<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 10, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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DATAWORKS CORPORATION
(Exact name of Registrant as specified in its charter)
--------------------
California 33-0209937
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
5910 Pacific Center Boulevard, Suite 300
San Diego, California 92121
(619) 546-9600
(Address, including zip code, and telephone number, including area
code, of Registrant's principal executive offices)
--------------------
Stuart W. Clifton
Chairman, President and Chief Executive Officer
DATAWORKS CORPORATION
5910 Pacific Center Boulevard, Suite 300
San Diego, California 92121
(619) 546-9600
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------------
Copies to:
Frederick T. Muto, Esq.
COOLEY GODWARD LLP
4365 Executive Drive, Suite 1100
San Diego, CA 92121
(619) 550-6000
--------------------
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, 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
<TABLE>
<CAPTION>
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PER SHARE (1) OFFERING PRICE (1) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock, no par value 250,000 $19.50 $4,875,000 $1,477.27
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</TABLE>
(1) Estimated in accordance with Rule 457(c) solely for the purpose of computing
the amount of the registration fee based on the average of the high and low
prices of the Registrant's Common Stock as reported on the Nasdaq National
Market on February 4, 1997.
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 THAT SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN
ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
================================================================================
<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED FEBRUARY 10, 1997
PROSPECTUS
250,000 SHARES
DATAWORKS CORPORATION
COMMON STOCK
--------------------
This Prospectus relates to 250,000 shares (the "Shares") of Common
Stock, no par value per share (the "Common Stock"), of DataWorks Corporation
("DataWorks" or the "Company"). The Shares may be offered by a certain
shareholder of the Company (the "Selling Shareholder") from time to time in
transactions on the Nasdaq National Market, in privately negotiated transactions
or a combination of such methods of sale, at fixed prices that may be changed,
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Selling Shareholder may
effect such transactions by selling the Shares to or through broker-dealers, and
such broker-dealers may receive compensation in the form of discounts,
concessions or commissions from the Selling Shareholder or the purchasers of the
Shares for whom such broker-dealers may act as agent or to whom they sell as
principal or both (which compensation to a particular broker-dealer might be in
excess of customary commissions). See "Selling Shareholder" and "Plan of
Distribution."
None of the proceeds from the sale of the Shares by the Selling
Shareholder will be received by the Company. The Company has agreed to bear
certain expenses in connection with the registration and sale of the Shares
being offered by the Selling Shareholder. The Company has agreed to indemnify
the Selling Shareholder against certain liabilities, including certain
liabilities under the Securities Act of 1933, as amended. See "Plan of
Distribution."
The Common Stock of the Company is traded on the Nasdaq National Market
under the Symbol "DWRX." On February 7, 1997, the last sale price for the
Common Stock as reported by the Nasdaq National Market was $18.88 per share.
--------------------
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 9.
--------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this Prospectus is February __, 1997
<PAGE> 3
NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED
BY REFERENCE IN THIS PROSPECTUS, AND ANY INFORMATION OR REPRESENTATION NOT
CONTAINED OR INCORPORATED HEREIN MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL,
OR A SOLICITATION OF AN OFFER TO BUY, BY ANY PERSON IN ANY JURISDICTION IN WHICH
IT IS UNLAWFUL FOR SUCH PERSON TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE
DELIVERY OF THIS PROSPECTUS AT ANY TIME NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, IMPLY THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY DATE
SUBSEQUENT TO THE DATE HEREOF.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company may be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and at
the Commission's following Regional Offices: Chicago Regional Office, Suite
1400, 500 West Madison Street, Chicago, Illinois 60661; and New York Regional
Office, Seven World Trade Center, Suite 1300, New York, New York 10048. Copies
of such material can also be obtained at prescribed rates from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Judiciary Plaza,
Washington, D.C. 20549. The Commission also maintains a site on the World Wide
Web that contains reports, proxy and information statements and other
information regarding the Company. The address for such site is
http://www.sec.gov.
The Company has filed with the Commission a Registration Statement on
Form S-3 under the Securities Act with respect to the Common Stock offered
hereby. This Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information with
respect to the Company and the Common Stock offered hereby, reference is made to
the Registration Statement and the exhibits and schedules thereto, which may be
inspected without charge at, and copies thereof may be obtained at prescribed
rates from, the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Judiciary Plaza, Washington, D.C. 20549.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995, the Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, June 30 and September 30, 1996, the Company's Proxy Statement
for the 1996 Annual Meeting of Shareholders filed pursuant to Rule 14a-6 of the
Exchange Act, the Company's Prospectus/Joint Proxy Statement dated September 13,
1996, the Company's Registration Statement on Form S-4 (No. 333-11741) filed on
September 11, 1996, the Company's Form 8-K filed by the Company on October 8,
1996, the description of the common stock contained in the Company's
<PAGE> 4
Registration Statement on Form 8-A filed on September 20, 1995, and the
Company's Registration Statement on Form S-3 (No. 333-15825) filed on November
8, 1996, each as filed by the Company with the Commission, are hereby
incorporated by reference in this Prospectus except as superseded or modified
herein. All documents filed with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and
prior to the termination of the offering shall be deemed to be incorporated by
reference into this Prospectus and to be a part hereof from the date of filing
of such documents. Any statement contained in any document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as modified or superseded, to constitute a part of this Prospectus. The
Company will provide without charge to each person, including any beneficial
owner, to whom this Prospectus is delivered, upon written or oral request of
such person, a copy of any and all of the documents that have been or may be
incorporated by reference herein (other than exhibits to such documents which
are not specifically incorporated by reference into such documents). Such
requests should be directed to the Chief Financial Officer at the Company's
principal executive offices at 5910 Pacific Center Boulevard, Suite 300, San
Diego, California 92121, (619) 546-9600
5.
