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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 27, 1998
REGISTRATION NO. 333-61383
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 2 TO
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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H.T.E., INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
FLORIDA 59-2133858
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
1000 BUSINESS CENTER DRIVE
LAKE MARY, FLORIDA 32746
(407) 304-3235
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA
CODE, OR REGISTRANT'S AGENT FOR SERVICE AND PRINCIPAL EXECUTIVE OFFICES)
---------------
DENNIS J. HARWARD
CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER
H.T.E., INC.
1000 BUSINESS CENTER DRIVE
LAKE MARY, FLORIDA 32746
(407) 304-3235
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE OF AGENT FOR SERVICE)
---------------
WITH COPIES TO:
RANDOLPH H. FIELDS, ESQ.
SANDRA C. GORDON, ESQ.
GREENBERG TRAURIG, P.A.
111 NORTH ORANGE AVENUE, SUITE 2000
ORLANDO, FLORIDA 32801
(407) 420-1000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
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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. [ ]
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT
THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN
ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
===============================================================================
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN
OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS
NOT PERMITTED. [THIS LANGUAGE WILL BE PRINTED ON THE LEFT MARGIN OF
THE NEXT PAGE]
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PROSPECTUS (Subject to completion)
DATED OCTOBER 27, 1998
4,078,021 SHARES
H.T.E., INC.
COMMON STOCK
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This prospectus relates to shares of common stock of H.T.E., Inc.
("HTE" or the "Company") which may be offered from time to time by the selling
shareholders identified in this prospectus. The Company will not receive any of
the proceeds from the sale of the shares covered by this prospectus.
The shares may be sold or distributed from time to time by or for the
account of the selling shareholders or their pledgees through dealers, brokers
or other agents, or directly to one or more purchasers, including pledgees, at
market prices prevailing at the time or times they elect to sell or at prices
otherwise negotiated. This prospectus also may be used, with the prior consent
of the Company, by other persons acquiring the shares and who wish to offer and
sell the shares under circumstances requiring or making desirable its use.
The shares are registered for certain selling shareholders as a result
of (i) the merger of HTE-Phoenix Systems, L.L.C., a wholly-owned Connecticut
subsidiary of HTE, with and into Phoenix Systems, L.L.C., a Connecticut limited
liability company and (ii) the merger of HTE-UCS, Inc., a wholly-owned Florida
subsidiary of HTE, with and into UCS, Inc., a Florida corporation. HTE agreed
to register the shares received by those selling shareholders in connection
with the mergers. This registration statement also includes shares held by
certain institutional and individual venture capital investors in accordance
with piggy-back registration rights they hold. In addition, this registration
statement includes shares held by certain officers and directors of HTE which
may be offered for sale from time to time.
The Company will not receive any portion of the proceeds from the sale
of the shares covered by this prospectus, and will pay all of the expenses in
connection with the registration of the shares for this offering (estimated to
be $48,200), other than commissions, discounts and fees of brokers or dealers,
and counsel fees and expenses incurred by the selling shareholders.
The common stock of the Company is traded on the NASDAQ National
Market under the symbol "HTEI." On October 23, 1998, the average high sale
price and low sale price for one share of common stock on the NASDAQ National
Market was $10.50.
INVESTING IN THE COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE
"RISK FACTORS" BEGINNING ON PAGE 7 OF THIS PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR
DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus dated October ___, 1998.
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TABLE OF CONTENTS
<TABLE>
<S> <C>
AVAILABLE INFORMATION.............................................................................................2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE...................................................................3
THE COMPANY.......................................................................................................4
RISK FACTORS......................................................................................................7
USE OF PROCEEDS..................................................................................................13
SELLING SHAREHOLDERS.............................................................................................14
PLAN OF DISTRIBUTION.............................................................................................16
LEGAL MATTERS....................................................................................................17
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS................................................................17
</TABLE>
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"). The Company has
filed with the Commission a registration statement on Form S-3 under the
Securities Act of 1933, as amended (the "Securities Act") with respect to the
shares of common stock offered hereby. This prospectus does not contain all of
the information set forth in the registration statement and the exhibits and
schedules thereto, certain parts of which are omitted in accordance with the
rules and regulations of the Commission. Statements contained in this
prospectus concerning the provisions of any document are not necessarily
complete and, in each instance, reference is hereby made to the copy of the
document filed as an exhibit to the registration statement or otherwise filed
with the Commission. Each such statement is qualified in its entirety by such
reference.
The registration statement described above, its exhibits and
schedules, and the reports, proxy statements, and other information that the
Company files with the Commission can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and 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. Copies of such material
can also be obtained at prescribed rates from the Commission's Public Reference
Section at its principal office at 450 Fifth Street, N.W., Washington, D.C.
20549. The Commission maintains a web site, the address of which is
http:/www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants, including the Company, that file
electronically with the Commission.
The Company's common stock is listed on the Nasdaq National Market,
and reports, proxy statements, and other information concerning the Company can
also be inspected at the offices of the National Association of Securities
Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
The Company will furnish without charge, upon written or oral request,
to any person, including any beneficial owner, to whom this prospectus is
delivered, a copy of any information that has been incorporated in this
prospectus by reference (other than exhibits to such documents that are not
specifically incorporated by reference into the information that this
prospectus incorporates). Requests should be directed to Investor Relations,
H.T.E., Inc., 1000 Business Center Drive, Lake Mary, Florida 32746, telephone
number (407) 304-3235.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission pursuant to the
Exchange Act are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997;
2. The Company's Quarterly Reports on Form 10-Q for the three
months ended March 31, 1998 and the six months ended June 30, 1998;
3. All Current Reports filed by the Company pursuant to Section
13(a) or 15(d) of the Exchange Act since December 31, 1997, consisting of the
Company's Current Reports on Form 8-K filed February 12, 1998, June 12, 1998
and amendment thereto filed on June 24, 1998, and August 19, 1998;
4. The Company's Definitive Proxy Statement for the 1998 Annual
Shareholder's Meeting filed on April 17, 1998 pursuant to Section 14 of the
Exchange Act; and
5. The description of the common stock contained in the Company's
Registration Statement on Form 8-A and any amendments to such descriptions in
such Registration Statement.
In addition, all other documents filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date
of this prospectus and prior to the termination of this offering shall be deemed
incorporated by reference in this prospectus and to be a part hereof from the
date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated herein by reference, or contained in this prospectus, 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 shall not
be deemed to constitute a part of this prospectus except as so modified, and
any statement so superseded shall not be deemed to constitute a part of this
prospectus.
No dealer, salesman or any other person has been authorized to give
any information or to make any representations other than those contained or
incorporated by reference in this prospectus and, if given or made, such
information or representations must not be relied upon as having been
authorized by the Company or any selling shareholder. This prospectus does not
constitute any offer to sell or a solicitation of any offer to buy securities
by anyone in any jurisdiction 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. Neither the delivery of this prospectus nor any sale made
hereunder shall under any circumstances create any implication that there has
been no change in the affairs of the Company since the date hereof.
