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As filed with the Securities and Exchange Commission on August 18, 1999.
Registration No. 333-___________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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DELTEK SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
VIRGINIA 54-1252625
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
8280 GREENSBORO DRIVE
MCLEAN, VIRGINIA 22102
(703) 734-8606
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
OPTIONS ISSUED TO ERIC BREHM
(Full Title of Plan)
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KENNETH E. DELASKI
PRESIDENT AND CHIEF EXECUTIVE OFFICER
DELTEK SYSTEMS, INC.
8280 GREENSBORO DRIVE
MCLEAN, VIRGINIA 22102
(703) 734-8606
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copy to:
Kathleen L. Cerveny, Esq.
Hazel & Thomas, P.C.
3110 Fairview Park Drive, Ste. 1400
Falls Church, VA 22042
(703) 641-4200
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, check the following box: [X]
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM
PROPOSED MAXIMUM AGGREGATE AMOUNT OF
TITLE OF SECURITIES TO BE AMOUNT TO AGGREGATE PRICE OFFERING REGISTRATION
REGISTERED BE REGISTERED PER SHARE (1 ) PRICE (1) FEE
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<S> <C> <C> <C> <C>
Common Stock, $.001 par value 4,230(2) $14.00 $59,220 $100.00
Common Stock, $.001 par value 4,230(3) $ --- $ --- $ ---(4)
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(notes overleaf)
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(1) Calculated in accordance with Rule 457(h) under the Securities Act of
1933, as amended, based upon the closing bid price for the Common Stock on
August 13, 1999.
(2) Represents the aggregate maximum number of shares issuable in accordance
with options granted to Eric Brehm (the "Brehm Options"). In addition to
such shares, this Registration Statement covers such additional number of
shares as may be required by reason of the operation of the antidilution
provisions of the Brehm Options.
(3) Represents the same shares described in the line immediately above, which
may be resold by the holder thereof.
(4) Pursuant to Rule 457(h)(3), no additional fee is payable since these
shares, which may be offered for resale, are the same shares being
registered hereby upon their initial issuance pursuant to the Brehm
Options.
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PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION
The documents containing the information specified in this Part I will be
sent or given to the holder of the Brehm Options to which this Registration
Statement relates, as specified by Rule 428(b) promulgated under the Securities
Act of 1933, as amended, and are not filed as part of this Registration
Statement.
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Prospectus
4,230 Shares
DELTEK SYSTEMS, INC.
Common Stock
This Prospectus relates to the resale of up to 4,230 shares of our common
stock by Eric Brehm, one of our employees. The common stock which may be resold
has been or will be acquired upon exercise of options granted to Mr. Brehm.
We will not receive any of the proceeds from such sales. We will pay all
expenses in connection with this offering, other than commissions and discounts
of underwriters, dealers or agents.
Our common stock is quoted on the Nasdaq National Market (Symbol: DLTK).
On August 13, 1999, the closing price of the common stock was $14.00 per share.
See "Risk Factors" beginning on page 4 for a description of certain
factors that should be considered by purchasers of the common stock.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
The date of this prospectus is August 18, 1999.
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We have not, nor has any individual named in this prospectus, authorized
any person to give any information or to make any representation other than
those contained in, or incorporated by reference into, this prospectus. This
prospectus does not constitute an offer to sell or solicitation of an offer to
buy.
We have filed a registration statement on Form S-8 in respect of the
common stock offered by this prospectus with the Securities and Exchange
Commission under the Securities Act. This prospectus does not contain all of the
information contained in the registration statement. You should read this entire
prospectus carefully as well as the registration statement for additional
information.
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TABLE OF CONTENTS
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Where You Can Find More Information..........................................2
Forward-Looking Statements ...............................................3
Risk Factors.................................................................4
Our Business................................................................12
Proceeds....................................................................14
Selling Stockholder.........................................................14
Plan of Distribution........................................................14
Our Capital Stock...........................................................16
Indemnification.............................................................18
Legal Matters...............................................................19
Experts.....................................................................19
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WHERE YOU CAN FIND MORE INFORMATION
We must file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any documents we file at
the SEC's public reference rooms in Washington, DC, New York, NY and Chicago,
IL. Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. Our SEC filings are also available to the public from the SEC's
web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" information into this
prospectus, which means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The information
incorporated by reference is considered to be part of this prospectus.
Information in this prospectus may update documents previously filed with the
SEC, and later information that we file with the SEC will automatically update
this prospectus. We incorporate by reference the documents listed below and any
future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 prior to the termination of the offering:
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- Our quarterly report on Form 10-Q for the period ended June 30, 1999
filed with the SEC on August 13, 1999 (File No. 000-22001);
- Our Amended Quarterly Reports on Form 10-Q for the quarters ended
June 30 1998 and September 30, 1998 (File No. 000-22001); and
- Our Annual Report on Form 10-K for the fiscal year ended December
31, 1998 (File No. 000-22001).
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Deltek Systems, Inc.
8280 Greensboro Drive
McLean, VA 22102
Attention: Secretary
(703) 734-8606
Information on our website is not part of this prospectus.
FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated in this prospectus by
reference contain forward-looking statements. We base these statements on our
current expectations, estimates and projections. Either the beliefs of
management, or assumptions made by management form the basis for those
expectations, estimates and projections. The safe harbor created by Section 27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934 generally protect us and the selling stockholder from liability for these
statements. You can often recognize these forward-looking statements by words
such as "anticipates," "expects," "intends," "plans," "believes," "seeks,"
"estimates," variations of such words, and similar expressions.
These forward-looking statements do not guarantee future performance and
are subject to risks, uncertainties and assumptions that are difficult to
predict. The Risk Factors section in this prospectus sets forth some of these
risks and uncertainties. These risks and uncertainties could cause actual
results to differ materially and adversely from those discussed in the
forward-looking statements. We undertake no obligation to publicly update any of
these forward-looking statements to reflect new information or future events.
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RISK FACTORS
This offering involves a high degree of risk. You should carefully
consider the risks described below and the other information in this prospectus
before deciding to invest in the shares of common stock.
