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As Filed with the Securities and Exchange Commission on February 29, 2000
Registration No. 333-95097
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
Form S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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MERCURY INTERACTIVE CORPORATION
(Exact name of Registrant as specified in its charter)
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<TABLE>
<S> <C>
Delaware 77-0224776
(State or other jurisdiction of (I.R.S. Employer
incorporation organization) Identification Number)
</TABLE>
1325 Borregas Avenue
Sunnyvale, California 94089
(408) 822-5200
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
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AMNON LANDAN
Chairman of the Board, President and Chief Executive Officer
1325 Borregas Avenue
Sunnyvale, California 94089
(408) 822-5200
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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SUSAN J. SKAER, ESQ.
GENERAL COUNSEL ASSOCIATES LLP
1891 Landings Drive
Mountain View, California 94043
(650) 428-3900
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
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. [_]
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>
<CAPTION>
Title of Proposed maximum Proposed maximum Amount of
securities to Amount to be offering price per aggregate offering registration fee
be registered registered share (1) price (1) (2)
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<S> <C> <C> <C> <C>
Common stock, $.002 par
value................. 387,892 $93.625 $36,316,389 $9,587.53
</TABLE>
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(1) Estimated solely for purposes of calculation of the registration fee.
(2) Computed pursuant to Rule 457(c) based upon the average high and low sales
prices reported on the Nasdaq National Market for January 14, 2000. The
registration fee was previously paid with this Registration Statement.
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The Registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said section 8(a),
may determine.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY +
+NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN +
+OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE +
+SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Preliminary, Subject to Completion, Dated February 29, 2000
PROSPECTUS
387,892 Shares
MERCURY INTERACTIVE CORPORATION
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Common Stock
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This prospectus relates to the public offering, which is not being
underwritten, of 387,892 shares of our common stock which is held by some of
our current shareholders.
The prices at which such shareholders may sell the shares will be determined
by the prevailing market price for the shares or in negotiated transactions. We
will not receive any of the proceeds from the sale of the shares.
Our common stock is quoted on the Nasdaq National Market under the symbol
"MERQ." On February 25, 2000, the average of the high and low price for the
common stock was $91.21875.
Investing in our common stock involves risks. See the section entitled "Risk
Factors" beginning on page 3 of this prospectus for certain risks and
uncertainties that you should consider.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this Prospectus. Any representation to the contrary is
a criminal offense.
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The date of this prospectus is February [ ], 2000.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Where You Can Find More Information........................................ 1
The Company................................................................ 2
Risk Factors............................................................... 3
Plan of Distribution....................................................... 8
Selling Shareholders....................................................... 10
Legal Matters.............................................................. 12
Experts.................................................................... 12
</TABLE>
No person is authorized to give any information or to make any
representations, other than those contained in this prospectus, in connection
with the offering described herein, and, if given or made, such information or
representations must not be relied upon as having been authorized by Mercury or
the selling shareholders. This prospectus does not constitute an offer to sell,
or a solicitation of an offer to buy, nor shall there be any sale of these
securities by any person in any jurisdiction in which it is unlawful for such
person to make such offer, solicitation or sale. Neither the delivery of this
prospectus nor any sale made hereunder shall under any circumstances create an
implication that the information contained herein is correct as of any time
subsequent to the date hereof.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the operation
of the Public Reference Room. Our SEC filings are also available to the public
from the SEC's web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information filed with the
SEC will update and supersede this information. We incorporate by reference the
documents listed below and any future filings made with the SEC under Section
13a, 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 until our
offering is completed.
(a) Annual Report on Form 10-K for the fiscal year ended December 31,
1998, filed March 31, 1999, including certain information in Mercury's
Definitive Proxy Statement in connection with Mercury's 1999 Annual Meeting
of Shareholders;
(b) Mercury's Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 1999 filed May 17, 1999;
(c) Mercury's Quarterly Report on Form 10-Q for the fiscal quarter ended
June 30, 1999 filed August 16, 1999;
(d) Mercury's Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 1999 filed November 15, 1999;
(e) Mercury's Current Report on Form 8-K filed January 19, 2000;
(f) The description of Mercury Interactive Common Stock contained in its
registration statement on Form 8-A filed September 9, 1993, including any
amendments or reports filed for the purpose of updating such descriptions;
and
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(g) The description of Mercury's Preferred Stock Purchase Rights,
contained in its registration statement on Form 8-A filed on July 8, 1996,
including any amendments or reports filed for the purpose of updating such
description.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Director of Investor Relations
Mercury Interactive Corporation
1325 Borregas Avenue
Sunnyvale, CA 94089
408-822-5200
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have authorized
no one to provide you with different information. We are not making an offer
of these securities in any state where the offer is not permitted. You should
not assume that the information in this prospectus or any prospectus
supplement is accurate as of any date other than the date on the front of the
document.
