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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 4, 2000
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
RETEK INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 51-0392671
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
801 NICOLLET MALL, 11TH FLOOR
MINNEAPOLIS, MINNESOTA 55402
(612) 630-5700
(Address, including zip code, and telephone number, including area
code, of Registrant's principal executive offices)
ROBERT FISCHER, ESQUIRE
801 NICOLLET MALL, 11TH FLOOR
MINNEAPOLIS, MINNESOTA 55402
(612) 630-5700
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
COPIES TO:
MICHAEL COLEMAN
SHEARMAN & STERLING
555 CALIFORNIA STREET
SAN FRANCISCO, CALIFORNIA 94104
(415) 616-1100
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after this registration statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering: [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box: [ ]
CALCULATION OF REGISTRATION FEE
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Title of each Class of Amount Proposed Proposed Amount of
Securities to be Registered to be Maximum Maximum Registration
Registered Offering Price Aggregate Fee
per Share (1) Offering Price(1)
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<S> <C> <C> <C> <C>
Common Stock, $.01 par value 689,057 shares $21.53 $14,835,397.21 $3,916.54
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(1) Estimated solely for the purposes of calculating the registration fee
pursuant to Rule 457(c) based on the average of the high and low trading prices
for the Common Stock on the Nasdaq National Market on November 30, 2000.
The Registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the registration statement
shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.
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SUBJECT TO COMPLETION, DATED DECEMBER 4, 2000
689,057 SHARES
[RETEK LOGO]
COMMON STOCK
This prospectus relates to the offering of 689,057 shares of our common
stock which are held by some of our current stockholders. We will not receive
any proceeds from the sale of the shares.
Each of the selling stockholders may sell the shares of common stock
offered hereby from time to time on terms to be determined at the time of sale.
To the extent required, the specific shares to be sold and the terms of the
offering with respect to a particular sale will be set forth in an accompanying
prospectus supplement. We have paid substantially all of the costs of this
offering, estimated at $45,917.
The selling stockholders and any broker-dealers, agents or underwriters
that participate in the distribution of the shares of common stock offered
hereby may be deemed to be underwriters under the Securities Act of 1933, as
amended. Any commissions received by them and any profit derived by them on the
resale of shares of the common stock purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.
Our common stock is quoted on the Nasdaq National Market under the
symbol "RETK". On November 30, 2000, the average of the high and low sale prices
for our common stock on the Nasdaq National Market was $21.53 per share.
INVESTING IN OUR COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 4 OF THIS PROSPECTUS.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these shares of common stock or
determined if this prospectus is truthful or complete. Any representation to the
contrary is a criminal offense.
The date of this prospectus is December 1, 2000.
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TABLE OF CONTENTS
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Page
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Forward-Looking Statements.....................................................................................1
Available Information..........................................................................................2
Information Incorporated by Reference..........................................................................2
Risk Factors...................................................................................................4
Retek Inc.....................................................................................................11
Selling Stockholders..........................................................................................12
Use of Proceeds...............................................................................................12
Plan of Distribution..........................................................................................12
Legal Matters.................................................................................................14
Experts.......................................................................................................14
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NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY RETEK OR
THE SELLING STOCKHOLDERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL
OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THOSE
SPECIFICALLY OFFERED HEREBY OR AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER
TO BUY, TO ANY PERSON IN ANY JURISDICTION WHERE SUCH AN OFFER OR SOLICITATION
WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS, NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
INFORMATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO THEIR RESPECTIVE DATES.
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements based on our
current expectations, assumptions, estimates and projections about our company
and our industry. When used in this prospectus, the words "believes,"
"anticipates," "intends," "expects" and similar expressions are intended to
identify such forward-looking statements. These forward-looking statements
involve risks and uncertainties, certain of which are beyond our control, that
could cause actual results to differ materially from those expressed or implied
in such statements as a result of those factors more fully described in the
"Risk Factors" section and elsewhere in this prospectus.
We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise. In light of these risks and uncertainties, the
forward-looking events and circumstances discussed in this prospectus might not
transpire.
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AVAILABLE INFORMATION
We file annual, quarterly and special reports, as well as registration
and proxy statements and other information, with the Securities and Exchange
Commission. The documents filed by us with the SEC can be inspected and copied
at the public reference facilities maintained by the SEC at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Regional Offices of the SEC
located at 7 World Trade Center, Room 1300, 13th Floor, New York, NY 10048, and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, IL 60661-2511.
You may obtain information on the operation of the public reference facilities
maintained by the SEC by calling the SEC at 1-800-SEC-0030. Copies of such
material can also be obtained by mail from the Public Reference Section of the
SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
Such reports and other information are also available at a website
maintained by the SEC that contains reports, proxy and information statements
and other information that registrants file electronically with the SEC. The
address of this web site is: http://www.sec.gov. In addition, such material may
be inspected and copied at the offices of the National Association of Securities
Dealers, Inc., 1935 K Street, N.W., Washington, D.C. 20006. Our common stock is
quoted on The Nasdaq National Market under the symbol "RETK."