YEAR 2000 ISSUES MAY IMPACT OUR REVENUES
Many existing information technology (IT) systems and applications, and
other non-IT control devices, use only two digits to identify a year in the date
field, without considering the impact of the upcoming change in the century. As
a result, such systems, applications and devices could fail or create erroneous
results unless they are modified in some fashion to distinguish 21st century
dates from 20th century dates (that is, to be year 2000 compliant). We believe
that the growth in demand for our products over the past several years was due
in part to our customers' needs to update their IT systems in preparation for
the year 2000. Most project oriented companies that needed to convert to year
2000 compliant systems (and thus were potential customers for our products) have
purchased year 2000 compliant systems. Accordingly, the need of companies to
update IT systems to achieve year 2000 readiness no longer will generate any
significant demand for our products. We believe that the future growth in demand
for our products will depend in part upon our ability to offset the loss of any
growth attributable to our customers' needs to update their IT systems in
preparation for the year 2000. We may not be able to sustain growth in demand
for our products similar to that which we experienced over the past several
years. If our prior growth rates are not sustainable, our business, operating
results and financial condition could be materially adversely impacted.
Moreover, as the year 2000 approaches, our current or future customers may need
to divert technology expenditures that were reserved for the purchase of
enterprise software products such as those that we sell to address year 2000
compliance problems. Accordingly, if purchases of our products are thereby
delayed or lost, our business, operating results and financial condition could
be materially adversely impacted.
OUR QUARTERLY OPERATING RESULTS ARE SUBJECT TO FLUCTUATIONS.
Our future operating results may vary from quarter to quarter depending
upon a number of factors including the following:
- the demand for our products;
- the size and timing of specific sales;
- the delay or deferral of customer implementations;
- the level of product and price competition that we encounter;
- the length of our sales cycles;
- our ability to attract and retain personnel;
- the timing of new hires;
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- the timing of our new product introductions and product enhancements
and of our competitors;
- the mix of products and services we sell;
- the activities of and acquisitions by our competitors;
- the timing of our national user conference;
- general economic conditions;
- our ability to develop and market new software products and
enhancements; and
- our ability to control costs.
Our operating results, particularly our quarterly results, could be
significantly affected by the loss or delay of individual orders. Our revenues
from license fees are difficult to predict because of the length and variability
of our sales cycles (typically 3 to 18 months). Our operating expenses, on the
other hand, are based on anticipated revenue trends. A high percentage of our
operating expenses are relatively fixed. A delay in the recognition of revenue
from a limited number of sales could cause significant variations in operating
results from quarter to quarter. To the extent we incur expenses before
obtaining anticipated revenues, our operating results could be materially
adversely affected.
For certain of our software products, we typically grant customers a right
of return for a full or partial refund of the license fee during the refund
period. Refund periods generally range from 60 to 90 days from the date of the
initial software delivery. Sometimes we have provided and may in the future
provide longer refund periods for larger, more complex Costpoint installations.
We recognize Costpoint and Allegro license fees upon the expiration of the
applicable refund periods. The license fees are recorded as deferred revenues
until recognized as revenue. Deferred revenues at the end of a quarter do not
necessarily reflect revenues that we will recognize in a succeeding quarter.
This is because customers sometimes have refund rights and the length of refund
periods vary from customer to customer. We generally recognize license fees from
Advantage, System1 and Electronic Timesheet products upon their delivery.
Our operating results for any quarter are subject to significant
variation. We believe that period-to-period comparisons of our operating results
are not necessarily meaningful and should not be relied upon as indications of
future performance.
WE MAY INCUR LIABILITY DUE TO YEAR 2000 PROBLEMS.
We have made or intend to make available to our customers year 2000
compliant versions of our products. We cannot assure you, however, that our
customers will request and install the compliant versions or operate them only
with year 2000 compliant operating systems, relational databases and other IT
systems.
Although our year 2000 compliant products have or will have undergone our
normal quality testing procedures, we may not have found undetected errors or
defects associated with the year 2000 date functions. Because IT systems
incorporate hardware and software products
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from different vendors, it may be difficult to determine which product has
caused a year 2000 problem. We may therefore be subjected to year 2000-related
lawsuits even if our products are year 2000 compliant. System malfunctions due
to the onset of calendar year 2000 and any disputes with customers relating to
year 2000 compliance may adversely affect our business, operating results and
financial condition.
Despite our efforts to address the year 2000 impact on our internal IT and
non-IT systems and on the operations of our mission critical vendors, we may not
be able to fully identify such impact or to resolve it without disruption of our
business and without incurring significant expense. Accordingly, if the year
2000 issues are not adequately addressed by us and by third parties, our
business, operating results and financial condition may be materially adversely
affected.
COMPETITION FOR CLIENT/SERVER-BASED BUSINESS APPLICATION SOFTWARE IS INTENSE.
We compete with a number of companies, many of which have significantly
greater financial, technical, marketing and other resources than we have. As our
larger competitors, such as Oracle, Peoplesoft and SAP, begin to experience a
deceleration in their core business and refocus their marketing and sales
efforts to the middle market, in which we actively market our products, we
expect those competitors to implement increasingly aggressive pricing programs.
In addition, certain of our competitors, such as Oracle, Peoplesoft and SAP,
have well-established relationships with our current and prospective customers
and with major accounting and consulting firms that may have an incentive to
recommend them over us. We also face indirect competition from the internal MIS
departments of our potential customers.
Our products may not compete favorably and we may not be successful in the
face of increasing competition from new products and enhancements introduced by
existing or new competitors. In addition, increased competition may result in
price reductions, reduced margins and loss of market share, any of which could
have a material adverse effect on our business, operating results and financial
condition.
OUR SUCCESS DEPENDS UPON OUR ABILITY TO HIRE AND RETAIN OUR EMPLOYEES.
Our success is dependent upon our ability to attract and retain highly
skilled managerial, research and development, consulting, customer service,
sales and marketing personnel. We are currently investing, and plan to continue
to invest, significant resources to expand our direct sales force and technical
and customer support staff. Nevertheless, we have sometimes experienced
difficulties in recruiting qualified personnel. Competition for skilled
personnel in the software industry is intense. We cannot assure you that we will
continue to be able to attract and retain the personnel we require to develop
and market new and enhanced products or to market and service our existing
products and conduct our operations successfully. Our inability to do so could
have a material adverse effect on our business, operating results and financial
condition. In
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addition, we may incur increased compensation costs in order to attract and
retain skilled employees.
Our success also depends in part on the continued services of our key
employees, particularly our senior management personnel. We do not have
employment agreements with any of our key employees and do not maintain any key
person life insurance. The loss of Kenneth E. deLaski, our President and Chief
Executive Officer, Eric F. Brown, our Executive Vice President and Chief
Operating Officer, or Dien Hoang Do, our Vice President of Technology and Chief
Technical Officer, could have a material adverse effect on our business,
operating results and financial condition.
WE DEPEND ON OUR COSTPOINT AND ADVANTAGE PRODUCT LINES.
