As filed with the Securities and Exchange Commission on August 1, 1995.
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
_______________
INTERSOLV, INC.
(Exact name of Registrant as Specified in its Charter)
Delaware 52-0990382
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
9420 Key West Avenue
Rockville, Maryland 20850
(301) 838-5000
(Address, including zip code, and telephone number,
including area code, of Registrant's principal
executive offices)
Kenneth A. Sexton
INTERSOLV, Inc.
9420 Key West Avenue
Rockville, Maryland 20850
(301) 838-5000
(Name, address, including zip code, and
telephone number, including area code, of agent
for service)
Copy to:
Jeffrey E. Jordan, Esq.
Arent Fox Kintner Plotkin & Kahn
1050 Connecticut Avenue, N.W.
Washington, DC 20036-5339
Approximate date of commencement of
proposed sale to the public: As soon as
practicable on or after the effective date of this
Registration Statement.
______________
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 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.
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 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, please check
the following box. X
_______________
CALCULATION OF REGISTRATION FEE
Title of Each Amount Proposed Proposed Amount of
Class of to be Maximum Maximum Registration
Securities Registered Aggregate Offering Fee
be Registered Price Per Price (1)
Unit
Common Stock, 675,000 $24.875 $16,790,625 $5,789.87
$.01 par shares
value
Share Purchase
Rights
(1) Estimated solely for the purpose of determining the registration
fee pursuant to Rule 457(c).
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 or until the Registration
Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may
determine.
PROSPECTUS
INTERSOLV, INC.
675,000 Shares of Common Stock
The Common Stock of INTERSOLV, Inc. (the
"Company" or "INTERSOLV"), par value $0.01 per share
(the "Common Stock"), offered hereby is held by
the Selling Securityholders (as defined herein) who
may from time to time offer for sale such shares of
Common Stock. See "Selling Securityholders." The
Company will not receive any proceeds from the sale by
the Selling Securityholders of the Common Stock.
The Common Stock is listed on the NASDAQ
National Market System under the symbol "ISLI." On
July 31, 1995, the last reported sale price of the
Common Stock reported on the NASDAQ National Market
was $24.875 per share. See "Price Range of Common
Stock."
See "Risk Factors" on page 5 for certain
information that should be considered by prospective
investors.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
Any or all of the Common Stock offered hereby
may be sold from time to time to purchasers
directly by a Selling Securityholder. Alternatively,
a Selling Securityholder may from time to time offer any
or all of the Common Stock through underwriters, dealers,
brokers or other agents. The Company will pay the expenses
of this offering estimated at $45,000. The Common Stock
offered hereby may be sold from time to time in one
or more transactions at a fixed offering 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 a Selling
Securityholder or by agreement between a Selling
Securityholder and its underwriters, dealers, brokers
or other agents.
Any underwriters, dealers, brokers or other
agents participating in the distribution of Common
Stock offered hereby may receive compensation in the form of
underwriting discounts, concessions, commissions or
fees from a Selling Securityholder and/or purchasers of
Common Stock for whom they may act. In addition, a Selling
Securityholder and any such underwriters, dealers, brokers or
other agents that participate in the distribution of Common
Stock may be deemed to be underwriters under the Securities
Act, and any profits on the sale of Common Stock by them
and any discounts, commissions or concessions received by
any of such persons may be deemed to be underwriting discounts
and commissions under the Securities Act. Those who act as
underwriter, broker, dealer or other agent in connection with the
sale of the Common Stock will be selected by a Selling
Securityholder and may have other business relationships
with the Company and its subsidiaries or affiliates in the
ordinary course of business. The Company cannot presently estimate
the amount of any such discounts, commissions or concessions. The
Company knows of no existing arrangements between the Selling
Securityholders and any underwriter, dealer, broker
or other agent. See "Plan of Distribution."
The date of this Prospectus is August 1, 1995
No person has been authorized to give
any information or to make any representations other
than those contained in this Prospectus and, if given
or made, such information or representations must not
be relied upon as having been authorized. This
Prospectus does not constitute an offer to sell or
the solicitation of an offer to buy any securities
other than the securities to which it relates or an
offer to sell or the solicitation of an offer to buy
such securities in any circumstances in which such
offer or solicitation is unlawful. Neither the
delivery of this Prospectus nor any sale made
hereunder shall, under the circumstances, create
any implication that there has been no change in the
affairs of the Company since the date hereof or
thereof or that the information contained herein or
therein is correct as of any time subsequent to the
date of such information.