<PAGE> 5
THE COMPANY
Except for the historical information contained or incorporated by
reference herein, this Prospectus (and the information incorporated herein by
reference) contains forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ materially from those
discussed here or incorporated by reference. Factors that could cause or
contribute to such differences include, but are not limited to, those discussed
in the following section, as well as those discussed elsewhere in this
Prospectus and any other documents incorporated herein by reference.
DataWorks Corporation ("DataWorks" or the "Company") develops, markets,
implements and supports open systems, client/server-based Enterprise Resource
Planning ("ERP") software for mid-range discrete manufacturing companies with
annual revenues between $3 million and $1 billion. The Company's products and
services facilitate enterprise-wide management of resources and information and
allow mid-range manufacturers to reduce order fulfillment cycle times, improve
operating efficiencies and measure critical company performance against defined
plan objectives. DataWorks' products enable its customers to manage
make-to-stock and make-to-order production methods, as well as multiple hybrid
or "mixed mode" production methods, within a single manufacturing site or across
multiple sites. The Company's products also help customers adapt to growth,
changing levels of operations, and business process re-engineering, which is
becoming commonplace among manufacturing concerns.
The business needs and resource requirements of mid-range manufacturers
tend to be considerably different than those of larger companies. Companies in
this market typically have small information systems departments, budget
constraints and limited experience with the advanced technologies inherent in
ERP systems. DataWorks segments the mid-range manufacturing market into three
distinct sectors: the lower tier segment (companies with annual revenues of $3
million to $25 million), the mid-tier segment ($25 million to $200 million) and
the upper tier segment ($200 million to $1 billion). The Company's family of ERP
solutions is designed to provide a product migration path to address the
changing needs of growing companies in the mid-range manufacturing market. The
Company's principal products have been DataFlo and ManFact II, open systems
client/server-based products that are targeted at mid-tier manufacturers and
which accounted for 73.4% of the Company's revenues in the first nine months of
1996. The Company has broadened its product line to serve the lower tier segment
of the mid-range market with Vista and Vantage. Vista and Vantage are
easy-to-use, Windows-based products that the Company acquired through its recent
acquisition of DCD Corporation ("DCD"). The Company also has under development
its Enterprise Client Server ("ECS") system, an object oriented, multi-tier
client/server-based product that is designed for the upper tier segment of the
mid-range market. The Company intends to commence customer shipments of ECS in
late 1997.
6.
<PAGE> 6
The Company has designed its product family to be affordable and to
incorporate a broad range of applications, depth of functionality, ease of use
and an ability to be rapidly deployed. The Company's products are comprised of
modules that provide and integrate feature-rich applications and that can be
configured to comprehensively support a customer's business. DataWorks provides
turnkey solutions by integrating its application software products with third
party hardware, operating systems, and database and other software products. The
Company offers a suite of development tools and a full complement of services to
help its customers maximize the benefits of the Company's software products and
efficiently implement the Company's ERP solutions. These services include
initial system implementation, consultation, customer support desk and
maintenance activities, technical and programming services, and periodic
enhancement releases of software products.
The Company's objective is to be the leading provider of business
information solutions and related products and services to mid-range
manufacturers within selected markets. To accomplish this objective, the Company
intends to: (i) continue to develop new modules and incorporate new
functionality into its products such as Internet integration, business objects,
decision support, manufacturing execution systems support and Object EDI (a
cross-product universal transaction processing protocol); (ii) continue to focus
on achieving high levels of customer satisfaction; (iii) offer its DCD and ECS
products to its targeted market segments; and (iv) leverage its sophisticated
sales and marketing system to increase DataWorks' presence in the lower tier and
international markets.
The Company principally focuses on six discrete, dynamic industries
within its target market: industrial equipment; computer/office equipment;
consumer electronics; instrumentation and controls; medical/dental products; and
transportation/aerospace products. Companies in these "highly engineered
product" industries are typically characterized by complex bills of material,
sophisticated manufacturing processes and a greater need for post-sales
monitoring and tracking. The Company utilizes a sophisticated, multi-phased
sales and marketing approach to enable account representatives to qualify and
track prospective clients, monitor sales efforts and provide valuable management
information, all of which enhances the Company's new customer success rate. The
Company sells its products in the United States primarily through a direct sales
force. To date the Company has derived substantially all of its revenues from
its domestic sales efforts. The Company also has a wholly owned subsidiary in
the United Kingdom, and plans to expand its international sales and service
operations. As of September 30, 1996, DataWorks products were licensed to more
than 3,000 customers.
The Company was incorporated in California in 1986. The Company's
executive offices are located at 5910 Pacific Center Boulevard, Suite 300, San
Diego, California 92121, and its telephone number is (619) 546-9600.