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THE COMPANY
The following summary is qualified in its entirety by, and should be
read in conjunction with, the more detailed information and financial
statements and notes thereto appearing elsewhere in this prospectus or
incorporated herein by reference. As used in this prospectus, unless the
context indicates otherwise, the terms "Company" and "HTE" refer to H.T.E.,
Inc. and its subsidiaries. Unless otherwise indicated, or the context otherwise
requires, all information in this prospectus gives effect to a two-for-one
split of the common stock on June 18, 1998 (the "Stock Split"). The Company
changed its fiscal year end from March 31 to December 31 effective December 31,
1996.
The Company develops, markets, implements and supports fully
integrated enterprise-wide software applications designed specifically for
public sector organizations, including state, county and city governments and
other municipal agencies and for public and private utilities. For over 16
years, the Company has strategically focused on providing software applications
exclusively to public sector organizations and utilities, and therefore has
established itself as a leading provider of software solutions to those
markets. HTE's fully integrated enterprise-wide software applications are
designed to fulfill the specific functional requirements of the public sector
marketplace, such as improvement of delivery of services, reduction of costs,
enhancement of revenue collection, operation within budgetary constraints,
compliance with government regulations and improvement of overall operating
efficiencies. The Company's Total Enterprise Solution(TM) currently includes
more than 50 applications addressing five functional areas: financial
management, community services, public safety and justice, education and utility
management. The Company's products operate as integrated suites or as
stand-alone applications and function with a variety of computer and network
hardware, operating systems, database software and desktop applications provided
by other vendors. As part of its strategy to provide a completely integrated
solution to its customers, the Company also provides a variety of related
services, including consulting, implementation, education and training, and the
provision and configuration of hardware systems.
The public sector marketplace is composed of state, county and city
governments, other municipal agencies and publicly owned utilities. Like many
private sector businesses, public sector organizations are facing increasing
pressure to improve delivery of services while striving to control and reduce
costs and generate additional revenues. In response, public sector
organizations are employing information technology ("IT") solutions in an
effort to streamline and automate administrative processes, improve timeliness
and quality of services and generally enhance operating efficiencies. In 1996,
state and local government agencies spent approximately $34.5 billion on IT and
related products, which is expected to grow to $45.0 billion by 2001 according
to G2 Research, Inc. The estimated total for 2001 includes approximately $8.0
billion for software, $12.3 billion for external services and $8.4 billion for
hardware. Certain IT issues facing state and local governments also impact
utilities, many of which are owned by municipalities. Consequently, utilities
are under pressure to retain their customer bases and focus their efforts on
enhancing service levels, improving operating practices and reducing costs.
However, current software solutions have not been able to meet the needs of
public sector organizations because they are typically not enterprise-wide, do
not share information among various public sector departments and are not
designed specifically for use by public sector organizations. As public sector
organizations reengineer their practices and strive to become more efficient,
they seek comprehensive, fully-functional solutions from a single source which
enable them to meet their particular needs.
Historically, local governments and utility companies utilized
computerized operations management systems principally based on mainframe and
mini-computers running customized proprietary software. These legacy systems
have a limited ability to operate with other software applications, systems and
resources and are often difficult and expensive to maintain, upgrade and
modify. Budget constraints and other factors have caused public sector
organizations to lag private sector companies in the adoption of newer,
open-architecture client/server systems. However, the need to integrate
mission-critical functions is now driving these organizations to replace their
legacy systems and more recently acquired point solutions with more
technologically advanced, integrated and complete software solutions.
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HTE offers fully integrated enterprise-wide software solutions
designed to automate and integrate the operations of public sector
organizations. The applications in the financial management system are based on
government fund accounting and provide integrated financial management
functions including general ledger, budgeting, purchasing and asset management.
The community services system provides a centralized land and location database
solution which expedites access to property data, building permits, planning
and zoning processes, business license information, property appraisals and
assessments, and tax and billing collections. The public safety and justice
system offers a complete solution from dispatch to adjudication through an
integrated suite of applications which provides immediate field access to vital
information. The utility management system facilitates electric, water, gas and
other utility services by automating tasks such as customer location
maintenance, meter reading maintenance, bill processing, delinquencies,
penalties, refunds and write-offs. The education system provides integrated
financial management functions and scheduling functions for school districts
(grades K through 12). All of the Company's applications are designed to work
together seamlessly and allow users to share functions and eliminate redundant
data and repetitive tasks.
As part of HTE's strategy to provide a completely integrated solution
to its customers, the Company also provides a variety of related services,
including maintenance, system planning and implementation, project management,
education and training, the provision and configuration of hardware systems,
and custom applications analysis, design and development. The Company's focus
on the public sector and utility markets has allowed it to develop significant
expertise regarding public sector organizations and to design comprehensive
solutions that address the specific needs of these organizations. The Company
markets and sells its products primarily through a direct sales force operating
out of various locations. As of June 30, 1998, the Company had more than 1,600
customers in the U.S., Caribbean, United Kingdom and Canada, including
installations in all 50 states.
The Company's objective is to be the leading provider of
enterprise-wide IT solutions to the public sector and utility markets. The
Company seeks to accomplish this objective by: (i) promoting integrated
enterprise-wide solutions thereby enabling it to sell additional products to
customers who have only a few of the Company's applications or who prefer
products which may be easily integrated with other applications in the future;
(ii) capitalizing on its public sector and utilities expertise to enhance sales
in existing markets and expanding into new market segments, such as foreign
governments and educational institutions; (iii) aggressively pursuing
acquisition opportunities in the highly fragmented public sector vendor market;
(iv) continuing to develop new applications and incorporate new product
functionality into business solutions that can operate effectively regardless
of the customer's platform preference; and (v) increasing market penetration
and expanding its geographic markets by increasing the size of its sales force
and augmenting its collaborative relationships with customers.
RECENT ACQUISITIONS
In December 1997, the Company purchased the assets of Kb Systems, Inc.
("Kb") for $400,000 in cash and the payment of a continuing royalty on license
fees over a five-year period. For its fiscal year ended June 30, 1997, Kb had
revenues of approximately $1.4 million. As of the date of the acquisition, Kb
had approximately 150 customers. The Kb software applications have enabled the
Company to expand its penetration into governmental tax departments by adding
property appraisal and assessment applications to its traditional tax billing
and collection capability.
In January 1998, the Company purchased the assets of JALAN, Inc.
("JALAN") for approximately $1.7 million in cash. For its fiscal year ended
September 30, 1997, JALAN had revenues of approximately $2.5 million. As of the
date of the acquisition, JALAN had 18 employees and approximately 120 customers
in 32 states. The JALAN software applications track inmate information for
jails, case status for courts, defendant case information for district
attorneys' and public defenders' offices, civil papers for sheriff departments,
case information for the probation system and claims for victim compensation.
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In April 1998, the Company completed a pooling of interests
acquisition of Phoenix Systems, LLC ("Phoenix") for 272,036 shares of common
stock valued at $3.0 million on or about the closing date. As of the date of
the acquisition, Phoenix had 22 employees and approximately 70 customers. The
Phoenix software applications encompass a complete suite of integrated Windows
NT software products targeted towards financial management and student
administration for school districts (grades K through 12).
