<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 10-K/A
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended October 31, 1997
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
COMMISSION FILE NUMBER 0-15322
SYSTEM SOFTWARE ASSOCIATES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 36-3144515
-------- ----------
(STATE OR OTHER JURISDICTION (IRS EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
500 W. MADISON, 32ND FLOOR
CHICAGO, ILLINOIS 60661
----------------- -----
(ADDRESS OF PRINCIPAL EXECUTIVE (ZIP CODE)
OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (312) 258-6000
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
7% Convertible Subordinated Notes due 2002
Common Stock, par value $0.0033 per Share
(Title of class)
--------------
----------------------
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [_]
The aggregate market value of voting stock held by non-affiliates of the
registrant based upon the closing sale price of the stock as reported on the
Nasdaq National Market on January 22, 1998, was $286,429,516.
At January 22, 1998, 46,586,848 shares of the registrant's Common Stock were
outstanding.
================================================================================
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this item with respect to executive officers is
set forth in Part I of this report, as originally filed. Information regarding
directors is set forth below.
ROGER E. COVEY, age 43, founded the Company and since November 1, 1994 has
served as Chief Executive Officer and Chairman of the Board of the Company,
positions which he also held from its inception in October 1981 until August
1991, at which time he was elected as Vice-Chairman of the Board. From September
1, 1994 until October 31, 1994, he served as the Company's Vice President--
Research and Development. He holds a B.S. degree from the University of Illinois
and an M.B.A. and an M.A. in Chinese Art History, both from the University of
Chicago.
CASEY G. COWELL, age 45, has been a Director of the Company since
December 1997. Mr. Cowell is Vice Chairman of 3Com Corporation. Prior to its
merger with 3Com Corporation, Mr. Cowell served as President of U.S. Robotics
from 1978 until January 1997. Mr. Cowell was also Chairman of the Board, Chief
Executive Officer, and a Director of U.S. Robotics since 1978. Mr. Cowell
founded U.S. Robotics in 1976. Mr. Cowell also serves on the boards of PLATINUM
technology, inc., May & Speh, Northwestern Memorial Corporation, a parent
company of Northwestern Memorial Hospital, and as a trustee of the Illinois
Institute of Technology. Mr. Cowell holds a B.A. degree from the University of
Chicago.
ANDREW J. FILIPOWSKI, age 47, has been a Director of the Company since July
1996. Mr. Filipowski has been President and Chief Executive Officer of PLATINUM
technology, inc., a provider of enterprise infrastructure software products,
since that company's founding in April 1987. Mr. Filipowski was a founder of
DBMS, Inc., a software products and services company and served as its Chairman,
President and Chief Executive Officer from 1979 until March 1987.
JOHN W. PUTH, age 68, has been a Director of the Company since his
appointment in April 1988. Since December 1987, Mr. Puth has served as President
of J.W. Puth Associates, an industrial consulting firm. From January 1983
through December 1987, Mr. Puth was Chairman and President of Clevite
Industries, Inc., a manufacturer of industrial products. From October 1975 until
January 1983, Mr. Puth was President and Chief Executive Officer of Vapor
Corporation. Mr. Puth is a director of Allied Products Corporation, Brockway,
A.M. Castle & Co., L.B. Foster Company, Lindberg Corporation and USFreightways
Corporation, as well as several privately-held corporations. He holds a B.S.
degree from Lehigh University.
WILLIAM M. STUEK, age 55, was appointed President and Chief Operating
Officer of the Company on January 5, 1998. Prior to joining the Company, he
served in a variety of sales, marketing and operational management positions
with IBM Corporation. From 1996 through 1997, Mr. Stuek served as IBM's General
Manager of North American Operations, in which he oversaw all sales, marketing,
customer service/support, administrative operations, and information technology.
Before that, he was General Manager of North American Sales and spent three
years as General Manager of Product Sales for Europe, Middle East and Africa.
Mr. Stuek also served as Assistant General Manager of IBM's Software Division
and as General Manager of AS/400 Worldwide Marketing. Mr. Stuek holds a B.S.
degree from Colgate University.
WILLIAM N. WEAVER, JR., age 63, has been a Director of the Company since
December 1986 and its Assistant Secretary since March 1985. Mr. Weaver is a
member of the law firm of Sachnoff & Weaver, Ltd., an Illinois professional
corporation ("S&W"), which is counsel to the Company. Mr. Weaver has practiced
law in the State of Illinois since 1964 and serves as a director of
USFreightways Corporation, as well as several privately-held corporations. He
holds an A.B. degree from Oberlin College and a J.D. from John Marshall Law
School.
