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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 13D
(Rule 13d-101)
Information to be included in statements filed pursuant to Rule 13d-1(a)
under the Securities Exchange Act of 1934
SAGA SYSTEMS, INC.
(Name of Issuer)
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COMMON STOCK
$0.01 PAR VALUE
(Title of Class of Securities)
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834025108
(CUSIP Number)
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Dr. Erwin Koenigs
Software AG
Uhlandstrasse 12, D-64297
Darmstadt, Germany
Tel No.: +496151921100
with copies to:
Peter R. Douglas, Esq.
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
Tel No.: 212-450-4000
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
November 1, 2000
(Date of Event which Requires Filing of this Statement)
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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 statement because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box [ ]
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<PAGE>
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CUSIP No. # 834025108 13D Page 2 of 10 Pages
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Software AG
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
Not Applicable
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Federal Republic of Germany
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7 SOLE VOTING POWER
2,202,600
NUMBER OF SHARES ----------------------------------------
BENEFICIALLY OWNED BY EACH 8 SHARED VOTING POWER
REPORTING PERSON WITH
13,046,599
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9 SOLE DISPOSITIVE POWER
2,202,600
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10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
15,249,199
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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)
48.5% (assuming exercise of all options)
44.9% (assuming exercise of no options)
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14 TYPE OF REPORTING PERSON
CO
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<PAGE>
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CUSIP No. # 834025108 13D Page 3 of 10 Pages
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Software AG Acquisition Corporation
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
Not Applicable
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
NUMBER OF SHARES 0
BENEFICIALLY OWNED BY EACH ----------------------------------------
REPORTING PERSON WITH 8 SHARED VOTING POWER
15,249,199
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9 SOLE DISPOSITIVE POWER
0
----------------------------------------
10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
15,249,199
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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)
48.5% (assuming exercise of all options)
44.9% (assuming exercise of no options)
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14 TYPE OF REPORTING PERSON
CO
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<PAGE>
Item 1. Security and Issuer.
The class of equity securities to which this statement relates is the
Common Stock, par value $0.01 per share (the "Common Stock"), of Saga Systems,
Inc., a Delaware corporation (the "Company"). The principal executive offices
of the Company are located at 11190 Sunrise Valley Drive, Reston, Virginia
20191.
Item 2. Identity and Background.
The names of the persons filing this statement are (i) Software AG, a
stock corporation (Aktiengesellschaft) organized under the laws of Federal
Republic of Germany ("Software AG") and (ii) Software AG Acquisition
Corporation, a Delaware corporation and a wholly owned subsidiary of Software
AG ("SAC"). Software AG and SAC are referred to collectively as the "Reporting
Persons".
The address of the principal business and the principal office of Software
AG is Software AG, Uhlandstrasse 12, D-64297, Darmstadt, Germany. The name,
business address, present principal occupation or employment and the name,
principal business and address of any corporation or other organization in
which such employment is conducted, and citizenship of each director and
executive officer of Software AG is set forth on Schedule A, attached hereto
and incorporated herein by reference. Software AG, is a provider of system
software and a major global player offering technology for data management and
electronic business.
The address of the principal business and the principal office of SAC is
c/o Software AG, Uhlandstrasse 12, D-64297, Darmstadt, Germany. The name,
business address, present principal occupation or employment and the name,
principal business and address of any corporation or other organization in
which such employment is conducted, and citizenship of each director and
executive officer of SAC is set forth on Schedule B, attached hereto and
incorporated herein by reference. SAC has not engaged in any business other
than those incident to formation, and the execution and delivery of Merger
Agreement and the Stockholder Agreement.
Neither of the Reporting Persons nor, to the best of their knowledge, any
of the persons listed on Schedule A or Schedule B attached hereto, has, during
the last five years, been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or has been a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction and as a result
of such proceeding was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws.
Item 3. Source and Amount of Funds or Other Consideration.