In June 1998, the Company completed a pooling of interests acquisition
of UCS, Inc., ("UCS") for 1,120,000 shares of common stock valued at $15.0
million as of the April 1998 agreement valuation date. For its fiscal year
ended December 31, 1997, UCS had revenues of approximately $10.0 million. As of
the date of the acquisition, UCS had approximately 130 employees in its Ft.
Lauderdale, Florida, Golden, Colorado and Vienna, Virginia offices and more
than 200 customers throughout the United States. UCS is a leading mobile work
force automation provider of field-based reporting software. UCS' products and
services are utilized by federal, state, county and city government agencies,
as well as police and fire departments. UCS mobile data software enables law
enforcement officials to utilize HTE software through the entire criminal
justice process -- from the first point of contact with a suspect in the field
through the judicial system and throughout the incarceration period.
In August 1998, the Company acquired the assets of Vanguard Management
& Information Systems, Inc. ("Vanguard") for $400,000 in cash and the payment
of continuing royalties over a five-year period. Vanguard products provide
software applications to trial courts and other judicial agencies. The Company
expects the acquisition to expand its justice system product line, enhance its
UNIX client/server offerings, and permit it to respond to proposals for large
scale court administration systems.
Over the past five years, the Company has supplemented its internal
growth with nine acquisitions, four of which have occurred since June 1997. The
Company intends to continue its growth strategy and expects growth from
acquisitions to complement internally generated growth. The Company views
acquisitions as a means of acquiring technology and industry expertise, thereby
expanding the variety of enterprise-wide software applications the Company
offers for sale and servicing, broadening its customer base and expanding
internationally. The Company believes that the public sector application vendor
market is highly fragmented with many small point solution companies and that
the industry is currently entering a period of consolidation. The Company
intends to pursue acquisition opportunities which accomplish its objective of
becoming the leading provider of enterprise-wide IT solutions to the public
sector.
The principal executive offices of H.T.E., Inc. are located at 1000
Business Center Drive, Lake Mary, Florida 32746 and its telephone number is
(407) 304-3235.
RECENT DEVELOPMENTS
On October 14, 1998, the Company published its results for the third
quarter ended September 30, 1998. Revenues for the third quarter of fiscal 1998
increased 72.8% to $27.0 million from $15.6 million in the same period of 1997.
Net income for the period grew 131.6% to $1.9 million, compared with net income
of $801,000 in the third quarter of 1997. Basic earnings per share for the
third quarter was $0.11 per share ($0.11 diluted), compared to $0.05 per share
($0.05 diluted) for the third quarter of 1997.
On October 15, 1998, the Company announced the termination of its
planned underwritten offering. As a result, costs related to the offering of
approximately $342,000, which had been capitalized as of September 30, 1998,
will be charged to operations in the fourth quarter of 1998.
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RISK FACTORS
Investment in the shares of common stock involve a high degree of
risk. The following risk factors should be considered carefully in addition to
the other information contained in this prospectus or incorporated herein by
reference. Except for the historical information contained herein, the
discussion in this prospectus contains certain forward-looking statements that
involve risks and uncertainties, such as statements of the Company's plans,
objectives, expectations and intentions. The cautionary statements made in this
prospectus should be read as being applicable to all forward-looking statements
wherever they appear in this prospectus. The Company's actual results could
differ materially from those discussed in this prospectus. Factors that could
cause or contribute to such differences include those discussed below, as well
as those discussed elsewhere herein. See "Special Note Regarding
Forward-Looking Statements" on page 17 of this prospectus.
FLUCTUATIONS IN QUARTERLY OPERATING RESULTS
The Company's revenues and operating results are subject to quarterly
and other fluctuations resulting from a variety of factors, including the
budgeting and purchasing practices of its customers, the length of customer
evaluation processes for the Company's solutions and the timing of customer
system conversions. Because a substantial portion of revenues may not be
generated until the end of each quarter, the Company may not be able to adjust
or reduce spending in response to sales shortfalls or delays. In addition, the
Company's expense levels are based, in significant part, on the Company's
expectations of future revenues and are therefore relatively fixed in the short
term. If revenues fall below expectations, net income is likely to be adversely
affected. These factors can cause significant variations in operating results
from quarter to quarter. The Company believes that quarter to quarter
comparisons of its financial results are not necessarily meaningful and should
not be relied upon as an indication of future performance.
RISKS ASSOCIATED WITH PUBLIC SECTOR MARKET
Substantially all of the Company's revenues to date have been
attributable to sales of software and services rendered to state, county and
city governments, other municipal agencies and publicly owned utilities. The
Company expects that sales to public sector customers will continue to account
for substantially all of the Company's revenues in the future. The sales cycle
associated with the purchase of the Company's products is typically complex,
lengthy and subject to a number of significant risks, including customers'
budgetary constraints and governmental acceptance reviews over which the
Company has little or no control.
For each contract with a public sector customer, the Company is
typically subject to a protracted procurement process. The process can include
a detailed written response to the demonstrations, the design of software that
addresses customer-specified needs, the integration of Company and third party
products, political influences, award protests initiated by unsuccessful
bidders and changes in budgets or appropriations which are beyond the Company's
control. Contracts with public sector customers are typically subject to
procurement policies which may be onerous and may include profit limitations
and rights of the agency to terminate for convenience or if funds are
unavailable. Some public sector customers require liquidated damages for
defective products and/or for delays or interruptions caused by system
failures. Payments under some public sector contracts are subject to achieving
implementation milestones, and the Company has had, and may in the future have,
differences with customers as to whether milestones have been achieved.
Government organizations require compliance with various legal and
other special considerations in the procurement process. The adoption of new or
modified procurement regulations could adversely affect the Company by
increasing costs to the Company of competing for sales or by impacting the
Company's ability to perform government contracts. Any violation (intentional
or otherwise) of these regulations could result in the imposition of fines,
and/or debarment from award of additional government contracts which could have
a material adverse effect on the Company.
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MANAGEMENT OF GROWTH
As a result of both acquisitions and successful operations, the
Company has recently experienced a period of significant revenue growth and an
expansion in the number of its employees, the scope of its operating and
financial systems and the geographic area of its operations. This growth has
resulted in new and increased responsibility for management personnel and has
placed additional demands upon the Company's operational, administrative and
financial resources. To accommodate recent growth, compete effectively and
manage potential future growth, the Company must continue to implement and
improve information systems, procedures and controls and expand, train,
motivate and manage its staff. These demands will require the addition of new
management and other qualified personnel. There can be no assurance that the
Company's personnel, systems, procedures and controls will be adequate to
support the Company's future operations or to integrate successfully operations
and personnel of acquired entities. Any failure to implement and improve the
Company's operational, financial and management systems, to integrate
operations of acquired businesses or to expand, train, motivate or manage
employees could have a material adverse effect on the Company's business,
operating results and financial condition.
ABILITY TO RETAIN AND ATTRACT PERSONNEL
The Company's continued success will depend upon the availability and
performance of its key management, sales, marketing, customer support and
product development personnel. The loss of key management or technical
personnel could adversely affect the Company. The Company believes that its
continued success will depend in large part upon its ability to attract and
retain such personnel. The Company has at times experienced and continues to
experience difficulty in recruiting qualified personnel. Competition for
qualified software development, sales and other personnel is intense, and there
can be no assurance that the Company will be successful in attracting and
retaining such personnel.