THE COMPANY
Mercury's principal executive offices are located at 1325 Borregas Avenue,
Sunnyvale, California 94089 and its telephone number at that address is (408)
822-5200.
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RISK FACTORS
This offering involves a high degree of risk. You should carefully consider
the risks described below and the other information in this prospectus before
deciding to invest in shares of our common stock. Our business, operating
results and financial condition could be adversely affected by any of the
following risks. The trading price of our common stock could decline due to any
of these risks, and you could lose all or part of your investment. You should
also refer to the other information set forth or incorporated by reference in
this prospectus, including our financial statements and the related notes.
This prospectus also contains forward-looking statements that involve risks
and uncertainties. These statements relate to our future plans, objectives,
expectations and intentions, and the assumptions underlying or relating to any
of these statements. These statements may be identified by the use of words
such as "expects," "anticipates," "intends," and "plans" and similar
expressions. Our actual results could differ materially from those discussed in
these statements. Factors that could contribute to such differences include,
but are not limited to, those discussed below and elsewhere in this prospectus.
Mercury's business will suffer if it does not successfully respond rapidly
to technological changes. The market for our software products is characterized
by:
. rapidly changing technology;
. frequent introduction of new products by our competitors;
. changes in customer requirements; and
. changes in industry standards and practices.
We must continually improve the performance, features and reliability of our
products, particularly in response to competitive offerings. Our success
depends, in part, on our ability to enhance our existing automated software
quality testing and application performance management products and to develop
new products and services, functionality and technology that address the
increasingly sophisticated and varied needs of our prospective customers. If we
don't properly identify the feature preferences of prospective customers, or if
we fail to deliver product features which meet the standards of these
customers, our ability to market our service successfully and to increase our
revenues could be impaired. The development of proprietary technology and
necessary product and service enhancements entail significant technical and
business risks and require substantial expenditures and lead-time. We may not
be able to keep pace with the latest technological developments. We may also
not be able to use new technologies effectively or adapt our services to
customer requirements or emerging industry standards. If we cannot, for
technical, legal, financial or other reasons, adapt or respond in a cost-
effective and timely manner to changing market conditions or customer
requirements, our business and operating results would suffer.
You should expect that our operating results may fluctuate in future
periods. Mercury may experience significant fluctuations in future quarterly
operating results. A number of factors, many of which are outside of our
control, are likely to cause fluctuations in operating results:
. the demand for our products;
. our success in developing new products;
. delays in our introduction of new products or product enhancements;
. software bugs or other product quality problems;
. the pricing policies of our competitors;
. new product introductions by our competitors;
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. the amount and timing of operating costs and capital expenditures
relating to expansion of our business;
. customer order deferrals in anticipation of new products or product
enhancements; and
. reduction in demand for automated software testing or application
performance management products.
Mercury believes that period-to-period comparisons of its results of
operations are not necessarily meaningful and should not be relied upon as
indications of future performance.
We expect increasing competition in the future. Mercury expects to face
increasing competition in the automated software testing and application
performance management markets. The Internet has substantially changed the
competitive landscape by lowering barriers to entry and making it easier for
smaller companies to compete in the testing and application performance
management areas. We may not be able to respond quickly enough to competitive
product offerings to be able to compete successfully in the future.
We depend on our distribution channels for a substantial portion of our
revenue. We derive a substantial portion of our revenues from sales of our
products through alternate distribution channels such as referral partners,
system integrators, and value-added resellers. Mercury expects that sales of
its products through these distribution channels will continue to account for a
substantial portion of our revenues for the foreseeable future. Our dependence
on such partners is subject to a number of risks:
. Each of Mercury's system integrators and value added resellers can cease
marketing Mercury's products with limited notice and with little or no
penalty;
. Mercury's current system integrators and value added resellers may not
be able to effectively sell our new products or product applications;
. Mercury may not be able to recruit additional or replacement system
integrators and value added resellers if we lose any of our current
partners;
. Mercury's system integrators and value added resellers also offer
competitive products manufactured by third parties; or
. Mercury's system integrators and value added resellers may not give
priority to the marketing of Mercury's products as compared to our
competitors' products.