We have filed with the SEC a Registration Statement on Form S-3, or the
Registration Statement, under the Securities Act with respect to the securities
offered hereby. This prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which have been omitted in
accordance with the rules and regulations of the SEC. For further information
regarding our company and our common stock, please refer to the Registration
Statement.
INFORMATION INCORPORATED BY REFERENCE
The Securities and Exchange Commission allows us to "incorporate by
reference" the information we file with the SEC, which means that we can
disclose certain information to you by referring you to documents we have filed
with the SEC. We incorporate by reference the documents listed below, and any
additional documents filed by us with the SEC under Section 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, as amended, prior to the
termination of this offering. The information we incorporate by reference is
part of this prospectus, and any later information that we file with the SEC
will automatically update and supersede this information.
The following documents have been filed with the SEC and are
incorporated herein by reference:
1. Our Annual Report on Form 10-K for the fiscal year ended December
31, 1999;
2. Our Quarterly Reports on Form 10-Q for the three-month periods
ended March 31, 2000, June 30, 2000 and September 30, 2000;
3. Our Current Report on Form 8-K filed on May 25, 2000 as amended by
Form 8-K/A filed July 25, 2000; and
4. The description of our common stock contained in our registration
statement on Form 8A, filed with the SEC on November 15, 2000,
under Section 12(g) of the Securities Exchange Act, including any
amendment or report filed for the purpose of updating that
description.
We will furnish without charge to each person, including any beneficial
owner, to whom this prospectus is delivered, on the written or oral request of
such person, a copy of any or all of the
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documents incorporated by reference, other than exhibits to such documents
(unless such exhibits are specifically incorporated by reference herein).
Requests should be directed to Retek Inc., 801 Nicollet Mall, 11th Floor,
Minneapolis, MN 55402, Attention: Todd Hollands (telephone: (612) 630-5908).
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RISK FACTORS
You should carefully consider the risks described below before making
any investment decision. The risks and uncertainties described below are not the
only ones facing our company. Additional risks and uncertainties may impair our
business operations. If any of the following risks actually occur, our business,
financial condition and results of operations would likely suffer. In such case,
the trading price of our common stock could decline, and you might lose all or
part of your investment.
While management is optimistic about our long-term prospects, the
following factors, among others, could materially harm our business, operating
results and financial condition and should be considered when evaluating us.
IF WE DO NOT RESPOND ADEQUATELY TO OUR INDUSTRY'S RAPID PACE OF CHANGE, SALES OF
OUR PRODUCTS MAY DECLINE.
If we are unable to develop new software solutions or enhancements to
our existing products on a timely and cost-effective basis, or if new products
or enhancements do not achieve market acceptance, our sales may decline. The
life cycles of our products are difficult to predict because the
business-to-business electronic commerce market for our products is new and
emerging and is characterized by rapid technological change and changing
customer needs. The introduction of products employing new technologies could
render our existing products or services obsolete and unmarketable.
In developing new products and services, we may:
- fail to respond to technological changes in a timely or
cost-effective manner;
- encounter products, capabilities or technologies developed by
others that render our products and services obsolete or
noncompetitive or that shorten the life cycles of our existing
products and services;
- experience difficulties that could delay or prevent the successful
development, introduction and marketing of these new products and
services; or
- fail to achieve market acceptance of our products and services.
FLUCTUATIONS IN OUR QUARTERLY OPERATING RESULTS COULD CAUSE OUR STOCK PRICE TO
DECLINE.
Our quarterly operating results have fluctuated in the past and are
expected to continue to fluctuate in the future. If our quarterly operating
results fail to meet analysts' expectations, the trading price of our common
stock could decline. In addition, significant fluctuations in our quarterly
operating results may harm our business operations by making it difficult to
implement our budget and business plan. Factors, many of which are outside of
our control, which could cause our operating results to fluctuate include:
- the size and timing of customer orders, which can be affected by
customer budgeting and purchasing cycles;
- the demand for and market acceptance of our software solutions;
- competitors' announcements or introductions of new software
solutions, services or technological innovations;
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- our ability to develop, introduce and market new products on a
timely basis;
- customer deferral of material orders in anticipation of new
releases or new product introductions;
- our success in expanding our sales and marketing programs;
- technological changes or problems in computer systems; and
- general economic conditions which may affect our customers'
capital investment levels.
In addition, we have incurred, and will continue to incur, compensation
expense in connection with our grant of options under our 1999 Equity Incentive
Plan and our 1999 Directors Stock Option Plan. This expense will be amortized
over the vesting period of these granted options, which is generally four years,
resulting in lower quarterly income.