The Company's executive officers are appointed by, and serve at the discretion
of, the Board of Directors. All Directors hold office until the next annual
meeting of stockholders or until their successors are duly elected and
qualified.
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
MANAGEMENT COMPENSATION
The table below discloses the compensation awarded by the Company during
the Company's last three fiscal years to the Chief Executive Officer and to each
of the other two executive officers as of the end of fiscal 1997:
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long-term Compensation Awards
--------------------- ---------------------------------
Name and Principal Fiscal
Position Year Salary ($) Bonus ($) Securities Underlying Options (#)
------------------ ------ ---------- --------- ---------------------------------
<S> <C> <C> <C> <C>
Roger E. Covey, Chairman 1997 400,000 200,000 200,000
of the Board and Chief 1996 400,000 - 0 - - 0 -
Executive Officer 1995 342,917 127,000 150,000
Joseph J. Skadra, Vice 1997 237,000 57,000 - 0 -
President and Chief 1996 229,000 47,000 5,000
Financial Officer 1995 220,000 64,000 - 0 -
Riz Shakir, Executive Vice 1997 228,333 52,000 125,000
President of Research 1996 211,250 43,000 30,000
and Development
</TABLE>
- -----------------------
Option Grants in Fiscal 1997
The following table provides further information on individual stock option
grants made in fiscal 1997 to the named executive officers. The table does not
reflect as additional grants options canceled and immediately reissued at lower
exercise prices. See "Ten-Year Option Repricings" below. The exercise prices set
forth in the table are net of all repricings.
<TABLE>
<CAPTION>
Potential Realizable Value
Individual Grants at Assumed Annual Rates of
---------------------------------------------------------------------- Stock Price Appreciation(1)
% of Total ---------------------------
Number of Shares Options Granted Exercise
Underlying Options to Employees in Price Expiration
Name Granted (#)(2) Fiscal 1997 ($/Sh.) Date 5% ($) 10% ($)
- ---- -------------- ----------------- -------- ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Roger E. Covey 200,000 27.2% 7.81 06-13-07 982,333 2,489,426
Joseph J. Skadra - 0 - N.A. N.A. N.A. N.A. N.A.
Riz Shakir 20,000 2.7% 4.63 01-14-07 58,173 147,421
20,000 2.7% 4.63 04-10-07 58,173 147,421
85,000 11.6% 8.06 08-04-07 430,856 1,091,873
</TABLE>
- -----------------------
<PAGE>
(1) The potential realizable value columns of the table illustrate values that
might be realized upon exercise of the options immediately prior to their
expiration, assuming the Company's Common Stock appreciates at the
compounded rates specified over the term of the options. These numbers do
not take into account provisions of certain options providing for
termination of the option following termination of employment or
nontransferability of the options and do not make any provision for taxes
associated with exercise. Because actual gains will depend, among other
things, on future performance of the Common Stock, the amounts reflected in
this table may not necessarily be achieved. For the actual historical price
performance of the Company's Common Stock over the last five fiscal years,
see the comparative table below under the caption "Stockholder Return
Performance Presentation."
(2) Options granted become exercisable ratably on the first five anniversaries
of the grant date.
Aggregated Option Exercises in Fiscal 1997 and October 31, 1997 Option Values
The following table provides information on option exercises in fiscal 1997
by the named executive officers and the value of such officers' unexercised
stock options as of October 31, 1997.
<TABLE>
<CAPTION>
Number of Shares Underlying Value of Unexercised In-the-
Unexercised Options at Money Options at
Shares October 31, 1997 (#) October 31, 1997 ($)
Acquired on Value -------------------- --------------------
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Roger E. Covey -0- N.A. -0- 2,000 -0- 787,400
Joseph J. Skadra -0- N.A. 19,000 22,000 135,375 156,750
Riz Shakir -0- N.A. 30,002 169,998 213,764 919,006
</TABLE>
Compensation of Directors
The Company does not pay directors any cash consideration for serving on
the Board of Directors. In recognition of their continued board service, the
Company on December 16, 1994, adopted a policy pursuant to which every five
years, all non-employee directors shall be awarded an option under the Company's
existing stock option plans to purchase 22,500 shares, exercisable at the fair
market value of the Company's stock on the date of grant, such options to become
exercisable in equal portions on the first five anniversaries of the grant date.
