RHT » Topics » PART II

These excerpts taken from the RHT 10-K filed Apr 29, 2009.

PART II

 

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

PART II

 





ITEM 5.MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
STYLE="margin-top:12px;margin-bottom:0px">Market Information

Our common stock trades on the
New York Stock Exchange under the symbol “RHT”. The chart below sets forth the high and low sales information for each of the quarters of the fiscal years ended February 28, 2009 and February 29, 2008.

STYLE="font-size:12px;margin-top:0px;margin-bottom:0px"> 


























































































   FY 2009  FY 2008

Quarter

  High  Low  High  Low

First

  $24.42  $16.54  $24.73  $20.45

Second

  $24.80  $19.00  $25.24  $18.50

Third

  $21.20  $7.50  $22.67  $18.20

Fourth

  $16.44  $8.30  $21.32  $16.82

PART III

 

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

We intend to file with the SEC a definitive proxy statement with respect to the Annual Meeting of Stockholders to be held on August 13, 2009 (the “2009 Annual Meeting”). The information under the sections entitled “Item No. 1: Election of Directors,” “Beneficial Ownership of Our Common Stock”, “Corporate Governance and Board of Director Information”, “Compensation and Other Information Concerning Executive Officers” and “Other Matters” from our definitive proxy statement for the 2009 Annual Meeting, which is to be filed with the SEC not later than 120 days after the close of our fiscal year ended February 28, 2009 (the “2009 Proxy Statement”), is hereby incorporated by reference.

 

ITEM 11. EXECUTIVE COMPENSATION

The information under the section entitled “Compensation and Other Information Concerning Executive Officers” and “Corporate Governance and Board of Director Information” from the 2009 Proxy Statement is hereby incorporated by reference.

 

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information under the sections entitled “Beneficial Ownership of Our Common Stock” and “Compensation and Other Information Concerning Executive Officers” from the 2009 Proxy Statement is hereby incorporated by reference.

 

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information under the section entitled “Corporate Governance and Board of Directors Information” from the 2009 Proxy Statement is hereby incorporated by reference.

 

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information under the sections entitled “Item No. 2: Ratification of Selection of Independent Registered Public Accounting Firm” from the 2009 Proxy Statement is hereby incorporated by reference.

 

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Table of Contents

PART III

 





ITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

SIZE="2">We intend to file with the SEC a definitive proxy statement with respect to the Annual Meeting of Stockholders to be held on August 13, 2009 (the “2009 Annual Meeting”). The information under the sections entitled “Item
No. 1: Election of Directors,” “Beneficial Ownership of Our Common Stock”, “Corporate Governance and Board of Director Information”, “Compensation and Other Information Concerning Executive Officers” and
“Other Matters” from our definitive proxy statement for the 2009 Annual Meeting, which is to be filed with the SEC not later than 120 days after the close of our fiscal year ended February 28, 2009 (the “2009 Proxy
Statement”), is hereby incorporated by reference.

 





ITEM 11.EXECUTIVE COMPENSATION

The information under the
section entitled “Compensation and Other Information Concerning Executive Officers” and “Corporate Governance and Board of Director Information” from the 2009 Proxy Statement is hereby incorporated by reference.

STYLE="font-size:18px;margin-top:0px;margin-bottom:0px"> 





ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">The information under the sections entitled “Beneficial Ownership of Our Common Stock” and “Compensation and Other Information Concerning
Executive Officers” from the 2009 Proxy Statement is hereby incorporated by reference.

 





ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

FACE="Times New Roman" SIZE="2">The information under the section entitled “Corporate Governance and Board of Directors Information” from the 2009 Proxy Statement is hereby incorporated by reference.

STYLE="font-size:18px;margin-top:0px;margin-bottom:0px"> 





ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES

The
information under the sections entitled “Item No. 2: Ratification of Selection of Independent Registered Public Accounting Firm” from the 2009 Proxy Statement is hereby incorporated by reference.

STYLE="margin-top:0px;margin-bottom:0px"> 


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These excerpts taken from the RHT 10-K filed Apr 29, 2008.