The loss of one or more of our major system integrators and value added
resellers or any reduction or delay in sales of Mercury products by our system
integrators and value added resellers could result in revenue shortfalls in
future periods.
We are dependent on our international operations for a substantial portion
of its revenues. Sales to customers located outside the United States have
historically accounted for a significant percentage of revenue and Mercury
anticipates that such sales will continue to be a significant percentage of
Mercury's total revenue. The risks of doing business internationally, include:
. unexpected changes in regulatory requirements and tariffs;
. export restrictions;
. political and economic instability;
. difficulties in staffing and managing foreign operations;
. reduced protection for intellectual property rights in some countries;
. longer payment cycles;
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. problems in collecting accounts receivable;
. potentially adverse tax consequences;
. seasonal reductions in business activity during the summer months in
Europe and certain other parts of the world; and
. fluctuations in currency exchange rates may make Mercury products more
expensive to international customers; and
Any of these risks could harm our international operations and cause lower
international sales. For example, some European countries already have laws and
regulations related to technologies used on the Internet that are more strict
than those currently in force in the United States. Any or all of these factors
could cause our business and prospects to suffer.
Our financial results may be negatively impacted by foreign currency
fluctuations. Since certain of Mercury's sales are made in currencies other
than the U.S. Dollar and our financial results are reported in U.S. Dollars,
fluctuations in the rates of exchange between the U.S. Dollar and other
currencies may effect Mercury's results of operations, including:
. an increase in the value of a particular currency relative to the U.S.
Dollar will increase the U.S. Dollar reporting value for transactions in
such currency;
. a decrease in the value of such currency relative to the U.S. Dollar
will decrease the U.S. Dollar reporting value for transactions in such
currency; and
. Mercury incurs expenses in Pacific Rim and European currencies,
primarily for employee salaries and marketing and sales expenses, as a
result, an increase in the value of Pacific Rim and European currencies
in comparison to the U.S. Dollar could increase sales and marketing
costs.
As Mercury continues to expand its international operations, Mercury expects
to see an increase in exposures related to non-dollar denominated sales. We
attempt to limit foreign exchange exposure through operational strategies and
by using forward contracts to offset the effects of exchange rate changes on
intercompany trade balances. This requires us to estimate the volume of
transactions in various currencies. We may not be successful in making these
estimates. If these estimates are overstated or understated during periods of
currency volatility, Mercury could experience material currency gains or
losses.
We may have difficulty managing our growth. Since 1991, Mercury has
experienced significant annual increases in revenue. This growth has placed
and, if it continues, will place a significant strain on Mercury's management,
resources and operations. To accommodate its growth, Mercury is implementing a
variety of new or expanded business and financial systems, procedures and
controls, including the improvement of our accounting, and customer support
systems. The implementation of these systems, procedures and controls may not
be completed successfully, or may disrupt Mercury's operations. Any failure by
us to properly manage these systems and procedural transitions could impair our
ability to attract and service customers, and could cause us to incur higher
operating costs and delays in the execution of our business plan. We must hire,
train and manage substantial numbers of new employees. The market has become
increasingly competitive both in the United States and internationally and may
require Mercury to pay higher salaries. Our management may not be able to hire,
train, retain, motivate and manage required personnel. If we cannot manage
growth effectively, our business and operating results could suffer.
We depend on our senior key personnel. We depend on the continued services
and performance of our senior management and other key personnel. We do not
have long term employment agreements with any of our key personnel. The loss of
any of our executive officers or other key employees could hurt our business.
Our stock price is highly volatile. The trading price of our common stock
has been and is likely to continue to be highly volatile. For example, during
the 52-week period ended February 28, 2000 (as adjusted for the 2-for-1 split
of our common stock on February 11, 2000), the reported closing prices of our
common stock were as high as $96.00 and as low as $10.50 per share. Mercury's
stock price has increased substantially
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in the last two years but has remained volatile. Mercury's stock price is
subject to wide fluctuations in response to a variety of factors that could
make the price fall including:
. quarterly variations in operating results;
. announcements of technological innovations;
. announcements of new software or services by Mercury or its competitors;
. changes in financial estimates by securities analysts; or
. news reports related to trends in the software or Internet software
market.