Reporting Persons acquired beneficial ownership of shares of Common Stock
through execution of the Stockholder Agreement referred to below. SAC also
acquired beneficial ownership of the shares of Common Stock through execution
of the Merger Agreement referred to below. None of the Reporting Persons has
expended any funds in connection with the execution of the Stockholder
Agreement or the Merger Agreement (together the "Agreements"). Software AG
owned 2,202,600 shares of Common Stock immediately prior to the execution of
the Agreements, which shares were acquired prior to the time the Common Stock
was registered under Section 12 of the Securities Exchange Act of 1934, as
amended ("Exchange Act"). Software AG filed a statement on Schedule 13G on
February 12, 1998 as required by Rule 13d-1(d) of the Exchange Act with respect
to such Common Stock. This statement on Schedule 13D reports the acquisition of
additional shares pursuant to the execution of the Agreements.
Page 4 of 10
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Item 4. Purpose of Transaction.
On November 1, 2000, the Company entered into an Agreement and Plan of
Merger (the "Merger Agreement") with Software AG and SAC, a wholly owned
subsidiary of Software AG. Pursuant to the terms of the Merger Agreement, SAC
will be merged with and into the Company (the "Merger") with the Company
surviving the Merger such that immediately following the Merger, the Company
will be a wholly owned subsidiary of Software AG. Each outstanding share of
Common Stock of the Company will be converted, at the effective time of the
Merger, into the right to receive $11.50 in cash, without interest. Please see
the Merger Agreement attached hereto as Exhibit 1 for a full description of the
merger consideration. In the Merger Agreement, Software AG has agreed to vote
all of its Common Stock beneficially owned by it in favor of adoption of the
Merger Agreement at the company stockholder meeting. The Merger Agreement
provides that the current directors of SAC will be directors of the Company
following the Merger. The consummation of the Merger is subject to customary
conditions, including the adoption and approval of the Merger and the Merger
Agreement by the stockholders of the Company in accordance with the provisions
of applicable law.
Simultaneously with the execution of the Merger Agreement, Thayer Equity
Investors III, L.P., a Delaware limited partnership ("Thayer Equity"), TC
Co-Investors, LLC, a Delaware limited liability company ("TC Co-Investors" and,
together with Thayer Equity, the "Thayer Stockholders") and Daniel F. Gillis,
an individual residing in Bethesda, MD ("Daniel F. Gillis"; each of the Thayer
Stockholders and Daniel F. Gillis, a "Stockholder") entered into a Stockholder
Agreement with SAC and Software AG dated as of November 1, 2000 (the
"Stockholder Agreement"). In the Stockholder Agreement, Thayer Equity
represented that it beneficially owns 10,736,953 shares of Common Stock (or
approximately 36.5% of the outstanding Common Stock), TC Co-Investors
represented that it beneficially owns 58,291 shares of Common Stock (or
approximately 0.2% of the outstanding Common Stock) and Daniel F. Gillis
represented that he beneficially owns 2,251,355 shares of Common Stock, of
which 2,047,010 shares are subject to options, (or approximately 7.7% of the
Common Stock, assuming exercise of all such options, or less than 1% of the
outstanding Common Stock, exercise of no options). The ownership percentages
set forth in this Schedule 13D are based on the number of Common Stock
outstanding on October 31, 2000, as represented to Software and SAC by the
Company in the Merger Agreement. The number of Common Stock beneficially owned
by each of the Thayer Stockholders and Mr. Gillis is referred to as their
"Owned Shares". Pursuant to the terms of the Stockholder Agreement, (A) each
Stockholder has agreed, among other things, to vote the Owned Shares (i) in
favor of the adoption and approval of the Merger Agreement, the Merger and any
other related agreements, (ii) against any action or agreement that would
result in a breach in any material respect of any covenant, representation or
warranty or any other obligation or agreement of Company under the Merger
Agreement, and (iii) against any action or agreement that would impede,
interfere with, delay, or postpone or that would reasonably be expected to
discourage the transactions contemplated by the Merger Agreement, (B) each
Stockholder has granted a proxy in respect of the Owned Shares, subject to the
satisfaction or waiver to such obligation set forth in the Stockholder
Agreement, including the satisfaction or waiver of all conditions of the Merger
pursuant to the Merger Agreement, (C) Thayer Stockholders agreed to sell to
Merger Subsidiary a number of the outstanding Shares beneficially owned by each
equal to 65% of such Owned Shares and to exercise all options for Shares prior
to such sale and (D) Thayer Stockholders further agreed not to, within a
specified period of time, (i) take any action to solicit, initiate or encourage
certain acquisition proposals or (ii) engage in negotiations or discussions
with, disclose any nonpublic information relating to Company or any subsidiary
to, or assist, facilitate or encourage any third party that may be considering
an acquisition proposal.
