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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 16, 2001
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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INKTOMI CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 94-3238130
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
4100 E. THIRD AVENUE
FOSTER CITY, CA 94404
(650) 653-2800
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
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TIMOTHY STEVENS
SENIOR VICE PRESIDENT OF BUSINESS AFFAIRS AND GENERAL COUNSEL
4100 E. THIRD AVENUE
FOSTER CITY, CA 94404
(650) 653-2800
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
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Copies to:
DOUGLAS H. COLLOM
ANDREW J. HIRSCH
ROBERT F. KORNEGAY
DAVID P. JEDRZEJEK
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CA 94304
(650) 493-9300
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] _________________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ] ________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
==================================================================================================================================
PROPOSED PROPOSED
TITLE OF EACH CLASS OF MAXIMUM MAXIMUM OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED OFFERING PRICE (1) PRICE PER UNIT REGISTRATION FEE
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Common Stock, $0.001 par value(2)............................... -- -- --
Preferred Stock, $0.001 par value............................... -- -- --
Depositary Shares .............................................. -- -- --
Warrants(3)..................................................... -- -- --
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Total(4)........................................................ $115,000,000 100%(4) $28,750
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(1) These figures are estimates made solely for the purpose of calculating the
registration fee pursuant to Rule 457(o).
(2) Includes rights to purchase common stock which, subject to certain events,
will not be exercisable or evidenced separately from our common stock,
under our share purchase rights plan.
(3) Includes warrants to purchase common stock and warrants to purchase
preferred stock.
(4) The proposed maximum offering price per unit will be determined by us in
connection with the issuance of the securities.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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The information in this prospectus is not complete and may be changed. We may
not sell the securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities, and we are not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED AUGUST 16, 2001
PROSPECTUS
$115,000,000
INKTOMI CORPORATION
BY THIS PROSPECTUS, WE MAY OFFER --
COMMON STOCK
PREFERRED STOCK
DEPOSITARY SHARES
WARRANTS
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THESE SECURITIES INVOLVE SUBSTANTIAL RISKS.
SEE "RISK FACTORS" ON PAGE 3 FOR INFORMATION YOU SHOULD
CONSIDER BEFORE BUYING THE SECURITIES.
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Our common stock is listed on the Nasdaq National Market under the
symbol "INKT." On August 15, 2001, the last reported sale price of our common
stock on the Nasdaq National Market was $5.10 per share.
----------------------
We will provide specific terms of these securities in supplements to
this prospectus. You should read this prospectus and any supplement carefully
before you invest.
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This prospectus may not be used to offer and sell securities unless
accompanied by a prospectus supplement.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
This prospectus is dated August 16, 2001
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TABLE OF CONTENTS
PAGE
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SUMMARY ...................................................................... 1
RISK FACTORS.................................................................. 3
USE OF PROCEEDS............................................................... 11
RATIO OF EARNINGS TO COVER FIXED CHARGES AND PREFERRED DIVIDENDS.............. 11
DESCRIPTION OF COMMON STOCK................................................... 12
DESCRIPTION OF SHARE PURCHASE RIGHTS PLAN..................................... 13
DESCRIPTION OF PREFERRED STOCK................................................ 13
DESCRIPTION OF THE DEPOSITARY SHARES.......................................... 15
DESCRIPTION OF THE WARRANTS................................................... 17
PLAN OF DISTRIBUTION.......................................................... 19
LEGAL MATTERS................................................................. 20
INDEPENDENT ACCOUNTANTS....................................................... 20
WHERE YOU CAN FIND MORE INFORMATION........................................... 21
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, and the other documents we incorporate by reference into
this prospectus, include forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, and Section 21E of the Securities
Exchange Act of 1934. These forward-looking statements may sometimes be
identified by words such as "anticipate," "believe," "expect," "intend," "may,"
"will" and similar expressions. Forward-looking statements include, but are not
limited to, those relating to the general direction of our business, including
our Network Products and Portal Services businesses; our ability to successfully
enter new markets; our ability to introduce new products and services and
enhance existing products and services to meet customer needs, particularly in
the area of on-demand and live streaming media; our expected expenses for future
periods; our ability to improve our sales and distribution capabilities; our
focus on both domestic and international markets; our ability to develop and
maintain productive relationships with providers of leading network
technologies; the possibility of acquiring complementary businesses, products,
services and technologies; and the conditions of markets that impact our
business. Although we believe our plans, intentions and expectations reflected
in these forward-looking statements are reasonable, we can give no assurance
that these plans, intentions or expectations will be achieved. Actual results,
performance or achievements could differ materially from those contemplated,
expressed or implied by the forward-looking statements contained in this
prospectus. Important factors that could cause actual results to differ
materially from our forward-looking statements are set forth below under the
heading "Risk Factors," beginning on page 3 of this prospectus, under the
heading "Factors Affecting Operating Results" in the section captioned
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in our most recent Annual Report on Form 10-K and Quarterly Report
on Form 10-Q, and in other reports filed with the Securities and Exchange
Commission. These factors are not intended to represent a complete list of the
general or specific factors that may affect us. Other factors, including general
economic factors and business strategies, may have a significant effect on our
business, financial condition, and results of operations. You should not rely on
these forward-looking statements, which reflect our position as of the date of
this prospectus. We do not assume any obligation to revise forward-looking
statements.
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SUMMARY
This prospectus is part of a registration statement that we filed with
the Securities and Exchange Commission utilizing a "shelf" registration process.
Under this shelf process, we may, over the next two years, sell any combination
of securities described in this prospectus in one or more offerings, up to a
total dollar amount of $115,000,000. This prospectus provides you with a general
description of the securities we may offer. Each time we sell securities, we
will provide a prospectus supplement that will contain specific information
about the terms of that offering. The prospectus supplement may also add, update
or change information contained in this prospectus. You should read both this
prospectus and any prospectus supplement together with additional information
described below under the heading "Where You Can Find More Information."
INKTOMI CORPORATION
Inktomi Corporation is a leading provider of scalable network
infrastructure software. We develop, market, license and support a range of
network infrastructure applications that enhance the performance and
intelligence of large-scale networks for enterprises and network service
providers by enabling them to publish, distribute, manage and retrieve content
across wide area and local area networks. Our network infrastructure
applications are divided into two broad categories: Network Products, comprised
of industry leading solutions for network caching, content distribution, media
broadcasting and media publishing; and Search Solutions, which include general
Web search and related services, and enterprise search.
Based in Foster City, California, we were incorporated in California in
February 1996 and reincorporated in Delaware in February 1998. Our principal
offices are located at 4100 E. Third Avenue, Foster City, California 94404. Our
telephone number at this location is (650) 653-2800. Our World Wide Web site is
located at www.inktomi.com. Information contained on our web site does not
constitute part of this prospectus. In this report, "Inktomi," "our," "us," "we"
and similar expressions refer to Inktomi Corporation and its subsidiaries.
Inktomi, Traffic Server, Content Delivery Suite, Traffic Core, Traffic Edge,
Traffic Controller and the tri-colored cube logo are trademarks of Inktomi
Corporation in the United States and in other countries. All other trademarks or
trade names appearing herein are owned by their respective owners.
THE SECURITIES WE MAY OFFER
We may offer up to $115,000,000 of securities under this prospectus.
These securities may consist of our common stock, preferred stock, depositary
shares or warrants to purchase our common or preferred stock. A prospectus
supplement, which we will provide to you each time we offer securities, will
describe the specific amounts, prices and terms of these securities.
We may sell the securities to or through underwriters, dealers or
agents or directly to purchasers. We, as well as any agents acting on our
behalf, reserve the sole right to accept and to reject in whole or in part any
proposed purchase of securities. Each prospectus supplement will set forth the
names of any underwriters, dealers or agents involved in the sale of the
securities described in that prospectus supplement and any applicable fee,
commission or discount arrangements with them.