TABLE OF CONTENTS
Page
Available Information 2
Documents Incorporated by Reference 3
The Company 4
Risk Factors 5
Price Range of Common Stock 7
Use of Proceeds 7
Selling Securityholders 8
Plan of Distribution 9
Description of Capital Stock 10
Legal Matters 11
Experts 11
AVAILABLE INFORMATION
The Company is subject to the
informational requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"),
and the rules and regulations promulgated thereunder,
and in accordance therewith files reports, proxy
statements and other information with the Securities
and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information filed
by the Company with the Commission, including the Registration
Statement on Form S-3 of which this Prospectus is a part, may be
inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the
following Regional Offices of the Commission: New
York Regional Office, Seven World Trade Center, New
York, New York 10048 and Chicago Regional Office, 500
West Madison Street, Chicago, Illinois 60661. Copies
of such material can also be obtained from the
Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates.
The Common Stock is traded in the over-the-
counter market and is quoted in the NASDAQ
National Market. Copies of the Company's
reports, proxy statements and other information
filed with the Commission can also be inspected at the
offices of the National Association of Securities
Dealers, Inc. at 1735 K Street, N.W., Washington, D.C.
20006.
The Company has filed with the Commission
a Registration Statement on Form S-3 (herein, together
with all information incorporated by reference
therein and amendments and exhibits thereto,
referred to as the "Registration Statement") under
the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the securities
offered hereby. This Prospectus does not contain all
of the information set forth or incorporated by
reference in the Registration Statement, certain parts
of which are omitted as permitted by the rules
and regulations of the Commission. Statements
contained in this Prospectus as to the contents of
any contract or other document are not necessarily
complete, and in each instance reference is made to
the copy of such contract or other document filed as
an exhibit to the Registration Statement, each such
statement being qualified in all respects by such
reference. For further information regarding the
Company and the securities offered hereby, reference
is made to the Registration Statement.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents previously filed by
the Company with the Commission (File No. 0-15188)
pursuant to the Exchange Act are incorporated
herein by this reference and are made part of this
Prospectus:
(1) The Company's Annual Report on Form 10-K
for the fiscal year ended April 30, 1995, filed
pursuant to Section 13 of the Exchange Act; and
(2) The Company's Current Report on Form 8-K,
dated May 11, 1995 and as amended by Amendment No.
1, dated July 12, 1995, each filed pursuant to
Section 13 of the Exchange Act.
All documents filed by the Company pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act after the date of this Prospectus and prior to
termination of the offering of the Common Stock shall
be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date any
such document is filed. Any statement contained in a
document incorporated or deemed to be incorporated by
reference herein shall be modified or superseded for
purposes of this Prospectus to the extent that a
statement contained herein or in any subsequently
filed document which is deemed to be incorporated by
reference herein modifies or supersedes such statement.
Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to
each person to whom a copy of this Prospectus is
delivered, upon written or oral request, a copy of any
and all of the documents incorporated by reference
herein, other than exhibits to such documents unless
such exhibits are specifically incorporated by
reference into such documents. Any such request
may be directed to Intersolv, Inc.,
Attention: Kenneth A. Sexton, at the Company's principal
executive offices, which are located at 9420 Key West
Avenue, Rockville, Maryland 20850, telephone number
(301) 838-5000.
THE COMPANY
Intersolv is a software product
company, specializing in open, client/server
development tools. The Company's products and services
support a broad range of approaches, ranging from
the development of new client/server systems to the
maintenance of traditional systems. The Company's
product strategy emphasizes an open architecture
which permits its products to be used separately,
with the Company's other products and with software
development products and approaches offered by other
companies. The Company's objective is to build
products that deliver high productivity on
simple projects and are powerful enough to handle
scalability requirements of production-grade
information systems without retooling.
Intersolv offers software products and services
in the following solution areas:
Object Oriented ("OO") Development - This product
series is focused on the needs of developers using
the C++ language. The Company's initial product offering
is an OO application framework and tool set. The
Company currently has several other tools in development,
which it plans to introduce in the future.
