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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES ACT OF 1934
Date of Report (Date of earliest event reported) February 26, 1997
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RATIONAL SOFTWARE CORPORATION
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(Exact name of Registrant as specified in its charter)
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<S> <C> <C>
Delaware 0-12167 54-1217099
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(State or other jurisdiction of (Commission File Number) (I.R.S. Employer Identification No.)
incorporation or organization)
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2800 San Tomas Expressway
Santa Clara, CA 95051-0951
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(Address of principal executive offices)
Registrant's telephone number, including area code: (408) 496-3600
Not Applicable
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(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On November 12, 1996, Rational Software Corporation, a Delaware corporation
("Rational") and SQA, Inc., a Delaware corporation ("SQA") entered into an
Agreement and Plan of Reorganization (the "Merger Agreement") by and among
Rational, Sunshine Acquisition Corp., a Delaware corporation and a wholly owned
subsidiary of Rational ("Merger Sub") and SQA , providing for, among other
things, the merger of Merger Sub with and into SQA, which will be the surviving
corporation and will be a wholly owned subsidiary of Rational (the
"Merger"). The Merger was effected on February 26, 1997, pursuant to the
Certificate of Merger filed with the Secretary of State of Delaware on that
date. Pursuant to the Merger Agreement, each outstanding share of Common Stock,
par value $0.01 per share, of SQA (the "SQA Common Stock") was converted into
the right to receive 0.86 (the ''Exchange Ratio'') shares of Rational Common
Stock, and each outstanding option or right to purchase SQA Common Stock under
the SQA stock option plans, the SQA stock purchase plan or outstanding warrants
was assumed by Rational and became an option or right to purchase Rational
Common Stock, with appropriate adjustments made to the number of shares issuable
thereunder and the exercise price thereof based on the Exchange Ratio.
The Merger is intended to be a tax-free reorganization under Section 368(a)
of the Internal Revenue Code of 1986, as amended, and is intended to be treated
as a pooling of interests for financial reporting purposes in accordance with
generally accepted accounting principles. The assets of SQA were used, prior to
the completion of the Merger, for the development, marketing and support of
software for the automated quality testing of Windows client/server
applications, a use that Rational intends to continue immediately following the
Merger.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
The following financial statements and exhibits are filed as part of this
report, where indicated.
(a) Financial statements of business acquired, prepared pursuant to Rule
3.05 of Regulation S-X are incorporated herein by reference to
Rational's Registration Statement on Form S-4 (File No. 333-19669)
filed with the Securities and Exchange Commission on January 13, 1997,
as amended on January 17, 1997.
(b) Pro forma financial information required pursuant to Article 11 of
Regulation S-X is unavailable as of the date of this filing. Such
information will be filed on or before May 12, 1997.
(c) Exhibits
2.1 Agreement and Plan of Reorganization dated November 12, 1996 by
and among Rational Software Corporation, a Delaware corporation,
Sunshine Acquisition Corp., a Delaware corporation and wholly-
owned subsidiary of Rational Software Corporation, and SQA,
Inc., a Delaware corporation is incorporated herein by reference
to Rational's Registration Statement on Form S-4 (File No. 333-
19669) filed with the Securities and Exchange Commission on
January 13, 1997, as amended on January 17, 1997.
2.2 Certificate of Merger merging Sunshine Acquisition Corp. with
and into Target, dated February 26, 1997.
99.1 Press Release dated February 26, 1997.
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
RATIONAL SOFTWARE CORPORATION
February 26, 1997 /s/ Robert T. Bond
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Robert T. Bond
Senior Vice President, Chief Operating Officer,
Chief Financial Officer, and Secretary
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CERTIFICATE OF MERGER
MERGING
SUNSHINE ACQUISITION CORP.
WITH AND INTO
SQA, INC.