Part III

 

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

We intend to file with the SEC a definitive proxy statement with respect to the Annual Meeting of Stockholders to be held on August 14, 2008. The information under the sections entitled “Board of Directors and Corporate Governance Information,” “Compensation and Other Information Concerning Executive Officers” and “Section 16(a) Beneficial Ownership Reporting Compliance” from our definitive proxy statement for the annual meeting of stockholders, which is to be filed with the SEC not later than 120 days after the close of our fiscal year ended February 29, 2008 (the “2008 Proxy Statement”), is hereby incorporated by reference.

 

ITEM 11. EXECUTIVE COMPENSATION

The information under the section entitled “Compensation and Other Information Concerning Executive Officers” and “Board of Directors and Corporate Governance Information” from the 2008 Proxy Statement is hereby incorporated by reference.

 

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information under the sections entitled “Security Ownership of Certain Beneficial Owners and Management” and “Compensation and Other Information Concerning Executive Officers” from the 2008 Proxy Statement is hereby incorporated by reference.

 

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information under the section entitled “Board of Directors and Corporate Governance Information” from the 2008 Proxy Statement is hereby incorporated by reference.

 

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information under the sections entitled “Board of Directors and Corporate Governance Information” and “Ratification of Selection of Independent Registered Public Accounting Firm” from the 2008 Proxy Statement is hereby incorporated by reference.

Part III

 






ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

SIZE="2">We intend to file with the SEC a definitive proxy statement with respect to the Annual Meeting of Stockholders to be held on August 14, 2008. The information under the sections entitled “Board of Directors and Corporate Governance
Information,” “Compensation and Other Information Concerning Executive Officers” and “Section 16(a) Beneficial Ownership Reporting Compliance” from our definitive proxy statement for the annual meeting of stockholders, which
is to be filed with the SEC not later than 120 days after the close of our fiscal year ended February 29, 2008 (the “2008 Proxy Statement”), is hereby incorporated by reference.

STYLE="font-size:18px;margin-top:0px;margin-bottom:0px"> 






ITEM 11.
EXECUTIVE COMPENSATION

The information under the
section entitled “Compensation and Other Information Concerning Executive Officers” and “Board of Directors and Corporate Governance Information” from the 2008 Proxy Statement is hereby incorporated by reference.

STYLE="font-size:18px;margin-top:0px;margin-bottom:0px"> 






ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">The information under the sections entitled “Security Ownership of Certain Beneficial Owners and Management” and “Compensation and Other
Information Concerning Executive Officers” from the 2008 Proxy Statement is hereby incorporated by reference.

 






ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

FACE="Times New Roman" SIZE="2">The information under the section entitled “Board of Directors and Corporate Governance Information” from the 2008 Proxy Statement is hereby incorporated by reference.

STYLE="font-size:18px;margin-top:0px;margin-bottom:0px"> 






ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES

The
information under the sections entitled “Board of Directors and Corporate Governance Information” and “Ratification of Selection of Independent Registered Public Accounting Firm” from the 2008 Proxy Statement is hereby
incorporated by reference.

This excerpt taken from the RHT 10-Q filed Oct 10, 2007.

PART II

 

ITEM 1. LEGAL PROCEEDINGS

Red Hat Professional Consulting, Inc., formerly PTI, a wholly owned subsidiary of the Company acquired in February 2001, together with its former directors and some of its former principal shareholders, is a defendant in a suit brought by a former employee in DeKalb County Superior Court in Georgia (Case No. 00-CV-5509-8). The plaintiff asserts, among other things, breach of various employment agreements and seeks monetary damages. Red Hat Professional Consulting, Inc. has filed an answer, affirmative defenses and counterclaims, denying all liability. All discovery in the matter is complete. On October 31, 2005, a hearing was held on defendants’ Third Motion for Partial Summary Judgment, and the Court granted summary judgment on three of the claims. A pre-trial order was entered in the matter, and it was set for trial on December 11, 2006. However, the Court elected to delay trial for purposes of rehearing plaintiff’s motion for partial summary judgment, and that hearing was held on December 11, 2006. On February 16, 2007, the Court issued an order in favor of plaintiff and against all defendants on plaintiff’s claim that his stock option agreement had been breached. The order does not set forth a remedy. This order is being appealed by the Company to the Georgia Court of Appeals. The Company has been indemnified, subject to certain limitations, in this matter by the former PTI shareholders; however, in light of the adverse ruling and the possibility of further adverse rulings there is a possibility that any damage award in this case could, if upheld, exceed the limits of such indemnification. The Company is not presently able to reasonably estimate potential losses, if any, related to the lawsuit.