ABILITY TO RESPOND TO TECHNOLOGICAL CHANGE
The Company's future success will depend significantly on its ability
to enhance its current products and develop or acquire and market new products
which keep pace with technological developments and evolving industry standards
as well as respond to changes in customer needs. The market for the Company's
products is characterized by rapid technological change, evolving industry
standards in computer hardware and software technology, changes in customer
requirements and frequent new product introductions and enhancements. The
introduction of products embodying new technologies and the emergence of new
industry standards can render existing products obsolete and unmarketable. As a
result, the Company's future success will depend, in part, upon its ability to
continue to enhance existing products and develop and introduce in a timely
manner or acquire new products that keep pace with technological developments,
satisfy increasingly sophisticated customer requirements and achieve market
acceptance. There can be no assurance that the Company will successfully
identify new product opportunities and develop and bring new products to market
in a timely and cost-effective manner, or that products, capabilities or
technologies developed by others will not render the Company's products or
technologies obsolete or noncompetitive. If the Company is unable to develop or
acquire on a timely and cost-effective basis new software products or
enhancements to existing products, or if such new products or enhancements do
not achieve market acceptance, the Company's business, operating results and
financial condition may be materially adversely affected.
RISKS ASSOCIATED WITH ACQUISITIONS
A fundamental element of the Company's strategy is to grow through
acquisitions. As part of its growth strategy, the Company evaluates the
acquisition of other companies, assets or product lines that would complement
or expand its business in attractive geographic or service markets or that
would broaden its customer relationships. There can be no assurance that the
Company will be able to identify suitable acquisition candidates available for
sale at reasonable prices, consummate any acquisition or successfully
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integrate any acquired business into the Company's operations. The success of
any completed acquisition will depend in large measure on the Company's ability
to integrate the operations of the acquired business with those of the Company
and otherwise to maintain and improve the results of operations of the acquired
business. Acquisitions may involve a number of special risks, including
diversion of management's attention, failure to retain key acquired personnel,
unanticipated events or circumstances, legal liabilities and amortization of
acquired intangible assets, some or all of which could have a material adverse
effect on the Company's business, financial condition and results of
operations. Although the Company conducts due diligence reviews of potential
acquisition candidates, the Company may not identify all material liabilities
or risks related to acquisition candidates.
The Company may elect to finance acquisitions with possible debt
financing or through the issuance of equity securities, or any combination of
the foregoing. There can be no assurance that the Company will be able to
arrange adequate financing on acceptable terms. If the Company were to
consummate one or more significant acquisitions in which the consideration
consisted of stock, shareholders of the Company could suffer dilution of their
interests in the Company. Most of the businesses that might become attractive
acquisition candidates for the Company are likely to have significant intangible
assets, and acquisition of these businesses, if accounted for as a purchase,
would typically result in substantial amortization charges to the Company, which
would reduce future earnings. In addition, such acquisitions could involve
non-recurring acquisition-related charges, such as write-offs or write-downs of
acquired research and development costs, which could have a material adverse
effect on the Company's results of operations for the accounting period in which
such charges are incurred.
COMPETITION
The Company believes it is a leading provider of integrated
enterprise-wide solutions for the public sector and utility markets. However,
the Company faces competition from a variety of software vendors that offer
products and services similar to those offered by the Company, and from
companies offering to develop custom software. Certain competitors have greater
technical, marketing and financial resources than the Company. The Company also
competes with in-house IT staffs.
The Company believes the market is highly fragmented with a large
number of competitors that vary in size, primary computer platforms and overall
product scope. The Company competes from time to time with (i) the consulting
divisions of national and regional accounting firms; (ii) companies which focus
on selected segments of the public sector and utilities markets including
PeopleSoft, Inc., Systems & Computer Technology Corp. and J.D. Edwards &
Company, Inc.; and (iii) a significant number of smaller private companies.
There can be no assurance that such competitors will not develop products or
offer services that are superior to the Company's products or services or that
achieve greater market acceptance.
The Company could face additional competition as other established and
emerging companies enter the public sector software application market and new
products and technologies are introduced. Increased competition could result in
price reductions, fewer customer orders, reduced gross margins and loss of
market share. In addition, current and potential competitors may make strategic
acquisitions or establish cooperative relationships among themselves or with
third-parties, thereby increasing the ability of their products to address the
needs of the Company's prospective customers. It is possible that new
competitors or alliances among current and new competitors may emerge and
rapidly gain significant market share. Further, competitive pressures could
require the Company to reduce the price of its software licenses and related
services. There can be no assurance that the Company will be able to compete
successfully against current and future competitors, and the failure to do so
would have a material adverse effect upon the Company's business, operating
results and financial condition.
DEPENDENCE ON KEY SUPPLIERS AND STRATEGIC RELATIONSHIPS
The Company purchases certain key components of its products,
including the adapter code and certain application development tools, from
single or limited source suppliers. For certain of these
9
<PAGE> 12
components, there are relatively few suppliers. The Company currently has
relatively few agreements that would assure delivery of such components from
such suppliers. Generally, these contracts are terminable by either party upon
60 to 90 days notice. Establishing additional or replacement suppliers for any
of the numerous components used in the Company's products, if required, may not
be accomplished or could involve significant additional costs. The ability of
any of the Company's suppliers to provide functional components in a timely
manner, or the inability of the Company to locate qualified alternative
suppliers for components at a reasonable cost, could adversely affect the
Company's business, financial condition and results of operations. The
Company's success also depends in part upon its alliances and relationships
with leading hardware and software vendors. A change in these relationships
could have a material adverse effect on its results of operations and financial
condition while the Company seeks to establish alternative relationships. In
addition, substantially all of the Company's hardware revenues are derived from
the sale of IBM AS/400 systems in connection with the Company's remarketer
arrangements with IBM. Any change in this relationship could have an adverse
effect on the Company's financial performance. The Company may need to
establish additional alliances and relationships in order to keep pace with
changes in technology and there can be no assurance such additional alliances
will be established.
The Company relies primarily on distribution channels for sales of its
recently acquired line of field-based reporting software products. The Company
has established strategic marketing alliances with several large vendors for
these products. Other businesses that the Company may acquire in the future may
also sell their products primarily through similar marketing alliances or other
collaborative relationships. The maintenance of those alliances and the
establishment of additional alliances may be necessary for increased market
penetration for such products. Certain of the Company's competitors may have
already established such alliances with desired vendors who, as a result, may
have limited interests in creating alliances with the Company. There can be no
assurance that the Company will be able to negotiate any additional strategic
relationships, that such additional relationships will be available to the
Company on acceptable terms or that any such relationships, if established,
will be commercially successful. Failure to do so could have a material adverse
effect on the Company's business, financial condition and results of
operations.
RISKS OF SOFTWARE DEFECTS AND PRODUCT LIABILITY
Software products as complex as those developed by the Company may
contain errors or defects, especially when first introduced or when new
versions or enhancements are released. Although the Company has not experienced
material adverse effects resulting from any such defects or errors to date,
there can be no assurance that material defects and errors will not be found
after commencement of product shipments. Any such defects could result in loss
of revenues or delay market acceptance.
