<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 16, 1997
REGISTRATION NO. 333-36967
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
SIEBEL SYSTEMS, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 7372 94-3187233
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation Classification Code Number) Identification
or organization) Number)
1855 SOUTH GRANT STREET
SAN MATEO, CALIFORNIA 94402
(650) 295-5000
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
--------------------------
THOMAS M. SIEBEL
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
SIEBEL SYSTEMS, INC.
1855 SOUTH GRANT STREET
SAN MATEO, CALIFORNIA 94402
(650) 295-5000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
--------------------------
COPIES TO:
ERIC C. JENSEN, ESQ.
COOLEY GODWARD LLP
3000 SAND HILL ROAD, BLDG. 3, SUITE 230
MENLO PARK, CALIFORNIA 94025-7116
843-5000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the Registration Statement becomes effective.
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, please 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 number of the earlier effective
registration statement for the same offering. [_]
If this Form is filed in a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registrations statement number of the earlier effective registration
statement of the same offering. [_]
If delivery of this prospectus is expected to be made pursuant to rule 434,
please check the following box. [_]
--------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
===================================================================================================================
PROPOSED PROPOSED
TITLE OF EACH CLASS OF AMOUNT MAXIMUM OFFERING MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED TO BE REGISTERED PRICE PER UNIT(1) OFFERING PRICE(1) REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------------------
Common Stock, $.001 par value 346,379 $40.25 $13,941,754.75 $4,225
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) under the Securities Act of 1933, based on the
average of the high and low prices of the Company's Common Stock as
reported on the Nasdaq National Market on September 24, 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 WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
1
<PAGE>
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
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.
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS SUBJECT TO COMPLETION, DATED OCTOBER 16, 1997
346,379 SHARES
SIEBEL SYSTEMS, INC.
COMMON STOCK
---------------------
This Prospectus covers 346,379 shares (the "Shares") of the Common Stock,
$.001 par value ("Common Stock"), of Siebel Systems, Inc., a Delaware
corporation ("Siebel" or the "Company"), which are being offered and sold by
certain stockholders of the Company (the "Selling Stockholders"). The Selling
Stockholders, directly or through agents, broker-dealers or underwriters, may
sell the Common Stock offered hereby from time to time on terms to be determined
at the time of sale, in transactions on the Nasdaq National Market or in
privately negotiated transactions or in a combination of such methods of sale,
at fixed prices related to such prevailing prices or at negotiated prices. The
Selling Stockholders may effect such transactions by selling Shares to or
through broker-dealers, and such broker-dealers may receive compensation in the
form of discounts, concessions or commissions from the Selling Stockholders or
the purchasers of the Shares for whom such broker-dealers may act as agents or
to whom they sell as principal or both (which compensation to a particular
broker-dealer may be in excess of customary commissions). The Company will not
receive any proceeds from the sale of Shares by the Selling Stockholders. See
"Selling Stockholders" and "Plan of Distribution."
The Common Stock of the Company is quoted on the Nasdaq National Market
under the symbol "SEBL." Application has been made to list the Shares on the
Nasdaq National Market. The last reported sales price of the Common Stock on the
Nasdaq National Market on October 15, 1997 was $43.675 per share.
---------------------
THIS OFFERING INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS" ON PAGE 6.
---------------------
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.
No underwriting commissions or discounts will be paid by the Company in
connection with this offering. Estimated expenses payable by the Company in
connection with this offering are estimated to be $38,000. The aggregate
proceeds to the Selling Stockholders from the Common Stock will be the purchase
price of the Common Stock sold less the aggregate agents' commissions and
underwriters' discounts, if any, and other expenses of issuance and distribution
not borne by the Company. See "Plan of Distribution."
The Selling Stockholders and any agents, broker-dealers or underwriters
that participate in the distribution of the Common Stock may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, as amended (the
"Act"), and any commission received by them and any profit on the resale of the
Common Stock purchased by them may be deemed to be underwriting discounts or
commissions under the Act. The Company has agreed to indemnify the Selling
Stockholders and certain other persons against certain liabilities, including
liabilities under the Act.
____________, _______
2
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files annual and quarterly reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission").
Such reports, proxy statements and other information may be inspected and copied
at the Commission's Public Reference Section, 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, as well as at the Commission's Regional Offices at 7
World Trade Center, 13th Floor, New York, New York 10048; and 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such material can
be obtained at prescribed rates from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. The Commission
also makes electronic filings publicly available on the Internet. The
Commission's Internet address is http://www.sec.gov. The Commission's Web site
also contains reports, proxy and information statements, and other information
regarding the Company that has been filed electronically with the Commission.
The Common Stock of the Company is quoted on the Nasdaq National Market.
Reports and other information concerning the Company may be inspected at the
National Association of Securities Dealers, Inc. at 1735 K Street, N.W.,
Washington, D.C. 20006.
ADDITIONAL INFORMATION
A registration statement on Form S-3 with respect to the Common Stock
offered hereby (the "Registration Statement") has been filed with the Commission
under the Act. This Prospectus does not contain all of the information
contained in such Registration Statement and the exhibits and schedules thereto,
certain portions of which have been omitted pursuant to 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. Statements
contained in this Prospectus regarding the contents of any contract or any other
documents are not necessarily complete and, in each instance, reference is
hereby made to the copy of such contract or document filed as an exhibit to the
Registration Statement. The Registration Statement, including exhibits thereto,
may be inspected without charge at the Commission's principal office in
Washington, D.C., and copies of all or any part thereof may be obtained from the
Public Reference Section, Securities and Exchange Commission, Washington, D.C.,
20549, upon payment of the prescribed fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, filed with the Commission under the Exchange Act
(File No. 0-20725), are hereby incorporated by reference into this Prospectus:
a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, filed on or about March 7, 1997, including all material
incorporated by reference therein;
b) The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1997, filed on or about May 14, 1997, including all material
incorporated by reference therein;
c) The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended June 30, 1997, filed on or about August 12, 1997, including all material
incorporated by reference therein;
d) The Company's Current Report on Form 8-K, filed on or about October 16,
1997, including all material incorporated by reference therein; and
e) The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A.
All documents filed by the Company pursuant to Sections 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
herein and to be a part hereof from the date of filing of such documents. Any
statement contained in this Prospectus or in a 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 subsequently-filed document which also is or is
deemed to be incorporated by reference herein modifies or
3.
