<PAGE>
As filed with the Securities and Exchange Commission on June 24, 1998
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
---------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
SANCHEZ COMPUTER ASSOCIATES, INC.
(Exact Name of Registrant as Specified in Its Charter)
PENNSYLVANIA 23-2161560
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
40 VALLEY STREAM PARKWAY
MALVERN, PA 19355
610-296-8877
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
------------------------------------
JOSEPH F. WATERMAN
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
SANCHEZ COMPUTER ASSOCIATES, INC.
40 VALLY STREAM PARKWAY
MALVERN, PA 19355
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
----------------------------------
Copies to:
JAMES A. OUNSWORTH, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
SAFEGUARD SCIENTIFICS, INC.
800 THE SAFEGUARD BUILDING
425 DEVON PARK DRIVE
WAYNE, PA 19087
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
----------------------------------
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [_]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
<PAGE>
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 of 1933, 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 of 1933, 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. [_]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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Proposed maximum Proposed maximum
Title of securities Amount to be offering price aggregate Amount of
to be registered registered per share offering price (1) registration fee
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<S> <C> <C> <C> <C>
Common Stock, no par 444,050 $17.59(1) $7,810,839.50 $2,304
value
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) under the Securities Act based upon the average
of the high and low sales price reported for such security by the Nasdaq
National Market on June 17, 1998.
------------------------------
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.
<PAGE>
SUBJECT TO COMPLETION, DATED JUNE 24, 1998
PROSPECTUS
444,050 SHARES
SANCHEZ COMPUTER ASSOCIATES, INC.
COMMON STOCK
------------------------------------
This Prospectus, as appropriately amended or supplemented, relates to
the offer and sale (the "Offering") from time to time by each of the
shareholders listed under the caption "Selling Shareholders" (the "Selling
Shareholders") of up to 444,050 shares of Common Stock, no par value (the
"Common Stock" or the "Shares"), of Sanchez Computer Associates, Inc. ("Sanchez"
or the "Company"). This Offering is made pursuant to the fulfillment by the
Company of its contractual obligation to the Selling Shareholders to register
shares of Common Stock held by the Selling Shareholders. The Company will not
receive any of the proceeds from the sale of the Common Stock offered hereby.
The Company has agreed to bear all of the expenses of the registration of the
Shares, but all underwriting discounts or commissions relating to the sale of
the Shares incurred by the Selling Shareholders will be borne by the Selling
Shareholders. See "Plan of Distribution."
The Shares may be offered by the Selling Shareholders from time to time
in transactions (which may include block transactions) on the Nasdaq National
Market, in negotiated transactions, through a combination of such methods of
sale, or otherwise, at fixed prices that may be changed, at market prices
prevailing at the time of sale, or at negotiated prices. The Selling
Shareholders may effect such transactions by selling the Shares to or through
broker-dealers, who may receive compensation in the form of discounts,
concessions or commissions from the Selling Shareholders and/or the purchasers
of the Shares for whom such broker-dealers may act as agents or to whom they may
sell as principals, or both (which compensation as to a particular broker-dealer
might be in excess of customary commissions). To the extent required, the
specific amount of Common Stock to be sold, the purchase price and public
offering price, the names of any resale agents, dealers or underwriters, and the
terms and amount of any applicable commission or discount with respect to a
particular offer will be set forth in a Prospectus Supplement and/or post-
effective amendment to the Registration Statement of which this Prospectus
constitutes a part.
The Selling Shareholders and any broker-dealers, agents or underwriters
that participate with the Selling Shareholders 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 "Securities Act"), and any commissions or profit
received by them and any profit on the resale of the Shares purchased by them
may be deemed to be underwriting commissions or discounts under the Securities
Act.
The Common Stock is traded on the Nasdaq National Market under the
symbol "SCAI." On June 19, 1998, the last reported sale price of the Common
Stock on the Nasdaq National Market was $18.50 per share.
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN
EVALUATING AN INVESTMENT IN THE COMMON STOCK OFFERED HEREBY, SEE "RISK FACTORS"
BEGINNING ON PAGE 3.
----------------------
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
<PAGE>
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS JUNE 24, 1998.
