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As filed with the Securities and Exchange Commission on April 26, 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
under
The Securities Act of 1933
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PLATINUM technology International, inc.
(Exact name of registrant as specified in its charter)
Delaware 36-3509662
(State or other jurisdiction (I.R.S. Employer Identification No.)
ofincorporation or organization)
PLATINUM technology, inc.
(Exact name of registrant as specified in its charter)
Delaware 36-4264882
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
PLATINUM technology IP, inc.
(Exact name of registrant as specified in its charter)
Delaware 36-4264886
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
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1815 South Meyers Road, Oakbrook Terrace, Illinois 60181, (630) 620-5000
(Address, including zip code, and telephone number, including area code, of
registrants' principal executive offices)
Larry S. Freedman, Esq., PLATINUM technology International, inc.
1815 South Meyers Road, Oakbrook Terrace, Illinois 60181, (630) 620-5000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
With copies to:
Matthew S. Brown, Esq., Mark D. Wood, Esq., Katten Muchin & Zavis, 525 West
Monroe Street, Suite 1600,
Chicago, Illinois 60661, (312) 902-5200
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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 filed 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. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
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Proposed
Proposed Maximum
Amount Maximum Aggregate Amount Of
Title of Each Class of To Be Offering Price Offering Price Registration
Securities Being Registered Registered Per Share (1) (1) Fee
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<S> <C> <C> <C> <C>
Convertible Subordinated Notes $56,750,000 100% $56,750,000 $15,777
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Common Stock, $.001 par value (2) 1,574,093(3) -- -- --
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(1) Estimated solely for purposes of calculating the registration fee.
(2) Includes associated rights to purchase 1/100 of a share of Series A
preferred stock, par value $.01 per share, of PLATINUM technology
International, inc. Such rights initially attached to and trade with the
common stock. The value attributable to such rights, if any, is reflected
in the market price of the common stock.
(3) Such number represents the number of shares of common stock initially
issuable upon conversion of the notes registered hereby and, pursuant to
Rule 416 under the Securities Act of 1933, as amended, such indeterminate
number of shares of common stock as may be issued from time to time upon
conversion of the notes by reason of adjustment of the conversion price
under certain circumstances outlined in the Prospectus. Pursuant to Rule
457(i), no registration fee is required for these shares.
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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 Section 8(a), may
determine.
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<PAGE>
PROSPECTUS
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PLATINUM technology International, inc.
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$56,750,000
6.25% Convertible Subordinated Notes due 2002
and Shares of Common Stock
Issuable Upon Conversion of the Notes
This prospectus relates to the offer and sale from time to time by the
selling securityholders named in this prospectus of $56,750,000 in aggregate
principal amount of the 6.25% convertible subordinated notes due 2002 issued by
PLATINUM technology International, inc. Our wholly-owned subsidiaries PLATINUM
technology IP, inc. and PLATINUM technology, inc. are co-obligors on the notes.
This prospectus also relates to the shares of PLATINUM technology International
common stock which may be issued upon conversion of the notes.
Interest on the notes is payable on June 15 and December 15 of each year.
The notes will mature on December 15, 2002. The notes are convertible into our
common stock at any time prior to close of business on the maturity date,
unless we have previously redeemed or repurchased the notes. The initial
conversion rate is $36.0525 per share, or approximately 27.74 shares per $1,000
principal amount of notes.
The notes are designated for trading on The PortalSM Market. Notes sold
pursuant to this prospectus will not remain eligible for trading on The Portal
Market. Our common stock is traded on the Nasdaq National Market under the
symbol "PLAT." The last reported sale price of our common stock on the Nasdaq
National Market on April 23, 1999 was $25.375 per share.
On March 29, 1999, we entered into a merger agreement with Computer
Associates International, Inc. and a wholly-owned subsidiary of Computer
Associates. Subject to certain conditions, the subsidiary will purchase for
$29.25 per share in cash all outstanding shares of our common stock tendered by
our stockholders and not withdrawn. Following the completion of the tender
offer and subject to certain conditions, the subsidiary will merge into us, and
we will become a wholly-owned subsidiary of Computer Associates. Each note
holder will have the right to require us to repurchase all or some of their
notes if the tender offer is completed. In addition, if the merger is
consummated, each note will be convertible only into cash.
You should carefully consider the risks discussed under "Risk Factors"
beginning on page 1 of this prospectus before you invest in the notes or the
shares of our common stock.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or 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 , 1999
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You should only rely on the information contained or incorporated by
reference in this prospectus. We have not authorized any other person to
provide you with different information. If anyone provides you with different
or inconsistent information, you should not rely on it. The distribution of
this prospectus and the offering of the notes and shares in certain
jurisdictions may be restricted by law. You should inform yourself about and
observe any such restrictions. The selling securityholders named in this
prospectus are not making an offer to sell these securities in any jurisdiction
where the offer or sale is not permitted. You should assume that the
information in this prospectus is accurate as of the date on the front cover of
this prospectus only. Our business, financial condition, results of operations
and prospects may have changed since that date.
TABLE OF CONTENTS
<TABLE>
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Page
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<S> <C>
Where You Find May More Information........................................ iii
Risk Factors............................................................... 1
Special Note on Forward-Looking Statements................................. 6
PLATINUM................................................................... 8
The Computer Associates Tender Offer and Merger............................ 8
Use of Proceeds............................................................ 10
Ratio of Earnings to Fixed Charges......................................... 10
Selling Securityholders.................................................... 11
Description of the Notes................................................... 13
Certain Federal Tax Considerations......................................... 28
Plan of Distribution....................................................... 35
Legal Matters.............................................................. 36
Experts.................................................................... 36
</TABLE>
DB2 and MVS are trademarks, and IBM is a registered trademark, of
International Business Machines Corporation. This prospectus also includes
product names and other trade names and trademarks of us, our subsidiaries and
other companies.
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WHERE YOU MAY FIND MORE INFORMATION
We are subject to the informational requirements of the Securities Exchange
Act of 1934 and file reports and other information with the SEC. You may read
and copy such reports and other information at the following SEC public
reference rooms:
450 Fifth Street, N.W. Seven World Trade Center Citicorp Center
Judiciary Plaza Suite 1300 500 West Madison
Room 1024 New York, New York 10048 Street
Washington, D.C. 20549 Suite 1400
Chicago, Illinois
60661
You may obtain information on the operation of the SEC public reference
rooms by calling the SEC at
1-800-SEC-0330. Our SEC filings are also available from the SEC's Website at
http://www.sec.gov. You may also read and copy our SEC filings at the offices
of The Nasdaq Stock Market, 1735 K Street, N.W., Washington, D.C. 20006.
This prospectus is part of a registration statement on Form S-3 which we
filed with the SEC. This prospectus does not contain all of the information
included in the registration statement. The SEC allows us to "incorporate by
reference" information into this prospectus, which means that we can disclose
important information to you by referring you to another document that we
filed separately with the SEC. The information in any document incorporated by
reference is considered part of this prospectus, except for any information
superseded by information in this prospectus or in any subsequently filed
document which is also incorporated by reference. The information in documents
that we file later with the SEC will automatically update and supersede the
information in this prospectus.
We have filed the following documents with the SEC which are incorporated
by reference into this prospectus:
. Our Annual Report on Form 10-K for the year ended December 31, 1998;
. Our Current Reports on Form 8-K dated January 19, 1999, February 10,
1999, February 23, 1999, February 26, 1999 and April 5, 1999;
. The description of our common stock contained in our Registration
Statement on Form 8-A filed March 7, 1991 pursuant to Section 12 of the
Exchange Act and all amendments and reports filed to update the
description; and
. The description of the preferred stock purchase rights contained in our
Registration Statement on Form 8-A filed December 26, 1995 pursuant to
Section 12 of the Exchange Act and all amendments and reports filed to
update the description.
This prospectus will also incorporate by reference any of our future SEC
filings under Sections 13(a), 1(c), 14 or 15(d) of the Securities Exchange Act
of 1934. The documents incorporated by reference are available through the SEC
or from us upon written or telephone request to our principal executive
offices: PLATINUM technology International, inc., 1815 South Meyers Road,
Oakbrook Terrace, Illinois 60181, Attention: Secretary (telephone: (630) 620-
5000).
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RISK FACTORS
In addition to the other information included and incorporated by reference
in this prospectus, you should consider carefully the following factors before
you invest in the notes or shares of our common stock.
We May Suffer Serious Adverse Consequences if the Computer Associates Tender
Offer and Merger Are Not Consummated
The Computer Associates tender offer and merger discussed on the cover page
of this prospectus are subject to certain conditions described in the merger
agreement. These include (1) a condition that at least a majority of all
outstanding shares of our common stock are tendered and not withdrawn, and (2)
the expiration or termination of the applicable antitrust waiting period.
Therefore, the tender offer and merger may not be consummated. If these
transactions are not consummated, the notes will continue to be convertible
into our common stock. Further, we will not be required to repurchase the
notes. See "The Computer Associates Tender Offer and Merger."
We believe that our business, financial condition, liquidity and results of
operations have been materially adversely affected by the announcement of the
transactions and would be further materially adversely affected if these
transactions are not completed. In particular, we believe that our
relationships with our customers and our employees would be seriously damaged.
Also, the merger agreement imposes extremely tight restrictions on our ability
to take various actions and to conduct our business without Computer
Associates' consent. These restrictions could have a severe detrimental effect
on our business.
Additionally, on March 29, 1999, the date of the public announcement of
these transactions, the trading price of our common stock on the Nasdaq
National Market rose to $24.0625 at the close of trading for the day, from a
$9.875 closing price for the immediately prior trading day. Since that date,
our common stock has closed at prices ranging from $23.9375 to $25.6562. We
would expect this price to drop precipitously if we announced that the
transactions would not be consummated. See "Volatility of Stock Price."
Our Ability to Satisfy Future Debt Obligations Could Become Impaired by
Continued Net Losses
We have experienced annual net losses from continuing operations since 1994.
Merger costs and charges for acquired in-process technology, as well as
expenses related to the integration of acquired businesses contributed
significantly to the losses for these years. Our future operating results will
depend upon a number of business factors, as well as general economic
conditions.
If we continue to incur losses in the future, our ability to pay interest
on, or ultimately pay the principal amount of, our indebtedness, including the
notes covered by this prospectus, could become impaired. Computer Associates
will not be required to assume, guarantee or become a co-obligor on the notes.
If we do not meet our cash requirements out of cash flow from operations and
available borrowings, we may not be able to obtain alternative financing or may
not be permitted to do so under the terms of our existing financing
arrangements. If we do not arrange for sufficient financing, our ability to
respond to changing business and economic conditions, to make future
acquisitions, to absorb adverse operating results or to fund capital
expenditures or increased working capital requirements may be adversely
affected. We could also become more vulnerable to industry downturns and
competitive pressures.
The Notes Are Subordinated to Our Senior Indebtedness and Other Subsidiary
Liabilities
The notes are general, unsecured obligations of PLATINUM technology
International, PLATINUM technology and PLATINUM technology IP. They are
subordinated in right of payment to our existing and future senior
indebtedness. Although, to date, we have not incurred a substantial amount of
senior indebtedness, the indenture for the notes does not restrict our
incurrence of senior indebtedness or other indebtedness by us or our
subsidiaries. Under the indenture, generally, we may not repurchase, redeem,
retire or make any payments on the notes if we have a payment default on any
senior indebtedness, unless the default has been cured or waived, or if we have
defaulted in other respects.
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The notes are effectively subordinated to all liabilities including trade
payables, of our subsidiaries other than PLATINUM technology and PLATINUM
technology IP. These other subsidiaries own certain principal assets. If we
default on any payment obligations on the notes, trade creditors of these
subsidiaries would have a senior claim to these assets as compared to holders
of the notes. As of March 31, 1999, we had approximately $37.9 million of
senior indebtedness and our subsidiaries, other than PLATINUM technology and
PLATINUM technology IP, had over $161.8 million of trade payables and accrued
liabilities, excluding intercompany liabilities.
We conduct a significant portion of our operations through foreign
subsidiaries. Accordingly, we may from time to time be dependent on our ability
to obtain funds from these foreign subsidiaries in order to service our
indebtedness, including the notes. Our foreign subsidiaries may face
governmental and other restrictions on their ability to transfer funds to us
and may incur costs in connection with any such transfers. We anticipate that,
from time to time, we and our subsidiaries will incur additional indebtedness
and liabilities, including senior indebtedness.
We Must Respond to Rapid Changes in Technology and Customer Preferences
We expect the market for products to continue to be subject to frequent and
rapid changes in technology and customer preferences. The emergence of new
product technologies and industry standards could cause our existing products
to become obsolete and unmarketable. Our growth and future financial
performance will depend upon our ability to develop and introduce new products
and enhance existing products to accommodate the latest technological advances
and customer requirements. If we fail to anticipate or adequately respond in a
timely fashion to changes in technology and customer preferences, our business,
financial condition or results of operations could be materially adversely
affected. Additionally, our future growth and financial performance will be
adversely affected if:
. New products developed by us are not accepted in the marketplace;
. Other software vendors develop and market products which are superior to
our products and gain greater acceptance in the marketplace; or
. Customers delay purchases in anticipation of technological changes.
Our Business Could Be Adversely Affected if Demand for Mainframe Products
Decreases
We derive a significant percentage of revenues from products for mainframe
computers and believe that mainframes will continue to be an integral part of
organizations' open systems IT environments. However, there has been debate in
the marketplace regarding the future role of mainframe computers. Although we
now derive a majority of our revenues from non-mainframe products and services,
if there were a decline in utilization of mainframe computers, our business,
financial condition and results of operations could be materially adversely
affected.
Our Acquisition Strategy Involves Numerous Risks and Challenges
We have grown largely through the acquisition of businesses and
technologies. Since mid-1994, we have acquired 48 businesses and 31
technologies. We believe that our future growth may depend, in part, upon the
continued success of this acquisition strategy. In the future, we may not be
able to successfully identify, acquire on favorable terms or integrate suitable
businesses or technologies. We may also face increased competition for
acquisition opportunities, which may adversely effect our ability to complete
suitable acquisitions and may increase the costs of completing acquisitions.
An acquisition strategy involves a number of other risks and challenges,
including the following:
. Diversion of management's attention;
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. Integration of the operations and personnel of acquired companies;
. Incorporation of acquired products into existing product lines;
. Adverse short-term effects on reported operating results;
. Amortization of acquired intangible assets;
. Assumption of liabilities of acquired companies;
. Potential dilutive effect on our stockholders from continued issuance of
common stock as consideration for acquisitions;
. Adverse effect of acquisition-related charges, costs and expenses on
operating and net income;
. Potential loss of key employees; and
. Difficulty of presenting a unified corporate image.
We Operate in Highly Competitive Markets
We operate in the highly competitive markets of information technology
infrastructure products and professional services, and we expect competition to
increase. Many of our current and prospective competitors have significantly
greater financial, technical and marketing resources than us. In addition, many
prospective customers have the internal capability to implement solutions to
their information technology infrastructure problems.
We Are Subject to Risks Associated with the Arrival of the Year 2000
We are subject to risks related to the Year 2000:
. We have developed and marketed products that address Year 2000 problems;
demand for these products and services may diminish as the Year 2000
arrives, which could negatively impact our growth rate;
. Customers have allocated significant portions of their 1999 IT budgets
to Year 2000 compliance, which could diminish demand for our traditional
products through the end of 1999;
. Certain of our products may contain undetected Year 2000 problems;
. We may face legal claims or suffer other adverse consequences as a
result of information system failures of companies who have purchased
our products or for whom we have provided consulting services; and
. We could suffer adverse consequences as a result of Year 2000 related
interruptions in electrical power, telecommunications or other critical
third-party infrastructure services.
We May Be Subject to Damage Claims and Costs as a Result of Product Defects
Upon release, our software products typically contain certain errors or
bugs, which are usually resolved through the regular maintenance and updating
process. However, products may contain more serious errors, failures or bugs
which may not be discovered until we have delivered the products to customers.
As a result of serious failures or bugs:
. Our customers could suffer major business interruptions or other
problems which could lead to claims for damages against us;
. Customers may delay their purchases of products until they are satisfied
that the problems have been resolved;
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. Customers may decide not to purchase the defective products or other of
our products;
. Customers who have already received the defective products may return
them for refunds and possibly may bring other claims against us;
. We may need to devote significant financial and product development
resources to fix software defects; and
. We may be forced to delay the introduction of new products or new
versions of existing products.
