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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 11, 1997
REGISTRATION NO. 33-62207
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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SYSTEM SOFTWARE ASSOCIATES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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<S> <C>
DELAWARE 36-3144515
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
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500 WEST MADISON STREET, 32ND FLOOR
CHICAGO, ILLINOIS 60661
(312) 641-2900
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
MR. JOSEPH J. SKADRA
CHIEF FINANCIAL OFFICER
SYSTEM SOFTWARE ASSOCIATES, INC.
500 WEST MADISON STREET, 32ND FLOOR
CHICAGO, ILLINOIS 60661
(312) 641-2900
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
DOUGLAS R. NEWKIRK, ESQ.
SACHNOFF & WEAVER, LTD.
30 SOUTH WACKER DRIVE
CHICAGO, IL 60606
(312) 207-1000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time 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 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 filer 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. [_]
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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.
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143,541 SHARES
SYSTEM SOFTWARE ASSOCIATES, INC.
COMMON STOCK
$.0033 PAR VALUE
All of the shares being offered hereby (the "Shares") are presently
outstanding shares of the Common Stock of System Software Associates, Inc., a
Delaware corporation ("SSA" or the "Company") and are being sold by the
stockholder of the Company who is named herein under "Selling Stockholder."
The Company will not receive any of the proceeds from the sale of these
Shares.
SSA Common Stock is quoted on the Nasdaq National Market under the symbol
SSAX. On February 3, 1997, the last sale price reported was $10.125.
This Prospectus is to be used in connection with the sale of the Shares from
time to time by the Selling Stockholder. The Shares may be sold from time to
time by the Selling Stockholder directly or through underwriters, dealers or
agents, in market transactions or in privately-negotiated transactions. The
price at which any of the Shares may be sold, and the commissions, if any,
paid in connection with any sale, may be privately negotiated, may be based on
then prevailing market prices, and may vary from transaction to transaction
and as a result are not currently known. See "Plan of Distribution and
Offering Price."
The Company will pay certain of the expenses of this offering (currently
estimated at $12,000) except that the Selling Stockholder will bear the cost
of any brokerage commissions or discounts incurred in connection with the sale
of his Shares. See "Plan of Distribution and Offering Price."
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURI-
TIES 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.
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The date of this Prospectus is February , 1997.
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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
representation must not be relied upon as having been authorized by the
Company or the Selling Stockholder. This Prospectus does not constitute an
offer to sell or the solicitation of any offer to buy any of the securities
offered hereby in any jurisdiction to any person to whom it is unlawful to
make such offer in such jurisdiction. Neither the delivery of this Prospectus
nor any sale made hereunder shall, under any circumstances, create any
implication that the information herein is correct as of any time subsequent
to the date hereof or that there has been no change in the affairs of the
Company since such date.
RISK FACTORS
In addition to the other information in this Prospectus, the following
factors should be carefully considered in evaluating the Company and its
business before purchasing the Shares offered hereby:
NET LOSSES; UNCERTAINTY OF FUTURE RESULTS
The Company has experienced operating and net losses in 1996. There can be
no assurance that the Company will not continue to incur operating and net
losses. The Company's future operating results will depend upon a number of
business factors, including other factors discussed in these "Risk Factors,"
as well as general economic conditions. Furthermore, prior to a given year or
other fiscal period, the Company hires sales and product development personnel
and makes other decisions which will result in increased expenses in such year
or other period, based upon anticipated revenues for such year or other
period. Due to the seasonality and concentration of the Company's revenues at
the end of fiscal periods, particularly the fourth quarter, and the Company's
cost structure, if revenue targets are not met, the Company's operating
results would be materially adversely affected. See "--Variability of
Quarterly Operating Results; Seasonality." The Company has already made many
of its hiring and other decisions with respect to expenditures for 1997. No
assurances can be given that any of the Company's revenue expectations will be
fulfilled, and the Company's business, results of operations and financial
condition will be materially adversely affected if these expectations are not
fulfilled.
VARIABILITY OF QUARTERLY OPERATING RESULTS; SEASONALITY
The Company's net revenues and operating results can vary, sometimes
substantially, from quarter to quarter. The Company's revenues in general, and
in particular its license fee revenues, are relatively difficult to forecast
due to a number of reasons, including (i) the relatively long sales cycles for
the Company's product, (ii) the size and timing of individual license
transactions, (iii) the timing of the introduction of new product
functionality by the Company or its competitors, (iv) the potential for delay
or deferral of customer purchases of the Company's software, (v) changes in
customer budgets and (vi) seasonality of technology purchases and other
general economic conditions. In recent years, the Company has realized an
increasingly high portion of total net revenues from individually large
licenses which could contribute to greater quarterly variability.