<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 reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, as well as the following
Regional Offices of the Commission: Seven World Trade Center, 13th Floor, New
York, New York 10048; and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material can be obtained from the Public
Reference Section of the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. Such material also may
be accessed electronically by means of the Commission's home page on the
Internet (http://www.sec.gov). In addition, such reports, proxy statements and
other information concerning the Company can be inspected at the National
Association of Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C.
20006.
This Prospectus constitutes a part of a registration statement on Form
S-3 (herein, together will all exhibits and schedules thereto, referred to as
this "Registration Statement") filed by the Company with the Commission under
the Securities Act, with respect to the securities offered hereby. This
Prospectus does not contain all the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission. Reference is hereby made to the Registration
Statement for further information with respect to the Company and the securities
offered hereby. Copies of the Registration Statement are on file at the offices
of the Commission and may be obtained upon payment of the prescribed fee or may
be examined without charge at the public reference facilities of the Commission
described above. Statements contained herein concerning the provisions of
documents are necessarily summaries of such documents, and each statement is
qualified in its entirety by reference to the copy of the applicable document
filed with the Commission.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents of the Company filed with the Commission
pursuant to the Exchange Act are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997 filed with the Commission on March 30, 1998.
(b) The Company's Current Report on Form 8-K dated February 5, 1998, as
amended on Form 8-K/A filed with the Commission on April 20, 1998.
(c) The Company's Quarterly Report on Form 10-Q for the quarterly
period ended March 31, 1998 filed with the Commission on May 14, 1998.
(d) The description of the Company's shares of Common Stock contained
in the Registration Statement on Form 8-A filed with the Commission on November
8, 1996, registering the Common Stock under the Exchange Act.
In addition, all reports and other documents filed by the Company with
the Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act, subsequent to the date of effectiveness of the Registration Statement of
which this Prospectus is a part and prior to the termination of the offering
made hereby, shall be deemed to be incorporated by reference into this
Prospectus. Any statement contained in a document incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be
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<PAGE>
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
This Prospectus incorporates documents by reference which are not
presented herein or delivered herewith. The Company undertakes to provide
without charge to each person, including any beneficial owner, to whom a
Prospectus is delivered, upon written or oral request of such person, a copy of
any or all of such documents which are incorporated herein by reference (other
than exhibits to such documents unless such exhibits are specifically
incorporated by reference into the documents that this Prospectus incorporates).
Such requests should be addressed to Joseph F. Waterman, Senior Vice President
and Chief Financial Officer, Sanchez Computer Associates, Inc., 40 Valley Stream
Parkway, Malvern, Pennsylvania 19355, telephone 610-296-8877.
THE COMPANY
The Company was incorporated in Pennsylvania in 1981. The Company's
principal executive offices are located at 40 Valley Stream Parkway, Malvern,
Pennsylvania 19355, and its telephone number is (610) 296-8877. The Company
maintains a site on the World Wide Web. Information contained in the Company's
web site shall not be deemed to be part of this Prospectus.
RISK FACTORS
In addition to the other information in this Prospectus or incorporated
herein by reference, the following factors should be considered carefully by
prospective investors in evaluating the Company and its business before
transferring Rights or purchasing Common Stock offered hereby.
Dependence on Financial Services Industry
The Company has in the past derived, and may in the future derive, all
of its revenues from the marketing of its PROFILE products to financial services
companies. In particular, the Company's revenues are highly dependent on
information technology expenditures by these organizations. The Company's
operations could be materially and adversely affected by certain economic
changes within the financial services industry or the reduction in information
technology expenditures in that industry. Merger and acquisition activity has
been widespread in the financial services industry in recent years and is
expected to continue in future years. As a result, the industry has experienced
consolidation on a large scale, and this consolidation has had and will continue
to have the effect of reducing the number of potential customers of the Company.
Any significant increase in the level of such consolidation could adversely
affect the Company's business, operating results and financial condition.
Intense Competition
The financial services institutions software market is intensely
competitive, rapidly evolving and subject to rapid technological change.
Competitors vary in size and in the scope and breadth of their products and
services. The Company encounters competition from a number of organizations
which offer production software to financial services companies. Some of the
Company's current and potential competitors have longer operating histories,
better name recognition, and significantly greater financial, sales, marketing,
technical and other competitive resources than the Company. As a result, they
may be able to adapt more quickly than the Company to new or emerging
technologies and changes in customer preferences or to devote greater resources
than the Company to the development, promotion and sale of products. In
addition, many of the Company's competitors have established, or may in the
future establish, cooperative relationships or strategic alliances among
themselves or with third parties to compete with the Company's products.