We believe that our software license agreements provide us with substantial
protection against liability. In addition, we possess "errors and omissions"
insurance in the event we are held responsible for losses suffered by our
customers due to product defects. Nevertheless, we may be found liable for
customer losses, and our insurance may not be adequate to cover these losses.
If our products contain serious failures or bugs, our business, results of
operations or financial condition may be materially adversely affected.
Our Proprietary Technology May Not Be Adequately Protected and We May Be
Subject to Infringement Claims
Our success is heavily dependent upon our proprietary software technology.
We establish and protect our proprietary rights through a combination of
contractual rights, trademarks, trade secrets, patents and copyright laws.
However, the steps we have taken to protect our proprietary rights may not be
adequate to prevent the unauthorized use or imitation of our products. Foreign
countries in which we sell our products may afford less protection to
proprietary technology rights than is provided under United States laws.
We do not believe that our products or technologies materially infringe on
the intellectual property rights of others. Infringement claims may, however,
be asserted against us in the future. Any claim or litigation, with or without
merit, or an adverse determination in such claims or litigation, could be
costly and could have a material adverse effect on our business, results of
operations and financial condition.
Our Business Could Be Adversely Affected if DB2 Use Declines
We expect to continue to derive a significant portion of our revenues from
licensing products that enhance the performance of IBM's DB2 software for
managing mainframe corporate databases. If IBM decreases its commitment to DB2
or there is a decline in the market's acceptance and use of DB2, our business
could be materially adversely effected. Also, if IBM enhances DB2 and thereby
renders our products obsolete or devotes more resources to developing and
marketing IBM's own DB2 tools, our business, results of operations or financial
condition could be materially adversely affected.
We May Note Be Able to Compete Effectively If We Fail to Develop and Maintain
Relationships With Relational Database Vendors
We must develop and maintain close relationships with leading database
vendors to compete effectively. For example, we have has entered into alliances
with Oracle Systems Corp., Sybase, Inc. and Informix Software, Inc. If we fail
to maintain existing relationships or establish new relationships with database
vendors, our business, results of operations and financial condition could be
materially adversely affected.
Our Operating Results May Vary Significantly from Quarter to Quarter
Our operating results may vary significantly from quarter to quarter. In the
fourth quarter of each year, we typically achieve our highest total revenues
and operating income, excluding certain acquisition-related charges and other
special charges. Further, our fourth quarter revenues and operating income,
excluding the special charges, have historically been higher than those for the
first quarter of the following years. We believe the seasonality of our
operating results is caused primarily by the budgeting cycles of our software
product customers and the structure of our sales commission and bonus programs.
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We operate with little order backlog and derive substantially all of our
software product revenues in any quarter from sales made in that quarter. If
near term demand for our products weakens or sales do not close in any quarter
as anticipated, our results of operations for that quarter could be materially
adversely affected. In addition, we generally record a majority of our
quarterly software products revenues in the third month of any given quarter,
particularly in the last week of that third month. As a result, estimating our
operating results prior to the end of a quarter is extremely difficult.
We Are Subject to Exchange Rate Fluctuations and Other Risks Associated With
International Business
Historically, we have derived a significant portion of revenues from
international sales. Our total level of foreign sales and the profitability of
these sales could be materially adversely affected by exchange rate
fluctuations. As our operations expand in international regions outside Western
Europe, where international operations are currently concentrated, we may
increasingly need to hedge foreign currency exchange risk.
We are also subject to the risks generally associated with doing
international business, including the following:
. Longer payment cycles;
. Difficulty of managing remote offices;
. Greater difficulties in accounts receivable collection;
. Burdens of complying with a wide variety of foreign laws; and
. Exposure to general foreign economic declines and political conditions.
We Are Subject to Risks Associated With a Consulting Services Business
We are subject to the risks associated with a consulting services business,
including the following:
. Dependence on reputation with existing customers;
. Volatility of workload; and
. Dependence on ability to attract and retain qualified technical
personnel.
Also, we may derive a substantial portion of our future consulting services
revenue from the performance of services under fixed-price contracts. We may
not be able to perform in a profitable manner under these contracts,
particularly in the field of software development, where cost overruns occur
frequently. We have recently suffered diminished profitability in our
consulting services business.
We Depend on Attracting and Retaining Key Personnel
Our success depends largely on the skills, experience and efforts of our key
management, marketing, product development, professional services and
operational personnel, including key personnel of acquired companies. Because
competition for qualified personnel in the software industry is intense, we may
face increasing difficulty in hiring, training and integrating new employees
and keeping current employees required for our continued growth. Further,
certain key members of the management of acquired companies may not continue
with the combined businesses. If we encounter difficulty in attracting and
retaining key employees, our business, results of operations and financial
condition could be materially adversely affected.
Our Stock Price Has Historically Been Volatile
The market price of PLATINUM technology International common stock has
historically been volatile. We believe various factors may cause the market
price of our common stock to fluctuate substantially, including the following:
. Perceptions regarding the likelihood and timing of the completion of the
transactions with Computer Associates;
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. Quarterly fluctuations in financial results;
. Announcements of new products and acquisitions by us or our competitors;
. Changes or anticipated changes in earnings estimates by analysts or
others;
. Changes in accounting treatments or principles; and
. Our ability to meet or exceed analysts' or "street" expectations.
In addition, stock prices for many technology companies fluctuate widely for
reasons which may be unrelated to operating results. These fluctuations, as
well as general economic, political and market conditions, may adversely affect
the market price of our common stock in the future. In the past, following
periods of volatility in the market price of a company's securities, class
action lawsuits have often been brought against that company. If any such
lawsuit were brought against us, we could incur substantial costs, and
management's attention and resources could be diverted.
Our Rights Agreement and Charter Documents and Delaware Law May Inhibit a
Takeover
If the transactions with Computer Associates are not completed, provisions
in our rights agreement, certificate of incorporation and by-laws and in the
Delaware General Corporation Law may prevent or delay a removal of our
management or other change of control. These provisions could have this effect
even if our stockholders would benefit from the change in control.
On March 29, 1999, we amended our rights agreement, commonly referred to as
a "poison pill." The rights agreement is now inapplicable to the transactions
with Computer Associates.
The Notes Have No Public Market
The notes are not currently eligible for trading on any exchange. Although
the initial purchasers advised us that they intended to make a market in the
notes, they are not obligated to do so and may discontinue market making
activities at any time without notice. In addition, these market making
activities are subject to the limits imposed by the Securities Act of 1933 and
the Securities Exchange Act of 1934. Accordingly, a market may not be
maintained, and the trading price of the notes could be materially adversely
affected. The notes are designated for trading on The Portal Market. However,
notes sold pursuant to this prospectus will not remain eligible for trading on
The Portal Market.
SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS
This prospectus contains and incorporates by reference certain "forward-
looking statements" which we have identified with words such as "anticipates,"
"believes," "plans," "expects," "estimates" and similar expressions. These
statements reflect our current beliefs, but are subject to known and unknown
risks, uncertainties and other factors that could cause our actual growth,
results and business prospects to differ from those expressed in or implied by
these statements. These risks, uncertainties and other factors include the
following:
. Uncertainties regarding the completion of the transactions with Computer
Associates;
. Our ability to develop and market existing and acquired products for the
IT infrastructure market;
. Our ability to successfully integrate acquired products, services and
businesses and continue our acquisition strategy;
. Risks relating to the Year 2000 challenge;
. Our ability to adjust to changes in technology, customer preferences,
enhanced competition and new competitors in the IT infrastructure and
professional services markets;
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. Currency exchange rate fluctuations, collection of receivables,
compliance with foreign laws and other risks inherent in conducting
international business;
. Risks associated with conducting a consulting services business;
. The risk of damage claims and costs resulting from product defects;
. General economic and business conditions, which may reduce or delay
customers' purchases of our products and services;
. Charges and costs related to acquisitions;
. Our ability to protect our proprietary software rights from infringement
or misappropriation, to maintain or enhance relationships with
relational database vendors, and to attract and retain key employees;
and
. The other factors discussed under the caption "Risk Factors."
Except as required by the federal securities laws, we are not obligated to
update or revise these forward-looking statements to reflect events or
circumstances after the date of this prospectus.
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PLATINUM
We develop, market and support software products, and provide related
professional services, that help organizations manage and improve their IT
infrastructures, which consist of the data, systems and applications that are
used to run businesses. Our products and services help IT departments,
primarily in large and data intensive organizations, minimize risk, improve
service levels, and leverage information to make better business decisions. Our
products typically perform fundamental functions such as automating operations,
maintaining the operating efficiency of systems and applications, and ensuring
data access and integrity. They help organizations operate and manage large,
complex, distributed environments containing multiple computing platforms,
database management systems, applications, and operating systems that span
mainframe, midrange and PC/LAN computing environments, including MVS, UNIX,
Windows and Windows NT. Our products also support multiple database management
systems, such as the DB2 family, Oracle, Sybase, Microsoft SQL Server, UDB and
Informix. In addition, our products provide support for packaged software
applications such as SAP, Peoplesoft, Baan and Oracle Financial.
Effective January 1, 1999, we reorganized our legal structure into a holding
company structure, under which our operations are conducted through direct and
indirect wholly-owned subsidiaries. Certain of these subsidiaries, including
PLATINUM technology and PLATINUM technology IP commenced substantive
operations. We established PLATINUM technology and PLATINUM technology IP with
minimal capitalization as of December 31, 1998. PLATINUM technology IP, which
is wholly-owned directly by PLATINUM technology International, now holds all of
our intellectual property and licenses it to our subsidiaries. PLATINUM
technology, inc., which is wholly-owned directly by PLATINUM technology IP, now
holds our other domestic assets, employs our domestic operating personnel and
conducts our domestic business. In connection with the reorganization,
effective January 1, 1999, these two subsidiaries became co-obligors on the
notes.
PLATINUM technology International, inc., known prior to the reorganization
as PLATINUM technology, inc., was incorporated in Delaware in 1987. PLATINUM
technology, inc., originally known as PLATINUM technology Operating, inc., and
PLATINUM technology IP, inc. were incorporated in Delaware in 1998. Our
executive offices are located at 1815 South Meyers Road, Oakbrook Terrace,
Illinois 60181. Our telephone number is (630) 620-5000 and our website is
located at http://www.platinum.com.
THE COMPUTER ASSOCIATES TENDER OFFER AND MERGER
On March 29, 1999, we entered into an agreement and plan of merger with
Computer Associates and HardMetal, Inc., a wholly-owned subsidiary of Computer
Associates.
Under the terms of this agreement, HardMetal must offer to purchase each
outstanding share of our common stock for $29.25 in cash and will purchase all
of the shares validly tendered and not withdrawn. Consummation of the offer is
subject to certain conditions described in the agreement. These include (1) a
condition that at least a majority of all outstanding shares of common stock,
assuming exercise of all outstanding options, rights and convertible
securities, are tendered and not withdrawn and (2) the expiration or
termination of the applicable antitrust waiting period. The tender offer
commenced on April 2, 1999. Upon consummation of the offer and subject to
certain conditions described in the agreement, possibly including the approval
of our stockholders, HardMetal will merge into us, and we will become a wholly-
owned subsidiary of Computer Associates.
If Computer Associates completes its tender offer for our common stock, a
change of control under the indenture for the notes will occur. Each holder of
notes may require us to repurchase all or some of their notes on the designated
repurchase date. The repurchase date will be determined by us, but will be no
later than 45 business days after the completion of the tender offer. The
repurchase price will equal the entire principal amount of the notes tendered,
together with accrued and unpaid interest and any additional amounts payable on
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<PAGE>
these notes. In addition, at the effective time of the merger each note will no
longer be convertible into shares of our common stock. Each note will instead
be convertible solely into an amount of cash, without interest, equal to the
product of:
. the number of shares of common stock into which the note was immediately
convertible prior to the effective time of the merger, times
. $29.25
Computer Associates will not be required to assume, guarantee or become a
co-obligor on the notes. See "Description of the Notes--Repurchase at Option of
Holder Upon a Change of Control" and "--Conversion."
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<PAGE>
USE OF PROCEEDS
We will not receive any of the proceeds from sales of the securities offered
in the prospectus. The selling securityholders will receive all of the
proceeds.
RATIO OF EARNINGS TO FIXED CHARGES
The table below shows our consolidated ratio of earnings to fixed charges
for the periods indicated. The ratio of earnings to fixed charges has been
computed by dividing earnings available for fixed charges by fixed charges.
"Earnings available for fixed charges" means earnings before income taxes plus
fixed charges less capitalized interest. "Fixed charges" means interest expense
plus capitalized interest and the portion of rental expense which represents
interest.
Ratio of Earnings to Fixed Charges
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998
---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
5.97(1) --(2)(3) --(3)(4) --(3)(5) 2.70(6)
</TABLE>
- --------
(1) Reflects a pre-tax charge for acquired in-process technology of $24,594,000
relating to our acquisitions of certain software businesses and product
technologies and a pre-tax charge of $4,418,000 for restructuring costs
relating to LBMS.
(2) Reflects a pre-tax charge for acquired in-process technology of $88,493,000
relating to our acquisitions of certain software businesses and product
technologies and a pre-tax charge for merger costs of $31,287,000 relating
to certain acquisitions.
(3) Earnings available for fixed charges of $(119,638,000), $(91,280,000) and
$(72,330,000) were inadequate to cover fixed charges of $1,602,000,
$2,254,000 and $9,314,000 for the years ended December 31, 1995, 1996 and
1997.
(4) Reflects a pre-tax charge for acquired in-process technology of $49,451,000
relating to our acquisitions of certain software businesses and product
technologies; a pre-tax charge for merger costs of $5,782,000 relating to
certain acquisitions; a pre-tax charge of $16,312,000 relating to LBMS and
Logic Works, Inc. restructuring costs; and a pre-tax special general and
administrative charge of $1,978,000 related to Logic Works.
(5) Reflects a pre-tax charge for acquired in-process technology of $67,904,000
relating to our acquisitions of certain software businesses and product
technologies; a pre-tax charge for merger costs of $8,927,000 relating to
certain acquisitions; a pre-tax charge of $55,829,000 for restructuring
costs; and a pre-tax special general and administrative charge of
$13,513,000 relating to our integration procedures related to past
acquisition history.
(6) Reflects a pre-tax charge for acquired in-process technology of $37,918,000
relating to our acquisitions of certain software businesses and product
technologies; a pre-tax charge for merger costs of $40,065,000 relating to
certain acquisitions; a restructuring benefit of $10,964,000 relating to
our recovery of certain restructuring charges recorded in the second
quarter of 1997; and a pre-tax special general and administrative charge of
$10,982,000 relating to our integration procedures related to past
acquisition history.
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SELLING SECURITYHOLDERS
We issued and sold the notes to the initial purchasers on December 16, 1997
in transactions exempt from the registration requirements under the Securities
Act of 1933. The initial purchasers sold the notes only (1) within the United
States, to persons whom they reasonably believed to be "qualified institutional
buyers," as defined in Rule 144A under the Securities Act, in reliance on Rule
144A under the Securities Act and (2) to persons outside the United States
pursuant to Regulation S under the Securities Act. The selling securityholders
may from time to time offer and sell pursuant to this prospectus any or all of
the notes and common stock covered by this prospectus. For purposes of this
prospectus, the selling securityholders include their transferees, pledgees,
donees and successors.
The following table sets forth, as of March 22, 1999, information with
respect to (1) the beneficial ownership of notes and shares of common stock by
each selling securityholder and (2) the notes and shares of common stock that
may be offered and sold by the selling securityholders from time to time
pursuant to this prospectus.
Deutsche Bank Securities, Inc. or their affiliates have from time to time
provided, and may continue to provide, investment banking and financial
advisory services to us. They have received or will receive customary fees for
these services. None of the other selling securityholders has or, within the
past three years, has had with us or any of our predecessors or affiliates any
material relationship, except as described below. Because the selling
securityholders may offer all or some of the notes or the shares pursuant to
this prospectus, we cannot provide any estimate as to the amount of notes or
shares that will be held by the selling securityholders upon termination of
this offering. We have prepared the table based upon information furnished to
us by the selling securityholders.