<PAGE>
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so 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
incorporated by reference herein (not including exhibits to such documents
unless such exhibits are specifically incorporated by reference herein or into
such documents). Such request may be directed to: Investor Relations, Siebel
Systems, Inc., 1855 South Grant Street, San Mateo, California 94402.
The discussions in this Prospectus and the documents incorporated by
--------------------------------------------------------------------
reference herein contain forward-looking statements that involve risks and
- --------------------------------------------------------------------------
uncertainties. The Company's actual results could differ materially from those
- -------------------------------------------------------------------------------
discussed herein and in such incorporated documents. Factors that could cause
- ------------------------------------------------------------------------------
or contribute to such differences include, but are not limited to, those
- ------------------------------------------------------------------------
discussed under the heading "Risk Factors" herein, as well as those discussed in
- --------------------------------------------------------------------------------
the documents incorporated herein by reference.
- ----------------------------------------------
4.
<PAGE>
THE COMPANY
Siebel is an industry leading provider of enterprise-class sales, marketing
and customer service information software systems. The Company designs,
develops, markets, and supports Siebel Enterprise Applications, a leading
Internet-enabled, object oriented client/server application software product
family designed to meet the customer information system requirements of even the
largest multi-national organizations.
The Siebel Enterprise Applications are comprised of a broad range of
advanced client/server application products designed to allow corporations to
deploy comprehensive customer information systems, product information systems,
competitive information systems, and decision support systems on a global basis.
The Company's products provide support for multiple languages and multiple
currencies with support for a number of frequently interdependent distribution
channels, including direct field sales, telesales, telemarketing, distribution,
retail and Internet-based selling.
The Siebel Enterprise Applications are built upon a modern technology
foundation including intranet and Internet enablement, client/server, object
oriented programming, 32-bit processing, OLE 2 automation, relational database
support for Oracle, Sybase, Informix and Microsoft and system support for
Windows 95, Windows NT, and UNIX. The Siebel Enterprise Applications are
designed to scale to meet the needs of large organizations deploying thousands
of sales, marketing and customer service professionals with very large data
storage and retrieval requirements. The Siebel Enterprise Applications are
designed to be comprehensive in their scope of functionality and are highly
configurable, allowing for highly customized industry-specific and company-
specific system deployments.
The Company's objective is to establish and maintain a global market
leadership position in the sales, marketing and customer service information
systems market. The Company's strategy is to provide high-end enterprise
client/server sales and marketing applications in a broad range of industries,
extend its advanced technology position, achieve universally successful customer
implementations of Siebel Enterprise Applications, expand its global sales and
support capacity, and continue to leverage strategic alignment with leading
third-party technology providers, system integrators, and distributors.
The Company's principal executive offices are located at 1855 S. Grant Street,
San Mateo, CA 94402. Its telephone number is (650) 295-5000. Its e-mail address
is [email protected]. The Company maintains an Internet home page.
5.
<PAGE>
RISK FACTORS
In addition to the other information in this Prospectus, the following
----------------------------------------------------------------------
factors should be considered carefully in evaluating an investment in the Common
- --------------------------------------------------------------------------------
Stock.
- -----
Limited Operating History. The Company commenced operations in July 1993
-------------------------
and shipped version 1.0 of Siebel Sales Enterprise in April 1995 and version 2.2
of Siebel Service Enterprise in December 1996. The Company has only a limited
operating history, and its prospects must be evaluated in light of the risks and
uncertainties encountered by a company in its early stage of development. The
new and evolving markets in which the Company operates make these risks and
uncertainties particularly pronounced. To address these risks, the Company
must, among other things, successfully implement its sales and marketing
strategy, respond to competitive developments, attract, retain, and motivate
qualified personnel, continue to develop and upgrade its products and
technologies more rapidly than its competitors, and commercialize its products
and services incorporating these enhanced technologies. The Company expects to
continue to devote substantial resources to its product development and sales
and customer support and, as a result, will need to generate significant
quarterly revenues to achieve and maintain profitability. The Company's limited
operating history makes it difficult to predict accurately future operating
results. There can be no assurance that any of the Company's business
strategies will be successful or the Company will be profitable in any future
quarter or period.
Uncertainty of Future Operating Results; Fluctuations in Quarterly
------------------------------------------------------------------
Operating Results. Prior growth rates in the Company's revenue and net income
- -----------------
should not be considered indicative of future operating results. Future
operating results will depend upon many factors, including the demand for the
Company's products, the level of product and price competition, the length of
the Company's sales cycle, the size and timing of individual license
transactions, the delay or deferral of customer implementations, the Company's
success in expanding its customer support organization, direct sales force and
indirect distribution channels, the timing of new product introductions and
product enhancements, the mix of products and services sold, levels of
international sales, activities of and acquisitions by competitors, the timing
of new hires, changes in foreign currency exchange rates and the ability of the
Company to develop and market new products and control costs. In addition, the
decision to implement a sales and marketing information system is discretionary,
involves a significant commitment of customer resources and is subject to the
budget cycles of the Company's customers. The Company's sales generally reflect
a relatively high amount of revenue per order. The loss or delay of individual
orders, therefore, would have a significant impact on the revenue and quarterly
results of the Company. The timing of license revenue is difficult to predict
because of the length and variability of the Company's sales cycle, which has
ranged to date from two to eighteen months from initial contact to the execution
of a license agreement. The Company's operating expenses are based on
anticipated revenue trends and, because a high percentage of these 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 operating losses. To the extent
such expenses precede, or are not subsequently followed by, increased revenues,
the Company's operating results would be materially and adversely affected. To
date, the Company has not experienced significant seasonality of operating
results. The Company expects that future revenues for any period may be
affected by the fiscal or quarterly budget cycles of its customers. As a result
of these and other 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. It is likely that the Company's
future quarterly operating results from time to time will not meet the
expectations of market analysis or investors, which would likely have an adverse
effect on the price of the Company's Common Stock. In addition, fluctuations in
operating results may also result in volatility in the price of the Company's
Common Stock.
Reliance on Andersen Consulting and Other Relationships; Dependence on
----------------------------------------------------------------------
System Integrators. The Company has established strategic relationships with a
- ------------------
number of organizations that it believes are important to its worldwide sales,
marketing and support activities and the implementation of its products. The
Company believes that its relationships with such organizations provide
marketing and sales opportunities for the Company's direct sales force and
expand the distribution of its products. These relationships also assist it in
keeping pace with the technological and marketing developments of major software
vendors, and, in certain instances, provide it with technical assistance for its
product development efforts. In particular, the Company has established a non-
6.