The Company markets complex, mission-critical, enterprise-wide
applications. 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 as a result of existing or future federal, state or local laws or
ordinances or judicial decisions. Although the Company has not experienced any
significant product liability claims to date, the sale, installation and
support of software by the Company may entail the risk of such claims, which
may be substantial. A successful product liability claim brought against the
Company could have a material adverse effect upon the Company's business,
operating results and financial condition.
PROPRIETARY RIGHTS, RISKS OF INFRINGEMENT AND SOURCE CODE RELEASE
The Company regards certain features of its internal operations,
software and documentation as confidential and proprietary, and relies on a
combination of contract and trade secret laws and other measures to protect its
proprietary intellectual property. The Company owns no patents and, under
existing copyright laws, has only limited protection for its intellectual
property. The Company believes that, due to the rapid rate of technological
change in the computer software industry, trade secret and copyright
10
<PAGE> 13
protection are less significant than factors such as the knowledge, ability and
experience of the Company's employees, frequent product enhancements and
timeliness and quality of support services.
The Company provides its products to customers under exclusive
licenses, which generally are non-transferable and have a perpetual term. The
Company generally licenses its products solely for the customer's internal
operations and only on designated computers. In certain circumstances, the
Company makes enterprise-wide licenses available for select applications.
Although the Company currently provides object code to its customers and not
source code, the Company historically provided source code to its customers for
several products. The Company has escrowed and continues to escrow its source
code for the benefit of all customers. A misappropriation or other misuse of
the Company's intellectual property, including source codes previously
delivered to customers, could have an adverse effect on the Company. Further,
there can be no assurance that third parties will not assert infringement or
misappropriation claims against the Company in the future with respect to
current or future products. Any claims or litigation, with or without merit,
could be time-consuming, result in costly litigation, diversion of management's
attention and cause product shipment delays or require the Company to enter
into royalty or licensing arrangements. Such royalty or licensing arrangements,
if required, may not be available on terms acceptable to the Company, if at
all. Litigation to defend and enforce the Company's intellectual property
rights could result in substantial costs and diversion of resources and could
have a material adverse effect on the Company's business, financial condition
and results of operations, regardless of the final outcome of such litigation.
The Company may be subject to additional risks as it enters into transactions
in countries where intellectual property laws are not well developed or are
poorly enforced. Legal protections of the Company's rights may be ineffective
in such countries.
YEAR 2000 COMPLIANCE
Many installed computer systems and software products are coded to
accept only two digit entries in the date code field. These date code fields
will need to accept four digit entries to distinguish 21st century dates from
20th century dates. As a result, in less than two years, computer systems
and/or software used by many organizations may need to be upgraded to comply
with such "Year 2000" requirements. Significant uncertainty exists in the
software industry concerning the potential effects associated with such
compliance. The Company does not believe that it has material exposure to the
Year 2000 issue with respect to its own information systems. The Company
believes that the current versions of its products are Year 2000 compliant. The
Company regularly runs regression tests on its software, including tests of the
Year 2000 rollover. Based on the above, it is not expected that the Company's
products will be adversely affected by date changes in the year 2000. However,
there can be no assurance that the Company's products contain and will contain
all features and functionality considered necessary by customers, distributors,
resellers and systems integrators to be Year 2000 compliant. Notwithstanding
that the Company regularly provides free software upgrades to its customers and
that recent upgrades are Year 2000 compliant, certain customers of the Company
may still be running earlier, noncompliant versions of the Company's products.
The Company is in the process of informing customers of the need to migrate to
current products that management believes are Year 2000 compliant. Although the
Company believes that the information systems of its major vendors (insofar as
they relate to the Company's business) comply with Year 2000 requirements,
there can be no assurance that the Year 2000 issue will not affect the
information systems of the Company's major vendors as they relate to the
Company's business, or that any such impact of a major vendor's information
system would not have a material adverse effect on the Company. The Company has
no contingency plan as such, however the Company believes it should be able to
identify alternative vendors if the need arises. The Company anticipates that
generally throughout the software industry substantial litigation may be
brought against software vendors of non-compliant operating environments. Any
such claims against the Company, with or without merit, could have a material
adverse effect on the Company's business, operating results and financial
condition.
11
<PAGE> 14
RISKS ASSOCIATED WITH INTERNATIONAL SALES
The Company has sold products to customers in Canada, the Caribbean,
and the United Kingdom. Management expects to augment its presence in
international markets. Accordingly, the Company's business, and its ability to
expand its operations internationally, is subject to the risks inherent in
international business activities, including, in particular, greater difficulty
in safeguarding its intellectual property, general economic and political
conditions in each country, foreign currency exchange rate fluctuations,
overlap of different tax structures, difficulty in staffing and managing an
organization spread over various countries (should the Company elect to
establish a presence in international markets rather than through independent
sales representatives), unexpected changes in regulatory requirements,
compliance with a variety of foreign laws and regulations, and longer accounts
receivable payment cycles in certain countries. Other risks associated with
international operations include import and export licensing requirements,
trade restrictions and changes in tariff rates. Any of the foregoing factors
could have a material adverse effect on the Company's ability to expand its
international sales. In addition, the Company must translate its software into
foreign languages. To the extent that the Company is unable to accomplish such
translations in a timely manner, the Company's ability to further penetrate
international markets would be adversely affected. The deeper exposure to
international markets creates new areas with which the Company is not familiar
and places the Company in competition with new vendors. There is no assurance
the Company will be successful in its efforts to compete in these international
markets.
If the Company significantly expands its international business, it
anticipates that it will hedge exchange rate movements on either side of a
locked-in spot rate for movements within certain ranges on dollar-foreign
currency rates. Changes in the value of foreign currencies relative to the
dollar beyond the ranges hedged by the Company could affect its financial
condition and results of operations, and gains and losses on currency
translations could contribute to fluctuations in the Company's results of
operations.
POTENTIAL VOLATILITY OF STOCK PRICE
The market price of the common stock may be volatile and may be
significantly affected by factors such as actual or anticipated fluctuations in
the Company's operating results, announcements of technological innovations,
new products or new contracts by the Company or its competitors, developments
with respect to patents, copyrights or proprietary rights, conditions and
trends in the software and other technology industries, adoption of new
accounting standards affecting the software industry, changes in financial
estimates by securities analysts, general market conditions and other factors.
In addition, the stock market has from time to time experienced significant
price and volume fluctuations that have particularly affected the market prices
for the common stock of technology companies. These broad market fluctuations
may adversely affect the market price of the common stock. In the past,
following periods of volatility in the market price of a particular company's
securities, securities class action litigation has often been brought against
the company. There can be no assurance that such litigation will not occur in
the future with respect to the Company; such litigation could result in
substantial costs and a diversion of management's attention and resources,
which could have a material adverse effect upon the Company's business,
operating results and financial condition.