Client/Server Development - Intersolv also offers
tools for traditional developers using the
COBOL language who want to move into the
client/server architecture. These tools can be used for
rapid application development ("RAD"), design driven
development, or for maintenance and reuse of
legacy applications.
Data Warehousing - Intersolv products provide access
to more than 30 database management systems
("DBMS"). Offerings including an end user query and reporting
tool and tools to deploy cross-platform Open
Database Connectivity ("ODBC") - compliant applications
accessing multiple DBMS.
Software Configuration Management ("SCM") -
Intersolv offers a comprehensive SCM product suite.
The Company's SCM offerings leverage team development on
the LAN while supporting multi-operating systems and
multi-tool environments.
The Company markets and distributes its products
to end-users, line-of-business developers,
traditional information system departments, project
managers and application development executives
within corporations and independent software vendors
worldwide. Sales in the United States, United
Kingdom, Germany, France and Australia are made
through Company owned and operated entities which use
a combination of field sales (face to face),
telesales and third party distribution channels. The
Company's direct sales effort is augmented with a
network of independent software vendors, dealers,
distributors and value added resellers in more than
30 countries around the world.
Intersolv has expanded its operations both
through internal development and selected acquisition
of complementary products and businesses. In May
1995, Intersolv acquired PC Strategies & Solutions, Inc.
("PCS") in a transaction accounted for using the "pooling-of-interests"
method.
Intersolv was incorporated under the laws of
the State of Delaware in 1985, successor to the
business begun in 1982. The Company's principal
executive offices are located at 9420 Key West Avenue,
Rockville, Maryland 20850, and its telephone number at
that address is (301) 838-5000.
RISK FACTORS
Prospective investors should carefully
consider, among other factors, the following:
Technological Changes. The software
development tools market is characterized by rapid
changes in technology and user needs.
Compatibility of the Company's products with
customers' preferred operating systems and database
management systems are important to future results of
the Company. The current market trend appears to be
weighted towards building client/server and cooperative
applications using a changing mix of operating
systems. Revenue from the Company's
traditional development tools area declined by 22%
during the year ended April 30, 1995. Products in
this area accounted for 35% of fiscal 1995 revenue,
and the Company expects demand in this area to remain
flat or continue to decline. During fiscal 1995, the
decline in traditional development tools revenues was
more than offset by a 70% revenue increase in the
Company's other products and services. Because of
the rapidly changing market, there is no assurance
that this substantial growth will
continue. Future operating results could be
adversely affected by the market's acceptance of
the Company's existing and new products in this
rapidly changing market.
Competition. The market for the Company's
products is highly competitive. The Company competes with
a number of companies that market similar types
of products. The Company also expects to
encounter competition in the future from established
companies and new companies that may develop products
competitive with the Company's products. Many of the
Company's actual and potential competitors have
substantially greater financial, marketing and
technological resources than the Company. Due to the
inherently unpredictable nature of the market in
which the Company competes, any actual or potential
competitor is capable of capturing a
disproportionate share of the market in a
relatively short time frame. Such a rapidly shifting
demand would adversely affect the Company's
profitability.
Fluctuations in Quarterly Performance.
Historically, the Company recognizes a major portion
of its revenue during the last month of a fiscal
quarter and has experienced quarterly fluctuations in
revenues and earnings due to the timing of large
orders. The Company has no significant revenue
backlog, and substantially all of its product revenues
in any quarter results from sales made in the
quarter. If sales are delayed and do not close in a
quarter as expected, the Company's results of
operations for that quarter would be adversely
affected. Net income may be disproportionately
affected by a reduction in revenues because a large
portion of the Company's expenses do not vary
with revenues. Historically, the Company has
recognized the largest portion of its revenues and
operating income in the fourth quarter of its
fiscal year, and the Company typically experiences
lower revenues and operating income for the first
quarter of a fiscal year than in the fourth quarter of
the prior fiscal year.
Acquisition Charges. In the past, the Company
has expanded its operations through selected
acquisitions. As a result of past acquisitions, the
Company has charged earnings with transaction costs and
certain restructuring costs to integrate the acquired
businesses.