For the years ended December 31, 1997 and 1998, 71.3% and 78.6%,
respectively, of our software revenues were derived from licenses of our
Costpoint and Advantage software products. In addition, we generate service
revenues related to our Costpoint and Advantage products. An important element
of our strategy is to license Costpoint to existing System1 users and to license
Costpoint or Advantage to existing CFMS users as those customers reengineer
their information systems and migrate to client/server solutions. The remaining
System1 or CFMS users may not license either Costpoint or Advantage.
Nevertheless, we expect our Costpoint and Advantage product lines to continue to
account for a significant percentage of our future revenues. The success of
competitive products or technological change, or our inability to continue to
enhance the Costpoint and Advantage product lines to meet the evolving needs of
our customers, would have a material adverse effect on our business, operating
results and financial condition.
THE SOFTWARE MARKET UNDERGOES RAPID TECHNOLOGICAL CHANGE.
The business application software market is characterized by rapidly
changing technologies, evolving industry standards, frequent new product
introductions and short product life cycles. Our future success will depend, to
a substantial degree, upon our ability to enhance our existing products and to
develop and introduce, on a timely and cost-effective basis, new products and
features that meet changing customer requirements and emerging and evolving
industry standards. In particular, the degree of market acceptance of our new,
stand alone "front office" sales force automation and customer management
software product that is currently under development, the first modules of which
are available in beta, likely will be a significant factor in our success. We
intend to continue making substantial investments in product development to
address advancements in technology, respond to changing customer requirements,
extend the functionality of our current products and expand our product line. We
may not be successful in completing the development of new products and
enhancements. New products or enhancements we may introduce may not achieve
market acceptance.
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NEW PRODUCT DEVELOPMENT IS SUBJECT TO RISKS AND POTENTIAL LIABILITY.
The development of new, technologically advanced software products is a
complex and uncertain process. It requires high levels of innovation, as well as
the accurate anticipation of technological and market trends. The introduction
of new or enhanced products also requires us to manage the transition from or
integration with older products in order to minimize disruption in sales of
existing products. Our development efforts may not progress satisfactorily or
keep pace with industry developments. We allocate resources for research and
development projects based on planned product introductions and enhancements.
Our actual expenditures may significantly differ from amounts allocated. We have
experienced, and may experience in the future, delays in the introduction of our
products, due to factors internal and external to us. Because our software
products are complex, despite testing, errors may be found after commencement of
commercial shipments, resulting in loss of or delay in market acceptance. Any
future delays in the introduction or shipment of new or enhanced products, the
inability of such products to gain market acceptance or problems associated with
new product transitions could adversely affect our business, operating results
and financial condition. Our sale and support of software products entails the
risk of product liability claims. In addition, our failure to perform services
to a customer's expectations may result in our not being paid for services
rendered, may damage our reputation and may result in a claim being brought
against us. We maintain errors and omissions insurance but a successful claim
for product or service liability brought against us could have a material
adverse effect upon our business, operating results and financial condition.
ACQUISITION ACTIVITIES POSE RISKS.
As part of our growth strategy, we have acquired or invested in, and from
time to time may acquire or invest in, complementary businesses, technologies
and product lines. In April 1998, we acquired certain assets of SalesKit
Software Corporation. In May 1998, we completed the acquisition of Harper and
Shuman, Inc. In order to achieve the anticipated benefits of these acquisitions
and any future acquisitions, we must successfully assimilate the operations of
the acquired business, and integrate and market our acquired products and
technologies in a timely manner. In order to successfully integrate acquired
products into our sales and marketing channels, we must train our sales force on
acquired products and integrate employees of the acquired companies with respect
to sales commission, territories, product positioning and training. In addition,
certain of such acquired assets, licenses or technology may require significant
additional development, such as the completion of product functionality, before
the commercial release of products.
Although we currently have no understandings, commitments or agreements
with respect to any additional acquisitions, any future acquisitions may be
accompanied by the risks commonly encountered in such transactions, including
the following:
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- disruption of our ongoing business;
- diversion of management from day-to-day operations;
- amortization of acquired intangible assets;
- impairment of relationships with customers, employees and strategic
partners;
- loss of personnel;
- difficulty of maintaining uniform standards, controls, procedures
and policies; and
- potential liabilities arising from any acquisition.
If we are unable to address such risks or fulfill expectations regarding
revenues from acquired businesses, products and technologies, our business,
operating results and financial condition could be adversely affected.
WE MUST BE ABLE TO MANAGE OUR GROWTH.
We are currently experiencing growth and expansion, internally and through
acquisitions, which has placed a strain on our administrative, operational and
financial resources and demands on our systems and controls. This growth has
resulted in an increasing level of responsibility for our management personnel.
Our ability to manage our growth successfully will also require us to continue
to expand and improve our operational, management and financial systems and
controls on a timely basis. If our management is unable to manage growth
effectively, our business, operating results and financial condition could be
materially adversely affected.
WE MAY BE UNABLE TO EXPAND INTO NEW MARKETS.
We believe that our future success is dependent, in part, on our ability
to successfully penetrate new project-oriented markets and expand
internationally. Although we have an ongoing program to further customize and
add functionality to our products in order to address the specific needs of
customers in new markets, our limited resources may restrict our ability to:
- track developments in these markets;
- develop appropriate products; and
- effectively pursue marketing activities in multiple markets
simultaneously.
Our products may not be accepted in new markets. If we cannot successfully
expand the markets for our products, our business, operating results and
financial condition could be adversely impacted.
WE DEPEND UPON ORGANIZATIONS WITH FEDERAL GOVERNMENT CONTRACTS.
A significant portion of our total revenues is derived from customers that
provide products and services under federal government contracts. We believe
that, at least in the near term, a large percentage of our customers will
continue to be government contractors and will account for a significant
percentage of our total revenues. While such organizations are subject
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to the same general economic conditions as other businesses, they are also
dependent upon applicable procurement policies and the availability of
appropriated funds which may affect demand for their products and services. Any
significant downsizing, consolidation or liquidation of such organizations as a
result of changes in procurement policies, budget reductions or reallocations or
other causes could adversely affect our business, operating results and
financial condition.
WE RELY ON THIRD-PARTY SOFTWARE DEVELOPMENT TOOLS.
We license from third parties certain software development tools that we
utilize in the development of our products. Accordingly, we are dependent upon
such third parties' abilities to:
- deliver quality products;
- correct errors;
- ensure year 2000 functionality;
- support their current products;
- develop new and enhanced products on a timely and cost-effective
basis; and
- respond to emerging industry standards and other technological
changes.