Each Thayer Stockholder has agreed to sell to SAC immediately prior to the
consummation of the Merger approximately 65% of its Owned Shares in exchange
for a 12-month subordinated promissory note of Software AG in the aggregate
principal amount calculated by multiplying the number of its Owned Shares
purchased by SAC by the per share purchase price of $11.50. With respect to the
remaining 35% of the Owned Shares held by the Thayer
Page 5 of 10
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Stockholders and not sold to SAC immediately prior to consummation of the
Merger, the Thayer Stockholders will receive pursuant to the Merger Agreement
the same consideration received by other stockholders in the Merger.
The summaries of the terms of the Merger Agreement and the Stockholder
Agreement set forth herein are qualified in their entirety by reference to the
Merger Agreement and the Stockholder Agreement, respectively. A copy of the
Merger Agreement is attached hereto as Exhibit 1 and a copy of the Stockholder
Agreement is attached hereto as Exhibit 2, and each such agreement is
incorporated herein by reference. The written agreement of the Reporting
Persons to the joint filing of this statement is attached hereto as Exhibit 3.
Except as set forth herein, none of the Reporting Persons, nor any person
named in Schedule A or Schedule B attached hereto has any plans or proposals
which relate to or would result in (i) the acquisition by any person of
additional securities of the Company, or the disposition of securities of the
Company; (ii) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or any of its
subsidiaries; (iii) a sale or transfer of a material amount of assets of the
Company or any of its subsidiaries; (iv) any change in the present Board of
Directors or management of the Company; (v) any material change in the present
capitalization or dividend policy of the Company; (vi) any other material
change in the Company's business or corporate structure; (vii) changes in the
Company's charter, bylaws or instruments corresponding thereto or other actions
which may impede the acquisition of control of the Company by any person;
(viii) causing the Common Stock to cease to be authorized to be quoted on the
New York Stock Exchange; (ix) the Common Stock becoming eligible for the
termination of registration pursuant to Section 12(g)(4) of the Exchange Act;
or (x) any action similar to any of those enumerated above.
Item 5. Interest in Securities of the Issuer.
(a) and (b) Prior to November 1, 2000, Software AG had and continues to have
sole power to vote and to dispose of 2,202,600 shares of Common Stock or
approximately 7.5% of the outstanding Common Stock. As a result of the Merger
Agreement and for the purpose of Rule 13d-3 promulgated under the Exchange Act,
SAC may be deemed to have shared voting power with respect to (and therefore
beneficial ownership) 2,202,600 shares of Common Stock or approximately 7.5% of
the outstanding Common Stock. As a result of the Stockholder Agreement and for
the purpose of Rule 13d-3 promulgated under the Exchange Act, each of Software
AG and SAC may be deemed to have shared voting power with respect to (and
therefore beneficial ownership of) 13,046,599 shares of Common Stock, including
options to purchase 2,047,010 shares of Common Stock, of which options to
purchase 1,847,010 shares are vested and options to purchase 200,000 shares
would vest upon occurrence of a change of control. Each of Software AG and SAC
then has beneficial ownership of 15,249,199 shares of Common Stock, which
represents 48.5 % of the Common Stock, assuming the exercise of all options, or
44.9% of all outstanding Common Stock assuming the exercise of no options. None
of the persons listed on Schedule A or Schedule B beneficially owns any Common
Stock. See Item 4.