The Company has experienced a seasonal pattern in its operating results,
with the fourth quarter typically having the highest total revenues and
operating income. The Company believes that fourth fiscal quarter revenues are
positively impacted by the Company's sales compensation plans. This factor,
which the Company believes is common in the computer software industry,
typically results in first quarter revenues in any year being lower than
revenues in the immediately preceding fourth quarter. In addition, the
Company's European operations generally provide lower revenues in the summer
months as a result of the generally reduced economic activity in Europe at
such time. This seasonal factor could adversely affect third quarter revenues.
The Company's business planning and control software product (BPCS)
generally is shipped as software licenses are finalized. As a result, license
fee revenues in any quarter are substantially dependent on software license
agreements finalized in that quarter. Because the Company's operating expenses
are based on anticipated revenue levels and because a high percentage of the
Company's expenses are relatively fixed, a delay in the
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recognition of revenue from a limited number of license transactions could
cause significant variations in operating results from quarter to quarter and
could result in losses. The Company plans to increase expenditures in order to
fund greater levels of research and development, a larger direct sales and
marketing staff, development of new distribution and resale channels and
broader customer support capability. To the extent such expenses precede or
are not subsequently followed by increased revenues, the Company's operating
results would be materially adversely affected.
COMPETITION
The enterprise resource planning ("ERP") application software market is
highly competitive, is changing rapidly, and is significantly affected by new
product introductions and other market activities of industry participants.
The Company's BPCS product is targeted at the emerging market for open
systems, client/server ERP software solutions, and the more mature IBM AS/400
ERP market. The Company's current and prospective competitors offer a variety
of products and solutions to address these markets. The Company's primary
competition comes from a large number of independent software vendors and
other sources including (i) companies offering products that run on AS/400 and
other mid-range computers including Marcam Corporation and J.D. Edwards (each
of which has recently introduced a client/server product), and (ii) companies
offering products that run on Unix-based systems in a client/server
environment such as Oracle Corporation (Oracle), Baan Company N.V. (Baan) and
SAP AG. In addition, the Company faces indirect competition from suppliers of
custom-developed business application software that have focused mainly on
proprietary mainframe- and minicomputer-based systems with highly customized
software, such as the systems consulting groups of major accounting firms and
systems integrators. The Company also faces indirect competition from "home-
grown" systems developed by the internal MIS departments of large
organizations.
Some of the Company's competitors have longer operating histories, greater
financial, technical, marketing and other resources than the Company, greater
name recognition, and a larger installed base of customers in the Unix-based,
client/server ERP market. Further, because the Company's product runs on
relational database management systems (RDBMS) and Oracle has the largest
market share for RDBMS software, Oracle may have a competitive advantage in
selling its application products to its RDBMS customer base. The Company may
also face market resistance from the large installed base of legacy systems
because of the reluctance of these customers to commit the time and effort
necessary to convert to an open systems-based client/server software solution.
Furthermore, as the client/server computing market develops, companies with
significantly greater resources than the Company could attempt to increase
their presence in this market by acquiring or forming strategic alliances with
competitors of the Company.
In the Unix-based market, the Company and its customers rely on a number of
systems consulting and systems integration firms for implementation and other
customer support services, as well as recommendations of the Company's product
during the evaluation stage of the purchase process. Although the Company
seeks to maintain close relationships with these third party implementation
providers, many of these third parties have similar, and usually more
established, relationships with the Company's principal competitors. If the
Company is unable to develop and retain effective, long-term relationships
with a sufficient number of these third parties, it would adversely affect the
Company's competitive position. Further, there can be no assurance that these
third parties, some of which have significantly greater financial, technical
and marketing resources than the Company, will not market software product in
competition with the Company in the future or will not otherwise reduce or
discontinue their relationships with or support of the Company and its
product.
The Company believes that its future strength will depend in part on its
ability to expand sales of BPCS for the client/server environment. Many of the
Company's competitors currently offer applications products for client/server
systems, and the Company believes that many of its other competitors,
including certain large, well-established software companies, are actively
developing client/server-based products. As a result, competition (including
price competition) is likely to increase substantially, which could result in
price reductions and loss of market share. There can be no assurance that the
Company will be able to compete successfully with existing or new competitors
or that competition will not have a material adverse effect on the Company's
business.