Should these third-party development tools become unavailable, or should their
developers fail to adequately support or enhance them, we would be required to
rewrite our products using different development tools. Although we believe that
other development tools with comparable functionality are currently available
from other third parties, replacement products may not be able to be obtained on
reasonable terms. If we are not able to rewrite our products using different
development tools on a timely and cost-effective basis our business, operating
results and financial condition could be materially adversely affected.
WE MAY BE UNABLE TO PROTECT OUR PROPRIETARY RIGHTS FROM INFRINGEMENT.
Our success and ability to compete is dependent in part upon our
proprietary software. To establish and protect our rights in our software, we
rely on a combination of:
- copyright and trademark laws;
- trade secrets;
- confidentiality procedures; and
- contractual provisions.
Despite our efforts to protect our proprietary rights, unauthorized parties may
attempt to copy, design around or reverse engineer aspects of our products or to
obtain and use information that we regard as proprietary. Furthermore, we have
no patents, and existing copyright law affords only limited protection. In
addition, the laws of some countries do not protect our proprietary rights to
the same extent as do the laws of the United States. Accordingly, we may not be
able to
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protect our proprietary software against unauthorized third-party copying or
use, which could adversely affect our competitive position.
There are currently no claims pending against us relating to the
infringement of any proprietary rights of third parties. Third parties may claim
infringement by us of their intellectual property rights in the future. We
expect that software product developers will increasingly be subject to
infringement claims as the number of products and competitors in our industry
segment grows and the functionality of products in different industry segments
overlaps. Any such claims, with or without merit, could
- be time-consuming to defend;
- result in costly litigation;
- divert management's attention and resources from day-to-day
operations; or
- cause delays in the delivery or implementation of our products.
In addition, such claims could require us to
- discontinue the use of certain software codes or processes;
- cease the manufacture, use and sale of infringing products; and
- develop non-infringing technology or to obtain licenses to the
alleged infringing technology.
We may not be able to develop alternative technologies or to obtain such
licenses. Even if a license were obtainable, we may not be able to negotiate
terms commercially acceptable to us. In the event of a successful claim of
product infringement against us and our failure or inability to license the
infringed or similar technology, our business, operating results and financial
condition could be materially adversely affected.
OUR PRINCIPAL SHAREHOLDERS CONTROL A MAJORITY OF OUR VOTING STOCK
Our principal shareholders, Kenneth E. deLaski, our President and Chief
Executive Officer, and Donald deLaski, our Chairman, together with their
affiliates, in the aggregate own approximately 50% of the outstanding shares of
the common stock as of August 1, 1999. As a result, these shareholders, acting
together, are able to effectively control substantially all matters requiring
approval by our shareholders including the election of the Board of Directors
and significant corporate transactions. Their influence could
- delay or prevent a change in control of the Company;
- impede a merger, consolidation, takeover or other business
combination involving the Company; or
- discourage a potential acquiror from making a tender offer or
otherwise attempting to obtain control of the Company.
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FUTURE SALES OF SHARES COULD ADVERSELY AFFECT THE MARKET PRICE OF OUR STOCK.
Substantially all of our restricted securities are available for resale
pursuant to Rule 144 under the Securities Act of 1933, as amended, including the
shares owned by the principal shareholders. In October 1998, pursuant to
contractual obligations to do so, we registered an aggregate of 516,751 shares
of common stock and 130,000 shares of common stock issuable pursuant to
outstanding warrants under the Securities Act. Sales of substantial amounts of
such securities could adversely affect prevailing market prices for the common
stock.
THE MARKET PRICE OF OUR COMMON STOCK HAS BEEN AND MAY CONTINUE TO BE VOLATILE.
The market price of our common stock has historically been volatile. We
believe the following factors may cause the market price of the common stock to
fluctuate, perhaps substantially:
- quarterly fluctuations in results of operations;
- announcements of new products and acquisitions by us or by our
competitors;
- changes in earnings estimates by analysts;
- changes in accounting treatments or principles; and
- other market, general economic, and political factors.
The market price of the common stock also may be affected by our ability to meet
market analysts' expectations. Our failure to meet such expectations could have
a material adverse effect on the market price of the common stock. In addition,
securities prices for many technology companies fluctuate widely for reasons
which may be unrelated to operating results of such companies.
In the past, following periods of volatility in the market price of a
company's securities, class action litigation has often been instituted against
such company. Any such litigation instigated against us could result in
substantial costs and a diversion of management's attention and resources from
day-to-day operations, which could have a material adverse effect on our
business, operating results and financial condition.
OUR BUSINESS
We are a leading provider of enterprise software products that enable
project-oriented organizations to more effectively manage, operate and grow
their operations. Our software products address the needs specific to such
organizations through a wide range of functionality, such as financial and
project accounting, human resources management and administration, materials
management and project reporting. We also provide a full range of services,
including implementation and consulting, training and ongoing support. In the
year ended December 31, 1998, 33.9% of our total revenues was derived from
software license fees and 61.2% of our total
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revenues was generated from services. Since our inception, we have licensed our
products to over 5,000 project-oriented organizations across a spectrum of
industries, including
- architecture and engineering;
- environmental;
- systems integration;
- research and development;
- contract services;
- construction;
- make-to-order manufacturers; and
- not-for-profit organizations.
Many of these project-oriented businesses provide products and services under
federal government contracts.
Since our inception, we have focused exclusively on developing and
providing products and services designed to meet the needs of project-oriented
organizations. We believe that this focus is a competitive advantage in serving
project-oriented markets relative to companies that offer more general-purpose
enterprise software. We also believe that our solutions generally are
better-suited, require shorter implementation times and cost less to install and
maintain than general-purpose enterprise solutions.
Our enterprise-wide products consist of:
- Costpoint, an advanced client/server-based business software system
designed for all types of project-oriented organizations;
- Advantage, an integrated, project-focused accounting system designed
for professional services firms;
- System1, a character-based accounting system designed primarily for
organizations providing products or services under contracts with
the federal government; and
- CFMS, a family of older-generation project-based accounting systems
used primarily by architecture and engineering firms.
Our stand-alone application software product, which also can be integrated with
our enterprise-wide systems, Electronic Timesheet, is an advanced employee
timekeeping system.
We also provide implementation and consulting, training and ongoing
support services as an integral part of our solution. In contrast to
general-purpose software vendors that often rely on third-party providers, we
have a staff of over 130 experienced system consultants who directly assist our
customers with system implementation. Beyond implementation, we provide training
either on site or at one of our training centers. We also provide our customers
with ongoing product maintenance and technical support, which is a significant
source of recurring revenues.