<TABLE>
<CAPTION>
Percent of Number of Principal Number of
Principal Aggregate Shares of Amount Shares of
Amount of Notes Principal Common Stock of Notes Common
Beneficially Amount of Beneficially That May Stock That
Name Owned Notes Owned (1)(2) Be Sold May Be Sold
- ---- --------------- ---------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C>
Associated Electric &
Gas Insurance Services
Limited................ $ 250,000 *% 8,043 $ 250,000 8,043
BT Alex Brown........... 2,200,000 1.5 61,022 2,200,000 61,022
Delaware Group Dividend
and Income Fund, Inc... 1,215,000 * 33,700 1,215,000 33,700
Delaware Group Equity
Fund V, Inc.--
Retirement Income Fund. 65,000 * 1,802 65,000 1,802
Delaware Group Global
Dividend and Income
Fund, Inc.............. 610,000 * 16,919 610,000 16,919
Delaware Group Premium
Fund, Inc.--
Convertible Securities
Series................. 140,000 * 3,883 140,000 3,883
Deutsche Bank
Securities, Inc. (3)... 21,700,000 14.5 601,900 21,700,000 601,900
Flag Investors Value
Builder Fund........... 8,800,000 5.9 244,088 8,800,000 244,088
Merrill Lynch
International Ltd...... 7,970,000 5.3 221,066 7,970,000 221,066
SG Cowen Securities
Corporation............ 5,500,000 3.7 152,555 5,500,000 152,555
Sage Capital............ 1,500,000 1.0 41,606 1,500,000 41,606
Spear, Leeds & Kellogg.. 1,000,000 * 27,737 1,000,000 27,737
Any other holders of the
notes or future
transferees, pledgees,
donees or successors of
any such other
holders (4)(5)......... 5,800,000 3.9 159,767 5,800,000 159,767
</TABLE>
- --------
*Less than 1%.
(1) Assumes conversion of the full amount of notes held by each holder at the
initial conversion rate of $36.0525 in principal amount of notes per share
of common stock. This conversion price is subject to
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<PAGE>
adjustment as described under "Description of Notes--Conversion." Under the
terms of the indenture, we will not issue any fractional shares upon
conversion of the notes. Cash will be paid instead of any fractional
shares.
(2) The number of shares held by each selling securityholder named in this
prospectus is less than 1% of our outstanding common stock as of March 22,
1999.
(3) Deutsche Bank Securities, Inc. (f/k/a Deutsche Morgan Grenfell) served as
the sole placement agent for the December 1997 offering of the notes.
(4) We will provide information concerning other selling securityholders in
supplements to this prospectus from time to time, if required.
(5) Assumes that any other holders of notes, or any future transferees,
pledgees, donees or successors of any such other holders of notes, do not
beneficially own any common stock other than the common stock issuable
upon conversion of the notes at the initial conversion price.
The selling securityholders listed above may have sold, transferred or
disposed of, in transactions exempt from the registration requirements of the
Securities Act, all or a portion of their notes since the date on which the
information in the table is presented. Information concerning the selling
securityholders may change from time to time and will be set forth in
prospectus supplements, if and when necessary. In addition, the per share
conversion price and, therefore, the number of shares of common stock are
subject to adjustment under certain circumstances. Therefore, the number of
shares offered hereby may increase or decrease. As of the date of the
prospectus, the aggregate principal amount of notes covered by the prospectus
is $56,750,000 and the aggregate number of shares into which these notes may
be converted is approximately 1,574,093.
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<PAGE>
DESCRIPTION OF THE NOTES
The notes were issued under an indenture, dated as of December 15, 1997,
between PLATINUM technology International and American National Bank and Trust
Company of Chicago, as trustee. The indenture was supplemented by a
supplemental indenture, dated as of January 1, 1999, among PLATINUM technology
International, PLATINUM technology, PLATINUM technology IP and the trustee.
Pursuant to this supplemental indenture, PLATINUM technology and PLATINUM
technology IP became co-obligors on the notes, assuming all of our payment and
other obligations under the notes and the indenture. In this section of the
prospectus, "we" refers to PLATINUM technology International, PLATINUM
technology and PLATINUM technology IP.
The following description of the particular terms of the notes, the
indenture and the registration rights agreement may not be complete. This
description is qualified in its entirety by reference to, all of the provisions
of the notes, the indenture and the registration rights agreement, which have
been filed with the SEC. You can find definitions of key terms used in this
section of the prospectus on pages 27 and 28.
General
The notes are unsecured, subordinated obligations of PLATINUM technology
International, PLATINUM technology and PLATINUM technology IP. The notes are
limited to $150,000,000 aggregate principal amount. The notes will mature on
December 15, 2002, unless redeemed at our option or repurchased by us at the
option of the holder upon a Designated Event (as defined below). The notes bear
interest at an annual rate of 6.25%. Interest is payable semi-annually on June
15 and December 15 to the registered holders of the notes at the close of
business on June 1 or December 1 immediately preceding the interest payment
date. Interest is calculated on the basis of a 360-day year consisting of
twelve 30-day months. The notes are subordinate in right of payment to certain
of our obligations as described under "--Subordination" and convertible into
our common stock as described under "--Conversion."
We maintain an office or agency where notes may be presented for payment,
registration or conversion in the City of New York, New York. We initially
designated the trustee, at its office presently located at 14 Wall Street, New
York, New York 10005, to serve as our agent for such purposes.
At our option, we may pay interest by check mailed to the holders of the
notes at the addresses set forth upon the registry books of the registrar.
Holders are not required to pay a service charge for any registration of
transfer or exchange of notes, but we may require payment of an amount
sufficient to cover any tax or other governmental charge payable.
The notes are convertible into our common stock at the conversion price
stated on the cover page of this prospectus, at any time prior to the close of
business on the maturity date, unless we have previously redeemed or
repurchased the notes. The conversion price is subject to adjustment upon the
occurrence of certain events described under "--Conversion."
The notes are redeemable at our option:
. in the event of certain developments involving U.S. withholding taxes as
described below under "--Redemption for Taxation Reasons" at a
redemption price of 100% of the principal amount of the notes to be
redeemed, plus accrued interest to, but excluding, the redemption date,
and any additional amounts then payable and
. under the circumstances and at the redemption prices set forth below
under "Redemption--Optional Redemption," plus accrued interest to, but
excluding, the redemption date, and any additional amounts then payable.
The indenture does not contain any financial covenants or restrictions on
our payment of dividends, the incurrence of indebtedness, including Senior
Indebtedness, or issuance or repurchase of securities. The
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<PAGE>
indenture does not contain any covenants or other provisions to afford
protection to holders of the notes in the event of a highly leveraged
transaction or change in control except to the extent described below under "--
Repurchase at Option of Holders Upon a Change of Control."
Book Entry, Delivery and Form
We issued the notes in fully registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000.
Global Note, Book-Entry Form. Notes held by "qualified institutional buyers"
("QIBs") are evidenced by a global note (the "144A Global Note"), which are
deposited with, or on behalf of, The Depository Trust Company, New York, New
York ("DTC"), and registered in the name of Cede & Co. as DTC's nominee.
Notes held by persons who acquired such notes in compliance with Regulation
S under the Securities Act (a "Non-U.S. Person") are evidenced by a global note
(the "Regulation S Global Note"), which is deposited with, or on behalf of, DTC
and registered in the name of Cede as DTC's nominee, for the accounts of Morgan
Guaranty Trust Company of New York, Brussels office, as operator of the
Euroclear System and Cedel, S.A. Beneficial interests in the Regulation S
Global Note may only be held through Euroclear or Cedel, and any resale or
transfer of such interests to U.S. persons is subject to certain restrictions.
The 144A Global Note and the Regulation S Global Note are collectively referred
to as the Global Note. Except as discussed below, the Global Note may be
transferred, in whole or in part, only to another nominee of DTC or to a
successor of DTC or its nominee.
QIBs may hold their interests in the 144A Global Note directly through DTC
or indirectly through organizations which are participants in DTC. Transfers
between participants are effected in the ordinary way in accordance with DTC
rules and are settled in same-day funds. Non-U.S. Persons may hold their
interest in the Regulation S Global Note directly through Cedel or Euroclear,
or indirectly through organizations that are participants in Cedel or
Euroclear. Cedel and Euroclear hold interests in the Regulation S Global Note
on behalf of Cedel participants and Euroclear participants through DTC.
Transfers between participants in Euroclear and Cedel are effected in the
ordinary way in accordance with their respective rules and operating
procedures. The laws of some states require that certain persons take physical
delivery of securities in definitive form. Consequently, the ability to
transfer beneficial interests in the Global Note to these persons may be
limited.
QIBs and Non-U.S. Persons who are not participants in DTC may beneficially
own interests in the Global Note held by DTC only through participants,
including Euroclear and Cedel, or certain banks, brokers, dealers, trust
companies and other parties that clear through or maintain a custodial
relationship with a participant in DTC, either directly or indirectly. So long
as Cede, as the nominee of DTC, is the registered owner of the Global Note,
Cede for all purposes will be considered the sole holder of the Global Note for
all purposes under the indenture. Except as provided below and in certain
limited circumstances provided in the indenture, owners of beneficial interests
in the Global Note are not entitled to have certificates registered in their
names, will not receive or be entitled to receive physical delivery of
certificates in definitive form, and are not considered holders of the notes
under the indenture for any purpose, including for the giving of any
directions, instructions or approvals to the trustee.
Payment of interest on and principal of and the redemption price or
repurchase price of the Global Note is made to Cede, the nominee for DTC, as
the registered owner of the Global Note, by wire transfer of immediately
available funds on each relevant payment date. Neither we nor the trustee or
any registrar, paying agent or conversion agent under the Indenture, has any
responsibility or liability for any aspect of the records relating to, or
payments made on account of, beneficial ownership interests in the Global Note,
including for any delay by DTC or any participant or indirect participant in
identifying the beneficial owners of the notes, or for maintaining, supervising
or reviewing any records relating to the beneficial ownership interests. We and
the trustee may conclusively rely on, and are protected in relying on,
instructions from DTC for all purposes.
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<PAGE>
DTC informed us that, with respect to any payment of interest on, principal
of, or the redemption price or repurchase price of, the Global Note, DTC's
practice is to credit participants' accounts on the payment date with payments
in amounts proportionate to their respective beneficial interests in the notes
represented by the Global Note, as shown on the records of DTC, adjusted as
necessary so that such payments are made with respect to whole notes only,
unless DTC has reason to believe that it will not receive payment on that
payment date. Payments by participants in DTC to owners of beneficial interests
in notes represented by the Global Note held through those participants will be
the responsibility of those participants, as is now the case with securities
held for the accounts of customers registered in "street name."
DTC can only act on behalf of its participants, who in turn act on behalf of
indirect participants and certain banks. The ability of a person having a
beneficial interest in the principal amount represented by the Global Note to
pledge the interest to persons or entities that do not participate in the DTC
system, or otherwise take actions in respect of the interest, may be affected
by the lack of a physical certificate evidencing the interest.
Neither we nor the trustee, nor any note registrar, paying agent or
conversion agent under the indenture, has any responsibility for the
performance by DTC or its participants or indirect participants of their
respective obligations under the rules and procedures governing their
operations. DTC has advised us that it will take any action permitted to be
taken by a holder of notes, including the presentation of notes for exchange as
described below, only (1) at the direction of one or more participants to whose
account with DTC interests in the Global Note are credited and (2) in respect
of the principal amount of the notes represented by the Global Note as to which
the participant or participants has or have given such direction.
Although DTC has agreed to these procedures in order to facilitate transfers
of interests in the Global Note among its participants, it is under no
obligation to perform or continue to perform these procedures and may
discontinue them at any time. If DTC is at any time unwilling or unable to
continue as depositary and a successor depositary is not appointed by us within
90 days, we will cause the notes to be issued in definitive form in exchange
for the Global Note.
DTC has advised us that it is
. a limited purpose trust company organized under the laws of the State of
New York;
. a member of the Federal Reserve System;
. a "clearing corporation" within the meaning of the Uniform Commercial
Code; and
. a "clearing agency" registered pursuant to the provisions of Section 17A
of the Exchange Act.
DTC was created to hold securities for its participants and to facilitate the
clearance and settlement of securities transactions between its participants
through electronic book-entry changes to accounts of its participants,
eliminating the need for physical movement of certificates. Participants
include securities brokers and dealers, banks, trust companies and clearing
corporations and may include certain other organizations such as the initial
purchasers of the notes. Certain of such participants, or their
representatives, together with other entities, own DTC. Banks, brokers, dealers
and trust companies that clear through, or maintain a custodial relationship
with, a participant, either directly or indirectly, have indirect access to the
DTC system.
Certificated Notes. Notes sold to investors that are neither QIBs nor Non-
U.S. Persons were issued in definitive registered form and may not be
represented by the Global Note. In addition, certificated notes may be issued
in exchange for notes represented by the Global Note if we do not appoint a
successor depositary as set forth above and as described in the Indenture.
Restrictions on Transfer; Legends. The notes are subject to certain transfer
restrictions as described in the indenture. Certificates evidencing the notes
bear a legend regarding these restrictions.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that we believe to be reliable. We will have no
responsibility for the performance by DTC or its
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<PAGE>
participants of their obligations as described above or under the rules and
procedures governing their obligations.
Conversion
The holders of the notes have the right to convert any portion of the
principal amount that is an integral multiple of $1,000 into shares of our
common stock. This right to convert may be exercised at any time prior to the
close of business on the stated maturity of the notes, unless we have
previously redeemed or repurchased the notes, at the conversion price set forth
on the cover page of this prospectus, subject to adjustment as described below.
The right to convert a note called for redemption or delivered for repurchase
will terminate at the close of business on the business day prior to the
redemption date or repurchase date for the note, unless we subsequently fail to
pay the applicable redemption price or repurchase price.
If any note that has been converted after any record date, but on or before
the next interest payment date, interest is still payable on that interest
payment date, and will be paid to the holder of the note on that record date.
Any note so converted must be accompanied by payment of an amount equal to the
interest payable on that interest payment date on the principal amount of notes
being surrendered for conversion, unless the note has been called for
redemption, in which case no such payment will be required. In all cases, the
holders will receive the interest payment due on December 15, 2000, even if
they surrender notes for conversion as a result of our exercising our right to
redeem the notes on or after December 15, 2000. No fractional shares will be
issued upon conversion. Instead of fractional shares, we will pay an
appropriate amount in cash based on the market price of our common stock at the
close of business on the day of conversion.
The conversion price is subject to adjustment upon certain events occurring,
including:
(a) any payment of a dividend or other distribution payable in our
common stock on any class of our capital stock;
(b) any issuance to all holders of our common stock of rights, options
or warrants entitling them to subscribe for or purchase common stock at
less than the then current market price of common stock; provided, however,
that if such options or warrants are only exercisable upon the occurrence
of certain triggering events, then the conversion price will not be
adjusted until the triggering events occur;
(c) any subdivision, combination or reclassification of our common
stock;
(d) any distribution to all holders of our common stock of evidences of
indebtedness, shares of capital stock other than common stock, cash or
other assets, including securities, but excluding those dividends, rights,
options, warrants and distributions referred to above and excluding
dividends and distributions paid exclusively in cash;
(e) any distribution consisting exclusively of cash (excluding any cash
portion of distributions referred to in (d) above or cash distributed upon
a merger or consolidation to which the last paragraph of this section
"Conversion" applies) to all holders of our common stock in an aggregate
amount that, combined together with
. all other such all-cash distributions made within the preceding 12
months for which no adjustment has been made, and
. any cash and the fair market value of other consideration paid or
payable in respect of any tender offer by us or any of our
Subsidiaries for common stock concluded within the preceding 12
months for which no adjustment has been made,
exceeds 10% of our market capitalization (defined as the product of the
then current market price of our common stock times the number of shares of
our common stock then outstanding) on the record date of the distribution;
and
(f) the completion of a tender or exchange offer made by us or any of
our Subsidiaries for our common stock that involves an aggregate
consideration that, together with
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<PAGE>
. any cash and other consideration payable in a tender or exchange
offer by us or any of our Subsidiaries for our common stock expiring
within the 12 months preceding the expiration of such tender or
exchange offer for which no adjustment has been made, and
. the aggregate amount of any such all-cash distributions referred to
in (e) above to all holders of our common stock within the 12 months
preceding the expiration of such tender or exchange offer for which
no adjustments have been made,
exceeds 10% of our market capitalization on the expiration of such tender
or exchange offer.