The first award under this plan was granted on December 16, 1994, and is
exercisable at $4.63 per share. Pursuant to the same policy, Mr. Cowell was
awarded options to purchase 22,500 shares and an additional 13,500 shares
concurrently with his appointment to the Board of Directors in December of 1997.
These options vest in five equal installments on the first five anniversaries of
their appointment, and are exercisable at $9.69 per share, the fair market value
of the Company's stock on the date of grant. In June of 1997, Messrs.
Filipowski and Puth and S&W were awarded options to purchase 18,000, 36,000 and
36,000 shares, respectively at $7.81, the fair market value of the Company's
stock on the date of the grant.
<PAGE>
In consideration of this and earlier option grants, S&W agreed to waive its
fees for Mr. Weaver's time expended attending meetings of the Board of
Directors. Accordingly, neither Mr. Weaver nor S&W received any cash
compensation in consideration of Mr. Weaver's services as a director in fiscal
1997.
Employment Contracts
William M. Stuek, the Company's (President and) Chief Operating Officer,
was hired on January 5, 1998 for a term of five years. The terms of his
engagement are set forth in an employment agreement that includes the following:
a base salary of $500,000, bonuses of up to $300,000 annually if the Company
achieves specified quarterly and annual earnings targets and other management
objectives, options to purchase 300,000 shares of Common Stock and otherwise in
accordance with the term of the Company's Long-Term Incentive Plan, vesting over
five years, an engagement bonus of $1,583,250 and a one-time bonus of $5,000,000
if the Company's common stock equal or exceeds. The employment agreement also is
a non-competition and confidential clause which are to apply throughout Mr.
Stuek's employment and for a period of one year thereafter.
Joseph J. Skadra, the Company's Chief Financial Officer, was hired August
12, 1994. The terms of his engagement include the following: a base salary of
$220,000 annually; bonuses of up to $80,000, in the first year, to be awarded if
the Company achieves quarterly and annual earnings targets and if Mr. Skadra
achieves specified personal management objectives; a bonus upon hiring of
$40,000; and options to purchase 45,000 shares of Common Stock, vesting over
five years, If all of the Company's Common Stock is acquired and Mr. Skadra does
not become Chief Financial Officer of the acquiring firm, then 18,000 of the
stock options will immediately vest, if they have not already.
Riz Shakir, the Company's Executive Vice President of Research and
Development, was hired June 1, 1994 and was appointed to his current position on
November 1, 1996. The terms of his engagement include the following: a base
salary of $180,000 annually; bonuses of $70,000, in the first year, to be
awarded if the Company achieves quarterly and annual earnings targets and if Mr.
Shakir achieves specified personal management objectives; a bonus upon hiring of
$50,000; and options to purchase 30,000 shares of Common Stock, vesting over
five years.
Ten-Year Option Repricings
The following table provides certain information on the repricing during
fiscal 1996 and 1997 of options held by certain of the executive officers. No
options had been repriced prior to fiscal 1996. Further explanation concerning
these repricings is included in the Report on Executive Compensation of the
Compensation Committee of the Board of Directors, below.
<TABLE>
<CAPTION>
Number of
Securities Market Price Length of Original
Underlying of Stock at Exercise Price Option Term
Options Time of at Time of New Exercise Remaining at Date
Repriced or Repricing or Repricing or Price of Repricing or
Name Date Amended (#) Amendment ($) Amendment ($) ($) Amendment
---- ---- ----------- ------------- -------------- ------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
Roger E. Covey N.A. 0 N.A. N.A. N.A. N.A.
N.A. 0 N.A. N.A. N.A. N.A.
N.A. 0 N.A. N.A. N.A. N.A.
N.A. 0 N.A. N.A. N.A. N.A.