THE DCD ACQUISITION
In September 1996, the Company acquired DCD in a stock-for-stock
transaction accounted for as a pooling-of-interests. Accordingly, the financial
results of DCD have been consolidated with the financial results of the Company
included in this Prospectus. In connection
7.
<PAGE> 7
with the acquisition, the shareholders of DCD received approximately 1.8 million
shares of the Common Stock of the Company, which constituted approximately 22.6%
of the outstanding Common Stock immediately after the acquisition.
DCD designs, develops, markets and supports software for use by lower
tier mid-range manufacturers in the make-to-order manufacturing industry. The
principal products acquired by DataWorks in the transaction were Vista and
Vantage. The Company believes that this acquisition allows it to achieve several
important strategic objectives, including both the addition of complementary
products to better serve various markets and a significant expansion of the
Company's customer and revenue base.
8.
<PAGE> 8
RISK FACTORS
An investment in the shares being offered hereby involves a high degree
of risk. Prospective investors should carefully consider the following risk
factors, in addition to other information contained in this Prospectus and in
any other documents incorporated herein by reference in evaluating an investment
in the shares of Common Stock offered hereby.
Fluctuations in Quarterly Operating Results. The Company has
experienced significant fluctuations in its revenues and operating results from
quarter to quarter and anticipates that it will continue to experience such
quarterly fluctuations. The Company's revenues and operating results have
generally been higher in the fourth quarter than in any preceding quarter of the
year. The Company believes that fourth quarter revenues are positively impacted
by year-end capital purchases by some large corporate customers, as well as by
the Company's sales compensation plans. Seasonal factors, which the Company
believes are common in the computer software industry, are likely to increase as
the Company focuses on larger corporate accounts. As a result of these seasonal
factors, first quarter revenues in any year are typically lower than revenues in
the immediately preceding fourth quarter. In addition, the Company's revenues
occur predominantly in the third month of each quarter and tend to be
concentrated in the latter half of that third month. Accordingly, the Company's
quarterly results of operations are difficult to predict, and delays in product
delivery or in closings of sales near the end of a quarter could cause quarterly
revenues and, to a greater degree, net income to fall substantially short of
anticipated levels. Factors that may contribute to such fluctuations in addition
to seasonal factors include: the number of new orders and product shipments; the
size and timing of individual orders; the timing of shipment of hardware or
database software by third party vendors necessary in order for the Company to
recognize revenues; the timing of introduction of products or product
enhancements by the Company, the Company's competitors or other providers of
hardware, software and components for the Company's market; competition and
pricing in the software industry; market acceptance of new products; reduction
in demand for existing products and shortening of product life cycles as a
result of new product introductions by competitors; product quality problems;
customer order deferrals in anticipation of new products; changes in customer
budgets; changes in Company strategy; changes in Company operating expenses;
personnel changes; fluctuations in foreign currency exchange rates; changes in
the mix of products sold; conditions or events in the manufacturing industry;
and general economic conditions.
The Company's sales figures for DataFlo and ManFact II, the Company's
principal products, generally reflect a relatively high amount of revenues per
order. The loss or delay of individual orders for these products, therefore,
could have a more significant impact on the revenues and quarterly results of
the Company than on those of companies with higher sales volumes and lower
revenues per order. The Company's software products generally are shipped
9.
<PAGE> 9
as orders are received, and revenues are recognized upon delivery of the
products, provided no significant vendor obligations exist and collection of the
related receivable is deemed probable. As a result, software license revenues in
any quarter are substantially dependent on orders booked and shipped in that
quarter. The timing of license revenues derived from sales of the Company's
DataFlo and ManFact II products is difficult to predict because of the length of
the sales cycle for these products, which is typically three to nine months from
the initial contact. Because the Company's operating expenses are based on
anticipated revenue trends and because a high percentage of the Company's
expenses are relatively fixed, a delay in the recognition of revenue from a
limited number of license transactions could cause significant variations in
operating results from quarter to quarter and could result in losses. To the
extent such expenses precede, or are not subsequently followed by, increased
revenues, the Company's operating results would be materially adversely
affected. In addition, the achievement of anticipated revenues is substantially
dependent on the ability of the Company to attract, on a timely basis, and
retain skilled personnel, especially sales, service and implementation
personnel. See " -- Ability to Recruit Sales, Service and Implementation
Personnel" and " -- Dependence on Key Employees." As a result of these factors,
revenues for any quarter are subject to significant variation, and the Company
believes that period-to-period comparisons of its results of operations are not
necessarily meaningful and should not be relied upon as indications of future
performance. Fluctuations in operating results may also result in volatility in
the price of the Company's Common Stock. See " -- Possible Volatility of Stock
Price."
Integration of DataWorks and DCD Operations. The Company acquired DCD
in September 1996. The process of rationalizing management services,
administrative organizations, facilities, management information systems and
other aspects of operations, while managing a larger and geographically expanded
entity, presents a significant challenge to the management of DataWorks. There
can be no assurance that the integration process will be successful or that the
anticipated benefits of the business combination will be fully realized. The
dedication of management resources to such integration may detract attention
from the day-to-day business of the Company. The difficulties of integration may
be increased by the necessity of coordinating geographically separated
organizations, integrating personnel with disparate business backgrounds and
combining different corporate cultures. Integrating the two companies has caused
the Company to incur certain additional expenses, and there can be no assurance
that there will not continue to be substantial costs associated with the
integration process, that such activities will not result in a decrease in
revenues or that there will not be other material adverse effects of these
integration efforts. Such effects could materially reduce the earnings of the
Company. The Company incurred acquisition and related costs totaling $3.7
million in the third quarter of 1996. There can be no assurance that DataWorks
will not incur additional charges in the subsequent quarters to reflect costs
associated with the acquisition.