Our quarterly expense levels are relatively fixed and are based, in
part, on expectations as to future revenue. As a result, if revenue levels fall
below our expectations, net income will decrease because only a small portion of
our expenses vary with our revenue.
AS WE CONTINUE TO ENTER INTO OUR NEW TYPE OF LICENSE AGREEMENT, WE WILL
RECOGNIZE REVENUES OVER A PERIOD OF TIME AND WILL HAVE SIGNIFICANTLY LESS
REVENUE FOR SEVERAL QUARTERS.
Through the third quarter of 1999, we generally licensed our products
to customers on a perpetual basis, and recognized revenue upon delivery of the
products. In the fourth quarter of 1999, we entered into software licensing
agreements with revised terms for the majority of new sales of software
products. Under the revised agreements, we provide technical advisory services
after the delivery of our product to help customers exploit the full value and
functionality of our products. Revenue from the sale of software licenses and
technical advisory services under these agreements is recognized as the services
are performed over the contract period, which is generally 12 to 24 months, as
determined by our customers' objectives. As we continue to recognize license and
service revenues over a period of time, rather than upon the delivery of our
products, we will recognize significantly less revenue, have lower associated
margins for several quarters, as compared to previous quarters, have higher
operating expenses as a percentage of total revenues and will incur operating
losses for several quarters.
OUR RETAIL.COM NETWORK WAS RECENTLY INTRODUCED AND IS STILL AT AN EARLY STAGE OF
DEVELOPMENT.
We began operation of the retail.com network on September 26, 1999. We
incurred, and will continue to incur, significant infrastructure costs in
establishing this network. We will continue to invest in new products and
services to be offered over the retail.com network in the foreseeable future.
Broad and timely acceptance of the retail.com network is subject to a number of
significant risks. These risks include:
- our need to provide value-enhancing software solutions and
services on the retail.com network to achieve widespread
commercial acceptance of this network;
- whether our network will be able to support large numbers of
retailers and the members of their supply chains; and
- our need to significantly expand internal resources and incur
associated expenses to support planned growth of the retail.com
network.
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We have established a subscription pricing model for the software
solutions provided on our retail.com network, whereby members pay an annual fee
based on the number of the member's employees who will have access to the
network. As additional services are added to the retail.com network, we will
need to establish pricing models for these new services. If the pricing models
for the retail.com network fail to be competitive and profitable or if they are
not acceptable to customers, our network will not be commercially successful,
which could harm our revenue and business.
WE EXPECT TO SIGNIFICANTLY INCREASE OUR OPERATING EXPENSES, WHICH WILL IMPACT
OUR ABILITY TO BE PROFITABLE.
We intend to significantly increase operating expenses as we:
- increase research and development activities;
- increase services activities;
- develop and build the retail.com network;
- expand our distribution channels;
- increase sales and marketing activities, including expanding our
direct sales force;
- build our internal information technology system; and
- operate as an independent public company.
We will incur expenses before we generate any revenue from this
increase in spending. If we do not significantly increase revenue from these
efforts, our business and operating results could be seriously harmed.
COMPETITIVE PRESSURES COULD REDUCE OUR MARKET SHARE OR REQUIRE US TO REDUCE OUR
PRICES, WHICH WOULD REDUCE OUR REVENUE AND/OR OPERATING MARGINS.
The market for our software solutions is highly competitive and subject
to rapidly changing technology. Competition could seriously impede our ability
to sell additional products and services on terms favorable us. Competitive
pressures could reduce our market share or require us to reduce prices, which
would reduce our revenues and/or operating margins. Many of our competitors have
substantially greater financial, marketing or other resources, and greater name
recognition than us. In addition, these companies may adopt aggressive pricing
policies that could compel us to reduce the prices of our products and services
in response. Our competitors may also be able to respond more quickly than we
can to new or emerging technologies and changes in customer requirements. Our
current and potential competitors may:
- develop and market new technologies that render our existing or
future products obsolete, unmarketable or less competitive;
- make strategic acquisitions or establish cooperative relationships
among themselves or with other solution providers, which would
increase the ability of their products to address the needs of our
customers; and
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- establish or strengthen cooperative relationships with our current
or future strategic partners, which would limit our ability to
sell products through these channels.
As a result, we may not be able to maintain a competitive position
against current or future competitors.
IF WE LOSE KEY PERSONNEL OR ARE UNABLE TO ATTRACT AND RETAIN ADDITIONAL
PERSONNEL, OUR ABILITY TO GROW OUR BUSINESS COULD BE HARMED.
We believe that our future success will depend upon our ability to
attract and retain highly skilled personnel, including John Buchanan, our
chairman and chief executive officer; Gordon Masson, our president; John L.
