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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D/A
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)
MISSION CRITICAL SOFTWARE, INC.
(Name of Issuer)
COMMON STOCK
(Title of Class of Securities)
605047 10 9
(CUSIP Number)
Ching-Fa Hwang
NetIQ Corporation
5410 Betsy Ross Drive
Santa Clara, CA 95054
(408) 330-7000
Copies to:
Larry W. Sonsini
Thomas C. DeFilipps
Steve L. Camahort
Wilson Sonsini Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, CA 94304
(650) 493-9300
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
February 26, 2000
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Sections 240.13-1(e), 240.13d-(f) or 240.13d-1(g),
check the following box.
NOTE: Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See Section 240.13d-7(b)
for other parties to whom copies are to be sent.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
NetIQ Corporation I.R.S. Identification No.: 77-0405505
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)
(b)
N/A
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
N/A
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
State of Delaware
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NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY 3,416,052 (1)
OWNED BY EACH
REPORTING PERSON
WITH
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8 SHARED VOTING POWER
2,593,710 (2)
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9 SOLE DISPOSITIVE POWER
3,416,052 (1)
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10 SHARED DISPOSITIVE POWER
N/A
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,009,762 (1) (2)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
29.3%(3)
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
(1) 3,416,052 shares of MCS Common Stock are subject to a Stock Option
Agreement between NetIQ and MCS. This option is exercisable under certain
circumstances in connection with a termination of the Merger Agreement. Were it
to be exercised, based on the number of shares of MCS Common Stock outstanding
as of February 22, 2000 (as represented by MCS in the Merger Agreement discussed
in Items 3 and 4), the option shares would represent approximately 16.7% of the
outstanding MCS Common Stock subsequent to the exercise of the option.
(2) 2,593,710 shares of Mission Critical Software Inc. ("MCS") Common
Stock are subject to Voting Agreements entered into by NetIQ and certain
stockholders of MCS (discussed in Items 3 and 4 below). NetIQ expressly
disclaims beneficial ownership of any of the shares of MCS Common Stock covered
by the Voting Agreements. Based on the number of shares of MCS Common Stock
outstanding as of February 22, 2000 (as represented by MCS in the Merger
Agreement discussed in Items 3 and 4), the number
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of shares of MCS Common Stock covered by the Voting Agreements represents
approximately 15.2% of the outstanding MCS Common Stock.
(3) Assuming the exercise of all shares subject to the stock option
described above.
ITEM 1. SECURITY AND ISSUER.
This statement relates to the Common Stock of Mission Critical Software
Inc. ("MCS ") a Delaware corporation ("MCS " or "Issuer"). The principal
executive offices of MCS are located at 13939 Northwest Freeway, Houston, Texas
77040.
ITEM 2. IDENTITY AND BACKGROUND.
The name of the corporation filing this statement is NetIQ Corporation, a
Delaware corporation ("NetIQ"). NetIQ is a provider of eBusiness infrastructure
management software that enables businesses to optimize the performance and
availability of their Windows NT-based systems and applications. NetIQ's
principal business address is 5410 Betsy Ross Drive, Santa Clara, CA 95054.
The address of NetIQ's executive offices is the same as the address of its
principal business.
Set forth on Schedule A is the name of each of the directors and executive
officers of NetIQ along with the present principal occupation or employment of
such directors and executive officers and the name, principal business and
address of any corporation or other organization in which such employment is
conducted, as of the date hereof to NetIQ's knowledge. To NetIQ's knowledge,
each of the individuals identified on Schedule A is a citizen of the United
States.
Neither NetIQ, nor to NetIQ's knowledge any person named on Schedule A
hereto is required to disclose legal proceedings pursuant to Items 2(d) or 2(e).
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Pursuant to an Agreement and Plan of Reorganization dated as of February
26, 2000 (the "Merger Agreement"), among NetIQ, Planet Acquisition Corp., a
Delaware corporation and wholly-owned subsidiary of NetIQ ("Merger Sub") and
MCS, and subject to the conditions set forth therein (including approval by
stockholders of MCS and NetIQ), Merger Sub will merge with and into MCS and MCS
will become a wholly-owned subsidiary of NetIQ (such events constituting the
"Merger"). Once the Merger is consummated, Merger Sub will cease to exist as a
corporation and all of the business, assets, liabilities and obligations of
Merger Sub will be merged into MCS with MCS remaining as the surviving
corporation (the "Surviving Corporation").