Competition. The business information systems industry is intensely
competitive, rapidly changing and significantly affected by new product
offerings and other market activities. A number of companies offer products
similar to the Company's products, which are directed at the market for ERP
systems. Many of the Company's existing competitors, as well as a number of
potential competitors, have more established and larger marketing and sales
organizations, significantly greater financial and technical resources and a
larger installed base of customers
10.
<PAGE> 10
than the Company. In addition, potential customers that have a large installed
base of legacy systems may resist committing the time and resources necessary to
convert to an open systems-based client/server software product. The Company has
no proprietary barriers to entry which would limit competitors from developing
similar products or selling competing products in the Company's markets.
Accordingly, there can be no assurance that such competitors will not offer or
develop products that are superior to the Company's products or that achieve
greater market acceptance. In addition, suppliers of relational database
management systems ("RDBMS") or companies that develop management information
software applications for large multinational manufacturers are beginning to
market to the upper tier of the mid-range market targeted by the Company or
otherwise develop applications that compete effectively in the Company's
markets. Furthermore, the Company intends to focus its marketing and product
development efforts increasingly toward the upper end of its target market,
which could result in increased competition. As a result, competition (including
price competition) is likely to increase substantially, which may result in
price reductions and loss of market share. In addition, potential customers may
increasingly demand that ERP systems incorporate certain popular RDBMS software
not currently integrated into certain of DataWorks' product offerings that are
offered by its competitors. As the client/server computing market expands, a
large number of companies, some with significantly greater resources than the
Company, may enter the market or increase their market share by acquiring or
entering into alliances with competitors of the Company. There can be no
assurance that the Company will be able to compete successfully against its
competitors or that the competitive pressures faced by the Company will not
adversely affect its financial performance.
The Company has a large number of competitors that vary in size,
primary computer platforms and overall product scope. Within its market, the
primary competition comes from independent software vendors in four distinct
groups including (i) large multinational system developers in the upper tier of
the Company's mid-range market, including Baan Company, Oracle Corporation
("Oracle") and qad, Inc., (ii) companies offering high levels of functionality
on the AS/400 platform such as System Software Associates, Inc. and J.D. Edwards
Company, (iii) traditional mid-range market sector firms such as ROI Systems and
Symix Systems, Inc., and (iv) lower priced PC network-based offerings from
companies such as Fourth Shift Corporation, Lilly Software Associates and Macola
Software, Inc. There is also a large number of regional manufacturing software
suppliers that leverage as competitive advantages their concentrated local
support, reputation and, typically, lower price.
The Company's principal market is highly fragmented and consists of a
few large multinational suppliers and a much larger number of small regional
competitors. The Company believes that its industry will experience
consolidation as business information systems become more complex and as more
manufacturers adopt sophisticated business information systems, forcing smaller
companies in the industry to specialize or merge with their competitors. In
order to compete effectively in the broad markets which the Company presently
targets, the Company will need to continue to grow and attain sufficient size to
ensure that it can develop new products on a timely basis in response to
evolving technology and new customer demands and can sell such products to a
variety of manufacturing industries worldwide. No assurance can be given that
the Company will be able to grow sufficiently to enable it to compete
effectively. The Company
11.
<PAGE> 11
anticipates that a significant source of future competition may be from larger
manufacturing software companies that may tailor their products for the
mid-range market. Only a few of the larger and better capitalized software
systems companies currently compete in the Company's targeted market. There can
be no assurance that such companies will not develop products that are superior
to the Company's products or that achieve greater market acceptance.
Ability to Recruit Sales, Service and Implementation Personnel. The
ability to achieve anticipated revenues is substantially dependent on the
ability of the Company to attract on a timely basis and retain skilled
personnel, especially sales, service and implementation personnel. In addition,
the Company believes that its future success will depend in large part on its
ability to attract and retain highly skilled technical, managerial, marketing
and professional services personnel to ensure the quality of products and
services provided to its customers. Competition for such personnel, in
particular for product development, sales and implementation personnel, is
intense, and the Company competes in the market for such personnel against
numerous companies, including larger, more established companies with
significantly greater financial resources than the Company. There can be no
assurance that the Company will be successful in attracting and retaining
skilled personnel. The Company's inability to attract and retain qualified
employees could have a material adverse effect on the Company's business and
operations. See " -- Dependence on Key Employees" and " -- Rapid Technological
Change and New Products."
Introduction of ECS System. The Company currently anticipates
commencing customer shipments of its ECS system in late 1997. However, there can
be no assurance that the Company will commence such shipments in 1997, or at
all. Furthermore, the Company has limited experience in selling products to
customers in the upper tier of the mid-range manufacturing market and
anticipates that selling products to such customers will result in a longer
sales cycle and will require a different strategy than that employed by the
Company in selling products to customers in the mid-tier market. For example, as
part of its upper tier marketing strategy, the Company is exploring potential
relationships with third party integrators to facilitate implementation of the
ECS system. There can be no assurance that any such relationships will be formed
or, if formed, will prove beneficial to the Company. Accordingly, even if
customer shipments of the ECS system are timely commenced, there can be no
assurance that the Company will be successful in effectively marketing the ECS
system or that the ECS system will achieve market acceptance. See " -- Rapid
Technological Change and New Products."