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COMMON STOCK
We may offer our common stock, par value $0.001 per share. Each holder
of common stock is entitled to one vote per share. The holders of our common
stock have no preemptive rights or cumulative voting rights. Common stockholders
are entitled to receive dividends declared by our board of directors out of
funds legally available for the payment of dividends, subject to rights, if any,
of preferred stockholders. We have never paid a cash dividend and do not
anticipate paying any cash dividends for the foreseeable future.
PREFERRED STOCK AND DEPOSITARY SHARES
We may issue preferred stock in one or more series and will determine
any dividend, voting, and conversion rights and other provisions at the time of
sale. We may also issue fractional shares of preferred stock that will be
represented by depositary shares and depositary receipts.
WARRANTS
We may issue warrants for the purchase of preferred stock or common
stock. We may issue warrants independently or together with other securities.
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RISK FACTORS
Before you invest in any of our securities, you should be aware of
various risks, including those described below. You should carefully consider
these risk factors, together with all of the other information included or
incorporated by reference in this prospectus and in the prospectus supplement,
before you decide whether to purchase any of our securities. The risks set out
below are not the only risks we face. Interested persons should carefully
consider the risks described below in evaluating our company and its business,
financial condition, and results of operations. Additional risks and
uncertainties not presently known to us, or that we currently consider to be
immaterial, may also impair our business and financial situation.
If any of the following risks occur, our business, financial condition
and results of operations could be materially adversely affected. In such case,
the trading price of our securities could decline, and you may lose all or part
of your investment.
OUR FUTURE GROWTH DEPENDS ON THE COMMERCIAL SUCCESS OF EACH OF OUR NETWORK
PRODUCTS AND OUR ABILITY TO LEVERAGE THESE TECHNOLOGIES TO DEVELOP AND INTRODUCE
NEW PRODUCTS FOR EMERGING MARKETS.
Our future growth substantially depends on the commercial success of
our Traffic Server network cache product, our Content Delivery Suite, our Media
Products, and our recently introduced content networking applications. The
markets for these products are in their early stages and we cannot be sure that
our target customers will widely adopt and deploy these technologies throughout
their networks. Demand for our products has fluctuated significantly over the
past several quarters as our core telecommunications and network service
provider customers and prospects have deferred and downsized purchases and as
the Content Delivery Network market has declined. We expect this business
environment to continue for the foreseeable future, and expect we will need to
continue to modify and enhance our products for multiple market segments
including in particular the enterprise market. In this connection, we recently
introduced a suite of content networking applications which includes Traffic
Core, Traffic Edge, Traffic Controller and Inktomi Media Publisher. We are
targeting these new products primarily towards network service providers and
large enterprise customers and we expect revenues from these products to be
modest over the next several quarters. We cannot be sure we will be successful
in our development efforts or that our products will gain market traction. Our
future success substantially depends on our ability to generate substantial and
sustained revenues from our existing Network Products and new content networking
products in each of our market segments and substantially increase the number of
new and repeat customer transactions.
DEMAND FOR OUR STREAMING MEDIA PRODUCTS IS DEPENDENT ON INCREASING AVAILABILITY
OF MEDIA CONTENT ON NETWORKS, THE BUILD OUT OF BROADBAND CAPABILITIES AND THE
ESTABLISHMENT OF PROFITABLE BUSINESS MODELS BY OUR CUSTOMERS, AMONG OTHER
FACTORS, ALL WHICH ARE OUTSIDE OF OUR CONTROL.
The streaming media market is in its early stages and sales of our
Media products to date have been modest and fluctuated from quarter to quarter.
The amount of appealing streaming content currently available is relatively
limited. The amount of streaming content available over public networks and
enterprise networks must increase substantially for our potential customers to
justify their purchase of our Media Products. Our Media Products are complex
which may limit their market acceptance and deployment. Growth in sales of our
Media Products in the service provider space depends on the increased
availability and usage of broadband access to the Internet. We cannot be sure
that broadband access to the Internet will grow fast enough or be utilized by
enough persons to create a sustainable marketplace for our Media Products. In
addition, successful business models for the delivery of streaming media content
must be developed in order for there to be
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sufficient demand for our Media Products in the service provider marketplace. As
we focus on the enterprise content networking market, enterprises building out
their content networks must realize the value of live and on-demand webcasts,
training seminars and other media applications in order for our Media Products
to be widely adopted. There can be no assurances that enterprises will adopt
streaming or on-demand media solutions for the operation of their business or
networks, or that our solutions will meet their requirements. Our Media products
rely in part on continued access to third party technology that enables them to
effectively recognize and stream media. Failure to maintain our current
arrangements to use these third party technologies could adversely affect the
appeal of our Media Products.
OUR BUSINESS WOULD BE HARMED IF CUSTOMERS CHOOSE NOT TO USE OR PROMOTE OUR WEB
SEARCH SERVICES.
Revenues from our Web search services result primarily from the number
of end-user searches processed by our Search Engine. Our agreements with
customers do not require them to direct end-users to our search services or to
use our search services exclusively or at all. Accordingly, revenues from search
services are highly dependent upon the willingness of customers to promote and
use the search services we provide, the ability of our customers to attract
end-users to their online services, the volume of end-user searches that are
processed by our Search Engine, and the ability of customers to monetize traffic
from their Web site search pages. Some of our customers have selected competing
search and directory services to operate in combination with our services, which
has reduced the number of queries available for us to serve and may erode future
revenue growth opportunities. The technological barriers for customers to
implement additional services or to replace our services are not substantial.
The market for Internet search is maturing and many smaller and medium size
portals are not profitable, suffer from declining revenue growth and have
limited access to capital to fund operational needs. Many of our smaller search
services customers have elected not to renew their contracts and our market
opportunity from portals has become more limited. As a result, our Web search
revenues are dependent on a relatively few number of major customers. In order
for us to increase revenues from our Search Engine business, we will need to
attract new customers, develop and deliver new search services, products and
features to existing and future customers, establish deeper strategic
relationships with our customers, and increase the adoption of our Index Connect
and Search Submit services for content publishers.
WE MAY BE UNABLE TO GROW SALES OF OUR ENTERPRISE SEARCH PRODUCTS.
The growth of our Portal Services revenue is dependent upon the growth
of sales of our search software products to enterprises. Such revenues are
derived from software license fees and fees derived from support and upgrades of
such software. A number of factors could cause sales of our enterprise search
products to slow or decline. We face intense competition from companies with
more experience in the marketplace and who offer a broad set of products and
services to our target customers. In addition, these companies have deeper
strategic relationships and have established well developed channels to sell and
distribute their products and services. We historically have sold our enterprise
search products primarily at the departmental level within large enterprises,
through a direct sales force. To expand our market opportunities, we will need
to enhance our product and service offerings, effectively market our products as
enterprise wide search and navigation solutions, and develop channel and
licensing programs to extend our reach.
THE MARKETS IN WHICH WE OPERATE ARE HIGHLY COMPETITIVE AND RAPIDLY CHANGING AND
WE MAY BE UNABLE TO COMPETE SUCCESSFULLY AGAINST NEW ENTRANTS AND ESTABLISHED
COMPANIES WITH GREATER RESOURCES.
We compete in markets that are new, intensely competitive, highly
fragmented and rapidly changing. We have experienced and expect to continue to
experience increased competition from current and potential
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competitors in each of our market segments, many of which are bringing new
solutions to market, establishing technology alliances and OEM relationships
with larger companies, and focusing on specific segments of our target markets.
In some cases, our competitors are implementing aggressive pricing and other
strategies that are focused in the short term on building customer bases, name
recognition in the market and capturing market share. This may cause some price
pressure on our products and services in the future.
We directly compete against multiple companies with our Network
Products, including Akamai, CacheFlow, Cisco Systems, InfoLibria, Microsoft,
Netscape, Network Appliance, Novell, RealNetworks and Volera. We are aware of
numerous other major software developers as well as smaller entrepreneurial
companies that are focusing significant resources on developing and marketing
products and services that will compete with our Network Products. We also
believe that we may face competition from other providers of competing solutions
to network infrastructure problems, including networking hardware and software
manufacturers, traditional hardware manufacturers, telecommunications providers,
cable TV/communications providers, software database companies, and large
diversified software and technology companies. Many of these companies provide
or have announced their intentions to provide a range of software and hardware
products based on Internet protocols and to compete in the broad
Internet/intranet software market as well as in specific market segments in
which we compete.