CONTROL BY OFFICERS AND DIRECTORS
Assuming the present Directors and executive officers of the Company
and their affiliates will beneficially own approximately 35% of the outstanding
common stock after this offering, as a result, these shareholders would likely
be able to effectively control most matters requiring shareholder approval,
including the election of directors and approval of significant corporate
transactions. Such concentration of ownership may have the effect of delaying
or preventing a change in control of the Company.
12
<PAGE> 15
ABSENCE OF CASH DIVIDENDS
The Company has not paid cash dividends on its common stock in the
past. The Company presently intends to retain earnings for its business and
does not anticipate paying any cash dividends in the foreseeable future.
EFFECT OF CERTAIN CHARTER AND BYLAW PROVISIONS; ANTI-TAKEOVER EFFECTS
Certain provisions of Florida law and the Company's Articles of
Incorporation, as amended ("Amended Articles"), may deter or frustrate a
takeover attempt of the Company that a shareholder might consider in its best
interest. The Company is subject to the "affiliated transactions" and "control
share acquisition" provisions of the Florida Business Corporation Act. These
provisions require, subject to certain exceptions, that an "affiliated
transaction" be approved by the holders of two-thirds of the voting shares
other than those beneficially owned by an "interested shareholder" or by a
majority of disinterested directors. Voting rights must also be conferred on
"control shares" acquired in specified control share acquisitions, generally
only to the extent conferred by resolution approval by the shareholders,
excluding holders of shares defined as "interested shares." In addition,
certain provisions of the Company's Amended Articles or Bylaws, among other
things, provide that (i) any action required or permitted to be taken by the
shareholders of the Company may be effected only at an annual or special
meeting of shareholders, and not by written consent of the shareholders, (ii)
the annual meeting of shareholders shall be held on such date and at such time
fixed from time to time by the Board of Directors, provided that there shall be
an annual meeting held every calendar year, (iii) any special meeting of the
shareholders may be called only by the Chairman of the Board, or upon the
affirmative vote of at least a majority of the members of the Board of
Directors, or upon the written demand of the holders of not less than 50% of
the votes entitled to be cast at a special meeting, (iv) an advance notice
procedure must be followed for nomination of directors and for other
shareholder proposals to be considered at annual shareholders' meetings, and
(v) the Company's Board of Directors be divided into three classes, each of
which serves for different three-year periods. In addition, the Company will be
authorized to issue additional shares of common stock and up to five million
shares of preferred stock in one or more series, having terms fixed by the
Board of Directors without shareholder approval, including voting, dividend or
liquidation rights that could be greater than or senior to the rights of
holders of common stock. Issuance of additional shares of common stock or new
shares of Preferred Stock could also be used as an anti-takeover device.
USE OF PROCEEDS
This prospectus relates to shares of common stock being offered and
sold for the account of the selling shareholders. The Company will not receive
any proceeds from the sale of the common stock but will pay all expenses
related to the registration of the shares.
13
<PAGE> 16
SELLING SHAREHOLDERS
The following table sets forth the name of each selling shareholder,
the aggregate number of shares of common stock beneficially owned by each
selling shareholder as of the date of this prospectus, and the aggregate number
of shares of common stock that each selling shareholder may offer and sell
pursuant to this prospectus. Because the selling shareholders may offer all or
a portion of the shares at any time and from time to time after the date of
this prospectus, no estimate can be made of the number of shares that each
selling shareholder may retain upon completion of the offering.
The selling shareholders consist of the following categories of
persons: (i) BancBoston Ventures, Inc., a venture capital investor that has
held its shares since November 1994; (ii) various institutional and individual
limited partners of a venture capital partnership that held its shares from
March 1995 until it recently distributed such shares to its partners (a total
of 8 investors selling 794,553 shares); (iii) two former shareholders of
Phoenix selling a total of 272,036 shares received in connection with the
Company's acquisition of Phoenix in April 1998; (iv) former shareholders and
options holders of UCS. who received their shares in connection with the
Company's acquisition of UCS in June 1998, representing a total of 51 persons
selling a total of 573,578 shares, excluding 546,422 shares that are held by
Mr. Ramos, an officer of the Company and former principal shareholder of UCS;
and (v) certain directors and officers of the Company selling a total of
1,325,422 shares, including the 546,422 shares being sold by Mr. Ramos,
referenced above.
To the knowledge of the Company, none of the selling shareholders has
had within the past three years any material relationship with the Company or
any of its predecessors or affiliates, except as set forth in the footnotes to
the following table.
14
<PAGE> 17
<TABLE>
<CAPTION>
NUMBER OF SHARES SHARES SHARES OWNED ASSUMING
OWNED AS OF THE DATE COVERED BY THIS SALE OF ALL SHARES COVERED
OF PROSPECTUS(1) PROSPECTUS BY THIS PROSPECTUS
-------------------- -------------------- --------------------------
NAME OF SELLING SHAREHOLDERS NUMBER NUMBER NUMBER PERCENT
- -------------------------------------- -------------------- -------------------- ------------ ------------
<S> <C> <C> <C> <C>
Dennis J. Harward(2) 3,713,798 300,000 3,413,798 20.2%
Jack L. Harward(3) 2,505,154 300,000 2,205,154 13.1%
O.F. Ramos(4) 546,422 546,422 -0- -0-
Daniel E. Catan(5) 122,028 20,000 102,028 *
Ronald E. Goodrow(6) 169,600 53,000 116,600 *
Robert W. Nelson(7) 283,468 283,468 -0- *
William K. North(8) 172,846 172,846 -0- *
George A. Sheehy(9) 136,018 136,018 -0- *
David N. Way(10) 136,018 136,018 -0- *
George P. Keeley 30,394 30,394 -0- -0-
Raymond R. Rafferty, Jr. 87,654 40,000 47,654 *
BancBoston Ventures, Inc. 1,112,432 1,112,432 -0- -0-
CoreStates Holdings, Inc. 416,391 416,391 -0- -0-
G & S Investment Group Limited
Partnership(11) 212,000 106,000 106,000 *
The Philadelphia Municipal Employees
Retirement System 90,520 90,520 -0- -0-
NatWest Group Holdings Corporation 90,520 90,520 -0- -0-
Summit Bancorp 54,312 54,312 -0- -0-
First Maryland Bancorp. 36,208 36,208 -0- -0-
PNC Bank, Delaware 36,208 36,208 -0- -0-
Certain Employees (49) of HTE-UCS, Inc.12) 117,264 117,264 -0- *
---------
4,078,021
</TABLE>
- ------------------
* Less than 1%.
(1) A person is deemed to be the beneficial owner of securities that can be
acuired by such person within 60 days from the date hereof either from
the exercise of options or from the conversion of a security.
(2) Mr. D. Harward has been President, Chief Executive Officer and Chairman of
the Board of the Company since 1981.
(3) Mr. J. Harward has been Executive Vice President and a Director of the
Company since 1983.
(4) Mr. Ramos, a Director of the Company since August 1998, has been
Executive Vice President of the Company and President of HTE-UCS, Inc.
since June 1998 and prior to that date was the President, Chief Executive
Officer, a Director and a principal (51.5%) shareholder of UCS. Includes
30,268 shares of common stock held in escrow for 180 days following the
June 1, 1998 closing of the UCS acquisition, pursuant to the terms and
conditions of an escrow agreement.