Furthermore, it is possible that new competitors or alliances among competitors
may emerge and rapidly acquire market share.
As many financial services companies continue to evaluate the
replacement of their existing legacy systems, the Company believes that the
financial services institutions software market will continue to attract new
competitors and new technologies, possibly involving technologies that are more
sophisticated and cost effective than the Company's technology. There can be no
assurance that the Company will be able to compete successfully
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against any of these competitive pressures, any of which could result in lost
orders or could compel the Company to make significant price reductions. The
inability of the Company to avert these pressures successfully could result in a
material adverse effect on the Company's business, operating results and
financial condition.
Rapid Technological Change; Development of New Products; Risk of Product Errors
The client/server application software market is characterized by rapid
technological change, frequent new product introductions 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 in short periods of time. The Company expects new products and
services, and enhancements to existing products and services, to be developed
and introduced by others, which will compete with the products and services
offered by the Company. The life cycles of the Company's products are difficult
to estimate. The Company's future success will depend upon its ability to
enhance its current products and to develop and introduce new products that keep
pace with technological developments and emerging industry standards and address
the increasingly sophisticated needs of its customers. There can be no assurance
that the Company will be successful in developing and marketing new products or
produce enhancements that meet these changing demands, that the Company will not
experience difficulties that could delay or prevent the successful development,
introduction and marketing of these products or that its new products and
product enhancements will adequately meet the demands of the marketplace and
achieve market acceptance. If the Company is unable to develop and introduce new
products or product enhancements in a timely manner, or if a release of a new
product does not achieve market acceptance, the Company's business, operating
results and financial condition will be materially adversely affected. Software
products such as those offered by the Company may contain errors or otherwise
fail to function properly when first introduced or when new versions are
released. There can be no assurance that errors will not be found in new
products or releases after commencement of commercial shipments resulting in
loss or delay in market acceptance, which could have a material adverse effect
upon the Company's business, operating results and financial condition.
Continued Growth and Development of the Direct Banking Market
A portion of the Company's growth strategy is dependent upon the
development and expansion of the market for direct banking services (which
include alternate delivery channels such as the networks which comprise the
Internet) as well as market acceptance of the Company's products and services.
The market for direct banking services has only recently begun to develop, and
market acceptance of the Company's products and services is uncertain. Certain
critical issues concerning commercial use of alternate delivery channels,
including capacity, security, reliability, ease and cost of access, and quality
of service are evolving and may adversely impact the growth in the use of these
channels. Despite the implementation of security measures, the use of the
Internet remains subject to unknown security risks which may further deter
financial institutions from licensing the Company's PROFILE products and
individuals from conducting transactions via electronic commerce. Accordingly,
the Company cannot predict the size of the market for direct banking services or
the rate at which such market will grow. If the market for direct banking
services fails to grow, grows more slowly than anticipated, or becomes saturated
with competitors, the Company's prospects could be adversely affected.
Reliance on Intellectual Property and Proprietary Rights
The Company's success is heavily dependent upon the proprietary
architecture and design of its PROFILE products. The Company relies primarily on
a combination of copyright and trademark laws, trade secrets, confidentiality
procedures and contractual provisions to protect its proprietary rights. The
Company seeks to protect its software, documentation and other written materials
under trade secret and copyright laws, which afford only limited protection. The
Company presently has no patents or patent applications pending. 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. There can be no assurance
that the Company's means of protecting its proprietary rights will be adequate
or that the Company's competitors will not develop similar technology
independently.
In general, while the most important features of PROFILE have been
internally developed, the Company currently also relies on software provided
by certain third parties for development languages. The Company believes,
however, that if such software were no longer available to the Company, it
could obtain substitute software from other sources.