Management of Growth. The Company's business has grown rapidly, both
internally and through acquisitions, with total revenues increasing to $42.3
million for the nine months ended September 30, 1996 from $29.2 million in the
nine months ended September 30, 1995. There can be no assurance that the Company
will be able to manage its recent growth and assimilate its new employees and
products successfully. To manage its growth effectively, the Company will be
required to expand, train and manage its employee base, enhance its operating
and financial systems, and effectively expand its product line. If the Company
continues to grow, there can be no assurance that the management skills and
systems currently in place will be adequate or that the Company will be able to
manage any additional growth effectively. See " -- Integration of DataWorks and
DCD Operations."
12.
<PAGE> 12
Dependence on Key Employees. The Company's continued success depends to
a significant extent upon its ability to retain certain key employees, including
Stuart W. Clifton, Norman R. Farquhar, Mark S. Howlett and Robert W. Brandel.
The loss of certain key employees or the Company's inability to attract and
retain other qualified employees could have a material adverse effect on the
Company's business and operations. See " -- Ability to Recruit Sales, Service
and Implementation Personnel," " -- Rapid Technological Change and New
Products."
Rapid Technological Change and New Products. The market for the
Company's software products is characterized by rapid technological advances,
evolving industry standards, changes in end-user requirements and frequent new
product introductions and enhancements. The introduction of products embodying
new technologies, such as the planned introduction of the ECS system, and the
emergence of new industry standards, could render the Company's existing
products and products currently under development obsolete and unmarketable.
Accordingly, the Company's future success will depend upon its ability to
enhance its current products and develop and introduce new products that keep
pace with technological developments, satisfy varying end-user requirements and
achieve market acceptance. Any failure by the Company to anticipate or respond
adequately to technological developments or end-user requirements, or any
significant delays in product development or introduction, could damage the
Company's competitive position and have an adverse effect on revenues. There can
be no assurance that the Company will be successful in developing and marketing
new products, including the ECS system, or product enhancements on a timely
basis or that the Company will not experience significant delays in the future,
which could have a material adverse effect on the Company's business and
operations. In addition, there can be no assurance that new products or product
enhancements developed by the Company will achieve market acceptance. The
Company may need to increase the size of its product development staff in the
near term to meet these challenges. There can be no assurance that the Company
will be successful in hiring and training an adequate number of qualified
product development personnel to meet its needs. See " -- Introduction of ECS
System," " -- Dependence on Key Employees."
Software programs as complex as those offered by the Company may
contain undetected errors or "bugs" when first introduced or as new versions are
released that, despite testing by the Company, are discovered only after a
product has been installed and used by customers. There can be no assurance that
errors will not be found in future releases of the Company's software, or that
any such errors will not impair the market acceptance of these products and
adversely affect operating results. Problems encountered by customers installing
and implementing new releases or with the performance of the Company's products
could have a material adverse effect on the Company's business and operations.
Dependence on Manufacturing Industry. The Company's business depends
substantially upon the capital expenditures of mid-range discrete manufacturers,
which in part depend upon the demand for such manufacturers' products. A
recession or other adverse events affecting the manufacturing industry in the
United States or other markets served by the Company could affect such demand,
forcing manufacturers in the Company's target markets to curtail or postpone
capital expenditures on business information systems. Any such change in the
amount or timing
13.
<PAGE> 13
of capital expenditures in its target markets could have a material adverse
effect on the Company's business and operations.
Dependence on Third Party Software and Hardware. Most of the Company's
products incorporate and use software products and computer hardware and
equipment developed by other entities. The relational database management
systems currently used in the Company's products are those which the Company
believes are best suited for the particular applications required by the
mid-range discrete manufacturers. These RDBMS have been developed by UniData,
Inc. ("UniData"), VMark Software, Inc. ("VMark"), Progress Software Corporation
and Microsoft Corporation ("Microsoft"). The operating systems on which the
Company's products can function (UNIX, SCO-UNIX, UnixWare, VMS and Microsoft NT)
have been developed or are owned by Novell Corporation ("Novell"), Digital
Equipment Corporation ("DEC") and Microsoft. The computer hardware and related
equipment sold as part of the Company's turnkey systems are manufactured by
Hewlett-Packard Company ("Hewlett-Packard"), International Business Machines
Corporation ("IBM"), DEC and others. There can be no assurance that all of these
entities will remain in business, that such entities will continue to support
these product lines, that their product lines will remain viable or that these
products will otherwise continue to be available to the Company. If any of these
entities ceases to do business or abandons or fails to enhance a particular
product line, the Company may need to seek other suppliers. This could have a
material adverse effect on the Company's business and operations. In addition,
there can be no assurance that the Company's current suppliers will not
significantly alter their pricing in a manner adverse to the Company.