Goedert, our chief operating officer; Gregory A. Effertz, our vice president,
finance and administration and chief financial officer and Jeremy Thomas, our
chief technology officer. We currently do not have any key-man life insurance
relating to key personnel, who are employees at-will and are not subject to
employment contracts except for Jeremy Thomas who has an employment contract
that expires in October 2001. The loss of the services of any one or more of
these key persons could harm our ability to grow our business.
We also must attract, integrate and retain skilled sales, research and
development, marketing and management personnel. Competition for these types of
employees is intense, particularly in our industry. Failure to hire and retain
qualified personnel would harm our ability to grow the business.
IF WE FAIL TO ESTABLISH, MAINTAIN AND EXPAND OUR RELATIONSHIPS WITH THIRD
PARTIES WHO IMPLEMENT OUR PRODUCTS, OUR ABILITY TO MEET OUR CUSTOMERS' NEEDS
COULD BE HARMED.
We rely, and expect to continue to rely, on a number of third parties
to implement our software solutions at customer sites. If we are unable to
establish and maintain effective, long-term relationships with these
implementation providers, or if these providers do not meet the needs or
expectations of our customers, our revenue will be reduced and our customer
relationships will be harmed. Our current implementation partners are not
contractually required to continue to help implement our software solutions. If
the number of product implementations continues to increase, we will need to
develop new relationships with additional third-party implementation providers
to provide these services.
We may be unable to establish or maintain relationships with third
parties having sufficient qualified personnel resources to provide the necessary
implementation services to support our needs. If third-party services are
unavailable, we will be required to provide these services internally, which
would significantly limit our ability to meet customers' implementation needs
and would increase our operating expenses and could reduce gross margins. A
number of our competitors, including SAP, have significantly more established
relationships with these third parties and, as a result, these third parties
maybe more likely to recommend competitors' products and services rather than
our own. In addition, we cannot control the level and quality of service
provided by our current and future implementation partners.
IF WE FAIL TO OBTAIN ACCESS TO THE INTELLECTUAL PROPERTY OF THIRD PARTIES, OUR
BUSINESS AND OPERATING RESULTS COULD BE HARMED.
We must now, and may in the future have to, license or otherwise obtain
access to the intellectual property of third parties, including HNC Software,
Lucent, MicroStrategy and Oracle. Our business would be seriously harmed if the
providers from whom we license such software cease to deliver and support
reliable products or enhance their current products. In addition, the
third-party software may not continue to be available to us on commercially
reasonable terms or prices or at all. Our inability to
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maintain or obtain this software could result in shipment delays or reduced
sales of our products. Furthermore, we might be forced to limit the features
available in our current or future product offerings. Either alternative could
seriously harm business and operating results.
IF OUR INTELLECTUAL PROPERTY IS NOT ADEQUATELY PROTECTED, OUR COMPETITORS MAY
GAIN ACCESS TO OUR TECHNOLOGY AND WE MAY LOSE CUSTOMERS.
We depend on our ability to develop and maintain the proprietary
aspects of our technology. To protect proprietary technology, we rely primarily
on a combination of contractual provisions, confidentiality procedures, trade
secrets, and copyright and trademark laws.
We seek to protect our software, documentation and other written
materials under trade secret and copyright laws, which afford only limited
protection. In addition, we cannot assure investors that any of our proprietary
rights with respect to the retail.com network will be viable or of value in the
future because the validity, enforceability and type of protection of
proprietary rights in Internet-related industries are uncertain and still
evolving.
Despite our efforts to protect our proprietary rights, unauthorized
parties may attempt to copy aspects of our products or obtain and use
information that we regard as proprietary. Policing unauthorized use of our
products is difficult and expensive, and while we are unable to determine the
extent to which piracy of its software products exists, software piracy may be a
problem. In addition, the laws of some foreign countries do not protect our
proprietary rights to the same extent as do the laws of the United States. We
intend to vigorously protect intellectual property rights through litigation and
other means. However, such litigation can be costly to prosecute and we cannot
be certain that we will be able to enforce our rights or prevent other parties
from developing similar technology, duplicating our products or designing around
our intellectual property.
IF, IN THE FUTURE, THIRD PARTIES CLAIM THAT OUR PRODUCTS INFRINGE ON THEIR
INTELLECTUAL PROPERTY, WE MAY INCUR SIGNIFICANT COSTS.
There has been a substantial amount of litigation in the software
industry and the Internet industry regarding intellectual property rights. It is
possible that in the future third parties may claim that our current or
potential future products infringe their intellectual property. We expect that
software product developers and providers of electronic commerce solutions will
increasingly be subject to infringement claims as the number of products and
competitors in our industry segment grow and the functionality of products in
different industry segments overlap. Any claims, with or without merit, could be
time-consuming, result in costly litigation, cause product shipment delays or
require us to enter into royalty or licensing agreements. Royalty or licensing
agreements, if required, may not be available on terms acceptable to us or at
all, which could seriously harm our business.
OUR BUSINESS IS SUBJECT TO ECONOMIC, POLITICAL AND OTHER RISKS ASSOCIATED WITH
INTERNATIONAL SALES.