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The Company is not aware that any of its products infringe the
proprietary rights of any person or entity. There can be no assurance, however,
that third parties will not claim infringement by the Company with respect to
current or future products. Any such claims, with or without merit, could be
time-consuming, result in costly litigation, cause product shipment delays or
require the Company to enter into royalty or license agreements or cause the
Company to discontinue the use of the challenged tradename, service mark or
technology at potentially significant expense to the Company associated with the
marketing of a new name or the development or purchase of replacement
technology, all of which could have a material adverse effect on the Company.
Such royalty or license agreements, if required, may not be available on terms
acceptable to the Company, or at all, which could have a material adverse effect
upon the Company's operating results and financial condition.
Concentration and Mix of Revenues; Ability to Obtain New Client Engagements
Generally, in any given year, a small number of customers historically
have each accounted for at least 10% of the Company's revenues. In 1997, three
customers accounted for approximately 40% of the Company's revenues. In 1996,
four customers accounted for approximately 75% of the Company's revenues. Since
the installation of a large software application can be a complex, time
intensive and costly process, customers generally only undertake these projects
on an irregular basis and the projects often take approximately ten to 15 months
to implement. As a result, the amount of revenues derived from any given
customer may vary significantly from year to year. Accordingly, the Company
expects that the identity of customers accounting for large portions of revenues
will change from year to year. The inability of the Company from year to year to
obtain large installation engagements could have a material adverse effect on
the Company's business, operating results and financial condition. See Footnote
3 to the 1997 Consolidated Financial Statements incorporated by reference in
this Prospectus.
Fluctuations in Quarterly Operating Results
The Company has experienced and may in the future continue to
experience fluctuations in its quarterly operating results. Factors that may
cause the Company's quarterly operating results to vary include the timing of
new contract closings, the initiation of license and service fee revenue
recognition, one-time payments from clients for license expansion rights, and
the completion of large installation projects. Certain of these factors may also
affect the Company's personnel utilization rates which may cause further
variation in quarterly operating results. Due to all of the foregoing factors,
it is likely that in some future quarters the Company's operating results will
be below the expectations of stock market analysts and investors. Regardless of
the general outlook for the Company's business, the announcement of quarterly
results of operations below analyst and investor expectations is likely to
result in a decline in the trading price of the Common Stock.
Reliance on Strategic Relationships
The Company has established non-exclusive partnership arrangements with
several organizations, including Hewlett-Packard Company, International Business
Machines Corporation, Digital Equipment Corporation ("Digital"), and Price
Waterhouse LLP, that it believes are important to its sales, marketing and
support activities. In particular, the Company's relationship with Digital has
been instrumental in the Company's achievement of its historical revenue levels.
While the establishment of strategic alliances with third parties has been
important to the Company's past success and such alliances are a key to its
future prospects, the Company does not believe that its written understandings
with such third parties are necessary for the delivery of its products and
services. However, the failure of the Company to maintain satisfactory
relationships with its strategic partners could have a material adverse effect
on the Company's business, operating results and financial condition.
Dependence on Key Personnel
The Company believes that its continued success depends to a
significant extent upon the efforts and abilities of its senior management. In
particular, the loss of the services of Michael A. Sanchez, the Company's
Chairman, or Frank R. Sanchez, the Company's President and Chief Operating
Officer, or any of the Company's other executive officers or senior managers
could have a material adverse effect on the Company's business,
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operating results and financial condition. The Company does not have employment
agreements with any of its executive officers other than Richard H. Jefferson.
Ability to Attract and Retain Key Technical Employees
The Company believes that its future success will also depend in large
part upon its ability to attract and retain highly skilled technical, management
and sales and marketing personnel. Moreover, because the development of the
Company's software requires knowledge of computer hardware, operating system
software, system management software and application software, key technical
personnel must be proficient in a number of disciplines. Competition for such
technical personnel is intense, and the failure of the Company to hire and
retain talented technical personnel or the loss of one or more key employees
could have an adverse effect on the Company's business, operating results and
financial condition.
Future growth, if any, of the Company will require additional
engineering, sales and marketing, financial and administrative personnel, to
expand customer services and support and to expand operational and financial
systems. There can be no assurance that the Company will be able to attract and
retain the necessary personnel to accomplish its growth strategies or that it
will not experience constraints that will adversely affect its ability to
satisfy customer demand in a timely fashion. If the Company's management is
unable to manage growth effectively, the Company's business, operating results
and financial condition could be adversely affected.