13
<PAGE> 17
PROCEEDS
We will not receive any of the proceeds from the sale of the shares of our
common stock by Mr. Brehm.
SELLING SHAREHOLDER
The following table provides information as to Mr. Brehm as of August 11,
1999, who may use this prospectus to sell our common stock. We do not know
whether Mr. Brehm will sell any or all of his shares covered by this prospectus.
Assuming all such shares are sold by him, he would own less than one percent
(1%) of our common stock.
<TABLE>
<CAPTION>
Number of Shares Covered
Shareholder Number of Shares Owned By This Prospectus
<S> <C> <C>
Eric J. Brehm 7,248 4,230
</TABLE>
PLAN OF DISTRIBUTION
The shares of our common stock covered by this prospectus will be sold, if
at all, by Mr. Brehm, and not by us. The shares may be sold from time to time as
follows:
- on the Nasdaq National Market, in the over-the-counter market, or on
a national securities exchange;
- to purchasers directly;
- in ordinary brokerage transactions in which the broker solicits
purchasers;
- through underwriters, dealers and agents who may receive
compensation in the form of underwriting discounts, concessions or
commissions from a seller and/or the purchasers of the shares for
whom they may act as agent;
- through the writing of options on the shares;
- through the pledge of shares as security for any loan or obligation,
including pledges to brokers or dealers who may from time to time
effect distributions of the shares or other interests in the shares;
14
<PAGE> 18
- through purchases by a broker or dealer as principal and resale by
such broker or dealer for its own account pursuant to this
prospectus;
- through block trades in which the broker or dealer so engaged will
attempt to sell the shares as agent or as riskless principal but may
position and resell a portion of the block as principal to
facilitate the transaction;
- through exchange distributions in accordance with the rules of the
applicable exchange;
- in any combination of one or more of these methods; or
- in any other lawful manner.
These sales may be made at prices related to the then current market price
or otherwise at prices and on terms then prevailing, or in privately negotiated
transactions. In effecting sales, a broker or dealer engaged by an individual
using this prospectus to sell common stock may arrange for other brokers or
dealers to participate in the sale. In addition, any shares covered by this
prospectus which qualify for sale pursuant to Section 4(1) of the Securities Act
or Rules 144 or 701(g) under the Securities Act may be sold thereunder rather
than by this prospectus.
In connection with distributions of the shares or otherwise, an individual
using this prospectus to sell common stock may enter into hedging transactions
with a broker-dealer. In connection with such a transaction, a broker-dealer may
engage in short sales of shares registered hereunder in the course of hedging
the positions they assume with the seller. The seller may also sell shares short
and deliver the shares to close out such short positions. The seller may also
enter into an option or other transaction with a broker-dealer which requires
the delivery to the broker-dealer of shares we have registered, which the
broker-dealer may resell by this prospectus.
A seller may pay a broker-dealer or an agent compensation in the form of
commissions, discounts or concessions. The broker-dealer and any other
participating broker-dealer may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales and any such
commission, discount or concession may be deemed to be underwriting discounts or
commissions under the Securities Act.
We may be required to file a supplemental prospectus in connection with
any activities involving a seller which may be deemed to be an "underwriting."
In that case, a supplement to this prospectus would contain
(1) information as to whether an underwriter selected by a seller, or
any other broker-dealer, is acting as principal or agent for the
seller,
15
<PAGE> 19
(2) the compensation to be received by an underwriter selected by a
seller or any broker-dealer, for acting as principal or agent for a
seller and
(3) the compensation to be received by any other broker-dealer, in the
event the compensation of such other broker-dealers is in excess of
usual and customary commissions.
Any broker or dealer participating in any distribution of the shares may be
required to deliver a copy of this prospectus, including any prospectus
supplement, to any individual who purchases any shares from or through such a
broker-dealer.
We have advised Mr. Brehm, as a potential seller of common stock, that
during any period when he may be engaged in a distribution of the shares offered
by this prospectus, he is required to comply with Regulation M promulgated under
the Exchange Act. With certain exceptions, Regulation M precludes any seller,
any affiliated purchaser and any broker-dealer or other individual who
participates in such a distribution from bidding for or purchasing, or
attempting to induce any individual to bid for or purchase any security, that is
the subject of the distribution until the entire distribution is complete.
Regulation M also prohibits any bids or purchases made in order to stabilize the
price of a security in connection with the distribution of that security. All of
these factors may affect the marketability of our common stock.
OUR CAPITAL STOCK
Our authorized capital stock consists of 45,000,000 shares of common
stock, $.001 par value per share, and 2,000,000 shares of preferred stock, $.001
par value per share.
The following summary description of our common stock and our preferred
stock is not complete and is subject to, and qualified in its entirety by, the
provisions of our Articles of Incorporation, as amended, which have been
previously filed with the SEC.
COMMON STOCK
As of June 30, 1999, we had 16,907,469 shares of common stock outstanding.
Each share of common stock is entitled to one vote on all matters
submitted to a vote of shareholders. Holders of a majority of our shares of
common stock who are entitled to vote in any election of directors may elect all
of the directors standing for election. Unless there are preferences applicable
to any shares of outstanding preferred stock, the holders of common stock are
entitled to receive ratably such dividends as may be declared by the Board of
Directors out of funds legally available therefor. In the event we liquidate,
dissolve or wind up our affairs, holders of our common stock are entitled to
share ratably in the assets remaining after payment
16
<PAGE> 20
of liabilities and the liquidation preference of any outstanding shares of
preferred stock. Holders of our common stock have no preemptive, conversion or
redemption rights.
PREFERRED STOCK
As of June 30, 1999, we have no shares of preferred stock outstanding but
our Articles of Incorporation authorize the Board of Directors to issue up to
2,000,000 shares of preferred stock without further action by the stockholders.
The Board may issue the preferred stock in one or more series and fix the
following:
- designations;
- powers;
- preferences;
- privileges;
- relative participating, optional or special rights; and
- the qualifications, limitations or restrictions, including, as to
each series,
-- dividend rights;
-- conversion rights;
-- voting rights;
-- terms of redemption; and
-- liquidation preferences.
Any of the above terms and conditions may be greater than the rights of the
holders of the common stock. We cannot predict the actual effect of the issuance
of any shares of preferred stock upon the rights of holders of common stock.
Preferred stock could be issued quickly with terms calculated to delay or
prevent a change in control or make removal of management more difficult. The
issuance of preferred stock may also have the effect of decreasing the market
price of our common stock. We do not have any present plans to issue preferred
stock.