Global Economies. The Company markets and sells
its products through its own sales force and through
third parties in approximately 30 countries.
Consequently, the Company's results are affected by
changes in global economies and currency exchange
rates.
Third Party Sales Channels. In addition to
the Company's own marketing organization, the Company
markets its products through a global network of other
independent software vendors (ISVs), value-
added resellers (VARs) and dealers and distributors.
Through third party alliances, the Company enables
selected ISVs to embed and sell certain Intersolv
technologies in their own products, for which the
Company receives royalties. Alliances with VARs,
dealers and distributors to resell the Company's
products in markets which the Company cannot cost
effectively reach on a direct basis. The success of
these sales channels, and thus the amount
of royalties the Company may receive, is dependent on
the financial condition and marketing effectiveness of
these third parties, which the Company cannot directly
control.
Dependence on Key Personnel. Competition
for qualified personnel in the software industry is
intense. The future success of the Company will
depend on its ability to attract and retain key employees.
The failure to attract or the loss of these individuals
could have an adverse effect on the Company.
Possible Volatility of Stock Price. The
market price for the Common Stock has been highly
volatile over the past several years, and the
market price may be subject to significant
volatility in the future, particularly on a
quarterly basis. Factors such as fluctuations in
quarterly performance, the announcement of
technological innovations or new commercial products
by the Company or its competitors, as well as
market conditions in the computer software or
hardware industries and the condition of the economy
in general, may have a significant impact on the
market price of the Common Stock. In addition, in
recent years the stock market has experienced
large price and volume fluctuations, which
often have been unrelated to the operating
performance of specific companies or market sectors.
Effect of Delaware Law and Certain
Charter Provisions. Certain provisions of Delaware
law and of the Company's Certificate of Incorporation
could have the effect of making it more difficult for
a third party to acquire, or of discouraging a third
party from attempting to acquire, control of the
Company. Such provisions could limit the price that
certain investors might be willing to pay in the
future for shares of Common Stock. Certain of these
provisions could make it more difficult for
stockholders to effect certain corporate actions or
could also have the effect of delaying or preventing
a change in control of the Company. See "Description
of Capital Stock."
PRICE RANGE OF COMMON STOCK
The Common Stock is traded in the over-the-
counter market on the NASDAQ National Market under
the symbol "ISLI." The following table sets
forth, for the Company's fiscal years indicated, the
high and low last sale prices of the Common Stock as
reported by the NASDAQ National Market.
High Low
1993
First Quarter 16.0 10.6
Second Quarter 17.7 13.0
Third Quarter 15.2 11.5
Fourth Quarter 14.7 6.7
1994
First Quarter 8.5 4.7
Second Quarter 10.0 4.7
Third Quarter 13.2 7.7
Fourth Quarter 15.5 9.7
1995
First Quarter 26.2 14.0
On June 30, 1995, there were approximately
206 holders of record of the Common Stock. See the
cover page of this Prospectus for the last sales price
of the Common Stock reported on the NASDAQ National
Market as of a recent date.
USE OF PROCEEDS
The sale of the Common Stock offered hereby is
for the account of the Selling Securityholders.
Accordingly, the Company will not receive any of the
proceeds from the sale by the Selling Securityholders
of the Common Stock.
SELLING SECURITYHOLDERS
The Common Stock offered by this Prospectus
was initially issued by the Company to Michael I.
Goldman on May 1, 1995 in connection with the
acquisition of PCS. Michael I. Goldman has granted to
Barney J.B. Safdie an option to purchase 10% of the
Common Stock owned by him. The table below sets
forth information regarding the beneficial ownership
of the Common Stock of the Selling Securityholders as
of June 30, 1995 and as adjusted to reflect the
sale of Common Stock offered hereby. For
purposes of the following table, a person is deemed
to have "beneficial ownership" of any shares as of a
given date which such person has the right to acquire
within 60 days after such date.
Shares Owned Maximum Shares Maximum Shares
Before the Being Offered Owned
Offering After the
Offering
Name Number Percent Number Percent
Michael I. Goldman
675,000 4.1% 675,000 0 0%
Barney J. Safdie
67,500 0.4% 67,500 0 0%
Because a Selling Securityholder may offer by
this Prospectus all or some part of the Common Stock
which he holds, no estimate can be given as of the
date hereof as to the amount of Common Stock actually
to be offered for sale by a Selling Securityholder or
as to the amount of Common Stock that will be
held by a Selling Securityholder upon the termination of such
offering. See "Plan of Distribution."