Joseph J. Skadra 08-26-96 5,000 $9.81 $16.13 $9.81 9 years, 9 months
03/27/97 36,000 7.50 9.83 7.50 7 years, 5 months
03/27/97 5,000 6.50 9.81 7.50 9 years, 2 months
03/31/97 36,000 5.81 7.50 5.81 7 years, 5 months
03/31/97 5,000 5.81 7.50 5.81 9 years, 2 months
04-10-97 36,000 4.63 9.83 4.63 7 years, 4 months
04-10-97 5,000 4.63 9.81 4.63 9 years, 1 month
Riz Shakir 06/07/96 30,000 16.13 24.08 16.13 9 years, 5 months
08/26/96 30,000 9.81 16.13 9.81 9 years, 3 months
08/26/96 15,000 9.81 18.08 9.81 9 years, 6 months
03/27/97 30,000 7.50 9.83 7.50 7 years, 2 months
03/27/97 15,000 7.50 9.81 7.50 8 years
03/27/97 30,000 7.50 9.81 7.50 8 years, 8 months
03/27/97 20,000 7.50 11.50 7.50 9 years, 10 months
03/31/97 30,000 5.81 7.50 5.81 7 years, 2 months
03/31/97 15,000 5.81 7.50 5.81 8 years
03/31/97 30,000 5.81 7.50 5.81 8 years, 8 months
03/31/97 20,000 5.81 7.50 5.81 9 years, 10 months
04/10/97 30,000 4.63 5.81 4.63 7 years, 1 month
04/10/97 15,000 4.63 5.81 4.63 7 years, 11 months
04/10/97 30,000 4.63 5.81 4.63 8 years, 7 months
04/10/97 20,000 4.63 5.81 4.63 9 years, 9 months
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Riz Shakir 08-26-96 30,000 $9.81 $24.08 $9.81 9 years, 3 months
04-10-97 30,000 4.63 9.83 4.63 7 years, 1 month
04-10-97 15,000 4.63 9.81 4.63 7 years, 11 months
04-10-97 30,000 4.63 9.81 4.63 8 years, 7 months
04-10-97 20,000 4.63 11.5 4.63 9 years, 9 months
</TABLE>
Report on Executive Compensation of the Compensation Committee of the Board of
Directors
The Compensation Committee of the Company's Board of Directors is
responsible for implementing specific executive compensation plans. The Company
operates in an industry that is highly competitive. The Company believes that
its ability to maintain and improve its competitive position is dependent on its
ability to attract highly qualified managerial personnel. These personnel are
customarily sought from companies much larger and with greater financial
resources than the Company, and the Company believes that its ability to attract
such personnel is enhanced by the Company's emphasis on significant short-term
and long-term performance incentives. The Company accordingly operates in
accordance with the following executive compensation philosophy:
1. A significant portion of annual cash compensation should be determined
by quantitative performance measures.
For SSA executives, the performance-dependent portion of annual cash
compensation approximates 40% of base cash compensation. These quantitative
performance measures are tied directly to the SSA annual business plan. A
portion is based on quarterly earnings per share and another portion is based on
annual earnings per share. In addition, a variety of other quantitative measures
besides earnings per share are included in determining the bonus and future base
compensation for each executive. These other measures vary from executive to
executive depending on the strategic needs of the business, and tend to be
directly related to the executive's duties and the achievements of the specific
business unit for which the executive is responsible. The components are
reviewed and adjusted by the Compensation Committee on an annual basis. Based on
the Company's hiring experience and discussions with executive recruiting firms,
the Company believes that base cash compensation for key employees (which
approximates 70% of annual cash compensation) is at an industry competitive
level.
2. Compensation should provide incentives for both short-term and, more
importantly, for long-term performance.
Short-term performance is incentivized by the annual performance-determined
compensation mentioned above. Long-term performance is incentivized by the use
of stock options. Typically, options granted vest over a five-year period, which
is an appropriate long-term performance period. The Company's experience is that
it has no control over its short- or medium-term stock price, but believes that
over the long term the stock price should reflect growth of the Company's
earnings. The size of option grants is determined by reference to all the facts
and circumstances relating to the executive's compensation. These include,
without limitation, the executive's base salary, the cash bonuses earned and
potentially available, the size of all past option grants to the executive, the
timing of such prior grants, the remaining unvested portion of past grants, the
total shares subject to outstanding options held by all key employees and the
total remaining shares available for future option grants.
<PAGE>
3. The SSA standard for executive recruitment is to attempt to find and
recruit the best person in the world for a given executive position.