Commencing on or about March 29, 2001, the Company and certain of its officers and directors were named as defendants in a series of purported class action suits arising out of the Company’s initial public offering and secondary offering. Approximately 310 other IPO issuers were named as defendants in similar class action complaints (together, the “IPO Allocation Actions”). On August 8, 2001, Chief Judge Michael Mukasey of the U.S. District Court for the Southern District of New York issued an order that transferred all of the IPO Allocation Actions, including the complaints involving the Company, to one judge for coordinated pre-trial proceedings (Case No. 21 MC 92). The plaintiffs contend that the defendants violated federal securities laws by issuing registration statements and prospectuses that contained materially false and misleading information and failed to disclose material information. Plaintiffs also challenge certain IPO allocation practices by underwriters and the lack of disclosure thereof in initial public offering documents. On April 19, 2002, plaintiffs filed amended complaints in each of the 310 consolidated actions, including the Red Hat action. The relief sought consists of unspecified damages, attorneys’ and expert fees and other unspecified costs. In October of 2002, the individual director and officer defendants of the Company were dismissed from the case without prejudice. In October of 2004, the District Court certified a class in six of the 310 actions (the “focus cases”) and noted that the decision is intended to provide strong guidance to all parties regarding class certification in the remaining cases. The Company’s action is not one of the focus cases. The issuers, including the Company, the plaintiffs, and the issuers’ insurers agreed in concept to a proposed settlement whereby the issuers, including the Company, would be released from this litigation. The proposed settlement contemplates that any amounts needed to fund the settlement-related expenses would come from participating issuers’ directors and officers liability insurance proceeds as opposed to funds of the participating issuer defendants themselves. A participating issuer defendant could be required to contribute to the costs of the settlement if that issuer’s insurance coverage were insufficient to pay the issuer’s allocable share of the settlement costs. That proposed settlement was submitted to the Court for its consideration. The Court granted preliminary approval to the settlement. A fairness hearing on the proposed settlement was held on April 24, 2006. On December 5, 2006, the U.S. Court of Appeals for the Second Circuit vacated the District Court’s class certification with respect to the focus cases and remanded the matter for further consideration. As a result, all matters in the case, including any settlement proposal, await determination of whether a newly defined class can meet with the approval of the Court. If a newly defined class is approved, new settlement discussions are likely to occur. The Company intends to defend itself vigorously in this matter. There can be no assurance, however, that the Company will be successful, and an adverse resolution of the lawsuit could have a material adverse effect on the Company’s financial position and results of operations in the period in which the lawsuit is resolved. The Company is not presently able to reasonably estimate potential losses, if any, related to the lawsuit.

Commencing on August 4, 2003, the Company filed suit against The SCO Group, Inc. (“SCO”) in the U.S. District Court for the District of Delaware seeking a declaratory judgment that the Company is not infringing any of SCO’s intellectual property rights (Civil Action No. 03-722-SLR). In addition, the Company has asserted claims against SCO under Delaware and federal law, including deceptive trade practices, unfair competition, tortious interference with prospective business opportunities, trade libel and violations of the Lanham Act. The Company contends that SCO has made false and misleading public statements in alleging that software code, in which SCO claims to own copyrights and trade secrets, was misappropriated and incorporated into the Company’s product and that SCO has threatened legal action. On September 15, 2003, SCO filed a motion to dismiss contending, among other things, that no actual controversy exists and that the declaratory judgment that the Company seeks would not be warranted. On April 6, 2004, the Court denied SCO’s motion to dismiss but stayed further action in the case pending resolution of litigation underway in the U.S. District Court for the District of Utah between SCO and IBM. On April 20, 2004, Red Hat filed a motion for reconsideration contending that a stay based on the Utah case would be inappropriate. On March 31, 2005, the Court denied the Company’s motion to reconsider but extended to the Company the right to renew the motion should matters materially change in the SCO v. IBM litigation. SCO filed for bankruptcy protection in the District of Delaware on Sept.14, 2007, and on September 17, 2007 SCO filed a Notice in the pending case referencing the automatic stay in bankruptcy and asking the court to take the case off its active calendar.