Intellectual Property and Proprietary Rights. The Company relies on a
combination of copyright, trademark and trade secret laws, employee and
third-party nondisclosure agreements and other industry standard methods for
protecting ownership of its proprietary software. There can be no assurance,
however, that, in spite of these precautions, an unauthorized third party will
not copy or reverse-engineer certain portions of the Company's products or
obtain and use information that the Company regards as proprietary. The Company
provides the source code for its application software under licenses to its
customers to enable them to customize the software to meet particular
requirements. Although the Company's source code license contains
confidentiality and nondisclosure provisions, there can be no assurance that
such customers will take adequate precautions to protect the Company's source
code or other confidential information. In addition, the laws of some foreign
countries do not protect the Company's proprietary rights to the same extent as
do the laws of the United States. There can be no assurance that the mechanisms
used by the Company to protect its software will be adequate or that the
Company's competitors will not independently develop software products that are
substantially equivalent or superior to the Company's software products.
The Company has and may from time to time receive notices from third
parties claiming that the Company's products infringe upon third party
proprietary rights. The Company expects that, as the number of software products
in the industry increases and the functionality of these products further
overlaps, software products will increasingly be subject to such claims. Any
such claim, with or without merit, could result in costly litigation and require
the Company to
14.
<PAGE> 14
enter into royalty or licensing arrangements. Such royalty or license
arrangements, if required, may not be available, if at all, on terms acceptable
to the Company.
Product Liability. Because the Company markets and sells its software
products on a turnkey basis, which includes rendering professional consulting
services, the Company incurs significant risks of professional and other
liability. No assurance can be given that the limitations of liability set forth
in the Company's license agreements or other contracts would be enforceable or
would otherwise protect the Company from liability for damages to a customer
resulting from a defect in one of the Company's products or arising as a result
of professional services rendered by the Company. Such a claim, if successful
and of sufficient magnitude, could have a material adverse effect on the
Company's business and operations.
Possible Volatility of Stock Price. The market price of the Company's
Common Stock has fluctuated since its initial public offering in October 1995.
The price of the Company's stock may be subject to significant fluctuations in
the future in response to variations in quarterly operating results of the
Company, announcements of new products by the Company or by its competitors, and
general trends in the software industry, as well as fluctuations in the stock
market that are unrelated to the operating performance of particular companies.
Also, the Company's revenues or operating results in future quarters may be
below the expectations of public market securities analysts and investors, which
could cause the price of the Company's stock to decline, perhaps substantially.
Such stock price and market fluctuations could adversely affect the Company.
Further, there can be no assurance that the market price of the Company's Common
Stock will not decline below the public offering price set forth on the cover
page of this Prospectus.
Effect of Certain Charter Provisions. The Company's Board of Directors has the
authority to issue up to 5,000,000 shares of Preferred Stock and to determine
the price, rights, preferences and privileges of those shares without any
further vote or action by the shareholders. The rights of the holders of Common
Stock will be subject to, and may be adversely affected by, the rights of the
holders of any Preferred Stock that may be issued in the future. The issuance of
Preferred Stock, while providing flexibility in connection with possible
acquisitions and other corporate purposes, could have the effect of making it
more difficult for a third party to acquire a majority of the outstanding voting
stock of the Company. The Company has no present plan to issue any shares of
Preferred Stock.
15.
<PAGE> 15
SELLING SHAREHOLDER
The following table sets forth the name of the Selling Shareholder, the
number of shares of Common Stock owned beneficially by such Selling Shareholder
as of February 7, 1997 and the number of which may be offered pursuant to this
Prospectus. This information is based upon information provided by the Selling
Shareholder. Because the Selling Shareholder may offer all, some or none of his
Common Stock, no definitive estimate as to the number of shares thereof that
will be held by the Selling Shareholder after such offering can be provided.
The Selling Shareholder represented in the agreement under which he
acquired the shares that he was acquiring the Shares for investment and with no
present intention of distributing the Shares. In recognition of the fact that
the Selling Shareholder may wish to be legally permitted to sell the Shares
when each deems appropriate, the Company has filed with the Commission a
Registration Statement on Form S-3, which this Prospectus forms a part, with
respect to, among other things, the resale of the Shares from time at prevailing
prices in the over-the-counter market or in privately-negotiated transactions
and has agreed to prepare and file such amendments and supplements to the
Registration Statement as may be necessary to keep the Registration Statement
effective until all Shares offered hereby have been sold pursuant thereto or
until such Shares are no longer, by reason of Rule 144 under the Securities Act
or any other rule of similar effect, required to be registered for the sale
thereof by the Selling Shareholder.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED SHARES BENEFICIALLY OWNED
PRIOR TO OFFERING (1) NUMBER OF SHARES AFTER OFFERING (1)(3)
------------------------- BEING -------------------------
SELLING SHAREHOLDER NUMBER PERCENT(2) OFFERED NUMBER PERCENT
------------------- -------- ---------- ------- ------ -------
<S> <C> <C> <C> <C> <C>
Robert W. Brandel(4) 667,185 6.69% 250,000 417,185 4.18%
</TABLE>
- ----------------
(1) Unless otherwise indicated below, the person named in the table has
sole voting and investment power with respect to all shares
beneficially owned by him, subject to community property laws where
applicable.
(2) Applicable percentage of ownership is based on 9,966,921 shares of
Common Stock outstanding on February 7, 1997, adjusted as required by
rules promulgated by the Commission.