We will not be required to adjust the conversion price until the cumulative
adjustments amount to 1.0% or more of the conversion price as last adjusted.
We reserve the right to make reductions in the conversion price in addition
to those required by the above provisions as we consider advisable. If we elect
to make such a reduction in the conversion price, we will comply with the
requirements of Rule 14e-1 under the Securities Exchange Act of 1934 and any
other securities laws and regulations if and to the extent that such laws and
regulations are applicable in connection with the reduction of the conversion
price.
If we distribute rights or warrants, other than those referred to in (b) in
the third paragraph above, pro rata to holders of our common stock, so long as
any such rights or warrants have not expired or been redeemed by us, the holder
of any note surrendered for conversion will be entitled to receive upon
conversion, in addition to the shares of common stock issuable upon conversion
(the "Conversion Shares"), a number of rights or warrants to be determined as
follows:
. if conversion occurs on or prior to the date for the distribution to the
holders of rights or warrants of separate certificates evidencing such
rights or warrants, the same number of rights or warrants to which a
holder of a number of shares of common stock equal to the number of
Conversion Shares is entitled to at the time of such conversion in
accordance with the terms and provisions of the rights or warrants; and
. if conversion occurs after the distribution date, the same number of
rights or warrants to which a holder of the number of shares of common
stock into which such note was convertible immediately prior to the
distribution date would have been entitled on such distribution date in
accordance with the terms and provisions of the rights or warrants.
The conversion price of the notes will not be subject to adjustment on account
of any declaration, distribution or exercise of such rights or warrants.
Under the terms of the rights agreement between PLATINUM technology
International and Harris Trust and Savings Bank, the holders of the notes will
receive, subject to certain limited conditions, an appropriate number of rights
to purchase our Class II Series A junior participating preferred stock with
respect to the shares of common stock issued upon such conversion. In addition,
the indenture for the notes provides that if we amend the rights agreement or
implement a replacement or successor stockholders' rights plan, the rights plan
must provide that upon conversion of the notes the holders will receive the
rights, in addition to the common stock issuable upon such conversion, whether
or not the rights have separated from the common stock at the time of such
conversion.
In case of any reclassification, consolidation or merger of PLATINUM
technology International with or into another person or any merger of another
person with or into PLATINUM technology International (with certain
exceptions), or in case of any sale, transfer or conveyance of all or
substantially all of the assets of PLATINUM technology International (computed
on a consolidated basis), we must execute a supplemental indenture providing
that each note then outstanding will, without the consent of any holder of
notes, become convertible only into the kind and amount of securities, cash and
other property receivable upon such event by a holder of the number of shares
of common stock into which such note was convertible, after giving effect to
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<PAGE>
any adjustment event, assuming such holder of common stock failed to exercise
any rights of election and received per share the kind and amount received per
share by a plurality of non-electing shares. Therefore, HardMetal's merger into
PLATINUM technology International will result in each note becoming convertible
solely into an amount of cash, without interest, equal to the product of (1)
the number of shares into which the note was immediately convertible prior to
the effective time of the merger times, (2) $29.25.
Subordination
The notes are unsecured general obligations of PLATINUM technology
International, PLATINUM technology and PLATINUM technology IP, subordinated in
right of payment to the existing and future Senior Indebtedness of each of
these corporations. As of March 31, 1999, we had approximately $37.9 million of
Senior Indebtedness outstanding. The notes are effectively subordinated in
right of payment to all liabilities, including trade payables of our
Subsidiaries, other than PLATINUM technology and PLATINUM technology IP. Our
Subsidiaries, other than PLATINUM technology and PLATINUM technology IP, had
over $161.8 million of indebtedness and other liabilities outstanding,
excluding intercompany liabilities, at March 31, 1999. The indenture does not
restrict the incurrence of Senior Indebtedness or other indebtedness by us or
our Subsidiaries.
The indenture provides that we may not make any payment on account of the
principal of, premium, if any, and interest (including any additional amounts)
on the notes, or acquire any of the notes (including repurchases of notes at
the option of the holder) for cash or property (other than Junior Securities),
or due to the redemption provisions of the notes,
. upon the maturity of any senior indebtedness by lapse of time,
acceleration (unless waived) or otherwise, unless and until all
principal of, premium, if any, and interest on such Senior Indebtedness
are first paid in full (or such payment is duly provided for), or
. in the event of default in the payment of any principal of, premium, if
any, or interest on any Senior Indebtedness when it becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise, unless and until such payment default has been
cured or waived or no longer exists.
Upon (1) an event of default, other than a payment default, occurring that
permits the holders of Designated Senior Indebtedness or their representative
immediately to accelerate its maturity and (2) written notice of such event of
default given to us and the trustee by the holders of an aggregate of at least
$5,000,000 principal amount outstanding of such Designated Senior Indebtedness
or their representative, then, unless and until such event of default has been
cured or waived or otherwise has ceased to exist, we may not make any payment
(by setoff or otherwise) on account of the principal of, premium, if any, or
interest or additional amounts on the notes. We also may not acquire or
repurchase any of the notes for cash or property, or due to the redemption
provisions of the notes. However, we may make any such payments with our Junior
Securities. Unless (1) the Designated Senior Indebtedness to which such event
of default exists has been declared due and payable in its entirety within 179
days after the payment notice is delivered as set forth above (the "Payment
Blockage Period"), and (2) such declaration has not been rescinded or waived,
at the end of the Payment Blockage Period, we will be required to pay all sums
not paid to the holders of the notes during the Payment Blockage Period due to
these prohibitions and to resume all other payments when due on the notes. Any
number of payment notices may be given; provided, however, that
. not more than one payment notice shall be given within a period of any
360 consecutive days, and
. no default that existed upon the date of such payment notice or the
commencement of such Payment Blockage Period, whether or not such event
of default is on the same issue of Designated Senior Indebtedness, shall
be made the basis for the commencement of any other Payment Blockage
Period.
In the event that, despite the restrictions, any payment or distribution of
our assets (other than Junior Securities) is received by the trustee or the
holders of the notes at a time when such payment or distribution is prohibited
by these provisions, payment or distribution will be held in trust for the
benefit of the holders of our
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Senior Indebtedness. The payment or distribution will be paid or delivered by
the trustee or such holders to the holders of our senior indebtedness remaining
unpaid or unprovided for or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing any of such Senior Indebtedness may have been issued. The payment or
distribution will be made ratably according to the aggregate amounts remaining
unpaid on account of our Senior Indebtedness held or represented by each, for
application to the payment of all of our Senior Indebtedness remaining unpaid,
to the extent necessary to pay or to provide for the payment of all such Senior
Indebtedness in full, after giving effect to any concurrent payment or
distribution to the holders of such Senior Indebtedness.
Upon any distribution of our assets upon any dissolution, winding up, total
or partial liquidation or reorganization, whether voluntary or involuntary, in
bankruptcy, insolvency, receivership or a similar proceeding or upon assignment
for the benefit of creditors or any marshaling of assets or liabilities,
. the holders of our Senior Indebtedness will first be entitled to receive
payment in full, or have such payment duly provided for, before the
holders of the notes are entitled to receive any payment on account of
the principal of, premium, if any, interest or additional amounts on, or
with respect to, the notes (other than Junior Securities) and
. any payment or distribution of our assets of any kind or character,
whether in cash, property or securities (other than Junior Securities)
to which the holders or the trustee on behalf of the holders would be
entitled (by setoff or otherwise), except for the subordination
provisions contained in the indenture for the notes, will be paid by the
liquidating trustee or agent or other person making such a payment or
distribution directly to the holders of our Senior Indebtedness or their
representative to the extent necessary to make payment in full of all
such Senior Indebtedness remaining unpaid, after giving effect to any
concurrent payment or distribution to the holders of such senior
indebtedness.
Our obligation, which is absolute and unconditional, to pay, when due,
principal of, premium, if any, and interest on the notes is not affected by any
provision contained in the indenture or the notes. The subordination provisions
of the indenture and the notes do not prevent the occurrence of any default or
event of default under the indenture or limit the rights of the trustee or any
holder, subject to the two previous paragraphs, to pursue any other rights or
remedies with respect to the notes.
We conduct certain operations through subsidiaries. Accordingly, our ability
to meet our cash obligations is dependent upon our subsidiaries' ability to
make cash distributions to us. The ability of our subsidiaries to make
distributions to us is and will continue to be restricted by applicable
provisions of the laws of national and state governments and contractual
provisions. The indenture does not limit the ability of our subsidiaries to
incur such restrictions in the future. Our right to participate in the assets
of any Subsidiary, other than PLATINUM technology or PLATINUM technology IP
(and thus the ability of holders of the notes to benefit indirectly from such
assets), is generally subject to the prior claims of creditors, including trade
creditors, of that Subsidiary except to the extent that we are recognized as a
creditor of such Subsidiary, in which case our claims would still be subject to
any security interest of other creditors of such Subsidiary. The notes,
therefore, are structurally subordinated to creditors, including trade
creditors, of our subsidiaries, other than PLATINUM technology or PLATINUM
technology IP, with respect to the assets of those Subsidiaries against which
such creditors have a claim.
As a result of these subordination provisions, in the event of the
liquidation, bankruptcy, reorganization, insolvency, receivership or similar
proceeding or an assignment for the benefit of our creditors or any of our
subsidiaries' creditors or a marshaling of assets or liabilities of us and our
subsidiaries, holders of the notes may receive ratably less than other
creditors.
Redemption
Optional Redemption
We may not redeem the notes prior to December 15, 2000. After that date, we
may redeem the notes at our option, in whole or in part, upon not less than 30
nor more than 60 days' notice to each holder of the notes.
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The notes are redeemable at the following redemption prices, expressed as
percentages of the principal amount, if redeemed during the 12-month period
commencing December 15 of the years indicated below:
<TABLE>
<CAPTION>
Redemption
Year Price
---- ----------
<S> <C>
2000.......................... 102.50%
2001 and thereafter........... 101.25
</TABLE>
in each case (subject to the right of holders of record on a record date to
receive interest due on an interest payment date that is on or prior to such
redemption date), together with accrued and unpaid interest and additional
amounts, if any, to the redemption date.
In the case of a partial redemption, the trustee will promptly redeem the
notes or portions of the notes which are to be redeemed on a pro rata basis or
in such other manner it deems appropriate and fair and in compliance with any
applicable depositary, legal and stock exchange requirements. The notes may be
redeemed in part in integral multiples of $1,000 only.
The notes do not have the benefit of any sinking fund.
We are required to send notice of any redemption, by first-class mail, at
least 30 days and not more than 60 days prior to the date fixed for redemption,
to the trustee and each holder of notes to be redeemed to the holder's last
address as then shown upon the registry books of the registrar. The notice of
redemption must state the redemption rate, the redemption price, the amount of
accrued interest to be paid and that the notes called for redemption may not be
converted after the fifth business day prior to the redemption date. Any notice
that relates to a note to be redeemed only in part must state the portion of
the principal amount to be redeemed and that on and after the redemption date,
upon surrender of such note, a new note or notes in principal amount equal to
the unredeemed portion will be issued. On and after the redemption date,
interest will stop accruing on the notes or portions of the notes called for
redemption, unless we default in our obligations with respect to the
redemption.
Redemption for Taxation Reasons
If, as a result of any change or amendment to the laws or regulations
prevailing in the U.S. or any political subdivision or taxing authority in the
U.S. which becomes effective on or after December 16, 1997 or as a result of
any application or official interpretation of such laws or regulations not
generally known before that date (a "Tax Law Change"), we are or would be
required on the next succeeding interest payment date to pay additional
amounts, as discussed below, and such requirement or obligation cannot be
avoided by us taking reasonable measures available to us, we may redeem the
affected notes in whole, but not in part. We may redeem such notes at any time,
on giving not less than 20 days' notice, at a redemption price equal to 100% of
the principal amount plus accrued interest to, but excluding, the redemption
date and any additional amounts then payable. We may not give up such notice of
redemption earlier than 90 days prior to the earliest date on which we would be
obligated to withhold or pay additional amounts were a payment in respect of
the notes then made.
Prior to our publication of any notice of redemption with respect to a Tax
Law Change, we will deliver to the trustee,
. a certificate stating that we are entitled to effect such redemption and
setting forth a statement of facts showing that the conditions precedent
to our right to redeem have occurred, and
. an opinion of counsel selected by us and reasonably acceptable to the
trustee, to the effect that we have or will become obligated to pay the
additional amounts as a result of a Tax Law Change. Our right to redeem
the affected notes will continue as long as we are obligated to pay
additional amounts, even if we have previously made payments of
additional amounts.
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Payment of Additional Amounts
We will pay to a Non-U.S. Holder (as defined in "Certain United States
Federal Income Tax Considerations" below) of any note such additional amounts
as may be necessary in order that every net payment of the principal premium
and interest on such note, after deduction or withholding for any present or
future tax, assessment or governmental charge imposed upon or as a result of
such payment by the U.S. or any U.S. political subdivision or taxing authority
will not be less than the amount provided for in such note to be then due and
payable. However, the obligation to pay additional amounts will not apply to:
. any tax, assessment or other governmental charge which would not have
been so imposed but for:
(1) the existence of any present or former connection between
such Non-U.S. Holder (or between a fiduciary, settlor, beneficiary,
member, shareholder of, or possessor of a power over, such Non-U.S.
Holder, if such Non-U.S. Holder is a trust, an estate, a partnership
or a corporation) and the U.S. or any political subdivision or
taxing authority of or in the U.S., including such Non-U.S. Holder
(or such fiduciary, settlor, beneficiary, member, shareholder or
possessor) being or having been a citizen, domiciliary or resident
of the U.S. or treated as a resident of the U.S., or being or having
been engaged in trade or business or present therein, or having or
having had a permanent establishment in the U.S.; or
(2) such Non-U.S. Holder's present or former status as a personal
holding company, a foreign personal holding company with respect to
the U.S., a controlled foreign corporation, a passive foreign
investment company, or a foreign private foundation or foreign tax
exempt entity for U.S. tax purposes, or a corporation which
accumulates earnings to avoid U.S. federal income tax;
. any tax, assessment or other governmental charge which would not have
been so imposed but for the presentation by the Non-U.S. Holder of such
notes for payment on a date more than 15 days after the date on which
the payment became due and payable or the date on which the payment is
duly provided for, whichever occurs later;
. any estate, inheritance, gift, sales, transfer, personal property or
similar tax, assessment or governmental charge;
. any tax, assessment or other governmental charge which would not have
been imposed but for the failure to comply with any certification,
identification or other reporting requirement concerning the
nationality, residence, identity or connection with the U.S. of such
Non-U.S. Holder (or beneficial owner of such note), if compliance is
required or imposed by a statute, treaty, regulation or administrative
practice of the U.S. or any political subdivision or taxing authority of
or in the U.S. as a precondition to exemption from all or part of such
tax, assessment or other governmental charge;
. any tax, assessment or other governmental charge which is payable other
than by deduction or withholding from payments of principal of, premium,
if any, or interest on such note;
. any tax, assessment or other governmental charge imposed on interest
received by a Non-U.S. Holder actually or constructively holding 10% or
more of the total combined voting power of all classes of our voting
stock;
. any tax, assessment or other governmental charge imposed on a Non-U.S.
Holder that is a partnership or a fiduciary or other than the sole
beneficial owner of such payment, but only to the extent that any
beneficial owner or member of the partnership or beneficiary or settlor
with respect to the fiduciary would not have been entitled to the
payment of additional amounts had the beneficial owner, member,
beneficiary or settlor directly been the holder of the note; or
. any combination of these items.
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However, we are not obligated to pay additional amounts for payments
becoming due on the notes more than 15 days after the redemption date with
respect to any redemption of the notes described in the first paragraph under
"--Redemption--Redemption for Taxation Reasons" to the extent that our
obligation to pay such additional amounts arises from the Tax Law Change that
resulted in such redemption.