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RAPID TECHNOLOGICAL CHANGE
The market for the Company's software product is characterized by rapid
technological advances, evolving industry standards in computer hardware and
software technology, changes in customer requirements and preferences, and
frequent new introductions and enhancements. The Company's future success will
depend upon its ability to continue to enhance its current product and to
develop and introduce new product functionality that keeps pace with
technological developments, satisfies increasingly sophisticated customer
requirements and achieves market acceptance. In particular, the Company must
continue to anticipate and respond adequately to advances in RDBMS software
and desktop computer operating systems such as Windows. There can be no
assurance that the Company will be successful in developing and marketing, on
a timely and cost-effective basis, fully functional product enhancements or
new product functionality that respond to technological advances by others, or
that its new product functionality will achieve market acceptance.
As a result of the complexities inherent in both the RDBMS and client/server
environments and the broad functionality and performance demanded by customers
for ERP products, major new product enhancements and new product functionality
can require long development and testing periods to achieve market acceptance.
In addition, software programs as complex as those offered by the Company may
contain undetected errors or "bugs" when first introduced or as new versions
are released that, despite rigorous testing by the Company, are discovered
only after products has been installed and used by customers. The Company has
on occasion experienced delays in the scheduled introduction of new and
enhanced product functionality. There can be no assurance that errors will not
be found in future releases of the Company's software, or that any such errors
will not impair the market acceptance of the product and adversely affect
operating results. Problems encountered by customers in installing and
implementing new releases or with performance of the Company's product can be
expected to occur, given the inherent complexities of its client/server based
product. To the extent that the customer, its third party integrator and/or
the Company are unable to adequately resolve such issues, it could have a
material adverse effect on the Company's business and operating results. In
this regard, in September 1996, the Company introduced the current release
(Version 6.01) of its Business Planning and Control System applications
product. Accordingly, SSA has only limited experience with fully implemented
operations installations of Version 6.01 at customer sites. Because of such
limited customer experience, and the inherent complexities of the
client/server based product, there can be no assurance that this release will
not require software modifications to satisfy performance requirements of
customers or to fix previously undetected errors. If customers were to
experience significant problems with the implementation and installation of
this release or are dissatisfied with product functionality or performance,
the Company's business, financial condition and results of operations could be
materially, adversely affected.
DEPENDENCE ON AS/400 USERS
At the same time that the Company has developed new versions of its BPCS
product for the client/server marketplace, the Company remains a leading
supplier of ERP applications for IBM AS/400 installations in the industrial
sector. In fiscal 1996, over 75% of the Company's revenue was derived from the
Company's installed base of AS/400 users. Therefore, even as the Company
continues to innovate and market versions of BPCS for the client/server
environment, a substantial portion of the Company's future revenues will be
derived from and dependent upon the continued widespread use of the AS/400 and
the continued support of the AS/400 by IBM. While the Company believes that
customers will continue to use and IBM will continue to support the AS/400
there can be no assurance of such continued use and/or support. The Company
will be required and intends to continue to devote substantial resources to
supporting its installed base of AS/400 customers and the version of BPCS used
by them. The Company believes that many AS/400 users may convert to
client/server activities. Although the Company believes it has an advantage in
assisting its installed AS/400 base in converting to Unix-based versions of
BPCS, there is no assurance that these customers will continue to use BPCS if
they implement client/server systems. The loss of a significant number of
AS/400 customers could have a material adverse impact on the Company's
business, operating results and financial condition. In addition, in order to
retain its AS/400 customers, the Company may be required to adapt its BPCS
product to any changes made in the AS/400
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operating system in the future. The Company's inability to adapt to future
changes in the AS/400 operating system, or delays in doing so, could have a
material adverse effect on the Company's business, operating results and
financial condition.
ENTRY INTO UNIX MARKET; HIGHLY COMPLEX SALES ENVIRONMENT
The Company has only recently developed and begun to market BPCS
client/server for Unix operating environments. The market for open systems,
client/server based applications differs in many respects from the market for
AS/400 based applications which historically had been the Company's exclusive
focus. Among other things, the Unix market is characterized by numerous
database vendors, numerous hardware vendors and a greater number of systems
integrators and consultants, all of whom can influence the purchase of
enterprise applications such as those marketed by the Company. There can be no
assurance that the Company's sales and marketing efforts will be successful in
this highly complex sales environment. The Company's inability to implement
successful sales and marketing efforts in the Unix market could have a
material adverse effect on the Company's business, operating results and
financial condition.