The compensation of Roger E. Covey, the Company's Chairman and Chief
Executive Officer, for services he rendered during fiscal 1997 was determined
pursuant to a compensation program adopted by the Committee in December 1994,
shortly after Mr. Covey resumed the position of Chairman and Chief Executive
Officer. At that time, the Committee reviewed the compensation packages of the
chief executives of comparable publicly-traded software companies, some of which
the Committee believes are included in the NASDAQ CDP index used in the stock
price performance chart below, as well as the compensation of the Company's
immediate past Chairman, President and Chief Executive Officer. Based on the
review of comparable and historical compensation levels, the Company's operating
plan for fiscal 1995, and the services rendered and to be rendered by Mr. Covey,
the Committee adopted a compensation program consisting of base salary, bonus
and incentive and non-qualified options to purchase 150,000 shares of the
Company's Common Stock, which options vest over a five year period following
their grant. In April of 1997, Mr. Covey surrendered to the Company his option
to purchase 200,000 shares of the Company's Common Stock in order to supply the
Company's option plan pool with additional shares in order to attract and retain
key personnel. Subsequently in June of 1997, Mr. Covey was granted an option to
purchase 200,000 shares to become exercisable at $7.81 per share, the Company's
fair market value on the reissuance date. In addition to the base salary and
stock options discussed above, Mr. Covey's compensation program provided that he
would be awarded bonuses in specified amounts if the Company achieved certain
quarterly and annual per-share earnings targets, product release targets and
other quantitative measures. In fiscal 1997, Mr. Covey received no raise in base
salary from fiscal 1996, and was awarded a $200,000 bonus based on Mr. Covey's
efforts in the Company's public offering of September 1997.
On three occasions in Fiscal 1997, the Board determined to reprice the
outstanding stock options of holders. The software industry is extremely
competitive and stock options are the major long-term compensation tool used to
attract, retain, motivate and reward key employees. During the second quarter of
Fiscal 1997 the Company's stock price declined very sharply. Since there was no
reasonable expectation that the options would have the desired effect, the
Compensation Committee, in consultation with the Chief Executive Officer
repriced the outstanding stock options of holders three times to the Company's
fair market value on the given repricing date: (1) on March 27, 1997, options
having an exercise price at or above $7.50 were repriced to become exercisable
at $7.50 per share; (2) on March 31, 1997, options having an exercise price at
or above $5.81 were repriced to become exercisable at $5.81 per share; and (3)
on April 10, 1997, options having an exercise price at or above $4.63 were
repriced to become exercisable at $4.63 per share.
The foregoing report has been furnished by Messrs. Filipowski and Puth and
Weaver, who currently constitute the Compensation Committee.
Compensation Committee Interlocks and Insider Participation
During fiscal 1997, the Compensation Committee of the Board of Directors
consisted of Andrew J. Filipowski , John W. Puth and William N. Weaver. None
of these persons was a current or former officer or employee of the Company or
any of its subsidiaries. Mr. Weaver is a member of S&W, which provides legal
services to the Company. See "Certain Relationships and Related Transactions."
<PAGE>
STOCKHOLDER RETURN PERFORMANCE PRESENTATION
The following graph presents a comparison of the cumulative total
stockholder return on the Company's Common Stock since October 31, 1992 with the
cumulative total return of the NASDAQ Computer and Data Processing Index
("NASDAQ CDP Index") and the Standard and Poor's 500 Composite Index.
Note: The stock price performance shown below is not necessarily indicative of
future price performance.
Comparison of Five-Year Cumulative Total Return Among
System Software Associates, Inc., NASDAQ CDP Index, and S & P 500
<TABLE>
<CAPTION>
Measurement Period SYSTEM SOFTWARE S&P NASDAQ CDP
(Fiscal Year Covered) ASSOCIATES, INC. 500 INDEX INDEX
- --------------------- ---------------- --------- ----------
<S> <C> <C> <C>
Measurement Pt-
10/31/92 $100 $100 $100
FYE 10/31/93 $100 $112 $115
FYE 10/31/94 $ 87 $119 $135
FYE 10/31/95 $217 $151 $217
FYE 10/31/96 $124 $187 $238
FYE 10/31/97 $125 $247 $321
</TABLE>
Assumes $100 invested on October 31, 1992 in System Software Associates, Inc.
Common Stock, NASDAQ CDP Index and S & P 500 Index.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of February 27, 1998 with
respect to the beneficial ownership of the Company's outstanding Common Stock by
each stockholder known by the Company to be the beneficial owner of more than 5%
of its Common Stock, each director, each executive officer discussed under
"Management Compensation" below, and all the directors and officers as a group.
Except as otherwise indicated, the stockholders have sole voting and investment
power with respect to shares beneficially owned by them.