ANTI-TAKEOVER EFFECTS OF VIRGINIA LAW AND OUR ARTICLES OF INCORPORATION
We are incorporated under the laws of Virginia and the Virginia Stock
Corporation Act. The Act contains certain anti-takeover provisions regulating
affiliated transactions and control share acquisitions and validating the
adoption of shareholder rights plans which are summarized below.
Affiliated Transactions. The affiliated transactions provisions are
designed to prevent a Virginia corporation from engaging in a transaction with
an "interested shareholder" unless approved by the majority of our disinterested
directors and the holders of at least two-third of our outstanding voting stock
which are not owned by the interested shareholder. The Act defines an
17
<PAGE> 21
interested shareholder generally as a person who owns more than 10% of our
voting stock. Certain exceptions are provided under the law.
Control Share Acquisitions. The control share acquisitions provisions of
the Act, limit an increase of the voting strength of the person acquiring the
shares above specified limits in director elections unless the voting rights are
granted by a majority of the outstanding voting stock not owned by the acquiring
person. If the voting rights are granted and the acquiring person controls 50%
or more of the voting power, all shareholders (other than the acquiring person)
are entitled to receive "fair value" for their shares as provided by the Act. If
the voting rights are not granted, we may, as authorized by our Bylaws, purchase
the acquiring person's shares at the cost to the acquiring person.
Shareholder Rights Plan. Under the shareholder rights plan provisions of
the Act, our Board of Directors is permitted to adopt a shareholder rights plan
that could render a hostile takeover prohibitively expensive if our Board
decides that the takeover is not in our best interests. Our Board of Directors
has not present plan to adopt a shareholder rights plan. Any plan adopted would
be on terms that the Board of Directors deems to be in the best interests of the
company and our shareholders.
The existence of the above provisions of the Act could delay or prevent a
change in control, impede a merger, consolidation or other business combination
or discourage a potential acquiror from making a tender offer or otherwise
attempting to obtain control of us.
Election of Directors. Our Articles of Incorporation divide the Board of
Directors into three classes. Each class serves a staggered three-year term.
This classification system may tend to discourage a third party from making a
tender offer or otherwise attempting to obtain control the company. It may also
maintain the incumbency of the Board of Directors as it generally makes it more
difficult for shareholders to replace a majority of the directors. Our Articles
of Incorporation do not provide for cumulative voting rights in the election of
directors. These and other provisions may have the effect of deferring hostile
takeovers or delaying changes in control or management. The amendment of these
provisions would require approval of holders of two thirds or more of the
outstanding shares of our stock entitled to vote thereon.
INDEMNIFICATION
Our Articles of Incorporation, as amended, limit, to the maximum extent
permitted by law, the personal liability of our directors and officers for
monetary damages for breach of their fiduciary duties as directors and officers,
except in certain circumstances involving certain wrongful acts, such as a
breach of the director's duty of loyalty or acts of omission which involve
intentional misconduct or a knowing violation of law.
18
<PAGE> 22
Section 10 of the Virginia Stock Corporation Act allows for
indemnification, in certain circumstances, by a corporation of any person
threatened with or made a party to any action, suit or proceeding by reason of
the fact that he or she is, or was, a director, officer, employee or agent of
such corporation. Our Articles of Incorporation provide for mandatory
indemnification of our directors and officers and for discretionary
indemnification of any employee or agent to the full extent permitted by the
Act, including in circumstances in which indemnification is otherwise
discretionary under the Act. In addition, we have entered into separate
indemnification agreements with our directors and officers setting forth certain
procedures and other conditions applicable to claims for indemnification
pursuant to our Articles of Incorporation and agreeing, subject to certain
limitations, to obtain and maintain directors' and officers' liability insurance
coverage for our directors and officers. These indemnification provisions may be
sufficiently broad to permit indemnification of our officers and directors for
liabilities (including reimbursement of expenses incurred) arising under the
Securities Act.
We maintain a policy of directors and officers liability insurance.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the company
pursuant to the foregoing provisions, we have been informed that in the opinion
of the Securities and Exchange Commission, such indemnification is against
public policy as expressed in the Securities Act and is therefore unenforceable.
LEGAL MATTERS
The legality of the common stock being offered hereby has been passed upon
by Hazel & Thomas, P.C., Falls Church, Virginia, counsel to the Company. Robert
E. Gregg, a director of the Company, is a shareholder of Hazel & Thomas, P.C.
EXPERTS
The consolidated financial statements of Deltek as of December 31, 1997
and 1998 and for each of the three years in the period ended December 31, 1998
included in, incorporated by reference in, this prospectus have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included or incorporated by reference
herein in reliance upon the authority of said firm as experts in giving said
reports.
19
<PAGE> 23
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, and any amendments thereto, filed by Deltek
Systems, Inc. (the "Company") with the Securities and Exchange Commission are
incorporated by reference in this Registration Statement and shall be deemed to
be a part hereof from the date of filing such documents.
(a) The Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1999 (File No. 000-22001);
(b) The Company's Amended Quarterly Reports on Form 10-Q for the
quarters ended June 30, 1998 and September 30, 1998;
(c) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998 (File No. 000-22001); and
(d) All reports filed by the Company pursuant to Sections 13(a) and
15(d) of the Exchange Act subsequent to the date of this
Registration Statement and prior to the filing of a post-effective
amendment which indicates that all of the securities offered hereby
have been sold or which deregisters all securities then remaining
unsold.
ITEM 4. DESCRIPTION OF SECURITIES.
Our authorized capital stock consists of 45,000,000 shares of common
stock, $.001 par value per share, and 2,000,000 shares of preferred stock, $.001
par value per share.
The following summary description of our common stock and our preferred
stock is not complete and is subject to, and qualified in its entirety by, the
provisions of our Articles of Incorporation, as amended, which have been
previously filed with the SEC.
COMMON STOCK
As of June 30, 1999, we had 16,907,469 shares of common stock outstanding.
Each share of common stock is entitled to one vote on all matters
submitted to a vote of shareholders. Holders of a majority of our shares of
common stock who are entitled to vote in any election of directors may elect all
of the directors standing for election. Unless there are preferences applicable
to any shares of outstanding preferred stock, the holders of common stock are
entitled to receive ratably such dividends as may be declared by the Board of
Directors out of funds legally available therefor. In the event we liquidate,
dissolve or wind up our affairs, holders of our common stock are entitled to
share ratably in the assets remaining after payment of liabilities and the
liquidation preference of any outstanding shares of preferred stock. Holders of
our common stock have no preemptive, conversion or redemption rights.
PREFERRED STOCK
As of June 30, 1999, we have no shares of preferred stock outstanding but
our Articles of Incorporation authorize the Board of Directors to issue up to
2,000,000 shares of preferred stock without further action by the stockholders.