Control by Principal Shareholders
Michael A. Sanchez, Frank R. Sanchez and Safeguard Scientifics, Inc.
("Safeguard"), the three largest shareholders of the Company, beneficially own
in the aggregate approximately 49.9% of the outstanding Common Stock. As a
result, such shareholders collectively have the voting power as a practical
matter to influence the election of the Company's entire Board of Directors and
the approval of all matters requiring shareholder approval.
Possible Issuances of Preferred Stock
Shares of preferred stock may be issued by the Company in the future
without stockholder approval and upon such terms as the Board of Directors may
determine. The rights of the holders of the Common Stock will be subject to, and
may be adversely affected by, the rights of the holders of any preferred stock
that may be issued in the future. The issuance of preferred stock, while
providing flexibility in connection with possible acquisitions and other
corporate purposes, could have the effect of making it more difficult for a
third party to acquire, or of discouraging a third party from acquiring, a
majority of the outstanding stock of the Company and potentially prevent the
payment of a premium to stockholders in an acquisition transaction. The Company
has no present plans to issue any shares of preferred stock.
No Dividends
To date, the Company has not paid any cash dividends on its Common Stock
and does not expect to declare or pay any cash or other dividends in the
foreseeable future. The Company's financing arrangements currently do not
prohibit the Company from declaring or paying dividends or making other
distributions on the Common Stock.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
shares. All of the proceeds from the sale of the Shares will be received by the
Selling Shareholders.
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SELLING SHAREHOLDERS
The following table sets forth certain information regarding the
beneficial ownership of the Common Stock as of June 19, 1998 by each of the
Selling Shareholders. Unless otherwise indicated below, to the knowledge of the
Company, all persons listed below have sole voting and investment power with
respect to the shares of Common Stock, except to the extent authority is shared
by spouses under applicable law.
The information included below is based upon information provided by
the Selling Shareholders. Because the Selling Shareholders may offer all, some
or none of their Common Stock, no definitive estimate as to the number of shares
thereof that will be held by the Selling Shareholders after such offering can be
provided and the following table has been prepared on the assumption that all
shares of Common Stock offered under this Prospectus will be sold. See "Plan of
Distribution."
<TABLE>
<CAPTION>
Beneficial Ownership Number of Shares Beneficial Ownership
Prior to the Offering(1) to be Sold in the After the Offering(1)(2)
------------------------------ Offering(2) -------------------------------
-----------------
Number of Number of
Name and Address Shares Percentage Shares Percentage
---------------- -------------- ----------- -------------- -----------
<S> <C> <C> <C> <C> <C>
Safeguard Scientifics, Inc. (3). 3,144,092 27.0% 360,000 2,784,092 23.9%
800 The Safeguard Building
435 Devon Park Drive
Wayne, PA 19087
Robert D. Shear ................ 45,623 * 45,623 -0- 0.0%
c/o Greystone Solutions
Incorporated
100 Unicorn Park
Woburn, MA 01801
7,192
K.S. Bhaskar (4)................ 45,619 * 38,427 *
40 Valley Stream Parkway
Malvern PA 19355
</TABLE>
- ------------
*Less than 1%.
(1) Solely for the purpose of the percentage ownership calculation for each
beneficial owner depicted herein, the number of shares of Common Stock
deemed outstanding (i) assumes 11,652,335 shares of Common Stock
outstanding as of June 19, 1998 and (ii) includes additional shares
issuable pursuant to options or warrants held by such owner which may be
exercised within 60 days after that date ("presently exercisable options").
(2) Assumes the sale of all shares offered hereby.
(3) The shares are held of record by Safeguard Scientifics (Delaware), Inc., a
wholly-owned subsidiary of Safeguard.
(4) Includes 7,192 shares of Common Stock issuable pursuant to presently
exercisable options.
PLAN OF DISTRIBUTION
The Company is registering the shares of Common Stock offered by the
Selling Shareholders pursuant to contractual registration rights contained or
incorporated by reference in the Warrant dated April 12, 1988, as amended,
issued by the Company to Safeguard Scientifics (Delaware), Inc., a wholly-owned
subsidiary of Safeguard, and the Reorganization Agreement (the "Reorganization
Agreement") dated as of February 5, 1998 among the Company, System Acquisition
Corp., Greystone Technology Corporation, Robert D. Shear and K.S. Bhaskar. The
Shares offered hereby may be sold from time to time by the Selling Shareholders.