<PAGE>
exclusive strategic relationship with Andersen Consulting, a principal
stockholder of the Company. To date, a significant portion of the revenues of
the Company were derived from customers for which Andersen Consulting had been
engaged to provide system integration services. Any deterioration of the
Company's relationship with Andersen Consulting could have a material adverse
effect on the Company's business, financial condition and results of operations.
In addition, the Company has relationships with Itochu Corporation and Itochu
Techno-Science Corporation, among others. The failure by the Company to
maintain its existing relationships, or to establish new relationships in the
future, could have a material adverse effect on the Company's business, results
of operations and financial condition. The Company's customers and potential
customers frequently rely on Andersen Consulting, as well as other third-party
system integrators to develop, deploy and/or manage Siebel Enterprise
Applications. If the Company is unable to train adequately a sufficient number
of system integrators or, if for any reason such integrators do not have or
devote the resources necessary to facilitate implementation of the Company's
products or if such integrators adopt a product or technology other than Siebel
Enterprise Applications, the Company's business, operating results and financial
condition could be materially and adversely affected.
Dependence on the Internet. The Siebel Enterprise Applications facilitate
--------------------------
online communications over public and private networks. The success of the
Company's products may depend, in part, on the Company's ability to introduce
products which are compatible with the Internet and on the broad acceptance of
the Internet and the World Wide Web as a viable commercial marketplace. It is
difficult to predict with any assurance whether the Internet will prove to be a
viable commercial marketplace or whether the demand for Internet related
products and services will increase or decrease in the future. The increased
commercial use of the Internet could require substantial modification and
customization of the Company's products and services and the introduction of new
products and services, and there can be no assurance that the Company would be
able to effectively migrate its products to the Internet or to successfully
compete in the market for Internet-related products and services.
The Internet may not prove to be a viable commercial marketplace because of
inadequate development of the necessary infrastructure, such as a reliable
network backbone with the necessary speed, data capability, and security, or
timely development of complementary products, such as high speed modems. The
Internet has experienced, and is expected to continue to experience, significant
growth in the number of users and amount of traffic. There can be no assurance
that the Internet infrastructure will continue to be able to support the demands
placed on it by this continued growth. In addition, the Internet could lose its
viability due to delays in the development or adoption of new standards and
protocols to handle increased levels of Internet activity or due to increased
governmental regulation. Moreover, critical issues concerning the commercial
use of the Internet (including security, reliability, data corruption, cost,
ease of use, accessibility and quality of service) remain unresolved and may
negatively affect the attractiveness of commerce and communication on the
Internet. Because global commerce and online exchange of information on the
Internet and other similar open wide area networks are new and evolving, there
can be no assurance that the Internet will prove to be a viable commercial
marketplace. If critical issues concerning the commercial use of the Internet
are not favorably resolved, if the necessary infrastructure and complementary
products are not developed, or if the Internet does not become a viable
commercial marketplace, the Company's business, operating results and financial
condition could be materially and adversely affected.
Risk Associated with Emerging Client/Server and Customer Information
--------------------------------------------------------------------
Markets. The client/server application software market is a relatively new
- -------
market and is intensely competitive, highly fragmented and subject to rapid
change. The Company markets its products only to customers who have migrated or
are in the process of migrating their enterprise computing systems to
client/server computing environments. The Company does not market its products
to customers exclusively using legacy computer systems. The Company's future
financial performance will depend in large part on continued growth in the
number of organizations successfully adopting client/server computing
environments. There can be no assurance that the client/server market will
maintain its current level of growth or continue to grow at all. If the
client/server market fails to grow or grows more slowly than the Company
currently anticipates, the Company's business, operating results and financial
condition could be materially and adversely affected. Similarly, the market for
customer information software is intensely competitive, highly fragmented and
subject to rapid change. The Company's future financial performance will depend
primarily on growth in the number of customer information applications developed
for use in client/server environments. There can be no assurance that the
market for customer information software will continue to grow. If the customer
information software market fails to grow or grows more slowly than the Company
currently
7.
<PAGE>
anticipates, the Company's business, operating results and financial
condition would be materially and adversely affected.
Limited Deployment. Many of the Company's customers are in the pilot phase
------------------
of implementing the Company's software. There can be no assurance that
enterprise-wide deployments by such customers will be successful. The Company's
customers frequently contemplate the deployment of its products commercially to
large numbers of sales, marketing and customer service personnel, many of whom
have not previously used application software systems, and there can be no
assurance of such end-users' acceptance of the product. The Company's products
are being deployed on a variety of computer hardware platforms and used in
connection with a number of third-party software applications and programming
tools. Such deployment presents significant technical challenges, particularly
as large numbers of customer personnel attempt to use the Company's product
concurrently. If any of the Company's customers are not able to customize and
deploy Siebel Enterprise Applications successfully and on a timely basis to the
number of anticipated users, the Company's reputation could be significantly
damaged, which could have a material adverse effect on the Company's business,
operating results and financial condition. In addition to revenues from new
customers, the Company expects that a significant percentage of any future
revenues will be derived from sales to existing customers. However, such
customers are not contractually committed in all cases to purchase additional
licenses. If existing customers have difficulty further deploying Siebel
Enterprise Applications or for any other reason are not satisfied with Siebel
Enterprise Applications, the Company's business, operating results and financial
condition could be materially and adversely affected
Reliance on Single Product Family. A substantial majority of the Company's
---------------------------------
revenues to date have been attributable to sales of Siebel Sales Enterprise.
The remaining revenues were primarily attributable to maintenance and training
services related to such product family. The Company currently expects Siebel
Sales Enterprise and related maintenance and training services to continue to
account for a substantial majority of the Company's future revenues. As a
result, factors adversely affecting the pricing of or demand for Siebel Sales
Enterprise, such as competition or technological change, could have a material
adverse effect on the Company's business, operating results and financial
condition. The Company's future financial performance will depend, in
significant part, on the successful deployment of current versions of Siebel
Sales Enterprise and the development, introduction and customer acceptance of
new and enhanced versions of Siebel Sales Enterprise and other products. There
can be no assurance that the Company will be successful in marketing Siebel
Sales Enterprise product or other products. In the event that the Company
continues to derive a substantial percentage of its revenues from perpetual
license fees for Siebel Sales Enterprise and is successful in licensing such
product to a very large portion of the customers in the markets targeted by the
Company, the Company's business, financial condition and results of operations
could be materially and adversely affected unless the Company is able to
establish additional sources of revenue.
