, if any, of the holders of any outstanding series of Preferred Stock or any class or series of stock having a preference over or the right to participate with the Class A Common Stock and the Class B Common Stock with respect to the distribution of assets of the Corporation upon such dissolution, liquidation or winding up of the Corporation, the holders of Class A Common Stock and the Class B Common Stock shall be entitled to receive the remaining assets of the Corporation available for distribution to its stockholders ratably in proportion to the number of shares held by them.
B. Preferred Stock. The Preferred Stock may be issued from time to time in one or more series. The authority is expressly vested in the Board of Directors, without further stockholder approval, to establish and designate the series and to fix the rights, preferences, privileges and restrictions of any series of Preferred Stock, including, without limitation, those relating to any dividend rights and terms, conversion rights, voting rights, redemption rights and terms, liquidation preferences and sinking fund terms and the number of shares of such series, which number the Board of Directors may, except where otherwise provided in the designation of such series, increase (but not above the total number of authorized shares of Preferred Stock) or decrease (but not below the number of shares of such series then outstanding) and as may be permitted by the DGCL. The rights, preferences, privileges and restrictions of any series of Preferred Stock, if any, may differ from those of any and all other series at any time outstanding.
Article Fifth: This Amended and Restated Certificate may be amended, altered, repealed or rescinded, in whole or in part, or any provision inconsistent therewith or herewith may be adopted, by the affirmative vote of the holders of a majority in voting power of all the then-outstanding shares of stock of the Corporation entitled to vote thereon, voting together as a single class; provided that the following provisions in this Amended and Restated Certificate of Incorporation may be amended, altered, repealed or rescinded, in whole or in part, only by the affirmative vote of the holders of at least 66⅔% in voting power of all the then-outstanding shares of stock of the Corporation entitled to vote thereon, voting together as a single class: this Article Fifth, Article Twelfth and Article Thirteenth. For the purposes of this Amended and Restated Certificate, beneficial ownership of shares shall be determined in accordance with Rule 13d-3 promulgated under the Exchange Act.
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Article Sixth: To the fullest extent permitted by the DGCL as it now exists or may hereafter be amended, a director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty owed to the Corporation or its stockholders. Neither the amendment nor repeal of this Article Sixth, nor the adoption of any provision of this Amended and Restated Certificate of Incorporation, nor, to the fullest extent permitted by the DGCL, any modification of law shall eliminate, reduce or otherwise adversely affect any right or protection of a current or former director of the Corporation existing at the time of such amendment, repeal, adoption or modification.
Article Seventh: The term of existence of the Corporation shall be perpetual.
Article Eighth: Any director or the entire Board of Directors may be removed, with or without cause, by the holders of a majority of the shares entitled to vote at an election of directors.
Article Ninth: The election of directors shall be conducted in the manner prescribed in the By-Laws of the Corporation and need not be by ballot.
Article Tenth: Unless the Corporation consents in writing to the selection of an alternate forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum, to the fullest extent permitted by law, for (a) any derivative action or proceeding brought on behalf of the Corporation; (b) any action asserting a claim of a breach of fiduciary duty owed by any director, officer or other employee or stockholder of the Corporation to the Corporation or the Corporation’s stockholders, creditors or other constituents; (c) any action asserting a claim against the Corporation arising pursuant to any provision of the DGCL, this Amended and Restated Certificate or the By-Laws of the Corporation; (d) any action seeking to interpret, apply, enforce or determine the validity of this Amended and Restated Certificate or the By-Laws of the Corporation; or (e) any action asserting a claim against the Corporation governed by the internal affairs doctrine. Unless the Corporation consents in writing to the selection of an alternative forum, the federal district courts of the United States of America for the District of Delaware shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Exchange Act or the Securities Act of 1933, as amended. To the fullest extent permitted by law, any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article Tenth.
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Article Eleventh: As used herein, “Founder Change of Control” means such point in time at which the Founders and their respective Permitted Transferees, in the aggregate, do not hold a majority of the voting power of the outstanding capital stock of the Corporation.
A. Action by Written Consent of Stockholders. Upon a Founder Change of Control, any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of stockholders of the Corporation and may not be effected by any consent of stockholders in lieu of a meeting.
B. Special Meeting of Stockholders. Special meetings of the stockholders of the Corporation may be called only by a majority of the entire Board of Directors, the Chairman of the Board or the Chief Executive Officer of the Corporation (or, if a Chief Executive Officer is not then currently in office, the President), and may not be called by any other person or persons. Business transacted at special meetings of stockholders will be confined to the purpose or purposes stated in the notice of meeting.
C. Advance Notice of Stockholder Nominations and Proposals. Advance notice of stockholder nominations for the election of directors of the Corporation and of business to be brought by stockholders before any meeting of stockholders of the Corporation will be given in the manner provided in the By-laws of the Corporation.
Article Twelfth:
A. The Corporation hereby expressly elects not to be governed by Section 203 of the DGCL.
B. Notwithstanding the foregoing, the Corporation shall not engage in any business combination (as defined below), at any point in time at which the Corporation’s Class B Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act, with any interested stockholder (as defined below) for a period of three (3) years following the time that such stockholder became an interested stockholder, unless:
1. prior to such time, the Board of Directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder, or
2. upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock (as defined below) of the Corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned by (i) persons who are directors and also officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer, or
3. at or subsequent to such time, the business combination is approved by the Board of Directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66⅔% of the outstanding voting stock of the Corporation which is not owned by the interested stockholder.
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C. The restrictions contained in this Article Twelfth shall not apply if a stockholder becomes an interested stockholder inadvertently and (i) as soon as practicable divests itself of ownership of sufficient shares so that the stockholder ceases to be an interested stockholder; and (ii) would not, at any time within the three-year period immediately prior to a business combination between the Corporation and such stockholder, have been an interested stockholder but for the inadvertent acquisition of ownership.
D. For purposes of this Article Twelfth, references to:
1. “affiliate” means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, another person.
2. “associate,” when used to indicate a relationship with any person, means: (i) any corporation, partnership, unincorporated association or other entity of which such person is a director, officer or partner or is, directly or indirectly, the owner of 20% or more of any class of voting stock; (ii) any trust or other estate in which such person has at least a 20% beneficial interest or as to which such person serves as trustee or in a similar fiduciary capacity; and (iii) any relative or spouse of such person, or any relative of such spouse, who has the same residence as such person.