Since we sell products worldwide, our business is subject to risks
associated with doing business internationally. To the extent that our sales are
denominated in foreign currencies, the revenue we receive could be subject to
fluctuations in currency exchange rates. If the effective price of the products
we sell to our customers were to increase due to fluctuations in foreign
currency exchange rates, demand for our technology could fall, which would, in
turn, reduce our revenue. We have not historically attempted to mitigate the
effect that currency fluctuations may have on our revenue through use of hedging
instruments, and we do not currently intend to do so in the future.
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We anticipate that revenue from international operations will continue
to represent a substantial portion of our total revenue. Accordingly, our future
results could be harmed by a variety of factors, including:
- changes in foreign currency exchange rates;
- greater risk of uncollectable accounts;
- changes in a specific country's or region's political or economic
conditions, particularly in emerging markets;
- trade protection measures and import or export licensing
requirements;
- potentially negative consequences from changes in tax laws;
- difficulty in staffing and managing widespread operations;
- international variations in technology standards;
- differing levels of protection of intellectual property; and
- unexpected changes in regulatory requirements.
IF THE INTERNET FAILS TO BE ACCEPTED AS A VIABLE LONG-TERM COMMUNICATIONS
PROTOCOL, OUR BUSINESS AND OPERATING RESULTS WILL BE SERIOUSLY HARMED.
As our software solutions are Internet-based, we depend on the
acceptance of the Internet as a communications protocol. However, this
acceptance may not continue. Rapid growth of the Internet is a recent
phenomenon. The Internet may not be accepted as a viable long-term
communications protocol for businesses for a number of reasons. These reasons
include:
- potentially inadequate development of the necessary communications
and computer network technology, particularly if rapid growth of
the Internet continues;
- delayed development of enabling technologies and performance
improvements;
- increased security risks in transmitting and storing confidential
information over public networks; and
- potentially increased governmental regulation.
ERRORS AND DEFECTS IN OUR PRODUCTS COULD RESULT IN SIGNIFICANT COSTS TO US AND
COULD IMPAIR OUT ABILITY TO SELL OUR PRODUCTS.
Our products are complex and, accordingly, may contain undetected
errors or failures when we first introduce them or as we release new versions.
This may result in loss of, or delay in, market acceptance of our products and
could cause us to incur significant costs to correct errors or failures or to
pay damages suffered by customers as a result of such errors or failures. In the
past, we have discovered software errors in new releases and new products after
their introduction. We have incurred costs during the period required to correct
these errors, although to date such costs, including costs incurred on specific
contracts, have not been material. We may in the future discover errors in new
releases or new products after the commencement of commercial shipments.
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WE ARE SUBJECT TO CONTRACTUAL LIMITATIONS THAT COULD LIMIT THE CONDUCT OF OUR
BUSINESS AND OUR ABILITY TO PURSUE OUR BUSINESS OBJECTIVES.
Our ability to enter into any acquisition of a business or assets or
any merger, reorganization or other business combination transaction may be
limited until September 29, 2002, and possibly longer, pursuant to the terms of
a separation agreement between HNC Software, Inc. and us. In addition, our
ability to issue common stock in connection with acquisitions, offerings or
otherwise will be limited until September 29, 2002, and possibly longer.
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RETEK INC.
Unless otherwise stated, the terms "Retek", "we" or "us" used in this
prospectus refer to Retek Inc. and its consolidated subsidiaries.
We develop application software that provides a complete information
infrastructure solution to the global retail industry. Our software solutions
enable retailers to use the Internet to communicate and collaborate efficiently
with suppliers, distributors, wholesalers, logistics providers, brokers,
transportation companies, consolidators, and manufacturers that make up the
global retail supply chain.
We enhance the ability of retailers to interact with their trading
partners and their customers by providing supply chain and customer relationship
management solutions. We provide collaborative marketplace solutions through our
own hosted offering, retail.com, and similar packaged offerings which run on our
customers' hardware.
We market our software solutions through our direct and indirect sales
channels primarily to retailers who sell to their customers through traditional
retail stores, catalogs, and/or Internet-based storefronts. To date, we have
licensed our solutions across a variety of retail industry sectors to over 150
retailers.
We were originally incorporated in Ohio in 1985 as Practical Control
Solutions, Inc., which was renamed Retek Logistics, Inc. in April 1999. In
September 1999, Retek Logistics, Inc. was reincorporated as a Delaware
corporation and renamed Retek Inc. On November 23, 1999, we completed our
initial public offering. Prior to the completion of our initial public offering,
we were a wholly-owned subsidiary of HNC Software, Inc. ("HNC"), a
business-to-business software company that develops and markets predictive
software solutions. On October 2, 2000, HNC announced that it had completed the
separation of Retek from HNC effective September 29, 2000 through the
distribution pro rata to HNC's stockholders, as a dividend, of all of the shares
of Retek common stock owned by HNC.