We compete with a number of companies to provide Internet search and
directory services and technology. In the Web services marketplace, our primary
competitors include a variety of established and newer companies, including
AltaVista, Ask Jeeves, FAST Search and Transfer, Google, Goto.com, LookSmart,
Netscape Open Directory, Northern Light, and Yahoo. These companies and other
competitors have focused on search result relevance, database size metrics and
ease of use to differentiate their services. In the search software market, our
primary competitors include AltaVista, Autonomy, Dataware, Excalibur, Fulcrum,
Lotus, Microsoft and Verity. We also indirectly compete in this market with
Oracle and other database vendors that offer information search and retrieval
capabilities with their core database products, and Web platform companies such
as Netscape. In addition, several large media and other Internet-based companies
have made investments in, or acquired, Internet search engine companies and may
seek to develop or customize their products and services to deliver to our
target customers.
Our competitors may be able to respond more quickly to new or emerging
technologies and changes in customer requirements than we can. In addition, our
current and potential competitors may bundle their products with other software
or hardware, including operating systems, browsers and network hardware in a
manner that may discourage users from purchasing products offered by us. Also,
current and potential competitors have or may have greater name recognition,
more extensive customer bases and access to proprietary content. Increased
competition could result in price reductions, fewer customer orders, fewer
search queries served, reduced gross margins and loss of market share.
THE NETWORK INFRASTRUCTURE MARKET IS RAPIDLY CHANGING AND WE MUST DEVELOP,
ACQUIRE, AND INTRODUCE NEW PRODUCTS AND TECHNOLOGIES TO GROW OUR REVENUES AND
REMAIN COMPETITIVE.
The network infrastructure market is characterized by rapid
technological change, frequent new product introductions, changes in customer
requirements and evolving industry standards. The introduction of products
embodying new technologies and the emergence of new industry standards could
render our existing products obsolete. Our future success and revenue growth
will depend upon our ability to develop, acquire and introduce a variety of new
products and product enhancements to address the increasingly sophisticated
needs of our customers, particularly in the content networking, wireless, and
enterprise markets. We have experienced delays in releasing new products and
product enhancements and may experience similar delays in
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the future. Material delays in introducing new products and enhancements may
cause customers to forego purchases of our products or to purchase those of our
competitors.
OUR QUARTERLY OPERATING RESULTS MAY FLUCTUATE SIGNIFICANTLY, AND THESE
FLUCTUATIONS MAY CAUSE OUR STOCK PRICE TO FALL.
We expect that a significant portion of our future revenues will come
from our Network Products. We further expect that these revenues will come from
licenses to a relatively small number of customers. The volume and timing of
orders are difficult to predict because the markets for our Network Products are
in their early stages and the sales cycle varies substantially from customer to
customer. In addition, many customers in our target markets are scrutinizing
their capital spending budgets in light of the slowing economy, and other
customers have limited access to capital to fund operational needs. These
companies are shifting their buying patterns as a result, taking a more cautious
and measured approach to their network build-out plans. Historically, customer
orders during a quarter have consisted of a small number of multi-million dollar
deals and several other smaller orders ranging from $0.1 million to $0.5
million. The cancellation, deferral or reduction of even a small number of
licenses of any of our Network Products would reduce our expected revenues,
which would adversely affect our quarterly financial performance. To the extent
significant sales occur earlier than expected, operating results for later
quarters may not compare favorably with operating results from earlier quarters.
Our operating expenses are largely based on anticipated revenue trends
and a high percentage of our expenses are fixed in the short term. Despite our
recent workforce reduction, we expect to continue to make significant
investments to develop and market products for the enterprise, wireless and
content networking markets, broaden our customer support capabilities, develop
new distribution channels, and fund greater levels of research and development.
A delay in generating or recognizing revenue for the reasons already discussed
or for any other reason could cause significant variations in our operating
results from quarter-to-quarter and could result in substantial operating
losses.
Due to these factors, we believe that quarter-to-quarter comparisons of
our operating results are not a good indication of our future performance. It is
likely that in some future quarter, our operating results may be below the
expectations of public market analysts or investors, and the price of our Common
Stock may fall.
OUR FUTURE REVENUE GROWTH DEPENDS ON OUR ABILITY TO IMPROVE THE EFFECTIVENESS
AND BREADTH OF OUR SALES, DISTRIBUTION AND SUPPORT ORGANIZATIONS.
We will need to improve the effectiveness and breadth of our direct and
indirect sales operations, both domestically and internationally, in order to
increase market awareness and sales of our products. Our products and services
require sophisticated sales efforts targeted at several people within our
prospective customers' organizations. Competition for qualified sales personnel
is intense, and we might not be able to hire the kind and number of sales
personnel we are targeting. In addition, we will need to effectively train and
educate our sales force if we are to be successful in selling into the
enterprise market.
Our future revenue growth is dependent upon establishing and
maintaining productive relationships with a variety of distribution partners,
including OEMs, resellers, systems integrators and joint marketing partners. We
seek to sign up distribution partners that have a substantial amount of
technical and marketing expertise. Even with this expertise, our distribution
partners generally require a significant amount of training and support from us,
and we anticipate that it will take the next few quarters before our
distribution partners will develop the expertise and skills necessary to
effectively sell our products. We may be adversely affected
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if our distribution partners fail to ship products in a timely manner or
according to agreed upon schedules. In recent quarters we have focused our
efforts on entering into OEM relationships with prominent network hardware
providers. Several risks arise in connection with these relationships including
conflicts with our other sales channels, unpredictable product support
obligations and reliance on such third parties for sales results.
Similarly, the complexity of our products and the difficulty of
installing them require highly trained customer service and support personnel.
We currently have a relatively small customer service and support organization
and will need to continue to train our staff to support new customers, new
product lines, the expanding needs of existing customers and the
internationalization of our business. Competition for customer service and
support personnel is intense in our industry due to the limited number of people
available with the necessary technical skills and understanding of the relevant
industries including the Internet, telecommunications and commerce.
THE LOSS OF A KEY CUSTOMER COULD ADVERSELY AFFECT OUR REVENUES AND BE PERCEIVED
AS A LOSS OF MOMENTUM IN OUR BUSINESS.
We have generated a substantial portion of our historical revenues from
a limited number of customers. We expect that a small number of customers will
continue to account for a substantial portion of revenues for the foreseeable
future. As a result, if we lose a major customer for any reason, including
non-renewal of a customer contract or a failure to meet performance
requirements, or in the case of our Search Engine business if there is a decline
in usage of any customer's search service, our revenues would be adversely
affected. Our potential customers and public market analysts or investors may
perceive any such loss as a loss of momentum in our business, which may
adversely affect future opportunities to sell our products and services and
cause our stock price to decline. We cannot be sure that customers that have
accounted for significant revenues in past periods, individually or as a group,
will continue to generate revenues in any future period.
IF WE ARE UNABLE TO MAINTAIN OUR RELATIONSHIPS WITH CUSTOMERS AND THE COMPANIES
THAT SUPPLY AND DISTRIBUTE OUR PRODUCTS, WE MAY HAVE DIFFICULTY SELLING OUR
PRODUCTS AND SERVICES.
We believe that our success in penetrating our target markets depends
in part on our ability to develop and maintain strategic relationships with key
hardware and software vendors, Internet technology and service providers,
distribution partners and customers. We believe these relationships are
important in order to validate our technology, facilitate broad market
acceptance of our products, enhance our product and service offering, and expand
our sales, marketing and distribution capabilities. If we are unable to develop
these key relationships or maintain and enhance existing relationships,
particularly in the areas of streaming audio and video, our Traffic Server
product and our new products for the content networking market, we may have
difficulty selling our products and services.
We have from time to time licensed components from others such as
reporting functions and security features and incorporated them into our
products and services. If these licensed components are not maintained, it could
impair the functionality of our products and services and require us to obtain
alternative products from other sources or to develop this software internally.