PLAN OF DISTRIBUTION
Any or all of the Common Stock offered hereby may
be sold from time to time to purchasers directly
by a Selling Securityholder. Alternatively, a Selling
Securityholder may from time to time offer any or all
of the Common Stock through underwriters, dealers,
brokers or other agents. The Company will receive no
proceeds from the sale of the Common Stock offered
hereby.
The Common Stock offered hereby may be sold
from time to time in one or more transactions at a
fixed offering 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
a Selling Securityholder or by agreement between a Selling
Securityholder and its underwriters, dealers, brokers
or other agents.
Any underwriters, dealers, brokers or other
agents participating in the distribution of Common
Stock offered hereby may receive compensation in
the form of underwriting discounts, concessions,
commissions or fees from a Selling Securityholder
and/or purchasers of Common Stock for whom they may
act. In addition, a Selling Securityholder and
any such underwriters, dealers, brokers or other
agents that participate in the distribution of
Common Stock may be deemed to be underwriters under
the Securities Act, and any profits on the sale of
Common Stock by them and any discounts, commissions
or concessions received by any of such persons
may be deemed to be underwriting discounts and
commissions under the Securities Act. Those who act
as underwriter,broker, dealer or other agent in connection
with the sale of the Common Stock will be selected by a Selling
Securityholder and may have other business
relationships with the Company and its subsidiaries
or affiliates in the ordinary course of business.
The Company cannot presently estimate the amount of any
such discounts, commissions or concessions. The
Company knows of no existing arrangements between
the Selling Securityholders and any underwriter, dealer,
broker or other agent.
At any time a particular offer of Common Stock
is made by a Selling Securityholder, if
required, a Prospectus Supplement will be distributed
which will set forth the identity of, and certain
information relating to, such Selling Shareholder,
the aggregate amounts of Common Stock being offered
and the terms of the offering, including the name or
names of any underwriters, dealers, brokers or other
agents, any discounts, commissions and other items
constituting compensation from such Selling
Securityholder and any discounts, commissions or
concessions allowed or reallowed or paid to
dealers. Such Prospectus Supplement and, if
necessary, a posteffective amendment to the
Registration Statement of which this Prospectus is a
part will be filed with the Commission to reflect
the disclosure of additional information with
respect to the distribution of the Common Stock.
The Registration Rights Agreement (the
"Registration Rights Agreement"), dated as of May 1,
1995, by and among the Company and Goldman provides
that the Company will indemnify the Selling
Securityholders against certain liabilities,
including liabilities under the Securities Act. The
Registration Rights Agreement also provides for the
indemnification of the Company by the Selling
Securityholders for certain liabilities,
including liabilities under the Securities Act. In
addition, under the Registration Rights Agreement, the
Company's obligation to indemnify extends to those who
participate in the distribution of the Common Stock
as underwriters for the Selling Securityholders. Also
pursuant to the Registration Rights agreement, the
Company has agreed to pay substantially all fees and
expenses incident to the preparation, filing,
amending and supplementing of the Registration
Statement of which this Prospectus is a part and any
registration statements or qualifying documents filed
under any state securities laws.
To comply with certain states' securities laws,
if applicable, the Common Stock offered hereby may be
sold in such states only through brokers or
dealers. In addition, in certain states the Common
Stock may not be sold unless it has been registered
or qualified for sale in such state or an
exemption from registration or qualification is
available and complied with.
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists
of 50,000,000 shares of Common Stock, $0.01 par value
and 3,000,000 shares of Preferred Stock, $0.10 par
value ("Preferred Stock"). As of June 30, 1995,
there were 16,552,653 shares of Common Stock
outstanding and held of record by 206 stockholders,
including the shares of Common Stock offered in
this Prospectus. All of the outstanding shares of
Common Stock are, and the shares offered hereby
will be, when delivered and paid for, fully paid,
validly issued and nonassessable.