_____________________
Pursuant to Section 251 of the General Corporation Law of
the State of Delaware
_____________________
Sunshine Acquisition Corp., a Delaware corporation ("Merger Sub") and
SQA, Inc., a Delaware corporation ("Target") DO HEREBY CERTIFY AS FOLLOWS:
FIRST: That Merger Sub was incorporated on November 8, 1996, pursuant
to the Delaware General Corporation Law (the "Delaware Law"), and that Target
was incorporated on March 8, 1990 under the name "Software Quality Automation,
Inc.," and subsequently amended its corporate name to "SQA, Inc.," pursuant to
the Delaware Law.
SECOND: That an Agreement and Plan of Reorganization (the "Merger
Agreement"), dated as of November 12, 1996, among Rational Software
Corporation, a Delaware corporation, Merger Sub and Target, setting forth the
terms and conditions of Merger Sub with and into Target (the "Merger"), has
been approved, adopted, certified, executed and acknowledged by each of the
constituent corporations in accordance with Section 251(c) of the Delaware
Law.
THIRD: That the name of the surviving corporation (the "Surviving
Corporation") shall be SQA Holdings, Inc., a Delaware corporation.
FOURTH: That pursuant to the Merger Agreement, the Restated
Certificate of Incorporation of Target immediately prior to the Merger will be
the Certificate of Incorporation of the Surviving Corporation without
amendment.
FIFTH: That an executed copy of the Merger Agreement is on file at the
principal place of business of the Surviving Corporation at the following
address:
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Rational Software Corporation
2800 San Tomas Expressway
Santa Clara, CA 95051
SIXTH: That a copy of the Merger Agreement will be furnished by the
Surviving Corporation, on request and without cost, to any stockholder of any
constituent corporation.
SEVENTH: That the Merger shall become effective upon the filing of
this Certificate of Merger with the Secretary of State of the State of
Delaware.
IN WITNESS WHEREOF, each of Merger Sub and Target has caused this
Certificate of Merger to be executed in its corporate name this 26th day of
February, 1997.
SUNSHINE ACQUISITION CORP.
By: /s/ Paul Levy
________________________
Paul Levy, President
ATTEST:
/s/ Robert T. Bond
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Robert T. Bond, Secretary
SQA, INC.
By: /s/ Ronald H. Nordin
__________________________
Ronald H. Nordin, President
and Chief Executive Officer
ATTEST:
/s/ William J. Schnoor, Jr.
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William J. Schnoor, Jr., Secretary
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FOR IMMEDIATE RELEASE
Investor contact: Robert T. Bond, Rational Software Corporation
(408) 496-3694
E-mail [email protected]
Press contact: Kara Myers, Rational Software Corporation
(408) 496-3891
E-mail [email protected]
RATIONAL SOFTWARE CORPORATION ANNOUNCES THE COMPLETION
OF ITS MERGER WITH SQA, INC.
Rational Extends Solution for Component-Based Development
with Industry-Leading Line of Windows-Based Testing Tools
Santa Clara, CA (February 27, 1997)--Rational Software Corporation today
announced the completion of its merger transaction with SQA, Inc., following
approval of the merger at the companies' respective stockholders meetings.
Pursuant to the merger, each outstanding share of SQA common stock was exchanged
for 0.86 shares of Rational common stock. Approximately 7.0 million shares of
Rational common stock were issued in connection with the merger, and
approximately 1.4 million additional shares of Rational common stock are subject
to options and other rights assumed in connection with the merger. Rational
expects the merger to result in approximately $3 million in direct transaction
costs plus an additional charge to operations of approximately $5 million to $7
million primarily in the quarter ending March 31, 1997, to reflect costs
associated with integrating the two companies. The merger is intended to be a
tax-free transaction to be accounted for using the pooling-of-interests method.
Upon the closing of the merger, Ronald H. Nordin, who served as SQA's chief
executive officer prior to the merger, became an executive officer of Rational
and was added to the Rational board of directors. SQA will continue as a
business unit of Rational from its Burlington, Massachusetts, location.