In either case, this could involve costs and delays as well as diversion of
engineering resources.
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THE GLOBAL WIRELESS INTERNET SPACE IS A NEW MARKET, AND WE CANNOT BE CERTAIN
THAT OUR ENTRY INTO THIS MARKET WILL BE SUCCESSFUL.
We have been engaged in significant research and development for
developing technology for the wireless marketplace. Our current product is
focused on accelerating data delivery across wireless networks. The market for
new wireless products and services is in an early stage of development and is
rapidly evolving. The current market for wireless products and services is in
flux both nationally and internationally. Our target customers, the wireless
service providers, are deferring and delaying the introduction of new services
and products which is likely to slow revenue generation from our wireless
product. In addition, we have limited experience in the wireless market and
cannot be certain that the market will develop in such a manner as to provide us
with substantial revenue-generating opportunities. Several companies are
developing products and services targeted to the wireless space, many of which
are ahead of us in development and implementation. We expect competition to be
intense. To facilitate our entry into the wireless space, we will need to modify
our products and services, establish and manage strategic alliances with a
variety of companies including wireless operators, content providers, hardware
manufacturers and integrated service vendors, and hire new management, technical
sales and other personnel. We cannot be certain that our entry into the wireless
space will be successful.
THE LEGAL ENVIRONMENT IN WHICH WE OPERATE IS UNCERTAIN AND CLAIMS AGAINST US
COULD CAUSE OUR BUSINESS TO SUFFER.
Our products and services operate in part by making copies of material
available on the Internet and other networks and making this material available
to end-users from a central location or local systems. In addition, our Portal
Services technology systems collect end-user information, which we use to
deliver services to our customers and our customers use to deliver services to
their users. This creates the potential for claims to be made against us (either
directly or through contractual indemnification provisions with customers) for
defamation, negligence, copyright or trademark infringement, personal injury,
invasion of privacy or under other legal theories based on the nature, content,
copying, dissemination, collection or use of these materials. These claims have
been threatened against us from time to time and have been brought, and
sometimes successfully pressed, against online service providers. It is also
possible that if any information provided through any of our Portal Services or
facilitated by our Network Products contains errors, third parties could make
claims against us for losses incurred in reliance on this information. Although
we carry general liability insurance, our insurance may not cover potential
claims of this type or be adequate to protect us from all liability that may be
imposed.
INTERNET-RELATED LAWS COULD ADVERSELY AFFECT OUR BUSINESS.
Laws and regulations that apply to communications and commerce over the
Internet are becoming more prevalent. The United States Congress has enacted
Internet laws regarding children's privacy, copyrights, taxation and the
transmission of sexually explicit material. The European Union has enacted its
own privacy regulations as well as legislation governing e-commerce, copyrights
and caching. The law of the Internet, however, remains largely unsettled, even
in areas where there has been some legislative action. It may take years to
determine whether and how existing laws such as those governing intellectual
property, privacy, libel and taxation apply to the Internet. In addition, the
growth and development of the market for online commerce may prompt calls for
more stringent consumer protection laws, both in the United States and abroad,
that may impose additional burdens on companies conducting business online. The
adoption, implementation or modification of laws and regulations relating to the
Internet, or interpretations of existing law, could adversely affect our
business.
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WE HAVE CONTINUING OBLIGATIONS RELATED TO OUR RECENTLY DIVESTED COMMERCE
DIVISION THAT MAY ADVERSELY AFFECT OUR FUTURE FINANCIAL RESULTS.
In connection with the sale of our Commerce Division in March 2001, we
assigned certain contracts to the acquirer, e-centives, Inc. Should a claim
originate out of one these assigned contracts for a matter arising prior to the
assignment, we may be obligated to indemnify e-centives for such claim. Such
indemnification would involve expending management and financial resources to
resolve the claim. In addition, certain customer contracts related to the
Commerce Division were not assigned to e-centives. We are still obligated to
provide the products and services to the customers under these contracts. We
expect to expend financial and management resources to either fulfill or
eliminate the obligations under these contracts. We also may incur unforeseen
expenses as we continue to separate out and transition certain information
technology infrastructure, sales and support methods and contract management
functions.
ANY ACQUISITIONS WE MAKE COULD ADVERSELY AFFECT OUR OPERATIONS OR FINANCIAL
RESULTS.
We have purchased six companies since September 1998 and may invest in
or acquire complementary companies, products and technologies in the future. If
we buy a company, we could have difficulty in assimilating that company's
personnel and operations and maintaining acceptable standards, controls,
procedures and policies. In addition, the key personnel of the acquired company
may decide not to work for us. Also, we could have difficulty in integrating the
acquired technology or products into our operations. There could be potential
unknown liabilities associated with the purchased company. These difficulties
could disrupt our ongoing business, distract our management and employees and
increase our expenses. Furthermore, we may have to incur debt or issue equity
securities to pay for any future acquisitions, the issuance of which could be
dilutive to our stockholders.
WE MAY NOT BE ABLE TO RECRUIT AND RETAIN THE PERSONNEL WE NEED TO SUCCEED.
Our primary asset is the intellectual capabilities of our employees. We
are therefore dependent on recruiting and retaining a strong team of personnel
across all functional areas. Competition for these individuals is intense, and
we may not be able to attract or retain the highly qualified personnel necessary
for our success. Our employment relationships are generally at-will. We have had
key employees leave us in the past and we can make no assurance that one or more
will not leave us in the future. If any of our key employees were to leave us,
we could face substantial difficulty in hiring qualified successors and could
experience a loss in productivity while any such successor obtains the necessary
training and experience. Many of our key employees have reached or will soon
reach the four-year anniversary of their hiring date and will be fully vested in
their initial stock option grants. While our key employees are typically granted
additional stock options to provide additional incentive to remain with us, the
initial option grant is typically the largest and an employee may be more likely
to leave us upon completion of the vesting period for the initial option grant.
In light of current market conditions, we may undertake programs to retain our
employees that may be viewed as dilutive to our shareholders. We do not have key
person life insurance policies covering any of our employees other than our
Chief Executive Officer.
OUR EFFORTS TO INCREASE OUR PRESENCE IN MARKETS OUTSIDE OF THE UNITED STATES MAY
BE UNSUCCESSFUL AND COULD RESULT IN LOSSES.
We market and sell our products in the United States and
internationally, principally Europe and Asia. Historically, the percentage of
sales to customers located outside of the United States has varied
substantially, reflecting the early stage build-out of our international
operations. We have limited experience in developing
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localized versions of our products and marketing and distributing our products
internationally. In addition, other inherent risks may apply to international
markets and operations, including:
- the impact of recessions in economies outside the United States;
- greater difficulty in accounts receivable collection and longer
collection periods;
- unexpected changes in regulatory requirements;
- difficulties and costs of staffing and managing foreign
operations;
- potentially adverse tax consequences; and
- political and economic instability.
We also have limited experience operating in foreign countries and
managing multiple offices with facilities and personnel in disparate locations.
We may not be able to manage our resources effectively, coordinate our efforts,
supervise and train our personnel or otherwise successfully manage our
resources. The laws and cultural requirements in foreign countries can vary
significantly from those in the United States. The inability to integrate our
business in these jurisdictions and to address cultural differences may
adversely affect the success of our international operations.
INTELLECTUAL PROPERTY CLAIMS AGAINST US COULD CAUSE OUR BUSINESS TO SUFFER.
Substantial litigation regarding intellectual property rights exists in
the software industry. We expect that software products may be increasingly
vulnerable to third party infringement claims as the number of competitors in
our industry segments grows, the functionality of products in different industry
segments overlaps, and more business method patents are submitted to and issued
by patent authorities. We believe that many companies have filed or intend to
file patent applications covering aspects of their technology that they may
claim our technology infringes. Some of these companies have sent copies of
their patents to us for informational purposes. We cannot be sure that these
parties will not make a claim of infringement against us with respect to our
products and technology. Any claims, with or without merit, could be time
consuming to defend, result in costly litigation, divert management's attention
and resources, and could cause product shipment delays or require us to
reengineer our products or enter into royalty or licensing agreements.