<TABLE>
<CAPTION>
Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class
------------------- -------------------- ---------
<S> <C> <C>
Roger E. Covey.......................................... 13,124,750 (2) 31.1%
System Software Associates
500 W. Madison Street, 32nd Floor
Chicago, Illinois 60661
Gardner Lewis Asset Management, L.P..................... 4,213,124 (3) 9.86%
285 Wilmington, W. Chester Pike
Chadds Ford, PA 19317
Hambrecht & Quist Group................................. 3,393,452 (5) 6.7%
One Bush Street
San Francisco, CA 94104
FMR Corp. .............................................. 3,657,942 (4) 8.40%
82 Devonshire Street
Boston, MA 02109
Massachusetts Financial Services Company................ 2,423,663 (6) 5.7%
500 Boylston Street
Boston, MA 02116
William N. Weaver, Jr................................... 347,250 (7) *
John W. Puth............................................ 108,375 (1)(8) *
Riz Shakir.............................................. 47,002 *
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Name and Address Amount and Nature of Beneficial Percent
of Beneficial Owner Ownership of Class
------------------- ------------------------------- --------
<S> <C> <C>
Andrew J. Filipowski.................................... 3,000 *
Joseph J. Skadra........................................ 0 *
Casey G. Cowel.......................................... 0 *
All Officers and Directors as a Group (seven persons)... [13,913,682] [(1)(2)(7)(8)] [32.5%]
</TABLE>
- --------------------------------
* Less than 1%.
(1) Includes options to acquire shares, exercisable within 60 days of February
27, 1998, as follows: Mr. Filipowski 3,000; Mr. Puth 47,250; and Mr. Shakir
47,002 shares.
(2) Includes 1,000,000 shares held by the Teng Research Foundation, of which
Mr. Covey is a Director.
(3) According to a Report on the SEC's Schedule 13G filed for fiscal 1997,
Gardner Lewis Asset Management has sole dispositive power for all 4,213,124
listed shares, and exercises sole voting power over 3,831,325 shares and
shared voting power over 48,600 of such shares.
(4) According to a Report on the SEC's Schedule 13G filed for fiscal 1997, FMR
Corp. has shared dispositive power over 3,657,942 shares and shared voting
power over 3,657,942 shares.
(5) According to a Report on the SEC's Schedule 13G filed for fiscal 1997,
Hambrecht & Quist Group has shared dispositive power over 3,393,452 and
shared voting power over 3,393,452 shares.
(6) According to a Report on the SEC's Schedule 13G filed for fiscal 1997,
Massachusetts Financial Services Company has sole dispositive power over
2,423,663 shares and sole voting power over 2,423,663 shares.
(7) Includes 47,250 unissued shares of the Company's Common Stock, subject to a
currently exercisable option held by Sachnoff & Weaver, Ltd., of which Mr.
Weaver is a member. Mr. Weaver disclaims beneficial ownership of all but
his pro rata portion of the shares covered by the option.
(8) Includes 5,000 shares held by a family partnership, of which Mr. Puth is a
general partner.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
William N. Weaver, Jr., a member of the Board of Directors, is a member of
the law firm of Sachnoff & Weaver, Ltd., an Illinois professional corporation.
Sachnoff & Weaver, Ltd. has acted and continues to act as counsel to the Company
with regard to certain matters and has received legal fees for services rendered
in connection therewith.
Joseph J. Skadra, the Company's Chief Executive Officer, has borrowed funds
from the Company commencing July 10, 1996. Amounts borrowed are represented by a
promissory note, and bear interest at 8.25% per annum. Mr. Skadra borrowed the
amounts for personal reasons. As of February 27, 1998, the amount owing,
including accrued interest, is $220,500, which constitutes the largest amount
which has been outstanding under such arrangements. Repayment of all amounts of
principal is due January 21, 2000. Interest is payable monthly in arrears.
<PAGE>
SIGNATURES
<PAGE>
Pursuant to the requirements of Section 13 or 15(d) of the Securities Act
of 1934, as amended, the registrant has caused this amendment to report to be
signed on its behalf by the undersigned, thereunto duly authorized.
SYSTEM SOFTWARE ASSOCIATES, INC.
March 2, 1998 /s/ JOSEPH J. SKADRA
-----------------------
Joseph J. Skadra, Vice President
and Chief Financial Officer