(5) Includes 121,200 shares of common stock that Mr. Catan may acquire within
60 days upon exercise of stock options. Mr. Catan has been Vice President
and Chief Marketing Officer since July 1996.
(6) Includes 116,600 shares of common stock that Mr. Goodrow may acquire
within 60 days upon exercise of stock options. Mr. Goodrow is a former
officer of the Company and was the Vice President -- Operations from
August 1995 to September 1998.
(7) Mr. Nelson has been Vice President -- Marketing and Chief Marketing
Officer with HTE-UCS, Inc. since June 1998 and was Vice President of
Marketing and a principal (26.7%) shareholder of UCS. Includes 15,710
shares of common stock held in escrow for 180 days following the June 1,
1998 closing of the UCS acquisition, pursuant to the terms and conditions
of an escrow agreement.
(8) Mr. North has been Vice President -- Research of HTE-UCS, Inc. since
June 1998 and was a principal (16.3%) shareholder of UCS. Includes 9,578
shares of common stock held in escrow for 180 days following the June 1,
1998 closing of the UCS acquisition, pursuant to the terms and conditions
of an escrow agreement.
(9) Mr. Sheehy has been Vice President of HTE-Phoenix Systems LLC since April
1998 and formerly held the same position with, and was a 50% equity owner
of Phoenix prior to HTE's acquisition of that company. Includes 13,602
shares of common stock held in escrow for 240 days following the April 1,
1998 closing of the acquisition of Phoenix pursuant to the terms of an
escrow agreement.
(10) Mr. Way has been President of HTE-Phoenix Systems LLC since April 1998
and formerly held the same position with, and was a 50% equity owner of
Phoenix prior to HTE's acquisition of that company. Includes 13,602
shares of common stock held in escrow for 240 days following the April 1,
1998 closing of the acquisition of Phoenix pursuant to the terms of an
escrow agreement.
(11) Mr. L.A. Gornto, Jr., Executive Vice President, Secretary and General
Counsel for the Company since January 1997 is deemed the beneficial owner
of 106,000 shares held by the G & S Investment Group Limited Partnership
("G & S Partnership"), in which Mr. Gornto is the general partner and he
and his spouse are the limited partners. The ownership table includes
106,000 shares of common stock that Mr. Gornto may acquire within 60 days
upon exercise of stock options. Mr. Gornto was Chief Financial Officer of
the Company from January 1997 to November 1997. Prior to January 1997,
Mr. Gornto provided legal services to the Company.
(12) Represents shares of the Company's common stock received by various UCS
optionholders (employees) in connection with the acquisition of UCS by
the Company, which shares in the aggregate represent less than 1% of the
issued and outstanding shares of common stock of the Company. Excludes
shares of common stock beneficially owned by Messrs. Ramos, Nelson and
North, who are identified individually in the foregoing table.
15
<PAGE> 18
PLAN OF DISTRIBUTION
The Company intends to use its best efforts to keep the registration
statement, of which this prospectus is a part, effective for 12 months from the
effective date of this prospectus or until the selling shareholders have sold
their shares, whichever first occurs.
Since the selling shareholders may offer all or part of the shares of
common stock set forth in this prospectus, and since this offering is not being
underwritten on a firm commitment basis, no estimate can be given as to the
amount of shares of common stock to be offered for sale by the selling
shareholders.
The selling shareholders may sell or distribute some or all of the
shares of common stock offered by this prospectus from time to time through
dealers or brokers or directly to one or more purchasers, including pledgees,
in transactions (which may involve block transactions) on the NASDAQ National
Market, in transactions occurring in the public market off the NASDAQ National
Market, privately negotiated transactions (including sales pursuant to
pledges), or in a combination of such transactions. Such transactions may be
effected by the selling shareholders at market prices prevailing at the time of
sale, at prices related to such prevailing market prices, at negotiated prices,
or at fixed prices, which may be changed. Brokers or dealers participating in
such transactions as agents may receive compensation in the form of discounts,
concessions or commissions from the selling shareholders (and, if they act as
agent for the purchaser of such shares, from such purchaser). Such discounts,
concessions or commissions as to a particular broker or dealer might be in
excess of those customary in the type of transaction involved. This prospectus
also may be used, with the Company's consent, by donees of the selling
shareholders, or by other persons acquiring shares and who wish to offer and
sell such shares under circumstances requiring or making desirable its use. In
addition, any shares covered by this prospectus which qualify for sale pursuant
to Rule 144 of the Securities Act, may be sold under Rule 144 rather than
pursuant to this prospectus.
The selling shareholders and any such brokers or dealers that
participate in such distribution may be deemed to be "underwriters" within the
meaning of the Securities Act, and any discounts, commissions or concessions
received by any such brokers or dealers might be deemed to be underwriting
discounts and commissions under the Securities Act. Neither the Company nor the
selling shareholders can presently estimate the amount of such compensation.
Under applicable rules and regulations under the Exchange Act, any
person engaged in a distribution of any of the shares may not simultaneously
engage in market activities with respect to the common stock for the applicable
period under Regulation M prior to the commencement of such distribution. In
addition and without limiting the foregoing, the selling shareholders will be
subject to applicable provisions of the Exchange Act and the rules and
regulations thereunder, including, without limitation, Rules 10b-5 and
Regulation M, which provisions may limit the timing of purchases and sales of
any of the shares by the selling shareholders. All of the foregoing may affect
the marketability of the common stock.
The Company will receive no portion of the proceeds from the sale of
the shares of common stock. The Company will bear all of the expenses incident
to the registration of the shares for this offering by the selling shareholders
other than commissions and discounts of brokers or dealers, transfer tapes, if
any, and counsel fees and expenses incurred by the selling shareholders. Each
selling shareholder may indemnify any broker or dealer that participates in
transactions involving sales of the shares against certain liabilities,
including liabilities arising under the Securities Act. The Company may agree
to indemnify the selling shareholders and any such statutory "underwriters" and
controlling persons of such "underwriters" against certain liabilities
including certain liabilities arising under the Securities Act.
16
<PAGE> 19
In order to comply with certain states' securities laws, if
applicable, the shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
common stock may not be sold unless the common stock has been registered or
qualified for sale in such state or an exemption from registration or
qualification is available and is complied with.
LEGAL
The validity of the common stock covered by this prospectus has been
passed upon by Greenberg Traurig, P.A., Orlando, Florida.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act, and Section 21E of the Exchange
Act, with respect to the Company's business, financial condition and results of
operations. When used in this prospectus, the words "may," "will," "intends,"
"plans," "expects," "anticipates," "estimates," and similar expressions are
intended to identify forward-looking statements. The forward-looking statements
included herein are subject to risks and uncertainties. The Company's actual
results could differ materially from those discussed in the forward-looking
statements. Factors that could cause or contribute to such differences include,
but are not limited to, those discussed in "Risk Factors," as well as those
discussed elsewhere in this prospectus. Investors are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of the
date hereof. The Company undertakes no obligation to publicly release any
revisions to these forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
17
<PAGE> 20
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The Company estimates that expenses in connection with the Offering
described in this registration statement (other than brokerage discounts,
commissions and fees and legal fees incurred by the selling shareholders, if
any, shall be payable by such selling shareholders) will be as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee $12,632
-------
Legal fees and expenses 15,000*
-------
Accounting fees and expenses 5,000*
-------
Printing Expenses 3,000*
-------
Blue Sky Fees 9,500*
-------
Miscellaneous Expenses 3,000*
-------
Total 48,132*
=======
</TABLE>
*All amounts shown, except the Securities and Exchange Commission registration
fee, are estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant has authority under Section 607.0850 of the Florida
Business Corporation Act to indemnify its directors and officers to the extent
provided in such statute. The Registrant's Amended and Restated Articles of
Incorporation provide that the Registrant may indemnify its executive officers
and directors to the fullest extent permitted by law either now or hereafter.
