Stamps.com 2003 Annual Report Download - page 19

Table of Contents
Risks Related to Our Stock
Our charter documents could deter a takeover effort, which could inhibit your ability to receive an acquisition premium for your
shares.
The provisions of our certificate of incorporation, bylaws and Delaware law could make it difficult for a third party to acquire us, even it would
be beneficial to our stockholders. In addition, we are subject to the provisions of Section 203 of the Delaware General Corporation Law, which
could prohibit or delay a merger or other takeover of our company, and discourage attempts to acquire us.
The US Postal Service may object to control of our common stock being held by a foreign person.
The US Postal Service may raise national security or similar concerns to prevent foreign persons from acquiring significant ownership of our
common stock or ownership of Stamps.com. These concerns may prohibit or delay a merger or other takeover of our company. Our
competitors may also seek to have the US Postal Service block the acquisition by a foreign person of our common stock or our company in
order to prevent the combined company from becoming a more effective competitor in the market for PC Postage.
Our stock price is volatile
The price at which our common stock has traded since our initial public offering in June of 1999 has fluctuated significantly. The price may
continue to be volatile due to a number of factors, including the following, some of which are beyond our control: variations in our operating
results, variations between our actual operating results and the expectations of securities analysts, investors and the financial community,
announcements of developments affecting our business, systems or expansion plans by us or others, and market volatility in general.
As a result of these and other factors, investors in our common stock may not be able to resell their shares at or above their original purchase
price. In the past, securities class action litigation often has been instituted against companies following periods of volatility in the market price
of their securities. This type of litigation, if directed at us, could result in substantial costs and a diversion of management’s attention and
resources.
Shares of our common stock held by existing stockholders may be sold into the public market, which could cause the price of our
common stock to decline.
If our stockholders sell into the public market substantial amounts of our common stock purchased in private financings prior to our initial
public offering, or purchased upon the exercise of stock options or warrants, or if there is a perception that these sales could occur, the market
price of our common stock could decline. All of these shares are available for immediate sale, subject to the volume and other restrictions
under Rule 144 of the Securities Act of 1933.
ITEM 2. PROPERTIES
Our corporate headquarters are located in a 26,000 square foot facility in Santa Monica, California under a lease expiring on May 31, 2004.
We also have several properties under lease that are no longer occupied by Stamps.com, and which are being sublet or are unoccupied. We
have approximately 1,500 square feet of unoccupied office space in Irvine, California under a lease expiring in March 2004. We also have
approximately 43,000 square feet of facilities in Santa Monica, California under leases which expire in May 2004, and the majority of
unoccupied space has been sublet. We have incorporated the costs related to excess facilities that are not occupied by Stamps.com into our
restructuring charges incurred in prior periods. In November 2003, we entered into a facility lease agreement for 36,000 square feet beginning
in March 2004 and expiring in March 2010, for our new corporate headquarters in Playa Vista, California.
ITEM 3. LEGAL PROCEEDINGS
On June 16, 1999, Pitney Bowes sued us for alleged patent infringement in the United States District Court for the District of Delaware
(“Pitney I”). The suit originally alleged that we were infringing two patents held by Pitney Bowes related to postage application systems and
electronic indicia. The suit sought treble damages, a
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