(3) Assumes the sale of all shares offered hereby, should the Selling
Stockholder elect to do so.
(4) Mr. Brandel has served as Vice President, General Manager of DCD and as
executive officer of the Company since the Company's acquisition of
DCD.
16.
<PAGE> 16
PLAN OF DISTRIBUTION
The Company has been advised that the Selling Shareholder may sell
Shares from time to time in transactions on the Nasdaq National Market, in
privately-negotiated transactions or a combination of such methods of sale, at
fixed prices which may be changed, at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at negotiated
prices. The Selling Shareholder may effect such transactions by selling the
Shares to or through broker-dealers, and such broker-dealers may receive
compensation in the form of discounts, concessions or commissions from the
Selling Shareholder or the purchasers of the Shares for whom such broker-dealers
may act as agent or to whom they sell as principal, or both (which compensation
to a particular broker-dealer might be in excess of customary commission).
The Selling Shareholder and any broker-dealers who act in connection
with the sale of Shares hereunder may be deemed to be "underwriters" as that
term is defined in the Securities Act of 1933, as amended (the "Securities
Act"), and any commissions received by them and profit on any resale of the
Shares as principal might be deemed to be underwriting discounts and commissions
under the Securities Act.
LEGAL MATTERS
The validity of the issuance of the Common Stock offered hereby will be
passed upon for the Company by Cooley Godward LLP, San Diego, California
("Cooley Godward").
17.
<PAGE> 17
EXPERTS
The consolidated financial statements of DataWorks Corporation at
December 31, 1995 and 1994 and for each of the three years in the period ended
December 31, 1995, incorporated by reference from the Registration Statement
(Form S-3 No. 333-15825), have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report which is incorporated herein by reference
which, as to each of the three years in the period ended December 31, 1995, is
based in part on the report of Price Waterhouse LLP, independent accountants.
The financial statements referred to above, have been so incorporated in
reliance upon such reports given upon the authority of such firms as experts in
accounting and auditing.
18.
<PAGE> 18
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth all expenses payable by the Registrant
in connection with the sale of the Common Stock being registered. All the
amounts shown are estimates except for the registration fee.
<TABLE>
<S> <C>
SEC registration fee ............................... $ 1,477.27
Legal fees and expenses ............................ 5,000
Accounting fees and expenses ....................... 3,000
Printing and Engraving ............................. 1,200
----------
Total ................................... $10,677.27
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS
The Registrant's Amended and Restated Articles of Incorporation include
provisions to eliminate the personal liability of its directors to the fullest
extent permitted by Section 204(a)(10) under the General Corporation Law of
California (the "California Law"). In addition, the Registrant's Bylaws include
provisions that require the Registrant to indemnify its directors and executive
officers to the fullest extent permitted by Section 317 of the California Law,
including circumstances in which indemnification is otherwise discretionary. The
Bylaws also provide the Registrant with the authority to indemnify its other
officers, employees and other agents as set forth in the California Law.
Pursuant to Section 317 of the California Law, a corporation generally has the
power to indemnify its present and former directors, officers, employees and
agents against expenses incurred by them in connection with any suit to which
they are, or are threatened to be made, a party by reason of their serving in
such positions so long as they acted in good faith and in a manner they
reasonably believed to be in the best interests of a corporation, and with
respect to any criminal action, so long as they had no reasonable cause to
believe their conduct was unlawful. The Registrant believes that these
provisions are necessary to attract and retain qualified persons as directors
and officers. These provisions do not eliminate liability for breach of the
director's duty of loyalty to the Registrant or its shareholders, for acts or
omissions involving intentional misconduct or knowing and culpable violations of
law, for acts or omissions that the director believes to be contrary to the best
interests of the Company or its shareholders or that involve the absence of good
faith on the part of the director, for any transaction from which the director
derived an improper personal benefit, for acts or omissions involving a reckless
disregard for the director's duty to the Company or its shareholders when the
director was aware or should have been aware of a risk of serious injury to the
Company or its shareholders, for acts or omissions that constitute an unexcused
pattern of inattention that amounts to an abdication of the director's duty to
the Company or its shareholders, for improper distributions to shareholders and
loans to directors and officers, or for acts or omissions by the director as an
officer.
II-1
<PAGE> 19
The Registrant has entered into agreements with its directors and
executive officers that require the Registrant to indemnify such persons against
expenses, judgments, fines, settlements and other amounts actually and
reasonably incurred (including expenses of a derivative action) in connection
with any proceeding, whether actual or threatened, to which any such person may
be made a party by reason of the fact that such person is or was a director or
officer of the Registrant or any of its affiliated enterprises, provided such
person acted in good faith and in a manner such person reasonably believed to be
in or not opposed to the best interests of the Registrant and, with respect to
any criminal proceeding, had no reasonable cause to believe his or her conduct
was unlawful. The indemnification agreements also set forth certain procedures
that will apply in the event of a claim for indemnification thereunder.
At present, there is no pending litigation or proceeding involving a
Director or officer of the Registrant as to which indemnification is being
sought nor is the Registrant aware of any threatened litigation that may result
in claims for indemnification by any officer or Director.