Repurchase at Option of Holders Upon a Change of Control
In the event that a Change of Control has occurred, each holder of notes
will have the right, at such holder's option, pursuant to an irrevocable and
unconditional repurchase offer by us, to require us to repurchase all or any
part of such holder's notes, provided that the principal amount of the notes
must be $1,000 or an integral multiple of $1,000. We will repurchase the notes
on the repurchase date determined by us that is no later than 45 business days
after the occurrence of the Change of Control. We will repurchase the notes at
a cash repurchase price equal to 100% of the principal amount, together with
accrued and unpaid interest to the repurchase date and any additional amounts
then payable. We will make the repurchase offer within 30 business days
following a Change of Control event and remain open for 15 business days
following its commencement. Upon expiration of the repurchase offer period, we
will purchase all notes tendered in response to the repurchase offer. If
required by applicable law, we may extend the repurchase date and the
repurchase offer period as so required. If so extended, there will still be an
Event of Default if the repurchase date does not occur within 45 business days
of the Change of Control.
The indenture provides that a "Change of Control" occurs upon the occurrence
of any of the following events:
. upon any merger or consolidation of PLATINUM technology International
with or into any person or any sale, transfer or other conveyance,
whether direct or indirect, of all or substantially all of our assets,
on a consolidated basis, in one transaction or a series of related
transactions, if, immediately after giving effect to the transaction,
any "person" or "group" other than PLATINUM technology International is
or becomes the "beneficial owner," directly or indirectly, of more than
50% of the voting power in the aggregate normally entitled to vote in
the election of directors, managers, or trustees, as applicable, of the
transferee or surviving entity,
. when any "person" or "group" is or becomes the "beneficial owner,"
directly or indirectly, of more than 50% of the voting power in the
aggregate normally entitled to vote in the election of our directors,
. when, during any period of 12 consecutive months, individuals who at the
beginning of any such 12-month period constituted our board of directors
(together with any new directors whose election by our board or whose
nomination for election by our stockholders was approved by a vote of a
majority of the directors then still in office who were either directors
at the beginning of such period or whose election or nomination for
election was previously so approved) for any reason no longer constitute
a majority of our board of directors, or
. our pro rata distribution to our stockholders of substantially all of
our assets.
For purposes of this definition, the terms "person" and "group" have the
meanings used for purposes of Rules 13d-3 and 13d-5 under the Securities
Exchange Act of 1934 and the term "beneficial owner" has the meaning used in
Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934. However, a
"person" will be deemed to have "beneficial ownership" of all shares that any
such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time or upon the occurrence of certain
events. The consummation of the tender offer by HardMetal will be a Change of
Control event triggering these repurchase obligations.
On or before the repurchase date, we will
. accept for payment notes or portions of notes properly tendered pursuant
to the repurchase offer;
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<PAGE>
. deposit with the paying agent cash sufficient to pay the repurchase
price of all notes so tendered; and
. deliver to the trustee the notes so accepted, together with an officers'
certificate listing the notes or portions of the notes being purchased
by us.
The paying agent will promptly mail to the holders whose notes have been
accepted payment in an amount equal to the repurchase price, and the trustee
will promptly authenticate and mail or deliver to these holders a new note or
notes equal in principal amount to any unredeemed portion of the notes
surrendered. Any notes not so accepted will be promptly mailed or delivered by
us to their holders. We will publicly announce the results of the repurchase
offer on or as soon as practicable after the repurchase date.
The phrase "all or substantially all" of our assets is likely to be
interpreted by reference to applicable state law at the relevant time and will
be dependent on the facts and circumstances existing at such time. As a result,
there may be some degree of uncertainty in ascertaining whether a sale or
transfer of "all or substantially all" of our assets has occurred.
The Change of Control repurchase feature of the notes may make more
difficult or discourage a takeover of PLATINUM technology International and,
thus, the removal of incumbent management. The Change of Control purchase
feature resulted from negotiations between us and the initial purchasers.
The provisions of the indenture relating to a Change of Control may not
afford the holders protection in the event of a highly leveraged transaction,
reorganization, restructuring, merger, spin-off or similar transaction that may
adversely affect holders, if the transaction does not constitute a Change of
Control as set forth above. Further, the right to require us to repurchase
notes as a result of the occurrence of a Change of Control could create an
event of default under Senior Indebtedness as a result of which any repurchase
could, absent a waiver, be blocked by the subordination provisions of the
notes. In addition, we may not have sufficient financial resources available to
fulfill our obligation to repurchase the notes upon a Change of Control or to
repurchase other debt securities of us or our Subsidiaries providing similar
rights to the holders thereof.
To the extent applicable, we will comply with Section 14 of the Securities
Exchange Act of 1934 and the provisions of Regulation 14E and any other tender
offer rules under the Securities Exchange Act of 1934 and any other securities
laws, rules and regulations that may then be applicable to any offer by us to
purchase the notes at the option of holders upon a Change of Control.
Limitation on Merger, Sale or Consolidation
The indenture provides that we may not, directly or indirectly, consolidate
with or merge with or into another person or sell, lease, convey or transfer
all or substantially all of our assets (computed on a consolidated basis),
whether in a single transaction or a series of related transactions, to another
person or group of affiliated persons, unless:
. either (1) in the case of a merger or consolidation, we are the
surviving entity or (2) the resulting, surviving or transferee entity is
a corporation organized under the laws of the U.S., any state of the
U.S. or the District of Columbia and expressly assumes by supplemental
indenture all of our obligations in connection with the notes and the
indenture;
. no default or event of default shall exist or shall occur immediately
before or after giving effect on a pro forma basis to such transaction;
. we have delivered to the trustee an officers' certificate and an opinion
of counsel, each stating that such consolidation, merger or transfer
and, if a supplemental indenture is required, such supplemental
indenture comply with the indenture and that all conditions precedent
relating to such transactions have been satisfied; and
. the resulting, surviving or transferee entity, unless it is our
Subsidiary, immediately after the transaction has a consolidated net
worth not less than our consolidated net worth immediately prior to the
transaction.
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<PAGE>
Upon any such consolidation or merger or any transfer of all or
substantially all of our assets, the successor corporation formed by such
consolidation or into which we merged or to which such transfer is made shall
succeed to, and be substituted for, and may exercise our rights and powers
under the indenture with the same effect as if such successor corporation had
been named as us, and we will be released from our obligations under the
indenture and the notes, except as to any obligations that arise from or as a
result of such transaction. However, if the successor corporation is our
Subsidiary, the consolidated net worth of which is less than that of us
immediately prior to such merger, consolidation, sale, lease, conveyance or
transfer, we will not be released from such obligations but will remain jointly
and severally liable for such obligations with the successor corporation.
Reports
Whether or not we are subject to the reporting requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934, we will deliver to the trustee
and to each holder of notes, within 30 days after we are or would have been
required to file them with the SEC, annual and quarterly consolidated financial
statements substantially equivalent to financial statements that would have
been included in reports filed with the SEC if we were subject to the
requirements of Section 13 or 15(d) of the Exchange Act. These financial
statements will include, with respect to annual information only, a report by
our certified independent public accountants as would be required in reports to
the SEC, together with management's discussion and analysis of results of
operations and financial condition as would be so required.
Events of Default and Remedies
The indenture defines an event of default as:
(1) our failure to pay any installment of interest on, or additional
amounts with respect to, the notes as and when due and payable and the
continuance of any such failure for 30 days,
(2) our failure to pay all or any part of the principal of, or premium,
if any, on the notes when they become due and payable at maturity,
redemption, by acceleration or otherwise, including pursuant to any
repurchase offer;
(3) our failure to perform any conversion of any notes required under
the indenture for a period of 30 days,
(4) our failure to observe or perform any other covenant or agreement
contained in the notes or the indenture and, subject to certain exceptions,
the continuance of the failure for a period of 60 days after written notice
is given to us by the trustee or to us and the trustee by the holders of at
least 25% in aggregate principal amount of the notes outstanding,
(5) certain events of bankruptcy, insolvency or reorganization in
respect of us or any of our Significant Subsidiaries, and
(6) a default in the payment of principal at maturity, or an
acceleration for any other reason of the maturity, of indebtedness of us or
any of our Subsidiaries in the principal amount, individually or in the
aggregate, of greater than $25,000,000.
The indenture provides that if a default occurs and is continuing, the trustee
must, within 90 days after the occurrence of such default, give notice of the
default to the holders of the notes.
The indenture provides that if an event of default occurs and is continuing
(other than an event of default specified in clause (5) above), then in every
such case, unless the principal of all of the notes has already become due and
payable, either the Trustee or the holders of 25% in aggregate principal amount
of the notes then outstanding, by notice in writing to us and to the trustee if
given by holders (an "Acceleration Notice"), may declare all principal and
accrued interest and additional amounts on the notes to be due and payable
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<PAGE>
immediately. If an event of default specified in clause (5) above occurs, all
principal and accrued interest thereon will be immediately due and payable on
all outstanding notes without any declaration or other act on the part of the
trustee or the holders. The holders of not less than a majority in aggregate
principal amount of notes generally are authorized to rescind the acceleration
if all existing events of default, other than the nonpayment of the principal
of, premium, if any, and interest on, the notes that have become due solely by
the acceleration, have been cured or waived.
Prior to the declaration of acceleration of the maturity of the notes, the
holders of a majority in aggregate principal amount of the notes at the time
outstanding may waive on behalf of all the holders any default, except a
default in the payment of principal of, premium, if any, or interest on any
note not yet cured, or a default in any covenant or provision that cannot be
modified or amended without the consent of the holder of each outstanding note
affected. Subject to the provisions of the indenture relating to the duties of
the trustee, the trustee will be under no obligation to exercise any of its
rights or powers under the indenture at the request, order or direction of any
of the holders, unless such holders have offered to the trustee reasonable
security or indemnity. Subject to all provisions of the indenture and
applicable law, the holders of a majority in aggregate principal amount of the
notes at the time outstanding will have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the trustee,
or exercising any trust or power conferred on the trustee.
Amendments and Supplements
The indenture contains provisions permitting us and the trustee to enter
into a supplemental indenture for certain limited purposes without the consent
of the holders. We and the trustee are permitted to amend or supplement the
indenture or any supplemental indenture or modify the rights of the holders
with the consent of the holders of not less than a majority in aggregate
principal amount of the notes at the time outstanding. However, no such
modification may, without the consent of each affected holder:
. change the Stated Maturity of any note or reduce the principal amount or
the rate, or extend the time for payment, of interest or any premium
payable upon the redemption of such note, or change our obligation to
pay additional amounts in a manner adverse to the holders or change the
place of payment where, or the coin or currency in which, any note or
any premium or the interest on such note is payable, or impair the right
to institute suit for the enforcement of any such payment or the
conversion of any note on or after its date (including, in the case of
redemption, on or after the redemption date), or reduce the repurchase
price, or alter the change of control provisions or redemption
provisions in a manner adverse to the holders;
. reduce the percentage in principal amount of the outstanding notes, the
consent of whose holders is required for any such amendment,
supplemental indenture or waiver provided for in the indenture;
. adversely affect the right of such holder to convert notes; or
. modify any of the waiver provisions, except to increase any required
percentage or to provide that certain other provisions of the indenture
cannot be modified or waived without the consent of the holder of each
outstanding note affected thereby.
No Personal Liability of Stockholders, Officers, Directors and Employees
No stockholder, employee, officer or director of us or of any successor
corporation will have any personal liability relating to our obligations under
the indenture or the notes due to his or her status as stockholder, employee,
officer or director.
Transfer and Exchange
A holder may transfer or exchange the notes in accordance with the
indenture. We may require a holder to furnish appropriate endorsements and
transfer documents and to pay any taxes and fees required by law or the
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<PAGE>
indenture. We are not required to transfer or exchange any notes selected for
redemption. Also, we are not required to transfer or exchange any notes for a
period of 15 days before a selection of notes to be redeemed.
The registered holder of a note may be treated as its owner for all
purposes.
Governing Law
The indenture, the notes and the registration rights agreement are governed
by the laws of the State of New York.
Same-Day Funds Settlement and Payment
We are required to make payments on the notes represented by the Global
Note, including principal, premium, if any, and interest and additional
amounts, by wire transfer of immediately available funds to the accounts
specified by DTC. For notes represented by Certificated Notes, we will make all
payments of principal, premium, if any, and interest, by mailing a check to
each holder's registered address. The notes trade in DTC's Same-Day Funds
Settlement System until maturity, or until the notes are issued in certificated
form. DTC will therefore require secondary market trading activity in the notes
to settle in immediately available funds. We cannot assure you as to the
effect, if any, of settlement in immediately available funds on trading
activity in the notes.
Registration Rights
We entered into a registration rights agreement with the initial purchasers
of the notes. Under this agreement, we are required, at our expense for the
benefit of the holders of the notes and the shares of common stock issuable
upon their conversion (together, the "Registrable Securities") to:
. use reasonable efforts to file with the SEC within 90 days after
December 16, 1997, a shelf registration statement covering resales of
the Registrable Securities,
. use reasonable efforts to cause the shelf registration statement to be
declared effective under the Securities Act within 180 days after the
date of original issuance of the notes, and
. use reasonable efforts to keep effective the shelf registration
statement until the second anniversary of the last date of original
issuance of notes or such earlier date as all Registrable Securities
will have been disposed of or on which all Registrable Securities held
by Persons that are not our affiliates may be resold without
registration pursuant to Rule 144(k) under the Securities Act of 1933
(the "Effectiveness Period").
This registration statement has been filed pursuant to our obligations under
the registration rights agreement. We will be permitted to suspend the use of
the prospectus which is part of the shelf registration statement in connection
with the sales of the Registrable Securities during certain periods of time
under certain circumstances relating to pending corporate developments and
other events. We will provide to each holder of Registrable Securities copies
of the prospectus that is a part of the shelf registration statement, notify
each holder when the shelf registration statement has become effective and take
other actions as required to permit public resales of the Registrable
Securities. A holder of Registrable Securities that sells such Registrable
Securities pursuant to the shelf registration statement will be subject to
certain civil liability provisions under the Securities Act in connection with
these sales and will be bound by the provisions of the registration rights
agreement, including indemnification obligations.
If during the Effectiveness Period the shelf registration statement ceases
to be effective for more than 90 days or we suspend the use of the prospectus
which is a part of the registration statement for more than 90 days, whether or
not consecutive, during any 12-month period, then the interest rate borne by
affected notes will increase by an additional 0.50% per year from the 91st day
of the applicable 12-month period the shelf
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registration statement is no longer effective or we suspend the use of the
prospectus which is a part of the shelf registration statement, as the case may
be, until the earlier of such time as (1) the shelf registration statement
again becomes effective, (2) the use of the related prospectus ceases to be
suspended or (3) the Effectiveness Period expires. The additional interest will
be paid semi-annually in arrears, with the first semi-annual payment due on the
first interest payment date following the date on which such additional
interest begins to accrue. On December 31, 1998, we suspended use of the
prospectus contained in the shelf registration statement we filed on March 16,
1998. As a result we are required to pay additional interest on the notes
covered by this prospectus from the period of April 1, 1999, the 91st day of
the suspension, until the shelf registration statement of which this prospectus
is a part is declared effective and this prospectus becomes available for use
by holders of the notes and the shares of common stock. We agreed in the
registration rights agreement to use our reasonable efforts to cause the common
stock issuable upon conversion of the notes to be listed on the Nasdaq National
Market or, if the common stock is not then listed on the Nasdaq National
Market, to be listed on such exchange or market in the United States as the
common stock is then listed, upon effectiveness of the shelf registration
statement.
Notes sold by a selling securityholder pursuant to such shelf registration
statement will be represented by a global note with a new International
Securities Identification Number ("ISIN"), and any beneficial interests held in
such global note with the new ISIN through DTC or Euroclear or Cedel will not
be subject to any restrictions on transfer. We do not anticipate that the notes
sold pursuant to such shelf registration statement will be listed on any
securities exchange or automated quotation system inside or outside of the
United States.
Certain Definitions
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to close.
"Capital Stock" means, for any corporation, any and all shares, interests,
rights to purchase (other than convertible or exchangeable Indebtedness),
warrants, options, participations or other equivalents of or interests in stock
issued by that corporation.
"Designated Senior Indebtedness" means any particular Senior Indebtedness in
which the instrument creating or evidencing the Senior Indebtedness or the
assumption or guarantee of the Senior Indebtedness (or related agreements or
documents to which we are a party) expressly provides that the Senior
Indebtedness will be "Designated Senior Indebtedness" for purposes of the
indenture, provided that the instrument, agreement or other document may place
limitations and conditions on the right of the Senior Indebtedness to exercise
the rights of Designated Senior Indebtedness.