LAWSUITS
In January 1997, class action lawsuits were filed in state court in Illinois
and in the federal court in Chicago, Illinois against the Company and certain
of its officers. The federal actions allege damages to persons who purchased
the Company's Common Stock during the period August 22, 1994 through January
7, 1997 arising from alleged violations of the federal securities laws and
associated common laws. The state court action alleges damages to persons who
purchased the Company's Common Stock during the period November 21, 1994
through January 7, 1997 arising from alleged violations of the Illinois
securities laws and associated statutory and common law. The lawsuits name the
Company and several of its officers and directors as defendants, and alleges
violations of securities laws, fraud and negligence in connection with the
restatement of the Company's financial statements for the fiscal years ended
1994 and 1995. The complaints do not specify the amounts of damages sought.
Although the outcome of these proceedings cannot be determined with
certainty, the Company intends to defend the actions vigorously, and, in
consultation with its legal counsel, believes that the allegations are without
merit and that the final outcomes should not have a material adverse effect on
the Company's operations or financial position.
INTERNATIONAL OPERATIONS
The Company currently operates in over 50 countries. The Company's
operations are subject to risks inherent in international business activities,
including, in particular, general economic conditions in each country, overlap
of different tax structures, management of an organization spread over various
countries, exposure to currency fluctuations, unexpected changes in regulatory
requirements, compliance with a variety of foreign laws and regulations, and
longer accounts receivables payment cycles in certain countries. Other risks
associated with international operations include import and export licensing
requirements, trade restrictions and changes in tariff rates.
RELIANCE ON CERTAIN RELATIONSHIPS
In the Unix-based marketplace, the Company relies on a number of consulting
and systems integration firms to enhance its marketing, sales and customer
support efforts, particularly with respect to implementation and support of
its product as well as lead generation and assistance in the sales process. As
the Company continues to implement its strategy of focusing on the licensing
of its product in the Unix-based marketplace, the Company will become
increasingly dependent upon third party implementation providers for product
implementation, end user training and sales support. Although the Company
seeks to maintain close relationships with these firms, many such firms have
similar, and usually more established, relationships with the Company's
principal
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competitors. There can be no assurance that these third party service firms
will provide the level and quality of service required to meet the needs of
the Company's end users, nor can there be any assurance that such service
firms will recommend the Company's product to their clients when assisting
their clients in product selection decisions.
ABILITY TO ENFORCE THE COMPANY'S INTELLECTUAL PROPERTY RIGHTS
The Company relies on a combination of the protections provided under
applicable copyright and trade secret laws, as well as on confidentiality
procedures and licensing arrangements, to establish and protect its rights in
its software. Despite the Company's efforts, it may be possible for
unauthorized third parties to copy certain portions of the Company's product
or to reverse engineer or obtain and use information that the Company regards
as proprietary. In addition, the laws of certain countries do not protect the
Company's proprietary rights to the same extent as do the laws of the United
States. Accordingly, there can be no assurance that the Company will be able
to protect its proprietary software against unauthorized third party copying
or use, which could adversely affect the Company's competitive position.
CONTROL BY EXISTING STOCKHOLDER
Roger E. Covey, Chairman and Chief Executive Officer of the Company,
currently owns approximately 31.3% of the Company's outstanding Common Stock.
Accordingly, Mr. Covey may have the effective power to influence significantly
the outcome of matters submitted for stockholder action, including the
election of members of the Company's Board and the approval of significant
change in control transactions, and may be deemed to have control over the
management and affairs of the Company. This significant equity interest in the
Company may have the effect of making certain transactions more difficult
absent the support of Mr. Covey and may have the effect of delaying or
preventing a change in control of the Company.
VOLATILITY OF STOCK PRICE
The market prices for securities of technology companies have been volatile.
Announcements of technological innovations by the Company or its competitors,
developments concerning proprietary rights and economic or other external
factors may have a significant impact on the Company's business and on the
market price of the Common Stock. Fluctuations in financial performance from
period to period also may have a significant impact on the market price of the
Common Stock.