3. “business combination,” when used in reference to the Corporation and any interested stockholder of the Corporation, means:
(i) any merger or consolidation of the Corporation or any direct or indirect majority-owned subsidiary of the Corporation (a) with the interested stockholder, or (b) with any other corporation, partnership, unincorporated association or other entity if the merger or consolidation is caused by the interested stockholder and as a result of such merger or consolidation Section (B) of this Article Twelfth is not applicable to the surviving entity;
(ii) any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), except proportionately as a stockholder of the Corporation, to or with the interested stockholder, whether as part of a dissolution or otherwise, of assets of the Corporation or of any direct or indirect majority-owned subsidiary of the Corporation which assets have an aggregate market value equal to 10% or more of either the aggregate market value of all the assets of the Corporation determined on a consolidated basis or the aggregate market value of all the outstanding stock of the Corporation;
(iii) any transaction which results in the issuance or transfer by the Corporation or by any direct or indirect majority-owned subsidiary of the Corporation of any stock of the Corporation or of such subsidiary to the interested stockholder, except: (a) pursuant to the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into stock of the Corporation or any such subsidiary which securities were outstanding prior to the time that the interested stockholder became such; (b) pursuant to a merger under Section 251(g) of the DGCL; (c) pursuant to a dividend or distribution paid or made, or the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into stock of the Corporation or any such subsidiary which security is distributed, pro rata to all holders of a class or series of stock of the Corporation subsequent to the time the interested stockholder became such; (d) pursuant to an exchange offer by the Corporation to purchase stock made on the same terms to all holders of said stock; or (e) any issuance or transfer of stock by the Corporation; provided, however, that in no case under items (c)-(e) of this subsection (iii) shall there be an increase in the interested stockholder’s proportionate share of the stock of any class or series of the Corporation or of the voting stock of the Corporation (except as a result of immaterial changes due to fractional share adjustments);
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(iv) any transaction involving the Corporation or any direct or indirect majority-owned subsidiary of the Corporation which has the effect, directly or indirectly, of increasing the proportionate share of the stock of any class or series, or securities convertible into the stock of any class or series, of the Corporation or of any such subsidiary which is owned by the interested stockholder, except as a result of immaterial changes due to fractional share adjustments or as a result of any purchase or redemption of any shares of stock not caused, directly or indirectly, by the interested stockholder; or
(v) any receipt by the interested stockholder of the benefit, directly or indirectly (except proportionately as a stockholder of the Corporation), of any loans, advances, guarantees, pledges, or other financial benefits (other than those expressly permitted in subsections (i)-(iv) above) provided by or through the Corporation or any direct or indirect majority-owned subsidiary.
4. “control,” including the terms “controlling,” “controlled by” and “under common control with,” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting stock, by contract, or otherwise. A person who is the owner of 20% or more of the outstanding voting stock of the Corporation, partnership, unincorporated association or other entity shall be presumed to have control of such entity, in the absence of proof by a preponderance of the evidence to the contrary. Notwithstanding the foregoing, a presumption of control shall not apply where such person holds voting stock, in good faith and not for the purpose of circumventing this Article Twelfth, as an agent, bank, broker, nominee, custodian or trustee for one or more owners who do not individually or as a group have control of such entity.
5. “Founder Direct Transferee” means any person that acquires (other than in a registered public offering or through a broker’s transaction executed on any securities exchange or other over-the-counter market) directly from any Founder or any of its affiliates or successors or any “group,” or any member of any such group, of which such persons are a party under Rule 13d-5 of the Exchange Act beneficial ownership of 15% or more of the then-outstanding voting stock of the Corporation.
6. “Founder Indirect Transferee” means any person that acquires (other than in a registered public offering or through a broker’s transaction executed on any securities exchange or other over-the-counter market) directly from any Founder Direct Transferee or any other Founder Indirect Transferee beneficial ownership of 15% or more of the then-outstanding voting stock of the Corporation.
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7. “interested stockholder” means any person (other than the Corporation or any direct or indirect majority-owned subsidiary of the Corporation) that (i) is the owner of 15% or more of the outstanding voting stock of the Corporation, or (ii) is an affiliate or associate of the Corporation and was the owner of 15% or more of the outstanding voting stock of the Corporation at any time within the three (3) year period immediately prior to the date on which it is sought to be determined whether such person is an interested stockholder; and the affiliates and associates of such person; but “interested stockholder” shall not include or be deemed to include, in any case, (a) a Founder, any Founder Direct Transferee, any Founder Indirect Transferee or any of their respective affiliates or successors or any “group,” or any member of any such group, to which such persons are a party under Rule 13d-5 of the Exchange Act, or (b) any person whose ownership of shares in excess of the 15% limitation set forth herein is the result of any action taken solely by the Corporation, provided that such person shall be an interested stockholder if thereafter such person acquires additional shares of voting stock of the Corporation, except as a result of further corporate action not caused, directly or indirectly, by such person. For the purpose of determining whether a person is an interested stockholder, the voting stock of the Corporation deemed to be outstanding shall include stock deemed to be owned by the person through application of the definition of “owner” below but shall not include any other unissued stock of the Corporation which may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise.
8. “owner,” including the terms “own” and “owned,” when used with respect to any stock, means a person that individually or with or through any of its affiliates or associates:
(i) beneficially owns such stock, directly or indirectly; or
(ii) has (a) the right to acquire such stock (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding, or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise; provided, however, that a person shall not be deemed the owner of stock tendered pursuant to a tender or exchange offer made by such person or any of such person’s affiliates or associates until such tendered stock is accepted for purchase or exchange; or (b) the right to vote such stock pursuant to any agreement, arrangement or understanding; provided, however, that a person shall not be deemed the owner of any stock because of such person’s right to vote such stock if the agreement, arrangement or understanding to vote such stock arises solely from a revocable proxy or consent given in response to a proxy or consent solicitation made to ten (10) or more persons; or
(iii) has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting (except voting pursuant to a revocable proxy or consent as described in item (b) of subsection (ii) above), or disposing of such stock with any other person that beneficially owns, or whose affiliates or associates beneficially own, directly or indirectly, such stock.
9. “person” means any individual, corporation, partnership, unincorporated association or other entity.
10. “stock” means, with respect to any corporation, capital stock and, with respect to any other entity, any equity interest.
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11. “voting stock” means stock of any class or series entitled to vote generally in the election of directors.
Article Thirteenth: If any provision or provisions of this Amended and Restated Certificate shall be held to be invalid, illegal or unenforceable as applied to any circumstance for any reason whatsoever: (i) the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Amended and Restated Certificate (including, without limitation, each portion of any paragraph of this Amended and Restated Certificate containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and (ii) to the fullest extent possible, the provisions of this Amended and Restated Certificate (including, without limitation, each such portion of any paragraph of this Amended and Restated Certificate containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to permit the Corporation to protect its directors, officers, employees and agents from personal liability in respect of their good faith service or for the benefit of the Corporation to the fullest extent permitted by law.
Article Fourteenth:
A. In recognition and anticipation that members of the Board of Directors who are not employees of the Corporation (“Non-Employee Directors”) and their respective Affiliates may now engage and may continue to engage in the same or similar activities or related lines of business as those in which the Corporation, directly or indirectly, may engage and/or other business activities that overlap with or compete with those in which the Corporation, directly or indirectly, may engage, the provisions of this Article Fourteenth are set forth to regulate and define the conduct of certain affairs of the Corporation with respect to certain classes or categories of business opportunities as they may involve any Non-Employee Directors or their respective Affiliates and the powers, rights, duties and liabilities of the Corporation and its directors, officers and stockholders in connection therewith.