The Board may issue the preferred stock in one or more series and fix the
following:
- designations;
- powers;
- preferences;
- privileges;
- relative participating, optional or special rights; and
- the qualifications, limitations or restrictions, including,
as to each series,
-- dividend rights;
-- conversion rights;
-- voting rights;
-- terms of redemption; and
-- liquidation preferences.
Any of the above terms and conditions may be greater than the rights of the
holders of the common stock. We cannot predict the actual effect of the issuance
of any shares of preferred stock upon the rights of holders of common stock.
Preferred stock could be issued quickly with terms calculated to delay or
prevent a change in control or make removal of management more difficult. The
issuance of preferred stock may also have the effect of decreasing the market
price of our common stock. We do not have any present plans to issue preferred
stock.
ANTI-TAKEOVER EFFECTS OF VIRGINIA LAW AND OUR ARTICLES OF INCORPORATION
We are incorporated under the laws of Virginia and the Virginia Stock
Corporation Act. The Act contains certain anti-takeover provisions regulating
affiliated transactions and control share acquisitions and validating the
adoption of shareholder rights plans which are summarized below.
Affiliated Transactions. The affiliated transactions provisions are
designed to prevent a Virginia corporation from engaging in a transaction with
an "interested shareholder" unless approved by the majority of our disinterested
directors and the holders of at least two-third of our outstanding voting stock
which are not owned by the interested shareholder. The Act defines an interested
shareholder generally as a person who owns more than 10% of our voting stock.
Certain exceptions are provided under the law.
Control Share Acquisitions. The control share acquisitions provisions of
the Act, limit an increase of the voting strength of the person acquiring the
shares above specified limits in director elections unless the voting rights are
granted by a majority of the outstanding voting stock not owned by the acquiring
person. If the voting rights are granted and the acquiring person controls 50%
or more of the voting power, all shareholders (other than the acquiring person)
are entitled to receive "fair value" for their shares as provided by the Act. If
the voting rights are not granted, we may, as authorized by our Bylaws, purchase
the acquiring person's shares at the cost to the acquiring person.
Shareholder Rights Plan. Under the shareholder rights plan provisions of
the Act, our Board of Directors is permitted to adopt a shareholder rights plan
that could render a hostile takeover prohibitively expensive if our Board
decides that the takeover is not in our best interests. Our Board of Directors
has no present plan to adopt a shareholder rights plan. Any plan adopted would
be on terms that the Board of Directors deems to be in the best interests of the
company and our shareholders.
The existence of the above provisions of the Act could delay or prevent a
change in control, impede a merger, consolidation or other business combination
or discourage a potential acquiror from making a tender offer or otherwise
attempting to obtain control of us.
Election of Directors. Our Articles of Incorporation divide the Board of
Directors into three classes. Each class serves a staggered three-year term.
This classification system may tend to discourage a third party from making a
tender offer or otherwise attempting to obtain control the company. It may also
maintain the incumbency of the Board of Directors as it generally makes it more
difficult for shareholders to replace a majority of the directors. Our Articles
of Incorporation do not provide for cumulative voting rights in the election of
directors. These and other provisions may have the effect of deferring hostile
takeovers or delaying changes in control or management. The amendment of these
provisions would require approval of holders of two thirds or more of the
outstanding shares of our stock entitled to vote thereon.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Robert E. Gregg, a Director of the Company, is a shareholder of Hazel &
Thomas, P.C.
ITEM 6. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Section 10 of the Virginia Stock Corporation Act (the "VSCA") allows for
indemnification, in certain circumstances, by a corporation of any person
threatened with or made a party to any action, suit or proceeding by reason of
the fact that he or she is, or was, a director, officer, employee or agent of
such corporation. The Registrant's Articles of Incorporation provide for
mandatory indemnification of its directors and officers and for discretionary
indemnification of any employee
II-1
<PAGE> 24
or agent to the full extent permitted by the VSCA, including in circumstances
in which indemnification is otherwise discretionary under the VSCA. In
addition, the Registrant has entered into separate indemnification agreements
with its directors and officers setting forth certain procedures and other
conditions applicable to claims for indemnification pursuant to the Company's
Articles of Incorporation and agreeing, subject to certain limitations, to
obtain and maintain directors' and officers' liability insurance coverage for
its directors and officers. These indemnification provisions may be
sufficiently broad to permit indemnification of the Registrant's officers and
directors for liabilities (including reimbursement of expenses incurred)
arising under the Securities Act of 1933, as amended.
The Company maintains a policy of directors and officers liability
insurance.
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE SECURITIES
ACT MAY BE PERMITTED TO DIRECTORS, OFFICERS OR PERSONS CONTROLLING THE COMPANY
PURSUANT TO THE FOREGOING PROVISIONS, THE COMPANY HAS BEEN INFORMED THAT IN THE
OPINION OF THE SECURITIES AND EXCHANGE COMMISSION, SUCH INDEMNIFICATION IS
AGAINST PUBLIC POLICY AS EXPRESSED IN THE SECURITIES ACT AND IS THEREFORE
UNENFORCEABLE.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
ITEM 8. EXHIBITS
4.3 Form of Brehm Option
5.1 Opinion of Hazel & Thomas, P.C.
23(a) Consent of Arthur Andersen LLP
23(b) Consent of Counsel included in Exhibit 5.1.
ITEM 9. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
A. Rule 415 Offering.
1. To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
II-2
<PAGE> 25
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
provided, however, that paragraphs A(1)(i) and (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 by the registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in this registration statement.
2. That, for the purpose of determining any liability under the Securities
Act of 1993, 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.
B. Subsequent Exchange Act Documents Incorporated by Reference:
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1993, each filing of the
issuer's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act, 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.
C. Indemnification.
1. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the 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 Company of expenses incurred or paid by a director, officer, or
controlling person of the Company in the successful defense of any action, suit,
or proceeding) is asserted by such director, officer, or
II-3
<PAGE> 26
controlling person in connection with the securities being registered, the
Company 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.
II-4
<PAGE> 27
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-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of McLean, State of Virginia, on August 17, 1999.
DELTEK SYSTEMS, INC.