Reengineering a particular product, however, may not be possible or practical.
Similarly, these royalty or licensing agreements, if required, may not be
available on acceptable terms, if at all.
ANTI-TAKEOVER PROVISIONS CONTAINED IN OUR CHARTER AND UNDER DELAWARE LAW COULD
IMPAIR A TAKEOVER ATTEMPT.
We are subject to the provisions of Section 203 of the Delaware General
Corporation Law prohibiting, under some circumstances, publicly held Delaware
corporations from engaging in business combinations with some stockholders for a
specified period of time without the approval of the holders of substantially
all of our outstanding voting stock. Such provisions could delay or impede the
removal of incumbent directors and could make more difficult a merger, tender
offer or proxy contest involving us, even if such events could be beneficial, in
the short term, to the interests of the stockholders. In addition, such
provisions could limit the price that some investors might be willing to pay in
the future for shares of our Common Stock. These provisions, in addition to
provisions contained in our charter, may have the effect of deterring hostile
takeovers or delaying changes in our control or management.
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OUR STOCK PRICE IS VOLATILE.
The market price of our Common Stock has been and may continue to be
subject to wide fluctuations. Our stock price may fluctuate in response to a
number of events and factors, such as quarterly variations in operating results,
announcements of technological innovations or new products and media properties
by us or our competitors, announcements of technological alliances and
partnerships, changes in financial estimates and recommendations by securities
analysts, the operating and stock price performance of other companies that
investors may deem comparable, and news reports relating to trends in our
markets. In addition, the stock market in general, and the market prices for
Internet-related companies in particular, have experienced extreme volatility
that often has been unrelated to the operating performance of such companies.
These broad market and industry fluctuations may adversely affect the price of
our stock, regardless of our operating performance. In the past, companies that
have experienced volatility in the market price of their stock have been the
subjects of securities class action litigation. If we were the subject of
securities class action litigation, it could result in substantial costs and a
diversion of management's attention and resources.
USE OF PROCEEDS
Unless otherwise indicated in the prospectus supplement, the net
proceeds from the sale of securities offered by this prospectus will be used for
general corporate purposes, including capital expenditures and to meet working
capital needs. We expect from time to time to evaluate the acquisition of
businesses, products and technologies for which a portion of the net proceeds
may be used. Pending such uses, we will invest the net proceeds in
interest-bearing securities.
RATIO OF EARNINGS TO COVER FIXED CHARGES AND PREFERRED DIVIDENDS
As we have incurred losses in each of the periods presented below, we
had insufficient earnings to cover fixed charges and preferred dividends, if
any, by the following amounts:
NINE MONTHS
FISCAL YEAR ENDED SEPTEMBER 30, ENDED
--------------------------------- JUNE 30,
1998 1999 2000 2001
------- ------- ------- -----------
$29,915 $33,028 $23,814 $250,663
Please refer to Exhibit 12.1 filed with this prospectus for additional
information regarding the ratio of earnings to cover fixed charges and preferred
dividends, if any.
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DESCRIPTION OF COMMON STOCK
Our certificate of incorporation authorizes us to issue up to
1,500,000,000 shares of common stock, $0.001 par value. As of August 1, 2001,
there were approximately 129,060,741 shares of our common stock issued and
outstanding.
The holders of shares of our common stock are entitled to one vote per
share on all matters to be voted on by stockholders. Each holder of common stock
is entitled to one vote per share. Upon any liquidation, dissolution or winding
up of our business, the holders of common stock are entitled to share equally in
all assets available for distribution after payment of all liabilities and
provision for liquidation preference of shares of preferred stock then
outstanding. The holders of common stock have no preemptive rights and no rights
to convert their common stock into any other securities. There are also no
redemption or sinking fund provisions applicable to our common stock. All
outstanding shares of common stock are fully paid and nonassessable. Holders of
common stock are entitled to receive dividends declared by the Board of
Directors, out of funds legally available for the payment of dividends, subject
to the rights of holders of any then-outstanding shares of preferred stock. We
have never paid a cash dividend, however, and do not anticipate paying cash
dividends for the foreseeable future.
The transfer agent and registrar for our common stock is Wells Fargo
Bank Minnesota.
ANTI-TAKEOVER EFFECTS OF DELAWARE LAW
We are subject to the provisions of Section 203 of the Delaware General
Corporation Law, which, subject to certain exceptions, prohibits a Delaware
corporation from engaging in any business combination with any interested
stockholder for a period of three years following the time that such stockholder
became an interested stockholder, unless:
(1) prior to such time, the board of directors of the corporation
approved either the business combination or the transaction
that resulted in the stockholder's becoming an interested
stockholder,
(2) upon consummation of the transaction that resulted in the
stockholder's becoming an interested stockholder, the
interested stockholder owned at least 85% of the voting stock
of the corporation outstanding at the time the transaction
commenced, excluding for purposes of determining the number of
shares outstanding those shares owned:
- by persons who are directors and also officers, and
- by 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 the stockholders, and not by written
consent, by the affirmative vote of at least 66 2/3% of the
outstanding voting stock that is not owned by the interested
stockholder.
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Section 203 defines "business combination" to include:
(1) any merger or consolidation involving the corporation and the
interested stockholder,
(2) any sale, transfer, pledge or other disposition of 10% or more
of the assets of the corporation involving the interested
stockholder,
(3) subject to certain exceptions, any transaction that results in
the issuance or transfer by the corporation of any stock of
the corporation to the interested stockholder,
(4) any transaction involving the corporation that has the effect
of increasing the proportionate share of the stock of any
class or series of the corporation beneficially owned by the
interested stockholder, or
(5) the receipt by the interested stockholder of the benefit of
any loans, advances, guarantees, pledges or other financial
benefits provided by or through the corporation.
In general, Section 203 defines an "interested stockholder" as any
entity or person who or which beneficially owns (or within three years did own)
15% or more of the outstanding voting stock of the corporation and any entity or
person affiliated with or controlling or controlled by such entity or person.
The existence of this provision would be expected to have an
anti-takeover effect with respect to transactions not approved in advance by our
board of directors, including discouraging attempts that might result in a
premium over the market price for the shares of common stock held by
stockholders.
DESCRIPTION OF SHARE PURCHASE RIGHTS PLAN
On June 30, 2000, our board of directors adopted a share purchase
rights plan, commonly known as a "poison pill." Pursuant to our rights plan, our
board of directors declared a dividend of one right to purchase one
one-thousandth share of our series A participating preferred stock for each
outstanding share of common stock. The rights are triggered and become
exercisable upon the acquisition of or offer to acquire at least 15% of our
common stock then outstanding. The rights plan is designed to protect and
maximize the value of the outstanding equity interests in Inktomi in the event
of an unsolicited attempt by an acquirer to take over Inktomi in a manner or on
terms not approved by our board of directors. Takeover attempts frequently
include coercive tactics to deprive the board of directors and its stockholders
of any real opportunity to determine the destiny of the company. The rights plan
has been declared by our board of directors in order to deter such tactics,
including a gradual accumulation of shares in the open market of 15% or greater
position to be followed by a merger or a partial or two-tier tender offer that
does not treat all stockholders equally. These tactics unfairly pressure
stockholders, squeeze them out of their investment without giving them any real
choice and deprive them of the full value of their shares. The rights plan is
not intended to, and will not, prevent our takeover.
Our Form 8-A, filed on August 11, 2000 and incorporated in this
prospectus by reference, contains a more detailed summary of the principal terms
of the rights plan.