B. None of any Non-Employee Director (including any Non-Employee Director who serves as an officer of the Corporation in both his or her director and officer capacities) or his or her Affiliates (the Persons (as defined below) identified in (i) and (ii) above being referred to, collectively, as “Identified Persons” and, individually, as an “Identified Person”) shall, to the fullest extent permitted by law, have any duty to refrain from directly or indirectly (1) engaging in the same or similar business activities or lines of business in which the Corporation or any of its Affiliates now engages or proposes to engage or (2) otherwise competing with the Corporation or any of its Affiliates, and, to the fullest extent permitted by law, no Identified Person shall be liable to the Corporation or its stockholders or to any Affiliate of the Corporation for breach of any fiduciary duty solely by reason of the fact that such Identified Person engages in any such activities. To the fullest extent permitted by law, the Corporation hereby renounces any interest or expectancy in, or right to be offered an opportunity to participate in, any business opportunity which may be a corporate opportunity for an Identified Person and the Corporation or any of its Affiliates, except as provided in Section (D) of this Article Fourteenth. Subject to said Section (D) of this Article Fourteenth, in the event that any Identified Person acquires knowledge of a potential transaction or other matter or business opportunity which may be a corporate opportunity for itself, herself or himself and the Corporation or any of its Affiliates, such Identified Person shall, to the fullest extent permitted by law, have no fiduciary duty or other duty (contractual or otherwise) to communicate, present or offer such transaction or other business opportunity to the Corporation or any of its Affiliates and, to the fullest extent permitted by law, shall not be liable to the Corporation or its stockholders or to any Affiliate of the Corporation for breach of any fiduciary duty or other duty (contractual or otherwise) as a stockholder, director or officer of the Corporation solely by reason of the fact that such Identified Person pursues or acquires such corporate opportunity for itself, herself or himself, offers or directs such corporate opportunity to another Person, or does not present such corporate opportunity to the Corporation or any of its Affiliates.
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C. The Corporation and its Affiliates do not have any rights in and to the business ventures of any Identified Person, or the income or profits derived therefrom, and the Corporation agrees that each of the Identified Persons may do business with any potential or actual customer or supplier of the Corporation or may employ or otherwise engage any officer or employee of the Corporation.
D. The Corporation does not renounce its interest in any corporate opportunity offered to any Non-Employee Director (including any Non-Employee Director who serves as an officer of this Corporation) if such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the Corporation, and the provisions of Section (B) of this Article Fourteenth shall not apply to any such corporate opportunity.
E. In addition to and notwithstanding the foregoing provisions of this Article Fourteenth, a corporate opportunity shall not be deemed to be a potential corporate opportunity for the Corporation if it is a business opportunity that (i) the Corporation is neither financially or legally able, nor contractually permitted to undertake, (ii) from its nature, is not in the line of the Corporation’s business or is of no practical advantage to the Corporation or (iii) is one in which the Corporation has no interest or reasonable expectancy.
F. For purposes of this Article Fourteenth, (i) “Affiliate” shall mean (a) in respect of a Non-Employee Director, any Person that, directly or indirectly, is controlled by such Non-Employee Director (other than the Corporation and any entity that is controlled by the Corporation) and (b) in respect of the Corporation, any Person that, directly or indirectly, is controlled by the Corporation; and (ii) “Person” shall mean any individual, corporation, general or limited partnership, limited liability company, joint venture, trust, association or any other entity.
G. To the fullest extent permitted by law, any Person purchasing or otherwise acquiring any interest in any shares of capital stock of the Corporation shall be deemed to have notice of and to have consented to the provisions of this Article Fourteenth. Neither the alteration, amendment, addition to or repeal of this Article Fourteenth, nor the adoption of any provision of this Amended and Restated Certificate of Incorporation (including any certificate of designation relating to any series of Preferred Stock) inconsistent with this Article Fourteenth, shall eliminate or reduce the effect of this Article Fourteenth in respect of any business opportunity first identified or any other matter occurring, or any cause of action, suit or claim that, but for this Article Fourteenth, would accrue or arise, prior to such alteration, amendment, addition, repeal or adoption.
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IN WITNESS WHEREOF, the Corporation has caused this Amended and Restated Certificate to be executed as of this __ day of ____________, 2020.
BENTLEY SYSTEMS, INCORPORATED | ||
By: | ||
Name: | ||
Title: |
Exhibit 3.2
AMENDED AND RESTATED
BYLAWS
of
BENTLEY SYSTEMS, INCORPORATED
(A Delaware Corporation)
Article 1. MEETINGS OF STOCKHOLDERS
Section 1.1. Place, Date and Time of Meeting. Meetings of the stockholders of the Corporation shall be held at such place, date and time as may be fixed by the Board of Directors of the Corporation (the “Board” or the “Board of Directors”). If no place is so fixed, they shall be held at the office of the Corporation in Wilmington, New Castle County, Delaware.
Section 1.2. Annual Meeting. The annual meeting of stockholders, for the election of directors and the transaction of any other business which may be properly brought before the meeting in accordance with these Bylaws, shall, unless the Board of Directors shall determine otherwise, be held, at 1:00 P.M. on the first Tuesday in June each year, if not a legal holiday under the laws of Delaware and, if a legal holiday, then on the next secular day following. The Board of Directors may, in its sole discretion, determine that meetings of stockholders shall not be held at any place, but may instead be held solely by means of remote communication as described in Section 1.7 of these Bylaws in accordance with Section 211(a)(2) of the General Corporation Law of the State of Delaware (as the same exists or may hereafter be amended from time to time, the “DGCL”).
Section 1.3. Special Meetings. Unless otherwise provided by the Amended and Restated Certificate of Incorporation of the Corporation (as the same may be amended and/or restated from time to time, the “Certificate of Incorporation”) or by statute, special meetings of stockholders for any purpose or purposes may be called at any time by a majority of the total number of authorized directors, the chairperson of the Board of Directors, the Chief Executive Officer (or, if a Chief Executive Officer is not then currently in office, the President), and may not be called by any other person or persons
Section 1.4. Organization. At every meeting of the stockholders, the President, or in such person’s absence, a Vice President, or in the absence of the President and all the Vice Presidents, a chairperson chosen by the stockholders, shall act as chairperson; and the Secretary, or in such person’s absence, a person appointed by the chairperson, shall act as Secretary.
Section 1.5. Quorum; Voting. Except as otherwise specified herein or in the Certificate of Incorporation or provided by law, (a) a quorum shall consist of the holders of a majority in voting power of the shares of capital stock of the Corporation issued and outstanding and entitled to vote at the meeting, and (b) when a quorum is present, all matters shall be decided by the vote of the holders of a majority in voting power of the shares of capital stock of the Corporation issued and outstanding, whether such holders are present in person or by proxy.
Notwithstanding the foregoing sentence and subject to the Amended and Restated Certificate of Incorporation, all elections of directors shall be determined by a plurality of the votes cast in respect of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors.
Section 1.6. Advance Notice of Stockholder Nominations and Proposals.