Lengthy Sales and Implementation Cycles. The license of the Company's
---------------------------------------
software products is often an enterprise-wide decision by prospective customers
and generally requires the Company to provide a significant level of education
to prospective customers regarding the use and benefits of the Company's
products. In addition, the implementation of the Company's products involves a
significant commitment of resources by prospective customers and is commonly
associated with substantial reengineering efforts which may be performed by the
customer or third-party system integrators. The cost to the customer of the
Company's product is typically only a portion of the related hardware, software,
development, training and integration costs of implementing a large-scale sales
and marketing information system. For these and other reasons, the period
between initial contact and the implementation of the Company's products is
often lengthy (ranging to date from between two and twenty-four months) and is
subject to a number of significant delays over which the Company has little or
no control. The Company's implementation cycle could be lengthened by increases
in the size and complexity of its license transactions and by delays in its
customers' implementation of client/server computing environments. Delay in the
sale or implementation of a limited number of license transactions could have a
material adverse effect on the Company's business and operations and cause the
Company's operating results to vary significantly from quarter to quarter.
Therefore, the Company believes that its quarterly operating results are likely
to vary significantly in the future.
Risks Associated with Expanding Distribution. To date, the Company has
--------------------------------------------
sold its products primarily through its direct sales force and has supported its
customers with its technical and customer support staff. The
8.
<PAGE>
Company's ability to achieve significant revenue growth in the future will
depend in large part on its success in recruiting and training sufficient direct
sales, technical and customer support personnel and establishing and maintaining
relationships with its strategic partners. Although the Company is currently
investing, and plans to continue to invest, significant resources to expand its
direct sales force and its technical and customer support staff and to develop
distribution relationships with strategic partners, the Company has at times
experienced and continues to experience difficulty in recruiting qualified
personnel and in establishing necessary third-party relationships. There can be
no assurance that the Company will be able to expand successfully its direct
sales force or other distribution channels or that any such expansion will
result in an increase in revenues. The Company believes the complexity of its
products and the large-scale deployment anticipated by its customers will
require a number of highly trained customer support personnel. There can be no
assurance that the Company will successfully expand its technical and customer
support staff to meet customer demands. Any failure by the Company to expand its
direct sales force or other distribution channels, or to expand its technical
and customer support staff, could materially and adversely affect the Company's
business, operating results and financial condition.
Dependence on Large License Fee Contracts and Customer Concentration. A
--------------------------------------------------------------------
relatively small number of customers have accounted for a significant percentage
of the Company's revenues. To date, sales to the Company's 10 largest customers
in each fiscal year have accounted for a majority of the Company's revenues
during such period. The Company expects that sales of its products to a limited
number of customers will continue to account for a significant percentage of
revenue for the foreseeable future. The loss of any major customer or any
reduction or delay in orders by any such customer, or the failure of the Company
to market successfully its products to new customers could have a material
adverse effect on the Company's business, financial condition and results of
operations.
Risk Associated with New Versions and New Products; Rapid Technological
-----------------------------------------------------------------------
Change. The software market in which the Company competes is characterized by
- ------
rapid technological change, frequent introductions of new products, changes in
customer demands and evolving industry standards. The introduction of products
embodying new technologies and the emergence of new industry standards can
render existing products obsolete and unmarketable. For example, the Company's
customers have adopted a wide variety of hardware, software, database and
networking platforms, and as a result, to gain broad market acceptance, the
Company must support Siebel Sales Enterprise and the Company's other products on
a variety of such platforms. The Company's future success will depend upon its
ability to address the increasingly sophisticated needs of its customers by
supporting existing and emerging hardware, software, database and networking
platforms and by developing and introducing enhancements to Siebel Enterprise
Applications and new products on a timely basis that keep pace with
technological developments, evolving industry standards and changing customer
requirements. The Company currently ships production versions of its software
running on MS Windows 3.1, MS Windows 95 and Windows NT clients, as well as on
NT application servers, and NT, Sun and HP UNIX database server platforms. The
Company plans, in the future, to support subsequent versions of Microsoft's
Windows client operating system, as well as UNIX application servers and Digital
Alpha and additional UNIX database server platforms. There can be no assurance
that the Company will be successful in releasing Siebel Enterprise Applications
for use on such platforms or in developing and marketing enhancements that
respond to technological developments, evolving industry standards or changing
customer requirements, or that the Company will not experience difficulties that
could delay or prevent the successful development, introduction and sale of such
enhancements or that such enhancements will adequately meet the requirements of
the marketplace and achieve any significant degree of market acceptance. If
release dates of any future Siebel Enterprise Applications enhancements or new
products are delayed or if these products or enhancements fail to achieve market
acceptance when released, the Company's business, operating results and
financial condition could be materially and adversely affected. In addition,
the introduction or announcement of new product offerings or enhancements by the
Company or the Company's competitors or major hardware, systems or software
vendors may cause customers to defer or forgo purchases of the Company's
products, which could have a material adverse effect on the Company's business,
financial condition and results of operations.
Competition. The market for the Company's products is intensely
-----------
competitive, subject to rapid change and significantly affected by new product
introductions and other market activities of industry participants. The
Company's products are targeted at the emerging market for customer information
systems, and the Company
9.
<PAGE>
faces competition primarily from customer's internal information technology
departments and systems integrators, as well as from other application software
providers that offer a variety of products and services to address this market.
Many of the Company's customers and potential customers have in the past
attempted to develop customer information systems, in-house either alone or with
the help of systems integrators and there can be no assurance that the Company
will be able to compete successfully against such internal development efforts.
The Company relies on a number of systems consulting and systems
integration firms, particularly Andersen Consulting, for implementation and
other customer support services, as well as recommendations of its products
during the evaluation stage of the purchase process. Although the Company seeks
to maintain close relationships with these service providers, many of them have
similar, and often more established, relationships with the Company's
competitors. If the Company is unable to develop and retain effective, long-
term relationships with these third parties, the Company's competitive position
could be materially and adversely affected. Further, there can be no assurance
that these third parties, many of which have significantly greater resources
than the Company, will not market software products in competition with the
Company in the future or will not otherwise reduce or discontinue their
relationships with or support of the Company and its products.
A large number of personal, departmental and other products exist in the
customer information systems market. Some of the Company's current and
potential competitors and their products include Symantec (ACT!), Borealis
Corporation (Arsenal), Brock International (Take Control Sales), Early Cloud &
Co. (CallFlow), Clarify, Inc. (ClearSales, ClearSupport), IMA (EDGE),
Marketrieve Company (Marketrieve PLUS), Oracle Corporation (Oracle Sales and
Marketing), Pivotal Software, Inc. (Relationship), SalesBook Systems
(SalesBook), SalesKit Software Corporation (SalesKit), Scopus Technology, Inc.