In addition, the stock market has experienced significant price and volume
fluctuations that have particularly affected the trading prices of equity
securities of many high technology companies. These fluctuations have often
been unrelated or disproportionate to the operating performance of these
companies. Any negative change in the public's perception of software or
Internet software companies could depress Mercury's stock price regardless of
its operating results.
Recently, when the market price of a stock has been volatile, holders of
that stock have often instituted securities class action litigation against the
company that issued the stock. If any of Mercury's shareholders brought such a
lawsuit against Mercury, it could incur substantial costs defending the
lawsuit. The lawsuit could also divert the time and attention of Mercury's
management.
Acquisitions Mercury has made and may make in the future could disrupt its
business or not be successful and harm its financial condition. Mercury has in
the past, and intends in the future, to acquire or make investments in other
complementary companies, products and technologies. Mercury recently acquired
Conduct Ltd. In the event of any future acquisitions or investments, Mercury
could:
. issue stock that would dilute the ownership of its then existing
shareholders;
. incur debt;
. assume liabilities;
. incur amortization expense related to goodwill and other intangible
assets; or
. incur large and immediate write-offs.
These acquisitions and investments also involve numerous risks, including:
. problems integrating the operations, technologies or products purchased
with those Mercury already has;
. unanticipated costs and liabilities;
. diversion of management's attention from Mercury's core business;
. adverse effects on existing business relationships with suppliers and
customers;
. risks associated with entering markets in which Mercury has no or
limited prior experience; and
. potential loss of key employees, particularly those of the acquired
organizations.
If we fail to adequately protect our proprietary rights our competitive
position would be harmed. Mercury relies on a combination of patents,
copyrights, trademark, service mark and trade secret laws and contractual
restrictions to establish and protect proprietary rights in its products and
services. However, Mercury will not be able to protect its intellectual
property if it is unable to enforce its rights or if it does not detect
unauthorized use of its intellectual property.
Mercury holds five patents for elements contained in certain of its
products, and we have filed several other U.S. patent applications on various
elements of its products. We cannot assure you that Mercury's patent
applications will result in issued patents or that, if issued, the patents
would be upheld if challenged.
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Mercury has applied for trademarks and service marks on certain terms and
symbols that it believes are important for its business. Mercury also has one
registered copyright. In addition, we generally enter into confidentiality or
license agreements with our employees and consultants and with our customers
and corporations with whom we have strategic relationships, and we attempt to
maintain control over access to and distribution of our software documentation
and other proprietary information. However, the steps we have taken to protect
our technology or intellectual property may be inadequate. Our competitors may
independently develop technologies that are substantially equivalent or
superior to Mercury's. Moreover, in other countries where we do business, there
may not be effective legal protection of patents and other proprietary rights
that we believe are important to our business.
Mercury's commercial success will also depend in part on not infringing the
proprietary rights of others and not breaching technology licenses that cover
technology used in its products. It is uncertain whether any third party
patents will require Mercury to develop alternative technology or to alter its
products or processes, obtain licenses or cease activities that infringe on
third party's intellectual property rights. If any such licenses are required,
they may be very costly or Mercury may not be able to obtain such licenses at
all. Mercury's failure to obtain a license to any technology that it may
require to commercialize its products and services could cause its business and
prospects to suffer.
In addition, litigation may be necessary in the future to enforce our
intellectual property rights, to protect our trade secrets, to determine the
validity and scope of the proprietary rights of others or to defend against
claims of infringement or invalidity. Litigation like this, whether successful
or unsuccessful, could result in substantial costs and diversions of our
management resources, either of which could harm our business.
Mercury's products may contain product errors which could subject Mercury to
product liability claims. Mercury's products may contain undetected errors or
failures when first introduced or as new versions are released, which can
result in loss of or delay in market acceptance and could adversely impact
future operating results. In selling its products, Mercury frequently relies on
"shrink wrap" licenses that are not signed by licensees, the provisions in such
licenses limiting Mercury's exposure to potential product liability claims may
therefore be unenforceable under the laws of certain jurisdictions. Mercury
currently carries errors and omissions insurance against such claims, however,
we cannot assure you that such insurance will continue to be available on
acceptable terms, if at all, or that such insurance will provide Mercury with
adequate protection against product liability or other claims. In the event of
a products liability claim, Mercury may be found liable and required to pay
damages which could materially affect Mercury's financial condition.