ANTI-TAKEOVER CONSIDERATIONS
The Company is subject to Section 203 of the Delaware General Corporation
Law which, subject to certain exceptions, prohibits a Delaware corporation
from engaging in any of a broad range of business combinations with an
"interested stockholder" for a period of three years following the date that
such stockholder became an interested stockholder. The Company has also
adopted a stockholders rights plan, which can have a significant anti-takeover
effect by inhibiting a potential offeror, the value of whose acquired shares
would be substantially diluted by the operation of the plan. A change of
control, as defined in the Company's principal credit facilities, constitutes
an event of default in such credit facilities. These provisions could serve to
impede or prevent a change of control or have a depressive effect on the price
of the Company's equity securities.
AVAILABLE INFORMATION
SSA is subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and, in accordance therewith,
files reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Reports, proxy and information
statements and other information filed by the Company with the Commission
pursuant to the informational requirements of the Exchange Act may be
inspected and copied at the public reference facilities maintained by the
Commission at
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450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at the
Commission's regional offices located at Seven World Trade Center, 13th Floor,
New York, New York 10048, and Northwestern Atrium Center, 500 West Madison
Street, 32nd Floor (Suite 1400), Chicago, Illinois 60661; and copies of such
material may be obtained from the Public Reference Section of the Commission,
Washington, D.C. 20549, at prescribed rates. Copies of reports, proxy and
information statements and other information are available on the Commission's
Web site at http://www.sec.gov.
This Prospectus constitutes a part of a Registration Statement on Form S-3
(the "Registration Statement") filed by the Company with the Commission under
the Securities Act of 1933, as amended (the "Securities Act"), with respect to
the Shares offered hereby. In accordance with the rules and regulations of the
Commission, this Prospectus omits certain of the information contained in the
Registration Statement. Reference is hereby made to the Registration Statement
and related exhibits for further information with respect to the Company and
the Company's Common Stock. Statements contained herein concerning the
provisions of any document are not necessarily complete and, in each instance,
reference is made to the copy of such document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference. The Registration
Statement, including the exhibits and schedules thereto, is also available on
the Commission's Web site at http://www.sec.gov.
INFORMATION INCORPORATED BY REFERENCE
The Company incorporates herein by reference the following documents it has
previously filed with the Commission (File No. 0-15322) pursuant to the
Exchange Act:
(a) the Company's Annual Report on Form 10-K for the fiscal year ended
October 31, 1996;
(b) the description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A, declared effective February
12, 1987; and
(c) the description of the Company's Common Stock Purchase Rights
contained in the Company's Registration Statement on Form 8-A, filed May
18, 1988.
All documents and reports subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering of the Shares shall be
deemed to be incorporated herein by reference and to be a part hereof from the
date of filing of such documents. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document that also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such 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 furnish without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon the written or
oral request of such person, a copy of any or all the documents incorporated
herein by reference, other than exhibits to such documents unless such
exhibits are specifically incorporated by reference in such documents, and any
other documents specifically identified herein as incorporated by reference
into the Registration Statement to which this Prospectus relates or into such
other documents. Requests should be addressed to: Investor Relations
Department, System Software Associates, Inc., 500 West Madison Street, 32nd
Floor, Chicago IL 60661, Telephone: (312) 641-2900.
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THE COMPANY
SSA is a leading provider of cost-effective business enterprise information
systems to the industrial sector worldwide. SSA's BPCS (Business Planning and
Control System) product provides business process re-engineering and
integration of an enterprise's operations, including multi-mode manufacturing
processes, supply chain management and global financial solutions. The BPCS
Client/Server solution delivers scaleability, interoperability and
reconfigurability in its comprehensive product suite to meet changing market
demands. The distributed object computing architecture of BPCS Client/Server
provides the benefits of next generation technology in conformity with
industry standards. The Company markets, sells and services its product to
intermediate and large size enterprises through its own worldwide sales
organization and a worldwide network of approximately 90 independent software
companies and major systems integrators.
The Company's executive offices are located at 500 West Madison Street, 32nd
Floor, Chicago, IL 60661. The Company's telephone number is (312) 641-2900.
SELLING STOCKHOLDER
The Company issued a total of 95,694 shares of its Common Stock on May 12,
1995 (prior to a 3 for 2 stock split), in exchange for all of the outstanding
common stock of Priority Systems, Inc., a Texas corporation and Knight
Enterprises, Inc., a Nevada corporation (collectively, the "Acquired
Companies"), which was privately owned by the Selling Stockholder. The
Acquired Companies formerly served as the Company's affiliate for the Dallas,
Texas region. Except with respect to his ownership of the Acquired Companies,
prior to May 12, 1995, the Selling Stockholder had no material relationship
with SSA or any of its predecessors or affiliates within the past three years.