(Voyager, SalesTEAM, ServiceTEAM), Aurum Software, Inc. (SalesTrak) (recently
acquired by Baan Company N.V.), Saratoga Systems (SPS for Windows) and The
Vantive Corporation (Vantive Enterprise). Some of these competitors have longer
operating histories, significantly greater financial, technical, marketing and
other resources, significantly greater name recognition and a larger installed
base of customers than the Company. In addition, many competitors have well-
established relationships with current and potential customers of the Company.
As a result, these competitors may be able to respond more quickly to new or
emerging technologies and changes in customer requirements, or to devote greater
resources to the development, promotion and sale of their products, than can the
Company.
It is also possible that new competitors or alliances among competitors may
emerge and rapidly acquire significant market share. The Company also expects
that competition will increase as a result of consolidation in the software
industry. Increased competition may result in price reductions, reduced gross
margins and loss of market share, any of which could materially adversely affect
the Company's business, operating results and financial condition. There can be
no assurance that the Company will be able to compete successfully against
current and future competitors or that competitive pressures faced by the
Company will not materially and adversely affect its business, operating results
and financial condition.
Reliance on Third-Party Vendors. The Company incorporates into its
-------------------------------
products certain software licensed to it by third-party software developers.
Although the Company believes there are other sources for these products, any
significant interruption in the supply of such products could have a material
adverse impact on the Company's sales unless and until the Company can replace
the functionality provided by these products. Because the Company's products
incorporate software developed and maintained by third parties, the Company is
to a certain extent dependent upon such third parties' abilities to enhance
their current products, to develop new products on a timely and cost-effective
basis and to respond to emerging industry standards and other technological
changes. There can be no assurance that the Company would be able to replace
the functionality provided by the third-party software currently offered in
conjunction with the Company's products in the event that such software becomes
obsolete or incompatible with future versions of the Company's products or is
otherwise not adequately maintained or updated. The absence of or any
significant delay in the replacement of that functionality could have a material
adverse effect on the Company's sales.
Risk of Product Defects. Software products as internally complex as those
-----------------------
offered by the Company frequently contain errors or failures, especially when
first introduced or when new versions are released. Although the Company
conducts extensive product testing during product development, the Company has
been forced to delay commercial release of products until the correction of
software problems and, in some cases, has provided
10.
<PAGE>
product enhancements to correct errors in released products. The Company could,
in the future, lose revenues as a result of software errors or defects. The
Company's products are intended for use in sales applications that may be
critical to a customer's business. As a result, the Company expects that its
customers and potential customers have a greater sensitivity to product defects
than the market for software products generally. There can be no assurance that,
despite testing by the Company and by current and potential customers, errors
will not be found in new products or releases after commencement of commercial
shipments, resulting in loss of revenue or delay in market acceptance, diversion
of development resources, damage to the Company's reputation, or increased
service and warranty costs, any of which could have a material adverse effect
upon the Company's business, operating results and financial condition.
Management of Growth; Dependence upon Key Personnel. In the event that the
---------------------------------------------------
significant growth of the Company's revenues continues, such growth may place a
significant strain upon the Company's management systems and resources. The
Company's ability to compete effectively and to manage future growth, if any,
will require the Company to continue to improve its financial and management
controls, reporting systems and procedures on a timely basis and expand, train
and manage its employee work force. There can be no assurance that the Company
will be able to do so successfully. The Company's failure to do so could have a
material adverse effect upon the Company's business, operating results and
financial condition. The Company's future performance depends in significant
part upon the continued service of its key technical, sales and senior
management personnel, particularly Thomas M. Siebel, the Company's Chairman and
Chief Executive Officer, none of whom has entered into an employment agreement
with the Company. The loss of the services of one or more of the Company's
executive officers could have a material adverse effect on the Company's
business, operating results and financial condition. The Company's future
success also depends on its continuing ability to attract and retain highly
qualified technical, customer support, sales and managerial personnel.
Competition for such personnel is intense, and there can be no assurance that
the Company will be able to retain its key technical, sales and managerial
employees or that it can attract, assimilate or retain other highly qualified
technical, sales and managerial personnel in the future.
Proprietary Rights; Risks of Infringement. The Company relies primarily on
-----------------------------------------
a combination of patent, copyright, trade secret and trademark laws,
confidentiality procedures and contractual provisions to protect its proprietary
rights. The Company also believes that factors such as the technological and
creative skills of its personnel, new product developments, frequent product
enhancements, name recognition and reliable product maintenance are essential to
establishing and maintaining a technology leadership position. The Company
seeks to protect its software, documentation and other written materials under
patent, trade secret and copyright laws, which afford only limited protection.
The Company currently has a number of patent applications pending in the United
States. There can be no assurance that any patents issued to the Company will
not be invalidated, circumvented or challenged, that the rights granted
thereunder will provide competitive advantages to the Company or that any of the
Company's pending or future patent applications, whether or not being currently
challenged by applicable governmental patent examiners, will be issued with the
scope of the claims sought by the Company, if at all. Furthermore, there can be
no assurance that others will not develop technologies that are similar or
superior to the Company's technology or design around any patents issued to the
Company. Despite the Company's efforts to protect its proprietary rights,
unauthorized parties may attempt to copy aspects of the Company's products or to
obtain and use information that the Company regards as proprietary. Policing
unauthorized use of the Company's products is difficult, and while the Company
is unable to determine the extent to which piracy of its software products
exists, software piracy can be expected to be a persistent problem. In
addition, the laws of some foreign countries do not protect the Company's
proprietary rights as fully as do the laws of the United States. There can be
no assurance that the Company's means of protecting its proprietary rights in
the United States or abroad will be adequate or that the Company's competitors
will not independently develop similar technology. The Company has entered into
agreements with substantially all of its customers which require the Company to
place Siebel Enterprise Applications source code into escrow. Such agreements
generally provide that such parties will have a limited, non-exclusive right to
use such code in the event that there is a bankruptcy proceeding by or against
the Company, if the Company ceases to do business or if the Company fails to
meet its support obligations. Entering into such agreements may increase the
likelihood of misappropriation by third parties.
11.