By: /s/ Kenneth E. deLaski
--------------------------
Kenneth E. deLaski, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Kenneth E. deLaski President, Chief Executive August 17, 1999
- ----------------------------- Officer and Director
Kenneth E. deLaski
/s/ Donald deLaski Chairman of the Board of August 17, 1999
- ----------------------------- Directors
Donald deLaski
/s/ Eric F. Brown Executive Vice President, August 17, 1999
- ----------------------------- Technical Operations
Eric F. Brown
/s/ Bryan Fleming Controller and Treasurer August 17, 1999
- ----------------------------- (Principal Financial and
Bryan Fleming Accounting Officer)
/s/ Robert E. Gregg Director August 17, 1999
- -----------------------------
Robert E. Gregg
/s/ Darrell J. Oyer Director August 17, 1999
- -----------------------------
Darrell J. Oyer
/s/ Charles W. Stein Director August 17, 1999
- -----------------------------
Charles W. Stein
</TABLE>
<PAGE> 28
INDEX TO EXHIBITS
Exhibit No. Title of Exhibit
4.3 Form of Brehm Option
5.1 Opinion of Hazel & Thomas, P.C.
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Counsel included in Exhibit 5.1.
<PAGE> 1
Exhibit 4.3
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT ("Option Agreement") is made effective as of
the 29th day of May, 1998, by and between ERIC J. BREHM ("Optionee") and DELTEK
SYSTEMS, INC., a Virginia corporation (the "Company").
NOW, THEREFORE, in consideration of Optionee's transfer of an option to
acquire shares of common stock of Harper and Shuman, Inc., a Massachusetts
corporation, the parties do hereby agree as follows:
1. Grant of Option
The Company hereby grants to Optionee the right, privilege, and option
(the "Option") to subscribe for up to___________________ shares of voting common
stock in the Company ("Shares") at an aggregate purchase price of
________________ Dollars ($________) (the per share purchase price to be derived
from such aggregate price), in the manner and subject to the conditions
hereinafter provided. These Stock Options granted hereunder are pursuant to and
in connection with the Agreement and Plan of Reorganization dated as of May 27,
1998 and are issued under an exemption from registration of the securities laws.
2. Time of Exercise
The Option is exercisable at any time and from time to time between the
date of this Option Agreement and December 31, 1999 (the "Expiration Date"). Any
rights under this Option Agreement to subscribe for Shares that are not
exercised on or before 5:00 p.m. on the Expiration Date, will become wholly void
and will terminate.
3. Method of Exercise
(a) The Option shall be exercised by written "Notice of Exercise"
to the Company stating that the Optionee is exercising its rights under this
Option Agreement to purchase some, or all of the Shares (and if Optionee is
exercising its rights with respect to less than all of the Shares, then
specifying the number of Shares for which Optionee is exercising its option) and
shall be accompanied by the payment in full of the purchase price for the Shares
for which Optionee is exercising its option . In no event, shall the Company be
required to issue to Optionee fractional shares. In connection with any exercise
of its option to subscribe for and purchase the Shares, the Optionee shall
execute such documents as the Company may reasonably require.
(b) Any Notice of Exercise shall be deemed effective upon mailing
if sent by registered or certified mail, return receipt requested, postage and
certification prepaid, to Deltek
1
<PAGE> 2
Systems, Inc., 8280 Greensboro Drive, Suite 300, McLean, Virginia 22102,
Attention: Corporate Secretary, or to such other address as the Company may,
from time to time, establish as the mailing address for its principal place of
business. Any other Notice of Exercise shall be effective upon actual receipt
by the Secretary of the Company or the Secretary's duly authorized delegate.
4. Reclassification, Consolidation, or Merger
If and to the extent that the number of issued Shares shall be increased
or reduced by change in the par value, split-up, reclassification, distribution,
or a dividend payable in stock, or the like, the number of Shares then subject
to this Option Agreement and the option price per share shall be proportionately
adjusted. If the Company is reorganized, consolidated, or merged with another
corporation and if as of the date of such reorganization, consolidation or
merger Optionee has not already fully exercised the Option, Optionee shall be
entitled to receive an option covering shares of the reorganized, consolidated,
or merged company in the same proportion, at an equivalent price, and subject to
the same conditions.
5. Nontransferability of Option.
This Option may not be conveyed, assigned, encumbered or otherwise
transferred in whole or in part by Optionee.
6. Rights Prior to Exercise of Option
Optionee shall have no rights as a stockholder with respect to the
Shares subject to the Option until payment of the option price and delivery to
Optionee of such Shares as herein provided.
7. Governing Law.
This Option Agreement shall be governed and construed under the laws
of, or applicable to the Commonwealth of Virginia except the laws of conflict.
8. Binding Effect
This Option Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective heirs, executors, administrators,
successors, and assigns.
2
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused this Option Agreement
to be made effective as of the date first set forth above.
DELTEK SYSTEMS, INC.,
a Virginia corporation
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
--------------------------------
ERIC J. BREHM
3
<PAGE> 1
Exhibit 5.1
August 17, 1999
Board of Directors
Deltek Systems, Inc.
8280 Greensboro Drive
McLean, Virginia 22102
Re: Registration Statement on Form S-8
Gentlemen:
We have acted as counsel to Deltek Systems, Inc., a Virginia corporation
(the "Company"), in connection with the preparation and filing by the Company of
its registration statement on Form S-8 (the "Registration Statement") under the
Securities Act of 1933, as amended, for the purpose of registering an aggregate
of 4,230 shares of Common Stock, $.001 par value (the "Common Stock"), issuable
upon exercise of options granted to Eric Brehm (the "Brehm Options").
We have examined the Brehm Options, the Articles of Incorporation, as
amended, the By-Laws of the Company, the minutes of the various meetings and
consents of the Company's Board of Directors, originals or copies of such
records of the Company, agreements, certificates of public officials,
certificates of officers and representatives of the Company and others, and such
other documents, certificates, records, authorizations, proceedings, statutes
and judicial decisions as we have deemed necessary to form the basis of the
opinion expressed below. In such examination, we have assumed the genuineness of
all signatures, the authenticity of all documents submitted to us as originals
and the conformity to originals of all documents submitted to us as copies
thereof. As to various questions of fact material to such opinion, we have
relied upon statements and certificates of officers and representatives of the
Company and others.
Based upon the foregoing, we are of the opinion that the 4,230 shares of
Common Stock issuable under the Brehm Options which are subject of the
Registration Statement have been duly authorized and, when issued and paid for
in accordance with the Brehm Options, will be duly authorized, fully paid and
nonassessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement.
Yours very truly,
/s/ Hazel & Thomas, P.C.
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-8 of our reports dated
January 22, 1999, included in the Deltek Systems, Inc. Annual Report on Form
10-K for the year ended December 31, 1998, and to all references to our Firm
included in this registration statement for Options Issued to Eric Brehm.
ARTHUR ANDERSEN LLP
Washington, D.C.
August 13, 1999