(a) Annual Meetings of Stockholders; Timely Notice. At a meeting of the stockholders, only such nominations of persons for the election of directors and such other business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, nominations or such other business must be: (i) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors or any duly authorized committee thereof, (ii) otherwise properly brought before the meeting by or at the direction of the Board of Directors or any duly authorized committee thereof, or (iii) otherwise properly brought before an annual meeting by a stockholder who is a stockholder of record of the Corporation at the time such notice of meeting is delivered, who is entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 1.6. In addition, any proposal of business (other than the nomination of persons for election to the Board of Directors) must be a proper matter for stockholder action. For business (including, but not limited to, director nominations) to be properly brought before an annual meeting by a stockholder, the stockholder or stockholders of record intending to propose the business (the “Proposing Stockholder”) must have given timely notice thereof pursuant to this Section 1.6(a) or Section 1.6(c) below, as applicable, in writing to the Secretary of the Corporation even if such matter is already the subject of any notice to the stockholders or public disclosure from the Board of Directors. To be timely, a Proposing Stockholder’s written notice shall set forth all information required under Section 1.6(b) and shall be delivered to the Secretary at the principal executive offices of the Corporation not less than 90 days nor more than 120 days prior to the first anniversary of the immediately preceding year’s annual meeting (which date shall, for purposes of the Corporation’s first annual meeting of stockholders after its shares of Common Stock are first publicly traded, be deemed to have occurred on [[●], 2020]); provided, however, that in the event that no annual meeting was held in the previous year or the annual meeting is called for a date that is not within 30 days from the first anniversary of the immediately preceding year’s annual meeting date, written notice by a Proposing Stockholder in order to be timely must be received no earlier than the 120th day before the date of such annual meeting and not later than the later of the 90th day before the date of such annual meeting, as originally convened, or, if notice of the date of such annual meeting is given to the public after the 120th day before such date, the close of business on the tenth day following the day on which the first public disclosure of the date of such annual meeting was made, or within a reasonable time after the Corporation has provided notice of the date of such annual meeting to the public. In no event shall the public disclosure of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of stockholder’s notice as described above.
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(b) Stockholder Nominations. For the nomination of any person or persons for election to the Board of Directors, a Proposing Stockholder’s notice to the Secretary of the Corporation shall set forth (i) the name, age, business address and residence address of each nominee proposed in such notice, (ii) the principal occupation or employment of each such nominee, (iii) the number of shares of capital stock of the Corporation that are owned of record and beneficially by each such nominee (if any), (iv) such other information concerning each such nominee as would be required to be disclosed in a proxy statement soliciting proxies for the election of such nominee as a director in an election contest (even if an election contest is not involved) or that is otherwise required to be disclosed under Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations promulgated thereunder, (v) the consent of the nominee to being named in the proxy statement as a nominee and to serving as a director if elected, and (vi) as to the Proposing Stockholder and the beneficial owner, if any, on whose behalf the nomination is made: (A) the name and address of the Proposing Stockholder as they appear on the Corporation's books and of such beneficial owner, if any, on whose behalf the nomination is being made, (B) the class and number of shares of the Corporation that are owned by the Proposing Stockholder (beneficially and of record) and owned by the beneficial owner, if any, on whose behalf the nomination is being made, as of the date of the Proposing Stockholder's notice, and a representation that the Proposing Stockholder will notify the Corporation in writing of the class and number of such shares owned of record and beneficially as of the record date for the meeting promptly following the later of the record date or the date notice of the record date is first publicly disclosed, (C) a description of any agreement, arrangement or understanding with respect to such nomination between or among the Proposing Stockholder and any of its affiliates or associates, and any others (including their names) acting in concert with any of the foregoing, and a representation that the Proposing Stockholder will notify the Corporation in writing of any such agreement, arrangement or understanding in effect as of the record date for the meeting promptly following the later of the record date or the date notice of the record date is first publicly disclosed, (D) a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, hedging transactions, and borrowed or loaned shares) that has been entered into as of the date of the Proposing Stockholder’s notice by, or on behalf of, the Proposing Stockholder or any of its affiliates or associates, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of the Proposing Stockholder or any of its affiliates or associates with respect to shares of stock of the Corporation, and a representation that the Proposing Stockholder will notify the Corporation in writing of any such agreement, arrangement or understanding in effect as of the record date for the meeting promptly following the later of the record date or the date notice of the record date is first publicly disclosed, (E) a representation that the Proposing Stockholder is a holder of record of shares of the Corporation entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice, (F) a representation whether the Proposing Stockholder or beneficial owner, if any, intends or is part of a group that intends to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to approve the nomination and/or otherwise to solicit proxies from stockholders in support of the nomination, and (G) any other information relating to the Proposing Stockholder and beneficial owner, if any, required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for the election of directors in an election contest (even if an election contest is not involved) or that is otherwise required to be disclosed, under Section 14(a) of the Exchange Act and the rules and regulations promulgated thereunder. The Corporation may require any proposed nominee to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve as an independent director of the Corporation or that could be material to a reasonable stockholder’s understanding of the independence, or lack thereof, of such nominee. Notwithstanding anything in Section 1.6(a) to the contrary, in the event that the number of directors to be elected to the Board of Directors at the annual meeting is increased effective after the time period for which nominations would otherwise be due under Section 1.6(a) and there is no public announcement by the Corporation naming the nominees for the additional directorships at least one hundred (100) days prior to the first anniversary of the preceding year's annual meeting, the Proposing Stockholder’s notice required by this Section 1.6 shall also be considered timely, but only with respect to nominees for the additional directorships, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the tenth day following the day on which such public announcement is first made by the Corporation.
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(c) Other Stockholder Proposals. For all business other than director nominations, a Proposing Stockholder’s notice to the Secretary of the Corporation shall set forth as to each matter the Proposing Stockholder proposes to bring before the annual meeting: (i) a brief description of the business desired to be brought before the annual meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend the Bylaws of the Corporation, the language of the proposed amendment), and the reasons for conducting such business at the annual meeting and any material interest of such stockholder and beneficial owner, if any, in such business, (ii) any other information relating to such stockholder and beneficial owner, if any, on whose behalf the proposal is being made, required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for the proposal and pursuant to and in accordance with Section 14(a) of the Exchange Act and the rules and regulations promulgated thereunder and (iii) the information required by Section 1.6(b)(vi) above, provided that all references to a nomination shall be deemed to refer to such other business.
(d) Proxy Rules. The foregoing notice requirements of Sections 1.6(c)(i) and (ii) shall be deemed satisfied by a stockholder with respect to business other than a nomination if the stockholder has notified the Corporation of his, her or its intention to present a proposal at an annual meeting in compliance with the applicable rules and regulations promulgated under Section 14(a) of the Exchange Act and such stockholder’s proposal has been included in a proxy statement that has been prepared by the Corporation to solicit proxies for such annual meeting.
(e) Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (x) by or at the direction of the Board of Directors or any committee thereof or (y) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who is a stockholder of record at the time the notice provided for in this Section 1.6 is delivered to the Secretary of the Corporation, who is entitled to vote at the meeting and upon such election and who complies with the notice procedures set forth in this Section 1.6. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder entitled to vote in such election of directors may nominate a person or persons (as the case may be) for election to such position(s) as specified in the Corporation’s notice of meeting, if the stockholder’s notice required by this Section 1.6 shall be delivered to the Secretary at the principal executive offices of the Corporation no earlier than the close of business on the 120th day prior to such special meeting and no later than the close of business on the later of the 90th day prior to such special meeting or the tenth day following the date of public disclosure of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall the public disclosure of an adjournment or postponement of a special meeting commence a new time period (or extend any notice time period).