The Registrant has also entered into an agreement with each of its directors
and certain of its officers wherein it has agreed to indemnify each of them to
the fullest extent permitted by law.
The provisions of the Florida Business Corporation Act that authorize
indemnification do not eliminate the duty of care of a director, and in
appropriate circumstances equitable remedies such as injunctive or other forms
of nonmonetary relief will remain available under Florida law. In addition,
each director will continue to be subject to liability for (a) violations of
the criminal law, unless the director had reasonable cause to believe his
conduct was lawful or had no reasonable cause to believe his conduct was
unlawful; (b) deriving an improper personal benefit from a transaction; (c)
voting for or assenting to an unlawful distribution; and (d) willful misconduct
or a conscious disregard for the best interests of the Registrant in a
proceeding by or in the right of the Registrant to procure a judgment in its
favor or in a proceeding by or in the right of a shareholder. The statute does
not affect a director's responsibilities under any other law, such as the
federal securities laws or state or federal environmental laws.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended (the "1933 Act") may be permitted to
directors, officers or controlling persons of Registrant, pursuant to the
foregoing provisions or otherwise, Registrant has been advised that, in the
opinion of the Securities and Exchange Commission (the "Commission"), such
indemnification is against public policy as expressed in the 1933 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 Registrant in the
successful defense of any suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered hereunder, 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 1933 Act and will be governed by the
final adjudication of such issue.
II-1
<PAGE> 21
ITEM 16. EXHIBITS.
The Exhibits to this Registration Statement are listed in the Index to
Exhibits on Page II-6.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(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 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 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 of 1933, 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.
(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) 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 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 of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions, 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 incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action, suit or
II-2
<PAGE> 22
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.
[REMAINDER OF PAGE INTENTIONALLY OMITTED]
II-3
<PAGE> 23
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Amendment No. 2 to the Registration Statement
on Form S-3 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Lake Mary, State of Florida on October 26, 1998.
H.T.E., Inc.
By: /s/ Dennis J. Harward
----------------------------------
Dennis J. Harward
Chairman of the Board, President
and Chief Executive Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 2 to the Registration Statement on Form S-3 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/ Dennis J. Harward Chairman of the Board, President, Chief October 26, 1998
- --------------------------------------- Executive Officer and Director
Dennis J. Harward (principal executive officer)
/s/ Jack L. Harward Executive Vice President and Director October 26, 1998
- ---------------------------------------
Jack L. Harward
/s/ O. F. Ramos Executive Vice President and Director October 26, 1998
- ---------------------------------------
O. F. Ramos
/s/ Susan D. Falotico Vice President, Chief Financial Officer October 26, 1998
- --------------------------------------- (principal financial officer)
Susan D. Falotico
Director October __, 1998
--------------------------------------
Bernard Markey
Director October __, 1998
--------------------------------------
Raymond Ambrose
</TABLE>
II-4
<PAGE> 24
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C>
4.1 Stock Option Agreement between the Company and
Daniel E. Catan, dated July 1, 1996(1)
5.1 Opinion of Greenberg Traurig, P.A.
23.1 Consent of Greenberg Traurig, P.A. (contained in its
opinion filed as Exhibit 5.1 hereto).
23.2 Consent of Arthur Andersen LLP
23.3 Consent of PricewaterhouseCoopers LLP
24.1 Power of Attorney is included in the Signatures section of
this Registration Statement.(2)
27.1 Financial Data Schedule for the year ended
March 31, 1996 (For SEC use only).(2)
27.2 Financial Data Schedule for the nine months
ended December 31, 1996 (For SEC use only).(2)
27.3 Financial Data Schedule for the year ended
December 31, 1997 (For SEC use only).(2)
27.4 Financial Data Schedule for the six months
ended June 30, 1997 (For SEC use only).(2)
27.5 Financial Data Schedule for the nine months
ended September 30, 1997 (For SEC use only).(2)
27.6 Financial Data Schedule for the three months
ended March 31, 1998 (For SEC use only).(2)
</TABLE>
(1) Incorporated by reference to Exhibit 10.3 filed with Amendment No. 1 to
From S-1 Registration Statement, No. 333-22637.
(2) Previously filed.
II-5
<PAGE> 1
Exhibit 5.1
October 26, 1998
H.T.E., Inc.
1000 Business Center Drive
Lake Mary, Florida 32746
Re: H.T.E., Inc.
Gentlemen:
You have requested our opinion in connection with the Registration
Statement on Form S-3 (the "Registration Statement") of H.T.E., Inc. (the
"Company") relating to an aggregate of 4,058,021 issued and outstanding shares
of the Company's common stock, par value $.01 per share, and 20,000 shares of
common stock issuable upon exercise of an option (the "shares"), held by the
selling shareholders (as defined in the Registration Statement).
We have made such examination of the corporate records and proceedings
of the Company and have taken such further action as we deemed necessary or
appropriate to the rendering of our opinion herein.
Base on the foregoing, we are of the opinion that the 4,058,021 shares
have been legally issued, fully paid and non-assessable. Further, we are of the
opinion that the 20,000 shares of common stock underlying an option, when paid
for and issued as contemplated by the applicable option agreement, will be
legally issued, fully paid and non-assessable. Therefore, the purchasers
acquiring shares upon subsequent resale as contemplated in the Registration
Statement will receive shares that, as applicable, have been or will be legally
issued, fully paid and non-assessable by the Company.
We hereby consent to the filing of this opinion with the Securities
and Exchange Commission as an exhibit to the Registration Statement and to the
reference to our firm under the heading "Legal Matters" therein.
Sincerely,
/s/ GREENBERG TRAURIG, P.A.
<PAGE> 1
Exhibit 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
incorporation by reference in this Registration Statement of our report dated
August 3, 1998, included in H.T.E., Inc.'s Current Report on Form 8-K filed on
August 19, 1998, and to all references to our Firm included in this
Registration Statement.
Orlando, Florida,
October 26, 1998
/s/ Arthur Andersen LLP
<PAGE> 1
Exhibit 23.3
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of H.T.E., Inc. of our reports dated April 10, 1998, July
7, 1998 and September 4, 1996, relating to the financial statements of UCS,
Inc., which appear in the Current Report on Form 8-K of H.T.E., Inc. dated
August 19, 1998.
/s/ PricewaterhouseCoopers LLP
Miami, Florida
October 26, 1998