As an inducement for NetIQ to enter into the Merger Agreement and in
consideration thereof, certain stockholders of MCS entered into individual
agreements with NetIQ (collectively the "MCS Voting Agreements") whereby each
such stockholder (collectively, the "MCS Voting Agreement Stockholders") agreed,
severally and not jointly, to vote all of the shares of MCS Common Stock
beneficially owned by him in favor of approval and adoption of the Merger
Agreement and approval of the Merger and certain related matters. NetIQ did not
pay additional consideration to any MCS Voting Agreement Stockholder in
connection with the execution and delivery of the MCS Voting Agreements.
As a condition of NetIQ's willingness to enter into the Merger Agreement,
MCS agreed to grant to NetIQ an option to acquire up to 3,416,052 shares of MCS
Common Stock pursuant to a stock option agreement (the "MCS Stock Option
Agreement"). The MCS Stock Option Agreement becomes exercisable if the Merger
Agreement is terminated under certain circumstances.
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References to, and descriptions of, the Merger, the Merger Agreement, the
MCS Stock Option Agreement and the NetIQ Stock Option Agreement as set forth in
this Schedule 13D are qualified in their entirety by reference to the copies of
the Merger Agreement, the MCS Stock Option Agreement and the NetIQ Stock Option
Agreement included as Exhibits to the Form 8-K filed by NetIQ on March 6, 2000.
References to, and descriptions of, the MCS Voting Agreements as set forth
in this Schedule 13D are qualified in their entirety by reference to the copy
the form of MCS Voting Agreement included as Exhibit A to this Schedule 13D.
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ITEM 4. PURPOSE OF TRANSACTION.
(a) Not applicable.
(b) As described in Item 3 above, this statement relates to the Merger of
Merger Sub, a wholly-owned subsidiary of NetIQ, with and into MCS in a statutory
merger pursuant to the applicable provisions of Delaware Law. At the effective
time of the Merger, the separate existence of Merger Sub will cease and MCS will
continue as the Surviving Corporation and as a wholly-owned subsidiary of NetIQ.
Each holder of outstanding MCS Common Stock will receive, in exchange for each
share of MCS Common Stock held by such holder, 0.9413 shares of NetIQ Common
Stock. NetIQ will assume each outstanding option to purchase MCS Common Stock
under MCS's stock option plans. Furthermore, all rights to purchase shares of
MCS Common Stock under MCS's Employee Stock Purchase Plan shall be converted
into rights to purchase shares of NetIQ Common Stock and shall be assumed by
NetIQ.
Pursuant to the MCS Voting Agreements, the MCS Voting Agreement
Stockholders have agreed to vote their shares of MCS Common Stock (plus any
additional shares of MCS Common Stock and all additional options, warrants and
other rights to acquire shares of MCS Common Stock) beneficially owned by the
Voting Agreement Stockholders (the "MCS Voting Agreement Shares") at every MCS
stockholders meeting and every written consent in lieu of such a meeting to vote
the shares (a) in favor of the Merger and the Merger Agreement (the "MCS
Approval Matters"), (b) in favor of any matter that could reasonably be expected
to facilitate the MCS Approval Matters and (c) in such manner as NetIQ may
direct with respect to all other proposals submitted to the stockholders of
MCS which, directly or indirectly, in any way relates to the MCS Approval
Matters. The MCS Voting Agreements terminate upon the earlier to occur of (i)
such date and time as the Merger shall become effective in accordance with the
terms and provisions of the Merger Agreement, or (ii) such date and time as the
Merger Agreement shall have been terminated pursuant to Article VII thereof.
As a condition of NetIQ's willingness to enter into the Merger Agreement,
MCS agreed to grant to NetIQ an option to acquire up to 3,416,052 shares of MCS
Common Stock pursuant to a stock option agreement (the "MCS Stock Option
Agreement"). The MCS Stock Option Agreement becomes exercisable if the Merger
Agreement is terminated under certain circumstances. The MCS Stock Option
Agreement expires upon the earliest of (i) the effectiveness of the Merger or
(ii) twelve months after a termination of the Merger Agreement pursuant to
certain of its provisions.
As an inducement for MCS to enter into the Merger Agreement and in
consideration thereof, certain stockholders of NetIQ entered into individual
agreements with MCS (collectively the "NetIQ Voting Agreements") whereby each
such stockholder (collectively, the "NetIQ Voting Agreement Stockholders")
agreed, severally and not jointly, to vote all of the shares of NetIQ Common
Stock beneficially owned by him in favor of approval and adoption of the Merger
Agreement and approval of the Merger and certain related matters. MCS did not
pay additional consideration to any NetIQ Voting Agreement Stockholder in
connection with the execution and delivery of the NetIQ Voting Agreements.