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(f) Effect of Noncompliance. Notwithstanding anything in these Bylaws to the contrary: (i) no nominations shall be made or business shall be conducted at any annual meeting except in accordance with the procedures set forth in this Section 1.6, and (ii) unless otherwise required by law, if (x) a Proposing Stockholder intending to propose business or make nominations at an annual meeting pursuant to this Section 1.6 does not provide the information required under this Section 1.6 to the Corporation promptly following the later of the record date or the date notice of the record date is first publicly announced, or (y) the Proposing Stockholder (or a qualified representative of the Proposing Stockholder) does not appear at the meeting to present the proposed business or nominations, such business or nominations shall not be considered, notwithstanding that proxies in respect of such business or nominations may have been received by the Corporation. Except as otherwise provided by law, the chairperson of the meeting shall have the power and duty (I) to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this Section 1.6 and (II) if any proposed nomination or business was not made or proposed in compliance with this Section 1.6, to declare that such nomination shall be disregarded or that such proposed business shall not be transacted.
(g) General. For purposes of this Section 1.6, to be considered a qualified representative of the Proposing Stockholder, a person must be a duly authorized officer, manager or partner of such Proposing Stockholder or must be authorized by a writing executed by such Proposing Stockholder or an electronic transmission delivered by such Proposing Stockholder to act for such Proposing Stockholder as proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders. For purposes of this Section 1.6, “public announcement” shall include disclosure in a press release reported by the Dow Jones News Service, Associated Press, Business Wire or PR Newswire or other national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act and the rules and regulations promulgated thereunder. Notwithstanding the foregoing provisions of this Section 1.6, a Proposing Stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations promulgated thereunder with respect to the matters set forth in this Section 1.6; provided however, that any references in these Bylaws to the Exchange Act or the rules and regulations promulgated thereunder are not intended to and shall not limit any requirements applicable to nominations or proposals as to any other business to be considered pursuant to this Section 1.6, and compliance with this Section 1.6 shall be the exclusive means for a stockholder to make nominations or submit other business (other than, as provided in Section 1.6(d), business other than nominations brought properly under and in compliance with Rule 14a-8 of the Exchange Act, as may be amended from time to time). Nothing in this Section 1.6 shall be deemed to affect any rights of stockholders to request inclusion of proposals or nominations in the Corporation’s proxy statement pursuant to applicable rules and regulations promulgated under the Exchange Act.
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Section 1.7. Remote Communication. If authorized by the Board of Directors in its sole discretion, and subject to such guidelines and procedures as the Board of Directors may adopt, stockholders and proxy holders not physically present at a meeting of stockholders may, by means of remote communication:
(A) participate in a meeting of stockholders; and
(B) be deemed present in person and vote at a meeting of stockholders whether such meeting is to be held at a designated place or solely by means of remote communication, provided, that
(1) the Corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxyholder;
(2) the Corporation shall implement reasonable measures to provide such stockholders and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings; and
(3) if any stockholder or proxyholder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action shall be maintained by the Corporation.
Article 2. DIRECTORS
Section 2.1. Number and Term of Office. The number of directors of the Corporation shall be such number as shall be designated from time to time by Resolution of the Board of Directors. The Directors shall be elected at the annual meeting of the stockholders, except as provided in Section 2.2 hereof. Each director elected shall hold office for a term of one year and shall serve until such person’s successor is elected and qualified or until such person’s earlier death, resignation or removal.
Section 2.2. Resignations. Any director may resign at any time by giving written notice to the Board of Directors, to the President, or to the Secretary. Such resignation shall take effect at the time of the receipt of such notice or any later time specified therein; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
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Any vacancy in the Board of Directors, resulting from death, resignation, increase in the authorized number of directors or otherwise, may, except as otherwise provided in the Certificate of Incorporation, be filled for the unexpired term by a majority vote of the remaining directors in office, though less than a quorum.
Section 2.3. Annual Meeting. Immediately after each annual election of directors, the Board of Directors shall meet for the purpose of organization, election of officers, and the transaction of other business, at the place where such election of directors was held. Notice of such meeting need not be given. In the absence of a quorum at said meeting, the same may be held at any other time and place which shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors.
Section 2.4. Regular Meetings. Regular meetings of the Board of Directors may be held without notice at such time and place as shall from time to time be determined by the Board.
Section 2.5. Special Meetings. Special meetings of the Board of Directors may be called by the Chief Executive Officer, the President, a Vice President, the chairperson or by two or more of the directors, and shall be held at such time and place as shall be designated in the call for the meeting.
Notice of each special meeting shall be given by mail, telegram, telephone, or orally, by or at the direction of the person or persons authorized to call such meeting, to each director, at least one day prior to the day named for the meeting.
Section 2.6. Organization. Every meeting of the Board of Directors shall be presided over by the Chairperson of the Board of Directors, if one has been selected and is present, and, if not, the President, or in the absence of the Chairperson of the Board of Directors and the President, a Vice President, or in the absence of the Chairperson of the Board, the President and all the Vice Presidents, a chairperson chosen by a majority of the directors present. The Secretary, or in such person’s absence, a person appointed by the Chairperson, shall act as Secretary.
Section 2.7. Quorum: Voting. A majority of the directors shall constitute a quorum for the transaction of business and the vote of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute or by the Certificate of Incorporation or as provided herein. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.
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Section 2.8. Committees; Committee Rules. The Board of Directors may designate one or more committees, including but not limited to an Audit Committee, each such committee to consist of one or more of the directors of the Corporation, subject to the Exchange Act and rules and regulations thereunder and applicable stock exchange rules. The Board of Directors may designate one or more directors as alternate members of any committee to replace any absent or disqualified member at any meeting of the committee. Any such committee, to the extent provided in the resolution of the Board of Directors establishing such committee, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers that may require it; but no such committee shall have the power or authority in reference to the following matters: (a) approving or adopting, or recommending to the stockholders, any action or matter (other than the election or removal of directors) expressly required by the DGCL to be submitted to stockholders for approval or (b) adopting, amending or repealing any Bylaw of the Corporation. All committees of the Board of Directors shall keep minutes of their meetings and shall report their proceedings to the Board of Directors when requested or required by the Board of Directors. Each committee of the Board of Directors may fix its own rules of procedure and shall hold its meetings as provided by such rules, except as may otherwise be provided by a resolution of the Board of Directors designating such committee. Unless otherwise provided in such a resolution, the presence of at least a majority of the members of the committee shall be necessary to constitute a quorum unless the committee shall consist of one or two members, in which event one member shall constitute a quorum; and all matters shall be determined by a majority vote of the members present at a meeting of the committee at which a quorum is present. Unless otherwise provided in such a resolution, in the event that a member and that member’s alternate, if alternates are designated by the Board of Directors, of such committee is or are absent or disqualified, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member.
Section 2.9. Compensation of Directors. Each director shall be entitled to receive such compensation, if any, as may from time to time be fixed, for each meeting of the Board of Directors or any committee thereof, regular or special, attended by such director. Directors may also be reimbursed by the Corporation for all reasonable expenses incurred in traveling to and from the place of each meeting of the Board of Directors or any such committee.
Section 2.10. Action Without a Meeting. Unless otherwise restricted by the Certificate of Incorporation, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if all members of the Board of Directors or any committee thereof, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed in the minutes of proceedings of the Board of Directors. Such filing shall be in paper form if the minutes are maintained in paper form or shall be in electronic form if the minutes are maintained in electronic form.
Section 2.11. Remote Meeting. Unless otherwise restricted by the Certificate of Incorporation, members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting by means of conference telephone or other communications equipment in which all persons participating in the meeting can hear each other. Participation in a meeting by means of conference telephone or other communications equipment shall constitute presence in person at such meeting.