"Indebtedness" of any person means, without duplication, (a) all liabilities
and obligations, contingent or otherwise, of the person, (1) in respect of
borrowed money, whether or not the recourse of the lender is to the whole of
the assets of the person or only to a portion of the assets, (2) evidenced by
bonds, notes, debentures or similar instruments, (3) representing the balance
deferred and unpaid of the purchase price of any property or services, except
such as would constitute trade payables to trade creditors in the ordinary
course of business, (4) evidenced by bankers' acceptances or similar
instruments issued or accepted by banks, (5) for the payment of money relating
to a capitalized lease obligation, or (6) evidenced by a letter of credit or a
reimbursement obligation of the person with respect to any letter of credit;
(b) all net obligations of such person under interest swap and hedging
obligations; (c) all liabilities of others of the kind described in the
preceding clauses (a) or (b) that such person has guaranteed or that is
otherwise its legal liability and all obligations to purchase, redeem or
acquire any Capital Stock; and (d) any and all deferrals, renewals, extensions,
refinancings and refundings of any liability of the kind described in any of
the preceding clauses (a), (b) or (c), or this clause (d), whether or not
between or among the same parties.
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"Junior Securities" of any person means any qualified capital stock and any
Indebtedness of the person that is subordinated in right of payment to the
notes and has no scheduled installment of principal due, by redemption, sinking
fund payment or otherwise, on or prior to December 15, 2002.
"Senior Indebtedness" means our Indebtedness, whether outstanding on the
date of the Indenture, or created, incurred, assumed, guaranteed or in effect
guaranteed by us after December 15, 1997 unless the instrument creating or
evidencing such Indebtedness provides that such Indebtedness is not senior or
superior in right of payment to the notes or to other Indebtedness which is
equal with, or subordinated to, the notes; provided that in no event will
Senior Indebtedness include (a) Indebtedness of us owed or owing to any of our
Subsidiaries or any officer, director or employee of us or any four
Subsidiaries, (b) Indebtedness to trade creditors or (c) any liability for
taxes owed or owing by us or (d) any Indebtedness of us under our 6 3/4%
convertible subordinated notes due 2001.
"Significant Subsidiary" means any Subsidiary which is a "significant
subsidiary" of us within the meaning of Rule 1-02(w) of Regulation S-X of the
SEC as in effect as of the date of the Indenture.
"Subsidiary," with respect to any person, means (1) a corporation a majority
of whose capital stock with voting power normally entitled to vote in the
election of directors is at the time, directly or indirectly, owned by the
person, by the person and one or more Subsidiaries of the person or by one or
more Subsidiaries of the person, (2) a partnership in which the person or a
Subsidiary of the person is, at the time, a general partner and owns alone or
together with one or more Subsidiaries of the person a majority of the
partnership interests, or (3) any other person, other than a corporation or
partnership in which the person, one or more Subsidiaries of the person, or the
person and one or more Subsidiaries of the person, directly or indirectly, at
the date of determination thereof, has at least a majority ownership interest.
Relationship with Trustee
We currently have an unsecured line of credit of $65,000,000 with the
trustee. As of April 23, 1999, we had $20,000,000 in outstanding borrowings
under this line of credit. The trustee also issues letters of credit to us
pursuant to the credit agreement. As of April 23, 1999, we had aggregate
letters of credit outstanding for approximately $12,663,000 with expiration
dates ranging from July 1999 through June 2000. We maintain our principal
checking account at the trustee, which also serves as our primary depositary.
The trustee also provides us with miscellaneous other banking and related
services.
CERTAIN FEDERAL TAX CONSIDERATIONS
The following summary describes certain U.S. federal income tax consequences
of ownership and disposition of the notes and common stock into which the notes
may be converted. This summary is based upon the Internal Revenue Code of 1986,
as amended (the "Code"), Treasury Regulations, Internal Revenue Service ("IRS")
rulings and judicial decisions now in effect. All of these are subject to
change, possibly with retroactive effect, or different interpretations. This
summary does not cover all aspects of U.S. federal income taxation that may be
relevant to particular holders such as dealers in securities, banks, insurance
companies, tax-exempt organizations, and persons holding notes or common stock
as part of a hedging or conversion transactions or straddles or persons deemed
to sell notes or common stock under the constructive sale provisions of the
Code. The summary also does not discuss any aspect of state, local or foreign
law, or U.S. federal estate and gift tax law as applicable to U.S. Holders (as
defined below). In addition, it is limited to persons who purchase and hold the
notes and common stock as "capital assets" within the meaning of Section 1221
of the Code.
YOU SHOULD CONSULT YOUR OWN TAX ADVISOR REGARDING THE FEDERAL, STATE, LOCAL
AND FOREIGN TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE
NOTES AND THE COMMON STOCK.
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U.S. Holders
For purposes of the following discussion, the term "U.S. Holder" means the
beneficial holder of a note or common stock that for United States federal
income tax purposes is:
. a citizen or resident alien (as defined in Section 7701 (b) of the Code)
of the United States;
. a corporation, partnership or other entity formed under the laws of the
United States or any political subdivision of the United States;
. an estate the income of which is subject to U.S. federal income taxation
regardless of its source;
. in general, a trust subject to the primary supervision of a court within
the United States and the control of a United States person as described
in Section 7701 (a)(30) of the Code; and
. any other person whose income or gain with respect to a note or common
stock is effectively connected with the conduct of a United States trade
or business.
Interest
Stated interest on the notes will generally be includable in a U.S. Holder's
gross income and taxable as ordinary income for U.S. federal income tax
purposes at the time it is paid or accrued in accordance with the U.S. Holder's
regular method of accounting. Our failure to file an effective shelf
registration statement as described under "Description of Notes--Registration
Rights" will cause additional interest to accrue on the notes. A U.S. Holder
will be required to include this interest in its gross income when the interest
is paid or accrued. According to Treasury Regulations, the possibility of a
change in the interest rate will not affect the amount of interest income
recognized by a holder, or the timing of such recognition, if the likelihood of
the change, as of the date the debt obligations are issued, is remote. We
believe that the likelihood of a change in the interest rate on the notes is
remote and do not intend to treat the possibility of a change in the interest
rate as affecting the yield to maturity of any note. We have informed our
counsel that these notes were issued with no more than a de minimis amount of
original issue discount.
Conversion of Notes Into Common Stock
A U.S. Holder generally will not recognize any income, gain or loss upon
conversion of a note into common stock except to the extent the common stock is
considered attributable to accrued interest not previously included in income,
which is taxable as ordinary income, or with respect to cash received in lieu
of a fractional share of common stock. The adjusted basis of shares of common
stock received on conversion will equal the adjusted basis of the note
converted, reduced by the portion of adjusted basis allocated to any fractional
share of common stock exchanged for cash. The holding period of the common
stock received on conversion will generally include the period during which the
converted notes were held. However, a U.S. Holder's tax basis in shares of
common stock considered attributable to accrued interest as described above
generally will equal the amount of the accrued interest included in income. The
holding period for the shares shall begin as of the date of conversion.
The conversion price of the notes is subject to adjustment under certain
circumstances. Section 305 of the Code and the related Treasury Regulations
issued may treat the holders of the notes as having received a constructive
distribution, resulting in ordinary income, to the extent of our current and/or
accumulated earnings and profits, if, and to the extent that, certain
adjustments in the conversion price that may occur in limited circumstances,
particularly an adjustment to reflect a taxable dividend to holders of common
stock, increase the proportionate interest of a holder of notes in the fully
diluted common stock, whether or not the holder ever exercises its conversion
privilege. Moreover, if there is not a full adjustment to the conversion ratio
of the notes to reflect a stock dividend or other event increasing the
proportionate interest of the holders of outstanding
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common stock in our assets or earnings and profits, then such increase in the
proportionate interest of the holders of the common stock generally will be
treated as a distribution to such holders, taxable as ordinary income to the
extent of our current and/or accumulated earnings and profits. In any such
case, corporate holders of the notes may be entitled to a dividends received
deduction.
Market Discount
Under the market discount rules, if a holder of a note purchases it at
market discount (i.e., at a price below its stated redemption price at
maturity) in excess of a statutorily-defined de minimis amount and later
recognizes gain upon a disposition or retirement of the note, then the lesser
of the gain recognized or the portion of the market discount that accrued on a
ratable basis (or, if elected, on a constant interest rate basis) generally
will be treated as ordinary income at the time of the disposition. Moreover,
any market discount on a note may be taxable to an investor to the extent of
appreciation at the time of certain otherwise non-taxable transactions (e.g.,
gifts). Under Treasury Regulations to be prescribed, any accrued market
discount not previously taken into income prior to a conversion of a note,
however, could carry over to the common stock received on conversion and be
treated as ordinary income upon a subsequent disposition of the common stock to
the extent of any gain recognized on the disposition. In addition, absent an
election to include market discount in income as it accrues, a holder of a
market discount debt instrument may be required to defer a portion of any
interest expense that otherwise may be deductible on any indebtedness incurred
or maintained to purchase or carry the debt instrument until the holder
disposes of the debt instrument in a taxable transaction. If HardMetal
completes its tender offer for our stock, U.S. Holders that purchased their
notes at market discount that elect to have us repurchase their notes under the
"Change of Control" provisions of the indenture may have a portion of their
redemption proceeds taxable as ordinary income under the market discount rules.
Acquisition Premium
If an investor purchases a note at a premium (defined under the Treasury
Regulations as an amount paid in excess of all amounts payable on the
instrument after the purchase other than qualified stated interest) may elect
to amortize the "amortizable bond premium" (defined generally under the Code as
an amount paid in excess of the amount payable at maturity). In that case, the
amount required to be included in the holder's income each year with respect to
interest on the note will be reduced by the amount of amortizable bond premium
allocable, based on the holder's yield to maturity, to that year. The election
will apply to all debt instruments, other than bonds the interest on which is
excludeable from gross income, held by the holder at the beginning of the first
taxable year to which the election applies or later acquired by the holder. The
election is irrevocable without the consent of the Internal Revenue Service.
Generally, an investor that purchases a note at a premium that does not elect
to amortize the amortizable bond premium will recognize a loss when the note is
retired, while the interest from the note will be fully taxable when paid. If
HardMetal completes its tender offer for our stock, U.S. Holders that purchased
their notes at a premium that elect to have us repurchase their notes under the
"Change of Control" provisions of the indenture and that did not elect to
amortize the amortizable bond premium will recognize a loss when their notes
are purchased.
Sale, Exchange or Retirement of the Notes
Each U.S. Holder generally will recognize gain or loss upon the sale,
exchange, redemption, retirement or other disposition of notes, including a
repurchase of notes held by U.S. Holders that elect to have us repurchase their
notes if HardMetal completes its tender offer for our stock, measured by the
difference, if any, between:
. the amount of cash and the fair market value of any property received,
except to the extent that the cash or other property is attributable to
the payment of accrued interest not previously included in income, which
amount will be taxable as ordinary income;
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. the holder's adjusted tax basis in the notes.
Any such gain or loss recognized on the sale, exchange, redemption,
retirement or other disposition of a note should be capital gain or loss and
will generally be long-term capital gain or loss if the note has been held or
deemed held for more than 12 months at the time of the sale or exchange. The
maximum tax rate for individual taxpayers on net long-term capital gains (i.e.,
the excess of net long-term capital gain over net short-term capital loss) is
20% for most assets held for more than twelve months at the time of
disposition. A U.S. Holder's initial basis in a note will be the amount paid
for the note.
The Common Stock
Distributions, if any, paid on the common stock after a conversion, to the
extent made from our current and/or accumulated earnings and profits, as
determined for U.S. federal income tax purposes, will be included in a U.S.
Holder's income as ordinary income as they are paid. Corporate holders of the
notes may be entitled to a dividends received deduction. Gain or loss realized
on the sale or exchange of common stock will equal the difference between the
amount realized on the sale or exchange and the U.S. Holder's adjusted tax
basis in the common stock. The gain or loss will generally be long-term capital
gain or loss if the holder has held or is deemed to have held the common stock
for more than 12 months. The maximum tax rate for individual taxpayers on net
long-term capital gains (the excess of net long-term capital gain over net
short-term capital loss) is 20% for most assets held for more than twelve
months at the time of disposition.
Information Reporting and Backup Withholding
A U.S. Holder of the notes or common stock may be subject to "backup
withholding" at a rate of 31% with respect to certain "reportable payments,"
including interest payments, dividend payments and, under certain
circumstances, principal payments on the notes. These backup withholding rules
apply if the holder, among other things:
. fails to furnish a social security number or other taxpayer
identification number ("TIN") certified under penalty of perjury within
a reasonable time after the request for the TIN;
. furnishes an incorrect TIN;
. fails to report properly interest or dividends; or
. under certain circumstances, fails to provide a certified statement,
signed under penalties of perjury, that the TIN furnished is the correct
number and that such holder is not subject to backup withholding.
A holder that does not provide us with its correct TIN also may be subject to
penalties imposed by the IRS. Any amount withheld from a payment to a holder
under the backup withholding rules is creditable against the holder's federal
income tax liability, provided that the required information is furnished to
the IRS. Backup withholding will not apply, however, with respect to payments
made to certain holders, including corporations, tax-exempt organizations and
certain foreign persons, provided their exemptions from backup withholding are
properly established.
We will report to the U.S. Holders of notes and common stock and to the IRS
the amount of any "reportable payments" for each calendar year and the amount
of tax withheld, if any, with respect to these payments.
Non-U.S. Holders
General
The following is a general discussion of certain United States federal
income and estate tax consequences of the acquisition, ownership and
disposition of notes and common stock by a "Non-U.S. Holder" and does
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not deal with tax consequences arising under the laws of any foreign, state or
local jurisdiction. As used herein, a "Non-U.S. Holder" is a person or entity
that, for United States federal income tax purposes, is not a citizen or
resident of the United States, a corporation, partnership or other entity
created or organized under the laws of the United States or a political
subdivision thereof, or an estate or trust, the income of which is subject to
United States federal income taxation regardless of its source. The tax
treatment of the holders of the notes may vary depending upon their particular
situations. You should consult your tax advisor regarding the United States
federal tax consequences of acquiring, holding and disposing of the notes and
common stock as well as any tax consequences that may arise under the laws of
any foreign, state, local or other taxing jurisdiction.
For purposes of withholding tax on interest and dividends discussed below, a
Non-U.S. Holder includes a non-resident fiduciary of an estate or trust. For
purposes of the following discussion, interest, dividends and gain on the sale,
exchange or other disposition of a note or common stock will generally be
considered to be "U.S. trade or business income" if the income or gain is:
. effectively connected with the conduct of a U.S. trade or business; or
. in the case of most treaty residents, attributable to a permanent
establishment (or, in the case of an individual, a fixed base) in the
United States.
Stated Interest
Generally any interest paid to a Non-U.S. Holder of a note that is not U.S.
trade or business income will not be subject to U.S. tax if the interest
qualifies as "portfolio interest." Generally interest on the notes will qualify
as portfolio interest if:
. the Non-U.S. Holder does not actually or constructively own 10% or more
of the total voting power of all voting stock of PLATINUM technology
International and is not a "controlled foreign corporation" as to which
PLATINUM technology International is a "related person" within the
meaning of the Code;
. the beneficial owner, under penalty of perjury, certifies that the
beneficial owner is not a U.S. person, and that certificate provides the
beneficial owner's name and address;
. the Non-U.S. Holder is not a bank receiving interest on an extension of
credit made pursuant to a loan agreement made in the ordinary course of
its trade or business; and
. the notes are in registered form.
The gross amount of payments to a Non-U.S. Holder of interest that does not
qualify for the portfolio interest exemption and that is not U.S. trade or
business income will be subject to U.S. federal income tax at the rate of 30%,
unless a U.S. income tax treaty applies to reduce or eliminate withholding.
U.S. trade or business income will be taxed at regular U.S. tax rates rather
than the 30% gross rate. In the case of a Non-U.S. Holder that is a
corporation, the U.S. trade or business income may also be subject to the
branch profits tax, which is generally imposed on a foreign corporation on the
actual or deemed repatriation from the U.S. of earnings and profits
attributable to U.S. trade or business income, at a 30% rate. The branch
profits tax may not apply, or may apply at a reduced rate, if the recipient is
a qualified resident of certain countries with which the U.S. has an income tax
treaty. To claim the benefit of a tax treaty or to claim exemption from
withholding because the income is U.S. trade or business income, the Non-U.S.