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Pursuant to the NetIQ Voting Agreements, the NetIQ Voting Agreement
Stockholders have agreed to vote their shares of NetIQ Common Stock (plus any
additional shares of NetIQ Common Stock and all additional options, warrants and
other rights to acquire shares of NetIQ Common Stock) beneficially owned by the
NetIQ Voting Agreement Stockholders (the "NetIQ Voting Agreement Shares") at
every NetIQ stockholders meeting and every written consent in lieu of such a
meeting to vote the shares (a) in favor of approval of the Merger, the Merger
Agreement and the issuance of shares of NetIQ Common Stock in exchange for all
outstanding capital stock of MCS as set forth in the Merger Agreement (the
"NetIQ Approval Matters"), (b) in favor of any matter that could reasonably be
expected to facilitate the NetIQ Approval Matters, and (c) in such manner as MCS
may direct with respect to all other proposals submitted to the stockholders of
NetIQ which, directly or indirectly, in any way relates to the NetIQ Approval
Matters. The NetIQ Voting Agreements terminate upon the earlier to occur of (i)
such date and time as the Merger shall become effective in accordance with the
terms and provisions of the Merger Agreement, or (ii) such date and time as the
Merger Agreement shall have been terminated pursuant to Article VII thereof.
In addition, NetIQ agreed to grant to MCS an option to acquire up to
3,520,234 shares of NetIQ Common Stock pursuant to a stock option agreement (the
"NetIQ Stock Option Agreement"). The NetIQ Stock Option Agreement becomes
exercisable if the Merger Agreement is terminated under certain circumstances.
The NetIQ Stock Option Agreement expires upon the earliest of (i) the
effectiveness of the Merger or (ii) twelve months after a termination of the
Merger Agreement pursuant to certain of its provisions.
The purpose of the transactions under the MCS Voting Agreements, the NetIQ
Voting Agreements, the MCS Stock Option Agreement and the NetIQ Stock Option
Agreement are to enable NetIQ and MCS to consummate the transactions
contemplated under the Merger Agreement.
(c) Not applicable.
(d) It is anticipated that upon consummation of the Merger, the directors
of the Surviving Corporation shall be the current directors of Merger Sub. The
initial officers of the Surviving Corporation shall be the following persons,
who shall hold the same offices in NetIQ:
Executive Chairman Michael Bennett
Chief Executive Officer Ching-Fa Hwang
Chief Operating Officer Steve Odom
Chief Financial Officer James Barth
Chief Technical Officer Tom Bernhardt
(e) Other than as a result of the Merger described in Item 3 above, not
applicable.
(f) Not applicable.
(g) Upon consummation of the Merger, the Certificate of Incorporation of
Merger Sub, as in effect immediately prior to the Merger, shall be the
Certificate of Incorporation of the Surviving Corporation until thereafter
amended as provided by Delaware Law and such Certificate of Incorporation. Upon
consummation of the Merger, the Bylaws of Merger Sub, as in effect immediately
prior to the Merger, shall be the Bylaws of the Surviving Corporation until
thereafter amended.
(h) - (i) If the Merger is consummated as planned, the MCS Common Stock
will be deregistered under the Act and delisted from The Nasdaq National Market.
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(j) Other than described above, NetIQ currently has no plan or proposals
which relate to, or may result in, any of the matters listed in Items 4(a) - (j)
of Schedule 13D (although NetIQ reserves the right to develop such plans).
References to, and descriptions of, the Merger, the Merger Agreement, the
MCS Stock Option Agreement and the NetIQ Stock Option Agreement as set forth in
this Schedule 13D are qualified in their entirety by reference to the copies of
the Merger Agreement, the MCS Stock Option Agreement and the NetIQ Stock Option
Agreement included as Exhibits to the Form 8-K filed by NetIQ on March 6, 2000.
References to, and descriptions of, the MCS Voting Agreements as set forth
in this Schedule 13D are qualified in their entirety by reference to the copy
the form of MCS Voting Agreement included as Exhibit A to this Schedule 13D.
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ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) - (b) As a result of the MCS Voting Agreements, NetIQ may be deemed to
be the beneficial owner of at least 2,593,710 shares of MCS Common Stock. Such
MCS Common Stock constitutes approximately 15.2% of the issued and outstanding
shares of MCS Common Stock based on the number of shares of MCS Common Stock
outstanding as of February 22, 2000 (as represented by MCS in the Merger
Agreement discussed in Items 3 and 4). NetIQ may be deemed to have the shared
power to vote the Shares with respect to those matters described above. However,
NetIQ (i) is not entitled to any rights as a stockholder of MCS as to the Shares
and (ii) disclaims any beneficial ownership of the shares of MCS Common Stock
which are covered by the Voting Agreements.