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Section 2.12. Reliance on Books and Records. A member of the Board of Directors, or a member of any committee designated by the Board of Directors shall, in the performance of such person’s duties, be fully protected in relying in good faith upon records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of the Corporation’s officers or employees, or committees of the Board of Directors, or by any other person as to matters the member reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.
Article 3. OFFICERS
Section 3.1. Number. The officers of the Corporation shall be a Chief Executive Officer, a President, a principal financial officer, a principal accounting officer, a Secretary, a Treasurer, and may include a Chairperson of the Board, one or more Vice Presidents, one or more Assistant Secretaries, one or more Assistant Treasurers, one or more Division Vice Presidents, and such other officers as the Board of Directors may from time to time determine. Any number of offices may be held by the same person.
Section 3.2. Election and Term of Office. The officers of the Corporation shall be elected by the Board of Directors at its annual meeting, but the Board of Directors may elect officers or fill vacancies among the officers at any other meeting. Subject to earlier termination of office, each officer shall hold office for one year and until such person’s successor shall have been elected and qualified.
Section 3.3. Resignations. Any officer may resign at any time by giving written notice to the Board of Directors, the Chief Executive Officer, the President, or to the Secretary of the Corporation. Any such resignation shall take effect at the time of the receipt of such notice or at any later time specified therein; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
Section 3.4. Removal. Any officer elected by the Board of Directors may be removed at any time with or without cause by the vote of a majority of the Board of Directors.
Section 3.5. Chairperson of the Board of Directors. If there is a Chairperson of the Board of Directors, such person shall preside at the meetings of the Board. Such Chairperson shall also perform such other duties as may be specified by the Board of Directors from time to time and as do not conflict with the duties of the President.
Section 3.6. The Chief Executive Officer. The Chief Executive Officer of the Corporation shall be the chief executive officer of the Corporation and shall have general supervision over the business and operations of the Corporation, subject, however, to the control of the Board of Directors. Such person shall sign, execute, and acknowledge, in the name of the Corporation, deeds, mortgages, bonds, contracts, and other instruments authorized by the Board, except in cases where the signing and execution thereof shall be delegated by the Board of Directors to some other officer or agent of the Corporation; and, in general, such person shall perform all duties incident to the office of Chief Executive Officer, and such other duties as from time to time may be assigned to such person by the Board.
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Section 3.7. The President. The President of the Corporation shall have general supervision over the business and operations of the Corporation, subject, however, to the control of the Board of Directors. Such person shall sign, execute, and acknowledge, in the name of the Corporation, deeds, mortgages, bonds, contracts, and other instruments authorized by the Board, except in cases where the signing and execution thereof shall be delegated by the Board of Directors to some other officer or agent of the Corporation; and, in general shall perform all duties incident to the office of President, and such other duties as from time to time may be assigned to such person by the Board.
Section 3.8. The Vice Presidents. In the absence or disability of the President or when so directed by the President, any Vice President designated by the Board of Directors may perform all the duties of the President, and, when so acting, shall have all the powers of, and be subject to all the restrictions upon, the President; provided, however, that no Vice President shall act as a member of or as chairperson of any special committee of which the President is a member or chairperson by designation or ex-officio, except when designated by the Board. The Vice Presidents shall perform such other duties as from time to time may be assigned to them respectively by the Board of Directors or the President.
Section 3.9. The Secretary. The Secretary shall record all the votes of the stockholders and of the directors and the minutes of the meetings of the stockholders and of the Board of Directors in a book or books to be kept for that purpose; such person shall see that notices of meetings of the stockholders and the Board of Directors are given and that all records and reports are properly kept and filed by the Corporation as required by law; such person shall be the custodian of the seal of the Corporation and shall see that it is affixed to all documents to be executed on behalf of the Corporation under its seal; and, in general, such person shall perform all duties incident to the office of Secretary, and such other duties as may from time to time be assigned to such person by the Board of Directors or the President.
Section 3.10. Assistant Secretaries. In the absence or disability of the Secretary or when so directed by the Secretary, any Assistant Secretary may perform all the duties of the Secretary, and, when so acting, shall have all the powers of, and be subject to all the restrictions upon, the Secretary. The Assistant Secretaries shall perform such other duties as from time to time may be assigned to them respectively by the Board of Directors, the President, or the Secretary.
Section 3.11. The Treasurer. The Treasurer shall have charge of all receipts and disbursements of the Corporation and shall have or provide for the custody of its funds and securities; such person shall have full authority to receive and give receipts for all money due and payable to the Corporation, and to endorse checks, drafts, and warrants in its name and on its behalf and to give full discharge for the same; such person shall deposit all funds of the Corporation, except such as may be required for current use, in such banks or other places of deposit as the Board of Directors may from time to time designate; and, in general, such person shall perform all duties incident to the office of Treasurer and such other duties as may from time to time be assigned to such person by the Board of Directors or the President.
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Section 3.12. Division Vice Presidents. The Division Vice Presidents shall perform such duties as from time to time may be assigned to them respectively by the Board of Directors, the President, or other Corporate officer to whom the Division Vice President reports. Notwithstanding anything in these Bylaws to the contrary, the Division Vice Presidents shall have none of the powers and authority generally given to Vice Presidents or other officers of the Corporation, except for powers and authority delegated by the Board of Directors, the President, or other Corporate officer to whom the Division Vice President reports.
Section 3.13. Assistant Treasurers. In the absence or disability of the Treasurer or when so directed by the Treasurer, any Assistant Treasurer may perform all the duties of the Treasurer, and, when so acting, shall have all the powers of: and be subject to all the restrictions upon the Treasurer. The Assistant Treasurers shall perform such other duties as from time to time may be assigned to them respectively by the Board of Directors, the President or the Treasurer.
Section 3.14. Compensation of Officers and Others. The compensation of all officers shall be fixed from time to time by the Board of Directors, or any committee or officer authorized by the Board of Directors so to do. No officer shall be precluded from receiving compensation by reason of the fact such person is also a director of the Corporation.
Section 3.15. Corporate Funds and Checks. The funds of the Corporation shall be kept in such depositories as shall from time to time be prescribed by the Board of Directors or its designees selected for such purposes. All checks or other orders for the payment of money shall be signed by the Chief Executive Officer, the President, a Vice President, the Treasurer or the Secretary or such other person or agent as may from time to time be authorized and with such countersignature, if any, as may be required by the Board of Directors.
Section 3.16. Contracts and Other Documents. The Chief Executive Officer and the Secretary, or such other officer or officers as may from time to time be authorized by the Board of Directors or any other committee given specific authority in the premises by the Board of Directors during the intervals between the meetings of the Board of Directors, shall have power to sign and execute on behalf of the Corporation deeds, conveyances and contracts, and any and all other documents requiring execution by the Corporation.
Section 3.17. Ownership of Stock of Another Corporation. Unless otherwise directed by the Board of Directors, the Chief Executive Officer, the President, a Vice President, the Treasurer or the Secretary, or such other officer or agent as shall be authorized by the Board of Directors, shall have the power and authority, on behalf of the Corporation, to attend and to vote at any meeting of securityholders of any entity in which the Corporation holds securities or equity interests and may exercise, on behalf of the Corporation, any and all of the rights and powers incident to the ownership of such securities or equity interests at any such meeting, including the authority to execute and deliver proxies and consents on behalf of the Corporation.