DESCRIPTION OF PREFERRED STOCK
Our certificate of incorporation authorizes us to issue up to
10,000,000 shares of preferred stock in one or more series. As of August 1,
2001, we did not have any outstanding shares of preferred stock or
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options to purchase preferred stock (other than the rights to purchase shares of
our series A participating preferred stock which were granted in connection with
the share purchase rights plan described above). Our board of directors,
however, has the authority, without stockholder consent, subject to certain
limitations imposed by law or our bylaws, to issue one or more series of
preferred stock at any time. The rights, preferences and restrictions of the
preferred stock of each series will be fixed by the certificate of designations
relating to each series. In connection with the adoption of the rights plan, we
filed a certificate of designation that designated 310,000 shares of our
authorized preferred stock as series A participating preferred stock. A
prospectus supplement relating to each such series will specify the terms of the
preferred stock as determined by our board of directors, including the
following:
- the number of shares in any series,
- the designation for any series by number, letter or title that
shall distinguish the series from any other series of preferred
stock,
- the dividend rate and whether dividends on that series of
preferred stock will be cumulative, noncumulative or partially
cumulative,
- the voting rights of that series of preferred stock, if any,
- the conversion provisions applicable to that series of preferred
stock,
- the redemption or sinking fund provisions applicable to that
series of preferred stock, if any,
- the liquidation preference per share of that series of preferred
stock, if any, and
- the terms of any other preferences or rights, if any, applicable
to that series of preferred stock.
We will describe the specific terms of a particular series of preferred
stock in the prospectus supplement relating to that series. In the event we
issue shares of preferred stock, however, you should refer to the applicable
certificate of designation that we will file with the Delaware Secretary of
State and the Securities and Exchange Commission for a more complete description
of the rights, privileges, and preferences of the security. The prospectus
supplement may also contain a description of any material U.S. federal income
tax consequences relating to the preferred stock.
Although it has no present intention to do so, our board of directors,
without stockholder approval, may issue preferred stock with voting and
conversion rights that could adversely affect the voting power of the holders of
common stock. If we issue preferred stock, it may have the effect of delaying,
deferring or preventing a change of control.
Our share purchase rights plan, described above, as well as certain
provisions of our restated certificate of incorporation and bylaws, may have the
effect of preventing, discouraging or delaying any change in control. The
authorization of undesignated preferred stock makes it possible for our board of
directors to issue preferred stock with voting or other rights or preferences
that could impede the success of any attempt to obtain control of us. There are
also a substantial number of authorized but unissued shares of our common stock
that could be issued for similar purposes.
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DESCRIPTION OF THE DEPOSITARY SHARES
At our option, we may elect to offer fractional shares of preferred
stock, rather than full shares of preferred stock. If we do, we will issue to
the public receipts for depositary shares and each of these depositary shares
will represent a fraction of a share of a particular series of preferred stock,
as specified in the applicable prospectus supplement. Each owner of a depositary
share will be entitled, in proportion to the applicable fractional interest in
shares of preferred stock underlying that depositary share, to all rights and
preferences of the preferred stock underlying that depositary share. These
rights may include dividend, voting, redemption and liquidation rights.
The shares of preferred stock underlying the depositary shares will be
deposited with a bank or trust company selected by us to act as depositary,
under a deposit agreement between us, the depositary and the holders of the
depositary receipts. The depositary will be the transfer agent, registrar and
dividend disbursing agent for the depositary shares.
The depositary shares will be evidenced by depositary receipts issued
pursuant to the depositary agreement. Holders of depositary receipts will agree
to be bound by the deposit agreement, which requires holders to take certain
actions such as filing proof of residence and paying certain charges.
If we issue any depository shares, for a more complete description of
their terms, you should refer to the forms of the deposit agreement, our
certificate of incorporation and the certificate of amendment for the applicable
series of preferred stock that are, or will be, filed with the Securities and
Exchange Commission.
DIVIDENDS
The depositary will distribute all cash dividends or other cash
distributions received in respect of the series of preferred stock underlying
the depositary shares to the record holders of depositary receipts in proportion
to the number of depositary shares owned by those holders on the relevant record
date, which will be the same date as the record date for the preferred stock.
In the event of a distribution other than in cash, the depositary will
distribute property received by it to the record holders of depositary receipts
that are entitled to receive the distribution, unless the depositary determines
that it is not feasible to make the distribution. If this occurs, the
depositary, with our approval, may adopt another method for the distribution,
including selling the property and distributing the net proceeds to the holders.
LIQUIDATION PREFERENCE
If a series of preferred stock underlying the depositary shares has a
liquidation preference, in the event of the voluntary or involuntary
liquidation, dissolution or winding up of Inktomi, holders of depositary shares
will be entitled to receive the fraction of the liquidation preference accorded
each share of the applicable series of preferred stock, as set forth in the
applicable prospectus supplement.
REDEMPTION
If a series of preferred stock underlying the depositary shares is
subject to redemption, the depositary shares will be redeemed from the proceeds
received by the depositary resulting from the redemption, in whole or in part,
of the preferred stock held by the depositary. If we redeem any preferred stock
held by the depositary, the depositary will redeem, as of the same redemption
date, the number of depositary shares
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representing the preferred stock so redeemed. The depositary will mail the
notice of redemption to the record holders of the depositary receipts promptly
upon receiving the notice from us and fewer than 20 or more than 60 days, unless
otherwise provided in the applicable prospectus supplement, prior to the date
fixed for redemption of the preferred stock.
VOTING
Upon receipt of notice of any meeting at which the holders of preferred
stock are entitled to vote, the depositary will mail the information contained
in the notice of meeting to the record holders of the depositary receipts
underlying the preferred stock. Each record holder of those depositary receipts
on the record date will be entitled to instruct the depositary as to the
exercise of the voting rights pertaining to the amount of preferred stock
underlying that holder's depositary shares. The record date for the depositary
will be the same date as the record date for the preferred stock. The depositary
will try, as far as practicable, to vote the preferred stock underlying the
depositary shares in accordance with such instructions, and we will agree to
take all action which may be deemed necessary by the depositary in order to
enable the depositary to do so. The depositary will not vote the preferred stock
to the extent that it does not receive specific instructions from the holders of
depositary receipts.
WITHDRAWAL OF PREFERRED STOCK
Owners of depositary shares are entitled, upon surrender of depositary
receipts at the principal office of the depositary and payment of any unpaid
amount due to the depositary, to receive the number of whole shares of preferred
stock underlying the depositary shares. Partial shares of preferred stock will
not be issued. Holders of preferred stock will not be entitled to deposit the
shares under the deposit agreement or to receive depositary receipts evidencing
depositary shares for the preferred stock.
AMENDMENT AND TERMINATION OF DEPOSIT AGREEMENT
The form of depositary receipt evidencing the depositary shares and any
provision of the deposit agreement may be amended at any time and from time to
time by agreement between us and the depositary. However, any amendment which
materially and adversely alters the rights of the holders of depositary shares,
other than fee changes, will not be effective unless the amendment has been
approved by at least a majority of the depositary shares then outstanding. The
deposit agreement may be terminated by the depositary or us only if:
- all outstanding depositary shares have been redeemed, or
- there has been a final distribution of the preferred stock in
connection with our dissolution and such distribution has been
made to all the holders of depositary shares.
CHARGES OF DEPOSITARY
We will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangement. We will also
pay charges of the depositary in connection with the initial deposit of the
preferred stock, the initial issuance of the depositary shares, any redemption
of the preferred stock, and all withdrawals of preferred stock by owners of
depositary shares. Holders of depositary receipts will pay transfer, income and
other taxes and governmental charges and other specified charges as provided in
the deposit agreement for their accounts. The depositary may refuse to transfer
depositary shares, withhold
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dividends and distributions and sell the depositary shares evidenced by the
depositary receipt if the charges have not been paid.
MISCELLANEOUS
The depositary will forward to the holders of depositary receipts all
reports and communications we deliver to the depositary that we are required to
furnish to the holders of the preferred stock. In addition, the depositary will
make available for inspection by holders of depositary receipts at the principal
office of the depositary, and at such other places as it may from time to time
deem advisable, any reports and communications we deliver to the depositary as
the holder of preferred stock.