In the summer of 2004, 14 class action lawsuits were filed against the Company and several of its present and former officers on behalf of investors who purchased the Company’s securities during various periods from June 19, 2001 through July 13, 2004. All 14 suits were filed in the U.S. District Court for the Eastern District of North Carolina. In each of the actions, plaintiffs seek to represent a class of purchasers of the Company’s common stock during some or all of the period from June 19, 2001 through July 13, 2004. All of the claims arise in connection with the Company announcement on July 13, 2004 that it would restate certain of its financial statements (the “Restatement”). One or more of the plaintiffs assert that certain present and former officers (the “Individual Defendants”) and the Company violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 thereunder by issuing the financial statements that the Company subsequently restated. One or more of the plaintiffs seek unspecified damages, interest, costs, attorneys’ and experts’ fees, an accounting of certain profits obtained by the Individual Defendants from trading in the Company’s common stock, disgorgement by the Company’s chief executive officer and former chief financial officer of certain compensation and profits from trading in the Company’s common stock pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 and other relief. As of September 8, 2004, all of these class action lawsuits were consolidated into a single action referenced as Civil Action No. 5:04-CV-473BR and titled In re Red Hat, Inc. Securities Litigation. Lead counsel and lead plaintiff in the case were designated, and on May 6, 2005, the plaintiffs filed an amended consolidated class action complaint. On July 29, 2005, the Company, on behalf of itself and the Individual Defendants, filed a motion to dismiss the action for failure to state a claim upon which relief may be granted. Also on that date, PricewaterhouseCoopers LLP (“PwC”), another defendant, filed a separate motion to dismiss. On May 12, 2006, the Court issued an order granting the motion to dismiss the Securities Exchange Act claims against several of the Individual Defendants, but denying the motion to dismiss the Securities Exchange Act claims against the Company, its chief executive officer and its former chief financial officer. The Court dismissed the claims under the Sarbanes-Oxley Act in their entirety, and also granted PwC’s motion to dismiss. On November 6, 2006, the plaintiffs filed a motion for class certification. Subsequent to the filing of that motion, several plaintiffs withdrew as potential class representatives, and the Company opposed the certification of the remaining proposed class representatives. On May 11, 2007, the Court entered an order denying class certification and denying all other pending motions as moot. Thereafter, on July 13 and July 17, 2007, respectively, two individuals, Charles Gilbert and James D. McRee, filed separate Renewed Motions for Appointment as Lead Plaintiff and Approval of Selection of Lead and Liaison Counsel. On August 2, 2007, the Company filed its opposition to those motions. The motions are currently pending before the court. The Company intends to vigorously defend any remaining claims in this matter. There can be no assurance, however, that the Company will be successful, and an adverse resolution of the lawsuit could have a material adverse effect on the Company’s financial position and results of operations in the period in which the lawsuit is resolved. The Company is not presently able to reasonably estimate potential losses, if any, related to the lawsuit.

 

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On June 26, 2006, FireStar Software, Inc. filed a complaint in the U.S. District Court for the Eastern District of Texas (Civil Action No. 2-06CV-258), alleging that the Company and certain subsidiaries have directly and indirectly infringed FireStar’s U.S. Patent Number 6,101,502 by marketing, distributing, using and offering to provide support services for the JBoss Hibernate software. FireStar filed first, second, and third amended complaints on October 19, 2006, November 8, 2006, and June 24, 2007, respectively. The third amended complaint seeks, among other relief, compensatory damages, enhanced damages, costs, attorney’s fees and injunctive relief. The Company filed its answer to the third amended complaint on July 13, 2007. The Court set an initial scheduling conference for October 3, 2007 to discuss a discovery plan. Discovery is scheduled to continue until September 2, 2008. Trial is scheduled to begin on or after January 5, 2009. Based on the Company’s efforts to date, it believes it has meritorious defenses to this matter, and it intends to vigorously defend itself. There can be no assurance, however, that the Company will be successful in its defense, and an adverse resolution of the lawsuit could have a material adverse effect on its financial position and ability to continue to capitalize on its service offerings around the Hibernate technology.