Such sales may be effected by or for the account of the Selling Shareholders
from time to time in transactions (which may include
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block transactions) on the Nasdaq National Market, in negotiated transactions,
through a combination of such methods of sale, or otherwise, at fixed prices
that may be changed, at market prices prevailing at the time of sale or at
negotiatedprices. The Selling Shareholders may effect such transactions by
selling the Shares directly to purchasers, through broker-dealers acting as
agents for the Selling Shareholders, or to broker-dealers acting as agents for
the Selling Shareholders, or to broker-dealers who may purchase Shares as
principals and thereafter sell the Shares from time to time in transactions
(which may include block transactions) on the Nasdaq National Market, in
negotiated transactions, through a combination of such methods of sale, or
otherwise. In effecting sales, broker-dealers engaged by Selling Shareholders
may arrange for other broker-dealers to participate. Such broker-dealers, if
any, may receive compensation in the form of discounts, concessions or
commissions from the Selling Shareholders and/or the purchasers of the Shares in
amounts to be negotiated prior to sale. In addition, any securities covered by
this Prospectus that qualify for sale pursuant to Rule 144 might be sold under
Rule 144 rather than pursuant to this Prospectus.
The Selling Shareholders and any broker-dealers, agents or underwriters
that participate with the Selling Shareholders in the distribution of the Shares
may be deemed to be "underwriters" within the meaning of the Securities Act. Any
commissions paid or any discounts or concessions allowed to any such persons,
and any profits received on the resale of the Shares purchased by them may be
deemed to be underwriting commissions or discounts under the Securities Act.
Upon the Company's being notified by the Selling Shareholders that any
material arrangement has been entered into with a broker or dealer for the sale
of Shares pursuant to this Registration Statement through a secondary
distribution, or a purchase by a broker or dealer, a supplemented Prospectus
will be filed, if required, pursuant to Rule 424(c) under the Securities Act,
disclosing (a) the name of each such broker-dealer(s); (b) the number of Shares
involved; (c) the price at which such Shares were sold; (d) the commissions paid
or discounts or concessions allowed to such broker-dealer(s), where applicable;
(e) where applicable, that such broker-dealer(s) did not conduct any
investigation to verify the information set out or incorporated by reference in
this Prospectus, as supplemented; and (f) other facts material to the
transaction.
The Shares are listed on the Nasdaq National Market under the symbol
"SCAI."
The Company is bearing all costs relating to the registration of the
Shares. However, any commissions, discounts or other fees payable to
broker-dealers in connection with any sale of the Shares will be borne by the
Selling Shareholder selling such Shares. In addition, the Selling Shareholders
will be indemnified by the Company against certain civil liabilities, including
liabilities under the Securities Act.
LEGAL MATTERS
The validity of the issuance of the Shares offered by this Prospectus
has been passed upon for the Company by John B. Wright, II, Esquire, 800 The
Safeguard Building, 435 Devon Park Drive, Wayne, PA 19087-1945. Mr. Wright is
Senior Corporate Counsel of Safeguard, one of the Selling Shareholders.
EXPERTS
The consolidated financial statements of Sanchez Computer Associates,
Inc. as of December 31, 1997 and 1996, and for each of the years in the
three-year period ended December 31, 1997, incorporated by reference in this
Prospectus have been incorporated herein in reliance on the report of Coopers &
Lybrand L.L.P., independent accountants, given on the authority of that firm as
experts in accounting and auditing.
8
<PAGE>
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON, OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED, OR
INCORPORATED BY REFERENCE, IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING
COVERED BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR THE SELLING SHAREHOLDERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES OTHER THAN THOSE
SPECIFICALLY OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSONS TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS
OF ANY TIME SUBSEQUENT TO ITS DATE.
--------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Available Information 2
Incorporation of Certain Documents by Reference 2
The Company 3
Risk Factors 3
Use of Proceeds 6
Selling Shareholders 7
Plan of Distribution 7
Legal Matters 8
Experts 8
</TABLE>
444,050 SHARES
SANCHEZ COMPUTER ASSOCIATES, INC.