Operations in Israel may be affected by volatile economic, political and
military conditions. Mercury's research and development operations are
primarily located in Israel and may be affected by economic, political and
military conditions in that country. Mercury's business is also dependent on
trading relationships between Israel and other countries. Accordingly,
Mercury's operations could be adversely affected if major hostilities involving
Israel should occur or if trade between Israel and its current trading partners
were interrupted or curtailed. This risk is heightened due to the restrictions
on Mercury's ability to manufacture or transfer outside of Israel any
technology developed under research and development grants from the government
of Israel as described in the risk factor below. Additionally, Mercury
participates in special Israeli government programs that provide significant
tax advantages. The loss of or any material decrease in these tax benefits
could negatively affect our financial results.
Mercury is subject to restrictions imposed by grants from the government of
Israel. Since its inception, Mercury has obtained royalty-bearing grants from
various Israeli government agencies. Mercury received and recognized $1.6
million in such grants in 1998; however, it has not applied nor does it
currently anticipate applying for future grants. Mercury believes these grants
are no longer needed to subsidize Mercury's research and development projects.
The terms of certain grants prohibit the manufacture of products developed
under these grants outside of Israel and the transfer of technology developed
pursuant to the terms of these grants to any person, without the prior written
consent of the government of Israel. As a result, if Mercury is unable to
obtain the consent of the government of Israel, Mercury may not be able to take
advantage of strategic manufacturing and other opportunities outside of Israel.
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PLAN OF DISTRIBUTION
Mercury is registering all 387,892 shares on behalf of certain selling
shareholders. All of the shares were issued by us in connection with our
acquisition of Conduct, Ltd. Conduct Ltd. is now our wholly-owned subsidiary.
Mercury will receive no proceeds from this offering. The selling shareholders
named in the table below or pledgees, donees, transferees or other successors-
in-interest selling shares received from a named selling shareholder as a gift,
partnership distribution or other non-sale-related transfer after the date of
this prospectus (collectively, the Selling Shareholders) may sell the shares
from time to time. The Selling Shareholders will act independently of Mercury
in making decisions with respect to the timing, manner and size of each sale.
The sales may be made on one or more exchanges or in the over-the-counter
market or otherwise, at prices and at terms then prevailing or at prices
related to the then current market price, or in negotiated transactions. The
Selling Shareholders may effect such transactions by selling the shares to or
through broker-dealers. The shares may be sold by one or more of, or a
combination of, the following:
. a block trade in which the broker-dealer so engaged will attempt to sell
the shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction,
. purchases by a broker-dealer as principal and resale by such broker-
dealer for its account pursuant to this prospectus,
. an exchange distribution in accordance with the rules of such exchange,
. ordinary brokerage transactions and transactions in which the broker
solicits purchasers, and
. in privately negotiated transactions.
To the extent required, this prospectus may be amended or supplemented from
time to time to describe a specific plan of distribution. In effecting sales,
broker-dealers engaged by the Selling Shareholders may arrange for other
broker-dealers to participate in the resales.
The Selling Shareholders may enter into hedging transactions with broker-
dealers in connection with distributions of the shares or otherwise. In such
transactions, broker-dealers may engage in short sales of the shares in the
course of hedging the positions they assume with Selling Shareholders. The
Selling Shareholders also may sell shares short and redeliver the shares to
close out such short positions. The Selling Shareholders may enter into option
or other transactions with broker-dealers which require the delivery to the
broker-dealer of the shares. The broker-dealer may then resell or otherwise
transfer such shares pursuant to this prospectus. The Selling Shareholders also
may loan or pledge the shares to a broker-dealer. The broker-dealer may sell
the shares so loaned, or upon a default the broker-dealer may sell the pledged
shares pursuant to this prospectus.
Broker-dealers or agents may receive compensation in the form of
commissions, discounts or concessions from Selling Shareholders. Broker-dealers
or agents may also receive compensation from the purchasers of the shares for
whom they act as agents or to whom they sell as principals, or both.
Compensation as to a particular broker-dealer might be in excess of customary
commissions and will be in amounts to be negotiated in connection with the
sale. Broker-dealers or agents and any other participating broker-dealers or
the Selling Shareholders may be deemed to be "underwriters" within the meaning
of Section 2(11) of the Securities Act in connection with sales of the shares.