To NetIQ's knowledge, no person listed on Schedule A has an ownership
interest in MCS.
Set forth on Schedule B are the names of the stockholder of MCS that have
entered into an MCS Voting Agreement with NetIQ, and their present principal
occupation or employment, including the name, principal business and address of
any corporation or other organization in which such employment is conducted, to
NetIQ's knowledge.
To NetIQ's knowledge, no transactions in the class of securities reported
have been effected during the past sixty days by any person named pursuant to
Item 2.
(c) To the knowledge of NetIQ, no transactions in the class of securities
reported have been effected during the past sixty days by any person named
pursuant to Item 2.
(d) To the knowledge of NetIQ, no other person has the right to receive or
the power to direct the receipt of dividends from, or the proceeds from the sale
of, the securities of MCS reported on herein.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDING OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Other than the Merger Agreement and the exhibits thereto, including the
voting agreements and the stock option agreements described herein, to the
knowledge of NetIQ, there are no contracts, arrangements, understandings or
relationships among the persons named in Item 2 and between such persons and any
person with respect to any securities of MCS, including but not limited to
transfer or voting of any of the securities,
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finder's fees, joint ventures, loan or option arrangement, puts or calls,
guarantees of profits, division of profits or loss, or the giving or withholding
of proxies.
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS.
The following documents are filed as exhibits:
A. * Form of Voting Agreement, dated February 26, 2000, between NetIQ
Corporation and certain stockholders of Mission Critical Software,
Inc.
B.** Agreement and Plan of Reorganization, dated as of February 26, 2000,
by and among NetIQ Corporation, Planet Acquisition Corp. and Mission
Critical Software, Inc.
C.** Stock Option Agreement, dated February 26, 2000, between NetIQ
Corporation and Mission Critical Software, Inc.
D.** Stock Option Agreement, dated February 26, 2000, between Mission
Critical Software, Inc. and NetIQ Corporation.
* Filed previously.
** Incorporated by reference to the 8-K filed by NetIQ Corporation on March
6, 2000.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: April 7,2000 NETIQ CORPORATION
By: /s/ James A. Barth
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James A. Barth
Chief Financial Officer
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Schedule A
DIRECTORS AND EXECUTIVE OFFICERS OF
NETIQ CORPORATION
The following table sets forth the name, business address and present
principal occupation or employment of each director and executive officer of
NetIQ. The address of each such person is c/o NetIQ Corporation, 5410 Betsy
Ross Drive, Santa Clara, CA 95054. To NetIQ's knowledge, each of the
individuals identified below is a citizen of the United States.
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Present Principal Occupation and
Name and Title Name of Employer
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<S> <C>
Ching-Fa Hwang NetIQ Corporation
President, Chief Executive Officer and Director
James A. Barth NetIQ Corporation
Vice President, Finance, Chief Financial Officer and
Secretary
Her-Daw Che NetIQ Corporation
Vice President, Engineering and Director
Thomas R. Kemp NetIQ Corporation
Vice President, Marketing
Glenn S. Winokur NetIQ Corporation
Vice President, Worldwide Sales
Kuo-Wei ("Herbert") Chang President
Director InveStar Burgeon Venture Capital, Inc.
Louis C. Cole President and Chief Executive Officer
Director Legato Systems, Inc.
Alan W. Kaufman Chairman of the Board
Director QueryObject Systems
Ying-Hon Wong General Partner
Director Wongfratris Investment Company
</TABLE>
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Schedule B
The following table sets forth the name and present principal occupation or
employment of each MCS stockholder that entered into a voting agreement with
NetIQ. Except as indicated below, the business address of each such person is
c/o NetIQ Corporation, 5410 Betsy Ross Drive, Santa Clara, CA 95054.
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Voting Agreement Stockholder Shares Beneficially Owned
<S> <C>
Michael S. Bennett
Chairman and Chief Executive Officer, MCS 314,448
Stephen E. Odom
Chief Financial Officer and Chief Operating Officer, MCS 68,985
Thomas P. Bernhardt
Chief Technical Officer, MCS 867,322
Brian J. McGrath
Vice President, Sales, MCS 196,123
Scott D. Sandell
Director, MCS
Partner, New Enterprise Associates Entities 989,358
John D. Thornton
Director, MCS
General Partner, Austin Ventures Entities 24,765
Douglas L. Ayer
Director, MCS
President, International Capital Partners, Inc. 113,803
John Moores
Director 18,906
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TOTAL 2,593,710
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