Our principal executive offices are located at 801 Nicollet Mall, 11th
Floor, Minneapolis, Minnesota 55402 and our telephone number is (612) 630-5700.
Our common stock is listed on the Nasdaq National Market under the symbol
"RETK." Our web site is http://www.retek.com. The information on our web site is
not part of this prospectus.
"Retek" is a trademark of Retek and "retail.com" is a service mark of
Retek. All other trademarks or service marks appearing in this prospectus are
trademarks or service marks of the respective companies that use them.
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SELLING STOCKHOLDERS
The following table sets forth certain information regarding the
beneficial ownership of our common stock as of November 15, 2000, as reported to
us by each applicable selling stockholder, the number of shares being offered by
each of the selling stockholders and the number and percentage of currently
outstanding shares to be owned by each of the selling stockholders following
this offering, assuming that all shares offered hereby are sold.
<TABLE>
<CAPTION>
SHARES OF COMMON SHARES OF COMMON SHARES OF COMMON STOCK
STOCK BENEFICIALLY OWNED STOCK OFFERED FOR BENEFICIALLY OWNED
NAME OF BENEFICIAL PRIOR TO OFFERING STOCKHOLDER'S ACCOUNT AFTER THE OFFERING
---------------------------- ----------------------- --------------------------
OWNER NUMBER PERCENTAGE(1) NUMBER NUMBER PERCENTAGE(1)
-------------------------- -------- -------------- --------------------- -------- -------------
<S> <C> <C> <C> <C> <C>
International Business 300,000 * 300,000 0 *
Machines Corporation
Kipling Investments
Labuan Limited 389,057 * 389,057 0 *
------- ------- ------- -------- --------
TOTALS 689,057 1.4% 689,057 0 *
======= ======= ======= ======== ========
--------------------
</TABLE>
* Less than 1%
(1) Based on 48,029,147 shares outstanding on November 15, 2000.
On February 24, 2000, we entered into an alliance with International
Business Machines Corporation pursuant to which we appointed IBM a strategic
provider of hardware, middleware, services and financing for Retek solutions in
the food and drug segment of the retail market. On September 5, 2000 we issued
300,000 shares of our common stock to IBM in connection with the expansion of
our strategic alliance to include the joint marketing, selling and servicing of
a retail e-business solution consisting of Retek applications and IBM software
and hardware technologies.
On May 10, 2000, we issued 389,057 shares of our common stock to
Kipling Investments Labuan Limited in connection with our acquisition of
HighTouch Technologies, Inc., a software company.
Other than as set forth above, none of the selling stockholders listed
above has had any material relationship with us within the past three years.
USE OF PROCEEDS
We will not receive any of the net proceeds from this offering. All of
the proceeds from this offering will be received by the selling stockholders.
PLAN OF DISTRIBUTION
The shares of common stock offered hereby by the selling stockholders
may be sold from time to time to purchasers directly by any of the selling
stockholders in one or more transactions at a fixed price, which may be changed,
or at varying prices determined at the time of sale or at negotiated prices.
Such prices will be determined by the holders of such securities or by agreement
between such holders and underwriters or dealers who may receive fees or
commissions in connection therewith.
Any of the selling stockholders may from time to time offer shares of
common stock beneficially owned by them through underwriters, dealers or agents,
who may receive compensation in the form of underwriting discounts, commissions
or concessions from the selling stockholders and the purchasers of
12
<PAGE> 15
the shares for whom they may act as agent. Each selling stockholder will be
responsible for payment of commissions, concessions and discounts of
underwriters, dealers or agents. The aggregate proceeds to the selling
stockholders from the sale of the shares of common stock offered by them hereby
will be the purchase price of such shares less discounts and commissions, if
any. Each of the selling stockholders reserves the right to accept and, together
with their agents from time to time to reject, in whole or in part, any proposed
purchase of shares to be made directly or through agents. We will not receive
any of the proceeds from this offering. Alternatively, the selling stockholders
may sell all or a portion of the shares of common stock beneficially owned by
them and offered hereby from time to time on any exchange on which the
securities are listed on terms to be determined at the times of such sales. The
selling stockholders may also make private sales directly or through a broker or
brokers. Transactions through broker-dealers may include block trades in which
brokers or dealers will attempt to sell the shares of common stock as agent but
may position and resell the block as principal to facilitate the transaction, or
one or more underwritten offerings on a firm commitment or best efforts basis.
From time to time, the selling stockholders may transfer, pledge,
donate or assign shares of common stock to lenders or others and each of such
persons and their transferees and successors in interest will be deemed to be a
"selling stockholder" for purposes of this prospectus. The number of shares
beneficially owned by a selling stockholder who transfers, pledges, donates or
assigns shares of common stock will decrease as and when they take such actions.