<PAGE>
The Company is not aware that it is infringing any proprietary rights of
third parties. There can be no assurance, however, that third parties will not
claim infringement by the Company of their intellectual property rights. The
Company expects that software product developers will increasingly be subject to
infringement claims as the number of products and competitors in the Company's
industry segment grows and the functionality of products in different industry
segments overlaps. Furthermore, there can be no assurance that former employers
of the Company's present and future employees will not assert claims that such
employees have improperly disclosed confidential or proprietary information to
the Company. Any such claims, with or without merit, could be time consuming to
defend, result in costly litigation, divert management's attention and
resources, cause product shipment delays or require the Company to pay money
damages or enter into royalty or licensing agreements. Such royalty or
licensing agreements, if required, may not be available on terms acceptable to
the Company, if at all. In the event of a successful claim of product
infringement against the Company and failure or inability of the Company to
license the infringed or similar technology, the Company's business, operating
results and financial condition would be materially and adversely affected.
The Company relies upon certain software that it licenses from third
parties, including software that is integrated with the Company's internally
developed software and used in Siebel Sales Enterprise and the Company's other
products to perform key functions. There can be no assurance that these third-
party software licenses will continue to be available to the Company on
commercially reasonable terms. The loss of, or inability to maintain, any such
software licenses could result in shipment delays or reductions until equivalent
software could be developed, identified, licensed and integrated which would
materially adversely affect the Company's business, operating results and
financial condition.
International Operations. The Company's sales are primarily to large
------------------------
multi-national companies. To service the needs of such companies, both
domestically and internationally, the Company must provide worldwide product
support services. As a result, the Company has expanded and intends to continue
to expand its international operations and enter additional international
markets, which will require significant management attention and financial
resources and could adversely affect the Company's operating margins and
earnings, if any. Since international sales commenced in the fourth quarter of
1995, revenues from international sales have accounted for a significant portion
of the Company's total revenues. The Company believes that in order to increase
sales opportunities and profitability it will be required to expand its
international operations. The Company has committed and continues to commit
significant management time and financial resources to developing direct and
indirect international sales and support channels. There can be no assurance,
however, that the Company will be able to maintain or increase international
market demand for Siebel Enterprise Applications. To the extent that the
Company is unable to do so in a timely manner, the Company's international sales
will be limited, and the Company's business, operating results and financial
condition could be materially and adversely affected.
The growth in the Company's revenues from international sales is expected
to continue to subject a portion of the Company's revenues to the risks
associated with international sales, including foreign currency fluctuations,
economic or political instability, shipping delays and various trade
restrictions, any of which could have a significant impact on the Company's
ability to deliver products on a competitive and timely basis. Future
imposition of, or significant increases in the level of, customs duties, export
quotas or other trade restrictions, could have an adverse effect on the
Company's business, financial condition and results of operations. As the
Company continues to develop an international sales force, it expects to be more
directly subject to foreign currency fluctuations. To the extent such direct
sales are denominated in foreign currency, any such fluctuation may adversely
affect the Company's business, financial condition and results of operations.
Finally, the laws of certain foreign countries do not protect the Company's
intellectual property rights to the same extent as do the laws of the United
States.
Product Liability. The Company's license agreements with its customers
-----------------
typically contain provisions designed to limit the Company's exposure to
potential product liability claims. It is possible, however, that the
limitation of liability provisions contained in the Company's license agreements
may not be effective under the laws of certain jurisdictions. Although the
Company has not experienced any product liability claims to date, the sale and
support of products by the Company may entail the risk of such claims, and there
can be no assurance that the Company will not be subject to such claims in the
future. A successful product liability claim brought against
12.
<PAGE>
the Company could have a material adverse effect upon the Company's business,
operating results and financial condition.
Control by Existing Stockholders. The Company's current officers,
--------------------------------
directors and affiliated entities together beneficially owned approximately
54.5% of the outstanding shares of Common Stock as of December 31, 1996. In
particular, Thomas M. Siebel, the Company's Chairman and Chief Executive
Officer, owned approximately 38.2% of the outstanding shares of Common Stock as
of December 31, 1996. As a result, these stockholders will be able to exercise
control over matters requiring stockholder approval, including the election of
directors, and the approval of mergers, consolidations and sales of all or
substantially all of the assets of the Company. This may prevent or discourage
tender offers for the Company's Common Stock unless the terms are approved by
such stockholders.
Possible Volatility of Stock Price. The Company's stock price has
----------------------------------
fluctuated substantially since its initial public offering in June 1996. The
trading price of the Company's Common Stock is subject to significant
fluctuations in response to variations in quarterly operating results, the gain
or loss of significant orders, changes in earning estimates by analysts,
announcements of technological innovations or new products by the Company or its
competitors, general conditions in the software and computer industries and
other events or factors. In addition, the stock market in general has
experienced extreme price and volume fluctuations which have affected the market
price for many companies in industries similar or related to that of the Company
and which have been unrelated to the operating performance of these companies.
These market fluctuations have adversely affected and may continue to adversely
affect the market price of the Company's Common Stock.
Effect of Certain Charter Provisions; Antitakeover Effects of Certificate
-------------------------------------------------------------------------
of Incorporation, Bylaws and Delaware Law. The Company's Board of Directors has
- -----------------------------------------
the authority to issue up to 2,000,000 shares of Preferred Stock and to
determine the price, rights, preferences, privileges and restrictions, including
voting rights, of those shares without any further vote or action by the
stockholders. The Preferred Stock could be issued with voting, liquidation,
dividend and other rights superior to those of the Common Stock. 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 desirable 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. Pursuant to the
Company's Certificate of Incorporation, the Company has instituted a classified
Board of Directors. This and certain other provisions of the Company's
Certificate of Incorporation and certain provisions of the Company's Bylaws and
of Delaware law, could delay or make more difficult a merger, tender offer or
proxy contest involving the Company.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares by
the Selling Stockholders.
DIVIDEND POLICY
The Company has never paid any cash dividends on its capital stock. The
Company currently intends to retain any future earnings to finance the growth
and development of its business and therefore does not anticipate paying any
cash dividends in the foreseeable future.
13.
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth the names of the Selling Stockholders, the
number of shares of Common Stock owned beneficially by the Selling Stockholders
as of October 16, 1997 and the number of Shares which may be offered pursuant to
this Prospectus. The Selling Stockholders may offer all, some or none of their
Shares.
NAME SHARES BENEFICIALLY SHARES SHARES BENEFICIALLY
---- OWNED PRIOR TO BEING OWNED AFTER
OFFERING(2) OFFERED OFFERING(1)(2)
-------- ------- -----------
NUMBER PERCENT(3) NUMBER PERCENT(3)
------ ---------- ------ ---------
Kenneth C. Jeffers(4) 143,175 * 143,175 - -
Michael T. Howard(5). 77,099 * 77,099 - -
Salem Partners, 47,473 * 47,473 - -
L.P.(5).............