COMMON STOCK
-----------------
PROSPECTUS
-----------------
JUNE 24, 1998
- --------------------------------------------------------------------------------
9
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expenses (other than underwriting
compensation expected to be incurred) in connection with the offering described
in this Registration Statement. All of such amounts (except the SEC Registration
Fee) are estimated.
<TABLE>
<S> <C>
SEC Registration Fee $ 2,304
Accounting Fees and Expenses 5,000
---------
Total $ 7,304
---------
---------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant's Articles and By-laws require the Registrant to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed proceeding by reason of the fact that he
is or was a director or officer of the Registrant or any other person designated
by the Board of Directors (which may include any person serving at the request
of the Registrant as a director, officer, employee, agent, fiduciary or trustee
of another corporation, partnership, joint venture, trust, employee benefit plan
or other entity or enterprise), in each case, against certain liabilities
(including damages, judgments, amounts paid in settlement, fines, penalties and
expenses (including attorneys' fees and disbursements)), except where such
indemnification is expressly prohibited by applicable law, where such person has
engaged in willful misconduct or recklessness or where such indemnification has
been determined to be unlawful. Such indemnification as to expenses is mandatory
to the extent the individual is successful on the merits of the matter.
Pennsylvania law permits the Registrant to provide similar indemnification to
employees and agents who are not directors or officers. The determination of
whether an individual meets the applicable standard of conduct may be made by
the disinterested directors, independent legal counsel or the stockholders.
Pennsylvania law also permits indemnification in connection with a proceeding
brought by or in the right of the Registrant to procure a judgment in its favor.
Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended (the "Act") may be permitted to directors, officers, or persons
controlling the Registrant pursuant to the foregoing provisions, the Registrant
has been informed that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in that Act and is
therefore unenforceable. The Registrant maintains a directors and officers
liability insurance policy which insures directors and officers of the
Registrant in certain circumstances.
II-1
<PAGE>
ITEM 16. EXHIBITS
The following exhibits are filed as part of this Registration Statement:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<S> <C>
5 -- Opinion of John B. Wright, II, Esq., regarding legality of
securities being registered
23.1 -- Consent of John B. Wright, II, Esq. (included in its opinion
filed as Exhibit 5 hereto)
23.2 -- Consent of Coopers & Lybrand L.L.P.
24 -- Powers of Attorney (included as part of the signature page
hereof)
</TABLE>
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 Securities and Exchange 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 (1) (i) and (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 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.
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
II-2
<PAGE>
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
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
Securities Act of 1933 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 of 1933 and will be governed by the final adjudication of such
issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the town of Malvern,
Commonwealth of Pennsylvania, on June 24, 1998.
SANCHEZ COMPUTER ASSOCIATES, INC.
By:/s/ JOSEPH F. WATERMAN
------------------------------------
Joseph F. Waterman
Senior Vice President and
Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, THAT EACH PERSON WHOSE SIGNATURE
APPEARS BELOW IN SO SIGNING ALSO MAKES, CONSTITUTES AND APPOINTS FRANK SANCHEZ
AND JOSEPH F. WATERMAN, OR EITHER OF THEM, HIS TRUE AND LAWFUL ATTORNEYS-IN-
FACT AND AGENTS, WITH FULL POWER OF SUBSTITUTION AND RESUBSTITUTION, FOR HIM AND
IN HIS NAME, PLACE AND STEAD, IN ANY AND ALL CAPACITIES, TO EXECUTE AND CAUSE TO
BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ANY AND ALL AMENDMENTS AND
POST-EFFECTIVE AMENDMENTS TO THIS REGISTRATION STATEMENT AND A RELATED
REGISTRATION STATEMENT THAT IS TO BE EFFECTIVE UPON FILING PURSUANT TO RULE
462(B) UNDER THE SECURITIES ACT OF 1933, AND IN EACH CASE TO FILE THE SAME, WITH