The plan of distribution for shares sold hereunder will otherwise remain
unchanged, except that the transferees, pledgees, donees or other successors
will be selling stockholders hereunder.
A selling stockholder may enter into hedging transactions with
broker-dealers, and the broker-dealers may engage in short sales of the shares
of common stock in the course of hedging the positions they assume with such
selling stockholder, including, without limitation, in connection with
distribution of the shares of common stock by such broker-dealers. In addition,
the selling stockholders may, from time to time, sell short the shares of common
stock, and in such instances, this prospectus may be delivered in connection
with such short sales and the shares offered hereby may be used to cover such
short sales. The selling stockholders may also enter into option or other
transactions with broker-dealers that involve the delivery of the shares of
common stock to the broker-dealers, who may then resell or otherwise transfer
such shares. The selling stockholders may also loan or pledge the shares to a
broker-dealer and the broker-dealer may sell the shares as loaned or upon a
default may sell or otherwise transfer the pledged shares.
The selling stockholders and any underwriters, dealers or agents that
participate in the distribution of the shares of common stock offered hereby may
be deemed to be underwriters within the meaning of the Securities Act of 1933,
as amended, and any discounts, commissions or concessions received by them and
any provided pursuant to the sale of shares by them might be deemed to be
underwriting discounts and commissions under the Securities Act.
In addition, any securities covered by this prospectus which qualify
for sale pursuant to Rule 144 or Rule 145 of the Securities Act may be sold
under Rule 144 or Rule 145 rather than pursuant to this prospectus. There is no
assurance that any selling stockholder will sell any or all of the shares of
common stock described herein, and any selling stockholder may transfer, devise
or gift such securities by other means not described herein.
To the extent required, the specific shares of common stock to be sold,
the names of the selling stockholders, the respective purchase prices and public
offering prices, the names of any agent, dealer or underwriter, and any
applicable commissions or discounts with respect to a particular offer will be
set forth in an accompanying prospectus supplement or, if appropriate, a
post-effective amendment to the registration statement of which this prospectus
is a part.
13
<PAGE> 16
We entered into a registration rights agreement with International
Business Machines Corporation pursuant to which we are registering under
applicable federal and state securities laws for this offering 300,000 shares of
our common stock issued to IBM in connection with a private placement of our
shares. The registration rights agreement provides for cross-indemnification of
IBM and Retek and their respective directors, officers and controlling persons
against certain liabilities in connection with the offer and sale of the shares
of our common stock, including liabilities under the Securities Act, and
requires the parties to contribute to payments the parties may be required to
make in respect thereof.
We will pay substantially all of the expenses incurred by the selling
stockholders and us in connection with the offering and sale of the shares of
common stock under this prospectus, excluding any underwriting discounts or
commissions. See "Selling Stockholders."
LEGAL MATTERS
The validity of the shares of common stock offered by this prospectus
will be passed upon for us by Shearman & Sterling, San Francisco, California.
EXPERTS
The financial statements and financial statement schedule of Retek Inc.
and the audited financial statements of Retek Logistics, Inc. incorporated by
reference in this Prospectus by reference to the Annual Report on Form 10-K of
Retek Inc. for the year ended December 31, 1999 and the audited historical
financial statements of HighTouch Technologies, Inc. incorporated by reference
in this Prospectus by reference to Retek Inc.'s Form 8-K/A (amendment of Form
8-K dated May 10, 2000) have been so incorporated in reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
14
<PAGE> 17
689,057 SHARES
[RETEK LOGO]
COMMON STOCK
------------------------
PROSPECTUS
------------------------
December 1, 2000
<PAGE> 18
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, other than
commissions and discounts of underwriters, dealers or agents and the fees and
expenses of counsel to the selling stockholders, payable by Retek in connection
with the sale and distribution of the common stock being registered. All amounts
are estimates, except the Securities and Exchange Commission Registration Fee:
<TABLE>
<CAPTION>
ITEM AMOUNT
---- -----------
<S> <C>
Securities and Exchange Commission Registration Fee........................................... $ 3,916.54
Accounting Fees and Expenses.................................................................. 15,000.00
Legal Fees and Expenses....................................................................... 17,000.00
Printing and Engraving Expenses............................................................... 5,000.00
Miscellaneous................................................................................. 5,000.00
----------
Total..................................................................................... $45,916.54
==========
</TABLE>
Retek will pay substantially all of the costs and expenses related to
the sale and distribution of the common stock being registered.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law (the "DGCL")
empowers a Delaware corporation to indemnify any persons who are, or are
threatened to be made, parties to any threatened, pending or completed legal
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of such corporation), by
reason of the fact that such person is or was an officer or director of such
corporation or is or was serving at the request of such corporation as a
director, officer, employer or agent of another corporation or enterprise. The
indemnity may include expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding, provided that such officer or
director acted in good faith and in a manner he or she reasonably believed to be
in, or not opposed to, the best interests of the corporation, and, in the case
of criminal proceedings, had no reasonable cause to believe his or her conduct
was illegal. A Delaware corporation may indemnify officers and directors against
expenses (including attorneys' fees) in connection with the defense or
settlement of an action by or in the right of the corporation under the same
conditions, except that no indemnification is permitted without judicial
approval if the officer or director is adjudged to be liable to the corporation.