Accordingly, any such commission, discount or concession received by them and
any profit on the resale of the shares purchased by them may be deemed to be
underwriting discounts or commissions under the Securities Act. Because Selling
Shareholders may be deemed to be "underwriters" within the meaning of Section
2(11) of the Securities Act, the Selling Shareholders will be subject to the
prospectus delivery requirements of the Securities Act. In addition, any
securities covered by this prospectus which qualify for sale pursuant to Rule
144 promulgated under the Securities Act may be sold under Rule 144 rather than
pursuant to this prospectus. The Selling Shareholders have advised Mercury that
they have not entered into any agreements, understandings or arrangements with
any underwriters or broker-dealers regarding the sale of their securities.
There is no underwriter or coordinating broker acting in connection with the
proposed sale of shares by Selling Shareholders.
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The shares will be sold only through registered or licensed brokers or
dealers if required under applicable state securities laws. In addition, in
certain states the shares may not be sold unless they have been registered or
qualified for sale in the applicable state or an exemption from the
registration or qualification requirement is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the shares may not simultaneously engage in
market making activities with respect to our common stock for a period of two
business days prior to the commencement of such distribution. In addition, each
Selling Shareholder will be subject to applicable provisions of the Exchange
Act and the associated rules and regulations under the Exchange Act, including
Regulation M, which provisions may limit the timing of purchases and sales of
shares of our common stock by the Selling Shareholders. Mercury will make
copies of this prospectus available to the Selling Shareholders and has
informed the of the need for delivery of copies of this prospectus to
purchasers at or prior to the time of any sale of the shares.
Mercury will file a supplement to this prospectus, if required, pursuant to
Rule 424(b) under the Securities Act upon being notified by a Selling
Shareholder that any material arrangement has been entered into with a broker-
dealer for the sale of shares through a block trade, special offering, exchange
distribution or secondary distribution or a purchase by a broker or dealer.
Such supplement will disclose:
. the name of each such Selling Shareholder and of the participating
broker-dealer(s),
. the number of shares involved,
. the price at which such shares were sold,
. the commissions paid or discounts or concessions allowed to such broker-
dealer(s), where applicable,
. that such broker-dealer(s) did not conduct any investigation to verify
the information set out or incorporated by reference in this prospectus,
and
. other facts material to the transaction.
Mercury will bear all costs, expenses and fees in connection with the
registration of the shares. The Selling Shareholders will bear all commissions
and discounts, if any, attributable to the sales of the shares. The Selling
Shareholders may agree to indemnify any broker-dealer or agent that
participates in transactions involving sales of the shares against certain
liabilities, including liabilities arising under the Securities Act.
9
<PAGE>
SELLING SHAREHOLDERS
The table below lists the selling shareholders, the number of shares of
Mercury common stock which each owned prior to the offering, the number of
shares of Mercury common stock subject to sale pursuant to this prospectus, and
the number of the shares of Mercury common stock which each would own assuming
that such number of shares were offered and assuming the sale of all such
shares permitted to be sold.
<TABLE>
<CAPTION>
Shares Shares to be Shares
Beneficially Owned Sold in the Beneficially Owned
Selling Shareholders (1) Prior to Offering Offering After the Offering
------------------------ ------------------ ------------ ------------------
<S> <C> <C> <C>
Isaac Appelbaum............ 584 584 0
837 Longridge Road
Oakland, CA 94610
Sharon Azulai.............. 25,840 25,840 0
1035 Aster Avenue #2198
Sunnyvale, CA 94086
David Barzilai............. 25,840 25,840 0
923 Kintyre Way
Sunnyvale, CA 94087
David J. Blumberg.......... 3,640 3,640 0
580 Howard Street #401
San Francisco, CA 94105-
3002
Cassin 1997 Charitable
Trust..................... 5,822 5,822 0
UTA dated 1/28/97
Brendan Joseph Cassin,
Trustee
3000 Sand Hill Road
Suite 3-210
Menlo Park, CA 94025
The Cassin Foundation...... 4,658 4,658 0
Attn: Brendan Joseph
Cassin
3000 Sand Hill Road
Suite 3-210
Menlo Park, CA 94025
Donald L. Lucas............ 15,009 15,009 0
SUCCTTEE, Donald L. Lucas
Profit
Sharing Trust DTD 1-1-84
3000 Sand Hill Road
Suite 3-210
Menlo Park, CA 94025
Forval Creative, Inc....... 58,697 58,697 0
5-52-2 Jingumae
Shibuya-ku
Tokyo 150-0001
Japan
Investec Clali Trust
Company Ltd............... 236 236 0
C/o Iris Shlevin
29 Yavne Street
Tel Aviv, Israel
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Shares Shares to be Shares
Beneficially Owned Sold in the Beneficially Owned
Selling Shareholders (1) Prior to Offering Offering After the Offering
------------------------ ------------------ ------------ ------------------
<S> <C> <C> <C>
Ran Levy................... 26,986 26,986 0
Palmah Street 8
Herzliya 46793
Israel
RWI Group II, L.P.......... 27,819 27,819 0
c/o Mr. Donald A. Lucas
720 University Avenue
# 103
Palo Alto, CA 94301
Sand Hill Financial
Company................... 11,646 11,646 0
3000 Sand Hill Road
# 3-210
Menlo Park, CA 94025
Santa Clara University..... 2,329 2,329 0
c/o Paul Locatelli, S.J.