Gregory L. Craig..... 39,363 * 39,363 - -
Windhorse 9,494 * 9,494 - -
Corporation
Lonecone, Ltd........ 7,596 * 7,596 - -
Stuart Hamill........ 2,659 * 2,659 - -
Sybil S. Craig....... 2,279 * 2,279 - -
Jurgen Leschner(6)... 2,847 * 2,278 569 *
Albert B. Craig 1,899 * 1,899 - -
III.................
B.G. Staffan 1,899 * 1,899 - -
Lundback............
Alexander Henkles, 1,899 * 1,899 - -
Jr..................
Virginia Egger....... 1,899 * 1,899 - -
Barry Keesan......... 1,899 * 1,899 - -
Shaun T. Logan....... 1,709 * 1,709 - -
Rodd M. Halstead..... 1,519 * 1,519 - -
Brian Rowles......... 1,044 * 1,044 - -
Wendy A. Hassan...... 545 * 545 - -
Chartiers West, 379 * 379 - -
Inc.................
Thaddeus W. Batt..... 272 * 272 - -
- -------------------------
* Less than one percent
(1) Assumes the sale of all Shares offered hereby.
(2) Excludes an aggregate of 81,076 shares of Common Stock which will be
issued to the Selling Stockholders pursuant to the Merger Agreement (as
defined below) upon satisfaction of certain conditions.
(3) Applicable percentage of ownership is based on 34,520,071 shares of Common
Stock outstanding (net of treasury shares) as of September 24, 1997 plus
346,379 shares of Common Stock issued to the Selling Stockholders on
October 1, 1997.
(4) Includes 71,588 Shares subject to the terms of a Stock Vesting Agreement
dated as of October 1, 1997 by and between the Company and such Selling
Stockholder. Pursuant to such agreement, such Shares vest under certain
circumstances and may not be sold until vested.
(5) Includes 38,550 Shares subject to the terms of a Stock Vesting Agreement
dated as of October 1, 1997 by and between the Company and such Selling
Stockholder. Pursuant to such agreement, such Shares vest under certain
circumstances and may not be sold until vested.
(6) Includes 569 shares of Common Stock subject to exercise under a stock
option within 60 days of October 1, 1997.
14.
<PAGE>
Each of the Selling Stockholders held shares of stock of InterActive WorkPlace,
Inc. ("InterActive"), either directly or indirectly as a limited or general
partner of a stockholder. Ms. Hassan and Messrs. Leschner, Logan, Halstead,
Rowles and Batt were employees of InterActive and Messrs. Jeffers, Howard and
Craig were executive officers of InterActive. On October 1, 1997 InterActive
merged into INTW Acquisition Corp. ("INTW"), a wholly-owned subsidiary of the
Company and became a wholly-owned subsidiary of the Company, pursuant to an
Agreement and Plan of Merger and Reorganization between the Company, INTW,
InterActive and certain stockholders of InterActive dated as of September 13,
1997 (the "Merger Agreement"). Pursuant to the Merger Agreement, in exchange for
their shares in InterActive, each of the Selling Stockholders or the limited
partnership of which certain of the Selling Stockholders were general or limited
partners, received the Shares set forth in the table above. Each of the
individual Selling Stockholders that were employees or executive officers of
InterActive, other than Mr. Craig, have accepted employment with the Company.
PLAN OF DISTRIBUTION
The Company is registering the Shares offered by the Selling Stockholders
hereunder pursuant to covenants under the Merger Agreement and contractual
registration rights contained in a Registration Rights Agreement by and among
the Company and the Selling Stockholders, dated October 1, 1997 (the
"Registration Rights Agreement"). Sales may be made on the Nasdaq National
Market or in private transactions or in 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 Stockholders and any persons who participate in the
distribution of the Shares offered hereby may be deemed to be underwriters
within the meaning of the Act, and any discounts, commissions or concessions
received by them and any provided pursuant to the sale of the Shares by them
might be deemed to be underwriting discounts and commissions under the Act. The
Selling Stockholders will be subject to the applicable provisions of the
Exchange Act, and the rules and regulations thereunder, including without
limitation, Rules 10b-2, 10b-6 and 10b-7, which provisions may limit the timing
of purchases and sales of any of the Common Stock by the Selling Stockholders.
In order to comply with the securities laws of certain states, if
applicable, the Shares may be sold in such jurisdictions only through registered
or licensed brokers or dealers. In addition, in certain states the Shares may
not be sold unless it has been registered or qualified for sale or an exemption
from registration or qualification requirements is available and is complied
with.
The Company has agreed in the Merger Agreement and the Registration Rights
Agreement to register the shares of Common Stock received by the Selling
Stockholders pursuant to the Merger Agreement under applicable Federal and state
securities laws under certain circumstances and at certain times. Pursuant to
the Merger Agreement, the Company has filed a registration statement related to
the Shares offered hereby and has agreed pursuant to the Registration Rights
Agreement to keep such registration statement effective until the earliest of
(i) October 1, 1998 (the first anniversary of the closing of the InterActive
acquisition), (ii) the satisfaction of all requirements to sell all such Shares
under Rule 144 during any ninety (90) day period, or (iii) the sale of all the
securities registered thereunder. The Company will pay substantially all of the
expenses incident to the offering and sale of the Common Stock to the public,
other than commissions, concessions and discounts of underwriters, dealers or
agents. Such expenses (excluding such commissions and discounts) are estimated
to be $38,000. The Registration Rights Agreement provides for cross-
indemnification of the Selling Stockholders and the Company to the extent
permitted by law for losses, claims, damages, liabilities and expenses arising,
under certain circumstances, out of any registration of the Common Stock.
15.
<PAGE>
LEGAL MATTERS
The validity of the issuance of the Common Stock offered hereby will be
passed upon for the Company by Cooley Godward LLP, Menlo Park, California
("Cooley Godward"). As of the date of this Prospectus, certain members and
associates of Cooley Godward own an aggregate of 39,559 shares of Common Stock.
In addition, James C. Gaither, a director and the Secretary of the Company and a
partner of Cooley Godward, owns 80,282 shares of Common Stock and has options to
purchase 74,000 shares of Common Stock. Eric C. Jensen, a partner of Cooley
Godward, is an Assistant Secretary of the Company.