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Article 4. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 4.1. Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a “proceeding”), by reason of the fact that he or she is or was a director or an officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee, agent or trustee of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (hereinafter an “indemnitee”), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee, agent or trustee or in any other capacity while serving as a director, officer, employee, agent or trustee, shall be indemnified and held harmless by the Corporation to the fullest extent permitted by Delaware law, as the same exists or may hereafter be amended (but, in the case of any such amendment, if permitted, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than such law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith; provided, however, that, except as provided in Section 4.03 with respect to proceedings to enforce rights to indemnification or advancement of expenses or with respect to any compulsory counterclaim brought by such indemnitee, the Corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the Board of Directors.
Section 4.2. Right to Advancement of Expenses. In addition to the right to indemnification conferred in Section 4.01, an indemnitee shall also have the right to be paid by the Corporation the expenses (including attorney’s fees) incurred in appearing at, participating in or defending any such proceeding in advance of its final disposition or in connection with a proceeding brought to establish or enforce a right to indemnification or advancement of expenses under this Article 4 (which shall be governed by Section 4.03 (hereinafter an “advancement of expenses”); provided, however, that, if the DGCL requires or in the case of an advance made in a proceeding brought to establish or enforce a right to indemnification or advancement, an advancement of expenses incurred by an indemnitee in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made solely upon delivery to the Corporation of an undertaking (hereinafter an “undertaking”), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a “final adjudication”) that such indemnitee is not entitled to be indemnified or entitled to advancement of expenses under Sections 4.01 and 4.02 or otherwise.
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Section 4.3. Right of Indemnitee to Bring Suit. If a claim under Section 4.01 or 4.02 is not paid in full by the Corporation within (a) 60 days after a written claim for indemnification has been received by the Corporation or (b) 20 days after a claim for an advancement of expenses has been received by the Corporation, the indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim or to obtain advancement of expenses, as applicable. To the fullest extent permitted by law, if successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In any suit brought by the indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the indemnitee to enforce a right to an advancement of expenses) it shall be a defense that the indemnitee has not met any applicable standard for indemnification set forth in the DGCL, and in any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses upon a final adjudication that the indemnitee has not met any applicable standard for indemnification set forth in the DGCL. Neither the failure of the Corporation (including its directors who are not parties to such action, a committee of such directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee is proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including its directors who are not parties to such action, a committee of such directors, independent legal counsel, or its stockholders) that the indemnitee has not met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article 4 or otherwise shall be on the Corporation.
Section 4.4. Indemnification Not Exclusive.
(A) The provision of indemnification to or the advancement of expenses and costs to any indemnitee under this Article 4, or the entitlement of any indemnitee to indemnification or advancement of expenses and costs under this Article 4, shall not limit or restrict in any way the power of the Corporation to indemnify or advance expenses and costs to such indemnitee in any other way permitted by law or be deemed exclusive of, or invalidate, any right to which any indemnitee seeking indemnification or advancement of expenses and costs may be entitled under any law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such indemnitee’s capacity as an officer, director, employee or agent of the Corporation and as to action in any other capacity.
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(B) Given that certain jointly indemnifiable claims (as defined below) may arise due to the service of the indemnitee as a director and/or officer of the Corporation at the request of the indemnitee-related entities (as defined below), the Corporation shall be fully and primarily responsible for the payment to the indemnitee in respect of indemnification or advancement of all expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as required by the terms of the Amended and Restated Certificate or these Bylaws of the Corporation (or any other agreement between the Corporation and such persons) in connection with any such jointly indemnifiable claims, pursuant to and in accordance with the terms of this Article 4, irrespective of any right of recovery the indemnitee may have from the indemnitee-related entities. Any obligation on the part of any indemnitee-related entities to indemnify or advance expenses to any indemnitee shall be secondary to the Corporation’s obligation and shall be reduced by any amount that the indemnitee may collect as indemnification or advancement from the Corporation. The Corporation irrevocably waives, relinquishes and releases the indemnitee-related entities from any and all claims it may have against the indemnitee-related entities for contribution, subrogation or any other recovery of any kind in respect thereof. Under no circumstance shall the Corporation be entitled to any right of subrogation or contribution by the indemnitee-related entities and no right of advancement or recovery the indemnitee may have from the indemnitee-related entities shall reduce or otherwise alter the rights of the indemnitee or the obligations of the Corporation hereunder. In the event that any of the indemnitee-related entities shall make any payment to the indemnitee in respect of indemnification or advancement of expenses with respect to any jointly indemnifiable claim, the indemnitee-related entity making such payment shall be subrogated to the extent of such payment to all of the rights of recovery of the indemnitee against the Corporation, and the indemnitee shall execute all papers reasonably required and shall do all things that may be reasonably necessary to secure such rights, including the execution of such documents as may be necessary to enable the indemnitee-related entities effectively to bring suit to enforce such rights. Each of the indemnitee-related entities shall be third-party beneficiaries with respect to this Section 4.04(B) of Article 4, entitled to enforce this Section 4.04(B) of Article 4.
For purposes of this Section 4.04(B) of Article 4, the following terms shall have the following meanings:
(1) The term “indemnitee-related entities” means any corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise (other than the Corporation or any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise for which the indemnitee has agreed, on behalf of the Corporation or at the Corporation’s request, to serve as a director, officer, employee or agent and which service is covered by the indemnity described herein) from whom an indemnitee may be entitled to indemnification or advancement of expenses with respect to which, in whole or in part, the Corporation may also have an indemnification or advancement obligation.
(2) The term “jointly indemnifiable claims” shall be broadly construed and shall include, without limitation, any action, suit or proceeding for which the indemnitee shall be entitled to indemnification or advancement of expenses from both the indemnitee-related entities and the Corporation pursuant to Delaware law, any agreement or certificate of incorporation, bylaws, partnership agreement, operating agreement, certificate of formation, certificate of limited partnership or comparable organizational documents of the Corporation or the indemnitee-related entities, as applicable.
Section 4.5. Corporate Obligations; Reliance. The rights granted pursuant to the provisions of this Article VII shall vest at the time a person becomes a director or officer of the Corporation and shall be deemed to create a binding contractual obligation on the part of the Corporation to the persons who from time to time are elected as officers or directors of the Corporation, and such persons in acting in their capacities as officers or directors of the Corporation or any subsidiary shall be entitled to rely on such provisions of this Article 4 without giving notice thereof to the Corporation. Such rights shall continue as to an indemnitee who has ceased to be a director or officer and shall inure to the benefit of the indemnitee’s heirs, executors and administrators. Any amendment, alteration or repeal of this Article 4 that adversely affects any right of an indemnitee or its successors shall be prospective only and shall not limit, eliminate, or impair any such right with respect to any proceeding involving any occurrence or alleged occurrence of any action or omission to act that took place prior to such amendment or repeal.
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Section 4.6. Insurance. The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the DGCL.
Section 4.7. Indemnification of Employees and Agents of the Corporation. The Corporation may, to the extent authorized from time to time by the Board of Directors, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation to the fullest extent of the provisions of this Article 4 with respect to the indemnification and advancement of expenses of directors and officers of the Corporation.