President
500 El Camino Real
Santa Clara, CA 95053
Susan J. Skaer Esq. (FBO
Sharon Azulai)............ 13,140 13,140 0
c/o General Counsel
Associates LLP
1891 Landings Drive
Mountain View, CA 94043
Susan J. Skaer Esq. (FBO
David Barzilai)........... 13,140 13,140 0
c/o General Counsel
Associates LLP
1891 Landings Drive
Mountain View, CA 94043
Tida Shamir................ 1,322 1,322 0
3A Jabotinsky Street
Diamond Tower, 25th Floor
Ramat-Gan 52520
Israel
St. Francis Growth Fund.... 1,164 1,164 0
c/o Kevin Makley
1885 Miramonte Avenue
Mountain View, CA 94040
Saint Mary's College of
California................ 1,164 1,164 0
c/o Mr. William McCleod
P.O. Box 3554
Moraga, CA 94575
Silicon Valley Bancshares.. 1,958 1,958 0
Attn: Pete Lopez
Silicon Valley Bank
3003 Tasman Drive
Santa Clara, CA 95054
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
Shares Shares to be Shares
Beneficially Owned Sold in the Beneficially Owned
Selling Shareholders (1) Prior to Offering Offering After the Offering
------------------------ ------------------ ------------ ------------------
<S> <C> <C> <C>
Gil Sudai.................. 1,772 1,772 0
347 Fern Street
San Francisco, CA 94109
Telos Venture Partners
L.P....................... 106,778 106,778 0
c/o Mr. Bruce Bourbon
2350 Mission College Blvd.
Suite 1070
Santa Clara, CA 95054
Teton Capital Company...... 31,443 31,443 0
c/o Mr. Donald L. Lucas
3000 Sand Hill Road
# 3-210
Menlo Park, CA 94025
Roy Twersky................ 2,817 2,817 0
1040 Dolores Street
Apt. 202
San Francisco, CA 94110
Unicycle Trading Company... 2,924 2,924 0
c/o Michael Chasalow
2938 Wicklow Road
Los Angeles, CA 90064
Bert L. Zaccaria........... 1,164 1,164 0
3000 Sand Hill Road
# 3-210
Menlo Park, CA 94025
Totals..................... 387,892 387,892 0
</TABLE>
- --------
(1) The selling shareholders each own less than 1% of the outstanding shares of
common stock of Mercury. The selling shareholders are former shareholders
of Conduct, Ltd.
LEGAL MATTERS
Counsel for Mercury, General Counsel Associates LLP, 1891 Landings Drive,
Mountain View, California 94043, has rendered an opinion to the effect that the
common stock offered hereby is duly and validly issued, fully paid and non-
assessable.
EXPERTS
The financial statements incorporated in this prospectus by reference to the
Annual Report on Form 10-K of Mercury Interactive Corporation for the year
ended December 31, 1998 and the audited historical financial statements
included in Mercury Interactive Corporation's Current Report on Form 8-K dated
January 19, 2000 have been so incorporated in reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in accounting and auditing.
12
<PAGE>
MERCURY INTERACTIVE CORPORATION
REGISTRATION STATEMENT ON FORM S-3
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14 Other Expenses of Issuance and Distribution.*
The following table sets forth costs and expenses of the sale and
distribution of the securities being registered. All amounts except Securities
and Exchange Commission and National Association of Securities Dealers fees are
estimates.
<TABLE>
<S> <C>
Registration fee--Securities and Exchange Commission............. $ 9,587.53
National Association of Securities Dealers fees.................. 8,160.00
Accounting fees.................................................. 10,000.00
Legal fees....................................................... 10,000.00
Miscellaneous.................................................... 3,000.00
----------
Total.......................................................... $40,747.53
</TABLE>
- --------
* Represents expenses relating to the distribution by the selling shareholders
pursuant to the prospectus prepared in accordance with the requirements of
Form S-3. These expenses will be borne by Mercury on behalf of the selling
shareholders.