Holder must provide a properly executed Form W-8BEN or W-8ECI (for payments
made before 2000, Forms 1001 and 4224 may be used), as applicable, prior to the
payment of interest. These forms must be periodically updated.
New withholding regulations (the "New Regulations") will apply to payments
made after 1999. Under the New Regulations, the required Forms 1001 and 4224
will be replaced by a new Forms W-8BEN and W-8ECI. Under the New Regulations, a
Non-U.S. Holder that is claiming the benefits of a treaty may be
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required to obtain a U.S. taxpayer identification number and make certain
certifications to us. Special procedures are provided in the New Regulations
for payments through qualified intermediaries. You should consult your own tax
advisor regarding the effect, if any, of the New Regulations.
Dividends
In general, dividends paid to a Non-U.S. Holder of common stock will be
subject to withholding of U.S. federal income tax at a 30% rate, unless the
rate is reduced by an applicable income tax treaty. Dividends that are
connected with the holder's conduct of a trade or business in the United States
are generally subject to U.S. federal income tax at regular rates, but are not
generally subject to the 30% withholding tax if the Non-U.S. Holder files the
appropriate form with the payor, as discussed above. Any U.S. trade or business
income received by a Non-U.S. Holder that is a corporation may also, under
certain circumstances, be subject to an additional "branch profits tax" at a
30% rate or such lower rate as may be applicable under an income tax treaty.
Currently, dividends paid to an address in a foreign country generally are
presumed, absent actual knowledge to the contrary, to be paid to a resident of
that country for purposes of the withholding discussed above and for purposes
of determining the applicability of a tax treaty rate. Under Regulations, a
Non-U.S. Holder claiming the benefits of a treaty or to claim exemption from
withholding because the income is U.S. trade or business income, generally will
be required to provide a Form W-8BEN or W-8ECI (for payments made before 2000,
Forms 1001 and 4224 may be used), as applicable, prior to the payment of a
dividend. These forms must be periodically updated.
New withholding regulations (the "New Regulations") will apply to payments
made after 1999. Under the New Regulations, the required Forms 1001 and 4224
will be replaced by new Forms W-8BEN and
W-8ECI. Under the New Regulations, a Non-U.S. Holder who is claiming the
benefits of a treaty may be required to obtain a U.S. taxpayer identification
number and make certain certifications to us. Special procedures are provided
in the New Regulations for payments through qualified intermediaries. You
should consult your own tax advisor regarding the effect, if any, of the New
Regulations.
Conversion
A Non-U.S. Holder generally will not be subject to U.S. federal income tax
on the conversion of notes into common stock, except with respect to cash, if
any, received in lieu of a fractional share or interest not previously included
in income. Cash received in lieu of a fractional share may give rise to gain
that would be subject to the rules described below for the sale of notes. Cash
or common stock treated as issued for accrued interest would be treated as
interest under the rules described above.
Sale, Exchange or Redemption of Notes or Common Stock
Except as described below and subject to the discussion concerning backup
withholding, any gain realized by a Non-U.S. Holder on the sale, exchange or
redemption, including a repurchase of notes held by U.S. Holders that elect to
have us repurchase their notes if HardMetal completes its tender offer for our
stock, of a note or common stock generally will not be subject to U.S. federal
income tax, unless:
. the gain is U.S. trade or business income;
. subject to certain exceptions, the Non-U.S. Holder is an individual who
holds the note or common stock as a capital asset and is present in the
United States for 183 days or more in the taxable year of the
disposition;
. the Non-U.S. Holder is subject to tax pursuant to the provisions of U.S.
tax law applicable to certain U.S. expatriates, including certain former
citizens or residents of the United States; or
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. in the case of the disposition of common stock, we are a U.S. real
property holding corporation. We do not believe that we are currently a
"United States real property holding corporation," or that we will
become one in the future.
Federal Estate Tax
Notes held, or treated as held, by an individual who is not a citizen or
resident of the United States for federal estate tax purposes at the time of
his or her death will not be subject to U.S. federal estate tax provided that
the interest thereon qualifies as portfolio interest and was not U.S. trade or
business income. Common stock owned or treated as owned by an individual who is
not a citizen or resident of the United States for federal estate tax purposes
will be included in such individual's estate for U.S. federal income tax
purposes, unless an applicable estate tax treaty otherwise applies.
Information Reporting and Backup Withholding
We must report annually to the IRS and to each Non-U.S. Holder any interest
or dividend that is subject to withholding, or that is exempt from U.S.
withholding tax pursuant to a tax treaty, or interest that is exempt from U.S.
tax under the portfolio interest exception. Copies of these information returns
may also be made available under the provisions of a specific treaty or
agreement to the tax authorities of the country in which the Non-U.S. Holder
resides.
Treasury Regulations provide that backup withholding and additional
information reporting will not apply to payments of principal on the notes by
us to a Non-U.S. Holder if the holder certifies as to its Non-U.S. status under
penalty of perjury or otherwise establishes an exemption, provided that neither
us nor our Paying Agent has actual knowledge that the holder is a U.S. person
or that the conditions of any other exemption are not, in fact, satisfied.
The payment of the proceeds from the disposition of the notes or common
stock to or through the U.S. office of any broker, U.S. or foreign, will be
subject to information reporting and possible backup withholding unless the
owner certifies as to its Non-U.S. Holder status under penalty of perjury or
otherwise establishes an exemption, provided that the broker does not have
actual knowledge that the holder is a U.S. person or that the conditions of any
other exemption are not, in fact, satisfied. The payment of the proceeds from
the disposition of a note or common stock to or through a non-U.S. office of a
non-U.S. broker that is not a U.S. related person will not be subject to
information reporting or backup withholding. For this purpose, a "U.S. related
person" is:
. a "controlled foreign corporation" for U.S. federal income tax purposes;
. a foreign person 50% or more of whose gross income from all sources for
the three-year period ending with the close of its taxable year
preceding the payment, or for such part of the period that the broker
has been in existence, is derived from activities that are effectively
connected with the conduct of a U.S. trade or business; or
. with respect to payments made after December 31, 1999, a foreign
partnership that, at any time during its taxable year, is 50% or more
(by income or capital interest) owned by United States persons or is
engaged in the conduct of a U.S. trade or business.
In the case of the payment of proceeds from the disposition of notes or
common stock to or through a non-U.S. office of a broker that is either a U.S.
person or a U.S. related person, information reporting is required on the
payment unless the broker has documentary evidence in its files that the owner
is a Non-U.S. Holder and the broker has no knowledge to the contrary. Backup
withholding will not apply to payments made through foreign offices of a broker
that is not a U.S. person or a U.S. related person, absent actual knowledge
that the payee is a U.S. person.
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<PAGE>
Any amounts withheld under the backup withholding rules from a payment to a
Non-U.S. Holder will be allowed as a refund or a credit against the Non-U.S.
Holder's U.S. federal income tax liability, provided that the required
procedures are followed.
THE PRECEDING DISCUSSION OF CERTAIN UNITED STATES FEDERAL INCOME AND ESTATE
TAX CONSEQUENCES IS FOR GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE.
ACCORDINGLY, YOU SHOULD CONSULT YOUR OWN TAX ADVISOR AS TO PARTICULAR TAX
CONSEQUENCES OF PURCHASING, HOLDING AND DISPOSING OF THE NOTES AND THE COMMON
STOCK, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL OR FOREIGN
TAX LAWS, AND OF ANY PROPOSED CHANGES IN APPLICABLE LAWS.
PLAN OF DISTRIBUTION
We will not receive any of the proceeds of the sale of the notes or common
stock covered by this prospectus. The securities may be sold from time to time
to purchasers directly by the selling securityholders, their donees,
transferees, distributees or successors-in-interest. Alternatively, the selling
securityholders may from time to time offer the securities through brokers,
dealers or agents who may receive compensation in the form of discounts,
concessions or commissions from the selling securityholders and/or the
purchasers of the securities for whom they may act as agent.
The securities may be sold from time to time in one or more transactions at
fixed prices, at prevailing market prices at the time of sale, at varying
prices determined at the time of sale or at negotiated prices. The securities
may be sold by one or more of the following methods, without limitation:
. a block trade in which the broker or dealer so engaged will attempt to
sell the securities as agent but may position and resell a portion of
the block as principal to facilitate the transaction;
. purchases by a broker or dealer as principal and resale by the broker or
dealer for its account pursuant to this prospectus;
. ordinary brokerage transactions and transactions in which the broker
solicits purchasers;
. an exchange distribution in accordance with the rules of the exchange;
. face-to-face transactions between sellers and purchasers without a
broker-dealer; and
. through the writing of options.
At any time a particular offer of the securities is made, we will distribute
a revised prospectus or prospectus supplement, if required, which will set
forth the aggregate amount and type of securities being offered and the terms
of the offering, including the name or names of any underwriters, dealers or
agents, any discounts, commissions, concessions and other items constituting
compensation from the selling securityholders and any discounts, commissions or
concessions allowed or reallowed or paid to dealers. The prospectus supplement
and, if necessary, a post-effective amendment to the registration statement of
which this prospectus is a part, will be filed with the SEC to reflect the
disclosure of additional information with respect to the distribution of the
securities. In addition, the securities covered by this prospectus may be sold
in private transactions or under Rule 144 rather than pursuant to this
prospectus.
To our knowledge, there are currently no plans, arrangements or
understandings between any selling securityholders and any broker, dealer,
agent or underwriter regarding the sale of the securities by the selling
securityholders. A selling securityholder may sell any or all of the securities
offered by it under this prospectus. Additionally, a selling securityholder may
transfer, devise or gift the securities by other means not described in this
prospectus.
35
<PAGE>
The selling securityholders and any brokers, dealers or agents who
participate in the distribution of the securities may be deemed to be
"underwriters." Any profits on the sale of the securities by them and any
discounts, commissions or concessions received by any participating brokers,
dealers or agents might be deemed to be underwriting discounts and commissions
under the Securities Act of 1933. To the extent the selling securityholders may
be deemed to be underwriters, the selling securityholders may be subject to
certain statutory liabilities, including Sections 11, 12 and 17 of the
Securities Act of 1933 and Rule 10b-5 under the Securities Exchange Act of
1934.
The selling securityholders and any other person participating in such
distribution will be subject to applicable provisions of the Exchange Act and
the related rules and regulations, including Regulation M, which may limit the
timing of purchases and sales of any of the securities by the selling
securityholders and any such other person. Further, Regulation M of the
Exchange Act may restrict the ability of any person engaged in the distribution
of the securities to engage in market-making activities with respect to the
particular securities being distributed for a period of up to five business
days prior to the commencement of the distribution. These limitations and
restrictions may affect the marketability of the securities and the ability of
any person or entity to engage in market-making activities with respect to the
securities.
Pursuant to the registration rights agreement entered into in connection
with the offer and sale of the notes by us, we and each of the selling
securityholders will be indemnified by the other against certain liabilities,
including certain liabilities under the Securities Act, or will be entitled to
contribution in connection with the liabilities.
We have agreed to pay the expenses incurred in connection with the
performance of our registration obligations, other than commissions, fees and
discounts of underwriters, brokers, dealers and agents.
LEGAL MATTERS
Katten Muchin & Zavis, Chicago, Illinois will pass upon certain legal
matters with respect to the validity of the securities.
EXPERTS
The consolidated financial statements and the related consolidated financial
statement schedule of PLATINUM technology International, inc., as of December
31, 1997 and 1998 and for each of the years in the three-year period ended
December 31, 1998, incorporated by reference in this prospectus from PLATINUM
technology International, inc.'s Annual Report on Form 10-K for the year ended
December 31, 1998 have been audited by KPMG LLP, independent certified public
accountants, as set forth in their reports.
The consolidated balance sheet of Logic Works, Inc. and subsidiaries as of
December 31, 1997, and the related consolidated statements of operations,
changes in stockholders' equity, and cash flows for the years ended December
31, 1997 and 1996 referenced in KPMG LLP's independent auditors' reports
relating to PLATINUM technology International, inc.'s 1998 and 1997
consolidated financial statements, have been audited by Ernst & Young LLP,
independent auditors, to the extent indicated in their report thereon appearing
in PLATINUM technology International, inc.'s 1998 Annual Report (Form 10-K)
filed on March 31, 1999.
The consolidated balance sheet of Mastering, Inc. and subsidiaries as of
December 31, 1997, and the related consolidated statements of operations,
changes in stockholders' equity, and cash flows for the years ended December
31, 1997 and 1996 referenced in KPMG LLP's independent auditors' reports
relating to PLATINUM technology International, inc's. 1998 and 1997
consolidated financial statements, have been audited by Arthur Andersen LLP,
independent auditors, to the extent indicated in their report thereon appearing
in PLATINUM technology International, inc.'s 1998 Annual Report (Form 10-K)
filed on March 31, 1999.
36
<PAGE>
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 fees and
expenses payable in connection with the issuance and distribution of the
securities pursuant to the prospectus contained in this registration statement.
PLATINUM technology International will pay all of these expenses.
Securities and Exchange Commission registration fee
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee............. $ 15,777
Accountants fees and expenses................................... 30,000
Legal fees and expenses......................................... 40,000
Miscellaneous expenses.......................................... 14,223
--------
Total....................................................... $100,000
========
</TABLE>
Item 15. Indemnification of Directors and Officers.
Article Ten of PLATINUM technology International's Restated Certificate of
Incorporation provides that PLATINUM technology International shall indemnify
its directors to the full extent permitted by the Delaware General Corporation
Law and may indemnify its officers to such extent, except that PLATINUM
technology International shall not be obligated to indemnify any such person
(1) with respect to proceedings, claims or actions initiated or brought
voluntarily by any such person and not by way of defense, or (2) for any
amounts paid in settlement of an action indemnified against by PLATINUM
technology International without the prior written consent of PLATINUM
technology International. With the approval of its stockholders, PLATINUM
technology International has entered into indemnity agreements with each of its
directors and certain of its officers. These agreements may require PLATINUM
technology International, among other things, to indemnify such officers and
directors against certain liabilities that may arise by reason of their status
or service as directors or officers, to advance expenses to them as they are
incurred, provided that they undertake to repay the amount advanced if it is
ultimately determined by a court that they are not entitled to indemnification,
and to obtain directors' and officers' liability insurance if available on
reasonable terms.
In addition, Article Nine of PLATINUM technology International's Restated
Certificate of Incorporation provides that a director of PLATINUM technology
International shall not be personally liable to PLATINUM technology
International or its stockholders for monetary damages for breach of his or her
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to PLATINUM technology International 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 Delaware General Corporation Law, or (iv) for any transaction from which
the director derives an improper personal benefit.
Article Ten of each of PLATINUM technology's and PLATINUM technology IP's
Certificate of Incorporation provides that the corporation shall indemnify its
directors to the full extent permitted by the Delaware General Corporation Law.
In addition, Article Nine of each of these corporation's Certificate of
Incorporation provides that the personal liability of their directors is
eliminated to the full extent permitted by the Delaware General Corporation
Law.
Reference is made to Section 145 of the Delaware General Corporation Law
which provides for indemnification of directors and officers in certain
circumstances.
PLATINUM technology International has purchased an insurance policy under
which it is entitled to be reimbursed for certain indemnity payments it is
required or permitted to make to its directors and officers.
II-1
<PAGE>
Item 16. Exhibits.
<TABLE>
<CAPTION>
<C> <S> <C>
4.1 Restated Certificate of Incorporation of PLATINUM
technology International, inc., as amended, incorporated
by reference to Exhibit 3.1 to PLATINUM technology
International's Registration Statement on Form S-4,
Registration No. 333-71637 (the "1999 S-4").
4.3 Bylaws of PLATINUM technology International, as amended,
incorporated by reference to Exhibit 3.2 to the 1999 S-4.
4.4 Indenture, dated as of December 15, 1997 between PLATINUM
technology International and American National Bank and
Trust Company of Chicago, N.A., as Trustee, incorporated
by reference to Exhibit 4.6 of PLATINUM technology
International's Annual Report on Form 10-K for the year
ended December 31, 1997.
4.5 Form of Note (included in Exhibit 4.4).
4.6 Registration Rights Agreement, dated as of December 15,
1997, between PLATINUM and Deutsche Morgan Grenfell Inc.
(n/k/a Deutsche Bank Securities, Inc.), incorporated by
reference to Exhibit 4.6 to PLATINUM technology
International's Registration Statement on Form S-3,
Registration No. 333-48047 (the "1998 S-3").