The following table sets forth the name of the Selling Stockholder and the
number of shares of the Company's Common Stock owned by him. As of the date
hereof, all of such shares are being offered by the Selling Stockholder by
means of this Prospectus. The percentage of outstanding shares of the
Company's Common Stock held by the Selling Stockholder prior to and after the
offering to which this Prospectus relates represents less than one percent
(1%) of the outstanding shares of the Company's Common Stock.
<TABLE>
<CAPTION>
NUMBER OF
SHARES
SELLING STOCKHOLDER OFFERED (1)
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<S> <C>
Rick Knight................................................... 143,541
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(1) The shares to be sold shall include, in addition to the numbers
indicated, any additional shares of Common Stock of SSA that become
issuable in connection with the Shares by reason of any stock dividend,
stock split, recapitalization or other similar transaction effected
without the receipt of consideration that results in an increase in the
number of outstanding shares of the Company's Common Stock.
PLAN OF DISTRIBUTION AND OFFERING PRICE
The Shares may be sold from time to time by the Selling Stockholder, or by
his pledgees, donees, transferees or other successors in interest. Such sales
may be made on one or more exchanges or in the over-the-counter market, or
otherwise at prices and at terms then prevailing or at prices related to the
then current market price, or in negotiated transactions. The Shares may be
sold by one or more of the following: (a) a block trade in which the broker or
dealer so engaged will attempt to sell the Shares as agent but may purchase
and resell a portion of the block as principal to facilitate the transaction;
(b) purchases by a broker or dealer as principal and resale by such broker or
dealer for its account pursuant to this Prospectus; (c) an exchange
distribution in accordance with the rules of such exchange; and (d) ordinary
brokerage transactions and transactions in which the broker solicits
purchasers. In effecting sales, brokers or dealers engaged by the Selling
Stockholder may arrange for other broker or dealers to participate. Brokers or
dealers will receive commissions or discounts from the Selling Stockholder in
amounts to be negotiated prior to the sale. Such brokers or dealers and any
other participating brokers or
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dealers may be deemed to be "underwriters" within the meaning of the
Securities Act in connection with such sales. In addition, any securities
covered by this Prospectus which qualify for sale pursuant to Rule 144 may be
sold under Rule 144 rather than pursuant to this Prospectus.
The Company will pay the registration expenses incident to the offering and
sale of the Shares by the Selling Stockholder to the public. Such expenses
include legal and accounting expenses, filing fees payable to the Commission,
applicable state "blue sky" filing fees and printing expenses. The Company,
however, will not pay for any expenses, commissions or discounts of
underwriters, dealers or agents for the Selling Stockholder.
Any underwriters, brokers, dealers and agents who participate in any such
sale may also be customers of, engage in transactions with or perform services
for SSA or the Selling Stockholder in the ordinary course of business.
SSA Common Stock is currently traded on the Nasdaq National Market. The
public offering price for any Shares that are sold will be determined by the
price indicated on such system at the time such sale occurs, or at such price
as shall be determined through private negotiations between the buyer and the
Selling Stockholder, or his agent.
VALIDITY OF STOCK
The validity of the Shares will be passed upon for the Company by Sachnoff &
Weaver, Ltd., Chicago, Illinois ("S&W"). In October 1992, in consideration for
the continued and future services on the Company's Board of Directors of
William N. Weaver, Jr., the Company granted a stock option to S&W, of which
Mr. Weaver is a member. This option covers 33,750 shares, is exercisable at
$10.3889 per share (the fair market value of the Company's Common Stock on
October 12, 1992, the date the options were granted) and becomes exercisable
in equal portions on the five anniversaries of the grant date. In
consideration of the option grant, S&W agreed to waive its fees for Mr.
Weaver's time expended attending meetings of the Board of Directors. In
December 1994, the Company granted S&W additional options to purchase 22,500
shares. The later options are exercisable at $9.83 per share, the fair market
value of the Company's Common Stock on the date of grant, and become
exercisable in equal portions on the five anniversaries of the grant date. In
addition to his beneficial ownership of the shares subject to the foregoing
options, Mr. Weaver personally owns 300,000 shares of the Company's Common
Stock.