Common Stock
Holders of shares of Common Stock are entitled
to one vote per share on all matters to be voted
on by stockholders and are entitled to receive such
dividends, if any, as may bc declared from time to time
by the Board of Directors ("Board") from funds
legally available therefor. Upon liquidation or
dissolution of the Company, the holders of Common
Stock are entitled to receive all assets
available for distribution to the stockholders,
subject to any preferential rights of the holders of
Preferred Stock. Holders of Common Stock have no
preemptive or other subscription rights. There are no
conversion rights or redemption or sinking
fund provisions with respect to Common Stock.
The Transfer Agent and Registrar for the
Common Stock is the First National Bank of Boston.
The phone number of the Transfer Agent is 800-733-5001.
Preferred Stock
The Board may, without further action by the
stockholders, authorize the issuance of Preferred
Stock in one or more series and fix the rights,
preferences and privileges of Preferred Stock,
including the dividend rights, dividend rate,
conversion rights, voting rights, rights and terms of
redemption, liquidation preferences and sinking fund
terms of Preferred Stock of any class or series. No
shares of Preferred Stock are outstanding. The
issuance of Preferred Stock with voting and
conversion rights may adversely affect the voting
power of the holders of Common Stock, including the
loss of voting control to others. Further, the
issuance of Preferred Stock could have the effect of
making it more difficult for a third party to
acquire, or of discouraging a third company from
attempting to obtain, control of the Company. The
Company has no current plan to issue any shares of
Preferred Stock, except as may be required under the
Company's Shareholder Rights Plan.
Shareholder Rights Plan
On August 18, 1989, the Board adopted a
Shareholder Rights Plan (the "Rights Plan"). Under the
Rights Plan, each stockholder of record has received,
and upon future issuances of shares of Common Stock
recipients generally will receive, one right (a
"Right") for each share of Common Stock owned or
received, respectively. Rights trade with the shares
of Common Stock and do not trade separately. Each
Right entitles the holder thereof to purchase one
one-hundredth of a share of the Company's Series A
Junior Participating Preferred Stock at an exercise
price of $40.00. The Rights are not exercisable until
a person or group acquires beneficial ownership of
20.0% or more of the Common Stock or announces a
tender or exchange offer that will result in such
person or group owning 30.0% or more of the Common
Stock. In addition, if any person acquires at least 25.0% of
the Common Stock (except pursuant to a tender or
exchange offer for all Common Stock at a fair price)
or if a holder of at least 20.0% of the Common Stock
consolidates or merges into or engages in certain
other transactions with the Company, the Rights will
entitle all other holders of the Common Stock to
acquire, at the exercise price of the Right, shares
of Common Stock (or, in the event there is not a
sufficient number of authorized but unissued or
reserved shares of Common Stock, any combination
of Common Stock, cash, property or other Company
securities) with a market value equal to twice the
exercise price of the Right. If the Company is
involved in a merger or other business combination
in which it is not the surviving corporation or in
which the Common Stock is changed or converted, or if
the Company sells or transfers at least 50.0% of
its assets or earning power, each Right will
entitle its holder to acquire, at the exercise
price of the Right, shares of common stock of the
acquiring entity with a market value equal to twice
the exercise price of the Right. Each Right is non-
voting, expires on August 31, 1999, and may be
redeemed at the Company's option prior to becoming
exercisable at a redemption price of $0.01 per Right.
The Rights Plan is designed to protect
stockholders in the event of (i) an unsolicited offer
to acquire the Company, including an offer that
does not treat all stockholders equally, (ii) the
acquisition in the open market of shares
constituting control of the Company without offering
fair value to all the stockholders, and (iii) other
coercive takeover tactics that in the opinion of the
Board could impair its ability to represent
stockholder interests. The Company is not aware of
any present efforts by any persons to obtain control
of the Company.
The provisions of the Rights Plan may render
a takeover of the Company more difficult or less likely
to occur even though such takeover may offer the
Company's stockholders the opportunity to sell their
stock at a price above the prevailing market rate and
may be favored by a majority of the stockholders.
Delaware General Corporation Law Section 203.