The Company also experiences other routine litigation in the normal course of our business. The Company believes that the outcome of this routine litigation will not have a material adverse effect on its consolidated financial position and results of operations.

 

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ITEM 1A. RISK FACTORS

Set forth below are certain risks and cautionary statements, which supplement other disclosures in this report.

Moreover, certain statements contained in this report and the documents incorporated by reference in this report, including in Management’s Discussion and Analysis of Financial Condition and Results of Operations, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that is not strictly a historical statement (for example, statements regarding current or future financial performance, management’s plans and objectives for future operations, product plans and performance, management’s expectations regarding market risk and market penetration, management’s assessment of market factors or strategies, objectives and plans of Red Hat and its partners). Words such as “anticipates,” “believes,” “expects,” “estimates,” “intends,” “plans,” “projects,” and similar expressions, may also identify such forward-looking statements. Investors are cautioned that these forward-looking statements are not guarantees of Red Hat’s future performance and are subject to a number of risks and uncertainties that could cause Red Hat’s actual results to differ materially from those found in the forward-looking statements and from historical trends. These risks and uncertainties include the risks and cautionary statements detailed below and elsewhere in this report as well as in Red Hat’s other filings with the Securities and Exchange Commission (“SEC”), copies of which may be accessed through the SEC’s web site at http://www.sec.gov. Readers are urged to carefully review these risks and cautionary statements. The forward-looking statements included in this report represent our views as of the date of this report. We specifically disclaim any obligation to update these forward-looking statements in the future. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this report.

This excerpt taken from the RHT 10-K filed Apr 30, 2007.

Part III

 

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

We intend to file with the SEC a definitive proxy statement with respect to the Annual Meeting of Stockholders to be held on August 16, 2007. The information under the sections entitled “Board of Directors and Corporate Governance Information,” “Compensation and Other Information Concerning Executive Officers” and “Section 16(a) Beneficial Ownership Reporting Compliance” from our definitive proxy statement for the annual meeting of stockholders, which is to be filed with the SEC not later than 120 days after the close of our fiscal year ended February 28, 2007 (the “2007 Proxy Statement”), is hereby incorporated by reference.

This excerpt taken from the RHT 10-K filed May 12, 2006.

Part III

 

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

We intend to file with the Securities and Exchange Commission a definitive proxy statement with respect to the Annual Meeting of Stockholders to be held on August 17, 2006. The information under the sections entitled “Board of Director and Corporate Governance Information,” “Compensation and Other Information Concerning Executive Officers” and “Section 16(a) Beneficial Ownership Reporting Compliance” from our definitive proxy statement for the annual meeting of stockholders, which is to be filed with the Securities and Exchange Commission not later than 120 days after the close of our fiscal year ended February 28, 2006 (the “2006 Proxy Statement”), is hereby incorporated by reference.

 

ITEM 11. EXECUTIVE COMPENSATION

The information under the section entitled “Compensation and Other Information Concerning Executive Officers” from the 2006 Proxy Statement is hereby incorporated by reference.

 

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information under the sections entitled “Security Ownership of Certain Beneficial Owners and Management” and “Compensation and Other Information Concerning Executive Officers” from the 2006 Proxy Statement is hereby incorporated by reference.

 

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information under the section entitled “Compensation and Other Information Concerning Executive Officers” from the 2006 Proxy Statement is hereby incorporated by reference.

 

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information under the section entitled “Ratification of Selection of Registered Public Accounting Firm” from the 2006 Proxy Statement is hereby incorporated by reference.

This excerpt taken from the RHT 10-K filed May 16, 2005.

PART II

 

ITEM 5.   MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 

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