EXPERTS
The financial statements as of October 31, 1996 and for the year then ended
incorporated in this Prospectus by reference to the Annual Report on Form 10-K
of System Software Associates, Inc. for the year ended October 31, 1996 have
been so incorporated in reliance on the report of KPMG Peat Marwick LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
The financial statements as of October 31, 1995 and 1994 and for each of the
two fiscal years in the period ended October 31, 1995 incorporated in this
Prospectus have been so included in reliance on the report of Price Waterhouse
LLP, independent accountants, given on the authority of said firm as experts
in auditing and accounting.
9
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the issuance and distribution of the
securities being registered, other than underwriting compensation, are:
<TABLE>
<S> <C>
SEC Filing Fee for Registration Statement........................ $ 1,089
Accounting Fees.................................................. 5,000*
Legal Fees and Expenses.......................................... 5,000*
Miscellaneous.................................................... 911
-------
Total........................................................ $12,000
=======
</TABLE>
- --------
*Estimated Amount
All of the expenses listed above will be borne by the Registrant.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The By-laws of the Registrant provide that the Registrant shall indemnify
its officers and directors to the fullest extent permitted by applicable law.
Section 145 of the Delaware General Corporation Law (the "DGCL") provides, in
general, that each director and officer of a corporation may be indemnified
against expenses (including attorneys' fees, judgments, fines and amounts paid
in settlement) actually and reasonably incurred in connection with the defense
or settlement of any threatened, pending or completed legal proceedings in
which he is involved by reason of the fact that he is or was a director or
officer if he acted in good faith and in a manner that 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, if he had no reasonable cause to
believe that his conduct was unlawful. If the legal proceeding, however, is by
or in the right of the corporation, the director or officer may not be
indemnified in respect of any claim, issue or matter as to which he shall have
been adjudged to be liable for negligence or misconduct in the performance of
his duty to the company unless a court determines otherwise.
The Certificate of Incorporation of the Registrant, as amended to date,
provides that the personal liability of the directors of the Registrant shall
be eliminated to the fullest extent permitted by applicable law. The DGCL
permits a corporation's certificate of incorporation to provide that no
director of the corporation shall be personally liable to the corporation or
its stockholders for monetary damages for any breach of his fiduciary duty as
a director; provided, however, that such provision shall not apply to any
liability of a director (1) for any breach of a director's duty of loyalty to
the corporation or its stockholders, (2) for acts or omissions that are not in
good faith or involve intentional misconduct or a knowing violation of the
law, (3) under Section 174 of the DGCL or (4) for any transaction from which
the director derived an improper personal benefit.
ITEM 16. EXHIBITS.
(a) Exhibits:
<TABLE>
<S> <C>
4.1 Certificate of Incorporation, as amended to date(1)
4.2 By-Laws, as amended to date(2)
4.3 Rights Agreement Dated as of May 3, 1988(3)
5 Opinion of Sachnoff & Weaver, Ltd. regarding the legality of the securities being registered
23.1 Consent of Price Waterhouse LLP
23.2 Consent of KPMG Peat Marwick LLP
23.3 Consent of Sachnoff & Weaver, Ltd. (included in Exhibit 5)
24 Powers of Attorney (included on the Signature Page of this Registration Statement)
</TABLE>
II-1
<PAGE>
- --------
(1) Incorporated by reference from the Registrant's Form 10-K Annual Report
for the fiscal year ended October 31, 1987 (File No. 0-15322).
(2) Incorporated by reference from the Registrant's Form 10-K Annual Report
for the fiscal year ended October 31, 1989 (File No. 0-15322).
(3) Incorporated by reference from the Registrant's Form 8-K Current Report
filed on May 18, 1988 (File No. 0-15322).
ITEM 17. UNDERTAKINGS.
(a) 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;
(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 information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
with or furnished to the Commission 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.
(b) 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 Section 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.
(h) 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 and is, therefore, unenforceable. In the event that a claim for
the 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 and will be governed by the final adjudication of such issue.
II-2
<PAGE>
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 CHICAGO, STATE OF ILLINOIS, ON FEBRUARY 11, 1997.
System Software Associates, Inc.