The Company is subject to the provisions of
Section 203 of the General Corporation Law of the
State of Delaware. In general, Section 203
prohibits certain publicly held Delaware corporations
from engaging in a "business combination" with an
"interested stockholder" for a period of three
years after the date of the transaction in which
the person or entity became an interested
stockholder, unless, among other exceptions, (i) the
business combination is approved by the Board prior
to the date the interested stockholder attained such
status, or by the holders of two-thirds of the
outstanding voting stock not owned by the
interested stockholder or (ii) the interested
stockholder acquired 85% or more of the
outstanding voting stock of the Company in the
transaction. For purposes of Section 203, a "business
combination" is defined broadly to include mergers,
asset sales and other transactions resulting in a
financial benefit to the interested stockholder.
Subject to certain exceptions, an
"interested stockholder" is a person or entity who,
together with affiliates and associates, owns or
within the three immediately preceding years of a
business combination did own, 15.0% or more of the
corporation's outstanding voting stock.
LEGAL MATTERS
The validity of the Common Stock offered hereby
will be passed upon for the Company by Arent Fox
Kintner Plotkin & Kahn, Washington, D.C.
EXPERTS
The consolidated balance sheets as of April 30,
1995 and 1994, and the consolidated statements of
operations, changes in stockholders' equity and cash
flows for each of the three years in the period
ended April 30, 1995, incorporated by reference in
this Prospectus, have been incorporated herein in
reliance on the report of Coopers & Lybrand L.L.P.
independent accountants, given on the authority of
that firm as experts in accounting and auditing.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Set forth below is an estimate of the
approximate amount of the fees and expenses
payable by the Registrant.
Securities and Exchange Commission
registration fee $5,790
*Blue sky fees and expenses
(including legal fees) 1,500
*Accounting fees and expenses 15,000
*Legal fees and expenses 20,000
*Printing and engraving expenses 250
*Transfer agent and registrar fees 0
*Miscellaneous expenses 2,460
Total $45,000
* Estimated
Item 15. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation
Law, as amended (the "DGCL"), provides that a
corporation shall have power to indemnify any person
who was or is a party or is threatened to be made
a party to any threatened, pending or completed
action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than
an action by or in the right of the corporation) by
reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as
a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and
in a manner he reasonably believed to be in or not opposed
to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no
reasonable cause to believe that his conduct was
unlawful.
Article Fifth of the Registrant's Second
Restated Certificate of Incorporation provides that the
Registrant shall, to the fullest extent permitted by
Section 145 of the DGCL, as that Section may be
amended or supplemented from time to time, indemnify
any director, officer or trustee which it shall have
power to indemnify under that Section against any
expenses, liabilities or other matters referred to
in or covered by that Section.
Section 102(b)(7) of the DGCL permits a
corporation to include in its certificate of incorporation
a provision eliminating or limiting the personal
liability of a director to the corporation or its
stockholders for monetary damages for breach of
fiduciary duty as a director, provided that such
provision shall not eliminate or limit the
liability of a director (i) for any breach of the
director's duty of loyalty to the corporation 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 or (iv) for any transaction from which
the director derived an improper personal benefit.
Article Fifth of the Registrant's Second
Restated Certificate of Incorporation provides that
no director shall be liable for any breach of
fiduciary duty, except to the extent that the DGCL
prohibits the elimination or eligibility of directors
for breaches of fiduciary duty.
The Registrant has entered into
Indemnification Agreements with its directors and
officers which require indemnification in certain
circumstances, establish specific payment procedures
and provide certain other rights to such
persons.
Item 16. Exhibits.
Number Description
4.1 Second Restated Certificate of
Incorporation, as amended, of the
Company (incorporated herein by
reference to Exhibit 3(a) to the
Company's Registration Statement on Form
S-4, Registration No. 3338937).
4.2 Rights Agreement, dated August 29, 1989
between the Company and Sovran Bank,
N.S. (incorporated herein by
reference to Exhibit 4.1 to the
Company's Current Report on Form 8-K,
dated September 21, 1989).
4.3 Registration Rights Agreement, dated as
of May 1, 1995, by and among the
Company and Michael I. Goldman
(incorporated herein by reference to
Exhibit 4 to the Company's Current
Report on Form 8-K, dated May 1,
1995).
5 Opinion of Arent Fox Kintner Plotkin &
Kahn as to the legality of the
Common Stock being registered.