(c) Except as set forth in Item 4, no transactions in the Common Stock
have been effected during the past 60 days by the Reporting Persons or, to the
best knowledge of the Reporting Persons, by any of the persons named in
Schedule A or Schedule B.
(d) Inapplicable.
(e) Inapplicable.
Page 6 of 10
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Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
Except for the Merger Agreement and the Stockholder Agreement, there are
no contracts, arrangements, understandings or relationships (legal or
otherwise) between the Reporting Persons, and any other person, with respect to
any securities of the Company, including, but not limited to, transfer or
voting of any of the securities, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of profits or
loss, or the giving or withholding of proxies.
Item 7. Material to be Filed as Exhibits.
Exhibit 1: Agreement and Plan of Merger dated as of November 1, 2000,
among Saga Systems, Inc., Software AG and Software AG Acquisition Corporation.
Exhibit 2: Stockholder Agreement dated as of November 1, 2000, among
Software AG, Software AG Acquisition Corporation, Thayer Equity Investors III,
L.P., TC Co-Investors, LLC and Daniel F. Gillis.
Exhibit 3: Joint Filing Agreement dated as of November 10, 2000 between
Software AG and SAC.
Page 7 of 10
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SIGNATURES
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certify that the information set forth in this
statement is true, complete and correct.
Date: November 10, 2000
SOFTWARE AG
By: /s/ Erwin Koenigs
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Name: Dr. Erwin Koenigs
Title: Chief Executive Officer
By: /s/Volker Dawedeit
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Name: Volker Dawedeit
Title: Chief Financial Officer
SOFTWARE AG ACQUISITION CORPORATION
By: /s/ Erwin Koenigs
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Name: Dr. Erwin Koenigs
Title: President
By: /s/ Volker Dawedeit
-------------------------------
Name: Volker Dawedeit
Title: Vice President
Page 8 of 10
<PAGE>
SCHEDULE A
DIRECTORS AND EXECUTIVE OFFICERS OF SOFTWARE AG
The name and present principal occupation or employment of each director
and executive officer of Software AG is set forth below. Each director is also
an executive officer and each of their principal employment is with Software AG
whose business address is Software AG, Uhlandstrasse 12, D-64297, Darmstadt,
Germany. Each individual is a German citizen.
Present Principal Occupation Including
Name Name of Employer
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Directors and Executive Officers
Dr. Erwin Koenigs....................... Chairman of the Management Board of
Software AG (equivalent to Chief
Executive Officer)
Volker Dawedeit......................... Member of the Management Board of
Software AG (equivalent to Chief
Financial Officer)
Andreas Zeitler......................... Member of the Management Board of
Software AG
Page 9 of 10
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SCHEDULE B
DIRECTORS AND EXECUTIVE OFFICERS OF SOFTWARE AG ACQUISITION CORPORATION
The name and present principal occupation or employment of each director
and executive officer of Software AG Acquisition Corporation is set forth
below. The business address of Software AG Acquisition Corp. is c/o Software
AG, Uhlandstrasse 12, D-64297, Darmstadt, Germany. Each director's and
executive officer's principal employment is with Software AG whose business
address is Software AG, Uhlandstrasse 12, D-64297, Darmstadt, Germany. Each
individual is a German citizen.
Present Principal Occupation Including
Name and Office Name of Employer
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Directors and Executive Officers
Dr. Erwin Koenigs......President Chairman of the Management Board of
Software AG (equivalent to CEO)
Volker Dawedeit........Vice President Member of the Management Board of
Software AG (equivalent to CFO)
Andreas Zeitler Member of the Management Board of
Software AG
Present Principal Occupation Including
Name and Office Name of Employer
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Executive Officer (who is not a director)
Joachim Mueller........Vice President Vice President Finance of Software AG
Page 10 of 10