Item 15 Indemnification of Directors and Officers.
As permitted by the Delaware General Corporation Law, Mercury has included
in its certificate of incorporation a provision to eliminate the personal
liability of its directors for monetary damages for breach or alleged breach of
their fiduciary duties as directors, subject to certain exceptions. In
addition, the bylaws of Mercury provide that Mercury is required to indemnify
its officers and directors under certain circumstances, including the
circumstances in which indemnification would otherwise be discretionary, and
Mercury is required to advance expenses to its officers and directors as
incurred in connection with proceedings against them for which they may be
indemnified. Mercury has entered into indemnification agreements with its
officers and directors containing provisions that are in some respects broader
than the specific indemnification provisions contained in the Delaware General
Corporation Law. The indemnification agreements may require Mercury, among
other things, to idemnify such officers and directors against certain
liabilities that may arise by reason of their status or service as directors or
officers (other than liabilities arising from willful misconduct of a culpable
nature), to advance expenses incurred as a result of any proceeding against
them as to which they could be indemnified, and to obtain directors' and
officers' insurance if available on reasonable terms. Mercury believes that its
charter provisions and indemnification agreements are necessary to attract and
retan qualified persons as directors and officers. Mercury understands that the
staff of the Securities and Exchange Commission is of the opinion that
statutory charter and contractual provisions as are described above have no
effect on claims arising under the federal securities law.
Item 16 Exhibits.
<TABLE>
<CAPTION>
Exhibit
Number
-------
<C> <S>
4.1(/1/) Certificate of Amendment of Restated Certificate of Incorporation of
Registrant
5.1(/1/) Opinion of General Counsel Associates LLP
23.1 Consent of Independent Accountants
23.2(/1/) Consent of General Counsel Associates LLP (Included in Exhibit 5.1)
24.1(/1/) Power of Attorney (contained on Page II-3)
</TABLE>
- --------
(1) Previously filed with the Registration Statement on Form S-3 (No. 333-
95097).
II-1
<PAGE>
Item 17 Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement (i) to include
any prospectus required by Section 10(a)(3) of the Securities Act of 1933,
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate
represent a fundamental change in the information set forth in the
registration statement, and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended
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.
The undersigned hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange
Act of 1934, as amended (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934, as amended) 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
as that time shall be deemed to be the initial bona fide offering thereof.
The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Mercury Interactive Corporation, a corporation organized and existing under the
laws of the State of Delaware, certifies that it has reasonable cause to
believe that it meets all of the requirements for filing on Form S-3 and has
duly caused this Amendment No. 1 to the Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Sunnyvale, State of California, on February 29, 2000.
Mercury Interactive Corporation
*
By: _________________________________
Sharlene Abrams,
Vice President of Finance and
Administration,
Chief Financial Officer and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
* President, Chief Executive Officer February 29, 2000
____________________________________ and Chairman of the Board of
(Amnon Landan) Directors (Principal Executive
Officer)
* Vice President of Finance and February 29, 2000
____________________________________ Administration and Chief Financial
(Sharlene Abrams) Officer (Principal Financial and
Accounting Officer) and Secretary
* Director February 29, 2000
____________________________________
(Igal Kohavi)
* Director February 29, 2000
____________________________________
(Yair Shamir)
* Director February 29, 2000
____________________________________
(Giora Yaron)
</TABLE>
<TABLE>
<S> <C>
/s/ Susan J. Skaer
*By: _________________________________
Susan J. Skaer
Attorney-in-Fact
</TABLE>
II-3
<PAGE>
MERCURY INTERACTIVE CORPORATION
REGISTRATION STATEMENT ON FORM S-3
February 29, 2000
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number
-------
<C> <S>
23.1 Consent of Independent Accountants.
</TABLE>
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated January 28, 1999, except as to the
pooling of interests with Conduct, Ltd., which is as of January 19, 2000,
relating to the financial statements of Mercury Interactive Corporation which
appear in the Current Report on Form 8-K dated January 19, 2000. We also
consent to the reference to us under the heading "Experts" in such Registration
Statement.
/s/ PricewaterhouseCoopers LLP
San Jose, California
February 29, 2000
1