ALL EXHIBITS THERETO AND OTHER DOCUMENTS IN CONNECTION THEREWITH, AND HEREBY
RATIFIES AND CONFIRMS ALL THAT SAID ATTORNEYS-IN-FACT AND AGENTS OR THEIR
SUBSTITUTE OR SUBSTITUTES MAY DO OR CAUSE TO BE DONE BY VIRTUE HEREOF.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title (s) Date
<S> <C> <C>
/s/ Michael A. Sanchez Chairman of the Board of Directors June 24, 1998
- -----------------------------------
Michael A. Sanchez
June 24, 1998
/s/ Ronald J. Zlatoper Chief Executive Officer and Director
- ----------------------------------- (Principal Executive Officer)
Ronald J. Zlatoper
June 24, 1998
/s/ Frank R. Sanchez President, Chief Operating Officer and
- ----------------------------------- Director
Frank R. Sanchez
June 24, 1998
/s/ Joseph F. Waterman Senior Vice President and Chief Financial
- ----------------------------------- Officer (Principal Financial and Accounting
Joseph F. Waterman Officer)
</TABLE>
II-4
<PAGE>
<TABLE>
<S> <C> <C>
June 24, 1998
/s/ Lawrence Chimerine Director
- -----------------------------------
Lawrence Chimerine
June 24, 1998
/s/ Kailash C. Khanna Director
- -----------------------------------
Kailash C. Khanna
June 24, 1998
/s/ John D. Loewenberg Director
- -----------------------------------
John D. Loewenberg
June 24, 1998
/s/ Ira M. Lubert Director
- -----------------------------------
Ira M. Lubert
June 24, 1998
/s/ Thomas C. Lynch Director
- -----------------------------------
Thomas C. Lynch
June 24, 1998
/s/Warren V. Musser Director
- -----------------------------------
Warren V. Musser
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<S> <C>
5 -- Opinion of John B. Wright, II, Esq., regarding legality of securities being registered
23.1 -- Consent of John B. Wright, II, Esq. (included in its opinion filed as Exhibit 5 hereto)
23.2 -- Consent of Coopers & Lybrand L.L.P.
24 -- Powers of Attorney (included as part of the signature page hereof)
</TABLE>
<PAGE>
EXHIBIT 5
June 24, 1998
Sanchez Computer Associates, Inc.
40 Valley Stream Parkway
Malvern, PA 19355
Gentlemen:
I have acted as counsel to Sanchez Computer Associates, Inc. (the
"Company"), and I am delivering this opinion in connection with the filing with
the Securities and Exchange Commission of the Company's Registration Statement
on Form S-3 under the Securities Act of 1933 (the "Registration Statement")
relating to the sale by certain selling shareholders identified in the
Registration Statement of 444,050 shares of Common Stock of the Company, no par
value per share (the "Shares"), previously issued in connection with (a) the
exercise of a warrant to purchase 360,000 shares of Common Stock of the Company
and (b) the acquisition of all of the outstanding capital stock of Greystone
Technology Corporation, all as more fully set forth in the Registration
Statement.
In this connection, I have reviewed the Company's Articles of
Incorporation, its Bylaws, resolutions of its Board of Directors and
shareholders, and such other documents and corporate records as I have deemed
appropriate in the circumstances. My opinion is limited solely to matters
governed by the laws of the Commonwealth of Pennsylvania and the federal laws of
the United States of America.
Based upon the foregoing, I am of the opinion that the issuance of
Shares by the Company has been duly and validly authorized by all necessary
corporate action of the Board of Directors and shareholders of the Company, and
such Shares are legally issued, fully paid and nonassessable.
I consent to the use of this opinion as an exhibit to the Registration
Statement. In giving such opinion, I do not thereby admit that I am acting
within the category of persons whose consent is required under Section 7 of the
Act or the rules or regulations of the Securities and Exchange Commission.
This opinion is rendered to you in connection with the above-referenced
Registration Statement and may be relied on by you only in connection therewith.
No other person may rely on this opinion. This opinion may not be quoted by you
or any other person without my prior written consent.
My rendering of this opinion to you does not obligate me to render any
further opinion to you or to update this opinion at any time in the future.
Very truly yours,
John B. Wright, II
Senior Corporate Counsel
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-3 of our reports dated February 6, 1998, on our audits of the
consolidated financial statements and financial statement schedule of Sanchez
Computer Associates, Inc. We also consent to the reference to our firm under the
caption "EXPERTS."
COOPERS & LYBRAND L.L.P.
Philadelphia, Pennsylvania
June 24, 1998