The Registrant has an insurance policy covering the officers and
Directors of the Registrant with respect to certain liabilities, including
liabilities arising under the Securities Act or otherwise.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------ -----------------------
<S> <C>
3.1 Registrant's Amended and Restated Certificate of Incorporation.(1)
3.3 Registrant's Amended and Restated Bylaws.(1)
5.1 Opinion of Cooley Godward LLP.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Price Waterhouse LLP.
23.3 Consent of Cooley Godward LLP. Reference is made to Exhibit 5.1.
24.1 Power of Attorney. Reference is made to page II-5.
</TABLE>
- ------------------
(1) Filed as an exhibit to Registrant's Registration Statement on Form S-1
(No. 33 -72380) or amendments thereto and incorporated herein by
reference.
(2) Filed as an exhibit to Registrant's Registration Statement on Form S-1
(No. 33 -63906) or amendments thereto and incorporated herein by
reference.
ITEM 17. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling persons of
the Registrant pursuant to the provisions described in Item 15 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
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
II-2
<PAGE> 20
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 Act and will be governed by the final
adjudication of such issue.
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:
(i) to include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) 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;
(iii) 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 (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by
these clauses is contained in periodic reports filed by the Registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act
of 1934 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
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; and
(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.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
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.
II-3
<PAGE> 21
The undersigned Registrant 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 the registration statement in reliance upon
Rule 430A and contained in the 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 the registration statement
as of the time it was declared effective; and
(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-4
<PAGE> 22
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Diego, State of California, on the 10th day of
February, 1997.
DATAWORKS CORPORATION
By: /s/ Stuart W. Clifton
_________________________________________________
Stuart W. Clifton
Chief Executive Officer, President and
Chairman of the Board
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Stuart W. Clifton and Norman R. Farquhar,
and each of them, as his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for the undersigned and in his name,
place and stead, in any and all capacities, to sign any or all amendments
(including post-effective amendments) to the Registration Statement and to file
the same, with all exhibits thereto, and all documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully 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, each acting alone, or his substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
II-5
<PAGE> 23
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/Stuart W. Clifton President, Chief Executive Officer, February 10, 1997
_____________________________ Chairman of the Board and Director
Stuart W. Clifton (Principal Executive Officer)
/s/Norman R. Farquhar Executive Vice President, Chief February 10, 1997
_____________________________ Financial Officer and Director
Norman R. Farquhar (Principal Financial Officer)
/s/Rick E. Russo Vice President, Finance and Secretary February 10, 1997
_____________________________ (Principal Accounting Officer)
Rick E. Russo
/s/Nathan W. Bell Director February 10, 1997
_____________________________
Nathan W. Bell
/s/Finis F. Conner Director February 10, 1997
_____________________________
Finis F. Conner
/s/Ronald S. Parker Director February 10, 1997
_____________________________
Ronald S. Parker
/s/Anthony N. Domit Director February 10, 1997
_____________________________
Anthony N. Domit
/s/Roy Thiele-Sardina Director February 10, 1997
_____________________________
Roy Thiele-Sardina
</TABLE>
II-6
<PAGE> 1
EXHIBIT 5.1
ATTORNEYS AT LAW San Francisco, CA
415 693-2000
4365 Executive Drive Palo Alto, CA
Suite 1100 415 843-5000
San Diego, CA
92121-2128 Menlo Park, CA
Main 619 550-6000 415 843-5000
Fax 619 453-3555
Boulder, CO
303 546-4000
Denver, CO
303 606-4800
http://www.cooley.com
FREDERICK T. MUTO
619 550-6010
[email protected]
February 10, 1997
DataWorks Corporation
5910 Pacific Center Blvd.
San Diego, CA 92121
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in connection
with the filing by DataWorks Corporation (the "Company") of a Registration
Statement on Form S-3 (the "Registration Statement") with the Securities and
Exchange Commission (the "Commission") covering the offering of 250,000 shares
of the Company's Common Stock to be sold by a certain shareholder, as described
in the Registration Statement (the "Common Stock").
In connection with this opinion, we have examined and relied upon the
Registration Statement, the Company's Amended and Restated Articles of
Incorporation and Amended and Restated Bylaws and the originals or copies
certified to our satisfaction, of such records, documents, certificates,
memoranda and other instruments as in our judgment are necessary or appropriate
to enable us to render the opinion expressed below.
On the basis of the foregoing, and in reliance thereon, we are of the opinion
that the Common Stock is validly issued, fully paid and nonassessable.
We consent to the reference to our firm under the caption "Legal Matters" in
the Prospectus included in the Registration Statement and to the filing of this
opinion as an exhibit to the Registration Statement.
Very truly yours,
COOLEY GODWARD LLP
Frederick T. Muto
<PAGE> 1
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of DataWorks
Corporation for the registration of 250,000 shares of its common stock and to
the incorporation by reference therein of our report dated February 1, 1996,
with respect to the consolidated financial statements of DataWorks Corporation
for the year ended December 31, 1995, included in the Registration Statement
(Form S-3 No. 333-15825) filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
San Diego, California
February 5, 1997
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of DataWorks
Corporation of our report dated April 5, 1996 relating to the financial
statements of DCD Corporation appearing on page F-21 of the DataWorks
Corporation on Form S-4 (No. 333-11741). We also consent to the reference to
us under the heading "Experts" in such Prospectus.
PRICE WATERHOUSE LLP
Minneapolis, Minnesota
February 7, 1997