4.7 Specimen stock certificate representing common stock,
incorporated by reference to Exhibit 4.1 to PLATINUM
technology International's Registration Statement on Form
S-1, Registration No. 33-39233.
4.8 Rights Agreement, dated as of December 21, 1995, between
PLATINUM technology International, inc. and Harris Trust
and Savings Bank, incorporated by reference to Exhibit 1
to PLATINUM technology International's Registration
Statement on Form 8-A, filed December 26, 1995 (the
"Rights Agreement").
4.9 Amendment No. 1, dated as of March 29, 1999, to the Rights
Agreement, incorporated by reference to PLATINUM
technology International's Registration Statement on Form
8-A/A (Amendment No. 2), filed with the Commission on
March 31, 1999.
4.10 Supplemental Indenture, dated as of January 1, 1999, among
PLATINUM technology International, PLATINUM technology,
PLATINUM technology IP and American National Bank and
Trust Company of Chicago, N.A., as Trustee.
5 Opinion of Katten Muchin & Zavis as to the legality of the
securities being registered (including consent).
12 Computation of Ratios of Earnings to Fixed Charges,
incorporated by reference to Exhibit 12 to PLATINUM
technology International's Annual Report on Form 10-K for
the year ended December 31, 1998.
23.1 Consent of KPMG LLP with respect to PLATINUM technology
International's financial statements.
23.2 Consent of Arthur Andersen LLP with respect to Mastering's
financial statements.
23.3 Consent of Ernst & Young LLP with respect to Logic Works'
financial statements.
23.4 Consent of Katten Muchin & Zavis (contained in their
opinion filed as Exhibit 5 hereto).
24 Power of Attorney (contained on the signature page of this
Registration Statement).
25 Form T-1 for American National Bank and Trust Company of
Chicago, N.A., as Trustee, incorporated by reference to
Exhibit 25.1 to the 1998 S-3.
</TABLE>
II-2
<PAGE>
Item 17. Undertakings
(a) The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement 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, each such post-effective amendment that contains a form of
prospectus 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 hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of PLATINUM technology International, inc.'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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the registrants pursuant to the foregoing provisions, or
otherwise, the registrants have been advised that in the opinion of the
Commission such indemnification is against public policy as expressed
in the Securities 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 any of the registrants 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 registrants 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-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, PLATINUM
technology International, inc. 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 Oakbrook Terrace, State
of Illinois, on April 26, 1999.
PLATINUM technology International,
inc.
/s/ Andrew J. Filipowski
By: _________________________________
Andrew J. Filipowski
President and Chief Executive
Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Andrew J. Filipowski, Michael P. Cullinane, Larry S. Freedman and Matthew S.
Brown, and each of them, his true and lawful attorneys-in-fact and agents, with
full power of substitution, to sign on his behalf, individually and in each
capacity stated below, all amendments and post-effective amendments to this
Registration Statement on Form S-3 (including registration statements filed
pursuant to Rule 462(b) under the Securities Act of 1933, and all amendments
thereto) and to file the same, with all exhibits thereto and any other
documents in connection therewith, with the Securities and Exchange Commission
under the Securities Act of 1933, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully and to
all intents and purposes as each might or could do in person, hereby ratifying
and confirming each act that said attorneys-in-fact and agents may lawfully do
or cause to be done by virtue thereof.
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>
/s/ Andrew J. Filipowski President, Chief Executive April 26, 1999
____________________________________ Officer (principal
Andrew J. Filipowski executive officer) and a
Director
/s/ Paul L. Humenansky Executive Vice President, April 26, 1999
____________________________________ Chief Operations Officer
Paul L. Humenansky and a Director
/s/ Michael P. Cullinane Executive Vice President, April 26, 1999
____________________________________ Chief Financial Officer
Michael P. Cullinane (principal financial and
accounting officer),
Treasurer and a Director
/s/ James E. Cowie Director April 26, 1999
____________________________________
James E. Cowie
/s/ Steven D. Devick Director April 26, 1999
____________________________________
Steven D. Devick
/s/ Arthur P. Frigo Director April 26, 1999
____________________________________
Arthur P. Frigo
/s/ Gian M. Fulgoni Director April 26, 1999
____________________________________
Gian M. Fulgoni
</TABLE>
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, PLATINUM
technology, inc. 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 Oakbrook Terrace, State of Illinois, on April
26, 1999.
PLATINUM technology, inc.
/s/ Andrew J. Filipowski
By: _________________________________
Andrew J. Filipowski
President
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Andrew J. Filipowski, Michael P. Cullinane, Larry S. Freedman and Matthew S.
Brown, and each of them, his true and lawful attorneys-in-fact and agents, with
full power of substitution, to sign on his behalf, individually and in each
capacity stated below, all amendments and post-effective amendments to this
Registration Statement on Form S-3 (including registration statements filed
pursuant to Rule 462(b) under the Securities Act of 1933, and all amendments
thereto) and to file the same, with all exhibits thereto and any other
documents in connection therewith, with the Securities and Exchange Commission
under the Securities Act of 1933, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully and to
all intents and purposes as each might or could do in person, hereby ratifying
and confirming each act that said attorneys-in-fact and agents may lawfully do
or cause to be done by virtue thereof.
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>
/s/ Andrew J. Filipowski President April 26, 1999
____________________________________
Andrew J. Filipowski
/s/ Michael P. Cullinane Vice President, Treasurer April 26, 1999
____________________________________ (principal financial and
Michael P. Cullinane accounting officer) and
Director
</TABLE>
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, PLATINUM
technology, inc. 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 Oakbrook Terrace, State of Illinois, on April
26, 1999.
PLATINUM technology IP, inc.
By:/s/ Andrew J. Filipowski
Andrew J. Filipowski
President
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Andrew J. Filipowski, Michael P. Cullinane, Larry S. Freedman and Matthew S.
Brown, and each of them, his true and lawful attorneys-in-fact and agents, with
full power of substitution, to sign on his behalf, individually and in each
capacity stated below, all amendments and post-effective amendments to this
Registration Statement on Form S-3 (including registration statements filed
pursuant to Rule 462(b) under the Securities Act of 1933, and all amendments
thereto) and to file the same, with all exhibits thereto and any other
documents in connection therewith, with the Securities and Exchange Commission
under the Securities Act of 1933, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully and to
all intents and purposes as each might or could do in person, hereby ratifying
and confirming each act that said attorneys-in-fact and agents may lawfully do
or cause to be done by virtue thereof.
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>
/s/ Andrew J. Filipowski President April 26, 1999
____________________________________
Andrew J. Filipowski
/s/ Michael P. Cullinane Vice President, Treasurer April 26, 1999
____________________________________ and Director
Michael P. Cullinane
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S> <C>
4.10 Supplemental Indenture, dated as of January 1, 1999, among
PLATINUM technology International, PLATINUM technology,
PLATINUM technology IP and American National Bank and Trust
Company of Chicago, N.A., as Trustee.
5 Opinion of Katten Muchin & Zavis as to the legality of the
securities being registered (including consent).
23.1 Consent of KPMG LLP with respect to PLATINUM technology
International's financial statements.
23.2 Consent of Arthur Andersen LLP with respect to Mastering's
Financial Statements.
23.3 Consent of Ernst & Young LLP with respect to Logic Works'
Financial Statements.
23.4 Consent of Katten Muchin & Zavis (contained in their opinion
filed as Exhibit 5 hereto).
24 Power of Attorney (contained on the signature page of this
Registration Statement).
</TABLE>
II-7
<PAGE>
Exhibit 4.10
SUPPLEMENTAL INDENTURE
----------------------
PLATINUM technology, inc. ("PLATINUM"), a corporation duly organized and
existing under the laws of the State of Delaware, PLATINUM technology
Operating, inc., a corporation duly organized and existing under the laws of the
State of Delaware, PLATINUM technology IP, inc., a corporation duly organized
and existing under the laws of the State of Delaware (each of PLATINUM
technology Operating, inc. and PLATINUM technology IP, inc. is referred to
herein as a "Transferee" and are collectively referred to herein as the
"Transferees") and AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO, as
Trustee ("ANB"), a national banking association organized under the laws of the
United States of America, hereby enter into this Supplemental Indenture as of
this 1st day of January 1999.
WHEREAS, PLATINUM and ANB are parties to that certain Indenture dated as of
December 15, 1997 relating to $150,000,000 of PLATINUM's 6.25% Convertible
Subordinated Notes Due 2002 ("Indenture");
WHEREAS, as of January 1, 1999, PLATINUM has transferred to the Transferees
certain of the assets of PLATINUM by virtue of a Bill of Sale, Assignment and
Assumption Agreement between PLATINUM and the Transferees dated as of January 1,
1999;
WHEREAS, the Transferees have acquired collectively substantially all of
the assets of PLATINUM by virtue of the above transfer;
WHEREAS, each of the Transferees is a wholly owned subsidiary of PLATINUM;
WHEREAS, Article 5 of the Indenture requires that each of the Transferees
expressly assume the obligations of PLATINUM under the Indenture by entering
into this Supplemental Indenture; and
WHEREAS, Article 5 of the Indenture also requires that PLATINUM remain
jointly and severally liable with the Transferees with respect to the
obligations under the Indenture.
NOW, THEREFORE, in consideration of these facts, the parties hereby agree
to the following. Initially capitalized terms used herein but not defined
herein shall have the meanings assigned to them in the Indenture.
1. Assumption of Obligations. Pursuant to Section 5.1 of the Indenture,
each of the Transferees hereby expressly assumes the due and punctual payment of
the principal of and interest (including Additional Amounts, if any, or
Additional Interest, if any) on all of the Securities and all of the other
obligations of PLATINUM in connection with the Securities and the Indenture.
2. Obligations of PLATINUM. Pursuant to Section 5.2 of the Indenture,
PLATINUM shall remain jointly and severally liable with the Transferees for the
obligations under the Indenture.
<PAGE>
3. Officer's Certificate and Opinion of Counsel. PLATINUM has delivered
the Officer's Certificate and Opinion of Counsel relating to the Supplemental
Indenture as required by Section 5.1 of the Indenture.
4. The Indenture. As modified by this Supplemental Indenture, the
Indenture shall remain in full force and effect.
5. Counterparts. This Supplemental Indenture may be executed in any
number of counterparts and all such counterparts taken together shall be deemed
to constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first written above.
AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO, AS TRUSTEE
By /s/ Melissa Wilman
_________________________________________
Title Trust Officer
______________________________________
PLATINUM technology, inc.
By /s/ Paul Schiada
_________________________________________
Its Vice President and Senior Corporate Counsel
____________________________________________
PLATINUM technology Operating, inc.
By /s/ Paul Schiada
_________________________________________
Its Vice President and Senior Corporate Counsel
___________________________________________
PLATINUM technology IP, inc.
By /s/ Paul Schiada
_________________________________________
Its Vice President and Senior Corporate Counsel
___________________________________________
-2-
<PAGE>
Exhibit 5
[Katten Muchin & Zavis letterhead]
April 23, 1999
PLATINUM technology International, inc.
PLATINUM technology, inc.
PLATINUM technology IP, inc.
1815 South Meyers Road
Oakbrook Terrace, Illinois 60181
Re: Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
We have acted as counsel for PLATINUM technology International, inc., a
Delaware corporation ("PLATINUM International"), PLATINUM technology, inc., a
Delaware corporation, and PLATINUM technology IP, inc., a Delaware corporation
(collectively, the "Companies"), in connection with the preparation and filing
of a registration statement on Form S-3 (the "Registration Statement") with the
Securities and Exchange Commission under the Securities Act of 1933, as amended.
The Registration Statement relates to the registration (the "Registration") of
$56,750,000 aggregate principal amount of 6.25% convertible subordinated notes
due 2002 issued by PLATINUM International (the "Notes") and an indeterminate
number of shares of PLATINUM International's common stock, $.001 par value per
share, issuable upon conversion of the Notes (the "Conversion Shares"). PLATINUM
technology IP, inc. and PLATINUM technology, inc. are co-obligors on the Notes.
The Notes and the Conversion Shares are to be offered and sold by certain
selling holders (the "Selling Securityholders").
In connection with this opinion, we have relied as to matters of fact,
without investigation, upon certificates of public officials and others and upon
affidavits, certificates and written statements of directors, officers and
employees of, and the accountants and transfer agent for, the Companies. We have
also examined originals or copies, certified or otherwise identified to our
satisfaction, of such instruments, documents and records as we have deemed
relevant and necessary to examine for the purpose of this opinion, including (a)
the Registration Statement, (b) the Certificates of Incorporation of the
Companies (c) the By-Laws of the Companies, (d) resolutions adopted by the
Boards of Directors of the Companies, (e) the Indenture dated December 16, 1997
(the "Indenture"), between PLATINUM International and American National Bank and
Trust Company of Chicago, as Trustee (the "Trustee"), relating to the Notes, (f)
the Supplemental Indenture, dated as of December 31, 1998, among PLATINUM
International, PLATINUM technology, inc., PLATINUM technology IP inc., and the
Trustee, and (g) the form of Note attached as Exhibit A to the Indenture.
<PAGE>
In connection with this opinion, we have assumed the accuracy and
completeness of all documents and records that we have reviewed, the genuineness
of all signatures, the authenticity of the documents submitted to us as
originals and the conformity to authentic original documents of all documents
submitted to us as certified, conformed or reproduced copies.
Based upon and subject to the foregoing, it is our opinion that:
(1) The Notes have been duly authorized by all requisite corporate action
and are binding obligations of the Companies entitled to the benefits of the
Indenture, except (i) as enforceability may be limited by the effects of
bankruptcy, insolvency, reorganization, receivership, moratorium and other
similar laws affecting the rights and remedies of creditors generally; (ii) as
enforceability may be limited by the effects of general principles of equity,
whether applied by a court of law or equity; (iii) as rights to indemnity or
contribution under the same may be limited by federal or state securities laws
or the public policy underlying such laws; and (iv) that we express no opinion
as to the waiver of the defense of usury; and
(2) The Conversion Shares have been duly authorized and, when issued by
PLATINUM International upon the conversion of Notes in accordance with their
terms and the terms of the Indenture, will be validly issued, fully paid and
non-assessable.
Our opinions expressed above are limited to the General Corporation Law of
the State of Delaware and the laws of the State of New York, and we do not
express any opinion concerning any other laws. This opinion is given as of the
date hereof, and we assume no obligation to advise you of changes that may
hereafter be brought to our attention.
We hereby consent to use of our name under the heading "Legal Matters" in
the Prospectus forming a part of the Registration Statement and to use of this
opinion for filing as Exhibit 5 to the Registration Statement.
Very truly yours,
/s/ KATTEN MUCHIN & ZAVIS
2
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
PLATINUM technology International, inc.:
We consent to the use of our reports dated February 8, 1999, except for Note 19,
which is as of March 29, 1999, relating to the consolidated balance sheets of
PLATINUM technology, International, inc. and subsidiaries as of December 31,
1998 and 1997, and the related consolidated statements of operations,
comprehensive loss, stockholders' equity, and cash flows for each of the years
in the three-year period ended December 31, 1998, and the related consolidated
financial statement schedule, incorporated by reference in this registration
statement on Form S-3 from PLATINUM technology International, inc.'s annual
report on Form 10-K for the year ended December 31, 1998 and to the reference of
our firm under the heading "Experts." Our reports were based in part on the
reports of other auditors.
/s/ KPMG LLP
Chicago, Illinois
April 19, 1999
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-3 (expected to be filed by
PLATINUM technology International, inc. on April 23, 1999) of our report dated
January 19, 1998, for Mastering, Inc. included in PLATINUM technology
International, inc.'s Annual Report on Form 10-K dated February 8, 1999 and to
all references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
Denver, Colorado,
April 19, 1999.
<PAGE>
Exhibit 23.3
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3 No. 333-00000) and related Prospectus of
PLATINUM technology International, inc. for the registration of $56,750,000 of
its convertible subordinated notes and 1,574,093 shares of its Common Stock and
to the incorporation by reference therein of our report dated February 10, 1998,
except for Note 14, as to which the date is March 14, 1998, with respect to the
consolidated financial statements of Logic Works, Inc. and subsidiaries included
in the Annual Report (Form 10-K) of PLATINUM technology International, inc.,
filed with the securities and Exchange Commission on March 31, 1999.
/s/ Ernst & Young LLP
MetroPark, New Jersey
April 19, 1999