EXPERTS
The financial statements and schedule of Siebel Systems, Inc. as of
December 31, 1995 and 1996 and for each of the years in the three-year period
ended December 31, 1996, have been incorporated by reference in this
Prospectus in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, incorporated by reference herein, upon the
authority of said firm as experts in accounting and auditing.
16.
<PAGE>
=======================================
NO DEALER, SALESMAN OR OTHER PERSON
HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS AND, IF
GIVEN OR MADE, SUCH OTHER INFORMATION
AND REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER OR
SOLICITATION BY ANYONE IN ANY STATE
IN WHICH SUCH OFFER OR SOLICITATION
IS NOT AUTHORIZED, OR IN WHICH THE
PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO
SO, OR TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION. THE DELIVERY OF THIS
PROSPECTUS AT ANY TIME DOES NOT IMPLY
THAT THE INFORMATION HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE HEREOF.
-----------------
TABLE OF CONTENTS
PAGE
----
Available Information........... 3
Additional Information.......... 3
Incorporation of Certain
Documents by Reference........ 3
The Company..................... 5
Risk Factors.................... 6
Use of Proceeds................. 13
Dividend Policy................. 13
Selling Stockholders............ 14
Plan of Distribution............ 15
Legal Matters................... 16
Experts......................... 16
-----------------
=======================================
=======================================
346,379 SHARES
SIEBEL SYSTEMS, INC.
COMMON STOCK
------------
PROSPECTUS
------------
____________, _____
=======================================
17.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth all expenses, other than the underwriting
discounts and commissions, 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.
Registration fee.................... $ 4,225
Legal fees and expenses............. 30,000
Accounting fees and expenses........ 2,000
Miscellaneous....................... 1,775
TOTAL $38,000
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Under Section 145 of the Delaware General Corporation Law, the Registrant has
broad powers to indemnify its directors and officers against liabilities they
may incur in such capacities, including liabilities under the Securities Act of
1933, as amended (the "Securities Act").
The Registrant's Certificate of Incorporation, as amended provides for the
elimination of liability for monetary damages for breach of the directors'
fiduciary duty of care to the Registrant and its stockholders. These provisions
do not eliminate the directors' duty of care and, in appropriate circumstances,
equitable remedies such an injunctive or other forms of non-monetary relief will
remain available under Delaware law. In addition, each director will continue to
be subject to liability for breach of the director's duty of loyalty to the
Registrant, for acts or omissions not in good faith or involving intentional
misconduct, for knowing violations of law, for any transaction from which the
director derived an improper personal benefit, and for payment of dividends or
approval of stock repurchases or redemptions that are unlawful under Delaware
law. The provision does not affect a director's responsibilities under any
other laws, such as the federal securities laws or state or federal
environmental laws.
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.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits.
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------- -----------------------
3.3 Restated Certificate of Incorporation of the Registrant. (3)
3.4 Bylaws of the Registrant. (1)
4.1 Reference is made to Exhibits 3.3 and 3.4. (1)
4.2 Specimen Stock Certificate. (1)
II-1
<PAGE>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------- -----------------------
4.3 Restated Investor Rights Agreement, dated December 1,
1995, between the Registrant and certain investors, as
amended April 30, 1996 and June 14, 1996. (1)
4.4 Form of Registration Rights Agreement, between the Registrant and
certain stockholders. (5)
5.1 Opinion of Cooley Godward LLP. (5)
10.1 Registrant's 1996 Equity Incentive Plan, as amended. (3)
10.2 Registrant's Employee Stock Purchase Plan, as amended. (3)
10.3 Form of Indemnity Agreement entered into between the
Registrant and its officers and directors. (1)
10.4 Registrant's Deferred Compensation Plan, dated January
10, 1997. (4)
10.6 Master Alliance Agreement, dated March 17, 1995, between
the Registrant and Andersen Consulting LLP. (1)(2)
10.9 Assignment Agreement, dated September 20, 1995, by and
between the Registrant and Thomas M. Siebel. (1)
10.10 Lease Agreement, dated June 4, 1996, by and between the
Registrant and Crossroad Associates and Clocktower
Associates. (1)
10.11 InterActive WorkPlace, Inc. 1996 Stock Option Plan. (5)
23.1 Consent of KPMG Peat Marwick LLP, Independent Certified Public
Accountants. (6)
23.2 Consent of Cooley Godward LLP. Reference is made to
Exhibit 5.1. (5)
24.1 Power of Attorney. Reference is made to the signature
page. (5)
___________
(1) Incorporated by reference to the Company's Registration Statement on Form S-
1 (No. 333-03751), as amended.
(2) Confidential treatment has been granted with respect to portions of this
exhibit.
(3) Incorporated by reference to the Company's Registration Statement on Form S-
8 (No. 333-07983), as amended.
(4) Incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1996.
(5) Previously filed.
(6) Filed herewith.
(b) Financial Statement Schedules
Schedules not listed above have been omitted because the information to be
set forth therein is not applicable or is shown in the financial statements or
notes thereto.
UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement 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:
(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.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high and of the
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<PAGE>
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective 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 paragraphs (a) (1) (i) and (a) (1) (ii) do not
-----------------
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or furnished to
the Commission by the registrant pursuant to Section 13 or 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 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.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) 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 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.
(5) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to 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
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 to the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Mateo, County of San Mateo, State of California
on the 16th day of October, 1997.
By: /s/ Howard H. Graham
----------------------------------------------
Howard H. Graham
Senior Vice President, Finance and Administration
-------------------------------------------------
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
SIGNATURE TITLE DATE
--------- ----- ----
* Chairman, Chief Executive October 16, 1997
- -------------------------- Officer and Director
Thomas M. Siebel (Principal Executive Officer)
/s/ Howard H. Graham Senior Vice President Finance October 16, 1997
- -------------------------- and Administration and Chief
Howard H. Graham Financial Officer
(Principal Financial and
Accounting Officer)
* Director October 16, 1997
- --------------------------
Eric E. Schmidt
* Director October 16, 1997
- --------------------------
James C. Gaither
* Director October 16, 1997
- --------------------------
George T. Shaheen
* Director October 16, 1997
- --------------------------
Charles R. Schwab
* Director October 16, 1997
- --------------------------
A. Michael Spence
*/s/ Howard H. Graham
--------------------------
Howard H. Graham
Attorney-In-Fact
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<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Siebel Systems, Inc.:
We consent to the use of our report incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the prospectus.
/s/KPMG Peat Marwick LLP
San Jose, California
October 16, 1997