Stockholders of SQA will receive a letter from ChaseMellon Shareholder
Services, the exchange agent for the merger, regarding the procedures for
tendering their stock certificates for shares of Rational. Stockholders of SQA
should not tender stock certificates except in accordance with such
instructions.
. . . . more
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As a result of the merger, Rational now has a comprehensive integrated product
line available for automating component-based development of software.
Component-based development is a powerful trend that promises to improve the
ability of users to design, build, and adapt the software systems on which their
organizations depend.
"This merger with SQA is a key part of our strategy for providing the leading
solution for automated development of component-based systems," said Mike
Devlin, president of Rational. "By adding SQA's industry-leading line of
Windows-based testing tools, we will be able to offer our customers a complete
integrated solution."
Component-based development raises the level of abstraction in software
development, moving users away from a focus on handcrafting individual lines of
code or single objects and toward a focus on designing, implementing, and
reusing software on a large scale. This leads to substantial improvements in
time-to-market, flexibility to meet changing business requirements,
return-on-investment, and software quality.
Rational's comprehensive product line includes the Rational Rose family of
visual modeling tools; the SQA Suite of client/server testing tools;
RequisitePro for capturing and managing software requirements; SoDa for
automating software document generation; the Rational Summit family of component
management and task/change management tools; and the Rational Apex family of
integrated programming environments. Rational supports major implementation
technologies and programming languages, including Visual Basic, Visual C++,
Visual J++, PowerBuilder, Forte, PeopleSoft's PeopleTools, Oracle's Designer
2000, Ada, C++, and Java. Rational's products are available individually or as
part of integrated, multiproduct suites.
"Even more exciting than the individual elements of our product line is the
leverage that comes from cross-product integration," Devlin said. "The
integration of visual modeling with automated testing, or of requirements
management with testing, increases the power of the individual tools, making it
easier and faster for customers to develop their software."
Initial integrations of Rational Rose and SQA Suite, as well as RequisitePro and
Rational Rose were shown at Rational's International User Conference in
February, and will be available to customers later this calendar year.
RequisitePro is already integrated with SQA Suite, providing traceability from
requirements to the associated test cases.
. . . . more
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Rational Software Corporation (NASDAQ: RATL) develops, markets, and supports a
comprehensive solution for automating the component-based development of
software systems that enterprises depend on. Rational's solution includes an
integrated family of products that automate software development, a software
process that can be configured to the specific needs of customers, and a range
of consulting and support services. For more information on Rational's products
and services, visit Rational's Web site at www.rational.com.
The forward-looking statements contained in this press release, which reflect
management's best judgment based on factors currently known, involve risks and
uncertainties, including risks associated with the ability to successfully
integrate Rational and SQA, the ability to successfully develop new products,
market acceptance of existing and new products of the combined companies, the
continued success of the Microsoft operating system, variances between actual
and estimated costs and expenses related to the merger, the potential for
fluctuations in quarterly operating results, rapid technological change, and
intense competition from current and potential competitors, including Microsoft,
who may be able to respond more quickly to new or emerging technologies and
changes in customer requirements. For a more detailed discussion, see the risks
described in the Registration Statement on Form S-4 filed with the SEC in
connection with the merger, as well as Rational's Quarterly Report on Form 10-Q
for the period ended December 31, 1996. Actual results may differ materially
from the forward-looking statements contained in this press release.
# # # # #
The word "Rational" and Rational's products are trademarks of Rational Software
Corporation. References to other companies and their products use trademarks
owned by the respective companies and are for reference purposes only.
For more information contact:
Rational Software Corporation
2800 San Tomas Expressway
Santa Clara, CA 95051-0951
Tel. (408) 496-3600 or (800) RAT-1212
Fax (408) 496-3636
Fax-on-demand (408) 496-3966
E-mail [email protected]
Web www.rational.com