/s/ Joseph J. Skadra
By___________________________________
Joseph J. Skadra, Vice President
and Chief Financial Officer
February 11, 1997
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Chief Executive Officer and February 11, 1997
____________________________________ Chairman of the Board of
Roger E. Covey Directors (Principal
Executive Officer)
/s/ Joseph J. Skadra Chief Financial Officer, February 11, 1997
____________________________________ Vice President--Finance
Joseph J. Skadra and Secretary (Principal
Financial and Accounting
Officer)
Director February , 1997
____________________________________
Andrew J. Filipowski
* Director February 11, 1997
____________________________________
John W. Puth
____________________________________ Director February , 1997
Dr. Willard Zangwill
* Director February 11, 1997
____________________________________
William N. Weaver, Jr.
</TABLE>
/s/ Joseph J. Skadra
*By: __________________________
Joseph J. Skadra
Attorney-in-fact
II-3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION OF DOCUMENT PAGE
------- ----------------------- ------------
<C> <S> <C>
4.1 Certificate of Incorporation, as amended to date (1)
4.2 By-Laws, as amended to date (2)
4.3 Rights Agreement Dated as of May 3, 1988 (3)
Opinion of Sachnoff & Weaver, Ltd. regarding the
5 legality of the securities being registered.............
23.1 Consent of Price Waterhouse LLP.........................
23.2 Consent of KPMG Peat Marwick LLP........................
Consent of Sachnoff & Weaver, Ltd. (included in Exhibit
23.3 5) --
Powers of Attorney (included on the Signature Page of
24 this Registration Statement) --
</TABLE>
- --------
(1) Incorporated by reference from the Registrant's Form 10-K Annual Report
for the fiscal year ended October 31, 1987 (File No. 0-15322).
(2) Incorporated by reference from the Registrant's Form 10-K Annual Report
for the fiscal year ended October 31, 1989 (File No. 0-15322).
(3) Incorporated by reference from the Registrant's Form 8-K Current Report
filed on May 18, 1988 (File No. 0-15322).
II-4
<PAGE>
EXHIBIT 5
(312) 207-1000
February 11, 1997
System Software Associates, Inc.
500 West Madison Street
32nd Floor
Chicago, Illinois 60661
Re: Post-Effective Amendment No. 1 to Registration Statement on Form S-3, No.
33-62207 ("Registration Statement")
Gentlemen and Ladies:
In connection with the proposed registration for sale of 143,541 shares of
Common Stock, $0.0033 par value (the "Common Stock"), by System Software
Associates, Inc. (the "Company"), covered by the above-referenced Registration
Statement, we have examined such documents and have reviewed such questions of
law as we have considered necessary and appropriate for the purposes of this
opinion. We have assumed the genuineness of all signatures, the authenticity
of all documents submitted to as originals, the conformity to original
documents of all the documents submitted to us as certified or photostatic
copies and the authenticity of the originals of such latter documents.
Based upon such examination, we advise you that, in our opinion:
(i) The Company had corporate authority to issue the shares of Common
Stock proposed to be offered as set forth in the Registration Statement.
(ii) The shares of Common Stock registered for resale as set forth in the
Registration Statement have been duly authorized and validly issued and are
fully paid and nonassessable, and will continue to be so when sold as set
forth in the Registration Statement.
We hereby consent to the filing of this opinion as an exhibit to the above-
mentioned Registration Statement and the reference to this firm under the
caption "Validity of Stock" in the Prospectus constituting a part of such
Registration Statement. In giving this consent, we do not hereby admit that we
are in the category of persons whose consent is required under Section 7 of
the Securities Act of 1933 or the rules and regulations of the Securities and
Exchange Commission.
Very truly yours,
/s/ Sachnoff & Weaver, Ltd.
-------------------------------------
Sachnoff & Weaver, Ltd.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report
dated January 7, 1997, except as to Notes 6, 7 and 11, which are as of January
29, 1997, appearing on page F-3 of System Software Associates, Inc. Annual
Report on Form 10-K for the year ended October 31, 1996. We also consent to
the reference to us under the heading "Experts" in such Prospectus.
/s/ Price Waterhouse LLP
- -------------------------------------
Price Waterhouse LLP
Chicago, Illinois
February 6, 1997
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report
dated January 7, 1997, except as to Notes 6, 7 and 11 which are as of January
29, 1997, appearing on page F-2 of System Software Associates, Inc. Annual
Report on Form 10-K for the year ended October 31, 1996. We also consent to
the reference to us under the heading "Experts" in such Prospectus.
/s/ KPMG Peat Marwick LLP
- -------------------------------------
KPMG Peat Marwick LLP
Chicago, Illinois
February 6, 1997