Neither the depositary nor Inktomi will be liable if either of the
depositary or Inktomi is prevented or delayed by law or any circumstance beyond
our control in performing our respective obligations under the deposit
agreement. Our obligations and the depositary's obligations will be limited to
the performance in good faith of our respective duties under the deposit
agreement. Neither the depositary nor Inktomi will be obligated to prosecute or
defend any legal proceeding in respect of any depositary shares or preferred
stock unless satisfactory indemnity is furnished. Inktomi and the depositary may
rely on written advice of counsel or accountants, on information provided by
holders of depositary receipts or other persons believed in good faith to be
competent to give such information, and on documents believed to be genuine and
to have been signed or presented by the proper party or parties.
RESIGNATION AND REMOVAL OF DEPOSITARY
The depositary may resign at any time by delivering a notice to us of
its election to do so. We may remove the depositary at any time. Any such
resignation or removal will take effect upon the appointment of a successor
depositary and its acceptance of such appointment. The successor depositary must
be appointed within 60 days after delivery of the notice for resignation or
removal and must be a bank and trust company having its principal office in the
United States of America and having a combined capital and surplus of at least
$150,000,000.
FEDERAL INCOME TAX CONSEQUENCES
Owners of the depositary shares will be treated for Federal income tax
purposes as if they were owners of the preferred stock underlying the depositary
shares. As a result, owners will be entitled to take into account for Federal
income tax purposes and deductions to which they would be entitled if they were
holders of such preferred stock. No gain or loss will be recognized for Federal
income tax purposes upon the withdrawal of preferred stock in exchange for
depositary shares. The tax basis of each share of preferred stock to an
exchanging owner of depositary shares will, upon such exchange, be the same as
the aggregate tax basis of the depositary shares exchanged. The holding period
for preferred stock in the hands of an exchanging owner of depositary shares
will include the period during which such person owned such depositary shares.
DESCRIPTION OF THE WARRANTS
We may issue warrants for the purchase of preferred stock or common
stock. Warrants may be issued independently or together with preferred stock or
common stock and may be attached to or separate from any offered securities.
Each series of warrants will be issued under a separate warrant agreement to be
entered into between us and a bank or trust company, as warrant agent. The
warrant agent will act solely as our agent
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in connection with the warrants and will not have any obligation or relationship
of agency or trust for or with any holders or beneficial owners of warrants.
This summary of certain provisions of the warrants is not complete. For the
complete terms of a particular series of warrants, you should refer to the
prospectus supplement for that series of warrants.
The prospectus supplement relating to a particular series of warrants
to purchase our common stock or preferred stock will describe the terms of the
warrants, including the following:
- the title of the warrants,
- the offering price for the warrants, if any,
- the aggregate number of the warrants,
- the designation and terms of the common stock or preferred stock
that may be purchased upon exercise of the warrants,
- if applicable, the designation and terms of the securities with
which the warrants are issued and the number of warrants issued
with each security,
- if applicable, the date from and after which the warrants and any
securities issued with the warrants will be separately
transferable,
- the number of shares of common stock or preferred stock that may
be purchased upon exercise of a warrant and the price at which
such shares may be purchased upon exercise,
- the dates on which the right to exercise the warrants shall
commence and expire,
- if applicable, the minimum or maximum amount of the warrants that
may be exercised at any one time,
- the currency or currency units in which the offering price, if
any, and the exercise price are payable,
- if applicable, a discussion of material United States Federal
income tax considerations,
- the antidilution provisions of the warrants, if any,
- the redemption or call provisions, if any, applicable to the
warrants, and
- any additional terms of the warrants, including terms, procedures,
and limitations relating to the exchange, exercise and settlement
of the warrants.
Holders of equity warrants will not be entitled, by virtue of being
such holders, to vote, consent, receive dividends, receive notice as
stockholders with respect to any meeting of stockholders for the election of our
directors or any other matter, or to exercise any rights whatsoever as our
stockholders.
The exercise price payable and the number of shares of common stock or
preferred stock purchasable upon exercise of each equity warrant will be subject
to adjustment in certain events, including the issuance of
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a stock dividend to holders of common stock or preferred stock or a stock split,
reverse stock split, combination, subdivision or reclassification of common
stock or preferred stock.
PLAN OF DISTRIBUTION
We may sell the securities:
- through one or more underwriters or dealers,
- directly to purchasers,
- through agents, or
- through a combination of any of these methods of sale.
We may distribute the securities:
- from time to time in one or more transactions at a fixed price or
prices, which may be changed from time to time,
- at market prices prevailing at the times of sale,
- at prices related to such prevailing market prices, or
- at negotiated prices.
We will describe the method of distribution of each series of
securities in the applicable prospectus supplement.
We may determine the price or other terms of the securities offered
under this prospectus by use of an electronic auction. We will describe how any
auction will determine the price or any other terms, how potential investors may
participate in the auction and the nature of the obligations of the underwriter,
dealer or agent in the applicable prospectus supplement.
Underwriters, dealers or agents may receive compensation in the form of
discounts, concessions or commissions from us or our purchasers (as their agents
in connection with the sale of securities). These underwriters, dealers or
agents may be considered to be underwriters under the Securities Act. As a
result, discounts, commissions, or profits on resale received by the
underwriters, dealers or agents may be treated as underwriting discounts and
commissions. Each prospectus supplement will identify any such underwriter,
dealer or agent, and describe any compensation received by them from us. Any
initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time.
Underwriters, dealers and agents may be entitled to indemnification by
us against certain civil liabilities, including liabilities under the Securities
Act, or to contribution with respect to payments made by the underwriters,
dealers or agents, under agreements between us and the underwriters, dealers and
agents.
We may grant underwriters who participate in the distribution of
securities an option to purchase additional securities to cover over-allotments,
if any, in connection with the distribution.
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Some securities which we may issue under this prospectus may be new
issues of securities with no established trading market. Underwriters involved
in the public offering and sale of these series of securities may make a market
in the securities. However, they are not obligated to make a market and may
discontinue market making activity at any time. No assurance can be given as to
the liquidity of the trading market for any securities.
Underwriters or agents and their associates may be customers of, engage
in transactions with or perform services for us in the ordinary course of
business.
LEGAL MATTERS
Wilson Sonsini Goodrich & Rosati, Professional Corporation, Palo Alto,
California, will pass upon the validity of the issuance of the securities
offered by this prospectus.
INDEPENDENT ACCOUNTANTS
The financial statements as of September 30, 2000 and 1999 and for each
of the three years in the period ended September 30, 2000 incorporated in this
prospectus by reference to the Current Report on Form 8-K dated August 16, 2001
of Inktomi, have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
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WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the
Securities and Exchange Commission, in accordance with the Securities Exchange
Act of 1934.
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 7 World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison Street
Washington, D.C. 20549 New York, New York 10048 Suite 1400
1-800-SEC-0330 Chicago, Illinois 60661-2511
Please call the Commission at 1-800-SEC-0330 for further information
about the public reference rooms. Our reports, proxy statements and other
information filed with the Commission are available to the public over the
Internet at the Commission's World Wide Web site at http://www.sec.gov.
The Commission allows us to "incorporate by reference" the information
that we file with them. This means that we can disclose important information to
you in this prospectus by referring you to another document filed separately
with the Securities and Exchange Commission. The information incorporated by
reference is considered to be a part of this prospectus, and information that we
file later with the Commission will automatically update and supersede this
information.
We incorporate by reference in this prospectus the documents listed
below and any future filings made by us with the Commission under Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act until our offering is complete:
- Annual Report on Form 10-K for the fiscal year ended September 30,
2000;
- Amended Annual Report on Form 10K/A for the fiscal year ended
September 30, 2000;
- Quarterly Report on Form 10-Q for the fiscal quarter ended
December 31, 2000;
- Quarterly Report on Form 10-Q for the fiscal quarter ended March
31, 2001;
- Quarterly Report on Form 10-Q for the fiscal quarter ended June
30, 2001;
- Current Report on Form 8-K, filed November 8, 2000;
- Amended Current Report on Form 8-K/A, filed January 9, 2001;
- Current Report on Form 8-K, filed January 12, 2001;
- Amended Current Report on Form 8-K/A, filed March 13, 2001;
- Current Report on Form 8-K, filed April 12, 2001;
- Current Report on Form 8-K, filed August 16, 2001;
- Form 8-A12G, filed August 11, 2000;
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- Form 8-A12G, filed May 22, 1998.