Article 5. STOCK CERTIFICATES; TRANSFERS
Section 5.1. Shares With Certificates. The shares of stock of the Corporation shall be represented by certificates, provided that the Board of Directors may provide by resolution or resolutions that some or all of any or all classes or series of the Corporation’s stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the Corporation. Every holder of stock in the Corporation represented by certificates shall be entitled to have a certificate signed by, or in the name of the Corporation by any two authorized officers of the Corporation (it being understood that each of the Chairperson of the Board of Directors, the Vice Chairperson of the Board of Directors, the Chief Executive Officer, the President, the Chief Financial Officer, a Vice President, the Treasurer, an Assistant Treasurer, the Secretary and an Assistant Secretary of the Corporation shall be an authorized officer for such purpose). Any or all of the signatures on the certificate may be a facsimile or other electronic signature. The Board of Directors shall have the power to appoint one or more transfer agents and/or registrars for the transfer or registration of certificates of stock of any class, and may require stock certificates to be countersigned or registered by one or more of such transfer agents and/or registrars.
Section 5.2. Shares Without Certificates. If the Board of Directors chooses to issue shares of stock without certificates, the Corporation, if required by the DGCL, shall, within a reasonable time after the issue or transfer of shares without certificates, send the stockholder a written statement of the information required by the DGCL. The Corporation may adopt a system of issuance, recordation and transfer of its shares of stock by electronic or other means not involving the issuance of certificates, provided the use of such system by the Corporation is permitted in accordance with applicable law.
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Section 5.3. Transfer of Shares. Shares of stock of the Corporation shall be transferable upon its books by the holders thereof, in person or by their duly authorized attorneys or legal representatives, in the manner prescribed by law, the Amended and Restated Certificate and in these Bylaws, upon surrender to the Corporation by delivery thereof (to the extent evidenced by a physical stock certificate) to the person in charge of the stock and transfer books and ledgers. Certificates representing such shares, if any, shall be cancelled and new certificates, if the shares are to be certificated, shall thereupon be issued. Shares of capital stock of the Corporation that are not represented by a certificate shall be transferred in accordance with applicable law. A record shall be made of each transfer. Whenever any transfer of shares shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if, when the certificates are presented, both the transferor and transferee request the Corporation to do so. The Board of Directors shall have power and authority to make such rules and regulations as it may deem necessary or proper concerning the issue, transfer and registration of certificates for shares of stock of the Corporation.
Section 5.4. Lost, Stolen, Destroyed or Mutilated Certificates. A new certificate of stock or uncertificated shares may be issued in the place of any certificate previously issued by the Corporation alleged to have been lost, stolen or destroyed, and the Corporation may, in its discretion, require the owner of such lost, stolen or destroyed certificate, or his or her legal representative, to give the Corporation a bond, in such sum as the Corporation may direct, in order to indemnify the Corporation against any claims that may be made against it in connection therewith. A new certificate or uncertificated shares of stock may be issued in the place of any certificate previously issued by the Corporation that has become mutilated upon the surrender by such owner of such mutilated certificate and, if required by the Corporation, the posting of a bond by such owner in an amount sufficient to indemnify the Corporation against any claim that may be made against it in connection therewith.
Section 5.5. List of Stockholders Entitled To Vote. The Corporation shall prepare, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting (provided, however, that if the record date for determining the stockholders entitled to vote is less than ten (10) days before the date of the meeting, the list shall reflect the stockholders entitled to vote as of the tenth (10th) day before the meeting date), arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting at least ten (10) days prior to the meeting (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of meeting, or (b) during ordinary business hours at the principal place of business of the Corporation. In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation. If the meeting is to be held at a place, then a list of stockholders entitled to vote at the meeting shall be produced and kept at the time and place of the meeting during the whole time thereof and may be examined by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting. Except as otherwise provided by law, the stock ledger shall be the only evidence as to who are the stockholders entitled to examine the list of stockholders required by this Section 5.05 or to vote in person or by proxy at any meeting of stockholders.
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Section 5.6. Fixing Date for Determination of Stockholders of Record.
(A) In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall, unless otherwise required by law, not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If the Board of Directors so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board of Directors determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for determination of stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote in accordance herewith at the adjourned meeting.
(B) In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall not be more than sixty (60) days prior to such action. If no such record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.
(C) Unless otherwise restricted by the Amended and Restated Certificate, in order that the Corporation may determine the stockholders entitled to express consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. If no record date for determining stockholders entitled to express consent to corporate action in writing without a meeting is fixed by the Board of Directors, (a) when no prior action of the Board of Directors is required by law, the record date for such purpose shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation in accordance with applicable law, and (b) if prior action by the Board of Directors is required by law, the record date for such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.
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Section 5.7. Registered Stockholders. Prior to the surrender to the Corporation of the certificate or certificates for a share or shares of stock or notification to the Corporation of the transfer of uncertificated shares with a request to record the transfer of such share or shares, the Corporation may treat the registered owner of such share or shares as the person entitled to receive dividends, to vote, to receive notifications and otherwise to exercise all the rights and powers of an owner of such share or shares. To the fullest extent permitted by law, the Corporation shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof.]
Article 6. AMENDMENTS
Section 6.1. By Stockholders or Directors. Except as otherwise specified herein or in the Corporation’s Certificate of Incorporation, these Bylaws may be amended or repealed at any regular meeting of the stockholders or directors, or at any special meeting thereof if notice of such amendment or repeal be contained in the notice of such special meeting. Except as otherwise specified herein or in the Corporation’s Certificate of Incorporation, these Bylaws shall be amended only pursuant to the vote of 66⅔% of the voting power of the shares of capital stock of the Corporation issued and outstanding or by a majority vote of the directors.
Article 7. Miscellaneous
Section 7.1. Electronic Transmission. For purposes of these Bylaws, “electronic transmission” means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved, and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.
Section 7.2. Corporate Seal. The Board of Directors may provide a suitable seal, containing the name of the Corporation, which seal shall be in the charge of the Secretary. If and when so directed by the Board of Directors or a committee thereof, duplicates of the seal may be kept and used by the Treasurer or by an Assistant Secretary or Assistant Treasurer.
Section 7.3. Fiscal Year. The fiscal year of the Corporation shall end on December 31 of each year, or such other day as the Board of Directors may designate.
Section 7.4. Section Headings. Section headings in these Bylaws are for convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein.
Section 7.5. Inconsistent Provisions. In the event that any provision of these Bylaws is or becomes inconsistent with any provision of the Certificate of Incorporation, the DGCL or any other applicable law, such provision of these Bylaws shall not be given any effect to the extent of such inconsistency but shall otherwise be given full force and effect.
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Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
The Board of Directors
Bentley Systems, Incorporated:
We consent to the use of our report dated March 6, 2020, with respect to the consolidated balance sheets of Bentley Systems, Incorporated as of December 31, 2019 and 2018, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2019, and the related notes, included herein and to the reference to our firm under the heading ‘Experts’ in the prospectus.
Our report refers to changes in accounting principle for revenue from contracts with customers and sales commissions due to the adoption of new accounting standards as of January 1, 2019.
/s/ KPMG LLP | |
Philadelphia, Pennsylvania | |
September 15, 2020 |