Where an officer or director is successful on the merits or otherwise in the
defense of any action referred to above, the corporation must indemnify him or
her against expenses which such officer or director actually and reasonably
incurred. The Amended and Restated Certificate of Incorporation of the
Registrant provides for indemnification of the officers and directors of the
Registrant to the full extent permitted by applicable law.
In accordance with Delaware law, the Amended and Restated Certificate
of Incorporation of the Registrant contains a provision limiting the personal
liability of directors of the Registrant for violations of their fiduciary duty.
This provision eliminates each director's liability to the Registrant or its
stockholders for monetary damages except (i) for any breach of the director's
duty of loyalty to the Registrant or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the DGCL, providing for liability
of
II-1
<PAGE> 19
directors for unlawful payment of dividends or unlawful stock purchases or
redemptions or (iv) for any transaction from which a director derived an
improper personal benefit. The effect of this provision is to eliminate the
personal liability of directors for monetary damages for actions involving a
breach of their fiduciary duty of care, including any such actions involving
gross negligence.
We entered into a registration rights agreement with International
Business Machines Corporation pursuant to which we are registering under
applicable federal and state securities laws for this offering 300,000 shares of
our common stock issued to IBM in connection with a private placement of our
shares. The registration rights agreement provides for cross-indemnification of
IBM and Retek and their respective directors, officers and controlling persons
against certain liabilities in connection with the offer and sale of the shares
of our common stock, including liabilities under the Securities Act, and
requires the parties to contribute to payments the parties may be required to
make in respect thereof.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<S> <C>
2.1(1) Agreement and Plan of Merger and Reorganization between Retek Logistics, Inc. and Registrant.
2.2(2) Separation Agreement.
2.3(2) Technology License Agreement.
2.4(2) Tax Sharing Agreement.
2.5(2) Services Agreement.
2.6(2) Corporate Rights Agreement.
2.7(2) Stock Contribution Agreement.
4.1(1) Specimen Common Stock Certificate.
5.1 Opinion of Shearman & Sterling.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of PricewaterhouseCoopers LLP.
23.3 Consent of PricewaterhouseCoopers LLP.
23.4 Consent of Shearman & Sterling (included in Exhibit 5.1).
24.1 Power of Attorney (included on signature page).
</TABLE>
------------------
(1) Incorporated by reference from the Exhibits to the Registrant's
Registration Statement on Form S-1 (Registration No. 333-86841).
(2) Incorporated by reference from the Exhibits to the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1999.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
II-2
<PAGE> 20
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in the
effective registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement; provided,
however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3 and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the SEC by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the Registration Statement.
(2) That for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
II-3
<PAGE> 21
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
the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Minneapolis, State of Minnesota, on December 4, 2000.
RETEK, INC.
By: /s/ JOHN BUCHANAN
--------------------------------------
Name: John Buchanan
Title: Chairman, Chief Executive
Officer and Director
POWER OF ATTORNEY
Each person whose individual signature appears below hereby authorizes
and appoints John Buchanan and Gregory A. Effertz, and each of them, with full
power of substitution and resubstitution and full power to act without the
other, as his true and lawful attorney-in-fact and agent to act in his name,
place and stead and to execute in the name and on behalf of each person,
individually and in each capacity stated below, and to file any and all
amendments to this registration statement, including any and all post-effective
amendments and amendments thereto, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and
thing, ratifying and confirming all that said attorneys-in-fact and agents or
any of them or their or his substitute or substitutes may lawfully do or cause
to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated below on December 4, 2000
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ JOHN BUCHANAN Chairman, Chief Executive Officer
------------------------------------------- and Director (Principal Executive Officer)
John Buchanan
/s/ GREGORY A. EFFERTZ Vice President, Finance and Administration,
------------------------------------------- Chief Financial Officer, Treasurer and
Gregory A. Effertz Secretary (Principal Financial and Accounting
Officer)
/s/ N. ROSS BUCKENHAM Director
-------------------------------------------
N. Ross Buckenham
/s/ WARD CAREY Director
-------------------------------------------
Ward Carey
/s/ ALEX WAY HART Director
-------------------------------------------
Alex Way Hart
</TABLE>
II-4
<PAGE> 22
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ GLEN A. TERBEEK Director
-------------------------------------------
Glen A. Terbeek
/s/ STEPHEN E. WATSON Director
-------------------------------------------
Stephen E. Watson
</TABLE>
II-5