We will provide to each person who so requests, including any
beneficial owner to whom a prospectus is delivered, a copy of these filings. You
may request a copy of these filings, at no cost, by writing or telephoning us at
the following address:
Timothy Stevens
Senior Vice President of Business Affairs and General Counsel
Inktomi Corporation
4100 E. Third Avenue
Foster City, CA 94404
(650) 653-2800
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information. We are not making an
offer of these securities in any state where the offer is not permitted. You
should not assume the information in this prospectus or any prospectus
supplement is accurate as of any date other than the date on the front of those
documents.
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PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The aggregate estimated (other than the registration fee) expenses to
be paid by the Registrant in connection with this offering are as follows:
Securities and Exchange Commission registration fee............... $ 28,750
Accounting fees and expenses...................................... 40,000
Legal fees and expenses of the registrant......................... 150,000
Printing and engraving............................................ 50,000
Blue sky fees and expenses........................................ 15,000
Transfer agent fees and expenses.................................. 15,000
Rating agencies' fees............................................. 65,000
Miscellaneous..................................................... 37,000
--------
Total............................................................. $400,750
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS OF INKTOMI
Section 145 of the Delaware General Corporation Law permits a
corporation to include in its charter documents and in agreements between the
corporation and its directors, provisions expanding the scope of indemnification
beyond that specifically provided by the current law.
Our Amended and Restated Certificate of Incorporation provides for the
indemnification of directors to the fullest extent permitted under Delaware law.
Our Bylaws provides for the indemnification of officers, directors and
third parties acting on behalf of the corporation to the fullest extent
permitted under the General Corporation Law of Delaware.
We have entered into indemnification agreements with our directors and
executive officers, in addition to indemnification provided for in our Bylaws,
and we intend to enter into indemnification agreements with any new directors
and executive officers in the future.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, or persons controlling Inktomi
pursuant to the foregoing provisions, we have been informed that in the opinion
of the SEC such indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable.
At present, there is no pending litigation or proceeding involving any
of our directors, officers, employees, or other agent in which indemnification
is being sought, nor are we aware of any threatened litigation that may result
in a claim for indemnification by any of our directors, officers, employees, or
other agent.
ITEM 16. EXHIBITS
The following exhibits are filed herewith or incorporated by reference
herein:
II-1
27
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
1.1 Form of Underwriting Agreement.*
3.2 Amended and Restated Certificate of Incorporation.(1)
3.2a Amendment to Amended and Restated Certificate of Incorporation.(2)
3.2b Amendment to Amended and Restated Certificate of Incorporation.(3)
3.4 Bylaws.(1)
4.5 Form of Certificate of Designation.**
4.6 Form of Preferred Stock Certificate.**
4.7 Form of Deposit Agreement.**
4.8 Form of Deposit Receipt (included in Exhibit 4.7).**
4.9 Form of Warrant Agreement.**
4.10 Form of Warrant Certificate.**
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation.
12.1 Computation of Deficiency of Earnings Available to Cover Fixed Charges.
23.1 Consent of PricewaterhouseCoopers, LLP, independent accountants.
23.2 Consent of Arthur Anderson, LLP, independent accountants.
23.3 Consent of Wilson Sonsini Goodrich & Rosati, Professional Corporation (included in Exhibit 5.1).
24.1 Power of Attorney of certain directors and officers of Inktomi Corporation (see page II-5 of this
Form S-3).
----------
* To be filed by amendment or by a report on Form 8-K pursuant to Section
601 of Regulation S-K.
** To be filed as an exhibit to a report pursuant to Section 13(a) or 15(d)
of the Securities Act of 1934.
(1) Incorporated by reference from Inktomi's Registration Statement on
Form S-1 (Reg. No. 333-50247), as amended.
(2) Incorporated by reference from Inktomi's Quarterly Report on Form 10-Q
filed with the Commission on May 17, 1999.
(3) Incorporated by reference from Inktomi's Current Report on Form 8-A
filed with the Commission on August 11, 2000.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration
Statement:
(a) To include any prospectus required by Section
10(a)(3) of the Securities Act,
(b) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the
total dollar value of securities offered would not
exceed that which was registered) and any deviation
from the low or high end of the estimated maximum
offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the
effective registration statement,
II-2
28
(c) To include any material information with respect to
the plan of distribution not previously disclosed in
the Registration Statement or any material change to
such information in the Registration Statement;
provided, however, that clauses (a) and (b) do not apply if the information
required to be included in a post-effective amendment by such clauses is
contained in periodic reports filed with or furnished to the Securities and
Exchange Commission by the Registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 (the "Exchange Act") that are incorporated
by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed a new registration statement relating to the securities
offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act
that is incorporated by reference in this Registration
Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities, other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding, is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of
prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of prospectus
filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of
this registration statement as of the time it was declared
effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that
contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-3
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SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Foster City, State of California, on August 16,
2001.
INKTOMI CORPORATION
By: /s/ Jerry M. Kennelly
----------------------------------
Jerry M. Kennelly,
Executive Vice President
and Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints David C. Peterschmidt and Jerry M.
Kennelly and each of them individually, as his true and lawful attorneys-in-fact
and agents with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities to sign the Registration
Statement filed herewith and any or all amendments to said Registration
Statement (including post-effective amendments and registration statements filed
pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and
otherwise), and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission granting
unto said attorneys-in-fact and agents the full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the foregoing, as full to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or his or her substitute, may lawfully do or cause to be
done by virtue thereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated:
SIGNATURE TITLE DATE
--------- ----- ----
President, Chief Executive Officer August 16, 2001
/s/ David C. Peterschmidt and Chairman
----------------------------- (Principal Executive Officer)
David C. Peterschmidt
/s/ Jerry M. Kennelly Executive Vice President and August 16, 2001
----------------------------- Chief Financial Officer
Jerry M. Kennelly (Principal Financial and Accounting Officer)
/s/ Eric A. Brewer Director August 16, 2001
----------------------------
Eric A. Brewer
/s/ Frank Gill Director August 16, 2001
----------------------------
Frank Gill
/s/ Fredric W. Harman Director August 16, 2001
----------------------------
Fredric W. Harman
Director August 16, 2001
/s/ Alan F. Shugart
----------------------------
Alan F. Shugart
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EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
1.1 Form of Underwriting Agreement.*
3.2 Amended and Restated Certificate of Incorporation.(1)
3.2a Amendment to Amended and Restated Certificate of Incorporation.(2)
3.2b Amendment to Amended and Restated Certificate of Incorporation.(3)
3.4 Bylaws.(1)
4.5 Form of Certificate of Designation.**
4.6 Form of Preferred Stock Certificate.**
4.7 Form of Deposit Agreement.**
4.8 Form of Deposit Receipt (included in Exhibit 4.7).**
4.9 Form of Warrant Agreement.**
4.10 Form of Warrant Certificate.**
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation.
12.1 Computation of Deficiency of Earnings Available to Cover Fixed Charges.
23.1 Consent of PricewaterhouseCoopers, LLP, independent accountants.
23.2 Consent of Arthur Anderson, LLP, independent accountants.
23.3 Consent of Wilson Sonsini Goodrich & Rosati, Professional Corporation (included in Exhibit 5.1).
24.1 Power of Attorney of certain directors and officers of Inktomi Corporation (see page II-5 of this
Form S-3).
----------
* To be filed by amendment or by a report on Form 8-K pursuant to Section
601 of Regulation S-K.
** To be filed as an exhibit to a report pursuant to Section 13(a) or 15(d)
of the Securities Act of 1934.
(1) Incorporated by reference from Inktomi's Registration Statement on
Form S-1 (Reg. No. 333-50247), as amended.
(2) Incorporated by reference from Inktomi's Quarterly Report on Form 10-Q
filed with the Commission on May 17, 1999.
(3) Incorporated by reference from Inktomi's Current Report on Form 8-A
filed with the Commission on August 11, 2000.