23.1 Consent of Arent Fox Kintner Plotkin &
Kahn (included in Exhibit 5)
23.2 Consents of Coopers & Lybrand L.L.P.
24 Power of Attorney of the Board of
Directors (included on the Signature
Page hereof)
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:
(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; 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;
(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 the 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 the directors, officers and controlling
persons of the Registrant pursuant to the provisions
referred to in Item 15 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 Act 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 Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, the Registrant certifies that it has
reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly
caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized
in the City of Rockville, State of Maryland, on this
1st day of August, 1995.
INTERSOLV, INC.
By: /s/ Kevin J. Burns
Kevin J.Burns,
Chairman of the Board,
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears
below constitutes and appoints Kevin J. Burns and
Kenneth A. Sexton his or her true and lawful
attorney-in-fact and agent, each acting alone, with
full power or substitution and resubstitution, for him
or her and in his or her name, place and stead, in
any and all capacities, to sign any or all
Amendments (including post-effective Amendments) to
this Registration Statement, 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, each acting alone, full power and
authority to do and perform each and every act and
thing appropriate or necessary to be done in and about
the premises, as fully to all intents and purposes as
he or she might or could do in person, hereby
ratifying and confirming all that said attorneys-in-
fact and agents, each acting alone, or his or her
substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities
Act of 1933, this Registration Statement has been
signed by the following persons in the capacities and
on the dates indicated:
Signature Title Date
/s/ Kevin J. Burns Chairman of August 1, 1995
Kevin J. Burns the Board,
Chief Executive Officer
(Principal Executive
Officer)
/s/ Kenneth A. Sexton Vice President-
Kenneth A. Sexton Finance August 1, 1995
& Administration
(Principal Financial
and Accounting Officer)
/s/ Norman A. Bolz Director August 1, 1995
Norman A. Bolz
/s/ Richard A. Carpenter Director August 1, 1995
Richard A. Carpenter
/s/ Robert N. Goldman Director August 1, 1995
Robert N. Goldman
/s/ Gary G. Greenfield Director August 1, 1995
Gary G. Greenfield
/s/ Russell E. Planitzer Director August 1,1995
Russell E. Planitzer
/s/ Charles O. Rossotti Director August 1,1995
Charles O. Rossotti
/s/ Frank A. Sola Director August 1,1995
Frank A. Sola
Exhibit 5
August 1, 1995
The Board of Directors
INTERSOLV, Inc.
3200 Tower Oaks Boulevard
Rockville, Maryland 20852
Ladies and Gentlemen:
We have acted as counsel to INTERSOLV, Inc. (the
"Company") with respect to the Company's Registration
Statement on Form S-3, filed by the Company with the
Securities and Exchange Commission in connection with
the registration under the Securities Act of 1933, as
amended, of 675,000 shares of Common Stock, par value
$.01 per share (the "Shares").
As counsel to the Company, we have examined the
Company's Certificate of Incorporation and such
records, certificates and other documents of the
Company, as well as relevant statutes, regulations,
published rulings and such questions of law, as we
considered necessary or appropriate for the purpose of
this opinion.
We assume that, prior to the sale of any Shares to
which the Registration Statement relates, appropriate
action will be taken to register and qualify such
Shares for sale, to the extent necessary, under any
applicable state securities laws.
Based on the foregoing, we are of the opinion that
the 675,000 Shares are validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as
an exhibit to the Registration Statement and to all
references to our firm in the Registration Statement.
In giving this consent, we do not hereby admit that we
come within the category of persons whose consent is
required under Section 7 of the Securities Act of 1933,
as amended, or the General Rules and Regulations
thereunder.
Very truly yours,
Arent Fox Kintner Plotkin & Kahn
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference
in this registration statement on Form S-3 of our
report dated May 31, 1995, on our audits of the
consolidated financial statements and the financial
statement schedule of INTERSOLV, Inc. We consent to
the incorporation by reference in this registration
statement on Form S-3 of our report dated June 9,
1995, on our audit of the financial statements of
PC Strategies &Solutions, Inc. We also consent to
the reference to our Firm under the caption "Experts".
COOPERS & LYBRAND L.L.P.
Washington, D.C.
July 25, 1995
